HMC 6-K 2023 - Equibles

No.1-7628

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

FOR THE MONTH OF FEBRUARY 2023

COMMISSION FILE NUMBER: 1-07628

HONDA GIKEN KOGYO KABUSHIKI KAISHA

(Name of registrant)

HONDAMOTOR CO., LTD.

(Translation of registrant’s name into English)

1-1, Minami-Aoyama 2-chome,Minato-ku, Tokyo 107-8556, Japan

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F ☒ Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

Contents

Exhibit 1:

Honda Motor Co., Ltd. filed its consolidated interim financial statements for the fiscal third quarter ended December 31, 2022 with Financial Services Agency in Japan.

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<br><br><br>( HONDA MOTOR CO., LTD. )
/s/ Masaharu Hirose
Masaharu Hirose
General Manager
Finance Division
Honda Motor Co., Ltd.

Date: February 21, 2023

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Interim Financial Statements

December 31, 2022

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Consolidated Financial Results

Overview of Operating Performance

Honda’s consolidated sales revenue for the nine months ended December 31, 2022 increased by 17.3%, to ¥12,523.4 billion from the same period last year, due mainly to increased sales revenue in Motorcycle business as well as positive foreign currency translation effects. Operating profit increased by 9.3%, to ¥733.9 billion from the same period last year, due mainly to positive foreign currency effects, which was partially offset by decreased profit attributable to sales impacts. Profit before income taxes increased by 1.7%, to ¥859.3 billion from the same period last year. Profit for the period attributable to owners of the parent increased by 0.2%, to ¥583.1 billion from the same period last year.

Business Segments

Motorcycle Business

For the nine months ended December 31, 2021 and 2022

	Units (thousands)
	Honda Group Unit Sales*										Consolidated Unit Sales*
	Nine monthsended<br>Dec. 31, 2021		Nine months<br>ended<br>Dec. 31, 2022		Change			%			Nine months<br>ended<br>Dec. 31, 2021		Nine months<br>ended<br>Dec. 31, 2022		Change			%
Motorcycle Business	****	12,775	****	14,285	****	1,510	****	****	11.8	****	****	7,964	****	9,570	****	1,606	****	****	20.2	****
Japan		180		179		(1	)		(0.6	)		180		179		(1	)		(0.6	)
North America		332		339		7			2.1			332		339		7			2.1
Europe		240		223		(17	)		(7.1	)		240		223		(17	)		(7.1	)
Asia		10,902		12,310		1,408			12.9			6,091		7,595		1,504			24.7
Other Regions		1,121		1,234		113			10.1			1,121		1,234		113			10.1
*	Honda Group Unit Sales is the total unit sales of completed motorcycle, ATV and<br>side-by-side products of Honda, its consolidated subsidiaries and its affiliates and joint ventures accounted for using the equity method. Consolidated Unit Sales is the<br>total unit sales of completed products corresponding to consolidated sales revenue to external customers, which consists of unit sales of completed products of Honda and its consolidated subsidiaries.
---	---

Sales revenue from external customers increased by 37.5%, to ¥2,202.3 billion from the same period last year, due mainly to an increase in consolidated unit sales as well as positive foreign currency translation effects. Operating profit increased by 62.0%, to ¥376.5 billion from the same period last year, due mainly to an increase in profit attributable to sales impacts and price and cost impacts as well as positive foreign currency effects.

Automobile Business

For the nine months ended December 31, 2021 and 2022

	Units (thousands)
	Honda Group Unit Sales*										Consolidated Unit Sales*
	Nine months<br>ended<br>Dec. 31, 2021		Nine months<br>ended<br>Dec. 31, 2022		Change			%			Nine months<br>ended<br>Dec. 31, 2021		Nine months<br>ended<br>Dec. 31, 2022		Change			%
Automobile Business	****	3,000	****	2,740	****	(260	)	****	(8.7	)	****	1,792	****	1,712	****	(80	)	****	(4.5	)
Japan		385		389		4			1.0			335		343		8			2.4
North America		978		860		(118	)		(12.1	)		978		860		(118	)		(12.1	)
Europe		76		63		(13	)		(17.1	)		76		63		(13	)		(17.1	)
Asia		1,465		1,341		(124	)		(8.5	)		307		359		52			16.9
Other Regions		96		87		(9	)		(9.4	)		96		87		(9	)		(9.4	)
*	Honda Group Unit Sales is the total unit sales of completed products of Honda, its consolidated subsidiaries and<br>its affiliates and joint ventures accounted for using the equity method. Consolidated Unit Sales is the total unit sales of completed products corresponding to consolidated sales revenue to external customers, which consists of unit sales of<br>completed products of Honda and its consolidated subsidiaries. Certain sales of automobiles that are financed with residual value type auto loans and others by our Japanese finance subsidiaries and provided through our consolidated subsidiaries are<br>accounted for as operating leases in conformity with IFRS and are not included in consolidated sales revenue to the external customers in our Automobile business. Accordingly, they are not included in Consolidated Unit Sales, but are included in<br>Honda Group Unit Sales of our Automobile business.
---	---

Sales revenue from external customers increased by 15.8%, to ¥7,723.5 billion from the same period last year, due mainly to positive foreign currency translation effects, which was partially offset by decreased consolidated unit sales. Operating profit decreased by 40.1%, to ¥112.9 billion from the same period last year, due mainly to decreased profit attributable to sales impacts, which was partially offset by positive foreign currency effects.

Financial Services Business

Sales revenue from external customers increased by 6.9%, to ¥2,261.0 billion from the same period last year, due mainly to positive foreign currency translation effects, which was partially offset by decreased operating lease revenues. Operating profit decreased by 14.6%, to ¥220.3 billion from the same period last year, due mainly to a decrease in profit attributable to decreased sales revenue, which was partially offset by positive foreign currency effects.

