A N N UA L R E P O R T
2003
Year ended March 31, 2003

Profile
What is now Toyota Industries Corporation was founded in 1926 as Toyoda Automatic
Loom Works, Ltd. by the renowned Japanese inventor Sakichi Toyoda to manufacture
automatic looms. The enterprise proceeded over the years to diversify into such fields as
automobiles, forklift trucks and electronics. In line with its strategy of globalization, Toyota
Industries now has production facilities in Europe, North America and other regions.
The business universe of Toyota Industries consists of four segments: Automobile, which
comprises the vehicle (automobile assembly), engine and car air-conditioning compressor
businesses; Materials Handling Equipment, which specializes in forklift trucks and othermaterials handling equipment; Textile Machinery, which covers the spinning and weaving
machinery businesses; and Others, which includes electronics, logistics solutions and otherbusinesses. Each of these segments already has or is building a secure footing in its
particular fields. The Car Air-Conditioning Compressor and Materials Handling Equipment
businesses currently make up the mainstays of Toyota Industries’ operations, while theElectronics Business is well positioned to develop into the core of its future operations. The
Company has also entered into the Logistics Solutions Business, which along with theElectronics Business we believe has good long-term growth potential.
Developing technological and market synergies among our various businesses to
produce added value, we aim to achieve a conglomerate premium so that the worth of
Toyota Industries as a whole adds up to more than the sum of its parts.

Cautionary Statement with Respect to Forward-Looking Statements
This annual report contains projections and other forward-looking statements that involve risks and uncertainties. Our use of thewords “expect,” “anticipate,” “estimate,” “forecast,” “plan” and similar expressions is intended to identify such forward-looking
statements. Projections and forward-looking statements are based on the current expectations and estimates of Toyota Industries
Corporation and its Group companies regarding their plans, outlook, strategies and results for the future. All such projections andforward-looking statements are based on management’s assumptions and beliefs derived from the information available to it at thetime of producing this report and are not guarantees of future performance. Toyota Industries and its Group companies undertake no
obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events orotherwise. Therefore, it is advised that you should not rely solely upon these projections and forward-looking statements in making
your investment decisions. You should also be aware that certain risks and uncertainties could cause the actual results of Toyota
Industries Corporation and its Group companies to differ materially from any projections or forward-looking statements discussed inthis report. These risks and uncertainties include, but are not limited to, the following:i) Domestic and overseas economic conditions, particularly levels of consumer spending, demand for our products and private
sector capital expenditureii) Adverse changes in laws and regulations, such as trade restrictions and tariffs, or stricter safety or emissions regulations, resulting
in higher costs and/or sales restrictionsiii) Currency exchange rate fluctuations, notably involving yen, U.S. dollars, Asian currencies and the euro—the currencies in which
Toyota Industries Corporation and its Group companies have holdings and use to conduct their international businessiv) Fluctuations in market prices of securities in which Toyota Industries Corporation and its Group companies have substantial
holdingsv) The ability of Toyota Industries Corporation and its Group companies to maintain their strength in many product development
and geographical areas, through such means as new product development and launches in highly competitive markets
characterized by continual new product introductions, rapid technological advances and fluctuations in demandvi) Effects of natural disasters, terrorist activities, war or political instability in the markets Toyota Industries Corporation and its
Group companies servevii) Factors such as greater price competition in Asia, North America and Europe resulting from industry overcapacity or other factors;
higher fuel prices or shortages of fuel; labor or other constraints on the ability of Toyota Industries Corporation and its Group
companies to restructure their business; work stoppages at their facilities or those of key suppliers; and the discovery of defects intheir products resulting in delays in new product launches, recall campaigns, increased warranty costs or litigation.

The covers of this annual report show two products from our Materials Handling Equipment Segment,
which is one of our primary segments and epitomizes our global presence. The front cover shows the
GENEO-E (7FBE outside Japan) manufactured by TOYOTA Material Handling Company, while the backcover features BT Industries AB’s BT REFLEX AC.
The GENEO-E (7FBE) is a three-wheel electric counterbalanced forklift truck marketed in 2003. It has
the power and operability of a four-wheel counterbalanced forklift truck yet possesses the mobility of areach truck. The color of the GENEO-E (7FBE) is green in Japan and orange outside Japan.
The BT REFLEX AC is designed for intensive stacking and horizontal transporting. Ergonomic designand excellent performance have been combined into a superbly productive line of trucks.
(Back)(Front)Contents
page 00-02

Financial Highlights

03-07

Letter to Shareholders

08-09

At a Glance

10-36

Toyota Industries in Focus

12-16

F O C U S

1Medium-Term Management Vision for Further Business Expansion

17-24

F O C U S

2

Globalization of the Materials Handling Equipment Segment

25-27

F O C U S

3

Car Air-Conditioning Compressor Business— Establishing a Global Presence with Advanced Technologies

28-29

F O C U S

4Electronics Business — A Key to Future Growth30-31

F O C U S

5

Research and Development

32-33

F O C U S

6

Corporate Governance

34-36

F O C U S

7Caring for the Environment

37-78

Financial Section

79-84

Toyota Industries in Figures

85-93

Toyota Industries Close-up

94-95

Major Developments in Toyota Industries’ History

00-96
00-97
98-99

Corporate Organization

0-100

Investor Information

Directors and Corporate Auditors
Corporate Data

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

1

Financial Highlights
Toyota Industries Corporation
Years ended March 31, 2003 and 2002

Thousands of
U.S. dollars

Millions of yen

2003

2002

% change

2003¥1,069,219¥ 980,163

Operating income

52,47846,33013.3

436,589

Ordinary income

51,37547,866

7.3

427,413

Income before income taxes

43,67047,866(8.8)

363,311Net income

21,93427,311(19.7)

182,479

Depreciation and amortization

59,15455,1747.2

492,130

Capital expenditures

87,55988,320(0.9)

728,444

Research and development expenses

29,70529,985(0.9)

247,130

Net income — basic

70.19

87.28

(19.6)

0.58

Net income — diluted

62.90

78.26

(19.6)

0.52

Cash dividends

22.00

19.00

15.8

0.18

¥1,650,391¥1,770,401(6.8)%$13,730,374

Shareholders’ equity

738,868

878,812(15.9)

6,146,988

Number of employees

25,03023,056

8.6

For The YearNet sales

9.1 %$ 8,895,333

Per share of common stock (yen, U.S. dollars):At Year-End
Total assets

Note: U.S. dollar amounts have been translated from yen, for convenience only, at the rate of ¥120.20 = US$1, the approximate exchange rate on March 31, 2003.

Net Sales

Net Income

Total Assets

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

1,200

30

2,000

1,000

1,000

800
1,500
20

800

600
1,000

600

400
400

10
500
200

200

0
FY

99 00 01 02 03

0
FY

99 00 01 02 03

0
FY

99 00 01 02 03

0
FY

99 00 01 02 03

Note: Hereafter, the fiscal year ended March 31, 2003 is referred to as fiscal 2003 and other fiscal years are referred to in a corresponding manner.

2

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

Dear Shareholders:
Gratifying Performance Despite
Adverse Environment

adverse business environment prevailing in the fiscal

For the fiscal year ended March 31, 2003 (“fiscal 2003”),with further signs of deflation, and the government

Toyota Industries posted consolidated net sales ofrestricted in its policy options due to its huge fiscal¥1,069.2 billion (US$8,895.3 million), up 9.1% over fiscal

deficit. A poor stock market performance, stagnant

2002, which marked a record high for a fourth

consumer spending and weak capital investment all

consecutive year. Consolidated operating income

culminated in economic stagnation. The growth rate ofincreased 13.3% to ¥52.5 billion (US$436.6 million).

the U.S. economy slackened, and the European

Consolidated ordinary income totaled ¥51.4 billion

economy continued to decelerate. Though ended(US$427.4 million), up 7.3%. Both these figures werequickly, the war with Iraq led by the United States andrecord highs. Consolidated net income, however,the United Kingdom cast a dark shadow over the world

decreased 19.7% to ¥21.9 billion (US$182.5 million). Thiseconomy. Toward the end of the fiscal year, the SARS

was because we posted extraordinary losses in fiscal(Severe Acute Respiratory Syndrome) epidemic had

2003 that arose from a loss on disposal of property,

serious effects on the Asian economy, notably on China

plant and equipment as a result of the relocation of aand Hong Kong.

foundry plant, as well as a downward re-evaluation of
investment securities.

Our results were all the more remarkable given theyear. The growth of the Japanese economy was anemic,

Note: U.S. dollar amounts have been translated from yen, for convenience
only, at the rate of ¥120.20=US$1, the approximate exchange rateon the Tokyo Foreign Exchange Market on March 31, 2003.

Akira Yokoi

Tadashi Ishikawa

ChairmanPresident

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

3

Letter to Shareholders

All Segments in Good Shape

Achievements in Fiscal 2003

Toyota Industries’ business segments all increased their net

Capital and Business Collaboration

sales over fiscal 2002. Operating incomes also increased

In May 2002, following the conclusion of a comprehensive

except for the Others Segment.

agreement on capital and business collaboration between

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

Toyota Industries and Aichi Corporation (“Aichi”), Toyota
Industries acquired 34% of Aichi’s outstanding shares. We also
obtained a warrant that would raise our holding to 51%. In

Automobile Segment

May 2003, we exercised the warrant, incorporating Aichi into

Net sales totaled ¥595.5 billion (US$4,953.9 million), up 5.7%

our network of subsidiaries. Aichi is a leading manufacturer ofover fiscal 2002 and accounting for 55.7% of total net sales.

special-purpose vehicles, with its truck mount aerial work

The increase was due mainly to a rise in sales of car air-platforms and self-propelled aerial work platforms boasting a

conditioning compressors. Operating income was ¥30.1

market share of approximately 70% in Japan. In April 2003,

billion (US$250.5 million), up 4.0% over the prior fiscal year.

Aichi unveiled a medium-term plan that aims to achieve
consolidated net sales of ¥40.5 billion and consolidatedMaterials Handling Equipment Segment

ordinary income of ¥3.0 billion for the fiscal year ending

Net sales totaled ¥373.0 billion (US$3,103.2 million), an

March 2006. In order to turn its business performance around,increase of 5.7% over fiscal 2002. This increase was due

Aichi is reforming the revenue structure of its special-purpose

mainly to the consolidation of the financial results of TOYOTA

vehicle business, improving the profitability of its after-sales

Material Handling Company’s (“TMHC’s”) overseas sales

service business for truck mount aerial work platforms andsubsidiaries, which we acquired during fiscal 2002, for the fullself-propelled aerial work platforms. Aichi also aims to expand

year. Operating income was ¥16.2 billion (US$134.6 million),

into the North American market and further enhance its

up 21.0% over the prior fiscal year.

presence in the Chinese market. Toyota Industries intends toprovide Aichi with support in the areas of production

Textile Machinery Segment

technology, production control know-how and personnel.

Net sales totaled ¥48.7 billion (US$405.5 million), an increasein sales of air-jet looms, one of this segment’s primary

Making Inroads into the Logistics Solutions
Business

products, to China. Operating income was ¥2.3 billion

Recognizing its growth potential, Toyota Industries entered(US$19.2 million), a big turnaround from an operating loss of

into the Logistics Solutions Business in fiscal 2003,¥0.4 billion (US$3.2 million) in the previous fiscal year.

responding to increasing market needs for streamlinedof 58.7% over fiscal 2002, due mainly to a substantial increaselogistics operations in Japan. This is an area in which we canOthers Segment

take advantage of our longstanding experience in production

Net sales totaled ¥52.0 billion (US$432.7 million), up 58.5%

and sales of materials handling equipment such as forklift

over fiscal 2002, due largely to the consolidation of the Taikoh

trucks and automated storage and retrieval systems, as well

Transportation Group. Operating income was ¥3.9 billion

as our production know-how as demonstrated in the Toyota(US$32.5 million), a decrease of 12.7% from the prior fiscal

Production System.

year, due primarily to an increase in depreciation that

As part of that move, in March 2002 Toyota Industries

accompanied TIBC Corporation’s capital investment.

established Advanced Logistics Solutions Co., Ltd. (called“ALSO”), a 100% subsidiary that plans overall logistics
operations (including distribution) and operates distribution
centers. ALSO aims to play an important role in our Logistics
Solutions Business.

4

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

We also began other collaboration in this field throughadvanced use of IT for the Company and its subsidiaries.

investment (indirect investment through ALSO with 60%

It serves as our database center, managing a vast range ofequity) in Teion Shokuhin Ryutsu Inc. and capital participation

information from Group companies. The lab is engaged in a

(5% equity) in Yukijirushi Access, Inc.

vast array of activities, including developing information

In addition, in February 2003, we concluded an agreement

systems and building a network infrastructure amongon business collaboration with Trancom Co., Ltd. (“Trancom”),

domestic and overseas bases. It is also responsible forwhich possesses advanced information systems and proveninstalling three-dimensional computer-aided design (CAD)

distribution center management capability. As part of theand computer-aided engineering (CAE) systems, andcollaboration, in April 2003, Toyota Industries and Trancom

researching digital simulation technologies with a view toestablished a joint company to undertake the logistics

reducing lead-times from development to manufacture to

solutions business.

shipment.
The effects of these actions should be felt in a shortened

Improving Product Quality

product development period, increased product

At Toyota Industries, we constantly put our best efforts into

competitiveness and improved productivity of technology

improving the quality of our products and services so thatdepartments. The introduction of enterprise resource

they will ensure customer satisfaction. For example, each ofplanning (ERP) systems in the accounting and purchasing

our divisions sets ambitious, yearly quality goals. In addition,

departments has contributed to more efficient accounting,

not only the director in charge of product quality and divisionorder-placing and payment transactions.

managers (or an in-house company president) but also
check the quality improvement activities and confirm

Completion of New Car Air-Conditioning
Compressor Plant

progress in attaining quality goals.

In July 2002, the Higashiura Plant started operations to

President Ishikawa himself makes an on-site inspection to

manufacture parts for car air-conditioning compressors. The

Cost-Reduction Activities

market demand for our compressors is expected to rise, andStarting April 2001, Toyota Industries embarked on an

in order to cope with this increase, we are reinforcing theambitious three-year cost-reduction program to be

production capacity of our facilities in Japan, North America

implemented throughout the Company. We achieved most ofand Europe. In Japan, now that we have completed ourthe objectives in the second year, i.e., fiscal 2003. We

Higashiura Plant, we have a three-plant structure—in Kariya,

established a special project team in each business division to

Obu and Higashiura. Under the concept of using natural

ensure that our cost-reduction activities were systematic andenergy and attaining harmony with the surrounding

thorough. In addition to enhancing our ongoing value

environment, we constructed the Higashiura Plant toengineering (VE) and value analysis (VA) activities, weconsume 20% less electricity than conventional plants ofreduced general expenses and head office fixed costs, andcomparable size and production capacity. We installed cleansought to optimize our procurement of materials andenergy systems such as wind and solar power generators ascomponents globally.

well as a cogeneration system. We also installed a water
recycling system and a rainwater utilization system to

Exploiting Information Technology (IT)conserve water resources.

Recognizing that the utilization of the latest advances in IT
and enhancing market competitiveness, we are further

Commencement of Local Production and
Reinforcement of Sales Network in China

accelerating the introduction of IT.

In anticipation of expanding demand in China, TMHC

has a significant impact on strengthening corporate structure

In May 2002, we opened “e-Lab,” our base station for

constructed a new forklift truck assembly plant within the

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

5

Letter to Shareholders

TMIP will engage in the production of 2000cc-class diesel
engines. TMIP is slated to start operations in 2005, with an
initial annual production capacity of 150,000 units. The total
investment in this enterprise is expected to be 200 million
euros.

Medium-Term Management Vision
for Continuous Growth
Through growth in areas such as materials handlingequipment, car air-conditioning compressors, diesel engines,
electronics and logistics solutions, Toyota Industries is aiming
for an ambitious medium-term target of consolidated net
sales of more than ¥1.2 trillion (US$9,983.4 million) andconsolidated ordinary income of ¥80 billion (US$665.6
million) by fiscal 2006, ending March 31, 2006. The Company
plans to strive for continued expansion by implementing
management strategies from the medium- to long-term
standpoints.
Basically, we intend to allocate significant management
resources to the Materials Handling Equipment Segment andTadashi Ishikawa

Car Air-Conditioning Compressor Business in order to further

President

reinforce their already strong competitive advantage. We
intend to establish a diesel engine development/production
premises of Toyota Industry (Kunshan) Co., Ltd., which is

structure to contribute to TMC’s global strategy, and assume aengaged in the production of foundry parts in Kunshan,

full-fledged commitment in the Logistics Solutions Business, a

Jiangsu Province, China. TMHC began local production of 1-3

potential growth area in Japan, in which we have know-how

ton internal combustion counterbalanced forklift trucks, top-

and technological advantages. We also plan to promote newsellers in the country, in April 2003.

technologies and business areas that will form the core of our

In May 2003, we established Toyota Material Handling

we intend to take actions to secure our global presence,a distributor of forklift trucks in China. Sales in that country

maintain a high standard of quality control, engage in cost-were previously conducted through three dealers at seven

reduction activities, change business procedures through thesales bases. The new company, which started operations inutilization of IT, and focus on the development of personnel

June 2003, will take an initiative in forging a strong sales

with specialized knowledge of the Toyota Production System,

network through the enhancement of its dealer network.

which is a source of our competitive edge.

