Honda 2013 Annual Report Download - page 37

Operating costs and expenses increased ¥7.4 billion, or
2.5%, to ¥301.2 billion from the previous fiscal year. Cost of
sales increased by ¥6.2 billion, or 3.0%, to ¥214.8 billion, due
mainly to an increase in costs attributable to increased net
sales of power products business and negative foreign cur-
rency effects. Selling, general and administrative expenses
increased by ¥0.08 billion, or 0.1%, to ¥56.6 billion. R&D
expenses increased by ¥1.1 billion, or 4.1%, to ¥29.7 billion.
Operating loss was ¥9.5 billion, an increase of ¥5.5 billion
from the previous fiscal year, due mainly to increased costs
including R&D expenses.
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.
Total amount of finance subsidiaries-receivables and prop-
erty on operating leases of finance subsidiaries increased by
¥955.3 billion, or 19.4%, to ¥5,874.2 billion from the previous
fiscal year. Honda estimates that by applying Japanese yen
exchange rates of the previous fiscal year to the current fiscal
year, total amount of finance subsidiaries-receivables and
property on operating leases of finance subsidiaries as of the
end of the year would have increased by approximately
¥281.0 billion, or 5.7%, compared to the increase as reported
of ¥955.3 billion, which includes positive foreign currency
translation effects.
Revenue from external customers in Financial services
business increased ¥32.3 billion, or 6.3%, to ¥548.5 billion
from the previous fiscal year, due mainly to an increase in
operating lease revenues and positive foreign currency trans-
lation effects. Honda estimates that by applying Japanese
yen exchange rates of the previous fiscal year to the current
fiscal year, revenue for the year would have increased by
approximately ¥8.4 billion, or 1.6%, compared to the increase
as reported of ¥32.3 billion, which includes positive foreign
currency translation effects. Revenue including intersegment
sales increased ¥33.6 billion, or 6.4%, to ¥560.2 billion from
the previous fiscal year.
Operating costs and expenses increased ¥45.5 billion, or
12.8%, to ¥402.0 billion from the previous fiscal year. Cost of
sales increased ¥42.9 billion, or 14.7%, to ¥336.2 billion
from the previous fiscal year, due mainly to an increase in
costs related to lease residual values and negative foreign
currency effect. Selling, general and administrative expenses
increased ¥2.5 billion, or 4.0%, to ¥65.8 billion from the
previous fiscal year.
Operating income decreased ¥11.8 billion, or 7.0%, to
¥158.1 billion from the previous fiscal year, due mainly to an
increase in costs related to lease residual values.
Geographical Information
Japan
In Japan, revenue from domestic and export sales increased
¥530.5 billion, or 15.8%, to ¥3,893.5 billion from the previous
fiscal year, due mainly to an increase in revenue in Automobile
business. Operating income was ¥178.4 billion, an increase
of ¥288.2 billion of operating income from the previous fiscal
year, due mainly to an increase in income attributable to
increased net sales and model mix and positive foreign
currency effects, which was partially offset by increased
R&D expenses and increased selling, general and administra-
tive expenses.
North America
In North America, which mainly consists of the United States,
revenue increased ¥1,142.3 billion, or 30.8%, to ¥4,857.1
billion from the previous fiscal year, due mainly to an increase
in revenue in Automobile business and positive foreign cur-
rency translation effects. Operating income decreased ¥14.3
billion, or 6.4%, to ¥208.9 billion from the previous fiscal year,
due mainly to increased selling, general and administrative
expenses, which was partially offset by an increase in income
attributable to increased net sales, model mix and continuing
cost reduction.
Europe
In Europe, revenue increased ¥61.3 billion, or 10.6%, to
¥642.1 billion from the previous fiscal year, due mainly to an
increase in revenue in the Automobile business. Operating
income was ¥0.4 billion, an increase of ¥12.5 billion of oper-
ating income from the previous fiscal year, due mainly to an
increase in income attributable to increased net sales and
model mix, which was partially offset by increased selling,
general and administrative expenses.
Asia
In Asia, revenue increased ¥815.1 billion, or 54.7%, to
¥2,305.6 billion from the previous fiscal year, due mainly to an
increase in revenue in Automobile businesses and Motorcycle
businesses. Operating income increased ¥69.8 billion, or
90.9%, to ¥146.7 billion from the previous fiscal year, due
mainly to an increase in income attributable to increased net
sales and model mix and continuing cost reduction, which
was partially offset by increased selling, general and adminis-
trative expenses.
Other Regions
In Other Regions, revenue increased ¥3.3 billion, or 0.4%, to
¥896.4 billion from the previous fiscal year, due mainly to an
increase in revenue in Automobile businesses, which was
partially offset by a decrease in revenue in Motorcycle
business and negative foreign currency translation effects.
Operating income decreased ¥21.2 billion, or 37.3%, to
¥35.6 billion from the previous fiscal year, due mainly to
increased selling, general and administrative expenses and
negative foreign currency effects.
Honda Motor Co., Ltd. 35