This annual report is printed on officiallycertified recycled and Kenaf paper (100%tree-free paper) using soy ink to minimize
the impact on the environment.

PROFILE
Effective August 1, 2001, Toyoda Automatic Loom Works, Ltd. changed its name to
Toyota Industries Corporation.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2001

The present Toyota Industries Corporation (“Toyota Industries”) was founded byrenowned Japanese inventor Sakichi Toyoda in 1926 to manufacture automatic looms.
The enterprise proceeded over the years to diversify into such fields as automobiles,
industrial equipment, and electronics. Among the most prominent achievements in the
75-year history of Toyota Industries is its role in the establishment of Toyota Motor
Corporation, whose birth resulted from a spin-off of Toyota Industries’ vehicle division.
Today, the business universe of Toyota Industries consists of four segments:
Automobile, Materials Handling Equipment, Textile Machinery and Others (electronics,etc.). All these segments are building a firm footing in their respective fields. In line with
its strategy of globalization, Toyota Industries now has production facilities in Europe,
North America and other regions.
The technological prowess of Toyota Industries rests on two bases. The first is thewealth of technologies accumulated in the development and manufacture of automatic
looms. The second is its incessant drive to innovate. These inherited technologicalstrengths are particularly marked in the Automobile and Materials Handling Equipment
Segments, the mainstays of Toyota Industries’ current operations. With its car assemblyand engine businesses as a solid base, Toyota Industries intends to enhance its
operations in such fields as car air-conditioning compressors and materials handlingequipment in terms of both output and profitability. Looking to the future, Toyota
Industries is venturing into the new field of next-generation LCDs. In so doing it willreinforce its position as a core member of the Toyota Group.
Cautionary Statement with Respect to Forward-Looking Statements
This annual report contains forward-looking statements that are based on Toyota Industries’ and its Group companies’
current expectations, estimates and projections regarding plans, outlook, strategies and results for the future. All suchstatements are based on management’s assumptions and beliefs derived from the information available to it at the timeof publication of this annual report. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,”“estimates,” “may,” “will,” and variations of these words or similar expressions are intended to identify forward-looking
statements. In addition, any statements that refer to expectations, projections or other characterizations of future eventsor circumstances, including any underlying assumptions, are forward-looking statements. These forward-looking
statements speak only as of the date of this annual report. Such information is subject to change, and Toyota Industries
and its Group companies will not necessarily inform you of such changes. These statements are not guarantees of future
performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Certain risks anduncertainties could cause the actual results of Toyota Industries and its Group companies to differ materially from any
forward-looking statements presented in this annual report. These risks and uncertainties include, but are not limited to:i) domestic and overseas economic conditions, particularly levels of consumer spending and private capital
expenditure;ii) related laws and regulations;iii) currency exchange rate fluctuations, notably involving yen, U.S. dollars, Asian currencies and euro, the currencies inwhich Toyota Industries and its Group companies operate in their international business;iv) fluctuations in market prices of securities in which Toyota Industries and its Group companies have substantial
holdings;v) Toyota Industries’ and its Group companies’ ability to maintain their strength in many product development andgeographical areas, through such means as new product development and introductions, in highly competitivemarkets characterized by continued new product introductions, rapid development in technology and fluctuation indemand, pertinent to the industry to which Toyota Industries and its Group companies belong; andvi) effect of natural disasters.

Financial Highlights
Toyota Industries Corporation
Years ended March 31, 2001 and 2000

Thousands of
U.S. dollars

Millions of yen

2001

2000

% change2001$ 6,193,567

FOR THE YEAR
¥ 767,383¥625,773

22.6 %

Operating income

47,304

28,86763.9

381,792

Net income

22,637

13,68665.4

182,704

Depreciation and amortization

46,45442,752

8.7

374,931

Capital expenditures

127,273

44,746184.4

1,027,224

Research and development expenses

26,19624,0628.9

211,429

Net income — basic

75.90

48.32

57.1

0.61

Net income — diluted

67.77

43.18

56.9

0.55

Cash dividends

17.00

16.00

6.3

0.14

¥1,869,642¥685,914

172.6 %

$15,089,927

951,298

316,293200.8

7,677,950

Net sales

Per share of common stock (in yen or U.S. dollars):

Total assets
Shareholders’ equity

Note: U.S. dollar amounts have been translated from yen, for convenience only, at the rate of ¥123.90 = U.S.$1, the exchange rate on March 30, 2001.

Net Income

Total Assets

Shareholders’ Equity(¥ Billion)(¥ Billion)(¥ Billion)(¥ Billion)

800

25

2,000

1,000

20

800
1,500

600
15

600

400

1,000
400

10

200

500
200

5

0
FY

ANNUAL REPORT 2001

Net Sales

97 98 99 00 01

0
FY

97 98 99 00 01

0
FY

97 98 99 00 01

0
FY

97 98 99 00 01

Contents
Financial Highlights …………………………………………… 1
At a Glance ……………………………………………………… 2
To Our Shareholders ……….............………………………… 4
Toyota Industries in Focus …………………………………… 11
Review of Operations ………………………………………… 32
Consolidated Five-Year Summary …………………………… 35
Management’s Discussion and Analysis ofFinancial Condition and Results of Operations …………… 36
Consolidated Balance Sheets ………………………………… 44
Consolidated Statements of Income ………………………… 46

TOYOTA INDUSTRIES CORPORATIONAT YEAR-END

1

Consolidated Statements of Shareholders’ Equity ………… 47
Consolidated Statements of Cash Flows …………………… 48
Notes to Consolidated Financial Statements ……………… 49
Report of Independent Accountants ……..........…………… 68
Toyota Industries Close-up ………………………………… 69
Major Developments in Toyota Industries’ History ………… 82
Corporate Organization ……………………………………… 84
Directors and Corporate Auditors …………………………… 85
Corporate Data ……………………………………………… 86
Investor Information ………………………………………… 88

At a Glance
Toyota Industries is switching its focus from the Textile
Machinery Segment, the business field upon which thecompany was founded, to more diverse sectors andaggressively establishing its presence in each of them. These
include the Automobile Segment, which comprises the vehicle(automobile assembly), engine and car air-conditioning
compressor businesses, and the Materials Handling Equipment
Segment, which specializes in forklift trucks and othermaterials handling equipment. Toyota Industries’ electronics
business is involved in the production of next-generation
devices such as LCDs. Essentially, Toyota Industries is aconglomerate focused on selective core businesses. We
enhance the value of the company as a whole by seeking
synergies among the key technologies and markets cultivatedby each business division.

Automobile Segment

2
TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2001

The Automobile Segment, consisting of automobile
assembly for Toyota Motor Corporation (“TMC”), engines,
car air-conditioning compressors and electronic
components for automobiles, accounts for 59.6% of Toyota
Industries’ consolidated net sales.
In fiscal 2001, our automobile assembly businessproduced two models, the Vitz (Yaris in Europe) and theSprinter Carib (Corolla Wagon overseas). The Vitz (Yaris) isvery popular in both the Japanese and European markets.
We produce more than ten types of engines, including
the mainstay C-type diesel engines and the Y-type gasoline
engines.
Our car air-conditioning compressor business develops
and produces various types of compressors, including
swash plate compressors with fixed displacement, one-way
swash plate compressors with continuous variabledisplacement, scroll-type compressors and vane-type
compressors. We supply these products to the world’s
major car manufacturers.
In fiscal 2001, the Automobile Segment recorded net
sales of ¥457.6 billion and operating income of ¥28.5
billion.

Vitz (Yaris)
1CD Diesel Engine

6SEU12 Compressor
Business/Operation

Products

VehiclePassenger vehicles

EngineDiesel engines
Gasoline engines, etc.

Car Air-Conditioning
Compressor

Car air-conditioning compressors, etc.

OthersElectronic equipment for automobiles
Foundry parts for automobiles, etc.

Materials Handling Equipment Segment
The Materials Handling Equipment Segment comprises theindustrial vehicle and materials handling systembusinesses. The former includes forklift trucks, and thelatter automated storage and retrieval systems, andautomatic guided vehicle systems. The core products of
the industrial vehicle business are the internal-combustion
counterbalanced forklift truck GENEO (7-Series
overseas) and the electric counterbalanced forklift
GENEO-B (7FB)
REFLEX (Reach Truck)
Rack Sorter P
truck GENEO-B (7FB overseas). In June 2000, Toyota(Automated Storageand Retrieval System –Industries acquired BT Industries AB (“BT Industries”),
Pallet Type)a leading Swedish warehouse truck company, with a view
to further expanding its materials handling equipment
Business/Operation
Products
business. In fiscal 2001, industrial vehicle business sales
Industrial Vehicle
Counterbalanced forklift trucks
accounted for approximately 97% of the total sales of thisWarehouse trucks, etc.
segment.
Automated storage and retrieval systems
Materials HandlingIn fiscal 2001, we increased our world market share of
SystemAutomatic guided vehicle systems, etc.
this business, recording total net sales of ¥236.5 billion andoperating income of ¥14.5 billion.

Percentage of Net Sales
Others: 5.3%

Textile Machinery: 4.3%
Materials Handling Equipment: 30.8%

Automobile: 59.6%

3

Textile Machinery Segment

RX240 Ring Spinning Frame

JAT610 Air-Jet Loom
Products

Business/Operation
Spinning Machinery

Ring spinning frames
Roving frames
Drawing frames, etc.
Air-jet looms

ANNUAL REPORT 2001

Weaving Machinery

Water-jet looms
Sizing machines, etc.

Others Segment
The Others Segment comprises businesses that we enteredcomparatively recently, notably electronics components,
together with press dies. Although our operations in thesefields are still relatively small, we expect them to growquickly and become a key pillar of our business.
ST Liquid Crystal Display Corp. (“ST-LCD”)*, a 50-50
joint venture with Sony Corporation, forms the core of thisnew business sphere. In April 1999, ST-LCD began
production of low-temperature polysilicon thin filmtransistor liquid crystal displays (“poly-Si TFT LCDs”), anext-generation LCD. TIBC Corporation (“TIBC”), a joint
venture with Ibiden Co., Ltd. formed in October 1998,
began production of plastic package substrates for IC
chipsets in April 1999.
In fiscal 2001, the Others Segment recorded operating
income of ¥4.4 billion on total net sales of ¥40.0 billion.
*As ST-LCD is an affiliate, its sales and operating income are not included in
the consolidated figures, but are accounted for by the equity method.

TFT LCDs
Business/Operation

Plastic Package Substrates
Products

ST Liquid Crystal
Display Corp.

Low-temperature polysilicon TFT LCDs

TIBC Corporation

Ball grid array (BGA)-type plastic package substrates
for IC chipsets
Flexible printed circuit (FPC)-type substrates for IC cards

OthersPress dies, etc.

TOYOTA INDUSTRIES CORPORATIONThe Textile Machinery Segment consists of the spinningmachinery and weaving machinery businesses. In fiscal
2001, sales were boosted by buoyant demand in Asia,
our main market. Sales of the JAT610 air-jet loom
continued strong. Increased sales and a streamlining ofour business structure improved operating income
substantially.
In fiscal 2001, the Textile Machinery Segment
recorded an operating income of ¥35 million on total
net sales of ¥33.2 billion.

To Our Shareholders

4
TOYOTA INDUSTRIES CORPORATION

Akira Yokoi

Tadashi Ishikawa

ChairmanPresident

ANNUAL REPORT 2001

On June 28, 2001, the Ordinary General Meeting of Shareholders approved a motion tochange the name of the company. As a result, effective August 1, 2001, the English name of thecompany became Toyota Industries Corporation (“Toyota Industries”). Among the chief reasonsfor the change were our acquisition in June 2000 of BT Industries AB (“BT Industries”) and ourabsorption in April 2001 of the industrial equipment sales division of Toyota Motor Corporation(“TMC”). These businesses now fall within the compass of our Materials Handling Equipment
Segment. Also, it was felt that our corporate name should more accurately reflect the range of ourbusiness domain, which now stretches far beyond the manufacture of automatic looms.
Mr. Chisei Isogai, Chairman, decided that the company’s 75th anniversary year was an
appropriate time for him to retire. At a board meeting held immediately after the Ordinary
General Meeting of Shareholders on June 28, 2001, Mr. Akira Yokoi, Vice Chairman, was elected tothe post of Chairman as Mr. Isogai’s successor. Mr. Tadashi Ishikawa, President, continues in his
position. The position of Vice Chairman has not yet been filled. There were also changes inmanagement positions below the rank of Vice President effective June 28, 2001 as well.
All members of the new leadership team are determined to enhance the international
competitiveness of Toyota Industries and to manage successfully the continuing diversification of
the company.

BEST EVER PERFORMANCE
We are pleased to present the consolidated businessof our business segments and executing a series ofresults of Toyota Industries Corporation for the fiscal

vigorous cost reduction measures.

year ended March 31, 2001 (“fiscal 2001”). Fiscal 2001
was another year of strong performance for Toyota
Industries and its consolidated subsidiaries. We areconfident that we will maintain the momentum of thissuccess in the years to come.

Automobile Segment
This segment includes automobile assembly, engines,
car air-conditioning compressors, and electronicequipment for automobiles.
Net sales amounted to ¥457.6 billion (US$3,693.6
million), up 8.1% over the previous fiscal year. Operating
income was ¥28.5 billion (US$230.2 million), up 16.8%.

Net sales, operating income, net income, and net income

This increase in segment sales was largely owing to

per share for fiscal 2001 (ended March 31, 2001) all

increased sales of car air-conditioning compressors inreached record highs. Net sales and net income showed

North America and Europe, strong Vitz (Yaris) small cara two-digit percentage improvement over fiscal 2000

sales and an increase in the number of models in our(ended March 31, 2000).

engine range.

For fiscal 2001, Toyota Industries posted net income

Materials Handling Equipment Segment¥767.4 billion (US$6,193.6 million), up 65.4% and 22.6%,

This segment covers operations relating to automatic

respectively, over the corresponding figures for theguided vehicle systems, automated storage and retrieval

previous fiscal year. Operating income was ¥47.3 billion

systems, warehouse trucks, and forklift trucks. The(US$381.8 million), an increase of 63.9%. Net income per

operations of BT Industries, which Toyota Industries

share was ¥75.90 (US$0.61), compared with ¥48.32 foracquired in June 2000, now come under the wing of thisthe previous fiscal year.

segment.

Our record results were all the more remarkable

Sales were strong in Europe, the U.S., and Japan. Net

given that the business environment was hardly

sales amounted to ¥236.5 billion (US$1,908.8 million), up

favorable. The Japanese economy showed some signs of

58.6% over the previous fiscal year. Operating income wasrecovery during the first half of fiscal 2001, but in the¥14.5 billion (US$117.4 million), up 153.0%.

second half growth returned to anemic levels and ageneral downturn in confidence was reflected in a sharp

Textile Machinery Segment

fall on the stock market. The U.S. economy began toThis segment comprises spinning machinery and weaving

falter and, although the European and Asian economies

machinery businesses. The former includes thegenerally held firm, the prospect of a serious contraction

manufacture of ring spinning and roving frames, etc., whilein the U.S. cast a shadow over both.

the latter includes air-jet looms, water-jet looms, sizing

Our excellent business performance in an adverse
business climate testified to our success inmachines, and others.
Net sales amounted to ¥33.2 billion (US$268.3 million),

implementing a sound, clearly defined strategy,

up 43.7% over the previous fiscal year. Operating income

exploiting the particular competitive strengths of each

improved from an operating loss of ¥2.97 billion the

ANNUAL REPORT 2001of ¥22.6 billion (US$182.7 million) on net sales of

5
TOYOTA INDUSTRIES CORPORATION

Financial Resultsfor Fiscal 2001

Results by Segment

To Our Shareholders

previous fiscal year to operating income of ¥35 million(US$0.28 million) in fiscal 2001.
These results reflect the success of vigorous sales

In June 2000, Toyota Industries acquired theSwedish company BT Industries, a global leader in the
production of warehouse trucks. Toyota Industries had

activities, particularly in Southeast Asia, andspecialized in counterbalanced forklift trucks. The

improvements in management efficiency throughacquisition therefore made very good sense in terms ofrestructuring.

product mix and Toyota Industries now offers acomprehensive lineup of materials handling equipment.

6

Others Segment

In April 2001, Toyota Industries absorbed the

TOYOTA INDUSTRIES CORPORATIONThis segment includes electronic components, press

industrial equipment sales division of TMC, which had

dies, and others. It incorporates TIBC Corporation

been responsible for the sales and marketing of(“TIBC”), a joint venture with Ibiden Co., Ltd. that

equipment developed and manufactured by Toyota

mainly manufactures ball grid array (BGA)-type plastic

Industries. Whatever a customer’s needs and location,

package substrates for application in high-function IC

we are now ready to offer a comprehensive materials

chipsets.

handling solution.

Net sales of this segment amounted to ¥40.0 billion(US$322.9 million), up 32.8% over the previous fiscal

Cost Reduction

year. Operating income was ¥4.4 billion (US$35.2

During fiscal 2001, we sought substantial reductions inmillion), up 480.5%.

operating and other costs to ensure that we would be

ANNUAL REPORT 2001

Sales of ST Liquid Crystal Display Corp. (“ST-LCD”), a
50-50 joint venture with Sony Corporation, are notincluded in the consolidated figures, but are accounted

in good shape to meet the intensifying competition
across our business universe.
A special project team in each business division

for by the equity method. ST-LCD began theemploys advanced cost management techniques,manufacture of low-temperature polysilicon thin film

including value engineering (VE) at the development

transistor liquid crystal displays (“poly-Si TFT LCDs”) instage and value analysis (VA). We have also raised

April 1999. Sales have since expanded rapidly, in line

awareness among all employees of the need to reducewith ST-LCD’s business plan, and losses recorded by the

expenses, and have curtailed fixed costs at the headequity method have greatly decreased.

office. In addition, using the power of information
technology (IT), we have begun to improve theAchievements in Fiscal 2001

productivity of non-manufacturing divisions based on areview of basic business procedures.

M&A and Business Integration
Toyota Industries aims to secure a position of global
leadership for its materials handling equipment
business, one of our core business segments. During theperiod under review, we took two important steps
toward achieving this goal.

The development department of our Vehicle
Division has been introducing the V-Comm (virtual &visual communication system) and CAE (computeraided engineering) systems, which were used toreduce the development period of the bB Open Deck,
TOYOTA’s bB-based new compact car, designed andmanufactured by our Vehicle Division, and launchedby TMC in June 2001.

In April 2001, we began a three-year cost reduction

compact, internally controlled compressor with one-

program that will build on the progress made in fiscal

way swash plate and continuous variable displacement.

2001. Each project team will reinforce VE and VA

In August 2000, we began production of the 2UZ

activities in order to achieve an even higher level ofengine at our Hekinan Plant. This 4700cc V-8 gasoline

overall efficiency. Measures to be taken include

engine powers the Lexus LX470, an SUV model

optimized global procurement of materials andmarketed by TMC in the United States.
In April 2000, our Textile Machinery Segment

management. If these steps bear fruit, our profit

launched the Internet TTCS (Toyoda Total Computer

structure will further improve.

System), an Internet-compatible textile-production
control system. TTCS can access weaving machines in

New Products

mills throughout the world via the Internet and monitor

During fiscal 2001, we continued to develop,

production, stoppages, machinery condition, productmanufacture, and market new products that are fully inquality, etc. The scope for improvements in efficiency

tune with the needs of our customers. We are confident

using TTCS is substantial.

that a number of our recently launched products willcapacity of one to three tons, depending on the model.

In April 2001, Toyota Industries absorbed the industrial

The GENEO-R is the first reach truck to employ ourequipment sales division of TMC. Following that move,state-of-the-art “System of Active Stability (SAS)” lift truck

Toyota Industries created a comprehensive entity,

safety technology, standard in other models in the

TOYOTA Material Handling Company, as a uniquely

GENEO series (7-Series overseas) and designed toindependent company within the larger company.

reduce the risk of tip-over. Conventional reach trucks

TOYOTA Material Handling Company assumed all theare associated with instability on slippery surfaces andbusiness of the former Industrial Vehicle Division andwhen turning, but the SAS technology counteracts thisMaterials Handling System Division as well as the

drawback. Equipped with a dedicated AC drive systembusiness transferred from TMC. TOYOTA Material

for lift trucks, the GENEO-R also offers ease of operation

Handling Company has its own highly autonomousand maintenance.

management and will be evaluated on such criteria as

In January 2001, we launched the GENEO-R reachtruck, which is exclusively for the Japanese market. The

In fiscal 2001, we launched two types of car air-

return on assets and cash flows, as well as by levels ofconditioning compressors for the European market.

sales and operating income. This strategic move will

The 5SE09, a compact, lightweight compressor withensure that Toyota Industries remains responsive to

one-way swash plate and continuous variablechanges in customer demand and is thus able to achievedisplacement, offers excellent fuel efficiency andhigher sales and earnings in what is an intensively

acceleration by controlling displacement via sensors

competitive sector.

that monitor the operating environment. The 5SL12 is a

ANNUAL REPORT 2001

GENEO-R is an advanced electric reach truck with a

New “In-House Company” Combines
Development and Manufacturing
Expertise with Sales and Marketing
Strength

become mainstays of Toyota Industries’ lineup.

7
TOYOTA INDUSTRIES CORPORATION

components, plus the introduction of supply chain

To Our Shareholders

The Next Step – Medium-Term
Strategy for Growth
Toyota Industries’ management is keenly aware of theimportance of planning for medium- and long-term
growth. In mid-May 2001, we launched our medium-8

term strategy for growth, which targets consolidated
sales of more than ¥1 trillion and income before income

TOYOTA INDUSTRIES CORPORATION

taxes of ¥80 billion by March 2006. Key elements of theplan are outlined below.
Tadashi Ishikawa
President

ANNUAL REPORT 2001

Securing Global Leadership in the
Materials Handling Equipment and Car
Air-Conditioning Compressor Fields

We intend to introduce our manufacturing technique,

Toyota Industries is determined to achieve global

purchase components jointly with them, and toleadership among manufacturers of forklift trucks andpromote the exchange of technology. Toyota Industries

other industrial equipment. Steps already taken to

and BT Industries will adopt a global perspective, forachieve that goal include the acquisition of BT

example in monitoring changes in demand, in order toIndustries and the transfer of TMC’s industrial

maximize customer satisfaction.

equipment sales division to our company.
Before the acquisitions, sales activities directed at

the Toyota Production System (TPS), to BT Industries, toTo maintain our leading international position in the
car air-conditioning compressor manufacturing field, we

end-users were mainly the domain of the Textile

established TD Deutsche Klimakompressor GmbH

Machinery Segment. Accompanying the consolidation(“TDDK”) as a joint venture with DENSO Corporation.

of manufacturing and sales operations within the

In April 2000, TDDK began operations at its factory inMaterials Handling Equipment Segment, we must now

Sachsen, Germany. We now manufacture car air-assume full-fledged sales and marketing activities for a

conditioning compressors in Japan, the U.S. and Europe.

much broader product range. BT Industries has aThis tri-polar system allows us to stay close to

wealth of direct sales experience and we intend to

customers, meet their needs more precisely and reducedraw on that know-how. In particular, we are eager toexchange rate risks.

adopt more widely BT Industries’ solution-proposal
sales technique.
In addition to enhanced marketing, we expect that
our acquisition of BT Industries will bring otherbenefits of synergy. We have started to supply

The proportion of cars in Europe fitted with airconditioning is expected to rise and we aim to makethe most of that opportunity. We shall also seek toincrease sales in the North American market.
In summary, the Materials Handling Equipment

counterbalanced forklift trucks to BT Industries on an

Segment and the car air-conditioning compressor

OEM basis. We are also distributing BT Industries’ handbusiness are core operations, and we shall devote thepallet trucks on an OEM basis in Japan. These

necessary resources to them to ensure their success on

exchanges will be broadened to include other products.

a global basis.

Further Cost Reduction andEnhanced Manufacturing Quality inthe Vehicle and Engine Businesses

The opportunities in this field are enormous.

The vehicle (automobile assembly) and engine businesses

products that have considerable growth potential.

provide stable revenues for our Automobile Segment. In

In April 1999, ST-LCD, the core of our electronics
operations, began the manufacture of poly-Si TFT LCDs,
As a result of using the TPS, ST-LCD’s quality levels

the medium term, we aim to improve cost management

and production volume have improved rapidly andand so maintain profitability in these fields.

output is close to maximum capacity, as forecast in our

Our vehicle business, one of the manufacturing bases

business plan.
In the fall of 2001, ST-LCD will begin a ¥75 billion

enhance the attractiveness of TOYOTA-brand cars bycapital investment program for additional production

further improving product quality and cost efficiency,

facilities in order to meet rising demand expected formaking proposals for the design and launch of new

digital camera, mobile phone, and personal digitalcompact and other cars and improving production

assistant (PDA) parts. ST-LCD’s new facilities, due totechnology.

start operations in June 2002, will double production

In the engine business, we work constantly tocapacity. We envisage ST-LCD as one of our coreenhance the environment-friendly features of our engines

businesses and intend to distribute management

without compromising their performance, and toresources accordingly.

contribute to the improvement in overall performance of
Our vehicle and engine businesses are dedicatedHarnessing the Power ofInformation Technology

mainly to production for TMC. Our production is

Making the most of the remarkable advances in IT is atherefore dependent on TMC’s production and ordering

key part of our medium-term plan. The Internet, PCs,

plans. We seek to strengthen our sales link to TMC

mobile communications and so on are already having athrough ceaseless quality enhancement and cost-downhuge influence on corporate activity, and this influence

activities. Our goal is that TMC will entrust us with thewill continue to grow rapidly. Utilizing IT, we areassembly of, and employ our engines in, a wider range

overhauling our traditional way of doing business toof models.

achieve speedier management processes, reduction in

We are also strengthening our research andfixed costs and increased customer satisfaction. To

development capabilities to play a more active part in

date, improvement is most manifest in shorter productproduct development for TOYOTA vehicles and engines.

development lead times and enhanced productivity

In our vehicle and engine businesses, we aim to securestable profits and cash flows through an efficient
production system.

among non-manufacturing divisions.
Over the next three years, we will invest ¥20.5
billion in IT on a non-consolidated base. We will makea thorough review of our business processes and, at

Successful LCD Operations –the Core of Our Electronics Businessthe same time, upgrade the key systems for

We intend that our electronics operations, which are now

management. We will also install three-dimensional

comparatively small, will play an important part in our

CAD systems in our development departments tofuture growth and will serve to diversify our business.

achieve improved productivity company-wide.

accounting, procurement, and production

ANNUAL REPORT 2001

TOYOTA-brand cars.

9
TOYOTA INDUSTRIES CORPORATIONof the Toyota Group’s compact cars, strives constantly toTo Our Shareholders

10

Creating an Inter-Divisional
Value Chainsought to act on its corporate principles, such as

Throughout our long history, we have constantly

contributing to local communities, undertaking

pushed forward with technological innovation,

extensive research and development, and serving its

explored new markets, and achieved substantial growthshareholders and customers wholeheartedly.

