As filed with the U.S. Securities and Exchange Commission on June 23, 2022

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 1934
OR
È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: March 31, 2022
OR
‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
‘ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 001-14948

TOYOTA JIDOSHA KABUSHIKI KAISHA(Exact name 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)
Masayoshi Hachisuka
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:
Trading Symbol(s)Name of each exchange on which registered
Title of each class
American Depositary Shares*
TM
The New York Stock Exchange
Common Stock*** Each American Depositary Share representing ten 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 the annual report:
13,778,301,544 shares of common stock (including 295,944,975 shares of common stock in the form of American Depositary Shares) as of March 31, 2022
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 of 1934 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 every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files):Yes È No ‘
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See
definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer È
Accelerated filer ‘
Non-accelerated filer ‘
Emerging growth company ‘
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use theextended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the
Exchange Act:‘† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards
Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control
over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its
audit report.
È
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP ‘
International Financial Reporting Standards as issued by the International Accounting Standards Board È
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 Exchange Act): Yes ‘ No È

ITEM 1.

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

1

ITEM 2.

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

1

ITEM 3.

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

1[RESERVED] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CAPITALIZATION AND INDEBTEDNESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
REASONS FOR THE OFFER AND USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . .
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1
1
1
1

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

6

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

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

6
6
45
46

ITEM 4A.

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

47

ITEM 5.

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

47

OPERATING RESULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LIQUIDITY AND CAPITAL RESOURCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES . . . . . . . . . . . . . . . . .
TREND INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CRITICAL ACCOUNTING ESTIMATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

47
70
74
76
76

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

76

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

76
83
87
89
89

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

91

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

91
92
92

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

92

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

92
94

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

94

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

94
94
94
95
95
95

ITEM 10.

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

95

SHARE CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MEMORANDUM AND ARTICLES OF ASSOCIATION . . . . . . . . . . . . . . . . . . . . . . . . .
MATERIAL CONTRACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EXCHANGE CONTROLS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DIVIDENDS AND PAYING AGENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
STATEMENT BY EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DOCUMENTS ON DISPLAY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

95
95
102
102
106
112
112
112

3.A
3.B
3.C
3.D
ITEM 4.

5.A
5.B
5.C
5.D
5.E
ITEM 6.
6.A
6.B
6.C
6.D
6.E
ITEM 7.
7.A
7.B
7.C
ITEM 8.
8.A
8.B
ITEM 9.

10.A
10.B
10.C
10.D
10.E
10.F
10.G
10.H

10.I

SUBSIDIARY INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

113

ITEM 11.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK . . .

113

ITEM 12.

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

113

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

DEBT SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
WARRANTS AND RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
OTHER SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
AMERICAN DEPOSITARY SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113

ITEM 13.

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

115

ITEM 14.

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

115

ITEM 15.

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

115

ITEM 16.

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

116

ITEM 16A.

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

116

ITEM 16B.

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

116

ITEM 16C.

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

117

ITEM 16D.

EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES . . .

118

ITEM 16E.

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

118

ITEM 16F.

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

119

ITEM 16G.

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

119

ITEM 16H.

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

122

ITEM 16I.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENTINSPECTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

122

ITEM 17.

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

123

ITEM 18.

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

123

ITEM 19.

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

124

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. Unless the context otherwise requires or as otherwise expressly stated, references inthis prospectus supplement to “Toyota,” “we,” “us,” “our” and similar terms refer to Toyota Motor Corporationand its consolidated subsidiaries, as a group.
Toyota’s consolidated financial statements in this annual report have been prepared in accordance with
International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board(“IASB”). The term “IFRS” also includes International Accounting Standards (“IASs”) and the related
interpretations of the interpretations committees (SIC and IFRIC).
CAUTIONARY STATEMENT WITH RESPECT TO FORWARD-LOOKING STATEMENTS
Written forward-looking statements may appear in documents filed with the SEC, including this annual
report, documents incorporated by reference, reports to shareholders 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), stock prices 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, as well as information security;(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;(xiv) the impact of natural calamities, epidemics, political and economic instability, fuel shortages orinterruptions in social infrastructure, wars, terrorism and labor strikes, including their negative effect on
Toyota’s vehicle production and sales; and(xv) the impact of climate change and the transition towards a low-carbon economy.

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 [RESERVED]
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. 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 automotive industry, possibly resulting in industry reorganizations.
Factors affecting competition include product quality and features, safety, reliability, fuel economy, the amountof time required for innovation and development, pricing, customer service and financing terms. Increased
competition may lead to lower vehicle unit sales, which may result in a further downward price pressure andadversely affect Toyota’s financial condition and results of operations. Toyota’s ability to adequately respond to
the recent rapid changes in the automotive market and to maintain its competitiveness will be fundamental to its
future success in existing and new 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 economic, social and political 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.
Reviewing the general economic environment for fiscal 2022, the economy appeared to be headed toward a
recovery due to fiscal and monetary policies adopted by various countries that have supported the economy,
coupled with the gradual relaxation of strict COVID-19 restrictions. While the automotive market has been
subjected to global production constraints due to components shortages caused by a tightening of global supplyof, and increasing demand for, semiconductors and the impact of COVID-19, continued steady demand incountries such as the U.S., China, and Japan resulted in a recovery from last year. Geopolitical tensions that have1

increased since February 2022 have had a ripple effect globally in such forms as soaring materials prices,
including for raw materials and parts and components for Toyota’s vehicles, which has made it more difficult toforesee the future.
Changes in demand for automobiles are continuing, and it is unclear how this situation will transition in the
future. Toyota’s financial condition and results of operations may be adversely affected if the changes in demand
for automobiles continues or progresses further. Demand may also be affected by factors directly impacting
vehicle price or the cost of purchasing and operating vehicles such as sales and financing incentives, prices ofraw materials and parts and components, cost of fuel and governmental regulations (including tariffs, importregulation 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 and results of operations.
Toyota’s future success depends on its ability to offer new, innovative and competitively priced products thatmeet customer 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, reliability and sustainability. The timely introduction of new vehicle
models, at competitive 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, sustainability and otherfeatures 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 atimely manner with its available technology, intellectual property, sources of raw materials and parts andcomponents, 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, sustainability and other 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 resultsof 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 that
Toyota will be able to develop sales techniques and distribution networks that effectively adapt to changing
customer preferences or changes in the geopolitical and 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 such reasons as its inability to provide safe, high-quality
products or as a result 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.

2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.
Irrespective of the number of suppliers, Toyota’s ability to continue to obtain supplies from its suppliers in atimely 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, andToyota’s ability to effectively compete and obtain competitive prices from suppliers. Circumstances that may
adversely affect such abilities include geopolitical tensions as well as related governmental actions such as
economic sanctions.
A loss of any single or limited source supplier, or inability to obtain supplies from suppliers in a timely andcost-effective manner, could lead to increased costs or delays or suspensions in Toyota’s production anddeliveries, 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 prices, an increase in the ratio of credit losses and increased funding costs are
additional factors which may impact Toyota’s financial services operations. If Toyota is unable to adequately
respond to the changes 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, as well as information
security.
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 bevulnerable to damage, disruptions, shutdowns due to unauthorized access or attacks by hackers, computerviruses, 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 assoftware development or cloud computing vendors, power shortages and outages, and utility failures or othercatastrophic events like natural disasters. In particular, cyber-attacks or other intentional malfeasance are
increasing in terms of intensity, sophistication and frequency, and Toyota has been and expects to continue to be
the subject of such attacks. Such attacks could 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 effecton Toyota’s brand image and its financial condition and results of operations. Moreover, similar attacks on
Toyota’s suppliers and business partners have had, and may in the future have, a similar negative impact on
Toyota.
3

Toyota is exposed to risks associated with climate change, including the physical risks of climate change andrisks from the transition to a lower-carbon economy.
Risks associated with climate change are subject to increasing societal, regulatory and political focus in
Japan and globally. These risks include the physical risks of climate change and risks from the transition to alower-carbon economy.
The physical risks of climate change include both acute, event-driven risks such as those relating tohurricanes, floods and tornadoes, as well as longer-term weather patterns and related effects, such as sustained
higher temperatures, sea level rise, drought and increased wildfires. Despite Toyota’s contingency planning,large-scale disasters due to extreme weather conditions have in the past harmed, and may in the future again
harm, Toyota’s employees or its facilities and other assets, as well as those of Toyota’s suppliers and otherbusiness partners, thereby adversely affecting Toyota’s production, sales or other operational capacities. Largescale disasters may also adversely affect the financial condition of Toyota’s customers, and thereby demand forits products and services.
Transition risks are those attributable to regulatory, technological and market changes to address the
mitigation of, or adaptation to, climate-related risks. For example, Toyota is subject to the risk of changes incustomer demand for vehicles due to such factors as changes in laws, regulations and government policies
relating to climate change, technological innovation to address climate change, and new entrants into theautomobile industry that seek to capitalize on changing market dynamics. Changes in customer demand may
pose ancillary risks and challenges, such as Toyota’s having to establish new, or enhance existing, supply
networks in order to source the raw materials, parts and components necessary for it to manufacture the products
then in demand at desired volumes and at competitive costs. Toyota may incur significant costs and expenses as aresult of the materialization of such risks, or in its efforts to mitigate or adapt to such risks. Toyota’s inability todevelop and offer products that meet customers’ preferences and demand in a timely manner could result in alower market share and reduced sales volumes and margins, and may adversely affect Toyota’s 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 19 and 20 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 raw materials prices that Toyota and Toyota’s suppliers use in manufacturing their products orparts and components such as steel, precious metals, non-ferrous alloys including aluminum, and plastic parts,
4

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. For example, Toyota believes that increases in the prices of raw materials, as well
as related logistics and other costs, had a significant negative impact on its results for fiscal 2022, and currently
expects that they will have a greater negative impact on its results for fiscal 2023.
A 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.
Regulatory, Legal, Political and Other Risks
The automotive industry is subject to various governmental regulations and actions.
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
and governmental regulations. If Toyota launches products that result in safety measures such as recalls(including where parts related to recalls or other measures were procured by Toyota from a third party), Toyota
may incur various costs including significant costs for free repairs. Many governments also impose tariffs andother trade barriers, taxes and levies, or enact price or exchange controls. Toyota has incurred significant costs in
response to governmental regulations and actions, including costs relating to changes in global trade dynamics
and policies, and expects to incur such costs in the future. Furthermore, new legislation or regulations or changes
in existing legislation or regulations may also subject Toyota to additional costs in the future. If Toyota incurs
significant costs related to implementing safety measures or responding to laws, regulations and governmental
actions, 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 issues relating to the topics discussed in “—The automotive industry is subject to various
governmental regulations and actions,” as well as product liability and infringement of intellectual property.
Toyota may also be subject to legal proceedings brought by its shareholders and governmental proceedings andinvestigations. Toyota is in fact currently 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 affectToyota’s reputation, brand image, 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 for legal proceedings, please see “Information on the
Company — Business Overview — Legal Proceedings.”
Toyota may be adversely affected by natural calamities, epidemics, political and economic instability, fuelshortages or interruptions in social infrastructure, wars, terrorism and labor strikes.
Toyota is subject to various risks associated with conducting business worldwide. These risks include
natural calamities; epidemics; political and economic instability; fuel shortages; interruption in social
5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 in which Toyota purchases materials, parts and components and supplies for the manufacture of
Toyota products or in 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.
Toyota has been, and is expected to continue to be, adversely affected by the spread of COVID-19.
The global spread of COVID-19 and the responses to it by governments and other stakeholders haveadversely affected Toyota in a number of ways. For example, for reasons such as government directives as wellas anticipated reduced demand for its vehicles, Toyota has temporarily suspended, or intends to temporarilysuspend, production of automobiles and components at selected plants in Japan and overseas. COVID-19 has also
affected, and is expected to continue to affect, the businesses of Toyota dealers and distributors, as well as certainof Toyota’s third-party suppliers and business partners. In addition, the global spread of COVID-19 and related
matters have adversely affected businesses in a wide variety of industries, as well as consumers, all of which
negatively impacted demand for Toyota’s vehicles and related financial services.
The duration of the COVID-19 outbreak and the resulting future effects are uncertain, and the foregoing
impacts and other effects not referenced above, as well as the ultimate impact of the COVID-19 outbreak, aredifficult to predict. The impact of the COVID-19 outbreak and the resulting future effects may thus adversely
affect Toyota’s financial condition and results of operations in later periods as well.
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 of Japan (the “Companies Act”). Toyota
commenced operations in 1933 as the automobile division of Toyota Industries Corporation (formerly Toyoda
Automatic Loom Works, Ltd.). Toyota became a separate company in August 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, 2022, Toyota operated through 559 consolidated subsidiaries (including structured entities) and 169
associates and joint ventures accounted for by the equity method.
See “— Business Overview — Capital Expenditures and Divestitures” for a description of Toyota’s
principal capital expenditures and divestitures between April 1, 2020 and March 31, 2022 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.
The SEC maintains a website (https://www.sec.gov/) that contains reports, proxy and information
statements, and other information regarding issuers that file electronically with the SEC. Toyota also maintains a
website (https://global.toyota/en/) through which its annual reports on Form 20-F and certain of its other SEC
filings may be accessed. Information contained on or accessible through Toyota’s website is not part of thisannual report on Form 20-F.
4.B BUSINESS OVERVIEW
Toyota primarily conducts business in the automotive industry. Toyota also conducts business in financeand other industries. Toyota sold 8,230 thousand vehicles in fiscal 2022 on a consolidated basis. Toyota had sales
revenues of ¥31,379.5 billion and net income attributable to Toyota Motor Corporation of ¥2,874.6 billion in
fiscal 2022.
6

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,
2020
2021
2022

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

26,770,379
2,172,854
923,314

24,597,846
2,137,195
479,553

28,531,993
2,306,079
541,436

Toyota’s automotive operations include the design, manufacture, assembly and sale of passenger vehicles,
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 business also provides mainly retail installment credit and leasing
through the purchase of installment and lease contracts originated by Toyota dealers. Related to Toyota’s
automotive operations, Toyota is working towards having all of its vehicles become connected vehicles, creating
new value and reforming businesses by utilizing big data obtained from those connected vehicles, andestablishing new mobility services. Toyota’s all other operations business segment includes the information
technology related businesses including a web portal for automobile information called GAZOO.com.
Toyota sells its vehicles in approximately 200 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,
2020
2021
2022

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

9,503,238
10,419,869
3,133,227
4,785,489
2,024,724

8,587,193
9,325,950
2,968,289
4,555,897
1,777,266

8,214,740
10,897,946
3,692,214
5,778,115
2,796,493* “Other” consists of Central and South America, Oceania, Africa and the Middle East.
During fiscal 2022, 23.4% of Toyota’s automobile unit sales on a consolidated basis were in Japan, 29.1%
were in North America, 12.4% were in Europe and 18.7% were in Asia. The remaining 16.4% of consolidated
unit sales were in other markets.
The Worldwide Automotive Market
Toyota estimates that annual worldwide vehicle sales totaled approximately 83 million units in 2021.
Automobile sales are affected by a number of factors including:•social, political and economic conditions;•introduction of new vehicles and technologies;•

costs incurred by customers to purchase and operate automobiles; and•the availability of parts and components that Toyota needs to manufacture its products.

These factors can cause consumer demand to vary substantially from year to year in different geographic
markets and in individual categories of automobiles.
7Global economic activity headed to recovery in fiscal 2022 underpinned by each country’s fiscal andmonetary policies as well as the gradual relaxation of the strict restrictions due to COVID-19. The automobile
market faced global production constraints due to a lack of supply of parts and components caused by the impact
of COVID-19, and also the tightening of global supply of, and increasing demand for, semiconductors. However,there was steady demand in countries such as the U.S., China and Japan, resulting in a recovery compared to lastyear. In the short term, the impact of geopolitical tensions that arose since February 2022 spread worldwide in
the form of price increases of products, making it even more difficult to foresee the future.
The United States has seen sustained economic activity due to progress made on vaccinations and thefavorable employment and wage environment, and government economic policies have contributed to acontinued recovery based on strong domestic demand. Monetary policy has now shifted toward interest rates
increases in order to curb overheating inflation. In Europe, while progress has been made on vaccinations, there
is once again an increasing number of COVID-19 cases, which has led to restrictions on economic activity.
Further, Europe has been the most affected by the geopolitical tensions that arose beginning in February 2022,
which has blunted the momentum of recovery. While Japan has made rapid progress on vaccinations since themiddle of 2021, in the midst of cool-downs and resurgences in the number of COVID-19 cases, the economy has
stagnated due to policies restricting economic activity, as well as reduced production activity caused by supply
constraints. In China, despite government support, its “zero-COVID” policy to combat a resurgence of
COVID-19 cases has severely restricted economic activity since the beginning of 2022, leading to a sharp
deceleration of the economy. While slower than developed countries, progress with vaccinations in emerging
economies is gradually being made, and infection control measures are being eased, leading to a gradual
recovery; however, some countries, including Brazil, have seen a slight decrease in consumption due to inflation
taking hold.
Amid this environment, the automobile market slightly recovered overall in 2021 compared to the previous
year when the market faced a sizable drop due to COVID-19, but it continues to be a more difficult year thanusual.
In the medium- to long-term, Toyota expects the automotive market to continue growing driven principallyby growth in China and other emerging markets. However, global competition is expected to be severe, as thepace of technological advancement and development of new products, particularly related to electrification,quickens further, including in response to a heightened global awareness of the environment with a view tocarbon neutrality and the strengthening of various standards in line with such awareness.
In 2021, China, North America, Europe and Asia were the world’s largest automotive markets. In North
America, new vehicle sales were approximately 17.86 million units, an increase from the previous year. In
Europe, new vehicle sales also increased from the previous year at approximately 16.87 million units. In Asia
(including India but excluding Japan and China), new vehicle unit sales also increased from the previous year to
approximately 9.22 million units. The share of each market across the globe, which Toyota estimates based on
the available automobile sales data in each country and region information, was 31% for China, 22% for North
America (21% excluding Mexico and Puerto Rico), 20% for Europe and 11% for Asia. In China, new vehicle
sales increased from the previous year to approximately 25.22 million units.
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, as well as price or exchange controls as a means ofcreating jobs, protecting domestic producers or influencing their balance of payments. Changes in regulatory
requirements and other government-imposed restrictions can limit or otherwise burden an automaker’s
operations. Government laws and regulations can also make it difficult to repatriate profits to an automaker’s
home country.
8

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.
Over the years, there have been many global business alliances and investments entered into between
manufacturers in the global automotive industry. There are various reasons behind these transactions including
the need to address excessive global capacity in the production of automobiles, and the need to reduce costs andimprove efficiency by increasing the number of automobiles produced using common vehicle platforms and by
sharing research and development expenses for environmental and other technology, the desire to expand acompany’s global presence through increased size; and the desire to expand into particular segments orgeographic markets.
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 Philosophy
The automotive industry is experiencing a once-in-a-century transformation. We are now striving totransform ourselves into a mobility company. In an era which it is hard to predict the future, Toyota has reflectedon the path it has taken thus far and has formulated the “Toyota Philosophy” as a roadmap for the future.
Toyota’s mission is “Producing Happiness for All” by expanding the possibilities of people, companies andcommunities through addressing the challenges of mobility as a mobility company. In order to do so, Toyota willcontinue to create new and unique value with various partners by relentlessly committing towards monozukuri(manufacturing), and by fostering imagination for people and society.

ToyodaPrinciples

Producing Happiness for All
Using our technology, we work towards a future of
MISSION
convenience and happiness, available to allPartnerships
SoftwareHardware

VISION

Creating Mobility for All
Toyota strives to raise the quality and availability ofmobility so that individuals, businesses, municipalities
and communities can do more, while achieving asustainable relationship with our planet

VALUE

We unite our three strengths (Software, Hardware andPartnerships) to create new and unique value thatcomes from the Toyota Way

Value

The Toyota Way
Missionll
Producing Happiness for A
VisionlCreating
Mobility for Al

9

Toyota Production System (“TPS”)
TPS is imbued with the desire of Sakichi Toyoda, the founder of the Toyota family of companies, andKiichiro Toyoda, the founder, “to make someone’s work easier.”
TPS was established based on two concepts: Jidoka, which can be loosely translated as “automation with ahuman touch,” — an idea of stopping equipment immediately when a problem occurs, in order to prevent
defective products from being produced — and “Just in Time” (“JIT”), a concept based on the idea that “eachprocess produces only what is needed for the next process in a continuous flow.” Based on the basic philosophiesof jidoka and JIT, through TPS, Toyota aims to efficiently and quickly produce vehicles of sound quality, one ata time, to fully satisfy customer requirements.
Toyota believes that improving upon TPS is essential to its future survival. Currently, TPS is being
introduced into development departments and administrative departments. Toyota intends to apply TPS to its
development departments so that it can be used not only to shorten development times and reduce costs, but also
to develop our human resources, thus leading to the manufacturing of ever-better cars that customers will love.
Selected Initiatives
As the automotive industry faces a once-in-a-century transformational period and at a time when the rightanswers are elusive, we are committed to “Producing Happiness for All” together with our stakeholders,
underpinned by the spirit of “For the Sake of Others” which we have maintained since our founding. We believe
management practices that value what makes us Toyota will lead to sustained efforts to achieve the aims of the
Sustainable Development Goals, formally adopted by the United Nations in September 2015 (the “SDGs”), to“build a better world” while ensuring that “no one will be left behind.”
We are accelerating our shift toward product-centered management under the “making ever-better cars”
initiative, efforts to achieve carbon neutrality, and endeavors to develop essential technologies such as softwareand connected vehicles. The following details the areas in which we particularly wish to focus our efforts.
Product-centered Management
We have historically offered a wide range of vehicles aimed at meeting customer needs. One of the key
aspects in our car making is sports cars, which serves as the front line for passing down the skills and knowledge
that will be passed down as well as for human resource development. The roots of our motorsports activities canbe traced back to the founder Kiichiro Toyoda’s words, “racing is indispensable to the development of Japan’s
automobile manufacturing industry.” We have created sports cars that bring together the most cutting-edge
technological prowess of the era, such as the “Publica Sports,” “Sports 800,” and “2000GT” in the 1960s, and the“Supra,” “MR2,” “Celica,” “Corolla Levin,” and “Sprinter Trueno” in the 1980s. We developed the “LFA” in the2010s, which is the cornerstone of our vehicles today. The “GR Yaris” is our attempt to flip the approach of
making race cars from mass-production cars by designing a race car from the ground up. From the initial stagesof development, we reached out to professional drivers to have them drive the car for repeated cycles of
evaluation and improvement. As a result, the car evolved into one that is fun to drive.
The other key aspect is long-selling products. Our long-selling cars have been beloved by customers as anintegral part of their lives, and must continually evolve to meet the needs of the times. The “Vitz,” as it was
known in Japan, was unified under the name Yaris, which had taken root overseas, and we expanded its lineup to
include the “GR Yaris” and “Yaris Cross.” Similarly, the “Corolla” lineup saw the addition of the “CorollaSport” and “Corolla Cross.” We will promote our strategy to build a lineup tailored to current needs whileleveraging the brand strength of our long sellers.
In order to practice product-centered management, our president, President Toyoda has driven thetransformation of Toyota since taking office, based on the three pillars to make ever-better cars: i) TNGA
(Toyota New Global Architecture), which facilitates the realization of excellent performance in terms of10

fundamental car functions — moving, turning, and stopping, ii) a company whose people are always passionate
about, and have a sense of responsibility with respect to, the full product lineup and each and every car, and iii) a
master driver in top management who takes final responsibility for assessing whether the cars we put out will
satisfy our customers. We will continue aiming to be the best company “in town” by creating better cars thatbring smiles to customers’ faces.
Initiatives to Achieve Carbon Neutrality
In April 2021, Toyota announced that it would address global-scale challenges to achieve carbon neutrality
by 2050. To achieve carbon neutrality, Toyota intends to continue implementing electrified vehicle strategies that
contribute to reducing CO2 emissions throughout the product life cycle while coordinating with national
governments regarding energy policies, including renewable energy and charging infrastructure, and public
policies, including purchasing grants, supplier support, and battery recycling systems.
Since launching the “Prius” — the world’s first mass-production hybrid electric vehicle (“HEV”) — in
1997, we have sold a cumulative total of over 20 million electrified vehicles worldwide, achieving a CO2
emissions reduction of over 160 million tons according to our estimates. To continue accelerating the realizationof carbon neutrality, we will respond deftly to changes in customer demand trends by providing a diverse set of
product options, taking into consideration region-specific electric power conditions. We are promoting ourvehicle electrification strategy from all directions, including battery electric vehicles (“BEVs”), HEVs, plug-in
hybrid electric vehicles (“PHEVs”), and fuel cell electric vehicles (“FCEVs”). In December 2021, we announced
our aim of developing 30 types of BEVs and achieving a full lineup in each segment globally by 2030 to achieve
global sales of 3.5 million BEVs per year by 2030. We also announced that Toyota plans to invest, by 2030, a
total of approximately 8 trillion yen in capital expenditures, research and development expenses and otherinvestments relating to electrification. Of the planned 8 trillion yen, approximately 4 trillion yen is expected torelate to BEVs; of the approximately 4 trillion yen towards BEVs, approximately 2 trillion yen is planned to berelated to batteries. Batteries are crucial components of electrified vehicles. To develop batteries that ourcustomers can use with peace of mind, we focus on producing batteries that stand out for five factors and strike abalance among them: safety, long service life, high quality, quality at an affordable price, and outstanding
performance. We will work on the integrated development of vehicles and batteries to reduce costs. We are also
making use of our internal combustion engine technology. The hydrogen engine, which draws on many decadesof tried and tested technology, has the potential of contributing to carbon neutrality. We are repeatedly assessing
and improving the hydrogen engine-powered Corolla in a motorsports environment, where development takes
place on a much shorter timeline than it does for mass-produced automobiles. In addition to developing vehicles,
we need to expand options for creating, distributing, and using energy. Through participation in the Super Taikyu
Series, we are taking on this challenge together with many comrades gained in and outside of the auto industry
with the will and passion for collaboration.
In the production field, we announced that we aim to achieve carbon neutrality at our global plants by 2035.
We are promoting the reduction of CO2 emissions through the introduction of renewable energy and hydrogen atplants in addition to comprehensive energy conservation.
For a further discussion of Toyota’s initiatives, see “Automotive Operations — BEV Strategies,” “Automotive
Operations — The Development and Supply of Batteries” and “Automotive Operations — Hydrogen Engine.”
Software and Connected Initiatives
In an era defined by “CASE,” an acronym for Connected, Autonomous / Automated, Shared, and Electric,
automobile manufacturing requires technological development in new fields such as electrification, automateddriving, and connectivity. We aim to provide new value through novel experiences and by bringing excitement tocustomers through the mobility of “people,” “goods,” and “things” as cars become more linked to information.
We believe that the vehicle development platform “Arene,” which is currently in development at Woven Alpha,11

Inc., a subsidiary of Toyota, will dramatically transform the development of software for vehicles. By enabling
the independent development of software apart from hardware, Arene leverages the strengths of hardware
cultivated by Toyota to achieve the development of safe, high-quality, and advanced software. Furthermore,
application development on Arene is also made easier, enabling users to program applications more efficiently.
The proportion of a car’s value attributable to software is growing. By developing internally the portions
central to Toyota’s future to enhance our competitiveness, we will collaborate with our partner companies toaccelerate the speed of mass production. Connected cars and connected technologies will be applied to a varietyof areas, and that which is to be connected will expand to include people, cars, communities, and society.
For a further discussion of this initiative, see “Automotive Operations — Software and Connected
Initiatives.”
Commercial Sector Initiatives
CASE technologies can only contribute to society once they become widespread. Commercial vehicles canplay important roles in CASE technology dissemination, as they travel long distances for extended periods oftime to support the economy and society and can be easily linked with infrastructure development. In April 2021,
Toyota, Isuzu Motors Limited (“Isuzu”) and Hino Motors, Ltd. (“Hino”) established Commercial Japan
Partnership Technologies (“CJPT”) with the aim to accelerate the implementation and adoption of CASE
technologies and services and thereby help address social issues and contribute to the realization of carbon
neutrality. In July 2021, Suzuki Motor Corporation (“Suzuki”) and Daihatsu Motor Co., Ltd. (“Daihatsu”)
announced that they had joined CJPT. CJPT plans to realize its aims by combining the commercial vehicle
foundations cultivated by Isuzu and Hino and the strengths of Suzuki and Daihatsu in high-quality, low-cost
manufacturing with Toyota’s CASE technologies. CJPT is currently 60% owned by Toyota, with Isuzu, Hino,
Suzuki and Daihatsu each owning 10%. CJPT will link each company’s connected technology platforms to build
a more comprehensive platform for commercial vehicles and leverage TPS to realize JIT logistics and increasetransport efficiency, thereby helping to reduce CO2 emissions.
For a further discussion of this initiative, see “Automotive Operations — Commercial Sector Initiatives.”
Woven City
“Woven City” is a human-centered city where we aim to continuously produce new value and businessmodels by utilizing the mobility of “information,” “goods,” and “people” to support daily life, by rapidly
implementing development and demonstration cycles of technologies and services. By using digital twins, which
involve reproductions of future products and technologies in a digital space for advancing development in both
real and digital forms, we are simultaneously testing a variety of options virtually before building the realversions. Woven City will be a constantly improving, ever-evolving city rooted in Toyota’s kaizen approach —thinking that there is always a better way. We will work with our partners in this quest to increase thesignificance and value of mobility, which is not only about moving people and goods but also about moving
hearts.
For a further discussion of this initiative, see “Automotive Operations — Woven City.”
Dialogue with Employees and Human Resource Development
At Toyota, management and labor unions work hand in hand to develop the economy through theautomobile industry. At talks held in March 2022, we deepened our mutual understanding on topics including
how our production will address the semiconductor shortage, the reality facing our suppliers as they work toachieve carbon neutrality, and concerns over having all members actively participate in diversifying workplaces,
using a forum akin to a management meeting but with full participation. To survive and thrive through these12uncertain times as we head into uncharted territory, we are taking action amid a rapidly changing management
environment based on the belief that there is a world of difference between where we might end up simply byletting things run their course for the next decade and how that same future might look if we continue striving to
make things better.
To enhance the overall potential of our workforce, we strive to develop human resources equipped with boththe ability to act, which is the driving force of our business, and compassion, or the ability to make efforts forothers, such as customers and teammates, and to learn respectfully from others and keep improving. We believe
we can learn a lot from athletes who lead disciplined lifestyles focused on reaching their maximum potential in
the instant it matters, as well as their commitment to serving others through contribution to their own team andtraining the next generation.
The Toyota group will keep moving forward steadily together with the 5.5 million people working in theautomotive industry in Japan, as well as various stakeholders around the world, in order to become a mobility
company. We sincerely hope that our shareholders will continue to extend their patronage and support to us.
On July 20, 2021, Toyota and TOYOTA Mobility Tokyo Inc. (“TMT”), a wholly owned subsidiary,
announced that, during certain inspections of automobiles performed as part of legally required maintenance at a
Lexus dealership in Tokyo, inspection results had been falsified to meet the standards and some of the required
inspections had been omitted. Furthermore, upon carrying out an investigation of all 4,852 dealerships, including
independent dealerships, selling Toyota and Lexus brand vehicles, across Japan, it was discovered that such
misconduct had been performed at multiple locations. There are various issues underlying these incidents,
including staff shortages, inadequate facilities, misguided attitudes toward the Japanese system of regular, legallyrequired inspections of automobiles, and an unforthcoming corporate culture. Toyota believes one of the root
causes of the misconduct is that it failed to have a full grasp of the actual conditions at dealership worksites andtheir requests.
Toyota and all of its dealerships are taking the series of incidents extremely seriously and placing a highpriority on properly carrying out certain inspections of automobiles performed as part of legally required
maintenance operations. We will make concerted efforts to regain the trust of customers and to prevent
recurrence.
Furthermore, on March 4, 2022, Hino Motors, Ltd., a publicly traded Japanese company that produces andsells commercial trucks and buses, and of which Toyota owns 50.18% of the voting interests as of March 31,
2022, announced that it has identified past misconduct in relation to its applications for certification concerning
the emissions and the fuel economy performance of certain of its engines for the Japanese market. See also“— Legal Proceedings.” Hino announced on March 11, 2022 that it established a Special Investigation
Committee commissioned with developing a clearer understanding of the matter and analyzing the root causes.
Hino has stated that the Committee will propose remedial measures concerning engine development processes
and best practice at Hino. Hino has announced that it will fully cooperate with the investigation to be conductedby the Special Investigation Committee, and expressed its commitment to taking effective remedial measures.
The Toyota group believes compliance is the foundation of management. We will work tirelessly to earn thetrust of customers and to prevent recurrence.
Automotive Operations
Toyota’s sales revenues from its automotive operations were ¥28,605.7 billion in fiscal 2022,¥24,651.5 billion in fiscal 2021, and ¥26,799.7 billion in fiscal 2020.
Toyota produces and sells passenger vehicles, minivans and commercial vehicles such as trucks. Toyota
Motor Corporation’s subsidiary, Daihatsu, produces and sells mini-vehicles and compact cars. 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 and Product Development
Toyota’s vehicles (produced by Toyota, Daihatsu and Hino) can be classified largely into electrified
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. Toyota’s luxury cars are sold in North America, Europe, Japan and other regions,primarily under the Lexus brand name.
In fiscal 2020, Toyota introduced a new Yaris model developed with the aim of creating a car with highquality ride comfort and the latest safety and security technologies, while taking advantage of the nimble
handling of a compact car. In addition, we commenced sales of the Raize, which caters to the desires ofcustomers who want to drive an SUV and load their cars with a lot of luggage, but also have a car that is compact
and easy to drive. In addition, we launched the new Highlander, a mid-size SUV suitable for city driving andmulti-passenger use, gradually in overseas markets starting with the U.S. In the Lexus brand, we premiered in
China the UX 300e, which pursues refined, pure, exhilarating performance and excellent quietness unique to
Lexus EVs, while maintaining the distinctive design, high convenience and ease of handling of the Lexus UX
compact crossover. We also unveiled the GR Yaris – a sports car imbued with the knowledge and know-how tomake it an FIA World Rally Championship winner – at the Tokyo Auto Salon 2020.
In fiscal 2021, despite the suspension of operations at factories and the suspension of business at dealers dueto the impact of COVID-19, Toyota launched various new models as planned. The new Harrier, an SUV for the
new era, was designed to resonate with the heart of the driver, with a focus on sensory quality from the first
moment of seeing, riding and driving off in it, rather than relying on utility or numerical performance. The new
Mirai featured a design that appeals to the senses, a distinctive driving experience, industry-leading innovation,and cruising range that gives peace of mind as its concept, while generating zero emissions, and will serve as a
new departure point for creating a hydrogen-based society of the future. In the Lexus brand, we launched the UX
300e, which offers the high-quality driving performance and excellent quietness unique to Lexus BEVs, the highreliability and convenience of the electrification technology cultivated in the manufacture of hybrid models, andthe distinctive design and high functionality of the Lexus UX. GR Yaris is the first Toyota vehicle developedwith the reversed concept of turning a motorsports car into a production car. The car was evaluated by MasterDriver Morizo (the racing driver name for Akio Toyoda) and non-Toyota professional drivers from the earlystages of development, and even after it was unveiled at the Tokyo Auto Salon 2020, it underwent repeatedcycles of evaluation and improvement at the circuit before it was finally launched. As a result of our efforts tofurther streamline costs following the Lehman Brothers bankruptcy and the “ever better cars manufacturing”
initiative, the compact car, Yaris, won the Car of the Year in Europe, a place where people have continued tohave strong passion for cars in its long automotive history. The award recognized Yaris’s fun-to-drive featuresand fuel efficiency as a HEV.
In fiscal 2022, Toyota launched the first-ever SUV Corolla model, Corolla Cross. Since the launch of thefirst-generation in 1966, the Corolla series has continued to evolve and embrace new challenges and has soldmore than 50 million units worldwide. The Noah and Voxy, cars supported and loved by many customers,
including families among others, were completely redesigned as minivans with the further increased ease of use
and enhanced advanced fixtures. In pursuit of a suite of features designed to enable customers to drive theirvehicles every day with joy, safety, peace of mind, and comfort, while also realizing superior environmental
performance, Toyota launched the HEV Aqua, which is the world’s first vehicle to use a high-output bipolar
nickel-hydrogen battery as an electric drive battery. With elevated levels of driving performance, design, andadvanced technology, the all-new NX, which is the first model to introduce the next generation of Lexus,
accelerates the proliferation of electrified models by being Lexus’ first-ever PHEV also offered as a HEV. In
addition, the new Toyota bZ series of BEVs that are easy to use and highly appealing, and the introduction of thisseries is a part of Toyota’s efforts to reduce CO2 emissions. Toyota launched the bZ4X, the first of the bZ series,
which offers, in addition to a comfortable cabin, a new lifestyle and the opportunity to spend precious time withfamily and friends as well as the BEV’s unique joy of driving. For motorsports cars, Toyota developed the14

GRMN Yaris as “embodiments of making ever-better motorsports-bred cars.” Toyota will further evolve its
concept of “making ever-better cars” to meet customers’ needs in countries and regions worldwide.
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.
Year Ended March 31,
2021

2020

MarketUnits%

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,239,549
North America . . . . . . . . . . . . . . . . . . . . . . . 2,713,165
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,029,249
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,600,341
Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,372,392
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,954,696

Units

%

2022
Units

%

25.0% 2,125,121
30.3 2,312,799
11.5
959,363
17.9 1,222,073
15.3 1,026,749

27.8% 1,924,185
30.3 2,393,912
12.5 1,017,099
16.0 1,542,918
13.4 1,352,311

23.4%
29.1
12.4
18.7
16.4

100.0% 7,646,105

100.0% 8,230,425

100.0%* “Other” consists of Central and South America, Oceania, Africa and the Middle East, etc.
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.
Thousands of Units
Year Ended March 31,
2021

2020

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

3,185
1,553
48.8%

2019

North America:
Total market sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Toyota sales (retail basis) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Toyota market share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe:Total market sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Toyota sales (retail basis) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Toyota market share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia (excluding China):
Total market sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Toyota sales (retail basis) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Toyota market share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15

2,901
1,505
51.9%

Thousands of Units
Year Ended December 31,
2020

2022

2,664
1,361
51.1%

2021

20,3792,757
13.5%

17,157
2,408
14.0%

17,861
2,681
15.0%

20,751
1,089
5.3%

16,638993
6.0%

16,870
1,076
6.4%

9,726
1,347
13.8%

8,181
969
11.8%

9,224
1,189
12.9%

JapanJapan is one of the leading countries with respect to technological advancements and improvements in theautomotive industry and will continue 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, FCEVs, PHEVs and HEVs, vehicles with three-seat rows and mini-vehicles. Toyota’s
consolidated vehicle sales in Japan in fiscal 2022 was 1,924 thousand units, 90.5% of that of the previous fiscal
year. Toyota endeavors to secure and maintain its significant share of and position atop, the Japanese market.
Toyota held a domestic market share (excluding mini-vehicles) on a retail basis of 48.8% in fiscal 2020, 51.9%
in fiscal 2021 and 51.1% in fiscal 2022.
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. Having 16 production sites in Japan, Toyota
supports its operations worldwide through measures such as the development of new technologies and products,
low-volume vehicles to complement local production, production of global vehicle models which straddle
multiple regions and supporting overseas factories.
North America
The North American region is one of Toyota’s most significant markets. In the region, Toyota has in recent
years reorganized its production structure and made improvements to its product lineup.
In the North American region, Toyota has a wide product lineup in every segment (excluding large trucks
and buses). Toyota sold 2,394 thousand vehicles in the region on a consolidated basis in fiscal 2022, representing
approximately 29% of Toyota’s total unit sales on a consolidated basis. The United States, in particular, is thelargest market in the North American region, accounting for 87% of Toyota’s retail sales in the region. Sales
figures for fiscal 2022 were 103.5% of that of the prior fiscal year.
Toyota’s North American production capacities include the production of vehicle models such as the RAV4,
Camry, Tacoma and Highlander through 13 manufacturing entities.
In November 2021, Toyota created Toyota Battery Manufacturing, North Carolina (“TBMNC”) as the firstplant to produce automotive batteries for Toyota in North America. When it comes online in 2025, it is expectedthat TBMNC will have four production lines, each capable of delivering enough lithium-ion batteries for 200,000
vehicles — with the intention to expand to at least six production lines for a combined total of up to 1.2 million
vehicles per year.
Toyota has five research and development centers in North America. As for vehicle development, theToyota Technical Center spearheads the design, planning, and evaluation of vehicles and parts as to their ability
to meet customer needs.
EuropeToyota’s principal European markets are Germany, France, the United Kingdom, Italy, Spain and Russia. In
the European markets, as a full-lineup car manufacturer, Toyota aims to increase its global vehicle sales with afocus on electrified vehicles (HEVs, PHEVs, FCEVs and BEVs) that suit the needs of customers and thecircumstances of each region. Toyota sold 1,017 thousand vehicles on a consolidated basis in the region in fiscal
2022, 106.0% of that of the prior fiscal year.
In terms of production, to strengthen its business setup so that it is less likely to be affected by exchange
rates, Toyota produces models such as the Corolla, Yaris and C-HR locally through seven entities in Europe. In
addition, Toyota is actively promoting production and sales measures that meet local demand by strengthening its
value chain including used car dealerships, after-sales services and finance and insurance services.
16

Asia
Toyota’s principal Asian markets are Thailand, India, Indonesia and Taiwan. Toyota sold 1,543 thousand
vehicles on a consolidated basis in the region in fiscal 2022 (including China), 126.3% of that of the prior fiscal
year.
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.
In terms of production, Toyota manufactures models such as the Hilux, Hiace, Corolla, Camry and Viosthrough 16 entities. Toyota’s plants in Thailand, not only to meet domestic demand but also to serve as a
production base for locations inside and outside of the ASEAN region.
China
Toyota has been conducting operations in China in large part 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 isconducting 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 terms of production, Toyota has been conducting a significant portion of its China business, including in
relation to the production and sales of vehicles, through joint ventures. Toyota has two major joint venture
partners in China, namely, China FAW Group Corporation and Guangzhou Automobile Group Co., Ltd. The
joint venture with China FAW Group manufactures models such as the Corolla, Vios and RAV4, and the joint
venture with Guangzhou Automobile Group Co., Ltd. manufactures models such as the Camry, Yaris andHighlander.
Total vehicle sales in the Chinese market were 25.17 million vehicles in 2021, approximately the same as
the 25.21 million vehicles in 2020. In this market, Toyota’s sales in 2021 were 1.94 million vehicles, 107.8% ofthat of the previous year. In the domestically produced passenger vehicle market in mainland China(20.78 million vehicles), Toyota had a market share of 9.3%. Toyota has been expanding the distribution network
for locally produced vehicles in cooperation with China FAW Group and Guangzhou Automobile Group under
the names Tianjin FAW Toyota Motor Co., Ltd. and Guanqi Toyota Motor Co., Ltd., respectively, and forimported vehicles, Toyota has also been expanding primarily the Lexus brand sales network. Toyota plans tofurther increase sales by expanding the number of dealers and its product lineup. In addition, as the market in
China develops and becomes more sophisticated, Toyota plans to promote so-called “Value Chain” businesses,
such as used car sales, services, financing and insurance, so as to contribute to the development of a mobility
society.
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 2022 were 1,352 thousand units, 131.7% of that of the prior fiscal
year. Toyota’s principal markets in the Four Regions are Brazil and Argentina in South and Central America,
Australia in Oceania, South Africa in Africa and Saudi Arabia in the Middle East. The core models in the Four
Regions are global models such as the Corolla, IMV (the Hilux) and Camry.
17

Toyota has seven production bases in the Four Regions. In these regions, which are expected to become
increasingly important to Toyota’s business strategy, Toyota aims to continue developing new products whichmeet the specific demands of each region, increasing production and promoting sales.
Production
Toyota and its affiliated companies produce automobiles and related components through more than 50
overseas manufacturing organizations in 27 countries and regions aside from Japan. Facilities are locatedprincipally in Japan, the United States, Canada, the United Kingdom, France, Turkey, Czech Republic, Russia,
Poland, Thailand, China, Taiwan, India, Indonesia, South Africa, Argentina and Brazil. See “Information on the
Company — Property, Plants and Equipment” for a description of Toyota’s principal production facilities.
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 line with its basic policy of manufacturing in countries or regions where there is demand and where
Toyota is truly competitive, Toyota will make efficient use of and maximize capacity utilization at its existing
plants to respond to the expanding market and will continue to focus on making efficient capital investments asnecessary.
Furthermore, Toyota will continue to place top priority on safety and quality in strengthening truecompetitiveness with the aim of achieving sustainable growth.
The following table shows Toyota’s worldwide vehicle unit production by geographic market for theperiods shown. These production figures do not include vehicles produced by Toyota’s unconsolidated affiliatedcompanies. The sales unit information elsewhere in this annual report includes sales of vehicle units produced bythese affiliated companies. Vehicle units produced by Daihatsu and Hino are included in the vehicle unit
production figures set forth below.
2020

Year Ended March 31,
2021
2022

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,413,162
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,807,289
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
674,125
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,521,551
Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
403,495

3,948,385
1,641,830
641,830
1,014,968
305,883

3,738,321
1,751,915
706,732
1,498,557
462,698

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

7,552,896

8,158,223

8,819,622* “Other” consists of Central and South America and Africa.
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.
Distribution
Toyota’s automotive sales distribution network is the largest in Japan. As of March 31, 2022, this network
consisted of 256 dealers employing approximately 110 thousand personnel and operating approximately
4.6 thousand sales and service outlets. TOYOTA Mobility Tokyo Inc. is the only dealer owned by Toyota and therest are independent.
18

Toyota believes that this extensive sales network of independent local interests has been an important factor
in its success in the Japanese market. A large number of the cars sold in Japan are purchased from salespersons
who visit customers in their homes or offices. In recent years, however, the traditional method of sales throughhome visits is being replaced by showroom sales, and the percentage of automobile purchases throughshowrooms has been gradually increasing. Toyota expects this trend to continue even after the COVID-19 related
crisis, and accordingly is working to improve its sales activities such as customer reception and meticulous
service at showrooms, as well as online sales, to increase customer satisfaction.
Sales of Toyota vehicles in Japan had been conducted through four sales channels until April 2020, but fromMay 2020 shifted to a framework where all of its Japanese-market vehicle models are made available through all
sales outlets in Japan. In addition, Toyota introduced the Lexus brand to the Japanese market in August 2005, andcurrently distributes the Lexus brand vehicles through a network of 181 new-vehicle sales outlets dedicated to the
Lexus brand in order to enhance its competitiveness in the domestic luxury automotive market. The following
table provides information on the dealer network as of March 31, 2022.
Dealers
ToyotaOwned

ChannelToyota brand . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lexus brand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 company
22 outlets

Independent

Outlets

255 companies
159 outlets

4,482 outlets
181 outlets

Outside Japan, Toyota vehicles are sold through approximately 168 distributors in approximately
204 countries and regions. Through these distributors, Toyota maintains networks of dealers. The chart below
shows the number of Toyota distributors as of March 31, 2022 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
53
1
19
17
16
56
39

5
29
4
13
15
14
48
40

BEV Strategies
On December 14, 2021, Toyota held a briefing on its BEV strategy where it announced that it would beboosting its plans for BEV sales in 2030 from 2 million to 3.5 million units, and that Lexus was aiming for BEVs
to account for 100 percent of its sales in Europe, North America, and China by the same year, followed by BEVs
accounting for 100 percent of its sales globally starting in 2035.
Toyota believes that achieving carbon neutrality means realizing a world in which all people living on thisplanet continue to live happily. We want to help realize such a world. This has been and will continue to be
Toyota’s wish and our mission as a global company. For that challenge, we need to reduce CO2 emissions asmuch as possible, as soon as possible.
Energy plays a critical role in achieving carbon neutrality. At present, the energy situation varies greatly
from region to region. That is exactly why Toyota is committed to providing a diversified range of carbon-neutral
options to meet whatever the needs and situations might be in every country and region. In this diversified anduncharted era, it is important to flexibly change the type and quantity of products produced while keeping an eye
on market trends. We believe that the reduction in lead times and high-mix, low-volume production methods that
we have cultivated through the TPS, along with the steady efforts of Japanese manufacturing, will enable us to becompetitive going forward.
19

In terms of vehicle production, we believe that all electrified vehicles can be divided into two categories,
depending on the energy that they use. One category is that of “carbon-reducing vehicles.” If the energy thatpowers vehicles is not clean, the use of an electrified vehicle, no matter what type it might be, would not result inzero CO2 emissions. The other category is that of “carbon-neutral vehicles.” Vehicles in this category run onclean energy and achieve zero CO2 emissions in the whole process of their use. We at Toyota will strive torealize such vehicles.
The Toyota brand now offers more than 100 models of engine-only vehicles, HEVs, PHEVs, and FCEVs in
more than 170 countries and regions. The Lexus brand has introduced more than 30 models of engine-only
vehicles, HEVs, and PHEVs in more than 90 countries and regions. Furthermore, we plan to expand the options
for carbon neutral vehicles by offering a full lineup of BEVs. Specifically, we plan to roll out 30 BEV models by
2030, offering a full lineup of BEVs globally in both the passenger and commercial vehicle segments.
The Development and Supply of Batteries
While promoting a full lineup of electrified vehicles, we have also been developing and manufacturing a full
lineup of batteries. These development efforts are organized by type of electrified vehicle. For HEVs, our focus
is on power output, or in other words, instantaneous power, while, when it comes to PHEVs and BEVs, our focus
is on capacity or what can be called “endurance.”
In the area of batteries, Toyota has continued to research, develop, and produce batteries in-house for many
years. In 1996, we established what is today Prime Earth EV Energy Co., Ltd. While refining our technologies
related to nickel-metal hydride batteries, we started accelerating the development of lithium-ion batteries in 2003.
Furthermore, since establishing our Battery Research Division in 2008, we have been advancing research on
solid-state batteries and other next-generation batteries. In 2020, we established Prime Planet Energy &Solutions, Inc. to accelerate integrated efforts in the battery business. Over the past 26 years, Toyota has madenearly 1 trillion yen in capital expenditures, research and development expenses and other investments to
produce more than 20 million batteries. We believe that our accumulated experience is an asset that gives us acompetitive edge. Going forward, we intend to make a total of 2 trillion yen in new capital expenditures, researchand development expenses and other investments relating to batteries, with the aim of realizing even moreadvanced, high-quality, and affordable batteries.
As for batteries for HEVs, we have been continuously upgrading nickel-metal hydride batteries andlithium-ion batteries, taking advantage of their respective characteristics. In particular, we took on the challenge
of developing a bipolar structure in the course of creating a nickel-metal hydride battery to be installed in theAqua, which underwent a full-scale redesign completed in July 2021, and have become the first in the world tocommercialize a battery of this kind as an onboard battery for driving. Compared to the batteries used in theprevious generation of the Aqua, the output density has been doubled, giving the car a powerful acceleration
sensation. We are currently engaged in development aimed at creating more-advanced lithium-ion batteries by
the second half of the 2020s.
To develop batteries that our customers can use with peace of mind, we focus on producing batteries thatbalances five factors, which stand out for their “safety,” have “long service life,” boast “high-level quality,” andare “good yet affordable” as well as capable of “outstanding performance.” For example, a longer service life
affects a vehicle’s residual value. In terms of cruising range, high energy density and high-level performance arealso necessary. On the other hand, over-emphasis on a fast charging speed may increase the danger ofoverheating or even fire and thus decrease battery safety. This concept has remained unchanged since batteries
were installed in the first-generation Prius, and it applied to all the batteries in all of our electrified vehicles.
Although Toyota is committed to balancing the five factors, too much emphasis on one could be detrimental tothe others. That is why we believe that the integrated development of batteries and vehicles is essential. How
batteries are used depends on how the vehicles in which they are installed are used. For example, theenvironments in which vehicles are operated differ according to each vehicle’s mode of use — for example, if it20

is being used as a taxi or for commuting — as well as geographic location, and these factors will affect suchconditions as charging frequency and battery temperature. Accordingly, we carry out mock driving tests thatassume a diverse range of vehicle usage in order to obtain data on actual usage environments and provide
feedback to inform the evaluation and design of batteries. To determine the balancing point of the five factors
discussed above, it is necessary to obtain driving data that includes driving conditions and usage environments,
find out what the conditions would be like if batteries were used instead, and repeatedly verify what is happening
inside the batteries. Such steady and earnest efforts for both batteries and vehicles are the secret behind Toyota’s
advantages.
To popularize BEVs, we strive to reduce costs via the integrated development of vehicles and batteries toprovide BEVs at a reasonable price. To start with, we aim to reduce the costs of batteries themselves by 30% ormore by developing materials and structures. Then, for the vehicle, we aim to improve power consumption,
which is an indicator of the amount of electricity used per unit of distance, by 30%, starting with the Toyota
bZ4X. Improved power efficiency leads to reduced requirements for battery capacity, which will result in a cost
reduction. Through this integrated development of vehicles and batteries, we aim to reduce the battery cost per
vehicle by 50% compared to the Toyota bZ4X in the second half of the 2020s.
In the near future, the energy density of conventional lithium-ion batteries per unit of weight is expected tosee its peak. Accordingly, vigorous efforts are now under way to develop next-generation lithium-ion batteries,
aiming to achieve longer service life, greater energy density, more compact size, and lower costs. At Toyota, wepush ahead with the development of such batteries by employing the following three approaches. For liquid
batteries, which use liquid electrolyte, we are taking on the challenge of realizing “material evolution” and“structural innovation.” At the same time, we are aiming to commercialize all-solid-state batteries that employ
solid electrolyte instead of liquid electrolyte. As such, our wide-ranging development efforts are aimed atcreating three types of batteries, and by the second half of the 2020s, we hope to improve the characteristics ofeach type so that we can provide batteries that can be used with peace of mind. With regard to all-solid-statebatteries, we promote development aimed at achieving higher output, longer cruising range, and shorter charging
times. In June 2020, we built a vehicle equipped with all-solid-state batteries and conducted test runs on a test
course to obtain driving data. Based on that data, we continued to make improvements, and in August 2020, we
obtained license plate registration for vehicles equipped with all-solid-state batteries and conducted test drives. In
the course of the development process, we discovered that the fast movement of ions within all-solid-statebatteries could possibly enable them to achieve higher output. On the other hand, it was revealed that thesebatteries tend to deteriorate faster due to the formation of gaps within the solid electrolyte, posing an issue ofshorter service life. Therefore, we need to continue development, mainly of solid electrolyte materials. We plan
to start the introduction of all-solid-state batteries with those for HEVs as these vehicles require high output. We
have also accumulated a wealth of know-how regarding HEVs. We intend to release these batteries to the market
promptly in order to gain customer feedback and continue to improve them.
With the rapid expansion of EV usage, we are working to build a flexible system that can stably supply therequired volume of batteries at the required time while meeting the needs of various customers in each region
around the world. To this end, we intend to establish needed technologies by conducting a certain amount of
in-house production in the pursuit of our battery development concept of achieving batteries that can be usedwith peace of mind. We will then cooperate and collaborate with partners who understand and will put into
practice our concept. We will also proceed with discussions with new partners in some regions. Our approach to
production can be described as “starting up using small basic units.” This approach draws on lessons learned
from the global financial crisis. It is difficult to notice latent risks when production is growing. Because of this,we have to take a risk-controlled approach to growth based on Toyota’s philosophy of “making only what isneeded, when it is needed, and only in the amount needed.” For example, the production of all-solid-statebatteries will start with batteries for HEVs, which we have been developing for years and that require a small
battery volume, rather than building a massive production line for batteries for BEVs, which require a larger
volume of batteries. This will not only enable us to accelerate the release of the products but also position us tobetter focus on improving manufacturing technologies. Moreover, Toyota’s strategy of “starting up using small
21

basic units” is also meant to enable the company to swiftly respond to changes arising from the arrival of a newtechnology, which often occurs in the course of a product cycle when the manufacturing costs for the old model
come down and stabilize.
In the field of FCEVs, we released the completely redesigned Mirai in December 2020. Premised on the useof an FCEV system, the development of the second generation Mirai was promoted to deliver a futuristic
premium car that will be genuinely appreciated and sought after by our customers. Specifically, we strove todeliver a vehicle that can win drivers’ hearts during and after driving, if not from the moment when they firstcatch sight of it. Moreover, Toyota aims to become a fuel cell (“FC”) system supplier supporting the realizationof a hydrogen-powered society. In line with this aim, we provide a variety of business operators with a compact
FC system module package that we have developed. This package consists of FC stacks for the secondgeneration Mirai, which boast higher performance, as well as air supply, hydrogen supply, cooling, power control
and other FC system-related parts. In North America, we have unveiled a new prototype for an FC commercial
heavy-duty truck that uses the second-generation FC system installed on the new Mirai. This truck boasts
considerably improved performance, including more powerful acceleration and flexible driving response.
Furthermore, having attained a maximum loaded weight of 80,000 pounds (approximately 36 tons) and cruising
range of 300 miles (more than 480 kilometers), the truck is designed to accommodate a range of commercial
truck needs. We intend to conduct the verification testing of this new FC truck in actual cargo transport
operations.
Hydrogen Engine
Toyota Motor Corporation announced in April 2021 that it is working on the technological development of ahydrogen engine. While FCEVs are driven by electric motors powered using electricity generated by a chemical
reaction between hydrogen and airborne oxygen, vehicles powered by hydrogen engines get their power bydirectly burning hydrogen as fuel in a modified conventional gasoline engine setup. The fuel is 100-percent purehydrogen, unmixed with gasoline. As no fossil fuels are burned, except for the combustion of minute amounts ofengine oil during driving, hydrogen engine vehicles emit nearly no CO2 when in operation. To realize carbon
neutrality, it will be important to increase people’s options without losing sight of the goal. We believe thathydrogen engine technology, which draws on many decades of tried and tested internal combustion engine
technology, has the potential to contribute significantly to carbon neutrality; it is also one option for safeguarding
engine-related employment in Japan’s automobile industry.
At the end of 2020, Master Driver Morizo (President Akio Toyoda, using his race driver name) swiftly cameto a decision: he would enter the 2021 Super Taikyu Series race driving a prototype hydrogen engine vehicle, andthereby develop the vehicle on the front line of motorsports. Development in motorsports takes place on a much
shorter timeline than it does for mass-produced automobiles. It is also more flexible. To realize carbon neutrality,
we determined that motorsports is the most appropriate venue for developing hydrogen engines. To realize
carbon neutrality, we need to expand options for creating, distributing, and using energy, and cooperation with awide range of companies will be indispensable. Through developing the hydrogen engine at the 2021 Super
Taikyu Series, we gained many friends with the requisite will and passion for such collaboration.
In cooperation with Kawasaki Heavy Industries, SUBARU CORPORATION (“SUBARU”), Mazda Motor
Corporation (“Mazda”), and Yamaha Motor Company (“Yamaha”), we announced that we would try to (1) enter
races using carbon-neutral engines (Mazda using next-generation biofuels and SUBARU and Toyota taking on
the challenge of racing in the Super Taikyu Series 2022 using biomass-derived synthetic fuel) and (2) consider
using hydrogen engines for two-wheeled vehicles (Kawasaki Heavy Industries and Yamaha initiating
consideration of the possibility of joint research). In this way, we believe that the automobile industry will
become a pacesetter promoting initiatives that play to industry strengths while aiming for the realization of acarbon-neutral society. Through this such intentional application of passion and action, the future vision for the
next 10 to 20 years will evolve. With courage and determination, we can shape this future vision and continue totake on challenges and go beyond the industry borders going forward.
22

Software and Connected Initiatives
Amid this era identified by CASE, automobile manufacturing requires technological development in suchnew fields as “electrification,” “automated driving,” and “connectivity.” Among these fields, software isbecoming an important factor in determining product appeal. Today’s cars are equipped with more than 50
electronic control units, or ECUs, and use as many as 1,000 chips. Furthermore, society has entered the age of theinternet of things, and things being connected has become the norm. Cars are also equipped with communication
devices, further advancing their electronification, and the volume of software (lines of code) used in cars is thus
growing ever larger. Facing this major transformation in the automobile industry, Toyota is paying particularattention to how cellular phones have changed over time. As the shoulder phone evolved into the feature phone
and then into the smartphone, the phone, which had become commoditized, became linked with information,
creating new value through new experiences and quickly spread around the world. This change was supported bysoftware and connected technologies. Due to the CASE revolution, cars are becoming more deeply connected tocommunities and people’s lives through information, becoming a more integral part of social systems. At thesame time, Toyota will aim to have cars be more linked to information, and through the movement of people,
goods, and things, provide new value through new experiences and by bringing excitement to customers.
When it comes to the manufacturing of cars, Toyota has a basic stance that has been handed down internallyover the years: we stick to our principles and internalize important elements by attempting to first achieve themon our own. We also continue to introduce improvements on the front lines to enhance our competitive
advantage. Since its founding, Toyota has been producing various production equipment in-house as necessary.
In the 1990s, we pursued the in-house design of ECUs and established an electronics plant, a chip plant, and abattery plant. These efforts eventually led to the commercialization of the Prius, the world’s first mass-produced
HEV. Toyota has always maintained a strong awareness of the real world regardless of the era at hand, pursued
our principles, and promoted internalization. That is why in the area of software and connected technologies, weestablished the Toyota Research Institute (“TRI”), Woven Planet Holdings, and Toyota Connected, and it is why
we are working on the development of the e-Palette, the construction of Woven City as a town for pilot testing,and the development of the Arene platform and other technologies.
To date, Toyota has sold 10 million Lexus and Toyota vehicles that are connected cars, mainly in Japan, theUnited States, Europe, and China. Toyota’s vision of the connected car is not simply one of connecting the car to
the internet. Rather, it is about providing customers with emotional experiences through the movement of people,
goods, and activities — a vision centered on people that we call “human connected.” To achieve this, we areoperating a call center as a point of contact with customers; the Toyota Smart Center, which provides a variety ofservices; and the Toyota Big Data Center, which utilizes vehicle information gathered from cars. In addition, we
have established the Mobility Service Platform (“MSPF”) to provide mobility services and are promoting
collaboration with service providers. Connected cars and connected technologies will be applied to a variety ofareas, and we anticipate that which is to be connected will expand to include people, cars, communities, andsociety (business-to-society, or BtoS). Toyota will handle the information gathered from customers and vehicles
with care, utilizing it for the happiness of customers and the development of society while creating new value
from experiences centered on mobility.
With the e-Palette BEV used in the Olympic Village for the Olympic and Paralympic Games Tokyo 2020,
our goal was to create mobility that integrates cars and information and that coordinates with the community.
During the Games, 49,000 athletes, staff, and volunteers used e-Palette. We also developed a fleet management
system for e-Palettes based on the principles of the TPS to ensure effective, efficient, and accurate operation. The
system monitors the vehicles remotely and operates them in a just-in-time fashion according to the conditions of
the surrounding environment and the number of passengers. All of this was realized via the MSPF that Toyota
has been building and refining. In the future, we expect that these technologies will be applied to the Sienna
Autono-MaaS minivan being developed in the United States for use as a robotaxi, and that the MSPF will be
used not only for automated vehicles, but also for regular commercial vehicles and logistics.

