ANNUAL REPORT 2007
Year ended March 31, 2007

Profile
Toyota Industries Corporation was founded in
1926 to manufacture and sell automatic looms(weaving machines) invented by Sakichi Toyoda.
In the ensuing years, Toyota Industries extended
the scope of its business domains to encompass
textile machinery, automobiles (vehicles, engines, carair-conditioning compressors), materials handlingequipment, electronics and logistics. With production
bases in North America, Europe and Asia, including
Japan, China and India, as well as a worldwide sales
network, mainly in its Materials Handling Equipment
and Textile Machinery segments, the operations of
the Toyota Industries Group span the globe.

In November 2006, Toyota Industries celebrated the80th anniversary of its founding. Looking ahead, we
remain committed to actively undertaking initiatives
aimed at achieving further development and growth.

Definition of Terms“Fiscal 2007” refers to the fiscal year ended March 31, 2007, and other fiscal years are referred to in a corresponding manner. All references to the “Company” herein are to Toyota Industries
Corporation, and references to “Toyota Industries,” “Toyota Industries Group” or the “Group” herein are to the Company and its 162 consolidated subsidiaries.

Cautionary Statement with Respect to Forward-Looking Statements
This annual report contains projections and other forward-looking statements that involve risks and uncertainties. The use of the words “expect,” “anticipate,” “estimate,” “forecast,” “plan” andsimilar expressions is intended to identify such forward-looking statements. Projections and forward-looking statements are based on the current expectations and estimates of Toyota Industries
Corporation and its Group companies regarding their plans, outlook, strategies and results for the future. All such projections and forward-looking statements are based on management’s
assumptions and beliefs derived from the information available to it at the time of producing this report and are not guarantees of future performance. Toyota Industries and its Group companies
undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Therefore, it is advised that you should
not rely solely upon these projections and forward-looking statements in making your investment decisions. You should also be aware that certain risks and uncertainties could cause the actual
results of Toyota Industries Corporation and its Group companies to differ materially from any projections or forward-looking statements discussed in this report. These risks and uncertainties
include, but are not limited to, the following: (1) reliance on a small number of customers, (2) product development capabilities, (3) intellectual property rights, (4) product defects, (5) pricecompetition, (6) reliance on suppliers of raw materials and components, (7) environmental regulations, (8) success or failure of strategic alliances with other companies, (9) exchange rate
fluctuations, (10) share price fluctuations, (11) effects of disasters, power blackouts and other incidents, (12) latent risks associated with international activities and (13) retirement benefit liabilities.

Contents

Financial Highlights
4 Letter to Shareholders
14 At a Glance2

16 Focus on Business
16
26
30
36
38
40

Materials Handling Equipment
Car Air-Conditioning Compressor
Automobile
Logistics
Textile Machinery
Electronics

42

Research and Development
Corporate Governance
Environmental and Social Contribution Efforts
History
Corporate Data
Directors, Corporate Auditors and Managing Officers

44
46
48
50
52

53 Financial Section
54
56
66
68
69
70
71
92

Consolidated Eleven-Year Summary
Management’s Discussion and Analysis ofFinancial Condition and Results of Operations
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Changes in Net Assets
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Reports of Independent Auditors

94 Toyota Industries in Numbers
98

Investor Information

Toyota Industries Corporation

Annual Report 2007

1

Financial Highlights
Toyota Industries Corporation
Years ended March 31

Thousands of
U.S. dollars

Millions of yen

2007

2006

2005

2004

% change
2007 vs 2006

2003

2007

For the YearNet sales¥1,878,398 ¥1,505,955 ¥1,241,538 ¥1,164,378 ¥1,069,218

24.7% $15,911,886

Operating income

89,95464,04053,12052,63152,47740.5

762,002

Ordinary income

108,484

80,63570,91258,97051,37534.5

918,971

Net income

59,46847,07743,35733,623

21,93326.3

503,756

Depreciation and amortization

106,060

87,28770,21365,351

59,15421.5

898,433

Capital expenditures

166,505

158,835

136,506

89,50887,5594.8

1,410,466

Research and development expenses

34,54831,16630,051

29,562

29,705

10.9

292,657

Net income — basic¥189.88¥146.16¥135.09¥108.04¥70.19

29.9%

$1.61

Net income — diluted

189.66146.02135.03101.97

62.90

29.9

1.61

Cash dividends

50.00

38.00

32.00

24.00

22.00

31.6

0.42

Per Share Data (yen, U.S. dollars)

At Year-End
Total assets¥3,585,857 ¥3,245,341 ¥2,326,824 ¥2,011,995 ¥1,650,391

10.5% $30,375,755

Total net assets

1,810,483

1,611,227

1,115,747

1,016,763

738,867

12.4

36,09632,97730,99027,431

25,030

9.5

Number of employees

15,336,578

Note: U.S. dollar amounts have been translated from yen, for convenience only, at the rate of 118.05 yen = US$1, the exchange rate on March 31, 2007.
All the amounts throughout this report are rounded down.

Sales by Business Segment
Thousands of
U.S. dollars

Millions of yen

2007

2006

2005

2004

2003

2007

Automobile¥904,893¥746,795¥616,200¥603,862¥595,459$7,665,345

Materials Handling Equipment

767,237

595,236

503,989

443,443

373,0076,499,258

Logistics

89,47065,145–––757,908

Textile Machinery

58,40349,78943,90245,96848,740494,735

Others58,392

48,98877,446

71,10352,010494,641

Net sales

2

Toyota Industries Corporation

Annual Report 2007

Operating Income

Net Sales

Net Income(¥ Billion)(¥ Billion)(¥ Billion)

2,000

100

60
50

80
1,500

40
60
30

1,000
40

20
500
20

0
FY

10
0

0

03

04

05

06

07

FY

03

04

05

06

07

FY

Total Assets(¥ Billion)(¥ Billion)(¥ Billion)

1,000

4,000

2,000

750

3,000

1,500

500

2,000

1,000

250

1,000

500

FY

0

03

04

05

06

07

Net Income per Share (Basic)

FY

05

06

07

05

06

07

05

06

07

0

03

04

05

06

07

FY

Cash Dividends per Share andConsolidated Payout Ratio

03

04

R&D Expenses

(¥)

(¥)

(%)

(¥ Billion)

200

50

50

40

40

40

30

30

20

20

10

10

150

30

20

100

50

0

0
FY

04

Total Net Assets

Overseas Sales

0

03

03

04

05

06

07

FY

0

03

04

05

06

07

10

0
FY

03

04

Payout ratio (right)

Toyota Industries Corporation

Annual Report 20073

Tadashi Ishikawa

Tetsuro Toyoda

ChairmanPresident

Letter to Shareholders
The fiscal year ended March 31, 2007 (fiscal 2007), was an important year for Toyota Industries in
two major respects. First, we reached a milestone by marking the 80th anniversary of our founding,and second, we initiated our new Medium-Term Management Plan announced in fall 2005.
In reflecting back on the past 80 years, our history can be characterized by our consistentdedication to manufacturing. The Toyoda Type G automatic loom (weaving machine) completed in
1924 by company founder Sakichi Toyoda was significant because this weaving machine was able
to quickly detect breaking of yarn during the weaving process and automatically stop operating.
The development of this weaving machine highlighted a strong desire to eliminate waste and avoid
sending defective goods to post-processes. Guided by this thinking, which represents Toyota
Industries’ origins, together with the spirit of “contributing to society through manufacturing,” which
has been handed down through successive generations, we have steadily broadened the scope of4

Toyota Industries Corporation

Annual Report 2007

Letter to Shareholders

our business over the years from textile machinery to such domains as vehicles, automotive parts,
materials handling equipment and electronics.
Toyota Industries’ businesses today are extensions of these domains, in which we havecompiled many achievements.

New Medium-Term Management Plan Gets Off to a
Smooth Start
The underlying objectives of Toyota Industries’ new Medium-Term Management Plan are to spurfurther growth and raise corporate value. In tandem, our Vision 2010 embodies our aspirations
for the type of company we seek to be in 2010. Under this vision, Toyota Industries is striving toenhance our team strengths and spirit across all businesses and generations and in turn promote
the development of advanced technology and strengthening of our value chain while also fosteringchange, with the goal of becoming “Undisputed No. 1.” Regarding financial targets for fiscal 2011,
the Medium-Term Management Plan aims for consolidated net sales of more than ¥2,000 billion
and ordinary income of ¥140.0 billion as of the end of fiscal 2011.
Fiscal 2007 marked the first year of our new Medium-Term Management Plan and thus was
an extremely important year in getting off to a smooth start and firmly on track toward realizing
our targets. Consolidated net sales amounted to ¥1,878.3 billion, an increase of ¥372.4 billion, or
24.7%, over the previous fiscal year. At the profit level, operating income increased ¥25.9 billion, or
40.5%, to ¥89.9 billion, and ordinary income increased ¥27.8 billion, or 34.5%, to ¥108.4 billion,

Medium-Term Management Plan
¥140.0Ordinary Income

115.0(¥ Billion)

108.4
70.9

80.6

Over
¥2,000.0

58.9

1,878.3

Textile Machinery, etc.

1,950.0

Net Sales(¥ Billion)

1,164.3¥1,000 billion inMaterials Handling
Equipment-related
businesses

1,505.9
1,241.5¥1,000 billion in
Automobile-related
businesses

FY

04

05

06

07

08

11

(Projection)(Targets)(Announced Oct. 2005)

Toyota Industries Corporation

Annual Report 20075

as an increase in depreciation expenses and rising prices of raw materials were offset by increased
net sales and the effects of cost-reduction efforts. These figures represent record highs and markour eighth consecutive year of increased net sales and ordinary income.

Implementation of Strategies for All Business
Segments Firmly Underway
Solid execution of medium-term strategies and forward-looking initiatives in our main businesses
resulted in strong performances in fiscal 2007. Specific measures implemented in these segments
are outlined below.

Materials Handling Equipment Segment
We anticipate that the global market for lift trucks will experience mild growth overall. Sharp growthis expected particularly in emerging economies such as the BRICs (Brazil, Russia, India and China)
nations. Additionally, we foresee rising demand for products that consider the environment and thesafety of customers.
By accurately responding to market trends and the needs of our customers, we plan to record
higher unit sales and raise our global share to secure our position as “Undisputed No. 1” in the
global lift truck market.
Our medium-term strategy for attaining these goals contains two important tasks. The first is
to offer superior product value, and the second is to maximize synergies between the TOYOTA
brand, the global leader in counterbalanced lift trucks, and the BT brand, the world’s top name inwarehouse trucks.
As the first step of this strategy, in September 2006 we carried out a full model change for
TOYOTA brand’s mainstay 1- to 3.5-ton GENEO (8-Series and Toyota Tonero overseas) internal
combustion counterbalanced lift trucks and commenced production at the Takahama Plant inJapan. We also started production ofthis new lift truck in the United States
in January 2007 and plan to inaugurate
production in France in fall 2007.
Based on the concept of setting new
standards for safety and environmental
friendliness, the new GENEO offers greater
safety, meets environmental regulations
ahead of schedule and offers improved
comfort and ease of operation,
thus providing a differentiatedvalue unmatched by competitor
products. Following its launch, the6

Toyota Industries Corporation

Annual Report 2007

New GENEO (8-Series and Toyota Tonero)internal combustion counterbalanced lift truck

Letter to Shareholders

Tetsuro Toyoda

Hybrid Lift Truck

President

new GENEO has earned high acclaim from many customers. With this strategic lift truck, we plan
to aim for higher market share and increased profitability in working to be “undisputed No. 1” in the
global lift truck market.
With an eye toward maximizing synergies between the TOYOTA brand and the BT brand, in
April 2006 we officially launched the Toyota Material Handling Group (TMHG) as the framework for
integrating both entities. In undertaking operations, TMHG implements optimal policies in global
markets that are divided into the four geographic regions of Japan, North America, Europe andInternational.
At the same time, key functions such as quality, R&D and plant operations are handled
taking a cross-sectional approach that transcends all geographic regions as we utilize the entire
capabilities of the Toyota Industries Group in making improvements and innovations. The launchof TMHG has already yielded and we believe will continue to generate important synergies that
include mutually supplying each other’s brand products, undertaking joint development, promoting
the implementation of the Toyota Production System (TPS) at production bases worldwide
and reorganizing sales structures. Looking ahead, we plan to focus on the timely planning andintroduction of competitive new products and improvement of after-sales service.

Toyota Industries Corporation

Annual Report 20077

Automobile Segment
The Automobile Segment is another pillar of the
Toyota Industries Group’s business along with theMaterials Handling Equipment Segment.
Greater global demand for compact cars is
expected due to rising crude oil prices, while
Toyota Motor Corporation’s (TMC) domestic
production is likely to remain at a high level.
In view of these circumstances, we will strive
to expand our role within the Toyota Group

Nagakusa Plant

backed by our strength—always aiming to be
global No. 1 in terms of quality, cost and delivery (QCD)—that we have cultivated as a manufacturer
specializing in compact and midsize cars.
We have achieved smooth progress up through fiscal 2006 in establishing, increasing andstrengthening plant infrastructure and assembly lines. Accordingly, we now operate a solid structure
capable of stable production exceeding 350,000 units annually, up from just over 200,000 units
previously.
During fiscal 2007, we continued full-scale production of the Vitz (Yaris outside Japan) and theRAV4 and attained record-high sales of 350,000 units. We intend to make further improvements in
QCD to ensure continued high levels of production as we work to further strengthen collaboration
between Toyota Industries and TMC. At the same time, we expect to continue to upgrade ourdevelopment capabilities and expand our roles in both production and development.
In the Engine Business, mounting concerns about the environment have led to a high level ofdemand for clean diesel engines in Europe. Meanwhile, Japan and the United States are witnessing
moves to reevaluate diesel engines given their excellent energy efficiency. In addressing thesetrends, we aim to become a top manufacturer of diesel engines within the Toyota Group from botha development and production perspective.
From fiscal 2006, Toyota Industries began producing two globally strategic engines. These
include AD diesel engines, a clean, quiet andfuel-efficient new-generation diesel engine
jointly developed with TMC, and KD diesel
engines for TMC’s Innovative International MultiPurpose Vehicle (IMV) Project. In fiscal 2007, we
maintained high production levels of these engines
throughout the year and increased our production
volume from over 300,000 units to 490,000 units.
We also proceeded firmly on a number of fronts
to strengthen our development capabilities bytaking steps that included constructing a new

8

Toyota Industries Corporation

Annual Report 2007

New engine testing center

Letter to Shareholders

testing center and increasing development staff. In responding accurately to TMC’s strategies, wewill strive to even more fully utilize our development and production capabilities within the Toyota
Group.
In the Car Air-Conditioning Compressor Business, although the rise in the percentage of newvehicles fitted with air conditioners in the European market has slowed down, we foresee a growing
need for fuel-efficient air conditioners. Additionally, we anticipate higher demand particularly inemerging markets such as the BRICs due to an increase in automobile sales.
Regarding medium-term targets, as a top manufacturer, Toyota Industries will aim to further
expand global market share while striving to increase its earnings power via thorough cost
reductions.
As we receive steadily increasing orders from
customers, our overriding theme is to respondaccurately to such increases by establishing an
optimized, global and flexible production structure.
Accordingly, Toyota Industries has made smooth
strides in expanding production capabilities.
Achievements include the start of production at
a second North American production base in the
U.S. state of Georgia in December 2005 followed
TD Automotive Compressor Kunshan Co., Ltd.

by the commencement of production at a plantin China in April 2006. We are also focusing efforts on further expanding sales to automakers,
and during fiscal 2007 these efforts have enabled us to secure new customers, mainly comprising
European manufacturers of compact cars.
As a result, in fiscal 2007 we sold 20.45 million car air-conditioning compressors, surpassing 20
million units for the first time. Deploying our technological superiority as a competitive advantage,
we plan to continue to develop cutting-edge technologies and new products that contribute to new
car development as we respond to an ever-greater need for car air-conditioning compressors forhybrid vehicles in addition to conventional engine-powered vehicles.
The Automobile Segment is also involved in car electronics and automotive stamping dies.
In other words, this segment is active in a broad range of fields covering the entire automobile
business from vehicle assembly and engines to components. To prevail amid severe competition,
we intend to strengthen collaboration among these businesses to leverage our strong overallcapabilities.
With this in mind, in January 2007 we established the Automotive Headquarters to fortify
collaboration among respective businesses in the Automobile Segment. We have now consolidated
and achieved close cooperation among the vehicle assembly, engine, automotive stamping dies andcar electronics businesses to create synergies. In so doing, we are actively contributing to TMC’s
global strategy. Besides strengthening each individual business, we plan to focus on increasing our
total strengths while elevating the potential and performance of the Automobile Segment.

Toyota Industries Corporation

Annual Report 20079

Textile Machinery Segment
Ever since our founding, textile
machinery has been tantamount toa “family business,” and a strong
performance by this segment
energizes all employees of the
Toyota Industries Group. In fiscal
2007, this segment posted excellent

JAT710 air-jet loom

results, as sales of our mainstay airjet looms surpassed 10,000 units due to extremely buoyant conditions that included extraordinary
demand in China. As an easy-to-understand example, the continuous operation of 10,000 airjet looms for one month would weave enough material for dress shirts for 100 million people, anumber that virtually corresponds to Japan’s entire population. Compared with the Toyoda Type G
automatic loom of 80 years ago, current air-jet looms boast four times greater weaving width andsix times higher weaving speed, thus giving these weaving machines 24 times the productivity.
Up until approximately five years ago, total worldwide demand for air-jet looms was around
10,000 units annually, but subsequently surged to over 20,000 units annually since 2002. Alongwith improvements in air-jet loom productivity, the main factor driving this increase has beentechnological innovations in air-jet looms enabling the production of fabrics that were previously
difficult to produce unless using other machines such as rapier weaving machines.
For fiscal 2008 and beyond, we plan to further strengthen the product appeal of our air-jet
looms and maintain our position as the global leader as we continue the legacy of our “familybusiness.”

Refocusing on the Basics of Manufacturing andStrengthening the Company’s Constitution
To continue “contributing to society through manufacturing,” sustainable growth and development
is imperative. Maintaining an unwavering commitment to this concept, we believe that refocusing
on the “basics of manufacturing” is of paramount importance at the juncture of our 80th
anniversary.
Accordingly, in fiscal 2007 we pursued further growth and development with a renewed spirit
by thoroughly promoting guidelines focused on the basic thinking and behavior for all employees of
the Toyota Industries Group.

Attracting Highly Ambitious Individuals and Creating a Vibrant Workplace
Toyota Industries has designated “enhance team strength and spirit” as the main thrust of its Vision2010 and a core initiative for driving future growth. Realizing this concept hinges on further raising thelevel of every employee’s unique skills and specialized techniques as well as management capabilities.

10

Toyota Industries Corporation

Annual Report 2007

Letter to Shareholders

As a key focal point, in fiscal 2007 Toyota
Industries promoted the cultivation of personnel
possessing the skills, perspectives and spiritof TPS in all business divisions, with eachdivision working to attain clearly defined targets.
Concurrently, the Corporate Center (corporate
headquarters) upgraded TPS training programs
and undertook TPS training by encouraging theparticipation of staff and providing TPS support

Technical Learning Centerfor each business division. Determined toaccelerate the development of personnel possessing top-caliber skills and techniques as well as
the required execution capabilities in terms of manufacturing, we further enhanced our TechnicalTraining Center with the establishment of the Engineering Education Office and began operations inJanuary 2007 as the Technical Learning Center.
With the adoption of these measures, we believe that the strengths of each individual are
steadily advancing. Combined with these assets, we believe that a “spirit of harmony,” namely,
teamwork and an overarching sense of humanity, will serve as a cornerstone needed to fully
utilize our team strengths. We will press forward with the creation of a spirited workplace where
communication flows smoothly and employees can gather for positive discussions and work totheir fullest abilities with a high sense of motivation.

Making Strides in Global Environmental Management
No discussion concerning corporate management can take place in the 21st century without
mentioning environmental concerns. Toyota Industries has continually carried out environmental
management and proactive information disclosure over the course of three successive
environmental action plans. Under our Third Environmental Action Plan completed in fiscal 2006,
Toyota Industries achieved all numerical targets, which included reducing CO2 emissions by 5%compared with fiscal 1991 levels and attaining a 50% reduction of targeted PRTR (pollutant releaseand transfer register) substances compared with fiscal 1999 levels.
The increased environmental load results not only from the production process but also the use of
products by customers. Driven by this awareness, we are making unprecedented efforts to expand
our lineup of ecological products under our Fourth Environmental Action Plan launched in fiscal 2007.
In the automobile field, for example, Toyota Industries is working on the development of products that
reduce CO2 emissions, including diesel engines and key components for hybrid vehicles. We believethat these efforts will also spawn new business opportunities further down the road.
We plan to expand this approach to all Toyota Industries Group companies and work to build
global environmental management to vigorously reduce emissions of greenhouse gases, utilize
resources more efficiently and reduce environmental risk factors, which we believe will allow us toresolutely fulfill our corporate responsibility.

Toyota Industries Corporation

Annual Report 200711

Building Quality into Our Own Processes
and Assuring Quality for Customers
One aim of Toyota Industries’ manufacturing philosophy
is to ensure that customers can use our products witha sense of reassurance worldwide. Based on TPS andTotal Quality Management (TQM), our development,
design, production technology, manufacturing and quality
assurance divisions act in unison, with design reviews as
a core element, as part of our steadfast efforts to attainquality. Reflecting the success and recognition of thesequality initiatives, in fiscal 2007 the Automobile Segment
once again earned the Superior Quality PerformanceAward presented to suppliers by TMC.

Superior Quality Performance Award

Our approach to quality initiatives is unrelenting. For
instance, we believe that the presidential guidelines issued at the beginning of fiscal 2008 ensurethat all employees thoroughly understand the meaning of “quality assurance.” Fully absorbing
this concept will further improve our awareness and actions, and each individual will be able toincorporate quality into his or her own work activities. We believe that employees who take pridein manufacturing will in turn ensure that no defects are sent to post-processes, thereby ultimately
eliminating problems for our customers.

Thoroughly Ensuring Safe Work
Operations
Safety serves as the basis for earnestly
undertaking manufacturing and represents thestarting point of all our activities. Within the Toyota
Group, we say, “safe work is ‘the door’ to all
work.” In keeping with this stance, all employees
strive to work cohesively in taking steps to ensurethat even the smallest risk is not overlooked andthat the sources of any potential accidents are

On-site inspections by top management

clearly eliminated.
As a means of bolstering our safety initiatives in fiscal 2007, we implemented a variety of
initiatives such as improving management systems along with safety inspections and audits by the
executive vice president in charge of overseeing production. At the same time, in accordance withthe theme of making regular on-site inspections, top management continued to visit numerous
worksites in person to confirm that safety is categorically being maintained accompanied by
improvements in quality and productivity.

12

Toyota Industries Corporation

Annual Report 2007

Letter to Shareholders

Raising Corporate Value
Regarding the outlook for fiscal 2008, the global economy is expected to sustain a mild expansion
despite disparities among geographic regions. Nonetheless, there are concerns of risks within
Toyota Industries’ operating environment, including exchange rate fluctuations and rising prices for
crude oil and other raw materials.
In view of these factors, we are aiming for an increase in consolidated net sales of ¥71.7 billion,
or 3.8%, to ¥1,950.0 billion; an increase in operating income of ¥5.1 billion, or 5.6%, to ¥95.0
billion; and an increase in ordinary income of ¥6.6 billion, or 6.0%, to ¥115.0 billion.
We believe this solid performance will be the result of our various management approach.
Above all, we are resolved to making unrelenting efforts to raise corporate value by refocusing on
the basics of manufacturing, strengthening our corporate constitution and providing products that
ensure the satisfaction of customers worldwide.
In closing, we fully appreciate the continued support and guidance of our shareholders,customers, local communities, and employees and their families.

June 2007

Tadashi Ishikawa
Chairman

Tetsuro Toyoda
President

Toyota Industries Corporation

Annual Report 200713

At a Glance
Automobile Segment

Main Products• Passenger vehicles• Diesel engines• Gasoline engines• Car air-conditioning
compressors• Electronic components forautomobiles• Foundry parts• Stamping dies

48.2%

Percentage of Net Sales

Materials Handling
Equipment Segment

40.8%

2AD
Diesel engine

DC-DC converter

ReflexReach truck

TZ-10A type “RR”
Truck mount aerial work platform

Main Products• Counterbalanced lift
trucks• Warehouse trucks• Aerial work platforms• Automated storage andretrieval systems• Automatic guided
vehiclesPercentage of Net Sales

Logistics Segment

7SEU17
Compressor

RAV4

GENEO (8FG25)
Internal combustion
counterbalanced lift truck

Main Services• Land transportation
services• Logistics planning• Operation of distribution
centers• Cash collection anddelivery and cash
proceeds management

4.8%

Percentage of Net Sales

Textile Machinery
Segment
3.1%

Main Products• Ring spinning frames• Roving frames• Drawing frames• Air-jet looms• Water-jet looms• Sizing machines
RX240NEW
Ring spinning frame

JAT710Air-jet loom

Percentage of Net Sales

Others Segment
3.1%

Main Products• Semiconductor package
substrates• Flexible printed circuit(FPC) substrates• Manufacturing equipment• Low-temperaturepolysilicon TFT-LCDs

Percentage of Net Sales

14

Toyota Industries Corporation

Annual Report 2007

Wire bonding
package substrate

FPC substrate

Low-temperaturepolysilicon TFT-LCDs

The Automobile Segment is Toyota Industries’ largest business segment and accounts
for over 48% of consolidated net sales. Within this segment, the Vehicle Business
manufactures the Vitz (Yaris outside Japan) and RAV4 under consignment from Toyota
Motor Corporation (TMC). The Engine Business produces diesel and gasoline engines
under consignment from TMC as well as engines for its own materials handlingequipment. Commanding the top global share, the Car Air-Conditioning Compressor
Business develops and produces fixed-displacement compressors and variabledisplacement compressors. This segment also produces foundry parts for engines andelectronics devices for automobiles. In fiscal 2007, net sales of the Automobile Segment
were ¥904.8 billion and operating income amounted to ¥33.5 billion.

Net Sales

Operating Income(¥ Billion)(¥ Billion)

1,000

80

The Materials Handling Equipment Segment manufactures and sells industrial vehicles
such as lift trucks, aerial work platforms, shovel loaders and tow tractors in addition
to automated storage and retrieval systems and automatic guided vehicles. Toyota
Industries sells its materials handling equipment under the Toyota L&F (Toyota Industrial
Equipment outside Japan), BT, Raymond, CESAB and AICHI brands. In fiscal 2007,
net sales of the Materials Handling Equipment Segment amounted to ¥767.2 billion.
Operating income totaled ¥47.2 billion.

Net Sales

Operating Income(¥ Billion)(¥ Billion)

1,000

80

800

60

600
40
400
20

200
0
FY

05

06

07

800

60

20

07

0
FY

05

06

07

Operating Income(¥ Billion)

8

100
80

6

60
4
40
2

20

05

06

07

0
FY

05

06

07

Net Sales

Operating Income(¥ Billion)(¥ Billion)

6

100
80

4

60
2
40
0

20
0
FY

The logistics-related business, which was included in the Others Segment, had been separated and declared independently as the
Logistics Segment starting from fiscal 2006.

06(¥ Billion)0* As STLCD and STMD are affiliates and not consolidated subsidiaries, their sales and operating income (losses) are not included in
the consolidated figures, but are accounted for by the equity method.

05

Net SalesFY

The Others Segment includes newer businesses that we have entered relatively recently.
This segment includes TIBC Corporation, a joint venture with Ibiden Co., Ltd. that
produces semiconductor package substrates. ST Liquid Crystal Display Corp. (STLCD)*
and ST Mobile Display Corporation (STMD)*, joint ventures with Sony Corporation,
produce low-temperature polysilicon TFT-LCDs. In fiscal 2007, net sales of the Others
Segment amounted to ¥58.3 billion and operating income was ¥6.3 billion.

07

40

0

The Textile Machinery Segment produces and sells spinning and weaving machinery.
Spinning machinery includes the manufacture and sales of high-speed ring spinning
frames and roving frames while weaving machinery involves the manufacture and salesof air-jet looms, which insert weft yarns using air, and water-jet looms, which use water
for the same purpose. We also manufacture and sell such preparatory machinery for
weaving processes as sizing machines and automatic drawing-in machines. In fiscal
2007, net sales of the Textile Machinery Segment were ¥58.4 billion, and operating
income totaled ¥1.0 billion.

06

400

FY

The logistics-related business, which was included in the Others Segment, had been separated and declared independently as the
Logistics Segment starting from fiscal 2006.

05

600

200

In addition to engaging in truck cargo transport and warehousing operations, Toyota
Industries carries out the Logistics Solutions Business for handling all aspects of logistics
to help customers reduce their logistics costs. We are building proprietary businessmodels that strive to optimize the overall flow of “goods,” “cash” and “information” fromthe manufacturer to the consumer. Through these activities, we aim to contribute to theoverall optimization of our customers’ logistics. In fiscal 2007, net sales of the Logistics
Segment amounted to ¥89.4 billion. Operating income was ¥1.7 billion.

0
FY

05

06

07

(2)
FY

05

06

07

Net Sales

Operating Income(¥ Billion)(¥ Billion)

8

100
80

6

60
4
40
2

20
0
FY

05

06

07

0
FY

05

06

07

Note: Segment net sales figures do not include intersegment transactions. However, segment operating income figures do include operating income (losses) arising from intersegment transactions.