Since its founding, Toyota Industries has always

TOYOTA INDUSTRIES CORPORATION

for each of our businesses. Toyota Industries has

In November 2001, we celebrate our 75th

become a conglomerate with a number of divisions,anniversary. As noted above, in August 2001 weeach of which possesses core technologies and markets.

changed our company name in English to Toyota

By transcending the divisional boundaries, we are

Industries Corporation. In part, this change is designed

taking advantage of these assets to develop

to refresh our spirits and remind us of our core aims.

technologies which will be the basis for the next

Toyota Industries will seek to serve all its

generation of business sectors, markets, and products.

stakeholders, including shareholders, customers,

This inter-divisional value chain, when implemented

employees, suppliers, and local communities. We hopeefficiently, will enhance the value of the company as athat this annual report helps our stakeholders towhole and offer great opportunities for expanded

understand more fully our current activities, financial

business operations.

status, and future prospects. In all our futureendeavors, we respectfully request your continued

ANNUAL REPORT 2001

Maximizing
Shareholder Valuesupport.
August 1, 2001

The basic goal of Toyota Industries is to make profits
and thus enhance shareholder value. To this end, we
will pursue our short- and medium-term strategies
consistently and vigorously.
Effective August 1, 2001, we changed the minimum

Akira Yokoi
Chairmantrading unit of our shares from 1,000 to 100 in orderto promote more active trading of our shares,
particularly among individual investors.
We are also enthusiastically promoting
environmental and community activities to fulfill our
responsibilities as a good corporate citizen.

Note: U.S. dollar amounts have been translated from yen, for convenience only,at the rate of ¥123.90 = US$1, the exchange rate on March 30, 2001.

Tadashi Ishikawa
PresidentToyota Industries in Focus

11
TOYOTA INDUSTRIES CORPORATION

Focus 1: BT Industries AB
Focus 2: Establishment of TOYOTA Material Handling Company
Focus 3: Car Air-Conditioning Compressor Business– Establishing a Global Presence
Focus 4: Electronics Business for New Frontiers
Focus 5: Change of Company Name
Focus 6: Introduction of New Personnel System
Focus 7: Corporate Governance
Focus 8: Caring for the Environment

ANNUAL REPORT 2001

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BT Industries AB
12

In June 2000, Toyota Industries acquired BT Industries AB (“BT Industries”), one of the world’s
leading materials handling equipment manufacturers. BT Industries will remain a separate
entity within Toyota Industries Group.

TOYOTA INDUSTRIES CORPORATION

A Road to the Future:
A Message from Dr. Carl-Erik Ridderstråle, President and CEO of BT Industries AB
For BT Industries, the year 2000 was perhaps the mostimportant ever. Together with Toyota Industries, wecreated a global leader in the field of forklift trucks
and started a journey into a promising future.
Against that backdrop, I would like to take this

ANNUAL REPORT 2001

opportunity to explain the heart of BT Industries’
business concept.
On the surface, our business revolves aroundwarehouse trucks, i.e., electric trucks purposely
designed and built for indoor materials handling. At
the center of our business concept, however, lies avibrant and wider customer-focused theme: To offer
our customers trouble-free materials handling.
Lift trucks in a warehouse are a lot like copiers in
an office. They have to be accessible, easy to use andalways work. A customer shouldn’t have to think
about service or repairs. If something breaks, it should

Carl-Erik Ridderstråle
President and CEO

be fixed without the customer even noticing.
This is the heart of BT’s business concept: To
supply products and services that provide customers

our customers, with high expectations with regard totheir logistics functions.

with trouble-free materials handling. It is a goal that

It means, for one thing, that we have to provide

has driven our development and actions for 55 years.

sales and service everywhere in the world where our

It is a concept which grows stronger as we

customers operate. In addition, we have to offer aincreasingly find large international companies amongwide product range.

Note: The fiscal year of BT Industries, unlike that of Toyota Industries,
runs from January 1 to December 31.

Our major customers, particularly those insummer. The acquisition allows each company toconsumer goods distribution, are merging into new,broaden its respective product range and it further

larger groups on both a national and international

broadens our geographic coverage. Indeed, thelevel. At the same time, they are investing heavily tobenefits extend to include every important aspect,

improve their logistics. In many cases this means

geographically and in terms of products, resources andoutsourcing of their entire materials handlingcapabilities.

function. For a set monthly fee, the subcontractor, for

One obvious question is of course how two

example the truck supplier, is expected to manage acompanies with such different cultural backgrounds

truck fleet, provide maintenance and repairs, arrange

can be united. My firm belief is that ultimately it is afor replacement vehicles, spare parts when needed,

question of communication between people. By

and so on.

communication I mean straightforward, simple andBT has taken rewarding actions in the past to meethonest language combined with mutual respect and asense of humility for the task. This is the foundation of

consisted of Europe, with sales at just under SEK4

the work we are now facing.
Finally, a few words about the future. In the short

figure. Almost half is now generated in Northterm we expect weaker market growth in 2001

America, and the contribution from other parts of thecompared to a very strong 2000. The strength of ourworld is growing quickly.

new structure, however, will provide us with better

BT’s development is a reflection of another theme

opportunities than ever to gain market share. This is
only one example from the road we have begun toguarantee success in the future is to question thetravel together, extending into an unknown but

present. And the driving force behind our

promising future.

development has been, and will continue to be, ourcustomers.
So it was with our customers in mind that wewelcomed Toyota Industries as our new owner last

Carl-Erik Ridderstråle
President and CEO

ANNUAL REPORT 2001

that runs deep in the company: The only way to

TOYOTA INDUSTRIES CORPORATION

these demands. In 1995 our market essentiallybillion. Today, sales have nearly tripled from that13

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1

Organization of BT Industries

BT INDUSTRIESBT EUROPE

14

BT RAYMONDBT INTERNATIONALTOYOTA INDUSTRIES CORPORATION

General Market Trends

Business Area BT EUROPE(Fiscal year ended December 31, 2000)

The year 2000 saw favorable market growth in Western

The forklift truck market is concentrated in theEurope continue. The market for electric warehouseindustrialized world. Total global market volume for all

trucks increased by approximately 15% to 120

truck types is estimated at 600 thousand units in 2000.

thousand units. The largest growth was among small

Approximately 40% or 250 thousand units are electrictrucks, pedestrian pallet trucks and stackers.

warehouse trucks. Counterbalanced trucks account for

The biggest gains were posted in France, Germany

around 350 thousand units, of which 100 thousand are

and Italy, Western Europe’s largest markets, which as aelectric and 250 thousand combustion-powered.

whole have doubled in size over the last five years.

Approximately 80% of the market for electricThree large companies that together have about anwarehouse trucks is in Western Europe and the U.S.

80% market share dominate the Western European

Japan and the rest of the world account for aroundmarket. In electric warehouse trucks, two German

10% each. In terms of value, the global market for

manufacturers are the largest players. BT is number

products and services based on electric warehousethree, with a market share of approximately 18%.

ANNUAL REPORT 2001

trucks is estimated at SEK50 billion, half of which

In the hand pallet truck segment, BT’s market share isrepresents truck sales and half after-sales services.

estimated at about 25%. In combination with its share

The main players in the market consist of aroundten companies based in the U.S., Europe and Japan.

of the North American hand pallet truck market, BT is
the world leader in this segment.

Some focus mainly on counterbalanced trucks, whileothers offer both warehouse and counterbalanced

Business Area BT RAYMOND

trucks. With a market share exceeding 20%, BT and

In 2000 the North American market for electric

Toyota Industries are the world leader.

warehouse trucks grew by approximately 3% to 80

The forklift truck market, and in particular the

thousand units. The strongest growth was in themarket for electric warehouse trucks, is undergoing

Riders segment, i.e., trucks on which drivers ride.

long-term growth. During the past 20 years demand

Apart from BT RAYMOND, which is the market

for electric warehouse trucks in Western Europe andleader, there are two major competitors in electricNorth America has grown by an average of 6% a year.

warehouse trucks, both of which are domestic

Emerging markets in Eastern Europe, Southeast Asia

producers. With the exception of BT, European

and South America have grown even faster over thecompanies have a very limited presence.

last decade, at 10-20% annually. This reflects the factthat demand for warehouse trucks is mainly driven by

Business Area BT INTERNATIONAL

a society’s standard of living. An increased flow of

The total market for electric warehouse trucks in BT

goods leads to greater demand for efficient

INTERNATIONAL’s geographic area is estimated at

distribution.

50 thousand units, an increase of approximately 30%

compared with 1999. In Japan, the single largest
market for the business area, about 20 thousand

Mjölby.
Business area BT RAYMOND, with around 2,900

warehouse trucks were sold, a strong recovery from

employees, distributes Raymond branded trucks

1999.

through 33 dedicated dealers with nearly 100 sales

The currency crises in many parts of the world in

locations in North America. All dealers work strictly

1997 and 1998 have subsided, sparking an increase inwith the Raymond brand. These dealers have fulldemand. One exception, however, is the Brazilian

responsibility for operations in their respective

market, where the local currency problems that arose

geographical areas, with the exception of sales toin 1999 are still holding demand for imported

nationwide corporate customers, which are coordinatedproducts in check. As a whole, however, all market

centrally by BT RAYMOND. Manufacturing takes placeregions reported growth during the year.

at Raymond in Greene, New York and Brantford, Canada,
and at BT Prime-Mover in Muscatine, Iowa.

Organization

Trucks from BT Prime-Mover are distributed througha separate dealer network focused mainly on customer

countries around the world. Operations are divided

groups other than those reached by the Raymond

into three geographic business areas. Groupbrand.

operations are managed through the parent company,

Business area BT INTERNATIONAL, with around 450

BT Industries AB, headquartered in Mjölby, Sweden.

employees, is active in around 40 markets around theBusiness area BT EUROPE, with around 4,500

world. Operations comprise wholly owned sales andemployees, operates through 12 sales and service

service companies in Eastern Europe, Greece andcompanies in an equal number of countries.

Australia as well as a network of partly owned orOperations consist primarily of marketing, sales andindependent distributors in Southeast Asia, Latin

after-sales services.

America, Europe, the Middle East and Africa. About half

Overall operations are managed and supported byof BT International’s business volume is from BT’s
wholly or partly owned companies. BT International inbusiness area’s marketing and business development

Mjölby supports operations in its various markets withare coordinated. Also, product development andtraining, sales promotions and professional advice on

production is concentrated in BT Products AB inlarge customer projects.

BT Industries Worldwide Manufacturing Bases

BT Industries presently operates
seven manufacturing bases in
Europe and North America.
Products made at these bases are
sold worldwide through BT’s
distributors, wholly or partly
owned by BT, as well as
independent distributors.

ANNUAL REPORT 2001

BT Europe AB, based in Mjölby, Sweden, where the15
TOYOTA INDUSTRIES CORPORATION

BT’s products and services are marketed in around 70

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16
TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2001

financial items by 22% to SEK824 million.

Topics for Fiscal 2000

Another highlight during the year was the

The past year was highlighted by Toyota Industries’

acquisition of the remaining 55% of CESAB, an Italianacquisition of BT. Internally, the focus remained on day-manufacturer of counterbalanced trucks.

to-day operations and continued growth. Orders

Within business area BT EUROPE, the new range ofreceived rose by 20% to SEK12,060 million, sales by

ORION powered pallet trucks was introduced. These

18% to SEK11,518 million and income after net

trucks exemplify how advanced technology andmicroelectronics can be used to benefit customers in

Net Sales of BT Industries

the form of performance and reliability.
During the year BT EUROPE also introduced new,(SEK Million)

12,000AC-powered electric counterbalanced trucks. The
main advantages of AC power compared with direct
current are higher performance and lower

10,000maintenance costs.
8,000

Also, BT’s hand pallet truck was updated during theyear. Among other things, the new truck has a higher

6,000

lift capacity than its predecessor. In March, BTcelebrated the production of its two millionth BT

4,000

branded hand pallet truck.
2,000

For BT EUROPE, 2000 was a year of substantial
market growth, resulting in a high level of activity and0FY

96 97 98 99 00

good financial results. BT has fast-tracked certaininvestments that will raise production capacity forelectric warehouse trucks in Mjölby by slightly over
40%. The investment program is also designed to boost
productivity.
A similar program to meet expected future growthhas been implemented at CESAB in Bologna, where
production of counterbalanced trucks has almost
doubled over the last two years.
In terms of earnings, 2000 was a strong year for BT
EUROPE. Sales rose by 18% to SEK5,897 million, while
income climbed 23% to SEK590 million. Despite stiffcompetition that resulted in price pressure, thebusiness area was able to maintain its margins through17

lower production costs. The business area’s market
share is estimated at 18%.

TOYOTA INDUSTRIES CORPORATION

Within business area BT RAYMOND, several
important products were launched last year, including
the Millennium™ series of powered pallet trucks, highlift orderpickers, and reach trucks designed for
performance, efficiency and ergonomics. Several
technical innovations were introduced as well, such asa clamp that holds a wide range of pallet configurations
securely in place on orderpickers and SMARTi™, acontrol system that captures and analyzes operating
The year was marked by market growth, and at thesame time BT RAYMOND further strengthened its
market position. BT’s share of the North American
warehouse truck market is slightly over 25% for its
own brands. Including the production and supply ofprivately branded products, BT manufactures morethan one of every three warehouse trucks in the North
American market.
Among the highlights of the year was an agreementwith Home Depot. Over a five-year period, BT
RAYMOND will supply the home improvement chain
with 12 to 14 thousand electric warehouse trucks,
meeting 90% of its needs during that period.
During the year an expansion was completed at the
Brantford plant in Canada, raising production capacity.
Income for 2000 rose by 24% to SEK533 million, thehighest in the business area’s history. Sales increased
by 15% to SEK5,289 million.
For business area BT INTERNATIONAL, 2000 was ayear of continued strong expansion. Invoiced salesrose by 29% to SEK920 million, while orders received
increased 43% to SEK1,001 million. Its average overallmarket share is estimated at between 20% and 25%
excluding Japan, a gain compared with 1999.

ANNUAL REPORT 2001

data on truck functions.

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2

Establishment of
TOYOTA Material Handling Company
April 2001 saw a radical restructuring of the Toyota

TOYOTA INDUSTRIES CORPORATIONGroup’s materials handling equipment business,consisting of industrial equipment and materials
handling systems. The changes included theestablishment of TOYOTA Material Handling
Company,* incorporating the sales and marketing
operations of Toyota Motor Corporation’s (“TMC’s” )industrial equipment sales division. TOYOTA Material
Handling Company will operate as an “in-housecorporate entity” within Toyota Industries.

ANNUAL REPORT 2001

From 1956, when the first TOYOTA-brand forklift
truck was launched, TMC had been responsible for thesales and marketing of materials handling equipment
developed and manufactured by Toyota Industries.
This arrangement changed on April 1, 2001, when

Mr. Cho, President of Toyota Motor Corporation (left) and
Mr. Ishikawa, President of Toyota Industries (right) shakehands after signing the agreement of the handover of
TMC’s industrial equipment division to Toyota Industries.

Toyota Industries formally assumed responsibility for
all materials handling equipment operations.
This consolidation positions materials handlingseparate entity within the Toyota Industries Group,

equipment as a core business within Toyota Industries,

and will cooperate globally with TOYOTA Material

and underlines its status as one of the world’s leading

Handling Company as an equal strategic partner. We

comprehensive manufacturers in the field. The

are eager to further exploit the strong nameintegration of development and manufacturing

recognition of BT brands in Europe and the U.S.

expertise with strong sales and marketing capabilities

The assets transferred from TMC to Toyota

will make for more flexible management, fasterIndustries include: Goodwill, trademarks and licenses;

decision-making and strengthened global

and part or all of the share of, or equity investments in,competitiveness.

domestic and overseas sales subsidiaries and affiliates,

TOYOTA Material Handling Company will act as anoverseas manufacturing affiliates, etc. To ensure thatindependent company, with its own management, andthe consolidation was complete, Toyota Industries

will be judged on criteria such as return on assets asalso absorbed the Industrial Equipment Division ofwell as earnings and sales.

Toyota Motor Sales, USA, Inc., and transferred it to

In another strategic move, we acquired BT
Industries in June 2000. BT Industries will remain a

TOYOTA Material Handling Company.
Competition in the materials handling equipment

Industrial equipment made by Toyota Industries is soldunder the brand name of TOYOTA L&F (Logistics and
Forklifts) in Japan, which refers to materials handlingsystems and industrial vehicles and equipment. Outside
Japan, the signature of TOYOTA INDUSTRIAL EQUIPMENT
is used.

a global leader distinguished by our comprehensive

alliances taking place on a global scale. Markets inlineup, superior technologies and responsiveness toadvanced countries are almost mature, and demandcustomer needs.

tends to be cyclical. By assuming the materials
handling equipment operations of TMC and acquiring
BT Industries, we intend to strengthen our position as* TOYOTA Material Handling Company is simply the name of a divisionof Toyota Industries, not a legally incorporated entity.

TOYOTA Material Handling Customer Centerengineers at the center are able to provide total

Customer Center opened for business. The center,materials handling solutions, from efficient equipment

located in Ichikawa, Chiba Prefecture, markets

layout to inventory analysis. Costing a total of ¥2.3

TOYOTA Material Handling Company’s products andbillion, the four-story showroom has a total floor

also offers consulting services.

space of 6,300 square meters.

Supported by Toyota Industries’ accumulated know-

Admittance is, in principle, by appointment only.

how and a broad lineup of hardware, including forklift
trucks, racks and materials handling systems, the

TOYOTA Material Handling
Customer Center

ANNUAL REPORT 2001

In late April of 2001, the TOYOTA Material Handling

TOYOTA INDUSTRIES CORPORATION

market is intensifying, with mergers, acquisitions and19

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20

3

Car Air-Conditioning Compressor Business– Establishing a Global Presence

TOYOTA INDUSTRIES CORPORATION

Car air-conditioning compressor production is a core

1990s, in response to increased concern for the global

business of our Automobile Segment. We develop andenvironment, we launched a one-way swash plate

manufacture products that meet the needs of local

compressor with continuous variable displacement,

markets throughout the world.

which reduces the load on the engine and enhances
fuel efficiency. In the late 1990s, we introduced an

Technological Superiority

external signal-controlled compressor with one-way

Toyota Industries’ compressors are distinguished byswash plate and continuous variable displacement,

their superior technology, and are the preferredwhich offers both excellent acceleration and lower

product of many major car manufacturers.

energy consumption.

Toyota Industries has made an important

In the near future, electric vehicles are expected to

ANNUAL REPORT 2001

contribution to innovation in the automobile field.

become more popular, leading to increased demand for

We anticipate changes in market needs accurately andelectric compressors. Toyota Industries is undertaking

develop products to meet those needs ahead of

substantial research and development in this field.

competitors. For example, in the 1980s, we launched

We are also actively conducting extensive research into

our compact and lightweight ten-cylinder compressor

new compressors, using environment-friendly

with swash plate and fixed displacement, which isrefrigerants to replace chlorofluorocarbons (CFCs).

extremely reliable at high operating speeds. In the

Fixed Displacement Type

10S17 Compressor

Continuous Variable Displacement Type

7SBU16 Compressor

7SEU16 Compressor

5SE09 Compressor

Global Operator

Toyota Industries sold over 4.4 million units, mainly

We hold a leading share in the global car air-

fixed displacement compressors, for both American

conditioning compressor market, producing more thanautomakers and Japanese manufacturers producing in

12 million units a year at our facilities around theNorth America.

world.

In Europe, Toyota Industries sold over 3.4 million

Outside of Japan, we commenced production inunits, including variable displacement compressors for

the U.S. in 1990 and in Europe in 2000. We thus

luxury cars and compact variable displacement

established a tri-polar production network with bases

compressors for smaller cars.

in all the major automobile markets. We also license

Despite an economic slowdown in the U.S., ourproduction in Asia, South America and Europe. Local

mid-term focus is on North America and Europe. In

production allows the manufacture of products that

North America, we will seek new orders aggressively.

reflect local needs, while at the same time reducing

In Europe, the potential for sales is vast as theexchange rate risks.

proportion of cars fitted with car air-conditioners is

In early 2000, Michigan Automotive Compressor,

expected to increase significantly. We will vigorously
cultivate new customers by rapidly developing andcumulative total production mark of 20 million units.

launching products tailored to local needs, such as the

MACI has steadily expanded its production capacity.

compact variable displacement compressor for the

In April 2000, TD Deutsche Klimakompressor

European market.

GmbH (“TDDK”)*, our European production base,

All our car air-conditioning compressors arebegan manufacturing operations in Sachsen, Germany.

supplied to DENSO Corporation, which then sells

Output was approximately 300 thousand units in fiscal

them to major automakers worldwide with an2001 and is estimated to be approximately 750

electromagnetic clutch attached or incorporated inthousand units in fiscal 2002. TDDK aims to gradually

DENSO’s car air-conditioning systems.

expand its production capacity.
player in the Japanese market, selling approximately 4.6
million units to major car manufacturers, including TMC.

* MACI and TDDK are joint ventures with DENSO Corporation. As of March
31, 2001, Toyota Industries holds 60% and 65%, respectively, of the shares ofthese companies. The fiscal years of MACI and TDDK, unlike that of Toyota
Industries, run from January 1 to December 31.

Worldwide Manufacturing Bases and Local Offices

TDDK
YSD
Detroit
MunichSUBROS

MACI
DWHI

MMCL

Consolidated subsidiaries
Licensed manufacturers
Local offices

DNBR

DNIA

ANNUAL REPORT 2001

In fiscal 2001, Toyota Industries was the major

21
TOYOTA INDUSTRIES CORPORATION

Inc. (“MACI”)*, our U.S. production base, reached aFOCUS

4Electronics Business for New Frontiers
22
Toyota Industries will develop its Electronics Segment
TOYOTA INDUSTRIES CORPORATION

into a main business pillar.

In the fall of 2001, ST-LCD will begin a capital
investment program of ¥75 billion to establish a

In October 1997, Toyota Industries and Sonysecond production line, scheduled to come on stream

Corporation established ST Liquid Crystal Display

in June 2002. It will also increase the capacity of its

Corp. (“ST-LCD”) as a 50-50 joint venture. ST-LCD

first production line. In total, ST-LCD will increase its

manufactures low-temperature polysilicon TFT LCD

monthly capacity from 12,000 to 32,000 base plates

panels. The company benefits from Sony’s advanced(600mm x 720mm).

technologies and Toyota Industries’ superior quality
control and manufacturing technologies.

To help fund this investment, Sony and Toyota
Industries will each inject ¥10 billion into ST-LCD,

ANNUAL REPORT 2001

Since it began mass production in April 1999,

increasing the company’s capital to ¥50 billion. Sony,

ST-LCD has expanded its production to meet rising

Toyota Industries and ST-LCD regard the poly-Si TFT

market demand. A unique production line that

LCD as a vital device in the field of compact displays,

incorporates the Toyota Production System ensuresand collaborate to develop and manufacture superior

that quality keeps pace with output. ST-LCD is now

products for further expansion of the business.

operating at full capacity, producing small LCD panels

Toyota Industries also entered the electronic

for digital still and video cameras. The panels aresubstrate business through its subsidiary, TIBC

supplied to a number of customers through Sony.

Corporation (“TIBC”), a joint venture with Ibiden Co.,

ST-LCD panels are energy-efficient, and offer highresolution as well as high numerical aperture. They
also facilitate the integration of the display device andits driver circuits into a single TFT glass base plate.
The resultant cost reduction and miniaturization of thedisplay unit allows the LCD panels to be used in awide range of applications, including in-car monitors.
They are also suitable for use in wide-band mobile
phones, where they allow the easy exchange of large
volumes of data for video and still images. We expectthat demand for low-temperature poly-Si TFT LCD
panels will increase further as their application in
high-definition displays extends to ever smaller, lighter
mobile phones and personal digital assistants.

Ltd. (“Ibiden”). TIBC manufactures ball grid array(BGA)-type plastic package substrates and f lexible
printed circuit (FPC)-type substrates. These substrates
are indispensable for personal computers, digital stilland video cameras, mobile phones, IC cards and manyother devices. Substrates manufactured by TIBC are23

supplied to a number of chip manufacturers and otherhigh-tech companies worldwide through Ibiden.

TOYOTA INDUSTRIES CORPORATION

The high-tech industry is currently suffering abusiness slowdown. Through aggressive reduction of
manufacturing costs and strengthening of production
technologies, however, we aim to reinforce TIBC’s
corporate strengths so that it will be immune tomarket fluctuations. Furthermore, the high-techindustry is expected to continue expanding over the
medium and long term, and we are confident that
TIBC’s scope of business will expand accordingly.

for environmental management. In April 2001, it
obtained QS9000 certification for its quality assurance.
Toyota Industries’ Semiconductor & Electronics
Equipment Division* develops and manufactureselectronic components for automobiles, most notably

BGA-type plastic package substrates and FPC-type
substrates made by TIBC are sold to customers worldwide
through Ibiden and used for high-technology products suchas PCs and IC cards.

the DC-DC converter for the Prius, TOYOTA’s strategic
hybrid car.
We are looking to our electronics business toprovide substantial future growth, and intend toallocate the necessary management resources to makethis an important and successful business area.
* The Semiconductor & Electronics Equipment Division was integrated into
the Technology Development Center as of July 1, 2001.

Low-temperature polysilicon TFT LCD panels made by ST-LCD areincorporated in products such as digital video/still cameras, personal
digital assistants (PDAs) made by Sony and other companies.

ANNUAL REPORT 2001

In January 2000, TIBC obtained ISO14001
certification, the internationally recognized standard

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5

Change of Company Name
24
On June 28, 2001, the Ordinary General Meeting of

Finally, in June 2000, we acquired BT Industries, and

TOYOTA INDUSTRIES CORPORATION

Shareholders approved a motion to change the namein April 2001 absorbed the industrial equipment salesof the company. As a result, on August 1, 2001, thedivision of Toyota Motor Corporation. Both moves

English name of the company changed from Toyoda

form part of a strategy of internationalizing andAutomatic Loom Works, Ltd. to Toyota Industries

expanding the Materials Handling Equipment Segment,

Corporation.

and, not least with a view to boosting employee

The reasons for this change are as follows. Firstly,

morale, we considered that a change of corporate

the company was originally established for thename would sharpen the focus on further businesspurpose of manufacturing automatic looms. Today, as adevelopment and diversification.

result of diversification over time, sales of the Textile

The change of name symbolizes our intention to

ANNUAL REPORT 2001

Machinery Segment make up just 4.3% of total

refresh our image and our thinking in line with ourconsolidated net sales. The new name is intended todetermination to push ahead with globalization andrepresent more faithfully the nature of the company’s

better meet the needs of our customers. In these

operations.

endeavors, we will strive to earn the trust and satisfy

Secondly, this is the first year of a new century andthe expectations of our shareholders, customers,

also our 75th anniversary year. It therefore seemed anbusiness partners, employees and the people in theideal time to make the name change we had beencommunities we serve.

contemplating.

