As filed with the Securities and Exchange Commission on June 24, 2014

UNITED STATESSECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 20-F(Mark One)‘REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT
OF 1934È

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934‘

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934‘

SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934

OR
For the fiscal year ended: March 31, 2014
OR
OR

Commission file number: 001-14948

TOYOTA (ExactJIDOSHA
KABUSHIKI KAISHAName of Registrant as Specified in its Charter)
TOYOTA
MOTOR CORPORATION(Translation of Registrant’s Name into English)
Japan(Jurisdiction of Incorporation or Organization)

1 Toyota-cho, Toyota City
Aichi Prefecture 471-8571
Japan+81 565 28-2121(Address of Principal Executive Offices)
Hiroaki Shimizu
Telephone number: +81 565 28-2121
Facsimile number: +81 565 23-5800
Address: 1 Toyota-cho, Toyota City, Aichi Prefecture 471-8571, Japan(Name, telephone, e-mail and/or facsimile number and address of registrant’s contact person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of Each Class:Name of Each Exchange on Which Registered:
American Depositary Shares*
The New York Stock Exchange
Common Stock*** American Depositary Receipts evidence American Depositary Shares, each American Depositary Share representing two shares of the registrant’s Common Stock.
** No par value. Not for trading, but only in connection with the registration of American Depositary Shares, pursuant to the requirements of the U.S. Securities andExchange Commission.

Securities registered or to be registered pursuant to Section 12(g) of the Act:
None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by theannual report: 3,169,766,019 Shares of Common Stock (including 83,412,971 Shares of Common Stock in the form of American Depositary Shares)
as of March 31, 2014
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act:Yes È No ‘
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934:
Yes ‘ No È
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days:Yes È No ‘
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data Filerequired to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files):Yes È No ‘
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated
filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer È
Accelerated filer ‘
Non-accelerated filer ‘
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP È
International Financial Reporting Standards as issued by the International Accounting Standards Board ‘
Other ‘If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected tofollow:
Item 17 ‘ Item 18 ‘
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the ExchangeAct):Yes ‘ No ÈTABLE OF CONTENTSITEM 1.

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS . . . . . . . . . .

1

ITEM 2.

OFFER STATISTICS AND EXPECTED TIMETABLE . . . . . . . . . . . . . . . . . . . . . . . . . . .

1

ITEM 3.

KEY INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1

3.A
3.B
3.C
3.D

SELECTED FINANCIAL DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CAPITALIZATION AND INDEBTEDNESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
REASONS FOR THE OFFER AND USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . .
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1
4
4
4

ITEM 4.

INFORMATION ON THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8

4.A
4.B
4.C
4.D

HISTORY AND DEVELOPMENT OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . .
BUSINESS OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ORGANIZATIONAL STRUCTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PROPERTY, PLANTS AND EQUIPMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8
9
53
54

ITEM 4A.

UNRESOLVED STAFF COMMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

55

ITEM 5.

OPERATING AND FINANCIAL REVIEW AND PROSPECTS . . . . . . . . . . . . . . . . . . . .

55

5.A
5.B
5.C
5.D
5.E
5.F
5.G

OPERATING RESULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LIQUIDITY AND CAPITAL RESOURCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES . . . . . . . . . . . . . . . . .
TREND INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
OFF-BALANCE SHEET ARRANGEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS . . . . . . . . . . . . . . . . .
SAFE HARBOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

55
86
90
93
93
94
95

ITEM 6.

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES . . . . . . . . . . . . . . . . . . . .

95

6.A
6.B
6.C
6.D
6.E

DIRECTORS AND SENIOR MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BOARD PRACTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EMPLOYEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SHARE OWNERSHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

95
103
104
105
105

ITEM 7.

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS . . . . . . . . . . . .

106

7.A
7.B
7.C

MAJOR SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
RELATED PARTY TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
INTERESTS OF EXPERTS AND COUNSEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

106
107
108

ITEM 8.

FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

108

8.A
8.B

CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION . . . . .
SIGNIFICANT CHANGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

108
108

ITEM 9.

THE OFFER AND LISTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

109

9.A
9.B
9.C
9.D
9.E
9.F

LISTING DETAILS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MARKETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SELLING SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DILUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EXPENSES OF THE ISSUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

109
109
109
110
110
110

ITEM 10.

ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

110

10.A
10.B
10.C
10.D

SHARE CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MEMORANDUM AND ARTICLES OF ASSOCIATION . . . . . . . . . . . . . . . . . . . . . . . . .
MATERIAL CONTRACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EXCHANGE CONTROLS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

110
110
116
116

10.E
10.F
10.G
10.H
10.I

TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DIVIDENDS AND PAYING AGENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
STATEMENT BY EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DOCUMENTS ON DISPLAY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SUBSIDIARY INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

117
123
123
123
124

ITEM 11.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK . . .

124

ITEM 12.

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES . . . . . . . . . . .

125

12.A
12.B
12.C
12.D

DEBT SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
WARRANTS AND RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
OTHER SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
AMERICAN DEPOSITARY SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

125
125
125
126

ITEM 13.

DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES . . . . . . . . . . . . . . . .

127

ITEM 14.

MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND
USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

127

ITEM 15.

CONTROLS AND PROCEDURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

127

ITEM 16.

[RESERVED] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

128

ITEM 16A.

AUDIT COMMITTEE FINANCIAL EXPERT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

128

ITEM 16B.

CODE OF ETHICS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

128

ITEM 16C.

PRINCIPAL ACCOUNTANT FEES AND SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . .

129

ITEM 16D.

EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES . . .

130

ITEM 16E.

PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
PURCHASERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

130

ITEM 16F.

CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT . . . . . . . . . . . . . . . . . . .

131

ITEM 16G.

CORPORATE GOVERNANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

131

ITEM 16H.

MINE SAFETY DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

133

ITEM 17.

FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

134

ITEM 18.

FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

134

ITEM 19.

EXHIBITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

135

As used in this annual report, the term “fiscal” preceding a year means the twelve-month period ended
March 31 of the year referred to. All other references to years refer to the applicable calendar year, unless thecontext otherwise requires. As used herein, the term “Toyota” refers to Toyota Motor Corporation and its
consolidated subsidiaries as a group, unless the context otherwise indicates.
In parts of this annual report, amounts reported in Japanese yen have been translated into U.S. dollars for theconvenience of readers. Unless otherwise noted, the rate used for this translation was ¥102.92 = $1.00. This was
the approximate exchange rate in Japan on March 31, 2014.
CAUTIONARY STATEMENT WITH RESPECT TO FORWARD-LOOKING STATEMENTS
Written forward-looking statements may appear in documents filed with the Securities and Exchange
Commission, or the SEC, including this annual report, documents incorporated by reference, reports toshareholders and other communications.
The U.S. Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking
information to encourage companies to provide prospective information about themselves without fear of
litigation so long as the information is identified as forward looking and is accompanied by meaningful
cautionary statements identifying important factors that could cause actual results to differ materially from thoseprojected in the information. Toyota relies on this safe harbor in making forward-looking statements.
Forward-looking statements appear in a number of places in this annual report and include statements
regarding Toyota’s current intent, belief, targets or expectations or those of its management. In many, but not allcases, words such as “aim”, “anticipate”, “believe”, “estimate”, “expect”, “hope”, “intend”, “may”, “plan”,“predict”, “probability”, “risk”, “should”, “will”, “would”, and similar expressions, are used as they relate to
Toyota or its management, to identify forward-looking statements. These statements reflect Toyota’s current
views with respect to future events and are subject to risks, uncertainties and assumptions. Should one or more ofthese risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may varymaterially from those which are anticipated, aimed at, believed, estimated, expected, intended or planned.
Forward-looking statements are not guarantees of future performance and involve risks and uncertainties.
Actual results may differ from those in forward-looking statements as a result of various factors. Importantfactors that could cause actual results to differ materially from estimates or forecasts contained in the forwardlooking statements are identified in “Risk Factors” and elsewhere in this annual report, and include, among
others:(i) changes in economic conditions, market demand, and the competitive environment affecting theautomotive markets in Japan, North America, Europe, Asia and other markets in which Toyota operates;(ii) fluctuations in currency exchange rates, particularly with respect to the value of the Japanese yen,
the U.S. dollar, the euro, the Australian dollar, the Russian ruble, the Canadian dollar and the British pound,and interest rates fluctuations;(iii) changes in funding environment in financial markets and increased competition in the financial
services industry;(iv) Toyota’s ability to market and distribute effectively;(v) Toyota’s ability to realize production efficiencies and to implement capital expenditures at thelevels and times planned by management;(vi) changes in the laws, regulations and government policies in the markets in which Toyota operates
that affect Toyota’s automotive operations, particularly laws, regulations and government policies relating
to vehicle safety including remedial measures such as recalls, trade, environmental protection, vehicle
emissions and vehicle fuel economy, as well as changes in laws, regulations and government policies that
affect Toyota’s other operations, including the outcome of current and future litigation and other legal
proceedings, government proceedings and investigations;

(vii) political and economic instability in the markets in which Toyota operates;(viii) Toyota’s ability to timely develop and achieve market acceptance of new products that meetcustomer demand;(ix) any damage to Toyota’s brand image;(x) Toyota’s reliance on various suppliers for the provision of supplies;(xi) increases in prices of raw materials;(xii) Toyota’s reliance on various digital and information technologies;(xiii) fuel shortages or interruptions in electricity, transportation systems, labor strikes, work stoppages
or other interruptions to, or difficulties in, the employment of labor in the major markets where Toyota
purchases materials, components and supplies for the production of its products or where its products areproduced, distributed or sold; and(xiv) the impact of natural calamities including the negative effect on Toyota’s vehicle production andsales.

PART IITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not applicable.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not applicable.
ITEM 3. KEY INFORMATION
3.A SELECTED FINANCIAL DATA
You should read the U.S. GAAP selected consolidated financial information presented below together with“Operating and Financial Review and Prospects” and Toyota’s consolidated financial statements contained in thisannual report.
U.S. GAAP Selected Financial Data
The following selected financial data have been derived from Toyota’s consolidated financial statements.
These financial statements were prepared in accordance with U.S. GAAP.
2010

Consolidated Statement of Income Data:
Automotive:
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income (loss) . . . . . . . . . . . . . . . . . . . . .
Financial Services:
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . .
All Other:
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income (loss) . . . . . . . . . . . . . . . . . . . . .
Elimination of intersegment:
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income (loss) . . . . . . . . . . . . . . . . . . . . .
Total Company:
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes and equity in earnings
of affiliated companies . . . . . . . . . . . . . . . . . . . .
Net income attributable to Toyota Motor
Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to Toyota Motor Corporation
per share (yen):
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares used in computing net income attributable to
Toyota Motor Corporation per share, basic (inthousands) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares used in computing net income attributable to
Toyota Motor Corporation per share, diluted (inthousands) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Year Ended March 31,
2011
2012
2013
(Yen in millions, except share and per share data)

2014

17,197,428 17,337,320(86,370)
85,973

16,994,546
21,683

20,419,100
944,704

23,781,404
1,938,778

1,245,407
246,927

1,192,205
358,280

1,100,324
306,438

1,170,670
315,820

1,421,047
294,891

947,615(8,860)972,252
35,242

1,048,915
42,062

1,066,461
53,616

1,151,280
64,270(439,477)(4,181)(508,089)(11,216)(560,132)(14,556)(592,039)
6,748(661,820)(5,827)

18,950,973
147,516

18,993,688
468,279

18,583,653
355,627

22,064,192
1,320,888

25,691,911
2,292,112

291,468

563,290432,873

1,403,649

2,441,080

209,456

408,183

283,559

962,163

1,823,119

66.79
66.79

130.17130.16

90.21
90.20

303.82303.78575.30574.923,135,986

3,135,881

3,143,470

3,166,909

3,168,989

3,135,998

3,135,915

3,143,470

3,167,155

3,170,9111

Year Ended March 31,
2010
2011
2012
2013
2014
(Yen in millions, except per share and numbers of vehicles sold data)

Consolidated Balance Sheet Data (end of period):
Total Assets: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term debt, including current portion of long-term
debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt, less current portion . . . . . . . . . . . . . . . .
Toyota Motor Corporation shareholders’ equity . . . . . . .
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Data:
Dividends per share (yen) . . . . . . . . . . . . . . . . . . . . . . . .
Number of vehicles soldJapan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Worldwide total . . . . . . . . . . . . . . . . . . . . . . . .

30,349,287

29,818,166

30,650,965

35,483,317

41,437,473

5,497,997
7,015,409
10,359,723
397,050

5,951,836
6,449,220
10,332,371
397,050

5,963,269
6,042,277
10,550,261
397,050

6,793,956
7,337,824
12,148,035
397,050

7,780,483
8,546,910
14,469,148
397,050

45.0

50.0

50.0

90.0

165.0

2,162,418
2,097,374
858,390979,651
1,139,329

1,913,117
2,031,249
795,534
1,255,016
1,313,123

2,070,799
1,872,423
797,993
1,326,829
1,283,885

2,278,796
2,468,804
799,085
1,683,578
1,640,401

2,365,410
2,529,398
844,003
1,608,355
1,768,867

7,237,162

7,308,039

7,351,929

8,870,664

9,116,033* “Other” consists of Central and South America, Oceania, Africa and the Middle East, etc.

Dividend Information
Toyota normally pays dividends twice per year, including an interim dividend and a year-end dividend.
Although Toyota’s articles of incorporation provide that retained earnings can be distributed as dividends
pursuant to the resolution of its board of directors, Toyota’s board of directors recommends the payment of yearend dividends to shareholders and pledgees of record as of March 31 in each year. Year-end dividends areusually paid to the shareholders immediately following approval of the dividends at the general shareholders’meeting, normally around the middle of June of each year. In addition to these year-end dividends, Toyota may
pay interim dividends in the form of cash distributions from its distributable surplus to shareholders and pledgeesof record as of September 30 in each year by resolution of its board of directors. Toyota normally pays theinterim dividend in late November.
In addition, under the Companies Act of Japan (the “Companies Act”), dividends may be paid toshareholders and pledgees of record as of any record date, other than those specified above, as set forth inToyota’s articles of incorporation or as determined by its board of directors from time to time. Toyota’s articles
of incorporation also permit Toyota to pay dividends, in addition to interim dividends mentioned in the preceding
paragraph, by a resolution of its board of directors. Toyota has incorporated such a provision into its articles ofincorporation in order to enable a flexible capital policy. Under the Companies Act, dividends may be distributedin cash or (except in the case of interim dividends mentioned in the preceding paragraph) in kind, subject tolimitations on distributable surplus and to certain other conditions.

2The following table sets forth the dividends declared by Toyota for each of the periods shown. The periods
shown are the six months ended on that date. The U.S. dollar equivalents for the cash dividends shown are basedon the noon buying rate for Japanese yen on the last date of each period set forth below.
Cash Dividends per ShareYen
U.S. dollars

Period Ended

September 30, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March 31, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
September 30, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March 31, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
September 30, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March 31, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
September 30, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
September 30, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20.0
25.0
20.0
30.0
20.0
30.0
30.0
60.0
65.0
100.0

0.22
0.26
0.24
0.36
0.25
0.36
0.38
0.63
0.66
0.97

The payment and the amount of any future dividends are dependent on the amount of Toyota’s future
earnings, its financial condition and other factors, including statutory restrictions on the payment of dividends.
Toyota deems the benefit of its shareholders as one of its priority management policies, and it continues towork to improve its corporate structure to realize sustainable growth in order to enhance its corporate value.
Toyota will strive to continue to pay stable dividends aiming at a consolidated dividend payout ratio of 30%
while giving due consideration to factors such as business results for each term, investment plans and its cash
reserves. In order to successfully compete in this highly competitive industry, Toyota plans to utilize its internalfunds for the early commercialization of next-generation environment and safety technologies, giving priority tocustomer safety and reliability. Considering these factors, an annual dividend of 165 yen per share was paid forfiscal 2014, consisting of a year-end dividend of 100 yen per share and an interim dividend of 65 yen per share.
In fiscal 2014, Toyota did not repurchase its own shares, excluding shares constituting less than one unit thatwere purchased by Toyota upon request. Since Toyota began repurchasing shares in fiscal 1997, the cumulative
number of shares repurchased as of the end of March 2014 was 736.98 million shares at a total cost of¥2,868.8 billion. The following table shows the approximate number of shares repurchased and the approximate
cost of repurchase of those shares for each of the periods indicated:

Number of shares repurchased . . . . . .
Amount paid . . . . . . . . . . . . . . . . . . . .

2010

2011

Year Ended March 31,
2012

2013

2014

0
0

0
0

0
0

0
0

0
0

Toyota’s future share repurchases will be influenced by factors such as Toyota’s future earnings andfinancial position. For a further discussion of Toyota’s share repurchases, please see “Purchases of Equity
Securities by the Issuer and Affiliated Purchasers”.
Exchange Rates
In parts of this annual report, yen amounts have been translated into U.S. dollars for the convenience ofinvestors. Unless otherwise noted, the rate used for the translations was ¥102.92 = $1.00. This was theapproximate exchange rate in Japan on March 31, 2014.

3

The following table sets forth information regarding the noon buying rates for Japanese yen in New York
City as announced for customs purposes by the Federal Reserve Bank of New York expressed in Japanese yen
per $1.00 during the periods shown. At the end of May 2014, the noon buying rate was ¥101.77 = $1.00. The
average exchange rate for the periods shown is the average of the month-end rates during the period.
Fiscal Year Ended or Ending March 31,

2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 (through May 31, 2014) . . . . . . . . . . . . . . . . . . .

At End of Period

Average(of month-end rates)(¥ per $1.00)

High

Low

93.40
82.76
82.41
94.16
102.98101.77

92.49
85.00
78.86
83.26
100.46101.96100.71
94.68
85.26
96.16
105.25103.94

86.12
78.74
75.72
77.41
92.96
101.26

Month Ended

High
Low
(¥ per $1.00)

December 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
January 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
February 28, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
April 30, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
May 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

105.25104.87102.71103.38103.94102.34101.82102.20101.11101.36101.43101.26

Fluctuations in the exchange rate between the Japanese yen and the U.S. dollar will affect the dollar
equivalent of the price of the shares on the Japanese stock exchanges. As a result, exchange rate fluctuations arelikely to affect the market price of the American Depositary Shares (“ADSs”) on the New York Stock Exchange(“NYSE”). Toyota will declare any cash dividends on shares in Japanese yen. Exchange rate fluctuations will
also affect the U.S. dollar amounts received on conversion of cash dividends.
Exchange rate fluctuations can also materially affect Toyota’s reported operating results. In particular, astrengthening of the Japanese yen against the U.S. dollar can have a material adverse effect on Toyota’s reported
operating results. For a further discussion of the effects of currency rate fluctuations on Toyota’s operating
results, please see “Operating and Financial Review and Prospects — Operating Results — Overview —Currency Fluctuations”.
3.B CAPITALIZATION AND INDEBTEDNESS
Not applicable.
3.C REASONS FOR THE OFFER AND USE OF PROCEEDS
Not applicable.
3.D RISK FACTORS
Industry and Business Risks
The worldwide automotive market is highly competitive.
The worldwide automotive market is highly competitive. Toyota faces intense competition from automotive
manufacturers in the markets in which it operates. Although the global economy continues to recover gradually,
competition in the automotive industry has further intensified amidst difficult overall market conditions. In
addition, competition is likely to further intensify in light of further continuing globalization in the worldwide
4

automotive industry, possibly resulting in further industry reorganization. Factors affecting competition include
product quality and features, safety, reliability, fuel economy, the amount of time required for innovation anddevelopment, pricing, customer service and financing terms. Increased competition may lead to lower vehicle
unit sales, which may result in a further downward price pressure and adversely affect Toyota’s financial
condition and results of operations. Toyota’s ability to adequately respond to the recent rapid changes in theautomotive market and to maintain its competitiveness will be fundamental to its future success in existing andnew markets and to maintain its market share. There can be no assurances that Toyota will be able to compete
successfully in the future.
The worldwide automotive industry is highly volatile.
Each of the markets in which Toyota competes has been subject to considerable volatility in demand.
Demand for vehicles depends to a large extent on social, political and economic conditions in a given market andthe introduction of new vehicles and technologies. As Toyota’s revenues are derived from sales in markets
worldwide, economic conditions in such markets are particularly important to Toyota. In Japan, the economy
gradually recovered due to increasing personal consumption and last-minute demand spurred by the increase of
the consumption tax. In the United States, the economy has seen ongoing gradual recovery mainly due toincreasing personal consumption and the European economy has shown signs of recovery. Meanwhile, growth inemerging markets slowed down due to weakening currencies of emerging markets stemming from U.S. monetaryeasing beginning to be curtailed, increases in interest rates of emerging markets to protect the local currency, andpolitical instability in some nations. The shifts in demand for automobiles is continuing, and it is unclear how thissituation will transition in the future. Toyota’s financial condition and results of operations may be adversely
affected if the shifts in demand for automobiles continues or progresses further. Demand may also be affected byfactors directly impacting vehicle price or the cost of purchasing and operating vehicles such as sales andfinancing incentives, prices of raw materials and parts and components, cost of fuel and governmental
regulations (including tariffs, import regulation and other taxes). Volatility in demand may lead to lower vehicle
unit sales, which may result in downward price pressure and adversely affect Toyota’s financial condition andresults of operations.
Toyota’s future success depends on its ability to offer new innovative competitively priced products that meetcustomer demand on a timely basis.
Meeting customer demand by introducing attractive new vehicles and reducing the amount of time requiredfor product development are critical to automotive manufacturers. In particular, it is critical to meet customer
demand with respect to quality, safety and reliability. The timely introduction of new vehicle models, atcompetitive prices, meeting rapidly changing customer preferences and demand is more fundamental to Toyota’s
success than ever, as the automotive market is rapidly transforming in light of the changing global economy.
There is no assurance, however, that Toyota will adequately and appropriately respond to changing customer
preferences and demand with respect to quality, safety, reliability, styling and other features in a timely manner.
Even if Toyota succeeds in perceiving customer preferences and demand, there is no assurance that Toyota will
be capable of developing and manufacturing new, price competitive products in a timely manner with its
available technology, intellectual property, sources of raw materials and parts and components, and production
capacity, including cost reduction capacity. Further, there is no assurance that Toyota will be able to implement
capital expenditures at the level and times planned by management. Toyota’s inability to develop and offer
products that meet customers’ preferences and demand with respect to quality, safety, reliability, styling andother features in a timely manner could result in a lower market share and reduced sales volumes and margins,and may adversely affect Toyota’s financial condition and results of operations.
Toyota’s ability to market and distribute effectively is an integral part of Toyota’s successful sales.
Toyota’s success in the sale of vehicles depends on its ability to market and distribute effectively based on
distribution networks and sales techniques tailored to the needs of its customers. There is no assurance that5

Toyota will be able to develop sales techniques and distribution networks that effectively adapt to changing
customer preferences or changes in the regulatory environment in the major markets in which it operates.
Toyota’s inability to maintain well-developed sales techniques and distribution networks may result in decreased
sales and market share and may adversely affect its financial condition and results of operations.
Toyota’s success is significantly impacted by its ability to maintain and develop its brand image.
In the highly competitive automotive industry, it is critical to maintain and develop a brand image. In orderto maintain and develop a brand image, it is necessary to further increase customers’ confidence by providing
safe, high-quality products that meet customer preferences and demand. If Toyota is unable to effectively
maintain and develop its brand image as a result of its inability to provide safe, high-quality products or as aresult of the failure to promptly implement safety measures such as recalls when necessary, vehicle unit sales
and/or sale prices may decrease, and as a result revenues and profits may not increase as expected or may
decrease, adversely affecting its financial condition and results of operations.
Toyota relies on suppliers for the provision of certain supplies including parts, components and raw materials.
Toyota purchases supplies including parts, components and raw materials from a number of external
suppliers located around the world. For some supplies, Toyota relies on a single supplier or a limited number ofsuppliers, whose replacement with another supplier may be difficult. Inability to obtain supplies from a single orlimited source supplier may result in difficulty obtaining supplies and may restrict Toyota’s ability to produce
vehicles. Furthermore, even if Toyota were to rely on a large number of suppliers, first-tier suppliers with whom
Toyota directly transacts may in turn rely on a single second-tier supplier or limited second-tier suppliers.
Toyota’s ability to continue to obtain supplies from its suppliers in a timely and cost-effective manner is subject
to a number of factors, some of which are not within Toyota’s control. These factors include the ability of
Toyota’s suppliers to provide a continued source of supply, and Toyota’s ability to effectively compete andobtain competitive prices from suppliers. A loss of any single or limited source supplier or inability to obtainsupplies from suppliers in a timely and cost-effective manner could lead to increased costs or delays orsuspensions in Toyota’s production and deliveries, which could have an adverse effect on Toyota’s financial
condition and results of operations.
The worldwide financial services industry is highly competitive.
The worldwide financial services industry is highly competitive. Increased competition in automobile
financing may lead to decreased margins. A decline in Toyota’s vehicle unit sales, an increase in residual value
risk due to lower used vehicle price, an increase in the ratio of credit losses and increased funding costs arefactors which may impact Toyota’s financial services operations. If Toyota is unable to adequately respond to thechanges and competition in automobile financing, Toyota’s financial services operations may adversely affect its
financial condition and results of operations.
Toyota’s operations and vehicles rely on various digital and information technologies.
Toyota depends on various information technology networks and systems, some of which are managed bythird parties, to process, transmit and store electronic information, including sensitive data, and to manage or
support a variety of business processes and activities, including manufacturing, research and development,
supply chain management, sales and accounting. In addition, Toyota’s vehicles may rely on various digital andinformation technologies, including information service and driving assistance functions. Despite security
measures, Toyota’s digital and information technology networks and systems may be vulnerable to damage,disruptions or shutdowns due to attacks by hackers, computer viruses, breaches due to unauthorized use, errors or
malfeasance by employees and others who have or gain access to the networks and systems Toyota depends on,service failures or bankruptcy of third parties such as software development or cloud computing vendors, power
shortages and outages, and utility failures or other catastrophic events like natural disasters. Such incidents could6materially disrupt critical operations, disclose sensitive data, interfere with information services and driving
assistance functions in Toyota’s vehicles, and/or give rise to legal claims or proceedings, liability or regulatory
penalties under applicable laws, which could have an adverse effect on Toyota’s brand image and its financial
condition and results of operations.
Financial Market and Economic Risks
Toyota’s operations are subject to currency and interest rate fluctuations.
Toyota is sensitive to fluctuations in foreign currency exchange rates and is principally exposed tofluctuations in the value of the Japanese yen, the U.S. dollar and the euro and, to a lesser extent, the Australian
dollar, the Russian ruble, the Canadian dollar and the British pound. Toyota’s consolidated financial statements,
which are presented in Japanese yen, are affected by foreign currency exchange fluctuations through translation
risk, and changes in foreign currency exchange rates may also affect the price of products sold and materials
purchased by Toyota in foreign currencies through transaction risk. In particular, strengthening of the Japanese
yen against the U.S. dollar can have an adverse effect on Toyota’s operating results.
Toyota believes that its use of certain derivative financial instruments including foreign exchange forward
contracts and interest rate swaps and increased localized production of its products have reduced, but noteliminated, the effects of interest rate and foreign currency exchange rate fluctuations. Nonetheless, a negative
impact resulting from fluctuations in foreign currency exchange rates and changes in interest rates may adversely
affect Toyota’s financial condition and results of operations. For a further discussion of currency and interest rate
fluctuations and the use of derivative financial instruments, see “Operating and Financial Review and Prospects— Operating Results — Overview — Currency Fluctuations”, “Quantitative and Qualitative Disclosures About
Market Risk”, and notes 20 and 21 to Toyota’s consolidated financial statements.
High prices of raw materials and strong pressure on Toyota’s suppliers could negatively impact Toyota’s
profitability.
Increases in prices for raw materials that Toyota and Toyota’s suppliers use in manufacturing their products
or parts and components such as steel, precious metals, non-ferrous alloys including aluminum, and plastic parts,
may lead to higher production costs for parts and components. This could, in turn, negatively impact Toyota’s
future profitability because Toyota may not be able to pass all those costs on to its customers or require its
suppliers to absorb such costs.
The downturn in the financial markets could adversely affect Toyota’s ability to raise capital.
Should the world economy suddenly deteriorate, a number of financial institutions and investors will facedifficulties in providing capital to the financial markets at levels corresponding to their own financial capacity,
and, as a result, there is a risk that companies may not be able to raise capital under terms that they would expect
to receive with their creditworthiness. If Toyota is unable to raise the necessary capital under appropriate
conditions on a timely basis, Toyota’s financial condition and results of operations may be adversely affected.
Political, Regulatory, Legal and Other Risks
The automotive industry is subject to various governmental regulations.
The worldwide automotive industry is subject to various laws and governmental regulations including thoserelated to vehicle safety and environmental matters such as emission levels, fuel economy, noise and pollution. In
particular, automotive manufacturers such as Toyota are required to implement safety measures such as recallsfor vehicles that do not or may not comply with the safety standards of laws and governmental regulations. In
addition, Toyota may, in order to reassure its customers of the safety of Toyota’s vehicles, decide to voluntarily
implement recalls or other safety measures even if the vehicle complies with the safety standards of relevant laws
7

and governmental regulations. Many governments also impose tariffs and other trade barriers, taxes and levies, orenact price or exchange controls. Toyota has incurred, and expects to incur in the future, significant costs incomplying with these regulations. If Toyota launches products that result in safety measures such as recalls,
Toyota may incur various costs including significant costs for free repairs. Furthermore, new legislation orchanges in existing legislation may also subject Toyota to additional expenses in the future. If Toyota incurs
significant costs related to implementing safety measures or meeting laws and governmental regulations,Toyota’s financial condition and results of operations may be adversely affected.
Toyota may become subject to various legal proceedings.
As an automotive manufacturer, Toyota may become subject to legal proceedings in respect of various
issues, including product liability and infringement of intellectual property. Toyota may also be subject to legal
proceedings brought by its shareholders and governmental proceedings and investigations. Toyota is in factcurrently subject to a number of pending legal proceedings and government investigations. A negative
outcome in one or more of these pending legal proceedings could adversely affect Toyota’s financial condition
and results of operations. For a further discussion of governmental regulations, see “Information on the
Company — Business Overview — Governmental Regulation, Environmental and Safety Standards” and forlegal proceedings, please see “Information on the Company — Business Overview — Legal Proceedings”.
Toyota may be adversely affected by natural calamities, political and economic instability, fuel shortages orinterruptions in social infrastructure, wars, terrorism and labor strikes.
Toyota is subject to various risks associated with conducting business worldwide. These risks include
natural calamities; political and economic instability; fuel shortages; interruption in social infrastructure
including energy supply, transportation systems, gas, water, or communication systems resulting from natural
hazards or technological hazards; wars; terrorism; labor strikes and work stoppages. Should the major markets inwhich Toyota purchases materials, parts and components and supplies for the manufacture of Toyota products orin which Toyota’s products are produced, distributed or sold be affected by any of these events, it may result in
disruptions and delays in the operations of Toyota’s business. Should significant or prolonged disruptions ordelays related to Toyota’s business operations occur, it may adversely affect Toyota’s financial condition andresults of operations.
ITEM 4. INFORMATION ON THE COMPANY
4.A HISTORY AND DEVELOPMENT OF THE COMPANY
Toyota Motor Corporation is a limited liability, joint-stock company incorporated under the Commercial
Code of Japan and continues to exist under the Companies Act. Toyota commenced operations in 1933 as theautomobile division of Toyota Industries Corporation (formerly, Toyoda Automatic Loom Works, Ltd.). Toyota
became a separate company on August 28, 1937. In 1982, the Toyota Motor Company and Toyota Motor Sales
merged into one company, the Toyota Motor Corporation of today. As of March 31, 2014, Toyota operated
through 542 consolidated subsidiaries (including variable interest entities) and 203 affiliated companies, of which
54 companies were accounted for through the equity method.
See “— Business Overview — Capital Expenditures and Divestitures” for a description of Toyota’s
principal capital expenditures and divestitures between April 1, 2011 and March 31, 2014 and information
concerning Toyota’s principal capital expenditures and divestitures currently in progress.
Toyota’s principal executive offices are located at 1 Toyota-cho, Toyota City, Aichi Prefecture 471-8571,
Japan. Toyota’s telephone number in Japan is +81-565-28-2121.

8

4.B BUSINESS OVERVIEW
Toyota primarily conducts business in the automotive industry. Toyota also conducts business in financeand other industries. Toyota sold 9,116 thousand vehicles in fiscal 2014 on a consolidated basis. Toyota had net
revenues of ¥25,691.9 billion and net income attributable to Toyota Motor Corporation of ¥1,823.1 billion in
fiscal 2014.
Toyota’s business segments are automotive operations, financial services operations and all otheroperations. The following table sets forth Toyota’s sales to external customers in each of its business segments
for each of the past three fiscal years.
Yen in millions
Year Ended March 31,
2012
2013
2014

Automotive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16,964,378
1,071,737
547,538

20,378,762
1,150,042
535,388

23,733,855
1,379,267
578,789

Toyota’s automotive operations include the design, manufacture, assembly and sale of passenger cars,
minivans and commercial vehicles such as trucks and related parts and accessories. Toyota’s financial services
business consists primarily of providing financing to dealers and their customers for the purchase or lease of
Toyota vehicles. Toyota’s financial services also provide retail leasing through the purchase of lease contracts
originated by Toyota dealers. Related to Toyota’s automotive operations is its development of intelligent
transport systems (“ITS”). Toyota’s all other operations business segment includes the design and manufacture ofprefabricated housing, information technology related businesses including a web portal for automobile
information called GAZOO.com, and sales promotions for KDDI communication related products(predominantly the au brand).
Toyota sells its vehicles in approximately 170 countries and regions. Toyota’s primary markets for its
automobiles are Japan, North America, Europe and Asia. The following table sets forth Toyota’s sales to externalcustomers in each of its geographical markets for each of the past three fiscal years.
Yen in millions
Year Ended March 31,
2012
2013
2014

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,293,804
4,644,348
1,917,408
3,116,849
1,611,244

7,910,456
6,167,821
2,003,113
4,058,629
1,924,173

8,532,875
7,938,615
2,614,070
4,475,382
2,130,969* “Other” consists of Central and South America, Oceania, Africa and the Middle East.
During fiscal 2014, 26.0% of Toyota’s automobile unit sales on a consolidated basis were in Japan, 27.7%
were in North America, 9.3% were in Europe and 17.6% were in Asia. The remaining 19.4% of consolidated unit
sales were in other markets.
With regard to the series of product quality related issues that began in early 2010, in March 2010, Toyota
established a Special Committee for Global Quality to thoroughly investigate the cause of the product quality
issues and review all of Toyota’s processes, including design, production, sales, service, and human resource
development. Toyota believes it is making steady and solid improvements in these regards.
Building on the work of the Special Committee for Global Quality, each region is implementing
comprehensive improvements to the company’s operations and strengthening the company’s quality
improvement activities.
9

Further, in order to obtain objective third-party evaluation, in July 2010, Toyota obtained a reportconcerning Toyota’s quality-assurance review-and-improvement measures from the Union of Japanese Scientists
and Engineers and external experts recommended by the union. This report evaluated the preventative measures
undertaken by Toyota in response to the series of product quality related issues it experienced beginning in early
2010, such as strengthening analysis of customer information and human resource development, and indicatedplaces where these measures should be deepened in order to bring about further improvement. Toyota hasreceived the evaluation with humility, and is making efforts toward further improvements.
Through the quality control approach described above, Toyota and its officers and employees will unite to
do their best to make customer safety their first emphasis, ensure that thorough quality control is a constantelement of their work, strengthen quality control infrastructure and cultivate customers’ trust. For further details
concerning recalls and other safety measures, see “Operating and Financial Review and Prospects — Operating
Results — Results of Operations — Fiscal 2013 Compared with Fiscal 2012 — Operating Costs and Expenses”.
The Worldwide Automotive Market
Toyota estimates that annual worldwide vehicle sales totaled approximately 86 million units in 2013.
Automobile sales are affected by a number of factors including:•social, political and economic conditions,•introduction of new vehicles and technologies, and•costs incurred by customers to purchase and operate automobiles.

These factors can cause consumer demand to vary substantially from year to year in different geographic
markets and in individual categories of automobiles.
In fiscal 2014, the global economy experienced strengthening in developed countries including theUnited States and European countries, while growth in emerging markets slowed down due to weakening
currencies of emerging markets stemming from U.S. monetary easing beginning to be curtailed, increases ininterest rates of emerging markets to protect the local currency, and political instability in some nations. The
automotive industry was also impacted by this trend. In fiscal 2013, with respect to developed countries, markets
in the United States expanded. In addition, the prolonged downward pressure from the sovereign debt crisis andfiscal austerity measures has finally bottomed out in Europe. Further, in Japan, the market expanded as the
economy picked up due to monetary easing and fiscal policies, among other factors. In emerging markets, theexpansion of the Chinese market accelerated, reaching double-digit growth, but markets in other emerging
countries slowed from the speed of expansion seen until the prior year.
However, in the medium- to long-term, Toyota expects the automotive market to grow driven principally by
the growth in emerging markets. Global competition is expected to be severe, as competition in compact andlow-price vehicles intensifies, and technological development and development of new products become more
frequent with a heightened global awareness of the environment and more stringent fuel economy standards.
In 2013, China, North America, Europe, and Asia were the world’s largest automotive markets. The share ofeach market across the globe, which Toyota estimates based on the available automobile sales data in eachcountry and region information, was 26% for China, 22% for North America (20% excluding Mexico and Puerto
Rico), 21% for Europe, and 10% for Asia. In China, new vehicle sales increased to approximately 22.2 million
units. In North America, new vehicle sales increased to approximately 18.5 million units. In Europe, new vehicle
sales slightly decreased to approximately 18.0 million units. In Asia (including India but excluding Japan and
China), new vehicle unit sales remained generally unchanged at approximately 9.0 million units.

10The worldwide automotive industry is affected significantly by government regulations aimed at reducing
harmful effects on the environment, enhancing vehicle safety and improving fuel economy. These regulations
have added to the cost of manufacturing vehicles. Many governments also mandate local procurement of partsand components and impose tariffs and other trade barriers and price or exchange controls as a means of creating
jobs, protecting domestic producers or influencing their balance of payments. Changes in regulatory
requirements and other government-imposed restrictions can limit an automaker’s operations. These regulations
can also make it difficult to repatriate profits to an automaker’s home country.
The development of the worldwide automotive market includes the continuing globalization of automotive
operations. Manufacturers seek to achieve globalization by localizing the design and manufacture of automobiles
and their parts and components in the markets in which they are sold. By expanding production capabilities
beyond their home markets, automotive manufacturers are able to reduce their exposure to fluctuations in foreignexchange rates as well as to trade restrictions and tariffs.
Since 2000, various transactions have promoted consolidation within the global automotive industry. There
are various reasons behind these transactions including the need to respond to the excessive global capacity in the
production of automobiles, the need to reduce costs and improve efficiency by increasing the number of
automobiles produced using common vehicle platforms and by sharing research and development expenses forenvironmental and other technology, the desire to expand a company’s global presence through increased size
and the desire to expand into particular segments or geographic markets. Recently these have included global
business alliances and investments between manufacturers.
Toyota believes that its research and development initiatives, particularly the development ofenvironmentally friendly new vehicle technologies, vehicle safety and information technology, provide it with astrategic advantage.
Toyota’s ability to compete in the global automotive industry will depend in part on Toyota’s successful
implementation of its business strategy. This is subject to a number of factors, some of which are not in Toyota’s
control. These factors are discussed in “Operating and Financial Review and Prospects” and elsewhere in thisannual report.
Toyota Global Vision
In March 2011, Toyota unveiled its “Toyota Global Vision” corporate outline for the future, which serves
not only to give direction to Toyota employees around the world, but also to convey such direction to customers
and to the public at large. Toyota will work to achieve sustained growth through the realization of the following
ideals which are parts of the Vision:“The safest and most responsible ways of moving people”•

Safety is Toyota’s highest priority, and Toyota will continue to provide world-class safety.

•

Toyota will also continue to contribute to environmental quality and to human happiness by using
leading environmental technology and by deploying that technology in a growing line of vehicle
models. At the same time, Toyota will work through the provision of products, sales and services thatexceed customer expectation to offer a rewarding experience for customers.

“Enriching lives around the world”•

Toyota has been consistently true to its founding spirit of serving society through conscientious
manufacturing, and it will continue working in that spirit to contribute to enhance the quality of life
wherever it has operations.

11•Toyota will strive to continue contributing to economic vitality wherever it has operations by generating
stable employment and by participating in mutually beneficial business relationships with dealers andsuppliers. It will also strive to continue to actively engage in initiatives for human resources
development and the promotion of cultural activities of its host communities.

“Lead the way to the future of mobility”•

Toyota will lead the industry in technological development that will spawn next-generation mobility.
For example, it will explore possibilities in personal mobility and in the convergence of information
technology for automobiles and “smart grids” for optimizing energy generation and consumption.
Toyota will strive to offer products and services that match the needs in each market.

•

Toyota will strive to advance environmental technology and develop low-carbon technologies andtechnologies for maximizing safety through interaction with the transport infrastructure to lay afoundation for sustainable and amenable future mobility.

“Our commitment to quality, constant innovation”•

Toyota is committed to providing quality vehicles that are highly reliable and driven with a sense ofsafety and reliability.

•

Toyota will constantly reinvent itself and continue to engage in cutting-edge technology development.
Toyota will work towards offering vehicles around the world that address the needs of today and of
tomorrow at affordable prices.

“Continued awareness for the Earth and environment”•

Toyota will continue to work towards minimizing environmental impact in its manufacturing and otheroperations, and products.

•

With an emphasis on environmental awareness, Toyota will in its operations work towards energy
conservation, reduction in carbon dioxide emission, efficient use of resources such as recycling, andhuman resource development and production methods that allow for coexistence with nature.

“Exceed expectations and be rewarded with a smile”•

Everyone at Toyota will continuously maintain a sense of gratitude to customers and will strive to earnsmiles with products and services that are stimulating and inspiring and exceed customer expectation.

“There is always a better way”•

All Toyota employees will share the recognition that there is always a better way and share acommitment to continuous improvement, which are fundamental to The Toyota Way.

“Meet challenging goals by engaging the talent and passion of people”•

Toyota will nurture a corporate culture where teamwork and individual creativity thrive and where
people will approach their work with pride and passion.

•

Toyota will honor the spirit of diversity in recruiting, training and promoting capable individuals aroundthe world. Human resources development at Toyota will continue to promote the transfer of thecompany’s monozukuri spirit of conscientious manufacturing and related skills and know-how from one
generation to the next.

As for our future business environment, the world economy is expected to benefit from ongoing moderate
recovery in the U.S. and a gradual move toward recovery in Europe. Meanwhile, some emerging countries show
signs of uncertainty. The Japanese economy is expected to remain on a recovery trend, backed by an improved
12environment for exports and the effects of various policy measures. Attention should be paid, however, todownside risks mainly from the continuing uncertainty of overseas economies especially in emerging countries,
and the downturn in consumption following a surge in last-minute demand spurred by the consumption tax
increase in Japan.
The automotive market is expected to see expansion mainly in the U.S.; however, amid the change inmarket structure, as seen in the expansion and diversification of demand for eco-cars backed by rising
environmental consciousness and rapid advances in information and communication technology, fierce
competition exists on a global scale.
In this severe business environment, the Toyota group is progressing steadily toward the realization of the
Toyota Global Vision by strengthening competitiveness and realizing innovations in order to achieve sustainablegrowth. The Toyota group as a whole will continue to make greater efforts to address the following:First, we will further pursue the manufacturing of “ever-better cars” based on the “Toyota New Global
Architecture” (“TNGA”), a new framework for fundamentally reconsidering work procedures, in order to launch
attractive products globally in a timely and efficient manner. For the Toyota brand, we intend to provide
customers with attractive products such as next-generation eco-cars in developed countries, and establish asustainable business base by reinforcing product competitiveness through the development of vehicles matched
to various markets in emerging countries. For the Lexus brand, we intend to establish a global premium brandfrom Japan that is unbound by preconceptions.
Second, we intend to implement innovative activities to lead the future. In the automotive business, we plan
to work toward the creation of values such as new lifestyles, and to foray into new fields with a venture spirit in
the area of new businesses.
Third, we intend to promote activities to solidify our foundations in order to strengthen our competitiveness.
We intend to improve our base for manufacturing “ever-better cars” through quality improvement, as well as
through cost-reduction activities toward building a robust business base that will be little affected by changes inforeign exchange rates or the number of units manufactured or sold, the further promotion of human resource
development for the enhancement of our global competitiveness, and business innovations using IT.
Based on these efforts, Toyota will contribute to realize “enriching lives of communities” through providing“ever-better cars” that exceed customer expectations. This is expected to encourage more customers to purchaseToyota cars and thereby lead to the establishment of a stable business base. By perpetuating this positive cycle,
we will aim to realize sustainable growth and enhance corporate value. In addition, through full observance ofcorporate ethics such as compliance with applicable laws and regulations, Toyota will fulfill its social
responsibilities by carrying out its Corporate Social Responsibility (CSR).
Automotive Operations
Toyota’s revenues from its automotive operations were ¥23,781.4 billion in fiscal 2014, ¥20,419.1 billion in
fiscal 2013 and ¥16,994.5 billion in fiscal 2012.
Toyota produces and sells passenger cars, minivans and commercial vehicles such as trucks. Toyota Motor
Corporation’s subsidiary, Daihatsu Motor Co., Ltd. (“Daihatsu”), produces and sells mini-vehicles and compact
cars. Hino Motors, Ltd. (“Hino”), also a subsidiary of Toyota Motor Corporation, produces and sells commercial
vehicles such as trucks and buses. Toyota also manufactures automotive parts, components and accessories for its
own use and for sale to others.

13

Vehicle Models
Toyota’s vehicles (produced by Toyota, Daihatsu and Hino) can be classified into two categories: hybrid
vehicles and conventional engine vehicles. Toyota’s product line-up includes subcompact and compact cars,mini-vehicles, mid-size, luxury, sports and specialty cars, recreational and sport-utility vehicles, pickup trucks,
minivans, trucks and buses.
Hybrid Vehicles
The world’s first mass-produced hybrid car was Toyota’s Prius. It runs on an efficient combination of agasoline engine and motor. This system allows the Prius to travel more efficiently than conventional engine
vehicles of comparable size and performance. The hybrid design of the Prius also results in the output of
75% less emission than the maximum amount allowed by Japanese environmental regulations. Toyota views thePrius as the cornerstone of its emphasis on designing and producing eco-friendly automobiles.
In May 2008, Toyota introduced the hybrid version of the Crown, which is the signature model of the
Toyota brand, in Japan. In April 2009, the Lexus RX450h, which is the fully remodeled Lexus RX400h, wassuccessively introduced in Japan, North America and Europe. The Prius, whose name has become synonymouswith hybrid vehicles, underwent its second full model change in May 2009. The hybrid vehicles HS250h and
SAI were introduced in July 2009 and December 2009, respectively. In December 2009, Toyota began leasing
the Prius plug-in hybrid equipped with a lithium ion battery targeted at certain corporate users including
electrical power companies. In January 2011, the Lexus hybrid vehicle CT200h was also introduced. Further,
Toyota introduced the Prius α (Prius Alpha) wagon in May 2011 and is planning further ways to enhance thePrius series lineup. Furthermore, Toyota has strengthened its hybrid lineup by introducing hybrid versions of the
Camry in September 2011, the Alphard and the Vellfire in November 2011, the compact hybrid vehicle Aqua in
December 2011, the Prius plug-in and the fully remodeled GS450h in January 2012, the Yaris HV in May 2012,
ES300h in July 2012, the Auris HV in November 2012 and the Avalon HV, the fully remodeled Crown HV in
December 2012, the fully remodeled IS300h in May 2013, the fully remodeled Corolla Axio HV/Corolla Fielder
HV in August 2013, the fully remodeled Harrier HV in December 2013 and the fully remodeled Voxy HV/Noah
HV in January 2014. Toyota anticipates strong growth in the hybrid vehicles area and will continue to introduce
new models.
Toyota began limited sales of a fuel cell hybrid vehicle in Japan and the United States in December 2002. In
June 2005, Toyota’s new fuel cell hybrid passenger vehicle became the first in Japan to acquire vehicle typecertification under the Road Vehicles Act, as amended, on March 31, 2005, by Japan’s Ministry of Land,
Infrastructure, Transport and Tourism. Leases for the vehicle began in July 2005. By 2007, Toyota was able to
make improvements to start-up and cruising distance at temperatures below freezing, which were technologicalchallenges. Toyota has made advances by solving technological issues such as the above and has been working
towards the practical use of such solutions.
Toyota aims to continue its efforts to offer a diverse line-up of hybrid vehicles, enhance engine power while
improving fuel economy and otherwise work towards increasing the sales of hybrid vehicles.
Conventional Engine Vehicles
Subcompact and Compact
Toyota’s subcompact and compact cars include the four-door Corolla sedan, which is one of Toyota’s best
selling models. The Yaris, marketed as the Vitz in Japan, is a subcompact car designed to perform better andoffer greater comfort than other compact cars available in the market, with low emissions that are particularly
attractive to European consumers. In Japan, Toyota introduced the micropremium iQ in November 2008, theremodeled Passo in February 2010, the remodeled Ractis in November 2010, the remodeled Vitz in December
2010, the remodeled Corolla Axio/Fielder in May 2012, the remodeled Porte and its variant, the Spade, in
14

July 2012 and the remodeled Auris in August 2012. In India, Asia, China and other markets, Toyota introduced
the Etios and Vios. In addition, Toyota introduced the AGYA, which is designed and manufactured by Daihatsu.
Mini-Vehicles
Mini-vehicles are manufactured and sold by Daihatsu. Daihatsu manufactures mini-vehicles, passenger
vehicles, commercial vehicles and auto parts. Mini-vehicles are passenger cars, vans or trucks with engine
displacements of 660 cubic centimeters or less. Daihatsu sold approximately 685 thousand mini-vehicles and
217 thousand automobiles on a consolidated basis during fiscal 2014. Daihatsu’s largest market is Japan, which
accounted for approximately 80% of Daihatsu’s unit sales during fiscal 2014. From 2011, Toyota began to sellsome mini-vehicles manufactured by Daihatsu under the Toyota brand.
Mid-Size
Toyota’s mid-size models include the Camry, which has been the best selling passenger car in the
United States for sixteen of the past seventeen calendar years (from 1997 to present) and also for the last twelve
consecutive years. The Camry was fully remodeled in August 2011. Camry sales in the United States for2013 were approximately 408 thousand units (including Camry hybrids). In addition, Toyota’s other mid-size
models include (i) the REIZ for the Chinese market, (ii) the Avensis, which was remodeled in November 2008
for the European market, and (iii) the Mark X, which was remodeled in October 2009 for the Japanese market.
Luxury & Large
In North America, Europe, Japan and other regions, Toyota’s luxury lineup consists primarily of vehicles
sold under the Lexus brand name. Lexus passenger car models include the LS, the GS, the ES, the IS, the CT,
and the LFA. Lexus models also include the LX, the GX, and the RX sold as luxury sport-utility vehicles in the
United States. Toyota commenced sales of its luxury automobiles in Japan under the Lexus brand in August
2005. As of March 31, 2014, the Lexus brand lineup in Japan includes the LS, the GS, the HS, the IS, the CT, theRX, and the LFA. The Toyota brand’s full-size luxury car, the Avalon, was remodeled in October 2012, and the
Crown was remodeled in December 2012. Toyota also sells the Century limousine in Japan.
Sports and Specialty
In the United States Toyota sells the Scion tC, a sports model targeted at young drivers. In December 2010,
Toyota introduced the LFA model under the Lexus brand as the high-performance sports model, and in April
2012, Toyota introduced the 86 (called Scion FR-S in the U.S.), a compact sports car with a front-mounted
engine and rear-wheel drive.
Recreational and Sport-Utility Vehicles and Pickup Trucks
Toyota sells a variety of sport-utility vehicles and pickup trucks. Toyota sport-utility vehicles available inNorth America include the Sequoia, the 4Runner, the RAV4, the Highlander, the FJ Cruiser and the Land
Cruiser, and pickup trucks available are the Tacoma and Tundra. The Tacoma, the Tundra, the Highlander andthe Sequoia are manufactured in the United States. Toyota also offers three types of sport-utility vehicles under
the Lexus brand, including the LX, the GX, and the RX. Toyota also manufactures the RX and RAV4 models in
Canada. Toyota’s pickup truck, the Hilux, has been the best selling model of all Toyota cars sold in Thailand. In
December 2008, Toyota introduced the new Venza in North America. The fully remodeled RX was introduced in2009. In North America, the fully remodeled RAV4 was introduced in December 2012 and the fully remodeled
Highlander was introduced in December 2013.

15

Minivans and Cabwagons
Toyota offers several basic models for the global minivan market. Its largest minivan, the Alphard was
remodeled in May 2008 in Japan at the same time that the Vellfire was introduced. In addition, the Corolla Verso
was introduced in December 2008 in Europe, and the Wish was remodeled in April 2009 and the Noah/Voxy was
remodeled in January 2014 in Japan. Toyota’s other minivan models include, in Japan, the Estima, the Sienta, theIsis and, in North America, the Sienna.
Trucks and Buses
Toyota’s product lineup includes trucks (including vans) up to a gross vehicle weight of five tons and microbuses, which are sold in Japan and in overseas markets. Trucks and buses are also manufactured and sold byHino, a subsidiary of Toyota. Hino’s product lineup includes large trucks with a gross vehicle weight of overeleven tons, medium trucks with a gross vehicle weight of between five and eleven tons, and small trucks with agross vehicle weight of up to five tons. As of fiscal 2014, Hino maintains a large share of the large truck market
in Japan. Hino’s bus lineup includes medium to large buses used primarily as tour buses and public buses, small
buses and micro-buses. Toyota and Hino maintain a large share of the small bus (including micro-buses) market
in Japan.
Product Development
New cars introduced in Japan during fiscal 2014 and thereafter include the Corolla Axio HV/Fielder HV.
Remodeled cars in Japan during fiscal 2014 and thereafter include the Crown Majesta, Noah/Voxy, and Harrier.
New vehicles developed during fiscal 2014 and thereafter and introduced outside of Japan include the GS300h
introduced in Europe. Remodeled cars outside of Japan during fiscal 2014 and thereafter include the Corolla andHighlander in both the United States and Europe.
In addition, the IMV product lineup based on the IMV project to optimize global manufacturing and supply
systems is a lineup of strategic multipurpose vehicles produced from a single platform to meet market demand.
The IMV product lineup includes, as of March 31, 2014, the Hilux, Fortuner, and Innova, one or all of which areavailable in all regions except for Japan.
Markets, Sales and Competition
Toyota’s primary markets are Japan, North America, Europe and Asia. The following table sets forth
Toyota’s consolidated vehicle unit sales by geographic market for the periods shown. The vehicle unit sales
below reflect vehicle sales made by Toyota to unconsolidated entities (recognized as sales under Toyota’s
revenue recognition policy), including sales to unconsolidated distributors and dealers. Vehicles sold by Daihatsu
and Hino are included in the vehicle unit sales figures set forth below.
2010
Units

MarketJapan . . . . . . . . . . . 2,162,418
North America . . . . 2,097,374
Europe . . . . . . . . . . 858,390
Asia . . . . . . . . . . . . 979,651
Other* . . . . . . . . . . 1,139,329

%

2011
Units

29.9% 1,913,117
29.0 2,031,249
11.9
795,534
13.5 1,255,016
15.7 1,313,123%

Year Ended March 31,
2012
Units
%

26.2% 2,070,799
27.8 1,872,423
10.9
797,99317.2 1,326,829
17.9 1,283,885

2013
Units

28.2% 2,278,796
25.5 2,468,804
10.8
799,085
18.0 1,683,578
17.5 1,640,401

%

2014
Units

25.7% 2,365,410
27.8 2,529,398
9.0
844,00319.0 1,608,355
18.5 1,768,867

%

26.0%
27.7
9.3
17.6
19.4

Total . . . . . . . . . . . . . . . . 7,237,162 100.0% 7,308,039 100.0% 7,351,929 100.0% 8,870,664 100.0% 9,116,033 100.0%* “Other” consists of Central and South America, Oceania, Africa and the Middle East, etc.

16

The following table sets forth Toyota’s vehicle unit sales and market share in Japan, North America, Europe
and Asia on a retail basis for the periods shown. Each market’s total sales and Toyota’s sales represent new
vehicle registrations in the relevant year (except for the Asia market where vehicle registration does notnecessarily apply). All information on Japan excludes mini-vehicles. The sales information contained below
excludes unit sales by Daihatsu and Hino, each a consolidated subsidiary of Toyota. Vehicle unit sales in Asia do
not include sales in China.

2010

Japan:
Total market sales (excluding mini-vehicles) . . . . . . . . . . . . .
Toyota sales (retail basis, excluding mini-vehicles) . . . . . . . .
Toyota market share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Thousands of Units)
Fiscal Year Ended March 31,
2011
2012
2013

2014

3,184
2,975
3,067
3,242
3,433
1,535
1,407
1,396
1,570
1,605
48.2% 47.3% 45.5% 48.4% 46.7%(Thousands of Units)
Calendar Year Ended December 31,
2009
2010
2011
2012
2013

North America:
Total market sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Toyota sales (retail basis) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Toyota market share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12,705 14,058 15,417 17,153 18,514
2,053
2,008
1,880
2,360
2,520
16.2% 14.3% 12.2% 13.8% 13.6%

Europe:Total market sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Toyota sales (retail basis) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Toyota market share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18,314 18,368 19,074 18,171 18,009
905
808
820
838
848
4.9%
4.4%
4.3%
4.6%
4.7%

Asia (excluding China):
Total market sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Toyota sales (retail basis) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Toyota market share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,951
7,430
7,861
8,986
8,899
779
991
1,055
1,487
1,427
13.1% 13.3% 13.4% 16.5% 16.0%

Japan
Japan is one of the leading countries with respect to technological advancements and improvements and willcontinue to demonstrate such strength. Toyota strives to earn customer satisfaction by introducing products
distinctive of Japan’s manufacturing ability such as value-added products including Lexus models, hybrid
vehicles, vehicles with 3-seat rows and mini-vehicles. Toyota’s consolidated vehicle sales in Japan in fiscal
2014 was 2,365 thousand units, an increase of 86 thousand units in comparison with the previous year. Toyota
endeavors to secure and maintain its large share of and position atop the Japanese market. Toyota held adomestic market share (excluding mini-vehicles) on a retail basis of 45.5% in fiscal 2012, 48.4% in fiscal
2013 and 46.7% in fiscal 2014.
Although Toyota’s principle is to conduct production in regions where it enjoys true competitiveness, itconsiders Japan to be the source of its good manufacturing practices. Toyota supports its operations worldwide
through measures such as the development of new technologies and products, low-volume vehicles tocomplement local production, production of global vehicle models which straddle multiple regions, andsupporting overseas factories. Toyota will also launch the implementation of the new platform and the new unit
for TNGA globally, with Japan at the core. In Japan, Toyota is implementing flexible production based onmarket needs, in order to support its large share of domestic sales.
In January 2011, Central Motor Co., Ltd., Toyota’s subsidiary, began production at its Tohoku plant,
implementing innovative production technology that realizes cost reductions. The Tohoku plant produces
17compact vehicles such as the Yaris sedan and the Corolla Axio. In addition, Kanto Auto Works, Ltd. became awholly-owned subsidiary of Toyota in January 2012. In July 2012, Toyota integrated Central Motor Co., Ltd.,
Kanto Auto Works, Ltd. and Toyota Motor Tohoku Corporation to establish Toyota Motor East Japan, Inc. as a
new company. This integration is intended to enable Toyota Motor East Japan, Inc. to design, develop, andproduce globally competitive compact cars, manufacture auto parts, and support Toyota’s overseas operations.
Toyota has established three domestic production bases, each of which are in the Tokai, Kyushu, and Tohoku
regions.
In January 2012, Toyota Auto Body Co., Ltd. became a wholly-owned subsidiary of Toyota. Toyota Auto
Body Co., Ltd. is primarily responsible for integrating the planning, development, and production of minivans,commercial vehicles, SUVs, etc.
Since Toyota formed an alliance with Fuji Heavy Industries, Ltd. (“FHI”) in 2005, Toyota and FHI have
utilized each other’s resources in development and production. In April 2008, in order to create synergy and tofurther strengthen competitiveness, Toyota, Daihatsu and FHI agreed on the following three points: (1) Toyota
and FHI will jointly develop a compact rear-wheel-drive sports car that will be marketed by both Toyota and
FHI, (2) Toyota will provide FHI with a compact car on an original equipment manufacturing basis (“OEM”) and(3) Daihatsu will supply FHI with mini-vehicles and an FHI version of the Daihatsu Coo compact car on an
OEM basis. In order to promote a smooth cooperation, FHI transferred 61 million FHI shares owned by FHI to
Toyota in July 2008. As a result of this transfer, Toyota owns 16.5% of FHI issued shares. While Toyota vehicles
have been manufactured at FHI’s North American production center, Subaru of Indiana Automotive, Inc., since2007, Toyota and FHI have decided to cease such production in the fall of 2016, and the collaboration between
Toyota and FHI will shift going forward to collaboration focusing on products and technology.
In Japan, there are five major domestic manufacturers, five specialized domestic producers and a growing
volume of imports from major United States and European manufacturers. The prolonged economic slump in theJapanese economy and the recent increases in environmental awareness have also shifted consumer preference
towards more affordable automobiles such as compact and subcompact vehicles and towards utility vehicles suchas mini-vans. For more than 40 years, Toyota has maintained its position as the largest automobile manufacturer
in Japan. Every year since fiscal 1999, Toyota, excluding Daihatsu and Hino, has achieved a market share(excluding mini-vehicles) of over 40%, reflecting in part the success of the introduction of new models for
subcompact and compact cars, mini-vans and sedans. In August 2005, Toyota launched the Lexus brand in Japanand achieved a record top market share of 24.8% in the luxury market in fiscal 2012. Toyota aims to further
distinguish the Lexus brand by continuing to attract new and affluent customers including customers thattypically had purchased imported vehicles.
North America
The North American region is one of Toyota’s most significant markets. While the automotive market
struggled in the aftermath of the financial crisis beginning in 2008, Toyota has since reorganized its production
structure and made improvements to its product lineup. In addition, Toyota is actively working to promoteincreased local operations independence in North America, in accordance with the Toyota Global Vision,
announced in 2011.
In the North American region, of which the U.S. is the center, Toyota has a wide product lineup (excluding
large trucks and buses), and sold 2,529 thousand vehicles on a consolidated basis in fiscal 2014. This represents
approximately 28% of Toyota’s total unit sales on a consolidated basis. The U.S., in particular, is the largest
market in the North American region, accounting for 89% of the retail sales of Toyota in such region. Sales
figures for fiscal 2014 were 102.5% of those in the previous fiscal year.
Toyota commenced sales of the first-generation Prius hybrid model in North America in 2000. The Prius
became Toyota’s best selling model behind the Corolla and Camry, having gained particular support among18

customers concerned with the environment. Toyota introduced the first hybrid model under the Lexus brand, theRX400h, and the Highlander hybrid in 2005. Toyota began sales of the HS250h in 2009 and the CT200h andPrius V in 2011. Further, Toyota continued expanding its hybrid models with the introduction of models such as
the Prius C, ESh and Avalon HV in 2012.
Since the introduction of the LS and ES models under the premium brand model, Lexus, in the United Statesin 1989, Toyota has expanded its Lexus sales with models including the GS, IS and RX, etc. In 2012, Toyota
introduced the all-new GS and ES models, and unit sales reached 244 thousand units. Toyota is seeking to further
increase sales through the introduction of the new IS model in 2013.
Toyota is continuing to revise its production in North America in response to changes in market conditions.
Toyota discontinued the joint production of the Tundra in its Indiana and Texas plants, and designated the Texas
plant as the sole production facility for the Tundra in November 2008. Also in November 2008, Toyota’s
Kentucky plant commenced production of the new Venza model, and a decision was made to commence
production of the Lexus ES350 for sale in the North America market starting by summer of 2015. At the Indiana
plant, local production of the Highlander began in October 2009 and in November 2013, Toyota increased
production capacity at the plant to coincide with the shift to the next generation model. Toyota also increased
production capacity of auto parts at its automatic transmission plant in West Virginia in January 2014, andincreased production capacity of engine plants in Kentucky and Alabama in August 2013 and January 2014,
respectively, to meet the expanded production capacities of vehicles in the U.S. The Woodstock plant in Canada
commenced production of the RAV4 in November 2008 and the production capacity at the Woodstock plantincreased from 150 to 200 thousand units per year in January 2013. Also, Toyota commenced production of theRX450h hybrid model at its Cambridge plant in April 2014.
On the other hand, due to the termination of the NUMMI joint venture with GM in the middle of 2009,
Toyota ceased placing orders for the Tacoma and Corolla with NUMMI and production was stopped at the
NUMMI plant in April 2010. Equipment utilized in the production of the Tacoma model was transferred to the
Texas plant, where production of the Tacoma began in July 2010. The Corolla was produced and supplied by the
Cambridge plant in Canada, and finished vehicles were exported into North America from the Takaoka plant andKanto Auto Works, Ltd. in Japan. Starting October 2011, Toyota, instead of importing from Japan, has begun
production of the Corolla at its Mississippi plant. Furthermore, in November 2012, Toyota came to an agreementwith Mazda Motor Corporation under which Toyota-brand light vehicles for sale mainly in North America will
be produced at Mazda’s new plant in Mexico.
As for Toyota’s vehicle development in North America, the Toyota Technical Center spearheads the design,planning, and evaluation of vehicles and parts as to their ability to meet customer needs. As a measure towards
local self-reliance, Toyota plans to increase the number of staff present at the Center, and will continue topromote self-reliance towards producing even better cars in the future.
In April 2014, Toyota decided to relocate its North American headquarters for manufacturing, sales andmarketing, financial services and other functions to the city of Plano in northern Dallas, Texas. By unifying its
North American operations, Toyota plans to promote collaboration and efficiencies across functions, position
itself to deliver “ever-better cars” to customers and work towards realizing sustainable growth in the
North America market. The relocation is expected to take place following the completion of the construction of
the new headquarters in late 2016 or early 2017.
EuropeWhile competition continues to intensify, Toyota has expanded its lineup of hybrid models and has enteredinto supply agreements with BMW and PSA for diesel engines and light commercial vehicles, respectively. As aresult, Toyota launched the BMW engine-equipped Verso and plans to expand to other models in the future.
Toyota also began sales of light commercial vehicles supplied by PSA from mid-2013. In addition, Toyota is19

actively promoting production and sales measures that meet local demand by reevaluating its sales network
periodically and strengthening its value chain including used car dealerships, after-sales services and finance andinsurance services.
In 2013, while the European market continued a downturn in the first half of the year, the market
performance recovered starting mid-year mainly in Western European countries.
Sales in 2013 in Europe exceeded the previous year’s figures due to the introduction of new models,
recovery in Western Europe and sales increases in Russia and other emerging markets. Toyota aims to further
increase its sales with the expansion of its product lineup while being attentive to market risks. Toyota’s
consolidated vehicle sales in Europe in fiscal 2014 was 844 thousand units, an increase of 5.6% from fiscal 2013.
Toyota has in the past increased local production in response to sales growth, establishing Toyota Motor
Manufacturing (UK) Ltd. (“TMUK”) in 1992, Toyota Motor Manufacturing Turkey Inc. (“TMMT”) in 1994 andToyota Motor Manufacturing France S.A.S. (“TMMF”) in 2001 as vehicle supply factories to Europe. Further, in
2005, Toyota Peugeot Citroën Automobile was formed as a result of a joint venture with PSA Peugeot Citroën,allowing for the expansion of local production. However, in response to the downturn of the market resulting
from the economic crisis in Europe, Toyota promptly reduced personnel and made adjustments to its plant
operations. In addition, in light of the current levels of demand in the United Kingdom, TMUK limited its
production to one production line at its Burnaston plant. At the same time, due to the weakening market, otheroperations also conducted measures such as adoption of a one-shift production system at TMMT and change
from a three-shift to a two-shift production system at Toyota Motor Manufacturing Poland SP.zo.o. To increase
the utilization rate of these factories, Toyota began to transfer the production of the Corolla from South Africa to
TMMT and commenced exporting the TMMF Yaris to North America in 2013.
Toyota opened Toyota Motor Manufacturing Russia (“TMMR”) in 2007 as a base for its manufacturing
operations in the Russian market, where future growth is expected. A two-shift production system started in
September 2012 and the production capacity was increased from 20,000 units to 50,000 units per year. In
addition, Toyota decided in September 2013 to manufacture a second model, namely the RAV4. Moreover,
OOO “Toyota Motor” and TMMR were merged into one company at the end of 2013 to strengthen the businessbase and promote coordination of manufacturing and sales operations. In addition, Toyota commenced contract
assembly of SUVs by Sollers Bussan in Vladivostok in the spring of 2013. Toyota commenced complete knock
down, or CKD, production of SUVs in Kazakhstan beginning in the spring of 2014 and held a line-off ceremonyin June 2014.
Toyota’s principal European markets are Germany, France, the United Kingdom, Italy, Spain and Russia.
Toyota’s principal competitors in Europe are Volkswagen, Renault, Ford, Opel and Peugeot, as well as Korean
manufacturers Hyundai and Kia.
Asia
Toyota’s consolidated vehicle sales in Asia (including China) in fiscal 2014 was 1,609 thousand units, adecrease of 4.5% from fiscal 2013.
In light of the importance of the Asian market that is further expected to grow in the long term, Toyota aims
to build an operational framework that is efficient and self-reliant as well as a predominant position in theautomotive market in Asia. Toyota has responded to increasing competition in Asia by making strategic
investments in the market and developing relationships with local suppliers. Toyota believes that its existing
local presence in the market provides it with an advantage over new entrants to the market and expects to be able
to promptly respond to demand for vehicles in the region.