Toyota Industries Corporation

Annual Report 200715

Focus on Business

Materials Handling
Equipment

Share
Our Strength
The Materials Handling Equipment Business is
fortifying its global No. 1 position through the
Toyota Material Handling Group (TMHG), a neworganization that integrates TOYOTA Material
Handling Company (TMHC), the global leader incounterbalanced lift trucks, and the BT Industries
Group, the world’s top name in warehousetrucks. The BT Industries Group of companies
were acquired and became subsidiaries of the
Toyota Industries Group in 2000.
Initiating full-scale activities in April 2006,
TMHG is already steadily generating a wide
range of noteworthy achievements. We believethat TMHG meets customers’ logistics needs
by providing one-stop shopping for products
and services that combine a broad scope ofmaterials handling equipment with optimalbusiness solutions. This approach enables
the Company to enhance customers’ logistics
efficiency worldwide, further strengthening
Toyota Industries’ position as a world-leading
supplier of materials handling equipment.
The Materials Handling Equipment Businessalso includes Aichi Corporation, a subsidiarythat commands the dominant share of Japan’s
market for aerial work platforms.

16

Toyota Industries Corporation

Annual Report 2007

Materials Handling Equipment

Market Overview for Materials Handling Equipment

Market for Materials Handling Equipment
Continues to Expand

advance over previous models and incorporates original systems that

Having experienced continuous growth since calendar year 2002

vibration along with both operator safety and comfort and operatingin tandem with a general economic recovery, the global market for

efficiency. Production of the newly improved model got underway inmaterials handling equipment grew by around 12% in calendar year

Japan in September 2006 and in the United States in January 2007,2006. Despite concerns about soaring prices for crude oil and steel

and will begin in Europe in September 2007. The new generationmaterials, the outlook from calendar year 2007 onward is also forof lift trucks is sold as the GENEO in Japan, the 8-Series in North

relatively high growth in emerging markets, particularly in the BRICs

America and International, and the Toyota Tonero in Europe.

contribute to marked improvements in terms of reduced noise and(Brazil, Russia, India and China) countries. Modest expansion in such

By improving our previous engines, as a leading manufacturer

key markets as Europe, North America and Japan is also expected.

we are able to offer a new series of lift trucks that not only meetsstrict exhaust emissions regulations in Japan one year in advance

Rising Safety and Environmental
Consciousness

of required implementation but also incorporates leading-edge

Customer needs within these markets reflect a growing global

the United States three years ahead of schedule and meets newawareness of safety and the environment, as evidenced by steadily

European emissions standards that will take effect in 2008.

technologies that satisfy stringent 2010 emissions regulations inrising demand for materials handling equipment that not only

In addition, a new hand pallet truck based on a new-type

minimizes such dangers as rollover accidents but also stresses

pump and manufactured on an entirely new production line was

ergonomics, low noise and low vibration, as well as reduced exhaust

introduced in Europe. This truck delivers improved performance andemissions.

is manufactured in an environment-friendly manner that reduces the

As a noteworthy response to customer needs, our new

impact on the environment in terms of chemical usage, lower energy

generation of engine-powered lift trucks represents a significant

consumption and highly efficient production processes.

Integration of TMHG
Since becoming partners in 2000, TMHC and the BT Industries

In managing and carrying out its operations, TMHG has divided

Group have continued to examine each other’s strengths in theits global markets into four regions—Europe, North America,

pursuit of synergies that include mutually supplying respective brandInternational and Japan—and established a Board as the decision-

products, sharing sales and production know-how, exchanging

making body within each of these four regional organizations. A

resources and jointly procuring products. Determining that the time

Management Committee composed of TMHG top management andwas ripe for maximizing synergies via the full-scale integration ofrepresentatives of each regional organization oversees the formulation

operations, TMHG became operational from April 2006 as a newof strategies and manages TMHG as a whole.

framework integrating TMHC and the BT Industries Group.

TMHG has also set up Sub-Committees comprising functional

Organizational Chart of Toyota Material Handling Group

TMHG

Management Committee

Global Strategy, Optimum Resource Allocation, Global Management Control

TMHJ
TMHE

TMHNA

TMHI

TMHJ

Toyota Material Handling
EuropeToyota Material HandlingNorth America

Toyota Material HandlingInternational

Toyota Material HandlingJapan

R&D, Product Planning, Information System/Information Technology, Plant Operation,
Sub-Committees Quality,
Human Resources and FinanceToyota Industries Corporation

Annual Report 200717

Focus on Businesssections of each regional organization to handle such principal

While the BT and Raymond brands wield strong brand powerfunctions as Quality, R&D, Product Planning, Information System/

in Europe and North America, respectively, the TOYOTA brand has

Information Technology, Plant Operation, Human Resources andachieved a solid position in Japan, the United States, Europe andFinance. Cross-sectional linkages permeating the entire organization

several International markets (e.g., Australia and a number of Asian

facilitate the sharing of best practices and know-how cultivatedcountries). In its operations, TMHG intends to firmly maintain its

regionally as well as globally.

core TOYOTA, BT and Raymond brands while solidifying the optimal

We are currently pushing ahead with measures aimed at realizing
our target of becoming “Undisputed No. 1” in the global industrial

brand and sales structures in each region to ensure that the power of
each brand is fully utilized.

truck market, and each of these initiatives has already begun to

Through the implementation of these measures, we plan to work

steadily yield important results. Examples of the growing synergies

toward capturing an even higher global market share while aiming for

already created include joint product development (e.g., three-wheel

a further increase in profitability.

electric lift truck for the European market), development of our own
key components, strengthening of our production structure through

TMHG’s Sales in 2006

the horizontal deployment of the Toyota Production System (TPS)

TMHG achieved record-high sales of almost 190,000 industrial trucks

throughout the entire group, the reorganization of sales structures inin calendar year 2006. Besides supplying cutting-edge products

a number of regions and enhanced development efficiency throughmanufactured in Japan, North America, Europe and China, TMHG

the sharing of systems.

also provides top-quality services worldwide.

Business Activities in Fiscal 2007 by Geographic Region

Japanese Market

Capitalizing on its comprehensive product lineup for materials

Amid a stable Japanese market, unit sales in the overall lift truck

handling, TMHJ intends to continue to offer products closely tailoredmarket increased 5% to 86,000 units in fiscal 2007.

to customer needs and provide solid logistics-related solutions.

Calendar year 2006 marked the 50th anniversary since wecommenced sales of lift trucks in Japan. Commemorating thisLaunch of the Tugcart AGV

occasion, Toyota Material Handling Japan (TMHJ) put more energy

Sales of the Tugcart AGV commenced in February 2007 in Japan.

into sales promotion activities, which resulted in an impressive 43%

Developed in response to a heightened need for AGVs that enable

market share for domestic sales of lift trucks in fiscal 2007. This

customers to reduce their logistics personnel and improve theirmeans we have maintained the top position in the Japanese lift truck

logistics processes, the Tugcart is easy to introduce, plus courses

industry for the 41st consecutive year. In September 2006, TMHJ

can be set up or changed by simply affixing magnetic tape oncommenced sales of the new generation of engine-powered 1- toguidepaths. It can also be used with existing carts without the need

3.5-ton internal combustion counterbalanced lift trucks (sold as thefor drastic modifications, and though only 19 cm high, boasts high

GENEO in Japan) following a full model change. As its mainstay

power with a maximum 1-ton towing capacity. Although the Tugcart

product, the GENEO provides dramatically greater product value

AGV is primarily utilized on factory floors within the manufacturing

in terms of safety, environmental attributes and ease of operation,industry at present, its wide range of applications extend fromand is expected to contribute significantly to the performance of thecomponents manufacturers seeking to increase automation toMaterials Handling Equipment Business.

product transport in the light manufacturing industry and tray

Aichi Corporation, which is involved in the manufacture and salesof aerial work platforms, posted increases in both sales and earnings

services at hospitals. Accordingly, sales expansion will be targeted byproposing these and other uses.

due to a brisk investment climate as Japanese companies continued
to enjoy strong sales.
The year 2006 also marked the 20th anniversary since we started
sales of materials handling systems. In response to greater demand
for automatic guided vehicles (AGVs), during fiscal 2007 we upgraded
our product lineup with the introduction of the Tugcart, a compact yethighly powerful AGV that enables a reduction in customers’ logistics
personnel as well as improvements in logistics processes.

18

Toyota Industries Corporation

Annual Report 2007

Tugcart AGV

Materials Handling Equipment

North American Market

Material Handling Europe (TMHE) established a new sales record for

Toyota Material Handling North America (TMHNA) increased its

TOYOTA-, BT- and CESAB-brand units.

lead as the No. 1 materials handling company in North America

TMHE took steps to both further develop its central organizational

for the fifth consecutive year. Of significant note was the TOYOTA

structure and launch new, unified sales and marketing organizations

brand’s 2006 growth rate, which was nearly double that of thein a number of European markets. Centrally, TMHE unveiled a newentire U.S. market for

management structure and identified areas—including sales, service

industrial trucks. In addition,and marketing—where customers will be better served by integrating

TMHNA launched the highly

these support functions.

anticipated new generation

European customers, particularly those with large fleets, areof engine-powered lift trucks

increasingly looking for materials handling suppliers who can(sold as the 8-Series in Northprovide them with a full range of products, supported by services,

America).

fleet management systems, as well as the flexibility of lease and

The 8-Series, with
70% less smog-forming
emissions than the 2007
U.S. Environmental

rental programs. To address these evolving market demands,
8-Series
Internal combustion
counterbalanced lift truckProtection Agency (EPA) federal emissions standards, is just one
environmentally focused initiative TMHNA is employing to distinguish

TMHE created a new European Key Accounts (EKA) Department
combining the previous Toyota and BT major account teams. The
EKA Department provides our largest customers with a consistent,
comprehensive offering of TOYOTA and BT products and services.
TMHE has also studied each European market to determine theitself from its competitors. Another key initiative is fuel-cell lift trucks.

best approach to strengthen customer relationships and improve

A prototype of the industry’s first fuel-cell lift truck was proudly

customer contact. TMHE has launched unified Marketing & Sales

displayed at ProMat 2007. The TOYOTA prototype uses hydrogen as

Companies in a number of European markets, including the Nordic

its main power source and produces electricity without combustion,

countries, Germany and the United Kingdom, each of which will

generating zero CO2 emissions. Additionally, Raymond received aprovide its market with a complete range of TOYOTA and BT

contract from the New York State Energy Research and Development

products and services.

Authority (NYSERDA) for a hydrogen fuel-cell feasibility study at a

At the same time, TMHE has taken steps to increase the number

manufacturing facility of Toyota Material Handling Manufacturingof fully owned distribution companies by acquiring independent

North America (TMHMNA) in Greene, New York, which we believe

distributors, such as Toyota distributors in Austria, Finland, Greece,

will expedite the commercialization of our environment-friendly

the Netherlands and Spain.

technology. TMHMNA also continued implementation of TPS at

In terms of its available products, TMHE had very positive results

its manufacturing facilities in Greene, New York; Muscatine, Iowa;

for its new range of three-wheel, 24-volt electric counterbalanced

Brantford, Ontario; and Columbus, Indiana. We believe this will enable

trucks marketed under the TOYOTA, BT and CESAB brands. This

improvement of our already strong reputation for product quality andrange was developed by engineers in Europe in close collaboration

reliability. Furthermore, TMHMNA continued efforts to competitively

with their colleagues in Japan and is an excellent example of our

supply high-quality products; as part of this effort, the procurement

global coordination and synergy building. The success of thesedepartment was centralized at its facility in Greene, New York, which

trucks, which are produced at TMHE’s manufacturing facility in

we believe will enable more cost-effective production of lift trucks.

Bologna, Italy, demonstrates the kind of benefits that can be realized

Many other significant events took place during the fiscal year

by further integration.

under review. Raymond received an award for its human resources

Furthermore, a new range of compact TOYOTA electric tow

development policies from the New York Management Council in

tractors was introduced, and a number of BT-brand products wererecognition of its best practices in health and safety that are part of its

launched in 2006, including the market’s fastest horizontal transport

unsurpassed safety program. Additionally, Raymond will celebrate thetruck that delivers driving speeds of nearly 20 km/h with three loaded

production of its 300,000th Raymond-brand lift truck during 2007.

full-sized pallets. A new BT-brand truck designed for customers

Meanwhile, the TMHMNA manufacturing plant in Indiana received

needing to stack and load/unload two pallets on top of each otherthe Indiana Governor’s Award for Environmental Excellence andwas also released to market along with a new hand pallet truck thatcelebrated the production of its 250,000th TOYOTA-brand lift truck.

uses the newly developed pump production line in Mjölby, Sweden.
The new pumps further enhance the durability of the truck andEuropean Market

reduce the environmental impact.

The overall European market for industrial trucks continued to

Other highlights included the power truck division in Mjölby

show significant growth, with especially strong growth recorded

reaching a milestone in 2006 with the shipment of its 500,000th unit,

in the markets of Central and Eastern Europe. Accordingly, Toyota

an electric pallet truck. The factory in Ancenis, France, celebrated

Toyota Industries Corporation

Annual Report 2007

19

Focus on Business

10 years of production and 100,000 units of cumulative production,

network to meet growing demand, while in the Middle East, efforts

and the factory in Bologna, Italy, earned the International Bestare being carried out to rationalize and strengthen operations. The

Factory Award for excellence in such areas as quality, lead-times andestablishment of a sales and service base in India is also a key focus

innovation.

in view of a growing need for materials handling equipment andquality solutions for customers’ planned distribution centers. With

International Market

the proliferation of local production plants for a variety of industries

These markets include Africa, Asia, the Middle East, Oceania andincluding car manufacturers and suppliers for these plants, TMHI will

South America—areas where economic expansion is creating

work to ensure quality products will be available to meet these needs.

growing demand for materials handling equipment. Prominent among

In addition to activities in the marketplace, we have also

these areas are the BRICs countries, where Toyota Material Handlingfocused on internal structures in order to ensure the organizational

International (TMHI) is concentrating major efforts on meeting

infrastructure is in place to support our business across the

expanding requirements for its products and services. The ability to

substantial number of markets under our responsibility. To this end,

offer a full range of counterbalanced lift trucks and warehouse trucks

we have rationalized key management areas to integrate the skills

is of vital importance in this process.

within our international operations. This enables us to drive our

TMHI’s activities have included the strengthening of its
production, sales and service capabilities at its bases in China.
Specific measures there include a structured training process of
its sales and service network to ensure a high level of productknowledge so that customers can gain support in all areas ofbusiness in an ever more coherent fashion, as well as increase ourefficiencies and competencies.
These and other measures have contributed to continued
favorable results in International markets.
September 2006 marked the start of imports from Japan of thematerials handling, including major investment projects where TMHI

new generation of engine-powered lift trucks (sold as the 8-Series in

can offer sophisticated software systems designed to maximize

International). The enhanced safety and environmental performanceutilization of space. For distribution centers and other complexof the 8-Series have earned this lift truck especially high acclaim,

applications, its own regional experts in Shanghai support thewhich is underscored by a steady increase in unit sales.

national dealer network. In Brazil, TMHI is enhancing its sales

Looking Ahead

Japanese Market

and commenced training for distributors worldwide. A specialized

In 2007, we anticipate a stable business environment supported bytraining facility is under construction in Handa, Aichi Prefecture, and wesustained growth in the Japanese industrial truck market.

will continue to actively engage in human resources development toAgainst this backdrop, TMHJ aims to expand industrial truck

ensure the future growth of Toyota Industries.

sales in the domestic market by highlighting the product value of the
new generation of engine-powered lift trucks launched in September

North American Market

2006. We also realize it is increasingly important to provide the kinds

TMHNA anticipates that the general industrial truck market in Northof services that comprehensively support customers’ logistics not only

America will slow down in 2007, but that the market for electric lift

through sales of materials handling products but also by providing

trucks will remain strong. The continued strength of the latter market

solutions. Keeping this in mind, we intend to deploy solution-based

coincides with TMHNA’s continued environmental focus. With several

sales with TPS at the core and respond to customer needs from both

environmental accolades already under its belt, TMHNA will again makethe hardware and software aspects.

this important business and social issue a top priority. Several new

We established the TMHG Training Center as the organization

including a tow tractor and a Class 3 AC-powered truck. Recognizing

professionals with high levels

that the strongest segment of the electric truck market consists ofof expertise and abilities in thecompanies where warehousing, distribution or order fulfillment areareas of sales and services atcritical success factors (e.g., wholesale and retail distribution), ongoingboth domestic and overseas

investment in the development of more reliable, high-performance,

distributors. We have alreadyRaymond-brand electric lift trucks will continue to play a key role indevised new training curricula

20

electric lift trucks will be launched under the TOYOTA brand in 2007,

overseeing the nurturing of

Toyota Industries Corporation

TMHG Training Center

Annual Report 2007

enabling distributors to both trim costs and increase throughput.

Materials Handling Equipment

Through both of TMHNA’s market-leading TOYOTA and Raymondof safety, productivity, durability, comfort and the environment. The

brands, we remain committed to helping our customers improve their

new lift trucks will offer a formula (known as the Tonero+ formula) thatbusiness. Under the TOYOTA brand, for example, we are set to launchallows customers to specify additional features in the areas of safety,

the new “Toyota Fleet Solution” fleet management program, a data-

productivity, comfort and durability in order to fulfill their individual

driven, comprehensive approach to fleet management designed tobusiness needs.

deliver better bottom-line business performance to customers. Under

In addition, several truck models will be equipped with a built-in

the Raymond brand, we plan to continue to focus on anticipating

wireless communication system. This innovative system will provide

customers’ needs and developing warehousing solutions to improvecustomers with remote access to performance data from the trucks

Raymond’s position as the leading provider of materials handlingand will allow monitoring of the battery status, with collision sensors

equipment to this large market segment.

providing additional data.

The year 2007 also marks the 40-year anniversary of establishing
TOYOTA-brand lift truck operations in the United States. From thefirst lift truck, a cushion tire 6,000-pound capacity internal combustion

International Market

model introduced nearly four decades ago, to the new generation of

TMHI sees continuing and significant growth potential in International

engine-powered lift trucks (sold as the 8-Series in North America),

markets—a trend that has been further developing over the 12

Toyota continues to push the bounds of product and technology

months ended March 31, 2007 and shows no sign of abating. This

innovation with its full line of high-quality lift trucks.

trend underlines the development of many markets, and confirms theimportance of efficient logistics for industrial and commercial partners.

European Market

Where customers seek to build and invest in a business, the need for

There are some concerns that the rate of growth in the European

an informed supplier to deliver good solutions, products and support

market will slow down due to the persistent strength of the euro andservices is paramount. Strong growth in fiscal 2007 in the fields ofthe effects of a decelerating U.S. economy. Nevertheless, we foresee

third-party logistics and warehousing/distribution centers emphasizes

robust demand, particularly in Central and Eastern European countries.

this point, and is a key component of business planning.

During fiscal 2008, TMHE intends to continue to integrate a

Our focus continues to be directed at improving internal structures

number of central support functions as well as local operations in

to ensure the right levels of support to our market operations. We

countries where it has determined this would allow operations tolook to continue our commitment in key markets to provide high-improve service to its customers.

quality sales and service operations and to ensure that local skill levels

We believe that our commitment to investment in productare further developed through carefully planned training courses.

development will lead to several new and renewed items in our

We strive to underpin our position as a market leader by developing

warehouse and counterbalanced product ranges, including the launch

products that accurately ascertain the needs of different markets andof the new generation of engine-powered lift trucks (sold as theby establishing optimal sales and service structures in all markets, with

Toyota Tonero in Europe). These 1.5- to 3.5-ton internal combustiona strong focus on market coverage and on quality of products andcounterbalanced lift trucks demonstrate the best of Toyota’s global

support to ensure customer satisfaction.

research and development capabilities and give European customers a
European-produced truck that addresses their specific needs in terms

TMHI remains dedicated to providing the optimum solutions for its
customers.

Worldwide Manufacturing Bases of TMHG

Toyota Industries Corporation

Annual Report 200721

Focus on Business

TopicsToyota Industries Displays Hybrid Lift Trucks at EVS 22

awareness and solutions,

In October 2006, Toyota Industries displayed its hybrid lift truck

communication,

prototypes, developed jointly with Toyota Motor Corporation, atand remuneration

the 22nd International Battery, Hybrid and Fuel Cell Electric Vehicle

and awareness. The

Symposium & Exposition (EVS 22). This is the world’s largest

management of Raymondinternational symposium for electric vehicles, which covers suchis making its best efforts

fields as electric vehicles, hybrid cars and fuel-cell cars. The eventto ensure this program

attracted participants from a vast range of sectors, spanning notfunctions efficiently.

only manufacturers and ordinary users from around the world but
also representatives of nationaland municipal government

BT Attains Cumulative Production of 500,000 Warehouse
Trucksbodies, research institutes and the

The BT power truck division in Mjölby, Sweden, achieved cumulative

media. Amid a rising tide of global

production of 500,000 units in November 2006. While it took 28

interest in electric vehicles,

years to reach cumulative production of its first 100,000 units since

this exhibition served as ancommencing production 60 years ago, BT subsequently accelerated

excellent forum for extolling

production to produce its mostthe benefits of ourrecent 100,000 units over a period

future technologies.

of just three years. Although attaining
aggregate production of 500,000

Toyota Factory Celebrates Production Milestone

units represents a significant

In September 2006, the Toyota Industrial Equipment plant in Ancenis,

milestone, BT will continue working

France, celebrated 10 years of operation and cumulative production

to establish a structure that will allow

of 100,000 units. The Ancenis facility produces electric and engine-

the annual production of 60,000

powered counterbalanced lift trucks for the European market, andunits in line with plans to further

since beginning production in 1996 has established itself as a world-

expand sales.

class manufacturing plant.

Raymond Celebrates 85th Anniversary

BT New Compact Three-Wheel Counterbalanced Lift
Truck Earns Safety Award

Increases in population and evolving lifestyles have spurred increased

In October 2006, BT’s compact three-wheel counterbalanced lift truck

demand for warehouses and delivery capabilities. In responding toearned recognition as a lift truck with the highest standard of safety

this trend, Raymond has continually developed high-performance lift

at the Préventica exhibition in France. This biennial exhibition focusestrucks, thus playing a key role in enabling shippers to trim costs andon safety and ergonomics, and the most recent exhibition attracted

raise processing capabilities.

6,000 visitors. The BT-brand series of C3E-R electric lift trucks wasUpon the occasion of its 85th

awarded the Innovation Prize, winning high acclaim for such featuresanniversary in 2006, Raymondas the C3E-R’s automatic speed reduction on cornering and drive-

remains committed towheel direction indicator. The C3E-R was developed by engineers in

responding to customer needs

Europe in close collaboration with their colleagues in Japan and is an

as a leader in both offering

excellent example of global coordination and synergy building in thematerials handling equipment

Toyota Material Handling Group.

and providing solutions.

Cesab Wins International Best Factory Award

22

Raymond Receives Award for Human Resources
Development Policies

Cesab’s factory in Bologna, Italy, earned the International Best Factory

In October 2006, Raymond received an award for its humanSponsored by Bocconi University’s SDA Bocconi, one of the world’s

resources development policies from the New York Management

authoritative institutions in economics and business administration,Council in recognition of its best practices in health and safety that

as well as Sole 24 Ore, a leading economic newspaper, this award isare part of its unsurpassed safety program. Raymond provides

presented based on a comprehensive evaluation that encompasses

its employees with a safety program comprised of five different

quality, lead-times, flexibility and innovation. Cesab has achieved highprincipal categories: policies and procedures, practice, problem

name recognition internationally.

Toyota Industries Corporation

Annual Report 2007

Award, which is presented to excellent production plants in Italy.

Materials Handling Equipment

Products for the Japanese Market

Industrial Vehicles

GENEO (8FG25)

GENEO-B (7FB15)

GENEO-E (7FBE15)

GENEO-R (7FBR15)

Tow Tractor

Skid Steer Loader

Internal combustion
counterbalanced lift truck

Electric counterbalanced
lift truck

Three-wheel electriccounterbalanced lift truck

Electric reach truck(2TD25)(4SDKL8)

Materials Handling Systems

Partner Rack

Rack Sorter B

Rack Sorter P

Tugcart2AFBR15APLB8Rail-less mobile rack

Automated storage andretrieval system(Plastic container type)

Automated storage andretrieval system(Pallet type)

Automatic guided
vehicle system

Automatic guided
lift truck

Automatic guided
pallet truck

Please visit www.aichi-corp.jp for
more information.

Truck Mount Aerial Work Platforms

SH15B

SE08C

TZ-10A type “RR”

Self-Propelled Aerial Work Platforms

SC40A

SR-18AJ

RX07B

Note: Although Aichi Corporation is not integrated into the Toyota Material Handling Group, it comprises an important part of the Materials Handling Equipment Business.

Toyota Industries Corporation

Annual Report 200723

Focus on Business

Products for the North American Market
Please visit www.toyotaforklift.com for more information.

7FGU708FGCU25

7FGCU55-BCS

Internal combustion pneumatic tire
counterbalanced lift truck

Internal combustion cushion tire
counterbalanced lift truck

Internal combustion cushion tire
counterbalanced lift truck—boxcar
special model

8FGU25

7FBEU20

7FBCU25

7BPUE15

Three-wheel electric counterbalanced
lift truck

Electric cushion tire counterbalanced
lift truck

Electric order picker

Internal combustion pneumatic tire
counterbalanced lift truck

Please visit www.raymondcorp.com for more information.

Raymond Model 7400
Reach-Fork Truck

Raymond Model 4200 StandUp Counterbalanced Truck

Reach truck

Electric counterbalanced truck

Raymond Model 8400 Pallet Truck
Electric pallet truck

24

Toyota Industries Corporation

Annual Report 2007

Raymond Model 5600
Orderpicker

RaymondSwing-Reach Truck

Order picking truck

Very narrow aisle truck

Materials Handling Equipment

Products for the European Market
Please visit www.toyota-forklifts.eu for more information.

Internal combustion counterbalanced
lift truck (1.5-3.5 ton)

7FG/D35

7FBMF25

Internal combustion counterbalanced
lift truck (3.5-5 ton)

Electric counterbalanced lift truck (80V)*Launched in calendar year 2007

7FBEF15

4CBT2Three-wheel electric counterbalanced
lift truck (48V)

Three-wheel electric counterbalanced
lift truck (24V)Electric tow tractor

Please visit www.toyota-forklifts.eu for more information.

VectorReflexStratos

Ixion

Very narrow aisle truck withshuttle forks

Reach truck

Powered stacker truck withstand-in cab

Support arm stacker truck

Minimover

Opus

Orion

Pro Lifter

Powered stacker truck

Low-level order picking truck

Powered pallet truck

Hand pallet truck

Toyota Industries Corporation

Annual Report 200725

Focus on Business

Car Air-Conditioning
Compressor

Car Air-Conditioning
Compressors Top
20 Million Units to
Lead the Global
MarketWith annual sales exceeding 20 million units,
Toyota Industries commands the world’s No. 1
share for car air-conditioning compressors—
testimony to the high reliability of theseproducts. Underlying this leading position is
our ability to develop new products that we
believe anticipate the needs of the times as wellas outstanding technological capabilities that
support product development. In maintaining
the top global position, we remain committed
to addressing the need for car air-conditioning
compressors that are more compact, lighter inweight and offer higher performance, thereby
enhancing the comfort of vehicles.

26

Toyota Industries Corporation

Annual Report 2007

Car Air-Conditioning Compressor

Toyota Industries Achieves Record Sales of
20.45 Million Units
The Car Air-Conditioning Compressor Business is one core businessof the Automobile Segment as well as an important strategic
business of Toyota Industries. Tapping excellent development
and technological capabilities, Toyota Industries develops andmanufactures high-quality, efficient products that it supplies not
only to Toyota Motor Corporation (TMC), but also to other premier

TD Automotive Compressor Kunshan Co., Ltd.

automakers worldwide. In so doing, we believe we are making
valuable contributions to technological advances, improvements in
comfort and fuel efficiency of vehicles.
Thanks to the development of products that anticipate user

Product Development Capabilities that
Respond to Global Needs Focusing on Basic
Performanceneeds and to our proactive sales expansion activities, Toyota

Toyota Industries’ car air-conditioning compressors continually

Industries’ total sales of car air-conditioning compressors in fiscal

anticipate the latest user needs, earning high acclaim for our2007 reached an all-time high of 20.45 million units, an increase of

products from TMC and other leading automakers worldwide.

1.34 million units from the previous fiscal year. In gearing up to meet

We have compiled a solid record of ongoing achievements

increased demand, we made further strides in strengthening ourin developing technologically advanced car air-conditioning

optimal global production structure during the fiscal year. Among

compressors, with strong emphasis on basic performancethe more noteworthy achievements, in April 2006 Toyota Industries

requirements, including reliability at high operating speeds, quiet

began producing variable-displacement compressors at our fourth

operation, compactness, light weight and fuel efficiency. Moreover,overseas compressor manufacturing subsidiary, TD Automotive

because our customers are leading global automakers, we engage

Compressor Kunshan Co., Ltd. (TACK) in Kunshan, China. In North

in well-honed product development to closely tailor our compressors

America, we strengthened our production capacity for variable-

to diverse customer needs while vigorously promoting productdisplacement compressors at TD Automotive Compressor Georgia,

development with a view to the future.

LLC (TACG), while in Japan we completed renovation of our Obu
Plant in May 2006.

As excellent examples of major world-first technologicaldevelopments, in 1981 Toyota Industries developed a compact,

All of Toyota Industries’ car air-conditioning compressors arelightweight 10-cylinder swash-plate fixed-displacement compressor

supplied to DENSO Corporation (DENSO), which in turn sells themwith an excellent reputation for quietness and superb reliability

to leading automakers worldwide.

at high operating speeds. Adding to our achievements, in 1995

Compressor Sales(Million units)

22
20World’s first electricallydriven compressor
equipped with an inverter

World’s first mass-produced
electrically driven compressor
for hybrid vehicles

18
16
14

World’s first variable-displacement
clutchless compressor

12
World’s first one-way swash-plate
variable-displacement compressor

10
World’s first 10-cylinder
swash-plate fixeddisplacement compressor

8
6
4

OthersVariable-displacement compressor
Fixed-displacement compressor

20FY

81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

Toyota Industries Corporation

Annual Report 200727

Focus on Businessthe development of an internally controlled one-way swash-plate

Operating an Optimal Global Production
Structure

variable-displacement compressor that contributes to lower CO2

Underscoring our firm commitment to meeting the needs ofemissions and energy savings by reducing the load on the engine tocustomers worldwide, Toyota Industries has been striving to realize

increase fuel efficiency. In 1997, Toyota Industries once again broke

a flexible global production structure for its Car Air-Conditioning

new ground by successfully developing an externally controlled

Compressor Business.

we addressed growing concerns about the environment with

continuous variable-displacement clutchless compressor that

Toyota Industries currently operates a far-reaching network ofenhances acceleration and reduces energy consumption by changing

production bases spanning Japan, North America, Europe and Asia.

displacement in response to the heat load and engine revolutions.

