Honda Motor Co., Ltd. Year Ended March 31, 2011 Corporate Profile

Annual Report 2011

Honda Motor Co., Ltd., operates under the basic principles of “Respect for the Individual” and “The Three Joys”—expressed as “The Joy of Buying,” “The Joy of Selling” and “The Joy of Creating.” “Respect for the Individual” reflects our desire to respect the unique character and ability of each individual person, trusting each other as equal partners in order to do our best in every situation. Based on this, “The Three Joys” express our belief and desire that each person working in or coming into contact with our company, directly or through our products, should share a sense of joy through that experience. In line with these basic principles, since its establishment in 1948, Honda has remained on the leading edge by creating new value and providing products of the highest quality at a reasonable price, for worldwide customer satisfaction. In addition, the Company has conducted its activities with a commitment to protecting the environment and enhancing safety in a mobile society. The Company has grown to become the world’s largest motorcycle manufacturer and one of the leading automakers. With a global network of 383* subsidiaries and 91* affiliates accounted for under the equity method, Honda develops, manufactures and markets a wide variety of products to earn the Company an outstanding reputation from customers worldwide. *As of March 31, 2011

Caution with Respect to Forward-Looking Statements This annual report contains “forward-looking statements” as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based on management’s assumptions and beliefs, taking into account information currently available to it. Therefore, please be advised that Honda’s actual results could differ materially from those described in these forward-looking statements as a result of numerous factors, including general economic conditions in Honda’s principal markets; foreign exchange rates between the Japanese yen and the U.S. dollar, the Euro and other major currencies; and extensive environmental and other governmental regulations, as well as other factors detailed from time to time. Contents

2 The Power of Dreams

2 Summary of Operating Results by Business

4 Financial Highlights

6 To Our Shareholders

14 Review of Operations

Power Product and Financial Services Motorcycle Business Automobile Business Other Businesses Business

30 Preparing for the Future

Introducing Honda’s Activities and Publications CSR Report 32 Risk Factors Available on the Internet at the following URL: http://world.honda.com/CSR/

Environmental Report 35 Corporate Governance Available at the following URL: http://world.honda.com/environment/report/

Philanthropy Board of Directors, Corporate Available on the Internet at the following URL: 36 Auditors and Operating Officers http://world.honda.com/community/ On the cover: Honda Civic (North American model) 39 Financial Section The all-new Civic went on sale nationwide in the United States in April 2011. This new Civic is the ninth-generation model, and features dynamic body styling, a pleasant and refined interior, outstanding driving stability and high fuel economy. The lineup includes seven types: the conventional 73 Investor Information gasoline-powered Civic Sedan and Coupe, the HF-type high fuel economy model, the gasoline-electric Civic Hybrid equipped with a lithium-ion battery, the Civic Si Sedan and Coupe as well as the Civic Natural Gas model.

1 Yen (billions) Yen (billions) 9,178 1,600 160

1,200 120

800 80 1,690 400 40 Summary of 190 185 202 0 0 07 08 09 10 11 Japan North Europe Asia Other Operating Results America Regions by Business Yen (billions) Yen (billions) 9,178 1,600 160 Motorcycle Business Automobile Business 1,200 120 Yen (billions) Yen (billions) Yen (billions) Yen (billions) 9,178 1,458 1,600 160 10,000 1,000 800 80 1,008 1,690 1,200 120 7,500 750 400 40 190 185 202 582 800 Percentage80 of Net5,000 Sales 500 0 0 07 08 09 10 11 Japan North Europe Asia Other 14.4% 76.0% 1,690 266 by Business 198 America Regions 400 40 2,500 250 190 185 202 Yen (billions) Yen (billions) 0 0 0 0 9,178 1,600 07 08 09160 10 11 07 08 09 10 11 Japan North Europe Asia Other Japan North Europe Asia Other America Regions America Regions 1,200 120 Yen (billions) Yen (billions) Yen (billions) Yen (billions) 1,458 800 80 9,178 1,600 160 10,000 1,000 1,690 400 40 1,008 1,200 120 7,500190 185 202 750 Yen (billions) Yen (billions) Net SalesYen (billions) / Yen (billions) 1,458 0 0 2,085 582 07 0810,00009 10 11 Operating1,000 Income 400(Loss) 800 80 80 5,000Japan North Europe Asia Other500 America Regions 1,690 266 300 60 1,008 198 Years ended March 31 400 40 2,500 250 1,325 7,500 750 1,174190 185 202 Net Sales (left scale) 200 40 582 0 0 0 0 5,000 500Operating Income (right scale) 537 100 07 08 0920 10 11 07 08 09 10 11 388 Japan North Europe Asia Other Japan North Europe Asia Other 198 266 America Regions America Regions 2,500 250 0 0 Yen (billions) Yen (billions) Yen (billions) Yen (billions) 9,178 1,458 0 0 -100 -20 Japan North Europe Asia Other 1,600 160 10,000 07 08 091,00010 11 07 08 09 10 11 Japan North Europe Asia Other America Regions America Regions 1,008 1,200 120 7,500 750

Unit Sales by Region Yen (billions) Yen (billions) Yen582 (billions) Yen (billions) 1,458 800 80 5,000 500 2,085 (Thousands) 10,000 1,000 400 80 1,690 198 266 400 40 2,500 250 Years ended March 31 1,008 190 185 202 300 60 1,325 2009 7,500 750 1,174 Yen (billions) Yen (billions) Yen (billions) Yen (billions) 200 40 0 0 0 0 2010 2,085 582 07 08 09 10 11 07 08 40009 10 11 80 600 5,000Japan North Europe200 Asia Other500 Japan North Europe Asia Other 537 2011 100 20 388 America Regions America Regions 266 300 60 198 2,500 250 1,325 Germany Canada 450 150 0 1,1740 U.K. 200 40 0 0 -100 -20 300 100 537 U.S.A. Japan North Europe Asia Other 100 20 07 08 09 10 11 07 08 09388 10 11 Thailand JapanJapan North Europe Asia Other America Regions America Regions 0 0 150 50 Brazil Yen (billions) Yen (billions) Yen (billions) Yen (billions) 1,458 -100 -20 0 0 2,085 Japan North Europe Asia Other 10,000 1,000 400 07 08 0980 10 11 07 08 09 10 11 America Regions 1,008 300 60 1,325 7,500 750 1,174 200 40 Yen582 (billions) Yen (billions) Yen (billions) Yen (billions) 5,000 500 537 2,085 100 20 400 80 600388 200 198 266 2,500 250 300 60 2009 2010 2011 0 0 1,325 Germany Canada 450 150 1,174 Yen (billions) Yen (billions) U.K. 0 0 -100 -20 200 40 600 The200 Power of DreamsJapan North Europe Asia Other100 300 U.S.A. 07 08 09 10 11 07 08 09 10 11 Japan North Europe Asia Other America Regions 537 Thailand Japan 100 America Regions20 388 Germany 450 150 0 0 150 50 Canada U.K. Brazil 300 Dreams inspire100 us to create innovative-100 products that enhance-20 mobility0 and benefit society.0 U.S.A. Japan North Europe Asia Other 07 08 09 10 11 07 08 09 10Thailand11 Japan America Regions 150 50 To meet the particular needs of customers in different regions around the world, we Brazil Yen (billions) Yen (billions) Yen (billions) Yen (billions) 0 0 2,085 400 80 600 07 08 base09200 10 our11 sales networks, research & development centers and manufacturing facilities in 300 60 1,325 Germany Canada 2009 2010 2011 450 150 1,174 each region. Furthermore, as a socially responsible corporate citizen,U.K. we strive to address 200 40 Yen (billions) Yen (billions) 300 100 537 U.S.A. 100 20 important environmental and safety600388 issues. 200 Thailand Japan 50 2009 2010 2011 0 0 150 Germany Canada 450 150 Brazil U.K. -100 -20 0 0 Japan300 North Europe Asia Other100 U.S.A. 07 08 09 10 11 07 08 09 10 11 America Regions Thailand Japan

150 50 Brazil 0 0 07 08 09 10 11 2009 2010 2011 Yen (billions) Yen (billions) 600 200 2 450 150 Germany Canada 2009 2010 2011 U.K. 300 100 U.S.A. Thailand Japan

150 50 Brazil 0 0 07 08 09 10 11

2009 2010 2011 Yen (billions) Yen (billions) 9,178 1,600 160

1,200 120

800 80 1,690 400 40 190 185 202

0 0 07 08 09 10 11 Japan North Europe Asia Other America Regions

Yen (billions) Yen (billions) 9,178 1,600 160

1,200 120 Yen (billions) Yen (billions) Yen (billions) Yen (billions) 9,178 1,458 1,600 160 10,000 1,000 800 80 1,008 1,690 1,200 120 7,500 750 400 40 190 185 202 582 800 80 5,000 500 0 0 07 08 09 10 11 1,690 Japan North Europe Asia Other 198 266 America Regions 400 40 2,500 250 190 185 202 Yen (billions) Yen (billions) 0 0 0 0 9,178 1,600 07 08 09160 10 11 07 08 09 10 11 Japan North Europe Asia Other Japan North Europe Asia Other America Regions America Regions 1,200 120 Yen (billions) Yen (billions) Yen (billions) Yen (billions) 1,458 800 80 9,178 1,600 160 10,000 1,000 1,690 400 40 1,008 1,200 120 7,500190 185 202 750 Yen (billions) Yen (billions) Yen (billions) Yen (billions) 1,458 0 0 2,085 582 07 0810,00009 10 11 1,000 400 800 80 80 5,000Japan North Europe Asia Other500 America Regions 1,690 266 300 60 1,008 198 400 40 2,500 250 1,325 7,500 750 1,174190 185 202 200 40 582 0 0 0 0 5,000 500 537 100 07 08 0920 10 11 07 08 09 10 11 388 Japan North Europe Asia Other Japan North Europe Asia Other 198 266 America Regions America Regions 2,500 250 0 0 Yen (billions) Yen (billions) Yen (billions) Yen (billions) 9,178 1,458 0 0 -100 -20 Japan North Europe Asia Other 1,600 160 10,000 07 08 091,00010 11 07 08 09 10 11 Japan North Europe Asia Other America Regions America Regions 1,008 1,200 120 7,500 750

Yen (billions) Yen (billions) Yen582 (billions) Yen (billions) 1,458 800 80 5,000 500 2,085 Power10,000 Product and 1,000 400 80 1,690 198 266 400 40 2,500 250 Other Businesses Financial Services Business 1,008 190 185 202 300 60 1,325 7,500 750 1,174 Yen (billions) Yen (billions) Yen (billions) Yen (billions) 200 40 0 0 0 0 2,085 582 07 08 09 10 11 07 08 40009 10 11 80 600 5,000Japan North Europe200 Asia Other500 Japan North Europe Asia Other 537 100 20 388 America Regions America Regions 266 300 60 198 2,500 250 1,325 Germany Canada 450 150 0 1,1740 U.K. 200 40 0 0 -100 -20 300 100 537 U.S.A. Japan North Europe Asia Other 100 20 07 08 09 3.310 11 % 07 08 09388 106.311 % Thailand JapanJapan North Europe Asia Other America Regions America Regions 0 0 150 50 Brazil Yen (billions) Yen (billions) Yen (billions) Yen (billions) 1,458 -100 -20 0 0 2,085 Japan North Europe Asia Other 10,000 1,000 400 07 08 0980 10 11 07 08 09 10 11 America Regions 1,008 300 60 1,325 7,500 750 1,174 200 40 Yen582 (billions) Yen (billions) Yen (billions) Yen (billions) 5,000 500 537 2,085 100 20 400 80 600388 200 198 266 2,500 250 300 60 2009 2010 2011 0 0 1,325 Germany Canada 450 150 1,174 Yen (billions) Yen (billions) U.K. 0 0 -100 -20 200 40 600 200 Japan300 North Europe Asia Other100 U.S.A. 07 08 09 10 11 07 08 09 10 11 Japan North Europe Asia Other America Regions 537 Thailand Japan 100 America Regions20 388 Germany 450 150 0 0 150 50 Canada U.K. Brazil 300 100 -100 -20 0 0 U.S.A. Japan North Europe Asia Other 07 08 09 10 11 07 08 09 10Thailand11 Japan America Regions 150 50 Brazil Yen (billions) Yen (billions) Yen (billions) Yen (billions) 0 0 2,085 Locations 400 80 600 07 08 09200 10 11 300 60 1,325 Germany Canada 2009 2010 2011 450 150 1,174 U.K. 200 40 Yen (billions) Yen (billions) 300 100 537 U.S.A. 100 20 600388 200 Thailand Japan 50 2009 2010 2011 0 0 150 Germany Canada 450 150 Brazil U.K. -100 -20 0 0 Japan300 North Europe Asia Other100 U.S.A. 07 08 09 10 11 07 08 09 10 11 America Regions Thailand Japan

150 50 Brazil 0 0 07 08 09 10 11 2009 2010 2011 Yen (billions) Yen (billions) 600 200

450 150 Germany Canada 2009 2010 2011 U.K. 300 100 U.S.A. Thailand Japan

150 50 Brazil 0 0 07 08 09 10 11

2009 2010 2011

3 Financial Highlights

Financial Data Yen U.S. dollars Years ended March 31 (millions except per share data) (millions except per share data) 2009 2010 2011 2011 Net sales and other operating revenue ¥10,011,241 ¥8,579,174 ¥8,936,867 $107,479 Operating income 189,643 363,775 569,775 6,852 Income before income taxes and 161,734 336,198 630,548 7,583 equity in income of affiliates Equity in income of affiliates 99,034 93,282 139,756 1,681 Net income attributable to Honda Motor Co., Ltd. 137,005 268,400 534,088 6,423 Cash dividends paid during the period 139,724 61,696 92,170 1,108 Research and development 563,197 463,354 487,591 5,864 Total assets 11,818,917 11,629,115 11,570,874 139,157 Total Honda Motor Co., Ltd. shareholders’ equity 4,007,288 4,328,640 4,449,975 53,517 Capital expenditures 633,913 348,981 326,620 3,928 (excluding purchase of operating lease assets) Depreciation 441,868 401,743 351,496 4,227 (excluding property on operating leases) Per share data Net income attributable to Honda Motor Co., Ltd. ¥ 75.50 ¥ 147.91 ¥ 295.67 $ 3.56 Dividends paid 77 34 51 0.61 Total Honda Motor Co., Ltd. stockholders’ equity 2,208.35 2,385.45 2,469.05 29.69

Note: United States dollar amounts have been translated from yen solely for the convenience of the reader at the rate of ¥83.15=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 March 31, 2011. No representation is made that yen amounts could have been, or could be, converted into U.S. dollars at that rate or any other rate on this or any other date or at all.

Net Sales and Other Operating Revenue Operating Income and Operating Margin Equity in Income of Affiliates YenYen Yen(billions) (billions) (billions) YenYen Yen(billions) (billions) (billions) (%(%) (%) ) YenYen Yen(billions) (billions) (billions) (Thousands)(Thousands)(Thousands) (Thousands)(Thousands)(Thousands) (Thousands)(Thousands)(Thousands) 12,00Yen12,00Yen 12,00Yen(billions) (billions)0 (billions)00 1,000Yen1,000Yen 1,000Yen(billions) (billions) (billions) 10.0(10.0%(10.0%) (%) ) 150Yen150Yen 150Yen(billions) (billions) (billions) (Thousands)12,000(Thousands)12,000(Thousands)12,000 (Thousands)4,000(Thousands)4,000(Thousands)4,000 (Thousands)8,000(Thousands)8,000(Thousands)8,000 12,0012,0012,00000 1,0001,0001,000 10.010.010.0 150150150 12,00012,00012,000 4,0004,0004,000 8,0008,0008,000 750750750 7.57.57.5 3,0003,0003,000 6,0006,0006,000 8,008,008,00000 750750750 7.57.57.5 100100100 8,0008,0008,000 3,0003,0003,000 6,0006,0006,000 8,008,008,00000 100100100 8,0008,0008,000 500500500 5.05.05.0 2,0002,0002,000 4,0004,0004,000 500500500 5.05.05.0 2,0002,0002,000 4,0004,0004,000 4,004,004,00000 505050 4,0004,0004,000 4,004,004,00000 250250250 2.52.52.5 505050 4,0004,0004,000 1,0001,0001,000 2,0002,0002,000 250250250 2.52.52.5 1,0001,0001,000 2,0002,0002,000 000 000 000 000 000 000 000 000070707080808090909101010111111 000070707080808090909101010111111 000 000070707080808090909101010111111 000070707080808090909101010111111 000070707080808090909101010111111 000070707080808090909101010111111 070707080808090909101010111111 OperatingOperatingOperating07 Income07 Income07 Income08 08(left 08(left (leftscale)09 scale)09 scale)09101010111111 070707080808090909101010111111 070707080808090909101010111111 070707080808090909101010111111 070707080808090909101010111111 OperatingOperatingOperating MarginIncome MarginIncome MarginIncome (right(left (right(left (right (leftscale) scale) scale) scale) scale) scale) OperatingOperatingOperating Margin Margin Margin (right (right (right scale) scale) scale)

Total Assets, Total Honda Motor Co., Ltd. Shareholders’ Equity and Total Honda Net Income Attributable to Honda Motor Motor Co., Ltd. Shareholders’ Equity per Capital Expenditures and Depreciation Co., Ltd. and Return on Equity (ROE) Common Share (Excluding Property on Operating Leases) 10,00010,00010,000 10,00010,00010,000 10,00010,00010,000 10,00010,00010,000 10,00010,00010,000 10,00010,00010,000 10,00010,00010,000 10,00010,00010,000 YenYen Yen(billions) (billions) (billions) (%(%) (%) ) YenYen Yen(billions) (billions) (billions) (Yen)(Yen)(Yen) YenYen Yen(billions) (billions) (billions) YenYen Yen(billions) (billions) (billions) YenYen Yen(billions) (billions) (billions) YenYen Yen(billions) (billions) (billions) YenYen Yen(billions) (billions) (billions) 600Yen600Yen 600Yen(billions) (billions) (billions) 20.0(20.0%(20.0%) (%) ) 12,000Yen12,000Yen 12,000Yen(billions) (billions) (billions) 3,0003,000(Yen)3,000(Yen)(Yen) 600Yen600Yen 600Yen(billions) (billions) (billions) 2,000Yen2,000Yen 2,000Yen(billions) (billions) (billions) 10,000Yen10,000Yen 10,000Yen(billions) (billions) (billions) Yen600Yen600 Yen600(billions) (billions) (billions) Yen500Yen500 Yen500(billions) (billions) (billions) 600600600 20.020.020.0 12,00012,00012,000 3,0003,0003,000 600600600 2,0002,0002,000 10,00010,00010,000 600600600 500500500 450450450 15.015.015.0 400400400 450450450 15.015.015.0 8,0008,0008,000 2,0002,0002,000 400400400 1,5001,5001,500 7,5007,5007,500 400400400 8,0008,0008,000 2,0002,0002,000 400400400 1,5001,5001,500 7,5007,5007,500 400400400 300300300 10.010.010.0 400400400 300300300 300300300 10.010.010.0 4,0004,0004,000 1,0001,0001,000 200200200 1,0001,0001,000 5,0005,0005,000 300300300 150150150 5.05.05.0 4,0004,0004,000 1,0001,0001,000 200200200 1,0001,0001,000 5,0005,0005,000 200200200 150150150 5.05.05.0 200200200 200200200 000 000 000 000 000 500500500 2,5002,5002,500 200200200 000070707080808090909101010111111 000 000070707080808090909101010111111 000 000070707080808090909101010111111 500500500 2,5002,5002,500 100100100 100100100 NetNet NetIncome Income Income0707 Attributable07 Attributable Attributable08080809 to09 to09 to101010111111 TotalTotalTotal Assets Assets 07Assets07 (left07 (left 08 (leftscale)08 scale)08 scale)090909101010111111 CapitalCapitalCapital Expenditures07 Expenditures07 Expenditures07080808090909101010111111 NetHondaNetHonda NetHondaIncome Income Motor Income Motor Motor Attributable AttributableCo., AttributableCo., Co., Ltd. Ltd. Ltd.(left to(left to (left scale)to scale) scale) TotalTotalTotal AssetsHonda AssetsHonda AssetsHonda (leftMotor (leftMotor (leftMotorscale) scale) Co., scale) Co., Co., Ltd. Ltd. Ltd.Shareholders’ Shareholders’ Shareholders’ CapitalDepreciationCapitalDepreciationCapitalDepreciation Expenditures Expenditures Expenditures 000 000 000 000 HondaROEHondaROEHondaROE (right (rightMotor (rightMotor scale)Motor scale) Co.,scale) Co., Co., Ltd. Ltd. Ltd.(left (left (leftscale) scale) scale) TotalEquityTotalEquityTotalEquity Honda (leftHonda (leftHonda (leftscale) Motor scale) Motor scale) Motor Co., Co., Co., Ltd. Ltd. Ltd.Shareholders’ Shareholders’ Shareholders’ DepreciationDepreciationDepreciation 000070707080808090909101010111111 000070707080808090909101010111111 000070707080808090909101010111111 000070707080808090909101010111111 ROEROEROE (right (right (right scale) scale) scale) TEquityotalTEquityotalTEquity otalHonda (leftHonda (leftHonda (leftscale) Motor scale) Motor scale) Motor Co., Co., Co., Ltd. Ltd. Ltd.Shareholders’ Shareholders’ Shareholders’ 070707080808090909101010111111 070707080808090909101010111111 070707080808090909101010111111 070707080808090909101010111111 TEquityotalTEquityotalTEquity otalHonda perHonda perHonda Commonper MotorCommon MotorCommon Motor Co., Share Co., Share Co., Ltd.Share Ltd.(right Ltd.Shareholders’(right Shareholders’(right Shareholders’scale) scale) scale) EquityEquityEquity per per Commonper Common Common Share Share Share (right (right (right scale) scale) scale)

JapanJapanJapan NorthNorthNorth America America America EuropeEuropeEurope AsiaAsiaAsia OtherOtherOther Regions Regions Regions JapanJapanJapan NorthNorthNorth America America America EuropeEuropeEurope AsiaAsiaAsia OtherOtherOther Regions Regions Regions Operating Data Years ended March 31 Motorcycles Automobiles Power Products

Unit Sales Breakdown (Thousands) 2010 2011 Change 2010 2011 Change 2010 2011 Change

Japan 190 190 0.0 % 646 582 (9.9)% 322 388 20.5% North America 189 185 (2.1) 1,297 1,458 12.4 1,818 2,085 14.7

Europe 199 202 1.5 249 198 (20.5) 1,066 1,174 10.1

Asia 7,628 9,178 20.3 950 1,008 6.1 1,069 1,325 23.9 Other Regions 1,433 1,690 17.9 250 266 6.4 469 537 14.5

Total 9,639 11,445 18.7 % 3,392 3,512 3.5% 4,744 5,509 16.1%

Power Product and Other Net Sales Motorcycle Business Automobile Business Financial Services Business Businesses Breakdown Yen (millions) 2010 2011 Change 2010 2011 Change 2010 2011 Change 2010 2011 Change

Japan ¥ 70,461 ¥ 70,244 (0.3)% ¥1,383,855 ¥1,310,734 (5.3)% ¥ 24,635 ¥ 26,349 7.0 % ¥ 98,367 ¥ 96,515 (1.9)% North America 103,956 96,664 (7.0) 3,013,432 3,252,852 7.9 553,169 503,960 (8.9) 65,890 67,917 3.1

Europe 124,665 103,890 (16.7) 575,326 441,696 (23.2) 10,428 9,263 (11.2) 54,366 55,264 1.7

Asia 461,067 577,669 25.3 1,041,258 1,221,704 17.3 4,318 3,728 (13.7) 36,754 49,369 34.3 Other Regions 380,143 439,727 15.7 540,977 567,112 4.8 13,802 18,596 34.7 22,305 23,614 5.9

Total ¥1,140,292 ¥1,288,194Yen13.0 (billions)% ¥6,554,848 ¥6,794,098 3.6 % ¥606,352Yen (billions)¥561,896 (7.3)% ¥277,682 ¥292,679(%) 5.4 % Yen (billions) (Thousands) (Thousands) (Thousands) 12,000 1,000 10.0 150 12,000 4,000 8,000

