Notes to Consolidated Financial Statements
1. Basis of presenting consolidated financial statements
On June 27, 2001, the Ordinary General Meeting of
Shareholders of Toyoda Automatic Loom Works, Ltd. approved
to change the company name to Toyota Industries Corporation
effective August 1, 2001. The accompanying consolidated
financial statements have been prepared based on theaccounts maintained by 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 Codeand the Securities and Exchange Law, and in conformity withaccounting principles and practices generally accepted inJapan, which are different in certain respects from theapplication and disclosure requirements of International
Accounting Standards.
Certain items presented in the consolidated financial

statements submitted to the Director of Kanto Finance Bureau
in Japan have been reclassified in these accounts for theconvenience of readers outside Japan.
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 ¥133.25=US$1, the approximate rate of exchange prevailing at March
29, 2002, has been used in translation. The inclusion of suchamounts are not intended to imply that the Japanese yen havebeen or could be converted into equivalent amounts in U.S.
dollars at this rate or any other rates.

2. Summary of significant accounting policies(1) Consolidation
The consolidated financial statements include the accounts of
the Company and its 111 subsidiaries (26 domestic
subsidiaries and 85 overseas subsidiaries, which are listed on
page 94 and 95) in 2002, 100 subsidiaries (22 domestic
subsidiaries and 78 overseas subsidiaries) in 2001 and 29
subsidiaries (22 domestic subsidiaries and seven overseas
subsidiaries) in 2000. The unconsolidated subsidiaries arethose which have no material effect on the consolidated
financial statements of Toyota Industries, or Toyota Industries’
majority ownership of such subsidiaries would be temporary.
For the year ended March 31, 2002, 15 subsidiaries were
newly added to the scope of consolidation and four
companies were excluded from the scope of consolidation.
Since five subsidiaries out of 15 subsidiaries are deemed as
being acquired by the Company as of the semiannual period
end, the results of operations of the latter half of the year of
those subsidiaries are consolidated in the consolidated
financial statements. One unconsolidated subsidiary is
excluded from the scope of consolidation since ownership is
temporary.
For the year ended March 31, 2001, 72 subsidiaries,
including 63 BT Industries Group companies, were newly

added to the scope of consolidation. Since 64 subsidiaries outof 72 subsidiaries were deemed as being acquired by theCompany as of the semiannual period end, the results ofoperations of the latter half of the year of those subsidiaries
are consolidated in the consolidated financial statements. Twounconsolidated subsidiaries are excluded from the scope of
consolidation since ownership is 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.
The fiscal years of certain subsidiaries are different from thefiscal year of the Company. Since the difference is not morethan three months, the Company is using those subsidiaries’
statements for those fiscal years, making adjustments for
significant transactions that materially affect the financial
position or results of operations.
All significant intercompany transactions, balances andunrealized profits within Toyota Industries have been
eliminated.
A full portion of the assets and liabilities of the acquired
subsidiaries is stated at fair value as of the date of acquisitionof control.

(2) Investments in unconsolidated subsidiaries and affiliates
Investments in one unconsolidated subsidiary and 18 majoraffiliates in 2002, two unconsolidated subsidiaries and 17
major affiliates in 2001 and two affiliates in 2000 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 arelisted on page 95.

TOYOTA INDUSTRIES CORPORATION ANNUAL REPORT 2002

57

(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. The resulting
translation adjustments are included as a separate componentof 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 three months
or less, that are readily convertible to known amounts of cash

and are so near maturity that they present insignificant risk ofchanges in value because of changes in interest rates.

(5) Marketable securities and investment in securities
Until the year ended March 31, 2000, marketable securities(current) and investment in securities (non-current) with amarket quotation on a stock exchange were valued at thelower of moving-average cost or market value. Marketablesecurities and investment in securities without a market
quotation were valued at moving-average cost.
Effective beginning 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. The new accounting standards
require Toyota Industries to classify securities into four
categories by purpose of holding: trading securities, held-tomaturity securities, other securities and investments inunconsolidated subsidiaries and affiliates. Toyota Industries
had no trading securities or held-to-maturity securities as ofMarch 31, 2002 and 2001.
Other securities with readily determinable fair values arestated at fair value based on market prices at the end of theyear. Unrealized gains and losses are included in “Netunrealized gains on other securities” as a separate componentof shareholders’ equity. Cost of sales of such securities isdetermined by the moving-average method. Other securities
without readily determinable fair values are stated at cost, as
determined by the moving-average method.
Investments in unconsolidated subsidiaries and affiliates
are accounted 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 are computed
mainly by the declining-balance method for the Company andJapanese subsidiaries and by the straight-line method forforeign subsidiaries. Significant renewals and additions arecapitalized at cost. Repair and maintenance are charged toincome as incurred.
Accumulated depreciation as of March 31, 2002 and 2001
was ¥447,600 million (US$3,359,099 thousand) and ¥406,843
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 less than 20
years on a straight-line basis, while immaterial goodwill ischarged to income as incurred. Goodwill incurred before April 1,
2000 has been amortized over five years on a straight-line basis.

(9) Allowances for doubtful accounts
Toyota Industries adopted the policy of providing an allowancefor doubtful accounts in an amount sufficient to cover possible
losses on collection by estimating individually uncollectible

amounts and applying to the remaining accounts a
percentage determined by certain factors such as historicalcollection experiences.

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

58

TOYOTA INDUSTRIES CORPORATION ANNUAL REPORT 2002

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

(12) Lease transactions
Finance leases other than those that are deemed to transfer theownership of the leased assets to lessees are accounted formainly by a method similar to that applicable to ordinary
operating leases.