In Japan, our largest production base, we have built an integrated

Subsequently, in 2003 we collaborated with DENSO to develop an

production structure encompassing molds, die casts, processing andelectrically driven compressor for hybrid vehicles. This compressor

assembly centered on the Kariya, Obu and Higashiura plants. These

allows the air conditioner to be operated even when a hybrid vehicle’s

three facilities play a key role as mother plants for our domestic andengine is stopped, thus realizing an optimal balance between fueloverseas subsidiaries. As one example, these plants’ highly advanced

efficiency and comfort. In 2005, Toyota Industries developed a newaluminum die-cast technologies and technologies for automatingcompact electrically driven compressor equipped with an inverter.

production lines utilizing robots are being deployed at production

We believe that each of these car air-conditioning compressors
offers irrefutable proof of the technological and competitive superiority

bases in Japan and overseas, enabling major achievements.
In North America, Michigan Automotive Compressor, Inc. (MACI),

that has propelled Toyota Industries to the world’s top position in

based in the U.S. state of Michigan, has been producing swash-terms of unit sales and market share.

plate fixed-displacement compressors since 1990. In December

Looking to the future, we intend to continue our active approach

2005, TACG, which is located in the U.S. state of Georgia,

to developing cutting-edge technologies and new products thatbegan production of variable-displacement compressors as ourcontribute to the development of new cars by automakers worldwide,

second North American compressor production base. Although

not only for conventional engine-powered vehicles but also for hybrid

fixed-displacement compressors are currently the mainstream

vehicles, for which global demand is expected to rise amid soaring

compressor used in North America, we anticipate that greater global

energy prices and mounting concern for environmental protection.

environmental awareness will drive increased demand for variable-

Worldwide Manufacturing Bases of Car Air-Conditioning Compressor

TDDK
Toyota Industries
Corporation

DNTS

MACI
TACG
ACTIS

DWHI
YSD
TACK
SUBROS
DNIA
Consolidated subsidiaries
Licensed manufacturers

DNBR

Toyota Industries produces compressors through a global tripolar structure encompassing Europe, the United States and Asia (including Japan), established through direct
investments. We also license production in Asia (excluding Japan) and South America. By carrying out production near our markets, we believe we are better able to supply
products precisely tailored to local market needs while reducing shipment costs and exchange rate risks.

28

Toyota Industries Corporation

Annual Report 2007

Car Air-Conditioning Compressor

displacement compressors, which enable excellent energy efficiency.
In Europe, where environmental awareness is high, TD Deutsche
Klimakompressor GmbH (TDDK) has been producing swash-plate
variable-displacement compressors since 2000.
In China, where the automobile market is recording remarkable

TopicsObu Plant Renovation Completed
In fiscal 2007, we completed the phased renovation of

growth, we began producing variable-displacement compressors at

the Obu Plant in Japan that began in 2000. The Obu

TACK in April 2006.

Plant carries out integrated production encompassing

As these examples illustrate, Toyota Industries is making

the manufacture of molds for aluminum die-castsignificant progress in further strengthening its global production

products and aluminum die casts as well as component

structure.

processing. The Obu Plant plays a key role both as the

Reflecting our determination to contribute to reducing theenvironmental load and reusing resources, we also remanufacture

Materials Development Center and as the mother plantfor production bases in Japan and overseas.

compressors for the aftermarket (auto replacement parts andsupplies market) at Texas-based ACTIS Manufacturing, Ltd., LLC in
the United States.
Regarding future trends, we foresee increased demand forcompressors in line with a rise in automobile sales. Consequently,
Toyota Industries will push forward with initiatives to upgrade its
global production structure to respond to customer needs for globally
optimal production and procurement.
* Remanufacturing involves repairing and recycling products to give them the same functions as new
products by overhauling rebuilt, used and malfunctioning products and exchanging components.

Fixed-Displacement Type

10S17 compressor

SCS06 compressor

SV07 compressor(Swash-plate type)(Scroll type)(Vane type)Continuous Variable-Displacement TypeFor Hybrid Vehicles

7SBU16 compressor

7SEU17 compressor

ES27 electric compressor

ES34 electric compressor(Swash-plate type)(Externally controlled,
clutchless type)(Hermetic scroll type)(Hermetic scroll type)

Toyota Industries Corporation

Annual Report 200729

Focus on Business

Automobile

A Key Role inToyota Motor
Corporation’s
Global Production
Toyota Industries supports Toyota Motor
Corporation’s (TMC) global operations byassembling compact and midsize automobiles
as one of the Toyota Group’s vehicle assemblyarms. We also contribute to TMC’s operations
on a multiplicity of other fronts. These include
proactive participation in TMC’s new car
development, development and productionof diesel engines as well as power electronics
and other car electronics products, andmanufacture of stamping dies. In January 2007,
we established the Automotive Headquarters tofurther strengthen this segment as a pillar of ouroperations on par with the Materials Handling
Equipment Segment.

Automotive Headquarters

Vehicle Division
Machinery &Tools Sub-Div.

30

Toyota Industries Corporation

Annual Report 2007

Engine Division

Electronics
Division

Automobile

Vehicleupon a full model change in 2005, the third-generation RAV4 offers

Manufacturing TMC’s
Global Models

class environmental and safety performance. Of particular note, wean even roomier interior, superb driving performance and worldparticipated in TMC’s development project for the RAV4 for Europe
from the initial phase. Moreover, the RAV4 is also equipped with
Toyota Industries’ AD diesel engine produced at the Hekinan Plant.

Toyota Industries has compiled a stellar record ofachievement during the 40 years since commencing
vehicle production under consignment from TMC
in 1967. At present, Toyota Industries manufactures
two Toyota models, the Vitz (Yaris outside Japan) and
the RAV4 for overseas markets. Additionally, as an
automobile body manufacturer, we participate in thedevelopment of new Toyota vehicles, handling both
the development and design of automobile bodies.

A Vital Role in TMC’s Global Operations
Toyota Industries’ vehicle assembly operations have also been
lauded for maintaining the Toyota Group’s top-class quality, cost anddelivery (QCD) and capabilities in making quick production launches.
In fiscal 2007, we received the Superior Quality Performance Award
from TMC in recognition of our efficient, high-quality production
carried out under the Toyota Production System as well as for ourdaily improvement activities.
Annual global production of the Vitz (Yaris) tops more than
500,000 vehicles, more than one-third of which is produced by

Record-High Production of 350,000 Vehicles
Achieved

our Nagakusa Plant. Meanwhile, production of the RAV4 is carriedIn fiscal 2007, Toyota Industries achieved record-high production of

Plant is also supporting preparations for production at Toyota Motor

350,000 vehicles, which was supported by robust sales of the RAV4

Manufacturing Canada Inc., which is set to begin production of thein overseas markets.

RAV4 in 2008.

out at the Nagakusa Plant and TMC’s Tahara Plant. The Nagakusa

Since commencing vehicle assembly operations under

Determined to continue playing an important role in TMC’sconsignment from TMC in 1967, Toyota Industries has produced

global business, Toyota Industries intends to maintain its top-levelsuch vehicles as the Starlet, Sprinter Carib and Corolla (van). In 1999,

QCD, while expanding its business domains that contribute to

we started manufacturing the Vitz as the successor model of the

TMC, including further increasing its role in the development of newStarlet. The first-generation Vitz (Yaris) sparked an expansion in thevehicles and supporting the quick start-up of new vehicle production

compact car market in Japan and subsequently attained a positionat overseas production plants.

as a global-standard compact car. Undergoing a full model change in2005, the second-generation
Vitz (Yaris) integrates the

Vehicle Production

most-advanced safety and(Thousand units)
400

Topicsenvironmental technologies,
earning extensive acclaim

Toyota Industries Receives Superior
Quality Performance Award

300

worldwide as a compact car of
the highest quality. Sales of the

In February 2007, the Vehicle Division and Machinery &Tools Sub-Division (stamping dies) received the Superior

200

Vitz (Yaris) were launched in the
United States in 2006.

Quality Performance Award from TMC. This marks theseventh time the Vehicle Division has earned this award in100

Toyota Industries
commenced production of the
RAV4 in 2001. Relaunched

the past 10 years and the eighth time for the Machinery &Tools Sub-Division over the same period.

0
FY

03

04

05

06

07

Vehicles

Vitz

RAV4

(Yaris outside Japan)

Toyota Industries Corporation

Annual Report 200731

Focus on Business2007 we constructed a new testing center to bolster our diesel

Engineengine development capabilities. Looking ahead, we will seek tomake further contributions through actively participating in the joint

Sharp Increase in
Diesel Engine Sales Lift
Production to RecordHighdevelopment and production of diesel engines with TMC.
Toyota Industries also engages in broad-ranging production ofengines for industrial equipment, including engines for lift trucks thatoffer high power output and excellent environmental performance,
as well as engines for other materials handling equipment and gas
engine-driven heat pumps. Toyota Industries’ engines represent thesource of competitiveness of its lift trucks, which have secured theNo. 1 global market share.

Toyota Industries’ Engine Business manufactures
diesel and gasoline engines. In addition to
manufacturing engines for vehicles underconsignment from TMC, Toyota Industries
manufactures engines for lift trucks and othermaterials handling equipment. As another important
activity, we engage in the joint development of newdiesel engines with TMC.

Favorable Results for New Diesel Engineswith Outstanding Environmental Performance

At our production bases worldwide, we also manufacture abroad assortment of engine parts that include engine blocks, heads,
camshafts and crankshafts.

New Testing centerIn fiscal 2007, Toyota Industries achieved record-high sales of
490,000 engines (unit sales to outside customers) on the back ofEuropean market and the Lexus IS as well as KD diesel engines forDeveloping Global Business throughDomestic and Overseas Collaboration

TMC’s Innovative International Multi-Purpose Vehicle (IMV).

Our engine production operations have garnered strong praise notincreased sales of AD diesel engines fitted in TMC’s RAV4 for the

Our new diesel engines, noted for their superb environmental

just for responding quickly to changes due to flexible production lines

performance, are particularly attracting attention. Toyota Industries

utilizing automatic guided vehicles but also for the ability to start up

manufactures AD diesel engines jointly developed with TMC, which

production in short time periods.

comply with Europe’s strict EURO 4 environmental regulations on

Following the 1994 establishment of Toyota Industry (Kunshan)

exhaust emissions. The advantages of diesel engines in comparison

Co., Ltd. (TIK), an engine foundry parts production company in China,

with gasoline engines lie in high fuel efficiency and low CO2

we have steadily strengthened our engine production capabilities

emissions—a key reason

overseas. At present, we operate production bases for engines anddiesel engines are in highEngine Productionengine parts at TIK and Toyota Industry Automotive Parts (Kunshan)

demand in Europe. In the(Thousand units)
500

Co., Ltd. (TIAP) in China, Kirloskar Toyoda Textile Machinery Private

North American market aswell, the number of pickup

Limited (KTTM) in India and Toyota Motor Industries Poland Sp.zo.o.
(TMIP) in Poland, allowing us to further contribute to TMC’s global

400

development.

trucks fitted with diesel
300

engines is expected to riseamid rapidly increasing energy

In Japan, the Hekinan Plant (engine assembly and parts
processing), together with the Kyowa Plant (engine parts processing)200

and Higashichita Plant (foundry parts, aluminum die casts, engine

prices.
Reflecting our firm

assembly and parts processing) function as mother plants for100

overseas production bases in providing support for plant start-ups

commitment to becoming
a top manufacturer ofdiesel engines within the
Toyota Group, in fiscal

32

Toyota Industries Corporation

0
FY

03

04

05

Gasoline engine
Diesel engine

Annual Report 200706

07

and operations. Through this global cooperation, we believe we areable to assure QCD at the highest levels and raise productivity ateach of our overseas plants.

Automobile

Worldwide Manufacturing Bases of Engine

TMIP
Manufacture of diesel engines for
TMC’s plants in the U.K. and Turkey

TIK

Hekinan Plant

Kyowa Plant

Manufacture of foundry parts forJapan and manufacturing bases in
Poland and India

Manufacture of diesel andgasoline engines

Manufacture of engine
parts

KTTM

TIAP

Higashichita Plant

Manufacture of transmission parts for
TKAP

Manufacture of foundry parts forengines

Manufacture of foundry parts
Manufacture and supply of diesel engines for IMV Project

Engines

2AD diesel engine

2KD diesel engine

2AZ-FE gasoline engine

1FZ-FE gasoline engine(Displacement: 2.2 liters, usedin the Avensis, RAV4, Corolla
Verso and Lexus IS)(Displacement: 2.5 liters, usedin the Hilux Vigo)(Displacement: 2.4 liters, used in
the Estima)(Displacement: 4.5 liters, used in
the Land Cruiser)

4Y gasoline engine

Cylinder block for
AD diesel engine

Cylinder head for
AD diesel engine(Displacement: 2.2 liters, used in
lift trucks)

Toyota Industries Corporation

Annual Report 2007

33

Focus on Business

Car Electronics
Stamping Dies

voltage direct current (DC) of the main battery to a lower voltage torecharge the auxiliary battery and supply power for lights, wipers,
the horn and other in-car devices. We also develop and manufacturecompact, low-cost DC-DC converters for electric power steering

Manufacturing Key Parts
for Hybrid Vehicles andStamping Dies

systems for hybrid vehicles.

Utilizing power electronics circuit technologies
and electric drive system development capabilities
cultivated through its experience with electric lift
trucks, Toyota Industries develops and manufactureselectronic components and devices for automobiles,
including hybrid vehicles. Toyota Industries also
boasts an abundance of experience in manufacturinghigh-quality automotive stamping dies.

products through a serialization of existing products such as DC-

A wide selection of Toyota Industries’ products also includes
DC-AC inverters for cars with hybrid and conventional engines. The
inverter is capable of converting currents into the same voltage ashousehold electricity, thereby allowing the use of various household
electronic appliances.
In fiscal 2007, Toyota Industries began shipments of numerous
DC converters for the Camry Hybrid for North America and DC-DC
converters for electric power steering (EPS) for the Lexus LS.
Amid growing worldwide interest in environmental protection,
we expect that demand for hybrid vehicles will steadily increase. In
preparing to meet this demand, we are augmenting an advanced
development structure. This will enable us to develop not only
products for hybrid vehicles but also controllers for electric lift trucks,
power supply devices for hybrid lift trucks and others that will raise
the competitiveness of our materials handling equipment and textile
machinery. To expand our selection of automotive products, we areplanning to put more energy into the development of key components

34

Newly Developed DC-DC Converters for the
Toyota Camry Hybridin addition to the current lineup of auxiliary components such as

Fitted in TMC’s Prius, Toyota Industries’ DC-DC converters are key

mass production at a new plant in order to handle expansion of thedevices for hybrid vehicles. These converters down-convert the high-hybrid vehicle market.

Toyota Industries Corporation

Annual Report 2007

converters. We are also pressing forward with the preparations forAutomobile

Major Car Electronics Products

DC-DC converter for EPS

DC-DC converter for EPS

Fitted in the Harrier Hybrid (RX 400h)

Lexus LS

DC-AC inverter

DC-DC converter

Fitted in the Tacoma

Camry Hybrid

New products
DC-DC converters
for EPS

DC-DC converter

DC-DC converters

Fitted in the Prius

DC-AC inverters
FY

2003

2004

2005

2006

2007

2008

2011

Car Electronics

DC-DC converter for the Prius

DC-DC converter for electric
power steering for the Harrier
Hybrid (RX 400h)

DC-DC converter for
Camry Hybrid

DC-AC inverter for
the Tacoma (400W)

Manufacture and Quick Delivery of HighQuality Automotive Stamping Diesin recognition of the high quality of our stamping dies as well as our

Toyota Industries undertakes the design and manufacture of

We are also making important progress in bolstering our

automotive stamping dies mainly for TMC vehicles (Toyota andoverseas operations. Toyota Industries established Lio Fung Tool &Lexus brands) as well as stamping dies for our own lift trucks andDie (Kunshan) Co., Ltd. (LFTD, in which Toyota Industries has a 35%

other materials handling equipment. Combining advanced skills withstake) in Kunshan, China, as a joint venture with Taiwan-based Lioholeading-edge simulation technologies, Toyota Industries has earned

Machine Works, Ltd. LFTD produces stamping dies for TMC vehicles

high marks from customers for quick delivery times and top quality.

manufactured in China as well as for Toyota Industries lift trucks.

ongoing daily improvement activities.

In fiscal 2007, we won TMC’s Superior Quality Performance Award

Trim die for engine hood

Draw die for rear door

Toyota Industries Corporation

Annual Report 200735

Focus on Business

Logistics

Supporting the
Optimization of
Overall Logistics
Toyota Industries is engaged in proposing
optimal overall logistics solutions from
customers’ perspectives. We handle customers’
logistics by combining our extensive businessexperience in lift trucks, automated storage andretrieval systems and other materials handlingequipment with our production and logistics
know-how, as well as the Toyota Production
System cultivated in pursuit of the most efficientmethods of manufacturing. In so doing, we
propose so-called market-in logistics that supply
only “what is needed, when it is needed, and in
the amount needed!”36

Toyota Industries Corporation

Annual Report 2007

Logistics

Making Optimal Logistics Proposals as aGroup of Specialists

by discontinuing its policy of handling logistics internally. With the

In fiscal 2007, net sales of the Logistics Segment increased sharply

Industries and Nissen will work together in promoting mail-orderby 37% to ¥89.4 billion.

logistics reforms by optimizing the flow of the entire logistics process

Toyota Industries’ Logistics Business is centered on the threeacquisition of this stake in Mail & e Business Logistics, Toyota

from procurement to delivery to customers.

business pillars of planning, design and operation of distribution
parts. Planning, design and operation of distribution centers

Business Models Offering High Value-Added
Servicesare carried out mainly through the Advanced Logistics Division.

Toyota Industries regards logistics as a process that continues until aSpecifically, this business aims to reduce companies’ logistics costs

product passes the checkout counter at a retail store and is delivered

through Advanced Logistics Solutions Co., Ltd. (ALSO), a whollyto the customer. We are building proprietary business models

owned subsidiary, as well as through joint ventures with customers

that aim to optimize this overall flow, which involves not only theand logistics operators. Meanwhile, high value-added services aremanagement of the flow of “goods” but also the flow of “cash” andprovided through two subsidiaries, Asahi Security Co., Ltd. (Asahi

the flow of “information.”

centers, high value-added services and distribution of automotive

Security) and Wanbishi Archives Co., Ltd. (Wanbishi Archives),

As part of these efforts, Asahi Security, which became awhereas the Taikoh Transportation Group handles distribution ofsubsidiary in March 2005, offers cash management outsourcing

automotive parts.

services including cash collection and cash proceeds management

Since entering the logistics solutions field in 2002, we haveservices for the retail, services and transportation sectors. Wanbishi

achieved continuous growth and development. We intend to aim

Archives, in which we acquired a stake in January 2006, provides

for higher added value and efficiency. To this end, we are pursuinghighly advanced risk-related services that include storing andsynergies internally and externally by strengthening collaboration

managing important data for companies and government agencies

with the Materials Handling Equipment Business, which handles lift

and providing data backup services in the event of disasters. In May

trucks and automated storage and retrieval systems, as well as by2007, we raised our stake in Wanbishi Archives to 100%, making

sharing logistics businesses with our customers. In tandem, we areit a wholly owned subsidiary, as we aim to expand this business by

also focusing our efforts on reinforcing the earnings structure of thebenefiting from such trends as the implementation of the Japanese

Logistics Business through continuous improvements.

version of the U.S. Sarbanes-Oxley Act (J-SOX) and the Personal

In fiscal 2007, we acquired a 50.5% stake from Nissen Co., Ltd.
(Nissen), a leading mail-order company, in Nissen Logistics Service

Information Protection Act.
Using these wide-reaching service-related technologies asCo., Ltd., which became a subsidiary and was renamed Mail &a foundation, we are firmly poised to expand the scope of oure Business Logistics Service Co., Ltd. (Mail & e Business Logistics).

high value-added services that address the outsourcing needs ofThis move reflects Nissen’s decision to utilize Toyota Industries’

companies.

logistics solutions in an effort to improve this area of operations

Business Model for Wanbishi Archives
Customer

Wanbishi Archives

Storage center

Request for storage

FAX・TEL
Searched
documents

Request for retrieval
and/or delivery of
required documents

Receiving requests
Internet

Distribution by e-mailor fax (or via Website)

Retrieve
Digitization

Document boxes

Mail distribution

PC

Ledgers/
sales promotion
materials

High-volume digitization

DeliveryStorage/deliveryWorksite

Delivery

Data
Destruction andrecycling center
Data destruction

Transportation

Unnecessary
documents

Toyota Industries Corporation

Annual Report 200737

Focus on BusinessTextile Machinery

Sales of Air-Jet
Looms Surpass
10,000 Units to an
All-Time HighThe history of the Toyota Group began with theinvention of an automatic weaving machine by
Toyota Industries founder Sakichi Toyoda. Witha long history dating back to the origin of Toyota
Industries, the Textile Machinery Business, as anindustry leader, has built an integrated structurethat encompasses functions ranging fromdevelopment to sales. Our air-jet looms havemaintained the top global market share, while
our ring spinning frames, roving frames andother spinning machinery have garnered highacclaim from customers worldwide.

38

Toyota Industries Corporation

Annual Report 2007

Textile Machinery

Weaving Machinery

demand subsequently surged to over 20,000 units from aroundToyota Industries manufactures and sells two types of weaving

2002. This increase was driven by a confluence of several factors,

machinery: air-jet looms, which insert weft yarns using air, and water-

including improvements in productivity for our air-jet looms andjet looms, which use water for the same purpose. Our state-of-the-development of air-jet looms that enable the production of woven

art weaving machinery, excellent in basic performance requirements

fabrics previously difficult to produce, in addition to a shift in textile

for high speed and reliability, incorporates such advanced functions

production to China. Consequently, Toyota Industries supplied

as monitoring and remote setting via the Internet, earning high praiseroughly half of all global demand in fiscal 2007. In March 2007, wefrom customers around the world.

further expanded our product offerings when we initiated production

In fiscal 2007, sales of air-jet looms, our mainstay product,of a new water-jet loom. Rounding out our product lineup, we alsoreached a record-high 10,600 units, supported by a large increase

manufacture and sell such preparatory machinery for weaving as

in sales in China. Up until roughly five years ago, total worldwide

sizing machines for yarns.

demand for air-jet looms stood at around 10,000 units, but this

Weaving Machinery

JAT710 air-jet loom

LWT710 water-jet loom

Spinning Machinery

MackeeSizing machine for spun yarn

Filamaster
Sizing machine for filament yarn

also produce and sell combers and drawing frames.

The Spinning Machinery Business meets a broad range of customer

Overseas, Kirloskar Toyoda Textile Machinery Private Limited

needs by offering an extensive lineup of spinning machinery, including(KTTM), our subsidiary in India, manufactures ring spinning frames forhigh-speed ring spinning frames and roving frames, capable of boththe local market.

spinning high-quality yarns and providing superior productivity. We

Spinning Machinery

RX240NEW ring spinning frame

FL100 roving frame

DX8 drawing frame

VC5A comber

TopicsKTTM Marks its 10th Anniversary
In 2006, KTTM marked the 10th anniversary of its establishment in India. Founded
as a joint venture with India’s Kirloskar Group, KTTM began production and sales ofspinning frames in 1997. In 2004, KTTM commenced production of aluminum diecast components for manual transmissions for Toyota Motor Corporation’s Innovative
International Multi-Purpose Vehicle Project. KTTM further expanded its scope ofactivities in 2006 when it began engaging in after-service and sales of lift trucks in the
Bangalore District.

Toyota Industries Corporation

Annual Report 2007

39

Focus on BusinessElectronics

On the Cutting Edgeof Providing HighQuality Electronics
Products
Toyota Industries engages in the manufactureof semiconductor package substrates through
TIBC Corporation (TIBC)*1. We are also actively
involved in the manufacture of low-temperaturepolysilicon TFT-LCD panels at ST Liquid Crystal
Display Corp. (STLCD)*2 and ST Mobile DisplayCo., Ltd. (STMD)*3. Utilizing our expertise rooted
in the Toyota Production System—a sourceof Toyota Industries’ competitiveness—wequickly provide a stable supply of high-quality
electronics products.
*1
A joint venture with Ibiden Co., Ltd. (Ibiden)*2, *3 Joint ventures with Sony Corporation (Sony) accounted for as equity-method affiliates,with Toyota Industries holding a 50% stake in STLCD and a 20% stake in STMD.

40

Toyota Industries Corporation

Annual Report 2007

Electronics

Plastic Package Substrates forHigh-Performance Semiconductors andSubstrates for IC Cards

performance products by achieving synergies derived from thequality management and production technology capabilities of Toyota
Industries and Ibiden, an industry leader in this field.
TIBC’s semiconductor plastic package substrates are sold

TIBC manufactures leading-edge semiconductor package
substrates to enable more compact, lighter weight PCs, mobile

through Ibiden to the world’s premier semiconductor manufacturers

phones and other electronic devices. Specifically, TIBC currently

and semiconductor-packaging companies for such applications as

manufactures plastic package substrates, including flip chip (FC)

PCs and mobile phones. At the same time, TIBC’s FPC substrates

package substrates and wire bonding package substrates, for high-are also marketed through Ibiden to SIM card and smart card

performance semiconductors, as well as flexible printed circuit (FPC)

suppliers mainly in Europe and China for integration into credit cards

substrates for IC cards. TIBC is able to supply high-quality, high-and telephone cards.

TIBC

Wire bonding
package substrate

Flip chippackage substrate

Low-Temperature Polysilicon TFT-LCD Panels
for Mobile Devices
STLCD and STMD manufacture small- and medium-sized low-

Flexible printed circuit
package substratecompanies are used in the mobile devices of Sony and other hightech device manufacturers worldwide.
Since commencing mass production in 1999, STLCD has

temperature polysilicon (poly-Si) TFT-LCD panels, primarily for suchachieved cumulative production of 200 million panels as of August

applications as video and digital still cameras, and mobile phones.

2006. STMD, our second manufacturing base after STLCD, began

These TFT-LCD panels are noted for such outstanding basic features

mass production of panels on schedule in April 2006.

as high-quality, high-resolution images and low energy consumption.
In addition, Sony is promoting its system-on-glass technology that
integrates the display device and its driver circuits onto a single glass
substrate (panel). This technology enables highly reliable, lightweightand miniaturized display modules, and in turn contributes to bothcompanies’ proactive efforts to develop display devices for compact,
lightweight mobile products.
Through synergies that fully utilize Sony’s technologicalcapabilities and Toyota Industries’ production technologies, STLCD
and STMD have built optimal production systems for creating
globally competitive products. The products manufactured by these

ST Liquid Crystal Display Corp.

STLCD

Low-temperature polysilicon TFT-LCDs

Toyota Industries Corporation

Annual Report 200741

Research and Development
Company-Wide Strategic Research and Division-Based ProductDevelopment and Improvements Form the Two Pillars of R&D
Guided by its founding spirit, “Be ahead of the times through endless creativity, inquisitiveness andpursuit of improvement,” Toyota Industries undertakes Company-wide strategic R&D aimed not justat improving short-term business results but also at achieving sustainable growth over the long term.
At the same time, each business division actively carries out R&D activities that are important for
ensuring that the Toyota Industries Group maintains its competitive advantage.
Toyota Industries’ R&D can be broadly divided into the two categories
of product development and improvements performed independently
within each business division in addition to R&D undertaken mainlyby the Research & Development Center. The latter is carried out fromthe perspective of Company-wide management strategy.
Toyota Industries operates in an extensive range of businessspheres, and each of the Company’s divisions has its own
distinctive technological strengths, core technologies and market
characteristics. Accordingly, to efficiently develop products tailoredto customer needs, it is imperative that technical development
sections of each division play a leading role in product improvement,
technology development and applied research. As such, thesetechnical development sections maintain their own experimentequipment and research laboratories and proactively undertake
technology development activities in cooperation with manufacturing
divisions based on product development plans.
The Research & Development Center within the Corporate
Center (corporate headquarters) engages in R&D in technology
fields such as materials fields that serve as a common foundation
for all divisions in addition to undertaking R&D in new domains. The
Research & Development Center is also working to further strengthen
and enhance the efficiency of our Company-wide R&D structure,promote lateral transfers of technologies among different divisions
and investigate new technology development themes. Concurrently,
the center deploys the accumulated technologies and know-how ofeach business division in a continuous search for and creation of new
products and services that will form the pillars of our future business.
Depending on specific research themes, the center also promotes
joint research in collaboration with Toyota Central Research &Development Laboratories, Inc., an R&D facility of the Toyota Group
that engages in basic research, as well as with universities and otheroutside R&D institutions.
Our “e-Lab” IT
research laboratory
within the Information
System Development
Department
undertakes ITrelated R&D. This
laboratory is making
progress in researchon digital simulation

42

Toyota Industries Corporation

Annual Report 2007

technologies for shortening product development times and reducing
lead-times from development to production and shipping. Moreover,“e-Lab” is building an infrastructure and systems for allowing eachbusiness division to undertake joint development with overseas
bases.
Toyota Industries actively promotes in-house manufacturingof essential processing and assembly equipment. The Machinery& Tools Sub-Division develops and manufactures specialized
manufacturing equipment for the Compressor Division, Engine
Division, Toyota Material Handling Company and affiliates.
Manufacturing such equipment internally yields a host of advantages,
which include speedy development and manufacturing throughcooperation among development and design departments as well as
the rapid launch of production lines. Toyota Industries’ outstanding
manufacturing equipment also contributes to the Toyota Industries
Group’s manufacturing, serving as a source of competitiveness foreach business and protecting against any outflow of proprietaryproduction know-how. We are also utilizing our strength in creating
manufacturing equipment for the quick start-up of operations atoverseas production bases while striving to nurture personnel
with expertise in such equipment, as we aim to further raise theproduction technology capabilities of the Toyota Industries Group.
In fiscal 2007, R&D expenses increased 10.9% from the previous
fiscal year to ¥34.5 billion. By segment, R&D expenses amounted to¥16.2 billion in the Automobile Segment, ¥15.7 billion in the Materials
Handling Equipment Segment, ¥0.8 billion in the Textile Machinery
Segment and ¥1.6 billion in the Others Segment.