23

In this way, software has the power to promptly turn ideas into products. The aim of Arene, the vehicle
development platform that Toyota and Woven Planet are focused on, is to continue fundamentally changing thedevelopment of software for vehicles. The most notable characteristics of Arene are that it absorbs thedifferences in vehicle hardware specifications (abstraction) and employs hardware abstraction layers that enablehardware to be controlled with universal methods. This, in turn, enables the independent development of
hardware and software as well as the reuse of software. Arene leverages the strengths of hardware cultivated by
Toyota to achieve the development of safe, high-quality, and advanced software.
Because increasingly complicated software development is becoming a bottleneck for cars, too, there is aneed for a revolutionary vehicle operating system that can solve these issues. The vehicle operating system willachieve TPS in software development as well, and we must continue to realize combinations of good hardware
and software. For example, when developing automated driving software, the on-board software needed forautomated driving actually makes up only a small portion of it; the rest comprises various tools, such as dataprocessing by the machine learning system, mounting, code review, software updates, log analyses, andsimulations. Basically, most of the software we develop is used “off-board” (that is, outside vehicles) or throughthe cloud. Arene is used to develop frameworks for vehicle development and development environments basedon those frameworks as well as to build ecosystems for mobility development. Using industry-leading software
technologies, we will strive to continue providing privacy-conscious, secure, and safe cars.
Furthermore, application development on Arene is also easy. We believe partner companies will be able toprogram applications more efficiently using Arene’s application programming interface (a mechanism that canshare software functions) and software development kit, which includes simulation environments. In this way, we
believe development on Arene will swiftly realize commercialization and enables users to share the fun ofproviding new ideas that appeal to customers while meeting the expectations of worldwide partners anddevelopers as well as the Toyota brand’s high-quality standards.
The portion of a car’s value attributable to software is growing. By internalizing the parts central to
Toyota’s future, we will strategically ensure the strengths of our hardware and software through internal
production, compartmentalize development undertaken with partners, and accelerate the speed of mass
production. For these initiatives, we are building a software development structure on a 3,000-person scale for
Toyota, Woven Planet, and Toyota Connected and on a 18,000-person scale when including associates accounted
for by the equity method. We are also strengthening the teams responsible for the internal production anddevelopment of software.
Through connected technologies, we can contribute to carbon neutrality by gaining a better understanding of
the characteristics of each region in the form of data and combining this knowledge with realized technologies.
For example, according to market data, in Japan, the engine is turned off for half of all driving time in hybrid
electric vehicles, or HEVs, while for plug-in hybrid electric vehicles, or PHEVs, the engine is turned off for asmuch as 80 percent. We believe HEVs and PHEVs can evolve into environment-friendly vehicles to an evenhigher degree by upgrading the switching control of engines and electric motors. In other words, there is room to
expand the possibilities of both HEVs and PHEVs.
One mechanism that we believe will enable this is geofencing technology. A portmanteau of geography andfence, geofencing refers to the combination of navigation and cloud technologies to enable the automatic
switching of engine and motor functions in real time to reflect driving locations and driving times based on
geographic data. For example, in zero-emission regulation regions that limit vehicle operation to only BEVs
during certain time periods, geofencing would automatically control the functions of HEVs and PHEVs to ensurecompliance with regulations.
Furthermore, geofencing would enable anticipatory eco-driving that switches over to BEV driving as
appropriate by predicting the driving burden based on the driving environment up to the destination. We believe
utilizing connected technologies to control HEVs and PHEVs more intelligently will make it possible to further
24

promote energy saving in cars. The new NX features a mechanism that switches to HEV control. We expect thatin the near future we will be able to conduct an over-the-air (“OTA”) update of its software so that it will be able
to use geofencing technology.
In October 2021, in advance of introducing geofencing technology that is under development with an eye
toward practical application, we introduced anticipatory eco-driving (anticipatory EV/HEV mode switching
control) in the Japanese market. It realizes highly efficient driving by automatically switching between EV andHEV modes depending on the charge left in the battery and the road conditions and characteristics.
OTA refers to using wireless connections to keep the software (control software and high-precision mapping
software) updated to the latest versions. This means that after a car’s purchase, new functions continue to be
added and its performance continues to be enhanced, thereby continuing the vehicle’s evolution into a safer andmore secure car that has the latest driving assistance technology.
For the LS and Mirai launched in Japan in April 2021, we have included cars that feature the latest
Advanced Drive function of the newest sophisticated driving assistance technologies developed by Toyota
Teammate/Lexus Teammate, and they are eligible for related software updates on an ongoing basis. The GR
Yaris “Morizo Selection” is a new initiative based on GR Yaris that combines the ROOKIE Racing privateer
team run by Morizo (the racing driver name for Akio Toyoda, our President) and Toyota’s KINTO car
subscription. We will continue to evolve each car to best match each customer by reflecting updates (which are
based on feedback and data gained in races participated in by Morizo and ROOKIE Racing) and personalization(which is based on customer driving data) in the software in GR Garage shops through wired connections (notOTA). Furthermore, we offer better driving methods and support the enhancement of driving skills. Through this,we strive to realize cars that evolve to suit people by updating to the latest software in line with each customer.
Cars have a wide range of applications, from passenger cars to MaaS and commercial vehicles, and we willcontinue to expand the regions where we operate going forward. Needs are increasingly diversifying, and cars
can be used in a myriad of ways to meet them. Our efforts thus encompass people’s problems and social issues,
smiles and joy, and needed technological development.
The automobile industry must move people while also achieving coexistence with local communities. For
the future and for children, the Toyota family of companies is working on producing happiness for all throughfreedom of movement for all and the provision of exciting experiences. We will continue to enhance theexcitement that can be experienced by being able to move by combining real cars and the power of software. If
we combine innovation with technology, we expect that the value of cars will be enhanced further. We will also
contribute to the further development of society by going beyond the borders of cars and contributing tocommunity building and the creation of society-wide platforms.
Efforts in Realizing a Safe Mobility Society
According to a 2018 World Health Organization survey, 1.35 million people per year die in traffic accidents
worldwide. While the number of deaths due to traffic accidents has been gradually decreasing in Japan, theUnited States, and Europe, it has been increasing elsewhere, especially in emerging nations, as improvements insafety education and transportation infrastructure have not kept up with increases in cars on the road. Unlesscountermeasures are implemented, traffic accident causalities are predicted to become the seventh leading causeof death globally by 2030. For Toyota to achieve its ultimate goal of eliminating traffic accident causalities, thedevelopment of safe vehicles is of course important, but it is also essential to educate people, including drivers
and pedestrians, and to ensure safe traffic infrastructure, including traffic signals and roads. To achieve a safe
mobility society, Toyota believes it will be important to implement an integrated three-part initiative involving
people, vehicles, and the traffic environment, as well as to pursue real-world safety by learning from actual
accidents and incorporating that knowledge into vehicle development. “Integrated Safety Management Concept”
is Toyota’s basic philosophy behind its technologies for eliminating traffic casualties and is moving forward with
development.
25

Toyota provides optimized driver support at every stage of driving, from parking to normal operation, themoment before a collision, during a collision, and post-collision emergency response. We also aim to enhancesafety by strengthening inter-system coordination, rather than considering each system separately. These are theapproaches behind our Integrated Safety Management Concept.
Based on this Integrated Safety Management Concept, Toyota is working on active safety, passive safety,
emergency response and initiatives for people.
With regards to active safety, the Toyota Safety Sense systempackages multiple active safety functions
based around three major functions considered effective in reducing serious traffic accidents causing death or
injury. These are Pre-Collision Safety, which helps avoid and mitigate damage from collisions with cars ahead orpedestrians; Lane Departure Alert, which contributes to preventing accidents caused by leaving the lane of travel;
and Automatic High Beam, which helps ensure clear sight in front of the vehicle at night. In 2018, we expanded
the system’s driving assistance functions to offer those such as nighttime pedestrian and daytime cyclist detection
and Lane Tracing Assist. Since its market launch in 2015, Toyota Safety Sense has been installed in more than
30 million vehicles globally as of March 2022. Toyota Safety Sense is now available on nearly all passenger car
models (as standard or an option) in the Japanese, United States, and European markets. It has also been
introduced in a total of 120 countries and regions, including such key markets as China, other select Asian
countries, the Middle East, Australia and the Central and South America region.
Another important concept is passive safety. In the context of automobiles, passive safety combines a bodystructure that absorbs collision energy with support to protect vehicle occupants to minimize collision damage. In
1995, in the pursuit of world-leading safety, Toyota created its own stringent internal target related to passive
safety performance called “Global Outstanding Assessment (“GOA”)” and developed a collision-safety bodystructure and passenger protection devices. Since then, to maintain its leadership in this field, Toyota hascontinued to evolve GOA, striving to improve the real-world safety performance of its vehicles in a wide varietyof accidents.
In addition, to analyze vehicle-related injuries, Toyota collaborated with Toyota Central R&D Labs., Inc. todevelop the Total Human Model for Safety (“THUMS”), a virtual human body model. THUMS is being used in
the research and development of a variety of safety technologies, including seat belts, airbags, and other safety
equipment, as well as vehicle structures that mitigate injuries in accidents involving pedestrians. Toyota madeTHUMS freely available through its website in January 2021 in the hope that it will be used by more people
across more applications.
Every minute counts in the response to an accident or medical emergency. As a way of using connectivity tosupport safety, in 2000, Toyota rolled out its HELPNET® service, an emergency reporting system utilizing the
G-Book information network (now T-Connect) and G-Link in Japan. In the event of an accident or medical
emergency, HELPNET® contacts a dedicated operator who will arrange for the rapid dispatch of an emergency
vehicle from the police or fire department/emergency services. Specifically, HELPNET® automatically contacts
an operator when the airbags deploy and supports D-Call Net®, a service available throughout Japan that makes
quick deployment decisions for air ambulances. This service is provided by sending vehicle data to the
HELPNET® center from an on-board data communication module (“DCM”). DCM is installed as a standard
feature in all new passenger vehicles in Japan.
Toyota believes that education is an important part of preventing traffic accidents. To prevent accidents
involving small children, in cooperation with Toyota dealers across Japan, Toyota has been donating traffic
safety teaching materials to kindergartens and nursery schools nationwide since 1969. In 2020, we revamped our
educational website for children and guardians, and we use our website and social media to raise awareness of
traffic safety while walking and cycling.
For drivers, we periodically hold the Toyota Driver Communication safe driving technique seminar at
Toyota Safety Education Center Mobilitas, on the grounds of Fuji Speedway. Additionally, in step with the26government-promoted Safety Support Car program, we are working with Toyota dealers across Japan to roll out
safety and assurance activities under the name “Support Toyota” to help realize car ownership experiences thatoffer safety and assurance.
Commercial Sector Initiatives
On March 24, 2021, Toyota, Isuzu and Hino agreed to form a new alliance in commercial vehicles andestablished CJPT to promote this alliance. CASE technologies can only contribute to society once they become
widespread. Commercial vehicles can play important roles in CASE technology dissemination, as they travel
long distances for extended periods of time to support the economy and society and can be easily linked with
infrastructure development. By combining the commercial vehicle foundations cultivated by Isuzu and Hino with
Toyota’s CASE technologies, the companies aim to accelerate the societal implementation and adoption of
CASE technologies and services and thereby help address social issues and contribute to the realization of carbon
neutrality.
Specifically, the three companies are jointly working on the development of BEVs and FCEVs, autonomous
driving technologies, and electronic platforms centered on the domain of small commercial-purpose trucks.
While working together on BEVs and FCEVs to reduce vehicle costs, the companies plan to advanceinfrastructure-coordinated endeavors, such as introducing FCEV trucks with the goal of implementing ahydrogen-based society in Japan’s Fukushima Prefecture, thereby building an implementation model for a citywith a population of 300,000 people before endeavoring to apply this model in the many similar-sized cities
nationwide. Furthermore, working toward carbon neutrality, in addition to promoting the spread of electrified
vehicles that are suited to logistics uses, the companies will work to increase transport efficiency based on the
JIT logistics approach of delivering what is needed, when it is needed, in the amount needed, expanding therange of the options for achieving carbon neutrality.
Working together, we believe Isuzu and Hino are able to reach most of Japan’s truck customers and learn
about their real needs and concerns. Distribution by trucks accounts for the vast majority of overland logistics,
and the transportation sector (including buses and taxis) involves a significant number of people. Commercial
vehicles account for a significant amount of the total distance traveled by automobiles and CO2 emissions fromautomobiles in Japan. Furthermore, the logistics companies operating in Japan currently face numerous
management issues, such as high-frequency distribution, harsh work environments, labor shortages, and risingburdens. The power of CASE, centered on connected technologies and services, is expected to deliver
improvements that help resolve these issues.
Solving these kinds of social issues is not something that one company can accomplish alone. It is necessary
to seek a wide range of like-minded partners, apply their different strengths, and work together for the sake of
those supporting transportation and for society. As solutions to such issues progress, we expect work in overlandtransport to become more appealing, leading to an increase in the number of drivers and other logistics
professionals.
On July 21, 2021, Suzuki and Daihatsu joined CJPT. As many of Japan’s roads are so narrow that only
mini-vehicles can easily use them, mini-vehicles are collectively a kind of “people’s car,” made to suit the roadsof Japan. They are a practical and sustainable lifeline for people across the country, and have continued to evolve
alongside changing lifestyles. Similarly, commercial mini-vehicles are able to effectively cover areas that theirsmall size makes accessible, supporting logistics operations mainly in the last mile. For more than 60 years,
Suzuki and Daihatsu have been protecting these lifelines and driving the market forward. We believe that byworking together, these two companies will be able to access the real needs and concerns of a significant numberof Japan’s mini-vehicle users.
We expect that expanding CJPT to include mini-vehicles will enable efficient, integrated logistics, linking
the main arteries of logistics (handled by trucks) with the capillaries of logistics (the domain of commercial mini27

vehicles) while leveraging connected technologies and abundant data. This new collaboration is also aimed atpromoting the broader use of affordable advanced safety technologies and electrification by leveraging Suzuki
and Daihatsu’s strengths in high-quality, low-cost manufacturing and Toyota’s CASE technologies.
Amid pressure to enhance cost competitiveness, maintaining a competitive edge in the area of commercial
vehicle electrification is increasingly challenging. Competitiveness increasingly hinges on connected
technologies and uses of batteries and other technologies. Accordingly, manufacturers must step up the uniqueadded value that they offer.
In addition to electrification, improving transport efficiency will contribute greatly to realizing carbon
neutrality. The five companies that make up CJPT plan to link their connected technology platforms to build amore comprehensive platform for commercial vehicles and leverage the TPS, one of Toyota’s strengths, torealize JIT logistics and increase transport efficiency, thereby helping to reduce CO2 emissions. Using connected
technologies to link logistics from the major arteries to the fine capillaries, from producers to consumers, using
truck logistics and local mini-vehicle-based distribution, JIT logistics have the potential to lower running costs
for logistics vendors and sustainably improve logistics. Going forward, we believe the five companies will
deepen their collaboration while openly considering cooperation with other like-minded partners, working to help
fulfill the automotive industry’s mission of helping improve people’s lives and leave a better Japan and a better
planet for the next generation.
Woven City
The Woven City project, first announced in January 2020, officially broke ground on February 23, 2021.
Woven City will demonstrate cutting edge technologies in such areas as automated driving, MaaS, personal
mobility, robotics, smart homes, and artificial intelligence in a real living environment. By rapidly implementing
development and demonstration cycles of technologies and services in this human-centered city, we aim tocontinue to produce new value and business models by utilizing the mobility of “information,” “goods,” and“people” to support daily life.
Woven City will be constructed on the site of Toyota Motor East Japan’s former Higashi-Fuji Plant, which
was a pillar of production for Toyota for 53 years, starting in 1967. At its peak, the plant had 2,000 employees,
and a total of 7,000 individuals worked there over its history, producing such vehicles as the Toyota Century,
Toyota’s flagship chauffeur car infused with Toyota craftsmanship, and the JPN Taxi, a car that requires manytimes the durability of an ordinary passenger car.
The concept for Woven City can be traced back to the Great East Japan Earthquake in 2011. As our
President, Akio Toyoda sought to create jobs for the region’s people, who were hit hardest by the disaster, bycreating a third base of operations in the Tohoku region. Guided by his strong leadership, Toyota established
Toyota Motor East Japan, Inc. in 2012. However, this also led to the difficult decision to close the Higashi-Fuji
Plant. Looking for a way to carry on the Higashi-Fuji Plant’s legacy of manufacturing to help create future
mobility for the next 50 years, he arrived at the idea of transforming the site into a connected city as a large-scaledemonstration experiment.
Under the Woven City project, we are imagining the life of each resident as we seek to design a city thatwill most make people happy. Working with researchers, engineers, and scientists, we intend to demonstrate
future technologies in both the virtual and the real world and to roll out the resulting technologies and products
developed around the globe. Woven City will be a constantly improving, ever-evolving city rooted in Toyota’s
kaizen approach — thinking that there is always a better way. We will work with partners who share ouraspiration in this quest to realize better living and mobility for all.
Woven City will comprise three types of roads, woven together like warp and weft: paths for people, roads
shared by people and personal mobility devices, and roads for autonomous vehicles. Aimed at realizing safe
28

mobility, it will be a sort of test course for the integrated three-part development of automated driving at thelevels of people, vehicles, and the traffic environment. In its early stages, we anticipate Woven City will housearound 360 residents, comprising mainly seniors, families, and inventors. In the future, we believe the city will
have more than 2,000 residents, including Toyota employees, demonstrating technologies in mobility and a wide
range of other fields, from logistics to energy, food and agriculture as it grows into an environment conducive tothe timely generation of new inventions that address social issues.
The name “Woven City” comes from Toyota’s origins in automatic looms. Sakichi Toyoda, the founder of
the Toyota family of companies, was driven to invent an automatic loom out of a desire to make his mother’s
work easier. We have guarded and nurtured this spirit of service to others ever since. Woven City will take up
this commitment from the Higashi-Fuji Plant, growing and evolving as the foundation for a new era at Toyota.
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, 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 has expanded its network of financial services, in accordance with its strategy of developing auto-related
financing businesses in significant markets. Accordingly, Toyota currently operates financial services companies
in 42 countries and regions, which support its automotive operations globally.
Toyota’s sales revenues from its financial services operations were ¥2,324.0 billion in fiscal 2022,¥2,162.2 billion in fiscal 2021 and ¥2,193.1 billion in fiscal 2020. While there were negative factors in fiscal
2022, such as tight global semiconductor supply relative to demand, supply constraints on new cars due to theimpact of COVID-19, and increased competition with other financial institutions, Toyota’s business saw steady
growth mainly due to the accumulated balance of earning assets resulting from enhanced used-vehicle financing,higher used-vehicle prices in the United States and other regions, lower interest rates worldwide and othermeasures. Under such circumstances, as a result of Toyota’s continued collaboration with dealers in various
countries and regions and efforts to expand products and services that meet customer needs, Toyota’s share offinancing provided for new car sales of Toyota and Lexus vehicles in regions where Toyota Financial Services
Corporation operates remained at a high level of approximately 30%, and the balance of earning assets continued
to steadily increase, with the exception of some countries. In addition, Toyota is making efforts to provide bothits customers and dealers with stable financial services by diversifying its funding methods in recent years, suchas issuing Green Bonds in addition to using already existing means as commercial paper, corporate bonds, bankborrowings, ABCP (Asset Backed Commercial Paper) and ABS (Asset Backed Securities). Furthermore, 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 0.23% and 0.17% in fiscal 2021 and 2022,
respectively. Toyota continues to work towards improving its risk management measures in connection withcredit and residual value risks.
Toyota Motor Credit Corporation is Toyota’s principal financial services subsidiary in the United States.
Toyota also provides financial services in 41 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;•

Toyota Financial Services (UK) PLC in the United Kingdom;29

•Toyota Leasing (Thailand) Co., Ltd. in Thailand; and•Toyota Motor Finance (China) Co., Ltd. in China.

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.
The KINTO subscription service, which started in Japan in 2019 in response to the shift from “owning” cars
to “using” cars, has been steadily enhancing its service lineup and gaining brand awareness. In Europe, fullservice leasing is being made available in wider areas. Furthermore, Toyota developed and provides customers
with the payment application “TOYOTA Wallet” as a platform that contributes to improving the convenience ofcustomers’ daily payments and creating a foundation for a mobility society.
Finance receivables for all of Toyota’s dealer and customer financing operations were ¥21,764.4 billion asof March 31, 2022, representing an increase of 13.3% as compared to the previous year. The majority of
Toyota’s financial services are provided in North America. As of March 31, 2022, 55.0% of Toyota’s financereceivables were derived from financing operations in North America, 13.3% from Europe, 12.9% from Asia,
7.3% from Japan and 11.5% from other areas.
Approximately 40% of Toyota’s unit sales in the United States during fiscal 2022 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.
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 which30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
through the 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 dealers tofinance 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 wholly
owned 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 through Toyota dealers to customers. In addition, TMIS
also provides coverage and related administrative services to affiliated companies 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, 2022, Toyota Finance Corporationhas 15.3 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. Sales revenues for these activities totaled ¥1,129.8 billion in fiscal
2022, ¥1,052.3 billion in fiscal 2021, and ¥1,504.9 billion in fiscal 2020.
Governmental Regulation, Environmental and Safety Standards
Toyota is inevitably required to comply with the regulations applied to its products relating to the emission
levels, fuel economy, noise, safety and so on. In addition, Toyota is subject to laws in various jurisdictions
regulating the levels of pollutants generated by its plants. Toyota has incurred significant costs in complying withthese 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.
International Harmonization of Vehicle Regulations
The World Forum for Harmonization of Vehicle Regulations (“WP.29”) of the United Nations Economic
Commission for Europe (“UNECE”) has developed certain international rules and regulations such as the UN
31

Regulations (“UNR”) under the 1958 Agreement and the Global Technical Regulations (“GTR”) under the 1998
Agreement and has been working to promote international harmonization of the technical prescriptions for theconstruction and approval of wheeled vehicles. The UNR has been adopted in jurisdictions such as Japan, EU
and Russia, and each participating party’s type approvals are mutually recognized under the 1958 Agreement.
The parties to the 1998 Agreement include the U.S., China and India in addition to Japan, the EU and Russia, and
22 Global Technical Regulations have been established to date. As the progress of the international
harmonization of technical prescriptions will lead to the reduction of the variations in product specifications fromcountry to country, it is expected to lead to greater efficiency in Toyota’s product development.
Vehicle Emissions
Japanese Standards
The Air Pollution Control Act of Japan and the Road Transport Vehicle Act and the Act Concerning Special
Measures for Total Emission Reduction of Nitrogen Oxides and Particulate Matter from Automobiles inSpecified Areas regulate vehicle emissions in Japan. In recent years, in addition to the strengthened regulations
on particulate matters emitted from gasoline-fueled vehicles, as can be seen from the adoption of the Worldwide
Harmonized Light Vehicles Test Cycle (“WLTC”) driving cycles and the introduction of the Real Driving
Emission (“RDE”), more stringent regulations have been decided to be introduced to match the European
Standards. Moreover, both the Noise Regulation Act and the Road Transport Vehicle Act provide for noise
reduction standards on automobiles in Japan.
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 vehicles, light-duty trucks and heavy-duty
vehicles. Manufacturers are not permitted to sell vehicles in the United States that do not meet the standards. In
March 2014, the EPA finalized new “Tier 3” tailpipe emission and evaporative emission standards for passenger
vehicles, light-duty trucks, medium-duty passenger vehicles and some heavy-duty vehicles. Under the rule,
tailpipe emission standards for volatile organic compounds, carbon monoxide, nitrogen oxides, and particulatematter, as well as standards for evaporative emissions and guaranteed useful life (which relates to a vehicle’s
ability to meet emission limits over time), would become increasingly stringent in phases from 2017 to 2025. The
rule would bring federal emission standards for these pollutants in line with California’s emission standards.
The new Tier 3 rule also required reductions in gasoline’s sulfur content beginning in 2017.
California Standards
Under the federal Clean Air Act, the State of California has been permitted to establish its own vehicle
emission control standards if it receives a waiver from the EPA that allows the California standards to preempt
less-stringent federal standards. The EPA granted such a preemption waiver to California in January 2013. The
waiver provides a legal basis for California’s Advanced Clean Cars (“ACC”) program.
In January 2012, the California Air Resources Board (“CARB”) adopted the ACC program. The ACC
program, developed in coordination with the EPA and the federal National Highway Traffic Safety
Administration (“NHTSA”), includes Low-Emission Vehicle (“LEV”) regulations, known as the LEV III
regulations, that reduce emissions of smog-causing pollutants (volatile organic compounds, carbon monoxide,
nitrogen oxides and particulate matter) and greenhouse gases from passenger cars and light-duty trucks for modelyears 2015 to 2025. The regulations include standards for evaporative emissions and guaranteed useful life as
well.
The ACC program also includes a mandate for zero-emission vehicles. Pursuant to the mandate, CARB
requires that a specified percentage of a manufacturer’s passenger cars and light-duty trucks sold in California be
32

“zero-emission vehicles” (vehicles producing no emissions of regulated pollutants) (“ZEV”), as well as permits
certain advanced technology vehicles such as PHEVs, and alternative fuel vehicles that meet “partial
zero-emission vehicles requirements,” to be granted partial qualification as BEVs or FCEVs. Toyota’s MIRAI
qualifies as a zero-emission vehicle. The current Prius Prime has been certified as a partial zero-emission vehicle.
Toyota intends to continue to develop additional advanced technologies and alternative fuel technologies thatwill allow other vehicles to qualify as zero-emission vehicles or partial-zero-emission vehicles.
The Advanced Clean Cars II (“ACC II”) regulations will go before the CARB on June 9, 2022. ACC II
includes LEV IV regulations that would further reduce emissions from light- and medium-duty vehicles, and an
expanded mandate that would increase the percentage of ZEV vehicles that manufacturers must sell in California.
The new LEV IV regulations and expanded ZEV mandate would apply to model years 2026 – 2035.
California has adopted regulations that require that On-Board Diagnostics (“OBD”) systems be incorporated
into the computers of vehicles sold in California. OBD systems monitor components that can affect the emission
performance of a vehicle and, if a problem with a component is detected, illuminates a warning light on thevehicle’s instrument panel. The systems also store the malfunction information in the computer to facilitate
repairs. California’s OBD regulations are the most stringent in the world.
Other States’ Standards
Seventeen states (Colorado, Connecticut, Delaware, Maine, Maryland, Massachusetts, Minnesota, New
Jersey, New Mexico, New York, Nevada, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia andWashington) have adopted regulations substantially similar to California’s low-emission vehicle requirement,
and 15 of these have adopted California’s zero-emission vehicle requirement.
Canadian Standards
Canada has finalized vehicle emission standards equivalent to the federal standards in the United States in
October 2014, in response to the strengthening of the federal vehicle emission standards in the United States
applicable to model years 2017 to 2025. Furthermore, certain Canadian provinces are currently considering
enacting their own regulations. On January 11, 2018, the Ministry of Sustainable Development, Environment andthe Fight against Climate Change of the Province of Quebec issued regulations on zero-emission vehicles
including BEVs, FCVs and PHEVs, among others. In November 2018, the premier of British Columbia
announced that the government would introduce legislation concerning zero-emission vehicles (indicating thephase-in introduction starting from model year 2020). Canada also adopted a more stringent fuel rule, which isbased on the fuel rule in the United States, that reduces refineries’ annual average sulfur concentration ofgasoline to 10mg/kg from 2017 with a new addition of credit system to secure compliance.
European Standards
In 2007, the European Parliament adopted more stringent emission standards for passenger vehicles andlight commercial vehicles. The effective date for phasing in these stricter standards for passenger vehicles was
September 2014 for Euro 6. For light commercial vehicles, the effective date was September 2015 for Euro 6.
The primary focus of Euro 6 is to limit further emissions of diesel-powered vehicles and bring them down toa level equivalent to gasoline-powered vehicles. The EU is now implementing the RDE regulations, which
require manufacturers to conduct on-road emissions tests using portable emissions testers to demonstratecompliance. Since September 2017, manufacturers have been required to reduce the divergence between theregulatory limit tested in laboratory conditions and the values of RDE tests, and this divergence factor was mademore stringent for all new vehicles effective January 2021. The EU is now also implementing the Worldwide
harmonized Light vehicles Test Procedure (“WLTP”), which was introduced on September 1, 2017. The OBD
regulations have also been tightened in terms of both subject parts and regulatory values. Effective January 1,
2019, the EU implemented an improved WLTP that purports to eliminate test flexibilities and introduces
on-board fuel and energy consumption monitoring devices.
33

Discussions are currently underway for Euro 7, which will be more stringent than Euro 6. The European
Commission expects to publish the Euro 7 proposed limits in the third quarter of 2022.
Chinese Standards
The next-generation emissions regulations for passenger vehicles, or Level 6 Emissions Regulations (China6), were issued as GB18352.6-2016 at the end of 2016, pursuant to which tighter requirements will be
implemented in two steps, depending on the regulated subjects and the implementation timing. Specifically,
China 6a will apply to all models to be sold or registered in July 2020 and beyond, and China 6b will apply to allmodels to be sold or registered in July 2023 and beyond. China 6b will also introduce the RDE Regulations
adopted under Euro 6. The OBD regulations have also been tightened in terms of both subject parts andregulatory values. With respect to fuels in the market, the quality standards and the implementation from January
2019 for China 6 gasoline fuel and China 6 diesel fuel have been provided in GB17930-2016 and GB19147-2016
so as to keep up with the implementation timing of China 6 emissions regulations. Moreover, for areas where theair quality improvement is an urgent necessity, China 6 is scheduled to be implemented from July 2019 ahead of
the implementation throughout China. Discussions are currently underway for Level 7 Emissions Regulations(“China 7”), which will be more stringent that the China 6 Emissions Regulations.
For heavy-duty diesel-powered commercial vehicles, pursuant to GB17691-2005, the China V Emissions
Regulations are being implemented from July 2017. With the establishment of GB17691-2018, which provides
next-level China VI Emissions Regulations (“China VI”), it has been decided that China VIa will be
implemented from July 2021 and China VIb from July 2023 (these regulations will apply to gas-fueled vehicles
and public vehicles for urban areas earlier than those dates). For heavy-duty gasoline-powered commercial
vehicles, pursuant to GB14762-2008, Level IV Emissions Regulations (“China IV”) apply to new models after
July 2012. After the first day the regulation is implemented to a new model, all new models released during thefollowing one-year period also become subject to the regulation. Tightening of the next-generation emissions
regulations (China V and China VI) is currently considered for heavy-duty gasoline-powered commercial
vehicles.
Standards of Other Countries or Regions
In particular, in India, given the worsening air pollution, in December 2015, the Supreme Court banned theregistration of diesel cars with engines that are two liters or larger in the National Capital Region, including theDelhi metropolitan area. In August 2016, the ban on registration was lifted on the condition that a deposit equal
to 1% of the vehicle’s retail price is to be paid to the Environment Pollution Control Authority. Furthermore, thegovernment accelerated the implementations of BS-6 (equivalent to EURO6) to 2020. Moreover, Thailand has
also decided to introduce regulations equivalent to Euro 5 and Euro 6.
Vehicle Fuel Economy
Japanese Standards
The Act on Rationalizing Energy Use requires automobile manufacturers to improve their vehicles to meet
specified fuel economy standards. Fuel economy standards are established according to the types of vehicles, andare required to be met by either fiscal 2011 (April 2010-March 2011), fiscal 2016 (April 2015-March 2016),
fiscal 2021 (April 2020-March 2021), fiscal 2023 (April 2022-March 2023), fiscal 2026 (April 2025- March
2026) or fiscal 2031 (April 2030-March 2031). From 2020, if the WLTC mode is applied as a vehicle emissions
test cycle, fuel economy test must be also conducted based on the WLTC mode.
U.S. Standards
The Federal Motor Vehicle Information and Cost Savings Act requires automobile manufacturers to comply
with CAFE standards. A manufacturer is subject to substantial civil penalties if, in any model year, its vehicles
34

do not meet the CAFE standards. Manufacturers that exceed the CAFE standards earn credits determined by thedifference between the average fuel economy performance of their vehicles and the 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 model year.
In December 2011, the EPA and the NHTSA issued a joint proposed rule to further reduce greenhouse gas
emissions and improve fuel economy for passenger cars, light-duty trucks and medium-duty passenger vehicles
for model years 2017 through 2025. Pursuant to the rule, which was finalized in August 2012, these vehicles
would be required to meet an estimated combined average emission level of 163 grams of carbon dioxide permile in model year 2025, equivalent to 54.5 miles per gallon if these requirements are met through improvements
in fuel economy standards. At the same time, the NHTSA issued CAFE standards for passenger vehicles andlight-duty trucks that would require manufacturers to meet an estimated combined average fuel economy level of
49.6 miles per gallon in model year 2025.
Under the Trump Administration, the EPA and the NHTSA proposed less stringent greenhouse gas emission
standards and CAFE standards, and the withdrawal of California’s waiver to issue its own, more stringent
greenhouse gas emission standards under the LEV III program. However, under the Biden Administration, the
EPA and the NHTSA withdrew these proposed greenhouse gas emission standards and CAFE standards, and in
March 2022, the EPA reinstated California’s authority to enforce its own greenhouse gas emissions standards.
On December 30, 2021, the EPA issued a final rule revising passenger car and light-duty truck greenhousegas emissions standards for model years 2023 through 2026. The new rule, which is based on Presidential
Executive Order 13990, reduces greenhouse gas emissions, year-over-year, by 10% for model year 2023, 5% for2024, 6.6% for 2025, and more than 10% for 2026. Based on these reductions, the industry-wide average
emission targets for passenger cars and light-duty trucks is projected by the EPA to be 161 grams of carbon
dioxide per mile in model year 2026.
On March 31, 2022, the NHTSA issued a final rule revising passenger car and light-duty truck fuel economy
standards for model years 2024 through 2026. As with the EPA’s greenhouse gas emission rule, this new rule isbased on Presidential Executive Order 13990. The new rule establishes standards that would require an industrywide fleet of approximately 49 mpg for passenger cars and light duty trucks in model year 2026. This is to beachieved by increasing fuel efficiency, year-over-year, by 8 % for model year 2024, 8% for 2025, and 10% for2026.
European Standards
In the EU, the average carbon dioxide emissions limit for light commercial vehicles is currently 147 grams
per kilometer and for passenger vehicles 95 grams per kilometer. Manufacturers failing to meet their targets incur
penalties of €95 from the first gram of exceedance onwards in 2019 and beyond. Starting in 2021, theseemissions targets are tested using the WLTP.
In April 2019, the European Parliament and the Council adopted new carbon dioxide standards for vehicles
and light commercial vehicles for the period after 2020. Average emissions of the EU fleet of new vehicles andlight commercial vehicles in 2025 must be 15% lower than in 2021, and by 2030, emissions must be reduced
further to 37.5% and 31% of 2021 levels for vehicles and light commercial vehicles, respectively. From 2025, a
crediting system will be introduced to relax a manufacturer’s specific carbon dioxide emissions targets where the
manufacturer produces numbers of “zero and low-emission vehicles” above specified benchmarks.
To achieve a climate-neutral EU by 2050 and an intermediate target of at least 55% net reduction ingreenhouse gas emissions by 2030, the European Commission proposed in July 2021 substantially more stringent
carbon dioxide emissions targets for vehicles and light commercial vehicles, as part of its “Fit for 55” package.
The proposal strengthens the 2030 targets from 37.5% to a 55% reduction for new passenger cars and from 31%
35

to a 50% reduction for new light commercial vehicles, both relative to the 2021 baseline discussed above. In
addition, the proposal introduces a new 2035 carbon dioxide target set at a 100% reduction for new vehicles andvans, again relative to the 2021 baseline. The 2025 target remains unchanged at a 15% reduction for both newvehicles and vans. The proposal has not yet been finalized.
An EU directive on motor vehicle air conditioning units requires manufacturers to replace the refrigerants
with that having a lower global warming impact for all newly registered vehicles starting in January 2017.
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. For light-duty
passenger vehicles, GB27999-2011 was issued. In these Level 3 Fuel Consumption Regulations for passenger
cars, the regulation framework was substantially revised, such as the introduction of new regulations requiring
automobile manufacturers to meet standards of corporate average fuel consumption across models in addition toexisting regulations requiring each model to meet consumption standards. Furthermore, in order to achieve thenational target for average fuel efficiency for 2020, the following more stringent fuel consumption regulations
have been enacted and enforced. First, GB19578-2014, which has been enacted to strengthen regulations for eachmodel, is being applied to new models after January 2016. Second, GB27999-2019, which has been enacted as
Level 5 Fuel Consumption Regulations for passenger vehicles to strengthen corporate average regulations, hasbeen in effect since 2021. In addition, Level 5 Fuel Consumption Regulations for passenger vehicles are being
examined as more stringent next-generation fuel consumption regulations. For light-duty commercial vehicles,
GB20997-2015 was enacted, which further applied Level 3 Fuel Consumption Regulations to all new vehicles
from January 2018 and is currently being enforced. Moreover, the implementation of the Life Cycle Assessment(LCA), which comprehensively regulates the amount of carbon dioxide emitted during the vehicle
manufacturing, use, and disposal processes, among others, is being considered earlier than in the rest of theworld.
With respect to large commercial vehicles, pursuant to GB30510-2018, Level 3 Fuel Consumption
Regulations apply to new vehicles from July 2019 and are currently being enforced. In addition, in an effort tofurther strengthen fuel consumption regulations for the next generation, Level 4 Fuel Consumption Regulations
are currently being considered.
Vehicle Safety
Japanese Standards
Japan has been participating in the 1958 Agreement of the UN and has a number of technical standards thatare harmonized with the UN Regulations.
Furthermore, unique to Japan, the safety standards for automated driving systems were established in March
2020, requiring, in addition to a certain level of performance of automated driving system, the installation of anevent data recorder and cyber security measures against unauthorized access. In addition, a certification program
was introduced in April 2020 with respect to the system to control sudden acceleration by mixing up the gas andbrake pedals as well as the collision damage mitigation brake system.
In addition, fuel-cell vehicles using compressed hydrogen are subject to the approval and control under theHigh Pressure Gas Safety Act in addition to the Road Vehicles Act.
U.S. Standards
In the U.S., in light of the Executive Order issued by President Trump on January 30, 2017, few safety
standards providing new technical requirements have been issued. With respect to automated driving vehicles, on
36

January 8, 2020 the Trump Administration and the U.S. Department of Transportation released Ensuring
American Leadership in Automated Vehicle Technologies: Automated Vehicles 4.0 (“AV 4.0”). AV 4.0 unified
efforts across 38 Federal departments, independent agencies, commissions, and Presidential Executive Offices inproviding high level guidance to state and local governments and other stakeholders. AV 4.0 also established
Federal principles for the development and integration of automated vehicles. California and many other states,
despite AV 4.0, have adopted different approval systems so that automated vehicles must be compliant withregulations and systems that vary from state to state. On December 23, 2020, California issued its firstautonomous vehicle deployment permit.
European Standards
In December 2019, the EU issued the revised General Safety Regulation to tighten the requirements
concerning safety and the protection of vehicle occupants and vulnerable road users. This revised General Safety
Regulation will make certain vehicle safety equipment mandatory in stages starting 2022, including: advanced
emergency braking, emergency lane keeping systems, driver drowsiness and attention warning, intelligent speed
assistance, reversing detection systems, tire pressure monitoring systems, and data recorders in case of an
accident (“event data recorders”). In relation to this, various UN Regulations were developed, and for theequipment for which UN Regulations have not been developed, the EU established its own technical standards.
Furthermore, a major overhaul of the EU-type approval framework for motor vehicles was issued in May
2018. The new regulation purports to raise the quality and independency of vehicle type-approval and testing, toincrease checks of vehicles that are already on the EU market, and to strengthen European Commission oversightof the framework. It became mandatory for all new vehicle models as of September 1, 2020. Automated driving
vehicles must obtain exemption under this framework.
United Nations Standards
The United Nations restructured the existing working parties and established the Working Party on
Automated/Autonomous and Connected Vehicles (“GRVA”) that is dedicated to the development of regulations
on automated driving. The GRVA is developing regulations covering functional safety requirements, newevaluation test method requirements, cybersecurity, software updates, data recording for automated driving
vehicles and data recording in case of an accident. The new regulations on cyber security, software updates andautomated lane keeping system came into effect in January 2021.
Chinese Standards
Vehicle safety regulations in China were in general established having regard to the UN regulations.
However, China’s own national technical standards on functions such as batteries, motors, and the charging andremote surveillance of BEVs have been made mandatory. Fuel-cell vehicles are subject to the supervising
regulations on the safety of high pressure gas in addition to the vehicle type approval requirement. Moreover, in
accordance with the Made in China 2025 policy, more than 100 standards for intelligent connected vehicles(“ICV”) are being developed (including automation, telecommunication and security).
Environmental Matters
Japanese Standards
Automotive operations in Japan are subject to substantial environmental regulation under laws such as the
Air Pollution Control Act, the Water Pollution Prevention Act, the Noise Regulation Act and the Vibration
Control Act. Under these laws, if a business entity establishes or alters any facility that is regulated by these laws,
the business 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 is37

also required to comply with the applicable standards. Toyota is subject to local regulations, which in some cases
impose more stringent obligations than the Japanese central government requirements. Under the Waste
Management and Public Cleansing Act, producers of industrial waste must dispose of industrial waste in themanner prescribed in the same act.
The Soil Contamination Countermeasures Act of Japan requires that landowners 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 as considered to becontaminated, orders the landowner to submit a plan for decontamination (such plan must describe the measures
to be taken in the area, the reasons therefor, and the deadline for implementing such measures, etc.), and has thelandowner take such measures in accordance with such plan. In addition, under the Act on Recycling, etc. 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 a vehicle take-back and recycle system throughout Japan. As a result, in fiscal 2021,
Toyota achieved a recycling/recovery rate of 96% for automobile shredder residue (the legal requirement being70%) and 95% for air bags (the legal requirement being 85%) and reached the targets set forth in this law.
U.S. Standards
The environmental regulations applicable in the United States include, among others, the Clean Air Act, theClean Water Act, the Resource Conservation and Recovery Act, the Pollution Prevention Act of 1990 and the
Toxic Substances Control Act. Toyota is subject to a variety of state legislation that parallels, and in some cases
imposes more stringent obligations than, federal requirements.
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. In 2012, the EPA made the annual
health-based particulate matter NAAQS more stringent. In 2015, the EPA made the annual health-based andwelfare-based ozone NAAQS more stringent. On June 10, 2021, the EPA announced that it would reconsider a
December 7, 2020 decision to retain the 2012 annual health-based particulate matter NAAQS without changes,
which might result in a tightening of the standards. The 2012 annual health-based particulate matter NAAQS, the2015 annual health-based and welfare-based ozone NAAQS, as well as any future NAAQS revisions, could leadto additional pollution control requirements on the industry, including on Toyota’s manufacturing operations.
European Standards
In the EU, the Ambient Air Quality and Clearer Air for Europe Directive (Directive 2008/50/EC) sets theenvironmental standards for air quality. In relation to this, environmental regulations, such as the National
Emissions Ceilings Directive, or NEC Directive (2016/2284/EU), the Industrial Emissions Directive, or IED
Directive (2010/75/EU), and Directive 2007/46/EC, which is intended to control on-road emission sources, havebeen established, and emissions are managed under these directives based on their source.
The European Commission is currently reviewing the EU Directive on End-of-Life Vehicles with a public
consultation process. The Commission expects to present a legislative proposal for revisions to this directive in2022.
Toyota strives to ensure that its operations are 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 in an effort to ensure that it remains in material
compliance with all of these requirements. However, compliance with environmental regulations and standards
38

has increased costs and is expected to lead to higher costs in the future. Therefore, Toyota recognizes that
effective environmental cost management will become increasingly important. Moreover, innovation andleadership in the area of environmental protection are becoming increasingly important to remain competitive inthe market. As a result, Toyota has proceeded with the development and production of environmentally friendly
technologies, such as hybrid electric vehicles, PHEVs, FCEVs, BEVs and high fuel efficiency, low emission
engines.
In addressing environmental issues, based on an assessment of the environmental impact of its products
through their entire life cycles, from production through sales, disposal and recycling, Toyota, as a manufacturer,
strives to take all possible measures from development stage and continues to work towards 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, 2022, TMT performed maintenance services on Toyota vehicles
owned by the Iranian embassy in Japan.
This activity contributed an insignificant amount of gross revenues and net profit to Toyota. Toyota believes
that none of the above transactions subject it or its affiliates to U.S. sanctions. TMT intends to cease conducting
its activities described above, except that it intends to provide to the Iranian embassy necessary repair services incase of a recall or other safety measures in accordance with applicable laws and regulations.
Research and Development
The overriding goals of Toyota’s technology and product development activities are to minimize thenegative aspects of vehicles, such as traffic accidents and impact on the environment, and maximize the positive
aspects, such as driving pleasure, comfort and convenience. By achieving these sometimes conflicting goals to ahigh degree, Toyota seeks to open the door to the automobile society of the future. To ensure efficient progress inresearch and development activities, Toyota coordinates and integrates all research and development phases,from basic research and advanced research to forward-looking technology and product development. With
respect to long-term basic research in areas such as energy, the environment, information technology,
telecommunications and materials, projects are regularly reviewed and evaluated in consultation with outside
experts to achieve research and development cost control. With respect to forward-looking, leading-edge
technology and product development, Toyota establishes cost-performance benchmarks on a project-by-projectbasis to ensure efficient development investment.
The chart below provides an overview of Toyota’s R&D at each phase.
Basic researchPhase to discover development theme
Research on basic vehicle-related technology

Forward-looking andleading-edge technology
development

Phase requiring technological breakthroughs such as components and systems
Development of leading-edge components and systems that are more advanced
than those of competitors

Product development

Phase mainly for development of new models
Development of all-new models and existing-model upgrades
39

With a focus on environmentally friendly, carbon-neutral and safe-vehicle technology, Toyota is promoting
research and development into the early commercialization of next generation environmentally friendly,
energy-efficient and safe-vehicle technology. Toyota is also moving forward with the development of innovativetechnologies such as electrification, connected vehicles and automated driving so as to realize a mobility societyof the future that enables everyone to enjoy freedom of movement beyond the conventional concept of vehicles.
To this end, Toyota is focusing on the following areas:•

further improvements in hybrid technologies, including in functions and cost, and contributions to theenvironment through advancements;•

improvement in internal combustion engine fuel economy technology as well as improvement intechnology in connection with more stringent emission standards;•

development of BEVs, FCEVs and other alternative fuel vehicles;•development of advanced safety technology designed to promote driving and vehicle safety;•

development of automated driving technologies•

connected car technologies; and•development of technology to bring about more comfortable travel (driving).

For a detailed discussion of the company’s research and development infrastructure, see “Operating and
Financial Review and Prospects — Research and Development, Patents and Licenses.”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 optimal procurement.
Toyota believes that this policy encourages technological innovation, cost reduction and other measures tostrengthen its vehicle competitiveness. Although there are supply restrictions with respect to the procurement ofcertain parts and components, Toyota plans to continue purchases based on the same principle.
Because Toyota had more than 50 overseas operations in 27 countries and regions as of March 31, 2022,
procurement of parts and components is being carried out not only locally in the country of the production site
but also from third countries. As a result, the distribution network has become increasingly complex. In order torealize timely and efficient distribution while minimizing costs, Toyota is promoting efforts to optimize eachstage 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 procure parts and materials from the most competitive suppliers among Toyota
factories located in various areas worldwide. At the same time, Toyota carries out streamlining efforts together
with suppliers in each country in order to achieve sustainable growth. Toyota has been working on cost reduction
measures, referred to as RR-CI (ryohin-renka cost innovation) and VA (value analysis) activities, which aims toeliminate waste in all processes from design to production while ensuring the reliability and safety of each part.
Through these activities, Toyota focuses on “developing a real cost-competitive structure” by working together
with suppliers.
In response to a significant upward trend in materials costs, including related logistics and other costs, since
fiscal 2022, Toyota is accelerating initiatives such as the replacement of raw materials with those that are lesssubject to price pressure and reduction of raw material usage.
40

Intellectual Property
Through its ongoing challenge to be one step ahead in conducting new research and development, Toyota
has enhanced its product appeal and technological prowess, which have been serving as the source of thecompany’s competitiveness. At the core of Toyota’s products created through this research and development
always lies intellectual property, including invention, know-how and brands. This intellectual property functions
as Toyota’s important management resources. By protecting and utilizing our intellectual property in an
appropriate manner, we will continue to contribute to society.
Toward the realization of a future mobility society, Toyota is carrying out intellectual property activities inline with its focus areas. For example, by distributing resources mainly to such areas as carbon neutrality,
software and Woven City and enhancing the obtainment and use of intellectual property rights, we are committed
to strengthening our future competitiveness.
As for the intellectual property activities framework, having established intellectual property functions at the
R&D centers in the United States, Europe and China, Toyota supports technology development globally by
securing organic, systematic coordination between R&D activities and intellectual property activities. Working inconcert with approximately 110 law firms around the world, we collect intellectual property information and takemeasures suitable for each country or region. To enhance activities that incorporate management, R&D andintellectual property in one, Toyota has an Intellectual Property Management Committee. The members of theCommittee discuss and make decisions concerning obtaining and utilizing important intellectual property
conducive to management and for responding to management risks related to intellectual property.
Toyota holds approximately 70,000 patents around the world. While Toyota considers all of its intellectual
property to be important, it does not consider any specific subset of its patents, trademarks, design patents orutility model registrations to be so important that their expiration or termination would materially affect Toyota’s
business.
In recent years, Toyota has filed approximately 12,000 patent applications a year domestically andinternationally. In 2020, Toyota became the holder of the most patents among the car manufacturers in Japan, theUnited States and other countries. According to a ranking list of companies filing patent applications concerning
decarbonization-related technologies to the Japan Patent Office, which was released by an external institution,
Toyota has maintained a top ranking. One example of Toyota’s utilizing its patents toward the realization ofcarbon neutrality is its granting royalty-free licenses on patents for vehicle electrification-related technologies. In
2019, as part of its initiatives for further promoting the widespread use of electrified vehicles, Toyota decided to
grant royalty-free licenses on approximately 23,740 patents, which Toyota holds around the world, for vehicle
electrification-related technologies, including power control units and system controls. These advanced vehicle
electrification-related technologies have helped Toyota realize enhanced performance, reduced size and cost
reductions through over more than 20 years of HEV development, serving as core technologies that can beapplied to the development of various types of electrified vehicles, including HEVs, PHEVs, BEVs and FCEVs.
In this way, while building external partnerships by sharing technologies, we are actively involved in promoting
the further growth of electrified vehicles.

41Capital Expenditures and Divestitures
Set forth below is a chart of Toyota’s principal capital expenditures between April 1, 2019 and March 31,
2022, 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

Primary
Method ofFinancing

Total Cost
(Yen in billions)

Location

1,081.6

Japan

Internal funds,
financingfrom issuanceof bonds, etc.

121.9

Japan

Internal funds

107.5

Japan

Internal funds

92.3

Japan

Internal funds

73.6

Japan

Internal funds

72.1

Japan

Internal funds

56.8

Japan

Internal funds

199.2

United States

Internal funds

167.0

United States

Internal funds

91.9

CanadaInternal funds

85.6

BelgiumInternal funds

72.0

United States

Internal funds

71.2

ThailandInternal funds

69.6

United States

Internal funds

5,596.6

United States

Internal funds,
financingfrom issuanceof bonds, etc.

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

Investment primarily in technology and products by
Daihatsu Motor Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . .
Investment primarily in technology and products by
Toyota Motor Kyushu, Inc. . . . . . . . . . . . . . . . . . . . . . . .
Investment primarily in technology and products by
Toyota Auto Body Co., Ltd. . . . . . . . . . . . . . . . . . . . . . .
Investment primarily in technology and products byPrimearth EV Energy Co., Ltd. . . . . . . . . . . . . . . . . . . . .
Investment primarily in technology and products byPrime Planet Energy & Solutions, Inc. . . . . . . . . . . . . . .
Investment primarily in technology and products byHino Motors, Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outside of Japan
Investment primarily to promote localization by
Toyota Motor Manufacturing, Indiana, Inc. . . . . . . . . . .
Investment primarily to promote localization by
Toyota Motor Manufacturing Texas, Inc. . . . . . . . . . . . .
Investment primarily to promote localization by
Toyota Motor Manufacturing Canada, Inc. . . . . . . . . . . .
Investment primarily to promote localization by
Toyota Motor Europe NV/SA . . . . . . . . . . . . . . . . . . . . .
Investment primarily to promote localization by
Toyota Motor Manufacturing, Northern Kentucky,
Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment primarily to promote localization by
Toyota Motor Thailand Co., Ltd. . . . . . . . . . . . . . . . . . . .
Investment primarily to promote localization by
Toyota Motor Manufacturing, Kentucky, Inc. . . . . . . . . .
Investment primarily in leased automobiles by
Toyota Motor Credit Corporation . . . . . . . . . . . . . . . . . .

42

Set forth below is information with respect to Toyota’s material plans to construct, expand or improve its
facilities between April 2022 and March 2023, 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.

Description of Activity

Total Cost
(Yen in billions)

Location

Primary
Method ofFinancing

430.0

Japan

Internal funds

69.8

United States

Internal funds

66.5

CanadaInternal funds

60.4

United States

Internal funds

55.2

BelgiumInternal funds

53.2

India

Internal funds

Japan
Investment primarily in manufacturing facilities by
Toyota Motor Corporation . . . . . . . . . . . . . . . . . . . . . . . .
Outside of Japan
Investment primarily in manufacturing facilities by
Toyota Battery Manufacturing, Inc. . . . . . . . . . . . . . . . .
Investment primarily in manufacturing facilities by
Toyota Motor Manufacturing, Canada, Inc. . . . . . . . . . .
Investment primarily in manufacturing facilities by
Toyota Motor Manufacturing, Kentucky, Inc. . . . . . . . . .
Investment primarily in manufacturing facilities by
Toyota Motor Europe NV/SA . . . . . . . . . . . . . . . . . . . . .
Investment primarily in manufacturing facilities by
Toyota Kirloskar Motor Private Ltd. . . . . . . . . . . . . . . . .

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.
Seasonality
Toyota does not consider its seasonality material in the sense of significantly higher sales during any certain
period of the year as compared to other periods of the year.
Legal Proceedings
Toyota and other automakers were named in certain class actions filed in Mexico, Canada, Australia, Israel
and Brazil relating to Takata airbag issues. The actions in Mexico, Israel and Brazil are being litigated. The
action in Australia is in the process of resolution. The action in Canada has been settled.
Toyota is named as a defendant in an economic loss class action lawsuit in Australia in which damages areclaimed on the basis that diesel particulate filters in certain vehicle models are defective. On April 7, 2022,
Toyota received an unfavourable judgment in the court of first instance. The judgment included a finding that
there was a perceived reduction in vehicle value of certain vehicle models. Toyota disagrees with the judgment
and has filed an appeal. Other claims of economic loss in this class action lawsuit continue to be litigated at the
court of first instance. In estimating the provision we should record in the consolidated financial statements as aresult of the aforementioned judgment, Toyota has considered various factors including the legal and factual
circumstances of the case, the contents of the judgement of the court of first instance, and the views of legal
counsel. The currently estimated probable economic outflow related to the class action is immaterial to Toyota’s
consolidated financial position, results of operations and cash flows. At this stage, however, the final outcome
and therefore ultimate financial liability for Toyota on account of this matter cannot be predicted with certainty.
As previously disclosed, Toyota entered into a consent decree on January 14, 2021 with the U.S. EPA, theDepartment of Justice (“DOJ”) and the Civil Division of the U.S. Attorney’s Office for the Southern District of
43

New York (“SDNY”) to resolve investigations stemming from a self-reported process gap in fulfilling certain
emissions defect information reporting requirements. Under the consent decree, Toyota agreed to pay, and has
paid, a $180 million civil penalty and to comply with certain additional periodic reporting requirements. The U.S.
District Court for the Southern District of New York approved the consent decree on April 2, 2021.
In April 2020, Toyota reported possible anti-bribery violations related to a Thai subsidiary to the SEC andthe DOJ, and is cooperating with their investigations. Investigations by governmental authorities related to thesematters could result in the imposition of civil or criminal penalties, fines or other sanctions, or litigation. Toyota
cannot predict the scope, duration or outcome of these matters at this time.
On March 4, 2022, Hino Motors, Ltd., a publicly traded Japanese company that produces and sells
commercial trucks and buses, and of which Toyota owns 50.18% of the voting interests as of March 31, 2022,
disclosed that it had voluntarily commenced an investigation into potential issues regarding emissions
performance and certification in the North American and Japanese markets, and that it has reported such issues toand is cooperating with the relevant authorities, including the Japanese Ministry of Land, Infrastructure,
Transport and Tourism (“MLIT”) and the U.S. Department of Justice. Hino announced that, through suchinvestigation, it identified past misconduct in relation to its applications for certification concerning theemissions and the fuel economy performance of certain of its engines for the Japanese market. Accordingly, Hino
disclosed that it decided to suspend the sale of such engine models and their corresponding vehicles in Japan andannounced on March 25, 2022 a recall of vehicles equipped with one of the engines. On March 29, 2022, MLIT
announced that it had revoked certain of the “type approvals” (that is, approvals that exempt new vehicles orvehicles with certain equipment from individual testing by government inspectors prior to sale) and the fuelconsumption ratings relating to such engine models. Investigations by governmental authorities related to thesematters could result in the imposition of civil or criminal penalties, fines or other sanctions, or litigation. Toyota
cannot predict the scope, duration, or outcome of these matters at this time.
Toyota also has various other pending legal actions and claims, including without limitation personal injury
and wrongful death lawsuits and claims in the United States, as well as intellectual property litigation, and issubject to government investigations from time to time.
Beyond the amounts accrued with respect to all aforementioned matters, Toyota is unable to estimate a
range of reasonably possible loss, if any, for the pending legal 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. Therefore,
for all of the aforementioned matters, which Toyota is in discussions to resolve, any losses that are beyond theamounts accrued could have an adverse effect on Toyota’s financial position, results of operations or cash flows.

