As filed with the Securities and Exchange Commission on June 24, 2009

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

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

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

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

OR
For the fiscal year ended: March 31, 2009OR
For the transition period fromtoOR
Commission file number: 1-14948

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

1 Toyota-cho, Toyota City
Aichi Prefecture 471-8571
Japan+81 565 28-2121(Address of Principal Executive Offices)

Kiyohisa Funasaki
Telephone number: +81 565 28-2121
Facsimile number: +81 565 23-5800
Address: 1 Toyota-cho, Toyota City, Aichi Prefecture 471-8571, Japan(Name, telephone, e-mail and/or facsimile number and address of registrant’s contact person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of Each Class:Name of Each Exchange on Which Registered:
American Depositary Shares*
The New York Stock Exchange
Common Stock*** American Depositary Receipts evidence American Depositary Shares, each American Depositary Share representing two shares of the registrant’s Common Stock.
** No par value. Not for trading, but only in connection with the registration of American Depositary Shares, pursuant to the requirements of the U.S. Securities andExchange Commission.

Securities registered or to be registered pursuant to Section 12(g) of the Act:
None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by
the annual report: 3,135,882,475 Shares of Common Stock (including 85,076,834 Shares of Common Stock in the form of American
Depositary Shares) as of March 31, 2009
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 and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months(or for such shorter period that the registrant was required to submit and post such files):Yes ‘ No ‘
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of“accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer È
Accelerated filer ‘
Non-accelerated filer ‘
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP È
International Financial Reporting Standards as issued by the International Accounting Standards Board ‘
Other ‘If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has
elected to follow:
Item 17 ‘ Item 18 ‘
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the ExchangeAct):Yes ‘ No ÈTABLE OF CONTENTS
Page

ITEM 1.

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

1

ITEM 2.

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

1

ITEM 3.

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

1

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

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

1
4
4
4

ITEM 4.

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

7

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

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

7
7
45
45

ITEM 4A.

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

47

ITEM 5.

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

47

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

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

47
64
67
68
68
69
70

ITEM 6.

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

71

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

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

71
75
76
77
78

ITEM 7.

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

80

7.A
7.B
7.C

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

80
81
81

ITEM 8.

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

81

8.A
8.B

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

81
81

ITEM 9.

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

82

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

82
82
82
82
83
83

ITEM 10.

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

83

10.A
10.B
10.C

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

83
83
89

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

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

89
90
96
96
96
96

ITEM 11.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK . . .

96

ITEM 12.

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

98

ITEM 13.

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

99

ITEM 14.

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

99

ITEM 15.

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

99

ITEM 16.

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

100

ITEM 16A.

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

100

ITEM 16B.

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

100

ITEM 16C.

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

101

ITEM 16D.

EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES . . .

102

ITEM 16E.

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

102

ITEM 16G.

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

103

ITEM 17.

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

105

ITEM 18.

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

105

ITEM 19.

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

106

As used in this annual report, the term “fiscal” preceding a year means the twelve-month period ended
March 31 of the year referred to. All other references to years refer to the applicable calendar year, unless thecontext otherwise requires. As used herein, the term “Toyota” refers to Toyota Motor Corporation and its
consolidated subsidiaries as a group, unless the context otherwise indicates.
In parts of this annual report, amounts reported in Japanese yen have been translated into U.S. dollars for theconvenience of readers. Unless otherwise noted, the rate used for this translation was ¥98.23 = $1.00. This was
the approximate exchange rate in Japan on March 31, 2009.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
Written forward-looking statements may appear in documents filed with the Securities and Exchange
Commission, or the SEC, including this annual report, documents incorporated by reference, reports toshareholders and other communications.
The U.S. Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking
information to encourage companies to provide prospective information about themselves without fear of
litigation so long as the information is identified as forward looking and is accompanied by meaningful
cautionary statements identifying important factors that could cause actual results to differ materially from thoseprojected in the information. Toyota relies on this safe harbor in making forward-looking statements.
Forward-looking statements appear in a number of places in this annual report and include statements
regarding Toyota’s current intent, belief, targets or expectations or those of its management. In many, but not allcases, words such as “aim”, “anticipate”, “believe”, “estimate”, “expect”, “hope”, “intend”, “may”, “plan”,“predict”, “probability”, “risk”, “should”, “will”, “would”, and similar expressions, are used as they relate to
Toyota or its management, to identify forward-looking statements. These statements reflect Toyota’s current
views with respect to future events and are subject to risks, uncertainties and assumptions. Should one or more ofthese risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may varymaterially from those which are anticipated, aimed at, believed, estimated, expected, intended or planned.
Forward-looking statements are not guarantees of future performance and involve risks and uncertainties.
Actual results may differ from those in forward-looking statements as a result of various factors. Importantfactors that could cause actual results to differ materially from estimates or forecasts contained in the forwardlooking statements are identified in “Risk Factors” and elsewhere in this annual report, and include, among
others:(i) changes in economic conditions and market demand affecting, and the competitive environment in,
the automotive markets in Japan, North America, Europe 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 Canadian dollar and the British pound;(iii) Toyota’s ability to realize production efficiencies and to implement capital expenditures at thelevels and times planned by management;(iv) changes in the laws, regulations and government policies in the markets in which Toyota operates
that affect its automotive operations, particularly laws, regulations and policies relating to trade,
environmental protection, vehicle emissions, vehicle fuel economy and vehicle safety, as well as changes inlaws, regulations and government policies that affect Toyota’s other operations, including the outcome of
future litigation and other legal proceedings;(v) political instability in the markets in which Toyota operates;(vi) Toyota’s ability to timely develop and achieve market acceptance of new products; and(vii) fuel shortages or interruptions in transportation systems, labor strikes, work stoppages or otherinterruptions 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 are produced,
distributed or sold.

PART IITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not applicable.

ITEM 3. KEY INFORMATION
3.A SELECTED FINANCIAL DATA
You should read the U.S. GAAP selected consolidated financial information presented below together with“Operating and Financial Review and Prospects” and Toyota’s consolidated financial statements contained in thisannual report.

U.S. GAAP Selected Financial Data
The following selected financial data have been derived from Toyota’s consolidated financial statements.
These financial statements were prepared in accordance with U.S. GAAP.
Year Ended March 31,
2006
2007
2008
2009
(in millions, except share and per share data)

2005

2009

Consolidated Statement of Income Data:
Automotive:
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . ¥17,113,535 ¥19,338,144 ¥21,928,006 ¥24,177,306 ¥18,564,723 $188,992
Operating income (loss) . . . . . . . . . . . . .
1,452,535
1,694,045
2,038,828
2,171,905(394,876) (4,020)
Financial Services:
Revenues . . . . . . . . . . . . . . . . . . . . . . . . .
781,261
996,9091,300,548
1,498,354
1,377,548
14,024
Operating income (loss) . . . . . . . . . . . . .
200,853
155,817
158,495
86,494(71,947)(732)
All Other:
Revenues . . . . . . . . . . . . . . . . . . . . . . . . .
1,030,320
1,190,291
1,323,731
1,346,955
1,184,947
12,063Operating income . . . . . . . . . . . . . . . . . .
33,74339,74839,67933,080
9,913
101
Elimination of intersegment:
Revenues . . . . . . . . . . . . . . . . . . . . . . . . .
(373,590)(488,435)(604,194)(733,375)(597,648) (6,084)
Operating income (loss) . . . . . . . . . . . . .
(14,944)(11,268)1,681(21,104)(4,101)(42)
Total Company:
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . 18,551,526 21,036,909 23,948,091 26,289,240 20,529,570 208,995
Operating income (loss) . . . . . . . . . . . . .
1,672,187
1,878,342
2,238,683
2,270,375(461,011) (4,693)
Income (loss) before income taxes,
minority interest and equity inearnings of affiliated companies . . . . .
1,754,637
2,087,360(1) 2,382,516
2,437,222(560,381) (5,705)
Net income (loss) . . . . . . . . . . . . . . . . . . . . . .
1,171,260
1,372,180
1,644,032
1,717,879(436,937) (4,448)
Net income (loss) per share:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . .
355.35421.76512.09540.65(139.13)(1.42)
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . .
355.28421.62511.80540.44(139.13)(1.42)
Shares used in computing net income (loss)
per share, basic (in thousands) . . . . . . . . . .
3,296,092
3,253,450
3,210,423
3,177,445
3,140,417—
Shares used in computing net income (loss)
per share, diluted (in thousands) . . . . . . . . .
3,296,754
3,254,499
3,212,235
3,178,662
3,140,417
—

1

2005

Year Ended March 31,
2006
2007
2008
2009
2009
(in millions, except per share and numbers of vehicles sold data)

Consolidated Balance Sheet Data (end of period):
Total Assets: . . . . . . . . . . . . . . . . . . . . . . . . . . ¥24,335,011 ¥28,731,595 ¥32,574,779 ¥32,458,320 ¥29,062,037 $295,857
Short-term debt, including current portion of
long-term debt . . . . . . . . . . . . . . . . . . . . . . .
3,532,747
4,756,907
5,865,507
6,228,152
6,317,184
64,311Long-term debt, less current portion . . . . . . . .
5,014,925
5,640,490
6,263,585
5,981,931
6,301,469
64,150Shareholders’ equity . . . . . . . . . . . . . . . . . . . .
9,044,950 10,560,449 11,836,092 11,869,527 10,061,207 102,425
Common stock . . . . . . . . . . . . . . . . . . . . . . . . .
397,050
397,050
397,050
397,050
397,050
4,042
Other Data:
Dividends per share . . . . . . . . . . . . . . . . . . . . . ¥65.0 ¥
90.0 ¥
120.0 ¥
140.0 ¥
100.0 $
1.02
Number of vehicles soldJapan . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,381,325
2,364,484
2,273,152
2,188,389
1,944,823—
North America . . . . . . . . . . . . . . . . . . . . .
2,271,139
2,556,050
2,942,661
2,958,314
2,212,254—
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . .
978,963
1,022,781
1,223,628
1,283,793
1,061,954—
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
833,507880,661
789,637
956,509904,892—
Other* . . . . . . . . . . . . . . . . . . . . . . . . . . .
943,444
1,150,587
1,295,581
1,526,934
1,443,433—
Worldwide total . . . . . . . . . . . . . . . .

7,408,378

7,974,563

8,524,659

8,913,939

7,567,356—* “Other” consists of Central and South America, Oceania, Africa and the Middle East, etc.
(1) Includes ¥143.3 billion in gain on exchange of marketable securities relating to the merger of Mitsubishi Tokyo Financial
Group, Inc., and UFJ Holdings.

DIVIDEND INFORMATION
Toyota normally pays dividends twice per year, including an interim dividend and a year-end dividend.
Although Toyota’s articles of incorporation provide that retained earnings can be distributed as dividends
pursuant to the resolution of its board of directors, Toyota’s board of directors recommends the payment ofyear-end dividend to shareholders and pledgees of record as of March 31 in each year. Year-end dividends areusually paid to the shareholders immediately following approval of the dividends at the general shareholders’meeting, normally around the end of June of each year. In addition to these year-end dividends, Toyota may pay
interim dividends in the form of cash distributions from its distributable surplus to shareholders and pledgees ofrecord as of September 30 in each year by resolution of its board of directors. Toyota normally pays the interim
dividend in late November.
In addition, under the Corporation Act of Japan (the “Corporation Act”), dividends may be paid toshareholders and pledgees of record as of any 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. Such dividends
may be distributed by a resolution of any general shareholders’ meeting. Toyota’s articles of incorporation also
permit Toyota to pay dividends, in addition to interim dividends mentioned in the preceding paragraph, by aresolution of its board of directors. Toyota has incorporated such a provision into its articles of incorporation inorder to enable a flexible capital policy. Under the Corporation Act, dividends may be distributed in cash or(except in the case of interim dividends mentioned in the preceding paragraph) in kind, subject to limitations on
distributable surplus and to certain other conditions.

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

Period Ended

September 30, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March 31, 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
September 30, 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March 31, 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
September 30, 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March 31, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
September 30, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
September 30, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25.0
40.0
35.0
55.0
50.0
70.0
65.0
75.0
65.0
35.0

0.23
0.37
0.31
0.47
0.42
0.59
0.65
0.75
0.61
0.35

The payment and the amount of any future dividends are subject to the level of Toyota’s future earnings, its
financial condition and other factors, including statutory restrictions on the payment of dividends.
Toyota deems the benefit of its shareholders as one of its priority management policies, and is working to
implement reforms to establish a corporate structure that can achieve continuous growth in order to enhance its
corporate value.
With respect to the payment of dividends, Toyota declared an annual dividend payment of ¥100 per share at
the end of fiscal 2009, which is a decrease of ¥40 from the previous fiscal year. Going forward, Toyota will strive
to continue to pay dividends while taking into consideration factors such as business results of each term,
investment plans and cash reserves.
Exchange Rates
In parts of this annual report, yen amounts have been translated into U.S. dollars for the convenience ofinvestors. Unless otherwise noted, the rate used for the translations was ¥98.23 = $1.00. This was theapproximate exchange rate in Japan on March 31, 2009.
The following table sets forth information regarding the noon buying rates for Japanese yen in New York
City as announced for customs purposes by the Federal Reserve Bank of New York expressed in Japanese yen
per $1.00 during the periods shown. On June 19, 2009, the noon buying rate was ¥96.15 = $1.00. The averageexchange rate for the periods shown is the average of the month-end rates during the period.
Fiscal Year Ended or Ending March 31,

2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2010 (through June 19, 2009) . . . . . . . . . . . . . . . . . . . . . .

3

At End of Period

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

107.22117.48117.56
99.85
99.15
96.15

107.28113.67116.55113.61100.85
96.82

High

Low

114.30 102.26
120.93 104.41
121.81 110.07
124.0996.88
110.4887.80
100.7194.45

Month Ended

High
Low
(¥ per $1.00)

December 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
January 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
February 28, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
April 30, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
May 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

93.71
94.20
98.55
99.34
100.71
99.24

87.84
87.80
89.09
93.85
96.49
94.45

Fluctuations in the exchange rate between the Japanese yen and the U.S. dollar will affect the dollar
equivalent of the price of the shares on the Japanese stock exchanges. As a result, exchange rate fluctuations arelikely to affect the market price of the American Depositary Shares (“ADSs”) on the New York Stock Exchange(“NYSE”). Toyota will declare any cash dividends on shares in Japanese yen. Exchange rate fluctuations will
also affect the U.S. dollar amounts received on conversion of cash dividends.
Exchange rate fluctuations can also materially affect Toyota’s reported operating results. In particular, astrengthening of the Japanese yen against the U.S. dollar can have a material adverse effect on Toyota’s reported
operating results. For a further discussion of the effects of currency rate fluctuations on Toyota’s operating
results, please see “Operating and Financial Review and Prospects — Operating Results — Overview —Currency Fluctuations”.
3.B CAPITALIZATION AND INDEBTEDNESS
Not applicable.
3.C REASONS FOR THE OFFER AND USE OF PROCEEDS
Not applicable.
3.D RISK FACTORS
Industry and Business Risks
The worldwide automotive market is highly competitive.
The worldwide automotive market is highly competitive. Toyota faces intense competition from automotive
manufacturers in the respective markets in which it operates. Competition has intensified particularly as a resultof the contraction of the automotive market, due to the worldwide deterioration in the economy stemming fromthe financial crisis unfolding since last fall. In addition, competition is likely to further intensify in light ofcontinuing globalization in the worldwide automotive industry, possibly resulting in industry reorganization.
Factors affecting competition include product quality and features, the amount of time required for innovationand development, pricing, reliability, safety, fuel economy, customer service and financing terms. Increased
competition may lead to lower vehicle unit sales and increased inventory, which may result in a further
downward price pressure and adversely affect Toyota’s financial condition and results of operations. Toyota’s
ability to adequately respond to the recent rapid changes in the automotive market and to maintain its
competitiveness will be fundamental to its future success in existing and new markets and its market share. Therecan be no assurances that Toyota will be able to compete successfully in the future.
The worldwide automotive industry is highly volatile.
Each of the markets in which Toyota competes has been subject to considerable volatility in demand.
Demand for vehicles depends to a large extent on social, political and economic conditions in a given market andthe introduction of new vehicles and technologies. As Toyota’s revenues are derived from sales in markets
worldwide, economic conditions in such markets are particularly important to Toyota. In reflection of the4

worldwide deterioration in the economy stemming from the financial crisis, the demand for automobiles inJapan, North America and Europe, which are Toyota’s main markets, declined substantially particularly since thelatter half of 2008, adversely affecting Toyota. Such decline in demand for automobiles and the adverse effect on
Toyota are currently ongoing, and it is unclear how long this situation would continue or how it would transitionin the future. Toyota’s financial condition and results of operations may be affected adversely if the demand forautomobiles remain weak or further weakens as a result of a further decline in the world economy. Demand may
also be affected by factors directly impacting vehicle price or the cost of purchasing and operating vehicles suchas sales and financing incentives, prices of raw materials and parts and components, cost of fuel andgovernmental regulations (including tariffs, import regulation and other taxes). Volatility in demand may lead tolower vehicle unit sales and increased inventory, which may result in a further downward price pressure andadversely affect Toyota’s financial condition and results of operations.
Toyota’s future success depends on its ability to offer new innovative, price competitive products that meet andsatisfy customer demand on a timely basis.
Meeting and satisfying customer demand with attractive new vehicles and reducing the amount of timerequired for product development are critical elements to the success of automotive manufacturers. The timely
introduction of new vehicle models, at competitive prices, meeting rapidly changing customer preferences anddemands is more fundamental to Toyota’s success than ever as the automotive market is rapidly transforming inlight of the deterioration in the world economy. There is no assurance, however, that Toyota may adequately andappropriately perceive on a timely basis changing customer preferences and demands with respect to quality,
styling, reliability, safety and other features in a timely manner. Even if Toyota succeeds in perceiving customer
preferences and demands, there is no assurance that Toyota will be capable of developing and manufacturing
new, price competitive products in a timely manner with its available technology, intellectual property, sourcesof raw materials and parts and components, and production 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 customer demand in a timely manner could result in a lower market shareand reduced sales volumes and margins, and may adversely affect Toyota’s financial condition and results ofoperations.
Toyota’s ability to market and distribute effectively and maintain its brand image 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 as well as its ability to maintainand further cultivate its brand image across the markets in which it operates. 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 regulatory environment in the major markets in which it operates. Nor is there
assurance that Toyota will be able to cultivate and protect its brand image. Toyota’s inability to maintain welldeveloped sales techniques and distribution networks or a positive brand image may result in decreased sales andmarket share and may adversely affect its financial condition and results of operations.
The worldwide financial services industry is highly competitive.
The worldwide financial services industry is highly competitive. Increased competition in automobile
financing may lead to decreased margins. A decline in Toyota’s vehicle unit sales, an increase in residual value
risk due to lower used vehicle price, increase in the ratio of credit losses and increased funding costs are factors
which may impact Toyota’s financial services operations. The likelihood of these factors materializing has
increased as a result of the ongoing rapid worldwide economic deterioration, and competition in automobile
financing has intensified. 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 ofoperations.
5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 Canadian dollar and the British pound. Toyota’s consolidated financial statements, which arepresented in Japanese yen, are affected by foreign currency exchange fluctuations through both translation risk
and transaction risk. Changes in foreign currency exchange rates may affect Toyota’s pricing of products soldand materials purchased in foreign currencies. In particular, strengthening of the Japanese yen against the
U.S. dollar can have an adverse effect on Toyota’s operating results. The fluctuation of the Japanese yen against
other currencies including the U.S. dollar has been particularly great in the past year. If the Japanese yen further
rapidly appreciates against other currencies, including the U.S. dollar, Toyota’s financial condition and results ofoperations may be adversely affected.
Toyota believes that its use of certain derivative financial instruments including interest rate swaps andincreased localized production of its products have reduced, but not eliminated, the effects of interest rate andforeign 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 andresults of operations. For a further discussion of currency and interest rate fluctuations and the use of derivative
financial instruments, see “Operating and Financial Review and Prospects — Operating Results — Overview —Currency Fluctuations”, “Quantitative and Qualitative Disclosures About Market Risk”, and notes 20 and 21 to
Toyota’s consolidated financial statements.
High prices of raw materials and strong pressure on Toyota’s suppliers could negatively impact Toyota’s
profitability.
Increase in prices for raw materials that Toyota and Toyota’s suppliers use in manufacturing their products
or parts and components such as steel, precious metals, non-ferrous alloys including aluminum, and plastic parts,
may lead to higher production costs for parts and components. This could, in turn, negatively impact Toyota’s
future profitability because Toyota may not be able to pass all those costs on to its customers or require its
suppliers to absorb such costs.
The downturn in the financial markets could adversely affect Toyota’s ability to raise capital.
Financial markets worldwide have been significantly disrupted in the wake of the global financial crisis. A
number of financial institutions and investors have been facing difficulties providing capital to the financial
markets due to their deteriorated financial conditions. 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 toraise the necessary capital under appropriate conditions on a timely basis, Toyota’s financial condition andresults of operations may be adversely affected.
Political, Regulatory and Legal Risks
The automotive industry is subject to various governmental regulations.
The worldwide automotive industry is subject to various laws and governmental regulations including thoserelated to vehicle safety and environmental matters such as emission levels, fuel economy, noise and pollution.
Many governments also impose tariffs and other trade barriers, taxes and levies, and enact price or exchange
controls. Toyota has incurred, and expects to incur in the future, significant costs in complying with theseregulations. New legislation or changes in existing legislation may also subject Toyota to additional expenses in
the future.

6

Toyota may become subject to various legal proceedings.
As an automotive manufacturer, Toyota may become subject to legal proceedings in respect of various
issues, including product liability and infringement of intellectual property, and Toyota is in fact currently
subject to a number of pending legal proceedings. A negative outcome in one or more of these pending legal
proceedings could adversely affect Toyota’s future 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 political instabilities, fuel shortages or interruptions in transportation
systems, natural calamities, wars, terrorism and labor strikes.
Toyota is subject to various risks associated with conducting business worldwide. These risks include
political and economic instability, natural calamities, fuel shortages, interruption in transportation systems, wars,
terrorisms, labor strikes and work stoppages. The occurrence of any of these events in the major markets inwhich Toyota purchases materials, parts and components and supplies for the manufacture of its products or inwhich its products are produced, distributed or sold, may result in disruptions and delays in the operations of
Toyota’s business. Significant or prolonged disruptions and delays in Toyota’s business operations may
adversely affect Toyota’s financial condition and results of operations.
ITEM 4. INFORMATION ON THE COMPANY
4.A HISTORY AND DEVELOPMENT OF THE COMPANY
Toyota Motor Corporation is a limited liability, joint-stock company incorporated under the Commercial
Code and continues to exist under the Corporation Act. Toyota commenced operations in 1933 as the automobile
division of Toyota Industries Corporation (formerly, Toyoda Automatic Loom Works, Ltd.). Toyota became aseparate company on August 28, 1937. In 1982, the Toyota Motor Company and Toyota Motor Sales merged into
one company, the Toyota Motor Corporation of today. As of March 31, 2009 Toyota operated through529 consolidated subsidiaries and 229 affiliated companies, of which 56 companies were accounted for throughthe equity method.
See “— Business Overview — Capital Expenditures and Divestitures” for a description of Toyota’s
principal capital expenditures and divestitures between April 1, 2006 and March 31, 2009 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.
4.B BUSINESS OVERVIEW
Toyota primarily conducts business in the automotive industry. Toyota also conducts business in the financeand other industries. Toyota sold 7.56 million vehicles in fiscal 2009 on a consolidated basis. Toyota had net
revenues of ¥20,529.5 billion and net loss of ¥436.9 billion in fiscal 2009.
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.

2007

Automotive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7

Yen in millions
Year Ended March 31,
2008¥21,914,168
1,277,994
755,929¥24,160,254
1,468,730
660,256

2009¥18,550,501
1,355,850
623,219

Toyota’s automotive operations include the design, manufacture, assembly and sale of passenger cars,
minivans and commercial vehicles such as trucks and related parts and accessories. Toyota’s financial services
business consists primarily of providing financing to dealers and their customers for the purchase or lease of
Toyota vehicles. Toyota’s financial services also provide retail leasing through the purchase of lease contracts
originated by Toyota dealers. Related to Toyota’s automotive operations is its development of intelligent
transport systems (“ITS”). Toyota’s all other operations business segment includes the design and manufacture ofprefabricated housing and information technology related businesses, including an e-commerce marketplacecalled GAZOO.com.
Toyota sells its vehicles in more than 170 countries and regions. Toyota’s primary markets for its
automobiles are Japan, North America, Europe and Asia. The following table sets forth Toyota’s sales to externalcustomers in each of its geographical markets for each of the past three fiscal years.
Yen in millions
Year Ended March 31,
2007
2008
2009

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

¥8,152,884
8,771,495
3,346,013
1,969,957
1,707,742¥8,418,620
9,248,950
3,802,814
2,790,987
2,027,869¥7,471,916
6,097,676
2,889,753
2,450,412
1,619,813* “Other” consists of Central and South America, Oceania and Africa.
During fiscal 2009, 25.7% of Toyota’s automobile unit sales on a consolidated basis were in Japan, 29.2%
were in North America, 14.0% were in Europe and 12.0% were in Asia. The remaining 19.1% of consolidated
unit sales were in other markets.
The Worldwide Automotive Market
Toyota estimates that annual worldwide vehicle sales totaled approximately 68 million units in 2008.
Automobile sales are affected by a number of factors including:•social, political and economic conditions,•introduction of new vehicles and technologies, and•costs incurred by customers of purchasing and operating automobiles.

These factors can cause consumer demand to vary substantially from year to year in different geographic
markets and in individual categories of automobiles.
The disruption in the financial markets stemming from the subprime mortgage crisis deepened in the latter
half of fiscal 2009. The disruption extended beyond the U.S. and Europe and spread worldwide, including
resource-rich countries and emerging countries, resulting in a global financial crisis. The real economy has
suffered as a result and the world economy faces a serious recession.
The automotive industry has also been affected, experiencing a rapid contraction in the worldwide market.
In particular, in Japan, the U.S. and Europe, the markets contracted significantly in the latter half of fiscal 2009.
Furthermore, the growth in resource-rich markets and emerging markets stalled abruptly.
While Toyota expects the automotive market to grow in the medium- to long-term driven principally by thegrowth in resource-rich markets and the emerging markets, the automotive market is rapidly contracting
8

currently. Furthermore, global competition is severe, as competition in compact and low-price vehicles
intensifies, and as technological development and development of new products become more frequent with anincreased global awareness in the environment.
In 2008, Europe, North America, China, Asia, and Japan were the world’s largest automotive markets.
Worldwide market share, based on total automobile sales on a retail basis in each market, was 32% for Europe,
23% for North America (22% excluding Mexico and Puerto Rico), 13% for China, 8% for Asia, and 7% forJapan. In Europe, new vehicle sales decreased from the previous year to approximately 21.9 million units. In
North America, new vehicle sales decreased to approximately 16.2 million units. In China, new vehicle sales
increased to approximately 9.1 million units. In Asia (including India but excluding Japan and China), newvehicle unit sales remained at the same level at approximately 5.5 million units. In Japan, total new vehicle unit
sales (including mini-vehicles) decreased to approximately 5.0 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 and price or exchange controls as a means of creating
jobs, protecting domestic producers or influencing their balance of payments. Changes in regulatory
requirements and other government-imposed restrictions can limit an automaker’s operations. These regulations
can also make it difficult to repatriate profits to an automaker’s home country.
The development of the worldwide automotive market includes the continuing globalization of automotive
operations. Manufacturers seek to achieve globalization by localizing the design and manufacture of automobiles
and their parts and components in the markets in which they are sold. By expanding production capabilities
beyond their home markets, automotive manufacturers are able to reduce their exposure to fluctuations in foreignexchange rates as well as to trade restrictions and tariffs.
Since 2000, the global automotive industry has experienced various transactions which have promoted
consolidation within the industry. There are various reasons behind these transactions including the need torespond to the global overcapacity in the production of automobiles, the need to reduce costs and improve
efficiencies 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 a company’s
global presence through increased size and the desire to expand into particular segments or geographic markets.
In recent years, however, there has been a trend towards reviewing and reconsidering some of the businessconsolidations.
Toyota believes that it has the resources, strategies and technologies in place to compete effectively in theindustry on its own. In addition, Toyota believes that its research and development initiatives, particularly thedevelopment of environmentally friendly new vehicle technologies, vehicle safety and information technology,
provide it with a strategic 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’s Strategy
Toyota’s corporate goal is to enhance its corporate value by maintaining its position as a market leader in
the automotive industry and by continuing its growth through global operations and through products reflecting
Toyota’s advanced technology that target the local demand in each market. In order to achieve this corporate
goal, Toyota strives to further enhance its technology, supply capability and marketing, supported by9improvements in quality control, strengthening of cost-competitiveness and personnel development. Amongthese, technology is the most important element as the driver of growth. In particular, Toyota has been dedicatedto addressing environmental issues, and as environmental awareness continues to grow in the market, Toyota
strives to further improve technology, including its unique hybrid technology, in order to develop
environmentally-friendly products.
In light of the rapidly contracting automotive market as a result of the downturn in the world economy, andin light of the intense global competition that Toyota faces, Toyota is working to create an agile corporate
structure that can react to short-term changes in demand and further reduce inefficiency. Toyota is also
implementing reforms aiming to establish a solid yet flexible corporate structure capable of attaining steady
growth in the medium to long term. To carry out these reforms, Toyota will step up its efforts in accordance withthe following agenda:•

Strengthen customer-orientation of products through increased attention to the requests and demands ofcustomers in each country and region, based on Genchi Genbutsu (“going to the source”) principle, toprovide attractive high-quality products at a lower price and to respond to changing customer needs.

•

Further promote commercialization of next-generation environmental, energy and safety technologies.

•

Create a structure for efficient development, production and sales that can respond flexibly to changes inthe external environment.

Toyota is working to enhance its corporate value as a company while maintaining growth in harmony withsociety, through the foregoing agenda and through underscoring its fundamental principles of “Customer First,”“Genchi Genbutsu,” and “Continuous Improvement.” These principles are the cornerstones of Toyota’s growth,and are key to Toyota’s responding flexibly and promptly to the changes in the market environment. Toyota
plans to fulfill its social responsibilities by carrying out its corporate social responsibility through philanthropic
activities undertaken through corporate ethics, including full compliance with applicable laws and regulations.
Toyota’s specific strategy in connection with the foregoing consists of the following:
Attractive Product Lineup Responding to Consumer Preferences in All Regions
Toyota aims to strive for better quality to advance growth and build on the related foundations, and provide
attractive products responding to consumer preferences in all regions at a lower price. Key elements of thisstrategy include models in the following categories:•

Global Models (IMV, Vitz/Yaris, Camry and Corolla/Auris). Under the concept of “Global Best, Local
Best,” Toyota aims to develop, manufacture and distribute attractive products that satisfy regional
characteristics and demand while using common platforms and core parts and components. In fiscal
2009, Toyota sold about 2.9 million units of Global Models worldwide. Global Models accounted forapproximately 40% of its global sales in fiscal 2009.

•

Models Targeted to Resource-rich and Emerging Markets. Toyota expects that the automobile market
in resource-rich countries and emerging countries such as BRICs will grow in the medium to long term.
Toyota has therefore been striving to, and has been achieving partial success in, establishing operationalfoundations for production and distribution in these markets. Toyota is arranging its supply system bypromoting locally manufactured products as well as introducing products that meet different regional
needs, while considering the demand trends of the resource-rich markets and emerging markets.

•

Hybrid Models. Since the introduction of the Prius in 1997, which was the first mass-produced hybrid
car in the world, Toyota has continued expanding and upgrading the model line-up by using its hybrid
technology as one of the key technologies for solving environmental issues. In May 2008, a hybrid
model was added to the new Crown, and in May 2009, the third-generation Prius was released. The total
10

number of Prius models sold reached 1.26 million units at the end of April 2009. In addition, the total
number of all Toyota hybrid vehicles sold as of April 30, 2009 reached 1.81 million units. Toyota aims
to make use of the technical know-hows obtained through the sale of these models, and aims to continue
to offer hybrid model lineups with improved performance and quality.
Annual Unit Sales of Hybrid Models Globally
Year Ended March 31,
2007
2008
2009
(in thousands)

Total Unit Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

353

444

385

•

Premium Brand Models (Lexus). Since the Lexus was first launched in 1989 in the United States,
Lexus has been introduced in 68 countries around the world. At present, Toyota is taking action tostrengthen the Lexus brand in each geographic region. In fiscal 2009, Lexus sales totaled approximately
378 thousand units, a decrease of 132 thousand units from the 510 thousand units sold in fiscal 2008.

•

Market-creating Products. Toyota believes that it is strategically important to introduce models intodeveloped countries that meet the diverse needs and that comply with environmental regulations which
are being tightened due to heightened environmental concerns. Toyota plans to introduce marketcreating products taking into consideration environmental concerns, by utilizing its advanced
technology.

Localize Global Operations with Targeted Regional Strategies
Toyota believes that it needs to supply products that are targeted carefully to local demand in order tomaintain and strengthen a competitive edge in the rapidly-changing worldwide automotive industry, and also
believes that local sales, marketing and manufacturing presence is necessary to fully develop a market’s
potential. Localization better allows Toyota to design, manufacture and offer products within each market that
respond to market changes and satisfy local tastes and preferences. A localized manufacturing presence allows
Toyota to make social contributions to communities in which it has a local presence. Toyota’s efficient
production and sales network, together with its global model strategy and its efforts to design products thatappeal to particular regional preferences, allow it to offer a comprehensive lineup of products in each region inwhich it operates.
Toyota is pursuing the following targeted regional strategies in order to be a leader in each major market inwhich it competes.
•

Japan as the Center of the Global Operations. In Japan, Toyota aims to maintain steady profitability in
the Japanese market, which is the center of its global operations, and to develop products and toestablish the global core base which leads and supports operations in all other regions. Toyota believes
that it is important to maintain and endeavor to improve its high market share in Japan and is committed
to maintaining its market leadership in Japan by striving to achieve a consistent market share (excluding
mini-vehicles) each year. Toyota held a domestic market share (excluding mini-vehicles) on a retailbasis of 45.8% in fiscal 2007, 45.6% in fiscal 2008 and 46.0% in fiscal 2009.
Amid the downturn in the real economy and the increased domestic competition, Toyota maintained its
market share in fiscal 2009 owing to the introduction of new car models such as the Alphard, Vellfire,
iQ, PASSO Sette, Lexus RX450h and Lexus RX350, along with the sales of its conventional models. In
addition, in order to respond flexibly to global demand fluctuations, Toyota has implemented the“Global Link Production System”. Specifically, Toyota strives to improve flexible production
capabilities for various car models in its plants in Japan, thereby establishing a production system thatcan respond quickly and flexibly to the fluctuating demands of the overseas markets. Furthermore,
Toyota aims to improve its production capacity and operation rate through putting in place a mutual11

support structure at a global level by maintaining an encompassing view of trends in demands, as wellas the operating conditions of plants, in each region in which it operates.
Since Toyota formed an alliance with Fuji Heavy Industries, Ltd. (“FHI”) in 2005, Toyota and FHI have
utilized each other’s resources in development and production such as moving some of Toyota’s
production to FHI’s North American production center Subaru of Indiana Automotive, Inc. In
April 2008, in order to create synergy and to further strengthen competitiveness, Toyota, Daihatsu and
FHI agreed on the following three points: (1) Toyota and FHI will jointly develop a compact rearwheel- drive sports car that will be marketed by both Toyota and FHI, (2) Toyota will provide FHI witha compact car on an original-equipment-manufacturing basis (“OEM”) and (3) Daihatsu will supply FHI
with mini-vehicles and an FHI version of the Daihatsu Coo compact car on an OEM basis. In order toimplement a smooth cooperation, FHI transferred 61 million FHI shares owned by FHI to Toyota in July
2008. As a result of this transfer, Toyota owns 16.5% of FHI issued shares.
•

Review of Supply Framework Responding to the Rapid Change in Demand in the North American
Market. In North America, one of Toyota’s most significant markets, Toyota expanded its production
capacity in the past few years and improved the product lineup in order to secure steady profits and toestablish a self-reliant operational framework. As a result of the downturn in the market stemming fromthe financial crisis since the fall of 2008, Toyota’s North American unit sales on a consolidated basis
decreased substantially from 2.96 million units in fiscal 2008 to 2.22 million units in fiscal 2009. While
Toyota continues to face difficulty in the North American market, the North American market is an
important market representing approximately 29% of its total global unit sales on a consolidated basis infiscal 2009. The increased sales of models such as the Venza, a model tailored specifically to North
America which was introduced at the end of 2008, and the Lexus RX, which was fully-remodeled in
February 2009, provide foundational support for Toyota’s total sales. In addition, Toyota plans toincrease its share in the North American market, with the introduction of the new Prius in May 2009 andthe planned introduction of a Lexus-brand hybrid vehicle. In fiscal 2009, Toyota brand vehicles
accounted for approximately 83%, Lexus brand accounted for approximately 12% and Scion line-up
vehicles accounted for approximately 5% of the vehicle unit sales in the United States, respectively.
Toyota is continuing to revise its production system in North America in response to the substantiallycontracting sales market due to the economic downturn that stemmed from the financial crisis. In
November 2008, the Texas plant was designated the sole production facility for the Tundra, for which
the Indiana plant and the Texas plant were previously jointly responsible. Toyota plans to commence
local production of the Highlander at the Indiana plant in the fall of 2009. Construction of theMississippi plant, which was due to commence production in 2010, has been temporarily postponed andToyota plans to recommence construction once the market recovers. Furthermore, the Kentucky plantcommenced production of the new Venza model and the new Woodstock plant in Canada commenced
local production of the RAV4 in October 2008, and the Cambridge plant in Canada commenced
production of the remodeled Lexus RX in January 2009.

•

Forging Solid Footing in the European Operation with a Focus on Environmental Responsiveness.
In the European market, Toyota is aiming to establish a presence comparable to that of major European
automotive manufacturers. Although Toyota’s European unit sales on a consolidated basis decreased by
17.3% compared to fiscal 2008 to 1.06 million units in fiscal 2009 and market share fell short of thelevel achieved in fiscal 2008 and accounted for only 5.3%, Toyota retained its position as the sixth
largest manufacturer operating in the European market, as in the previous fiscal year. Sales results in
Western European countries failed to reach the levels achieved in the previous year as a result ofsignificant deterioration in the automotive market stemming from the financial crisis. However, sales of
the Aygo and the Prius remained steady in this region, reflecting the increasing demand for compact
cars and environmentally-friendly cars. Sales in certain Western European countries benefited fromgovernment economic stimulus initiatives implemented in some countries in the region, as exemplified
by the scrap incentive program in Germany. The market also slowed significantly in Eastern European
countries. In particular, significant market contraction in Russia, which experienced a rapid decline in12exchange rates against both the U.S. dollar and Japanese yen, and other countries in the region resulted
in Toyota’s Eastern European unit sales in fiscal 2009 failing to reach the level achieved in the previous
year.
In order to comply with the increasingly more stringent environmental regulations in Western European
countries, in addition to promoting the sale of its existing low-emission vehicles, Toyota is launching a
new vehicle model that meets carbon dioxide emission standards, followed by a new engine that meetsthe same standards. Furthermore, Toyota is endeavoring to stimulate the demand through its launch of
market-creating products such as the iQ and the Urban Cruiser.
Toyota has in the past increased local production in response to sales growth, designating Toyota Motor
Manufacturing (UK) Ltd. in 1992, Toyota Motor Manufacturing Turkey Inc. in 1994 and Toyota Motor
Manufacturing France S.A.S. in 2001 as supply factories to Europe. With respect to Russia, where
market growth is expected, Toyota began operation of a factory in 2007 at OOO “TOYOTA MOTORMANUFACTURING RUSSIA.” The level of operation has been reduced in response to the decrease insales since the latter half of 2008, and the supply framework is currently under review.
•

Establishing an Advantage in the Increasingly Significant Asian Market. In light of the importance of
the Asian market that is expected to grow in the long term, Toyota aims to build an operationalframework that is efficient and self-reliant as well as a predominant position in the automotive market in
Asia. Operating income for Asia in fiscal 2009 decreased significantly compared to fiscal 2008. Thisdecrease can be partly attributed to the slowdown in the Asian market from the latter half of fiscal 2009
due to the economic downturn experienced simultaneously throughout the world, stemming from thefinancial crisis. However, Toyota also made strategic investments in this market earlier than its major
global competitors and developed relationships with local suppliers in the region. While competition in
Asia is further increasing, Toyota believes that its existing local presence in the market provides it witha competitive advantage and expects to be able to promptly respond to demand for vehicles in theregion.
Toyota is aiming to further increase its competitiveness by improving product line-up offered in theregion and increasing local procurement to decrease its exposure to foreign currency exchange
fluctuations. For example, Toyota began producing IMV models (Hilux, Fortuner and Innova) in
Thailand, Indonesia, India, the Philippines and Malaysia in fiscal 2005 and in Vietnam in fiscal 2006.
Furthermore, with increased production capacity, the Thailand plant now produces IMV models (Hilux
and Fortuner) for sale outside of Asia, including Australia and the Middle East, and has contributed
greatly to the expansion of Toyota’s automotive business. Furthermore, Toyota Motor Thailand Co.,
Ltd., Toyota’s vehicle production base in Thailand, plans to commence production of the Camry Hybrid
in 2009. In India, Toyota is developing its business through local production and sales, and decided toconstruct the second plant with an annual production capacity of 70 thousand units. In 2010, this plant isscheduled to commence production of newly developed compact cars.

•

Promoting Vehicle Sales in Central and South America, Oceania, Africa and the Middle East. With
respect to Central and South America, Oceania, Africa and the Middle East, unit sales decreased otherthan in the Middle East as a result of a downturn in the markets. As a result, in fiscal 2009, Toyota’s
consolidated unit sales in the region was approximately 1.44 million units, a decrease of approximately
5.5% from fiscal 2008. The core models in this region are global models such as the Corolla, IMV andthe Camry, which are designed to satisfy regional demands, while keeping production costs down by
using common platforms and core parts and components with vehicle models in other regions.
Furthermore, Toyota Motor Corporation Australia Ltd., Toyota’s vehicle production base in Australia,
plans to commence production of the Camry Hybrid from the beginning of 2010.
In these regions, which are expected to become increasingly more important to Toyota’s businessstrategy, Toyota aims to develop new products which meet the specific demands of each region,
increase production and further promote sales.

13•

Securing Stable Development in China. Toyota has been conducting its operations in China throughjoint 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 businessfoundation that it has established, Toyota is conducting its operations with the aim to promote further
growth and increase in profitability through further development of its sales and service network andexpansion of its product lineup.
In China, Toyota has been conducting joint ventures with two major partners. First, with respect to thejoint venture with China FAW Group Corporation, since Toyota first launched the Vios through thejoint venture in 2002, Toyota commenced the production and sale of eight car models by the end of2005 including the Land Cruiser Prado, Land Cruiser, Corolla, Crown, REIZ and Coaster in China.
Particularly, in late 2005, Toyota also began the production of the Prius, taking in environmental
considerations. With regard to increasing production capacity, in May 2007, Toyota commenced
production of the new Corolla on the second line of the Tianjin Teda plant with an annual production
capacity of 200 thousand units, and commenced production of the RAV4 on the same line in March
2009. Guangzhou Toyota Motor Co., Ltd., a joint venture between Toyota and the other partner
Guangzhou Automobile Group Co., Ltd, commenced production of the Camry in May 2006 with anannual production capacity of 100 thousand units on a single shift basis and, by late 2006, it expanded
its annual production capacity to 200 thousand units on a double shift basis. In addition, it commenced
production of the Yaris in May 2008, and the second Guangzhou plant commenced production of theHighlander in May 2009.

Promote Key Initiatives Globally
Toyota believes that the following key initiatives are essential in increasing its competitiveness in the global
automotive market and for improving its profitability and prospects for continued growth:•

Maintain Leadership in Research and Development. Toyota believes that its long-term success will
depend on being a leader in automotive research and development. To that end, Toyota is focusing its
research and development on the promotion of environmentally sound technologies and product safety
technologies, and plans to further promote early commercialization of next-generation environmental,
energy and product safety technologies. Toyota is committed to building environmentally friendly
automobiles and is focusing its initiatives on the following areas:•

contribute to the efforts to preserve the environment through increased promotion of and further
improvement in hybrid technology (including efforts for cost reduction and enhanced performance),•

the improvement of fuel economy technology in gasoline engines and improvement of technologies
to comply with more stringent emissions standards regulations,•the improvement of engine performance and fuel economy in clean diesel engines,•

the development of automobiles powered by fuel cells and other non-traditional fuel technologies,
and•the improvement of technologies that pursue driving and vehicle safety.

In particular, Toyota considers addressing environmental issues as one of the top priorities and aims tocurtail environmental burden by reducing carbon dioxide emission at all levels of operations, namely in
automobile design to production, distribution, disposal, and recycling. In addition, in order to utilize
diverse energy sources that can replace oil, Toyota plans to commercialize plug-in hybrid vehicles thatcan be charged from household power supplies, mass-produce electric vehicles and develop nextgeneration batteries, develop biofuel as an alternative fuel source, and develop fuel cell vehicles. A chief
example of Toyota’s leadership in environmental technology was the introduction of the hybrid Prius
into the Japanese market in 1997.

14

In addition, Toyota began leasing the Toyota FCHV, the first ever fuel cell hybrid vehicle, in 2002. In
2005, these vehicles became the first fuel cell hybrid vehicles to acquire vehicle type certification in
Japan and Toyota has continued to lease them since then.
With respect to the development of fuel cell hybrid vehicles, Toyota has focused on establishingmechanisms to address technological issues and other such fundamental research, using data obtained
through real-world testing. Toyota’s real-world testing activities include demonstration studies throughthe Japan Hydrogen & Fuel Cell Demonstration Project, which is run by the Ministry of Economy,
Trade and Industry of Japan, road testing in the U.S. as part of the California Fuel Cell Partnership andevaluating the performance of its vehicles in cold climates in Timmins, Canada.
Furthermore, Toyota began leasing its new Toyota Fuel Cell Hybrid Vehicle — advanced (the new“Toyota FCHV-adv”) in September 2008. Based on the results of the research described above, Toyota
has remodeled the fuel cell system in the new Toyota FCHV-adv and has made significant
improvements to low-temperature startup performance and cruising distance, in order to improve theprospects of its use becoming widespread.
Aiming to bring about the widespread use of fuel cell vehicles, Toyota is making efforts to improve thedurability and reduce the cost of its proprietary high-performance polymer electrolyte fuel cell, theToyota FC Stack, by making use of real-world feedback obtained from the lessees. Toyota also believes
that participation in other cooperative efforts with the government, the energy industry and otherconcerned parties will help bring about the widespread use of fuel cell vehicles.
In November 2006, Toyota entered into a basic agreement with Isuzu Motors Limited, to complement
each other technologically in the development and production of diesel engines and other areas. In
August 2007, the parties reached a basic agreement to develop, manufacture and distribute aluminum
block diesel engines with 1.6 liter-class emission to be used in Toyota cars to be introduced in theEuropean market. However, in light of the downturn of the European market, the parties have agreed to
put the agreement on hold temporarily.
In April 2008, Toyota established the Toyota Research Institute of North America (the “TRI-NA”), a
specialized institute in advanced research within the Toyota Technical Center in North America. In
addition to accelerating existing advanced research, the theme of “transportation society” will be newly
added. The TRI-NA aims to strengthen Toyota’s advanced research efforts in North America, while
enhancing interaction with North American universities and research organizations.
•Improve Efficiency. Toyota is working on the following to create a structure allowing for efficientdevelopment, production and sales that can respond flexibly to changes in the external environment:•

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

creating a production structure that can better withstand fluctuations in demand and currency
exchange rates,•

reducing lead times from development to sales, and•strengthening sales capabilities in line with local conditions.

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

improving product development and production efficiencies through the re-integration andimprovement of vehicle platforms and power trains and through the development of electronic
platforms which organize electronic devices of vehicles as a package and standardize electronic
structure and infrastructure,•

conducting cost reduction activities under the VI (Value Innovation) Activities, aiming to reduce
costs starting with the developing phase on a system-by-system basis,
15

•

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

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

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

Toyota is further improving production efficiency by installing more versatile equipment and systems,
modifying vehicle body designs to allow for a greater variety of models on each production line and sharing
more parts among vehicles.
Toyota continues to focus on reducing costs and improving efficiencies through various measures. One ofthese measures is the reduction in the number of platforms used in vehicle production. Platforms are theessential structures that form the base of different vehicle models. By using a common platform for the
production of a greater number of models, Toyota believes that it will be able to decrease the substantial
expenditures required to design and develop vehicles. In addition, Toyota believes that it will be able toachieve the scale benefits of producing larger volumes per platform, thereby reducing manufacturing cost
per vehicle.
In addition to using common platforms, Toyota continues to focus on other methods of increasing thecommonality of parts and components used in different models. These steps include reducing model
variations and the number of parts used in each model. Toyota is seeking to increase the efficiency of
procurement from outside suppliers by making use of a common global database to enable plants indifferent areas of the world to purchase parts and materials from the most competitive sources. In addition,
Toyota is engaged in the VI Activities which is focused on systems-based cost innovation, going one stepbeyond item-based innovation. Adopting a new approach to designing, Toyota aims to achievecomprehensive cost reductions by treating associated parts as integrated systems. In fiscal 2009, Toyota
initiated cost reduction programs together with its suppliers in order to improve profits with respect tovehicles already being sold, as part of its Emergency VA (Value Analysis) activity.
Toyota’s ability to achieve these cost reductions is subject to a number of factors, some of which are not in
Toyota’s control. These factors include the successful implementation of the manufacturing processes
described above, as well as the business and financial conditions of Toyota’s suppliers and the general
economic and political conditions in the markets in which these suppliers operate.
Strengthening Finance Operations for Sales
Toyota’s financial services 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. In July 2000, Toyota
established a wholly-owned subsidiary, Toyota Financial Services Corporation, to oversee the management of
Toyota’s finance companies worldwide, through which Toyota aims to strengthen the overall competitiveness of
its financial business, improve risk management and streamline decision-making processes. Toyota plans to
expand its network of financial services, in accordance with its strategy of developing auto-related financing
businesses in significant markets. Accordingly, Toyota currently operates financial services companies in 33
countries and regions, supports its automotive operations globally.
Maintain Financial Strength
Toyota currently enjoys high credit ratings which it believes reflect, among other factors, its strong financial
position. Toyota currently maintains highly-liquid current assets such as cash and marketable securities andmaintains the necessary liquidity in business operations as well as a high level of capital ratio. Toyota’s financial
strength is the financial flexibility that its conservative financial strategy affords. While the current businessenvironment has become extremely uncertain due to worldwide deterioration in the economy stemming from the16

financial crisis unfolding since last fall, by managing an even more adequate cash flow and maintaining a strong
financial foundation as described, Toyota believes these factors will allow it to maintain the resources necessary
to fund its research and development expenditures, capital expenditures and financing operations even if it
experiences short-term fluctuations in earnings.
Focus on Shareholder Value
Toyota deems the benefit of its shareholders as one of its priority management policies, and is working to
implement reforms to establish a corporate structure that can achieve continuous growth in order to enhance its
corporate value.
The results of operations for fiscal 2009, which was a loss, reflect extremely difficult conditions due to anumber of factors such as (i) a substantial contraction of the automotive market caused by a rapid deterioration of
the world economy following the financial crisis last fall, (ii) changes in the market structure with a marked shift
towards small vehicles and low-price vehicles, and (iii) the sharp appreciation of the Japanese yen. As a result,with respect to the payment of dividends, Toyota declared an annual dividend payment of ¥100 per share at theend of fiscal 2009, a decrease of ¥40 from the previous fiscal year, determining that it would be very difficult tomaintain the same level of dividend as in fiscal 2008. Going forward, Toyota will strive to continue to pay
dividends while taking into consideration factors such as business results of each term, investment plans and cash
reserves.
With respect to the repurchase of own shares, of the shares authorized at the ordinary general meeting ofshareholders in June 2008, which were the lesser of 30 million shares or the number of shares equivalent to¥200 billion in cost of repurchase, 14.01 million shares totaling ¥69.9 billion were repurchased. In all of fiscal
2009, 15 million shares totaling ¥73 billion were repurchased. Since Toyota began repurchasing shares in fiscal
1997, the cumulative number of shares repurchased as of the end of June 2009 was 736.98 million shares at a
total cost of ¥2,868.8 billion. The following table shows the number of shares repurchased and the cost of
repurchase of those shares for each of the periods indicated:

Number of shares repurchased . . . . . . .
Approximate amount paid . . . . . . . . . .

Year Ended March 31,
2007

2005

2006

63 million¥266 billion

28 million¥134 billion

45 million¥300 billion

2008

2009

49 million¥317 billion

15 million¥73 billion

In the current business environment, Toyota plans to prioritize the retention of cash reserves and withhold
repurchases of own shares.
Toyota’s future share repurchases will be influenced by factors such as Toyota’s future earnings andfinancial position. For more details, please see “Purchases of Equity Securities by the Issuer and AffiliatedPurchasers.”
Automotive Operations
Toyota’s revenues from its automotive operations were ¥18.6 trillion in fiscal 2009, ¥24.2 trillion in
fiscal 2008 and ¥21.9 trillion in fiscal 2007.
Toyota produces and sells passenger cars, minivans and commercial vehicles such as trucks. Toyota Motor
Corporation’s subsidiary, Daihatsu Motor Co., Ltd. (“Daihatsu”), produces and sells mini-vehicles and compact
cars. Hino Motors, Ltd. (“Hino”), also a subsidiary of Toyota Motor Corporation, produces and sells commercial
vehicles such as trucks and buses. Toyota also manufactures automotive parts, components and accessories for its
own use and for sale to others.
17Vehicle Models
Toyota’s vehicles (provided by Toyota, Daihatsu and Hino) can be classified into two categories:
conventional engine vehicles and hybrid 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.
Conventional Engine Vehicles
Subcompact and Compact
Toyota’s subcompact and compact cars include the four-door Corolla sedan, which is one of Toyota’s best
selling models. The Yaris, marketed as the Vitz in Japan, is a subcompact car designed to include features suchas better performance and comfort compared to other compact cars available on the market, with low emissions
that are particularly attractive to European consumers. The Vitz was remodeled in February 2005. This model
was launched as the remodeled Yaris in the United States in March 2006. In Japan, Toyota introduced the Aurisand bB in 2006, ist which was remodeled in July 2007, and the remodeled Corolla Rumion in October of thesame year. Furthermore, Toyota introduced the “micro premium” car iQ in October 2008. In the United States,
Toyota introduced the Scion xB and Scion xD in 2007.
Mini-Vehicles
Mini-vehicles are manufactured and sold by Daihatsu. Daihatsu manufactures mini-vehicles, passenger
vehicles, commercial vehicles and auto parts. Mini-vehicles are passenger cars, vans or trucks with engine
displacements of 660 cubic centimeters or less. Daihatsu sold approximately 601 thousand mini-vehicles and
182 thousand automobiles on a consolidated basis during fiscal 2009. Daihatsu’s largest market is Japan, which
accounted for approximately 75% of Daihatsu’s unit sales during fiscal 2009.
Mid-Size
Toyota’s mid-size models include the Camry, which has been the best selling passenger car in the UnitedStates for eleven of the past twelve calendar years (From 1997 to 2008) and also for the last seven consecutive
years. The Camry was fully remodeled in January 2006. Camry models include the Camry Solara sport coupe.
Camry sales in the United States for 2008 was approximately 437 thousand units (including approximately
17 thousand Solaras and approximately 46 thousand hybrid vehicles). In addition, Toyota’s other mid-size
models include (i) the REIZ for the Chinese market, (ii) the Mark X, the Blade which was introduced in
December 2006, and the Premio and the Allion, both of which were remodeled in May 2007, for the Japanesemarket, and (iii) the Avensis, which was remodeled in November 2008 for the European market.
Luxury & Large
In North America, Europe and Japan, Toyota’s luxury line-up consists primarily of vehicles sold under the
Lexus brand name. In the United States, Lexus has earned the title of best-selling luxury brand for the ninth
consecutive year by selling approximately 259 thousand units in 2008. Lexus models include the LS, the GS, theES and the IS. Lexus models also include luxury sport-utility vehicles sold in the United States, such as the GX,
the RX, the LX, as well as the SC and the IS F. Toyota commenced sales of its luxury automobiles in Japan
under the Lexus brand in August 2005. As of May 31, 2009, the Lexus brand line-up in Japan includes the LS,
GS, IS, RX, SC and IS F. Toyota brand’s full-size luxury car, the Crown, was remodeled in February 2008, andthe Crown Majesta was remodeled in March 2009. Toyota also sells the Century limousine in Japan.