20

In this region, Toyota plans to further strengthen and solidify its business foundations by improving its
product line-up, expanding local procurement, and increasing production capacities. For example, Toyota began
producing IMV models (the Hilux, Fortuner and Innova) in Thailand, Indonesia, India, the Philippines andMalaysia in fiscal 2005 and in Vietnam in fiscal 2006. Furthermore, with increased production capacity, theThailand plant now produces IMV models (the Hilux and Fortuner) for sale outside of Asia, including inAustralia and in the Middle East, and has contributed greatly to the expansion of Toyota’s automotive business.
Furthermore, as part of Toyota’s efforts to expand business going forward, Toyota Motor Thailand Co., Ltd.,
Toyota’s vehicle production base in Thailand, commenced production of the Camry hybrid in May 2009 andPrius in November 2011. Toyota also started operation of its second Gateway plant in 2013, which increased
production capacity by 80 thousand units, and increased production capacity in Thailand to 810 thousand units.
In India, Toyota has expanded its business by constructing a second plant with an annual production capacity of
70 thousand units, Toyota has also commenced production and sales of the Etios compact model designed
specifically for the Indian market in December 2010. Furthermore, Toyota increased production capacity in India
during 2012 and 2013 to 210 thousand units. Toyota began exporting the gasoline-fueled model of the Etios toSouth Africa from India in April 2012. Moreover, Toyota commenced operation of a second plant in Karawang,Indonesia, at the beginning of 2013 in order to meet the diverse customer needs and the expanding market.
Toyota increased the initial production capacity of 70 thousand units per year to 120 thousand units per year in
the beginning of 2014. In addition, in 2012 Toyota began production and sales of the Camry hybrid in Taiwan, toaccommodate the spread of environmentally-friendly vehicles. In light of the Korea-USA FTA conclusion,
moreover, Toyota has begun sales of the U.S. produced Camry in Korea since January 2012.
Toyota’s principal Asian markets are Thailand, Indonesia, India, Malaysia and Taiwan.
China
Toyota has been conducting its operations in China through joint ventures, and its success in producing
products that meet local demands and in establishing its sales and service network has significantly contributed to
Toyota’s profits. Based on the firm business foundation that it has established, Toyota is conducting its
operations with the aim of promoting further growth and increasing profitability through further development of
its sales and service network and expansion of its product lineup.
In China, Toyota has been conducting joint ventures with two major partners. First, with respect to the joint
venture with China FAW Group Corporation, since Toyota first launched the Vios through the joint venture in
2002, Toyota has been producing and selling nine car models in China, including the Land Cruiser Prado, Land
Cruiser, Corolla, Crown, REIZ, Coaster, RAV4 and Prius. With regard to increasing production capacity, inMay 2007, Toyota commenced production of the new Corolla on the third line of the Tianjin Teda plant, which
has an annual production capacity of 200 thousand units, and commenced production of the RAV4 on the sameline in March 2009. At a new factory in Changchun, China, which has an annual production capacity of
100 thousand units, Toyota began producing the Corolla in May 2012 and the RAV4 in August 2013. Toyota alsoplans to increase the annual production capacity of the plant in Sichuan from 30 thousand units to 50 thousand
units in the spring of 2015 to increase the production of Prado. Guangzhou Toyota Motor Co., Ltd., a joint
venture between Toyota and Guangzhou Automobile Group Co., Ltd., commenced production of the Camry in
May 2006 with an annual production capacity of 100 thousand units on a single shift basis and, by late 2006, it
expanded its annual production capacity to 200 thousand units on a double shift basis. In addition, it commenced
production of the Yaris in May 2008, and the second Guangzhou line commenced production of the Highlander
in May 2009 and the E’z in June 2011. In 2014, Toyota opened a plant in Changshu in Jiangsu, China for the
production of the CVT. Toyota also plans to open a plant to produce hybrid vehicle batteries in 2015.
Total vehicle sales in the Chinese market increased 14% from 19.43 million in 2012 to 22.19 million in
2013. In this market, Toyota’s sales in 2013 were 920 thousand vehicles, up 9% from the previous year. In thepassenger vehicle market (15.99 million units), Toyota had a market share of 6%. In the 2013 market, favorable
conditions in the less-than-1.6 liter market continued, and the SUV market expanded as a result of customers’
21value diversification. As for Toyota’s distribution network, Toyota has been expanding the distribution network
for locally produced vehicles in cooperation with Chinese joint venture partners under Tianjin FAW Toyota
Motor Co., Ltd. and Guanqi Toyota Motor Co., Ltd., and for imported vehicles, Toyota has also been expanding
primarily the Lexus brand sales network. Toyota plans to further increase sales by expanding the number ofdealers and the product lineup for both locally produced and imported vehicles, particularly inland. In addition,
as the market in China develops, Toyota plans to promote the so-called “Value Chain” businesses such as usedcars, services, financing and insurance.
South and Central America, Oceania, Africa and the Middle East
Toyota’s consolidated vehicle sales in South and Central America, Oceania, Africa and the Middle East
(collectively, the “Four Regions”) in fiscal 2014 was 1,769 thousand units, an increase of 7.8% from fiscal 2013.
The increase was due to factors such as the strong sales of the Etios. The core models in this region are global
models such as the Corolla, IMV (the Hilux) and Camry, which are designed to satisfy regional demands, while
keeping production costs down by using common platforms and core parts and components with vehicle models
in other regions. Furthermore, in order to increase production of IMV models, Toyota expanded the annual
production capacity of its Argentina factory from 70 thousand units to 90 thousand units during the second halfof 2011. In order to expand business in Brazil, Toyota constructed a new factory in Sorocaba with an annual
production capacity of 70 thousand units, and in September 2012, began production and sales of the compact
vehicles introduced to the Indian market. Further, Toyota began local production of the Fortuner in Egypt inApril 2012.
Toyota decided to end production of vehicles and engines at Toyota Motor Corporation Australia Ltd. by theend of 2017. Specific measures will be evaluated through discussions with employees, suppliers, government
entities and local communities.
In these regions, which are expected to become increasingly important to Toyota’s business strategy, Toyota
aims to develop new products which meet the specific demands of each region, increase production and further
promote sales.
Toyota’s principal markets in the Four Regions are Brazil in South and Central America, Australia in
Oceania, South Africa in Africa and Saudi Arabia in the Middle East.
Production
Toyota and its affiliated companies produce automobiles and related parts and components through morethan 50 overseas manufacturing companies in 27 countries and regions besides Japan. Toyota’s major
manufacturing facilities include plants in Japan, the United States, Canada, the United Kingdom, France, Turkey,
Thailand, China, Taiwan, India, Indonesia, South Africa, Australia, Argentina and Brazil. Daihatsu brandvehicles are produced at 4 factories in Japan and 3 manufacturing companies in 3 other countries, includingIndonesia and Malaysia. Hino brand vehicles are produced at 2 factories in Japan and 10 manufacturing
companies in 10 countries, including Indonesia and Thailand. For a listing of Toyota’s principal production
facilities, see “Information on the Company — Property, Plants and Equipment”.
In promoting a sustainable growth strategy, establishing a system capable of providing optimal supply of
products in the global market is integral to Toyota’s strategy. In May 2010, Toyota announced its production
strategy aimed at achieving an optimal supply system in the global market. For example, Toyota will increase its
local production capacities to meet a wide range of growing customer demands in a timely manner in emerging
countries such as China and India. On the other hand, in developed countries with mature markets, Toyota willreconsider production models to respond to changes in market demand and establish a flexible and efficient
production system that can withstand currency fluctuations. In 2013, 76.3% of Toyota vehicles sold in overseas
markets were manufactured in overseas plants by Toyota and its unconsolidated affiliated companies. In 2013,22

approximately 73.7% of Toyota vehicles sold in North America were produced in North America. Of thevehicles sold in Europe in 2013, approximately 69.4% were produced in Europe. In fiscal 2014, Toyota produced
on a consolidated basis 4,345 thousand vehicles in Japan and 4,687 thousand vehicles overseas, compared to
4,276 thousand vehicles in Japan and 4,422 thousand vehicles overseas in fiscal 2013.
The following table shows the worldwide vehicle unit production by Toyota for the periods shown. These
production figures do not include vehicles produced by Toyota’s unconsolidated affiliated companies. The sales
unit information elsewhere in this annual report includes sales of vehicles produced by these affiliatedcompanies. Vehicles produced by Daihatsu and Hino are included in the vehicle production figures set forth
below.

Units Produced . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Year Ended March 31,
2012
2013

2010

2011

6,809,440

7,169,721

7,435,781

8,698,454

2014

9,032,165

Toyota closely monitors its actual units of sale, market share and units of production data and uses thisinformation to allocate resources to existing manufacturing facilities and to plan for future expansions.
See “— Capital Expenditures and Divestitures” for a description of Toyota’s recent investments incompleted plant constructions and for a description of Toyota’s current investments in ongoing plant
constructions.
The Toyota Production System
Toyota pioneered the internationally recognized production system known as the “Toyota Production
System”. The Toyota Production System is based on Toyota’s own concepts of efficient production of only
necessary and quality products and efficient cost reduction, and has the following two principal elements:•“Just-in-Time”, and•“Jidoka”.

Just-in-Time is an approach in which necessary parts and components are manufactured and delivered in justthe right quantity in a timely manner just as they are needed. This allows Toyota to maintain low levels of
inventory while maintaining operating efficiency.
Jidoka is a production concept which involves immediate stop of work when problems arise in the
production line in order to stop the production of defective items from being passed on to subsequent stages ofthe process, and therefore making quality assurance an inherent part of the production process. To achieve this,Toyota’s equipment is designed to detect and highlight abnormalities and to stop whenever abnormalities occur.
Toyota also authorizes its machine operators and other members of its production team to stop production
whenever they note anything suspicious. This helps Toyota to build quality into the production process by
avoiding defects and preventing the waste that would result from producing a series of defective items.
Toyota believes that the Toyota Production System allows it to achieve mass-production efficiencies even in
high-mix low-volume production. This belief gives Toyota the flexibility to respond to changing consumer
demand without significantly increasing production costs. While the Toyota Production System remains the basisof Toyota’s automobile production, the system has been expanded for use in Toyota’s parts production, logistics
and customer service activities as well.
Through the Toyota Production System, issues are identified and analyzed at the actual site, the entire
production process is made visible, and production efficiency as well as product quality are improved through theapplication of measures to address the sources of problems. As one method to implement these measures, Toyota
23utilizes sophisticated information technologies to improve each step of its vehicle development process, fromproduct planning to commencement of mass-production. These technologies are intended to enhance flexibility,
simplification, quality, cost competitiveness, and speed. Specifically, detailed virtual assembly and othersimulations of manufacturing processes are conducted on computer for a new vehicle or new production
equipment/systems before a prototype is made. An actual prototype is made only after defects and related issues
have been identified and resolved by computer simulation, thereby minimizing the time required for rebuilding
prototypes and significantly shortening the time required before starting mass production. Moreover, this system
is used to prepare virtual factories and other visual aids in order to facilitate training and communication atoverseas plants and enable the efficient transfer of necessary technology and skills.
In order to strengthen manufacturing and promote localization of overseas production, Toyota establishedthe Global Production Center (“GPC”) in July 2003 as a development and training center for global humanresources. The GPC is intended to introduce local managers to the Toyota methodology, allowing them to train
their subordinates with the local management. GPC develops simple, easy-to-understand and efficient training
systems for the development of explicit knowledge. One characteristic of the GPC is that managers andsupervisors, new hires and experienced workers can all receive common skill training. GPC’s training system
involves a pre-training phase where trainees learn basic skills and discover the skills that they must acquire
through image training. This is followed by various steps, from basic skill training, elemental task training, tostandard task training, which is a sure method of training. The fruits of this training method are reduced training
time, higher levels of achievement and the efficiency of training. Since January 2006, Toyota has opened
regional GPCs in North America, Europe and Asia. In each region, Toyota commenced courses where trainees
from each department are trained by local trainers to become trainers themselves.
Currently, Toyota is working company-wide towards the production of “ever-better cars”. The productionengineering and manufacturing divisions are developing Toyota’s own innovative production systems, equipment
and processing technologies, and deploying them in production lines in order to produce vehicles that create
excitement, joy and fun for customers through truly competitive manufacturing methods.
Distribution
Toyota’s automotive sales distribution network is the largest in Japan. As of March 31, 2014, this network
consisted of 281 dealers employing approximately 34 thousand sales personnel and operating approximately
4.7 thousand sales and service outlets. Toyota owns 15 of these dealers and the remainder are independent.
Toyota believes that this extensive sales network has been an important factor in its success in the Japanesemarket. A large number of the cars sold in Japan are purchased from salespersons who visit customers in theirhomes or offices. In recent years, however, the traditional method of sales through home visits is being replacedby showroom sales and the percentage of automobile purchases through showrooms has been gradually
increasing. Toyota expects this trend to continue, and accordingly, is working to improve its sales activities suchas customer reception and meticulous service at showrooms to increase customer satisfaction.

24

Sales of Toyota vehicles in Japan are conducted through four sales channels — “Toyota”, “Toyopet”,“Corolla” and “Netz”. In addition, Toyota introduced the Lexus brand to the Japanese market in August 2005,
and currently distributes the Lexus brand vehicles through a network of 173 sales outlets in order to enhance its
competitiveness in the domestic luxury automobile market. The following table provides information for eachchannel as of March 31, 2014.
Dealers
ChannelToyota . . . . . . . . . . . . .
Toyopet . . . . . . . . . . . .
Corolla . . . . . . . . . . . . .
Netz . . . . . . . . . . . . . . .

ToyotaOwned

Independent

Total

Market Focus

4
4
4
3

45
48
70
103

49
52
74
106

Luxury channel for Toyota brand vehicles
Leading channel for the medium market
Volume retail channel centering on compact models
Sales channel targeting customers with new values forthe 21st century

Sales
Outlets

Brand

Lexus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

173

Market Focus

Premium brandOutside Japan, Toyota vehicles are sold through approximately 170 distributors in approximately
190 countries and regions. Through these distributors, Toyota maintains networks of dealers. The chart below
shows the number of Toyota distributors as of March 31, 2014 by country and region:
Country/Region

North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia (excluding China) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Oceania . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Middle East . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Central and South America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Number of Countries

Number of Distributors

3
56
1
17
17
17
54
30

5
30
4
12
15
16
45
41

Improve Efficiency
Toyota is working on the following to create a structure allowing for efficient development, production andsales that can respond flexibly to changes in the external environment:•

working with suppliers to dramatically increase the efficiency of development,•

creating a production structure that can better withstand fluctuations in demand and currency exchange
rates, and•strengthening sales capabilities in line with local conditions.

Toyota also plans to improve profitability and enhance operating efficiency by continuing to pursue
aggressive cost reduction programs, including:•

improving product development and production efficiencies through the re-integration and improvementof vehicle platforms and power trains and through the development of electronic platforms whichorganize electronic devices of vehicles as a package and standardize electronic structure andinfrastructure,•

implementing Ryohin-Renka Cost Innovation (“RR-CI”) activity, which aims at the elimination ofwaste in all processes from design to production while ensuring the reliability and safety of each part,25

•

applying advanced information technologies to improve efficiency throughout the product development
and production processes,•

increasing the focus on global purchasing opportunities to optimize purchasing from suppliers,•

streamlining production systems, and•improving the efficiency of domestic and international distribution.

Toyota is further improving production efficiency by installing more versatile equipment and systems,
modifying vehicle body designs to allow for a greater variety of models on each production line and sharing
more parts among vehicles, not simply among different models, but also among different platforms.
In April 2012, Toyota announced a new development framework, the TNGA, which reconciles sweeping
advances in product appeal with cost reductions. The new framework sets forth an architecture that incorporates
not only the three fundamental vehicle functions of moving, turning and stopping, but also ergonomics such as
driving position as well as freedom of design. Toyota plans to efficiently develop cars with highbasic-performance attributes by developing parts and modules based on this architecture. The TNGA provides forhandling multiple models simultaneously in grouped development projects that will increase the sharing of partsand core vehicle components. This sharing, carried out in cooperation with suppliers, will result in lowered costs,
thereby allowing developmental manpower and funds to be divided between R&D to meet consumer preferences
and R&D to meet regional needs, resulting in further product improvement.
By April 2013, Toyota established systems to rapidly promote the TNGA. Toyota is promoting companywide activities to reevaluate the way it does business from the ground up in order to continue to produce highquality, profitable and attractive cars.
Enhancing Vehicle Functionality and Realizing a Smart Mobility Society
Toyota is striving to realize a smart mobility society in which people feel at ease and excited about being incars and in everyday life by connecting vehicles, people and communities in order to meet the needs of rapidlychanging societies, including the falling birth rate and aging populations in developed nations and an increasingly
diverse range of energy sources, among others. In particular, Toyota aims to contribute to an affluent lifestylethat offers peace of mind by enhancing vehicle functionality that will increase the attractiveness of vehicles andthe excitement of driving, enhancing transport systems that make being in cars more comfortable and moreenvironmentally friendly, and realizing Smart Communities that aim for optimization of local energy use andestablishment of a low-carbon emission transportation system.
Enhancing Vehicle Functionality — Information service functions
To Toyota, enhancing vehicle functionality means advancing information service functions that integrate
vehicles with telecommunication systems, and driving assistance functions that use communication technologies
and sensing technologies to create vehicles with intelligent features. Information service functions can improvethe convenience and enrich the driving experience by means of information communication technologies, which
add new functions “connected” to the basic vehicle functions of “running, turning and stopping”. Examples
include the following:•

Advanced car navigation systems are equipped with functions such as displaying maps and detailed
information about the car parking space and the VICS (Vehicle Information and Communication
System) that provides real-time information about road traffic such as congestion, accidents, traffic
restrictions and parking. These car navigation systems play an important role in providing drivers withvarious types of information on safety, smooth traveling, comfort and convenience.

•

G-BOOK is the latest information network service that merges the latest network technologies and car
multimedia, prior to the arrival of the ubiquitous network society. G-BOOK provides various types of26

information useful for driving a car as well as safety and security services that detect unusual conditionsin the vehicle, which supports a lifestyle using automobiles anytime and anywhere through a network. In
2005, Toyota started G-BOOK ALPHA and G-Link that is a telematics service exclusive to Lexus,
which added various features including the traffic congestion forecast service. In 2007, Toyota launched
G-BOOK mX, which has matured as a comprehensive telematics service and is built on the provenreliability and security of G-BOOK with the addition of services allowing drivers to use moreconvenient navigation systems such as “Map-on-Demand” — the world’s first technology for
automatically updating map data and “Probe Communication Traffic Information” that provides drivers
with highly precise information on traffic congestion.
•

HELPNET emergency call service is an emergency notification system that transmits necessary
information such as the vehicle location either automatically or through the touch of a button in theevent of a traffic accident or medical emergency. It immediately contacts police and fire departments
through the HELPNET Operation Center. This system is integrated into G-BOOK and G-Link to
improve the quality of services. HELPNET shortens the time taken to report following an emergency
situation, which contributes to decreasing the number of traffic accident fatalities and reducing the levelof impact, preventing secondary disasters and easing traffic congestion.

In addition to the above, Toyota also operates a Japanese-language web portal for automobile information,GAZOO.com. The name “Gazoo” originates from the Japanese word gazo meaning images. Gazoo wasestablished as a membership Internet service linking Toyota, its national dealer network and Gazoo members,
and has provided information on new and used Toyota vehicles and related services as well as online shopping
capabilities. As an interactive portal for automobiles, in addition to information on Toyota vehicles, Gazoocurrently provides information on other automobile companies and also offers a rich blogging feature. In
addition, Gazoo features GAZOO Racing and Gazoo mura, through which Toyota aims to expand the fan base of
car enthusiasts by promoting activities such as interactive motor sports that enable customers to experience theenjoyment that cars offer to further complement its content line-up. Toyota utilized its GAZOO technology tofurther expand its automobile information service by launching the G-BOOK telematics service in Japan in fall
2002 and G-Link, which is a service exclusive to Lexus, in August 2005. Toyota also offers a theft detection
system, vehicle tracking service, operator support service as standard to enhance services aiming to provide
safety, security and comfort for G-BOOK and G-Link users in their lifestyle using vehicles. With G-BOOK mX
announced in April 2007, Toyota started offering services that allow drivers to use more convenient navigation
systems such as “Map-on-Demand” — the world’s first technology for automatically updating map data. Also,
Toyota has further strengthened its linkage between Gazoo and G-BOOK and has, for example, allowed map
information searched on a blog on GAZOO.com to be used on G-BOOK, further maturing as a comprehensive
telematics service. In Japan, Toyota is seeking to promote the use of the G-BOOK by equipping all Lexus models
and certain Crown models with the G-BOOK as a standard feature. Toyota has also licensed its G-BOOK
technology to certain other competitors in Japan. Toyota is applying the technology and experience which it has
accumulated in Japan to regions outside Japan. G-BOOK services have been available in China since March
2009, and its unique telematics services in the United States was launched in August 2009. In addition, Toyota
began offering telematics services for smartphones in December 2010 in Japan, and began to offer the same
service in Thailand in March 2012 and the Middle East (UAE, Qatar and Lebanon) in January 2014. In
June 2014, Toyota announced “T-Connect,” a next-generation service to follow G-BOOK, and plans to launch
this new service in August 2014. In addition to conventional telematics services, T-Connect plans to provide
additional services and functions through the distribution of applications to vehicle equipment, as well as
destination and other information searches through the adoption of a voice recognition system.
In addition, in March 2004, Toyota launched its CRM (Customer Relationship Management) system called
e-CRB (evolutionary Customer Relationship Building) in Thailand. e-CRB builds on a technology cultivatedthrough the development of Gazoo and G-BOOK and offers its customers a variety of services such as providing
information of new vehicles, accepting requests for brochures and estimates and notifying customers when it istime for maintenance by keeping track of the vehicle’s maintenance history and mileage. In addition, e-CRB
offers an advanced operation system that can be utilized comprehensively at dealers including new and used cars
27

and services. Toyota is promoting e-CRB in countries such as China, Thailand, Australia, India and Brazil where
steady progress has been made as the service-in ratio has increased. In 2013, Toyota introduced the nextgeneration e-CRB that adopts tablet terminals (portable information processing terminals) in China. These tablet
terminals are supporting the improvement of customer satisfaction at points of sale and in after-sale service.
Also, Toyota introduced a system called Sales Logistics Integrated Management (“SLIM”) in Guangzhou,
China and India. By utilizing real sales information and linking with production and distribution, Toyota is able
to realize the Just-in-Time production system of producing and delivering only the number of vehicles that havebeen sold. SLIM has been recognized to significantly increase the freshness of inventory and improve cash flow.
In September 2010, Toyota announced its smart-grid initiatives, which are intended to demonstrate efficientenergy use toward the realization of a low-carbon and energy-saving society. By utilizing technology cultivatedthrough the Internet and telematics services mentioned above, Toyota developed the Toyota Smart Center(“TSC”) that optimally controls electricity and links EV (electric vehicles) and PHV (plug-in hybrid vehicles)with homes, and conducted in Rokkasho Village in Aomori, a demonstration project aimed to reduce overall CO2
emissions and users’ electricity costs. In addition, in order to develop a global platform of the TSC, Toyota
announced a partnership with Microsoft Corp. in April 2011 and a partnership with Salesforce.com in May 2011.
Toyota plans to utilize the cloud technology of these two companies in its Internet and telematics services tobuild a framework for TSC’s global implementation. In January 2012, Toyota began eConnect for PHV and“TOYOTA friend” services. In May 2013, Toyota utilized the latest version of Microsoft’s SharePoint tocomprehensively redesign GAZOO, the automobile information portal site. Toyota is also developing its “Big
Data Traffic Information Service,” a new kind of traffic-information service utilizing big data including vehicle
locations and speeds, road conditions and other parameters collected and stored via telematics services. Based onsuch data, traffic information, statistics and other related information can be provided to local governments,
universities and businesses to aid traffic flow improvement, provide map information services and assist disasterprevention measures. In June 2013, Toyota started accepting applications to use the service from local
governments and businesses across Japan. Going forward, Toyota plans to continue to work with new
information technologies and the IT industry to establish a framework for TSC’s global implementation and torealize a mobility society in the future.
Enhancing Vehicle Functionality — Driving Assistance Functions
Toyota’s driving assistance functions offer functions that assist drivers with an aim to lessen the burden ofdriving, enhance safety and provide pleasure of driving to everyone. Toyota is proceeding with enhancements tocommercialize various functions that assist the driver in sensing external information, avoiding danger andmaking appropriate maneuvers. These functions have started to be incorporated in some Toyota vehicles.
Examples of driving assistance functions include the following:•

VDIM (Vehicle Dynamics Integrated Management) is a system that constantly monitors the driver’s
operations and the vehicle’s situation and centrally manages the engine, steering mechanisms andbrakes. By stabilizing the vehicle before the driver loses control of the vehicle, the VDIM achieves ahigh level of ‘active safety’ and improves driving performance, namely running, turning and stopping.

•“Pre-collision System” is a system that perceives possibilities of a crash with obstacles or the car infront through a millimeter-wave radar sensor that can precisely detect objects even in bad weather
conditions. If collision seems to be unavoidable, it proceeds to activate safety devices at an early stage
to reduce any damage. Toyota is also developing an advanced system that detects pedestrians using astereo camera and a driver monitoring camera that detects the driver’s face orientation and the opening
and closing of eyes, which enable the determination of the likelihood of a collision at an earlier stage.

28

•Radar Cruise Control (with all-speed tracking function) allows the vehicle to keep a constant distance
between itself and the preceding vehicle within a speed range from zero to a preset speed, automaticallyslowing down and stopping if necessary to avoid collision. When the car in front speeds up, it allows thedriver to accelerate, resuming the system.

•“Lane Keeping Assist System” is a system that uses a camera to detect white or yellow lane markers
while driving on a highway. The system assists the driver’s operation of the steering wheel in order tohelp keep the vehicle traveling between the lane markers by controlling electric power steering, and also
warns the driver if it detects possible deviation. This system does not automatically control the steering
to maintain travel between lane markers, but requires the driver to steer.

•“Intelligent Parking Assist” is the world’s first parking assistance system that enables the vehicle to be
automatically steered by electric steering when backing into a parking spot or when parallel-parking.
The driver presets the parking position on the display monitor. The system allows the driver to set the
parking position more easily, reducing driver maneuvering by using a spatial cognition feature that
detects the parking space through ultrasonic sensors.

•“Blind Spot Monitor” is a system which aims to reduce accidents by alerting the driver to other vehicles
in the driver’s blind spot diagonally behind the driver’s seat with sound and visual display in the side
mirrors while changing lanes.

Enhancing Transport Systems
Enhancing transport systems requires taking a general approach that addresses various factors across a wide
scope that are pertinent not only to vehicles but also roads, people and public transport systems in order to ensuresmooth and efficient movement of people and vehicles and to build a safe transportation environment. In addition
to VICS and ETC (Electronic Toll Collection System), which are already standard in Japan, the “VehicleInfrastructure Cooperative Systems that Support Safety Driving,” which combines cutting edge IT and vehicle
technology, is in development and has begun to be partially implemented.
•

The “ITS Spot Service” commenced in 2009 and corresponding products are available for purchase.
Mainly for use on highways, this service provides drivers with information related to road traffic andsafe driving that is transmitted from road infrastructures to car navigation systems through video andvoice.

•In the summer of 2011, Toyota introduced products corresponding to the driving safety support system(“DSSS”) which the National Police Agency has started operating. Mainly for use on normal roads, thissystem supports safe driving, including by preventing the driver from overlooking red lights, bytransmitting traffic control information (traffic lights and signs, etc.) and other local information fromroad infrastructures to automobiles.

•

Systems aimed at further reducing accidents, improving fuel efficiency and reducing CO2 emissions are
in development. Through direct and continuous exchange of information between vehicles and the road,other vehicles and pedestrians, these systems aim to mitigate side collisions and accidents involving
pedestrians, which have been difficult to mitigate to date. This also includes systems such as C-ACC(Co-operative Adaptive Cruise Control) which supports smooth acceleration and deceleration when
following behind another vehicle, and fuel efficient driving.

Toyota is committed to developing new ITS products. Toyota believes that intelligent transport systems will
become an integral part of its overall automotive operations and enhance the competitiveness of its vehicles. As
familiarity with and demand for ITS products grow, Toyota expects an increasing number of ITS products tobecome commercially available and achieve greater acceptance each year.

29Smart Communities
In April 2010, Toyota City was selected as a “Model Region for Next-Generation Energy Systems” by the
Ministry of Economy, Trade and Industry. Toyota has since joined the “Toyota City Low-Carbon Society
Verification Council” (established in August 2010), and has been carrying out experiments relating to the“Optimization of Local Energy Use in Households and Destinations (commercial and public facilities)” and“Establishment of a System for Low-Carbon Emission Transportation.” In addition, starting in 2014, Toyota will
launch an experimental ultra-compact electric vehicle sharing program in Grenoble, France, together with thecity of Grenoble and local companies.
In February 2013, Toyota established the “F-Grid Ohira, Miyagi Limited Liability Partnership,” a smart
community business which operates the “F-Grid” in the Sendai Hokubu Industrial Park in the village of Ohira,Miyagi, together with Toyota affiliated companies. The Partnership began supplying electricity and heat topartners in the industrial park in April 2013. This business aims to contribute to “creating a safe and securecommunity with the community and the industrial park working as one,” “revitalizing local industry” and“revitalizing the community.” Toyota believes that the elemental technologies developed through theseexperiments and businesses will help in the creation of new systems for society that meet differing social
environments and municipal needs, not just in Japan but around the world, in both developed and emerging
countries, and will play a role in the creation of energy and transportation infrastructure to help spread nextgeneration eco-cars.
Financial Services
Toyota’s financial services include loan programs and leasing programs for customers and dealers. Toyota
believes that its ability to provide financing to its customers is an important value-added service. In July 2000,
Toyota established a wholly-owned subsidiary, Toyota Financial Services Corporation (“TFSC”), to oversee themanagement of Toyota’s finance companies worldwide, through which Toyota aims to strengthen the overall
competitiveness of its financial business, improve risk management and streamline decision-making processes.
Toyota plans to expand its network of financial services, in accordance with its strategy of developing autorelated financing businesses in significant markets. Accordingly, Toyota currently operates financial services
companies in 35 countries and regions, which support its automotive operations globally.
Toyota’s revenues from its financial services operations were ¥1,421.0 billion in fiscal 2014, ¥1,170.6
billion in fiscal 2013 and ¥1,100.3 billion in fiscal 2012. In fiscal 2013, with strengthening economies
predominantly in the United States and emerging markets such as Asia, Toyota collaborated with dealers invarious countries and regions, and the balance of loan receivables increased steadily. In fiscal 2014, amid a
gradual recovery in markets including the United States, Europe and Japan, Toyota’s share of financing provided
for new car sales of Toyota and Lexus vehicles in regions where TFSC operates hit 36%, its highest level ever,and the balance of loan receivables, mainly in markets including the United States, China and Thailand,
continued to increase steadily as a result of the continued collaboration with dealers in various countries andregions and efforts to expand products and services that meet customer needs. Meanwhile, Toyota is making
efforts to provide both its customers and dealers with stable financial services by diversifying its funding
mechanisms with ABCP (Asset Backed Commercial Paper) and ABS (Asset Backed Securities), in addition to
mid- to long-term financings, primarily in commercial paper issuances, corporate bonds and bank borrowings.
Toyota continued to perform detailed credit appraisals and serve customers by monitoring bad debt and loan
payment extensions, and the percentage of credit losses remained low, at 0.28% and 0.23% in fiscal years 2014
and 2013, respectively. Toyota continues to work towards improving its risk management measures inconnection with credit and residual value risks.

30

Toyota Motor Credit Corporation is Toyota’s principal financial services subsidiary in the United States.
Toyota also provides financial services in 34 other countries and regions through various financial services
subsidiaries, including:•

Toyota Finance Corporation in Japan,•

Toyota Credit Canada Inc. in Canada,•

Toyota Finance Australia Ltd. in Australia,•

Toyota Kreditbank GmbH in Germany, and•Toyota Financial Services (UK) PLC in the United Kingdom.

Toyota Motor Credit Corporation provides a wide range of financial services, including retail financing,retail leasing, wholesale financing and insurance. Toyota Finance Corporation also provides a range of financial
services, including retail financing, retail leasing and credit cards. Toyota’s other finance subsidiaries provide
services including retail financing, retail leasing and wholesale financing.
In May 2011, Toyota established Toyota Financial Services India Limited, a financial services company, inIndia. Toyota Financial Services India Limited began its operations in June 2012 and has since expanded its
business to major cities such as Bangalore, Delhi and Mumbai. In January 2013, Toyota established a newleasing company, Toyota Motor Leasing (China) Co., Ltd., in China, which began its operations in April 2013. In
addition, in April 2013, Toyota established Toyota Financial Services Kazakhstan MFO LLP, a financial services
company, in Kazakhstan, which began its operations in January 2014.
Net finance receivables for all of Toyota’s dealer and customer financing operations were ¥13,731.2 billion
as of March 31, 2014, representing an increase of approximately 13.8% as compared to the previous year. The
majority of Toyota’s financial services are provided in North America. As of March 31, 2014, 57.1% of Toyota’s
finance receivables were derived from financing operations in North America, 11.4% from Asia, 10.8% from
Europe, 8.9% from Japan and 11.8% from other areas.
Approximately 52% of Toyota’s unit sales in the United States during fiscal 2014 included a finance orlease arrangement with Toyota. Because the majority of Toyota’s financial services operations are related to thesale of Toyota vehicles, a decrease in vehicle unit sales may lead to a contraction of Toyota’s financial services
operations.
The worldwide financial services market is highly competitive. Toyota’s competitors in retail financing andretail leasing include commercial banks, credit unions and other finance companies. Commercial banks and otherautomobile finance subsidiary companies serving their parent automobile companies are competitors of Toyota’s
wholesale financing activities. Competitors in Toyota’s insurance operations are primarily national and regional
insurance companies.
For information on Toyota’s finance receivables and operating leases, please see “Operating and Financial
Review and Prospects — Operating Results — Financial Services Operations.”
Retail Financing
Toyota’s finance subsidiaries acquire new and used vehicle installment contracts primarily from Toyota
dealers. Installment contracts acquired must first meet specified credit standards. Thereafter, the financecompany retains responsibility for installment payment collections and administration. Toyota’s financesubsidiaries acquire security interests in the vehicles financed and can generally repossess vehicles if customers
fail to meet their contractual obligations. Almost all retail financings are non-recourse, which relieves the dealers
from financial responsibility in the event of repossession. In most cases, Toyota’s finance subsidiaries require
their retail financing customers to carry automobile insurance on financed vehicles covering the interests of boththe finance company and the customer.
31

Toyota has historically sponsored, and continues to sponsor, special lease and retail programs by subsidizing
below market lease and retail contract rates.
Retail Leasing
In the area of retail leasing, Toyota’s finance subsidiaries acquire new vehicle lease contracts originatedprimarily through Toyota dealers. Lease contracts acquired must first meet specified credit standards after which
the finance company assumes ownership of the leased vehicle. The finance company is generally permitted totake possession of the vehicle upon a default by the lessee. Toyota’s finance subsidiaries are responsible forcontract collection and administration during the lease period. The residual value is normally estimated at thetime the vehicle is first leased. Vehicles returned to the finance subsidiaries at the end of their leases are sold byauction. For example, in the United States, vehicles are sold through a network of auction sites as well as throughthe Internet. In most cases, Toyota’s finance subsidiaries require lessees to carry automobile insurance on leased
vehicles covering the interests of both the finance company and the lessee.
Wholesale Financing
Toyota’s finance subsidiaries also provide wholesale financing primarily to qualified Toyota vehicle dealers
to finance inventories of new Toyota vehicles and used vehicles of Toyota and others. The finance companies
acquire security interests in vehicles financed at wholesale. In cases where additional security interests would be
required, the finance companies take dealership assets or personal assets, or both, as additional security. If adealer defaults, the finance companies have the right to liquidate any assets acquired and seek legal remedies.
Toyota’s finance subsidiaries also make term loans to dealers for business acquisitions, facilities
refurbishment, real estate purchases and working capital requirements. These loans are typically secured withliens on real estate, other dealership assets and/or personal assets of the dealers.
Insurance
Toyota provides insurance services in the United States through Toyota Motor Credit Corporation’s whollyowned subsidiary, Toyota Motor Insurance Services, Inc. (“TMIS”) and its wholly-owned insurance company
subsidiaries. Their principal activities include marketing, underwriting and claims administration. TMIS also
provides coverage related to vehicle service agreements and contractual liability agreements through Toyota
dealers to customers. In addition, TMIS also provides coverage and related administrative services to affiliatedcompanies of Toyota Motor Credit Corporation. Toyota dealers in Japan and in other countries and regions also
engage in vehicle insurance sales.
Other Financial Services
Toyota Finance Corporation launched its credit card business in April 2001 and began issuing Lexus credit
cards in 2005 when the Lexus brand was introduced in Japan. As of March 31, 2014, Toyota Finance Corporationhas 12.7 million card holders (including Lexus credit card holders).
All Other Operations
In addition to its automotive operations and financial services operations, Toyota is involved in a number ofother non-automotive business activities. Net sales for these activities totaled ¥1,151.2 billion in fiscal 2014,¥1,066.4 billion in fiscal 2013 and ¥1,048.9 billion in fiscal 2012. Sales to external customers of all otheroperations in fiscal 2014 represented 2.2% of Toyota’s net revenues for fiscal 2014. Substantially all of Toyota’s
revenues from other operations were derived in Japan.

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Housing
Toyota established its subsidiary Toyota Housing Corporation in April 2003 and has transferred to it productplanning and sales operations related to the manufacture and sale of housing. Furthermore, in order to quickly
and accurately grasp clients’ needs and to plan, develop and sell products on a timely basis, in April 2008,
Toyota transferred the product development operation to Toyota Housing Corporation. In October 2010, Toyota
spun-off its housing operations (project planning, technology development and manufacturing) through astatutory demerger and integrated them into Toyota Housing Corporation. Toyota believes that in the vastly
changing housing market environment, the integration of the development, manufacture and sales functions will
expedite decision making and lead to flexible business operations that will enable Toyota to better respond to theneeds of even more customers. In March 2005, Toyota, together with institutional investors, agreed to jointly
invest in Misawa Home Holdings, Inc. (“Misawa”; renamed Misawa Homes Co., Ltd.) pursuant to its request forassistance in its rehabilitation. In April 2010, determining that a stronger collaboration with Misawa would bedesirable in order to achieve further growth in the difficult operating environment of the housing industry,
Toyota Housing Corporation agreed to purchase Misawa shares from an institutional investor. In addition,
Toyota transferred ownership of Misawa to Toyota Housing Corporation in October 2010. Through these
activities, Toyota has strengthened the housing business of both companies.
Information Technology
See “— Enhancing Vehicle Functionality and Intelligent Transport Systems” for a description of Toyota’s
information technology.
Governmental Regulation, Environmental and Safety Standards
Toyota is subject to laws in various jurisdictions regulating the levels of pollutants generated by its plants.
In addition, Toyota is subject to regulations relating to the emission levels, fuel economy, noise and safety of its
products. Toyota has incurred significant costs in complying with these laws and regulations and expects to incur
significant compliance costs in the future. Toyota’s management views leadership in environmental protection as
an important competitive factor in the marketplace.
Vehicle Emissions
Japanese Standards
The Air Pollution Control Law of Japan and the Road Vehicle Law and the Law Concerning Special
Measures for Total Emission Reduction of Nitrogen Oxides from Automobiles in Specified Areas regulate
vehicle emissions in Japan. In addition, both the Noise Regulation Law and the Road Vehicles Law provide fornoise reduction standards on automobiles in Japan. Toyota’s vehicles manufactured for sale in Japan comply with
all Japanese exhaust emission and noise level standards.
U.S. Federal Standards
The federal Clean Air Act directs the Environmental Protection Agency (“EPA”) to establish and enforce air
quality standards, including emission control standards on passenger cars, light trucks and heavy-duty vehicles.
The EPA decided in February 2000 to adopt more stringent vehicle emission and fuel economy standards
applicable to passenger cars and light trucks produced in model years 2004 and beyond. In the standards adopted
for model years 2004 and beyond, manufacturers must guarantee that their vehicles meet the requirements for ten
years or 120 thousand miles, whichever occurs first. Manufacturers are not permitted to sell vehicles in the
United States that do not meet the standards. In April 2007, EPA regulations that further restrict emissions frompassenger cars and light trucks operating at cold temperatures became effective. The new emissions standards set
by these regulations were phased in between 2010 and 2013. Similar standards that further restrict emissions
from heavy-duty vehicles operating at cold temperatures will be phased in from 2012 to 2015. In March 2014,33

the EPA finalized new vehicle emission and fuel standards for passenger vehicles and light-duty trucks for modelyears 2017 and onwards. Under the new standards, emission standards for volatile organic compounds andnitrogen oxides are to be strengthened in phases from 2017 to 2025, bringing the emission standards in line withemission standards in California, resulting in the unification of the differing California and federal emission
standards. In addition, the particulate matter standards and fuel vapor emissions standards will also be
strengthened to be brought in line with California’s emission standards. This is expected to lead to reductions in
the burden on development, such as a reduction in the number of tests required for certification andstandardization of emission reduction systems.
Furthermore, in April 2007 the U.S. Supreme Court ruled that the EPA has the authority to regulate
automobile emissions of greenhouse gases. In response to this ruling, on April 1, 2010 the EPA and the federal
National Highway Traffic Safety Administration (“NHTSA”) issued a joint final rule to reduce the emission ofgreenhouse gases from passenger cars, light-duty trucks and medium-duty passenger vehicles for model years
2012 through 2016. These vehicles are required to meet an estimated combined average emissions level of
250 grams of carbon dioxide per mile, equivalent to 35.5 miles per gallon if the requirements were met throughfuel economy standards. The NHTSA also set Corporate Average Fuel Economy (“CAFE”) standards forpassenger cars and light trucks that will require manufacturers of those vehicles to meet an estimated combined
average fuel economy level of 34.1 miles per gallon in model year 2016. In addition, on August 28, 2012, the
EPA and the NHTSA jointly issued the final rule to further reduce greenhouse gas emissions and improve fueleconomy for passenger vehicles, light-duty trucks and medium-duty passenger vehicles for model years 2017
through 2025. In the final rule, these vehicles are required to meet an estimated combined average emission levelof 163 grams of carbon dioxide per mile in model year 2025, equivalent to 54.5 miles per gallon if theserequirements were met through improvements in fuel economy standards. The NHTSA also issued CAFE
standards for passenger vehicles and light trucks that would require manufacturers to meet an estimatedcombined average fuel economy level of 49.6 miles per gallon in model year 2025. According to the final rule,these standards are to be reevaluated by 2018.
As discussed above, the EPA has been granted the authority to set fuel standards in connection with theregulation of automobile emissions. In October 2010, the EPA approved the sale and use of fuel with a 15%
ethanol blend (“E15”) for model years 2007 and later passenger vehicles and light-duty trucks. The use of E15 is
not permitted for engines used in lawnmowers, small generators, motorbikes, boats and other vehicles andequipment. Subsequently, in February 2011, the EPA approved the use of E15 for model years 2001 and latervehicles. The Alliance of Automobile Manufacturers (“The Alliance”), of which Toyota Motor North America isa member, has stated that current vehicles are only guaranteed to function on fuel up to 10% ethanol and the
EPA’s permission is invalid. The Alliance created the Engine Products Group together with the Global
Automakers, the National Marine Manufacturers Association and the Outdoor Power Equipment Institute, and in
December 2010 the Engine Products Group brought suit against the EPA. The lawsuit was dismissed in January
2013 on the grounds that the Engine Products Group lacked standing, and in March 2013, the Engine ProductsGroup appealed the decision to the Supreme Court of the United States.
California Standards
Under the federal Clean Air Act, states are permitted to establish their own vehicle emission control
standards if they receive a waiver from the EPA. As a result, the California Air Resources Board (“CARB”)
established the “Low Emission Vehicle Program” and set emission standards for certain regulated pollutants thatwere phased in beginning in the 2004 model year. Under these standards most light trucks and passenger cars are
required to meet the same emissions standards, which were stricter than the federal standards. As part of theoriginal Low Emission Vehicle Program, the CARB also required that a specified percentage of a manufacturer’s
passenger cars and light trucks sold in California for all model years 1998 and after be “zero-emission vehicles”(vehicles producing no emissions of regulated pollutants). The CARB subsequently eliminated the zero-emission
vehicles mandate for model years before 2005, and decided to adopt a zero-emission vehicles requirement formodel years 2005 and beyond. This zero-emission vehicles requirement also permitted certain advanced34

technology vehicles such as PHV (Plug-in Hybrid Vehicles), hybrid cars and alternative fuel vehicles that meet“partial zero-emission vehicles requirements” to be granted partial qualification as EV (Electronic Vehicles) or
FCV (Fuel Cell Vehicle). Toyota’s battery-powered RAV4 EV compact sport-utility vehicle and the Toyota
FCHV qualify as zero-emission vehicles. The current Prius plug-in hybrid, Prius model and the Camry Hybrid
qualify as partial zero-emission vehicles under the zero-emission vehicles requirement adopted by the CARB.
Toyota intends to continue to develop additional advanced technologies and alternative fuel technologies thatwill allow other vehicles using such technologies to qualify as zero-emission vehicles or partial-zero-emission
vehicles.
In July 2002, the California legislature passed legislation that required the CARB to develop and adopt, by
the end of 2004, regulations that achieved the maximum feasible reduction in greenhouse gas emissions fromvehicles. In September 2004, the CARB adopted regulations that required a 20 to 30 percent reduction ofgreenhouse gas emissions from passenger vehicles, light trucks and other noncommercial vehicles to be phasedin between the 2009 and 2016 model years.
In December 2007, the EPA denied California’s request for a waiver under the Clean Air Act that would
have allowed the state to enforce these regulations to control greenhouse gas emissions from motor vehicles.
However, the EPA reconsidered its decision pursuant to a direction issued by the U.S. President in January 2009,and in July 2009 decided to allow the state to enforce such regulations.
In February 2010, the CARB enacted regulations that deem automobile manufacturers that produced
vehicles in model years 2012 through 2016 that are in compliance with the greenhouse gas emission regulationsof the EPA to be in compliance with California’s greenhouse gas emission regulations. Toyota is currently
developing plans to comply with the EPA regulations.
In January 2012, the CARB approved a new emission control program for model years 2017 to 2025 called
Advanced Clean Cars. The program covers greenhouse gas standards for cars and light trucks, reductions ofsmog-forming emissions, zero-emission vehicles regulations and clean fuels outlet regulations. The CARB is in
the process of developing specific rules for the program.
Other States’ Standards
The states of New York, Massachusetts, Connecticut, Maine, Maryland, New Jersey, New Mexico, Oregon,Pennsylvania, Rhode Island, Vermont, Washington, Delaware and Colorado have either adopted, or plan toadopt, regulations substantially similar to California’s zero-emission vehicles requirement and greenhouse gas
emissions regulations.
Canadian Standards
Canada has established vehicle emission standards equivalent to the federal standards in the United States,
including the heightened requirements that became applicable to passenger cars and light trucks in model years
2004 and beyond. In addition, in response to the strengthening of the federal standards in the United States
applicable to model years 2017 and beyond, Canada is currently considering the introduction of equivalent
vehicle emission standards and plans to announce proposed standards in July 2014. In October 2010, theCanadian government also established its proposed greenhouse gas emission regulations that are similar to thoseenacted by the EPA. Furthermore, certain Canadian provinces are currently considering enacting their own
regulations on vehicle emissions of greenhouse gases.
European Standards
The European Union adopted a directive that establishes increasingly stringent emissions standards forpassenger vehicles and light commercial vehicles in October 1998. Under this directive, the standards adopted
35

beginning with year 2000 require manufacturers to recall any vehicles which fail to meet the standards for five
years or 80 thousand kilometers, whichever occurs first. Toyota introduced vehicles complying with thisdirective in 1999. Under standards adopted in 2005, manufacturers are obligated to meet the more stringent
standards for five years or total vehicle miles of 100 thousand kilometers, whichever occurs first. In 2007, theEuropean Parliament adopted more stringent emission standards for passenger vehicles and light commercial
vehicles. The effective dates for phasing in these stricter standards for passenger cars were September 2009 forEuro 5 and September 2014 for Euro 6. For light commercial vehicles, the effective dates are September 2010 forEuro 5 and September 2015 for Euro 6. Euro 5 provides for lower emission levels for gasoline and diesel
powered vehicles and also extends the manufacturers’ responsibility for emission performance to total vehicle
miles of 160 thousand kilometers. The primary focus of Euro 6 is to limit further emissions of diesel powered
vehicles and bring them down to a level equivalent to gasoline powered vehicles.
Chinese Standards
Emissions regulations are being implemented throughout China pursuant to the Chinese National Standards(GB) of the Ministry of Environmental Protection of the People’s Republic of China, and the manufacture andsale of models not meeting these regulations are prohibited. As for passenger vehicles, pursuant toGB18352.3-2005, Level 3 Emissions Regulations (corresponding to Euro 3 standards) apply to new models after
July 2007, and Level 4 Emissions Regulations (corresponding to Euro 4 standards) apply to new models after
July 2010. New models after July 2008 are also required to be equipped with on-board diagnostics. As for dieselpowered commercial vehicles, pursuant to GB17691-2005, new Level 3 Emissions Regulations apply to models
after January 2007. Although Level 4 Emissions Regulations were to apply to new models after January 2010,and Level 5 Emissions Regulations were to apply to new models after January 2012, because the infrastructure tosupply sufficient diesel fuel meeting the Level 4 quality standards had yet to be put in place, the implementationof the Level 4 Emissions Regulations for all models was postponed to January 2014. In connection with suchdelay, the implementation of the Level 5 Emissions Regulations has been postponed. As for gasoline-poweredcommercial vehicles, pursuant to GB14762-2008, Level 3 Emissions Regulations apply to new models after
July 2009, and Level 4 Emissions Regulations apply to new models after July 2012. After the first day theregulation is implemented to a new model, all new models released during the following approximate one-year
period also become subject to the regulation. In addition, in some areas such as Beijing, Shanghai, Guangzhou,
and the Pearl River Delta region, the above mentioned regulations were implemented several years earlier byregional environmental preservation authorities with the authorization of the Chinese State Council. With respect
to passenger vehicles, pursuant to GB18352.5-2013, the Level 5 Emissions Regulations corresponding to Euro 5
is to be implemented throughout China for all models that are sold and registered after January 2018. Beijing has
already independently implemented its own Level 5 Emissions Regulations from March 2013. Shanghai has alsodecided to implement Level 5 Emissions Regulations pursuant to GB18352.5-2013 from May 2014 in advance ofother parts of China.
Compliance with new emission control standards will present significant technological challenges toautomobile manufacturers and will likely require significant expenditures. Examples of these challenges include
the development of advanced technologies, such as high performance batteries and catalytic converters, as wellas the development of alternative fuel technologies. Manufacturers that are unable to develop commercially
viable technologies within the time frames set by the new standards will lose their market share and will beforced to decrease the number of types of vehicles and engines in their principal markets.
Standards of Other Countries
Countries other than Japan, the United States, Europe and China are also proactively introducing emission
regulations. Countries in Eastern Europe and Asia, as well as Australia, Taiwan and Hong Kong, have consideredor implemented emission regulations.

36

Vehicle Fuel Economy
Japanese Standards
The Law Concerning the Rational Use of Energy requires automobile manufacturers to improve theirvehicles to meet specified fuel economy standards. Fuel economy standards are established according to thetypes of vehicles specified below, and are required to be met by either fiscal 2011 (April 2010-March 2011),
fiscal 2016 (April 2015-March 2016) or fiscal 2021 (April 2020-March 2021).
Among qualifying passenger vehicles are:•Vehicles which are designated in Article 75, Paragraph 1 of the Road Vehicles Law as type-designatedvehicles (“type-designated vehicles”) with 10 seats or less using gasoline, gas oil or LPG;•

Type-designated vehicles with 11 seats or more that are 3.5 tons or less in vehicle weight using gasoline
or gas oil; and•Type-designated vehicles with 11 seats or more that are over 3.5 tons in vehicle weight using gas oil, or
designated carbon monoxide emission control vehicles (“designated carbon monoxide emission control
vehicles”) which are designated in Article 75-2 Paragraph 1 of the Road Vehicles Law.

Among qualifying cargo vehicles are:•Type-designated vehicles that are 3.5 tons or less in vehicle weight using gasoline, gas oil or LPG; and•Type-designated vehicles that are over 3.5 tons in vehicle weight using gas oil or LPG, or designatedcarbon monoxide emission control vehicles.

Toyota is in compliance with the fuel economy standards that currently apply and is promoting theimprovement of its vehicles in order to achieve compliance with the standards that will apply beginning in fiscal
2016.
Japan is a signatory to the Framework Convention on Climate Change and has agreed to take measures toreduce its greenhouse gas emissions. Improved vehicle fuel economy is contributing to the reduction in carbon
dioxide emissions.
U.S. Standards
The Federal Motor Vehicle Information and Cost Savings Act requires automobile manufacturers to comply
with CAFE standards. Under this law, limits are imposed on the amount of regulated pollutants that may beemitted by new motor vehicles in the United States. A manufacturer is subject to substantial civil penalties if, in
any model year, its vehicles do not meet the CAFE standards. Manufacturers that exceed the CAFE standards
earn credits determined by the difference between the average fuel economy performance of their vehicles andthe CAFE standards. Credits earned for the five model years preceding the current model year, and credits
projected to be earned for the next three model years, can be used to meet CAFE standards in a current modelyear.
In April 2006, the NHTSA established CAFE standards applicable to light trucks for model year 2008 andbeyond. These CAFE standards aimed to shift the framework from one that used to be advantageous only tocompact car manufacturers to one that is fair to full line manufacturers. The requirements were changed so that
the CAFE standards are now determined by a sales rate based on vehicle size (measured by the area of the wheel
and wheel base) for each manufacturer.
In addition to the CAFE standards, there are multiple standards in the United States including the EPA’semission regulations and the California standard. Automobile manufacturers had called for uniform standards, as
they would need to comply with standards that varied by state if all standards became effective. On April 1, 201037

the EPA and the NHTSA issued a joint final rule to reduce the emission of greenhouse gases from passenger
cars, light-duty trucks and medium-duty passenger vehicles for model years 2012 through 2016. These vehicles
are required to meet an estimated combined average emissions level of 250 grams of carbon dioxide per mile,equivalent to 35.5 miles per gallon if the requirements were met through fuel economy standards. The NHTSA
also set CAFE standards for passenger cars and light trucks that will require manufacturers of those vehicles tomeet an estimated combined average fuel economy level of 34.1 miles per gallon in model year 2016.
Furthermore, the EPA and NHTSA joint final rule allows the two agencies and California standards to act in a
unified way, and creates a regulatory framework that makes compliance less burdensome for the manufacturers.
In addition, in December 2011, the EPA and the NHTSA issued a joint proposed rule to further reducegreenhouse gas emissions and improve fuel economy for passenger vehicles, light-duty trucks and medium-duty
passenger vehicles for model years 2017 through 2025. In the proposed rule, these vehicles would be required tomeet an estimated combined average emission level of 163 grams of carbon dioxide per mile in model year 2025,
equivalent to 54.5 miles per gallon if these requirements were met through improvements in fuel economy
standards. At the same time, the NHTSA also issued proposed CAFE standards for passenger vehicles and lighttrucks that would require manufacturers to meet an estimated combined average fuel economy level of 49.6 miles
per gallon in model year 2025. The final rule applying to model years 2017 to 2025 was announced on
August 28, 2012. The standards of fuel economy are stringent, and Toyota strives to meet the fuel economy
standards by further developing fuel-efficient technology, alternative fuel technology and other advanced
technology.
In addition, the Energy Tax Act of 1978 imposes a “gas guzzler” tax on automobiles with a fuel economy
rating below specified levels.
European Standards
The European Union has signed the Kyoto Protocol and agreed to reduce carbon dioxide emissions by 8%during the years 2008 to 2012, as measured from the 1990 base year. In early 1999, the European Commission
and the European Automotive Manufacturers Association (“ACEA”) reached a voluntary agreement which
establishes an average emissions target of 140 grams of carbon dioxide per kilometer for new cars sold in theEuropean Union in 2008 (the voluntary agreement applied to the 15 states who were members of the European
Union at that time). The Japan Automobile Manufacturers Association and the Korean Automobile
Manufacturers Association have also reached a voluntary agreement, similar to that entered into by the European
Commission, with the year 2009 as a target year.
In December 2008, the European Parliament approved a new regulation that establishes an average emission
standard of 130 grams of carbon dioxide per kilometer by 2012 for passenger vehicles sold in member states,
made effective in June 2009. The regulation will phase in gradually, initially requiring 65% of new cars tocomply with the new standards in 2012 and increasing to 100% of new cars in 2015. As a result of the new
regulations, different targets will apply to each manufacturer, based on their respective fleets of vehicles andweight. Penalties will apply to those manufacturers who fail to meet their targets from 2012, in amounts
corresponding to the degree of shortfall. Manufacturers failing to meet their targets between 2012 and 2018 will
incur penalties of between €5 and €95 per each gram of carbon dioxide per kilometer shortfall for each noncompliant vehicle, and such penalties will rise to €95 in 2019 and beyond. Furthermore, in June 2011, a newcarbon dioxide emission standard applicable to light commercial vehicles entered into force establishing an
average emissions target of 175 grams of carbon dioxide per kilometer. This regulation has the same basic
regulatory framework as passenger vehicles, raising the compliance rate from 70% in 2014 to 100% in 2017.
Furthermore, in February 2014, the European Parliament and Council adopted a regulation to reduce theaverage carbon dioxide emissions target for light commercial vehicles to 147 grams per kilometer beginning in
2020. In March 2014, the European Parliament and Council adopted a regulation to reduce the average carbon
dioxide emissions target for passenger vehicles to 95 grams per kilometer beginning in 2021.
38

An increasing number of European Union member states are introducing vehicle tax laws based on carbon
dioxide emission levels, pursuant to the directive issued by the European Commission in 2005. This trend is
expected to continue, in accordance with the recent increases in environmental awareness.
Chinese Standards
Fuel consumption regulations are being implemented pursuant to the Chinese National Standards (“GB”),
and the manufacture and sale of vehicle models not meeting these regulations are prohibited. As for passenger
vehicles, pursuant to GB19578-2004, Level 1 Fuel Consumption Regulations apply to new models after July
2005, and Level 2 Fuel Consumption Regulations apply to new models after January 2008. As for small
commercial vehicles, pursuant to GB20997-2007, Level 2 Fuel Consumption Regulations apply to new models
after February 2008, Level 1 Fuel Consumption Regulations apply to all vehicles as of January 2009, and Level 2
Fuel Consumption Regulations apply to all models as of January 2011. These regulations determine theconsumption standards that apply depending on the mass of the applicable vehicle, and set forth a method for
determining if each model has met the regulation. With respect to passenger vehicles, GB27999-2011 has been
issued to further strengthen fuel consumption regulations from 2012 and beyond. In these Level 3 Fuel
Consumption Regulations for passenger vehicles, the regulation framework was substantially revised, such as achange from regulations requiring each model to meet consumption standards to regulations requiring
automobile manufacturers to meet standards of average consumption across models. Furthermore, discussions on
the next Level 4 Fuel Consumption Regulations have commenced in order to achieve the national target for
average fuel efficiency for 2020.
Standards of Other Countries
As fuel prices increase and momentum gathers to prevent global warming, other countries in addition to
Japan, the United States, Europe and China are moving to introduce fuel consumption regulations, and Korea,
Mexico, Brazil, Taiwan and India have already decided to introduce fuel consumption regulations. Canada andVietnam are also actively considering the introduction of new fuel consumption regulations using the regulationsof Japan, Europe and the United States as a base, and may implement them by approximately 2015. Toyota
predicts that this trend will spread to other countries, and in the future many nations will consider new
regulations related to fuel consumption and CO2.
Vehicle Safety
Japanese Standards
In Japan, efforts have been made since 1998 to bring Japanese standards in line with the standards of theUnited Nations Economic Commission for Europe (“UNECE”).
With respect to standards that were previously brought in line with the UNECE standards, the safety
standards applicable to electric vehicles were amended by adding requirements relating to Rechargeable Energy
Storage Systems (“REESS”) such as a testing requirement for fire resistance. The new requirements will apply tovehicles that obtain new model codes or are converted into electric vehicles on or after July 2016.
With respect to standards that were newly brought in line with the UNECE standards, standards for braking
systems in buses, trucks and trailers will apply gradually to new vehicle models beginning in November 2014
and to existing vehicle models beginning in February 2017. Standards for the location and identification ofcontrol systems of vehicles other than two-wheeled vehicles and others will apply gradually to vehicles to be
manufactured on or after February 2017. Standards for lane departure warning systems in buses and medium or
heavy trucks will apply to vehicles beginning in August 2015. Standards for advanced emergency braking
systems will gradually apply to new vehicle models beginning in November 2014 and to existing vehicle models
beginning in September 2017. Standards for the forward field of vision of the vehicle driver will apply to newvehicle models beginning in November 2016 and to existing vehicle models beginning in November 2018.
39

Standards for child restraint systems were implemented in January 2014. Standards for motor vehicles using
compressed natural gas will apply to new vehicle models beginning in February 2017 and to existing vehicle
models beginning in February 2019.
With respect to standards that are scheduled to be newly brought in line with the UNECE standards,
standards for glass windows will apply to new vehicle models beginning in June 2017 and to existing vehicle
models beginning in June 2019. Standards for temporary-use spare units and tire pressure monitoring systems
will apply to vehicles to be manufactured on or after February 2018. Standards for steering systems will apply
gradually to new vehicle models to be manufactured on or after July 2016 and to existing vehicle models on orafter July 2018.
In addition to the above, preparations for the introduction of the UNECE safety standards for interior fittings(internal projections) have commenced.
Furthermore, in Japan, considerations regarding the standardization of brake override systems, thestrengthening of anti-spinal injury measures, and anti-drunk driving measures are currently under consideration.
Standards for motor vehicles using compressed hydrogen gas will be brought in line with the “Global
Technical Regulation (No. 13) on Hydrogen and Fuel Cell Vehicles,” and will apply to vehicles to be
manufactured on or after February 2017.
U.S. Standards
The U.S. National Traffic and Motor Vehicle Safety Act of 1966, or Safety Act, requires vehicles andequipment sold in the United States to meet various safety standards issued by the NHTSA. The Safety Act also
authorizes the NHTSA to investigate complaints relating to vehicle safety and to order manufacturers to recall
and repair vehicles found to have safety-related defects. The cost of these recalls can be substantial depending on
the nature of the repair and the number of vehicles affected.
The Transportation Recall Enhancement, Accountability and Documentation Act was enacted in the UnitedStates on November 1, 2000. This Act required the NHTSA to regulate the dynamic rollover standards and to
upgrade federal motor vehicle safety standards relating to tires. It also required the NHTSA to enhance its
authority to gather information potentially relating to motor vehicle defects. This Act substantially increases the
maximum civil penalties for violation of regulatory requirements and specifies possible criminal penalties forviolations of the federal Fraud and False Statements Act. In 2003, the NHTSA expanded its New Car Assessment
Program (“NCAP”) to implement consumer information programs for vehicle rollover resistance and child
restraints and, beginning in 2003, adopted extensive early warning defect reporting requirements. Regulations
regarding tire-pressure monitoring systems were strengthened in 2005.
Legislation on a transportation budget plan promoting a safe and efficient vehicle safety program fordrivers, the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEALU) was passed in August 2005. The legislation requires the NHTSA to propose and issue safety standards toreduce rollover accidents, to complete the creation of standards for the reduction of vehicle passengers released
from cars at the time of rollover accidents, to upgrade door lock standards, to complete the upgrade of roof crashstandards, to decide on the side impact protection standards for passengers in all seat locations, to review seatbelt wearing technology and complete a study that includes a proposal for improving the rate of seat belt usage,
to establish standards to display NCAP ratings on new car labels, and to complete the upgrade of the standard for
power windows that will require pulling up switches. Some actions have already been taken and completed in
response to the above requirements.
In February 2008, legislation to prevent non-traffic related injuries to young children caused by vehicles, the“Cameron Gulbransen Kids Transportation Safety Act,” was passed. Pursuant to this legislation, the NHTSA
40

finalized standards requiring vehicles to be equipped with rearview camera systems in order to ensure rearward
visibility to prevent children from being struck by backing vehicles and mandating the use of brake shiftinterlock systems.
In January 2011, legislation to improve the safety of the visually impaired and other pedestrians, the“Pedestrian Safety Enhancement Act of 2010,” was passed. The legislation requires the NHTSA to draft andfinalize standards for warning sounds of electric and hybrid vehicles. The NHTSA formally proposed minimum
sound standards in January 2013, and the standards are currently in the regulatory review process.
In response to the unintended acceleration issue in 2010, the NHTSA has started to examine measures tostrengthen safety standards, such as mandating brake override systems, mandating Event Data Recorders, or
EDR, and standardizing push-start switches.
In January 2014, the NHTSA proposed a regulation upgrading the federal motor vehicle safety standard forchild-restraint systems to protect child passengers in the case of side crashes. The proposed upgrades would
include a side impact test for car seats sold in the United States that are designed for children weighing up to
40 pounds. The NHTSA proposed that the regulation would go into effect three years after final rule publication.
Toyota actively invests in technology development designed to increase the safety of its vehicles. Toyota isdeveloping technologies to increase the availability of existing safety systems to all types of its vehicles. These
technologies include supplemental restraint system (“SRS”) airbags, anti-lock braking systems, side airbags,
curtain shield airbags, vehicle stability control and other safety features.
European Standards
In Europe, following the White Paper “European Transport Policy for 2010: Time to Decide” adopted in
2001, which targets halving the number of deaths caused by road accidents by 2010, various groups in different
fields have conducted research and analyses.
The European Commission and the ACEA have established CARS 21, a High Level Group that aims tostrengthen the competitiveness of the European automotive industry, and examined the recommendations withthe legal framework of a decade later in mind. The CARS 21 final report issued at the end of 2005 contains
recommendations relating to the simplification of legislation and road safety, among other issues, and indicates a
Ten Year Roadmap, and in February 2007, the European Commission issued a communication regarding the
CARS 21 final report, in which concrete action plans for future legislation were announced, and much legislation
had proceeded.
In 2009, based on the CARS 21 final report released in February 2007, the European Commission enacted a
new regulation and established a simplified framework, repealing more than 50 existing European Commission
directives regarding vehicle safety other than pedestrian protection, and replacing them with a single regulation
aimed at incorporating the UNECE standards. The new regulation also requires the adoption of advanced safetysystems. The EU Regulation directly incorporating the UNECE standards commenced in 2012 and requires
advanced safety systems, including requiring new type vehicle to have electronic stability control systems from2011, to introduce regulations relating to low rolling resistance tires in 2013, to require tire pressure monitoring
systems starting in 2012 and to require heavy vehicles to have advanced emergency braking systems and lane
departure warning systems from 2013. All of the technical requirements for these advanced safety systems werediscussed in the United Nations (the technical requirements for advanced emergency braking in medium-duty
passenger vehicles are under consideration by the United Nations). Further, application of UN regulation cameinto force from November 2012 for new vehicle types and from 2014 for all new vehicles sold in the EU market.
The new mandatory measures include electric car safety requirements and gear shift indicators.
In October 2010, CARS 21 was resumed in order to proceed with the realization of the “2020 Strategy”(CARS 2020) by the European Commission that aims for high-level, sustainable and comprehensive growth, and41

the CARS 21 final report was issued in June 2012. The final report addresses issues facing the widespread
adoption of electric vehicles, including charging infrastructure in the EU, establishing battery requirements,
adopting seat belt reminder devices for all seats, alcohol interlock devices, adopting speed management devices,establishing safety requirements for micro urban mobility, strengthening safety regulation to protect thevulnerable from collisions and the possibility of regulation in connection with preventative safety technology. In
November 2012, “CARS 2020: Action Plan for a competitive and sustainable automotive industry in Europe”
was issued based on the final report. The action plan is built on four core concepts, and within these concepts it
discusses enhancement of road safety, improving the market conditions within the EU and the implementation ofsmart regulations. Each item is given a target date and is to be monitored going forward. A stakeholder hearing
on the implementation of the CARS 2020 action plan took place in February 2014 in Brussels in preparation for
the Commission’s final report, which the Commission intended to present for adoption in March 2014.
On the widespread adoption of emergency call systems (“eCall”), the European Commission concluded thata legislative approach is effective as a result of the impact assessment by the Commission in 2011. Accordingly,
eCall is expected to become mandatory beginning in October 2015 for light-duty passenger vehicles and lightduty commercial vehicles using the framework of “Whole Vehicle Type Approval.” A proposed amendment iscurrently being considered between the European Council and the European Parliament, and detailed regulations
setting forth the technical standards of eCall are scheduled to be proposed by the end of 2014. Rulemaking
regarding eCall has also been proposed by the United Nations, and is also currently being considered. In addition,in the event the installation of eCall becomes mandatory in the EU, it will be necessary at the same time to build
infrastructure such as communication bases in the different member states of the EU, and rulemaking regarding
eCall is expected to also cover the creation of such infrastructure.
The possibility of regulation in connection with ITS and other advanced driver assist systems for 2020 andbeyond is also under consideration. In addition, the adoption of advanced emergency breaking systems and lane
departure warning systems on light vehicles, advanced emergency braking systems which detect pedestrians, andthe adoption of blind spot monitors, reverse system which detect pedestrians, reverse cameras and Evert Data
Recorders on trucks are also expected to be considered.
From April 2009, the applicable scope for Whole Vehicle Type Approval (“WVTA”) was extended to cover
all vehicle categories, and are being phased in over five years depending on vehicle category. Furthermore, anamendment was issued in 2011 which clarifies the categories (especially those for passenger and light-duty
commercial vehicles). Through this amendment, the criteria for light-duty commercial vehicles was clarified, andthere is a possibility that vehicles currently classified as light-duty commercial vehicles become classified as
passenger vehicles. In addition, revisions to EU regulations related to vehicle mass and dimensions were issued
in 2012. These revisions clarified the mass, criteria and definitions which comprise the base specifications forvehicles. In 2014, WVTA is scheduled to be amended for further enhancement and improvement together withthe revision of overall requirements based on a comprehensive review of the requirements for vehicle structures,
including the strengthening of the market surveillance requirements and general product safety requirements, aswell as revisions to the vehicle type definitions.
United Nations Regulations
The 1958 Agreement (“Agreement Concerning the Adoption of Uniform Technical Prescriptions for
Wheeled Vehicles, Equipment and Parts which can be Fitted and/or be Used on Wheeled Vehicles and theConditions for Reciprocal Recognition of Approvals Granted on the Basis of These Prescriptions”): Whileoriginally based on the European regulations, the UNECE standards are developing as an establishedinternational law, and Japan, Thailand, Malaysia and Egypt as well as other countries outside the EU havebecome members after the amendment in 1995, and many other countries are expected to join in the future. The
countries bound by the 1958 Agreement have incorporated the UNECE standards into their own domestic
policies (The EU and Japan have directly included the UNECE standards into their domestic legislations). Whileautomotive parts and vehicle systems are regulated by the UN regulations, there are currently no regulations with42

respect to “International Whole Vehicle Type Approval” such as those in Europe. Japan proposed legislation
establishing WVTA under the United Nations in 2016, and the matter is being deliberated by the United Nations.
If IWVTA (International Whole Vehicle Type Approval) is established, integration of global administrative
regulations of each country, and simplification of registration procedures are expected. Going forward,
amendments to each UNECE standard to reflect the objectives of the establishment of IWVTA will commence.
Due to the EU’s incorporation of the UN safety regulations since 2012, the UNECE standards are likely to
be further influenced by the EU’s needs.
On the other hand, an amendment to the 1958 Agreement is being considered with an aim towards
implementation in March 2016. Such amendment will increase the flexibility of the regulations, enabling
approvals to be granted for the old series of regulations according to the needs of the signatory countries to the1958 Agreement. Furthermore, the amendment also includes a provision that permits voting by proxy for voting
in connection with proposed UNECE standards, which is not permitted under the current 1958 Agreement. The
percentage of required votes will also be considered. If the percentage of required votes is increased from thecurrent two-thirds, the 1958 Agreement is expected to become fairer. Such amendment is expected to make the1958 Agreement more attractive to countries that are not currently party to the 1958 Agreement, and aims toincrease the number of signatory countries.
1998 Agreement (“Agreement Concerning the Establishing of Global Technical Regulations for Wheeled
Vehicles, Equipment and Parts which can be Fitted and/or be Used on Wheeled Vehicles”): As a US-ledagreement, the 1998 agreement aims to harmonize the technical regulations, and defines each regulation as a
Global Technical Regulation (“GTR”). At present, there are 14 GTRs in total. Currently, numerous provisions
are under discussion in order to include more regulations. The countries bound by the 1998 agreement are
required to incorporate the GTRs into their domestic laws. The 1998 agreement includes China and India thatwere not a part of the 1958 agreement, therefore, the direction taken by the GTRs will also influence thosecountries.
In 2012, discussions including the development of the GTRs for EVs started due to the needs in Japan, theUnited States and Europe.
Chinese Standards
Vehicle safety regulations in China were drafted with reference to the UNECE standards and cover almost
the same matters as the UNECE standards. However, these regulations also include unique provisions which take
into account the distinctive characteristics of the Chinese market environment and the rules differ from the latest
UNECE standards. As for future safety regulations, standards related to airbag technologies and standards related
to batteries, motors and the charging of electric vehicles are currently being planned.
Standards of Other Countries
Vehicle safety regulations in Canada are similar to those in the United States. In regions outside of North
America, adoption and conformity with the UNECE standards is widespread, including in those countries
without automotive manufacturing industries. The list of signatories to the 1958 agreement of the United Nations
continues to grow, and now includes Korea, Thailand and Malaysia in Asia, as well as Russia, South Africa,
Egypt and Morocco. In addition, ASEAN, pursuant to its economic community mission, has decided to adopt the
UNECE standards as its regional agreement. Latin America, India and countries in the Middle East that are notsignatories to the 1958 agreement of the United Nations are also moving forward to conform their respective
regulations to the UNECE standards or to adopt new regulations consistent with the UNECE standards.