750 7.5 3,000 6,000 8,000 100 8,000

Yen Yen(billions) Yen(billions) Yen(billions) (billions) Yen Yen(billions) Yen(billions) Yen(billions) (billions) (%) (%) (%) (%) Yen Yen(billions) Yen(billions) Yen(billions) (billions) (Thousands)(Thousands)(Thousands)(Thousands) (Thousands)(Thousands)(Thousands)(Thousands) 500 (Thousands)(Thousands)(Thousands)(Thousands) 5.0 2,000 4,000 12,0012,00012,00012,000 0 1,0001,0001,0001,000 10.010.010.010.0 150150150150 12,000Unit12,000 12,000Sales12,000 4,000 4,0004,0004,0004,000 8,0008,0008,0008,000 50 4,000 250 2.5 1,000 2,000 Motorcycles Automobiles Power Products 750750750750 7.57.57.57.5 3,0003,0003,0003,000 6,0006,0006,0006,000 YenYen Yen(billions) 8,00(billions) (billions)8,000 8,000 8,000 0 YenYen Yen(billions) (billions) (billions) (%(%) (%) ) YenYen 100Yen(billions) (billions) 100(billions)100100 (Thousands)(Thousands)(Thousands)8,0008,0008,0008,000 0 (Thousands)(Thousands)(Thousands) 0 (Thousands)(Thousands)(Thousands) 0 0 0 0 0 07 08 09 10 11 07 08 09 10 11 07 08 09 10 11 07 08 09 10 11 07 08 09 10 11 07 08 09 10 11 12,0012,0012,00000 1,0001,0001,000500500500500 10.010.010.05.05.05.05.0 150150150 12,00012,00012,000 4,0004,0002,0004,0002,0002,0002,000 8,0008,0004,0008,0004,0004,0004,000 Operating Income (left scale) 4,004,000 4,000 4,000 0 50 50 50 50 4,0004,0004,0004,000 Operating Margin (right scale) 750750250750250250250 7.57.52.57.52.52.52.5 3,0003,0001,0003,0001,0001,0001,000 6,0006,0002,0006,0002,0002,0002,000 8,008,008,00000 100100100 8,0008,0008,000 0 0 0 0 5005005000 0 0 0 5.05.05.00 0 0 0 0 0 0 0 0 0 0 0 2,0002,0002,0000 0 0 0 4,0004,0004,0000 0 0 0 4,004,004,00000 07 070807080709080908100910091110111011 11 07 070807080709080908100910091110111011 11 505050 07 070807080709080908100910091110111011 11 4,0004,0004,000 07 070807080709080908100910091110111011 11 07 070807080709080908100910091110111011 11 07 070807080709080908100910091110111011 11 250250250OperatingOperatingOperating IncomeOperating Income (left Income (left scale)Income (leftscale) (leftscale) scale) 2.52.52.5 1,0001,0001,000 2,0002,0002,000 OperatingOperatingOperating MarginOperating Margin (right Margin (right Margin scale) (right scale) (right scale) scale) 000 000 000 000 000 000 000 10,000 10,000 10,000 10,000 070707080808090909101010111111 070707080808090909101010111111 070707080808090909101010111111 070707080808090909101010111111 070707080808090909101010111111 070707080808090909101010111111 Yen (billions) (%) Yen (billions) (Yen) Yen (billions) Yen (billions) Yen (billions) Yen (billions) Yen (billions) OperatingOperatingOperating Income Income Income (left (left (leftscale) scale) scale) OperatingOperatingOperating Margin Margin Margin (right (right (right scale) scale) scale) 600 20.0 12,000 3,000 600 2,000 10,000 600 500 Net Sales 450 15.0 400 10,000Motorcycle10,00010,00010,000 Business 10,00010,000Automobile10,00010,000 Business 10,00010,00010,000Financial10,000 Services Business8,000 10,00010,00010,00010,000Power Product and2,000 Other Businesses400 1,500 7,500 400 Yen Yen(billions) Yen(billions) Yen(billions) (billions) (%) (%) (%) (%) Yen Yen(billions) Yen(billions) Yen(billions) (billions) (Yen)(Yen)(Yen)(Yen) Yen Yen(billions) Yen(billions) Yen(billions) (billions) Yen Yen(billions) Yen(billions) Yen(billions) (billions) Yen Yen(billions) Yen(billions) Yen(billions)300 (billions) Yen Yen(billions) Yen(billions)10.0 Yen(billions) (billions) Yen Yen(billions) Yen(billions) Yen(billions) (billions) 300 600600600600 20.020.020.020.012,00012,00012,00012,000 3,0003,0003,0003,000 600600600600 2,0002,0002,0002,000 10,00010,00010,00010,000 600600600600 4,000 500500500500 1,000 200 1,000 5,000 10,00010,00010,000 10,00010,00010,000 150 10,00010,00010,000 5.0 10,00010,00010,000 200 200 450450450450 15.015.015.015.0 0 0 0 400400400400 0 0 500 2,500 YenYen Yen(billions) (billions) (billions) (%(%) (%) ) YenYen Yen(billions) 8,000(billions) (billions)8,0008,0008,000 (Yen)2,000(Yen)(Yen)2,0002,0002,000YenYen 400Yen(billions) (billions) 400(billions)400400 YenYen 1,500Yen(billions) (billions) 1,500(billions)1,5001,500 YenYen Yen(billions) 7,500(billions) (billions)7,5007,5007,500 YenYen Yen(billions) (billions) (billions) YenYen Yen(billions) (billions) (billions) 100 07 08 09 10 40011400400400 07 08 09 10 11 07 08 09 10 11 600600300600300300300 20.020.010.020.010.010.010.012,00012,00012,000 3,0003,0003,000 600600600 2,0002,0002,000 10,00010,00010,000 600600600 500500500 Net Income Attributable to Total Assets (left300 scale)300300300 Capital Expenditures 4,0004,0004,0004,000 1,0001,0001,0001,000 200200200200 1,0001,0001,0001,000 5,0005,0005,000Honda5,000 Motor Co., Ltd. (left scale) Total Honda Motor Co., Ltd. Shareholders’ Depreciation 0 0 0 0 450450150450150150150 15.015.015.05.05.05.05.0 Equity (left400 scale)400400 8,0008,0008,000 2,0002,0002,000 400400400 1,5001,5001,500 7,5007,5007,500 ROE (right scale) 200200200200 07 08 09 10 11 07 08 09 10 11 07 08 09 10 11 07 08 09 10 11 200200200200 Total Honda Motor Co., Ltd. Shareholders’ 400400400 Equity per Common Share (right scale) 3003003000 0 0 0 10.010.010.00 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 500500500500 2,5002,5002,5002,500 300300300 100100100100 07 070807080709080908100910091110111011 11 4,0004,0004,000 07 0708070807090809081009100911101,00011101,0001,00011 11 200200200 07 070807080709080908100910091110111011 11 1,0001,0001,000 5,0005,0005,000 150150150Net IncomeNet IncomeNet Attributable IncomeNet Attributable Income Attributable toAttributable to to to 5.05.05.0 TotalTotal AssetsTotal Assets (leftTotal Assets (leftscale) Assets (leftscale) (leftscale) scale) CapitalCapital ExpendituresCapital ExpendituresCapital Expenditures Expenditures 200200200 HondaHonda MotorHonda MotorHonda Co., Motor Co.,Ltd. Motor Co.,Ltd.(left Co., Ltd.(leftscale) Ltd.(leftscale) (leftscale) scale) TotalTotal HondaTotal Honda MotorTotal Honda Motor Honda Co., Motor Co.,Ltd. Motor Co.,Ltd.Shareholders’ Co.,Ltd.Shareholders’ Ltd.Shareholders’ Shareholders’ DepreciationDepreciationDepreciationDepreciation 0 0 0 0 0 0 0 0 2002002000 0 0 0 0 0 0 0 0ROE00 ROE(right ROE(right scale) ROE(right scale) (right scale) scale) 000 0Equity00Equity (leftEquity (leftscale)Equity (leftscale) (leftscale) scale) 000 000 500500500 07 070807080709080908100910091110112,500102,500112,50011 07 070807080709080908100910091110111011 11 07 070807080709080908100910091110111011 11 07 070807080709080908100910091110111011 11 070707080808090909101010111111 TotalT 07otalHonda07T07 otalHonda 08MotorT otalHonda0808 Motor Honda Co.,09 Motor09 09 Co.,Ltd. Motor10 Co.,Ltd.Shareholders’1010 Co.,Ltd.Shareholders’1111 Ltd.Shareholders’11 Shareholders’ 070707080808090909101010111111 100100100 EquityEquity perEquity CommonperEquity Commonper Commonper Share Common Share (right Share (right scale) Share (right scale) (right scale) scale) Japan North America Europe Asia Other Regions NetNet NetIncome Income Income Attributable Attributable Attributable to to to TotalTotalTotal Assets Assets Assets (left (left (leftscale) scale) scale) CapitalCapitalCapital Expenditures Expenditures Expenditures HondaHondaHonda Motor Motor Motor Co., Co., Co., Ltd. Ltd. Ltd.(left (left (leftscale) scale) scale) TotalTotalTotal Honda Honda Honda Motor Motor Motor Co., Co., Co., Ltd. Ltd. Ltd.Shareholders’ Shareholders’ Shareholders’ DepreciationDepreciationDepreciation 000 000 000 000 ROEROEROE (right (right (right scale) scale) scale) EquityEquityEquity (left (left (leftscale) scale) scale) 070707080808090909101010111111 070707080808090909101010111111 070707080808090909101010111111 070707080808090909101010111111 TotalTotalT otalHonda Honda Honda Motor Motor Motor Co., Co., Co., Ltd. Ltd. Ltd.Shareholders’ Shareholders’ Shareholders’ EquityEquityEquity per per Commonper Common Common Share Share Share (right (right (right scale) scale) scale) 5

JapanJapanJapanJapanNorthNorth AmericaNorth AmericaNorth America AmericaEuropeEuropeEuropeEuropeAsiaAsiaAsiaAsiaOtherOther RegionsOther RegionsOther Regions Regions

JapanJapanJapan NorthNorthNorth America America America EuropeEuropeEurope AsiaAsiaAsia OtherOtherOther Regions Regions Regions To Our Shareholders We would first like to thank you, our shareholders, for your continuing interest in Honda’s business activities and for your ongoing support. We also would like to express our deepest sympathies to those who suffered losses and injuries as a result of the Great East Japan Earthquake and tsunami. Our thoughts are with them, and we express our deepest sympathy from the bottom of our hearts. To our shareholders and others in the stricken areas, we wish to express our deepest sympathies and our sincerest hopes that the devastated areas will be able to recover as quickly as possible.

6 Turning to the economic environment during the fiscal year, in the United States, personal consumption and private capital investment increased gradually, and the economy was on a moderate recovery trend; however, credit contraction and high rates of unemployment persisted. In Europe, economic conditions, in general, improved along with increases in consumer spending and other developments, but unemployment remained high, and there was concern regarding the financial system. In Asia, the economies of China and India expanded, and the remaining countries in the region generally reported recoveries. In Japan, the economy moved into a lull, and, although private capital investment showed some improvement, tough operating conditions continued as trends in consumer spending were weak in some areas and unemployment remained high. It is forecast that the Great East Japan Earthquake will have a depressing impact on the economy for the near term. Under these business conditions, Honda’s consolidated net sales and other operating revenue for the fiscal year ended March 31, 2011 expanded over the previous fiscal year, despite unfavorable currency translation effects, as a result of increases in the sales of motorcycles, automobiles and other Honda products. Such adverse factors as higher selling, general and administrative expenses, increased R&D expenditures, foreign currency movements and the effects of the earthquake had some negative impact. However, operating income and net income attributable to Honda Motor Co., Ltd. grew, reflecting such positive factors as the increase in net sales, changes in the mix of sales, the benefit of higher production volume on costs and overall cost-cutting activities.

Motorcycle Business Total unit sales of motorcycles increased from the previous fiscal year because of higher sales in Asia and other regions, including South America. In Asia, expansion in demand was robust, supported by strong economic performance. In particular, sales in Thailand of Honda’s new Wave 110i and the Scoopy i as well as sales in India of the new CB Twister and the Activa acted as driving forces in bringing a major gain in sales. On the other hand, in North America, where demand did not fully recover, despite a moderate recovery mainly in the sales of utility all-terrain vehicles (ATVs), recovery in the sales of sports ATVs used mainly for recreation and motorcycles for recreation was lagging. Sales in other areas, including South America, picked up after mid-year because of the increased availability of credit and improvement in income. Sales of the CG150 FAN, NXR150, CG125 and other models were strong, mainly in the Brazilian market.

7 Automobile Business Unit sales increased from the previous fiscal year, despite declines in Japan and Europe, as a result of growth in unit sales in North America and Asia. In Japan, operating conditions continued to be tough because of the reactionary decline in demand in the latter half of the fiscal year following the termination of government subsidies. New models were introduced to boost sales, including the Fit Hybrid, but because of the impact of shrinking demand, the adverse effects of the Great East Japan Earthquake and other factors, unit sales decreased. In Europe, in spite of the launch of the CR-Z as a new market entrant and other measures, sales in the region were generally stagnant because of the termination of sales support policies in certain countries in the region, weakness in consumer spending trends and more- intense competition. On the other hand, in North America, along with the moderate recovery in the United States, sales of the new model Odyssey and light trucks expanded. In Asia, demand in China was on a growth trend, and sales of the CR-V, in particular, showed major expansion. Sales also grew in Thailand, Indonesia and elsewhere, amid favorable economic trends.

Power Products and Other Businesses Total unit sales on a consolidated basis increased from the previous fiscal year on the strength of higher sales in all geographical areas. In North America, Europe, Japan and other regions, including South America, along with the increase in demand for construction equipment accompanying the economic recovery, unit sales of general-purpose engines, mainly on an OEM basis, increased. In Asia, unit sales grew along with market expansion, agricultural subsidies provided by certain governments in the region, the effects of weather conditions and other factors.

8 Initiatives Going Forward In recent years, Honda has been experiencing a period of major change in business conditions. Key factors causing this change have been increased awareness on a global scale of issues related to the environment and economic growth in emerging countries, which has brought structural change to the world economy. For Honda to continue to grow and develop, it will be important to create and commercialize advanced environmental technologies, take quick action to strengthen our business position in the markets of emerging countries and, at the same time, restructure our corporate organi- zation to secure profitability. With this awareness, we have positioned the next 10 years as a time for Honda to reform in the direction of “delivering good products to our customers, with speed, affordability and low CO2 emissions”, and right now we are taking aggressive action to do just that. Delivering “good products” means that Honda must create attractive products that customers think are necessary based on our original technology, knowledge and ingenuity. We must do this “with speed” without keeping our customers waiting, and we must deliver them at affordable prices that will make customers think, “I’m glad I bought a Honda”. I believe this is what we want to achieve, and, as a “personal mobility manufacturer”, we must make more-aggressive efforts than ever before to make major reductions in CO2 emissions.

Motorcycles Good Products at Affordable Prices Among motorcycles, there are “commuter” types that play an essential role in providing people with basic transportation, and there are “fun” types that people ride for the joy and pleasure of riding. The market for commuter types in the emerging countries is expanding along with economic growth. With this trend as a driving force, Honda sold approximately 17,952,000 motorcycles last year, the largest number in our history. The principal markets for motorcycles are China, India, Indonesia and other countries that have large popula- tions, and further growth in sales is expected in these countries. In addition, the nations in the African region, especially Nigeria, are new and expanding markets, and we believe they will provide support for Honda’s growth. To respond to this strong demand for commuter-type motorcycles, we believe that more and more affordable prices will be important. In recent years, Honda has taken initiatives to procure parts globally. We have standardized the basic architecture for models in the region to enable us to enjoy economies of scale in parts procurement. We have also promoted improvement activities among local parts manufacturers to set price standards globally as we have also worked to realize synergies.

9 For example, in Brazil, which is an important emerging country, the market share of Honda products is about 80%, but, by far, the most-important factor in Honda’s position in that market is our entry-level models. These are Cub-style 100cc bikes that are light, quick and offer an easy ride, which is exactly the kind of performance that a commuter bike should provide. As we have evolved these bikes as Honda motorcycles, we have created supply systems that enable us to offer them at affordable prices. Also, by making these bikes available at affordable prices, Honda is able to provide products to customers in an even-wider range of markets. In mid-2011, Honda introduced a new 125cc model in Nigeria, the largest bike market in Africa, where about 800,000 motorcycles are sold a year. By using highly competitive parts manufactured in China, Honda is able to offer these bikes to customers in Nigeria at affordable prices. In new markets, competition is tough because motorcycle manufacturers in China and India are already marketing low-priced models, but, by drawing on Honda’s global resources, we will take aggressive action in developing the African market, with Nigeria as the base.

Strengthening the Honda Brand with Distinctive Styling Along with affordable prices based on cost-competitiveness, another important element for success in the motorcycle business is having distinctive “Honda styling.” Particularly for large and sport-type bikes targeted at customers who want to ride their bikes for fun, Honda aims not only for performance and specifications but also pursues strong and indi- vidualistic styling that makes everyone who sees the bike aware that it is a Honda. Design and styling that make potential customers think “I want that Honda bike. I love it.” are key success factors. Honda’s large bikes come in the VFR series and the CB series. The VFR series aims to offer bikes that use the latest technology to make riding an interesting and fun experience. On the other hand, the CB series bikes are in the tradition of styling and value that Honda has created over the years in Japan and the United States. Having two series of bikes, one targeting traditional needs and the other focusing on a new wave, is an advantage for a top motorcycle manufacturer. Our next goal will be to make Honda motorcycles even more unique in terms of design and performance. We are expecting major growth in the global motorcycle market in the years ahead. As a leading motorcycle manufacturer, Honda will work to offer products at affordable prices, using our technology and quality as a foundation. As we work to offer design and styling that is even more unique to Honda, we will continue to respond to the expectations of our customers throughout the world.

10 Automobiles Internal Combustion Engine Evolution and the Spread of Hybrids The current trend in the world automobile market toward more-compact cars with better fuel economy has been accelerated by the growing awareness of environmental issues and the instability of oil prices. As a company providing “personal mobility”, Honda has moved forward with R&D on a full range of environmental technologies and taken initiatives to reduce the burden on the natural environment. Among the various alternatives, and this is especially true for hybrids, we believe that environmental technology will be more valuable if it can appeal to a wider range of customers. That is why we proceeded with the development of our lightweight, compact IMA hybrid system, and, following this, have succeeded in offering vehicles equipped with this system at affordable prices. This hybrid system is now available on the Insight and CR-Z models, and in October 2011, Honda launched a Fit Hybrid model, and will continue to work to expand the market penetration of these vehicles. We believe that hybrid technology will become a mainstay product as one means to reduce the burden on the environment. But, we think that people do not just want a hybrid vehicle, but also a vehicle with competitiveness and performance. In other words, these cars must be more than just hybrids. They also must have good fuel economy, offer a pleasant driving experience, and be available at affordable prices. That is why Honda is working to improve fuel economy by improving both the gasoline engine and battery technology. Also, with a target date in 2012, Honda will introduce a new lineup of gasoline engines and transmissions and is working toward the development of medium-sized and larger “plug- in” hybrid car models that can be recharged using household power outlets. In addition to these initiatives, Honda is proceeding with the development of a Battery Electric Vehicle (EV) that will apply technology it has created for a fuel cell electric vehicle (FCEV). Work is also under way on developing a compact diesel engine for the European market. The results that Honda has achieved by focusing our corporate resources on advanced technology will be applied to creating new products in the years ahead.

Strengthening Our Lineup of Small Cars as the World Shifts to Compacts In response to the worldwide trend toward smaller cars, Honda is working to strengthen our mini-vehicle lineup in Japan and is moving ahead with the development of a new model BRIO compact car for Asia that is scheduled to launch in Thailand and India in 2011. In the mini-vehicle segment, in Japan total new cars sold in 2010 amounted to about 1.73 million units, while the number of registrated vehicles sold was about 3.23 million units. Thus, in terms of units, mini-vehicles accounted for more than 30% of new car sales. Because of issues related to the rising cost of gasoline, customer demand for smaller cars is expected to rise, and an important issue will be how to increase competitiveness in mini-vehicles in the domestic market.

11 To respond effectively to this trend, Honda is already upgrading our mini-vehicle engines, transmissions and platforms. Therefore, an all-new mini-vehicle equipped with technology unique to Honda is expected to be launched in the near future. The BRIO was launched in 2011 in Thailand as an eco-car with good fuel economy as well as exported to other ASEAN member nations. Plans also call for launching the BRIO as an entry-level car in India. To compete successfully in the rapidly expanding market for compact cars in emerging markets, the key factor is “affordability”. Honda will draw on the know-how we have accumulated in Asian countries as a motorcycle manufacturer to enhance our competitiveness in automobiles.

Power Products and Other Businesses Initiatives to Develop and Market New Energy-Generating Products In power products business, Honda supplies general-purpose engines that power construction, agricultural and other types of machinery and, thereby, supplies useful products that help people get things done every day. In emerging markets, these products are even more indispensable for people’s lives than motorcycles, and, as economic growth continues in these countries, their markets are expected to expand. For example, in the African market, demand for electric power generators is expanding, and Honda is drawing on the capabilities of our production bases in China and India to the fullest to expand sales by offering attractive products at affordable prices. Also, in India, along with previously available electric power generators, Honda has begun to manufacture our first inverter power generators in that country, which can be used with high-precision equipment, such as medical devices, and require advanced technology to produce. In China, Honda has also become the first Japanese company to manufacture small tillers in that country. Through these and other activities, Honda is responding to demand in emerging markets by drawing on our technology and know-how to meet customers’ expectations and develop new markets. In addition, as part of our power products business, Honda is working ag- gressively to develop and market new energy-creation products, such as solar power panels and small cogeneration units for household use.

For Honda, the next 10 years will be crucial in determining whether we can successfully survive the major changes taking place in business conditions: namely, the “increased awareness on a global scale of issues related to the natural environment” and “structural change in the world economy”. Hon- da must focus especially on further developing our advanced environmental technologies, strengthening our business position in emerging markets and bolstering our competitiveness in the small car business as we aim to make new leaps forward by enhancing the core characteristics that make Honda unique.

12 Returning Profit to Shareholders Honda strives to conduct its business from a global perspective and to increase its corporate value. We consider the allocation of profits to shareholders to be one of our most-important management responsibilities. Our basic policy for dividends is to make distributions after taking into account our long-term consolidated earnings performance. Honda also acquires its own shares with optimal timing with the goal of improving the efficiency of its capital structure. For fiscal 2011, Honda set a year-end cash dividend of ¥15 per share, bringing total cash dividends for the fiscal year to ¥54 per share. This dividend comprised ¥12 per share for the first quarter, ¥12 per share for the second quarter, ¥15 per share for the third quarter and, the previously mentioned year-end dividend of ¥15 per share. For the fiscal year ending March 31, 2012, we are scheduled to pay quarterly dividends of ¥15 per share, or ¥60 per share for the full year, which will be ¥6 per share higher than in fiscal 2011. We will continue to do our utmost to meet the expectations of our shareholders. Honda is a company where each and every member of management and the organiza- tion works to realize the dream of providing joy to Honda customers by setting challenging objectives, aiming for progress and growth as we look toward a better future at all times and working to open up the frontiers of the future. What we are aiming for today is “to become a company that society wants to exist.” In the future, as in the past, Honda will take up the challenges of advanced creativity inherent in the features and qualities that are associated with the Honda brand by continuing to draw on “The Power of Dreams,” respond to the expectations of society, bring joy to our customers, inspire them and give them satisfaction. We look forward to the continued understanding and support of our shareholders and other investors. We are in this together, for the long term.

June 24, 2011 Takanobu Ito President & Chief Executive Officer

13 Thousands Yen (billions) 12,000 2,000

1,500 8,000

1,000

4,000 500

0 0 07 08 09 10 11 07 08 09 10 11

Thousands Yen (billions) 4,000 10,000 Thousands Yen (billions) 12,0003,000 7,5002,000

2,000 5,0001,500 8,000

1,000 2,5001,000 4,000 0 5000 07 08 09 10 11 07 08 09 10 11 0 0 07 08 09 10 11 07 08 09 10 11

Thousands Yen (billions) 8,000 500 Thousands Yen (billions) 400 6,0004,000 10,000

300 4,0003,000 7,500 200

2,000 5,000 100

1,0000 2,5000 Review of Operations 07 08 09 10 11 07 08 09 10 11 0 0 07 08 09 10 11 07 08 09 10 11

Yen (billions) Yen (billions) Unit Sales 600 6,000 Thousands Yen (billions) Thousands Yen (billions) Thousands 8,000 2010 2011 % change 500 12,000 2,000450 4,500 Japan 190 190 0.0 % 400 6,000300 3,000 North America 1,500 189 185 (2.1) 8,000 300 Europe 4,000 199 202 1.5 1,000150 1,500 200 Asia 7,628 9,178 20.3 4,000 2,000 5000 1000 Other Regions 07 08 09 10 1,43311 1,690 17.9 07 08 09 10 11 Total 0 9,639 11,445 18.7 % 0 0 0 07 08 09 10 11 07 08 09 10 11 07 08 09 10 11 07 08 09 10 11

Japan North America Europe Asia Other Regions Non-current Current

Yen (billions) Yen (billions) Thousands Yen (billions) Net Sales 600 6,000 4,000 10,000 Thousands Yen (billions) Yen (millions) 450 2010 2011 % change 4,500 12,000 3,0002,000 7,500 Japan ¥ 70,461 ¥ 70,244 (0.3)% 300 3,000 2,0001,500 North America 5,000 103,956 96,664 (7.0) 8,000 Europe 150 124,665 103,890 (16.7) 1,500 1,000 2,500 4,000 Asia 461,067 577,669 25.3 500 0 0 0 Other Regions 0 07 08 09 10380,14311 439,727 15.7 07 08 09 10 11 07 08 09 10 11 07 08 09 10 11 0 0 Total ¥1,140,292 ¥1,288,194 13.0 % 07 08 09 10 11 07 08 09 10 11

Japan North America Europe Asia Other Regions Non-current Current Thousands Yen (billions) 8,000 500 Thousands Yen (billions) Percentage of Net Sales by Business 400 4,000 10,0006,000 （千台）（十億円） 300 12,000 2,000 3,000 7,5004,000 200 1,500 2,000 5,0002,000 8100,000

1,000 1,000 2,5000 14.4% 0 07 08 09 10 11 4,000 07 08 09 10 11 0 0 500 07 08 09 10 11 07 08 09 10 11 0 0 07 08 09 10 11 07 08 09 10 11 Yen (billions) Yen (billions) 600 6,000 Thousands Yen (billions) 8,000 500450 4,500 （千台）（十億円） 400 4,000 10,000 6,000 300 3,000 300 3,000 7,500 4,000 150 1,500 200

2,000 2,000 5,000 1000 0 07 08 09 10 11 CBR250R (Japan) 07 08 09 10 11 0 0 1,000 2,500 07 08 09 10 11 07 08 09 10 11 0 0 Japan North America Europe Asia Other Regions Non-current Current 07 08 09 10 11 07 08 09 10 11

Yen (billions) Yen (billions) 600 6,000 （千台）（十億円） 450 4,500 8,000 500

400 300 14 3,000 6,000 300 150 1,500 4,000 200

2,000 0 0 100 07 08 09 10 11 07 08 09 10 11 0 0 07 08 09 10 11 07 08 09 10 11

Japan North America Europe Asia Other Regions Non-current Current

（十億円）（十億円） 600 6,000

450 4,500

300 3,000

150 1,500

0 0 07 08 09 10 11 07 08 09 10 11

日本北米欧州アジアその他の地域長期短期 Motorcycle Business

Honda’s unit sales of motorcycles and all-terrain vehicles (ATVs) totaled 11,445 thousand units, an increase of 18.7% compared with the previous fiscal year, due mainly to an increase in unit sales in Asia and Other Regions, including South America. Revenue from external customers increased ¥147.9 billion, or 13.0%, to ¥1,288.1 billion from the previous fiscal year, due mainly to increased unit sales and revenue related to licensing agreements. Honda estimates that by applying Japanese yen exchange rates of the previous fiscal year to the current fiscal year, net sales for the year would have increased by approximately ¥171.3 billion, or 15.0%, compared to the increase as reported of ¥147.9 billion, which includes the unfavorable foreign currency translation effects. Operating income increased ¥79.7 billion, or 135.6%, to ¥138.5 billion from the previous fiscal year, due mainly to an increase in income attributable to the increased net sales and income related to licensing agreements.

15 Japan Total industry demand for motorcycles in Japan in fiscal 2011 was approximately 420 thousand units*, approximately 3% higher than in the previous fiscal year. Although the percentage of younger people in the total population Four Trax Rancher (North America) continued to decline and there were changes in consumer preferences, unit sales grew primarily due to the introduction of new models. Total unit sales on a consolidated basis were 190 thousand units, and about the same level as in the previous fiscal year, as sales of the scooters PCX and Giorno expanded. In addition, the all-new electric-powered EV-neo, a

commercial-use scooter that emits zero CO2 emissions, was made available on lease.

* Source: JAMA (Japan Automobile Manufacturers Association)

North America Total demand for motorcycles and all-terrain vehicles (ATVs) in the United States during calendar 2010 declined approximately 17% from the previous year, to about 700 thousand* units. Although there were signs of recovery, mainly in sales of utility ATVs, this did not lead to a full-scale recovery in demand. Honda’s consolidated unit sales in North America declined 2.1%, to 185 thousand units. Unit sales of touring models, such as Goldwing, as well as cruiser models includ- Giorno (Japan) ing Shadow, were favorable, however, unit sales of sports models such as CBR1000R and CRF230M motocross models decreased. As a result, unit sales of motorcycles were down 8.2% from the previous fiscal year, to approximately 90 thousand units. However, unit sales of ATVs rose 4.4%, to approximately 95 thousand units, because of strong demand for utility ATVs, including the Four Trax Rancher and other models.

* Source: MIC (Motorcycle Industry Council)

16 Goldwing (North America)

Europe Total demand for motorcycles in Europe* during calendar 2010 declined about 13%, to approximately 920 thousand units. This major drop in demand was due to a number of factors, including a reactionary decline following the end of subsidies for motorcycle purchases in Italy and the impact of an increase in the value-added tax (VAT) in Spain. Honda’s consolidated unit sales in Europe increased 1.5% compared with the previous fiscal year, to 202 thousand units. Despite the effects of a decline in the market for 125cc scooters, units sales of PCX motorcycles were favorable and sales of the naked type CBF1000, the new VFR1200F sports tourer, and other models rose.