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6

Introduction of New Personnel System
25
Introduction of Stock Option
Incentive Plan

reforms to our organizational and personnel systems.

The introduction of an incentive plan involving the

For example, in January 1995, we replaced our vertical

granting of stock options in accordance with the

management structure with a horizontal system

Japanese Commercial Code was approved at thecontaining fewer layers of management and based on

Ordinary General Meeting of Shareholders on June 28,

smaller, flexible groups with considerable autonomy.

2001. Under this plan, designed to sharpen the

As intended, the effect was to give each staff member

motivation of senior management in enhancing

greater responsibilities and authority together with ashareholder value, a maximum of 500,000 shares in total

good sense of how his or her activities fitted into theare to be granted at a predetermined price to 141

whole, and speed up the decision-making process.

people (28 directors, and 113 associate directors andWith staff members able to take the initiative in

general managers). Recipients may not exercise themaking proactive proposals on business transactions,

option within the first two years. Subsequent to thatsales activities and other matters, the result was

initial period, the option must be exercised or waived

greater energy, flexibility and dynamism.

within the next two years. The following is an outlineof the plan.

New Assessment/Remuneration System
In April 1995, we introduced a performance-based

1. Method

traditional importance of seniority. In April 2001, we

Granting of stock options by way of repurchase of shares ofToyota Industries Corporation in accordance with Article210-2 of the Commercial Codeintroduced a new merit-based system for all “white-

2. Recipientscollar” employees below assistant manager level.
At the same time, we simplified the qualification steps

Twenty-eight directors and 113 employees (associate directors,
general/grade 1 managers) of Toyota Industries Corporation

required for promotion to positions of greater

3. Number of shares to be granted

responsibility, allowing high-quality personnel toEach director and qualifying employee will be granted amaximum of 15,000 and a minimum of 2,000 shares.

remuneration system for managers, downgrading the

progress up the ranks more quickly.
Staff are not judged solely according to the resultsof their performance. An employee’s efforts to reach

4. Grant priceemployees to aim high, unafraid of failure. The

The higher of the closing price on Tokyo Stock Exchange on
the date of grant and 1.05 times the average closing price inthe full calendar month prior to the month of the grant date

feedback, given openly, is comprehensive and serves to

5. Exercise period of options

motivate staff.

July 1, 2003 to June 30, 2005

his or her goals are also appraised. This encourages

ANNUAL REPORT 2001

We have in the last few years carried out a number of

TOYOTA INDUSTRIES CORPORATION

Flatter Organizational Structure

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7

Corporate Governance
26
TOYOTA INDUSTRIES CORPORATION

Toyota Industries Corporation is determined to act within

auditors, including two standing auditors. The corporate

both the letter and the spirit of the law, in Japan andauditors, appointed at the general meeting ofoverseas. It seeks to pursue its business activities in a fairshareholders, conduct an operations audit as well as anmanner, and to do so in a transparent way. In accordance

accounting audit. For this purpose, the auditors arewith this principle, we attempt to provide the highest

granted a great deal of authority. In the operations audit,

possible levels of disclosure and accountability tothey investigate whether ordinances and articles ofshareholders and others concerned.

incorporation are being observed in the execution of theWe have adopted the divisional organization system; as

duties of the directors. In order to prevent illegal or

ANNUAL REPORT 2001

a rule, the day-to-day operations of each business have

improper resolutions from being made at the Board

been entrusted to the authority of the division manager.

meeting, the auditors attend the meeting and are able toMatters concerning strategic decision-making and thegive their opinions if necessary. If any violation of anestablishment of divisional and company-wide businessordinance or articles of incorporation is made by agoals are discussed and decided in the management

director or the prospect of such a violation is identified,committees and meetings described below. Necessary

it is reported to the Board of Directors.

issues, when appropriate, are presented and discussed atmeetings of the Board of Directors.

Board of Directors
The Board of Directors, the highest body for making
corporate decisions related to business and affairs

In the accounting audit, the consistency of theaccounting auditor’s auditing method and results is
assessed. If the accounting auditor’s auditing method or
results are identified as inconsistent, the auditors include
the matter and the reason for it in the audit report.

throughout the entire operation, is composed of 32

Management Committee

members, including corporate auditors. The Board of

The Management Committee deliberates upon important

Directors makes decisions about important mattersmatters concerning all aspects of management. The

concerning corporate management, except for thoseCommittee is composed of most of the directors andmatters that come within the authority of the generalstanding auditors. It is chaired by the President.

meeting of shareholders. The Board is chaired by either

Necessary issues are presented to the Board of Directors

the Chairman or the President. The Board deliberates

for discussion and decision.

upon matters specified in commercial law, articles ofincorporation and regulations of the Board of Directors.
Meetings are held once a month as a rule.

Expanded Executive Vice President’s
Committee
As a rule, the Expanded Executive Vice President’s

Board of Auditors

Committee, composed of the eight directors at and above

The Board of Auditors is composed of four corporate

the level of Senior Managing Director, deliberates uponthe company’s important management issues such as
business operations, new products, overseas matters,

Toyota Industries’ Basic Philosophy

and IT. The Committee is chaired by the President.
Compared to the Management Committee and others,
the Expanded Executive Vice President’s Committee
can deliberate with relatively few members, allowing
swift, flexible and rapid decision-making. Necessary
issues are presented to the Board of Directors fordiscussion and decision.

Divisional System and In-House
Company System
In order to respond rapidly to changes in the businessenvironment, the divisional system organization was
adopted in 1971. Based on the divisional system,
vehicle, engine, car air-conditioning compressor, textile
machinery and electronics businesses. Also,
operational management authority has been vested in

Respect for Others
Toyota Industries is respectful of the people, culture and tradition ofeach country and region in which it operates. It also works topromote economic growth and prosperity in those countries.
Respect for the Natural Environment
Toyota Industries believes that economic growth and conservation of
the natural environment are compatible. It strives to offer products
and services that are clean, safe and of high quality.
Respect for Customers
Toyota Industries conducts intensive product research and forwardlooking development activities to create new value for its customers.
Respect for Employees
Toyota Industries nurtures the inventiveness and other abilities of its
employees. It seeks to create a climate of cooperation, so that
employees and the company can realize their full potential.

division managers, who have responsibility for theirdivisions’ sales volume, profits and losses. Because
management responsibility has been clarified, rapid

Department, the Personnel Affairs and Labor Relations

decision-making is possible, which has contributed to

Department, and the Corporate Audit Office, among

the improvement and expansion of businessothers. It also conducts regular checks of eachperformance.

department and promotes educational activities.

from Toyota Motor Corporation, an in-house company
system was established for the Industrial Vehicle
Division and Materials Handling System Division, andwe created an “in-house company,” TOYOTA Material
Handling Company, in April 2001. The purpose of thisarrangement is to give TOYOTA Material Handling
Company a greater degree of autonomy than otherdivisions. If this “in-house company” system proves
successful in terms of net sales, operating income,return on assets (ROA) and cash flows, we willconsider extending it to other divisions.

Corporate Code of Conduct Council

Goals and Objectives Management
Each fiscal year, the President sets corporate objectives
and business targets for each division. In order toattain these targets and objectives, action items arebroken down, clarified and expanded not only at the
departmental and group level, but also at theindividual level. According to this fiscal-year goals andobjectives management system, corporate targets,business objectives and action items penetrate all theway to the bottom of the organization, and fiscal-year
corporate goals and business objectives can beattained. Thanks to the system, goals, objectives andaction items become clear at the individual level.
Furthermore, in April 2001, the new assessment/

In 1991, we established a Code of Conduct Council for

remuneration system for white-collar employees

the purpose of promoting awareness of ethical, legal,

below the level of senior staff was revised. Goals andsocial and environmental issues. The Council is

objectives management has become closely tied to ourchaired by a Senior Managing Director. In 1998, theobjective attainment assessment, the backbone ofCouncil published a guide for employees containing

which is the new assessment/remuneration system,

specific guidelines on good conduct.

and interrelated with the salary of all white-collar

The Council liaises closely with the Legalemployees.

ANNUAL REPORT 2001

Taking advantage of the opportunity presented by
the transfer of the industrial equipment sales division

27
TOYOTA INDUSTRIES CORPORATION

diversification has been proceeding efficiently in the

Respect for the Law
Toyota Industries is determined to comply with the letter and thespirit of the law, in Japan and overseas, and to be fair and transparent
in all its dealings.

FOCUS

8

Caring for the Environment
28
TOYOTA INDUSTRIES CORPORATION

Basic Principle

Five-year Environmental Action Plan (from April 2001

Toyota Industries, recognizing that preservation of theto March 2006). This plan defines specific targets andglobal environment is one of the most pressing issues

activity guidelines, including zero emissions* at all ofof the 21st century, embraces environmental soundness

Toyota Industries’ plants by March 2004. To be

as a crucial business concern. Our basic corporate

implemented by all Toyota Industries Group members,

principle states that “Toyota Industries believes that

it is designed to make these ideals a reality. Following is

economic growth and conservation of the natural

an outline of the plan.

environment are compatible. It strives to offer products
and services that are clean, safe and of high quality.” In* Toyota Industries defines “zero emissions” as “reducing landfill waste to lessthan 5% of the fiscal 1999 (April 1998 to March 1999) level.”

ANNUAL REPORT 2001

accordance with this principle, we have been actively

Environmental Policies

engaged in the protection of the environment.

1. Conduct corporate activities that are considerate ofEnvironmental Protection Activities
We devised our First Environmental Action Plan in
1993. In this plan, we specified three basic policies,
namely to “establish an in-house system,”“manage ourthe environment at every stage of a product’s life
cycle, from development through design,
production, use and disposal, so as to provide cleanand safe products
2. Strive to intensify environmental management,

business activities reflecting concerns for the

including that of consolidated subsidiaries, for theenvironment” and “contribute to society.” Each division

further advancement of corporate activities thatthen responded with a detailed program of

support environmental protection

environmental policies and acted on them. In 1996, we

3. Promote social contribution, information disclosure

announced our Second Environmental Action Plan toand knowledge through wide-ranging cooperation

confront new environmental challenges. We alsowith society on environmental protection, with thestarted activities to obtain ISO14001 certification.

ultimate aim of achieving a better global

Third Environmental Action Plan

environment

Toyota Industries has two ideals: First, to balance

Action Guidelines

corporate activities with the preservation of the global

1. Develop and provide clean products withenvironment, and second, to contribute to a recycling-

minimal environmental impact

oriented society. As the targets set out in the second(1) Thoroughly incorporate environmental

plan, including ISO14001 certification for each division,
have almost been met, we once again revised thewhole plan in August 2000 and announced the Third

considerations in development and design(2) Promote “green” procurement

Outline of ISO 14001

2. Promote manufacturing that strives for zero
emissions

Upward to the Next Stage(1) Further reduce adverse environmental impacts
through resource and energy conservation(2) Voluntarily set, execute and monitor goals throughthe Environmental Committee
Continual Improvement

3. Expand environmental management systems(1) Strengthen cooperation between the company andits subsidiaries and trading partners

Act(2) Firmly grasp environmental protection costs andEnvironmental
Action Plan

Management
review

cost-efficiency
4. Actively participate in public environmental

Basic
Philosophy

protection efforts as a responsible corporate

Environment
Policies of
Manufacturing
PlantscitizenCheck(1) Engage in the creation of a recycling-oriented(2) Thoroughly implement active informationPlan

disclosure and communication with local

Planning

Docommunities

Implementationand operation

Specific numerical targets include the following: By
the end of March 2006, reducing total CO2 emissions
to 95% of the fiscal 1991 level, and to 90% of the fiscal
the fiscal 1999 level; and by the end of March 2006,

March 2006, reducing total emissions of PRTR

reducing total VOC (Volatile Organic Compounds)(Pollutant Release and Transfer Register) substances

emissions from paint lines to 50% of the fiscal 1999

specified by the Ministry of the Environment to 50% oflevel.

Companywide Waste Emissions(Ton)
60,00050,00040,000Toyota Industries
aims at zero emissionsby March 2004.

30,00020,00010,000Target
0
FY

91

92

93

94

95

96

97

98

99

00

01

04

ANNUAL REPORT 2001

1991 level by the end of March 2011; by the end of

TOYOTA INDUSTRIES CORPORATION

Checking andcorrective actionsociety29

FOCUS

8

System for Environmental Activities(In-House Organization)

are currently preparing for certification. We are now

To tackle environmental issues in a consistent andoffices and other group companies.

seeking to obtain certification for our non-production

organized manner, we have set up the Environmental
Committee, chaired by the President. The committee

Environmental Audits

has five specialized subcommittees. Also, each plant

Internal audits are carried out by an on-site team withhas organized its own Plant Environmental Committee

a thorough knowledge of plant operations andand specialized subcommittees to deal withspecialist training. External auditors from anenvironmental issues regarding individual

independent inspection institution visit each site to

manufacturing facilities.

check that ISO14001 standards are properly met. In
fiscal 2001, the external auditors found no significant

30

Compliance with International
Environmental Standards

violations.

TOYOTA INDUSTRIES CORPORATION

Toyota Industries is working to obtain ISO14001

Environmental Training

certification in order to establish a company-wide

Based on the notion that it is important to raise theenvironmental management system and fulfill its

environmental awareness of each employee, Toyota

corporate responsibilities for international

Industries regularly conducts environmental training

environmental protection. As of April 2001, all theand education programs. These programs include

production plants of Toyota Industries (i.e., the parent

courses for training internal auditors, providing

company) had received ISO14001. The same applies

ISO14001 internal auditing education for divisional

to MACI, TIEM and TIESA, our overseas production

project leaders, and general education programs for allbases. Four plants of BT Industries acquired ISO14001

employees.

certification by March 31, 2001, and its other plants

ANNUAL REPORT 2001

Internal Organization for Environmental Activities

Environmental
Committee

Product Technology Subcommittee• Development of products reflecting concern for the environment• Facilitation of product recycling • LCA (Life Cycle Assessment) systems• Final decision-making group forenvironmental protection
matters

Energy Subcommittee• Proposal of plans for increasing energy efficiency and promotion of related activities

Pollution Prevention Subcommittee• Promotion of pollution prevention activities • Management of chemical substances• Management and phase-out of materials that have a negative environmental impact

Waste Minimization Subcommittee• Preparation and promotion of plans for curbing the volume of waste materials andpromoting the reuse of materials

Communications and Public Relations Subcommittee• Preparation and promotion of plans for environmental communications, public relations
and contributions to the community

Plant Environmental
Committee• In overall charge ofenvironmental protection
matters, based on corporate
policy, at each plant

Specialized Subcommittees at Plant Level• Implementation of decisions made by the specialized subcommittees listed above• Promotion of environmental protection at the plant level

Environmental Accounting
While international bodies are working on the range
and definition of environmental costs, we arecalculating the costs of environmental investment andmaintenance and studying cost-efficiency inaccordance with the guidelines laid down by theJapanese Ministry of the Environment.

Environmental Reporting
We believe that it is important to explain ourenvironmental protection activities to the generalpublic. In December 1999, we published our first
Environmental Report. In August 2001, we published31

our third edition, Environmental Report 2001. It
contains a summary of the activities and performancecopies of this report, see the last page of this annual
report.The contents of the report are also posted on
our Web site.

Environmental Protection of Soil andUnderground Water
In 1984, Toyota Industries stopped using
trichloroethylene, before the Japanese government
toxic. In 1994, under provisional guidelines for soil

Toyota Industries is working to acquire ISO 14001
certification as part of its group-wide environmental
management efforts.

and underwater pollution issued by the Ministry of theEnvironment, we voluntarily conducted soil inspection

the chemical in the wells for drinking water wasof our plant premises for the substance. We

below the recommended limit.

discovered that the amounts of trichloroethylene

Though we are not legally bound to publicize these(including cis-1, 2-Dichloroethylene, a decomposed

incidents, all Toyota Group companies act upon avariant) at the Kariya Plant and the Kyowa Plant incommon policy to disclose as much information as

March 1996 and June 1998, respectively, exceeded thepossible to local communities. In accordance with thisallowable limits set by the Ministry of thepolicy, Toyota Industries, along with other Toyota

Environment. Upon this finding, we conducted a moreGroup members, held a briefing session for thedetailed inspection and started a continuous cleanup

residents of the communities on April 27, 2001 andcampaign. Our top priority was to prevent thereleased the findings to the press.

pollutant from seeping outside the plant sites. We

We will remain vigilant about this matter andcreated barrier wells along the downstream side of thecontinue the cleanup campaign. We will also disclose

plants and pumped out underground water for

information on other environment-related issues if

seepage prevention and purification.

such issues arise.

We voluntarily reported the situation to the local
government and the local public health center. The
health center immediately carried out inspections ofsurrounding wells, and confirmed that the amount of

For more detailed information, please refer to theEnvironmental Report 2001, published in August 2001.

ANNUAL REPORT 2001

designated the chlorinated organic compound as

TOYOTA INDUSTRIES CORPORATION

of our environmental protection programs. To obtain

Review of Operations
The first year of the third millennium turned out extremely well for all of Toyota Industries’ businesses.
Details of fiscal 2001 (April 1, 2000 to March 31, 2001) are as follows:

Automobile Segment
Net sales of the Automobile Segment in fiscal 2001 totaled¥457.6 billion (US$3,693.6 million), up 8.1% over fiscal 2000
(April 1, 1999 to March 31, 2000) and representing 59.6% of
total net sales. Operating income was ¥28.5 billion (US$230.2
million), up 16.8%.

Net Sales of
the Automobile Segment

Operating Income of
the Automobile Segment(¥ Billion)(¥ Billion)

32

500

30

TOYOTA INDUSTRIES CORPORATION

400

25

300

20

200

15

100

10

0
FY

97 98 99 00 01

0
FY

Engine Business
The major products in Toyota Industries’ engine business arediesel and gasoline engines for TOYOTA-brand automobiles
and forklift trucks.
Diesel engines sold in fiscal 2001 totaled 170,344 units,
down 3.5% from fiscal 2000. This result reflects a reduction
in shipments of 2000cc class C-type diesel engines and4000cc class HZ-type diesel engines, which outweighed anincrease in shipments of 2000cc class direct injection 1CDtype diesel engines with a common rail fuel system, anddiesel engines for forklift trucks.
Gasoline engines sold in fiscal 2001 totaled 182,719 units,
up 10.9% over fiscal 2000. This result mainly reflects
increased sales of 5E-type and Y-type engines in line with arecovery in the domestic automobile market. New orders
from TMC to produce 2UZ-type gasoline engines also helped.
The total number of engines sold in fiscal 2001 increased
3.5% to 353,063. Total net sales of the engine businessamounted to ¥102.1 billion (US$824.0 million), up 11.1%.

Car Air-Conditioning Compressor
Business
97 98 99 00 01

ANNUAL REPORT 2001

Vehicle Business
The vehicle business accounts for the largest portion of sales
in the Automobile Segment. During the year under review,
Toyota Industries manufactured two TOYOTA-brand models,the Vitz (Yaris), TMC’s global strategic small car, and theSprinter Carib (exported outside Japan as the Corolla Wagon),a compact station wagon.
Because the model was nearing the end of its life cycle,
the number of Sprinter Caribs (Corolla Wagons) sold in fiscal
2001 decreased by 15,075 units from fiscal 2000 to 13,454
units. On the other hand, although two years have passed
since the commencement of production in January 1999,
sales of the Vitz (Yaris) increased to 262,460 units, up 38,360
over fiscal 2000. These models are manufactured underconsignment from TMC and are all sold to TMC.
Total net sales reached ¥195.9 billion (US$1,581.0
million), up 2.3% over fiscal 2000.
Toyota Motor Manufacturing France S.A.S., amanufacturing subsidiary of TMC, started production of the
Yaris in January 2001. Domestic production for export will
therefore gradually decrease. However, because we received
new orders from TMC to produce the RAV4, a compact sportutility vehicle, starting May 2001, and the bB Open Deck, atall, box-like, compact vehicle with a small pickup bed,
starting June 2001, we expect the impact to be minimal.

This business develops and manufactures compressors, a core
part of car air-conditioning systems.
New orders and stable car sales contributed to a soundperformance in both domestic and overseas markets.
Car air-conditioning compressors sold in the domestic
market totaled 4.6 million units, up 8.7% over fiscal 2000.
In North America, despite an economic slowdown in the
U.S., sales increased to 4.4 million units, up 18.0%. Fixeddisplacement compressors, which have excellent reliability athigh running speeds, were particularly well received bycustomers.
Car Air-Conditioning
Compressor Unit Sales(Million Units)

15

10

5

0
FY

97 98 99 00 01
Japan
North America
EuropeAsia and Oceania

Industrial Vehicle Unit Sales*2(Shipments from Plants)

Car air-conditioning compressors produced for theEuropean market totaled 3.4 million units, up 26.2% overfiscal 2000. This result reflects an expansion in the European
market due to the increase of cars fitted with air conditioners,
as well as the winning of new orders after fierce competition
among rival manufacturers. In Europe, our variabledisplacement compressors for luxury cars are highly regarded.
We are now making efforts to increase sales of variabledisplacement compressors for compact cars.
Total units sold in fiscal 2001 amounted to 12.5 million, up
16.6% over fiscal 2000. Total net sales were ¥139.6 billion(US$1,126.5 million), up 16.0%.
All car air-conditioning compressors manufactured by
Toyota Industries are sold to major automobile manufacturers
globally through DENSO Corporation.

(Thousand Units)

150

100

50

0
FY

The Materials Handling Equipment Segment encompasses theindustrial vehicle business and the materials handling systembusiness, which includes automated storage and retrieval
systems and automatic guided vehicle systems. Industrial
vehicle business sales accounted for about 97% of theMaterials Handling Equipment Segment in fiscal 2001.
Total net sales of the Materials Handling Equipment
Segment were ¥236.5 billion (US$1,908.8 million), up 58.6%
over fiscal 2000. Operating income was ¥14.5 billion(US$117.4 million), up 153.0%.These figures include thesecond half of BT Industries, acquired in June 2000.

Despite signs of a downturn in the U.S. economy in thesecond half of fiscal 2001, overall demand in the U.S. andEurope remained fairly strong. Unit shipments of industrial
vehicles such as forklift trucks for overseas markets increased
4,741 units over fiscal 2000 to 44,419 units (excluding thoseof BT Industries). In Japan, increased private sector capital
equipment investment boosted sales. The GENEO-B (7FB
overseas), an electric counterbalanced forklift truck, sold wellamong environmentally conscious users. In January 2001, welaunched the GENEO-R, a new electric reach truck. As a resultof these factors, our share of forklift truck sales in thedomestic market in fiscal 2001 exceeded 40% for the second
consecutive year. Unit shipments totaled 27,500, up 2,688
over fiscal 2000. Total shipments of other industrial vehicles,
including tow tractors, skid steer loaders, shovel loaders andscrubbers, decreased 201 units to 1,974 units over fiscal 2000.
The main product of Toyota Industries’ industrial vehicle
business had always been the counterbalanced forklift truck.
In June 2000, as part of our global strategy, we acquired 97%of the outstanding shares of BT Industries AB of Sweden for
SEK7.4 billion (US$759.3 million)*1, to complement andstrengthen our product lineup. As a result, Toyota Industries

00 01

33

Japan
North America
EuropeAsia and Oceania* 2 The figure for fiscal 2001 includes the unit shipments of BT Industries.

can not only offer industrial trucks but can also provide
comprehensive materials handling solutions. BT Industries
continued to perform well during calendar 2000.
In addition, an agreement was entered into in December
2000 to transfer TMC’s industrial equipment sales division to
Toyota Industries. As a result, as of April 1, 2001, all of TMC’s
industrial equipment and related operations were combined
within Toyota Industries. These moves will enable us to provide
products and services that further satisfy customer needs.

Materials Handling System Business
The materials handling system business develops andmanufactures systems such as automated storage and retrieval
systems and automatic guided vehicles for the Japanese market.
As a result of a slight recovery in equipment investment in theprivate sector and enhanced sales efforts, sales increased bymore than 80% over fiscal 2000.
Net Sales ofthe Materials Handling
Equipment Segment

Operating Income of
the Materials Handling
Equipment Segment(¥ Billion)(¥ Billion)

300

15

200

10

100

5

* 1 U.S. dollar amounts have been translated from Swedish krona, forconvenience only, at the rate of SEK9.69 = US$1. After the June 2000
purchase, we continued to buy BT Industries’ shares, holding 98.2% of its
equity as of March 31, 2001.

0
FY 97

98 99 00 01

0
FY

97 98 99 00 01

ANNUAL REPORT 2001

Industrial Vehicle Business

97 98 99

TOYOTA INDUSTRIES CORPORATION

Materials Handling
Equipment Segment

Review of Operations
Textile Machinery Segment

Others Segment

The Textile Machinery Segment consists mainly of thespinning machinery business, including ring spinning
frames, and the weaving machinery business, including airjet looms.
Net sales of this segment totaled ¥33.2 billion (US$268.3
million), up 43.7% over fiscal 2000. Operating income
improved dramatically to ¥35 million (US$0.28 million),
thanks to increased sales and the positive effects ofstructural streamlining. The export ratio is very high in thisbusiness, and exports accounted for 94.6% of total net sales
for fiscal 2001.

The Others Segment comprises businesses that we enteredcomparatively recently. Although the businesses are still
small, they are expected to grow rapidly and become
strategic operations of Toyota Industries.
ST-LCD*4, a joint venture with Sony Corporation, forms
the core of our Others Segment. It produces lowtemperature poly-Si TFT LCDs, expected to become a nextgeneration LCD. In addition, TIBC was established as a joint
venture with Ibiden Co., Ltd., and began production ofplastic package substrates for IC chipsets in April 1999. This
segment also covers the press die business and others.
Although the growth of high-tech companies, our main
customers, slowed slightly in calendar 2000, both ST-LCD
and TIBC expanded sales according to plan. Net sales of thissegment totaled ¥40.0 billion (US$322.9 million), up 32.8%
over fiscal 2000. Operating income was ¥4.4 billion(US$35.2 million), up 480.5%.

Spinning Machinery Business

34
TOYOTA INDUSTRIES CORPORATIONThe spinning machinery business won new orders fromUzbekistan and increased sales in Thailand, Pakistan andIndonesia. As a result, net sales totaled ¥11.8 billion(US$95.4 million), up 101.0% over fiscal 2000. This businessalso includes the manufacture and sale of roving frames anddrawing frames.

* 4 Net sales of ST-LCD are accounted by the equity method and are notincluded in consolidated net sales and operating income or loss.