(13) Consumption tax
The consumption tax under the Japanese Consumption Tax Law
withheld by Toyota Industries on sales of goods is not included 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
Mainly the deferral method of hedge accounting is applied. In
the case of foreign currency forward contracts, the hedged
items are translated at contracted forward rates if certain
conditions are met. In the year ended March 31, 2002 , foreignexchange forward contracts and foreign currency option
contracts are used for hedging risk of change in foreignexchange rate relating to accounts receivable.
(b) Hedging instruments and hedged items
Hedging instruments: derivatives instruments (interest rate
swaps, foreign currency forwards andforeign currency option contracts)
Hedged items:
risk of change in interest rate on
borrowings and risk of change inforward exchange rate on transactions
denominated in foreign currencies(monetary assets and liabilities,
marketable securities and forecasted
transactions)(c) Hedging policy
Hedging transactions are executed and controlled based on
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.
(d) Method used to measure hedge effectivenessHedge effectiveness is measured by comparing accumulatedchanges in market prices of hedged items and hedging
instruments or accumulated changes in estimated cash flows
from the inception of the hedge to the date of measurements
performed. Currently it is considered that there are highcorrelations between them.
(e) Others
Due to the fact that counterparties to Toyota Industries
represent major financial institutions which have 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 todirectors and corporate auditors is made out of retained
earnings through an appropriation, instead of being charged
to income for the year.

(16) Income taxes
Effective beginning the year ended March 31, 2000, tax effectaccounting has been adopted. The change in accounting
policies is discussed in Note 3.
Provision for income taxes is computed based on the pretax
income included in the consolidated statements of income.
The asset and liability approach is used to recognize deferred

tax liabilities and assets for the expected future tax
consequences of temporary differences between the carrying
amounts and the tax bases of assets and liabilities.
Valuation allowances are recorded to reduce deferred tax
assets when it is more likely than not that a tax benefit will not
be realized.
TOYOTA INDUSTRIES CORPORATION ANNUAL REPORT 2002

59

(17) Net income per share
The computation of basic net income per share is based on theweighted-average number of outstanding shares of common
stock. The calculation of diluted net income per share is similar
to the calculation of basic net income per share, except thatthe weighted-average number of shares outstanding includes

the additional dilution from potential common stock
equivalents such as convertible bonds. Cash dividends 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(a) Allowance for retirement and severance benefits
for directors and corporate auditors
The Company’s retirement and severance benefits for directors
and corporate auditors were previously recorded as expenses
at the time they were awarded. However, in order to makeperiod earnings more appropriate, beginning 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 and income before income taxes decreased by¥2,525 million.
(b) Accounting for retirement benefits
Effective beginning 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 and income before income taxes
decreased by ¥4,982 million. Also, cumulative effect of changein accounting standards for retirement benefits of ¥19,057
million was charged to income and recorded as an
extraordinary loss, and gain on securities contribution toemployee retirement benefit trust of ¥15,080 million was
charged to income and recorded as an extraordinary gain.
Allowance for retirement and severance benefits andunamortized prior service cost are included in allowance forretirement benefits.

(c) Accounting for financial instruments
Effective beginning 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. At the beginning of
the year ended March 31, 2001, Toyota Industries reviewed theholding purposes of the securities it owns. As a result,marketable securities expiring within one year were classified
under current assets as marketable securities and the others
were classified as investment in securities. As a result,marketable securities decreased by ¥394 million andinvestment in securities increased by the same amount.
(d) Accounting for foreign currency transactions
Effective beginning the year ended March 31, 2001, theamended accounting standards for foreign currencytransactions have been applied. Neither profits nor losses
resulted from this change. Effective beginning 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 andincluded in minority interest in consolidated subsidiaries dueto the amendment of Japanese Regulations Concerning the
Terminology, Forms and Preparation Methods of Consolidated
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 new standards,
Toyota Industries has changed its criteria with regard to theidentification of companies to be consolidated from thepercentage-of-ownership approach to the effective control

60

TOYOTA INDUSTRIES CORPORATION ANNUAL REPORT 2002

approach. Pro forma disclosure of the effect of the retroactive
application of the new accounting standards is not required
under accounting standards generally accepted in Japan. As aresult of the adoption of the new standards, two companies
have been newly consolidated because Toyota Industries wasdeemed to have effective control over those two companies.

(b) Translation of foreign subsidiaries’
financial 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 revenue andexpenses 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 and income
before income taxes increased by ¥198 million for the 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 an amount of ¥9,867 million, ¥4,556
million in current assets and ¥5,311 million in investments andother assets, and deferred tax liabilities were recognized in an
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 million and ¥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.

4. Acquisitions(1) For the year ended March 31, 2002
Summary of assets and liabilities that increased due to the acquisition of business (materials handling sales operation) from Toyota
Motor Corporation is as follows:
Millions of yen

Thousands of
U.S. dollars

Current assets¥11,912$ 89,396

Fixed assets

14,957112,248

Current liabilities(1,184)(8,886)Long-term liabilities(1,152)(8,645)Acquisition cost

24,533

184,113(814)(6,109)¥23,719$178,004

Less: cash and cash equivalents
Cash payment for the acquisition(2) For the year ended March 31, 2001
By May 31, 2000, the Company had acquired 97.1% of theshare capital of BT Industries AB, a holding company of BT
Industries Group, which consists of materials handlingequipment manufacturing and sales companies. Due to thisacquisition, Toyota Industries recorded goodwill amounting to¥61,557 million, 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

Current assets¥ 56,289

Fixed assets

117,255

Current liabilities(33,559)

Long-term liabilities(49,450)

Minority interest(762)

Acquisition cost of BT Industries AB

89,773

Less: cash and cash equivalents in BT Industries AB(3,745)

Cash payment for the acquisition of BT Industries AB¥ 86,028

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

61

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

Current assets¥1,222

Fixed assets

386

Total assets

1,608

Current liabilities

99

Long-term liabilities

11

Total liabilities¥ 110

5. Marketable securities(1) As of and for the year ended March 31, 2002(a) Other securities with readily determinable fair value as of March 31, 2002 are as follows:
Thousands of U.S. dollars