Power Product and Other Businesses

For the nine months ended December 31, 2021 and 2022

	Units (thousands)
	Honda Group Unit Sales / Consolidated Unit Sales*
	Nine months<br>ended<br>Dec. 31, 2021		Nine months<br>ended<br>Dec. 31, 2022		Change			%
Power Product Business	****	4,500	****	4,121	****	(379	)	****	(8.4	)
Japan		266		267		1			0.4
North America		2,092		1,724		(368	)		(17.6	)
Europe		762		773		11			1.4
Asia		1,073		1,047		(26	)		(2.4	)
Other Regions		307		310		3			1.0
*	Honda Group Unit Sales is the total unit sales of completed power products of Honda, its consolidated<br>subsidiaries and its affiliates and joint ventures accounted for using the equity method. Consolidated Unit Sales is the total unit sales of completed power products corresponding to consolidated sales revenue to external customers, which consists<br>of unit sales of completed power products of Honda and its consolidated subsidiaries. In Power Product business, there is no discrepancy between Honda Group Unit Sales and Consolidated Unit Sales since no affiliate and joint venture accounted for<br>using the equity method were involved in the sale of Honda power products.
---	---

Sales revenue from external customers increased by 15.3%, to ¥336.4 billion from the same period last year, due mainly to positive foreign currency translation effects. Operating profit was ¥24.1 billion, an increase of ¥31.5 billion from the same period last year, due mainly to increased profit attributable to sales impacts as well as positive foreign currency effects. In addition, operating loss of aircraft and aircraft engines included in Power product and other businesses was ¥18.6 billion, an improvement of ¥4.9 billion from the same period last year, due mainly to decreased operating costs, which was partially offset by decreased profit attributable to negative foreign currency translation effects.

Cash Flows

Consolidated cash and cash equivalents on December 31, 2022 decreased by ¥79.8 billion from March 31, 2022, to ¥3,595.0 billion. The reasons for the increases or decreases for each cash flow activity, when compared with the same period last year, are as follows:

Net cash provided by operating activities amounted to ¥1,712.7 billion of cash inflows. Cash inflows from operating activities increased by ¥764.9 billion from the same period last year, due mainly to increased cash received from customers, which was partially offset by increased payments for parts and raw materials.

Net cash used in investing activities amounted to ¥584.6 billion of cash outflows. Cash outflows from investing activities increased by ¥202.9 billion from the same period last year, due mainly to an increase in payments for additions to property, plant and equipment as well as for acquisitions of other financial assets.

Net cash used in financing activities amounted to ¥1,318.8 billion of cash outflows. Cash outflows from financing activities increased by ¥626.6 billion from the same period last year, due mainly to an increase in repayments of financing liabilities as well as dividends paid.

Research and Development

The changes in research and development activities by Honda and its subsidiaries for the nine months ended December 31, 2022 are as follows:

The Company has established Business Development Operations that consolidate functions to develop businesses and areas of software and core electrification technologies in order to strengthen new value creation by combining hardware with software and services. Some technology areas have been moved from their respective product-based business operations, such as motorcycle, automobile and power products, and combined under Business Development Operations. With this change, Honda will accelerate the speed at which it can move and enhance the synergy effect by integrating technology and business for multiple product domains.

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of Financial Position

March 31, 2022 and December 31, 2022

			Yen (millions)
Assets	Note		March 31,<br>2022			December 31,<br>2022
			unaudited			unaudited
Current assets:
Cash and cash equivalents			¥	3,674,931		¥	3,595,087
Trade receivables				896,768			839,340
Receivables from financial services				1,694,113			1,797,630
Other financial assets				217,743			382,727
Inventories				1,918,548			2,111,587
Other current assets				439,322			363,750
Total current assets				8,841,425			9,090,121
Non-current assets:
Investments accounted for using the equity method				967,404			963,507
Receivables from financial services				3,740,383			3,808,031
Other financial assets				819,654			854,897
Equipment on operating leases		5		5,159,129			4,816,342
Property, plant and equipment		6		3,079,407			3,177,995
Intangible assets				849,507			870,116
Deferred tax assets				91,592			98,882
Other non-current assets				424,652			462,700
Total non-current assets				15,131,728			15,052,470
Total assets			¥	23,973,153		¥	24,142,591
			Yen (millions)
Liabilities and Equity	Note		March 31,<br>2022			December 31,<br>2022
			unaudited			unaudited
Current liabilities:
Trade payables			¥	1,236,233		¥	1,159,084
Financing liabilities				3,118,304			3,284,843
Accrued expenses				375,601			353,250
Other financial liabilities				236,900			363,636
Income taxes payable				96,116			91,947
Provisions		7		268,388			251,672
Other current liabilities				672,857			666,026
Total current liabilities				6,004,399			6,170,458
Non-current liabilities:
Financing liabilities				4,984,252			4,370,308
Other financial liabilities				282,083			291,652
Retirement benefit liabilities				282,054			290,351
Provisions		7		253,625			246,611
Deferred tax liabilities				990,754			942,800
Other non-current liabilities				403,440			427,347
Total non-current liabilities				7,196,208			6,569,069
Total liabilities				13,200,607			12,739,527
Equity:
Common stock				86,067			86,067
Capital surplus				185,495			185,579
Treasury stock				(328,309	)		(418,051	)
Retained earnings				9,539,133			9,908,565
Other components of equity				990,438			1,338,798
Equity attributable to owners of the parent				10,472,824			11,100,958
Non-controlling interests				299,722			302,106
Total equity				10,772,546			11,403,064
Total liabilities and equity			¥	23,973,153		¥	24,142,591

See accompanying notes to condensed consolidated interim financial statements.