NC machine tool
for aluminum parts

Circuit board inspection systemwith high-resolution line scancameraNew Products and Technologies Developed by Toyota Industries in Fiscal 2007

Materials Handling Equipment
accounting for approximately 50% of theentire Japanese lift truck market, andare used by a wide variety of customers
primarily in the transport and warehouseindustries. To address the needs of thismarket, Toyota Industries developed the
new GENEO to attain an even higher levelof performance and functionality in theareas of safety, environmental featuresand ease of operation.

New GENEO
In September 2006, Toyota Industries
commenced domestic sales of 1- to 3.5-ton
internal combustion lift trucks (sold as the
GENEO in Japan, 8-Series in North America
and International, and the Toyota Tonero inEurope) after a full model change. The 1- to
3.5-ton class internal combustion lift trucks
represent the largest market for lift trucks,

Development of Hybrid Systems for Lift Trucks
Heightened global environmental awareness coupled with persistently high crude oil
prices has spurred a rapidly rising market need for improved fuel economy. Paralleling thisdevelopment, there are high hopes that hybrid technologies will enable significant increases
in fuel economy for internal combustion lift trucks.
Utilizing the Toyota Group’s hybrid technologies and components, Toyota Industries isdeveloping highly efficient hybrid systems for lift trucks that offer superior reliability, durability
and cost performance. Our new hybrid concept model
maintains the same performance as conventional internal
combustion lift trucks while significantly raising fuel economy
and achieving a balance between high environmental
performance and cost efficiency. We will continue
pursuing the development of new technologies for thecommercialization of hybrid lift trucks.

Textile Machinery

Automobile (Car Electronics)

LWT710 Water-Jet Loom

Development of Air-Cooled DC-DC Converter

Toyota Industries launched the new LWT710 water-jet loom,
which features a newly developed nozzle pump and a shortstroke for achieving high versatility and weaving high-quality
textiles. Moreover, the LWT710 shares a common frame withthe world’s top-selling JAT710 air-jet loom, thereby enablinghigh-speed, low-vibration weaving of all types of textiles. The
use of a common frame also permits a significant increase in
the use of common spare parts.

Toyota Industries has developed an air-cooled DC-DC converter
for hybrid vehicles. This converter is an essential component
for down-converting the high voltage of the main battery—thedrive source for hybrid vehicles—to the lower voltage neededfor operating lights, audio systems and other in-car devices.
Incorporating Toyota Industries’ independently developed IC,
the new DC-DC converter enables a more than 20% reductionin the number of components. Unlike the conventional watercooling method, an air-cooled converter affords greater
freedom for positioning within thevehicle. Our new DC-DC converters
are fitted on the Camry
Hybrid that Toyota
Motor Corporation
began selling in North
America in May 2006.

Toyota Industries Corporation

Annual Report 200743

Corporate Governance
Maintaining and Enhancing EfficientManagement and the Fairness andTransparency of Corporate Activities
We believe that enhancing the long-term stability of corporate
value and maintaining society’s confidence in Toyota Industries are
extremely important management issues. Taking the enrichmentof society through business activities as a basic premise, we also
consider it vital to build good relationships with stakeholders ranging
from shareholders and customers to business partners, local
communities and employees.
With this in mind, we are working to maintain and enhance
management efficiency and the fairness and transparency ofcompany activities by strengthening corporate governance. In
addition to building a corporate governance system that can respondquickly and flexibly to changes in the business environment, we areworking to reinforce management supervision and to provide timely
and accurate information disclosure.

Towards Speedy and Efficient Management
Toyota Industries is striving to increase the efficiency and speed ofmanagement as well as facilitate appropriate decision-making. We
hold Board of Directors meetings every month to discuss and resolve
important management matters and monitor business operations.
A Management Committee has also been established to discuss
important matters such as corporate vision, management policies,
medium-term business strategies and major investments. This
committee consists of directors above the executive vice president
level, and when the president considers it necessary, other relevant
directors also attend meetings.
We have adopted a divisional organization system and have
set up a Business Operation Committee to enable the president tooversee business operations through general managers (directors) ofeach division.
At the Management Council, directors and managing officers
convene to share reports on the monthly status of operations of eachbusiness.
These committees and meetings facilitate precise decisionmaking, ensuring fair and efficient management.

Strengthening Auditing through the Board ofAuditors and Corporate Auditor’s Office
Toyota Industries has chosen to maintain a Corporate Auditor/Boardof Corporate Auditors system. The Board of Corporate Auditors
consists of five corporate auditors, three of whom are independent
auditors who bring an outsider’s viewpoint and an auditing
perspective combined with professional experiences and careers to
our internal monitoring function. Meetings of the Board of Corporate
Auditors are held once a month to discuss and make decisions onimportant matters, such as auditing policy and reporting.
The Corporate Auditor’s Office has been established to reinforce
the auditing of duties carried out by directors. It is staffed by five

44

Toyota Industries Corporation

Annual Report 2007

dedicated personnel who work directly for the corporate auditors andare not under the authority of our directors.
The corporate auditors also cooperate with the Audit Office,which is in charge of internal audits, and independent auditors,
receiving reports as appropriate and, where necessary, conducting
additional surveys.

Thorough Implementation of Compliance via
Corporate Code of Conduct Committee
Toyota Industries perceives compliance as observing laws andregulations in addition to respecting local cultures and customs in amanner that is in tune with the changing times.
The Corporate Code of Conduct Committee plays a central
role in strengthening the Company’s systems and mechanisms,
stipulating conduct guidelines and making every effort to ensure that
all employees are informed through education and enlightenment
activities. This committee is in charge of controlling the Toyota
Industries Group’s overall corporate activities regarding complianceand crisis response. Chaired by the president, the committee
consists of directors, including the chairman and the president, as
well as managing officers and corporate auditors, and meets several
times a year. Confirming the status of any important incidents that
may have occurred along with the countermeasures and responses
adopted, the committee draws on these outcomes in deliberating on
the matters to be addressed in the coming fiscal year.
In conjunction with our overall efforts to further strengthen ourcompliance system, under the direction of the Corporate Code of
Conduct Committee, we designated a number of departments aslegal compliance departments to provide thorough guidance to otherdivisions and departments on respective legal compliance.
Toyota Industries also established the Compliance Subcommittee
and the Information Security Subcommittee. These subcommittees
are comprised of a chairman nominated from among directors andmembers of relevant divisions and departments, and meet eachmonth to consider concrete measures directed toward boosting
compliance based on individual action plans.
The Audit Office and designated legal compliance departments
cooperate in supervising compliance in individual divisions,departments and affiliates in Japan and overseas.

Appropriate and Timely Disclosure ofInformation
To enhance management transparency, Toyota Industries is working
to strengthen its accountability by publishing quarterly financial
statements and establishing an Investor Relations Office to provide
information to shareholders and investors. We have also set up an
Information Disclosure Committee to ensure the completeness,
appropriateness and timeliness of important information disclosed infinancial statements and other materials.

Corporate Governance Structure of Toyota Industries Corporation
Shareholders’ Meeting
Appointment/
Dismissal

ReportingAppointment/
Dismissal

Appointment/
Dismissal

Reporting
Cooperation

Board of Corporate Auditors

Independent Auditors

5 auditors(including 3 external auditors)
Monitoring

Board of Directors

Monitoring

Monitoring

Reporting

16 directors(including 1 external director)

Corporate Auditor’s OfficeAppointment/
Monitoring

ReportingAccounting
audit

Discussing/
ReportingPresident
Directives
Directives

Management
Committee(Deliberates onimportant matters frommanagement’s
perspective)

Management
CouncilBusiness Operation
Committee(Reports on executionof business operations)(Follows up on executionof business operations)

Directives

Directives

Directives

ReportingCommittees*
Directives

Discussing/Reporting

Reporting

Reporting

Reporting

Audit OfficeInternal audits

Reporting

ReportingDirectors/Managing Officers
Business Divisions/In-House Company/Departments

Members of the Respective Committees and Meeting Frequency• Board of Directors: 16 directors (including 1 external director)
participate in monthly meetings.
• Management Committee: Meetings are held whenever importantmatters arise, and are attended by the chairman, the president, directors
above the executive vice president level and other relevant directors andmanaging officers, as specified by the president and according to thematters in question.
• Management Council: Directors and managing officers participate inmonthly meetings.
• Business Operation Committee: The president, executive vicepresidents and divisional general managers participate in two regularmeetings before the interim and annual closing of accounts whileirregular meetings are also held as required.

* Major Committees

Corporate Code of Conduct Committee
Environmental Committee
Export Transaction Control Committee
Stock Option Committee

Toyota Industries Corporation

Annual Report 200745

Environmental and Social Contribution Efforts
Environmental Activities

Achieving Compatibility between
Environmental Protection and Economic
Development
The Toyota Industries Group is aiming to achieve compatibility
between both environmental protection and economic development,
and to that end, all of our employees are working together to tackle
the challenging task of environmental management. By means of our
products and services, the Toyota Industries Group is undertaking
daily business activities to contribute to the world’s economic
development and the creation of vibrant and healthy communities.
Further, we believe that in every aspect of our business operations
it is essential to constantly give environmental considerations to theoverall product lifecycle.

Launch of Fourth Environmental Action Plan
In the Third Environmental Action Plan, which ran from fiscal 2002
through fiscal 2006, we concentrated our efforts on the introductionof equipment that promoted environmental protection such ascogeneration systems and the use of more efficient sources ofenergy at plants. In achieving the targets of the five-year plan, we

Address environmental concerns by working in harmony
with both regional communities and global society.

also succeeded in reducing resource consumption and energy costs.
Under our current Medium-Term Management Plan, we aretargeting consolidated net sales of more than ¥2,000 billion forfiscal year 2011. Net sales in fiscal 2006 totaled ¥1,505.9 billion.
Accordingly, reaching the Medium-Term Management Plan target
means increasing net sales by 30% over five years. This means that
if environmental protection measures remain at the current levelas our sales increase, the environmental load would also increase
proportionately. Taking this into account, we have formulated the
Fourth Environmental Action Plan, which contains even more
stringent targets than previous plans and primarily focuses on theconcept of balancing environmental protection with economic
activities.

Ensuring Environmentally Sound Products
and Production
The Toyota Industries Group is undertaking initiatives to reduce
environmental load throughout the product lifecycle.
Coinciding with the Fourth Environmental Action Plan started infiscal 2007, we revised our environmental management system. A
Production Environment Subcommittee was set up as part of theEnvironmental Committee, with the goal of enhancing comprehensive

Key Points of the Fourth Environmental Action Plan
Curbing Global Warming

Strengthen the development and sale of environmentallyfriendly products to promote environmental action at the
product use stage of the product lifecycle, when the impact
on the environment is greatest.

Harmony

Reducing Greenhouse Gas Emissions

Actively promote countermeasures to global warming, themost serious of the world’s environmental issues.
Improving Resource Productivity

Promote the reduction of resource wastage, keeping in
mind soaring raw materials costs caused by resource andenergy problems.

Sustainable
Management

Reducing Environmental Risk Factors

Enhancement

Responsibility

Reduce environmental risks by enhancing managementof chemical substances and curtailing emissions of
substances of concern.
Global Environmental Management

Enhance the eco-efficiency of
all our business activities,
products, and services.

46

Toyota Industries Corporation

Fulfill our social responsibility
to participate in environmental
conservation.

Annual Report 2007

Keep in mind that, as production by Toyota Industries
Group companies increases, the Group’s overall impact
on the environment rises. Strengthen consolidated
environmental management, giving priority to curbing global
warming, increasing resource productivity and reducing
environmental risk factors.

environmental measures in the area of production. We determinedthat the new subcommittee should aim to successfully combine
global environmental conservation and economic growth.
Moreover, in ensuring our products are as environmentallyfriendly as possible, Toyota Industries purchases components,
materials and equipment with minimal adverse environmental impact
from business partners who maintain a high level of environmental
consciousness. In order to comply with regulations regarding the useof substances of concern, such as the European Union’s end-of-life
vehicles directive (EU-ELV), we also require suspension or reductionof use as well as the management of usage of these substances
included in products or manufacturing processes based on our green
procurement guidelines.
By actively contributing to environmental protection in theareas of products and production, more customers will support our
products. We believe that the result will be less impact on the global
environment, and thus, contribute to the realization of a sustainable
society.
Please refer to our Social & Environmental Report for more details.

Environmental Management System Organizational
Framework
Changes to Company-Wide Organization
Environmental Committee

Product
Technology
Subcommittee(Now-defunct)
EnergySubcommittee

Resource
Utilization
Subcommittee

Pollution
Prevention
Subcommittee

integrated into

Social Contribution Activities

Committed to a Wide Range of Corporate
Citizenship Activities that Benefit Local
Communities
While achieving corporate development and longevity, Toyota
Industries strives to fulfill its role as a good corporate citizen so thatthe regions that provide a foundation for its corporate activities
and the life of its employees become more prosperous and more
comfortable to live in. Based on this perspective, we are committed
to a wide range of social contribution activities that benefit local
communities, mainly in the areas of social welfare facilities and traffic
safety activities, making donations to welfare events, community
programs for the education of young people, community and sports
events, environmental protection activities and providing company
facilities for use in various community activities.

Social Contribution Activity System
Toyota Industries and its affiliates worldwide are promotingsocial contribution activities at each location in accordance withlocal circumstances. As one example, the Heartful Group, a fulltime organization established within Toyota Industries’ General
Administration Department, drafts annual plans that aim to enhanceplanning and implementation of volunteer activities, communication
with local communities and in-house education and enlightenment
activities, among other initiatives.
In order to promote social contribution activities throughout the
Toyota Industries Group, including at our overseas affiliates, in fiscal
2006 Toyota Industries established the Regional Society Contribution
Subcommittee under the Corporate Code of Conduct Committee,
which is under the direct authority of our president. The Regional
Society Contribution Subcommittee is studying medium-term actions
the entire Toyota Industries Group can take to promote corporate
citizenship on a global scale while also considering key activities toenhance our corporate value.

(Newly created) Production Environment Subcommittee

Please refer to our Social & Environmental Report for more details.
Company-Wide Organization (From FY2007) •Determining corporate managerial direction
for important environmental issues
Environmental Committee
Chairman: Company president
Members: Chairman of Product Technology Subcommittee, chairman of Production
Environment Subcommittee, divisional general managers
Aims: Promote and integrate overall corporate environmental response

Product Technology Subcommittee
Chairman: Executive vice president
Members: General managers of eachdivision such as engineering dept., others
Aims: Promote reduction of environmental
impact and minimization of environmental
risk in company products

Production Environment Subcommittee
Chairman: Executive vice president
Members: General managers of eachdivision such as engineering dept., others
Aims: Comprehensively promote energy
saving and risk minimization in company
production processes

Each Division •Promote EMS based on Environmental Committee accounting decisions(http://www.toyota-industries.com/csr/library/)

Toyota Industries Corporation

Annual Report 2007

47

HistoryFoundation – 1980s
1926

1952

1974

Toyoda Automatic Loom Works, Ltd.
(now Toyota Industries Corporation)
established to manufacture andmarket automatic looms invented by
Sakichi Toyoda.

Automobile engine (S-type gasoline
engine) production starts.

6P compressor production starts.

1953
Kyowa Plant starts operations,producing engines and assembling
automobiles.

1955
Vehicle Division set up.

1956
Lift truck production starts.

Founder

1929

Sakichi Toyoda

Spinning frame production starts.

Sakichi Toyoda was born inShizuoka Prefecture, Japan, in

Automatic loom patent sold to PlattBrothers & Co., Ltd. of the U.K.

1867. He became an inventor

1933

while still in his teens andAutomobile Division set up.

devoted his life to the study anddevelopment of textile machinery.
Starting with a wooden

1934
A-type automobile engine completed.

handloom (weaving machine),1935

he subsequently pioneered a

Prototype of Model A1 passenger carcompleted.

new era in textile machinery withinventions that included Japan’s

P-type gasoline engine production
starts.

1960
Shovel loader production starts.
Car air-conditioning compressor(CC3A type, CC3B type) production
starts.

1963
Dump truck production starts.
Friction welder production starts.

1964
J-type diesel engine production
starts.

first power loom, the circular loom
and the Toyoda Type G automatic

1967

loom. Sakichi was awarded 84

Nagakusa Plant starts operations,producing small commercial vehicles.

patents and 35 utility models in

Publica (van) and Mini Ace(automobile) production starts.

his lifetime and is rememberedwith pride in Japan as one of the

Swash-plate compressor technology
licensed to Chrysler and Ford.
Compressor Division separates from
Textile Machinery Division.

1978
Starlet (automobile) production starts.
Aerial lift equipment production
starts.

1980
JA air-jet loom production starts.

1981
10P compressor production starts.

1982
Production starts on C-type diesel
engines for small passenger cars.
Hekinan Plant starts operations,producing automobile diesel engines.

1985
Engine Division separates from
Vehicle Division.
10PA compressor production starts.

1986
Company awarded
the Deming
Application Prize
for quality control
implementation.

Deming Application
Prize

Electric counterbalanced lift truck
production starts.

X300 series lift truck production
starts.

carry on the engineering spirit of

1968

1987

our illustrious founder.

Open-end spinning machine
production starts.

Sprinter Cielo (exported as the
Corolla Lift Back) production starts.

world’s greatest inventors. We
at Toyota Industries are proud toCompany unveils Model G1 truckat a new car-release exhibition in
Shibaura, Tokyo.

1937
Automobile Division separates andbecomes Toyota Motor Co., Ltd. (nowToyota Motor Corporation).

1940
Steel Production Division separates
and becomes Toyoda Steel Works,
Ltd. (now Aichi Steel Corporation).

1944
Obu Plant starts operations,producing castings.

48

1959

1977

1924

1949

Toyoda Type G automatic loom
invented by Sakichi Toyoda.

Company stock listed on Tokyo,
Osaka and Nagoya stock exchanges.

Toyota Industries Corporation

Annual Report 2007

1970
Takahama Plant starts operations,producing industrial vehicles.

1971
Corolla (van) production starts.

Electronics Sub-Division set up.

1988
Toyota Industrial Equipment Mfg.,
Inc. (TIEM) established in Columbus,
Indiana, in the U.S., as a joint venturewith Toyota Motor Corporation.

Divisional organization system
introduced (3 divisions: Textile
Machinery, Industrial Vehicle andVehicle).

RX100 ring spinning frame production
starts.

Toyoda-Sulzer Manufacturing Ltd.
established as a joint venture with
Sulzer Brothers, Ltd. of Switzerland
to produce projectile looms.

Michigan Automotive Compressor,
Inc. (MACI) established in Jackson,
Michigan, in the U.S., as a joint
venture with DENSO Corporation.

1989

1990s –2000s –

1990

1998

2002

Sprinter Carib (automobile;
exported as the Corolla Wagon)
production starts.

TD Deutsche Klimakompressor
GmbH (TDDK) established inGermany as a joint venture with
DENSO Corporation to produce car
air-conditioning compressors.

Advanced Logistics Solutions Co.,
Ltd. (ALSO) established to planoverall logistics operations andoperate distribution centers.

Company
receives 1990 PM
Excellent Plant
Award.

1992
Materials Handling System Division
set up.
Production starts on automatedstorage and retrieval systems.
JAT600 air-jet loom production
starts.

1993
RX200 ring spinning frame
production starts.

1994
X500 series internal combustion
counterbalanced lift truck
production starts.
Toyota Industry (Kunshan) Co.,
Ltd. (TIK) established in China asa joint venture with Toyota Tsusho
Corporation and Lioho MachineWorks, Ltd.
R500 reach truck production
starts.

1995
Toyota Industrial Equipment, S.A.
(TIESA) established in France as a
joint venture with Toyota Motor
Corporation and Manitou B.F.
7SB compressor production starts.
B500 electric counterbalanced lift
truck production starts.
Kirloskar Toyoda Textile Machinery
Private Limited (KTTM) establishedin India as a joint venture with the
Kirloskar Group.

1996
JAT610 air-jet loom production
starts.
RX240 ring spinning frame
production starts.

GENEO (7FG/D outside Japan)
internal combustion counterbalanced
lift trucks introduced.
TIBC Corporation (TIBC) established
as a joint venture with Ibiden Co., Ltd.
to produce semiconductor package
substrates.
10S compressor production starts.

1999
Vitz (Yaris outside Japan) production
starts.

Higashiura Plant starts operations,producing parts for car airconditioning compressors.

TD Automotive Compressor Kunshan,Co., Ltd. (TACK) established in
China as a joint venture with DENSO
Corporation and other entities
to produce car air-conditioning
compressors.
AD diesel engine production starts.

Toyota Motor Industries Poland
Sp.zo.o. (TMIP) established in Poland
as a joint venture with Toyota Motor
Corporation to produce diesel
engines.

2003
JAT710 air-jet loom production
starts.

KD diesel engine production starts.

Company takes over water-jet loom
business from Nissan Texsys Co.,Ltd.
1CD diesel engine production starts.
GENEO-B (7FB outside Japan)
electric counterbalanced lift trucks
introduced.

2000
LW600 series water-jet loom
production starts.
BT Industries AB of Sweden, a worldleading manufacturer of warehousetrucks, becomes a Toyota Industries
subsidiary.
2UZ gasoline engine production
starts.
Higashichita Plant starts operations,producing foundry parts.

2001
GENEO-R (7FBR outside Japan)
reach truck production starts.
Company takes over the Industrial
Equipment Sales Division of Toyota
Motor Corporation.
TOYOTA Material Handling Company
established as an in-house company.
RAV4 production starts.
Name changed to Toyota Industries
Corporation.

GENEO-E (7FBE outside Japan)
three-wheel electric counterbalanced
lift truck production starts.

New RAV4 production starts after afull model change.

Aichi Corporation, a manufacturer of
special-purpose vehicles, becomes
one of Toyota Industries’ subsidiaries.

2004
Toyota Industry Automotive
Parts (Kunshan) Co., Ltd. (TIAP)
established in China as a joint venturewith Toyota Tsusho Corporationand Lioho Machine Works, Ltd. to
produce foundry parts.

2006
New GENEO (8FG/D outside Japan)
internal combustion counterbalanced
lift truck production starts.

TD Automotive Compressor Georgia,
LLC (TACG) established in the U.S.
as a joint venture with DENSO
Corporation to produce car airconditioning compressors.

2005
Asahi Security Co., Ltd., which
engages in collection and delivery ofcash, management of sales proceeds
and electronic security service,
becomes a subsidiary of Toyota
Industries.

2007
LWT710 water-jet loom production
starts.

Vitz (Yaris outside Japan) production
starts after a full model change.

1997
Compressor production at Kariya
Plant reaches 100 million units.

Wanbishi Archives Co., Ltd. becomesa subsidiary of Toyota Industries.

6SE compressor production starts.
ST Liquid Crystal Display Corp.
(STLCD) established as a joint
venture with Sony Corporation.

Toyota Industries Corporation

Annual Report 200749

Corporate Data

(As of March 31, 2007)

Major Plants (Parent Company)
Start of
Operations

Main Products

Kariya Plant
Obu Plant
Kyowa Plant
Nagakusa Plant
Takahama Plant
Hekinan Plant
Higashichita Plant
Higashiura Plant

Textile machinery, car air-conditioning compressors
Parts for car air-conditioning compressors
Electronic equipment, automotive press dies, production facilities, engine parts
Automobiles
Lift trucks, materials handling systems
Engines for automobiles and industrial equipment
Engines for automobiles, foundry parts, engine parts
Parts for car air-conditioning compressors

1927
1944
1953
1967
1970
1982
2001
2002

Major Consolidated Subsidiaries% ofVoting Rights

Company Name

Location of Head Office

Aichi Corporation
TIBC Corporation
Mail & e Business Logistics Service Co., Ltd.
Asahi Security Co., Ltd.
TOYOTA L&F Tokyo Co., Ltd.
Altex Co., Ltd.
Sun River Co., Ltd.
Izumi Machine Mfg. Co., Ltd.
TOYOTA L&F Keiji Co., Ltd.
Tokyu Co., Ltd.
Advanced Logistics Solutions Co., Ltd.
Toyoda High System, Incorporated
Nishina Industrial Co., Ltd.
ALTRAN Corporation
KTL Co., Ltd.
TF Logistics Co., Ltd.
Tokaiseiki Co., Ltd.
Taikoh Transportation Co., Ltd.
SKE Inc.
SK Maintenance Corporation
Unica Co., Ltd.
Iwama Loom Works, Ltd.
Nagao Kogyo Co., Ltd.
TOYOTA L&F Shizuoka Co., Ltd.
Hara Corporation
Sun Valley Inc.
Mizuho Industry Co., Ltd.
Sun Staff, Inc.
ALT Logistics Co., Ltd.
Shine’s Inc.
Toyota Industries Well Support Corporation

Saitama
Aichi
Mie
Tokyo
Tokyo
Shizuoka
Osaka
Aichi
Kyoto
Aichi
Aichi
Aichi
Nagano
Aichi
Tokyo
Tokyo
Shizuoka
Aichi
Aichi
Aichi
Aichi
Aichi
Aichi
Shizuoka
Gifu
Aichi
Aichi
Aichi
Aichi
Aichi
Aichi

51.1%
60.0%
50.5%
100.0%
100.0%
75.0%
100.0%
68.8%
75.0%
63.3%
100.0%
90.0%
82.0%
60.0%
50.5%
51.0%
92.1%
51.4%
100.0%
70.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
93.8%
100.0%
60.0%
100.0%
100.0%

Toyota Material Handling Europe SA/NV
Toyota Material Handling Belgium SA/NV
Toyota Truck Danmark A/S
Toyota Truckudlejning Danmark A/SBrussels
Temse
Vejle
Vejle

100.0%
100.0%
100.0%
100.0%

Japan

EuropeBelgium
Denmark

50

Toyota Industries Corporation

Annual Report 2007

France
Germany

Italy
NorwaySwedenSwitzerland
U.K.

% of
Voting Rights

Company Name

Location of Head Office

Toyota Industrial Equipment Europe, S.A.R.L.
Toyota Industrial Equipment, S.A.
TD Deutsche Klimakompressor GmbH
Toyota Gabelstapler Deutschland GmbH
Toyota Gabelstapler Stuttgart GmbH
Toyota Carrelli Elevatori Italia S.r.l.
CESAB Carrelli Elevatori S.p.A.
Toyota Truck Norge AS
Toyota Truckutleie Norge AS
Toyota Industries Sweden AB
BT Industries AB
Toyota Industries Finance International AB
BT Products AB
Toyota Textile Machinery Europe AG
Toyota Industrial Equipment (UK) Limited
Toyota Industrial Equipment (Northern) Limited

Ancenis, France/Brussels, Belgium
AncenisStraßgräbchen
Duisburg
Stuttgart
Bologna
Bologna
Trondheim
Trondheim
MjölbyMjölbyMjölbyMjölbyZurichCastleford, West Yorkshire
Castleford, West Yorkshire

100.0%
60.0%
65.0%
100.0%
70.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%

Michigan Automotive Compressor, Inc.
The Raymond Corporation
Toyota Industries North America, Inc.
TD Automotive Compressor Georgia, LLC
Toyota Industrial Equipment Mfg., Inc.
Toyota Material Handling USA, Inc.
ACTIS Manufacturing Ltd., LLC
Toyoda Textile Machinery Inc.
Toyota-Lift of Los Angeles, Inc.
Toyota Industries Personnel Service of America, Inc.

Parma, Michigan
Greene, New YorkElk Grove, Illinois
Jefferson, Georgia
Columbus, Indiana
Irvine, California
Grapevine, Texas
Charlotte, North Carolina
Santa Fe Springs, California
Elk Grove, Illinois

60.0%
100.0%
100.0%
65.0%
100.0%
100.0%
60.0%
100.0%
100.0%
100.0%

Toyota Industries Mercosur Ltda.
Toyota Maquinas Texteis Brasil Ltda.

São PauloSão Paulo

100.0%
100.0%

Toyota Industries Corporation Australia Pty Limited
Toyota Industry Automotive Parts (Kunshan) Co., Ltd.
Toyota Industry (Kunshan) Co., Ltd.
TD Automotive Compressor Kunshan Co., Ltd.
Toyota Industries Trading & Logistics (China) Co., Ltd.
Toyota Material Handling (Shanghai) Co., Ltd.
Kirloskar Toyoda Textile Machinery Private Limited

SydneyKunshan, Jiangsu
Kunshan, Jiangsu
Kunshan, Jiangsu
Shanghai
ShanghaiBangalore, Karnataka

100.0%
60.0%
70.0%
59.8%
100.0%
70.0%
95.1%

Company Name

Location of Head Office% ofVoting Rights

ST Liquid Crystal Display Corp.
Wanbishi Archives Co., Ltd.
Fuji Logistics Co., Ltd.
ST Mobile Display Corp.

Aichi
Tokyo
Tokyo
Shiga

50.0%
43.1%
26.8%
20.0%

Toyota Motor Industries Poland Sp.zo.o.