444.C ORGANIZATIONAL STRUCTURE
As of March 31, 2022, Toyota Motor Corporation had 208 Japanese subsidiaries and 351 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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
JapanDaihatsu Motor Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan
TOYOTA Mobility Tokyo Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan
Toyota Finance Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan
Toyota Mobility Parts Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan
Toyota Auto Body Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan
Toyota Motor Kyushu, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan
Toyota Motor East Japan, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
JapanDaihatsu Motor Kyushu Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan
Cataler Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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 Manufacturing de Baja California, S. de R.L. de C.V. . . . . . .
MexicoToyota Motor Manufacturing de Guanajuato, S.A.de C.V. . . . . . . . . . . . . . .
MexicoToyota Motor Europe NV/SA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BelgiumToyota Motor Manufacturing France S.A.S. . . . . . . . . . . . . . . . . . . . . . . . . . .
FranceToyota France S.A.S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
FranceToyota 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 Manufacturing Turkey Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . .
TurkeyGuangqi Toyota Engine Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
China
China
Toyota Motor (China) Investment Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . .
Toyota Motor Finance (China) Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
China
Toyota Kirloskar Motor Private Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
India
P.T. Astra Daihatsu Motor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Indonesia
PT. 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 Daihatsu Engineering & Manufacturing Co., Ltd. . . . . . . . . . . . . . . .
ThailandToyota Motor Corporation Australia Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Australia
Toyota Finance Australia Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Australia
Toyota Argentina S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Argentina
Toyota do Brasil Ltda. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BrazilToyota South Africa Motors (Pty) Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . South Africa

45

Percentage
Ownership
Interest

Percentage
VotingInterest

100.0050.11
100.00100.00100.0054.08
100.00100.00100.00100.0056.51
100.00100.00100.00100.00100.00100.00100.00100.00100.0051.00
100.00100.00100.00100.00100.00100.00100.00100.00100.00100.0090.00
70.00
100.00100.00
89.00
61.75
95.00
100.00
70.00
87.44
86.43
100.00100.00100.00100.00100.00100.00100.0050.18
100.00100.00100.0054.08
100.00100.00100.00100.0057.31
100.00100.00100.00100.00100.00100.00100.00100.00100.0051.00
100.00100.00100.00100.00100.00100.00100.00100.00100.00100.0090.00
70.00
100.00100.00
89.00
61.75
95.00
100.00
70.00
87.44
86.43
100.00100.00100.00100.00100.00100.004.D PROPERTY, PLANTS AND EQUIPMENT
As of March 31, 2022, Toyota and its affiliated companies produced 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, Czech
Republic, Russia, Poland, Thailand, China, Taiwan, India, Indonesia, South Africa, 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, 2022, 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(thousandsof square Number ofmeters) Employees

Location

Japan (Toyota Motor Corporation)
Toyota Technical Center
Shimoyama . . . . . . . . . . . . . . . . . . . Toyota City, Aichi Pref.
Tahara Plant . . . . . . . . . . . . . . . . . . . . . Tahara City, Aichi Pref.
Toyota Head Office and TechnicalCenter . . . . . . . . . . . . . . . . . . . . . . . . Toyota City, Aichi Pref.
Higashi-Fuji Technical Center . . . . . . . Susono City, Shizuoka Pref.

Principal
Products orFunctions

5,573
4,032

207
6,738

2,767
2,722

22,5062,703

Motomachi Plant . . . . . . . . . . . . . . . . . Toyota City, Aichi Pref.
Takaoka 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.

1,575
1,317
895
808
623
5

8,349
4,068
3,063
2,878
1,985
2,306

Research andDevelopment
Automobiles
Research andDevelopment
Research andDevelopment
Automobiles
Automobiles
Automobile parts
Automobile parts
Automobile parts
OfficeJapan (Subsidiaries)
Daihatsu Motor Co., Ltd . . . . . . . . . . . Ikeda City, Osaka, etc.
Hino Motors, Ltd. . . . . . . . . . . . . . . . . Hino City, Tokyo, etc.
Toyota Auto Body Co., Ltd. . . . . . . . . Kariya City, Aichi Pref., etc.
Toyota Motor Kyushu, Inc. . . . . . . . . . Miyawaka City, Fukuoka Pref.
TOYOTA Mobility Tokyo Inc. . . . . . . Minato-ku, Tokyo, etc.

7,740
6,330
2,271
1,940
365

11,293
12,691
11,5308,563
6,758

Automobiles
Automobiles
Automobiles
Automobiles etc.
Sales facilities

8,127

2,825

Automobiles

5,161

7,460

Automobiles

4,752
4,414

7,756
8,670

Automobiles
Automobiles

4,359

6,521

Automobiles

Outside Japan (Subsidiaries)
Toyota Motor Manufacturing, Texas,
Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . Texas, U.S.A.
Toyota Motor Manufacturing,
Kentucky, Inc. . . . . . . . . . . . . . . . . . Kentucky, U.S.A.
Toyota Motor Manufacturing Canada,Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . Ontario, Canada
Toyota Motor Thailand Co., Ltd. . . . . Samutprakarn, Thailand
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 demand ineach of its production operations throughout the world, Toyota continually reviews and implements 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 of each of its
manufacturing facilities with a reasonable degree of accuracy.
46

As of March 31, 2022, property, plant and equipment having a net book value of approximately¥1,474.6 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 the company’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
Financial information discussed in this section is derived from Toyota’s consolidated financial statementsthat appear elsewhere in this annual report. The financial statements have been prepared in accordance with
IFRS, as issued by the IASB.
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 89% of
Toyota’s total revenues before the elimination of intersegment revenues for fiscal 2022. Toyota’s primarymarkets based on vehicle unit sales for fiscal 2022 were: Japan (23.4%), North America (29.1%), Europe(12.4%) and Asia (18.7%).
Automotive Market Environment
The worldwide automotive market is highly competitive and volatile. The demand for automobiles is affectedby a number of factors including social, political and general economic conditions; introduction of new vehicles andtechnologies; and costs incurred by customers to purchase or operate vehicles. These factors can cause consumer
demand to vary substantially in different geographic markets and for different types of automobiles.
During fiscal 2022, automotive markets recovered compared with fiscal 2021 as demand remained firm inregions including the U.S., China, and Japan, despite being forced to curb production worldwide due to limitedparts supplies caused by the global semiconductor shortage and the impact of COVID-19.
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,
2020
2021
2022

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Overseas total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,240
2,713
1,029
1,600
1,372
6,715
8,955

* “Other” consists of Central and South America, Oceania, Africa and the Middle East, etc.
47

2,125
2,313
959
1,222
1,027
5,521
7,646

1,924
2,394
1,017
1,543
1,352
6,306
8,230

During both fiscal 2021 and fiscal 2022, Toyota’s consolidated vehicle unit sales in Japan decreased due to
weak market conditions as compared to the prior fiscal year. During fiscal 2021, overseas vehicle unit sales
decreased, particularly in North America, Asia and Other, where the contraction of automotive markets was
especially pronounced. During fiscal 2022, overseas vehicle unit sales increased, particularly in Asia and Other,
due to recovery of demand.
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 such factors as the reliance on various suppliers for the provisionof supplies, or the general scarcity of certain supplies,•

climate change risk, including both physical risks as well as transition risks,•

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

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.
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. The recalls and other safety measures described above have
led to a number of claims and lawsuits against Toyota. For a more detailed description of these claims andlawsuits, see “Information on the Company — Business Overview — Legal Proceedings” and note 24 and 30 tothe consolidated financial statements.

48

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 receivables related to financial services increased during fiscal 2022 mainly due to the impact
of changes in exchange rates. Also, vehicles and equipment on operating leases increased during fiscal 2022
mainly due to the impact of changes in exchange rates.
For details on receivables related to financial services and vehicles and equipment on operating leases, seenotes 8 and 12 to the consolidated financial statements.
Toyota’s receivables related to financial services 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 these receivables. See notes 4 and 19 to the consolidated financial statements for additional
information.
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 note 3 to the consolidated financial statements for
additional information.
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 statements of financial position and accordingly, unrealized gains or losses
related to derivatives that are not designated as a hedge are recognized currently in operations. See the discussion
in “Quantitative and Qualitative Disclosures about Market Risk” and notes 20 and 21 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
include general economic conditions, prevailing interest rates and Toyota’s financial strength. Funding costs
decreased during fiscal 2021 and 2022 mainly as a result of lower interest rates.
Toyota launched its credit card business in Japan in April 2001. As of March 31, 2021, Toyota had
16.4 million cardholders, an increase of 0.5 million cardholders compared with March 31, 2020. As of March 31,49

2022, Toyota had 15.7 million cardholders, a decrease of 0.7 million cardholders compared with March 31, 2021.
Credit card receivables as of March 31, 2021 increased by ¥2.4 billion from March 31, 2020 to ¥484.1 billion,
and that as of March 31, 2022 increased by ¥17.3 billion from March 31, 2021 to ¥501.4 billion.
Other Business Operations
Toyota’s other business operations consist of information technology related businesses (including
information technology and telecommunications and GAZOO), housing (including the manufacture and sale ofprefabricated homes) and other businesses. During fiscal 2020, TMC and Panasonic Corporation (“Panasonic”)
established a new joint venture, Prime Life Technologies Corporation (“Prime Life Technologies”), relating to
the town development business. Prime Life Technologies became Toyota’s affiliated company, and Toyota
Housing Corporation (“THC”) as well as Misawa Homes Co., Ltd. (“Misawa Homes”) became subsidiaries ofPrime Life Technologies, causing THC and Misawa Homes to no longer be Toyota’s consolidated subsidiarycompanies.
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 as well as the Australian dollar, the Russian
ruble, the Canadian dollar, the British pound and others. Toyota’s consolidated financial statements, which arepresented in Japanese yen, are affected by foreign currency exchange fluctuations through both translation 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 fiscal 2021
and 2022, Toyota produced 69.7% and 71.6%, respectively, of its non-domestic sales outside Japan. In North
America, 65.3% and 68.5% of vehicles sold in fiscal 2021 and 2022, respectively, were produced locally. In
Europe, 71.9% and 69.1% of vehicles sold in fiscal 2021 and 2022, 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 21 to the consolidated financial statements
for additional information.
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 the50

Japanese yen against other currencies has the opposite effect. In fiscal 2021, the Japanese yen was on averagestronger against the U.S. dollar in comparison to the previous fiscal year, but in fiscal 2022, was on average
weaker against the U.S. dollar in comparison to the previous fiscal year. At the end of each of fiscal 2021 and
2022, the Japanese yen was weaker against the U.S. dollar in comparison to the end of fiscal 2020 and 2021,
respectively. In fiscal 2021 and 2022, the Japanese yen was on average weaker against the euro in comparison to
fiscal 2020 and 2021, respectively. At the end of each of fiscal 2021 and 2022, the Japanese yen was weakeragainst the euro in comparison to the end of fiscal 2020 and 2021, respectively. See note 19 to the consolidated
financial statements for additional information.
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 andassesses financial and non-financial data such as vehicle unit sales, production volume, market share information,
vehicle model plans and plant location costs to allocate resources within the automotive operations. Toyota does
not manage any subset of its automotive operations, such as domestic or overseas operations or parts, as separate
management units.
Geographic Breakdown
The following table sets forth Toyota’s sales revenues in each geographic market based on the country
location of TMC or the subsidiaries that transacted the sale with the external customer for the past three fiscal
years.
Yen in millions
Year ended March 31,
2020
2021
2022

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

9,503,238
10,419,869
3,133,227
4,785,489
2,024,724* “Other” consists of Central and South America, Oceania, Africa and the Middle East.

51

8,587,193
9,325,950
2,968,289
4,555,897
1,777,266

8,214,740
10,897,946
3,692,214
5,778,115
2,796,493

Results of Operations — Fiscal 2022 Compared with Fiscal 2021
Yen in millions
Year ended March 31,
2022 v. 2021 Change
2021
2022
AmountPercentage

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

14,948,931 15,991,436
1,042,505
9,491,803 11,166,479
1,674,676
3,134,489
3,867,847
733,359
5,045,295
6,530,566
1,485,272
1,872,895
2,928,183
1,055,287(7,278,820) (9,105,004) (1,826,185)

7.0%
17.6
23.4
29.4
56.3
—

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

27,214,594

31,379,507

4,164,914

15.3

1,149,217
401,361
107,971435,940
59,84743,413

1,423,445
565,784
162,973
672,350
238,169(67,024)

274,228
164,423
55,002
236,410
178,322(110,436)

23.9
41.0
50.9
54.2
298.0
—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . .
Net margin from income before income taxes . . . . . . . . . . . .
Net income attributable to Toyota Motor Corporation . . . . .
Net margin attributable to Toyota Motor Corporation . . . . . .

2,197,748
2,995,697
797,948
8.1%
9.5%
1.4%
2,932,354
3,990,532
1,058,177
10.8%
12.7%
1.9%
2,245,261
2,850,110
604,849
8.3%
9.1%
0.8%

36.3
36.1
26.9

* “Other” consists of Central and South America, Oceania, Africa and the Middle East.
Sales Revenues
Toyota had sales revenues for fiscal 2022 of ¥31,379.5 billion, an increase of ¥4,164.9 billion, or 15.3%,
compared with the prior fiscal year. The increase resulted mainly from the ¥1,510.0 billion impact of increased
vehicle unit sales and changes in sales mix and the ¥1,390.0 billion favorable impact of changes in exchange
rates.
The table below shows Toyota’s sales revenues from external customers by product category and bybusiness.
Yen in millions
Year ended March 31,
2022 v. 2021 Change
2021
2022
AmountPercentage

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

20,509,606
1,287,053
2,049,187
752,000

23,739,442
1,504,215
2,407,143
881,1933,229,836
217,162
357,956
129,193

15.7%
16.9
17.5
17.2

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

24,597,846
479,553

28,531,993
541,436

3,934,147
61,883

16.0
12.9

Total sales of products . . . . . . . . . . . . . . . . . . . . . . . . . . 25,077,398
Financial services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,137,195

29,073,428
2,306,079

3,996,030
168,884

15.9
7.9

31,379,507

4,164,914

15.3%

Total sales revenues . . . . . . . . . . . . . . . . . . . . . . . .
52

27,214,594

Toyota’s sales revenues include sales revenues from sales of products, consisting of sales revenues fromautomotive operations and all other operations, which increased by 15.9% during fiscal 2022 compared with theprior fiscal year to ¥29,073.4 billion, and sales revenues from financial services operations, which increased by
7.9% during fiscal 2022 compared with the prior fiscal year to ¥2,306.0 billion. The increase in sales revenues
from sales of products is mainly due to an increase in Toyota vehicle unit sales of 584 thousand vehicles and thefavorable impact of changes in exchange rates compared with the prior fiscal year.
The following table shows the number of financing contracts by geographic region at the end of fiscal 2022
and 2021, respectively.
Number of financing contracts in thousands
As of March 31,
2022 v. 2021 Change
2021
2022
AmountPercentage

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

2,660
5,553
1,412
1,992
881

2,745
5,549
1,507
2,070
895

85
(4)
95
78
14

3.2%
(0.1)
6.7
3.9
1.6

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

12,49812,766268

2.1%* “Other” consists of Central and South America, Oceania and Africa.
Geographically, sales revenues (before the elimination of intersegment revenues) for fiscal 2022 increasedby 7.0% in Japan, 17.6% in North America, 23.4% in Europe, 29.4% in Asia, and 56.3% in Other compared withthe prior fiscal year. Excluding the impact of changes in exchange rates of ¥1,390.0 billion, sales revenues infiscal 2022 would have increased by 7.0% in Japan, 10.5% in North America, 16.6% in Europe, 20.3% in Asia,and 49.2% in Other compared with the prior fiscal year.
The following is a discussion of sales revenues in each geographic market (before the elimination ofintersegment revenues).
Japan
Thousands of units
Year ended March 31,
2022 v. 2021 Change
2021
2022
AmountPercentage

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

3,853

3,640

(213)

(5.5)%* including number of exported vehicle unit sales
Yen in millions
Year ended March 31,
2022 v. 2021 Change
2021
2022
AmountPercentage

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

14,674,496
274,435

15,706,514
284,922

1,032,018
10,4877.0%
3.8

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

14,948,931

15,991,436

1,042,505

7.0%

Despite Toyota’s domestic and exported vehicle unit sales having decreased by 213 thousand vehicles
compared with the prior fiscal year, sales revenues in Japan increased due primarily to the favorable impact ofchanges in exchange rates related to export transactions. For fiscal 2021 and 2022, exported vehicle unit sales
were 1,728 thousand units and 1,716 thousand units, respectively.
53North America
Thousands of units
Year ended March 31,
2021
2022

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

2,313

2022 v. 2021 Change
AmountPercentage

2,394

81

3.5%

Yen in millions
Year ended March 31,
2022 v. 2021 Change
2021
2022
AmountPercentage

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

7,995,051
1,496,752

9,578,534
1,587,945

1,583,483
91,193

19.8%
6.1

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

9,491,803

11,166,479

1,674,676

17.6%

Sales revenues in North America increased due primarily to the 81 thousand vehicles increase in vehicle
unit sales and the favorable impact of changes in exchange rates compared with the prior fiscal year.
EuropeThousands of units
Year ended March 31,
2022 v. 2021 Change
2021
2022
AmountPercentage

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

959

1,017

58

6.0%

Yen in millions
Year ended March 31,
2021
2022

2022 v. 2021 Change
AmountPercentage

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

2,976,259
158,229

3,671,205
196,642694,946
38,413

23.3%
24.3

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

3,134,489

3,867,847

733,359

23.4%

Sales revenues in Europe increased due primarily to the 58 thousand vehicles increase in vehicle unit sales
and the favorable impact of changes in exchange rates compared with the prior fiscal year.
Asia
Thousands of units
Year ended March 31,
2022 v. 2021 Change
2021
2022
AmountPercentage

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

1,222

1,543

321

26.3%

Yen in millions
Year ended March 31,
2022 v. 2021 Change
2021
2022
AmountPercentage

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

4,874,746
170,549

6,345,172
185,394

1,470,426
14,845

30.2%
8.7

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

5,045,295

6,530,566

1,485,272

29.4%

54

Sales revenues in Asia increased due primarily to the 321 thousand vehicles increase in vehicle unit sales
and the favorable impact of changes in exchange rates compared with the prior fiscal year.
Other
Thousands of units
Year ended March 31,
2022 v. 2021 Change
2021
2022
AmountPercentage

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

1,027

1,352

326

31.7%

Yen in millions
Year ended March 31,
2022 v. 2021Change
2021
2022
AmountPercentage

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

1,719,132
153,764

2,756,840
171,343

1,037,708
17,57960.4%
11.4

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

1,872,895

2,928,183

1,055,287

56.3%

Sales revenues in Other increased due primarily to the 326 thousand vehicles increase in vehicle unit sales
compared with the prior fiscal year.
Operating Costs and Expenses
Yen in millions
Year ended March 31,
2022 v. 2021 Change
2021
2022
AmountPercentage

Operating costs and expenses
Cost of products sold . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,199,890
Cost of financing services . . . . . . . . . . . . . . . . . . . . . . . 1,182,330
Selling, general and administrative . . . . . . . . . . . . . . . .
2,634,625
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25,016,845

24,250,784
1,157,050
2,975,977

3,050,894(25,280)
341,351

14.4%
(2.1)
13.0

28,383,811

3,366,965

13.5%

Yen in millions
2022 v. 2021 Change

Changes in operating costs and expenses:
Effect of changes in vehicle unit sales and sales mix . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of changes in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of decrease of cost of financial services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase or decrease in expenses and expense reduction efforts . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,330,000
780,000(100,000)
360,000
220,000
776,965

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

3,366,965

Operating costs and expenses increased by ¥3,366.9 billion, or 13.5%, to ¥28,383.8 billion during fiscal
2022 compared with the prior fiscal year.
Cost Reduction Efforts
Operating costs and expenses increased by ¥360.0 billion during fiscal 2022. This increase was due to a¥640.0 billion increase in operating costs and expenses attributable to the impact of soaring materials prices.
55

Through continued cost reduction efforts together with suppliers, however, that increase was partially offset by a¥240.0 billion reduction principally attributable to value engineering activities and other cost reduction efforts
concerning design-related costs, and a ¥40.0 billion reduction attributable to cost reduction efforts principally atplants and logistics departments.
The cost reduction efforts described above related to ongoing value engineering and value analysis
activities, the use of common parts resulting in a reduction of part types and other manufacturing initiatives
designed to reduce the costs of vehicle production. The impact of soaring materials prices includes the impact offluctuation in the price of steel, precious metals, non-ferrous alloys including aluminum, plastic parts and otherproduction materials and parts.
Cost of Products Sold
Cost of products sold increased by ¥3,050.8 billion, or 14.4%, to ¥24,250.7 billion during fiscal 2022
compared with the prior fiscal year. This increase mainly reflected the impact of changes in vehicle unit sales andsales mix, the unfavorable impact of soaring materials prices, and the unfavorable impact of fluctuations inforeign currency translation rates.
Cost of Financial Services
Cost of financial services decreased by ¥25.2 billion, or 2.1%, to ¥1,157.0 billion during fiscal 2022
compared with the prior fiscal year.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased by ¥341.3 billion, or 13.0%, to ¥2,975.9 billion
during fiscal 2022 compared with the prior fiscal year. This increase mainly reflected the unfavorable impact offluctuations in foreign currency translation rates.
Operating Income
Yen in millions
2022 v. 2021 Change

Changes in operating income and loss:
Effect of marketing efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of changes in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase or decrease in expenses and expense reduction efforts . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

860,000(360,000)
610,000(220,000)(92,052)

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

797,948

Toyota’s operating income increased by ¥797.9 billion, or 36.3%, to ¥2,995.6 billion during fiscal 2022
compared with the prior fiscal year. This increase was due to the ¥860.0 billion impact of marketing efforts andthe ¥610.0 billion favorable impact of changes in exchange rates, partially offset by, among other factors, the¥360.0 billion aggregate unfavorable impact of factors categorized as cost reduction efforts (including
fluctuations in raw materials prices) and the ¥220.0 billion aggregate unfavorable impact of changes in expenses
and expense reduction efforts.
Marketing efforts includes changes in vehicle unit sales and sales mix, sales expenses and other. “Other”
includes valuation gains and losses from interest rate swaps etc.
56

The favorable impact of changes in exchange rates was due mainly to the ¥590.0 billion impact of overseas
transactions such as imports and exports denominated in foreign currencies.
During fiscal 2022, operating income (before elimination of intersegment profits) compared with the priorfiscal year increased by ¥274.2 billion, or 23.9%, in Japan, ¥164.4 billion, or 41.0%, in North America,¥55.0 billion, or 50.9%, in Europe, ¥236.4 billion, or 54.2%, in Asia, and ¥178.3 billion, or 298.0%, in Other.
The following is a description of operating income in each geographic market.
Japan
Yen in millions
2022 v. 2021 Change

Changes in operating income and loss:
Effect of marketing efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of changes in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase or decrease in expenses and expense reduction efforts . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

260,000(145,000)
370,000(50,000)(160,772)

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

274,228

North America
Yen in millions
2022 v. 2021 Change

Changes in operating income and loss:
Effect of marketing efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of changes in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase or decrease in expenses and expense reduction efforts . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

380,000(125,000)
50,000(135,000)(5,577)

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

164,423

EuropeYen in millions
2022 v. 2021 Change

Changes in operating income and loss:
Effect of marketing efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of changes in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase or decrease in expenses and expense reduction efforts . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

105,000(40,000)0(10,000)
2

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

55,00257

Asia
Yen in millions
2022 v. 2021 Change

Changes in operating income and loss:
Effect of marketing efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of changes in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase or decrease in expenses and expense reduction efforts . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

130,000(35,000)
170,000(40,000)
11,410Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

236,410

Other
Yen in millions
2022 v. 2021 Change

Changes in operating income and loss:
Effect of marketing efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of changes in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase or decrease in expenses and expense reduction efforts . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

95,000(15,000)
20,00015,00063,322

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

178,322

Other Income and Expenses
Share of profit (loss) of investments accounted for using the equity method during fiscal 2022 increased by¥209.3 billion, or 59.6%, to ¥560.3 billion compared with the prior fiscal year. This increase was due mainly to
an increase during fiscal 2022 in net income attributable to the shareholders of companies accounted for by theequity method.
Other finance income decreased by ¥100.4 billion, or 23.1%, to ¥334.7 billion during fiscal 2022 comparedwith the prior fiscal year. This decrease was due mainly to a decrease during fiscal 2022 in profit on sales of
securities.
Other finance costs decreased by ¥3.5 billion, or 7.4%, to ¥43.9 billion during fiscal 2022 compared withthe prior fiscal year.
Foreign exchange gain (loss), net increased by ¥201.0 billion to ¥216.1 billion during fiscal 2022 comparedwith the prior fiscal year. Foreign exchange gains and losses include the differences between the value of 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 thosesettled using forward foreign currency exchange contracts, or the value translated by appropriate year-end
exchange rates. The ¥201.0 billion increase in foreign exchange gain (loss), net was due mainly to the gains
recorded in fiscal 2022 resulting from the Japanese yen being weaker against foreign currencies at the maturity
dates of the foreign currency deposit than at the dates of the deposit.
Other income (loss), net decreased by ¥53.2 billion, to ¥72.4 billion in losses during fiscal 2022 comparedwith the prior fiscal year.
58Income Taxes
The provision for income taxes increased by ¥465.9 billion, or 71.7%, to ¥1,115.9 billion during fiscal 2022
compared with the prior fiscal year. This increase was due mainly to the increase in income before income taxes
and reversals of deferred tax assets on account of the reassessment of their recoverability. The average effective
tax rate for fiscal 2022 was 28.0%.
Net Income Attributable to Non-controlling Interests
Net income attributable to non-controlling interests decreased by ¥12.6 billion, or 34.0%, to ¥24.5 billion
during fiscal 2022 compared with the prior fiscal year. This decrease was due mainly to a decrease during fiscal
2022 in net income of consolidated subsidiaries.
Net Income Attributable to Toyota Motor Corporation
Net income attributable to Toyota Motor Corporation increased by ¥604.8 billion, or 26.9%, to¥2,850.1 billion during fiscal 2022 compared with the prior fiscal year.
Other Comprehensive Income, Net of Tax
Other comprehensive income, net of tax increased by ¥130.6 billion to ¥1,143.1 billion for fiscal 2022
compared with the prior fiscal year. This increase resulted from exchange differences on translating foreign
operations gains of ¥902.8 billion in fiscal 2022 compared with gains of ¥403.6 billion in the prior fiscal year andshare of other comprehensive income of equity method investees gains of ¥307.4 billion in fiscal 2022 comparedwith gains of ¥88.6 billion in the prior fiscal year, due mainly to the weakening of the yen against the U.S. dollar
and the euro, net changes in revaluation of financial assets measured at fair value through other comprehensive
income losses of ¥203.4 billion in fiscal 2022 compared with gains of ¥303.9 billion in the prior fiscal year, due
mainly to changes in prices of public and corporate bonds, and remeasurements of defined benefit plans gains of¥136.2 billion in fiscal 2022 compared with gains of ¥216.2 billion in the prior fiscal year, due mainly to changes
in fair value of plan assets.
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,
2022 v. 2021 Change
2021
2022
AmountPercentage

Automotive:
Sales revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Services:
Sales revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All Other:
Sales revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intersegment elimination/unallocated amount:
Sales revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
59

24,651,552
1,607,161

28,605,738
2,284,290

3,954,186
677,130

16.0%
42.1

2,162,237
495,5932,324,026
657,001

161,789
161,408

7.5
32.6

1,052,365
85,3501,129,876
42,30277,512(43,048)7.4(50.4)(651,560)
9,645(680,133)
12,104(28,573)
2,459

—
—

Automotive Operations Segment
The automotive operations segment is Toyota’s largest operating segment by sales revenues. Sales revenues
for the automotive segment increased during fiscal 2022 by ¥3,954.1 billion, or 16.0%, to ¥28,605.7 billion
compared with the prior fiscal year. The increase mainly reflects the ¥1,510.0 billion favorable impact of changes
in vehicle unit sales and sales mix and the ¥1,250.0 billion favorable impact of changes in exchange rates.
Operating income from the automotive operations increased by ¥677.1 billion, or 42.1%, to ¥2,284.2 billion
during fiscal 2022 compared with the prior fiscal year. This increase in operating income was due mainly to the¥760.0 billion effect of marketing activities and the ¥570.0 billion favorable impact of changes in exchange rates,
partially offset by the ¥360.0 billion aggregate unfavorable impact of factors categorized as cost reduction efforts(including fluctuations in raw materials prices) and the ¥220.0 billion aggregate unfavorable impact of changes in
expenses and expense reduction efforts.
Financial Services Operations Segment
Sales revenues for the financial services operations increased during fiscal 2022 by ¥161.7 billion, or 7.5%,
to ¥2,324.0 billion compared with the prior fiscal year. This increase was due mainly to the favorable impact ofchanges in exchange rates.
Operating income from financial services operations increased by ¥161.4 billion, or 32.6%, to ¥657.0 billion
during fiscal 2022 compared with the prior fiscal year. This increase was due primarily to the increases in bothfinancing margin and financing volume.
All Other Operations Segment
Sales revenues for Toyota’s other operations segments increased by ¥77.5 billion, or 7.4%, to¥1,129.8 billion during fiscal 2022 compared with the prior fiscal year.
Operating income from Toyota’s other operations segments decreased by ¥43.0 billion, or 50.4%, to¥42.3 billion during fiscal 2022 compared with the prior fiscal year.

60Results of Operations — Fiscal 2021 Compared with Fiscal 2020
Yen in millions
Year ended March 31,
2021 v. 2020 Change
2020
2021
AmountPercentage

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

16,441,852 14,948,931 (1,492,921)
10,642,034
9,491,803 (1,150,231)
3,355,357
3,134,489(220,868)
5,293,231
5,045,295(247,936)
2,114,111
1,872,895(241,216)(7,980,038) (7,278,820)
701,218(9.1)%(10.8)(6.6)(4.7)(11.4)—

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

29,866,547

27,214,594(2,651,954)(8.9)

1,585,276
253,205
143,817363,547
84,001(30,613)

1,149,217
401,361
107,971435,940
59,84743,413(436,059)
148,156(35,846)
72,393(24,154)
74,026(27.5)
58.5(24.9)
19.9(28.8)—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . .
Net margin from income before income taxes . . . . . . . . . . . .
Net income attributable to Toyota Motor Corporation . . . . .
Net margin attributable to Toyota Motor Corporation . . . . . .

2,399,232
2,197,748
8.0%
8.1%
2,792,942
2,932,354
9.4%
10.8%
2,036,140
2,245,261
6.8%
8.3%

(201,484)
0.1%
139,4121.4%
209,121
1.5%

(8.4)
5.0
10.3

* “Other” consists of Central and South America, Oceania, Africa and the Middle East.
Sales Revenues
Toyota had sales revenues for fiscal 2021 of ¥27,214.5 billion, a decrease of ¥2,651.9 billion, or 8.9%,
compared with the prior fiscal year. The decrease resulted mainly from the ¥2,080.0 billion impact of decreased
vehicle unit sales and changes in sales mix and the ¥560.0 billion unfavorable impact of changes in exchange
rates.
The table below shows Toyota’s sales revenues from external customers by product category and bybusiness.
Yen in millions
Year ended March 31,
2021 v. 2020 Change
2020
2021
AmountPercentage

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

22,647,701
1,197,089
2,170,448
755,141

20,509,606
1,287,053
2,049,187
752,000(2,138,095)
89,964(121,261)(3,141)(9.4)%
7.5
(5.6)
(0.4)

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

26,770,379
923,314

24,597,846
479,553(2,172,533)(443,761)(8.1)(48.1)

Total sales of products . . . . . . . . . . . . . . . . . . . . . . . . . . 27,693,693
Financial Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,172,854

25,077,398
2,137,195(2,616,295)(35,659)

(9.4)
(1.6)

27,214,594(2,651,954)(8.9)%

Total sales revenues . . . . . . . . . . . . . . . . . . . . . . . .
61

29,866,547

Toyota’s sales revenues include sales revenues from sales of products, consisting of sales revenues fromautomotive operations and all other operations, which decreased by 9.4% during fiscal 2021 compared with theprior fiscal year to ¥25,077.3 billion, and sales revenues from financial services operations which decreased by
1.6% during fiscal 2021 compared with the prior fiscal year to ¥2,137.1 billion. The decrease in sales revenues
from sales of products is mainly due to a decrease in Toyota vehicle unit sales of 1,309 thousand vehicles
compared with the prior fiscal year.
The following table shows the number of financing contracts by geographic region at the end of fiscal 2021
and 2020, respectively.
Number of financing contracts in thousands
As of March 31,
2021 v. 2020 Change
2020
2021
AmountPercentage

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

2,414
5,394
1,318
1,864
926

2,660
5,553
1,412
1,992
881

246
159
94
128
(45)

10.2%
2.9
7.1
6.9
(4.9)

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

11,916

12,498582

4.9%* “Other” consists of Central and South America, Oceania and Africa.
Geographically, sales revenues (before the elimination of intersegment revenues) for fiscal 2021 decreased
by 9.1% in Japan, 10.8% in North America, 6.6% in Europe, 4.7% in Asia, and 11.4% in Other compared withthe prior fiscal year. Excluding the impact of changes in exchange rates of ¥560.0 billion, sales revenues in fiscal
2021 would have decreased by 9.1% in Japan, 8.5% in North America, 5.5% in Europe, and 3.5% in Asia, as well
as would have increased by 0.1% in Other compared with the prior fiscal year.
The following is a discussion of sales revenues in each geographic market (before the elimination ofintersegment revenues).
Japan
Thousands of units
Year ended March 31,
2021 v. 2020 Change
2020
2021
AmountPercentage

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

4,284

3,853

(431)

(10.0)%* including number of exported vehicle unit sales
Yen in millions
Year ended March 31,
2021 v. 2020 Change
2020
2021
AmountPercentage

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

16,197,556
244,296

14,674,496
274,435(1,523,060)
30,139(9.4)%
12.3

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

16,441,852

14,948,931(1,492,921)(9.1)%

Sales revenues in Japan decreased due primarily to the 431 thousand vehicles decrease in vehicle unit sales
compared with the prior fiscal year. For fiscal 2020 and 2021, exported vehicle unit sales were 2,044 thousand
units and 1,728 thousand units, respectively.
62North America
Thousands of units
Year ended March 31,
2021 v. 2020 Change
2020
2021
AmountPercentage

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

2,713

2,313

(400)

(14.8)%

Yen in millions
Year ended March 31,
2021 v. 2020 Change
2020
2021
AmountPercentage

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

9,089,289
1,552,745

7,995,051
1,496,752(1,094,238)(55,993)(12.0)%(3.6)

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

10,642,034

9,491,803(1,150,231)(10.8)%

Sales revenues in North America decreased due primarily to the 400 thousand vehicles decrease in vehicle
unit sales compared with the prior fiscal year.
EuropeThousands of units
Year ended March 31,
2021 v. 2020 Change
2020
2021
AmountPercentage

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

1,029

959

(70)

(6.8)%

Yen in millions
Year ended March 31,
2021 v. 2020 Change
2020
2021
AmountPercentage

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

3,206,943
148,4142,976,259
158,229(230,683)
9,815(7.2)%
6.6

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

3,355,357

3,134,489(220,868)(6.6)%

Sales revenues in Europe decreased due primarily to the 70 thousand vehicles decrease in vehicle unit sales
compared with the prior fiscal year.
Asia
Thousands of units
Year ended March 31,
2021 v. 2020 Change
2020
2021
AmountPercentage

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

1,600

1,222

(378)

(23.6)%

Yen in millions
Year ended March 31,
2021 v. 2020 Change
2020
2021
AmountPercentage

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

5,120,384
172,847

4,874,746
170,549(245,638)(2,298)(4.8)%(1.3)

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

5,293,231

5,045,295(247,936)(4.7)%

63

Sales revenues in Asia decreased due primarily to the 378 thousand vehicles decrease in vehicle unit sales
compared with the prior fiscal year.
Other
Thousands of units
Year ended March 31,
2021 v. 2020 Change
2020
2021
AmountPercentage

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

1,372

1,027

(345)

(25.2)%

Yen in millions
Year ended March 31,
2021 v. 2020 Change
2020
2021
AmountPercentage

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

1,941,859
172,252

1,719,132
153,764(222,728)(18,488)(11.5)%(10.7)

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

2,114,111

1,872,895(241,216)(11.4)%

Sales revenues in Other decreased due primarily to the 345 thousand vehicles decrease in vehicle unit sales
compared with the prior fiscal year.
Operating Costs and Expenses
Yen in millions
Year ended March 31,
2021 v. 2020 Change
2020
2021
AmountPercentage

Operating costs and expenses
Cost of products sold . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,103,596
Cost of financial services . . . . . . . . . . . . . . . . . . . . . . . . 1,381,755
Selling, general and administrative . . . . . . . . . . . . . . . .
2,981,965
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27,467,315

21,199,890
1,182,330
2,634,625(1,903,706)(199,424)(347,339)(8.2)%(14.4)(11.6)

25,016,845(2,450,470)(8.9)%

Yen in millions
2021 v. 2020 Change

Changes in operating costs and expenses:
Effect of changes in vehicle unit sales and sales mix . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of changes in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of decrease of cost of financial services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase or decrease in expenses and expense reduction efforts . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1,330,000)(305,000)(175,500)(150,000)(70,000)(419,970)

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

(2,450,470)

Operating costs and expenses decreased by ¥2,450.4 billion, or 8.9%, to ¥25,016.8 billion during fiscal 2021
compared with the prior fiscal year.
Cost Reduction Efforts
During fiscal 2021, continued cost reduction efforts together with suppliers contributed to a reduction ofoperating costs and expenses by ¥150.0 billion. This was due to ¥80.0 billion in cost reduction efforts concerning
64

design related costs due mainly to ongoing value engineering activities, and ¥70.0 billion in cost reduction efforts
at plants and logistics departments.
These cost reduction efforts related to ongoing value engineering and value analysis activities, the use ofcommon parts resulting in a reduction of part types and other manufacturing initiatives designed to reduce thecosts of vehicle production. The amount of the effect of cost reduction efforts includes the impact of fluctuationin the price of steel, precious metals, non-ferrous alloys including aluminum, plastic parts and other production
materials and parts.
Cost of Products Sold
Cost of products sold decreased by ¥1,903.7 billion, or 8.2%, to ¥21,199.8 billion during fiscal 2021
compared with the prior fiscal year. This decrease mainly reflected the impact of changes in vehicle unit sales
and sales mix, the impact of deconsolidation of certain entities due to changes in ownership interest, thefavorable impact of fluctuations in foreign currency translation rates, and the impact of cost reduction efforts.
Cost of Financial services
Cost of financial services decreased by ¥199.4 billion, or 14.4%, to ¥1,182.3 billion during fiscal 2021
compared with the prior fiscal year. The decrease resulted mainly from the decrease in expenses related toresidual value losses and the decrease in funding costs resulting from lower interest rates.
Selling, General and Administrative Expenses
Selling, general and administrative expenses decreased by ¥347.3 billion, or 11.6%, to ¥2,634.6 billion
during fiscal 2021 compared with the prior fiscal year. This decrease mainly reflected the impact of
deconsolidation of certain entities due to changes in ownership interest, the decrease in advertising costs, and thefavorable impact of fluctuations in foreign currency translation rates.
Operating Income
Yen in millions
2021 v. 2020 Change

Changes in operating income and loss:
Effect of marketing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of changes in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase or decrease in expenses and expense reduction efforts . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(210,000)
150,000(255,000)
70,00043,516

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

(201,484)

Toyota’s operating income decreased by ¥201.4 billion, or 8.4%, to ¥2,197.7 billion during fiscal 2021
compared with the prior fiscal year. This decrease was due to the ¥255.0 billion unfavorable impact of changes inexchange rates and the ¥210.0 billion impact of marketing activities, partially offset by the ¥150.0 billion
increase in cost reduction efforts and the ¥70.0 billion increase in expenses and expense reduction efforts.
Marketing efforts and marketing activities include changes in vehicle unit sales and sales mix, sales
expenses and other. “Other” includes valuation gains and losses from interest rate swaps etc.
The unfavorable impact of changes in exchange rates was due mainly to the ¥210.0 billion impact ofoverseas transactions such as imports and exports denominated in foreign currencies.
65

During fiscal 2021, operating income (before elimination of intersegment profits) compared with the priorfiscal year decreased by ¥436.0 billion, or 27.5%, in Japan, ¥35.8 billion, or 24.9%, in Europe, and ¥24.1 billion,or 28.8%, in Other, and increased by ¥148.1 billion, or 58.5%, in North America, and ¥72.3 billion, or 19.9%, inAsia.
The following is a description of operating income in each geographic market.
Japan
Yen in millions
2021 v. 2020 Change

Changes in operating income and loss:
Effect of marketing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of changes in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase or decrease in expenses and expense reduction efforts . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(475,000)
125,000(170,000)
65,00018,941

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

(436,059)

North America
Yen in millions
2021 v. 2020 Change

Changes in operating income and loss:
Effect of marketing efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of changes in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase or decrease in expenses and expense reduction efforts . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

150,000
10,000(20,000)(50,000)
58,156

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

148,156

EuropeYen in millions
2021 v. 2020 Change

Changes in operating income and loss:
Effect of marketing efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of changes in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase or decrease in expenses and expense reduction efforts . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15,0000(50,000)
15,000(15,846)

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

(35,846)

66

Asia
Yen in millions
2021 v. 2020 Change

Changes in operating income and loss:
Effect of marketing efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of changes in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase or decrease in expenses and expense reduction efforts . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20,00020,00010,00010,00012,393

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

72,393Other
Yen in millions
2021 v. 2020 Change

Changes in operating income and loss:
Effect of marketing efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect ofcost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of changes in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase or decrease in expenses and expense reduction efforts . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

80,000(5,000)(25,000)(40,000)(34,154)

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

(24,154)

Other Income and Expenses
Share of profit (loss) of investments accounted for using the equity method during fiscal 2021 increased by¥40.7 billion, or 13.1%, to ¥351.0 billion compared with the prior fiscal year. This increase was due mainly to anincrease during fiscal 2021 in net income attributable to the shareholders of companies accounted for by theequity method.
Other finance income increased by ¥129.3 billion, or 42.3%, to ¥435.2 billion during fiscal 2021 comparedwith the prior fiscal year. This increase was due mainly to an increase during fiscal 2021 in profit on securities
revaluation.
Other finance costs increased by ¥0.3 billion, or 0.8%, to ¥47.5 billion during fiscal 2021 compared with theprior fiscal year.
Foreign exchange gain (loss), net increased by ¥109.7 billion to ¥15.1 billion during fiscal 2021 comparedwith the prior fiscal year. Foreign exchange gains and losses include the differences between the value of 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 thosesettled using forward foreign currency exchange contracts, or the value translated by appropriate year-end
exchange rates. The ¥109.7 billion increase in foreign exchange gain (loss), net was due mainly to the losses
recorded in fiscal 2020 resulting from the Japanese yen being stronger against foreign currencies at the maturity
dates of the foreign currency loans than at the dates of the lending.
Other income (loss), net increased by ¥61.3 billion, to ¥19.2 billion in losses during fiscal 2021 comparedwith the prior fiscal year.
67Income Taxes
The provision for income taxes decreased by ¥31.8 billion, or 4.7%, to ¥649.9 billion during fiscal 2021
compared with the prior fiscal year. This decrease was due mainly to the increased proportion of income before
income taxes of foreign subsidiaries where statutory tax rates are low. The average effective tax rate for fiscal
2021 was 22.2%.
Net Income Attributable to Noncontrolling Interests
Net income attributable to non-controlling interests decreased by ¥37.8 billion, or 50.5%, to ¥37.1 billion
during fiscal 2021 compared with the prior fiscal year. This decrease was due mainly to a decrease during fiscal
2021 in net income of consolidated subsidiaries.
Net Income Attributable to Toyota Motor Corporation
Net income attributable to Toyota Motor Corporation increased by ¥209.1 billion, or 10.3%, to¥2,245.2 billion during fiscal 2021 compared with the prior fiscal year.
Other Comprehensive Income, Net of Tax
Other comprehensive income, net of tax increased by ¥1,521.1 billion to ¥1,012.4 billion for fiscal 2021
compared with the prior fiscal year. This increase resulted from exchange differences on translating foreign
operations gains of ¥403.6 billion in fiscal 2021 compared with losses of ¥362.0 billion in the prior fiscal year.
This was due mainly to the weakening of the yen against the U.S. dollar and the euro, net changes in revaluationof financial assets measured at fair value through other comprehensive income gains of ¥303.9 billion in fiscal
2021 compared with losses of ¥130.4 billion in the prior fiscal year, due mainly to changes in prices ofmarketable stocks in stock exchange markets, and remeasurements of defined benefit plans gains in fiscal 2021
of ¥216.2 billion compared with losses of ¥43.3 billion in the prior fiscal year, due mainly to changes in fairvalue of plan assets.
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,
2021 v. 2020 Change
2020
2021
AmountPercentage

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

26,799,743
2,013,134

24,651,552
1,607,161(2,148,191)(405,973)(8.0)%(20.2)

2,193,170
283,742

2,162,237
495,593(30,933)
211,851

(1.4)
74.7

1,504,920
103,356

1,052,365
85,350(452,555)(18,006)(30.1)(17.4)(631,286)(999)(651,560)
9,645(20,274)
10,645——

Automotive Operations Segment
The automotive operations segment is Toyota’s largest operating segment by sales revenues. Sales revenues
for the automotive segment decreased during fiscal 2021 by ¥2,148.1 billion, or 8.0%, to ¥24,651.5 billion
68compared with the prior fiscal year. The decrease mainly reflects the ¥2,080.0 billion unfavorable impact ofchanges in vehicle unit sales and sales mix and the ¥560.0 billion unfavorable impact of changes in exchange
rates.
Operating income from the automotive operations decreased by ¥405.9 billion, or 20.2%, to ¥1,607.1 billion
during fiscal 2021 compared with the prior fiscal year. This decrease in operating income was due mainly to the¥375.0 billion effect of marketing activities and the ¥255.0 billion unfavorable impact of changes in exchange
rates, partially offset by the ¥150.0 billion impact of cost reduction efforts and the ¥70.0 billion decrease in
expenses and expense reduction efforts.
Financial Services Operations Segment
Sales revenues for the financial services operations decreased during fiscal 2021 by ¥30.9 billion, or 1.4%,
to ¥2,162.2 billion compared with the prior fiscal year. This decrease was due mainly to the unfavorable impact
of changes in exchange rates.
Operating income from financial services operations increased by ¥211.8 billion, or 74.7%, to ¥495.5 billion
during fiscal 2021 compared with the prior fiscal year. This increase was due primarily to the decrease in
expenses related to credit losses and residual value losses, and the recording of valuation gains on interest rate
swaps stated at fair value in sales finance subsidiaries.
All Other Operations Segment
Sales revenues for Toyota’s other operations segments decreased by ¥452.5 billion, or 30.1%, to¥1,052.3 billion during fiscal 2021 compared with the prior fiscal year. This was mainly due to the full-year
impact of THC and Misawa Homes no longer being Toyota’s consolidated subsidiary companies as of January
2020.
Operating income from Toyota’s other operations segments decreased by ¥18.0 billion, or 17.4%, to¥85.3 billion during fiscal 2021 compared with the prior fiscal year. This decrease includes the negative impact
caused by THC and Misawa Homes no longer being Toyota’s consolidated subsidiary companies.
Related Party Transactions
See note 32 to the consolidated financial statements for further discussion.
Basic Concept Regarding the Selection of Accounting Standards
TMC has adopted IFRS for its consolidated financial statements in order to improve the international
comparability of its financial information in the capital markets, among other reasons, beginning with the firstquarter of the fiscal year ended March 31, 2021.
OutlookAs the automotive industry faces a once-in-a-century transformational period and at a time when the rightanswers are elusive, we are committed to “Producing Happiness for All” together with our stakeholders,
underpinned by the spirit of “For the Sake of Others” which we have maintained since our founding. We believe
management practices that value what makes us Toyota will lead to sustained efforts to achieve the aims of theSDGs to “build a better world” while ensuring that “no one will be left behind.” We are accelerating our shift
toward product-centered management under the “making ever-better cars” initiative, efforts to achieve carbon
neutrality, and endeavors to develop essential technologies such as software and connected vehicles. Taking theforegoing external factors and other factors into account, Toyota expects that sales revenues for fiscal 2023 will69

increase compared with fiscal 2022 due mainly to the increase in vehicle unit sales. Toyota expects that operating
income will decrease in fiscal 2023 compared with fiscal 2022 due mainly to the unfavorable impact of soaring
materials prices, partially offset by the increase in vehicle unit sales. Toyota expects that income before income
taxes and net income attributable to Toyota Motor Corporation will also decrease in fiscal 2023 compared withfiscal 2022.
For the purposes of this outlook discussion, Toyota is assuming an average exchange rate of ¥115 to the
U.S. dollar and ¥130 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 With Respect To 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 describedabove or other factors, including those described in “Risk Factors”.
5.B LIQUIDITY AND CAPITAL RESOURCES
Historically, Toyota has funded its cash requirements, including those relating to capital expenditures aswell as its research and development activities through cash generated by operations.
In fiscal 2023, Toyota expects to sufficiently fund its cash requirements, including those relating to capital
expenditures as well as its research and development activities, through cash and cash equivalents on hand, cash
generated by operations, the issuance of corporate bonds, and debt financing. Toyota will use its funds toefficiently invest in maintenance and replacement of conventional manufacturing facilities and the introductionof new products, and will focus on investment in areas contributing to strengthening competitiveness and future
growth for realization of a new mobility society. See “Information on the Company — Business Overview —Capital Expenditures and Divestitures” for information regarding Toyota’s material capital expenditures anddivestitures for fiscal 2021 and 2022, 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 ¥995.4 billion to ¥3,722.6 billion for fiscal 2022,
compared with ¥2,727.1 billion for fiscal 2021. The increase was primarily attributable to the ¥592.2 billion
increase in net income.
Net cash used in investing activities decreased by ¥4,106.6 billion to ¥577.4 billion for fiscal 2022,
compared with ¥4,684.1 billion for fiscal 2021. The decrease was primarily attributable to the ¥3,770.9 billion
decrease in time deposits, which was largely attributable to withdrawals from time deposits that were fundedfrom debt financing that was conducted taking into account the risk that COVID-19 will have a prolonged
impact.
Net cash used in financing activities was ¥2,466.5 billion for fiscal 2022, compared with net cash provided
by financing activities of ¥2,739.1 billion for fiscal 2021, a ¥5,205.6 billion change. The change was primarily
attributable to the ¥1,533.5 billion decrease in funding by long-term debt.
Total capital expenditures for property, plant and equipment, including vehicles and equipment on operatingleases, were ¥3,611.5 billion during fiscal 2022, remaining largely unchanged from the ¥3,609.6 billion in total
capital expenditures during the prior fiscal year.
70

Toyota expects investments in property, plant and equipment, excluding vehicles and equipment on
operating leases, to be approximately ¥1,400.0 billion during fiscal 2023.
Cash and cash equivalents were ¥6,113.6 billion as of March 31, 2022. Most of Toyota’s cash and cash
equivalents are held in Japanese yen or in U.S. dollars.
Liquid assets, which Toyota defines as cash and cash equivalents, time deposits, public and corporate bonds
and its investment in monetary trust funds decreased during fiscal 2022, by ¥761.1 billion, or 5.4%, to¥13,451.0 billion as of March 31, 2022.
Trade accounts and notes receivable, less allowance for doubtful accounts increased during fiscal 2021 by¥184.0 billion, or 6.2%, to ¥3,142.8 billion. This increase was due mainly to increased revenue from sales during
the quarter ended March 31, 2022.
Inventories increased during fiscal 2022 by ¥933.3 billion, or 32.3%, to ¥3,821.3 billion. This increase wasdue mainly to an increase in unit prices attributable to rising prices in the precious metal market.
Total finance receivables, net increased during fiscal 2022 by ¥2,558.7 billion, or 13.3%, to¥21,764.4 billion. This increase was due mainly to an increase in the impact of changes in exchange rates.
Finance receivables were geographically distributed as follows: in North America 55.0%, in Asia 12.9%, in
Europe 13.3%, in Japan 7.3% and in Other 11.5%.
Other financial assets decreased during fiscal 2022 by ¥1,274.8 billion, or 9.6%. This decrease was due
mainly to a decrease in time deposits and other factors.
Property, plant and equipment increased during fiscal 2022 by ¥915.4 billion, or 8.0%. This increase wasdue mainly to capital expenditures.
Accounts and notes payable increased during fiscal 2022 by ¥246.1 billion, or 6.1%.
Income taxes payable increased during fiscal 2022 by ¥475.9 billion, or 135.6%. This increase was mainly
due to an increase in income before income taxes that led to increased income tax expense.
Toyota’s total borrowings increased during fiscal 2022 by ¥836.7 billion, or 3.3%. Toyota’s short-termborrowings consist of loans with a weighted-average interest rate of 1.64% and commercial paper with aweighted-average interest rate of 0.38%. Short-term borrowings decreased during fiscal 2022 by ¥235.0 billion,
or 5.4%, to ¥4,104.8 billion. Toyota’s long-term debt consists of unsecured and secured loans, medium-term
notes, unsecured and secured notes etc. with weighted-average interest rates ranging from 1.02% to 5.81%, andmaturity dates ranging from 2022 to 2048. The current portion of long-term debt decreased during fiscal 2022 by¥557.4 billion, or 7.4%, to ¥7,026.8 billion and the non-current portion increased by ¥1,809.9 billion, or 13.8%,
to ¥14,943.7 billion. The increase in total borrowings resulted mainly from the increasing demand for financing
associated with the increase in the loan balance at financial subsidiaries. As of March 31, 2022, approximately
52% of long-term debt was denominated in U.S. dollars, 11% in Japanese yen, 13% in euros, 6% in Australian
dollars, 4% in Canadian dollars, and 14% in other currencies. Toyota hedges interest rate risk exposure of fixedrate borrowings by entering into interest rate swaps. There are no material seasonal variations in Toyota’s
borrowings requirements.
As of March 31, 2022, Toyota’s total interest bearing debt was 101.0% of Toyota Motor Corporation
shareholders’ equity, compared with 109.6% as of March 31, 2021.
The following table provides information on credit ratings of Toyota’s short-term borrowing and long-term
debt from Standard & Poor’s Ratings Group (S&P), Moody’s Investors Services (Moody’s), and Rating and71

Investment Information, Inc. (R&I), as of May 31, 2022. A credit rating is not a recommendation to buy, 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+
A+

P-1
A1

—
AAA

Toyota’s net defined benefit liability (asset) of Japanese plans decreased during fiscal 2022 by ¥50.6 billion,
or 17.9%, to ¥232.3 billion. The net defined benefit liability (asset) of foreign plans decreased during fiscal 2022
by ¥77.4 billion, or 22.7%, to ¥262.9 billion. The amounts of net defined benefit liability (asset) will be fundedthrough future cash contributions by Toyota or in some cases will be settled on the retirement date of eachcovered employee. The decrease in net defined benefit liability (asset) of the Japanese plans reflects mainly an
increase in plan assets that resulted from an increase in stock prices. See note 23 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.
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 cash requirements and that, by maintaining its high credit ratings, it will continue to beable to access funds from external sources in large amounts and at relatively low costs. Toyota’s ability tomaintain 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, as well as Toyota’s successful implementation of its business strategy.
Toyota uses its securitization program as part of its funding through special purpose entities for its financial
services operations. Toyota is considered as the primary beneficiary of these special purpose entities andtherefore consolidates them. Toyota has not entered into any off-balance sheet securitization transactions during
fiscal 2022.
For information regarding the amounts of non-derivative financial liabilities and derivative financial
liabilities by a remaining contract maturity period, see note 19 to the consolidated 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. These arrangements may contain fixed/
minimum quantity purchase requirements. Toyota enters into such arrangements to facilitate an adequate supplyof these materials and services.

72

The following tables summarize Toyota’s contractual obligations and commercial commitments as ofMarch 31, 2022.

Total

Contractual Obligations:Short-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . 4,104,858
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . 22,391,500
Commitments for the purchase of property,
plant, other assets and services (note 30) . . . .
349,143

Yen in millions
Payments Due by PeriodLess than
1 to
3 to
1 year
3 years
5 years

5 years
and after

4,104,858———
7,082,981 8,937,246 4,447,945 1,923,328
201,482

89,69540,423

17,543

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,845,501 11,389,321 9,026,941 4,488,368 1,940,871
Commercial Commitments (note 30):
Maximum potential exposure to guarantees
given in the ordinary course of business . . . . .

3,641,978939,994 1,631,204

975,963

94,817

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

3,641,978939,994 1,631,204

975,963

94,817* “Long-term debt” represents future principal payments.
Toyota expects to contribute ¥33,069 million domestically and ¥14,876 million overseas to its pension plansin fiscal 2023.
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 ¥179.2 billion as of March 31, 2022.
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
evaluates 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 ¥3,839.1 billion as of March 31, 2022.

73

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, 2022, ranged from one month to 8 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, 2022 is ¥3,641.9 billion. Liabilities forthese guarantees of ¥21.8 billion have been provided as of March 31, 2022. Under these guarantee contracts,
Toyota is entitled to recover any amounts paid by it from the customers whose obligations it guaranteed.
5.C RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES
Toyota’s research and development is dedicated to capturing the increasingly diverse and sophisticatedmarket through the development of attractive, affordable, high-quality products for customers worldwide. The
intellectual property that R&D generates is a vital management resource that Toyota utilizes and protects tomaximize its corporate value. For a more detailed discussion of the company’s research and development
objectives and policies, see “Information on the Company — Business Overview — Research andDevelopment.”
Toyota’s research and development expenditures were approximately ¥1,124.2 billion in fiscal 2022,¥1,090.4 billion in fiscal 2021 and ¥1,110.3 billion in fiscal 2020.
Toyota presents research and development expenditures as a supplemental measure that demonstrates theamount of research and development expenditures undertaken during the relevant reporting period. Toyota
defines research and development expenditures as research and development cost, plus research anddevelopment-related expenditures that were recognized as intangible assets, less amortization expenses for such
assets. This measure has limitations as an analytical tool, and you should not consider it in isolation, or as a
substitute for an analysis of Toyota’s research and development cost as reported under IFRS.
For details of the research and development cost recorded in the consolidated statement of income, see note
27 to the consolidated financial statements.
Toyota operates a global research and development organization with the primary goal of building
automobiles that meet the needs of customers in every region of the world. In Japan, research and development
operations are led by Toyota and Toyota Central Research & Development Laboratories, Inc., which works
closely with Daihatsu, Hino, Toyota Auto Body Co., Ltd., Toyota Motor East Japan, Inc., and many other Toyotagroup companies. Overseas, Toyota has a worldwide network of technical centers as well as design andmotorsports research and development centers.
Toyota established TRI in January 2016 to accelerate research and development of artificial intelligence
technology, which has significant potential to support future industrial technologies. In July 2017, TRI invested$100 million to launch a venture capital fund designed to provide financing to startup companies, and is making
investments in newly established promising startup companies in the four areas of artificial intelligence, robotics,
autonomous mobility, and data and cloud technology. TRI successively invested another $100 million in May
2019 and $150 million in June 2021. In addition, TRI established a $150 million fund in an aim to achievecarbon neutrality.
In Japan, Toyota established a new company, Toyota Research Institute — Advanced Development(“TRI-AD”), in March 2018 to further accelerate its efforts in advanced development for automated driving
technology and related technologies. Its key objectives include creating a smooth software pipeline from research
to commercialization, leveraging data-handling capabilities, strengthening collaboration in development within74

the Toyota group, including TRI, to accelerate development, and recruiting and employing top-level engineers
globally, while cultivating and coordinating strong talent within the Toyota group. In January 2021, TRI-AD was
reorganized into Woven Planet Group comprising four companies—Woven Planet Holdings, Inc., which is
responsible for decision-making for the entire group and creates new business opportunities; Woven Core, Inc.,
which assumed the business of TRI-AD and is responsible for the development of automated driving
technologies; Woven Alpha, Inc., which is responsible for the development of new projects such as Woven City
and Arene, a software platform; and Woven Capital, L.P. with a total investment value of $800 million, whichinvests in growth-stage companies in areas such as autonomous driving mobility, artificial intelligence, and smart
city. Moreover, to bolster overseas research and development initiatives related to automated driving technology
and software platforms, Toyota established Woven Planet North America (WPNA) in the United States andWoven Planet United Kingdom in the United Kingdom, and transferred TRI’s automated driving division to
WPNA in May 2022.
Toyota also established a technical development center in Otemachi, Tokyo, Japan in October 2018 as a site
for development of key IT technologies that will support automated driving in collaboration with Woven Core, as
well as promotion of collaboration with venture companies and creation of new value by utilizing big data.
The following table provides information on Toyota’s principal research and development facilities.
FacilityJapan
Toyota Technical Center . . . . . . . . . . . . . . . .
Higashi-Fuji Technical Center . . . . . . . . . . .
Tokyo Design Research & Laboratory . . . . .
Woven Core, Inc. . . . . . . . . . . . . . . . . . . . . .
Woven Alpha, Inc. . . . . . . . . . . . . . . . . . . . .
Otemachi Office . . . . . . . . . . . . . . . . . . . . . .