Local Production of Diesel Engines in Poland

Business Outlook for Fiscal 2004

In October 2002, we established Toyota Motor Industries

6

future operations, including the Electronics Business. Further,(Shanghai) Co., Ltd. jointly with Toyota Tsusho Corporation as

Poland Sp.zo.o. (“TMIP”) jointly with Toyota Motor

The future course of the world economy is even more

Corporation (“TMC”) to manufacture diesel engines in Jelcz-

unpredictable than ever. We expect that in fiscal 2004, ending

Laskowice, Poland. The Company’s equity share is 40%. To

March 31, 2004, Toyota Industries will face increasingly

accommodate an expected expansion of demand in Europe,

challenging economic and management conditions.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

In these circumstances, we intend to ensure that ourthese changes is difficult to predict, but the management

products and services are attuned to market needs. We also

team of Toyota Industries is fully dedicated to the growth andplan to continue with our cost-reduction activities. We expect

prosperity of your company.

that our strategy will include a wider use of IT in improving

We are not complacent, but we are confident that we havemanagement efficiency and a strengthening of our

excellent personnel who can think and act independently inmanagement base to make it even more responsive toaccordance with our corporate philosophy and management

market changes.

strategies. This factor does not appear in the balance sheets,

Our long-standing policy of diversification is beginning to

but our employees are one of the most important andpay off, in that even if some of our businesses experience

precious assets of Toyota Industries. They share the same set

difficulties in an unstable market environment, otherof values as the top management, raising value in terms ofbusinesses will perform well enough to allow Toyota

development, manufacturing and sales. We believe first-classIndustries to continue on the path to stable and sustained

staff are a source of producing outstanding shareholder value

growth.

in an ever-changing, uncertain management environment.

Although uncertainties prevail in the global economic and

We intend to continue to make strenuous efforts in the fieldpolitical landscapes, for fiscal 2004 we forecast consolidatedof personnel development for Toyota Industries’ future

net sales of ¥1,100.0 billion (US$9,151.4 million), up 2.9% overgrowth and prosperity.

fiscal 2003, consolidated ordinary income of ¥57.0 billion

In this annual report, we have described the direction in(US$474.2 million), up 10.9%, and consolidated net income ofwhich the management team is trying to lead Toyota¥34.0 billion (US$282.9 million), up 55.0%.

Industries. We sincerely hope this report will help all our

Note: The financial projections set forth above are based upon a number ofassumptions and estimates that, while presented with numerical
specificity and considered reasonable by us when taken as a whole, areinherently subject to significant economic, business, competitive,
regulatory and operational uncertainties, contingencies and risks, manyof which are beyond our control. Financial projections are necessarily
speculative in nature, and it can be expected that one or more of theassumptions underlying the projections will prove not to be valid, andunanticipated events and circumstances are likely to occur. Actual
results will vary from the financial projections and those variations may
be material. Consequently, this report should not be regarded as arepresentation by us or any other person that the financial projections
will be achieved. Current negative market trends in the global economy
make it particularly difficult at present to predict product demand andother related matters.

investors, shareholders and other stakeholders to understandwhere we are heading. As we look to secure further growth inshareholder value, we respectfully request a continuation of
the support we have enjoyed to date.
July 2003

Increasing Shareholder Value
Akira Yokoi
The most important aspect of our corporate mission is to

Chairmanincrease shareholder value. We consistently aim to improve
profitability and achieve stable corporate growth throughimplementation of ambitious strategies with specific goals ineach business area, and by streamlining management. At thesame time, as a responsible corporate citizen, we emphasize

Tadashi Ishikawa

activities to protect the natural environment and fulfill our

President

other social responsibilities.
In fiscal 2003, we implemented important measures forcontinuous growth, and we attempt to take a range of steps
to secure our competitive edge in an environment ofcontinual market and management changes. The nature of

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

7

At a Glance
Toyota Industries has been and will be aggressively switchingits focus from the Textile Machinery Segment, the businessupon which the Company was founded, to more diverse
sectors. These include the Automobile Segment, comprising
the vehicle (automobile assembly), engine and car airconditioning compressor businesses, and the Materials
Handling Equipment Segment, which specializes in forklift
trucks and other materials handling equipment. The Others
Segment includes the Electronics and Logistics Solutions

businesses, which we expect will be the main driving forces of
future growth.
Essentially, Toyota Industries is a conglomerate focused ona variety of core businesses. We aim to enhance the value of
the Company as a whole by exploiting synergies among the
key technologies, production know-how and markets
cultivated by each business division.
Note: Segment net sales figures do not include intersegment transactions.
However, segment operating income figures do include operating
income arising from intersegment transactions.

Automobile Segment
Business/Operation

7SEU16 Compressor
Vitz (Yaris)

Products

VehiclePassenger vehicles

EngineDiesel engines, Gasoline engines, etc.

Car Air-Conditioning
Compressor

Car air-conditioning compressors, etc.

OthersElectronic equipment for automobiles,

1CD Diesel Engine

Foundry parts for automobiles, etc.

Materials Handling Equipment Segment
Business/Operation
Industrial Vehicle

Products
Counterbalanced forklift trucks,
Warehouse trucks , etc.

Materials Handling System
GENEO-B (7FB15)

BT REFLEX AC

Rack Sorter P

Electric Counterbalanced
Forklift Truck

Reach Truck

Automated Storage andRetrieval System (Pallet Type)

Automated storage and retrieval
systems,
Automatic guided vehicle systems, etc.

Textile Machinery Segment
Business/Operation

Products

Spinning Machinery

Ring spinning frames, Roving frames,
Drawing frames, etc.

Weaving Machinery

Air-jet looms, Water-jet looms,
Sizing machines, etc.

RX240NEW
Ring Spinning Frame

JAT710 Air-Jet Loom

Others Segment
Business/Operation
ST Liquid Crystal Display
Corp.
TIBC Corporation

Products
Low-temperature polysilicon TFT-LCDs
Ball grid array (BGA) plastic package
substrates
Flexible printed circuit (FPC) substrates

Low-Temperature
Polysilicon TFT-LCDs

8

TOYOTA INDUSTRIES CORPORATION

Plastic Package Substrates

ANNUAL REPORT 2003

OthersPress dies, Production equipment, etc.

Percentage of
Net Sales

4.6%

4.8%

34.9%

Automobile
Materials Handling Equipment
Textile Machinery
Others
55.7%
4.4%

30.8%

7.5%

57.3%

Percentage ofOperating Income(Elimination of intersegment is not considered.)

The Automobile Segment, comprising vehicles (automobile
assembly), engines, car air-conditioning compressors and otherbusinesses (including foundry parts for engines and electronic
components for automobiles), currently accounts for 55.7% ofconsolidated net sales. Our Vehicle Business produces three models:the Vitz (Yaris outside Japan), RAV4 (for Europe and North America)and Corolla Sedan (for North America). Our Engine Businessproduces the 1CD and 1HZ diesel engines, the 1FZ, 2UZ and 2AZgasoline engines and others. Our Car Air-Conditioning Compressor

Business develops and produces various types of compressors,
including swash plate compressors with fixed displacement, swash
plate compressors with continuous variable displacement, and scrolltype compressors. We supply these products to the world’s leading
auto manufacturers through DENSO Corporation.
Net sales of the Automobile Segment for fiscal 2003 totaled¥595.5 billion (US$4,953.9 million). Operating income was ¥30.1
billion (US$250.5 million).

The Materials Handling Equipment Segment produces and markets
the GENEO (7FG/D outside Japan) internal combustion
counterbalanced forklift truck, the GENEO-B (7FB outside Japan)
electric counterbalanced forklift truck, automated storage andretrieval systems, automatic guided vehicle systems and others. In
June 2000, we acquired BT Industries AB (“BT Industries”), a leading
warehouse truck company based in Sweden, expanding our productlineup. In April 2001, we absorbed Toyota Motor Corporation’s
Industrial Equipment Sales Division with a view to accelerating our
responses to market needs.
Net sales of the Materials Handling Equipment Segment for fiscal
2003 totaled ¥373.0 billion (US$3,103.2 million). Operating income
was ¥16.2 billion (US$134.6 million).

The Textile Machinery Segment is engaged in the manufacture andsales of spinning and weaving machinery. The Spinning Machinery
Business produces ring spinning frames, roving frames, drawing
frames and combing machines. The Weaving Machinery Business
manufactures air-jet looms, water-jet looms and preparatory

machinery for weaving, such as sizing machines.
Net sales of the Textile Machinery Segment totaled ¥48.7 billion(US$405.5 million), with a notable increase in exports of air-jet looms
to China. Operating income was ¥2.3 billion (US$19.2 million).

The Others Segment mainly comprises businesses that we enteredcomparatively recently. Although our operations in these fields arestill relatively limited, this segment contains some of our strategic
businesses with good growth potential. They include ST Liquid
Crystal Display Corp. (“ST-LCD”)*, a 50-50 joint venture with Sony
Corporation, and TIBC Corporation(“TIBC”), a joint venture with
Ibiden Co., Ltd. ST-LCD produces low-temperature polysilicon TFTLCDs. TIBC is engaged in the production of ball grid array (BGA)
plastic package substrates and flexible printed circuit (FPC)

substrates. This segment also includes the manufacture and sales ofpress dies and production equipment, and the Logistics Solutions
Business.
Net sales of the Others Segment for fiscal 2003 totaled ¥52.0
billion (US$ 432.7 million). Operating income was ¥3.9 billion (US$32.5 million).
* As ST-LCD is not a consolidated subsidiary but an affiliate, its sales andoperating income (loss) are not included in the consolidated figures, but are
accounted for by the equity method.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

9

Toyota Industries in

F O C U SF O C U SF O C U S

10

1

2

3

Medium-Term Management Vision
for Further Business Expansion

12

Globalization of the Materials Handling
Equipment Segment

17

Car Air-Conditioning Compressor Business— Establishing a Global Presencewith Advanced Technologies
25

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

FocusF O C U S

4Electronics Business— A Key to Future Growth28

F O C U S

5

Research and Development

30

F O C U S

6

Corporate Governance32

F O C U S

7Caring for the Environment

34

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

11

F O C U S

1Medium-Term Management Vision
for Further Business Expansion
In May 2001, we unveiled our medium-term strategy forcontinuous growth, targeting consolidated sales of ¥1.2 trillion
and consolidated ordinary income of ¥80 billion for fiscal 2006
(ending March 31, 2006). Through consistent implementation

dynamic business management in reflecting customer needsof the strategy, we believe we can expand our corporate value.

and responding to market changes on a global scale.
Benefits of synergy resulting from our acquisition ofStrengthening Competitive Advantages
and Securing Global Leadership in the
Materials Handling Equipment andCar Air-Conditioning Compressor Fields

BT Industries are already apparent, and expected to become

Toyota Industries is determined to retain its leading position in

Europe and the U.S. These exchanges will be broadened toJapan and remain the global leader among manufacturers ofinclude other products. We intend to introduce ourmaterials handling equipment. Steps already taken to achieve

manufacturing technique, the Toyota Production Systemthat goal include the acquisition of BT Industries AB(“TPS”), to BT Industries. In return, we are drawing on BT(“BT Industries”) and the transfer of Toyota Motor Corporation’s

Industries’ wealth of sales know-how, in particular its solution-(“TMC’s”) Industrial Equipment Sales Division to the Company.

proposal sales technique. We have begun to introduce BT

These measures will enable swifter decision-making and more

Industries’ fleet management program to reinforce our sales

even more so. We have started to supply counterbalanced
forklift trucks to BT Industries on an OEM basis. We are also
distributing BT Industries’ warehouse trucks in Japan as well as

Medium-Term Sales and Income Targets (Consolidated Base)
Ordinary Income(¥ Billion)
100
80
51.4

47.9

57
60

44.5

20

Net Sales(¥ Billion)
1,200

1,200
1,069.2

1,100

980.2

1,000

767.4

800

600

Materials Handling Equipment

400

Car Air-Conditioning Compressor
Electronics and Logistics Solutions

200

Vehicle & Engine
0
FY

12

Textile Machinery and Others

99

00

TOYOTA INDUSTRIES CORPORATION

01

02

ANNUAL REPORT 2003

03

04
Forecast

06
Targetactivities in Japan. We will also promote personnel andincreased demand for applications in digital cameras, mobile

technology exchanges, as well as joint component purchasephones and personal digital assistants (PDAs). To expand

and product development.

business in line with the medium-term business plan, ST-LCD

The Materials Handling Equipment Segment is striving todoubled its production capacity through a capital investment

adopt a global perspective in developing products that meet

program in the fall of 2001, and started operations at the newcustomer/market needs and carrying out strategic marketing

facilities in fiscal 2002.

through enhanced sales and service activities in order tomaximize customer satisfaction and business performance.

Although TIBC experienced difficulties due to the worldwide
IT slump, we expect the company to see an improvement in

To consolidate our leading international position in the carbusiness performance through cost-reduction activities andair-conditioning compressor manufacturing field, we attempt

the manufacture of high-performance package substrates.

to continue to develop new products tailored to ensure

As we believe the growth potential of the Electronics

customer satisfaction. Car air-conditioning compressor

Business in the medium to long term is promising, we see it asproduction bases in Japan, the U.S. and Europe allow us to stay

one of our core businesses. We intend to allocate management

close to customers, meet their needs more precisely and reduceresources accordingly in anticipation of a successful future for

distribution costs and exchange rate risks. The proportion of

our LCD and other electronics-related businesses.

cars in Europe fitted with air-conditioning systems is expected

In fiscal 2003, Toyota Industries entered into the logistics

to continue rising and we aim to make the most of thissolutions business in Japan. We aim to respond to customer

opportunity. We shall also seek to increase sales in the Northneeds for total logistics cost-reduction and improved logistics

American market.

operations by utilizing our longstanding experiences in

In summary, the Materials Handling Equipment Segment

production and sales of materials handling equipment such as

and the Car Air-Conditioning Compressor Business are core

forklift trucks and automated storage and retrieval systems, as

operations, and serve as the strategic driving force in thewell as our production know-how as demonsrated in theachievement of our medium-term corporate objectives. As we

Toyota Production System. Toyota Industries expects its

cannot expect a great increase in demand in the maturing

Logistics Solutions Business to grow into one of the pillars of its

Japanese market, it is vital that we expand our global presencebusiness.

to ensure further business expansion, and we shall commit
resources to these fields on an appropriate scale.

As part of our move into the Logistics Solutions Business, inMarch 2002 Toyota Industries established Advanced Logistics
Solutions Co., Ltd. (called “ALSO”), a 100% subsidiary that plans

Fostering New Core Businesses, includingElectronics and Logistics Solutions

overall logistics operations (including distribution) andWe regard our electronics operations, which are now

needs for streamlined logistics operations, ALSO aims tocomparatively small, as a business area with good growthprovide customer-oriented proposals for optimized logistics

potential over the long term. We believe the opportunities insolutions and cost-reduction, so playing an important role inthis field are substantial. The core of our Electronics Business is

our Logistics Solutions Business.

operates distribution centers. Responding to increasing market

made up of the following: ST Liquid Crystal Display Corp.

We began more collaborations in this field through(“ST-LCD”), a joint venture with Sony Corporation; TIBC

investment (indirect investment through ALSO with 60%

Corporation (“TIBC”), a joint venture with Ibiden Co., Ltd.; andequity) in Teion Shokuhin Ryutsu Inc., which undertakes

the Corporate Technical Center (an in-house organization).

storage and distribution of chilled foods, as well as capital

ST-LCD manufactures low-temperature poly-Si TFT-LCDs,
while TIBC produces ball grid array (BGA) plastic package

participation (5% equity) in Yukijirushi Access, Inc., one of thelargest wholesalers of chilled and frozen foods in Japan.

substrates and flexible printed circuit (FPC) substrates. As a

In addition, in February 2003, we concluded an agreement

result of using TPS, ST-LCD’s quality levels and production

on business collaboration with Trancom Co., Ltd. (“Trancom”),

volume have improved substantially. The functionality ofa logistics consulting and management business. Trancom’s

ST-LCD’s products, including high numerical aperture, highadvanced information systems and proven distribution center

resolution and energy efficiency, is expected to generatemanagement capability complement Toyota Industries’

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

13

F O C U S

1comprehensive capacity for proposing logistics solutions andcompetitiveness, establish a flexible production system andexpertise in optimizing on-site logistics operations. In April

strengthen the business foundation.

2003, Toyota Industries and Trancom jointly established
ALTRAN Corporation (60% equity), which is responsible forExtensive Cost-Reduction Campaign

acquiring new customers as well as the planning andTo survive ruthless price competition worldwide, it is essential

management of logistics operations. As part of theto regularly market attractive products, implement sustained

collaboration, Toyota Industries purchased 1.05 million of

cost-reduction programs and reform our revenue structure. In

Trancom’s shares (10% equity) in February 2003.

April 2001, we began an ambitious three-year cost-reduction

In time, we hope the Logistics Solutions Business will growprogram to substantially reduce operating and other costs. A

into one of our core businesses in the medium to long term,

project team in each business division promotes VE (Valueand we are investing management resources accordingly.

Engineering), VA (Value Analysis) and other cost-reduction

Toyota Industries will strive to aggressively explore andactivities in order to achieve an even higher level of overall

develop promising new technologies and businesses such as

efficiency. Measures to be taken include reducing expenses

the Electronics and Logistics Solutions businesses, and expand

through optimized global procurement of materials andthese operations on a long-term, stable basis.

components, and cutting back fixed costs at the head office.