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Environmental Matters
Japanese Standards
Toyota’s automotive operations in Japan are subject to substantial environmental regulation under laws suchas the Air Pollution Law, the Water Pollution Control Law, the Noise Regulation Law and the Vibration Control
Law. Under these laws, if a business entity establishes or alters any facility that is regulated by these laws, thebusiness entity is required to give prior notice to regulators, and if a business entity discharges, uses or stores
substances that are environmental burdens or causes noise or vibration from such facility, the business entity isalso required to comply with the applicable standards. Toyota is also subject to local regulations, which in somecases impose more stringent obligations than the Japanese central government requirements. Toyota has
complied with these regulations. Under the Waste Disposal and Public Cleaning Law, producers of industrial
waste must dispose of industrial waste in the manner prescribed in the Waste Disposal and Public Cleaning Law.
Toyota has also complied with the Waste Disposal and Public Cleaning Law.
The Soil Contamination Countermeasures Law of Japan requires that land owners conduct contamination
testing and submit a report at the time they cease to use hazardous substances, such as in connection with the saleof a former factory, or if there is a possibility of health hazards due to land contamination. If it is found that land
contamination exceeds a certain level, the relevant prefectural authority designates the area considered to becontaminated and orders the land owner to take necessary measures. Toyota is suitably managing its land inaccordance with the same law. In addition, under the Law on Recycling of End-of-Life Vehicles, vehicle
manufacturers are required to take back and recycle specified materials (automotive shredder residues, air bags
and fluorocarbons) of end-of-life vehicles and the provisions concerning such obligations of vehicle
manufacturers became effective in January 2005. Toyota has coordinated with relevant parties to establish avehicle take-back and recycle system throughout Japan. As a result, in fiscal 2014, Toyota achieved a recycling
rate of 96% for automobile shredder residue (the legal requirement being 50%) and 94% for air bags (the legal
requirement being 85%) and reached the targets set forth in this law.
U.S. Standards
Toyota’s assembly, manufacturing and other operations in the United States are subject to a wide range ofenvironmental regulation under the Clean Air Act, the Clean Water Act, the Resource Conservation andRecovery Act, the Pollution Prevention Act and the Toxic Substances Control Act. Toyota is also subject to avariety of state legislation that parallels, and in some cases imposes more stringent obligations than, federal
requirements. These federal and state regulations impose severe restrictions on air- and water-borne discharges ofpollution from Toyota facilities, the handling of hazardous materials at Toyota facilities and the disposal ofwastes from Toyota operations. Toyota is subject to many similar requirements in its operations in Europe,
Canada and other countries.
Pursuant to the Clean Air Act, the EPA has promulgated National Ambient Air Quality Standards(“NAAQS”) for six “criteria” pollutants, including for ozone and particulate matter. The Clean Air Act requiresthat the EPA review and possibly revise these NAAQS every five years. On December 14, 2012, the EPA madethe annual health-based particulate matter NAAQS more stringent, and the EPA is scheduled to complete its
review and possible revision of the ozone NAAQS in 2014. The revised annual health-based particulate matter
NAAQS, as well as any future NAAQS revisions, could lead to additional pollution control requirements on theindustry, including on Toyota’s manufacturing operations.
Toyota expects growing pressure in the next several years to further reduce emissions from motor vehicles
and manufacturing facilities.

44

European Standards
In October 2000, the European Union brought into effect a directive that requires member states topromulgate regulations implementing the following:•

automotive manufacturers shall bear all or a significant part of the costs for taking back end-of-life
vehicles sold after July 1, 2002 and dismantling and recycling those vehicles. Beginning January 1,
2007, this requirement became applicable to vehicles sold before July 1, 2002 as well;•automotive manufacturers may not use certain hazardous materials in vehicles sold after July 1, 2003;•

certified vehicles models sold after December 15, 2008 shall be re-usable and/or recyclable to aminimum of 85% by weight per vehicle and shall be re-usable and/or re-use as material or energy to aminimum of 95% by weight per vehicle; and•end-of-life vehicles must meet actual re-use and/or recycling of 80% and re-use and/or recovery of 85%,
respectively, of vehicle weight by 2006, rising respectively to 85% and 95% by 2015.

Laws to implement this directive came into effect in each of the European Union member states. Currently,
there are uncertainties surrounding the implementation of the applicable regulations in different European Union
member states, particularly regarding automotive manufacturer responsibilities and resultant expenses that may
be incurred.
In addition, under this directive, the member states must take measures to ensure that car manufacturers,
distributors and other auto-related economic operators establish adequate used vehicle collection and treatment
facilities and to ensure that hazardous materials and recyclable parts are removed from vehicles prior toshredding. This directive impacts Toyota’s vehicles sold in the European Union. Toyota accommodated, inoffering its products, any measures the European Union member states will choose to take in order to comply
with this directive.
Based on the legislation that has been enacted to date, Toyota has provided for its estimated liability related
to covered vehicles in existence as of March 31, 2014. The amount of estimated liability may change depending
on future legislation to be enacted and subject to other circumstances. Although Toyota does not expect its
compliance with the directive to result in significant cash expenditures, Toyota is continuing to assess the impactof this future legislation on its financial position, results of operations and cash flows.
The European Union has also issued directives and made proposals relating to the following subjects onenvironmental matters:•

emission standards that include a framework permitting member states to introduce fiscal incentives topromote early compliance; and•reform of rules governing automotive distribution and service. The block exemption on distribution has
been amended so that dealers may engage in cross-border sales actively within the European Union andopen additional facilities for sales and services. Additionally, dealers may no longer be required bymanufacturers to operate both sales and service facilities side by side.

In December 2011, the European Commission proposed to reduce noise produced by cars, vans, buses,
coaches and light and heavy trucks. As proposed, noise limit values would ultimately be lowered by four
A-weighted decibels for vehicles other than trucks, and three A-weighted decibels for trucks. Compliance would
be achieved in three steps over a 10 to 12 year period once the proposal is finalized. In April 2014, the European
Council adopted this proposal and the European Parliament endorsed the Council’s position.
Toyota believes that its operations are materially in compliance with environmental regulatory requirements
concerning its facilities and products in each of the markets in which it operates. Toyota continuously monitorsthese requirements and takes necessary operational measures to ensure that it remains in material compliancewith all of these requirements.
45

Toyota believes that environmental regulatory requirements have not had a material adverse effect on its
operations. However, compliance with environmental regulations and standards has increased costs and is
expected to lead to higher costs in the future. Therefore, Toyota recognizes that effective environmental costmanagement will become increasingly important. Moreover, innovation and leadership in the area ofenvironmental protection are becoming increasingly important to remain competitive in the market. As a result,
Toyota has proceeded with the development and production of environmentally friendly technologies, such as
hybrid vehicles, fuel-cell vehicles and high fuel efficiency, low emission engines.
In addressing environmental issues, based on an assessment of the environmental impact of its products
through their life cycles, Toyota, as a manufacturer, strives to take all possible measures in each life stage of a
product, from development through production and sales, and continues to work toward technologicalinnovations to make efficient use of resources and to reduce the burden on the environment.
Disclosure of Iranian Activities under Section 13(r) of the Securities Exchange Act of 1934
Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012 added Section 13(r) to the
Securities Exchange Act of 1934, as amended. Section 13(r) requires an issuer to disclose in its annual orquarterly reports, as applicable, whether it or any of its affiliates knowingly engaged in certain activities,
transactions or dealings relating to Iran or with designated natural persons or entities involved in terrorism or the
proliferation of weapons of mass destruction. Pursuant to Section 13(r), Toyota is disclosing the following
information.
During the fiscal year ended March 31, 2014:•

Toyota Tourist International, Inc., a majority-owned subsidiary of Toyota, obtained eight visas from the
Iranian embassy in Japan in connection with certain travel arrangements.

•

Tokyo Toyota Motor Co., Ltd., a wholly-owned indirect subsidiary of Toyota, performed maintenanceservices for Toyota vehicles owned by the Iranian embassy in Japan.

Altogether, the above activities contributed an insignificant amount in gross revenues and net profit to
Toyota. Toyota believes that none of the above transactions subject it or its affiliates to U.S. sanctions. Toyota
Tourist International intends to cease conducting the activities described above. Tokyo Toyota Motor may, if
requested by the Iranian embassy in Japan, continue to perform maintenance services relating to vehicles owned
by such embassy, in accordance with applicable laws and regulations, in order to honor Toyota’s commitment tothe safety and reliability of its vehicles.
Research and Development
Toyota’s research and development activities focus on the environment and energy, safety,
IT/ITS technology and product development. For a detailed discussion of the company’s research anddevelopment policies for the last three years, see “Operating and Financial Review and Prospects — Researchand Development, Patents and Licenses”.

46

The following table provides information for Toyota’s principal research and development facilities.
Facility

Principal Activity

Japan
Toyota Technical Center . . . . . . . . . . . . . . . .

Product planning, style, design and evaluation

Tokyo Design Research & Laboratory . . . . .

Research of advanced styling designs

Higashi-Fuji Technical Center . . . . . . . . . . .

Advanced research and development

Shibetsu Proving Ground . . . . . . . . . . . . . . .

Vehicle testing and evaluation

Tokyo Development Center . . . . . . . . . . . . .

Advanced development of electronics

United States
Toyota Motor Engineering andManufacturing North America, Inc. . . . . .

North American production and product planning,
upper body planning, evaluation

Calty Design Research, Inc. . . . . . . . . . . . . .

DesignToyota Research Institute of North America(“TRI-NA”) . . . . . . . . . . . . . . . . . . . . . . . .

Advanced research relating to “energy and environment”,“safety” and “mobility infrastructure”

EuropeToyota Motor Europe NV/SA . . . . . . . . . . . .

Upper body planning for European production, advanced
research

Toyota Europe Design Development
S.A.R.L. . . . . . . . . . . . . . . . . . . . . . . . . . .

DesignToyota Motorsport GmbH . . . . . . . . . . . . . .

Development of motor sports vehicles

Asia PacificToyota Motor Asia Pacific Engineering andManufacturing Co., Ltd. . . . . . . . . . . . . . .

Production, planning and evaluation of vehicles that are
produced in Australia and Asia

Toyota Technical Center Asia Pacific
Australia Pty, Ltd. . . . . . . . . . . . . . . . . . . .

Production, planning and evaluation of vehicles that are
produced in Australia and Asia

China
Toyota Motor Engineering andManufacturing (China) Co., Ltd. . . . . . . .

Research of new, low-energy vehicle technology, vehicle
evaluation and quality assurance in China

The success of Toyota’s research and development activities is a key element of Toyota’s strategy. The
effectiveness of Toyota’s research and development activities is subject to a number of factors, some of which
are not in Toyota’s control. These factors include the introduction of innovations by Toyota’s competitors that
may reduce the value of Toyota’s initiatives and Toyota’s ability to convert its research and development into
commercially successful technologies and products.
Components and Parts, Raw Materials and Sources of Supply
Toyota purchases parts, components, raw materials, equipment and other supplies from multiple competing
suppliers located around the world. Toyota works closely with its suppliers to pursue the most optimalpurchasing possible. Toyota believes that this policy encourages technological innovation, cost reduction andother measures to strengthen its vehicle competitiveness. No single supplier accounted for more than 5% of
Toyota’s consolidated purchases of raw materials and parts during fiscal 2014, except for Denso Corporation, anaffiliated company of Toyota, which supplied approximately 10% of Toyota’s purchases during fiscal 2014.
Toyota plans to continue purchases based on the same principle and does not anticipate any difficulty inobtaining stable supplies in the foreseeable future.
47

Because Toyota had more than 50 overseas operations in 27 countries and regions as of December 31, 2013,procurement of parts and components is being carried out not only locally in the country of the production site
but also from third countries, and the distribution network has become increasingly more complex. In order torealize timely and efficient distribution at the same time as keeping total costs at a minimum, Toyota is
promoting efforts to optimize each stage of the supply-chain. To this end, Toyota has developed a standardized
system of global distribution and is supporting the operation of the system at each production base. The use of
the global distribution system aims at implementing parts procurement that meets changes in vehicle production
in a timely manner. These varying efforts, combined together, have led to maximized customer satisfaction, as
well as to building a good working relationship with Toyota’s suppliers.
Toyota aims to share information and collaborate among the procurement divisions in each of the regions
throughout the world in order to purchase parts and materials from the most competitive suppliers among Toyota
factories located in various areas worldwide. By doing so, Toyota aims to boost the efficiency of its sourcing
from external suppliers. In addition, Toyota has been working on a cost reduction measure referred to as
RR-CI activities. RR-CI activities aim to improve competitive power through thorough localization, sharing partsand components, and manufacturing reforms together with producing products matching customers’ needs ineach region and vehicle category. Urgent VA (value analysis) Activities began in fiscal 2008 and developed into
All-Toyota VA Activities in the beginning of fiscal 2010, as part of Toyota’s ongoing unified cost reduction
effort with suppliers for the various types of vehicles already on sale. In addition, Toyota has been working on
the TNGA to achieve sweeping advances in both product appeal and cost reductions by sharing more parts andcomponents, as well as through various other perspectives.
In fiscal 2014, market prices of raw materials such as steel generally increased in comparison to the priorfiscal year due in part to the depreciation of the yen. The direction of prices is still unforeseeable. Toyota is
continually promoting cost reduction efforts, such as reducing the amount of raw materials it uses.
Toyota’s ability to continue to obtain supplies in an efficient manner is subject to a number of factors, someof which are not in Toyota’s control. These factors include the ability of its suppliers to provide a continued
source of supplies and the effect on Toyota of competition by other users in obtaining the supplies.
Intellectual Property
Toyota holds numerous Japanese and foreign patents, trademarks, design patents and some utility model
registrations. It also has a number of applications pending for Japanese and foreign patents. While Toyota
considers all of its intellectual property to be important, it does not consider any one or group of patents,
trademarks, design patents or utility model registrations to be so important that their expiration or termination
would materially affect Toyota’s business.

48

Capital Expenditures and Divestitures
Set forth below is a chart of Toyota’s principal capital expenditures between April 1, 2011 and March 31,
2014, the approximate total costs of such activity, as well as the location and method of financing of suchactivity, presented on a “by subsidiary” basis and as reported in Toyota’s annual Japanese securities report filedwith the director of the Kanto Local Finance Bureau.

Description of Activity

Japan
Investment primarily in technology and products by
Toyota Motor Corporation . . . . . . . . . . . . . . . . . . . . . . .

Investment primarily in technology and products byHino Motors, Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment primarily in technology and products by
Daihatsu Motor Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . .
Investment primarily in technology and products by
Toyota Auto Body Co., Ltd. . . . . . . . . . . . . . . . . . . . . . .
Investment primarily in technology and products by
Toyota Motor Hokkaido, Inc. . . . . . . . . . . . . . . . . . . . . .
Outside of Japan
Investment primarily to promote localization by
Toyota Motor Thailand Co., Ltd. . . . . . . . . . . . . . . . . . .
Investment primarily to promote localization by
Toyota Motor Manufacturing Canada Inc. . . . . . . . . . . .
Investment primarily to promote localization by
Toyota do Brasil Ltda. . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment primarily to promote localization by
P.T. Toyota Motor Manufacturing Indonesia . . . . . . . . .
Investment primarily to promote localization by
Toyota Motor Manufacturing, Indiana, Inc. . . . . . . . . . .
Investment primarily to promote localization by
P.T. Astra Daihatsu Motor . . . . . . . . . . . . . . . . . . . . . . .
Investment primarily to promote localization by
Toyota Motor Manufacturing, Kentucky, Inc. . . . . . . . .
Investment primarily to promote localization by
Siam Toyota Manufacturing Co., Ltd. . . . . . . . . . . . . . .
Investment primarily to promote localization by
Toyota Motor Europe NV/SA . . . . . . . . . . . . . . . . . . . .
Investment primarily in leased automobiles by
Toyota Motor Credit Corporation . . . . . . . . . . . . . . . . .

49

Primary
Method ofFinancing

Total Cost
(Yen in billions)

Location

582.5

Japan

Internal funds,
financingfrom issuanceof bonds, etc.

89.3

Japan

Internal funds

64.2

Japan

Internal funds

56.7

Japan

Internal funds

39.3

Japan

Internal funds

123.7

ThailandInternal funds

86.1

CanadaInternal funds

80.0

BrazilInternal funds

79.5

Indonesia

Internal funds

62.6

United States

Internal funds

59.5

Indonesia

Internal funds

55.7

United States

Internal funds

43.5

ThailandInternal funds

40.8

BelgiumInternal funds

3,077.8

United States

Internal funds,
financingfrom issuanceof bonds, etc.

Set forth below is information with respect to Toyota’s material plans to construct, expand or improve its
facilities between April 2014 and March 2015, presented on a “by subsidiary” basis and as reported in Toyota’s
annual Japanese securities report filed with the director of the Kanto Local Finance Bureau.
Total Cost
(Yen in billions)

Location

Primary
Method ofFinancingJapan
Investment primarily in manufacturing facilities by
Toyota Motor Corporation . . . . . . . . . . . . . . . . . . . . . . . . . .

260.0

Japan

Internal funds

Investment primarily in manufacturing facilities byHino Motors, Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

45.0

Japan

Internal funds
and borrowings

Description of Activity

Outside of Japan
Investment primarily in manufacturing facilities by
Toyota Motor Manufacturing, Kentucky, Inc. . . . . . . . . . . .
Investment primarily in manufacturing facilities by
Toyota Motor Manufacturing, Texas, Inc. . . . . . . . . . . . . . .
Investment primarily in manufacturing facilities by
Toyota Argentina S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment primarily in manufacturing facilities by
Toyota Motor Europe NV/SA . . . . . . . . . . . . . . . . . . . . . . .

49.6

United States Internal funds

33.7

United States Internal funds

30.5

Argentina

Internal funds
and borrowings

27.7

BelgiumInternal funds

Set forth below is additional information with respect to Toyota’s material plans to construct, expand or
improve its facilities.
Tohoku Region Plant. In April 2008, Toyota decided to build an engine plant in Kurokawa, Miyagi
Prefecture, Japan. However, while the commencement of production at this plant, which was initially expected tooccur at the end of 2010, was postponed, Toyota Motor Tohoku Corporation (“Toyota Tohoku”) commenced
assembly of small-size engines from the end of 2012. Toyota Tohoku merged with Kanto Auto Works, Ltd. andCentral Motor Co., Ltd. in July 2012 and became Toyota Motor East Japan, Inc.
Sorocaba Plant. In August 2010, Toyota decided to construct a vehicle plant in Sorocaba, Brazil. This plantis producing the Etios small vehicle introduced in India with an annual production capacity of 70 thousand units.
The plant commenced production in September 2012.
Karawang No. 2 Plant. In November 2011, Toyota decided to establish a vehicle plant in Karawang, West
Java, Indonesia. Production at the facility commenced in March 2013. Production capacity at the time of launchof the plant was 70 thousand units, and this was increased to 120 thousand units in 2014. The plant is also
expected to produce new vehicles that meet market demand.
Toyota does not collect information on the amount of expenditures already paid for each plant underconstruction because Toyota believes that it is difficult and it would require unreasonable effort or expense to
identify and categorize each expenditure item with reasonable accuracy as past and future expenditures. Toyota’s
construction projects consist of numerous expenditures, each of which is continually being adjusted and incurredin variable and constantly changing amounts as part of the overall work-in-progress.

50

Seasonality
Toyota has historically experienced slight seasonal fluctuations in unit sales. For each of the past three fiscal
years, Toyota’s unit sales levels have been highest in March, with approximately 10% to 12% of annual unit
sales generated during that month, and for each of the remaining months, its unit sales have generated
approximately 6% to 9% of its annual unit sales.
Legal Proceedings
Product Recalls
From time-to-time, Toyota issues vehicle recalls and takes other safety measures including safety campaigns
relating to its vehicles. In November 2009, Toyota announced a safety campaign in North America for certain
models of Toyota and Lexus vehicles related to floor mat entrapment of accelerator pedals, and later expanded it
to include additional models. In January 2010, Toyota announced a recall in North America for certain models of
Toyota vehicles related to sticking and slow-to-return accelerator pedals. Also in January 2010, Toyota recalledin Europe, China and other regions certain models of Toyota vehicles related to sticking accelerator pedals. In
February 2010, Toyota announced a worldwide recall related to the software program that controls the antilock
braking system (“ABS”) in certain vehicle models including the Prius. Set forth below is a description of theremaining claims, lawsuits and government investigations involving Toyota in the United States relating to theserecalls and other safety measures.
Class Action and Consolidated Litigation
Approximately 200 putative class actions and more than 500 individual product liability personal injury
cases have been filed since November 2009 alleging that certain Toyota, Lexus and Scion vehicles containdefects that lead to unintended acceleration. All of the class actions and many of the product liability personal
injury, warranty and lemon law cases were consolidated either in a consolidated action in the United States
District Court for the Central District of California or in a consolidated action in California state court.
In December 2012, Toyota and the plaintiffs announced that they had reached an agreement to settle theeconomic loss claims in the consolidated federal action. In fiscal 2013, Toyota recorded a $1.1 billion pre-tax
charge against earnings to cover the estimated costs of this economic loss resolution and other potential recallrelated resolutions. In July 2013, the court signed the order and judgment granting final approval of thesettlement and dismissing the economic loss cases. Various objectors appealed the court’s rulings, but all of theseappeals have been dismissed and the settlement is final.
Although the settlement does not cover product liability personal injury claims in the consolidated federal
action or pending in various state courts in the United States, the judges overseeing the federal and California
consolidated actions have approved an Intensive Settlement Process (“ISP”) for the product liability personal
injury claims in those actions. Under the ISP, all cases are stayed pending completion of a process to assess
whether they can be resolved on terms acceptable to the parties. Cases not resolved after completion of the ISP
will then proceed to discovery and toward trial.
Beginning in February 2010, Toyota was sued in approximately 20 putative class actions alleging defects inthe antilock braking system in various hybrid vehicles that cause the vehicles to fail to stop in a timely manner
when driving in certain road conditions. These cases were consolidated into two actions, one in the United States
District Court for the Central District of California and one in the Los Angeles County Superior Court. In
January 2013, the Court in the federal case issued an order denying the plaintiff’s motion for class certificationand granting summary judgment in favor of Toyota on the claims of the principal named plaintiff for the cases
relating to recalled vehicles. In July 2013, the court denied the motion for class certification for claims related tovehicles that were not recalled, and that ruling has been appealed.

51

While Toyota has resolved or is attempting to resolve many of the outstanding matters, Toyota believes thatit has meritorious defenses to all of them and will vigorously defend those matters not resolved.
Government Investigations
In February 2010, Toyota received a subpoena from the U.S. Attorney for the Southern District of New
York and a voluntary request and subpoena from the SEC primarily seeking documents related to unintended
acceleration and certain financial records. This began as a coordinated investigation and has included interviewsof Toyota and non-Toyota witnesses, as well as production of documents. In March 2014, Toyota announced thatit entered into a deferred prosecution agreement (“DPA”) with the U.S. Attorney’s Office for the Southern
District of New York to resolve its investigation. The matter was resolved pursuant to the DPA, which provided
for a $1.2 billion payment to the U.S. government, and Toyota recorded a $1.2 billion charge against earnings infiscal 2014. The agreement also provides for an independent monitor to review and assess policies andprocedures relating to Toyota’s safety communications process, its process for sharing vehicle accident
information internally and its process for preparing and sharing certain technical reports. In April 2014, the staffof the SEC notified Toyota that it has concluded its investigation and it does not intend to recommend that the
SEC institute an enforcement action regarding this matter.
Beyond the amounts accrued for the recall-related matters, Toyota is unable to estimate a range ofreasonably possible loss, if any, for the other recall-related matters because (i) many of the proceedings are inevidence gathering stages, (ii) significant factual issues need to be resolved, (iii) the legal theory or nature of theclaims is unclear, (iv) the outcome of future motions or appeals is unknown and/or (v) the outcomes of othermatters of these types vary widely and do not appear sufficiently similar to offer meaningful guidance. Toyota
continues to evaluate these matters and expects that it may have resolution discussions from time to time in someof them. Although Toyota cannot estimate a reasonable range of loss based on currently available information,
the resolution of these matters could have an adverse effect on Toyota’s financial position, results of operations
or cash flows.
Other Proceedings
Toyota has various other legal actions, other governmental proceedings and other claims pending against it,
including other product liability claims in the United States. For the same reasons discussed above relating to therecall-related legal proceedings, Toyota is unable to estimate a range of reasonably possible loss, if any, beyond
the amounts accrued, with respect to these other proceedings. Based upon information currently available to
Toyota, however, Toyota believes that its losses from these matters, if any, would not have a material adverse
effect on Toyota’s financial position, results of operations or cash flows.

52

4.C ORGANIZATIONAL STRUCTURE
As of March 31, 2014, Toyota Motor Corporation had 264 Japanese subsidiaries and 278 overseas
subsidiaries. The following table sets forth for each of Toyota Motor Corporation’s principal subsidiaries, thecountry of incorporation and the percentage ownership interest and the voting interest held by Toyota Motor
Corporation.
Country ofIncorporation

Name of Subsidiary

Toyota Financial Services Corporation . . . . . . . . . . . . . . . . . . . . . . . . .
JapanHino Motors, Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan
Toyota Motor Kyushu, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
JapanDaihatsu Motor Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan
Toyota Finance Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan
Toyota Auto Body Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan
Toyota Motor East Japan, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan
Toyota Motor Engineering & Manufacturing North America, Inc. . . . United States
Toyota Motor Manufacturing, Kentucky, Inc. . . . . . . . . . . . . . . . . . . . United States
Toyota Motor North America, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States
Toyota Motor Credit Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States
Toyota Motor Manufacturing, Indiana, Inc. . . . . . . . . . . . . . . . . . . . . . United States
Toyota Motor Manufacturing, Texas, Inc. . . . . . . . . . . . . . . . . . . . . . . United States
Toyota Motor Sales, U.S.A., Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States
Toyota Motor Manufacturing Canada Inc. . . . . . . . . . . . . . . . . . . . . . .
CanadaToyota Credit Canada Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CanadaToyota Canada Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CanadaToyota Motor Europe NV/SA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BelgiumToyota Motor Manufacturing France S.A.S. . . . . . . . . . . . . . . . . . . . .
FranceToyota Kreditbank GmbH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Germany
Toyota Motor Finance (Netherlands) B.V. . . . . . . . . . . . . . . . . . . . . . . Netherlands
Toyota Motor Manufacturing (UK) Ltd. . . . . . . . . . . . . . . . . . . . . . . . . United Kingdom
Toyota Financial Services (UK) PLC . . . . . . . . . . . . . . . . . . . . . . . . . . United Kingdom
Toyota (GB) PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United Kingdom
OOO “TOYOTA MOTOR” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
RussiaToyota Motor (China) Investment Co., Ltd. . . . . . . . . . . . . . . . . . . . . .
China
Toyota Motor Finance (China) Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . .
China
P.T. Toyota Motor Manufacturing Indonesia . . . . . . . . . . . . . . . . . . . .
Indonesia
Toyota Motor Asia Pacific Pte Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Singapore
Kuozui Motors, Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TaiwanToyota Leasing (Thailand) Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . .
ThailandToyota Motor Thailand Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ThailandToyota Motor Asia Pacific Engineering and Manufacturing Co.,
Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ThailandToyota Motor Corporation Australia Ltd. . . . . . . . . . . . . . . . . . . . . . . .
Australia
Australia
Toyota Finance Australia Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Toyota Argentina S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Argentina
Toyota do Brasil Ltda. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BrazilToyota South Africa Motors (Pty) Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . South Africa

53

Percentage
Ownership
Interest

Percentage
VotingInterest

100.0050.21
100.0051.33
100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.0051.00
100.00100.00100.00100.00100.00100.00100.00100.00100.00100.0095.00
100.00
70.00
86.39
86.43

100.0050.42
100.0051.50
100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.0051.00
100.00100.00100.00100.00100.00100.00100.00100.00100.00100.0095.00
100.00
70.00
86.39
86.43

100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.004.D PROPERTY, PLANTS AND EQUIPMENT
As of December 31, 2013, Toyota and its affiliated companies produce automobiles and related components
through more than 50 overseas manufacturing organizations in 27 countries and regions besides Japan. The
facilities are located principally in Japan, the United States, Canada, the United Kingdom, France, Turkey,
Thailand, China, Taiwan, India, Indonesia, South Africa, Australia, Argentina and Brazil.
In addition to its manufacturing facilities, Toyota’s properties include sales offices and other sales facilities
in major cities, repair service facilities, and research and development facilities.
The following table sets forth information, as of March 31, 2014, with respect to Toyota’s principal
facilities and organizations, all of which are owned by Toyota Motor Corporation or its subsidiaries. However,small portions, all under approximately 20%, of some facilities are on leased premises.

Facility or Subsidiary NameLand Area(thousandsquareNumber ofmeters) Employees

Location

Principal
Products orFunctionsJapan (Toyota Motor Corporation)
Tahara Plant . . . . . . . . . . . . . . . . . . . . . Tahara City, Aichi Pref.
Higashi-Fuji Technical Center . . . . . . . Susono City, Shizuoka Pref.

4,029
2,041

7,576
2,876

Automobiles
Research andDevelopment

Toyota Head Office and TechnicalCenter . . . . . . . . . . . . . . . . . . . . . . . . Toyota City, Aichi Pref.

1,930

21,323

Motomachi Plant . . . . . . . . . . . . . . . . . Toyota City, Aichi Pref.
Takaoka Plant . . . . . . . . . . . . . . . . . . . . Toyota City, Aichi Pref.
Tsutsumi Plant . . . . . . . . . . . . . . . . . . . Toyota City, Aichi Pref.
Kamigo Plant . . . . . . . . . . . . . . . . . . . . Toyota City, Aichi Pref.
Kinu-ura Plant . . . . . . . . . . . . . . . . . . . Hekinan City, Aichi Pref.
Honsha Plant . . . . . . . . . . . . . . . . . . . . . Toyota City, Aichi Pref.
Nagoya Office . . . . . . . . . . . . . . . . . . . Nagoya City, Aichi Pref.

1,594
1,311
937
868
836
551
3

7,160
3,635
4,644
2,942
3,006
1,838
2,212

Research andDevelopment
Automobiles
Automobiles
Automobiles
Automobile parts
Automobile parts
Automobile parts
Office

8,533
5,820
2,616

11,788
11,686
7,274

Automobiles
Automobiles
Automobiles

2,257
1,988

11,6097,179

Automobiles
Automobiles

4,340

9,627

Automobiles

4,756
3,774
6,237

6,591
6,503
5,224

Automobiles
Sales facilities
Automobiles

4,348

4,466

Automobiles

Japan (Subsidiaries)
Daihatsu Motor Co., Ltd. . . . . . . . . . . . Ikeda City, Osaka, etc.
Hino Motors, Ltd. . . . . . . . . . . . . . . . . . Hino City, Tokyo, etc.
Toyota Motor East Japan, Inc. . . . . . . . Kurokawa-gun, Miyagi Pref.,etc.
Toyota Auto Body Co., Ltd. . . . . . . . . . Kariya City, Aichi Pref., etc.
Toyota Motor Kyushu, Inc. . . . . . . . . . Miyawaka City, Fukuoka Pref.,etc.
Outside Japan (Subsidiaries)
Toyota Motor Thailand Co., Ltd. . . . . . Samutprakarn, Thailand
Toyota Motor Manufacturing Canada,Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . Ontario, Canada
Toyota Motor Sales, U.S.A., Inc. . . . . . California, U.S.A.
Toyota do Brasil Ltda. . . . . . . . . . . . . . Sao Paulo, Brazil
Toyota Motor Manufacturing, Indiana,
Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . Indiana, U.S.A.

Toyota is constantly engaged in upgrading, modernizing and revamping the operations of its manufacturing
facilities, based on its assessment of market needs and prospects. To respond flexibly to fluctuations in demandin each of its production operations throughout the world, Toyota continually reviews and implements
54

appropriate production measures such as revising takt time and adjusting days of operation. As a result, Toyota
believes it would require unreasonable effort to track the exact productive capacity and the extent of utilization ofeach of its manufacturing facilities with a reasonable degree of accuracy.
As of March 31, 2014, property, plant and equipment having a net book value of approximately ¥64.9
billion was pledged as collateral securing indebtedness incurred by Toyota Motor Corporation’s consolidated
subsidiaries. Toyota believes that there does not exist any material environmental issues that may affect thecompany’s utilization of its assets.
Toyota considers all its principal manufacturing facilities and other significant properties to be in goodcondition and adequate to meet the needs of its operations.
See “— Business Overview — Capital Expenditures and Divestitures” for a description of Toyota’s materialplans to construct, expand or improve facilities.
ITEM 4A. UNRESOLVED STAFF COMMENTS
None.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
5.A OPERATING RESULTS
All financial information discussed in this section is derived from Toyota’s consolidated financial
statements that appear elsewhere in this annual report. The financial statements have been prepared inconformity with accounting principles generally accepted in the United States of America.
Overview
The business segments of Toyota include automotive operations, financial services operations and all otheroperations. Automotive operations are Toyota’s most significant business segment, accounting for 90% of
Toyota’s total revenues before the elimination of intersegment revenues for fiscal 2014. Toyota’s primarymarkets based on vehicle unit sales for fiscal 2014 were: Japan (26%), North America (28%), Europe (9%) andAsia (18 %).
Automotive Market Environment
The worldwide automotive market is highly competitive and volatile. The demand for automobiles isaffected by a number of factors including social, political and general economic conditions; introduction of newvehicles and technologies; and costs incurred by customers to purchase or operate vehicles. These factors cancause consumer demand to vary substantially in different geographic markets and for different types ofautomobiles.
During fiscal 2014, automotive markets progressed in a steady manner, especially in the U.S., althoughsome markets in emerging countries have slowed down. Efforts toward building a low-carbon society andimprovements in safety, such as the technical development of eco-cars and automated-driving, were promoted
worldwide.

55

The following table sets forth Toyota’s consolidated vehicle unit sales by geographic market based on
location of customers for the past three fiscal years.
Thousands of units
Year Ended March 31,
2012
2013
2014

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,071
1,872
798
1,327
1,284

2,279
2,469
799
1,684
1,640

2,365
2,529
844
1,609
1,769

Overseas total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,281

6,592

6,751

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,352

8,871

9,116

* “Other” consists of Central and South America, Oceania, Africa and the Middle East, etc.
During fiscal 2014 and 2013, Toyota’s consolidated vehicle unit sales in Japan increased as compared witheach prior fiscal year, primarily as a result of the active introduction of new products and the efforts of dealers
nationwide. For fiscal 2014, Toyota and Lexus brands’ market share excluding mini-vehicles was 46.7%, andmarket share (including Daihatsu and Hino brands) including mini-vehicles was 42.2%, each remaining at a highlevel continuing from the prior fiscal year. Overseas consolidated vehicle unit sales increased during fiscal 2013
and 2014. During fiscal 2013, total overseas vehicle unit sales increased in every region. During fiscal 2014, total
overseas vehicle unit sales increased as a whole, due to increased sales in North America, Europe and otherregions.
Toyota’s share of total vehicle unit sales in each market is influenced by the quality, safety, reliability, price,design, performance, economy and utility of Toyota’s vehicles compared with those offered by othermanufacturers. The timely introduction of new or redesigned vehicles is also an important factor in satisfying
customer needs. Toyota’s ability to satisfy changing customer preferences can affect its revenues and earnings
significantly.
The profitability of Toyota’s automotive operations is affected by many factors. These factors include:•

vehicle unit sales volumes,•

the mix of vehicle models and options sold,•the level of parts and service sales,•

the levels of price discounts and other sales incentives and marketing costs,•

the cost of customer warranty claims and other customer satisfaction actions,•the cost of research and development and other fixed costs,•

the prices of raw materials,•

the ability to control costs,•

the efficient use of production capacity,•

the adverse effect on production due to the reliance on various suppliers for the provision of supplies,•

the adverse effect on market, sales and productions of natural calamities and interruptions of social
infrastructure, and•changes in the value of the Japanese yen and other currencies in which Toyota conducts business.
56

Changes in laws, regulations, policies and other governmental actions can also materially impact the
profitability of Toyota’s automotive operations. These laws, regulations and policies include those attributed toenvironmental matters, vehicle safety, fuel economy and emissions that can add significantly to the cost ofvehicles. The European Union has enforced a directive on end-of-life vehicles. See “Legislation Regarding Endof-Life Vehicles”, “Information on the Company — Business Overview — Governmental Regulation,
Environmental and Safety Standards” and note 23 to the consolidated financial statements for a more detailed
discussion of these laws, regulations and policies.
Many governments also impose local content requirements, impose tariffs and other trade barriers, and enact
price or exchange controls that can limit an automaker’s operations and can make the repatriation of profits
unpredictable. Changes in these laws, regulations, policies and other governmental actions may affect the
production, licensing, distribution or sale of Toyota’s products, cost of products or applicable tax rates. From
time-to-time when potential safety problems arise, Toyota issues vehicle recalls and takes other safety measures
including safety campaigns relating to its vehicles. In November 2009, Toyota announced a safety campaign inNorth America for certain models of Toyota and Lexus vehicles related to floor mat entrapment of accelerator
pedals, and later expanded it to include additional models. In January 2010, Toyota announced a recall in North
America for certain models of Toyota vehicles related to sticking and slow-to-return accelerator pedals. Also in
January 2010, Toyota recalled in Europe, China and other regions certain models of Toyota vehicles related tosticking accelerator pedals. In February 2010, Toyota announced a worldwide recall related to the software
program that controls the antilock braking system in certain vehicle models including the Prius. The recalls andother safety measures described above have led to a number of claims and lawsuits against Toyota. For a moredetailed description of these claims and lawsuits, see “Information on the Company — Business Overview —Legal Proceedings” and note 23 to the consolidated financial statements.
The worldwide automotive industry is in a period of global competition which may continue for theforeseeable future, and in general the competitive environment in which Toyota operates is likely to intensify.
Toyota believes it has the resources, strategies and technologies in place to compete effectively in the industry as
an independent company for the foreseeable future.
Financial Services Operations
The competition in the worldwide automobile financial services industry is intensifying. As competition
increases, margins on financing transactions may decrease and market share may also decline as customers
obtain financing for Toyota vehicles from alternative sources.
Toyota’s financial services operations mainly include loans and leasing programs for customers and dealers.
Toyota believes that its ability to provide financing to its customers is an important value added service.
Therefore, Toyota has expanded its network of finance subsidiaries in order to offer financial services in many
countries.
Toyota’s competitors for retail financing and retail leasing include commercial banks, credit unions andother finance companies. Meanwhile, commercial banks and other captive automobile finance companies also
compete against Toyota’s wholesale financing activities.
Toyota’s total finance receivables increased during fiscal 2014 mainly due to the favorable impact offluctuations in foreign currency translation rates and an increase in retail receivables.

57

The following table provides information regarding Toyota’s finance receivables and operating leases in thepast two fiscal years.
Yen in millions
March 31,
2013
2014

Finance Receivables
Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and other dealer loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred origination costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unearned income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for credit losses
Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and other dealer loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total finance receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less – Current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9,047,782
1,029,887
2,615,728

10,523,364
1,071,179
2,875,650

12,693,397 14,470,193
135,398
161,956(628,340)(754,539)(83,858)(28,928)(26,243)(89,439)(30,585)(26,358)(139,029)(146,382)

12,061,426 13,731,228(5,117,660) (5,628,934)

Noncurrent finance receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,943,766

8,102,294

Operating Leases
Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less – Deferred income and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,999,294
104,351(65,634)

3,674,969
129,029(94,438)

Less – Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less – Allowance for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,038,011(749,238)(8,020)3,709,560(808,764)(7,220)

Vehicles and equipment on operating leases, net . . . . . . . . . . . . . . . . . . . . . . . . . .

2,280,753

2,893,576

Toyota’s finance receivables are subject to collectability risks. These risks include consumer and dealer
insolvencies and insufficient collateral values (less costs to sell) to realize the full carrying values of thesereceivables. See discussion in “Critical Accounting Estimates — Allowance for Doubtful Accounts and Credit
Losses” and note 10 to the consolidated financial statements.
Toyota continues to originate leases to finance new Toyota vehicles. These leasing activities are subject toresidual value risk. Residual value losses could be incurred when the lessee of a vehicle does not exercise theoption to purchase the vehicle at the end of the lease term. See discussion in “Critical Accounting Estimates —Investment in Operating Leases” and note 2 to the consolidated financial statements.
Toyota enters into interest rate swap agreements and cross currency interest rate swap agreements to convert
its fixed-rate debt to variable-rate functional currency debt. A portion of the derivative instruments are enteredinto to hedge interest rate risk from an economic perspective and are not designated as a hedge of specific assets
or liabilities on Toyota’s consolidated balance sheet and accordingly, unrealized gains or losses related toderivatives that are not designated as a hedge are recognized currently in operations. See discussion in “Critical
Accounting Estimates — Derivatives and Other Contracts at Fair Value” and “Quantitative and Qualitative
Disclosures about Market Risk” and notes 20 and 26 to the consolidated financial statements.
The fluctuations in funding costs can affect the profitability of Toyota’s financial services operations.
Funding costs are affected by a number of factors, some of which are not in Toyota’s control. These factors
58

include general economic conditions, prevailing interest rates and Toyota’s financial strength. Funding costs
decreased during fiscal 2013 and 2014, mainly as a result of lower interest rates.
Toyota launched its credit card business in Japan in April 2001. As of March 31, 2013, Toyota had
11.8 million cardholders, an increase of 0.9 million cardholders compared with March 31, 2012. As of March 31,
2014, Toyota had 12.7 million cardholders, an increase of 0.9 million cardholders compared with March 31,
2013. Credit card receivables as of March 31, 2013 increased by ¥30.5 billion from March 31, 2012 to¥338.1 billion. Credit card receivables as of March 31, 2014 increased by ¥42.8 billion from March 31, 2013 to¥380.9 billion.
Other Business Operations
Toyota’s other business operations consist of housing (including the manufacture and sale of prefabricatedhomes), information technology related businesses (including information technology and telecommunications,
intelligent transport systems and GAZOO) and other businesses.
Toyota does not expect its other business operations to materially contribute to Toyota’s consolidated resultsof operations.
Currency Fluctuations
Toyota is affected by fluctuations in foreign currency exchange rates. Toyota is exposed to fluctuations in
the value of the Japanese yen against the U.S. dollar and the euro and, to a lesser extent, the Australian dollar, theRussian ruble, the Canadian dollar, the British pound, and others. Toyota’s consolidated financial statements,
which are presented in Japanese yen, are affected by foreign currency exchange fluctuations through bothtranslation risk and transaction risk.
Translation risk is the risk that Toyota’s consolidated financial statements for a particular period or for aparticular date will be affected by changes in the prevailing exchange rates of the currencies in those countries inwhich Toyota does business compared with the Japanese yen. Even though the fluctuations of currency exchange
rates to the Japanese yen can be substantial, and, therefore, significantly impact comparisons with prior periods
and among the various geographic markets, the translation risk is a reporting consideration and does not reflect
Toyota’s underlying results of operations. Toyota does not hedge against translation risk.
Transaction risk is the risk that the currency structure of Toyota’s costs and liabilities will deviate from thecurrency structure of sales proceeds and assets. Transaction risk relates primarily to sales proceeds from Toyota’s
non-domestic operations from vehicles produced in Japan.
Toyota believes that the location of its production facilities in different parts of the world has significantly
reduced the level of transaction risk. As part of its globalization strategy, Toyota has continued to localize
production by constructing production facilities in the major markets in which it sells its vehicles. In calendar
2012 and 2013, Toyota produced 75.4% and 76.3%, respectively, of its non-domestic sales outside Japan. In
North America, 75.3% and 73.7% of vehicles sold in calendar 2012 and 2013, respectively, were produced
locally. In Europe, 58.5% and 69.4% of vehicles sold in calendar 2012 and 2013, respectively, were produced
locally. Localizing production enables Toyota to locally purchase many of the supplies and resources used in the
production process, which allows for a better match of local currency revenues with local currency expenses.
Toyota also enters into foreign currency transactions and other hedging instruments to address a portion of
its transaction risk. This has reduced, but not eliminated, the effects of foreign currency exchange rate
fluctuations, which in some years can be significant. See notes 20 and 26 to the consolidated financial statements
for additional information.

59Generally, a weakening of the Japanese yen against other currencies has a positive effect on Toyota’s
revenues, operating income and net income attributable to Toyota Motor Corporation. A strengthening of theJapanese yen against other currencies has the opposite effect. In fiscal 2013 and 2014, the Japanese yen was on
average and at the end of the fiscal year weaker against the U.S. dollar in comparison to fiscal 2012 and 2013,
respectively. Although, in fiscal 2013, the Japanese yen was on average stronger against the euro in comparison
to the prior fiscal year, it was on average weaker in fiscal 2014. The Japanese yen was weaker at the end of fiscal
2013 and 2014 against the euro in comparison to the end of fiscal 2012 and 2013, respectively. See further
discussion in “Quantitative and Qualitative Disclosures about Market Risk — Market Risk Disclosures —Foreign Currency Exchange Rate Risk”.
During fiscal 2013 and 2014, the average exchange rate of the Japanese yen against the U.S. dollar and theeuro compared to the prior fiscal year fluctuated as described above. The operating results excluding the impactof currency fluctuations described in “Results of Operations — Fiscal 2014 Compared with Fiscal 2013” and“Results of Operations — Fiscal 2013 Compared with Fiscal 2012” show results of net revenues obtained byapplying the Japanese yen’s average exchange rate in the previous fiscal year to the local currency-denominated
net revenues for fiscal 2013 and 2014, respectively, as if the value of the Japanese yen had remained constant forthe comparable periods. Results excluding the impact of currency fluctuations year-on-year are not on the same
basis as Toyota’s consolidated financial statements and do not conform with U.S. GAAP. Furthermore, Toyota
does not believe that these measures are a substitute for U.S. GAAP measures. However, Toyota believes thatsuch results excluding the impact of currency fluctuations year-on-year provide additional useful information toinvestors regarding the operating performance on a local currency basis.
Segmentation
Toyota’s most significant business segment is its automotive operations. Toyota carries out its automotive
operations as a global competitor in the worldwide automotive market. Management allocates resources to, andassesses the performance of, its automotive operations as a single business segment on a worldwide basis. Toyota
does not manage any subset of its automotive operations, such as domestic or overseas operations or parts, as
separate management units.
The management of the automotive operations is organized by function, with a manager having oversight
responsibility for each function within the segment. Management assesses financial and non-financial data suchas vehicle unit sales, production volume, market share information, vehicle model plans and plant location costs
to allocate resources within the automotive operations.
Geographic Breakdown
The following table sets forth Toyota’s net revenues in each geographic market based on the country oflocation of the parent company or the subsidiaries that transacted the sale with the external customer for the past
three fiscal years.
Yen in millions
Year ended March 31,
2012
2013
2014

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,293,804
4,644,348
1,917,408
3,116,849
1,611,244* “Other” consists of Central and South America, Oceania, Africa and the Middle East.

60

7,910,456
6,167,821
2,003,113
4,058,629
1,924,173

8,532,875
7,938,615
2,614,070
4,475,382
2,130,969

Results of Operations — Fiscal 2014 Compared with Fiscal 2013
Yen in millions
Year ended March 31,
2014 v. 2013 Change
2013
2014
AmountPercentage

Net revenues:
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intersegment elimination/unallocated amount . . . . . . . .

12,821,018 14,297,470 1,476,452
6,284,425
8,117,099 1,832,674
2,083,113
2,724,959
641,846
4,385,476
4,877,672
492,1962,094,265
2,336,641
242,376(5,604,105) (6,661,930) (1,057,825)

11.5%
29.2
30.8
11.2
11.6
—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income:Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intersegment elimination/unallocated amount . . . . . . . .

22,064,192

25,691,911

3,627,719

16.4

576,335
221,925
26,462
376,055
133,744(13,633)

1,510,165
326,052
58,228395,737
42,568(40,638)

933,830
104,127
31,766
19,682(91,176)(27,005)

162.0
46.9
120.0
5.2
(68.2)—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes and equity in earnings ofaffiliated companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net margin from income before income taxes and equity inearnings of affiliated companies . . . . . . . . . . . . . . . . . . . . .
Equity in earnings of affiliated companies . . . . . . . . . . . . . . .
Net income attributable to Toyota Motor Corporation . . . . . .
Net margin attributable to Toyota Motor Corporation . . . . . .

1,320,888
2,292,112
6.0%
8.9%

971,224
2.9%

73.5

1,403,649

2,441,080

6.4%
9.5%
231,519
318,376
962,163
1,823,119
4.4%
7.1%

1,037,431
3.1%
86,857860,956
2.7%

73.9

37.5
89.5

* “Other” consists of Central and South America, Oceania, Africa and the Middle East.
Net Revenues
Toyota had net revenues for fiscal 2014 of ¥25,691.9 billion, an increase of ¥3,627.7 billion, or 16.4%,
compared with the prior fiscal year. This increase mainly reflected the favorable impact of fluctuations in foreign
currency translation rates of ¥2,510.4 billion and changes in vehicle unit sales and sales mix of ¥300.0 billion.
Excluding the impact of changes in the Japanese yen values used for translation purposes of ¥2,510.4 billion, net
revenues would have been ¥23,181.4 billion during fiscal 2014, a 5.1% increase compared with the prior fiscal
year. The automotive market in calendar year 2013 increased by 7.9% in North America and in fiscal 2014
increased by 5.9% in Japan compared with the prior year due to the market in the U.S. and Japan progressing in a
steady manner. Under these automotive market conditions, Toyota’s consolidated vehicle unit sales increased by
2.8% compared with the prior fiscal year to 9,116 thousand vehicles.

61

The table below shows Toyota’s net revenues from external customers by product category and by business.
Yen in millions
Year ended March 31,
2014 v. 2013 Change
2013
2014
AmountPercentage

Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Parts and components for overseas production . . . . . . . . . . . .
Parts and components for after service . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17,446,473
356,756
1,577,690
997,843

20,353,340
431,760
1,843,478
1,105,277

2,906,867
75,004
265,788
107,434

16.7%
21.0
16.8
10.8

Total Automotive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20,378,762
535,388

23,733,855
578,789

3,355,093
43,401

16.5
8.1

Total sales of products . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,914,150
Financial services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,150,042

24,312,644
1,379,267

3,398,494
229,225

16.2
19.9

25,691,911

3,627,719

16.4%

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22,064,192

Toyota’s net revenues include net revenues from sales of products, consisting of net revenues fromautomotive operations and all other operations, which increased by 16.2% during fiscal 2014 compared with theprior fiscal year to ¥24,312.6 billion, and net revenues from financial services operations which increased by
19.9% during fiscal 2014 compared with the prior fiscal year to ¥1,379.2 billion. Excluding the impact ofchanges in the Japanese yen values used for translation purposes of ¥2,311.9 billion, net revenues from sales of
products would have been ¥22,000.6 billion during fiscal 2014, a 5.2% increase compared with the prior fiscal
year. The increase in net revenues from sales of products is mainly due to an increase in Toyota vehicle unit salesof 245 thousand vehicles. Excluding the impact of changes in the Japanese yen values used for translation
purposes of ¥198.5 billion, net revenues from financial services operations would have been ¥1,180.7 billion
during fiscal 2014, a 2.7% increase compared with the prior fiscal year.
The following table shows the number of financing contracts by geographic region at the end of fiscal 2014
and 2013, respectively.
Number of financing contracts in thousands
Year ended March 31,
2014 v. 2013 Change
2013
2014
AmountPercentage

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,765
4,596
825
868
618

1,813
4,791
879
1,167
688

48
195
54
299
70

2.7%
4.3
6.5
34.5
11.3

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,672

9,338

666

7.7%

* “Other” consists of Central and South America, Oceania and Africa.
Geographically, net revenues (before the elimination of intersegment revenues) for fiscal 2014 increased by
11.5% in Japan, 29.2% in North America, 30.8% in Europe, 11.2% in Asia, and 11.6% in Other compared withthe prior fiscal year. Excluding the impact of changes in the Japanese yen values used for translation purposes of¥2,510.4 billion, net revenues in fiscal 2014 would have increased by 11.5% in Japan, 8.4% in North America,
6.5% in Europe and 5.9% in Other compared with the prior fiscal year, and would have decreased by 4.9% in
Asia compared with the prior fiscal year.

62

The following is a discussion of net revenues in each geographic market (before the elimination ofintersegment revenues).
Japan
Thousands of units
Year ended March 31,
2014 v. 2013 Change
2013
2014
AmountPercentage

Toyota’s consolidated vehicle unit sales* . . . . . . . . . . . . . . . .

4,202

4,220

18

0.4%

* including number of exported vehicle unit sales
Yen in millions
Year ended March 31,
2014 v. 2013 Change
2013
2014
AmountPercentage

Net revenues:
Sales of products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,687,092 14,179,710 1,492,618
Financial services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
133,926
117,760(16,166)

11.8%(12.1)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,821,018 14,297,470 1,476,452

11.5%

Toyota’s domestic and exported vehicle unit sales increased by 18 thousand vehicles compared with theprior fiscal year due primarily to favorable market conditions.
North America
Thousands of units
Year ended March 31,
2014 v. 2013 Change
2013
2014
AmountPercentage

Toyota’s consolidated vehicle unit sales . . . . . . . . . . . . . . . . .

2,469

2,529

60

2.5%

Yen in millions
Year ended March 31,
2014 v. 2013 Change
2013
2014
AmountPercentage

Net revenues:
Sales of products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,564,183
720,242

7,234,376
882,723

1,670,193
162,481

30.0%
22.6

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,284,425

8,117,099

1,832,674

29.2%

Net revenues in North America increased due primarily to the 60 thousand vehicles increase in vehicle unit
sales compared with the prior fiscal year. The vehicle unit sales increased due mainly to the market progressing
in a steady manner and strong sales of the RAV4, IS and other new car models.

63

EuropeThousands of units
Year ended March 31,
2014 v. 2013 Change
2013
2014
AmountPercentage

Toyota’s consolidated vehicle unit sales . . . . . . . . . . . . . . . . . . .

799

844

45

5.6%

Yen in millions
Year ended March 31,
2014 v. 2013 Change
2013
2014
AmountPercentage

Net revenues:
Sales of products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,007,207
75,9062,630,408
94,551

623,201
18,64531.0%
24.6

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,083,113

2,724,959

641,846

30.8%

Net revenues in Europe increased due primarily to the 45 thousand vehicles increase in vehicle unit sales
compared with the prior fiscal year. The vehicle unit sales increased due mainly to the strong sales of the RAV4,
Corolla and other car models.
Asia
Thousands of units
Year ended March 31,
2014 v. 2013 Change
2013
2014
AmountPercentage

Toyota’s consolidated vehicle unit sales . . . . . . . . . . . . . . . . . . .

1,684

1,609

(75)

(4.5)%

Yen in millions
Year ended March 31,
2014 v. 2013 Change
2013
2014
AmountPercentage

Net revenues:
Sales of products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,307,943
77,533

4,755,114
122,558

447,171
45,025

10.4%
58.1

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,385,476

4,877,672

492,196

11.2%

Excluding the favorable impact of fluctuations in foreign currency translation rates, net revenues in Asia
would have decreased due primarily to the 75 thousand vehicles decrease in vehicle unit sales compared with theprior fiscal year. The decrease in vehicle unit sales was due mainly to decreased sales in Thailand and India,
which in turn was due mainly to the shrinking of the market and competitive market conditions.

64

OtherThousands of units
Year ended March 31,
2014 v. 2013 Change
2013
2014
AmountPercentage

Toyota’s consolidated vehicle unit sales . . . . . . . . . . . . . . . . .