18

Sports and Specialty
In Japan and other markets, Toyota sells the Lexus SC two-door sports coupe, and in the United States theScion tC, a sport car model targeted to young drivers. In December 2007, Toyota introduced the IS F model
under the Lexus brand as the high-performance sports model and in May 2009, the IS 250C as the convertiblemodel.
Recreational and Sport-Utility Vehicles and Pickup Trucks
Toyota sells a variety of sport-utility vehicles and pickup trucks. Toyota sport-utility vehicles available inNorth America include the Sequoia, the 4Runner, the RAV4, the Highlander, the FJ Cruiser and the Land
Cruiser, and pickup trucks available are the Tacoma and Tundra. The Tacoma, the Tundra and the Sequoia are
manufactured in the United States. Toyota also offers three types of sport-utility vehicles under the Lexus brand,
including the GX, the RX, as well as the LX. The LX, the GX, the Land Cruiser, the Tundra, the Sequoia, the4Runner and the Prado sold in the United States are equipped with V-8 engines. Toyota also manufactures the
RX model in Canada. Toyota’s pickup truck, the Hilux, has been the best selling model of all Toyota cars sold in
Thailand. In February 2007, Toyota introduced the remodeled Tundra in North America. In addition, in
August 2007, Toyota introduced the Vanguard model in Japan, and in December 2008, Toyota introduced the
new Venza in North America. The fully remodeled RX was introduced in February 2009 in North America andin March 2009 in Europe. In Japan, the RX was introduced for the first time in January 2009.
Minivans and Cabwagons
Toyota offers several basic models for the global minivan market. Its largest minivan, the Alphard was
remodeled in May 2008 in Japan, at the same time that the Vellfire was introduced. In addition, the Corolla
Verso was introduced in December 2008 in Europe, and the Wish was remodeled in April 2009 in Japan.
Toyota’s other minivan models include, in Japan, the Hiace, the Regius Ace, the Estima, the Noah, the Voxy, theSienta and the Isis and, in North America, the Sienna.
Trucks and Buses
Toyota’s product line-up includes trucks (including vans) up to a gross vehicle weight of five tons andmicro-buses, which are sold in Japan and in overseas markets. Trucks and buses are also manufactured and soldby Hino, a subsidiary of Toyota. Hino’s product line-up includes large trucks with a gross vehicle weight of overeleven tons, medium trucks with a gross vehicle weight of between five and eleven tons, and small trucks with agross vehicle weight of up to five tons. Hino held the largest share of the Japanese large truck market in
fiscal 2009. Hino’s bus line-up includes large to medium buses used primarily as tour buses and public buses,
small buses and micro-buses. Toyota and Hino maintain a large share of the small bus (including micro-buses)
segment in Japan.
Hybrid Vehicles
The world’s first mass-produced hybrid car was Toyota’s Prius. It runs on an efficient combination ofgasoline engine and motor. This system allows the Prius to travel more efficiently than conventional engine
vehicles of comparable size and performance on the same amount of gasoline. The hybrid design of the Prius also
results in the output of 75% less pollution than the maximum amount allowed by Japanese environmental
regulations. Toyota views the Prius as the cornerstone of its emphasis on designing and producing
environmentally friendly automobiles. In March 2005, Toyota introduced the RX400h in North America andEurope and the Harrier Hybrid in Japan. Toyota also introduced the Highlander Hybrid in North America. Toyota
introduced the Prius in China in November 2005 and the hybrid version of the Camry in North America in
May 2006. Toyota introduced the GS450h, the hybrid version of the Lexus brand premium sedan, in North
America, Europe and Japan by March 2006, and Toyota introduced the remodeled Estima Hybrid in June 2006.
As of April 2009, Toyota has cumulatively sold over 1.81 million hybrid vehicle units. Furthermore, in
May 2007, Toyota introduced the LS600h hybrid sedan in Japan, North America, and Europe, which Toyota
believes to offer the highest quality of the Lexus brand to date. Furthermore, in May 2008, Toyota introduced the
hybrid version of the Crown which is the signature model of the Toyota brand, in Japan. The Prius, of which19

1.26 million units have been sold since it was first introduced in 1997 and whose name has become synonymouswith hybrid vehicles, underwent its second full model change in May 2009. In March 2009, the Lexus RX450h,
which is the fully-remodeled Lexus RX400h, was successively introduced in Japan, North America and Europe.
Toyota is planning to introduce new hybrid vehicles including the HS250h in the summer of 2009 or later,
followed by the introduction of plug-in cars with lithium ion batteries by the end of 2009. Going forward, Toyota
will continue to expand its lineup of hybrid vehicle models, which is an area in which significant growth isexpected in the contracting vehicle market.
Toyota also began limited sales of a fuel cell hybrid vehicle in Japan and the United States in
December 2002. In June 2005, Toyota’s new fuel cell hybrid passenger vehicle became the first in Japan toacquire vehicle type certification under the Road Vehicles Act, as amended, on March 31, 2005, by Japan’s
Ministry of Land, Infrastructure, Transport and Tourism. Leases for the vehicle began in July 2005. By 2007,
Toyota was able to make improvements to start up and cruising distance at temperature below freezing, whichwere technological challenges. Toyota has made advances by solving technological issues such as the above, andhas been working towards the practical use of such solutions.
Toyota aims to continue its efforts to offer a diverse line-up of hybrid vehicles, enhance engine power while
improving fuel efficiency, and otherwise work towards increasing the sales of hybrid vehicles.
Product Development
New cars introduced in Japan during fiscal 2009 and thereafter include the iQ, PASSO Sette, Lexus
RX450h, Lexus RX350 and IS250C. Remodeled cars in Japan during fiscal 2009 and thereafter include theAlphard (of which, the Alphard V was remodeled and newly introduced as the Vellfire), the Crown Majesta, theWish and the Prius. New cars introduced outside Japan during fiscal 2009 and thereafter include the Venza
introduced in North America in December 2008, the iQ and the Urban Cruiser introduced in Europe in January
2009 and April 2009, respectively. Remodeled cars sold in the United States during fiscal 2009 and thereafter
include the Lexus RX450h, RX350 and the Prius. Remodeled cars sold in Europe during fiscal 2009 andthereafter include the Avensis, the Carolla Verso and the Prius. The IMV product lineup based on the Innovative
International Multi-purpose Vehicle project (IMV) to optimize global manufacturing and supply systems is alineup of strategic multipurpose vehicles produced from a single platform to meet market demand. The IMV
product lineup includes the Hilux Vigo released in Thailand in August 2004, and as of May 31, 2009, one or allof the Hilux, Fortuner and Innova are available in all regions except for Japan and North America.
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.
2005
Units

MarketJapan . . . . . . . . . . . 2,381,325
North America . . . . 2,271,139
Europe . . . . . . . . . . 978,963
Asia . . . . . . . . . . . . 833,507
Other* . . . . . . . . . . 943,444

%

2006
Units

32.1% 2,364,484
30.7 2,556,050
13.2 1,022,781
11.3
880,66112.7 1,150,587%

Year Ended March 31,
2007
Units
%

29.7% 2,273,152
32.1 2,942,661
12.8 1,223,628
11.0
789,637
14.4 1,295,581

2008
Units

26.7% 2,188,389
34.5 2,958,314
14.3 1,283,793
9.3
956,50915.2 1,526,934

%

2009
Units

24.6% 1,944,823
33.2 2,212,254
14.4 1,061,954
10.7
904,892
17.1 1,443,433

%

25.7%
29.2
14.0
12.0
19.1

Total . . . . . . . . . . . . . . . . 7,408,378 100.0% 7,974,563 100.0% 8,524,659 100.0% 8,913,939 100.0% 7,567,356 100.0%* “Other” consists of Central and South America, Oceania, Africa and the Middle East, etc.

20

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 exclude 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 Pakistan.

2005

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

(Thousands of Units)
Fiscal Year Ended March 31,
2006
2007
2008

2009

3,940
3,915
3,590
3,428
2,894
1,755
1,735
1,643
1,564
1,331
44.5% 44.3% 45.8% 45.6% 46.0%(Thousands of Units)
Calendar Year Ended December 31,
2004
2005
2006
2007
2008

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

20,108 20,353 19,979 19,360 16,294
2,292
2,514
2,840
2,923
2,537
11.4% 12.4% 14.2% 15.1% 15.6%

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

20,802 21,138 21,799 23,100 21,212
962
1,013
1,144
1,261
1,141
4.6%
4.8%
5.2%
5.5%
5.3%

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

4,824
5,214
5,107
5,463
5,540
692
838
750
779
809
14.3% 16.1% 14.7% 14.3% 14.6%

Japan
The automobile market in Japan has stagnated due to a combination of various factors, such as changes in
the nature of demand. In addition, demand overall has decreased rapidly since the fall of the previous year,
affected by the financial crisis. Toyota faces great challenges as future employment concerns weaken consumer
spending. Despite this trend, Toyota believes that Japan continues to be the most important market for Toyota’s
automotive products. The Japanese automotive industry is highly competitive. It includes five major domestic
manufacturers, five specialized domestic producers and a growing volume of imports from major United Statesand European manufacturers. The prolonged economic slump in the Japanese economy has also shifted consumer
preference towards more affordable automobiles such as compact and subcompact vehicles and towards utility
vehicles such as mini-vans. For more than 40 years, Toyota has maintained its position as the largest automobile
manufacturer in Japan. Every year since fiscal 1999, Toyota, excluding Daihatsu and Hino, has achieved amarket share (excluding mini-vehicles) of over 40%, reflecting in part the success of the introduction of newmodels for subcompact and compact cars, mini-vans and sedans. In fiscal 2009, Toyota’s (excluding Daihatsu
and Hino) share of the domestic market excluding mini-vehicles was 46.0%, and Toyota’s (including Daihatsu
and Hino) share of the market including mini-vehicles was 42.4%. In August 2005, Toyota launched the Lexus
brand in Japan and recorded a market share of 17.7% in the luxury market in 2008. Toyota aims to further
distinguish the Lexus brand by continuing to attract new and affluent customers including customers thattypically had purchased imported vehicles.

21

North America
Toyota’s consolidated vehicle unit sales in North America was 2,212,254 units in fiscal 2009. The UnitedStates is the largest portion of the North American market for Toyota, representing approximately 87% of its
total retail unit sales in the region. Toyota’s retail unit sales in North America achieved over two million units forthe sixth consecutive year, despite the downturn in the economy since the fall of 2008. The increased sales of
new products including the Venza, which was introduced in December 2008, and the Lexus RX, which was fully
remodeled in February 2009, were fundamental to this achievement in overall sales. Toyota’s market share in the
United States was 16.7% in 2008, its largest share ever. Competition in North America, particularly the UnitedStates is intense. Toyota’s principal competitors in North America are General Motors, Ford, Chrysler, Honda
and Nissan.
EuropeConsolidated European sales of Toyota vehicles in fiscal 2009 was 1,061,954 units, down 17.3% fromfiscal 2008. In 2008, Toyota had a market share in Europe of 5.3% and achieved annual retail unit sales ofapproximately 1.14 million vehicles. As the markets rapidly contracted with the spread of the economic andfinancial crisis, European sales decreased from the previous year although sales increased in Central and Eastern
Europe as a result of the decreased sales in Western Europe. Sales were also affected as the period was an
in-between period between full model changes. Toyota’s principal European markets are Germany, Russia,
France, Italy and the United Kingdom. Toyota’s principal competitors in Europe are Volkswagen, Opel, Renault,
Ford and Peugeot.
Asia and China
Consolidated Asian sales of Toyota vehicles in fiscal 2009 was 904,892 units, down 5.4% from fiscal 2008.
In 2008, Toyota had a market share in Asia of 14.6% and achieved annual retail unit sales of approximately
810 thousand vehicles. The growth in Asian sales is attributable to the increase in sales in Indonesia. Toyota’s
principal Asian markets are Thailand, Indonesia, Malaysia and Taiwan.
In China, vehicle sales increased 7% from 8.50 million in 2007 to 9.10 million in 2008, and the market has
expanded from 2007 despite a temporary slowdown in growth. In this market, Toyota’s sales was 590 thousand
vehicles. In the locally produced passenger vehicle market (total of approximately 5.6 million units), Toyota’s
sales was 510 thousand units for a market share of 9%. Guangzhou Toyota Motor Co., Ltd.’s Camry, which
commenced sales in June 2006, and Tianjin FAW Toyota Motor Co., Ltd.’s Corolla, which underwent a modelchange in May 2007, greatly contributed to the sales. As for Toyota’s sales network, Toyota has been expanding
the sales network for locally produced vehicles in cooperation with Chinese joint venture partners under Tianjin
FAW Toyota Motor Co., Ltd. and Guanqi Toyota Motor Co., Ltd., and for imported vehicles, Toyota has also
been expanding the Lexus brand sales network. Going forward, Toyota plans to increase sales by expanding thenumber of dealers and the product lineup for both locally produced and imported vehicles. In addition, as themarket in China develops, Toyota plans to promote the so-called “Value Chain” businesses such as used cars,
services, financing and insurance.
Production
Toyota and its affiliates produce automobiles and related parts and components through more than
50 manufacturing companies in 26 countries and regions around the world. Toyota’s major manufacturing
facilities include plants in Japan, the United States, Canada, the United Kingdom, France, Turkey, Czech
Republic, Thailand, China, Taiwan, South Africa, Australia, Argentina, Brazil, Indonesia and India. Daihatsu
brand vehicles are produced at 4 factories in Japan and 6 manufacturing companies in 6 other countries,
including Indonesia and Malaysia. Hino produces medium trucks for the North American market in Ontario,
Canada and West Virginia, United States. In the United States, Toyota and General Motors Corporation operate a
joint venture for the assembly of passenger cars and trucks. For a listing of Toyota’s principal production
facilities, see “Information on the Company — Property, Plants and Equipment”.
22

In recent years, Toyota has increased its production capacity outside Japan. This increase in local production
corresponds with the increase in demand in each market. The reinforcement or establishment of production
systems capable of responding flexibly to the rapidly fluctuating demands of each market are integral to Toyota’s
strategy. For example, changes made to the production system in North America include designating theMississippi plant as the production facility of the Prius, instead of the Highlander as initially planned, andrelieving the Indiana plant of its production responsibilities in respect of the Tundra, thereby making the Texas
plant solely responsible for production of the Tundra in North America. In 2008, approximately 64% of Toyota
automobiles sold in overseas markets were manufactured in overseas plants by Toyota and its unconsolidated
affiliates. In 2008, approximately 57% of Toyota vehicles sold in North America were produced in North
America. Of the vehicles sold in Europe in 2008, approximately 61% were produced in Europe. In fiscal 2009,
Toyota produced on a consolidated basis approximately 4.3 million vehicles in Japan and approximately
2.8 million vehicles overseas, compared to approximately 5.1 million vehicles in Japan and 3.4 million vehicles
overseas in fiscal 2008. In addition, in March 2006, Toyota entered into an agreement with FHI to manufacture
vehicles at FHI’s North American production center, Subaru of Indiana Automotive, Inc.
The following table shows the worldwide vehicle unit production by Toyota for the periods shown. These
production figures do not include vehicles produced by Toyota’s unconsolidated affiliates. The sales unit
information elsewhere in this annual report includes sales of vehicles produced by these affiliates. Vehicles
produced by Daihatsu and Hino are included in vehicle production figures set forth below.

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

Year Ended March 31,
2007
2008

2005

2006

7,231,976

7,711,647

8,180,951

8,547,200

2009

7,051,032

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

Just-in-Time is an approach in which necessary parts and components are manufactured and delivered in justthe right quantity in a timely manner just as they are needed. This allows Toyota to maintain low levels of
inventory while maintaining operating efficiency.
Jidoka is the ability to stop work immediately when problems arise in the production process to prevent
manufacturing defective products. To achieve this, Toyota’s equipment is designed to detect abnormalities and tostop whenever abnormalities occur. Toyota also authorizes its machine operators and other members of its
production team to stop production whenever they note anything suspicious. This helps Toyota to build quality
into the production process by avoiding defects and preventing the waste that would result from producing aseries of defective items.
Toyota believes that the Toyota Production System allows it to achieve mass-production efficiencies evenfor small production volumes. This system gives Toyota the flexibility to respond to changing consumer demand23without significantly increasing production costs. While the Toyota Production System remains the basis of
Toyota’s automobile production, the system has been expanded for use in Toyota’s parts production, logistics
and customer service activities.
In addition to the two principal elements described above, the Toyota Production System seeks to increase
manufacturing efficiency and product quality internally through on-site identification and analysis of problems,
improving transparency throughout the production process, and resolving problems at the source. As one meansof realizing these goals, Toyota has introduced the use of sophisticated information technologies to improve eachstep of its vehicle development process, from product planning to commencement of mass-production. These
technologies are intended to enhance flexibility, simplicity, quality, cost competitiveness, and speed.
Specifically, detailed computer simulation of the assembly and test-run of a new vehicle or new vehicle
production equipment or system is conducted before a prototype is made. An actual prototype is made only after
defects and related issues have been identified and resolved by computer simulation, thereby minimizing the timerequired for rebuilding prototypes and significantly shortening the time required for production. Moreover, thissystem is used to prepare virtual factories and other visual aids in order to facilitate training and communication
at overseas plants and enable the efficient transfer of necessary technology and skills.
In order to strengthen manufacturing and promote localization of overseas production, Toyota establishedthe Global Production Center (“GPC”) in July 2003 as a development and training center for global humanresources. The GPC is intended to introduce local managers to the Toyota methodology, allowing them to train
their subordinates with the local management. GPC develops efficient training systems and formulaic, simplified
and easy-to-understand methodology. One characteristic of the GPC is that managers and supervisors, new hires
and experienced workers can all receive common skill training. GPC’s training system involves a pre-training
phase where trainees learn basic skills and discover the skills that they must acquire through image training. Thisis followed by various steps, from basic skill training, elemental task training, to standard task training, which isa sure method of training. The fruits of this training method are reduced training time, higher levels ofachievement and the efficiency of training. Since January 2006, Toyota has opened regional GPCs in North
America, Europe and Asia. In each region, Toyota commenced courses where trainees from each department aretrained by local trainers to become trainers themselves. Since its establishment, GPC had trained approximately
14,500 people in 6 years.
With the aim of enhancing its competitive edge in “self-manufacturing”, Toyota, since 2001, has beendeveloping and implementing the “simple and user-friendly operation systems & facilities that can be handled byanyone, anywhere”. Toyota is developing its innovative production system, facilities and processing technologies
and is currently promoting it at a global level.
Distribution
Toyota’s automotive sales distribution network is the largest in Japan. As of March 31, 2009, this network
consisted of 290 dealers employing approximately 40,000 sales personnel and operating more than 4,800 sales
and service outlets. Toyota owns 19 of these dealers and the remainder is independent. In addition, at March 31,
2009, Daihatsu’s sales distribution network consisted of 62 dealers employing approximately 5,500 sales
personnel and operating approximately 700 sales and service outlets. Daihatsu owns 36 of these dealers and theremainder is independent.
Toyota believes that this extensive sales network has been an important factor in its success in the Japanesemarket. A large number of the cars sold in Japan are purchased from salespersons who visit customers in theirhomes or offices. In recent years, however, the traditional method of sales through home visits is being replacedby showroom sales and the percentage of automobile purchases through showrooms has been gradually
increasing. Toyota expects this trend to continue, and accordingly, plans to improve its sales activities such as
customer reception and meticulous service at showrooms to increase customer satisfaction.

24

Sales of Toyota vehicles in Japan are conducted through four sales channels — “Toyota,” “Toyopet,”“Corolla” and “Netz.” In addition, Toyota introduced the Lexus brand to the Japanese market in August 2005,
and currently distributes the Lexus brand vehicles through a network of approximately 170 sales outlets in orderto enhance its competitiveness in the domestic luxury automobile market. The following table provides
information for each channel as of March 31, 2009.
Dealers
ChannelToyota . . . . . . . . . . . . . .
Toyopet . . . . . . . . . . . . .
Corolla . . . . . . . . . . . . .
Netz . . . . . . . . . . . . . . . .

ToyotaOwned

Independent

Total

Market Focus

6
5
4
4

43
47
70
111

49
52
74
115

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

Brand

Sales
Outlets

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

165

Market Focus

Premium brandOutside Japan, Toyota vehicles are marketed through approximately 170 distributors in approximately
170 countries and regions. Through these distributors, Toyota maintains networks of dealers. The chart below
shows the number of Toyota distributors as of April 2009 by country and region:
Country/Region

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

Number of Countries

Number of Distributors

3
36
16
30
17
49
19
1

5
30
10
43
16
50
15
4

Daihatsu vehicles are sold in at least 130 countries and regions through approximately 2,300 sales outlets.
Increase Vehicles Functionality and Intelligent Transport Systems
Toyota is striving to increase vehicle functionality that will increase the attractiveness of vehicles and theexcitement of driving. Toyota is also working in various ways to comprehensively realize enhanced transportsystems that are aimed to transport people and goods in a smooth and efficient manner and to build a safe
transportation environment. ITS combines automotive technologies and information technologies in an effort toprovide vehicle occupants with an array of information and enhanced safety features.
Increasing Vehicle Functionality — Information service functions. To Toyota, increasing vehicle
functionality means advancing information service functions that integrate vehicles with telecommunication
systems, and driving assistance functions that use communication technologies and sensing technologies tocreate vehicles with intelligent features. Information service functions can improve the convenience andenrich the driving experience by means of information communication technologies, which add newfunctions “connected” to the basic vehicle functions of “running, turning and stopping”. Examples include
the following:•

Advanced car navigation system with functions such as displaying maps and detailed information
about the car parking space and the VICS (Vehicle Information and Communication System) thatprovides real-time information about road traffic such as congestion, accidents, traffic restrictions
25

and parking. These car navigation systems play an important role in providing drivers with various
types of information on safety, smooth traveling, comfort and convenience.
•

G-BOOK is the latest information network service that merges the latest network technologies andcar multimedia, prior to the arrival of the ubiquitous network society. G-BOOK provides various
types of information useful for driving a car as well as the safety and security services that detect
unusual conditions in the vehicle, which supports a lifestyle using automobiles anytime andanywhere through a network. In 2005, Toyota started G-BOOK ALPHA and G-Link that is atelematics service exclusive to Lexus, which added various features including the traffic congestion
forecast service. In 2007, Toyota launched G-BOOK mX, which has matured as a comprehensive
telematics service and is built on the proven reliability and security of G-BOOK with the addition ofservices allowing drivers to use more convenient navigation systems such as “Map-on-Demand” —the world’s first technology for automatically updating map data and “Probe Communication Traffic
Information” that provides drivers with highly precise information on traffic congestion.

•

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

Increasing Vehicle Functionality — Driving Assistance Functions. Toyota’s driving assistance functions
offer functions that assist drivers with a view to lessen the burden of driving, enhance safety and provide
pleasure of driving to everyone. Toyota is proceeding with enhancements with the view to commercialize
various functions that assist the driver in sensing external information, avoiding danger and making
appropriate maneuvers, all in line with the driver’s basic driving actions. These functions have started to beincorporated in some Toyota vehicles. Examples of driving assistance functions include the following:•“VDIM” (Vehicle Dynamics Integrated Management) is a system that constantly monitors thedriver’s operations and the vehicle’s situation and centrally manages the engine, the steering
mechanisms and the brakes. By starting control even before the vehicle’s control limits are reached,
the VDIM achieves a high level of ‘active safety’ and improves driving performance namely
running, turning and stopping.

•“Pre-crash Safety System” is a system that perceives the possibility of a crash with obstacles or the
car in front by millimeter-wave radar sensor that can precisely detect objects even in bad weather
condition. If it is determined to be unavoidable, it proceeds to activate safety devices at an earlystage to reduce any damage caused by collisions. Toyota is also developing an advanced system that
determines unavoidable collision at an earlier stage with a system using a front camera that better
detects objects and a driver monitoring camera that detects facial orientation and the opening andclosing of eyes.

•“Adaptive Cruise Control” (with all-speed tracking function) allows the vehicle to keep a constantdistance between itself and the preceding vehicle within a range of speed from zero to a preset
speed, automatically slowing down and stopping if necessary to avoid collision. When the car infront speeds up, it allows the driver to accelerate, resuming the system.

•“Lane Keeping Assist System” is a system that uses a camera to detect the white or yellow lanemarkers on the road surface ahead while driving on the highway. The system assists the driver’s
operation of the steering wheel by warning a deviation from the lane and by controlling electric
power steering, in order to help keep the vehicle traveling between the lane markers. This systemdoes not automatically control the steering to maintain travel between lane markers, but requires thesteering of the driver.
26

•“Intelligent Parking Assist” is the world’s first parking assistance system that enables the vehicle tobe automatically steered by electronic steering when backing into a parking spot or when parallelparking. The driver presets the parking position on the display monitor. Toyota is also developing asystem that allows the driver to set the parking position more easily, using a spatial cognition featurethat detects the parking space through ultrasonic sensors.

•“Night View” is a system that supports the driver’s vision at night. By utilizing infrared rays,
pedestrians, vehicles and other objects within and beyond the range of the headlights are displayed
clearly and the driver’s range of vision is widened. In addition, Toyota is developing a system thatbrackets pedestrians in yellow in the Night View screen and prompts attention.

Enhancing Transport Systems. Enhancing transport systems requires addressing various factors that are
pertinent not only to cars but also roads, people and public transport systems in order to ensure the smoothand efficient movement of people and vehicles and to build a safe transportation environment. Although thescope of enhancing transport systems is wide, recent advances in information technology and ITS are
making it possible to develop various systems that used to be mere concepts, in addition to systems such as
the VICS and the ETC (Electronic Toll Collection System) which are already standard in Japan. An exampleof enhancing transport systems is the following.
•“Infrastructure Cooperative Driving Support Safety System” is a system developed to decrease theincidence of traffic accidents that are difficult to prevent with only the existing safety equipment. It
utilizes communication between the vehicle and the road, the vehicle and other vehicles and thevehicle and pedestrians, providing information to the driver and prompting attention with sound.

Toyota is committed to developing new ITS products. Toyota believes that intelligent transport systems will
become an integral part of its overall automotive operations and enhance the competitiveness of its vehicles. As
familiarity with and demand for ITS products grows, Toyota expects an increasing number of ITS products tobecome commercially available and achieve general acceptance each year.
Financial Services
Toyota’s revenues from its financial services operations were ¥1,378 billion in fiscal 2009, ¥1,498 billion in
fiscal 2008 and ¥1,301 billion in fiscal 2007. In fiscal 2009, the decrease in Toyota’s unit sales as a result of the
global economic downturn also resulted in a decrease in the number of financing. Moreover, although theimplementation of government financing initiatives worldwide has resulted in the financing environment
showing signs of recovery since January 2009, from a profit perspective, the environment surrounding Toyota’s
financial services remain as challenging as ever, due to the increased cost of credit and cost from residual value.
Accordingly, Toyota is working towards improving its risk management measures in connection with credit andcontrol of residual value risk.
Toyota Financial Services Corporation is Toyota’s wholly-owned subsidiary, established in July 2000,
which oversees the management of Toyota’s finance companies worldwide and the expansion into new
automobile related product areas. Toyota plans to strengthen the financial services it currently offers in
33 countries and regions, in accordance with its strategy of further developing its auto-related financing
businesses in significant markets.
Toyota Motor Credit Corporation is Toyota’s principal financial services subsidiary in the United States.
Toyota also provides financial services in 32 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,
27

•

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

Toyota Motor Credit Corporation provides a wide range of financial services, including retail financing,retail leasing, wholesale financing and insurance. Toyota Finance Corporation also provides a range of financial
services, including retail financing, retail leasing, credit cards and housing loans. Toyota’s other financesubsidiaries provide retail financing, retail leasing and wholesale financing.
In July 2007, Toyota established the financial services company ZAO Toyota Bank in Russia, and in
October 2008, Toyota established Toyota Financial Services Vietnam in Vietnam.
Net finance receivables for all of Toyota’s dealer and customer financing operations were approximately¥9.5 trillion as of March 31, 2009, representing a decrease of approximately 7.1% as compared to the amount asof March 31, 2008. The majority of Toyota’s financial services are provided in North America. As of March 31,
2009, approximately 63.6% of Toyota’s finance receivables were derived from financing operations in North
America, 14.1% from Japan, 11.0% from Europe, 3.8% from Asia and 7.5% from other areas.
The global economic downturn has caused increases in unemployment rates and increases in the percentageof credit losses. Cost related to residual values are also increasing, due to the decline in the price of used cars. As
a result, Toyota’s earnings results have decreased significantly. The measures Toyota implemented in order to
respond to the decrease in earnings results include improving its collection systems and revising its financing
guidelines.
Approximately 45% of Toyota’s unit sales in the United States during fiscal 2009 included a financing orlease arrangement with Toyota. Because the majority of Toyota’s financial services operations is related to thesale of Toyota vehicles, the decrease in vehicle unit sales may lead to the 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.

28

The following table provides information for Toyota’s finance receivables and operating leases as ofMarch 31, 2008 and 2009.
Yen in millions
March 31,
2008
2009

US dollars
in millions
March 31,2009

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

¥ 6,959,479
1,160,401
2,604,411¥ 6,655,404
1,108,408
2,322,721$ 67,753
11,284
23,646

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

10,724,291
106,678(437,365)(117,706)

10,086,533
104,521(405,171)(238,932)

102,683
1,064(4,125)(2,432)

Total finance receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less – Current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10,275,898(4,301,142)

9,546,951(3,891,406)

97,190(39,615)

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

¥ 5,974,756¥ 5,655,545$ 57,575

Operating Leases
Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 2,814,706
107,619¥ 2,729,713
107,168$ 27,789
1,091

Less – Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,922,325(718,207)

2,836,881(795,767)

28,880(8,101)

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

¥ 2,204,118¥ 2,041,114$ 20,779

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 contract collection and administration. Toyota’s finance subsidiaries acquire
security interests in the vehicles financed and can generally repossess vehicles if customers fail to meet theircontractual 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 retailfinancing customers to carry automobile insurance on financed vehicles covering the interests of both the financecompany 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 which
the finance company assumes ownership of the leased vehicle. The finance company is generally permitted totake possession of the vehicle upon a default by the lessee. Toyota’s finance subsidiaries are responsible forcontract collection and administration during the lease period. The residual value is normally estimated at thetime the vehicle is first leased. Vehicles returned to the finance subsidiaries at the end of their leases are sold byauction. For example, in the United States, vehicles are sold through a network of auction sites as well as throughthe Internet. In most cases, Toyota’s finance subsidiaries require lessees to carry automobile insurance on leased
vehicles covering the interests of both the finance company and the lessee.
29Wholesale Financing
Toyota’s finance subsidiaries also provide wholesale financing primarily to qualified Toyota vehicle dealers
to finance inventories of new Toyota vehicles and used vehicles of Toyota and others. The finance companies
acquire security interests in vehicles financed at wholesale. In cases where additional security interests would be
required, the finance companies take dealership assets or personal assets, or both, as additional security. If adealer defaults, the finance companies have the right to liquidate any assets acquired and seek legal remedies.
Toyota’s finance subsidiaries also make term loans to dealers for business acquisitions, facilities
refurbishment, real estate purchases and working capital requirements. These loans are typically secured withliens on real estate, other dealership assets and/or personal assets of the dealers.
Insurance
Toyota provides insurance services in the United States through Toyota Motor Credit Corporation’s whollyowned subsidiary, Toyota Motor Insurance Services, Inc. (“TMIS”) and its wholly-owned insurance company
subsidiaries. Their principal activities include marketing, underwriting and claims administration. TMIS also
provides coverage related to vehicle service agreements and contractual liability agreements through Toyota
dealers to customers. In addition, TMIS also provides coverage and related administrative services to affiliates ofToyota Motor Credit Corporation. Toyota dealerships in Japan and in other countries and regions also engage in
vehicle insurance sales.
Toyota currently has voting power of approximately 34.6% in Aioi Insurance Co., Ltd. (“Aioi”), a leading
insurance company in Japan. Toyota continues to use its strong relationship with Aioi to develop attractive
consumer insurance products for Toyota’s automotive customers. Abroad, Toyota conducts its finance andinsurance business in alliance with Aioi, mainly in European countries and Australia.
Other Financial Services
Toyota Finance Corporation launched its credit card business in April 2001 and began issuing the Lexus
credit cards in 2005 when the Lexus brand was introduced in Japan. As of March 31, 2009, Toyota FinanceCorporation has over 7 million card holders of which approximately 43,000 are Lexus credit card holders. Toyota
also established Toyota Financial Services Securities Corporation, a subsidiary of Toyota Financial Services
Corporation, which commenced operations in April 2001 to coincide with the launch of the credit card business.
Through Toyota Financial Services Securities Corporation, Toyota provides financial services including sales ofinvestment trusts and high grade corporate bonds.
All Other Operations
In addition to its automotive operations and financial services operations, Toyota is involved in a number ofother non-automotive business activities. Net sales for these activities totaled ¥1,185 billion in fiscal 2009,¥1,347 billion in fiscal 2008 and ¥1,324 billion in fiscal 2007. Sales to external customers of all other operations
represented 3.0% of Toyota’s net revenues for fiscal 2009. Substantially all of Toyota’s revenues from otheroperations were derived in Japan.
Pre-fabricated Housing
Toyota is also engaged in the manufacture and sale of prefabricated housing. Toyota has adapted the coreproduction systems and methodologies used in its automotive operations to this business. Toyota established its
subsidiary Toyota Housing Corporation in April 2003 and has transferred to it the product planning and sales
operations. Furthermore, in order to quickly and accurately grasp clients’ needs and to plan, develop and sell
products on a timely basis, in April 2008, Toyota transferred the product development operation to Toyota Housing
Corporation. In March 2005, Toyota, together with two institutional investors, agreed to jointly invest in Misawa
Home Holdings, Inc. pursuant to their request to assist its rehabilitation. The investment takes the form of a30

subscription of equity shares in the total amount of ¥25.8 billion, of which ¥10.4 billion is subscribed by Toyota.
Toyota is further coordinating with Misawa in the development, manufacture and sale of housing and tocomplement one another in terms of sales area and products. Through these activities, Toyota intends to cater to awide variety of customer needs and to strengthen the housing business of both companies.
Information Technology
Toyota is making efforts to increase sales of on-board ETC units to promote ITS and KDDI Corporation’s
telecom-related products (particularly its mobile telephone services).
Toyota also operates a Japanese-language website, GAZOO.com. The name “Gazoo” originates from theJapanese word gazo meaning images. Gazoo was established as a membership Internet service linking Toyota, its
national dealer network and Gazoo members, and has provided information on new and used Toyota automobiles
and related services as well as online shopping capabilities. Currently, in addition to information on Toyota
automobiles, Gazoo provides information on automobile companies, at the same time providing information as amembership automobile portal site with an enhanced blog function. Furthermore, Toyota is using new content
such as Gazoo Racing and Gazoomura to further add to its content line-up. In October 2008, Toyota introduced
the new Internet-based service TOYOTA METAPOLIS, which is Toyota’s own virtual city created using 3-D
imaging, to inspire new interest in cars and propose new ways for people to enjoy their vehicles through theInternet. To further expand its motor vehicle information service, Toyota launched the G-BOOK telematics
service in Japan in fall 2002 by applying information technology that was developed through Internet
information communications services and in August 2005, G-Link that is a service exclusive to Lexus wasintroduced. Toyota also offers the theft detection service, the vehicle tracking service, the operator support
service and so on as standard to enhance services aiming to provide safety, security and comfort for G-BOOKand G-Link users in their lifestyle using automobiles. With G-BOOK mX announced in April 2007, Toyota
started offering services that allow drivers to use more convenient navigation systems such as“Map-on-Demand” — the world’s first technology for automatically updating map data. Also, Toyota has further
strengthened its ties with Gazoo and G-BOOK and has for example allowed map information searched on a blog
on GAZOO.com to be used on G-BOOK, further maturing as a comprehensive telematics service. In Japan,
Toyota is seeking to promote the use of the G-BOOK by equipping all Crown models with the G-BOOK and
increasing the number of car navigation system models that are compatible with the G-BOOK. Toyota has also
licensed its G-BOOK technology to certain other competitors in Japan. Toyota is applying the technology andexperience it has accumulated in Japan to regions outside Japan. G-BOOK services have been available in China
since March 2009, and Toyota is planning to commence its unique telematics services in the United States inAugust 2009.
In March 2004, Toyota launched its state-of-the-art CRM (Customer Relationship Management) systemcalled e-CRB (evolutionary Customer Relationship Building) in Thailand. e-CRB builds on a technology
cultivated through the development of Gazoo and G-BOOK and offers its customers a variety of services such asproviding information of new vehicles, accepting requests for brochures and estimates and notifying customers
when it is time for maintenance by keeping track of the vehicle’s maintenance history and mileage. In addition,
e-CRB offers an advanced operation system that can be utilized comprehensively at dealers including withrespect to new and used vehicles and services. Toyota is currently promoting e-CRB in countries including
China, Thailand and Australia where steady progress has been made as the service-in rate (the number ofvehicles being serviced in relation to a whole) has increased.
Governmental Regulation, Environmental and Safety Standards
Toyota is subject to laws in various jurisdictions regulating the levels of pollutants generated by its plants.
In addition, Toyota is subject to regulations relating to the emission levels, fuel economy, noise and safety of its
products. Toyota has incurred significant costs in complying with these 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.
31

Vehicle Emissions
Japanese Standards
The Air Pollution Law of Japan and the Road Transportation Vehicle Law 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 addition, both the Noise Regulation Law and the Road
Transportation Vehicle Law provide for noise reduction standards on automobiles in Japan. Toyota’s vehicles
manufactured for sale in Japan comply with all Japanese exhaust emission and noise level standards. In addition,
pursuant to the Act Concerning the Rational Use of Energy, Toyota is progressing with efforts to attaincertification as “ultra low emission vehicles” for the majority of its automobile models under the Ministry ofLand, Infrastructure, Transport and Tourism’s Low Emission Vehicle Approval Standard.
U.S. Federal Standards
The federal Clean Air Act directs the Environmental Protection Agency (“EPA”) to establish and enforce air
quality standards, including emission control standards on passenger cars, light trucks and heavy vehicles. The
EPA decided in February 2000 to adopt more stringent vehicle emission and fuel economy standards applicableto passenger cars and light trucks produced in model years 2004 and beyond. In the standards adopted for modelyears 2004 and beyond, manufacturers must guarantee that their vehicles meet the requirements for ten years or
120,000 miles, whichever occurs first. Manufacturers are not permitted to sell vehicles in the United States that
do not meet the standards. In April 2007, EPA regulations that further restrict emissions from passenger cars andlight trucks operating at cold temperatures became effective. The new emissions standards set by theseregulations will be phased in from 2010 to 2013. Similar standards that further restrict emissions from heavy
vehicles operating at cold temperatures will be phased in from 2012 to 2015.
Furthermore, in April 2007 the U.S. Supreme Court ruled that EPA has the authority to regulate automobile
emissions of greenhouse gases. In response to this ruling, the U.S. President ordered EPA to initiate a greenhousegases rulemaking process. In March 2008, EPA announced plans to begin this rulemaking process.
California Standards
Under the federal Clean Air Act, states are permitted to establish their own vehicle emission control
standards if they receive a waiver from EPA. As a result, the California Air Resources Board (“CARB”)
established the “Low Emission Vehicle Program” and set emission standards for certain regulated pollutants thatwere phased in beginning in the 2004 model year. Under these standards most light trucks and passenger cars are
required to meet the same emissions standards, which were stricter than the federal standards. As part of theoriginal Low Emission Vehicle Program, the CARB also required that a specified percentage of a manufacturer’s
passenger cars and light trucks sold in California for all model years 1998 and after be “zero-emission vehicles”(vehicles producing no emissions of regulated pollutants). The CARB subsequently eliminated the zero-emission
vehicles mandate for model years before 2005, and decided to adopt a zero-emission vehicles requirement formodel years 2005 and beyond. This zero-emission vehicles requirement also permitted certain advanced
technology vehicles such as PHV (Plug-in Hybrid Vehicles), hybrid cars and alternative fuel vehicles that meet“partial zero-emission vehicles requirements” to be granted partial qualification as EV (Electronic Vehicles) or
FC (Fuel Cells). Toyota’s battery-powered RAV4 EV compact sport-utility vehicle and the Toyota FCHV qualify
as zero-emission vehicles. The 2004 model Prius, which underwent a model change in 2003, and the 2007 Camry
Hybrid qualify as partial zero-emission vehicles under the zero-emission vehicles requirement adopted by the
CARB. Toyota intends to continue to develop additional advanced technologies and alternative fuel technologies
that will allow other vehicles using such technologies to qualify as zero-emission vehicles or partial-zeroemission vehicles.
In July 2002, the California legislature passed legislation that required the CARB to develop and adopt, by
the end of 2004, regulations that achieved the maximum feasible reduction in greenhouse gas emissions fromvehicles. In September 2004, the CARB adopted regulations that required a 20 to 30 percent reduction of32

greenhouse gas emissions from passenger vehicles, light trucks and other noncommercial vehicles to be phasedin between the 2009 and 2016 model years. However, in December 2007 EPA denied California’s request for awaiver under the Clean Air Act that would have allowed the state to enforce these regulations to control
greenhouse gas emissions from motor vehicles. EPA indicated that its denial of California’s request was part ofan effort to focus on implementing the stricter CAFE standards, which are discussed below. In January 2008,
California and 15 other states brought a lawsuit challenging EPA’s decision to block implementation of the
California greenhouse gas emission regulations. In April 2008, the Ninth Circuit Court of Appeals rejected an
EPA motion to dismiss this suit. The EPA is currently reconsidering its decision of December 2007, in response
to a direction issued by U.S. President in January 2009.
Other States
The states of New York, Massachusetts, Arizona, Connecticut, Delaware, Illinois, Maine, Maryland, New
Jersey, New Mexico, Oregon, Pennsylvania, Rhode Island, Vermont and Washington have either adopted, or plan
to adopt, regulations substantially similar to California’s zero-emission vehicles requirement and greenhouse gas
emissions regulations. These states are intervening in the lawsuit filed by California challenging EPA’s denial of
California’s waiver request.
Canadian and Mexican Standards
Canada has established vehicle emission standards equivalent to the federal standards in the United States,
including the heightened requirements that will be applicable to passenger cars and light trucks in model years
2004 and beyond. Mexico’s emission control standards are similar to those applicable in the United States after
the 1994 model year, however, emission regulations have become tighter for model years 2007 and beyond.
Further regulations on emission are scheduled to match the improved fuel property.
European Standards
The European Union adopted a directive that establishes increasingly stringent emissions standards forpassenger vehicles and light commercial vehicles in October 1998. Under this directive, the standards adopted
beginning with year 2000 require manufacturers to recall any vehicles which fail to meet the standards forfive years or 80,000 kilometers, whichever occurs first. Toyota introduced vehicles complying with this directive
in 1999. Under further standards adopted in 2005, manufacturers are obligated to meet the more stringent
standards for five years or 100,000 kilometers, whichever occurs first. In 2007, the European Parliament adopted
more stringent emission standards for passenger vehicles and light commercial vehicles. The effective dates forphasing in these stricter standards are September 1, 2009 (Euro 5) and September 1, 2014 (Euro 6). Euro 5
provides for lower emission levels for gasoline and diesel powered vehicles and also extends the manufacturers’
responsibility for emission performance to 160,000 kilometers. The primary focus of Euro 6 is to limit further
emissions of diesel powered vehicles and bring them down to a level equivalent to gasoline powered vehicles.
Compliance with new emission control standards will present significant technological challenges toautomobile manufacturers and will likely require significant expenditures. Examples of these challenges include
the development of advanced technologies, such as high performance batteries and catalytic converters, as wellas the development of alternative fuel technologies. Manufacturers that are unable to develop commercially
viable technologies within the time frames set by the new standards will lose their market share and will beforced to decrease the number of types of vehicles and engines in their principal markets.
Vehicle Fuel Economy
Japanese Standards
The Act Concerning the Rational Use of Energy (the “Act”) requires automobile manufacturers to improvetheir vehicles to meet specified fuel economy standards. Fuel economy standards are established according to thetypes of vehicles specified below, and are required to be met by either fiscal 2011 or fiscal 2016.
33

Among certain qualifying passenger vehicles:•

Vehicles which are designated in Article 75, Paragraph 1 of the Road Transportation Vehicle Law as
type-designated vehicles (“type-designated vehicles”) with 10 seats or less using gasoline, gas oil or
LPG;•

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

Among certain qualifying cargo vehicles:•

Type-designated vehicles that are 3.5 tons or less in vehicle weight using gasoline, gas oil or LPG;•

Type-designated vehicles that are over 3.5 tons in vehicle weight using gas oil or LPG, or designatedcarbon monoxide emission control vehicles.

Toyota is promoting the improvement of its vehicles in order to achieve compliance with these standards.
Japan ratified the Kyoto Protocol in June 2002, which became effective in February 2005. This protocol
requires Japan to reduce its carbon dioxide emissions by 6% during the years 2008 to 2012 as measured from the1990 base year.
U.S. Standards
The Federal Motor Vehicle Information and Cost Savings Act requires automobile manufacturers to comply
with Corporate Average Fuel Economy standards, commonly referred to as the CAFE standards. Under this law,
limits are imposed on the amount of regulated pollutants that may be emitted by new motor vehicles in the
United States. A manufacturer is subject to substantial civil penalties if, in any model year, its vehicles do notmeet 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 three 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. However, credits earned in
respect to passenger cars may not be used for light trucks. Similarly, credits earned in respect to light trucks may
not be used for passenger cars. Passenger cars are further divided into the two categories “Domestic” and“Import.” Credits earned in one category may not be applied toward the other category.
In April 2006, the National Highway Traffic Safety Administration established CAFE standards applicableto light trucks for model year 2008 and beyond. These CAFE standards aimed to shift the framework from one
that used to be advantageous only to compact car manufacturers to one that is fair to full line manufacturers. The
requirements were changed so that the CAFE standards are now determined by a sales rate based on vehicle size
(measured by the area of the wheel and wheel base) for each manufacturer. In model year 2011, truck CAFE
standards will begin to apply to heavier SUVs, vans and other heavier passenger vehicles.
Concern over the impact of carbon dioxide emissions on global warming has drawn attention to the need for
reducing the use of fossil fuels, in part by increasing vehicle fuel economy. In order to effectuate a more stringent
CAFE standard, the federal government enacted a law in December 2007 that raises the CAFE standard to
35 miles per gallon by 2020 on average for passenger cars and light trucks. Currently, the CAFE standard is27.5 miles per gallon for cars and just over 22 miles per gallon for light trucks. Under this new law, the same
method used in determining the applicable CAFE standard for light trucks for model years 2008 and beyond isalso used for passenger cars. This method uses sales by vehicle size (wheelbase and track width) of each car
manufacturer to determine the applicable CAFE standard. The proposed rule provides flexibility by increasing34

from three to five the number of years that car manufacturers can carry forward credits earned for exceeding
CAFE standards, and allowing manufacturers to transfer the credits from one of their classes of vehicles toanother. Further measures include regulations that will apply to model year 2011, which were released in March
2009. The standards in these regulations have been established at 30.2 miles per gallon on average for passenger
cars and 24.1 miles per gallon on average for trucks.
In addition to the CAFE standards, there are multiple standards in the United States including the EPA’semission regulations and the California standard. The California standard is currently suspended from taking
effect. Automobile manufacturers had called for uniform standards, as they would need to comply with standards
that varied by state if all standards became effective. On May 19, 2009, the U.S. President announced his intent
to establish a federal regulation that unifies the three standards. Moreover, he announced that the regulation
would conform to the California standard, raising the CAFE standards to 35.5 miles per gallon by 2016. Toyota
strives to meet the fuel economy standards by further developing fuel-efficient technology, alternative fueltechnology and other advanced technology.
In addition, the Energy Tax Act of 1978 imposes a “gas guzzler” tax on automobiles with a fuel economy
rating below specified levels.
European Standards
The European Union has signed the Kyoto Protocol and agreed to reduce carbon dioxide emissions by 8%during the years 2008 to 2012, as measured from the 1990 base year. In early 1999, the European Commission
and the European Automotive Manufacturers Association (ACEA) agreed on a voluntary agreement which
establishes an average emissions target of 140 grams of carbon dioxide per kilometer for new cars sold in theEuropean Union in 2008 (the voluntary agreement applied to the 15 states who were members of the European
Union at that time). The Japan Automobile Manufacturers Association and the Korean Automobile
Manufacturers Association have also agreed on a voluntary agreement, similar to that entered into by theEuropean Commission, with the year 2009 as a target year. The European Commission, dissatisfied with theprogress being made towards achieving the targets established in the voluntary agreement, proposed making thestandards mandatory in December 2007. The European Commission’s proposal was enshrined in regulations
which established an average emissions standard of 120 grams of carbon dioxide per kilometer by 2012 forpassenger vehicles sold in the 27 member states of the European Union (the proposal contemplated that vehicle
motor technology could reduce emissions to 130 grams of carbon dioxide per kilometer, and complementarymeasures, such as installing tire pressure monitoring systems, could further reduce emissions by 10 grams ofcarbon dioxide per kilometer). The proposed emission regulations were adopted after receiving the approval of
the European Parliament in December 2008 and subsequently being approved by the Council of the European
Union in April 2009. Upon adoption, it was determined that the regulations would be phased in gradually,
initially requiring 65% of new cars to comply with the new standards in 2012 and increasing to 100% of new carsin 2015. As a result of the new regulations, different targets will apply to each manufacturer, based on theirrespective fleets of vehicles and weight. Penalties will apply to those manufacturers who fail to meet their targets
from 2012, in amounts corresponding to the degree of shortfall. Manufacturers failing to meet their targets
between 2012 and 2018 will incur penalties of between €5 and €95 per each gram of carbon dioxide perkilometer shortfall for each non-compliant vehicle, and such penalties will rise to €95 in 2018 and beyond.
Furthermore, a medium- to long-term target of reducing emissions to 95 grams of carbon dioxide per kilometerby 2020 has also been proposed. This represents a remarkably ambitious target, even in comparison to other fuelefficiency requirements worldwide.
An increasing number of European Union member states are introducing car tax laws based on carbon
dioxide emission levels, pursuant to the directive issued by the European Commission in 2005. This trend is
expected to continue, in accordance with the recent increases in environmental awareness.

35

Vehicle Safety
Japanese Standards
Standards relating to pedestrian head protection are applicable to all new models manufactured after
September 2005 with certain exceptions, and vehicles continued to be manufactured after September 2010. In
addition, standards requiring protection against electrocution will apply to hybrid vehicles and electric vehicles
manufactured on and after July 1, 2012, and regulations relating to vehicles powered by lithium ion rechargeable
batteries were implemented in November 2008.
For the purpose of harmonizing with the international standards, frontal offset collision standards areapplied to (i) new passenger vehicle models manufactured after September 2007 and passenger vehicles
continued to be manufactured after September 2009, and to (ii) new cargo vehicles models manufactured after
April 2011 and cargo vehicles continued to be manufactured after April 2016. In addition, seatbelt anchorage andseatbelt standards are also expected to be combined with the Economic Commission for Europe (“ECE”) andcars manufactured after July 2012 are required to meet these standards. Standards relating to interference are
currently under consideration.
U.S. Standards
The U.S. National Traffic and Motor Vehicle Safety Act of 1966, or Safety Act, requires vehicles andequipment sold in the United States to meet various safety standards issued by the National Highway Traffic
Safety Administration. The Safety Act also authorizes the National Highway Traffic Safety Administration toinvestigate complaints relating to vehicle safety and to order manufacturers to recall and repair vehicles found tohave safety-related defects. The cost of these recalls can be substantial depending on the nature of the repair andthe number of vehicles affected.
The Transportation Recall Enhancement, Accountability and Documentation Act was enacted in the UnitedStates on November 1, 2000. This Act required the National Highway Traffic Safety Administration to regulate
the dynamic rollover standards and to upgrade federal motor vehicle safety standards relating to tires. It also
required the National Highway Traffic Safety Administration to enhance its authority to gather information
potentially relating to motor vehicle defects. This Act substantially increases the National Highway Traffic
Safety Administration’s authority to impose civil penalties for noncompliance with regulatory requirements andspecifies possible criminal penalties for violations of the federal Fraud and False Statements Act. Under this Act,
the National Highway Traffic Safety Administration expanded its New Car Assessment Program to implement
consumer information programs for vehicle rollover resistance and child restraints and adopted extensive early
warning defect reporting requirements in 2002, and strengthened regulations regarding tire-pressure monitoring
systems in 2005.
Legislation on transportation budget plan promoting a safe and efficient vehicle safety program for drivers,
the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) was
passed in August 2005. The legislation requires the National Highway Traffic Safety Administration to propose
and issue standards to reduce rollover accidents (by October 1, 2006), to complete the creation of standards for
reduction of vehicle passenger release from cars at the time of rollover accidents (by October 1, 2009), to
upgrade door lock standards (by February 2008), to complete the upgrade of roof crash standards (proposal forthe standard should be made by December 31, 2005 and the final standard should be decided by July 1, 2008), to
decide on the standard on side impact for the improvement of protection performance of vehicle passengers in allseats location (by July 1, 2008), to review a seat belt wearing technology and to complete a study including
proposal for improving the rate of seat belt usage (by July 1, 2008), to establish standards to display New Car
Assessment Program rating to new cars label (applied on or after September 1, 2007), and to complete theupgrade of the standard for power windows that will require pulling up switches (by April 1, 2007). Some actions
have already been taken in response to the above requirements.