Further Cost-Reduction and Enhanced
Manufacturing Quality in the Vehicle andEngine Businesses

Promoting a Global Presence

The Vehicle (automobile assembly) and Engine businesses

established production bases for forklift trucks and car air-

have provided stable revenues for the Automobile Segment. In

conditioning compressors in North America and Europe. For

the medium term, we aim to improve cost management andyears, we have been engaged in local production of foundryso maintain profitability in these fields.

parts in China and textile machinery and others in India. In

Our Vehicle Business, one of the manufacturing bases for

It is impossible to rely solely on the Japanese market inseeking further business expansion. Toyota Industries has

June 2000, we acquired BT Industries, a Swedish warehouse

the Toyota Group’s small cars, strives constantly to enhance thetruck manufacturer, as part of our globalization scheme. Also, in

attractiveness of TOYOTA cars by further improving product

October 2002 we established a new company in Poland jointly

quality and cost efficiency, making proposals for the design

with TMC to manufacture diesel engines.

and launch of new compact cars, and improving production

Based on our belief that globalization is essential for
expansion in terms of business scale and corporate value, we

technology.
In the Engine Business, we work constantly to enhance thewill strive to procure high-quality and price-competitive parts

environment-friendly features of our engines withoutfrom worldwide sources, and engage in the production ofcompromising their performance, and to contribute to thesuperior products close to our customers worldwide.

improvement in the overall performance of TOYOTA cars. In
Sp.zo.o. (“TMIP”) jointly with TMC to manufacture diesel

Harnessing the Power of Information
Technology (IT)engines in Jelcz-Laskowice, Poland. Though our share of

We recognize the importance of IT as a key factor in corporate

investment is only 40%, we are entrusted with production andcompetitiveness, and we are attempting to accelerate its

overall operations. TMIP is slated to start production of 2000cc-

application accordingly.

October 2002, we established Toyota Motor Industries Poland

class diesel engines in 2005. We will work together with TMC to

In May 2002, Toyota Industries opened “e-Lab,” andevelop high-quality, environmentally sound diesel engines

information technology research laboratory, as a key

for passenger cars, and strengthen our design andorganization for the information system division as well as ourdevelopment capabilities for diesel engines.

R&D facility for information technology. E-Lab is responsible for

Our Vehicle and Engine businesses are our sources of stablerevenues. We will strive to continue to improve cost

14

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

researching digital simulation technologies with a view to
reducing lead-times from development to manufacture toshipment. It is also involved in developing an optimal
network system for joint development of parts with suppliers,

Headquarters’ Structural Reformand for parts procurement. To date, improvement is mostevident in shorter product lead-times as a result ofCorporate Center

introducing three-dimensional CAD systems, and enhanced
productivity among non-manufacturing divisions thanks toenterprise resource planning (ERP) systems.

Existing Headquarters

Functions that support corporate management

Business Support Center

Our domestic network infrastructure is almost in place,and we are now working on establishing a global network
infrastructure that includes our overseas subsidiaries.

Personnel Development
Toyota Industries creates and makes a wide range of products.
We maintain our competitiveness by manufacturing highquality products through efficient production. TPS serves as
one of the essential sources of our know-how in maintaining
efficient production and competitiveness. By improving TPS
and familiarizing more employees with the system, we canfurther enhance efficiency and competitiveness. To this end, we
have established a specialized section within the Operations
Management Consulting Department in the BusinessSupport Center to foster the development of qualified
personnel.

Maximizing Benefits of Synergy among
DivisionsThroughout our long history, we have continually pushedforward with technological innovation, explored new markets
and achieved substantial growth for each of our businesses.
Toyota Industries has become a conglomerate, each of whose
divisions possesses core technologies and markets. Bytranscending divisional boundaries, we are taking advantage ofthese assets to develop technologies that should be the basisof the next generation of business sectors and products, and tocreate added value. We believe the strategic cooperation
among divisions will enhance the value of the Company as awhole and offer great opportunities for expanded business

Functions that support businesses
Dividing the existing headquarters into two functionally distinct
organizations: “Corporate Center” and “Business Support Center”

In January 2002, Toyota Industries reorganized thefunctions of the headquarters as part of its
medium-term management plan.
As we build up our global business presence andadvance into new business fields, it is vital that wereinforce the functions of the headquarters, whichis responsible for plotting the course of theCompany and acting as a catalyst for corporate
growth. In January 2002, we embarked on areorganization of the headquarters with the aim ofmaking full use of the strengths generated by ourdiverse business universe and promoting a higher
level of growth and prosperity.
Based on its key functions, we divided theheadquarters into the Corporate Center, which is
responsible for the strategy and administration of
the Company as a whole, and the Business Support
Center, which provides support and services todivisions and departments. As a result of this move,
we believe the role of the headquarters became
clearer, enabling improved business efficiency andfaster decision-making. Specifically, the Corporate
Center sets company-wide management strategies,
allocates management resources, creates new
growth businesses by moving into areas where wecan apply our advantages, and develops
management personnel. The Business Support
Center provides each business division andCorporate Center department with highly
specialized expertise.

operations.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

15

F O C U S

1Basic Philosophy
The following is a statement of Toyota Industries’ basic

Respect for the Natural Environment

philosophy. This basic philosophy constitutes the

Toyota Industries believes that economic growth andconservation of the natural environment are compatible.
It strives to offer products and services that are clean, safeand of high quality.

expressly stated beliefs of the management and serves asa guide for corporate behavior.

Respect for the Law

Respect for Customers

Toyota Industries is determined to comply with the letterand spirit of the law, in Japan and overseas, and to be fair
and transparent in all its dealings.

Toyota Industries conducts intensive product research
and forward-looking development activities to create
new value for its customers.

Respect for Others

Respect for Employees

Toyota Industries is respectful of the people, culture andtraditions of each region and country in which it operates.
It also works to promote economic growth and prosperityin those regions and countries.

Toyota Industries nurtures the inventiveness and otherabilities of its employees. It seeks to create a climate ofcooperation, so that both employees and the Company
can realize their full potential.

Five Values
We also have Five Values that form an action guide for our
employees to enforce our basic philosophy.

Global Perspective
Learning from the best in the world, we aim tobecome the best in the world.

PROFESSIONAL
E XC E L L E N C E

Customer FirstC U S TO M E R
O R I E N TAT I O N

We forge partnerships with our customers andstrive to exceed their expectations.

Welcoming New Challenges
Unbound by convention, we embrace thechallenge of creation.

CHALLENGE
TO C H A N G E

G LO B A L I Z AT I O N

Encouraging Professional Excellence
We develop our strengths, and think and act
responsibly.

Encouraging Effective Teamwork
We recognize the human worth of each individualand collaborate to achieve goals.

16

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

TEAMWORKF O C U S

2Globalization of the Materials
Handling Equipment Segment
Toyota Industries’ Materials Handling Equipment Segment, aworld leader in the production and sale of forklift trucks,
comprises TOYOTA Material Handling Company (“TMHC”) and
BT Industries AB (“BT Industries”). TMHC is a global leader incounterbalanced forklift trucks, whereas BT Industries is aleading supplier in the world for warehouse equipment. The
two companies operate as parallel groups, collaborating
globally as equal strategic partners and marketing eachother’s products on an OEM basis.
is intensifying, marked by cross-border consolidation and

Brand Portfolio of the Materials Handling
Equipment Segment

alliances. By assuming the industrial equipment sales and

The Materials Handling Equipment Segment continues tomarketing operations of Toyota Motor Corporation (“TMC”)

provide products under the TOYOTA and BT brands. TMHC

and acquiring BT Industries, we have strengthened ouruses the brand name TOYOTA L&F in Japan and Toyota

position as a global leader distinguished by our

Industrial Equipment in other regions. BT Industries uses

comprehensive lineup, superior technologies andprimarily the brand names BT in Europe and other regions andresponsiveness to customer needs.

Raymond in North America. While maintaining their own

Competition in the materials handling equipment market

brand names, TMHC and BT Industries cooperate closely inseeking to maximize benefits of synergy on a global scale.

TOYOTA Material Handling Company

BT Industries AB

Japanese market

European market

Non-Japanese markets

North American market

Industrial equipment made by TMHC is sold in Japan
under the brand name of TOYOTA L&F (Logistics and
Forklifts), which refers to materials handling systems andindustrial vehicles and equipment. Outside Japan, thesignature of TOYOTA INDUSTRIAL EQUIPMENT is used.

BT Industries uses the brand names BT in Europe andother regions and Raymond in North America.
BT Industries also uses the Cesab, Prime-Mover andLift-Rite brand names in certain markets.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

17

F O C U S

2TOYOTA Material Handling Company
Gearing Up for Future Growth

For calendar 2002, TMHC achieved a record-high market

TMHC was created in April 2001 after Toyota Industries tookshare of 41.2% in Japan, exceeding 40% for the fourth

over the industrial equipment sales and marketing operations

consecutive year. This marked the thirty-seventh consecutiveof TMC. From 1956, when the first TOYOTA-brand forklift truck

year that TMHC was No. 1 in the forklift truck industry. On a

was launched, TMC had been responsible for the sales andfiscal year basis (April 2002 to March 2003), its market sharemarketing of materials handling equipment developed andwas 41.5%.

manufactured by Toyota Industries. With the transfer, Toyota

In calendar 2002, the GENEO-R (7FBR outside Japan) reachIndustries assumed full responsibility for all materials handlingtruck achieved a top market share in Japan for the second

equipment operations on a global basis.

consecutive year. The GENEO Series (7-Series outside Japan),This consolidation positions materials handling equipment

including the GENEO (7FG/D) internal combustion

as a core business within the Toyota Group, and underlines

counterbalanced forklift truck introduced to the market in

Toyota Industries’ status as one of the world’s leading

September 1998, has established a position as the forklift ofcomprehensive manufacturers in the field. The integration of

choice, featuring excellent safety, handling and operability.

development and manufacturing expertise with strong sales

Under the TOYOTA L&F brand, TMHC introduced

and marketing capabilities makes for more flexible

BT Industries’ hand pallet trucks and electric pallet trucks on

management, faster decision-making and strengthened global

an OEM basis into the Japanese market in April 2001 and May

competitiveness.

2002, respectively, in order to enhance its warehouse truck

TMHC also subsumed some of TMC’s domestic forklift truck

lineup. TMHC aims to expand the warehouse equipment

sales subsidiaries and the Industrial Equipment Division ofmarket, still a small segment in Japan, through the

Toyota Motor Sales, U.S.A., Inc., also transferred in April 2001.

introduction of more BT Industries products as well as vigorous

We also absorbed other related operations, including TMC’ssales and marketing activities.

industrial equipment sales subsidiaries in Europe.
For more information on TMHC’s global sales network andproducts, please visit www.global-toyotaforklifts.com.

Although the Japanese forklift truck market is expected to
improve marginally in 2003, a full recovery will take longer. In
these circumstances, we will respond precisely to customer
needs, promote fleet management contracts and offer

Operations in Japan

materials handling solutions optimized for each customer,

The forklift truck markets in advanced countries, including

thereby aiming at further expansion of sales and market share.

Japan, are maturing, and demand therefore tends to follow the

TMHC supplies TOYOTA-brand forklift trucks and materials
handling systems through an established sales network of 42

business cycle.
Since the bubble burst in Japan in the early 1990s, its

dealers throughout Japan.

economy has been in a slump. Although calendar 2002 saw
total demand in the domestic forklift truck market decrease by

Operations in China

7.5% from 2001, TMHC outperformed the market by keeping

Following China’s rapid economic growth, its forklift truck

the decrease in unit sales to 6.3%. TMHC embarked on sales

market is expected to grow from approximately 25,000 units inpromotion activities that focused on optimized materials

2002 to more than 30,000 units in 2005. The number of forklift

handling solutions. For example, it marketed high-quality

trucks produced by foreign companies (i.e., excluding those

products, provided prompt and reliable services, and engaged

manufactured by Chinese companies) is expected to growin a full-fledged “fleet management” program of materials

from approximately 7,000 units in 2002 to more than 10,000

handling equipment such as forklift trucks, thus contributing

units in 2005 as deregulation in the country proceeds. In

to further cost reduction for our customers.

anticipation of expanding demand, TMHC constructed a new
forklift truck assembly plant within the premises of Toyota

18

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

Industry (Kunshan) Co., Ltd. (“TIK”), a subsidiary of Toyota
Industries which is engaged in the production of foundry partsin Kunshan, Jiangsu Province, China. TIK began production of
forklift trucks in April 2003. TIK is currently assembling 1-3 ton
internal combustion forklift trucks, top-sellers in China, with aplanned production of 550 units in calendar 2003. Closely
monitoring the trend in demand, TIK will gradually increase
unit production as well as the number of models.
In May 2003, we established Toyota Material Handling(Shanghai) Co., Ltd. as a distributor of forklift trucks in China.
Sales in that country were previously conducted through three
dealers at seven sales bases. The new company, which started
operations in June 2003, will take the initiative in forging astronger sales network. We now have 12 local dealers at 19
sales bases (as of June 30, 2003), mainly along the coastal area.
Products are provided by TIK and TMHC from Japan to

TMHU’s headquarters in Irvine, California

strengthen product competitiveness in the growing Chinese
market. For calendar 2003, Toyota Material Handling(Shanghai) aims to sell 1,000 units.

Headquartered in Irvine, California, TMHU has establishedits leadership through superior engineering, technologicaladvancements and a commitment to quality products andOperations in Australia

service. As a result of the company’s continued growth, 99%

In June 2003, Toyota Industries established Toyota Industries

of TOYOTA forklift trucks sold in the U.S. are assembled in

Corporation Australia Pty Limited (“TICA”) as a new distributor,

North America. Most of the trucks are assembled by Toyota

with a view to expanding sales of forklift trucks and otherIndustrial Equipment Mfg, Inc. (“TIEM”) at its state-of-the-art

materials handling equipment in the local market. TICA started

facility in Columbus, Indiana.

operations on July 1 after taking over the materials handlingequipment sales operations of Toyota Motor Corporation
Australia Ltd., which was responsible for sales of TOYOTAbrand materials handling equipment in the country. TICA ischarged with forging a stronger local sales structure, and plansto sell 2,000 units of materials handling equipment during
calendar 2003.

Operations in the United States
America’s No. 1 Selling Forklift Truck Supplier
The U.S. forklift truck market in calendar 2002 was down 2%
from 2001. However, sales by Toyota Material Handling, USA,

TIEM’s plant in Columbus, IndianaInc. (“TMHU”) increased 8%. TMHU’s innovation, dedication andcommitment during 35 years in the U.S. market has paid

Long-Term Value

dividends; in 2002 TMHU was the No. 1 full-line forklift truck

TMHU attributes much of its success to Toyota’s commitment

supplier in the U.S. for units sold.

to safety, efficiency and productivity in its product designs,

Offering a full line of top-quality products, TMHU iswhich translates into long-term value for its customers.

supported by a world-class dealer network and has earned theDramatic advancements in technology, such as the System of

loyalty of its customers through an unmatched commitment

Active Stability (SAS) and Active Mast Control (AMC), help

to service and customer support.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

19

F O C U S

2Survey program and also conducted a Dealer Satisfaction
Study this year.
For 2003, TMHU’s new e-Learning Web site offers dealers
24-hour access to sales, technical and Toyota Financial
Services training, as well as monthly articles, quizzes, bulletinsand more.

Exceptional Dealer Network
TMHU markets its full line of high-quality forklift trucks under
the Toyota Industrial Equipment brand. Its nationwide
network of 79 dealers at 183 dealership locations leads theindustry in outstanding customer service and productsupport. Dealer consultants are experts at meeting customer
TMHU’s new 7-Series three-wheel electric forklift truck sets new
standards in productivity, energy efficiency and safety

reduce the risk of accidents and injuries, minimize thepotential for product and equipment damage, and maintain ahigher level of productivity. This revolutionary electric control
system can detect and respond to changes in forklift
operation to maintain stability and help prevent tipovers.
These advances in safety and reliability mean lower cost ofownership over the life of a truck, improving productivity
while reducing accidents and related downtime.

needs at every level, whether it involves a single truck or acomplete fleet management program, and they are backed by
TMHU’s extensive resources. These include factory-trained
service technicians, STARLIFT parts, Toyota Certified Used
forklift trucks, and flexible leasing and financing packages
through Toyota Financial Services.
This support, combined with years of experience andinnovation, means that TMHU’s complete line of quality forklift
trucks offers a solution for every application. For more
information on TMHU products and services, please visit
www.toyotaforklift.com.

Anticipating Customer Needs
With advanced technology and a world-renowned
manufacturing process, TMHU has earned an industry-wide
reputation for high-quality, reliable products across all
categories. As TMHU looks to the future, productdevelopment efforts are designed to anticipate customer
needs for environmental and safety concerns, reduced

Operations in Europe
TIEE Increases Market Share Supported by
Product Launches
For Toyota Industrial Equipment Europe, S.A.R.L. (“TIEE”), theEuropean division of TMHC, the year 2002 was a periodmarked by a number of significant developments. In particular,

operating expenses and increased productivity.
For example, as demand grows for energy-efficient electric
forklift trucks, TMHU is introducing its new line of 7-Series
three-wheel electric forklift trucks. These new models feature
Toyota’s revolutionary AC technology, which results inindustry-leading productivity and energy efficiency.

The Year Ahead
The industry is expecting modest growth for the coming year.
In order to maintain its leadership position, TMHU is focusing
on growth in national and fleet account penetration,customer satisfaction and dealer training. TMHU recently
launched a comprehensive, new Customer Satisfaction
7FBMF—TIEE’s revolutionary electric counterbalanced forklift truck

20

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

TIEE continued to expand its range of warehouse equipment
and forklift trucks, and also further strengthened its regional
distribution network.
The highlight of 2002 was the introduction of therevolutionary four-wheel 7FBMF forklift truck in France in June.
This machine is available in nine different models, making itsuitable for a wide range of applications in industries such as
food, beverages, paper and metal processing. During the year anumber of innovative new products, including the Generation
7 Stacker Series, the 7FBRE reach truck and the Easymover,were launched and these have already achieved considerable
success on the European market.