Jelcz-Laskowice

40.0%

North America
U.S.A.

South America
BrazilAsia and Oceania
Australia
China

India

Major Affiliates Accounted for by the Equity Method
Japan

EuropePolandToyota Industries Corporation

Annual Report 200751

Directors, Corporate Auditors and Managing Officers(As of June 21, 2007)

Board of Directors

ChairmanPresident

Tadashi Ishikawa*

Tetsuro Toyoda*

Executive Vice President

Executive Vice President

Executive Vice President

Executive Vice President

Norio Sato*

Yoshikatsu Mizuno*

Tatsuo Matsuura*

Akira Imura** Representative Director

Senior Managing Directors

Honorary Chairman

Shigetaka Yoshida
Masafumi Kato
Yasuharu Toyoda
Yutaka Murodono

Kazunori Yoshida
Kosaku Yamada
Toshiyuki Sekimori
Kimpei Mitsuya

Yoshitoshi Toyoda
Director

Tatsuro Toyoda

Corporate Auditors
Standing Corporate Auditors

Corporate Auditors

Hiroshi Okuda
Fumio Kawaguchi
Katsuaki Watanabe

Shigetaka Mitomo
Masanori Ito

Managing Officers
Hirotaka Morishita
Shinya Furukawa
Hironori Ito
Akira Onishi
Per Zaunders
Eishi Furuta
Tadayoshi Baba
Takashi Okubo

Hiroya Kono
Kenji Takenaka
Satoshi Kaseda
Hiroshi Sakai
Hirofumi Tsuji
Yukio Yamakita
Takaki Ogawa
Kazue Sasaki

52

Toyota Industries Corporation

Annual Report 2007

Norio Sasaki
Toshifumi Ogawa
Hayato Ikeda
Toshifumi Onishi
Kouhei Nozaki
Osamu Miura
Taku Yamamoto
Yukihisa Tsuchimoto

Financial Section

54 Consolidated Eleven-Year Summary
56 Management’s Discussion and Analysis ofFinancial Condition and Results of Operations
66 Consolidated Balance Sheets
68 Consolidated Statements of Income
69 Consolidated Statements of Changes in Net Assets
70 Consolidated Statements of Cash Flows
71 Notes to Consolidated Financial Statements
92 Reports of Independent Auditors

Toyota Industries Corporation

Annual Report 200753

Consolidated Eleven-Year Summary
Toyota Industries Corporation
Years ended March 31
The figures in this table are unaudited.
Millions of yen

2007

2006

2005

2004

¥1,878,398¥1,505,955¥1,241,538¥1,164,378

Operating income
Ordinary income

89,95464,04053,12052,631

108,484

80,63570,91258,970For The YearNet sales

59,46847,07743,35733,623¥ 791,913¥ 620,946¥ 539,002¥ 497,356

Net income
Overseas sales
Depreciation and amortization

106,060

87,28770,21365,351

Capital expenditures

166,505

158,835

136,506

89,508

Research and development expenses

34,54831,16630,051

29,562Per share of common stock (yen, U.S. dollars):
Net income per share — basic
Net income per share — diluted¥

189.88¥146.16¥135.09¥108.04

189.66146.02135.03101.97

5,612.11

5,044.45

3,504.80

3,199.69

50.00

38.00

32.00

24.00

Total assets¥3,585,857¥3,245,341¥2,326,824¥2,011,995

Total net assets per share
Cash dividends per share
At Year-End
Total net assets

1,810,483

1,611,227

1,115,747

1,016,763

Common stock

80,46280,46280,46280,462

Number of shares outstanding (excluding treasury stock)

312,075

319,320

318,237

317,666¥ 177,467¥ 131,784¥ 100,095(164,446)(205,013)(128,230)(92,667)(thousands)
Cash FlowsNet cash provided by operating activities
Net cash used in investing activities¥

92,406

Net cash provided by (used in) financing activities(19,749)

85,17250,020(56,015)

Cash and cash equivalents at end of year

108,569

112,596

100,535

77,212Return on equity (ROE) (%)

3.5

3.5

4.1

3.8

Return on assets (ROA) (%)

1.7

1.7

2.0

1.8

Return on sales (ROS) (%)

3.2

3.1

3.5

2.9

Debt/equity ratio (%)

28.9

29.4

34.4

31.6

IndicesInterest coverage (times)
EBITDA (millions of yen, thousands of U.S. dollars)
Number of employees at year-end

7.4

7.8

7.7

7.4

¥ 191,007¥ 150,674¥ 128,381¥ 113,676

36,09632,97730,99027,431

Notes: 1. U.S. dollar amounts have been translated from yen, for convenience only, at the rate of ¥118.05 = US$1, the approximate exchange rate on March 31, 2007.
2. Main changes in accounting standards and methods during the above periods are as follows. These changes have not been applied to the financial statements presented prior to each year
retroactively.
(1) Effective beginning the year ended March 31, 2007, the new accounting standards for directors’ bonus, presentation of net assets in the balance sheet, share-based payment and businesscombinations have been applied. Details are described in Notes to Consolidated Financial Statements.
(2) Effective beginning the year ended March 31, 2005, the new accounting standards for impairment on fixed assets have been applied. Details are described in Notes to Consolidated Financial
Statements.
(3) Effective beginning the year ended March 31, 2003, the new accounting standards for net income per share have been applied.
(4) Effective beginning the year ended March 31, 2001, the new accounting standards for retirement benefits, financial instrument and foreign currency transactions have been applied.
(5) Effective beginning the year ended March 31, 2000, Toyota Industries Corporation (the “Company”) has used annual average exchange rate instead of the year-end rate in order to present
the operating results more precisely as significance of overseas consolidated subsidiaries had been increasing and their revenue and expenses were incurred throughout the fiscal years. The
Company has also adopted tax effect accounting due to the amendment of the accounting standards for income taxes.

54

Toyota Industries Corporation

Annual Report 2007

Thousands of
U.S. dollars

Millions of yen

2003

2002

2001

2000

1999

1998

1997

2007

¥1,069,218¥ 980,163¥ 767,382¥625,772¥558,875¥572,698¥530,851$15,911,886

52,477

46,33047,304

28,867

24,81332,72932,675762,00251,37547,86544,52627,162

23,172

33,201

31,157918,971

21,93327,311

22,637

13,686

10,391

20,491

17,930503,756¥ 451,593¥ 396,470¥ 298,794¥191,992¥178,737¥150,417¥116,738$ 6,708,292

59,15455,17346,45442,751

34,37927,95828,042

898,433

87,55988,319127,273

44,74660,46862,00635,4071,410,466

29,70529,98526,19524,061

23,231

23,112

19,691

292,657

¥

70.19

¥

87.28

¥

75.90

¥

48.32

¥

36.30

¥

72.33

¥

63.55

$

1.61

62.90

78.26

67.77

43.18

32.62

63.48

55.20

1.61

2,522.52

2,809.54

3,036.77

1,116.62

1,063.05

1,056.81

996.18

47.54

22.00

19.00

17.00

16.00

16.00

16.00

16.00

0.42

¥1,650,391¥1,770,401¥1,869,642¥685,914¥617,070¥593,003¥556,291$30,375,755

738,867

878,812951,298

316,293

301,158

304,097

281,154

15,336,578

68,04668,02168,01840,17840,17840,13331,457

681,598

292,777

312,796313,260

283,260

283,296287,752

282,233

78,412¥ 68,057¥ 44,133¥ 50,952¥ 51,327$ 1,503,328(106,710)(155,870)(67,186)(96,222)(26,897)(74,968)(1,393,021)¥ 103,183¥(95,120)¥

57,775

1,225

94,472

27,49924,368(12,918)

69,081(167,295)

136,929

71,11995,296

77,332

49,95574,30362,322919,691

2.7

3.0

3.6

4.4

3.4

7.0

6.5

1.3

1.5

1.8

2.1

1.7

3.6

3.6

2.1

2.8

2.9

2.2

1.9

3.6

3.4

55.6

35.9

30.7

60.5

51.6

37.5

46.0

6.7
¥

81,07895,47225,0305.8¥

97,54023,056

¥

9.1

14.5

16.4

17.6

13.0

79,921¥ 64,681¥ 51,033¥ 55,212¥ 55,548

21,11813,132

12,797

11,23910,738$ 1,618,020

Deferred tax assets have been newly recognized in current assets, and investments and other assets. Deferred tax liabilities have been recognized in current and long-term liabilities.
(6) Effective beginning the year ended March 31, 1999, the Company has presented consolidated financial statements as follows: In the consolidated statements of income, enterprise taxes,
which had been included in selling, general and administrative expenses up to and including the previous year, have been included in income taxes.
Amortization of goodwill, which had been classified as a deductible item from income before income taxes until the previous year, has been included in selling, general and administrative
expenses. Equity in earnings/losses of affiliates, which had been added to or deducted from income before income taxes until the previous year, has been included in non-operating income
or expenses.
3. Net income per share, ROE and ROA are computed based on the average number of shares, total net assets and total assets, respectively, for each year.
4. Debt/equity ratio = Interest-bearing debt / Total net assets
5. Interest coverage = (Operating income + Interest and dividends income) / Interest expenses
6. EBITDA = Income before income taxes + Interest expenses - Interest and dividends income + Depreciation and amortization

Toyota Industries Corporation

Annual Report 200755

Management’s Discussion and Analysis ofFinancial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on information
known to management as of June 2007.
This section contains projections and forward-looking statements that involve risks, uncertainties and assumptions. You
should be aware that certain risks and uncertainties could cause the actual results of Toyota Industries Corporation and its
consolidated subsidiaries to differ materially from any projections or forward-looking statements. These risks and uncertainties
include, but are not limited to, those listed under “Risk Information” and elsewhere in this annual report.
The fiscal year ended March 31, 2007 is referred to as fiscal 2007 and other fiscal years are referred to in a corresponding
manner. All references to the “Company” herein are to Toyota Industries Corporation and references to “Toyota Industries” herein
are to the Company and its 162 consolidated subsidiaries.

Result of Operations

efforts to strengthen its corporate structure by attempting to ensure

Operating Performanceof appealing new products, aggressive sales promotions and the

In fiscal 2007, the Japanese economy was on a steady recovery

execution of a Group-wide program to reduce costs.

customer trust through its dedication to quality, the development

track. Private-sector capital investment increased on the back of

As a result, total consolidated net sales of Toyota Industries

strong corporate earnings while consumer spending was on a mild

amounted to ¥1,878.3 billion, an increase of ¥372.4 billion (24.7%)

upswing as employment conditions improved. The overall economic

over fiscal 2006. (For a breakdown of operating results by businessoutlook continued to remain strong overseas, with U.S. and European

segment, refer to Operating Performance Highlights by Businesseconomies expanding and ongoing brisk growth in China.

Segment.)

In this operating environment, Toyota Industries undertook

At the profit level, ordinary income amounted to ¥108.4 billion,

Operating Income andOperating Income Ratio

Net Sales(¥ Billion)(¥ Billion)

(%)

2,000

90

18

80

16

70

14

60

12

50

10

1,500

1,000

500

0
FY

40

8

30

6

20

4

10

2

0

03

04

05

06

07

0

FY

03

04

05

06

Operating income (left)
Operating income ratio (right)

56

Toyota Industries Corporation

Annual Report 200707

Ordinary Income andOrdinary Income Ratio

Net Sales ofAutomobile Segment

Operating Income ofAutomobile Segment(¥ Billion)(%)(¥ Billion)(¥ Billion)

120

12

1,000

50

100

10

800

40

80

8
600

30

60

6
400

20

40

4

20

2

200

10

0
FY

0

03

04

05

06

07

0
FY 03

0

04 05 06 07

FY

03 04 05 06 07

Ordinary income (left)
Ordinary income ratio (right)

an increase of ¥27.8 billion (34.5%) over fiscal 2006. Despite theAutomobile Segment

effects of a steep rise in raw materials costs, as well as increases in

Sales increased in the automobile industry as a whole. Although

depreciation and personnel expenses, this increase was achieved

domestic sales were sluggish during fiscal 2007, higher sales in the

due largely to higher sales, cost-reduction efforts throughout the

Asian and Latin American markets gave rise to an overall increase inGroup and an increase in non-operating income. Net income

overseas sales.

amounted to ¥59.4 billion, an increase of ¥12.4 billion (26.3%) overfiscal 2006.

Net sales of the Automobile Segment of Toyota Industries totaled¥904.8 billion, an increase of ¥158.1 billion (21.2%) over fiscal 2006.

Cost of Sales and Selling,
General and Administrative Expenses
Cost of sales for fiscal 2007 increased ¥310.3 billion (24.3%) overfiscal 2006 to ¥1,586.7 billion. This increase reflected increases in
depreciation expenses, raw materials prices and personnel expenses
in addition to an increase in net sales.
Selling, general and administrative expenses increased ¥36.2

Car Air-Conditioning
Compressor Unit Sales(Million Units)
25billion (21.9%) to ¥201.6 billion, due primarily to increases inpersonnel expenses.

20

Operating Income

15

Operating income for fiscal 2007 increased ¥25.9 billion (40.5%)
over fiscal 2006 to ¥89.9 billion, attributable mainly to an increase in10

sales in Japan and overseas as well as Group-wide cost-reduction
activities.

Operating Performance Highlights
by Business Segment
Following are the operating results by business segment. Net sales
for each segment do not include intersegment transactions.

5

0
FY

03

04

05

06

07

Japan
North America
EuropeAsia and Oceania

Toyota Industries Corporation

Annual Report 2007

57

Net Sales ofMaterials Handling
Equipment Segment

Operating Income ofMaterials Handling
Equipment Segment

Net Sales of
Logistics Segment

Operating Income of
Logistics Segment(¥ Billion)(¥ Billion)(¥ Billion)(¥ Billion)

800

50

100

3

40

80

30

60

20

40

600

2
400
1
200
10

0
FY 03

20

0

04 05 06 07

FY 03

0

0

04 05 06 07

FY 03

04 05 06 07

FY 03

04 05 06 07

The logistics-related business, which was included in the Others Segment, hadbeen separated and declared independently as the Logistics Segment startingfrom fiscal 2006.

Within this segment, net sales of the Vehicle Business totaled

and undertook proactive sales promotion activities, which contributed¥470.2 billion, an increase of ¥98.2 billion (26.4%) over fiscal 2006.

to strong sales for TOYOTA and BT brands. Following a full model

The RAV4 recorded solid sales in the United States and Europe, whilechange, Toyota Industries commenced sales of its mainstay model

the Vitz (Yaris overseas) posted strong sales outside Japan.

1- to 3.5-ton internal combustion lift trucks (sold as the GENEO

Net sales of the Engine Business totaled ¥167.4 billion, an

in Japan, the 8-Series in North America and International, and theincrease of ¥35.1 billion (26.5%) over fiscal 2006, due mainly to

Toyota Tonero in Europe) in September 2006 and January 2007 inincreases in sales of KD diesel engines for Toyota Motor Corporation’s

Japan and the United States, respectively. The new lift truck provides(TMC) Innovative International Multi-Purpose Vehicle (IMV) Series aseven greater product value, featuring higher levels of performance inwell as AD diesel engines fitted in the RAV4 for Europe.

terms of safety, environmental attributes and ease of operation. Aichi

Net sales of the Car Air-Conditioning Compressor BusinessCorporation, which engages in the manufacture and sales of aerial

totaled ¥235.4 billion, an increase of ¥19.5 billion (9.0%) over fiscal

work platforms, posted a significant increase in sales bolstered by

2006. Although sales decreased in the domestic market, sales

replacement demand from the electricity and telecommunications

increased in North America, Europe and China.

industries.

Materials Handling Equipment Segment

Logistics Segment

In the materials handling equipment industry as a whole, sales

The overall operating environment was severe in the logistics industry

remained strong in the Japanese market. Overseas markets

as the volume of cargo transport continued to decline in the domestic

continued to expand in conjunction with economic expansion in themarket accompanied by an increase in costs resulting from higher

United States and Europe as well as the growth of BRICs (Brazil,

crude oil prices.

Russia, India and China) economies.
Net sales of the Materials Handling Equipment Segment totaled

Net sales of the Logistics Segment totaled ¥89.4 billion, an
increase of ¥24.3 billion (37.3%) over fiscal 2006, due largely to¥767.2 billion, an increase of ¥172.0 billion (28.9%) over fiscal 2006.

the solid performance of the logistics solutions and transportation

As a result of a change in the fiscal year-end of the BT Industries

businesses as well as an increase in the transport volume ofGroup, net sales of the Materials Handling Equipment Segmentautomotive parts.

included sales of the BT Industries Group for the three-month period

58

from January to March 2006 amounting to ¥64.7 billion. During fiscal

Textile Machinery Segment

2007, Toyota Industries continued to strengthen its sales network

In the textile machinery industry as a whole, the mainstay Chinese

Toyota Industries Corporation

Annual Report 2007

Net Sales of
Textile Machinery
Segment

Operating Income (Loss)of Textile Machinery
Segment(¥ Billion)(¥ Billion)
360

Net Sales of
Others Segment

Operating Income of
Others Segment(Including Elimination ofIntersegment Transactions)(¥ Billion)(¥ Billion)

80

7
6

50

2

60

5

40
1

4
40

30

3

0
20

2

20
(1)

10

1
(2)

0
FY 03

04 05 06 07

FY 03

0

04 05 06 07

FY

0

03 04 05 06 07

FY

03 04 05 06 07

market remained strong on the back of robust capital investment

year-end of the BT Industries Group comprising Toyota Industries

supported by rapid growth.

subsidiaries. Conversely, operating income decreased ¥0.8 billion

Net sales of the Textile Machinery Segment totaled ¥58.4(11.7%) to ¥5.9 billion, mainly as a result of an increase in pre-billion, an increase of ¥8.7 billion (17.3%) from fiscal 2006. In fiscal

production expenses at lift truck manufacturing subsidiaries.

2007, sales of more than 10,000 air-jet looms, primarily to China,
represented a notable achievement for the first time in 69 years for

Europeweaving machinery. Strong sales of spinning machinery in India also

Net sales increased ¥95.8 billion (44.3%) over fiscal 2006 to ¥312.0

contributed to the remarkable performance of the segment.

billion, while operating income totaled ¥11.2 billion, up ¥6.7 billion(148.3%). These increases were due mainly to an increase in unit

Others Segment

sales of lift trucks and a change in the fiscal year-end of the BT

Net sales of the Others Segment totaled ¥58.3 billion, an increase ofIndustries Group.

¥9.4 billion (19.2%) from fiscal 2006.

OthersSales by Geographical Segment

Net sales totaled ¥46.8 billion, an increase of ¥12.6 billion (37.0%),

Below are Toyota Industries’ operating results by geographicalwhereas operating income rose ¥1.7 billion (109.6%) to ¥3.1 billion.

segment. Net sales for each geographical segment do not include
intersegment transactions.

Non-Operating Income and Expenses
Non-operating income increased ¥7.0 billion (16.0%) to ¥50.8 billionJapanin fiscal 2007, owing primarily to an increase in dividends income

Net sales increased ¥222.8 billion (22.1%) over fiscal 2006 tofrom TMC.

¥1,232.1 billion, while operating income totaled ¥68.9 billion, up¥16.2 billion (30.7%). These increases were due mainly to a rise in

Non-operating expenses totaled ¥32.3 billion, an increase of ¥5.1
billion (18.7%), due mainly to an increase in interest expenses.

unit sales of vehicles and engines.

Income before Income Taxes
North America

Income before income taxes amounted to ¥108.3 billion, up ¥27.7

Net sales increased ¥41.2 billion (16.7%) to ¥287.3 billion, due mainly

billion (34.4%), attributable primarily to an increase of ¥27.8 billion in

to an increase in unit sales of lift trucks and a change in the fiscal

ordinary income.

Toyota Industries Corporation

Annual Report 2007

59

Net Income per ShareTotal Assets, Total Net Assets
and Total Net Assets Ratio(¥)(¥ Billion)

(%)

200

4,000

80

3,500

70

3,000

60

2,500

50

2,000

40

1,500

30

1,000

20

500

10

180
160
140
120
100
80
60
40
20
0
FY

0

03

04

05

06

07

Basic
Diluted

FY

0

03

04

05

06

07

Total assets (left)
Total net assets (left)
Total net assets ratio (right)

Income Taxes

and securities, Toyota Industries maintained a commercial paper

Income taxes increased ¥13.2 billion (46.7%) to ¥41.5 billion, due

issuance capacity of ¥100.0 billion as of March 31, 2007.

largely to an increase in income taxes of the Company and the Aichi
Group.

Toyota Industries continues to maintain its solid financial
condition. Through the use of such current assets as cash andcash equivalents and securities, as well as free cash flows andMinority Interest in Consolidated Subsidiaries

funds procured from financial institutions, Toyota Industries believes

Minority interests in consolidated subsidiaries amounted to ¥7.3

that it will be able to provide sufficient funds for the working capitalbillion, up ¥2.1 billion (40.8%), as a result of strong performance bynecessary to expand existing businesses and develop new projects,

subsidiaries.

as well as for future investments.
Regarding fund management, the Company undertakes

Net Income

integrated fund management of its subsidiaries in Japan, while Toyota

Net income totaled ¥59.4 billion, an increase of ¥12.4 billion (26.3%)

Industries North America, Inc. (TINA) and Toyota Industries Financeover fiscal 2006. Net income per share was ¥189.88, compared with

International AB (TIFI) centrally manage the funds of subsidiaries in¥146.16 in fiscal 2006. Diluted net income per share increased from

North America and Europe, respectively.

¥146.02 to ¥189.66.

Through close cooperation among the Company, TINA and
TIFI, we strive for efficient, unified fund management on a global
consolidated basis.

Liquidity and Capital Resources
Toyota Industries’ financial policy is to ensure sufficient financing
and liquidity for its business activities and to maintain strong balance
sheets. Currently, funds for capital investments and other long-term

Cash flows from operating activities amounted to ¥177.4 billion incapital needs are provided from retained earnings and long-term

fiscal 2007, due mainly to income before income taxes in an amountdebt, and working capital needs are met through short-term loans.

of ¥108.3 billion. Net cash provided by operating activities increased

Long-term debt financing is carried out mainly through issuance ofby ¥45.7 billion from ¥131.7 billion in fiscal 2006. Cash flows from

corporate bonds and loans from financial institutions.

investing activities resulted in a decrease in cash of ¥164.4 billion

In addition to current assets such as cash and cash equivalents

60

Cash Flows

Toyota Industries Corporation

Annual Report 2007

in fiscal 2007, attributable primarily to payments for purchases ofInvestment in Property,
Plant and Equipment

Cash Flows(¥ Billion)(¥ Billion)
200

160

150

140

100

120

50

100

0
80
(50)
60
(100)
40

(150)

20

(200)
(250)

0
FY

03

04

05

06

07

Net cash provided by operating activities
Net cash used in investing activities
Net cash provided by (used in) financing activities

FY

03

04

05

06

07

Automobile
Materials Handling Equipment
Logistics
Textile Machinery
Othersproperty, plant and equipment amounting to ¥155.5 billion. Net cash

The primary breakdown comprised ¥8.8 billion for the Company,

used in investing activities decreased by ¥40.6 billion from ¥205.0¥20.4 billion for the BT Industries Group, ¥4.2 billion for Toyota

billion in fiscal 2006. Cash flows from financing activities resulted

Industrial Equipment Mfg., Inc. and ¥2.2 billion for the Aichi Group.

in a decrease in cash of ¥19.7 billion in fiscal 2007, due mainly to

Investment in property, plant and equipment in the Logistics

payments for repurchase of treasury stock in an amount of ¥35.5

Segment totaled ¥6.2 billion, including ¥13.0 million for the Company

billion. Net cash provided by financing activities decreased by ¥104.8

and ¥4.7 billion for Taikoh Transportation Co., Ltd.

billion from ¥85.1 billion in fiscal 2006.
After translation adjustments, cash and cash equivalents as ofMarch 31, 2007 stood at ¥108.5 billion, a decrease of ¥4.0 billion
from fiscal 2006.

The Textile Machinery Segment made an investment in property,
plant and equipment in the total amount of ¥1.0 billion, including ¥0.7
billion for the Company.
Necessary funds were provided by a portion of bonds as well asinternal funds and bank loans.

Investment in Property, Plant and Equipment
During fiscal 2007, Toyota Industries made a total investment of¥158.6 billion in property, plant and equipment (including ¥29.6 billion
in vehicles and materials handling equipment for lease) in order toStrategies and Outlook

launch new products, streamline and upgrade production equipment,

Outlook for Results for Fiscal 2008

and augment R&D facilities.

In fiscal 2008, ending March 31, 2008, despite an anticipated

In the Automobile Segment, investment in property, plant andslowdown in the overall growth rate, expansion of the Japaneseequipment totaled ¥57.1 billion. A primary breakdown of this amounteconomy is expected to continue. Uncertainties persist, however,included ¥36.9 billion for the Company, ¥5.8 billion for TD Automotive

regarding the direction of the U.S. economy and a sustained increase

Compressor Georgia, LLC, ¥4.3 billion for Tokyu Co., Ltd., ¥2.0 billion

in crude oil prices, precluding optimism.

for Toyota Industry Automotive Parts (Kunshan) Co., Ltd., ¥1.5 billion

For fiscal 2008, Toyota Industries forecasts consolidated net

for Tokaiseiki Co., Ltd., ¥1.5 billion for TD Deutsche Klimakompressor

sales of ¥1,950.0 billion, ordinary income of ¥115.0 billion, operating

GmbH, ¥1.2 billion for Iwama Loom Works, Ltd. and ¥1.0 billion forincome of ¥95.0 billion and net income of ¥63.0 billion. We are

Izumi Machine Mfg. Co., Ltd.

determined to place utmost emphasis on product quality and develop

The Materials Handling Equipment Segment made an investmentin property, plant and equipment in the total amount of ¥56.0 billion.

and market leading-edge products that anticipate customer needs.
We will make further concerted efforts to engage in sales and service

Toyota Industries Corporation

Annual Report 200761

activities and undertake cost-reduction activities.
Our projections are based on an exchange rate of ¥115.0 =US$1.

Principal Customers
Toyota Industries’ automobile and engine products are sold primarily
to TMC. In fiscal 2007, net sales to TMC accounted for 35.5% ofconsolidated net sales. Therefore, TMC’s vehicle sales could have an
impact on Toyota Industries’ business results. As of March 31, 2007,

Dividend Policy

TMC held 24.8% of the Company’s voting rights.

The Company regards the benefits of shareholders as one of its most

Product Development Capabilities

important management policies. Based on this stance, we will strive

Based on the concept of “developing appealing new products,”

to strengthen Toyota Industries’ corporate constitution, promote

Toyota Industries proactively develops new products by utilizing its

proactive business development and raise its corporate value.

leading-edge technologies, as it strives to anticipate increasingly

The Company’s dividend policy is to meet the expectations ofsophisticated and diversifying needs of the market and ensure theshareholders while giving full consideration to business performance,

satisfaction of its customers. R&D activities are focused mainly on

capital demand, the dividend payout ratio on a consolidated basis

developing and upgrading products in current business fields andand other factors. Toyota Industries’ Ordinary General Meeting of

peripheral sectors. Toyota Industries expects that revenues derived

Shareholders, held on June 21, 2007, approved a year-end cashfrom these fields will continue to account for a significant portion ofdividend of ¥28.0 per share. Including the interim cash dividend of

total revenues and anticipates that future growth will be contingent¥22.0 per share, cash dividends for the year totaled ¥50.0 per share,on the development and sales of new products in these fields. Toyota

an increase of ¥12.0 per share over fiscal 2006.

Industries believes that it can continue to develop appealing new

The dividend payout ratio was 38.9%. On a consolidated basis, it
was 26.3%.

products. However, Toyota Industries may not be able to forecast
market needs and develop and introduce appealing new products

Toyota Industries will use retained earnings to improve thein a timely manner. This could result in lower future growth andcompetitiveness of its products, augment production capacity inhave an adverse impact on Toyota Industries’ financial condition

Japan and overseas, as well as expand into new fields of businessand business results. Such a situation could result from risks thatand strengthen its corporate constitution in securing future profits

include no assurance Toyota Industries can allocate sufficient future

for its shareholders. It will also use retained earnings to repurchasefunds necessary for the development of appealing new products;

treasury stock.

no assurance that product sales will be successful, as forecasts of

The Company’s Articles of Incorporation stipulate that it may pay

products supported by the market may not always be accurate; andinterim cash dividends as prescribed in Article 454-5 of the Corporate

no assurance that newly developed products and technologies will

Law, as well as repurchase treasury stock through market dealings

always be protected as intellectual property.

as prescribed in Article 459-1 of the Corporate Law. Discretion to
pay cash dividends is determined by the Board of Directors and theIntellectual Property Rights

Ordinary General Meeting of Shareholders.

In undertaking its business activities, Toyota Industries has acquired
numerous intellectual property rights, including those acquired
overseas, such as patents related to its products, product designs

Risk Informationand manufacturing methods. However, not all patents submitted will

The following represent risks that could have a material impact onrejected by patent authorities or invalidated by third parties. Also,

Toyota Industries’ financial condition, business results and sharea third party could circumvent a patent of Toyota Industries andprices. The risks mentioned in this annual report represent only aintroduce a competing product into the market. Moreover, Toyota

portion of the risks that could have an impact on Toyota Industries’

Industries’ products utilize a wide range of technologies. Therefore,

financial condition and business results, and do not necessarily coverToyota Industries could become a party subject to litigation involving

all possible risks. There is also a possibility that Toyota Industries

the intellectual property rights of a third party.

necessarily be registered as rights, and these patents could thus be

could be affected in the future by risks currently unknown or notconsidered noteworthy or significant.

