American Honda Finance Corporation (AHFC) is a California corporation that was incorporated on February 6, 1980. Unless otherwise indicated by the context, all references to the “Company”, “we”, “us”, and “our” in this report include AHFC and its consolidated subsidiaries, and references to “AHFC” refer solely to American Honda Finance Corporation (excluding its subsidiaries). AHFC is a wholly-owned subsidiary of American Honda Motor Co. Inc. (AHM). Honda Canada Finance Inc. (HCFI) is a majority-owned subsidiary of AHFC. Noncontrolling interest in HCFI is held by Honda Canada Inc. (HCI), an affiliate of AHFC. AHM is a wholly-owned subsidiary and HCI is an indirect wholly-owned subsidiary of Honda Motor Co. Ltd. (HMC). AHM and HCI are the sole authorized distributors of Honda and Acura products including motor vehicles, parts, and accessories in the United States and Canada. AHFC’s principal executive offices are located at 20800 Madrona Avenue, Torrance, California 90503. We provide various forms of financing in the United States and Canada to purchasers and lessees of Honda and Acura products and authorized independent dealers of Honda and Acura products. Our primary focus, in collaboration with AHM and HCI, is to provide support for the sale of Honda and Acura products and maintain customer and dealer satisfaction and loyalty. Our business is substantially dependent upon the sale of those Honda and Acura products in the United States and Canada and the percentage of those sales financed by us.
Company profile
Employees
Incorporated
Location
Fiscal year end
Industry (SIC)
SEC CIK
Calendar
11 Aug 22
18 Aug 22
31 Mar 23
Financial summary
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| Cash burn rate (est.) | Burn method: Change in cash | Burn method: Operating income | Burn method: FCF (opex + capex) | Last Q | Avg 4Q | Last Q | Avg 4Q | Last Q | Avg 4Q |
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| Cash on hand (at last report) | 2.9B | 2.9B | 2.9B | 2.9B | 2.9B | 2.9B |
| Cash burn (monthly) | 24.67M | (no burn) | (no burn) | (no burn) | (no burn) | (no burn) |
| Cash used (since last report) | 40.63M | n/a | n/a | n/a | n/a | n/a |
| Cash remaining | 2.86B | n/a | n/a | n/a | n/a | n/a |
| Runway (months of cash) | 115.8 | n/a | n/a | n/a | n/a | n/a |
Financial report summary
?Risks
- Our results of operations, cash flows, and financial condition are substantially dependent upon HMC and the sale of Honda and Acura products and any decline in the financial condition of HMC or the sales of Honda and Acura products could have a materially adverse impact on our financial condition, cash flows, and results of operations.
- Because our operations are heavily dependent on retail sales of motor vehicles and other retail products, a decline in general business and economic conditions can have a significant adverse impact on our results of operations, cash flows, and financial condition.
- If we are unable to compete successfully or if competition continues to increase in the businesses in which we operate, our results of operations, cash flows, and financial condition could be materially and adversely affected.
- We are exposed to residual value risk on the vehicles we lease.
- Vehicle recalls and other announcements may impact our business
- Adverse economic conditions or changes in laws in states or provinces in which we have customer concentrations may negatively affect our results of operations, cash flows, and financial condition.
- Our results of operations, cash flows, and financial condition may be adversely affected because of currency risk.
- We need substantial capital to finance our operations and a disruption in our funding sources and access to the capital markets would have an adverse effect on our results of operations, cash flows, and financial condition.
- Fluctuations in interest rates could have an adverse impact on our results of operations, cash flows, and financial condition.
- Our borrowing costs and access to the debt capital markets depend significantly on our credit ratings, the credit ratings of HMC and the Keep Well Agreements.
- We are subject to consumer and dealer credit risk, which could adversely impact our results of operations, cash flows, and financial condition.
- We are required to apply significant judgments and assumptions in the preparation of our financial statements, and actual results may vary from those assumed in our judgments and assumptions.
- The failure or commercial soundness of our counterparties and other financial institutions may have an adverse effect on our results of operations, cash flows, or financial condition.
- Our results of operations may be adversely affected by the rate of prepayment of our financing and leasing contracts.
- Our defined benefit plan costs and those of AHM and HCI may affect our financial condition, cash flows, and results of operations.
- Changes in laws and regulations, or the application thereof, may adversely affect our business, results of operations, cash flows, and financial condition.
- Financial or consumer regulations may adversely affect our business, results of operations, cash flows and financial condition.
- A failure or interruption in our operations could adversely affect our results of operations and financial condition.
- A security breach or a cyber attack may adversely affect our business, results of operations and financial condition.
Management Discussion
- Supply chain disruptions continue to have a negative impact on the production of new vehicles, dealer inventory levels, new vehicle sales, and ultimately our consumer financing acquisition volumes. Given the limited supply of new vehicles, incentive programs supporting the sale of new vehicles were reduced, which also had a negative impact on our acquisition volumes by lowering our penetration rates. Lower acquisition volumes have resulted in declines in our outstanding consumer financing asset balances since the second half of fiscal year 2022, along with declines in our funding needs and outstanding debt balances.
- Our consumer financing assets continue to perform well and charge-offs remain below historical levels. However, the trend in delinquencies has increased slightly over the past few quarters which may be attributable to the negative effects of inflationary pressures, rising interest rates, and other factors on consumers’ ability to perform on their obligations. Used vehicle prices remain strong due to the limited supply of new vehicles, with return rates on leased vehicles remaining at historically low levels. In addition, the rise in interest rates has increased the returns on more recently acquired financing assets and funding costs.
- (1)Average outstanding balances and units based on month end amounts during respective periods. Effective yields and interest rates based on average outstanding month end balances. Average monthly rental income and depreciation based on average outstanding month end units.
Content analysis
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New words:
Alternative, Board, difficulty, downside, enhance, experiencing, inflationary, macroeconomic, notably, peak, prospectively, short, slight, spring, trend, upside, worse
Removed:
administration, advantage, amending, anticipated, assumed, asymmetric, automotive, beginning, Civil, clarifying, corporate, declined, delinquency, Department, determination, discussed, DOJ, existing, fall, foreclosure, impaired, improve, industry, Investigative, Justice, leasing, longer, minimum, model, October, Operation, paying, periodically, predecessor, proportionate, relating, Relief, removing, represented, revaluation, simplify, Simplifying, specifically, Topic, undiscounted, varying, VSC, waived
Financial reports
Current reports
8-K
Other Events
11 Aug 22
8-K
Other Events
25 Mar 22
8-K
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25 Feb 22
8-K
Amendments to the Registrant's Code of Ethics, or Waiver of a Provision of the Code of Ethics
5 Aug 21
8-K
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17 Mar 21
8-K
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1 Mar 21
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14 Apr 20
8-K
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23 Mar 20
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8 Aug 19
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