1,640

1,769

129

7.8%

Yen in millions
Year ended March 31,
2014 v. 2013 Change
2013
2014
AmountPercentage

Net revenues:
Sales of products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,942,215
152,050

2,162,505
174,136

220,290
22,086

11.3%
14.5

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,094,265

2,336,641

242,376

11.6%

Net revenues in Other increased due primarily to the 129 thousand vehicles increase in vehicle unit sales
compared with the prior fiscal year. The vehicle unit sales increased due mainly to the strong sales of the Etios inCentral and South America.
Operating Costs and Expenses
Yen in millions
Year ended March 31,
2014 v. 2013 Change
2013
2014
AmountPercentage

Operating costs and expenses
Cost of products sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,010,569
Cost of financing operations . . . . . . . . . . . . . . . . . . . . . .
630,426
Selling, general and administrative . . . . . . . . . . . . . . . . .
2,102,309
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20,743,304

19,988,245
812,8942,598,660

1,977,676
182,468
496,351

11.0%
28.9
23.6

23,399,799

2,656,495

12.8%

Yen in millions
2014 v. 2013 Change

Changes in operating costs and expenses:
Effect of changes in vehicle unit sales and sales mix . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of fluctuation in foreign currency translation rates . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of increase in miscellaneous costs and others . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

120,000
2,378,900(290,000)
447,595

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,656,495

Operating costs and expenses increased by ¥2,656.4 billion, or 12.8%, to ¥23,399.7 billion during fiscal
2014 compared with the prior fiscal year. This increase resulted mainly from the ¥2,378.9 billion unfavorable
impact of fluctuations in foreign currency translation rates, the ¥447.5 billion increase in miscellaneous costs andothers, and the ¥120.0 billion impact of changes in vehicle unit sales and sales mix, partially offset by the ¥290.0
billion impact of cost reduction efforts.
The increase in miscellaneous costs and others was due mainly to the ¥125.0 billion payment to the U.S
government based on the agreement with the U.S. Attorney’s Office for the Southern District of New York to
resolve its investigation, the ¥100.0 billion increase in labor costs, the ¥100.0 billion increase in research anddevelopment expenses, and the ¥83.0 billion increase in costs related to ending the vehicle and engine production65

in Australia, partially offset by the ¥90.0 billion charge for costs related to the settlement of the economic loss
claims in the consolidated federal action in the U.S. recorded in the prior fiscal year.
Cost Reduction Efforts
During fiscal 2014, Toyota’s continued cost reduction efforts reduced operating costs and expenses by¥290.0 billion. The amount of the effect of cost reduction efforts includes the impact of fluctuation in the price ofsteel, precious metals, non-ferrous alloys including aluminum, plastic parts and other production materials andparts. In fiscal 2014, continued cost reduction efforts together with suppliers contributed to the improvement inearnings. These cost reduction efforts related to ongoing value engineering and value analysis activities, the useof common parts resulting in a reduction of part types and other manufacturing initiatives designed to reduce thecosts of vehicle production.
Cost of Products Sold
Cost of products sold increased by ¥1,977.6 billion, or 11.0%, to ¥19,988.2 billion during fiscal 2014
compared with the prior fiscal year. The increase resulted mainly from the ¥1,866.5 billion unfavorable impact offluctuations in foreign currency translation rates, the ¥105.0 billion impact of changes in vehicle unit sales andsales mix, the ¥100.0 billion increase in research and development expenses, and the ¥80.0 billion increase incosts related to ending the vehicle and engine production in Australia, partially offset by the ¥290.0 billion
impact of cost reduction efforts.
Cost of Financing Operations
Cost of financing operations increased by ¥182.4 billion, or 28.9%, to ¥812.8 billion during fiscal 2014
compared with the prior fiscal year. The increase resulted mainly from the ¥183.0 billion unfavorable impact offluctuations in foreign currency translation rates.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased by ¥496.3 billion, or 23.6%, to ¥2,598.6 billion
during fiscal 2014 compared with the prior fiscal year. This increase mainly reflected the ¥329.3 billion
unfavorable impact of fluctuations in foreign currency translation rates, and the ¥125.0 billion payment to the
U.S government based on the agreement with the U.S. Attorney’s Office for the Southern District of New Yorkto resolve its investigation, partially offset by the ¥90.0 billion charge for costs related to the settlement of theeconomic loss claims in the consolidated federal action in the U.S. recorded in the prior fiscal year.
Operating Income
Yen in millions
2014 v. 2013 Change

Changes in operating income and loss:
Effect of changes in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of marketing efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of increase of miscellaneous costs and others . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

900,000
290,000
180,000(480,000)
81,224

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

971,224

Toyota’s operating income increased by ¥971.2 billion, or 73.5%, to ¥2,292.1 billion during fiscal 2014
compared with the prior fiscal year. This increase was due mainly to the ¥900.0 billion favorable impact of66

changes in exchange rates, ¥290.0 billion impact of cost reduction efforts, and ¥180.0 billion impact of marketing
efforts, partially offset by the ¥480.0 billion increase in miscellaneous costs and others. The increase in
miscellaneous costs and others was due mainly to the ¥125.0 billion payment to the U.S government based on theagreement with the U.S. Attorney’s Office for the Southern District of New York to resolve its investigation, the¥100.0 billion increase in labor costs, the ¥100.0 billion increase in research and development expenses, and the¥83.0 billion increase in costs related to ending the vehicle and engine production in Australia, partially offset bythe ¥90.0 billion charge for costs related to the settlement of the economic loss claims in the consolidated federal
action in the U.S. recorded in the prior fiscal year.
During fiscal 2014, operating income (before elimination of intersegment profits), compared with the priorfiscal year increased by ¥933.8 billion, or 162.0%, in Japan, ¥104.1 billion, or 46.9%, in North America, ¥31.7
billion, or 120.0%, in Europe, ¥19.6 billion, or 5.2%, in Asia, and decreased by ¥91.1 billion, or 68.2%, in Other.
The following is a description of operating income in each geographic market.
Japan
Yen in millions
2014 v. 2013 Change

Changes in operating income and loss:
Effect of changes in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of marketing efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of increase of miscellaneous costs and others . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

940,000
175,000
180,000(370,000)
8,830

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

933,830

North America
Yen in millions
2014 v. 2013 Change

Changes in operating income and loss:
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of marketing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of decrease of miscellaneous costs and others . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

75,000(25,000)
50,0004,127

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

104,127

EuropeYen in millions
2014 v. 2013 Change

Changes in operating income and loss:
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of marketing efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of increase of miscellaneous costs and others . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15,00025,000(10,000)
1,766

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

31,76667

Asia
Yen in millions
2014 v. 2013 Change

Changes in operating income and loss:
Effect of changes in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of marketing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of increase of miscellaneous costs and others . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25,00035,000(40,000)(50,000)
49,682

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19,682Other
Yen in millions
2014 v. 2013 Change

Changes in operating income and loss:
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of marketing efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of increase of miscellaneous costs and others . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(10,000)
40,000(100,000)(21,176)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(91,176)

Other Income and Expenses
Interest and dividend income increased by ¥16.7 billion, or 17.0%, to ¥115.4 billion during fiscal 2014
compared with the prior fiscal year.
Interest expense decreased by ¥3.3 billion, or 14.5%, to ¥19.6 billion during fiscal 2014 compared with theprior fiscal year.
Foreign exchange gain, net increased by ¥44.7 billion, or 805.4%, to ¥50.2 billion during fiscal 2014
compared with the prior fiscal year. Foreign exchange gains and losses include the differences between the valueof foreign currency denominated assets and liabilities recognized through transactions in foreign currencies
translated at prevailing exchange rates and the value at the date the transaction settled during the fiscal year,
including those settled using forward foreign currency exchange contracts, or the value translated by appropriate
year-end exchange rates. The ¥44.7 billion increase in foreign exchange gain, net was due mainly to the losses
recorded in fiscal 2013 resulting from the Japanese yen being stronger against foreign currencies at the time
foreign currency bonds were redeemed during that fiscal year than the Japanese yen at the time of purchase.
Other loss, net increased by ¥1.4 billion, or 94.7%, to ¥2.9 billion during fiscal 2014 compared with theprior fiscal year.
Income Taxes
The provision for income taxes increased by ¥216.1 billion, or 39.2%, to ¥767.8 billion during fiscal 2014
compared with the prior fiscal year due mainly to the increase in income before income taxes and equity inearnings of affiliated companies. The effective tax rate for fiscal 2014 was 31.5%, which was lower than thestatutory tax rate in Japan. This was due mainly to the increase in tax credits and income before income taxes andequity in earnings of affiliated companies from foreign subsidiaries where statutory tax rates are lower than thatof Japan.
68Net Income Attributable to Noncontrolling Interests and Equity in Earnings of Affiliated Companies
Net income attributable to noncontrolling interests increased by ¥47.2 billion, or 38.9%, to ¥168.5 billion
during fiscal 2014 compared with the prior fiscal year. This was due mainly to an increase during fiscal 2014 in
net income attributable to the shareholders of consolidated subsidiaries.
Equity in earnings of affiliated companies during fiscal 2014 increased by ¥86.8 billion, or 37.5%, to¥318.3 billion compared with the prior fiscal year. This increase was due mainly to an increase during fiscal 2014
in net income attributable to the shareholders of affiliated companies accounted for by the equity method.
Net Income Attributable to Toyota Motor Corporation
Net income attributable to the shareholders of Toyota Motor Corporation increased by ¥860.9 billion, or
89.5%, to ¥1,823.1 billion during fiscal 2014 compared with the prior fiscal year.
Other Comprehensive Income and Loss
Other comprehensive income increased by ¥61.5 billion to ¥884.2 billion for fiscal 2014 compared with theprior fiscal year. This increase resulted from unrealized holding gains on securities in fiscal 2014 of¥493.7 billion compared with gains of ¥368.5 billion in the prior fiscal year, and from pension liability
adjustments in fiscal 2014 of ¥93.5 billion compared with gains of ¥19.5 billion in the prior fiscal year, partially
offset by unfavorable foreign currency translation adjustments gains of ¥296.9 billion in fiscal 2014 comparedwith gains of ¥434.6 billion in the prior fiscal year.
Segment Information
The following is a discussion of the results of operations for each of Toyota’s operating segments. The
amounts presented are prior to intersegment elimination.
Yen in millions
Year ended March 31,
2014 v. 2013 Change
2013
2014
AmountPercentage

Automotive:
Net revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Services:
Net revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All Other:
Net revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intersegment elimination/unallocated amount:
Net revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20,419,100
944,704

23,781,404
1,938,778

3,362,304
994,074

16.5%
105.2

1,170,670
315,820

1,421,047
294,891

250,377(20,929)

21.4
(6.6)

1,066,461
53,616

1,151,280
64,27084,81910,6548.0
19.9(592,039)
6,748(661,820)(5,827)(69,781)(12,575)——

Automotive Operations Segment
The automotive operations segment is Toyota’s largest operating segment by net revenues. Net revenues forthe automotive segment increased during fiscal 2014 by ¥3,362.3 billion, or 16.5%, to ¥23,781.4 billion
compared with the prior fiscal year. The increase mainly reflects the ¥2,304.9 billion favorable impact offluctuations in foreign currency translation rates and the ¥300.0 billion favorable impact of changes in vehicle
unit sales and sales mix.
69

Operating income from the automotive operations increased by ¥994.0 billion, or 105.2%, to¥1,938.7 billion during fiscal 2014 compared with the prior fiscal year. This increase in operating income wasdue mainly to the ¥900.0 billion favorable impact of changes in exchange rates, the ¥290.0 billion impact of cost
reduction efforts, and the ¥190.0 billion of favorable impact of changes in vehicle unit sales and sales mix,
partially offset by the ¥480.0 billion increase in miscellaneous costs and others.
The changes in vehicle unit sales and changes in sales mix were due primarily to the increase in Toyota’s
vehicle unit sales by 245 thousand vehicles compared with the prior fiscal year resulting from the increase in
vehicle unit sales in North America, Europe and Other. The increase in miscellaneous costs and others was due
mainly to the ¥125.0 billion payment to the U.S government based on the agreement with the U.S. Attorney’s
Office for the Southern District of New York to resolve its investigation, the ¥100.0 billion increase in laborcosts, the ¥100.0 billion increase in research and development expenses, and the ¥83.0 billion increase in costs
related to ending the vehicle and engine production in Australia, partially offset by the ¥90.0 billion charge forcosts related to the settlement of the economic loss claims in the consolidated federal action in the U.S. recordedin the prior fiscal year.
Financial Services Operations Segment
Net revenues for the financial services operations increased during fiscal 2014 by ¥250.3 billion, or 21.4%,
to ¥1,421.0 billion compared with the prior fiscal year. This increase was primarily due to the ¥199.8 billion
favorable impact of fluctuations in foreign currency translation rates.
Operating income from financial services operations decreased by ¥20.9 billion, or 6.6%, to ¥294.8 billion
during fiscal 2014 compared with the prior fiscal year. This decrease was due primarily to the recording of¥22.0 billion of valuation losses on interest rate swaps stated at fair value.
All Other Operations Segment
Net revenues for Toyota’s other operations segments increased by ¥84.8 billion, or 8.0%, to ¥1,151.2 billion
during fiscal 2014 compared with the prior fiscal year.
Operating income from Toyota’s other operations segments increased by ¥10.6 billion, or 19.9%, to¥64.2 billion during fiscal 2014 compared with the prior fiscal year.

70Results of Operations — Fiscal 2013 Compared with Fiscal 2012
Yen in millions
Year ended March 31,
2013 v. 2012 Change
2012
2013
AmountPercentage

Net revenues:
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,167,319 12,821,018 1,653,699
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,751,886 6,284,425 1,532,539
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,993,946 2,083,113
89,167
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,334,274 4,385,476 1,051,202
Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,760,175 2,094,265
334,090
Intersegment elimination/unallocated amount . . . . . . . . . . (4,423,947) (5,604,105) (1,180,158)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,583,653 22,064,192 3,480,539
Operating income (loss):Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(207,040)
576,335
783,375
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
186,409
221,925
35,516
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17,796
26,462
8,666
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
256,790376,055
119,265
Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
108,814
133,744
24,930Intersegment elimination/unallocated amount . . . . . . . . . .
(7,142)(13,633)(6,491)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes and equity in earnings ofaffiliated companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net margin from income before income taxes and equity inearnings of affiliated companies . . . . . . . . . . . . . . . . . . . . . .
Equity in earnings of affiliated companies . . . . . . . . . . . . . . . .
Net income attributable to Toyota Motor Corporation . . . . . . .
Net margin attributable to Toyota Motor Corporation . . . . . . .

14.8%
32.3
4.5
31.5
19.0
—
18.7
—
19.1
48.7
46.4
22.9
—

355,627 1,320,888
1.9%
6.0%

965,261271.4
4.1%

432,873

970,776

2.3%
197,701
283,559
1.5%

1,403,649
6.4%
231,519
962,163
4.4%

224.3

4.1%
33,81817.1
678,604
239.3
2.9%* “Other” consists of Central and South America, Oceania and Africa.
Net Revenues
Toyota had net revenues for fiscal 2013 of ¥22,064.1 billion, an increase of ¥3,480.5 billion, or 18.7%,
compared with the prior fiscal year. This increase reflected changes in numbers of the vehicle unit sales and sales
mix of ¥3,031.5 billion and favorable impact of fluctuations in foreign currency translation rates of¥281.8 billion. Excluding the impact of changes in the Japanese yen values used for translation purposes of¥281.8 billion, net revenues would have been ¥21,782.3 billion during fiscal 2013, a 17.2% increase comparedwith the prior fiscal year. The automotive market in 2012 increased by 11.3% in North America and 14.3% in
Asia compared with the prior fiscal year. In fiscal 2013, the market in the U.S. and emerging countries such as
Asia developed in a steady manner. Under these automotive market conditions, Toyota’s consolidated vehicle
unit sales increased to 8,871 thousand vehicles by 20.7% compared with the prior fiscal year.

71

The table below shows Toyota’s net revenues from external customers by product category and by business.
Yen in millions
Year ended March 31,
2013 v. 2012 Change
2012
2013
AmountPercentage

Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Parts and components for overseas production . . . . . . . . . . . .
Parts and components for after service . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14,164,940
338,000
1,532,219
929,219

17,446,473
356,756
1,577,690
997,843

3,281,533
18,75645,471
68,624

23.2%
5.5
3.0
7.4

Total Automotive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16,964,378
547,538

20,378,762
535,388

3,414,384(12,150)

20.1
(2.2)

Total sales of products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,511,916
Financial services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,071,737

20,914,150
1,150,042

3,402,234
78,30519.4
7.3

22,064,192

3,480,539

18.7%

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18,583,653

Toyota’s net revenues include net revenues from sales of products, consisting of net revenues fromautomotive operations and all other operations, which increased by 19.4% during fiscal 2013 compared with theprior fiscal year to ¥20,914.1 billion, and net revenues from financial services operations which increased by
7.3% during fiscal 2013 compared with the prior fiscal year to ¥1,150.0 billion. Excluding the impact of changes
in the Japanese yen values used for translation purposes of ¥246.0 billion, net revenues from sales of products
would have been ¥20,668.1 billion, an 18.0% increase during fiscal 2013 compared with the prior fiscal year.
The increase in net revenues from sales of products is due to an increase in Toyota vehicle unit sales by
1,519 thousand vehicles. Excluding the impact of changes in the Japanese yen values used for translation
purposes of ¥35.8 billion, net revenues from financial services operations would have been ¥1,114.2 billion, a4.0% increase during fiscal 2013 compared with the prior fiscal year. This increase was mainly due to an increaseof ¥25.8 billion rental revenue generated by vehicles and equipment on operating lease.
The following table shows the number of financing contracts by geographic region at the end of the fiscal
2013 and 2012, respectively.
Number of financing contracts in thousands
Year ended March 31,
2013 v. 2012 Change
2012
2013
AmountPercentage

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,697
4,535
796
649
552

1,765
4,596
825
868
618

68
61
29
219
66

4.0%
1.3
3.7
33.7
11.9

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,229

8,672

443

5.4%

* “Other” consists of Central and South America, Oceania and Africa.
Geographically, net revenues (before the elimination of intersegment revenues) for fiscal 2013 increased by
14.8% in Japan, 32.3% in North America, 4.5% in Europe, 31.5% in Asia, and 19.0% in Other compared with theprior fiscal year. Excluding the impact of changes in the Japanese yen values used for translation purposes of¥281.8 billion, net revenues in fiscal 2013 would have increased by 14.8% in Japan, 26.2% in North America,
6.9% in Europe, 28.0% in Asia and 22.5% in Other compared with the prior fiscal year.

72

The following is a discussion of net revenues in each geographic market (before the elimination ofintersegment revenues).
Japan
Thousands of units
Year ended March 31,
2013 v. 2012 Change
2012
2013
AmountPercentage

Toyota’s consolidated vehicle unit sales* . . . . . . . . . . . . . . . .

3,741

4,202

461

12.3%

* including number of exported vehicle unit sales
Yen in millions
Year ended March 31,
2013 v. 2012 Change
2012
2013
AmountPercentage

Net revenues:
Sales of products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11,040,964
126,355

12,687,092
133,926

1,646,128
7,571

14.9%
6.0

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11,167,319

12,821,018

1,653,699

14.8%

Toyota’s domestic and exported vehicle unit sales increased by 461 thousand vehicles compared with theprior fiscal year due mainly to a recovery from the negative impact of the Great East Japan Earthquake in the firsthalf of fiscal 2012, an increase in demand by subsidies for eco-cars offered by the government and strong sales of
Aqua and other car models in fiscal 2013.
North America
Thousands of units
Year ended March 31,
2013 v. 2012 Change
2012
2013
AmountPercentage

Toyota’s consolidated vehicle unit sales . . . . . . . . . . . . . . . . .

1,872

2,469

597

31.9%

Yen in millions
Year ended March 31,
2013 v. 2012 Change
2012
2013
AmountPercentage

Net revenues:
Sales of products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,048,532
703,3545,564,183
720,242

1,515,651
16,88837.4%
2.4

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,751,886

6,284,425

1,532,539

32.3%

In North America, the vehicle unit sales increased by 597 thousand vehicles compared with the prior fiscal
year due mainly to the market recovering in a steady manner and strong sales of Corolla, Camry and other car
models.

73EuropeThousands of units
Year ended March 31,
2013 v. 2012 Change
2012
2013
AmountPercentage

Toyota’s consolidated vehicle unit sales . . . . . . . . . . . . . . . . . . .

798

799

1

0.1%

Yen in millions
Year ended March 31,
2013 v. 2012 Change
2012
2013
AmountPercentage

Net revenues:
Sales of products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,925,670
68,2762,007,207
75,906

81,537
7,630

4.2%
11.2

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,993,946

2,083,113

89,167

4.5%

Net revenues in Europe as a whole increased due primarily to the 1 thousand vehicles increase in vehicle
unit sales compared with the prior fiscal year. The vehicle unit sales increased in Eastern Europe, especially in
Russia, although sales of Toyota brands’ vehicles decreased in Western Europe compared with the prior fiscal
year due to the European sovereign debt crisis.
Asia
Thousands of units
Year ended March 31,
2013 v. 2012 Change
2012
2013
AmountPercentage

Toyota’s consolidated vehicle unit sales . . . . . . . . . . . . . . . . . . .

1,327

1,684

357

26.9%

Yen in millions
Year ended March 31,
2013 v. 2012 Change
2012
2013
AmountPercentage

Net revenues:
Sales of products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,275,871
58,403

4,307,943
77,533

1,032,072
19,13031.5%
32.8

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,334,274

4,385,476

1,051,202

31.5%

Net revenues in Asia as a whole increased due primarily to the 357 thousand vehicles increase in vehicle
unit sales compared with the prior fiscal year. The vehicle unit sales increased due mainly to the expansion ofmarkets such as Thailand and Indonesia, and the recovery during fiscal 2013 from the negative impacts of theflood in Thailand in fiscal 2012.

74

OtherThousands of units
Year ended March 31,
2013 v. 2012 Change
2012
2013
AmountPercentage

Toyota’s consolidated vehicle unit sales . . . . . . . . . . . . . . . . .

1,284

1,640

356

27.8%

Yen in millions
Year ended March 31,
2013 v. 2012 Change
2012
2013
AmountPercentage

Net revenues:
Sales of products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,636,043
124,132

1,942,215
152,050

306,172
27,918

18.7%
22.5

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,760,175

2,094,265

334,090

19.0%

Net revenues in Other as a whole increased due primarily to the 356 thousand vehicles increase in vehicle
unit sales compared with the prior fiscal year. The vehicle unit sales increased due mainly to strong sales of IMV
and Land Cruiser in each region in fiscal 2013 and the recovery from the shortages of parts supplies caused by
the Great East Japan Earthquake and the flood in Thailand in fiscal 2012.
Operating Costs and Expenses
Yen in millions
Year ended March 31,
2013 v. 2012 Change
2012
2013
AmountPercentage

Operating costs and expenses
Cost of products sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,795,918
Cost of financing operations . . . . . . . . . . . . . . . . . . . . . .
592,646
Selling, general and administrative . . . . . . . . . . . . . . . . .
1,839,462
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18,228,026

18,010,569
630,426
2,102,309

2,214,651
37,780262,847

14.0%
6.4
14.3

20,743,304

2,515,278

13.8%

Yen in millions
2013 v. 2012 Change

Changes in operating costs and expenses:
Effect of changes in vehicle unit sales and sales mix . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of fluctuation in foreign currency translation rates . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of increase in miscellaneous costs and others . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,360,000
270,000(450,000)
335,278

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,515,278

Operating costs and expenses increased by ¥2,515.2 billion, or 13.8%, to ¥20,743.3 billion during fiscal
2013 compared with the prior fiscal year. This increase resulted from the ¥2,360.0 billion impact of changes invehicle unit sales and sales mix, the ¥270.0 billion unfavorable impact of fluctuations in foreign currencytranslation rates and the ¥335.2 billion increase in miscellaneous costs and others, partially offset by the ¥450.0
billion impact of cost reduction efforts.
The increase in miscellaneous costs and others was due mainly to the ¥90.0 billion charge for costs
related to the settlement of the economic loss claims in the consolidated federal action in the U.S., the¥70.0 billion increase in labor costs, the ¥50.0 billion impact of increase in product quality related expenses andthe ¥20.0 billion increase in research and development expenses. This increase in product quality related75

expenses resulted from the weakening of the Japanese yen at the end of fiscal 2013 against other currencies incomparison to the prior fiscal year. See note 13 to the consolidated financial statements.
During fiscal 2013, Toyota announced recalls and other safety measures including the following:
In October 2012, Toyota announced in Japan and other regions the voluntary safety recall of certain modelsof Toyota brands’ vehicles in relation to the inspection and application of special fluorine grease to the driver’s
side Power Window Master Switch (PWMS). In November 2012, Toyota announced in Japan and other regions
the voluntary safety recall of certain models of Toyota brands’ vehicles in relation to the insufficient hardness
treatment of some intermediate extension shafts and in relation to the electric water pump for the hybrid system.
Cost Reduction Efforts
During fiscal 2013, Toyota’s continued cost reduction efforts reduced operating costs and expenses by¥450.0 billion. The amount of effect of cost reduction efforts includes the impact of fluctuation in the price ofsteel, precious metals, non-ferrous alloys including aluminum, plastic parts and other production materials andparts. In fiscal 2013, continued cost reduction efforts together with suppliers contributed to the improvement inearnings. These cost reduction efforts related to ongoing value engineering and value analysis activities, the useof common parts resulting in a reduction of part types and other manufacturing initiatives designed to reduce thecosts of vehicle production.
Cost of Products Sold
Cost of products sold increased by ¥2,214.6 billion, or 14.0%, to ¥18,010.5 billion during fiscal 2013
compared with the prior fiscal year. The increase resulted from the ¥2,124.0 billion impact of changes in vehicle
unit sales and sales mix and the ¥201.0 billion unfavorable impact of fluctuations in foreign currency translation
rates, partially offset by the ¥450.0 billion impact of cost reduction efforts.
Cost of Financing Operations
Cost of financing operations increased by ¥37.7 billion, or 6.4%, to ¥630.4 billion during fiscal 2013
compared with the prior fiscal year. The increase resulted from the ¥33.1 billion unfavorable impact offluctuations in foreign currency translation rates.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased by ¥262.8 billion, or 14.3%, to ¥2,102.3 billion
during fiscal 2013 compared with the prior fiscal year. This increase reflected the ¥90.0 billion charge for costs
related to the settlement of the economic loss claims in the consolidated federal action in the U.S., the¥43.2 billion increase in expenses for the financial services operations and the ¥35.8 billion unfavorable impact
of fluctuations in foreign currency translation rates.
Operating Income
Yen in millions
2013 v. 2012 Change

Changes in operating income and loss:
Effect of marketing efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of changes in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of increase of miscellaneous costs and others . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

650,000
450,000
150,000(300,000)
15,261

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

965,26176

Toyota’s operating income increased by ¥965.2 billion, or 271.4%, to ¥1,320.8 billion during fiscal 2013
compared with the prior fiscal year. This increase was due mainly to the ¥650.0 billion increase of marketing
efforts, the ¥450.0 billion impact of cost reduction efforts and the ¥150.0 billion favorable impact of changes inexchange rates, partially offset by the ¥300.0 billion increase in miscellaneous costs and others. The increase in
miscellaneous costs and others was due mainly to the ¥90.0 billion charge for costs related to the settlement of
the economic loss claims in the consolidated federal action in the U.S., the ¥70.0 billion increase in labor costs,
the ¥50.0 billion impact of increase in product quality related expenses and the ¥20.0 billion increase in researchand development expenses.
During fiscal 2013, operating income (before elimination of intersegment profits), increased by¥783.3 billion in Japan compared with the prior fiscal year, ¥35.5 billion, or 19.1%, in North America,¥8.6 billion, or 48.7%, in Europe, ¥119.2 billion, or 46.4%, in Asia, and ¥24.9 billion, or 22.9%, in Other.
The following is a description of operating income in each geographic market.
Japan
Yen in millions
2013 v. 2012 Change

Changes in operating income and loss:
Effect of marketing efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of changes in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of increase of miscellaneous costs and others . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

415,000
380,000
165,000(170,000)(6,625)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

783,375

North America
Yen in millions
2013 v. 2012 Change

Changes in operating income and loss:
Effect of marketing efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of increase of miscellaneous costs and others . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30,00050,000(65,000)
20,516

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

35,516

EuropeYen in millions
2013 v. 2012 Change

Changes in operating income and loss:
Effect of marketing efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of increase of miscellaneous costs and others . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,000
5,000
(5,000)3,666

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,666

77

Asia
Yen in millions
2013 v. 2012 Change

Changes in operating income and loss:
Effect of marketing efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of changes in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of increase of miscellaneous costs and others . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

135,000
15,000(10,000)(30,000)
9,265

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

119,265

Other Income and Expenses
Interest and dividend income decreased by ¥1.1 billion, or 1.2%, to ¥98.6 billion during fiscal 2013
compared with the prior fiscal year.
Interest expense was ¥22.9 billion during fiscal 2013, on the same level as that of the prior fiscal year.
Foreign exchange gain, net decreased by ¥31.5 billion, or 85.0%, to ¥5.5 billion during fiscal 2013
compared with the prior fiscal year. Foreign exchange gains and losses include the differences between the valueof foreign currency denominated assets and liabilities recognized through transactions in foreign currencies
translated at prevailing exchange rates and the value at the date the transaction settled during the fiscal year,
including those settled using forward foreign currency exchange contracts, or the value translated by appropriate
year-end current exchange rates. The ¥31.5 billion decrease in foreign exchange gain, net was due mainly to thelosses resulting from the Japanese yen being stronger against foreign currencies at the time foreign currency
bonds were redeemed during fiscal 2013 than those at the time of purchase.
Other loss, net increased by ¥38.3 billion to ¥1.5 billion during fiscal 2013 compared with the prior fiscal
year.
Income Taxes
The provision for income taxes increased by ¥289.4 billion, or 110.3%, to ¥551.6 billion during fiscal 2013
compared with the prior fiscal year due to the increase in income before income taxes. The effective tax rate forfiscal 2013 was 39.3%, which was higher than the statutory tax rate in Japan. This was due mainly to deferred tax
liabilities relating to undistributed earnings in affiliated companies accounted for by the equity method.
Net Income Attributable to Noncontrolling Interests and Equity in Earnings of Affiliated Companies
Net income attributable to noncontrolling interests increased by ¥36.5 billion, or 43.2%, to ¥121.3 billion
during fiscal 2013 compared with the prior fiscal year. This increase was due mainly to an increase during fiscal
2013 in net income attributable to the shareholders of consolidated subsidiaries.
Equity in earnings of affiliated companies during fiscal 2013 increased by ¥33.8 billion, or 17.1%, to¥231.5 billion compared with the prior fiscal year. This increase was due mainly to an increase during fiscal 2013in net income attributable to the shareholders of affiliated companies accounted for by the equity method.
Net Income Attributable to Toyota Motor Corporation
Net income attributable to the shareholders of Toyota Motor Corporation increased by ¥678.6 billion, or
239.3%, to ¥962.1 billion during fiscal 2013 compared with the prior fiscal year.
78

Other Comprehensive Income and Loss
Other comprehensive income increased by ¥856.8 billion to ¥822.7 billion for fiscal 2013 comparedwith the prior fiscal year. This increase resulted from favorable foreign currency translation adjustments
gains of ¥434.6 billion in fiscal 2013 compared with losses of ¥87.7 billion in the prior fiscal year, and fromunrealized holding gains on securities in fiscal 2013 of ¥368.5 billion compared with gains of ¥129.3 billion in
the prior fiscal year. The increase in unrealized holding gains on securities was due mainly to changes in stock
prices.
Segment Information
The following is a discussion of results of operations for each of Toyota’s operating segments. The amounts
presented are prior to intersegment elimination.
Yen in millions
Year ended March 31,
2013 v. 2012 Change
2012
2013
AmountPercentage

Automotive:
Net revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Services:
Net revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All Other:
Net revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intersegment elimination/unallocated amount:
Net revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16,994,546
21,683

20,419,100
944,704

3,424,554
923,02120.2%
4,256.9

1,100,324
306,438

1,170,670
315,820

70,346
9,382

6.4
3.1

1,048,915
42,062

1,066,461
53,616

17,546
11,5541.7
27.5(560,132)(14,556)(592,039)
6,748(31,907)21,304——

Automotive Operations Segment
The automotive operations segment is Toyota’s largest operating segment by net revenues. Net revenues forthe automotive segment increased during fiscal 2013 by ¥3,424.5 billion, or 20.2%, compared with the priorfiscal year to ¥20,419.1 billion. The increase reflects the ¥3,030.0 billion of favorable impact of changes invehicle unit sales and sales mix and the ¥245.4 billion favorable impact of fluctuations in foreign currencytranslation rates.
Operating income from the automotive operations increased by ¥923.0 billion during fiscal 2013 comparedwith the prior fiscal year to ¥944.7 billion. This increase in operating income was due mainly to the¥150.0 billion favorable impact of changes in exchange rates, the ¥645.0 billion of favorable impact of changes
in vehicle unit sales and sales mix, and the ¥450.0 billion impact of cost reduction efforts, partially offset by the¥300.0 billion increase in miscellaneous costs and others.
The changes in vehicle unit sales and changes in sales mix was due primarily to the increase in Toyota’s
vehicle unit sales by 1,519 thousand vehicles compared with the prior fiscal year resulting from the increase in
vehicle unit sales in every region. The increase in miscellaneous costs and others was due mainly to the¥90.0 billion charge for costs related to the settlement of the economic loss claims in the consolidated federal
action in the U.S., the ¥70.0 billion increase in labor costs, the ¥50.0 billion impact of increase in product quality
related expenses and the ¥20.0 billion increase in research and development expenses.

79

Financial Services Operations Segment
Net revenues for the financial services operations increased during fiscal 2013 by ¥70.3 billion, or 6.4%,
compared with the prior fiscal year to ¥1,170.6 billion. This increase was primarily due to the ¥36.0 billion
favorable impact of fluctuations in foreign currency translation rates and the ¥25.8 billion increase in rental
income from vehicles and equipment on operating leases.
Operating income from financial services operations increased by ¥9.3 billion, or 3.1%, to ¥315.8 billion
during fiscal 2013 compared with the prior fiscal year. This increase was due primarily to the recording of ¥12.9
billion of valuation gains on interest rate swaps stated at fair value.
Ratio of credit loss experience in the United States is as follows:Year ended March 31,
2012
2013

Net charge-offs as a percentage of average gross earning assets:
Finance receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

0.24%
0.11

0.29%
0.18

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

0.21%

0.27%

All Other Operations Segment
Net revenues for Toyota’s other operations segments increased by ¥17.5 billion, or 1.7%, to ¥1,066.4 billion
during fiscal 2013 compared with the prior fiscal year.
Operating income from Toyota’s other operations segments increased by ¥11.5 billion, or 27.5%, to¥53.6 billion during fiscal 2013 compared with the prior fiscal year.
Related Party Transactions
Toyota does not have any significant related party transactions other than transactions with affiliatedcompanies in the ordinary course of business. See note 11 to the consolidated financial statements for further
discussion.
Legislation Regarding End-of-Life Vehicles
In October 2000, the European Union brought into effect a directive that requires member states topromulgate regulations implementing the following:•

automotive manufacturers shall bear all or a significant part of the costs for taking back end-of-life
vehicles sold after July 1, 2002 and dismantling and recycling those vehicles. Beginning January 1,
2007, this requirement became applicable to vehicles sold before July 1, 2002 as well;•automotive manufacturers may not use certain hazardous materials in vehicles sold after July 1, 2003;•

certified vehicles models sold after December 15, 2008 shall be re-usable and/or recyclable to aminimum of 85% by weight per vehicle and shall be re-usable and/or re-use as material or energy to aminimum of 95% by weight per vehicle; and•end-of-life vehicles must meet actual re-use and/or recycling of 80% and re-use and/or recovery of 85%,
respectively, of vehicle weight by 2006, rising respectively to 85% and 95% by 2015.

See note 23 to the consolidated financial statements for further discussion.
80Recent Accounting Pronouncements in the United States
In July 2013, the FASB issued updated guidance on uncertain tax positions. This guidance requires anunrecognized tax benefit, or a portion of an unrecognized tax benefit, to be presented in the financial statements
as a reduction to a deferred tax asset for a net operating loss carryforward for tax purposes, a similar tax loss, or a
tax credit carryforward. This guidance is effective for fiscal years, and interim periods within those years,
beginning after December 15, 2013. Management does not expect this guidance to have a material impact on
Toyota’s consolidated financial statements.
In May 2014, the FASB issued updated guidance on the recognition of revenue from contracts withcustomers. This guidance will supersede the current revenue recognition guidance. This guidance is effective forannual reporting periods beginning after December 15, 2016, including interim periods within that reporting
period. Management is evaluating the impact of adopting this guidance on Toyota’s consolidated financial
statements.
Critical Accounting Estimates
The consolidated financial statements of Toyota are prepared in conformity with accounting principles
generally accepted in the United States of America. The preparation of these financial statements requires the useof estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses during the periods presented. Toyota
believes that of its significant accounting policies, the following may involve a higher degree of judgments,
estimates and assumptions:
Product Warranties and Recalls and Other Safety Measures
Toyota generally warrants its products against certain manufacturing and other defects. Provisions for
product warranties are provided for specific periods of time and/or usage of the product and vary depending upon
the nature of the product, the geographic location of the sale and other factors. All product warranties are
consistent with commercial practices. Toyota includes a provision for estimated product warranty costs as acomponent of cost of sales at the time the related sale is recognized. The accrued warranty costs represent
management’s best estimate at the time of sale of the total costs that Toyota will incur to repair or replace
product parts that fail while still under warranty. The amount of accrued estimated warranty costs is primarily
based on historical experience of product failures as well as current information on repair costs. The amount of
warranty costs accrued also contains an estimate of warranty claim recoveries to be received from suppliers. The
foregoing evaluations are inherently uncertain, as they require material estimates and some products’ warranties
extend for several years. Consequently, actual warranty costs may differ from the estimated amounts and could
require additional warranty provisions. If these factors require a significant increase in Toyota’s accrued
estimated warranty costs, it would negatively affect future operating results of the automotive operations.
An estimate of warranty claim accrued for each fiscal year is calculated based on the estimate of warranty
claim per unit. The estimate of warranty claim per unit is calculated by dividing the actual amounts of warranty
claim, net of claim recovery cost received from suppliers, by the number of sales units for the fiscal year.
As the historical recovery amounts received from suppliers is used as a factor in Toyota’s calculation of
estimated accrued warranty cost, the estimated accrued warranty cost may change depending on the average
recovery amounts received from suppliers in the past. However, Toyota believes that there is not a significant
uncertainty of estimated amounts based on historical experience regarding recoveries received from suppliers.
Toyota may seek recovery to suppliers over the life of the warranty, and there are no other significant special
terms and conditions including cap on amounts that can be recovered.
Toyota accrues for costs of recalls and other safety measures, as well as product warranty cost describedabove, included as a component of cost of sales at the time of vehicle sale. Toyota provides for such “liabilities
for recalls and other safety measures” at the time of vehicle sales comprehensively by aggregate sales of various
81models in a certain period by geographical regions instead of by individual models. While there is no differencein the calculation method among geographical regions, Toyota believes it is reasonable to calculate the liabilities
by geographical regions because of factors such as varying labor costs among geographical regions.
The “liabilities for the costs of recalls and other safety measures” recorded in the balance sheet is calculated
by deducting the “accumulated amount of repair cost paid” from the “expected liability for the cost of recalls andother safety measures”. As such, this liability is evaluated every period based on new data and are adjusted as
appropriate. Toyota calculates these liabilities for units sold in the current period and each of the past 10 fiscal
years, and aggregates such liabilities in determining the final liability amount.
The “expected liability for the cost of recalls and other safety measures” are calculated by multiplying the“sales unit” by the “expected average repair cost per unit”. The “expected average repair cost per unit” iscalculated based on dividing the “accumulated amount of repair cost paid per unit” by the “pattern of payment
occurrences”. The “pattern of payment occurrence” represents a ratio that shows the measure of payment
occurrence over 10 years based on actual payments with regard to units sold within 10 years.
Factors that may cause a difference between the amount accrued at the time of vehicle sale and actual
payment on individual recalls and other safety measures mainly include actual cost of recalls and safety measuresduring the period being significantly different from the accumulated amount of repair cost paid per unit
(generally comprised of parts and labor) and the actual pattern of payment occurrence during the period being
significantly different from the pattern of the payment occurrence in the past, which is considered as part of ourestimation process for future recalls and other safety measures.
As described above, in estimating the comprehensive provision, the actual cost of individual recalls andother safety measures is included as a component of the calculation such as the accumulated amount of repair
cost paid per unit. Thus, an individual recall announcement generally does not directly impact the financial
statements when it occurs.
Allowance for Doubtful Accounts and Credit Losses
Natures of estimates and assumptions
Retail receivables and finance lease receivables consist of retail installment sales contracts secured bypassenger cars and commercial vehicles. Collectability risks include consumer and dealer insolvencies andinsufficient collateral values (less costs to sell) to realize the full carrying values of these receivables. As a matterof policy, Toyota maintains an allowance for doubtful accounts and credit losses representing management’s
estimate of the amount of asset impairment in the portfolios of finance, trade and other receivables. Toyota
determines the allowance for doubtful accounts and credit losses based on a systematic, ongoing review andevaluation performed as part of the credit-risk evaluation process, historical loss experience, the size andcomposition of the portfolios, current economic events and conditions, the estimated fair value and adequacy ofcollateral, and other pertinent factors. This evaluation is inherently judgmental and requires material estimates,
including the amounts and timing of future cash flows expected to be received, which may be susceptible tosignificant change. Although management considers the allowance for doubtful accounts and credit losses to beadequate based on information currently available, additional provisions may be necessary due to (i) changes inmanagement estimates and assumptions about asset impairments, (ii) information that indicates changes in
expected future cash flows, or (iii) changes in economic and other events and conditions. To the extent that sales
incentives remain an integral part of sales promotion with the effect of reducing new vehicle prices, resale prices
of used vehicles and, correspondingly, the collateral value of Toyota’s retail receivables and finance leasereceivables could experience further downward pressure. If these factors require a significant increase in
Toyota’s allowance for doubtful accounts and credit losses, it could negatively affect future operating results ofthe financial services operations. The level of credit losses, which has a greater impact on Toyota’s results ofoperations, is influenced by two factors: frequency of occurrence and expected severity of loss. For evaluation
purposes, exposures to credit losses are segmented into the two primary categories of “consumer” and “dealer”.
82Toyota’s “consumer” category consists of smaller balances that are homogenous retail receivables and financelease receivables. The “dealer” category consists of wholesale and other dealer loan receivables. The overall
allowance for credit losses is evaluated at least quarterly, considering a variety of assumptions and factors todetermine whether reserves are considered adequate to cover probable losses.
Sensitivity analysis
The level of credit losses, which could significantly impact Toyota’s results of operations, is influenced by
two factors: frequency of occurrence and expected severity of loss. The overall allowance for credit losses isevaluated at least quarterly, considering a variety of assumptions and factors to determine whether reserves are
considered adequate to cover probable losses. The following table illustrates the effect of an assumed change infrequency of occurrence or expected severity of loss mainly in the United States, assuming all other assumptions
are held consistent. The table below represents the impact on the allowance for credit losses in Toyota’s financial
services operations of the change in frequency of occurrence or expected severity of loss as any change impacts
most significantly on the financial services operations.
Yen in millions
Effect on the allowancefor credit losses
as of March 31, 201410 percent change in frequency of occurrence or expected severity of loss . . . . . . . . . . . . . .

3,808

Investment in Operating Leases
Natures of estimates and assumptions
Vehicles on operating leases, where Toyota is the lessor, are valued at cost and depreciated over theirestimated useful lives using the straight-line method to their estimated residual values. Toyota utilizes industry
published information and its own historical experience to determine estimated residual values for these vehicles.
Toyota evaluates the recoverability of the carrying values of its leased vehicles for impairment when there areindications of declines in residual values, and if impaired, Toyota recognizes an allowance for losses on its
residual values.
Throughout the life of the lease, management performs periodic evaluations of estimated end-of-term fairvalues to determine whether estimates used in the determination of the contractual residual value are still
considered reasonable. Factors affecting the estimated residual value at lease maturity include, but are not limited
to, new vehicle incentive programs, new vehicle pricing, used vehicle supply, projected vehicle return rates, andprojected loss severity. The vehicle return rate represents the number of leased vehicles actually returned atcontract maturity as a percentage of the number of lease contracts originally scheduled to mature in the same
period less lease contracts subject to early terminations. A higher rate of vehicle returns exposes Toyota to higher
potential losses incurred at lease termination. Severity of loss is the extent to which the end-of-term fair value ofa lease is less than its carrying value at lease end.
To the extent that sales incentives remain an integral part of sales promotion, resale prices of used vehicles
and, correspondingly, the fair value of Toyota’s leased vehicles could be subject to downward pressure. The
extent of the impact this will have on the end of term residual value depends on the significance of the incentive
programs and whether they are sustained over a number of periods. This in turn can impact the projection of
future used vehicle values, adversely impacting the expected residual value of the current operating leaseportfolio and increasing the provision for residual value losses. However, various other factors impact used
vehicle values and the projection of future residual values, including the supply of and demand for used vehicles,interest rates, inflation, the actual or perceived quality, safety and reliability of vehicles, the general economic
outlook, new vehicle pricing, projected vehicle return rates and projected loss severity, which may offset thiseffect. Such factors may adversely affect the results of operations for financial services due to significant charges
reducing the estimated residual value.
83

Sensitivity analysis
The following table illustrates the effect of an assumed change in the vehicle return rate and end-of-term
market values mainly in the United States, which Toyota believes are the critical estimates, in determining theresidual value losses, holding all other assumptions constant. The following table represents the impact on theresidual value losses in Toyota’s financial services operations of the change in vehicle return rate and end-ofterm market values as those changes have a significant impact on financial services operations.
Yen in millions
Effect on the residual value losses
over the remaining termsof the operating leases
on and after April 1, 2014

1 percent increase in vehicle return rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1 percent increase in end-of-term market values . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,647
6,278

Impairment of Long-Lived Assets
Toyota periodically reviews the carrying value of its long-lived assets held and used and assets to bedisposed of, including intangible assets, when events and circumstances warrant such a review. This review isperformed using estimates of future cash flows. If the carrying value of a long-lived asset is considered impaired,an impairment charge is recorded for the amount by which the carrying value of the long-lived asset exceeds its
fair value. Management believes that the estimates of future cash flows and fair values are reasonable. However,changes in estimates of such cash flows and fair values would affect the evaluations and negatively affect future
operating results of the automotive operations. In fiscal 2014, Toyota recorded long-lived assets impairment
charges relating to the end of production in Australia. See note 27 to the consolidated financial statements forfurther discussion.
Pension Costs and Obligations
Natures of estimates and assumptions
Pension costs and obligations are dependent on assumptions used in calculating such amounts. Theseassumptions include discount rates, benefits earned, interest costs, expected rate of return on plan assets,mortality rates and other factors. Actual results that differ from the assumptions are accumulated and amortizedover future periods and, therefore, generally affect recognized expense in future periods. While management
believes that the assumptions used are appropriate, differences in actual experience or changes in assumptions
may affect Toyota’s pension costs and obligations.
The two most critical assumptions impacting the calculation of pension costs and obligations are thediscount rates and the expected rates of returns on plan assets. Toyota determines the discount rates mainly basedon the rates of high quality fixed income bonds or fixed income governmental bonds currently available andexpected to be available during the period to maturity of the defined benefit pension plans. Toyota determines the
expected rates of return for pension assets after considering several applicable factors including, the compositionof plan assets held, assumed risks of asset management, historical results of the returns on plan assets, Toyota’s
principal policy for plan asset management, and forecasted market conditions. A weighted-average discount rateof 1.7% domestically and 4.5% overseas and a weighted-average expected rate of return on plan assets of 2.6%
domestically and 6.9% overseas are the results of assumptions used for the various pension plans in calculating
Toyota’s consolidated pension costs for fiscal 2014. Also, a weighted-average discount rate of 1.4% domesticallyand 4.8% overseas is the result of assumption used for the various pension plans in calculating Toyota’s
consolidated pension obligations for fiscal 2014.

84

Sensitivity analysis
The following table illustrates the effects of assumed changes in weighted-average discount rates and theweighted-average expected rate of return on plan assets, which Toyota believes are critical estimates indetermining pension costs and obligations, assuming all other assumptions are consistent.
Yen in millions
Domestic
Overseas
Effect on pre-tax income Effect on obligations Effect on pre-tax income Effect on obligations
for the year ended
for the year ended
for the year ended
for the year ended
March 31, 2015
March 31, 2014
March 31, 2015
March 31, 2014

Discount rates
0.5% decrease . . . . .
0.5% increase . . . . . .
Expected rate of return onplan assets
0.5% decrease . . . . .
0.5% increase . . . . . .

(7,014)
6,830

124,531(115,234)(6,222)
6,222(5,790)5,474

93,520(82,020)(2,905)2,905

Derivatives and Other Contracts at Fair Value
Toyota uses derivatives in the normal course of business to manage its exposure to foreign currency
exchange rates and interest rates. The accounting for derivatives is complex and continues to evolve. Toyota
estimates the fair value of derivative financial instruments using industry-standard valuation models that require
observable inputs including interest rates and foreign exchange rates, and the contractual terms. In other certain
cases when market data is not available, key inputs to the fair value measurement include quotes fromcounterparties, and other market data. These estimates are based upon valuation methodologies deemed
appropriate under the circumstances. However, the use of different assumptions may have a material effect on theestimated fair value amounts.
Marketable Securities and Investments in Affiliated Companies
Toyota’s accounting policy is to record a write-down of such investments to net realizable value when adecline in fair value below the carrying value is other-than-temporary. In determining if a decline in value isother-than-temporary, Toyota considers the length of time and the extent to which the fair value has been lessthan the carrying value, the financial condition and prospects of the company and Toyota’s ability and intent toretain its investment in the company for a period of time sufficient to allow for any anticipated recovery in fairvalue.
Deferred Tax Assets
The factors used to assess the likelihood of realization of the deferred tax assets are the future reversal ofexisting taxable temporary differences, the future taxable income and available tax planning strategies that are
prudent and feasible. All available evidence, both positive and negative, is considered to determine whether,based on the weight of that evidence, a valuation allowance is needed for deferred tax assets which are not morelikely-than-not to be realized.
The accounting for deferred tax assets represents Toyota’s current best estimate based on all available
evidence. Unanticipated events or changes could result in re-evaluating the realizability of deferred tax assets.
OutlookAs for our future business environment, the world economy is expected to benefit from ongoing moderate
recovery in the U.S. and a gradual move toward recovery in Europe, meanwhile, some emerging countries show85

signs of uncertainty. The Japanese economy is expected to remain on a recovery trend, backed by an improved
environment for exports and the effects of various policy measures. Due attention should be paid, however, todownside risks mainly from the continuing uncertainty of overseas economies, especially in emerging countries,
and the downturn in consumption following a surge in last-minute demand spurred by the consumption tax
increase in Japan.
The automotive market is expected to see expansion mainly in the U.S.; however, amid the change inmarket structure, as seen in the expansion and diversification of demand for eco-cars backed by rising
environmental consciousness and rapid advances in information and communications technology, fierce
competition exists on a global scale. In light of the foregoing external factors, Toyota expects that net revenues
for fiscal 2015 will increase compared with fiscal 2014 due to price revisions and other factors, partially offset by
the unfavorable impact of fluctuations in foreign currency translation rates and a decrease in vehicle unit sales.
Toyota expects that operating income will increase in fiscal 2015 compared with fiscal 2014 due mainly to thefavorable impact of cost reduction efforts and marketing efforts, partially offset by an increase in miscellaneous
costs, decrease in vehicle unit sales and changes in sales mix and the unfavorable impact of fluctuations inforeign currency rates. Toyota expects that income before income taxes and equity in earnings of affiliatedcompanies and net income attributable to Toyota Motor Corporation will decrease in fiscal 2015 due to foreignexchange gains and losses and other factors.
For the purposes of this outlook discussion, Toyota is assuming an average exchange rate of ¥100 to the
U.S. dollar and ¥140 to the euro. Exchange rate fluctuations can materially affect Toyota’s operating results. In
particular, a strengthening of the Japanese yen against the U.S. dollar can have a material adverse effect on
Toyota’s operating results. See “Operating and Financial Review and Prospects — Operating Results —Overview — Currency Fluctuations” for further discussion.
The foregoing statements are forward-looking statements based upon Toyota’s management’s assumptions
and beliefs regarding exchange rates, market demand for Toyota’s products, economic conditions and others. See“Cautionary Statement Concerning Forward-Looking Statements”. Toyota’s actual results of operations could
vary significantly from those described above as a result of unanticipated changes in the factors described aboveor other factors, including those described in “Risk Factors”.
5.B LIQUIDITY AND CAPITAL RESOURCES
Historically, Toyota has funded its capital expenditures and research and development activities throughcash generated by operations.
In fiscal 2015, Toyota expects to sufficiently fund its capital expenditures and research and development
activities through cash and cash equivalents on hand, and cash generated by operations. Toyota will use its funds
for the development of environment technologies, maintenance and replacement of manufacturing facilities, andthe introduction of new products. See “Information on the Company — Business Overview — Capital
Expenditures and Divestitures” for information regarding Toyota’s material capital expenditures and divestitures
for fiscal 2012, 2013 and 2014, and information concerning Toyota’s principal capital expenditures anddivestitures currently in progress.
Toyota funds its financing programs for customers and dealers, including loans and leasing programs, fromboth cash generated by operations and borrowings by its sales finance subsidiaries. Toyota seeks to expand its
ability to raise funds locally in markets throughout the world by expanding its network of finance subsidiaries.
Net cash provided by operating activities increased by ¥1,194.7 billion to ¥3,646.0 billion for fiscal 2014,
compared with ¥2,451.3 billion for fiscal 2013. The increase was primarily attributable to the ¥971.2 billion
increase in operating income. This increase in operating income was due mainly to the ¥900.0 billion favorable
impact of changes in exchange rates, the ¥290.0 billion impact of cost reduction efforts and the ¥180.0 billion
impact of marketing efforts, partially offset by the ¥480.0 billion increase in miscellaneous costs and others.
86

Results of operations are recorded on an accrual basis and are therefore different from cash provided or usedin operating activities. Other than operating income, the increase of net cash provided by operating activities wasprimarily attributable to the ¥438.5 billion increase in “accrued income taxes” resulting from the increase inincome before income taxes and equity in earnings of affiliated companies, compared with an increase of ¥22.1
billion for fiscal 2013 resulting from the increase in operating income that was partially offset by the usage of
operating loss carryforwards. The increases in “operating income” and “accrued income taxes” in fiscal 2014
were partially offset by the ¥160.0 billion in “deferred income taxes” for fiscal 2013 mainly due to the usage of
operating loss carryforwards.
Net cash provided by operating activities increased by ¥998.8 billion to ¥2,451.3 billion for fiscal 2013,
compared with ¥1,452.4 billion for fiscal 2012. The increase was primarily attributable to the ¥965.2 billion
increase in operating income. This increase in operating income was due mainly to the ¥650.0 billion impact ofmarketing efforts, including an increase in numbers of vehicle unit sales mainly in North America, Asia andothers, the ¥450.0 billion impact of cost reduction efforts and the ¥150.0 billion favorable impact of changes inexchange rates mainly due to the weaker yen against the U.S. dollar, partially offset by the ¥300.0 billion
increase in miscellaneous costs and others.
Results of operations are recorded on an accrual basis and are therefore different from cash provided or usedin operating activities. The main reasons for the difference are changes in working capital at each fiscal year-end.
The material factors that impacted our working capital in fiscal 2013, were as follows:
In net cash provided by operating activities for fiscal 2013, accounts and notes receivable increased by¥168.2 billion due mainly to the increase in wholesale and other dealer loan receivables driven by the increase ininventory level at the dealers, even though it was partially offset by the decrease in accounts and notes receivable
driven by the decrease in numbers of vehicle unit sales in the fourth quarter of fiscal 2013 compared with thefourth quarter of fiscal 2012 which was not in line with the increase in numbers of the annual vehicle unit sales
level in fiscal 2013 compared to fiscal 2012.
In addition, accounts payable decreased by ¥209.2 billion due mainly to the decrease in production level inthe fourth quarter of fiscal 2013 compared with the fourth quarter of fiscal 2012 which was not in line with theincrease in numbers of the annual production level in fiscal 2013 compared to fiscal 2012. These changes inworking capital items had a negative impact on the net cash provided by operating activities for fiscal 2013.
In net cash provided by operating activities for fiscal 2012, accounts and notes receivable increased by¥585.4 billion, inventories increased by ¥344.9 billion and accounts payable increased by ¥756.3 billion due
mainly to the significant decrease in production, sales and inventory in March 2011 due to the Great East Japan
Earthquake and increase in production, sales and inventory in the fourth quarter of fiscal 2012 due to therecovery of production levels from the earthquake. Collectively, these changes in working capital items had anegative impact on the net cash provided by operating activities for fiscal 2012.
As working capital changes not directly related to our increased operating income had a similar impact on
net cash provided by operating activities in fiscal 2012 and 2013, the impact of such changes in working capital
items on net cash provided by operating activities for fiscal 2013 compared with fiscal 2012 was limited.
Net cash used in investing activities increased by ¥1,308.9 billion to ¥4,336.2 billion for fiscal 2014,
compared with ¥3,027.3 billion for fiscal 2013. The increase was primarily attributable to the ¥675.6 billion
increase in purchases of marketable securities and security investments and to the ¥589.0 billion increase inpurchases of equipment leased to others.
Net cash used in investing activities increased by ¥1,584.6 billion to ¥3,027.3 billion for fiscal 2013,
compared with ¥1,442.6 billion for fiscal 2012. The increase was primarily attributable to the ¥630.5 billion
increase in finance receivables, to the ¥426.5 billion increase in purchases of marketable securities and security
investments and to the ¥311.0 billion increase in purchases of equipment leased to others.
87Net cash provided by financing activities increased by ¥442.2 billion to ¥919.4 billion for fiscal 2014,
compared with ¥477.2 billion for fiscal 2013. The increase was primarily attributable to the ¥699.0 billion
increase in proceeds from issuance of long-term debt, partially offset by the ¥306.7 billion increase in paymentsof long-term debt.
Net cash provided by financing activities increased by ¥832.5 billion to ¥477.2 billion for fiscal 2013,
compared with net cash used in financing activities of ¥355.3 billion for fiscal 2012. The increase was primarily
attributable to the ¥796.4 billion increase in proceeds from issuance of long-term debt and to the ¥185.4 billion
decrease in payments of long-term debt.
Total capital expenditures for property, plant and equipment, excluding vehicles and equipment on operatingleases, were ¥970.0 billion during fiscal 2014, an increase of 13.5% from the ¥854.5 billion in total capital
expenditures during the prior fiscal year. This increase was due primarily to an increase in investments in Japanand Asia.
Total capital expenditures for vehicles and equipment on operating leases were ¥1,708.6 billion during fiscal
2014, an increase of 52.6% from the ¥1,119.5 billion in total capital expenditures during the prior fiscal year.
This increase was due primarily to an increase in investments in the financial services operations.
Toyota expects investments in property, plant and equipment, excluding vehicles and equipment on
operating leases, to be approximately ¥1,020.0 billion during fiscal 2015.
Based on currently available information, Toyota does not expect environmental matters to have a material
impact on its financial position, results of operations, liquidity or cash flows during fiscal 2015. However,uncertainty exists with respect to Toyota’s obligations under current and future environment regulations as
described in “Information on the Company — Business Overview — Governmental Regulation, Environmental
and Safety Standards”.
Cash and cash equivalents were ¥2,041.1 billion as of March 31, 2014. Most of Toyota’s cash and cash
equivalents are held in Japanese yen or in U.S. dollars. In addition, time deposits were ¥180.2 billion andmarketable securities were ¥2,046.8 billion as of March 31, 2014.
Liquid assets, which Toyota defines as cash and cash equivalents, time deposits, marketable debt securities
and its investment in monetary trust funds, increased during fiscal 2014 by ¥1,954.5 billion, or 28.7%, to¥8,759.0 billion.
Trade accounts and notes receivable, less allowance for doubtful accounts increased during fiscal 2014 by¥64.5 billion, or 3.3%, to ¥2,036.2 billion. This increase was due mainly to the fluctuations in foreign currencytranslation rates.
Inventories increased during fiscal 2014 by ¥178.9 billion, or 10.4%, to ¥1,894.7 billion. This increase wasdue mainly to the fluctuations in foreign currency translation rates.
Total finance receivables, net increased during fiscal 2014 by ¥1,669.8 billion, or 13.8%, to ¥13,731.2
billion. This increase was due mainly to the fluctuations in foreign currency translation rates and an increase in
the number of financing contracts. As of March 31, 2014, finance receivables were geographically distributed asfollows: in North America 57.1%, in Asia 11.4%, in Europe 10.8%, in Japan 8.9% and in Other 11.8%.
Marketable securities and other securities investments, including those included in current assets, increased
during fiscal 2014 by ¥2,189.6 billion, or 33.1%, reflecting an increase in the fair values of common stocks andpurchase of marketable securities and security investments.

88Property, plant and equipment increased during fiscal 2014 by ¥790.0 billion, or 11.5%, primarily reflecting
fluctuations in foreign currency translation rates and the increase in the capital expenditures, partially offset by
the impacts of depreciation charges during the year.
Accounts and notes payable increased during fiscal 2014 by ¥99.4 billion, or 4.7%. This increase was due
mainly to the increase in production volume in the fourth quarter of fiscal 2014.
Accrued expenses increased during fiscal 2014 by ¥127.6 billion, or 5.8%. This increase was due mainly tothe increase in product quality related expenses.
Income taxes payable increased during fiscal 2014 by ¥438.5 billion, or 280.7%. This increase was due
mainly to the increase in income before income taxes and equity in earnings of affiliated companies.
Toyota’s total borrowings increased during fiscal 2014 by ¥2,195.6 billion, or 15.5%. Toyota’s short-termborrowings consist of loans with a weighted-average interest rate of 2.57% and commercial paper with aweighted-average interest rate of 0.49%. Short-term borrowings increased during fiscal 2014 by ¥741.2 billion,or 18.1%, to ¥4,830.8 billion. Toyota’s long-term debt consists of unsecured and secured loans, medium-term
notes, unsecured notes and long-term capital lease obligations with interest rates ranging from 0.00% to 41.79%,
and maturity dates ranging from 2014 to 2047. The current portion of long-term debt increased during fiscal 2014by ¥245.2 billion, or 9.1%, to ¥2,949.6 billion and the non-current portion increased by ¥1,209.0 billion, or
16.5%, to ¥8,546.9 billion. The increase in total borrowings resulted mainly from an increase in medium-term
notes. As of March 31, 2014, approximately 43% of long-term debt was denominated in U.S. dollars, 14% inJapanese yen, 11% in Australian dollars, and 32% in other currencies. Toyota hedges interest rate risk exposureof fixed-rate borrowings by entering into interest rate swaps. There are no material seasonal variations in
Toyota’s borrowings requirements.
As of March 31, 2014, Toyota’s total interest bearing debt was 112.8% of Toyota Motor Corporation
shareholders’ equity, compared with 116.3% as of March 31, 2013.
The following table provides information for credit rating of Toyota’s short-term borrowing and long-term
debt from rating agencies, Standard & Poor’s Ratings Group (S&P), Moody’s Investors Services (Moody’s), andRating and Investment Information, Inc. (R&I), as of May 31, 2014. A credit rating is not a recommendation tobuy, sell or hold securities. A credit rating may be subject to withdrawal or revision at any time. Each rating
should be evaluated separately of any other rating.

Short-term borrowing . . . . .
Long-term debt . . . . . . . . . .

S&P

Moody’s

R&I

A-1+
AA-

P-1
Aa3

—
AA+

Toyota’s unfunded pension liabilities of Japanese plans decreased during fiscal 2014 by ¥91.0 billion, or
18.1%, to ¥413.0 billion. The liabilities of foreign plans also decreased during fiscal 2014 by ¥29.3 billion, or
19.0%, to ¥124.6 billion. The unfunded amounts will be funded through future cash contributions by Toyota or insome cases will be settled on the retirement date of each covered employee. The decrease in unfunded pension
liabilities of the Japanese plans as of the end of fiscal 2014 compared with the prior fiscal year end reflects
mainly an increase in pension assets due to an increase in equity security prices, despite an increase in pension
benefit obligations that resulted from a decline in discount rate. The decrease in unfunded pension liabilities offoreign plans also reflects the increase in pension assets resulting mainly from an increase in equity security
prices. See note 19 to the consolidated financial statements for further discussion.
Toyota’s treasury policy is to maintain controls on all exposures, to adhere to stringent counterparty credit
standards, and to actively monitor marketplace exposures. Toyota remains centralized, and is pursuing global
efficiency of its financial services operations through Toyota Financial Services Corporation.
89

The key element of Toyota’s financial strategy is maintaining a strong financial position that will allow
Toyota to fund its research and development initiatives, capital expenditures and financial services operations
efficiently even if earnings are subject to short-term fluctuations. Toyota believes that it maintains sufficientliquidity for its present requirements and that by maintaining its high credit ratings, it will continue to be able toaccess funds from external sources in large amounts and at relatively low costs. Toyota’s ability to maintain its
high credit ratings is subject to a number of factors, some of which are not within Toyota’s control. These factors
include general economic conditions in Japan and the other major markets in which Toyota does business, aswell as Toyota’s successful implementation of its business strategy.
5.C RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES
Toyota believes that its long-term success depends on its ability to secure a leadership position with respect
to vehicle research and development.
Toyota’s research and development expenditures were approximately ¥910.5 billion in fiscal 2014,¥807.4 billion in fiscal 2013 and ¥779.8 billion in fiscal 2012.
For this reason, Toyota is promoting next generation environmentally friendly, energy efficient, and safe
vehicle technology in its research and development. Toyota is making efforts to produce vehicles that arefriendly to the environment and human beings, with efforts focused in the following fields:•

further improvements in hybrid technologies (functions, costs, etc.) and subsequent environmental
contributions;•improvement in gasoline engine fuel economy and improvement of technology in connection with more
stringent emissions standards;•

promoting improvements in clean diesel engine functioning and fuel economy;•

development of electric vehicles, fuel-electric vehicles and other alternative fuel vehicles; and•development of technology designed to promote driving and vehicle safety.

Toyota’s belief is that the environment is one of the most important issues. Toyota is aiming to lower thevolume of carbon dioxide emissions at all stages of operations, including development, production, logistics,
usage, disposal and recycling of vehicles, as well as the reduction of environmental burdens. Toyota also utilizes
various energy resources as a substitute to oil, and has successfully developed a plug-in hybrid vehicle which canbe charged from domestic power supplies. Toyota is committed to realize the mass production of electricvehicles, the development of next-generation batteries, and the development of alternative fuel vehicles such as
biofuel and fuel-cell vehicles. Toyota aims to maintain its leadership position in environmental technology, andis responding to environmental issues, the representative example being the Prius, the hybrid car introduced to
the Japanese market in 1997.
In May 2010, Toyota invested in Tesla Motors, Inc. (“Tesla”) in the amount of $50 million as part of a basic
agreement with Tesla to implement a joint venture related to the development, technology, and production
systems of electric vehicles and their components. At the 26th International Battery, Hybrid and Fuel Cell
Electric Vehicle Symposium held in May 2012, Toyota announced the jointly developed electric vehicle, theRAV4 EV, which was released in California in summer 2012.
Toyota’s research and development activities focus on the environment, vehicle safety, information
technology and product development.
Toyota’s environmental research and development activities focus on:•

Developing fuel-efficient engines and transmissions. These technologies include improved technologies
in fuel economy, emission, and performance, such as the development of next-generation direct
90

injection system and variable valve system for gasoline engines and the development of thenext-generation ultra high pressure common rail system and the diesel particulate and nitrous oxide
reduction system for diesel engines.
•

Developing alternative fuel powering systems for commercial sale. This includes developing hybrid
vehicles and fuel cell hybrid vehicles. The second-generation Prius that Toyota introduced in September
2003 features a new hybrid system which decreases negative environmental impact while increasing
power and performance. Furthermore, the third-generation Prius was introduced in 2009, and broke therecord for sales by vehicle type which was previously held by the Corolla. The Aqua (called Prius c in
the US), introduced in December 2011 and sold in approximately 50 countries worldwide, is a world
leader in fuel economy and low pricing. In addition, Toyota’s cumulative sales of hybrid vehicles has
exceeded 5 million units, which contributed approximately 34 million ton reduction in CO2 emissions.
In July 2007, Toyota developed the Plug-in Hybrid Vehicle (“PHV”) and received certification fromJapan’s Ministry of Land, Infrastructure, Transport and Tourism (“MLIT”). PHV runs as an Electric
Vehicle (“EV”) in short distances and runs as a regular hybrid vehicle in long distances. Tests are
conducted in Japan, North America and Europe and in late 2009, Toyota commenced its sale of
PHV with lithium ion batteries to fleet vehicle users in Japan, North America and Europe. Toyota alsocommenced its sale of PHV models in January 2012, which can be charged from domestic power
supplies in Japan, North America and Europe. In addition, in September 2008, Toyota started leasing the
new Toyota Fuel Cell Hybrid Vehicle — advanced (the “new Toyota FCHV-adv”). The new Toyota
FCHV-adv has completely overhauled its fuel cell system and has made significant improvements tolow-temperature startup performance and cruising distance, which had posed challenges to promoting its
widespread use. Toyota believes that fuel cell vehicles will be strong eco-cars for future generations. By
2015, Toyota plans to introduce sedan-type fuel cell vehicles at reasonable prices for customers inJapan, the United States and Europe where appropriate infrastructure is expected to be available. To
control increases in oil prices and reduce the consumption of oil, the proliferation of fuel alternatives tooil such as biofuel and natural gas is expanding in some countries. Toyota works towards the ongoing
formation of a mobility society through the introduction to the market of low-ethanol content vehicles(“E10”), natural gas vehicles and high-concentration flex-fuel vehicles (“FFV”) that are compatible withethanol fuel, as well as through research and development into other practical uses of oil alternatives andbiofuels, such as research into fuels that will not compete with food production, and into geneticallymodified organism (“GMO”) technology in order to process sugarcane more efficiently.