* Based on Honda research, the motorcycle registration market for Europe includes 10 countries: the United Kingdom, Germany, France, Italy, Spain, Switzerland, Portugal, the Netherlands, Belgium and Austria. PCX (Europe)

17 CB Twister (India)

Asia Demand for motorcycles continued to expand in Asia, despite price increases, including the price of gasoline, tight- er credit, and other factors in certain countries. In calendar 2010, total demand for motorcycles*1 rose about 10%, to approximately 43.8 million units. Unit sales in India rose about 29%, to approximately 11.3 million units, while sales in Indonesia increased about 26%, to approximately 7.36 million units, and sales in Thai- land expanded approximately 12%, to approximately 1.85 million units. Honda’s unit sales on a consolidated basis in Asia*2 for the fiscal year increased 20.3%, to 9,178 thousand units. This increase was due primarily to an expansion in sales of the CB Twister motorcycle and the Activa scooter in India, Scoopy i (Thailand) unit sales of a new Wave 110i Cub-style 110cc motorcycle and Scoopy i scooter in Thailand, as well as other factors. With respect to production activities, Honda Motorcy- cle & Scooter India Private Limited, Honda’s consolidated subsidiary in India, announced it would further expand the production capacity of a second plant that is already under construction, and also build a third plant, to meet the rapidly expanding demand in the Indian market. Combined with expansion in capacity at the existing plant, when the second plant goes into operation in the first half of calendar 2012, Honda Motorcycle and Scooter India is scheduled to have annual production capacity of approximately 2.8 million units. Additionally, when the third plant goes into operation

18 in the first half of calendar 2013, it is scheduled to have annual production capacity of approximately 4.0 million units. Also, Honda Vietnam Co., Ltd., Honda’s consolidated subsidiary in Vietnam, announced it would expand the capacity of its second plant to meet the favorable increase in demand. By the latter half of calendar 2011, this expansion in facilities is scheduled to bring total annual capacity to approximately 2.0 million units. In Indonesia, P.T. Astra Honda Motor, which is an affiliate accounted for under the equity method, made the decision to build a new plant to respond to continued robust growth in demand. When this new facility goes into operation in the latter half of calendar 2011, the annual production capacity of Astra Honda Motor is scheduled to increase to approximately 4.0 million units. Honda resolved at a meeting of the Board of Directors on December 16, 2010 to sell to its joint venture partners all the shares held by Honda in Hero Honda Motors Limited, an affiliate of Honda accounted for under the equity method, for the dissolution of the joint venture. Accordingly, Honda ex- ecuted the share transfer agreement and new license agree- Wave 110i (Thailand) ments on January 22, 2011. In accordance with the terms of the share transfer agreement, Honda sold all the shares it held in the joint venture partners as of March 22, 2011.

* 1: Based on Honda research, the motorcycle registration market includes eight countries: Thailand, Indonesia, Malaysia, the Philippines, Vietnam, India, Pakistan and China. * 2: This total includes sales of completed products of the Company and its consolidated subsidiaries and unit sales of parts for use in local production to Honda’s affiliates accounted for under the equity method.

Other Regions In Brazil, the principal market within Other Regions, total demand in calendar 2010 increased approximately 12%, to CG150FAN (Brazil) about 1.8 million* units. This was due to improved consumer confidence accompanying increases in the employment rate and personal income as well as increased availability of credit starting from mid-year onward. In Other Regions (including South America, the Middle East, Africa, Oceania and other areas), unit sales rose 17.9% over the previous fiscal year, to 1.69 million units. This was the result of increased sales of mainstay models, including the CG150FAN and NXR150 motorcycles in Brazil.

* Source: ABRACICLO (the Brazilian association of motorcycle, moped, and bicycle manufacturers)

19 Thousands Yen (billions) 12,000 2,000

1,500 8,000

1,000

4,000 500

0 0 07 08 09 10 11 07 08 09 10 11

Thousands Yen (billions) 4,000 10,000 Thousands Yen (billions) 12,0003,000 7,5002,000

2,000 5,0001,500 8,000

1,000 2,5001,000 4,000 0 5000 07 08 09 10 11 07 08 09 10 11 0 0 07 08 09 10 11 07 08 09 10 11

Thousands Yen (billions) 8,000 500 Thousands Yen (billions) Thousands Yen (billions) 4,000 10,000400 12,000 6,0002,000 300 3,000 7,500 4,0001,500 8,000 200 2,000 5,000 1,000 100

4,000 1,000 2,500 5000 0 Review of Operations 07 08 09 10 11 07 08 09 10 11 0 0 0 0 07 08 09 10 11 07 08 09 10 11 07 08 09 10 11 07 08 09 10 11

Yen (billions) Yen (billions) Unit Sales 600 6,000 Thousands Yen (billions) Thousands Yen (billions) Thousands 8,000 2010 2011 % change 500 4,000 10,000450 4,500 Thousands Yen (billions) Japan 646 582 (9.9)% 400 12,000 2,000 6,000300 3,000 3,000 7,500 1,297 1,458 12.4 North America 300 4,000 2,0001,500 Europe 5,000150 249 198 (20.5) 1,500 8,000 200 Asia 950 1,008 6.1 2,000 1,000 2,5000 1000 Other Regions 07 08 09 10 11250 266 6.4 07 08 09 10 11 4,000 500 0 0 0 Total 0 07 08 09 10 3,39211 3,512 3.5 % 07 08 09 10 11 07 08 09 10 11 07 08 09 10 11 0 0 Japan North America Europe Asia Other Regions Non-current Current 07 08 09 10 11 07 08 09 10 11

Yen (billions) Yen (billions) Thousands Yen (billions) Net Sales 600 6,000 8,000 500 Thousands Yen (billions) Yen (millions) 2010 2011 % change 400450 4,500 4,000 10,0006,000 Japan ¥1,383,855 ¥1,310,734 (5.3)% 300 （千300台）（3,000十億円） 3,000 7,5004,000 North America 12,000 3,013,432 3,252,852 7.9 2,000 200 Europe 150 575,326 441,696 (23.2) 1,500 2,000 5,0002,000 100 1,500 Asia 8,000 1,041,258 1,221,704 17.3 0 0 1,000 2,5000 0 Other Regions 07 08 09 10540,97711 567,112 4.8 1,000 07 08 09 10 11 07 08 09 10 11 07 08 09 10 11 0 0 Total 4,000 ¥6,554,848 ¥6,794,098 3.6 % 07 08 09 10 11 07 08 09 10 11 500

Japan North America Europe Asia Other Regions Non-current Current 0 0 Yen (billions) Yen (billions)07 08 09 10 11 07 08 09 10 11 600 6,000 Thousands PercentageYen (billions) of Net Sales by Business 8,000 500450 4,500

400 （千台）（十億円） 6,000 300 3,000 4,000 10,000 300 4,000 150 1,500 200 3,000 7,500

2,000 0 0 100 2,000 5,000 07 08 09 10 11 76.0% 07 08 09 10 11 0 0 07 08 09 10 11 07 08 09 10 11 1,000 2,500

Japan North America Europe Asia Other Regions Non-current Current 0 0 07 08 09 10 11 07 08 09 10 11

Yen (billions) Yen (billions) 600 6,000

（千台）（十億円） 450 4,500 8,000 500

300 3,000 400 6,000

150 1,500 300 4,000 200 0 0 2,000 07 08 09 10 11 07 08 09 10 11 100

0 0 07 08 09 10 11 07 08 09 10 11

Japan North America Europe Asia Other Regions Non-current Current

（十億円）（十億円） 600 6,000 20 450 4,500

300 3,000

150 1,500

0 0 07 08 09 10 11 07 08 09 10 11

日本北米欧州アジアその他の地域長期短期 Automobile Business

Honda’s unit sales of automobiles totaled 3,512 thousand units, an increase of 3.5% compared with the previous fiscal year, due mainly to an increase in unit sales in North America and Asia, which was partially offset by a decrease in unit sales in Japan and Europe. Revenue from external customers increased ¥239.2 billion, or 3.6%, to ¥6,794.0 billion from the previous fiscal year, due mainly to increased unit sales, which was partially offset by the unfavorable foreign currency translation effects. Honda estimates that by applying Japanese yen exchange rates of the previous fiscal year to the current fiscal year, net sales for the year would have increased by approximately ¥545.7 billion, or 8.3%, compared to the increase as reported of ¥239.2 billion, which includes unfavorable foreign currency translation effects. Revenue including intersegment sales increased ¥247.4 billion, or 3.8%, to ¥6,802.3 billion from the previous fiscal year. Operating income increased ¥137.7 billion, or 108.7%, to ¥264.5 billion from the previous fiscal year, due mainly to an increase in income attributable to the increased net sales and continuing cost reductions, which were partially offset by increased selling, general and administrative expenses and R&D expenses, unfavorable foreign currency effects and the impact of the Great East Japan Earthquake (the “Earthquake”), which occurred on March 11, 2011.

Civic si (North America)

21 Japan Total industry automobile sales in Japan* for fiscal 2011 decreased about 6%, to approximately 4.6 million units. In the first half of the fiscal year, automobile sales held firm because of the positive effects of government policies that provided tax breaks and subsidies for purchasing eco-cars and other factors. However, these subsidies came to an end in the latter half of the fiscal year, resulting in a reactionary decline in sales. Honda’s unit sales in Japan decreased 9.9% from the previous fiscal year, to 582 thousand units. Although sales of the new model the Freed Spike, the CR-Z, the StepWGN, which earned the top spot in accumulated sales through 2010 in the minivan category, and the Fit Hybrid were quite favorable, overall sales experienced a reactionary decline after the termination of subsidies for eco-cars. Among production activities, unit output for the domestic market decreased following the termination of the eco-

Fit Hybrid (Japan) car subsidies, but exports increased, with particularly strong unit sales of CR-V models in North America. During the fiscal year under review, Honda’s domestic unit production of automobiles was approximately 912 thousand units, about the same level as in the previous fiscal year. Honda suspended production following the Earthquake, and, as a result, unit output was about 39 thousand units lower than the original plan.

* 1: Source: JAMA (as measured by the number of regular vehicle registrations (661cc or higher) and minivehicles (660cc or lower)) * 2: Certain sales of automobiles that are financed with residual value type auto loans by our domestic finance subsidiaries are accounted for as operating leases in conformity with U.S. generally accepted accounting principles. As a result, they are not included in total sales of our automobile segment or in our measure of unit sales.

Freed Spike (Japan)

22 Europe During calendar 2010, total demand in Europe*1 decreased approximately 5% from the previous year, to approximately CR-Z (Europe) 13.79 million units. During the first half of the year, the market was supported by government subsidies in some countries, but in the second half consumer confidence declined significantly due to the impact of stringent credit policies in the principal countries of the region, and marked declines were reported, especially in markets targeting individual retail customers. On the other hand, in Russia*2, sales increased about 30%, to approximately 1.91 million units. Honda’s consolidated unit sales in Europe decreased 20.5%, to 198 thousand units due to the effects of the slump in the retail sales market, increased competition and other factors. In the area of production, unit output at Honda’s U.K. plant rose 40.0% over the prior fiscal year, to approximately 139 thousand units, in part because of temporarily suspended production in the prior year.

* 1: Source: ACEA (Association des Constructeurs Europeens d’Automobiles (the European Automobile Manufacturers’ Association) (New passenger car registrations cover EU27 and EFTA3.)) * 2: Source: AEB (The Association of European Businesses)

North America Acura TL (North America) In calendar 2010, total industry sales in the United States* increased about 11% over the previous year, to approximately 11.77 million units. Sales of light trucks were especially strong and rose approximately 18% over the level in 2009. Honda’s consolidated automobile unit sales in North America rose 12.4%, to 1,458 thousand units. Sales of the CR-V, Pilot, MDX, the all-new Odyssey that was launched in September 2010, and light trucks were favorable. In addition, sales of the Accord Crosstour and the launching of new models of the TSX Sports Wagon and TL contributed to growth. In production activities, Honda manufactured approximately 1,292 thousand units in North America, 12.1% higher than in the previous fiscal year. This increase was led by higher production of the popular CR-V and Pilot models and the all- new Odyssey.

* Source: Ward’s Auto

23 Odyssey (North America)

Asia In Asia, total demand continued to increase due to robust economic growth and the positive effects of new car model launches. Unit sales in China rose about 32% over the previous year to approximately 18.06 million units.*1 In Asia, excluding China, units sales climbed 27%, to about 7.48 million units.*2 Honda’s unit sales in Asia outside Japan rose 6.1%, to 1,008 thousand units, supported by solid economic expansion in the region. Sales of the CR-V in Thailand, Indonesia, Malaysia and elsewhere in Asia, as well as sales of the City in Thailand, continued to be favorable. Together with sales growth in China, Honda’s overall sales in Asia expanded. In the production area, in response to continued expansion in demand in China’s automobile market, Guangqi Honda Au- tomobile Co., Ltd., an affiliate accounted for under the equity method, is scheduled to increase its annual production capacity from the current 360 thousand to 480 thousand units by the latter half of calendar 2011. In addition, Dongfeng Honda Au- tomobile Co., Ltd., an affiliate accounted for under the equity method, started construction of a second plant in response to continued expansion in demand in China’s automobile market. Within the latter half of calendar 2012, Dongfeng Honda‘s Li Nian S1 (China) total annual production capacity is scheduled to increase to 340 thousand units.

* 1: Source: China Association of Automobile Manufacturers * 2: The total is based on Honda research and includes the following 10 countries: Thailand, Indonesia, Malaysia, the Philippines, Vietnam, Singapore, Taiwan, South Korea, India and Pakistan.

24 City (Thailand)

Other Regions Total industry demand for automobiles in Brazil, one of the principal markets among the Other Regions, increased about 11%, to approximately 3.33 million*1 units in calendar 2010. This was the result of rising consumer confidence due to surges in employment and income as well as an improvement in the purchasing environment for new automobiles due to lower interest rates and increased availability of credit in Brazil. In Australia, total demand for automobiles expanded about 11% over the previous year, to approximately 1.04 million units, supported by continued favorable economic conditions.*2 Honda’s total sales in Other regions expanded 6.4%, to 266 thousand units, due primarily to increased sales of the City in Brazil, despite intensified competition in Australia and decreased sales in the Middle East. Fit (South America) * 1: Source: ANFAVEA (Associacao Nacional dos Fabricantes de Veiculos Automotores (the Brazilian automobile association, includes passenger cars and light commercial vehicles)) * 2: Source: FCAI (Federal Chamber of Automotive Industries (the Australian automobile association))

25 Thousands Yen (billions) 12,000 2,000

1,500 8,000

1,000

4,000 500

0 0 07 08 09 10 11 07 08 09 10 11

Thousands Yen (billions) 4,000 10,000 Thousands Yen (billions) Thousands Yen (billions) 12,000 2,000 12,000 3,0002,000 7,500

2,000 5,0001,500 8,0001,500 8,000 1,000 1,000 2,500 4,000 4,000 500 5000 0 07 08 09 10 11 07 08 09 10 11 0 0 0 0 07 08 09 10 11 07 08 09 10 11 07 08 09 10 11 07 08 09 10 11

Thousands Yen (billions) 8,000 500 Thousands Yen (billions) Thousands Yen (billions) 4,000 10,000400 4,000 10,0006,000 Thousands Yen (billions) 300 3,000 7,500 12,000 3,0002,000 7,5004,000 200

1,500 2,000 5,000 2,000 5,000 100 8,000 1,000 2,500 1,000 2,5000 0 07 08 09 10 11 07 08 09 10 11 4,000 Review of Operations 500 0 0 0 0 07 08 09 10 11 07 08 09 10 11 07 08 09 10 11 07 08 09 10 11 0 0 07 08 09 10 11 07 08 09 10 11 Yen (billions) Yen (billions) Unit Sales 600 6,000 Thousands Yen (billions) Thousands Yen (billions) Thousands 8,000 2010 2011 % change 500 8,000 500450 4,500 Thousands Yen (billions) Japan 322 388 20.5 % 400 4,000 10,000 6,000400300 3,000 6,000 1,818 2,085 14.7 North America 300 300 （4,000千台）（十億円） 3,000 7,5004,000 Europe 150 1,066 1,174 10.1 1,500 12,000 2200,000 Asia 200 1,069 1,325 23.9 2,000 2,000 5,0002,000 0 1000 Other Regions 100 07 08 09 10 11469 537 14.5 1,500 07 08 09 10 11 8,000 0 0 1,000 2,5000 0 Total 07 08 09 10 4,74411 5,509 16.1 %1,000 07 08 09 10 11 07 08 09 10 11 07 08 09 10 11 0 0 4,000 Japan North America Europe Asia Other Regions Non-current Current 07 08 09 10 11 07 08 09 10 11 500

Yen0 (billions) Yen (billions)0 Yen (billions) Yen (billions) Net Sales 600 07 08 09 10 11 6,000 07 08 09 10 11 600 6,000 Thousands Yen (billions) 2010 2011 Yen (millions) 450 % change 4,500 8,000 500450 4,500 Japan ¥ 98,367 ¥ 96,515 (1.9)% 400 （千300台）（3,000十億円） 6,000 300 3,000 North America 4,000 65,890 67,917 3.1 10,000 300 Europe 150 54,366 55,264 1.7 1,500 4,000 150 1,500 3,000 7,500 200 Asia 36,754 49,369 34.3 0 0 2,000 0 0 100 Other Regions 2,000 07 08 09 1022,30511 23,614 5.9 5,000 07 08 09 10 11 07 08 09 10 11 07 08 09 10 11 0 0 Total ¥277,682 ¥292,679 5.4 % 07 08 09 10 11 07 08 09 10 11 1,000 2,500

Japan North America Europe Asia Other Regions Non-current Current Japan North America Europe Asia Other Regions Non-current Current 0 0 07 08 09 10 11 07 08 09 10 11

Yen (billions) Yen (billions) 600 Percentage6,000 of Net Sales by Business HF120 compact turbofan engine (aircraft engine) （千台）（十億円） 450 4,500 8,000 500

300 3,000 400 6,000

150 1,500 300 4,000 3.3% 200 0 0 2,000 07 08 09 10 11 07 08 09 10 11 100

0 0 ENEPO EU9iGB 07 08 09 10 11 07 08 09 10 11 Japan North America Europe Asia Other Regions Non-current Current

（十億円）（十億円） 600 Thin-film solar cells for 6,000 household use BF60 Pianta FV200 450 4,500

300 3,000

150 1,500

0 0 07 08 09 10 11 07 08 09 10 11

日本北米欧州アジアその他の地域長期短期

26 Power Product and Other Businesses

Honda’s unit sales of power products totaled 5,509 thousand units, an increase of 16.1% compared with the previous fiscal year, due to increased unit sales in all the regions. Revenue from external customers increased ¥14.9 billion, or 5.4%, to ¥292.6 billion from the previous fiscal year, due mainly to the increased unit sales of power products, which was partially offset by unfavorable foreign currency translation effects. Honda estimates that by applying Japanese yen exchange rates of the previous fiscal year to the current fiscal year, net sales for the year would have increased by approximately ¥27.5 billion, or 9.9%, compared to the increase as reported of ¥14.9 billion, which includes negative foreign currency translation effects. Revenue including intersegment sales increased ¥13.6 billion, or 4.5%, to ¥318.2 billion from the previous fiscal year. Operating loss including that of other business was ¥5.5 billion, an improvement of ¥11.1 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 unfavorable foreign currency effects.

Japan Other Regions In the power products business during the fiscal year under Unit sales in Other Regions increased 14.5% over the previous review, Honda’s sales increased 20.5%, to 388 thousand units. fiscal year, to 537 thousand units. Factors accounting for this This was due to an increase in sales of general-purpose engines increase were favorable sales of general-purpose engines for for OEM use to manufacturers of construction machinery in the OEM use for installation in construction machinery and pumps United States and in the Middle East and Africa as well as an in- to the Middle East and South America, due mainly to eco- crease in Japan in sales of electric power generators, tillers, snow nomic recovery. blowers and other types of machinery. In May 2010, Honda newly launched the ENEPO EU9iGB, a gas-powered electric power Solar Cell Business generation unit that runs on household butane gas canisters. In October 2007, Honda’s consolidated subsidiary Honda Soltec Co., Ltd. began production of thin-film solar cell modules for North America household use, which have been sold through homebuilders, Honda’s consolidated unit sales in North America increased construction companies and other channels in Japan. In Octo- 14.7%, to 2,085 thousand units. This increase was due to higher ber 2008, Honda Soltec began serving customers in the public sales of general-purpose engines for OEM use to manufacturers sector and industrial markets, including the Hanshin Koshien of lawn mowers, construction machinery, pressure washers and Stadium, logistics centers/warehouses and hospitals. In 2011, other machinery as well as increased sales of generators accom- new thin-film solar cells will go on sale that are even more com- panying the recovery in the economies of the region. pact and feature more-efficient conversion of solar energy to electric power. Europe In Europe, consolidated unit sales increased 10.1% over the Aviation Business previous fiscal year, to 1,174 thousand units, because of strong In April 2011, a Honda aero business subsidiary, Honda Aircraft demand for general-purpose engines for OEM use in construc- Company, Inc., completed construction of its plant for the fab- tion machinery and generators as well as sales of snow blowers, rication of aircraft fuselages at the Piedmont Triad International despite intensified competition in the lawn mower market. Airport in Greensboro, North Carolina, in the United States. In De- cember 2010, the company successfully completed the first test Asia flight of the production model of HondaJet. In Asia outside of Japan, consolidated unit sales increased Next, the aircraft will undergo flight, structural and other tests 23.9%, to 1,325 thousand units. This increase was due to aimed at obtaining type certifications from the Federal Aviation favorable sales of engines for agricultural equipment and Administration in the United States and the European Aviation pumps, generators and brush cutters supported by economic Safety Agency. Preparations are under way to begin production expansion in the region, and continuation of government subsi- in the first half of 2012, and the first HondaJets are slated to be dies for farm households. Weather conditions also contributed delivered to customers in the latter half of 2012. to increased sales. In the area of aircraft engine business, Honda Aero, Inc., a wholly-owned subsidiary of Honda that is responsible for aero engine business, is making progress with certification tests with the goal to obtain certification for its HF120 turbofan jet engines before the end of the current fiscal year ending March 31, 2012.

27 Thousands Yen (billions) 12,000 2,000

Thousands Yen (billions) 12,000 2,000 1,500 8,000

1,500 1,000 8,000 4,000 1,000 500

4,000 5000 0 07 08 09 10 11 07 08 09 10 11

0 0 07 08 09 10 11 07 08 09 10 11

Thousands Yen (billions) 4,000 10,000 Thousands Yen (billions) Thousands Yen (billions) 12,000 2,000 4,000 10,0003,000 7,500 Thousands Yen (billions) 12,000 2,000 1,5002,000 5,000 8,0003,000 7,500

1,000 2,0001,500 5,0001,000 2,500 8,000 4,000 500 1,000 2,5000 0 07 08 09 10 11 07 08 09 10 11 4,000 5000 0 0 07 08 09 10 11 0 07 08 09 10 11 07 08 09 10 11 07 08 09 10 11 0 0 07 08 09 10 11 07 08 09 10 11 Thousands Yen (billions) 8,000 500 Thousands Yen (billions) Thousands Yen (billions) 4,000 10,000 400 8,000 6,000500 Thousands Yen (billions) 300 3,000 7,500400 4,000 10,0006,000 4,000 200 300 2,000 （5,000千台）（十億円） 3,000 7,5004,000 2,000 12,000 2100,000 200 1,000 2,500 2,000 5,0002,000 0 0 100 07 08 09 10 11 1,500 07 08 09 10 11 Review of Operations 8,000 0 0 1,000 2,5000 0 07 08 09 10 11 07 08 09 10 11 1,000 07 08 09 10 11 07 08 09 10 11 0 0 4,000 500 07 08 09 10 11 07 08 09 10 11 Yen (billions) Yen (billions) Net Sales 600 6,000 Thousands Yen 0(billions) 0 Yen (billions) Yen (billions) 8,000 Yen (millions) 500 07 08 09 201010 11 2011 % change 07 08 09 10 11 600 6,000450 4,500 Thousands Yen (billions) Japan 400 ¥ 24,635 ¥ 26,349 7.0 % 8,000 6,000500 300 3,000 450 4,500 553,169 503,960 (8.9) North America 300 4,000400 （千台）（十億円） 6,000 300 Europe 3,000150 10,428 9,263 (11.2) 1,500 4200,000 10,000 300 Asia 4,318 3,728 (13.7) 2,000 4,000 150 1,5001000 0 200 Other Regions 3,000 07 08 09 1013,80211 18,596 34.7 7,500 07 08 09 10 11 0 0 2,000 0 0 100 07 08 09 10 11 Total 2,000 07 08 09 ¥606,35210 11 ¥561,896 (7.3)%5,000 07 08 09 10 11 07 08 09 10 11 0 0 Japan North America Europe Asia Other Regions Non-current Current 07 08 09 10 11 07 08 09 10 11 1,000 2,500

Japan North America Europe Asia Other Regions Yen (billions) Non-current Current Yen (billions)0 0 Finance600 Receivables and Property on Operating Leases6,000 07 08 09 10 11 07 08 09 10 11

Yen (billions) Yen (billions) Yen (millions) 2010 2011 % change 600 6,000450 4,500 Finance Receivables ¥3,461,493 ¥3,479,981 0.5% （千台）（十億円） 450 4,500300 3,000 Property on Operating8,00 0Leases 1,308,147 1,357,632 3.8 500

150 1,500 300 3,000 Total ¥4,769,640 ¥4,837,613 1.4% 400 6,000

150 1,5000 0 300 07 08 09 10 11 4,000 07 08 09 10 11 200 0 0 2,000 07 08 09 10 11 07 08 09 10 11 100

Japan North America Europe Asia Other Regions Finance Property on Receivables Operating Leases 0 0 07 08 09 10 11 07 08 09 10 11

Japan North America Europe Asia Other Regions Finance Property on Receivables Operating Leases Percentage of Net Sales by Business

（十億円）（十億円） 600 6,000

450 4,500 6.3% 300 3,000 150 1,500

0 0 07 08 09 10 11 07 08 09 10 11

日本北米欧州アジアその他の地域長期短期

28 Financial Services Business

To support the sale of its products, Honda provides retail lending Operating income decreased ¥8.6 billion, or 4.4%, to ¥186.2 and leasing to customers and wholesale financing to dealers billion from the previous fiscal year, due mainly to unfavorable through our finance subsidiaries in Japan, the United States, foreign currency effects, which was partially offset by a decrease Canada, the United Kingdom, Germany, Brazil, Thailand and in provisions for credit losses and losses on lease residual values. other countries. Our finance subsidiaries in North America have historically The total amount of finance subsidiaries–receivables and accounted for all leases as direct financing leases. However, property on operating leases of finance subsidiaries increased starting in the fiscal year ended March 31, 2007, some of the by ¥67.9 billion, or 1.4%, to ¥4,837.6 billion from the previous leases that do not qualify for direct financing leases account- fiscal year, due mainly to an increase of finance subsidiaries– ing treatment are accounted for as operating leases. Generally, receivables attributable to the adoption of new accounting direct financing lease revenues and interest income consist of standards, which was partially offset by the negative foreign the recognition of finance lease revenue at the inception of the currency translation effects. Honda estimates that by applying lease arrangement and subsequent recognition of the interest the Japanese yen exchange rates of the previous fiscal year to income component of total lease payments using the effective the current fiscal year, the total amount of finance subsidiaries– interest method. In comparison, operating lease revenues in- receivables and property on operating leases of finance sub- clude the recognition of the gross lease payment amounts on sidiaries as of the end of the year would have increased by ap- a straight line basis over the term of the lease arrangement, proximately ¥595.9 billion, or 12.5%, compared to the increase and operating lease vehicles are depreciated to their estimated as reported of ¥67.9 billion, which includes the negative foreign residual value on a straight line basis over the term of the lease. currency translation effects. It is not anticipated that the differences in accounting for oper- Revenue from external customers in the financial services ating leases and direct financing leases will have a material net business decreased ¥44.4 billion, or 7.3%, to ¥561.8 billion impact on Honda’s results of operations overall, however, oper- from the previous fiscal year. Honda estimates that by apply- ating lease revenues and the associated depreciation of leased ing the Japanese yen exchange rates of the previous fiscal year assets do result in differing presentations and timings compared to the current fiscal year, revenue for the year would have de- to those of direct financing leases. creased by approximately ¥1.2 billion, or 0.2%, compared to Honda consolidated former qualifying special purpose enti- the decrease as reported of ¥44.4 billion, which includes the ties (QSPEs) that were not consolidated as of March 31, 2010. unfavorable foreign currency translation effects. Revenue in- As a result, previously derecognized finance subsidiaries–receiv- cluding intersegment sales decreased ¥45.3 billion, or 7.3%, to ables held by former QSPEs increased in the Company’s consoli- ¥573.4 billion from the previous fiscal year. dated balance sheet as of April 1, 2010. In addition, Honda is Operating costs and expenses decreased ¥36.7 billion, or not recognizing certain gains or losses related to securitization 8.7%, to ¥387.1 billion from the previous fiscal year. Cost of transactions such as gains or losses attributable to the change sales decreased ¥11.6 billion, or 3.6%, to ¥309.8 billion from in the fair value of retained interests since the year ended March the previous fiscal year, due mainly to a decrease in costs related 31, 2011. to lease residual values. Selling, general and administrative expenses decreased ¥25.0 billion, or 24.5%, to ¥77.3 billion from the previous fiscal year, due mainly to a decrease in provisions for credit losses.

