Honda 2009 Annual Report Download - page 53

losses related to derivative instruments and the losses
associated with the revaluation of investment securities had a
negative impact of ¥56.4 billion, which was offset by the effects
of foreign currency transaction gains.
Income Tax Expense
Income tax expense decreased ¥277.6 billion, or 71.7%, to
¥109.8 billion. The effective tax rate increased 24.7 percentage
points to 67.9%, from the previous year, which was higher than
the Japanese statutory income tax rate of 40.0% by 27.9
percentage points.
Minority Interest in Income of Consolidated Subsidiaries
The amount deducted for minority interest in income of
consolidated subsidiaries decreased ¥13.3 billion, or 49.0%, to
¥13.9 billion from the previous fi scal year.
Equity in Income of Affi liates
Equity in income of affi liates decreased ¥19.9 billion, or 16.7%,
to ¥99.0 billion, due mainly to a decrease in income of affi liates
that primarily manufacture components and parts for Honda’s
products in Japan, because of a decrease in their revenues,
which was partially offset by an increase in income of affi liates
in Asia, because of an increase in their revenues resulting from
further automobile market expansion.
Net Income
Net income decreased ¥463.0 billion, or 77.2%, to ¥137.0
billion from the previous fi scal year.
Business Segments
Motorcycle Business
Honda’s unit sales of motorcycles, all-terrain vehicles (ATVs)
and personal watercraft (PWC) totaled 10,114 thousand units,
increased by 8.5% from the previous fi scal year. Unit sales in
Japan totaled 232 thousand units, decreased by 25.4%.
Overseas unit sales totaled 9,882 thousand units, increased by
9.7%, due mainly to an increase in unit sales of parts for local
production at affi liates accounted for under the equity method
in Asia and an increase in unit sales in Other Regions, including
Brazil. Revenue from external customers decreased ¥147.1
billion, or 9.4%, to ¥1,411.5 billion from the previous fi scal year,
due mainly to negative foreign currency translation effects,
which was offset by increased overseas unit sales. Honda
estimates that by applying Japanese yen exchange rates of the
previous fi scal year to the current fi scal year, net sales for the
year would have increased by approximately ¥18.5 billion, or
1.2%, compared to the decrease as reported of ¥147.1 billion,
which includes negative foreign currency translation effects.
Operating income decreased ¥51.3 billion, or 34.0%, to
¥99.9 billion from the previous fi scal year, due mainly to
increased raw material costs, the negative foreign currency
effects and increased SG&A expenses, which was offset by
price increases and decreased R&D expenses.
Automobile Business
Honda’s unit sales of automobiles totaled 3,517 thousand
units, decreased by 10.4% from the previous fi scal year. Unit
sales in Japan totaled 556 thousand units, decreased by 9.6%.
Overseas unit sales totaled 2,961 thousand units, decreased
by 10.5%, due mainly to a decrease in unit sales in North
America, which was offset by an increase in unit sales in Asia
and Other Regions including Brazil.
Revenue from external customers decreased ¥1,814.9
billion, or 19.1%, to ¥7,674.4 billion from the previous fi scal
year, due to the negative foreign currency translation effects
and decreased unit sales. Honda estimates that by applying
Japanese yen exchange rates of the previous fi scal year to the
current fi scal year, net sales for the year would have decreased
by approximately ¥889.9 billion, or 9.4%, compared to the
decrease as reported of ¥1,814.9 billion, which includes
negative foreign currency translation effects.
Operating income decreased ¥637.1 billion, or 96.3%, to
¥24.5 billion, from the previous fi scal year, due mainly to a
decrease in income attributable to the decreased net sales in
North America and Japan, the negative foreign currency
effects, an increase in fi xed costs per unit as a result of
reduced production, increased raw material costs, changes in
the model mix caused by shift of customers’ demands towards
more fuel effi cient (compact) models and expenses related to
withdrawal from some racing activities and cancellations of
development of new models, which was offset by continuing
cost reduction, price increases, a decrease in costs for product
warranties, decreased R&D expenses and reduced sales
incentives in North America.
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0908070605
Net Income and Net Income
per Common Share
Years ended March 31
(Yen)Yen (billions)
Net Income (left)
Net Income per Common Share
(right)
Annual Report 2009 51