TIEE’s European Sales & Marketing Office in Belgium

In March 2003, TIEE took part in the Salon de la Manutention
trade show in Paris, where it introduced its brand new three-total. TIEE, however, was able to increase its share of thiswheel forklift truck, the 7FBEF. Designed for use in a range ofmarket to 11% over the course of the year.

applications and industries, this is a high-performance

The market for warehouse equipment in the same region

multipurpose truck, equipped with state-of-the-art safety andwas more resilient in the face of the economic downturn, andergonomic features. It can operate as easily in warehouses andrecorded a decrease of just over 7%. Thanks to the many

confined production environments as in outdoor applications.

innovative products launched in the sector in 2002, TIEE
increased its sales in this particular market by almost 50%.
Looking ahead, 2003 may see a small recovery in European
market conditions. This could stabilize the regional materials
handling market at its current level and prevent any further
deterioration compared with the tough 2002. The downside
risks are still significant though, and uncertainties surrounding
the political and military situation in the Middle East could
have a significant negative impact on any recovery. Yet TIEE isconfident it will once again outperform these difficult market

Toyota Industrial Equipment, S.A. (“TIESA”), our forklift truck production base in
France, manufactures more than 9,000 forklift trucks annually for the European
marketOperational Results Outperform the Market
Difficult market conditions made 2002 a very challenging
period. The economic downturn that started in 2001
continued throughout 2002, adversely affecting the market,
which contracted by over 8% overall compared to theprevious twelve months.
Despite this, TIEE turned in a very good commercial
performance, achieving an increase in sales of almost 10%compared with 2001. This was the second consecutive yearthat TIEE well outperformed the market.
The European market for counterbalanced forklift trucks
experienced the biggest decline as a result of the generalconditions. This confidence is supported by TIEE’s excellent
results in very difficult market conditions in 2002.
Throughout 2003, TIEE will carry on strengthening its
position within the European market. It will continue efforts toextend its European sales, distribution and after-sales network,with a view to ensuring quick and effective responses tocustomer demands.
TIEE’s key aims for 2003 are to shorten lead-times, reduce
costs and increase customer satisfaction levels. The ultimate
goal is to provide European customers with optimum materials
handling solutions, and TIEE is now well on the way towardachieving this objective.
For more information on products and services, visit
www.tiee.com.
Note: The fiscal years of Toyota Material Handling USA, Inc. and Toyota
Industrial Equipment Europe, S.A.R.L. run from January 1 to December 31.

economic conditions. Sales in this sector fell by around 10% in

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

21

F O C U S

2BT Industries
In June 2000, Toyota Industries acquired BT Industries, a Swedish warehouse truck manufacturer.
BT Industries is our strategic partner in the field of materials handling equipment.
Note: The fiscal year of BT Industries, unlike that of Toyota Industries, runs from January 1 to December 31.

Statement by the President of BT Industries

BT Industries Stays Strong
We are represented in some 70 countries in every part of the globe and are the world’s leading supplier of warehouse trucks.

Strategic Position
During the 1990s we systematically built up the strategic
position we hold today. This was facilitated by strong finances,which gave us the freedom to maneuver, as well as thecommitment of employees at all levels of the company.
In less than 10 years BT Industries has been transformed
from primarily a Western European company into a worldleading group with slightly over 20% of the global market for
warehouse trucks. The foundation was laid during a period of
structural growth through acquisitions in strategicallyimportant markets, thanks to which we are now the only
major company that can offer a wide range of forklift trucks
that meet both European and U.S. standards. Through theseacquisitions, our product range has been expanded to also
include counterbalanced forklift trucks, mostly electricpowered.
The global economy was in a worse condition in 2002 than
Per Zaunders

for many years. The weak economic climate and uncertainty

President

that resulted also affected the forklift truck industry, where
customers have shown less willingness to invest. BT Industries
operates in an environment, however, in which economic

product volume does not fluctuate noticeably with thefluctuations often have less impact than for many othereconomy’s ups and downs. On the other hand, the structuresindustries. Among our strengths are our customer base,and habits of these industries with regard to materials

geographic diversification and breadth of product range,

handling are constantly changing. In recent decades, many ofwhich to a large extent comprises services that are not directly

our customers have grown from national companies todependent on new product sales.

international groups. Their global presence demands that webe able to provide materials handling throughout the world,

22

Structural Changes

which has been a strong reason for our geographic growth

Around half of our business is generated from customers instrategy.

consumer-oriented industries. These companies are often

Structural changes are continuing among BT Industries’

global players, for whom efficient logistics is decisive tocustomers, particularly those that are consumer-oriented, andprofitability and survival. They are less cyclical, since theiramong forklift truck manufacturers. These changes reflect the

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

efforts of everyone involved to adapt to a global economy, agenerally higher pace of change and a desire to maintain or
improve profitability through economies of scale. In the last
five years, BT Industries has played a leading role in the
restructuring and consolidation of the forklift truck industry
and achieved a world-leading position in warehouse trucks.
Toyota Industries’ acquisition of BT Industries in 2000 createdthe world’s largest overall forklift truck company as well as
the leader in both warehouse and counterbalanced trucks.
Further consolidation and structural changes at the customer
level and among other companies in the forklift truck
industry are to be expected.
The changes in the forklift truck market are reflected in
growth for BT Industries’ three geographic business areas.
BT EUROPE and BT RAYMOND operate in mature markets,
which are expected to maintain about the same long-term
growth rates as before—6-7% annually on average.
BT INTERNATIONAL’s market has greater growth potential
percentage-wise. Rising standards of living in Latin America,
Southeast Asia and Eastern Europe, for example, areproducing changing consumption patterns and logistics
needs very much like those in Western Europe and North
America.

Change is an Improvement
BT Industries has been a profitable company for several years.
In order to maintain and strengthen our profitability, we must
continuously develop and manufacture products andservices that exceed our customers’ expectations. The ability
to handle new conditions and anticipate customers’ needs isan increasingly important competitive factor. This places highdemands on employees throughout the BT Industries Group.
As a result, one of our biggest challenges is to get the entire
organization to see more clearly the opportunities thatchange creates. BT Industries will take an active approach tochange work and ensure that change is synonymous withimprovement—in our own work and in our customer
offerings.

through interaction among BT Industries Group companies,
to identify the best methods and processes. We have every
reason to believe that by further expanding cooperationinternally and with our owner, Toyota Industries, we will all
benefit. Cooperation is important to both BT Industries andToyota Industries. Each of our organizations has different
strengths and competencies which, when utilized correctly,
create synergies. The philosophy at Toyota Industries and
BT Industries is to maintain two distribution channels (BT and
TOYOTA) and to continue to work with separate brands. This is
expected to produce the best results for BT Industries as wellas Toyota Industries as a whole. In BT Industries’ distribution
channels, we employ one main brand in each market region.
In North America, Raymond is the primary brand, and inEurope and the rest of the world it is BT.

Future Development
The market’s development in the last two years has deviatedfrom the long-term trend in the forklift truck industry. I am
convinced, however, that the historic growth rate of 6-7% a
year we have become used to in the warehouse truck
industry in recent decades will continue. What we have seen
the last couple of years is a temporary blip. I am therefore
optimistic about our long-term development potential andfeel we are well prepared for an economic rebound. In recent
years we have made significant capacity investments in our
production plants, and at the same time have created astrategic position we can be proud of. Our constant,continued efforts to find improvements in the way we work inevery area can be compared to polishing a diamond.

Cooperation Strengthens Us All
In a global group like BT Industries, the many competencies

Per Zaunders

and experiences we have gained are a product of local

President

business and cultural conditions. Utilizing this local base, in
combination with a clear group identity, allows BT Industries,

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

23

F O C U S

2BT Industries is the world leader in warehouse trucks. Its

groups are being made available. As a result, materials

operations include the development, production and distribution

handling today requires more truck lifts with lower averageof electric trucks, counterbalanced trucks, manual trucks, and aweights than before. Customers’ demand for materials

wide range of services and rental alternatives.

handling is also gaining in importance as a parameter for

In this section, we explain BT Industries’ organization, market

their profitability.
More than half of BT Industries’ sales comes fromtrend, and its products and services.

customers in consumer-oriented businesses, although mostOrganization of BT Industries Group
The BT Industries Group comprises a total of around 80

industries are represented.
Large, international customers with operations in morecompanies, of which 65 are majority-owned subsidiaries. The

than one country prefer suppliers that can offer similar

BT Industries Group is divided into three business areas, based

products, financing, service and maintenance in all thelargely on geography. Business area BT EUROPE is primarily

markets where they do business. BT Industries has the

responsible for operations in Western Europe, BT RAYMOND

resources, competence and concepts needed to enter into

for North America and BT INTERNATIONAL for the rest of thecentralized agreements with, and serve as a partner to,world. The BT Industries Group has a total of seven production

globally active customers.

plants: two in Sweden, two in the U.S., two in Canada and one
in Italy. Sales and service are handled through an extensive

Products and Services of BT Industries

network of the BT Industries Group’s own sales and service

The product range consists of a wide variety of electric-

companies as well as partly owned or independent dealers. In

powered warehouse trucks, including walkies, order pickers,

total, the BT Industries Group is active in over 70 countries.

reach trucks and very narrow aisle trucks (VNA). All aredesigned for indoor materials handling, while thecounterbalanced truck range is more suited for outdoor

BT INDUSTRIES

environments. In addition, BT Industries manufactures anumber of different manual trucks, so-called hand pallet

BT EUROPE

BT RAYMONDBT INTERNATIONAL

trucks.
An extensive range of services and fast spare parts

Note:The BT Industries Group comprises some 80 companies with global coverage.
BT Industries’ operations are organized into three business areas.

distribution are key elements in BT Industries’ overallcustomer offering. The service range also includes short- andlong-term rentals.

Market Trend
Global volume for all motorized forklift trucks is estimated at
approximately 594,000 units in 2002. The market is

BT Industries’ Worldwide Manufacturing Bases

concentrated in the industrialized world, with North America,
Western Europe and Japan accounting for an approximately
80% share.
In recent decades, the market for warehouse trucks hasgrown by an annual average of slightly over 6%. Eastern
Europe, Southeast Asia and South America, which areprojected to be the fastest growth markets, have posted
growth of over 10% in recent years. The variety of consumer
goods has been expanding greatly for some time. New
products are constantly being launched and a growing
number of versions and brands within the same product24

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

BT Industries presently operates seven manufacturing bases in Europe
and North America. Products made at these bases are sold worldwide
through BT’s own sales and service organizations and some 450
distributors and dealers.

F O C U S

3Car Air-Conditioning Compressor Business — Establishinga Global Presence with Advanced Technologies
The production of car air-conditioning compressors is a key
strategic business not only of the Automobile Segment but
also of Toyota Industries itself. Making full use of our cuttingedge technologies, we develop and manufacture products
attuned to customer needs, leading the global car airconditioning compressor market.

Technological Superiority Beating
the Competition
With technology and overall quality that competitors cannot
match, Toyota Industries’ car air-conditioning compressors are
the preferred choice not only of Toyota Motor Corporation(“TMC”) but also of many of the world’s major car
manufacturers.
Toyota Industries’ Car Air-Conditioning Compressorof competitors. For example, in the 1980s we launched ourBusiness has made an important contribution to innovation incompact, lightweight 10-cylinder compressor with swash

the automobile field. We anticipate changes in market needs

plate and fixed displacement, which is extremely reliable ataccurately and develop products to meet those needs aheadhigh operating speeds. In the 1990s, in response to increased

Automobile Trends and Toyota Industries’ Product Development
1980s

1990s

2000s

Provide higher engine performance and comfortable interior
Slow down global warming

Reduce ozone layer destruction

Automobile
trends

Improve gas mileage
Hybrid cars, fuel-cell hybrid vehicles
Reliability at high speed, quiet operation
Compact, lightweight, power efficientCompressor
needs

Ultra-lightweight, ultra-power efficient
Reducing CFCs

Replacing CFCs

Lower jolt turning air conditioners ON/OFF Superb acceleration
Fixed displacement type

ToyotaIndustries’
product
development

1981
Compact, lightweight
10-cylinder swash
plate compressor

Use of HFC-134a refrigerant
Power efficient, 1995
superb acceleration
7-cylinder one-way
swash plate compressor

World’s first commercial products

Variable
displacement
type

External signal-controlled, variable displacement,
clutchless type1997

Ultra-lightweight,
ultra-power efficient,superb acceleration
6-cylinder one-way
swash plate compressor

Electric compressor
2002

CO2 compressor

CFC-freeCO2 compressor for fuel-cell hybrid vehicles

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

25

F O C U S

3Worldwide Manufacturing Bases and Local Offices

TDDK
MunichDNTS
MACI

Detroit
ACTIS

DWHI
YSD
SUBROSDNIA

DNBRConsolidated subsidiaries
Licensed manufacturers
Local offices

environmental concerns, we launched a one-way swash plate

Strong Global Presencecompressor with continuous variable displacement, which

We hold a leading share in the global car air-conditioning

increases fuel efficiency by reducing the load on the engine.

compressor market, producing more than 15 million units a

In the late 1990s, we introduced a clutchless type one-way

year at our facilities around the world.

swash plate compressor with continuous variable

Over the years, Toyota Industries has globalized its

displacement, which senses changes in external ambience

production, establishing a tri-polar production network withsuch as ambient temperature and engine acceleration,bases in all the major automobile markets, i.e., Europe, the U.S.

offering both excellent acceleration and lower energy

and Japan. We also license production in Asia (excluding

consumption.

Japan) and South America. Local production allows the

In the near future, electric vehicles are expected to become

manufacture of products that accurately reflect local needs,

more popular, leading to increased demand for electric

while at the same time reducing shipment costs andcompressors. Toyota Industries is undertaking substantial

exchange rate risks. Local procurement is increasing, and will

research and development in this field. To protect the ozone

continue to increase for the foreseeable future.

layer and slow down global warming, we developed jointly

Our U.S. production base, Michigan Automotive

with DENSO Corporation (“DENSO”) a car air-conditioning

Compressor, Inc. (“MACI”)*, produced over 5.4 million swash

compressor that uses CO2, instead of hydrofluorocarbon

plate compressors with fixed displacement in 2002. Our(HFC), as a refrigerant. This compressor is incorporated in theEuropean production base, TD Deutsche Klimakompressor

fuel-cell hybrid vehicles developed by TMC, which wereGmbH (“TDDK”)*, produced approximately 0.7 million swash

delivered to the Japanese government in December 2002.

plate compressors with variable displacement in 2002.

Toyota Industries is currently engaged in the research andIn fiscal 2003, Toyota Industries was the leading player indevelopment of a CO2 compressor for more common, engine-

the Japanese market, supplying more than 5 million units todriven vehicles.

major car manufacturers, including TMC. The total supplied toAmerican automakers and Japanese manufacturers
producing in North America was over 5.5 million units(including exports from Japan and local production), mainly

26

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

fixed displacement compressors.

Entering the Aftermarket

In Europe, Toyota Industries supplied over 4.6 million units

In July 2001, Toyota Industries established ACTIS(including exports from Japan and local production),

Manufacturing, Ltd. LLC (“ACTIS”) in Grapevine, Texas, as a joint

including variable displacement compressors for luxury cars

venture with DENSO and Toyota Tsusho Corporation. ACTIS, aand compact variable displacement compressors for smaller

remanufacturer of car air-conditioning compressors for thecars. Despite uncertain prospects for automobile sales

North American market, started production in March 2002.

triggered by an economic slowdown in the U.S., our medium-The company was created to cope with the rising demand forterm focus is on North America and Europe. In North America,

remanufactured compressors, itself a response to social andwe will seek new orders aggressively. In Europe, the potential

environmental needs for more efficient utilization offor higher sales is vast as the proportion of cars fitted with car

automotive part resources. Making full use of our long-

air-conditioners is expected to keep increasing for theaccumulated know-how in production technologies andforeseeable future. In Europe, we will vigorously cultivate new

quality control, ACTIS intends to reinforce competitiveness incustomers by rapidly developing and launching products

the North American aftermarket for remanufactured

closely tailored to local needs, such as the compact variable

compressors. ACTIS expects sales of 100,000 units in 2003 anddisplacement compressor.

120,000 units in 2004.

All our car air-conditioning compressors are supplied to

In February 2002, TDDK also commenced the

DENSO, which then sells them to major automakers

remanufacture of car air-conditioning compressors in theworldwide. Our compressors are also incorporated in DENSO’s

European market.

car air-conditioning systems.
* MACI and TDDK are joint ventures with DENSO. As of March 31, 2003, Toyota
Industries held 60% and 65%, respectively, of the shares of these companies.
The fiscal years of MACI and TDDK, unlike that of Toyota Industries, run fromJanuary 1 to December 31.

Remanufactured Car Air-Conditioning Compressors
In the U.S. and Europe, demand is increasing forreconditioned or remanufactured components, reflecting
social and environmental needs for more efficientutilization of automotive part resources. In response tothis trend, ACTIS in North America and TDDK in Europe
have begun remanufacturing car air-conditioning
Remanufactured
compressors

compressors. The two companies disassemble usedcompressors collected from the market, replace worn parts
with new ones, then reassemble the units.
Toyota Industries is committed to making a contribution
to resource conservation by increasing the number ofremanufactured products it sells in the future.

DeliveryRemanufacturing

ReassemblyCardealers
User

Replaceparts

Auto
repairshops

Parts inspection

DisassemblyCollection(of used compressors)

Used compressors are collected from car dealers and auto repair shops,
then remanufactured at ACTIS and TDDK for resale.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

27

F O C U S

4Electronics Business —A Key to Future Growth
ST-LCD is now producing the LCD panel for mainly mobile
phones digital still and video cameras, and personal digitalassistants (PDAs). The panels are supplied to customers
through Sony.
The low-temperature poly-Si TFT-LCD panels are energyefficient, and offer high resolution as well as high numericalaperture. They also facilitate the integration of the display
device and its driver circuits into a single TFT glass base plate.
The resultant reduction in cost and miniaturization of thedisplay unit allow the LCD panel to be used in a wide range ofapplications, including in-car monitors.
They are also suitable for wide-band mobile phones, where
they allow easy exchange of large volumes of data for video
and still images. We expect that demand for low-temperaturepoly-Si TFT-LCD panels will increase further as their
Toyota Industries is confident that its Electronics Business has

application in high-definition displays extends to ever smaller,significant growth potential, and we anticipate further market

lighter mobile phones and PDAs.

expansion in the long term. We intend to allocate the

Anticipating a sharp increase in demand for the panels overnecessary capital and management resources to turn thisthe medium to long term, in the fall of 2001 ST-LCD invested

potential into reality.