Product Defects
Guided by the basic philosophy of “offering products and services

62

Toyota Industries Corporation

Annual Report 2007

that are clean, safe and of high quality,” Toyota Industries makes its

Accordingly, any expenses necessary for continuous strict adherence

utmost efforts to enhance quality. However, Toyota Industries cannot

to these environmental regulations could result in increased businessguarantee all its products will be defect-free and that product recalls

costs and have an adverse impact on Toyota Industries’ financial

will not be made in the future. Toyota Industries is insured for productcondition and business results.

liability indemnity. However, Toyota Industries cannot guaranteethat this insurance will sufficiently cover final indemnity amounts

Alliances with Other Companies

incurred. Product defects that could lead to large-scale recalls

Aiming to expand its businesses, Toyota Industries engages in joint

and product liability indemnities could result in large cost burdens

activities with other companies through alliances and joint ventures.

and have a significant negative impact on the evaluation of Toyota

However, a wildly fluctuating market trend or a disagreement between

Industries. It could also have an adverse effect on Toyota Industries’

Toyota Industries and its partners, owing to business, financial or

financial condition and business results due to a decrease in sales,

other reasons, could prevent Toyota Industries from deriving thedeterioration of profitability and decrease in share prices of Toyota

intended benefits of its alliances.

Industries.

Exchange Rate Fluctuations
Price Competition

Toyota Industries’ businesses encompass the production and sales

Toyota Industries faces extremely harsh competition in each of theof products and the provision of services worldwide. Generally, theindustries in which it conducts business, including its Automobile

strengthening of the yen against other currencies (especially against

and Materials Handling Equipment businesses, which are the core

the U.S. dollar and the euro, which account for a significant portion ofof Toyota Industries’ earnings foundation. Toyota Industries believes

Toyota Industries’ sales) has an adverse impact on Toyota Industries’

it offers high value-added products that are unrivalled in terms ofbusiness, while a weakening of the yen has a favorable impact. An

technology, quality and cost. Amid an environment characterized

increase in the value of currencies in countries or regions whereby intensifying price competition, however, Toyota Industries may

Toyota Industries carries out production could lead to an increase in

be unable to maintain or increase market share against low-cost

local production, procurement and distribution costs. Such an increase

competitors or to maintain profitability. This could have an adversein costs could reduce Toyota Industries’ price competitiveness.

impact on Toyota Industries’ financial condition and business results.

Additionally, because export sales of several businesses aredenominated mainly in yen, exchange rate fluctuations could have an

Reliance on Suppliers of Raw Materials andComponents

adverse impact on Toyota Industries’ financial condition and businessresults due to a change in market prices.

Toyota Industries’ products rely on various raw materials andcomponents from suppliers outside the Toyota Industries Group.

Share Price Fluctuations

Toyota Industries has concluded basic business contracts with these

Toyota Industries holds marketable securities, and therefore bears

external suppliers and assumes it can carry out stable transactions

the risk of price fluctuation of these shares. Based on fair market

for raw materials and components. However, Toyota Industries

value of these shares at the end of the fiscal year under review,has no assurances against future shortages of raw materials andToyota Industries had unrealized gains. However, unrealized gains oncomponents, which arise from a global shortage due to tight supply

marketable securities could worsen depending on future share priceor an unforeseen accident involving a supplier. Such shortages could

movements. Additionally, a fall in share prices could reduce the value

have a negative effect on Toyota Industries’ product production andof pension assets, leading to an increase in the pension shortfall.

cause an increase in costs, which could have an adverse impact on
Toyota Industries’ financial condition and business results.

Effects of Disasters, Power Blackouts andOther Incidents

Environmental Regulations

Toyota Industries carries out regular checks and inspections of its

In view of its social responsibilities as a company, Toyota Industries

production facilities to minimize the effect of production breakdown.

strives to reduce any burden on the environment resulting from

However, there is no assurance Toyota Industries can completely

its production processes, as well as strictly adheres to applicableprevent or lessen the impact of man-made or natural disasters,

environmental laws and regulations. However, various environmental

including malfunctions of production facilities, fires at production

regulations could also be revised and strengthened in the future.

facilities and power blackouts. For example, the majority of Toyota

Toyota Industries Corporation

Annual Report 200763

Industries’ domestic production facilities and most of its businessfor doubtful accounts involves judgments made in accordance

partners are situated in the Chubu region. Therefore, a majorwith the nature of the situation, and this allowance represents anearthquake such as the Tokai Earthquake, or an incident that affects

essential and crucial estimate—including future estimates of cash

other operations, could delay or stop production or shipment

flow amounts and timing—that could change significantly. Basedactivities. Such prolonged delays and stoppages could have an

on currently available information, Toyota Industries’ management

adverse impact on Toyota Industries’ financial condition and businessbelieves its present allowance for doubtful accounts is sufficient.

results.

However, the need to significantly increase allowance for doubtful
accounts in the future could have an adverse impact on Toyota

Latent Risks Associated with
International Activities

Industries’ business results.

Toyota Industries manufactures and sells products and provides

Allowance for Retirement Benefits

services in various countries. Such unforeseen factors as social

Calculations differ for retirement benefits, retirement benefit

chaos, including political disruptions, terrorism and wars, as well as

expenses and liabilities after employee retirement, as well aschanges in economic conditions, could have an adverse impact on

benefits for employees on leave of absence because different

Toyota Industries’ financial condition and business results.

assumptions are used at the time of calculation. Assumptions
include such factors as discount rates, amount of benefits, interest

Retirement Benefit Liabilities

expenses, expected rates of return on pension assets and mortality

Toyota Industries’ employee retirement benefit expenses andrates. The difference in amounts between these assumptions

liabilities are calculated based on expected rates of return on

and actual results is calculated cumulatively and amortized overpension assets as well as assumptions upon making actuarial

future accounting periods, and thus becomes an expense andcalculations that incorporate discount rates and other factors.

is recognized as a liability in future accounting periods. Toyota

Therefore, differences between actual results and assumptions

Industries believes its assumptions are reasonable. However,as well as changes in the assumptions could have a significant

differences between actual results or changes in the assumptions

impact on recognized expenses and calculated liabilities in future

could have an impact on retirement benefits and retirement benefit

accounting periods.

expenses and liabilities after employee retirement.

Significant Accounting Policies andEstimates,
Toyota Industries Relationship to Toyota
Motor Corporation

Toyota Industries’ financial statements are prepared in conformity

Due to historical reasons, Toyota Industries maintains closewith accounting principles and practices generally accepted inrelationships with TMC and Toyota Group companies in terms ofJapan. In preparing financial statements, management must makecapital and business dealings.

estimates, judgments and assumptions that affect reported amountsof assets and liabilities at fiscal year-end as well as revenues

Historical Backgroundand expenses during each fiscal year. Among Toyota Industries’

In 1933, Kiichiro Toyoda, the eldest son of founder Sakichi Toyoda

significant accounting policies, the following categories require aand then Managing Director of Toyota Industries (then Toyoda

considerable degree of judgment and estimation and are highly

Automatic Loom Works, Ltd.), established the Automobile Divisioncomplex.

within the Company based on his resolve to manufacture Japanesemade automobiles. In 1937, the Automobile Division was spun off

Allowance for Doubtful Accounts

and became an independent company, Toyota Motor Co., Ltd. (theTo prepare for the risk of receivables becoming uncollectible, Toyota

present Toyota Motor Corporation).

Industries estimates its allowance for doubtful accounts by utilizing64

the percentage of historical experiences in credit losses for ordinary

Capital Relationshipreceivables and individually examining the feasibility of collection for

In light of this historical background, Toyota Industries and TMC

receivables that seem to be uncollectible. Evaluating the allowance

have maintained a close capital relationship. As of March 31, 2007,

Toyota Industries Corporation

Annual Report 2007

,Toyota Industries held 5.5% (200,195 thousand shares) of TMC s
total shares issued. Likewise, as of the same date, TMC held 24.8%
of Toyota Industries, total voting rights. Toyota Industries is a TMC
affiliate accounted for by the equity method.

Business RelationshipToyota Industries assembles certain cars and produces automobile
engines under consignment from TMC. Additionally, we sell a portionof our other components and products directly or indirectly to otherToyota Group companies. In fiscal 2007, our net sales to TMC
accounted for 35.5% of our consolidated net sales.

Contributions to the Toyota GroupAs a member of the Toyota Group, Toyota Industries aims tocontribute to strengthening the competitiveness of TMC and otherToyota Group companies in such areas as quality, cost, delivery andtechnologies. Toyota Industries is confident that raising the Toyota
Group,s competitiveness will lead to increases in our sales to andprofits from the Toyota Group, thereby contributing to raising Toyota
Industries, corporate value.

Toyota Industries Corporation

Annual Report 200765

Consolidated Balance Sheets
Toyota Industries Corporation
As of March 31, 2007 and 2006
Thousands of
U.S. dollars (Note 1)

Millions of yen

ASSETS

2007

2006

2007

¥ 108,569¥ 112,596

234,611200,690

1,987,390

48

75

411

Inventories (Note 5)

120,737

104,534

1,022,767

Deferred tax assets (Note 16)

17,92418,096

151,835

Other current assets

88,89475,938753,026

Less — allowance for doubtful accounts(2,784)(2,665)(23,588)

568,001

509,266

4,811,532

Buildings and structures (Notes 6 and 8)

171,897

155,168

1,456,138

Machinery, equipment and vehicles (Note 6)

269,769

240,467

2,285,216

Tools, furniture and fixtures (Note 6)

26,081

22,310220,936

Land (Note 8)

99,117

87,213

839,627

Construction in progress

39,05620,994

330,846

Total property, plant and equipment

605,922526,154

5,132,763

Goodwill

101,102

97,485

856,435

Software

11,714

12,48399,231

Total intangible assets

112,816

109,968

955,666

2,172,648

1,975,793

18,404,480

Investments in unconsolidated subsidiaries and affiliated companies

60,41560,976

511,782Long-term loans

8,460

8,591

71,672Long-term prepaid expenses

11,603

11,35898,297

Deferred tax assets (Note 16)

7,435

6,842

62,986

Other investments and other assets

38,78436,625328,544

Less — allowance for doubtful accounts

(232)

(237)

(1,967)

Total investments and other assets

2,299,117

2,099,951

19,475,794

3,017,856

2,736,074

25,564,223¥3,585,857¥3,245,341$30,375,755

Current assets
Cash and cash equivalents
Trade notes and accounts receivable (Note 8)
Short-term investments

Total current assets$

919,691

Fixed assets
Property, plant and equipment

Intangible assets

Investments and other assets
Investments in securities (Notes 4 and 8)

Total fixed assets
Total assets
The accompanying notes are an integral part of these financial statements.

66

Toyota Industries Corporation

Annual Report 2007

Thousands of
U.S. dollars (Note 1)

Millions of yen

LIABILITIES AND NET ASSETS
Current liabilities
Trade notes and accounts payable
Short-term bank loans (Note 8)
Commercial paper
Current portion of bonds
Other payables
Accrued expenses
Accrued income taxes
Deposits received from employees
Deferred tax liabilities (Note 16)
Allowance for bonuses to directors and corporate auditors
Other current liabilities (Note 8)
Total current liabilities
Long-term liabilities
Bonds (Note 7)Long-term bank loans (Notes 7 and 8)
Deferred tax liabilities (Note 16)
Allowance for retirement benefits (Note 14)
Other long-term liabilities
Total long-term liabilities
Total liabilities
Minority interests in consolidated subsidiaries
Shareholders’ equity (Note 11)
Common stock:
Authorized — 1,100,000,000 shares
Issued— 325,840,640 shares as of March 31, 2007
325,840,640 shares as of March 31, 2006
Capital surplus
Retained earnings
Treasury stock at cost
13,765,165 shares as of March 31, 2007
6,520,194 shares as of March 31, 2006

2007

2006

2007

¥ 205,168
37,10333,76060,00037,80877,69825,85422,0203,162
554
55,275¥ 182,595
38,92829,68015,00030,62067,674
13,625
20,914
3,857–
43,221$ 1,737,983
314,301
285,981508,259
320,272
658,185
219,013
186,535
26,7884,697
468,235

558,405

446,118

4,730,249

250,761
141,567
751,764
45,482
27,393283,831106,267
681,50346,535
20,585

2,124,195
1,199,214
6,368,186
385,282
232,051

1,216,969
1,775,374–

1,138,724
1,584,842
49,27010,308,929
15,039,178–

80,46280,462

681,598

105,055
402,431(47,253)

105,665
358,385(14,363)889,924
3,408,994(400,282)

Total shareholders’ equity
Valuation and translation adjustments
Net unrealized gains or losses on other securities
Deferred gains or losses on hedges
Foreign currency translation adjustments

540,696

530,150

4,580,234

1,157,793(0)52,912

1,047,190–
33,886

9,807,649(6)448,221

Total valuation and translation adjustments
Subscription rights to shares
Minority interests in consolidated subsidiaries
Total net assets
Total liabilities and net assets

1,210,704
202
58,8781,810,483¥3,585,857

1,081,077––
1,611,227¥3,245,341

10,255,864
1,719
498,761
15,336,578$30,375,755

Toyota Industries Corporation

Annual Report 200767

Consolidated Statements of Income
Toyota Industries Corporation
For the years ended March 31, 2007, 2006 and 2005
Thousands of
U.S. dollars (Note 1)

Millions of yen

2007

Net sales
Cost of sales (Note 12)
Gross profit
Selling, general and administrative expenses (Notes 12 and 15)
Sales commissions
Salaries and allowances
Retirement benefit expenses
Depreciation
Research and development expenses
Other
Operating income
Non-operating income
Interest income
Dividends income
Gain on sales of marketable securities
Rental income of fixed assets
Equity in net earnings of unconsolidated subsidiaries andaffiliated companies
Other non-operating income
Non-operating expenses
Interest expenses
Depreciation
Loss on disposal of fixed assets
Other non-operating expenses
Ordinary income
Extraordinary gains
Proceeds from sales of investment securities
Extraordinary losses
Impairment loss of fixed assets
Losses of discontinuing production of designated electronic parts
Income before income taxes and minority interests
Income taxes — current (Note 16)
Income taxes — deferred (Note 16)
Minority interests in consolidated subsidiaries
Net income

2006

2005

2007

¥1,878,398 ¥1,505,955 ¥1,241,538
1,586,781 1,276,499 1,041,780
291,616
229,456
199,758
11,32574,360
1,678
8,733
21,527

10,87558,382
1,982
6,507
20,307

8,938
50,984
1,582
5,418
19,484

95,937
629,908
14,22273,980182,362

84,03689,95467,36164,04060,22853,120711,868
762,002

13,76027,547
–
2,389
317

9,113
20,090
1,280
2,110
3,593

8,159
13,760
1,658
1,931
6,805

116,561
233,351–
20,238
2,690

6,868

7,665

5,967

58,185(17,855)(1,932)(3,567)(8,997)
108,484(11,955)(1,716)(4,487)(9,099)80,635(9,735)(2,381)(2,380)(5,994)70,912(151,251)(16,367)(30,223)(76,215)
918,971

4,305

–

–

36,468–(4,390)108,399
43,750(2,209)7,390¥ 59,468 ¥––
80,63530,446(2,137)
5,249
47,077 ¥(558)–
70,35326,808(4,557)
4,744
43,357–(37,190)918,248
370,606(18,721)62,607503,756

Yen

Net income per share — basic (Note 22)
Net income per share — diluted (Note 22)
Net assets per share (Note 23)
Cash dividends per share
The accompanying notes are an integral part of these financial statements.

68

Toyota Industries Corporation

Annual Report 2007

$15,911,886
13,441,606
2,470,280¥ 189.88
189.66
5,612.11
50.00¥ 146.16
146.02
5,044.45
38.00$

U.S. dollars (Note 1)¥ 135.09
135.033,504.80
32.00$ 1.61
1.61
47.54
0.42

Consolidated Statements of Changes in Net Assets
Toyota Industries Corporation
For the years ended March 31, 2007, 2006 and 2005
Millions of yen
Common stock Capital surplus

Balance at March 31, 2004

Retainedearnings

Treasury stock Net unrealized Deferred gains
at costgains or losses or losses onon other
hedgessecurities¥(17,975) ¥ 534,078

Foreigncurrencytranslation
adjustments

Subscription
rights to shares

Minority
interests inconsolidated
subsidiaries¥¥80,462¥105,743¥294,672¥–¥19,782–¥34,926

Dividens paid
Bonuses to directors and corporate auditors

–
–

–
–

(7,948)
(331)

–
–

–
–

–
–

–
–

–
–

–
–

Net income for the period
Repurchase of treasury stock

–
–

–
–

43,357
–

–
(52)

–
–

–
–

–
–

–
–

–
–

Exercise of stock options

–

(142)

–

1,301

–

–

–

–

–

–

–

(4,419)

–

–

–

–

–

–

Effect of adoption of a new accounting
standards for retirement benefits
by foreign subsidiaries
Change to items other than shareholders’equity during accounting period
Balance at March 31, 2005
Dividens paid

–

–

–

–

57,139–10,078–5,977

80,462–

105,600–

325,330(11,793)(16,726)–

591,218–––

29,861–––40,904
–

(406)

–

–

–

–

–

–

Bonuses to directors and corporate auditors
Decrease due to increase in affiliates
accounted for under the equity method

–

–

–

–

(1,821)

–

–

–

–

–

–

Net income for the period
Repurchase of treasury stock

–
–

–
–

47,077
–

–
(52)

–
–

–
–

–
–

–
–

–
–

Exercise of stock options
Change to items other than shareholders’equity during accounting period

–

65

–

2,415

–

–

–

–

–

Balance at March 31, 2006
Dividens paid
Interim dividends paid
Bonuses to directors and corporate auditors
Decrease due to increase in affiliates
accounted for under the equity method
Decrease due to decreasein consolidated subsidiaries
Net income for the period
Repurchase of treasury stock
Exercise of stock options
Change to items other than shareholders’equity during accounting period
Balance at March 31, 2007

–

–

–

–

455,972

–

4,024

–

8,366

80,462

105,665

358,385(14,363)

1,047,190–

33,886–49,270

–
–
–

–
–
–

(6,386)(6,864)
(427)

–
–
–

–
–
–

–
–
–

–
–
–

–
–
–

–
–
–

–

–

(1,673)

–

–

–

–

–

–

–
–
–

–
–
–

(71)
59,468–––(35,524)

–
–
–

–
–
–

–
–
–

–
–
–

–
–
–

–

(610)

–

2,634

–

–

–

–

–

–

110,602(0)

19,026202

9,607¥(47,253) ¥1,157,793¥(0)¥52,912¥202¥58,878

Treasury stock Net unrealized Deferred gains
at costgains or losses or losses onon other
hedgessecurities

Foreigncurrencytranslation
adjustments

Subscription
rights to shares

Minority
interests inconsolidated
subsidiaries$(121,677) $8,870,741
–
–

$–
–

$287,051–$––$417,373
–

–

–

–

¥80,462¥105,055¥402,431

Thousands of U.S. dollars (Note 1)
Common stock Capital surplus

Balance at March 31, 2006
Dividens paid
Interim dividends paid
Bonuses to directors and corporate auditors
Decrease due to increase in affiliates
accounted for under the equity method
Decrease due to decreasein consolidated subsidiaries
Net income for the period
Repurchase of treasury stock
Exercise of stock options
Change to items other than shareholders’equity during accounting period
Balance at March 31, 2007

$681,598–

Retainedearnings$895,092 $3,035,882–(54,098)––––(58,149)(3,619)

–
–

–
–

–
–

–
–

–
–

–
–

–

–

(14,172)

–

–

–

–

–

–

–
–
–
–

–
–
–
(5,168)(604)
503,756––––(300,926)
22,321

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

–
936,909$(400,282) $9,807,649

(6)
$(6)

161,170$448,221

1,719$1,71981,387$498,761–$681,598––$889,924 $3,408,994

The accompanying notes are an integral part of these financial statements.

Toyota Industries Corporation

Annual Report 200769

Consolidated Statements of Cash Flows
Toyota Industries Corporation
For the years ended March 31, 2007, 2006 and 2005
Thousands of
U.S. dollars (Note 1)

Millions of yen

2007

2006

2005

2007

¥ 108,399¥ 80,635¥ 70,353$ 918,248

Depreciation and amortization

106,060

87,28770,213

898,433

Impairment loss of fixed assets

–

–

558

–

(250)

101

371

(2,118)Interest and dividends income(41,307)(29,204)(21,920)(349,912)

Interest expenses

17,855

11,955

9,735

151,251(317)(3,593)(6,805)(2,690)(25,836)(27,435)(22,923)(218,861)

Cash flows from operating activities
Income before income taxes and minority interests
Adjustments to reconcile income before income taxes andminority interests to net cash provided by operating activities:

Increase (decrease) in allowance for doubtful accounts

Equity in net earnings of unconsolidated subsidiaries and affiliated companies(Increase) decrease in receivables(Increase) decrease in inventories(9,221)(9,227)(12,851)(78,117)

Increase (decrease) in payables

15,022

21,376

26,893

127,258

Others, net

17,238

12,161(4,063)146,027

Subtotal

187,642

144,055

109,561

1,589,520

Interest and dividends income received

41,29429,236

21,971

349,808

Interest expenses paid

(17,777)(11,009)(8,710)(150,591)

Income taxes paid

(33,692)(30,498)(22,727)(285,409)

177,467

131,784

100,095

1,503,328(155,550)(161,504)(110,111)(1,317,670)

7,624

8,415

10,04364,590(17,604)(47,726)(9,562)(149,129)

Proceeds from sales of investment securities

8,419

2,045

3,299

71,321

Payments for acquisition of subsidiaries’ stock resulting in(1,939)–(16,943)(16,426)(3,172)(2,256)(2,370)(26,870)

Net cash provided by operating activities
Cash flows from investing activities
Payments for purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Payments for purchases of investment securities

change in scope of consolidation
Payments for loans madeProceeds from collections of loans

4,490

3,264

2,783

38,038Others, net(6,714)(7,250)(5,368)(56,875)(164,446)(205,013)(128,230)(1,393,021)

Increase (decrease) in short-term loans(12,434)(22,902)(13,686)(105,328)

Increase (decrease) in commercial paper–

29,520(15,000)–

Proceeds from long-term loans

40,00438,82440,785

338,880

Repayments of long-term loans(14,020)(3,365)(6,964)(118,765)

Proceeds from issuances of bonds

25,107

68,73050,000212,687

Repayments of bonds(15,980)(20,300)–(135,372)

Payments for repurchase of treasury stock(35,524)

(52)

(52)

(300,926)

Cash dividends paid

(13,250)(11,784)(7,948)(112,247)

Cash dividends paid to minority shareholders(1,039)

(854)

(667)

(8,809)Others, net

7,388

7,357

3,554

62,584(167,295)

Net cash used in investing activities
Cash flows from financing activities

Net cash provided by (used in) financing activities(19,749)

85,17250,020Translation adjustments of cash and cash equivalents

2,700

117

1,438

22,875

Net increase (decrease) in cash and cash equivalents(4,027)

12,06023,323(34,113)

Cash and cash equivalents at beginning of year

112,596

100,535

77,212

953,805

Cash and cash equivalents at end of year

¥108,569¥112,596¥100,535$ 919,691

The accompanying notes are an integral part of these financial statements.

70

Toyota Industries Corporation

Annual Report 2007

Notes to Consolidated Financial Statements
1. Basis of presenting consolidated financial statements
The accompanying consolidated financial statements have been
prepared based on the accounts maintained by Toyota Industries
Corporation (the “Company”), and its consolidated subsidiaries(together, hereinafter referred to as “Toyota Industries”) in
accordance with the provisions set forth in the Corporate Law ofJapan and the Securities and Exchange Law, and in conformity
with accounting principles generally accepted in Japan, which are
different in certain respects from the application and disclosure
requirements of International Financial Reporting Standards.
Certain items presented in the consolidated financial

statements submitted to the Director of Kanto Finance Bureau
in Japan have been reclassified in these accounts for theconvenience of readers outside Japan.
Amounts in U.S. dollars are included solely for the convenienceof readers outside Japan. The rate of ¥118.05=US$1, theapproximate rate of exchange prevailing at March 31, 2007, hasbeen used in translation. The inclusion of such amounts are notintended to imply that the Japanese yen actually represent, or
have been or could be converted into, equivalent amounts in U.S.
dollars at this rate or any other rates.

2. Summary of significant accounting policies(1) Consolidation
The consolidated financial statements include the accounts of
the Company and its 162 subsidiaries (45 domestic subsidiaries
and 117 overseas subsidiaries) and 21 affiliates (which are listed
on pages 50 and 51) in 2007, 153 subsidiaries (43 domestic
subsidiaries and 110 overseas subsidiaries) and 22 affiliates in2006 and 146 subsidiaries (43 domestic subsidiaries and 103
overseas subsidiaries) and 20 affiliates in 2005.
For the year ended March 31, 2007, 12 subsidiaries were
newly added to the scope of consolidation and three companies
were excluded from the scope of consolidation because ofmergers and acquisitions. One affiliate was newly added tothe scope of equity-method accounting and two affiliates were
excluded from the scope of equity-method accounting andadded to the scope of consolidation .
For the year ended March 31, 2006, nine subsidiaries were
newly added to the scope of consolidation and two companies
were excluded from the scope of consolidation because ofmergers and acquisitions. Two affiliates were newly added to thescope of equity-method accounting.
For the year ended March 31, 2005, 11 subsidiaries were
newly added to the scope of consolidation and six companies
were excluded from the scope of consolidation because ofmergers and acquisitions.
Some of the affiliates are not accounted for under the equity
method since their net income/losses, retained earnings andother financial amounts are immaterial.
The fiscal years of certain subsidiaries are different from thefiscal year of the Company. Since the difference is not morethan three months, the Company is using those subsidiaries’
statements for those fiscal years, making adjustments for
significant transactions that materially affect the financial position
or results of operations.
The fiscal years of certain unconsolidated subsidiaries andaffiliates accounted for by the equity method are different from thefiscal year of the Company. The Company is using the financial

statements of the unconsolidated subsidiaries and affiliates
accounted for by the equity method for their respective fiscal years.
All significant intercompany transactions, balances andunrealized profits within Toyota Industries have been eliminated.
A full portion of the assets and liabilities of the acquired
subsidiaries is stated at fair value as of the date of acquisition ofcontrol.
In the year ended March 31, 2007, Toyota Industries Sweden
AB and its consolidated subsidiaries have decided to change
their fiscal year-end from December 31 to March 31. As a result,
the Company’s consolidated financial statements include 15
months of their operating results.

(2) Investments in unconsolidated subsidiaries
and affiliates
Investments in 21 major affiliates in 2007, 22 major affiliates in2006 and 20 major affiliates in 2005 are accounted for by theequity method of accounting. Investments in unconsolidated
subsidiaries and affiliates not accounted for by the equity
method are stated at cost due to their insignificant effect on the
consolidated financial statements.
The major affiliates accounted for by the equity method arelisted on page 51.

(3) Translation of foreign currencies
Foreign currency denominated receivables and payables aretranslated into Japanese yen at the year-end exchange rates
and the resulting transaction gains or losses are included inconsolidated statements of income.
All asset and liability accounts of foreign subsidiaries andaffiliates are translated into Japanese yen at year-end exchange
rates and all revenue and expense accounts are translated at
prevailing fiscal average rates.

(4) Cash and cash equivalents
Cash and cash equivalents include all highly liquid investments,

Toyota Industries Corporation

Annual Report 200771

generally with original maturities of three months or less, that arereadily 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.

(5) Marketable securities and investment insecurities
Toyota Industries classifies securities into four categories bypurpose of holding: trading securities, held-to-maturity securities,
other securities and investments in unconsolidated subsidiaries
and affiliates. Toyota Industries did not have trading securities orheld-to-maturity securities as of March 31, 2007 and 2006.
Other securities with readily determinable fair values arestated at fair value based on market prices at the end of theyear. Unrealized gains and losses are included in “Net unrealized
gains or losses on other securities” as a separate componentof net assets. Cost of sales of such securities is determined by
the moving-average method. Other securities without readily
determinable fair values are stated at cost, as determined by themoving-average method.
Investments in unconsolidated subsidiaries and affiliates areaccounted for by the equity method (see Note 2 (2)).

grouping of assets and recoverable value, with due consideration
for the specific conditions of each company.
The recoverable amount of assets is calculated based on net
selling price. The change in accounting policy is described in
Note 3.

(10) Allowances for doubtful accounts
Toyota Industries adopted the policy of providing an allowance for
doubtful accounts in an amount sufficient to cover possible losses
on collection by estimating individually uncollectible amounts andapplying to the remaining accounts a percentage determined bycertain factors such as historical collection experiences.

(11) Deferred charges
Stock issuance costs and bond issuance costs are expensed as
incurred.

(12) Allowance for bonuses to directors andcorporate auditors
Bonuses to directors and corporate auditors are recorded on theaccrual basis with a related charge to income.

(13) Allowance for retirement benefits(6) Inventories
Inventories are stated mainly at cost determined by the movingaverage method.

(7) Property, plant and equipment, anddepreciation
Property, plant and equipment are stated at cost. Depreciation
expenses of property, plant and equipment are computed
mainly by the declining-balance method for the Company andJapanese subsidiaries and by the straight-line method for foreignsubsidiaries.
Significant renewals and additions are capitalized at cost.
Repairs and maintenance are charged to income as incurred.
Accumulated depreciation as of March 31, 2007 and 2006
was ¥651,651 million (US$5,520,147 thousand) and ¥585,994
million, respectively.

(8) Intangible assets and amortization
Amortization of intangible assets is computed using the straightline method. Software costs for internal use are amortized by thestraight-line method over their expected useful lives (mainly five
years).
Goodwill, if material, is amortized principally over less than
20 years on a straight-line basis, while immaterial goodwill ischarged to income as incurred.
Accumulated amortization of intangibles and goodwill as ofMarch 31, 2007 and 2006 was ¥70,124 million (US$594,023
thousand) and ¥53,552 million, respectively.