Weaving Machinery Business

ANNUAL REPORT 2001

Orders from South Korea and Taiwan for air-jet looms, thecore product of this business, decreased. This was offset bydramatically increased sales in China, as well as moderatesales increases in Indonesia and Thailand. As a result, thenumber of units sold totaled 4,578, up 973 over fiscal 2000.
Sales of water-jet looms totaled 1,202 units, up 391 units,
due mainly to increased sales in China and South Korea.
Total sales of the weaving machinery business increased
24.1% to ¥21.4 billion (US$172.8 million).
We continue to promote rationalization of our Textile
Machinery Segment in order to raise productivity, and arealso working to lower costs and strengthen the product line.

Net Sales of
the Others Segment*4

Operating Income of
the Others Segment*4(Including Elimination ofInter-Segment Transactions)(¥ Billion)(¥ Billion)
6

50

40

4

30
2
20

Net Sales of
the Textile Machinery
Segment*3

Operating Income of
the Textile Machinery
Segment*3(¥ Billion)(¥ Billion)

40

1

0
10

0
FY

0
30
(1)
20
(2)
10

(3)

0
FY

99

00

01

(4)
FY

99

00

* 3 From fiscal 1999, the Textile Machinery Segment has been separated
from the Others Segment.

01

97 98 99 00 01(1)
FY

97 98 99 00 01

Consolidated Five-Year Summary
Toyota Industries Corporation
Years ended March 31, 2001

Millions of yen

2000

1999

1998

1997

¥ 767,383¥625,773¥558,876¥572,698¥530,851

Operating income

47,304

28,867

24,81432,72932,675

Income before income taxes

38,22027,162

23,172

33,202

31,157

Net income

22,637

13,686

10,391

20,491

17,931

Total assets¥1,869,642¥685,914¥617,071¥593,004¥556,291

Shareholders’ equity

951,298

316,293

301,158

304,097

281,154

Common stock

68,01940,17840,17840,13331,458

Shares outstanding at year-end (thousands)

313,296283,296283,296287,752

282,233¥ 298,794¥191,992¥178,937¥150,417¥116,738

Depreciation and amortization

46,45442,752

34,38027,95828,043

Capital expenditures

127,273

44,74660,46862,00735,408

Research and development expenses

26,19624,062

23,231

23,112

19,691

Net sales

Overseas sales

Per share of common stock (yen):
Net income — basic

¥

75.90

¥

48.32

¥

36.30

¥

72.33

¥

63.55

67.77

43.18

32.62

63.48

55.20

Shareholders’ equity

3,036.77

1,116.62

1,063.05

1,056.81

996.18

17.00

16.00

16.00

16.00

16.00

Return on equity (ROE) (%)

3.6

4.4

3.4

7.0

6.5

Return on assets (ROA) (%)

1.8

2.1

1.7

3.6

3.6

Return on sales (ROS) (%)

2.9

2.2

1.9

3.6

3.4

Debt / equity ratio (%)

30.7

60.5

51.6

37.5

46.0

Interest coverage (times)

9.1

14.5

16.4

17.6

13.0

EBITDA (millions of yen)

79,92164,681

51,03355,21255,548

21,11813,132

12,797

11,23910,738Cash dividends
Indices:Number of employees

Notes: 1. The differences of the accounting methods for fiscal 2000 and fiscal 2001 are described in Notes to Consolidated Financial Statements.
2. Net income per share, ROE and ROA are computed based on the average number of shares, shareholders’ equity and total assets, respectively,
during each year.
3. Debt /equity ratio = Interest-bearing debt / Shareholders’ equity
4. Interest coverage = (Operating income + Interest and dividends income) / Interest expenses
5. EBITDA = Income before income taxes + Interest expenses - interest and dividends income + Depreciation and amortization

ANNUAL REPORT 2001

Net income — diluted

35
TOYOTA INDUSTRIES CORPORATION

2001

Management’s Discussion and Analysis ofFinancial Condition and Results of Operations
The following Management’s Discussion and Analysis ofFinancial Condition and Results of Operations is based on
information known to management as of June 28, 2001.
Further, this Management’s Discussion and Analysis ofFinancial Condition and Results of Operations includes
forward-looking statements concerning the expected future
performance of Toyota Industries Corporation (“Toyota
Industries”). Please refer to “Cautionary Statement with
Respect to Forward-Looking Statements” at the beginning of
this annual report. This cautionary statement pertains to thereport as a whole.

Finance

36
TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2001

Toyota Industries’ financial policy is to ensure sufficient
funds for its business activities, to maintain appropriate
liquidity and to sustain healthy balance sheets.
Currently, in principle, funds for capital expenditures andother long-term capital needs are raised from retained
earnings and long-term debt, and working capital needs are
met through short-term bank loans. Long-term debt
financing is carried out mainly through issuances of bonds,
including convertible bonds.
The 7.4 billion Swedish krona (¥89.2 billion) used for theacquisition of BT Industries AB (“BT Industries”) in June
2000 was raised temporarily through issuances ofcommercial paper, to be replaced later through issuances ofbonds and new shares. Toyota Industries issued ¥80.0 billion
in commercial paper for the tender offer. Then, in July 2000,
Toyota Industries carried out its eighth and ninth issuancesof bonds without collateral, ¥20.0 billion each for a total of¥40.0 billion. The funds raised in this way were used mainly
to redeem ¥60.0 billion in commercial paper. In addition, in
October 2000, Toyota Industries carried out a capitalincrease by issuing 30 million shares, comprising 20 million
shares for distribution in Japan and 10 million for
distribution outside Japan, at the market price. This raised a
total of ¥55.7 billion. Part of these funds was used to redeem
the remaining ¥20.0 billion in commercial paper. The
decision to issue the new shares was made based on acomprehensive management evaluation made from a
medium-term perspective. The intention was to maintain asound financial condition and expand Toyota Industries’
range of shareholders and investors worldwide. Part of thefunds raised through the issuance of new shares has been
appropriated as capital expenditures for the car airconditioning compressor business and for other operations.
Toyota Industries’ financial condition remains solid.
Through the use of cash and cash equivalents, short-term
investments and other current assets, as well as free cash

flows and fund-raising from financial institutions, Toyota
industries believes that it will be able to provide sufficient
funds for the working capital necessary to expand existing
operations and develop new projects, and for future capital
expenditures.

Financial Position
Total assets as of the end of the fiscal year ended March 31,
2001 stood at ¥1,896.6 billion (of which BT Industries
accounted for ¥193.8 billion), an increase of ¥1,183.7 billion(172.6%) from the previous fiscal year. This is due largely toa sharp increase in the valuation of investment in securities
following the application of new accounting standards forfinancial instruments (fair value accounting). It also reflects
an increase in assets and liabilities accounts that
accompanied the consolidation of BT Industries.
Current assets increased ¥106.1 billion (54.3%) to ¥301.4
billion (of which BT Industries accounted for ¥65.9 billion).
This is attributable mainly to increases in trade notes andaccounts receivable, inventories, and cash and cash
equivalents that accompanied the consolidation of BT
Industries. Trade notes and accounts receivable increased¥31.0 billion (46.6%) to ¥97.5 billion. Inventories increased¥22.6 billion (74.6%) to ¥52.8 billion, while the inventory
turnover period increased from 16.8 days to 19.7 days. Cashand cash equivalents increased ¥18.0 billion (23.2%) to¥95.3 billion.

Total Assets, Shareholders’ Equity andShareholders’ Equity Ratio(¥ Billion)

(%)

2,000

80

1,500

60

1,000

40

500

20

0
FY

0

97

98

99

Total Assets
Shareholders’ Equity
Shareholders’ Equity Ratio (%)

00

01¥951.3 billion (including BT Industries’ ¥99.7 billion). This isdue mainly to the application of fair value accounting and anaccompanying net unrealized gain on other securities of¥558.7 billion (net of tax). The capital increase by issuanceof new shares at market price resulted in an addition of¥27.8 billion each to common stock and capital surplus,
making a combined addition of ¥55.7 billion to shareholders’equity. Shareholders’ equity per share increased to ¥3,036.77
from ¥1,116.62 as of March 31, 2000.

Cash FlowsNet cash provided by operating activities was ¥78.4 billion,
an increase of ¥10.3 billion (15.2%) over the previous fiscal
year. Net cash used in investing activities increased ¥88.7
billion (132.0%) to ¥155.9 billion. Net cash provided byfinancing activities increased ¥67.0 billion (243.5%) to ¥94.5
billion. As a result, cash and cash equivalents increases ¥18.0
billion (23.2%) to ¥95.3 billion, which includes a slight
upward adjustment for the effect of translation adjustmentsof cash and cash equivalents.

Cash Flows(¥ Billion)
100

37
TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2001

Property, plant and equipment increased ¥36.0 billion(13.9%) to ¥294.7 billion (including BT Industries’ ¥19.1
billion). More than half of this increase is attributable to anincrease in machinery, equipment and vehicles, and buildings
and structures due to the addition, after consolidation, of BT
Industries’ machinery, equipment and vehicles, and buildings
and structures.
In intangible assets, due to the acquisition of BT
Industries, goodwill is newly accounted for at ¥86.4 billion(including BT Industries’ portion, and reflecting ¥2.3 billion inamortization of goodwill during the fiscal year). Goodwill forthe acquisition of BT Industries will be amortized using thestraight-line method over a period of 20 years.
Investments and other assets increased ¥965.9 billion(439.6%) to ¥1,185.6 billion (including BT Industries’ ¥22.2
billion). This is attributable largely to a reevaluation (¥950.4
billion effect, gross of tax) at market prices as of March 30,
2001 of shares of Toyota Group companies, including Toyota
Motor Corporation (“TMC”), and other shares held by Toyota
Industries, due to the adoption of fair value accounting. Theseshares had been valued at their acquisition cost up to theprevious fiscal year. In total, investment in securities increased¥954.0 billion (498.9%) to ¥1,145.2 billion.
Toyota Industries, primarily in its Automobile Segment, hasa very close business relationship with each of the Toyota
Group companies, and it recognizes that holding securities ofeach of these business partners contributes to mutual
management stability. From a long-term point of view, Toyota
Industries firmly believes that maintaining and improving thecompetitive strength of the Toyota Group raises its
profitability and contributes to increasing its corporate value.
Current liabilities increased ¥67.7 billion (46.4%) from theprevious fiscal year to ¥213.6 billion (including BT Industries’¥42.7 billion). This is due mainly to increases in trade notes
and accounts payable and short-term bank loans reflecting
the consolidation of BT Industries. Trade notes and accounts
payable was ¥103.4 billion, an increase of ¥25.3 billion(32.4%). Short-term bank loans increased by ¥12.9 billion(125.2%) to ¥23.2 billion.
Long-term liabilities were ¥686.6 billion (including BT
Industries’ ¥50.5 billion), an increase of ¥483.2 billion(237.5%) from the previous fiscal year. The main reason forthis increase is the application of fair value accounting, which
added an amount of ¥391.6 billion, and increased deferred tax
liabilities by ¥385.5 billion. Other significant factors in thisincrease are ¥40.0 billion in issuances of bonds without
collateral, and an increase in long-term bank loans
accompanying the consolidation of BT Industries. Long-term
debt increased ¥87.4 billion (48.3%) to ¥268.5 billion.
Shareholders’ equity increased ¥635.0 billion (200.8%) to

50

0

(50)

(100)

(150)

(200)
FY

97

98

99

00

01

Net Cash Provided by Operating Activities
Net Cash Used in Investing Activities
Net Cash Provided by (Used in) Financing Activities

The increase in net cash provided by operating activities
reflects the following: factors reducing cash and cash
equivalents were outweighed by factors augmenting cash
and cash equivalents. Reducing factors include a reduced
increase in payables and a decrease in equity in net loss ofaffiliates, while augmenting factors include an increase inincome before income taxes, an increase in net payments ofallowance for retirement benefits (included in others, net), arise in increase in receivables, and an increase inManagement’s Discussion and Analysis ofFinancial Condition and Results of Operations
depreciation and amortization (including amortization of
goodwill). The increase in net payments of allowance forretirement benefits is the result of the requirement tocompensate for the aggregate funding shortfall in retirement
benefit obligation that accompanied the application of new
accounting standards for retirement benefits, as well as the
addition of provision for retirement and severance benefits
for directors and corporate auditors that accompanied achange in accounting. Depreciation and amortization
increased ¥3.7 billion (8.7%) to ¥46.5 billion.

accounted for by ¥61.6 billion recorded in goodwill
pertaining to the acquisition of BT Industries. Payments forpurchases of investment securities were ¥9.7 billion, adecrease of ¥6.4 billion (40.0%). Approximately half of thisamount was for additional purchases of shares of Toyota
Group companies, such as DENSO Corporation. About aquarter was for purchases of bonds.
Capital Expenditures(¥ Billion)
150

Depreciation and Amortization(¥ Billion)
50

100

38
40

TOYOTA INDUSTRIES CORPORATION

50

30

20
0
FY

10

0
FY

97

98

99

00

01

ANNUAL REPORT 2001

Automobile
Materials Handling Equipment
Textile Machinery*
Others (Including Corporate or Elimination)

An amount of ¥86.1 billion, more than 50% of the net
cash f low used in investing activities, is accounted for by
payments for acquisition of subsidiaries’ stock resulting in achange in scope of consolidation. Of this amount, ¥86.0
billion was utilized for the acquisition of BT Industries’
shares. This type of payment did not occur in the previous
fiscal year. Payments for purchases of tangible assets were
¥55.1 billion, an increase of ¥3.0 billion (5.8%).
In this connection, capital expenditures increased ¥82.6
billion to ¥127.3 billion (184.4%). This figure includes theamount recorded in goodwill pertaining to the acquisition of
BT Industries. By principal segment, capital expenditures
includes the following: in the Automobile Segment, ¥54.7
billion, an increase of ¥21.7 billion (65.6%); in the Materials
Handling Equipment Segment, ¥70.7 billion, an increase of¥65.3 billion (1,202.5%); and in the Textile Machinery
Segment, ¥0.3 billion, a decrease of ¥0.7 billion (69.3%). In
the Automobile Segment, more than half of the amount wasused to strengthen Toyota Industries’ production capability
for car air-conditioning compressors, while most of theamount in the Materials Handling Equipment Segment was* From fiscal 1999, the Textile Machinery Segment has been separated
from the Others Segment.

97

98

99

00

01

Automobile
Materials Handling Equipment
Textile Machinery*
Others (Including Corporate or Elimination)

Net cash provided by financing activities includes ¥55.2
billion in proceeds from issuances of common stock. There
were no such proceeds in the previous fiscal year. In
addition, proceeds from issuances of bonds increased ¥10.0
billion (33.3%) to ¥39.8 billion. In this connection, ¥80.0
billion received from issuances of commercial paper in June
2000 was fully redeemed by October 2000 using theproceeds from the issuances of bonds and common stock.
These funds were raised primarily for the acquisition of BT
Industries. In addition, Toyota Industries paid ¥5.0 billion in
cash dividends (including for minority shareholders).

Overview of Performance
Management of Foreign Exchange Risks
The average exchange rate of the yen to the U.S. dollar(TTM) in the fiscal year ended March 31, 2001 was ¥110.58,
a year-on-year appreciation of ¥1.04 (0.9%).
Overseas sales increased ¥106.8 billion (55.6%) over theprevious year to ¥298.8 billion, and account for 38.9% of
total sales, an increase of 8.2 percentage points. This sharp
rise in the ratio to total sales is due primarily to the large
expansion of sales in Europe and North America whichaccompanied the consolidation of BT Industries’ results into

Toyota Industries’ accounts, which started in the second halfof the fiscal year under review.
For the future, as the pace of globalization accelerates,
Toyota Industries expects the consolidation of BT Industries
into its annual accounts and the integration of production
and sales in the materials handling equipment business toresult in an upward trend in overseas sales and a further risein the ratio of overseas sales to total sales. To hedge foreignexchange risks arising from the export and import ofmaterials, parts and products, Toyota Industries uses
derivative instruments (interest rate swaps and foreign
currency forwards). Toyota Industries will also expand
efforts to procure materials and parts and engage inproduction in areas closer to overseas markets in order toreduce inventories and cut costs.

(¥ Billion)

(%)

800

40

Net Sales
As a result of the factors mentioned above, net sales
increased ¥141.6 billion (22.6%) from the previous fiscal
year to ¥767.4 billion. BT Industries’ net sales contributed¥69.3 billion to this figure.
Cost of Sales andSelling, General and Administrative Expenses

600

30

20

200

10

0
FY

0

97

98

99

00

01

Net Sales
Overseas Sales
Overseas Sales Ratio (%)

Operating Performance
Although private sector capital investment in Japan showedsigns of a slight recovery during the first half of the fiscal
year under review, in the second half of the year an
economic slowdown in the United States and a slump in theJapanese stock market dampened corporate production
activity. These factors, coupled with sluggish consumer
spending and other negative factors, led to continued
stagnation of the Japanese economy. Outside Japan, although
the booming U.S. economy began to falter, the European andAsian economies generally held firm.
In this operating environment, Toyota Industries focused
its efforts on product quality and retaining the trust of its
customers. It also made efforts to strengthen its corporate
structure by stepping up the development of attractive

ANNUAL REPORT 2001

400

Due mainly to the consolidation of BT Industries’ ¥49.8
billion in cost of sales, Toyota Industries’ cost of sales for the
fiscal year under review increased ¥105.4 billion (18.9%) to¥663.0 billion. The ratio of cost of sales to net sales
improved from 89.1% to 86.4%, due primarily to the effectsof rises in productivity and capacity utilization ratio driven
by increased production, cost reduction activities and theconsolidation of BT Industries. Selling, general andadministrative expenses increased ¥17.7 billion (45.0%) to¥57.1 billion. (BT Industries accounted for ¥16.2 billion ofthis figure.) The ratio of selling, general and administrative
expenses to net sales increased from 6.3% to 7.4%, largely asa result of the consolidation of BT Industries. These
expenses include ¥7.1 billion for labor and ¥3.1 billion foradvertising and publicity. The consolidation of BT Industries
brought amortization of goodwill for the fiscal year underreview (including BT Industries’ portion) to ¥2.3 billion.
Research and development expenses, which are included
in selling, general and administrative expenses andmanufacturing cost, increased ¥2.1 billion (8.9%) to ¥26.2
billion, representing 3.4% of net sales. By principal segment,
research and development expenses were ¥16.3 billion in
the Automobile Segment, ¥7.9 billion in the Materials
Handling Equipment Segment (of which BT Industries
accounted for ¥1.3 billion) and ¥0.6 billion in the Textile
Machinery Segment.

39
TOYOTA INDUSTRIES CORPORATIONNet Sales, Overseas Sales andOverseas Sales Ratio

products, aggressively conducting sales promotions, andcarrying out a company-wide program to reduce costs. In
addition, as a result of the consolidation of BT Industries’
results starting in the second half of the fiscal year, Toyota
Industries’ net sales increased 22.6% and operating income
increased 63.9%—for the second consecutive year. Both sales
and profit recorded historic highs. The increase in net sales
is due primarily to the consolidation of BT Industries andhealthy growth in the production of car air-conditioning
compressors. The increase in operating income is due
largely to the growth in net sales, the success of efforts to
reduce costs and raise productivity, and the consolidation of
BT Industries.

Management’s Discussion and Analysis ofFinancial Condition and Results of Operations
R&D Expenses andR&D Expenses to Net Sales Ratio(¥ Billion)

40

(%)

30

6

20

4

10

2

0
FY

0

97

98

99

00

01

TOYOTA INDUSTRIES CORPORATION

R&D Expenses
R&D Expenses to Net Sales Ratio (%)

Operating Income
Due to the factors summarized above, operating income forthe fiscal year under review increased ¥18.4 billion (63.9%)
to ¥47.3 billion. (After deducting amortization of goodwill,
BT Industries’ contribution was ¥3.3 billion.) The operating
income ratio increased from 4.6% to 6.2%.

ANNUAL REPORT 2001

Operating Income andOperating Income Ratio(¥ Billion)

(%)

50

10

40

8

30

6

20

4

10

2

0
FY

0

an increase of ¥34.2 billion (8.1%), due to increases in sales
both in Japan and outside of Japan. In the vehicle business,
although the number of Sprinter Carib (Corolla Wagon) units
sold decreased from the previous fiscal year, production of
the Vitz (Yaris) increased and sales continued to grow, which
led to a ¥4.4 billion (2.3%) increase in net sales for thisbusiness to ¥195.9 billion. In the engine business, the start ofproduction in August 2000 of the 2UZ-type gasoline engine
contributed significantly to the ¥10.2 billion (11.1%) increasein net sales to ¥102.1 billion. In addition, an increase inproduction capacity in Japan and sales expansion in North
America and Europe led to strong growth in the car airconditioning compressor business, whose net sales rose
¥19.3 billion (16.0%) to ¥139.6 billion. As a result, operating
income in the Automobile Segment increased ¥4.1 billion(16.8%) to ¥28.5 billion.
In the Materials Handling Equipment Segment, sales inJapan recovered and steady growth was achieved in sales inNorth America and Europe. Continued healthy demand inEuropean and North American markets led to an increase in
the revenue and earnings of BT Industries, which wasconsolidated into Toyota Industries accounts starting in thesecond half of the fiscal year under review. As a result of theabove, net sales increased ¥87.4 billion (58.6%) to ¥236.5
billion. Operating income for this segment increased ¥8.8
billion (153.0%) to ¥14.5 billion.
In the Textile Machinery Segment, a recovery in capital
investment in Asia, Toyota Industries’ leading market, createda positive operating environment. Toyota Industries’
energetic sales and service activities led to increased exports
to China, Indonesia and Pakistan. As a result, net sales
increased ¥10.1 billion (43.7%) to ¥33.2 billion. The increasein net sales plus a major streamlining of operations leading to
reduced costs and expenses resulted in operating income, forthe first time in many years, of ¥35 million. This compareswith an operating loss of ¥3.0 billion for the previous fiscal
year.
Non-Operating Income and Expenses

97

98

99

00

01

Operating Income
Operating Income Ratio (%)

Operating Performance Highlights by
Business Segment
The performances of Toyota Industries’ main businesssegments are described below.
In the Automobile Segment, net sales were ¥457.6 billion,

Non-operating income for the fiscal year under review
decreased ¥69 million (0.4%) to ¥16.2 billion. Realized gains
on sales of securities decreased ¥5.1 billion (87.5%) to ¥0.7
billion. However, including BT Industries’ contribution of¥3.3 billion, interest income increased ¥3.3 billion (370.8%)
to ¥4.2 billion.
Non-operating expenses increased ¥1.0 billion (5.6%)
from the previous fiscal year to ¥19.0 billion. Although
equity in net loss of affiliates decreased ¥4.0 billion (80.7%)
to ¥1.0 billion, interest expenses increased ¥3.9 billion(154.6%) to ¥6.4 billion. This latter increase was largely theIncome before Income Taxes

The adoption of new accounting standards for retirement
benefits, which became effective in the fiscal year started
April 1, 2000, led to an aggregate funding shortfall of ¥19.1
billion in retirement benefit obligation, and the whole
shortfall was disposed of as an extraordinary loss(“cumulative effect of change in accounting standards for
retirement benefits”). To compensate for this loss, ¥15.1
billion was posted as an extraordinary gain (“gain on
securities contribution to employee retirement benefit
trust”) by an employee retirement benefit trust establishedthrough the contribution of certain investment securities
held by Toyota Industries.
Also, a change was made in the treatment of Toyota
Industries’ retirement and severance benefits for directors
and corporate auditors. This had been treated as an expense
recorded at the time of payment. In order to make period
earnings more appropriate and the financial statements
healthier from the fiscal year under review, Toyota
Industries changed the accounting method to provide for
actual amounts payable during the term based on its internal
rules. Accordingly, a ¥2.3 billion provision for retirement
and severance benefits for directors and corporate auditors
was recorded as an extraordinary loss.

Income before income taxes was ¥38.2 billion (including BT
Industries’ contribution of ¥3.4 billion after deducting
amortization of goodwill), an increase of ¥11.0 billion(40.7%) over the previous fiscal year.

Disposition of the Shortfall in Retirement Benefit
Obligation
In accordance with new accounting standards for retirement
benefits, the present total amount of Toyota Industries’
benefit obligation (including lump-sum severance payment
obligation) as of April 1, 2000 was calculated at ¥62.0 billion.
As of the same date, the aggregate fair market value ofToyota Industries’ pension assets was ¥24.2 billion, and theamount of allowance for retirement benefits recorded in the
consolidated balance sheets was ¥18.8 billion. Accordingly,

Income Taxes
Net of current and deferred income taxes was ¥14.8 billion,up ¥2.2 billion (17.8%) over the previous fiscal year. The
ratio of income taxes to income before income taxes, i.e.,
effective income tax rate, decreased from 46.3% to 38.8%.
Net Income
Net income for the fiscal year under review was ¥22.6
billion (including BT Industries’ contribution of ¥2.0 billion
after deducting amortization of goodwill), an increase of¥8.9 billion (65.4%). The ratio of net income to net sales, i.e.,
return on sales (ROS), increased from 2.2% in the previous
fiscal year to 2.9%. However, the ratio of net income toshareholders’ equity (using the average of such amounts at
the end of the fiscal year under review and the previous
fiscal year), i.e., return on equity (ROE), decreased from 4.4%
to 3.6%. This is because the application of fair value
accounting resulted in a sharp increase in shareholders’equity. Net income per share (EPS) increased from ¥48.32 to¥75.90, and diluted net income per share increased from
¥43.18 to ¥67.77.

41

ANNUAL REPORT 2001

Extraordinary Gains and Losses

Ordinary Income

TOYOTA INDUSTRIES CORPORATION

Ordinary income increased ¥17.3 billion (63.9%) over theprevious fiscal year to ¥44.5 billion. This included ¥3.4
billion contributed by BT Industries after deducting
amortization of goodwill.

the aggregate funding shortfall in retirement benefit
obligation as of that date was ¥19.1 billion. Toyota Industries
disposed of the whole shortfall by recording the total
amount as “cumulative effect of change in accounting
standards for retirement benefits.” To compensate, a portionof Toyota Industries’ shares in DENSO Corporation was
contributed to an employee retirement benefit trust andaccounted for as a pension asset. The difference between
the fair value and acquisition cost of these shares, ¥15.1
billion, was recorded as gain on securities contribution toemployee retirement benefit trust. As a result of thisdisposition of the shortfall in retirement benefit obligation,
income before income taxes decreased ¥4.0 billion.

result of ¥3.3 billion in interest expenses due to theconsolidation of BT Industries and ¥0.6 billion in interest
expenses for the eighth and ninth issuances of bonds
without collateral. The large decrease in equity in net loss ofaffiliates is due primarily to a better performance, including
expanded production volume and improved rejection rate ofproducts, at ST Liquid Crystal Display Corp.

Management’s Discussion and Analysis ofFinancial Condition and Results of Operations
Net Income per ShareFirst Category: Vehicle Business and Engine Business<Mission>
As a member of the Toyota Group, to contribute to the highquality and technological advances of TOYOTA-brand cars.