•

Engaging in recycling activities that take into account the lifecycle (development, manufacture, use,
disposal) of a vehicle. Research and development focuses primarily on (1) developing materials that aresuitable for recycling and designs that facilitate dismantling parts, and (2) research on effective
dismantling technology of end-of-life vehicles and use of recycle materials.

Toyota’s work in the area of vehicle safety is focused on the development of technologies designed toprevent accidents in the first instance, as well as the development of technologies that protect passengers andreduce the damage on impact in the event of an accident. Safety technologies in development include:•

research on protecting diverse passengers, including senior citizens,•

autonomous driving support systems, including pre-collision system, and•data exchange driving-support systems using advanced communication technologies.

To expand the frontiers of safety technology in automobiles, Toyota completed in 1995 its first prototype
Advanced Safety Vehicle, the ASV-1. The ASV-2, which was introduced in 2000, incorporates emerging
technologies, such as an autonomous safety support system that uses CCD stereo cameras to recognize obstaclesin traffic lanes and an infrastructure-harmonized safety support system to warn the driver of pedestrian crossings.
In 2002, Toyota conducted road testing of the ASV-3, a prototype based on further improved infrastructureharmonized system. With the February 2003 introduction of the Harrier in Japan, Toyota became the first car
manufacturer to implement a pre-collision system in its automobiles. This advanced system utilizes pre-collision91

sensors that use millimeter wave radar and cameras to detect objects presenting hazards, and in addition toalerting the driver to the danger of potential collisions, this system employs a brake assist mechanism that utilizes
power-assisted braking to minimize the speed on impact, and automatically applies the vehicle’s brakes when acollision is determined to be inevitable. In February 2004, Toyota introduced the pre-collision system for the firsttime in the United States by equipping the LS430 with the above features.
In September 2006, at the time of introduction of LS460 in Japan, Toyota established the world’s firstenhanced pre-collision system, which added functions to detect pedestrians in front, to support driver steering,and to react to vehicle collision.
In February 2008, Toyota developed the world’s first driver monitoring pre-collision system for the Crown
sold in Japan, that monitors whether the driver’s eyes are open, in addition to the face monitor which monitors
the direction in which the driver is facing.
In addition, in 2011, Toyota established the Collaborative Safety Research Center aimed at reducing thenumber of traffic accident related deaths through cooperation with various hospitals and universities in North
America. Toyota is greatly fortifying its efforts toward product safety and quality, and this research center is partof these efforts. Established within the same research center is the Toyota Technical Center (“TTC”), which is
the research and development center of Toyota Motor Engineering & Manufacturing North America, Inc. At the
TTC, Toyota’s technicians based in Japan also take part in planning, and perform research focused on reducing
the risk of distracted or impaired driving behaviors, as well as the protection of vulnerable demographics such as
young children and the elderly. Toyota is also promoting the spread of safe vehicle technologies, and is
implementing analyses of traffic accident and driver behavior data. Toyota is planning to invest in the amount of
50 million dollars over the next 5 years, starting from 2011.
In order to promote further streamlining of the global external decision-making process with respect to thedevelopment of vehicle safety technologies, Toyota appointed a Chief Safety Technology Officer (“CSTO”) in
2011, who will execute a general integration of safety technology within Toyota’s technology department.
Toyota’s product development program uses a series of methods which are generally intended to promote
timely and appropriate responses to changing market demand. These methods include:•

optimizing and eliminating vehicle platforms,•

sharing parts and components among multiple vehicles,•

shortening the time for development and production preparation by the simultaneous study of design
and production engineering processes, and•using simulation technology for production design and evaluation.

Toyota carefully analyzes patents and the need for patents in each area of research to formulate more
effective research and development strategies. Toyota identifies research and development projects in which it
should acquire patents, and files relevant applications as necessary to help build a strong global patent portfolio.
In addition, Toyota wishes to contribute to sustainable mobility by promoting the spread of technologies
with environmental and safety benefits. This is why Toyota takes an open stance to patent licensing, and grants
licenses when appropriate terms are met. For example, in March 2004, Toyota and Ford Motor Company enteredinto licensing agreements for patents related to hybrid systems and emissions purification. In addition, in
March 2010, Toyota and Mazda Motor Corporation entered into a licensing agreement regarding the supply of
hybrid system technology.
Toyota does not consider any one group of patents or licenses to be so important that their expiration or
termination would materially affect Toyota’s business. For a further discussion of Toyota’s intellectual property,
see “Information on the Company — Business Overview — Intellectual Property”.
92

5.D TREND INFORMATION
For a discussion of the trends that affect Toyota’s business and operating results, see “— Operating Results”
and “— Liquidity and Capital Resources”.
5.E OFF-BALANCE SHEET ARRANGEMENTS
Toyota uses its securitization program as part of its funding through special purpose entities for its financial
services operations. Toyota is considered the primary beneficiary of these special purpose entities and therefore
consolidates them. Toyota has not entered into any off-balance sheet securitization transactions during fiscal
2014.
Lending Commitments
Credit Facilities with Credit Card Holders
Toyota’s financial services operations issue credit cards to customers. As customary for credit cardbusinesses, Toyota maintains credit facilities with holders of credit cards issued by Toyota. These facilities areused upon each holder’s requests up to the limits established on an individual holder’s basis. Although loans
made to customers through these facilities are not secured, for the purposes of minimizing credit risks and of
appropriately establishing credit limits for each individual credit card holder, Toyota employs its own risk
management policy which includes an analysis of information provided by financial institutions in alliance with
Toyota. Toyota periodically reviews and revises, as appropriate, these credit limits. Outstanding credit facilities
with credit card holders were ¥234.2 billion as of March 31, 2014.
Credit Facilities with Dealers
Toyota’s financial services operations maintain credit facilities with dealers. These credit facilities may be
used for business acquisitions, facilities refurbishment, real estate purchases, and working capital requirements.
These loans are typically collateralized with liens on real estate, vehicle inventory, and/or other dealership assets,
as appropriate. Toyota obtains a personal guarantee from the dealer or corporate guarantee from the dealershipwhen deemed prudent. Although the loans are typically collateralized or guaranteed, the value of the underlying
collateral or guarantees may not be sufficient to cover Toyota’s exposure under such agreements. Toyota prices
the credit facilities according to the risks assumed in entering into the credit facility. Toyota’s financial services
operations also provide financing to various multi-franchise dealer organizations, referred to as dealer groups,
often as part of a lending consortium, for wholesale inventory financing, business acquisitions, facilities
refurbishment, real estate purchases, and working capital requirements. Toyota’s outstanding credit facilities withdealers totaled ¥2,014.4 billion as of March 31, 2014.
Guarantees
Toyota enters into certain guarantee contracts with its dealers to guarantee customers’ payments of theirinstallment payables that arise from installment contracts between customers and Toyota dealers, as and whenrequested by Toyota dealers. Guarantee periods are set to match the maturity of installment payments, and as ofMarch 31, 2014, ranged from one month to 35 years. However, they are generally shorter than the useful lives of
products sold. Toyota is required to execute its guarantee primarily when customers are unable to make required
payments.
The maximum potential amount of future payments as of March 31, 2014 is ¥2,097.1 billion. Liabilities forthese guarantees of ¥6.4 billion have been provided as of March 31, 2014. Under these guarantee contracts,
Toyota is entitled to recover any amounts paid by it from the customers whose obligations it guaranteed.

93

5.F TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONSContractual Obligations and Commitments
For information regarding debt obligations, capital lease obligations, operating lease obligations and otherobligations, including amounts maturing in each of the next five years, see notes 12, 22 and 23 to theconsolidated financial statements. In addition, as part of Toyota’s normal business practices, Toyota enters into
long-term arrangements with suppliers for purchases of certain raw materials, components and services. Thesearrangements may contain fixed/minimum quantity purchase requirements. Toyota enters into such arrangements
to facilitate an adequate supply of these materials and services.
The following tables summarize Toyota’s contractual obligations and commercial commitments as ofMarch 31, 2014.
Yen in millions
Payments Due by PeriodLess than
1 to
3 to
1 year
3 years
5 years

5 years
and after

1,165,580
3,665,240
11,474,777

1,165,580
3,665,240
2,945,481——
4,360,877——
3,230,616——
937,803825,909
21,796

255,946
4,182

327,783
5,111

136,253
3,082

105,927
9,421

62,571

12,25818,84012,067

19,406

79,29452,75910,392

6,708

9,435

17,295,167

8,101,446

4,723,003

3,388,726

1,081,992

Total

Contractual Obligations:Short-term borrowings (note 12)
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial paper . . . . . . . . . . . . . . . . .
Long-term debt* (note 12) . . . . . . . . . . . . . .
Estimated amount of interest expense on
long-term debt . . . . . . . . . . . . . . . . . . . . . .
Capital lease obligations (note 12) . . . . . . . .
Non-cancelable operating lease obligations(note 22) . . . . . . . . . . . . . . . . . . . . . . . . . .
Commitments for the purchase of property,
plant and other assets (note 23) . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . .

* “Long-term debt” represents future principal payments.
Toyota is unable to make reasonable estimates of the period of cash settlement with respect to liabilities
recognized for uncertain tax benefits, and accordingly such liabilities are excluded from the table above. Seenote 15 to the consolidated financial statements for further discussion.
Toyota expects to contribute ¥55,057 million domestically and ¥13,118 million overseas to its pension plansin fiscal 2015.

Total
Amounts
Committed

Yen in millions
Amount of Commitment Expiration Per PeriodLess than
1 to
3 to
5 years
1 year
3 years
5 years
and after

Commercial Commitments (note 23):
Maximum potential exposure to guarantees given in
the ordinary course of business . . . . . . . . . . . . . . . .

2,097,151

532,294

873,756

451,496239,605

Total Commercial Commitments . . . . . . . . . . . .

2,097,151

532,294

873,756

451,496239,605

94

5.G SAFE HARBOR
All information that is not historical in nature disclosed under “— Off-Balance Sheet Arrangements” and“— Tabular Disclosure of Contractual Obligations” is deemed to be a forward-looking statement. See“Cautionary Statement Concerning Forward-Looking Statements” for additional information.
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
6.A DIRECTORS AND SENIOR MANAGEMENTIn March 2011, Toyota unveiled its “Toyota Global Vision”. In order to realize the Global Vision, Toyota
implemented a new management organization highlighted by a more streamlined board of directors and areduced number of layers in the executive decision-making structure.
In April 2013, Toyota implemented organizational changes in order to further increase “the speed ofdecision-making” through “clarification of operations and earnings responsibility.” Specifically, Toyota’s
automotive business was split into four business units. These business units are “Lexus International,” which
covers the Lexus business, “Toyota No. 1,” which covers North America, Europe and Japan, “Toyota No. 2,”
which covers China, Asia & Middle East, East Asia & Oceania, Africa and Latin America & Caribbean and“Unit Center,” which covers all unit-related operations. Toyota’s executive vice presidents are assigned to each
operation, and each are responsible for the operations and earnings of the respective business unit. Furthermore,in order to achieve sustainable growth through the continuous development of “even-better cars” that exceed
customer expectations around the world, and to realize the “Toyota Global Vision,” the “TNGA Planning
Division,” an organization directly under Toyota’s top management, was established in order to rapidly promote
the implementation of the TNGA.
Toyota believes it is crucial for it to be led by directors and senior management who deeply understand, andcan effectively implement, Toyota’s strengths — the monozukuri spirit of conscientious manufacturing and thegenchi genbutsu principle of placing emphasis on on-site operations with a go-and-see attitude for continued
improvement and problem solving. At the 109th Ordinary General Shareholders’ Meeting held in June 2013,
three outside directors were appointed in order to further reflect the opinions of those from outside the company
in management’s decision-making process. Toyota has six audit & supervisory board members, three of whom
are outside audit & supervisory board members. At the 110th Ordinary General Shareholders’ Meeting held in
June 2014, in order to be prepared in the event Toyota lacks the number of audit & supervisory board members
required by law, one substitute audit & supervisory board member was appointed pursuant to Article 329,
Paragraph 2 of the Companies Act.

95

Set forth below are Toyota’s directors and audit & supervisory board members.
Name(Date of birth)

Position

Brief career summary and important concurrent duties

Takeshi Uchiyamada Chairman of the Board 1969 Joined Toyota Motor Corporation (“TMC”)(August 17, 1946)
1998 Director of TMC
2001 Managing Director of TMC
2003 Senior Managing Director of TMC
2005 Executive Vice President of TMC
2012 Vice Chairman of TMC
2013 Chairman of TMC
Akio Toyoda(May 3, 1956)

President,
Member of the Board

1984 Joined TMC
2000 Director of TMC
2002 Managing Director of TMC
2003 Senior Managing Director of TMC
2005 Executive Vice President of TMC
2009 President of TMC

Number of
Shares43,7394,588,975(important concurrent duties)
Corporate Auditor of Toyota Boshoku Corporation
Chairman and CEO of Toyota Motor North
America, Inc.
Chairman of Toyota Motor Sales & Marketing
Corporation
Satoshi Ozawa(August 5, 1949)

Executive Vice
President,
Member of the Board

1974 Joined Toyota Motor Sales Co., Ltd.
2003 Managing Officer of TMC
2007 Senior Managing Director of TMC
2010 Executive Vice President of TMC

41,300(important concurrent duties)
Chairman of Toyota Motor Europe NV/SA
Chairman of Toyota Motor Engineering &Manufacturing North America, Inc.
Vice Chairman of Toyota Motor North America,
Inc.
Corporate Auditor of Toyota Industries Corporation
Nobuyori Kodaira(March 18, 1949)

Executive Vice
President,
Member of the Board

1972 Joined Ministry of International Trade andIndustry
2004 Director-General, Agency for Natural
Resources and Energy
2006 Retired from Director-General, Agency for
Natural Resources and Energy
2008 Advisor of TMC
2009 Managing Officer of TMC
2010 Senior Managing Director of TMC
2011 Director and Senior Managing Officer of
TMC
2012 Executive Vice President of TMC(important concurrent duties)
Director of KDDI CORPORATION

96

17,200Name(Date of birth)

Mitsuhisa Kato
(March 2, 1953)

Position

Brief career summary and important concurrent duties

Executive Vice
President,
Member of the Board

1975 Joined TMC
2004 Managing Officer of TMC
2006 Toyota Technocraft Co., Ltd. President
2006 Advisor of TMC
2007 Retired from Advisor of TMC
2010 Retired from Toyota Technocraft Co., Ltd.
President
2010 Senior Managing Director of TMC
2011 Senior Managing Officer of TMC
2012 Executive Vice President of TMC

Number of
Shares

10,050(important concurrent duties)
Chairman of Toyota Motor Engineering &Manufacturing (China) Co., Ltd.
Director of Toyota Boshoku Corporation
Masamoto Maekawa(October 17, 1949)

Executive Vice
President,
Member of the Board

1973 Joined Toyota Motor Sales Co., Ltd.
2003 Managing Officer of TMC
2007 Toyota Administa Corporation President
2007 Advisor of TMC
2009 Retired from Toyota Administa Corporation
President
2009 Senior Managing Director of TMC
2011 Senior Managing Officer of TMC
2012 Executive Vice President of TMC

27,700(important concurrent duties)
President and Representative Director of Toyota
Marketing Japan Corporation
Yasumori Ihara
Executive Vice
(November 17, 1951)
President,
Member of the Board

1975 Joined TMC
2004 Managing Officer of TMC
2007 Toyota Transportation Co., Ltd. President
2007 Advisor of TMC
2008 Retired from Advisor of TMC
2009 Retired from Toyota Transportation Co., Ltd.
President
2009 Senior Managing Director of TMC
2011 Director and Senior Managing Officer of TMC
2013 Executive Vice President of TMC(important concurrent duties)
Executive Vice Chairman of FAW Toyota Research& Development Co., Ltd.
Chairman of Toyota Motor Technical Center(China) Co., Ltd.
Chairman of Toyota Motor Asia Pacific Pte Ltd.
Chairman of Toyota Motor Asia Pacific Engineeringand Manufacturing Co., Ltd

97

13,700Name(Date of birth)

Seiichi Sudo
(April 21, 1951)

Position

Brief career summary and important concurrent duties

Executive Vice
President,
Member of the Board

1974 Joined TMC
2003 Managing Officer of TMC
2005 President of Toyota Motor Manufacturing
North America, Inc.
2006 Toyota Motor Manufacturing North America,
Inc. and Toyota Technical Center U.S.A., Inc.
merged and became Toyota Motor Engineering &Manufacturing North America, Inc.
2006 President of Toyota Motor Engineering &Manufacturing North America, Inc.
2008 President of Toyota Motor Kyushu, Inc.
2008 Advisor of TMC
2008 Retired from Toyota Motor Engineering &Manufacturing North America, Inc. President
2010 Retired from Advisor of TMC
2012 Retired from Toyota Motor Kyushu, Inc.
President
2012 Senior Managing Officer of TMC
2013 Executive Vice President of TMC

Number of
Shares12,300(important concurrent duties)
Chairman of Toyota Motor (Changshu) Auto Parts
Co., Ltd.
Koei Saga(February 1, 1951)

Member of the Board

1977 Joined TMC
2008 Managing Officer of TMC
2012 Senior Managing Officer of TMC
2013 Director and Senior Managing Officer of TMC

10,100(important concurrent duties)
Corporate Auditor of JTEKT Corporation
Tokuo Fukuichi(October 15, 1951)

Member of the Board

1974 Joined TMC
2011 Managing Officer of TMC
2013 Senior Managing Officer of TMC
2014 Director and Senior Managing Officer of TMC(important concurrent duties)
Vice President of Calty Design Research Inc.

98

2,450

Name
(Date of birth)

Number of
SharesPosition

Brief career summary and important concurrent duties

Shigeki Terashi(February 16, 1955)

Member of the Board

1980 Joined TMC
2008 Managing Officer of TMC
2008 Executive Vice President of Toyota Motor
Engineering & Manufacturing North America,Inc.
2011 President and COO of Toyota Motor
Engineering & Manufacturing North America,Inc.
2012 President and CEO of Toyota Motor
Engineering & Manufacturing North America,Inc.
2012 President and COO of Toyota Motor North
America, Inc.
2013 Retired from Toyota Motor Engineering &Manufacturing North America, Inc. President andCEO2013 Retired from Toyota Motor North America,
Inc. President and COO
2013 Senior Managing Officer of TMC
2013 Director and Senior Managing Officer of TMC

11,100

Yoshimasa Ishii(April 22, 1953)

Member of the Board

1976 Joined Toyota Motor Sales Co., Ltd.
2005 Managing Officer of TMC
2009 Senior Managing Director of TMC
2011 Senior Managing Officer of TMC
2013 Advisor of TMC
2013 President of Toyota Financial Services
Corporation2013 Director of TMC

15,000(important concurrent duties)
President of Toyota Financial Services Corporation
Chairman and CEO of Toyota Financial Service
America
Chairman of Toyota Motor Leasing (China) Co.,
Ltd.

99

Name
(Date of birth)Ikuo Uno(January 4, 1935)

Position

Brief career summary and important concurrent duties

Member of the Board

1959 Joined Nippon Life Insurance Company
1986 Director of Nippon Life Insurance Company
1988 Managing Director of Nippon Life Insurance
Company
1992 Senior Managing Director of Nippon Life
Insurance Company
1994 Vice President and Representative Director of
Nippon Life Insurance Company
1997 President and Representative Director of
Nippon Life Insurance Company
2005 Chairman and Representative Director of
Nippon Life Insurance Company
2011 Advisor and Director of Nippon Life Insurance
Company
2011 Advisor of Nippon Life Insurance Company
2013 Director of TMC

Number of
Shares—(important concurrent duties)
Advisor of Nippon Life Insurance Company
Outside Director of Fuji Kyuko Co., Ltd.
Outside Corporate Auditor of Odakyu Electric
Railway Co., Ltd.
Outside Corporate Auditor of Tohoku ElectricPower Co., Inc.
Outside Corporate Auditor of West Japan Railway
Company
Outside Director of Panasonic Corporation
Outside Corporate Auditor of Sumitomo Mitsui
Financial Group, Inc.
Haruhiko Kato
(July 21, 1952)

Member of the Board

1975 Joined Ministry of Finance (Japan)
2007 Director of Taxation Bureau, Ministry of
Finance (Japan)
2009 Director-General of National Tax
Administration Agency
2010 Retired from National Tax Administration
Agency Director-General2011 Senior Managing Director of Japan Securities
Depository Center, Inc.
2011 President and CEO of Japan Securities
Depository Center, Inc.
2013 Director of TMC(important concurrent duties)
President and CEO of Japan Securities Depository
Center, Inc.
Outside Director of Canon Inc.

100

—

Name
(Date of birth)Mark. T. Hogan(May 15, 1951)

Position

Brief career summary and important concurrent duties

Member of the Board

1973 Joined General Motors Corporation
2002 Vice President of General Motors Group
2004 Retired from General Motors Group Vice
President
2004 President of Magna International Inc.
2007 Retired from Magna International Inc.
President
2008 President and CEO of Vehicle Production
Group LLC
2010 Retired from Vehicle Production Group LLC
President and CEO
2010 President of Dewey Investments LLC
2013 Director of TMC

Number of
Shares—(important concurrent duties)
President of Dewey Investments LLC
1971 Joined Toyota Motor Sales Co., Ltd.
2001 Director of TMC
2003 Managing Officer of TMC
2005 Senior Managing Director of TMC
2009 Executive Vice President of TMC
2011 Audit & Supervisory Board Member of TMC

31,068Masaki Nakatsugawa Full-time Audit &(January 29, 1953)
Supervisory Board
Member1976 Joined Toyota Motor Sales Co., Ltd.
2000 Dispatched to Toyota Motor Thailand Co., Ltd.
2004 General Manager for Accounting Div. of TMC
2006 Audit & Supervisory Board Member of TMC

5,800

Masahiro Kato
Full-time Audit &(September 17, 1952)
Supervisory Board
Member1975 Joined TMC
2009 Toyota Motor (China) Investment Co., Ltd.
President
2009 Managing Officer of TMC
2011 Retired from Toyota Motor (China) Investment
Co., Ltd. President
2011 Audit & Supervisory Board Member of TMC

7,200

Kunihiro Matsuo
Outside Audit &(September 13, 1942)
Supervisory Board
Member2004 Supreme Public Prosecutors Office ProsecutorGeneral
2006 Retired from Supreme Public Prosecutors
Office Prosecutor-General
2006 Registered as Attorney2007 Outside Audit & Supervisory Board Memberof TMC—

Yoichiro Ichimaru(October 10, 1948)

Full-time Audit &Supervisory Board
Member(important concurrent duties)
Outside Corporate Auditor of MITSUI & CO., LTD.
Outside Corporate Auditor of KOMATSU LTD.
Outside Corporate Auditor of BROTHER
INDUSTRIES, LTD.
Outside Director of Japan Exchange Group, Inc.
Outside Corporate Auditor of Seven Bank, Ltd.
Outside Corporate Auditor of TV TOKYO Holdings
Corporation
101

Name
(Date of birth)

Position

Brief career summary and important concurrent duties

Number of
SharesYoko Wake
Outside Audit &(November 18, 1947)
Supervisory Board
Member1970 Joined the Fuji Bank, Limited
1973 Retired from the same1977 Instructor of Faculty of Business andCommerce of Keio University
1982 Associate Professor of the same
1993 Professor of the same2011 Outside Audit & Supervisory Board Memberof TMC2013 Professor Emeritus of Faculty of Business andCommerce of Keio University—

Teisuke Kitayama(October 26, 1946)

1969 Joined Mitsui Bank
1997 Director of The Sakura Bank, Limited
1999 Executive Officer of the same
2000 Managing Executive Officer of the same
2000 Managing Director and Managing Executive
Officer of the same2001 Managing Director and Managing Executive
Officer of Sumitomo Mitsui Banking Corporation
2003 Senior Managing Director and Senior
Executive Officer of the same
2003 Senior Executive Officer of Sumitomo Mitsui
Financial Group, Inc.
2004 Vice President and Executive Officer of thesame2004 Retired from Director of Sumitomo Mitsui
Banking Corporation
2004 Vice President and Director of Sumitomo
Mitsui Financial Group, Inc.
2005 President and Director of the same2005 Chairman and Director of Sumitomo Mitsui
Banking Corporation2011 Retired from Director of Sumitomo Mitsui
Financial Group, Inc.
2014 Outside Audit & Supervisory Board Memberof TMC—

Outside Audit &Supervisory Board
Member(important concurrent duties)
Chairman of the Board of Sumitomo Mitsui Banking
Corporation
Outside Director of FUJIFILM Holdings
Corporation
Outside Auditor of Isetan Mitsukoshi Holdings Ltd.
None of the persons listed above was selected as director, audit & supervisory board member or member ofsenior management pursuant to an arrangement or understanding with Toyota’s major shareholders, customers,
suppliers or others.

102Set forth below is Toyota’s substitute audit & supervisory board member.
Name(Date of birth)

Ryuji Sakai(August 7, 1957)

Position

Brief career summary and important concurrent duties—

1985 Registered as attorney and joined Nagashima &Ohno
1990 Wilson Sonsini Goodrich & Rosati
1995 Partner of Nagashima & Ohno
2000 Partner of Nagashima Ohno & Tsunematsu

Number of
Shares—(important concurrent duties)
Attorney
Outside Audit & Supervisory Board Member of
Kobayashi Pharmaceutical Co., Ltd.
Outside Audit & Supervisory Board Member of Tokyo
Electron Limited
6.B COMPENSATION
The aggregate amount of remuneration, including bonuses but excluding stock options, accrued for all
directors and audit & supervisory board members as a group by Toyota for services in all capacities during fiscal
2014 was approximately ¥1,828 million. Directors and audit & supervisory board members of Toyota Motor
Corporation receive year-end bonuses, the aggregate amount of which is approved at Toyota Motor
Corporation’s ordinary general shareholders’ meeting and is based on Toyota Motor Corporation’s financial
performance for the fiscal year. The amounts of the bonuses paid to individual directors and audit & supervisoryboard members are then determined based upon discussions at a meeting of Toyota Motor Corporation’s board of
directors and the meeting of audit & supervisory board members.
In addition to the above form of compensation, Toyota has enacted stock option plans every year from 2006
until 2010. Under the 2006 plan, Toyota issued to its directors and audit & supervisory board members stockacquisition rights to purchase 302,000 shares of common stock at an exercise price of ¥6,140 and with an
expiration date of July 31, 2014. Under the 2007 plan, Toyota issued to its directors and audit & supervisoryboard members stock acquisition rights to purchase 322,000 shares of common stock at an exercise price of¥7,278 and with an expiration date of July 31, 2015. Under the 2008 plan, Toyota issued to its directors andaudit & supervisory board members stock acquisition rights to purchase 335,000 shares of common stock at an
exercise price of ¥4,726 and with an expiration date of July 31, 2016. Under the 2009 plan, Toyota issued to its
directors and audit & supervisory board members stock acquisition rights to purchase 440,000 shares of common
stock at an exercise price of ¥4,193 and with an expiration date of July 31, 2017. Under the 2010 plan, Toyota
issued to its directors stock acquisition rights to purchase 400,000 shares of common stock at an exercise price of¥3,183 and with an expiration date of July 31, 2018. See “Share Ownership — Stock Options” for a moredetailed discussion of Toyota’s stock option plans.
Toyota’s Annual Securities Report filed with the Kanto Local Bureau of Finance on June 24, 2014,
contained the following information concerning compensation in fiscal 2014 on a consolidated basis for directors
and audit & supervisory board members whose total compensation exceeded ¥100 million during such period:- Takeshi Uchiyamada, Director: ¥165 million (¥98 million in base compensation and ¥67 million in bonus)- Akio Toyoda, Director: ¥230 million (¥102 million in base compensation and ¥127 million in bonus)- Satoshi Ozawa, Director: ¥113 million (¥64 million in base compensation and ¥49 million in bonus)- Nobuyori Kodaira, Director: ¥110 million (¥64 million in base compensation and ¥46 million in bonus)103

- Mitsuhisa Kato, Director: ¥110 million (¥64 million in base compensation and ¥46 million in bonus)- Masamoto Maekawa, Director: ¥110 million (¥64 million in base compensation and ¥46 million in bonus)- Yasumori Ihara, Director: ¥106 million (¥60 million in base compensation and ¥46 million in bonus)
The amounts above were recorded as expenses in fiscal 2014.
6.C BOARD PRACTICES
Toyota’s articles of incorporation provide for a board of directors of not more than 20 members and for not
more than seven audit & supervisory board members. Shareholders elect the directors and audit & supervisoryboard members at the general shareholders’ meeting. The normal term of office of a director is one year and of
an audit & supervisory board member is four years. Directors and audit & supervisory board members may serve
any number of consecutive terms.
The board of directors may appoint one Chairman of the Board and one President, as well as one or more
Vice Chairmen of the Board and Executive Vice Presidents. The board of directors elects, pursuant to its
resolutions, one or more Representative Directors. Each Representative Director represents Toyota generally inthe conduct of its affairs. The board of directors has the ultimate responsibility for the administration of Toyota’s
affairs. None of Toyota’s directors is party to a service contract with Toyota or any of its subsidiaries thatprovides for benefits upon termination of employment.
Under the Companies Act and Toyota’s articles of incorporation, Toyota may, by a resolution of its board of
directors, exempt Directors (including former Directors) from their liabilities to Toyota arising in connection
with their failure to execute their duties within the limits stipulated by laws and regulations. In addition, Toyota
may enter into a liability limitation agreement with each outside director which limits the maximum amount of
their liabilities owed to Toyota arising in connection with their failure to execute their duties to an amount equal
to the minimum liability limit amount prescribed in the laws and regulations.
Under the Companies Act, Toyota must have at least three audit & supervisory board members. At least halfof the audit & supervisory board members are required to be persons who have not been a Director, accounting
counselor (or if an accounting counselor is a judicial person, a member of such judicial person who is in chargeof its affairs), executive officer, general manager or employee of Toyota or any of its subsidiaries at any time
during the past. The audit & supervisory board members may not at the same time be directors, accounting
counselor (in case that an accounting counselor is a judicial person, a member of such judicial person who is incharge of its affairs), executive officers, general managers or employees of Toyota or any of its subsidiaries.
Together, these audit & supervisory board members form an audit & supervisory board. The audit & supervisoryboard members have the duty to examine the financial statements and business reports which are submitted by
the board of directors to the general shareholders’ meeting. The audit & supervisory board members also monitor
the administration of Toyota’s affairs by the directors. Audit & supervisory board members are not required tobe, and Toyota’s audit & supervisory board members are not, certified public accountants. They are required toparticipate in meetings of the board of directors but are not entitled to vote.
Under the Companies Act and Toyota’s articles of incorporation, Toyota may, by a resolution of its board of
directors, exempt audit & supervisory board members (including former audit & supervisory board members)from their liabilities to Toyota arising in connection with their failure to execute their duties within the limits
stipulated by laws and regulations. In addition, Toyota may enter into a liability limitation agreement with eachoutside audit & supervisory board member which limits the maximum amount of their liabilities owed to Toyota
arising in connection with their failure to execute their duties to an amount equal to the minimum liability limit
amount prescribed in the laws and regulations.

104Toyota does not have a remuneration committee.
6.D EMPLOYEESThe total number of Toyota employees, on a consolidated basis, was 338,875 as of March 31, 2014,
333,498 as of March 31, 2013 and 325,905 as of March 31, 2012. The following tables set forth a breakdown of
persons employed by business segment and by geographic location as of March 31, 2014.
Segment

Automotive . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial services . . . . . . . . . . . . . . . . . . . . .
All other . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unallocated . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Number of
Employees

Location

297,680 Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9,285 North America . . . . . . . . . . . . . . . . . . . . . .
27,228 Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,682 Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . .
338,875 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Number of
Employees

196,90241,82919,22956,732
24,183338,875* “Other” consists of Central and South America,
Oceania, Africa and the Middle East.
Most regular employees of Toyota Motor Corporation and its consolidated subsidiaries in Japan, other thanmanagement, are required to become members of the labor unions that comprise the Federation of All Toyota
Workers’ Unions. Approximately 86% of Toyota Motor Corporation’s regular employees in Japan are membersof this union.
In Japan, basic wages and other working conditions are negotiated annually. In addition, in accordance withJapanese national custom, each employee is also paid a semi-annual bonus. Bonuses are negotiated at the time ofwage negotiations and are based on Toyota’s financial results, prospects and other factors. The average wage
increases per employee, excluding bonuses, in Japan have been approximately 2.2% per year for the past fivefiscal years.
In general, Toyota considers its labor relations with all of its workers to be good. However, Toyota iscurrently a party to, and otherwise from time to time experiences, labor disputes in some of the countries inwhich it operates. Toyota does not expect any disputes to which it is currently a party to materially affectToyota’s consolidated financial position.
Toyota’s average number of temporary employees on a consolidated basis was 85,778 during fiscal 2014.
6.E SHARE OWNERSHIP
For information on the number of shares of Toyota’s common stock held by each director and audit &supervisory board member as of June 2014, see “— Directors and Senior Management”. Each such director andaudit & supervisory board member owns less than one percent of the issued and outstanding shares of common
stock of Toyota. The shares held by each director and audit & supervisory board member do not include options
that are exercisable for shares of Toyota’s common stock. For a description of these options, see “— Stock
Options” below.
None of Toyota’s shares of common stock entitles the holder to any preferential voting rights.
Stock Options
Toyota enacted stock option plans every year from 2006 until 2010. Toyota will not enact any such plan
after 2011. The plans for which stock options or stock acquisition rights are currently exercisable or will become105exercisable in the future were approved by Toyota’s shareholders in June of 2006, 2007, 2008, 2009 and 2010.
Under the 2006 plan, Toyota issued stock acquisition rights to purchase 3,176,000 shares of common stock to its
directors and 580 officers and employees, including directors, officers and employees of its subsidiaries and one
Toyota affiliated company. Under the 2007 plan, Toyota issued stock acquisition rights to purchase 3,264,000
shares of common stock to its directors and 579 officers and employees, including directors, officers andemployees of its subsidiaries and one Toyota affiliated company. Under the 2008 plan, Toyota issued stockacquisition rights to purchase 3,494,000 shares of common stock to its directors and 597 officers and employees,
including directors, officers and employees of its subsidiaries and one Toyota affiliated company. Under the2009 plan, Toyota issued stock acquisition rights to purchase 3,492,000 shares of common stock to its directors
and 615 officers and employees, including directors, officers and employees of its subsidiaries and one Toyota
affiliated company. Under the 2010 plan, Toyota issued stock acquisition rights to purchase 3,600,000 shares ofcommon stock to its directors and officers and employees, including directors, officers and employees of its
subsidiaries and one Toyota affiliated company.
Pursuant to the provisions of the 2006, 2007, 2008, 2009 and 2010 plans, stock acquisition rights may be
exercised during a six-year period that starts two years from the date of grant. The exercise price of each stockacquisition right is 1.025 times the closing price of Toyota’s common stock on the Tokyo Stock Exchange on thedate of grant. The 2006, 2007, 2008, 2009 and 2010 plans provide that each director will be granted no more than
400 and no less than 300 stock acquisition rights, and each eligible officer or employee will be granted no morethan 200 and no less than 20 stock acquisition rights. For each of the 2006, 2007, 2008, 2009 and 2010 plans,
100 shares will be issued or delivered upon the exercise of each stock acquisition right. The options are granted
as of early August of each year for each plan.
An option holder who retires while one’s options are still exercisable retains the right to exercise one’s
options until the expiration of the exercise period described above. However, an option holder’s right to purchasecommon stock under each plan lapses automatically upon one’s death or upon taking position such as in the
management with a competitor.
The following table summarizes information for options and the incentive plan outstanding and exercisable
at March 31, 2014:

Exercise price range(Yen)

Outstanding
Weightedaverage
Number of
exercisesharesprice(Yen)

3,183 – 5,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,001 – 7,278 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,915,900
2,415,000

4,067
6,794

Weightedaverageremaininglife(Years)3.32
0.91

Exercisable
Weightedaverage
Number of
exercisesharesprice(Yen)

4,915,900
2,415,000

4,067
6,794

Toyota also has an employee stock ownership association in Japan for employees and full time and part timecompany advisors. Members of the employee stock ownership association set aside certain amounts from theirmonthly salary and bonuses to purchase Toyota’s common stock through the employee stock ownershipassociation. As of March 31, 2014, the employee stock ownership association held 14,842,581 shares of Toyota’scommon stock.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
7.A MAJOR SHAREHOLDERS
As of March 31, 2014, 3,447,997,492 shares of Toyota’s common stock were issued, out of which,
278,231,473 shares were treasury stock and 3,169,766,019 shares were outstanding. Beneficial ownership ofToyota’s common stock in the table below was prepared from information known to Toyota or that could beascertained from public filings, including filings made by Toyota’s shareholders regarding their ownership ofToyota’s common stock under the Financial Instruments and Exchange Law of Japan.
106Under the Financial Instruments and Exchange Law, any person who becomes, beneficially and solely or
jointly, a holder, including, but not limited to, a deemed holder who manages shares for another holder pursuant
to a discretionary investment agreement, of more than 5% of the total issued shares of a company listed on a
Japanese stock exchange (including ADSs representing such shares) must file a report concerning theshareholding with the Director of the relevant local finance bureau. A similar report must be filed, with certain
exceptions, if the percentage of shares held by a holder, solely or jointly, of more than 5% of the total issued
shares of a company increases or decreases by 1% or more, or if any change to a material matter set forth in any
previously filed reports occurs.
Based on information known to Toyota or can be ascertained from public filings, the following table sets
forth the beneficial ownership of holders of more than 5% of Toyota’s common stock as of the most recent
practicable date.

Name of Beneficial Owner

Toyota Industries Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Number of
Shares(in thousands)

Percentage ofSharesIssued218,515

6.34

According to The Bank of New York Mellon, depositary for Toyota’s ADSs, as of March 31, 2014,
83,412,971 shares of Toyota’s common stock were held in the form of ADRs and there were239,016 ADR holders of record in the United States. According to Toyota’s register of shareholders, as ofMarch 31, 2014, there were 613,646 holders of common stock of record worldwide. As of March 31, 2014, there
were 521 record holders of Toyota’s common stock with addresses in the United States, whose shareholdings
represented approximately 13.5% of the issued common stock on that date. Because some of these shares were
held by brokers or other nominees, the number of record holders with addresses in the United States might not
fully show the number of beneficial owners in the United States.
None of Toyota’s shares of common stock entitles the holder to any preferential voting rights.
To the extent known to Toyota, Toyota is not owned or controlled, directly or indirectly, by anothercorporation, any foreign government or any natural or legal person.
Toyota knows of no arrangements the operation of which may at a later time result in a change of control.
7.B RELATED PARTY TRANSACTIONSBusiness Relationships
Toyota purchases materials, supplies and services from numerous suppliers throughout the world in theordinary course of business, including Toyota’s affiliated companies accounted for by the equity method andthose firms with which certain members of Toyota’s board of directors are affiliated. Toyota purchased materials,
supplies and services from these affiliated entities in the amount of ¥4,289.5 billion in fiscal 2014. Toyota also
sells its products and services to Toyota’s affiliated companies accounted for by the equity method and firms
with which certain members of Toyota’s board of directors are affiliated. Toyota sold products and services tothese affiliated entities in the amount of ¥1,854.7 billion in fiscal 2014. See note 11 of Toyota’s consolidated
financial statements for additional information regarding Toyota’s investments in and transactions with affiliatedcompanies.
Loans
Toyota regularly has trade accounts and other receivables by, and accounts payable to, Toyota’s affiliatedcompanies accounted for by the equity method and firms with which certain members of Toyota’s board of
directors are affiliated. Toyota had outstanding trade accounts and other receivables by these affiliated entities in
the amount of ¥253.3 billion as of March 31, 2014. Toyota had outstanding trade accounts and other payables tothese affiliated entities in the amount of ¥599.3 billion as of March 31, 2014.
107

Toyota, from time to time, provides short- to medium-term loans to its affiliated companies, as well as loans
under a loan program established by certain subsidiaries to assist their executives and directors with the purchaseof homes. As of March 31, 2014, an aggregate amount of ¥1.4 billion in loans was outstanding to its affiliatedcompanies accounted for by the equity method. As of March 31, 2014, an aggregate amount of ¥29.3 billion inloans was outstanding to those of its affiliated companies not accounted for by the equity method, which are 20%
to 50% owned by Toyota. As of March 31, 2014, the largest loan outstanding to any such affiliated company
accounted for by the equity method was a loan of ¥1.0 billion at a fixed rate of 0.46%. Toyota believes that eachof these loans was entered into in the ordinary course of business.
7.C INTERESTS OF EXPERTS AND COUNSEL
Not applicable.
ITEM 8. FINANCIAL INFORMATION
8.A CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION
1-3. Consolidated Financial Statements. Toyota’s audited consolidated financial statements are included under“Item 18 — Financial Statements”. Except for Toyota’s consolidated financial statements included under
Item 18, no other information in this annual report has been audited by Toyota’s auditors.
4.

Not applicable.

5.

Not applicable.

6.

Export Sales. See “Operating and Financial Review and Prospects — Operating Results — Overview —Geographic Breakdown”.

7.

Legal and Arbitration Proceedings. See “Information on the Company — Business Overview — Legal
Proceedings”.

8.

Dividend Policy. See “Key Information — Selected Financial Data — Dividend Information”.

8.B SIGNIFICANT CHANGES
Except as disclosed in this annual report, there have been no significant changes since the date of Toyota’s
latest annual financial statements.

108

ITEM 9. THE OFFER AND LISTING
9.A LISTING DETAILSThe following table sets forth for the periods shown the reported high and low sales prices of the common
stock on the Tokyo Stock Exchange and the ADSs on the New York Stock Exchange.
Tokyo
Stock Exchange
Price per Share
High
Low

New York
Stock Exchange
Price per ADS
High
Low

Fiscal Year Ended March 31,

2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥4,200
3,955
3,635
5,050
6,800

¥3,270
2,800
2,330
2,795
4,610

$ 91.7893.90
87.15
106.00134.94$ 67.90
67.56
60.37
72.04
99.70

3,640
3,300
4,015
5,050
6,800
6,540
6,430
6,400

2,885
2,795
2,873
4,030
4,610
5,890
6,010
5,415

86.98
83.73
93.36
106.00130.99134.94132.53121.74

73.90
72.04
74.27
93.20
99.70
120.11
118.11106.31

6,430
6,400
6,045
5,955
5,906
5,761

6,040
5,886
5,500
5,415
5,205
5,376

125.55
121.74118.41115.27113.59113.39118.11113.61110.75106.31103.38107.53Financial Quarter Ended:

June 30, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
September 30, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
June 30, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
September 30, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Month Ended:

December 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
January 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
February 28, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
April 30, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
May 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.B PLAN OF DISTRIBUTION
Not applicable.
9.C MARKETSThe primary trading market for Toyota’s common stock is the Tokyo Stock Exchange. The common stock isalso listed on the Nagoya Stock Exchange and two other regional stock exchanges in Japan.
Since September 29, 1999, American Depositary Shares, each equal to two shares of Toyota’s common
stock and evidenced by American Depositary Receipts, have been traded and listed on the New York Stock
Exchange through a sponsored ADR facility operated by The Bank of New York Mellon, as depositary. Prior tothat time, Toyota’s ADSs were listed on the Nasdaq SmallCap Market through five unsponsored ADR facilities.
Toyota’s common stock is also listed on the London Stock Exchange.

109

9.D SELLING SHAREHOLDERS
Not applicable.
9.E DILUTION
Not applicable.
9.F EXPENSES OF THE ISSUE
Not applicable.
ITEM 10. ADDITIONAL INFORMATION
10.A SHARE CAPITAL
Not applicable.
10.B MEMORANDUM AND ARTICLES OF ASSOCIATION
Except as otherwise stated, set forth below is information relating to Toyota’s common stock, including
brief summaries of the relevant provisions of Toyota’s articles of incorporation and share handling regulations, as
currently in effect, and of the Companies Act, Act Concerning Book-Entry Transfer of Corporate Bonds, Sharesand Other Securities (the “Book-Entry Transfer Act”) and related legislation.
GeneralToyota’s authorized number of shares as of March 31, 2014 was 10,000,000,000 shares, of which
3,447,997,492 shares were issued. Toyota does not issue share certificates for its shares. In accordance with theCompanies Act, the Book-Entry Transfer Act and Toyota’s articles of incorporation, Toyota’s shares arerecorded or registered on (i) Toyota’s register of shareholders and (ii) transfer account books of the Japan
Securities Depository Center, Inc. (“JASDEC”) which is a book-entry transfer institution and securities firms,
banks or other account management institutions. The transfer of shares will generally become effective once thetransfer is recorded in the transferee’s account. In order to assert shareholders’ rights against Toyota, ashareholder must generally have his or her name and address recorded or registered on Toyota’s register ofshareholders. A shareholder can assert minority shareholders’ rights (shareholders’ rights for which Toyota has
not set a record date) against Toyota if JASDEC provides an individual shareholder notice to Toyota upon theshareholder’s request. The shareholder of deposited shares underlying the ADSs is the depositary for the ADSs.
Accordingly, holders of ADSs will not be able directly to assert shareholders’ rights.
A shareholder must have a transfer account to transfer shares. Shareholders who do not have a transfer
account with JASDEC must have an account with an account management institution that directly or indirectly
has a transfer account with JASDEC. Once Toyota decides on the record date for its shareholders’ meeting or
makes a request to JASDEC based on justifiable grounds, JASDEC will promptly provide to Toyota names,
addresses and other information with respect to Toyota’s shareholders who are recorded on the transfer accountbooks of JASDEC or account management institutions. Upon receiving such information, Toyota will record or
register such information received from JASDEC on its register of shareholders. Accordingly, holders of shares
recorded or registered on Toyota’s register of shareholders will be treated as shareholders of Toyota and may
exercise rights, such as voting rights, and will receive dividends (if any) and notices to shareholders directly fromToyota. Shareholders wishing to assert minority shareholders’ rights against Toyota must request an individual
shareholder notice to JASDEC or the account management institution at which the shareholder has opened atransfer account. In response to such request, JASDEC will provide the individual shareholders notice to Toyota.
The shareholder may assert his or her minority shareholders’ rights against Toyota for a period of four weeks
after the date the individual shareholder notice is provided to Toyota. The shares held by a person who is deemedto hold additional shares according to the transfer account books are aggregated for these purposes.
110Corporate Purpose
Article 2 of Toyota’s articles of incorporation states that its purpose is to engage in the following
businesses:•

the manufacture, sale, leasing and repair of:•

motor vehicles, industrial vehicles, ships, aircraft, other transportation machinery and apparatus,
spacecraft and space machinery and apparatus, and parts thereof;•

industrial machinery and apparatus, other general machinery and apparatus, and parts thereof;•electrical machinery and apparatus, and parts thereof; and•measuring machinery and apparatus, medical machinery and apparatus, and parts thereof;•

the manufacture and sale of ceramics and products of synthetic resins, and materials thereof;•

the manufacture, sale and repair of construction materials and equipment, furnishings and fixtures forresidential buildings;•

the planning, designing, supervision, execution and undertaking of construction works, civil engineering
works, land development, urban development and regional development;•

the sale, purchase, leasing, brokerage and management of real estate;•

the service of information processing, information communications and information supply and thedevelopment, sale and leasing of software;•

the design and development of product sales systems that utilize networks such as the Internet, sale,leasing and maintenance of computers included within such systems, and sale of products by utilizing
such systems;•

the inland transportation, marine transportation, air transportation, stevedoring, warehousing andtourism businesses;•

the printing, publishing, advertising and publicity, general leasing, security and workers dispatch
businesses;•

the credit card operations, purchase and sale of securities, investment consulting, investment trust
operation, and other financial services;•

the operation and management of such facilities as parking lots, showrooms, educational facilities,
medical care facilities, sports facilities, marinas, airfields, food and drink stands and restaurants, lodging
facilities, retail stores and others;•

the non-life insurance agency business and the life insurance agency business;•the production and processing by using biotechnology of agricultural products including trees, and thesale of such products;•

the sale of goods related to each of the preceding items and mineral oil;•the conducting of engineering, consulting, invention and research relating to each of the preceding items
and the utilization of such invention and research; and•any businesses incidental to or related to any of the preceding items.

Dividends
Dividends — General
Toyota normally pays dividends twice per year, including an interim dividend and a year-end dividend.
Although Toyota’s articles of incorporation provide that retained earnings can be distributed as dividends
111pursuant to the resolution of its board of directors, Toyota’s board of directors recommends the payment of yearend dividends to shareholders and pledgees of record as of March 31 in each year. Year-end dividends areusually paid to the shareholders immediately following approval of the dividends at the general shareholders’meeting, normally around the middle of June of each year. In addition to these year-end dividends, Toyota may
pay interim dividends in the form of cash distributions from its distributable surplus to shareholders and pledgeesof record as of September 30 in each year by resolution of its board of directors. Toyota normally pays theinterim dividend in late November.
In addition, under the Companies Act, dividends may be paid to shareholders and pledgees of record as ofany record date, other than those specified above, as set forth by Toyota’s articles of incorporation or as
determined by its board of directors from time to time. Toyota’s articles of incorporation also permit Toyota to
pay dividends, in addition to interim dividends mentioned in the preceding paragraph, by a resolution of its boardof directors. Toyota has incorporated such a provision into its articles of incorporation in order to enable a
flexible capital policy. Under the Companies Act, dividends may be distributed in cash or (except in the case ofinterim dividends mentioned in the preceding paragraph) in kind, subject to limitations on distributable surplus
and to certain other conditions.
Dividends — Distributable amountUnder the Companies Act, Toyota is permitted to make distributions of surplus to the extent that theaggregate book value of the assets to be distributed to shareholders does not exceed the distributable amountprovided for by the Companies Act and the ordinance of the Ministry of Justice as at the effective date of such
distribution of surplus.
The amount of surplus at any given time shall be the amount of Toyota’s assets and the book value ofToyota’s treasury stock after subtracting and adding the amounts of the items provided for by the Companies Act
and the ordinance of the Ministry of Justice.
Dividends — Prescription
Under its articles of incorporation, Toyota is not obligated to pay any dividends in cash which are left
unclaimed for a period of three years after the date on which they first became payable.
Capital Accounts
The amount of the cash or assets paid or contributed by subscribers for new shares (with certain exceptions)is required to be accounted for as stated capital, although Toyota may account for an amount not exceeding onehalf of such cash or assets as additional paid-in capital.
Under the Companies Act, Toyota may reduce its additional paid-in capital and legal reserve without
limitation on the amount to be reduced, generally, by a resolution of a general shareholders’ meeting and if so
decided by the same resolution, may account for the whole or any part of the amount of the reduction of
additional paid-in capital as stated capital. The whole or any part of surplus which may be distributed as
dividends may also be transferred to stated capital by a resolution of a general shareholders’ meeting.
Stock Splits
Toyota may at any time split the outstanding shares into a greater number of shares by a resolution of theboard of directors. Toyota must give public notice of the stock split, specifying a record date for the stock split,
not less than two weeks prior to the record date.

112

Consolidation of Shares
Toyota may at any time consolidate shares in issue into a smaller number of shares by a special shareholders
resolution (as defined in “Voting Rights”). When a consolidation of shares is to be made, Toyota must give
public notice of certain matters two weeks prior to the effective date of the consolidation. Toyota must disclose
the reason for the consolidation of shares at a general shareholders’ meeting.
Japanese Unit Share System
General. Consistent with the requirements of the Companies Act, Toyota’s articles of incorporation providethat 100 shares constitute one “unit”. Although the number of shares constituting a unit is included in the articles
of incorporation, any amendment to the articles of incorporation reducing (but not increasing) the number ofshares constituting a unit or eliminating the provisions for the unit of shares may be made by a resolution of theboard of directors rather than by a special shareholders resolution, which is otherwise required for amending thearticles of incorporation. The number of shares constituting one unit, however, cannot exceed 1,000 shares.
Voting Rights under the Unit Share System. Under the unit share system, shareholders have one voting
right for each unit of shares that they hold. Any number of shares less than a full unit will carry no voting rights.
Purchase by Toyota of Shares Constituting Less Than a Unit. A holder of shares constituting less than afull unit may require Toyota to purchase those shares at their market value in accordance with the provisions of
Toyota’s share handling regulations.
Surrender of American Depositary Receipts. ADR holders will only be permitted to surrender ADRs andwithdraw underlying shares constituting an integral number of a whole unit. If a holder surrenders an ADR
including ADRs representing shares that do not constitute an integral number of whole units, the depositary will
deliver to that holder only those shares which constitute a whole unit. The depositary will then issue to the holder
a new ADR representing the remaining shares. Holders of an ADR that represents less than a whole unit ofunderlying shares will be unable to withdraw the underlying shares. As a result, those holders will be unable torequire Toyota to purchase their shares to the extent those shares constitute less than one whole unit.
Voting Rights
Toyota holds its ordinary general shareholders’ meeting each year. In addition, Toyota may hold anextraordinary general shareholders’ meeting whenever necessary by giving at least two weeks’ advance notice.
Under the Companies Act, notice of any shareholders’ meeting must be given to each shareholder having voting
rights or, in the case of a non-resident shareholder, to his or her resident proxy or mailing address in Japan inaccordance with Toyota’s share handling regulations, at least two weeks prior to the date of the meeting.
A holder of shares constituting one or more whole units is entitled to one vote per unit of shares subject tothe limitations on voting rights set forth in this paragraph. In general, under the Companies Act, a resolution canbe adopted at a general shareholders’ meeting by a majority of the shares having voting rights represented at themeeting. The Companies Act and Toyota’s articles of incorporation require a quorum for the election of directors
and audit & supervisory board members of not less than one-third of the total number of outstanding shares
having voting rights. Toyota’s shareholders are not entitled to cumulative voting in the election of directors. A
corporate shareholder, the management of which is substantially under Toyota’s control as provided by an
ordinance of the Ministry of Justice, either through the holding of voting rights or for any other reason, does nothave voting rights.
Shareholders may exercise their voting rights by attending the general shareholders’ meeting or in writingby mail. Shareholders who choose to exercise their voting rights by mail must fill out and return to Toyota thevoting right exercise form enclosed with the convocation notice of the general shareholders’ meeting by the datespecified in such convocation notice. In addition, from the general shareholders’ meeting for fiscal 2009,113

shareholders may exercise their voting rights through the internet. Shareholders electing to exercise their voting
rights through the internet must log on to the “Website to Exercise Voting Rights” using the login ID andtemporary password provided in the voting right exercise form enclosed with the convocation notice and submit
their votes by a date specified in the convocation notice, following instructions appearing on the website.
Institutional investors may also use the Electronic Proxy Voting Platform operated by Investor Communications
Japan (“ICJ”) to exercise their voting rights through the use of the Internet, if such institutional investor applies
to use the platform in advance. Shareholders may also exercise their voting rights through proxies, provided thatthose proxies are also shareholders who have voting rights. Toyota may refuse a shareholder having two or more
proxies attend a general shareholders’ meeting.
The Companies Act provides that a quorum of at least one-third of outstanding shares with voting rights
must be present at a shareholders’ meeting to approve any material corporate actions such as:(1) any amendment of the articles of incorporation with certain exceptions in which a shareholders’
resolution is not required;(2) acquisition of its own shares from a specific party;(3) consolidation of shares;(4) any issue or transfer of its shares at a “specially favorable” price (or any issue of stock acquisitionrights or bonds with stock acquisition rights at “specially favorable” conditions by Toyota) to any
persons other than shareholders;(5) the removal of an audit & supervisory board member;(6) the exemption of liability of a director or audit & supervisory board member with certain
exceptions;(7) a reduction of stated capital which meets certain requirements with certain exceptions;(8) a distribution of in-kind dividends which meets certain requirements;(9) dissolution, merger, or consolidation with certain exceptions in which a shareholders’ resolution is
not required;(10) the transfer of the whole or a material part of the business;(11) the taking over of the entire business of any other corporation with certain exceptions in which ashareholders’ resolution is not required;(12) share exchange or share transfer for the purpose of establishing 100% parent-subsidiary
relationships with certain exceptions in which a shareholders’ resolution is not required; or(13) company split with certain exceptions in which a shareholders’ resolution is not required.
At least two-thirds of the shares having voting rights represented at the meeting must approve these actions.
The voting rights of holders of ADSs are exercised by the depositary based on instructions from those
holders.
Rights to be Allotted Shares
Holders of shares have no preemptive rights under Toyota’s articles of incorporation. Under the Companies
Act, the board of directors may, however, determine that shareholders shall be given rights to be allotted sharesor stock acquisition rights on request in connection with a particular issue or transfer of shares, or issue of stockacquisition rights, respectively. In this case, such rights must be given on uniform terms to all shareholders as ofa specified record date by at least two weeks’ prior public notice to shareholders of the record date.
114

Rights to be allotted shares are nontransferable. However, a shareholder may be allotted stock acquisitionrights without consideration thereto, and may transfer such rights.
Liquidation Rights
In the event of a liquidation of Toyota, the assets remaining after payment of all debts, liquidation expenses
and taxes will be distributed among the shareholders in proportion to the respective number of shares they own.
Liability to Further Calls or Assessments
All of Toyota’s currently outstanding shares, including shares represented by the ADSs, are fully paid andnonassessable.
Transfer Agent
Mitsubishi UFJ Trust and Banking Corporation is the transfer agent for the shares. Mitsubishi UFJ Trust andBanking Corporation’s office is located at 4-5, Marunouchi 1-chome, Chiyoda-ku, Tokyo, 100-8212 Japan.
Mitsubishi UFJ Trust and Banking Corporation maintains Toyota’s register of shareholders and records transfersof record ownership upon receiving notification from JASDEC.
Record Date
The close of business on March 31 is the record date for Toyota’s year-end dividends, if paid. A holder ofshares constituting one or more whole units who is recorded or registered as a holder on Toyota’s register at theclose of business as of March 31 is also entitled to exercise shareholders’ voting rights at the ordinary generalshareholders’ meeting with respect to the business year ending on March 31. The close of business on
September 30 of each year is the record date for interim dividends, if paid. In addition, Toyota may set a record
date for determining the shareholders entitled to other rights and for other purposes by giving at least two weeks’prior public notice.
The shares generally trade ex-dividend or ex-rights in the Japanese stock exchanges on the second business
day before a record date (or if the record date is not a business day, the third business day prior thereto), for the
purpose of dividends or rights offerings.
Acquisition by Toyota of Shares
Toyota may acquire its own shares (i) through a stock exchange on which such shares are listed or by wayof tender offer (pursuant to an ordinary resolution of a general shareholders’ meeting or a resolution of the boardof directors), (ii) by purchase from a specific party (pursuant to a special resolution of a general shareholders’meeting) or (iii) from a subsidiary of Toyota (pursuant to a resolution of the board of directors). When suchacquisition is made by Toyota from a specific party other than a subsidiary of Toyota, any other shareholder may
make a demand to a representative director, more than five calendar days prior to the relevant shareholders’meeting, that Toyota also purchase the shares held by such shareholder. However, the acquisition of its own
shares at a price not exceeding the market price to be provided under an ordinance of the Ministry of Justice will
not trigger the right of any shareholder to include him/her as the seller of his/her shares in such proposed
purchase.
Any such acquisition of shares must satisfy certain requirements that the total amount of the acquisition
price may not exceed the amount of the distributable dividends. See “— Dividends”.
Shares acquired by Toyota may be held by it for any period or may be cancelled by resolution of the boardof directors. Toyota may also transfer to any person the shares held by it, subject to a resolution of the board of115

directors, and subject also to other requirements applicable to the issuance of new shares. Toyota may also utilize
its treasury stock for the purpose of transfer to any person upon exercise of stock acquisition rights or for the
purpose of acquiring another company by way of merger, share exchange or corporate split through exchange oftreasury stock for shares or assets of the acquired company.
The Companies Act generally prohibits any subsidiary of Toyota from acquiring shares of Toyota.
Acquisition or Disposition of Shares or ADS
Under the Foreign Exchange and Foreign Trade Law and the cabinet orders and ministerial ordinances
thereunder (collectively, the “Foreign Exchange Regulations”), all aspects of regulations on foreign exchange
and foreign trade transactions are, with minor exceptions (which are not generally applicable to the purchase andsale of Toyota’s shares), only subject to post transaction reporting requirements. Acquisitions and dispositions ofshares of common stock or ADS by non-residents of Japan (including foreign corporations not resident in Japan)
are generally not subject to this reporting requirement. However, the Minister of Finance has the power toimpose a licensing requirement for transactions in limited circumstances.
Report of Substantial Shareholdings
The Financial Instruments and Exchange Law of Japan and regulations under the Law require any person
who has become a holder (together with its related persons) of more than 5% of the total issued shares of acompany listed on any Japanese stock exchange (including ADSs representing such shares) to file with the
Director of a competent Local Finance Bureau, within five business days, a report concerning thoseshareholdings. A similar report must also be filed to reflect any change of 1% or more in any shareholding or any
change in material matters set out in reports previously filed. Any such report shall be filed with the Director of acompetent Local Finance Bureau through the Electronic Disclosure for Investor’s Network (“EDINET”) system.
Copies of any report must also be furnished to the company. For this purpose, shares issuable to a shareholder
upon exercise of stock acquisition rights are taken into account in determining both the number of shares held bythat stock acquisition rights holder and the company’s total issued shares.
10.C MATERIAL CONTRACTS
All contracts concluded by Toyota during the two years preceding this filing were entered into in theordinary course of business.
10.D EXCHANGE CONTROLSThe Foreign Exchange Regulations govern the acquisition and holding of shares of capital stock of Toyota
by “exchange non-residents” and by “foreign investors”. The Foreign Exchange Regulations currently in effectdo not, however, affect transactions between exchange non-residents to purchase or sell shares outside Japan
using currencies other than Japanese yen.
Exchange non-residents are:•individuals who do not reside in Japan; and•corporations whose principal offices are located outside Japan.

Generally, branches and other offices of non-resident corporations that are located within Japan are regarded
as residents of Japan. Conversely, branches and other offices of Japanese corporations located outside Japan are
regarded as exchange non-residents.

116Foreign investors are:•individuals who are exchange non-residents;•

corporations or other organizations that are organized under the laws of foreign countries or whose
principal offices are located outside of Japan; and•corporations (1) of which 50% or more of their voting rights are held directly or indirectly by
individuals who are exchange non-residents and/or corporations or other organizations (a) that areorganized under the laws of foreign countries or (b) whose principal offices are located outside of Japanor (2) a majority of whose officers, or officers having the power of representation, are individuals whoare exchange non-residents.

In general, the acquisition of shares of a Japanese company (such as the shares of capital stock of Toyota)
by an exchange non-resident from a resident of Japan is not subject to any prior filing requirements. In certain
limited circumstances, however, the Minister of Finance may require prior approval of an acquisition of this type.
While prior approval, as described above, is not required, in the case where a resident of Japan transfers shares ofa Japanese company (such as the shares of capital stock of Toyota) for consideration exceeding ¥100 million toan exchange non-resident, the resident of Japan who transfers the shares is required to report the transfer to the
Minister of Finance within 20 days from the date of the transfer or the date of receipt of payment, whichevercomes later, unless the transfer was made through a bank or financial instruments business operator licensed orregistered under Japanese law.
If a foreign investor acquires shares of a Japanese company that is listed on a Japanese stock exchange (suchas the shares of capital stock of Toyota) and, as a result of the acquisition, the foreign investor, in combination
with any existing holdings, directly or indirectly holds 10% or more of the issued shares of the relevant company,
the foreign investor, with certain exceptions, must file a report of the acquisition with the Minister of Finance andany other competent Ministers having jurisdiction over that Japanese company by the 15th day of the monthfollowing the month in which the date of the acquisition falls. In limited circumstances, such as where the foreign
investor is in a country that is not listed on an exemption schedule in the Foreign Exchange Regulations, a priornotification of the acquisition must be filed with the Minister of Finance and any other competent Ministers, who
may then modify or prohibit the proposed acquisition.
Under the Foreign Exchange Regulations, dividends paid on, and the proceeds of sales in Japan of, shares
held by non-residents of Japan may in general be converted into any foreign currency and repatriated abroad.
Under the terms of the deposit agreement pursuant to which Toyota’s ADSs are issued, the Depositary is
required, to the extent that in its judgment it can convert yen on a reasonable basis into dollars and transfer the
resulting dollars to the United States, to convert all cash dividends that it receives in respect of deposited shares
into dollars and to distribute the amount received (after deduction of applicable withholding taxes) to the holders
of ADSs.
10.E TAXATION
The following discussion is a general summary of the principal U.S. federal income and Japanese national
tax consequences of the acquisition, ownership and disposition of shares of common stock or ADSs. Thissummary does not purport to address all material tax consequences that may be relevant to holders of shares ofcommon stock or ADSs, and does not take into account the specific circumstances of any particular investors,some of which (such as tax-exempt entities, banks, insurance companies, broker-dealers, traders in securities thatelect to use a mark-to-market method of accounting for their securities holdings, regulated investmentcompanies, real estate investment trusts, partnerships and other pass-through entities, investors liable for the U.S.
alternative minimum tax, investors that own or are treated as owning 10% or more of Toyota’s voting stock,investors that hold shares of common stock or ADSs as part of a straddle, hedge, conversion transaction or otherintegrated transaction and U.S. Holders (as defined below) whose functional currency is not the U.S. dollar) may
be subject to special tax rules. This summary is based on the tax laws and regulations of the United States and117

Japan, judicial decisions, published rulings and administrative pronouncements all as in effect on the date hereof,
as well as on the current income tax convention between the United States and Japan (the “Treaty”), as described
below, all of which are subject to change (possibly with retroactive effect), and to differing interpretations.
For purposes of this discussion, a “U.S. Holder” is any beneficial owner of shares of common stock or
ADSs that, for U.S. federal income tax purposes, is:1.

an individual who is a citizen or resident of the United States,2.

a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes)
organized in or under the laws of the United States, any state thereof, or the District of Columbia,

3.

an estate the income of which is subject to U.S. federal income tax without regard to its source, or

4.

a trust that is subject to the primary supervision of a U.S. court and the control of one or more
U.S. persons, or that has a valid election in effect under applicable Treasury regulations to betreated as a U.S. person.

An “Eligible U.S. Holder” is a U.S. Holder that:1.

is a resident of the United States for purposes of the Treaty,2.

does not maintain a permanent establishment in Japan (a) with which the shares of common stockor ADSs are effectively connected and through which the U.S. holder carries on or has carried on
business, or (b) of which the shares of common stock or ADSs form part of the business property,
and3.

is eligible for benefits under the Treaty with respect to income and gain derived in connection
with the shares of common stock or ADSs.