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of Income

For the nine months ended December 31, 2021 and 2022

		Yen (millions)
	Note	December 31,<br>2021			December 31,<br>2022
		unaudited			unaudited
Sales revenue	8	¥	10,677,013		¥	12,523,490
Operating costs and expenses:
Cost of sales			(8,486,750	)		(10,045,494	)
Selling, general and administrative			(955,247	)		(1,142,140	)
Research and development			(563,371	)		(601,913	)
Total operating costs and expenses			(10,005,368	)		(11,789,547	)
Operating profit			671,645			733,943
Share of profit of investments accounted for using the equity method			157,034			148,887
Finance income and finance costs:
Interest income			18,737			48,023
Interest expense			(9,669	)		(25,214	)
Other, net			7,491			(46,262	)
Total finance income and finance costs			16,559			(23,453	)
Profit before income taxes			845,238			859,377
Income tax expense			(229,035	)		(225,503	)
Profit for the period		¥	616,203		¥	633,874
Profit for the period attributable to:
Owners of the parent			582,169			583,169
Non-controlling interests			34,034			50,705
		Yen
		December 31,<br>2021			December 31,<br>2022
Earnings per share attributable to owners of the parent
Basic and diluted	11	¥	337.92		¥	342.38

See accompanying notes to condensed consolidated interim financial statements.

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

For the nine months ended December 31, 2021 and 2022

		Yen (millions)
	Note	December 31,2021			December 31,2022
		unaudited			unaudited
Profit for the period		¥	616,203		¥	633,874
Other comprehensive income, net of tax:
Items that will not be reclassified to profit or loss
Remeasurements of defined benefit plans			—			(12	)
Net changes in revaluation of financial assets measured at fair value through other comprehensive<br>income			78,760			(34,472	)
Share of other comprehensive income of investments accounted for using the equity method			113			(1,428	)
Items that may be reclassified subsequently to profit or loss
Net changes in revaluation of financial assets measured at fair value through other comprehensive<br>income			(97	)		(817	)
Exchange differences on translating foreign operations			219,152			345,693
Share of other comprehensive income of investments accounted for using the equity method			43,385			41,495
Total other comprehensive income, net of tax			341,313			350,459
Comprehensive income for the period		¥	957,516		¥	984,333
Comprehensive income for the period attributable to:
Owners of the parent			918,110			931,267
Non-controlling interests			39,406			53,066

See accompanying notes to condensed consolidated interim financial statements.

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of Income

For the three months ended December 31, 2021 and 2022

		Yen (millions)
	Note	December 31,2021			December 31,2022
		unaudited			unaudited
Sales revenue	8	¥	3,688,785		¥	4,438,186
Operating costs and expenses:
Cost of sales			(2,924,975	)		(3,539,583	)
Selling, general and administrative			(329,644	)		(397,362	)
Research and development			(204,717	)		(220,750	)
Total operating costs and expenses			(3,459,336	)		(4,157,695	)
Operating profit			229,449			280,491
Share of profit of investments accounted for using the equity method			49,788			65,941
Finance income and finance costs:
Interest income			7,657			22,998
Interest expense			(3,241	)		(9,564	)
Other, net			1,189			(16,320	)
Total finance income and finance costs			5,605			(2,886	)
Profit before income taxes			284,842			343,546
Income tax expense			(77,240	)		(78,411	)
Profit for the period		¥	207,602		¥	265,135
Profit for the period attributable to:
Owners of the parent			192,960			244,655
Non-controlling interests			14,642			20,480
		Yen
		December 31,2021			December 31,2022
Earnings per share attributable to owners of the parent
Basic and diluted	11	¥	112.42		¥	144.49

See accompanying notes to condensed consolidated interim financial statements.

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

For the three months ended December 31, 2021 and 2022

		Yen (millions)
	Note	December 31,2021			December 31,2022
		unaudited			unaudited
Profit for the period		¥	207,602		¥	265,135
Other comprehensive income, net of tax:
Items that will not be reclassified to profit or loss
Remeasurements of defined benefit plans			—			(1	)
Net changes in revaluation of financial assets measured at fair value through other comprehensive<br>income			20,742			(6,737	)
Share of other comprehensive income of investments accounted for using the equity method			(1,207	)		(319	)
Items that may be reclassified subsequently to profit or loss
Net changes in revaluation of financial assets measured at fair value through other comprehensive<br>income			(79	)		76
Exchange differences on translating foreign operations			182,103			(572,014	)
Share of other comprehensive income of investments accounted for using the equity method			16,709			(27,653	)
Total other comprehensive income, net of tax			218,268			(606,648	)
Comprehensive income for the period		¥	425,870		¥	(341,513	)
Comprehensive income for the period attributable to:
Owners of the parent			403,390			(345,614	)
Non-controlling interests			22,480			4,101

See accompanying notes to condensed consolidated interim financial statements.

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Equity

For the nine months ended December 31, 2021 and 2022

			Yen (millions)
			Equity attributable to owners of the parent
	Note		Commonstock		Capitalsurplus			Treasurystock			Retainedearnings			Othercomponentsof equity		Total			Non-controllinginterests			Totalequity
Balance as of April 1, 2021 (unaudited)			¥	86,067	¥	172,049		¥	(273,786	)	¥	8,901,266		¥	196,710	¥	9,082,306		¥	290,533		¥	9,372,839
Comprehensive income for the period
Profit for the period												582,169					582,169			34,034			616,203
Other comprehensive income, net of tax															335,941		335,941			5,372			341,313
Total comprehensive income for the period												582,169			335,941		918,110			39,406			957,516
Reclassification to retained earnings												(39	)		39		—						—
Transactions with owners and other
Dividends paid		12										(188,402	)				(188,402	)		(43,148	)		(231,550	)
Purchases of treasury stock									(62,756	)							(62,756	)					(62,756	)
Disposal of treasury stock									442								442						442
Share-based payment transactions						(174	)										(174	)					(174	)
Equity transactions and others						13,679			7,657								21,336			(21,336	)		—
Total transactions with owners and other						13,505			(54,657	)		(188,402	)				(229,554	)		(64,484	)		(294,038	)
Balance as of December 31, 2021 (unaudited)			¥	86,067	¥	185,554		¥	(328,443	)	¥	9,294,994		¥	532,690	¥	9,770,862		¥	265,455		¥	10,036,317
			Yen (millions)
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
			Equity attributable to owners of the parent
	Note		Commonstock		Capitalsurplus		Treasurystock			Retainedearnings			Othercomponentsof equity		Total			Non-controlling<br>interests			Totalequity
Balance as of April 1, 2022 (unaudited)			¥	86,067	¥	185,495	¥	(328,309	)	¥	9,539,133		¥	990,438	¥	10,472,824		¥	299,722		¥	10,772,546
Comprehensive income for the period
Profit for the period											583,169					583,169			50,705			633,874
Other comprehensive income, net of tax														348,098		348,098			2,361			350,459
Total comprehensive income for the period											583,169			348,098		931,267			53,066			984,333
Reclassification to retained earnings											(262	)		262		—						—
Transactions with owners and other
Dividends paid		12									(213,475	)				(213,475	)		(50,682	)		(264,157	)
Purchases of treasury stock								(90,005	)							(90,005	)					(90,005	)
Disposal of treasury stock								263								263						263
Share-based payment transactions						84										84						84
Total transactions with owners and other						84		(89,742	)		(213,475	)				(303,133	)		(50,682	)		(353,815	)
Balance as of December 31, 2022 (unaudited)			¥	86,067	¥	185,579	¥	(418,051	)	¥	9,908,565		¥	1,338,798	¥	11,100,958		¥	302,106		¥	11,403,064