Millions of yen

Acquisition
cost

Carrying
amountDifference

Acquisition
cost

Carrying
amount¥160,158¥941,875¥781,717$1,201,936 $7,068,480 $5,866,544

2,999

3,000

1

22,506

22,514

8

163,157

944,875

781,718

1,224,442

7,090,994

5,866,552

15,324

10,014(5,310)115,00275,152(39,850)

Difference

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

0

0

–

0

0

–

7,093

7,090

(3)

53,23153,208

(23)

3

3

–

23

23

–

22,42017,107(5,313)

168,256

128,383(39,873)¥185,577¥961,982¥776,405

Other bonds
SubtotalTotal

In this year, Toyota Industries recorded ¥302 million (US$2,269
thousand) of impairment on an equity security included in$1,392,698 $7,219,377 $5,826,679

securities with carrying amount not exceeding the cost lines.

(b) Other securities sold during the year ended March 31, 2002 are as follows:
Millions of yen

Proceeds¥17,967

62

Thousands of U.S. dollars

Realized gains

Realized losses

¥242

¥11

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

Proceeds$134,837

Realized gains

Realized losses$1,816$83

(c) Contents and carrying amount of securities (excluding held-to-maturity bonds within securities with fair value) without readily
determinable fair value as of March 31, 2002 are as follows:
Carrying amountThousands of
U.S. dollars

Millions of yen

Held-to-maturity securities

¥

–

$

–

Other securities
Domestic unlisted stocks excluding over-the-counter stocks

14,996

112,540

Money management funds

20,440

153,396753

Foreign unlisted bonds(d) Redemption schedule of securities which have maturities within other securities as of March 31, 2002 is as follows:
Millions of yen

Over 1 year
within5 years

Within1 yearThousands of U.S. dollars

Over 5 years
within
10 yearsOver
10 years

Over 1 year
within5 years

Within1 yearOver 5 years
within
10 yearsOver
10 years

Bonds
Government bonds
Corporate bonds

¥

0

¥–

¥–

0

$–

$–

8,379

–

1,711

–

–

62,882

12,841

–

–

2

7

–

–

15

52

–

–

¥8,381¥1,718¥–¥–$ 62,897$12,893

$–

$–

Other
Total

¥

$

–

$

(2) As of and for the year ended March 31, 2001(a) Other securities with readily determinable fair value as of March 31, 2001 are as follows:
Millions of yen

Acquisition
cost

Carrying
amount¥159,376¥1,110,176¥950,800

13,702

13,723

21

–

–

–

–

–

–

173,078

1,123,899

950,821

7,995

7,560

(435)

Difference

Securities with carrying amount exceeding acquisition cost:
Stocks
Bonds
Corporate bonds
Other bonds
Other
Subtotal
Securities with carrying amount not exceeding acquisition cost:
Stocks
Bonds
Government and municipal bonds, etc.
Corporate bonds

0

0

–

2,498

2,475

(23)

3

3

–

Other bonds
Other

720

720

–

Subtotal

11,216

10,758(458)¥184,294¥1,134,657¥950,363

ANNUAL REPORT 2002

63

Total
In this year, Toyota Industries recorded ¥2 million of impairment
on an equity security included in securities with carrying

amount not exceeding the cost lines.

TOYOTA INDUSTRIES CORPORATION

(b) Other securities sold during the year ended March 31, 2001 are as follows:
Millions of yen

Proceeds

Realized gains

Realized losses¥23,689¥15,317¥0Proceeds include ¥17,845 million of proceeds from theestablishment of retirement benefit trust. And, realized gains

include ¥15,080 million of gain on securities contribution toemployee retirement benefit trust.

(c) Contents and carrying amount of securities (excluding held-to-maturity bonds within securities with fair value) without readily
determinable fair value as of March 31, 2001 are as follows:
Millions of yen

Held-to-maturity securities¥–

Other securities
Domestic unlisted stocks excluding over-the-counter stocks

12,644

Commercial paper used in repurchase agreements

3,999

Bonds used in repurchase agreements

2,000

Money management funds

341

Foreign unlisted bonds

310(d) Redemption schedule of securities which have maturities within other securities as of March 31, 2001 is as follows:
Millions of yen

Over 1 year
within5 years

Within1 yearOver 5 years
within
10 yearsOver
10 years

Bonds
Government bonds¥

Corporate bonds
Other
Securities other than bonds
Total

–

¥

–

¥0

¥

–

10,702

4,518

–

978

3

10

–

300

6,022

129

–

–

¥16,727¥4,657¥0¥1,278

6. Inventories
Inventories as of March 31, 2002 and 2001 consist of the following:Thousands of
U.S. dollars

Millions of yen

2002

2001

2002

Finished goods¥27,490¥16,164$206,304

Raw materials

11,733

10,32988,052Work in process

25,193

21,370

189,066

Supplies
Total

64

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

6,095

4,900

45,741¥70,511¥52,763$529,163

7. Long-term debt
(1) Long-term debt as of March 31, 2002 and 2001 consists of the following:Thousands of
U.S. dollars

Millions of yen

2002

2001

2002

¥ 75,742¥ 75,748$ 568,420

2.70% bonds due 2008 without collateral

30,00030,000225,141

1.50% bonds due 2003 without collateral

20,00020,000150,094

2.15% bonds due 2008 without collateral

20,00020,000150,094

1.50% bonds due 2006 without collateral

15,00015,000112,570

1.94% bonds due 2009 without collateral

15,00015,000112,570

1.25% bonds due 2005 without collateral

20,00020,000150,094

1.91% bonds due 2010 without collateral

20,00020,000150,094

The Company:
0.35% convertible bonds due 2003 without collateral

Consolidated subsidiaries:
1.80% bonds due 2005

300

300

2,251

Long-term bank loans

67,89953,555509,561(1,958)(1,108)(14,694)¥281,983¥268,495$2,116,195

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 the conversion
price was ¥1,983.90 (US$14.89) per share as of March 31, 2002.