Shibetsu Proving Ground . . . . . . . . . . . . . . .
Toyota Central R&D Labs., Inc. . . . . . . . . . .
United States
Toyota Motor Engineering andManufacturing North America, Inc. . . . . .
Calty Design Research, Inc. . . . . . . . . . . . . .
Toyota Research Institute of North America(TRI-NA) . . . . . . . . . . . . . . . . . . . . . . . . .
Toyota Research Institute, Inc. . . . . . . . . . . .
Woven Planet North America, Inc. . . . . . . . .

Principal Activity

Product planning, style, design, prototype production andvehicle evaluation
Advanced development
Advanced styling designs
Development of artificial intelligence technology with afocus on automated driving technology
Development of Woven City and software platform
technologies
Development of key IT technologies, creation of new values
by utilizing big data and collaboration with venturecompanies
Evaluation
Basic research

Product planning, design and evaluation of vehicles
manufactured in North America
DesignAdvanced research relating to “energy and environment,”“safety” and “mobility infrastructure”
Research and development of artificial intelligence
technology
Development of automated driving technology and software
platform technology

75Facility

EuropeToyota Motor Europe NV/SA . . . . . . . . . . . .
Toyota Europe Design Development
S.A.R.L. . . . . . . . . . . . . . . . . . . . . . . . . . .
Toyota Motorsport GmbH . . . . . . . . . . . . . .
Woven Planet United Kingdom, Ltd. . . . . . .
Asia PacificToyota Daihatsu Engineering andManufacturing Co., Ltd. . . . . . . . . . . . . . .
China
Toyota Motor Engineering andManufacturing (China) Co., Ltd. . . . . . . .
FAW Toyota Research & Development Co.,Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
GAC Toyota Motor Co., Ltd. R&D
Center . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BYD Toyota EV Technology Co., Ltd. . . . .
Toyota Motor Technical Research andService (Shanghai) Co., Ltd. . . . . . . . . . . .

Principal Activity

Planning and evaluation of vehicles manufactured in Europe
DesignDevelopment of motor sports vehicles
Development of automated driving technology and software
platform technology

Planning and evaluation of vehicles manufactured inAustralia and Asia

Environmental technology design and evaluation in China
Design, evaluation and certification of vehicles
manufactured in China
Design, evaluation and certification of vehicles
manufactured in China
Design and evaluation of BEVs
Research of new technology, construction and system of
automobiles

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 build a strong global patent portfolio.
For a further discussion of Toyota’s intellectual property, see “Information on the Company — Business
Overview — Intellectual Property.”
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 CRITICAL ACCOUNTING ESTIMATES
Not applicable.
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
6.A DIRECTORS AND SENIOR MANAGEMENT
In order to advance its transition to a mobility company, Toyota has reflected on the path it has taken thus
far and has formulated the “Toyota Philosophy” as a roadmap for the future. Toyota’s mission is “Producing
Happiness for All” by expanding the possibilities of people, companies and communities through addressing the76challenges of mobility as a mobility company. In order to do so, Toyota will continue to create new and uniquevalue with various partners by relentlessly committing towards monozukuri (manufacturing), and by fostering
imagination for people and society.
Toyota strives to provide a full lineup of products with “good quality yet affordable prices” globally at theright place at the right time, and offer products and services that are sympathetic towards customers in eachcountry and region, through the initiative of “making even better cars” that we have been engaged in since the2008 financial crisis. In order to meet these objectives, following the introduction of “region-based operations,”
the “business unit system” and the “in-house company system” in 2011, 2013 and 2016, respectively, in April
2017 Toyota further clarified that, for the purpose of further accelerating decision-making and operational
execution, members of the board of directors are responsible for decision-making and management oversight andthat operating officers are responsible for operational execution. Furthermore, in 2018, Toyota changed thecommencement of operating officers’ terms of office from April to January, reduced corporate strategy functions
and restructured the Japan Sales Business Group based on regions rather than sales channels in an effort to enabledecision-making closer to customers and the field, in order to further accelerate execution in full coordination
with each site. In 2019, in order to further advance Toyota’s “acceleration of management” and the developmentof a diverse and talented workforce, the executive structure was changed to be composed only of senior
managing officers and people of higher rank, and a new classification called “senior professional/senior
management” (kanbushoku) grouped and replaced the following titles or ranks: managing officers, executive
general managers, (sub-executive managerial level) senior grade 1 and senior grade 2 managers, and grandmasters. From the perspective of appointing the right people to the right positions, senior professionals/senior
management were positioned in a wide range of posts, from those of chief officer, deputy chief officer, plant
general manager, and senior general manager to group manager, to deal with management issues as they arise
and to strengthen their development as part of a diverse and talented workforce through on-site learning andproblem-solving (genchi genbutsu). In April 2020, Toyota consolidated the posts of executive vice president andoperating officer into the post of operating officer. In July 2020, Toyota further clarified the roles of operating
officers. Members of management who, together with the president, have cross-functional oversight of the entire
company, were redefined as “operating officers.” In-house company presidents, regional CEOs, and chief
officers, as on-site leaders of business implementation elements, were given authority while being consolidated
into the classification of “senior professional/senior management.” The roles of operating officers and seniorprofessionals/senior management are to be determined where and as needed, and persons appointed as operating
officers and senior professionals/senior management will change in accordance with the challenges faced and thepath that should be taken, as the company exercises greater flexibility in making appointments. However,
because of the rapidly changing business environment, Toyota now recognizes that there is an increasing need forsuch executives to fulfill management roles (related to people, goods, and money) together with President
Toyoda. Therefore, in April 2022, Toyota reorganized the roles of operating officers and reestablished theposition of “executive vice president,” defining it as an operating officer who is focused on the business from amanagement perspective. Based on its basic policy of appointing the right people to the right positions, Toyota
has been swiftly and continuously innovating. Toyota will further press forward the tide of such innovations,aiming for a corporate structure capable of carrying out management from a viewpoint that is optimal for a global
company.
In order to convey top management’s aspirations and the company’s direction to all stakeholders, Toyota
communicates what Toyota is really like through “Toyota Times.”
Toyota believes that it is critical to appoint individuals who are capable of contributing to decision-making
aimed at sustainable growth into the future in keeping with the spirit of the Toyoda Precepts, which set forth its
founding philosophy. Moreover, these individuals should be able to play a significant role in transforming
Toyota into a “mobility company” through responding to social transformation by using CASE external
partnerships based on trust and friendship and internal two-way interactive teamwork, while working infurtherance of the SDGs, and towards solutions for other social challenges. Toyota maintains its board of
directors and senior management at an adequate size, and ensures they are overall balanced and diverse,
77including from the perspective of gender and nationality. Three outside members of the board of directors havebeen 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. In order to be prepared in the event Toyota lacks the number of audit & supervisoryboard members required by law, one substitute audit & supervisory board member has been appointed pursuant
to Article 329, Paragraph 3 of the Companies Act.
Set forth below are brief summaries of Toyota’s members of the board of directors and audit & supervisoryboard members.
Name(Date of Birth)

Position

Brief Career Summary and Important Concurrent Duties

Takeshi Uchiyamada Chairman of the1969 Joined Toyota Motor Corporation (“TMC”)(August 17, 1946)
Board of Directors 1998 Member of the Board of Directors 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 (to present)

Number ofCommon Shares

450,195
shares(important concurrent duties)
Director of JTEKT Corporation
Director of Mitsui & Co., Ltd.
Shigeru Hayakawa
Vice Chairman of the 1977 Joined Toyota Motor Sales Co., Ltd.
(September 15, 1953)
Board of Directors 2007 Managing Officer of TMC
2007 Toyota Motor North America, Inc. President
2009 Retired from Toyota Motor North America,
Inc. President
2012 Senior Managing Officer of TMC
2015 Member of the Board of Directors andSenior Managing Officer of TMC
2017 Vice Chairman of TMC (to present)

242,040
shares(important concurrent duties)
Representative Director of Institute forInternational Economic Studies
Akio Toyoda(May 3, 1956)

President,
1984 Joined TMC
Member of the Board 2000 Member of the Board of Directors of TMC
of Directors
2002 Managing Director of TMC
2003 Senior Managing Director of TMC
2005 Executive Vice President of TMC
2009 President of TMC (to present)(important concurrent duties)
Chairman and CEO of Toyota Motor North
America, Inc.
Chairman of TOYOTA FUDOSAN CO., LTD.
Chairman of the Japan Automobile Manufacturers
Association, Inc.
Director of DENSO Corporation
Representative Director of ROOKIE Racing, Inc.

78

24,077,945
sharesName(Date of Birth)

James Kuffner(January 18, 1971)

Position

Brief Career Summary and Important Concurrent Duties

Member of the Board 1999 Postdoctoral Research Fellow at the Japanof Directors,
Society for the Promotion of Science
Operating Officer 2002 Research Scientist of the Robotics Instituteat Carnegie Mellon University
2005 Assistant Professor of the Robotics Instituteat Carnegie Mellon University
2008 Associate Professor of the Robotics Instituteat Carnegie Mellon University
2009 Research Scientist at Google Inc.
2013 Engineering Director of Google Inc.
2016 Chief Technology Officer of Toyota
Research Institute, Inc.
2018 Chief Executive Officer of Toyota ResearchInstitute - Advanced Development, Inc.
2018 Executive Advisor at Toyota ResearchInstitute, Inc.
2020 Senior Fellow at TMC
2020 Member of the Board of Directors,
Operating Officer of TMC (to present)
2021 Toyota Research Institute - Advanced
Development, Inc. changed its corporate nameto Woven Core, Inc. and was reorganized into
the Woven Planet Group.
2021 Chief Executive Officer and Representative
Director of Woven Planet Holdings, Inc. (topresent)

Number ofCommon Shares

2,970
shares(important concurrent duties)
Chief Executive Officer and Representative
Director of Woven Planet Holdings, Inc.
Representative Director of Woven Core, Inc.
President and Representative Director of Woven
Alpha, Inc.
Director of Joby Aviation, Inc.
Kenta Kon
(August 2, 1968)

Member of the Boardof Directors,
Operating Officer,
Executive Vice
President

1991 Joined TMC
2018 Managing Officer of TMC
2019 Operating Officer of TMC
2021 Member of the Board of Directors,
Operating Officer of TMC
2022 Member of the Board of Directors,
Operating Officer, Executive Vice President of
TMC (to present)

79

34,944
sharesName(Date of Birth)

Masahiko Maeda(February 10, 1969)

Position

Brief Career Summary and Important Concurrent Duties

Member of the Boardof Directors,
Operating Officer,
Executive Vice
President

1994 Joined TMC
2018 Managing Officer of TMC
2019 Operating Officer of TMC
2019 Chairman and President of Toyota Daihatsu
Engineering & Manufacturing Co., Ltd.
2022 Operating Officer, Executive Vice Presidentof TMC
2022 Member of the Board of Directors,
Operating Officer, Executive Vice President of
TMC (to present)

Number ofCommon Shares

21,984
shares(important concurrent duties)
Representative Director of Woven Planet
Holdings, Inc.
Director of Toyota Industries Corporation
Ikuro Sugawara(March 6, 1957)

Outside Member ofthe Board of
Directors

1981 Joined Ministry of International Trade andIndustry2010 Director-General of the Industrial Scienceand Technology Policy and Environment
Bureau, Ministry of Economy, Trade andIndustry
2012 Director-General of the Manufacturing
Industries Bureau, Ministry of Economy, Tradeand Industry
2013 Director-General of the Economic andIndustrial Policy Bureau, Ministry of Economy,
Trade and Industry
2015 Vice-Minister of Ministry of Economy,
Trade and Industry
2017 Retired from the Ministry of Economy,
Trade and Industry
2017 Special Advisor to the Cabinet 2018 Retired
from Special Advisor to the Cabinet2018 Outside Member of the Board of Directorsof TMC (to present)—(important concurrent duties)
Independent Director of Hitachi, Ltd.
Sir Philip Craven(July 4, 1950)

Outside Member ofthe Board of
Directors

1989 President of the International Wheelchair
Basketball Federation
2001 President of the International Paralympic
Committee
2002 Retired as President of the International
Wheelchair Basketball Federation2017 Retired as President of the International
Paralympic Committee
2018 Outside Member of the Board of Directorsof TMC (to present)

80

—

Name
(Date of Birth)

Teiko Kudo
(May 22, 1964)

Position

Brief Career Summary and Important Concurrent Duties

Outside Member ofthe Board of
Directors

1987 Joined the Sumitomo Bank, Limited
2014 Executive Officer of Sumitomo Mitsui
Banking Corporation2017 Managing Executive Officer of Sumitomo
Mitsui Banking Corporation2018 Outside Member of the Board of Directorsof TMC (to present)
2020 Senior Managing Executive Officer of
Sumitomo Mitsui Banking Corporation
2020 Senior Managing Executive Officer of
Sumitomo Mitsui Financial Group, Inc.
2021 Director and Senior Managing Executive
Officer of Sumitomo Mitsui Banking
Corporation (to present)
2021 Senior Managing Corporate Executive
Officer of Sumitomo Mitsui Financial Group,Inc.
2021 Director Senior Managing Executive Officer
of Sumitomo Mitsui Financial Group, Inc. (topresent)

Number ofCommon Shares

9,467
shares(important concurrent duties)
Director Senior Managing Executive Officer of
Sumitomo Mitsui Financial Group, Inc.
Director and Senior Managing Executive Officer
of Sumitomo Mitsui Banking Corporation
Haruhiko Kato
(July 21, 1952)

Full-time Audit &1975 Joined Ministry of FinanceSupervisory Board 2007 Director-General of the Tax Bureau,
Member
Ministry of Finance2009 Commissioner of National Tax Agency
2010 Retired from Commissioner of National Tax
Agency2011 Senior Managing Director of Japan
Securities Depository Center, Inc.
2011 President of Japan Securities Depository
Center, Inc.
2013 Member of the Board of Directors of TMC(to present)2015 President and CEO of Japan Securities
Depository Center, Inc.
2018 Retired as Member of the Board of Directorsof TMC2019 Retired as President and CEO of Japan
Securities Depository Center, Inc.
2019 Audit & Supervisory Board Member of
TMC (to present)
2019 Retired as Director of Japan Securities
Depository Center, Inc.

81

8,808
sharesName(Date of Birth)

Position

Brief Career Summary and Important Concurrent Duties

Number ofCommon Shares

Masahide Yasuda(April 1, 1949)

Full-time Audit &1972 Joined TMC
Supervisory Board 2000 General Manager of Overseas Parts Division
Memberof TMC2007 President of Toyota Motor Corporation
Australia Ltd.
2014 Chairman of Toyota Motor Corporation
Australia Ltd.
2017 Retired as Chairman of Toyota Motor
Corporation Australia Ltd.
2018 Audit & Supervisory Board Member of
TMC (to present)

47,703
shares

Katsuyuki Ogura(January 25, 1963)

1985 Joined TMC
Full-time Audit &Supervisory Board 2015 General Manager of Affiliated Companies
MemberFinance Dept. of TMC
2018 General Manager of Audit & Supervisory
Board Office of TMC
2019 Audit & Supervisory Board Member of
TMC (to present)

27,146
shares(important concurrent duties)
Outside Audit & Supervisory Board Member ofAichi Steel Corporation
Yoko Wake
Outside Audit &1970 Joined the Fuji Bank, Limited(November 18, 1947)
Supervisory Board 1973 Retired from the same
Member1977 Assistant Lecturer of Faculty of Business
and Commerce of Keio University
1982 Associate Professor of the same
1993 Professor of the same2011 Outside Audit & Supervisory Board Memberof TMC (to present)2013 Professor Emeritus of Keio University (topresent)—(important concurrent duties)
Professor Emeritus of Keio University
Hiroshi Ozu(July 21, 1949)

Outside Audit &2012 Prosecutor-General
Supervisory Board 2014 Retired from Prosecutor-General
Member2014 Registered as Attorney2015 Outside Audit & Supervisory Board Memberof TMC (to present)(important concurrent duties)
Attorney
Outside Corporate Auditor of Mitsui & Co., Ltd.
Audit & Supervisory Board Member (External) of
Shiseido Company, Limited

82

1,615
sharesName(Date of Birth)

George Olcott(May 7, 1955)

Position

Brief Career Summary and Important Concurrent Duties

Number ofCommon Shares

Outside Audit &1986 Joined S.G.Warburg & Co.,Ltd
Supervisory Board 1999 President of UBS Asset Management
Member(Japan)1999 President, Japan UBS Brinson
2000 Managing Director, Equity Capital Markets,
UBS Warburg Tokyo
2001 Judge Business School, University ofCambridge
2005 FME Teaching Fellow, Judge Business
School, University of Cambridge
2008 Senior Fellow, Judge Business School,
University of Cambridge—(important concurrent duties)
Outside Director of Kirin Holdings Company,
Limited
1.

Mr. Akio Toyoda, who is President and Member of the Board of Directors, concurrently serves as
Operating Officer (President).

2.

Dr. James Kuffner, who is a Member of the Board of Directors, concurrently serves as Operating
Officer.

3.

Mr. Kenta Kon and Mr. Masahiko Maeda, who are Members of the Board of Directors, concurrently
serve as Operating Officer (Executive Vice President).

None of the persons listed above was selected as a member of board of directors, audit & supervisory board
member or member of senior management pursuant to an arrangement or understanding with Toyota’s major
shareholders, customers, suppliers or others.
Set forth below is a brief summary of Toyota’s substitute audit & supervisory board member.
Name(Date of Birth)

Ryuji Sakai(August 7, 1957)

Position

Brief Career Summary and Important Concurrent Duties

Substitute Audit &1985 Registered as attorney and joinedSupervisory Board
Nagashima & Ohno
Member1990 Wilson Sonsini Goodrich & Rosati
1995 Partner of Nagashima & Ohno
2000 Partner of Nagashima Ohno & Tsunematsu(to present)

Number ofCommon Shares—(important concurrent duties)
Attorney
Outside Audit & Supervisory Board Member of
Kobayashi Pharmaceutical Co., Ltd.
6.B COMPENSATION
Decision Making Policy and Process
Toyota believes that it is critical to appoint individuals who are capable of contributing to decision-making
aimed at sustainable growth into the future in keeping with the spirit of the Toyoda Precepts, which set forth its
founding philosophy. Moreover, these individuals should be able to play a significant role in transforming83

Toyota into a “mobility company” and contribute to the solutions of social issues, including by contributing to
the realization of the SDGs, through responding to social transformation by using CASE external partnerships
based on trust and friendship and internal two-way interactive teamwork. Toyota’s director compensation system
is an important means through which to promote various initiatives and is determined based on the following
policy.
•It should be a system that encourages members of the board of directors to work to improve themedium- to long-term corporate value of Toyota.

•

It should be a system that can maintain compensation levels that will allow Toyota to secure and retain
talented personnel.

•

It should be a system that motivates members of the board of directors to promote management fromthe same viewpoint as our shareholders with a stronger sense of responsibility as corporate managers.

The board of directors decides by resolution the policy for determining remuneration for and other payments
to each member of the board of directors. Remuneration is effectively linked to corporate performance whilereflecting individual job responsibilities and performance. Remuneration standards in each member’s homecountry are also taken into account when determining remuneration levels and payment methods. Remunerationfor outside members of the board of directors and audit & supervisory board members consists only of fixed
payments. As a result, this remuneration is not readily impacted by business performance, helping to ensure
independence from management.
Based on the resolution of the 115th Ordinary General Shareholders’ Meeting held on June 13, 2019
concerning remuneration for the members of the board of directors of Toyota, the maximum cash compensation
was set at 3.0 billion yen per year (of which, the maximum amount payable to outside members of the board of
directors is 0.3 billion yen per year), and the maximum share compensation was set at 4.0 billion yen per year.
The number of members of the board of directors as of the conclusion of the 115th Ordinary General
Shareholders’ Meeting was nine (including three outside members of the board of directors).
The amount of remuneration for audit & supervisory board members of Toyota was set at 30 million yen orless per month at the 104th Ordinary General Shareholders’ Meeting held on June 24, 2008. The number ofaudit & supervisory board members as of the conclusion of the 104th Ordinary General Shareholders’ Meeting
was seven.
The amount of remuneration for each member of the board of directors of Toyota and the remuneration
system are decided by the board of directors and the “Executive Compensation Meeting,” a majority of themembers of which are outside members of the board of directors, to ensure the independence of the decision. The
Executive Compensation Meeting consists of chairman of the board of directors Takeshi Uchiyamada(Chairman), member of the board of directors Kenta Kon (who replaced Koji Kobayashi on June 15, 2022), andoutside members of the board of directors Ikuro Sugawara, Sir Philip Craven and Teiko Kudo.
The board of directors resolves the policy for determining remuneration for and other payments to eachmember of the board of directors and the executive remuneration system as well as the total amount of
remuneration for a given fiscal year. The board of directors also resolves to delegate the determination of theamount of remuneration for each member of the board of directors to the Executive Compensation Meeting.
The Executive Compensation Meeting reviews the remuneration system for members of board of directors
and senior management on which it will consult with the board of directors and determines the amount of
remuneration for each member of the board of directors, taking into account factors such as corporate
performance as well as individual job responsibilities and performance, in accordance with the policy for
determining remuneration for and other payments to each member of the board of directors established by theboard of directors. The board of directors considers that such decisions made by the Executive Compensation
Meeting are in line with the policy on determining remuneration and other payments for each member of theboard of directors.
84Remuneration for audit & supervisory board members is determined by the audit & supervisory board
within the scope determined by resolution of the shareholders’ meeting.
Executive Compensation Meetings were held in May 2021 and March and April 2022 to discuss anddetermine the amount of remuneration for fiscal 2021 and other relevant matters.
Furthermore, preliminary examination meetings, consisting only of outside members of the board of
directors, were held on a total of five occasions in July, September and October 2021 and February and March2022 to discuss matters for the Executive Compensation Meetings. Remuneration for the members of the boardof directors were determined with the unanimous consent of the Executive Compensation Meeting.
The principal topics discussed at Executive Compensation Meetings included:•

Remuneration level for each position and job responsibility•

Evaluation of benchmarks and actual results of fiscal 2021•

Evaluation of individual performance•

Determination of the amount of remuneration for each member of the board of directors

Method of Determining Performance-based Remuneration (Bonus and Share Compensation)
Directors with Japanese Citizenship (Excluding Outside Members of the Board of Directors)
Toyota sets the total amount of remuneration (“Annual Total Remuneration”) received by each member ofthe board of directors in a year based on consolidated operating income, the fluctuation of the market
capitalization of Toyota (calculated by multiplying the closing price of Toyota’s common stock on the Tokyo
Stock Exchange and the total number of issued shares of Toyota common stock (less shares of treasury stock))and individual performance evaluation. The balance after deducting fixed remuneration, or monthly
remuneration, from Annual Total Remuneration constitutes performance-based remuneration.
Toyota determines the annual total remuneration level appropriate for each position and job responsibility
by referring to the benchmarking result of remuneration for officers of companies located in Japan.
Concept of Each Item
Consolidated operating
incomeIndicator for evaluating Toyota’s efforts based on businessperformance

Fluctuation of the market
capitalization

Corporate value indicator for shareholders and investors to evaluate
Toyota’s efforts

Individual performance
evaluation

Qualitative evaluation of performance of each member of the boardof directors

85

Method and Reference Value for Evaluating Indicators and Evaluation Result for Fiscal 2022

Consolidated
operating income

Fluctuation of
Toyota’s market
capitalization

Evaluation
WeightEvaluation Method

70%

Evaluate the degree of attainmentof consolidated operating income
in fiscal 2021, using required
income (set in 2011) for Toyota’s
sustainable growth as reference
value

30%

Comparatively evaluate thefluctuation of Toyota’s market
capitalization up to fiscal 2022
(average of January-March),using the market capitalization of
Toyota and the TOPIX of fiscal
2021 (average of January-March)as reference values

Reference Value

Evaluation
Result for
Fiscal 2022

¥1 trillion

210%
Toyota:¥22.3 trillion
TOPIX:¥1,903.60

Method of Setting Annual Total Remuneration
Annual Total Remuneration is set using a theoretical formula that takes into account the benchmarking
results of remuneration for members of the board of directors. Annual Total Remuneration is set based on
consolidated operating income and the fluctuation of the market capitalization of Toyota, and then adjusted basedon individual performance evaluation. Starting fiscal 2022, Toyota introduced the individual performance
evaluation for the chairman, vice chairman and president. Individual performance evaluation takes into accountvarious factors such as initiatives in keeping with the spirit of the Toyoda Precepts which set forth Toyota’s
founding philosophy, trust from his or her peers and contribution to the promotion of human resources
development. The Individual performance evaluation is set within the range of 50% above or below Annual Total
Remuneration in accordance with the position and job responsibilities, and the amount of the annual total
remuneration for each member of the board of directors is calculated based on such evaluation results.
Directors with Foreign Citizenship (Excluding Outside Members of the Board of Directors)
Fixed remuneration and performance-based remuneration are set based on the remuneration levels andstructures that allow Toyota to secure and retain talented personnel. Fixed remuneration is set, taking into
account each member’s job responsibilities and the remuneration standards of such member’s home country.
Performance-based remuneration is set based on consolidated operating income, the fluctuation of the market
capitalization of Toyota and individual performance, taking into account each member’s job responsibilities andthe remuneration standards of such member’s home country. The concept of each item is the same as that for
directors with Japanese citizenship (excluding outside members of the board of directors). There are cases where
Toyota provides income tax compensation for certain members of the board of directors in light of the difference
in income tax rates with those of his or her home country.
Compensation[The aggregate amount of remuneration, including bonuses, accrued for all members of the board of
directors and audit & supervisory board members as a group by Toyota for services in all capacities was¥2,705 million during fiscal 2022.

86Toyota Motor Corporation and its subsidiaries have not set aside or accrued any amounts to provide
pension, retirement or similar benefits to members of the board of directors and audit & supervisory board
members of Toyota Motor Corporation.
Toyota’s Annual Securities Report filed with the Kanto Local Bureau of Finance on June 23, 2022,
contained the following information concerning compensation in fiscal 2022 on a consolidated basis for membersof the board of directors and audit & supervisory board members whose total compensation exceeded¥100 million during such period:

Name, Position

Compensation per Type (million yen)
Fixed
Performance-based
Total
Compensation
Compensation
Compensation
Monthly
Share
Retirement (millions ofClassification of Company Compensation Bonus Compensation
Benefitsyen)

Takeshi Uchiyamada, Memberof the Board of Directors . . . . Toyota Motor Corporation

118

79

76
(37,000 shares)—

273

Shigeru Hayakawa, Member ofthe Board of Directors . . . . . . Toyota Motor Corporation

74

1

81
(39,000 shares)—

156

Akio Toyoda, Member of theBoard of Directors . . . . . . . . . Toyota Motor Corporation

204

0

481
(230,000 shares)—

685

Koji Kobayashi, Member of theBoard of Directors . . . . . . . . . Toyota Motor Corporation

78

0

100
(48,000 shares)

—

178

152
642

100
13

—
—

906

James Kuffner, Member of theBoard of Directors . . . . . . . . . Toyota Motor Corporation
Consolidated subsidiary(Woven Planet Holdings,
Inc.*)——* Fixed compensation that Woven Planet Holdings, Inc., Toyota’s consolidated subsidiary, pays to James
Kuffner includes fixed compensation that is paid trimonthly and annually.
The amounts above were recorded as expenses in fiscal 2022.
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 members of the board of directors
and audit & supervisory board members at the general shareholders’ meeting. The normal term of office of amember of the board of directors is one year and that of an audit & supervisory board member is four years.
Members of the board of directors and audit & supervisory board members may serve any number of consecutive
terms.
The board of directors may appoint one Chairman of the Board of Directors 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 in the conduct of its affairs. The board of directors has the ultimate responsibility for the administrationof Toyota’s affairs. None of Toyota’s members of the board of directors is party to a service contract with Toyota
or any of its subsidiaries that provides for benefits upon termination of employment.
Under the provisions of the Companies Act, if Toyota decides the terms of an agreement promising that
Toyota will compensate a member of the board of directors for all or part of certain expenses incurred by themember of the board of directors, such a decision must be made by a resolution of the board of directors. Under87the provisions of the Companies Act, if Toyota decides the terms of an insurance agreement to be executed withan insurer, under which a member of the board of directors is the insured, and which promises that the insurer
will compensate for damage arising from the member of the board of directors being held liable in relation to the
execution of his or her duties or from a liability claim filed against the member of the board of directors, suchdecision must be made by a resolution of the board of directors.
Under the Companies Act and Toyota’s articles of incorporation, Toyota may, by a resolution of its board of
directors, exempt members of the board of directors (including former members of the board of directors) fromtheir 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 eachmember of the board of directors (excluding executive members of the board of directors, among others) 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 an “outside” audit & supervisory board member,which is any person who satisfies all of the following requirements:(a) the person has never been a member of the board of directors, accounting counselor (in the case that an
accounting counselor is a legal entity, an employee of such entity who is in charge of its affairs), executive
officer, manager or employee of Toyota or its subsidiaries during the ten year period before becoming an outside
audit & supervisory board member;(b) if the person was an audit & supervisory board member of Toyota or any of its subsidiaries at any time
during the ten year period before becoming an outside audit & supervisory board member, such person has notbeen a member of the board of directors, accounting counselor (in the case that an accounting counselor is a legal
entity, an employee of such entity who is in charge of its affairs), executive officer, manager or employee ofToyota or any of its subsidiaries during the ten year period before becoming an audit & supervisory board
member of Toyota or any of its subsidiaries; and(c) the person is not a spouse or relative within the second degree of kinship of any member of the board of
directors or manager or other key employee of Toyota.
The audit & supervisory board members may not at the same time be a member of the board of directors, anaccounting counselor (in case that an accounting counselor is a judicial person, a member of such judicial person
who is in charge of its affairs), executive officers, general managers or employees of Toyota or any of its
subsidiaries. Together, these audit & supervisory board members form the audit & supervisory board. The
audit & supervisory board 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 members of the board of directors. Audit &supervisory board members are not required to be, and Toyota’s audit & supervisory board members are not,certified public accountants. They are required to participate in meetings of the board of directors but are notentitled 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 each
audit & supervisory board member which limits the maximum amount of their liabilities owed to Toyota arisingin connection with their failure to execute their duties to an amount equal to the minimum liability limit amountprescribed in the laws and regulations.
88Toyota does not have a remuneration committee. However, members of Toyota’s Executive Compensation
Meeting discuss remuneration for members of the board of directors.
The Executive Compensation Meeting reviews the remuneration system for members of the board of
directors and senior management and determines the amount of remuneration for each member of the board of
directors, taking into account factors such as corporate performance as well as individual job responsibilities andperformance. The members of the meeting are Takeshi Uchiyamada, the Chairman of the Board of Directors, andKenta Kon, Ikuro Sugawara, Sir Philip Craven and Teiko Kudo, each, a Member of the Board of Directors.
6.D EMPLOYEESThe total number of Toyota employees, on a consolidated basis, was 372,817 as of March 31, 2022, 366,283
as of March 31, 2021 and 361,907 as of March 31, 2020. The following tables set forth a breakdown of persons
employed by business segment and by geographic location as of March 31, 2022.
Segment

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

Number of
Employees

Location

330,184 Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13,140 North America . . . . . . . . . . . . . . . . . . . . . .
24,258 Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,235 Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . .
372,817 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Number of
Employees

203,948
55,471
24,852
66,32822,218372,817* “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 compose 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
increase for all union members, excluding bonuses, in Japan was approximately 2.62% in fiscal 2022.
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 87,120 during fiscal 2022.
6.E SHARE OWNERSHIP
For information on the number of shares of Toyota’s common stock held by each member of the board of
directors and audit & supervisory board member as of June 2022, see “— Directors and Senior Management.”
None of Toyota’s shares of common stock entitles the holder to any preferential voting rights. As of
March 31, 2022, Toyota does not have any stock option plan for which stock options or stock acquisition rights
are exercisable or will become exercisable in the future.
89

Toyota’s board of directors resolves the share compensation within the maximum share compensation
amount of 4.0 billion yen per year (also, the total number of Toyota’s shares of common stock to be allotted shallnot exceed a maximum of 4 million shares per year in total for eligible members of the board of directors(excluding outside members of the board of directors)) established at the 115th Ordinary General Shareholders’Meeting held on June 13, 2019 and the 118th Ordinary General Shareholders’ Meeting held on June 15, 2022.
The overview of the share compensation is as follows.
Eligible persons

Members of the board of directors of Toyota (excluding outside members of
the board of directors)

Total amount of the sharecompensation

Maximum of 4.0 billion yen per year

Amount of the sharecompensation
payable to each member of theboard of directors

Set each year considering factors such as corporate results, duties, andperformance

Type of shares to be allotted
and method of allotment

Issue or disposal of common stock (with transfer restrictions under anallotment agreement)

Total number of shares to be
allotted

Maximum of 4,000,000 shares per year in total to eligible members of theboard of directors(Provided, however, that if a stock split, including a gratis allotment, or areverse stock split of Toyota’s common stock is carried out after June 15,2022, or in case of events that otherwise require an adjustment to the total
number of Toyota’s shares of common stock to be issued or disposed of as
restricted share compensation, such total number of shares will be adjusted
to a reasonable extent.)

Amount to be paid

Determined by the board of directors of Toyota based on the closing priceof Toyota’s common stock on the Tokyo Stock Exchange on the business
day prior to each resolution of the board of directors, within a range that is
not particularly advantageous to eligible members of the board of directors

Transfer restriction period

A period of three to fifty years from the allotment date, which is determinedby the board of directors of Toyota in advance

Conditions for removal oftransfer restrictions

Restrictions will be removed upon the expiration of the transfer restriction
period.
However, restrictions will also be removed in the case of expiration of theterm of office, death, or other legitimate reasons.

Gratis acquisition by Toyota

Toyota will be able to acquire all allotted shares without consideration in
the case of violations of laws and regulations or other reasons specified by
the board of directors of Toyota during the transfer restriction period.

Members of the board of directors of Toyota with foreign citizenship are not eligible for the sharecompensation.
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, 2022, the employee stock ownership association held 74,096,504 shares of Toyota’scommon stock.
90

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
7.A MAJOR SHAREHOLDERS
As of March 31, 2022, 16,314,987,460 shares of Toyota’s common stock (of which 2,536,685,916 shareswere treasury stock and 13,778,301,544 shares were outstanding) were issued. Toyota resolved at its board of
directors meeting held on December 14, 2020 to exercise Toyota’s cash call option to acquire all outstanding
Model AA Class Shares and, subject to such acquisition, to cancel all Model AA Class Shares pursuant to theCompanies Act. Toyota completed the acquisition of all outstanding Model AA Class Shares on April 2, 2021
and cancelled them on April 3, 2021. Information concerning beneficial ownership of Toyota’s common stock inthe table below was prepared from information known to Toyota or that could be ascertained from public filings,
including filings made by Toyota’s shareholders regarding their ownership of Toyota’s common stock under the
Financial Instruments and Exchange Law of Japan.
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 American Depositary Shares, or ADSs, representing such shares) must file areport concerning the shareholding 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 matterset forth in any previously filed reports occurs.
Based on information known to Toyota or that can be ascertained from public filings, the following tablesets forth the beneficial ownership of holders of 5% or more of Toyota’s common stock as of the most recent
practicable date.

Name of Beneficial Owner

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

Number of
Shares ofCommon Stock(in thousands)

Percentage of
Outstanding
Voting Shares ofCommon Stock

1,192,331

8.68

According to The Bank of New York Mellon, depositary for Toyota’s ADSs (the “Depositary”), as ofMarch 31, 2022, 295,944,975 shares of Toyota’s common stock were held in the form of ADSs and there were1,766 ADS holders of record and 431,983 beneficial owners in the United States. According to Toyota’s registerof shareholders, as of March 31, 2022, there were 813,254 holders of common stock of record worldwide. As of
March 31, 2022, there were 479 record holders of Toyota’s common stock with addresses in the United States,
whose shareholdings represented approximately 10.2% of the issued common stock on that date. Because someof 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.
Toyota cancelled all of the First Series Model AA Class Shares on April 3, 2021, and as such, there are no
holders of First Series Model AA Class Shares.
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.
Toyota resolved at its board of directors meeting held on May 12, 2021 to split each share of common stockof Toyota as of September 30, 2021, the record date, into five shares, effective October 1, 2021. Toyota decided91

to do so in order to create an environment in which Toyota shares are more accessible to a broader base ofinvestors by reducing the price per investment unit. In conjunction with the stock split, in accordance with
Article 184, Paragraph 2 of the Companies Act, Toyota amended its articles of incorporation to increase the total
number of shares of common stock which Toyota is authorized to issue from 10,000,000,000 to 50,000,000,000
on October 1, 2021, the effective date of the stock split.
7.B RELATED PARTY TRANSACTIONSBusiness Relationships
Toyota purchases materials, supplies and services, among others, from numerous suppliers throughout theworld in the ordinary course of business, including Toyota’s associates and joint ventures accounted for by theequity method and those firms with which certain members of Toyota’s board of directors are affiliated. Toyota
purchased materials, supplies and services, among others, from these associates and joint ventures in the amountof ¥7,947.0 billion in fiscal 2022. Toyota also sells its products and services, among others, to Toyota’s
associates and joint ventures 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, among others, to these associates
and joint ventures entities in the amount of ¥2,362.3 billion in fiscal 2022. See note 32 of Toyota’s consolidated
financial statements for additional information regarding Toyota’s investments in and transactions withassociates and joint ventures.
Loans
Toyota regularly has trade accounts and other receivables by, and accounts payable to, Toyota’s associates
and joint ventures accounted for by the equity method and firms with which certain members of Toyota’s boardof directors are affiliated. Toyota had outstanding trade accounts and other receivables by these associates andjoint ventures in the amount of ¥366.4 billion as of March 31, 2022. Toyota had outstanding trade accounts andother payables to these associates and joint ventures in the amount of ¥1,091.5 billion as of March 31, 2022.
Toyota, from time to time, provides short- to medium-term loans to its associates and joint ventures, as well
as loans under a loan program established by certain subsidiaries to assist their executives and members of theboard of directors with the purchase of homes. As of March 31, 2022, an aggregate amount of ¥185.5 billion inloans was outstanding to its associates and joint ventures accounted for by the equity method. Toyota believes
that each of 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 Information.
92

Toyota normally pays dividends twice per year, including an interim dividend and a year-end dividend.
Toyota’s articles of incorporation provide that retained earnings can be distributed as dividends pursuant to a
resolution of its board of directors. Toyota’s board of directors resolves to pay year-end dividends to holders ofcommon stock and registered pledgees of common stock of record as of March 31, the record date, in each year.
At the 111th Ordinary General Shareholders’ Meeting held in June 2015, Toyota’s shareholders approved
amendments to Toyota’s articles of incorporation permitting the issuance of Model AA Class Shares in the
future. Toyota resolved at its board of directors meeting held on December 14, 2020 to exercise Toyota’s cash
call option to acquire all outstanding First Series Model AA Class Shares and, subject to such acquisition, tocancel all First Series Model AA Class Shares pursuant to the Companies Act. Toyota completed the acquisitionof all outstanding First Series Model AA Class Shares on April 2, 2021 and cancelled them on April 3, 2021. At
the 117th Ordinary General Shareholders’ Meeting held in June 2021, Toyota’s shareholders approved
amendments to Toyota’s articles of incorporation to, among other things, eliminate the First Series Model AA
Class Shares through the Fifth Series Model AA Class Shares as classes of Toyota’s capital stock, effective
June 16, 2021. Prior to the June 16, 2021 amendment, the articles of incorporation provided that, in the event that
Toyota paid a year-end dividend to holders of common stock, it would pay a year-end dividend to any holders ofModel AA Class Shares or registered pledgees of Model AA Class Shares of record as of the record date for the
year-end dividend, in the amount payable on the Model AA Class Shares pursuant to their terms (“AADividends”), in preference to holders of common stock or registered pledgees of common stock.
In addition to these year-end dividends, Toyota may pay an interim dividend in the form of cash
distributions from its distributable surplus to holders of common stock and pledgees of common stock of record
as of September 30, the record date, in each year by a resolution of its board of directors. Prior to the June 16,
2021 amendment, the articles of incorporation provided that, in the event that Toyota paid such interim
dividends, Toyota would pay an amount equivalent to one-half of the AA Dividends as an interim dividend toany holders of Model AA Class Shares or registered pledgees of Model AA Class Shares of record as of therecord date for the interim dividend, in preference to holders of common stock or registered pledgees of common
stock.
In addition, under the Companies Act, dividends may be paid to holders of common stock and pledgees ofrecord of common stock as of any record date, other than those specified above, as set forth in Toyota’s articles
of incorporation or as determined by its board of directors from time to time. Under the Companies Act,
dividends may be distributed in cash or (except in the case of interim dividends mentioned in the third preceding
paragraph) in kind, subject to limitations on distributable surplus and to certain other conditions.
The following table sets forth the dividends declared per share of common stock by Toyota for each of theperiods shown. The periods shown are the six months ended on that date. The U.S. dollar equivalents for the cash
dividends shown are based on the noon buying rate for Japanese yen on the last date of each period set forth
below.
Cash Dividends
per Common ShareYen
U.S. dollars

Period Ended

September 30, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
September 30, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
September 30, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

100.0
0.92
120.0
1.11
105.0
0.99
135.0
1.22
120.0
1.07
28.0
1.15
<140.0>* <0.23>** The numbers in angle brackets are calculated based on a “pre-stock split” basis, that is, on the assumption thatthe five-for-one stock split that Toyota effected on October 1, 2021 had not taken place.
93

Toyota deems the benefit of its shareholders as one of its priority management policies, and it will continue
to work to improve its corporate culture to realize sustainable growth in order to enhance its corporate value.
Toyota will strive for the stable and continuous payment of dividends, seeking to maintain and improve upon the
consolidated payout ratio of 30% to its shareholders.
With a view to surviving tough competition and transitioning to a mobility company, Toyota will aim toutilize its internal funds mainly for investment in growth for the next generation, such as environmental
technologies to achieve a carbon-neutral society and safety technologies for the safety and security of its
customers, and also for the stakeholders such as employees, business partners and local communities.
Considering these factors, with respect to the dividends for fiscal 2022, Toyota has determined to pay a
year-end dividend of 28 yen (140 yen on a pre-stock split basis) per share of common stock by a resolution of theboard of directors pursuant to Toyota’s articles of incorporation. As a result, combined with the interim dividendof 24 yen (120 yen on a pre-stock split basis) per share of common stock, the annual dividend will be 52 yen(260 yen on a pre-stock split basis) per share of common stock, and the total amount of the dividends on common
stock for the year will be 718.2 billion yen.
Furthermore, Toyota resolved, at its board of directors meeting held on May 11, 2022, to repurchase up to
140 million shares of its common stock between June 17, 2022 and September 30, 2022 at a total maximum
purchase price of 200 billion yen.
Toyota intends to repurchase shares more flexibly than before with the aim of promoting capital efficiency
by comprehensively taking into consideration its investment in growth, level of its dividends, its cash reserves
and the price level of its common stock.
Specifically, of the total maximum purchase price of 200 billion yen, a maximum of 100 billion yen will be
used for share repurchases that are to be conducted more flexibly than before based on factors such as the pricelevel of its common stock.
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.
ITEM 9. THE OFFER AND LISTING
9.A LISTING DETAILS
Shares of Toyota common stock are traded on the Tokyo Stock Exchange and the Nagoya Stock Exchange
under the ticker symbol “7203” in Japan, and on the London Stock Exchange under the ticker symbol “TYT.”
Toyota’s ADSs, each representing ten shares of Toyota common stock, are listed on the New York Stock
Exchange, or NYSE, under the ticker symbol “TM.”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 on the London Stock Exchange.
94

Since September 29, 1999, American Depositary Shares, each equal to ten shares of Toyota’s common
stock, have been traded and listed on the New York Stock Exchange through a sponsored ADS facility operatedby The Bank of New York Mellon, as Depositary. Prior to that time, Toyota’s ADSs were listed on the Nasdaq
SmallCap Market through five unsponsored ADS facilities.
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
Toyota resolved at its board of directors meeting held on May 12, 2021 to split each share of common stockof Toyota as of September 30, 2021, the record date, into five shares, effective October 1, 2021. Toyota decided
to do so in order to create an environment in which Toyota shares are more accessible to a broader base ofinvestors by reducing the price per investment unit.
In conjunction with the stock split, in accordance with Article 184, Paragraph 2 of the Companies Act,
Toyota amended its articles of incorporation to increase the total number of shares of common stock which
Toyota is authorized to issue from 10,000,000,000 to 50,000,000,000 on October 1, 2021, the effective date of
the stock split.
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 and related legislation.
GeneralToyota’s authorized number of shares as of March 31, 2022 was 50,000,000,000 shares, of which
16,314,987,460 shares of common stock have been issued. In conjunction with the cancellation of all of theModel AA Class Shares on April 3, 2021, Toyota’s articles of incorporation were amended at the 117th Ordinary
General Shareholders’ Meeting held in June 2021.
Toyota does not issue share certificates for its shares. In accordance with the Companies Act, the BookEntry Transfer Act and Toyota’s articles of incorporation, Toyota’s common stock are recorded 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 accountmanagement institutions. The transfer of common stock will generally become effective once the transfer isrecorded in the transferee’s account. There are no restrictions imposed by Toyota’s articles of incorporation or
share handling regulations on the transfer of common stock. In order to assert shareholders’ rights against95

Toyota, a shareholder must generally have his or her name and address recorded or registered on Toyota’s
register of shareholders. A holder of common stock 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 the shareholder’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 holder of common stock must have a transfer account to transfer shares. Holders of common stock 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 the holders of Toyota’s common stock
who are recorded on the transfer account books of JASDEC or account management institutions. Upon receivingsuch information, Toyota will record or register such information received from JASDEC on its register ofshareholders. Accordingly, holders of common stock recorded or registered on Toyota’s register of shareholders
will be treated as holders of common stock of Toyota and may exercise rights, such as voting rights, and will
receive dividends (if any) and notices to holders of common stock directly from Toyota. Holders of common
stock 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 a transfer account.
In response to such request, JASDEC will provide the individual shareholders notice to Toyota. A holder ofcommon stock 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 deemed tohold additional shares according to the transfer account books are aggregated for these purposes.
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;96•

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 power generation and the supply and sale of electric power;•

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.
Toyota’s articles of incorporation provide that retained earnings can be distributed as dividends pursuant to a
resolution of its board of directors. Toyota’s board of directors resolves to pay year-end dividends toshareholders and registered pledgees of record as of March 31, the record date, in each year.
In addition to these year-end dividends, Toyota may pay an interim dividend in the form of cash
distributions from its distributable surplus to holders of stock and pledgees of stock of record as of September 30,
the record date, in each year by a resolution of its board of directors.
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. Under the Companies Act, dividends may be distributedin cash or (except in the case of interim dividends mentioned in the second 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 items provided for by the Companies Act andthe ordinance of the Ministry of Justice, and the amount of surplus distributable for dividends is calculated byadding to and subtracting from this amount the amounts of items provided for by the Companies Act and theordinance of the Ministry of Justice.
97

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
one-half 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.
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.
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.
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 and the Companies Act.
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.
98Holders of common stock shall have voting rights exercisable at a general shareholders’ meeting. A holderof shares constituting one or more whole units is entitled to one vote per unit of shares subject to the limitations
on voting rights set forth in this paragraph. In general, under the Companies Act, a resolution can be adopted at a
general shareholders’ meeting by a majority of the shares having voting rights represented at the meeting. The
Companies Act and Toyota’s articles of incorporation require a quorum for the election of members of the boardof 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 ofmembers of the board 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 not have voting rights.
Pursuant to the amendments to the Companies Act with effect on September 1, 2022 which applies to all
Japanese listed companies, including Toyota, and the amendments to its articles of incorporation approved at the118th General Shareholders’ Meeting held on June 15, 2022, Toyota will implement the electronic provision
measures (“Electronic Provision”) for the information contained in the reference materials, etc. for generalshareholders’ meetings to be held on or after March 1, 2023.
After the Electronic Provision goes into effect, the convocation notice of shareholders’ meeting must set
forth the information contained in the reference materials, etc. for general shareholders’ meetings being provided
through the Electronic Provision and the URL of the website used for the Electronic Provision, in addition to theplace, the time and the purpose of the meeting. The information contained in the reference materials, etc. forgeneral shareholders’ meetings must be posted on a website from the earlier of the date three weeks prior to thedate set for the meeting or the date on which the convocation notice of shareholders’ meeting is dispatched until
the date on which three months have elapsed from the meeting. In general, any shareholder is entitled to request
printed paper copies of the information contained in the reference materials, etc. for general shareholders’meetings by the record date for voting rights at the relevant general shareholders’ meeting.
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,
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 to exercise their voting rights through the use of the Internet, if such institutional investor applies to use theplatform in advance. Shareholders may also exercise their voting rights through proxies, provided that thoseproxies 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;99(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 transfer in entirety or in part of shares or equity interest of a subsidiary under certain
conditions;(12) the taking over of the entire business of any other corporation with certain exceptions in which ashareholders’ resolution is not required;(13) 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;(14) company split with certain exceptions in which a shareholders’ resolution is not required; or(15) share delivery 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
Shareholders 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 shares orstock 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.
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 or registered pledgees 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 all 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 (in the case of common stock, upon receiving notification from JASDEC).
100

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 on the Japanese stock exchanges on the business day
preceding a record date (or if the record date is not a business day, one 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 of shares is made by Toyota from a specific party other than a subsidiary of Toyota, any othershareholder 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 holder. 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 Justicewill not trigger the right of any shareholder to include him/her as the seller of his/her shares in such proposed
purchase.
Any 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 of
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.
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.
For this purpose, shares issuable to a shareholder upon exercise of stock acquisition rights are taken into accountin determining both the number of shares held by that stock acquisition rights holder and the company’s total
issued shares.
101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 following is a general summary of major Japanese foreign exchange control regulations applicable toholders of shares of capital stock or voting rights (including ADSs) of Toyota, and to others intending toconsummate other actions such as obtaining consent from other investors holding voting rights and consenting tocertain proposals at a general shareholders meeting, who are “exchange non-residents” or “foreign investors,” asdescribed below. The statements regarding Japanese foreign exchange control regulations set forth below are
based on the laws and regulations in force and as interpreted by the Japanese authorities as of the date of thisannual report and are subject to subsequent changes in the applicable Japanese laws or interpretations thereof.
This summary is not exhaustive of all possible foreign exchange control considerations that may apply to aparticular investor, and potential investors are advised to satisfy themselves as to the overall foreign exchange
control consequences of the acquisition, ownership and disposition of shares of capital stock or voting rights ofToyota by consulting their own advisors.
The Foreign Exchange and Foreign Trade Act of Japan (Act No. 228 of 1949, as amended, the “FEFTA”)
and the cabinet orders and ministerial ordinances thereunder (collectively, the “Foreign Exchange Regulations”)
govern the acquisition and holding of shares of capital stock and voting rights of Toyota by “exchange
non-residents” and by “foreign investors.” The Foreign Exchange Regulations currently in effect do 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:(i)

individuals who do not reside in Japan; and(ii) 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.
Foreign investors are:(i)

individuals who are exchange non-residents;(ii) corporations or other organizations that are organized under the laws of foreign countries or whose
principal offices are located outside of Japan;(iii) Japanese corporations of which 50% or more of their total voting rights are held directly or indirectly
by individuals who are exchange non-residents and/or corporations or other organizations fallingwithin (i) and/or (ii) above;(iv) partnerships under the Civil Code of Japan (Act No. 89 of 1896, as amended) established to invest in
corporations, limited partnerships for investment under the Limited Partnership Act for Investment ofJapan (Act No. 90 of 1998, as amended), or any other similar partnerships under foreign law, of which(a) 50% or more of the total contributions are made by individuals and/or corporations falling within(i), (ii), (iii) above and/or (v) below or any other persons prescribed under the Foreign Exchange
Regulations or (b) a majority of the general partners are individuals and/or corporations falling within(i), (ii), (iii) above and/or (v) below or any other persons prescribed under the Foreign Exchange
Regulations; and102

(v) corporations or other organizations, a majority of whose officers, or officers having the power ofrepresentation, are individuals who are exchange non-residents.
Acquisition of Shares
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 (other thanthose relating to an “inward direct investment” set out below). In certain limited circumstances, however, theMinister of Finance may require prior approval of an acquisition of this type. While prior approval, as describedabove, is not required in general, in the case where a resident of Japan transfers shares of a Japanese company(such as the shares of capital stock of Toyota) for consideration exceeding ¥100 million to an exchange
non-resident, the resident of Japan who transfers the shares is required to report the transfer to the Minister ofFinance within 20 days from the date of the transfer or the date of receipt of payment, whichever comes later,
unless (i) the transfer was made through a bank or financial instruments business operator licensed or registeredunder Japanese law or other entity prescribed by the Foreign Exchange Regulations acting as an agent orintermediary or (ii) the acquisition constitutes an “inward direct investment” described below.
Inward Direct Investment in Shares of Listed Companies
On May 8, 2020, an amendment to the Foreign Exchange Regulations came into effect. Upon the full
implementation of the Amendment as of June 7, 2020, the requirements and procedures regarding the priornotifications of inward direct investments to the Minister of Finance and any other competent Ministers under the
FEFTA, were amended. After the implementation of the Amendment, Japanese listed companies are classified
into the following categories:(i)companies engaged in businesses excluding certain businesses designated by the Foreign Exchange
Regulations as designated businesses (the “Designated Businesses”);(ii) companies engaged in Designated Businesses designated by the Foreign Exchange Regulations as core
sector businesses (the “Core Sector Designated Businesses”); and(iii) corporations engaged in Designated Businesses other than the Core Sector Designated Businesses (the“Non-Core Sector Designated Businesses”).
For reference purposes only, the Minister of Finance publishes, and may update from time to time, a list thatclassifies Japanese listed companies into the above categories. According to the list published by the Minister ofFinance as of July 10, 2020, the businesses which are currently engaged in by Toyota are classified as category(ii) i.e., the Core Sector Designated Businesses above.
Definition of Inward Direct Investment
If a foreign investor acquires shares or voting rights of a Japanese company that is listed on a Japanese stock
exchange (such as 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 1% or more of the issued shares or the total
number of voting rights of the relevant company, such acquisition constitutes an “inward direct investment.” In
addition, an acquisition of the authority to exercise, or instruct to exercise, voting rights held by othershareholders that results in the foreign investor, in combination with any existing shareholding, directly or
indirectly holding 1% or more of the total number of voting rights of the relevant company constitutes an“inward direct investment.” Furthermore, if a foreign investor manages, on a discretionary basis, shares or voting
rights of a Japanese company that is listed on a Japanese stock exchange and in combination with any existing
management, directly or indirectly manages 1% or more of the issued shares or the total number of voting rightsof the relevant company, such discretionary investment management generally constitutes an “inward direct
investment.”103

In addition to the acquisitions of shares or voting rights described above, if a foreign investor (i) is granted
the authority to exercise proxy voting rights on behalf of other shareholders of the relevant company regarding
certain matters which may control substantially or have a material influence on the management of suchcompany, such as the election or removal of directors, or (ii) obtains consent from another foreign investor
holding the voting rights of the relevant company to exercise the voting rights of such company jointly, and, ineach case, as a result of these arrangements, the number of the voting rights directly or indirectly held by theforeign investor, including the total number of the voting rights subject to such proxy, or the sum of the numberof the voting rights directly or indirectly held by the foreign investor and such other foreign investors subject tosuch joint voting agreement, as the case may be, is 10% or more of the total number of voting rights of therelevant company, each such arrangement regarding voting rights (hereinafter referred to as a “voting
arrangement”) also constitutes an “inward direct investment.” Additionally, if a foreign investor who directly or
indirectly holds 1% or more of the total voting rights of a Japanese listed company consents, at a general meetingof shareholders, to certain proposals having a material influence on the management of such company such as(i) election of such foreign investor or its related persons (as defined in the Foreign Exchange Regulations) as
directors or audit & supervisory board members of the relevant company or (ii) transfer or discontinuation of its
business, such consent will also constitute an “inward direct investment.”
Prior Notification Requirements
If a foreign investor intends to consummate an “inward direct investment” as described above, in certain
circumstances, such as where the foreign investor is in a country that is not listed on an exemption schedule in
the Foreign Exchange Regulations or where that Japanese company is engaged (as Toyota is currently) in one ormore Designated Businesses, prior notification of the relevant inward direct investment must be filed with the
Minister of Finance and any other competent Ministers.
However, a foreign investor seeking to consummate an “inward direct investment” may be eligible for the
exemptions, if certain conditions are met.
In the case of an acquisition (including investment discretionary management) of shares or voting rights or
the authority to exercise, directly or through instructions, voting rights of a Japanese listed company that is
engaged (as Toyota is currently) in one or more Core Sector Designated Businesses, the foreign investor may be
exempted from the prior notification requirement, if, as a result of such acquisition, the foreign investor directly
or indirectly holds less than 10% of the total number of issued shares or voting rights of the relevant company,
and such foreign investor complies with the following conditions:(i)the foreign investor or its closely-related persons (as defined in the Foreign Exchange Regulations) will
not become directors or audit & supervisory board members of the relevant company;(ii) the foreign investor will not make certain proposals (as prescribed in the Foreign Exchange
Regulations) at a general meeting of shareholders, including transfer or discontinuation of the
Designated Businesses of the relevant company;(iii) the foreign investor will not access non-public technical information in relation to the DesignatedBusinesses of the relevant company, or take certain other actions that may lead to the leak of suchnon-public technical information (as prescribed in the Foreign Exchange Regulations);(iv) the foreign investor will not attend, and will not cause any persons designated by it to attend, meetingsof the relevant company’s board of directors, or meetings of committees having authority to makeimportant decisions, in respect of the Core Sector Designated Businesses of the relevant company; and(v) the foreign investor will not make, and will not cause any persons designated by it to make, proposals
to such board or committees or their members in writing or electronic form requesting any response or
actions by certain deadlines in respect of the Core Sector Designated Businesses of the relevant
company.
104

In addition, in the case of an acquisition (including investment discretionary management) of shares orvoting rights or the authority to exercise, either directly or through instructions, voting rights of a Japanese listedcompany that is engaged in one or more Non-Core Sector Designated Businesses, the foreign investor may be
exempted from the prior notification requirement, including in the case where, as a result of such acquisition, theforeign investor holds 10% or more of the total number of issued shares or the total number of voting rights of
the relevant company, which would have required prior notification, if such foreign investor complies with theconditions (i) through (iii) above (the “Exemption Conditions”).
Notwithstanding the above, if a foreign investor falls under a category of disqualified investors designatedby the Foreign Exchange Regulations (including (a) investors who have records of certain sanctions due toviolations of the FEFTA and (b) certain investors who are state-owned enterprises or other related entities
excluding those who are accredited by the Minister of Finance), in no event may such foreign investor be eligible
for the exemptions described above. On the other hand, if a foreign investor, excluding the disqualified investors
described in the foregoing sentence, falls under a category of certain foreign financial institutions (as prescribedin the Foreign Exchange Regulations) and complies with the Exemption Conditions, such foreign investor may
be eligible for the exemptions, even if the acquisition results in such foreign investor’s directly or indirectly
holding 10% or more of the total number of issued shares or voting rights of a corporation engaged in one ormore Core Sector Designated Businesses.
In addition, if a foreign investor intends to make a voting arrangement with respect to a Japanese listedcompany engaged one or more Designated Businesses or consents to a proposal at a general meeting ofshareholders of such company, in each case, that constitutes an “inward direct investment” as described above, incertain circumstances, prior notification of the relevant inward direct investment must be filed with the Ministerof Finance and any other competent Ministers. However, the exemptions from the prior notification requirements
may be available in the cases where the relevant voting arrangement is regarding matters other than certain
matters which may control substantially or have a material influence on the management of the relevant
company, such as the election or removal of directors, which would have required prior notification.
Acquisitions of shares by foreign investors by way of stock split are not subject to the foregoing notification
requirements.
Procedures for Prior Notification
If such prior notification is filed, the proposed inward direct investment may not be consummated until after
30 days have passed from the date of filing, although this screening period may be shortened to two weeks unlesssuch Ministers deem it necessary to review the proposed inward direct investment. The Ministers may extend thescreening period up to five months if they deem it necessary to review the proposed inward direct investment andmay recommend any modification or abandonment of the proposed inward direct investment and, if the foreign
investor does not accept such recommendation, the Ministers may order the modification or abandonment of suchinward direct investment. In addition, if the Ministers consider the proposed inward direct investment to be an
inward direct investment that is likely to cause damage to the national security of Japan and, if a foreign investor(i) consummates such inward direct investment without filing the prior notification described above; (ii)consummates such inward direct investment before the expiration of the screening period described above; (iii)in connection with such inward direct investment, makes false statements in the prior notification describedabove; or (iv) does not follow the recommendation or order issued by the Ministers to modify or abandon suchinward direct investment, the Ministers may order such foreign investor to dispose of all or part of the sharesacquired or take other measures.