36

In February 2008, legislation to prevent non-traffic related injuries to young children caused by vehicles, the“Cameron Gulbransen Kids Transportation Safety Act”, was passed. The legislation requires the National
Highway Traffic Safety Administration to make rules to ensure safety on all passenger vehicles, including thefollowing: (1) to begin rulemaking to require features that will prevent children from getting caught in power
windows (by August 28, 2009) and decide on the standard or on the discontinuance of the rulemaking (byAugust 30, 2010); (2) to begin rulemaking to require rearward visibility to prevent children from being struck bybacking vehicle (by March 2, 2009) and decide on the standard (by February 28, 2011); and (3) to require placing
vehicle service breaks on or after September 1, 2010.
Toyota actively invests in technology development designed to increase the safety of its vehicles. Toyota isdeveloping technologies to increase the availability of existing safety systems to all types of its vehicles. These
technologies include supplemental restraint system (SRS) airbags, anti-lock braking systems, side airbags,
curtain shield airbags, vehicle stability control and other safety features.
European, Canadian and Other Standards
In Europe, following the White Paper “European transport policy for 2010: time to decide” adopted in 2001,
which declares targeting to halve the number of deaths caused by road accidents by 2010, various groups indifferent fields are currently conducting research and analyses. In addition, the “Road Safety Action Programme”
adopted by the European Commission in 2003 envisions the reduction in deaths from road accidents by utilizing
technological advancement relating to the improvement in vehicle safety. The White Paper and the Action
Programme aim to promote the introduction of safety features such as automatic cruise control, speed alert
system, intelligent speed limitation devices, alcohol lock, whiplash prevention, collision prevention, universal
child restraints system (CRS) and seat belt reminders.
The European Commission and the ACEA have established CARS 21, High Level Group that aims tostrengthen the competitiveness of the European automotive industry, and examined the recommendations withthe legal framework of a decade later in mind. The CARS 21 final report issued at the end of 2005 contains
recommendations relating to the simplification of legislation and road safety, among other issues, and indicates a
Ten Year Roadmap. In addition, in February 2007, the European Commission issued a communication regarding
the CARS 21 Final Report, in which concrete action plans for future legislation were announced. The plans
called to make it mandatory for all passenger vehicles to be equipped with ISOFIX CRS by 2009. The plans
further contemplated making it mandatory for cars to be equipped with Daytime Running Lamp (“DRL”),
Electric Stability Control, Seatbelt Reminder and Tire Pressure Monitoring System. And finally, the plans
mentioned the need for further consideration of the regulation pertaining to roll-resistant tires, the revision ofphase-two of the pedestrian protection and the technological feasibility of automatic collision mitigation braking
system. The European Commission carried out a mid-term review of CARS 21 in October 2008 and confirmedthat active safety systems and intelligent transport systems should be utilized. The European Commission also
confirmed its intention to agree a series of new, post-2010 objectives for road safety at a European level, while
not limiting the ability of individual member states to set national targets. Thereafter, in May 2008, the European
Commission proposed to require new model cars from 2011 to have electronic stability control systems,
introducing regulations relating to low rolling resistance tires from 2013 and requiring tire pressure monitoring
systems from 2012. Heavy vehicles are proposed to have advanced emergency braking systems and lane
departure warning systems from 2013. The Commission further proposed to repeal more than 50 existing
European Commission directives and to replace them with a single regulation aimed to incorporate United
Nations standards. This regulatory framework is expected to be released during 2009.
Vehicle safety regulations in Canada are similar to those in the United States. Among the ASEAN countries,
in 2006, Thailand and Malaysia acceded to the 1958 agreement of UN regarding safety regulations and bothcountries plan to develop a legal system in order to incorporate ECE Regulations into domestic laws. Vietnam,
Singapore, Indonesia and the Philippines will soon follow suit by acceding to the 1958 agreement, thereby
ASEAN country will require to comply with the ECE Regulations. Countries in South America and37

the Middle East have also adopted automobile safety regulations, with South America generally following
standards set by the UN, ECE or the U.S., and the Middle East basing their domestic laws primarily oninternational regulations or legal standards.
Environmental Matters
Japanese Standards
Toyota’s automotive operations in Japan are subject to substantial environmental regulation under the Air
Pollution Law, the Water Pollution Control Law, the Noise Regulation Law and the Vibration Control Law.
Under these laws, if a business entity establishes or alters any facility that is regulated by these laws, the business
entity is required to give prior notice to regulators, and if a business entity discharges or causes exhaust,
wastewater, noise or vibration from such facility, the business entity is also required to comply with theapplicable standards. Toyota is also subject to local regulations, which in some cases impose more stringent
obligations than the Japanese central government requirements. Toyota has complied with these regulations.
Under the Waste Disposal and Public Cleaning Law, producers of industrial waste must dispose of industrial
waste in the manner prescribed in the Waste Disposal and Public Cleaning Law. Toyota has also complied with
the Waste Disposal and Public Cleaning Law.
In February 2003, the Soil Contamination Countermeasures Law became effective in Japan. The Soil
Contamination Countermeasures Law stipulates the contamination testing and removal measures that are
required when property of former factory or place of business on which prohibited hazardous materials were used
are converted to residential areas or other public use. In addition, the Law on Recycling of End-of-Life Vehicles
was promulgated in July 2002. Under the Law on Recycling of End-of-Life Vehicles, vehicle manufacturers are
required to take back and recycle specified materials (automotive shredder residues, air bags and fluorocarbons)of end-of-life vehicles and the provisions concerning such obligations of vehicle manufacturers became effectivein January 2005. Toyota has coordinated with relevant parties to establish a vehicle take-back and recycle systemthroughout Japan. As a result, in fiscal 2009, Toyota achieved a recycling rate of 80% for automobile shredder
residue (the legal requirement being 30%) and 94% for air bags (the legal requirement being 85%) and reached
the targets set forth in this law.
U.S. Standards
Toyota’s assembly, manufacturing and other operations in the United States are subject to a wide range ofenvironmental regulation under the Clean Air Act, the Clean Water Act, the Resource Conservation andRecovery Act, the Pollution Prevention Act of 1990 and the Toxic Substances Control Act. Toyota is also subject
to a variety of state legislation that parallels, and in some cases imposes more stringent obligations than, federal
requirements. These federal and state regulations impose severe restrictions on air- and water-borne discharges ofpollution from Toyota facilities, the handling of hazardous materials at Toyota facilities and the disposal ofwastes from Toyota operations. Toyota is subject to many similar requirements in its operations including
Europe, Canada and other countries.
Moreover, the Environmental Protection Agency has promulgated more stringent National Ambient Air
Quality Standards for Ozone and Particulate Matter, which define strategies needed to attain the new standards.
Toyota expects growing pressure in the next several years to further reduce emissions from motor vehicles andmanufacturing facilities.
European Standards
In October 2000, the European Union brought into effect a directive that requires member states topromulgate regulations implementing the following:•

automotive manufacturers shall bear all or a significant part of the costs for taking back end-of-life
vehicles sold after July 1, 2002 and dismantling and recycling those vehicles. Beginning January 1,
2007, this requirement became applicable to vehicles sold before July 1, 2002 as well;38•

automotive manufacturers may not use certain hazardous materials in vehicles sold after July 1, 2003;•

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

Laws to implement this directive came into effect in each of the European Union member states. Currently,
there are uncertainties surrounding the implementation of the applicable regulations in different European Union
member states, particularly regarding automotive manufacturer responsibilities and resultant expenses that may
be incurred.
In addition, under this directive, the member states must take measures to ensure that car manufacturers,
distributors and other auto-related economic operators establish adequate used vehicle collection and treatment
facilities and to ensure that hazardous materials and recyclable parts are removed from vehicles prior toshredding. This directive impacts Toyota’s vehicles sold in the European Union. Toyota is planning toaccommodate, in offering its products, any measures the European Union member states will choose to take inorder to comply with this directive.
Based on the legislation that has been enacted to date, Toyota has provided for its estimated liability related
to covered vehicles in existence as of March 31, 2009. The amount of estimated liability may change dependingon the legislation that will be enacted and subject to other circumstances. Although Toyota does not expect its
compliance with the directive to result in significant cash expenditures, Toyota is continuing to assess the impactof this future legislation on its results of operations, cash flows and financial position.
The European Union has also issued directives and made proposals relating to the following subjects onenvironmental matters:•

emission standards that include a framework permitting member states to introduce fiscal incentives topromote early compliance;•

reaffirmation of its goal of reducing carbon dioxide emissions; and•reform of rules governing automotive distribution and service. The block exemption on distribution has
been amended so that dealers may engage in cross-border sales actively within the European Union andopen additional facilities for sales and services. Additionally, dealers may no longer be required bymanufacturers to operate both sales and service facilities side by side.

Toyota believes that its operations are materially in compliance with environmental regulatory requirements
concerning its facilities and products in each of the markets in which it operates. Toyota continuously monitorsthese requirements and takes necessary operational measures to ensure that it remains in material compliancewith all of these requirements.
Toyota believes that environmental regulatory requirements have not had a material adverse effect on its
operations. However, compliance with environmental regulations and standards has increased costs and is
expected to lead to higher costs in the future. Therefore, Toyota recognizes that effective environmental costmanagement will become increasingly important. Moreover, innovation and leadership in the area ofenvironmental protection are becoming increasingly important to remain competitive in the market. As a result,
Toyota has proceeded with the development and production of environmentally friendly technologies, such as
hybrid vehicles, fuel-cell vehicles and high fuel efficiency, low emission engines.
In addressing environmental issues, based on an assessment of the environmental impact of its products
through their life cycles, Toyota, as a manufacturer, strives to take all possible measures in each life stage of a39

product, from development through production and sales, and continues to work toward technologicalinnovations to make efficient use of resources and to reduce the burden on the environment.
Research and Development
Toyota’s research and development activities focus on the environment, vehicle safety, information
technology and product development. For a detailed discussion of the company’s research and development
policies for the last three years, see “Operating and Financial Review and Prospects — Research andDevelopment, Patents and Licenses”.
The following table provides information for Toyota’s principal research and development facilities.
Facility

Principal Activity

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

Planning, design, vehicle evaluation, development ofprototypes

Tokyo Design Research & Laboratory . . . . .

Design research and development of advanced stylingdesigns

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

Research and advanced development on powertrains,materials, electronic parts and other matters

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

Vehicle testing and evaluation

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

Advanced technology development of electronics

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

Development of the upper body part for a portion of North
American manufactured vehicles, adapting vehicles sold in
North America to the market, advanced technology research,
external affairs for legal and regulatory affairs, certification

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

Design development, model production and design research

Toyota Research Institute of North America(TRI-NA) . . . . . . . . . . . . . . . . . . . . . . . . .

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

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

Development of the upper body part for a portion ofEuropean manufactured vehicles, adapting vehicles sold in
Europe to the market, advanced technology research,
external affairs for legal and regulatory affairs, certification

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

Design development, model production and design survey

Toyota Motorsport GmbH . . . . . . . . . . . . . .

Development of Formula One race cars

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

Design, development and evaluation of portions of vehicles
that are exclusively sold in Australia and Asia

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

Design of portions of vehicles that are exclusively sold inAustralia and Asia
40

The success of Toyota’s research and development activities is a key element of Toyota’s strategy. The
effectiveness of Toyota’s research and development activities is subject to a number of factors, some of which
are not in Toyota’s control. These factors include the introduction of innovations by Toyota’s competitors that
may reduce the value of Toyota’s initiatives and Toyota’s ability to convert its research and development into
commercially successful technologies and products.
Components and Parts, Raw Materials and Sources of Supply
Toyota purchases parts, components, raw materials, equipment and other supplies from several competing
suppliers located around the world. Toyota works closely with its suppliers to obtain the best supplies. Toyota
believes that this policy encourages technological innovation, cost reduction and other competitive measures. No
single supplier accounted for more than 5% of Toyota’s consolidated purchases of raw materials, parts andequipment during fiscal 2009, except for Denso Corporation, an affiliate of Toyota, which supplied
approximately 10% of Toyota’s purchases during fiscal 2009. Toyota plans to continue purchases based on thesame principle and does not anticipate any difficulty in obtaining supplies in the foreseeable future.
Because Toyota had more than 50 overseas operations in 26 countries and regions as of March 31, 2009,
procurement of parts and components are being carried out not only locally in the country of the production site
but also from third-countries, and the distribution network has become increasingly more complex. In order torealize timely and efficient distribution at the same time as keeping total costs at a minimum, Toyota is
promoting efforts to optimize each stage of the supply-chain. To this end, Toyota has developed a standardized
system of global distribution and is supporting the operation of the system at each production base. The use of
the global distribution system has enabled Toyota to strive to keep up with changes in production, and to procureparts and components to meet production of any type of models at changing levels of production in a timely
manner. These varying efforts, combined together, have led to maximized customer satisfaction, as well as tobuilding a good working relationship with Toyota’s suppliers.
The recent market condition and market price of some raw materials such as steel has shown a downward
tendency after an upward tendency. Toyota is making efforts responding to the change, such as reducing theamount of materials used, in order to lower its costs.
Toyota’s ability to continue to obtain supplies in an efficient manner is subject to a number of factors, someof which are not in Toyota’s control. These factors include the ability of its suppliers to provide a continued
source of supplies and the effect on Toyota of competition by other users in obtaining the supplies.
Intellectual Property
Toyota holds numerous Japanese and foreign patents, trademark, design patents and some utility model
registrations. It also has a number of applications pending for Japanese and foreign patents. While Toyota
considers all of its intellectual property to be important, it does not consider any one or group of patents,
trademarks, design patents or utility model registrations to be so important that their expiration or termination
would materially affect Toyota’s business.

41Capital Expenditures and Divestitures
Set forth below is a chart of Toyota’s principal capital expenditures between April 1, 2006 and March 31,
2009, 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.
Total Cost
(billions of yen)

Location

Method ofFinancing

1,286.4

Japan

Internal funds,
proceeds fromissuance ofbonds, etc.

Investment primarily in new technology and products by
Toyota Motor Kyushu, Inc. . . . . . . . . . . . . . . . . . . . . . . .

135.9

Japan

Internal funds

Investment primarily in new technology and products byHino Motors, Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

120.4

Japan

Internal funds

Investment primarily in new technology and products by
Daihatsu Motor Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . .

106.3

Japan

Internal funds

Investment primarily in new technology and products by
Toyota Auto Body Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . .

104.9

Japan

Internal funds

Investment primarily in new technology and products by
Panasonic EV Energy Co., Ltd. . . . . . . . . . . . . . . . . . . . .

61.9

Japan

Internal funds

Investment primarily in new technology and products by
Kanto Auto Works, Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . .

51.9

Japan

Internal funds

Investment to promote localization by
Toyota Motor Manufacturing Canada Inc.

...........

248.6

CanadaInternal funds

Investment to promote localization by
Toyota Motor Manufacturing, Indiana, Inc.

Description of Activity

Investment primarily in manufacturing facilities toundertake model changes by
Toyota Motor Corporation . . . . . . . . . . . . . . . . . . . . . . . .

..........

122.6

United States

Internal funds

Investment to promote localization by
Toyota Motor Thailand Co., Ltd. . . . . . . . . . . . . . . . . . . .

111.5

ThailandInternal funds

Investment to promote localization by
Toyota Motor Europe NV/ SA . . . . . . . . . . . . . . . . . . . . .

96.3

BelgiumInternal funds

Investment to promote localization by
Toyota Motor Manufacturing, Texas, Inc. . . . . . . . . . . . .

77.6

United States

Internal funds

Investment to promote localization by
Toyota Motor Manufacturing, Kentucky, Inc. . . . . . . . . .

77.3

United States

Internal funds

Investment to promote localization by
Toyota Motor Manufacturing (UK) Ltd.

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

72.7

United Kingdom

Internal funds

Investment to promote localization by
Toyota South Africa Motors (Pty) Ltd.

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

65.4

South Africa

Internal funds

.....

50.8

United States

Internal funds

Investment primarily in leased automobiles by
Toyota Motor Credit Corporation . . . . . . . . . . . . . . . . . .

2,893.6

United States

Internal funds
and borrowings

Investment to promote localization by
Toyota Motor Manufacturing, West Virginia, Inc.

Set forth below is information with respect to Toyota’s material plans to construct, expand or improve its
facilities between April 2009 and March 2010, 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.
42

Total Cost
(billions of yen)

Location

Investment primarily in manufacturing facilities by
Toyota Motor Corporation . . . . . . . . . . . . . . . . . . . . . . . . .

228.9

Japan

Investment primarily in manufacturing facilities by
Toyota Motor Manufacturing, Indiana, Inc. . . . . . . . . . . . .

48.4

United States

Internal funds

Investment primarily in manufacturing facilities byPanasonic EV Energy Co., Ltd. . . . . . . . . . . . . . . . . . . . . .

39.0

Japan

Internal funds

Investment primarily in manufacturing facilities by
Daihatsu Motor Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . .

30.0

Japan

Internal funds

Investment primarily in manufacturing facilities by
Toyota Kirloskar Motor Private Ltd. . . . . . . . . . . . . . . . . .

26.5

India

Internal funds

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

25.0

Japan

Internal funds

Description of Activity

Method ofFinancing

Internal funds,
proceeds fromissuance ofbonds, etc.

Set forth below is additional information with respect to Toyota’s material plans to construct, expand or
improve its facilities, presented on a “by facility” basis.
Mississippi Plant. In February 2007, Toyota announced the construction of an automobile manufacturing
plant in Mississippi, which will be its eighth plant in North America. The total cost of the plant was initiallyplanned to be approximately $1.3 billion and was expected to produce the Highlander SUV, but Toyota decided
in July 2008 that the Mississippi plant will produce the Prius instead. In addition, although production was
expected to commence in 2010, in response to stagnation in the vehicle market, Toyota has decided to postpone
the commencement of production in December 2008.
Tohoku Region Plant. In April 2008, Toyota decided to build an engine plant in Kurokawa, Miyagi
Prefecture, Japan. However, the commencement of production at this plant, which was initially expected to occur
at the end of 2010, has been postponed. Toyota will determine the timing for commencement of production inconsideration of fluctuations in demand.
Second India Plant. In April 2008, Toyota decided to construct a second vehicle plant in India. This plant is
expected to produce passenger cars including compact cars with an annual production capacity of 70 thousand
units, and is expected to constitute a substantial portion of the expected investment in manufacturing facilities by
Toyota Kirloskar Motor Private Ltd. The plant is expected to commence production in 2010.
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 continuously being adjusted andincurred in variable and constantly changing amounts as part of the overall work-in-progress.
Seasonality
Toyota has historically experienced slight seasonal fluctuations in unit sales. Generally, Toyota’s unit sales
levels are highest in March. In fiscal 2007 and 2008, Toyota’s unit sales levels were highest in March of eachyear, with approximately 10% to 11% of annual unit sales generated during that month, and for each of theremaining months, its unit sales have generated approximately 7% to 9% of its annual unit sales. Fiscal 2009 was
an exception, as the rapid contraction of automotive markets had a greater impact on sales than seasonal
fluctuations.
43Legal Proceedings
United States Antitrust Proceedings
In February 2003, Toyota, General Motors Corporation, Ford, DaimlerChrysler, Honda, Nissan and BMW
and their U.S. and Canadian sales and marketing subsidiaries, the National Automobile Dealers Association and
the Canadian Automobile Dealers Association were named as defendants in purported nationwide class actions
on behalf of all purchasers of new motor vehicles in the United States since January 1, 2001. 26 similar actions
were filed in federal district courts in California, Illinois, New York, Massachusetts, Florida, New Jersey and
Pennsylvania. Additionally, 56 parallel class actions were filed in state courts in California, Minnesota, New
Mexico, New York, Tennessee, Wisconsin, Arizona, Florida, Iowa, New Jersey and Nebraska on behalf of thesame purchasers in these states. As of April 1, 2005, actions filed in federal district courts were consolidated in
Maine and actions filed in the state courts of California and New Jersey were also consolidated, respectively.
The nearly identical complaints allege that the defendants violated the Sherman Antitrust Act by conspiring
among themselves and with their dealers to prevent the sale to United States citizens of vehicles produced for the
Canadian market. The complaints allege that new vehicle prices in Canada are 10% to 30% lower than those in
the United States and that preventing the sale of these vehicles to United States citizens resulted in United States
consumers paying excessive prices for the same type of vehicles. The complaints seek permanent injunctions
against the alleged antitrust violations and treble damages in an unspecified amount. In March 2004, the federal
district court of Maine (i) dismissed claims against certain Canadian sales and marketing subsidiaries, including
Toyota Canada, Inc., for lack of personal jurisdiction but denied or deferred to dismiss claims against certain
other Canadian companies, and (ii) dismissed the claim for damages based on the Sherman Antitrust Act but did
not bar the plaintiffs from seeking injunctive relief against the alleged antitrust violations. The plaintiffs havesubmitted an amended complaint adding a claim for damages based on state antitrust laws and Toyota has
responded to the plaintiffs’ discovery requests. Toyota believes that its actions have been lawful. In the interestof quickly resolving these legal actions, however, Toyota entered into a settlement agreement with the plaintiffs
at the end of February 2006. The settlement agreement is pending the approval of the federal district court, andimmediately upon approval the plaintiffs will, in accordance with the terms of the settlement agreement,
withdraw all pending actions against Toyota in the federal district court as well as all state courts and all related
actions will be closed.
Other Proceedings
Toyota has various other legal actions, governmental proceedings and other claims pending against it,
including product liability claims in the United States. Although the claimants in some of these actions seek
potentially substantial damages, Toyota cannot currently determine its potential liability or the damages, if any,
with respect to these claims. However, based upon information currently available to Toyota, Toyota believes
that its losses from these matters, if any, would not have a material adverse effect on Toyota’s financial position,
operating results or cash flows.

444.C ORGANIZATIONAL STRUCTURE
As of March 31, 2009, Toyota Motor Corporation had 283 Japanese subsidiaries and 246 overseas
subsidiaries. The following table sets forth for each of Toyota Motor Corporation’s principal subsidiaries, thecountry of incorporation and the percentage ownership and the voting interest held by Toyota Motor Corporation.
Country ofIncorporation

Name of Subsidiary

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

Percentage
Ownership
Interest

Percentage
VotingInterest

100.0050.21
100.0051.33
100.0056.28
50.47
100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.0095.00
100.0086.43
79.17

100.0050.57
100.0051.66
100.0056.48
50.83
100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.0095.00
100.0086.43
79.17

100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00

4.D PROPERTY, PLANTS AND EQUIPMENT
As of March 31, 2009, Toyota and its affiliates produce automobiles and related components through morethan 50 manufacturing organizations in 26 countries and regions around the world. The facilities are locatedprincipally in Japan, the United States, Canada, the United Kingdom, France, Turkey, Czech Republic, Thailand,
China, Taiwan, South Africa, Australia, Argentina and Brazil.

45

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, 2009, 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 Name

Location

Floor Space(thousandsquare meters)

Principal
Products orFunctionsJapan
Toyota Head Office and Technical Center

Toyota City, Aichi Pref.

1,300

Tahara Plant
Motomachi Plant
Takaoka Plant
Tsutsumi Plant
Kamigo Plant
Honsha Plant
Kinu-ura Plant
Higashi-Fuji Technical Center

Tahara City, Aichi Pref.
Toyota City, Aichi Pref.
Toyota City, Aichi Pref.
Toyota City, Aichi Pref.
Toyota City, Aichi Pref.
Toyota City, Aichi Pref.
Hekinan City, Aichi Pref.
Susono City, Shizuoka Pref.

1,180
990
730
620
570
490
400
310

Nagoya Office
Daihatsu Motor Co., Ltd.
Toyota Auto Body Co., Ltd.
Hino Motors, Ltd.
Toyota Motor Kyushu, Inc.
Kanto Auto Works, Ltd.

Nagoya City, Aichi Pref.
Ikeda City, Osaka, etc.
Kariya City, Aichi Pref., etc.
Hino City, Tokyo, etc.
Miyawaka City, Fukuoka Pref., etc.
Susono City, Shizuoka Pref., etc.

50
1,030
1,000
960
670
380

Research andDevelopment
Automobiles
Automobiles
Automobiles
Automobiles
Automobile parts
Automobiles
Automobile parts
Research andDevelopment
OfficeAutomobiles
Automobiles
Automobiles
Automobiles
Automobiles

2,490
850
700
430
220

Automobiles
Sales facilities
Automobiles
Automobiles
Automobiles

Outside Japan
Toyota Motor Thailand Co., Ltd.
Samut Prakan, Thailand
Toyota Motor Sales, U.S.A., Inc.
California, U.S.A.
Toyota Motor Manufacturing, Kentucky, Inc. Kentucky, U.S.A.
Toyota Motor Manufacturing Canada Inc.
Ontario, Canada
Toyota Motor Manufacturing, Texas, Inc.
Texas, 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. Toyota has implemented measures to facilitate
flexible responses to fluctuations in demand in each of its production operations throughout the world, such asrevising takt time, operating production lines in unison and adjusting days of operation, but it has not closed any
plants. In particular, with respect to the truck market in North America, which has experienced severe
fluctuations in demand, Toyota temporarily suspended the operation of its truck vehicle and engine productionlines for three months, and implemented initiatives to improve future competitiveness, including improvement
initiatives and training. In addition, Toyota has introduced a work-sharing system in its plants in the United
Kingdom and the United States. As a result, Toyota believes it would require unreasonable effort to track theexact productive capacity and the extent of utilization of each of its manufacturing facilities with a reasonable
degree of accuracy.
As of March 31, 2009, property, plant and equipment having a net book value of approximately¥87,845 million 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.
46

Toyota considers all its principal manufacturing facilities and other significant properties to be in goodcondition and adequate to meet the needs of its operations.
See “— Business Overview — Capital Expenditures and Divestitures” for a description of Toyota’s materialplans to construct, expand or improve facilities.
ITEM 4A. UNRESOLVED STAFF COMMENTS
None.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
5.A OPERATING RESULTS
All financial information discussed in this section is derived from Toyota’s consolidated financial
statements that appear elsewhere in this annual report on Form 20-F. The financial statements have been
prepared in conformity with accounting principles generally accepted in the United States of America.
Overview
The business segments of Toyota include automotive operations, financial services operations and all otheroperations. Automotive operations is Toyota’s most significant business segment, accounting for 88% of
Toyota’s total revenues before the elimination of intersegment revenues for fiscal 2009. Toyota’s primarymarkets based on vehicle unit sales for fiscal 2009 were: Japan (26%), North America (29%), Europe (14%) andAsia (12%).
Automotive Market Environment
The worldwide automotive market is highly competitive and volatile. The demand for automobiles isaffected by a number of factors including social, political and general economic conditions; introduction of newvehicles and technologies; and costs incurred by customers to purchase and operate vehicles. These factors cancause consumer demand to vary substantially from year to year in different geographic markets and for different
types of automobiles.
The automotive industry experienced a rapid contraction of markets globally during fiscal 2009 due to asevere downturn in the economy stemming from a global financial crisis, and resulted in an extremely severe
condition. Particularly in Japan, the United States, and Europe, the markets declined severely in the second halfof fiscal 2009. The markets in resource-rich countries and emerging countries, which were growing continuously,
encountered a sudden slowdown in growth.
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.

2007(Thousands of Units)
Year Ended March 31,
2008

2009

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

2,273
2,942
1,224
789
1,296

2,188
2,958
1,284
956
1,527

1,945
2,212
1,062
905
1,443

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

6,251

6,725

5,622

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

8,524

8,913

7,567

47

* “Other” consists of Central and South America, Oceania, Africa and the Middle East, etc.
Toyota’s consolidated vehicle unit sales in Japan decreased during fiscal 2008 and 2009 as compared toeach of the respective prior years reflecting a decline in the overall domestic market. During fiscal 2009,
however, Toyota and Lexus brands’ market share excluding mini-vehicles, and Toyota’s market share (including
Daihatsu and Hino brands) including mini-vehicles represented a record high reflecting the sales efforts ofdomestic dealers. Overseas vehicle unit sales increased during fiscal 2008, but decreased during fiscal 2009.
During fiscal 2008, vehicle unit sales increased in North America, Europe, Asia and Other reflecting the
expansion of production sites, the introduction of vehicle models that effectively met customer needs and theimplementation of various sales measures. During fiscal 2009, vehicle unit sales decreased, particularly in North
America and Europe, where the contraction of automotive markets was especially pronounced.
Toyota’s share of total vehicle unit sales in each market is influenced by the quality, price, design,
performance, safety, reliability, 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, and•changes in the value of the Japanese yen and other currencies in which Toyota does 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 and vehicle safety, fuel economy and emissions that can add significantly to the cost ofvehicles. The European Union has enforced a directive that requires manufacturers to be financially responsible
for taking back end-of-life vehicles and to take measures to ensure that adequate used vehicle disposal facilities
are established and those hazardous materials and recyclable parts are removed from vehicles prior to scrapping.
Please see “— Legislation Regarding End-of-Life Vehicles,” “Information on the Company — Business
Overview — Governmental Regulation, Environmental and Safety Standards” and note 23 to the consolidated
financial statements for a more detailed discussion of these laws, regulations and policies.
Many governments also regulate local content, 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. Toyota iscurrently one of the defendants in purported national class actions alleging violations of the U.S. Sherman
Antitrust Act. Toyota believes that its actions have been lawful. In the interest of quickly resolving these legal
48

actions, however, Toyota entered into a settlement agreement with the plaintiffs at the end of February 2006. The
settlement agreement is pending the approval of the federal district court, and immediately upon approval theplaintiffs will, in accordance with the terms of the settlement agreement, withdraw all pending actions against
Toyota in the federal district court as well as all state courts and all related actions will be closed. For a moredetailed description of these proceedings, see note 23 to the consolidated financial statements.
The worldwide automotive industry is in a period of global competition which may continue for theforeseeable future, and in general the competitive environment in which Toyota operates is likely to intensify.
Toyota believes it has the resources, strategies and technologies in place to compete effectively in the industry as
an independent company for the foreseeable future.
Financial Services Operations
The worldwide automobile financial services industry has become highly competitive due to the contractionof automotive markets. 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
provide competition for Toyota’s wholesale financing activities.
Toyota’s financial assets decreased during fiscal 2009 primarily due to the impact of fluctuations in foreign
currency translation rates.
The following table provides information regarding Toyota’s finance receivables and operating leases as ofMarch 31, 2008 and 2009.
Yen in millions
March 31,
2008
2009

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

¥ 6,959,479
1,160,401
2,604,411¥ 6,655,404
1,108,408
2,322,721

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

10,724,291
106,678(437,365)(117,706)

10,086,533
104,521(405,171)(238,932)

Total finance receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less – Current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10,275,898(4,301,142)

9,546,951(3,891,406)

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

¥ 5,974,756¥ 5,655,545

Operating Leases
Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 2,814,706
107,619¥ 2,729,713
107,168

Less – Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,922,325(718,207)

2,836,881(795,767)

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

¥ 2,204,118¥ 2,041,114

49

Toyota’s finance receivables are subject to collectibility risks. These risks include consumer and dealer
insolvencies and insufficient collateral values (less costs to sell) to realize the full carrying values of thesereceivables. See discussion in the Critical Accounting Estimates section regarding “Allowance for Doubtful
Accounts and Credit Losses” and note 11 to the consolidated financial statements regarding the allowance for
credit losses.
Toyota continues to originate leases to finance new Toyota vehicles. These leasing activities are subject toresidual value risk. Residual value risk could arise when the lessee of a vehicle does not exercise the option topurchase the vehicle at the end of the lease term. See discussion in the Critical Accounting Estimates section
regarding “Investment in Operating Leases” and note 2 to the consolidated financial statements regarding theallowance for residual value losses.
Toyota primarily 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 areentered into to hedge interest rate risk from an economic perspective and are not designated to specific assets or
liabilities on Toyota’s consolidated balance sheet and accordingly, unrealized gains or losses related toderivatives that are not designated are recognized currently in operations. See discussion in the Critical
Accounting Estimates section regarding “Derivatives and Other Contracts at Fair Value”, further discussion in
the Market Risk Disclosures section and note 20 to the consolidated financial statements.
In addition, aggregated 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
increased during fiscal 2008 as a result of an increase in borrowings. Funding costs decreased during fiscal 2009
mainly as a result of lower interest rate.
Toyota launched its credit card business in Japan at the beginning of fiscal 2002. As of March 31, 2008,
Toyota had 6.6 million cardholders, an increase of 0.5 million cardholders compared with March 31, 2007, andas of March 31, 2009, Toyota had 7.1 million cardholders, an increase of 0.5 million cardholders compared with
March 31, 2008. The credit card receivables at March 31, 2008 increased by ¥24.5 billion from March 31, 2007
to ¥225.7 billion. The credit card receivables at March 31, 2009 decreased by ¥1.1 billion from March 31, 2008
to ¥224.6 billion.
Other Business Operations
Toyota’s other business operations consist of housing, including the manufacture and sale of prefabricatedhomes; information technology related businesses, including information technology and telecommunications,
intelligent transport systems, GAZOO; others.
Toyota does not expect its other business operations to materially contribute to Toyota’s consolidated resultsof operations.
Currency Fluctuations
Toyota is sensitive to fluctuations in foreign currency exchange rates. In addition to the Japanese yen,
Toyota is principally exposed to fluctuations in the value of the U.S. dollar and the euro and, to a lesser extent,
the Australian dollar, 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 bothtranslation risk and transaction risk.
Translation risk is the risk that Toyota’s consolidated financial statements for a particular period or for aparticular date will be affected by changes in the prevailing exchange rates of the currencies in those countries in50

which Toyota does business compared with the Japanese yen. Even though the fluctuations of currency exchange
rates to the Japanese yen can be substantial, and, therefore, significantly impact comparisons with prior periods
and among the various geographic markets, the translation risk is a reporting consideration and does not reflect
Toyota’s underlying results of operations. Toyota does not hedge against translation risk.
Transaction risk is the risk that the currency structure of Toyota’s costs and liabilities will deviate from thecurrency structure of sales proceeds and assets. Transaction risk relates primarily to sales proceeds from Toyota’s
non-domestic operations from vehicles produced in Japan.
Toyota believes that the location of its production facilities in different parts of the world has significantly
reduced the level of transaction risk. As part of its globalization strategy, Toyota has continued to localize
production by constructing production facilities in the major markets in which it sells its vehicles. In calendar
2007 and 2008, Toyota produced 61.4% and 64.1% of Toyota’s non-domestic sales outside Japan, respectively.
In North America, 57.2% and 57.4% of vehicles sold in calendar 2007 and 2008 were produced locally,
respectively. In Europe, 64.0% and 60.9% of vehicles sold in calendar 2007 and 2008 were produced locally,
respectively. Localizing production enables Toyota to locally purchase many of the supplies and resources usedin 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 regarding the extent of Toyota’s use of derivative financial instruments to hedge
foreign currency exchange rate risks.
Generally, a weakening of the Japanese yen against other currencies has a positive effect on Toyota’s
revenues, operating income and net income. A strengthening of the Japanese yen against other currencies has the
opposite effect. In fiscal 2008, the Japanese yen was on average and at the end of the fiscal year stronger against
the U.S. dollar in comparison to the prior fiscal year. In fiscal 2008, the Japanese yen was on average and at theend of the fiscal year weaker against the euro in comparison to the prior fiscal year. In fiscal 2009, the Japanese
yen was on average and at the end of the fiscal year stronger against the U.S. dollar and the euro in comparison to
the prior fiscal year. See further discussion in the Market Risk Disclosures section regarding “Foreign Currency
Exchange Rate Risk”.
During fiscal 2008 and 2009, the average value of the Japanese yen fluctuated against the major currencies
including the U.S. dollar and the euro compared with the average value of the previous fiscal year, respectively.
The operating results excluding the impact of currency fluctuations described in the “Results of Operations —Fiscal 2009 Compared with Fiscal 2008” and the “Results of Operations — Fiscal 2008 Compared with Fiscal
2007,” show results of net revenues obtained by applying the Japanese yen’s average exchange rate in theprevious fiscal year to the local currency-denominated net revenues for fiscal 2008 and 2009, respectively, as if
the value of the Japanese yen had remained constant for the comparable periods. Results excluding the impact of
currency fluctuations year-on-year are not on the same basis as Toyota’s consolidated financial statements and do
not conform with U.S. GAAP. Furthermore, Toyota does not believe that these measures are a substitute for U.S.
GAAP measures. However, Toyota believes that such results excluding the impact of currency fluctuations
year-on-year provide additional useful information to investors regarding the operating performance on a local
currency basis.
Segmentation
Toyota’s most significant business segment is its automotive operations. Toyota carries out its automotive
operations as a global competitor in the worldwide automotive market. Management allocates resources to, and51

assesses the performance of, its automotive operations as a single business segment on a worldwide basis. Toyota
does not manage any subset of its automotive operations, such as domestic or overseas operations or parts, as
separate management units.
The management of the automotive operations is aligned on a functional basis with managers having
oversight responsibility for the major operating functions within the segment. Management assesses financial andnon-financial data such as units of sale, units of production, market share information, vehicle model plans andplant location costs to allocate resources within the automotive operations.
Geographic Breakdown
The following table sets forth Toyota’s net revenues in each geographic market based on the country
location of the parent company or the subsidiary that transacted the sale with the external customer for the past
three fiscal years.
Yen in millions
For the years ended March 31,
2007
2008
2009

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

¥8,152,884
8,771,495
3,346,013
1,969,957
1,707,742¥8,418,620
9,248,950
3,802,814
2,790,987
2,027,869¥7,471,916
6,097,676
2,889,753
2,450,412
1,619,813* “Other” consists of Central and South America, Oceania and Africa.
Results of Operations — Fiscal 2009 Compared with Fiscal 2008
Net Revenues
Toyota had net revenues for fiscal 2009 of ¥20,529.5 billion, a decrease of ¥5,759.7 billion, or 21.9%,
compared with the prior year. This decrease principally reflects the impact of decreased vehicle unit sales andchanges in sales mix, the unfavorable impact of fluctuations in foreign currency translation rates, and decreased
parts sales during fiscal 2009. Eliminating the difference in the Japanese yen value used for translation purposes,
net revenues would have been approximately ¥22,560.7 billion during fiscal 2009, a 14.2% decrease comparedwith the prior year. Toyota’s net revenues include net revenues from sales of products that decreased by 22.8%
during fiscal 2009 compared with the prior year to ¥19,173.7 billion and net revenues from financial services
operations that decreased by 7.7% during fiscal 2009 compared with the prior year to ¥1,355.8 billion.
Eliminating the difference in the Japanese yen value used for translation purposes, net revenues from sales of
products would have been approximately ¥21,011.3 billion, a 15.3% decrease during fiscal 2009 compared withthe prior year, while net revenues from financial services operations would have been approximately¥1,549.4 billion, a 5.5% increase during fiscal 2009 compared with the prior year. Geographically, net revenues
for fiscal 2009 decreased by 11.2% in Japan, 34.1% in North America, 24.0% in Europe, 12.2% in Asia and20.1% in Other compared with the prior year. Eliminating the difference in the Japanese yen value used fortranslation purposes, net revenues in fiscal 2009 would have decreased by 11.2% in Japan, 24.9% in North
America, 13.1% in Europe, and 0.4% in Other and increased by 0.9% in Asia compared with the prior year.
The following is a discussion of net revenues for each of Toyota’s business segments. The net revenue
amounts discussed are amounts before the elimination of intersegment revenues.
Automotive Operations Segment
Net revenues for Toyota’s automotive operations segment, which constitute the largest percentage ofToyota’s net revenues, decreased during fiscal 2009 by ¥5,612.6 billion, or 23.2% compared with the prior year52

to ¥18,564.7 billion. The decrease resulted primarily from the approximate ¥3,400 billion impact attributed to thedecrease in vehicle unit sales and the changes in sales mix, the ¥1,833.8 billion impact of fluctuations in foreign
currency translation rates, and the decreased parts sales. Eliminating the difference in the Japanese yen value
used for translation purposes, net revenues for its automotive operations segment would have been approximately¥20,398.5 billion during fiscal 2009, a 15.6% decrease compared to the prior year. In fiscal 2009, net revenues inJapan were unfavorably impacted primarily by the decrease in vehicle unit sales in the export markets and thechanges in sales mix compared to fiscal 2008. Net revenues in North America, Europe, Asia and Other were
unfavorably impacted primarily by the decrease in vehicle unit sales and the impact of fluctuations in foreign
currency translation rates.
Financial Services Operations Segment
Net revenues in fiscal 2009 for Toyota’s financial services operations decreased by ¥120.8 billion, or 8.1%
compared to the prior year to ¥1,377.5 billion. This decrease resulted primarily from the impact of fluctuations inforeign currency translation rates, partially offset by the impact of a higher volume of financings. Eliminating thedifference in the Japanese yen value used for translation purposes, net revenues for its financial services
operations would have been approximately ¥1,572.5 billion during fiscal 2009, a 5.0% increase compared withthe prior year.
All Other Operations Segment
Net revenues for Toyota’s other operations segment decreased by ¥162.0 billion, or 12.0%, to¥1,184.9 billion during fiscal 2009 compared with the prior year.
Operating Costs and Expenses
Operating costs and expenses decreased by ¥3,028.4 billion, or 12.6%, to ¥20,990.5 billion during fiscal
2009 compared with the prior year. This decrease resulted primarily from the approximate ¥2,100 billion impact
on costs of products attributable to the decrease in vehicle unit sales and the changes in sales mix, the¥2,062.1 billion impact of fluctuations in foreign currency translation rates, decreased costs corresponding to thedecrease in parts sales, and the ¥54.8 billion decrease in research and development expenses, partially offset byincreases in expenses.
Cost reduction efforts were offset by increases in the prices of steel, precious metals, non-ferrous alloys
including aluminum, plastic parts and other production materials and parts. These cost reduction efforts related toongoing value engineering and value analysis activities, the use of common parts that result in a reduction of parttypes and other manufacturing initiatives designed to reduce the costs of vehicle production.
Cost of products sold decreased by ¥2,984.0 billion, or 14.6%, to ¥17,468.4 billion during fiscal 2009
compared with the prior year. This decrease (before the elimination of intersegment amounts) reflects a decreaseof ¥2,939.2 billion, or 14.9%, for the automotive operations segment and a decrease of ¥131.2 billion, or 11.2%,
for all other operations segment. The decrease in cost of products sold for automotive operations is primarily
attributed to the decrease in vehicle unit sales and the changes in sales mix, the impact of fluctuations in foreign
currency translation rates, the impact of the decrease in parts sales, and the decrease in research and development
expenses, partially offset by increases in expenses. Cost of financing operations decreased by ¥80.6 billion, or
7.5%, to ¥987.4 billion during fiscal 2009 compared with the prior year. The decrease resulted primarily from theimpact of fluctuations in foreign currency translation rates, partially offset by an increase in allowance forresidual value losses and an increase in valuation losses on interest rate swaps stated at fair value.
Selling, general and administrative expenses increased by ¥36.2 billion, or 1.5%, to ¥2,534.7 billion during
fiscal 2009 compared with the prior year. This increase mainly reflects an increase for the financial services
operations. The increase for the financial services operations is primarily due to an increase in provision for
credit losses, net charge-offs.
53

Research and development expenses (included in cost of products sold and selling, general andadministrative expenses) decreased by ¥54.8 billion, or 5.7%, to ¥904.0 billion during fiscal 2009 compared withthe prior year. This decrease primarily relates to an overall decrease in expenditures while maintaining a focus on
the development of environmentally conscious technologies including hybrid and fuel-cell technology, and thedevelopments in advanced technologies relating to collision safety and vehicle stability controls to further build
up competitive strength in the future.
Operating Income and Loss
Toyota’s operating income decreased by ¥2,731.3 billion to an operating loss of ¥461.0 billion during fiscal
2009 compared with the prior year. This operating loss was unfavorably affected by the decrease in vehicle unit
sales, the changes in sales mix, the increased expenses and the impact of the decrease in parts sales, partially
offset by the decrease in research and development expenses.
During fiscal 2009, operating income (before the elimination of intersegment profits) for significant
geographic regions decreased by ¥1,677.8 billion in Japan, decreased by ¥695.5 billion in North America,
decreased by ¥284.8 billion in Europe, decreased by ¥80.3 billion, or 31.3%, in Asia, and decreased by ¥56.3
billion, or 39.1% in Other compared with the prior year. The decrease in Japan was mainly due to decreases inboth production volume and vehicle unit sales in the export markets, partially offset by the decrease in researchand development expenses. The decrease in North America was mainly due to decreases in both production
volume and vehicle unit sales, the increases in the provision for credit losses, net charge-offs and allowance forresidual value losses in sales finance subsidiaries in the United States, partially offset by the impact of thefluctuations in foreign currency translation rates. The decrease in Europe was mainly due to decreases in bothproduction volume and vehicle unit sales, partially offset by the impact of fluctuations in foreign currencytranslation rates. The decrease in Asia was mainly due to decreases in both production volume and vehicle unit
sales, and the impact of the fluctuations in foreign currency translation rates. The decrease in Other was primarily
due to the decrease in vehicle unit sales.
The following is a discussion of operating income for each of Toyota’s business segments. The operating
income amounts discussed are before the elimination of intersegment profits.
Automotive Operations Segment
Operating income from Toyota’s automotive operations decreased by ¥2,566.7 billion to an operating lossof ¥394.8 billion during fiscal 2009 compared with the prior year. This decrease was primarily attributed to thedecrease in vehicle unit sales, the changes in sales mix, the increased expenses, and the impact of the decrease inparts sales, partially offset by the decrease in research and development expenses.
Financial Services Operations Segment
Operating income from Toyota’s financial services operations decreased by ¥158.5 billion to an operating
loss of ¥72.0 billion during fiscal 2009 compared with the prior year. This decrease was primarily due to theincreases in the provision for credit losses, net charge-offs and allowance for residual value losses, and theincrease in valuation losses on interest rate swaps stated at fair value in sales finance subsidiaries, partially offset
by the impact of a higher volume of financing activities.
All Other Operations Segment
Operating income from Toyota’s other operations segment decreased by ¥23.1 billion, or 70.0% to ¥9.9
billion during fiscal 2009 compared with the prior year.

54

Other Income and Expenses
Interest and dividend income decreased by ¥27.3 billion, or 16.4%, to ¥138.4 billion during fiscal 2009
compared with the prior year mainly due to a decrease in interest income from marketable securities.
Interest expense increased by ¥0.8 billion, or 1.7%, to ¥46.9 billion during fiscal 2009 compared with theprior year.
Foreign exchange gains, net decreased by ¥11.0 billion to a loss of ¥1.8 billion during fiscal 2009 comparedwith the prior year. Foreign exchange gains and losses include the differences between the value of foreign
currency denominated sales translated at prevailing exchange rates and the value of the sales amounts settled
during the year, including those settled using forward foreign currency exchange contracts.
Other income, net decreased by ¥227.2 billion to a loss of ¥189.1 billion during fiscal 2009 compared withthe prior year. This decrease was mainly due to the recognition of impairment losses on available-for salesecurities.
Income Taxes
The provision for income taxes decreased by ¥968.0 billion to a tax benefit of ¥56.5 billion during fiscal
2009 compared with the prior year primarily due to the decrease in income before income taxes. The effective
tax rate was 10.1%, which was lower than its statutory tax rate in Japan primarily due to a recognition ofvaluation allowance for deferred tax assets at domestic and overseas subsidiaries.
Minority Interest in Consolidated Subsidiaries and Equity in Earnings of Affiliated Companies
Minority interest in consolidated subsidiaries decreased by ¥102.2 billion to a loss of ¥24.2 billion during
fiscal 2009 compared with the prior year. This decrease was mainly due to a decrease in net income atconsolidated subsidiaries.
Equity in earnings of affiliated companies during fiscal 2009 decreased by ¥227.4 billion, or 84.2%, to¥42.7 billion compared with the prior year. This decrease was due to a decrease in net income at the affiliatedcompanies.
Net Income and Loss
Toyota’s net income decreased by ¥2,154.8 billion to a loss of ¥437.0 billion during fiscal 2009 comparedwith the prior year.
Other Comprehensive Income and Loss
Other comprehensive losses decreased by ¥76.0 billion to losses of ¥866.5 billion for fiscal 2009 comparedwith the prior year. This decrease in losses resulted primarily from favorable foreign currency translation
adjustments in fiscal 2009 to losses of ¥381.3 billion compared with losses of ¥461.1 billion in the prior year, anda decrease in unrealized holding losses on securities in fiscal 2009 to ¥293.1 billion compared with ¥347.8 billion
in the prior year. The decrease in unrealized holding losses on securities was mainly due to the recognition of
impairment losses on available-for sale securities.
Results of Operations — Fiscal 2008 Compared with Fiscal 2007
Net Revenues
Toyota had net revenues for fiscal 2008 of ¥26,289.2 billion, an increase of ¥2,341.2 billion, or 9.8%,
compared with the prior year. This increase principally reflects the impact of increased vehicle unit sales,55

increased financings operations, increased parts sales and the favorable impact of fluctuations in foreign currencytranslation rates during fiscal 2008. Eliminating the difference in the Japanese yen value used for translation
purposes, net revenues would have been approximately ¥26,011.5 billion during fiscal 2008, an 8.6% increase
compared with the prior year. Toyota’s net revenues include net revenues from sales of products that increased
by 9.5% during fiscal 2008 compared with the prior year to ¥24,820.5 billion and net revenues from financing
operations that increased by 14.9% during fiscal 2008 compared with the prior year to ¥1,468.7 billion.
Eliminating the difference in the Japanese yen value used for translation purposes, net revenues from sales of
products would have been approximately ¥24,540.1 billion, an 8.2% increase during fiscal 2008 compared withthe prior year, while net revenues from financing operations would have increased by approximately 15.1%
during fiscal 2008 compared to the prior year to ¥1,471.4 billion. Geographically, net revenues for fiscal 2008
increased by 3.3% in Japan, 5.4% in North America, 13.7% in Europe, 41.7% in Asia and 18.7% in Other
compared with the prior year. Eliminating the difference in the Japanese yen value used for translation purposes,
net revenues in fiscal 2008 would have increased by 3.3% in Japan, 7.6% in North America, 6.8% in Europe,
34.2% in Asia ,and 13.6 % in Other compared with the prior year.
The following is a discussion of net revenues for each of Toyota’s business segments. The net revenue
amounts discussed are amounts before the elimination of intersegment revenues.
Automotive Operations Segment
Net revenues from Toyota’s automotive operations segment, which constitute the largest percentage ofToyota’s net revenues, increased during fiscal 2008 by ¥2,249.3 billion, or 10.3% compared with the prior yearto ¥24,177.3 billion. The increase resulted primarily from the approximate ¥1,600 billion impact attributed to thevehicle unit sales growth and changes in sales mix, the ¥277.5 billion impact of fluctuations in foreign currencytranslation rates during fiscal 2008, and the impact of increased parts sales. Eliminating the difference in theJapanese yen value used for translation purposes, automotive operations segment net revenues would have been
approximately ¥23,899.8 billion during fiscal 2008, a 9.0% increase compared to the prior year. In fiscal 2008,
net revenues in Japan were favorably impacted primarily by vehicle unit sales growth in the export markets,
which was partially offset by changes in sales mix compared to fiscal 2007. Net revenues in North America werefavorably impacted primarily by vehicle unit sales growth partially offset by fluctuations in foreign currencytranslation rates during fiscal 2008. Net revenues in Europe and Asia were favorably impacted primarily byvehicle unit sales growth and fluctuations in foreign currency translation rates during fiscal 2008. Net revenues in
Other were favorably impacted primarily by vehicle unit sales growth.
Financial Services Operations Segment
Net revenues in fiscal 2008 for Toyota’s financial services operations increased by ¥197.8 billion or 15.2%
compared to the prior year to ¥1,498.3 billion. This increase resulted primarily from the impact of a higher
volume of financings mainly in North America, partially offset by the impact of fluctuations in foreign currencytranslation rates during fiscal 2008. Eliminating the difference in the Japanese yen value used for translation
purposes, financial services operations net revenues would have been approximately ¥1,500.5 billion during
fiscal 2008, a 15.4% increase compared with the prior year.
All Other Operations Segment
Net revenues for Toyota’s other businesses increased by ¥23.2 billion, or 1.8%, to ¥1,346.9 billion during
fiscal 2008 compared with the prior year.
Operating Costs and Expenses
Operating costs and expenses increased by ¥2,309.5 billion, or 10.6%, to ¥24,018.9 billion during fiscal
2008 compared with the prior year. The increase resulted primarily from the approximate ¥1,300 billion impact56

on costs of products attributed to vehicle unit sales growth and changes in sales mix, the ¥252.1 billion impact offluctuations in foreign currency translation rates, the ¥68.1 billion increase in research and development
expenses, increased expenses in expanding business operations and increased costs corresponding to the increasein parts sales. These increases were partially offset by the approximate ¥120 billion impact attributed to the net
impact of cost reduction efforts, responding to the rise in prices of production materials and parts in fiscal 2008.
Continued cost reduction efforts reduced operating costs and expenses in fiscal 2008 by approximately ¥120
billion, partially offset by increases in the prices of steel, precious metals, non-ferrous alloys includingaluminum, plastic parts and other production materials and parts, over what would have otherwise been incurred.
These cost reduction efforts relate to ongoing value engineering and value analysis activities, the use of common
parts that result in a reduction of part types and other manufacturing initiatives designed to reduce the costs ofvehicle production.
Cost of products sold increased by ¥2,096.1 billion, or 11.4%, to ¥20,452.4 billion during fiscal 2008
compared with the prior year. This increase (before the elimination of intersegment amounts) reflects an increaseof ¥2,107.7 billion, or 11.9%, for the automotive operations and an increase of ¥33.4 billion, or 2.9%, for allother operations segment. The increase in cost of products sold for automotive operations is primarily attributed
to the increased vehicle unit sales and changes in sales mix, the impact of the increase in parts sales, the impactof the increase in research and development expenses and the impact of fluctuations in foreign currencytranslation rates during fiscal 2008, which were partially offset by the impact of continued cost reduction efforts.
The increase in cost of products sold for all other operations primarily related to the increase in net revenues.
Cost of financing operations increased by ¥195.9 billion, or 22.5%, to ¥1,068.0 billion during fiscal 2008
compared with the prior year. The increase resulted primarily from the impact of increased interest expenses
caused primarily by an increase in borrowings attributed to business expansion. The increase is also attributed tothe impact of losses due to changes in the fair value of derivative financial instruments that are not designated ashedges and are marked-to-market at the end of each period.
Selling, general and administrative expenses increased by ¥17.5 billion, or 0.7%, to ¥2,498.5 billion during
fiscal 2008 compared with the prior year. This increase mainly reflects an increase for the financial services
operations. The increase for the financial services operations is primarily attributed to the impact of increased
expenses.
Research and development expenses (included in cost of products sold and selling, general andadministrative expenses) increased by ¥68.1 billion, or 7.6%, to ¥958.8 billion during fiscal 2008 compared withthe prior year. This increase primarily relates to expenditures attributed to the development of environmentallyconscious technologies including hybrid and fuel-cell technology, aggressive developments in advanced
technologies relating to collision safety and vehicle stability controls and the impact of expanding new models to
promote Toyota’s strength in a global market to further build up competitive strength in the future.
Operating Income
Toyota’s operating income increased by ¥31.7 billion, or 1.4%, to ¥2,270.3 billion during fiscal 2008
compared with the prior year. Operating income was favorably affected by the vehicle unit sales growth, thechanges in sales mix, the impact of increased parts sales, continued cost reduction efforts and the favorable
impact of fluctuations in foreign currency translation rates. These increases were partially offset by increases in
research and development expenses and the increases in expenses due to business expansion. As a result,operating income decreased to 8.6% as a percentage of net revenues for fiscal 2008 compared to 9.3% in theprior year.
During fiscal 2008, operating income (before the elimination of intersegment profits) for significant
geographic regions decreased by ¥16.9 billion, or 1.2%, in Japan, decreased by ¥144.3 billion, or 32.1%, in North57

America, increased by ¥4.2 billion, or 3.0% in Europe, increased by ¥138.8 billion, or 118.0%, in Asia, andincreased by ¥60.4 billion, or 72.4% in Other compared with the prior year. The decrease in Japan was mainly
due to an increase in expenses including research and development expenses, partially offset by the vehicle unit
sales growth in the export markets and continued cost reduction efforts. The decrease in North America wasmainly due to an increase in valuation losses on interest rate swaps stated at fair value and the impact offluctuations in foreign currency translation rates partially offset by the increase in production volume and vehicle
unit sales and continued cost reduction efforts in the manufacturing operations. The increases in Europe weremainly due to the impact of an increase in production volume and vehicle unit sales, continued cost reduction
efforts in the manufacturing operations and the favorable impact of fluctuations in foreign currency translation
rates. The increases in Asia were mainly due to the impact of an increase in production volume and vehicle unit
sales. The increase in Other was primarily due to the impact of the increase in production volume and vehicle
unit sales.
The following is a discussion of operating income for each of Toyota’s business segments. The operating
income amounts discussed are before the elimination of intersegment profits.
Automotive Operations Segment
Operating income from Toyota’s automotive operations increased by ¥133.1 billion, or 6.5%, to ¥2,171.9
billion during fiscal 2008 compared with the prior year. This increase is primarily attributed to the increase in
vehicle unit sales, the increase in parts sales, the impact of continued cost reduction efforts and the favorable
impact of fluctuations in foreign currency translation rates. This increase was partially offset by the increase inresearch and development expenses and the increase in expenses due to business expansion.
Financial Services Operations Segment
Operating income from Toyota’s financial services operations decreased by ¥72.0 billion, or 45.4%, to¥86.5 billion during fiscal 2008 compared with the prior year. This decrease is primarily due to an increase invaluation losses on interest rate swaps stated at fair value, partially offset by the impact of a higher volume offinancing activities.
All Other Operations Segment
Operating income from Toyota’s other businesses decreased by ¥6.6 billion, or 16.6% to ¥33.0 billion
during fiscal 2008 compared with the prior year.
Other Income and Expenses
Interest and dividend income increased by ¥33.7 billion, or 25.6%, to ¥165.7 billion during fiscal 2008
compared with the prior year mainly due to an increase in interest income reflecting an increase in marketablesecurities.
Interest expense decreased by ¥ 3.2 billion, or 6.5%, to ¥46.1 billion during fiscal 2008 compared with theprior year due to a decrease in borrowings in the automotive operations segment.
Foreign exchange gains, net decreased by ¥23.8 billion, or 72.2%, to ¥9.2 billion during fiscal 2008
compared with the prior year. Foreign exchange gains and losses include the differences between the value of
foreign currency denominated sales translated at prevailing exchange rates and the value of the sales amounts
settled during the year, including those settled using forward foreign currency exchange contracts.
Other income, net increased by ¥9.9 billion, or 35.1%, to ¥38.1 billion during fiscal 2008 compared with theprior year.
58Income Taxes
The provision for income taxes increased by ¥13.2 billion, or 1.5%, to ¥911.5 billion during fiscal 2008
compared with the prior year primarily due to the increase in income before income taxes. The effective tax rate
for fiscal 2008 remained relatively unchanged compared to the rate for fiscal 2007.
Minority Interest in Consolidated Subsidiaries and Equity in Earnings of Affiliated Companies
Minority interest in consolidated subsidiaries increased by ¥28.3 billion, or 56.9%, to ¥78.0 billion during
fiscal 2008 compared with the prior year. This increase was mainly due to an increase in net income attributableto favorable results of operations at consolidated subsidiaries.
Equity in earnings of affiliated companies during fiscal 2008 increased by ¥60.6 billion, or 28.9%, to ¥270.1
billion compared with the prior year. This increase was mainly due to an increase in net income attributable tofavorable results of operations at the affiliated companies.
Net Income
Toyota’s net income increased by ¥73.8 billion, or 4.5%, to ¥1,717.8 billion during fiscal 2008 comparedwith the prior year.
Other Comprehensive Income and Loss
Other comprehensive income decreased by ¥1,115.5 billion, to losses of ¥942.5 billion for fiscal 2008
compared with the prior year. This decrease resulted primarily from a decrease in foreign currency translation
adjustments in fiscal 2008 to losses of ¥461.1 billion compared with gains of ¥130.7 billion in the prior year anda decrease in unrealized holding gains on securities in fiscal 2008 to losses of ¥347.8 billion reflecting thedecline in the Japanese stock market compared with unrealized holding gains of ¥38.8 billion in the prior year.
Related Party Transactions
Toyota does not have any significant related party transactions other than transactions with affiliatedcompanies in the ordinary course of business. See note 12 to the consolidated financial statements for further
discussion.
Legislation Regarding End-of-Life Vehicles
In October 2000, the European Union enforced a directive that requires member states to promulgate
regulations implementing the following:•

manufacturers shall bear all or a significant part of the costs for taking back end-of-life vehicles put on
the market after July 1, 2002 and dismantling and recycling those vehicles. Beginning January 1, 2007,
this requirement will also be applicable to vehicles put on the market before July 1, 2002;•

manufacturers may not use certain hazardous materials in vehicles sold after July 2003;•

vehicles type-approved and put on the market after December 15, 2008 shall be re-usable and/or
recyclable to a minimum of 85% by weight per vehicle and shall be re-usable and/or recoverable to aminimum of 95% by weight per vehicle; and•end-of-life vehicles must meet actual re-use of 80% and re-use as material or energy of 85%,
respectively, of vehicle weight by 2006, rising to 85% and 95%, respectively, by 2015.