The aggregate number of shares issuable upon conversion
thereof at such conversion price was 38,178 thousand shares.

(2) Annual maturities of long-term debt as of March 31, 2002 are as follows:Year ending March 31

Millions of yen

2003

¥

2004

1,958
146,964

Thousands of
U.S. dollars$

14,694
1,102,919

2005

3,783

28,3902006

25,309189,936

2007

15,603

117,096

2008 and thereafter
Total

TOYOTA INDUSTRIES CORPORATION

90,324

677,854¥283,941$2,130,889

ANNUAL REPORT 2002

65

8. Assets pledged as collateral(1) Assets pledged as collateral as of March 31, 2002 and 2001 are as follows:
Thousands of
U.S. dollars

Millions of yen

2002

2001

2002

Investments in securities¥21,854¥23,116$164,008

Buildings and structures

4,213

4,249

31,617

Land

3,715

3,190

27,880Machinery, equipment and vehicles

734

383

5,508

Trade notes and accounts receivable

449

200

3,369

Other

29

29

218

Total

¥30,994¥31,167$232,600(2) Secured liabilities as of March 31, 2002 and 2001 are as follows:
Thousands of
U.S. dollars

Millions of yen

2002

2001

2002

Other current liabilities¥18,468¥17,608$138,596

Short-term bank loans

10,923

8,702

81,974Long-term debt

2,691

1,867

20,195¥32,082¥28,177$240,765

Total

9. Contingent liabilities
Toyota Industries is contingently liable for guarantees as of March 31, 2002 and 2001 as follows:
Thousands of
U.S. dollars

Millions of yen

2002

2001

2002

¥

338

$ 1,966

Guarantees given by the Company¥ 262

Guarantees given by consolidated subsidiaries

5,205

3,468

39,062

Guarantee forwards given by the Company

3,881

3,363

29,126–

10,289–Acts similar to guarantees given by consolidated subsidiaries
Guarantees given by consolidated subsidiaries consist of421,480 and 288,278 thousand of Swedish krona as of March 31,
2002 and 2001, and acts similar to guarantees given by

consolidated subsidiaries consist of 855,299 thousand of
Swedish krona as of March 31, 2001.

10. Accounting for notes receivable and notes payable maturing at year-end date
Although year-end dates of the years ended March 31, 2002 and2001 were a holiday for banking institutions, the following
notes receivable and notes payable were accounted as if they
were settled at year-end date. Consequently, they are notincluded in trade notes and account receivable and trade notes
and accounts payable on the balance sheet as of March 31, 2002
and 2001, respectively.

Thousands of
U.S. dollars

Millions of yen

2002

2001

2002

Notes receivable

¥ 763

¥569

$ 5,730

Notes payable

1,529

857

11,47566

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

11. Shareholders’ equity
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 to reducea deficit or may be transferred to common stock by taking
appropriate corporate action. In consolidation, the legal
reserves of the Company and its domestic subsidiaries areaccounted for as retained earnings.
Year-end cash dividend is approved at the Ordinary 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 theJapanese 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 the proceeds
have been accounted for as common stock, in accordance withthe provisions of the Japanese Commercial Code.

12. Research and development expenses
Research and development expenses, which are included inselling, general and administrative expenses and manufacturingcosts, amounted to ¥29,985 million (US$225,028 thousand),¥26,196 million and ¥24,062 million for the years ended March
31, 2002, 2001 and 2000, respectively.

13. Derivative instruments
For the years ended March 31, 2002 and 2001
(1) Qualitative disclosure about derivatives(a) Contents of derivative instruments into which Toyota
Industries entered, policy with respect to entering into
derivative instruments, and purpose of using derivative
instruments:
Toyota Industries uses interest rate swap agreements andforeign currency forward contracts to reduce interest raterisks on borrowings and to hedge foreign currency risks ontransactions denominated in foreign currencies(receivables and payables, securities, and forecasted
transactions),respectively.
In the year ended March 31, 2002, Toyota Industries also
used foreign currency option contracts to hedge foreign
currency risks on transactions denominated in foreign
currencies.
(b) Contents of risks related to derivative instruments:
Interest rate swaps, foreign currency forward contracts andforeign currency option contracts into which Toyota

Industries entered have risks of fluctuations in interest
rates and in foreign currency exchange rates. Due to thefact that counterparties to Toyota Industries represent
major financial institutions which have highcreditworthiness, Toyota Industries believes that theoverall credit risk related to its financial instruments is
insignificant.
(c) Controls in place over transactions handling derivative
instruments:
Hedging transactions are executed and controlled basedon Toyota Industries’ internal rule and Toyota Industries’
hedging activities are reported periodically to a director
responsible for accounting.
(2) Quantitative disclosure about derivatives
Toyota Industries omitted this information because hedge
accounting is applied to all of the derivative instruments into
which Toyota Industries entered.