This summary does not address any aspects of U.S. federal tax law other than income taxation, and does notdiscuss any aspects of Japanese tax law other than income taxation, as limited to national taxes, inheritance andgift taxation. This summary also does not cover any state or local, or non-U.S., non-Japanese tax considerations.
Investors are urged to consult their tax advisors regarding the U.S. federal, state and local and Japanese and othertax consequences of acquiring, owning and disposing of shares of common stock or ADSs. In particular, where
relevant, investors are urged to confirm their status as Eligible U.S. Holders with their tax advisors and to discusswith their tax advisors any possible consequences of their failure to qualify as Eligible U.S. Holders. In addition,
this summary is based in part upon the representations of the depositary and the assumption that each obligationin the deposit agreement, and in any related agreement, will be performed in accordance with its terms.
In general, for purposes of the Treaty and for U.S. federal income and Japanese income tax purposes,
owners of ADRs evidencing ADSs will be treated as the owners of the shares of common stock represented bythose ADSs, and exchanges of shares of common stock for ADSs, and exchanges of ADSs for shares of common
stock, will not be subject to U.S. federal income or Japanese income tax.
The discussion below is intended for general information only and does not constitute a complete analysisof all tax consequences relating to ownership of shares of common stock or ADSs. Prospective purchasers ofshares of common stock or ADSs should consult their own tax advisors concerning the tax consequences of
their particular situations.
Japanese Taxation
The following is a summary of the principal Japanese tax consequences (limited to national taxes) to nonresidents of Japan or non-Japanese corporations without permanent establishments in Japan (“non-resident
Holders”) who are holders of shares of common stock or of ADSs. The following information regarding taxationin Japan is based on the tax treaties and tax laws in force and their interpretation by Japan’s tax authorities as of118

the date of this annual report. Tax laws and treaties and their interpretations may change (including withretroactive effect). Toyota will not revise this summary on the basis of any such change occurring after the dateof this annual report.
Generally, non-resident Holders are subject to Japanese withholding tax on dividends paid by Japanese
corporations. Stock splits are, in general, not a taxable event.
In the absence of an applicable tax treaty, convention or agreement reducing the maximum rate of Japanese
withholding tax or allowing exemption from Japanese withholding tax, the rate of Japanese withholding tax
applicable to dividends paid by Japanese corporations to non-resident Holders is generally 20.42 percent,provided, with respect to dividends paid on listed shares issued by a Japanese corporation (such as the shares ofcommon stock or ADSs of Toyota) to non-resident Holders, other than any individual shareholder who holds
3 percent or more of the total issued shares issued by the relevant Japanese corporation, the aforementioned
20.42 percent withholding tax rate is reduced to 15.315 percent for dividends due and payable on or before
December 31, 2037. Due to the imposition of a special additional withholding tax (2.1 percent of the original
withholding tax amount) to secure funds for reconstruction from the Great East Japan Earthquake, the original
withholding tax rate of 15 percent and 20 percent, as applicable, is effectively increased to 15.315 percent and20.42 percent, respectively, until December 31, 2037.
At the date of this annual report, Japan has income tax treaties, conventions or agreements whereby theabove-mentioned withholding tax rate is reduced, in most cases to 15 percent or 10 percent for portfolio investors(15 percent under the income tax treaties with, among other countries, Belgium, Canada, Denmark, Finland,
Germany, Ireland, Italy, Luxembourg, New Zealand, Norway, Singapore, Spain and Sweden, and 10 percent
under the income tax treaties with, among other countries, Australia, France, Hong Kong, the Netherlands,
Portugal, Switzerland, the U.K. and the United States.)
Under the Treaty, the maximum rate of Japanese withholding tax which may be imposed on dividends paidby a Japanese corporation to an Eligible U.S. Holder that is a portfolio investor is generally reduced to 10 percentof the gross amount actually distributed, and dividends paid by a Japanese corporation to an Eligible U.S. Holderthat is a pension fund are exempt from Japanese income tax by way of withholding or otherwise unless such
dividends are derived from the carrying on of a business, directly or indirectly, by such pension fund.
If the maximum tax rate provided for in the income tax treaty applicable to dividends paid by Toyota to any
particular non-resident Holder is lower than the withholding tax rate otherwise applicable under Japanese tax law
or if any particular non-resident Holder is exempt from Japanese income tax with respect to such dividends under
the income tax treaty applicable to such particular non-resident Holder, such non-resident Holder who is entitledto a reduced rate of or exemption from Japanese withholding tax on payment of dividends on shares of common
stock by Toyota is required to submit an Application Form for Income Tax Convention Regarding Relief fromJapanese Income Tax and Special Income Tax for Reconstruction on Dividends (together with any other required
forms and documents) in advance through the withholding agent to the relevant tax authority before the payment
of dividends. A standing proxy for non-resident Holders of a Japanese corporation may provide this application
service. In addition, a simplified special filing procedure is available for non-resident Holders to claim treaty
benefits of exemption from or reduction of Japanese withholding tax, with respect to dividends paid on or afterJanuary 1, 2014, by submitting a Special Application Form for Income Tax Convention Regarding Relief fromJapanese Income Tax and Special Income Tax for Reconstruction on Dividends of Listed Stock (together withany other required forms and documents). With respect to ADSs, this reduced rate or exemption is applicable if
the Depositary or its agent submits, together with other documents, two Application Forms (one before payment
of dividends, the other within eight months after the recording date concerning such payment of dividends) to theJapanese tax authority. To claim this reduced rate or exemption, any relevant non-resident Holder of ADSs will
be required to file a proof of taxpayer status, residence and beneficial ownership (as applicable) and to provide
other information or documents as may be required by the Depositary. A non-resident Holder who is entitled,under an applicable income tax treaty, to a reduced treaty rate lower than the withholding tax rate otherwise119

applicable under Japanese tax law or an exemption from the withholding tax, but failed to submit the required
application in advance, will be entitled to claim the refund of withholding taxes withheld in excess of the rate
under an applicable tax treaty (if such non-resident Holder is entitled to a reduced treaty rate under the applicable
income tax treaty) or the whole of the withholding tax withheld (if such non-resident Holder is entitled to an
exemption under the applicable income tax treaty) by complying with a certain subsequent filing procedure.
Toyota does not assume any responsibility to ensure withholding at the reduced rate, or exemption therefrom, for
non-resident Holders who would be so eligible under an applicable tax treaty but where the required proceduresas stated above are not followed.
Gains derived from the sale of shares of common stock or ADSs outside Japan by a non-resident Holder
holding such shares of common stock or ADSs as portfolio investors are, in general, not subject to Japaneseincome tax or corporation tax under Japanese law. Eligible U.S. Holders are not subject to Japanese income or
corporation tax with respect to such gains under the Treaty so long as filings required under Japanese law are
made.
Japanese inheritance and gift taxes at progressive rates may be payable by an individual who has acquired
from another individual shares of common stock or ADSs as a legatee, heir or donee even though neither theindividual nor the deceased nor donor is a Japanese resident.
Holders of shares of common stock or ADSs should consult their tax advisors regarding the effect of thesetaxes and, in the case of U.S. Holders, the possible application of the Estate and Gift Tax Treaty between the U.S.
and Japan.
U.S. Federal Income Taxation
U.S. Holders
The following discussion is a summary of the principal U.S. federal income tax consequences to U.S.
Holders that hold shares of common stock or ADSs as capital assets (generally, for investment purposes).
Taxation of Dividends
Subject to the passive foreign investment company (“PFIC”) rules discussed below, the gross amount of any
distribution made by Toyota in respect of shares of common stock or ADSs (without reduction for Japanese
withholding taxes) will constitute a taxable dividend to the extent paid out of current or accumulated earnings
and profits, as determined under U.S. federal income tax principles. The U.S. dollar amount of such a dividend
generally will be included in the gross income of a U.S. Holder, as ordinary income, when actually or
constructively received by the U.S. Holder, in the case of shares of common stock, or by the depositary, in thecase of ADSs. Dividends paid by Toyota will not be eligible for the dividends-received deduction generally
allowed to U.S. corporations in respect of dividends received from other U.S. corporations.
Dividends received on shares and ADSs of certain foreign corporations by non-corporate U.S. investors may
be subject to U.S. federal income tax at lower rates than other types of ordinary income if certain conditions are
met. Dividends received by non-corporate U.S. Holders with respect to shares of common stock or ADSs ofToyota are expected to be eligible for these reduced rates of tax. U.S. Holders should consult their own tax
advisors regarding the eligibility of such dividends for a reduced rate of tax.
The U.S. dollar amount of a dividend paid in Japanese yen will be determined based on the Japanese yen/
U.S. dollar exchange rate in effect on the date that the dividend is included in the gross income of the U.S.
Holder, regardless of whether the payment is converted into U.S. dollars on that date. Generally, any gain or loss
resulting from currency exchange fluctuations during the period from the date the dividend payment is includedin the gross income of a U.S. Holder through the date that payment is converted into U.S. dollars (or otherwise
disposed of) will be treated as U.S. source ordinary income or loss. U.S. Holders should consult their own tax
advisors regarding the calculation and U.S. federal income tax treatment of foreign currency gain or loss.
120

To the extent, if any, that the amount of any distribution received by a U.S. Holder in respect of shares ofcommon stock or ADSs exceeds Toyota’s current and accumulated earnings and profits, as determined under
U.S. federal income tax principles, the distribution first will be treated as a tax-free return of capital to the extent
of the U.S. Holder’s adjusted tax basis in those shares or ADSs, and thereafter will be treated as U.S. source
capital gain.
Distributions of additional shares of common stock that are made to U.S. Holders with respect to theirshares of common stock or ADSs, and that are part of a pro rata distribution to all of Toyota’s shareholders,
generally will not be subject to U.S. federal income tax.
For U.S. foreign tax credit purposes, dividends included in gross income by a U.S. Holder in respect ofshares of common stock or ADSs will constitute income from sources outside the United States, and will
generally be “passive category income” or, in the case of certain U.S. Holders, “general category income”.
Subject to generally applicable limitations under U.S. federal income tax law and the Treaty, any Japanese
withholding tax imposed in respect of a Toyota dividend may be claimed as a credit against the U.S. federal
income tax liability of a U.S. Holder, or alternatively as a deduction in the computation of such U.S. Holder’staxable income if the U.S. Holder does not elect to claim a credit for any foreign taxes paid or accrued for the
taxable year. Special rules generally will apply to the calculation of foreign tax credits in respect of dividend
income that qualifies for preferential U.S. federal income tax rates. Additionally, special rules apply toindividuals whose foreign source income during the taxable year consists entirely of “qualified passive income”
and whose creditable foreign taxes paid or accrued during the taxable year do not exceed $300 ($600 in the caseof a joint return). Further, under some circumstances, a U.S. Holder that:(i) has held shares of common stock or ADSs for less than a specified minimum period, or(ii) is obligated to make payments related to Toyota dividends,
will not be allowed a foreign tax credit for Japanese taxes imposed on Toyota dividends.
U.S. Holders are urged to consult their tax advisors regarding the availability of the foreign tax credit under
their particular circumstances.
Taxation of Capital Gains and Losses
In general, upon a sale or other taxable disposition of shares of common stock or ADSs, a U.S. Holder willrecognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference between theamount realized on the sale or other taxable disposition and the U.S. Holder’s adjusted tax basis in those sharesof common stock or ADSs. A U.S. Holder generally will have an adjusted tax basis in a share of common stockor an ADS equal to its U.S. dollar cost. Subject to the PFIC rules discussed below, gain or loss recognized on thesale or other taxable disposition of shares of common stock or ADSs generally will be capital gain or loss and, if
the U.S. Holder’s holding period for those shares or ADSs exceeds one year, will be long-term capital gain or
loss. Non-corporate U.S. Holders, including individuals, currently are eligible for preferential rates of U.S.
federal income tax in respect of long-term capital gains. Under U.S. federal income tax law, the deduction ofcapital losses is subject to limitations. Any gain or loss recognized by a U.S. Holder in respect of the sale or otherdisposition of shares of common stock or ADSs generally will be treated as U.S. source income or loss for U.S.
foreign tax credit purposes.
Deposits and withdrawals of common stock in exchange for ADSs will not result in the realization of gainor loss for U.S. federal income tax purposes.
Passive Foreign Investment Companies
A non-U.S. corporation generally will be classified as a PFIC for U.S. federal income tax purposes in any
taxable year in which, after applying look-through rules, either (1) at least 75% of its gross income is passive
121

income, or (2) on average at least 50% of the gross value of its assets is attributable to assets that produce passive
income or are held for the production of passive income. Passive income for this purpose generally includes
dividends, interest, royalties, rents and gains from commodities and securities transactions. The PFIC
determination is made annually and generally is based on the value of a non-U.S. corporation’s assets (including
goodwill) and composition of its income.
Toyota does not believe that it was a PFIC for U.S. federal income tax purposes for its taxable year ended
March 31, 2014, and currently intends to continue its operations in such a manner that it will not become a PFICin the future. Because the PFIC determination is made annually and the application of the PFIC rules to a
corporation such as Toyota (which among other things is engaged in leasing and financing through several
subsidiaries) is not entirely clear, no assurances can be made regarding determination of its PFIC status in thecurrent or any future taxable year. If Toyota is determined to be a PFIC, U.S. Holders could be subject toadditional U.S. federal income taxes on gain recognized with respect to the shares of common stock or ADSs andon certain distributions. In addition, an interest charge may apply to the portion of the U.S. federal income tax
liability on such gains or distributions treated under the PFIC rules as having been deferred by the U.S. Holder.
Moreover, dividends that a non-corporate U.S. Holder receives from Toyota will not be eligible for the reduced
U.S. federal income tax rates on dividends described above if Toyota is a PFIC either in the taxable year of thedividend or the preceding taxable year. If a U.S. Holder owns shares of common stock or ADSs in any taxable
year in which Toyota is a PFIC, such U.S. Holder generally would be required to file Internal Revenue Service(“IRS”) Form 8621 (or other form specified by the U.S. Department of the Treasury) on an annual basis, subject
to certain exceptions based on the value of PFIC stock held. Toyota will inform U.S. Holders if it believes that it
will be classified as a PFIC in any taxable year.
Prospective investors should consult their own tax advisors regarding the potential application of the PFIC
rules to shares of common stock or ADSs.
Non-U.S. Holders
The following discussion is a summary of the principal U.S. federal income tax consequences to beneficial
owners of shares of common stock or ADSs that are neither U.S. Holders nor partnerships, nor entities taxable aspartnerships for U.S. federal income tax purposes (“Non-U.S. Holders”).
A Non-U.S. Holder generally will not be subject to any U.S. federal income or withholding tax on
distributions received in respect of shares of common stock or ADSs unless the distributions are effectively
connected with the conduct by the Non-U.S. Holder of a trade or business within the United States (and, if anapplicable tax treaty requires, are attributable to a U.S. permanent establishment or fixed base of such Non-U.S.
Holder).
A Non-U.S. Holder generally will not be subject to U.S. federal income tax in respect of gain recognized ona sale or other disposition of shares of common stock or ADSs, unless:(i)the gain is effectively connected with a trade or business conducted by the Non-U.S. Holder within the
United States (and, if an applicable tax treaty requires, is attributable to a U.S. permanent establishment
or fixed base of such Non-U.S. Holder), or(ii) the Non-U.S. Holder is an individual who was present in the United States for 183 or more days in the
taxable year of the disposition and other conditions are met.
Income that is effectively connected with a U.S. trade or business of a Non-U.S. Holder, and, if an income
tax treaty applies and so requires, is attributable to a U.S. permanent establishment or fixed base of the Non-U.S.
Holder, generally will be taxed in the same manner as the income of a U.S. Holder. In addition, under certain
circumstances, any effectively connected earnings and profits realized by a corporate Non-U.S. Holder may besubject to an additional “branch profits tax” at the rate of 30% or at a lower rate that may be prescribed by anapplicable income tax treaty.
122

Backup Withholding and Information Reporting
In general, information reporting requirements will apply to dividends paid to a U.S. Holder in respect ofshares of common stock or ADSs, and to the proceeds received upon the sale, exchange or redemption of theshares of common stock or ADSs within the United States by U.S. Holders. Furthermore, backup withholding
may apply to those amounts (currently at a 28% rate) if a U.S. Holder fails to provide an accurate taxpayer
identification number to certify that such U.S. Holder is not subject to backup withholding or to otherwise
comply with the applicable requirements of the backup withholding requirements.
Dividends paid to a Non-U.S. Holder in respect of shares of common stock or ADSs, and proceeds received
upon the sale, exchange or redemption of shares of common stock or ADSs by a Non-U.S. Holder, generally are
exempt from information reporting and backup withholding under current U.S. federal income tax law. However,a Non-U.S. Holder may be required to provide certification of non-U.S. status in order to obtain that exemption.
Persons required to establish their exempt status generally must provide such certification under penalty of
perjury on IRS Form W-9, entitled Request for Taxpayer Identification Number and Certification, in the case of
U.S. persons, and on IRS Form W-8BEN, entitled Certificate of Foreign Status of Beneficial Owner for UnitedStates Tax Withholding, or IRS Form W-8 BEN-E, entitled Certificate of Entities Status of Beneficial Owner for
United States Tax Withholding and Reporting (Entities) (or other appropriate IRS Form W-8), in the case of nonU.S. persons. Backup withholding is not an additional tax. The amount of backup withholding imposed on a
payment generally may be claimed as a credit against the holder’s U.S. federal income tax liability provided thatthe required information is properly furnished to the IRS in a timely manner.
In addition, certain U.S. Holders who are individuals that hold certain foreign financial assets (which may
include shares of common stock or ADSs) are required to report information relating to such assets, subject tocertain exceptions. U.S. Holders should consult their tax advisors regarding the effect, if any, of this legislationon their ownership and disposition of shares of common stock or ADSs.
THE SUMMARY OF U.S. FEDERAL INCOME AND JAPANESE NATIONAL TAX CONSEQUENCESSET OUT ABOVE IS INTENDED FOR GENERAL INFORMATION PURPOSES ONLY. PROSPECTIVE
PURCHASERS OF COMMON STOCK OR ADSs ARE URGED TO CONSULT WITH THEIR OWN TAXADVISORS WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF OWNING ORDISPOSING OF COMMON STOCK OR ADSs, BASED ON THEIR PARTICULAR CIRCUMSTANCES.
10.F DIVIDENDS AND PAYING AGENTS
Not applicable.
10.G STATEMENT BY EXPERTS
Not applicable.
10.H DOCUMENTS ON DISPLAY
Toyota files annual reports on Form 20-F and reports on Form 6-K with the SEC. You may read and copy
this information at the SEC’s Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C.
20549 or by accessing the SEC’s home page (http://www.sec.gov). You can also request copies of the
documents, upon payment of a duplicating fee, by writing to the Public Reference Section of the SEC. Please callthe SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room. In addition,
Toyota’s reports, proxy statements and other information may be inspected at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005. Copies of the documents referred to herein may also beinspected at Toyota’s offices by contacting Toyota at 1 Toyota-cho, Toyota City, Aichi Prefecture 471-8571,
Japan, attention: Financial Reporting Department, Accounting Division, telephone number: 81-565-28-2121.
123

10.I SUBSIDIARY INFORMATION
Not applicable.
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Quantitative and Qualitative Disclosures about Market Risk
Toyota is exposed to market risk from changes in foreign currency exchange rates, interest rates, certain
commodity and equity security prices. In order to manage the risk arising from changes in foreign currency
exchange rates and interest rates, Toyota enters into a variety of derivative financial instruments.
A description of Toyota’s accounting policies for derivative instruments is included in note 2 to theconsolidated financial statements and further disclosure is provided in notes 20 and 26 to the consolidated
financial statements.
Toyota monitors and manages these financial exposures as an integral part of its overall risk management
program, which recognizes the unpredictability of financial markets, and seeks to reduce the potentially adverse
effects on Toyota’s operating results.
The financial instruments included in the market risk analysis consist of all of Toyota’s cash and cash
equivalents, marketable securities, finance receivables, securities investments, long-term and short-term debt andall derivative financial instruments. Toyota’s portfolio of derivative financial instruments consists of forward
foreign currency exchange contracts, foreign currency options, interest rate swaps, interest rate currency swap
agreements and interest rate options. Anticipated transactions denominated in foreign currencies that are coveredby Toyota’s derivative hedging are not included in the market risk analysis. Although operating leases are notrequired to be included, Toyota has included these instruments in determining interest rate risk.
Foreign Currency Exchange Rate Risk
Toyota has foreign currency exposures related to buying, selling and financing in currencies other than thelocal currencies in which it operates. Toyota is exposed to foreign currency risk related to future earnings orassets and liabilities that are exposed due to operating cash flows and various financial instruments that are
denominated in foreign currencies. Toyota’s most significant foreign currency exposures relate to the U.S. dollar
and the euro.
Toyota uses a value-at-risk analysis (“VAR”) to evaluate its exposure to changes in foreign currency
exchange rates. The VAR of the combined foreign exchange position represents a potential loss in pre-tax
earnings that was estimated to be ¥99.1 billion and ¥162.5 billion as of March 31, 2013 and 2014, respectively.
Based on Toyota’s overall currency exposure (including derivative positions), the risk during fiscal 2014 to
pre-tax cash flow from currency movements was on average ¥162.5 billion, with a high of ¥172.8 billion and a
low of ¥151.4 billion.
The VAR was estimated by using a Monte Carlo Simulation Method and assumed 95% confidence level on
the realization date and a 10-day holding period.
Interest Rate Risk
Toyota is subject to market risk from exposures to changes in interest rates based on its financing, investing
and cash management activities. Toyota enters into various financial instrument transactions to maintain thedesired level of exposure to the risk of interest rate fluctuations and to minimize interest expense. The potential
decrease in fair value resulting from a hypothetical 100 basis point upward shift in interest rates would beapproximately ¥208.5 billion as of March 31, 2013 and ¥217.8 billion as of March 31, 2014.
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There are certain shortcomings inherent to the sensitivity analyses presented. The model assumes thatinterest rate changes are instantaneous parallel shifts in the yield curve. However, in reality, changes are rarely
instantaneous. Although certain assets and liabilities may have similar maturities or periods to repricing, they
may not react correspondingly to changes in market interest rates. Also, the interest rates on certain types ofassets and liabilities may fluctuate with changes in market interest rates, while interest rates on other types ofassets may lag behind changes in market rates. Finance receivables are less susceptible to prepayments wheninterest rates change and, as a result, Toyota’s model does not address prepayment risk for automotive related
finance receivables. However, in the event of a change in interest rates, actual loan prepayments may deviatesignificantly from the assumptions used in the model.
Commodity Price Risk
Commodity price risk is the possibility of higher or lower costs due to changes in the prices of commodities,
such as non-ferrous alloys (e.g., aluminum), precious metals (e.g., palladium, platinum and rhodium) and ferrous
alloys, which Toyota uses in the production of motor vehicles. Toyota does not use derivative instruments tohedge the price risk associated with the purchase of those commodities and controls its commodity price risk byholding minimum stock levels.
Equity Price Risk
Toyota holds investments in various available-for-sale equity securities that are subject to price risk. The
fair value of available-for-sale equity securities was ¥1,401.1 billion as of March 31, 2013 and ¥1,997.1 billion asof March 31, 2014. The potential change in the fair value of these investments, assuming a 10% change in prices,would be approximately ¥140.1 billion as of March 31, 2013 and ¥199.7 billion as of March 31, 2014.
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
12.A DEBT SECURITIES
Not applicable.
12.B WARRANTS AND RIGHTS
Not applicable.
12.C OTHER SECURITIES
Not applicable.

12512.D AMERICAN DEPOSITARY SHARESFees and Charges for Holders of American Depositary Receipts
The Bank of New York Mellon, as depositary for the ADSs (the “Depositary”) collects its fees for delivery
and surrender of ADSs directly from investors depositing shares or surrendering ADSs for the purpose ofwithdrawal or from intermediaries acting for them. The Depositary collects fees for making distributions toinvestors by deducting those fees from the amounts distributed or by selling a portion of distributable property to
pay the fees. The Depositary may generally refuse to provide fee-attracting services until its fees for thoseservices are paid.
Persons depositing or withdrawing shares must pay:For:

$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)•

Issuance of ADSs, including issuances resulting
from a distribution, sale or exercise of shares orrights or other property•

Cancellation of ADSs for the purpose ofwithdrawal including if the deposit agreement
terminates$0.02 (or less) per ADS•

Any cash distribution to ADS registered holders

A fee equivalent to the fee that would be payable if
securities distributed to the ADR holder had been sharesand the shares had been deposited for issuance of ADSs•

Distribution of securities distributed to holders
of deposited securities which are distributed by
the depositary to ADS registered holders

Registration fees•

Registration of transfer of shares on Toyota’sshare register to the name of the depositary or its
nominee or the custodian or its nominee whenshares are deposited or withdrawn

Expenses of the depositary•

Cable, telex and facsimile transmissions (whenexpressly provided in the deposit agreement)•

Converting foreign currency to U.S. dollars•

As necessary

Taxes and other governmental charges the depositary or
the custodian have to pay on any ADS or share
underlying an ADS
Fees Incurred in Fiscal 2014

For fiscal 2014, Toyota received $200,000 from the Depositary for standard out-of-pocket maintenancecosts for the ADRs (consisting of the expenses of postage and envelopes for mailing annual reports, printing anddistributing dividend checks, stationery, postage, facsimile, and telephone calls) and expenses relating toToyota’s annual general shareholders’ meeting that are incurred with respect to Toyota’s ADR holders. The
Depositary also paid Toyota’s continuing annual stock exchange listing fees.
Fees to be Paid in the Future
The Depositary has agreed to reimburse Toyota for expenses Toyota incurs that are related to themaintenance of the ADS program. The Depositary has agreed to pay the standard out-of-pocket maintenancecosts for the ADRs, which includes the expenses of postage and envelopes for mailing annual reports, printing
and distributing dividend checks, stationery, postage, facsimile, and telephone calls. It has also agreed toreimburse Toyota annually for investor relations expenses and any other program related expenses. There arelimits on the amount of expenses for which the Depositary will reimburse Toyota, but the amount of
reimbursement available to Toyota is not tied to the amount of fees investors pay to the Depositary.
126

PART IIITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIESNone.
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
PROCEEDSNone.
ITEM 15. CONTROLS AND PROCEDURES(a) DISCLOSURE CONTROLS AND PROCEDURES
Toyota performed an evaluation of the effectiveness of the design and operation of its disclosure controls
and procedures as of the end of the fiscal 2014. Disclosure controls and procedures are designed to ensure that
information required to be disclosed in the Form 20-F that Toyota files under the Exchange Act is accumulated
and communicated to its management, including the chief executive officer and the principal accounting andfinancial officer, to allow timely decision regarding required disclosure. The disclosure controls and procedures
also ensures that the Form 20-F that it files under the Exchange Act is recorded, processed, summarized andreported within the time periods specified in the Commission’s rules and forms. The evaluation was performed
under the supervision of Toyota’s Chairman of the Board and the Executive Vice President. Toyota’s disclosure
controls and procedures are designed to provide reasonable assurance of achieving its objectives. Managerial
judgment was necessary to evaluate the cost-benefit relationship of possible controls and procedures. The
Chairman of the Board and the Executive Vice President have concluded that Toyota’s disclosure controls andprocedures are effective at the reasonable assurance level.
(b) MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIALREPORTING
Toyota’s management is responsible for establishing and maintaining effective internal control overfinancial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes inaccordance with U.S. GAAP. Toyota’s internal control over financial reporting includes those policies andprocedures that:(i)pertain to the maintenance of records that in reasonable detail, accurately and fairly reflect thetransactions and dispositions of Toyota’s assets;(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with U.S. GAAP, and that Toyota’s receipts and expenditures arebeing made only in accordance with authorizations of Toyota’s management and directors; and(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use,
or disposition of Toyota’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with thepolicies or procedures may deteriorate.
Toyota’s management conducted an evaluation of the effectiveness of internal control over financial
reporting based on the framework in “Internal Control — Integrated Framework (1992)” issued by theCommittee of Sponsoring Organizations of the Treadway Commission.
127Based on this evaluation, management concluded that Toyota’s internal control over financial reporting was
effective as of March 31, 2014.
PricewaterhouseCoopers Aarata, an independent registered public accounting firm that audited theconsolidated financial statements included in this report, has also audited the effectiveness of Toyota’s internal
control over financial reporting as of March 31, 2014, as stated in its report included herein.
(c) ATTESTATION REPORT OF THE REGISTERED PUBLIC ACCOUNTING FIRM
Toyota’s independent registered public accounting firm, PricewaterhouseCoopers Aarata, has issued an
audit report on the effectiveness of Toyota’s internal control over financial reporting. This report appears in
Item 18.
(d) CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There have been no changes in Toyota’s internal control over financial reporting during fiscal 2014 thathave materially affected, or are reasonably likely to materially affect, Toyota’s internal control over financial
reporting.
ITEM 16. [RESERVED]ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
Toyota maintains an audit & supervisory board system, in accordance with the Companies Act. Toyota’s
audit & supervisory board is comprised of six audit & supervisory board members, three of whom are outside
audit & supervisory board members. Each audit & supervisory board member has been appointed at Toyota’sshareholders’ meetings and has certain statutory powers independently, including auditing the business affairs
and accounts of Toyota.
Toyota’s audit & supervisory board has determined that it does not have an “audit committee financial
expert” serving on the audit & supervisory board. The qualifications for, and powers of, the audit & supervisoryboard member delineated in the Companies Act are different from those anticipated for any audit committee
financial expert. Audit & supervisory board members have the authority to be given reports from a certified
public accountant or an accounting firm concerning audits, including technical accounting matters. At the sametime, each audit & supervisory board member has the authority to consult internal and external experts on
accounting matters. Each audit & supervisory board member must fulfill the requirements under Japanese laws
and regulations and otherwise follow Japanese corporate governance practices and, accordingly, Toyota’s
audit & supervisory board has confirmed that it is not necessarily in Toyota’s best interest to nominate as audit &supervisory board member a person who meets the definition of audit committee financial experts. Although
Toyota does not have an audit committee financial expert on its audit & supervisory board, Toyota believes that
Toyota’s current corporate governance system, taken as a whole, including the audit & supervisory board
members’ ability to consult internal and external experts, is fully equivalent to a system having an audit
committee financial expert on its audit & supervisory board.
ITEM 16B. CODE OF ETHICS
Toyota has adopted a code of ethics that applies to its directors and managing officers, including its
principal executive officer, principal financial officer, principal accounting officer or controller, or persons
performing similar functions. A copy of Toyota’s code of ethics is included as an exhibit to this annual report on
Form 20-F.

128

ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
PricewaterhouseCoopers Aarata has audited the financial statements of Toyota included in this annual reporton Form 20-F.
The following table presents the aggregate fees for professional services and other services rendered byPricewaterhouseCoopers Aarata and the various network and member firms of PricewaterhouseCoopers to
Toyota in fiscal 2013 and fiscal 2014.
Yen in millions
2013
2014

Audit Fees(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Audit-related Fees(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax Fees(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All Other Fees(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,120
81
388
122

3,619
101
433
139

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,711

4,292

(1) Audit Fees consist of fees billed for the annual audit services engagement and other audit services, which
are those services that only the external auditor reasonably can provide, and include the services of annual
audit, quarterly reviews and assessment and reviews of the effectiveness of internal controls over financial
reporting of Toyota and its subsidiaries and affiliated companies; the services associated with SEC
registration statements or other documents issued in connection with securities offerings such as comfort
letters and consents; and consultations as to the accounting or disclosure treatment of transactions or events.
(2) Audit-related Fees consist of fees billed for assurance and related services that are reasonably related to theperformance of the audit or review of its financial statements or that are traditionally performed by theexternal auditor, and mainly include services such as due diligence; agreed-upon or expanded audit
procedures; internal control reviews and assistance; review of the information system; and financial
statement audits of employee benefit plans.
(3) Tax Fees include fees billed for tax compliance services, including services such as tax planning, advice andcompliance of federal, state, local and international tax; the review of tax returns; assistance with tax audits
and appeals; tax-only valuation services including transfer pricing and cost segregation studies; expatriate
tax assistance and compliance.
(4) All Other Fees primarily include fees billed for risk management advisory services of assessment andtesting of security infrastructure controls; advisory services relating to establishment of a new subsidiary;
assistance with continuing education and training; and services providing information related to automotive
market conditions and sales networks.
Policies and Procedures of the Audit & Supervisory Board
Below is a summary of the current policies and procedures of the audit & supervisory board for the preapproval of audit and permissible non-audit services performed by Toyota’s independent public accountants.
Under the policy, the Representative Directors submit a request for general pre-approval of audit andpermissible non-audit services for the following fiscal year, which shall include details of the specific services
and estimated fees for the services, to the audit & supervisory board, which reviews and determines whether or
not to grant the request by the end of March of the fiscal year. Upon the general pre-approval of the audit &supervisory board, the Representative Directors are not required to obtain any specific pre-approval for audit andpermissible non-audit services so long as those services fall within the scope of the general pre-approval
provided.

129

The audit & supervisory board makes a further determination of whether or not to grant a request to revise
the general pre-approval for the applicable fiscal year if such request is submitted by the Representative
Directors. Such request may include (i) adding any audit or permissible non-audit services other than the ones
listed in the general pre-approval and (ii) obtaining services that are listed in the general pre-approval but of
which the total fee amount exceeds the amount affirmed by the general pre-approval. The determination ofwhether or not to grant a request to revise the general pre-approval noted in the foregoing may alternatively bemade by an audit & supervisory board member (full time), who is designated in advance by a resolution of theaudit & supervisory board, in which case such audit & supervisory board member (full time) shall report suchdecision at the next meeting of the audit & supervisory board. The performance of audit and permissible nonaudit services and the payment of fees are subject to review by the audit & supervisory board at least once every
fiscal half year.
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Toyota does not have an audit committee. Toyota is relying on the general exemption contained inRule 10A-3(c)(3) under the Exchange Act, which provides an exemption from the NYSE’s listing standards
relating to audit committees for foreign companies like Toyota that have an audit & supervisory board. Toyota’s
reliance on Rule 10A-3(c)(3) does not, in its opinion, materially adversely affect the ability of its audit &supervisory board to act independently and to satisfy the other requirements of Rule 10A-3.
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
PURCHASERS
The following table sets forth purchases of Toyota’s common stock by Toyota and its affiliated purchasers
during fiscal 2014:

(a)
Total
Number of
SharesPurchased(1)(b)
Average
Price Paid per
Share (Yen)(1)

(c)
Total
Number of
SharesPurchased as
Part of
Publicly
Announced
Plans or
Programs(2)April 1, 2013 – April 30, 2013 . . . . . . . . . . . . . . . . . . . . . .
May 1, 2013 – May 31, 2013 . . . . . . . . . . . . . . . . . . . . . . .
June 1, 2013 – June 30, 2013 . . . . . . . . . . . . . . . . . . . . . . .
July 1, 2013 – July 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . .
August 1, 2013 – August 31, 2013 . . . . . . . . . . . . . . . . . . .
September 1, 2013 – September 30, 2013 . . . . . . . . . . . . . .
October 1, 2013 – October 31, 2013 . . . . . . . . . . . . . . . . . .
November 1, 2013 – November 30, 2013 . . . . . . . . . . . . . .
December 1, 2013 – December 31, 2013 . . . . . . . . . . . . . .
January 1, 2014 – January 31, 2014 . . . . . . . . . . . . . . . . . .
February 1, 2014 – February 28, 2014 . . . . . . . . . . . . . . . .
March 1, 2014 – March 31, 2014 . . . . . . . . . . . . . . . . . . . .

5,159
6,172
2,821
5,944
3,718
2,437
3,618
4,487
9,707
4,392
2,200
2,094

¥5,313.25
6,121.59
5,867.45
6,320.72
6,206.95
6,242.68
6,282.51
6,325.88
6,225.56
6,261.74
5,861.98
5,703.52

—
—
—
—
—
—
—
—
—
—
—
—

—
—
—
—
—
—
—
—
—
—
—
—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

52,749———Period(d)Maximum
Number of
Shares thatMay Yet Be
Purchased
Under thePlans or
Programs(2)(1) A portion of the above purchases were made as a result of holders of shares constituting less than one unit,
which is 100 shares of common stock, requesting Toyota to purchase shares that are a fraction of a unit, in
accordance with Toyota’s share handling regulations. Toyota is required to comply with such requests
pursuant to the Companies Act. See “Additional Information — Memorandum and Articles of Association— Japanese Unit Share System”.
130

(2) As announced on March 26, 2014, Toyota plans to dispose 30,000,000 shares of treasury stock by way ofthird-party allotment to Japan Trustee Services Bank, Ltd. in August 2014 at ¥1 per share to fund theactivities of the Toyota Mobility Foundation. In connection with such disposition, and also as announced on
March 26, 2014 and June 17, 2014, Toyota plans to repurchase up to 60,000,000 shares of Toyota’scommon stock at a total purchase price of up to ¥360.0 billion during the period from July 1, 2014 toDecember 22, 2014, and plans to cancel 30,000,000 shares of treasury stock on June 30, 2014.
ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 16G. CORPORATE GOVERNANCE
Significant Differences in Corporate Governance Practices between Toyota and U.S. Companies Listed on
the NYSE
Pursuant to home country practices exemptions granted by the NYSE, Toyota is permitted to follow certain
corporate governance practices complying with Japanese laws, regulations and stock exchange rules in lieu of the
NYSE’s listing standards. The SEC approved changes to the NYSE’s listing standards related to corporate
governance practices of listed companies (the “NYSE Corporate Governance Rules”) in November 2003, as
further amended in November 2004. Toyota is exempt from the approved changes, except for requirements that(a) Toyota’s audit & supervisory board satisfies the requirements of Rule 10A-3 under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), (b) Toyota must disclose significant differences in its corporate
governance practices as compared to those followed by domestic companies under the NYSE listing standards,(c) Toyota’s principal executive officer must notify the NYSE in writing after any executive officer of Toyota
becomes aware of any non-compliance with (a) and (b), and (d) Toyota must submit annual and interim written
affirmations to the NYSE. Toyota’s corporate governance practices and those followed by domestic companies
under the NYSE Corporate Governance Rules have the following significant differences:
1. Directors. Toyota currently does not have any directors who will be deemed an “independent director” asrequired under the NYSE Corporate Governance Rules for U.S. listed companies. Unlike the NYSE Corporate
Governance Rules, the Companies Act does not require Japanese companies with an audit & supervisory board
such as Toyota to have any independent directors on its board of directors. While the NYSE Corporate
Governance Rules require that the non-management directors of each listed company meet at regularly scheduled
executive sessions without management, Toyota currently has no non-management director on its board of
directors. Unlike the NYSE Corporate Governance Rules, the Companies Act does not require, and accordingly
Toyota does not have, an internal corporate organ or committee comprised solely of independent directors.
Toyota currently has three outside directors under the Companies Act. Under the Companies Act, an“outside” director is any person who is not, and was not at any time during the past, an executive director (adirector who engages in the execution of business), executive officer, manager or employee of Toyota or its
subsidiaries. Such qualifications for an “outside” director are different from the director independence
requirements under the NYSE Corporate Governance Rules.
In addition, pursuant to the regulations of the Japanese stock exchanges, Toyota is required to have one ormore “independent director(s)/audit & supervisory board member(s),” defined under the relevant regulations of
the Japanese stock exchanges as “outside directors” or “outside audit & supervisory board members” (as defined
under the Companies Act), who are unlikely to have any conflicts of interests with Toyota’s generalshareholders, and is also required to make efforts to have at least one “independent director(s)/audit &supervisory board member(s)” who is also a director. Each of the outside directors of Toyota satisfies the“independent director/audit & supervisory board member” requirements under the regulations of the Japanesestock exchanges. The definition of “independent director/audit & supervisory board member” is different fromthat of the definition of independent director under the NYSE Corporate Governance Rules.
1312. Committees. Under the Companies Act, Toyota has elected to structure its corporate governance system
as a company with audit & supervisory board members, who are under a statutory duty to monitor, review andreport on the management of the affairs of Toyota. Toyota, as with other Japanese companies with an audit &supervisory board, does not have certain committees that are required of U.S. listed companies subject to the
NYSE Corporate Governance Rules, including those that are responsible for director nomination, corporate
governance and executive compensation.
Pursuant to the Companies Act, Toyota’s board of directors nominates and submits a proposal for theappointment of directors for shareholder approval. The shareholders vote on such nomination at the generalshareholders’ meeting. The Companies Act requires that the respective limits or calculation formula, and kind (incase that the remuneration, bonus and any other benefits in compensation for the execution of duties(“remuneration, etc.”) are to be paid in other than cash) of remuneration, etc. to be paid to directors, and limits ofremuneration, etc. to be paid to audit & supervisory board members, must be determined by a resolution of thegeneral shareholders’ meeting, unless their remuneration, etc. is provided for in the articles of incorporation. The
distribution of remuneration, etc. among each director is broadly delegated to the board of directors and the
distribution of remuneration among each audit & supervisory board member is determined by consultation
among the audit & supervisory board members.
3. Audit Committee. Toyota avails itself of paragraph (c)(3) of Rule 10A-3 of the Exchange Act, which
provides a general exemption from the audit committee requirements to a foreign private issuer with an audit &supervisory board, subject to certain requirements which continue to be applicable under Rule 10A-3.
Pursuant to the requirements of the Companies Act, Toyota elects its audit & supervisory board members
through a resolution adopted at a general shareholders’ meeting. Toyota currently has six audit & supervisoryboard members, which exceeds the minimum number of audit & supervisory board members required pursuant to
the Companies Act.
Unlike the NYSE Corporate Governance Rules, the Companies Act, among others, does not require audit &supervisory board members to establish an expertise in accounting nor are they required to present other special
knowledge and experience. Under the Companies Act, the audit & supervisory board may determine the auditing
policies and methods of investigating the conditions of Toyota’s business and assets, and may resolve othermatters concerning the execution of the audit & supervisory board member’s duties. The audit & supervisoryboard also prepares auditors’ reports and gives consent to proposals of the nomination of audit & supervisoryboard members and accounting auditors.
Toyota currently has three outside audit & supervisory board members under the Companies Act. Under theCompanies Act, at least half of the audit & supervisory board members must be “outside” audit & supervisoryboard members, which is any person who was not a director, accounting counselor (in the case that an accounting
counselor is a legal entity, a member of such entity who is in charge of its affairs), executive officer, manager, or
employee of Toyota or its subsidiaries at any time during the past. Such qualifications for an “outside” audit &supervisory board member are different from the audit committee independence requirement under the
NYSE Corporate Governance Rules.
Each of the outside audit & supervisory board members of Toyota satisfies the “independent director/
audit & supervisory board member” requirements under the regulations of the Japanese stock exchanges, as
described above in “1. Directors.”
4. Corporate Governance Guidelines. Unlike the NYSE Corporate Governance Rules, Toyota is not
required to adopt corporate governance guidelines under Japanese laws and regulations, including the Companies
Act, the Financial Instruments and Exchange Law of Japan and stock exchange rules. However, Toyota isrequired to resolve the matters at the board of directors concerning provision of the system to ensure theexecution of duties of the directors to comply with the laws, regulations and the articles of incorporation, and any132other systems to ensure the adequacy of the business required under the ordinance of the Ministry of Justice(“internal control system” or “naibu-tosei”), and to disclose such matters resolved, policies and the present statusof its corporate governance in its business reports, annual securities report and certain other disclosure documentsin accordance with the regulations under the Financial Instruments and Exchange Law and stock exchange rules
in respect of timely disclosure.
5. Code of Business Conduct and Ethics. Unlike the NYSE Corporate Governance Rules, under Japaneselaws and regulations including the Companies Act, the Financial Instruments and Exchange Law and stock
exchange rules, Toyota is not required to adopt a code of business conduct and ethics for directors, officers andemployees. Accordingly, Toyota is not required to adopt and disclose waivers of the code of business conduct
and ethics for these individuals. However, Toyota resolved to maintain a code of business conduct and ethics aspart of its “internal control system”, or “naibu-tosei”, pursuant to the Companies Act, in order to ensure its
employees’ comply with laws, regulations and the articles of incorporation, etc. Toyota additionally maintains
guidelines and internal regulations such as “Guiding Principles at Toyota”, “Toyota Code of Conduct” and a codeof ethics pursuant to Section 406 of the Sarbanes-Oxley Act. Please see “Code of Ethics” for additional
information.
6. Shareholder Approval of Equity Compensation Plans. Unlike the NYSE Corporate Governance Rules,
under which material revisions to equity-compensation plans of listed companies are subject to shareholder
approval, pursuant to the Companies Act, generally, the adoption of equity compensation plans for directors is
required to be approved by a majority of shareholders at the general shareholders’ meeting as the remuneration,etc. in other than cash. In addition to such approval, if Toyota desires to adopt an equity-compensation plan underwhich stock acquisition rights are granted on specially favorable terms to the recipient (except where such rights
are granted to all of its shareholders on a pro-rata basis at the same time), then Toyota obtains approval by supermajority (as defined in the Companies Act) at the ordinary general shareholders’ meeting. Such approval isapplicable only to stock acquisition rights to be granted within one year from the date of the approval.
ITEM 16H. MINE SAFETY DISCLOSURE
Not applicable.

133PART IIIITEM 17. FINANCIAL STATEMENTS
Not applicable.
ITEM 18. FINANCIAL STATEMENTS
The following financial statements are filed as part of this annual report on Form 20-F.

134

TOYOTA MOTOR CORPORATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page

Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-2

Consolidated balance sheets at March 31, 2013 and 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-3

Consolidated statements of income for the years ended
March 31, 2012, 2013 and 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-5

Consolidated statements of comprehensive income for the years ended
March 31, 2012, 2013 and 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-6

Consolidated statements of shareholders’ equity for the years ended
March 31, 2012, 2013 and 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-7

Consolidated statements of cash flows for the years ended
March 31, 2012, 2013 and 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-9Notes to consolidated financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-10

All financial statements schedules are omitted because they are not applicable or the required information isshown in the financial statements or the notes thereto.
Financial statements of 50% or less owned persons accounted for by the equity method have been omitted
because the registrant’s proportionate share of the income from continuing operations before income taxes is lessthan 20% of consolidated income (loss) from continuing operations before income taxes and the investment inand advances to each company is less than 20% of consolidated total assets.

F-1

Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of
Toyota Jidosha Kabushiki Kaisha(“Toyota Motor Corporation”)
In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in allmaterial respects, the financial position of Toyota Motor Corporation and its subsidiaries at March 31, 2013 and2014, and the results of their operations and their cash flows for each of the three years in the period ended
March 31, 2014 in conformity with accounting principles generally accepted in the United States of America.
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial
reporting as of March 31, 2014, based on criteria established in Internal Control—Integrated Framework(1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The
Company’s management is responsible for these financial statements, for maintaining effective internal control
over financial reporting and for its assessment of the effectiveness of internal control over financial reporting,included in Management’s Annual Report on Internal Control Over Financial Reporting appearing under
Item 15(b). Our responsibility is to express opinions on these financial statements and on the Company’s internal
control over financial reporting based on our integrated audits. We conducted our audits in accordance with thestandards of the Public Company Accounting Oversight Board (United States). Those standards require that weplan and perform the audits to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement and whether effective internal control over financial reporting was maintained in allmaterial respects. Our audits of the financial statements included examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal
control over financial reporting included obtaining an understanding of internal control over financial reporting,assessing the risk that a material weakness exists, and testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk. Our audits also included performing such otherprocedures as we considered necessary in the circumstances. We believe that our audits provide a reasonablebasis for our opinions.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financial statements in accordancewith generally accepted accounting principles, and that receipts and expenditures of the company are being madeonly in accordance with authorizations of management and directors of the company; and (iii) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of thecompany’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with thepolicies or procedures may deteriorate.
/s/ PricewaterhouseCoopers Aarata
Nagoya, Japan
June 24, 2014

F-2

TOYOTA MOTOR CORPORATIONCONSOLIDATED BALANCE SHEETSASSETS
Yen in millions
March 31,
2013
2014

Current assets
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Time deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade accounts and notes receivable, less allowance for
doubtful accounts of ¥15,875 million in 2013and ¥18,780 million in 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,718,297
106,700
1,445,663

2,041,170
180,2072,046,877

1,971,659
5,117,660
432,693
1,715,786
749,398
527,034

2,036,232
5,628,934
351,182
1,894,704
866,386
672,014

Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13,784,890

15,717,706

Noncurrent finance receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,943,766

8,102,294

Investments and other assets
Marketable securities and other securities investments . . . . . . . . . . . . . . . . . . . .
Affiliated companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employees receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,176,582
2,103,283
53,741569,816

6,765,043
2,429,778
44,966736,388

Total investments and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,903,422

9,976,175

Property, plant and equipment
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Machinery and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vehicles and equipment on operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,303,611
3,874,279
9,716,180
3,038,011
291,539

1,314,040
4,073,335
10,381,285
3,709,560
286,571

Total property, plant and equipment, at cost . . . . . . . . . . . . . . . . . . . . . . . . 18,223,620 19,764,791
Less - Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11,372,381) (12,123,493)
Total property, plant and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,851,239

7,641,298

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

35,483,317

41,437,473

The accompanying notes are an integral part of these consolidated financial statements.
F-3

TOYOTA MOTOR CORPORATIONCONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS’ EQUITY
Yen in millions
March 31,
2013
2014

Current liabilities
Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,089,528
2,704,428
2,113,778
721,065
2,185,537
156,266
941,918

4,830,820
2,949,663
2,213,218
845,426
2,313,160
594,829
933,569

Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12,912,520

14,680,685

Long-term liabilities
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued pension and severance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,337,824
766,112
1,385,927
308,078

8,546,910
767,618
1,811,846
411,427

Total long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9,797,941

11,537,801

397,050
551,040
12,689,206(356,123)

397,050
551,308
14,116,295
528,161(1,133,138)(1,123,666)

Total Toyota Motor Corporation shareholders’ equity . . . . . . . . . . . . . . . .

12,148,035

14,469,148

Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

624,821749,839

Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12,772,856

15,218,987

Commitments and contingencies
Total liabilities and shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . .

35,483,317

41,437,473

Shareholders’ equity
Toyota Motor Corporation shareholders’ equity
Common stock, no par value,authorized: 10,000,000,000 shares in 2013 and 2014;
issued: 3,447,997,492 shares in 2013 and 2014 . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . .
Treasury stock, at cost, 280,568,824 shares in 2013 and278,231,473 shares in 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The accompanying notes are an integral part of these consolidated financial statements.
F-4

TOYOTA MOTOR CORPORATIONCONSOLIDATED STATEMENTS OF INCOME
Yen in millions
For the years ended March 31,
2012
2013
2014

Net revenues
Sales of products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total net revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Costs and expenses
Cost of products sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of financing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative . . . . . . . . . . . . . . . . . . . . . . . . . .
Total costs and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other income (expense)
Interest and dividend income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange gain, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other income (loss), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total other income (expense) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes and equity in earnings of affiliatedcompanies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in earnings of affiliated companies . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Net income attributable to noncontrolling interests . . . . . . . . . . . .
Net income attributable to Toyota Motor Corporation . . . . . . .

17,511,916
1,071,737
18,583,653

20,914,150
1,150,042
22,064,192

24,312,644
1,379,267
25,691,911

15,795,918
592,646
1,839,462
18,228,026
355,627

18,010,569
630,426
2,102,309
20,743,304
1,320,888

19,988,245
812,8942,598,660
23,399,799
2,292,112

99,865(22,922)
37,105(36,802)77,246

98,673(22,967)
5,551
1,504
82,761

115,410(19,630)
50,2602,928
148,968

432,873
262,272
197,701
368,302(84,743)
283,559

1,403,649
551,686
231,519
1,083,482(121,319)
962,1632,441,080
767,808
318,376
1,991,648(168,529)
1,823,119Yen

Net income attributable to Toyota Motor Corporation per share- Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

90.21

303.82575.30- Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

90.20

303.78574.92

Cash dividends per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

50.00

90.00

165.00

The accompanying notes are an integral part of these consolidated financial statements.
F-5

TOYOTA MOTOR CORPORATIONCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Yen in millions
For the years ended March 31,
2012
2013
2014

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 368,302 1,083,482
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . (93,292) 461,754
Unrealized gains (losses) on securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 131,794
374,209
Pension liability adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (65,110)
14,711

1,991,648
301,889
499,560
99,404

Total other comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . .

(26,608)

850,674

900,853

Comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

341,694

1,934,156

2,892,501

Less: Comprehensive income attributable to noncontrolling interests . . . . . . .

(85,744)(149,283)(185,098)

Comprehensive income attributable to Toyota Motor Corporation . . . . . .

255,950

1,784,873

2,707,403

The accompanying notes are an integral part of these consolidated financial statements.
F-6

TOYOTA MOTOR CORPORATIONCONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
Yen in millions
Total
Accumulated
Toyota Motor
Additional
other
Treasury Corporation
Total
Common paid-in Retained comprehensive stock, shareholders’ Noncontrolling shareholders’stockcapitalearnings income (loss)
at costequityinterests
equityBalances at March 31, 2011 . . . . . . . . . . . 397,050
Equity transaction with noncontrollinginterests and other . . . . . . . . . . . . . . . . . .
Issuance during the year . . . . . . . . . . . . . . .
Comprehensive income
Net income . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss)
Foreign currency translation
adjustments . . . . . . . . . . . . . . .
Unrealized gains (losses) on
securities . . . . . . . . . . . . . . . . .
Pension liability adjustments . . .

505,760

11,835,665(1,144,721)

43,311
1,483(45,365)(6,503)(1,261,383) 10,332,371

587,653

10,920,024

117,262
1,483(119,824)(2,562)
1,483

283,559

84,743368,302(87,729)(87,729)(5,563)(93,292)

129,328(69,208)

129,328(69,208)

2,466
4,098

131,794(65,110)

255,950

85,744

341,694

125,819

283,559

Total comprehensive income . . . . . . .
Dividends paid to Toyota Motor
Corporation shareholders . . . . . . . . . . . .
Dividends paid to noncontrollinginterests . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchase and reissuance of treasury
stock . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balances at March 31, 2012 . . . . . . . . . . . 397,050
Equity transaction with noncontrollinginterests and other . . . . . . . . . . . . . . . . . .
Issuance during the year . . . . . . . . . . . . . . .
Comprehensive income
Net income . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss)
Foreign currency translation
adjustments . . . . . . . . . . . . . . .
Unrealized gains (losses) on
securities . . . . . . . . . . . . . . . . .
Pension liability adjustments . . .

(156,785)(156,785)(37,356)(37,356)(1,135,680) 10,550,261

516,217

11,066,478

675

4,961

5,636

962,163

121,319

1,083,482

434,638

434,638

27,116

461,754368,507
19,565368,507
19,565

5,702(4,854)374,209
14,711

1,784,873

149,283

1,934,156

96
550,650(116)
11,917,074(1,178,833)

675
962,163

Total comprehensive income . . . . . . .
Dividends paid to Toyota Motor
Corporation shareholders . . . . . . . . . . . .
Dividends paid to noncontrollinginterests . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchase and reissuance of treasury
stock . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balances at March 31, 2013 . . . . . . . . . . . 397,050(190,008)

(285)

(23)

551,040

12,689,206(156,785)

(20)

(20)

(190,008)

2,542(356,123)(190,008)(45,640)(45,640)

624,821

12,772,856

2,234(1,133,138) 12,148,035

2,234

The accompanying notes are an integral part of these consolidated financial statements.
F-7

TOYOTA MOTOR CORPORATIONCONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (CONTINUED)
Yen in millions
Total
Accumulated
Toyota Motor
Additional
other
Treasury Corporation
Total
Common paid-in Retained comprehensive stock, shareholders’ Noncontrolling shareholders’stockcapitalearnings income (loss)
at costequityinterests
equityBalances at March 31, 2013 . . . . . . . . . . . 397,050
Equity transaction with noncontrollinginterests and other . . . . . . . . . . . . . . . . . .
Issuance during the year
Comprehensive income
Net income . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss)
Foreign currency translation
adjustments . . . . . . . . . . . . . . .
Unrealized gains (losses) on
securities . . . . . . . . . . . . . . . . .
Pension liability adjustments . . .

551,040

12,689,206(356,123)(1,133,138) 12,148,035

624,821

12,772,856

528

2,985

3,513

1,823,119

168,529

1,991,648

296,942296,942

4,947

301,889493,750
93,592493,750
93,592

5,810
5,812

499,560
99,404

2,707,403

185,098

2,892,501

528
1,823,119

Total comprehensive income . . . . . . .
Dividends paid to Toyota Motor
Corporation shareholders . . . . . . . . . . . .
Dividends paid to noncontrollinginterests . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchase and reissuance of treasury
stock . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balances at March 31, 2014 . . . . . . . . . . . 397,050(396,030)(396,030)(260)
551,308

9,472
14,116,295

528,161(396,030)(63,065)(63,065)

749,839

15,218,987

9,212(1,123,666) 14,469,148

9,212

The accompanying notes are an integral part of these consolidated financial statements.
F-8

TOYOTA MOTOR CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS
Yen in millions
For the years ended March 31,
2012
2013
2014

Cash flows from operating activities
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to reconcile net income to net cash provided by operating
activities
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for doubtful accounts and credit losses . . . . . . . . . . . . . . . .
Pension and severance costs, less payments . . . . . . . . . . . . . . . . . . . .
Losses on disposal of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unrealized losses on available-for-sale securities, net . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in earnings of affiliated companies . . . . . . . . . . . . . . . . . . . . .
Changes in operating assets and liabilities, and other
Increase in accounts and notes receivable . . . . . . . . . . . . . . . . . .
(Increase) decrease in inventories . . . . . . . . . . . . . . . . . . . . . . . .
Increase in other current assets . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase (decrease) in accounts payable . . . . . . . . . . . . . . . . . . .
Increase in accrued income taxes . . . . . . . . . . . . . . . . . . . . . . . . .
Increase in other current liabilities . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by operating activities . . . . . . . . . . . . . .
Cash flows from investing activities
Additions to finance receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Collection of finance receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of finance receivables . . . . . . . . . . . . . . . . . . . . . . . . .
Additions to fixed assets excluding equipment leased to others . . . . . . . . .
Additions to equipment leased to others . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of fixed assets excluding equipment leased toothers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of equipment leased to others . . . . . . . . . . . . . . . . . . .
Purchases of marketable securities and security investments . . . . . . . . . . .
Proceeds from sales of marketable securities and security investments . . .
Proceeds upon maturity of marketable securities and security
investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payment for additional investments in affiliated companies, net of cash
acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in investments and other assets, and other . . . . . . . . . . . . . . . . . .
Net cash used in investing activities . . . . . . . . . . . . . . . . . .
Cash flows from financing activities
Proceeds from issuance of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase in short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid to Toyota Motor Corporation shareholders . . . . . . . . . . . .
Dividends paid to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . .
Reissuance (repurchase) of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by (used in) financing activities . . . . . . .
Effect of exchange rate changes on cash and cash equivalents . . . . . . . . . . . . . .
Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

368,302

1,083,482

1,991,648

1,067,830
9,623
16,711
33,52853,831
6,395(197,701)

1,105,109
27,367(20,429)
32,221
2,104
160,008(231,519)

1,250,853
49,71820,65428,657
6,197(56,279)(318,376)(585,464)(344,923)(180,529)
756,363
20,943
316,366
111,160
1,452,435(168,260)
50,483(47,033)(209,284)
22,127280,083
364,857
2,451,316(121,926)(110,819)(77,645)
65,312438,527
277,659
201,855
3,646,035(8,333,248) (10,004,928) (11,953,064)
8,007,711
9,063,011 10,990,546
53,99939,84534,807(723,537)(854,561)(970,021)(808,545) (1,119,591) (1,708,670)
36,63339,19139,191
431,313533,441
744,339(3,173,634) (3,412,423) (4,738,278)
162,160
35,178538,894
2,694,665

2,633,913(147)
16,216
6,603
209,972
3,396(101,028)(1,442,658) (3,027,312) (4,336,248)
2,394,807
3,191,223
3,890,310(2,867,572) (2,682,136) (2,988,923)
311,651
201,261
467,976(156,785)(190,008)(396,030)(37,356)(45,640)(63,065)
(92)
2,542
9,212
(355,347)
477,242
919,480(55,939)
137,851
93,606(401,509)
39,097
322,873
2,080,709
1,679,200
1,718,297
1,679,200
1,718,297
2,041,170

The accompanying notes are an integral part of these consolidated financial statements.
F-9

2,780,433

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Nature of operations:Toyota is primarily engaged in the design, manufacture, and sale of sedans, minivans, compact cars, sportutility vehicles, trucks and related parts and accessories throughout the world. In addition, Toyota provides
financing, vehicle and equipment leasing and certain other financial services primarily to its dealers and theircustomers to support the sales of vehicles and other products manufactured by Toyota.
2. Summary of significant accounting policies:
The parent company and its subsidiaries in Japan and its foreign subsidiaries maintain their records andprepare their financial statements in accordance with accounting principles generally accepted in Japan and thoseof their countries of domicile. Certain adjustments and reclassifications have been incorporated in theaccompanying consolidated financial statements to conform to U.S.GAAP.
Significant accounting policies after reflecting adjustments for the above are as follows:
Basis of consolidation and accounting for investments in affiliated companies The consolidated financial statements include the accounts of the parent company, its majority-owned
subsidiary companies and variable interest entities of which the parent company or its consolidated subsidiaries
are the primary beneficiary. All significant intercompany transactions and accounts have been eliminated.
Investments in affiliated companies in which Toyota exercises significant influence, but which it does notcontrol, are stated at cost plus equity in undistributed earnings. Consolidated net income includes Toyota’s equity
in current earnings of such companies, after elimination of unrealized intercompany profits. Investments in suchcompanies are reduced to net realizable value if a decline in market value is determined other-than-temporary.
Investments in non-public companies in which Toyota does not exercise significant influence (generally less than
a 20% ownership interest) are stated at cost.
Estimates The preparation of Toyota’s consolidated financial statements in conformity with U.S.GAAP requires
management to make estimates and assumptions that affect the amounts reported in the consolidated financial
statements and accompanying notes. Actual results could differ from those estimates. The more significant
estimates include: product warranties, liabilities accrued for recalls and other safety measures, allowance for
doubtful accounts and credit losses, residual values for leased assets, impairment of long-lived assets, pension
costs and obligations, fair value of derivative financial instruments, other-than-temporary losses on marketablesecurities, litigation liabilities and valuation allowance for deferred tax assets.
Translation of foreign currencies All asset and liability accounts of foreign subsidiaries and affiliated companies are translated into Japanese
yen at appropriate year-end current exchange rates and all income and expense accounts of those subsidiaries aretranslated at the average exchange rates for each period. The foreign currency translation adjustments areincluded as a component of accumulated other comprehensive income.
Foreign currency receivables and payables are translated at appropriate year-end current exchange rates andthe resulting transaction gains or losses are recorded in operations currently.

F-10

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Revenue recognition Revenues from sales of vehicles and parts are generally recognized upon delivery which is considered tohave occurred when the dealer has taken title to the product and the risk and reward of ownership have been
substantively transferred, except as described below.
Toyota’s sales incentive programs principally consist of cash payments to dealers calculated based on
vehicle volume or a model sold by a dealer during a certain period of time. Toyota accrues these incentives asrevenue reductions upon the sale of a vehicle corresponding to the program by the amount determined in therelated incentive program.
Revenues from the sales of vehicles under which Toyota conditionally guarantees the minimum resale value
are recognized on a pro rata basis from the date of sale to the first exercise date of the guarantee in a manner
similar to operating lease accounting. The underlying vehicles of these transactions are recorded as assets and are
depreciated in accordance with Toyota’s depreciation policy.
Revenues from retail financing contracts and finance leases are recognized using the effective yield method.
Revenues from operating leases are recognized on a straight-line basis over the lease term.
The sale of certain vehicles includes a determinable amount for the contract, which entitles customers tofree vehicle maintenance. Such revenues from free maintenance contracts are deferred and recognized as revenue
over the period of the contract, which approximates the pattern of the related costs.
Other costs Advertising and sales promotion costs are expensed as incurred. Advertising costs were ¥304,713 million,¥330,870 million and ¥419,409 million for the years ended March 31, 2012, 2013 and 2014, respectively.
Toyota generally warrants its products against certain manufacturing and other defects. Provisions for
product warranties are provided for specific periods of time and/or usage of the product and vary depending upon
the nature of the product, the geographic location of the sale and other factors. Toyota records a provision for
estimated product warranty costs at the time the related sale is recognized based on estimates that Toyota will
incur to repair or replace product parts that fail while under warranty. The amount of accrued estimated warranty
costs is primarily based on historical experience as to product failures as well as current information on repair
costs. The amount of warranty costs accrued also contains an estimate of warranty claim recoveries to bereceived from suppliers.
In addition to product warranties above, Toyota accrues for costs of recalls and other safety measures basedon management’s estimates when it is probable a liability has been incurred and the amount of loss can bereasonably estimated. Toyota employs an estimation model, to accrue at the time of vehicle sale, an amount that
represents management’s best estimate of expenses related to future recalls and other safety measures. The
estimation model for recalls and other safety measures takes into account Toyota’s historical experience ofrecalls and other safety measures.
Litigation liabilities are established to cover probable losses on various lawsuits based on the information
currently available. Attorneys’ fees are expensed as incurred.
Research and development costs are expensed as incurred. Research and development costs were¥779,806 million, ¥807,454 million and ¥910,517 million for the years ended March 31, 2012, 2013 and 2014,
respectively.
F-11

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Cash and cash equivalents Cash and cash equivalents include all highly liquid investments with original maturities of three months or
less, that are readily convertible to known amounts of cash and are so near maturity that they present
insignificant risk of changes in value because of changes in interest rates.
Marketable securities Marketable securities consist of debt and equity securities. Debt and equity securities designated asavailable-for-sale are carried at fair value with unrealized gains or losses included as a component ofaccumulated other comprehensive income in shareholders’ equity, net of applicable taxes. Individual securities
classified as available-for-sale are reduced to net realizable value for other-than-temporary declines in market
value. In determining if a decline in value is other-than-temporary, Toyota considers the length of time and theextent to which the fair value has been less than the carrying value, the financial condition and prospects of thecompany and Toyota’s ability and intent to retain its investment in the company for a period of time sufficient toallow for any anticipated recovery in market value. Realized gains and losses, which are determined on the
average-cost method, are reflected in the consolidated statements of income when realized.
Security investments in non-public companies Security investments in non-public companies are carried at cost as fair value is not readily determinable. If
the value of a non-public security investment is estimated to have declined and such decline is judged to beother-than-temporary, Toyota recognizes the impairment of the investment and the carrying value is reduced toits fair value. Determination of impairment is based on the consideration of such factors as operating results,business plans and estimated future cash flows. Fair value is determined principally through the use of the latest
financial information.
Finance receivables Finance receivables recorded on Toyota’s consolidated balance sheets are comprised of the unpaid principalbalance, plus accrued interest, less charge-offs, net of any unearned income and deferred origination costs andthe allowance for credit losses. Deferred origination costs are amortized so as to approximate a level rate of
return over the term of the related contracts.
The determination of portfolio segments is based primarily on the qualitative consideration of the nature of
Toyota’s business operations and finance receivables. The three portfolio segments within finance receivables are
as follows:
Retail receivables portfolio segment The retail receivables portfolio segment consists of retail installment sales contracts acquired mainly fromdealers (“auto loans”) including credit card loans. These contracts acquired must first meet specified credit
standards. Thereafter, Toyota retains responsibility for contract collection and administration.
The contract periods of auto loans primarily range from 2 to 7 years. Toyota acquires security interests inthe vehicles financed and has the right to repossess vehicles if customers fail to meet their contractual
obligations. Almost all auto loans are non-recourse, which relieves the dealers from financial responsibility in theevent of repossession.