See accompanying notes to condensed consolidated interim financial statements.

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

For the nine months ended December 31, 2021 and 2022

		Yen (millions)
	Note	December 31,2021			December 31,2022
		unaudited			unaudited
Cash flows from operating activities:
Profit before income taxes		¥	845,238		¥	859,377
Depreciation, amortization and impairment losses excluding equipment on operating leases			457,989			536,890
Share of profit of investments accounted for using the equity method			(157,034	)		(148,887	)
Finance income and finance costs, net			(42,769	)		(62,159	)
Interest income and interest costs from financial services, net			(119,818	)		(113,821	)
Changes in assets and liabilities
Trade receivables			100,704			65,377
Inventories			(200,804	)		(118,123	)
Trade payables			(58,880	)		(122,455	)
Accrued expenses			(136,753	)		(40,187	)
Provisions and retirement benefit liabilities			(131,115	)		(42,037	)
Receivables from financial services			321,333			191,359
Equipment on operating leases			620			653,490
Other assets and liabilities			(35,454	)		109,352
Other, net			(7,053	)		(4,953	)
Dividends received			110,049			147,089
Interest received			179,173			230,642
Interest paid			(69,296	)		(102,890	)
Income taxes paid, net of refunds			(108,326	)		(325,308	)
Net cash provided by operating activities			947,804			1,712,756
Cash flows from investing activities:
Payments for additions to property, plant and equipment			(198,762	)		(386,751	)
Payments for additions to and internally developed intangible assets			(126,575	)		(120,711	)
Proceeds from sales of property, plant and equipment and intangible assets			16,057			14,740
Payments for acquisitions of investments accounted for using the equity method			—			(10,340	)
Payments for acquisitions of other financial assets			(409,524	)		(468,123	)
Proceeds from sales and redemptions of other financial assets			337,025			386,494
Net cash used in investing activities			(381,779	)		(584,691	)
Cash flows from financing activities:
Proceeds from short-term financing liabilities			5,863,983			6,782,961
Repayments of short-term financing liabilities			(6,106,635	)		(6,364,866	)
Proceeds from long-term financing liabilities			1,229,804			482,029
Repayments of long-term financing liabilities			(1,328,446	)		(1,817,099	)
Dividends paid to owners of the parent			(188,402	)		(213,475	)
Dividends paid to non-controlling interests			(41,722	)		(40,214	)
Purchases and sales of treasury stock, net			(62,314	)		(89,742	)
Repayments of lease liabilities			(58,406	)		(58,406	)
Net cash used in financing activities			(692,138	)		(1,318,812	)
Effect of exchange rate changes on cash and cash equivalents			58,544			110,903
Net change in cash and cash equivalents			(67,569	)		(79,844	)
Cash and cash equivalents at beginning of year			2,758,020			3,674,931
Cash and cash equivalents at end of period		¥	2,690,451		¥	3,595,087

See accompanying notes to condensed consolidated interim financial statements.

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

(1) Reporting Entity

Honda Motor Co., Ltd. (the “Company”) is a public company domiciled in Japan. The Company and its subsidiaries (collectively “Honda”) develop, manufacture and distribute motorcycles, automobiles, power products and others throughout the world, and also provide financial services to customers and dealers for the sale of those products. Principal manufacturing facilities are located in Japan, the United States of America, Canada, Mexico, Italy, France, China, India, Indonesia, Malaysia, Philippines, Thailand, Vietnam, Argentina and Brazil.

(2) Basis of Preparation

(a) Compliance with Interim Financial Reporting Standards

The condensed consolidated interim financial statements of the Company have been prepared in accordance with IAS 34 “Interim Financial Reporting”. The condensed consolidated interim financial statements should be read in conjunction with the Company’s consolidated financial statements for the fiscal year ended March 31, 2022, since the condensed consolidated interim financial statements do not include all the information required in the annual consolidated financial statements, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board.

(b) Functional Currency and Presentation Currency

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

(c) Use of Estimates and Judgments

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

The condensed consolidated interim financial statements are prepared based on the same judgments and estimations as those applied and described in the Company’s consolidated financial statements for the fiscal year ended March 31, 2022.

(3) Summary of Significant AccountingPolicies

The condensed consolidated interim financial statements are prepared based on the same accounting policies as those applied and described in the Company’s consolidated financial statements for the fiscal year ended March 31, 2022.

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

(4) Segment Information

Based on Honda’s organizational structure and characteristics of products and services, Honda discloses segment information in four categories: Reportable segments of Motorcycle business, Automobile business and Financial services business, and other segments that are not reportable. The other segments are combined and disclosed in Power product and other businesses. Segment information is based on 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 segment information are consistent with the accounting policies used in the Company’s condensed consolidated interim financial statements.

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

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

Explanatory note:

*	Life creation business has been renamed Power product business as a result of organizational changes effective<br>April 1, 2022.