14. Retirement benefits(1) Outline of retirement benefit plans:
The Company and its domestic subsidiaries maintain tax
qualified pension plans and lump-sum indemnities plans, bothof which are non-contributory defined benefit pension plans. In
addition, certain foreign subsidiaries maintain non-contributory
defined benefit pension plans. Since 1987, the Company has

been transferring the covering percentages of pension planfrom lump-sum indemnities plan to tax qualified pension plan.
As of March 31, 2002, tax qualified pension plan covers 50% of
total plans. Also, the Company established an employee
retirement benefit trust.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 200267

(2) Components of allowance for retirement benefits as of March 31, 2002 and 2001 are as follows:
Thousands of
U.S. dollars

Millions of yen

2002

2001

2002

Benefit obligation¥ 80,039¥ 71,458$ 600,668

Plan assets(49,105)(46,513)(368,518)

Unfunded benefit obligation

30,93424,945

232,150

Unrecognized actuarial loss

(9,581)(4,812)(71,902)

Net amount recognized on the balance sheet

21,353

20,133

160,248

Prepaid pension expenses
Allowance for retirement benefits
Certain subsidiaries use the simplified method to determine
benefit obligations. Prepaid pension expenses are included inother investments and other assets. Allowance for retirement
benefits on the balance sheet includes ¥2,372 million(5,115)(2,598)(38,386)¥ 26,468¥ 22,731$ 198,634(US$17,794 thousand) and ¥2,803 million of allowance forretirement and severance benefits for directors and corporate
auditors as of March 31, 2002 and 2001, respectively, as
discussed in Note 3.

(3) Components of retirement benefit expenses for the years ended March 31, 2002 and 2001 are as follows:
Thousands of
U.S. dollars

Millions of yen

2002

2001

2002

Service cost

¥6,018¥ 3,799$45,163Interest cost

1,843

1,677

13,831

Expected return on plan assets

(704)

(637)

(5,283)–19,057

–

225

–

1,689

¥7,382¥23,896$55,400

Amortization of transition obligation
Amortization of unrecognized actuarial loss
Retirement benefit expenses

accounting standards for retirement benefit’s adoption,amortization of transition obligation also included ¥17,845
million of one-time amortization of retirement benefit
obligation which was equivalent to fair value of trust properties
at the time of its contribution.

Retirement expenses of subsidiaries which adopted thesimplified method are included in both service cost andamortization of transition obligation.
Due to the establishment of a retirement benefit trust in theyear ended March 31, 2001, which was the first year of(4) Assumptions used for calculation of retirement benefits for the years ended March 31, 2002 and 2001 are as follows:
2002

2001

Method of attribution of estimated retirement benefits
to periods of employee service: straight-line method
Discount rate

3.0%

3.0%

Expected return on plan assets

3.0%

3.0%

20 years

20 years

Amortization period of unrecognized actuarial gains or losses

Straight-line method over the averageremaining service period of employees
starting from following year

Amortization period of net transition obligation

68

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002–

1 year15. Income taxes(1) The significant components of deferred tax assets and liabilities as of March 31, 2002 and 2001 are as follows:
Thousands of
U.S. dollars

Millions of yen

2002

2001

2002

Deferred tax assets:
Allowance for retirement benefits

¥

4,090

¥

3,562

$

30,694

Trade receivables

3,282

3,203

Accrued expenses

3,272

2,330

24,555

Net operating loss carry-forwards for tax purposes

2,806

2,290

21,058Depreciation

2,386

1,708

17,906

Securities

1,456

1,034

10,927

709

1,058

5,321

Other

9,608

4,602

72,105

Subtotal

27,60919,787207,196

Enterprise tax payable

Less — valuation allowance
Total deferred tax assets

24,630(2,382)(2,448)(17,876)

25,227

17,339189,320

Deferred tax liabilities:
Other securities

319,819

391,484

2,400,143

Depreciation

4,290

1,618

32,195

Land

1,138

1,112

8,540

Reserve for advanced depreciation

338

384

2,537

Reserve for special depreciation

290

96

2,176

3,506

148

26,311

Total deferred tax liabilities

329,381394,8422,471,902

Net deferred tax liabilities¥(304,154)¥(377,503)$(2,282,582)

Other

Net deferred tax liabilities consist of the following components on the consolidated balance sheet.
Thousands of
U.S. dollars

Millions of yen

2002
Current assets — deferred tax assets¥ 10,081

2001
¥

2002

8,686

$

75,655Investments and other assets — deferred tax assets

2,237

1,374

16,788Current liabilities — deferred tax liabilities

(494)

(15)

(3,707)Long-term liabilities — deferred tax liabilities(315,978)(387,548)(2,371,318)

Net deferred tax liabilities¥(304,154)¥(377,503)$(2,282,582)

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 200269

(2) Reconciliations of differences between the statutory rate of income taxes and the effective rate of income taxes for the years
ended March 31, 2002, 2001 and 2000 are as follows:
2002
Statutory rate of income taxes

2001

2000

41.2%

41.2%

41.2%

Equity in losses of affiliates

0.8

1.0

7.6

Net pre-tax losses of subsidiaries

0.6

1.4

3.5

Elimination of dividend income

0.7

0.9

1.3

Dividends income and others permanently not recognized as taxable income

(5.4)

(6.7)

(8.6)

Addition (reduction) in taxes resulting from:Amortization of goodwill

4.1

–

–

Other

(0.8)

1.0

1.3

41.2%

38.8%

46.3%

Effective rate of income taxes

16. Leases(1) Finance leases (as a lessee) which do not transfer ownership of leased properties to lessees(a) Pro forma information regarding the leased properties such as acquisition cost and accumulated depreciation, which are notreflected in the accompanying consolidated balance sheets, as of March 31, 2002 and 2001 is as follows:
Thousands of
U.S. dollars

Millions of yen

2002

2001

2002

Machinery and equipment:
Acquisition cost equivalents
Accumulated depreciation equivalents¥5,849¥2,339$43,895

1,391

910

10,439

4,458

1,429

33,456

Acquisition cost equivalents

5,313

4,660

39,872

Accumulated depreciation equivalents

2,530

2,228

18,987

Tools, furniture and fixtures net balance equivalents

2,783

2,432

20,885

Total net leased properties¥7,241¥3,861$54,341

Machinery and equipment net balance equivalents
Tools, furniture and fixtures:

Acquisition cost equivalents include the imputed interest
expense portion because the percentage which is computed by

dividing future minimum lease payments by total balance ofproperty, plant and equipment at year-end is immaterial.