See note 23 to the consolidated financial statements for further discussion.
59

Recent Accounting Pronouncements in the United States
In December 2007, FASB issued FAS No. 141(R), Business Combinations (“FAS 141(R)”). FAS 141(R)establishes principles and requirements for how the acquirer recognizes and measures the identifiable assets
acquired, the liabilities assumed, any noncontrolling interest, and the goodwill acquired in a businesscombination or a gain from a bargain purchase. Also, FAS 141(R) provides several new disclosure requirementsthat enable users of the financial statements to evaluate the nature and financial effects of the businesscombination. FAS 141(R) is effective to business combinations on and after the beginning of fiscal year
beginning on or after December 15, 2008. The impact of adopting FAS 141(R) on Toyota’s consolidated
financial statements will depend on the nature and significance of any acquisitions in the future period.
In December 2007, FASB issued FAS No. 160, Noncontrolling Interests in Consolidated Financial
Statements — an amendment of ARB No. 51 (“FAS 160”). FAS 160 amends the guidance in Accounting
Research Bulletins No. 51, Consolidated Financial Statements, to establish accounting and reporting standards
for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. FAS 160 is effective
for fiscal year, and interim period within the fiscal year, beginning on or after December 15, 2008. The
presentation and disclosure requirements shall be applied retrospectively for all periods presented in the
consolidated financial statements in which FAS 160 is initially applied. Management is evaluating the impact of
adopting FAS 160 on Toyota’s consolidated financial statements.
In December 2008, FASB issued FASB Staff Position No. FAS 132(R)-1, Employers’ Disclosures about
Postretirement Benefit Plan Assets (“FSP FAS 132(R)-1”). FSP FAS 132(R)-1 requires additional disclosuresabout postretirement benefit plan assets including investment policies and strategies, categories of plan assets,fair value measurements of plan assets, and significant concentrations of risk. FSP FAS 132 (R)-1 is effective forfiscal year ending after December 15, 2009. Management does not expect this Statement to have a material
impact on Toyota’s consolidated financial statements.
In April 2009, FASB issued FASB Staff Position No. FAS 115-2 and FAS 124-2, Recognition and
Presentation of Other-Than-Temporary Impairments (“FSP FAS 115-2 and FAS 124-2”). FSP FAS 115-2 andFAS 124-2 revises the recognition and presentation requirements for other-than-temporary impairments of debt
securities, and contains additional disclosure requirements related to debt and equity securities. FSP FAS 115-2
and FAS 124-2 is effective for interim period and fiscal year ending after June 15, 2009. Management does notexpect this Statement to have a material impact on Toyota’s consolidated financial statements.
In May 2009, FASB issued FAS No. 165, Subsequent Events (“FAS 165”). FAS 165 is intended to establish
general standards of accounting for and disclosure of events that occur after the balance sheet date but before
financial statements are issued. FAS 165 is effective for interim period or fiscal year ending after June 15, 2009.
Management does not expect this Statement to have a material impact on Toyota’s consolidated financial
statements.
Critical Accounting Estimates
The consolidated financial statements of Toyota are prepared in conformity with accounting principles
generally accepted in the United States of America. The preparation of these financial statements requires the useof estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses during the periods presented. Toyota
believes that of its significant accounting policies, the following may involve a higher degree of judgments,
estimates and assumptions:
Product Warranty
Toyota generally warrants its products against certain manufacturing and other defects. Product warranties
are provided for specific periods of time and/or usage of the product and vary depending upon the nature of the60

product, the geographic location of the sale and other factors. All product warranties are consistent withcommercial practices. Toyota includes a provision for estimated product warranty costs as a component of costof sales at the time the related sale is recognized. The accrued warranty costs represent management’s best
estimate at the time of sale of the total costs that Toyota will incur to repair or replace product parts that failwhile still under warranty. The amount of accrued estimated warranty costs is primarily based on historicalexperience of product failures as well as current information on repair costs. The amount of warranty costs
accrued also contains an estimate of warranty claim recoveries to be received from suppliers. The foregoingevaluations are inherently uncertain, as they require material estimates and some products’ warranties extend forseveral years. Consequently, actual warranty costs will differ from the estimated amounts and could require
additional warranty provisions. If these factors require a significant increase in Toyota’s accrued estimatedwarranty costs, it would negatively affect future operating results of the automotive operations.
Allowance for Doubtful Accounts and Credit Losses
Natures of estimates and assumptions
Sales financing and finance lease receivables consist of retail installment sales contracts secured bypassenger cars and commercial vehicles. Collectibility risks include consumer and dealer insolvencies andinsufficient collateral values (less costs to sell) to realize the full carrying values of these receivables. As a matterof policy, Toyota maintains an allowance for doubtful accounts and credit losses representing management’s
estimate of the amount of asset impairment in the portfolios of finance, trade and other receivables. Toyota
determines the allowance for doubtful accounts and credit losses based on a systematic, ongoing review andevaluation performed as part of the credit-risk evaluation process, historical loss experience, the size andcomposition of the portfolios, current economic events and conditions, the estimated fair value, adequacy ofcollateral and other pertinent factors. This evaluation is inherently judgmental and requires material estimates,
including the amounts and timing of future cash flows expected to be received, which may be susceptible tosignificant change. Although management considers the allowance for doubtful accounts and credit losses to beadequate based on information currently available, additional provisions may be necessary due to (i) changes inmanagement estimates and assumptions about asset impairments, (ii) information that indicates changes in
expected future cash flows, or (iii) changes in economic and other events and conditions. To the extent that sales
incentives remain an integral part of sales promotion with the effect of reducing new vehicle prices, resale prices
of used vehicles and, correspondingly, the collateral value of Toyota’s sales financing and finance leasereceivables could experience further downward pressure. If these factors require a significant increase in
Toyota’s allowance for doubtful accounts and credit losses, it could negatively affect future operating results ofthe financial services operations. The level of credit losses, which has a greater impact on Toyota’s results ofoperations, is influenced primarily by two factors: frequency of occurrence and severity of loss. For evaluation
purposes, exposures to credit loss are segmented into the two primary categories of “consumer” and “dealer”.
Toyota’s consumer portfolio consists of smaller balances that are homogenous retail finance receivables andlease earning assets. The dealer portfolio consists of wholesale and other dealer financing receivables. The
overall allowance for credit losses is evaluated at least quarterly, considering a variety of assumptions and factors
to determine whether reserves are considered adequate to cover probable losses.
Sensitivity analysis
The level of credit losses, which could significantly impact Toyota’s results of operations, is influenced
primarily by two factors: frequency of occurrence and severity of loss. The overall allowance for credit losses isevaluated at least quarterly, considering a variety of assumptions and factors to determine whether reserves are
considered adequate to cover probable losses. The following table illustrates the effect of an assumed change in
expected severity of loss, which we believe is one of the key critical estimates for determining the allowance for
credit losses, assuming all other assumptions are held consistent. The table below represents the impact on theallowance for credit losses in Toyota’s financial services operations as any change impacts most significantly on
the financial services operations.
61

Yen in millions
Effect on the allowancefor credit losses
as of March 31, 200910 percent increase in expected severity of loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥16,404

Investment in Operating Leases
Natures of estimates and assumptions
Vehicles on operating leases, where Toyota is the lessor, are valued at cost and depreciated over theirestimated useful lives using the straight-line method to their estimated residual values. Toyota utilizes industry
published information and its own historical experience to determine estimated residual values for these vehicles.
Toyota evaluates the recoverability of the carrying values of its leased vehicles for impairment when there areindications of declines in residual values, and if impaired, Toyota recognizes an allowance for its residual values.
In addition, to the extent that sales incentives remain an integral part of sales promotion with the effect of
reducing new vehicle prices, resale prices of used vehicles and, correspondingly, the fair value of Toyota’s leased
vehicles could be subject to downward pressure. If resale prices of used vehicles decline, future operating resultsof the financial services operations are likely to be adversely affected by incremental charges to reduce estimatedresidual values. Throughout the life of the lease, management performs periodic evaluations of estimatedend-of-term market values to determine whether estimates used in the determination of the contractual residual
value are still considered reasonable. Factors affecting the estimated residual value at lease maturity include, but
are not limited to, new vehicle incentive programs, new vehicle pricing, used vehicle supply, projected vehicle
return rates, and projected loss severity. The vehicle return rate represents the number of leased vehicles returned
at contract maturity and sold by Toyota during the period as a percentage of the number of lease contracts that, asof their origination dates, were scheduled to mature in the same period. A higher rate of vehicle returns exposes
Toyota to higher potential losses incurred at lease termination. Severity of loss is the extent to which theend-of-term market value of a lease is less than its carrying value at lease end.
Sensitivity analysis
The following table illustrates the effect of an assumed change in the vehicle return rate, which we believe
is one of the critical estimates, in determining the residual value losses, holding all other assumptions constant.
The following table represents the impact on the residual value losses in Toyota’s financial services operations as
those changes have a significant impact on financing operations.
Yen in millions
Effect on the residual
value losses over theremaining terms of theoperating leases on andafter April 1, 2009

1 percent increase in vehicle return rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,965

Impairment of Long-Lived Assets
Toyota periodically reviews the carrying value of its long-lived assets held and used and assets to bedisposed of, including goodwill and other intangible assets, when events and circumstances warrant such a
review. This review is performed using estimates of future cash flows. If the carrying value of a long-lived asset
is considered impaired, an impairment charge is recorded for the amount by which the carrying value of the longlived asset exceeds its fair value. Management believes that the estimates of future cash flows and fair values arereasonable. However, changes in estimates of such cash flows and fair values would affect the evaluations andnegatively affect future operating results of the automotive operations.

62

Pension Costs and Obligations
Natures of estimates and assumptions
Pension costs and obligations are dependent on assumptions used in calculating such amounts. Theseassumptions include discount rates, benefits earned, interest costs, expected rate of return on plan assets,mortality rates and other factors. Actual results that differ from the assumptions are accumulated and amortizedover future periods and, therefore, generally affect recognized expense in future periods. While management
believes that the assumptions used are appropriate, differences in actual experience or changes in assumptions
may affect Toyota’s pension costs and obligations.
The two most critical assumptions impacting the calculation of pension costs and obligations are thediscount rates and the expected rates of returns on plan assets. Toyota determines the discount rates mainly basedon the rates of high quality fixed income bonds or fixed income governmental bonds currently available andexpected to be available during the period to maturity of the defined benefit pension plans. Toyota determines the
expected rates of return for pension assets after considering several applicable factors including, the compositionof plan assets held, assumed risks of asset management, historical results of the returns on plan assets, Toyota’s
principal policy for plan asset management, and forecasted market conditions. A weighted-average discount rateof 2.8% and a weighted-average expected rate of return on plan assets of 3.6% are the results of assumptions
used for the various pension plans in calculating Toyota’s consolidated pension costs for fiscal 2009. Also, aweighted-average discount rate of 2.8% is the result of assumption used for the various pension plans in
calculating Toyota’s consolidated pension obligations for fiscal 2009.
Sensitivity analysis
The following table illustrates the effects of assumed changes in weighted -average discount rate and theweighted-average expected rate of return on plan assets, which we believe are critical estimates in determining
pension costs and obligations, assuming all other assumptions are consistent.
Yen in millions
Effect on pre-tax income
for the year ended
Effect on PBO
March 31, 2010
as of March 31, 2009

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

¥(10,749)
10,197¥ 120,771(111,712)¥ (4,895)
4,895

Derivatives and Other Contracts at Fair Value
Toyota uses derivatives in the normal course of business to manage its exposure to foreign currency
exchange rates and interest rates. The accounting is complex and continues to evolve. In addition, there are
significant judgments and estimates involved in the estimating of fair value in the absence of quoted market
values. These estimates are based upon valuation methodologies deemed appropriate under the circumstances.
However, the use of different assumptions may have a material effect on the estimated fair value amounts.
Marketable securities and Investments in Affiliated Companies
Toyota’s accounting policy is to record a write-down of such investments to net realizable value when adecline in fair value below the carrying value is other-than-temporary. In determining if a decline in value isother-than-temporary, Toyota considers the length of time and the extent to which the fair value has been less63

than the carrying value, the financial condition and prospects of the company and Toyota’s ability and intent toretain its investment in the company for a period of time sufficient to allow for any anticipated recovery in fairvalue.
OutlookToyota perceives a risk of a further downturn in the world economy during fiscal 2010 resulting from aweakened economy coupled with the financial crisis.
Although Toyota expects that the automotive market is expected to expand over the medium- to long-term
particularly in resource-rich countries and emerging countries, the automotive market is currently undergoing a
rapid contraction because of the worldwide economic deceleration. In addition, the competition in the automotive
market is more intense globally, as shown in the fierce competition with respect to compact cars and low-pricecars, and the acceleration in the development of technologies and introduction of new products whileenvironmental awareness is growing throughout the world. For purposes of this discussion, Toyota is assuming
an average exchange rate of ¥95 to the U.S. dollar and ¥125 to the euro. With the foregoing external factors in
mind, Toyota expects that net revenues for fiscal 2010 will decrease compared with fiscal 2009 as a result of adecrease in vehicle unit sales and the assumed exchange rate of a stronger Japanese yen against the U.S. dollar
and the euro. Factors decreasing operating income include a decrease in vehicle unit sales and the assumed
exchange rate of a stronger Japanese yen against the U.S. dollar and the euro. The foregoing factors are partially
offset by factors increasing operating income including cost reduction efforts and decreases in fixed costs andexpenses. As a result, Toyota expects that operating loss will increase in fiscal 2010 compared with fiscal 2009.
Also, Toyota expects loss before income taxes and net loss will increase in fiscal 2010. 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. Please 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.
Please see “Cautionary Statement Concerning Forward-Looking Statements”. Toyota’s actual results ofoperations could vary significantly from those described above as a result of unanticipated changes in the factors
described above or other factors, including those described in “Risk Factors”.
5.B LIQUIDITY AND CAPITAL RESOURCES
Historically, Toyota has funded its capital expenditures and research and development activities primarily
through cash generated by operations. In fiscal 2009, cash generated by operations decreased due to a decrease in
vehicle unit sales that was attributed to the rapid contraction of the automotive market. Therefore, Toyota fundedcash partially through additional loans and issuance of notes.
In fiscal 2010, Toyota expects to sufficiently fund its capital expenditures and research and development
activities primarily through cash and cash equivalents on hand, cash generated by operations, loans and issuanceof notes. Toyota will use its funds for the development of environment technologies, maintenance andreplacement of manufacturing facilities, and the introduction of new products. See “Information on the
Company — Business Overview — Capital Expenditures and Divestitures” for information regarding Toyota’smaterial capital expenditures and divestitures for fiscal 2007, 2008 and 2009, and information concerning
Toyota’s principal capital expenditures and divestitures 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 finance subsidiaries. Toyota seeks to expand its ability
to raise funds locally in markets throughout the world by expanding its network of finance subsidiaries.
64

Net cash provided by operating activities was ¥1,476.9 billion for fiscal 2009, compared with ¥2,981.6
billion for the prior year. The decrease in net cash provided by operating activities resulted primarily from adecrease in cash collection received from sale of products due to a decrease in net revenue for the automotive
operations, partially offset by a decrease in cash payments for cost of products sold within the automotive
operations and a decrease in cash payments for income taxes.
Net cash used in investing activities was ¥1,230.2 billion for fiscal 2009, compared with ¥3,874.8 billion forthe prior year. The decrease in net cash used in investing activities resulted primarily from a decrease in additions
to finance receivables, a decrease in purchases of marketable securities and security investments, and an increasein proceeds from sales of marketable securities and security investments.
Net cash provided by financing activities was ¥698.8 billion for fiscal 2009, compared with ¥706.1 billion
for the prior year. The decrease in net cash provided by financing activities resulted primarily from an increase inpayments of long-term debt, partially offset by a decrease in repurchase of common stock.
Total capital expenditures for property, plant and equipment, excluding vehicles and equipment on operatingleases, were ¥1,364.5 billion during fiscal 2009, a decrease of 7.8% over the ¥1,480.5 billion in total capital
expenditures from the prior year. The decrease in capital expenditures resulted primarily from a decrease ininvestments by subsidiaries especially located in Asia and North America.
Total expenditures for vehicles and equipment on operating leases were ¥960.3 billion during fiscal 2009, a
decrease of 24.9% over the ¥1,279.4 billion in expenditures from the prior year. The decrease in expenditures forvehicles and equipment on operating leases resulted primarily from a decrease in investments in the financial
services operations.
Toyota expects investments in property, plant and equipment, excluding vehicles and equipment on
operating leases, to be approximately ¥830.0 billion during fiscal 2010. Toyota’s expected investments include
approximately ¥530.0 billion in Japan, ¥140.0 billion in North America, ¥50.0 billion in Europe, ¥70.0 billion in
Asia and ¥40.0 billion in Other.
Based on current available information, Toyota does not expect environmental matters to have a material
impact on its financial position, results of operations, liquidity or cash flows during fiscal 2010. However, there
exists a substantial amount of uncertainty with respect to Toyota’s obligations under current and futureenvironment regulations as described in “Information on the Company — Business Overview — Governmental
Regulations, Environmental and Safety Standards”.
Cash and cash equivalents were ¥2,444.2 billion as of March 31, 2009. Most of Toyota’s cash and cash
equivalents are held in Japanese yen and in U.S. dollars. In addition, time deposits were ¥45.1 billion andmarketable securities were ¥495.3 billion as of March 31, 2009.
Liquid assets, which Toyota defines as cash and cash equivalents, time deposits, marketable debt securities
and its investment in monetary trust funds, decreased during fiscal 2009 by ¥251.8 billion, or 5.6%, to ¥4,229.1
billion.
Trade accounts and notes receivable, net decreased during fiscal 2009 by ¥647.5 billion, or 31.7%, to¥1,392.7 billion, reflecting the impacts of decreased revenues and fluctuations in foreign currency translation
rates.
Inventories decreased during fiscal 2009 by ¥366.4 billion, or 20.1%, to ¥1,459.3 billion, reflecting theimpacts of decreased volumes and fluctuations in foreign currency translation rates.
Total finance receivables, net decreased during fiscal 2009 by ¥728.9 billion, or 7.1%, to ¥9,546.9 billion.
The decrease in finance receivables, net resulted from a decrease in wholesale and other dealer loans and the65impact of fluctuations in foreign currency translation rates. As of March 31, 2009, finance receivables were
geographically distributed as follows: in North America 63.6%, in Japan 14.1%, in Europe 11.0%, in Asia 3.8%
and in Other 7.5%. Although Toyota maintains programs to sell finance receivables through special purpose
entities, no sales of finance receivables were made during fiscal 2009.
Marketable securities and other securities investments, including those included in current assets, decreased
during fiscal 2009 by ¥1,373.2 billion, or 34.6%, primarily reflecting sales of marketable securities and security
investments, and a decrease in the fair values of these securities and investments.
Property, plant and equipment decreased during fiscal 2009 by ¥410.3 billion, or 5.3%, primarily reflecting
the impacts of depreciation charges during the year and fluctuations in foreign currency translation rates, partially
offset by the capital expenditures.
Accounts payable decreased during fiscal 2009 by ¥913.3 billion, or 41.3%, reflecting the impacts of adecrease in trading volumes and fluctuations in foreign currency translation rates.
Accrued expenses decreased during fiscal 2009 by ¥66.2 billion, or 4.1%, reflecting the impact offluctuations in foreign currency translation rates.
Income taxes payable decreased during fiscal 2009 by ¥254.2 billion, or 83.2%, primarily as a result of adecrease in income before income taxes.
Toyota’s total borrowings increased during fiscal 2009 by ¥408.5 billion, or 3.3%. Toyota’s short-termborrowings consist of loans with a weighted-average interest rate of 2.44% and commercial paper with aweighted-average interest rate of 1.52%. Short-term borrowings increased during fiscal 2009 by ¥64.9 billion, or
1.8%, to ¥3,617.6 billion. Toyota’s long-term debt consists of unsecured and secured loans, medium-term notes,
unsecured notes and long-term capital lease obligations with interest rates ranging from 0.17% to 31.50%, andmaturity dates ranging from 2009 to 2047. The current portion of long-term debt increased during fiscal 2009 by¥24.1 billion, or 0.9%, to ¥2,699.5 billion and the non-current portion increased by ¥319.5 billion, or 5.3%, to¥6,301.4 billion. The increase in total borrowings primarily resulted from funding obtained to maintain sufficientliquidity. As of March 31, 2009, approximately 28% of long-term debt was denominated in U.S. dollars, 21% inJapanese yen, 15% in euros and 36% in other currencies. Toyota hedges fixed rate exposure by entering into
interest rate swaps. There are no material seasonal variations in Toyota’s borrowings requirements.
As of March 31, 2009, Toyota’s total interest bearing debt was 125.4% of total shareholders’ equity,
compared to 102.9% as of March 31, 2008.
Toyota’s long-term debt was rated “AA” by Standard & Poor’s Ratings Group, “Aa1” by Moody’s InvestorsServices and “AAA” by Rating and Investment Information, Inc. as of May 31, 2009. A credit rating is not arecommendation 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.
Toyota’s unfunded pension liabilities increased during fiscal 2009 by ¥242.6 billion, or 59.0%, to ¥653.7
billion. The unfunded pension liabilities relate primarily to the parent company and its Japanese subsidiaries. The
unfunded amounts will be funded through future cash contributions by Toyota or in some cases will be funded on
the retirement date of each covered employee. The unfunded pension liabilities increased in fiscal 2009
compared to the prior year primarily due to a decrease in the market value of plan assets. See note 19 to theconsolidated 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.
66

The key element of Toyota’s financial policy is maintaining a strong financial position that will allow
Toyota to fund its research and development initiatives, capital expenditures and financing operations on a costeffective basis even if earnings experience short-term fluctuations. Toyota believes that it maintains sufficientliquidity for its present requirements and that by maintaining its high credit ratings, it will continue to be able toaccess funds from external sources in large amounts and at relatively low costs. Toyota’s ability to maintain its
high credit ratings is subject to a number of factors, some of which are not within Toyota’s control. These factors
include general economic conditions in Japan and the other major markets in which Toyota does business, aswell as Toyota’s successful implementation of its business strategy.
5.C RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES
Toyota’s research and development activities focus on the environment, vehicle safety, information
technology and product development.
Toyota’s environmental research and development activities focus on:•

Developing light weight and more fuel-efficient engines and transmissions. These technologies include
the direct injection four-stroke gasoline engine, the nitrous oxide storage reduction catalytic system, thecommon rail direct injection diesel engine and the diesel particulate and nitrous oxide reduction system.

•

Developing alternative fuel powering systems for commercial sale. This includes developing hybrid
vehicles and fuel cell hybrid vehicles. The second-generation Prius that Toyota introduced in
September 2003 features a new hybrid system which decreases negative environmental impact while
increasing power and performance. In July 2007, Toyota developed the Plug-in Hybrid Vehicle (PHV)
and received certification from Japan’s Ministry of Land, Infrastructure, Transport and Tourism(MLIT). PHV runs as an Electric Vehicle (EV) in short distances and runs as a regular hybrid vehicle inlong distances. Tests are conducted in Japan, North America and Europe and in late 2009, Toyota plansto sell PHVs with lithium ion batteries to fleet vehicle users in Japan, North America and Europe. In
June 2005, Toyota’s new fuel cell hybrid passenger vehicle became the first vehicle in Japan to acquirevehicle type certification under the Road Vehicles Act, as amended on March 31, 2005, by MLIT.
Toyota is also working on the development of alternative fuels for vehicles fueled by compressed
natural gas and liquid petroleum gas, as well as for flexible fuel vehicles that run on bioethanol andgasoline which are recently drawing a lot of attention. Toyota has also been conducting a wide range of
research and study on alternative fuel such as biofuel, including cellulose ethanol and hydrogenizedbio-diesel, and utilizing it in developing alternative-fuel vehicles.

•

Recycling of vehicle parts through the development of recycling technologies. Work in this area
includes developing uses for shredder residue, the recycling of nickel-metal hydride batteries and thedevelopment of vehicles constructed with a high proportion of recyclable parts.

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

research on protecting diverse passengers, including senior citizens,•

autonomous driving support systems, including frontal crash-prevention support systems, and•data exchange driving-support systems using advanced communication technologies.

To expand the frontiers of safety technology in automobiles, Toyota completed in 1995 its first prototype
Advanced Safety Vehicle, the ASV-1. The ASV-2, which was introduced in 2000, incorporates emerging
technologies, such as an autonomous safety support system that uses CCD stereo cameras to recognize obstaclesin traffic lanes and an infrastructure-harmonized safety support system to warn the driver of pedestrian crossings.
In 2002, Toyota conducted road testing of the ASV-3, a prototype based on further improved67infrastructure-harmonized system. With the February 2003 introduction of the Harrier models in Japan, Toyota
became the first car manufacturer to implement a pre-crash safety system in its automobiles. This advanced
system consists of pre-crash sensors that use millimeter wave radar to detect a possible collision, seat belts thattighten their hold on passengers when a collision is determined to be inevitable and a brake assist system thatutilizes power-assisted braking to minimize the speed on impact. In February 2004, Toyota introduced thepre-collision safety system for the first time in the United States by equipping the LS430 with the above featuresand suspension control features that control nose dives when applying the brakes.
In September 2006, at the time of introduction of LS460 in Japan, Toyota established the world’s firstenhanced pre-crash safety system, which added functions to detect pedestrians in front, to support driver steering,and to react to vehicle collision.
In February 2008, Toyota developed the world’s first driver monitoring pre-crash safety system for the
Crown sold in Japan, that monitors whether the driver’s eyes are open, in addition to the face monitor whichmonitors the direction in which the driver is facing.
Furthermore, in March 2009, Toyota developed and introduced the world’s first “front-side pre-crash safetysystem”, which detects possible head-on and front-side collisions such as at intersections, for the Crown Majesta.
Toyota’s product development program uses a series of methods which are generally intended to promote
timely and appropriate responses to changing market demand. These methods include:•

optimizing and eliminating vehicle platforms,•

sharing parts and components among multiple vehicles,•

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

In September 2002, Toyota and Nissan Motor Co., Ltd. (“Nissan”) entered into an agreement setting forth
the basic terms of technical cooperation and other long-term projects involving hybrid systems. Pursuant to thisagreement, Toyota has provided parts and components of the Camry Hybrid’s hybrid system to Nissan’s Altima
Hybrid since 2006. In March 2004, Toyota and Ford Motor Company announced that they have entered into
licensing agreements for patents related to hybrid systems and emissions purification. Pursuant to theagreements, Toyota will license, to Ford Motor Company, patents related to hybrid system control technology.
Further, both companies agreed to a cross-licensing arrangement of emission purification technology patents forlean-burn engines.
Toyota’s research and development expenditures were approximately ¥904 billion in fiscal 2009,¥959 billion in fiscal 2008 and ¥891 billion in fiscal 2007. Worldwide, approximately 36,000 employees are
involved in Toyota’s research and development activities.
Toyota does not consider any one group of patents or licenses to be so important that their expiration or
termination would materially affect Toyota’s business. For a further discussion of Toyota’s intellectual property,
see “Information on the Company — Business Overview — Intellectual Property”.
5.D TREND INFORMATION
For a discussion of the trends that affect Toyota’s business and operating results, see “— Operating Results”
and “— Liquidity and Capital Resources”.
5.E OFF-BALANCE SHEET ARRANGEMENTS
Toyota uses its securitization program as part of its funding for its financial services operations. See note 7
to the consolidated financial statements regarding the impact of the securitization program on the consolidated
financial statements.
68Lending Commitments
Credit Facilities with Credit Card Holders
Toyota’s financial services operation issues 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 holders’ requests up to the limits established on an individual holder’s basis. Although loans
made to customers through this facility 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 ¥1,816.7 billion as of March 31, 2009.
Credit Facilities with Dealers
Toyota’s financial services operation maintains credit facilities with dealers. These credit facilities may be
used for business acquisitions, facilities refurbishment, real estate purchases, and working capital requirements.
These loans are typically collateralized with liens on real estate, vehicle inventory, and/or other dealership assets,
as appropriate. Toyota obtains a personal guarantee from the dealer or corporate guarantee from the dealershipwhen deemed prudent. Although the loans are typically collateralized or guaranteed, the value of the underlying
collateral or guarantees may not be sufficient to cover Toyota’s exposure under such agreements. Toyota prices
the credit facilities according to the risks assumed in entering into the credit facility. Toyota’s financial services
operation also provides 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 ¥1,702.3 billion as of March 31, 2009.
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, 2009, ranged from one month to 35 years. However, they are generally shorter than the useful lives of
products sold. Toyota is required to execute its guarantee primarily when customers are unable to make required
payments.
The maximum potential amount of future payments as of March 31, 2009 is ¥1,570.4 billion. Liabilities forthese guarantees of ¥5.3 billion have been provided as of March 31, 2009. Under these guarantee contracts,
Toyota is entitled to recover any amounts paid by it from the customers whose obligations it guaranteed.
5.F TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONSContractual Obligations and Commitments
For information regarding debt obligations, capital lease obligations, operating lease obligations and otherobligations, including amounts maturing in each of the next five years, see notes 13, 22 and 23 to theconsolidated financial statements. In addition, as part of Toyota’s normal business practices, Toyota enters into
long-term arrangements with suppliers for purchases of certain raw materials, components and services. Thesearrangements may contain fixed/minimum quantity purchase requirements. Toyota enters into such arrangements
to facilitate an adequate supply of these materials and services.

69

The following tables summarize Toyota’s contractual obligations and commercial commitments as ofMarch 31, 2009:

Less than
1 year

Total

Contractual Obligations:Short-term borrowings (note 13)
Loans . . . . . . . . . . . . . . . . . . . . . . ¥ 1,115,122
Commercial paper . . . . . . . . . . . .
2,502,550
Long-term debt* (note 13) . . . . . . . . .
8,949,615
Capital lease obligations (note 13) . . .
51,366
Non-cancelable operating leaseobligations (note 22) . . . . . . . . . . . .
54,161
Commitments for the purchase ofproperty, plant and other assets(note 23) . . . . . . . . . . . . . . . . . . . . .
110,874
Total . . . . . . . . . . . . . . . . . .

¥12,783,688¥1,115,122
2,502,550
2,688,324
11,188

Yen in millions
Payments Due by Period
1 to 33 to 5
years
years

¥

—
—
3,589,350
25,272¥5 years and
after

—
¥
—
—
—
1,261,893
1,410,048
2,535
12,371

11,56715,457

9,503

17,63450,20034,275

10,90815,491¥6,378,951¥3,664,354¥1,284,839¥1,455,544* “Long-term debt” represents future principal payments.
Toyota is unable to make reasonable estimates of the period of cash settlement with respect to liabilities
recognized for uncertain tax benefits, and accordingly such liabilities are excluded from the table above. Seenote 16 to the consolidated financial statements for further discussion.
Toyota expects to contribute ¥95,270 million to its pension plans in fiscal 2010.
Yen in millions
Total
Amounts
Committed

Amount of Commitment Expiration Per PeriodLess than
1 to 33 to 5
5 years and1 year
years
years
after

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

¥1,570,497¥446,638¥724,503¥314,472¥84,884

Total Commercial Commitments . . . . . . .

¥1,570,497¥446,638¥724,503¥314,472¥84,884

5.G SAFE HARBOR
All information that is not historical in nature disclosed under “Item 5. Operating and Financial Review andProspects — Off-Balance Sheet Arrangements” and “— Tabular Disclosure of Contractual Obligations” isdeemed to be a forward-looking statement. See “Cautionary Statement Concerning Forward-Looking
Statements” for additional information.

70

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
6.A DIRECTORS AND SENIOR MANAGEMENT
In June 2003, Toyota implemented a comprehensive reorganization of its senior management structure. Aspart of this reorganization, Toyota introduced a streamlined board of directors and established the new positionof non-board managing officer. At the June 2009 ordinary general shareholders’ meeting, 29 directors wereappointed to serve on the board of directors. Senior Managing Directors not only serve as members of the board
to participate in the management of Toyota but also serve as the highest authorities in their respective areas ofsupervision and oversee the daily operations of specific fields/divisions in conjunction with non-board managing
officers. This allows Senior Managing Directors to serve as a conduit between management and daily operations.
The 50 non-board managing officers generally have responsibility for Toyota’s daily operations in specific fields/
divisions and report to the designated Senior Managing Directors, and are appointed for one-year terms. Toyota
believes that this management system has enhanced its global competitiveness by promoting timely, hands-on
decision-making for day-to-day operational matters. Toyota has seven corporate auditors, four of whom areoutside corporate auditors.
Date First Elected
to Board or as Auditor

Name

Age

Title

Fujio Cho . . . . . . . . . . . . . . . .
Katsuaki Watanabe . . . . . . . . .
Kazuo Okamoto . . . . . . . . . . .
Akio Toyoda . . . . . . . . . . . . . .
Takeshi Uchiyamada . . . . . . .
Yukitoshi Funo . . . . . . . . . . . .
Atsushi Niimi . . . . . . . . . . . . .
Shinichi Sasaki . . . . . . . . . . . .
Yoichiro Ichimaru . . . . . . . . . .
Teiji Tachibana . . . . . . . . . . . .
Akira Okabe . . . . . . . . . . . . . .
Shinzo Kobuki . . . . . . . . . . . .
Akira Sasaki . . . . . . . . . . . . . .
Tadashi Arashima . . . . . . . . . .
Mamoru Furuhashi . . . . . . . . .
Satoshi Ozawa . . . . . . . . . . . .
Iwao Nihashi . . . . . . . . . . . . . .
Yasuhiko Ichihashi . . . . . . . . .
Tadashi Yamashina . . . . . . . . .
Takahiko Ijichi . . . . . . . . . . . .
Tetsuo Agata . . . . . . . . . . . . . .
Masamoto Maekawa . . . . . . . .
Yasumori Ihara . . . . . . . . . . . .
Toshio Furutani . . . . . . . . . . . .
Takahiro Iwase . . . . . . . . . . . .
Yoshimasa Ishii . . . . . . . . . . .
Takeshi Shirane . . . . . . . . . . .
Yoshimi Inaba . . . . . . . . . . . . .
Nampachi Hayashi . . . . . . . . .
Yoshikazu Amano . . . . . . . . .
Chiaki Yamaguchi . . . . . . . . .
Masaki Nakatsugawa . . . . . . .
Yoichi Kaya . . . . . . . . . . . . . .
Yoichi Morishita . . . . . . . . . . .
Akishige Okada . . . . . . . . . . .
Kunihiro Matsuo . . . . . . . . . . .

72
67
65
53
62
62
61
62
60
62
61
59
61
59
59
59
59
57
58
56
56
59
57
56
57
56
56
63
66
60
59
56
75
75
71
66

Chairman of the Board
Vice Chairman of the Board
Vice Chairman of the Board
President, Member of the Board
Executive Vice President, Member of the Board
Executive Vice President, Member of the Board
Executive Vice President, Member of the Board
Executive Vice President, Member of the Board
Executive Vice President, Member of the Board
Senior Managing Director, Member of the Board
Senior Managing Director, Member of the Board
Senior Managing Director, Member of the Board
Senior Managing Director, Member of the Board
Senior Managing Director, Member of the Board
Senior Managing Director, Member of the Board
Senior Managing Director, Member of the Board
Senior Managing Director, Member of the Board
Senior Managing Director, Member of the Board
Senior Managing Director, Member of the Board
Senior Managing Director, Member of the Board
Senior Managing Director, Member of the Board
Senior Managing Director, Member of the Board
Senior Managing Director, Member of the Board
Senior Managing Director, Member of the Board
Senior Managing Director, Member of the Board
Senior Managing Director, Member of the Board
Senior Managing Director, Member of the Board
Director, Member of the Board
Director, Member of the Board
Corporate Auditor
Corporate Auditor
Corporate Auditor
Corporate Auditor
Corporate Auditor
Corporate Auditor
Corporate Auditor

The term of each director listed above expires in June 2010.
71

September 1988
September 1992
June 1996
June 2000
June 1998
June 2000
June 2000
June 2001
June 2001
June 2001
June 2001
June 2007
June 2007
June 2007
June 2007
June 2007
June 2008
June 2008
June 2008
June 2008
June 2008
June 2009
June 2009
June 2009
June 2009
June 2009
June 2009
June 2009
June 2009
June 2007
June 2003
June 2006
June 2003
June 2006
June 2006
June 2007

Biographies
Fujio Cho was appointed as a Director, Member of the Board of Toyota Motor Corporation in 1988 and has
served as the Chairman of the Board since 2006. Mr. Cho served as the Vice Chairman of the Board from 2005 to
2006, the President, Member of the Board from 1999 to 2005, an Executive Vice President, Member of the Board
from 1998 to 1999, and as the President of Toyota Motor Manufacturing, U.S.A., Inc. from 1988 to 1994.
Mr. Cho also serves as a Director of Central Japan Railway Company and Sony Corporation and as a Corporate
Auditor of Denso Corporation. Mr. Cho joined Toyota in 1960.
Katsuaki Watanabe was appointed as a Director, Member of the Board of Toyota Motor Corporation in
1992 and has served as the President, Member of the Board since 2005 and an Executive Vice President, Memberof the Board from 2001 to 2005. Mr. Watanabe served as President, Member of the Board from 2005 to 2009,and has served as the Vice Chairman of the Board since 2009. Mr. Watanabe also serves as a Director of
Mitsubishi UFJ Securities Co., Ltd. and Aioi Insurance Co., Ltd. and as a Corporate Auditor of KDDI
Corporation and Toyota Industries Corporation. Mr. Watanabe joined Toyota in 1964.
Kazuo Okamoto was appointed as a Director, Member of the Board of Toyota Motor Corporation in 1996
and has served as the Vice Chairman of the Board since 2008. Mr. Okamoto served as an Executive Vice
President, Member of the Board between 2005 and 2008. Mr. Okamoto also serves as a Director of Toyota
Boshoku Corporation and as a Corporate Auditor of Toyota Gosei Co., Ltd. Mr. Okamoto joined Toyota in 1967.
Akio Toyoda was appointed as a Director, Member of the Board of Toyota Motor Corporation in 2000 andserved as an Executive Vice President, Member of the Board from 2005 to 2009. Mr. Toyoda has served as the
President, Member of the Board since 2009. Mr. Toyoda has also served as the Chairman of Toyota Motor
Europe NV/SA and Toyota Motor (China) Investment Co., Ltd., as a Director and Chief Executive Officer of
Toyota Motor North America, Inc., and as a Corporate Auditor of Toyota Boshoku Corporation. Mr. Toyoda
joined Toyota in 1984.
Takeshi Uchiyamada was appointed as a Director, Member of the Board of Toyota Motor Corporation in1998 and has served as an Executive Vice President, Member of the Board since 2005. Mr. Uchiyamada also
serves as a Director of JTEKT Corporation. Mr. Uchiyamada also served as the Chairman of Toyota Motor
Technical Center (China) Co., Ltd. from 2005 to 2009. Mr. Uchiyamada joined Toyota in 1969.
Yukitoshi Funo has served as a Director, Member of the Board of Toyota Motor Corporation since 2000
and has served as an Executive Vice President, Member of the Board since 2009. Mr. Funo also served as the
Chairman of the Board of Toyota Motor Sales, U.S.A., Inc. from 2005 to 2009 and as the President from 2003 to
2005. Mr. Funo also serves as a Corporate Auditor of Toyota Tsusho Corporation. Mr. Funo joined Toyota in
1970.
Atsushi Niimi was appointed as a Director, Member of the Board of Toyota Motor Corporation in 2000,
and has served as an Executive Vice President, Member of the Board since 2009. Mr. Niimi also serves as the
Chairman of Toyota Motor Engineering and Manufacturing North America, Inc. and Toyota Motor TechnicalCenter (China) Co., Ltd., and as a Corporate Auditor of JTEKT Corporation. Mr. Niimi joined Toyota in 1971.
Shinichi Sasaki was appointed as a Director, Member of the Board of Toyota Motor Corporation in 2001,
and has served as an Executive Vice President, Member of the Board since 2009. Mr. Sasaki also serves as a
Director of KDDI Corporation and as a Corporate Auditor of Toyota Industries Corporation. Mr. Sasaki joined
Toyota in 1970.
Yoichiro Ichimaru was appointed as a Director, Member of the Board of Toyota Motor Corporation in 2001,
and has served as an Executive Vice President, Member of the Board since 2009. Mr. Ichimaru also serves as a
Corporate Auditor of Aioi Insurance Co., Ltd. and Aichi Steel Corporation. Mr. Ichimaru joined Toyota in 1971.
72

Teiji Tachibana was appointed as a Director, Member of the Board of Toyota Motor Corporation in 2001,
and has served as a Senior Managing Director, Member of the Board since 2005. Mr. Tachibana has served as theChief Officer of the Housing Group since 2005. Mr. Tachibana served as a Managing Officer from 2003 to 2005.
Mr. Tachibana joined Toyota in 1969.
Akira Okabe was appointed as a Director, Member of the Board of Toyota Motor Corporation in 2001, andhas served as a Senior Managing Director, Member of the Board since 2005. Mr. Okabe has also served as theChief Officer of the Asia & Oceania Operations Group and the Deputy Chief Officer of the Middle East, Africa
and Latin America Operations Group since 2009. Mr. Okabe served as a Managing Officer from 2003 to 2005.
Mr. Okabe joined Toyota in 1971.
Shinzo Kobuki has served as a Senior Managing Director, Member of the Board of Toyota Motor
Corporation since 2007. Mr. Kobuki has served as Chief Officer of the R&D Group 2 since 2008. Mr. Kobuki
was appointed as a Managing Officer in 2003. Mr. Kobuki joined Toyota in 1972.
Akira Sasaki has served as a Senior Managing Director, Member of the Board of Toyota Motor
Corporation since 2007. Mr. Sasaki served as the Chairman of Toyota Motor (China) Investment Co., Ltd. since2007, and has served as the Vice Chairman of Toyota Motor (China) Investment Co., Ltd. since 2009. Mr. Sasaki
has served as the Chief Officer of the China Operations Group since 2007. Mr. Sasaki has served as a Managing
Officer from 2003 to 2007. Mr. Sasaki joined Toyota in 1970.
Tadashi Arashima has served as a Senior Managing Director, Member of the Board of Toyota Motor
Corporation since 2007. Mr. Arashima has served as the Chief Officer of the Europe Operations Group since2009. Mr. Arashima has served as the President of Toyota Motor Europe NV/SA since 2006. Mr. Arashima was
appointed as a Managing Officer in 2003. Mr. Arashima joined Toyota in 1973.
Mamoru Furuhashi has served as a Senior Managing Director, Member of the Board of Toyota Motor
Corporation since 2007. Mr. Furuhashi has also served as the Chief Officer of the Government & Public Affairs
Group since 2009. Mr. Furuhashi was appointed as a Managing Officer in 2003. Mr. Furuhashi joined Toyota in
1973.
Satoshi Ozawa has served as a Senior Managing Director, Member of the Board of Toyota Motor
Corporation since 2007. Mr. Ozawa has also served as the Chief Officer of the General Administration & Human
Resources Group since 2007 and as the Chief Officer of the Information Systems Group since 2009. Mr. Ozawa
was appointed as a Managing Officer in 2003. Mr. Ozawa joined Toyota in 1974.
Iwao Nihashi has served as a Senior Managing Director, Member of the Board of Toyota Motor
Corporation since 2008. Mr. Nihashi has served as the Chief Officer of the Quality Group since 2008.
Mr. Nihashi was appointed as a Managing Officer in 2003. Mr. Nihashi joined Toyota in 1970.
Yasuhiko Ichihashi has served as a Senior Managing Director, Member of the Board of Toyota Motor
Corporation since 2008. Mr. Ichihashi has served as the Chief Officer of the R&D Group 1 since 2008 and as theChief Officer of the Product Development Group since 2009. Mr. Ichihashi was appointed as a Managing Officer
in 2003. Mr. Ichihashi joined Toyota in 1974.
Tadashi Yamashina has served as a Senior Managing Director, Member of the Board of Toyota Motor
Corporation since 2008. Mr. Yamashina has served as the Chief Officer of the Technical Administration Groupsince 2009. Mr. Yamashina has also served as the Chairman of Toyota Motorsport GmbH since 2007.
Mr. Yamashina was appointed as a Managing Officer in 2003. Mr. Yamashina joined Toyota in 1977.
Takahiko Ijichi has served as a Senior Managing Director, Member of the Board of Toyota Motor
Corporation since 2008. Mr. Ichiji has served as the Chief Officer of the Accounting Group since 2008. Mr. Ijichi
was appointed as a Managing Officer in 2004. Mr. Ijichi joined Toyota in 1976.
73

Tetsuo Agata has served as a Senior Managing Director, Member of the Board of Toyota Motor
Corporation since 2008. Mr. Agata has served as the President of Toyota Motor Engineering and Manufacturing
North America, Inc. since 2008. Mr. Agata was appointed as a Managing Officer in 2004. Mr. Agata joined
Toyota in 1976.
Masamoto Maekawa has served as a Senior Managing Director, Member of the Board of Toyota Motor
Corporation since 2009. Mr. Maekawa has served as the Chief Officer of the Japan Sales Operations Group since2009. Mr. Maekawa served as an Advisor from 2007 to 2009. Mr. Maekawa was appointed as a Managing
Officer in 2003. Mr. Maekawa joined Toyota in 1973.
Yasumori Ihara has served as a Senior Managing Director, Member of the Board of Toyota Motor
Corporation since 2009. Mr. Ihara has served as the Chief Officer of the Business Development Group and the
IT & ITS Group since 2009. Mr. Ihara served as an Advisor from 2007 to 2008. Mr. Ihara was appointed as aManaging Officer in 2004. Mr. Ihara joined Toyota in 1975.
Toshio Furutani has served as a Senior Managing Director, Member of the Board of Toyota Motor
Corporation since 2009. Mr Furutani has served as the Chief Officer of the Customer Service Operations Groupsince 2009. Mr. Furutani was appointed as a Managing Officer in 2004. Mr. Furutani joined Toyota in 1976.
Takahiro Iwase has served as a Senior Managing Director, Member of the Board of Toyota Motor
Corporation since 2009. Mr. Iwase has served as the Chief Officer of the Production Engineering Group and the
Manufacturing Group since 2009. Mr. Iwase was appointed as a Managing Officer in 2005. Mr. Iwase joined
Toyota in 1977.
Yoshimasa Ishii has served as a Senior Managing Director, Member of the Board of Toyota Motor
Corporation since 2009. Mr. Ishii has served as the Chief Officer of the Operation Planning & Support Groupsince 2009. Mr. Ishii was appointed as a Managing Officer in 2005. Mr. Ishii joined Toyota in 1976.
Takeshi Shirane has served as a Senior Managing Director, Member of the Board of Toyota Motor
Corporation since 2009. Mr. Shirane has served as the Chief Officer of the Purchasing Group since 2009.
Mr. Shirane was appointed as a Managing Officer in 2005. Mr. Shirane joined Toyota in 1977.
Yoshimi Inaba has served as a Director, Member of the Board of Toyota Motor Corporation since 2009.
Mr. Inaba has served as the Chief Officer of the North America Operations Group and as the President and Chief
Operating Officer of Toyota Motor North America, Inc. since 2009. Mr. Inaba served as an Advisor from 2007 to
2009, an Executive Vice President from 2005 to 2007, a Senior Managing Director from 2003 to 2005, and was
appointed a Director in 1997. Mr. Inaba served as the President of Central Japan International Airport Co., Ltd.
from 2007 to 2009. Mr. Inaba joined Toyota in 1968.
Nampachi Hayashi has served as a Director, Member of the Board of Toyota Motor Corporation since2009. Mr. Hayashi has been responsible for Order-to-Delivery Kaizen Promotion and TPS Through Promotion
since 2009. Mr. Hayashi served as a Senior Technical Executive from 2001 to 2009. Mr. Hayashi joined Toyota
in 1966.
Yoshikazu Amano has served as a Corporate Auditor of Toyota Motor Corporation since 2007. Mr. Amano
was appointed as a Director, Member of the Board in 2002 and served as a Managing Officer from 2003 to 2007.
Mr. Amano joined Toyota in 1972.
Chiaki Yamaguchi was appointed as a Corporate Auditor of Toyota Motor Corporation in 2003.
Mr. Yamaguchi also served as the Senior Managing Director of Toyota Financial Services Corporation from2001 to 2003. Mr. Yamaguchi joined Toyota in 1972.
74

Masaki Nakatsugawa was appointed as a Corporate Auditor of Toyota Motor Corporation in 2006.
Mr. Nakatsugawa also served as the General Manager of Toyota’s Accounting Division from 2004 to 2006.
Mr. Nakatsugawa joined Toyota in 1976.
Yoichi Kaya was appointed as a Corporate Auditor of Toyota Motor Corporation in 2003. Mr. Kaya is the
Director-General of the Research Institute of Innovative Technology for the Earth.
Yoichi Morishita was appointed as a Corporate Auditor of Toyota Motor Corporation in 2006.
Mr. Morishita has served as a Corporate Counselor of Matsushita Electric Industrial Co., Ltd. Matsushita ElectricIndustrial Co., Ltd. was renamed as Panasonic Corporation in 2008, and Mr. Morishita currently serves as a
Corporate Counselor of Panasonic Corporation.
Akishige Okada was appointed as a Corporate Auditor of Toyota Motor Corporation in 2006. Mr. Okada is
the Advisor of Sumitomo Mitsui Banking Corporation.
Kunihiro Matsuo was appointed as a Corporate Auditor of Toyota Motor Corporation in 2007. Mr. Matsuo
served as the Prosecutor-General of the Supreme Public Prosecutors Office from 2004 to 2006. Mr. Matsuo
registered as an Attorney in 2006.
None of the persons listed above was selected as director, corporate auditor or member of senior
management pursuant to an arrangement or understanding with Toyota’s major shareholders, customers,
suppliers or others.
6.B COMPENSATION
The aggregate amount of remuneration, including bonuses but excluding stock options, paid to all directors
and corporate auditors as a group by Toyota for services in all capacities during fiscal 2009 was approximately¥3,605 million. Directors and corporate auditors of Toyota Motor Corporation receive year-end bonuses, theaggregate amount of which is approved at Toyota Motor Corporation’s ordinary general shareholders’ meetingand is based on Toyota Motor Corporation’s financial performance for the fiscal year. The amounts of thebonuses paid to individual directors and corporate auditors are then determined based upon discussions at a
meeting of Toyota Motor Corporation’s board of directors and the meeting of corporate auditors.
Toyota Motor Corporation also granted to its directors 1,010,000 stock acquisition rights to purchase up to
10,100 shares of common stock during fiscal 2009 under its stock option plan. For a detailed description of thestock options and the stock option plan, see “— Share Ownership”.
In April 2006, the board of directors of Toyota Motor Corporation decided to abolish the retirement
allowance payments for directors and proposed the decision to the ordinary general shareholders’ meeting. The
proposal was subsequently resolved at the ordinary general shareholders’ meeting in June 2006. The last lump
sum retirement allowance for directors was also approved at the ordinary general shareholders’ meeting in
June 2006. At the same time, the amount of Directors’ remuneration was revised from ¥130 million or less permonth to ¥200 million or less per month by the resolution of the ordinary general shareholders’ meeting in
June 2006. In April 2008, the board of directors of Toyota Motor Corporation decided to abolish the retirement
allowance payments for corporate auditors and executive bonuses, and proposed the decision to the ordinary
general shareholders’ meeting in June 2008. The proposal was subsequently resolved at the ordinary generalshareholders’ meeting. The last lump sum retirement allowance for corporate auditors was also approved at theordinary general shareholders’ meeting in June 2008. At the same time, the amount of corporate auditors’
remuneration was revised from ¥13 million or less per month to ¥30 million or less per month by the resolutionof the ordinary general shareholders’ meeting in June 2008.