105

Post Facto Reporting Requirements
A foreign investor who consummates an inward direct investment as described above relating to a Japaneselisted company that is engaged in one or more Designated Businesses, but is not subject to the prior notification
requirements described above due to the exemptions from such prior notification requirements, in general, mustfile a report of the relevant inward direct investment with the Minister of Finance and any other competent
Ministers having jurisdiction over such Japanese company within 45 days of such inward direct investment
when, as a result of such acquisition, the foreign investor (excluding, in the cases of (i) and (ii) below, a foreign
investor who falls under a category of certain foreign financial institutions (as prescribed in the Foreign
Exchange Regulations)) directly or indirectly holds (i) 1% or more but less than 3% of the total number of issued
shares or voting rights, for the first time, (ii) 3% or more but less than 10% of the total number of issued sharesor voting rights, for the first time, or (iii) 10% or more of the total number of issued shares or voting rights.
In addition, if a foreign investor consummates the inward direct investment described above through theacquisition (including investment discretionary management) of shares or voting rights or the authority to
exercise, directly or through instructions, voting rights of a Japanese listed company that is not engaged in the
Designated Businesses (which is not subject to the prior notification requirements described above) and, as aresult of such acquisition, such foreign investor holds 10% or more of shares or voting rights of the total number
of issued shares or voting rights of the relevant company, such foreign investor must file a report of the relevant
inward direct investment with the Minister of Finance and any other competent Ministers having jurisdiction
over such Japanese company within 45 days of such inward direct investment.
Additionally, if a foreign investor consummates the inward direct investment described above through avoting arrangement with respect to a Japanese listed company that is not engaged in the Designated Businesses(which is not subject to the prior notification requirements described above), such foreign investor must file areport of the relevant inward direct investment with the Minister of Finance and any other competent Ministers
having jurisdiction over such Japanese company within 45 days of such inward direct investment.
Acquisitions of shares by foreign investors by way of stock split are not subject to the foregoing notification
requirements.
Dividends and Proceeds of Sale
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 stock (by vote orvalue), investors that hold shares of common stock or ADSs as part of a straddle, hedge, conversion transaction106

or other integrated 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 UnitedStates and Japan, judicial decisions, published rulings and administrative pronouncements all as in effect on thedate 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 differinginterpretations.
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 taxation 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 American Depositary Receipts evidencing ADSs will be treated as the owners of the shares ofcommon stock represented by those ADSs, and exchanges of shares of common stock for ADSs, and exchangesof 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
non-residents of Japan or non-Japanese corporations without permanent establishments in Japan (“non-resident
107Holders”) who are holders of shares of common stock or of ADSs of Toyota. The following information
regarding taxation in Japan is based on the tax treaties and tax laws in force and their interpretation by Japan’s
tax authorities as of the date of this annual report. Tax laws and treaties and their interpretations may change(including with retroactive effect). Toyota will not revise this summary on the basis of any such change occurring
after the date of 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 taxable events.
In the absence of an applicable income tax treaty, convention or agreement reducing the maximum rate ofJapanese withholding tax or allowing an 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 that, with respect to dividends paid on listed shares issued by a Japanese corporation(such as the shares of common stock or ADSs of Toyota) to non-resident Holders, other than any non-resident
Holder who is an individual holding three percent or more of the total issued shares of 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. These rates include 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.
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, ten percent or five percent for
portfolio investors (15 percent under the income tax treaties in force with, among other countries, Canada,
Denmark, Finland, Germany, Iceland, Ireland, Italy, Luxembourg, New Zealand, Norway and Singapore, ten
percent under the income tax treaties with, among other countries, Australia, Austria, Belgium, France, Hong
Kong, the Netherlands, Portugal, Sweden, Switzerland, the U.K. and the United States, and five percent under theincome tax treaties with, among others, Spain).
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 ten
percent of the gross amount actually distributed, and dividends paid by a Japanese corporation to an Eligible U.S.
Holder that is a pension fund (as defined in the Treaty) are exempt from Japanese income tax by way of
withholding or otherwise, provided that such dividends are not 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 the payment of dividends on shares ofcommon stock by Toyota is required to submit an Application Form for Income Tax Convention Regarding
Relief from Japanese Income Tax and Special Income Tax for Reconstruction on Dividends (together with anyother 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 by submitting aSpecial Application Form for Income Tax Convention Regarding Relief from Japanese Income Tax and Special
Income Tax for Reconstruction on Dividends of Listed Stock (together with any other required forms anddocuments). With respect to ADSs, this reduced rate or exemption is applicable if the Depositary or its agent
submits, together with other documents, two Special Application Forms (one before payment of dividends, theother within eight months after the recording date concerning such payment of dividends) to the Japanese tax
authority. To claim this reduced rate or exemption, any relevant non-resident Holder of ADSs will be required to108

file proof of taxpayer status, residence and beneficial ownership (as applicable) and to provide other informationor 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 otherwise applicable underJapanese tax law or an exemption from the withholding tax, but fails to submit the required application inadvance, will be entitled to claim the refund of Japanese taxes withheld in excess of the rate under an applicabletax treaty (if such non-resident Holder is entitled to a reduced treaty rate under the applicable income tax treaty)or the entire amount of Japanese tax withheld (if such non-resident Holder is entitled to an exemption under theapplicable 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 procedures as 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. In addition, Eligible U.S. Holders are exempt from Japaneseincome 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
United States 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
109

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.
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.” 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, subject to a number of complex limitations and conditions,
including those introduced by recently issued U.S. Treasury regulations that apply to foreign income taxes paidor accrued in taxable years beginning on or after December 28, 2021. A U.S. Holder’s use of a foreign tax credit
with respect to any such Japanese income or withholding taxes would generally not be allowed unless such U.S.
Holder elects benefits under an applicable income tax treaty with respect to such tax. A U.S. Holder who does
not elect to claim a credit for any creditable foreign income taxes paid during the taxable year may instead claim
a deduction in the computation of such U.S. Holder’s taxable income. Special rules generally will apply to thecalculation of foreign tax credits in respect of dividend income that qualifies for preferential U.S. federal income
tax rates. Additionally, special rules apply to individuals whose foreign source income during the taxable year
consists entirely of “qualified passive income” and whose creditable foreign taxes paid or accrued during thetaxable year do not exceed $300 ($600 in the case of 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.
110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
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, 2022, 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 inthe taxable year of the disposition and other conditions are met.
111

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.
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 24% 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 and Reporting (Individuals), or IRS Form W-8BEN-E, entitled Certificate of Status ofBeneficial Owner for United States Tax Withholding and Reporting (Entities) (or other appropriate IRS Form
W-8), in the case of non-U.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 that the 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 access thisinformation through the SEC’s website (https://www.sec.gov). In addition, Toyota’s reports, proxy statements
112

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 be inspected at Toyota’s offices bycontacting Toyota at 1 Toyota-cho, Toyota City, Aichi Prefecture 471-8571, Japan, attention: Capital Strategy &Affiliated Companies, Finance Division, telephone number: +81-565-28-2121.
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 3 to theconsolidated financial statements and further disclosure is provided in notes 20 and 21 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.
Market risk analyses of risks such as foreign exchange risk, interest rate risk, commodity price fluctuation
risk and stock price fluctuation risk are provided in note 19 to the consolidated financial statements.
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.
12.D AMERICAN DEPOSITARY SHARESFees and Charges for Holders of American Depositary Shares
The Bank of New York Mellon, as Depositary for the ADSs, collects its fees for delivery and surrender of
ADSs directly from investors depositing shares or surrendering ADSs for the purpose of withdrawal or fromintermediaries acting for them. The Depositary collects fees for making distributions to investors 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 those services are paid.
113

Persons depositing or withdrawing shares must pay:For:

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

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

Surrender of ADSs for the purpose ofwithdrawal including if the deposit agreement
terminates$0.05 (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 you had been shares and theshares had been deposited for delivery of ADSs•

Distribution of securities or rights distributed toholders of deposited securities that are distributedby the Depositary to ADS registered holders$0.05 (or less) per ADS per year•

General depositary services

Registration fees•

Registration of transfer of shares on Toyota’sshare register to or from the name of the
Depositary or its nominee or the custodian or its
nominee when shares are deposited or withdrawn

Fees and expenses of the Depositary•

Cable (including SWIFT) and facsimiletransmissions (when expressly provided in thedeposit agreement)•

Converting foreign currency to U.S. dollars

Taxes and other governmental charges the Depositaryor the custodian have to pay on any ADS or share
underlying an ADS•

As necessary

Any other charges payable by the Depositary, thecustodian or their respective agents in connection withthe servicing of the deposited securities•

As necessary

Fees Incurred in Fiscal 2022
For fiscal 2022, the Depositary paid to Toyota, or paid to a third party at Toyota’s instruction, an aggregate
of $854,666 for standard out-of-pocket maintenance costs for the ADSs (consisting of the expenses of postageand envelopes for mailing annual reports, printing and distributing dividend checks, stationery, postage,facsimile, and telephone calls), Toyota’s continuing annual stock exchange listing fees with respect to the ADSs,
expenses relating to Toyota’s annual general shareholders’ meeting that are incurred with respect to Toyota’s
ADS holders and 50% of the net dividend fees collected by the Depositary.
Fees to be Paid in the FutureWith regards to the ADS program, the Depositary has agreed to pay the standard out-of-pocket maintenancecosts for the ADSs, 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 to pay forinvestor relations expenses, the continuing annual stock exchange listing fees with respect to the ADSs, and anyother program related expenses. The limit on the amount of expenses for which the Depositary will pay is thesum of $300,000 annually. In addition, the Depositary has agreed to pay Toyota 50% of the net dividend feescollected by the Depositary during each annual period towards the aforementioned expenses.

114

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 fiscal 2022. 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 decisions regarding required disclosure. The disclosure controls and procedures
also ensure 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 President and Representative Director, who concurrently serves as CEO, andthe member of the board of directors who concurrently serves as CFO. Toyota’s disclosure controls andprocedures are designed to provide reasonable assurance of achieving its objectives. Managerial judgment wasnecessary to evaluate the cost-benefit relationship of possible controls and procedures. The President andRepresentative Director as well as the member of the board of directors have concluded that Toyota’s disclosure
controls and procedures 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 IFRS. Toyota’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 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 IFRS, and that Toyota’s receipts and expenditures are being
made only in accordance with authorizations of Toyota’s management and members of the board of
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.

115

Toyota’s management conducted an evaluation of the effectiveness of internal control over financial
reporting based on the framework in “Internal Control — Integrated Framework (2013)” issued by theCommittee of Sponsoring Organizations of the Treadway Commission.
Based on this evaluation, management concluded that Toyota’s internal control over financial reporting was
effective as of March 31, 2022.
PricewaterhouseCoopers Aarata LLC, 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, 2022, 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 LLC, 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 2022 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’s
meetings of shareholders 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 expert. 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 members of the board of directors and operating
officers, including its principal executive officer, principal financial officer, principal accounting officer orcontroller, or persons performing similar functions. A copy of Toyota’s code of ethics is included as an exhibit tothis annual report on Form 20-F.
116

ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
PricewaterhouseCoopers Aarata LLC has audited the financial statements of Toyota included in this annual
report on Form 20-F.
The following table presents the aggregate fees for professional services and other services rendered byPricewaterhouseCoopers Aarata LLC and the various network and member firms of PricewaterhouseCoopers to
Toyota in fiscal 2021 and fiscal 2022.
Yen in millions
2021
2022

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

4,602
70
373
185

5,460
52
351
181

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

5,230

6,045

(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 agreed-upon or expanded audit procedures; andfinancial 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; expatriate tax assistance and compliance.
(4) All Other Fees primarily include fees billed for risk management advisory services; services providing
information related to automotive market conditions; and other advisory services.
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
pre-approval of audit and permissible non-audit services performed by Toyota’s independent public accountants.
Under the policy, specified operating officers or managers submit a request for general pre-approval of audit
and permissible non-audit services for the following fiscal year, which shall include details of the specificservices and estimated fees for the services, to the audit & supervisory board, which reviews and determines
whether or not to grant the request in advance. Upon the general pre-approval of the audit & supervisory board,
the specified operating officers or managers 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.
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 specified operating officers
or managers. 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 of117

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
non-audit services and the payment of fees are subject to review by the audit & supervisory board at least once
every fiscal half year.
None of the audit related fees, tax fees or all other fees described in the table above were approved by theaudit & supervisory board pursuant to the de minimis exception provided by paragraph (c)(7)(i)(C) of Rule 2-01
of Regulation S-X.
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 2022:
(c)
Total
Number of
SharesPurchased as(b)Part of
AveragePublicly
Price Paid per Announced
Share
Plans or(Yen)(1)(2)
Programs(1)(3)(d)
Maximum
Number of
Sharesthat May
Yet BePurchased
Under thePlans or
Programs(1)(3)

Period(a)
Total
Number of
SharesPurchased(1)(2)

April 1, 2021 – April 30, 2021 . . . . . . . . . . . . . . . . . . . . . .
May 1, 2021 – May 31, 2021 . . . . . . . . . . . . . . . . . . . . . . .
June 1, 2021 – June 30, 2021 . . . . . . . . . . . . . . . . . . . . . . .
July 1, 2021 – July 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . .
August 1, 2021 – August 31, 2021 . . . . . . . . . . . . . . . . . . .
September 1, 2021 – September 30, 2021 . . . . . . . . . . . . . .
October 1, 2021 – October 31, 2021 . . . . . . . . . . . . . . . . . .
November 1, 2021 – November 30, 2021 . . . . . . . . . . . . . .
December 1, 2021 – December 31, 2021 . . . . . . . . . . . . . .
January 1, 2022 – January 31, 2022 . . . . . . . . . . . . . . . . . .
February 1, 2022 – February 28, 2022 . . . . . . . . . . . . . . . .
March 1, 2022 – March 31, 2022 . . . . . . . . . . . . . . . . . . . .

6,480
6,285
11,025,155
36,347,425
64,503,960
17,367,305
2,470
11,911,575
20,121,741
12,157,620
15,174,545
13,107,195

8,442.05
8,482.47
9,785.95
9,721.70
9,620.58
9,704.57
1,965.89
2,096.99
2,063.71
2,304.53
2,213.82
2,022.19——
11,008,000
36,342,000
64,498,500
17,358,500—
11,910,000
20,120,000
12,156,400
15,173,600
13,106,500

—
—
—
—
—
—
—
—
—
—
—
—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201,731,756—

201,673,500—(1) Toyota effected a five-for-one stock split of shares of its common stock with a record date of September 30,
2021 and an effective date of October 1, 2021. The above numbers for the period from April 1, 2021
through September 30, 2021 are calculated based on the assumption that the stock split was implemented on
April 1, 2021.
118

(2) 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.” The number of shares purchased not pursuant to publicly announced plansor programs conducted in fiscal 2022 is 57,561 (calculated based on the assumption that the stock split was
implemented on April 1, 2021).
(3) Toyota announced on May 12, 2021 that it would repurchase up to 41 million shares (205 million shares
after considering stock split) of its common stock between June 18, 2021 to September 30, 2021 at a total
maximum purchase price of 250 billion yen, in order to return to shareholders the profits derived in fiscal
2021. Toyota also announced on November 4, 2021 that it would repurchase up to 120 million shares of its
common stock between November 5, 2021 to March 31, 2022 at a total maximum purchase price of150 billion yen in order to return to shareholders the profits derived in the first half of fiscal 2022. Toyota
further announced on March 23, 2022 that it would repurchase up to 80 million shares of its common stock
between March 24, 2022 to May 10, 2022 at a total maximum purchase price of 100 billion yen to provide
more flexibility with respect to repurchases than in the past.
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. Members of the Board of Directors. Toyota currently does not have any members of the board of
directors who will be deemed an “independent director” as required 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 member 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 orcommittee comprised solely of independent directors.

119

The Companies Act requires Toyota to have outside members of the board of directors under the Companies
Act. Toyota currently has three outside members of the board of directors. An “outside” member of the board of
directors refers to:(a) a person who is not, and has never been during the ten year period before becoming an outside memberof the board of directors, an executive director (a member of the board of directors who engages in the executionof business), executive officer, manager or employee (collectively, “Executive Director, etc.”) of Toyota or its
subsidiaries;(b) if a person was a member of the board of directors, accounting counselor (in the case that an accounting
counselor is a legal entity, an employee of such entity who is in charge of its affairs) or audit & supervisoryboard member (excluding those who have ever been Executive Directors, etc.) of Toyota or any of its
subsidiaries at any time during the ten year period before becoming an outside member of the board of directors,
such person who has not been an Executive Director, etc. of Toyota or any of its subsidiaries during the ten year
period before becoming a member of the board of directors, accounting counselor or audit & supervisory board
member; and(c) a person who is not a spouse or relative within the second degree of kinship of any member of the boardof directors or manager or other key employee of Toyota.
Such qualifications for an “outside” member of the board of directors 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 members of the board of directors of
Toyota satisfies the “independent director/audit & supervisory board member” requirements under the
regulations of the Japanese stock exchanges. The Japanese Corporate Governance Code provides that certain
listed companies, including Toyota, should appoint at least one third of their directors as “independent outside
directors” as defined based on the criteria for assessing director independence established by Toyota in line with
the independence standards of the Japanese stock exchanges. The content of the criteria for assessing director
independence established by Toyota is the same as that of the independence standards of the Japanese stock
exchanges, and each of the outside members of the board of directors of Toyota satisfies the “independent
outside director” requirements under such independence standards. The definition of “independent director/
audit & supervisory board member” and “independent outside director” is different from that of the definition of
independent director under the NYSE Corporate Governance Rules.
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. However, members of Toyota’s Executive Appointment Meeting, amajority of whom are outside directors, discuss recommendations to the board of directors concerning theappointment and dismissal of members of the board of directors and the Executive Appointment Meeting discuss
the details of the proposals to audit & supervisory board. Members of the Executive Compensation Meeting, amajority of whom are outside directors, review the remuneration system for members of board of directors andsenior management as well as determine the amount of remuneration for each member of the board of directors.
The Japanese Corporate Governance Code provides that certain listed companies, including Toyota, generally
should have the majority of the members of each of certain committees be independent directors, and thosecommittees of Toyota satisfy that principle.
120

Pursuant to the Companies Act, Toyota’s board of directors nominates and submits a proposal for theappointment of members of the board of directors for shareholder approval. The shareholders vote on suchnomination at the general shareholders’ meeting. The Companies Act requires that the limits or calculation
formula of the remuneration, bonus and any other benefits in compensation for the execution of duties(“remuneration, etc.”) of directors, the kind of remuneration, etc. (in case that the remuneration, etc. are otherthan cash (excluding shares and stock acquisition rights)) to be received by directors, and the limits ofremuneration, etc. that are shares and stock acquisition rights to be granted to directors as well as the 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 member of the board of directors is broadly delegated to the boardof directors and the distribution of remuneration among each audit & supervisory board member is determined byconsultation 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 or financial management nor are they required
to present other special knowledge and experience. Therefore, none of Toyota’s audit & supervisory board
members has “an expertise in accounting or financial management” as set forth in the NYSE Corporate
Governance Rules. The Japanese Corporate Governance Code indicates that persons with appropriate experienceand skills as well as necessary knowledge of finance, accounting, and laws should be appointed as audit &supervisory board members, and in particular, one or more audit & supervisory board members who havesufficient knowledge of finance and accounting matters should be appointed. Toyota has appointed persons who
are able to provide opinions and advice regarding management based on their broader experience and discretion
beyond finance and accounting. Under the Companies Act, the audit & supervisory board may determine theauditing policies and methods of investigating the conditions of Toyota’s business and assets, and may resolve
other matters concerning the execution of the audit & supervisory board member’s duties. The audit &supervisory board also prepares auditors’ reports and gives consent to proposals of the nomination of audit &supervisory board members. Further, the audit & supervisory board makes decisions concerning proposals
relating to the appointment and dismissal of accounting auditors; it also has the authority to dismiss theaccounting auditor when certain matters specified under the Companies Act occur.
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 an “outside” audit & supervisoryboard member, which is any person who satisfies all of the following requirements:(a) the person has never been a member of the board of directors, accounting counselor (in the case that an
accounting counselor is a legal entity, an employee of such entity who is in charge of its affairs),
executive officer, manager or employee of Toyota or its subsidiaries during the ten year period before
becoming an outside audit & supervisory board member;(b) if the person was an audit & supervisory board member of Toyota or any of its subsidiaries at any time
during the ten year period before becoming an outside audit & supervisory board member, such person
has not been a member of the board of directors, accounting counselor (in the case that an accounting
counselor is a legal entity, an employee of such entity who is in charge of its affairs), executive officer,
manager or employee of Toyota or any of its subsidiaries during the ten year period before becoming
an audit & supervisory board member of Toyota or any of its subsidiaries; and121

(c) the person is not a spouse or relative within the second degree of kinship of any member of the boardof directors or manager or other key employee of Toyota.
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. Members of the Board of Directors.”
4. Corporate Governance Guidelines. Unlike the NYSE Corporate Governance Rules, Toyota is not
required to adopt the Japanese Corporate Governance Code under Japanese laws and regulations, including theCompanies Act, the Financial Instruments and Exchange Law of Japan and stock exchange rules. However, if
Toyota does not comply with the Japanese Corporate Governance Code, it is required to explain the reasons why
it does not do so in accordance with the regulations of the Japanese stock exchanges. In addition, Toyota isrequired to resolve at the board of directors matters relating to a system, which is required under the ordinance ofthe Ministry of Justice (“internal control system” or “naibu-tosei”), to ensure the execution of duties of themembers of the board of directors to comply with laws, regulations and articles of incorporation, and any othersystems to ensure the adequacy of the business, and to disclose such matters resolved, policies and the present
status of its corporate governance in its business reports, annual securities report and certain other disclosure
documents in 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. Similar to the NYSE Corporate Governance Rules, under theJapanese Corporate Governance Code, Toyota is encouraged to adopt a code of conduct regarding ethicalbusiness activities for members of the board of directors, officers and employees. Toyota has resolved mattersrelating to maintenance of an “internal control system,” or “naibu-tosei,” in order to ensure its employees
comply with laws, regulations and the articles of incorporation, etc., pursuant to the Companies Act, and Toyota
maintains guidelines and internal regulations such as “Guiding Principles at Toyota,” “Toyota Code of Conduct”
and a code of ethics pursuant to Section 406 of the Sarbanes-Oxley Act. Please see “Code of Ethics” foradditional information.
ITEM 16H. MINE SAFETY DISCLOSURE
Not applicable.
ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.

122

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.

123

TOYOTA MOTOR CORPORATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page

Report of Independent Registered Public Accounting Firm (PCAOB ID: 2743) . . . . . . . . . . . . . . . . . . . .

F-2

Consolidated statement of financial position at March 31, 2021 and 2022 . . . . . . . . . . . . . . . . . . . . . . . . .

F-4

Consolidated statement of income for the years ended March 31, 2020, 2021 and 2022 . . . . . . . . . . . . . . .

F-6

Consolidated statement of comprehensive income for the years ended March 31, 2020, 2021 and 2022 . .

F-7

Consolidated statement of changes in equity for the years ended March 31, 2020, 2021 and 2022 . . . . . . .

F-8

Consolidated statement of cash flows for the years ended March 31, 2020, 2021 and 2022 . . . . . . . . . . . .

F - 10Notes to consolidated financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F - 11All 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 none of them meets the significance tests specified in Rule 3-09 of Regulation S-X.

F-1

Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of
Toyota Jidosha Kabushiki Kaisha(“Toyota Motor Corporation”)
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated statement of financial position of Toyota Motor Corporation and its subsidiaries (collectively
referred to as the “Company”) as of March 31, 2022 and 2021, and the related consolidated statements of income, comprehensive income,changes in equity and cash flows for each of the three years in the period ended March 31, 2022, including the related notes (collectively
referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as ofMarch 31, 2022, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of theCompany as of March 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended
March 31, 2022 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, 2022,
based on criteria established in Internal Control—Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control overfinancial 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 the Company’s
consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public
accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits toobtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or
fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of theconsolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures
included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also
included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements. 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 thedesign and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as
we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance ofrecords that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use, or disposition of the company’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, orthat the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements thatwere communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material tothe consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of

F-2

critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, bycommunicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures towhich they relate.
Liabilities for the costs of recalls and other safety measures
As described in Notes 3 and 24 to the consolidated financial statements, the Company accrues for costs of recalls and other safety measures.
As of March 31, 2022, estimated liabilities for the costs of recalls and other safety measures totaled ¥1,171,213 million and were included inliabilities for quality assurance in the consolidated statement of financial position. The Company measures the majority of liabilities for thecosts of recalls and other safety measures at the time of vehicle sales comprehensively by aggregate sales of various models in a certain period
by geographical regions. However, when circumstances warrant, the Company measures liabilities for costs of a particular recall or othersafety measures using an individual model when they are probable and reasonably estimable. Management calculates the liabilities for thecosts of recalls and other safety measures that are determined comprehensively based on the accumulated amount of repair cost paid andpattern of actual payment occurrence.
The principal considerations for our determination that performing procedures relating to liabilities for the costs of recalls and other safetymeasures that are determined comprehensively is a critical audit matter are 1) significant judgment and estimation was required bymanagement when developing the liabilities which in turn led to a high degree of auditor judgment and subjectivity in performing proceduresto evaluate management’s assumptions; and 2) significant audit effort was necessary relating to testing the accumulated amount of repair cost
paid and pattern of actual payment occurrence utilized in developing the estimate. In addition, the audit effort included the involvement ofprofessionals with specialized skills and knowledge to assist in performing these procedures and evaluating the audit evidence obtained.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the
consolidated financial statements. These procedures included testing the effectiveness of controls relating to liabilities for the costs of recalls
and other safety measures, including controls related to the determination of the significant assumptions and data used to calculate theliabilities that are determined comprehensively. These procedures also included, among others: 1) testing management’s process for
estimating the liabilities, including evaluating the reasonableness of the significant assumptions; and 2) testing of the completeness andaccuracy of the data used in the estimate. We also utilized professionals with specialized skills and knowledge to assist us in testing theliabilities by developing an independent range of reasonable estimated loss based on the Company’s data and independently developed
assumptions.
Allowance for Credit Losses—Retail finance receivables
As described in Notes 3, 8 and 19 to the consolidated financial statements, the Company measures an allowance for credit losses on its retailfinance receivables by estimating the expected credit losses at the reporting date. As of March 31, 2022, ¥230,104 million of the allowance for
credit losses corresponding to ¥17,647,440 million of retail finance receivables was recorded in the consolidated statement of financial
position. The allowance for credit losses on retail finance receivables is measured based on a systematic, ongoing review and evaluation
performed as part of 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, forward-looking information including movements of the world
economy and other pertinent factors. In calculating the expected credit losses, the Company uses the probability of a default and the loss ratein the event of a default based on past experience and then reflects adjustments based on its forecasts of current and future economic
conditions. Retail finance receivables within the United States represent approximately a half of the consolidated retail finance receivables asof March 31, 2022.
The principal considerations for our determination that performing procedures relating to the allowance for credit losses on retail financereceivables is a critical audit matter are 1) there was a significant amount of judgment by management when determining assumptions of theprobability of a default, the loss rate in the event of a default, and adjustments based on the forecasts of current and future economic
conditions used in the estimating of the allowance for credit losses, which in turn led to a high degree of auditor judgment and subjectivity inperforming procedures to evaluate those management’s assumptions and adjustments; 2) there was a high level of complexity in assessing
audit evidence related to management’s estimate. In addition, the audit effort included the involvement of professionals with specialized skills
and knowledge to assist in performing these procedures and evaluating the audit evidence obtained.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the
consolidated financial statements. These procedures included testing the effectiveness of controls relating to the Company’s allowance for
credit losses on retail finance receivables, including controls over data supporting the assumptions, such as the probability of a default and theloss rate in the event of a default based on past experience, and adjustments used to determine the allowance. These procedures also included,
among others, testing management’s process for estimating the allowance, including evaluating the reasonableness of the assumptions andadjustments. We also used professionals with specialized skills and knowledge to assist us in evaluating the reasonableness of the assumptions
and adjustments determined by management.
/s/ PricewaterhouseCoopers Aarata LLC
Nagoya, Japan
June 23, 2022
We have served as the Company’s auditor since 2006.

F-3

TOYOTA MOTOR CORPORATIONCONSOLIDATED STATEMENT OF FINANCIAL POSITION
Notes

AssetsCurrent assets
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade accounts and other receivables . . . . . . . . . . . . . . . . . . . . . . . .
Receivables related to financial services . . . . . . . . . . . . . . . . . . . . . .
Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6
7
8
9
10

Yen in millions
March 31, 2021 March 31, 2022

5,100,857
2,958,742
6,756,189
4,215,457
2,888,028
112,458
745,070

6,113,655
3,142,832
7,181,327
2,507,248
3,821,356
163,925
791,947

22,776,800

23,722,290

118
9

4,160,803
12,449,525
9,083,914

4,837,895
14,583,130
9,517,267

12
12
12
12
12

1,345,037
4,999,206
12,753,951
6,203,721
675,875

1,361,791
5,284,620
13,982,362
6,781,229
565,528

Total property, plant and equipment, at cost . . . . . . . . . . . . . . .

1225,977,791

27,975,530

Less - Accumulated depreciation and impairment losses . . . . .

12(14,566,638) (15,648,890)

Total property, plant and equipment, net . . . . . . . . . . . . . . . . .

1211,411,153

12,326,640

Right of use assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13
14
15
23

390,144
1,108,634
336,224549,942448,4121,191,966
342,202
718,968

Total non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

39,490,339

43,966,482

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

62,267,140

67,688,771

Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current assets
Investments accounted for using the equity method . . . . . . . . . . . . .
Receivables related to financial services . . . . . . . . . . . . . . . . . . . . . .
Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Machinery and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vehicles and equipment on operating leases . . . . . . . . . . . . . .
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

TOYOTA MOTOR CORPORATIONCONSOLIDATED STATEMENT OF FINANCIAL POSITION—(Continued)
Notes

Liabilities
Current liabilities
Trade accounts and other payables . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term and current portion of long-term debt . . . . . . . . . . . . . . .
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities for quality assurance . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16
17

Yen in millions
March 31, 2021 March 31, 2022

4,045,939
12,212,060
1,397,140
763,875
350,880
1,482,872
1,207,700

4,292,092
11,187,839
1,520,446
1,046,050
826,815
1,555,711
1,413,208

21,460,466

21,842,161

13,447,575
323,432
1,035,096
1,247,220
465,021

15,308,519
461,583
1,022,749
1,354,794
544,145

Total non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16,518,344

18,691,790

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

37,978,811

40,533,951

18
24

Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current liabilities
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retirement benefit liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17
18
23
15

Shareholders’ equity
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other components of equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25
25
25
25
25

397,050
397,050497,275
498,575
24,104,176 26,453,126
1,307,726
2,203,254(2,901,680) (3,306,037)

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

25

23,404,547

26,245,969

Non-controlling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

883,782

908,851

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

24,288,329

27,154,820

Total liabilities and shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

62,267,140

67,688,771

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

TOYOTA MOTOR CORPORATIONCONSOLIDATED STATEMENT OF INCOME
Yen in millions

Notes

For the year ended
March 31, 2020

For the year ended
March 31, 2021

For the year ended
March 31, 2022

Sales revenues
Sales of products . . . . . . . . . . . . . . . . . .
Financial services . . . . . . . . . . . . . . . . . .

26
26

27,693,693
2,172,854

25,077,398
2,137,195

29,073,428
2,306,079

Total sales revenues . . . . . . . . . . . . . . . .

26

29,866,547

27,214,594

31,379,507

Costs and expenses
Cost of products sold . . . . . . . . . . . . . . .
Cost of financial services . . . . . . . . . . . .
Selling, general and administrative . . . .

23,103,596
1,381,755
2,981,965

21,199,890
1,182,330
2,634,625

24,250,784
1,157,050
2,975,977

Total costs and expenses . . . . . . . . . . . .

27,467,315

25,016,845

28,383,811

Operating income . . . . . . . . . . . . . . . . . . . . . .

2,399,232

2,197,748

2,995,697

310,247
305,846(47,155)(94,619)(80,607)351,029435,229(47,537)
15,142(19,257)

560,346
334,760(43,997)
216,187(72,461)

2,792,942

2,932,354

3,990,532

681,817649,976

1,115,918

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,111,125

2,282,378

2,874,614

Net income attributable to
Toyota Motor Corporation . . . . . . . . . . .
Non-controlling interests . . . . . . . . . . . .

2,036,140
74,9852,245,261
37,1182,850,110
24,504

Net income . . . . . . . . . . . . . . . . . . . . . . .

2,111,125

2,282,378

2,874,614

Share of profit (loss) of investments
accounted for using the equity method . . .
Other finance income . . . . . . . . . . . . . . . . . . .
Other finance costs . . . . . . . . . . . . . . . . . . . . .
Foreign exchange gain (loss), net . . . . . . . . .
Other income (loss), net . . . . . . . . . . . . . . . . .

11
28
28

Income before income taxes . . . . . . . . . . . . .
Income tax expense . . . . . . . . . . . . . . . . . . . .

15

Yen

Earnings per share attributable to Toyota
Motor Corporation
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29

145.49160.65205.23

Diluted . . . . . . . . . . . . . . . . . . . . . . . . . .

29144.02158.93205.23

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

TOYOTA MOTOR CORPORATIONCONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended
March 31, 2020

Yen in millions
For the year ended
March 31, 2021

For the year ended
March 31, 2022

2,111,125

2,282,378

2,874,614(243,853)

387,427(49,242)(43,399)

216,272

136,250

62,56880,472

113,641(224,684)

684,172

200,648(362,098)

403,636

902,844

113,390(83,503)(154,174)(35,253)

8,172

193,811(283,961)

328,305

942,480(508,645)

1,012,476

1,143,129

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

1,602,480

3,294,854

4,017,742

Comprehensive income for the period
attributable to
Toyota Motor Corporation . . . . . . . . . . .
Non-controlling interests . . . . . . . . . . . .

1,555,009
47,4723,217,806
77,0483,954,350
63,392Comprehensive income . . . . . . . . . . . . .

1,602,480

3,294,854

4,017,742

Notes

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income, net of tax
Items that will not be reclassified to
profit (loss)
Net changes in revaluation offinancial assets measured at fairvalue through othercomprehensive income . . . . . . . . 25
Remeasurements of defined benefit
plans . . . . . . . . . . . . . . . . . . . . . . 25
Share of other comprehensive
income of equity method
investees . . . . . . . . . . . . . . . . . . . 11,25
Total of items that will not bereclassified to profit (loss) . . . . .
Items that may be reclassified
subsequently to profit (loss)
Exchange differences ontranslating foreign operations . . 25
Net changes in revaluation offinancial assets measured at fairvalue through othercomprehensive income . . . . . . . . 25
Share of other comprehensive
income of equity method
investees . . . . . . . . . . . . . . . . . . . 11,25
Total of items that may bereclassified subsequently to
profit (loss) . . . . . . . . . . . . . . . . .
Total other comprehensive income, netof tax . . . . . . . . . . . . . . . . . . . . . . . . .

25

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

TOYOTA MOTOR CORPORATIONCONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended March 31, 2020
Yen in millions

Retainedearnings

Other
componentsof equity

Toyota Motor
Corporation
NonTotal
Treasury shareholders’ controlling shareholders’stockequityinterests
equity397,050 487,162 20,613,776

1,016,035(2,606,925) 19,907,100

CommonNotes stock

Balances at April 1, 2019 . . . . . . . . . .
Comprehensive income
Net income . . . . . . . . . . . . . . . . .
Other comprehensive income,net of tax . . . . . . . . . . . . . . . . 25
Total comprehensive income . . .
Transactions with owners and other
Dividends paid . . . . . . . . . . . . . . 25
Repurchase of treasury stock . . . 25
Reissuance of treasury stock . . . 25
Change in scope of equity
method . . . . . . . . . . . . . . . . . .
Equity transactions and other . . .
Total transactions with owners
and other . . . . . . . . . . . . . . . . .
Reclassification to retained
earnings . . . . . . . . . . . . . . . . . . . . . 25
Balances at March 31, 2020 . . . . . . . .

Additional
paid-in
capital

—

—

—

—

—

—

—
—
—

—
—
4,053

—
—

2,036,140

20,655,210

74,9852,111,125———(481,131)—(481,131) (27,514)(508,645)

2,036,140(481,131)—

1,555,009

47,472

1,602,480(618,801)
—
—

—
—
—

—
(500,309)
20,128(618,801) (54,956)(500,309)—
24,181—(673,756)(500,309)
24,181—(1,882)

253,590
—

—
—

—
—

253,590—(1,882) (20,503)

253,590(22,384)—

2,171(365,211)—(480,181)(843,221) (75,458)(918,679)——(50,644)

50,644

397,050 489,334 22,234,061

585,549—

2,036,140

748,110———(3,087,106) 20,618,888

720,124

21,339,012

For the year ended March 31, 2021
Yen in millions

Retainedearnings

Other
componentsof equity

397,050 489,334 22,234,061

585,549

CommonNotes stock

Balances at April 1, 2020 . . . . . . . . . .
Comprehensive income
Net income . . . . . . . . . . . . . . . . .
Other comprehensive income,net of tax . . . . . . . . . . . . . . . . 25

Additional
paid-in
capitalToyota Motor
Corporation
NonTotal
Treasury shareholders’ controlling shareholders’stockequityinterests
equity(3,087,106) 20,618,888

720,124

21,339,012——

2,245,261——

2,245,261

37,1182,282,378———

972,546—

972,546

39,9301,012,476——

2,245,261

972,546—

3,217,806

77,0483,294,854

—
—
—

—
—
15,041(625,514)
—
—

—
—
—

—
(118)
185,544(625,514) (36,598)(118)—
200,585—(662,112)(118)
200,585———(7,099)

—
—

—
—

—
—

—
102,588(7,099) 20,620

102,588
13,521

Total transactions with owners
and other . . . . . . . . . . . . . . . . .

—

7,942

(625,514)—

185,426(432,147)

86,610(345,537)

Reclassification to retained
earnings . . . . . . . . . . . . . . . . . . . . . 25——

250,369(250,369)

—

—

—

—

397,050 497,275 24,104,176

1,307,726(2,901,680) 23,404,547

883,782

24,288,329

Total comprehensive income . . .
Transactions with owners and other
Dividends paid . . . . . . . . . . . . . . 25
Repurchase of treasury stock . . . 25
Reissuance of treasury stock . . . 25
Change in scope of
consolidation . . . . . . . . . . . . .
Equity transactions and other . . .

Balances at March 31, 2021 . . . . . . . .

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

TOYOTA MOTOR CORPORATIONCONSOLIDATED STATEMENT OF CHANGES IN EQUITY—(Continued)
For the year ended March 31, 2022
Yen in millions

Retainedearnings

Other
componentsof equity

Toyota Motor
Corporation
NonTotal
Treasury shareholders’ controlling shareholders’stockequityinterests
equity397,050 497,275 24,104,176

1,307,726(2,901,680) 23,404,547

Additional
Common paid-in
Notes stock
capitalBalances at April 1, 2021 . . . . . . . . . .
Comprehensive income
Net income . . . . . . . . . . . . . . . . .
Other comprehensive income,net of tax . . . . . . . . . . . . . . . . 25——

883,782

24,288,329

2,850,110——

2,850,110

24,504

2,874,614———

1,104,240—

1,104,240

38,889

1,143,129

Total comprehensive income . . .

——2,850,110

1,104,240—

3,954,350

63,392

4,017,742

Transactions with owners and other
Dividends paid . . . . . . . . . . . . . . 25
Repurchase of treasury stock . . . 25
Reissuance of treasury stock . . . 25
Equity transactions and other . . .

—
—
—
—

—
—
227
1,074

(709,872)
—
—
—

—
—
—
—

—
(404,718)
362—(709,872) (51,723)(404,718)
—
588
—
1,074
13,400(761,595)(404,718)
588
14,473

Total transactions with owners
and other . . . . . . . . . . . . . . . . .

—

1,300

(709,872)—(404,357) (1,112,928) (38,323) (1,151,252)

Reclassification to retained
earnings . . . . . . . . . . . . . . . . . . . . . 25——

208,712(208,712)

397,050 498,575 26,453,126

2,203,254

Balances at March 31, 2022 . . . . . . . .

—

—

—

—

(3,306,037) 26,245,969

908,851

27,154,820

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

TOYOTA MOTOR CORPORATIONCONSOLIDATED STATEMENT OF CASH FLOWS
Yen in millions
For the year ended For the year ended For the year ended
Notes March 31, 2020
March 31, 2021
March 31, 2022
Cash flows from operating activities
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income and interest costs related to financial services,
net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share of profit (loss) of investments accounted for using theequity method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in operating assets and liabilities, and other . . . . . . . . .
(Increase) decrease in trade accounts and otherreceivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Increase) decrease in receivables related to financial
services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Increase) decrease in inventories . . . . . . . . . . . . . . . . . . . .
(Increase) decrease in other current assets . . . . . . . . . . . . . .
Increase (decrease) in trade accounts and other payables . .
Increase (decrease) in other current liabilities . . . . . . . . . . .
Increase (decrease) in retirement benefit liabilities . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes paid, net of refunds . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by (used in) operating activities . . . . . . . . . . .
Cash flows from investing activities
Additions to fixed assets excluding equipment leased toothers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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 . . . . . . . . . . .
Additions to intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions to public and corporate bonds and stocks . . . . . . . . . .
Proceeds from sales of public and corporate bonds and stocks . .
Proceeds upon maturity of public and corporate bonds . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,111,125
1,595,347

2,282,378
1,644,290

2,874,614
1,821,880(193,046)(236,862)(354,102)(310,247)
681,817(1,319,537)(351,029)
649,976(1,063,562)(560,346)
1,115,918(1,130,667)

257,588

5,027

118,652(1,214,742)(163,109)(308,342)(129,053)
258,904
43,270(64,053)
798,458
318,408(506,307)(777,522)(1,243,648)(242,769)(163,473)
384,142
282,197
55,281(140,319)
776,748
294,520(459,181)(810,117)(1,213,234)(725,285)
71,314
152,399
410,546
60,419(5,478)
835,739
347,387(418,043)(809,763)

2,398,496

2,727,162

3,722,615(1,246,293)(2,195,291)(1,213,903)(2,275,595)(1,197,266)(2,286,893)

47,9491,391,193(304,992)(2,405,337)
1,151,463
1,224,185
212,473

40,542
1,371,699(278,447)(2,729,171)
1,020,533
1,041,385(1,661,218)

37,749
1,542,132(346,085)(2,427,911)
282,5211,920,116
1,898,143(2,124,650)(4,684,175)(577,496)

17
17
17

279,033
5,690,569(4,456,913)(1,038,438)
9,656,216(5,416,376)(579,216)
8,122,678(8,843,665)

25(618,801)(54,956)(476,128)(625,514)(36,598)
199,884(709,872)(51,723)(404,718)(2,466,516)

33

Net cash provided by (used in) investing activities . . . . . . . . . . .
Cash flows from financing activities
Increase (decrease) in short-term debt . . . . . . . . . . . . . . . . . . . . .
Proceeds from long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid to Toyota Motor Corporation commonshareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid to non-controlling interests . . . . . . . . . . . . . . . . .
Reissuance (repurchase) of treasury stock . . . . . . . . . . . . . . . . . .
Net cash provided by (used in) financing activities . . . . . . . . . . .

362,805

2,739,174

Effect of exchange rate changes on cash and cash equivalents . . . . . .

(141,007)

220,245

334,195

Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . .

495,645

1,002,406

1,012,798

Cash and cash equivalents at beginning of year . . . . . . . . . . . . . . . . . .

63,602,805

4,098,450

5,100,857

Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . . . . . . .

6

4,098,450

5,100,857

6,113,655

The accompanying notes are an integral part of these consolidated financial statements.
F-10

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Reporting entity
TMC is a limited liability, joint-stock company located in Japan, and TMC’s principal executive offices areregistered in Toyota City, Aichi Prefecture. The consolidated financial statements of the group consist of TMC,
its consolidated subsidiaries (collectively, “Toyota”) and their interests in associates and joint ventures.
Toyota and its associates are primarily engaged in the design, manufacture, and sale of sedans, minivans,compact cars, SUVs, trucks and related parts and accessories throughout the world. In addition, Toyota and its
associates provide financing, vehicle leasing and certain other financial services primarily to its dealers and theircustomers to support the sales of vehicles and other products manufactured by Toyota and its associates.
2. Basis of preparation(1) Compliance with international financial reporting standards
Toyota’s consolidated financial statements have been prepared in accordance with IFRS as issued by the
IASB.
The consolidated financial statements were approved on June 23, 2022 by President, member of the Boardof Directors Akio Toyoda and CFO, member of the Board of Directors Kenta Kon.
(2) Basis of measurement
Toyota’s consolidated financial statements have been prepared on a historical cost basis, except for certain
financial assets and liabilities measured at fair value and assets and liabilities associated with defined benefit
plans indicated in “3. Significant accounting policies”.
(3) Functional currency and presentation currency
The consolidated financial statements are presented in Japanese yen, which is the functional currency of
TMC. All financial information presented in Japanese yen has been rounded to the nearest million Japanese yen,
except when otherwise indicated. Amounts may not sum to totals due to rounding.
3. Significant accounting policies
Basis of consolidation (1) Subsidiaries
The consolidated financial statements include the accounts of TMC, its subsidiaries that are controlled by
TMC, and those structured entities that are controlled by Toyota. Toyota controls an entity when Toyota is
exposed or has rights to variable returns from involvement with the entity, and has the ability to affect those
returns by using its power over the entity.
The financial statements of subsidiaries have been adjusted in order to ensure consistency with theaccounting policies adopted by Toyota as necessary. All significant intercompany balances and transactions aswell as the unrealized profit have been eliminated in consolidation.
Changes in a subsidiary’s ownership interests that do not result in a loss of control are accounted for as
equity transactions. When control over a subsidiary is lost, any gain or loss on the disposal of the interest sold isrecognized in profit or loss.
F-11

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(2) Associates and joint ventures
Associates are entities over which Toyota has a significant influence over the decisions on financial andoperating policies, but does not have control or joint control.
Joint ventures are entities over which two or more parties including Toyota have joint control, based on acontractual arrangement, and financial and business decisions about the relevant activities of which require
unanimous consent of the parties that have joint control.
Investments in associates and joint ventures are accounted for using the equity method. The financial
statements of associates and joint ventures have been adjusted in order to ensure consistency with the accounting
policies adopted by Toyota as necessary.
When the use of the equity method is discontinued from the date when the investees are determined to be nolonger associates or joint ventures, any gain or loss on such disposal of the investment is recognized in profit orloss.
Foreign currency translation (1) Foreign currency transactions
Foreign currency transactions are translated into the respective functional currencies of Toyota at theexchange rates prevailing when such transactions occur. All foreign currency receivables and payables aretranslated into the respective functional currencies at the applicable exchange rates at the end of the reporting
period. Non-monetary assets and liabilities in foreign currencies that are measured at fair value are translated into
the functional currency using the exchange rate on the date when the fair value was measured. Gains or losses on
exchange differences arising from settlement of foreign currency receivables and payables or on their translations
at the end of the reporting date are recognized in profit or loss. Furthermore, exchange differences arising fromequity financial assets measured at fair value through other comprehensive income is recognized as othercomprehensive income.
(2) Foreign operations
All assets and liabilities of foreign subsidiaries, associates and joint ventures (collectively, “foreign
operations”) that use a functional currency other than Japanese yen are translated into Japanese yen at theexchange rates at the end of the reporting period. All revenues and expenses of foreign operations are translated
into Japanese yen at the average exchange rate for the period unless the exchange rate fluctuates widely.
Exchange differences arising from such translations are recognized in other comprehensive income andaccumulated in other components of equity in the consolidated statement of financial position. When a foreign
operation is disposed of, and control, significant influence or joint control over the foreign operation is lost, thecumulative amount of exchange differences relating to the foreign operation is reclassified from equity to profit
or loss.
Cash and cash equivalents Cash and cash equivalents consist of cash on hand, demand deposits, and short-term investments that arereadily convertible to cash and are subject to insignificant risk of changes in value with three months or lessmaturities from the acquisition date.

F-12

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Financial instruments (1) Financial assets(i) Initial recognition and measurement
Toyota initially recognizes financial assets when it becomes a party to a contract and except for derivatives,classifies financial assets into “financial assets measured at amortized cost”, “debt and equity financial assets
measured at fair value through other comprehensive income” or “financial assets measured at fair value throughprofit or loss”. The sale or purchase of financial assets that occurred in the normal course of business arerecognized and derecognized at the trade date.
Financial assets classified as being measured at fair value through profit or loss are measured at fair value,
but other financial assets are initially recognized and measured at fair value adding transaction costs directly
attributable to acquisition. Trade receivables that do not contain significant financial elements are measured at
the transaction price.
(a) Financial assets measured at amortized cost
Toyota classifies a financial asset as measured at amortized cost if both of the following conditions are met:
The asset is held within a business model whose objective is to hold financial assets in order to collectcontractual cash flows; andThe contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
(b) Debt financial assets measured at fair value through other comprehensive income
Debt financial assets are measured at fair value through other comprehensive income only if it meets both of
the following conditions:
The asset is held within a business model whose objective is achieved by both collecting contractual cash
flows and selling financial assets; andThe contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
(c) Equity financial assets measured at fair value through other comprehensive income
For equity financial assets such as shares held mainly for the purpose of maintaining or enhancing business
relationships with investees are irrevocably designated at initial recognition, as financial assets measured at fairvalue through other comprehensive income.
(d) Financial assets measured at fair value through profit or loss
Financial assets other than (a) to (c) are classified as financial assets measured at fair value through profit or
loss.
(ii) Subsequent measurement
After initial recognition, financial assets are measured based on the following classification.
F-13

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(a) Financial assets measured at amortized cost
Financial assets measured at amortized cost are measured at amortized cost using the effective interest
method.
(b) Debt financial assets measured at fair value through other comprehensive income
Subsequent changes in fair value of the financial assets are recognized as other comprehensive income.
Impairment gains or losses, interest income and foreign exchange gains and losses are recognized in profit orloss. When the financial assets are derecognized, the cumulative gain or loss recognized in other comprehensive
income is reclassified from other components of equity to profit or loss.
(c) Equity financial assets measured at fair value through other comprehensive income
Subsequent changes in fair value of the financial assets are recognized as other comprehensive income.
When the financial assets are derecognized, the cumulative gain or loss recognized through other comprehensive
income is reclassified from other components of equity to retained earnings. Dividends from equity financial
assets are recognized in profit or loss.
(d) Financial assets measured at fair value through profit or loss
Subsequent changes in the fair value of the financial assets are recognized in profit or loss.
(iii) Impairment of financial assets
An allowance for credit losses is provided for expected credit losses on financial assets that are measured atamortized cost as well as debt financial assets measured at fair value through other comprehensive income. An
allowance for credit losses is also provided for expected credit losses on loan commitments or financial guarantee
agreements that are off-balance sheet credit exposures.
At the end of the reporting period, Toyota assesses whether the credit risk on financial assets havesignificantly increased since initial recognition. At the end of the reporting period, if Toyota identifies asignificant increase in credit risk, allowances for credit losses are measured as being equal to the amount of
expected credit losses that would result from default events that are possible over the expected life of a financial
asset. At the end of the reporting period, if the credit risk for a financial instrument has not increased
significantly since its initial recognition, allowances for credit losses are measured as being equal to the amountof the expected credit losses caused by default events that may occur within 12 months from the end of thereporting period.
For accounts receivable that are included in “Trade accounts and other receivables” and finance leasereceivables, the allowance is continuously measured at amounts equal to expected credit losses over the expected
life of financial assets.
The amount of expected credit losses is measured as the present value of all cash short falls resulting fromthe difference between the cash flows due to Toyota in accordance with the contract and cash flows that Toyota
expects to receive, and such amount is recognized in profit or loss. A reversal of the allowance for credit losses
resulting from a reduction in the amount of expected credit losses is recognized in profit or loss.
If there is objective evidence of impairment such as significant financial difficulty of a borrower, or adefault or delinquency by a borrower, interest income is measured applying the effective interest method to the
F-14

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
net carrying amount of the financial asset (after deducting the allowance for credit loss). Financial assets are
written off either partially or fully when there is no reasonable expectation of recovering a financial asset in its
entirely or a portion thereof.
(iv) Derecognition of financial assets
Toyota derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or
when Toyota transfers the contractual right to receive cash flows from financial assets in transactions in which
substantially all the risks and rewards of ownership of the asset are transferred to another entity. Even if Toyotatransfers a financial asset, it neither transfers nor holds substantially all the risks and rewards of ownership ofsuch transferred financial asset. Further, in cases where Toyota continues to control such a transferred financial
asset, Toyota recognizes the retained interest on such financial asset and the relevant liabilities that might
possibly be paid in association therewith.
(2) Financial liabilities(i) Initial recognition and measurement
Toyota initially measures financial liabilities other than derivatives at fair value less transaction costs
directly attributable to the issuance of financial liabilities.
(ii) Subsequent measurement
Toyota subsequently measures financial liabilities at amortized cost using the effective interest method.
Amortization under the effective interest method and gain or losses on derecognition are recognized as financeincome or costs and recognized in profit or loss.
(iii) Derecognition of financial liabilities
Toyota derecognizes financial liabilities when the financial liabilities expire, that is, when the liability
identified in the contract expires due to performance, discharges, cancels, or expires.
(3) Derivative financial instruments
Toyota employs derivative financial instruments, including forward foreign exchange 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. All derivative transactions aremeasured at fair value as assets or liabilities.
Toyota does not use derivative financial instruments for speculative or trading purposes.
Finance receivables Finance receivables recorded on Toyota’s consolidated statement of financial position are net of any
unearned financial income and deferred origination costs and the allowance for credit losses. Deferredorigination costs are amortized so as to approximate a level rate of return over the term of the related contracts.

F-15

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The determination of finance receivable portfolios is based primarily on the qualitative consideration of thenature of Toyota’s business operations and finance receivables. The three portfolios within finance receivables
are as follows:(1) Retail receivables portfolio
The retail receivables portfolio consists of retail installment sales contracts acquired mainly from dealers(“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.
Toyota manages the retail receivables portfolio as one portfolio based on common risk characteristics
associated with the underlying finance receivables, the similarity of the credit risks, and the quantitative
materiality.
(2) Finance lease receivables portfolio
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 manages the finance lease receivables portfolio as one portfolio based on common risk
characteristics associated with the underlying finance receivables and the similarity of the credit risks.
(3) Wholesale and other dealer loan receivables portfolio
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.
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 manages the wholesale and other dealer loan receivables portfolio as one portfolio based on the risk
characteristics associated with the underlying finance receivables.
Allowance for credit losses on finance receivables The allowance for credit losses on finance receivables is measured at the portfolio level, based on asystematic, ongoing review and evaluation performed as part of the credit risk evaluation process, historical loss
F-16

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
experience, the size and composition of the portfolios, current economic events and conditions, the estimated fairvalue and adequacy of collateral, forward-looking information including movements of the world economy andother pertinent factors. Furthermore, portfolios are grouped based on similarities of risk characteristics, such as
product and collateral classes, when calculating expected credit losses in the aggregate.
(1) Retail receivables portfolio
With respect to retail receivables, Toyota reviews whether the credit risk on finance receivables has
increased significantly. To evaluate the risk, Toyota uses the changes for the possibility of a credit loss occurringor days in arrears as an index. Toyota assesses the significant increases in credit risk when contractual payments
are more than 30 days past due. When the credit risk on finance receivables has not increased significantly sinceinitial recognition, Toyota measures the loss allowance for that finance receivables at an amount equal to
12-month expected credit losses at the reporting date.
Meanwhile, Toyota measures the loss allowance for finance receivables at an amount equal to the lifetime
expected credit losses if the credit risk on that finance receivables has increased significantly since initialrecognition at the reporting date. Toyota calculates the loss allowance for finance receivables at an amount equal
to the lifetime expected credit losses by considering historical credit loss experience and future collectability,
when there is evidence that finance receivables is credit-impaired such as a breach of contract due to default or
delayed contractual payments.
In calculating expected credit losses, Toyota uses the probability of a default and the loss rate in the event ofa default based on past experience and then reflects its forecasts of current and future economic conditions.
Suspension of payment over a certain period of time and or situations which contractual obligations are notbeing met are considered as being in default in accordance with internal management rules.
(2) Finance lease receivables portfolio
With respect to the finance lease receivables portfolio, Toyota always measures loss allowance at an amountequal to lifetime expected credit losses. Suspension of payment over a certain period of time and/or situations
which contractual obligations are not being met are considered as being in default in accordance with internalmanagement rules.
(3) Wholesale and other dealer loan receivables portfolio
With respect to the wholesale and other dealer loan receivables portfolio, receivables are sorted primarily bycredit qualities based on internal risk assessments. Toyota reviews the change of the segment as an index whether
the credit risk on finance receivables has increased significantly since initial recognition to assess thesereceivables for credit risk. Toyota assesses the significant increases in credit risk when contractual payments are
more than 30 days past due. If the credit risk on finance receivables has not increased significantly since initialrecognition, Toyota measures the loss allowance for that finance receivables at an amount equal to 12-month
expected credit losses at the reporting date.
Meanwhile, Toyota measures the loss allowance for finance receivables at an amount equal to the lifetime
expected credit losses if the credit risk on that finance receivables has increased significantly since initialrecognition at the reporting date. Toyota calculates the loss allowance for finance receivables at an amount equal
to the lifetime expected credit losses by considering historical credit loss experience and future collectability,
when there is evidence that finance receivables are credit-impaired such as a debtor’s worsened financial
conditions, breach of contract due to default or delayed contractual payments.
F-17

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In calculating expected credit losses, Toyota uses the probability of a default and the loss rate in the event ofa default based on past experience and then reflects its forecasts of current and future economic conditions.
Suspension of payment over a certain period of time and/or situations where contractual obligations are notbeing met are considered as defaults in accordance with internal management rules.
Although Toyota considers the allowance for credit losses on finance receivables to be adequate based on
information currently available, additional provisions may be necessary due to (i) changes in management
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. Future changes in the economy that
impact the consumer confidence such as increasing interest rates and a rise in the unemployment rate as well as
higher debt balances, coupled with deterioration in actual and expected used vehicle values, could negatively
affect future operating results of the financial services operations.
Inventories Inventories are valued at cost, not in excess of net realizable value. Net realizable value is the estimatedselling price in the ordinary course of business less the estimated original cost and estimated selling expense to
product completion. The cost of inventories includes purchase costs, conversion costs and other costs incurred inbringing the inventories to their present location and condition. The cost is determined principally by using theweighted-average method.
Property, plant and equipment Property, plant and equipment is measured based on the cost model and carried at its cost less accumulated
depreciation and impairment losses. Expenditures relating to major renewals and improvements are capitalized;
minor replacements, maintenance and repairs are charged to current operations as incurred. Depreciation ofproperty, plant and equipment, except for land that is not subject to depreciation, is calculated on the straight-line
method over the estimated useful life of the respective assets according to general class, type of structure and use.
The estimated useful lives range from 2 to 65 years for buildings and from 2 to 20 years for machinery andequipment.
The depreciation method, useful lives and residual values of property, plant and equipment are reviewed
annually at each fiscal year end, and adopted prospectively, if applicable.
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 on a straight-line method over the lease term,
generally from 2 to 5 years, to the estimated residual value. Incremental direct costs incurred in connection withthe acquisition of lease contracts are capitalized and amortized on a straight-line method over the lease term.
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 evaluates at the end ofeach reporting period the estimated residual value to cover probable estimated losses related to unguaranteed
residual values on its owned portfolio. The estimate is calculated considering projected vehicle return rates andprojected loss severity. Factors considered in the determination 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. Toyota evaluates the foregoing factors, develops several potential loss scenarios, andevaluates the estimated residual value to determine whether it is considered adequate to cover the probable rangeof losses.
F-18

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
By evaluating estimated residual value, Toyota reflects in depreciation the amount it considers to beappropriate in relation to the estimated losses on its owned portfolio.
Intangible assets Intangible assets are measured based on the cost model and carried at their cost less accumulated
amortization and impairment losses.
The estimated useful lives and the amortization method of intangible assets are reviewed annually at eachfiscal year end, and adopted prospectively, if appropriate.
(1) Capitalized development cost
Development expenditure for a product is capitalized only when there is a technical and commercial
feasibility of completing the development, Toyota has the intention, ability and sufficient resources to use theoutcome of the development, it is probable that the outcome will generate a future economic benefit, and the cost
can be measured reliably.
Capitalized development cost is amortized using the straight-line method over the expected product life
cycle of the developed product ranging mainly from 5 to 10 years.
(2) Other intangible assets
Other intangible assets mainly consist of software for internal use and amortized using the straight-line
method over their estimated useful lives, mainly 5 years. Goodwill is not material to Toyota’s consolidated
statement of financial position.
Impairment of non-financial assets At the end of the reporting period, the carrying amount of non-financial assets other than inventories anddeferred tax assets are assessed to determine whether or not there is any indication of impairment. If there is suchan indication, the recoverable amount of such an asset or a cash-generating unit is estimated. An impairment loss
would be recognized when the carrying amount of an asset or a cash-generating unit exceeds the estimateddiscounted cash flows expected to result from the use of the assets and its eventual disposition. The amount of
the impairment loss to be recorded is calculated by the excess of the carrying amount of the assets over its
recoverable amount.
Leases At the inception of a contract, Toyota assesses whether the contract is, or contains, a lease.
(1) Lessee
Toyota recognizes a right of use asset and a lease liability at the lease commencement date. The cost of theright of use asset is measured at the amount of the initial measurement of the lease liability by adjusting any lease
payments made or before the commencement date. Lease liability is initially measured at the present value of thelease payments that are not paid as of the commencement date.