(b) Pro forma information regarding future minimum lease payments as of March 31, 2002 and 2001 is as follows:
Thousands of
U.S. dollars

Millions of yen

2002

2001

2002

Due within 1 year

¥1,937¥1,302$14,537

Due after 1 year

5,304

2,559

39,805

Total¥7,241¥3,861$54,342

The amount equivalent to future minimum lease payments asof the end of the year includes the imputed interest expense
portion because the percentage which is computed by dividing

70

TOYOTA INDUSTRIES CORPORATION ANNUAL REPORT 2002

future minimum lease payments by total balance of property,
plant and equipment at year-end is immaterial.

(c) Total lease payments for the years ended March 31, 2002, 2001 and 2000 are as follows:
Millions of yen

Thousands of
U.S. dollars

2002¥1,842$13,824

2001

1,505

–

2000

1,749

–

Pro forma depreciation expenses, which are not reflected in theaccompanying consolidated statements of income, arecomputed mainly by the straight-line method, which assumes

zero residual value and leasing term to be useful lives for theyears ended 2002, 2001 and 2000, and are equivalent to theamount of total lease payments of the above.

(2) Operating leases (as a lessee)(a) Pro forma future lease payments under operating leases as of March 31, 2002 and 2001 are as follows:
Thousands of
U.S. dollars

Millions of yen

2002

2001

2002

Due within 1 year

¥ 2,545¥ 5,116$19,099

Due after 1 year

9,696

9,543

72,766¥12,241¥14,659$91,865

Total(3) Finance leases (as a lessor) which do not transfer ownership of leased properties to lessees(a) Information regarding leased properties such as acquisition cost and accumulated depreciation under finance leases as ofMarch 31, 2002 and 2001 is as follows:
Thousands of
U.S. dollars

Millions of yen

2002

2001

2002

Machinery and equipment:
Acquisition cost

¥6,975¥–$52,345

Accumulated depreciation

4,005

–

30,056¥2,970¥–$22,289

Total net leased property(b) Pro forma information regarding future minimum lease payments as of March 31, 2002 and 2001 is as follows:
Thousands of
U.S. dollars

Millions of yen

2002
Due within 1 year

¥1,658

2001

2002
¥–

$12,443

Due after 1 year

2,966

–

22,259Total¥4,624¥–$34,702

The amount equivalent to future minimum lease payments
includes the imputed interest income portion because thepercentage which is computed by dividing future minimum

lease payments by total balance of property, plant andequipment at year-end is immaterial.

TOYOTA INDUSTRIES CORPORATION ANNUAL REPORT 200271

(c) Total lease receipts and depreciation expenses for the years ended March 31, 2002 and 2001 are as follows:
Thousands of
U.S. dollars

Millions of yen

2002

2001

2002

Total lease payments to be received¥2,220¥–$16,660

Depreciation expenses

1,112

–

8,345

(4) Operating leases (as a lessor)
Pro forma information regarding future minimum rentals under operating leases as of March 31, 2002 and 2001 is as follows:
Thousands of
U.S. dollars

Millions of yen

2002

2001

2002

Due within 1 year

¥ 4,525¥1,456$33,959

Due after 1 year

7,147

7,717

53,636¥11,672¥9,173$87,595

Total

17. Subsequent event
On June 27, 2002, the shareholders of the Company authorized
payment of a year-end cash dividend to shareholders of record asof March 31, 2002 of ¥10 (US$0.075) per share, or a total of ¥3,127
million (US$23,467 thousand), and bonuses to directors and

72

TOYOTA INDUSTRIES CORPORATION ANNUAL REPORT 2002

corporate auditors of ¥208 million (US$1,561 thousand). Cashdividends for the year totaled ¥19 (US$0.143) per share, includinginterim cash dividend of ¥9 (US$0.068).

18. Segment information(1) Business segments
As of and for the years ended March 31, 2002, 2001 and 2000:
Thousands of
U.S. dollars

Millions of yen

2002

2001

2000

2002

¥ 563,599¥457,631¥423,413$4,229,636

Sales:
Automobile
Outside customer sales
Intersegment transactions

15,412

4,097

3,335

115,662

579,011

461,728

426,748

4,345,298

353,043

236,502

149,0852,649,479

Materials handling equipment
Outside customer sales
Intersegment transactions

44

–

–

330

353,087

236,502

149,0852,649,809

30,70533,23823,135

230,432

50

–

–

375

30,75533,23823,135

230,807

Outside customer sales

32,81640,01230,140246,274

Intersegment transactions

11,056

4,531

2,613

82,972

Textile machinery
Outside customer sales
Intersegment transactions
OthersSubtotal
Elimination of intersegment transactions

43,87244,54332,753329,246

1,006,725

776,011

631,7217,555,160(26,562)(8,628)(5,948)(199,340)¥ 980,163¥767,383¥625,773$7,355,820¥ 550,051¥433,203¥402,320$4,127,962

Materials handling equipment

339,721

221,955

143,335

2,549,502

Textile machinery

31,14633,203

26,107

233,741

Others39,39040,17832,001

295,610

Elimination of intersegment transactions(26,475)(8,460)(6,857)(198,687)¥ 933,833¥720,079¥596,906$7,008,128¥

28,960¥ 28,525¥ 24,428$ 217,336

Total
Operating costs and expenses:
Automobile

Total
Operating income (loss):
Automobile

13,366

14,547

5,750

100,307

Textile machinery

Materials handling equipment

(391)

35

(2,972)(2,934)

Others

4,482

4,365

752

33,636

(87)

(168)

909

(653)