75

6.C BOARD PRACTICES
Toyota’s articles of incorporation provide for a board of directors of not more than 30 members and for not
more than seven corporate auditors. Shareholders elect the directors and corporate auditors at the generalshareholders’ meeting. The normal term of office of a director is one year and of a corporate auditor is four years.
Directors and corporate auditors may serve any number of consecutive terms.
The board of directors may elect one Chairman of the Board, one President and one or more Vice Chairmenof the Board, Executive Vice Presidents and Senior Managing Directors. 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 directors is party to a service contract with Toyota or any of its subsidiaries
that provides for benefits upon termination of employment.
Under the Corporation Act and Toyota’s articles of incorporation, Toyota may, by a resolution of its boardof directors, exempt Directors (including former Directors) from their liabilities to Toyota arising in connection
with their failure to execute their duties within the limits stipulated by laws and regulations.
Under the Corporation Act, Toyota must have at least three corporate auditors. At least half of the corporate
auditors are required to be persons who have not been a Director, accounting counselor (or if an accounting
counselor is a judicial person, a member of such judicial person who is in charge of its affairs), executive officer,
general manager or employee of Toyota or any of its subsidiaries at any time during the past. The corporate
auditors may not at the same time be directors, accounting counselor (in case that an accounting counselor is a
judicial person, a member of such judicial person who is in charge of its affairs), executive officers, generalmanagers or employees of Toyota or any of its subsidiaries. Together, these corporate auditors form a board ofcorporate auditors. The corporate auditors 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 corporate auditors also
monitor the administration of Toyota’s affairs by the directors. Corporate auditors are not required to be, andToyota’s corporate auditors are not, certified public accountants. They are required to participate in meetings ofthe board of directors but are not entitled to vote.
Under the Corporation Act and Toyota’s articles of incorporation, Toyota may, by a resolution of its boardof directors, exempt corporate auditors (including former corporate auditors) from their liabilities to Toyota
arising in connection with their failure to execute their duties within the limits stipulated by laws and regulations.
In addition, Toyota may enter into a liability limitation agreement with each outside corporate auditor 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.
Toyota does not have a remuneration committee.

766.D EMPLOYEESThe total number of Toyota employees, on a consolidated basis, as reported in Toyota’s annual Japanese
securities report filed with the Director of the Kanto Local Finance Bureau was 320,808 at March 31, 2009,
316,121 at March 31, 2008 and 299,394 at March 31, 2007. The following tables set forth a breakdown of
persons employed by business segment and by geographic location at March 31, 2009.
Segment

Number of
Employees

Location

Number of
Employees

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

280,585
8,420
26,714
5,089

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

199,053
37,27622,80538,981
22,693

Total company . . . . . . . . . . . . . . . . . . . . . . . .

320,808

Total company . . . . . . . . . . . . . . . . . . . . . .

320,808* “Other” consists of Central and South America,
Oceania and Africa.
Most regular employees of Toyota Motor Corporation and its consolidated subsidiaries in Japan, other thanmanagement, are required to become members of the labor unions that comprise the Federation of All Toyota
Workers’ Unions. Approximately 88% of Toyota Motor Corporation’s regular employees in Japan are membersof this union.
In Japan, basic wages and other working conditions are negotiated annually. In addition, in accordance withJapanese national custom, each employee is also paid a semi-annual bonus. Bonuses are negotiated at the time ofwage negotiations and are based on Toyota’s financial results, prospects and other factors. The average wage
increases per employee, excluding bonuses, in Japan have been approximately 2.1% per year for the past fivefiscal years.
In general, Toyota considers its labor relations with all of its workers to be good. However, Toyota iscurrently a party to, and otherwise from time to time experiences, labor disputes in some of the countries inwhich it operates. Toyota does not expect any disputes to which it is currently a party to materially affectToyota’s consolidated financial position.
Toyota’s average number of temporary employees on a consolidated basis was 80,244 during fiscal 2009.

77

6.E SHARE OWNERSHIPThe following table sets forth information with respect to the number of shares of Toyota’s common stock
held by each director and corporate auditor as of June 2009.
Number of
SharesName

Fujio Cho . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
40,705
Katsuaki Watanabe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
32,331
Kazuo Okamoto . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
29,364
Akio Toyoda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,574,891
Takeshi Uchiyamada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
28,464
Yukitoshi Funo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
34,248Atsushi Niimi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
32,700Shinichi Sasaki . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11,810
Yoichiro Ichimaru . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25,068
Teiji Tachibana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14,700
Akira Okabe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
30,000Shinzo Kobuki . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23,900
Akira Sasaki . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17,000Tadashi Arashima . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20,781
Mamoru Furuhashi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20,000
Satoshi Ozawa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17,900Iwao Nihashi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12,800Yasuhiko Ichihashi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22,800Tadashi Yamashina . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9,500
Takahiko Ijichi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15,000Tetsuo Agata . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,793Masamoto Maekawa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15,300
Yasumori Ihara . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,600
Toshio Furutani . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12,700Takahiro Iwase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11,700
Yoshimasa Ishii . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,400
Takeshi Shirane . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,669
Yoshimi Inaba . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
37,000Nampachi Hayashi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15,706
Yoshikazu Amano . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24,868
Chiaki Yamaguchi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,000
Masaki Nakatsugawa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,800
Yoichi Kaya . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—Yoichi Morishita . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
——Akishige Okada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kunihiro Matsuo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,174,498
Each of the persons listed above owns less than one percent of the issued and outstanding shares of common
stock of Toyota. The shares listed above do not include options that are exercisable for shares of Toyota’scommon stock. For a description of these options, see “— Stock Options” below.
None of Toyota’s shares of common stock entitles the holder to any preferential voting rights.

78

Stock Options
Toyota has enacted stock option plans in each of the past six years. The plans for which stock options or
stock acquisition rights are currently exercisable or will become exercisable in the future were approved by
Toyota’s shareholders in June of 2003, 2004, 2005, 2006, 2007, 2008 and 2009. Under the plan enacted in 2003,
Toyota issued stock acquisition rights, which are rights introduced as of April 2002 pursuant to the amendment to
the Commercial Code, to purchase up to 1,958,000 shares of common stock to its directors and 565 officers andemployees, including directors, officers and employees of its subsidiaries and one Toyota affiliate. Under the2004 plan, Toyota issued stock acquisition rights to purchase up to 2,021,000 shares of common stock to its
directors and 582 officers and employees, including directors, officers and employees of its subsidiaries and one
Toyota affiliate. Under the 2005 plan, Toyota issued stock acquisition rights to purchase up to 2,104,000 sharesof common stock to its directors and 596 officers and employees of its subsidiaries and one Toyota affiliate.
Under the 2006 plan, Toyota issued stock acquisition rights to purchase up to 3,176,000 shares of common stock
to its directors and 580 officers and employees, including directors, officers and employees of its subsidiaries andone Toyota affiliate. Under the 2007 plan, Toyota issued stock acquisition rights to purchase up to
3,264,000 shares of common stock to its directors and 579 officers and employees, including directors, officers
and employees of its subsidiaries and one Toyota affiliate. Under the 2008 plan, Toyota issued stock acquisitionrights to purchase up to 3,494,000 shares of common stock to its directors and 597 officers and employees,
including directors, officers and employees of its subsidiaries and one Toyota affiliate. Under the 2009 plan,
Toyota is authorized to issue stock acquisition rights to purchase up to 3,700,000 shares of common stock to its
directors and officers and employees, including directors, officers and employees of its subsidiaries and one
Toyota affiliate.
Pursuant to the provisions of the 2003, 2004 and 2005 plans, stock acquisition rights may be exercised
during a four-year period that starts two years from the date first granted. Pursuant to the provisions of the 2006,
2007, 2008 and 2009 plans, stock acquisition rights maybe exercised during a six-year period that starts two
years from the date of grant. The exercise price of each stock acquisition right is 1.025 times the closing price ofToyota’s common stock on the Tokyo Stock Exchange on the date of grant. Each of the 2003, 2004 and 2005
plans provides that each director will be granted no more than 200 and no less than 150 stock acquisition rights,
and each eligible officer or employee will be granted no more than 100 and no less than 20 stock acquisitionrights. The 2006, 2007, 2008 and 2009 plans provide that each director will be granted no more than 400 and noless than 300 stock acquisition rights, and each eligible officer or employee will be granted no more than 200 and
no less than 20 stock acquisition rights. For each of the 2003, 2004, 2005, 2006, 2007, 2008 and 2009 plans, one
hundred shares will be issued or delivered upon the exercise of each stock acquisition right. The options are
granted as of August 1 of each year for each plan, except for the 2004 plan, under which options were granted asof August 2, 2004, and the 2009 plan, under which options are expected to be granted as of August 3, 2009.
An option holder who retires while one’s options are still exercisable retains the right to exercise one’s
options at the maximum until the expiration of the exercise period described above. However, an option holder’sright to purchase common stock under each plan lapses automatically upon one’s death or upon taking position
such as in the management with a competitor.
The following table summarizes information for options and the incentive plan outstanding and exercisable
at March 31, 2009:

Exercise price range(Yen)

Number ofshares¥3,116 – 5,000 . . . . . . . . . . . . . 5,690,700¥5,001 – 7,278 . . . . . . . . . . . . . 5,650,000

Outstanding
Weighted- Weightedaverage
average
exercise
exercise
price
price
(Yen)
(Dollars)¥4,546¥6,724$46$68
79

Weightedaverageremaininglife(Years)

5.18
5.85

Exercisable
Weightedaverage
Number of
exercisesharesprice(Yen)2,220,700
2,751,000¥4,264¥6,140Weightedaverage
exercise
price(Dollars)$43$63

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, 2009, the employee stock ownership association held 15,285,740 shares of Toyota’scommon stock.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
7.A MAJOR SHAREHOLDERS
As of March 31, 2009, 3,447,997,492 shares of Toyota’s common stock were issued, out of which,
312,115,017 shares were treasury stock and 3,135,882,475 shares were outstanding. Beneficial ownership ofToyota’s common stock in the table below was prepared from information known to Toyota or can be ascertained
from public filings, including filings made by Toyota’s shareholders regarding their ownership of Toyota’scommon 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 ADSs representing such shares) must file a report concerning theshareholding with the Director of the relevant local finance bureau. A similar report must be filed, with certain
exceptions, if the percentage of shares held by a holder, solely or jointly, of more than 5% of the total issued
shares of a company increases or decreases by 1% or more, or if any change to a material matter set forth in any
previously filed reports occurs.
Based on information known to Toyota or can be ascertained from public filings, the following table sets
forth the beneficial ownership of holders of more than 5% of Toyota’s common stock as of the most recent
practicable date.

Name of Beneficial Owner

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

Number of
Shares(in thousands)

Percentage ofSharesIssued201,195

5.84

According to The Bank of New York Mellon, depositary for Toyota’s ADSs, as of March 31, 2009,
85,076,834 shares of Toyota’s common stock were held in the form of ADRs and there were 2,499 ADR holdersof record in the United States. According to Toyota’s register of shareholders, as of March 31, 2009, there were653,433 holders of common stock of record worldwide. As of March 31, 2009, there were 308 record holders of
Toyota’s common stock with addresses in the United States, whose shareholdings represented approximately
12.0% of the issued common stock on that date. Because some of these shares were held by brokers or othernominees, the number of record holders with addresses in the United States might not fully show the number ofbeneficial owners in the United States.
None of Toyota’s shares of common stock entitles the holder to any preferential voting rights.
To the extent known to Toyota, Toyota is not owned or controlled, directly or indirectly, by anothercorporation, any foreign government or any natural or legal person.
Toyota knows of no arrangements the operation of which may at a later time result in a change of control.

80

7.B RELATED PARTY TRANSACTIONSBusiness Relationships
Toyota purchases materials, supplies and services from numerous suppliers throughout the world in theordinary course of business, including Toyota’s equity-method affiliates and those firms with which certain
members of Toyota’s board of directors are affiliated. Toyota purchased materials, supplies and services fromthese affiliated entities in the amount of ¥3,918.7 billion in fiscal 2009. Toyota also sells its products and services
to Toyota’s equity-method affiliates and firms with which certain members of Toyota’s board of directors areaffiliated. Toyota sold products and services to these affiliated entities in the amount of ¥1,585.8 billion in
fiscal 2009. Toyota believes all of these purchase and sale transactions were arm’s-length transactions. Seenote 12 of Toyota’s consolidated financial statements for additional information regarding Toyota’s investments
in and transactions with affiliated companies.
Loans
Toyota regularly has trade accounts and other receivables by, and accounts payable to, Toyota’s equitymethod affiliates and firms with which certain members of Toyota’s board of directors are affiliated. Toyota hadoutstanding trade accounts and other receivables by these affiliated entities in the amount of ¥159.8 billion as ofMarch 31, 2009. Toyota had outstanding trade accounts and other payables to these affiliated entities in theamount of ¥364.0 billion as of March 31, 2009.
Toyota, from time to time, provides short- to medium-term loans to its affiliates, as well as loans under aloan program established by certain subsidiaries to assist their executives and directors with the purchase ofhomes. As of March 31, 2009, an aggregate amount of ¥20.7 billion in loans was outstanding to its equitymethod affiliates. As of March 31, 2009, an aggregate amount of ¥33.5 billion in loans was outstanding to thoseof its affiliates not accounted for under the equity method, which are 20% to 50% owned by Toyota. As of
March 31, 2009, the largest loan outstanding to any such equity-method affiliate was a loan of ¥13.5 billion at a
fixed rate. 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 —Geographical Breakdown”.

7.

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

8.

Dividend Policy. See “Selected Financial Data — Dividends”.

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.
81

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

New York
Stock Exchange
Price per ADS
High
Low

Fiscal Year Ended March 31,

2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥4,520
6,560
8,350
7,850
5,670

¥3,730
3,790
5,430
4,830
2,650

$ 82.94110.28138.00128.12106.74$ 65.65
70.95
94.52
96.91
57.68

7,800
7,850
6,870
6,310
5,670
5,120
4,460
3,260

7,070
6,190
5,870
4,830
4,820
4,380
2,650
2,755

127.74128.12118.75116.00106.74
93.66
83.90
71.14

116.80112.38105.19
96.91
94.00
82.64
58.17
57.68

3,070
3,200
3,220
3,260
3,940
4,040

2,650
2,755
2,880
2,820
3,270
3,510

69.74
68.38
71.14
67.07
80.92
83.54

58.17
62.14
61.90
57.68
67.90
73.52

Financial Quarter Ended:

June 30, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
September 30, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
June 30, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
September 30, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Month Ended:

December 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
January 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
February 28, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
April 30, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
May 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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 three other regional stock exchanges in Japan.
Since September 29, 1999, American Depositary Shares, each equal to two shares of Toyota’s common
stock and evidenced by American Depositary Receipts, have been traded and listed on the New York Stock
Exchange through a sponsored ADR facility operated by The Bank of New York Mellon, as depositary. Prior tothat time, Toyota’s ADSs were listed on the Nasdaq SmallCap Market through five unsponsored ADR facilities.
Toyota’s common stock is also listed on the London Stock Exchange.
9.D SELLING SHAREHOLDERS
Not applicable.
829.E DILUTION
Not applicable.
9.F EXPENSES OF THE ISSUE
Not applicable.
ITEM 10. ADDITIONAL INFORMATION
10.A SHARE CAPITAL
Not applicable.
10.B MEMORANDUM AND ARTICLES OF ASSOCIATION
Except as otherwise stated, set forth below is information relating to Toyota’s common stock, including
brief summaries of the relevant provisions of Toyota’s articles of incorporation and share handling regulations, as
currently in effect, and of the Corporation Act, Act Concerning Book-Entry Transfer of Corporate Bonds, Sharesand Other Securities (the “Book-Entry Transfer Act”) and related legislation.
GeneralToyota’s authorized number of shares as of March 31, 2009 was 10,000,000,000 shares, of which
3,447,997,492 shares were issued. Toyota does not issue share certificates for its shares. In accordance with the
Corporation Act, the Book-Entry Transfer Act and Toyota’s articles of incorporation, Toyota’s shares arerecorded or registered on (i) Toyota’s register of shareholders and (ii) transfer account books of the Japan
Securities Depository Center, Inc. (“JASDEC”) which is a book-entry transfer institution and securities firms,
banks or other account management institutions. The transfer of shares will generally become effective once thetransfer is recorded in the transferee’s account. In order to assert shareholders’ rights against Toyota, ashareholder must generally have his or her name and address recorded or registered on Toyota’s register ofshareholders. A shareholder can assert minority shareholders’ rights (shareholders’ rights for which Toyota has
not set a record date) against Toyota if JASDEC provides an individual shareholder notice to Toyota upon theshareholder’s request. The shareholder of deposited shares underlying the ADSs is the depositary for the ADSs.
Accordingly, holders of ADSs will not be able directly to assert shareholders’ rights.
A shareholder must have a transfer account to transfer shares. Shareholders who do not have a transfer
account with JASDEC must have an account with an account management institution that directly or indirectly
has a transfer account with JASDEC. Once Toyota decides on the record date for its shareholders’ meeting or
makes a request to JASDEC based on justifiable grounds, JASDEC will promptly provide to Toyota names,
addresses and other information with respect to Toyota’s shareholders who are recorded on the transfer accountbooks of JASDEC or account management institutions. Upon receiving such information, Toyota will record or
register such information received from JASDEC on its register of shareholders. Accordingly, holders of shares
recorded or registered on Toyota’s register of shareholders will be treated as shareholders of Toyota and may
exercise rights, such as voting rights, and will receive dividends (if any) and notices to shareholders directly fromToyota. Shareholders wishing to assert minority shareholders’ rights against Toyota must request an individual
shareholder notice to JASDEC or the account management institution at which the shareholder has opened atransfer account. In response to such request, JASDEC will provide the individual shareholders notice to Toyota.
The shareholder may assert his or her minority shareholders’ rights against Toyota for a period of four weeks
after the date the individual shareholder notice is provided to Toyota. The shares held by a person who is deemedto hold additional shares according to the transfer account books are aggregated for these purposes.

83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;•

the sale, leasing and maintenance of computers included within such systems, and sale of products by
utilizing such systems;•

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

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

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

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

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

the sale of goods related to each of the preceding items and mineral oil; and•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 ofthe preceding items.

Dividends
Dividends — General
Toyota normally pays dividends twice per year, including an interim dividend and a year-end dividend.
Although Toyota’s articles of incorporation provide that retained earnings can be distributed as dividends
84pursuant to the resolution of its board of directors, Toyota’s board of directors recommends the payment ofyear-end dividend to shareholders and pledgees of record as of March 31 in each year. Year-end dividends areusually paid to the shareholders immediately following approval of the dividends at the general shareholders’meeting, normally around the end of June of each year. In addition to these year-end dividends, Toyota may pay
interim dividends in the form of cash distributions from its distributable surplus to shareholders and pledgees ofrecord as of September 30 in each year by resolution of its board of directors. Toyota normally pays the interim
dividend in late November.
In addition, under the Corporation Act of Japan (the “Corporation Act”), dividends may be paid toshareholders and pledgees of record as of any 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. Such dividends
may be distributed by a resolution of any general shareholders’ meeting. Toyota’s articles of incorporation also
permit Toyota to pay dividends, in addition to interim dividends mentioned in the preceding paragraph, by aresolution of its board of directors. Toyota has incorporated such a provision into its articles of incorporation inorder to enable a flexible capital policy. Under the Corporation Act, dividends may be distributed in cash or(except in the case of interim dividends mentioned in the preceding paragraph) in kind, subject to limitations on
distributable surplus and to certain other conditions.
Dividends — Distributable amountUnder the Corporation Act, Toyota is permitted to make distribution 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 Corporation Act and the ordinance of the Ministry of Justice as at the effective date of such
distribution of surplus.
The amount of surplus at any given time shall be the amount of Toyota’s assets and the book value ofToyota’s treasury stock after subtracting and adding the amounts of the items provided for by the Corporation
Act and the ordinance of the Ministry of Justice.
Dividends — Prescription
Under its articles of incorporation, Toyota is not obligated to pay any dividends in cash which are left
unclaimed for a period of three years after the date on which they first became payable.
Capital Accounts
The amount of the cash or assets paid or contributed by subscribers for new shares (with certain exceptions)is required to be accounted for as stated capital, although Toyota may account for an amount not exceeding
one-half of such cash or assets as additional paid-in capital.
Under the Corporation 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 give85

public notice of certain matters two weeks prior to the effective date of the consolidation. Toyota must disclose
the reason for the consolidation of shares at a general shareholders’ meeting.
Japanese Unit Share System
General. Consistent with the requirements of the Corporation Act, Toyota’s articles of incorporation
provide that 100 shares constitute one “unit”. Although the number of shares constituting a unit is included in thearticles of incorporation, any amendment to the articles of incorporation reducing (but not increasing) the numberof shares constituting a unit or eliminating the provisions for the unit of shares may be made by a resolution of
the board of directors rather than by a special shareholders resolution, which is otherwise required for amending
the articles of incorporation. The number of shares constituting one unit, however, cannot exceed 1,000 shares.
Voting Rights under the Unit Share System. Under the unit share system, shareholders have one voting
right for each unit of shares that they hold. Any number of shares less than a full unit will carry no voting rights.
Purchase by Toyota of Shares Constituting Less Than a Unit. A holder of shares constituting less than afull unit may require Toyota to purchase those shares at their market value in accordance with the provisions of
Toyota’s share handling regulations.
Surrender of American Depositary Shares. ADR holders will only be permitted to surrender ADRs andwithdraw underlying shares constituting an integral number of a whole unit. If a holder surrenders an ADR
including ADRs representing shares that do not constitute an integral number of whole units, the depositary will
deliver to that holder only those shares which constitute a whole unit. The depositary will then issue to the holder
a new ADR representing the remaining shares. Holders of an ADR that represents less than a whole unit ofunderlying shares will be unable to withdraw the underlying shares. As a result, those holders will be unable torequire Toyota to purchase their shares to the extent those shares constitute less than one whole unit.
Voting Rights
Toyota holds its ordinary general shareholders’ meeting each year. In addition, Toyota may hold anextraordinary general shareholders’ meeting whenever necessary by giving at least two weeks’ advance notice.
Under the Corporation Act, notice of any shareholders’ meeting must be given to each shareholder having voting
rights or, in the case of a non-resident shareholder, to his or her resident proxy or mailing address in Japan inaccordance with Toyota’s share handling regulations, at least two weeks prior to the date of the meeting.
A holder of shares constituting one or more whole units is entitled to one vote per unit of shares subject tothe limitations on voting rights set forth in this paragraph. In general, under the Corporation Act, a resolution canbe adopted at a general shareholders’ meeting by a majority of the shares having voting rights represented at themeeting. The Corporation Act and Toyota’s articles of incorporation require a quorum for the election of
directors and corporate auditors of not less than one-third of the total number of outstanding shares having voting
rights. Toyota’s shareholders are not entitled to cumulative voting in the election of directors. A corporateshareholder, 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.
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
86their votes by a date specified in the convocation notice, following instructions appearing on the website.
Institutional investors may also use the Electronic Proxy Voting Platform operated by Investor Communications
Japan (ICJ) to exercise their voting rights through the use of the Internet, if such institutional investor applies to
use the platform in advance. Shareholders may also exercise their voting rights through proxies, provided thatthose proxies are also shareholders who have voting rights. Toyota may refuse a shareholder having two or more
proxies attend a general shareholders’ meeting.
The Corporation Act provides that a quorum of at least one-third of outstanding shares with voting rights
must be present at a shareholders’ meeting to approve any material corporate actions such as:(1) any amendment of the articles of incorporation with certain exceptions in which a shareholders’
resolution is not required;(2) acquisition of its own shares from a specific party;(3) consolidation of shares;(4) any issue or transfer of its shares at a “specially favorable” price (or any issue of stock acquisitionrights or bonds with stock acquisition rights at “specially favorable” conditions by Toyota) to any
persons other than shareholders;(5) the removal of a corporate auditor;(6) the exemption of liability of a director or corporate auditor with certain exceptions;(7) a reduction of stated capital which meets certain requirements with certain exceptions;(8) a distribution of in-kind dividends which meets certain requirements;(9) dissolution, merger, or consolidation with certain exceptions in which a shareholders’ resolution is
not required;(10) the transfer of the whole or a material part of the business;(11) the taking over of the entire business of any other corporation with certain exceptions in which ashareholders’ resolution is not required;(12) share exchange or share transfer for the purpose of establishing 100% parent-subsidiary
relationships with certain exceptions in which a shareholders’ resolution is not required; or(13) company split with certain exceptions in which a shareholders’ resolution is not required.
At least two-thirds of the shares having voting rights represented at the meeting must approve these actions.
The voting rights of holders of ADSs are exercised by the depositary based on instructions from those
holders.
Rights to be Allotted Shares
Holders of shares have no preemptive rights under Toyota’s articles of incorporation. Under the Corporation
Act, the board of directors may, however, determine that shareholders shall be given rights to be allotted sharesor stock acquisition rights on request, respectively, in connection with a particular issue or transfer of shares, orissue of stock acquisition rights. 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 transfer such rights.

87Liquidation Rights
In the event of a liquidation of Toyota, the assets remaining after payment of all debts, liquidation expenses
and taxes will be distributed among the shareholders in proportion to the respective number of shares they own.
Liability to Further Calls or Assessments
All of Toyota’s currently outstanding shares, including shares represented by the ADSs, are fully paid andnonassessable.
Transfer Agent
Mitsubishi UFJ Trust and Banking Corporation is the transfer agent for the shares. Mitsubishi UFJ Trust andBanking Corporation’s office is located at 4-5, Marunouchi 1-chome, Chiyoda-ku, Tokyo, 100-8212 Japan.
Mitsubishi UFJ Trust and Banking Corporation maintains Toyota’s register of shareholders and records transfersof record ownership upon receiving notification from JASDEC.
Record Date
The close of business on March 31 is the record date for Toyota’s year-end dividends, if paid. A holder ofshares constituting one or more whole units who is recorded or registered as a holder on Toyota’s register at theclose of business as of March 31 is also entitled to exercise shareholders’ voting rights at the ordinary generalshareholders’ meeting with respect to the business year ending on March 31. The close of business on
September 30 of each year is the record date for interim dividends, if paid. In addition, Toyota may set a record
date for determining the shareholders entitled to other rights and for other purposes by giving at least two weeks’prior public notice.
The shares generally trade ex-dividend or ex-rights in the Japanese stock exchanges on the third business
day before a record date (or if the record date is not a business day, the fourth business day prior thereto), for the
purpose of dividends or rights offerings. If the regulations of the Japanese stock exchanges are amended as
proposed, shares will generally trade ex-dividend or ex-rights in the Japanese stock exchanges on the second
business day before a record date (or if the record date is not a business day, the third business day prior thereto)for purpose of dividends or rights offerings, if the record date falls on or after November 19, 2009.
Acquisition by Toyota of Shares
Toyota may acquire its own shares (i) through a stock exchange on which such shares are listed or by wayof tender offer (pursuant to an ordinary resolution of a general shareholders’ meeting or a resolution of the boardof directors), (ii) by purchase from a specific party (pursuant to a special resolution of a general shareholders’meeting) or (iii) from a subsidiary of Toyota (pursuant to a resolution of the board of directors). When suchacquisition is made by Toyota from a specific party other than a subsidiary of Toyota, any other shareholder may
make a demand to a representative director, more than five calendar days prior to the relevant shareholders’meeting, that Toyota also purchase the shares held by such shareholder. However, the acquisition of its own
shares at a price not exceeding the market price to be provided under an ordinance of the Ministry of Justice will
not trigger the right of any shareholder to include him/her as the seller of his/her shares in such proposed
purchase.
Any such acquisition of shares must satisfy certain requirements that the total amount of the acquisition
price may not exceed the amount of the distributable dividends. See — “Dividends”.
Shares acquired by Toyota may be held by it for any period or may be cancelled by resolution of the boardof directors. Toyota may also transfer to any person the shares held by it, subject to a resolution of the board of88

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

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

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

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

In general, the acquisition of shares of a Japanese company (such as the shares of capital stock of Toyota)
by an exchange non-resident from a resident of Japan is not subject to any prior filing requirements. In certain
limited circumstances, however, the Minister of Finance may require prior approval of an acquisition of this type.
While prior approval, as described above, is not required, in the case where a resident of Japan transfers shares ofa Japanese company (such as the shares of capital stock of Toyota) for consideration exceeding ¥100 million toan exchange non-resident, the resident of Japan who transfers the shares is required to report the transfer to the
Minister of Finance within 20 days from the date of the transfer, unless the transfer was made through a bank,securities company or financial futures trader licensed under Japanese law.
If a foreign investor acquires shares of a Japanese company that is listed on a Japanese stock exchange (suchas the shares of capital stock of Toyota) and, as a result of the acquisition, the foreign investor, in combination
with any existing holdings, directly or indirectly holds 10% or more of the issued shares of the relevant company,
the foreign investor, with certain exceptions, must file a report of the acquisition with the Minister of Finance andany other competent Ministers having jurisdiction over that Japanese company within 15 days from andincluding the date of the acquisition. In limited circumstances, such as where the foreign investor is in a country
that is not listed on an exemption schedule in the Foreign Exchange Regulations, a prior notification of theacquisition must be filed with the Minister of Finance and any other competent Ministers, who may then modify
or prohibit the proposed acquisition.
Under the Foreign Exchange Regulations, dividends paid on, and the proceeds of sales in Japan of, shares
held by non-residents of Japan may in general be converted into any foreign currency and repatriated abroad.
Under the terms of the deposit agreement pursuant to which Toyota’s ADSs are issued, the Depositary is
required, to the extent that in its judgment it can convert yen on a reasonable basis into dollars and transfer the
resulting dollars to the United States, to convert all cash dividends that it receives in respect of deposited shares
into dollars and to distribute the amount received (after deduction of applicable withholding taxes) to the holders
of ADSs.
10.E TAXATION
The following discussion is a general summary of the principal U.S. federal income and Japanese national
tax consequences of the acquisition, ownership and disposition of shares of common stock or ADSs. Thissummary does not purport to address all material tax consequences that may be relevant to holders of shares ofcommon stock or ADSs, and does not take into account the specific circumstances of any particular investors,some of which (such as tax-exempt entities, banks, insurance companies, broker-dealers, traders in securities thatelect to use a mark-to-market method of accounting for their securities holdings, regulated investmentcompanies, real estate investment trusts, partnerships and other pass-through entities, investors liable for the U.S.
alternative minimum tax, investors that own or are treated as owning 10% or more of Toyota’s voting stock,investors that hold shares of common stock or ADSs as part of a straddle, hedge, conversion transaction or otherintegrated transaction and U.S. Holders (as defined below) whose functional currency is not the U.S. dollar) may
be subject to special tax rules. This summary is based on the tax laws and regulations of the United States andJapan, judicial decisions, published rulings and administrative pronouncements all as in effect on the date hereof,90

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

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

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

3.

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

4.

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

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

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

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

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

This summary does not address any aspects of U.S. federal tax law other than income taxation, and does notdiscuss any aspects of Japanese tax law other than such income taxation, as limited to national taxes, inheritanceand gift 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 andJapanese and other tax 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 discuss with 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 theassumption that each obligation in the deposit agreement, and in any related agreement, will be performed inaccordance with its terms.
In general, for purposes of the Treaty and for U.S. federal income and Japanese income tax purposes,
owners of ADRs evidencing ADSs will be treated as the owners of the shares of common stock represented bythose ADSs, and exchanges of shares of common stock for ADSs, and exchanges of ADSs for shares of common
stock, will not be subject to U.S. federal income or Japanese income tax.
The discussion below is intended for general information only and does not constitute a complete analysisof all tax consequences relating to ownership of shares of common stock or ADSs. Prospective purchasers ofshares of common stock or ADSs should consult their own tax advisors concerning the tax consequences of
their particular situations.
Japanese Taxation
The following is a summary of the principal Japanese tax consequences (limited to national taxes) to
non-residents of Japan or non-Japanese corporations without permanent establishments in Japan (“non-resident
Holders”) who are holders of shares of common stock or of ADSs.
Generally, non-resident Holders are subject to Japanese withholding tax on dividends paid by Japanese
corporations. Stock splits are, in general, not a taxable event.
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In the absence of an applicable tax treaty, convention or agreement reducing the maximum rate of Japanese
withholding tax or allowing exemption from Japanese withholding tax, the rate of Japanese withholding tax
applicable to dividends paid by Japanese corporations to non-resident Holders is generally 20 percent, provided,with respect to dividends paid on listed shares issued by a Japanese corporation (such as the shares of common
stock of Toyota) to non-resident Holders, other than any individual shareholder who holds 5 percent or more of
the total issued shares issued by the relevant Japanese corporation, the aforementioned 20 percent withholding
tax rate is reduced to (i) 7 percent for dividends due and payable on or before December 31, 2011, and (ii) 15
percent for dividends due and payable on or after January 1, 2012. At the date of this annual report, Japan has
income tax treaties, conventions or agreements whereby the above-mentioned withholding tax rate is reduced, inmost cases to 15 percent or 10 percent for portfolio investors (15 percent under the income tax treaties with,among other countries, Belgium, Canada, Denmark, Finland, Germany, Ireland, Italy, Luxembourg, theNetherlands, New Zealand, Norway, Singapore, Spain, Sweden and Switzerland, and 10 percent under theincome tax treaties with Australia, France, the U.K. and the United States.)
Under the Treaty, the maximum rate of Japanese withholding tax which may be imposed on dividends paidby a Japanese corporation to an Eligible U.S. Holder that is a portfolio investor is generally reduced to 10 percentof the gross amount actually distributed, and dividends paid by a Japanese corporation to an Eligible U.S. Holderthat is a pension fund are exempt from Japanese taxation by way of withholding or otherwise unless such
dividends are derived from the carrying on of a business, directly or indirectly, by such pension fund.
If the maximum tax rate provided for in the income tax treaty applicable to dividends paid by Toyota to any
particular non-resident Holder is lower than the withholding tax rate otherwise applicable under Japanese tax law
or if any particular non-resident Holder is exempt from Japanese income tax with respect to such dividends under
the income tax treaty applicable to such particular non-resident Holder, such non-resident Holder who is entitledto a reduced rate of or exemption from Japanese withholding tax on payment of dividends on shares of common
stock by Toyota is required to submit an Application Form for Income Tax Convention Regarding Relief fromJapanese Income Tax on Dividends (together with any other required forms and documents) in advance throughthe 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. With respect to ADSs, thisreduced rate or exemption is applicable if the Depositary or its agent submits two Application Forms (one before
payment of dividends, the other within eight months after the recording date concerning such payment ofdividends). To claim this reduced rate or exemption, any relevant non-resident Holder of ADSs will be required
to file a proof of taxpayer status, residence and beneficial ownership (as applicable) and to provide otherinformation or documents as may be required by the Depositary. A non-resident Holder who is entitled, under anapplicable income tax treaty, to a reduced treaty rate lower than the withholding tax rate otherwise applicable
under Japanese tax law or an exemption from the withholding tax, but failed to submit the required application inadvance, will be entitled to claim the refund of withholding taxes withheld in excess of the rate under anapplicable tax treaty (if such non-resident Holder is entitled to a reduced treaty rate under the applicable income
tax treaty) or the whole of the withholding tax withheld (if such non-resident Holder is entitled to an exemption
under the applicable income tax treaty) by complying with a certain subsequent filing procedure. Toyota does notassume 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 statedabove 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. Eligible U.S. Holders are not subject to Japanese income or corporation tax withrespect to such gains under the Treaty.
Japanese inheritance and gift taxes at progressive rates may be payable by an individual who has acquired
shares of common stock or ADSs as a legatee, heir or donee even though neither the individual nor the deceased
nor donor is a Japanese resident.
92Holders of shares of common stock or ADSs should consult their tax advisors regarding the effect of thesetaxes and, in the case of U.S. Holders, the possible application of the Estate and Gift Tax Treaty between the U.S.
and Japan.
U.S. Federal Income Taxation
U.S. Holders
The following discussion is a summary of the principal U.S. federal income tax consequences to U.S.
Holders that hold those shares of common stock or ADSs as capital assets (generally, for investment purposes).
Taxation of Dividends
Subject to the passive foreign investment company 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 us 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.
Under current law, dividends received on shares and ADSs of certain foreign corporations in taxable years
beginning before January 1, 2011 by non-corporate U.S. investors may be subject to U.S. federal income tax atlower 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 of Toyota are expected to beeligible for these reduced rates of tax. U.S. Holders should consult their own tax advisors regarding the eligibilityof such dividends for a reduced rate of tax.
The U.S. dollar amount of a dividend paid in Japanese yen will be determined based on the Japanese yen/
U.S. dollar exchange rate in effect on the date that the dividend is included in the gross income of the U.S.
Holder, regardless of whether the payment is converted into U.S. dollars on that date. Generally, any gain or loss
resulting from currency exchange fluctuations during the period from the date the dividend payment is includedin the gross income of a U.S. Holder through the date that payment is converted into U.S. dollars (or otherwise
disposed of) will be treated as U.S. source ordinary income or loss. U.S. Holders should consult their own tax
advisors regarding the calculation and U.S. federal income tax treatment of foreign currency gain or loss.
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 “general category income”. Subject to generally applicable limitations
under U.S. federal income tax law and the Treaty, any Japanese withholding tax imposed in respect of a Toyota
dividend may be claimed as a credit against the U.S. federal income tax liability of a U.S. Holder, or alternatively
as a deduction in the computation of such U.S. Holder’s taxable income, if the U.S. Holder does not elect to93

claim a credit for any foreign taxes paid or accrued for the taxable year. 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. The Internal Revenue Service (the “IRS”) has expressed concern that parties towhom ADSs are released may be taking actions that are inconsistent with the claiming of foreign tax credits by
U.S. Holders of ADSs. Accordingly, U.S. Holders should be aware that the discussion above regarding thecreditability of Japanese withholding tax on dividends could be affected by future actions that may be taken by
the IRS.
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 passive investment company rules discussed below, gain orloss recognized on the sale or other taxable disposition of shares of common stock or ADSs generally will becapital gain or loss and, if the U.S. Holder’s holding period for those shares or ADSs exceeds one year, will belong-term capital gain or loss. Non-corporate U.S. Holders, including individuals, 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, thededuction of capital losses is subject to limitations. Any gain or loss recognized by a U.S. Holder in respect of
the sale or other disposition of shares of common stock or ADSs generally will be treated as U.S. source income
or loss for U.S. foreign tax credit purposes.
Deposits and withdrawals of common stock in exchange for ADSs will not result in the realization of gainor loss for U.S. federal income tax purposes.
Passive Foreign Investment Companies
A non-U.S. corporation generally will be classified as a passive foreign investment company (a “PFIC”) for
U.S. federal income tax purposes in any taxable year in which, after applying look-through rules, either (1) atleast 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 andsecurities transactions. The PFIC determination is made annually and generally is based on the value of anon-U.S. corporation’s assets (including goodwill) and composition of its income.
Toyota does not believe that it is a PFIC for U.S. federal income tax purposes, and intends to continue its
operations in such a manner that it will not become a PFIC in the future. Because the PFIC determination is madeannually 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 maderegarding determination of its PFIC status in the current or any future taxable year. If Toyota is determined to be
a PFIC, U.S. Holders could be subject to additional U.S. federal income taxes on gain recognized with respect to94the shares of common stock or ADSs and on 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 us
will not be eligible for the reduced U.S. federal income tax rates on dividends described above if we are a PFIC
either in the taxable year of the dividend or the preceding taxable year. 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
holders 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, is 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 fixedbase of such Non-U.S. Holder), or(ii) the Non-U.S. Holder is an individual who was present in the United States for 183 or more days in the
taxable year of the disposition and other conditions are met.
Income that is effectively connected with a U.S. trade or business of a Non-U.S. Holder, and, if an income
tax treaty applies and so requires, is attributable to a U.S. permanent establishment or fixed base of the Non-U.S.
Holder, generally will be taxed in the same manner as the income of a U.S. Holder. In addition, under certain
circumstances, any effectively connected earnings and profits that is realized by a corporate Non-U.S. Holder
may be subject to an additional “branch profits tax” at the rate of 30% or at a lower rate that may be prescribedby an applicable 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, a backup withholding
tax may apply to those amounts (currently at a 28% rate) if a U.S. Holder fails to provide an accurate tax
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
in 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.
95

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 (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.
THE SUMMARY OF U.S. FEDERAL INCOME AND JAPANESE NATIONAL TAX CONSEQUENCESSET OUT ABOVE IS INTENDED FOR GENERAL INFORMATION PURPOSES ONLY. PROSPECTIVE
PURCHASERS OF COMMON STOCK OR ADSs ARE URGED TO CONSULT WITH THEIR OWN TAXADVISORS WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF OWNING ORDISPOSING OF COMMON STOCK OR ADSs, BASED ON THEIR PARTICULAR CIRCUMSTANCES.
10.F DIVIDENDS AND PAYING AGENTS
Not applicable.
10.G STATEMENT BY EXPERTS
Not applicable.
10.H DOCUMENTS ON DISPLAY
Toyota files annual reports on Form 20-F and reports on Form 6-K with the SEC. You may read and copy
this information at the SEC’s Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C.
20549 or by accessing the SEC’s home page (http://www.sec.gov). You can also request copies of the
documents, upon payment of a duplicating fee, by writing to the Public Reference Section of the SEC. Please callthe SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room. In addition,
Toyota’s reports, proxy statements and other information may be inspected at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005. Copies of the documents referred to herein may also beinspected at Toyota’s offices by contacting Toyota at 1 Toyota-cho, Toyota City, Aichi Prefecture 471-8571,
Japan, attention: Financial Reporting Department, Accounting Division, telephone number: 81-565-28-2121.
10.I SUBSIDIARY INFORMATION
Not applicable.
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market Risk Disclosures
Toyota is exposed to market risk from changes in foreign currency exchange rates, interest rates, certain
commodity and equity security prices. In order to manage the risk arising from changes in foreign currency
exchange rates and interest rates, Toyota enters into a variety of derivative financial instruments.
A description of Toyota’s accounting policies for derivative instruments is included in note 2 to theconsolidated financial statements and further disclosure is provided in notes 20 and 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.
96

The financial instruments included in the market risk analysis consist of all of Toyota’s cash and cash
equivalents, marketable securities, finance receivables, securities investments, long-term and short-term debt andall derivative financial instruments. Toyota’s portfolio of derivative financial instruments consists of forward
foreign currency exchange contracts, foreign currency options, interest rate swaps, interest rate currency swap
agreements and interest rate options. Anticipated transactions denominated in foreign currencies that are coveredby Toyota’s derivative hedging are not included in the market risk analysis. Although operating leases are notrequired to be included, Toyota has included these instruments in determining interest rate risk.
Foreign Currency Exchange Rate Risk
Toyota has foreign currency exposures related to buying, selling and financing in currencies other than thelocal currencies in which it operates. Toyota is exposed to foreign currency risk related to future earnings orassets and liabilities that are exposed due to operating cash flows and various financial instruments that are
denominated in foreign currencies. Toyota’s most significant foreign currency exposures relate to the U.S. dollar
and the euro.
Toyota uses a value-at-risk analysis (“VAR”) to evaluate its exposure to changes in foreign currency
exchange rates. The VAR of the combined foreign exchange position represents a potential loss in pre-tax
earnings that was estimated to be ¥44.3 billion as of March 31, 2008 and ¥114.1 billion as of March 31, 2009.
Based on Toyota's overall currency exposure (including derivative positions), the risk during the year ended
March 31, 2009 to pre-tax cash flow from currency movements was on average ¥126.0 billion, with a high of¥158.9 billion and a low of ¥97.1 billion.
The VAR was estimated by using a Monte Carlo Simulation Method and assumed 95% confidence level on
the realization date and a 10-day holding period.
Interest Rate Risk
Toyota is subject to market risk from exposures to changes in interest rates based on its financing, investing
and cash management activities. Toyota enters into various financial instrument transactions to maintain thedesired level of exposure to the risk of interest rate fluctuations and to minimize interest expense. The potential
decrease in fair value resulting from a hypothetical 100 basis point upward shift in interest rates would beapproximately ¥110.6 billion as of March 31, 2008 and ¥55.8 billion as of March 31, 2009.
There are certain shortcomings inherent to the sensitivity analyses presented. The model assumes thatinterest rate changes are instantaneous parallel shifts in the yield curve. However, in reality, changes are rarely
instantaneous. Although certain assets and liabilities may have similar maturities or periods to repricing, they
may not react correspondingly to changes in market interest rates. Also, the interest rates on certain types ofassets and liabilities may fluctuate with changes in market interest rates, while interest rates on other types ofassets may lag behind changes in market rates. Finance receivables are less susceptible to prepayments wheninterest rates change and, as a result, Toyota’s model does not address prepayment risk for automotive related
finance receivables. However, in the event of a change in interest rates, actual loan prepayments may deviatesignificantly from the assumptions used in the model.
Commodity Price Risk
Commodity price risk is the possibility of higher or lower costs due to changes in the prices of commodities,
such as non-ferrous alloys (e.g., aluminum), precious metals (e.g., palladium, platinum and rhodium) and ferrous
alloys, which Toyota uses in the production of motor vehicles. Toyota does not use derivative instruments tohedge the price risk associated with the purchase of those commodities and controls its commodity price risk byholding minimum stock levels.

97

Equity Price Risk
Toyota holds investments in various available-for-sale equity securities that are subject to price risk. The
fair value of available-for-sale equity securities was ¥1,177.0 billion as of March 31, 2008 and ¥798.2 billion asof March 31, 2009. The potential change in the fair value of these investments, assuming a 10% change in prices,would be approximately ¥117.7 billion as of March 31, 2008 and ¥79.8 billion as of March 31, 2009.
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
Not applicable.

98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) DISCLOSURES CONTROLS AND PROCEDURES
Toyota performed an evaluation of the effectiveness of the design and operation of its disclosure controls
and procedures as of the end of the fiscal 2009. Disclosure controls and procedures are designed to ensure thatthe material financial and non-financial 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 and financial officer. The disclosure controls and procedures also ensuresthat the Form 20-F that it files under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the Commission’s rules and forms. The evaluation was performed under thesupervision of Toyota’s Chairman of the Board and the Executive Vice President. Toyota’s disclosures controls
and procedures are designed to provide reasonable assurance of achieving its objectives. Managerial judgment
was necessary to evaluate the cost-benefit relationship of possible controls and procedures. The Chairman of theBoard and the Executive Vice President 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 U.S. GAAP. Toyota’s internal control over financial reporting includes those policies andprocedures that:(i) pertain to the maintenance of records that in reasonable detail, accurately and fairly reflect thetransactions and dispositions of Toyota’s assets;(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with U.S. GAAP, and that Toyota’s receipts and expenditures are being madeonly in accordance with authorizations of Toyota’s management and directors; and(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use,
or disposition of Toyota’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with thepolicies or procedures may deteriorate.
Toyota’s management conducted an evaluation of the effectiveness of internal control over financial
reporting based on the framework in “Internal Control — Integrated Framework” issued by the Committee ofSponsoring Organizations of the Treadway Commission.
99Based on this evaluation, management concluded that Toyota’s internal control over financial reporting was
effective as of March 31, 2009.
PricewaterhouseCoopers Aarata, an independent registered public accounting firm that audited theconsolidated financial statements included in this report, has also audited the effectiveness of Toyota’s internal
control over financial reporting as of March 31, 2009, as stated in its report included herein.
(c) ATTESTATION REPORT OF THE REGISTERED PUBLIC ACCOUNTING FIRM
Toyota’s independent registered public accounting firm, PricewaterhouseCoopers Aarata, has issued an
audit report on the effectiveness of Toyota’s internal control over financial reporting. This report appears in
Item 18.
(d) CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There have been no changes in Toyota’s internal control over financial reporting during fiscal 2009 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 a corporate auditor system, in accordance with the Corporation Act. Toyota’s board ofcorporate auditors is comprised of seven corporate auditors, four of whom are outside corporate auditors. Eachcorporate auditor has been appointed at Toyota’s shareholders’ meetings and has certain statutory powers
independently, including auditing the business affairs and accounts of Toyota.
Toyota’s board of corporate auditors has determined that it does not have an “audit committee financial
expert” serving on the board of corporate auditors. The qualifications for, and powers of, the corporate auditor
delineated in the Corporation Act is different from those anticipated for any audit committee financial expert.
Corporate auditors have the authority to be given reports from a certified public accountant or an accounting firm
concerning audits, including technical accounting matters. At the same time, each corporate auditor has theauthority to consult internal and external experts on accounting matters. Each corporate auditor must fulfill therequirements under Japanese laws and regulations and otherwise follow Japanese corporate governance practices
and, accordingly, Toyota’s board of corporate auditors has confirmed that it is not necessarily in Toyota’s bestinterest to nominate as corporate auditor a person who meets the definition of audit committee financial experts.
Although Toyota does not have an audit committee financial expert on its board of corporate auditors, Toyota
believes that Toyota’s current corporate governance system, taken as a whole, including the corporate auditors’ability to consult internal and external experts, is fully equivalent to a system having an audit committee financial
expert on its board of corporate auditors.
ITEM 16B. CODE OF ETHICS
Toyota has adopted a code of ethics that applies to its directors and managing officers, including its
principal executive officer, principal financial officer, principal accounting officer or controller, or persons
performing similar functions. A copy of Toyota’s code of ethics is included as an exhibit to this annual report on
Form 20-F.

100

ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
PricewaterhouseCoopers Aarata has audited the financial statements of Toyota included in this annual reporton Form 20-F.
The following table presents the aggregate fees for professional services and other services rendered byPricewaterhouseCoopers Aarata and the various network and member firms of PricewaterhouseCoopers to
Toyota in fiscal 2008 and fiscal 2009.
Yen in millions
2008
2009

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

3,619
139
833
122
4,713

3,539
76
702
86
4,403

(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, quarter reviews and assessment and reviews of the effectiveness of internal controls over financial
reporting of Toyota and its subsidiaries and affiliates; the services associated with SEC registration
statements or other documents issued in connection with securities offerings such as comfort letters andconsents; 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 the services such as due diligence; agreed-upon or expanded audit
procedures; internal control reviews and assistance; review of the effectiveness of the internal audit
function; assistance with implementation of the requirements of SEC rules pursuant to the Sarbanes-Oxley
Act; financial statement audits of employee benefit plans.
(3) Tax Fees include fees billed for tax compliance services, including the services such as tax planning, advice
and compliance of federal, state, local and international tax; the review of tax returns; assistance with tax
audits and appeals; tax only valuation services including transfer pricing and cost segregation studies;
expatriate tax assistance and compliance.
(4) All Other Fees primarily include fees billed for risk management advisory services of assessment andtesting of security infrastructure controls; advisory services relating to accounting manual and accounting
control; advisory services relating to establishment of a new subsidiary; assistance with continuing
education and training; services providing information related to automotive market conditions and sales
networks.
Policies and Procedures of the Board of Corporate Auditors
Below is a summary of the current policies and procedures of the board of corporate auditors for the
pre-approval of audit and permissible non-audit services performed by Toyota’s independent public accountants.
Under the policy, the Representative Directors submit a request for general pre-approval of audit andpermissible non-audit services for the following fiscal year, which shall include details of the specific services
and estimated fees for the services, to the board of corporate auditors, which reviews and determines whether or
not to grant the request by the end of March of the fiscal year. Upon the general pre-approval of the board ofcorporate auditors, the Representative Directors are not required to obtain any specific pre-approval for audit andpermissible non-audit services so long as those services fall within the scope of the general pre-approval
provided.
The board of corporate auditors makes further determination of whether or not to grant a request to revise
the general pre-approval for the applicable fiscal year if such request is submitted by the Representative Directors
101

or the Managing Officer authorized by the Representative Director. 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, which are listed in the general pre-approval but of which the total fee amount exceeds the amountaffirmed by the general pre-approval. The determination of whether or not to grant a request to revise the generalpre-approval noted in the foregoing may alternatively be made by an Executive Corporate Auditor, who isdesignated in advance by a resolution of the board of corporate auditors, in which case such Executive Corporate
Auditor shall report such decision at the next meeting of the board of corporate auditors. The performance ofaudit and permissible non-audit services and the payment of fees are subject to review by the board of corporate
auditors at least once every fiscal half year.
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Toyota does not have an audit committee. Toyota is relying on the general exemption contained inRule 10A-3(c)(3) under the Exchange Act, which provides an exemption from the NYSE’s listing standards
relating to audit committees for foreign companies like Toyota that have a board of corporate auditors. Toyota’s
reliance on Rule 10A-3(c)(3) does not, in its opinion, materially adversely affect the ability of its board ofcorporate auditors 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 2009:

Period(a) Total
Number of
SharesPurchased(1)(b) Average
Price Paid
per Share(Yen)(c) Total
Number of
SharesPurchased as
Part of
Publicly
Announced
Plans or
Programs(2)April 1, 2008 – April 30, 2008 . . . . . . . . . . .
May 1, 2008 – May 31, 2008 . . . . . . . . . . . .
June 1, 2008 – June 30, 2008 . . . . . . . . . . . .
July 1, 2008 – July 31, 2008 . . . . . . . . . . . . .
August 1, 2008 – August 31, 2008 . . . . . . . .
September 1, 2008 – September 30, 2008 . .
October 1, 2008 – October 31, 2008 . . . . . .
November 1, 2008 – November 30, 2008 . .
December 1, 2008 – December 31, 2008 . . .
January 1, 2009 – January 31, 2009 . . . . . . .
February 1, 2009 – February 28, 2009 . . . . .
March 1, 2009 – March 31, 2009 . . . . . . . . .