(9) Impairment of fixed assets
Calculation of the impairment of fixed assets is based onreasonable and supportable assumptions and projection of the72

Toyota Industries Corporation

Annual Report 2007

Toyota Industries accrues an amount which is considered to be
incurred in the period based on the estimated projected benefit
obligations and estimated pension assets at the end of the year.
To provide for the retirement benefits for directors and corporate
auditors, an amount which is calculated at the end of the year as
required by an internal policy describing the retirement benefits
for directors and corporate auditors is accrued.

(14) Lease transactions
Finance leases other than those that are deemed to transfer
the ownership of the leased assets to lessees are accounted
for mainly by a method similar to that applicable to ordinary
operating leases.

(15) Consumption tax
The consumption tax under the Japanese Consumption Tax Law
withheld by Toyota Industries on sales of goods is not includedin the amount of net sales in the accompanying consolidated
statements of income, and the consumption tax paid by Toyota
Industries under the law on purchases of goods and services,and expenses is not included in the related amount.

(16) Hedge accounting(a) Method of hedge accounting
Mainly the deferral method of hedge accounting is applied. In thecase of foreign currency forward contracts and foreign currency
option contracts, the hedged items are translated at contracted
forward rates if certain conditions are met.
(b) Hedging instruments and hedged items
Hedging instruments: Derivatives instruments (interest rate
swaps, foreign currency forwards andforeign currency option contracts)

Hedged items:

Risk of change in interest rate on
borrowings and risk of change inforward exchange rate on transactions
denominated in foreign currencies(assets and liabilities, and forecasted
transactions)(c) Hedging policy
Hedging transactions are executed and controlled based on
Toyota Industries’ internal policy and Toyota Industries is hedging
interest rate risks and foreign currency risks. Toyota Industries’
hedging activities are reported periodically to a director
responsible for accounting.
(d) Method used to measure hedge effectivenessHedge effectiveness is measured by comparing accumulatedchanges in market prices of hedged items and hedging
instruments or accumulated changes in estimated cash flows
from the inception of the hedge to the date of measurements
performed. Currently it is considered that there are highcorrelations between them.
(e) Others
Due to the fact that counterparties to Toyota Industries represent
major financial institutions which have high creditworthiness,
Toyota Industries believes that the overall credit risk related to its
financial instruments is insignificant.

(17) Income taxes
The provision for income taxes is computed based on the pretax
income included in the consolidated statements of income. The
asset and liability approach is used to recognize deferred tax
liabilities and assets for the expected future tax consequences of
temporary differences between the carrying amounts and the tax
bases of assets and liabilities.
Valuation allowances are recorded to reduce deferred tax
assets when it is more likely than not that a tax benefit will not berealized.

(18) Net income per share
The computation of basic net income per share is based on theweighted-average number of outstanding shares of common
stock. The calculation of diluted net income per share is similar
to the calculation of basic net income per share, except that theweighted-average number of shares outstanding includes the
additional dilution from potential common stock equivalents suchas subscription rights to shares. Cash dividends per share shownin the statements of income are the amounts applicable to therespective years.

3. Change in accounting policy and adoption of new accounting standards
For the year ended March 31, 2007
Accounting Standard for Directors’ Bonus
Effective from the fiscal year beginning April 1, 2006, Toyota
Industries applied Financial Accounting Standard No. 4“Accounting Standard for Directors’ Bonus” issued on November
29, 2005 by the Accounting Standards Board of Japan. As
a result, ordinary income and income before income taxes
and minority interests decreased by ¥554 million (US$4,697
thousand).
Accounting Standards for Presentation of Net Assets in
the Balance Sheet
Effective from the fiscal year beginning April 1, 2006, Toyota
Industries applied Financial Accounting Standard No. 5“Accounting Standards for Presentation of Net Assets in the
Balance Sheet” and its Implementation Guidance No. 8 “Guidanceon Accounting Standards for Presentation of Net Assets in the
Balance Sheet” issued on December 9, 2005 by the AccountingStandards Board of Japan. If the previous accounting policy had
been applied, net assets at March 31, 2007 would have been
¥1,751,402 million (US$14,836,104 thousands).
Accounting Standard for Share-Based Payment
Effective from the fiscal year beginning April 1, 2006, Toyota
Industries applied Financial Accounting Standard No. 8“Accounting Standard for Share-based Payment” issued on
December 27, 2005 by the Accounting Standards Board ofJapan, and its Implementation Guidance No. 11 “Guidanceon Accounting Standard for Share-based Payment” issued on
May 31, 2006 by the Accounting Standards Board of Japan.

As a result, ordinary income and income before income taxes
and minority interests decreased by ¥202 million (US$1,719
thousand).
Accounting Standard for Business Combinations
Effective from the fiscal year beginning April 1, 2006, Toyota
Industries applied Financial Accounting Standard for Business
Combinations issued on October 31, 2003 by the BusinessAccounting Council in Japan, and Financial Accounting Standard
No. 7 “Accounting Standard for Business Divestitures” andthe related Implementation Guidance No. 10 “Guidance on
Accounting Standard for Business Combinations and AccountingStandard for Business Divestitures” issued on December 27,
2005 by the Accounting Standards Board of Japan.

For the year ended March 31, 2005
Impairment of fixed assets
Toyota Industries has applied Accounting Standards for
Impairment of Fixed Assets (Opinions Concerning Establishmentof Accounting Standards for Impairment of Fixed Assets) issued
on August 9, 2002 by the Business Accounting Council in Japan,
and the application guideline for Accounting Standards for
Impairment of Fixed Assets (the Financial Accounting Standard
Implementation Guideline No. 6 issued on October 31, 2003),
to the consolidated financial statements for fiscal 2005, as early
adoption of such standards and guidelines, which are effective forfiscal years beginning on and after April 1, 2005, was permitted
for the consolidated accounting for the fiscal year ended March
31, 2005.

Toyota Industries Corporation

Annual Report 200773

4. Marketable securities(1) As of and for the year ended March 31, 2007:(a) Other securities with readily determinable fair value as of March 31, 2007 are as follows:
Millions of yen
Acquisition
cost

Carrying
amountThousands of U.S. dollars
Difference

Acquisition
cost

Carrying
amountDifference

Securities with carrying amountexceeding acquisition cost:
Stocks¥223,782 ¥2,152,078 ¥1,928,296$1,895,659 $18,230,233 $16,334,574

Subtotal

223,782

2,152,078

1,928,296

1,895,659 18,230,233 16,334,574

Stocks

3,716

2,910

(806)

31,48424,654(6,831)

Subtotal

3,716

2,910

(806)

31,48424,654(6,831)

Securities with carrying amountnot exceeding acquisition cost:

Total¥227,499 ¥2,154,989 ¥1,927,490$1,927,143 $18,254,887 $16,327,744(b) Other securities sold during the year ended March 31, 2007 are as follows:
Millions of yen

Thousands of U.S. dollars

Proceeds

Realized gains

Realized losses

Proceeds

Realized gains¥8,419¥4,305–$71,321$36,468

Realized losses–(c) The carrying amount of securities (excluding held-to-maturity bonds which are included within securities with fair value) without readily
determinable fair values as of March 31, 2007 are as follows:
Carrying amountMillions of yen

Thousands of
U.S. dollars

Domestic unlisted stocks excluding over-the-counter stocks¥17,659$149,594

Money management funds

30,065

254,687

Other securities(2) As of and for the year ended March 31, 2006:(a) Other securities with readily determinable fair value as of March 31, 2006 are as follows:
Millions of yen
Acquisition
cost

Carrying
amountDifference

Securities with carrying amount exceeding acquisition cost:
Stocks¥212,297 ¥1,956,653 ¥1,744,356

Subtotal

212,297

1,956,653

1,744,356

Stocks

1,808

1,339

(469)

Subtotal

1,808

1,339

(469)

Securities with carrying amount not exceeding acquisition cost:

Total¥214,105 ¥1,957,992 ¥1,743,887(b) Other securities sold during the year ended March 31, 2006 are as follows:
Millions of yen

74

Proceeds

Realized gains

Realized losses¥2,516¥1,280¥1

Toyota Industries Corporation

Annual Report 2007

(c) The carrying amount of securities (excluding held-to-maturity bonds which are included within securities with fair value) without readily
determinable fair values as of March 31, 2006 are as follows:
Carrying amountMillions of yen

Other securities
Domestic unlisted stocks excluding over-the-counter stocks¥17,800

Money management funds

45,002(d) Redemption schedule of securities which have maturities within other securities as of March 31, 2006 is as follows:
Millions of yen
Over 1 year
within5 years

Within1 yearOver 5 years
within
10 yearsOver
10 years

Bonds
Government bonds
Total

¥0

–

–

–

¥0

¥–

¥–

¥–

5. Inventories
Inventories as of March 31, 2007 and 2006 consist of the following:Thousands of
U.S. dollars

Millions of yen

2007

2006

2007

Finished goods¥ 51,144¥ 40,702$ 433,247

Raw materials

20,32516,097

172,174

Work in process

37,84137,089320,554

Supplies

11,426

10,64596,792¥120,737¥104,534$1,022,767

Total

6. Property, plant and equipment
Accumulated depreciation as of March 31, 2007 and 2006 is as follows:
Thousands of
U.S. dollars

Millions of yen

2007

2006

2007

Buildings and structures¥146,690¥132,151$1,242,616

Machinery, equipment and vehicles

437,123

393,3073,702,870

Tools, furniture and fixtures

67,83860,536574,661

Toyota Industries Corporation

Annual Report 200775

7. Long-term debt
(1) Long-term debt as of March 31, 2007 and 2006 consists of the following:Thousands of
U.S. dollars

Millions of yen

2007

2006

2007

2.70% bonds due 2008 without collateral¥ 30,000¥ 30,000$ 254,130

2.15% bonds due 2008 without collateral

20,00020,000169,420

1.50% bonds due 2006 without collateral–

15,000

–1.94% bonds due 2009 without collateral

15,00015,000127,065

1.91% bonds due 2010 without collateral

20,00020,000169,420

0.41% bonds due 2007 without collateral

30,00030,000254,130

1.13% bonds due 2012 without collateral

50,00050,000423,549

1.03% bonds due 2012 without collateral

30,00030,000254,130

1.46% bonds due 2014 without collateral

20,00020,000169,420

1.01% bonds due 2010 without collateral

20,00020,000169,420

1.66% bonds due 2015 without collateral

30,00030,000254,130

0.49-3.24% medium-term notes due 2009-2010

25,77018,831

218,304

1.95% bonds due 2016 without collateral

19,990–169,336

Long-term bank loans

145,940

109,268

1,236,257

Less: current portion of long-term debt

(64,372)(18,000)(545,302)¥392,328¥390,100$3,323,409

The Company:

Consolidated subsidiaries:

Total(2) Annual maturities of long-term debt as of March 31, 2007 are as follows:

Thousands of
U.S. dollars

Year ending March 31

Millions of yen

2008¥ 64,372 $ 545,302

2009

29,299248,198

2010

32,885278,576

2011

61,185518,3032012

37,907321,1122013 and thereafter

231,049

1,957,220

Total¥456,701 $3,868,711

8. Assets pledged as collateral(1) Assets pledged as collateral as of March 31, 2007 and 2006 are as follows:
Thousands of
U.S. dollars

Millions of yen

2007

2006

2007

¥56,710¥57,035$480,390

Land

1,989

2,952

16,851

Buildings and structures

1,160

1,798

9,830

–

244

–

¥59,859¥62,031$507,071

Investments in securities

Trade notes and accounts receivable
Total

76

Toyota Industries Corporation

Annual Report 2007

(2) Secured liabilities as of March 31, 2007 and 2006 are as follows:
Thousands of
U.S. dollars

Millions of yen

2007

2006

2007

Other current liabilities¥21,736¥20,805$184,133

Short-term bank loans

138

363

1,175

Long-term bank loans

67

155

568

¥21,942¥21,324$185,876

Total

9. Contingent liabilities
Toyota Industries is contingently liable for guarantees as of March 31, 2007 and 2006 as follows:
Thousands of
U.S. dollars

Millions of yen

2007

2006

2007

¥4,200¥1,000$35,578

Guarantees given by consolidated subsidiaries

455

1,179

3,862

Guarantee forwards given by the Company

473

543

4,007

Guarantees given by the Company

10. Export discount bills
Export discount bills as of March 31, 2007 and 2006 are as follows:
Thousands of
U.S. dollars

Millions of yen

2007

Export discount bills

¥443

2006

¥395

2007

$3,761

11. Net assets
Under the Japanese Corporate Law, amounts equal to 10% of
the sum of the cash dividends and other external appropriations
paid by the Company and its domestic subsidiaries must be set
aside as a legal reserve until it equals 25% of common stock.
The legal reserve may be used to reduce a deficit or may betransferred to common stock by taking appropriate corporate
action. In consolidation, the legal reserves of the Company andits domestic subsidiaries are accounted for as retained earnings.
The year-end cash dividend is approved at the Ordinary
General Meeting of Shareholders of the Company held after theclose of the fiscal year to which the dividend is applicable. In
addition, interim cash dividends may be paid upon resolutionof the Board of Directors, subject to limitations imposed by theJapanese Corporate Law.
Proceeds from the conversion of convertible bonds havebeen accounted for in approximately equal amounts as common
stock and capital surplus. At least 50% of the proceeds havebeen accounted for as common stock, in accordance with theprovisions of the Japanese Corporate Law.

12. Research and development expenses
Research and development expenses, which are included inselling, general and administrative expenses and manufacturingcosts, amounted to ¥34,548 million (US$292,657 thousand),¥31,166 million and ¥30,051 million for the years ended March
31, 2007, 2006 and 2005, respectively.

Toyota Industries Corporation

Annual Report 200777

13. Derivative instruments(1) Qualitative disclosure about derivatives(a) Contents of derivative instruments into which Toyota
Industries entered, policy with respect to entering into
derivative instruments, and purpose of using derivative
instruments:
Toyota Industries uses interest rate swap agreements to
reduce interest rate risks on borrowings. Toyota Industries
also uses foreign currency forward contracts and foreign
currency option contracts to hedge foreign currency
risks on transactions denominated in foreign currencies(receivables and payables and forecasted transactions).
(b) Contents of risks related to derivative instruments:
Interest rate swaps, foreign currency forward contracts
and foreign currency option contracts into which Toyota
Industries entered have risks of fluctuations in interest rates
and in foreign currency exchange rates. Due to the factthat counterparties to Toyota Industries represent major
financial institutions which have high creditworthiness,
Toyota Industries believes that the overall credit risk related
to its financial instruments is insignificant.
(c) Controls in place over transactions handling derivative
instruments:
Hedging transactions are executed and controlled basedon Toyota Industries’ internal policy and Toyota Industries’
hedging activities are reported periodically to a director
responsible for accounting.

(2) Quantitative disclosure about derivatives
Toyota Industries omitted this information because hedge
accounting is applied to all of the derivative instruments into
which Toyota Industries entered.

14. Retirement benefits(1) Outline of retirement benefit plans
The Company and its domestic subsidiaries maintain tax-qualified
pension plans, lump-sum indemnities plans and welfare pension
fund plans, all of which are non-contributory defined benefit
pension plans. In addition, certain foreign subsidiaries maintainnon-contributory defined benefit pension plans. Since 1987,
the Company has been transferring the covering percentagesof its pension plan from its lump-sum indemnities plan to its
tax-qualified pension plan. As of March 31, 2007 and 2006, its
tax-qualified pension plan covers 50% of total plans. Also, theCompany established an employee retirement benefit trust. In
April 2003, the Company transferred a portion of the lump-sum
indemnities plan to a defined contribution pension plan.

(2) Components of allowance for retirement benefits as of March 31, 2007 and 2006 are as follows:
Thousands of
U.S. dollars

Millions of yen

2007

2006

2007

Benefit obligation¥150,203¥138,808$1,272,368

Plan assets(118,227)(105,552)(1,001,503)

Unfunded benefit obligation

31,97533,256

270,866

Unrecognized actuarial gains or losses

2,907

2,443

24,630

Unrecognized loss in prior service obligation

(331)

(614)

(2,805)

Net amount recognized on the balance sheets

34,55235,085

292,691

Prepaid pension expenses(6,212)(6,006)(52,628)¥ 40,764¥ 41,092$ 345,319

Allowance for retirement benefits

Certain subsidiaries use the simplified method to determine benefit obligations. Prepaid pension expenses are included in otherinvestments and other assets. Allowance for retirement benefits on the consolidated balance sheets includes ¥4,717 million (US$39,963
thousand) and ¥5,443 million of allowance for retirement and severance benefits for directors and corporate auditors as of March 31,
2007 and 2006, respectively.

78

Toyota Industries Corporation

Annual Report 2007

(3) Components of retirement benefit expenses for the years ended March 31, 2007, 2006 and 2005 are as follows:
Thousands of
U.S. dollars

Millions of yen

2007

2006

2005

2007

Service cost

¥ 9,171¥ 7,921¥ 7,445$77,688

Interest cost

5,036

4,079

3,986

42,663

Expected return on plan assets(3,573)(2,435)(2,196)(30,272)

Amortization of prior service obligation

398

94

85

3,372

Amortization of unrecognized actuarial gains or losses

(153)

778

1,030

(1,296)¥10,878¥10,438¥10,351$92,155

Retirement benefit expenses

Retirement expenses of subsidiaries which adopted the simplified method are included in service cost.
(4) Assumptions used for calculation of retirement benefits for the years ended March 31, 2007, 2006 and 2005 are as follows:
2007

2006

2005

Discount rate

2.00%

2.00%

2.00%

Expected return on plan assets

3.00%

3.00%

3.00%

6–11 years

6–11 years

Method of attribution of estimated retirement benefits
to periods of employee service: Straight-line method

Amortization period of prior service obligation

6–11 years — Straight-line method over
the remaining service
period of employees

Amortization period of unrecognized actuarial gains
or losses

20 years

20 years

20 years — Straight-line method over
the average remaining
service period of
employees starting fromthe following year

(5) Plan assets relating to welfare pension fund under multiemployer pension plan:
Amounts of plan assets calculated based on proportion of contribution to the fund made by each domestic subsidiary are ¥12,473 million(US$105,659 thousand) and ¥11,213 million as of March 31, 2007 and 2006, respectively.

Toyota Industries Corporation

Annual Report 200779

15. Stock options(1) Stock option expenses recorded in the fiscal year and class of options
Selling, general and administrative expenses

Millions of yen

Thousands of
U.S. dollars¥202$1,719(2) Stock option details, number of stock options and state of fluctuation(a) Stock option details
2007

2006

Company name

The Company

The Company

The Company

Position and number ofgrantees

Directors: 17
Managing officers and employees: 152

Directors: 30
Employees: 134

Directors: 30
Employees: 135

Class and number ofshares*802,000 shares of common stock

791,000 shares of common stock

775,000 shares of common stock

Date of issue

August 1, 2006

August 1, 2005

August 2, 2004

Same as left

Same as left

Vesting condition

1. Grantee must be employed as adirector, managing officer or regular
employee of the Company at the timeof exercise. However, this does not
apply if no more than 18 months haveelapsed after retirement or resignationfrom the Company.
2. Other conditions of exercise shall bedecided as prescribed by the Contract
for Allotment of Stock Acquisition
Rights concluded by the Company andgrantee in accordance with resolutions
at the Ordinary General Meeting of
Shareholders and resolutions on theissue of stock acquisition rights by the
Board of Directors.

Service period

From August 1, 2006 to July 31, 2008

From August 1, 2005 to June 30, 2007

From August 2, 2004 to June 30, 2006

Exercise period

From August 1, 2008 to July 31, 2012

From July 1, 2007 to June 30, 2011

From July 1, 2006 to June 30, 2010

Company name

The Company

The Company

Position and number ofgrantees

Directors: 30
Employees: 128

Directors: 30
Employees: 115

Class and number ofshares*750,000 shares of common stock

728,000 shares of common stock

Date of issue

August 1, 2003

August 1, 2002

1. Grantee must be employed as adirector, managing officer or regular
employee of the Company at the timeof exercise. However, this does not
apply if no more than 18 months haveelapsed after retirement or resignationfrom the Company.
2. Other conditions of exercise shall bedecided as prescribed by the Contract
for Allotment of Stock Acquisition
Rights concluded by the Company andgrantee in accordance with resolutions
at the Ordinary General Meeting of
Shareholders and resolutions on theissue of stock acquisition rights by the
Board of Directors.

1. Grantee must be employed as adirector, managing officer or regular
employee of the Company at the timeof exercise. However, this does not
apply if no more than six months haveelapsed after retirement or resignationfrom the Company.
2. Other conditions of exercise shall bedecided as prescribed by the Contract
for Allotment of Stock Acquisition
Rights concluded by the Company andgrantee in accordance with resolutions
at the Ordinary General Meeting of
Shareholders and resolutions on theissue of stock acquisition rights by the
Board of Directors.

Service period

From August 1, 2003 to June 30, 2005

From August 1, 2002 to June 30, 2004

Exercise period

From July 1, 2005 to June 30, 2009

From July 1, 2004 to June 30, 2008

2004

Vesting condition* Number of options granted by class are listed as number of shares.

80

2005

Toyota Industries Corporation

Annual Report 2007

2003

(b) Number of stock options and state of fluctuation
Stock options are those outstanding in the fiscal year and are listed as the number of shares.
(i) Number of stock options
Non-exercisable stock options
2007

Stock options outstanding at the end of the previous fiscal year

2006

2005

2004

2003

–

791,000

775,000––

802,000

–

–

–

–

Forfeitures

–

–

–

–

–

Conversion to exercisable stock options––

775,000––

802,000

791,000

–

–

–

2007

2006

Stock options granted

Stock options outstanding at the end of the fiscal year
Exercisable stock options

2005

2004

2003

Stock options outstanding at the end of the previous fiscal year

–

–

–

31,000118,000

Conversion from non-exercisable stock options––

775,000––

Stock options exercised––

736,500

25,00010,000Forfeitures

–

–

–

–

–

Stock options outstanding at the end of the fiscal year––

38,5006,000

108,000(ii) Price of options
Exact yen amounts

Exercise price

2007

2006

2005

2004

2003

¥4,642¥3,306¥2,652¥2,074¥1,982––¥4,467¥5,467¥5,218

759

–

–

–

–

Average market price of the stock at the time of exercise
Fair value of options on grant date(3) Method for estimating fair value of stock options
The method for estimating fair value of stock options granted for fiscal 2007 is as follows:(a) Valuation method used: Black-Scholes model(b) Principal basic values and estimation methods
2007

Share price fluctuations*1

20.63%

Projected remaining period *2
Projected dividend

4 years*3

Non-risk interest rate

¥40/share
*4

1.21%

*1 Computed based on actual share prices during a four-year period (from August 2002 to July 2006).
*2 Because of a lack of accumulated data and difficulty in making rational estimates, it is assumed the rights
are excercised at the midpoint of the exercise period.
*3 Based on the year-end dividend for the fiscal year ended March 31, 2006 and the estimated interim
dividend on the grant date.
*4 Yields on government bonds for the period corresponding to the projected remaining period.

(4) Method for estimating the number of confirmed stock option rights
Specifically, because of the difficulty in rationally estimating the number of expired rights in the future, a method has been adopted thatreflects actual past expirations.

Toyota Industries Corporation

Annual Report 200781

16. Income taxes(1) The significant components of deferred tax assets and liabilities as of March 31, 2007 and 2006 are as follows:
Thousands of
U.S. dollars

Millions of yen

2007

2006

2007

¥ 15,347¥ 15,560

Trade receivables

2,464

2,867

20,880Accrued expenses

7,465

6,739

63,244

Net operating loss carry-forwards for tax purposes

2,039

2,012

17,274

Depreciation

6,350

4,538

53,794

Securities

2,066

2,528

17,504Enterprise tax payable

1,692

1,045

14,336

Other

12,741

14,119107,931

Subtotal

50,16849,410424,974

Deferred tax assets:
Allowance for retirement benefits

Less: valuation allowance$

130,010(2,742)(2,705)(23,232)

47,42546,705

401,742

Other securities

768,659695,354

6,511,303

Depreciation

6,155

6,004

52,147

Land

1,111

1,111

9,419

Reserve for advanced depreciation

502

519

4,256

Reserve for special depreciation

590

678

5,001

Total deferred tax assets
Deferred tax liabilities:

(26)

3,459

(228)

Total deferred tax liabilities

Other

776,992

707,128

6,581,896

Net deferred tax liabilities¥(729,567)¥(660,423)$(6,180,154)

Net deferred tax liabilities consist of the following components on the consolidated balance sheets.
Thousands of
U.S. dollars

Millions of yen

Current assets — deferred tax assets
Investments and other assets — deferred tax assets

2007

2006

2007

¥ 17,924¥ 18,096

7,435

6,842

$

151,835
62,986

Current liabilities — deferred tax liabilities(3,162)(3,857)(26,788)

Long-term liabilities — deferred tax liabilities(751,764)(681,503)(6,368,186)

Net deferred tax liabilities¥(729,567)¥(660,423)$(6,180,154)(2) Reconciliations of differences between the statutory rate of income taxes and the effective rate of income taxes for the years ended
March 31, 2007 and 2006 are as follows:
2007

Statutory rate of income taxes

2006

39.9%

39.9%

Dividends income and others permanently not recognized as taxable income

(5.2)

(5.0)

Other

3.6

0.2

38.3%

35.1%

Addition (reduction) in taxes resulting from:

Effective rate of income taxes

82

Toyota Industries Corporation

Annual Report 2007

17. Leases(1) Finance leases (as a lessee) which do not transfer ownership of leased properties to lessees(a) Pro forma information regarding the leased properties such as acquisition cost and accumulated depreciation, which are not reflectedin the accompanying consolidated balance sheets under finance leases as of March 31, 2007 and 2006 is as follows:
Thousands of
U.S. dollars

Millions of yen

2007

2006

2007

¥14,047¥14,894$118,999

Machinery and equipment:
Acquisition cost equivalents
Accumulated depreciation equivalents
Machinery and equipment net balance equivalents

7,830

7,838

66,335

6,217

7,056

52,665

13,667

13,603

115,777

Tools, furniture and fixtures:
Acquisition cost equivalents
Accumulated depreciation equivalents
Tools, furniture and fixtures net balance equivalents

6,396

6,866

54,184

7,271

6,736

61,593

154

122

1,305

Software:Acquisition cost equivalents
Accumulated depreciation equivalents

77

73

660

76

49

644

¥13,564¥13,842$114,902

Software net balance equivalents
Total net leased properties

Acquisition cost equivalents include the imputed interest expense portion because the percentage which is computed by dividing
future minimum lease payments by total balance of property, plant and equipment at year-end is immaterial.
(b) Pro forma information regarding future minimum lease payments as of March 31, 2007 and 2006 is as follows:
Thousands of
U.S. dollars

Millions of yen

2007

2006

2007

Due within one year

¥ 4,342¥ 4,253$ 36,788

Due after one year

9,221

9,588

78,114¥13,564¥13,842$114,902

Total

The amount equivalent to future minimum lease payments as of the end of the year includes the imputed interest expense portion
because the percentage which is computed by dividing future minimum lease payments by total balance of property, plant andequipment at year-end is immaterial.
(c) Total lease payments for the years ended March 31, 2007, 2006 and 2005 are as follows:
Millions of yen

Thousands of
U.S. dollars

2007¥5,212$44,153

2006

5,235

–

2005

4,926

–

Pro forma depreciation expenses, which are not reflected in the accompanying consolidated statements of income, are computed mainlyby the straight-line method, which assumes zero residual value and leasing term to be useful lives for the years ended March 31, 2007,
2006 and 2005, and are equivalent to the amount of total lease payments of the above.