¥75 billion to establish a second production line, andincreased the capacity of its first production line. In total, ST-

LCD Business

LCD now has a monthly capacity of 32,000 base plates

In October 1997, Toyota Industries and Sony Corporation(600mm x 720mm). To help fund this investment, Sony and(“Sony”) established ST Liquid Crystal Display Corp. (“ST-LCD”)

Toyota Industries each injected ¥10 billion into ST-LCD,

as a 50-50 joint venture. ST-LCD manufactures low-increasing its capital to ¥50 billion. Looking closely and flexibly

temperature polysilicon TFT-LCD panels. ST-LCD benefits fromat the pattern of demand, ST-LCD has gradually increased theSony’s advanced LCD development technologies and Toyota

production volume of the second line since the summer ofIndustries’ superior quality control and manufacturing

2002. In anticipation of an increase in demand for mobile

technologies.

phone and digital camera applications, it plans to start full-Since our investment in ST-LCD is not a majority stake, we

fledged operation within 2003. Sony, Toyota Industries anddo not include it as a subsidiary but account for it as an

ST-LCD regard the low-temperature poly-Si TFT-LCD as a key

affiliate by the equity method. Nevertheless, we consider

device in the field of compact displays, and are collaborating

ST-LCD as the core of our Electronics Business. Since it began

to develop and manufacture superior products for further

mass production in April 1999, ST-LCD has expanded

expansion of the business.

production to meet rising market demand. A uniqueproduction line that incorporates the Toyota Production
System ensures that quality keeps pace with output.
Toyota Industries believes that the outstanding features of28

Semiconductor Package Substrate
Business
Toyota Industries entered the semiconductor package

the low-temperature poly-Si TFT-LCD panel give it significant

substrate business through its subsidiary, TIBC Corporation

potential to spur greater demand in the medium to long term.

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

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

Established in 1998, TIBC manufactures ball grid array (BGA)

Fitted in Toyota Motor Corporation’s Prius hybrid car as a main

plastic package substrates and flexible printed circuit (FPC)

component, the converter is a switching power supply that

substrates. Although TIBC experienced difficulties due to thedown-converts the high-voltage current of the main battery toworldwide IT slump, it will commit itself to improving its

a lower DC current to supply power for headlights, air

production efficiency, manufacturing cutting-edge productsconditioners and electric control units via the auxiliary battery.

that accurately reflect customer needs such as high-

The Center aims to establish a position as a manufacturer of

performance package substrates, and strengthening its

power sources for hybrid cars.

competitive edge. TIBC’s BGA plastic package substrates are
manufacturers worldwide and Integrated Device

Joint Development
through Business Collaboration

Manufacturers (IDMs) in South Korea and Taiwan for use in

We have been developing an ultra-

PCs, mobile phones and others. Similarly, TIBC’s FPC substrates

compact radio tuner for AM/FM/

are marketed by Ibiden to IDMs in Europe and China forteletext broadcasts jointly with Niigata

incorporation in credit cards, telephone cards and others.

Seimitsu Co., Ltd. (“Niigata”) as part of

supplied through Ibiden to major semiconductora business collaboration agreement.

Corporate Technical Center

This is the world’s first radio tuner to

Toyota Industries’ Corporate Technical Center develops andincorporate both analog and digitalmanufactures power electronics parts for automobiles, andcircuits by utilizing total CMOS RF IC

engages in basic R&D in the materials field as well as researchtechnology. In addition to facilitatingin the latest technologies, such as electronics for commercial

the design of ultra-compact car radio systems, this product willuse. The Center also serves as Toyota Industries’ R&D facility

enable mobile phones and PDAs to receive radio and teletext

and its production base for a vast array of electronics parts, so

broadcasts, opening the way for application in a wide range ofaccumulating know-how in product manufacture. Products

information devices. Toyota Industries and Niigata are working

include a DC-DC converter that fully employs the Center’s

closely on the feasibility of mass production for this unit.

Radio tuner module

long-cultivated power electronics technology and expertise.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

29

F O C U S

5Research and Development
Toyota Industries aggressively engages in R&D in a variety ofalso utilizes the long-accumulated technological know-how

fields for the purpose of achieving sustainable growth. Our

and outside network (both people and information) of eachR&D activities are mainly focused on product development

division to systematically and continually explore theand improvement conducted independently by each division,

potential for new products and services that may becomeand comprehensive research done by the Corporate Technicalfuture pillars of our business.

Center.

”E-Lab,” our IT research laboratory completed in May 2002,

Toyota Industries has a diversified range of businesses, anddivision as well as our R&D facility for information technology.

strengths, core technologies and market characteristics. In

The lab is responsible for researching digital simulation

order to develop new products efficiently, it is imperative thattechnologies with a view to reducing lead-times fromthe development department of each division carries out

development to manufacture to shipment. It is also involved

product improvement, technology development and appliedin developing an optimal network system for joint

research. Each division also has its own engineers,development of parts with suppliers, and for parts

experimental facilities and research laboratories.

procurement.

The Corporate Technical Center takes the initiative in basic

BT Industries AB (“BT Industries”) has its own R&D facilities,

R&D in the materials field as well as research in the latest

which engage mainly in warehouse equipment research.

technologies, such as electronics. The Center engages in R&D

TOYOTA Material Handling Company (“TMHC”) conducts

together with each division or independently, depending ontechnological exchanges with BT Industries, and is examining

the research themes. We also collaborate with Toyota Central

the feasibility of jointly developing key parts of materials

Research & Development Laboratories, Inc., an R&D facility ofhandling equipment.

the Toyota Group, and other outside R&D institutions,

At TIBC Corporation, one of our subsidiaries, our joint

including universities. In addition, in July 2003 we set up theventure partner Ibiden Co., Ltd. contributes to product

New Electronics Department within the Corporate Technicaldevelopment, while Toyota Industries offers support in theCenter, establishing a structure to deal with new business

manufacturing technology field. ST Liquid Crystal Display

endeavors in the electronics field.

Corp., our affiliate accounted for by the equity method,

In January 2003, Toyota Industries combined the Technicalbenefits from the product development technologies of Sony

Planning Department, which was responsible for company-

Corporation, our joint venture partner, and our own

wide technological management, and the Business

manufacturing technologies.

Development Department, which was charged with creating

Research and development expenses were ¥29.7 billion in

new businesses, and established the Business Planningfiscal 2003, a decrease of ¥0.3 billion (0.9%) from the previous

Department within the Corporate Center to promote new

fiscal year, and accounted for 2.8% of consolidated net sales, abusiness development and quicker decision-making withdecrease of 0.3 percentage points. By segment, research andregard to new businesses and technological management.

development expenses were ¥18.7 billion in the Automobile

This department engages in the lateral transfer ofSegment, ¥9.3 billion in the Materials Handling Equipment

technologies among the different divisions and theSegment, ¥1.1 billion in the Textile Machinery Segment andexamination of new technology development themes in order¥0.6 billion in the Others Segment.

to establish a strong and efficient corporate R&D structure. It

30serves as a support organization for the information systemeach of its business divisions has distinctive technological

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

The following are some of the new products unveiled in fiscal 2003.

Automobile Segment

Textile Machinery Segment

Electrically driven CO2 car air-conditioning compressor

JAT710 air-jet loom

HFC-134a, the hydrofluorocarbon most commonly used as

The JAT610 is Toyota Industries’ best-selling air-jet loom. In

a refrigerant for car air-conditioning compressors at theJanuary 2003, we started marketing the JAT710, an

moment, is effective in preventing the destruction of the

improved version of the JAT610. The product boasts

ozone layer. However, its global-warming potential is 1,300

greater energy efficiency, with 20% less air consumption,

times that of CO2. Toyota Industries developed jointly withhigher speed and 30% lower vibration than the older

DENSO Corporation a car air-conditioning compressor

model. It is capable of running at speeds of up to 1,250

that uses CO2 as a refrigerant, presumed to be effective in

rpm when the reed space is 190 cm and the machine isremedying both problems. This CO2 compressor isequipped with a positive cam motion.

incorporated in the fuel-cell hybrid vehicles developed by
Toyota Motor Corporation, which were delivered to theJapanese government
in December 2002.

CO 2 compressor

JAT710RX240NEW-EST compact-yarn ring spinning frame

Materials Handling Equipment Segment

In October 2002, we commenced sales of the RX240NEW-

GENEO-E (7FBE outside Japan)

machine is equipped with a state-of-the-art compact

In January 2003, Toyota Industries started domestic

spinning system, which allows for a smooth collection ofmarketing of the GENEO-E, its greatly improved 1-2 ton

fleece fibers through the condensing device, consisting of

three-wheel electric counterbalanced forklift truck series.

suction slit and perforated apron. The RX240NEW-EST

The product was subsequently introduced into markets in

produces quality yarn with low hairiness and highAustralia, Asia, the Americas and Europe. The GENEO-E

evenness by eliminating the spinningincorporates TMHC’s proprietary computer control

triangle at the delivery section oftechnology, System of Active

EST, our latest compact-yarn ring spinning frame. This

the front roller.

Stability (SAS) for greater
operability and stability, andan AC-drive system forexcellent power control
under driving and loading/unloading.
RX240NEW-ESTGENEO-E (7FBE)

Compact spinning system

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

31

F O C U S

6Corporate Governance
At Toyota Industries, we are making independent efforts tomake corporate governance function effectively. These
independent efforts are in addition to those legally required

Committee. Issues arising, when necessary and appropriate,such as the shareholders’ meeting and the formation ofare presented for discussion by the Board of Directors, whichbodies for oversight purposes, including the board ofis charged with supervising the business performances of thedirectors, board of corporate auditors and others.

directors. Five corporate auditors must attend the board

Although amendments to Japan’s Commercial Codemeetings, and have the legal responsibility of preventing any(effective as of April 1, 2003) allow selective introduction of

unlawful or inappropriate resolutions. The corporate auditors

U.S.-style, committee-based corporate governance, we opted

are charged with auditing the execution of the directors’

to retain the Japanese conventional auditing system because

duties.

we deemed it fully capable of doing the job. Aside from what

The main decision-making and deliberative bodies ofis required by the law, Toyota Industries is constantly

Toyota Industries are the Board of Directors, the Management

exploring the best possible way of practicing good corporate

Committee and the Business Operation Committee. The

governance, and reviewing its internal systems as needs arise.

Management Committee and the Business Operation

This section covers the corporate governance system ofCommittee have fewer directors than the Board of Directors,

Toyota Industries as of July 1, 2003.

making it possible to conduct thorough deliberations as wellas make quick and efficient decisions in response to changes

Decision-Making and Supervisionin the management environment.

Other than matters that come under the authority of thebasically made by the Board of Directors. In order to raise

Corporate Auditors(Board of Corporate Auditors)

management efficiency, however, day-to-day operations are

The Board of Corporate Auditors is composed of fiveentrusted to division managers or an in-house company

corporate auditors, including two standing corporate auditorspresident. The establishment of divisional and company-wide

and three outside corporate auditors. The corporate auditors,

business goals and strategic management matters regarding

appointed at the Shareholders’ Meeting, conduct operations

overall and individual businesses are discussed by theaudits as well as accounting audits. For this purpose, the law

Management Committee and the Business Operation

grants corporate auditors a great deal of authority andShareholders’ Meeting, all management decisions are

Shareholders’ Meeting
Corporate Auditors
MonitorBoard of Corporate Auditors

Board of Directors
MonitorManagement Committee*
ChairmanPresident
Business Operation Committee**32

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

* The Management Committee deliberates upon
important matters concerning all aspects ofmanagement, such as company-wide strategy andallocation of management resources. The Committee
is composed of directors above Executive Vice
President level. When he deems it necessary, thePresident calls in certain other directors andmanagers.
** The Business Operation Committee deliberates upon
important matters regarding each business segment.
The Committee is attended by the President, directors
in charge of corporate planning and directors
assigned to oversee divisional operations (division
managers, etc.).

responsibility. In the operations audit, they investigate

Information Disclosure

whether ordinances and articles of incorporation are being

At Toyota Industries, we areobserved by the directors in the execution of their duties.

making independent efforts

Regarding the accounting audit, they review the audits madeto ensure that we adhere to

by external auditors. In order to prevent illegal or improper

the spirit as well as the letter

resolutions from being made at meetings of the Board ofof the law, in Japan and

Directors, the corporate auditors must attend the meetings

overseas, conducting ourand give their opinions if necessary. When any violation of an

business affairs fairly andordinance or articles of incorporation is made by a director ortransparently. Accordingly,

the prospect of such a violation is identified, it is reported to

we intend to conform to thethe Board of Directors.

highest possible standards

Compliance and Good Corporate
Citizenshipwith respect to disclosure of
information andaccountability to

Toyota Industries considers compliance with the law the very

shareholders and otherfoundation of good corporate governance. In the early 1990s,

stakeholders. We are also

we established a Code of Conduct Council for the purpose ofaiming for an even higher

promoting awareness of ethical, legal, social anddegree of management

environmental issues. The Council is chaired by an Executive

transparency. As part of these efforts, we are gradually

Vice President with attendance by those above Managing

expanding the volume and contents of information available

Director, and held as necessary to monitor overall corporate

to the public through enhancement of the Investor Relations

activities from the legal and ethical viewpoints. In 1998, the(IR) section of our Web site.

Council published a guide for employees containing specificguidelines on good conduct and compliance with the law. The

http://www.toyota-industries.com/ir/

We plan to start releasing quarterly financial reports fromfiscal 2004.

Council liaises closely with the Legal Department, the Global
Human Resources Department and the Audit Office, among

Stock Option Incentive Planothers, which in turn conduct regular checks of each

In June 2003, the Ordinary General Meeting of Shareholders

department and promote educational activities.

of Toyota Industries Corporation approved a grant of share

Further, we plan to set up a corporate ethics hotline inacquisition rights in a total of 900,000 shares to board

September 2003, in addition to other such existing lines andmembers and designated key employees as a stock option

counseling desks, for the purpose of early detection andincentive plan. The purpose of this plan is to further motivate

handling of important compliance-related information.

senior management in enhancing shareholder value by

Aside from these systems, we have unveiled the Fivealigning them with investors. Recipients may not exercise theValues*, laying down our basic philosophy and forming an

option within the first two years. Subsequent to the initialaction guide for our employees. We run the Company with aperiod, the option must be exercised or waived within theshared standard of high morals, from top management down.

next four years.

* Please refer to page 16 for details.

Toyota Industries intends to continue to explore ways toachieve the best possible corporate governance, not only
through a legal framework but also through independent
efforts.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

33

F O C U S

7Caring for the Environment
Basic Principle

Action Plan. As the targets set out in the second plan had

Toyota Industries, recognizing that preservation of the global

almost been met, we unveiled the Third Five-Yearenvironment is an issue that concerns the survival of mankind,

Environmental Action Plan (April 2001 – March 2006) in August

embraces environmental soundness as a crucial medium- to

2000. This plan defines specific targets and activity guidelines,

long-term business concern. Our basic corporate principle

including “zero landfill waste”* at all of the Company’s

states that “Toyota Industries believes that economic growth

domestic plants. The following is an outline of the plan.

and conservation of the natural environment are compatible. It* Toyota Industries defines “zero landfill waste” as a reduction in direct landfill
waste of over 95% compared with fiscal 1999 levels, and a reduction inindirect landfill waste of over 95% compared with fiscal 2000 levels.

strives to offer products and services that are clean, safe and ofhigh quality.” In accordance with this principle, we have been

Environmental Policies

actively engaged in the protection of the environment.

1. Conduct corporate activities that are considerate of the

Corporate Commitment to theEnvironment

environment at every stage of a product’s life cycle, fromdevelopment through design, production, use and disposal,
so as to provide clean and safe products

In January 2003, Toyota Industries unveiled “Toyota Industries

2. Strive to intensify environmental management, includingGroup Corporate Commitment to the Environment.” It lays
down the strong resolve of the entire Toyota Industries Group

that of consolidated subsidiaries, for the further

to fulfill its corporate responsibilities to society and further

advancement of corporate activities that support
environmental protection

engage in environmental protection activities.

3. Promote social contribution, information disclosure andThird Environmental Action Planknowledge through wide-ranging cooperation with society

Since we devised the First Environmental Action Plan in 1993,

on environmental protection, with the ultimate aim of

we have tackled environmental issues systematically. In 1996,

achieving a better global environment

we revised the plan and announced the Second Environmental

Company-Wide Waste Emissions(Ton)
60,00050,00040,00030,000Toyota Industries aims atzero landfill waste by March 2006.

20,00010,000

0
FY

34

91

92

93

TOYOTA INDUSTRIES CORPORATION

94

95

96

97

ANNUAL REPORT 2003

98

99

00

01

02

03

06
TargetAction Guidelines
1. Develop and provide clean products with minimal
environmental impact

In-House Organization forEnvironmental Activities

2. Promote manufacturing that strives for zero landfill waste

Product Technology
Subcommittee

3. Expand environmental management systems
4. Actively participate in public environmental protection
efforts as a responsible corporate citizen
Specific numerical targets include the following: By the end of
March 2006, total CO2 emissions to be 95% of the fiscal 1991

Energy Subcommittee
Environmental
Committee
Established in December 1991,
chaired by the President

level, and by the end of March 2011 to be 90% of the fiscal

Pollution Prevention
Subcommittee

1991 level; by the end of March 2006, total emissions of PRTR
(Pollutant Release and Transfer Register) substances specified

Waste Minimization
Subcommitteeby the Ministry of the Environment to be 50% of the fiscal 1999
level; and by the same date total VOC (Volatile Organic
Compound) emissions from paint lines to be 50% of the fiscal

Plant
Environmental
Committee

1999 level.