(a) Segment Information

Segment information as of and for the nine months ended December 31, 2021 and 2022 is as follows:

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

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

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

As of and for the nine months ended December 31, 2022

	Yen (millions)
	Motorcycle<br>Business		Automobile<br>Business		Financial<br>Services<br>Business		Power Product<br>and Other<br>Businesses		Segment<br>Total		Reconciling<br>Items			Consolidated
Sales revenue:
External customers	¥	2,202,355	¥	7,723,596	¥	2,261,049	¥	336,490	¥	12,523,490	¥	—		¥	12,523,490
Intersegment		—		135,426		1,653		20,389		157,468		(157,468	)		—
Total		2,202,355		7,859,022		2,262,702		356,879		12,680,958		(157,468	)		12,523,490
Segment profit (loss)	¥	376,535	¥	112,934	¥	220,371	¥	24,103	¥	733,943	¥	—		¥	733,943
Segment assets	¥	1,549,384	¥	9,754,332	¥	11,120,960	¥	465,635	¥	22,890,311	¥	1,252,280		¥	24,142,591
Depreciation and amortization		49,966		440,624		695,034		13,906		1,199,530		—			1,199,530
Capital expenditures		33,651		500,630		1,125,920		8,987		1,669,188		—			1,669,188

Segment information for the three months ended December 31, 2021 and 2022 is as follows:

For the three months ended December 31, 2021

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

For the three months ended December 31, 2022

	Yen (millions)
	Motorcycle<br>Business		Automobile<br>Business		Financial<br>Services<br>Business		Power Product<br>and Other<br>Businesses		Segment<br>Total		Reconciling<br>Items			Consolidated
Sales revenue:
External customers	¥	789,673	¥	2,803,404	¥	733,134	¥	111,975	¥	4,438,186	¥	—		¥	4,438,186
Intersegment		—		51,684		472		8,814		60,970		(60,970	)		—
Total		789,673		2,855,088		733,606		120,789		4,499,156		(60,970	)		4,438,186
Segment profit (loss)	¥	151,760	¥	49,366	¥	67,322	¥	12,043	¥	280,491	¥	—		¥	280,491

Explanatory notes:

1.	Segment profit (loss) of each segment is measured in a consistent manner with consolidated operating profit,<br>which is profit before income taxes before share of profit of investments accounted for using the equity method and finance income and finance costs. Expenses not directly associated with specific segments are allocated based on the most reasonable<br>measures applicable.
2.	Segment assets of each segment are defined as total assets including investments accounted for using the equity<br>method, derivatives, and deferred tax assets. Segment assets are based on those directly associated with each segment and those not directly associated with specific segments are allocated based on the most reasonable measures applicable except for<br>the corporate assets described below.
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3.	Intersegment sales revenues are generally made at values that approximate<br>arm’s-length prices.
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4.	Reconciling items include elimination of intersegment transactions and balances as well as unallocated<br>corporate assets. Unallocated corporate assets, included in reconciling items as of December 31, 2021 and 2022 amounted to ¥847,711 million and ¥1,418,600 million, respectively, which consist primarily of the Company’s<br>cash and cash equivalents and financial assets measured at fair value through other comprehensive income.
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HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

(b) Supplemental Geographical Information

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

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

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

	Yen (millions)
	Japan		North<br>America		Europe		Asia		Other<br>Regions		Total		Reconciling<br>Items			Consolidated
Sales revenue:
External customers	¥	1,713,992	¥	5,681,155	¥	440,255	¥	2,400,719	¥	440,892	¥	10,677,013	¥	—		¥	10,677,013
Inter-geographic areas		1,506,703		341,172		89,067		491,398		7,479		2,435,819		(2,435,819	)		—
Total		3,220,695		6,022,327		529,322		2,892,117		448,371		13,112,832		(2,435,819	)		10,677,013
Operating profit (loss)	¥	26,663	¥	414,075	¥	17,764	¥	232,250	¥	18,642	¥	709,394	¥	(37,749	)	¥	671,645
Assets	¥	5,250,120	¥	12,310,903	¥	553,219	¥	3,491,191	¥	505,794	¥	22,111,227	¥	138,552		¥	22,249,779
Non-current assets other than financial instruments,<br>deferred tax assets and net defined benefit assets	¥	3,006,685	¥	5,196,501	¥	55,887	¥	667,201	¥	133,948	¥	9,060,222	¥	—		¥	9,060,222

As of and for the nine months ended December 31, 2022

	Yen (millions)
	Japan		North<br>America		Europe		Asia		Other<br>Regions		Total		Reconciling<br>Items			Consolidated
Sales revenue:
External customers	¥	1,782,790	¥	6,579,359	¥	462,650	¥	3,087,127	¥	611,564	¥	12,523,490	¥	—		¥	12,523,490
Inter-geographic areas		1,637,726		378,038		20,632		590,728		4,153		2,631,277		(2,631,277	)		—
Total		3,420,516		6,957,397		483,282		3,677,855		615,717		15,154,767		(2,631,277	)		12,523,490
Operating profit (loss)	¥	117,535	¥	242,296	¥	10,743	¥	319,044	¥	45,786	¥	735,404	¥	(1,461	)	¥	733,943
Assets	¥	5,343,485	¥	13,068,508	¥	626,675	¥	3,705,885	¥	640,052	¥	23,384,605	¥	757,986		¥	24,142,591
Non-current assets other than financial instruments,<br>deferred tax assets and net defined benefit assets	¥	2,936,517	¥	5,296,689	¥	46,749	¥	674,213	¥	170,065	¥	9,124,233	¥	—		¥	9,124,233

For the three months ended December 31, 2021

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

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

For the three months ended December 31, 2022

	Yen (millions)
	Japan		North<br>America		Europe		Asia		Other<br>Regions		Total		Reconciling<br>Items			Consolidated
Sales revenue:
External customers	¥	638,188	¥	2,362,914	¥	156,707	¥	1,070,673	¥	209,704	¥	4,438,186	¥	—		¥	4,438,186
Inter-geographic areas		597,436		132,009		7,103		211,446		1,474		949,468		(949,468	)		—
Total		1,235,624		2,494,923		163,810		1,282,119		211,178		5,387,654		(949,468	)		4,438,186
Operating profit (loss)	¥	36,800	¥	98,281	¥	3,053	¥	116,304	¥	16,250	¥	270,688	¥	9,803		¥	280,491