(¥)
80

Second Category: Car Air-Conditioning Compressor
Business, Materials Handling Equipment Business andTextile Machinery Business<Mission>
To aggressively expand global markets through thedevelopment of products using Toyota Industries’ unique
technologies.

60

40

20

0
FY

42

97

98

99

00

Third category: Electronics Business<Mission>
To be a key source of Toyota Industries’ future growth

01

Basic
DilutedTOYOTA INDUSTRIES CORPORATIONNet Income, ROE and ROS

ANNUAL REPORT 2001(¥ Billion)

(%)

25

10

20

8

15

6

10

4

5

2

0
FY

0

97

98

99

00

01

Net Income
ROE (%)ROS (%)

Strategies and Projections
Business Strategies
Since its establishment as a textile machinery manufacturer
75 years ago, Toyota Industries has expanded the scope of its
business activities. Following successful diversification,
Toyota Industries is poised for innovation and growth in the
21st century. Toyota Industries’ strategic lines of business are
currently classified into three categories on the basis of their
specific characteristics. The operational strategies for thesecategories are based on the mission assigned to each.

The first category, the vehicle business and the engine
business, handles mainly the production of vehicles
consigned by TMC and production of engines for TOYOTAbrand cars. To play a more important role in the Toyota
Group, Toyota Industries is making continual efforts toimprove its production technologies and strengthen quality
control. For Toyota Industries, this field of business provides
a stable platform for its own growth, while also contributing
to the success of the Toyota Group. Aiming to play a more
important role in the development and production of
TOYOTA-brand cars and engines, Toyota Industries will step
up its efforts to strengthen its research and development
capability and improve productivity. In its work in thiscategory for TMC, Toyota Industries will also makeproposals for the design and launch of auto parts andcompact cars, and actively work to ensure that suchproposals are adopted.
The second category, which comprises the car airconditioning compressor business, the materials handlingequipment business and the textile machinery business, isidentified as a business field in which Toyota Industries must
cultivate further development of global markets by precisely
grasping customers’ needs and developing and marketingstate-of-the-art products that meet these needs through theapplication of original technologies. Firmly believing thattechnological improvement is the key to competitiveness,
Toyota Industries strives to strengthen its technologicaldevelopment capabilities by fostering the training anddevelopment of superior engineers. Since the car airconditioning compressor business and the materials
handling equipment business are positioned as corebusinesses, Toyota Industries places a priority on them in its
allocation of management resources. In addition, on April 1,
2001, Toyota Industries established TOYOTA MaterialDespite continuing deregulation and further pump-priming
measures that may be taken by the Japanese government, theshort-term outlook for the Japanese economy remains
problematic. In the face of deflation and rising
unemployment, it is uncertain whether consumer
confidence will increase enough to kick-start the economy
into growth. There is a fear that a sustained economic
slowdown in the United States will adversely affect Japanand other exporting countries.
For the fiscal year ending March 31, 2002, Toyota
Industries projects a 19.9% year-on-year increase in net sales
to ¥920 billion. Income before income taxes will increase
38.7% to ¥53 billion and net income will increase 36.9% to¥31 billion. Toyota Industries expects these increases to beachieved by all-out efforts in launching new products,
energetic sales and service activities, and improvements incosts and expenses. In addition, Toyota Industries
anticipates that the consolidation of BT Industries for acomplete fiscal year and the integration of production andsales in the materials handling equipment business will also

Dividend Policy
Toyota Industries’ dividend policy is based on the underlying
goals of strengthening competitiveness, augmenting
corporate value and maintaining stable dividends. Toyota
Industries gives full consideration to business performance,
its dividend payout ratio and other factors as it makes every
effort to meet the expectations of shareholders. Toyota
Industries views retained earnings as an important resource
for securing future profits for its shareholders, and it intends
to strategically invest portions of those earnings in researchand development and future growth, and to aggressively
pursue business expansion and strengthen its corporate
constitution.
A year-end cash dividend of ¥9.0 per share was approvedat Toyota Industries’ Ordinary General Meeting of
Shareholders held on June 28, 2001. Including the interim
cash dividend of ¥8.0 per share, cash dividends for the year
totaled ¥17.0 per share, an increase of ¥1.0 per share over theprevious fiscal year. The dividend payout ratio was 24.4%.

Change in Share Trading Unit
To broaden the range of investors in Toyota Industries’ stockand to promote the trading of its shares, effective August 1,
2001, Toyota Industries lowered the minimum trading unitof its shares from 1,000 to 100. This alteration was made inaccordance with a partial revision of Toyota Industries’
Articles of Incorporation approved at the Ordinary General
Meeting of Shareholders held on June 28, 2001. As a result,
starting on August 1, 2001, Toyota Industries’ shares listed on
Tokyo and Nagoya Stock Exchanges and Osaka Securities
Exchange have been traded in units of 100 shares.

43

ANNUAL REPORT 2001

Forecasts of Consolidated Results
for the Fiscal Year Ending March 31, 2002

contribute to these increases. Toyota Industries also projects¥93 billion in capital expenditures and ¥52 billion in
depreciation and amortization.

TOYOTA INDUSTRIES CORPORATION

Handling Company as a uniquely independent company
within the larger company. The main purpose of this move
was to strengthen independent management in the unit bygiving it the authority needed to respond flexibly andspeedily to changes in the business environment and to
emerge a winner in the face of intensifying global
competition.
The third category, the electronics business, which
includes the production of LCDs, will also be made a priority
in Toyota Industries’ allocation of management resources inorder to develop this activity into a core business in the
future. This is a field characterized by rapid advances intechnological innovation. Toyota Industries recognizes that it
must strengthen its research and development capability tomaintain competitiveness in this field. Continuing capital
expenditures will be required to do this. Swift decisionmaking is also required for success in this business, which
depends on rapidly getting production on track, improving
the rejection rate of products and achieving a return on
investment. Aiming to participate in the electronics businessand expand operations in the short term, and to diversify risks
by entering new areas of this business, Toyota Industries has
not only carried out independent product development, but
has also entered into joint ventures with both Sony
Corporation and Ibiden Co., Ltd. Toyota Industries believes
that this strategy has been successful to date and views thiscategory as a key source for future corporate growth.

Consolidated Balance Sheets
Toyota Industries Corporation
As of March 31, 2001 and 2000

Thousands of
U.S. dollars(Note 1)Millions of yen

2001

2000

95,297¥ 77,332

Trade notes and accounts receivable (Notes 8 and 10)

97,45566,458786,562

Short-term investments (Note 5)

22,6256,020

182,607

Inventories (Note 6)

52,76330,215425,851

Deferred tax assets (Note 15)

8,686

4,556

70,105

Other current assets

25,684

11,096207,296

Less — allowance for doubtful accounts(1,159)(388)(9,354)

Total current assets

301,351

195,289

2,432,211

Buildings and structures (Note 8)

88,85883,772

717,175

Machinery, equipment and vehicles (Notes 8 and 16)

135,406

117,066

1,092,865

Tools, furniture and fixture (Note 16)

14,55013,121

117,433

Land (Note 8)

42,10336,456

339,814

Construction in progress

13,826

8,291

111,591

Total property, plant and equipment

294,743

258,706

2,378,878

Software

1,580

1,523

12,752

Goodwill

86,407–

697,393

Total intangible assets

87,9871,523

710,145

1,145,176

191,2029,242,744

Long-term loans

8,106

14,62265,424Long-term prepaid expenses

5,354

1,576

43,212

Deferred tax assets (Note 15)

1,374

5,311

11,090

Other investments and other assets (Note 14)

25,663

7,044

207,127

(112)

(51)

(904)

1,185,561

219,704

9,568,693

1,568,291

479,933

12,657,716–

10,692–¥1,869,642¥685,914$15,089,927

ASSETS

2001

Current assets:
Cash and cash equivalents (Note 4)

44

¥

$

769,144TOYOTA INDUSTRIES CORPORATION

Fixed assets:
Property, plant and equipment:

ANNUAL REPORT 2001

Intangible fixed assets:

Investments and other assets:
Investment in securities (Notes 5 and 8)

Less — allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Translation adjustments
Total assets
The accompanying notes are an integral part of these financial statements.

Thousands of
U.S. dollars(Note 1)Millions of yen

LIABILITIES AND SHAREHOLDERS’ EQUITY

2001

2001

2000

Current liabilities:¥ 103,444¥ 78,113

Short-term bank loans (Note 8)

23,193

10,299187,191

Other payables

17,114

10,579138,128

Accrued expenses

32,22019,594260,048

Accrued income taxes

12,364

8,021

99,790

Deposits received from employees

18,03017,841

145,521

Other current liabilities (Note 8)

7,235

1,436

58,394

Trade notes and accounts payable (Note 10)$

834,89945
1,723,971

Long-term debt (Notes 7 and 8)

268,495

181,072

2,167,030

Deferred tax liabilities (Note 15)

387,548

2,042

3,127,910

Allowance for retirement benefits (Note 14)

25,534

18,815

206,086–

103–

Other long-term liabilities

5,041

1,387

40,685

Total long-term liabilities

686,618

203,419

5,541,711

Total liabilities

900,218

349,3027,265,682

Minority interest in consolidated subsidiaries

18,126

20,319146,295

Long-term liabilities:

Negative goodwill

Shareholders’ equity (Note 11):
Common stock, par value ¥50:
Authorized — 1,091,245,000 shares—

313,296,225 shares in 2001

68,019–548,983—

283,296,225 shares in 2000–

40,178–

Capital surplus

88,51360,673

714,391

Retained earnings

233,368

215,463

1,883,519

Net unrealized gains on other securities

558,673–

4,509,064

Translation adjustments

2,746

–

22,162

Treasury stock at cost

(21)

(21)

(169)

951,298

316,293

7,677,950¥1,869,642¥685,914$15,089,927

IssuedTotal shareholders’ equity
Total liabilities and shareholders’ equity

ANNUAL REPORT 2001

145,883

TOYOTA INDUSTRIES CORPORATION

213,600

Total current liabilities

Consolidated Statements of Income
Toyota Industries Corporation
For the years ended March 31, 2001, 2000 and 1999

Thousands of
U.S. dollars(Note 1)Millions of yen

2001

2000

1999

2001

Net sales¥767,383¥625,773¥558,876$6,193,567

Cost of sales (Note 12)663,013557,554495,789

5,351,194

Gross profit

104,370

68,21963,087842,373

57,06639,352

38,273

460,581

47,304

28,867

24,814

381,792

Interest income

4,242

901

1,000

34,237

Dividends income

6,957

6,864

7,560

56,150

Other non-operating income

5,050

8,554

3,629

40,759Interest expenses

6,446

2,532

2,041

52,026

Other non-operating expenses

12,582

15,492

11,790101,550

44,525

27,162

23,172359,362

15,080––121,711

19,056––

153,801

directors and corporate auditors

2,329

–

–

18,797

Income before income taxes

38,22027,162

23,172

308,475

Income taxes — current (Note 15)

21,161

15,395

11,904

170,791

Income taxes — deferred (Note 15)(6,338)(2,812)–(51,154)

760

893

877

6,134

¥ 22,637¥ 13,686¥ 10,391$ 182,704

Selling, general and administrative expenses (Note 12)
Operating income
Non-operating income:46

Non-operating expenses:

TOYOTA INDUSTRIES CORPORATION

Ordinary income
Extraordinary gains:
Gain on securities contribution to employee retirement
benefit trust
Extraordinary losses:
Cumulative effect of change in accounting standards for
retirement benefits
Provision for retirement and severance benefits for

ANNUAL REPORT 2001

Minority interest in consolidated subsidiaries
Net income

Yen

U.S. dollars

Net income per share — basic¥75.90¥48.32¥36.30$0.61

Net income per share — diluted

67.77

43.18

36.62

0.55

Cash dividends per share

17.00

16.00

16.00

0.14

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

Consolidated Statements of Shareholders’ Equity
Toyota Industries Corporation
For the years ended March 31, 2001, 2000 and 1999

Numberof shares(Thousands)

Commonstock

Legalreserve(Note 11)

CapitalsurplusMillions of yen
Retained Net unrealized
earnings
gain on other Translation(Note 11)adjustments
securities

287,752¥40,133¥60,628¥ 8,092¥195,246–––(8,092)

8,092

–
–
–

–
–
–

–
–
–

–
–
–

–
–
(4,500)
44
–

–
–
–
45
–

–
–
–
45
–

Balance at March 31, 1999
Increase due to increase inconsolidated subsidiaries
Cumulative effect of the adoption oftax effect accounting (Note 3)
Net income
Cash dividends
Bonuses to directors andcorporate auditors
Treasury stock owned by
newly consolidated subsidiaries

283,296

40,178––

Balance at March 31, 2000
Net income
Cash dividends
Bonuses to directors andcorporate auditors
Capital increase by issuance of shares
Adoption of the accounting standards
for financial instruments (Note 3)
Adoption of the amended accounting
standards for foreign currencytransactions (Note 3)

283,296–––
30,000

Balance at March 31, 2001

¥ (2)

–

–

–

701
10,391(4,604)

–
–
–

–
–
–

–
–
–

–
–
–
–
–

(209)
(84)
(9,225)
–
–

–
–
–
–
–

–
–
–
–
–

–
–
–
–
1

60,673–200,308

–

–

(1)

47

–

–

–

702

–

–

–

–
–
–

–
–
–

–
–
–

–
–
–

5,487
13,686(4,533)

–
–
–

–
–
–

–
–
–

–

–

–

–

(187)

–

–

–

–

–

–

–

–

–

(20)

40,178––60,673–––––

215,463
22,637(4,533)

–
–
–

–
–
–

(21)
–
–

–
27,841–
27,840

–
–

(199)
–

–
–

–
–

–
–

–

–

–

–

–

558,673

–

–

–

–

–

–

–

–

2,746

–

313,296¥68,019¥88,513–¥233,368¥558,673¥2,746

¥(21)

¥

¥

–

¥

Thousands of U.S. dollars
Legal
reserve(Note 11)Retainedearnings(Note 11)

Net unrealized
gain on other Translation
securities
adjustments

Commonstock

Capitalsurplus

Balance at March 31, 2000
Net income
Cash dividends
Bonuses to directors andcorporate auditors
Capital increase by issuance of shares
Adoption of the accounting standards
for financial intruments (Note 3)
Adoption of the amended accounting
standards for foreign currencytransactions (Note 3)$324,278––$489,693––$– $1,739,007 $–
182,704–(36,586)––––
224,705–
224,698––(1,606)
–

–

–

–

–

–

–

Balance at March 31, 2001

$548,983$714,391

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

$

Treasurystock
at cost–––$(169)
–
–

–
–

–
–

–
–

–

4,509,064

–

–

–

–

22,162–$– $1,883,519 $4,509,064$22,162$(169)

ANNUAL REPORT 2001–

TOYOTA INDUSTRIES CORPORATION

Balance at March 31, 1998
Reclassification of legal reserve
to retained earnings (Note 3)
Increase due to additions of
newly consolidated subsidiaries
Net income
Cash dividends
Bonuses to directors andcorporate auditors
Decrease due to increase in affiliates
Retirements of shares
Conversions of convertible bonds
Other

Treasurystock
at costConsolidated Statements of Cash Flows
Toyota Industries Corporation
For the years ended March 31, 2001, 2000 and 1999

Thousands of
U.S. dollars(Note 1)Millions of yen

48

Cash flows from operating activities:
Income before income taxes
Adjustments to reconcile income before income taxes
to net cash provided by operating activities:
Depreciation and amortization
Decrease in allowance for doubtful accounts
Interest and dividends income
Interest expenses
Equity in net loss of affiliates(Increase) decrease in receivables
Increase in inventories
Increase (decrease) in payables
Others, net
Subtotal

TOYOTA INDUSTRIES CORPORATIONInterest and dividends income received
Interest expenses paid
Income taxes paid

2001

2000

1999

2001

¥ 38,220¥ 27,162¥ 23,172

46,454(129)(11,199)6,446
973(2,450)(3,922)
8,178
8,914
91,48542,681(36)(7,765)2,532
5,036(8,427)(1,998)14,563549
74,29734,500(304)(8,560)2,041
3,763
11,896(889)(13,730)2,309
54,198374,931(1,041)(90,387)
52,026
7,853(19,774)(31,655)
66,00571,945738,378

11,212(6,155)(18,129)

7,779(2,532)(11,486)

8,575(2,041)(16,599)

90,492(49,677)(146,320)

78,41368,05844,133632,873$

308,475

ANNUAL REPORT 2001

Net cash provided by operating activities
Cash flows from investing activities:
Payments for purchases of marketable securities
Proceeds from sales of marketable securities
Payments for purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Payments for purchases of investment securities
Proceeds from sale of investment securities
Payments for acquisition of subsidiaries’ stock
resulting in change in scope of consolidation
Payments for loans madeProceeds from collections of loans
Payments for acquisition of business
Others, net(1,719)4,323(55,127)
2,384(9,667)2,107(3,506)
7,608(52,082)
1,147(16,101)
26(6)
10,060(77,707)839(26,762)146(13,874)
34,891(444,931)
19,241(78,023)
17,006(86,137)(3,411)
11,266–(19,890)–(10,503)
3,958(1,499)3,765–(5,980)4,507–(1,319)(695,214)(27,530)
90,928–(160,533)

Net cash used in investing activities(155,871)(67,187)(96,222)(1,258,039)

Cash flows from financing activities:
Increase (decrease) in short-term bank loans
Proceeds from issuances of commercial paper
Redemption of commercial paper
Proceeds from long-term bank loans
Repayments of long-term bank loans
Proceeds from issuances of bonds
Redemption of bonds
Proceeds from issuances of common stock
Cash dividends paid
Cash dividends paid for minority shareholders
Purchase and retirement of shares
Others, net
Net cash provided by financing activities

6,884
80,000(80,000)
4,111(6,586)
39,797–55,229(4,533)
(420)
–
(10)
94,472

1,934
–
–
1,633
(1,032)
29,849––(4,533)
(330)
–
(21)
27,500(1,438)––2,273(2,272)40,091(300)–(4,604)(153)(9,255)(4)
24,36855,561645,682(645,682)
33,180(53,156)
321,203–445,755(36,586)(3,390)–(81)
762,486

Translation adjustments of cash and cash equivalents

951(1,808)

(301)

7,676

Net increase (decrease) in cash and cash equivalents

17,96526,563(28,022)

144,996

Cash and cash equivalents at beginning of year

77,332

49,95574,303624,148–¥ 95,297

814¥ 77,332

3,674¥ 49,955–
769,144

Increase in cash and cash equivalents due to increase inconsolidated subsidiaries
Cash and cash equivalents at end of year
The accompanying notes are an integral part of these financial statements.

$

Notes to Consolidated Financial Statements
1. Basis of presenting consolidated financial statements
statements submitted to the Director of Kanto Finance
Bureau in Japan have been reclassified in these accounts forthe convenience of readers outside Japan.
The consolidated financial statements are not intended topresent the consolidated financial position, results ofoperations and cash flows in accordance with accounting
principles and practices generally accepted in countries andjurisdictions other than Japan.
Amounts in U.S. dollars are included solely for theconvenience of readers outside Japan. The rate of ¥123.90 =U.S. $1, the approximate rate of exchange prevailing at March
30, 2001, has been used in translation. The inclusion of suchamounts are not intended to imply that the Japanese yen havebeen or could be readily converted, realized or settled 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 ofCompany as of the semi-annual period end, the results ofoperations of the latter half of the year of those subsidiaries
are consolidated in the consolidated financial statements.
Two unconsolidated subsidiaries are excluded from the scopeof consolidation because majority owning investments into
those two subsidiaries are temporary.
The fiscal years of certain subsidiaries are different fromthe fiscal year of the Company. Since the difference is not
more than three months, the Company is using thosesubsidiaries’ statements for those fiscal years, making
adjustments for significant transactions that materially affectthe financial position or results of operations.
All significant intercompany transactions, balances andunrealized profits among 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 acquisitionof control.

(2) Investments in unconsolidated subsidiaries and affiliates
Investments in two unconsolidated subsidiaries and 17 majoraffiliates in 2001 and two affiliates in 2000 and 1999 are
accounted for by the equity method of accounting.
Investments in unconsolidated subsidiaries and affiliates notaccounted for by the equity method are stated at cost due totheir insignificant effect on the consolidated financial
statements.
The major affiliates accounted for by the equity method
are listed on page 87.

ANNUAL REPORT 2001

the Company and its 100 subsidiaries (22 domestic
subsidiaries and 78 overseas subsidiaries, which are listed on
page 86) in 2001, 29 subsidiaries (22 domestic subsidiaries
and seven overseas subsidiaries) in 2000 and 27 subsidiaries(20 domestic subsidiaries and seven overseas subsidiaries) in
1999. The unconsolidated subsidiaries are excluded fromconsolidation because such subsidiaries would have nomaterial effect on the consolidated financial statements ofToyota Industries, or Toyota Industries’ owning majority ofsuch subsidiaries would be temporary.
For the year ended March 31, 2000, as a result of adoptionof the new accounting standards, two companies which had
been treated as affiliates became consolidated subsidiaries.
For the year ended March 31, 2001, 71 subsidiaries,
including 63 BT Industries group companies, were newly
added to the scope of consolidation. Since 64 subsidiaries
out of 72 subsidiaries were deemed as being acquired by the49
TOYOTA INDUSTRIES CORPORATION

On 28 June, 2001, the General Meeting of Shareholders of
Toyoda Automatic Loom Works, Ltd. approved to change its
name effective August 1, 2001 to Toyota Industries
Corporation. The accompanying consolidated financial
statements have been prepared based on the accounts
maintained by Toyoda Automatic Loom Works, Ltd. under
new corporate name of Toyota Industries Corporation (the“Company”) and its consolidated subsidiaries (together,hereinafter referred to as “Toyota Industries”) in accordancewith the provisions set forth in the Japanese Commercial
Code and the Securities and Exchange Law, and in conformity
with accounting principles and practices generally acceptedin Japan, which are different in certain respects from theapplication and disclosure requirements of International
Accounting Standards.
Certain items presented in the consolidated financial

(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 inincome statements.
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 aretranslated at prevailing fiscal average rates from the year
ended March 31, 2000, although the year-end exchange rates
had been used until the year ended March 31, 1999. The
resulting translation adjustments are included as a separate
component of shareholders’ equity from the year ended
March 31, 2001. Changes in accounting policies are
discussed in Note 3.

(4) Cash and cash equivalents
Cash and cash equivalents include all highly liquid
investments, generally with original maturities of threemonths or less, that are readily convertible to known

50

amounts of cash and are so near maturity that they present
insignificant risk of changes in value because of changes ininterest rates.

(5) Marketable securities and investment in securities
Until the year ended March 31, 2000, marketable securities

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2001

(current) and investment in securities (non-current) with amarket quotation on a stock exchange are valued at the lowerof moving-average cost or market value. Marketable securities
and investment in securities without a market quotation arevalued at moving-average cost.
Effective for the year ended March 31, 2001, Toyota
Industries adopted new accounting standards for financial
instruments that include accounting for marketable securities
and investment in securities, which are included in shortterm investments together with time deposits due over threemonths and investments in securities on the balance sheet asof March 31, 2001. The new accounting standards require
Toyota Industries to classify securities into four categories bypurpose of holding: trading securities, held-to-maturity
securities, other securities, and investments in unconsolidated
subsidiaries and affiliates. Toyota Industries does not havetrading securities nor held-to-maturity securities as of March
31, 2001.
Other securities with fair values are stated at fair value
based on market prices at the end of year. Unrealized gains
and losses are included in net unrealized gains on othersecurities as a separate component of shareholders’ equity.
Cost of sales of such securities is determined by the moving
average method. Other securities without fair values arestated at cost, as determined by the moving average method.
Investments in unconsolidated subsidiaries and affiliates areaccounted for by the equity method (see Note 2.(2) above).

(6) Inventories
Inventories are stated mainly at cost determined by the moving average method.

(7) Property, plant and equipment, and depreciation
Property, plant and equipment are stated at cost.
Depreciation expenses of property, plant and equipment arecomputed mainly by the declining-balance method, underwhich useful lives and residual values are same onesprescribed in Japanese Tax Law. Accumulated depreciation
as of March 31, 2001 and 2000 was ¥406,843 million($3,283,640 thousand) and ¥358,153 million, respectively.

(8) Intangible assets and amortization
Amortization of intangible assets is computed using thestraight-line method. Software costs for internal use areamortized by the straight-line method over their expected
useful lives (mainly five years).
Goodwill, if material, is amortized principally over lessthan 20 years on a straight-line basis, while immaterial
goodwill is charged to income as incurred. Goodwill incurred
before April 1, 2000 has been amortized over five years on astraight-line basis.

(9) Allowances for doubtful accounts
Toyota Industries adopted the policy of providing anallowance for doubtful accounts in an amount sufficient tocover possible losses on collection by estimating individuallyuncollectible amounts and applying to the remaining
accounts a percentage determined by certain factors such as
historical collection experiences.

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

(11) Allowance for retirement benefits
Until the year ended March 31, 2000, the allowance forretirement benefits was calculated at the present value basedon the amount that would be paid if all employees voluntarily
retired.
Effective for the year ended March 31, 2001, Toyota
Industries adopted new accounting standards for retirement
benefits for employees. Toyota Industries accrues amountwhich is considered to be incurred in the period based on theestimated benefit obligations and estimated pension assets at
the end of year.
To provide for the retirement benefits for directors andcorporate auditors, an amount which is required at the end ofyear by an internal rule describing the retirement benefits for
directors is accrued.
The change in accounting policy is described in Note 3.

(12) 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 the method similar to that applicable toordinary operating leases.

The consumption tax under the Japanese Consumption Tax
Law withheld by Toyota Industries on sales of goods is notincluded in 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.

(14) Hedge accounting(a) Method of hedge accounting
the Toyota Industries’ internal rule 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.

(b) Hedging instruments and hedged items(d) The method used to measure hedge effectivenessHedging instruments: derivative instruments (interest rate
swaps and foreign currency forwards)
Hedged items:
risk of change in interest rate on
borrowings and risk of change inforward exchange rate on transactions
denominated in foreign currencies(monetary assets and liabilities,
marketable securities and forecasted
transactions)

Hedge 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.

(c) Hedging policy
Hedging transactions are executed and controlled based on(e) Others
Due to the fact that counterparties to Toyota Industries
represent major financial institutions which have highcreditworthiness, Toyota Industries believes that the overall
credit risk related to its financial instruments is insignificant.

(15) Appropriation of retained earnings
In the accompanying consolidated statements of shareholders’equity, the approved amount during the relevant fiscal year isreflected for the appropriation of retained earnings ofconsolidated subsidiaries. In Japan, the payment of bonuses

to directors and corporate auditors is made out of retained
earnings through an appropriation, instead of being charged
to the income for the year.

ANNUAL REPORT 2001

Mainly deferral method of hedge accounting is applied. Incase of foreign currency forward contracts, the hedged items
are translated at contracted forward rates if certain conditions
are met.