System for Environmental Activities(In-House Organization)
To tackle environmental issues in a consistent and organizedmanner, we have set up the Environmental Committee, chairedby the President. The committee has four specialized
subcommittees. Also, each plant has organized its own Plant
Environmental Committee and specialized subcommittees todeal with environmental issues regarding individual
manufacturing facilities.
We realize the need to set up an encompassingorganizational structure to uniformly and efficiently manageand promote the environmental activities that each Toyota
Industries Group company has been engaged in. We areconducting a feasibility study on this task.

Specialized
Subcommittees
at Plant Level

Compliance with
International Environmental Standards
Toyota Industries is working to obtain ISO14001 certification inorder to establish a company-wide environmental
management system and fulfill its corporate responsibilities forinternational environmental protection. All the production
plants of the Company, including the Higashichita andHigashiura plants, which started operation in 2001 and 2002,
respectively, had received ISO14001 as of March 2003. Severalof our domestic subsidiaries and affiliates have been certified,
while others are preparing to obtain certification. TIEM, MACI,TIESA, TIK, KTTM and TDDK, i.e., all our overseas production
bases except BT Industries, have been certified. So have several
plants of BT Industries. We are working to obtain certification
for all our Group companies.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

35

F O C U S

7Environmentally Preferable Purchasing(EPP)

Environmental Reporting

In March 2001, we devisedthat responsible corporate citizens should disclose theiran EPP Guideline andenvironmental protection activities to the general public. For

distributed copies to our

example, we hold regular meetings with local communities.

materials and parts

Since 1999, we have also published an Environmental Report,

suppliers as notification ofdetailing the activities and performance of our environmental

our intention to commence

protection programs. For details on how to obtain copies of“green” procurement. The

this report, see the last page of this annual report. The contents

guideline lays out ourof the latest Environmental Report, together with details of ourintention to procure parts

recent activities and related matters, are also posted on ourand materials from only

Web site (http://www.toyota-industries.com/environment/)

those companies

dedicated to environmental issues, launched in April 2002.

considered to have

Through our Web site and Environmental Report, we areestablished anproactively disclosing our environmental protection activities

environmental management system, which supervises theto our stakeholders.

Over the years, we have on various occasions fulfilled our belief

usage of substances harmful to the environment, and havestopped using prohibited substances. In February 2003, werevised the EPP Guideline and included our intention to tighten
the usage of chemicals.

Environmental Accounting
As environmental issues to tackle increase, so does theimportance of accurate analysis and understanding of the costs
and effectiveness of environmental investment from thestandpoints of corporate management and information
disclosure to investors and shareholders. Since international
standards regarding the range and definition of environmental
costs have not yet been established, we have devised our own
criteria using the guidelines (2002 edition) laid down by theJapanese Ministry of the Environment as a reference, and havebeen accordingly calculating the costs of environmental
investment and protection and studying the cost-efficiency of
our environmental activities.

36

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

http://www.toyota-industries.com/environment/

Financial Section

Eleven-Year Summary

38

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

40

Consolidated Balance Sheets

50

Consolidated Statements of Income

52

Consolidated Statements of Shareholders’ Equity

53

Consolidated Statements of Cash Flows

54

Notes to Consolidated Financial Statements

55

Report of Independent Accountants

78

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

37

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

(Consolidated)
Millions of yen

2003

2002

2001

2000

¥1,069,219¥ 980,163¥ 767,383¥625,773

Operating income

52,47846,33047,304

28,867

Ordinary income

51,37547,86644,525

27,162

For The YearNet sales

Income before income taxes

43,67047,86638,22027,162

Net income

21,93427,311

22,637

13,686¥ 451,594¥ 396,470¥ 298,794¥191,992

59,15455,17446,45442,752

Overseas sales
Depreciation and amortization
Capital expenditures

87,55988,320127,273

44,746

Research and development expenses

29,70529,98526,19624,062Per share of common stock (yen, U.S. dollars):
Net income — basic

¥

70.19

¥

87.28

¥

75.90

¥

48.32

Net income — diluted

62.90

78.26

67.77

43.18

Shareholders’ equity

2,522.52

2,809.54

3,036.77

1,116.62

22.00

19.00

17.00

16.00

¥1,650,391¥1,770,401¥1,869,642¥685,914

738,868

878,812951,298

316,293

Cash dividends
At Year-End
Total assets
Shareholders’ equity
Common stock

68,04768,02268,01940,178

Number of shares outstanding (excluding treasury stock)292,777

312,796313,260

283,260

Cash FlowsNet cash provided by operating activities¥ 103,183

Net cash used in investing activities¥(95,121)78,413¥ 68,058(106,711)

81,078¥(155,871)(67,187)

Net cash provided by (used in) financing activities

57,776

1,225

94,47227,500Cash and cash equivalents at end of year

136,929

71,12095,297

77,332Return on equity (ROE) (%)

2.7

3.0

3.6

4.4

Return on assets (ROA) (%)

1.3

1.5

1.8

2.1

Indices

Return on sales (ROS) (%)

2.1

2.8

2.9

2.2

Debt/equity ratio (%)

55.6

35.9

30.7

60.5

Interest coverage (times)

6.7

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

95,47225,0305.8¥

97,54023,056

¥

9.1

14.5

79,921¥ 64,681

21,11813,132

Notes: 1. US dollar amounts have been translated from yen, for convenience only, at the rate of ¥120.20 = US$1, the approximate exchange rate on March 31, 2003.
2. Main changes in accounting standards and methods during the above periods are as follows. These changes have not been applied to the financial statements presented
prior to each year retroactively.
(1) Effective beginning the year ended March 31, 2003, the new accounting standards for net income per share have been applied. Details are described in Notes toConsolidated Financial Statements.
(2) Effective beginning the year ended March 31, 2001, the new accounting standards for retirement benefits, financial instrument and foreign currency transactions havebeen applied. Details are described in Notes to Consolidated Financial Statements.
(3) Effective beginning the year ended March 31, 2000, Toyota Industries Corporation (the “Company”) has used annual average exchange rate instead of the year-end ratein order to present the operating results more precisely as significance of the overseas consolidated subsidiaries had been increasing and their revenue and expenses
were incurred throughout the fiscal years. The Company also has adopted tax effect accounting due to the amendment of the accounting standards for income taxes.
Deferred tax assets have been newly recognized in current assets, and investments and other assets. Deferred tax liabilities have been recognized in current andlong-term liabilities.

38

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

(Consolidated)(Non–Consolidated)(Consolidated)Thousands of
U.S. dollars

Millions of yen

1999

1998

1997

1996

1995

1994

1993

2003

¥558,876¥572,698¥530,851¥476,084¥457,565¥467,246¥542,310$ 8,895,333

24,81432,72932,67519,926

16,796

13,11024,273

436,589

23,172

33,202

31,157

21,56016,775

14,53024,318427,413

23,172

33,202

31,157

21,56016,775

14,53024,318363,311

10,391

20,491

17,931

13,54910,638

10,73015,378

182,479¥178,737¥150,417¥116,738¥119,358¥ 99,835¥ 88,049¥104,333$ 3,757,022

34,38027,95828,04327,24026,35927,11630,093492,130

60,46862,00735,40829,62927,583

26,64033,311

728,444

23,231

23,112

19,691

18,77017,633

17,43916,000247,130

72.33¥ 63.55

¥

36.30

¥

¥

48.03

¥

37.72

¥

38.05

¥

54.53

$

0.58

32.62

63.48

55.20

47.13

37.10

37.41

53.44

0.52

1,063.05

1,056.81

996.18947.04905.89881.52857.06

20.99

16.00

16.00

16.00

13.00

13.00

13.00

13.00

0.18

¥617,071¥593,004¥556,291¥454,503¥427,206¥402,929¥412,166$13,730,374

301,158

304,097

281,154

267,145

255,536

248,583

241,686

6,146,988
566,115

40,17840,13331,45831,322

31,321

31,24531,245283,296287,752

282,233

282,083

282,082

281,994

281,994¥ 44,133¥ 50,952¥ 51,327

N/A

N/A

N/A

N/A

(96,222)(26,897)(74,968)

N/A

N/A

N/A

N/A

$

858,427(791,356)

24,368(12,918)

69,081

N/A

N/A

N/A

N/A

480,665

49,95574,30362,322

N/A

N/A

N/A

N/A

1,139,176

3.4

7.0

6.5

5.2

4.2

4.4

6.5

1.7

3.6

3.6

3.1

2.5

2.6

3.8

1.9

3.6

3.4

2.8

2.3

2.3

2.8

51.6

37.5

46.0

20.4

20.2

19.2

19.7

16.4

17.6

13.0

8.7

6.4

6.1

9.4

¥ 51,033¥ 55,212¥ 55,548¥ 44,830¥ 41,502¥ 38,031¥ 50,711

12,797

11,23910,73810,806

10,452

9,670

9,270

$

794,276(4) Effective beginning the year ended March 31, 1999, the Company has presented consolidated financial statements as follows: In the consolidated statements of income,enterprise taxes, which had been included in selling, general and administrative expenses up to and including the previous year, have been included in income taxes.
Amortization of goodwill, which had been classified as a deductible item from income before income taxes until the previous year, has been included in selling, generaland administrative expenses. Equity in earnings/losses of affiliates, which had been added to or deducted from income before income taxes until the previous years, hasbeen included in non-operating income or expenses.
(5) Effective beginning the year ended March 31, 1995, consolidated financial statements have been presented on a consolidated basis. The data for the years ended
March 31, 1994 and 1993 are non-consolidated basis.
3. Net income per share, ROE and ROA are computed based on the average number of shares, shareholders’ equity and total assets, respectively, for each year.
4. Debt/equity ratio = Interest-bearing debt / Shareholders’ equity
5. Interest coverage = (Operating income + Interest and dividends income) / Interest expenses
6. EBITDA = Income before income taxes + Interest expenses - Interest and dividends income + Depreciation and amortization

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

39

Management’s Discussion and Analysisof Financial Condition and Results of Operations
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on information known tomanagement as of July 2003.
This section contains projections and forward-looking statements that involve risks, uncertainties and assumptions. You should beaware that certain risks and uncertainties could cause the actual results of Toyota Industries Corporation and its Group companies todiffer materially from any projections or forward-looking statements. These risks and uncertainties include, but are not limited to, thoselisted on the first page of this annual report.
The fiscal year ended March 31, 2003 is referred to as fiscal 2003 and other fiscal years are referred to in a corresponding manner.

Liquidity and Capital Resources

Higashiura Plant to augment production capacity of car air-Toyota Industries’ financial policy is to ensure sufficientconditioning compressors, the relocation of the Obu Plant andfinancing and liquidity for its business activities and to

additional production facilities for electronic components.

maintain the strength of its balance sheets. Currently, inprinciple, funds for capital investments and other long-term
capital needs are raised from retained earnings and long-term

Intangible assets increased ¥1.9 billion (2.0%) to ¥96.8
billion resulting from an increase in software.
Investments and other assets decreased ¥222.9 billion

debt, and working capital needs are met through short-term(21.4%) to ¥819.6 billion. This is attributable largely to aloans. Long-term debt financing is carried out mainly throughdecrease in the market prices of shares of Toyota Groupissuance of corporate bonds and loans from financial

companies, including Toyota Motor Corporation (“TMC”), held

institutions.

by Toyota Industries.

In addition to current assets such as cash and cash
equivalents, time deposits and securities, Toyota Industries
maintains ¥100.0 billion of commercial paper issuanceTotal Assets, Shareholders’ Equity
and Shareholders’ Equity Ratio

capacity as of March 31, 2003.
Toyota Industries’ financial condition remains solid. Throughthe use of current assets such as cash and cash equivalents(¥ Billion)

(%)

2,000

80

1,500

60

1,000

40

500

20

and securities, as well as free cash flows and fund-raising fromfinancial institutions, Toyota Industries believes that it will beable to provide sufficient funds for the working capitalnecessary to expand existing operations and develop new
projects, and for future investments.

Assets, Liabilities and Shareholders’ Equity
Total assets at the end of fiscal 2003 stood at ¥1,650.4 billion, adecrease of ¥120.0 billion (6.8%) from fiscal 2002. This was due
largely to a significant decrease in investments and otherassets.
Current assets increased ¥76.5 billion (25.9%) to ¥371.8
billion. This was due mainly to an increase in cash and cash

0
FY

0

99

00

01

02

03

Total assets (left)
Shareholders’ equity (left)
Shareholders’ equity ratio (right)

equivalents. Cash and cash equivalents increased ¥65.8 billion(92.5%) to ¥136.9 billion, owing chiefly to issuance ofcorporate bonds in the total amount of ¥80.0 billion in
December 2002.

40

Current liabilities increased ¥156.7 billion (66.2%) over fiscal
2002 to ¥393.4 billion. This was because portions of long-term

Property, plant and equipment increased ¥24.6 billion

debt, including long-term bank loans, corporate bonds and(7.3%) to ¥362.2 billion, due largely to the establishment of theconvertible bonds, were reclassified to the category of current

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

liabilities due to mature within one year.

Cash Flows

Long-term liabilities were ¥494.2 billion, a decrease of¥141.9 billion (22.3%). This was because deferred tax liabilities(¥ Billion)100

decreased ¥103.6 billion as a result of a decrease in the market
value of investment securities, and portions of long-term debt

50

were reclassified to the category of current liabilities. Corporate
bonds increased ¥60.0 billion to ¥200.3 billion. This increase
was attributable largely to issuance of corporate bonds in the

0

(50)

amount of ¥80.0 billion in December 2002, despite the fact that
corporate bonds in the amount of ¥20.0 billion werereclassified to the category of current liabilities. Interest-

(100)

(150)

bearing debt, including short-term bank loans, long-term debt
due to mature within one year, corporate bonds, convertible
bonds and long-term bank loans, totaled ¥410.6 billion, an
increase of ¥95.3 billion (30.2%) over fiscal 2002.
Minority interest in consolidated subsidiaries increased ¥5.1

(200)
FY

99

00

01

02

03

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

billion (27.2%) to ¥24.0 billion, due largely to the newly
consolidated Taikoh Transportation Group.
Shareholders’ equity decreased ¥139.9 billion (15.9%) to

Net cash used in investing activities decreased in fiscal¥738.9 billion. This was mainly because net unrealized gains on

2003. While Toyota Industries spent ¥86.7 billion in fiscal 2003

other securities decreased ¥124.7 billion as a result of ato purchase property, plant and equipment, an increase of

decrease in the market value of investment securities. In¥13.1 billion (17.8%), the Company had expended ¥23.7 billion

addition, Toyota Industries repurchased 20 million of its

for acquisition of the industrial equipment sales business from

common shares. As a result, treasury stock at cost increased

TMC in fiscal 2002. The amounts used for purchase of property,¥35.2 billion. The ratio of shareholders’ equity to total assets

plant and equipment by principal segment were ¥49.4 billion,

decreased from 49.6% to 44.8%, while shareholders’ equity pera decrease of ¥11.6 billion (19.1%), in the Automobile Segment,

share at year-end decreased from ¥2,809.54 to ¥2,522.52.

and ¥24.4 billion, a decrease of ¥2.0 billion (7.5%), in the
Materials Handling Equipment Segment.

Cash FlowsNet cash and cash equivalents provided by operating activitieswas ¥103.2 billion, an increase of ¥22.1 billion (27.3%) over

Depreciation and Amortization

fiscal 2002. Net cash and cash equivalents used in investing(¥ Billion)

activities decreased ¥11.6 billion (10.9%) to ¥95.1 billion. Net

60

cash and cash equivalents provided by financing activities
increased ¥56.6 billion to ¥57.8 billion. Including translation
adjustments, cash and cash equivalents increased ¥65.8 billion

40(92.5%) to ¥136.9 billion.
The increase in net cash provided by operating activities
was mainly because increases in payables and non-cash

20

expenses outweighed an increase in receivables. Depreciation
and amortization increased ¥4.0 billion to ¥59.2 billion overfiscal 2002. Specifically, depreciation of property, plant andequipment was ¥51.4 billion, and amortization of intangible
assets was ¥7.8 billion.

0
FY

99

00

01

02

03

Automobile
Materials Handling Equipment
Textile Machinery
Others (including corporate or elimination)

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

41

Management’s Discussion and Analysisof Financial Condition and Results of Operations
Capital Expenditures

Net Sales, Overseas Sales andOverseas Sales Ratio(¥ Billion)
150(¥ Billion)

(%)

1,000

50

800

40

600

30

400

20

200

10

100

50

0
FY

99

00

01

02

03

0
FY

Automobile
Materials Handling Equipment
Textile Machinery
Others (including corporate or elimination)

An increase in net cash provided by financing activities was

0

99

00

01

02

03

Net sales (left)
Overseas sales (left)
Overseas sales ratio (right)

due mainly to issuance of corporate bonds in the amount of

Cost of Sales andSelling, General and Administrative Expenses¥80.0 billion. In fiscal 2003, Toyota Industries paid ¥6.2 billion,

Toyota Industries’ cost of sales for fiscal 2003 increased ¥71.1

an increase of ¥0.6 billion (10.8%), in cash dividends. The

billion (8.6%) over fiscal 2002 to ¥899.7 billion, due mainly toCompany also repurchased 20 million of its common shares inincreased sales of the Automobile and Materials Handlingthe amount of ¥35.2 billion.

