Honda 2012 Annual Report Download - page 37

effects. Selling, general and administrative expenses
increased by ¥1.3 billion, or 2.4%, to ¥56.5 billion. R&D
expenses decreased by ¥1.3 billion, or 4.4%, to ¥28.6 billion.
Operating loss was ¥4.0 billion, an improvement of ¥1.4
billion from the previous fiscal year, due mainly to an increase in
income attributable to increased net sales of power products,
which was partially offset by increased selling, general and
administrative expenses and negative foreign currency effects.
Financial Services Business
To support the sale of its products, Honda provides retail
lending and leasing to customers and wholesale financing to
dealers through our finance subsidiaries in Japan, the United
States, Canada, the United Kingdom, Germany, Brazil,
Thailand and other countries.
The total amount of finance subsidiaries-receivables and
property on operating leases of finance subsidiaries increased
by ¥81.2 billion, or 1.7%, to ¥4,918.8 billion from the previ-
ous fiscal year. Honda estimates that by applying Japanese
yen exchange rates of the previous fiscal year to the current
fiscal year, the total amount of finance subsidiaries-receiv-
ables and property on operating leases of finance subsidiar-
ies as of the end of the year would have increased by
approximately ¥168.0 billion, or 3.5%, compared to the
reported increase of ¥81.2 billion, which includes negative
foreign currency translation effects.
Revenue from external customers in the financial services
business decreased ¥45.7 billion, or 8.1%, to ¥516.1 billion
from the previous fiscal year, due mainly to negative foreign
currency translation effects. Honda estimates that by apply-
ing Japanese yen exchange rates of the previous fiscal year
to the current fiscal year, revenue for the year would have
decreased by approximately ¥6.7 billion, or 1.2%, compared
to the reported decrease of ¥45.7 billion, which includes
negative foreign currency translation effects. Revenue includ-
ing intersegment sales decreased ¥46.8 billion, or 8.2%, to
¥526.5 billion from the previous fiscal year.
Operating costs and expenses decreased ¥30.6 billion, or
7.9%, to ¥356.5 billion from the previous fiscal year. Cost of
sales decreased ¥16.6 billion, or 5.4%, to ¥293.2 billion from
the previous fiscal year, due mainly to a decrease in costs
related to lease residual values and positive foreign currency
effect. Selling, general and administrative expenses
decreased ¥13.9 billion, or 18.1%, to ¥63.3 billion from the
previous fiscal year, due mainly to a decrease in provisions for
credit losses, losses on lease residual values and positive
foreign currency effects.
Operating income decreased ¥16.2 billion, or 8.7%, to
¥170.0 billion from the previous fiscal year, due mainly to
negative foreign currency effects, which was partially offset
by a decrease in losses on lease residual values.
Geographical Information
Japan
In Japan, revenue from domestic and export sales decreased
¥248.2 billion, or 6.9%, to ¥3,362.9 billion from the previous
fiscal year, due mainly to a decrease in revenue in Automobile
business by the Great East Japan Earthquake and the floods
in Thailand. Operating loss was ¥109.8 billion, a decrease of
¥175.9 billion of operating income from the previous fiscal year,
due mainly to a decrease in income attributable to decreased
net sales and model mix, increased R&D expenses and nega-
tive foreign currency effects, which was partially offset by
decreased selling, general and administrative expenses.
North America
In North America, which mainly consists of the United States,
revenue decreased ¥433.1 billion, or 10.4%, to ¥3,714.7
billion from the previous fiscal year, due mainly to a decrease
in revenue in Automobile business by the Great East Japan
Earthquake, the floods in Thailand and negative foreign cur-
rency translation effects. Operating income decreased ¥77.6
billion, or 25.8%, to ¥223.2 billion from the previous fiscal
year, due mainly to a decrease in income attributable to
decreased net sales, model mix and negative foreign
currency effects.
Europe
In Europe, revenue decreased ¥118.5 billion, or 16.9%, to
¥580.7 billion from the previous fiscal year, due mainly to a
decrease in revenue in the Automobile business by the Great
East Japan Earthquake, the floods in Thailand and negative
foreign currency translation effects. Operating loss was ¥12.1
billion, a decrease of ¥1.9 billion of operating income from the
previous fiscal year, due mainly to a decrease in income
attributable to decreased net sales and model mix.
Asia
In Asia, revenue decreased ¥350.6 billion, or 19.0%, to
¥1,490.4 billion from the previous fiscal year, due mainly to a
decrease in revenue in Automobile businesses by the Great
East Japan Earthquake, the floods in Thailand and negative
foreign currency translation effects, which was partially offset
by an increase in revenue in Motorcycle business. Operating
income decreased ¥73.7 billion, or 49.0%, to ¥76.8 billion
from the previous fiscal year, due mainly to a decrease in
income attributable to decreased net sales and model mix
and negative foreign currency effects.
Other Regions
In Other Regions, revenue decreased ¥88.9 billion, or 9.1%,
to ¥893.1 billion from the previous fiscal year, due mainly to a
decrease in revenue in Automobile businesses by the Great
East Japan Earthquake, the floods in Thailand and negative
foreign currency translation effects, which was partially offset
by an increase in revenue in Motorcycle business. Operating
income decreased ¥12.5 billion, or 18.1%, to ¥56.9 billion
from the previous fiscal year, due mainly to a decrease in
income attributable to increased selling, general and adminis-
trative expenses and negative foreign currency effects.
Honda Motor Co., Ltd. 35