F-19

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
After the commencement date, Toyota applies a cost model and subsequently depreciates the right of use
asset using a straight-line method from the commencement date to the earlier of the end of the useful life of theright of use asset or the end of the lease term. Lease liability is measured at amortized cost using the effective
interest method. In the consolidated statement of financial position, lease liability is included in short-term andlong-term debt. Interest on the lease liability in each period during the lease term is the amount that produces aconstant periodic rate of interest on the remaining balance of the lease liability and recognized in profit or loss
over the lease term.
Many lease contracts relating to land and buildings entered into by Toyota include extension options thatcan be exercisable by Toyota as lessee for various purposes, such as to ensure business flexibility. Toyota
assesses whether it is reasonably certain to exercise an extension option, and if it assesses it to be reasonably
certain, the extension option is included in the lease term.
Toyota recognizes the lease payments associated with lease terms of 12 months or less as an expense on astraight-line basis over the lease term.
(2) Lessor
With respect to lessor lease transactions, Toyota determines at the commencement of the lease whether eachlease is a finance lease or operating lease.
A lease is classified as a finance lease if it transfers substantially all of the risks and rewards incidental tothe ownership of an underlying asset. Otherwise leases are classified as operating leases.
Toyota recognizes the operating lease payments in profit or loss on a straight-line basis over the lease term.
Employee benefit obligations Toyota has both defined benefit and defined contribution plans for employees’ retirement benefits.
(1) Defined benefit plan
The present value of defined benefit obligations and service cost are principally determined for each planusing the projected unit credit method. The net defined benefit liability (asset) is the present value of the defined
benefit obligations less the fair value of plan assets. Current service cost and net interest on the net defined
benefit liability (asset) are recognized as net income (loss) on the statement of net income.
Past service cost is recognized in profit or loss upon occurrence.
Toyota recognizes the difference arising from remeasurement of the net defined benefit liability (asset)
including actuarial gains and losses in other comprehensive income when it is incurred and reclassifies it
immediately to retained earnings.
(2) Defined contribution plan
For defined contribution plans, when the employees render services, the contribution payables arerecognized in profit or loss.

F-20

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Liabilities for quality assurance 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. 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 isprimarily based on historical experience of product failures as well as current information on repair costs. An
estimate of warranty claim accrued for each fiscal year is calculated based on the estimate of warranty claim perunit. The estimate of warranty claim per unit is calculated comprehensively by dividing the actual amounts ofwarranty claim by the number of sales units for the fiscal year.
Toyota accrues for costs of recalls and other safety measures, as well as product warranty cost describedabove. Toyota generally measures such “liabilities for recalls and other safety measures” at the time of vehicle
sales comprehensively by aggregate sales of various models in a certain period by geographical regions.
However, when circumstances warrant, Toyota measures “liabilities for a particular recall or other safetymeasure” using an individual model when they are probable and reasonably estimable.
The portion of “liabilities for recalls and other safety measures” recorded in the consolidated statement offinancial position is calculated comprehensively based on the “expected liability for the cost of recalls and othersafety measures” in consideration of the “accumulated amount of repair cost paid”. As such, this liability isevaluated every period based on new data and are adjusted as appropriate. Toyota calculates these liabilities forunits 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 comprehensively at the time of vehicle saleand actual payment on individual recalls and other safety measures mainly include actual cost of recalls andsafety measures during 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. Such differences are
considered as part of our estimation process for future recalls and other safety measures.
Liabilities for product warranties and liabilities for recalls and other safety measures have been combined
into “Liabilities for quality assurance” in the consolidated statement of financial position. Product warranty costs
and costs of recalls and other safety measures are included in cost of products sold in the consolidated statementof income.
The foregoing evaluations are inherently uncertain, as they require material estimates as described above.
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.

F-21

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Revenue recognition In the automotive operations, performance obligations are considered to be satisfied when completed
vehicles and parts are delivered to the agreed locations with dealers. For parts for production, it is when they areloaded on a ship or delivered to manufacturing companies. We do not have any material significant payment
terms as payment is received at or shortly after the point of sale.
Toyota’s sales incentive programs principally consist of cash payments to dealers calculated based on total
vehicle volume or vehicle unit sales of certain models sold by a dealer during a certain period of time. Toyota
accrues these incentives as revenue reductions upon the sale of a vehicle corresponding to the program by theamount determined in the related incentive program utilizing the most likely outcome method.
The sale of certain vehicles includes a contractual right, which entitles customers to free vehicle
maintenance. We use an observable price to determine the stand-alone selling price for separate performanceobligations or a cost plus margin approach when one is not available. Such revenues from free maintenancecontracts are deferred and recognized as revenue over the period of the contract in proportion to the costs
expected to be incurred in satisfying the obligations under the contract.
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 accordancewith lease accounting. The underlying vehicles of these transactions are recorded as assets and are depreciated inaccordance with Toyota’s depreciation policy.
Interest income from financial services is recognized using the effective interest method. Revenues fromoperating leases are recognized on a straight-line basis over the lease term.
If the period between satisfaction of the performance obligation and receipt of consideration is expected to
be within one year or less, as a practical expedient, we do not adjust the promised amount of consideration for theeffects of a significant financing component.
Revenue is recognized net of any taxes collected from customers and subsequently remitted to governmental
authorities.
Income taxes Income tax expenses are presented as the aggregate amount of current taxes and deferred taxes.
Deferred tax assets and deferred tax liabilities are recognized for future tax consequences attributable totemporary differences between the carrying amount of assets or liabilities in the consolidated statement offinancial position and the tax base of the assets or liabilities and carryforwards of unused tax losses and tax
credits.
Deferred tax assets are recognized for all future deductible amounts, to the extent that it is probable that wewill have sufficient profit to utilize the benefit of future deductible amounts.
Deferred tax liabilities for deductible temporary differences arising from investments in subsidiaries,
associates, and interest in joint ventures are recognized in principle. However, they are not recognized when
Toyota is able to control the timing of the reversal of the temporary difference and it is probable that thetemporary difference will not reverse in the foreseeable future.
F-22

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Deferred tax assets and deferred tax liabilities are measured at the tax rates that are expected to apply in the
period when the assets are realized or the liabilities are settled, based on the tax rates and tax laws enacted or
substantively enacted at the end of the reporting period. The measurement of deferred tax assets and deferred tax
liabilities reflects the tax consequences that would follow from the manner in which Toyota expects, at the end ofreporting period, to recover or settle the carrying amount of its assets and liabilities.
Earnings per share attributable to Toyota Motor Corporation Basic earnings per share attributable to Toyota Motor Corporation is calculated by dividing net income
attributable to Toyota Motor Corporation by the weighted-average number of common shares outstanding withadjustment for treasury stock during the reporting period. Diluted earnings per share attributable to Toyota Motor
Corporation is calculated by dividing net income attributable to Toyota Motor Corporation by the weightedaverage number of common shares outstanding taking into consideration the effect of dilutive securities.
New accounting standards and interpretations not yet adopted None of new or revised standards and interpretations that have been issued as of the date of approval of theconsolidated financial statements but have not yet been adopted by Toyota have a significant effect on the
consolidated financial statements.
4. Significant accounting judgments and estimates
The preparation of the consolidated financial statements in conformity with IFRS requires management tomake judgments, estimates, and assumptions that affect the application of accounting policies, the reported
amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities.
Actual results could differ from these estimates. These estimates and underlying assumptions are reviewed on acontinuous basis. Changes in these accounting estimates are recognized in the period in which the estimates wererevised and in any future periods affected.
Information about important estimation and judgments that have significant effects on the amounts
recognized in the consolidated financial statements is as follows:
Scope of subsidiaries, associates, and joint ventures (Note 3 “Basis of consolidation”)
Intangible assets incurred by research and development (Note 3 “Intangible assets”)
Information about accounting estimates and assumption that affect the application of accounting policies
and the reported amounts of assets and liabilities, and financial statements based on IFRS is as follows:
Liabilities for quality assurance (Note 3 “Liabilities for quality assurance” and Note 24)
Allowance for credit losses on finance receivables (Note 3 “Allowance for credit losses on financereceivables” and Note 19 (2))
Impairment of non-financial assets (Note 3 “Impairment of non-financial assets” and Note 12)
Employee benefit obligations (Note 3 “Employee benefit obligations” and Note 23)
Fair value measurements (Note 21)
Recoverability of deferred tax assets (Note 3 “Income taxes” and Note 15)

F-23

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
5. Segment information(1) Outline of reporting segments
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,
minivans, compact cars, SUVs, trucks and related parts and accessories. The Financial services segment consists
primarily of financing and vehicle leasing operations to assist in the merchandising of Toyota’s products as wellas other products. The All other segment includes telecommunications and other businesses.
(2) Segment information
As of and for the year ended March 31, 2020
Yen in millions
Inter-segment
Elimination/
UnallocatedAmountFinancialservices

All other

Sales revenues
Revenues from external customers . . . . . 26,770,379
Inter-segment revenues and transfers . . .
29,3642,172,854
20,316923,314581,606—
29,866,547(631,286)—

Total . . . . . . . . . . . . . . . . . . . . . . . .
Operating expenses . . . . . . . . . . . . . . . . . . . . .

26,799,743
24,786,609

2,193,170
1,909,429

1,504,920
1,401,564(631,286) 29,866,547(630,287) 27,467,315

Operating income . . . . . . . . . . . . . . . . . . . . . .

2,013,134

283,742

103,356(999)

2,399,232

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments accounted for using the equity
method . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . .
Capital expenditures . . . . . . . . . . . . . . . . . . . .

19,450,102

25,390,541

2,119,951

7,011,769

53,972,363

3,810,310
821,958
1,437,932

65,471
739,484
2,061,334

283,355
33,90568,363

138,428—
14,8184,297,564
1,595,347
3,582,448

Automotive

F-24

Consolidated

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
As of and for the year ended March 31, 2021
Yen in millions
Inter-segment
Elimination/
UnallocatedAmountFinancialservices

All other

Sales revenues
Revenues from external customers . . . . . 24,597,846
Inter-segment revenues and transfers . . .
53,706

2,137,195
25,042479,553
572,812—27,214,594(651,560)—

Total . . . . . . . . . . . . . . . . . . . . . . . .
Operating expenses . . . . . . . . . . . . . . . . . . . . .

24,651,552
23,044,391

2,162,237
1,666,645

1,052,365967,015(651,560) 27,214,594(661,205) 25,016,845

Operating income . . . . . . . . . . . . . . . . . . . . . .

1,607,161

495,593

85,3509,645

2,197,748

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments accounted for using the equity
method . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . .
Capital expenditures . . . . . . . . . . . . . . . . . . . .

21,412,034

28,275,239

2,720,720

9,859,147

62,267,140

3,698,990
893,704
1,341,032

71,336
715,757
2,151,455

248,81434,82976,370141,664—
40,843

4,160,803
1,644,290
3,609,699

Inter-segment
Elimination/
UnallocatedAmountConsolidated

Automotive

Consolidated

As of and for the year ended March 31, 2022
Yen in millions

Financialservices

All other

Sales revenues
Revenues from external customers . . . . . 28,531,993
Inter-segment revenues and transfers . . .
73,7452,306,079
17,947541,436
588,441—
31,379,507(680,133)—

Total . . . . . . . . . . . . . . . . . . . . . . . .
Operating expenses . . . . . . . . . . . . . . . . . . . . .

28,605,738
26,321,448

2,324,026
1,667,025

1,129,876
1,087,575(680,133) 31,379,507(692,237) 28,383,811

Operating income . . . . . . . . . . . . . . . . . . . . . .

2,284,290

657,001

42,302

12,104

2,995,697

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments accounted for using the equity
method . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . .
Capital expenditures . . . . . . . . . . . . . . . . . . . .

24,341,737

31,681,472

3,091,011

8,574,551

67,688,771

4,354,085
1,026,834
1,422,429

79,414
761,801
2,156,339

258,750
33,24551,200145,646—(18,381)

4,837,895
1,821,880
3,611,587

Automotive

Accounting policies applied by each segment is in conformity with those of Toyota’s consolidated financial
statements. Transfers between industry segments are made in accordance with terms and conditions in theordinary course of business.
Unallocated amounts included in assets represent assets held for corporate purpose, which mainly consist of
cash and cash equivalents and financial assets measured at fair value through other comprehensive income, andthe balances as of March 31, 2020, 2021 and 2022 are ¥8,584,459 million, ¥11,344,879 million and¥10,020,460 million, respectively.

F-25

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(3) Consolidated Financial Statements on Non-Financial Services Businesses and Financial Services
Business
The financial data below presents separately Toyota’s non-financial services and financial services
businesses.
(i) Consolidated Statement of Financial Position on Non-Financial Services Businesses and Financial
Services BusinessYen in millions
March 31, 2021 March 31, 2022

Assets(Non-Financial Services Businesses)
Current assets
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade accounts and other receivable . . . . . . . . . . . . . . . . . . . . . . . . .
Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,274,149
3,063,314
3,778,119
2,888,028
664,097

4,299,522
3,184,782
2,028,649
3,821,356
746,134

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

13,667,707

14,080,444

Non-current assets
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,805,166
14,721,626

7,302,017
15,769,015

Total non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21,526,792

23,071,032

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

35,194,499

37,151,476(Financial Services Business)
Current assets
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade accounts and other receivable . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables related to financial services . . . . . . . . . . . . . . . . . . . . .
Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,826,707
216,767
6,756,189
1,021,738
198,068

1,814,133
206,588
7,181,327
1,058,620
221,738

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

10,019,469

10,482,407

Non-current assets
Receivables related to financial services . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12,449,525
4,605,988
1,200,256

14,583,130
5,024,625
1,591,311

Total non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18,255,770

21,199,065

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

28,275,239

31,681,472(Elimination)
Elimination of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1,202,599)(1,144,177)

62,267,140

67,688,771(Consolidated)
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Note: Assets in non-financial services include unallocated corporate assets.
F-26

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Yen in millions
March 31, 2021 March 31, 2022

Liabilities(Non-Financial Services Businesses)
Current liabilities
Trade accounts and other payables . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term and current portion of long-term debt . . . . . . . . . . . . . .
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,801,753
2,348,514
1,322,353
262,7272,650,433

4,023,857
1,041,557
1,421,194
695,8882,778,172

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

10,385,779

9,960,668

Non-current liabilities
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retirement benefit liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,523,134
1,015,156
1,509,535

1,538,884
1,004,558
1,830,146

Total non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,047,825

4,373,588

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14,433,605

14,334,256(Financial Services Business)
Current liabilities
Trade accounts and other payables . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term and current portion of long-term debt . . . . . . . . . . . . . .
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

510,670
10,286,251
102,200
88,153
1,002,615

477,550
10,576,910
124,088
130,927
1,414,606

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

11,989,889

12,724,080

Non-current liabilities
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retirement benefit liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12,044,994
19,940696,294

13,882,650
18,190722,257

Total non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12,761,228

14,623,097

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24,751,117

27,347,177(Elimination)
Elimination of liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1,205,911)(1,147,482)

37,978,811

40,533,951(Consolidated) Total Toyota Motor Corporation shareholders’ equity . . . . . .

23,404,547

26,245,969(Consolidated) Non-controlling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

883,782

908,851(Consolidated) Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24,288,329

27,154,820(Consolidated) Total liabilities and shareholders’ equity . . . . . . . . . . . . . . . . .

62,267,140

67,688,771(Consolidated)
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shareholders’ equity

F-27

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(ii) Consolidated Statement of Income on Non-Financial Services Businesses and Financial Services
Business
For the year ended
March 31, 2020

Yen in millions
For the year ended
March 31, 2021

For the year ended
March 31, 2022

(Non-Financial Services Businesses)
Sales revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative . . . . . . . . . . . . . .

27,710,128
23,104,047
2,492,039

25,103,190
21,199,915
2,206,205

29,104,564
24,250,860
2,518,182

Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,114,042

1,697,070

2,335,522

Other income (loss), net . . . . . . . . . . . . . . . . . . . . . . .

394,278

742,785

998,001

Income before income taxes . . . . . . . . . . . . . . . . . . .

2,508,319

2,439,855

3,333,522

Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . .

615,546

528,413944,594

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,892,774

1,911,442

2,388,928

Net income attributable to
Toyota Motor Corporation . . . . . . . . . . . . . . . . .
Non-controlling interests . . . . . . . . . . . . . . . . . .

1,818,022
74,752

1,875,467
35,9752,369,399
19,529(Financial Services Business)
Sales revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative . . . . . . . . . . . . . .

2,193,170
1,397,344
512,085

2,162,237
1,202,277
464,368

2,324,026
1,178,509
488,517

Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . .

283,742495,593

657,001

Other income (loss), net . . . . . . . . . . . . . . . . . . . . . . .

835(3,090)

16

Income before income taxes . . . . . . . . . . . . . . . . . . .

284,577

492,503

657,017

Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . .

66,284

121,536

171,327

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

218,293

370,967

485,690

Net income attributable to
Toyota Motor Corporation . . . . . . . . . . . . . . . . .
Non-controlling interests . . . . . . . . . . . . . . . . . .

218,060
233

369,824
1,143

480,716
4,974(Elimination)
Elimination of net income . . . . . . . . . . . . . . . . . . . . .
(Consolidated)

59

(30)

(4)

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,111,125

2,282,378

2,874,614

Net income attributable to
Toyota Motor Corporation . . . . . . . . . . . . . . . . .
Non-controlling interests . . . . . . . . . . . . . . . . . .

2,036,140
74,9852,245,261
37,1182,850,110
24,504

F-28

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(iii) Consolidated Statement of Cash Flows on Non-Financial Services Businesses and Financial Services
Business
Yen in millions
For the year ended For the year ended For the year ended
March 31, 2020
March 31, 2021
March 31, 2022

(Non-Financial Services Businesses)
Cash flows from operating activities
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . .
Share of profit (loss) of investments accounted for using
the equity method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in operating assets and liabilities, and other . . . .
Interest received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes paid, net of refunds . . . . . . . . . . . . . . . . . . . .
Net cash provided by (used in) operating activities . . . . . .
Cash flows from investing activities
Additions to fixed assets excluding equipment leased toothers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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 . . . . . .
Additions to intangible assets . . . . . . . . . . . . . . . . . . . . . . .
Additions to public and corporate bonds and stocks . . . . .
Proceeds from sales of public and corporate bonds andstocks and upon maturity of public and corporate
bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by (used in) investing activities . . . . . .

1,892,774
855,863

1,911,442
928,533

2,388,928
1,060,079(298,494)
615,546(154,164)
141,975
316,610(46,217)(700,528)(345,374)
528,413(262,407)
123,606
290,618(35,371)(505,260)(552,515)
944,594(572,082)
100,118
342,646(40,780)(544,887)

2,623,364

2,634,200

3,126,101(1,222,821)(163,592)(1,203,662)(142,217)(1,186,900)(151,456)

46,76549,892(299,253)(2,220,217)

38,57546,461(271,274)(2,511,346)

36,21945,183(335,436)(1,904,588)

2,249,367(95,852)

1,982,302(1,339,372)

1,989,345
1,856,069(1,655,711)(3,400,534)

348,436

Cash flows from financing activities
Increase (decrease) in short-term debt . . . . . . . . . . . . . . . .
Proceeds from long-term debt . . . . . . . . . . . . . . . . . . . . . .
Payments of long-term debt . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid to Toyota Motor Corporation commonshareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid to non-controlling interests . . . . . . . . . . . .
Reissuance (repurchase) of treasury stock . . . . . . . . . . . . .

45,288247,048(163,486)

213,716
1,662,593(170,373)(164,899)
513,371(1,818,653)(618,801)(50,903)(476,128)(625,514)(34,840)
199,884(709,872)(49,629)(404,718)

Net cash provided by (used in) financing activities . . . . . .

(1,016,982)

1,245,465(2,634,401)

Effect of exchange rate changes on cash and cash
equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(86,553)

112,588

185,237

Net increase (decrease) in cash and cash equivalents . . . . . . . . .

(135,882)

591,719

1,025,373

Cash and cash equivalents at beginning of year . . . . . . . . . . . . .

2,818,313

2,682,431

3,274,149

Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . .

2,682,431

3,274,149

4,299,522

F-29

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Yen in millions
For the year ended For the year ended For the year ended
March 31, 2020
March 31, 2021
March 31, 2022

(Financial Services Business)
Cash flows from operating activities
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . .
Interest income and interest costs related to financial
services, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share of profit (loss) of investments accounted for using
the equity method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in operating assets and liabilities, and other . . . .
Interest received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes paid, net of refunds . . . . . . . . . . . . . . . . . . . .
Net cash provided by (used in) operating activities . . . . . .
Cash flows from investing activities
Additions to fixed assets excluding equipment leased toothers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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 . . . . . .
Additions to intangible assets . . . . . . . . . . . . . . . . . . . . . . .
Additions to public and corporate bonds and stocks . . . . .
Proceeds from sales of public and corporate bonds andstocks and upon maturity of public and corporate
bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

218,293
739,484

370,967
715,757

485,690
761,801(200,727)(241,016)(360,837)(11,753)
66,284(1,081,707)
664,167
1,799(467,774)(76,994)(5,655)
121,536(780,798)
661,272
3,901(431,939)(304,856)(7,831)
171,327(623,051)
742,364
4,740(384,006)(264,876)(148,928)

109,168

525,321(23,472)(2,031,699)(10,240)(2,133,378)(10,366)(2,135,437)

1,184
1,341,301(5,739)(185,120)

1,967
1,325,238(7,173)(217,825)

1,530
1,496,949(10,650)(523,323)

126,281(22,213)79,616(35,893)

213,291
113,635

Net cash provided by (used in) investing activities . . . . . .

(799,477)(997,688)(854,370)

Cash flows from financing activities
Increase (decrease) in short-term debt . . . . . . . . . . . . . . . .
Proceeds from long-term debt . . . . . . . . . . . . . . . . . . . . . .
Payments of long-term debt . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid to non-controlling interests . . . . . . . . . . . .

514,196
5,458,616(4,334,374)(4,052)(1,517,259)
8,043,141(5,332,573)(1,757)(488,495)
7,800,854(7,142,750)(2,094)

Net cash provided by (used in) financing activities . . . . . .

1,634,387

1,191,551

167,516

Effect of exchange rate changes on cash and cash
equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(54,454)

107,657

148,958

Net increase (decrease) in cash and cash equivalents . . . . . . . . .

631,527

410,688(12,575)

Cash and cash equivalents at beginning of year . . . . . . . . . . . . .

784,492

1,416,020

1,826,707

Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . .

1,416,020

1,826,707

1,814,133(Consolidated)
Effect of exchange rate changes on cash and cash
equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(141,007)

220,245

334,195

Net increase (decrease) in cash and cash equivalents . . . . . . . . .

495,645

1,002,406

1,012,798

Cash and cash equivalents at beginning of year . . . . . . . . . . . . .

3,602,805

4,098,450

5,100,857

Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . .

4,098,450

5,100,857

6,113,655

F-30

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(4) Geographic information
As of and for the year ended March 31, 2020
Yen in millions

Japan

Sales revenues
Revenues fromexternalcustomers . . . . . . . .
Inter-segment
revenues andtransfers . . . . . . . . .

NorthAmerica

Europe

Asia

Other

9,503,238 10,419,869 3,133,227 4,785,489 2,024,724

6,938,614

222,165

222,130

507,741

89,387

Total . . . . . . . . . 16,441,852 10,642,034 3,355,357 5,293,231 2,114,111
Operating expenses . . . . . . 14,856,576 10,388,830 3,211,540 4,929,684 2,030,110
Operating income . . . . . . .

1,585,276

253,205

143,817363,547

Inter-segment
Elimination/
UnallocatedAmountConsolidated—(7,980,038)

29,866,547—(7,980,038) 29,866,547(7,949,425) 27,467,315

84,001(30,613) 2,399,232

Total assets . . . . . . . . . . . . 18,221,453 18,579,078 4,264,022 5,307,513 2,881,536
Non-current assets . . . . . . . 4,697,388 5,517,466 570,563 708,066 428,707

4,718,761 53,972,363— 11,922,190

As of and for the year ended March 31, 2021
Yen in millions

Japan

Sales revenues
Revenues fromexternalcustomers . . . . . . . .
Inter-segment
revenues andtransfers . . . . . . . . .

8,587,193

6,361,739

Total . . . . . . . . . 14,948,931
Operating expenses . . . . . . 13,799,715
Operating income . . . . . . .

1,149,217

North
America

Europe

Asia

Other

9,325,950 2,968,289 4,555,897 1,777,266

165,853

166,200

489,398

95,6309,491,803 3,134,489 5,045,295 1,872,895
9,090,442 3,026,518 4,609,354 1,813,048
401,361

107,971435,940

59,847

Total assets . . . . . . . . . . . . 19,674,666 20,138,715 5,074,409 6,548,343 3,469,635
Non-current assets . . . . . . . 5,232,862 5,705,770 751,245 896,542 461,723

F-31Inter-segment
Elimination/
UnallocatedAmountConsolidated—(7,278,820)

27,214,594—(7,278,820) 27,214,594(7,322,232) 25,016,845
43,413

2,197,748

7,361,372 62,267,140— 13,048,143

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
As of and for the year ended March 31, 2022
Yen in millions

Japan

Sales revenues
Revenues fromexternalcustomers . . . . . . .
Inter-segment
revenues andtransfers . . . . . . . .

NorthAmerica

Europe

Asia

Other

Consolidated—

31,379,507

8,214,740 10,897,946 3,692,214 5,778,115 2,796,493

7,776,696

268,534

175,633

752,452

131,690

Total . . . . . . . . . 15,991,436 11,166,479 3,867,847 6,530,566 2,928,183
Operating expenses . . . . . 14,567,991 10,600,695 3,704,874 5,858,216 2,690,014
Operating income . . . . . .

Inter-segment
Elimination/
UnallocatedAmount1,423,445

565,784

162,973

672,350(9,105,004)—(9,105,004) 31,379,507(9,037,980) 28,383,811

238,169(67,024) 2,995,697

Total assets . . . . . . . . . . . 21,502,155 23,353,812 5,711,271 7,461,812 4,309,248
Non-current assets . . . . . . 5,501,046 6,251,499 891,146 977,235 537,631

5,350,474 67,688,771— 14,158,559“Other” consists of Central and South America, Oceania, Africa and the Middle East.
Non-current assets do not include financial instruments, deferred tax assets, net defined benefit assets andrights arising under insurance contracts.
The above amounts are aggregated by region based on the location of the country where TMC orconsolidated subsidiaries are located. Transfers between geographic areas are made in accordance with terms andconditions in the ordinary course of business.
Unallocated amounts included in assets represent assets held for corporate purpose, which mainly consist of
cash and cash equivalents and financial assets measured at fair value through other comprehensive income, andthe balances as March 31, 2020, 2021 and 2022 are ¥8,584,459 million, ¥11,344,879 million and¥10,020,460 million, respectively.
(5) Sales revenues by location of external customers
In addition to the disclosure requirements under IFRS, Toyota discloses this information in order to provide
financial statements users with valuable information.
Yen in millions
For the years ended March 31,
2020
2021
2022

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

7,229,849
10,546,655
2,932,324
5,217,857
3,939,863

6,820,590
9,437,314
2,734,152
5,057,397
3,165,141

6,425,184
10,953,472
3,495,785
6,017,646
4,487,420

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

29,866,547

27,214,594

31,379,507“Other” consists of Central and South America, Oceania, Africa and the Middle East, etc.
F-32

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
6. Cash and cash equivalents
Cash and cash equivalents consist of the following:
Yen in millions
March 31,
2021
2022

Cash and deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Negotiable certificate of deposit and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,346,401
1,754,456

4,630,882
1,482,773

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

5,100,857

6,113,655

7. Trade accounts and other receivables
Trade accounts and other receivables consist of the following:
Yen in millions
March 31,
2021
2022

Accounts and notes receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,301,976
688,352(31,586)

2,466,398
716,558(40,124)

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

2,958,742

3,142,832

Trade accounts and other receivables which are unconditional rights to considerations are classified as
financial assets measured at amortized cost.
The changes in the allowance for doubtful accounts consist of the following:
Yen in millions
For the years ended
March 31,
2021
2022

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

90,266
7,780(3,112)
2,444

97,378
10,649(1,239)4,005

Allowance for doubtful accounts at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

97,378110,793“Other” includes currency translation adjustments.
A portion of the allowance for doubtful accounts is attributed to certain non-current receivable balances
which are reported as other financial assets under non-current assets.

F-33

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
8. Finance receivables
Finance receivables consist of the following:
Yen in millions
March 31,
2021
2022

Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and other dealer loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15,048,433
2,031,280
3,185,484

17,647,440
2,347,941
2,904,216

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

20,265,197

22,899,597

Deferred origination costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less - Unearned income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less - Allowance for credit losses
Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and other dealer loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

270,406
328,792(1,068,587) (1,172,007)(198,204)(33,455)(29,642)(230,104)(36,985)(24,836)

Total finance receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19,205,715

21,764,457

Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,756,189
12,449,525

7,181,327
14,583,130

Total finance receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19,205,715

21,764,457

Finance receivables were geographically distributed as follows: in North America 54.6%, in Europe 13.2%,
in Asia 13.5%, in Japan 8.3% and in Other 10.4% as of March 31, 2021, and in North America 55.0%, in Europe
13.3%, in Asia 12.9%, in Japan 7.3% and in Other 11.5% as of March 31, 2022.
Finance receivables are classified as financial assets measured at amortized cost.
The contractual maturity of retail receivables, future lease payments for finance leases receivables,
wholesale receivables and other dealer loans are as follows:

Retail

Yen in millions
March 31, 2021
Wholesale and other
Finance leases
dealer loans

Within 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Between 1 and 2 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Between 2 and 3 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Between 3 and 4 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Between 4 and 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Later than 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,196,724
3,482,932
2,906,322
2,235,116
1,404,273
823,066

540,759
415,673
303,166
171,142
69,241
11,597

1,995,544
348,787
231,969
137,331
145,817
326,037

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

15,048,433

1,511,577

3,185,484

F-34

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Retail

Yen in millions
March 31, 2022
Wholesale and other
Finance leases
dealer loans

Within 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Between 1 and 2 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Between 2 and 3 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Between 3 and 4 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Between 4 and 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Later than 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,276,853
3,988,650
3,338,910
2,546,568
1,487,397
1,009,062

639,493482,368
367,680
198,789
68,092
14,6801,640,995
319,847
240,727
161,717
133,286
407,643

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

17,647,440

1,771,102

2,904,216

Finance leases receivables consist of the following:
Yen in millions
March 31,
2021
2022

Lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Estimated unguaranteed residual values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,511,577
519,703

1,771,102
576,839

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

2,031,280

2,347,941

Deferred origination costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less - Unearned income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less - Allowance for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13,701(169,098)(33,455)

15,807(190,954)(36,985)

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

1,842,429

2,135,809

F-35

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
9. Other financial assets
Other financial assets consist of the following:
Yen in millions
March 31,
2021
2022

Financial assets measured at amortized cost
Time deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial assets measured at fair value through profit or loss
Public and corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial assets measured at fair value through other comprehensive income
Public and corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,566,221
554,997505,695
680,199

59,600317,101
282,364
489,824

159,186
149,890
419,173
465,801

6,075,498
2,945,780
7,986

6,302,719
3,332,209
9,644

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

13,299,371

12,024,515

Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,215,457
9,083,914

2,507,248
9,517,267

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

13,299,371

12,024,515

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
non-performance by counterparties on financial instruments, it does not anticipate significant losses due to thenature of 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.
Public and corporate bonds included in financial assets measured at fair value through other comprehensive
income include securities loaned of ¥1,757,903 million and ¥2,198,396 million as of March 31, 2021 and 2022,
respectively.

F-36

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Major securities included in stocks measured at fair value through other comprehensive income as ofMarch 31, 2021 and 2022 are as follows:
Yen in millions
March 31,
2021
2022

Issue

KDDI CORPORATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
NIPPON TELEGRAPH AND TELEPHONE CORPORATION . . . . . . . . . . . . . . . . . .
MS&AD Insurance Group Holdings, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
HO TAI MOTOR CO., LTD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mitsubishi UFJ Financial Group, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,075,517
229,564
173,171
126,049
105,256

1,268,762
286,385
209,318
142,002134,248

To facilitate the efficient and effective utilization of assets, Toyota derecognizes stocks measured at fairvalue through other comprehensive income by way of sale. Fair value and total accumulated othercomprehensive income at derecognition are as follows:
Yen in millions
For the years ended
March 31,
2021
2022

Total fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

40,903
17,323

66,90627,861

10. Inventories
Inventories consist of the following:
Yen in millions
March 31,
2021
2022

Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Work in process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplies and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,749,415
350,308
644,779
143,526

2,012,243
547,810
1,107,558
153,745

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

2,888,028

3,821,356

11. Investments accounted for using the equity method
Equity in associates and joint ventures is as follows:
Yen in millions
March 31,
2021
2022

Associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,467,503
693,300

3,926,267
911,628

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

4,160,803

4,837,895

F-37

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The combined information of investments accounted for using the equity method (total value of TMC’s
interests) is as follows:
Yen in millions
For the years ended March 31,
2020
2021
2022

Net income
Associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

195,569
114,678

190,998
160,031324,480
235,866

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

310,247

351,029

560,346

Other comprehensive income, net of tax
Associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

42,904(15,589)

50,14338,501

241,264
66,187

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

27,31588,644

307,451

Comprehensive income
Associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

238,473
99,089241,141
198,532

565,744
302,053

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

337,562439,673

867,798

12. Property, plant and equipment
The changes in cost and accumulated depreciation and impairment losses are as follows:(Cost)Land

Buildings

Balance as of April 1, 2020 . . . . . . 1,318,964 4,741,451
Additions . . . . . . . . . . . . . . . .
Sales or disposal . . . . . . . . . . .
Reclassification fromconstruction in progress . . .
Foreign currency translation
adjustments . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . .

Yen in millions
Vehicles andMachinery and equipment on Construction
equipment
operating leases in progress

11,979,449

Total

5,928,833

517,460

24,486,156
3,448,655(2,689,893)

22,720(13,005)

90,363(36,586)

414,934
2,281,434(472,197) (2,163,259)

639,205(4,846)

6,890

101,216

485,705537(594,347)—

13,448(3,979)57,95244,811

262,808
83,252

180,976(24,799)

20,493
97,910535,677
197,195

Balance as of March 31, 2021 . . . . 1,345,037 4,999,206

12,753,951

6,203,721

675,875

25,977,791
3,502,541(2,945,187)

Additions . . . . . . . . . . . . . . . .
Sales or disposal . . . . . . . . . . .
Reclassification fromconstruction in progress . . .
Foreign currency translation
adjustments . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . .

9,106(8,901)88,543(57,743)

481,916
2,293,189(540,775) (2,334,129)

629,786(3,639)2,310

105,581

630,896449(739,235)—

15,008(769)

138,047
10,985642,984
13,390594,933
23,06530,756(28,014)

1,421,728
18,657

Balance as of March 31, 2022 . . . . 1,361,791 5,284,620

13,982,362

6,781,229

565,528

27,975,530

F-38

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(Accumulated depreciation and impairment losses)

Land

Balance as of April 1, 2020 . . . . . .
Depreciation . . . . . . . . . . . . . .
Impairment losses . . . . . . . . .
Sales or disposal . . . . . . . . . . .
Foreign currency translation
adjustments . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . .
Balance as of March 31, 2021 . . . .
Depreciation . . . . . . . . . . . . . .
Impairment losses . . . . . . . . .
Sales or disposal . . . . . . . . . . .
Foreign currency translation
adjustments . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . .
Balance as of March 31, 2022 . . . .

Buildings

Yen in millions
Vehicles andMachinery and equipment on Construction
equipment
operating leases in progress(4,058) (3,054,551) (9,505,895) (1,386,459)

Total(1,178) (13,952,141)——
12(118,975)—
24,717(673,612)—
443,307(770,354)—
748,189—(70)—(1,562,940)(70)
1,216,226

(240)
(211)

(34,630)(6,299)(204,607)(64,468)(39,880)
81,587(50)
1,085(279,408)
11,695(4,497) (3,189,737) (10,005,275) (1,366,916)(213) (14,566,638)——30(121,431)(2,527)
48,646(788,685)(5,177)507,396(817,171)—
799,186———(1,727,287)(7,705)
1,355,259(351)(1,562)(79,026)(31,522)(461,159)(10,054)(115,693)(3,073)(24)(55)(656,252)(46,266)(6,379) (3,375,598) (10,762,953) (1,503,668)(292) (15,648,890)

Depreciation on “Property, plant and equipment” is included in “Cost of products sold” and “Selling,
general and administrative” in the consolidated statement of income.
Vehicles and equipment on operating leases consist of the following:
Yen in millions
March 31,
2021
2022

Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,190,558
Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13,164

6,766,590
14,6396,203,721 6,781,229
Less - Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,366,916) (1,503,668)
Vehicles and equipment on operating leases, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,836,805

F-39

5,277,561

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Future expenses from vehicles and equipment on operating leases are due in installments and rental income
separated is as follows:
Yen in millions
March 31,
2021
2022

Within 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Between 1 and 2 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Between 2 and 3 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Between 3 and 4 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Between 4 and 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Later than 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

857,997583,059
282,477
55,83818,873
5,706

932,882641,683
280,646
75,915
21,772
9,801

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

1,803,950

1,962,699

The future rental income as shown above should not be considered indicative of future cash collections.
13. Right of use assets and lease liabilities
The breakdown of right of use assets is as follows:
Yen in millions
March 31,
2021
2022

Types of original assets
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

46,868285,60257,67467,927
305,533
74,952

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

390,144448,412The increase in the right of use assets for the years ended on March 31, 2021 and 2022 were
¥114,394 million and ¥110,996 million, respectively.
The breakdown of main gains and losses on lessee’s leases is as follows:
Yen in millions
March 31,
2021
2022

Depreciation of right of use assets
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,277
45,852
22,307

8,660
56,262
26,293

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

75,436

91,214

Interest expense on lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,118
84,821

4,074
90,568164,375

185,856

F-40

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the years ended March 31, 2021 and 2022, the total cash outflows for lessee leases were¥133,698 million and ¥149,521 million, respectively.
The following is the maturity analysis of the total future lease payments and the adjustment to the present
value:
Yen in millions
March 31,
2021
2022

Within 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Between 1 and 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Later than 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

52,983130,917219,857

61,735
146,452
258,474

Future lease payment, total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less - Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

403,757(42,866)

466,661(45,733)

Present value of lease payment, total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

360,891

420,928

Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

47,120313,771

56,136364,792

Present value of lease payment, total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

360,891

420,928

14. Intangible assets
The carrying value of intangible assets is as follows:
Yen in millions
March 31,
2021
2022

Capitalized development costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Software and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

631,176
477,458

663,762528,204

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

1,108,634

1,191,966

F-41

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The changes in cost, accumulated amortization and impairment losses of intangible assets are as follows:(Cost)
Yen in millions
Capitalized
development costs

Software and other

Total

Balance as of April 1, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

991,675

600,716

1,592,391

Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Internally developed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sales or disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—158,246(45,779)——

62,42359,061(57,047)
6,305
56,41662,423
217,307(102,825)
6,305
56,416

Balance as of March 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,104,142

727,874

1,832,016

Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Internally developed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sales or disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—200,512(163,419)——

41,616
86,342(60,981)
25,333
7,048

41,616
286,853(224,400)
25,333
7,048

Balance as of March 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,141,234

827,232

1,968,466(Accumulated amortization and impairment losses)
Yen in millions
Capitalized
development costs

Software and other

Total

Balance as of April 1, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(366,202)(225,932)(592,134)

Amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sales or disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(152,542)—
45,779——(81,350)—
55,354(2,818)4,330(233,892)—
101,132(2,818)
4,330

Balance as of March 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . .

(472,966)(250,417)(723,382)

Amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sales or disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(167,926)—
163,419——(94,593)—
60,375(13,570)(823)(262,518)—
223,794(13,570)(823)

Balance as of March 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . .

(477,472)(299,028)(776,500)

Amortization of intangible assets is included in “Cost of products sold” and “Selling, general andadministrative” in the consolidated statement of income. There is no material internally generated intangible
assets except for capitalized development costs.

F-42

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
15. Income taxes(1) Deferred tax assets and liabilities
Significant components of deferred tax assets and liabilities are as follows:
Yen in millions
March 31,
2021
2022

Deferred tax assets
Defined benefit plan liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses and liabilities for quality assurance . . . . . . . . . . . . . . . . . . . . . .
Other accrued employees’ compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating loss carryforwards for tax purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for doubtful accounts and credit losses . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

172,237
623,247
127,339
14,26382,467
224,933
400,000

141,186
613,101
128,461
64,74085,289210,238
491,167

Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,644,486

1,734,181

Deferred tax liabilities
Changes in fair value of financial instruments measured in other comprehensive
income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Undistributed earnings of foreign subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Undistributed earnings of associates and joint ventures . . . . . . . . . . . . . . . . . . . . . .
Basis difference of acquired assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalized development costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lease transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(661,221) (725,242)(18,539)(51,888)(902,680) (1,026,027)(48,371)(63,189)(195,033) (204,741)(533,167) (468,894)(196,470) (206,791)

Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2,555,481) (2,746,773)

Net deferred tax assets and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(910,996) (1,012,592)

Of the changes in deferred tax assets and deferred tax liabilities for the years ended March 31, 2020, 2021
and 2022, the amount recognized as income tax expense in the consolidated statement of income is as follows:
Yen in millions
For the years ended March 31,
2020
2021
2022

Defined benefit plan liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16,927
Accrued expenses and liabilities for quality assurance . . . . . . . . . . . . . . . . .
(18,676)
Other accrued employees’ compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,557
Operating loss carryforwards for tax purposes . . . . . . . . . . . . . . . . . . . . . . . (295,656)
Allowance for doubtful accounts and credit losses . . . . . . . . . . . . . . . . . . . .
19,293
Property, plant and equipment and other assets . . . . . . . . . . . . . . . . . . . . . . .
(76,680)
Undistributed earnings of foreign subsidiaries . . . . . . . . . . . . . . . . . . . . . . .
1,290
Undistributed earnings of associates and joint ventures . . . . . . . . . . . . . . . .
(33,008)
Basis difference of acquired assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(10,033)
Capitalized development costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4,434)
Lease transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 286,869
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(83,216)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-43(192,767)

12,473(18,256)
3,125
1,265
6,042
4,468
6,144
47,840(18,302)(1,762)
209,972
23,104

4,203(40,761)(968)
38,119(4,902)(9,795)(33,349)(71,405)(11,270)(9,708)103,098
111,603

276,11374,864

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The deductible temporary differences, unused tax losses, and unused tax credits for which no deferred tax
asset is recognized in the statement of financial position:
Yen in millions
March 31,
2021
2022

Deductible temporary difference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Carryforwards of tax losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Carryforwards of tax credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

250,670
379,566
34,800709,204
518,385
46,306

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

665,037

1,273,894

The expected expiration date of the carryforwards of tax losses for which deferred tax assets are notrecognized are as follows:
Yen in millions
March 31,
2021
2022

Within 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Between 5 and 10 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Later than 10 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13,597
20,475345,493

4,049
136,666
377,670

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

379,566

518,385

The expected expiration date of the carryforwards of tax credit for which deferred tax assets are notrecognized are as follows:
Yen in millions
March 31,
2021
2022

Within 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Between 5 and 10 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Later than 10 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,097
2,340
27,363

8,654
9,865
27,787

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

34,80046,306Of the temporary differences in investments in foreign subsidiaries, because management intends to reinvest
undistributed earnings of foreign subsidiaries to the extent not expected to be remitted in the foreseeable future,
no deferred tax liability is recognized. As of March 31, 2021 and 2022, the temporary differences totaled¥4,362,133 million and ¥4,799,506 million, respectively, and Toyota estimates an additional deferred tax liabilityof ¥202,533 million and ¥203,229 million would be required, respectively, if the full amount of those
undistributed earnings were remitted.

F-44

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(2) Income tax expenses
The income tax expense for the years ended March 31, 2020, 2021 and 2022 consists of the following:
Yen in millions
For the years ended March 31,
2020
2021
2022

Current income tax expense:
TMC and domestic subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

484,667
4,383

403,230
522,859

672,077
518,705

Total current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

489,050926,089

1,190,782

Deferred income tax expense (benefit):
TMC and domestic subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

95,27097,498(23,792)(252,321)

42,131(116,995)

Total deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

192,767(276,113)(74,864)

Total income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . .

681,817649,976

1,115,918

Toyota is subject to a number of different income taxes which, in the aggregate, indicate a statutory rate inJapan of approximately 30.9% for the years ended March 31, 2020, 2021 and 2022. The statutory tax rates in
effect for the year in which the temporary differences are expected to reverse are used to calculate the tax effects
of temporary differences which are expected to reverse in future years. Reconciliation of the differences between
the statutory tax rate and the average effective tax rate is as follows:
For the years ended March 31,
2020
2021
2022

Statutory tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase (reduction) in taxes resulting from:
Non-deductible expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax-exempt income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities on undistributed earnings of foreignsubsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effects of investments accounted for using the equity
method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities on undistributed earnings of associates
and joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in unrecognized deferred tax assets . . . . . . . . . . . . . . . .
Tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The difference between the statutory tax rate in Japan and thatof foreign subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unrecognized tax benefits adjustments . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30.9%

30.9%

30.9%

0.4
(0.5)

0.5
(0.4)

0.6
(0.3)

0.9

0.6

1.3

(3.4)

(3.7)

(4.3)

2.1
0.9
(4.5)

(0.2)
0.7
(3.2)

2.6
3.7
(2.7)

(2.4)
(0.4)
0.3

(3.5)
(0.2)
0.6

(3.1)
(0.3)
(0.3)

Average effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24.4%

22.2%

28.0%

F-45

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
16. Trade accounts and other payables
Trade accounts and other payables consists of the following:
Yen in millions
March 31,
2021
2022

Accounts and notes payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,953,716
1,092,223

3,168,084
1,124,008

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

4,045,939

4,292,092

Trade accounts and other payables are classified as financial liabilities measured at amortized cost.

F-46

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
17. Financial liabilities(1) Financial liabilities
Financial liabilities consist of the following:
Yen in millions
Non-cash changes
Changesin foreign
currency
As ofexchange
Changes
April 1, 2020 Cash flow Acquisitions Reclassification
rates
in fair value

Current liabilities
Short-term debt . . . . . . . . . . . . . . .
Current portion of long-term
debt . . . . . . . . . . . . . . . . . . . . . . .
Current portion of long-term leaseliabilities . . . . . . . . . . . . . . . . . . .
Class share . . . . . . . . . . . . . . . . . . .

Other

As of
March 31, 2021

5,295,448 (1,038,438)——

220,056—(137,175)

4,339,890

4,568,140 (5,371,616)—

8,421,718——(33,905)

7,584,337(44,760)———

30,299240,712

991
—

—
—

17,424—

47,120240,7129,906,755 (6,454,814)—

8,692,730

221,047—(153,657) 12,212,060

Non-current liabilities
Long-term debt . . . . . . . . . . . . . . . . 10,669,599 9,914,667—
Long-term lease liabilities . . . . . . .
265,879—
114,394Class share . . . . . . . . . . . . . . . . . . .
498,740 (258,451)—(8,421,718)(30,299)(240,712)

963,179
4,266
—

—
—
—

8,076 13,133,804(40,468)
313,771424—

Non-current liabilities . . . . . . 11,434,219 9,656,216

114,394(8,692,730)

Total . . . . . . . . . . . . . . . . . . . . 21,340,973 3,201,402

114,394———

Current liabilities . . . . . . . . . .

Derivatives . . . . . . . . . . . . . . . . . . . . . . .

43,166—

182,726(44,563)

967,445—(31,968) 13,447,575

1,188,491—(185,625) 25,659,635

55 (135,007)

—

3,211

Yen in millions
Non-cash changes
Changesin foreign
currency
As ofexchange
Changes
April 1, 2021 Cash flow Acquisitions Reclassification
rates
in fair value

Current liabilities
Short-term debt . . . . . . . . . . . . . . .
Current portion of long-term
debt . . . . . . . . . . . . . . . . . . . . . . .
Current portion of long-term leaseliabilities . . . . . . . . . . . . . . . . . . .
Class share . . . . . . . . . . . . . . . . . . .

4,339,890

Other

As of
March 31, 2022

(579,216)——

334,639—9,544

4,104,858

7,584,337 (8,548,156)—

7,410,991

572,070—

7,604

7,026,845(54,879)(240,630)——

34,071
—

2,192
—

—
—

27,632(83)

56,136—

Current liabilities . . . . . . . . . . 12,212,060 (9,422,881)—

7,445,062

908,902—44,697

11,187,839

Non-current liabilities
Long-term debt . . . . . . . . . . . . . . . . 13,133,804 8,122,678
Long-term lease liabilities . . . . . . .
313,771—Class share . . . . . . . . . . . . . . . . . . .
———110,996—(7,410,991) 1,095,463(34,071)
14,203—————

2,773 14,943,727(40,107)364,792——

Non-current liabilities . . . . . . 13,447,575 8,122,678

110,996(7,445,062) 1,109,666—(37,334) 15,308,519

47,120240,712

Total . . . . . . . . . . . . . . . . . . . . 25,659,635 (1,300,203) 110,996
Derivatives . . . . . . . . . . . . . . . . . . . . . . .

3,211(12,026)——

2,018,568

—

7,363

26,496,358—

689

15,348—

7,221

Short-term and long-term debt is classified as financial liabilities measured at amortized cost.

F-47

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(2) Short-term debt
The breakdown of “Short-term debt” is as follows:
Yen in millions
March 31,
2021
2022

Short-term debt
(Principally from bank)[Weighted average interest rate
2021
1.37%
2022
1.64%] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial paper[Weighted average interest rate
2021
0.16%
2022
0.38%] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,109,904

852,301

3,229,986

3,252,556

4,339,890

4,104,858(3) Long-term debt
The breakdown of “Long-term debt” is as follows:
Yen in millions
March 31,
2021
2022

Unsecured loans(Principally from bank)
2021
Weighted average interest 1.40%
Due 2021 to 2042
2022
Weighted average interest 1.83%
Due 2022 to 2042] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Secured loans(Principally financial receivables securitization)
2021
Weighted average interest 1.25%
Due 2021 to 2034
2022
Weighted average interest 1.02%
Due 2022 to 2034] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Medium-term notes of consolidated subsidiaries
2021
Weighted average interest 1.56%
Due 2021 to 2048
2022
Weighted average interest 1.45%
Due 2022 to 2048] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-48

5,582,426

4,990,165

3,233,353

3,902,766

9,209,453

10,257,689

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Yen in millions
March 31,
2021
2022

Unsecured bonds of the parent
2021
Weighted average interest 1.40%
Due 2021 to 2037
2022
Weighted average interest 1.32%
Due 2022 to 2037] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unsecured bonds of consolidated subsidiaries
2021
Weighted average interest 1.57%
Due 2021 to 2028
2022
Weighted average interest 1.99%
Due 2022 to 2028] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Secured bonds of consolidated subsidiaries
2021
Weighted average interest 6.34%
Due 2022 to 2024
2022
Weighted average interest 5.81%
Due 2022 to 2024] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less - Current portion due within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,161,938

1,123,145

1,495,976

1,664,634

34,99632,174

20,718,142 21,970,573(7,584,337) (7,026,845)
13,133,804

14,943,727

As of March 31, 2021 and 2022, the currencies of long-term debt are 49% and 52% in US dollars, 16% and
11% in Japanese yen, 12% and 13% in Euros, 6% and 6% in Australian dollars, 3% and 4% in Canadian dollars,
14% and 14% in other currencies.
(4) Assets pledges as collateral
The breakdown of assets pledged as collateral mainly for loans of consolidated subsidiaries is as follows:
Yen in millions
March 31,
2021
2022

Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

754,132
3,278,448

1,474,647
3,582,826

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

4,032,580

5,057,473

Other assets principally consist of securitized finance receivables.
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.
F-49

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(5) Interest expenses
The interest expenses for the fiscal year ended March 31, 2021 and 2022 are ¥471,505 million and¥410,197 million, respectively. Interest expenses related to the financial business is included in “cost of financial
services” in the consolidated statement of income.

(6) Class shares
TMC issued First Series Model AA Class Shares (the “Model AA Class Shares”) on July 24, 2015.
Presented below is additional information regarding the Model AA Class Shares:
Total number of shares issued:

47,100,000 shares

Issue price:

10,598 yen per share

Purchase price:

10,121.09 yen per share

Voting rights:

Model AA Class Shares shall have voting rights. The number of sharesconstituting one unit with respect to Model AA Class Shares shall be 100.

Restrictions on transfer:

Model AA Class Shares shall have restrictions on transfer.

Dividends:(1) If the record date falls in the fiscal year ending on March 31, 2016 :
0.5% of the issue price(2) If the record date falls in the fiscal year ending on March 31, 2017
through March 31, 2020 : the annual dividend rate for the previous
fiscal year plus 0.5% of the issue price(3) If the record date falls in the fiscal year ending on March 31, 2021 orlater : 2.5% of the issue price

Shareholder’s right:(1) Shareholder’s conversion right into Common Shares
Shareholders of the Model AA Class Shares may demand TMC toacquire all or a part of their Model AA Class Shares in exchange for
Common Shares on the first business day of April and October ofevery year, starting October 1, 2020.
(2) Shareholder’s cash put option
Shareholders of the Model AA Class Shares may demand TMC toacquire all or a part of their Model AA Class Shares in exchange forcash on the last business day of March, June, September andDecember of each year, starting on September 1, 2020.

TMC’s right:

TMC may acquire, on or after April 2, 2021, all of the outstanding ModelAA Class Shares in exchange for cash. At the Directors’ Meeting held on
December 14, 2020, TMC has resolved to exercise its cash call option toacquire all outstanding Model AA Class Shares and, subject to suchacquisition, to cancel all Model AA Class Shares pursuant to Article 178of the Companies Act of Japan. The acquisition took place on April 2,
2021, and the cancellation was completed on April 3, 2021.
F-50

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
18. Other financial liabilities
Other financial liabilities consist of the following:
Yen in millions
March 31,
2021
2022

Financial liabilities measured at amortized cost
Deposits received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial liabilities measured at fair value through profit or loss
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

440,275
221,052

723,363
287,072

425,980

497,198

1,087,307

1,507,633

763,875 1,046,050
323,432
461,583
1,087,307

1,507,633

19. Financial risks(1) Financial risk management policy
Toyota is exposed to various risks such as credit risk, liquidity risk, market risk (foreign currency risk,interest rate risk, commodity price fluctuation risk and stock price fluctuation risk). To hedge the market risk,
Toyota also uses derivative financial instruments such as forward exchange contracts, interest rate swaps,
commodity forwards transactions. With respect to the execution and management of derivative transactions, itfollows the company regulations that set out transaction authority, and it is a policy not to conduct speculativetransactions using derivative financial instruments.
In addition, Toyota procures necessary funds (mainly bank borrowings and issuing corporate bonds) basedon the capital expenditure plans, and temporary surplus funds are managed with highly safe financial assets andshort-term working capital is procured through bank borrowings and commercial paper. As for liquidity risk
concerning fund procurement, each company manages it by preparing a monthly cash flow plan, etc.
(2) Credit risk
Receivables related to financial services are exposed to the credit risk. The risk is arisen from the failure ofcustomers or dealers to meet the terms of their contracts with Toyota or otherwise fail to perform as agreed.
Toyota manages its credit risk by defining risk management methods and management systems for specific risks
in accordance with the regulations on risk management. Based on such regulations, Toyota mitigates the credit
risk through periodical monitoring of the customer’s credit status and undertaking the maturity control andaccount balance control, while detecting promptly any doubtful accounts caused by deterioration in the financial
conditions.
Please see Note 3 “Allowance for credit losses on finance receivables” about measuring method of the
expected credit losses on receivables related to financial services.
The carrying amount after impairment of the financial assets presented in the consolidated financial
statements, as well as guarantee obligations and loan commitments that are set forth in the notes to the
F-51

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
consolidated financial statements, are the maximum exposure to the credit risk of Toyota’s financial assets that do
not take into account the value of the acquired collateral. The allowance for credit exposures of loan commitments
and financial agreements is measured in the same way that the allowance for retail receivables is measured.
Retail receivables and financial lease receivables are being secured by vehicles as collateral. Wholesalereceivables and other dealer loans are secured by placing appropriate property as collateral. Also, during thereporting period, there is no change in the policy regarding collateral.
The net changes in the allowance for credit losses relating to the retail receivables are as follows:
Yen in millions
For the year ended March 31, 2021
Lifetime expected credit loss
Expected credit
Financial
Credit-impaired
loss forreceivable notfinancial
12 months
credit-impaired
receivable

Total

Allowance for credit loss at beginning of year . . . .
Provision for credit loss, net of reversal . . . . . . . . .
Charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

60,07828,378—(9,053)

66,81334,992—(23,380)

32,87946,232(50,485)
11,750159,770
109,602(50,485)(20,683)

Allowance for credit loss at end of year . . . . . . . . .