Equipment segments. The ratio of cost of sales to net sales fell
from 84.5% to 84.1%, primarily because the effects of cost

Results of Operations

reduction activities outweighed an increase in labor costs andOperating Performanceother expenses.

In fiscal 2003, the Japanese economy remained sluggish. In

Selling, general and administrative (SGA) expenses

addition to a declining stock market, private sector capitalincreased ¥11.8 billion (11.2%) to ¥117.0 billion. The ratio ofinvestment continued to be stagnant. Consumer spending

SGA expenses to net sales increased from 10.7% to 10.9%. Thisremained weak due to employment uncertainties. Overseas,

was largely because selling expenses of the Materials Handling

although the European economy was on its way to a slow

Equipment Segment increased as a result of the expanded

recovery, the U.S. economy started decelerating in the latter

scope of consolidation.

half of the year.
In this operating environment, Toyota Industries madeDue to the factors summarized above, operating income for

new products to bring about greater customer satisfaction,

fiscal 2003 increased ¥6.1 billion (13.3%) over fiscal 2002 toaggressively conducting sales promotions and carrying out a¥52.5 billion. The operating income ratio increased from 4.7%

company-wide program to reduce costs. As a result, total

to 4.9%.

consolidated net sales of Toyota Industries amounted to¥1,069.2 billion, an increase of ¥89.1 billion (9.1%) over fiscal
2002.

42

Operating Income

efforts to strengthen its corporate structure by developing

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

Net sales amounted to ¥595.5 billion, an increase of ¥31.9

Operating Income andOperating Income Ratio

billion (5.7%) over fiscal 2002 and accounting for 55.7% of the(¥ Billion)(%)

total net sales of Toyota Industries. The increase was due

50

10

mainly to a rise in sales of car air-conditioning compressors in40

8

was ¥30.1 billion, an increase of ¥1.1 billion (4.0%).

30

6Vehicle Business
During fiscal 2003, we assembled five models under20

4

consignment from TMC: Vitz (Yaris in Europe); RAV4 compact

10

2

0
FY

0

overseas markets, notably in North America. Operating income

sport utility vehicle; Corolla Sedan; bB Open Deck(discontinued in March 2003); and Sprinter Carib (exported as
the Corolla Wagon, discontinued in July 2002). Although
99

00

01

02

03

Operating income (left)
Operating income ratio (right)

assembly of the Corolla Sedan for North America began in
fiscal 2003, sales of the Vitz (Yaris), our mainstay vehicle,
decreased due to TMC’s full-fledged local production of thismodel in Europe and ruthless domestic competition in thesmall car market.

Operating Performance Highlights
by Business Segment

228,000 units, down 19,000 from fiscal 2002. Net sales of theBelow are the operating results by business segment.

Vehicle Business amounted to ¥281.9 billion, an increase of

Net sales for each segment do not include intersegment¥1.8 billion (0.6%) over fiscal 2002. This increase was due

transactions.

mainly to the fact that Toyota Industries now pays for tires,

Total Vehicle Business production for fiscal 2003 waswheels and other parts previously supplied free by TMC andAutomobile Segment

recoups an identical aggregate amount in the form ofThis segment consists of vehicle (automobile assembly),

increased unit prices to TMC.

engine, car air-conditioning compressor and other businesses(including foundry parts and electronic components forautomobiles).

Engine BusinessWe produce gasoline and diesel engines for TMC vehicles andfor our own line of forklift trucks and other industrial vehicles.
For fiscal 2003, gasoline engine production totaled 193,500

Net Sales ofAutomobile Segment

Operating Income ofAutomobile Segment

units, an increase of 22,000 over fiscal 2002. Though the(¥ Billion)(¥ Billion)

2UZ gasoline engines increased and 2AZ gasoline engines for

600

30

the Estima, for which production started in August 2002, madeproduction of the 5E gasoline engine decreased, production ofan excellent contribution to the total. Production of diesel
engines totaled 207,400 units, down 4,700. Though production
400of the 1CD 2000cc direct injection turbo diesel engine with a20

common rail fuel system, which is fitted in the Avensis for
Europe, the Corolla and RAV4, increased, production of 2000cc200class C-type diesel engines for automobiles decreased. Total

10

engine production, including both intersegment transactions
and outside sales, was 400,900 units, up 17,200 over fiscal 2002.
0
FY 99

00 01 02 03

0
FY

99 00 01 02 03

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

43

Management’s Discussion and Analysisof Financial Condition and Results of Operations
In April 2001, Toyota Industries absorbed TMC’s Industrial

Materials Handling Equipment Segment

Equipment Sales Division. Sales of engines for forklift trucks

The Materials Handling Equipment Segment manufactures andsince then are all intersegment transactions. Previously, wesells forklift trucks, warehouse trucks and materials handlingsold forklift engines to TMC, which were then supplied to us

systems such as automated storage and retrieval systems, andfor production of forklift trucks. Excluding intersegment sales

automatic guided vehicle systems.

(i.e., excluding engines for forklift trucks), sales of gasoline

Net sales of the Materials Handling Equipment Segment

engines and diesel engines totaled 165,200 and 188,100 units,

totaled ¥373.0 billion, an increase of ¥20.0 billion (5.7%) overrespectively. On the same basis, total engine sales amounted

fiscal 2002. Operating income was ¥16.2 billion, an increase of

to 353,300 units, up 11,200 over fiscal 2002. Net sales¥2.8 billion (21.0%). One of the main reasons for the sales

excluding intersegment sales totaled ¥117.7 billion, an

increase of this segment was the consolidation of the financial

increase of ¥2.8 billion (2.4%).

results of TOYOTA Material Handling Company’s (“TMHC’s”)
seven overseas sales subsidiaries, which we acquired during

Car Air-Conditioning Compressor BusinessCar air-conditioning compressors developed andfiscal 2002, for the full year (the consolidation was for nine

manufactured by Toyota Industries are marketed to leadingin the previous fiscal year). The other was an increase in TMHC’s

auto manufacturers worldwide through DENSO Corporation

unit sales.

months for two subsidiaries and six months for five subsidiaries(“DENSO”). Sales of car air-conditioning compressors in thedomestic market increased due largely to a transfer of theassembly line for scroll-type compressors from DENSO.

Net Sales ofMaterials Handling
Equipment Segment

Operating Income ofMaterials Handling
Equipment Segment

366,000 over fiscal 2002. Overseas, we sold 10.4 million units,(¥ Billion)(¥ Billion)

up 1,635,000.Total unit sales were 15.8 million, up 2 million.

400

20

300

15

200

10

100

5

Overseas, orders increased in North America and sales
expanded in Europe. In Japan, we sold 5.4 million units, up

Net sales totaled ¥177.9 billion, an increase of ¥24.8 billion(16.2%) over fiscal 2002.

Car Air-Conditioning
Compressor Unit Sales(Million Units)
20

0
FY

15

99 00 01 02 03

0
FY

99 00 01 02 03

10

In the forklift truck business excluding BT Industries AB (“BTIndustries”), unit sales increased both in Europe and North
5

America amid the challenging economic environment. In thedomestic market, sales of our GENEO-B (7FB outside Japan)

0
FY

99

00

01

02

03

electric counterbalanced forklift truck continued strong(though unit sales decreased, its market share increased).The

Japan
North America
EuropeAsia and Oceania

GENEO-E (7FBE outside Japan), a revamped version of thethree-wheel electric counterbalanced forklift truck launched in
January 2003, also contributed to total sales.

44

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

Sales of materials handling systems, which compriseThis reflected a significant increase in sales of air-jet looms

automatic guided vehicle systems and automated storage

to China. We sold more than 9,200 units, an increase of about

and retrieval systems for the domestic market, increased

6,000 units over fiscal 2002. We sold more than 1,600 water-jet

substantially as a result of concerted sales efforts with ourlooms, an increase of some 400 units. On the other hand, sales

distributors, contributing to the overall good performance ofof ring spinning frames decreased by over 130,000 spindles tothis segment.

340,000, due mainly to sluggish export, except to Pakistan.

BT Industries’orders received were slightly up in 2002.

The export ratio in this segment is very high, and exports,

Orders received in Europe increased, but orders received inmainly to Asia, accounted for approximately 90% of total net

North America showed a slight decrease due to thesales for fiscal 2003.

deteriorating economic environment. BT Industries’ sales inNorth America decreased from the previous fiscal year,

Others Segment

reflecting low order backlogs at the beginning of 2002. In

This segment, currently relatively small, comprises mainly new

Europe, overall sales increased because an increase in service

businesses that we believe have outstanding growth potential.

sales offset a decrease in unit sales.

A core business in this segment is TIBC Corporation (“TIBC”), a

The Materials Handling Equipment Segment also

joint venture with Ibiden Co., Ltd. established in 1998. TIBC

manufactures and sells tow tractors, shovel loaders, sweepers

manufactures ball grid array (BGA) plastic package substrates,and other industrial equipment.

and flexible printed circuit (FPC) substrates. This segment also
includes the Logistics Solutions Business, the manufacture andTextile Machinery Segment

sales of press dies and production equipment, and other

The Textile Machinery Segment manufactures and sells

smaller businesses.

spinning-related machinery, including ring spinning frames,
and weaving-related machinery such as air-jet looms. Toyota
Industries is a world leader in the air-jet loom and spinningmachinery fields.

Net Sales of
Others Segment(Including Elimination ofIntersegment Transactions)

Net sales of the Textile Machinery Segment amounted to¥48.7 billion, an increase of ¥18.0 billion (58.7%) over fiscal
2002. Operating income was ¥2.3 billion, an impressive

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

50

5

40

4

30

3

20

2

10

1

recovery from an operating loss in fiscal 2002, due largely to anincrease in sales.

Net Sales of
Textile Machinery
Segment

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

50

3

40

2

30

1

0
FY

99 00 01 02 03

0
FY

99 00 01 02 03

Net sales of the Others Segment totaled ¥52.0 billion, an
20

0

10

(2)

0
FY 99

(4)
FY

increase of ¥19.2 billion (58.5%) over fiscal 2002. This was due
largely to the consolidation of Taikoh Transportation Co., Ltd.
and its four subsidiaries, even though TIBC suffered fromdepressed conditions in the IT market. Operating income was

00 01 02 03

99 00 01 02 03¥3.9 billion, a decrease of ¥0.6 billion (12.7%), due mainly to an

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

45

Management’s Discussion and Analysisof Financial Condition and Results of Operations
increase in depreciation that accompanied TIBC’s capital

Income Taxes

investment to augment production capacity of high-Net of current and deferred income taxes was ¥20.8 billion, an

performance plastic package substrates.

increase of ¥1.1 billion (5.6%) over fiscal 2002. The effective

ST Liquid Crystal Display Corp. (“ST-LCD”) is notconsolidated but is accounted for by the equity method inincome tax rate increased from 41.2% to 47.7%, due largely to
an increase in equity in loss of affiliates.

Toyota Industries’ consolidated financial results. Consequently,
its operating income (loss) is not included in the operating

Minority Interest in Consolidated Subsidiaries

income (loss) for this segment. However, ST-LCD, a joint

Minority interest in consolidated subsidiaries increased ¥0.1

venture that we established with Sony Corporation in 1997, isbillion to ¥0.9 billion over fiscal 2002, due mainly to an increase

considered as another core business within this segment.

in earnings of consolidated subsidiaries. As a result, net income

ST-LCD manufactures low-temperature polysilicon TFT-LCDs,

for fiscal 2003 decreased by the same amount.

for which demand is expected to increase substantially for theforeseeable future. Though ST-LCD’s sales increased, its

Net Income

operating loss worsened as a result of an increase in

Net income for fiscal 2003 was ¥21.9 billion, a decrease of ¥5.4

depreciation that accompanied the second capital investment.

billion (19.7%) from fiscal 2002. Return on sales (ROS)

Its performance is expected to improve significantly due to adecreased from 2.8% to 2.1%. Return on equity (ROE), using

projected increase in sales of its displays for mobile phones,

the average at fiscal 2002 and fiscal 2003 year-ends, decreased

digital still cameras and personal digital assistants.

from 3.0% to 2.7%. Net income per share decreased from¥87.28 to ¥70.19, and diluted net income per share decreased

Non-Operating Income and Expenses

from ¥78.26 to ¥62.90.

Non-operating income for fiscal 2003 increased ¥3.2 billion(13.9%) over fiscal 2002 to ¥26.3 billion. Dividends income
increased ¥1.2 billion. Proceeds from sales of marketablesecurities also increased.
Non-operating expenses increased ¥5.9 billion (27.1%) to

Net Income, ROE and ROS(¥ Billion)

(%)

30

6

20

4

10

2

¥27.4 billion. Equity in net loss of affiliates increased ¥3.7
billion.

Ordinary Income
Due to the factors summarized above, ordinary income
increased ¥3.5 billion (7.3%) over fiscal 2002 to ¥51.4 billion.

Extraordinary Losses
As a result of depressed stock prices in Japan, a revalued loss ofinvestment securities in financial institutions was posted as an
extraordinary loss in the amount of ¥4.3 billion. A loss on
disposal of property, plant and equipment amounted to ¥3.4
billion, which resulted from the relocation of a plant.

Income before Income Taxes
Due to the factors summarized above, income before income
taxes decreased ¥4.2 billion (8.8%) from fiscal 2002 to ¥43.7
billion.

46

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

0
FY

0

99

00

Net income (left)
ROE (right)
ROS (right)

01

02

03

Net Income per Share

The first category, the Vehicle Business and the Engine
Business, handles mainly the production of vehicles consigned(¥)

by TMC and production of engines for TOYOTA cars. To play a100

more important role in the Toyota Group, Toyota Industries ismaking continual efforts to improve its production

80

technologies and strengthen quality control. For Toyota
Industries, this field of business provides a stable platform for60

its own growth, while also contributing to the success of the
Toyota Group.

40

Aiming to play a more important role in the development
and production of TOYOTA cars and engines, Toyota Industries

20

will step up its efforts to strengthen its research and
0
FY

99

00

01

02

03

development capability and improve productivity. In its workin this category for TMC, Toyota Industries will also make

Basic
Dilutedproposals for the design and launch of auto parts and smallcars, and actively work to ensure that such proposals are
adopted. In the Engine Business, Toyota Industries will

Strategies and Projections

contribute to TMC’s global strategy, especially in Europe, withits diesel engines.

Business Strategies

The second category, which comprises the Car Air-

Since its establishment as a textile machinery manufacturer

Conditioning Compressor Business, the Materials Handlingover 75 years ago, Toyota Industries has expanded the scope of

Equipment Business and the Textile Machinery Business, is

its specific characteristics. The operational strategies for theseidentified as a business field in which Toyota Industries must

categories are based on the mission assigned to each

cultivate further development of global markets by precisely

category.

grasping customers’ needs, and developing and marketingstate-of-the-art products that meet these needs through theFirst Category: Vehicle Business and Engine Businessapplication of original technologies. Firmly believing that<Mission>technological improvement is the key to competitiveness,

As a member of the Toyota Group, to contribute to the highToyota Industries strives to strengthen its technologicalquality and technological advances of TOYOTA cars.

development capabilities by fostering the training anddevelopment of superior engineers. Since the Car Air-

Second Category: Car Air-Conditioning Compressor Business,

Conditioning Compressor Business and the Materials Handling

Materials Handling Equipment Business and Textile Machinery

Equipment Business are positioned as core businesses, Toyota

Business

Industries places a priority on them in its allocation of<Mission>management resources. In addition, on April 1, 2001, Toyota

To aggressively expand global markets through theIndustries established TOYOTA Material Handling Company as

development of products using Toyota Industries’ uniquea uniquely independent company within Toyota Industries. The

technologies.

main purpose of this move was to strengthen independent
management in the unit by giving it the authority needed toThird Category: Electronics Business, Logistics Solutions

respond flexibly and speedily to changes in the businessBusiness, etc.

environment and to emerge a winner in the face of<Mission>

intensifying global competition.

To be a key source of Toyota Industries’ future growth.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

47

Management’s Discussion and Analysisof Financial Condition and Results of Operations
The third category, the Electronics Business, which includes

In June 2003, Toyota Industries Finance International AB

the production of LCDs, and the Logistics Solutions Business,(“TIFI”), our newly established finance subsidiary in Sweden,

will also be made a priority in Toyota Industries’ allocation ofassumed fund-raising operations for all of our overseas

management resources in order to develop this activity into a

subsidiaries and began centrally managing the funds of ourcore business.

European subsidiaries. TIFI draws on the expertise and

The Electronics Business is a field characterized by rapid

resources of BT Industries (part of the Toyota Industries Groupadvances in technological innovation. Toyota Industries

since June 2000), which has been conducting integrated fundrecognizes that it must strengthen its research andmanagement of its approximately 80 subsidiaries and affiliates

development capability to maintain competitiveness in thisover many years. The establishment of TIFI is aimed atfield. Continuing capital expenditures will be required to doachieving greater benefits of synergy by expanding the scopethis. Swift decision-making is also required for success in thisof subsidiaries for integrated fund management.

business, which depends on rapidly getting production on

Also in June 2003, the Company commenced integrated

track, improving the rejection rate of products and achieving afund management of its domestic subsidiaries. In North

return on investment. Aiming to participate in the Electronics

America, Toyota Industries North America, Inc. (“TINA”) has

Business and expand operations in the short term, and to

centrally managed the funds of our North American

diversify risks by entering new areas of this business, Toyota

subsidiaries for some time.