Explanatory notes:

1.	Major countries in each geographic area:
North America	United States, Canada, Mexico
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Europe	United Kingdom, Germany, Belgium, Italy, France
Asia	Thailand, China, India, Vietnam, Malaysia
Other Regions	Brazil, Australia
2.	Operating profit (loss) of each geographical region is measured in a consistent manner with consolidated<br>operating profit, which is profit before income taxes before share of profit of investments accounted for using the equity method and finance income and finance costs.
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3.	Assets of each geographical region are defined as total assets including investments accounted for using the<br>equity method, derivatives, and deferred tax assets.
---	---
4.	Sales revenues between geographic areas are generally made at values that approximate arm’s-length prices.
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5.	Reconciling items include elimination of inter-geographic transactions and balances as well as unallocated<br>corporate assets. Unallocated corporate assets, included in reconciling items as of December 31, 2021 and 2022 amounted to ¥847,711 million and ¥1,418,600 million, respectively, which consist primarily of the Company’s<br>cash and cash equivalents and financial assets measured at fair value through other comprehensive income.
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(5) Equipment on OperatingLeases

The additions to equipment on operating leases for the nine months ended December 31, 2021 and 2022 are ¥1,636,938 million and ¥1,123,373 million, respectively.

The sales or disposals of equipment on operating leases for the nine months ended December 31, 2021 and 2022 are ¥976,175 million and ¥1,081,513 million, respectively.

(6) Property, Plantand Equipment

The additions to property, plant and equipment for the nine months ended December 31, 2021 and 2022 are ¥242,976 million and ¥454,203 million, respectively.

The sales or disposals of property, plant and equipment for the nine months ended December 31, 2021 and 2022 are ¥21,982 million and ¥21,394 million, respectively.

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

(7) Provisions

The components of and changes in provisions for the nine months ended December 31, 2022 are as follows:

	Yen (millions)
	Product<br>warranties*			Other			Total
Balance as of April 1, 2022	¥	419,201		¥	102,812		¥	522,013
Provision	¥	103,951		¥	13,442		¥	117,393
Write-offs		(118,934	)		(20,280	)		(139,214	)
Reversal		(17,102	)		(7,055	)		(24,157	)
Exchange differences on translating foreign operations		16,596			5,652			22,248
Balance as of December 31, 2022	¥	403,712		¥	94,571		¥	498,283

Current liabilities and non-current liabilities of provisions as of March 31, 2022 and December 31, 2022 are as follows:

	Yen (millions)
	As of March 31,<br>2022		As of December 31,<br>2022
Current liabilities	¥	268,388	¥	251,672
Non-current liabilities		253,625		246,611
Total	¥	522,013	¥	498,283

Explanatory note:

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

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

(8) Sales Revenue

As stated in Note 4, Honda discloses segment information in four categories.

The sales revenue disaggregated by geographical markets based on the location of the customer and the reconciliation of the disaggregated revenue with each segment for the nine months ended December 31, 2021 and 2022 are as follows:

For the nine months endedDecember 31, 2021

	Yen (millions)
	Motorcycle<br>Business		Automobile<br>Business		Financial<br>Services<br>Business		Power Product<br>and Other<br>Businesses		Total
Revenue arising from Contracts with Customers
Japan	¥	78,716	¥	964,125	¥	100,930	¥	56,945	¥	1,200,716
North America		176,848		3,610,940		970,204		117,671		4,875,663
Europe		149,675		238,051		—		51,988		439,714
Asia		942,846		1,636,675		30		47,379		2,626,930
Other Regions		252,477		212,109		—		17,807		482,393
Total	¥	1,600,562	¥	6,661,900	¥	1,071,164	¥	291,790	¥	9,625,416
Revenue arising from the other sources*		1,534		6,757		1,043,171		135		1,051,597
Total	¥	1,602,096	¥	6,668,657	¥	2,114,335	¥	291,925	¥	10,677,013

For the nine months ended December 31, 2022

	Yen (millions)
	Motorcycle<br>Business		Automobile<br>Business		Financial<br>Services<br>Business		Power Product<br>and Other<br>Businesses		Total
Revenue arising from Contracts with Customers
Japan	¥	79,920	¥	987,604	¥	110,492	¥	70,315	¥	1,248,331
North America		220,528		4,318,570		1,047,600		137,927		5,724,625
Europe		155,111		249,547		—		63,518		468,176
Asia		1,361,906		1,887,402		18		42,773		3,292,099
Other Regions		384,569		271,791		—		21,771		678,131
Total	¥	2,202,034	¥	7,714,914	¥	1,158,110	¥	336,304	¥	11,411,362
Revenue arising from the other sources*		321		8,682		1,102,939		186		1,112,128
Total	¥	2,202,355	¥	7,723,596	¥	2,261,049	¥	336,490	¥	12,523,490

Explanatory note:

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

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

For the three months ended December 31, 2021

	Yen (millions)
	Motorcycle<br>Business		Automobile<br>Business		Financial<br>Services<br>Business		Power Product<br>and Other<br>Businesses		Total
Revenue arising from Contracts with Customers
Japan	¥	24,897	¥	341,810	¥	35,397	¥	22,562	¥	424,666
North America		62,516		1,192,577		288,582		38,607		1,582,282
Europe		36,689		66,695		—		17,545		120,929
Asia		363,817		652,468		17		19,735		1,036,037
Other Regions		89,278		77,448		—		6,772		173,498
Total	¥	577,197	¥	2,330,998	¥	323,996	¥	105,221	¥	3,337,412
Revenue arising from the other sources*		1,169		2,390		347,781		33		351,373
Total	¥	578,366	¥	2,333,388	¥	671,777	¥	105,254	¥	3,688,785
For the three months ended December 31,2022
	Yen (millions)
	Motorcycle<br>Business		Automobile<br>Business		Financial<br>Services<br>Business		Power Product<br>and Other<br>Businesses		Total
Revenue arising from Contracts with Customers
Japan	¥	29,311	¥	365,508	¥	41,847	¥	27,086	¥	463,752
North America		76,877		1,634,024		323,253		42,250		2,076,404
Europe		61,410		82,835		—		20,367		164,612
Asia		490,976		623,369		9		14,098		1,128,452
Other Regions		130,965		93,275		—		8,112		232,352
Total	¥	789,539	¥	2,799,011	¥	365,109	¥	111,913	¥	4,065,572
Revenue arising from the other sources*		134		4,393		368,025		62		372,614
Total	¥	789,673	¥	2,803,404	¥	733,134	¥	111,975	¥	4,438,186