F-12

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Toyota classifies retail receivables portfolio segment into one class based on common risk characteristics
associated with the underlying finance receivables, the similarity of the credit risks, and the quantitative
materiality.
Finance lease receivables portfolio segment Toyota acquires new vehicle lease contracts originated primarily through dealers. The contract periods ofthese primarily range from 2 to 5 years. Lease contracts acquired must first meet specified credit standards after
which Toyota assumes ownership of the leased vehicle. Toyota is responsible for contract collection andadministration during the lease period.
Toyota is generally permitted to take possession of the vehicle upon a default by the lessee. The residual
value is estimated at the time the vehicle is first leased. Vehicles returned to Toyota at the end of their leases are
sold by auction.
Toyota classifies finance lease receivables portfolio segment into one class based on common risk
characteristics associated with the underlying finance receivables and the similarity of the credit risks.
Wholesale and other dealer loan receivables portfolio segment Toyota provides wholesale financing to qualified dealers to finance inventories. Toyota acquires security
interests in vehicles financed at wholesale. In cases where additional security interests would be required, Toyota
takes dealership assets or personal assets, or both, as additional security. If a dealer defaults, Toyota has the rightto liquidate any assets acquired and seek legal remedies.
Toyota also makes term loans to dealers for business acquisitions, facilities refurbishment, real estatepurchases and working capital requirements. These loans are typically secured with liens on real estate, otherdealership assets and/or personal assets of the dealers.
Toyota classifies wholesale and other dealer loan receivables portfolio segment into three classes ofwholesale, real estate and working capital, based on the risk characteristics associated with the underlying
finance receivables.
A receivable account balance is considered impaired when, based on current information and events, it isprobable that Toyota will be unable to collect all amounts due according to the terms of the contract. Factors suchas payment history, compliance with terms and conditions of the underlying loan agreement and other subjective
factors related to the financial stability of the borrower are considered when determining whether a loan is
impaired. Impaired finance receivables include certain nonaccrual receivables for which a specific reserve has
been assessed. An account modified as a troubled debt restructuring is considered to be impaired. A troubled debt
restructuring occurs when an account is modified through a concession to a borrower experiencing financial
difficulty.
All classes of wholesale and other dealer loan receivables portfolio segment are placed on nonaccrual statuswhen full payment of principal or interest is in doubt, or when principal or interest is 90 days or more
contractually past due, whichever occurs first. Collateral dependent loans are placed on nonaccrual status if
collateral is insufficient to cover principal and interest. Interest accrued but not collected at the date a receivable
is placed on nonaccrual status is reversed against interest income. In addition, the amortization of net deferredfees is suspended.
F-13

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Interest income on nonaccrual receivables is recognized only to the extent it is received in cash. Accounts
are restored to accrual status only when interest and principal payments are brought current and future payments
are reasonably assured. Receivable balances are written-off against the allowance for credit losses when it isprobable that a loss has been realized. Retail receivables class and finance lease receivables class are not placed
generally on nonaccrual status when principal or interest is 90 days or more past due. However, these receivables
are generally written-off against the allowance for credit losses when payments due are no longer expected to bereceived or the account is 120 days contractually past due, whichever occurs first.
As of March 31, 2013 and 2014, finance receivables on nonaccrual status are as follows:
Yen in millions
March 31,
2013
2014

Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Working capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,443
1,135
1,985
4,354
70

5,962
780
1,406
4,035
46

11,987

12,229As of March 31, 2013 and 2014, finance receivables 90 days or more past due and accruing are as follows:
Yen in millions
March 31,
2013
2014

Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18,442
3,464

23,352
3,504

21,906

26,856

Allowance for credit losses Allowance for credit losses is established to cover probable losses on finance receivables and vehicles andequipment on operating leases, resulting from the inability of customers to make required payments. Provision
for credit losses is included in selling, general and administrative expenses.
The allowance for credit losses is based on a systematic, ongoing review and evaluation performed as partof the credit-risk evaluation process, historical loss experience, the size and composition of the portfolios, current
economic events and conditions, the estimated fair value and adequacy of collateral and other pertinent factors.
Vehicles and equipment on operating leases are not within the scope of accounting guidance governing thedisclosure of portfolio segments.
Retail receivables portfolio segment Toyota calculates allowance for credit losses to cover probable losses on retail receivables by applying
reserve rates to such receivables. Reserve rates are calculated mainly by historical loss experience, current
economic events and conditions and other pertinent factors.
F-14

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Finance lease receivables portfolio segment Toyota calculates allowance for credit losses to cover probable losses on finance lease receivables byapplying reserve rates to such receivables. Reserve rates are calculated mainly by historical loss experience,current economic events and conditions and other pertinent factors such as used car markets.
Wholesale and other dealer loan receivables portfolio segment Toyota calculates allowance for credit losses to cover probable losses on wholesale and other dealer loan
receivables by applying reserve rates to such receivables. Reserve rates are calculated mainly by financial
conditions of the dealers, terms of collateral setting, current economic events and conditions and other pertinent
factors.
Toyota establishes specific reserves to cover the estimated losses on individually impaired receivables
within the wholesale and other dealer loan receivables portfolio segment. Specific reserves on impaired
receivables are determined by the present value of expected future cash flows or the fair value of collateral when
it is probable that such receivables will be unable to be fully collected. The fair value of the underlying collateralis used if the receivable is collateral-dependent. The receivable is determined collateral-dependent if therepayment of the loan is expected to be provided by the underlying collateral. For the receivables in which thefair value of the underlying collateral was in excess of the outstanding balance, no allowance was provided.
Troubled debt restructurings in the retail receivables and finance lease receivables portfolio segments are
specifically identified as impaired and aggregated with their respective portfolio segments when determining theallowance for credit losses. Impaired loans in the retail receivables and finance lease receivables portfolio
segments are insignificant for individual evaluation and Toyota has determined that allowance for credit losses
for each of the retail receivables and finance lease receivables portfolio segments would not be materiallydifferent if they had been individually evaluated for impairment.
Specific reserves on impaired receivables within the wholesale and other dealer loan receivables portfolio
segment are recorded by an increase to the allowance for credit losses based on the related measurement of
impairment. Related collateral, if recoverable, is repossessed and sold and the account balance is written-off.
Any shortfall between proceeds received and the carrying cost of repossessed collateral is charged to theallowance. Recoveries are reversed from the allowance for credit losses.
Allowance for residual value losses Toyota is exposed to risk of loss on the disposition of off-lease vehicles to the extent that sales proceeds are
not sufficient to cover the carrying value of the leased asset at lease termination. Toyota maintains an allowanceto cover probable estimated losses related to unguaranteed residual values on its owned portfolio. The allowanceis evaluated considering projected vehicle return rates and projected loss severity. Factors considered in thedetermination of projected return rates and loss severity include historical and market information on used
vehicle sales, trends in lease returns and new car markets, and general economic conditions. Management
evaluates the foregoing factors, develops several potential loss scenarios, and reviews allowance levels todetermine whether reserves are considered adequate to cover the probable range of losses.
The allowance for residual value losses is maintained in amounts considered by Toyota to be appropriate inrelation to the estimated losses on its owned portfolio. Upon disposal of the assets, the allowance for residual
losses is adjusted for the difference between the net book value and the proceeds from sale.
F-15

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Inventories Inventories are valued at cost, not in excess of market, cost being determined on the “average-cost” basis,
except for the cost of finished products carried by certain subsidiary companies which is determined on the“specific identification” basis or “last-in, first-out” (“LIFO”) basis. Inventories valued on the LIFO basis totaled¥220,082 million and ¥323,249 million at March 31, 2013 and 2014, respectively. Had the “first-in, first-out”
basis been used for those companies using the LIFO basis, inventories would have been ¥66,979 million and¥46,244 million higher than reported at March 31, 2013 and 2014, respectively.
Property, plant and equipment Property, plant and equipment are stated at cost. Major renewals and improvements are capitalized; minor
replacements, maintenance and repairs are charged to current operations. Depreciation of property, plant andequipment is mainly computed on the declining-balance method for the parent company and Japanesesubsidiaries and on the straight-line method for foreign subsidiary companies at rates based on estimated useful
lives of the respective assets according to general class, type of construction and use. The estimated useful lives
range from 2 to 65 years for buildings and from 2 to 20 years for machinery and equipment.
Vehicles and equipment on operating leases to third parties are originated by dealers and acquired by certain
consolidated subsidiaries. Such subsidiaries are also the lessors of certain property that they acquire directly.
Vehicles and equipment on operating leases are depreciated primarily on a straight-line method over the leaseterm, generally from 2 to 5 years, to the estimated residual value. Incremental direct costs incurred in connection
with the acquisition of operating lease contracts are capitalized and amortized on a straight-line method over thelease term.
Long-lived assets Toyota reviews its long-lived assets for impairment whenever events or changes in circumstances indicatethat the carrying amount of an asset group may not be recoverable. An impairment loss would be recognizedwhen the carrying amount of an asset group exceeds the estimated undiscounted cash flows expected to result
from the use of the asset and its eventual disposition. The amount of the impairment loss to be recorded is
calculated by the excess of the carrying value of the asset group over its fair value. Fair value is determined
mainly using a discounted cash flow valuation method.
Goodwill and intangible assets Goodwill is not material to Toyota’s consolidated balance sheets.
Intangible assets consist mainly of software. Intangible assets with a definite life are amortized on a straightline basis with estimated useful lives mainly of 5 years. Intangible assets with an indefinite life are tested for
impairment whenever events or circumstances indicate that a carrying amount of an asset (asset group) may not
be recoverable.
An impairment loss would be recognized when the carrying amount of an asset exceeds the estimatedundiscounted cash flows used in determining the fair value of the asset. The amount of the impairment loss to berecorded is generally determined by the difference between the fair value of the asset using a discounted cash
flow valuation method and the current book value.
Employee benefit obligations Toyota has both defined benefit and defined contribution plans for employees’ retirement benefits.
Retirement benefit obligations are measured by actuarial calculations in accordance with U.S.GAAP. The funded
F-16

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
status of the defined benefit postretirement plans is recognized on the consolidated balance sheets as prepaid
pension and severance costs or accrued pension and severance costs, and the funded status change is recognizedin the year in which it occurs through other comprehensive income.
Environmental matters Environmental expenditures relating to current operations are expensed or capitalized as appropriate.
Expenditures relating to existing conditions caused by past operations, which do not contribute to current or
future revenues, are expensed. Liabilities for remediation costs are recorded when they are probable andreasonably estimable, generally no later than the completion of feasibility studies or Toyota’s commitment to aplan of action. The cost of each environmental liability is estimated by using current technology available andvarious engineering, financial and legal specialists within Toyota based on current law. Such liabilities do notreflect any offset for possible recoveries from insurance companies and are not discounted. There were nomaterial changes in these liabilities for all periods presented.
Income taxes The provision for income taxes is computed based on the pretax income included in the consolidated
statements of income. The asset and liability approach is used to recognize deferred tax assets and liabilities forthe expected future tax consequences of temporary differences between the carrying amounts and the tax bases ofassets and liabilities. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than
not that a tax benefit will not be realized.
Derivative financial instruments Toyota employs derivative financial instruments, including forward foreign currency exchange contracts,
foreign currency options, interest rate swaps, interest rate currency swap agreements and interest rate options tomanage its exposure to fluctuations in interest rates and foreign currency exchange rates. All derivative financial
instruments are recorded on the consolidated balance sheets at fair value, taking into consideration the effects oflegally enforceable master netting agreements that allow us to net settle positive and negative positions and offset
cash collateral held with the same counterparty on a net basis. Toyota does not use derivatives for speculation or
trading purposes. Changes in the fair value of derivatives are recorded each period in current earnings or throughother comprehensive income, depending on whether a derivative is designated as part of a hedge transaction andthe type of hedge transaction. The ineffective portion of all hedges is recognized currently in operations.
Net income attributable to Toyota Motor Corporation per share Basic net income attributable to Toyota Motor Corporation per common share is calculated by dividing net
income attributable to Toyota Motor Corporation by the weighted-average number of shares outstanding during
the reported period. The calculation of diluted net income attributable to Toyota Motor Corporation per commonshare is similar to the calculation of basic net income attributable to Toyota Motor Corporation per share, exceptthat the weighted-average number of shares outstanding includes the additional dilution from the assumed
exercise of dilutive stock options.
Stock-based compensation Toyota measures compensation expense for its stock-based compensation plan based on the grant-date fairvalue of the award, and accounts for the award.
F-17

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Other comprehensive income Other comprehensive income refers to revenues, expenses, gains and losses that, under U.S.GAAP are
included in comprehensive income, but are excluded from net income as these amounts are recorded directly as
an adjustment to shareholders’ equity. Toyota’s other comprehensive income is primarily comprised of
unrealized gains/losses on marketable securities designated as available-for-sale, foreign currency translation
adjustments and adjustments attributed to pension liabilities associated with Toyota’s defined benefit pension
plans.
Accounting changes In December 2011, the FASB issued updated guidance of disclosures about offsetting assets and liabilities.
This guidance requires additional disclosures about gross and net information for assets and liabilities including
financial instruments eligible for offset in the balance sheets. Toyota adopted this guidance from the interim
period within the fiscal year, begun on or after January 1, 2013. The adoption of this guidance did not have amaterial impact on Toyota’s consolidated financial statements.
In February 2013, the FASB issued updated guidance on the presentation of items reclassified out ofaccumulated other comprehensive income. This guidance requires to present, either in a single note orparenthetically on the face of the financial statements, the effect of significant amounts reclassified out of eachcomponent of accumulated other comprehensive income based on its source. Toyota adopted this guidance fromthe interim period within the fiscal year, begun after December 15, 2012. The adoption of this guidance did nothave a material impact on Toyota’s consolidated financial statements.
In July 2013, the FASB issued updated guidance which permits the Fed Funds Effective Swap Rate (orOvernight Index Swap Rate) to be used as a benchmark interest rate for hedge accounting purposes. This
guidance also removes the restriction on using different benchmark rates for similar hedges. Toyota adopted thisguidance for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013. The
adoption of this guidance did not have a material impact on Toyota’s consolidated financial statements.
Recent pronouncements to be adopted in future periods In July 2013, the FASB issued updated guidance on uncertain tax positions. This guidance requires anunrecognized tax benefit, or a portion of an unrecognized tax benefit, to be presented in the financial statements
as a reduction to a deferred tax asset for a net operating loss carryforward for tax purposes, a similar tax loss, or a
tax credit carryforward. This guidance is effective for fiscal years, and interim periods within those years,
beginning after December 15, 2013. Management does not expect this guidance to have a material impact on
Toyota’s consolidated financial statements.
In May 2014, the FASB issued updated guidance on the recognition of revenue from contracts withcustomers. This guidance will supersede the current revenue recognition guidance. This guidance is effective forannual reporting periods beginning after December 15, 2016, including interim periods within that reporting
period. Management is evaluating the impact of adopting this guidance on Toyota’s consolidated financial
statements.
Reclassifications Certain prior year amounts have been reclassified to conform to the presentations as of and for the year
ended March 31, 2014.
F-18

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
3. Supplemental cash flow information:
Cash payments for income taxes were ¥282,440 million, ¥331,007 million and ¥411,133 million for theyears ended March 31, 2012, 2013 and 2014, respectively. Interest payments during the years ended March 31,
2012, 2013 and 2014 were ¥365,109 million, ¥325,575 million and ¥352,590 million, respectively.
Capital lease obligations of ¥5,847 million, ¥3,749 million and ¥3,422 million were incurred for the years
ended March 31, 2012, 2013 and 2014, respectively.
4. Acquisitions and dispositions:
During the years ended March 31, 2012, 2013 and 2014, Toyota made several acquisitions and dispositions,however the assets and liabilities acquired or transferred were not material.
5. Marketable securities and other securities investments:
Marketable securities and other securities investments include public and corporate bonds and common
stocks for which the aggregate cost, gross unrealized gains and losses and fair value are as follows:

Cost

Yen in millions
March 31, 2013
Gross
Gross
unrealized
unrealized
gains
lossesFair
value

Available-for-sale
Public and corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . 4,350,942
Common stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
599,371
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
537,272

211,070
804,405
31,416

8,866
2,593
2

4,553,146
1,401,183
568,686

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,487,585

1,046,891

11,461

6,523,015

Securities not practicable to determine fair value
Public and corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20,14879,082

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

99,230Cost

Yen in millions
March 31, 2014
Gross
Gross
unrealized
unrealized
gains
lossesFair
value

Available-for-sale
Public and corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . 5,879,336
Common stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
619,811
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
538,306

290,964
1,377,653
34,076

5,377
268
49

6,164,923
1,997,196
572,333

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,037,453

1,702,693

5,694

8,734,452

Securities not practicable to determine fair value
Public and corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

433
77,035

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

77,468Public and corporate bonds included in available-for-sale represent 49% of Japanese bonds, and 51% of
U.S., European and other bonds as of March 31, 2013, and 50% of Japanese bonds, and 50% of U.S., European
F-19

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
and other bonds as of March 31, 2014. Listed stocks on the Japanese stock markets represent 85% and 86% ofcommon stocks which are included in available-for-sale as of March 31, 2013 and 2014, respectively. Public andcorporate bonds include primarily government bonds, and “Other” includes primarily investment trusts.
Unrealized losses continuing over a 12 month period or more in the aggregate were not material at
March 31, 2013 and 2014.
As of March 31, 2013 and 2014, maturities of public and corporate bonds and other included in availablefor-sale are mainly from 1 to 10 years.
Proceeds from sales of available-for-sale securities were ¥162,160 million, ¥35,178 million and¥538,894 million for the years ended March 31, 2012, 2013 and 2014, respectively. On those sales, gross realized
gains were ¥4,822 million, ¥1,048 million and ¥25,099 million and gross realized losses were ¥15 million,¥31 million and ¥404 million, respectively.
During the years ended March 31, 2012, 2013 and 2014, Toyota recognized impairment losses on availablefor-sale securities of ¥53,831 million, ¥2,104 million and ¥6,197 million, respectively, which are included in“Other income (loss), net” and other in the accompanying consolidated statements of income.
In the ordinary course of business, Toyota maintains long-term investment securities, included in“Marketable securities and other securities investments” and issued by a number of non-public companies which
are recorded at cost, as their fair values were not readily determinable. Management employs a systematic
methodology to assess the recoverability of such investments by reviewing the financial viability of theunderlying companies and the prevailing market conditions in which these companies operate to determine if
Toyota’s investment in each individual company is impaired and whether the impairment isother-than-temporary. Toyota periodically performs this impairment test for significant investments recorded atcost. If the impairment is determined to be other-than-temporary, the carrying value of the investment is writtendown by the impaired amount and the losses are recognized currently in operations.
6. Finance receivables:
Finance receivables consist of the following:
Yen in millions
March 31,
2013
2014

Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and other dealer loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred origination costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unearned income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for credit losses
Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and other dealer loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total allowance for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total finance receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less - Current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncurrent finance receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-20

9,047,782
1,029,887
2,615,728

10,523,364
1,071,179
2,875,650

12,693,397 14,470,193
135,398
161,956(628,340)(754,539)(83,858)(28,928)(26,243)(89,439)(30,585)(26,358)(139,029)(146,382)

12,061,426 13,731,228(5,117,660) (5,628,934)
6,943,766

8,102,294

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Finance receivables were geographically distributed as follows: in North America 57.6%, in Europe 10.0%,
in Japan 9.9%, in Asia 9.5% and in Other 13.0% as of March 31, 2013, and in North America 57.1%, in Asia
11.4%, in Europe 10.8%, in Japan 8.9% and in Other 11.8% as of March 31, 2014.
The contractual maturities of retail receivables, the future minimum lease payments on finance leases andthe contractual maturities of wholesale and other dealer loans at March 31, 2014 are summarized as follows:
Yen in millions

RetailFinanceleasesWholesaleand other
dealer loans

3,504,299
2,564,973
2,006,001
1,331,172
729,361
387,558

293,305
208,337
155,049
90,51826,4388,089

2,122,078
213,961
181,513
142,485
123,937
91,676

10,523,364

781,736

2,875,650

Years ending March 31,

2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Finance leases consist of the following:
Yen in millions
March 31,
2013
2014

Minimum lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Estimated unguaranteed residual values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred origination costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less - Unearned income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less - Allowance for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

742,871
287,016

781,736
289,443

1,029,887 1,071,179
3,577
4,592
(87,537)(89,627)(28,928)(30,585)

Finance leases, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

916,999

955,559

Toyota is exposed to credit risk on Toyota’s finance receivables. Credit risk is the risk of loss arising fromthe failure of customers or dealers to meet the terms of their contracts with Toyota or otherwise fail to perform asagreed. Toyota estimates allowance for credit losses by variety of credit-risk evaluation process to cover probableand estimable losses above.
The table below shows the amount of the finance receivables segregated into aging categories based on thenumber of days outstanding as of March 31, 2013 and 2014:
Yen in millions
March 31, 2013
RetailCurrent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,923,588
30-59 days past due . . . . . . . . . . . . . . . . . . . . . . . . . . .
84,35460-89 days past due . . . . . . . . . . . . . . . . . . . . . . . . . . .
17,31290 days or greater past due . . . . . . . . . . . . . . . . . . . . .
22,528
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9,047,782
F-21

FinanceleasesWholesale

Real estate

Working
capital

1,021,074
3,106
1,661
4,046

1,305,953
45——

658,11463——

651,553———

1,029,887

1,305,998

658,177

651,553

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Yen in millions
March 31, 2014
RetailCurrent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,366,261
30-59 days past due . . . . . . . . . . . . . . . . . . . . . . . . . .
105,056
60-89 days past due . . . . . . . . . . . . . . . . . . . . . . . . . .
22,82490 days or greater past due . . . . . . . . . . . . . . . . . . . .
29,223
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10,523,364

FinanceleasesWholesale

Real estate

Working
capital1,062,194
3,396
1,490
4,099

1,434,534
8—
20739,659525
70—

700,819——15

1,071,179

1,434,562

740,254

700,834

The tables below show the recorded investment for each credit quality of the finance receivable within thewholesale and other dealer loan receivables portfolio segment in the United States and other regions as ofMarch 31, 2013 and 2014:
United States
The wholesale and other dealer loan receivables portfolio segment is primarily segregated into credit
qualities below based on internal risk assessments by dealers.
Performing: Account not classified as either Credit Watch, At Risk or Default
Credit Watch: Account designated for elevated attention
At Risk: Account where there is an increased likelihood that default may exist based on qualitative andquantitative factors
Default: Account is not currently meeting contractual obligations or we have temporarily waived certain
contractual requirements

Wholesale

Yen in millions
March 31, 2013
Real estate Working capital

Performing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit Watch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
At Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

720,308
93,643
3,114
106

373,176
54,8012,651
131

152,048
7,485
2,641
193

1,245,532
155,9298,406
430

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

817,171430,759

162,367

1,410,297

Wholesale

Yen in millions
March 31, 2014
Real estate Working capital

Performing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit Watch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
At Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

836,703
131,934
2,441
58

390,218
88,032
1,247—

169,027
16,233
2,556
616

1,395,948
236,199
6,244
674

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

971,136

479,497

188,432

1,639,065

F-22

Total

Total

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Other regions
Credit qualities of the wholesale and other dealer loan receivables portfolio segment in other regions arealso monitored based on internal risk assessments by dealers on a consistent basis as in the United States. These
accounts classified as “Credit Watch” or “At Risk” were not significant in other regions, and consequently thetables below summarize information for two categories, “Performing” and “Default”.

Wholesale

Yen in millions
March 31, 2013
Real estate Working capital

Performing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

485,464
3,363

225,808
1,610

488,679507

1,199,951
5,480

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

488,827

227,418

489,186

1,205,431

Wholesale

Yen in millions
March 31, 2014
Real estate Working capital

Performing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

460,946
2,480

259,056
1,701

511,855547

1,231,857
4,728

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

463,426

260,757

512,402

1,236,585

F-23

Total

Total

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The tables below summarize information about impaired finance receivables:
Recorded investment
March 31,
2013
2014

Yen in millions
Unpaid principal balance
March 31,
2013
2014

Individually evaluated allowance
March 31,
2013
2014

Impaired account balances individually evaluated for impairment with an allowance:
Wholesale . . . . . . . . . . . . .
11,967
4,745
11,9674,745
1,450
Real estate . . . . . . . . . . . . .
6,726
4,476
6,726
4,476
1,721
Working capital . . . . . . . . .
5,246
2,977
5,246
2,977
3,691
Total . . . . . . . . . . . . . .

23,93912,19823,93912,198

6,862

483
1,421
2,720
4,624

Impaired account balances individually evaluated for impairment without an allowance:
Wholesale . . . . . . . . . . . . .
6,236
5,217
6,236
5,217
Real estate . . . . . . . . . . . . .
9,165
9,257
9,165
9,257
Working capital . . . . . . . . .
496
384
496
384
Total . . . . . . . . . . . . . .

15,897

14,85815,897

14,858

Impaired account balances aggregated and evaluated for impairment:
Retail . . . . . . . . . . . . . . . . .
40,487
34,17939,79733,661
Finance leases . . . . . . . . . .
103
177
85
168
Total . . . . . . . . . . . . . .

40,59034,35639,88233,829Total impaired account balances:
Retail . . . . . . . . . . . . . . . . .
40,487
Finance leases . . . . . . . . . .
103
Wholesale . . . . . . . . . . . . .
18,203
Real estate . . . . . . . . . . . . .
15,891
Working capital . . . . . . . . .
5,742

34,179177
9,962
13,733
3,361

39,79785
18,203
15,891
5,742

33,661
168
9,962
13,733
3,361

Total . . . . . . . . . . . . . .

61,412

79,71860,88580,426

Yen in millions
Average impaired
Interest income
finance receivables
recognized
For the years ended March 31,
For the years ended March 31,
2013
2014
2013
2014

Total impaired account balances:
Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance leases . . . . . . . . . . . . . . . . . . . . . . .
Wholesale . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . .
Working capital . . . . . . . . . . . . . . . . . . . . . .

39,616
161
20,61815,574
3,820

37,997175
14,464
15,201
4,591

3,056
1
166
415
83

2,760
6
100
501
200

Total . . . . . . . . . . . . . . . . . . . . . . . . . .

79,78972,428

3,721

3,567

The amount of finance receivables modified as a troubled debt restructuring for the year ended March 31,
2014 was not significant for all classes of finance receivables. Finance receivables modified as troubled debt
restructurings for the year ended March 31, 2014 and for which there was a payment default were not significant
for all classes of such receivables.
F-24

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
7. Other receivables:
Other receivables relate to arrangements with certain component manufacturers whereby Toyota procuresinventory for these component manufactures and is reimbursed for the related purchases.
8. Inventories:
Inventories consist of the following:
Yen in millions
March 31,
2013
2014

Finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,007,659
Raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
388,780
Work in process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
235,476
Supplies and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
83,871
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,715,786

1,159,762
384,635
258,133
92,174
1,894,704

9. Vehicles and equipment on operating leases:
Vehicles and equipment on operating leases consist of the following:
Yen in millions
March 31,
2013
2014

Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,999,294 3,674,969
Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
104,351
129,029
Less - Deferred income and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(65,634)(94,438)
Less - Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less - Allowance for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vehicles and equipment on operating leases, net . . . . . . . . . . . . . . . . . . . . . . . . . .

3,038,011 3,709,560(749,238) (808,764)(8,020)(7,220)2,280,753

2,893,576

Rental income from vehicles and equipment on operating leases was ¥451,361 million, ¥476,935 millionand ¥586,983 million for the years ended March 31, 2012, 2013 and 2014, respectively. Future minimum rentals
from vehicles and equipment on operating leases are due in installments as follows:
Years ending March 31,

Yen in millions

2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

554,040
376,440
159,20742,394
11,535
7,530

Total minimum future rentals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,151,146

The future minimum rentals as shown above should not be considered indicative of future cash collections.
F-25

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
10. Allowance for doubtful accounts and credit losses:
The net changes in the allowance for doubtful accounts relating to trade accounts and notes receivable forthe years ended March 31, 2012, 2013 and 2014 are as follows:
Yen in millions
For the years ended March 31,
2012
2013
2014

Allowance for doubtful accounts at beginning of year . . . . . . . . . . . . . . . . . . .
Provision for doubtful accounts, net of reversal . . . . . . . . . . . . . . . . . . . . . . . .
Write-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

44,047
5,843(699)(5,094)44,097
1,745
(457)
759

46,144
3,405(1,162)(869)

Allowance for doubtful accounts at end of year . . . . . . . . . . . . . . . . . . . .

44,097

46,14447,518The other amount includes the impact of consolidation and deconsolidation of certain entities due tochanges in ownership interest and currency translation adjustments for the years ended March 31, 2012, 2013 and2014.
A portion of the allowance for doubtful accounts balance at March 31, 2013 and 2014 totaling¥30,269 million and ¥28,738 million, respectively, is attributed to certain non-current receivable balances which
are reported as other assets in the consolidated balance sheets.
The net changes in the allowance for credit losses relating to finance receivables and vehicles andequipment on operating leases for the years ended March 31, 2012, 2013 and 2014 are as follows:
Yen in millions
For the years ended March 31,
2012
2013
2014

Allowance for credit losses at beginning of year . . . . . . . . . . . . . . . . . . . . . . . .
Provision for credit losses, net of reversal . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recoveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

167,615
3,780(51,578)
16,415
4,131

140,363
25,622(56,701)
14,69023,075147,049
46,313(65,359)
16,662
8,937

Allowance for credit losses at end of year . . . . . . . . . . . . . . . . . . . . . . . . .

140,363

147,049

153,602

The other amount primarily includes the impact of currency translation adjustments for the years ended
March 31, 2012, 2013 and 2014.

F-26

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The net changes in the allowance for credit losses above relating to retail receivables portfolio segment,
finance lease receivables portfolio segment and wholesale and other dealer loan receivables portfolio segment for
the years ended March 31, 2012, 2013 and 2014 are as follows:
Yen in millions
For the year ended March 31, 2012
Wholesale andRetailFinance leases Other dealer loans

Allowance for credit losses at beginning of year . . . . . . . . . . . . . . . . . . 92,199
Provision for credit losses, net of reversal . . . . . . . . . . . . . . . . . . . . . . . 13,569
Charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (44,742)
Recoveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,051
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,276
Allowance for credit losses at end of year . . . . . . . . . . . . . . . . . . .

77,35336,024(4,508)(2,499)718
902

28,580(4,767)
(305)
16
714

30,637

24,238

Yen in millions
For the year ended March 31, 2013
Wholesale andRetailFinance leases Other dealer loans

Allowance for credit losses at beginning of year . . . . . . . . . . . . . . . . . . 77,353
Provision for credit losses, net of reversal . . . . . . . . . . . . . . . . . . . . . . . 29,079
Charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (48,528)
Recoveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,795
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,159
Allowance for credit losses at end of year . . . . . . . . . . . . . . . . . . .

83,85830,637(4,063)(2,775)590
4,539

24,238(2,006)
(110)
3
4,118

28,92826,243

Yen in millions
For the year ended March 31, 2014
Wholesale andRetailFinance leases Other dealer loans

Allowance for credit losses at beginning of year . . . . . . . . . . . . . . . . . . 83,858
Provision for credit losses, net of reversal . . . . . . . . . . . . . . . . . . . . . . . 42,055
Charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (55,733)
Recoveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,051
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,208
Allowance for credit losses at end of year . . . . . . . . . . . . . . . . . . .

F-27

89,43928,9281,847(2,554)587
1,777

26,243
(807)
(626)
16
1,532

30,58526,358TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
11. Affiliated companies and variable interest entities:
Investments in and transactions with affiliated companies Summarized financial information for affiliated companies accounted for by the equity method is shown
below:
Yen in millions
March 31,
2013
2014

Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncurrent assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9,634,769
8,495,078

10,813,254
10,172,524

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18,129,847

20,985,778

Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term liabilities and noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Affiliated companies accounted for by the equity method shareholders’ equity . . . . . .

6,366,002
4,541,328
7,222,517

7,120,877
5,217,723
8,647,178

Total liabilities and shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18,129,847

20,985,778

Toyota’s share of affiliated companies accounted for by the equity method
shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,102,584

2,429,576

Number of affiliated companies accounted for by the equity method at end of
period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

56

54

Yen in millions
For the years ended March 31,
2012
2013
2014

Net revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22,211,233

24,242,046

28,289,687

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,297,660

2,620,892

3,385,048

Net income attributable to affiliated companies accounted for by theequity method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

554,983

705,249

963,003

Equity in earnings of affiliated companies attributable to Toyota Motor
Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

197,701

231,519

318,376

Entities comprising a significant portion of Toyota’s investment in affiliated companies and percentage ofownership are presented below:
Percentage of ownership
March 31,
2013
2014

Name of affiliated companies

Denso Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Toyota Industries Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Aisin Seiki Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Toyota Tsusho Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Toyoda Gosei Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24.9%
24.8%
23.4%
22.1%
43.0%

24.9%
24.7%
23.4%
22.0%
43.0%

Certain affiliated companies accounted for by the equity method with carrying amounts of¥1,582,988 million and ¥1,811,245 million at March 31, 2013 and 2014, respectively, were quoted on various
established markets at an aggregate value of ¥1,954,347 million and ¥2,320,128 million, respectively. Toyota
F-28

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
evaluated its investments in affiliated companies, considering the length of time and the extent to which thequoted market prices have been less than the carrying amounts, the financial condition and near-term prospectsof the affiliated companies and Toyota’s ability and intent to retain those investments in the companies for aperiod of time. Toyota did not recognize any impairment loss for the years ended March 31, 2012, 2013 and2014.
Account balances and transactions with affiliated companies are presented below:
Yen in millions
March 31,
2013
2014

Trade accounts and notes receivable, and other receivables . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

252,708
592,027

253,312599,334

Yen in millions
For the years ended March 31,
2012
2013
2014

Net revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,536,326
3,785,284

1,926,854
4,020,138

1,854,708
4,289,583

Dividends from affiliated companies accounted for by the equity method for the years ended March 31,
2012, 2013 and 2014 were ¥122,950 million, ¥126,977 million and ¥147,039 million, respectively.
Toyota does not have any significant related party transactions other than transactions with affiliatedcompanies in the ordinary course of business.
Variable Interest Entities Toyota enters into securitization transactions using special-purpose entities, that are considered variableinterest entities (“VIEs”). Although the finance receivables and vehicles on operating leases related tosecuritization transactions have been legally sold to the VIEs, Toyota has both the power to direct the activitiesof the VIEs that most significantly impact the VIEs’ economic performance and the obligation to absorb losses of
the VIEs or the right to receive benefits from the VIEs that could potentially be significant to the VIEs. As aresult, Toyota is considered the primary beneficiary of the VIEs and therefore consolidates the VIEs.
Related to securitization transactions, ¥1,135,513 million and ¥1,439,796 million retail finance receivables,¥41,664 million and ¥16,447 million vehicles on operating leases, ¥58,770 million and ¥84,052 million restrictedcash and ¥978,095 million and ¥1,205,293 million secured debt were included in Toyota’s consolidated financial
statements as of March 31, 2013 and 2014, respectively. The creditors of the VIEs do not have recourse to
Toyota’s general credit with the exception of debts guaranteed by Toyota. Risks to which Toyota is exposed
including credit, interest rate, and/or prepayment risks are not incremental compared with the situation before
Toyota enters into securitization transactions.
As for VIEs other than those specified above, neither the aggregate size nor Toyota’s involvements arematerial to Toyota’s consolidated financial statements.

F-29

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
12. Short-term borrowings and long-term debt:
Short-term borrowings at March 31, 2013 and 2014 consist of the following:
Yen in millions
March 31,
2013
2014

Loans, principally from banks, with a weighted-average interest at March 31, 2013 andMarch 31, 2014 of 2.31% and of 2.57% per annum, respectively . . . . . . . . . . . . . . . . .
Commercial paper with a weighted-average interest at March 31, 2013 and March 31,
2014 of 0.52% and of 0.49% per annum, respectively . . . . . . . . . . . . . . . . . . . . . . . . . .

1,062,233

1,165,580

3,027,295

3,665,240

4,089,528

4,830,820

As of March 31, 2014, Toyota has unused short-term lines of credit amounting to ¥2,242,222 million ofwhich ¥415,689 million related to commercial paper programs. Under these programs, Toyota is authorized toobtain short-term financing at prevailing interest rates for periods not in excess of 360 days.
Long-term debt at March 31, 2013 and 2014 comprises the following:
Yen in millions
March 31,
2013
2014

Unsecured loans, representing obligations principally to banks, due 2013 to 2029 in2013 and due 2014 to 2029 in 2014 with interest ranging from 0.00% to27.30% per annum in 2013 and from 0.00% to 39.50% per annum in 2014 . . . . . . .
Secured loans, representing obligations principally to finance receivables
securitization due 2013 to 2050 in 2013 and due 2014 to 2030 in 2014 with interest
ranging from 0.10% to 11.75% per annum in 2013 and from 0.10% to 12.00% perannum in 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Medium-term notes of consolidated subsidiaries, due 2013 to 2047 in 2013 and due
2014 to 2047 in 2014 with interest ranging from 0.13% to 9.40% per annum in2013 and from 0.10% to 9.40% per annum in 2014 . . . . . . . . . . . . . . . . . . . . . . . . . .
Unsecured notes of parent company, due 2013 to 2019 in 2013 and due 2014 to 2023
in 2014 with interest ranging from 0.19% to 3.00% per annum in 2013 and from
0.19% to 3.00% per annum in 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unsecured notes of consolidated subsidiaries, due 2013 to 2031 in 2013 and due 2014
to 2031 in 2014 with interest ranging from 0.13% to 23.00% per annum in 2013
and from 0.08% to 41.79% per annum in 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term capital lease obligations, due 2013 to 2030 in 2013 and due 2014 to 2030
in 2014 with interest ranging from 0.40% to 14.73% per annum in 2013 and from
0.50% to 14.73% per annum in 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less - Current portion due within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,142,411

3,368,711

993,019

1,226,080

4,502,787

5,355,176

460,000

400,000

922,636

1,124,810

21,39921,796

10,042,252 11,496,573(2,704,428) (2,949,663)
7,337,824

8,546,910

As of March 31, 2014, approximately 43%, 14%, 11% and 32% of long-term debt are denominated in U.S.
dollars, Japanese yen, Australian dollars and other currencies, respectively.
F-30

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
As of March 31, 2014, property, plant and equipment with a book value of ¥64,924 million and other assets
aggregating ¥1,454,236 million were pledged as collateral mainly for certain debt obligations of subsidiaries.
These other assets principally consist of securitized finance receivables.
The aggregate amounts of annual maturities of long-term debt during the next five years are as follows:
Years ending March 31,

2015
2016
2017
2018
2019

Yen in millions......................................................................
......................................................................
......................................................................
......................................................................
......................................................................

2,949,663
2,389,789
1,976,199
2,000,971
1,232,727

Standard agreements with certain banks include provisions that collateral (including sums on deposit withsuch banks) or guarantees will be furnished upon the banks’ request and that any collateral furnished, pursuant tosuch agreements or otherwise, will be applicable to all present or future indebtedness to such banks. During theyear ended March 31, 2014, Toyota has not received any significant requests from these banks.
As of March 31, 2014, Toyota has unused long-term lines of credit amounting to ¥9,975,574 million.
13. Product warranties and recalls and other safety measures:
Toyota provides product warranties for certain defects mainly resulting from manufacturing based on
warranty contracts with its customers at the time of sale of products. Toyota accrues estimated warranty costs to
be incurred in the future in accordance with the warranty contracts. In addition to product warranties, Toyota
initiates recalls and other safety measures to repair or to replace parts which might be expected to fail fromproducts safety perspectives or customer satisfaction standpoints. Toyota accrues for costs of recalls and othersafety measures at the time of vehicle sale based on the amount estimated from historical experience.
Liabilities for product warranties and liabilities for recalls and other safety measures have been combined
into a single table showing an aggregate liability for quality assurances due to the fact that both are liabilities forcosts to repair or replace defects of vehicles and the amounts incurred for recalls and other safety measures may
affect the amounts incurred for product warranties and vice versa.
Liabilities for quality assurances are included in “Accrued expenses” in the consolidated balance sheets.
The net changes in liabilities for quality assurances above for the years ended March 31, 2012, 2013 and2014 consist of the following:
Yen in millions
For the years ended March 31,
2012
2013
2014

Liabilities for quality assurances at beginning of year . . . . . . . . . . . . . . . . . . .
Payments made during year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for quality assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes relating to pre-existing quality assurances . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

764,369(348,214)436,891(7,827)(5,385)

839,834 1,003,023(344,279) (383,572)
491,542
524,442(8,383)(7,248)24,30917,376

Liabilities for quality assurances at end of year . . . . . . . . . . . . . . . . . . . . . . . .

839,834

1,003,023

F-31

1,154,021

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The other amount primarily includes the impact of currency translation adjustments and the impact ofconsolidation and deconsolidation of certain entities due to changes in ownership interest.
The table below shows the net changes in liabilities for recalls and other safety measures which arecomprised in liabilities for quality assurances above for the years ended March 31, 2012, 2013 and 2014.
Yen in millions
For the years ended March 31,
2012
2013
2014

Liabilities for recalls and other safety measures at beginning of year . . . . . . . . .
Payments made during year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for recalls and other safety measures . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

389,499 468,697 566,406(159,344) (180,925) (207,652)
237,907 270,883 315,574
635
7,751
6,147

Liabilities for recalls and other safety measures at end of year . . . . . . . . . . . . . .

468,697

566,406

680,475

14. Other payables:
Other payables are mainly related to purchases of property, plant and equipment and non-manufacturing
purchases.
15. Income taxes:
The components of income (loss) before income taxes comprise the following:
Yen in millions
For the years ended March 31,
2012
2013
2014

Income (loss) before income taxes:
Parent company and domestic subsidiaries . . . . . . . . . . . . . . . . . . . . . . .
Foreign subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(177,852)
610,725

651,852
751,797

1,621,013
820,067

432,873

1,403,649

2,441,080

The provision for income taxes consists of the following:
Yen in millions
For the years ended March 31,
2012
2013
2014

Current income tax expense:
Parent company and domestic subsidiaries . . . . . . . . . . . . . . . . . . . . . . .
Foreign subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

111,363
144,514

178,662
213,016

634,458
189,629

Total current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

255,877

391,678824,087

Deferred income tax expense (benefit):
Parent company and domestic subsidiaries . . . . . . . . . . . . . . . . . . . . . . .
Foreign subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(57,940)
64,335140,041
19,967(122,898)
66,619Total deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,395

160,008(56,279)

Total provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

262,272

551,686

767,808

F-32

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Toyota is subject to a number of different income taxes which, in the aggregate, indicate a statutory rate inJapan of approximately 40.2%, 37.6% and 37.6% for the years ended March 31, 2012, 2013 and 2014,
respectively. The statutory tax rates in effect for the year in which the temporary differences are expected toreverse are used to calculate the tax effects of temporary differences which are expected to reverse in the futureyears. Reconciliation of the differences between the statutory tax rate and the effective income tax rate is asfollows:
For the years ended March 31,
2012
2013
2014

Statutory tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase (reduction) in taxes resulting from:
Non-deductible expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities on undistributed earnings of foreignsubsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities on undistributed earnings of affiliatedcompanies accounted for by the equity method . . . . . . . . . . . . . . .
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The difference between the statutory tax rate in Japan and that offoreign subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unrecognized tax benefits adjustments . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effective income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

40.2%

37.6%

37.6%

1.7

0.6

2.2

4.7

1.8

1.5

9.2
14.9
(1.8)

4.1
1.7
(3.1)

3.0
(4.3)
(6.5)

(9.6)
2.5
(1.2)
60.6%

(4.8)
0.1
1.3
39.3%

(3.2)
0.0
1.2
31.5%

Significant components of deferred tax assets and liabilities are as follows:
Yen in millions
March 31,
2013
2014

Deferred tax assets
Accrued pension and severance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses and liabilities for quality assurances . . . . . . . . . . . . . . . . . . . . . .
Other accrued employees’ compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating loss carryforwards for tax purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax credit carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less - Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities
Unrealized gains on securities, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Undistributed earnings of foreign subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Undistributed earnings of affiliated companies accounted for by the equity
method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Basis difference of acquired assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lease transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net deferred tax liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-33

230,021
480,428
108,599
160,936
101,251
151,043
227,596
1,459,874(284,835)
1,175,039

179,159
523,473
126,721164,070
51,046
213,799
307,443
1,565,711(189,894)
1,375,817(388,901)(25,713)(608,428)(37,556)(567,054) (663,249)(35,647)(35,261)(650,389) (776,722)(66,923)(91,475)(1,734,627) (2,212,691)(559,588) (836,874)

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The deferred tax assets and liabilities above that comprise the net deferred tax liability are included in the
consolidated balance sheets as follows:
Yen in millions
March 31,
2013
2014

Deferred tax assets
Deferred income taxes (Current assets) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments and other assets - Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes (Long-term liabilities) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net deferred tax liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

749,398
100,199

866,386
133,537(23,258)(24,951)(1,385,927) (1,811,846)(559,588)(836,874)

The factors used to assess the likelihood of realization of the deferred tax assets are the future reversal ofexisting taxable temporary differences, the future taxable income and available tax planning strategies that are
prudent and feasible. All available evidence, both positive and negative, is considered to determine whether,based on the weight of that evidence, a valuation allowance is needed for deferred tax assets which are not morelikely-than-not to be realized.
The accounting for deferred tax assets represents Toyota’s current best estimate based on all available
evidence. Unanticipated events or changes could result in re-evaluating the realizability of deferred tax assets.
Operating loss carryforwards for tax purposes as of March 31, 2014 in Japan and foreign countries were¥26,055 million and ¥499,569 million, respectively, and are available as an offset against future taxable income.
The majority of these carryforwards in Japan and foreign countries expire in years 2015 to 2023 and expire inyears 2015 to 2034, respectively. Tax credit carryforwards as of March 31, 2014 in Japan and foreign countries
were ¥37,441 million and ¥13,605 million, respectively, and the majority of these carryforwards in Japan andforeign countries expire in years 2015 to 2016 and expire in years 2015 to 2034, respectively.
The valuation allowance mainly relates to deferred tax assets of operating loss and foreign tax credit
carryforwards for tax purposes that are not expected to be realized. The net changes in the total valuation
allowance for deferred tax assets for the years ended March 31, 2012, 2013 and 2014 consist of the following:
Yen in millions
For the years ended March 31,
2012
2013
2014

Valuation allowance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

280,685 309,268 284,835
96,75438,28523,390(65,566) (70,986) (128,928)(2,605)
8,268
10,597

Valuation allowance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

309,268

284,835

189,894

The other amount includes the impact of consolidation and deconsolidation of certain entities due tochanges in ownership interest and currency translation adjustments during the years ended March 31, 2012, 2013
and 2014.
F-34

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Because management intends to reinvest undistributed earnings of foreign subsidiaries to the extent not
expected to be remitted in the foreseeable future, management has made no provision for income taxes on those
undistributed earnings aggregating ¥2,749,938 million as of March 31, 2014. Toyota estimates an additional tax
provision of ¥122,731 million would be required if the full amount of those undistributed earnings were remitted.
A summary of the gross unrecognized tax benefits changes for the years ended March 31, 2012, 2013 and2014 is as follows:
Yen in millions
For the years ended March 31,
2012
2013
2014

Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions based on tax positions related to the current year . . . . . . . . . . . . . . . . . . .
Additions for tax positions of prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reductions for tax positions of prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reductions for tax positions related to lapse of statute of limitations . . . . . . . . . . . .
Reductions for settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15,453 16,901 22,447
4,187
2,401
310
10,801
4,339
491(363) (1,619) (1,273)———(12,820) (2,776) (3,771)(357) 3,201
1,189
16,901

22,447

19,393

The amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was notmaterial at March 31, 2012, 2013 and 2014, respectively. Toyota does not believe it is reasonably possible thatthe total amounts of unrecognized tax benefits will significantly increase or decrease within the next twelve
months.
Interest and penalties related to income tax liabilities are included in “Other income (loss), net”. The
amounts of interest and penalties accrued as of and recognized for the years ended March 31, 2012, 2013 and2014, respectively, were not material.
Toyota remains subject to income tax examination for the tax returns related to the years beginning on andafter April 1, 2007 and January 1, 2000, with various tax jurisdictions in Japan and foreign countries,
respectively.
16. Shareholders’ equity:
Changes in the number of shares of common stock issued have resulted from the following:2012

For the years ended March 31,
2013
2014

Common stock issued
Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . .
Issuance during the year . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase and retirement . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,447,997,492——

3,447,997,492——

3,447,997,492——

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . .

3,447,997,492

3,447,997,492

3,447,997,492

F-35

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The Companies Act provides that an amount equal to 10% of distributions from surplus paid by the parent
company and its Japanese subsidiaries be appropriated as a capital reserve or a retained earnings reserve. No
further appropriations are required when the total amount of the capital reserve and the retained earnings reserve
reaches 25% of stated capital.
The retained earnings reserve included in retained earnings as of March 31, 2013 and 2014 were
¥175,735 million and ¥180,177 million, respectively. The Companies Act provides that the retained earnings
reserve of the parent company and its Japanese subsidiaries is restricted and unable to be used for dividend
payments, and is excluded from the calculation of the profit available for dividend.
The amounts of statutory retained earnings of the parent company available for dividend payments toshareholders were ¥5,858,551 million and ¥6,890,426 million as of March 31, 2013 and 2014, respectively. In
accordance with customary practice in Japan, the distributions from surplus are not accrued in the financial
statements for the corresponding period, but are recorded in the subsequent accounting period after shareholders’approval has been obtained. Retained earnings at March 31, 2014 include amounts representing year-end cash
dividends of ¥316,977 million, ¥100 per share, which were approved at the Ordinary General Shareholders’Meeting, held on June 17, 2014.
Retained earnings at March 31, 2014 include ¥1,732,993 million relating to equity in undistributed earnings
of affiliated companies accounted for by the equity method.
On January 1, 2012, the parent company implemented share exchanges as a result of which the parent
company became a wholly-owning parent company and each of Toyota Auto Body Co., Ltd. and Kanto Auto
Works, Ltd. became a wholly-owned subsidiary, and the parent company acquired additional shares of eachsubsidiary. As a result of these share exchanges, the parent company issued 31,151,148 shares of treasury stock,and treasury stock decreased by ¥125,819 million and losses on disposal of treasury stock occurred in the amountof ¥45,916 million. As a result, additional paid-in capital decreased by ¥551 million and retained earnings
decreased by ¥45,365 million, respectively. As a result of acquiring additional shares of each subsidiary,
noncontrolling interests decreased by ¥117,881 million, accumulated other comprehensive income (loss)
decreased by ¥6,503 million and additional paid-in capital increased by ¥44,481 million.

F-36

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
17. Accumulated other comprehensive income:Changes in accumulated other comprehensive income (loss) are as follows:
Yen in millions
Foreigncurrencytranslation
adjustments

Unrealized
gains (losses)
on securities

Pensionliability
adjustments

Accumulated
othercomprehensive
income (loss)

Balance at March 31, 2011 . . . . . . . . . . . . . . . . . . . . . . .
Equity transaction with noncontrolling interests andother, net of taxes of ¥— million, ¥(505) million,¥4,876 million and ¥4,371 million . . . . . . . . . . . . . . . .
Other comprehensive income (loss) before
reclassifications, net of taxes of ¥7,948 million,¥(62,466) million, ¥49,447 million and ¥(5,071)
million . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassifications, net of taxes of ¥— million,¥(20,788) million, ¥(5,534) million and¥(26,322) million . . . . . . . . . . . . . . . . . . . . . . . . .

(1,160,389)

168,227(152,559)(1,144,721)

751(7,254)(6,503)(93,292)

100,479(73,725)(66,538)—

31,315

8,615

39,930

Other comprehensive income (loss), net of tax . . . . . . . .
Less: Other comprehensive income attributable tononcontrolling interests . . . . . . . . . . . . . . . . . . . . . . . .

(93,292)

131,794(65,110)(26,608)

5,563(2,466)(4,098)(1,001)

Balance at March 31, 2012 . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss) before
reclassifications, net of taxes of ¥(12,664)
million, ¥(176,417) million, ¥(6,624) million and¥(195,705) million . . . . . . . . . . . . . . . . . . . . . . . .
Reclassifications, net of taxes of ¥— million,¥(17,497) million, ¥(4,335) million and¥(21,832) million . . . . . . . . . . . . . . . . . . . . . . . . .

(1,248,118)

298,306(229,021)(1,178,833)

461,754

348,0117,207

816,972—

26,198

7,504

33,702Other comprehensive income (loss), net of tax . . . . . . . .
Less: Other comprehensive income attributable tononcontrolling interests . . . . . . . . . . . . . . . . . . . . . . . .

461,754374,209

14,711

850,674(27,116)(5,702)

4,854(27,964)

Balance at March 31, 2013 . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss) before
reclassifications, net of taxes of¥(25,139) million, ¥(255,959) million, ¥(44,987)
million and ¥(326,085) million . . . . . . . . . . . . . . .
Reclassifications, net of taxes of ¥— million,¥5,209 million, ¥(4,682) million and¥527 million . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(813,480)

666,813(209,456)(356,123)

301,889

507,566

91,507

900,962—(8,006)

7,897

(109)

Other comprehensive income (loss), net of tax . . . . . . . .
Less: Other comprehensive income attributable tononcontrolling interests . . . . . . . . . . . . . . . . . . . . . . . .

301,889

499,560

99,404

900,853(4,947)(5,810)(5,812)(16,569)

Balance at March 31, 2014 . . . . . . . . . . . . . . . . . . . . . . .

(516,538) 1,160,563(115,864)

528,161

F-37—

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Reclassifications for the year ended March 31, 2014 consist of the following:
For the year ended March 31,
2014

Yen in millions
Affected line itemsin the consolidated statements of income

Unrealized gains (losses) on securities:
(29)
5,079
(18,469)

Financing operations
Foreign exchange gain, net
Other income (loss), net(13,419)

Income before income taxes and equity
in earnings of affiliated companies
Provision for income taxes
Equity in earnings of affiliatedcompanies

5,209
204

Pension liability adjustments:
Recognized net actuarial loss . . . . . . .
Amortization of prior service costs . .

(8,006)

Net income

17,786(5,207)*1*1

12,579(4,682)

Income before income taxes and equity
in earnings of affiliated companies
Provision for income taxes

7,897

Net income

Total reclassifications, net of tax . . . . . . . .

(109)

Amounts of reclassifications in parentheses indicate gains in the consolidated statements of income.
*1: These components are included in the computation of net periodic pension cost. See note 19 to theconsolidated financial statements for additional information.
18. Stock-based compensation:
In June 1997, the parent company’s shareholders approved a stock option plan for board members. In June
2001, the shareholders approved an amendment of the plan to include both board members and key employees.
Each year until June 2010, since the plans’ inception, the shareholders have approved the authorization for the
grant of options for the purchase of Toyota’s common stock. Authorized shares for each year that remain
ungranted are unavailable for grant in future years. Stock options granted in and after August 2006 have terms of
8 years and an exercise price equal to 1.025 times the closing price of Toyota’s common stock on the date of
grant. These options generally vest 2 years from the date of grant.
For the years ended March 31, 2012, 2013 and 2014, Toyota recognized stock-based compensation expenses
for stock options of ¥1,539 million, ¥325 million and ¥23 million, respectively, as selling, general andadministrative expenses.

F-38

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table summarizes Toyota’s stock option activity:
Yen inmillions

Yen
Weightedaverageremaining
contractual
life in years

Aggregate
intrinsic
value

Number ofshares

Weightedaverage
exercise price

15,786,800——(3,256,800)

4,941
—
—
5,059

5.04

565

Options outstanding at March 31, 2012 . . . . . . . . . . . . . . . . 12,530,000
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(645,000)Canceled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,036,000)

4,910
—
3,328
5,907

4.55

1,065

Options outstanding at March 31, 2013 . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Canceled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10,849,000—(2,390,100)(1,128,000)

4,909
—
4,043
6,373

3.56

5,921

Options outstanding at March 31, 2014 . . . . . . . . . . . . . . . .

7,330,900

4,965

2.52

8,646

Options exercisable at March 31, 2012 . . . . . . . . . . . . . . . . . .
Options exercisable at March 31, 2013 . . . . . . . . . . . . . . . . . .
Options exercisable at March 31, 2014 . . . . . . . . . . . . . . . . . .

9,778,000
10,849,000
7,330,900

5,396
4,909
4,965

4.05
3.56
2.52

—
5,921
8,646

Options outstanding at March 31, 2011 . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Canceled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

No options were exercised for the year ended March 31, 2012. The total intrinsic value of options exercisedfor the years ended March 31, 2013 and 2014 was ¥364 million and ¥4,793 million, respectively.
No cash was received from the exercise of stock options for the year ended March 31, 2012. Cash received
from the exercise of stock options for the years ended March 31, 2013 and 2014 was ¥2,147 million and¥9,663 million, respectively.
The following table summarizes information for options outstanding and options exercisable at March 31,
2014:

Exercise
price
range
Yen

Outstanding
Weightedaverage
exercise
price
Number ofsharesYen

Weightedaverageremaining
life
Years

Exercisable
Weightedaverage
exercise
price
Number ofsharesYen

3,183 – 5,000
5,001 – 7,278

4,915,900
2,415,000

4,067
6,794

3.32
0.91

4,915,900
2,415,000

4,067
6,794

3,183 – 7,278

7,330,900

4,965

2.52

7,330,900

4,965

F-39

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
19. Employee benefit plans:
Pension and severance plans Upon terminations of employment, employees of the parent company and subsidiaries in Japan are entitled,under the retirement plans of each company, to lump-sum indemnities or pension payments, based on current
rates of pay and lengths of service or the number of “points” mainly determined by those. Under normal
circumstances, the minimum payment prior to retirement age is an amount based on voluntary retirement.
Employees receive additional benefits on involuntary retirement, including retirement at the age limit.
Effective October 1, 2004, the parent company amended its retirement plan to introduce a “point” based
retirement benefit plan. Under the new plan, employees are entitled to lump-sum or pension payments
determined based on accumulated “points” vested in each year of service.
There are three types of “points” that vest in each year of service consisting of “service period points” which
are attributed to the length of service, “job title points” which are attributed to the job title of each employee, and“performance points” which are attributed to the annual performance evaluation of each employee. Under normal
circumstances, the minimum payment prior to retirement age is an amount reflecting an adjustment rate applied
to represent voluntary retirement. Employees receive additional benefits upon involuntary retirement, including
retirement at the age limit.
Effective October 1, 2005, the parent company partly amended its retirement plan and introduced the quasi
cash-balance plan under which benefits are determined based on the variable-interest crediting rate rather than
the fixed-interest crediting rate as was in the pre-amended plan.
The parent company and most subsidiaries in Japan have contributory funded defined benefit pension plans,
which are pursuant to the Corporate Defined Benefit Pension Plan Law (CDBPPL). The contributions to theplans are funded with several financial institutions in accordance with the applicable laws and regulations. These
pension plan assets consist principally of common stocks, government bonds and insurance contracts.
Most foreign subsidiaries have pension plans or severance indemnity plans covering substantially all of theiremployees under which the cost of benefits are currently invested or accrued. The benefits for these plans are
based primarily on lengths of service and current rates of pay.
Toyota uses a March 31 measurement date for its benefit plans.

F-40

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Information regarding Toyota’s defined benefit plans is as follows:
Japanese plans
Yen in millions
March 31,
2013
2014

Change in benefit obligation
Benefit obligation at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,480,387 1,594,411
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
60,26164,549Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27,80424,518Plan participants’ contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
918
856
Plan amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3,462)(427)
Net actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
90,66735,306
Acquisition and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(776)—
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(61,388)(61,693)
Benefit obligation at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,594,411 1,657,520
Change in plan assets
Fair value of plan assets at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
927,545 1,090,258
Actual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
145,141
133,964
Acquisition and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(264)—
Employer contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
53,90656,386
Plan participants’ contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
918
856
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(36,988)(36,998)
Fair value of plan assets at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,090,258 1,244,466
Funded status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
504,153
413,054
Amounts recognized in the consolidated balance sheets as of March 31, 2013 and 2014 are comprised of thefollowing:
Yen in millions
March 31,
2013
2014

Accrued expenses (Accrued pension and severance costs) . . . . . . . . . . . . . . . . . . . . . . . . . .
25,16025,088
Accrued pension and severance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 582,491 573,301
Investments and other assets - Other (Prepaid pension and severance costs) . . . . . . . . . . . . (103,498) (185,335)
Net amount recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 504,153 413,054
Amounts recognized in accumulated other comprehensive income (loss) as of March 31, 2013 and 2014 arecomprised of the following:
Yen in millions
March 31,
2013
2014

Net actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prior service costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net transition obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net amount recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-41(333,203) (248,751)
53,36048,221——(279,843) (200,530)

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The accumulated benefit obligation for all defined benefit pension plans was ¥1,494,011 million and¥1,593,424 million at March 31, 2013 and 2014, respectively.
The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for which theaccumulated benefit obligations exceed plan assets are as follows:
Yen in millions
March 31,
2013
2014

Projected benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

749,561
685,763
165,262

792,445732,695
204,343

Components of the net periodic pension cost are as follows:
Yen in millions
For the years ended March 31,
2012
2013
2014

Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of prior service costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recognized net actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of net transition obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

57,241
30,660(21,558)(16,326)
28,342
1,626

60,26127,804(22,352)(8,033)
16,619—64,54924,518(26,768)(5,566)
12,562—

Net periodic pension cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

79,98574,29969,295

Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) are as
follows:
Yen in millions
For the years ended March 31,
2012
2013
2014

Net actuarial gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recognized net actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prior service costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of prior service costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of net transition obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(87,163)
28,342(632)(16,326)
1,626
63

32,122
16,6193,462(8,033)—(173)

71,89012,562427(5,566)——

Total recognized in other comprehensive income (loss) . . . . . . . . . . . . . .

(74,090)

43,99779,313The other amount includes the impact of transition to defined contribution pension plans and consolidationand deconsolidation of certain entities due to changes in ownership interest during the years ended March 31,
2012 and 2013.
The estimated prior service costs and net actuarial loss that will be amortized from accumulated othercomprehensive income (loss) into net periodic pension cost during the year ending March 31, 2015 are¥(5,600) million and ¥7,600 million, respectively.
F-42

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Weighted-average assumptions used to determine benefit obligations as of March 31, 2013 and 2014 are as
follows:
March 31,
2013
2014

Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rate of compensation increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.7%
2.2%

1.4%
2.1%

As of March 31, 2013 and 2014, the parent company and certain subsidiaries in Japan employ “point” based
retirement benefit plans and do not use the rates of compensation increase to determine benefit obligations.
Weighted-average assumptions used to determine net periodic pension cost for the years ended March 31,
2012, 2013 and 2014 are as follows:
For the years ended March 31,
2012
2013
2014

Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rate of compensation increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.3%
2.5%
2.3%

2.0%
2.5%
2.3%

1.7%
2.6%
2.2%

During the years ended March 31, 2012, 2013 and 2014, the parent company and certain subsidiaries inJapan employ “point” based retirement benefit plans and do not use the rates of compensation increase todetermine net periodic pension cost.
The expected rate of return on plan assets is determined after considering several applicable factors
including, the composition of plan assets held, assumed risks of asset management, historical results of the
returns on plan assets, Toyota’s principal policy for plan asset management, and forecasted market conditions.
Toyota’s policy and objective for plan asset management is to maximize returns on plan assets to meet
future benefit payment requirements under risks which Toyota considers permissible. Asset allocations under theplan asset management are determined based on plan asset management policies of each plan which areestablished to achieve the optimized asset compositions in terms of the long-term overall plan asset management.
Excepting equity securities contributed by Toyota, approximately 50% of the plan assets is invested in equity
securities, approximately 30% is invested in debt securities, and the rest of them is invested in insurance
contracts and other products. When actual allocations are not in line with target allocations, Toyota rebalances its
investments in accordance with the policies. Prior to making individual investments, Toyota performs in-depth
assessments of corresponding factors including category of products, industry type, currencies and liquidity ofeach potential investment under consideration to mitigate concentrations of risks such as market risk and foreign
currency exchange rate risk. To assess performance of the investments, Toyota establishes bench mark return
rates for each individual investment, combines these individual bench mark rates based on the asset composition
ratios within each asset category, and compares the combined rates with the corresponding actual return rates oneach asset category.

F-43

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table summarizes the fair value of classes of plan assets as of March 31, 2013 and 2014. Seenote 26 to the consolidated financial statements for three levels of input which are used to measure fair value.

Level 1

Yen in millions
March 31, 2013
Level 2
Level 3

Total

440,971——
184,879——

440,971
184,879

440,971

184,879—

625,850

81,867———
203,933
23,594——441

81,867
203,933
24,035

81,867

227,527441

309,835

Insurance contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—17,78991,326
3,923—
41,53591,326
63,247

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

540,627

507,655

41,976

1,090,258

Level 1

Yen in millions
March 31, 2014
Level 2
Level 3

Total

511,828——
185,599——

511,828
185,599

511,828

185,599—

697,427

90,071———
229,42124,028——322

90,071
229,421
24,35090,071

253,449322

343,842

Insurance contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—18,838132,8103,789—
47,760132,81070,387

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

620,737

575,647

48,082

1,244,466

Equity securities
Common stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commingled funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt securities
Government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commingled funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Equity securities
Common stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commingled funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt securities
Government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commingled funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The following is description of the assets, information about the valuation techniques used to measure fairvalue, key inputs and significant assumptions:
Quoted market prices for identical securities are used to measure fair value of common stocks. Common
stocks include 71% of Japanese stocks and 29% of foreign stocks as of March 31, 2013, and 71% of Japanesestocks and 29% of foreign stocks as of March 31, 2014.