(2) Operating leases (as a lessee)
Pro forma future lease payments under operating leases as of March 31, 2007 and 2006 are as follows:
Thousands of
U.S. dollars

Millions of yen

Due within one year

2007

2006

2007

¥ 5,068¥ 4,366$ 42,933

Due after one year

18,307

12,272

155,086

Total¥23,376¥16,639$198,019

Toyota Industries Corporation

Annual Report 200783

(3) Finance leases (as a lessor) which do not transfer ownership of leased properties to lessees(a) Information regarding leased properties such as acquisition cost and accumulated depreciation under finance leases as of March 31,
2007 and 2006 is as follows:
Thousands of
U.S. dollars

Millions of yen

Machinery and equipment:
Acquisition cost
Accumulated depreciation
Total net leased property

2007

2006

2007

¥10,013
5,711¥ 4,301¥7,356
4,030¥3,325$84,820
48,385$36,435(b) Pro forma information regarding future minimum lease income as of March 31, 2007 and 2006 is as follows:
Thousands of
U.S. dollars

Millions of yen

Due within one year
Due after one year
Total

2007

2006

2007

¥1,161
5,166¥6,328¥1,256
3,307¥4,563$ 9,842
43,768$53,609

The amount equivalent to future minimum lease income includes the imputed interest income portion because the percentage which iscomputed by dividing future minimum lease income by total balance of property, plant and equipment at year-end is immaterial.
(c) Total lease receipt and depreciation expenses for the years ended March 31, 2007 and 2006 are as follows:
Thousands of
U.S. dollars

Millions of yen

Total lease payments to be received
Depreciation expenses

2007

2006

2007

¥2,4502,391¥1,703
1,602$20,757
20,255(4) Operating leases (as a lessor)
Pro forma information regarding future minimum rentals under operating leases as of March 31, 2007 and 2006 is as follows:
Millions of yen

Due within one year
Due after one year
Total

Thousands of
U.S. dollars

2007

2006

2007

¥14,835
23,639¥38,475¥10,722
21,611¥32,333$125,670
200,252$325,922

18. Changes in net assets(1) Common stock outstanding for the year ended March 31, 2007:
SharesBalance at March 31, 2006
Increase
Decrease
Balance at March 31, 2007

325,840,640––
325,840,640(2) Treasury stock outstanding for the year ended March 31, 2007:
SharesBalance at March 31, 2006
Increase due to purchase of treasury stock in accordance with the resolutions at
Ordinary General Meeting of Shareholders held on June 22, 2006
Increase due to purchase of odd stock
Decrease due to exercise of stock options
Balance at March 31, 200784

Toyota Industries Corporation

Annual Report 2007

6,520,194
8,000,000
16,471(771,500)
13,765,165

(3) Subscription rights to shares outstanding for the year ended March 31, 2007:

The Company

Millions of yen

Thousands of
U.S. dollars¥202$1,719(4) Dividends(a) Dividends paid
Total dividends

Dividends per share

Resolutions

Class of shares

Millions of yen

Thousands of
U.S. dollars

Ordinary General Meeting of
Shareholders held on June 22, 2006

Common stock

6,386

54,09820

0.17

March 31,2006

June 23,
2006

Board of Directors meeting held on
October 31, 2006

Common stock

6,864

58,14922

0.19

September 30,
2006

November 27,
2006

Yen

U.S. dollars

Record date

Effective date(b) Dividends with a record date in the fiscal year under review for which the effective date falls in the following fiscal year
Total dividends
Resolutions

Class of shares

Ordinary General
Common stock
Meeting of Shareholders
held on June 21, 2007

Dividends per share

Millions of yen

Thousands of
U.S. dollars

Source ofdividends

8,738

74,020Retainedearnings

Yen

U.S. dollars

Record date

Effective date

28

0.24

March 31,2007

June 22,2007

19. Subsequent events
1. In January 2006, the Company acquired a 43.1% equity
stake in Wanbishi Archives Co., Ltd. In consideration of the
future growth potential of Wanbishi Archives, Toyota Industries
subsequently acquired all remaining shares in that company froma fund operated by Tokio Marine Capital Co., Ltd. and madeWanbishi Archives a subsidiary.
(1) Outline of Wanbishi Archives Co., Ltd.
(a) Main businesses
Engages in comprehensive information managementbusiness (provides services for safe storage, management,collection and delivery of internal company data, including
crucial documents and magnetic tapes) and insurance
service business.
(b) Capital: ¥4,000 million (as of March 31, 2007)(c) Total number of shares issued: 330,000 shares (as ofMarch 31, 2007)(d) Net sales: ¥19,309 million (year ended March 31, 2007)

2. At a meeting of the Board of Directors held on May 11, 2007,
the board decided that the Company would respond to a tender
offer by DENSO Corporation for shares of Aisan Industry Co.,
Ltd. held by the Company.
Consequently, on June 12, 2007, a report on the results of the
response to the tender was received from DENSO and on June18, 2007, the Company transferred 4,819,000 shares of Aisan
Industry at ¥1,350 per share.
As a result, the Company will post the ¥5,862 million gain on
the sale of investment securities as an extraordinary gain in thefiscal year ending March 2008.
3. On June 21, 2007, the shareholders of the Company
authorized payment of a year-end cash dividend to shareholdersof record as of March 31, 2007 of ¥28 (US$0.24) per share, ora total of ¥8,738 million (US$74,020 thousand). Cash dividends
for the year totaled ¥50 (US$0.42) per share, including an interim
dividend of ¥22 (US$0.18).

(2) Date of stock acquisition: May 25, 2007
(3) Number of shares acquired, acquisition price and percentageof shares held after acquisition(a) Number of shares acquired: 187,000 shares(b) Acquisition price: ¥33,007 million(c) Percentage of shares held after acquisition: 100%

Toyota Industries Corporation

Annual Report 200785

20. Segment information(1) Business segments
As of and for the years ended March 31, 2007, 2006 and 2005:
Thousands of
U.S. dollars

Millions of yen

2007

2006

2005

2007

Sales:
Automobile
Outside customer sales¥ 904,893 ¥ 746,795 ¥ 616,200

Intersegment transactions$ 7,665,345

21,134

20,76818,222

179,027

926,028

767,564

634,4227,844,371

767,237

595,236

503,989

6,499,258

805

482

148

6,823

768,042595,718

504,138

6,506,081

Outside customer sales

89,47065,145–757,908

Intersegment transactions

7,275

6,355

–

61,632

96,746

71,500–819,540

58,40349,78943,902494,735

Materials Handling Equipment
Outside customer sales
Intersegment transactions

Logistics

Textile Machinery
Outside customer sales
Intersegment transactions

5

22

24

50

58,40949,811

43,927494,785

Outside customer sales

58,392

48,98877,446494,641

Intersegment transactions

21,85520,851

21,579185,141

80,24869,83999,025

679,783

1,929,475

1,554,436

1,281,514

16,344,560(51,077)(48,480)

OthersSubtotal
Elimination of intersegment transactions
Total(39,975)(432,674)¥1,878,398 ¥1,505,955 ¥1,241,538$15,911,886¥ 892,435 ¥ 747,468 ¥ 611,659$ 7,559,813

Operating costs and expenses:
Automobile
Materials Handling Equipment

720,840

556,950

478,053

6,106,234

Logistics

94,96569,913–

804,454

Textile Machinery

57,32749,882

44,698

485,621

Others73,92066,107

93,782

626,177(51,046)(48,407)

Elimination of intersegment transactions
Total(39,775)(432,415)¥1,788,443 ¥1,441,915 ¥1,188,418$15,149,883¥$

Operating income (loss):
33,592 ¥20,095 ¥22,763

Materials Handling Equipment

47,201

38,76826,084

399,847

Logistics

1,780

1,587

–

15,085

Textile Machinery

1,081

(70)

(771)

9,164

Others

6,328

3,732

5,243

53,606

(30)

(73)

(200)

(259)

89,954 ¥64,040 ¥53,120Automobile

Elimination of intersegment transactions
Total

86

Toyota Industries Corporation¥

Annual Report 2007$

284,559

762,002

Thousands of
U.S. dollars

Millions of yen

2007

2006

2005

2007

Assets:Automobile¥ 444,564 ¥ 420,204 ¥ 407,435$ 3,765,896

Materials Handling Equipment

593,607509,366

465,8315,028,441

Logistics

132,857

106,356–

1,125,435

Textile Machinery

17,034

16,51625,621

144,299

OthersCorporate assets or elimination
Total

113,156

103,083

148,712958,551

2,284,637

2,089,813

1,279,222

19,353,134¥3,585,857 ¥3,245,341 ¥2,326,824$30,375,755¥$

Depreciation and amortization:
53,557 ¥48,370 ¥37,075Materials Handling Equipment

41,94730,04427,015355,339

Logistics

4,178

3,309

–

35,397

Textile Machinery

1,087

1,010

897

9,216

Others

5,288

4,544

5,215

44,796−

9

8−

Automobile

Corporate or elimination of intersegment transactions
Total¥ 106,060 ¥453,686

87,287 ¥70,213$

898,433$

635,046

Capital expenditures:
74,967 ¥ 101,897 ¥

92,692

Materials Handling Equipment

67,152

43,52033,972568,847

Logistics

5,863

4,046

–

49,671

Textile Machinery

1,472

730

1,612

12,473

Others

17,049

8,620

8,222

144,429

−

20

5

−

¥ 166,505 ¥ 158,835 ¥ 136,506$ 1,410,466

Automobile

Corporate or elimination of intersegment transactions
Total

¥

1. Business segments are divided by the type and nature of the product.
2. Main products of each segment are as follows:
Fiscal 2007
Automobile ...............................................Passenger vehicles, diesel and gasoline engines, car air-conditioning compressors, foundry parts, electronics components
Materials handling equipment ...................Counterbalanced lift trucks, warehouse trucks, automated storage and retrieval systems, truck mount aerial work platforms
Logistics ...................................................Transportation services, collection and delivery of cash and management of sales proceeds
Textile machinery ......................................Air-jet looms, water-jet looms, ring spinning frames
Others ......................................................Semiconductor package substrates
Fiscal 2006
Automobile ...............................................Passenger vehicles, diesel and gasoline engines, car air-conditioning compressors
Materials handling equipment ...................Counterbalanced lift trucks, warehouse trucks, automated storage and retrieval systems, truck mount aerial work platforms
Logistics ...................................................Transportation services, logistics planning, operation of distribution centers, collection and delivery of cash and management of sales proceeds
Textile machinery ......................................Air-jet looms, water-jet looms, ring spinning frames
Others ......................................................Semiconductor package substrates

3. Corporate assets included in corporate assets or elimination consist mainly of cash and cash equivalents, short-term investments andinvestments in securities held by the Company. Corporate assets were ¥2,352,362 million (US$19,926,836 thousand) and ¥2,141,920
million as of March 31, 2007 and 2006, respectively.
Changes in business segment
The logistics-related business, which was included in the Others Segment until fiscal 2005, has been separated and declared independently as the Logistics Segment starting fromfiscal 2006. In fiscal 2005, the Logistics Segment posted net sales of ¥37,913 million, an operating loss of ¥650 million, assets of ¥78,951 million, depreciation and amortization of¥1,323 million and capital expenditures of ¥2,930 million.

Toyota Industries Corporation

Annual Report 200787

(2) Geographical segments
As of and for the years ended March 31, 2007, 2006 and 2005:
Thousands of
U.S. dollars

Millions of yen

2007

2006

2005

2007

Sales:
Japan
Outside customer sales¥1,232,131 ¥ 1,009,368 ¥ 815,039

Intersegment transactions$10,437,372

121,338

112,543

99,464

1,027,857

1,353,470

1,121,912

914,503

11,465,229

Outside customer sales

287,316

246,129

212,253

2,433,856

Intersegment transactions

2,712

2,056

1,125

22,978290,029

248,186

213,379

2,456,835

Outside customer sales

312,051

216,230

188,668

2,643,387

Intersegment transactions

7,152

5,689

7,221

60,587319,204

221,919

195,890

2,703,974

Outside customer sales

46,89734,22725,576397,271

Intersegment transactions

5,573

3,998

2,776

47,212

North America

EuropeOthers52,471

38,22628,352444,483

Subtotal

2,015,175

1,630,243

1,352,126

17,070,521

Elimination of intersegment transactions(136,776)(124,288)(110,588)(1,158,635)¥1,878,398 ¥1,505,955 ¥1,241,538$15,911,886¥1,284,500 ¥1,069,137 ¥ 870,928$10,880,984

Total
Operating costs and expenses:
Japan
North America

284,095

241,467

207,068

2,406,568

Europe307,912217,370

191,2022,608,319

Others49,36436,74327,712

418,167(137,428)(122,804)(108,493)(1,164,155)¥1,788,443 ¥1,441,915 ¥1,188,418$15,149,883¥$

Elimination of intersegment transactions
Total
Operating income (loss):

68,970 ¥52,775 ¥43,575

North America

5,934

6,718

6,311

50,267

Europe11,292

4,548

4,688

95,655

Others

3,106

1,482

639

26,317651(1,484)(2,094)

5,518

89,954 ¥64,040 ¥53,120Japan

Elimination of intersegment transactions
Total

88

Toyota Industries Corporation¥

Annual Report 2007$

584,245762,002

Thousands of
U.S. dollars

Millions of yen

2007

2006

2005

2007

Assets:Japan¥ 887,351 ¥ 834,716 ¥ 788,827$ 7,516,742

North America

196,769

179,116

151,047

1,666,828

Europe337,866

278,825

264,274

2,862,060

Others

66,14848,207

33,639560,347

2,097,722

1,904,475

1,089,034

17,769,779¥3,585,857 ¥3,245,341 ¥2,326,824$30,375,755

Corporate assets or elimination
Total

1. Geographical segments are divided into categories based on their geographical proximity.
2. Significant countries or areas belonging to each segment are as follows:
Fiscal 2007
North America .........................................U.S.A., Canada
Europe ....................................................Sweden, Germany, France
Others .....................................................Australia, China, India
Fiscal 2006
North America .........................................U.S.A., Canada
Europe ....................................................Sweden, France, Germany
Others .....................................................Australia, China, Brazil

3. Corporate assets included in corporate assets or elimination consist mainly of cash and cash equivalents, short-term investments andinvestments in securities held by the Company. Corporate assets are ¥2,352,362 million (US$19,926,836 thousand) and ¥2,141,920
million as of March 31, 2007 and 2006, respectively.

(3) Overseas sales
For the years ended March 31, 2007, 2006 and 2005:
Thousands of
U.S. dollars

Millions of yen

2007

2006

2005

2007

Overseas sales:
North America¥ 287,957 ¥ 247,957 ¥ 208,675$ 2,439,287

Europe347,617249,237

225,4092,944,663

Others156,338

123,751

104,917

1,324,342

Total¥ 791,913 ¥ 620,946 ¥ 539,002$ 6,708,292

Total sales¥1,878,398 ¥1,505,955 ¥1,241,538$15,911,886

Ratio of overseas sales to total sales (%):
North America

15.3%

16.5%

16.8%

Europe

18.5

16.5

18.2

Others

8.4

8.2

8.4

42.2%

41.2%

43.4%

Total

1. Geographical segments are divided into categories based on their geographical proximity.
2. Significant countries or areas belonging to each segment are as follows:
Fiscal 2007
North America .........................................U.S.A., Canada
Europe ....................................................Germany, France, Italy
Others .....................................................China, Australia, Pakistan
Fiscal 2006
North America .........................................U.S.A., Canada
Europe ....................................................Germany, France, Italy
Others .....................................................China, Australia, India

3. Overseas sales are sales of the Company and its consolidated subsidiaries in countries and areas other than Japan.

Toyota Industries Corporation

Annual Report 200789

21. Related party transactions
The following transactions were carried out with related parties:(1) Sales of goods and services for the years ended March 31, 2007, 2006 and 2005 were as follows:
Thousands of
U.S. dollars

Millions of yen

Toyota Motor Corporation

2007

2006

2005

2007

¥665,595¥527,020¥414,235$5,638,250

Toyota Motor Corporation held 24.57% of the Company’s voting rights as of March 31, 2007. The above transactions were carried out
on commercial terms and conditions.
(2) Purchase of goods and services for the years ended March 31, 2007, 2006 and 2005 were as follows:
Purchase of goods:
Thousands of
U.S. dollars

Millions of yen

Toyota Motor Corporation

2007

2006

2005

2007

¥484,336¥370,565¥285,019$4,102,808

Purchase of services:
Thousands of
U.S. dollars

Millions of yen

2007

2006

2005

2007

Toyota Industries Health Insurance Society

¥ 41

¥61

¥59

$ 348

Toyota Medical Corporation

664

45

45

5,629

Toyota Technological Institute

−

50

50

−

Toyota Industries Health Insurance Society’s chairman as of March 31, 2007 is Yutaka Murodono, who is a director of the Company
and holds 0.00% of the Company’s shares. Toyota Industries Health Insurance Society’s chairman as of March 31, 2006 and 2005 was
Shiro Endo, who was a director of the Company and held 0.01% of the Company’s shares. Toyota Medical Corporation’s chairman asof March 31, 2007, 2006 and 2005 is Yoshitoshi Toyoda, who is a director of the Company and holds 0.07% of the Company’s shares
as of March 31, 2007 and previously held 0.06% of the Company’s shares as of March 31, 2006 and 2005. Toyota Technological
Institute’s chairman as of March 31, 2007, 2006 and 2005 was Tatsuro Toyoda, who is a director of the Company and holds 0.08% of
the Company’s shares. The transactions above were carried out based on commercial terms and conditions.
(3) Outstanding balances arising from sale/purchase of goods/services as of March 31, 2007 and 2006 are as follows:
Receivables from a related party:
Millions of yen

Toyota Motor Corporation

Thousands of
U.S. dollars

2007

2006

2007

¥33,859¥32,599$286,820

Payable to a related party:
Millions of yen

Toyota Motor Corporation

90

Toyota Industries Corporation

Annual Report 2007

Thousands of
U.S. dollars

2007

2006

2007

¥48,815¥46,965$413,513

22. Net income per share (EPS)
Bases of calculation for net income per share basic and net income per share diluted are as follows:
Thousands of
U.S. dollars

Millions of yen

2007

2006

2007

¥ 59,468¥ 47,077$503,756

–

432

–

Net income attributable to common shareholders

59,46846,644

503,756

Weighted-average shares (thousand)

313,191

319,125–

Net income per share basic (exact yen amounts) (exact US$ amounts)¥ 189.88¥ 146.16

Net income per share basic:
Net income
Net income not attributable to common shareholders(bonuses for directors and statutory auditors that are paid through appropriation)

$

1.61

$

1.61

Net income per share diluted:
Weighted-average shares for diluted computation (thousand)Net income per share diluted (exact yen amounts) (exact US$ amounts)

362

314

¥ 189.66¥ 146.02–

23. Net assets per share
The basis of calculation for net assets per share is as follows:
Thousands of
U.S. dollars

Millions of yen

2007

2006

2007

Net assets per share:
Total net assets¥1,810,483–$15,336,578

202

–

1,719

58,878–498,761

1,751,401–

14,836,098

312,075–¥ 5,612.11–

Amounts deducted from total net assets
Subscription rights to shares
Minority interests in consolidated subsidiaries
Net assets applicable to common stock at end of year
Outstanding shares of common stock at end of year used
for the computation of net assets per share (thousand)Net assets per share (exact yen amounts) (exact US$ amounts)

Toyota Industries Corporation

$

47.54

Annual Report 200791

Reports of Independent Auditors

Report of Independent Auditors

To the Board of Directors of Toyota Industries Corporation

We have audited the accompanying consolidated balance sheet of Toyota Industries Corporation (“theCompany”) and its subsidiaries as of March 31, 2007, and the related consolidated statements of income,changes in net assets and cash flows for the year then ended, all expressed in Japanese yen. These
consolidated financial statements are the responsibility of the Company’s management. Our responsibility
is to express an opinion on these consolidated financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in Japan. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audit provides a reasonablebasis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the financial position of the Company and its subsidiaries as of March 31, 2007, and the resultsof their operations and their cash flows for the year then ended in conformity with accounting principles
generally accepted in Japan.
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year
ended March 31, 2007, are presented solely for convenience. Our audit also included the translation ofJapanese yen amounts into U.S. dollar amounts and, in our opinion, such translation has been made on
the basis described in Note 1 to the consolidated financial statements.

July 10, 200792

Toyota Industries Corporation

Annual Report 2007

Report of Independent Auditors

To the Board of Directors and Shareholders of
Toyota Industries Corporation

We have audited the accompanying consolidated balance sheets of Toyota Industries Corporation andits consolidated subsidiaries as of March 31, 2005 and 2006, and the related consolidated statements ofincome, shareholders’ equity, and cash flows for each of the three years in the period ended March 31,
2006, all expressed in Japanese Yen. These consolidated financial statements are the responsibility of
the Company’s management. Our responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit
also includes assessing the accounting principles used and significant estimates made by management,
as well as evaluating the overall consolidated financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the consolidated financial position of Toyota Industries Corporation and its consolidated
subsidiaries as of March 31, 2005 and 2006, and the consolidated results of their operations and their
cash flows for each of the three years in the period ended March 31, 2006 in conformity with accounting
principles generally accepted in Japan.
The amounts expressed in U.S. dollars, which are provided solely for the convenience of the reader, havebeen translated on the basis set forth in Note 1 to the accompanying consolidated financial statements.

ChuoAoyama PricewaterhouseCoopers
Nagoya, Japan
June 22, 2006

Toyota Industries Corporation

Annual Report 200793

Toyota Industries in Numbers(Years ended March 31)

Net Sales, Ordinary Income andOrdinary Income Ratio(¥ Billion)
2,000
4.8%

5.1%

5.7%

Millions of yen

5.8%(¥ Billion)
200

5.4%
150

1,000

100

500

50

FY

03

04

05

2004

2005

2006

2007

¥1,069,218¥1,164,378¥1,241,538¥1,505,955¥1,878,398

51,37558,97070,91280,635

108,484

4.8

5.1

5.7

5.4

5.8

Ordinary income

1,500

0

Net sales

2003

06

07

0

Ordinary income ratio (%)

Net sales (left)

Ordinary income (right)

Ordinary income ratio

Depreciation and Amortization

Millions of yen(¥ Billion)
125
100

2003

2004

2005

2006

2007

Depreciation and amortization:¥59,154¥65,351¥70,213¥87,287¥106,060

Automobile Segment

34,15635,79337,07548,37053,557

Materials Handling Equipment Segment

20,80023,53727,01530,04441,947

–

–

–

3,309

4,178

Textile Machinery Segment

1,006

931

897

1,010

1,087

Others Segment (including corporate

3,192

5,090

5,226

4,554

5,288

Logistics Segment

75
50

or elimination)
25
0
FY

03

04

05

06

07

Automobile

Materials Handling Equipment

Logistics

Capital Expenditures

Textile Machinery

OthersMillions of yen(¥ Billion)
200

2003

2004

2005

2006

2007

¥87,559¥89,508¥136,506¥158,835¥166,505

Automobile Segment

49,37948,793

92,692

101,897

74,967

Materials Handling Equipment Segment

24,35032,20433,972

43,52067,152

–

–

–

4,046

5,863

Textile Machinery Segment

2,164

1,203

1,612

730

1,472

Others Segment (including corporate

11,666

7,308

8,230

8,642

17,049

Capital expenditures:

150

Logistics Segment
100

or elimination)

50

0
FY

03

04

05

06

07

Automobile

Materials Handling Equipment

Logistics

R&D Expenses
2003

2004

2005

2006

2007

¥29,705¥29,562¥30,051¥31,166¥34,548

Automobile Segment

18,74715,755

17,214

15,95916,275Materials Handling Equipment Segment

9,297

10,65010,976

12,85415,752

–

–

–

–

–

1,053

1,164

1,029

731

825

608

1,993

832

1,622

1,696

R&D expenses:

30

Logistics Segment
Textile Machinery Segment

20

Others Segment (including corporate
or elimination)

10

FY

94

03

04

OthersMillions of yen(¥ Billion)
40

0

Textile Machinery

05

Toyota Industries Corporation

06

07

Annual Report 2007

Automobile

Materials Handling Equipment

Textile Machinery

OthersNet Sales and Operating Income ofAutomobile Segment(¥ Billion)
1,000

Millions of yen(¥ Billion)
100
75

750

2003

2004

2005

2006

2007

Net sales of Automobile Segment¥595,459¥603,862¥616,200¥746,795¥904,893

Operating income of Automobile

30,107

27,53022,76320,09533,592

Segment
500

50

250

25

0

0

03

FY

04

05

06

07

Net sales (left)

Operating income (right)

Net Sales and Operating Income ofMaterials Handling Equipment Segment

Millions of yen(¥ Billion)
80(¥ Billion)
800

60

600

Net sales of Materials Handling

2003

2004

2005

2006

2007

¥373,007¥443,443¥503,989¥595,236¥767,237

16,174

19,34826,08438,76847,2012003

2004

Equipment Segment
Operating income of Materials

400

40

200

20
0

0

03

FY

04

05

06

07

Handling Equipment Segment

Net sales (left)

Operating income (right)

Net Sales and Operating Income of
Logistics Segment

Millions of yen(¥ Billion)
4(¥ Billion)
100
75

3

2006

2007

Net sales of Logistics Segment

–

–

2005

–

¥65,145¥89,470

Operating income of Logistics

–

–

–

1,587

1,780

Segment
50

2

25

1

0

0

03

FY

04

05

06

07

The logistics-related business, which was included in the Others Segment, had been separated and declared independently as
the Logistics Segment starting from fiscal 2006.

Net sales (left)

Operating income (right)

Net Sales and Operating Income (Loss)of Textile Machinery Segment(¥ Billion)
60(¥ Billion)
6

40

4

Millions of yen

Net sales of Textile Machinery Segment

2003

2004

2005

2006

¥48,740¥45,968¥43,902¥49,789¥58,403

2,308

100

(771)

(70)

1,081

Operating income (loss) of Textile

2007

Machinery Segment
20

2

0

0

(20)
FY

(2)

03

04

05

06

07

Net sales (left)

Operating income (loss) (right)

Net Sales and Operating Income of
Others Segment

Millions of yen(¥ Billion)
8(¥ Billion)
80
60

6

40

4

20

2
0

0
FY

03

04

05

06

07

Net sales of Others Segment

2003

2004

2005

2006

2007

¥52,010¥71,103¥77,446¥48,988¥58,392

3,912

5,750

5,243

3,732

6,328

Operating income of Others Segment

Net sales (left)

Operating income (right)

Note: Segment net sales figures do not include intersegment transactions. However, segment operating income figures do include operating income (loss) arising from intersegment transactions.

Toyota Industries Corporation

Annual Report 200795

Toyota Industries in Numbers(Years ended March 31)

ROE and ROA

%

2003

(%)
6

2004

2005

2006

2007

Return on equity (ROE)

2.7

3.8

4.1

3.5

3.5

Return on assets (ROA)

1.3

1.8

2.0

1.7

1.7

4

2

0
FY

03

04

05

06

ROE

07

ROA

Net Income per Share

Yen

(¥)
200

2003

2004

2005

2006

2007

Net income per share — basic¥70.19¥108.04¥135.09¥146.16¥189.88

Net income per share — diluted

62.90

101.97135.03146.02

189.66

150

100

50

0
FY

03

04

05

06

Basic

07

DilutedInterest-Bearing Debt, Total Net Assets
and Debt/Equity Ratio

Millions of yen(¥ Billion)
2,000

(%)
100

1,500

75

1,000

50

500

25

0
FY

0

03

04

05

06

07

2003

2004

2005

2006

2007

Interest-bearing debt

¥410,621¥ 320,965¥ 383,736¥ 473,707¥ 523,191

Total net assets

738,867

1,016,763

1,115,747

1,611,227

1,810,483

55.6

31.6

34.4

29.4

28.9

Debt/equity ratio (%)

Interest-bearing debt (left)

Total net assets

Debt/equity ratio (right)

Total Net Assets per Share

Yen

(¥)
6,000

Total net assets per share

4,000

2,000

0
FY

96

03

04

05

Toyota Industries Corporation

06

07

Annual Report 2007

2003

2004

2005

2006

2007

¥2,522.52¥3,199.69¥3,504.80¥5,044.45¥5,612.11

Cash Dividends per Share andConsolidated Payout Ratio

Yen

(¥)
50

(%)
50

Cash dividends per share
Payout ratio (%)

40

40

30

30

20

20

10

10

0

03

FY

04

05

06

2003

2004

2005

2006

2007

¥22.00¥24.00¥32.00¥38.00¥50.00

31.3

22.2

23.7

26.0

26.3

0

07

Cash dividends per share (left)

Payout ratio (right)

Market Capitalization

Millions of yen(¥ Billion)
2,000

Market capitalization

2003

2004

2005

2006

2007

¥513,824¥786,223¥961,075¥1,535,931¥1,741,381

2006

2007

1,500

1,000

500

0
FY

03

04

05

06

07

PER and PBR

Times(Times)1.0(Times)
40

30

0.75

20

0.5

10

0.25

0
FY

0

03

04

05

06

07

2003

2004

2005

Price/earnings ratio (PER)

25.0

22.9

22.4

32.9

29.4

Price/book value ratio (PBR)

0.7

0.8

0.9

1.0

1.0

PER (left)

PBR (right)

Number of Employees

Persons(Thousands)
40

Number of employees

2003

2004

2005

2006

2007

25,03027,43130,99032,97736,096

30

20

10

0
FY

03

04

05

06

07

Toyota Industries Corporation

Annual Report 2007

97

Investor Information(As of March 31, 2007)

Corporate Head Office

Number of Shareholders

TOYOTA INDUSTRIES CORPORATION

19,4742-1, Toyoda-cho, Kariya-shi, Aichi-ken, 448-8671, Japan
Telephone: +81-(0)566-22-2511

Independent Accountants

Facsimile:

PricewaterhouseCoopers Aarata+81-(0)566-27-5650

JR Central Towers 33rd Floor, 1-1-4, Meieki, Nakamura-ku,

Date of Establishment

Nagoya-shi, Aichi-ken, 450-6033, Japan

November 18, 1926

Transfer Agent
Common Stock

Mitsubishi UFJ Trust and Banking Corporation

No par value

1-4-5, Marunouchi, Chiyoda-ku, Tokyo-to, 100-8212, Japan

Authorized: 1,100,000,000 shares
Issued:Telephone: +81-(0)3-3212-1211

325,840,640 shares

Stock Exchange Listings
Tokyo, Osaka and Nagoya (Ticker Code: 6201)

Major Shareholders (Top 10) (As of March 31, 2007)

98

Distribution of Shares

Toyota Motor Corporation

76,600 (Thousands of shares)

DENSO Corporation

29,647

Towa Real Estate Co., Ltd.

15,697

Third Avenue Fund-Custodial Trust Company

14,747The Master Trust Bank of Japan, Ltd.

10,887

Toyota Tsusho Corporation

8,289

Nippon Life Insurance Company

6,735

HSBC Bank PLC-Clients Nontax Treaty

6,655

Aisin Seiki Co., Ltd.

6,578

State Street Bank and Trust Company

6,401

Toyota Industries Corporation

Annual Report 2007

0.5%

11.6%

20.8%

As of
March 31,
2007

46.0%

21.1%

Other corporate entities
Financial institutions
Foreign corporate entities and others
Individuals, etc.
Brokerages

Common Stock Price and Trading Volume(Tokyo Stock Exchange)
Stock price

(¥)

7,000

6,000

5,000
High
Low
4,000

3,000

2,000

1,000

0

Trading Volume(thousand shares)

30,00025,00020,00015,00010,0005,000

0FY 2003

FY 2004

FY 2005

FY 2006

FY 2007High¥2,165¥2,530¥3,180¥4,850¥6,160

Low

1,725

1,686

2,235

2,780

3,980

At Year-End

1,755

2,475

3,020

4,810

5,580

Toyota Industries Corporation

Annual Report 200799

2-1, Toyoda-cho, Kariya-shi, Aichi-ken 448-8671, Japan
Telephone: +81-(0)566-22-2511 Facsimile: +81-(0)566-27-5650
www.toyota-industries.com

This annual report is printed on recycled paper using soy ink
to minimize the impact on the environment.
Printed in Japan