29 Medium- and Long-Term Management Strategy and Management Target: Preparing for the Next Leap Forward

Honda aims to achieve global growth by further encouraging and strengthening innovation and creativity and creating quality products that please the customers and exceed their expectations.

1. Research and Development In connection with its efforts to develop the most effective safety and environmental technologies, Honda will continue to be innovative in advanced technology and products. Honda aims to create and introduce new value-added products to quickly respond to specific needs in various markets around the world. Honda will also continue its efforts to conduct research on experimental technologies for the future.

2. Production Efficiency Honda will establish and enhance efficient and flexible production systems at its global production bases and supply high quality products, with the aim of meeting the needs of its customers in each region.

3. Sales Efficiency Honda will remain proactive in its efforts to expand product lines through the innovative use of IT and will show its continued commitment to different customers throughout the world by upgrading its sales and service structure.

4. Product Quality In response to increasing customer demand, Honda will upgrade its quality control by enhancing the functions of and coordination among the development, purchasing, production, sales and service departments.

5. Safety Technologies Honda is working to develop safety technologies that enhance accident prediction and prevention, technologies to help reduce the risk of injuries to passengers and pedestrians from car accidents, and technologies that enhance compatibility between large and small vehicles, as well as expand its lineup of products incorporating such technologies. Honda will reinforce and continue to advance its contribution to traffic safety in motorized societies in Japan and abroad. Honda also intends to remain active in a variety of traffic safety programs, including advanced driving and motorcycling training programs provided by local dealerships.

6. The Environment Honda will step up its efforts to create better, cleaner and more fuel-efficient engine technologies and to further improve recyclables throughout its product lines. Honda will also work to advance fuel cell technology and steadily promote its new solar cell business. In addition, Honda will further its efforts to minimize its environmental impact. To this end, Honda sets global targets to reduce the environmental burden as measured by the Life Cycle Assessment*, in all areas of business, spanning production, logistics and sales. * Life Cycle Assessment: A comprehensive system for quantifying the impact Honda’s products have on the environment at the different stages in their life cycles, from material procurement and energy consumption to waste disposal.

30 Therefore, in order to improve the competitiveness of its products, Honda will endeavor to enhance its R&D, production and sales capabilities. Furthermore, Honda will continue to enhance its social reputation in the community through companywide activities. Honda recognizes that further enhancing the following specific areas is essential to its success:

7. Continuing to In addition to continuing to provide products incorporating Honda’s advanced safety and Enhance Honda’s environmental technologies, Honda will continue striving to enhance its social reputation by, Social Reputation among other things, strengthening its corporate governance, compliance, and risk manage- and Communication with the Community ment as well as participating in community activities and making philanthropic contributions. To achieve these targets, Honda will make all possible efforts in pursuit of its vision for the Company as it moves towards 2020: “To provide good products in a timely fashion, at afford-

able prices, and with low CO2 emissions”.

8. Immediate Issues for The Company temporarily suspended production at its sites located in Japan due to the effects Attention of the Great East Japan Earthquake occurred on March 11, 2011, which included a shortage of parts supplies. In addition, some of Honda’s business sites, such as Honda’s R&D subsidiaries located in Tochigi Prefecture, were heavily damaged. By April 11, 2011, the Company had resumed production activities at all of its production sites; however, production of completed automobiles at plants within Japan and production of components and parts for Honda’s overseas sites had been operating at approximately half the normal rate. Production in Japan has been nearly normalized in late June. Production at Honda’s automobile plants overseas has been reduced as well and is expected to be nearly normalized around August to September. In such circumstances, Honda will endeavor to normalize the supply chain continuously and aims to return to normal production as soon as possible. Honda will work on sales pickup by the recovery of production and bring about the recovery of its operations as soon as possible. Taking into account this experience, Honda will strive to minimize risks that have surfaced due to the earthquake disaster, including risks related to supply chain disruption. In response to the occurrence of inappropriate activities at Honda Trading Corporation, which is a subsidiary of the Company, and based on the investigation report and suggestion for preventive countermeasures that was submitted to the Company’s board of directors by the investigation committee established with external experts, the Company will build a system to make appropriate business judgments in accordance with the applicable laws and regulations and will further enhance corporate governance, increasing compliance awareness, and strengthening the risk management systems, including through the reexamination of person- nel management systems.

Through these company-wide activities, Honda will strive to be a company that its shareholders, investors, customers and society want to exist.

31 Risk Factors Risks Relating to the Great East Japan Earthquake and its Aftermath The Great East Japan Earthquake occurred on March 11, 2011 and the Fukushima’s nuclear power plant disaster have caused and will continue to cause significant damage to the Japa- nese economy. After March 11, 2011, Honda temporarily suspended or reduced production at Honda’s automobile plants in and outside of Japan. However, the production in Japan has in general returned to normal levels since late June, and production outside of Japan is expected to be generally normalized from around August to September. In addition, although Honda’s business sites, such as Honda’s R&D subsidiaries located in Tochigi Prefecture, were heavily damaged, currently we expect them to be restored. Although prospects for restoration of business activities have become clear, as mentioned above, Honda’s production activities may be affected depending on the status of the future supply of certain parts for which supply is currently restricted, and on the status of infrastructure, such as the supply of electricity and logistics services. Furthermore, sales in domestic and international markets may decline. Depending on the magnitude of these effects, Honda’s results of operations may be adversely affected.

Risks Relating to Honda’s Industry 1. Honda may be Honda conducts its operations in Japan and throughout the world, including North America, adversely affected Europe and Asia. A sustained loss of consumer confidence in these markets, which may be by market caused by continued economic slowdown, recession, changes in consumer preferences, rising conditions fuel prices, financial crisis or other factors could trigger a decline in demand for automobiles, motorcycles and power products that may adversely affect Honda’s results of operations.

2. Prices for Prices for automobiles, motorcycles and power products in certain markets may experience automobiles, sharp changes over short periods of time. This volatility is caused by many factors, including motorcycles and fierce competition, which is increasing, short-term fluctuations in demand from instability in power products can be volatile underlying economic conditions, changes in tariffs, import regulations and other taxes, short- ages of certain materials and components, high material prices and sales incentives by Honda or other manufacturers or dealers. There can be no assurance that such price volatility will not continue or intensify or that price volatility will not occur in markets that to date have not experienced such volatility. Overcapacity within the industry has increased and will likely continue to increase if the economic downturn continues in Honda’s major markets or worldwide, leading, potentially, to further increased price pressure. Price volatility in any or all of Honda’s markets could adversely affect Honda’s results of operations in a particular period.

Risks Relating to Honda’s Business Generally — Currency and Interest Rate Risks — 1. Honda’s operations Honda has manufacturing operations throughout the world, including Japan, and exports are subject products and components to various countries. to currency Honda purchases materials and components and sells its products and components in fluctuations foreign currencies. Therefore, currency fluctuations may affect Honda’s pricing of products sold

32 and materials purchased. Accordingly, currency fluctuations have an effect on Honda’s results of operations and financial condition, as well as Honda’s competitiveness, which will over time affect its results. Since Honda exports many products and components, particularly from Japan, and gener- ates a substantial portion of its revenues in currencies other than the Japanese yen, Honda’s results of operations would be adversely affected by an appreciation of the Japanese yen against other currencies, in particular the U.S. dollar.

2. Honda’s hedging Although it is impossible to hedge against all currency or interest rate risk, Honda uses derivative of currency and financial instruments in order to reduce the substantial effects of currency fluctuations and inter- interest rate risk est rate exposure on our cash flow and financial condition. These instruments include foreign exposes Honda to other risks currency forward contracts, currency swap agreements and currency option contracts, as well as interest rate swap agreements. Honda has entered into, and expects to continue to enter into, such hedging arrangements. As with all hedging instruments, there are risks associated with the use of such instruments. While limiting to some degree our risk fluctuations in currency exchange and interest rates by utilizing such hedging instruments, Honda potentially forgoes benefits that might result from other fluctuations in currency exchange and interest rates. Hon- da is also exposed to the risk that its counterparties to hedging contracts will default on their obligations. Honda manages exposure to counterparty credit risk by limiting the counterparties to major international banks and financial institutions meeting established credit guidelines. However, any default by such counterparties might have an adverse effect on Honda.

— Legal and Regulatory Risks — 1. The automobile, Regulations regarding vehicle emission levels, fuel economy, noise and safety and noxious motorcycle and power substances, as well as levels of pollutants from production plants, are extensive within the au- product industries are tomobile, motorcycle and power product industries. These regulations are subject to change, subject to extensive environmental and other and are often made more restrictive, particularly in recent years, due to an increasing concern governmental regulations, with respect to possible global climate changes. The costs to comply with these regulations can including with respect to be significant to Honda’s operations. global climate changes

2. Honda is reliant on Honda owns or otherwise has rights in a number of patents and trademarks relating to the the protection and products it manufactures, which have been obtained over a period of years. These patents preservation of its and trademarks have been of value in the growth of Honda’s business and may continue to be intellectual property of value in the future. Honda does not regard any of its businesses as being dependent upon any single patent or related group of patents. However, an inability to protect this intellectual property generally, or the illegal infringement of some or a large group of Honda’s intellectual property rights, would have an adverse effect on Honda’s operations.

3. Honda is Honda is and could be subject to suits, investigations and proceedings under relevant laws subject to legal and regulations of various jurisdictions. A negative outcome in any of the legal proceedings proceedings pending against Honda could adversely affect Honda’s business, financial condition or results of operations.

33 — Risks Relating to Honda‘s Operations — 1. Honda’s financial Honda’s financial services business offers various financing plans to its customers designed to services business increase the opportunity for sales of its products and to generate financing income. However, conducts business customers can also obtain financing for the lease or purchase of Honda’s products through a under highly competitive conditions variety of other sources that compete with our financing services, including commercial banks in an industry with and finance and leasing companies. The financial services offered by us also involve credit risk inherent risks as well as risks relating to lease residual values, cost of capital and access to funding. Competi- tion for customers and/or these risks may affect Honda’s results of operations in the future.

2. Honda relies on Honda purchases raw materials, and certain components and parts, from numerous external various suppliers suppliers, and relies on some key suppliers for some items and the raw materials it uses in the for the provision of manufacture of its products. Honda’s ability to continue to obtain these supplies in an efficient certain raw materials and components and cost-effective manner is subject to a number of factors, some of which are not within Honda’s control. These factors include the ability of its suppliers to provide a continued source of supply and Honda’s ability to compete with other users in obtaining the supplies. Loss of a key supplier in particular may affect our production and increase our costs.

3. Honda conducts Honda conducts its businesses worldwide, and in several countries, Honda conducts businesses its operations in through joint ventures with local entities, in part due to the legal and other requirements of various regions those countries. These businesses are subject to various regulations, including the legal and of the world other requirements of each country. If these regulations or the business conditions or policies of these local entities change, it may have an adverse affect on Honda’s business, financial condition or results of operations.

4. Honda may be adversely Honda conducts its businesses worldwide, and its operations may variously be subject to wars, affected by wars, use of use of force by foreign countries, terrorism, multinational conflicts, political uncertainty, natural force by foreign countries, disasters, epidemics, labor strikes and other events beyond our control which may delay or terrorism, multinational conflicts, political disrupt Honda’s local operations in the affected regions, including the purchase of raw materials uncertainty, natural and parts, the manufacture, sales and distribution of products and the provision of services. disasters, epidemics and Delays or disruptions in one region may in turn affect our global operations. If such delay or labor strikes disruption occurs and continues for a long period of time, Honda’s business, financial condition or results of operations may be adversely affected.

5. Honda may be Although Honda maintains internal controls through established procedures to keep confi- adversely affected dential information including personal information of its customers and relating parties, such by inadvertent information may be inadvertently disclosed. If this occurs, Honda may be subject to, and may be disclosure of confidential adversely affected by, claims for damages from the customers or parties affected. Also, inadvert- information ent disclosure of confidential business or technical information to third parties may result in a loss of Honda’s competitiveness.

34 6. Risks relating to Honda has pension plans and provides other post-retirement benefits. The amounts of pension pension costs and benefits, lump-sum payments and other post-retirement benefits are primarily based on the other postretirement combination of years of service and compensation. The funding policy is to make periodic con- benefits tributions as required by applicable regulations. Benefit obligations and pension costs are based on assumptions of many factors, including the discount rate, the rate of salary increase and the expected long-term rate of return on plan assets. Differences in actual expenses and costs or changes in assumptions could affect Honda’s pension costs and benefit obligations, including Honda’s cash requirements to fund such obligations, which could materially affect our financial condition and results of operations.

7. A holder of ADSs will The rights of shareholders under Japanese law to take various actions, including exercising have fewer rights than a voting rights inherent in their shares, receiving dividends and distributions, bringing derivative shareholder has and such holder will have to act actions, examining a company’s accounting books and records, and exercising appraisal rights, through the depositary to are available only to holders of record. Because the depositary, through its custodian agents, exercise those rights is the record holder of the Shares underlying the ADSs, only the depositary can exercise those rights in connection with the deposited Shares. The depositary will make efforts to exercise votes regarding the Shares underlying the ADSs as instructed by the holders and will pay to the holders the dividends and distributions collected from the Company. However, in the capacity as an ADS holder, such holder will not be able to bring a derivative action, examine our accounting books or records or exercise appraisal rights through the depositary.

8. Rights of shareholders The Company’s Articles of Incorporation, Regulations of the Board of Directors, Regulations under Japanese law may of the Board of Corporate Auditors and the Company Law of Japan (the “Company Law”) be more limited than under the laws of other govern corporate affairs of the Company. Legal principles relating to such matters as the validity jurisdictions of corporate procedures, directors’ and officers’ fiduciary duties, and shareholders’ rights may be different from those that would apply if the Company were a U.S. company. Shareholders’ rights under Japanese law may not be as extensive as shareholders’ rights under the laws of the United States. An ADS holder may have more difficulty in asserting his/her rights as a shareholder than such ADS holder would as a shareholder of a U.S. corporation. In addition, Japanese courts may not be willing to enforce liabilities against the Company in actions brought in Japan that are based upon the securities laws of the United States or any U.S. state.

9. Because of daily price Stock prices on Japanese stock exchanges are determined on a real-time basis by the equilibrium range limitations under between bids and offers. These exchanges are order-driven markets without specialists or mar- Japanese stock exchange rules, a holder of ADSs ket makers to guide price formation. To prevent excessive volatility, these exchanges set daily may not be able to sell upward and downward price fluctuation limits for each stock, based on the previous day’s his/her shares of the closing price. Although transactions may continue at the upward or downward limit price if the Company’s Common limit price is reached on a particular trading day, no transactions may take place outside these Stock at a particular price on any particular trading limits. Consequently, an investor wishing to sell at a price above or below the relevant daily limit day, or at all may not be able to sell his or her shares at such price on a particular trading day, or at all.

35 10. U.S. investors may have The Company is a limited liability, joint stock corporation incorporated under the laws of Japan. difficulty in serving Most of its directors, executive officers and corporate auditors reside in Japan. All or substantially process or enforcing a judgment against the all of the Company’s assets and the assets of these persons are located in Japan and elsewhere Company or its directors, outside the United States. It may not be possible, therefore, for U.S. investors to effect service of executive officers or process within the United States upon the Company or these persons or to enforce against the corporate auditors Company or these persons judgments obtained in U.S. Courts predicated upon the civil liability provisions of the Federal securities laws of the United States. There is doubt as to the enforce- ability in Japan, in original actions or in actions for enforcement of judgment of U.S. courts, of liabilities predicated solely upon the federal securities laws of the United States.

11. The Company’s The customary dividend payout practice and relevant regulatory regime of publicly listed shareholders of record companies in Japan may differ from that followed in foreign markets. The Company’s dividend on a record date may not payout practice is no exception. While the Company may announce forecasts of year-end and receive the dividend they anticipate quarterly dividends prior to the record date, these forecasts are not legally binding. The actual payment of year-end dividends requires a resolution of the Company’s shareholders. If the shareholders adopt such a resolution, the year-end dividend payment is made to shareholders as of the applicable record date, which is currently specified as March 31 by the Company’s Articles of Incorporation. However, such a resolution of the shareholders is usually made at an ordinary general meeting of shareholders held in June. The payment of quarterly dividends requires a resolution of the Company’s board of directors. If the board adopts such a resolution, the dividend payment is made to shareholders as of the applicable record dates, which are currently specified as June 30, September 30 and December 31 by the Articles of Incorporation. However, the board usually does not adopt a resolution with respect to a quarterly dividend until after the respective record dates.

Shareholders of record as of an applicable record date may sell shares after the record date in anticipation of receiving a certain dividend payment based on the previously announced forecasts. However, since these forecasts are not legally binding and resolutions to pay dividends are usually not adopted until after the record date, our shareholders of record on record dates for year-end and quarterly dividends may not receive the dividend they anticipate.

Additional risks not currently known to Honda or that Honda now deems immaterial may also harm Honda and affect your investment.

36 Corporate Governance

Companies listed on the New York Stock Exchange (the “NYSE”) The following table shows the significant differences between must comply with certain standards regarding corporate govern- the corporate governance practices followed by U.S. listed com- ance under Section 303A of the NYSE Listed Company Manual. panies under Section 303A of the NYSE Listed Company Manual However, listed companies that are foreign private issuers, and those followed by Honda. such as Honda, are permitted to follow home-country practice in lieu of certain provisions of Section 303A.

Corporate Governance Practices Followed by Corporate Governance Practices Followed by Honda NYSE-Listed U.S. Companies

An NYSE-listed U.S. company must have a majority of directors For Japanese companies which employ a corporate governance system based on a meeting the independence requirements under Section 303A of the board of corporate auditors (the “board of corporate auditors system”), including NYSE Listed Company Manual. Honda, Japan’s Company Law has no independence requirement with respect to directors. The task of overseeing management and, together with the accounting audit firm, accounting is assigned to the corporate auditors, who are separate from the company’s management and meet certain independence requirements under Japan’s Company Law. In the case of Japanese companies that employ the board of corporate auditors system, including Honda, at least half of the corporate auditors must be “outside” corporate auditors who must meet additional independence requirements under Japan’s Company Law. An outside corporate auditor is defined as a corporate auditor who has not served as a director, accounting councilor, executive officer, manager, or any other employee of the company or any of its subsidiaries. Currently, Honda has three outside corporate auditors which constitute 60% of Honda’s five corporate auditors.

An NYSE-listed U.S. company must have an audit committee Like a majority of Japanese companies, Honda employs the board of corporate composed entirely of independent directors, and the audit committee auditors system as described above. Under this system, the board of corporate must have at least three members. auditors is a legally separate and independent body from the board of directors. The main function of the board of corporate auditors is similar to that of independent directors, including those who are members of the audit committee, of a U.S. company: to monitor the performance of the directors, and review and express an opinion on the method of auditing by the company’s accounting audit firm and on such accounting audit firm’s audit reports, for the protection of the company’s shareholders. Japanese companies which employ the board of corporate auditors system, including Honda, are required to have at least three corporate auditors. Currently, Honda has five corporate auditors. Each corporate auditor has a four-year term. In contrast, the term of each director of Honda is one year. With respect to the requirements of Rule 10A-3 under the U.S. Securities Exchange Act of 1934 relating to listed company audit committees, Honda relies on an exemption under that rule which is available to foreign private issuers with boards of corporate auditors meeting certain criteria.

An NYSE-listed U.S. company must have a nominating/corporate Honda’s directors are elected at a meeting of shareholders. Its Board of Directors governance committee composed entirely of independent directors. does not have the power to fill vacancies thereon. Honda’s corporate auditors are also elected at a meeting of shareholders. A proposal by Honda’s Board of Directors to elect a corporate auditor must be approved by a resolution of its Board of Corporate Auditors. The Board of Corporate Auditors is empowered to request that Honda’s directors submit a proposal for election of a corporate auditor to a meeting of shareholders. The corporate auditors have the right to state their opinion concerning election of a corporate auditor at the meeting of shareholders.

An NYSE-listed U.S. company must have a compensation committee Maximum total amounts of compensation for Honda’s directors and corporate composed entirely of independent directors. auditors are proposed to, and voted on, by a meeting of shareholders. Once the proposals for such maximum total amounts of compensation are approved at the meeting of shareholders, each of the Board of Directors and Board of Corporate Auditors determines the compensation amount for each member within the respective maximum total amounts.

An NYSE-listed U.S. company must generally obtain shareholder Currently, Honda does not adopt stock option compensation plans. If Honda were approval with respect to any equity compensation plan. to adopt such a plan, Honda must obtain shareholder approval for stock options only if the stock options are issued with specifically favorable conditions or price concerning the issuance and exercise of the stock options.

37 Board of Directors, Corporate Auditors and Operating Officers

President, Executive Vice President, Chairman and Chief Executive Officer and Executive Officer and Front row: Representative Director Representative Director Representative Director Koichi Kondo Takanobu Ito Akio Hamada

Senior Managing Senior Senior Managing Senior Managing Back row: Officer and Director Managing Officer Officer and Director Officer and Director Fumihiko Ike Tetsuo Iwamura Tatsuhiro Oyama Tomohiko Kawanabe

38 Directors

Chairman and Representative Director Koichi Kondo Compliance Officer

President, Takanobu Ito Chief Operating Officer for Automobile Operations Chief Executive Officer and Representative Director

Executive Vice President, Akio Hamada Chief Operating Officer for Production Operations Executive Officer and Representative Director

Senior Managing Officer and Director Tatsuhiro Oyama Chief Operating Officer for Motorcycle Operations Chief Officer of Driving Safety Promotion Center

Senior Managing Officer and Director Fumihiko Ike Chief Operating Officer for Business Management Operations Risk Management Officer General Supervisor, Information Systems

Senior Managing Officer and Director Tomohiko Kawanabe Quality, Certification & Regulation Compliance

Managing Officer and Director Yoshiharu Yamamoto President, Chief Executive Officer and Director of Honda R&D Co., Ltd.

Director Kensaku Hogen

Director Nobuo Kuroyanagi Chairman of The Bank of Tokyo-Mitsubishi UFJ, Ltd.

Director and Advisor Takeo Fukui

Operating Officer and Director Takuji Yamada Chief Operating Officer for Power Product Operations

Operating Officer and Director Masahiro Yoshida Chief Operating Officer for Business Support Operations

Note: Mr. Kensaku Hogen and Mr. Nobuo Kuroyanagi satisfy the required conditions for the outside director provided for in Article 2, Paragraph 1, Item 15 of the Company Law.

Corporate Auditors

Corporate Auditor (Full-time) Toru Onda

Corporate Auditor (Full-time) Hideki Okada

Corporate Auditor Fumihiko Saito Representative of the Saito Law Office

Corporate Auditor Hirotake Abe Certified Public Accountant Hirotake Abe Office

Corporate Auditor Tomochika Iwashita

Note: Corporate Auditors Mr. Fumihiko Saito, Mr. Hirotake Abe and Mr. Tomochika Iwashita are outside corporate auditors as provided for in Article 2, Paragraph 1, Item 16 of the Company Law.

39 Executive Officers

President, Chief Executive Officer Takanobu Ito Chief Operating Officer for Automobile Operations Executive Vice President Akio Hamada Chief Operating Officer for Production Operations Senior Managing Officer Tetsuo Iwamura Chief Operating Officer for Regional Operations (North America) President and Director of Honda North America, Inc. President and Director of American Honda Motor Co., Inc. Senior Managing Officer Tatsuhiro Oyama Chief Operating Officer for Motorcycle Operations Chief Officer of Driving Safety Promotion Center Senior Managing Officer Fumihiko Ike Chief Operating Officer for Business Management Operations Risk Management Officer General Supervisor, Information Systems Senior Managing Officer Tomohiko Kawanabe Responsible for Quality, Certification and Regulation Compliance Managing Officer Takashi Yamamoto General Manager of Automobile Production Office, Production Operations Managing Officer Masaya Yamashita Chief Operating Officer for Purchasing Operations Managing Officer Hidenobu Iwata President and Director of Honda of America Mfg., Inc. Managing Officer Manabu Nishimae Chief Operating Officer for Regional Operations (Europe, the Middle &Near East and Africa) President and Director of Honda Motor Europe Ltd. Managing Officer Koichi Fukuo Executive in Charge of Business Unit No. 1, Automobile Operations Managing Officer Hiroshi Kobayashi Chief Operating Officer for Regional Operations (Asia & Oceania) President and Director of Asian Honda Motor Co., Ltd. Managing Officer Sho Minekawa Chief Operating Officer for Regional Sales Operations (Japan) Managing Officer Yoshiharu Yamamoto President, Chief Executive Officer and Director of Honda R&D Co., Ltd. Managing Officer Toshihiko Nonaka Responsible for Products, Automobile Operations Senior Managing Officer and Director, Honda R&D Co., Ltd. Operating Officer Takuji Yamada Chief Operating Officer for Power Product Operations Operating Officer Masahiro Takedagawa Chief Operating Officer for Regional Operations (Latin America) President and Director of Honda South America Ltda. President and Director of Moto Honda da Amazonia Ltda. President and Director of Honda Automoveis do Brazil Ltda. Operating Officer Yoshiyuki Matsumoto Executive in Charge of Business Unit No. 3, Automobile Operations Operating Officer Ko Katayama General Manager of Saitama Factory of Production Operations Operating Officer Masahiro Yoshida Chief Operating Officer for Business Support Operations Operating Officer Seiji Kuraishi Chief Operating Officer for Regional Operations (China) President of Honda Motor (China) Investment Co., Ltd. Operating Officer Takashi Nagai President and Director of Honda Siel Cars India Ltd. President and Director of Honda Motor India Private Ltd. Operating Officer Katsushi Watanabe General Manager of Kumamoto Factory of Production Operations Operating Officer Toshiaki Mikoshiba President of Guangqi Honda Automobile Co., Ltd. Operating Officer Yoshi Yamane Executive Vice President of Honda Motor (China) Investment Co., Ltd. Operating Officer Takashi Sekiguchi President and Director of Honda Canada Inc. Operating Officer Takahiro Hachigo General Manager of Suzuka Factory of Production Operations Operating Officer Hiroshi Sasamoto President, Chief Executive Officer and Director of Honda Engineering Co., Ltd. Operating Officer Hiroyuki Yamada Chief Operating Officer for Customer Service Operations Operating Officer Chitoshi Yokota Executive in Charge of Business Unit No. 2, Automobile Operations Operating Officer Michimasa Fujino President and Director of Honda Aircraft Company, Inc. Operating Officer Soichiro Takizawa Executive Vice President and Director of Honda Motor Europe Ltd. President and Director of Honda of the U.K. Manufacturing Ltd. Operating Officer Yuji Shiga Responsible for CIS countries, the Middle & Near East and Africa for Regional Operations Operating Officer Kohei Takeuchi General Manager of Accounting Division for Business Management Operation

There is no family relationship between any director or executive officer and any other director or executive officer.