Explanatory note:

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

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

(9) Fair Value

(a) Definition of Fair Value Hierarchy

Honda uses a three-level hierarchy when measuring fair value. The following is a description of the three hierarchy levels:

Level 1	Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date
Level 2	Inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly or indirectly
Level 3	Unobservable inputs for the assets or liabilities

The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest input that is significant to the fair value measurement in its entirety. Honda recognizes the transfers between the levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

(b) Method of Fair Value Measurement

The fair values of assets and liabilities are determined based on relevant market information and through the use of an appropriate valuation method.

The measurement methods and assumptions used in the measurement of assets and liabilities are as follows:

(Cash and cash equivalents, trade receivables and trade payables)

The fair values approximate their carrying amounts due to their short-term maturities.

(Receivables from financial services)

The fair value of receivables from financial services is measured primarily by discounting future cash flows using the current interest rates applicable for these receivables of similar remaining maturities. Fair value measurement for receivables from financial services is classified as Level 3.

(Debt securities)

Debt securities consist mainly of mutual funds, corporate bonds, local bonds and auction rate securities.

The fair value of mutual funds with an active market is measured by using quoted market prices. Fair value measurement for mutual funds with an active market is classified as Level 1.

The fair values of corporate bonds and local bonds are measured based on proprietary pricing models provided by specialists and/or market makers and the models obtain a wide array of market observable inputs such as credit ratings and discount rates. Fair value measurements for corporate bonds and local bonds are classified as Level 2.

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

The subsidiary’s auction rate securities are A to AAA rated and are insured by qualified guarantee agencies, and reinsured by the Secretary of Education and the United States government, and guaranteed at approximately 95% by the United States government. To measure fair value of auction rate securities, Honda uses a third-party-developed valuation model which obtains a wide array of market observable inputs, as well as unobservable inputs including probability of passing or failing auction at each auction. Fair value measurement for auction rate securities is classified as Level 3.

(Equity securities)

The fair value of equity securities with an active market is measured by using quoted market prices. Fair value measurement for equity securities with an active market is classified as Level 1.

The fair value of equity securities with no active market is measured mainly by using a discounted cash flow method, a comparable company valuation method and other appropriate valuation methods. Fair value measurement for equity securities with no active market is classified as Level 3. In addition, in the case that cost represents the best estimate of fair value, fair value for the equity securities with no active market is measured at cost.

Cash flow forecasts and discount rate for the discounted cash flow model and price book-value ratio (PBR) of a comparable company for the comparable company valuation method are used as significant unobservable inputs in the fair value measurement of equity securities classified as Level 3. The fair value increases (decreases) as Cash flow forecasts increase (decrease), discount rate decline (rise) and PBR of a comparable company rise (decline). Such fair value measurements are conducted in accordance with the group accounting policy approved by the appropriate person of authority and based upon valuation methods determined by personnel in accounting divisions of Honda.

(Derivatives)

Derivatives consist mainly of foreign currency forward exchange contracts, foreign currency option contracts, currency swap agreements and interest rate swap agreements.

The fair values of foreign currency forward exchange contracts and foreign currency option contracts are measured by using market observable inputs such as spot exchange rates, discount rates and implied volatility. The fair values of currency swap agreements and interest rate swap agreements are measured by discounting future cash flows using market observable inputs such as interest rate benchmarks like U.S. dollar LIBOR, swap rates, and foreign exchange rates. Fair value measurements for these derivatives are classified as Level 2.

The credit risk of the counterparties is considered in the valuation of derivatives.

(Financing liabilities)

The fair value of financing liabilities is measured by discounting future cash flows using interest rates currently available for liabilities of similar terms and remaining maturities. Fair value measurement of financing liabilities is mainly classified as Level 2.

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

(c) Assets and Liabilities Measured at Fair Value on a recurring basis

Assets and liabilities measured at fair value on a recurring basis as of March 31, 2022 and December 31, 2022 consist of the following:

	Yen (millions)
As of March 31, 2022	Level 1		Level 2		Level 3		Total
Other financial assets:
Financial assets measured at fair value through profit or loss:
Derivatives
Foreign exchange instruments	¥	—	¥	15,674	¥	—	¥	15,674
Interest rate instruments		—		114,016		—		114,016
Other		—		—		4,648		4,648
Total		—		129,690		4,648		134,338
Debt securities		42,837		54,641		4,773		102,251
Financial assets measured at fair value through other comprehensive income:
Debt securities		—		19,984		—		19,984
Equity securities		335,745		—		133,038		468,783
Total	¥	378,582	¥	204,315	¥	142,459	¥	725,356
Other financial liabilities:
Financial liabilities measured at fair value through profit or loss:
Derivatives
Foreign exchange instruments	¥	—	¥	66,644	¥	—	¥	66,644
Interest rate instruments		—		83,669		—		83,669
Other		—		1,629		—		1,629
Total		—		151,942		—		151,942
Total	¥	—	¥	151,942	¥	—	¥	151,942

There were no transfers between Level 1 and Level 2 for the year ended March 31, 2022.