TOYOTA INDUSTRIES CORPORATION(13) Consumption tax

51

(16) Income taxes
Income taxes are principally provided in amounts currently
payable for each year. Until the year ended March 31, 1999,
deferred income taxes arising from timing differences
between reporting for accounting purposes and that for tax
purposes were not required to be accounted for underJapanese accounting principles and therefore was notrecorded in the financial statements by the Company and its
domestic subsidiaries and affiliates. (For most of overseas
subsidiaries and affiliates, deferred income taxes have beenrecorded and reflected in their respective financial
statements.)
However, effective for the year ended March 31, 2000, tax

52

effect accounting has been adopted. The change inaccounting policies is discussed in Note 3.
The provision for income taxes is computed based on thepretax income included in the consolidated statement ofincome. 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 be realized.

(17) Net income per share
The computation of basic net income per share is based on

TOYOTA INDUSTRIES CORPORATION

the weighted-average number of outstanding shares ofcommon stock. The calculation of diluted net income pershare is similar to the calculation of basic net income pershare, except that the weighted-average number of shares

outstanding includes the additional dilution from potential
common stock equivalents such as convertible bonds. Cashdividends per share shown in the statements of income are
the amounts applicable to the respective years.

3. Changes in accounting policies and adoption of new accounting standards(1) For the year ended March 31, 2001

ANNUAL REPORT 2001(a) Allowance for retirement and severance benefits
for directors and corporate auditors
The Company’s retirement and severance benefits for
directors and corporate auditors was previously recorded as
expenses at the time they were awarded. However, in order tomake period earnings more appropriate, from the year ended
March 31, 2001, these expenses are accrued based on the
directors’ retirement benefit rule. Compared to the previous
method, operating income and ordinary income decreased by¥196 million ($1,582 thousand) and income before income
taxes decreased by ¥2,525 million ($20,379 thousand).
(b) Accounting for retirement benefits
Effective for the year ended March 31, 2001, the new
accounting standards for retirement benefits have been
applied. As a result, operating income and ordinary income
decreased by ¥1,005 million ($8,111 thousand) and income
before income taxes decreased by ¥4,982 million ($40,210
thousand). Also, cumulative effect of change in accounting
standards for retirement benefits of ¥19,057 million($153,810 thousand) was charged to income and recorded as
an extraordinary loss, and gain on securities contribution toemployee retirement benefit trust of ¥15,080 million($121,711 thousand) was charged to income and recorded as
an extraordinary gain. Allowance for retirement andseverance benefits and unamortized prior service cost areincluded in allowance for retirement benefits.

(c) Accounting for financial instruments
Effective for the year ended March 31, 2001, the new
accounting standards for financial instruments have been
applied. As a result, ordinary income and income before
income taxes increased by ¥359 million ($2,897 thousand).
At the beginning of the year ended March 31, 2001, Toyota
Industries reviewed the holding purposes of the securities it
owns. As a result, marketable securities expiring within one
year were classified under current assets as marketablesecurities and the others were classified as investment insecurities. As a result, marketable securities decreased by¥394 million ($3,180 thousand) and investment in securities
increased by the same amount.
(d) Accounting for foreign currency transactions
Effective for the year ended March 31, 2001, the amended
accounting standards for foreign currency transactions havebeen applied. Neither profits nor losses resulted from thischange. Effective for the year ended March 31, 2001,
translation adjustments, which had been listed under assets
in the consolidated balance sheets as of March 31, 2000 has
been shifted under shareholders’ equity and included inminority interest in consolidated subsidiaries due to theamendment of Japanese Regulations Concerning the
Terminology, Forms and Preparation Methods ofConsolidated Financial Statements.

(2) For the year ended March 31, 2000(a) Consolidation and investments in affiliates
Since the year ended March 31, 2000, Toyota Industries has
adopted the new accounting standards for preparation of
consolidated financial statements. To follow the newstandards, Toyota Industries has changed its criteria withregard to the identification of companies to be consolidated
from the percentage-of-ownership approach to the effective
control approach. Pro forma disclosure of the effect of theretroactive application of the new accounting standards is
not required under accounting standards generally acceptedin Japan. As a result of the adoption of the new standards,
two companies have been newly consolidated because
Toyota Industries was deemed to have effective controls overthose two companies.
statements
Until the year ended March 31, 1999, revenue and expenses
accounts of overseas consolidated subsidiaries had beentranslated into Japanese yen at year-end rates. From the year
ended March 31, 2000, the Company has used annual average
rates. This change was made to present the operating results
more precisely as the significance of the overseas
consolidated subsidiaries had been increasing and their(3) For the year ended March 31, 1999

ANNUAL REPORT 2001

Legal reserve:
From the year ended March 31, 1999, in the consolidatedbalance sheets, legal reserve and retained earnings havebeen combined and shown as retained earnings.

4. Acquisitions(1) For the year ended March 31, 2001
Until May 31, 2000, the Company acquired 97.1% of the sharecapital of BT Industries AB, a holding company of BT
Industries group which is materials handling equipment
manufacturing and sales companies. Due to this acquisition,
Toyota Industries recorded goodwill amounting to ¥61,557

Current assets
Fixed assets
Current liabilities
Long-term liabilities
Minority interest
Acquisition cost of BT Industries AB
Less: cash and cash equivalents in BT Industries AB
Cash payment for the acquisition of BT Industries AB

53
TOYOTA INDUSTRIES CORPORATION(b) Translation of foreign subsidiaries’ financial

revenue and expenses were incurred throughout the fiscal
years.
As a result of this change, net sales increased by ¥10,431
million, ordinary income increased by ¥551 million andincome before income taxes increased by ¥198 million forthe year ended March 31, 2000 compared to the amounts
accounted for under the former policies.
(c) Income taxes
Tax effect accounting has been adopted from the year ended
March 31, 2000 due to the amendment of the accounting
standards for income taxes. As a result, deferred tax assets
were newly recognized in the amount of ¥9,867 million,¥4,556 million in current assets and ¥5,311 million in
investments and other assets, and deferred tax liabilities wererecognized in the amount of ¥2,042 million in the
consolidated financial statements as of March 31, 2000. Also,
net income for the year ended March 31, 2000 and retained
earnings as of March 31,2000 increased by ¥2,970 millionand ¥8,458 million, respectively.
In addition to the above, cumulative effect of the adoptionof tax effect accounting of ¥5,487 million at the beginning of
the year ended March 31, 2000 was recognized as
adjustments in retained earnings.

million ($496,828 thousand), which is amortized over 20 years.
The summarized assets and liabilities arising from theacquisition, the acquisition cost to purchase BT Industries AB’sshares, and the net cash payment made for the acquisition are
as follows:
Millions of yen

Thousands of
U.S. dollars¥ 56,289
117,255(33,559)(49,450)(762)$ 454,310
946,368(270,856)(399,112)(6,150)89,773(3,745)724,560(30,226)¥ 86,028$ 694,334

(2) For the year ended March 31, 2000
Summary of assets and liabilities that increased due to the acquisition of the water-jet loom business from Nissan Texsys Co., Ltd.
is as follows:
Millions of yen

Current assets
Fixed assets¥1,222
386

Total

1,608
99
11

Current liabilities
Long-term liabilities

¥ 110

Total

5. Marketable securities

54(1) As of and for the year ended March 31, 2001(a) Other securities with fair value as of March 31, 2001 are as follows:

TOYOTA INDUSTRIES CORPORATION

Millions of yen

Acquisition
cost

Securities with carrying amountexceeding acquisition cost:
Stocks
Bonds
Government and municipal bonds, etc.
Corporate bonds
Other bonds
Other

ANNUAL REPORT 2001

Subtotal
Securities with carrying amountnot exceeding acquisition cost:
Stocks
Bonds
Government and municipal bonds, etc
Corporate bonds
Other bonds
Other
Subtotal
Total

Carrying
amount¥159,376 ¥1,110,176

Thousands of U.S. dollars

Difference

Acquisition
cost

Carrying
amount¥950,800$1,286,328 $8,960,258 $7,673,930

Difference–
13,702–––
13,723
–
–

–
21
–
–

–
110,589–––
110,759
–
–

–
170
–
–

173,078

1,123,899

950,821

1,396,917

9,071,017

7,674,100

7,995

7,560

(435)

64,52861,017(3,511)

0
2,498
3
720

0
2,475
3
720

–
(23)
–
–

0
20,16124
5,811

019,976
24
5,811

–
(185)
–
–

11,216

10,758(458)

90,52486,828(3,696)¥184,294 ¥1,134,657¥950,363

In this year, Toyota Industries recorded ¥2 million ($16
thousand) of impairment on an equity security included in$1,487,441 $9,157,845 $7,670,404

securities with the carrying amount not exceeding the costlines.

(b) Other securities sold during the year ended March 31, 2001 are as follows:
Thousands of U.S. dollars

Millions of Yen

Proceeds¥23,689

Realized gains¥15,317

Realized losses¥0

Proceeds include ¥17,845 million ($144,027 thousand) ofproceeds from the establishment of retirement benefit trust.
And, realized gains include ¥15,080 million ($121,711

Proceeds$191,145

Realized gains$123,624

Realized losses$0

thousand) of gain on securities contribution to employee
retirement benefit trust.

(c) Contents and carrying amount of securities (excluding held-to-maturity bonds within securities with fair value) notpracticable to fair value as of March 31, 2001, are as follows:
Thousands of
U.S. dollars

Millions of yen

Held-to-maturity securities
Other securities
Domestic unlisted stocks excluding over-the-counter stocks
Commercial paper used in repurchase agreements
Bonds used in repurchase agreements
Money management funds
Foreign unlisted bond––

¥12,644
3,999
2,000
341
310

$102,050
32,27616,1422,752
2,502(d) Redemption schedule of securities which have maturities within other securities as of March 31, 2001 is as follows:
Millions of yen

Within1 year

Total¥

Thousands of U.S. dollars

Over 5 years
within
10 yearsOver
10 years–
10,702
3
6,022

¥

–
4,518
10
129

¥0
–
–
–

¥

–
978
300
–

¥16,727¥4,657¥0¥1,278Over 1 year
within5 years

Over 5 years
within
10 years–
86,37624
48,604$–36,465
81
1,041

$0
–
–
–

$

$135,004$37,587$0$10,315

Within1 year$Over
10 years

–
7,893
2,422
–

(2) As of March 31, 2000
Current and non-current marketable securities included in current assets and in investments and other assets as of March 31,
2000 are as follows:

55
TOYOTA INDUSTRIES CORPORATION

Bonds
Government bonds
Corporate bonds
Other
Securities other than bonds

Over 1 year
within5 years

Millions of yen

Current:
Stock
Bonds
Other
Subtotal

¥

Fair
value

393 ¥
2
–
395

1,256
3
–
1,259

Unrealized
gains (losses)

¥

863
1
–
864

Non-current:
Stock
Bonds
Other
Subtotal

162,9832,000
50
165,033

1,323,286
1,997
50
1,325,333

1,160,303(3)01,160,300

Total¥165,428 ¥1,326,592¥1,161,164(a) The following methods are used to determine fair value:
Listed securities — mainly closing prices on Tokyo Stock Exchange
Unlisted bonds — prices after adjustments made on the standard quotation prices of over-the-counter standard bonds
announced by Japan Securities Dealers’ Association
Beneficiary certificates of securities investment trusts — Basic standard cost

ANNUAL REPORT 2001

Carrying
amount(b) Carrying amounts of the securities which are excluded from disclosure above are as follows:
Millions of yen

Current:
Bonds used in repurchase agreements
Commercial paper used in repurchase agreements
Discount bank debentures
Foreign unlisted bonds
Money management funds¥ 3,994
3,993
3,491
810
632

Non-current:
Domestic unlisted stocks excluding over-the-counter stocks
Foreign unlisted bonds¥22,856
3,310

6. Inventories

56

Inventories as of March 31, 2001 and 2000 consist of the following:

TOYOTA INDUSTRIES CORPORATION

Millions of yen

Thousands of
U.S. dollars

2001

2000

2001

Finished goods
Raw materials
Work in process
Supplies¥16,164
10,32921,3704,900¥ 3,342
4,615
18,104
4,154$130,460
83,366
172,478
39,547

Total¥52,763¥30,215$425,851

7. Long-term debt
(1) Long-term debt as of March 31, 2001 and 2000 consists of the following:

ANNUAL REPORT 2001

Millions of yen

The Company:
0.35% convertible bonds due 2003 without collateral
2.70% bonds due 2008 without collateral
1.50% bonds due 2003 without collateral
2.15% bonds due 2008 without collateral
1.50% bonds due 2006 without collateral
1.94% bonds due 2009 without collateral
1.25% bonds due 2005 without collateral
1.91% bonds due 2010 without collateral
Consolidated subsidiaries:
1.80% bonds due 2005
Long-term bank loans
Less: Current portion of long-term debt
Total
The conversion period of the 0.35% convertible bonds due
2003 is from May 1, 1996 to September 29, 2003 and theconversion price was ¥1,983.90 ($16.01) per share as ofThousands of
U.S. dollars

2001

2000

2001

¥ 75,748
30,00020,00020,00015,00015,00020,00020,000¥ 75,748
30,00020,00020,00015,00015,000––$ 611,364
242,131
161,421
161,421
121,065
121,065
161,421
161,421300
53,555(1,108)

300
6,011
(987)

2,421
432,243(8,943)¥268,495¥181,072$2,167,030

March 31, 2001. The aggregate number of shares issuable
upon conversion thereof at such conversion price was38,181 thousand shares.

(2) Annual maturities of long-term debt as of March 31, 2001 are as follows:Year ending March 31

Millions of yen

Thousands of
U.S. dollars

2002
2003
2004
2005
2006
2007 and thereafter

¥

1,108
15,282
124,818
3,760
23,060101,575$

8,943
123,341
1,007,409
30,347
186,118
819,815

Total¥269,603$2,175,973

8. Assets pledged as collateral(1) Assets pledged as collateral as of March 31, 2001 and 2000 are as follows:
Millions of yen

Thousands of
U.S. dollars

2000

2001

¥23,116
4,249
3,190
383
200
29

¥ 5,721
3,631
2,871
730
200
144

$186,570
34,29425,747
3,091
1,614
234

Total

¥31,167¥13,297$251,550(2) Secured liabilities as of March 31, 2001 and 2000 are as follows:
Thousands of
U.S. dollars

2001

2000

2001

Other current liabilities
Short-term bank loans
Long-term debt

¥17,608
8,702
1,867

¥17,376
5,106
4,435

$142,115
70,234
15,068

Total¥28,177¥26,917$227,417

9. Contingent liabilities
Toyota Industries is contingently liable for guarantees as of March 31, 2001 and 2000 as follows:
Millions of yen

Guarantees given by the Company
Guarantees given by consolidated subsidiaries
Guarantee forwards given by the Company
Acts similar to guarantees given by consolidated subsidiaries
Guarantees given by consolidated subsidiaries consist of
288,278 thousand of Swedish krona, and acts similar toThousands of
U.S. dollars

2001

2000

2001

¥

¥ 370
–
2,936
–

$ 2,728
27,99027,143
83,043

338
3,468
3,363
10,289guarantees given by consolidated subsidiaries consist of855,299 thousand of Swedish krona.

ANNUAL REPORT 2001

Millions of yen

TOYOTA INDUSTRIES CORPORATION

2001
Investments in securities
Buildings and structures
Land
Machinery, equipment and vehicles
Trade notes and accounts receivable
Other

57

10. Accounting for notes receivable and notes payable maturing at year-end date
Although year-end date of the year ended March 31, 2001,
was a holiday for banking institutions, the following notes
receivable and notes payable were accounted as if they were

Notes receivable
Notes payablesettled at year-end date. Consequently, they are not included
in trade notes and account receivables and trade notes andaccounts payable on the balance sheet as of March 31, 2001.
Millions of yen

Thousands of
U.S. dollars

¥569
857

$4,592
6,917

11. Shareholders’ equity

58
TOYOTA INDUSTRIES CORPORATION

Under the Japanese Commercial Code, amounts equal to atleast 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 toreduce a deficit or may be transferred to common stock bytaking appropriate corporate action. In consolidation, thelegal reserves of the Company and its domestic subsidiaries
are accounted for as retained earnings.
Year-end cash dividend is approved at the General
Meeting of Shareholders of the Company held after the closeof 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
the Japanese Commercial Code.
Proceeds from the conversion of convertible bonds havebeen accounted for in approximately equal amounts ascommon stock and capital surplus. At least 50% of theproceeds have been accounted for as common stock, in
accordance with the provisions of the Japanese Commercial
Code.

12. Research and development expenses

ANNUAL REPORT 2001

Research and development expenses, which were included
in selling, general and administrative expenses andmanufacturing costs, amounted to ¥26,196 million ($211,429

thousand), ¥24,062 million and ¥23,231 million for the year
ended March 31, 2001, 2000 and 1999, respectively.

13. Derivative instruments(1) For the year ended March 31, 2001

(1) For the year ended March 31, 2001(a) Qualitative disclosure about derivatives
Contents of derivative instruments into which Toyota
Industries entered, policy to enter into derivative
instruments, and purpose of using derivative instruments:
Toyota Industries uses interest rate swap agreements andforeign currency forward contracts, to reduce interest
rate risks on borrowings and to hedge foreign currency
risks on transactions denominated in foreign currencies(receivables and payables, securities, and forecasted
transactions), respectively.
Contents of risks related to derivative instruments:
Interest rate swaps and foreign currency forward
contracts into which Toyota Industries entered, haverisks of fluctuations in interest rates and in foreign
currency exchange rates. Due to the fact that

(2) For the year ended March 31, 2000
Toyota Industries did not use any derivative instruments.

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.
Controls in place over transactions handling derivative
instruments:
Hedging transactions are executed and controlled basedon the Toyota Industries’ internal rule and Toyota
Industries’ hedging activities are reported periodically toa director responsible for accounting.
(b) Quantitative disclosure about derivatives
Toyota Industries omitted this information because hedge
accounting is applied to all of 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 and lump-sum indemnities plans bothof which are non-contributory defined benefit pension plans.
In addition, certain foreign subsidiaries maintain noncontributory defined benefit pension plans. Since 1987, theCompany has been transferring the covering percentages ofpension plan from lump-sum indemnities plan to tax
qualified pension plan. As of March 31, 2001, tax qualified
pension plan is covering 50% of total plans. Also, theCompany established employee retirement benefit trust.

(2) Components of allowance for retirement benefits as of March 31, 2001 are as follows:
Thousands of
U.S. dollars¥ 71,458(46,513)$ 576,739(375,407)

Unfunded benefit obligation
Unrecognized actuarial loss

24,945(4,812)

201,332(38,838)

Net amount recognized on the balance sheet
Prepaid pension expenses

20,133(2,598)

162,494(20,968)¥ 22,731$ 183,462

Benefit obligation
Plan assets

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 balance sheet
includes ¥2,803 million ($22,623 thousand) of allowance forretirement and severance benefits for directors andcorporate auditors as discussed in Note 3.

(3) Components of retirement benefit expenses for the year ended March 31, 2001 are as follows:
Thousands of
U.S. dollars

Service cost
Interest cost
Expected return on plan assets
Amortization of transition obligation¥ 3,799
1,677(637)
19,057$ 30,662
13,534(5,141)
153,810Retirement benefit expenses¥23,896$192,865

Retirement expenses of subsidiaries which adopted
simplified method are included in both service cost andamortization of transition obligation.
Due to the establishment of retirement benefit trust in theyear ended March 31, 2001, which is the first year ofaccounting standards for retirement benefits’ adoption,amortization of transition obligation also includes ¥17,845
million ($144,027 thousand) of one-time amortization ofretirement benefit obligation at beginning of the year whichis equivalent to fair value of trust properties at the time of its
contribution.

(4) Assumptions used for calculation of retirement benefits for the year ended March 31, 2001 are as follows:
Method of attribution of estimated retirement benefits
to periods of employee service
Discount rate
Expected return on plan assets
Amortization period of unrecognized actuarial gains or losses

Amortization period of net transition obligation

Straight-line method
3.0%
3.0%
20 years
Straight-line method over the average remaining
service period of employee starting fromfollowing year
1 year

ANNUAL REPORT 2001

Millions of yen

59
TOYOTA INDUSTRIES CORPORATION

Millions of yen

15. Income taxes(1) The significant components of deferred tax assets and liabilities as of March 31, 2001 and 2000 are as follows:
Thousands of
U.S. dollars

Millions of yen

2001

60

Deferred tax assets:
Net operating loss carry-forwards for tax purposes
Trade receivables
Accrued expenses
Depreciation
Allowance for retirement benefits
Enterprise tax payable
Securities
Other

TOYOTA INDUSTRIES CORPORATION

2,290
3,203
2,330
1,708
3,562
1,058
1,034
4,602

¥ 2,368
1,708
1,452
1,338
993
776
507
4,034

Subtotal

19,787

13,176

159,701

Less — valuation allowance(2,448)(2,394)(19,757)

Total deferred tax assets

17,33910,782

139,944

Deferred tax liabilities:
Other securities
Depreciation
Land
Reserve for advanced depreciation
Reserve for special depreciation
Other

391,484
1,618
1,112
384
96
148

–
1,304
1,112
409
59
72

3,159,677
13,059
8,975
3,099
775
1,195

Total deferred tax liabilities

ANNUAL REPORT 2001

Net deferred tax assets (liabilities)

¥

2001

2000
$

18,48325,85118,805
13,78528,7498,539
8,345
37,144

394,8422,956

3,186,780¥(377,503)¥ 7,826$(3,046,836)(2) Reconciliations of differences between the statutory rate of income taxes and the effective rate of income taxes for the year
ended March 31, 2001 and 2000 are as follows:
2001

2000

Statutory rate of income taxes
Addition (reduction) in taxes resulting from:
Equity in loss of affiliates
Net pre-tax losses of subsidiaries
Elimination of dividend income
Dividends income and other permanently not recognized as taxable income
Other

41.2%

41.2%

1.0
–
0.9
(6.7)
2.4

7.6
3.5
1.3
(8.6)
1.3

Effective rate of income taxes

38.8%

46.3%

16. Leases(1) Finance leases which do not transfer ownership of leased properties to lessees(a) Pro forma information regarding the leased properties such as acquisition cost, accumulated depreciation under financeleases as of March 31, 2001 and 2000 is as follows:
Thousands of
U.S. dollars

Millions of yen

2001

2000

2001

¥2,339910
1,429¥2,214534
1,680$18,878
7,345
11,533

4,660
2,228

5,507
3,052

37,611
17,982Tools, furniture and fixture year-end balance equivalents

2,432

2,455

19,629Total net leased properties¥3,861¥4,135$31,162

Machinery and equipment:
Acquisition cost equivalents
Accumulated depreciation equivalents
Machinery and equipment year-end balance equivalents
Tools, furniture and fixture:
Acquisition cost equivalents
Accumulated depreciation equivalentsof property, plant and equipment, etc., at year-ends is
immaterial.

(b) Pro forma information regarding future minimum lease payments as of March 31, 2001 and 2000 is as follows:
Thousands of
U.S. dollars

Millions of yen

2000

2001

Due within 1 year
Due after 1 year

¥1,302
2,559¥1,501
2,634$10,508
20,654

Total¥3,861¥4,135$31,162

Future minimum lease payments under finance leases 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,
etc., at year-ends is immaterial.

(c) Total lease payments for the years ended March 31, 2001, 2000 and 1999 are as follows:

2001
2000
1999
Pro forma depreciation expenses, which are not reflected in
the accompanying consolidated statements of income, arecomputed mainly by the straight-line method which assume

Millions of yen

Thousands of
U.S. dollars¥1,505
1,749
1,679$12,147––zero residual value and leasing term to be useful lives for theyears ended 2001, 2000 and 1999, and are equivalent to theamount of total lease payments of the above.

(2) Operating leases(a) Pro forma future lease payments under operating leases (as a lessee) as of March 31, 2001 and 2000 are as follows:
Thousands of
U.S. dollars

Millions of yen

2001

2000

2001

Due within 1 year
Due after 1 year

¥ 5,116
9,543

¥203
165

$ 41,291
77,022

Total¥14,659¥368$118,313

ANNUAL REPORT 2001

2001

TOYOTA INDUSTRIES CORPORATION

Acquisition cost equivalents include the imputed interest
expense portion because the percentage which is computedby dividing future minimum lease payments by total balance61

(b) Pro forma future lease payments under operating leases (as a lessor) as of March 31, 2001 are as follows:
Millions of yen

Thousands of
U.S. dollars

Due within 1 year
Due after 1 year

¥1,456
7,717$11,751
62,284

Total¥9,173$74,035

17. Subsequent events
On June 28, 2001, the shareholders of the Company
authorized the payment of year-end cash dividends toshareholders of record as of March 31, 2001 of ¥9.00($0.073) per share, or a total of ¥2,820 million ($22,760

62

thousand), and bonuses to directors and corporate auditorsof ¥208 million ($1,679 thousand). Cash dividends for theyear totaled ¥17.00 ($0.137) per share, including interim
cash dividends of ¥8.00 ($0.065).