40 Corporate Governance

42 Financial Review 58 Consolidated Balance Sheets 60 Consolidated Statements of Income 61 Consolidated Statements of Changes in Equity 63 Consolidated Statements of Cash Flows 64 Segment Information 69 Basis of Translating Financial Statements 70 Consolidated Balance Sheets Divided into Non-Financial Services Businesses and Finance Subsidiaries 71 Consolidated Statements of Cash Flows Divided into Non-Financial Services Businesses and Finance Subsidiaries 72 Financial Summary 74 Selected Quarterly Financial Data

41 Financial Review

Operating and Financial Review and administrative expenses and R&D expenses, negative foreign currency effects and the impact of the Earthquake. Excluding Net Sales and Other Operating Revenue negative foreign currency effects of ¥137.6 billion, Honda estimates Honda’s consolidated net sales and other operating revenue operating income increased ¥343.6 billion. (hereafter, “net sales”) for the fiscal year ended March 31, 2011, With respect to the discussion above of the changes, management increased ¥357.6 billion, or 4.2%, to ¥8,936.8 billion from the fiscal identified the factors and used what it believes to be a reasonable year ended March 31, 2010, due mainly to increased net sales in method to analyze the respective changes in such factors. automobile business and motorcycle business, which was partially Management analyzed changes in these factors at the levels of the offset by a decrease in net sales attributable to negative foreign Company and its material consolidated subsidiaries. “Foreign currency translation effects. Honda estimates that by applying currency effects” consist of “translation adjustments”, which come Japanese yen exchange rates of the previous fiscal year to the from the translation of the currency of foreign subsidiaries’ financial current fiscal year, net sales for the year would have increased by statements into Japanese yen, and “foreign currency adjustments”, approximately ¥743.3 billion, or 8.7%, compared to the increase as which result from foreign-currency-denominated sales. With respect reported of ¥357.6 billion, which includes negative foreign currency to “foreign currency adjustments”, management analyzed foreign translation effects. currency adjustments primarily related to the following currencies: U.S. dollar, Canadian dollar, Euro, British pound, Brazilian real and Net Sales and Other Operating Revenue Japanese yen, at the level of the Company and its material Years ended March 31 consolidated subsidiaries. Yen (billions) 12,000 Income before Income Taxes 10,000 and Equity in Income of Affiliates 8,000 Income before income taxes and equity in income of affiliates 6,000 increased ¥294.3 billion, or 87.6%, to ¥630.5 billion. Main factors of 4,000 this increase except factors relating to operating income are as

2,000 follows; Unrealized gains and losses related to derivative instruments had 0 2007 2008 2009 2010 2011 a negative impact of ¥30.4 billion. Other income (expenses) excluding unrealized gains and losses related to derivative instruments had a positive impact of ¥118.8 billion, due mainly to a gain on sales of Operating Costs and Expenses investments in affiliates related to the dissolution of a joint venture Operating costs and expenses increased ¥151.6 billion, or 1.8%, to and an increase in foreign currency transaction gains. ¥8,367.0 billion from the previous fiscal year. Cost of sales increased ¥82.1 billion, or 1.3%, to ¥6,496.8 billion from the previous fiscal Income Tax Expense year, due mainly to an increase in costs attributable to increased net Income tax expense increased ¥59.9 billion, or 40.8%, to ¥206.8 sales and the effect of raw material fluctuations, which was partially billion from the previous fiscal year. The effective tax rate decreased offset by continuing cost reduction and positive foreign currency 10.9 percentage points, to 32.8% from the previous fiscal year. The effects. Selling, general and administrative expenses increased decrease in the effective tax rate was due mainly to a decrease in a ¥45.3 billion, or 3.4%, to ¥1,382.6 billion from the previous fiscal portion of unrecognized tax benefits related to transfer pricing year, due mainly to an increase in selling expenses attributable to matters of overseas transactions between the Company and foreign increased net sales, the impact of the Earthquake, which was affiliates. partially offset by a decrease in provisions for credit losses in financial services business, and positive foreign currency effects. R&D Equity in Income of Affiliates expenses increased by ¥24.2 billion, or 5.2%, to ¥487.5 billion from Equity in income of affiliates increased ¥46.4 billion, or 49.8%, to the previous fiscal year, due mainly to improving safety and ¥139.7 billion, due mainly to an increase in income attributable to environmental technologies and enhancing of the attractiveness of increased net sales and continuing cost reduction at affiliates in the products. Japan and Asia.

Operating Income Net Income Operating income increased ¥206.0 billion, or 56.6%, to ¥569.7 Net income increased ¥280.8 billion, or 99.4%, to ¥563.4 billion billion from the previous fiscal year, due mainly to an increase in from the previous fiscal year. income attributable to increased net sales and continuing cost reduction, which was partially offset by increased selling, general

42 Net Income Attributable to Noncontrolling Interests Automobile Business Net income attributable to noncontrolling interests increased ¥15.1 Honda’s unit sales of automobiles totaled 3,512 thousand units and billion, or 106.8%, to ¥29.3 billion from the previous fiscal year. increased by 3.5% from the previous fiscal year, due mainly to an increase in unit sales in North America and Asia, which was partially Net Income Attributable to Honda Motor Co., Ltd. offset by a decrease in unit sales in Japan and Europe. Net income attributable to Honda Motor Co., Ltd. increased ¥265.6 Revenue from external customers increased ¥239.2 billion, or billion, or 99.0%, to ¥534.0 billion from the previous fiscal year. 3.6%, to ¥6,794.0 billion from the previous fiscal year, due mainly to increased unit sales, which was partially offset by the negative foreign Net Income Attributable to Honda Motor Co., Ltd. currency translation effects. Honda estimates that by applying and Net Income Attributable to Honda Motor Co., Ltd. Japanese yen exchange rates of the previous fiscal year to the current per Common Share fiscal year, net sales for the year would have increased by approximately Years ended March 31 ¥545.7 billion, or 8.3%, compared to the increase as reported of Yen (billions) (Yen) 800 400 ¥239.2 billion, which includes negative foreign currency translation effects. Revenue including intersegment sales increased ¥247.4 600 300 billion, or 3.8%, to ¥6,802.3 billion from the previous fiscal year. Operating costs and expenses increased ¥109.6 billion, or 1.7%, 400 200 to ¥6,537.7 billion from the previous fiscal year. Cost of sales increased by ¥39.2 billion, or 0.8%, to ¥5,105.7 billion, due mainly 200 100 to an increase in costs attributable to increased net sales and the

0 0 effect of raw material fluctuations, which was partially offset by 2007 2008 2009 2010 2011 continuing cost reduction and the positive foreign currency effects. Net Income Attributable to Honda Motor Co., Ltd. (left) Selling, general and administrative expenses increased by ¥49.9 Net Income Attributable to Honda Motor Co., Ltd. per Common Share (right) billion, or 5.0%, to ¥1,042.1 billion. R&D expenses increased by ¥20.4 billion, or 5.5%, to ¥389.8 billion, due mainly to improving safety and environmental technologies and enhancing of the Business Segments attractiveness of the products. Operating income increased ¥137.7 billion, or 108.7%, to ¥264.5 Motorcycle Business billion from the previous fiscal year, due mainly to an increase in Honda’s unit sales of motorcycles and all-terrain vehicles (ATVs) income attributable to increased net sales and continuing cost totaled 11,445 thousand units and increased by 18.7% from the reduction, which was partially offset by increased selling, general previous fiscal year, due mainly to an increase in unit sales in Asia and administrative expenses and R&D expenses, negative foreign and Other Regions, including South America. currency effects and the impact of the Earthquake. Revenue from external customers increased ¥147.9 billion, or 13.0%, to ¥1,288.1 billion from the previous fiscal year, due mainly Power Product and Other Businesses to increased unit sales and revenue related to licensing agreements. Honda’s unit sales of power products totaled 5,509 thousand units Honda estimates that by applying Japanese yen exchange rates of and increased by 16.1% from the previous fiscal year, due to the previous fiscal year to the current fiscal year, net sales for the increased unit sales in all the regions. year would have increased by approximately ¥171.3 billion, or Revenue from external customers increased ¥14.9 billion, or 15.0%, compared to the increase as reported of ¥147.9 billion, 5.4%, to ¥292.6 billion from the previous fiscal year, due mainly to which includes negative foreign currency translation effects. the increased unit sales of power products, which was partially Operating costs and expenses increased ¥68.1 billion, or 6.3%, offset by negative foreign currency translation effects. Honda to ¥1,149.6 billion from the previous fiscal year. Cost of sales estimates that by applying Japanese yen exchange rates of the increased by ¥61.2 billion, or 7.4%, to ¥887.9 billion, due mainly to previous fiscal year to the current fiscal year, net sales for the year an increase in costs attributable to increased net sales, which was would have increased by approximately ¥27.5 billion, or 9.9%, partially offset by the positive foreign currency effects. Selling, compared to the increase as reported of ¥14.9 billion, which includes general and administrative expenses increased by ¥3.8 billion, or negative foreign currency translation effects. Revenue including 2.0%, to ¥193.8 billion. R&D expenses increased by ¥3.0 billion, or intersegment sales increased ¥13.6 billion, or 4.5%, to ¥318.2 billion 4.7%, to ¥67.8 billion. from the previous fiscal year. Operating income increased ¥79.7 billion, or 135.6%, to ¥138.5 Operating costs and expenses increased ¥2.4 billion, or 0.8%, to billion from the previous fiscal year, due mainly to an increase in ¥323.8 billion from the previous fiscal year. Cost of sales decreased income attributable to increased net sales and income related to by ¥0.7 billion, or 0.3%, to ¥238.6 billion, due mainly to continuing licensing agreements. cost reduction, which was partially offset by an increase in costs

43 attributable to increased net sales. Selling, general and administrative accounted for as operating leases. Generally, direct financing lease expenses increased by ¥2.4 billion, or 4.6%, to ¥55.2 billion. R&D revenues and interest income consist of the recognition of finance expenses increased by ¥0.7 billion, or 2.5%, to ¥29.9 billion. lease revenue at inception of the lease arrangement and subsequent The operating loss including that of other business was ¥5.5 recognition of the interest income component of total lease payments billion, an improvement of ¥11.1 billion from the previous fiscal year, using the effective interest method. In comparison, operating lease due mainly to an increase in income attributable to increased net revenues include the recognition of the gross lease payment sales of power products, which was partially offset by increased amounts on a straight-line basis over the term of the lease selling, general and administrative expenses and negative foreign arrangement, and operating lease vehicles are depreciated to their currency effects. estimated residual value on a straight-line basis over the term of the lease. It is not anticipated that the differences in accounting for Financial Services Business operating leases and direct financing leases will have a material net To support the sale of its products, Honda provides retail lending impact on Honda’s results of operations overall, however, operating and leasing to customers and wholesale financing to dealers through lease revenues and associated depreciation of leased assets do our finance subsidiaries in Japan, the United States, Canada, the result in differing presentation and timing compared to those of United Kingdom, Germany, Brazil, Thailand and other countries. direct financing leases. The total amount of finance subsidiaries–receivables and property Honda consolidated former qualifying special-purpose entities on operating leases of finance subsidiaries increased by ¥67.9 billion, (QSPEs) that were not consolidated as of March 31, 2010. As a or 1.4%, to ¥4,837.6 billion from the previous fiscal year, due mainly result, previously derecognized finance subsidiaries–receivables to an increase of finance subsidiaries–receivables attributable to the held by former QSPEs increased in the Company’s consolidated adoption of new accounting standards, which was partially offset by balance sheet as of April 1, 2010. In addition, Honda does not negative foreign currency translation effects. Honda estimates that by recognize certain gains or losses related to securitization transactions, applying Japanese yen exchange rates of the previous fiscal year to such as gains or losses attributable to the change in the fair value of the current fiscal year, the total amount of finance subsidiaries– retained interests since the year ended March 31, 2011. receivables and property on operating leases of finance subsidiaries as of the end of the year would have increased by approximately ¥595.9 billion, or 12.5%, compared to the increase as reported of Geographical Information ¥67.9 billion, which includes negative foreign currency translation effects. Japan Revenue from external customers in a financial services business In Japan, revenue from domestic and export sales increased ¥305.4 decreased ¥44.4 billion, or 7.3%, to ¥561.8 billion from the previous billion, or 9.2%, to ¥3,611.2 billion from the previous fiscal year, due fiscal year. Honda estimates that by applying Japanese yen exchange mainly to an increase in revenue in automobile business and revenue rates of the previous fiscal year to the current fiscal year, revenue for related to licensing agreements. Operating income was ¥66.1 billion, the year would have decreased by approximately ¥1.2 billion, or an increase of ¥95.2 billion of operating income from the previous 0.2%, compared to the decrease as reported of ¥44.4 billion, which fiscal year, due mainly to an increase in income attributable to includes negative foreign currency translation effects. Revenue increased net sales and model mix, continuing cost reductions and including intersegment sales decreased ¥45.3 billion, or 7.3%, to income related to licensing agreements, which was partially offset ¥573.4 billion from the previous fiscal year. by increased selling, general and administrative expenses and R&D Operating costs and expenses decreased ¥36.7 billion, or 8.7%, expenses, negative foreign currency effects and the impact of the to ¥387.1 billion from the previous fiscal year. Cost of sales decreased Earthquake. ¥11.6 billion, or 3.6%, to ¥309.8 billion from the previous fiscal year, due mainly to a decrease in costs related to lease residual values. North America Selling, general and administrative expenses decreased ¥25.0 In North America, which mainly consists of the United States, billion, or 24.5%, to ¥77.3 billion from the previous fiscal year, due revenue increased ¥239.6 billion, or 6.1%, to ¥4,147.8 billion from mainly to a decrease in provisions for credit losses. the previous fiscal year, due mainly to an increase in revenue in Operating income decreased ¥8.6 billion, or 4.4%, to ¥186.2 automobile business, which was partially offset by negative foreign billion from the previous fiscal year, due mainly to negative foreign currency translation effects. Operating income increased ¥64.5 currency effects, which was partially offset by a decrease in billion, or 27.3%, to ¥300.9 billion from the previous fiscal year, due provisions for credit losses and losses on lease residual values. mainly to an increase in income attributable to increased net sales Our finance subsidiaries in North America have historically and model mix, and a decrease in fixed costs per unit as a result of accounted for all leases as direct financing leases. However, starting increased production, which was partially offset by increased selling, in the fiscal year ended March 31, 2007, some of the leases which general and administrative expenses and negative foreign currency do not qualify for direct financing leases accounting treatment are effects.

44 Europe Motorcycle Business In Europe, revenue decreased ¥126.1 billion, or 15.3%, to ¥699.2 In the Motorcycle Business, Honda is committed to developing billion from the previous fiscal year, due mainly to a decrease in products with value-added features that meet the needs of revenue in the automobile business and negative foreign currency customers around the world and to implementing the timely local translation effects. The operating loss was ¥10.2 billion, an development of products suited to specific regions at its overseas improvement of ¥0.6 billion from the previous fiscal year, due mainly locations. Along with these activities, we are focusing on developing to decreased selling, general and administrative expenses, which technologies that address safety and environmental issues. was partially offset by a decrease in income attributable to decreased Major developments in fiscal 2011 included the launching of net sales and model mix, negative foreign currency effects. motorcycles in Japan, Thailand, India, Indonesia and Malaysia powered by a newly developed double overhead camshaft (DOHC) Asia engine, which is outfitted with the world’s first roller rocker arm and In Asia, revenue increased ¥322.5 billion, or 21.2%, to ¥1,841.1 other innovations that give non-slip, powerful performance from low billion from the previous fiscal year, due mainly to an increase in rotation to high rotation speeds, combined with good fuel economy. revenue in automobile and motorcycle businesses, which was We also introduced a globally strategic motorcycle, the CBR250R, partially offset by negative foreign currency translation effects. which is a light-weight super sports bike that incorporates a newly Operating income increased ¥37.6 billion, or 33.3%, to ¥150.6 designed frame with a truss structure that offers ease of handling billion from the previous fiscal year, due mainly to an increase in and maneuvering stability. income attributable to increased net sales and model mix, which In Japan, we began to offer the EV-neo with lease financing. The was partially offset by increased selling, general and administrative EV-neo is an electric-powered bike that responds to the needs of expenses and negative foreign currency effects. today’s new era by contributing to realizing a low-carbon society as it provides transportation for people and cargo. Equipped with a Other Regions motor featuring good torque performance even at low speeds, the In Other Regions, revenue increased ¥85.5 billion, or 9.5%, to EV-neo offers strong starting performance, even when carrying ¥982.0 billion from the previous fiscal year, due mainly to an increase cargo, and has a specially developed battery that can be fully in revenue in motorcycle and automobile businesses and positive recharged in about 30 minutes (at an ambient temperature of 25°C) foreign currency translation effects. Operating income increased as well as greater ease of recharging. In addition, in Japan, we ¥23.7 billion, or 51.8%, to ¥69.5 billion from the previous fiscal year, introduced the Giorno, a motor scooter with a “round and cute” due mainly to an increase in income attributable to increased net design to appeal mainly to the fashion-conscious younger generation sales and model mix, positive foreign currency effects, which was but also to suit the tastes of a broad range of other customers. Also, partially offset by increased selling, general and administrative in Thailand, we introduced the WAVE 110i, a new model Cub-style expenses. bike which is the first Cub style equipped with the PGM-FI electronically controlled fuel injection system that is more compact than those equipped in previous models. WAVE 110i has a more- Research and Development secure, refined appearance as well as considerably more cargo space, which can store a half helmet. In Indonesia, we relaunched Honda and its consolidated subsidiaries use the most-advanced the MegaPro, a sports model with wide, practical applicability, after technologies to conduct R&D activities with the goal of creating a full model change. The new MegaPro offers a new design and distinctive products that are internationally competitive. To attain this equipment that give it a more-luxurious and powerful appearance. goal, the Group’s main R&D divisions operate independently as Also, it is equipped with a new type engine that aims for improved subsidiaries, allowing technicians to pursue their tasks with significant fuel economy through the application of friction reducing and cooling freedom. Product-related R&D is spearheaded by Honda R&D Co., technologies. Ltd. in Japan; Honda R&D Americas, Inc. in the United States; and R&D expenses in this segment in fiscal 2011 were ¥67.8 billion. Honda R&D Europe (U.K.) Ltd. in the United Kingdom. R&D on production technologies centers around Honda Engineering Co., Automobile Business Ltd. in Japan and Honda Engineering North America, Inc. in the In the Automobile Business segment, we are working to develop United States. All of these entities work in close association with our innovative technologies and create products with new value added other entities and businesses in their respective regions. to respond to customer needs. We are also actively developing Total consolidated R&D expenses for the fiscal year ended March technologies that provide advanced safety performance and address 31, 2011 amounted to ¥487.5 billion. environment issues. Among major achievements in Japan during fiscal 2011, we launched the Freed Spike, which features ease of driving and a spacious interior in a compact body. In addition, we made minor

45 model changes on the LEGEND to upgrade its drivetrain and Europe) by boosting their continuous operating time by equipping improve fuel performance, and it became the first Honda automobile them with fuel-efficient, eco-friendly engines and enhancing their to be outfitted with a newly developed six-speed automatic power-generating capacity. We also launched our UMK 425 and transmission. The LEGEND is also now the first car in the world UMK 435 series of four-stroke lawn mowers in Europe, which feature equipped with a noise suppressor device, which is installed on the a large-sized deflector (antiscattering cover) with a redesigned shape 18-inch noise limiting aluminum wheels and reduces the noise that substantially reduces jamming due to ingested grass and other emitted from inside the tire. In addition, in Japan and Europe, we vegetable matter. In Japan, we announced new thin-film solar cells, launched the Fit Hybrid (sold in Europe as the Jazz Hybrid), a new which are more compact than models already on the market and type in the Fit series, which has its hybrid battery installed underneath can be laid out and installed efficiently on roofs of widely varying the baggage compartment and thus retains the interior comfort and shapes. In addition, the tested prototypes of these solar cells attain seat arrangement of the previous Fit models (sold in Europe as the a module conversion ratio of 13.0%, which is the highest in the Jazz models) while adding top-notch fuel economy and driving world among similar thin-film solar cells currently on the market. performance. In Asia outside Japan, we launched the new, low- Looking to launch these units, we are working to further increase priced BRIO in Thailand, which succeeds in offering a compact body their module conversion ratio. with a spacious interior. The BRIO also delivers good environmental In other businesses in this segment, Honda Aircraft Company, performance, as evidenced by its certification as an eco-car by Thai Inc., our U.S. subsidiary in the jet aircraft business, reported that the government standards because of its fuel economy and satisfaction mass production model of HondaJet, a light business jet that has of the Euro 4 gas emission standards. been designed for obtaining approval from the U.S. Federal Aviation Other R&D-related news included the announcement of the Fit EV Administration (FAA), successfully completed its maiden flight. Concept. This new electric vehicle (EV) concept model offers driving R&D expenses in this segment in fiscal 2011 were ¥29.9 billion. mode options and delivers a lively response with a strong sense of acceleration, similar to that of a 2.0 liter class engine, by drawing on Fundamental Research the features of having the motor on the same axle as the gearbox. During fiscal 2011, Honda continued its research activities to develop At the same time, it also offers a more-efficient ride and conserves technologies in a diverse range of fields that will support the products electric power. We also announced a new hybrid concept car that of the future. harnesses a specially developed 2.0 liter i-VTEC engine, which Please note that expenses incurred in fundamental research are delivers high efficiency and high fuel performance, together with two allocated among Honda’s business segments. high-power electric motors. This hybrid has three driving modes: electric power, hybrid operation and gasoline engine and, as a Patents and Licenses “plug-in hybrid,” can be recharged by plugging into a household At March 31, 2011, Honda owned more than 16,400 patents in electric outlet. In addition, to verify results and support the realization Japan and more than 24,600 patents abroad. Honda also had of a low-carbon mobility society in the years to come, we have applications pending for more than 14,800 patents in Japan and for begun testing in real driving situations of the performance of EVs more than 17,500 patents abroad. While Honda considers that, in and plug-in hybrids in Japan and the United States. the aggregate, Honda’s patents are important, it does not consider R&D expenses in this segment in fiscal 2011 were ¥389.8 billion. any one of such patents, or any related group of them, to be of such importance that the expiration or termination thereof would materially Power Product and Other Businesses affect Honda’s business. In the Power Product and Other Businesses, we are working to develop products that contribute to customers’ lifestyles, while R&D Expenses and R&D Expenses strengthening our lineup of offerings that address environmental as a Percentage of Net Sales Years ended March 31 issues. Yen (billions) (%) Principal developments in this segment included the re-launching 600 6 of the BF115 outboard motor with full model changes in markets around the world. This upgraded model incorporates the boosted 400 4 low-speed torque (BLAST) system, which is an air/fuel ratio and injection-timing technology and lean-burn control mechanism, which makes possible strong torque performance and acceleration over a 200 2 wide range of rotation speeds. Also, through lean-burn control, fuel

economy has been improved by 20% over previous types. In 0 0 addition, in North America, Europe and Asia, we implemented a full 2007 2008 2009 2010 2011 model change in our cylindrical electric power generators, EG4000, R&D Expenses (left) R&D Expenses as a Percentage of Net Sales (right) EG5000 and EG6500 (sold as EG3600, EG4500 and EG5500 in

46 Capital Expenditures Total capital expenditures for the year amounted to ¥1,109.7 billion, up ¥236.0 billion from the previous year. Also, total capital Capital expenditures in fiscal 2011 were applied to the introduction expenditures, excluding property on operating leases, for the year of new models, as well as the improvement, streamlining and amounted to ¥311.3 billion, down ¥18.3 billion from the previous modernization of production facilities, and improvement of sales and year. Spending by business segment is shown below. R&D facilities.

Fiscal years ended March 31, 2010 2011 Increase (Decrease) Yen (millions) Motorcycle Business ¥ 38,332 ¥ 37,084 ¥ (1,248) Automobile Business 267,257 260,149 (7,108) Financial Services Business 544,425 798,584 254,159 Financial Services Business (Excluding Property on Operating Leases) 398 164 (234) Power Product and Other Businesses 23,748 13,963 (9,785) Total ¥873,762 ¥1,109,780 ¥236,018 Total (Excluding Property on Operating Leases) ¥329,735 ¥ 311,360 ¥ (18,375)

Note: Intangible assets are not included in the table above.