79,40278,42640,376198,204

Yen in millions
For the year ended March 31, 2022
Lifetime expected credit loss
Expected credit
Financial
Credit-impaired
loss forreceivable notfinancial
12 months
credit-impaired
receivable

Total

Allowance for credit loss at beginning of year . . . .
Provision for credit loss, net of reversal . . . . . . . . .
Charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

79,402
22,685—(13,961)

78,42639,420—(18,381)

40,376
38,687(41,331)
4,781

198,204
100,792(41,331)(27,561)

Allowance for credit loss at end of year . . . . . . . . .

88,125

99,46542,514230,104“Other” primarily includes reversal of allowance for credit loss due to the collection of retail receivables.
The table below shows the retail receivables segregated into aging categories based on the numbers of thedays outstanding:

Expected credit
loss for12 months

Yen in millions
March 31, 2021
Lifetime expected credit loss
Financial
Credit-impaired
receivable notfinancialcredit-impaired
receivable

Total

Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Past due less than 90 days . . . . . . . . . . . . . . . . . . . .
Past due 90 days or more . . . . . . . . . . . . . . . . . . . . .

13,638,143
213,860—

824,508
273,282
1,381—
17,527
79,731

14,462,651
504,670
81,112

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

13,852,004

1,099,171

97,25815,048,433

F-52

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Expected credit
loss for12 months

Yen in millions
March 31, 2022
Lifetime expected credit loss
Financial
Credit-impaired
receivable notfinancialcredit-impaired
receivable

Total

Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Past due less than 90 days . . . . . . . . . . . . . . . . . . . .
Past due 90 days or more . . . . . . . . . . . . . . . . . . . . .

15,753,211
283,753—

1,083,642
405,941779—
17,655
102,457

16,836,854
707,350
103,236

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

16,036,965

1,490,363

120,112

17,647,440

The net changes in the allowance for credit losses relating to the finance lease receivables are as follows:
Yen in millions
For the years ended March 31,
2021
2022

Allowance for credit loss at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for credit loss, net of reversal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30,8998,663(3,310)(2,798)33,455
11,107(3,712)(3,865)

Allowance for credit loss at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

33,45536,985“Other” primarily includes reversal of allowance for credit loss due to the collection of finance leasereceivables.
The table below shows the finance lease receivables segregated into aging categories based on the numbersof the days outstanding:
Yen in millions
March 31,
2021
2022

Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Past due less than 90 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Past due 90 days or more . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,945,198
50,99235,0892,279,97847,03420,928

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

2,031,280

2,347,941

F-53

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The table below shows the net movement of the allowance for credit losses on wholesale receivables andother dealer loans.
Yen in millions
For the year ended March 31, 2021
Lifetime expected credit loss
Expected credit
Financial
Credit-impaired
loss forreceivable notfinancial
12 months
credit-impaired
receivable

Total

Allowance for credit loss at beginning of year . . . .
Provision for credit loss, net of reversal . . . . . . . . .
Charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27,556
2,293—(12,382)

13,634
1,975—(8,368)

3,989
1,593
(209)
(437)

45,1795,861(209)(21,188)

Allowance for credit loss at end of year . . . . . . . . .

17,467

7,241

4,935

29,642

Yen in millions
For the year ended March 31, 2022
Expected credit loss for the entire
periodExpected credit
Financial
Credit-impaired
loss forreceivable notfinancial
12 months
credit-impaired
receivable

Total

Allowance for credit loss at beginning of year . . . .
Provision for credit loss, net of reversal . . . . . . . . .
Charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17,467
5,198—(8,317)

7,241
1,566
—
(3,715)

4,935
1,177
(11)
(705)

29,642
7,941(11)(12,736)

Allowance for credit loss at end of year . . . . . . . . .

14,349

5,092

5,396

24,836“Other” primarily includes reversal of allowance for credit loss due to the collection of wholesalereceivables and other dealer loans.
Toyota charges off the credit - impaired finance receivables when Toyota considers that all or part of it will
not be collected. The amount of receivables related to financial services which has been charged off but subject
to ongoing collection activity was not significant for the years ended March 31, 2021 and 2022.
The balances of the wholesale receivables and other dealer loan receivables portfolios by credit status, aswell as loan commitments and financial guarantee contracts, as of March 31, 2021 and 2022 are as follows.
The wholesale and other dealer loan receivables portfolio segment is segregated into following
creditqualities below based on internal risk assessments by dealers.
Performing: Account not classified as either
Credit Watch, At Risk or DefaultCredit Watch: Account designated for elevated attention
At Risk: Account where there is an increased likelihood that default may exist based on qualitative andquantitative factors
F-54

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Default: Account is not currently meeting contractual obligations, or we have temporarily waived certain
contractual requirements

Expected credit
loss for12 months

Yen in millions
March 31, 2021
Lifetime expected credit loss
Financial
Credit-impaired
receivable notfinancialcredit-impaired
receivable

Total

Wholesale and other dealer loan
Performing . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit Watch . . . . . . . . . . . . . . . . . . . . . . . . . .
At Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loan commitments . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial guarantee contracts . . . . . . . . . . . . . . . . . .

2,956,452
82,046——
9,917,155
3,574,943—
78,50948,354—96,266
31,465——
2,388
17,736412—

2,956,452
160,554
50,742
17,736
10,013,832
3,606,408

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

16,530,596

254,594

20,535

16,805,725

Expected credit
loss for12 months

Yen in millions
March 31, 2022
Lifetime expected credit loss
Financial
Credit-impaired
receivable notfinancialcredit-impaired
receivable

Total

Wholesale and other dealer loan
Performing . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit Watch . . . . . . . . . . . . . . . . . . . . . . . . . .
At Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loan commitments . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial guarantee contracts . . . . . . . . . . . . . . . . . .

2,730,860
20,842——
10,050,817
3,574,257—
97,35332,299—69,39339,205——699
22,16290—

2,730,860
118,196
32,99822,162
10,120,300
3,613,461

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

16,376,776

238,251

22,952

16,637,978

For the year ended March 31, 2021 and 2022, the amount of finance receivables the terms of whichwere modified due to deterioration in credit conditions was not significant for any portfolio of financereceivables, and the amount of payment defaults on finance receivables so modified were not significant for any
portfolio of such receivables.
(3) Liquidity risk
To secure cash on hand necessary for carrying out the operation, Toyota appropriately borrows from thefinancial institutions and issues corporate bonds or commercial paper, and there is a risk of failing to execute thepayment on due date because of deterioration of fund procurement environment etc.,.
Toyota manages liquidity risk by monitoring the fund demand of each group company as appropriate,
preparing a monthly-based funding plan, and comparing it with the daily cash flow. In addition to holding
sufficient cash and cash equivalents in order to secure the liquidity and stability of funds, to prepare for
emergency situations such as the sudden fund demand and market liquidity deterioration, a commitment line has
been set up.
F-55

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The amounts of non-derivative financial liabilities and derivative financial liabilities by a remaining contract
maturity period are as follows:
As of March 31, 2021
Yen in millions

Book value

Non-derivative financial liabilities
Short-term debt . . . . . . . . . . . . . . . 1,109,904
Commercial paper . . . . . . . . . . . . . 3,229,986
Current portion of long-term
debt . . . . . . . . . . . . . . . . . . . . . . 7,584,337
Long-term debt . . . . . . . . . . . . . . . 13,133,804
Lease liabilities . . . . . . . . . . . . . . .
360,891Class share . . . . . . . . . . . . . . . . . . .
240,712
Total . . . . . . . . . . . . . . . 25,659,635
Derivative financial liabilities
Interest derivative . . . . . . . . . . . . .
Currency derivative
In . . . . . . . . . . . . . . . . . . . . . .
Out . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . .

Contractual
cash flows

Maturities
Between 1 and Between 3 andWithin 1 year
3 years
5 years————

Later than
5 years(1,119,748)(3,233,528)(1,119,748)(3,233,528)——(7,781,816)(13,615,831)(403,757)(243,650)(7,781,816)—(52,983)(243,650)—(8,135,588)(78,623)——(3,871,044)(52,294)——(1,609,200)(219,857)—(26,398,330) (12,431,725)(8,214,211)(3,923,338)(1,829,057)

288,853(291,818)(75,477)(147,811)(45,699)(22,832)—
137,127

453,701(593,702)

228,651(353,986)

151,430(163,366)

49,701(51,643)

23,919(24,707)425,980(431,820)(200,812)(159,747)(47,640)(23,620)(26,830,150) (12,632,537)(8,373,958)(3,970,978)(1,852,677)

Total . . . . . . . . . . . 26,085,615

As of March 31, 2022
Yen in millions

Book value

Contractual
cash flows

Non-derivative financial liabilities
Short-term debt . . . . . . . . . . . . . . .
852,301(865,873)
Commercial paper . . . . . . . . . . . . . 3,252,556(3,260,578)
Current portion of long-term
debt . . . . . . . . . . . . . . . . . . . . . . 7,026,845(7,238,356)
Long-term debt . . . . . . . . . . . . . . . 14,943,727 (15,458,478)
Lease liabilities . . . . . . . . . . . . . . .
420,928(466,661)
Class share . . . . . . . . . . . . . . . . . . .
——Total . . . . . . . . . . . . . . . 26,496,358
Derivative financial liabilities
Interest derivative . . . . . . . . . . . . .
Currency derivative
In . . . . . . . . . . . . . . . . . . . . . .
Out . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . .

Maturities
Between 1 and Between 3 andWithin 1 year
3 years
5 years(865,873)(3,260,578)

—
—

—
—

Later than
5 years——(7,238,356)—(61,735)——(9,194,302)(85,791)——(4,501,420)(60,661)——(1,762,756)(258,474)—(27,289,948) (11,426,543)(9,280,094)(4,562,081)(2,021,230)

325,912(346,482)(56,824)(112,352)(110,592)(66,715)—
171,286

958,208(1,164,801)

358,275(475,869)

83,552(94,949)

379,916(420,302)

136,465(173,682)

497,198(553,075)(174,417)(123,748)(150,978)(103,932)(27,843,023) (11,600,961)(9,403,841)(4,713,059)(2,125,162)

Total . . . . . . . . . . . 26,993,557

F-56

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Toyota has unused short-term lines of credit amounting to ¥1,836,532 million and ¥2,534,291 million ofwhich ¥550,408 million and ¥1,056,931 million related to commercial paper programs as of March 31, 2021 and
2022, respectively. Under these programs, Toyota is authorized to obtain short-term financing at prevailinginterest rates for periods not in excess of 360 days.
As of March 31, 2021 and 2022, Toyota has unused long-term lines of credit amounting to¥6,446,277 million and ¥9,030,322 million, respectively.
(4) Foreign exchange risk
Toyota is subject to the foreign currency exposure through transactions in foreign currencies related topurchase, sale and finance associated with conducting business worldwide. Toyota is exposed to fluctuations
risks related to future profitability or assets and liabilities regarding operating cash flow denominated in foreign
currencies and various financial instruments. The most significant foreign currency exposure is primarily causedby the U.S. dollar and the euro.
Toyota uses derivative financial instruments including foreign exchange forward contracts, foreign currency
options, interest rate currency swap agreements, and others, to manage the exposure to foreign currency
exchange rate fluctuations.
Toyota uses Value-at-risk analysis measurement (“VaR”) to assess the risk of exchange rate fluctuation.
Potential impact of pre-tax cash flows on VaR-integrated foreign currency positions (including derivatives) for
the years ended March 31, 2021 and 2022 is as follows:

For the year ended March 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
For the year ended March 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Year-end

Yen in millions
VaR
Average
Maximum

Minimum

196,900
257,600

187,725
241,825

178,400
214,800

196,900
263,600

The Monte Carlo simulation method is used for Toyota’s VaR measurement, and measurement is based on a
95% confidence interval and a ten-day holding period.
(5) Interest rate risk
In preceding with business activities, Toyota is exposed to interest rate risk due to fluctuation in market
interest rates as it procures and invests funds necessary for working capital and capital investment. To maintain adesirable level of exposure related to interest rate fluctuation risk and minimize interest expense, Toyota
conducts various financial instruments transactions.
Sensitivity analysis of Toyota’s interest rate risk associated with holding financial instruments if the interest
rate increases by 1% is as follows. In this analysis, all other variables are assumed to be constant.
Yen in millions
For the years ended March 31,
2021
2022

Impact on income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impact on other comprehensive income, before tax effect . . . . . . . . . . . . . . . . . . . . .
F-57(40,536)(238,986)(64,533)(243,630)

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(6) Market price fluctuation risk
Toyota is exposed to risks arising from increased costs due to commodity price fluctuations, such as ironand steel, precious metals and non-ferrous alloys used in the manufacture of automobiles. Toyota controls theprice risk associated with the purchase of those commodities by maintaining inventory at the minimum level.
Toyota is exposed to stock price fluctuation risk because it owns shares of companies that have business
relationships mainly for promoting smooth business activities. Toyota periodically reviews the fair values andfinancial situations of the business partner companies and, taking into consideration the relationship with them,continually reviews the holding status. The impact on other comprehensive income, before tax effect when the
declared price of equity financial assets (shares) in active markets changes by 10% for the year ended March 31,
2021, and 2022 is ¥262,396 million and ¥316,281 million, respectively.
20. Derivative financial instruments(1) 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 Toyota is unable to or has elected
not to apply hedge accounting. Toyota does not use derivatives for speculation or trading.
(2) Fair value and gain and losses of derivatives
The fair values of the derivatives as of March 31, 2021 and 2022 are as follows:
Yen in millions
March 31,
2021
2022

Derivative assets
Derivative financial instruments not designated as hedging instruments:
Interest rate and currency swap
Current assets- Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current assets- Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

37,852

69,625

236,023

333,683

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

273,876

403,309

Foreign exchange forward and option contracts
Current assets- Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current assets- Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,488

15,865——

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

8,488

15,865

Total derivative assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

282,364

419,173

F-58

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Yen in millions
March 31,
2021
2022

Derivative financial liabilities
Derivative financial instruments not designated as hedging instruments:
Interest rate and currency swap
Current liabilities- Other financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current liabilities- Other financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(89,681)(87,926)(226,434)(326,177)

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

(316,115)(414,102)

Foreign exchange forward and option contracts
Current liabilities- Other financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current liabilities- Other financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(109,865)(83,096)——

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

(109,865)(83,096)

Total derivative liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(425,980)(497,198)

The amount of underlying notional of derivatives as of March 31, 2021 and 2022 are as follows:
Yen in millions
March 31,
2021
2022

Derivative financial instruments not designated as hedging instruments:
Interest rate and currency swap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange forward and option contracts . . . . . . . . . . . . . . . . . . . . . . . . . . .

21,453,268
4,884,400

21,510,803
2,976,488

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

26,337,668

24,487,291

Undesignated derivative financial instruments are used to manage economic risks of fluctuations in foreign
currency exchange rates and interest rates of certain receivables and payables. Those economic risks are offset bychanges in the fair value of undesignated derivative financial instruments.
The gain (loss) on derivative transactions as of March 31, 2020, 2021 and 2022 were ¥13,419 million,¥588 million and ¥773 million, respectively. The amounts are included in cost of financial services and foreignexchange gain (loss), net.
Cash flows from transactions of derivative financial instruments are included in cash flows from operating
activities in the consolidated statement of cash flows.
(3) 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.
F-59

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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, 2021
and 2022 is ¥35,148 million and ¥36,190 million, respectively. The aggregate fair value amount of assets that are
already posted as cash collateral as of March 31, 2021 and 2022 is ¥75,394 million and ¥99,718 million,
respectively. If the ratings of Toyota decline below specified thresholds, the maximum amount of assets to beposted or for which Toyota could be required to settle the contracts is ¥36,190 million as of March 31, 2022. See
Note 22 for details.
21. Fair value measurements(1) Definition of fair value hierarchy
In accordance with IFRS, Toyota classifies fair value measurement into the following three levels based on
the observability and significance of the inputs used.
Level 1:

Quoted prices in active markets for identical assets or liabilities

Level 2:

Fair value measurement based on inputs other than quoted prices included within Level 1 thatare observable for the assets or liabilities, either directly or indirectly

Level 3:

Fair value measurement based on models using unobservable inputs for the assets or liabilities(2) Method of fair value measurement
The fair value of assets and liabilities is determined using relevant market information and appropriate
valuation methods.
The methods and assumptions for measuring the fair value of assets and liabilities are as follows:(i) Cash and cash equivalents Cash equivalents include money market funds and other investments with original maturities of threemonths or less. In the normal course of business, substantially all cash and cash equivalents and time deposits arehighly liquid and are carried at amounts which approximate fair value due to their short duration.
(ii) Trade accounts and other receivables and Trade accounts and other payables These receivables and payables are carried at amounts which approximate fair value due to their shortduration.
(iii) Receivables related to financial services The fair value of receivables related to financial services is estimated by discounting expected cash flows topresent value using internal assumptions, including prepayment speeds, expected credit losses and collateralvalue.
As unobservable inputs are utilized, the fair value of receivables related to financial services is classified as
Level 3.
(iv) Other financial assets (Public and corporate bonds)
F-60

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Public and corporate bonds include government bonds. Japanese bonds and foreign bonds, including U.S.,
European and other bonds, represent 28% and 72% (as of March 31, 2021) and 26% and 74% (as of March 31,2022) of public and corporate bonds, respectively. Toyota primarily uses quoted market prices for identical assets
to measure the fair value of these securities.
(Stocks)
Listed stocks on the Japanese stock markets represent 89% (as of March 31, 2021) and 85% (as ofMarch 31, 2022) of stocks that Toyota holds. Toyota primarily uses quoted market prices for identical assets tomeasure fair value of these securities. Therefore, stocks with an active market are classified as Level 1.
Fair value of stocks with no active market is measured by using the market approach or other appropriate
methods. Therefore, stocks with no active market are thus classified as Level 3.
Price book-value ratios (“PBR”) of comparable companies, discount ratios of discounted cash flow
valuation method and others are the significant unobservable inputs relating to the fair value measurement ofstocks classified as Level 3. The fair value increases (decreases) as PBR of a comparable company rises(declines) or the discount rate declines (rises). The estimated increase or decrease in fair value of stocks if theunobservable inputs were to be replaced by other reasonable alternative assumptions are not significant.
These estimates are based on valuation methods that are considered appropriate in each case. The significant
assumptions involved in the estimations include the financial condition and future prospects and trends of theinvestees and the outcome of the referenced transactions. Due to the uncertain nature of these assumptions or byusing different assumptions and estimates, the fair value may be impacted materially.
The shares classified as Level 3 are measured by the responsible department using quarterly available
information in accordance with Toyota’s consolidated financial accounting policies and reported to thesupervisors along with the basis of the change in fair value.
(v) 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 primarily estimates thefair 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 of these models
does not require significant judgment to be applied. These derivative financial instruments are classified as
Level 2. In other certain cases when market data are not available, key inputs to the fair value measurement
include quotes from counterparties, and other market data. Toyota assesses the reasonableness of changes of thequotes using observable market data. These derivative financial instruments are classified as Level 3. Toyota’s
derivative fair value measurements consider assumptions about counterparty and Toyota’s own non-performancerisk, using such as credit default probabilities.
(vi) Short-term and long-term debt The fair values of short-term and long-term debt including the current portion, except for secured loans
provided by securitization transactions using special-purpose entities (“Loans Based on Securitization”), areestimated based on the discounted amounts of future cash flows using Toyota’s current borrowing rates for
similar liabilities. As these inputs are observable, the fair value of these debts is classified as Level 2.
F-61

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The fair values of the Loans Based on Securitization is primarily estimated based on current market rates
and credit spreads for debt with similar maturities. Internal assumptions including prepayment speeds andexpected credit losses are used to estimate the timing of cash flows to be paid on the underlying securitized
assets. In case these valuations utilize unobservable inputs, the fair value of the Loans Based on Securitization isclassified as Level 3.
(3) Financial instrument measured at fair value on recurring basis
The following table summarizes the fair values of the assets and liabilities measured at fair value on arecurring basis. Transfers between levels of the fair value are recognized at the date of the event or change incircumstances that caused the transfer:Level 1

Yen in millions
March 31, 2021
Level 2
Level 3

Total

Other financial assets:
Financial assets measured at fair value through profit or loss
Public and corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22,926——
366,570

28,269—282,364
123,255

8,406
317,101——59,600317,101
282,364
489,824

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

389,495

433,887

325,506

1,148,889

Financial assets measured at fair value through other comprehensive
incomePublic and corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,075,042
2,623,964
7,986

2,981,239——

19,218321,816—

6,075,498
2,945,780
7,986

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

5,706,991

2,981,239

341,034

9,029,264

Other financial liabilities:
Financial liabilities measured at fair value through profit or loss
Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—(425,980)—(425,980)

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

—(425,980)—(425,980)

F-62

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Level 1

Yen in millions
March 31, 2022
Level 2
Level 3

Total

Other financial assets:
Financial assets measured at fair value through profit or loss
Public and corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

61,376——
307,446

96,136—419,173
158,355

1,674
149,890——

159,186
149,890
419,173
465,801

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

368,822673,665

151,563

1,194,051

Financial assets measured at fair value through other comprehensive
incomePublic and corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,542,949
3,162,805
9,505

2,739,591—
139

20,178
169,404—

6,302,719
3,332,209
9,644

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

6,715,259

2,739,730

189,583

9,644,571

Other financial liabilities:
Financial liabilities measured at fair value through profit or loss
Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—(497,198)—(497,198)

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

—(497,198)—(497,198)(4) Changes in financial instruments classified as Level 3 and measured at fair value on recurringbasis
The following table summarizes the changes in Level 3 assets and liabilities measured at fair value on arecurring basis for the years ended March 31, 2021 and 2022:
Yen in millions
For the year ended March 31, 2021
Public and corporate
Derivative financial
bonds
Stocksinstruments

Total

Balance at beginning of year . . . . . . . . . . . . . . . . . .
Total gains (losses)
Net income (loss) . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss) . . . . . . . .
Purchases and issuances . . . . . . . . . . . . . . . . . . . . .
Sales and settlements . . . . . . . . . . . . . . . . . . . . . . .
Transfer from Level 3 . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

32,931

370,452—

403,383980—
316(5,223)(2,760)1,380

162,055
72,01458,578(497)—(23,686)

—
—
—
—
—
—

163,035
72,01458,894(5,720)(2,760)(22,306)

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . .

27,623638,917—666,540

Unrealized gains or losses included in profit orloss on assets held at March 31 . . . . . . . . . . . . . .

983

162,055—

163,038

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

983

162,055—

163,038

F-63

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Yen in millions
For the year ended March 31, 2022
Public and corporate
Derivative financial
bonds
Stocksinstruments

Balance at beginning of year . . . . . . . . . . . . . . . . . .
Total gains (losses)
Net income (loss) . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss) . . . . . . . .
Purchases and issuances . . . . . . . . . . . . . . . . . . . . .
Sales and settlements . . . . . . . . . . . . . . . . . . . . . . .
Transfer from Level 3 . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27,623

Total

638,917—666,540(44) 113,053
—
9,219
968
2,362
(4,020) (18,208)(7,067) (512,465)
4,392
86,415

—
—
—
—
—
—

113,0099,219
3,330(22,228)(519,532)
90,807

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . .

21,852319,294—

341,146

Unrealized gains or losses included in profit orloss on assets held at March 31 . . . . . . . . . . . . . .

(250)

113,053—

112,803

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

(250)

113,053—

112,803

Net income (loss) in public and corporate bonds, stocks and derivative financial instruments, other thantransactions related to financial services, are each included in “Other finance income” and “Other finance costs”
in the accompanying consolidated statement of income. Transactions related to financial services are included ineach of “Sales revenues—Financial services” and “Cost of financial services” in the consolidated statement ofincome.
In the reconciliation table above, derivative financial instruments are presented as net of assets andliabilities. “Other” includes foreign currency translation adjustments for the year ended March 31, 2021 and
2022.
Transfer from Level 3 of stocks recognized in the year ended March 31, 2022 is due to the listing ofinvestees.
(5) Financial assets and liabilities measured at amortized cost
The following table summarizes the carrying amount and the fair value of financial assets and liabilities
measured on an amortized cost basis:
Yen in millions
March 31, 2021
Fair value

Receivables related to financial services . . . . .
Interest-bearing liabilities
Long-term debt (Including current
portion) . . . . . . . . . . . . . . . . . . . . . . . .

Carrying amount

Level 1

19,205,715—

20,718,142

—

F-64

Level 2

Level 3

Total—

19,939,810

19,939,810

17,749,022

3,244,912

20,993,934

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Yen in millions
March 31, 2022
Fair value

Receivables related to financial services . . . . .
Interest-bearing liabilities
Long-term debt (Including current
portion) . . . . . . . . . . . . . . . . . . . . . . . .

Carrying amount

Level 1

21,764,457—

21,970,573—

Level 2

Level 3

Total—

22,074,593

22,074,593

17,899,087

3,824,531

21,723,618

Of financial assets and liabilities that are measured on an amortized cost basis, those with carrying values
that approximate fair value are excluded from the table above.
22. Offsetting Financial Assets and Liabilities
The following table summarizes the amounts of financial assets and financial liabilities that are subject to an
enforceable master netting agreement or similar agreement but not set off because they do not meet some or allof the offsetting criteria for financial assets and financial liabilities. With respect to financial instruments that
may be offset in the future based on set-off rights associated with master netting agreements or similar
agreements, as well as the associated collateral, the set-off will be enforceable only when certain circumstances,such as when the counterparty cannot perform on its obligations due to bankruptcy or other reasons, arise.
Yen in millions
March 31, 2021
Gross amounts ofrecognizedfinancial assets
and financial
liabilities

Other financial assets Derivatives . . . . . . . . . . . . . . . . . . .
Other financial liabilities Derivatives . . . . . . . . . . . . . . . .

282,364
425,980

Amounts not offset
Collateral of
Financialfinancial
instruments instruments

Net amount(163,054)(163,054)

56,515173,078(62,795)(89,849)

Yen in millions
March 31, 2022
Gross amounts ofrecognizedfinancial assets
and financial
liabilities

Other financial assets Derivatives . . . . . . . . . . . . . . . . . . .
Other financial liabilities Derivatives . . . . . . . . . . . . . . . .

419,173
497,198

Amounts not offset
Collateral of
Financialfinancial
instruments instruments

Net amount(182,288)(182,288)

131,685
203,627(105,201)(111,283)

The amounts offset, as presented in the consolidated statement of financial position, in accordance with thecriteria for offsetting financial assets and financial liabilities were immaterial.
23. Employee benefits(1) Overview of post-employment benefit Plans
Upon terminations of employment, employees of TMC and subsidiaries in Japan are entitled, under theretirement 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, theminimum 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.
F-65

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Effective October 1, 2004, TMC 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, TMC 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 fixedinterest crediting rate as was in the pre-amended plan.
TMC 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 the plans 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.
These post-employment benefit plans are exposed to general investment risk, interest rate risk and inflation
risk.
Pension costs and defined benefit obligations are dependent on assumptions used in calculating suchamounts. These assumptions include discount rates, retirement rate, salary increase rate, mortality rates and otherfactors. While management believes that the assumptions used are appropriate, differences in actual experienceor changes in assumptions may affect Toyota’s pension costs and obligations.
The most critical assumption impacting the calculation of pension costs and defined benefit obligations isthe discount rates. Toyota determines the discount rates mainly based on the rates of high quality fixed income
bonds currently available and expected to be available during the period to maturity of the defined benefit
pension plans.
Toyota uses a March 31 measurement date for its post-employment benefit plans.

F-66

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(2) Defined benefit obligations and plan assets
The changes in present value of defined benefit obligations and fair value of plan assets are as follows:
Yen in millions
For the years ended March 31,
2021
2022
Japanese plans Foreign plans Japanese plans Foreign plans

Present value of defined benefit obligations:Benefit obligations at beginning of year . . . . . . . .
Current service cost . . . . . . . . . . . . . . . . . . . . . . .
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Remeasurements:
Changes in demographic assumptions . . . . .
Changes in financial assumptions . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Past service cost . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan participants’ contributions . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition and other . . . . . . . . . . . . . . . . . . . . . .

2,058,893
91,07910,9701,207,815
52,33449,9142,089,263
89,12812,487

1,419,910
52,82652,062(7,569)13,888(5,835)
1,035
1,397(72,441)(2,155)28,69014,49051,296
3,159
2,093(48,478)
58,597

6,440(46,113)
4,162
761
1,392
(80,368)—

379(126,125)
904
274
3,063
(42,615)
126,966

2,089,263

1,419,910

2,077,151

1,487,644

1,519,254
8,907

868,90348,7291,806,265
11,261

1,079,543
51,614

286,089
37,4691,397(39,471)(7,380)120,232
31,2272,093(36,217)44,57634,54333,163
1,392(41,804)—(6,657)
24,912
3,063(31,823)
104,004

Plan assets at end of year . . . . . . . . . . . . . . . . . . .

1,806,265

1,079,543

1,844,819

1,224,656

Effect of the asset ceiling . . . . . . . . . . . . . . . . . . . . . . .

—

—

—

—

Net defined benefit liability (asset) . . . . . . . . . . . . . . .

282,999

340,368

232,332

262,988

Benefit obligations at end of year . . . . . . . . . . . . .
Fair value of plan assets:
Plan assets at beginning of year . . . . . . . . . . . . . .
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . .
Remeasurement
Actual return on plan assets, excludinginterest income . . . . . . . . . . . . . . . . . . . . .
Employer contributions . . . . . . . . . . . . . . . . . . . .
Plan participants’ contributions . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition and other . . . . . . . . . . . . . . . . . . . . . .

The funded defined benefit obligations and the unfunded defined benefit obligations are as follows:
Yen in millions
March 31,2021
Japanese
plans

2022
Foreignplans

Japaneseplans

Foreignplans

Funded defined benefit obligations . . . . . . . . . . . . . . . . . . . . 1,575,647 1,127,974 1,559,686 1,187,595
Plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,806,265) (1,079,543) (1,844,819) (1,224,656)
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(230,618)

48,432(285,133)(37,061)

Unfunded defined benefit obligations . . . . . . . . . . . . . . . . . .

513,616

291,936

517,465

300,049

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

282,999

340,368

232,332

262,988

F-67

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The net defined benefit liability (asset) recognized in the consolidated statement of financial position arecomprised of the following:
Yen in millions
March 31,
2021

2022

Japaneseplans

Foreignplans

Japaneseplans

Foreignplans

Retirement benefit liabilities . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-current assets (Retirement benefit assets) . . . . . .

680,021(397,023)

355,075(14,707)674,425(442,094)

348,323(85,335)

Net amount recognized . . . . . . . . . . . . . . . . . . . . . . . . .

282,999

340,368

232,332

262,988(3) The major items of actuarial assumption
The weighted-average discount rates used to determine the present value of defined benefit obligations are
as follows:
March 31,2021
Japaneseplans

Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

0.6%

2022
Foreign
plans

3.3%

Japanese
plans

0.7%

Foreign
plans

3.5%

(4) Fair value of plan assets
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.
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-68

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table summarizes the fair value of classes of plan assets.
Yen in millions
March 31, 2021
Japanese plans
Quoted prices in active
markets
Available Not available

Stocks . . . . . . . . . . . . . . . . . . . . . . . . . . 607,727
Government bonds . . . . . . . . . . . . . . . . 110,699
Bonds (other) . . . . . . . . . . . . . . . . . . . . .
—Commingled funds . . . . . . . . . . . . . . . .
—Insurance contracts . . . . . . . . . . . . . . . .
—Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 145,801
Total . . . . . . . . . . . . . . . . . . . . . . .

864,227——
72,496500,243
216,423
152,876
942,038

Foreign plans
Quoted prices in active
markets
Available Not available

Total

607,727 194,927
110,699 113,476
72,496—500,243—
216,423—
298,677
16,182
1,806,265

324,584

Total——
203,640
385,663—
165,655

194,927
113,476
203,640
385,663—
181,837

754,958

1,079,543

Yen in millions
March 31, 2022
Japanese plans
Quoted prices in active
markets
Available Not available

Stocks . . . . . . . . . . . . . . . . . . . . . . . . . . 549,385
Government bonds . . . . . . . . . . . . . . . . 112,568
Bonds (other) . . . . . . . . . . . . . . . . . . . . .
—Commingled funds . . . . . . . . . . . . . . . .
—Insurance contracts . . . . . . . . . . . . . . . .
—Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 225,980
Total . . . . . . . . . . . . . . . . . . . . . . .

887,933——
77,048489,471
220,027
170,340
956,886

Foreign plans
Quoted prices in active
markets
Available Not available

Total

549,385 195,067
112,568 132,172
77,048—489,471—
220,027—
396,320
30,442
1,844,819

357,681

Total——
218,433
423,525—
225,016

195,067
132,172
218,433
423,525—
255,459

866,975

1,224,656“Other” consists of cash equivalents, other private placement investment funds and other assets.
(5) The sensitivity analysis
The following table illustrates the effects on defined benefit obligations of the change in weighted-average
discount rates, assuming all other assumptions are consistent.
Yen in millions
March 31,2021

0.5% decrease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.5% increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2022

Japaneseplans

Foreignplans

Japaneseplans

Foreignplans

177,741(154,265)

99,253(179,276)

172,402(150,226)

127,889(118,899)(6) Impact on future cash flow
Contributions to plan assets by TMC and some of its consolidated subsidiaries are determined by various
factors such as employee salary levels and years of service, funded status of plan assets, and actuarial
F-69

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
calculations. In addition, according to the rules of the defined benefit corporate pension law, the corporate
pension fund system recalculates the amount of the balance every five years with the end date of the reporting
period as the base date so that financial balance can be maintained in the future. TMC and some of its
consolidated subsidiaries may make a necessary contribution if the reserve amount is below the minimum reserveamount.
In the following year (the year ending March 31, 2023), Toyota expects to contribute ¥33,069 million forJapanese plans and ¥14,876 million for Foreign plans to the post-employment benefit plans.
The following pension benefit payments, which reflect expected future service, as appropriate, are expected
to be paid:
Yen in millions
Japanese plans Foreign plans

Years ending March 31,

2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
From 2028 to 2032 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

84,16886,656
83,842
85,23988,955421,154

43,91043,95845,661
48,55752,725
301,917

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

850,015536,727(7) Benefit obligations for non-retirement pension for retirees and benefit obligations for absentee
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 obligation under these arrangements are not material.
(8) Payroll expenses
Payroll expenses included in “Cost of products sold” and “Selling, general and administrative” in the
consolidated statement of income (including expenses for post-employment benefit plans) for the years ended
March 31, 2020, 2021 and 2022 are ¥3,403,555 million, ¥3,281,292 million and ¥3,550,882 million, respectively.
24. Liabilities for quality assurance
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 based on the amount estimated from historical experience.
Liabilities for product warranties and liabilities for recalls and other safety measures have been combined
into “Liabilities for quality assurance” in the consolidated statement of financial position due to the fact that bothare liabilities for costs to repair or replace defects of vehicles and the amounts incurred for recalls and othersafety measures may affect the amounts incurred for product warranties and vice versa.
F-70

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The net change in liabilities for quality assurance above for the years ended March 31, 2020, 2021 and 2022
consist of the following:
Yen in millions
For the years ended March 31,
2020
2021
2022

Liabilities for quality assurance at beginning of year . . . . . . . . . . . . . .
Additional provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Utilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reversals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,769,514
372,619(482,918)(99,533)(6,712)

1,552,970
345,563(347,806)(77,479)
9,624

1,482,872
362,180(278,094)(32,124)
20,877

Liabilities for quality assurance at end of year . . . . . . . . . . . . . . . . . . .

1,552,970

1,482,872

1,555,711“Other” primarily includes the impact of currency translation adjustments and the impact of consolidationand 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 assurance above for the years ended March 31, 2020, 2021 and 2022.
Yen in millions
For the years ended March 31,
2020
2021
2022

Liabilities for recalls and other safety measures at beginning ofyear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Utilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reversals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,302,309
225,373(354,759)(61,099)(7,113)

1,104,711
229,763(228,044)(16,199)
3,458

1,093,689
245,542(165,482)(9,389)6,853

Liabilities for recalls and other safety measures at end of year . . . . . .

1,104,711

1,093,689

1,171,213

25. Equity and other equity items(1) Equity management
Toyota will efficiently invest in maintenance and replacement of conventional manufacturing facilities andthe introduction of new products, and will focus on capital investment and research and development in areas
contributing to strengthening competitiveness and future growth. Through these activities, Toyota aims to
improve corporate value and keep sustainable growth for realization of a new mobility society. Generally, Toyota
Motor Corporation shareholder’s equity cover such activities, with additional short-term and long-term debt, if
necessary.
The amount of Toyota Motor Corporation shareholder’s equity and short-term and long-term debt are as
follows:
Yen in millions
March 31,
2021
2022

Toyota Motor Corporation Shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term and long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-71

23,404,547
25,659,635

26,245,969
26,496,358

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(2) Number of shares
The total number of authorized shares of TMC’s common stock was 10,000,000,000, 10,000,000,000 and
50,000,000,000 as of March 31, 2020, 2021 and 2022, respectively.
The changes in the shares of common stock issued are as follows:2020

For the years ended March 31,
2021
2022

Common stock issued:
Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . .
Changes during the year . . . . . . . . . . . . . . . . . . . . . . . . . .

3,262,997,492—

3,262,997,492
3,262,997,492—
13,051,989,968

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . .

3,262,997,492

3,262,997,492

16,314,987,460

The common stock issued by TMC is a no-parity stock without any limitations on the content of the rights,
and the issued stock is fully paid.
On October 1, 2021, TMC effected a five-for-one stock split of its common stock to shareholders. The total
number of authorized shares of TMC’s common stock and common stock issued was increased by
40,000,000,000 and 13,051,989,968, respectively.
The total number of treasury stock was 496,844,960, 467,048,832 and 2,536,685,916 as of March 31, 2020,2021 and 2022, respectively.
(3) Capital surplus and retained earnings
Capital surplus consists of capital reserves and other capital surplus. Retained earnings consist of retained
earnings reserve and other retained earnings. The Companies Act of Japan provides that an amount equal to 10%
of distributions from surplus paid by TMC and its Japanese subsidiaries be appropriated as a capital reserve or aretained earnings reserve. No further appropriations are required when the total amount of the capital reserve andthe retained earnings reserve reaches 25% of stated capital. The Companies Act provides that the retained
earnings reserve of TMC 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 TMC available for dividend payments to shareholders were¥11,215,850 million and ¥11,656,187 million as of March 31, 2021 and 2022, respectively. In accordance withcustomary practice in Japan, the distributions from surplus are not accrued in the financial statements for thecorresponding period, but are recorded in the subsequent accounting period after shareholders’ approval has beenobtained.
Retained earnings at March 31, 2022 include ¥3,243,920 million relating to equity in undistributed earnings
of associates and joint ventures.
(4) Treasury stock
The reissuance and repurchase of treasury stock are as follows:
For the year ended March 31, 2020
Repurchase of treasury stock
F-72

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Reason for repurchasing treasury stock The repurchase was made to return capital to shareholders in addition to promoting capital efficiency andagile capital policy in view of the business environment.
Details of matters relating to repurchase Number of common shares repurchased . . . . . . . . . . . . . . . . . . . . . . . . .
Total purchase price for repurchase of shares . . . . . . . . . . . . . . . . . . . . .

69,532,900 shares¥500,139 million

Reissuance of treasury stock
Reason for reissuing treasury stock On May 9, 2019, TMC resolved to conclude contracts aimed toward the establishment of a new joint
venture, Prime Life Technologies, related to a town development business with Panasonic. Pursuant to thesecontracts, TMC, THC and Misawa Homes conducted a share exchange in which common shares of Toyota wereallotted in exchange for common shares of Misawa Homes so that THC, a consolidated subsidiary of TMC, will
become the wholly owning parent company resulting from the share exchange and Misawa Homes, aconsolidated subsidiary of THC, will become the wholly owned subsidiary resulting from the share exchange.
Details of matters relating to reissuance Number of common shares reissued . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amount of reissuance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,269,500 shares¥24,181 million

For the year ended March 31, 2021
Reissuance of treasury stock
Reason for reissuing treasury stock At its Directors’ Meeting held on March 24, 2020, TMC resolved to purchase shares issued by NIPPONTELEGRAPH AND TELEPHONE CORPORATION (“NTT”) and conduct a reissuance of treasury stock
through third-party allotment with NTT as the allottee to form a business and capital alliance with NTT. The
parties entered into a memorandum of understanding concerning the business and capital alliance on the sameday. Based on the agreement, TMC has completed the purchase of NTT shares and reissuance of treasury stockwith NTT as the allottee on April 9, 2020.
Details of matters relating to reissuance Number of common shares reissued . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amount of reissuance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29,730,900 shares¥199,999 million

For the year ended March 31, 2022
Repurchase of treasury stock
1) Repurchasing of treasury stock resolved at the Board of Directors meeting held on May 12, 2021 andNovember 4, 2021
F-73

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Reason for repurchasing treasury stock The repurchase was made to promote capital efficiency by repurchasing flexibly its common stock while
comprehensively considering factors such as its investment in growth, level of its dividends, its cash reserves andthe price level of its common stock.
Details of matters relating to repurchase Number of common shares repurchased . . . . . . . . . . . . . . . . . . . . . . . . .
Total purchase price for repurchase of shares . . . . . . . . . . . . . . . . . . . . .

96,196,900 shares¥400,000 million

2) Repurchasing of treasury stock resolved at the Board of Directors meeting held on March 23, 2022
Reason for repurchasing treasury stock The repurchase was made to promote capital efficiency by repurchasing flexibly its common stock than
before while comprehensively considering factors such as the price level of its common stock.
Details of matters relating to repurchase Number of common shares repurchased . . . . . . . . . . . . . . . . . . . . . . . . .
Total purchase price for repurchase of shares . . . . . . . . . . . . . . . . . . . . .

F-74

2,111,000 shares¥4,607 million

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(5) Other components of equity
Other components of equity are as follows:
Yen in millions
Net changes inrevaluation offinancial assets
measured at fair
Exchangevalue through other Remeasurements ofdifferences oncomprehensive
defined benefit
translating foreign
incomeplans
operations

Balance at April 1, 2019 . . . . . . . . . . . . . . . . .
Other comprehensive income, net oftax . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification to retained earnings . . .
Other comprehensive income for theperiod attributable to non-controllinginterests . . . . . . . . . . . . . . . . . . . . . . . .
Balance at March 31, 2020 . . . . . . . . . . . . . . .
Other comprehensive income, net oftax . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification to retained earnings . . .
Other comprehensive income for theperiod attributable to non-controllinginterests . . . . . . . . . . . . . . . . . . . . . . . .
Balance at March 31, 2021 . . . . . . . . . . . . . . .
Other comprehensive income, net oftax . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification to retained earnings . . .
Other comprehensive income for theperiod attributable to non-controllinginterests . . . . . . . . . . . . . . . . . . . . . . . .
Balance at March 31, 2022 . . . . . . . . . . . . . . .

Total

1,016,035——

1,016,035(58,946)(4,935)(54,176)
55,580(395,523)—(508,645)
50,644

1,916(1,404)27,002

27,514

954,070—(368,520)

585,549

380,814(31,321)

221,409(219,047)

410,253—

1,012,476(250,369)(8,211)(2,362)(29,357)(39,930)

1,295,351—

12,375

1,307,726(103,131)(59,110)

151,243(149,602)

1,095,017—

1,143,129(208,712)

1,561(1,640)(38,810)(38,889)—

1,068,583

2,203,254

1,134,671

F-75

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(6) Other comprehensive income
The breakdown of other comprehensive income and the corresponding tax benefits (including
non-controlling interests) are as follows:
Yen in millions
For the year ended
March 31, 2020
Before
Tax
After
tax
effecttax

Items that will not be reclassified to profit (loss)
Net changes in revaluation of financial assets measured at fair value
through other comprehensive income
Amount incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(353,261) 109,409(243,853)

Net changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(353,261) 109,409(243,853)

Remeasurements of defined benefit plans
Amount incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(48,426)

5,026(43,399)

Net changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(48,426)

5,026(43,399)

Shares of other comprehensive income of equity method investees
Amount incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

62,568—62,568Net changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

62,568—62,568Items that may be reclassified subsequently to profit (loss)
Exchange differences on translating foreign operations
Amount incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification to profit (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(390,427)
28,329——(390,427)
28,329Net changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net changes in revaluation of financial assets measured at fair value
through other comprehensive income
Amount incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification to profit (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(362,098)—(362,098)

141,795
20,380(43,367)(5,417)98,427
14,963

Net changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

162,174(48,784)

113,390

Shares of other comprehensive income of equity method investees
Amount incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification to profit (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(35,253)———(35,253)—

Net changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(35,253)—(35,253)

Total other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(574,296)

65,651(508,645)

F-76

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Yen in millions
For the year ended
March 31, 2021
Before
Tax
After
tax
effecttax

Items that will not be reclassified to profit (loss)
Net changes in revaluation of financial assets measured at fair value
through other comprehensive income
Amount incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

560,225 (172,798)

387,427

Net changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

560,225 (172,798)

387,427

Remeasurements of defined benefit plans
Amount incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

311,360(95,087)

216,272

Net changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

311,360(95,087)

216,272

Shares of other comprehensive income of equity method investees
Amount incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

80,472—80,472

Net changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

80,472—80,472Items that may be reclassified subsequently to profit (loss)
Exchange differences on translating foreign operations
Amount incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification to profit (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

403,636———

403,636—

Net changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

403,636—

403,636

Net changes in revaluation of financial assets measured at fair value
through other comprehensive income
Amount incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification to profit (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(119,441)—

35,938—(83,503)—

Net changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(119,441)

35,938(83,503)

Shares of other comprehensive income of equity method investees
Amount incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification to profit (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,172
—

—
—

8,172
—

Net changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,172

—

8,172

Total other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,244,424 (231,947) 1,012,476

F-77

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Yen in millions
For the year ended
March 31, 2022
Before
Tax
After
tax
effecttax

Items that will not be reclassified to profit (loss)
Net changes in revaluation of financial assets measured at fair value
through other comprehensive income
Amount incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(71,641)

22,399(49,242)

Net changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(71,641)

22,399(49,242)

Remeasurements of defined benefit plans
Amount incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

188,239(51,989)

136,250

Net changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

188,239(51,989)

136,250

Shares of other comprehensive income of equity method investees
Amount incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

113,641—

113,641

Net changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

113,641—

113,641

Items that may be reclassified subsequently to profit (loss)
Exchange differences on translating foreign operations
Amount incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification to profit (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

902,844———902,844—

Net changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

902,844—902,844

Net changes in revaluation of financial assets measured at fair value
through other comprehensive income
Amount incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification to profit (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(220,711)
1

66,536 (154,175)(0)1

Net changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(220,710)

66,536(154,174)

Shares of other comprehensive income of equity method investees
Amount incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification to profit (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

193,811———

193,811—

Net changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

193,811—

193,811

Total other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,106,184

F-78

36,945 1,143,129

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(7) Dividends
The paid dividend amounts are as follows:
For the year ended March 31, 2020

Resolution

Type of shares

Total amountof dividends Dividend per share(yen in millions)(yen)

The Board of
Directors Meetingon May 8,
2019 . . . . . . . . . . Common shares

339,893120.00

The Board of
Directors Meetingon November 7,
2019 . . . . . . . . . . Common shares

278,908

100.00Record date

March 31, 2019

Effective date

May 24, 2019

September 30, 2019 November 27, 2019

For the year ended March 31, 2021

Resolution

Type of shares

Total amountof dividends Dividend per share(yen in millions)(yen)

The Board of
Directors Meetingon May 12,2020 . . . . . . . . . . . Common shares

331,938

120.00

The Board of
Directors Meetingon November 6,2020 . . . . . . . . . . . Common shares

293,576105.00Record date

March 31, 2020

Effective date

May 28, 2020

September 30, 2020 November 27, 2020

For the year ended March 31, 2022

Resolution

Type of shares

Total amountof dividends Dividend per share(yen in millions)(yen)

The Board of
Directors Meetingon May 12,2021 . . . . . . . . . . . Common shares

377,453135.00

The Board of
Directors Meetingon November 4,2021 . . . . . . . . . . . Common shares

332,419120.00F-79

Record date

March 31, 2021

Effective date

May 28, 2021

September 30, 2021 November 25, 2021

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Dividends of which record date falls within the year ended March 31, and effective date is after the year
ended March 31 are as follows:
For the year ended March 31, 2022

Resolution

Type of shares

The Board of
Directors Meetingon May 11,2022 . . . . . . . . . . . Common shares

Total amountof dividends Dividend per share(yen in millions)(yen)385,792

28.00

Record date

Effective date

March 31, 2022

May 27, 2022

On October 1, 2021, TMC effected a five-for-one stock split of its common stock to shareholders. The
dividend per share amount based on the Board of Directors Meeting on November 4, 2021 is an amount before
the stock split. The dividend per share amount based on the Board of Directors Meeting on May 11, 2022 is anamount after the stock split.
26. Sales revenues(1) Summary by business segments and products
The table below shows Toyota’s sales revenues from external customers by business and by productcategory.
Yen in millions
For the years ended March 31
2020
2021
2022

Sales of products
Automotive
Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Parts and components for production . . . . . . . . . . . . . . . . .
Parts and components for after service . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22,647,701
1,197,089
2,170,448
755,141

20,509,606
1,287,053
2,049,187
752,000

23,739,442
1,504,215
2,407,143
881,193

Total automotive . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

26,770,379
923,314

24,597,846
479,553

28,531,993
541,436

Total sales of products . . . . . . . . . . . . . . . . . . . . . . . . .
Financial services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27,693,693
2,172,854

25,077,398
2,137,195

29,073,428
2,306,079

Total sales revenues . . . . . . . . . . . . . . . . . . . . . .

29,866,547

27,214,594

31,379,507

The majority of sales of products are revenues recognized from contracts with customers under IFRS 15“Revenue from Contracts with Customers” (“IFRS 15”), and receivables related to such revenues are recognized
as “Trade accounts and other receivables”.

F-80

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The breakdown of income from leases included in financial service revenues is as follows:
Yen in millions
For the years ended March 31,
2020
2021
2022

Finance leases
Financial income related to net lease investment . . . . . . . . . . . .
Operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

98,865
1,051,822

106,724
1,017,707

134,512
1,093,545

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

1,150,688

1,124,431

1,228,057

Financial service revenues other than income from leases mainly consist of interest income using theeffective interest method. The amount of interest income using the effective interest method is not significant.
For the years ended March 31, 2020, 2021 and 2022 ¥127,113 million, ¥125,748 million and¥138,718 million of financial service revenues were accounted for under IFRS 15.
(2) Contract liabilities
Contract liabilities consist of the following:
Yen in millions
March 31,
2021
2022

Contract liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

854,679

989,959

Contract liabilities are primarily related to advances received from customers. Contract liabilities areincluded in “Other current liabilities” and “Other non-current liabilities” in the consolidated statement offinancial position. For the year ended March 31, 2021 and 2022, the amounts transferred from contract liabilities
at the beginning of the fiscal year to operating income were ¥370,278 million and ¥444,781 million, respectively.
(3) Performance obligations
The aggregate amounts of transaction prices allocated to unsatisfied performance obligations related tocontracts that have original expected durations in excess of one year were ¥618,668 million and ¥796,769 million
as of March 31, 2021 and 2022, respectively. The main contents of unsatisfied performance obligations are
insurance revenues and maintenance revenues.
For insurance revenues, Toyota receives payment agreed upon in the contract at the inception of thecontract, and revenue is recognized over the term of the contract, which ranges from three to 120 months. As of
March 31, 2021, the unsatisfied performance obligations related to insurance revenues were ¥237,805 million,
and Toyota expected to recognize as revenue ¥67,537 million in fiscal 2022, and ¥170,268 million thereafter. As
of March 31, 2022, the unsatisfied performance obligations related to insurance revenues were ¥295,648 million,
and Toyota expects to recognize as revenue ¥82,215 million in fiscal 2023, and ¥213,432 million thereafter.
For maintenance revenues, Toyota receives payments agreed upon in the contract at the inception of thecontract, and revenue is recognized over the term of the contract, which ranges from 18 to 84 months.
Unsatisfied performance obligations for sales of products related to contracts that have an original expected
duration of one year or less have been excluded from this disclosure.
F-81

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
27. Research and development cost
Research and development costs consist of the following:
Yen in millions
For the years ended March 31,
2020
2021
2022

Research and development expenditures incurred during the year . . . . . . . . .
Amount capitalized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of capitalized development costs . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,110,369 1,090,424 1,124,262(164,127) (158,246) (200,512)
149,776
152,542
167,926
1,096,019

1,084,721

1,091,675

28. Other finance income and costs
Other finance income and costs consist of the following:
Yen in millions
For the years ended March 31,
2020
2021
2022

Other finance income
Interest income
Financial assets measured at amortized cost . . . . . . . . . . . . . . . . . .
Financial assets measured at fair value through othercomprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividend income
Financial assets measured at fair value through othercomprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

37,201

17,526

16,92084,62988,074

84,592110,243
73,772

88,837240,791

94,833
138,416

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

305,846435,229

334,760

Other finance costs
Interest expense
Financial liabilities measured at amortized cost . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(44,114)(3,041)(42,421)(5,116)(32,458)(11,539)

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

(47,155)(47,537)(43,997)

The decrease in “Other finance income—Other” was due mainly to a decrease during fiscal 2022 in profit
on sales of securities.

F-82

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
29. Earnings per share
Reconciliation of the difference between basic and diluted earnings per share attributable to Toyota Motor
Corporation are as follows:
Thousands
Yen in millionsof shares
Yen
Net income
Earnings per share
attributable to Toyota Weighted-average attributable to Toyota
Motor Corporationcommon shares
Motor Corporation

For the year ended March 31, 2020
Net income attributable to Toyota Motor
Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Basic earnings per share attributable to Toyota
Motor Corporation . . . . . . . . . . . . . . . . . . . .
Effect of dilutive securities
Model AA Class Shares . . . . . . . . . . . . . . . . . .

2,036,140
2,036,140

13,994,590

13,265

235,500

Diluted earnings per share attributable to Toyota
Motor Corporation . . . . . . . . . . . . . . . . . . . . . . . .

2,049,405

14,230,090

144.02For the year ended March 31, 2021
Net income attributable to Toyota Motor
Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,245,261
2,245,261

13,976,442

160.65

12,569229,694

Diluted earnings per share attributable to Toyota
Motor Corporation . . . . . . . . . . . . . . . . . . . . . . . .

2,257,830

14,206,137

158.93For the year ended March 31, 2022
Net income attributable to Toyota Motor
Corporation . . . . . . . . . . . . . . . . . . . . . . . . .

2,850,110
2,850,110

13,887,348

205.2323311

2,850,132

13,887,659

Basic earnings per share attributable to Toyota
Motor Corporation . . . . . . . . . . . . . . . . . . . .
Effect of dilutive securities
Model AA Class Shares . . . . . . . . . . . . . . . . . .

Basic earnings per share attributable to Toyota
Motor Corporation . . . . . . . . . . . . . . . . . . . .
Effect of dilutive securities
Model AA Class Shares . . . . . . . . . . . . . . . . . .
Diluted earnings per share attributable to Toyota
Motor Corporation . . . . . . . . . . . . . . . . . . . . . . . .

145.49205.23

In addition to the disclosure requirements under IFRS, Toyota discloses the information below in order toprovide financial statements users with valuable information.

F-83

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table shows Toyota Motor Corporation shareholders’ equity per share. Toyota Motor
Corporation shareholders’ equity per share amounts are calculated by dividing Toyota Motor Corporation
shareholders’ equity in the consolidated statement of financial position by common shares issued and outstandingat the end of the year (excluding treasury stock).

Toyota Motor
Corporation
shareholders’ equity

Thousandsof shares
Common shares issued
and outstanding at theend of the year
(excluding treasury
stock)

Toyota Motor
Corporation
shareholders’ equity
per share

23,404,547
26,245,969

13,979,743
13,778,302

1,674.18
1,904.88

Yen in millions

As of March 31, 2021 . . . . . . . . . . . . . . . . . . . . . . .
As of March 31, 2022 . . . . . . . . . . . . . . . . . . . . . . .

Yen

On October 1, 2021, TMC effected a five-for-one stock split of its common stock to shareholders. “Basicearnings per share attributable to Toyota Motor Corporation”, “Diluted earnings per share attributable to Toyota
Motor Corporation” and “Toyota Motor Corporation shareholders’ equity per share” are calculated based on theassumption that the stock split was implemented at the beginning of the earliest period presented in this note.
30. Contractual commitments and contingent liabilities(1) Contractual commitments
Contractual commitments relating to purchase of property, plant and equipment, other assets, and services
are ¥359,214 million, ¥349,143 million as of March 31, 2021 and 2022.
(2) 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, 2022,
range from 1 month to 8 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 payment.
The maximum potential amount of future payments are ¥3,710,352 million and ¥3,641,978 million as ofMarch 31, 2021 and 2022. Liabilities for guarantees totaling ¥18,493 million, and ¥21,869 million have been
provided as of March 31, 2021 and 2022. Under these guarantee contracts, Toyota is entitled to recover any
amount paid by Toyota from the customers whose original obligations Toyota has guaranteed.
(3) Market treatment such as recalls, damages and lawsuits
Toyota and other automakers have been named in certain class actions filed in Mexico, Canada, Australia,
Israel and Brazil relating to Takata airbag issues. The actions in Mexico, Israel and Brazil are being litigated. The
action in Australia is in the process of resolution.
Toyota is named as a defendant in an economic loss class action lawsuit in Australia in which damages areclaimed on the basis that diesel particulate filters in certain vehicle models are defective. On April 7, 2022,
Toyota received an unfavourable judgment in the court of first instance. The judgment included a finding that
there was a perceived reduction in vehicle value of certain vehicle models. Toyota disagrees with the judgment
and has filed an appeal. Other claims of economic loss in this class action lawsuit continue to be litigated at the
F-84

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
court of first instance. In estimating the provision we should record in the consolidated financial statements as aresult of the aforementioned judgment, Toyota has considered various factors including the legal and factual
circumstances of the case, the contents of the judgement of the court of first instance, and the views of legal
counsel. The currently estimated probable economic outflow related to the class action is immaterial to Toyota’s
consolidated financial position, results of operations and cash flows. At this stage, however, the final outcome
and therefore ultimate financial liability for Toyota on account of this matter cannot be predicted with certainty.
As previously disclosed, Toyota entered into a consent decree on January 14, 2021 with the U.S. EPA, theDepartment of Justice (“DOJ”) and the Civil Division of the U.S. Attorney’s Office for the Southern District of
New York (“SDNY”) to resolve investigations stemming from a self-reported process gap in fulfilling certain
emissions defect information reporting requirements. Under the consent decree, Toyota agreed to pay, and has
paid, a $180 million civil penalty and to comply with certain additional periodic reporting requirements. The U.S.
District Court for the Southern District of New York approved the consent decree on April 2, 2021.
In April 2020, Toyota reported possible anti-bribery violations related to a Thai subsidiary to the SEC andthe DOJ, and is cooperating with their investigations. Investigations by governmental authorities related to thesematters could result in the imposition of civil or criminal penalties, fines or other sanctions, or litigation. Toyota
cannot predict the scope, duration or outcome of these matters at this time.
Toyota also has various other pending legal actions and claims, including without limitation personal injury
and wrongful death lawsuits and claims in the United States, as well as intellectual property litigation, and issubject to government investigations from time to time.
Beyond the amounts accrued with respect to all aforementioned matters, Toyota is unable to estimate a
range of reasonably possible loss, if any, for the pending legal 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. Therefore,
for all of the aforementioned matters, which Toyota is in discussions to resolve, any losses that are beyond theamounts accrued could have an adverse effect on Toyota’s financial position, results of operations or cash flows.
TMC has a concentration of labor supply in employees working under collective bargaining agreements anda substantial portion of these employees are working under the agreement that will expire on December 31, 2023.
31. Details of company organization(1) Major subsidiaries
Toyota’s major subsidiaries are follows;
Toyota primarily conducts business in the automotive industry. Toyota also conducts business in financeand other industries.
Automobiles are mainly manufactured by TMC, Hino Motors Ltd. and Daihatsu Motor Co., Ltd., but someof them are outsourced in Japan. Toyota Motor Manufacturing Kentucky, Inc. and others manufacture overseas.
Auto parts are manufactured by TMC and others. These products are sold through dealers such as TOYOTA
Mobility Tokyo Inc. in Japan, and through dealers such as Toyota Motor Sales, U.S.A., Inc. overseas.
F-85

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In the financing business, Toyota Finance Corporation and others provide sales finance services in Japanand Toyota Motor Credit Corporation and others overseas.
Other business consists of information technology business and others.
(2) Structured entities(i)

Consolidated structured entities

Toyota periodically securitizes receivables related to financial services and vehicles on leases for liquidityand funding purposes and transfers them to special purpose entities. Toyota is deemed to have the power to direct
the activities of these entities that most significantly impact the entities’ economic performances. Therefore,
Toyota has consolidated them.
The creditors of these entities 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.
Toyota has equity in investment trusts and other special purpose entities. With respect to some of theinvestment trusts, Toyota has both the obligation to absorb losses of or the right to receive benefits from theinvestment trusts that could potentially be significant to the investment trusts and the power to direct theactivities of the investment trusts that most significantly impact the investment trusts’ economic performancethrough the asset manager. Therefore, Toyota has consolidated them.
Related to securitization transactions, ¥3,132,734 million and ¥3,367,601 million receivables related tofinancial services, ¥3,211,211 million and ¥3,882,623 million secured debt were included in Toyota’s
consolidated financial statements as of March 31, 2021 and 2022, respectively.
(ii) Unconsolidated structured entities
Other investment trusts and other special purpose entities are instructed based on contractual arrangements,
and are designed so that voting or similar rights are not the dominant factor in deciding who controls the entities.
The trusts and the special purpose entities are defined as structured entities but are determined that Toyota lacks
the power to direct the activities of these investments that most significantly impact the trust’s economic
performance and, therefore does not consolidate the investment trusts and the special purpose entities.
Investments in the investment trusts and the special purpose entities are held at fair value and are included in“Other financial assets” in the consolidated statement of financial position. The maximum exposure to loss islimited to the carrying value of its investment. The carrying value of the trusts totaled ¥37,397 million and¥18,829 million as of March 31, 2021 and 2022, respectively. The carrying value of the special purpose entities
totaled ¥1,240,530 million and ¥1,073,137 million as of March 31, 2021 and 2022, respectively. Toyota does notprovide support that is not contractually required to the investments.