46,330¥ 47,304¥ 28,867$ 347,692

Elimination of intersegment transactions
Total

¥

TOYOTA INDUSTRIES CORPORATION ANNUAL REPORT 2002

73

(Continued from page 73)
Thousands of
U.S. dollars

Millions of yen

2002

2001

2000

2002

¥ 317,133¥ 282,504¥266,839$ 2,379,985

319,335

270,975

81,343

2,396,510

Assets:Automobile
Materials handling equipment
Textile machinery

22,32325,404

23,427

167,527

Others31,640

15,48718,012

237,448

Corporate assets or elimination
Total

1,079,970

1,275,272

296,293

8,104,841¥1,770,401¥1,869,642¥685,914$13,286,311

¥

¥

$

Depreciation and amortization:
Automobile

31,764¥ 31,707

18,882

10,766

7,751

141,704

797

1,034

978

5,981

Others

2,307

3,071

2,398

17,313

Corporate or elimination of intersegment transactions

(215)

(181)

(82)

(1,614)

Materials handling equipment
Textile machinery

Total

33,403

250,679¥

55,174¥46,454¥ 42,752$

414,063¥

61,023¥54,734¥ 33,058$

457,959

Capital expenditures:
Automobile

26,33770,673

5,426

197,651

Textile machinery

Materials handling equipment

523

320

1,042

3,925

Others

903

2,311

5,794

6,777

Corporate or elimination of intersegment transactions
Total

¥

(466)

(765)

(574)

88,320¥ 127,273¥ 44,746(3,497)$

662,815Main products of each segment are as follows:
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 plastic package substrates for IC chipsets, casting machines

Corporate assets as of March 31, 2002 and 2001, included incorporate assets or elimination amounting to ¥1,093,812 million(US$8,208,720 thousand) and ¥1,278,393 million, respectively,
consist mainly of cash and cash equivalents, short-term
investments and investments in securities held by the Company.
Effective beginning the year ended March 31, 2001, the new
accounting standards for retirement benefits have been
applied. Consequently, operating costs and expenses increasedby ¥721 million for the Automobile Segment, ¥197 million for
the Materials Handling Equipment Segment, ¥41 million for
the Textile Machinery Segment and ¥46 million for the Others
Segment, and operating income for each segment decreasedby the same amount.
Effective beginning the year ended March 31, 2001,
allowance for retirement and severance benefits for directors
and corporate auditors has been recorded. Consequently,
operating costs and expenses increased by ¥145 million for theAutomobile Segment, ¥37 million for the Materials Handling

74

TOYOTA INDUSTRIES CORPORATION ANNUAL REPORT 2002

Equipment Segment, ¥10 million for the Textile Machinery
Segment and ¥4 million for the Others Segment, andoperating income for each segment decreased by the sameamounts.
Effective beginning the year ended March 31, 2001, the new
accounting standards for financial instruments have been
applied. Consequently, assets increased by ¥40 million for the
Materials Handling Equipment Segment and ¥942,594 million
for corporate assets or elimination.
Effective beginning 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.
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 up to and including the year ended March 31, 1999, yearend rates had been used. 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, respectively, for theAutomobile Segment, and increased by ¥5,856 million, ¥338

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

(2) Geographical segments
As of and for the years ended March 31, 2002, 2001 and 2000:
Thousands of
U.S. dollars

Millions of yen

2002

2001

2000

2002

¥ 675,346¥586,087¥531,274$5,068,263

61,097

31,77025,309458,514

736,443

617,857

556,583

5,526,777

180,535

123,355

79,232

1,354,859

Sales:
Japan
Outside customer sales
Intersegment transactions
North America
Outside customer sales
Intersegment transactions

1,392

337

–

10,447

181,927

123,692

79,232

1,365,306

121,036

55,826–908,338

EuropeOutside customer sales
Intersegment transactions

5,426

749

–

40,720126,462

56,575–

949,058

3,246

2,115

15,26724,360

Others
Outside customer sales
Intersegment transactions

652

478

589

4,893

3,898

2,593

15,85629,253

1,048,730

800,717651,671

7,870,394(68,567)(33,334)(25,898)(514,574)¥ 980,163¥767,383¥625,773$7,355,820

Subtotal
Elimination of intersegment transactions
Total
Operating costs and expenses:¥ 695,442¥577,381¥533,987$5,219,077

North America

Japan

177,442

118,42274,5471,331,648

Europe125,345

53,724–

940,675

Others

4,011

2,841

15,35830,101Elimination of intersegment transactions
Total(68,407)(32,289)(26,986)(513,373)¥ 933,833¥720,079¥596,906$7,008,128¥

Operating income (loss):
41,001¥ 40,476¥ 22,596$ 307,700

North America

Japan

4,485

5,270

4,685

33,658Europe

1,117

2,851

–

8,383

Others

(113)

(248)

498

(848)

Elimination of intersegment transactions(160)(1,045)

1,088(1,201)

46,330¥ 47,304¥ 28,867$ 347,692

Total

¥

TOYOTA INDUSTRIES CORPORATION ANNUAL REPORT 2002

75

(Continued from page 75)
Thousands of
U.S. dollars

Millions of yen

2002

2001

2000

2002

Assets:Japan¥ 511,856¥ 460,474¥361,459$ 3,841,321

North America

156,188

126,52044,035

1,172,142Europe202,078

158,351–

1,516,532

Others

5,757

4,987

17,322

43,205

Corporate assets or elimination
Total

894,522

1,119,310

263,098

6,713,111¥1,770,401¥1,869,642¥685,914$13,286,311

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

Corporate assets as of March 31, 2002 and 2001, included incorporate assets or elimination amounting to ¥1,093,812 million(US$8,208,720 thousand) and ¥1,278,393 million, respectively,
consist mainly of cash and cash equivalents, short-term
investments and investments in securities held by the Company.
Effective beginning the year ended March 31, 2001, theEurope Segment was separated from the Others Segment
because business there increased in importance. Sales,
operating income and assets of the Europe Segment in theprior year were ¥14,822 million, ¥681 million and ¥13,472
million, respectively.
Effective beginning 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 and operating
income of the Japan Segment decreased by the same amount.
Effective beginning the year ended March 31, 2001,
allowance for retirement and severance benefits for directors
and corporate auditors have been recorded. Consequently,
operating costs and expenses of the Japan Segment increased