In the motorcycle business, we made capital expenditures of The estimated amounts of capital expenditures for the fiscal year ¥37,084 million in the fiscal year ended March 31, 2011. Funds were ending March 31, 2012 are shown below. allocated to the introduction of new models, as well as the Fiscal year ending March 31, 2012 improvement, streamlining and modernization of production facilities, Yen (millions) and improvement of sales and R&D facilities. Motorcycle Business ¥ 65,300 In the automobile business, we made capital expenditures of Automobile Business 350,000 ¥260,149 million in the fiscal year ended March 31, 2011. Funds Financial Services Business 300 were allocated to the introduction of new models, as well as the Power Product and Other Businesses 14,400 improvement, streamlining and modernization of production facilities, Total ¥430,000 and improvement of sales and R&D facilities. A new auto plant of Note: The estimated amount of capital expenditures for the Financial Services Business in Honda Motor De Argentina S.A., which is one of the Company’s the above table does not include property on operating leases. Intangible assets are not included in the table above. consolidated subsidiaries, completed construction of its facilities in March 2011. In the financial services business segment, capital expenditures Capital Expenditures and Depreciation Years ended March 31 excluding property on operating leases amounted to ¥164 million in Yen (billions) the fiscal year ended March 31, 2011, while capital expenditures for 700 property on operating leases were ¥798,420 million. Capital 600 expenditures in power products and other businesses in the fiscal 500 year ended March 31, 2011, totaling ¥13,963 million, were deployed 400 to upgrade, streamline and modernize manufacturing facilities for 300 power products, and to improve R&D facilities for power products. 200 100 Plans after Fiscal 2011 0 We set out our original capital expenditure plans for the period from 2007 2008 2009 2010 2011 the fiscal year ended March 31, 2011 during the preceding fiscal Capital Expenditures Depreciation year. We have subsequently modified these plans as follows: The new auto plant in Yorii-machi Osato-gun, Saitama, Japan plans to start operation in 2013. Yachiyo Industry Co., Ltd., which is one of the Company’s consolidated subsidiaries, had stopped building a new auto plant in Yokkaichi City, Mie, Japan. Management mainly considers economic trends of each region, demand trends, the situation of competitors and our business strategy, such as introduction plans of new models in determining the future of projects. 47 Liquidity and Capital Resources Net cash used in financing activities amounted to ¥100.4 billion of cash outflows. Cash outflows from financing activities decreased by Overview of Capital Requirements, Sources and Uses ¥458.8 billion, compared with the previous fiscal year, due mainly to The policy of Honda is to support its business activities by maintaining an increase in debts which decreased in the previous fiscal year, sufficient capital resources, a sufficient level of liquidity and a sound which was partially offset by purchases of treasury stock and an balance sheet. increase in dividends paid. Honda’s main business is the manufacturing and sale of motorcycles, automobiles and power products. To support this Liquidity business, it also provides retail financing and automobile leasing The ¥1,279.0 billion in cash and cash equivalents at the end of the services for customers, as well as wholesale financing services for fiscal year 2011 corresponds to approximately 1.7 months of net dealers. sales, and Honda believes it has sufficient liquidity for its business Honda requires operating capital mainly to purchase parts and operations. raw materials required for production, as well as to maintain inventory At the same time, Honda is aware of the possibility that various of finished products and cover receivables from dealers and for factors, such as recession-induced market contraction and financial providing financial services. Honda also requires funds for capital and foreign exchange market volatility, may adversely affect liquidity. expenditures, mainly to introduce new models, upgrade, rationalize For this reason, finance subsidiaries that carry total short-term and renew production facilities, as well as to expand and reinforce borrowings of ¥1,369.4 billion have committed lines of credit sales and R&D facilities. equivalent to ¥788.3 billion that serve as alternative liquidity for the Honda meets its operating capital requirements primarily through commercial paper issued regularly to replace debt. Honda believes it cash generated by operations, bank loans and the issuance of currently has sufficient credit limits, extended by prominent corporate bonds. The year-end balance of liabilities associated with international banks, as of the date of the filing of Honda’s Form 20-F the Company and its subsidiaries’ funding for non-financial services (as of June 23, 2011). businesses was ¥399.8 billion as of March 31, 2011. In addition, the Honda’s short- and long-term debt securities are rated by credit Company’s finance subsidiaries fund financial programs for rating agencies, such as Moody’s Investors Service, Inc., Standard customers and dealers primarily from medium-term notes, & Poor’s Rating Services, and Rating and Investment Information, commercial paper, corporate bonds, bank loans, securitization of Inc. The following table shows the ratings of Honda’s unsecured finance receivables and intercompany loans. The year-end balance debt securities by Moody’s, Standard & Poor’s and Rating and of liabilities associated with these finance subsidiaries’ funding for Investment Information as of March 31, 2011.

the Financial Services business was ¥4,207.9 billion as of March 31, Credit Ratings for 2011. Short-term Long-term unsecured unsecured debt securities debt securities Cash Flows Moody’s Investors Service P-1 A1 Consolidated cash and cash equivalents for the year ended March Standard & Poor’s Rating Services A-1 A+ 31, 2011 increased by ¥159.1 billion from March 31, 2010, to Rating and Investment Information a-1+ AA ¥1,279.0 billion. The reasons for the increases or decreases for each The above ratings are based on information provided by Honda cash flow activity are as follows: and other information deemed credible by the rating agencies. They Net cash provided by operating activities amounted to ¥1,070.8 are also based on the agencies’ assessment of credit risk associated billion of cash inflows. Cash inflows from operating activities with designated securities issued by Honda. Each rating agency decreased by ¥473.3 billion compared with the previous fiscal year, may use different standards for calculating Honda’s credit rating, due mainly to increased payments for parts and raw materials and also makes its own assessment. Ratings can be revised or primarily due to an increase in automobile production, which was nullified by agencies at any time. These ratings are not meantto partially offset by an increase in cash received from customers, serve as a recommendation for trading in or holding Honda’s primarily due to increased unit sales in the automobile business. unsecured debt securities. Net cash used in investing activities amounted to ¥731.3 billion of cash outflows. Cash outflows from investing activities increased by ¥135.6 billion compared with the previous fiscal year, due mainly to Off-Balance Sheet Arrangements an increase in acquisitions of finance subsidiaries–receivables and an increase in purchase of operating lease assets, which was Securitization partially offset by an increase in collections of finance subsidiaries– For the purpose of liquidity and funding, our finance subsidiaries receivables and an increase in proceeds from sales of operating periodically securitize finance receivables. In these securitizations, lease assets. our finance subsidiaries transfer a portfolio of finance receivables to

48 a special-purpose entity, which is established for the limited purpose Standards Update (ASU) 2009-16 “Accounting for Transfers of of buying and re-transfer finance receivables. Our finance subsidiaries Financial Assets”, and ASU 2009-17 “Improvements to Financial remain as a servicer of the finance receivables and are paid a Reporting by Enterprises Involved with Variable Interest Entities”, servicing fee for our services. The special-purpose entity transfers effective April 1, 2010. Upon the adoption of these standards, we the receivables to a trust which is newly structured for each consolidated all trusts as of April 1, 2010. As a result, we have no securitization or bank conduit, which issues asset-backed securities off-balance sheet arrangements in the fiscal year ended March 31, or commercial paper, respectively, to investors. Our finance 2011. Information about ASU 2009-16 and 2009-17 is described in subsidiaries retain certain subordinated interests in the transferred note (1)(c) and information about variable interest entities and receivables in the form of subordinated certificates, servicing assets securitizations is described in note (4) to the accompanying and residual interests in certain cash reserves provided as credit consolidated financial statements. enhancements for investors. Our finance subsidiaries apply significant assumptions regarding prepayments, credit losses and Guarantee average interest rates in estimating expected cash flows from the At March 31, 2011, we guaranteed ¥30.3 billion of employee bank trust or bank conduit, which affect the recoverability of our retained loans for their housing costs. If an employee defaults on his/her loan interests in the transferred finance receivables. We periodically payments, we are required to perform under the guarantee. The evaluate these assumptions and adjust them, if appropriate, to undiscounted maximum amount of our obligation to make future reflect the performance of the finance receivables. payments in the event of defaults is ¥30.3 billion. As of March 31, We have not consolidated certain trusts since these trusts meet 2011, no amount was accrued for any estimated losses under the the definitions of a former qualifying special-purpose entity before obligations, as it was probable that the employees would be able to the fiscal year ended March 31, 2011. We adopted Accounting make all scheduled payments.

Tabular Disclosure of Contractual Obligations

The following table shows our contractual obligations at March 31, 2011:

Yen (millions)

Payments due by period Total Less than 1 year 1-3 years 3-5 years After 5 years Long-term debt ¥3,005,695 ¥ 962,455 ¥1,369,943 ¥555,551 ¥117,746 Operating leases 102,783 19,100 24,370 15,115 44,198 Purchase commitments*1 28,466 28,466 — — — Interest payments*2 218,226 92,907 97,696 25,112 2,511 Contributions to defined benefit pension plans*3 92,815 92,815 — — — Total ¥3,447,985 ¥1,195,743 ¥1,492,009 ¥595,778 ¥164,445

*1 Honda had commitments for purchases of property, plant and equipment at March 31, 2011. *2 To estimate the schedule of interest payments, the Company utilized the balances and average interest rates of borrowings and debts and derivative instruments as of March 31, 2011. *3 Since contributions beyond the next fiscal year are not currently determinable, contributions to defined benefit pension plans reflect only contributions expected for the next fiscal year.

If our estimates of unrecognized tax benefits and potential tax Trend Information benefits are not representative of actual outcomes, our consolidated financial statements could be materially affected in the period of The Great East Japan Earthquake settlement or when the statutes of limitations expire, as we treat The Great East Japan Earthquake occurred on March 11, 2011 and these events as discrete items in the period of resolution. Since it is the nuclear power plant disaster has caused and will continue to difficult to estimate actual payment in the future related toour cause significant damage to the Japanese economy. Honda’s uncertain tax positions, unrecognized tax benefits totaled ¥46,265 business sites, such as Honda’s R&D subsidiaries located in Tochigi million are not represented in the table above. Prefecture, were heavily damaged. As a result, certain property, At March 31, 2011, we had no material capital lease obligations plant and equipment and inventories were damaged. On March 11, or long-term liabilities reflected on our balance sheet under U.S. 2011, Honda temporarily suspended production and R&D activities GAAP other than those set forth in the table above. at its sites located in Japan due to the effects of this disaster, which includes a shortage of parts supplies and damage on property, plant and equipment.

49 As a result, Honda recognized ¥45.7 billion of costs and expenses, Application of Critical Accounting Policies of which ¥17.4 billion is included in cost of sales and ¥28.2 billion is included in selling, general and administrative expenses in the Critical accounting policies are those which require us to apply the accompanying consolidated statement of income for the year ended most difficult, subjective or complex judgments, often requiring us to March 31, 2011. These costs and expenses mainly consist of make estimates about the effect of matters that are inherently unallocated fixed production overhead of ¥15.0 billion caused by uncertain and which may change in subsequent periods, or for temporary suspension of production which is included in cost of which the use of different estimates that could have reasonably been sales, and loss on damaged property, plant and equipment of ¥15.6 used in the current period would have had a material impact on the billion which is included in selling, general and administrative presentation of our financial condition and results of operations. A expenses. Fixed costs of ¥7.7 billion pertaining to certain R&D sustained loss of consumer confidence which may be caused by activities incurred during the period when such activities were changes in consumer preferences and rising fuel prices, effects of suspended are not included in research and development, but the Great East Japan Earthquake or other factors have combined to selling, general and administrative expenses. Substantially all of increase the uncertainty inherent in such estimates and these costs and expenses resulting from the disaster are included in assumptions. operating expenses of the automobile business segment. Honda will The following is not intended to be a comprehensive list of all our recognize the costs of future restoration activities as they are accounting policies. incurred. The effect of this disaster on Honda’s sales activities for the We have identified the following critical accounting policies with year ended March 31, 2011 was immaterial. respect to our financial presentation. By April 11, 2011, Honda had resumed production activities at all of its production sites; however, production at Honda’s automobile (Product Warranty) plants both in and outside of Japan has been temporarily reduced. We warrant our products for specific periods of time. As of the date of the filing of Honda’s Form 20-F (as of June 23, Product warranties vary depending upon the nature of the 2011), recovery from shortage of certain parts supplies is in sight. product, the geographic location of their sales and other factors. Honda expects its domestic production to have been nearly We recognize costs for general warranties on products we sell normalized by late June and its overseas production will be nearly and product recalls. We provide for estimated warranty costs at the normalized in the August/September timeframe except certain types time products are sold to customers or the time new warranty or models of automobile products which will have continuous programs are initiated. Estimated warranty costs are provided based restricted parts supplies. on historical warranty claim experience with consideration given to Concerning the impact on profit on the next year’s consolidated the expected level of future warranty costs, including current sales financial statements, Honda estimates factors which weigh on profit trends, the expected number of units to be affected and the mainly in the automobile business segment such as decreased net estimated average repair cost per unit for warranty claims. Our sales of automobile business attributable to a shortage of inventories, products contain certain parts manufactured by third-party suppliers. unallocated fixed production overhead as a result of temporary Since suppliers typically warrant these parts, the expected reduced production, and the costs of restoration activities can occur. receivables from warranties of these suppliers are deducted from On the other hand, net sales of automobile business is expected to our estimates of accrued warranty obligations. recover after normalization of production. Honda believes the impact We believe our accrued warranty liability is a “critical accounting of the Earthquake will not be severe on Honda’s consolidated estimate” because changes in the calculation can materially affect financial position or results of operations and will not continue over a net income attributable to Honda Motor Co., Ltd., and require us to long period. estimate the frequency and amounts of future claims, which are Honda’s R&D subsidiaries located in Tochigi Prefecture set up inherently uncertain. satellite offices within the plants and other offices as it would take Our policy is to continuously monitor warranty cost accruals to some time to restore its buildings and facilities, and resumed R&D determine the adequacy of the accrual. Therefore, warranty expense operations on March 28. As a result, Honda has been able to accruals are maintained at an amount we deem adequate to cover minimize the impact of the Earthquake on R&D activities. The satellite estimated warranty expenses. offices were dissolved in early June. Actual claims incurred in the future may differ from the original estimates, which may result in material revisions to the warranty expense accruals.

50 The changes in provisions for those product warranties and net sales and other operating revenue for each of the years in the three-year period ended March 31, 2011 are as follows:

Yen (millions) Fiscal years ended March 31 2009 2010 2011 Provisions for product warranties Balance at beginning of year ¥ 293,760 ¥ 233,979 ¥ 226,038 Warranty claims paid during the period (123,509) (86,886) (82,080) Liabilities accrued for warranties issued during the period 79,576 79,520 84,920 Changes in liabilities for pre-existing warranties during the period 2,233 (3,571) (3,550) Foreign currency translation (18,081) 2,996 (11,385) Balance at end of year 233,979 226,038 213,943 Net sales and other operating revenue ¥10,011,241 ¥8,579,174 ¥8,936,867

(Credit Losses) finance receivables through various stages of delinquency and Our finance subsidiaries provide retail lending and leasing to ultimately to charge-offs. Roll rates are projected based on historical customers and wholesale financing to dealers primarily to support results while also taking into consideration trends and changing sales of our products. Honda classifies retail and direct financing economic conditions. Similar to our portfolio of consumer finance lease receivables derived from those services as finance receivables, our portfolio of receivables on past due operating lease subsidiaries–receivables. Operating leases are classified as property rental payments is collectively evaluated for the allowance for credit on operating leases. Certain finance receivables related to sales of losses. Property on operating leases are also collectively evaluated inventory are included in trade accounts and notes receivable and for impairment losses to be realized upon early disposition. other assets in the consolidated balance sheets. Receivables on Wholesale receivables are considered to be impaired and past due operating lease rental payments are included in other recognized in the allowance for credit losses when it is probable that current assets in the consolidated balance sheets. it will be unable to collect all amounts due according to the original The majority of the credit risk is with consumer financing and to a terms of the contract. Our finance subsidiaries recognize estimated lesser extent with dealer financing. Credit risk is affected by general losses on them in allowance for credit losses. Credit risk on wholesale economic conditions such as a rise in unemployment rates or receivables is affected primarily by the financial strength of the declines in used vehicle prices. Our finance subsidiaries estimate dealers within the portfolio. Wholesale receivables are evaluated for losses incurred on retail and direct financing lease receivables impairment on an individual dealer basis. Ongoing evaluations of (consumer finance receivables) and recognize them in the allowance dealerships are performed to determine whether there is evidence of for credit losses. Estimated losses on past due operating lease impairment. Factors can include payment performance, overall rental payments are also recognized in the allowance for credit dealership financial performance or known difficulties experienced losses. In the case of property on operating leases, estimated losses by the dealership. due to customer defaults are not recognized in the allowance for We believe our allowance for credit losses and impairment losses credit losses because a loss is realized on the disposition of the on operating leases is a “critical accounting estimate” because it property. Therefore, we present these losses as impairment losses requires significant judgment about inherently uncertain items. We on property on operating leases. Consumer finance receivables regularly review the adequacy of the allowance for credit losses and consist of a large number of smaller-balance homogenous loans impairment losses on operating leases. The estimates are based on and leases. Our finance subsidiaries segment these receivables into information available as of the closing date of each fiscal year. groups with common characteristics, and estimate collectively the However, actual losses may differ from the original estimates as a allowance for credit losses on consumer finance receivables by the result of actual results varying from those assumed in our group. Our finance subsidiaries take into consideration various estimates. methodologies when estimating the allowance including vintage loss As an example of the sensitivity of the allowance calculation, the rate analysis and delinquency roll rate analysis. When performing the following scenario demonstrates the impact that a deviation in one vintage loss rate analysis, consumer finance receivables are of the primary factors estimated as a part of our allowance calculation segregated between retail and direct financing leases, and further would have on the provision and allowance for credit losses. If we segmented into groups with common risk characteristics including had experienced a 10% increase in net credit losses during fiscal collateral type, credit grades and original terms. Loss rates are 2011, the provision for fiscal 2011 and the allowance balance at the projected for these pools based on historical rates and adjusted for end of fiscal 2011 would have increased by approximately ¥4.6 considerations of emerging trends and changing economic billion and ¥2.8 billion, respectively. Note that this sensitivity analysis conditions. The roll rate analysis is used primarily by our finance may be asymmetric, and is specific to the base conditions in fiscal subsidiaries in North America. This analysis tracks the migration of 2011.

51 Additional Narrative of the Change in Credit Loss The following tables summarize our allowance for credit losses on finance receivables:

Yen (billions)

For the year ended March 31, 2009 Retail Direct financing lease Wholesale Total Provisions for credit losses Balance at beginning of year ¥ 31.4 ¥ 2.5 ¥ 0.7 ¥ 34.8 Provision 49.1 3.2 1.9 54.4 Charge-offs (57.3) (6.0) (0.5) (63.9) Recoveries 14.7 2.1 0.0 16.9 Change due to securitization activity (1.4) — — (1.4) Adjustments from foreign currency translation (2.2) (0.1) (0.2) (2.7) Balance at end of year ¥ 34.3 ¥ 1.8 ¥ 1.8 ¥ 38.0 Ending receivable balance ¥3,138.8 ¥699.3 ¥377.6 ¥4,215.7 Average receivable balance, net ¥3,431.6 ¥878.3 ¥383.4 ¥4,693.4 Net charge-offs as a % of average receivable balance 1.24% 0.44% 0.15% 1.00% Allowance as a % of ending receivable balance 1.09% 0.27% 0.50% 0.90%

Yen (billions)

For the year ended March 31, 2010 Retail Direct financing lease Wholesale Total Provisions for credit losses Balance at beginning of year ¥ 34.3 ¥ 1.8 ¥ 1.8 ¥ 38.0 Provision 30.0 1.9 0.3 32.3 Charge-offs (43.7) (3.2) (0.6) (47.6) Recoveries 13.9 1.1 0.0 15.1 Change due to securitization activity — — — — Adjustments from foreign currency translation (0.6) 0.1 (0.0) (0.5) Balance at end of year ¥ 33.9 ¥ 1.7 ¥ 1.6 ¥ 37.3 Ending receivable balance ¥3,246.4 ¥449.4 ¥331.7 ¥4,027.6 Average receivable balance, net ¥3,180.0 ¥497.8 ¥325.5 ¥4,004.5 Net charge-offs as a % of average receivable balance 0.94% 0.42% 0.18% 0.81% Allowance as a % of ending receivable balance 1.05% 0.40% 0.49% 0.93%

Yen (billions)

For the year ended March 31, 2011 Retail Direct financing lease Wholesale Total Provisions for credit losses Balance at beginning of year ¥ 33.9 ¥ 1.7 ¥ 1.6 ¥ 37.3 Adjustment resulting from the adoption of new accounting standards or variable interest entities 0.8 — — 0.8 Adjusted balance at beginning of year 34.8 1.7 1.6 38.2 Provision 10.3 0.7 0.3 11.3 Charge-offs (27.6) (1.5) (0.5) (29.7) Recoveries 11.1 0.5 0.0 11.7 Change due to securitization activity — — — — Adjustments from foreign currency translation (3.0) (0.0) (0.0) (3.2) Balance at end of year ¥ 25.5 ¥ 1.4 ¥ 1.4 ¥ 28.4 Ending receivable balance ¥3,368.0 ¥362.1 ¥301.6 ¥4,031.7 Average receivable balance, net ¥3,346.5 ¥374.9 ¥309.5 ¥4,031.0 Net charge-offs as a % of average receivable balance 0.49% 0.26% 0.15% 0.45% Allowance as a % of ending receivable balance 0.76% 0.40% 0.47% 0.71%

The following table provides information related to losses on operating leases due to customer defaults:

Yen (billions) 2009 2010 2011 Provision for credit losses on past due rental payments ¥2.0 ¥1.9 ¥1.6 Impairment losses on operating leases due to early termination ¥8.7 ¥3.3 ¥0.8

52 Fiscal Year 2011 Compared with Fiscal Year 2010 be generated by the operating leases. If such operating leases are The provision for credit losses on finance receivables decreased by considered to be impaired, impairment losses to be recognized is ¥20.9 billion, or 65%, and net charge-offs decreased by ¥14.5 measured by the amount by which the carrying amount of the billion, or 45%. Impairment losses on operating leases due to early operating leases exceeds the estimated fair value of the operating termination decreased by ¥2.4 billion, or 75%. These declines in leases. losses are due mainly to the improvement in the overall credit quality We believe that our estimated losses on lease residual values and of our North American portfolio and economic conditions and impairment losses is a “critical accounting estimate” because it is strength in used vehicle prices. highly susceptible to market volatility and requires us to make assumptions about future economic trends and lease residual (Losses on Lease Residual Values) values, which are inherently uncertain. We believe that the Our finance subsidiaries in North America establish contract residual assumptions used are appropriate. However, actual losses incurred values of lease vehicles at lease inception based on expectations of may differ from original estimates as a result of actual results varing future used vehicle values, taking into consideration external industry from those assumed in our estimates. data. End customers of leased vehicles typically have an option to If future auction values for all Honda and Acura vehicles in our buy the leased vehicle for the contractual residual value of the vehicle North American operating lease portfolio as of March 31, 2011, or to return the vehicle to our finance subsidiaries through the dealer were to decrease by approximately ¥10,000 per unit from our at the end of the lease term. Likewise, dealers have the option to present estimates, holding all other assumption constant, the total buy the vehicle returned by the customer or to return the vehicle to impact would be an increase in depreciation expense by our finance subsidiaries. The likelihood that the leased vehicle will be approximately ¥2.0 billion, which would be recognized over the purchased varies depending on the difference between the remaining lease terms. Similarly, if future return rates for our existing contractual residual value and the actual market value of the vehicle portfolio of all Honda and Acura vehicles were to increase by one at the end of the lease term. We are exposed to risk of loss on the percentage point from our present estimates, the total impact would disposition of returned lease vehicles when the proceeds from the be an increase in depreciation expense by approximately ¥0.2 sale of the vehicles are less than the contractual residual values at billion, which would be recognized over the remaining lease terms. the end of the lease term. For direct financing leases, our finance With the same prerequisites shown above, if future auction values in subsidiaries in North America purchase insurance to cover a portion our North American direct financing lease portfolio were to decrease of the estimated residual value. by approximately ¥10,000 per unit from our present estimates, the We periodically review the estimate of residual values. For vehicle total impact would be an increase in losses on lease residual values leases accounted for as operating leases, the adjustments to by approximately ¥0.2 billion. And if future return rates were to estimated residual values result in changes to the remaining increase by one percentage point from our present estimates, the depreciation expense to be recognized prospectively on a straight- total impact would be slight. Note that this sensitivity analysis may line basis over the remaining term of the lease. be asymmetric, and are specific to the base conditions in fiscal For vehicle leases accounted for as direct financing leases, 2011. Also, declines in auction values are likely to have a negative downward adjustments are made for declines in estimated residual effect on return rates which could affect the sensitivities. values that are deemed to be other-than-temporary. The adjustments on the uninsured portion of the vehicle’s residual value are recognized Fiscal Year 2011 Compared with Fiscal Year 2010 as a loss in the period in which the estimate changed. Used vehicle prices continued to improve during fiscal year 2011 due The primary components in estimating losses on lease residual in part to the low supply of used vehicles. Losses related to lease values are the expected frequency of returns, or the percentage of residual value of our finance subsidiaries in North America declined leased vehicles we expect to be returned by customers at the end because of higher estimates of lease residual values. No impairment of the lease term, and the expected loss severity, or the expected losses as a result of declines in estimated residual values were difference between the residual value and the amount we receive recognized during fiscal year 2011. through sales of returned vehicles plus proceeds from insurance, if Incremental depreciation on operating leases declined by ¥11.4 any. We estimate losses on lease residual values by evaluating billion, or 81%. Losses on lease residual values on direct financing several different factors, including trends in historical and projected leases declined by ¥3.9 billion, or 56%. used vehicle values and general economic measures. We also test our operating leases for impairment whenever events or changes in circumstances indicate that their carrying values may not be recoverable. Recoverability of operating leases to be held is measured by a comparison of the carrying amount of operating leases to future net cash flows (undiscounted and without interest charges) expected to

53 (Pension and Other Postretirement Benefits) 31, 2011 was 3.0% for Japanese plans. Our assumed discount rate We have various pension plans covering substantially all of our and rate of salary increase as of March 31, 2011 were 5.5~6.0% and employees in Japan and certain employees in foreign countries. 1.5~4.6%, respectively, and our assumed expected long-term rate of Benefit obligations and pension costs are based on assumptions of return for fiscal 2011 was 6.5~8.0% for foreign plans. many factors, including the discount rate, the rate of salary increase We believe that the accounting estimates related to our pension and the expected long-term rate of return on plan assets. The plans is “critical accounting estimate” because changes in these discount rate is determined mainly based on the rates of high quality estimates can materially affect our financial condition and results of corporate bonds currently available and expected to be available operations. during the period to maturity of the defined benefit pension plans. Actual results may differ from our assumptions, and the difference The salary increase assumptions reflect our actual experience as well is accumulated and amortized over future periods. Therefore, the as near-term outlook. Honda determines the expected long-term difference generally will be reflected as our recognized expenses in rate of return based on the investment policies. Honda considers the future periods. We believe that the assumptions currently used are eligible investment assets under investment policies, historical appropriate, however, differences in actual expenses or changes in experience, expected long-term rate of return under the investing assumptions could affect our pension costs and obligations, including environment and the long-term target allocations of the various asset our cash requirements to fund such obligations. categories. Our assumed discount rate and rate of salary increase as The following table shows the effect of a 0.5% change in the of March 31, 2011 were 2.0% and 2.2%, respectively, and our assumed discount rate and the expected long-term rate of return on assumed expected long-term rate of return for the year ended March our funded status, equity and pension expense.

Japanese Plans Yen (billions) Assumptions Percentage point change (%) Funded status Equity Pension expense Discount rate +0.5/–0.5 –84.8/+95.5 +34.3/–45.3 –3.1/+4.0 Expected long-term rate of return +0.5/–0.5 — — –3.8/+3.8

Foreign Plans Yen (billions) Assumptions Percentage point change (%) Funded status Equity Pension expense Discount rate +0.5/–0.5 –39.9/+45.7 +16.9/–19.9 –4.1/+4.1 Expected long-term rate of return +0.5/–0.5 — — –1.8/+1.8

*1 Note that this sensitivity analysis may be asymmetric, and is specific to the base conditions at March 31, 2011. *2 Funded status for fiscal 2011 is affected by March 31, 2011 assumptions. Pension expense for fiscal 2011 is affected by March 31, 2010 assumptions.

(Income Taxes) the probability of the outcome that could be realized upon ultimate Honda is subject to income tax examinations in many tax jurisdictions resolution. Our estimates may change in the future due to new because Honda conducts its operations in various regions of the developments. world. We recognize the tax benefit from an uncertain tax position We believe that our estimates and assumptions of unrecognized based on the technical merits of the position when the position is tax benefits are reasonable, however, if our estimates of unrecognized more likely than not to be sustained upon examination. Benefits from tax benefits and potential tax benefits are not representative of actual tax positions that meet the more likely than not recognition threshold outcomes, our consolidated financial statements could be materially are measured at the largest amount of benefit that is greater than affected in the period of settlement or when the statutes of limitations 50% likelihood of being realized upon ultimate resolution. We expire, as we treat these events as discrete items in the period of performed a comprehensive review for any uncertain tax positions. resolution. We believe our accounting for tax uncertainties is a “critical accounting estimate” because it requires us to evaluate and assess

54 Quantitative and Qualitative Disclosure (Foreign Currency Exchange Rate Risk) about Market Risk Foreign currency forward exchange contracts and purchased option contracts are used to hedge currency risk of sale commitments Honda is exposed to market risks, which are changes in foreign denominated in foreign currencies (principally U.S. dollars). currency exchanges rates, in interest rates and in prices of Foreign currency written option contracts are entered into in marketable equity securities. Honda is a party to derivative financial combination with purchased option contracts to offset premium instruments in the normal course of business in order to manage amounts to be paid for purchased option contracts. risks associated with changes in foreign currency exchange rates The tables below provide information about our derivatives related and in interest rates. Honda does not hold any derivative financial to foreign currency exchange rate risk as of March 31, 2010 and instruments for trading purposes. 2011. For forward exchange contracts and currency options, the table presents the contract amounts and fair value. All forward exchange contracts and currency contracts to which we are a party have original maturities of less than one year.

Foreign Exchange Risk 2010 2011 Yen (millions) Yen (millions) Average Average Contract contractual Contract contractual Fiscal years ended March 31 amounts Fair value rate (Yen) amounts Fair value rate (Yen) Forward Exchange Contracts To sell US$ ¥257,822 ¥(6,076) ¥ 90.80 ¥285,212 ¥(1,229) ¥ 82.77 To sell EUR 32,188 456 126.70 34,183 (1,701) 111.63 To sell CA$ 24 57 88.58 19 (1) 83.44 To sell GBP 29,931 (108) 139.69 13,857 (253) 131.40 To sell other foreign currencies 20,761 (829) various 58,330 (3,660) various To buy US$ 3,207 102 90.02 8,175 41 82.73 To buy other foreign currencies 3,537 34 various 3,046 65 various Cross-currencies 231,657 (1,134) various 223,587 (1,212) various Total ¥579,127 ¥(7,498) ¥626,409 ¥(7,950)

Currency Option Contracts Option purchased to sell US$ ¥ 27,865 ¥ 78 various ¥ 14,746 ¥ 144 various Option written to sell US$ 55,731 (829) various 29,491 (108) various Option purchased to sell other currencies 3,123 (50) various — — — Option written to sell other currencies 6,246 (26) various — — — Total ¥ 92,965 ¥ (827) ¥ 44,237 ¥ 36

(Interest Rate Risks) different currencies, also serve to hedge foreign currency exchange Honda is exposed to market risk for changes in interest rates related risk as well as interest rate risk. primarily to its debt obligations and finance receivables. In addition to short-term financing such as commercial paper, Honda has long- The following tables provide information about Honda’s financial term debt with both fixed and floating rates. Our finance receivables instruments that were sensitive to changes in interest rates at March are primarily fixed rate. Interest rate swap agreements are mainly 31, 2010 and 2011. For finance receivables and long-term debt, used to manage interest rate risk exposure and to convert floating these tables present principal cash flows, fair value and related rate financing (normally three-five years) to fixed rate financing in weighted average interest rates. For interest rate swaps and currency order to match financing costs with income from finance receivables. and interest rate swaps, the table presents notional amounts, fair Foreign currency and interest rate swap agreements used among value and weighted average interest rates. Variable interest rates are determined using formulas such as LIBOR+ and an index.