F-86

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
32. Related party transactions(1) Transactions with associates and joint ventures
The balances and turnover of receivables and payables with associates and joint ventures accounted forunder the equity method are as follows:
Yen in millions
March 31,
2021
2022

Trade accounts and other receivables
Associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

265,938
44,481

302,21264,195

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

310,419

366,407

Trade accounts and other payables
Associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

855,997 1,086,397
656
5,112
856,653

1,091,509

Yen in millions
For the years ended March 31,
2020
2021
2022

Sales revenues
Associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,928,468
489,735

1,138,144
499,437

1,948,681
413,703

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

2,418,202

1,637,582

2,362,384

Cost of products sold (purchases)
Associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,694,395
86,747

5,983,797
51,434

7,946,788
308

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

6,781,142

6,035,231

7,947,095

Dividends from associates and joint ventures accounted for under the equity method are ¥205,101 millionand ¥252,557 million for the years ended March 31, 2021 and 2022, respectively. In addition, Toyota does notengage in transactions with associates and joint ventures outside of the normal course of business.
(2) Compensation of key management
The compensation for the directors and audit & supervisory board members of TMC is as follows:
Yen in millions
For the years ended March 31,
2020
2021
2022

Monthly compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bonus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,023
1,039
477
—

987
748
364
747

1,083
196
772
—

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

2,540

2,847

2,051

F-87

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)“Other” refers to income tax compensation that was granted to a member of the Board of Directors,
Mr. Didier Leroy, with respect to his remuneration during the period in which he served as a member of theBoard of Directors. Mr. Leroy retired on June 11, 2020.
33. Supplemental cash flow information“Other, net” in cash flows from investing activities includes a net increase in time deposits of ¥1,700,254
million and a net decrease in time deposits of ¥2,070,726 million for the year ended March 31, 2021 and 2022,
respectively.
34. Significant subsequent events
Not applicable.

F-88

ITEM 19. EXHIBITS
Index to Exhibit
1.1

Amended and Restated Articles of Incorporation of the Registrant (English translation)

1.2

Amended and Restated Regulations of the Board of Directors of the Registrant (English
translation)

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, 2016, filed with the SEC on June 24, 2016 (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, 2021, filed with the SEC on June 24, 2021 (file no. 001-14948))

2.2

Form of Amended and Restated Deposit Agreement among the Registrant, The Bank of
New York Mellon, as depositary, and all owners and holders from time to time of American
Depositary Shares issued thereunder, including the form of American Depositary
Receipt(incorporated by reference to Exhibit 1 to Toyota’s Registration Statement on Form F-6,
filed with the SEC on September 21, 2021 (file no. 333-259683))

2.3

Form of American Depositary Receipt (included in Exhibit 2.2)

2.4

Description of Toyota’s Common Stock (incorporated by reference to “Item 10.B. Memorandum
and Articles of Incorporation” of this annual report)

2.5

Description of Toyota’s American Depositary Shares

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 members of the board of directors and operating
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, 2021, filed with the SEC on June 24, 2021 (file no. 001-14948))

12.1

Certifications of the Registrant’s President and Member of the Board, as well as Member of theBoard, pursuant to Section 302 of the Sarbanes-Oxley Act

13.1

Certifications of the Registrant’s President and Member of the Board, as well as Member of theBoard, pursuant to Section 906 of the Sarbanes-Oxley Act

101.INS

Inline XBRL Instance Document — the instance document does not appear in the Interactive
Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

The cover page for the registrant’s Annual Report on Form 20-F for the year ended March 31,
2022, has been formatted in Inline XBRL124

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

Date: June 23, 2022

By:/s/ Masahiro Yamamoto

Name:
Title:

Masahiro Yamamoto
Chief Officer, Accounting GroupExhibit 1.1
ARTICLES OF INCORPORATION OF TOYOTA MOTOR CORPORATION(As amended on June 15, 2022)
CHAPTER I. GENERAL PROVISIONS
Article 1. (Trade Name)
The name of the Corporation shall be “Toyota Jidosha Kabushiki Kaisha” to be expressed in English as“TOYOTA MOTOR CORPORATION”.
Article 2. (Purpose)
The purpose of the Corporation shall be to engage in the following businesses:(1) the manufacture, sale, leasing and repair of motor vehicles, industrial vehicles, ships, aircraft, othertransportation machinery and apparatus, spacecraft and space machinery and apparatus, and parts
thereof;(2) the manufacture, sale, leasing and repair of industrial machinery and apparatus and other generalmachinery and apparatus, and parts thereof;(3) the manufacture, sale, leasing and repair of electrical machinery and apparatus, and parts thereof;(4) the manufacture, sale, leasing and repair of measuring machinery and apparatus, and medical
machinery and apparatus, and parts thereof;(5) the manufacture and sale of ceramics and products of synthetic resins, and materials thereof;(6) the manufacture, sale and repair of construction materials and equipment, furnishings and fixtures forresidential buildings;(7) the planning, designing, supervision, execution and undertaking of construction works, civilengineering works, land development, urban development and regional development;(8) the sale, purchase, leasing, brokerage and management of real estate;(9) the service of information processing, information communications and information supply, and thedevelopment, sale and leasing of software;(10) the design and development of product sales systems that utilize networks such as the Internet; sale,leasing, maintenance of computers included within such systems, and sales of products by utilizing
such systems;(11) the inland transportation, marine transportation, air transportation, stevedoring, warehousing andtourism businesses;(12) the printing, publishing, advertising and publicity, general leasing, security and workers dispatch
businesses;(13) the credit card operations, purchase and sale of securities, investment consulting, investment trust
operation, and other financial services;(14) 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;(15) the non-life insurance agency business and life insurance agency business;(16) the production and processing by using biotechnology of agricultural products including trees, and thesale of such products;

(17) power generation and the supply and sale of electric power(18) the sale of goods related to each of the preceding items and mineral oil;(19) the conducting of engineering, consulting, invention and research relating to each of the preceding
items and the utilization of such invention and research; and(20) any businesses incidental to or related to any of the preceding items.
Article 3. (Location of Principal Office)The principal office of the Corporation shall be located in Toyota City, Aichi Prefecture, Japan.
Article 4. (Public Notices)
Public notices of the Corporation shall be given electronically; provided, however, that in the case that anelectronic public notice is impracticable due to an accident or any other unavoidable reason, public notices of the
Corporation shall be given in the newspaper “The Nihon Keizai Shimbun”.

CHAPTER II. SHARESArticle 5. (Total Number of Authorized Shares)
The total number of shares which the Corporation is authorized to issue shall be fifty billion(50,000,000,000).
Article 6. (Number of Shares Constituting One Unit (tangen) and Rights to Shares Constituting Less than One
Unit (tangen))1.
(100).

The number of shares constituting one unit (tangen) of shares of the Corporation shall be one hundred

2. The shareholders of the Corporation are not entitled to exercise any rights to shares constituting lessthan one unit (tangen) of shares held by the shareholders, other than the rights provided for in each Item of
Article 189, Paragraph 2 of the Companies Act (Kaisha-hou).
Article 7. (Acquisition of Own Shares)
The Corporation may acquire its own shares by a resolution of the Board of Directors in accordance with theprovisions of Article 165, Paragraph 2 of the Companies Act.
Article 8. (Transfer Agent)
1.

The Corporation shall have a transfer agent (Kabunushimeibo-Kanrinin).

2. The transfer agent and the location of its office shall be designated by a resolution of the Board of
Directors, and public notice thereof shall be given. The register of shareholders and the register of stockacquisition rights shall be kept at the office of the transfer agent. The entry or recording into the register ofshareholders and the register of stock acquisition rights, the purchase of shares constituting less than one unit(tangen) and any other matters related to the shares and stock acquisition rights shall be handled by the transfer
agent and not by the Corporation.

Article 9. (Share Handling Regulations)
The procedures for and fees for the entry or recording into the register of shareholders and the register ofstock acquisition rights, purchasing shares constituting less than one unit (tangen) and any other matters relating
to the handling of shares and stock acquisition rights shall be subject to the Share Handling Regulations
established by the Board of Directors.
Article 10. (Record Date)
1. The Corporation shall deem any shareholder entered or recorded in the final register of shareholders asof March 31 in such year to be a shareholder entitled to exercise its rights at the ordinary general meeting ofshareholders for that business year.
2. In addition to the case provided for in the preceding paragraph, the Corporation may, after giving priorpublic notice, fix a date as the record date, where it deems it necessary to do so.
CHAPTER III. GENERAL MEETINGS OF SHAREHOLDERS
Article 11. (Ordinary General Meetings and Extraordinary General Meetings of Shareholders)
1. The ordinary general meeting of shareholders of the Corporation shall be convened in June of each year.
Extraordinary general meetings of shareholders may be called whenever necessary.
2. Each general meeting of shareholders may be convened at the place where the principal office of the
Corporation is located, or at a place adjacent thereto, or in Nagoya City.
Article 12. (Resolutions)
1. All resolutions of a general meeting of shareholders shall be adopted by a majority of the votes of theshareholders present at the meeting who are entitled to vote, unless otherwise provided by laws and regulationsor these Articles of Incorporation of the Corporation.
2. Special resolutions as specified by Article 309, Paragraph 2 of the Companies Act shall be adopted by
not less than two-thirds (2/3) of the votes of the shareholders present at the meeting who hold shares representing
in aggregate not less than one-third (1/3) of the voting rights of all shareholders who are entitled to vote.
Article 13. (Chairman of General Meeting)
1. The Chairman of the Board or the President of the Corporation shall preside as chairman at a general
meeting of shareholders.
2. In the event that the positions of both the Chairman of the Board and the President are vacant or thatboth of them are prevented from so presiding as chairman, another Director of the Corporation shall preside in
their place according to the order of precedence previously established by the Board of Directors.
Article 14. (Exercise of Voting Rights by Proxy)
1. A shareholder may exercise its voting rights by proxy, provided, however, that the proxy shall be ashareholder of the Corporation who is entitled to exercise its own voting rights.
2. In cases where the preceding paragraph applies, the shareholder or its proxy shall file with the
Corporation a document establishing the proxy’s power of representation for each general meeting ofshareholders.
3. The Corporation may refuse a shareholder having two (2) or more proxies attend a general meeting ofshareholders.

Article 15. (Measures for Electronic Provision of Information, etc.)
1. Upon convening a general meeting of shareholders, the Corporation shall provide information containedin reference documents for the general meeting of shareholders, business reports, financial statements andconsolidated financial statements and other documents to shareholders electronically pursuant to laws andregulations.
2. Among the matters to be provided electronically, the Corporation may choose not to include all or partof the matters stipulated in the Ordinance of the Ministry of Justice in the paper copy to be sent to shareholders
who have requested it by the record date for vesting voting rights.

CHAPTER IV. MEMBERS OF THE BOARD OF DIRECTORS AND BOARD OF DIRECTORS
Article 16. (Number of Directors)
The Corporation shall have no more than twenty (20) Directors.
Article 17. (Election of Directors)
1.

Directors shall be elected by a resolution of a general meeting of shareholders.

2. A resolution for the election of Directors shall be adopted by a majority vote of the shareholders present
at the meeting who hold shares representing in aggregate not less than one-third (1/3) of the voting rights of all
the shareholders who are entitled to vote.
3.

The election of Directors shall not be made by cumulative voting.

Article 18. (Term of Office of Directors)
1. The term of office of Directors shall expire at the closing of the ordinary general meeting ofshareholders to be held for the last business year of the Corporation ending within one (1) year after theirelection.
2. The term of office of any Director elected in order to increase the number of Directors or to fill avacancy shall be the balance of the term of office of the other Directors who hold office at the time of his/ herelection.
Article 19. (Board of Directors)
1.

The Corporation shall have a Board of Directors.

2. Notice of a meeting of the Board of Directors shall be dispatched to each Director and each Audit &Supervisory Board Member at least three (3) days before the date of the meeting. In case of urgency, however,such period may be shortened.
3. With respect to matters to be resolved by the Board of Directors, the Corporation shall deem that suchmatters were approved by a resolution of the Board of Directors when all the Directors express their agreement inwriting or by electronic records. Provided, however, that this provision shall not apply when any Audit &Supervisory Board Member expresses his/her objection to such matters.
4. In addition to the preceding two (2) paragraphs, the management of the Board of Directors shall be
subject to the Regulations of the Board of Directors established by the Board of Directors.

Article 20. (Representative Directors and Executive Directors)
1.

The Board of Directors shall designate one or more Representative Directors by its resolution.

2. The Board of Directors may appoint one Chairman of the Board, one President and one or more Vice
Chairmen of the Board and Executive Vice Presidents by its resolution.
Article 21. (Honorary Chairmen and Senior Advisors)
The Board of Directors may appoint Honorary Chairmen and Senior Advisors by its resolution.
Article 22. (Exemption from Liability of Directors)
In accordance with the provisions of Article 426, Paragraph 1 of the Companies Act, the Corporation may,by a resolution of the Board of Directors, exempt Directors (including former Directors) from liabilities provided
for in Article 423, Paragraph 1 of the Companies Act within the limits stipulated by laws and regulations.
Article 23. (Limited Liability Agreement with members of the Board of Directors)
In accordance with the provisions of Article 427, Paragraph 1 of the Companies Act, the Corporation may
enter into an agreement with Members of the Board of Directors (excluding Executive Members of the Board of
Directors, etc.) limiting liabilities provided for in Article 423, Paragraph 1 of the Companies Act; provided,
however, that the limit of the liability under the agreement shall be the minimum amount of liability stipulated bylaws and regulations.
CHAPTER V. AUDIT & SUPERVISORY BOARD MEMBERS AND AUDIT & SUPERVISORY BOARD
Article 24. (Establishment of Audit & Supervisory Board Members and Number of Audit & Supervisory Board
Members)
The Corporation shall have no more than seven (7) Audit & Supervisory Board Members.
Article 25. (Election of Audit & Supervisory Board Members)
1. Audit & Supervisory Board Members shall be elected by a resolution of a general meeting ofshareholders.
2. A resolution for the election of Audit & Supervisory Board Members shall be adopted by a majority
vote of the shareholders present at the meeting who hold shares representing in aggregate not less than one-third(1/3) of the voting rights of all the shareholders who are entitled to vote.
Article 26. (Term of Office of Audit & Supervisory Board Members)
1. The term of office of Audit & Supervisory Board Members shall expire at the closing of the ordinary
general meeting of shareholders to be held for the last business year of the Corporation ending within four(4) years after their election.
2. The term of office of any Audit & Supervisory Board Member elected to fill a vacancy shall be thebalance of the term of office of the Audit & Supervisory Board Member whom he/she succeeds.
Article 27. (Audit & Supervisory Board)
1.

The Corporation shall have an Audit & Supervisory Board.

2. Notice of a meeting of the Audit & Supervisory Board shall be dispatched to each Audit & Supervisory
Board Members at least three (3) days before the date of the meeting. In case of urgency, however, such period
may be shortened.

3. In addition to the provisions of the preceding paragraph, the management of the Audit & Supervisory
Board shall be subject to the Regulations of the Audit & Supervisory Board established by the Audit &Supervisory Board.
Article 28. (Full-time Audit & Supervisory Board Member)
The Audit & Supervisory Board shall, by its resolution, select one or more full-time Audit & Supervisory
Board Members.
Article 29. (Exemption from Liability of Audit & Supervisory Board Members)
In accordance with the provisions of Article 426, Paragraph 1 of the Companies Act, the Corporation may,by a resolution of the Board of Directors, exempt Audit & Supervisory Board Members (including former
Audit & Supervisory Board Members) from liabilities provided for in Article 423, Paragraph 1 of the Companies
Act within the limits stipulated by laws and regulations.
Article 30. (Limited Liability Agreement with Audit & Supervisory Board Members)
In accordance with the provisions of Article 427, Paragraph 1 of the Companies Act, the Corporation may
enter into an agreement with Audit & Supervisory Board Members limiting liabilities provided for in Article 423,
Paragraph 1 of the Companies Act; provided, however, that the limit of the liability under the agreement shall be
the minimum amount of liability stipulated by laws and regulations.

CHAPTER VI. ACCOUNTING AUDITOR
Article 31. (Accounting Auditor)
The Corporation shall have an Accounting Auditor (kaikeikansa-nin).

CHAPTER VII. ACCOUNTS
Article 32. (Business Year)The business year of the Corporation shall be one (1) year from April 1 of each year until March 31 of thefollowing year.
Article 33. (Dividends from Surplus, etc.)
1. Dividends from Surplus of the Corporation shall be paid to the shareholders or registered share pledgees
entered or recorded in the final register of shareholders as of March 31 of each year.
2. The Corporation may, by a resolution of the Board of Directors, distribute dividends from surplus asprovided for in Article 454, Paragraph 5 of the Companies Act to the shareholders or registered share pledgees
entered or recorded in the final register of shareholders as of September 30 of each year.
3. In addition to the preceding two (2) paragraphs, the Corporation may, by a resolution of the Board of
Directors, decide on matters provided for in each Item of Article 459, Paragraph 1 of the Companies Act.
4.

No interest shall be paid on unpaid dividends from surplus.

Article 34. (Dispensation from Payment of Dividends from Surplus, etc.)
In the case where the dividends from surplus are paid by cash, the Corporation shall not be obliged to pay
any dividends from surplus after three (3) years have expired from the date of tender thereof.

(Supplementary Provisions)
Article 1. The deletion of the Article 15. (Deemed Delivery of Reference Documents, etc. for General
Meeting of Shareholders) of the current Articles of Incorporation and the establishment of the proposed
Article 15. (Measures for Electronic Provision of Information, etc.) shall come into effect as of September 1,
2022, the date of enforcement of the amended provisions stipulated in the proviso to Article 1 of the
supplementary provisions of the Act Partially Amending the Companies Act (Act No. 70 of 2019) (the “EffectiveDate”).
Article 2. Notwithstanding the provisions of the preceding paragraph, Article 15. of the Articles ofIncorporation before the amendment shall remain in force with respect to a general meeting of shareholders to beheld on a date within six months from the Effective Date.
Article 3. These supplementary provisions shall be deleted after the lapse of six months from the Effective
Date or three months after the General Meeting of Shareholders mentioned in the preceding paragraph,
whichever is later.

Exhibit 1.2
For reference purpose only
(TRANSLATION)REGULATIONS OF
THE BOARD OF DIRECTORSOFTOYOTA MOTOR CORPORATION
Established: February 27, 1952
As last amended on June 1, 2022
(Aa004-28)
Article 1. (Regulations of the Board of Directors)
Except as provided for in laws, ordinances or the Articles of Incorporation, matters relating to the Board of
Directors of Toyota Motor Corporation (the “Company”) shall be governed by the provisions of theseRegulations.
Article 2. (Purpose and Composition)
1.

The Board of Directors shall be composed of all the Members of the Board of Directors and shall makedecisions on the execution of business, supervise the execution of the duties of Members of the Board of
Directors, and designate and dismiss the Representative Directors.

2.

Audit & Supervisory Board Members shall be present and, whenever necessary, give their opinions at a
meeting of the Board of Directors.

3.

The Board of Directors is able to request Operating Officers and other members admitted by the Chairman
to be present and give explanation or comment. However, Operating Officers and other members admitted
by the Chairman are not able to participate in resolutions.

Article 3. (Person to Convene Meeting and Notice of Meeting)1.

A meeting of the Board of Directors shall be convened by the Chairman of the Board of Directors or the
President, Member of the Board of Directors. In the event that the positions of both the Chairman of theBoard of Directors and the President, Member of the Board of Directors are vacant or that both of them areprevented from convening, such meeting shall be convened by the Vice Chairman of the Board of Directors,
or other Members of the Board of Directors in that order and according to their rank, if there are multiple
persons holding the same position.

2.

Notice of convening a meeting of the Board of Directors shall be dispatched to each Member of the Boardof Directors and each Audit & Supervisory Board Member at least three (3) days before the date of themeeting. In the case of urgency, however, such period may be shortened.

3.

A meeting of the Board of Directors may be held without following the convening procedure, if consented
to by all the Members of the Board of Directors and the Audit & Supervisory Board Members.

Article 4. (Chairmanship and Method of Adopting Resolutions)
1.

The Chairman of the Board of Directors or the President, Member of the Board of Directors shall preside aschairman at a meeting of the Board of Directors. In the event that the positions of both the Chairman of theBoard of Directors and the President, Member of the Board of Directors are vacant or that both of them areprevented from so presiding as chairman, the Vice Chairman of the Board of Directors, or other Members of
the Board of Directors, shall preside as chairman in that order and according to their rank in the case that
there are multiple persons holding the same position.

2.

Resolutions of the Board of Directors shall be adopted at meetings at which a majority of the Members of
the Board of Directors who are entitled to vote shall be present, by a majority of the Members of the Boardof Directors so present.

3.

With respect to matters to be resolved by the Board of Directors, the Company shall deem that such matterswere approved by a resolution of the Board of Directors when all the Members of the Board of Directors
express their agreement in writing or by electronic records. Provided, however, that this provision shall not
apply when any Audit & Supervisory Board Member expresses his/her objection to such matters.

4.

With respect to matters to be reported to the Board of Directors, Members of the Board of Directors,
Audit & Supervisory Board Members or Accounting Auditors shall not be required to report such matters to
the Board of Directors when such matters are notified to all the Members of the Board of Directors andAudit & Supervisory Board Members.

Article 5. (Matters to be Resolved)
The following matters shall be subject to the resolution of the Board of Directors:(1) Matters provided for in the Corporation Act or other laws or ordinances;(2) Matters provided for in the Articles of Incorporation;(3) Matters delegated to the Board of Directors by resolution of a general meeting of shareholders; and(4) Other important managerial matters.
Article 6. (Matters to Be Reported)
Members of the Board of Directors shall report to the Board of Directors on the following matters:(1) State of execution of business and such other matters as are provided for in the Corporation Act orother laws or ordinances; and(2) Such other matters as the Board of Directors may deem necessary.
Article 7. (Meetings and Minutes)
1.

A meeting of the Board of Directors shall be held in Japanese, minutes shall be prepared each time ameeting of the Board of Directors is held and such minutes shall be kept on file at the head office for ten
years.

2.

Minutes shall set forth matters provided for in the laws or ordinances and the Members of the Board of
Directors and Audit & Supervisory Board Members present shall sign or affix their names and seals thereto.

3.

Minutes shall be prepared in Japanese.

Supplementary Provisions
Article 1. (Effective Date)
These Regulations shall become effective as of June 1, 2022.
Article 2. (Amendment to Regulations)
Any amendment to these Regulations shall be made by a resolution of the Board of Directors.

MATTERS TO BE SUBMITTED TO THE BOARD OF DIRECTORS
General Rules of the “Matters To Be Submitted To The Board of Directors” (this “List”)
1.

Pursuant to Article 5(1), (2) and (3) of the Regulations of the Board of Directors, matters and items definedin I-1, 2 and 3 of this List shall, without fail, be submitted to the Board of Directors.

2.

In addition, pursuant to Article 5(4) of the Regulations of the Board of Directors, for matters and items
defined in I-4 of this List, materiality must be appropriately judged and matters must be submitted
accordingly to the Board of Directors.

3.

Materiality shall be determined by the Executive(s) and Executive General Manager(s) responsible for theirdivisions* taking into consideration “submission standards,” “special rules,” “definitions” and“explanations” in this List. If the amount of transaction does not meet the submission standards at first, butthere occurs a possibility that it may exceed such standards later on, such transaction shall be submitted to
the Board of Directors at the time such possibility arises.
Even if a proposal does not meet the monetary standards, for matters with high uncertainty in investment
recovery, potential significant losses, high geopolitical risks, or high reputation risks, etc., materiality shallbe appropriately judged based on such risks.

4.

Pursuant to Article 6 of the Regulations of the Board of Directors, matters and items defined in II of this
List shall be reported to the Board of Directors without delay.

*

Business Unit/Company President or Executive Vice President, or Chief Officer / Chief Executive Officer
or Deputy Chief Officer (TMC Executives’ meeting: Chairman of applicable meetings/ Divisions notbelonging to a group: Operating Officer or KANBUSHOKU responsible for an applicable division)Standard for re-submission
If material changes are made to a matter previously submitted to the Board of Directors (such as 20% ormore of increase in the amount approved by the Board of Directors), such matter shall be re-submitted to theBoard of Directors.
I. Matters to be Resolved:
1.

Matters provided for in the Companies Act or other laws or ordinances:Classifications

Items

Relevant Articles of Applicable Law

Shares; stockacquisition rights:

Fixing the record date

Article 124

Acquisition of the Company’s own shares heldby its subsidiaries

Article 163

Cancellation of the Company’s own shares

Article 178

Share-splits

Article 183

Free Allotment of shares

Article 186

Reduction of the number of shares constituting
one unit (tangen) of shares or abolition of theprovisions which define such number

Article 195

Auction of shares held by shareholders whose
whereabouts are unknown

Article 197

Classifications

Items

Relevant Articles of Applicable Law

Issuance of new shares

Article 201

Disposition of the Company’s own shares

Article 201

Approval of undertaking a contract for the total
number of shares of subscription or similar ones
with transfer restrictions

Articles 205 and 244

Issuance of stock acquisition rights

Article 240

Approval of transferring stock acquisition rights
with transfer restrictions

Article 265

Acquisition of stock acquisition rights withacquisition clause

Articles 273 and 274

Cancellation of stock acquisition rights

Article 276

General meetings ofshareholders:Free Allotment of stock acquisition rights

Board of Directors,
Members of theBoard of Directors:

Accounts:

Bonds:

Others:

Article 278

Convening of a general meeting of shareholders

Article 298

Designation and dismissal of Representative
Directors

Article 362

Approval of Members of the Board of Directors’competing transactions

Article 365

Approval of Members of the Board of Directors’transactions for their own account

Article 365

Approval of Members of the Board of Directors’transactions involving conflict of interests

Article 365

Approval of financial statements, business
reports and the accompanying detailed
statements

Article 436

Approval of extraordinary financial statements

Article 441

Approval of consolidated financial statements

Article 444

Reduction in the amount of capital (withconditions)

Article 447

Reduction in the amount of reserves (withconditions)

Article 448

Offering of bonds

Article 362

Issuance of bonds with stock acquisition rights

Article 240

Disposition
property*1

Article 362

andacquisitionofimportant

Borrowing of a large amount of money

Article 362

Appointment and removal of managers andother important employees

Article 362

Classifications

2.

Relevant Articles of Applicable Law

Establishment, alteration and abolition of branch
offices and other important organizations

Article 362

Development of a system to ensure theappropriateness of business operations of theCompany and business group consisting of theparent company and subsidiaries

Article 362

Other important business execution

Article 362

Matters provided for in the Articles of Incorporation:
Relevant Articlesof the Articles ofIncorporation

Classifications

Items

Shares:Acquisition of Company’s own shares

Articles 7

Selection of registration agent and its location ofbusiness

Article 9

Amendment to the Share Handling Regulations

Article 10

The order in which to assume chairmanship of ageneral meeting of shareholders

Article 13

Designation and dismissal of Members of theBoard of Directors with specific titles

Article 20

Amendment to the Regulations of the Board of
Directors

Article 19

Exemption of Members of the Board of
Directors from their liabilities

Article 22

General meeting ofshareholders:
Board of Directors;
Members of theBoard of Directors:

Audit & Supervisory
Board Members:
Exemption of Audit & Supervisory Board
Members from their liabilities

Article 29

Accounts:

Distribution of interim dividends from surplus

Article 33

Reduction in the amount of reserves

Article 33

Other disposition of surplus

Article 33

Distribution of dividends from surplus

Article 33

Appointment of Honorary Chairman and Senior
Advisor

Article 21

Others:3.

Items

Matters delegated to the Board of Directors by resolution of a general meeting of shareholders:Classifications

Items

Shares:Acquisition of Company’s own shares
Issuance of new shares or stock acquisition rights on favorable conditions

Others:Other matters delegated to the Board of Directors

4.

Other important managerial matters:
Classifications

Items

Management:

Business Plan (profit planning, Hoshin Guideline, etc.)
Important business alliances and important joint ventures
Launching of new projects
Short-form and simplified corporate splits
Short-form and simplified share exchanges
Simplified acquisition of an entire business of another company
Approval of interim and quarterly accounts
Approval of consolidated accounts (including interim and quarterly accounts)
Decision on filing a lawsuit or an appeal, or closing an important dispute
Other important matters

Personnel affairs;organization:

Assumption of office of executives in other companies (excluding the company’s
subsidiaries, in the case of new offices in listed companies only) by Members of theBoard of Directors (excluding Outside Members of the Board of Directors),
Operating Officers, and the head of group, in-house company and any otherorganization similar thereto
Assumption of office of executives in important associations (in the case of new
offices only) by Members of the Board of Directors (excluding Outside Members of
the Board of Directors), Operating Officers, and the head of group, in-house company
and any other organization similar thereto
Appointment and removal of assignment of Members of the Board of Directors andOperating Officers to take charge of the head of group, in-house company and anyother organization similar thereto
Treatment and discipline relating to Members of the Board of Directors andOperating Officers
Appointment and removal of Operating Officers
Appointment and removal of Senior Technical Executive (gikan) and Advisor(komon)Approval of Operating Officers’ competing transactions
Approval of Operating Officers’ transactions for their own accountApproval of Operating Officers’ transactions involving conflict of interests
Changes in important working conditions
Other important matters

Production;
Sales;
Technology
development:

Long-term or annual production, shipment or sales plans
Long-term or annual equipment plans
Licensing, acquisition or transfer of important intellectual property rights
Other important matters

Classifications

Items

Group management: Incorporation, dissolution, acquisition and transfer of subsidiaries
Important group managerial matters
Other important matters
Others:Other important managerial matters(For matters with high uncertainty in investment recovery, potential significant losses,
high geopolitical risks, or high reputation risks, etc., materiality shall be appropriately
judged based on such risks)

II. Matters to be reported:
Items

Relevant Articles of Applicable Law

State of execution of business

Article 363

Important facts about a competing transaction

Article 365

Important facts about any Member of the Board of
Director’s transactions for his/her own accounts

Article 365

Important facts about any transactions involving conflictof interests

Article 365

Monthly production/shipment/sales results—

Important matters, such as incorporation of subsidiaries bya joint venture company—

Management status of a system to ensure the appropriatenessof business operations of the Company and business groupconsisting of the parent company and subsidiaries

Article 362

Other important matters—

Appendix 1
Items

Standard(1) Disposition and acquisition of important property:1Acquisition and disposition of land andleaseholds

50,000,000,000 Yen or more per transaction

2

Investments (excluding fund management
investments)

50,000,000,000 Yen or more per transaction

3

Capital expenditure (excluding model change
and renewal of aging assets)

50,000,000,000 Yen or more per transaction

4

Loans (excluding renewal of bills and notes,
and loans as part of financial business)

50,000,000,000 Yen or more per transaction, or loans
outstanding of 50,000,000,000 Yen or more percompany

5

Discharge of debts

200,000,000 Yen or more per transaction

ItemsStandard

6

Donations (excluding those via Japan
Automobile Manufacturers Association, Inc.)

2,000,000,000 Yen or more per transaction
However, important matters will be submitted, even
if the amount for a new case or single case is lessthan 2,000,000,000 Yen(2) Disposition and acquisition of important property:

Important matters will be submitted at the initial
phase (overview, the maximum amount of money,etc.).
Deliberate a project as a whole. Multiple year
appropriation is allowed if necessary(Report is required)(3) Borrowings of large amounts of money:
1

Borrowing

50,000,000,000 Yen or more per transaction

2

Guarantee of obligations

All transactions(4) Appointment and removal of managers and otherimportant employees:

Promotion to Senior General Manager and above, as
well as appointment or removal of the head of group,
in-house company, and any other organizations
similar thereto
Appointment of operating officers at membershipcompanies (limited liability company, etc.) andlimited liability partnerships, and removal of
operating officers at such companies(5) Establishment, alteration and abolition of branch
offices and other important organizations:

Establishment, alteration and abolition of group,
in-house company, plant and any other organizations
similar thereto(*1) Acquisition and disposition of land and leaseholds
In the case where any of the acquisition price, book value, or transaction price is 50,000,000,000 Yen or
more per transaction, a submission shall be required.
However, in the case that the acquisition occurs for the purpose other than business, a submission shall be
required, even if the amount is less than 50,000,000,000 Yen.
(*2) Definition of “leaseholds”“Leasehold” is a right which is obtained by a temporary payment of concession money as a setup fee forleasehold, when leasing land for the purpose of owning buildings (excluding parking space, etc.).
(*3) Special rules regarding “membership companies (limited liability company, etc.) and limited liability
partnerships”(I)

An overall business plan must be submitted when a membership company (LLC, etc.) and LLP isestablished or investment is newly made.

(II) If material changes are made to a business plan previously submitted to a Board of Directors meeting,such matters shall be re-submitted to a Board of Directors meeting.

Appendix 2
Items

Standard(1) Business Plan (profit planning, Hoshin Guideline,etc.):
1

Definition of “Business Plan”(1) “Business Plan”

Short-term profit planning (revenue, capital
expenditure, R&D cost, etc.), Sales and Production
Plan, (initial annual plan, etc.), Mid-tem profit
planning, Vision, etc.

(2) “Hoshin Guideline”

Hoshin Guideline (if revised)(2) Important business alliances and important joint
ventures:1

2

Definition of “business alliance” and “joint
venture”(1) “usiness alliance”“Business alliance” shall be used when businesses
such as sales tie-up, continuous provision of
products, acceptance/entrustment of production, joint
production, joint development, or technology
licensing, etc., are commenced or terminated, ormaterial changes with respect to these businesses aremade(2) “Joint venture”“Joint venture” shall be used when Toyota Motor
Corporation (TMC) and a business partner or its
subsidiary make joint investment to establish or
acquire a joint venture company and have such joint
venture company conduct businesses for the purposesof the subject joint venture

Materiality standards for “Important businessalliances and important joint ventures”*1(1) Monetary standard

In case TMC plans to spend 50,000,000,000 Yen or
more in total for loan and investment, capital
expenditures, etc. at the beginning of the plan(2) Qualitative standard

In case the subject business alliance or joint venture(including with a dominant competitor) may
materially affect TMC’s management in terms ofsales, profits, etc.

(3) Launching of new projects:
1

Definition of “Launching of new projects”

Used when TMC launches a business not relating to
its existing business areas (such as automobiles,
industrial vehicles, housing, information andtelecommunication, boats and ships, airplanes,
biotechnology or financial businesses)

ItemsStandard

Other than launch of business by TMC itself, launchof business through business alliance or through its
subsidiary or joint venture company (excluding
companies in which TMC invests without being
required to include such companies’ operating results
in its consolidated financial statements pursuant to
the Financial Instruments and Exchange Act) shallalso be considered as “launching of new projects”(4) Decision on filing a lawsuit or an appeal, or closing
an important dispute*2:
1

Monetary standard

In case that value of subjects (amount TMC sues foror amount to be borne by TMC*3) is 10,000,000,000
Yen or more

2

Qualitative standard

In case of legal actions such as filing of legal action withrespect to important intellectual property rights or disputewith a public entity with respect to environmental issues,
which may materially affect TMC’s management,
business, rights or brand image, etc.

(*1) Materiality standards for “important business alliances and important joint ventures”
If a business alliance or joint venture falls under either the “Monetary standard” or “Qualitative standard”, itshall be submitted to the Board of Directors.
(*2) Materiality standards for “Decision on filing a lawsuit or an appeal, or closing an important dispute”
If a case falls under either “Monetary standard” or “Qualitative standard”, it shall be submitted to the Boardof Directors.
Appendix 3
Items

Standard(1) Materiality standards for “Assumption of offices ofand resignation from a director’s position in
important associations”:

In case that Members of the Board of Directors or
Operating Officers of TMC assume or resign from a
position such as chairman, board chairman,
committee chairman, etc. of Japan Business
Federation, The Japan Chamber of Commerce andIndustry, Japan Association of Corporate Executives,
Japan Automobile Manufacturer Association,Counsel of government authorities or other important
associations comparable to these associations(2) Materiality standards for “Changes in importantworking conditions”:

In case that certain actions such as changes inworking conditions with respect to employment
which may materially affect TMC’s management andemployees

Appendix 4
Materiality standard for “licensing, acquisition or transfer of important intellectual property rights”
Certain actions such as licensing of intellectual property rights relating to TMC’s essential technologies ortransfer of TMC’s trademark, which may materially affect TMC’s management, such licensing, transfer or
acquisition shall be deemed material.
Appendix 5
Items

Standard(1) Incorporation, dissolution, acquisition and transferof subsidiaries:
1

Definition of “Incorporation, dissolution,acquisition and transfer of subsidiaries”(1) “Subsidiary”

A joint stock company of which TMC holds amajority of its voting rights, or other companies
judged to be a subsidiary of TMC pursuant to
Article 3 of the Implementation Rules of theCompanies Act (including a membership company
such as a limited liability company, a partnership,
any other business entities similar thereto)(2) “Incorporation”

Used when a subsidiary is established(3) “Dissolution”

Used when a subsidiary is dissolved(4) “Acquisition”

Used when a subsidiary is obtained through, forexample, acquisition of shares (excluding cases
which fall under incorporation)(5) “Transfer”

Used when a company loses its status as a subsidiaryof TMC through, for example, TMC’s sale of sharesof the subsidiary (excluding cases which fall under
dissolution)(2) Important group managerial matters:
Matters will be submitted in accordance with the company’s submission standard in cases where business
operation of subsidiaries may have a great influence on the company’s group management or reputation.
Such cases include “Disposition and acquisition of important property”, “Borrowings of a large amount ofmoney”, “Business alliances and joint ventures” and “Launching of new projects.”
However, such submission may be omitted, in the case where submission of a matter is a formality, thematter virtually requires no managerial decision (transfer of land/equipment conducted between wholly
owned subsidiaries etc.) and the matter is judged not to have materiality.

Appendix 6
Items(1) Report of the execution status of business:

Standard

Improve contents of report to the supervision side
while enhancing the decision-making process by
operating officers(1) Progress of important investment in new
businesses and risk taking status shall be reported as
appropriate(2) As for report by in-house company/region, theannual plans will be confirmed in the Hoshin
Guideline. As for other organizations, report will bemade by project (Outside Board Member Meetingcan be utilized)(3) Progress of initiatives for important strategy/
mid-to long-term challenges shall be reported as
appropriate (e.g., matters related to sustainability,
corporate governance, and risk management, etc.)

Exhibit 2.5
DESCRIPTION OF THE AMERICAN DEPOSITARY SHARESThe terms of the American Depositary Shares, or ADSs, are contained in the amended and restated deposit
agreement dated as of September 21, 2021 among Toyota Motor Corporation, or Toyota, The Bank of New York
Mellon, as depositary, and Owners and Holders (as defined below). The principal executive office of thedepositary is located at 240 Greenwich Street, New York, New York 10286.
Each ADS represents an ownership interest in ten shares of Toyota’s common stock, which shares are heldwith a custodian for the depositary, currently Sumitomo Mitsui Banking Corporation. ADSs may be certificatedsecurities evidenced by American Depositary Receipts, or ADRs, or uncertificated securities. Subject to theconditions set forth in “— Limitations on Delivery, Registration of Transfer and Surrender of ADSs”:•

ADSs evidenced by ADRs, when the ADRs are properly endorsed or accompanied by proper
instruments of transfer, will be transferable as certificated registered securities under the laws of theState of New York; and•ADSs not evidenced by ADRs will be transferable as uncertificated registered securities under the lawsof the State of New York.

The following is a summary of the material provisions of the deposit agreement, and thus it does not containall information that may be relevant to Owners and Holders. Investors should read the entire deposit agreement(including the form of ADR) for complete information. Toyota has filed a copy of the form of deposit agreement
as an exhibit to Toyota’s annual report on Form 20-F, which can be accessed on the SEC’s website(https://www.sec.gov). Capitalized terms used but not defined have the meanings stated in the deposit agreement.
Owners and Holders“Owner” means the person in whose name ADSs are registered on the books of the depositary maintained
for that purpose. “Holder” means any person holding an ADR or a security entitlement or other interest in ADSs,
whether for its own account or for the account of another person, but that is not the Owner of that ADR or thoseADSs.
The depositary, notwithstanding any notice to the contrary, may treat the Owner of ADSs as the absolute
owner thereof for the purpose of determining the person entitled to distribution of dividends or other distributions
or to any notice provided for in the deposit agreement and for all other purposes, and neither the depositary nor
Toyota will have any obligation or be subject to any liability under the deposit agreement to any Holder of ADSs
(but only to the Owner of those ADSs).
Deposit of Shares and Delivery of ADSs
Shares of Toyota common stock, or the “Shares,” deposited with the custodian must be accompanied bydocuments specified in the deposit agreement. The custodian will hold all deposited Shares for the account of thedepositary. Owners and Holders thus have no direct ownership interest in the Shares and are not entitled to therights of holders of Shares. Owners and Holders only have those rights as are contained in the deposit agreement.
The custodian will also hold any additional securities, property and cash received on or in substitution for thedeposited Shares. The deposited Shares and any additional items are referred to as deposited securities.
Upon each deposit of Shares, receipt of related delivery documentation and compliance with the otherprovisions of the deposit agreement, including the payment of all fees, expenses, taxes and governmental charges
that may apply, the depositary will deliver to or upon the order of the person or persons entitled thereto thenumber of ADSs issuable in respect of that deposit. However, the depositary will deliver only whole numbers of
ADSs.

Surrender of ADSs and Withdrawal of Deposited Securities
Subject to the terms and conditions of the deposit agreement, Owners are entitled to delivery (to the extent
delivery can then be lawfully and practicably be made) of the deposited securities underlying the ADSs uponsurrender of ADSs to the depositary with delivery instructions for the deposited securities. In addition, Owners
must pay all fees, expenses, taxes and governmental charges that may apply. Upon satisfaction of the applicablerequirements, the depositary will direct the custodian to deliver to the surrendering Owner or to or upon the orderof the person or persons designated in the delivery instructions, the amount of deposited securities represented by
the surrendered ADSs.
Dividends and Other Distributions on Deposited Securities
Toyota may make various types of distributions with respect to the deposited securities. The depositary willtake the following actions with respect to such distributions.
Cash
The depositary will convert cash dividends or other cash distributions from foreign currency to U.S. dollars,
if this can be done on a reasonable basis, and promptly distribute the amount thus received to the Owners entitledto it.
If the depositary determines that the foreign currency it received is not convertible on a reasonable basis, thedepositary may either distribute the foreign currency received to, or hold the foreign currency it cannot convert
for the respective accounts of, the Owners entitled to receive them. The depositary will not invest the foreign
currency and it will not be liable for interest. If the exchange rates fluctuate during a time when the depositarycannot convert the foreign currency, you may lose some or all of the value of the distribution.
The depositary will endeavor to distribute cash in a practicable manner, and may deduct any taxes required
to be withheld, its fees, any expenses of converting foreign currency and transferring funds to the United States,and other expenses and adjustments. The depositary will distribute only whole U.S. dollars and cents and willround fractional cents to the nearest whole cent.
SharesIn the case of a distribution in Shares, the depositary may execute and deliver additional ADSs to evidence
the number of ADSs representing those Shares. Only whole ADSs will be issued. Any Shares that would result in
fractional ADSs may be sold and the net proceeds distributed to the Owners entitled thereto. If the depositary
does not deliver additional ADSs and Shares or ADSs are not sold, the existing ADSs will also represent the new
Shares.
RightsIn the case of a distribution of rights to subscribe for additional Shares or other securities, the depositary
may, to the extent deemed by it to be lawful and practical:•

if requested by Toyota, grant to all or certain Owners rights to instruct the depositary to purchase thesecurities to which the rights relate and deliver those securities or ADSs representing those securities toOwners;•if requested by Toyota, deliver the rights to or to the order of certain Owners; or•sell the rights to the extent practicable and distribute the net proceeds of that sale to Owners entitled tothose proceeds.

To the extent rights are not exercised, delivered or disposed of as described above, the depositary will
permit the rights to lapse unexercised. In that case, you will receive nothing. U.S. securities laws may restrict theability of the depositary to distribute rights or ADSs or other securities issued on exercise of rights to all or
certain Owners, and the securities distributed may be subject to restrictions on transfer.
Toyota has no obligation to file a registration statement under the Securities Act to make any rights
available to Owners. Any sale or lapse of rights may reduce Owners’ equity interest in Toyota.
Other Distributions
In the case of a distribution of securities or property other than those described above, the depositary will
distribute such securities or property to the Owners entitled to them in any manner it deems equitable andpracticable. If the depositary believes that such distribution cannot be made proportionately among the Owners
entitled thereto or it deems such distribution not to be lawful and feasible, it may adopt such other method as it
may deem equitable and practicable for effecting the distribution, including selling such securities or property
and distributing any net proceeds as cash to the Owners entitled thereto.
The depositary may choose any practicable method of distribution for any specific Owner, including the
distribution of foreign currency, securities or property, or it may retain such items on behalf of the Owner as
deposited securities. This means that you may not receive the distributions we make on our Shares or any value
for them if it is illegal or impractical for us to make them available to you. Further, there can be no assurance thatthe depositary will be able to convert any currency at a specified exchange rate or sell any property, rights,
Shares or other securities at a specified price, nor that any of those transactions can be completed within a
specified time period.
Record Date
The depositary may fix a record date for determining the Owners who will be entitled to receive
distributions, receive notices, or act on other matters. This record date will be as near as practicable to thecorresponding record date set by Toyota with respect to Shares.
Voting of Deposited Shares
After receiving voting materials from Toyota and if Toyota requests, the depositary will notify the Ownersof any shareholders’ meeting. This notice will describe how the Owner may instruct the depositary to exercise
the voting rights for the Shares represented by the Owner’s ADSs. If the depositary receives instructions from an
Owner of ADSs on or before a date set by the depositary, the depositary will endeavor to the extent practicable tovote the amount of Shares represented by those ADSs in accordance with such instructions. If the depositary does
not receive instructions from an Owner with respect to a matter and an amount of ADSs of that Owner on or
before the date established by the depositary for that purpose, the depositary will deem that Owner to have
instructed the depositary to give a discretionary proxy to a person designated by Toyota to vote the number of
Shares represented by that amount of ADSs as to that matter. However, no such instruction will be deemed given
and no such discretionary proxy will be given with respect to any matter unless Toyota provides written
confirmation to the depositary that (x) it wishes such a proxy to be given, (y) it reasonably does not know of any
substantial opposition to the matter, and (z) the proposal is not materially adverse to the interests of shareholders.
It is possible that Owners will not have the opportunity to cause the voting rights pertaining to the Shares
represented by their ADSs to be exercised according to their preferences. The depositary will not itself exercise
any voting discretion. Furthermore, neither the depositary nor its agents are responsible for any failure to carryout any voting instructions with respect to deposited securities, for the manner in which any vote is cast or for theeffect of any vote. This means that there may be nothing you can do if the Shares represented by your ADSs are
not voted as you requested.
Notices and Reports
If Toyota takes or decides to take (i) certain corporate actions, such as making cash or other distributions, or
granting rights, on deposited securities, setting a record date for a vote or redeeming, replacing or cancellingdeposited securities, or (ii) an action that effects or will effect a change of the name or legal structure of Toyota,
or that effects or will effect a change to the Shares, Toyota may request that the depositary disseminate, as
promptly as practicable at Toyota’s expense, related notices, reports and communications to all Owners orotherwise make them available to Owners in a manner that Toyota specifies as substantially equivalent to themanner in which those communications are made available to holders of Shares and compliant with therequirements of any securities exchange on which the ADSs are at such time listed.
Inspection of Transfer Books
The depositary will keep a register of all Owners and outstanding ADSs, which will be open for inspection
by Owners at the depositary’s office, but only for the purpose of communicating with Owners regarding Toyota’s
business or a matter related to the deposit agreement or the ADSs.
Disclosure of Interests
When required in order to comply with applicable laws and regulations or its articles of incorporation,
Toyota may from time to time request each Owner and Holder to provide to the depositary, and each Owner andHolder agrees to provide and consents to the disclosure of, information relating to:•

the capacity in which it holds ADSs;•

the identity of any Holders or other persons or entities then or previously interested in those ADSs andthe nature of those interests; and•any other matter where disclosure of such matter is required for that compliance.

Tender and Exchange Offers; Redemption, Replacement or Cancellation of Deposited Securities
The depositary will not tender deposited securities in any voluntary tender or exchange offer unless
instructed to do so by an Owner surrendering ADSs and subject to any conditions or procedures the depositary
may establish.
If deposited securities are redeemed for cash in a transaction that is mandatory and binding on thedepositary as a holder of deposited securities, the depositary will call for surrender of a corresponding number of
ADSs on a pro rata basis and distribute the net redemption money to the Owners of called ADSs upon surrenderof those ADSs.
If there is any change in the deposited securities such as a subdivision, combination or other reclassification,or any merger, consolidation, recapitalization or reorganization affecting Toyota in which the depositary receives
new securities or other property in exchange for or in lieu of the old deposited securities (a “replacement”), thedepositary will hold such new securities or other property as deposited securities under the deposit agreement.
However, if the depositary decides it would not be lawful or practical to hold such new deposited securities
because those new deposited securities could not be distributed to Owners or for any other reason, the depositary
may instead sell the new deposited securities and distribute the net proceeds upon surrender of the ADSs.
If there is a replacement and the depositary will continue to hold the new deposited securities, the depositary
may call for the surrender of outstanding ADRs to be exchanged for new ADRs specifically describing the new
deposited securities and the number of new deposited securities represented by each ADS. If the number of
Shares represented by each ADS decreases as a result of a replacement, the depositary may call for surrender ofthe ADSs to be exchanged for a lesser number of ADSs and may sell ADSs to the extent necessary to avoid
distributing fractions of ADSs in that exchange and distribute the net proceeds of that sale to the Owners entitledto them.
Amendment and Termination of Deposit Agreement
Toyota and the depositary may jointly amend the deposit agreement, and by so doing, the rights of Owners.
The Owners must be given at least 30 days’ notice of any amendment that imposes or increases any fees orcharges (except for taxes and other charges specifically payable by Owners under the deposit agreement), or thatwould otherwise prejudice any substantial existing right of Owners. Every Owner and Holder, at the time any
amendment so becomes effective, will be deemed, by continuing to hold ADSs or any interest therein, to consent
and agree to that amendment and to be bound by the deposit agreement as amended thereby. No amendment may
impair any Owner’s right to surrender ADSs and receive delivery of the deposited securities represented by them,
except to comply with requirements of law.
Toyota may initiate termination of the deposit agreement by notice to the depositary. The depositary may
initiate termination of the deposit agreement if (i) 60 days have expired after it delivered to Toyota a resignation
notice and a successor depositary has not accepted its appointment, or (ii) certain events have occurred, such as
certain insolvency events relating to Toyota, certain delisting events relating to the Shares or ADSs, distributions
that represent a return of substantially all the value of the deposited securities, there being no deposited
securities, or the deposited securities becoming become apparently worthless. If termination of the deposit
agreement is initiated, the depositary will terminate the deposit agreement by providing at least 90 days’ priornotice to all Owners.
At any time after the termination date, the depositary may sell the deposited securities then held and holdthe net proceeds from those sales, uninvested, unsegregated and without liability for interest, for the pro rata
benefit of the Owners of ADSs that remain outstanding. After making the sale, the depositary will have no
obligations except to account for those proceeds and other cash and as described in the following sentence. Afterthe termination date, the depositary will continue to receive distributions on deposited securities (that have notbeen sold), may sell rights and other property as provided in the deposit agreement, and deliver deposited
securities (or sale proceeds) upon surrender of ADSs (after payment or upon deduction of fees, expenses, taxes
and governmental charges) to Owners who surrender their ADSs.
After the termination date:•the depositary will not accept deposits of Shares or deliver ADSs;•

the depositary may refuse to accept surrenders of ADSs for the purpose of withdrawal of deposited
securities (that have not been sold);•the depositary will not be required to deliver cash proceeds of the sale of deposited securities until all
deposited securities have been sold; and•the depositary may discontinue the registration of transfers of ADSs and suspend the distribution ofdividends and other distributions on deposited securities to the Owners and need not give any further
notices or perform any further acts under the deposit agreement except as provided therein.

Limitations on Delivery, Registration of Transfer and Surrender of ADSs
The depositary or the custodian may refuse to:•deliver, register a transfer, or accept a surrender of ADSs;•

effect a split-up or combination of ADRs; or•

permit the withdrawal of deposited securities (unless the deposit agreement provides otherwise),until the depositor of Shares or the presenter of the ADR or instruction for registration of transfer or surrender of
ADSs not evidenced by an ADR has:•

paid all fees, expenses, taxes and governmental charges as required in the deposit agreement;•

provided the depositary or custodian with any information it may deem necessary or proper, including
without limitation, proof of identity and the genuineness of any signature; and•complied with all regulations that the depositary may establish under the deposit agreement.

The depositary may refuse to accept deposits of Shares for delivery of ADSs or to register transfers of ADSs
whenever it or Toyota considers it necessary or advisable to do so.
The depositary may refuse surrenders of ADSs for the purpose of withdrawal of deposited securities, but
only for:•temporary delays caused by closing of the depositary’s register or the register of holders of Shares
maintained by Toyota or the Foreign Registrar, or the deposit of Shares, in connection with voting at ashareholders’ meeting or the payment of dividends;•

the payment of fees, taxes and similar charges;•

compliance with any U.S. or foreign laws or governmental regulations relating to the ADSs or to thewithdrawal of the deposited securities; or•

any other reason that, at the time, is permitted under paragraph I(A)(1) of the general instructions toForm F-6 under the Securities Act of 1933 or any successor to that provision.

Limitation on Liability
The deposit agreement expressly limits the obligations and liability of the depositary, Toyota and its andToyota’s respective agents. The depositary and Toyota will not be liable:•

if they are prevented or hindered in performing any obligations by circumstances beyond their control,
including, without limitation, requirements of law, the terms of the deposited securities and acts of God;•for exercising or failing to exercise discretion under the deposit agreement;•

if they perform their obligations without negligence or bad faith;•

for any action or non-action based on advice or information from legal counsel, accountants, any personpresenting Shares for deposit, any Owner, or other competent person;•for the inability of any Owner or Holder to benefit from any distribution, offering, right or other benefit
that is made available to holders of deposited securities but is not, under the terms of the deposit
agreement, made available to Owners or Holders; or•for any special, consequential or punitive damages for any breach of the terms of the deposit agreement.

The deposit agreement also provides that the depositary and Toyota have no obligation to become involvedin any action, suit or other proceeding in respect of any deposited securities or in respect of the ADSs on behalfof any Owner or Holder or any other person.
Toyota and the depositary assume no obligation nor will they be subject to any liability under the deposit
agreement to any Owner or Holder, except that each agrees to perform its obligations specifically set forth in thedeposit agreement without negligence or bad faith. The depositary is not a fiduciary and does not owe a fiduciary
duty to Owners or Holders.
Liability of Owners for Taxes
Owners must pay any tax or other governmental charge payable by the custodian or the depositary on any
ADS or deposited security, or in connection with tender offers, exchange offers and certain other transactions
relating to the deposited securities. If an Owner owes any tax or other governmental charge, the depositary may(1) withhold any dividends or other distributions or the proceeds thereof, or (2) sell deposited securities anddeduct the amount owing from the net proceeds of that sale. In either case the Owner remains liable for any
shortfall. If any tax or governmental charge is required to be withheld on any non-cash distribution, thedepositary may sell the distributed property or securities to pay those taxes and distribute any remaining net
proceeds to the Owner entitled thereto.

Direct Registration System
In the deposit agreement, all parties to the deposit agreement acknowledge that the Direct Registration
System, also referred to as DRS, and the Profile Modification System, also referred to as Profile, will apply to the
ADSs. DRS is a system administered by The Depository Trust Company, or DTC, that facilitates interchange
between registered holding of uncertificated securities and holding of security entitlements in those securities
through DTC and a DTC participant. Profile is a required feature of DRS that allows a DTC participant, claiming
to act on behalf of an Owner of ADSs, to direct the depositary to register a transfer of those ADSs to DTC or its
nominee and to deliver those ADSs to the DTC account of that DTC participant without receipt by the depositaryof prior authorization from the Owner to register that transfer.
In connection with DRS/Profile, the parties to the deposit agreement acknowledge that the depositary will
not determine whether the DTC participant that is claiming to be acting on behalf of an Owner in requesting a
registration of transfer and delivery as described in the paragraph above has the actual authority to act on behalfof the Owner (notwithstanding any requirements under the Uniform Commercial Code). In the deposit
agreement, the parties agree that the depositary’s reliance on and compliance with instructions received by thedepositary through the DRS/Profile system and in accordance with the deposit agreement will not constitutenegligence or bad faith on the part of the depositary.
Governing Law
The deposit agreement is governed by the laws of the State of New York.

Exhibit 12.1
CERTIFICATIONS
I, Akio Toyoda, 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 flowsof 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 23, 2022/s/

Akio Toyoda

Akio Toyoda
President, Member of the Board of Directors
Toyota Motor Corporation

CERTIFICATIONS
I, Kenta Kon, 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 flowsof 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 23, 2022/s/

Kenta Kon

Kenta Kon
Member of the Board of Directors
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, 2022
(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:
Name:
Title:/s/

Akio Toyoda

Akio Toyoda
President, Member of the Board of Directors

Date: June 23, 2022

By:
Name:
Title:/s/

Kenta Kon

Kenta Kon
Member of the Board of Directors

Date: June 23, 2022
(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 U.S. Securities and Exchange
Commission or its staff upon request.)