4,058
5,765
8,217
14,72315,028,733
10,600150,168
10,541
17,8752,712
5,870
11,0355,074.47
5,318.38
5,460.01
4,898.25
4,979.40
4,812.33
4,340.97
3,598.30
2,879.06
2,921.14
3,054.86
3,013.090000
14,016,700
0
0
0
0
0
0
0

0
0
0
30,000,000
15,983,300
15,983,300
15,983,300
15,983,300
15,983,300
15,983,300
15,983,300
15,983,300

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

15,270,297—

14,016,700—(d) Maximum
Number of
Shares thatMay Yet Be
Purchased
Under
the Plans or
Programs(2)(1) All purchases other than purchases publicly announced were made as a result of holders of sharesconstituting less than one unit, which is 100 shares of common stock, requesting Toyota to purchase sharesthat are a fraction of a unit, in accordance with Toyota’s share handling regulations. Toyota is required tocomply with such requests pursuant to the Corporation Act (or until the Corporation Act became effective,
the Commercial Code). See “Memorandum and Articles of Association — Japanese Unit Share System.”(2) On June 24, 2008, share repurchases were approved at the ordinary general shareholders’ meeting pursuant
to which Toyota may purchase during a one-year period until the next ordinary general shareholders’102meeting up to the lesser of 30,000,000 shares of common stock or the number of shares equivalent to¥200.0 billion in cost of repurchase. For a discussion of past and current share repurchases, see “Business
Overview — Toyota’s Strategy — Focus on Shareholder Value.”
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 NYSE, Toyota is permitted to follow certain
corporate governance practices complying with Japanese laws, regulations and stock exchange rules in lieu of
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 board of corporate auditors 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 of material non-compliance with (a) and (b), and(d) Toyota must submit annual and interim written affirmations to the NYSE. Toyota’s corporate governancepractices and those followed by domestic companies under the NYSE Corporate Governance Rules have thefollowing significant differences:
1. Directors. Toyota currently does not have any directors who will be deemed as an “independent director”
as required under the NYSE Corporate Governance Rules for U.S. listed companies. Unlike the NYSE Corporate
Governance Rules, the Corporation Act does not require Japanese companies with a board of corporate auditors
such as Toyota to have any independent directors on its board of directors. While the NYSE Corporate
Governance Rules require that the non-management directors of each listed company meet at regularly scheduled
executive sessions without management, Toyota currently has no non-management director on its board of
directors. Unlike the NYSE Corporate Governance Rules, the Corporation Act does not require, and accordingly
Toyota does not have, an internal corporate organ or committee comprised solely of independent directors.
2. Committees. Under the Corporation Act, Toyota has elected to structure its corporate governance system
as a company with corporate auditors, who are under a statutory duty to monitor, review and report on the
management of the affairs of Toyota. Toyota, as with other Japanese companies with a board of corporate
auditors, but unlike U.S. listed companies subject to the NYSE Corporate Governance Rules, does not havespecified committees, including those that are responsible for director nomination, corporate governance andexecutive compensation.
Pursuant to the Corporation Act, Toyota’s board of directors nominates and submits a proposal for theappointment of directors for shareholder approval. The shareholders vote on such nomination at the generalshareholders’ meeting. The Corporation Act requires that the respective limits or calculation formula, and kind(in case that the remuneration, bonus and any other benefits in compensation for the execution of duties(“remuneration, etc.”) are to be paid in other than cash) of remuneration, etc. to be paid to directors, and limits ofremuneration, etc. to be paid to corporate auditors, must be determined by a resolution of the generalshareholders’ meeting, unless their remuneration, etc. is provided for in the articles of incorporation. The
distribution of remuneration, etc. among each director is broadly delegated to the board of directors and the
distribution of remuneration among each corporate auditor is determined by consultation among the corporate
auditors.
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 a board ofcorporate auditors, subject to certain requirements which continue to be applicable under Rule 10A-3.
103

Pursuant to the requirements of the Corporation Act, Toyota elects its corporate auditors through a
resolution adopted at a general shareholders’ meeting. Toyota currently has seven corporate auditors, which
exceeds the minimum number of corporate auditors required pursuant to the Corporation Act.
Unlike the NYSE Corporate Governance Rules, the Corporation Act, among others, do not require corporate
auditors to establish an expertise in accounting nor are they required to present other special knowledge andexperience. Under the Corporation Act, the board of corporate auditors may determine the auditing policies andmethods of investigating the conditions of Toyota’s business and assets, and may resolve other mattersconcerning the execution of the corporate auditor’s duties. The board of corporate auditors also prepares
auditors’ reports and gives consent to proposals of the nomination of corporate auditors and accounting auditors.
Toyota currently has four outside corporate auditors under the Corporation Act. Under the Corporation Act,at least half of the corporate auditors of Toyota must be “outside” corporate auditors, which is such person who
was not a director, accounting counselor (in case that an accounting counselor is a judicial person, a member ofsuch judicial person who is in charge of its affairs), executive officer, manager, or employee of Toyota or its
subsidiaries at any time during the past. Such qualifications for an “outside” corporate auditor are different fromthe audit committee independence requirement under the NYSE Corporate Governance Rules.
4. Corporate Governance Guidelines. Unlike the NYSE Corporate Governance Rules, Toyota is not
required to adopt corporate governance guidelines under Japanese laws and regulations, including the
Corporation Act and the Financial Instruments and Exchange Law of Japan or stock exchange rules. However,Toyota is required to resolve the matters at the board of directors concerning provision of the system to ensure
the execution of duties of the directors to comply with the laws, regulations and the articles of incorporation, andany other systems to ensure the adequacy of the business required under the ordinance of the Ministry of Justice(“internal control system” or “naibu-tosei”), and to disclose such matters resolved, policies and the present statusof its corporate governance in its business reports, annual securities report and certain other disclosure documentsin accordance with the regulations under the Financial Instruments and Exchange Law and stock exchange rules
in respect of timely disclosure.
5. Code of Business Conduct and Ethics. Unlike the NYSE Corporate Governance Rules, under Japaneselaws and regulations including the Corporation Act and the Financial Instruments and Exchange Law or stock
exchange rules, Toyota is not required to adopt a code of business conduct and ethics for directors, officers andemployees. Accordingly, Toyota is not required to adopt and disclose waivers of the code of business conduct
and ethics for these individuals. However, Toyota resolved the matters concerning provision of the system toensure the execution of duties of the employees to comply with the laws, regulations and the articles ofincorporation, etc. as “internal control system” or “naibu-tosei” pursuant to the Corporation Act, maintains
guidelines and internal regulations such as “Guiding Principles at Toyota”, “Toyota Code of Conduct” and a codeof ethics pursuant to Section 406 of the Sarbanes-Oxley Act. Please see “Code of Ethics” for additional
information.
6. Shareholder Approval of Equity Compensation Plans. Unlike the NYSE Corporate Governance Rules,
under which material revisions to equity-compensation plans of listed companies are subject to shareholder
approval, pursuant to the Corporation Act, generally, the adoption of equity compensation plans for directors is
required to be approved by a majority of shareholders at the general shareholders’ meeting as the remuneration,etc. in other than cash. In addition to such approval, if Toyota desires to adopt an equity-compensation plan underwhich stock acquisition rights are granted on specially favorable terms to the recipient (except where such rights
are granted to all of its shareholders on a pro-rata basis at the same time), then Toyota obtains approval by supermajority (as defined in the Corporation Act) at the ordinary general shareholders’ meeting. Such approval isapplicable only to stock acquisition rights to be granted within one year from the date of the approval.

104

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.

105

TOYOTA MOTOR CORPORATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page

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

F-2

Consolidated balance sheets at March 31, 2008 and 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-3

Consolidated statements of income for the years ended
March 31, 2007, 2008 and 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-5

Consolidated statements of shareholders’ equity for the years ended
March 31, 2007, 2008 and 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-6

Consolidated statements of cash flows for the years ended
March 31, 2007, 2008 and 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-8

Notes to consolidated financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F - 10All financial statement schedules are omitted because they are not applicable or the required information isshown in the financial statements or the notes thereto.
Financial statements of 50% or less owned persons accounted for by the equity method have been omitted
because the registrant’s proportionate share of the income from continuing operations before income taxes is lessthan 20% of consolidated income (loss) from continuing operations before income taxes and the investment inand advances to each company is less than 20% of consolidated total assets.

F-1

Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of
Toyota Jidosha Kabushiki Kaisha(“Toyota Motor Corporation”)
In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in allmaterial respects, the financial position of Toyota Motor Corporation and its subsidiaries at March 31, 2008 and2009, and the results of their operations and their cash flows for each of the three years in the period ended
March 31, 2009 in conformity with accounting principles generally accepted in the United States of America.
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial
reporting as of March 31, 2009, based on criteria established in Internal Control—Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s
management is responsible for these financial statements, for maintaining effective internal control over financial
reporting and for its assessment of the effectiveness of internal control over financial reporting, included inManagement’s Annual Report on Internal Control Over Financial Reporting appearing under Item 15(b). Our
responsibility is to express opinions on these financial statements and on the Company’s internal control overfinancial reporting based on our integrated audits. We conducted our audits in accordance with the standards of
the Public Company Accounting Oversight Board (United States). Those standards require that we plan andperform the audits to obtain reasonable assurance about whether the financial statements are free of material
misstatement and whether effective internal control over financial reporting was maintained in all material
respects. Our audits of the financial statements included examining, on a test basis, evidence supporting theamounts and disclosures in the financial statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal
control over financial reporting included obtaining an understanding of internal control over financial reporting,assessing the risk that a material weakness exists, and testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk. Our audits also included performing such otherprocedures as we considered necessary in the circumstances. We believe that our audits provide a reasonablebasis for our opinions.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financial statements in accordancewith generally accepted accounting principles, and that receipts and expenditures of the company are being madeonly in accordance with authorizations of management and directors of the company; and (iii) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of thecompany’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with thepolicies or procedures may deteriorate.
/s/ PricewaterhouseCoopers Aarata
Nagoya, Japan
June 23, 2009

F-2

TOYOTA MOTOR CORPORATIONCONSOLIDATED BALANCE SHEETSASSETS
Yen in millions
March 31,
2008
2009

Current assets
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Time deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade accounts and notes receivable, less allowance for doubtful
accounts of ¥17,471 million in 2008 and ¥15,034 million($153 million) in 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . .

U.S. dollars
in millions
March 31,2009

¥ 1,628,547
134,773542,210¥ 2,444,280
45,178495,326$ 24,883
460
5,043

2,040,233
4,301,142
523,533
1,825,716
563,220
526,853

1,392,749
3,891,406
332,722
1,459,394
605,331
632,543

14,17939,615
3,387
14,857
6,162
6,439

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

12,086,227

11,298,929

115,025

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

5,974,756

5,655,545

57,575Investments and other assets
Marketable securities and other securities investments . . . . . . . . .
Affiliated companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employees receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,429,238
2,098,556
70,776
986,765

2,102,874
1,826,375
69,523
707,110

21,40818,593708
7,198

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

6,585,335

4,705,882

47,907

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

1,262,034
3,580,607
9,270,650
2,922,325
360,620

1,257,409
3,633,954
9,201,093
2,836,881
263,60212,801
36,994
93,66928,8802,683

Less - Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . .

17,396,236(9,584,234)

17,192,939(9,791,258)

175,027(99,677)

Property, plant and equipment, net . . . . . . . . . . . . . . . . . . . . .

7,812,002

7,401,681

75,350Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥32,458,320¥29,062,037$295,857

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

TOYOTA MOTOR CORPORATIONCONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS’ EQUITY
Yen in millions
March 31,
2008
2009

U.S. dollars
in millions
March 31,2009

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

¥ 3,552,721
2,675,431
2,212,773
806,514
1,606,964
305,592
780,747¥ 3,617,672
2,699,512
1,299,455
670,634
1,540,681
51,298710,041$ 36,829
27,482
13,2296,827
15,684522
7,228

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

11,940,742

10,589,293

107,801

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

5,981,931
632,297
1,099,006
278,150

6,301,469
634,612642,293
293,633

64,150
6,461
6,539
2,989

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

7,991,384

7,872,007

80,139Minority interest in consolidated subsidiaries . . . . . . . . . . . . . . . . . .

656,667

539,530

5,492

397,050
497,569
12,408,550(241,205)

397,050
501,211
11,531,622(1,107,781)

4,042
5,102
117,394(11,277)(1,192,437)(1,260,895)(12,836)

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

11,869,527

10,061,207

102,425

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

¥32,458,320¥29,062,037$295,857

Shareholders’ equity
Common stock, no par value,authorized: 10,000,000,000 shares in 2008 and 2009;
issued: 3,447,997,492 shares in 2008 and 2009 . . . . . . . . . . . . .
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive income (loss) . . . . . . . . . . . . .
Treasury stock, at cost, 298,717,640 shares in 2008 and
312,115,017 shares in 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

TOYOTA MOTOR CORPORATIONCONSOLIDATED STATEMENTS OF INCOME
Yen in millions

For the years ended March 31,
2007
2008
2009

Net revenues
Sales of products . . . . . . . . . . . . . . . . . . . . . . . . . .
Financing operations . . . . . . . . . . . . . . . . . . . . . . .

U.S. dollars
in millions
For the year
ended
March 31,2009

¥22,670,097
1,277,994¥24,820,510
1,468,730¥19,173,720
1,355,850$195,192
13,80323,948,091

26,289,240

20,529,570

208,995

18,356,255
872,138
2,481,015

20,452,338
1,068,015
2,498,512

17,468,416
987,384
2,534,781

177,832
10,05225,80421,709,408

24,018,865

20,990,581

213,688

Operating income (loss) . . . . . . . . . . . . . . . . .

2,238,683

2,270,375(461,011)(4,693)

Other income (expense)
Interest and dividend income . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange gain (loss), net . . . . . . . . . . . . . .
Other income (loss), net . . . . . . . . . . . . . . . . . . . . .

131,939(49,326)
33,00528,215

165,676(46,113)
9,172
38,112

138,467(46,882)(1,815)(189,140)

1,410
(477)
(19)
(1,926)

143,833

166,847(99,370)(1,012)

Income (loss) before income taxes, minority interest
and equity in earnings of affiliated companies . . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . .

2,382,516
898,3122,437,222
911,495(560,381)(56,442)(5,705)(575)

Income (loss) before minority interest and equity inearnings of affiliated companies . . . . . . . . . . . . . . . .
Minority interest in consolidated subsidiaries . . . . . . . .
Equity in earnings of affiliated companies . . . . . . . . . . .

1,484,204(49,687)
209,515

1,525,727(77,962)
270,114(503,939)
24,27842,724(5,130)247
435

Net income (loss) . . . . . . . . . . . . . . . . . . . . . .

¥ 1,644,032¥ 1,717,879

Costs and expenses
Cost of products sold . . . . . . . . . . . . . . . . . . . . . . .
Cost of financing operations . . . . . . . . . . . . . . . . . .
Selling, general and administrative . . . . . . . . . . . .

¥ (436,937) $ (4,448)

Yen

U.S. dollars

Net income (loss) per share- Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥512.09¥540.65¥(139.13) $(1.42)- Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥511.80¥540.44¥(139.13) $(1.42)Cash dividends per share . . . . . . . . . . . . . . . . . . . . . .

¥120.00¥140.00¥100.00

1.02

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

TOYOTA MOTOR CORPORATIONCONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Commonstock

Additional
paid-in
capitalYen in millions
Accumulated
other
Retained
comprehensive
earnings
income (loss)

Balances at March 31, 2006 . . . . . . . . . . . . . ¥397,050 ¥495,250 ¥10,459,788 ¥Issuance during the year . . . . . . . . . . . . . . . . . .
Comprehensive income
Net income . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income
Foreign currency translation
adjustments . . . . . . . . . . . . . . . . . .
Unrealized gains on securities, netof reclassification adjustments . . .
Minimum pension liability
adjustments . . . . . . . . . . . . . . . . . .

Treasurystock,
at cost437,316 ¥(1,228,955) ¥10,560,449

2,343

2,343
1,644,032

1,644,032

130,746

130,746

38,80038,800

3,499

3,499

Total comprehensive income . . . . . . . . . .

1,817,077

Adjustment to initially apply FAS No. 158 . . .
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase and reissuance of common stock . . .
Balances at March 31, 2007 . . . . . . . . . . . . .

91,029(339,107)(295,699)
397,050Issuance during the year . . . . . . . . . . . . . . . . . .
Comprehensive income
Net income . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss)
Foreign currency translation
adjustments . . . . . . . . . . . . . . . . . .
Unrealized losses on securities, netof reclassification adjustments . . .
Pension liability adjustments . . . . . .

497,593

11,764,713

701,390

3,475

3,475
1,717,879

1,717,879(461,189)(461,189)(347,829)(133,577)(347,829)(133,577)
775,284

Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase and reissuance of common stock . . .
Retirement of common stock . . . . . . . . . . . . . .
Issuance during the year . . . . . . . . . . . . . . . . . .
Comprehensive loss
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss)
Foreign currency translation
adjustments . . . . . . . . . . . . . . . . . .
Unrealized losses on securities, netof reclassification adjustments . . .
Pension liability adjustments . . . . . .

91,029(339,107)(295,699)(1,524,654) 11,836,092

Total comprehensive income . . . . . . . . . .

Balances at March 31, 2008 . . . . . . . . . . . . .

Totalshareholders’equity(430,860)

397,050(3,499)(643,182)

497,569

12,408,550(314,464)
646,681(241,205)(430,860)(314,464)—(1,192,437) 11,869,527

3,642

3,642
(436,937)(436,937)(381,303)(381,303)(293,101)(192,172)(293,101)(192,172)

Total comprehensive loss . . . . . . . . . . . . .

(1,303,513)

Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase and reissuance of common stock . . .

(439,991)(68,458)(439,991)(68,458)

Balances at March 31, 2009 . . . . . . . . . . . . . ¥397,050 ¥501,211 ¥11,531,622 ¥(1,107,781) ¥(1,260,895) ¥10,061,207

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

TOYOTA MOTOR CORPORATIONCONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (CONTINUED)

Commonstock

Balances at March 31, 2008 . . . . . . . . . . . . . $4,042

Additional
paid-in
capitalU.S. dollars in millions
Accumulated
other
Treasury
Total
Retained comprehensive
stock,
shareholders’earnings
income (loss)
at costequity$5,065 $126,321

Issuance during the year . . . . . . . . . . . . . . . . .
Comprehensive loss
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss)
Foreign currency translation
adjustments . . . . . . . . . . . . . . . . .
Unrealized losses on securities, netof reclassification adjustments . . .
Pension liability adjustments . . . . . .

$ (2,455) $(12,139) $120,834

37

37(4,448)(4,448)(3,882)(3,882)(2,984)(1,956)(2,984)(1,956)

Total comprehensive loss . . . . . . . . . . . .

(13,270)

Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase and reissuance of common stock . . .

(4,479)(697)

Balances at March 31, 2009 . . . . . . . . . . . . . $4,042$5,102 $117,394$(11,277) $(12,836) $102,425

The accompanying notes are an integral part of these consolidated financial statements.
F-7(4,479)(697)

TOYOTA MOTOR CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS
Yen in millions

For the years ended March 31,
2007
2008
2009

U.S. dollars
in millions
For the year
ended
March 31,2009

Cash flows from operating activities
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 1,644,032 ¥ 1,717,879 ¥ (436,937) $ (4,448)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,382,594
1,491,135
1,495,170
15,221
Provision for doubtful accounts and credit
losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
71,862
122,790
257,433
2,621
Pension and severance costs, less payments . . . . .
(32,054)(54,341)(20,958)(213)
Losses on disposal of fixed assets . . . . . . . . . . . . .
50,47245,437
68,682
699
Unrealized losses on available-for-salesecurities, net . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,614
11,346
220,920
2,249
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . .
132,308
81,458(194,990)(1,985)
Minority interest in consolidated subsidiaries . . .
49,687
77,962(24,278)(247)
Equity in earnings of affiliated companies . . . . . .
(209,515)(270,114)(42,724)(435)
Changes in operating assets and liabilities, andother(Increase) decrease in accounts and notes
receivable . . . . . . . . . . . . . . . . . . . . . . . . .
(212,856)(206,793)
791,481
8,057(Increase) decrease in inventories . . . . . . . . .
(133,698)(149,984)
192,379
1,958(Increase) decrease in other current assets . .
(108,767)(82,737)
9,923
101
Increase (decrease) in accounts payable . . . .
104,188
62,241(837,402)(8,525)
Increase (decrease) in accrued income
taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
74,255(118,030)(251,868)(2,564)
Increase (decrease) in other current
liabilities . . . . . . . . . . . . . . . . . . . . . . . . . .
264,490
206,911(41,819)(426)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
156,561
46,464
291,893
2,972
Net cash provided by operating
activities . . . . . . . . . . . . . . . . . . . . . .
3,238,173
2,981,624
1,476,905
15,035
Cash flows from investing activities
Additions to finance receivables . . . . . . . . . . . . . . . . . . (7,489,096) (8,647,717) (7,700,459) (78,392)
Collection of finance receivables . . . . . . . . . . . . . . . . .
6,190,661
7,223,573
7,232,152
73,625
Proceeds from sale of finance receivables . . . . . . . . . .
84,083
109,124
11,290115
Additions to fixed assets excluding equipment leased
to others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,425,814) (1,480,570) (1,364,582) (13,892)
Additions to equipment leased to others . . . . . . . . . . . . (1,264,381) (1,279,405)(960,315)(9,776)
Proceeds from sales of fixed assets excluding
equipment leased to others . . . . . . . . . . . . . . . . . . . .
64,421
67,551
47,386482
Proceeds from sales of equipment leased to others . . . .
321,761
375,881
528,749
5,383
Purchases of marketable securities and security
investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,068,205) (1,151,640)(636,030)(6,475)
Proceeds from sales of marketable securities andsecurity investments . . . . . . . . . . . . . . . . . . . . . . . . .
148,442
165,495
800,422
8,148
Proceeds upon maturity of marketable securities andsecurity investments . . . . . . . . . . . . . . . . . . . . . . . . .
676,729
821,915
675,455
6,876
Payment for additional investments in affiliatedcompanies, net of cash acquired . . . . . . . . . . . . . . . .
(1,651)(4,406)(45)(0)
Changes in investments and other assets, and other . . .
(51,328)(74,687)
135,757
1,382
Net cash used in investing activities . . . ¥(3,814,378) ¥(3,874,886) ¥(1,230,220) $(12,524)
The accompanying notes are an integral part of these consolidated financial statements.
F-8

TOYOTA MOTOR CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
Yen in millions

For the years ended March 31,
2007
2008
2009

Cash flows from financing activities
Purchase of common stock . . . . . . . . . . . . . . . . . . . .
Proceeds from issuance of long-term debt . . . . . . . .
Payments of long-term debt . . . . . . . . . . . . . . . . . . .
Increase in short-term borrowings . . . . . . . . . . . . . .
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

U.S. dollars
in millions
For the year
ended
March 31,2009

¥ (295,699) ¥ (311,667) ¥ (70,587) $ (719)
2,890,000
3,349,812
3,506,990
35,702(1,726,823) (2,310,008) (2,704,078) (27,528)
353,397
408,912406,5074,138(339,107)(430,860)(439,991)(4,479)Net cash provided by financing
activities . . . . . . . . . . . . . . . . . . . . . . . .

881,768

706,189

698,841

7,114

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

25,429(84,759)(129,793)(1,321)

Net increase (decrease) in cash and cash equivalents . . .
Cash and cash equivalents at beginning of year . . . . . . . .

330,992
1,569,387(271,832)
1,900,379

815,733
1,628,547

8,304
16,579Cash and cash equivalents at end of year . . . . . . . . . . . . .

¥ 1,900,379¥ 1,628,547¥ 2,444,280$ 24,883

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

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Nature of operations:Toyota is primarily engaged in the design, manufacture, and sale of sedans, minivans, compact cars, sportutility vehicles, trucks and related parts and accessories throughout the world. In addition, Toyota provides
financing, vehicle and equipment leasing and certain other financial services primarily to its dealers and theircustomers to support the sales of vehicles and other products manufactured by Toyota.
2. Summary of significant accounting policies:
The parent company and its subsidiaries in Japan maintain their records and prepare their financial
statements in accordance with accounting principles generally accepted in Japan, and its foreign subsidiaries inconformity with those of their countries of domicile. Certain adjustments and reclassifications have been
incorporated in the accompanying consolidated financial statements to conform to accounting principles
generally accepted in the United States of America.
Significant accounting policies after reflecting adjustments for the above are as follows:
Basis of consolidation and accounting for investments in affiliated companies The consolidated financial statements include the accounts of the parent company and those of its majorityowned subsidiary companies. All significant intercompany transactions and accounts have been eliminated.
Investments in affiliated companies in which Toyota exercises significant influence, but which it does notcontrol, are stated at cost plus equity in undistributed earnings. Consolidated net income includes Toyota’s equity
in current earnings of such companies, after elimination of unrealized intercompany profits. Investments in suchcompanies are reduced to net realizable value if a decline in market value is determind other-than-temporary.
Investments in non-public companies in which Toyota does not exercise significant influence (generally less than
a 20% ownership interest) are stated at cost. The accounts of variable interest entities as defined by the Financial
Accounting Standards Board Interpretation No. 46(R), Consolidation of Variable Interest Entities (revised
December 2003) - an interpretation of ARB No.51, are included in the consolidated financial statements, if
applicable.
Estimates The preparation of Toyota’s consolidated financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make estimates and assumptions that
affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results
could differ from those estimates. The more significant estimates include: product warranties, allowance for
doubtful accounts and credit losses, residual values for leased assets, impairment of long-lived assets, pension
costs and obligations, fair value of derivative financial instruments, other-than-temporary losses on marketablesecurities and valuation allowance for deferred tax assets.
Translation of foreign currencies All asset and liability accounts of foreign subsidiaries and affiliates are translated into Japanese yen at
appropriate year-end current exchange rates and all income and expense accounts of those subsidiaries aretranslated at the average exchange rates for each period. The foreign currency translation adjustments areincluded as a component of accumulated other comprehensive income.
Foreign currency receivables and payables are translated at appropriate year-end current exchange rates andthe resulting transaction gains or losses are recorded in operations currently.
F-10

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Revenue recognition Revenues from sales of vehicles and parts are generally recognized upon delivery which is considered tohave occurred when the dealer has taken title to the product and the risk and reward of ownership have been
substantively transferred, except as described below.
Toyota’s sales incentive programs principally consist of cash payments to dealers calculated based on
vehicle volume or a model sold by a dealer during a certain period of time. Toyota accrues these incentives asrevenue reductions upon the sale of a vehicle corresponding to the program by the amount determined in therelated incentive program.
Revenues from the sales of vehicles under which Toyota conditionally guarantees the minimum resale value
are recognized on a pro rata basis from the date of sale to the first exercise date of the guarantee in a manner
similar to operating lease accounting. The underlying vehicles of these transactions are recorded as assets and are
depreciated in accordance with Toyota’s depreciation policy.
Revenues from retail financing contracts and finance leases are recognized using the effective yield method.
Revenues from operating leases are recognized on a straight-line basis over the lease term.
Toyota on occasion sells finance receivables in transactions subject to limited recourse provisions. Thesesales are to trusts and Toyota retains the servicing rights and is paid a servicing fee. Gains or losses from thesales of the finance receivables are recognized in the fiscal year in which such sales occur.
Other costs Advertising and sales promotion costs are expensed as incurred. Advertising costs were ¥451,182 million,¥484,508 million and ¥389,242 million ($3,963 million) for the years ended March 31, 2007, 2008 and 2009,
respectively.
Toyota generally warrants its products against certain manufacturing and other defects. Provisions for
product warranties are provided for specific periods of time and/or usage of the product and vary depending upon
the nature of the product, the geographic location of the sale and other factors. Toyota records a provision for
estimated product warranty costs at the time the related sale is recognized based on estimates that Toyota will
incur to repair or replace product parts that fail while under warranty. The amount of accrued estimated warranty
costs is primarily based on historical experience as to product failures as well as current information on repair
costs. The amount of warranty costs accrued also contains an estimate of warranty claim recoveries to bereceived from suppliers. Product recalls and voluntary service campaigns are recorded when they are determined
to be probable and reasonably estimable.
Research and development costs are expensed as incurred. Research and development costs were¥890,782 million, ¥958,882 million and ¥904,075 million ($9,204 million) for the years ended March 31, 2007,2008 and 2009, respectively.
Cash and cash equivalents Cash and cash equivalents include all highly liquid investments with original maturities of three months or
less, that are readily convertible to known amounts of cash and are so near maturity that they present
insignificant risk of changes in value because of changes in interest rates.
Marketable securities Marketable securities consist of debt and equity securities. Debt and equity securities designated asavailable-for-sale are carried at fair value with unrealized gains or losses included as a component of
F-11

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
accumulated other comprehensive income in shareholders’ equity, net of applicable taxes. Individual securities
classified as available-for-sale are reduced to net realizable value for other-than-temporary declines in market
value. In determining if a decline in value is other-than-temporary, Toyota considers the length of time and theextent to which the fair value has been less than the carrying value, the financial condition and prospects of thecompany and Toyota’s ability and intent to retain its investment in the company for a period of time sufficient toallow for any anticipated recovery in market value. Realized gains and losses, which are determined on the
average-cost method, are reflected in the statement of income when realized.
Security investments in non-public companies Security investments in non-public companies are carried at cost as fair value is not readily determinable. If
the value of a non-public security investment is estimated to have declined and such decline is judged to beother-than-temporary, Toyota recognizes the impairment of the investment and the carrying value is reduced toits fair value. Determination of impairment is based on the consideration of such factors as operating results,business plans and estimated future cash flows. Fair value is determined principally through the use of the latest
financial information.
Finance receivables Finance receivables are recorded at the present value of the related future cash flows including residual
values for finance leases.
Allowance for credit losses Allowance for credit losses are established to cover probable losses on receivables resulting from theinability of customers to make required payments. The allowance for credit losses is based primarily on thefrequency of occurrence and loss severity. Other factors affecting collectibility are also evaluated in determining
the amount to be provided.
Losses are charged to the allowance when it has been determined that payments will not be received andcollateral cannot be recovered or the related collateral is repossessed and sold. Any shortfall between proceeds
received and the carrying cost of repossessed collateral is charged to the allowance. Recoveries are reversed fromthe allowance for credit losses.
Allowance for residual value losses Toyota is exposed to risk of loss on the disposition of off-lease vehicles to the extent that sales proceeds are
not sufficient to cover the carrying value of the leased asset at lease termination. Toyota maintains an allowanceto cover probable estimated losses related to unguaranteed residual values on its owned portfolio. The allowanceis evaluated considering projected vehicle return rates and projected loss severity. Factors considered in thedetermination of projected return rates and loss severity include historical and market information on used
vehicle sales, trends in lease returns and new car markets, and general economic conditions. Management
evaluates the foregoing factors, develops several potential loss scenarios, and reviews allowance levels todetermine whether reserves are considered adequate to cover the probable range of losses.
The allowance for residual value losses is maintained in amounts considered by Toyota to be appropriate inrelation to the estimated losses on its owned portfolio. Upon disposal of the assets, the allowance for residual
losses is adjusted for the difference between the net book value and the proceeds from sale.
F-12

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Inventories Inventories are valued at cost, not in excess of market, cost being determined on the “average-cost” basis,
except for the cost of finished products carried by certain subsidiary companies which is determined on the“specific identification” basis or “last-in, first-out” (“LIFO”) basis. Inventories valued on the LIFO basis totaled¥283,735 million and ¥150,110 million ($1,528 million) at March 31, 2008 and 2009, respectively. Had the“first-in, first-out” basis been used for those companies using the LIFO basis, inventories would have been
¥30,360 million and ¥58,980 million ($600 million) higher than reported at March 31, 2008 and 2009,
respectively.
Property, plant and equipment Property, plant and equipment are stated at cost. Major renewals and improvements are capitalized; minor
replacements, maintenance and repairs are charged to current operations. Depreciation of property, plant andequipment is mainly computed on the declining-balance method for the parent company and Japanesesubsidiaries and on the straight-line method for foreign subsidiary companies at rates based on estimated useful
lives of the respective assets according to general class, type of construction and use. The estimated useful lives
range from 2 to 65 years for buildings and from 2 to 20 years for machinery and equipment.
Vehicles and equipment on operating leases to third parties are originated by dealers and acquired by certain
consolidated subsidiaries. Such subsidiaries are also the lessors of certain property that they acquire directly.
Vehicles and equipment on operating leases are depreciated primarily on a straight-line method over the leaseterm, generally 5 years, to the estimated residual value.
Long-lived assets Toyota reviews its long-lived assets for impairment whenever events or changes in circumstances indicatethat the carrying amount of an asset group may not be recoverable. An impairment loss would be recognizedwhen the carrying amount of an asset group exceeds the estimated undiscounted cash flows expected to result
from the use of the asset and its eventual disposition. The amount of the impairment loss to be recorded is
calculated by the excess of the carrying value of the asset group over its fair value. Fair value is determined
mainly using a discounted cash flow valuation method.
Goodwill and intangible assets Goodwill is not material to Toyota’s consolidated balance sheets.
Intangible assets consist mainly of software. Intangible assets with a definite life are amortized on a straightline basis with estimated useful lives mainly of 5 years. Intangible assets with an indefinite life are tested for
impairment whenever events or circumstances indicate that a carrying amount of an asset (asset group) may not
be recoverable. An impairment loss would be recognized when the carrying amount of an asset exceeds theestimated undiscounted cash flows used in determining the fair value of the asset. The amount of the impairment
loss to be recorded is generally determined by the difference between the fair value of the asset using a
discounted cash flow valuation method and the current book value.
Employee benefit obligations Toyota has both defined benefit and defined contribution plans for employees’ retirement benefits.
Retirement benefit obligations are measured by actuarial calculations in accordance with a Statement of Financial
F-13

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Accounting Standards (“FAS”) No. 87 Employers’ Accounting for Pensions (“FAS 87”). Toyota adopted theprovisions regarding recognition of funded status and disclosure under FAS No. 158, Employers’ Accounting for
Defined Benefit Pension and Other Postretirement Plans – an amendment of FASB Statements No. 87, 88, 106,
and 132(R) (“FAS 158”) as of March 31, 2007. Under the provisions of FAS 158, the overfunded or underfunded
status of the defined benefit postretirement plans is recognized on the consolidated balance sheets as prepaid
pension and severance costs or accrued pension and severance costs, and the funded status change is recognizedin the year in which it occurs through comprehensive income. Prior to the adoption of FAS 158, a minimum
pension liability had been recorded for plans where the accumulated benefit obligation net of plan assets
exceeded the accrued pension and severance costs. After the adoption of FAS 158, a minimum pension liability is
not recorded.
Environmental matters Environmental expenditures relating to current operations are expensed or capitalized as appropriate.
Expenditures relating to existing conditions caused by past operations, which do not contribute to current or
future revenues, are expensed. Liabilities for remediation costs are recorded when they are probable andreasonably estimable, generally no later than the completion of feasibility studies or Toyota’s commitment to aplan of action. The cost of each environmental liability is estimated by using current technology available andvarious engineering, financial and legal specialists within Toyota based on current law. Such liabilities do notreflect any offset for possible recoveries from insurance companies and are not discounted. There were nomaterial changes in these liabilities for all periods presented.
Income taxes The provision for income taxes is computed based on the pretax income included in the consolidated
statement of income. The asset and liability approach is used to recognize deferred tax assets and liabilities forthe expected future tax consequences of temporary differences between the carrying amounts and the tax bases ofassets and liabilities. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than
not that a tax benefit will not be realized.
Derivative financial instruments Toyota employs derivative financial instruments, including forward foreign currency exchange contracts,
foreign currency options, interest rate swaps, interest rate currency swap agreements and interest rate options tomanage its exposure to fluctuations in interest rates and foreign currency exchange rates. Toyota does not use
derivatives for speculation or trading purposes. Changes in the fair value of derivatives are recorded each period
in current earnings or through other comprehensive income, depending on whether a derivative is designated aspart of a hedge transaction and the type of hedge transaction. The ineffective portion of all hedges is recognizedcurrently in operations.
Net income per share Basic net income per common share is calculated by dividing net income by the weighted-average numberof shares outstanding during the reported period. The calculation of diluted net income per common share issimilar to the calculation of basic net income per share, except that the weighted-average number of shares
outstanding includes the additional dilution from the assumed exercise of dilutive stock options.

F-14

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Stock-based compensation Toyota measures compensation expense for its stock-based compensation plan based on the grant-date fairvalue of the award, and accounts for the award in accordance with FAS No. 123(R), Share - Based Payment(revised 2004).
Other comprehensive income Other comprehensive income refers to revenues, expenses, gains and losses that, under accounting
principles generally accepted in the United States of America are included in comprehensive income, but are
excluded from net income as these amounts are recorded directly as an adjustment to shareholders’ equity.
Toyota’s other comprehensive income is primarily comprised of unrealized gains/losses on marketable securities
designated as available-for-sale, foreign currency translation adjustments and adjustments attributed to pension
liabilities or minimum pension liabilities associated with Toyota’s defined benefit pension plans.
Accounting changes In June 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 48,
Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109 (“FIN 48”). FIN 48
clarifies the accounting for uncertainty in tax positions and requires a company to recognize in its financial
statements, the impact of a tax position, if that position is more likely than not to be sustained on audit, based on
the technical merits of the position. Toyota adopted FIN 48 from the fiscal year begun after December 15, 2006.
See note 16 to the consolidated financial statements for the impact of the adoption of the interpretation on
Toyota’s consolidated financial statements.
In September 2006, FASB issued FAS No. 157, Fair Value Measurements (“FAS 157”), which defines fairvalue, establishes a framework for measuring fair value and expands disclosures about fair value measurements.
Toyota adopted FAS 157 from the fiscal year begun after November 15, 2007. Toyota adopted FASB Staff
Position (“FSP”) No. FAS 157-2, Effective Date of FASB Statement No. 157, which defers the effective date of
FAS 157 for certain nonfinancial assets and nonfinancial liabilities to fiscal year beginning after November 15,
2008, and interim period within the fiscal year. The adoption of FAS 157 did not have a material impact on
Toyota’s consolidated financial statements. See note 26 to the consolidated financial statements for disclosures of
the adoption of these statements.
In September 2006, FASB issued FAS 158. FAS 158 requires employers to measure the funded status of
their defined benefit postretirement plans as of the date of their year-end statement of financial position. Toyota
adopted the provision in FAS 158 regarding a measurement date from the fiscal year ended after December 15,
2008. The adoption of this provision in FAS 158 did not have a material impact on Toyota’s consolidated
financial statements.
In February 2007, FASB issued FAS No. 159, The Fair Value Option for Financial Assets and Financial
Liabilities – Including an amendment of FASB Statement No. 115 (“FAS 159”). FAS 159 permits entities tomeasure many financial instruments and certain other assets and liabilities at fair value on an
instrument-by-instrument basis and subsequent change in fair value must be recorded in earnings at eachreporting date. Toyota adopted FAS 159 from the fiscal year begun after November 15, 2007. The adoption of
FAS 159 did not have a material impact on Toyota’s consolidated financial statements.
In March 2008, FASB issued FAS No. 161, Disclosures about Derivative Instruments and Hedging
Activities – an amendment of FASB Statement No. 133 (“FAS 161”). FAS 161 changes and enhances the current
disclosure requirements for derivative instruments and hedging activities under FAS No. 133, Accounting for
F-15

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Derivative Instruments and Hedging Activities. Toyota adopted FAS 161 from the fiscal year ended March 31,
2009. The adoption of FAS 161 did not have a material impact on Toyota’s consolidated financial statements.
See note 20 to the consolidated financial statements for disclosures of the adoption of the statement.
Recent pronouncements to be adopted in future periods In December 2007, FASB issued FAS No. 141(R), Business Combinations (“FAS 141(R)”). FAS 141(R)establishes principles and requirements for how the acquirer recognizes and measures the identifiable assets
acquired, the liabilities assumed, any noncontrolling interest, and the goodwill acquired in a businesscombination or a gain from a bargain purchase. Also, FAS 141(R) provides several new disclosure requirementsthat enable users of the financial statements to evaluate the nature and financial effects of the businesscombination. FAS 141(R) is effective to business combinations on and after the beginning of fiscal year
beginning on or after December 15, 2008. The impact of adopting FAS 141(R) on Toyota’s consolidated
financial statements will depend on the nature and significance of any acquisitions in the future period.
In December 2007, FASB issued FAS No. 160, Noncontrolling Interests in Consolidated Financial
Statements – an amendment of ARB No. 51 (“FAS 160”). FAS 160 amends the guidance in Accounting Research
Bulletins No. 51, Consolidated Financial Statements, to establish accounting and reporting standards for thenoncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. FAS 160 is effective for fiscal
year, and interim period within the fiscal year, beginning on or after December 15, 2008. The presentation anddisclosure requirements shall be applied retrospectively for all periods presented in the consolidated financial
statements in which FAS 160 is initially applied. Management is evaluating the impact of adopting FAS 160 on
Toyota’s consolidated financial statements.
In December 2008, FASB issued FSP No. FAS 132(R)-1, Employers’ Disclosures about Postretirement
Benefit Plan Assets (“FSP FAS 132(R)-1”). FSP FAS 132(R)-1 requires additional disclosures about
postretirement benefit plan assets including investment policies and strategies, categories of plan assets, fairvalue measurements of plan assets, and significant concentrations of risk. FSP FAS 132 (R)-1 is effective forfiscal year ending after December 15, 2009. Management does not expect this FSP to have a material impact on
Toyota’s consolidated financial statements.
In April 2009, FASB issued FSP No. FAS 115-2 and FAS 124-2, Recognition and Presentation of OtherThan-Temporary Impairments (“FSP FAS 115-2 and FAS 124-2”). FSP FAS 115-2 and FAS 124-2 revises therecognition and presentation requirements for other-than-temporary impairments of debt securities, and contains
additional disclosure requirements related to debt and equity securities. FSP FAS 115-2 and FAS 124-2 iseffective for interim period and fiscal year ending after June 15, 2009. Management does not expect this FSP tohave a material impact on Toyota’s consolidated financial statements.
In May 2009, FASB issued FAS No. 165, Subsequent Events (“FAS 165”). FAS 165 is intended to establish
general standards of accounting for and disclosure of events that occur after the balance sheet date but before
financial statements are issued. FAS 165 is effective for interim period or fiscal year ending after June 15, 2009.
Management does not expect this Statement to have a material impact on Toyota’s consolidated financial
statements.
Reclassifications Certain prior year amounts have been reclassified to conform to the presentations as of and for the year
ended March 31, 2009.
During the year ended March 31, 2008, certain leases that historically have been accounted for as operatingleases, were corrected to be accounted for as finance leases. This resulted in the recognition of current andnoncurrent finance receivables and revenue from financing operations related to finance leases, and the
F-16

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
derecognition of vehicles and equipment on operating leases, accumulated depreciation, revenue from financing
operations related to operating leases, cost of financing operations including depreciation expense, cash provided
by operating activities and cash used in investing activities, as of and for the year ended March 31, 2008. At
March 31, 2007, the adjustments resulted in an increase in current assets and a decrease in noncurrent assets. For
the year ended March 31, 2007, the adjustments resulted in decreases to both additions to equipment leased toothers and proceeds from sales of equipment leased to others, and increases to both additions to financereceivables and collection of finance receivables. These adjustments are immaterial to Toyota’s consolidated
financial statements for all periods presented.
3. U.S. dollar amounts:
U.S. dollar amounts presented in the consolidated financial statements and related notes are included solely forthe convenience of the reader and are unaudited. These translations should not be construed as representations that the
yen amounts actually represent, or have been or could be converted into, U.S. dollars. For this purpose, the rate of¥98.23 = U.S. $1, the approximate current exchange rate at March 31, 2009, was used for the translation of theaccompanying consolidated financial amounts of Toyota as of and for the year ended March 31, 2009.
4. Supplemental cash flow information:
Cash payments for income taxes were ¥741,798 million, ¥921,798 million and ¥563,368 million ($5,735
million) for the years ended March 31, 2007, 2008 and 2009, respectively. Interest payments during the years
ended March 31, 2007, 2008 and 2009 were ¥550,398 million, ¥686,215 million and ¥614,017 million ($6,251
million), respectively.
Capital lease obligations of ¥6,559 million, ¥7,401 million and ¥28,953 million ($295 million) wereincurred for the years ended March 31, 2007, 2008 and 2009, respectively.
5. Acquisitions and dispositions:
During the years ended March 31, 2007, 2008 and 2009, Toyota made several acquisitions, however theassets acquired and liabilities assumed were not material.
6. Marketable securities and other securities investments:
Marketable securities and other securities investments include debt and equity securities for which theaggregate cost, gross unrealized gains and losses and fair value are as follows:

Cost

Available-for-sale
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥2,602,951
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
853,174
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Securities not practicable to determine fair value
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-17¥3,456,125¥

30,239113,497¥ 143,736

Yen in millions
March 31, 2008
Gross
Gross
unrealized unrealized
gains
lossesFairvalue¥ 52,345
342,596¥ 4,673
18,681¥2,650,623
1,177,089¥394,941¥23,354¥3,827,712

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Cost

Available-for-sale
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,704,904
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
736,966
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Securities not practicable to determine fair value
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥2,441,870¥

Yen in millions
March 31, 2009
Gross
Gross
unrealized unrealized
gains
lossesFairvalue¥ 42,326
172,992¥ 65,379
111,698¥1,681,851
798,260¥215,318¥177,077¥2,480,111

26,104
91,985¥ 118,089

Cost

U.S. dollars in millions
March 31, 2009
Gross
Gross
unrealized unrealized
gains
lossesFair
value

Available-for-sale
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$17,357
7,502

$

431
1,761

$

666
1,137

$

17,122
8,126

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

$24,859

$

2,192

$

1,803

$

25,248

Securities not practicable to determine fair value
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

266
937

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

$

1,203

Unrealized losses continuing over a 12 month period or more in the aggregate were not material at
March 31, 2008 and 2009.
At March 31, 2008 and 2009, debt securities classified as available-for-sale mainly consist of government
bonds and corporate debt securities with maturities from 1 to 10 years.
Proceeds from sales of available-for-sale securities were ¥148,442 million, ¥165,495 million and¥800,422 million ($8,148 million) for the years ended March 31, 2007, 2008 and 2009, respectively. On thosesales, gross realized gains were ¥8,832 million, ¥18,766 million and ¥35,694 million ($363 million) and grossrealized losses were ¥317 million, ¥21 million and ¥1,856 million ($19 million), respectively.
During the years ended March 31, 2007, 2008 and 2009, Toyota recognized impairment losses onavailable-for-sale securities of ¥4,614 million, ¥11,346 million and ¥220,920 million ($2,249 million), respectively,
which are included in “Other income (loss), net” in the accompanying consolidated statements of income.
Impairment losses recognized during the year ended March 31, 2009 primarily include a loss for another-than-temporary impairment on a certain investment for which Toyota previously recorded an exchange gain in
accordance with EITF Issue No. 91-5, Nonmonetary Exchange of Cost-Method Investments.
In the ordinary course of business, Toyota maintains long-term investment securities, included in“Marketable securities and other securities investments” and issued by a number of non-public companies which
are recorded at cost, as their fair values were not readily determinable. Management employs a systematic
F-18

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
methodology to assess the recoverability of such investments by reviewing the financial viability of theunderlying companies and the prevailing market conditions in which these companies operate to determine if
Toyota’s investment in each individual company is impaired and whether the impairment is other-thantemporary. Toyota periodically performs this impairment test for significant investments recorded at cost. If theimpairment is determined to be other-than-temporary, the carrying value of the investment is written-down by the
impaired amount and the losses are recognized currently in operations.
7. Finance receivables:
Finance receivables consist of the following:
Yen in millions
March 31,
2008
2009

U.S. dollars
in millions
March 31,2009

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

¥ 6,959,479
1,160,401
2,604,411¥ 6,655,404
1,108,408
2,322,721$ 67,753
11,284
23,646

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

10,724,291
106,678(437,365)(117,706)

10,086,533
104,521(405,171)(238,932)

102,683
1,064(4,125)(2,432)

Total finance receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less - Current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10,275,898(4,301,142)

9,546,951(3,891,406)

97,190(39,615)

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

¥ 5,974,756¥ 5,655,545$ 57,575

The contractual maturities of retail receivables, the future minimum lease payments on finance leases andwholesale and other dealer loans at March 31, 2009 are summarized as follows:
Yen in millions

U.S. dollars in millions
WholesaleFinanceand other
Retailleasesdealer loans

FinanceleasesWholesaleand other
dealer loans

2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,925,835
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,717,107
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,367,769
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
900,158
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
467,476
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . .
277,059¥330,433
243,759
187,929
76,534
23,419
9,176¥1,790,174
127,512
107,624
86,585
105,055
105,771$19,605
17,48013,924
9,164
4,759
2,821

$3,364
2,482
1,913
779
238
93

$18,224
1,298
1,096
881
1,070
1,077

¥6,655,404¥871,250¥2,322,721$67,753$8,869$23,646

Years ending March 31,

Retail

F-19

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Finance leases consist of the following:
Yen in millions
March 31,
2008
2009

U.S. dollars
in millions
March 31,2009

Minimum lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Estimated unguaranteed residual values . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 738,786
421,615¥ 871,250
237,158$ 8,870
2,414

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

1,160,401
4,414(118,831)(4,592)

1,108,408
6,085(102,826)(7,776)

11,28462(1,047)(79)

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

¥1,041,392¥1,003,891$10,220

Toyota maintains a program to sell retail and finance lease receivables. Under the program, Toyota’s
securitization transactions are generally structured as qualifying SPEs (“QSPE”s), thus Toyota achieves saleaccounting treatment under the provisions of FAS No. 140, Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities (“FAS 140”). Toyota recognizes a gain or loss on the sale of the financereceivables upon the transfer of the receivables to the securitization trusts structured as a QSPE. Toyota retains
servicing rights and earns a contractual servicing fee of 1% per annum on the total monthly outstanding principalbalance of the related securitized receivables. In a subordinated capacity, Toyota retains interest-only strips,
subordinated securities, and cash reserve funds in these securitizations, and these retained interests are held as
restricted assets subject to limited recourse provisions and provide credit enhancement to the senior securities in
Toyota’s securitization transactions. The retained interests are not available to satisfy any obligations of Toyota.
Investors in the securitizations have no recourse to Toyota beyond the contractual cash flows of the securitizedreceivables, retained subordinated interests, any cash reserve funds and any amounts available or funded under
the revolving liquidity notes. Toyota’s exposure to these retained interests exists until the associated securities
are paid in full. Investors do not have recourse to other assets held by Toyota for failure of obligors on thereceivables to pay when due or otherwise.
During the year ended March 31, 2008, Toyota sold mortgage loan receivables, while no other retail andfinance lease receivables were securitized. During the year ended March 31, 2009, no retail and finance leasereceivables were securitized.
The following table summarizes certain cash flows received from and paid to the securitization trusts for theyears ended March 31, 2007, 2008 and 2009.
Yen in millions

For the years ended March 31,
2007
2008
2009

Proceeds from new securitizations, net of purchased and retained
securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Servicing fees received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Excess interest received from interest only strips . . . . . . . . . . . . . . . .
Repurchases of receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Servicing advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reimbursement of servicing and maturity advances . . . . . . . . . . . . . .
F-20¥69,018 ¥91,385
1,881
1,682
2,818
1,865
—
(4,681)
(234)
(114)
234
114

¥ —
777
356
(48)
—
—

U.S. dollars
in millions
For the year
ended
March 31,
2009

$ —
8
4
(0)
—
—

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Toyota sold finance receivables under the program and recognized pretax gains resulting from these sales of¥1,589 million and ¥1,688 million for the years ended March 31, 2007 and 2008, respectively, after providing anallowance for estimated credit losses. The gain on sale recorded depends on the carrying amount of the assets atthe time of the sale. The carrying amount is allocated between the assets sold and the retained interests based on
their relative fair values at the date of the sale. The key economic assumptions initially and subsequently
measuring the fair value of retained interests include the market interest rate environment, severity and rate ofcredit losses, and the prepayment speed of the receivables. All key economic assumptions used in the valuationof the retained interests are reviewed periodically and are revised as considered necessary.
At March 31, 2008 and 2009, Toyota’s retained interests relating to these securitizations include interest in
trusts, interest-only strips, and other receivables, amounting to ¥23,876 million and ¥19,581 million($199 million), respectively.
Toyota recorded no impairments on retained interests for the years ended March 31, 2007, 2008 and 2009.
Impairments are calculated, if any, by discounting cash flows using management’s estimates and other key
economic assumptions.
Key economic assumptions used in measuring the fair value of retained interests at the sale date of
securitization transactions completed during the years ended March 31, 2007, 2008 and 2009 were as follows:2007

Prepayment speed related to securitizations . . . . . . . . . . . . . .
Weighted-average life (in years) . . . . . . . . . . . . . . . . . . . . . . .
Expected annual credit losses . . . . . . . . . . . . . . . . . . . . . . . . .
Discount rate used on the retained interests . . . . . . . . . . . . . .

For the years ended March 31,
2008

0.7% - 1.4%
1.90 - 2.57
0.05% - 0.12%
5.0%

6.0%
9.00
0.05%
3.8%

2009

—
—
—
—

Expected cumulative static pool losses over the life of the securitizations are calculated by taking actual life
to date losses plus projected losses and dividing the sum by the original balance of each pool of assets. Expectedcumulative static pool credit losses for finance receivables securitized for the years ended March 31, 2007, 2008
and 2009 were 0.16%, 0.26% and 0.26%, respectively.
The key economic assumptions and the sensitivity of the current fair value of the retained interest to an
immediate 10 and 20 percent adverse change in those economic assumptions are presented below.
Yen in millions
March 31, 2009

Prepayment speed assumption (annual rate) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.5% - 6.0%
Impact on fair value of 10% adverse change . . . . . . . . . . . . . . . . . . . . . . . . . ¥(232)
Impact on fair value of 20% adverse change . . . . . . . . . . . . . . . . . . . . . . . . .
(419)
Residual cash flows discount rate (annual rate) . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.0% - 6.5%
Impact on fair value of 10% adverse change . . . . . . . . . . . . . . . . . . . . . . . . . ¥(600)
Impact on fair value of 20% adverse change . . . . . . . . . . . . . . . . . . . . . . . . .
(1,165)
Expected credit losses (annual rate) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.05% - 0.18%
Impact on fair value of 10% adverse change . . . . . . . . . . . . . . . . . . . . . . . . . ¥(8)Impact on fair value of 20% adverse change . . . . . . . . . . . . . . . . . . . . . . . . .
(16)

F-21

U.S. dollars
in millions
March 31, 2009

$ (2)
(4)
$ (6)
(12)
$ (0)
(0)

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
These hypothetical scenarios do not reflect expected market conditions and should not be used as aprediction of future performance. As the figures indicate, changes in the fair value may not be linear. Also, in thistable, the effect of a variation in a particular assumption on the fair value of the retained interest is calculated
without changing any other assumption. Actual changes in one factor may result in changes in another, whichmight magnify or counteract the sensitivities. Actual cash flows may differ from the above analysis.
Outstanding receivable balances and delinquency amounts for managed retail and lease receivables, which
include both owned and securitized receivables, as of March 31, 2008 and 2009 are as follows:
Yen in millions
March 31,
2008
2009

U.S. dollars
in millions
March 31,2009

Principal amount outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Delinquent amounts over 60 days or more . . . . . . . . . . . . . . . . . . . . . . . . .