55 Finance Subsidiaries–Receivables

2010 2011 Yen (millions) Yen (millions) Expected maturity date Average Fair Within 1-2 2-3 3-4 4-5 Fair interest Total value Total 1 year year year year year Thereafter value rate Direct financing leases*1 JP¥ ¥ 29,401 * ¥ 31,329 14,512 8,591 4,819 2,344 1,063 — * 4.39% US$ 7,349 * — — — — — — — * — Other 412,709 * 330,807 116,559 99,741 63,982 48,781 1,744 — * 2.83% Total—Direct financing leases ¥ 449,459 * ¥ 362,136 131,071 108,332 68,801 51,125 2,807 — *

Other finance subsidiaries–receivables: JP¥ ¥ 456,525 449,776 ¥ 500,213 160,317 123,363 93,468 61,286 39,444 22,335 505,615 4.39% US$ 2,504,187 2,536,110 2,554,404 926,042 626,043 476,240 323,853 160,972 41,254 2,588,307 4.81% Other 617,507 625,523 615,039 283,393 151,909 99,213 55,871 19,209 5,444 607,296 6.50% Total—Other finance subsidiaries–receivables: ¥3,578,219 3,611,409 ¥3,669,656 1,369,752 901,315 668,921 441,010 219,625 69,033 3,701,218 Retained interest in securitizations*2 27,555 27,555 — — Total*3 ¥4,055,233 ¥4,031,792

*1 Under U.S. generally accepted accounting principles, disclosure of fair values of direct financing leases is not required. *2 The retained interest in securitizations is accounted for as “trading” securities and is reported at fair value. *3 The finance subsidiaries–receivables include finance subsidiaries–receivables included in trade accounts and notes receivables and other assets in the consolidated balance sheets.

Long-Term Debt (including current portion)

2010 2011 Yen (millions) Yen (millions) Expected maturity date Average Fair Within 1-2 2-3 3-4 4-5 Fair interest Total value Total 1 year year year year year Thereafter value rate Japanese yen bonds ¥ 320,000 323,852 ¥ 320,000 70,000 120,000 40,000 30,000 60,000 — 322,270 1.01% Japanese yen medium- term notes (Fixed rate) 151,998 153,250 102,226 33,909 25,306 6,502 6,001 27,507 3,001 102,896 1.35% Japanese yen medium- term notes (Floating rate) 114,676 114,599 80,619 16,504 58,614 3,501 — 2,000 — 80,770 0.49% U.S. dollar medium- term notes (Fixed rate) 391,272 420,970 451,891 28,967 41,381 141,526 45,521 82,764 111,732 477,827 4.38% U.S. dollar medium- term notes (Floating rate) 211,685 213,695 297,285 146,160 89,963 10,014 8,276 42,872 — 299,014 0.98% Asset-backed notes 311,222 316,596 453,802 239,339 148,699 60,403 5,361 — — 458,794 1.94% Loans and others—primarily fixed rate 1,534,478 1,582,083 1,299,872 427,576 310,459 313,575 160,431 84,818 3,013 1,322,989 3.31% Total ¥3,035,331 3,125,045 ¥3,005,695 962,455 794,422 575,521 255,590 299,961 117,746 3,064,560

56 Interest Rate Swaps

2010 2011 Yen (millions) Yen (millions) Expected maturity date Notional Average Average principal Receive/ Contract Fair Contract Within 1-2 2-3 3-4 4-5 Fair receive pay currency Pay amounts value amount 1 year year year year year Thereafter value rate rate JP¥ Float/Fix ¥ 770 (24) ¥ 420 — — 180 240 — — (14) 1.34% 3.16% US$ Float/Fix 2,476,108 (47,762) 2,357,658 305,929 594,618 940,725 427,415 88,971 — (20,292) 0.37% 1.84% Fix/Float 525,362 24,473 519,895 29,103 61,336 183,762 50,291 83,150 112,253 16,611 4.40% 1.75% Float/Float — — 12,473 — 12,473 — — — — 16 0.74% 0.60% CA$ Float/Fix 525,099 (10,905) 458,092 71,298 97,491 141,507 94,553 47,966 5,277 (4,218) 1.30% 2.87% Fix/Float 233,677 10,036 179,904 51,401 51,401 77,102 — — — 5,373 5.29% 2.68% GBP Float/Fix 45,075 (528) 32,134 21,422 10,712 — — — — (136) 1.78% 1.95% EUR Float/Fix — — 6,029 2,681 2,118 1,230 — — — (17) 0.88% 2.24% Total ¥3,806,091 (24,710) ¥3,566,605 481,834 830,149 1,344,506 572,499 220,087 117,530 (2,677)

Currency & Interest Rate Swaps 2010 2011 Yen (millions) Yen (millions) Expected maturity date Receiving Paying Average Average side side Receive/ Contract Fair Contract Within 1-2 2-3 3-4 4-5 Fair receive pay currency currency Pay amounts value amount 1 year year year year year Thereafter value rate rate JP¥ US$ Fix/Float ¥124,721 29,735 ¥ 82,078 23,820 17,563 5,087 5,537 27,734 2,337 21,523 1.35% 0.73% Float/Float 137,850 17,403 105,671 58,564 42,348 2,877 — 1,882 — 25,179 0.76% 1.09% Other Other Fix/Float 405,289 12,613 313,576 — 88,093 100,068 125,415 — — 6,444 5.03% 1.74% Float/Float 51,104 (3,953) 47,774 27,962 — — 19,812 — — (3,064) 1.29% 2.81% Total ¥718,964 55,798 ¥549,099 110,346 148,004 108,032 150,764 29,616 2,337 50,082

(Equity Price Risk) any plaintiff for general and special damages and court costs will be Honda is exposed to equity price risk as a result of its holdings of adequately covered by our insurance and accrued liabilities. Punitive marketable equity securities. Marketable equity securities included damages are claimed in certain of these lawsuits. Honda is also in Honda’s investment portfolio are held for purposes other than subject to potential liability under other various lawsuits and claims trading, and are reported at fair value, with unrealized gains or including 6 purported class actions in the United States. losses, net of deferred taxes, included in accumulated other Honda recognizes an accrued liability for loss contingencies when comprehensive income (loss) in the equity section of the consolidated it is probable that an obligation has been incurred and the amount of balance sheets. At March 31, 2010 and 2011, the estimated fair loss can be reasonably estimated. Honda reviews these pending values of marketable equity securities were ¥94.5 billion and ¥92.4 lawsuits and claims periodically and adjusts the amounts recorded billion, respectively. 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. After consultation with legal counsel, and taking into Legal Proceedings account all known factors pertaining to existing lawsuits and claims, Honda believes that the ultimate outcome of such lawsuits and Various legal proceedings are pending against us. Honda believes pending claims including 6 purported class actions in the United that such proceedings constitute ordinary routine litigation incidental States should not result in liability to Honda that would be likely to to our business. With respect to product liability, personal injury claims have an adverse material effect on its consolidated financial position, or lawsuits, we believe that any judgment that may be recovered by results of operations or cash flows.

57 Consolidated Balance Sheets

March 31, 2010 and 2011 Yen U.S. dollars (millions) (millions)

Assets 2010 2011 2011

Current assets:

Cash and cash equivalents ¥ 1,119,902 ¥ 1,279,024 $ 15,382 Trade accounts and notes receivable, net of allowance for doubtful accounts of ¥8,555 million in 2010 and ¥7,904 million ($95 million) in 2011 883,476 787,691 9,473

Finance subsidiaries–receivables, net 1,100,158 1,131,068 13,603

Inventories 935,629 899,813 10,822

Deferred income taxes 176,604 202,291 2,433

Other current assets 397,955 390,160 4,692

Total current assets 4,613,724 4,690,047 56,405

Finance subsidiaries–receivables, net 2,361,335 2,348,913 28,249

Investments and advances:

Investments in and advances to affiliates 457,834 440,026 5,292

Other, including marketable equity securities 184,847 199,906 2,404

Total investments and advances 642,681 639,932 7,696

Property on operating leases:

Vehicles 1,651,672 1,645,517 19,790

Less accumulated depreciation 343,525 287,885 3,462

Net property on operating leases 1,308,147 1,357,632 16,328

Property, plant and equipment, at cost:

Land 489,769 483,654 5,817

Buildings 1,509,821 1,473,067 17,716

Machinery and equipment 3,257,455 3,166,353 38,079

Construction in progress 143,862 202,186 2,432

5,400,907 5,325,260 64,044

Less accumulated depreciation and amortization 3,314,244 3,385,904 40,720

Net property, plant and equipment 2,086,663 1,939,356 23,324

Other assets 616,565 594,994 7,155

Total assets, net of allowance for doubtful accounts of ¥9,319 million in 2010 and ¥23,275 million in 2011 ¥11,629,115 ¥11,570,874 $139,157

Yen U.S. dollars (millions) (millions)

Liabilities and Equity 2010 2011 2011

Current liabilities:

Short-term debt ¥ 1,066,344 ¥ 1,094,740 $ 13,166

Current portion of long-term debt 722,296 962,455 11,575

Trade payables:

Notes 24,704 25,216 303

Accounts 802,464 691,520 8,317

Accrued expenses 542,521 525,540 6,320

Income taxes payable 23,947 31,960 384

Other current liabilities 236,854 236,761 2,848

Total current liabilities 3,419,130 3,568,192 42,913

Long-term debt, excluding current portion 2,313,035 2,043,240 24,573

Other liabilities 1,440,520 1,376,530 16,554

Total liabilities 7,172,685 6,987,962 84,040

Equity:

Honda Motor Co., Ltd. shareholders’ equity: Common stock, authorized 7,086,000,000 shares in 2010 and 2011; issued 1,834,828,430 shares in 2010 and 1,811,428,430 shares in 2011 86,067 86,067 1,035

Capital surplus 172,529 172,529 2,075

Legal reserves 45,463 46,330 557

Retained earnings 5,304,473 5,666,539 68,148

Accumulated other comprehensive income (loss), net (1,208,162) (1,495,380) (17,984) Treasury stock, at cost 20,225,694 shares in 2010 and 9,126,716 shares in 2011 (71,730) (26,110) (314)

Total Honda Motor Co., Ltd. shareholders’ equity 4,328,640 4,449,975 53,517

Noncontrolling interests 127,790 132,937 1,600

Total equity 4,456,430 4,582,912 55,117

Commitments and contingent liabilities

Total liabilities and equity ¥11,629,115 ¥11,570,874 $139,157

59 Consolidated Statements of Income

Years ended March 31, 2009, 2010 and 2011 Yen U.S. dollars (millions) (millions)

2009 2010 2011 2011

Net sales and other operating revenue ¥10,011,241 ¥8,579,174 ¥8,936,867 $107,479

Operating costs and expenses:

Cost of sales 7,419,582 6,414,721 6,496,841 78,134

Selling, general and administrative 1,838,819 1,337,324 1,382,660 16,629

Research and development 563,197 463,354 487,591 5,864

9,821,598 8,215,399 8,367,092 100,627

Operating income 189,643 363,775 569,775 6,852

Other income (expenses):

Interest income 41,235 18,232 23,577 284

Interest expense (22,543) (12,552) (8,474) (102)

Other, net (46,601) (33,257) 45,670 549

(27,909) (27,577) 60,773 731

Income before income taxes and equity in income of affiliates 161,734 336,198 630,548 7,583

Income tax expense:

Current 68,062 90,263 76,647 922

Deferred 41,773 56,606 130,180 1,565

109,835 146,869 206,827 2,487

Income before equity in income of affiliates 51,899 189,329 423,721 5,096

Equity in income of affiliates 99,034 93,282 139,756 1,681

Net income 150,933 282,611 563,477 6,777

Less: Net income attributable to noncontrolling interests 13,928 14,211 29,389 354

Net income attributable to Honda Motor Co., Ltd. ¥ 137,005 ¥ 268,400 ¥ 534,088 $ 6,423

Yen U.S. dollars

2009 2010 2011 2011

Basic net income attributable to Honda Motor Co., Ltd. per common share ¥75.50 ¥ 147.91 ¥ 295.67 $ 3.56

60 Consolidated Statements of Changes in Equity

Years ended March 31, 2009, 2010 and 2011 Yen (millions) Accumulated Total other Honda Motor comprehensive Co., Ltd. Common Capital Legal Retained income (loss), Treasury shareholders’ Noncontrolling stock surplus reserves earnings net stock equity interests Total equity Balance at March 31, 2008 ¥86,067 ¥172,529 ¥39,811 ¥5,106,197 ¥ (782,198) ¥(71,927) ¥4,550,479 ¥141,806 ¥4,692,285 Transfer to legal reserves 4,154 (4,154) — — Dividends paid to Honda Motor Co., Ltd. shareholders (139,724) (139,724) (139,724) Dividends paid to noncontrolling interests (10,841) (10,841) Capital transactions and others (172) (172) Comprehensive income (loss): Net income 137,005 137,005 13,928 150,933 Other comprehensive income (loss), net of tax Adjustments from foreign currency translation (477,316) (477,316) (19,865) (497,181) Unrealized gains (losses) on available-for-sale securities, net (25,063) (25,063) (60) (25,123) Unrealized gains (losses) on derivative instruments, net (460) (460) (460) Pension and other postretirement benefits adjustments (37,791) (37,791) (1,740) (39,531) Total comprehensive income (loss) (403,625) (7,737) (411,362) Purchase of treasury stock (62) (62) (62) Reissuance of treasury stock (57) 277 220 220 Retirement of treasury stock — Balance at March 31, 2009 ¥86,067 ¥172,529 ¥43,965 ¥5,099,267 ¥(1,322,828) ¥(71,712) ¥4,007,288 ¥123,056 ¥4,130,344 Transfer to legal reserves 1,498 (1,498) — — Dividends paid to Honda Motor Co., Ltd. shareholders (61,696) (61,696) (61,696) Dividends paid to noncontrolling interests (16,278) (16,278) Capital transactions and others 127 127 Comprehensive income (loss): Net income 268,400 268,400 14,211 282,611 Other comprehensive income (loss), net of tax Adjustments from foreign currency translation 91,097 91,097 5,750 96,847 Unrealized gains (losses) on available-for-sale securities, net 23,107 23,107 111 23,218 Unrealized gains (losses) on derivative instruments, net (324) (324) (324) Pension and other postretirement benefits adjustments 786 786 813 1,599 Total comprehensive income (loss) 383,066 20,885 403,951 Purchase of treasury stock (20) (20) (20) Reissuance of treasury stock 2 2 2 Retirement of treasury stock — Balance at March 31, 2010 ¥86,067 ¥172,529 ¥45,463 ¥5,304,473 ¥(1,208,162) ¥(71,730) ¥4,328,640 ¥127,790 ¥4,456,430

61 Consolidated Statements of Changes in Equity–(Continued)

Yen (millions) Accumulated Total other Honda Motor comprehensive Co., Ltd. Common Capital Legal Retained income (loss), Treasury shareholders’ Noncontrolling stock surplus reserves earnings net stock equity interests Total equity Balance at March 31, 2010 ¥86,067 ¥172,529 ¥45,463 ¥5,304,473 ¥(1,208,162) ¥(71,730) ¥4,328,640 ¥127,790 ¥4,456,430 Cumulative effect of adjustments resulting from the adoption of new accounting standards on variable interest entities, net of tax 1,432 1,432 1,432 Adjustment balance at March 31, 2010 86,067 172,529 45,463 5,305,905 (1,208,162) (71,730) 4,330,072 127,790 4,457,862 Transfer to legal reserves 867 (867) — — Dividends paid to Honda Motor Co., Ltd. shareholders (92,170) (92,170) (92,170) Dividends paid to noncontrolling interests (16,232) (16,232) Capital transactions and others (946) (946) Comprehensive income (loss): Net income 534,088 534,088 29,389 563,477 Other comprehensive income (loss), net of tax Adjustments from foreign currency translation (290,745) (290,745) (6,796) (297,541) Unrealized gains (losses) on available-for-sale securities, net 575 575 (27) 548 Unrealized gains (losses) on derivative instruments, net 168 168 168 Pension and other postretirement benefits adjustments 2,784 2,784 (241) 2,543 Total comprehensive income (loss) 246,870 22,325 269,195 Purchase of treasury stock (34,800) (34,800) (34,800) Reissuance of treasury stock 3 3 3 Retirement of treasury stock (80,417) 80,417 — — Balance at March 31, 2011 ¥86,067 ¥172,529 ¥46,330 ¥5,666,539 ¥(1,495,380) ¥(26,110) ¥4,449,975 ¥132,937 ¥4,582,912

U.S. dollars (millions) Accumulated Total other Honda Motor comprehensive Co., Ltd. Common Capital Legal Retained income (loss), Treasury shareholders’ Noncontrolling stock surplus reserves earnings net stock equity interests Total equity Balance at March 31, 2010 $1,035 $2,075 $547 $63,793 $(14,529) $(862) $52,059 $1,538 $53,597 Cumulative effect of adjustments resulting from the adoption of new accounting standards on variable interest entities, net of tax 17 17 17 Adjustment balance at March 31, 2010 1,035 2,075 547 63,810 (14,529) (862) 52,076 1,538 53,614 Transfer to legal reserves 10 (10) — — Dividends paid to Honda Motor Co., Ltd. shareholders (1,108) (1,108) (1,108) Dividends paid to noncontrolling interests (195) (195) Capital transactions and others (11) (11) Comprehensive income (loss): Net income 6,423 6,423 353 6,776 Other comprehensive income (loss), net of tax Adjustments from foreign currency translation (3,497) (3,497) (82) (3,579) Unrealized gains (losses) on available-for-sale securities, net 7 7 (0) 7 Unrealized gains (losses) on derivative instruments, net 2 2 2 Pension and other postretirement benefits adjustments 33 33 (3) 30 Total comprehensive income (loss) 2,968 268 3,236 Purchase of treasury stock (419) (419) (419) Reissuance of treasury stock 0 0 0 Retirement of treasury stock (967) 967 — — Balance at March 31, 2011 $1,035 $2,075 $557 $68,148 $(17,984) $(314) $53,517 $1,600 $55,117 62 Consolidated Statements of Cash Flows

Years ended March 31, 2009, 2010 and 2011 Yen U.S. dollars (millions) (millions)

2009 2010 2011 2011 Cash flows from operating activities: Net income ¥ 150,933 ¥ 282,611 ¥ 563,477 $ 6,777 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation excluding property on operating leases 441,868 401,743 351,496 4,227 Depreciation of property on operating leases 195,776 227,931 212,143 2,551 Deferred income taxes 41,773 56,606 130,180 1,566 Equity in income of affiliates (99,034) (93,282) (139,756) (1,681) Dividends from affiliates 65,140 140,901 98,182 1,181 Gain on sales of investments in affiliates — — (46,756) (562) Provision for credit and lease residual losses on finance subsidiaries–receivables 77,016 40,062 13,305 160 Impairment loss on investments in securities 26,001 603 2,133 26 Damaged and impairment loss on long-lived assets and goodwill excluding property on operating leases 21,597 548 16,833 202 Impairment loss on property on operating leases 18,528 3,312 835 10 Loss (gain) on derivative instruments, net (15,506) (37,753) (7,788) (94) Decrease (increase) in assets: Trade accounts and notes receivable (30,025) (6,910) 38,700 465 Inventories (262,782) 352,994 (33,676) (405) Other current assets (82,838) 103,071 266 3 Other assets 8,640 24,150 (40,729) (490) Increase (decrease) in liabilities: Trade accounts and notes payable (133,662) 151,345 (55,331) (665) Accrued expenses (102,711) (20,457) 39,103 470 Income taxes payable (12,861) (14,524) 9,461 114 Other current liabilities 10,630 5,662 32,209 387 Other liabilities 74,872 (30,146) (83,115) (1,000) Other, net (9,714) (44,255) (30,335) (364) Net cash provided by operating activities 383,641 1,544,212 1,070,837 12,878 Cash flows from investing activities: Increase in investments and advances (4,879) (19,419) (11,412) (137) Decrease in investments and advances 1,921 14,078 13,995 168 Payments for purchases of available-for-sale securities (31,936) (5,871) (262) (3) Proceeds from sales of available-for-sale securities 26,896 4,945 2,739 33 Payments for purchases of held-to-maturity securities (17,348) (21,181) (179,951) (2,164) Proceeds from redemptions of held-to-maturity securities 32,667 6,283 154,977 1,864 Proceeds from sales of investments in affiliates — — 71,073 855 Capital expenditures (635,190) (392,062) (318,543) (3,831) Proceeds from sales of property, plant and equipment 18,843 24,472 24,725 297 Acquisitions of finance subsidiaries–receivables (2,303,930) (1,448,146) (2,208,480) (26,561) Collections of finance subsidiaries–receivables 2,023,031 1,595,235 2,109,904 25,375 Sales (repurchases) of finance subsidiaries–receivables, net 324,672 (55,168) — — Purchases of operating lease assets (668,128) (544,027) (798,420) (9,602) Proceeds from sales of operating lease assets 100,017 245,110 408,265 4,910 Net cash used in investing activities (1,133,364) (595,751) (731,390) (8,796) Cash flows from financing activities: Increase (decrease) in short-term debt, net 270,795 (649,641) 113,669 1,367 Proceeds from long-term debt 1,299,984 1,132,222 799,520 9,615 Repayments of long-term debt (889,483) (963,833) (870,406) (10,469) Dividends paid (139,724) (61,696) (92,170) (1,108) Dividends paid to noncontrolling interests (10,841) (16,278) (16,232) (195) Sales (purchases) of treasury stock, net 131 (18) (34,797) (418) Net cash provided by (used in) financing activities 530,862 (559,244) (100,416) (1,208) Effect of exchange rate changes on cash and cash equivalents (141,672) 40,316 (79,909) (960) Net change in cash and cash equivalents (360,533) 429,533 159,122 1,914 Cash and cash equivalents at beginning of year 1,050,902 690,369 1,119,902 13,468 Cash and cash equivalents at end of year ¥ 690,369 ¥1,119,902 ¥1,279,024 $15,382

63 Segment Information which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to Honda has four reportable segments: the Motorcycle business, the allocate resources and in assessing performance. The accounting Automobile business, the Financial services business and the Power policies used for these reportable segments are consistent with the product and other businesses, which are based on Honda’s accounting policies used in Honda’s consolidated financial organizational structure and characteristics of products and services. statements. Operating segments are defined as components of Honda’s about

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), Research & Development and relevant parts Manufacturing Sales and related services Automobile business Automobiles and relevant parts Research & Development Manufacturing Sales and related services Financial services business Financial, insurance services Retail loan and lease related to Honda products Others Power product and Power products and relevant Research & Development other businesses parts, and others Manufacturing Sales and related services Others

Segment Information

As of and for the year ended March 31, 2009

Yen (millions)

Power Financial Product Motorcycle Automobile Services and Other Segment Reconciling Other Business Business Business Businesses Total Items Adjustments Consolidated Net sales and other operating revenue: External customers ¥1,411,511 ¥7,674,404 ¥ 582,261 ¥343,065 ¥10,011,241 ¥ — ¥— ¥10,011,241 Intersegment — — 14,264 25,840 40,104 (40,104) — — Total 1,411,511 7,674,404 596,525 368,905 10,051,345 (40,104) — 10,011,241 Cost of sales, SG&A and R&D expenses 1,311,598 7,649,861 515,854 384,389 9,861,702 (40,104) — 9,821,598 Segment income (loss) 99,913 24,543 80,671 (15,484) 189,643 — — 189,643 Equity in income of affiliates 26,105 71,709 — 1,220 99,034 — — 99,034 Assets 1,047,112 5,219,408 5,735,716 275,607 12,277,843 (458,926) — 11,818,917 Investments in affiliates 107,431 379,068 — 16,247 502,746 — — 502,746 Depreciation and amortization 51,200 373,295 199,324 13,825 637,644 — — 637,644 Capital expenditures 90,401 523,593 671,127 16,920 1,302,041 — — 1,302,041 Damaged and impairment losses on long-lived assets and goodwill 413 18,874 18,528 2,310 40,125 — — 40,125 Provision for credit and lease residual losses on finance subsidiaries–receivables ¥ — ¥ — ¥ 77,016 ¥ — ¥ 77,016 ¥ — ¥— ¥ 77,016

64 As of and for the year ended March 31, 2010

Yen (millions)

Power Financial Product Motorcycle Automobile Services and Other Segment Reconciling Other Business Business Business Businesses Total Items Adjustments Consolidated Net sales and other operating revenue: External customers ¥1,140,292 ¥6,554,848 ¥ 606,352 ¥277,682 ¥ 8,579,174 ¥ — ¥— ¥ 8,579,174 Intersegment — — 12,459 26,936 39,395 (39,395) — — Total 1,140,292 6,554,848 618,811 304,618 8,618,569 (39,395) — 8,579,174 Cost of sales, SG&A and R&D expenses 1,081,455 6,428,090 423,910 321,339 8,254,794 (39,395) — 8,215,399 Segment income (loss) 58,837 126,758 194,901 (16,721) 363,775 — — 363,775 Equity in income of affiliates 23,131 69,082 — 1,069 93,282 — — 93,282 Assets 1,025,665 5,044,247 5,541,788 281,966 11,893,666 (264,551) — 11,629,115 Investments in affiliates 103,032 334,875 — 16,821 454,728 — — 454,728 Depreciation and amortization 48,683 337,787 230,453 12,751 629,674 — — 629,674 Capital expenditures 38,332 284,586 546,342 23,748 893,008 — — 893,008 Damaged and impairment losses on long-lived assets and goodwill — 548 3,312 — 3,860 — — 3,860 Provision for credit and lease residual losses on finance subsidiaries–receivables ¥ — ¥ — ¥ 40,062 ¥ — ¥ 40,062 ¥ — ¥— ¥ 40,062

As of and for the year ended March 31, 2011

Yen (millions)

Power Financial Product Motorcycle Automobile Services and Other Segment Reconciling Other Business Business Business Businesses Total Items Adjustments Consolidated Net sales and other operating revenue: External customers ¥1,288,194 ¥6,794,098 ¥ 561,896 ¥292,679 ¥ 8,936,867 ¥ — ¥ — ¥ 8,936,867 Intersegment — 8,218 11,562 25,600 45,380 (45,380) — — Total 1,288,194 6,802,316 573,458 318,279 8,982,247 (45,380) — 8,936,867 Cost of sales, SG&A and R&D expenses 1,149,600 6,537,766 387,179 323,804 8,398,349 (45,380) 14,123 8,367,092 Segment income (loss) 138,594 264,550 186,279 (5,525) 583,898 — (14,123) 569,775 Equity in income of affiliates 40,471 100,018 — (733) 139,756 — — 139,756 Assets 933,671 4,883,029 5,572,152 290,730 11,679,582 (108,708) — 11,570,874 Investments in affiliates 76,280 341,955 — 16,756 434,991 — — 434,991 Depreciation and amortization 40,324 296,364 213,805 13,146 563,639 — — 563,639 Capital expenditures 37,084 273,502 800,491 13,963 1,125,040 — — 1,125,040 Damaged and impairment losses on long-lived assets and goodwill 59 16,774 835 — 17,668 — — 17,668 Provision for credit and lease residual losses on finance subsidiaries–receivables ¥ — ¥ — ¥ 13,305 ¥ — ¥ 13,305 ¥ — ¥ — ¥ 13,305

65 As of and for the year ended March 31, 2011

U.S. dollars (millions)

Power Financial Product Motorcycle Automobile Services and Other Segment Reconciling Other Business Business Business Businesses Total Items Adjustments Consolidated Net sales and other operating revenue: External customers $15,492 $81,709 $ 6,758 $3,520 $107,479 $ — $ — $107,479 Intersegment — 99 139 308 546 (546) — — Total 15,492 81,807 6,896 3,830 108,025 (546) — 107,479 Cost of sales, SG&A and R&D expenses 13,826 78,626 4,656 3,894 101,002 (546) 170 100,627 Segment income (loss) 1,667 3,182 2,240 (67) 7,022 — (170) 6,852 Equity in income of affiliates 487 1,203 — (9) 1,681 — — 1,681 Assets 11,229 58,726 67,013 3,496 140,464 (1,307) — 139,157 Investments in affiliates 917 4,113 — 201 5,231 — — 5,231 Depreciation and amortization 485 3,564 2,571 159 6,779 — — 6,779 Capital expenditures 446 3,289 9,627 168 13,530 — — 13,530 Damaged and impairment loss on long-lived assets and goodwill 1 202 10 — 212 — — 212 Provision for credit and lease residual losses on finance subsidiaries–receivables $ — $ — $ 160 $ — $ 160 $ — $ — $ 160

Explanatory notes: 1. Segment income (loss) of each segment is measured in a consistent manner with consolidated operating income, which is income before income taxes and equity in income of affiliates before other income (expenses), except Other Adjustments, which is out-of-period adjustments. Expenses not directly associated with specific segments are allocated based on the most reasonable measures applicable. The amount of out-of-period adjustments are not reported to or used by the chief operating decision maker in deciding how to allocate resources and in assessing the Company’s operating performance. Therefore, the adjustments are not included in the Power product and other businesses but as Other Adjustments for the year ended March 31, 2011. 2. Assets of each segment are defined as total assets, including derivative financial instruments, investments in affiliates, 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 the corporate assets described below. 3. Intersegment sales and revenues are generally made at values that approximate arm’s-length prices. 4. Unallocated corporate assets, included in reconciling items, amounted to ¥257,291 million as of March 31, 2009, ¥338,135 million as of March 31, 2010, and ¥453,116 million as of March 31, 2011, which consist primarily of cash and cash equivalents and available-for-sale securities and held-to-maturity securities held by the Company. Reconciling items also include elimination of intersegment transactions. 5. Depreciation and amortization of the Financial Services Business include ¥195,776 million for the year ended March 31, 2009, ¥227,931 million for the year ended March 31, 2010 and ¥212,143 million for the year ended March 31, 2011, respectively, of depreciation of property on operating leases. 6. Capital expenditures of the Financial Services Business includes ¥668,128 million for the year ended March 31, 2009, ¥544,027 million for the year ended March 31, 2010 and ¥798,420 million for the year ended March 31, 2011, respectively, related to purchases of operating lease assets. 7. For the year ended March 31, 2011, substantially all of the ¥45,720 million of the costs and expenses resulting from the Great East Japan Earthquake are included in Cost of sales, SG&A and R&D expenses of the Automobile business.