18. Segment information(1) Business segments

TOYOTA INDUSTRIES CORPORATIONAs of and for the years ended March 31, 2001, 2000 and 1999:
Thousands of
U.S. dollars

Millions of yen

Sales:
Automobile
Outside customer sales
Inter-segment transactions
Materials Handling Equipment
Outside customer sales
Inter-segment transactions

ANNUAL REPORT 2001

Textile Machinery
Outside customer sales
Inter-segment transactions
Others
Outside customer sales
Inter-segment transactions
Subtotal

2001

2000

1999

2001

¥457,631
4,097¥423,413
3,335¥364,269
2,431$3,693,551
33,067

461,728

426,748366,700

3,726,618

236,502–

149,085–

151,370–

1,908,814–

236,502

149,085

151,370

1,908,814

33,238–23,135–

18,947–268,264–

33,23823,135

18,947268,264

40,012
4,531

30,1402,613

24,2902,974

322,938
36,57044,54332,75327,264

359,508

776,011

631,721564,281

6,263,204(8,628)(5,948)(5,405)(69,637)

Total¥767,383¥625,773¥558,876$6,193,567

Operating costs and expenses:
Automobile
Materials Handling Equipment
Textile Machinery
OthersElimination of inter-segment transactions¥433,203
221,955
33,20340,178(8,460)¥402,320
143,335
26,10732,001(6,857)¥349,302
142,918
22,40225,064(5,624)$3,496,392
1,791,404
267,982
324,278(68,281)

Total¥720,079¥596,906¥534,062$5,811,775

Operating income (loss):
Automobile
Materials Handling Equipment
Textile Machinery
OthersElimination of inter-segment transactions¥ 28,525
14,547
35
4,365
(168)

¥ 24,428
5,750(2,972)752
909¥ 17,398
8,452(3,455)2,200
219$ 230,226
117,410282
35,230(1,356)

Total¥ 47,304¥ 28,867¥ 24,814$ 381,792

Elimination of inter-segment transactions

Thousands of
U.S. dollars

Millions of yen

2000

1999

2001

Assets:Automobile
Materials Handling Equipment
Textile Machinery
OthersCorporate assets or elimination¥ 282,504
270,975
25,404
15,4871,275,272¥266,839
81,34323,42718,012296,293¥254,087
78,51822,224
20,729241,513$ 2,280,097
2,187,046
205,036
124,996
10,292,752

Total¥1,869,642¥685,914¥617,071$15,089,927¥

31,764
10,766
1,034
3,071
(181)

¥ 31,707
7,751
978
2,398
(82)

¥ 26,518
5,548
1,024
1,404
(114)

$

256,368
86,893
8,345
24,786(1,461)¥46,454¥ 42,752¥ 34,380$

374,931¥54,73470,673
320
2,311
(765)

¥ 33,058
5,426
1,042
5,794
(574)

¥ 47,635
11,691
663
875
(396)

$

441,759
570,404
2,583
18,652(6,174)¥ 127,273¥ 44,746¥ 60,468$ 1,027,224

Depreciation and amortization:
Automobile
Materials Handling Equipment
Textile Machinery
OthersCorporate or elimination of inter-segment transactions
Total
Capital expenditures:
Automobile
Materials Handling Equipment
Textile Machinery
OthersCorporate or elimination of inter-segment transactions
Total

Corporate assets as of March 31, 2001, included in corporate
assets or elimination amounting to ¥1,278,393 million($10,317,942 thousand) mainly consist of cash and cash
equivalents, short-term investments and investments insecurities held by the Company.
Effective for the year ended March 31, 2001, the new
accounting standards for retirement benefits have been
applied. Consequently, operating costs and expenses
increased by ¥721million ($5,819 thousand) for theAutomobile Segment, ¥197 million ($1,590 thousand) for the
Materials Handling Equipment Segment, ¥41 million ($331
thousand) for the Textile Machinery Segment and ¥46million($371 thousand) for the Others Segment, respectively, andoperating income for each segment decreased by the sameamount.
Effective for the year ended March 31, 2001, allowance forretirement and severance benefits for directors and corporate
auditors has been recorded. Consequently, operating costs andexpenses increased by ¥145 million ($1,170 thousand) for theAutomobile Segment, ¥37 million ($299 thousand) for the
Materials Handling Equipment Segment, ¥10 million ($81
thousand) for the Textile Machinery Segment and ¥4 million($32 thousand) for the Others Segment, respectively, andoperating income for each segment decreased by the sameamount.
Effective for the year ended March 31, 2001, the new
accounting standards for financial instruments have been
applied. Consequently, assets increased by ¥40 million ($323
thousand) for the Materials Handling Equipment Segment and¥942,594 million ($7,607,670 thousand) for corporate assets
or elimination.
Effective for the year ended March 31, 2000, the new
accounting standards for income taxes have been applied.
Consequently, assets increased by ¥3,335 million for theAutomobile Segment, ¥1,221 million for the Materials
Handling Equipment Segment, ¥442 million for the Textile
Machinery Segment, ¥621 million for the Others Segment, and¥4,247 million for corporate assets or elimination.

ANNUAL REPORT 2001

Main products of each segment:
Automobile • • • • • • • • • • • • • • • • • • • • • • • Passenger vehicles, diesel and gasoline engines, car air-conditioning compressors
Materials Handling Equipment • • • • • • • Counterbalanced forklift trucks, warehouse trucks, skid steer loaders, automated storage and retrieval systems,
automatic guided vehicles
Textile Machinery • • • • • • • • • • • • • • • • • • Ring spinning frames, air-jet looms, water-jet looms
Others • • • • • • • • • • • • • • • • • • • • • • • • • • • Ball grid array-type plastic package substrates for IC chipsets, casting machines

63
TOYOTA INDUSTRIES CORPORATION

2001

As discussed in Note 3, from the year ended March 31,
2000, revenue and expense accounts of overseas subsidiaries
have been translated into Japanese yen at annual average
rates while year-end rates had been used until the year ended
March 31, 1999. Consequently, sales, operating income,assets, depreciation and amortization and capital
expenditures increased by ¥4,477 million, ¥251 million, ¥145
million, ¥287 million and ¥960 million for the Automobile

Segment, and also increased by ¥5,856 million, ¥338 million,¥210 million, ¥135 million and ¥303 for the Materials
Handling Equipment Segment. In addition, sales, operating
loss, depreciation and amortization and capital expenditures
increased by ¥99 million, ¥30 million, ¥12 million and ¥5
million, and assets decreased by ¥36 million for the Textile
Machinery Segment.

(2) Geographical segments
As of and for the years ended March 31, 2001, 2000 and 1999:
Thousands of
U.S. dollars

Millions of yen

64
TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2001

2001

2000

1999

2001

¥586,087
31,770¥531,274
25,309¥465,444
18,860$4,730,323
256,416

617,857

556,583

484,304

4,986,739

123,355
337

79,232–

78,264–

995,601
2,720

123,692

79,232

78,264

998,32155,826
749

–
–

–
–

450,573
6,045

56,575––456,618

2,115
478

15,267589

15,168551

17,070
3,858

2,593

15,856

15,71920,928Subtotal

800,717651,671578,287

6,462,606

Elimination of inter-segment transactions(33,334)(25,898)(19,411)(269,039)

Total¥767,383¥625,773¥558,876$6,193,567

Operating costs and expenses:
Japan
North America
EuropeOthersElimination of inter-segment transactions¥577,381
118,42253,7242,841(32,289)¥533,987
74,547–
15,358(26,986)¥465,139
73,342–
15,100(19,519)$4,660,056
955,787433,608
22,930(260,606)

Total¥720,079¥596,906¥534,062$5,811,775

Operating income (loss):Japan
North America
EuropeOthersElimination of inter-segment transactions¥ 40,476
5,270
2,851
(248)
(1,045)¥ 22,596
4,685
–
498
1,088

¥ 19,165
4,922
–
619
108

$ 326,683
42,53423,010(2,002)(8,433)Total¥ 47,304¥ 28,867¥ 24,814$ 381,792

Sales:
Japan
Outside customer sales
Inter-segment transactions
North America
Outside customer sales
Inter-segment transactions
EuropeOutside customer sales
Inter-segment transactions
Others
Outside customer sales
Inter-segment transactions

Thousands of
U.S. dollars

Millions of yen

2001

2000

1999

2001

Assets:Japan
North America
EuropeOthersCorporate assets or elimination¥ 460,474
126,520
158,351
4,987
1,119,310¥361,459
44,035–
17,322
263,098¥349,787
39,113–
15,846
212,325$ 3,716,497
1,021,146
1,278,055
40,2509,033,979

Total¥1,869,642¥685,914¥617,071$15,089,927

Significant countries or areas belonging to each segment are as follows:
North America • • • • • • • • • • • U.S.A., Canada
Europe • • • • • • • • • • • • • • • • • Sweden, France, Germany
Others • • • • • • • • • • • • • • • • • India, China65

ANNUAL REPORT 2001

respectively.
Effective for the year ended March 31, 2001, the new
accounting standards for retirement benefits have been
applied. Consequently, operating costs and expenses of theJapan Segment increased by ¥1,005 million ($8,111
thousand) and operating income of the Japan Segment
decreased by the same amount.
Effective for the year ended March 31, 2001, allowance
for retirement and severance benefits for directors andcorporate auditors have been recorded. Consequently,
operating costs and expenses of the Japan Segment increasedby ¥196 million ($1,582 thousand) and operating income of
the Japan Segment decreased by the same amount.
Effective for the year ended March 31, 2001, the new
accounting standards for financial instruments have been
applied. Consequently, assets increased by ¥40 million ($323
thousand) for the Japan Segment and ¥942,594 million($7,607,700 thousand) for corporate assets or elimination.
Effective for the year ended March 31, 2000, the new
accounting standards for income taxes have been applied.
Consequently, assets increased by ¥9,025 million for Japan
Segment, ¥811 million for North America Segment and ¥31
million for the Others Segment.
As discussed in Note 3, from the year ended March 31,
2000, revenue and expense accounts of overseas subsidiaries
have been translated into Japanese yen at annual average
rates while year-end rates had been used until the year ended
March 31, 1999. Consequently, sales, operating income andassets increased by ¥8,031 million, ¥475 million and ¥308
million for the North America Segment, ¥2,401 million, ¥84
million and ¥11 million for the Others Segment.

TOYOTA INDUSTRIES CORPORATION

Corporate assets as of March 31, 2001, included in corporate
assets or elimination amounting to ¥1,278,393 million($10,317,942 thousand) mainly consist of cash and cash
equivalents, short-term investments and investments insecurities held by the Company.
Effective for the year ended March 31, 2001, the Europe
Segment has been separated from the Others Segment
because business there increased in importance. Sales,
operating income, and assets of the Europe Segment in prioryear were ¥14,822 million, ¥681 million, and ¥13,472 million,

(3) Overseas sales
For the years ended March 31, 2001, 2000 and 1999:
Thousands of
U.S. dollars

Millions of yen

66

2001

2000

1999

2001

Overseas sales:
North America
EuropeOthers¥140,161
102,666
55,967¥90,314–
101,678¥93,748–
84,989$1,131,243
828,620451,719

Total¥298,794¥191,992¥178,737$2,411,582

Total sales¥767,383¥625,773¥558,876$6,193,567

Ratios of overseas sales to total sales (%):
North America
EuropeOthers

18.2%
13.4
7.3

14.4%
–
16.3

16.8%
–
15.2

Total

38.9%

30.7%

32.0%

TOYOTA INDUSTRIES CORPORATION

Significant countries or areas belonging to each area as of March 31, 2001 are as follows:
North America • • • • • • • • • • U.S.A., Canada
Europe • • • • • • • • • • • • • • • • Germany, France, U.K.
Others • • • • • • • • • • • • • • • • • China, Indonesia, Australia, Korea, Taiwan
Germany, France and U.K. were included in the Others area until the year ended March 31, 2000.

ANNUAL REPORT 2001

The Europe area, which had been included in the Others area
until the year ended March 31, 2000, has been separately
disclosed the year ended March 31, 2001 due to its increasedmateriality. Sales to the Europe area was ¥54,034 million(8.6% to total sales) in the previous year.
As discussed in Note 3, from the year ended March 31,

2000, revenue and expense accounts of overseas subsidiaries
have been translated into Japanese yen at annual average rates
while year-end rates had been used until the year ended
March 31, 1999. Consequently, overseas sales increased by¥8,027 million for the North America area, ¥2,347 million for
the Others area.

19. Related party transactions
The following transactions were carried out with related parties.
(1) Sales of goods and services for the year ended March 31, 2001, and 2000 are as follows:
Thousands of
U.S. dollars

Millions of yen

Toyota Motor Corporation
Toyota Motor Corporation holds 24.67% of the Company’s
shares as of March 31, 2001. The above transactions were

2001

2000

2001

¥425,377¥393,780$3,433,228

carried out on commercial terms and conditions.

(2) Purchase of goods and services for the year ended March 31, 2001, and 2000 are as follows:
Purchase of goods:
Thousands of
U.S. dollars

Millions of yen

Toyota Motor Corporation

2001

2000

2001

¥195,514¥184,935$1,577,998

Purchase of services:
Thousands of
U.S. dollars

Millions of yen

2001

2000

2001

Toyota Motor Corporation
TOYODA AUTOMATIC LOOM WORKS Health Insurance Society
Toyota Medical Corporation¥4,68569
33¥4,8486232$37,813
557
266

Total

¥4,787¥4,942$38,636

is Yoshitoshi Toyoda as of March 31, 2001 and 2000, who is adirector of the Company and holds 0.05% and 0.06% of theCompany’s shares, respectively. The transactions above werecarried out on commercial terms and conditions.

(3) Outstanding balances arising from sale/purchase of goods/services as of March 31, 2001 and 2000 are as follows:
Receivables from a related party:
Thousands of
U.S. dollars

Millions of yen

Toyota Motor Corporation

2001

2000

2001

¥35,483¥34,782$286,384

Thousands of
U.S. dollars

Millions of yen

Toyota Motor Corporation

2001

2000

2001

¥18,214¥21,120$147,006

Millions of yen

Thousands of
U.S. dollars(4) Loans to an affiliate for the year ended March 31, 2001 are as follows:

Balance at the beginning of the year
Loans made during the year
Repayments during the year

¥ 8,600–(8,600)

Balance at the end of the year¥

A loan was made to ST Liquid Crystal Display Corp., in which
the Company owns 50.0% of the shares, and given on–$ 69,411–(69,411)$commercial terms and conditions without any collateral.

–

ANNUAL REPORT 2001

Payable to a related party:

67
TOYOTA INDUSTRIES CORPORATIONTOYODA AUTOMATIC LOOM WORKS Health InsuranceSociety’s chairman is Shiro Endo as of March 31, 2001, who isa director of the Company and holds 0.01% of the Company’s
shares, and Shigetaka Mitomo as of March 31, 2000, who wasa corporate auditor. Toyota Medical Corporation’s chairman

Report of Independent Accountants

June 28, 2001
To the Board of Directors of
Toyota Industries Corporation(formerly, Toyoda Automatic Loom Works, Ltd., see Note 1)

68
TOYOTA INDUSTRIES CORPORATION

We have audited the accompanying consolidated balance sheets of Toyota Industries Corporation(formerly,Toyoda Automatic Loom Works, Ltd., see Note 1) and its consolidated subsidiaries as ofMarch 31, 2001 and 2000, and the consolidated statements of income, shareholders’ equity andcash flows for the three years in the period ended March 31, 2001, expressed in Japanese yen.
Our audits were made in accordance with auditing standards, procedures and practices generally
accepted and applied in Japan and, accordingly, included such tests of the accounting records andsuch other auditing procedures as we considered necessary in the circumstances.
In our opinion, the consolidated financial statements referred to above present fairly the
consolidated financial position of Toyota Industries Corporation and its consolidated subsidiaries
as of March 31, 2001 and 2000, and the consolidated results of their operations and their cash
flows for the three years in the period ended March 31, 2001 in conformity with accounting
principles and practices generally accepted in Japan (see Note 1) applied on a consistent basis,
except for the changes described in the next two paragraphs.

ANNUAL REPORT 2001

As described in Note 3, effective for the year ended March 31, 2000, Toyota Industries
Corporation and its consolidated subsidiaries have changed its method of translation of foreignsubsidiaries’ financial statements.
As described in Note 3, effective for the year ended March 31, 2001, Toyota Industries
Corporation has changed its method of allowance for retirement and severance benefits for
directors and corporate auditors.
As described in Note 3, effective for the year ended March 31, 2000, Toyota Industries
Corporation and its consolidated subsidiaries have adopted new Japanese accounting standards
for income taxes.
As described in Note 3, effective for the year ended March 31, 2001, Toyota Industries
Corporation and its Japanese consolidated subsidiaries have adopted new Japanese accounting
standards for retirement benefits, financial instruments and foreign currency transactions.
The amounts expressed in U.S. dollars, which are provided solely for the convenience of thereaders outside Japan, have been translated on the basis set forth in Note 1 to the accompanying
consolidated financial statements.

Toyota Industries Close-up

As a manufacturing company, our vital function is to craft products.
Ever since our foundation, we have channeled our passion for manufacturing
into our mission of bringing customers superior products at fair prices.
We constantly seek to improve and update our manufacturing facilities
so that we can make products of superb quality in the most efficient way.
Henry Ford’s mass-production methods revolutionized automobile manufacturing andToyota Motor Corporation’s “lean manufacturing” method enabled another huge leap in
productivity. But just as important as these major revolutions are the many small
improvements that add up to a large overall advance in productivity.
We, Toyota Industries, are a group of people devoted to the continuous improvementof productivity and the manufacturing of products.
While engineers and designers at Toyota Industries have developed new products
and improved existing ones, our factory employees have made just as important acontribution to better productivity through their proposals for improving work processes
and equipment. We recently embarked on an ambitious project to shorten development
processes and improve productivity by revolutionizing development and manufacturingmethods through the adaptation of IT.

ANNUAL REPORT 2001

Passion and Progress in Manufacturing

69
TOYOTA INDUSTRIES CORPORATION

Toyota Industries Corporation (“Toyota Industries”) is
divided into four segments: Textile Machinery, Automobile,
Materials Handling Equipment, and Others. These arefurther subdivided into a wide range of business/operation
categories. The following pages give details of our range ofbusiness fields and product groups, our 75 years of history,
and our corporate organization. We hope that this will give
all of our stakeholders—including shareholders, investors,
and customers—a deeper understanding of Toyota
Industries.

Toyota Industries Close-up
Materials Handling Equipment
The Materials Handling Equipment Segment consists of TOYOTA Material Handling Company
and BT Industries AB. TOYOTA Material Handling Company is divided into
the industrial vehicle business and the materials handling system business.

TOYOTA Material Handling Company
Moving into worldwide markets with industrial vehicles
and other advanced industrial equipment products

Industrial Vehicle Business

Our emphasis in making lift trucks has been, andReaching for success through superior
R&D and customer satisfaction

70

Toyota Industries’ industrial vehicle business began in1956 with the introduction of the LA model 1-ton

TOYOTA INDUSTRIES CORPORATION

forklift truck. Since then, we have developed a variety
of superior industrial vehicles, such as electric tow
tractors with an AC (alternating current) drive system
and lift trucks boasting features such as Japan’s first 4wheel drive, standard power steering, which had aalways will be, on making products that are safer andas easy as possible for the user to operate. In 1998,
we introduced the GENEO series (called the 7-Seriesoutside Japan) of internal combustion,
counterbalanced forklift trucks with capacities from
1 to 5 tons, which boasted our world-first System of
Active Stability (SAS), a system for enhancing thestability of lift trucks. In 1999, we introduced the
GENEO-B (called the 7FB outside Japan) electriccounterbalanced forklift trucks with capacities fromhuge impact on the industry, and low-noise. Toyota

1 to 3.5 tons. In addition to the highly rated SAS, theIndustries currently leads the world market with a full

GENEO-B featured the AC control system as standard

line-up of internal combustion and electric forklift

equipment.

trucks with capacities ranging from half a ton up to

We aim to continue being the world’s leading

ANNUAL REPORT 2001

over 40 tons. In addition, we develop andmanufacturer of industrial trucks as we continuously

manufacture numerous other industrial vehicles,develop state-of-the-art products in order to satisfy

including skid steer loaders, shovel loaders, and tow

customer needs worldwide.

tractors for use at places such as airports.

GENEO (7FD25)
Internal Combustion Counterbalanced
Forklift Truck (1 to 5 ton)

Tow Tractor (2TD20)

GENEO-B (7FB15)
Electric Counterbalanced
Forklift Truck (1 to 3.5 ton)

Skid Steer Loader (4SDKL8)GENEO-R
Electric Reach TruckMaterials Handling System Business
Creating materials handling systems
that revolutionize the way goods areconveyed, stored, sorted and picked inwarehouses and factories
In today’s IT age, information travels instantaneously
over networks around the world. This increased
speed of information has necessitated greater speed
and efficiency in the field of distribution. We offer
customers improved efficiency in their distribution
work by developing a variety of materials handlingsystems such as automatic guided vehicle systems andautomated storage/retrieval systems. Our wealth ofknow-how in materials handling, which has been
accumulated and developed based on the Toyota

turning circle, thanks to AC servo-motor controlledsteering wheels, and the Rack Sorter BP, a buildingtype warehouse system that allows the storing of vast
amounts of goods on shelves up to approximately 30
meters high. We also develop and manufacture
automated storage/retrieval systems and automatic
guided vehicle systems for clean rooms, which are
indispensable for the production of electronic
components. We employ our original non-contact
power supply systems in our automatic guided
vehicle systems and automated storage/retrieval
systems for clean rooms. Because these systems use
electromagnetic force to supply electrical power
without physical contact to moving parts, theygenerate less dust and thus are ideally suited for use
in dust-sensitive environments such as clean rooms.

successful production control systems), helps us
provide customers with optimal materials handlingsolutions. Examples of the remarkable materials

Note: Toyota Industries’ automatic guided vehicle systems, automatedstorage/retrieval systems and certain other materials handling systems
and products are generally sold only in Japan.

handling systems equipment we’ve developed include
the Road Sorter H, our high-end automatic guided

Rack Sorter P
Automated Storage and Retrieval
System (Pallet Type)Rack Sorter B
Automated Storage and Retrieval
System (Plastic Container Type)Road Sorter H (ACBH10)
Automatic Guided Vehicle System

Rack Sorter Clean
Automated Storageand Retrieval System
for Clean Rooms

2AFBR15
Automatic Guided Forklift Truck
Mobile Sorter B (MS05)
Rail Guided Vehicle System

Mobile Sorter Clean
Rail Guided Vehicle System
for Clean Rooms

ANNUAL REPORT 2001

Rack Sorter BP
Automated Storage and Retrieval System(Building Rack Type)71
TOYOTA INDUSTRIES CORPORATION

Production System (hailed as one of the world’s mostvehicle system that is easy to maintain and has a small

Toyota Industries Close-up
Materials Handling Equipment

BT Industries AB
Developing warehouse trucks for the global market
BT Industries AB (“BT Industries”) is the world’s

BT products that offer high performance, lowleading supplier of warehouse trucks and has a strong

maintenance and maximum cost performance.

global customer base, particularly in Europe and North

72

BT Industries stays close to its customers through

TOYOTA INDUSTRIES CORPORATION

America. With its wide range of materials handling

dedicated sales networks. BT Industries offers a wide

know-how, BT Industries helps customers improverange of warehouse trucks, including hand palletmaterials handling efficiency and lower costs. Detailed

trucks, reach trucks, order picking trucks, very narrow

analysis of customers’ sites allows BT Industries toaisle trucks and others. The company offers

offer the best materials handling solution possible.

counterbalanced lift trucks as well.

Customers’ needs are reflected in the development of

ANNUAL REPORT 2001

BT LIFTER (Hand Pallet Truck)
BT has manufactured more than 2 millionof these original hand pallet trucks to date.
With a lift capacity of 2,300 kg, the BT
LIFTER can be used wherever pallets need
to be moved.

BT MINIMOVER (Electric Pallet Truck)
Launched in 2001, the MINIMOVER is a light and agile
yet powerful aid for horizontal transporting. Its
elegant style and ease of use make it perfect for use inplaces such as supermarkets.

BT ORION (Electric Pallet Truck)
The ORION series of electric pallet trucks is
intended for heavy-duty horizontaltransporting. Combining large batteries,
powerful motors and a driver platform with
CAN technology, these pallet trucks offer
high productivity and low maintenance.

REFLEX (Reach Truck)
The REFLEX reach trucks are designed forintensive stacking and horizontal transporting.
Ergonomics and performance have beencombined into a superbly productive line oftrucks.

OPUS (Order Picking Truck)

73
TOYOTA INDUSTRIES CORPORATIONThe extensive OPUS line of low-level
order pickers is used for order picking ofa multitude of items, from auto spare parts
to consumer goods. The model shown
here has extra-long forks for roll cages.

ANNUAL REPORT 2001

OPUS (Order Picking Truck)
The OPUS line also includes models with elevating platforms,
allowing the operator to work comfortably at first and second
level shelves.

COMBI (Very Narrow Aisle Truck)
The COMBI line consists of high-lifting “man-up”
machines for combined pallet handling and orderpicking. The trucks are engineered for intensiveuse—even around the clock—365 days a year.

CARGO (Counterbalanced Truck)
The CARGO line of counterbalanced trucks, comprising
electric, diesel and gas-powered machines with lift
capacities up to 5 tons, completes the BT product line-up.

OPAL (Order Picking Truck)
The OPAL order pickers are designed for order picking at medium
heights, exceeding four meters. The model shown is equipped witha walk-through platform for handling of bulky goods.

Toyota Industries Close-up
Compressor Division

A world leader in the manufacture of compressors,
the core part of a car air-conditioner
Car air-conditioners use the heat of evaporation of

the load on the engine, resulting in lower fuelrefrigerants to cool the inside of cars. The heart of aconsumption. We have a large market share, both in

car air-conditioner is the compressor. Toyota

Japan and around the world, supplying car

Industries has been a leading manufacturer of car air-manufacturers with state-of-the-art, compact andconditioning compressors with outstanding, unrivaled

lightweight products, way ahead of the competition.

technologies such as compressors for electric vehicles

74

The compressor is an important element in

TOYOTA INDUSTRIES CORPORATION

and an external signal-controlled compressor withensuring a comfortable drive. It’s also important in

one-way swash plate continuous variable

determining the impact a car has on the environment.

displacement, which automatically adjusts its

As part of our long-standing commitment to thedisplacement according to the cabin temperature andenvironment, we develop compact, variable

Car Air-Conditioning System
Heat-sensing
cylinderRefrigerant (gas)Cool air

Evaporator
Vaporizes refrigerant gas and removes
heat from warm air supplied by a fan tothe passenger compartment as it
passes through the evaporator, thereby
cooling the passenger compartment.

ANNUAL REPORT 2001

High-temperature,high-pressure gas

Blower motor

Expansion Valve
Injects the high-temperature, high-pressureliquified refrigerant through a small hole,causing the refrigerant to expand rapidly and its
temperature and pressure to drop.

Interior air

Compressor
Compresses the refrigerant gas,
vaporized in the evaporator, sothat it can be easily liquified.

Warm airEngine cooling fan
Liquidtank

Condenser
Outside air

Cools and liquifies the high-temperature,high-pressure refrigerant gas sent fromthe compressor.

Refrigerant (liquid)

Fixed Displacement Type

10S17 Compressor(Fixed Displacement,
Swash Plate Type)Continuous Variable Displacement Type

7SBU16 Compressor(Variable Displacement,
Swash Plate Type)

6SEU12 Compressor(External Signal-Controlled, Variable
Displacement, Clutchless Type)displacement compressors that contribute to fuelthe refrigerant compression chamber and control theefficiency by placing minimum burden on the carcooling capacity. Automatic displacement control canengine and next-generation compressors that use new

be achieved with two methods: an internallyrefrigerants such as carbon dioxide (CO2) as a substitutecontrolled variable displacement method thatfor CFCs.

responds to the heat load of the compressor, thereby

Toyota Industries develops and manufactures various

mechanically controlling the displacement; and an
external signal-controlled variable displacement

being the swash plate type. There are two types ofmethod, which uses sensors that detect various factors

swash plate compressors: a fixed displacement typesuch as interior and exterior temperatures andwith the swash plate angle fixed to keep the volume ofhumidity levels, enabling the magnetic valve tothe refrigerant compression chamber and the coolingregulate the displacement of the compressor

capacity at a constant level; and a variable displacement

accordingly, thus contributing to higher fuel-efficiency

type (one-way swash plate type) with the swash plateand enhanced driving feel.

angle controlled automatically to change the volume of

Fixed Displacement TypeContinuous Variable Displacement Type(Maximum Displacement)
Swash plate

PistonPiston(Minimum Displacement)• Swash plate angle fixed• Compression chamber volume andcooling capacity fixed•Variable swash plate angle•Changes the swash plate angle to control
displacement, thereby altering cooling capacity

Features: Excellent overall performance—compact and lightweight withsimple structure, high reliability,
high energy efficiency, and low
noise and vibration

Features: High fuel efficiency, smooth switchingon and off, temperature at cool air
blower fixed

SCS06 Compressor(Scroll Type)SV07 Compressor(Vane Type)

ES25 Electric Compressor(Hermetic Scroll Type)

Viscous Type Power Heater(Vehicle Cabin Supplementary
Heater)

ANNUAL REPORT 2001

Swash plate75
TOYOTA INDUSTRIES CORPORATION

types of car air-conditioning compressors, our main type

Toyota Industries Close-up
Vehicle Division

Contributing to the Toyota Group by assemblinghigh quality, environmentally friendly compact cars
Today, safety and environmental concerns areadvances in safety technology such as EBD (electronic

important elements in developing cars. We currently

brake distribution), ABS (antilock braking system) andmanufacture the Vitz (Yaris in Europe), the production

dual SRS airbags.

of which commenced in 1999, succeeding the Starlet.