¥7,867,964
79,313¥7,481,016
83,613$76,158
851

Comprised of:Receivables owned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables securitized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥7,682,515
185,449¥7,358,641
122,375$74,912
1,246

Credit losses, net of recoveries attributed to managed retail and lease receivables for the years ended
March 31, 2007, 2008 and 2009 totaled ¥63,428 million, ¥93,036 million and ¥124,939 million ($1,272 million),
respectively.
8. Other receivables:
Other receivables relate to arrangements with certain component manufacturers whereby Toyota procuresinventory for these component manufactures and is reimbursed for the related purchases.
9. Inventories:
Inventories consist of the following:
Yen in millions
March 31,
2008
2009

Finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Work in process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplies and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-22

U.S. dollars
in millions
March 31,2009

¥1,211,569
299,606
239,937
74,604¥ 875,930
257,899
251,670
73,895$ 8,917
2,626
2,562
752

¥1,825,716¥1,459,394$14,857

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
10. Vehicles and equipment on operating leases:
Vehicles and equipment on operating leases consist of the following:
Yen in millions
March 31,
2008
2009

U.S. dollars
in millions
March 31,
2009

Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥2,814,706
107,619¥2,729,713
107,168$27,789
1,091

Less - Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,922,325(718,207)

2,836,881(795,767)

28,880(8,101)

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

¥2,204,118¥2,041,114$20,779

Rental income from vehicles and equipment on operating leases was ¥508,095 million, ¥588,262 millionand ¥560,251 million ($5,703 million) for the years ended March 31, 2007, 2008 and 2009, respectively. Future
minimum rentals from vehicles and equipment on operating leases are due in installments as follows:
Yen inmillions

U.S. dollars
in millions

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

¥459,110
302,990
130,948
37,2948,262
7,265$4,674
3,084
1,333
380
84
74

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

¥945,869$9,629Years ending March 31,

The future minimum rentals as shown above should not be considered indicative of future cash collections.
11. Allowance for doubtful accounts and credit losses:
An analysis of activity within the allowance for doubtful accounts relating to trade accounts and notes
receivable for the years ended March 31, 2007, 2008 and 2009 is as follows:

For the years ended March 31,
2007
2008
2009

U.S. dollars
in millions
For the year
ended
March 31,2009

¥62,088 ¥58,066 ¥52,063
(841)
357
(1,663)(3,154) (3,348) (1,695)(27) (3,012)
(699)

$530
(17)
(17)
(7)

¥58,066$489

Yen in millions

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

F-23¥52,063¥48,006

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The other amount includes the impact of consolidation and deconsolidation of certain entities due tochanges in ownership interest and currency translation adjustments for the years ended March 31, 2007, 2008 and2009.
A portion of the allowance for doubtful accounts balance at March 31, 2008 and 2009 totaling¥34,592 million and ¥32,972 million ($336 million), respectively, is attributed to certain non-current receivablebalances which are reported as other assets in the consolidated balance sheets.
An analysis of the allowance for credit losses relating to finance receivables and vehicles and equipment on
operating leases for the years ended March 31, 2007, 2008 and 2009 is as follows:
U.S. dollars
in millions
For the year
ended
March 31,2009

Yen in millions

For the years ended March 31,
2007
2008
2009

Allowance for credit losses at beginning of year . . . . . . . . . . . . . ¥101,383 ¥112,116 ¥ 117,706
Provision for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
72,703
122,433
259,096
Charge-offs, net of recoveries . . . . . . . . . . . . . . . . . . . . . . . . . . .
(63,879) (88,902) (116,793)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,909(27,941)(21,077)
Allowance for credit losses at end of year . . . . . . . . . . . . . .

¥112,116¥117,706¥ 238,932$ 1,198
2,638(1,189)(215)$ 2,432

The other amount primarily includes the impact of currency translation adjustments for the years ended
March 31, 2007, 2008 and 2009.
12. Affiliated companies and variable interest entities:
Investments in and transactions with affiliated companies Summarized financial information for affiliated companies accounted for by the equity method is shown
below:
U.S. dollars
in millions
March 31,2009

Yen in millions
March 31,
2008
2009

Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncurrent assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 8,067,295
10,689,963¥ 6,400,685
9,438,905$ 65,160
96,090Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥18,757,258¥15,839,590$161,250

Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 6,012,270
5,619,997
7,124,991¥ 4,216,956
5,740,150
5,882,484$ 42,929
58,43659,885

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

¥18,757,258¥15,839,590$161,250

Toyota’s share of shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 2,065,778¥ 1,810,106$ 18,427

Number of affiliated companies accounted for by the equity method at
end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

55

56

F-24

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Yen in millions

For the years ended March 31,
2007
2008
2009

U.S. dollars
in millions
For the year
ended
March 31,2009

Net revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥23,368,250¥26,511,831¥23,149,968$235,671

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 2,642,377¥ 3,081,366¥ 2,034,617$ 20,713

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

¥

¥

¥

$

701,816

870,528

13,838141

Entities comprising a significant portion of Toyota’s investment in affiliated companies include Denso
Corporation; Aioi Insurance Co., Ltd.; Aisin Seiki Co., Ltd.; Toyota Industries Corporation; and Toyota Tsusho
Corporation.
Certain affiliated companies accounted for by the equity method with carrying amounts of¥1,677,617 million and ¥1,417,896 million ($14,434 million) at March 31, 2008 and 2009, respectively, werequoted on various established markets at an aggregate value of ¥2,229,321 million and ¥1,127,976 million($11,483 million), respectively. For the year ended March 31, 2009, Toyota did not recognize impairment losses
on certain investments in affiliated companies accounted for by the equity method after considering the length oftime and the extent to which the quoted market prices have been less than the carrying amounts, the financial
condition and near-term prospects of the affiliated companies and Toyota’s ability and intent to retain thoseinvestments in the companies for a period of time.
Account balances and transactions with affiliated companies are presented below:
Yen in millions
March 31,
2008
2009

Trade accounts and notes receivable, and other receivables . . . . . . . . . . . . . .
Accounts payable and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥247,311
622,830¥159,821
363,954

Yen in millions

For the years ended March 31,
2007
2008
2009

Net revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,475,220
Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,028,260¥1,693,969
4,525,049¥1,585,814
3,918,717

U.S. dollars
in millions
March 31,2009

$1,627
3,705
U.S. dollars
in millions
For the year
ended
March 31,
2009

$16,144
39,893

Dividends from affiliated companies accounted for by the equity method for the years ended March 31,
2007, 2008 and 2009 were ¥45,234 million, ¥76,351 million and ¥114,409 million ($1,165 million), respectively.
Toyota does not have any significant related party transactions other than transactions with affiliatedcompanies in the ordinary course of business.
Variable Interest Entities Toyota enters into securitization transactions with certain special-purpose entities. However, substantially
all securitization transactions are with entities that are qualifying special-purpose entities under FAS 140 andthus no material variable interest entities (“VIEs”) relating to these securitization transactions.
Certain joint ventures in which Toyota has invested are VIEs for which Toyota is not the primary
beneficiary. However, neither the aggregate size of these joint ventures nor Toyota’s involvements in these
entities are material to Toyota’s consolidated financial statements.
F-25

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
13. Short-term borrowings and long-term debt:
Short-term borrowings at March 31, 2008 and 2009 consist of the following:
Yen in millions
March 31,
2008
2009

Loans, principally from banks, with a weighted-average interest at
March 31, 2008 and March 31, 2009 of 3.36% and of 2.44% perannum, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,226,717 ¥1,115,122
Commercial paper with a weighted-average interest at March 31, 2008
and March 31, 2009 of 3.76% and of 1.52% per annum, respectively . . . 2,326,004 2,502,550¥3,552,721 ¥3,617,672

U.S. dollars
in millions
March 31,2009

$11,352
25,477$36,829

As of March 31, 2009, Toyota has unused short-term lines of credit amounting to ¥2,476,458 million($25,211 million) of which ¥751,523 million ($7,651 million) related to commercial paper programs. Under
these programs, Toyota is authorized to obtain short-term financing at prevailing interest rates for periods not inexcess of 360 days.
Long-term debt at March 31, 2008 and 2009 comprises the following:
Yen in millions
March 31,
2008
2009

U.S. dollars
in millions
March 31,2009

Unsecured loans, representing obligations principally to banks, due 2008
to 2028 in 2008 and due 2009 to 2028 in 2009 with interest ranging
from 0.17% to 28.00% per annum in 2008 and from 0.17% to31.50% per annum in 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 1,016,101 ¥ 1,536,413 $ 15,641
Secured loans, representing obligations principally to banks, due 2008 to2019 in 2008 and due 2009 to 2019 in 2009 with interest ranging from
0.35% to 5.60% per annum in 2008 and from 0.68% to 5.35% perannum in 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15,635
11,227114
Medium-term notes of consolidated subsidiaries, due 2008 to 2047 in2008 and due 2009 to 2047 in 2009 with interest ranging from 0.32%
to 15.25% per annum in 2008 and from 0.19% to 17.47% per annum
in 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,451,779
5,335,159
54,313
Unsecured notes of parent company, due 2008 to 2018 in 2008 and due2010 to 2018 in 2009 with interest ranging from 1.33% to 3.00% perannum in 2008 and from 1.33% to 3.00% per annum in 2009 . . . . . . . .
350,000
450,000
4,581
Unsecured notes of consolidated subsidiaries, due 2008 to 2031 in 2008
and due 2009 to 2031 in 2009 with interest ranging from 0.34% to14.00% per annum in 2008 and from 0.59% to 19.42% per annum in2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,780,284
1,616,816
16,460Long-term capital lease obligations, due 2008 to 2017 in 2008 and due
2009 to 2028 in 2009 with interest ranging from 0.31% to 10.00% perannum in 2008 and from 0.21% to 15.47% per annum in 2009 . . . . . . .
43,56351,366523
8,657,362
9,000,981
91,632Less - Current portion due within one year . . . . . . . . . . . . . . . . . . . . . . . . . (2,675,431) (2,699,512) (27,482)¥ 5,981,931 ¥ 6,301,469 $ 64,150
F-26

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
As of March 31, 2009, approximately 28%, 21%, 15% and 36% of long-term debt are denominated in U.S.
dollars, Japanese yen, euros, and other currencies, respectively.
As of March 31, 2009, property, plant and equipment with a book value of ¥87,845 million ($894 million)
and in addition, other assets aggregating ¥34,329 million ($349 million) were pledged as collateral mainly forcertain debt obligations of subsidiaries.
The aggregate amounts of annual maturities of long-term debt during the next five years are as follows:
Years ending March 31,

2010
2011
2012
2013
2014

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

Yen in millions

U.S. dollars
in millions¥2,699,512
1,640,353
1,974,269
637,445626,983$27,482
16,69920,0986,489
6,383

Standard agreements with certain banks in Japan include provisions that collateral (including sums on
deposit with such banks) or guarantees will be furnished upon the banks’ request and that any collateral
furnished, pursuant to such agreements or otherwise, will be applicable to all present or future indebtedness tosuch banks. During the year ended March 31, 2009, Toyota has not received any significant such requests fromthese banks.
As of March 31, 2009, Toyota has unused long-term lines of credit amounting to ¥4,152,621 million($42,274 million).
14. Product warranties:
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. The net change in the accrual for the productwarranties for the years ended March 31, 2007, 2008 and 2009, which is included in “Accrued expenses” in theaccompanying consolidated balance sheets, consist of the following:
Yen in millions

For the years ended March 31,
2007
2008
2009

U.S. dollars
in millions
For the year
ended
March 31,2009

Liabilities for product warranties at beginning of year . . . . . . . ¥ 377,879 ¥ 412,452 ¥ 446,384
Payments made during year . . . . . . . . . . . . . . . . . . . . . . . . . . .
(279,597) (324,110) (337,863)
Provision for warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
336,543
392,349
366,604
Changes relating to pre-existing warranties . . . . . . . . . . . . . . .
(29,458)(14,155)(17,869)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,085(20,152)(27,999)$ 4,544(3,439)
3,732
(182)
(285)

Liabilities for product warranties at end of year . . . . . . . . . . . .

$ 4,370¥ 412,452¥ 446,384¥ 429,257

The other amount primarily includes the impact of currency translation adjustments and the impact ofconsolidation and deconsolidation of certain entities due to changes in ownership interest.
F-27

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In addition to product warranties above, Toyota initiates recall actions or voluntary service campaigns torepair or to replace parts which might be expected to fail from products safety perspectives or customer
satisfaction standpoints. Toyota accrues costs of these activities, which are not included in the reconciliation
above, based on management’s estimates.
15. Other payables:
Other payables are mainly related to purchases of property, plant and equipment and non-manufacturing
purchases.
16. Income taxes:
The components of income (loss) before income taxes comprise the following:
Yen in millions

For the years ended March 31,
2007
2008
2009

Income (loss) before income taxes:
Parent company and domestic subsidiaries . . . . . . . . . .
Foreign subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . .

U.S. dollars
in millions
For the year
ended
March 31,2009

¥1,412,674
969,842¥1,522,619
914,603¥(224,965)(335,416)$(2,290)(3,415)¥2,382,516¥2,437,222¥(560,381)$(5,705)

The provision for income taxes consists of the following:
Yen in millions

For the years ended March 31,
2007
2008
2009

U.S. dollars
in millions
For the year
ended
March 31,2009

Current income tax expense:
Parent company and domestic subsidiaries . . . . . . . . . .
Foreign subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥591,840
174,164¥491,185 ¥ 65,684
338,852
72,864

Total current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

766,004

830,037

138,548

1,410

Deferred income tax expense (benefit):
Parent company and domestic subsidiaries . . . . . . . . . .
Foreign subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . .

51,74080,568

119,333(37,875)(26,472)(168,518)(269)(1,716)

Total deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

132,308

81,458(194,990)(1,985)

Total provision . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥898,312¥911,495¥ (56,442)$ (575)

F-28

$

668
742

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Toyota is subject to a number of different income taxes which, in the aggregate, indicate a statutory rate inJapan of approximately 40.2% for the years ended March 31, 2007, 2008 and 2009. Such rate was also used to
calculate the tax effects of temporary differences, which are expected to be realized in the future years.
Reconciliation of the differences between the statutory tax rate and the effective income tax rate is as follows:
For the years ended March 31,
2007
2008
2009

Statutory tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase (reduction) in taxes resulting from:
Non-deductible expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities on undistributed earnings of foreign subsidiaries . . . .
Deferred tax liabilities on undistributed earnings of affiliates accounted forby the equity method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effective income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

40.2%

40.2%

40.2%

0.5
0.7

0.6
0.9

(5.0)
(2.5)

2.4
(0.1)
(3.9)
(2.1)
37.7%

3.1
(0.4)
(4.4)
(2.6)
37.4%

(2.5)
(25.4)
10.0
(4.7)
10.1%

The other includes the difference between the statutory tax rate of TMC and that of foreign subsidiaries
during the years ended March 31, 2007, 2008 and 2009.
Significant components of deferred tax assets and liabilities are as follows:
Yen in millions
March 31,
2008
2009

U.S. dollars
in millions
March 31,2009

Deferred tax assets
Accrued pension and severance costs . . . . . . . . . . . . . . . . . . . . . . . . ¥ 156,924 ¥ 288,849 $ 2,940
Warranty reserves and accrued expenses . . . . . . . . . . . . . . . . . . . . .
205,564
227,757
2,319
Other accrued employees’ compensation . . . . . . . . . . . . . . . . . . . . .
129,472
99,867
1,017
Operating loss carryforwards for tax purposes . . . . . . . . . . . . . . . . .
54,368290,044
2,953
Inventory adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
67,90464,439656
Property, plant and equipment and other assets . . . . . . . . . . . . . . . .
180,922
208,983
2,127
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
332,779
413,728
4,212
Gross deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,127,933
1,593,667
16,224
Less - Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(82,191)(208,627)(2,124)
Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,045,742
1,385,040
14,100
Deferred tax liabilities
Unrealized gains on securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(279,795)(100,698)(1,025)
Undistributed earnings of foreign subsidiaries . . . . . . . . . . . . . . . . .
(20,980)(13,971)(142)
Undistributed earnings of affiliates accounted for by the equity
method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(586,530)(536,876)(5,466)
Basis difference of acquired assets . . . . . . . . . . . . . . . . . . . . . . . . . .
(37,919)(38,356)(391)
Lease transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(405,028)(472,817)(4,813)Gain on securities contribution to employee retirement benefit
trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(66,523)(66,523)(677)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(80,230)(57,113)(581)
Gross deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,477,005) (1,286,354) (13,095)
Net deferred tax asset (liability) . . . . . . . . . . . . . . . . . . . . . . . . ¥ (431,263) ¥98,686 $ 1,005
F-29

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The valuation allowance mainly relates to deferred tax assets of the consolidated subsidiaries with operating
loss carryforwards for tax purposes that are not expected to be realized. The net changes in the total valuation
allowance for deferred tax assets for the years ended March 31, 2007, 2008 and 2009 consist of the following:
Yen in millions

For the years ended March 31,
2007
2008
2009

U.S. dollars
in millions
For the year
ended
March 31,2009

Valuation allowance at beginning of year . . . . . . . . . . . . . . . . . . . ¥ 93,629 ¥ 95,225 ¥ 82,191
Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16,967
4,783
145,707
Deductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(20,429) (13,508)(3,511)Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,058(4,309) (15,760)

$ 837
1,483
(36)
(160)

Valuation allowance at end of year . . . . . . . . . . . . . . . . . . . . . . . .

$2,124¥ 95,225¥ 82,191¥208,627

The other amount includes the impact of consolidation and deconsolidation of certain entities due tochanges in ownership interest and currency translation adjustments during the years ended March 31, 2007, 2008
and 2009.
The deferred tax assets and liabilities that comprise the net deferred tax asset (liability) are included in the
consolidated balance sheets as follows:
Yen in millions
March 31,
2008
2009

U.S. dollars
in millions
March 31,2009

563,220
111,477¥ 605,331
149,511$ 6,162
1,523(6,954)(1,099,006)(13,863)(642,293)(141)(6,539)¥ (431,263) ¥ 98,686$ 1,005

Deferred tax assets
Deferred income taxes (Current assets) . . . . . . . . . . . . . . . . . . . . . . . . ¥Investments and other assets - other . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes (Long-term liabilities) . . . . . . . . . . . . . . . . . .
Net deferred tax asset (liability) . . . . . . . . . . . . . . . . . . . . . . . . .

Because management intends to reinvest undistributed earnings of foreign subsidiaries to the extent not
expected to be remitted in the foreseeable future, management has made no provision for income taxes on those
undistributed earnings aggregating ¥2,363,721 million ($24,063 million) as of March 31, 2009. Toyota estimatesan additional tax provision of ¥89,119 million ($907 million) would be required if the full amount of those
undistributed earnings were remitted.
Operating loss carryforwards for tax purposes attributed to consolidated subsidiaries as of March 31, 2009were approximately ¥811,588 million ($8,262 million) and are available as an offset against future taxable
income of such subsidiaries. The majority of these carryforwards expire in years 2010 to 2029.

F-30

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Toyota adopted FIN 48 on April 1, 2007. A summary of the gross unrecognized tax benefits changes for theyears ended March 31, 2008 and 2009 is as follows:
Yen in millions

For the year ended March 31,
2008
2009

U.S. dollars
in millions
For the year
ended
March 31,2009

Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions (reductions) based on tax positions related to the current
year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions for tax positions of prior years . . . . . . . . . . . . . . . . . . . . . . . . .
Reductions for tax positions of prior years . . . . . . . . . . . . . . . . . . . . . . . .
Reductions for tax positions related to lapse of statute of limitations . . . .
Reductions for settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥29,639¥ 37,722

$ 384

(424)
25,954(8,771)(30)(4,618)(4,028)858
35,464(24,061)
(114)
(128)
(2,938)

8
361
(245)
(1)
(1)
(30)

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥37,722¥ 46,803$ 476

The amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was notmaterial at March 31, 2008 and 2009, respectively. Toyota does not believe it is reasonably possible that the total
amounts of unrecognized tax benefits will significantly increase or decrease within the next twelve months.
Interest and penalties related to income tax liabilities are included in “Other income (loss), net”. The
amounts of interest and penalties accrued as of and recognized for the years ended March 31, 2008 and 2009,
respectively, were not material.
Toyota remains subject to income tax examination for the tax returns related to the years beginning on andafter January 1, 2000, with various tax jurisdictions including Japan.
17. Shareholders’ equity:
Changes in the number of shares of common stock issued have resulted from the following:
2007

For the years ended March 31,
2008
2009

Common stock issued
Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . .
Issuance during the year . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase and retirement . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,609,997,492——

3,609,997,492 3,447,997,492——(162,000,000)—

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . .

3,609,997,492

3,447,997,492

3,447,997,492

The Corporation Act provides that an amount equal to 10% of distributions from surplus paid by the parent
company and its Japanese subsidiaries be appropriated as a capital reserve or a retained earnings reserve. No
further appropriations are required when the total amount of the capital reserve and the retained earnings reserve
reaches 25% of stated capital.

F-31

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The retained earnings reserve included in retained earnings as of March 31, 2008 and 2009 was¥160,229 million and ¥167,722 million ($1,707 million), respectively. The Corporation Act provides that theretained earnings reserve of the parent company and its Japanese subsidiaries is restricted and unable to be used
for dividend payments, and is excluded from the calculation of the profit available for dividend.
The amounts of statutory retained earnings of the parent company available for dividend payments toshareholders were ¥6,073,271 million and ¥5,624,709 million ($57,261 million) as of March 31, 2008 and 2009,
respectively. In accordance with customary practice in Japan, the distributions from surplus are not accrued in thefinancial statements for the corresponding period, but are recorded in the subsequent accounting period after
shareholders’ approval has been obtained. Retained earnings at March 31, 2009 include amounts representing
year-end cash dividends of ¥109,756 million ($1,117 million), ¥35 ($0.36) per share, which were approved at theOrdinary General Shareholders’ Meeting, held on June 23, 2009.
Retained earnings at March 31, 2009 include ¥1,363,044 million ($13,876 million) relating to equity inundistributed earnings of companies accounted for by the equity method.
On June 23, 2005, at the Ordinary General Shareholders’ Meeting, the shareholders of the parent company
approved to purchase up to 65 million shares of its common stock at a cost up to ¥250,000 million during theperiod until the next Ordinary General Shareholders’ Meeting which was held on June 23, 2006. As a result, theparent company repurchased approximately 38 million shares during the approved period of time.
On June 23, 2006, at the Ordinary General Shareholders’ Meeting, the shareholders of the parent company
approved to purchase up to 30 million shares of its common stock at a cost up to ¥200,000 million during thepurchase period of one year from the following day. As a result, the parent company repurchased approximately
28 million shares during the approved period of time.
On June 22, 2007, at the Ordinary General Shareholders’ Meeting, the shareholders of the parent company
approved to purchase up to 30 million shares of its common stock at a cost up to ¥250,000 million during thepurchase period of one year from the following day. As a result, the parent company repurchased 30 million
shares during the approved period of time.
On February 5, 2008, the Board of Directors resolved to purchase up to 12 million shares of its common
stock at a cost up to ¥60,000 million in accordance with the Corporation Act. As a result, the parent company
repurchased approximately 10 million shares.
On the same date, the Board of Directors also resolved to retire 162 million shares of its common stock, andthen the parent company retired its common stock on March 31, 2008. This retirement, in accordance with the
Corporation Act and related regulations, is treated as a reduction from additional paid-in capital and retained
earnings. As a result, treasury stock, additional paid-in capital and retained earnings decreased by¥646,681 million, ¥3,499 million and ¥643,182 million, respectively.
On June 24, 2008, at the Ordinary General Shareholders’ Meeting, the shareholders of the parent company
approved to purchase up to 30 million shares of its common stock at a cost up to ¥200,000 million during thepurchase period of one year from the following day. As a result, the parent company repurchased approximately
14 million shares during the approved period of time. These approvals by the shareholders are not required under
the current regulation.

F-32

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Detailed components of accumulated other comprehensive income (loss) at March 31, 2008 and 2009 andthe related changes, net of taxes for the years ended March 31, 2007, 2008 and 2009 consist of the following:
Foreigncurrencytranslation
adjustments

Balances at March 31, 2006 . . . . . . . . . . . . . .

Unrealized
gains onsecurities¥(170,924) ¥ 620,008

Yen in millions
Minimum
pensionPensionliability
liability
adjustments adjustments

Accumulated
othercomprehensive
income (loss)¥(11,768)¥¥—

437,316

Other comprehensive income . . . . . . . . . . . . . .
Adjustment to initially apply FAS 158 . . . . . . .
Balances at March 31, 2007 . . . . . . . . . . . . . .

130,746—(40,178)

38,800—658,808

3,499
8,269
—

—
82,76082,760173,045
91,029701,390

Other comprehensive income (loss) . . . . . . . . .
Balances at March 31, 2008 . . . . . . . . . . . . . .

(461,189)(501,367)(347,829)
310,979——(133,577)(50,817)(942,595)(241,205)

Other comprehensive income (loss) . . . . . . . . .
Balances at March 31, 2009 . . . . . . . . . . . . . .

(381,303) (293,101)¥(882,670) ¥ 17,878 ¥——(192,172)(866,576)¥(242,989) ¥(1,107,781)

Foreigncurrencytranslation
adjustments

Balances at March 31, 2008 . . . . . . . . . . . . . .
Other comprehensive income (loss) . . . . . . . . .
Balances at March 31, 2009 . . . . . . . . . . . . . .

$$U.S. dollars in millions
Minimum
Unrealized
pensionPensiongains onliability
liability
securities
adjustments adjustments(5,104) $(3,882)(8,986) $3,166 $
(2,984)
182 $

—
—
—

$
$

Accumulated
othercomprehensive
income (loss)(517) $
(1,956)(2,473) $(2,455)(8,822)(11,277)

Tax effects allocated to each component of other comprehensive income (loss) for the years ended
March 31, 2007, 2008 and 2009 are as follows:
Pre-tax
amount

For the year ended March 31, 2007
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . .
Unrealized gains on securities:
Unrealized net holding gains arising for the year . . . . . . . . . . . . .
Less: reclassification adjustments for gains included in net
income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Minimum pension liability adjustments . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . .
For the year ended March 31, 2008
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . .
Unrealized losses on securities:
Unrealized net holding losses arising for the year . . . . . . . . . . . .
Less: reclassification adjustments for gains included in net
income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension liability adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss) . . . . . . . . . . . . . . . . . . .
F-33

¥

¥

Yen in millions
Tax
amountNet-of-tax
amount133,835¥ (3,089) ¥ 130,746

78,055(31,378)

46,677(13,172)
5,295(7,877)5,854(2,355)
3,499
204,572 ¥ (31,527) ¥ 173,045¥ (460,723) ¥(545,555)(466) ¥(461,189)
219,313(326,242)(36,099)
14,512(221,142)
87,565¥(1,263,519) ¥320,924(21,587)(133,577)¥(942,595)

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Pre-tax
amount

For the year ended March 31, 2009
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . .
Unrealized losses on securities:
Unrealized net holding losses arising for the year . . . . . . . . . . . .
Less: reclassification adjustments for losses included in net
loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension liability adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss) . . . . . . . . . . . . . . . . . . .

Yen in millions
Tax
amount¥ (391,873) ¥ 10,570

Net-of-tax
amount¥(381,303)(677,710)

255,890(421,820)

215,249(319,613)(86,530)
127,441

128,719(192,172)¥(1,173,947) ¥307,371¥(866,576)

U.S. dollars in millions
Pre-tax
Tax
Net-of-tax
amountamountamount

For the year ended March 31, 2009
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . .
Unrealized losses on securities:
Unrealized net holding losses arising for the year . . . . . . . . . . . .
Less: reclassification adjustments for losses included in net
loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension liability adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss) . . . . . . . . . . . . . . . . . . .

$$(3,990) $108$(6,899)2,605(4,294)

2,191(3,253)

(881)
1,297

1,310
(1,956)(11,951) $

3,129

$

(3,882)(8,822)

18. Stock-based compensation:
In June 1997, the parent company’s shareholders approved a stock option plan for board members. In June
2001, the shareholders approved an amendment of the plan to include both board members and key employees.
Each year, since the plans’ inception, the shareholders have approved the authorization for the grant of options
for the purchase of Toyota’s common stock. Authorized shares for each year that remain ungranted areunavailable for grant in future years. Stock options granted in and after August 2002 have terms ranging from
6 years to 8 years and an exercise price equal to 1.025 times the closing price of Toyota’s common stock on thedate of grant. These options generally vest 2 years from the date of grant.
On June 23, 2009, at the Ordinary General Shareholders’ Meeting, the shareholders of the parent company
approved the authorization of an additional up to 3,700,000 shares for issuance under the Toyota’s stock option
plan for directors, officers and employees of the parent company, its subsidiaries and affiliates.
For the years ended March 31, 2007, 2008 and 2009, Toyota recognized stock-based compensation expenses
for stock options of ¥1,936 million, ¥3,273 million and ¥3,015 million ($31 million) as selling, general andadministrative expenses.

F-34

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The weighted-average grant-date fair value of options granted during the years ended March 31, 2007, 2008
and 2009 was ¥1,235, ¥1,199 and ¥635 ($6), respectively per share. The fair value of options granted isamortized over the option vesting period in determining net income in the consolidated statements of income.
The grant-date fair value of options granted is estimated using the Black-Scholes option pricing model with thefollowing weighted-average assumptions:

Dividend rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected holding period (years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2007

2008

2009

1.5%
1.4%
27%
5.0

1.7%
1.3%
23%
5.0

3.0%
1.1%
23%
5.0

The following table summarizes Toyota’s stock option activity:
Yen inmillions

Yen

Number ofshares

Weightedaverage
exercise price

Weightedaverageremaining
contractual
life in years

Options outstanding at March 31, 2006 . . . . . . . . . . . . . . . .

4,786,900¥ 4,180

4.52

Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Canceled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,176,000(1,233,100)(437,100)

6,140
4,008
4,590

Options outstanding at March 31, 2007 . . . . . . . . . . . . . . . .

6,292,700

5,175

Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Canceled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,264,000(792,100)(423,000)

7,278
4,208
6,196

Options outstanding at March 31, 2008 . . . . . . . . . . . . . . . .

8,341,600

6,038

Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Canceled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,494,000(119,900)(375,000)

4,726
3,626
6,889

Options outstanding at March 31, 2009 . . . . . . . . . . . . . . . .

11,340,700

Options exercisable at March 31, 2007 . . . . . . . . . . . . . . . . . .
Options exercisable at March 31, 2008 . . . . . . . . . . . . . . . . . .
Options exercisable at March 31, 2009 . . . . . . . . . . . . . . . . . .

1,282,700
2,354,600
4,971,700

Aggregate
intrinsic
value

5.53

¥14,947

5.71¥ 1,753¥ 5,631

5.51¥¥ 3,990¥ 4,225¥ 5,302

2.90
2.76
3.76

¥ 4,567¥ 1,753¥
1

1

The total intrinsic value of options exercised for the years ended March 31, 2007, 2008 and 2009 was¥3,866 million, ¥1,651 million and ¥97 million ($1 million), respectively.
As of March 31, 2009, there were unrecognized compensation expenses of ¥1,677 million ($17 million) for
stock options granted. Those expenses are expected to be recognized over a weighted-average period of
1.0 years.
Cash received from the exercise of stock options for the years ended March 31, 2007, 2008 and 2009 was¥4,942 million, ¥3,333 million and ¥435 million ($4 million), respectively.
F-35

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table summarizes information for options outstanding and options exercisable at March 31,
2009:

Exercise
price
range
Yen

Number ofsharesOutstanding
WeightedWeightedaverage
average
exercise
exercise
price
price
Yen
Dollars¥3,116 - 5,000
5,001 - 7,278

5,690,700
5,650,000¥4,546
6,724

$46
68

5.18
5.85

2,220,700
2,751,000¥4,264
6,140

$43
63

3,116 - 7,278

11,340,700

5,631

57

5.51

4,971,700

5,302

54

Weightedaverageremaining
life
Years

Number ofsharesExercisable
Weightedaverage
exercise
price
Yen

Weightedaverage
exercise
price
Dollars

19. Employee benefit plans:
Pension and severance plans Upon terminations of employment, employees of the parent company and subsidiaries in Japan are entitled,under the retirement plans of each company, to lump-sum indemnities or pension payments, based on current
rates of pay and lengths of service or the number of “points” mainly determined by those. Under normal
circumstances, the minimum payment prior to retirement age is an amount based on voluntary retirement.
Employees receive additional benefits on involuntary retirement, including retirement at the age limit.
Effective October 1, 2004, the parent company amended its retirement plan to introduce a “point” based
retirement benefit plan. Under the new plan, employees are entitled to lump-sum or pension payments
determined based on accumulated “points” vested in each year of service.
There are three types of “points” that vest in each year of service consisting of “service period points” which
are attributed to the length of service, “job title points” which are attributed to the job title of each employee, and“performance points” which are attributed to the annual performance evaluation of each employee. Under normal
circumstances, the minimum payment prior to retirement age is an amount reflecting an adjustment rate applied
to represent voluntary retirement. Employees receive additional benefits upon involuntary retirement, including
retirement at the age limit.
Effective October 1, 2005, the parent company partly amended its retirement plan and introduced the quasi
cash-balance plan under which benefits are determined based on the variable-interest crediting rate rather than
the fixed-interest crediting rate as was in the pre-amended plan.
The parent company and most subsidiaries in Japan have contributory funded defined benefit pension plans,
which are pursuant to the Corporate Defined Benefit Pension Plan Law (CDBPPL). The contributions to theplans are funded with several financial institutions in accordance with the applicable laws and regulations. These
pension plan assets consist principally of investments in government obligations, equity and fixed income
securities, and insurance contracts.
Most foreign subsidiaries have pension plans or severance indemnity plans covering substantially all of theiremployees under which the cost of benefits are currently invested or accrued. The benefits for these plans are
based primarily on lengths of service and current rates of pay.
Toyota uses a March 31 measurement date for its benefit plans.
F-36

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The impact of adopting FAS 158
Toyota adopted the provisions regarding recognition of funded status and disclosure under FAS 158 as ofMarch 31, 2007. Toyota recognized the overfunded or underfunded status of its defined benefit postretirement
plans as prepaid pension and severance costs or accrued pension and severance costs on its consolidated balance
sheet, with corresponding adjustments to accumulated other comprehensive income, net of tax. The impacts ofadopting the provisions of FAS 158 on Toyota’s consolidated balance sheet as of March 31, 2007 are as follows.
The adoption of the provisions had no impact on Toyota’s consolidated statement of income for the year ended
March 31, 2007.
Yen in millions

Investments and other assets – other (Prepaid pension and severance
costs) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses (Accrued pension and severance costs) . . . . . . . . . . .
Accrued pension and severance costs . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive income (loss) (Pre-tax amount) . . . .
Accumulated other comprehensive income (loss) (Net-of-tax
amount) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Amount before
adoption of
FAS 158

FAS 158
Adjustment

Amount after
adoption of
FAS 158¥246,499—
672,154(26,337)¥142,520
30,951(31,568)
133,437¥389,019
30,951
640,586
107,100(8,270)91,02982,759

Information regarding Toyota’s defined benefit plans is as follows:
Yen in millions
March 31,
2008
2009

U.S. dollars
in millions
March 31,2009

¥1,707,969 ¥1,693,155
96,45484,20654,417
52,959767
750(7,619)(2,096)(22,112)(47,272)(55,960)(64,784)(80,761)(84,139)$17,237
857
539
8
(21)
(481)
(660)
(857)

Benefit obligation at end of year . . . . . . . . . . . . . . . . . . . . . . . . .

1,693,155

1,632,779

16,622

Change in plan assets
Fair value of plan assets at beginning of year . . . . . . . . . . . . . . . . . . .
Actual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employer contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan participants’ contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,425,451(206,101)(26,851)
169,543
767(80,761)

1,282,048(307,293)(43,851)
131,412835(84,139)

13,051(3,128)
(446)
1,338
9
(857)

Fair value of plan assets at end of year . . . . . . . . . . . . . . . . . . . .

1,282,048

979,012

9,967

Funded status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 411,107¥ 653,767$ 6,655

Change in benefit obligation
Benefit obligation at beginning of year . . . . . . . . . . . . . . . . . . . . . . . .
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan participants’ contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net actuarial gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-37

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Amounts recognized in the consolidated balance sheet as of March 31, 2008 and 2009 are comprised of thefollowing:
U.S. dollars
in millions
March 31,2009

Yen in millions
March 31,
2008
2009

Accrued expenses (Accrued pension and severance costs) . . . . . . . . . . . . . . .
Accrued pension and severance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments and other assets - other (Prepaid pension and severance
costs) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 30,345
632,297¥ 30,658
634,612

$ 312
6,460

(251,535)(11,503)(117)

Net amount recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 411,107¥653,767$6,655

Amounts recognized in accumulated other comprehensive income (loss) as of March 31, 2008 and 2009 arecomprised of the following:
U.S. dollars
in millions
March 31,2009

Yen in millions
March 31,
2008
2009

Net actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥(217,138) ¥(497,055)
Prior service costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
125,553
109,570
Net transition obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7,458)(5,514)
Net amount recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ (99,043) ¥(392,999)$(5,060)
1,115(56)$(4,001)

The accumulated benefit obligation for all defined benefit pension plans was ¥1,547,218 million and¥1,524,556 million ($15,520 million) at March 31, 2008 and 2009, respectively.
The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for which theaccumulated benefit obligations exceed plan assets are as follows:
Yen in millions
March 31,
2008
2009

Projected benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-38¥508,505
467,42191,723¥1,076,362
1,039,314
614,377

U.S. dollars
in millions
March 31,2009

$10,958
10,5806,254

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Components of the net periodic pension cost are as follows:

For the years ended March 31,
2007
2008
2009

U.S. dollars
in millions
For the year
ended
March 31,2009

¥ 80,414 ¥ 96,454 ¥ 84,206
48,12854,417
52,959(38,139) (43,450) (43,053)(17,301) (17,162) (17,677)
8,299
4,013
5,752
1,944
1,944
1,944

$ 857
539
(438)
(180)
58
20

¥ 83,345$ 856

Yen in millions

Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of prior service costs . . . . . . . . . . . . . . . . . . . . . . . . .
Recognized net actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of net transition obligation . . . . . . . . . . . . . . . . . . . .
Net periodic pension cost . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 96,216¥ 84,131

Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) are as
follows:
Yen in millions

For the year ended March 31,
2008
2009

U.S. dollars
in millions
For the year
ended
March 31,2009

Net actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recognized net actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prior service costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of prior service costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of net transition obligation . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥(227,439)
4,013
7,619
(17,162)
1,944
24,882¥(303,074)
5,752
2,096
(17,677)
1,944
17,003$(3,085)
58
21
(180)
20
173

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

¥(206,143)¥(293,956)$(2,993)

The estimated prior service costs, net actuarial loss and net transition obligations that will be amortized fromaccumulated other comprehensive income (loss) into net periodic pension cost during the year ending March 31,
2010 are ¥(16,200) million ($(165) million), ¥22,400 million ($228 million) and ¥1,900 million ($19 million),
respectively.
Prior to the adoption of the provisions regarding recognition of funded status and disclosure under FAS 158
as of March 31, 2007, Toyota had recorded a minimum pension liability for plans where the accumulated benefit
obligation net of plan assets exceeded the accrued pension and severance costs. Changes in the minimum pension
liability are reflected as adjustments in other comprehensive income for the years ended March 31, 2007 as
follows:
Yen in millions
For the years ended
March 31,2007

Minimum pension liability adjustments, included in other comprehensive income . . . . . . . . . .
F-39¥3,499

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The minimum pension liability recognized as of March 31, 2007 was eliminated upon the adoption of theprovisions regarding recognition of funded status and disclosure under FAS 158, and after the adoption, no
minimum pension liability had been recognized.
Weighted-average assumptions used to determine benefit obligations as of March 31, 2008 and 2009 are as
follows:
March 31,

Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rate of compensation increase . . . . . . . . . . . . . . . . . . . .

2008

2009

2.8%
0.1 - 10.0%

2.8%
0.1 - 10.0%

Weighted-average assumptions used to determine net periodic pension cost for the years ended March 31,
2007, 2008 and 2009 are as follows:
For the years ended March 31,
2007
2008
2009

Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected return on plan assets . . . . . . . . . . . . . . . . . . . .
Rate of compensation increase . . . . . . . . . . . . . . . . . . . .

2.6%
3.0%
0.1 - 11.0%

2.7%
3.4%
0.1 - 10.0%

2.8%
3.6%
0.1 - 10.0%

The expected rate of return on plan assets is determined after considering several applicable factors
including, the composition of plan assets held, assumed risks of asset management, historical results of the
returns on plan assets, Toyota’s principal policy for plan asset management, and forecasted market conditions.
Toyota’s pension plan weighted-average asset allocations as of March 31, 2008 and 2009, by asset category
are as follows:
Plan assets at March 31,
2008
2009

Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

60.5%
25.2
1.3
13.0

49.4%
30.9
0.3
19.4

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

100.0%

100.0%

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 Toyota’s plan asset management guidelines which areestablished to achieve the optimized asset compositions in terms of the long-term overall plan asset management.
Prior to making individual investments, Toyota performs in-depth assessments of corresponding factors
including risks, transaction costs and liquidity of each potential investment under consideration. To measure theperformance of the plan asset management, Toyota establishes bench mark return rates for each individual
investment, combines these individual bench mark rates based on the asset composition ratios within each asset
category, and compares the combined rates with the corresponding actual return rates on each asset category.
Toyota expects to contribute ¥95,270 million ($970 million) to its pension plans in the year ending
March 31, 2010.
F-40

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following pension benefit payments, which reflect expected future service, as appropriate, are expected
to be paid:
Yen in millions

U.S. dollars
in millions

2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
from 2015 to 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 82,172
79,35975,91974,882
77,278431,993

$ 836
808
773
762
787
4,398

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

¥821,603$8,364Years ending March 31,

Postretirement benefits other than pensions and postemployment benefits Toyota’s U.S. subsidiaries provide certain health care and life insurance benefits to eligible retired
employees. In addition, Toyota provides benefits to certain former or inactive employees after employment, but
before retirement. These benefits are currently unfunded and provided through various insurance companies andhealth care providers. The costs of these benefits are recognized over the period the employee provides credited
service to Toyota. Toyota’s obligations under these arrangements are not material.
20. Derivative financial instruments:
Toyota adopted FAS 161 in the fiscal year ended March 31, 2009.
Toyota employs derivative financial instruments, including foreign exchange forward contracts, foreign
currency options, interest rate swaps, interest rate currency swap agreements and interest rate options to manage
its exposure to fluctuations in interest rates and foreign currency exchange rates. Toyota does not use derivatives
for speculation or trading.
Fair value hedges Toyota enters into interest rate swaps and interest rate currency swap agreements mainly to convert its
fixed-rate debt to variable-rate debt. Toyota uses interest rate swap agreements in managing interest rate risk
exposure. Interest rate swap agreements are executed as either an integral part of specific debt transactions or ona portfolio basis. Toyota uses interest rate currency swap agreements to hedge exposure to currency exchange
rate fluctuations on principal and interest payments for borrowings denominated in foreign currencies. Notes andloans payable issued in foreign currencies are hedged by concurrently executing interest rate currency swap
agreements, which involve the exchange of foreign currency principal and interest obligations for each functional
currency obligations at agreed-upon currency exchange and interest rates.
For the years ended March 31, 2007, 2008 and 2009, the ineffective portion of Toyota’s fair value hedge
relationships was not material. For fair value hedging relationships, the components of each derivative’s gain orloss are included in the assessment of hedge effectiveness.

F-41

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Undesignated derivative financial instruments Toyota uses foreign exchange forward contracts, foreign currency options, interest rate swaps, interest ratecurrency swap agreements, and interest rate options, to manage its exposure to foreign currency exchange rate
fluctuations and interest rate fluctuations from an economic perspective, and for which Toyota is unable or has
elected not to apply hedge accounting.
Fair value and gains or losses on derivative financial instruments The following table summarizes the fair values of derivative financial instruments at March 31, 2009:
Yen in millions
March 31, 2009

U.S. dollars
in millions
March 31, 2009

Derivative financial instruments designated as hedging instruments
Interest rate and currency swap agreements
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . .
Investments and other assets - Other . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 35,882
83,014$

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

¥ 118,896$ 1,210

Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ (47,022)(79,634)$ (479)(810)

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

¥(126,656)$(1,289)

Undesignated derivative financial instruments
Interest rate and currency swap agreements
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . .
Investments and other assets - Other . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 58,454
177,487$

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

¥ 235,941$ 2,402

Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ (61,593)(236,877)$ (627)(2,412)

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

¥(298,470)$(3,039)

Foreign exchange forward and option contracts
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . .
Investments and other assets - Other . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 32,443
250

$

330
3

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

¥ 32,693$

333

Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ (25,675)$ (261)

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

¥ (25,675)$ (261)

365
845

595
1,807

The following table summarizes the notional amounts of derivative financial instruments at March 31, 2009:
Yen in millions
March 31, 2009
DesignatedUndesignatedderivative
derivative
financialfinancial
instruments
instruments

U.S. dollars in millions
March 31, 2009
Designated Undesignatedderivative
derivative
financialfinancial
instruments
instruments

Interest rate and currency swap agreements . . . . . . . . . . . .
Foreign exchange forward and option contracts . . . . . . . .

¥1,907,927—¥12,472,179
1,562,876$19,423—$126,969
15,911

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

¥1,907,927¥14,035,055$19,423$142,880

F-42

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table summarizes the gains and losses on derivative financial instruments and hedged items
reported in the consolidated statement of income for the year ended March 31, 2009:
Yen in millions
For the year ended
March 31, 2009
Gains or (losses)
on derivative
Gains orfinancial(losses) on
instruments
hedged items

Derivative financial instruments designated as
hedging instruments – Fair value hedge
Interest rate and currency swap agreements
Cost of financing operations . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . .
Undesignated derivative financial instruments
Interest rate and currency swap agreements
Cost of financing operations . . . . . . . . . . . .
Foreign exchange gain (loss), net . . . . . . . .
Foreign exchange forward and option contracts
Cost of financing operations . . . . . . . . . . . .
Foreign exchange gain (loss), net . . . . . . . .

U.S. dollars in millions
For the year ended
March 31, 2009
Gains or (losses)
on derivative
Gains orfinancial(losses) on
instruments
hedged items¥288,553(439)¥(293,637)
439$2,938(4)$(2,989)4¥ 76,878(3,016)

¥

—
—

$ 783
(31)

$

—
—

187
1,773

18,327
174,158————

Unrealized gains or (losses) on undesignated derivative financial instruments reported in the cost offinancing operations for the years ended March 31, 2007, 2008 and 2009 were ¥(19,984) million,¥(67,991) million and ¥(80,298) million ($(817) million) those reported in foreign exchange gain (loss), net were
¥17,866 million, ¥45,670 million and ¥(33,578) million ($342 million), respectively.
Credit risk related contingent features Toyota enters into International Swaps and Derivatives Association Master Agreements with counterparties.
These Master Agreements contain a provision requiring either Toyota or the counterparty to settle the contract or
to post assets to the other party in the event of a ratings downgrade below a specified threshold.
The aggregate fair value amount of derivative financial instruments that contain credit risk related
contingent features that are in a net liability position as of March 31, 2009 is ¥136,147 million ($1,386 million).
The aggregate fair value amount of assets that are already posted as of March 31, 2009 is ¥28,978 million ($295
million). If the ratings of Toyota decline below specified thresholds, the maximum amount of assets to be posted
or for which Toyota could be required to settle the contracts is ¥136,147 million ($1,386 million) as of March 31,
2009.
21. Other financial instruments:
Toyota has certain financial instruments, including financial assets and liabilities and off-balance sheet
financial instruments which arose in the normal course of business. These financial instruments are executed withcreditworthy financial institutions, and virtually all foreign currency contracts are denominated in U.S. dollars,
euros and other currencies of major industrialized countries. Financial instruments involve, to varying degrees,market risk as instruments are subject to price fluctuations, and elements of credit risk in the event a counterparty
F-43

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
should default. In the unlikely event the counterparties fail to meet the contractual terms of a foreign currency oran 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 the nature of its counterparties. Counterparties to Toyota’s financial
instruments represent, in general, international financial institutions. Additionally, Toyota does not have asignificant exposure to any individual counterparty. Based on the creditworthiness of these financial institutions,collateral is generally not required of the counterparties or of Toyota. Toyota believes that the overall credit risk
related to its financial instruments is not significant.
The estimated fair values of Toyota’s financial instruments, excluding marketable securities and othersecurities investments and affiliated companies, are summarized as follows:
Yen in millions
March 31, 2008
Carrying
Estimatedamountfair value

Asset (Liability)
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . ¥ 1,628,547 ¥ 1,628,547
Time deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
134,773
134,773
Total finance receivables, net . . . . . . . . . . . . . . . . . . . . .
9,132,242
9,287,490
Other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
523,533
523,533
Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,552,721) (3,552,721)
Long-term debt including the current portion . . . . . . . . .
(8,613,799) (8,646,182)
Interest rate and currency swap agreements . . . . . . . . . .
223,163
223,163
Foreign exchange forward contracts and option
contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
40,63540,635
Yen in millions
March 31, 2009
Carrying
Estimatedamountfair value

Asset (Liability)
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . .
Time deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total finance receivables, net . . . . . . . . . . . . . . . . . . . . .
Other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt including the current portion . . . . . . . . .

U.S. dollars in millions
March 31, 2009
Carrying
Estimatedamountfair value¥ 2,444,280 ¥ 2,444,280 $ 24,883 $ 24,883
45,17845,178460
460
8,450,709
8,677,228
86,03088,336
332,722332,7223,387
3,387(3,617,672) (3,617,672) (36,829) (36,829)(8,949,615) (9,026,007) (91,109) (91,886)

See note 20 to the consolidated financial statements for the amounts of derivative financial instruments.
Following are explanatory notes regarding the financial assets and liabilities other than derivative financial
instruments.
Cash and cash equivalents, time deposits and other receivables In the normal course of business, substantially all cash and cash equivalents, time deposits and otherreceivables are highly liquid and are carried at amounts which approximate fair value.

F-44

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Finance receivables, net The carrying value of variable rate finance receivables was assumed to approximate fair value as they wererepriced at prevailing market rates at March 31, 2008 and 2009. The fair value of fixed rate finance receivables
was estimated by discounting expected cash flows using the rates at which loans of similar credit quality andmaturity would be made as of March 31, 2008 and 2009.
Short-term borrowings and long-term debt The fair values of short-term borrowings and total long-term debt including the current portion were
estimated based on the discounted amounts of future cash flows using Toyota’s current incremental borrowing
rates for similar liabilities.
22. Lease commitments:
Toyota leases certain assets under capital lease and operating lease arrangements.
An analysis of leased assets under capital leases is as follows:

Class of property
Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Machinery and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less - Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Yen in millions
March 31,
2008
2009

U.S. dollars
in millions
March 31,2009

¥ 11,279 ¥ 24,369
136,817
51,971(116,019) (33,845)

$ 248
529
(344)

¥ 32,077$ 433¥ 42,495

Amortization expenses under capital leases for the years ended March 31, 2007, 2008 and 2009 were
¥10,559 million, ¥7,846 million and ¥12,183 million ($124 million), respectively.
Future minimum lease payments under capital leases together with the present value of the net minimum
lease payments as of March 31, 2009 are as follows:
Yen in millions

U.S. dollars
in millions

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

¥ 12,688
24,166
4,071
2,141
1,867
17,545

$ 129
246
41
22
19
179

Total minimum lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less - Amount representing interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

62,478(11,112)

636
(113)

Present value of net minimum lease payments . . . . . . . . . . . . . . . . . . . . . . . .
Less - Current obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

51,366(11,188)

523
(114)

Long-term capital lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 40,178$ 409

Years ending March 31,

F-45

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Rental expenses under operating leases for the years ended March 31, 2007, 2008 and 2009 were¥107,301 million, ¥100,319 million and ¥106,653 million ($1,086 million), respectively.
The minimum rental payments required under operating leases relating primarily to land, buildings andequipment having initial or remaining non-cancelable lease terms in excess of one year at March 31, 2009 are as
follows:
Yen in millions

U.S. dollars
in millions

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

¥11,567
8,593
6,864
5,530
3,973
17,634

$118
87
70
56
40
180

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

¥54,161$551

Years ending March 31,

23. Other commitments and contingencies, concentrations and factors that may affect future operations:
Commitments outstanding at March 31, 2009 for the purchase of property, plant and equipment and otherassets totaled ¥110,874 million ($1,129 million).
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 at March 31, 2009,
range from 1 month to 35 years; however, they are generally shorter than the useful lives of products sold.
Toyota is required to execute its guarantee primarily when customers are unable to make required payments. The
maximum potential amount of future payments as of March 31, 2009 is ¥1,570,497 million ($15,988 million).
Liabilities for guarantees totaling ¥5,301 million ($54 million) have been provided as of March 31, 2009. Under
these guarantee contracts, Toyota is entitled to recover any amount paid by Toyota from the customers whose
original obligations Toyota has guaranteed.
In February 2003, Toyota, General Motors Corporation, Ford, DaimlerChrysler, Honda, Nissan and BMW
and their U.S. and Canadian sales and marketing subsidiaries, the National Automobile Dealers Association and
the Canadian Automobile Dealers Association were named as defendants in purported nationwide class actions
on behalf of all purchasers of new motor vehicles in the United States since January 1, 2001. 26 similar actions
were filed in federal district courts in California, Illinois, New York, Massachusetts, Florida, New Jersey and
Pennsylvania. Additionally, 56 parallel class actions were filed in state courts in California, Minnesota, New
Mexico, New York, Tennessee, Wisconsin, Arizona, Florida, Iowa, New Jersey and Nebraska on behalf of thesame purchasers in these states. As of April 1, 2005, actions filed in federal district courts were consolidated in
Maine and actions filed in the state courts of California and New Jersey were also consolidated, respectively.
The nearly identical complaints allege that the defendants violated the Sherman Antitrust Act by conspiring
among themselves and with their dealers to prevent the sale to United States citizens of vehicles produced for the
Canadian market. The complaints allege that new vehicle prices in Canada are 10% to 30% lower than those in
the United States and that preventing the sale of these vehicles to United States citizens resulted in United States
consumers paying excessive prices for the same type of vehicles. The complaints seek permanent injunctions
against the alleged antitrust violations and treble damages in an unspecified amount. In March 2004, the federal
F-46

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
district court of Maine (i) dismissed claims against certain Canadian sales and marketing subsidiaries, including
Toyota Canada, Inc., for lack of personal jurisdiction but denied or deferred to dismiss claims against certain
other Canadian companies, and (ii) dismissed the claim for damages based on the Sherman Antitrust Act but did
not bar the plaintiffs from seeking injunctive relief against the alleged antitrust violations. The plaintiffs havesubmitted an amended compliant adding a claim for damages based on state antitrust laws and Toyota has
responded to the plaintiff’s discovery requests. Toyota believes that its actions have been lawful. In the interestof quickly resolving these legal actions, however, Toyota entered into a settlement agreement with the plaintiffs
at the end of February 2006. The settlement agreement is pending the approval of the federal district court, andimmediately upon approval the plaintiffs will, in accordance with the terms of the settlement agreement,
withdraw all pending actions against Toyota in the federal district court as well as all state courts and all related
actions will be closed.
Toyota has various other legal actions, governmental proceedings and other claims pending against it,
including product liability claims in the United States. Although the claimants in some of these actions seek
potentially substantial damages, Toyota cannot currently determine its potential liability or the damages, if any,
with respect to these claims. However, based upon information currently available to Toyota, Toyota believes
that its losses from these matters, if any, would not have a material adverse effect on Toyota’s financial position,
operating results or cash flows.
In October 2000, the European Union brought into effect a directive that requires member states topromulgate regulations implementing the following: (i) manufacturers shall bear all or a significant part of thecosts for taking back end-of-life vehicles put on the market after July 1, 2002 and dismantling and recycling
those vehicles. Beginning January 1, 2007, this requirement became applicable to vehicles put on the market
before July 1, 2002; (ii) manufacturers may not use certain hazardous materials in vehicles to be sold after July
2003; (iii) vehicles type-approved and put on the market after December 15, 2008, shall be re-usable and/or
recyclable to a minimum of 85% by weight per vehicle and shall be re-usable and/or recoverable to a minimumof 95% by weight per vehicle; and (iv) end-of-life vehicles must meet actual re-use of 80% and re-use as material
or energy of 85%, respectively, of vehicle weight by 2006, rising respectively to 85% and 95% by 2015. A law toimplement the directive came into effect in all member states including Bulgaria, Romania that joined theEuropean Union in January 2007. Currently, there are uncertainties surrounding the implementation of theapplicable regulations in different European Union member states, particularly regarding manufacturer
responsibilities and resultant expenses that may be incurred.
In addition, under this directive member states must take measures to ensure that car manufacturers,
distributors and other auto-related economic operators establish adequate used vehicle collection and treatment
facilities and to ensure that hazardous materials and recyclable parts are removed from vehicles prior toshredding. This directive impacts Toyota’s vehicles sold in the European Union and Toyota is introducing
vehicles that are in compliance with such measures taken by the member states pursuant to the directive.
Based on the legislation that has been enacted to date, Toyota has provided for its estimated liability related
to covered vehicles in existence as of March 31, 2009. Depending on the legislation that will be enacted subject
to other circumstances, Toyota may be required to revise the accruals for the expected costs. Although Toyota
does not expect its compliance with the directive to result in significant cash expenditures, Toyota is continuing
to assess the impact of this future legislation on its results of operations, cash flows and financial position.
Toyota purchases materials that are equivalent to approximately 10% of material costs from a supplier
which is an affiliated company.