External Sales and Other Operating Revenue by Product or Service Groups

Yen U.S. dollars (millions) (millions) Years ended March 31: 2009 2010 2011 2011 Motorcycles and relevant parts ¥ 1,323,259 ¥1,079,165 ¥1,225,098 $ 14,734 All-terrain vehicles (ATVs) and relevant parts 88,252 61,127 63,096 759 Automobiles and relevant parts 7,674,404 6,554,848 6,794,098 81,709 Financial, insurance services 582,261 606,352 561,896 6,758 Power products and relevant parts 224,648 188,014 202,838 2,439 Others 118,417 89,668 89,841 1,080 Total ¥10,011,241 ¥8,579,174 ¥8,936,867 $107,479 66 Geographical Information As of and for the year ended March 31, 2009

Yen (millions)

Japan United States Other Countries Total Sales to external customers ¥1,871,962 ¥3,990,729 ¥4,148,550 ¥10,011,241 Long-lived assets 1,140,316 1,835,163 566,445 3,541,924

As of and for the year ended March 31, 2010

Yen (millions)

Japan United States Other Countries Total Sales to external customers ¥1,864,513 ¥3,294,758 ¥3,419,903 ¥8,579,174 Long-lived assets 1,113,386 1,767,879 603,881 3,485,146

As of and for the year ended March 31, 2011

Yen (millions)

Japan United States Other Countries Total Sales to external customers ¥1,834,003 ¥3,504,765 ¥3,598,099 ¥8,936,867 Long-lived assets 1,053,168 1,766,814 571,591 3,391,573

As of and for the year ended March 31, 2011

U.S. dollars (millions)

Japan United States Other Countries Total Sales to external customers $22,057 $42,150 $43,272 $107,479 Long-lived assets 12,666 21,249 6,874 40,789

The above information is based on the location of the Company and its subsidiaries.

67 Supplemental Geographical Information In addition to the disclosure required by U.S. GAAP, Honda provides the following supplemental information in order to provide financial statements users with useful information:

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

As of and for the year ended March 31, 2009

Yen (millions)

North Other Reconciling Other Japan America Europe Asia Regions Total Items Adjustments Consolidated Net sales and other operating revenue: External customers ¥1,871,962 ¥4,534,684 ¥1,191,540 ¥1,335,091 ¥1,077,964 ¥10,011,241 ¥ — ¥— ¥10,011,241 Transfers between geographic areas 2,290,625 244,440 87,362 273,140 66,256 2,961,823 (2,961,823) — — Total 4,162,587 4,779,124 1,278,902 1,608,231 1,144,220 12,973,064 (2,961,823) — 10,011,241

Cost of sales, SG&A and R&D expenses 4,324,203 4,699,422 1,268,701 1,504,628 1,009,158 12,806,112 (2,984,514) — 9,821,598 Operating income (loss) ¥ (161,616) ¥ 79,702 ¥ 10,201 ¥ 103,603 ¥ 135,062 ¥ 166,952 ¥ 22,691 ¥— ¥ 189,643 Assets ¥3,078,478 ¥6,547,880 ¥ 766,594 ¥1,016,059 ¥ 450,081 ¥11,859,092 ¥ (40,175) ¥— ¥11,818,917 Long-lived assets 1,140,316 1,918,579 110,543 253,113 119,373 3,541,924 — — 3,541,924

As of and for the year ended March 31, 2010

Yen (millions)

North Other Reconciling Other Japan America Europe Asia Regions Total Items Adjustments Consolidated Net sales and other operating revenue: External customers ¥1,864,513 ¥3,752,417 ¥769,857 ¥1,320,047 ¥872,340 ¥ 8,579,174 ¥ — ¥— ¥ 8,579,174 Transfers between geographic areas 1,441,264 155,799 55,615 198,533 24,151 1,875,362 (1,875,362) — — Total 3,305,777 3,908,216 825,472 1,518,580 896,491 10,454,536 (1,875,362) — 8,579,174

Cost of sales, SG&A and R&D expenses 3,334,912 3,671,837 836,344 1,405,574 850,683 10,099,350 (1,883,951) — 8,215,399 Operating income (loss) ¥ (29,135) ¥ 236,379 ¥ (10,872) ¥ 113,006 ¥ 45,808 ¥ 355,186 ¥ 8,589 ¥— ¥ 363,775 Assets ¥2,947,764 ¥6,319,896 ¥591,423 ¥1,050,727 ¥619,345 ¥11,529,155 ¥ 99,960 ¥— ¥11,629,115 Long-lived assets 1,113,386 1,861,596 107,262 240,704 162,198 3,485,146 — — 3,485,146

As of and for the year ended March 31, 2011

Yen (millions)

North Other Reconciling Other Japan America Europe Asia Regions Total Items Adjustments Consolidated Net sales and other operating revenue: External customers ¥1,834,003 ¥3,941,505 ¥618,426 ¥1,594,058 ¥948,875 ¥ 8,936,867 ¥ — ¥ — ¥ 8,936,867 Transfers between geographic areas 1,777,204 206,392 80,872 247,109 33,208 2,344,785 (2,344,785) — — Total 3,611,207 4,147,897 699,298 1,841,167 982,083 11,281,652 (2,344,785) — 8,936,867

Cost of sales, SG&A and R&D expenses 3,545,089 3,846,975 709,501 1,690,530 912,534 10,704,629 (2,351,660) 14,123 8,367,092 Operating income (loss) ¥ 66,118 ¥ 300,922 ¥ (10,203) ¥ 150,637 ¥ 69,549 ¥ 577,023 ¥ 6,875 ¥(14,123) ¥ 569,775 Assets ¥2,875,630 ¥6,209,145 ¥564,678 ¥1,049,113 ¥658,636 ¥11,357,202 ¥ 213,672 ¥ — ¥11,570,874 Long-lived assets 1,053,168 1,852,542 106,633 231,867 147,363 3,391,573 — — 3,391,573

68 As of and for the year ended March 31, 2011

U.S dollars (millions)

North Other Reconciling Other Japan America Europe Asia Regions Total Items Adjustments Consolidated Net sales and other operating revenue: External customers $22,057 $47,402 $7,437 $19,171 $11,412 $107,479 $ — $ — $107,479 Transfers between geographic areas 21,373 2,482 973 2,972 399 28,199 (28,199) — — Total 43,430 49,884 8,410 22,143 11,811 135,678 (28,199) — 107,479

Cost of sales, SG&A and R&D expenses 42,635 46,265 8,533 20,331 10,974 128,738 (28,282) 171 100,627 Operating income (loss) $ 795 $ 3,619 $ (123) $ 1,812 $ 837 $ 6,940 $ 83 $(171) $ 6,852 Assets $34,584 $74,674 $6,791 $12,617 $ 7,921 $136,587 $ 2,570 $ — $139,157 Long-lived assets 12,666 22,280 1,282 2,789 1,772 40,789 — — 40,789

Explanatory notes: 1. Major countries or regions in each geographic area: North America United States, Canada, Mexico Europe United Kingdom, Germany, France, Italy, Belgium Asia Thailand, Indonesia, China, India, Vietnam Other Regions Brazil, Australia 2. Operating income (loss) of each geographical region is measured in a consistent manner with consolidated operating income, which is income before income taxes and equity in income of affiliates before other income (expenses), except Other Adjustments, which is out-of- period adjustments. The adjustments are not included in Japan but as Other Adjustments for the year ended March 31, 2011. 3. Assets of each geographical region are defined as total assets, including derivative financial instruments, investments in affiliates, and deferred tax assets. 4. Sales and revenues between geographic areas are generally made at values that approximate arm’s-length prices. 5. Unallocated corporate assets, included in reconciling items, amounted to ¥257,291 million as of March 31, 2009, ¥338,135 million as of March 31, 2010, and ¥453,116 million as of March 31, 2011, which consist primarily of cash and cash equivalents, available-for-sale securities, and held-to-maturity securities held by the Company. Reconciling items also include elimination of transactions between geographic areas. 6. Cost of sales, SG&A and R&D expenses of Japan includes ¥45,720 million for the year ended March 31, 2011 related to loss of the Great East Japan Earthquake.

Basis of Translating Financial Statements The consolidated financial statements are expressed in Japanese yen. However, the consolidated financial statements as of and for the year ended March 31, 2011 have been translated into United States dollars at the rate of ¥83.15 = U.S.$1, the approximate exchange rate prevailing on the Tokyo Foreign Exchange Market on March 31, 2011. Those U.S. dollar amounts presented in the consolidated financial statements and related notes are included solely for the reader. This translation should not be construed as a representation that all the amounts shown could be converted into U.S. dollars.

69 Consolidated Balance Sheets Divided into Non-Financial Services Businesses and Finance Subsidiaries

Yen (millions)

At March 31, 2010 and 2011 2010 2011 Assets Non-financial services businesses Current assets: ¥ 3,535,061 ¥ 3,587,110 Cash and cash equivalents 1,100,695 1,252,362 Trade accounts and notes receivable, net 525,768 459,120 Inventories 935,629 899,813 Other current assets 972,969 975,815 Investments and advances 880,721 866,809 Property, plant and equipment, net 2,068,119 1,924,014 Other assets 446,218 388,474 Total assets 6,930,119 6,766,407

Finance Subsidiaries Cash and cash equivalents 19,207 26,662 Finance subsidiaries–short-term receivables, net 1,112,984 1,136,791 Finance subsidiaries–long-term receivables, net 2,362,813 2,356,090 Net property on operating leases 1,308,147 1,352,863 Other assets 738,637 699,746 Total assets 5,541,788 5,572,152 Reconciling items (842,792) (767,685) Total assets ¥11,629,115 ¥11,570,874

Liabilities and Equity Non-financial services businesses Current liabilities: ¥ 1,736,752 ¥ 1,678,655 Short-term debt 211,325 212,428 Current portion of long-term debt 24,795 45,301 Trade payables 833,326 727,607 Accrued expenses 457,146 463,624 Other current liabilities 210,160 229,695 Long-term debt, excluding current portion 174,197 142,108 Other liabilities 1,024,017 880,778 Total liabilities 2,934,966 2,701,541

Finance Subsidiaries Short-term debt 1,385,032 1,369,485 Current portion of long-term debt 703,434 928,944 Accrued expenses 125,788 98,604 Long-term debt, excluding current portion 2,155,243 1,909,549 Other liabilities 488,970 536,161 Total liabilities 4,858,467 4,842,743 Reconciling items (620,748) (556,322) Total liabilities 7,172,685 6,987,962 Honda Motor Co., Ltd. shareholders’ equity 4,328,640 4,449,975 Noncontrolling interests 127,790 132,937 Total equity 4,456,430 4,582,912 Total liabilities and equity ¥11,629,115 ¥11,570,874

70 Consolidated Statements of Cash Flows Divided into Non-Financial Services Businesses and Finance Subsidiaries

Yen (millions) 2010 2011

Non-financial Non-financial services Finance Reconciling services Finance Reconciling Years ended March 31, 2010 and 2011 businesses subsidiaries items Consolidated businesses subsidiaries items Consolidated Cash flows from operating activities: Net income ¥ 176,370 ¥ 106,241 ¥ — ¥ 282,611 ¥ 456,181 ¥107,296 ¥ — ¥ 563,477 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 399,221 230,453 — 629,674 349,834 213,805 — 563,639 Deferred income taxes 20,622 35,984 — 56,606 28,691 101,489 — 130,180 Equity in income of affiliates (93,282) — — (93,282) (139,756) — — (139,756) Dividends from affiliates 140,901 — — 140,901 98,182 — — 98,182 Gain on sales of investments in affiliates — — — — (46,756) — — (46,756) Impairment loss on investments in securities 603 — — 603 2,133 — — 2,133 Damaged and impairment loss on long-lived assets and goodwill 548 3,312 — 3,860 16,833 835 — 17,668 Loss (gain) on derivative instruments, net (6,683) (31,070) — (37,753) 670 (8,458) — (7,788) Decrease (increase) in trade accounts and notes receivable (67,982) 63,763 (2,691) (6,910) 26,837 12,413 (550) 38,700 Decrease (increase) in inventories 352,994 — — 352,994 (33,676) — — (33,676) Increase (decrease) in trade accounts and notes payable 153,440 — (2,095) 151,345 (50,618) — (4,713) (55,331) Other, net 22,892 28,393 12,278 63,563 (73,797) 13,342 620 (59,835) Net cash provided by (used in) operating activities 1,099,644 437,076 7,492 1,544,212 634,758 440,722 (4,643) 1,070,837 Cash flows from investing activities: Decrease (increase) in investments and advances 106,565 (5,878) (121,852) (21,165) (41,730) 4,951 16,865 (19,914) Proceeds from sales of investments in affiliates — — — — 71,073 — — 71,073 Capital expenditures (389,747) (2,315) — (392,062) (316,472) (2,071) — (318,543) Proceeds from sales of property, plant and equipment 24,132 340 — 24,472 24,089 636 — 24,725 Decrease (increase) in finance subsidiaries–receivables — 87,571 4,350 91,921 — (90,859) (7,717) (98,576) Purchase of operating lease assets — (544,027) — (544,027) — (798,420) — (798,420) Proceeds from sales of operating lease assets — 245,110 — 245,110 — 408,265 — 408,265 Net cash used in investing activities (259,050) (219,199) (117,502) (595,751) (263,040) (477,498) 9,148 (731,390) Cash flows from financing activities: Increase (decrease) in short-term debt, net (458,642) (304,264) 113,265 (649,641) 11,270 107,495 (5,096) 113,669 Proceeds from long-term debt 115,120 1,023,804 (6,702) 1,132,222 18,174 786,399 (5,053) 799,520 Repayment of long-term debt (25,285) (941,995) 3,447 (963,833) (27,539) (848,511) 5,644 (870,406) Dividends paid (61,696) — — (61,696) (92,170) — — (92,170) Dividends paid to noncontrolling interests (16,278) — — (16,278) (16,232) — — (16,232) Sales (purchase) of treasury stock, net (18) — — (18) (34,797) — — (34,797) Net cash provided by (used in) financing activities (446,799) (222,455) 110,010 (559,244) (141,294) 45,383 (4,505) (100,416) Effect of exchange rate changes on cash and cash equivalents 38,786 1,530 — 40,316 (78,757) (1,152) — (79,909) Net change in cash and cash equivalents 432,581 (3,048) — 429,533 151,667 7,455 — 159,122 Cash and cash equivalents at beginning of period 668,114 22,255 — 690,369 1,100,695 19,207 — 1,119,902 Cash and cash equivalents at end of period ¥1,100,695 ¥ 19,207 ¥ — ¥1,119,902 ¥1,252,362 ¥ 26,662 ¥ — ¥1,279,024 Notes: 1. Non-financial services businesses lend to finance subsidiaries. These cash flows are included in the decrease (increase) in investments and advances, increase (decrease) in short-term debt, proceeds from long-term debt, and repayment of long-term debt. The amount of the loans to finance subsidiaries is a ¥121,852 million decrease for the fiscal year ended March 31, 2010, and a ¥16,865 million increase for the fiscal year ended March 31, 2011, respectively. 2. Decrease (increase) in trade accounts and notes receivable for finance subsidiaries is due to the reclassification of finance subsidiaries–receivables which relate to sales of inventory in the unaudited consolidated statements of cash flows presented above.

71 Financial Summary

Honda Motor Co., Ltd. and Subsidiaries Yen U.S. dollars Years ended or at March 31 (millions) (millions) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2011 Sales, income, and dividends Net sales and other operating revenue ¥6,463,830 ¥7,362,438 ¥7,971,499 ¥8,162,600 ¥8,650,105 ¥ 9,907,996 ¥11,087,140 ¥12,002,834 ¥10,011,241 ¥ 8,579,174 ¥ 8,936,867 $107,479 Operating income 401,438 661,202 724,527 600,144 630,920 868,905 851,879 953,109 189,643 363,775 569,775 6,852 Income before income taxes and equity in income of affiliates 388,419 555,854 619,413 653,680 668,364 829,904 792,868 895,841 161,734 336,198 630,548 7,583 Income taxes 178,439 231,150 245,065 252,740 266,665 317,189 283,846 387,436 109,835 146,869 206,827 2,487 Equity in income of affiliates 25,704 42,515 61,972 75,151 96,057 99,605 103,417 118,942 99,034 93,282 139,756 1,681 Net income attributable to noncontrolling interests (3,443) (4,512) (9,658) (11,753) (11,559) (15,287) (20,117) (27,308) (13,928) (14,211) (29,389) (354) Net income attributable to Honda Motor Co., Ltd. 232,241 362,707 426,662 464,338 486,197 597,033 592,322 600,039 137,005 268,400 534,088 6,423 As percentage of sales 3.6% 4.9% 5.4% 5.7% 5.6% 6.0% 5.3% 5.0% 1.4% 3.1% 6.0% Cash dividends paid during the period 22,412 24,360 30,176 33,541 47,797 71,061 140,482 152,590 139,724 61,696 92,170 1,108 Research and development 352,829 395,176 436,863 448,967 467,754 510,385 551,847 587,959 563,197 463,354 487,591 5,864 Interest expense 21,400 16,769 12,207 10,194 11,655 11,902 12,912 16,623 22,543 12,552 8,474 102

Assets, long-term debt, and shareholders’ equity Total assets ¥5,719,020 ¥7,064,787 ¥7,821,403 ¥8,380,549 ¥9,368,236 ¥10,631,400 ¥12,036,500 ¥12,615,543 ¥11,818,917 ¥11,629,115 ¥11,570,874 $139,157 Long-term debt 368,173 716,614 1,140,182 1,394,612 1,559,500 1,879,000 1,905,743 1,836,652 1,932,637 2,313,035 2,043,240 24,573 Total Honda Motor Co., Ltd. shareholders’ equity 2,230,291 2,573,941 2,629,720 2,874,400 3,289,294 4,125,750 4,488,825 4,550,479 4,007,288 4,328,640 4,449,975 53,517 Capital expenditures (excluding purchase of operating lease assets) 285,687 303,424 316,991 287,741 373,980 457,841 627,066 654,030 633,913 348,981 326,620 3,928 Purchase of operating lease assets 366,795 839,261 668,128 544,027 798,420 9,602 Depreciation (excluding property on operating leases) 170,342 194,944 220,874 213,445 225,752 262,225 361,747 417,393 441,868 401,743 351,496 4,227 Depreciation of property on operating leases 9,741 101,032 195,776 227,931 212,143 2,551

Yen U.S. dollars

Per common share Net income attributable to Honda Motor Co., Ltd.: Basic ¥ 119.17 ¥ 186.11 ¥ 219.71 ¥ 243.45 ¥ 260.34 ¥ 324.33 ¥ 324.62 ¥ 330.54 ¥ 75.50 ¥ 147.91 ¥ 295.67 $ 3.56 Diluted 119.17 186.11 219.71 243.45 260.34 324.33 324.62 330.54 75.50 147.91 295.67 3.56 Cash dividends paid during the period 11.5 12.5 15.5 17.5 25.5 38.5 77 84 77 34 51 0.61 Honda Motor Co., Ltd. shareholders’ equity 1,144.43 1,320.77 1,367.34 1,527.45 1,778.24 2,259.26 2,463.69 2,507.79 2,208.35 2,385.45 2,469.05 29.69

Yen U.S. dollars (millions) (millions)

Sales progress Sales amounts:* Japan ¥1,740,340 ¥1,868,746 ¥1,748,706 ¥1,628,493 ¥1,699,205 ¥ 1,694,044 ¥ 1,681,190 ¥ 1,585,777 ¥ 1,446,541 ¥ 1,577,318 ¥ 1,503,842 $ 18,086 27% 25% 22% 20% 20% 17% 15% 13% 14% 18% 17% Overseas 4,723,490 5,493,692 6,222,793 6,534,107 6,950,900 8,213,952 9,405,950 10,417,057 8,564,700 7,001,856 7,433,025 89,393 73% 75% 78% 80% 80% 83% 85% 87% 86% 82% 83% Total ¥6,463,830 ¥7,362,438 ¥7,971,499 ¥8,162,600 ¥8,650,105 ¥ 9,907,996 ¥11,087,140 ¥12,002,834 ¥10,011,241 ¥ 8,579,174 ¥ 8,936,867 $107,479 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

Thousands

Unit sales: Motorcycles 5,118 6,095 8,080 9,206 10,482 10,271 10,369 9,320 10,114 9,639 11,445 Automobiles 2,580 2,666 2,888 2,983 3,242 3,391 3,652 3,925 3,517 3,392 3,512 Power Products 3,884 3,926 4,584 5,047 5,300 5,876 6,421 6,057 5,187 4,744 5,509

Number of employees 114,300 120,600 126,900 131,600 137,827 144,785 167,231 178,960 181,876 176,815 179,060

Exchange rate (yen amounts per U.S. dollar) Rates for the period-end ¥ 124 ¥ 133 ¥ 120 ¥ 106 ¥ 107 ¥ 117 ¥ 118 ¥ 100 ¥ 98 ¥ 93 ¥ 83 Average rates for the period 111 125 122 113 108 113 117 114 101 93 86

*The geographic breakdown of sales amounts is based on the location of customers.

72 Yen U.S. dollars (millions) (millions)

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2011 Sales, income, and dividends Net sales and other operating revenue ¥6,463,830 ¥7,362,438 ¥7,971,499 ¥8,162,600 ¥8,650,105 ¥ 9,907,996 ¥11,087,140 ¥12,002,834 ¥10,011,241 ¥ 8,579,174 ¥ 8,936,867 $107,479 Operating income 401,438 661,202 724,527 600,144 630,920 868,905 851,879 953,109 189,643 363,775 569,775 6,852 Income before income taxes and equity in income of affiliates 388,419 555,854 619,413 653,680 668,364 829,904 792,868 895,841 161,734 336,198 630,548 7,583 Income taxes 178,439 231,150 245,065 252,740 266,665 317,189 283,846 387,436 109,835 146,869 206,827 2,487 Equity in income of affiliates 25,704 42,515 61,972 75,151 96,057 99,605 103,417 118,942 99,034 93,282 139,756 1,681 Net income attributable to noncontrolling interests (3,443) (4,512) (9,658) (11,753) (11,559) (15,287) (20,117) (27,308) (13,928) (14,211) (29,389) (354) Net income attributable to Honda Motor Co., Ltd. 232,241 362,707 426,662 464,338 486,197 597,033 592,322 600,039 137,005 268,400 534,088 6,423 As percentage of sales 3.6% 4.9% 5.4% 5.7% 5.6% 6.0% 5.3% 5.0% 1.4% 3.1% 6.0% Cash dividends paid during the period 22,412 24,360 30,176 33,541 47,797 71,061 140,482 152,590 139,724 61,696 92,170 1,108 Research and development 352,829 395,176 436,863 448,967 467,754 510,385 551,847 587,959 563,197 463,354 487,591 5,864 Interest expense 21,400 16,769 12,207 10,194 11,655 11,902 12,912 16,623 22,543 12,552 8,474 102

Yen U.S. dollars

Yen U.S. dollars (millions) (millions)

Thousands

Number of employees 114,300 120,600 126,900 131,600 137,827 144,785 167,231 178,960 181,876 176,815 179,060

*The geographic breakdown of sales amounts is based on the location of customers.

73 Selected Quarterly Financial Data

Yen (millions except per share amounts) Year ended March 31, 2010 Year ended March 31, 2011 I II III IV I II III IV Net sales and other operating revenue ¥2,002,212 ¥2,056,655 ¥2,240,740 ¥2,279,567 ¥2,361,463 ¥2,251,911 ¥2,110,414 ¥2,213,079 Operating income 25,164 65,543 176,971 96,097 234,443 163,473 125,653 46,206 Income before income taxes and equity in income of affiliates 5,458 66,140 171,013 93,587 256,149 166,204 131,580 76,615 Net income attributable to Honda Motor Co., Ltd. 7,560 54,037 134,627 72,176 272,487 135,929 81,118 44,554 Basic net income attributable to Honda Motor Co., Ltd. ¥4.17 ¥29.78 ¥74.19 ¥39.78 ¥150.27 ¥75.24 ¥45.01 ¥24.72 Tokyo Stock Exchange: (TSE) (in yen) High ¥3,070 ¥3,230 ¥3,170 ¥3,410 ¥3,405 ¥3,065 ¥3,315 ¥3,745 Low 2,390 2,300 2,590 2,951 2,570 2,470 2,713 2,820 New York Stock Exchange: (NYSE) (in U.S. dollars) High $31.00 $32.99 $34.52 $37.23 $36.16 $35.89 $39.69 $44.54 Low 24.83 25.00 28.82 33.27 28.33 28.43 33.82 36.51

74 Investor Information

75 Investor Information

Honda Motor Co., Ltd.