F-44

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Quoted market prices for identical securities are used to measure fair value of government bonds.
Government bonds include 44% of Japanese government bonds and 56% of foreign government bonds as ofMarch 31, 2013, and 44% of Japanese government bonds and 56% of foreign government bonds as of March 31,
2014.
Commingled funds are beneficial interests of collective trust. The fair values of commingled funds aremeasured using the net asset value (“NAV”) provided by the administrator of the fund, and are categorized by theability to redeem investments at the measurement day.
The fair values of insurance contracts are measured using contracted amount with accrued interest.
Other consists of cash equivalents, other private placement investment funds and other assets. The fairvalues of other private placement investment funds are measured using the NAV provided by the administrator of
the fund, and are categorized by the ability to redeem investments at the measurement day.
The following tables summarize the changes in Level 3 plan assets measured at fair value for the years
ended March 31, 2012, 2013 and 2014:
Yen in millions
For the year ended March 31, 2012
Debt securities
Other
Total

Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases, sales and settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

746
5
(160)
—
591

38,374 39,120(1,762) (1,757)
3,453
3,293
—
—
40,065 40,656

Yen in millions
For the year ended March 31, 2013
Debt securities
Other
Total

Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases, sales and settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

591
3
(153)
—

40,065 40,656
438
441
1,032
879
—
—

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

441

41,53541,976

Yen in millions
For the year ended March 31, 2014
Debt securities
Other
Total

Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases, sales and settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

441
2
(121)
—

41,535
3,583
2,642
—

41,976
3,585
2,521
—

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

322

47,76048,082

Toyota expects to contribute ¥55,057 million to its pension plans in the year ending March 31, 2015.
F-45

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following pension benefit payments, which reflect expected future service, as appropriate, are expected
to be paid:
Years ending March 31,

Yen in millions

2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
from 2020 to 2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

65,636
67,792
67,937
68,95475,396
398,032
743,747

Foreign plans
Yen in millions
March 31,
2013
2014

Change in benefit obligation
Benefit obligation at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan participants’ contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefit obligation at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in plan assets
Fair value of plan assets at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employer contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan participants’ contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of plan assets at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Funded status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

467,000 633,160
27,94336,90824,30032,153
246
297
(43)
96
38,986 (30,012)
82,907
48,388(8,179) (15,407)
633,160 705,583
343,226 479,239
46,35956,30060,13842,69435,354
14,801
246
297(6,084) (12,349)
479,239 580,982
153,921 124,601

Amounts recognized in the consolidated balance sheets as of March 31, 2013 and 2014 are comprised of thefollowing:
Yen in millions
March 31,
2013
2014

Accrued expenses (Accrued pension and severance costs) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued pension and severance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments and other assets - Other (Prepaid pension and severance costs) . . . . . . . . . . . . . .
Net amount recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-46

1,762
2,509
183,621 194,317(31,462) (72,225)
153,921 124,601

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Amounts recognized in accumulated other comprehensive income (loss) as of March 31, 2013 and 2014 arecomprised of the following:
Yen in millions
March 31,
2013
2014

Net actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prior service costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net transition obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net amount recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(96,151) (46,278)(1,921) (1,659)——(98,072) (47,937)

The accumulated benefit obligation for all defined benefit pension plans was ¥533,551 million and¥617,042 million at March 31, 2013 and 2014, respectively.
The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for which theaccumulated benefit obligations exceed plan assets are as follows:
Yen in millions
March 31,
2013
2014

Projected benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

251,596
213,934
43,277

175,238
153,254
19,136Components of the net periodic pension cost are as follows:
Yen in millions
For the years ended March 31,
2012
2013
2014

Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of prior service costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recognized net actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of net transition obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net periodic pension cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21,29827,94336,90821,73924,30032,153(22,864) (23,177) (34,059)
351
369
359
1,783
2,884
5,224
—
—
—
22,30732,31940,585

Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) are as
follows:
Yen in millions
For the years ended March 31,
2012
2013
2014

Net actuarial gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recognized net actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prior service costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of prior service costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of net transition obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total recognized in other comprehensive income (loss) . . . . . . . . . . . . . . . . .
F-47(58,270) (15,804) 52,253
1,783
2,884
5,224
(108)
43
(96)
351
369
359
—
—
—
5,888
(8,162) (7,605)(50,356) (20,670) 50,135

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The other amount includes the impact of consolidation and deconsolidation of certain entities due tochanges in ownership interest and currency translation adjustments during the years ended March 31, 2012, 2013
and 2014.
The estimated prior service costs and net actuarial loss that will be amortized from accumulated othercomprehensive income (loss) into net periodic pension cost during the year ending March 31, 2015 are¥300 million and ¥2,500 million, respectively.
Weighted-average assumptions used to determine benefit obligations as of March 31, 2013 and 2014 are as
follows:
March 31,

Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rate of compensation increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2013

2014

4.5%
4.6%

4.8%
4.5%

Weighted-average assumptions used to determine net periodic pension cost for the years ended March 31,
2012, 2013 and 2014 are as follows:
For the years ended March 31,
2012
2013
2014

Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rate of compensation increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5.7%
7.3%
4.4%

5.0%
7.0%
4.5%

4.5%
6.9%
4.6%

The expected rate of return on plan assets is determined after considering several applicable factors
including, the composition of plan assets held, assumed risks of asset management, historical results of the
returns on plan assets, Toyota’s principal policy for plan asset management, and forecasted market conditions.
Toyota’s policy and objective for plan asset management is to maximize returns on plan assets to meet
future benefit payment requirements under risks which Toyota considers permissible. Asset allocations under theplan asset management are determined based on plan asset management policies of each plan which areestablished to achieve the optimized asset compositions in terms of the long-term overall plan asset management.
Excepting equity securities contributed by Toyota, approximately 60% of the plan assets is invested in equity
securities, approximately 30% is invested in debt securities, and the rest of them is invested in other products.
When actual allocations are not in line with target allocations, Toyota rebalances its investments in accordancewith the policies. Prior to making individual investments, Toyota performs in-depth assessments ofcorresponding factors including category of products, industry type, currencies and liquidity of each potential
investment under consideration to mitigate concentrations of risks such as market risk and foreign currency
exchange rate risk. To assess performance of the investments, Toyota establishes bench mark return rates foreach individual investment, combines these individual bench mark rates based on the asset composition ratios
within each asset category, and compares the combined rates with the corresponding actual return rates on each
asset category.

F-48

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table summarizes the fair value of classes of plan assets as of March 31, 2013 and 2014. Seenote 26 to the consolidated financial statements for three levels of input which are used to measure fair value.

Level 1

Yen in millions
March 31, 2013
Level 2
Level 3

183,611——86,539——183,61186,539183,61186,539—270,150

47,083———42,754
40,486———47,08342,754
40,48647,083

83,240—130,323

Insurance contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—30,739

1,202
6,218

—
40,607

1,202
77,564

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

261,433

177,199

40,607479,239

Level 1

Yen in millions
March 31, 2014
Level 2
Level 3221,988——
125,840——

221,988
125,840

221,988

125,840—

347,828

54,086—3,004—
45,88744,964———54,08645,88747,96857,09090,851—

147,941

Insurance contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—31,053—6,294—
47,866—
85,213

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

310,131

222,985

47,866580,982

Equity securities
Common stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commingled funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt securities
Government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commingled funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Equity securities
Common stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commingled funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt securities
Government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commingled funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total

Total

The following is description of the assets, information about the valuation techniques used to measure fairvalue, key inputs and significant assumptions:
Quoted market prices for identical securities are used to measure fair value of common stocks. Common
stocks include mainly foreign stocks as of March 31, 2013 and 2014.
Quoted market prices for identical securities are used to measure fair value of government bonds.
Government bonds include mainly foreign government bonds as of March 31, 2013 and 2014.

F-49

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Commingled funds are beneficial interests of collective trust. The fair values of commingled funds aremeasured using the NAV provided by the administrator of the fund, and are categorized by the ability to redeem
investments at the measurement day.
Other consists of cash equivalents, other private placement investment funds and other assets. The fairvalues of other private placement investment funds are measured using the NAV provided by the administrator of
the fund, and are categorized by the ability to redeem investments at the measurement day.
The following tables summarize the changes in Level 3 plan assets measured at fair value for the years
ended March 31, 2012, 2013 and 2014:
Yen in millions
For the year ended March 31, 2012
Debt securities
Other
Total

Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases, sales and settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—
—
—
—

20,477
1,243
9,514
143

20,477
1,243
9,514
143

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—31,377

31,377

Yen in millions
For the year ended March 31, 2013
Debt securities
Other
Total

Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases, sales and settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—
—
—
—

31,377
2,472
2,599
4,159

31,377
2,472
2,599
4,159

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—40,60740,607

Yen in millions
For the year ended March 31, 2014
Debt securities
Other
Total

Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases, sales and settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—
—
—
—

40,607
791
1,987
4,481

40,607
791
1,987
4,481

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—47,86647,866

Toyota expects to contribute ¥13,118 million to its pension plans in the year ending March 31, 2015.

F-50

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following pension benefit payments, which reflect expected future service, as appropriate, are expected
to be paid:
Years ending March 31,

Yen in millions

2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
From 2020 to 2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15,91016,99817,974
19,071
20,825
124,962

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

215,740

Postretirement benefits other than pensions and postemployment benefits Toyota’s U.S. subsidiaries provide certain health care and life insurance benefits to eligible retired
employees. In addition, Toyota provides benefits to certain former or inactive employees after employment, but
before retirement. These benefits are provided through various insurance companies, health care providers andothers. The costs of these benefits are recognized over the period the employee provides credited service toToyota. Toyota’s obligations under these arrangements are not material.
20. Derivative financial instruments:
Toyota employs derivative financial instruments, including foreign exchange forward contracts, foreign
currency options, interest rate swaps, interest rate currency swap agreements and interest rate options to manage
its exposure to fluctuations in interest rates and foreign currency exchange rates. Toyota does not use derivatives
for speculation or trading.
Fair value hedges Toyota enters into interest rate swaps and interest rate currency swap agreements mainly to convert its
fixed-rate debt to variable-rate debt. Toyota uses interest rate swap agreements in managing interest rate risk
exposure. Interest rate swap agreements are executed as either an integral part of specific debt transactions or ona portfolio basis. Toyota uses interest rate currency swap agreements to hedge exposure to currency exchange
rate fluctuations on principal and interest payments for borrowings denominated in foreign currencies. Notes andloans payable issued in foreign currencies are hedged by concurrently executing interest rate currency swap
agreements, which involve the exchange of foreign currency principal and interest obligations for each functional
currency obligations at agreed-upon currency exchange and interest rates.
For the years ended March 31, 2012, 2013 and 2014, the ineffective portion of Toyota’s fair value hedge
relationships was not material. For fair value hedging relationships, the components of each derivative’s gain orloss are included in the assessment of hedge effectiveness.
Undesignated derivative financial instruments Toyota uses foreign exchange forward contracts, foreign currency options, interest rate swaps, interest ratecurrency swap agreements, and interest rate options, to manage its exposure to foreign currency exchange rate
fluctuations and interest rate fluctuations from an economic perspective, and for which Toyota is unable or has
elected not to apply hedge accounting.
F-51

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Fair value and gains or losses on derivative financial instruments The following table summarizes the fair values of derivative financial instruments as of March 31, 2013 and2014:
Yen in millions
March 31,
2013
2014

Derivative assets
Derivative financial instruments designated as hedging instruments
Interest rate and currency swap agreements
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments and other assets - Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10,76939,56950,3381,254
36,57237,826

Undesignated derivative financial instruments
Interest rate and currency swap agreements
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments and other assets - Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27,731
139,419
167,150

23,182
159,644
182,826

Foreign exchange forward and option contracts
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments and other assets - Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,340
—
7,340

7,052
—
7,052

Total derivative assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Counterparty netting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Collateral received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Carrying value of derivative assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

224,828(69,177)(89,630)
66,021

227,704(85,331)(78,554)
63,819Derivative liabilities
Derivative financial instruments designated as hedging instruments
Interest rate and currency swap agreements
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2,554)(143)(2,697)(1,442)—(1,442)

Undesignated derivative financial instruments
Interest rate and currency swap agreements
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange forward and option contracts
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total derivative liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Counterparty netting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Collateral posted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Carrying value of derivative liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-52(37,133) (32,569)(122,420) (132,161)(159,553) (164,730)(36,087)(5)(36,092)(9,468)(5)(9,473)(198,342) (175,645)
69,177
85,331
17,30061,680(111,865) (28,634)

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table summarizes the notional amounts of derivative financial instruments as of March 31,
2013 and 2014:
Yen in millions
March 31,2013
Designated Undesignatedderivative
derivative
financialfinancial
instruments
instruments

2014
Designated Undesignatedderivative
derivative
financialfinancial
instruments
instruments

Interest rate and currency swap agreements . . . . . . . . . . . . .
Foreign exchange forward and option contracts . . . . . . . . . .

235,219—

12,689,774
2,104,048

151,704—

15,135,193
1,965,611

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

235,219

14,793,822

151,704

17,100,804

The following table summarizes the gains and losses on derivative financial instruments and hedged items
reported in the consolidated statements of income for the years ended March 31, 2012, 2013 and 2014:
Yen in millions
For the years ended March 31,
2012
2013
2014
Gains or
Gains or
Gains or(losses) on(losses) on(losses) on
derivative
Gains orderivative
Gains orderivative
Gains orfinancial(losses) on
financial(losses) on
financial(losses) on
instruments hedged items instruments hedged items instruments hedged items

Derivative financial instruments
designated as hedging instruments Fair value hedge
Interest rate and currency swap
agreements
Cost of financing operations . . .
Undesignated derivative financial
instruments
Interest rate and currency swap
agreements
Cost of financing operations . . .
Foreign exchange gain (loss),
net . . . . . . . . . . . . . . . . . . . . .
Foreign exchange forward andoption contracts
Cost of financing operations . . .
Foreign exchange gain (loss),
net . . . . . . . . . . . . . . . . . . . . .

(1,354)

2,999(23,965)

24,738(2,719)3,10635,834—(24,204)

—

199

—

(28)

—

1,617

—

(2,862)—(3,815)—(4,572)—

20,333—53,272—(49,239)

—

(930)

—

Undesignated derivative financial instruments are used to manage risks of fluctuations in interest rates tocertain borrowing transactions and in foreign currency exchange rates of certain currency receivables andpayables. Toyota accounts for these derivative financial instruments as economic hedges with changes in the fairvalue recorded directly into current period earnings.

F-53

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Cash flows from transactions of derivative financial instruments are included in cash flows from operating
activities in the consolidated statements of cash flows.
Credit risk related contingent features Toyota enters into International Swaps and Derivatives Association Master Agreements with counterparties.
These Master Agreements contain a provision requiring either Toyota or the counterparty to settle the contract or
to post assets to the other party in the event of a ratings downgrade below a specified threshold.
The aggregate fair value amount of derivative financial instruments that contain credit risk related
contingent features that are in a net liability position after being offset by cash collateral as of March 31, 2014 is¥3,721 million. The aggregate fair value amount of assets that are already posted as cash collateral as ofMarch 31, 2014 is ¥33,964 million. If the ratings of Toyota decline below specified thresholds, the maximum
amount of assets to be posted or for which Toyota could be required to settle the contracts is ¥3,721 million as ofMarch 31, 2014.
21. Other financial instruments:
Toyota has certain financial instruments, including financial assets and liabilities which arose in the normal
course of business. These financial instruments are executed with creditworthy financial institutions, andvirtually all foreign currency contracts are denominated in U.S. dollars, euros and other currencies of major
developed countries. Financial instruments involve, to varying degrees, market risk as instruments are subject toprice fluctuations, and elements of credit risk in the event a counterparty should default. In the unlikely event thecounterparties fail to meet the contractual terms of a foreign currency or an interest rate instrument, Toyota’s risk
is limited to the fair value of the instrument. Although Toyota may be exposed to losses in the event of nonperformance by counterparties on financial instruments, it does not anticipate significant losses due to the natureof its counterparties. Counterparties to Toyota’s financial instruments represent, in general, international
financial institutions. Additionally, Toyota does not have a significant exposure to any individual counterparty.
Toyota believes that the overall credit risk related to its financial instruments is not significant.
The following table summarizes the estimated fair values of Toyota’s financial instruments, excluding
marketable securities, other securities investments, investments and other assets in affiliated companies andderivative financial instruments. See note 26 to the consolidated financial statements for three levels of input
which are used to measure fair value.

Assets (Liabilities)
Cash and cash equivalents . . . . . . . .
Time deposits . . . . . . . . . . . . . . . . . .
Total finance receivables, net . . . . . .
Other receivables . . . . . . . . . . . . . . .
Short-term borrowings . . . . . . . . . . .
Long-term debt including the current
portion . . . . . . . . . . . . . . . . . . . . . .

Carrying amount

Level 1

1,718,297
106,700
11,144,427
432,693(4,089,528)

1,342,356————(10,020,853)

—

F-54

Yen in millions
March 31, 2013
Estimated fair value
Level 2
Level 3375,941—
106,700——
11,434,936—
432,693(4,089,528)—(9,244,942)

Total

1,718,297
106,700
11,434,936
432,693(4,089,528)(979,196) (10,224,138)

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Assets (Liabilities)
Cash and cash equivalents . . . . . . .
Time deposits . . . . . . . . . . . . . . . . .
Total finance receivables, net . . . . .
Other receivables . . . . . . . . . . . . . .
Short-term borrowings . . . . . . . . . .
Long-term debt including thecurrent portion . . . . . . . . . . . . . .

Carrying amount

Level 1

2,041,170
180,207
12,775,669
351,182(4,830,820)

1,639,624————(11,474,777)—

Yen in millions
March 31, 2014
Estimated fair value
Level 2
Level 3

401,546—
180,207——
13,058,756—
351,182(4,830,820)
—

Total

2,041,170
180,207
13,058,756
351,182(4,830,820)(10,410,754) (1,204,668) (11,615,422)

Cash and cash equivalents and time deposits In the normal course of business, substantially all cash and cash equivalents and time deposits are highly
liquid and are carried at amounts which approximate fair value due to its short duration. Cash equivalents andtime deposits include negotiable certificate of deposit measured at fair value on a recurring basis. Where money
market funds produce a daily net asset value in an active market, this value is used to determine the fair value ofthe fund investment, and the investment is classified in Level 1. All other types of cash and cash equivalents andtime deposits are classified in Level 2.
Finance receivables, net The fair values of finance receivables are estimated by discounting expected cash flows to present value
using internal assumptions, including prepayment speeds, expected credit losses and collateral value. Certain
impaired finance receivables are measured at fair value on a nonrecurring basis based on collateral values.
As unobservable inputs are utilized, finance receivables are classified in Level 3.
Other receivables Other receivables are short-term receivables. These receivables are carried at amounts which approximate
fair value, and the difference between the carrying amount and the fair value is not material. These receivables
are classified in Level 3.
Short-term borrowings and long-term debt The fair values of short-term borrowings and long-term debt including the current portion, except for
secured loans provided by securitization transactions using special-purpose entities, are estimated based on the
discounted amounts of future cash flows using Toyota’s current borrowing rates for similar liabilities. As these
inputs are observable, these debts are classified in Level 2.
The fair values of the secured loans provided by securitization transactions are estimated based on current
market rates and credit spreads for debt with similar maturities. Internal assumptions including prepayment
speeds and expected credit losses are used to estimate the timing of cash flows to be paid on the underlying
securitized assets. As these valuations utilize unobservable inputs, the secured loans are classified in Level 3.
See note 12 to the consolidated financial statements for information regarding the secured loans.
F-55

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
22. Lease commitments:
Toyota leases certain assets under capital lease and operating lease arrangements.
An analysis of leased assets under capital leases is as follows:
Yen in millions
March 31,
2013
2014

Class of property
Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,999 15,828
Machinery and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,252 30,770
Less - Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (23,843) (24,985)
22,408 21,613
Amortization expenses under capital leases for the years ended March 31, 2012, 2013 and 2014 were
¥5,572 million, ¥5,265 million and ¥5,151 million, respectively.
Future minimum lease payments under capital leases together with the present value of the net minimum
lease payments as of March 31, 2014 are as follows:
Years ending March 31,

Yen in millions

2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total minimum lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less - Amount representing interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Present value of net minimum lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less - Current obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term capital lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,063
3,838
2,754
2,314
1,997
12,24928,215(6,419)21,796(4,182)
17,614

Rental expenses under operating leases for the years ended March 31, 2012, 2013 and 2014 were
¥91,052 million, ¥90,081 million and ¥94,613 million, respectively.
The minimum rental payments required under operating leases relating primarily to land, buildings andequipment having initial or remaining non-cancelable lease terms in excess of one year at March 31, 2014 are as
follows:
Years ending March 31,

Yen in millions

2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total minimum future rentals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-56

12,25810,435
8,405
7,054
5,013
19,406
62,571TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
23. Other commitments and contingencies, concentrations and factors that may affect future operations:
Commitments
Commitments outstanding as of March 31, 2014 for the purchase of property, plant and equipment and otherassets totaled ¥79,294 million.
Guarantees
Toyota enters into contracts with Toyota dealers to guarantee customers’ payments of their installment
payables that arise from installment contracts between customers and Toyota dealers, as and when requested by
Toyota dealers. Guarantee periods are set to match maturity of installment payments, and as of March 31, 2014,
range from 1 month to 35 years; however, they are generally shorter than the useful lives of products sold.
Toyota is required to execute its guarantee primarily when customers are unable to make required payments.
The maximum potential amount of future payments as of March 31, 2014 is ¥2,097,151 million. Liabilities
for guarantees totaling ¥6,426 million have been provided as of March 31, 2014. Under these guarantee
contracts, Toyota is entitled to recover any amount paid by Toyota from the customers whose original obligations
Toyota has guaranteed.
Legal Proceedings
Product Recalls
From time-to-time, Toyota issues vehicle recalls and takes other safety measures including safety campaigns
relating to its vehicles. In November 2009, Toyota announced a safety campaign in North America for certain
models of Toyota and Lexus vehicles related to floor mat entrapment of accelerator pedals, and later expanded it
to include additional models. In January 2010, Toyota announced a recall in North America for certain models of
Toyota vehicles related to sticking and slow-to-return accelerator pedals. Also in January 2010, Toyota recalledin Europe, China and other regions certain models of Toyota vehicles related to sticking accelerator pedals. In
February 2010, Toyota announced a worldwide recall related to the software program that controls the antilock
braking system in certain vehicle models including the Prius. Set forth below is a description of the remaining
claims, lawsuits and government investigations involving Toyota in the United States relating to these recalls andother safety measures.
Class Action and Consolidated Litigation
Approximately 200 putative class actions and more than 500 individual product liability personal injury
cases have been filed since November 2009 alleging that certain Toyota, Lexus and Scion vehicles containdefects that lead to unintended acceleration. All of the class actions and many of the product liability personal
injury, warranty and lemon law cases were consolidated either in a consolidated action in the United States
District Court for the Central District of California or in a consolidated action in California state court.
In December 2012, Toyota and the plaintiffs announced that they had reached an agreement to settle theeconomic loss claims in the consolidated federal action. In fiscal 2013, Toyota recorded a $1.1 billion pre-tax
charge against earnings to cover the estimated costs of this economic loss resolution and other potential recallrelated resolutions. In July 2013, the court signed the order and judgment granting final approval of thesettlement and dismissing the economic loss cases. Various objectors appealed the court’s rulings, but all of theseappeals have been dismissed and the settlement is final.

F-57

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Although the settlement does not cover product liability personal injury claims in the consolidated federal
action or pending in various state courts in the United States, the judges overseeing the federal and California
consolidated actions have approved an Intensive Settlement Process (“ISP”) for the product liability personal
injury claims in those actions. Under the ISP, all cases are stayed pending completion of a process to assess
whether they can be resolved on terms acceptable to the parties. Cases not resolved after completion of the ISP
will then proceed to discovery and toward trial.
Beginning in February 2010, Toyota was sued in approximately 20 putative class actions alleging defects inthe antilock braking system in various hybrid vehicles that cause the vehicles to fail to stop in a timely manner
when driving in certain road conditions. These cases were consolidated into two actions, one in the United States
District Court for the Central District of California and one in the Los Angeles County Superior Court. In January
2013, the Court in the federal case issued an order denying the plaintiff’s motion for class certification andgranting summary judgment in favor of Toyota on the claims of the principal named plaintiff for the cases
relating to recalled vehicles. In July 2013, the court denied the motion for class certification for claims related tovehicles that were not recalled, and that ruling has been appealed.
While Toyota has resolved or is attempting to resolve many of the outstanding matters, Toyota believes thatit has meritorious defenses to all of them and will vigorously defend those matters not resolved.
Government Investigations
In February 2010, Toyota received a subpoena from the U.S. Attorney for the Southern District of New
York and a voluntary request and subpoena from the SEC primarily seeking documents related to unintended
acceleration and certain financial records. This began as a coordinated investigation and has included interviewsof Toyota and non-Toyota witnesses, as well as production of documents. In March 2014, Toyota announced thatit entered into a deferred prosecution agreement (“DPA”) with the U.S. Attorney’s Office for the Southern
District of New York to resolve its investigation. The matter was resolved pursuant to the DPA, which provided
for a $1.2 billion payment to the U.S. government, and Toyota recorded a $1.2 billion charge against earnings infiscal 2014. The agreement also provides for an independent monitor to review and assess policies andprocedures relating to Toyota’s safety communications process, its process for sharing vehicle accident
information internally and its process for preparing and sharing certain technical reports. In April 2014, the staffof the SEC notified Toyota that it has concluded its investigation and it does not intend to recommend that the
SEC institute an enforcement action regarding this matter.
Beyond the amounts accrued for the recall-related matters, Toyota is unable to estimate a range ofreasonably possible loss, if any, for the other recall-related matters because (i) many of the proceedings are inevidence gathering stages, (ii) significant factual issues need to be resolved, (iii) the legal theory or nature of theclaims is unclear, (iv) the outcome of future motions or appeals is unknown and/or (v) the outcomes of othermatters of these types vary widely and do not appear sufficiently similar to offer meaningful guidance. Toyota
continues to evaluate these matters and expects that it may have resolution discussions from time to time in someof them. Although Toyota cannot estimate a reasonable range of loss based on currently available information,
the resolution of the above-mentioned matters could have an adverse effect on Toyota’s financial position, resultsof operations or cash flows.
Other Proceedings
Toyota has various other legal actions, other governmental proceedings and other claims pending against it,
including other product liability claims in the United States. For the same reasons discussed above relating to the
F-58

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
recall-related legal proceedings, Toyota is unable to estimate a range of reasonably possible loss, if any, beyond
the amounts accrued, with respect to these other proceedings. Based upon information currently available to
Toyota, however, Toyota believes that its losses from these matters, if any, would not have a material adverse
effect on Toyota’s financial position, results of operations or cash flows.
Environmental Matters and Others
In October 2000, the European Union brought into effect a directive that requires member states topromulgate regulations implementing the following: (i) automotive manufacturers shall bear all or a significant
part of the costs for taking back end-of-life vehicles sold after July 1, 2002 and dismantling and recycling thosevehicles. Beginning January 1, 2007, this requirement became applicable to vehicles sold before July 1, 2002 as
well; (ii) automotive manufacturers may not use certain hazardous materials in vehicles sold after July 1, 2003;(iii) certified vehicles models sold after December 15, 2008 shall be re-usable and/or recyclable to a minimum of
85% by weight per vehicle and shall be re-usable and/or re-use as material or energy to a minimum of 95% byweight per vehicle; and (iv) end-of-life vehicles must meet actual re-use and/or recycling of 80% and re-use and/or recovery of 85%, respectively, of vehicle weight by 2006, rising respectively to 85% and 95% by 2015. Laws
to implement this directive came into effect in each of the European Union member states. Currently, there areuncertainties surrounding the implementation of the applicable regulations in different European Union member
states, particularly regarding automotive manufacturer responsibilities and resultant expenses that may be
incurred.
In addition, under this directive, the member states must take measures to ensure that car manufacturers,
distributors and other auto-related economic operators establish adequate used vehicle collection and treatment
facilities and to ensure that hazardous materials and recyclable parts are removed from vehicles prior toshredding. This directive impacts Toyota’s vehicles sold in the European Union. Toyota accommodated, inoffering its products, any measures the European Union member states will choose to take in order to comply
with this directive.
Based on the legislation that has been enacted to date, Toyota has provided for its estimated liability related
to covered vehicles in existence as of March 31, 2014. The amount of estimated liability may change depending
on future legislation to be enacted and subject to other circumstances. Although Toyota does not expect its
compliance with the directive to result in significant cash expenditures, Toyota is continuing to assess the impactof this future legislation on its financial position, results of operations and cash flows.
Toyota purchases materials that are equivalent to approximately 10% of material costs from a supplier
which is an affiliated company.
The parent company has a concentration of labor supply in employees working under collective bargaining
agreements and a substantial portion of these employees are working under the agreement that will expire on
December 31, 2014.
24. Segment data:
The operating segments reported below are the segments of Toyota for which separate financial information
is available and for which operating income/loss amounts are evaluated regularly by executive management indeciding how to allocate resources and in assessing performance.
The major portions of Toyota’s operations on a worldwide basis are derived from the Automotive andFinancial Services business segments. The Automotive segment designs, manufactures and distributes sedans,
F-59

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
minivans, compact cars, sport-utility vehicles, trucks and related parts and accessories. The Financial Services
segment consists primarily of financing, and vehicle and equipment leasing operations to assist in themerchandising of the parent company and its affiliated companies products as well as other products. The All
Other segment includes the design, manufacturing and sales of housing, telecommunications and otherbusinesses.
The following tables present certain information regarding Toyota’s industry segments and operations bygeographic areas and overseas revenues by destination as of and for the years ended March 31, 2012, 2013 and2014.
Segment operating results and assets As of and for the year ended March 31, 2012:
Yen in millions

Automotive

Financial
Services

All Other

Inter-segment
Elimination/
UnallocatedAmountNet revenues
Sales to external customers . . . . . . . . . .
Inter-segment sales and transfers . . . . . .

16,964,378
30,1681,071,737
28,587547,538
501,377—(560,132)

18,583,653—

Total . . . . . . . . . . . . . . . . . . . . . . . .
Operating expenses . . . . . . . . . . . . . . . . . . . .

16,994,546
16,972,863

1,100,324
793,886

1,048,915
1,006,853(560,132)(545,576)

18,583,653
18,228,026

Operating income . . . . . . . . . . . . . . . . . . . . . .

21,683

306,438

42,062(14,556)

355,627

Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment in equity method investees . . . . .
Depreciation expenses . . . . . . . . . . . . . . . . . .
Capital expenditure . . . . . . . . . . . . . . . . . . . .

12,261,814
1,877,720
744,067
796,839

13,172,548
3,887
298,757
683,161

1,161,224
4,765
25,00635,3404,055,379
27,757—
16,74230,650,965
1,914,129
1,067,830
1,532,082

Consolidated

Consolidated

As of and for the year ended March 31, 2013:
Yen in millions

Automotive

Financial
Services

All Other

Inter-segment
Elimination/
UnallocatedAmountNet revenues
Sales to external customers . . . . . . . . . .
Inter-segment sales and transfers . . . . . .

20,378,762
40,3381,150,042
20,628535,388531,073—(592,039)

22,064,192—

Total . . . . . . . . . . . . . . . . . . . . . . . .
Operating expenses . . . . . . . . . . . . . . . . . . . .

20,419,100
19,474,396

1,170,670
854,850

1,066,461
1,012,845(592,039)(598,787)

22,064,192
20,743,304

Operating income . . . . . . . . . . . . . . . . . . . . . .

944,704

315,820

53,616

6,748

1,320,888

Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment in equity method investees . . . . .
Depreciation expenses . . . . . . . . . . . . . . . . . .
Capital expenditure . . . . . . . . . . . . . . . . . . . .

13,179,741
2,033,040
745,880
937,695

16,231,473
4,925
336,528
1,005,326

1,310,115
6,968
22,701
29,286

4,761,988
57,651—
1,845

35,483,317
2,102,584
1,105,109
1,974,152

F-60

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
As of and for the year ended March 31, 2014:
Yen in millions

Automotive

Financial
Services

All Other

Inter-segment
Elimination/
UnallocatedAmountNet revenues
Sales to external customers . . . . . . . . . .
Inter-segment sales and transfers . . . . . .

23,733,855
47,5491,379,267
41,780578,789
572,491—(661,820)

25,691,911—

Total . . . . . . . . . . . . . . . . . . . . . . . .
Operating expenses . . . . . . . . . . . . . . . . . . . .

23,781,404
21,842,626

1,421,047
1,126,156

1,151,280
1,087,010(661,820)(655,993)

25,691,911
23,399,799

Operating income . . . . . . . . . . . . . . . . . . . . . .

1,938,778

294,891

64,270(5,827)

2,292,112

Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment in equity method investees . . . . .
Depreciation expenses . . . . . . . . . . . . . . . . . .
Capital expenditure . . . . . . . . . . . . . . . . . . . .

14,275,376
2,343,217
789,266
1,044,510

18,943,587
7,129
437,896
1,624,944

1,597,297
9,418
23,69139,9306,621,213
69,812—(30,693)

41,437,473
2,429,576
1,250,853
2,678,691

Consolidated

Geographic Information As of and for the year ended March 31, 2012:
Yen in millions

Japan

Net revenues
Sales to externalcustomers . . . . . . . . .
Inter-segment sales andtransfers . . . . . . . . . .

NorthAmerica

Europe

Asia

Other

7,293,804 4,644,348 1,917,408 3,116,849 1,611,244
3,873,515

107,538

76,538217,425

Inter-segment
Elimination/
UnallocatedAmountConsolidated—

148,931 (4,423,947)

18,583,653—

Total . . . . . . . . . . 11,167,319 4,751,886 1,993,946 3,334,274 1,760,175 (4,423,947) 18,583,653
Operating expenses . . . . . . . 11,374,359 4,565,477 1,976,150 3,077,484 1,651,361 (4,416,805) 18,228,026
Operating income (loss) . . .

(207,040)

186,409

17,796

256,790108,814

Assets . . . . . . . . . . . . . . . . . 12,034,423 9,693,232 1,960,532 2,433,312 2,175,493
Long-lived assets . . . . . . . . . 2,981,985 2,197,197 263,070 412,959 380,169

F-61(7,142)355,627

2,353,973 30,650,965—
6,235,380

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
As of and for the year ended March 31, 2013:
Yen in millions

Japan

Net revenues
Sales to externalcustomers . . . . . . . .
Inter-segment sales
and transfers . . . . .

7,910,456
4,910,562

Total . . . . . . . . . 12,821,018
Operating expenses . . . . . . 12,244,683
Operating income . . . . . . .

576,335

North
America

Europe

Asia

Other

Inter-segment
Elimination/
UnallocatedAmountConsolidated

6,167,821 2,003,113 4,058,629 1,924,173
116,604

80,000326,847—

170,092 (5,604,105)

22,064,192—

6,284,425 2,083,113 4,385,476 2,094,265 (5,604,105) 22,064,192
6,062,500 2,056,651 4,009,421 1,960,521 (5,590,472) 20,743,304
221,925

26,462

376,055

133,744(13,633) 1,320,888

Assets . . . . . . . . . . . . . . . . 12,296,731 11,841,471 2,199,256 3,305,319 2,616,164
Long-lived assets . . . . . . . . 2,929,346 2,633,067 288,288 590,021 410,517

3,224,376 35,483,317—
6,851,239

As of and for the year ended March 31, 2014:
Yen in millions

Japan

Net revenues
Sales to externalcustomers . . . . . . . .
Inter-segment sales
and transfers . . . . .

8,532,875
5,764,595

Total . . . . . . . . . 14,297,470
Operating expenses . . . . . . 12,787,305
Operating income . . . . . . .

1,510,165

North
America

Europe

Asia

Other

Inter-segment
Elimination/
UnallocatedAmountConsolidated

7,938,615 2,614,070 4,475,382 2,130,969
178,484

110,889402,290—

205,672 (6,661,930)

25,691,911—

8,117,099 2,724,959 4,877,672 2,336,641 (6,661,930) 25,691,911
7,791,047 2,666,731 4,481,935 2,294,073 (6,621,292) 23,399,799
326,052

58,228395,737

42,568(40,638) 2,292,112

Assets . . . . . . . . . . . . . . . . 13,231,184 13,720,958 2,576,806 4,013,429 2,731,695
Long-lived assets . . . . . . . . 2,945,247 3,276,273 318,872 725,924 374,982

5,163,401 41,437,473—
7,641,298“Other” consists of Central and South America, Oceania, Africa and the Middle East.
Revenues are attributed to geographies based on the country location of the parent company or thesubsidiary that transacted the sale with the external customer.
There are no any individually material countries with respect to revenues, and long-lived assets included inother foreign countries.

F-62

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Unallocated amounts included in assets represent assets held for corporate purposes, which mainly consistof cash and cash equivalents and marketable securities. Such corporate assets were ¥4,749,259 million,¥5,599,970 million and ¥7,659,617 million, as of March 31, 2012, 2013 and 2014, respectively.
Transfers between industries or geographic segments are made at amounts which Toyota’s management
believes approximate arm’s-length transactions. In measuring the reportable segments’ income or losses,
operating income consists of revenue less operating expenses.
Overseas Revenues by destination The following information shows revenues that are attributed to countries based on location of customers,
excluding customers in Japan. In addition to the disclosure requirements under U.S.GAAP, Toyota discloses thisinformation in order to provide financial statements users with valuable information.
Yen in millions
For the years ended March 31,
2012
2013
2014

North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,715,804
1,817,944
3,284,392
3,103,383

6,790,453
1,901,118
3,940,175
3,929,775“Other” consists of Central and South America, Oceania, Africa and the Middle East, etc.

F-63

7,919,832
2,495,829
4,252,632
4,616,944

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Certain financial statements data on non-financial services and financial services businesses The financial data below presents separately Toyota’s non-financial services and financial services
businesses.
Balance sheets Yen in millions
March 31,
2013
2014

Non-Financial Services Businesses
Current assets
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade accounts and notes receivable, less allowance for doubtful
accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,107,409
1,204,447

1,411,860
1,770,142

2,033,831
1,715,634
1,597,514

2,102,495
1,894,536
1,689,497

Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,658,835

8,868,530

Investments and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,462,767
4,741,357

9,524,349
4,886,194

Total Non-Financial Services Businesses assets . . . . . . . . . . . . . . . . . . .

19,862,959

23,279,073

Financial Services BusinessCurrent assets
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . .

610,888
241,216
5,117,660
693,036

629,310
276,735
5,628,934
903,022

Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,662,800

7,438,001

Noncurrent finance receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,943,766
515,025
2,109,882

8,102,294
648,188
2,755,104

Total Financial Services Business assets . . . . . . . . . . . . . . . . . . . . . . . .

16,231,473

18,943,587

Eliminations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(611,115)(785,187)

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

35,483,317

41,437,473

Assets in the non-financial services include unallocated corporate assets.

F-64

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Yen in millions
March 31,
2013
2014

Non-Financial Services Businesses
Current liabilities
Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

576,685
185,582
2,092,722
2,092,102
140,935
1,186,870

587,809131,215
2,180,190
2,218,495
583,115
1,283,730

Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,274,896

6,984,554

Long-term liabilities
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued pension and severance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

521,428754,360
969,668

526,498
756,229
1,506,806

Total long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,245,456

2,789,533

Total Non-Financial Services Businesses liabilities . . . . . . . . . . . . . . . .

8,520,352

9,774,087

Financial Services BusinessCurrent liabilities
Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,861,699
2,538,249
37,655
105,901
15,331
632,025

4,610,449
2,834,445
45,687
108,953
11,714685,278

Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,190,860

8,296,526

Long-term liabilities
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued pension and severance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,876,849
11,752
724,337

8,084,565
11,389840,218

Total long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,612,938

8,936,172

Total Financial Services Business liabilities . . . . . . . . . . . . . . . . . . . . . .

14,803,798

17,232,698

Eliminations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(613,689)(788,299)

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22,710,461

26,218,486

Total Toyota Motor Corporation shareholders’ equity . . . . . . . . . . . . . . . . . . . . . .

12,148,035

14,469,148

Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

624,821749,839

Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12,772,856

15,218,987

Total liabilities and shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . .

35,483,317

41,437,473

F-65

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Statements of income Yen in millions
For the years ended March 31,
2012
2013
2014

Non-Financial Services Businesses
Net revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17,534,872

20,943,634

24,343,613

Costs and expenses
Cost of revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative . . . . . . . . . . . . . . . . . . . . . .

15,796,635
1,676,999

18,034,256
1,899,997

20,004,553
2,334,404

Total costs and expenses . . . . . . . . . . . . . . . . . . . . . . . . . .

17,473,634

19,934,253

22,338,957

Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

61,2381,009,381

2,004,656

Other income (expense), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

69,93579,837140,067

Income before income taxes and equity in earnings of affiliatedcompanies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

131,173

1,089,218

2,144,723

Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in earnings of affiliated companies . . . . . . . . . . . . . . . . . . . .

141,558
196,544436,223230,078

669,173
316,612Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

186,159

883,073

1,792,162

Less: Net income attributable to noncontrolling interests . . . . . . . .

(82,181)(119,359)(164,709)

Net income attributable to Toyota Motor Corporation- Non-Financial Services Businesses . . . . . . . . . . . . . . . . . . . . . .

103,978

763,714

1,627,453

Financial Services BusinessNet revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,100,324

1,170,670

1,421,047

Costs and expenses
Cost of revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative . . . . . . . . . . . . . . . . . . . . . .

615,563
178,323

633,306
221,544840,905
285,251

Total costs and expenses . . . . . . . . . . . . . . . . . . . . . . . . . .

793,886

854,850

1,126,156

Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

306,438

315,820294,891

Other income (expense), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4,679)

(970)

1,451

Income before income taxes and equity in earnings of affiliatedcompanies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

301,759

314,850

296,342

Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in earnings of affiliated companies . . . . . . . . . . . . . . . . . . . .

120,725
1,157

116,033
1,441

98,5891,764

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

182,191

200,258

199,517

Less: Net income attributable to noncontrolling interests . . . . . . . .

(2,566)(1,961)(3,819)Net income attributable to Toyota Motor Corporation- Financial Services Business . . . . . . . . . . . . . . . . . . . . . . . . . . . .

179,625

198,297

195,698

Eliminations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(44)

152

(32)

Net income attributable to Toyota Motor Corporation . . . . . . . . . . .

283,559

962,163

1,823,119

F-66

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Statements of cash flows Yen in millions
Yen in millions
For the year ended March 31, 2012
For the year ended March 31, 2013
Non-Financial Financial
Non-Financial Financial
Services
Services
Services
Services
Businesses
Business Consolidated Businesses
Business Consolidated
Cash flows from operating activities
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for doubtful accounts and credit
losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension and severance costs, lesspayments . . . . . . . . . . . . . . . . . . . . . . . . . . .
Losses on disposal of fixed assets . . . . . . . . .
Unrealized losses on available-for-salesecurities, net . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . .
Equity in earnings of affiliated companies . . .
Changes in operating assets and liabilities,
and other . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by operating
activities . . . . . . . . . . . . . . . . . . . . . . .
Cash flows from investing activities
Additions to finance receivables . . . . . . . . . . . . . . .
Collection of and proceeds from sales of financereceivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions to fixed assets excluding equipment
leased to others . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions to equipment leased to others . . . . . . . . .
Proceeds from sales of fixed assets excluding
equipment leased to others . . . . . . . . . . . . . . . . .
Proceeds from sales of equipment leased toothers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of marketable securities and security
investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of and maturity of marketablesecurities and security investments . . . . . . . . . . .
Payment for additional investments in affiliatedcompanies, net of cash acquired . . . . . . . . . . . . .
Changes in investments and other assets, andother . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash used in investing activities . . . .
Cash flows from financing activities
Proceeds from issuance of long-term debt . . . . . . .
Payments of long-term debt . . . . . . . . . . . . . . . . . .
Increase (decrease) in short-term borrowings . . . . .
Dividends paid to Toyota Motor Corporation
shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid to noncontrolling interests . . . . . . .
Reissuance (repurchase) of treasury stock . . . . . . .
Net cash provided by (used in) financing
activities . . . . . . . . . . . . . . . . . . . . . . .

186,159

182,191

368,302883,073

200,258

1,083,482

769,073

298,757

1,067,830

768,581336,528

1,105,109

5,843

3,780

9,623

1,745

25,62227,367

15,41033,4481,301
80

16,711
33,528(23,514)32,005

3,085
216(20,429)
32,221

53,831(82,792)(196,544)—
89,199(1,157)53,831
6,395(197,701)

2,104
89,834(230,078)—
70,743(1,441)

2,104
160,008(231,519)

182,931(73,020)

93,916

472,51432,066292,973

967,359

501,131

1,452,435

1,996,264

667,077

2,451,316—(13,455,792) (8,333,248)—(16,877,678) (10,004,928)—

13,168,058

8,061,710—

15,784,681(713,867)(135,054)(9,670)(673,491)(723,537)(808,545)(839,756)(129,070)

36,203430

36,63338,051

1,140

39,191

20,689410,624

431,313

68,571

464,870

533,441(2,565,772)(607,862) (3,173,634)(2,980,821)(431,602) (3,412,423)

2,227,812

629,0132,856,825

2,285,566

383,525

2,669,091

(147)

—

(147)

16,216—

16,216(77,848)

3,396

9,102,856(14,805)(854,561)(990,521) (1,119,591)

213,957(12,206)

209,972

17,206(916,179)(550,896) (1,442,658)(1,524,037)(1,758,238) (3,027,312)

39,803(294,646)
238,072

2,379,152 2,394,807(2,608,135) (2,867,572)
93,002
311,651

182,114(328,380)(162,782)

3,089,484 3,191,223(2,415,566) (2,682,136)
388,416
201,261(156,785)(37,356)
(92)

—
—
—

(156,785)(37,356)(92)(190,008)(45,640)
2,542

—
—
—

(190,008)(45,640)
2,542(211,004)(135,981)(355,347)(542,154)

1,062,334

477,242(19,846)

Effect of exchange rate changes on cash and cash
equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(36,093)(55,939)

72,70065,151

137,851

Net increase (decrease) in cash and cash equivalents . . .
Cash and cash equivalents at beginning of year . . . . . . .

(195,917)
1,300,553(205,592) (401,509)
780,156 2,080,709

2,773
1,104,636

36,324
574,564

39,097
1,679,200

Cash and cash equivalents at end of year . . . . . . . . . . . .

1,104,636

574,564

1,107,409

610,888

1,718,297

F-67

1,679,200

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Yen in millions
For the year ended March 31, 2014
Non-Financial
Financial
Services
Services
Businesses
Business
Consolidated
Cash flows from operating activities
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for doubtful accounts and credit losses . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension and severance costs, less payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Losses on disposal of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unrealized losses on available-for-sale securities, net . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in earnings of affiliated companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in operating assets and liabilities, and other . . . . . . . . . . . . . . . . . . . . . . .

1,792,162

199,517

1,991,648

812,957
3,405
21,842
27,925560(108,318)(316,612)
1,010,360

437,896
46,313(1,188)732
5,636
51,995(1,764)(269,875)

1,250,853
49,71820,65428,657
6,197(56,279)(318,376)
672,9633,244,281

469,2623,646,035——(956,232)(97,515)
38,31135,995(4,227,802)(20,598,521)
19,612,456(13,789)(1,611,155)
880
708,344(510,476)(11,953,064)
11,025,353(970,021)(1,708,670)
39,191
744,339(4,738,278)

2,813,373
6,603(125,353)

505,954—(4,607)3,319,327
6,603(101,028)

Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2,512,620)(1,910,914)(4,336,248)

Cash flows from financing activities
Proceeds from issuance of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase (decrease) in short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid to Toyota Motor Corporation shareholders . . . . . . . . . . . . . . . . . . . . . .
Dividends paid to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reissuance (repurchase) of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

121,723(169,233)
21,808(396,030)(63,065)
9,212

3,780,228(2,831,116)
465,731———3,890,310(2,988,923)
467,976(396,030)(63,065)
9,212

Net cash provided by (used in) financing activities . . . . . . . . . . . . . . . . . . . . .

(475,585)

1,414,843

919,480

Effect of exchange rate changes on cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . .

48,37545,231

93,606

Net increase in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

304,451
1,107,409

18,422610,888322,873
1,718,297

Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,411,860

629,310

2,041,170

Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash flows from investing activities
Additions to finance receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Collection of and proceeds from sales of finance receivables . . . . . . . . . . . . . . . . . . . . .
Additions to fixed assets excluding equipment leased to others . . . . . . . . . . . . . . . . . . .
Additions to equipment leased to others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of fixed assets excluding equipment leased to others . . . . . . . . . . .
Proceeds from sales of equipment leased to others . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of marketable securities and security investments . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of and maturity of marketable securities and security
investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payment for additional investments in affiliated companies, net of cash acquired . . . . .
Changes in investments and other assets, and other . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-68

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
25. Per share amounts:
Reconciliations of the differences between basic and diluted net income attributable to Toyota Motor
Corporation per share for the years ended March 31, 2012, 2013 and 2014 are as follows:

For the year ended March 31, 2012
Basic net income attributable to Toyota Motor Corporation percommon share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of dilutive securities
Assumed exercise of dilutive stock options . . . . . . . . . . . . . .
Diluted net income attributable to Toyota Motor Corporation percommon share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
For the year ended March 31, 2013
Basic net income attributable to Toyota Motor Corporation percommon share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of dilutive securities
Assumed exercise of dilutive stock options . . . . . . . . . . . . . .
Diluted net income attributable to Toyota Motor Corporation percommon share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
For the year ended March 31, 2014
Basic net income attributable to Toyota Motor Corporation percommon share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of dilutive securities
Assumed exercise of dilutive stock options . . . . . . . . . . . . . .
Diluted net income attributable to Toyota Motor Corporation percommon share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Yen inmillions

Thousandsof shares

Net income
attributable to
Toyota Motor
Corporation

Weightedaverage
sharesYen
Net income
attributable to
Toyota Motor
Corporation
per share

283,559

3,143,470

90.21

(3)

0

283,556

3,143,470

90.20

962,163

3,166,909

303.82(32)

246

962,131

3,167,155

303.78

1,823,119

3,168,989

575.30

(85)

1,922

1,823,034

3,170,911

574.92

Stock options that were not included in the computation of diluted net income attributable to Toyota Motor
Corporation per share for the years ended March 31, 2012, 2013 and 2014 were 12,530 thousand shares,
8,682 thousand shares and 2,415 thousand shares, respectively, because the options’ exercise prices were greaterthan the average market price per common share during the period.
In addition to the disclosure requirements under U.S.GAAP, Toyota discloses the information below inorder to provide financial statements users with valuable information.

F-69

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table shows Toyota Motor Corporation shareholders’ equity per share as of March 31, 2013
and 2014. Toyota Motor Corporation shareholders’ equity per share amounts are calculated by dividing Toyota
Motor Corporation shareholders’ equities’ amount at the end of each period by the number of shares issued andoutstanding, excluding treasury stock at the end of the corresponding period.
Yen inmillions

As of March 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
As of March 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Toyota Motor
Corporation
Shareholders’equityThousandsof shares
Shares issued
andoutstandingat the end of
the year(excluding
treasurystock)

Toyota Motor
Corporation
Shareholders’equityper share

12,148,035
14,469,148

3,167,429
3,169,766

3,835.30
4,564.74

Yen

26. Fair value measurements:
In accordance with U.S.GAAP, Toyota classifies fair value into three levels of input as follows which areused to measure it.
Level 1:

Quoted prices in active markets for identical assets or liabilities

Level 2:

Quoted prices for similar assets or liabilities in active markets; quoted prices for identical orsimilar assets or liabilities in markets that are not active; inputs other than quoted prices that are
observable for the assets or liabilities

Level 3:

Unobservable inputs for assets or liabilities

The following table summarizes the fair values of the assets and liabilities measured at fair value on arecurring basis at March 31, 2013 and 2014. Transfers between levels of the fair value are recognized at the endof their respective reporting periods:

Level 1

Yen in millions
March 31, 2013
Level 2
Level 3

Total

AssetsCash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Time deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marketable securities and other securities investments
Public and corporate bonds . . . . . . . . . . . . . . . . . . . . . . .
Common stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . .

245,264—

375,941
57,572——621,205
57,572

3,753,451
1,401,183
49,731—

792,806—
518,955
217,745

6,889
—
—
7,083

4,553,146
1,401,183
568,686
224,828

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,449,629

1,963,019

13,972

7,426,620

Liabilities
Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . .

—(196,386) (1,956)(198,342)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—(196,386) (1,956)(198,342)

F-70

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Level 1

Yen in millions
March 31, 2014
Level 2
Level 3

Total

AssetsCash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marketable securities and other securities investments
Public and corporate bonds . . . . . . . . . . . . . . . . . . . . . . .
Common stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . .

311,582

401,546—

713,128

5,234,856
1,997,196
54,383—920,975—
517,950
220,160

9,092
—
—
7,544

6,164,923
1,997,196
572,333
227,704

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,598,017

2,060,631

16,636

9,675,284

Liabilities
Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . .

—(175,645)—(175,645)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—(175,645)—(175,645)

The following is description of the assets and liabilities measured at fair value, information about thevaluation techniques used to measure fair value, key inputs and significant assumption:
Cash equivalents and time deposits Cash equivalents include money market funds and other investments with original maturities of threemonths or less. Cash equivalents classified in Level 2 include primarily negotiable certificate of deposit withoriginal maturities of three months or less. These are measured at fair value using observable interest rates in themarket. Time deposits include negotiable certificate of deposit with original maturities over three months. These
are measured at fair value using observable interest rates in the market.
Marketable securities and other securities investments Marketable securities and other securities investments include public and corporate bonds, common stocks
and other investments. Public and corporate bonds include primarily government bonds and represent 49% ofJapanese bonds, and 51% of U.S., European and other bonds as of March 31, 2013, and 50% of Japanese bonds,
and 50% of U.S., European and other bonds as of March 31, 2014. Listed stocks on the Japanese stock markets
represent 85% and 86% of common stocks as of March 31, 2013 and 2014, respectively. Toyota uses primarily
quoted market prices for identical assets to measure fair value of these securities. “Other” includes primarily
investment trusts. Generally, Toyota uses quoted market prices for similar assets or quoted non-active market
prices for identical assets to measure fair value of these securities. These assets are classified in Level 2.
Derivative financial instruments See note 20 to the consolidated financial statements about derivative financial instruments. Toyota primarily
estimates the fair value of derivative financial instruments using industry-standard valuation models that require
observable inputs including interest rates and foreign exchange rates, and the contractual terms. The usage ofthese models does not require significant judgment to be applied. These derivative financial instruments areclassified in Level 2. In other certain cases when market data is not available, key inputs to the fair value
measurement include quotes from counterparties, and other market data. Toyota assesses the reasonableness ofchanges of the quotes using observable market data. These derivative financial instruments are classified in Level
3. Toyota’s derivative fair value measurements consider assumptions about counterparty and our own nonperformance risk, using such as credit default probabilities.
F-71

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table summarizes the changes in Level 3 assets and liabilities measured at fair value on arecurring basis for the periods ended March 31, 2012, 2013 and 2014:
Yen in millions
For the year ended March 31, 2012
Marketablesecurities andDerivative
other securities
financialinvestments
instruments
Total

Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total gains (losses)
Included in earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Included in other comprehensive income (loss) . . . . . . . . . . . . . . .
Purchases and issuances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

6,794

6,794

—
—
—
—
1,684

6,476
—
—
(3,832)(4,699)6,476——(3,832)(3,015)

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,684

4,739

6,423

Yen in millions
For the year ended March 31, 2013Marketablesecurities andDerivative
other securities
financialinvestments
instruments
Total

Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total gains (losses)
Included in earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Included in other comprehensive income (loss) . . . . . . . . . . . . . . .
Purchases and issuances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,684

4,739

6,423

24
58
3,607
(1,563)
3,079

2,118
—
—
(2,343)
613

2,142
58
3,607
(3,906)
3,692

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,889

5,127

12,016

Yen in millions
For the year ended March 31, 2014
Marketablesecurities andDerivative
other securities
financialinvestments
instruments
Total

Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total gains (losses)
Included in earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Included in other comprehensive income (loss) . . . . . . . . . . . . . . .
Purchases and issuances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,889

5,127

12,016

(28)
(228)
2,575
(1,555)
1,439

3,460
—
—
(1,579)
536

3,432
(228)
2,575
(3,134)
1,975

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9,092

7,544

16,636

F-72

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)“Included in earnings” in marketable securities and other securities investments and derivative financial
instruments are included in “Other income (loss), net” and “Cost of financing operations” in the accompanying
consolidated statements of income, respectively.
In the reconciliation table above, derivative financial instruments are presented net of assets and liabilities.
The other amount includes the impacts of level transfers and currency translation adjustments for the year ended
March 31, 2012, and includes the currency translation adjustments for the years ended March 31, 2013 and 2014.
As of March 31, 2014, the Level 3 assets and liabilities measured at fair value on a recurring basis are notsignificant.
Certain assets and liabilities are measured at fair value on a nonrecurring basis. During the years ended
March 31, 2013 and 2014, Toyota measured certain finance receivables at fair value of ¥32,974 million and¥22,432 million based on the collateral value, resulting in gains of ¥978 million and ¥220 million. This fair value
measurement on a nonrecurring basis is classified in Level 3. See note 21 to the consolidated financial statements
for the fair value measurement. These Level 3 financial assets are not significant.
27. Restructuring charges and asset impairments:
In February 2014, Toyota Motor Corporation and Toyota Motor Corporation Australia Ltd., its production
and sales subsidiary in Australia, decided to end their vehicle and engine production in Australia by the end of
2017. In fiscal 2014, Toyota recorded costs and expenses of ¥83,073 million relating to the end of production inAustralia in the automotive segment. These costs and expenses consist primarily of long-lived assets impairment
charges of ¥47,190 million and other restructuring charges of ¥35,883 million. Toyota expects to incur additionalcharges each year from the year ending March 31, 2015 through the year 2017 which are not material to Toyota.
28. Significant subsequent events:
At a meeting of the Board of Directors held on March 26, 2014, Toyota Motor Corporation (“TMC”)
resolved to establish the Toyota Mobility Foundation (the “Foundation”), a general incorporated foundation, todispose 30,000 thousand shares of treasury stock at ¥1 per share by way of third-party allotment to a trust that isbeing established by TMC to provide funding for the activities of the Foundation through dividends, etc. on
TMC’s common stock, to repurchase up to 60,000 thousand shares of TMC’s common stock at a total purchaseprice of up to ¥360,000 million pursuant to Article 156 of the Companies Act of Japan (the “Companies Act”) as
applied pursuant to Article 165, Paragraph 3 of the Companies Act and to cancel 30,000 thousand shares oftreasury stock pursuant to Article 178 of the Companies Act.
The disposition of treasury stock was subject to the approval at TMC’s 110th Ordinary General
Shareholders’ Meeting held in June 2014, and the repurchase of TMC’s common stock and cancellation oftreasury stock were each subject to the approval of the disposition of treasury stock at such Ordinary General
Shareholders’ Meeting. Pursuant to Articles 199 and 200 of the Companies Act, the delegation to TMC’s Boardof Directors of the power to decide the terms of such disposition was approved at such Ordinary General
Shareholders’ Meeting held on June 17, 2014.
Presented below is additional information regarding the disposition of treasury stock, repurchase of stock,and cancellation of treasury stock.
(1) Disposition of treasury stock
Reason for disposing treasury stock TMC resolved at a meeting of the Board of Directors held on March 26, 2014 to establish the Foundation.
F-73

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The disposition of treasury stock will be made by way of third-party allotment to a trust that is being
established by TMC to provide funding for the activities of the Foundation through dividends, etc. on TMC’scommon stock.
Details of matters relating to disposition Kind of stock to be disposed . . . . . . . . . . .

Common stock of TMC

Number of shares to be disposed . . . . . . .

30,000,000 shares

Price of disposition . . . . . . . . . . . . . . . . . .

¥1 per share

Amount of proceeds . . . . . . . . . . . . . . . . .

¥30 million

Method of disposition . . . . . . . . . . . . . . . .

Disposition by way of third-party allotment to:
Japan Trustee Services Bank, Ltd.
(sub-trustee, with Sumitomo Mitsui Trust Bank, Limited astrustee)
30,000,000 common shares

Delegation of power to resolve . . . . . . . . .

In addition to the matters set forth above, the terms of thedisposition and any other matters required in connection
with the disposition of treasury stock will be resolved by the
Board of Directors.

(2) Repurchase of stock
At a meeting of the Board of Directors held on June 17, 2014, TMC resolved to repurchase shares of its
common stock pursuant to Article 156 of the Companies Act, as applied pursuant to Article 165, Paragraph 3 of
the Companies Act, as set forth below.
Reason for repurchasing stock The repurchase will be made to avoid the dilution of TMC’s shares triggered by the disposition of treasury
stock described in (1) above, and to effect capital efficiency and agile capital policy in view of the management
environment.
Details of matters relating to repurchase Period of repurchase: From July 1, 2014 to August 29, 2014
Kind of stock to be repurchased . . . . . . . . . . . . . . . . .

Common stock of TMC

Number of shares to be repurchased . . . . . . . . . . . . .

20,000,000 shares (maximum)

Total purchase price for repurchase of shares . . . . . .

¥120,000 million (maximum)

Method of acquisition . . . . . . . . . . . . . . . . . . . . . . . .

Discretionary trading by a securities company

F-74

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Period of repurchase: From September 10, 2014 to October 31, 2014
Kind of stock to be repurchased . . . . . . . . . . . . . . . . .

Common stock of TMC

Number of shares to be repurchased . . . . . . . . . . . . .

20,000,000 shares (maximum)

Total purchase price for repurchase of shares . . . . . .

¥120,000 million (maximum)

Method of acquisition . . . . . . . . . . . . . . . . . . . . . . . .

Market purchase through a trust bank

Period of repurchase: From November 10, 2014 to December 22, 2014
Kind of stock to be repurchased . . . . . . . . . . . . . . . . .

Common stock of TMC

Number of shares to be repurchased . . . . . . . . . . . . .

20,000,000 shares (maximum)

Total purchase price for repurchase of shares . . . . . .

¥120,000 million (maximum)

Method of acquisition . . . . . . . . . . . . . . . . . . . . . . . .

Market purchase through a trust bank(3) Cancellation of treasury stock
Reason for cancelling treasury stock The cancellation will be made to relieve concerns regarding the dilution of TMC’s share value due todisposition of treasury stock in the future.
Details of matters relating to cancellation Kind of stock to be cancelled . . . . . . . . . . . . . . . . . . .

Common stock of TMC

Number of shares to be cancelled . . . . . . . . . . . . . . .

30,000,000 shares

Scheduled date of cancellation . . . . . . . . . . . . . . . . . .

June 30, 2014

F-75

ITEM 19. EXHIBITS
Index to Exhibits
1.1

Amended and Restated Articles of Incorporation of the Registrant (English translation)(incorporated by reference to Exhibit 1.1 to Toyota’s Annual Report on Form 20-F for the fiscal
year ended March 31, 2013 filed with the SEC on June 24, 2013 (file no. 001-14948))

1.2

Amended and Restated Regulations of the Board of Directors of the Registrant (English
translation) (incorporated by reference to Exhibit 1.2 to Toyota’s Annual Report on Form 20-F
for the fiscal year ended March 31, 2013 filed with the SEC on June 24, 2013
(file no. 001-14948))

1.3

Amended and Restated Regulations of the Audit & Supervisory Board of the Registrant (English
translation) (incorporated by reference to Exhibit 1.3 to Toyota’s Annual Report on Form 20-F
for the fiscal year ended March 31, 2013 filed with the SEC on June 24, 2013
(file no. 001-14948))

2.1

Amended and Restated Share Handling Regulations of the Registrant (English translation)(incorporated by reference to Exhibit 2.1 to Toyota’s Annual Report on Form 20-F for the fiscal
year ended March 31, 2009 filed with the SEC on June 24, 2009 (file no. 001-14948))

2.2

Form of Deposit Agreement among the Registrant, The Bank of New York (predecessor of The
Bank of New York Mellon), as depositary, and the owners and beneficial owners from time totime of American Depositary Receipts, including the form of American Depositary Receipt(incorporated by reference to Exhibit 1 to Toyota’s Registration Statement on Form F-6, filedwith the SEC on November 7, 2006 (file no. 333-138477))

2.3

Form of ADR (included in Exhibit 2.2)

8.1

List of Principal Subsidiaries (See “Organizational Structure” in “Item 4. Information on the
Company”)

11.1

Code of Ethics of the Registrant applicable to its directors and managing officers, including its
principal executive officer, principal financial officer, principal accounting officer or controller,
or persons performing similar functions (English translation) (incorporated by reference to
Exhibit 11.1 to Toyota’s Annual Report on Form 20-F for the fiscal year ended March 31, 2011
filed with the SEC on June 24, 2011 (file no. 001-14948))

12.1

Certifications of the Registrant’s Chairman of the Board and Executive Vice President, Memberof the Board pursuant to Section 302 of the Sarbanes-Oxley Act

13.1

Certifications of the Registrant’s Chairman of the Board and Executive Vice President, Memberof the Board pursuant to Section 906 of the Sarbanes-Oxley Act

15.1

Consent of Independent Registered Public Accounting Firm

101.INSXBRL Instance Document

101.SCHXBRL Taxonomy Extension Schema

101.CALXBRL Taxonomy Extension Calculation Linkbase

101.DEFXBRL Taxonomy Extension Definition Linkbase

101.LABXBRL Taxonomy Extension Label Linkbase

101.PREXBRL Taxonomy Extension Presentation Linkbase

135

SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has
duly caused and authorized the undersigned to sign this annual report on its behalf.
TOYOTA MOTOR CORPORATION
By:
Name:
Title:

Date: June 24, 2014/s/

TAKUO SASAKI
Takuo Sasaki
Managing Officer

Exhibit 12.1
CERTIFICATIONSI, Takeshi Uchiyamada, certify that:1.

I have reviewed this annual report on Form 20-F of Toyota Motor Corporation (the “Company”);

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit tostate a material fact necessary to make the statements made, in light of the circumstances under whichsuch statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in thisreport, fairly present in all material respects the financial condition, results of operations and cash
flows of the Company as of, and for, the periods presented in this report;

4.

The Company’s other certifying officer and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) andinternal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for
the Company and have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls andprocedures to be designed under our supervision, to ensure that material information relating to
the Company, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared;(b) Designed such internal control over financial reporting, or caused such internal control overfinancial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;(c) Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented inthis report our conclusions about the effectiveness of the disclosure controls and procedures, as ofthe end of the period covered by this report based on such evaluation; and(d) Disclosed in this report any change in the Company’s internal control over financial reporting that
occurred during the period covered by the annual report that has materially affected, or isreasonably likely to materially affect, the Company’s internal control over financial reporting; and5.

The Company’s other certifying officer and I have disclosed, based on our most recent evaluation ofinternal control over financial reporting, to the Company’s auditors and the Audit & Supervisory Board(or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the Company’s ability torecord, process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have asignificant role in the Company’s internal control over financial reporting.

Date: June 24, 2014
/S/

TAKESHI UCHIYAMADA
Takeshi Uchiyamada
Chairman of the Board
Toyota Motor Corporation

CERTIFICATIONS
I, Nobuyori Kodaira, certify that:1.

I have reviewed this annual report on Form 20-F of Toyota Motor Corporation (the “Company”);

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit tostate a material fact necessary to make the statements made, in light of the circumstances under whichsuch statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in thisreport, fairly present in all material respects the financial condition, results of operations and cash
flows of the Company as of, and for, the periods presented in this report;

4.

The Company’s other certifying officer and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) andinternal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for
the Company and have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls andprocedures to be designed under our supervision, to ensure that material information relating to
the Company, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared;(b) Designed such internal control over financial reporting, or caused such internal control overfinancial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;(c) Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented inthis report our conclusions about the effectiveness of the disclosure controls and procedures, as ofthe end of the period covered by this report based on such evaluation; and(d) Disclosed in this report any change in the Company’s internal control over financial reporting that
occurred during the period covered by the annual report that has materially affected, or isreasonably likely to materially affect, the Company’s internal control over financial reporting; and5.

The Company’s other certifying officer and I have disclosed, based on our most recent evaluation ofinternal control over financial reporting, to the Company’s auditors and the Audit & Supervisory Board(or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the Company’s ability torecord, process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have asignificant role in the Company’s internal control over financial reporting.

Date: June 24, 2014/S/NOBUYORI KODAIRA

Nobuyori Kodaira
Executive Vice President, Member of the Board
Toyota Motor Corporation

Exhibit 13.1
CERTIFICATION
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
each of the undersigned officers of Toyota Motor Corporation, a Japanese corporation (the “Company”), does
hereby certify that, to such officer’s knowledge:
1. The accompanying Annual Report of the Company on Form 20-F for the period ended March 31, 2014
(the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of1934; and2. Information contained in the Report fairly presents, in all material respects, the financial condition andresults of operations of the Company.

By:

/s/

TAKESHI UCHIYAMADA

Name:
Title:

Takeshi Uchiyamada
Chairman of the Board

Date: June 24, 2014

By:
Name:
Title:/s/NOBUYORI KODAIRA

Nobuyori Kodaira
Executive Vice President, Member of the Board

Date: June 24, 2014
(A signed original of this written statement required by Section 906 has been provided to Toyota Motor
Corporation and will be retained by Toyota Motor Corporation and furnished to the Securities and Exchange
Commission or its staff upon request.)

Exhibit 15.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8(No. 333-125977, 333-107322, 333-143955, 333-160081 and 333-175377) of Toyota Motor Corporation of ourreport dated June 24, 2014 relating to the financial statements and the effectiveness of internal control overfinancial reporting, which appears in this Form 20-F.
/s/ PricewaterhouseCoopers Aarata
Nagoya, Japan
June 24, 2014