F-47

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The parent company has a concentration of labor supply in employees working under collective bargaining
agreements and a substantial portion of these employees are working under the agreement that will expire on
December 31, 2011.
24. Segment data:
The operating segments reported below are the segments of Toyota for which separate financial information
is available and for which operating income/loss amounts are evaluated regularly by executive management indeciding how to allocate resources and in assessing performance.
The major portions of Toyota’s operations on a worldwide basis are derived from the Automotive andFinancial Services business segments. The Automotive segment designs, manufactures and distributes sedans,
minivans, compact cars, sport-utility vehicles, trucks and related parts and accessories. The Financial Services
segment consists primarily of financing, and vehicle and equipment leasing operations to assist in themerchandising of the parent company and its affiliate companies products as well as other products. The All
Other segment includes the design, manufacturing and sales of housing, telecommunications and other business.
The following tables present certain information regarding Toyota’s industry segments and operations bygeographic areas and overseas revenues by destination as of and for the years ended March 31, 2007, 2008 and2009.
Segment operating results and assets As of and for the year ended March 31, 2007:
Yen in millions

Automotive

Financial
Services

All Other

Inter-segment
Elimination/
UnallocatedAmountConsolidated

Net revenues
Sales to external customers . . . . . . . . ¥21,914,168 ¥ 1,277,994 ¥ 755,929 ¥— ¥23,948,091
Inter-segment sales and transfers . . . .
13,83822,554
567,802(604,194)—
Total . . . . . . . . . . . . . . . . . . . . . .
Operating expenses . . . . . . . . . . . . . .

21,928,006
19,889,178

Operating income . . . . . . . . . . . . . . . . ¥ 2,038,828 ¥

1,300,548
1,142,053
158,495 ¥1,323,731
1,284,052
39,679 ¥(604,194)(605,875)

23,948,091
21,709,408

1,681 ¥ 2,238,683

Assets . . . . . . . . . . . . . . . . . . . . . . . . . ¥13,297,362 ¥13,735,434 ¥1,459,965 ¥4,082,018 ¥32,574,779
Investment in equity method
investees . . . . . . . . . . . . . . . . . . . . .
1,664,938
303,271—
59,072
2,027,281
Depreciation expenses . . . . . . . . . . . .
950,762
402,876
28,956—
1,382,594
Capital expenditure . . . . . . . . . . . . . .
1,570,875
1,122,564
47,948(51,192)
2,690,195

F-48

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
As of and for the year ended March 31, 2008:
Yen in millions

Automotive

Financial
Services

All Other

Inter-segment
Elimination/
UnallocatedAmountConsolidated

Net revenues
Sales to external customers . . . . . . . . ¥24,160,254 ¥ 1,468,730 ¥ 660,256 ¥— ¥26,289,240
Inter-segment sales and transfers . . . .
17,052
29,624
686,699(733,375)—
Total . . . . . . . . . . . . . . . . . . . . . .
Operating expenses . . . . . . . . . . . . . .

24,177,306
22,005,401

Operating income . . . . . . . . . . . . . . . . ¥ 2,171,905 ¥

1,498,354
1,411,860

1,346,955
1,313,875

86,494 ¥(733,375)(712,271)

26,289,240
24,018,865

33,080 ¥ (21,104) ¥ 2,270,375

Assets . . . . . . . . . . . . . . . . . . . . . . . . . ¥13,593,025 ¥13,942,372 ¥1,273,560 ¥3,649,363 ¥32,458,320
Investment in equity method
investees . . . . . . . . . . . . . . . . . . . . .
1,777,956
235,166—
52,656
2,065,778
Depreciation expenses . . . . . . . . . . . .
1,050,541
409,725
30,869—1,491,135
Capital expenditure . . . . . . . . . . . . . .
1,546,524
1,149,842
56,4397,170
2,759,975
As of and for the year ended March 31, 2009:
Yen in millions

Automotive

Financial
Services

All Other

Inter-segment
Elimination/
UnallocatedAmountConsolidated

Net revenues
Sales to external customers . . . . . . . . ¥18,550,501 ¥ 1,355,850 ¥ 623,219 ¥— ¥20,529,570
Inter-segment sales and transfers . . . .
14,222
21,698561,728(597,648)—
Total . . . . . . . . . . . . . . . . . . . . . .
Operating expenses . . . . . . . . . . . . . .

18,564,723
18,959,599

Operating income (loss) . . . . . . . . . . . ¥ (394,876) ¥1,377,548
1,449,495(71,947) ¥1,184,947
1,175,034
9,913 ¥

(597,648)(593,547)

20,529,570
20,990,581(4,101) ¥ (461,011)

Assets . . . . . . . . . . . . . . . . . . . . . . . . . ¥11,716,316 ¥13,631,662 ¥1,131,400 ¥2,582,659 ¥29,062,037
Investment in equity method
investees . . . . . . . . . . . . . . . . . . . . .
1,606,013
168,057—
36,036
1,810,106
Depreciation expenses . . . . . . . . . . . .
1,072,848
389,937
32,385—
1,495,170
Capital expenditure . . . . . . . . . . . . . .
1,343,572
883,968
35,33462,0232,324,897

F-49

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Automotive

U.S. dollars in millions
Inter-segment
Elimination/
Financial
UnallocatedServices
All OtherAmountConsolidated

Net revenues
Sales to external customers . . . . . . . . .
Inter-segment sales and transfers . . . . .

$188,848
144$ 13,803
221$ 6,344
5,719—(6,084)$208,995—

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

188,992
193,012

14,024
14,756

12,063
11,962(6,084)(6,042)208,995
213,688

Operating income (loss) . . . . . . . . . . . .

$ (4,020)$(42)$ (4,693)

Assets . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment in equity method
investees . . . . . . . . . . . . . . . . . . . . . .
Depreciation expenses . . . . . . . . . . . . .
Capital expenditure . . . . . . . . . . . . . . .

$119,274$138,773$11,518$26,292$295,857

16,35010,922
13,678

1,711
3,970
8,999

—
329
360

366
—
631

18,427
15,221
23,668

(732)

$

101

$

$

Geographic Information As of and for the year ended March 31, 2007:
Yen in millions

Japan

North
America

Europe

Asia

Other

Net revenues
Sales to external customers . . . . . ¥ 8,152,884 ¥ 8,771,495 ¥3,346,013 ¥1,969,957 ¥1,707,742
Inter-segment sales andtransfers . . . . . . . . . . . . . . . . . .
6,662,398
258,278
196,180
255,571
215,000
Total . . . . . . . . . . . . . . . . . . .
Operating expenses . . . . . . . . . . .

14,815,282
13,358,036

Operating income . . . . . . . . . . . . . ¥ 1,457,246 ¥9,029,773
8,580,140

3,542,193
3,404,810

2,225,528
2,107,933

Inter-segment
Elimination/
UnallocatedAmountConsolidated¥

83,497

Assets . . . . . . . . . . . . . . . . . . . . . . ¥12,992,379 ¥10,890,157 ¥2,917,183 ¥1,563,742 ¥1,575,255
Long-lived assets . . . . . . . . . . . . .
3,490,846
2,931,037
566,353
466,338
309,465¥23,948,091(7,587,427)—(7,587,427)(7,580,756)

23,948,091
21,709,408(6,671)¥ 2,238,683¥ 2,636,063—¥32,574,779
7,764,039

1,922,742
1,839,245

449,633 ¥ 137,383 ¥ 117,595 ¥—¥As of and for the year ended March 31, 2008:
Yen in millions

Japan

North
America

Europe

Asia

Other

Net revenues
Sales to external customers . . . . . ¥ 8,418,620 ¥ 9,248,950 ¥3,802,814 ¥2,790,987 ¥2,027,869
Inter-segment sales andtransfers . . . . . . . . . . . . . . . . . .
6,897,192
174,308
190,620
329,839
266,268
Total . . . . . . . . . . . . . . . . . . .
Operating expenses . . . . . . . . . . .

15,315,812
13,875,526

Operating income . . . . . . . . . . . . . ¥ 1,440,286 ¥9,423,258
9,117,906

3,993,434
3,851,863

3,120,826
2,864,470¥

Assets . . . . . . . . . . . . . . . . . . . . . . ¥12,883,255 ¥10,779,947 ¥3,125,572 ¥1,792,681 ¥1,703,533
Long-lived assets . . . . . . . . . . . . .
3,696,081
2,808,782
574,854446,513285,772—¥26,289,240(7,858,227)—(7,858,227)(7,841,059)

26,289,240
24,018,865(17,168)¥ 2,270,375¥ 2,173,332—¥32,458,320
7,812,002

2,294,137
2,150,159

305,352 ¥ 141,571 ¥ 256,356 ¥ 143,978F-50

Inter-segment
Elimination/
UnallocatedAmountConsolidated¥

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
As of and for the year ended March 31, 2009:
Yen in millions

Japan

North
America

Europe

Asia

Other

Net revenues
Sales to external customers . . . . . ¥ 7,471,916 ¥ 6,097,676 ¥2,889,753 ¥2,450,412 ¥1,619,813
Inter-segment sales andtransfers . . . . . . . . . . . . . . . . . .
4,714,821
125,238
123,375
268,917
263,087
Total . . . . . . . . . . . . . . . . . . .
Operating expenses . . . . . . . . . . .

12,186,737
12,424,268

6,222,914
6,613,106

3,013,128
3,156,361

2,719,329
2,543,269

Operating income (loss) . . . . . . . . ¥ (237,531) ¥ (390,192) ¥ (143,233) ¥ 176,060 ¥Inter-segment
Elimination/
UnallocatedAmountConsolidated¥

87,648¥20,529,570(5,495,438)—(5,495,438)(5,541,675)

20,529,570
20,990,581

46,237¥ (461,011)¥ 1,101,217—¥29,062,037
7,401,681

1,882,900
1,795,252

Assets . . . . . . . . . . . . . . . . . . . . . . ¥11,956,431 ¥10,685,466 ¥2,324,528 ¥1,547,890 ¥1,446,505
Long-lived assets . . . . . . . . . . . . .
3,658,719
2,726,419
410,185
372,330
234,028—¥

U.S. dollars in millions

Japan
Net revenues
Sales to external customers . . . . . $Inter-segment sales andtransfers . . . . . . . . . . . . . . . . . .

76,066 $North
America

Europe62,075 $29,418 $Asia
24,946 $Other
16,490Inter-segment
Elimination/
UnallocatedAmountConsolidated$—$

208,995

47,997

1,275

1,256

2,737

2,679

(55,944)—

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

124,063
126,481

63,35067,32230,67432,132

27,68325,891

19,16918,277(55,944)(56,415)

208,995
213,688

Operating income (loss) . . . . . . . . $(2,418) $(3,972) $(1,458) $1,792 $

892

$

471

$

(4,693)

Assets . . . . . . . . . . . . . . . . . . . . . . $Long-lived assets . . . . . . . . . . . . .

121,719 $
37,246

108,780 $
27,75523,664 $
4,176

15,758 $3,790

14,726
2,383$

11,210—$295,857
75,350“Other” consists of Central and South America, Oceania and Africa.
Revenues are attributed to geographies based on the country location of the parent company or thesubsidiary that transacted the sale with the external customer.
There are no any individually material countries with respect to revenues, operating expenses, operating
income, assets and long-lived assets included in other foreign countries.
Unallocated amounts included in assets represent assets held for corporate purposes, which mainly consistof cash and cash equivalents and marketable securities. Such corporate assets were ¥4,758,410 million,¥4,352,498 million and ¥3,225,901 million ($32,840 million), as of March 31, 2007, 2008 and 2009,
respectively.
Transfers between industries or geographic segments are made at amounts which Toyota’s management
believes approximate arm’s-length transactions. In measuring the reportable segments’ income or losses,
operating income consists of revenue less operating expenses.

F-51

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Overseas Revenues by destination The following information shows revenues that are attributed to countries based on location of customers,
excluding customers in Japan. In addition to the disclosure requirements under FAS No. 131, Disclosure about
Segments of an Enterprise and Related Information (“FAS 131”), Toyota discloses this information in order toprovide financial statement users with valuable information.
Yen in millions

For the years ended March 31,
2007
2008
2009

North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥9,039,560
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,345,001
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,248,031
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,168,580¥9,606,481
3,746,362
2,968,460
3,831,739¥6,294,230
2,861,351
2,530,352
3,421,881“Other” consists of Central and South America, Oceania, Africa and the Middle East, etc.

F-52

U.S. dollars
in millions
For the year
ended
March 31,2009

$64,076
29,12925,76034,835TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Certain financial statement data on non-financial services and financial services businesses The financial data below presents separately Toyota’s non-financial services and financial services
businesses.
Balance sheets –Yen in millions
March 31,
2008
2009

Non-Financial Services Businesses
Current assets
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade accounts and notes receivable, less allowance for
doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other current assets . . . . . . . . . . . . . . . .

U.S. dollars
in millions
March 31,2009

¥ 1,473,101
526,801¥ 1,648,143
494,476$ 16,778
5,034

2,077,491
1,825,716
1,676,263

1,404,292
1,459,394
1,534,119

14,296
14,857
15,618

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

7,579,372

6,540,424

66,583

Investments and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,064,286
5,773,370

4,254,126
5,504,559

43,30856,037

Total Non-Financial Services Businesses assets . . . . . . .

19,417,028

16,299,109

165,928

Financial Services Businesses
Current assets
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other current assets . . . . . . . . . . . . . . . .

155,446
15,4094,301,142
793,434

796,137850
3,891,406
790,901

8,105
939,615
8,051

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

5,265,431

5,479,294

55,780Noncurrent finance receivables, net . . . . . . . . . . . . . . . . . . . . . . . .
Investments and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,974,756
663,553
2,038,632

5,655,545
599,701
1,897,122

57,575
6,105
19,313

Total Financial Services Businesses assets . . . . . . . . . . .

13,942,372

13,631,662

138,773

Eliminations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(901,080)(868,734)(8,844)

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

¥32,458,320¥29,062,037$295,857

Assets in the non-financial services include unallocated corporate assets.

F-53

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Yen in millions
March 31,
2008
2009

Non-Financial Services Businesses
Current liabilities
Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of long-term debt . . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥725,563
183,879
2,211,507
1,478,249
299,048
1,208,476¥

825,029
115,942
1,299,523
1,432,988
47,648944,303

U.S. dollars
in millions
March 31,
2009

$

8,399
1,180
13,23014,588485
9,613

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

6,106,722

4,665,433

47,495Long-term liabilities
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued pension and severance costs . . . . . . . . . . . . . . . . . . .
Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . .

391,303627,450
866,741

850,233
629,870444,529

8,656
6,412
4,525

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

1,885,494

1,924,632

19,593

Total Non-Financial Services Businesses liabilities . . . .

7,992,216

6,590,065

67,088Financial Services Businesses
Current liabilities
Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of long-term debt . . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,439,850
2,511,719
17,359133,2236,544
491,441

3,370,981
2,640,104
10,001
111,766
3,650
515,166

34,317
26,877
102
1,138
37
5,244

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

6,600,136

6,651,668

67,715Long-term liabilities
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued pension and severance costs . . . . . . . . . . . . . . . . . . .
Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,726,042
4,847
510,415

5,592,641
4,742
491,397

56,93449
5,002

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

6,241,304

6,088,780

61,985

Total Financial Services Businesses liabilities . . . . . . . .

12,841,440

12,740,448

129,700

Eliminations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(901,530)(869,213)(8,848)

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

19,932,126

18,461,300

187,940

Minority interest in consolidated subsidiaries . . . . . . . . . . . . . . . . .
Shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

656,667
11,869,527

539,530
10,061,207

5,492
102,425

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

¥32,458,320¥29,062,037$295,857

F-54

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Statements of income –Yen in millions

For the years ended March 31,
2007
2008
2009

U.S. dollars
in millions
For the year
ended
March 31,2009

Non-Financial Services Businesses
Net revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥22,679,078 ¥24,831,172 ¥19,182,161 $195,278
Costs and expenses
Cost of revenues . . . . . . . . . . . . . . . . . . . . . . .
18,361,641
20,459,061
17,470,791
177,856
Selling, general and administrative . . . . . . . .
2,230,734
2,181,491
2,097,674
21,355
Total costs and expenses . . . . . . . . . . . .
20,592,375
22,640,552
19,568,465
199,211
Operating income (loss) . . . . . . . . . . . . . . . . . . . . .
2,086,703
2,190,620(386,304)(3,933)
Other income (expense), net . . . . . . . . . . . . . . . . . .
145,570
176,417(71,925)(732)
Income (loss) before income taxes, minority
interest and equity in earnings of affiliatedcompanies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,232,273
2,367,037(458,229)(4,665)
Provision for income taxes . . . . . . . . . . . . . . . . . . .
844,797
889,660(10,152)(104)
Income (loss) before minority interest and equity
in earnings of affiliated companies . . . . . . . . . .
1,387,476
1,477,377(448,077)(4,561)
Minority interest in consolidated subsidiaries . . . .
(49,513)(73,543)
26,282267
Equity in earnings of affiliated companies . . . . . . .
193,130
268,025
53,226542
Net income (loss)- Non-Financial Services
Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,531,093
1,671,859(368,569)(3,752)Financial Services Businesses
Net revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,300,548
1,498,354
1,377,548
14,024
Costs and expenses
Cost of revenues . . . . . . . . . . . . . . . . . . . . . . .
879,203
1,075,972
994,191
10,121
Selling, general and administrative . . . . . . . .
262,850
335,888455,304
4,635
Total costs and expenses . . . . . . . . . . . .
1,142,053
1,411,860
1,449,495
14,756
Operating income (loss) . . . . . . . . . . . . . . . . . . . . .
158,495
86,494(71,947)(732)
Other expense, net . . . . . . . . . . . . . . . . . . . . . . . . .
(8,171)(16,265)(30,233)(308)
Income (loss) before income taxes, minority
interest and equity in earnings of affiliatedcompanies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
150,324
70,229(102,180)(1,040)
Provision for income taxes . . . . . . . . . . . . . . . . . . .
53,54821,904(46,298)(471)
Income (loss) before minority interest and equity
in earnings of affiliated companies . . . . . . . . . .
96,77648,325(55,882)(569)
Minority interest in consolidated subsidiaries . . . .
(174)(4,419)(2,004)(20)
Equity in earnings (losses) of affiliatedcompanies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16,385
2,089(10,502)(107)
Net income (loss)- Financial Services
Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
112,987
45,995(68,388)(696)
Eliminations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(48)
25
20
0
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 1,644,032 ¥ 1,717,879 ¥ (436,937) $ (4,448)
F-55

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Statement of cash flows –Yen in millions
Yen in millions
For the year ended March 31, 2007
For the year ended March 31, 2008
Non-Financial Financial
Non-Financial Financial
Services
Services
Services
Services
Businesses Businesses Consolidated Businesses Businesses Consolidated
Cash flows from operating activities
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 1,531,093 ¥Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation . . . . . . . . . . . . . . . . . . . . . . . .
979,718
Provision for doubtful accounts and credit
losses . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(841)
Pension and severance costs, lesspayments . . . . . . . . . . . . . . . . . . . . . . . . .
(33,319)
Losses on disposal of fixed assets . . . . . . .
49,193
Unrealized losses on available-for-salesecurities, net . . . . . . . . . . . . . . . . . . . . .
4,614
Deferred income taxes . . . . . . . . . . . . . . . .
42,698
Minority interest in consolidated
subsidiaries . . . . . . . . . . . . . . . . . . . . . . .
49,513Equity in earnings of affiliatedcompanies . . . . . . . . . . . . . . . . . . . . . . . .
(193,130)
Changes in operating assets and liabilities,
and other . . . . . . . . . . . . . . . . . . . . . . . . .
182,548
Net cash provided by operating
activities . . . . . . . . . . . . . . . . . . . . .
Cash flows from investing activities
Additions to finance receivables . . . . . . . . . . . . .
Collection of and proceeds from sale of financereceivables . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions to fixed assets excluding equipment
leased to others . . . . . . . . . . . . . . . . . . . . . . . .
Additions to equipment leased to others . . . . . . .
Proceeds from sales of fixed assets excluding
equipment leased to others . . . . . . . . . . . . . . .
Proceeds from sales of equipment leased toothers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of marketable securities and security
investments . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of and maturity ofmarketable securities and security
investments . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payment for additional investments in affiliatedcompanies, net of cash acquired . . . . . . . . . . .
Changes in investments and other assets, andother . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

112,987 ¥ 1,644,032¥ 1,671,859 ¥

45,995 ¥ 1,717,879

402,876

1,382,594

1,081,410

409,725

1,491,135

72,703

71,862357

122,433

122,790

1,265
1,279

(32,054)
50,472(54,868)
44,993527
444(54,341)
45,437—89,643

4,614
132,308

11,34680,027—1,500

11,34681,458174

49,68773,543

4,419

77,962(16,385)(209,515)(268,025)(2,089)(270,114)

125,700

144,173(220,217)

215,218(241,928)

790,2423,238,173

2,420,425

798,172

2,981,624—(14,192,154) (7,489,096)—(16,644,139) (8,647,717)—

12,814,669—

15,095,380

2,612,087(1,414,468)(153,163)

6,274,744(11,346) (1,425,814)(1,111,218) (1,264,381)(1,472,422)(137,711)

7,332,697(8,148) (1,480,570)(1,141,694) (1,279,405)

56,0408,381

64,42156,603

10,94867,551

107,270

214,491

321,761

80,944294,937

375,881(889,008)(179,197) (1,068,205)(936,324)(215,316) (1,151,640)

708,130

117,041

825,171789,366

198,044987,410(1,651)—(1,651)(4,406)—(4,406)(21,751)

15,250(51,328)(44,891)

23,024(74,687)

Net cash used in investing
activities . . . . . . . . . . . . . . . . . . . . .

(1,608,601)(2,324,083) (3,814,378)(1,668,841)(2,386,964) (3,874,886)

Cash flows from financing activities
Purchase of common stock . . . . . . . . . . . . . . . . .
Proceeds from issuance of long-term debt . . . . .
Payments of long-term debt . . . . . . . . . . . . . . . .
Increase (decrease) in short-term borrowings . . .
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . .

(295,699)
31,509(41,833)(83,651)(339,107)—(295,699)
2,897,028 2,890,000(1,694,407) (1,726,823)
362,078
353,397—(339,107)(311,667)
17,162(226,561)
24,126(430,860)—(311,667)
3,364,351 3,349,812(2,156,709) (2,310,008)
370,293408,912—(430,860)

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

(728,781)

1,564,699

881,768(927,800)

1,577,935

706,189

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

21,9953,434

25,429(65,405)(19,354)(84,759)

Net increase (decrease) in cash and cash
equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at beginning of year . . . . .

296,700
1,418,022

34,292
151,365

330,992
1,569,387(241,621)
1,714,722(30,211)
185,657(271,832)
1,900,379

Cash and cash equivalents at end of year . . . . . . . . . . ¥ 1,714,722 ¥

F-56

185,657 ¥ 1,900,379¥ 1,473,101 ¥

155,446 ¥ 1,628,547

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Yen in millions
U.S. dollars in millions
For the year ended March 31, 2009
For the year ended March 31, 2009
Non-Financial Financial
Non-Financial Financial
Services
Services
Services
Services
Businesses Businesses Consolidated Businesses Businesses Consolidated
Cash flows from operating activities
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ (368,569) ¥Adjustments to reconcile net loss to net cash
provided by operating activities
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . .
1,105,233
Provision for doubtful accounts and credit
losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,663)Pension and severance costs, lesspayments . . . . . . . . . . . . . . . . . . . . . . . . . .
(21,428)
Losses on disposal of fixed assets . . . . . . . . .
68,546
Unrealized losses on available-for-salesecurities, net . . . . . . . . . . . . . . . . . . . . . . .
220,920
Deferred income taxes . . . . . . . . . . . . . . . . . .
(132,127)
Minority interest in consolidated
subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . .
(26,282)
Equity in earnings of affiliatedcompanies . . . . . . . . . . . . . . . . . . . . . . . . .
(53,226)
Changes in operating assets and liabilities,
and other . . . . . . . . . . . . . . . . . . . . . . . . . . .
(223,101)
Net cash provided by operating
activities . . . . . . . . . . . . . . . . . . . . . . .
Cash flows from investing activities
Additions to finance receivables . . . . . . . . . . . . . .
Collection of and proceeds from sale of financereceivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions to fixed assets excluding equipment
leased to others . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions to equipment leased to others . . . . . . . .
Proceeds from sales of fixed assets excluding
equipment leased to others . . . . . . . . . . . . . . . . .
Proceeds from sales of equipment leased toothers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of marketable securities and security
investments . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of and maturity of marketablesecurities and security investments . . . . . . . . . .
Payment for additional investments in affiliatedcompanies, net of cash acquired . . . . . . . . . . . .
Changes in investments and other assets, andother . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(68,388) ¥ (436,937)$ (3,752)

$

(696)

$ (4,448)

389,937

1,495,170

11,251

3,970

15,221

259,096

257,433

(17)

2,638

2,621

470
136

(20,958)
68,682

(218)
698

5
1

(213)
699

—
(62,871)

220,920(194,990)

2,249(1,345)

—
(640)

2,249
(1,985)2,004(24,278)

(267)

20

(247)

10,502(42,724)

(542)

107

(435)

186,234

154,587(2,272)

1,895

1,573

717,120

1,476,905

5,785

7,300

15,035—(13,318,620) (7,700,459)—(135,586)(78,392)—

13,047,393—

132,82573,740(13,830)
(839)

(62)
(8,937)(13,892)(9,776)568,303(1,358,518)(82,411)7,243,442(6,064) (1,364,582)(877,904)(960,315)

41,285

6,101

47,386

420

62

482

55,896472,853

528,749

569

4,814

5,383

(418,342)(217,688)(636,030)(4,259)(2,216)(6,475)

1,295,561

180,316

1,475,877

13,1891,835

15,024

(45)

—

(45)

0

—

0

135,757

1,322

(21)

1,382

Net cash used in investing activities . . .

(336,740)(715,704) (1,230,220)(3,428)(7,286)(12,524)

Cash flows from financing activities
Purchase of common stock . . . . . . . . . . . . . . . . . .
Proceeds from issuance of long-term debt . . . . . . .
Payments of long-term debt . . . . . . . . . . . . . . . . . .
Increase in short-term borrowings . . . . . . . . . . . . .
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(70,587)545,981(150,097)
138,387(439,991)—(70,587)
3,030,029 3,506,990(2,580,637) (2,704,078)
239,462
406,507—(439,991)

(719)
5,558
(1,528)
1,409(4,479)—30,846(26,271)
2,438
—

(719)
35,702(27,528)4,138(4,479)Net cash provided by financing
activities . . . . . . . . . . . . . . . . . . . . . . .

23,693

241

7,013

7,114

Effect of exchange rate changes on cash and cash
equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net increase in cash and cash equivalents . . . . . . . . . . .
Cash and cash equivalents at beginning of year . . . . . .

129,834(2,091)

688,854698,841(80,214)(49,579)(129,793)

(816)

(505)

(1,321)

175,042
1,473,101

640,691
155,446

815,733
1,628,547

1,782
14,996

6,522
1,583

8,304
16,579796,137 ¥ 2,444,280$ 16,778

8,105$ 24,883

Cash and cash equivalents at end of year . . . . . . . . . . . . ¥ 1,648,143 ¥

F-57

$

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
25. Per share amounts:
Reconciliations of the differences between basic and diluted net income (loss) per share for the years ended
March 31, 2007, 2008 and 2009 are as follows:

For the year ended March 31, 2007
Basic net income per common share . . . . . . . . . . . . . . . . . . . .
Effect of dilutive securities
Assumed exercise of dilutive stock options . . . . . . .
Diluted net income per common share . . . . . . . . . . . . . . . . . . .
For the year ended March 31, 2008
Basic net income per common share . . . . . . . . . . . . . . . . . . . .
Effect of dilutive securities
Assumed exercise of dilutive stock options . . . . . . .
Diluted net income per common share . . . . . . . . . . . . . . . . . . .
For the year ended March 31, 2009
Basic net loss per common share . . . . . . . . . . . . . . . . . . . . . . .
Effect of dilutive securities
Assumed exercise of dilutive stock options . . . . . . .
Diluted net loss per common share . . . . . . . . . . . . . . . . . . . . . .

Yen inmillions

Thousands ofsharesNet
income(loss)

Weightedaverage
sharesYen
Net
income(loss)
per share¥1,644,032

3,210,422¥ 512.09

(2)

1,812

¥1,644,030

3,212,234¥ 511.80¥1,717,879

3,177,445¥ 540.65

(1)

1,217

¥1,717,878

3,178,662¥ 540.44¥ (436,937) 3,140,417¥(139.13)$(1.42)¥(139.13)$(1.42)(0)

U.S. dollars
Net
income(loss)
per share—¥ (436,937) 3,140,417

Certain stock options were not included in the computation of diluted net income per share for the year
ended March 31, 2008 because the options’ exercise prices were greater than the average market price percommon share during the period.
Assumed exercise of certain stock options was not included in the computation of diluted net loss per sharefor the year ended March 31, 2009 because it had an antidilutive effect due to the net loss for the period.
In addition to the disclosure requirements under FAS No. 128, Earnings per Share, Toyota discloses theinformation below in order to provide financial statement users with valuable information.
The following table shows Toyota’s net assets per share as of March 31, 2008 and 2009. Net assets per shareamounts are calculated by dividing net assets’ amount at the end of each period by the number of shares issued
and outstanding, excluding treasury stock at the end of the corresponding period.
Yen inmillions

As of March 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
As of March 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-58

Yen

U.S. dollars

Net assets

Thousands ofsharesShares issued
andoutstanding at
the end of theyear(excluding
treasury stock)

Net assets
per share

Net assets
per share¥11,869,527
10,061,207

3,149,279
3,135,882¥3,768.97
3,208.41$32.66

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
26. Fair value measurements:
Toyota adopted FAS 157 in the fiscal year ended March 31, 2009. In FAS 157, three levels of input which
are used to measure fair value are as follows.
Level 1: Quoted prices in active markets for identical assets or liabilities
Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical orsimilar assets or liabilities in markets that are not active; inputs other than quoted prices that are
observable for the assets or liabilities
Level 3: Unobservable inputs for assets or liabilities
The following table summarizes the fair values of the assets and liabilities measured at fair value on arecurring basis at March 31, 2009:
Yen in millions
March 31, 2009
Level 2
Level 3

Level 1

AssetsCash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marketable securities and other securities
investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative financial instruments . . . . . . . . . . . . . . . . . . . .

—¥1,588,746

187,236
369,572

19,581
17,9582,480,111
387,530¥3,746,701¥ 672,147¥ 37,539¥4,456,387

Liabilities
Derivative financial instruments . . . . . . . . . . . . . . . . . . . .

¥—¥(427,109) ¥(23,692) ¥ (450,801)

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

¥—¥(427,109) ¥(23,692) ¥ (450,801)

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

¥1,473,407¥ 115,339

2,273,294—

Level 1

AssetsCash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marketable securities and other securities
investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative financial instruments . . . . . . . . . . . . . . . . . . . .

$15,000U.S. dollars in millions
March 31, 2009
Level 2
Level 3$23,143
—

1,174

$

1,906
3,762

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

$38,143$

6,842

Liabilities
Derivative financial instruments . . . . . . . . . . . . . . . . . . . .

$

—

$

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

$

—

$

F-59

¥

Total

—

Total

$

199
183
$

382

16,17425,2483,945$

45,367(4,348) $(241) $

(4,589)(4,348) $(241) $

(4,589)

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following is a description of the valuation methodologies used for the assets and liabilities measured atfair value, key inputs and significant assumptions:
Cash equivalents Cash equivalents represent highly liquid investments with original maturities of three months or less.
Generally, quoted market prices are used to determine the fair value of these instruments.
Marketable securities and other securities investments Marketable securities and other securities investments include debt securities and equity securities. Toyota
uses quoted market prices for identical or similar assets or liabilities to measure fair value. Marketable securities
and other securities investments classified as Level 3 include retained interests in securitized financial
receivables, which are measured at fair value using the assumptions such as interest rate, loss severity and otherfactors.
Derivative financial instruments Toyota estimates the fair value of derivative financial instruments using industry-standard valuation models that
requires observable inputs including interest rates and foreign exchange rates, and the contractual terms. In othercertain cases when market data is not available, key inputs to the fair value measurement include quotes fromcounterparties, and other market data. Toyota’s derivative fair value measurements consider assumptions aboutcounterparty and our own non-performance risk, using such as credit default probabilities.
The following table summarizes the changes in Level 3 assets and liabilities measured at fair value on arecurring basis for the period ended March 31, 2009:
Yen in millions
For the year ended March 31, 2009Marketablesecurities andDerivative
other securities
financialinvestments
instruments
Total

Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total gains (losses)
Included in earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Included in other comprehensive income (loss) . . . . . . . . . . . . .
Purchases, issuances and settlements . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥23,818¥ 25,499¥ 49,317

586(1,398)(1,665)(1,760)¥19,581(38,538) (37,952)—(1,398)
7,026
5,361
279
(1,481)¥ (5,734) ¥ 13,847

U.S. dollars in millions
For the year ended March 31, 2009Marketablesecurities andDerivative
other securities
financialinvestments
instruments
Total

Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total gains (losses)
Included in earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Included in other comprehensive income (loss) . . . . . . . . . . . . .
Purchases, issuances and settlements . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-60

$

242

$

6
(14)
(17)
(18)
199

$

260

$

502

$

(392)
—
71
3
(58) $

(386)
(14)
54
(15)
141

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In the reconciliation table above, derivative financial instruments are presented net of assets and (liabilities).
The other amount primarily includes the impact of currency translation adjustments.
Certain assets and liabilities are measured at fair value on a nonrecurring basis. During the year ended
March 31, 2009, Toyota measured certain finance receivables at fair value of ¥25,932 million ($264 million)
based on the collateral value, resulting in an impairment loss of ¥10,011 million ($102 million). This fair value
measurement on a nonrecurring basis as of March 31, 2009 was classified as level 3.

F-61

ITEM 19. EXHIBITS
Index to Exhibits
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)(incorporated by reference to Exhibit 1.2 to Toyota’s Annual Report on Form 20-F for the fiscal year
ended March 31, 2008 filed with the SEC on June 25, 2008 (file no. 001-14948)

1.3

Amended and Restated Regulations of the Board of Corporate Auditors of the Registrant (English
translation) (incorporated by reference to Exhibit 3.3 to Toyota’s Registration Statement on Form F-3
filed with the SEC on November 7, 2006 (file no. 333-138469))

2.1

Amended and Restated Share Handling Regulations of the Registrant (English translation)

2.2

Form of Deposit Agreement among the Registrant, The Bank of New York (predecessor of The Bank of
New York Mellon), as depositary, and the owners and beneficial owners from time to time of American
Depositary Receipts, including the form of American Depositary Receipt (incorporated by reference to
Exhibit 1 to Toyota’s Registration Statement on Form F-6, filed with the SEC on November 7, 2006
(file no. 333-138477))

2.3

Form of ADR (included in Exhibit 2.2)

8.1

List of Principal Subsidiaries (See “Organizational Structure” in “Item 4. Information on the
Company”)

11.1

Code of Ethics of the Registrant applicable to its directors and managing officers, including its principal
executive officer, principal financial officer, principal accounting officer or controller, or persons
performing similar functions (English translation) (incorporated by reference to Exhibit 11.1 toToyota’s Annual Report on Form 20-F for the fiscal year ended March 31, 2006 filed with the SEC on
June 26, 2006 (file no. 001-14948))

12.1

Certifications of the Registrant’s Chairman of the Board and Executive Vice President, Member of theBoard pursuant to Section 302 of the Sarbanes-Oxley Act

13.1

Certifications of the Registrant’s Chairman of the Board and Executive Vice President, Member of theBoard pursuant to Section 906 of the Sarbanes-Oxley Act

15.1

Consent of Independent Registered Public Accounting Firm

106

SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has
duly caused and authorized the undersigned to sign this annual report on its behalf.
TOYOTA MOTOR CORPORATION
By:
Name:
Title:

Date: June 24, 2009/s/

TAKAHIKO IJICHI

Takahiko Ijichi
Senior Managing Director, Member of the Board

Exhibit 1.1(TRANSLATION)
ARTICLES OF INCORPORATIONOFTOYOTA MOTOR CORPORATION(As amended on June 23, 2009)
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 sale 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) the sale of goods related to each of the preceding items and mineral oil;(18) the conducting of engineering, consulting, invention and research relating to each of the preceding
items and the utilization of such invention and research; and(19) 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.
SHARES
Article 5. (Total Number of Authorized Shares)
The total number of shares which the Corporation is authorized to issue shall be ten billion(10,000,000,000).
Article 6. (Number of Shares Constituting One Unit (tangen) and Rights to Shares Constituting Less than
One Unit (tangen))1.

The number of shares constituting one unit (tangen) of shares of the Corporation shall be one hundred (100).

2.

The shareholders of the Corporation are not entitled to exercise any rights to shares constituting less than
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 Corporation 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 Corporation 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.

3.

The register of shareholders and the register of stock acquisition rights shall be kept at the office of thetransfer agent. The entry or recording into the register of shareholders and the register of stock acquisitionrights, the purchase of shares constituting less than one unit (tangen) and any other matters related to theshares 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 as ofMarch 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 andregulations or these Articles of Incorporation of the Corporation.

2.

Special resolutions as specified by Article 309, Paragraph 2 of the Corporation Act shall be adopted by notless 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 areentitled 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 that both ofthem are prevented from so presiding as chairman, another Director of the Corporation shall preside in theirplace 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 adocument establishing the proxy’s power of representation for each general meeting of shareholders.

3.

The Corporation may refuse a shareholder having two (2) or more proxies attend a general meeting ofshareholders.

Article 15. (Deemed Delivery of Reference Documents, etc. for General Meeting of Shareholders)Upon convening a general meeting of shareholders, the Corporation may deem that the information which is
required to be described or indicated in reference documents for the general meeting of shareholders, business
reports, financial statements and consolidated financial statements shall be provided to the shareholders, in theevent that it is disclosed, pursuant to laws and regulations, through the method by which shareholders may
receive such information through an electronic means.

CHAPTER IV.
DIRECTORS AND BOARD OF DIRECTORS
Article 16. (Number of Directors)
The Corporation shall have no more than thirty (30) 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 of shareholders tobe held for the last business year of the Corporation ending within one (1) year after their election.

2.

The term of office of any Director elected in order to increase the number of Directors or to fill a vacancy
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 Corporate
Auditor 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 theiragreement in writing or by electronic records. Provided, however, that this provision shall not apply when
any Corporate Auditor 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
Chairman of the Board, Executive Vice Presidents and Senior Managing Directors 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 Corporation 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 Corporation Act within the limits stipulated by laws and regulations.

CHAPTER V.
CORPORATE AUDITORS AND BOARD OF CORPORATE AUDITORS
Article 23. (Establishment of Corporate Auditors and Number of Corporate Auditors)
The Corporation shall have no more than seven (7) Corporate Auditors.
Article 24. (Election of Corporate Auditors)
1.

Corporate Auditors shall be elected by a resolution of a general meeting of shareholders.

2.

A resolution for the election of Corporate Auditors 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 25. (Term of Office of Corporate Auditors)
1.

The term of office of Corporate Auditors shall expire at the closing of the ordinary general meeting ofshareholders to be held for the last business year of the Corporation ending within four (4) years after theirelection.

2.

The term of office of any Corporate Auditor elected to fill a vacancy shall be the balance of the term ofoffice of the Corporate Auditor whom he/she succeeds.

Article 26. (Board of Corporate Auditors)
1.

The Corporation shall have a Board of Corporate Auditors.

2.

Notice of a meeting of the Board of Corporate Auditors shall be dispatched to each Corporate Auditor atleast 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 Board of Corporate
Auditors shall be subject to the Regulations of the Board of Corporate Auditors established by the Board of
Corporate Auditors.

Article 27. (Full-time Corporate Auditor)
The Board of Corporate Auditors shall, by its resolution, select one or more full-time Corporate Auditors.
Article 28. (Exemption from Liability of Corporate Auditors)
In accordance with the provisions of Article 426, Paragraph 1 of the Corporation Act, the Corporation may,by a resolution of the Board of Directors, exempt Corporate Auditors (including former Corporate Auditors)
from liabilities provided for in Article 423, Paragraph 1 of the Corporation Act within the limits stipulated bylaws and regulations.
Article 29. (Liability Limitation Agreement with Outside Corporate Auditors)
In accordance with the provisions of Article 427, Paragraph 1 of the Corporation Act, the Corporation may
enter into an agreement with outside Corporate Auditors, limiting liabilities provided for in Article 423,
Paragraph 1 of the Corporation Act.
CHAPTER VI.
ACCOUNTING AUDITOR
Article 30. (Accounting Auditor)
The Corporation shall have an Accounting Auditor (kaikeikansa-nin).
CHAPTER VII.
ACCOUNTS
Article 31. (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 32. (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 Corporation Act to the shareholders or registered sharepledgees 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 Corporation Act.

4.

No interest shall be paid on unpaid dividends from surplus.

Article 33. (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 register of lost share certificates shall be kept at the office of the transfer agent. The matters related tothe entry or recording into the register of lost share certificates shall be handled by the transfer agent and not by
the Corporation.

Article 2.
The entry or recording into the register of lost share certificates shall be subject to the Share Handling
Regulations established by the Board of Directors.
Article 3.
Article 1 through 3 of these Supplementary Provisions shall be deleted on January 6, 2010.

Exhibit 2.1(TRANSLATION)SHARE HANDLING REGULATIONSOFTOYOTA MOTOR CORPORATION
Established: November 28, 1951
As last amended on November 28, 2008
CHAPTER I.
GENERAL PROVISIONS
Article 1. (Purpose)
1.

Matters relating to the handling of shares and stock acquisition rights (including the procedures relating to
the exercise of shareholders’ rights) of Toyota Motor Corporation (the “Company”) under the Articles ofIncorporation of the Company, shall be governed by provisions of these share handling regulations (these“Regulations”), in addition to the provisions set forth by Japan Securities Depositary Center, Inc.
(“JASDEC”), the book-entry transfer institution, and account management institutions such as securities
companies and trust banks (each referred to as the “Securities Company”).

2.

Matters relating to the handling of special accounts opened in accordance with agreements executed
between the Company and a trust bank designated by the Company, and the fees in connection with suchspecial accounts shall be governed by these Regulations, in addition to the provisions set forth by the trustbank.

Article 2. (Transfer Agent and its Handling Office)The transfer agent (the “Transfer Agent”) of the Company and its handling office shall be as follows:
Transfer Agent:
Mitsubishi UFJ Trust and Banking Corporation
4-5, Marunouchi 1-chome, Chiyoda-ku, Tokyo
Handling office:Mitsubishi UFJ Trust and Banking Corporation,
Corporate Agency Division
4-5, Marunouchi 1-chome, Chiyoda-ku, Tokyo
Article 3. (Request or Notification)
1.

Any request or notification with respect to the matters provided for in these Regulations shall be made in a
written format designated by the Company. However, the foregoing shall not apply if such request or
notification is submitted through the Securities Company and JASDEC, or as provided for in Article 17,
Paragraph 1.

2.

Should any request or notification as set forth in the preceding paragraph be submitted by the shareholder
through the Securities Company and JASDEC, or through the Securities Company, it may be deemed thatsuch request or notification has been made by such shareholder.

3.

The Company may request the person who submitted the request or notification as stipulated in Paragraph 1
above to the Company, to submit materials certifying that the person is a shareholder of the Company or an
agent of a shareholder of the Company.

4.

In the event that the Company requests a person to submit materials as described in the preceding paragraph,
the Company shall not receive such request or notification unless such material is submitted.

Article 4. (Agent)
Should the procedure mentioned in Paragraph 1 of the preceding article be taken by an agent, such agent
shall submit a documentation evidencing his/her power of representation. In addition, if the consent of curator or
assistant is required for the procedure mentioned in Paragraph 1 of the preceding article, the shareholder shallsubmit a documentation evidencing such consent.
Article 5. (Certification Document and Guarantor)
If the Company deems it necessary in connection with the procedure mentioned in Article 3, Paragraph 1
above, the Company may require, in addition to those provided for in these Regulations, such certification
document or such guarantor as the Company may deem appropriate.

CHAPTER II.
ENTRY OR RECORDING, ETC. IN THE REGISTER OF SHAREHOLDERS
Article 6. (Entry or Recording in the Register of Shareholders)
1.

The Company shall enter or record items in the register of shareholders (the “Register of Shareholders”) in
accordance with the general shareholders notification (sou kabunushi tsuchi) received from JASDEC.

2.

If the Company receives notification regarding changes in address or other matters indicated in the Registerof Shareholders of a person who is entered or recorded in the Register of Shareholders (the “Shareholder”),
the Company shall revise the Register of Shareholders in accordance with such notification.

3.

In addition to the Paragraphs 1 and 2 above, the Company shall enter or record, in the Register of
Shareholders, the issuance of new shares and such other matters provided for in laws and regulations.

Article 7. (Letters, Symbols, etc. to be Used in the Register of Shareholders)
Entries in the Register of Shareholders shall be made using the letters and symbols specified by JASDEC.

CHAPTER III.
NOTIFICATION OF VARIOUS MATTERS
Article 8. (Notification of Shareholder’s Name/Corporate Name and Address, etc.)
1.

A Shareholder shall file a notification of name/corporate name and address; provided, however, that if anyof the following items is applicable to the Shareholder, notification of the matters specified in such item
shall be filed:(1) If the Shareholder has a statutory agent such as a person in parental authority or guardian, the name/corporate name and address of such statutory agent.
(2) If the Shareholder is a judicial person, the corporate name and address of the judicial person, and thetitle and name of its representative.
(3) If the shares are jointly owned, the name/corporate name and address of a representative of the joint
owners.
(4) If the Shareholder resides outside of Japan, in addition to the name/corporate name and address of the
Shareholder, the address in Japan at which such Shareholder shall receive notices or, if the Shareholder
appoints a standing proxy in Japan, the name/corporate name and address of such standing proxy.

2.

A Shareholder shall file a notification of amendment, if there is any amendment to the matters mentioned in
Paragraph 1 above.

3.

The notifications or notifications of amendment described in Paragraphs 1 and 2 above shall be filed
through the Securities Company and JASDEC. However, this shall not apply to the cases stipulated in
Article 6, Paragraph 3.

Article 9. (Other Notifications)1.

In addition to notifications set forth in the preceding article, a Shareholder submitting any notification to theCompany shall do so through the Securities Company and JASDEC, or through the Securities Company,
unless otherwise designated by the Company. However, this shall not apply to the cases stipulated in Article
6, Paragraph 3.

2.

Notifications which cannot be received or handled by the Securities Company shall be submitted to theTransfer Agent.

Article 10. (Application to Registered Pledgees)
The provisions in this Chapter shall be applied mutatis mutandis to registered pledgees of shares.

CHAPTER IV.
PURCHASE OF SHARES CONSTITUTING LESS THAN ONE UNIT
Article 11. (Request for Purchase of Shares)
In the event that a shareholder requests the Company for the purchase of shares constituting less than one
unit, such shareholder shall submit the request through the Securities Company and JASDEC in accordance withthe provisions set forth by JASDEC.
Article 12. (Determination of Purchase Price)
If a purchase request is made for shares constituting less than one unit, the purchase price of such sharesshall be the amount obtained by multiplying the number of shares requested to be purchased by the amountequivalent to the closing price of the shares of the Company on the Tokyo Stock Exchange on the date on which
the purchase request is received at the Handling Office of the Transfer Agent (“Date of Request”); provided,
however, that if there is no sale and purchase transaction on the Tokyo Stock Exchange on the Date of Request or
if the Date of Request falls on a holiday of the Tokyo Stock Exchange, the amount equivalent to the price atwhich the shares of the Company are first traded on the trading day immediately following such date andthereafter shall be used.
Article 13. (Payment of Purchase Price)
Unless otherwise specified by the Company, the purchase price under the preceding article shall be paid by
the Company to the applicant on the fourth business day of the Transfer Agent from the date immediately
following the date on which the purchase price is determined and the purchase request is received at the Handling
Office of the Transfer Agent.
Article 14. (Transfer of Shares Purchased)
The shares constituting less than one unit for which the request for purchase is made shall be transferred tothe transfer account of the Company on the date on which procedures for the payment of the purchase price as set
forth in the preceding article have been completed.

CHAPTER V.
ENTRY AND RECORDING, ETC. IN REGISTER OF STOCK ACQUISITION RIGHTS
Article 15. (Entry and Recording, etc. in Register of Stock Acquisition Rights)
1.

Any request for (i) entry or recording in the register of the stock acquisition rights (the “Register of theStock Acquisition Rights”), (ii) registration, transfer or cancellation of the right of the pledge in connection
with the sock acquisition rights and (iii) representation or cancellation of the trust assets, shall be made to
the Transfer Agent.

2.

In addition to the provisions set forth in the preceding paragraph, the handling of stock acquisition rights
may be governed separately.

Article 16. (Matters and Methods of Notifications Required to the Holder of Stock Acquisition Rights)
The provisions in Articles 8 and 9 of these Regulations shall be applied mutatis mutandis to matters andmethods of notifications required to the holders of the stock acquisition rights that are entered or recorded in theRegister of the Stock Acquisition Rights; provided, however, unless otherwise stated in Paragraph 2 of thisarticle, such notifications shall be made to the Transfer Agent.

CHAPTER VI.
PROCEDURES FOR EXERCISE OF MINORITY SHAREHOLDERS’ RIGHTS, ETC.
Article 17. (Procedures for Exercise of Minority Shareholders’ Rights, etc.)
1.

Where minority shareholders’ rights and other rights as provided for in Article 147, Paragraph 4 of the Law
Concerning Book-entry Transfer of Corporate Bonds, Stocks, etc. (the “Transfer Law”) are exercised
directly to the Company, the exercising shareholder shall submit the request in writing bearing the name andseal of the shareholder, with an acceptance form (uketsuke hyou) of an Individual Shareholder Notice(kobetsu kabunushi tsuchi) (a notification set forth in Article 154, Paragraph 3 of the Transfer Law)
delivered by the Securities Company attached. Non-Japanese citizens may provide a signature as a substitutefor the name and seal.

2.

The provisions in Article 3, Paragraphs 3 and 4, Articles 4 and 5 shall be applied to the exercise of minority
shareholders’ rights and other rights as described in the preceding paragraph.

CHAPTER VII.
FEES
Article 18. (Fees)
The fees for the handling of shares shall be free of charge. Provided, however, that the fees payable byshareholders to the Securities Company or JASDEC shall be borne by the Shareholders.

SUPPLEMENTARY PROVISIONS
Article 1. (Amendment to Regulations)
Any amendment to these Regulations shall be made by the resolution of the meetings of the Board of
Directors of the Company.
Article 2. (Effective Date)
These Regulations, as amended, shall become effective as of January 5, 2009.

Article 3. (Application for Deregistration of Lost Share Certificate by Registrant of Lost Share Certificate)
When a registrant of a lost share certificate applies for deregistration of the lost share certificate, he/sheshall submit a prescribed application form.
Article 4. (Application for Deregistration by Holder of Share Certificate)
When a holder of a share certificate for a share of which the registration of lost share certificate has been
made applies for deregistration of a lost share certificate, he/she shall submit a prescribed application form withsuch share certificate and identification documents attached.
Article 5. (Application of Other Notifications)
When a registrant of a lost share certificate amends the entry or record in the register of lost sharecertificate, the provisions of Articles 8 and 9 shall apply mutatis mutandis, and a notification of amendment shallbe submitted to the Head Office of the Transfer Agent as specified in Article 2.
Article 6. (Transitional Measures)
The provisions of Articles 3, 4, 5 and 6 of the Supplementary Provisions shall be deleted as of January 6,
2010.
(End of Document)Exhibit 12.1
CERTIFICATIONS
I, Fujio Cho, 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 oromit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by thisreport;3.

Based on my knowledge, the financial statements, and other financial information included in thisreport, fairly present in all material respects the financial condition, results of operations and cash
flows of the Company as of, and for, the periods presented in this report;

4.

The Company’s other certifying officer and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and15d-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 those entities, 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 andpresented in this report our conclusions about the effectiveness of the disclosure controls andprocedures, as of the 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 reportingthat 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 evaluationof internal control over financial reporting, to the Company’s auditors and the Board of Corporate
Auditors (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 theCompany’s ability to record, process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who havea significant role in the Company’s internal control over financial reporting.

Date: June 24, 2009/s/

FUJIO CHO

Fujio Cho
Chairman of the Board
Toyota Motor Corporation

CERTIFICATIONS
I, Yoichiro Ichimaru, 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 oromit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by thisreport;3.

Based on my knowledge, the financial statements, and other financial information included in thisreport, fairly present in all material respects the financial condition, results of operations and cash
flows of the Company as of, and for, the periods presented in this report;

4.

The Company’s other certifying officer and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and15d-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 those entities, 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 andpresented in this report our conclusions about the effectiveness of the disclosure controls andprocedures, as of the 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 reportingthat 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 evaluationof internal control over financial reporting, to the Company’s auditors and the Board of Corporate
Auditors (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 theCompany’s ability to record, process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who havea significant role in the Company’s internal control over financial reporting.

Date: June 24, 2009/s/

YOICHIRO ICHIMARU

Yoichiro Ichimaru
Executive Vice President, Member of the Board
Toyota Motor Corporation

Exhibit 13.1
CERTIFICATION
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
each of the undersigned officers of Toyota Motor Corporation, a Japanese corporation (the “Company”), does
hereby certify that, to such officer’s knowledge:
1. The accompanying Annual Report of the Company on Form 20-F for the period ended March 31,
2009 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange
Act of 1934; and2. Information contained in the Report fairly presents, in all material respects, the financial condition
and results of operations of the Company.

By:

/s/

FUJIO CHO

Name:
Title:

Fujio Cho
Chairman of the Board

Date: June 24, 2009

By:
Name:
Title:/s/

YOICHIRO ICHIMARU

Yoichiro Ichimaru
Executive Vice President, Member of the Board

Date: June 24, 2009
(A signed original of this written statement required by Section 906 has been provided to Toyota Motor
Corporation and will be retained by Toyota Motor Corporation and furnished to the Securities and Exchange
Commission or its staff upon request.)

Exhibit 15.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8(No. 333-125977, 333-107322, 333-143955 and 333-160081) of Toyota Motor Corporation of our report dated
June 23, 2009 relating to the financial statements and the effectiveness of internal control over financial
reporting, which appears in this Form 20-F.
/s/ PricewaterhouseCoopers Aarata
Nagoya, Japan
June 24, 2009