76

TOYOTA INDUSTRIES CORPORATION ANNUAL REPORT 2002by ¥196 million and operating income of the Japan Segment
decreased by the same amount.
Effective beginning the year ended March 31, 2001, the new
accounting standards for financial instruments have been
applied. Consequently, assets increased by ¥40 million for theJapan Segment and ¥942,594 million for corporate assets orelimination.
Effective beginning the year ended March 31, 2000, the new
accounting standards for income taxes have been applied.
Consequently, assets increased by ¥9,025 million for the Japan
Segment, ¥811 million for the 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 havebeen 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 and assets
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.

(3) Overseas sales
For the years ended March 31, 2002, 2001 and 2000:
Thousands of
U.S. dollars

Millions of yen

2002

2001

2000

2002

Overseas sales:
North America¥181,177¥140,161¥ 90,314$1,359,677

Europe160,456

102,666–

1,204,173

Others54,83755,967

101,678

411,535

Total¥396,470¥298,794¥191,992$2,975,385

Total sales¥980,163¥767,383¥625,773$7,355,820

North America

18.5%

18.2%

14.4%

Europe

16.4

13.4

–

Others

5.5

7.3

16.3

40.4%

38.9%

30.7%

Ratio of overseas sales to total sales (%):

Total
Significant countries or areas belonging to each area are as follows:
North America ………………………… U.S.A., Canada
Europe ………………………………… Germany, France, U.K.
Others ………………………………… China, Indonesia, Australia, Korea, Taiwan, Thailand

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

2000, revenue and expense accounts of overseas subsidiaries
have been translated into Japanese yen at annual average rates,
while until the year ended March 31, 1999 year-end rates had
been used. Consequently, overseas sales increased by ¥8,027
million for the North America area and ¥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 years ended March 31, 2002, 2001 and 2000 are as follows:
Thousands of
U.S. dollars

Millions of yen

Toyota Motor Corporation
Toyota Motor Corporation held 24.67% of the Company’s shares
as of March 31, 2002, 2001 and 2000, respectively. The above

2002

2001

2000

2002

¥410,995¥425,377¥393,780$3,084,390

transactions were carried out on commercial terms andconditions.

TOYOTA INDUSTRIES CORPORATION ANNUAL REPORT 2002

77

(2) Purchase of goods and services for the years ended March 31, 2002, 2001 and 2000 are as follows:
Purchase of goods:
Thousands of
U.S. dollars

Millions of yen

Toyota Motor Corporation

2002

2001

2000

2002

¥284,531¥195,514¥184,935$2,135,317

Purchase of services:
Thousands of
U.S. dollars

Millions of yen

2002
Toyota Motor Corporation

2001

2000

2002

¥2,333¥4,685¥4,848$17,509

Toyota Industries Health Insurance Society

72

69

62

540

Toyota Medical Corporation

42

33

32

315

¥2,447¥4,787¥4,942$18,364

Total
Toyota Industries Health Insurance Society’s chairman as ofMarch 31, 2002 and 2001 is Shiro Endo, who is a director of theCompany and holds 0.01% of the Company’s shares, andShigetaka Mitomo as of March 31, 2000, who was a corporate
auditor of the Company. Toyota Medical Corporation’s chairman

as of March 31, 2002, 2001 and 2000 is Yoshitoshi Toyoda, who isa director of the Company and holds 0.05%, 0.05% and 0.06% of
the Company’s shares, respectively. The transactions above
were carried out on commercial terms and conditions.

(3) Outstanding balances arising from sale/purchase of goods/services as of March 31, 2002 and 2001 are as follows:
Receivables from a related party:
Millions of yen

Toyota Motor Corporation

Thousands of
U.S. dollars

2002

2001

2002

¥20,873¥35,483$156,645

Payable to a related party:
Millions of yen

Toyota Motor Corporation

Thousands of
U.S. dollars

2002

2001

2002

¥30,527¥18,214$229,096(4) Loans to an affiliate for the year ended March 31, 2001 are as follows:
Millions of yen

Balance at the beginning of the year

¥ 8,600

Loans made during the year–

Repayments during the year

(8,600)

Balance at the end of the year
A loan was made to ST Liquid Crystal Display Corp., in which theCompany owns 50.0% of the shares, and given on commercial

78

TOYOTA INDUSTRIES CORPORATION ANNUAL REPORT 2002¥
terms and conditions without any collateral.

–20. Stock-based compensation
The introduction for the first time of an incentive plan involving
the granting of stock options was approved at the Ordinary
General Meeting of Shareholders in June 2001. Consequently,
options on a total of 500,000 shares, the maximum allowable,
were granted at a predetermined exercise price to all directors
and certain employees. The purpose of this plan is to further
sharpen the motivation of senior management in enhancing
shareholder value. The grant price is the higher of the closing
price on the Tokyo Stock Exchange on the date of grant and 1.05
times the average closing price in the full calendar month prior

to the month of the grant date. Recipients may not exercise theoption within the first two years. Subsequent to that initialperiod, the option must be exercised or waived within the next
two years.
To finance this plan, we purchased 499,200 shares ofcommon stock (¥1.3 billion) as treasury stock in fiscal 2002.
In June 2002, the Ordinary General Meeting of Shareholders
approved a warrant, which earmarks a maximum of 800,000
shares of common stock to be further distributed among
directors and employees.

TOYOTA INDUSTRIES CORPORATION ANNUAL REPORT 2002

79