76

We also manufacture the Sprinter Carib (called theHaving the lowest level of fuel consumption in its

Corolla Wagon outside Japan) for TMC, and started

class, the Vitz (Yaris) is a strategic small car for Toyota

production of TOYOTA’s compact SUV RAV4 in May

Motor Corporation (“TMC”) worldwide. In addition to2001 and the bB Open Deck, a new compact car, inbeing environmentally friendly, it’s also equipped with

June 2001.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2001

Vitz (Yaris in Europe)

RAV4

Sprinter Carib(Corolla Wagon Outside Japan)bB Open Deck
(Available Only in Japan)

Toyota Industries Close-up
Toyota at WorkEngine Division

Manufacturing a line-up of engines for small cars andlarge sport utility vehicles (SUVs)
Environmental concern in recent years has created a

automobiles and forklift trucks. We are going all out indemand for environmentally friendly engines. Toyota

our joint efforts with TMC to develop environmentally

Industries is striving to develop and manufacture, infriendly engines that offer power, quietness, and low

collaboration with TMC, engines that offer power yet

vibration in a compact package.

fuel efficiency and high output yet low noise.

Our flexible manufacturing system uses automatic

We manufacture diesel and gasoline engines inguided vehicle systems to efficiently assemble

classes ranging from 1.5 liters to 4.7 liters. The

approximately 200 engine parts, thus replacing

engines we produce are used in TOYOTA-brandconveyor belts.

77
TOYOTA INDUSTRIES CORPORATION

Diesel Engines

1HZ Diesel Engine(Displacement: 4.2 Liters,
Used in the Land Cruiser and Coaster)

3C-E Diesel Engine(Displacement: 2.2 Liters,
Used in the Corolla)

1FZ-FE Gasoline Engine(Displacement: 4.5 Liters,
Used in the Land Cruiser)

4Y Gasoline Engine(Displacement: 2.2 Liters,
Used in Industrial Vehicles)

Gasoline Engines

2UZ Gasoline Engine(Displacement: 4.7 Liters,
Used in the Lexus LX470)

ANNUAL REPORT 2001

1CD Diesel Engine(Displacement: 2.0 Liters,
Used in the Avensis and Corolla)

Toyota Industries Close-up
Toyota at WorkElectronics

The key to the future growth of the company
Our Electronics business consists of three separate operations:
the Technology Development Center, ST Liquid Crystal Display Corp., and TIBC Corporation.

Technology Development Center
Taking cars into a new age of electronic control
through the development of electronics equipment and devices
Our Technology Development Center conducts

78

research and development in various fields. In July
2001, we integrated the center with our

TOYOTA INDUSTRIES CORPORATION

Semiconductor & Electronics Equipment Division andbegan aggressively developing and manufacturing
electronic components for automobiles. The
Technology Development Center manufactures mainly
power supply- and communications-related products.
In the field of car electronics, we develop andmanufacture a variety of products, including DC-AC
inverters (pre-installed type and portable type), whichconvert the DC 12V current from an auxiliary battery

ANNUAL REPORT 2001

to AC 100V so that home electrical appliances (8V)
can be used in the vehicle in Japan; inductive battery
charging systems for electric vehicles; and DC-DC
converters used in hybrid cars. We also manufacture

Battery Charging System for EV

semiconductors, SS wireless modems and the ACcontrollers built into the GENEO-B (called the 7FB
outside Japan) electric counterbalanced forklift trucks.

Power MOSFET Module

DC-DC Converter for the Prius

DC-AC Inverter (Pre-Installed Type)

ST Liquid Crystal Display Corp.
The growing nucleus of Toyota Industries’
electronics business holds high-tech promise
ST Liquid Crystal Display Corp. (“ST-LCD”), established
as a joint venture with Sony Corporation, manufactures
low-temperature polysilicon TFT LCDs, a nextgeneration display panel.
In addition to having a high aperture rate and79

consuming little power, low-temperature polysilicon
TOYOTA INDUSTRIES CORPORATIONTFT LCDs make possible miniaturization of the display
unit because the display device and its driver circuits
can be integrated onto the same TFT glass substrate.
These compact, cost-reducing display panels thus holdpromise for applications such as digital video and stillcameras, as well as in-car monitors. With thesecharacteristics predicted to create a huge demand for
low-temperature polysilicon TFT LCDs, ST-LCD stands

Low-Temperature
Polysilicon TFT LCDs

to play an important role in Toyota Industries’
electronics business.

Manufacturing plastic package substrates for IC chipsets
helps make electronics products smaller and lighter
TIBC Corporation (“TIBC”), a joint enterprise of
Toyota Industries and Ibiden Co., Ltd. (“Ibiden”),
entered the market for electronic substrates, which

Ball Grid Array (BGA)-Type
Plastic Package Substrates
for IC Chipsets

are used for IC modules that are vital for a range of
products including PCs, digital video and stillcameras, mobile phones and memory boards. TIBC
mainly manufactures ball grid array (BGA)-type
plastic package substrates, which allow ICs to offer
maximum functionality with minimum size andweight, and flexible printed circuit (FPC)-type
substrates for IC cards. These products are soldthrough Ibiden to chip manufacturers and otherhigh-tech companies worldwide.

Flexible Printed Circuit (FPC)-Type
Substrates for IC Cards

ANNUAL REPORT 2001

TIBC Corporation

Toyota Industries Close-up
Toyota at Work
Textile Machinery Division

Contributing to innovation in the global textile industry80

The roots of the Toyota Group go back to the renowned

share of the world market thanks to the high level ofJapanese inventor Sakichi Toyoda and his invention ofpraise received from our customers. After taking over

the automatic loom. Since then, the company has

the water-jet loom business from Nissan Texsys Co.,developed and manufactured textile machinery, theLtd., we applied the proprietary electronics technology

majority of which has been supplied to customers

developed for our air-jet weaving machines andoutside Japan. Toyota Industries manufactures two main

introduced the LW600 series water-jet loom in 1999.

categories of textile machinery: spinning machinery for

We also sell preparatory machinery for weaving, suchspinning cotton fibers into yarn; and weaving

as sizing machines.

TOYOTA INDUSTRIES CORPORATION

machinery, on which yarn is woven into fabric in the

Customers around the world also know and trust

directions of weft and warp. To keep up with theus as one of the leading manufacturers of ring spinningadvancing needs of the market, we continuously

frames and roving frames.

incorporate the latest technological developments,

The Textile Machinery Division aims to offer the

including control technology, mechatronics and IT, into

world’s leading brand by continuously developing

our textile machinery.

products that meet customers’ needs, thereby

Our Textile Machinery Division’s flagship product,

maximizing customer satisfaction.

the JAT610 air-jet loom, has garnered the number-one

Weaving Machinery

ANNUAL REPORT 2001

JAT610 Air-Jet Loom

LW600 Series Water-Jet Loom

Mackee Eagle
Sizing Machine for Spun Yarn

Spinning Machinery

RX240 Ring Spinning Frame

FL100 Roving Frame

DX7A Drawing FrameToyota Industries Close-up
Sub-Divisions

Machinery & Tools Sub-Division
Excelling in press die manufacturing technology
The Machinery & Tools Sub-Division is
involved in the design and manufacture ofautomobile press dies, mainly for TMC.
These press dies are highly rated for theirhigh quality and precision by automobile
makers both in and outside of Japan. With its

81

capability to produce higher quality press
dies at a lower cost and achieve quick
Division is helping automobile makers
manufacture better cars.

The Machinery & Tools SubDivision manufactures various
types of automobile press dies anddistributes them to Toyota
Industries’ Vehicle Division andautomobile makers such as TMC.

Mechatronics Engineering Sub-Division

The Mechatronics Engineering Sub-Division iscommitted to promoting in-housemanufacturing of key machining andassembling equipment. This includes
manufacturing equipment for the Compressor
Division and Engine Division as well as for ST
Liquid Crystal Display Corp., which
manufactures next-generation LCDs. The
Mechatronics Engineering Sub-Division also
designs and manufactures advanced
manufacturing equipment to help improve
production efficiency and labor savings in thecompany and its group companies, thus
boosting Toyota Industries’ competitiveness.

Equipment developed and manufactured by the Mechatronics
Engineering Sub-Division is utilized in Toyota Industries’ compressor
business and by ST-LCD, enhancing the productivity and competitivenessof these operations.

ANNUAL REPORT 2001

Contributing to the improvement of process technology
through the design and production of manufacturing equipment
for intracompany business divisions

TOYOTA INDUSTRIES CORPORATION

delivery times, the Machinery & Tools Sub-

Major Developments in Toyota Industries’ History
1920s
1940

1960

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

Steel Production Division separates andbecomes Toyoda Steel Works, Ltd. (nowAichi Steel Corporation).

Shovel loader production starts.

1944

1963

Obu Plant starts operations, manufacturing castings.

Dump truck production starts.
Friction welder production starts.

1929

1949

1964

Spinning frame production starts.

Company stock listed on Tokyo, Osaka,
and Nagoya Stock Exchanges

J-type diesel engine production starts.

Sakichi Toyoda

82

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

TOYOTA INDUSTRIES CORPORATION

1930s
1933
Automobile Division set up.

Car air-conditioning compressor (CC3Atype, CC3B-type) production starts.

1950s
1952
Automobile engine (S-type gasoline
engine) production starts.

1967

1934
A-type automobile engine completed.

Nagakusa Plant starts operations,producing small commercial vehicles.

1935

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

Prototype of Model A1 passenger carcompleted.

ANNUAL REPORT 2001

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

1955

Company unveils Model G1 truck at a
new-car-release exhibition in Shibaura,
Tokyo.

1924
Toyoda Automatic Loom Type G
invented by Sakichi Toyoda.

1960s

1926

Founder

Sakichi Toyoda was born inShizuoka Prefecture, Japan, in
1867. He became an inventor
while still in his teens anddevoted his life to the study anddevelopment of textile machinery.
Starting with a wooden
handloom, he subsequently
pioneered a new era in textile
machinery with inventions that
included Japan’s first power loom,
the circular loom and the Toyoda
Automatic Loom Type G. Sakichi
was awarded 84 patents and 35
utility models in his lifetime andis remembered with pride inJapan as one of the world’s
greatest inventors. We haveinherited the engineering spirit of
our illustrious founder.

1940s

Vehicle Division set up.

Electric counterbalanced forklift truck
production starts.

1956

1968

Forklift truck production starts.

1959
P-type gasoline engine production starts.

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

Publica (van)Open-end spinning machine production
starts.

1970s

10P-type compressor production starts.

1970

1990s

1981

Takahama Plant starts operations,producing industrial vehicles.

1990
Sprinter Carib (automobile; exported as
the Corolla Wagon) production starts.
Company receives 1990 PM Excellent
Plant Award.

1998
TD Deutsche Klimakompressor GmbH(TDDK) established as a joint venturewith DENSO Corporation to produce car
air-conditioning compressors in Germany.
GENEO (called the 7-Series outside Japan)
internal combustion counterbalanced
forklift trucks introduced.

1982
Production starts on C-type diesel engines
for small passenger cars.

1971
Corolla (van) production starts.

Hekinan Plant starts operations,producing automobile diesel engines.

1992
Materials Handling System Division set up.
Production starts on automated storage
and retrieval systems.

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

1993

JAT600 air-jet loom production starts.

TQC (total quality control) system
introduced.

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

1986

1974
6P-type compressor production starts.

Company awarded the Deming Prize for
quality control implementation.

1977
Swash plate compressor technology
licensed to Chrysler and Ford.

1987
Sprinter Cielo (exported as the Collora
Lift Back) production starts.
Electronics Sub-Division set up.

1980
JA-type air-jet loom production starts.

Toyota Industry Kunshan Co., Ltd. (TIK)
established in China as a joint venturewith Toyota Tsusho Corporation and
Lioho Machine Works, Ltd.
Company takes over water-jet loom
business from Nissan Texsys Co., Ltd.

1988
Toyota Industrial Equipment Mfg., Inc.
(TIEM) established in Columbus,
Indiana, USA, as a joint venture with
Toyota Motor Corporation.
RX100 ring spinning frame production
starts.

1989
Michigan Automotive Compressor, Inc.
(MACI) established in Jackson, Michigan,
USA, as a joint venture with DENSO
Corporation.

Toyota Industrial Equipment, S.A.
(TIESA) established in France as a joint
venture with Toyota Motor Corporationand Manitou B.F.

GENEO-B (called the 7FB outside Japan)
electric counterbalanced forklift trucks
introduced.

2000s

7SB-type compressor production starts.
B500 electric counterbalanced forklift
truck production starts.
Kirloskar Toyoda Textile Machinery Ltd.
(KTTM) established in India as a joint
venture with the Kirloskar Group.

1996

2000
LW600 series water-jet loom production
starts.
Company acquires BT Industries AB of
Sweden, a world-leading manufacturer of
warehouse trucks.

JAT610 air-jet loom production starts.

2UZ-type gasoline engine production
starts.

RX240 ring spinning frame production
starts.

2001

1997

GENEO-R electric reach truck production
starts.

Compressor production at Kariya Plant
reaches 100 million units.
6SE-type compressor production starts.
ST Liquid Crystal Display Corp. (“STLCD”) established as a joint venture withSony Corporation.

Company takes over the industrial
equipment sales division of Toyota Motor
Corporation.
TOYOTA Material Handling Company
established as an in-house company.
RAV4 (SUV) production starts.
bB Open Deck (automobile) production
starts.
Name changed to Toyota Industries
Corporation.

ANNUAL REPORT 2001

X300 series forklift production starts.

1980s

Vitz (Yaris in Europe) production starts.

1CD-type diesel engine production starts.

Starlet (automobile) production starts.

Aerial work platform production starts.

1999

X500 series internal combustion
counterbalanced forklift truck production
starts.

R500 electric reach truck production
starts.

83

10S-type compressor production starts.

1994

1995

Compressor Division separates from
Textile Machinery Division.

1978

RX200 ring spinning frame production
starts.

TIBC Corporation (TIBC) established as a
joint venture with Ibiden Co., Ltd.
(“Ibiden”) to manufacture plastic
package substrates for IC chipsets.

TOYOTA INDUSTRIES CORPORATION

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

Corporate Organization(As of July 1, 2001)

Corporate Head Office
Corporate Planning Dept.
Business Planning Dept.
BT Office
TQM Promotion Dept.
Legal Dept.
Corporate Auditors Office
Advertising & Public Affairs Dept.
Secretarial Dept.

Committees

General Administration Dept.
Personnel Affairs & Labor Relations Dept.

Board of Directors

Management Committee

Accounting & Finance Dept.
Corporate Structural Reform Dept.

84

Corporate Information Technology Dept.

TOYOTA INDUSTRIES CORPORATION

Expanded Executive
Vice President Committee

Purchasing Dept.
Safety, Health & Environment Dept.
Quality Control Dept.

Environmental
Committee

Production Control Dept.
Production Engineering Dept.
Intellectual Property Dept.

ChairmanTechnical Training School
Health Care Administration Center

President

Tokyo OfficeOsaka OfficeCouncils

ANNUAL REPORT 2001

Corporate Code of
Conduct Council

Machinery & Tools Sub-Division

Mechatronics Engineering Sub-Division
Export Trade
Control Council

TOYOTA Material Handling Company*

Board of Auditors
Safety & HealthCouncil

Textile Machinery Division

Compressor Division
Auditors
Vehicle Division

Engine Division

Technology Development Center* TOYOTA Material Handling Company is simply the name ofa division of Toyota Industries, not a legally incorporated entity.

Directors and Corporate Auditors(As of June 28, 2001)

Board of Directors
Senior Managing Directors

Tetsuro Toyoda*
Morio Kawamura*
Shiro Endo*
Kazuhiko Takeuchi*
Managing Directors

ChairmanPresident

Akira Yokoi*

Tadashi Ishikawa*

Honorary Chairman

Yoshitoshi Toyoda
Directors

Executive Vice President

Shozo Nakayama*

Koichiro Noguchi**Representative Director

Corporate Auditors
Standing Corporate Auditors

Shigetaka Mitomo
Tadashi Komiya

Corporate Auditors

Iwao Isomura
Hiroshi Makino

ANNUAL REPORT 2001

Executive Vice President

Tatsuro Toyoda
Yoshimitsu Ogihara
Seiji Ueda
Shigetaka Yoshida
Tsuneyoshi Kajiwara
Shinichiro Matsuyama
Masafumi Kato
Yasuharu Toyoda
Kimpei Mitsuya
Hiroya Kono
Kazunori Yoshida
Kenji Takenaka

85
TOYOTA INDUSTRIES CORPORATION

Norio Sato
Masazumi Konishi
Shinjiro Kamimura
Tatsuo Matsuura
Masanori Itoh
Akira Imura
Iwao Katayama

Corporate Data
(As of March 31, 2001)

Plants and Offices
Main Products
Kariya Plant
Takahama Plant
Nagakusa Plant
Kyowa Plant
Obu Plant
Hekinan Plant
Higashichita Plant
Head Office and Others
Total

Textile machinery, car air-conditioning compressors
Forklift trucks, materials handling systems
Automobiles
Semiconductors, electronics equipment, press dies
Car air-conditioning compressors, foundry parts
Engines
Foundry parts

Number of
Employees

Land Area

1,800
1,586
2,171
844
462
1,279
81
912
9,135

170
329
271
164
156
271
332
842
2,535

(1,000 m 2)

Photo
NumberConsolidated Subsidiaries
Location

86
TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2001

Japan
TIBC Corporation
TOYODA-SULZER MANUFACTURING LTD.
ALTEX CO., LTD.
Sun River Co., Ltd.
IZUMI MACHINE MFG. CO., LTD.
TOKYU CO., LTD.
MINO TOKYU CO., LTD.
Toyoda High System, Incorporated
Nishina Industrial Co., Ltd.
Tokaiseiki Co., Ltd.
LOGISTEC CO., LTD.
SKE Inc.
SK Maintenance Inc.
Iwama Loom Works, Ltd.
KAWAMOTO SYSTEM CORPORATIONARTI Inc.
HARA CORPORATION
Mizuho Industry Co., Ltd.
Sun Valley Inc.
Sun Staff, Inc.
TOKAI SYSTEM INSTITUTE CORP.
Shine’s Inc.

Aichi
Aichi
Shizuoka
Osaka
Aichi
Aichi
Gifu
Aichi
NaganoShizuoka
Aichi
Aichi
Aichi
Aichi
Aichi
Aichi
Gifu
Aichi
Aichi
Aichi
Aichi
Aichi

Outside Japan
Toyoda International Sweden AB*1
BT Industries Group*1 (63 companies)
Toyota Industries North America, Inc.*2
Toyota Industrial Equipment Mfg., Inc. *2
Toyoda Textile Machinery, Inc. *2
TAL Personnel Service, Inc.*2
Toyota Material Handling USA, Inc.*2
Michigan Automotive Compressor, Inc.
TD Deutsche Klimakompressor GmbH
Kirloskar Toyoda Textile Machinery Ltd.
Toyota Industry Kunshan Co., Ltd.
Toyota Truck Norge Group*3 (4 companies)
Toyota Industrial Equipment, S.A.

Mjölby, Sweden–
Columbus, Indiana, U.S.A.
Columbus, Indiana, U.S.A.
Charlotte, North Carolina, U.S.A.
Charlotte, North Carolina, U.S.A.
Torrance, California, U.S.A.
Parma, Michigan, U.S.A.
Straßgräbchen, Sachsen, Germany
Bangalore, Karnataka, India
Kunshan, Jiangsu, China–
Ancenis, France(thousands of the local currency)

CapitalEquityOwnership

Photo
Number

¥3,000,000¥500,000¥200,000¥150,000¥150,000¥135,000¥18,000¥100,000¥100,000¥98,000¥90,000¥78,500¥50,000¥49,920¥47,000¥30,000¥23,193¥20,000¥20,000¥20,000¥10,000¥10,000

65.0%
100.0%
75.0%
81.3%
59.2%
63.3%
93.4%
90.0%
50.0%
92.1%
100.0%
100.0%
70.0%
50.0%
100.0%
100.0%
73.2%
93.8%
100.0%
100.0%
100.0%
100.0%

1

SEK6,652,977–
US$27,000
US$60,000
US$1,300
US$100
US$0
US$146,000
EUR20,452
Rs816,200
US$16,000–
EUR9,000

100.0%–
100.0%
80.0%
100.0%
100.0%
100.0%
60.0%
65.0%
85.5%
70.0%
–
52.8%

3
4

6
7

5

Unconsolidated Subsidiaries Accounted for by the Equity Method
Location

Capital(thousands of the local currency)

Outside JapanBT Industries Group*1 (2 companies*4)––

EquityOwnership

Photo
Number–Affiliates Accounted for by the Equity Method
CapitalLocationJapan
ST Liquid Crystal Display Corp.
TAIKOH TRANSPORTATION CO., LTD.

Aichi
Aichi

Outside JapanBT Industries Group*1 (15 companies)–(thousands of the local currency)

EquityOwnership

Photo
Number¥30,000,000¥83,985

50.0%
46.2%

2

–

–

Note: ¥–Japanese yen; SEK–Swedish krona; U.S.$–U.S. dollar; EUR– Euro; Rs– Indian rupee; NOK –Norwegian krone

Major Subsidiaries and Affiliates

2. ST Liquid Crystal Display Corp. (ST-LCD)

3. BT Industries AB (BT Industries)

4. Toyota Industrial Equipment Mfg., Inc. (TIEM)

6. Michigan Automotive Compressor, Inc. (MACI)

7. TD Deutsche Klimakompressor GmbH (TDDK)ANNUAL REPORT 2001

1. TIBC Corporation (TIBC)TOYOTA INDUSTRIES CORPORATION*1 BT Industries Group is composed of 80 subsidiaries and affiliates and is centered on the holding company BT Industries AB (headquartered in Mjölby, Sweden,
capitalized at SEK560 million). Toyoda International Sweden AB held 98.2% of the outstanding shares of BT Industries AB as of March 31, 2001.
*2 Toyota Industries North America, Inc. is a holding company that exercises control over Toyota Industrial Equipment Mfg., Inc., Toyoda Textile Machinery, Inc.,TAL Personnel Service, Inc. and Toyota Material Handling USA, Inc.
*3 Toyota Truck Norge Group is composed of four subsidiaries and is centered on the company Toyota Truck Norge AS (headquartered in Trondheim,
Norway, capitalized at NOK82,280 thousand).
*4 BT Industries AB temporarily held more than a 50% share of the capital of two subsidiaries as of December 31, 2000.

87

5. Toyota Industrial Equipment, S.A. (TIESA)Investor Information(As of March 31, 2001)

Corporate Head Office

Major Shareholders

TOYOTA INDUSTRIES CORPORATION(Effective August 1, 2001)
2-1, Toyoda-cho, Kariya-shi, Aichi-ken 448-8671, Japan
Telephone: +81-(0)566-22-2511
Facsimile: +81-(0)566-27-5650% ofOwnership

Date of Establishment
November 18, 1926

Common Stock88

TOYOTA MOTOR CORPORATION

24.67

DENSO CORPORATION

7.10

Nippon Life Insurance Company

4.75

The Chuo Mitsui Trust and Banking Company, Limited

4.58

The Sakura Bank, Limited *1

4.34

The Tokai Bank, Limited

*2

4.05

Par value: ¥50
Authorized: 1,091,245,000 shares
Issued and outstanding: 313,296,225 shares

The Sanwa Bank, Limited *2

2.88

Mitsui Marine and Fire Insurance Co., Ltd.

2.51

Stock Exchange Listings

Towa Real Estate Co, Ltd.

TOYOTA INDUSTRIES CORPORATIONTokyo, Osaka and Nagoya(Ticker Code: 6201)

2.46

The Toyo Trust and Banking Company, Limited

*2

2.29

*1

On April 1, 2001, The Sakura Bank, Limited and The Sumitomo Bank,
Limited merged to form Sumitomo Mitsui Banking Corporation. Together,
they held 4.39% of the then issued shares.
*2 On April 2, 2001, The Sanwa Bank, Limited, The Tokai Bank, Limited and The
Toyo Trust and Banking Company, Limited integrated their businesses under
the newly established holding company, UFJ Holdings, Inc. Together, theyheld 9.22% of the then issued shares.

Number of Shareholders
8,626

Independent Accountants
ChuoAoyama Audit Corporation
3-28-12, Meieki, Nakamura-ku, Nagoya-shi, Aichi-ken
450-8565, Japan

ANNUAL REPORT 2001

Transfer Agent
The Toyo Trust and Banking Company, Limited
1-4-3, Marunouchi, Chiyoda-ku, Tokyo-to 100-0005, Japan
Telephone: +81- (0)3-3287-2211

Common Stock Price & Trading Volume (Tokyo Stock Exchange)
High
Opening
Closing
Low

(yen)

High
Closing
Opening
Low

Black: Opening Price > Closing PriceWhite: Closing Price > Opening Price(thousand shares)
24,0003,000
Common stock price (left scale)
2,500

20,0002,000

16,00012,0001,500
Trading volume (right scale)
1,000

8,000

500

4,000

0

4/96

7

10

1/97

4

7

10

1/98

4

7

10

1/99

4

7

10

1/00

4

7

10

1/01

4

0

89
TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2001

Publications
Our Corporate Brochure and Environmental Report are available in both English and Japanese upon written request to
the Advertising & Public Affairs Department at our Corporate Head Office.

Internet Home Page
Updated information is published regularly on our website. (http://www.toyota-industries.com/)

Further Information
For further information, please write to the Planning Section of the Accounting & Finance Department or the Corporate
Communications Section of the Advertising & Public Affairs Department at our Corporate Head Office.

This annual report is printed on officiallycertified recycled and Kenaf paper (100%tree-free paper) using soy ink to minimize
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