	Yen (millions)
As of December 31, 2022	Level 1		Level 2		Level 3		Total
Other financial assets:
Financial assets measured at fair value through profit or loss:
Derivatives
Foreign exchange instruments	¥	—	¥	35,193	¥	—	¥	35,193
Interest rate instruments		—		190,880		—		190,880
Other		—		—		5,651		5,651
Total		—		226,073		5,651		231,724
Debt securities		40,872		53,485		5,175		99,532
Financial assets measured at fair value through other comprehensive income:
Debt securities		—		24,463		—		24,463
Equity securities		304,023		—		144,405		448,428
Total	¥	344,895	¥	304,021	¥	155,231	¥	804,147
Other financial liabilities:
Financial liabilities measured at fair value through profit or loss:
Derivatives
Foreign exchange instruments	¥	—	¥	117,936	¥	—	¥	117,936
Interest rate instruments		—		155,035		—		155,035
Other		—		5,611		—		5,611
Total		—		278,582		—		278,582
Total	¥	—	¥	278,582	¥	—	¥	278,582

There were no transfers between Level 1 and Level 2 for the nine months ended December 31, 2022.

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

There were no significant effects of the measurements on profit or loss or other comprehensive income in Level 3 assets and liabilities measured at fair value on a recurring basis for the nine months ended December 31, 2022.

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

The carrying amounts and fair values of financial assets and financial liabilities measured at amortized cost as of March 31, 2022 and December 31, 2022 are as follows:

	Yen (millions)
	As of March 31,<br>2022				As of December 31,<br>2022
	Carrying<br>amount		Fair value		Carrying<br>amount		Fair value
Receivables from financial services	¥	5,434,496	¥	5,374,754	¥	5,605,661	¥	5,404,739
Debt securities		79,176		79,176		148,185		148,185
Financing liabilities		8,102,556		7,984,057		7,655,151		7,375,672

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

(10) Contingent Liabilities

Claims and Lawsuits

Honda is subject to potential liability under various lawsuits and claims. Honda recognizes a provision for loss contingencies when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. Honda reviews these pending lawsuits and claims periodically and adjusts the amounts recognized for these contingent liabilities, if necessary, by considering the nature of lawsuits and claims, the progress of the case and the opinions of legal counsel.

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

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

Loss related to airbag inflators

Honda has been conducting market-based measures in relation to airbag inflators. Honda recognizes a provision for specific warranty costs when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. There is a possibility that Honda will need to recognize additional provisions when new evidence related to the product recalls arise, however, it is not possible for Honda to reasonably estimate the amount and timing of potential future losses as of the date of this report.

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

(11) Earnings Per Share

Earnings per share attributable to owners of the parent for the nine months ended December 31, 2021 and 2022 are calculated based on the following information. There were no significant dilutive potential common shares outstanding for the nine months ended December 31, 2021 and 2022.

	2021		2022
Profit for the period attributable to owners of the parent (millions of yen)	¥	582,169	¥	583,169
Weighted average number of common shares outstanding, basic (shares)		1,722,778,664		1,703,286,169
Basic earnings per share attributable to owners of the parent (yen)	¥	337.92	¥	342.38

Earnings per share attributable to owners of the parent for the three months ended December 31, 2021 and 2022 are calculated based on the following information. There were no significant dilutive potential common shares outstanding for the three months ended December 31, 2021 and 2022.

	2021		2022
Profit for the period attributable to owners of the parent (millions of yen)	¥	192,960	¥	244,655
Weighted average number of common shares outstanding, basic (shares)		1,716,433,911		1,693,213,206
Basic earnings per share attributable to owners of the parent (yen)	¥	112.42	¥	144.49

(12) Dividend

Dividend payout

For the nine monthsended December 31, 2021

Resolution	The Board of Directors Meeting on May 14, 2021
Type of shares	Common shares
Total amount of dividends (millions of yen)	93,272
Dividend per share (yen)	54.00
Record date	March 31, 2021
Effective date	June 7, 2021
Resolution	The Board of Directors Meeting on November 5, 2021
---	---
Type of shares	Common shares
Total amount of dividends (millions of yen)	95,130
Dividend per share (yen)	55.00
Record date	September 30, 2021
Effective date	December 1, 2021

For the nine months ended December 31, 2022

Resolution	The Board of Directors Meeting on May 13, 2022
Type of shares	Common shares
Total amount of dividends (millions of yen)	111,256
Dividend per share (yen)	65.00
Record date	March 31, 2022
Effective date	June 6, 2022
Resolution	The Board of Directors Meeting on November 9, 2022
---	---
Type of shares	Common shares
Total amount of dividends (millions of yen)	102,219
Dividend per share (yen)	60.00
Record date	September 30, 2022
Effective date	December 5, 2022

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

(13) Subsequent Event

Acquisition of the Company’s Own Shares

The Board of Directors of the Company, at its meeting held on February 10, 2023, resolved that the Company will acquire its own shares pursuant to Article 459, Paragraph 1 of the Company Law and Article 36 of the Company’s Articles of Incorporation.

(a) Reason foracquisition of own shares

The Company will acquire its own shares for the purpose, among others, of improving efficiency of its capital structure and implementing a flexible capital strategy.

(b) Details of the acquisition

1) Class of shares to be acquired:

Shares of common stock

2) Total number of shares to be acquired:

Up to 25,000,000 shares (1.5 % of total number of issued shares (excluding treasury stock))

3) Total amount of shares to be acquired:

Up to 70,000 million yen

4) Period of acquisition:

Starting on February 13, 2023 and ending on April 30, 2023

5) Method of acquisition:

Market purchases on the Tokyo Stock Exchange

1.	Purchases through the Tokyo Stock Exchange Trading Network Off-Auction<br>Own Share Repurchase Trading System (ToSTNeT-3)
2.	Market purchases based on a discretionary trading contract regarding acquisition of own shares<br>
---	---

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

The release of the condensed consolidated interim financial statements was approved by Toshihiro Mibe, Director, President and Representative Executive Officer and Kohei Takeuchi, Director, Executive Vice President and Representative Executive Officer and Chief Financial Officer on February 13, 2023.

6-K

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