Industries has not only carried out independent productThrough close cooperation among the Company, TINA anddevelopment, but has also entered into joint ventures with

TIFI, it is now possible to realize unified fund management

both Sony Corporation and Ibiden Co., Ltd. Toyota Industries

covering Japan, North America and Europe for efficient fundbelieves that this strategy has been successful to date andand corporate management on a global, consolidated basis.

views the Electronics Business as a key source of future

Capital and Business Collaboration

corporate growth.
In recent years, Japan’s industries have been increasingly

On April 25, 2002, the Board of Directors of both Toyota

moving toward outsourcing product distribution and storage

Industries and Aichi Corporation (“Aichi”) voted to conclude afunctions in order to reduce materials handling costs. Seeing

comprehensive agreement on capital and businessthis as an opportunity, Toyota Industries entered into thecollaboration between the two companies. Aichi is an

Logistics Solutions Business in Japan. Taking advantage of ourestablished manufacturer of special-purpose vehicles such as

long-accumulated materials handling know-how, we aim toaerial lift equipment for construction works. Through thisprovide customer-oriented proposals for optimized logistics

collaboration, both companies will be able to offer productand cost reduction. Through proactive allocation oflineups that best exploit the strengths of each company.

management resources, we hope our Logistics Solutions

Toyota Industries will concentrate on the manufacture ofBusiness will become a new source of stable revenues for thematerials handling equipment such as forklift trucks, while

Company.

Aichi will specialize in special-purpose vehicles.
On May 14, 2002, Aichi issued and allocated 20,056,000

Global Fund Management

shares of common stock to Toyota Industries. This amounted to

To achieve more efficient fund utilization, Toyota Industries

34% of Aichi’s total shares issued, for which we paid ¥3.2

Group is pushing ahead with localized fund management bybillion. We also obtained a warrant that would raise ourregion. We are spreading risk by switching to more secure

holding to a 51% controlling stake.

credit and establishing deposit limits in accordance with bankcredit ratings.

48

TOYOTA INDUSTRIES CORPORATIONIn May 2003, we exercised the warrant, incorporating Aichi
into our network of subsidiaries.

ANNUAL REPORT 2003

Forecast for Fiscal 2004

In fiscal 2003, the Company repurchased 20 million of its

Amid the current deflationary trend, Toyota Industries

common shares at a total purchase cost of ¥35.2 billion. As aanticipates a package of government-led economic recovery

result, the Company now holds 20.55 million shares of its

measures will be implemented to positive effect; however,treasury stock. Its total outstanding common shares at year-

falling global stock prices and continuing uncertainties

end were 292,777 thousand shares (excluding treasury stock).

regarding employment and the U.S. economy will likely resultin a rather sluggish business environment overall.

On June 27, 2003, the Ordinary General Meeting of
Shareholders adopted a resolution to authorize the Company

For fiscal 2004, ending March 31, 2004, Toyota Industries

to repurchase an additional 20 million shares at a total priceforecasts consolidated net sales of ¥1,100.0 billion, ordinary

not exceeding ¥45.0 billion. This will allow the Company toincome of ¥57.0 billion and net income of ¥34.0 billion. We are

obtain more shares in accordance with changes in thedetermined to develop new products that are of high quality

business environment.

and responsive to customer needs, as well as enhance sales,
service and cost-reduction activities company-wide.
Our projections are based on an exchange rate of¥115.0=US$1.

Toyota Industries’ Relationship to
Toyota Motor Corporation (“TMC”)
Because of its historical background, Toyota Industries has aclose relationship with TMC and Toyota Group companies in

Dividend Policy

terms of capital investment and business dealings.

Toyota Industries Corporation’s dividend policy is to continue

In 1933, Kiichiro Toyoda, eldest son of founder Sakichi

paying stable dividends, while giving overall consideration to

Toyoda and Managing Director of Toyota Industries (thenbusiness results and the dividends payout ratio, in order to

Toyoda Automatic Loom Works, Ltd.) at the time, establishedmeet the expectations of shareholders.

the Automobile Division within the Company. In 1937, theToyota Industries’ Ordinary General Meeting ofAutomobile Division was spun off and became an

Shareholders, held on June 27, 2003, approved a year-end cash

independent company, Toyota Motor Co., Ltd. (the present

dividend of ¥12.0 per share. Including the interim cash

Toyota Motor Corporation).

dividend of ¥10.0 per share, cash dividends for the year totaled

As of March 31, 2003, Toyota Industries holds 5.4% (196,725¥22.0 per share, an increase of ¥3.0 per share over fiscal 2002.

thousand shares) of TMC’s total shares issued. As of the same

The dividend payout ratio increased from 23.8% to 34.0%.

date, TMC holds 24.7% (72,316 thousand shares) of total voting

Toyota Industries Corporation will use retained earnings to
improve the competitiveness of its products, augment
production capacity in Japan and overseas, as well as expand

rights. Toyota Industries is one of TMC’s affiliates accounted forby the equity method.
TMC assigns the assembly of certain cars and theinto new fields of business and strengthen its corporate

production of automobile engines to us. We also directly or

constitution in securing future profits for its shareholders. It

indirectly manufacture and sell other automobile components

will also use retained earnings to repurchase treasury stock.

to TMC. In fiscal 2003, our net sales to Toyota Group companies
accounted for approximately 56% of consolidated net sales.

Stock Repurchase Program

As a member of the Toyota Group, we intend to enhance

On June 27, 2002, the Ordinary General Meeting of

the competitiveness of TMC and other Toyota Group

Shareholders resolved to authorize the Board of Directors ofcompanies by contributing in such areas as quality, cost,

Toyota Industries Corporation to repurchase up to 20 million ofdelivery and technology. We believe that this will be reflected

the Company’s common shares. This allows the Company toin increases in sales and profits for the Toyota Group, thus

implement flexible capital policies in accordance with theincreasing the shareholder value of Toyota Industries.

business environment.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

49

Consolidated Balance Sheets
Toyota Industries Corporation
As of March 31, 2003 and 2002

Thousands of
U.S. dollars (Note 1)

Millions of yen

ASSETS

2003

2002

2003

Current assets:
Cash and cash equivalents (Note 4)¥ 136,929

Trade notes and accounts receivable (Note 8)
Short-term investments (Note 5)

71,120$ 1,139,176

119,048¥

107,821990,416

3,692

7,979

30,715Inventories (Note 6)

69,141

70,511

575,216

Deferred tax assets (Note 15)

14,072

10,081

117,072

Other current assets

30,92529,731

257,280

Less — allowance for doubtful accounts(1,999)(1,917)(16,631)371,808

295,326

3,093,244

Buildings and structures (Note 8)

118,449

102,659

985,433

Machinery, equipment and vehicles (Notes 8 and 16)

157,733

149,259

1,312,254

Tools, furniture and fixtures (Note 16)

16,007

15,483

133,170

Land (Note 8)

56,25546,550468,012Construction in progress

13,74923,692

114,384

Total property, plant and equipment

362,193

337,643

3,013,253

Total current assets
Fixed assets:
Property, plant and equipment:

Intangible assets:
Software

9,195

6,347

76,498Goodwill

87,57888,528728,602

Total intangible assets

96,773

94,875805,100

Investments in securities (Notes 5 and 8)

745,909968,604

6,205,566

Unconsolidated subsidiaries and affiliated companies

16,431

17,751

136,697

Long-term loans

10,522

11,53387,537Long-term prepaid expenses

15,082

11,927

125,474

Investments and other assets:

Deferred tax assets (Note 15)

2,863

2,237

23,819Other investments and other assets (Note 14)

29,05730,621

241,739

(247)

(116)

(2,055)

819,617

1,042,557

6,818,777

1,278,583

1,475,075

10,637,130¥1,650,391¥1,770,401$13,730,374

Less — allowance for doubtful accounts

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

50

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

Thousands of
U.S. dollars (Note 1)

Millions of yen

LIABILITIES AND SHAREHOLDERS’ EQUITY

2003

2002

2003

Current liabilities:¥ 117,424¥ 111,251

Short-term bank loans (Note 8)

Trade notes and accounts payable

78,05333,371$

976,905
649,359

Current portion of bounds

20,000–166,389

Current portion of convertible bonds

75,692–629,717

Other payables

17,406

21,662

144,809

Accrued expenses

42,02736,327

349,642

Accrued income taxes

14,144

8,611

117,671

Deposits received from employees

19,234

18,548160,017

Deferred tax liabilities (Note 15)

1,192

494

9,917

Other current liabilities (Note 8)

8,193

6,375

68,161

393,365

236,639

3,272,587

200,300

140,300

1,666,389–

75,742–Long-term debt (Notes 7 and 8)

36,57765,941

304,301

Deferred tax liabilities (Note 15)

212,355

315,978

1,766,681

Allowance for retirement benefits (Note 14)

34,10028,840283,694

Other long-term liabilities

10,833

9,293

90,125

Total long-term liabilities

494,165

636,094

4,111,190

Total liabilities

887,530

872,733

7,383,777

Minority interest in consolidated subsidiaries

23,99318,856

199,609

68,04768,022566,115

Capital surplus

89,36589,327

743,469

Retained earnings

269,381

253,975

2,241,106

Total current liabilities
Long-term liabilities:
Bonds
Convertible bonds

Shareholders’ equity (Note 10):
Common stock:
Authorized — 1,091,245,000 shares
Issued— 313,324,451 shares in 2003 and 313,299,249 shares in 2002

Net unrealized gains on other securities

331,668

456,415

2,759,301

Foreign currency translation adjustments

16,89012,361

140,516

Treasury stock at cost — 20,547,253 shares in 2003 and 503,091 shares in 2002

(36,483)(1,288)(303,519)

738,868

878,812

6,146,988¥1,650,391¥1,770,401$13,730,374

Total shareholders’ equity
Total liabilities and shareholders’ equity

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

51

Consolidated Statements of Income
Toyota Industries Corporation
For the years ended March 31, 2003, 2002 and 2001

Thousands of
U.S. dollars (Note 1)

Millions of yen

2003

2002

2001

2003

¥1,069,219¥980,163¥767,383$8,895,333

Cost of sales (Note 11)899,702828,626

663,013

7,485,042

Gross profit

169,517

151,537

104,370

1,410,291

117,039

105,207

57,066

973,70252,47846,33047,304

436,589

8,985

8,618

4,242

74,750Net sales

Selling, general and administrative expenses (Note 11)
Operating income
Non-operating income:Interest income
Dividends income

8,888

7,726

6,957

73,944

Other non-operating income (Note 12)

8,461

6,779

5,050

70,391

10,522

10,844

6,446

87,537and affiliated companies

4,634

928

973

38,552Other non-operating expenses (Note 12)12,281

9,815

11,609102,172

51,37547,86644,525427,413––

15,080–––19,056–for directors and corporate auditors

–

–

2,329

–

Revalued loss of investment securities

4,298

–

–

35,757due to relocation of the factory

3,407

–

–

28,345

Income before income taxes

43,67047,86638,220363,311

Income taxes — current (Note 15)

28,121

20,843

21,161

233,952

Income taxes — deferred (Note 15)(7,304)(1,136)(6,338)(60,765)

919

848

760

7,645

21,934¥ 27,311¥ 22,637$ 182,479

Non-operating expenses:
Interest expenses
Equity in net loss of unconsolidated subsidiaries

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

Loss on disposal of property, plant and equipment

Minority interest in consolidated subsidiaries
Net income¥

Yen

Net income per share — basic¥70.19¥87.28¥75.90$0.58

Net income per share — diluted

62.90

78.26

67.77

0.52

Cash dividends per share

22.00

19.00

17.00

0.18

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

52

U.S. dollars

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

Consolidated Statements of Shareholders’ Equity
Toyota Industries Corporation
For the years ended March 31, 2003, 2002 and 2001

Millions of yen

Numberof shares(Thousands)

Commonstock

CapitalsurplusRetainedearnings

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

283,296–––
30,000¥ 40,178–––
27,841¥ 60,673–––
27,840¥ 215,463
22,637(4,533)
(199)
–

–

–

–

–

558,673

–

–

–

–

–

–

–

2,746

–

Balance at March 31, 2001

313,296

68,01988,513

233,368

558,673

2,746

(21)

–
–
–
–
–
3
–
–

–
–
–
–
–
3
–
–

–
–
–
–
–
3
–
811

27,311(5,635)
(258)
–
–
–
–
(811)

–
–
–
(102,258)
–
–
–
–

–
–
–
–
9,615
–
–
–

–
–
–
–
–
–
(1,267)–313,299

68,02289,327

253,975

456,415

12,361(1,288)

–
–
–
–
–
25
–
–

–
–
–
–
–
25
–
–

–
–
–
–
–
25
–
13

21,934(6,246)
(282)
–
–
–
–
–

–
–
–
(124,747)
–
–
–
–

–
–
–
–
4,529
–
–
–

–
–
–
–
–
–
(35,195)–

313,324¥68,047¥89,365¥269,381¥331,668¥16,890¥(36,483)

Net income
Cash dividends
Bonuses to directors and corporate auditors
Net unrealized gains on other securities
Foreign currency translation adjustments
Conversions of convertible bonds
Treasury stock at cost
Transfer due to merger of a subsidiary
Balance at March 31, 2002
Net income
Cash dividends
Bonuses to directors and corporate auditors
Net unrealized gains on other securities
Foreign currency translation adjustments
Conversions of convertible bonds
Treasury stock at cost
Gain on disposal of treasury stock
Balance at March 31, 2003

Net unrealized
gains on other Translation
securities
adjustments

¥

–
–
–
–
–

¥

–
–
–
–
–

Treasurystock
at cost

¥

(21)
–
–
–
–

Thousands of U.S. dollars (Note 1)

Commonstock

CapitalsurplusRetainedearnings

Net unrealized
gains on other Translation
securities
adjustments

Treasurystock
at costBalance at March 31, 2002
Net income
Cash dividends
Bonuses to directors and corporate auditors
Net unrealized gains on other securities
Foreign currency translation adjustments
Conversions of convertible bonds
Treasury stock at cost
Gain on disposal of treasury stock$ 565,907 $ 743,153
–
–
–
–
–
–
–
–
–
–
208
208
–
–
–
108

$ 2,112,936 $ 3,797,130 $ 102,837 $ (10,715)
182,479–––(51,963)–––(2,346)–––– (1,037,829)––––
37,679
–
–
–
–
–
–
–
– (292,804)––––

Balance at March 31, 2003

$566,115 $743,469$2,241,106 $ 2,759,301 $140,516 $(303,519)

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

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

53

Consolidated Statements of Cash Flows
Toyota Industries Corporation
For the years ended March 31, 2003, 2002 and 2001

Thousands of
U.S. dollars (Note 1)

Millions of yen

2003

2002

2001

¥ 43,670¥ 47,866¥ 38,220$ 363,311

59,154220(17,874)
10,522
4,634(7,406)
1,253
5,431
20,41655,174
251(16,343)
10,844928
8,081(1,371)(3,403)(174)

46,454(129)(11,199)6,446
973(2,450)(3,922)
8,178
8,914

492,130
1,830(148,702)
87,53738,552(61,614)
10,42445,183
169,851

SubtotalInterest and dividends income received
Interest expenses paid
Income taxes paid

120,020
17,983(10,945)(23,875)

101,853
16,372(10,907)(26,240)

91,485
11,212(6,155)(18,129)

998,502
149,609(91,057)(198,627)

Net cash provided by operating activities

103,183

81,07878,413

858,427(1,664)
8,447(86,703)749(21,896)
9,792(5,884)
4,213(73,606)
2,617(21,121)
4,033(1,719)4,323(55,127)
2,384(9,667)
2,107(13,844)
70,275(721,323)
6,231(182,163)
81,464944(1,664)
2,931–(6,057)(705)(3,139)2,575(23,719)
8,025(86,137)(3,411)
11,266–(19,890)7,854(13,844)
24,384–(50,390)(95,121)(106,711)(155,871)(791,356)

5,886
–
–
21,797(9,808)79,690–(35,195)(6,244)
(195)
1,845

1,062
–
–––––
8,048
(2,755)––(1,389)(5,634)
(614)
2,507

6,884
80,000(80,000)
4,111(6,586)
39,79755,229–(4,533)(420)(10)

48,968––181,340(81,597)
662,978–(292,804)(51,947)(1,622)
15,34957,776

1,225

94,472

480,665

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
Increase (decrease) in allowance for doubtful accounts
Interest and dividends income
Interest expenses
Equity in net loss of affiliates(Increase) decrease in receivables
Decrease (increase) in inventories
Increase (decrease) in payables
Others, net

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 sales 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
Net cash used in investing activities
Increase in short-term bank loans, net
Proceeds from issuance of commercial paper
Redemption of commercial paper
Proceeds from long-term bank loans
Repayments of long-term bank loans
Proceeds from issuances of bonds
Proceeds from issuances of common stock
Payments for repurchase of treasury stock
Cash dividends paid
Cash dividends paid for minority shareholders
Others, net
Net cash provided by financing activities
Translation adjustments of cash and cash equivalents

(29)

231

951

(241)

Net increase (decrease) in cash and cash equivalents

65,809(24,177)

17,965547,495

Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
The accompanying notes are an integral part of these financial statements.

54

2003

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

71,12095,297

77,332591,681¥136,929¥ 71,120¥ 95,297$1,139,176

Notes to Consolidated Financial Statements
1. Basis of presenting consolidated financial statements
The accompanying consolidated financial statements havebeen prepared based on the accounts maintained by Toyota
Industries Corporation (the “Company”) and its consolidated
subsidiaries (together, hereinafter referred to as “Toyota
Industries”) in accordance with the provisions set forth in theCommercial Code of Japan and the Securities and Exchange
Law, and in conformity with accounting principles andpractices generally accepted in Japan, which are different incertain respects from the application 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 ¥120.20 =US $1, the approximate rate of exchange prevailing at March
31, 2003, has been used in translation. The inclusion of suchamounts are not intended to imply that the Japanese yen
actually represent, or have been or could be converted into,
equivalent amounts in U.S. dollars at this rate or any other rates.

2. Summary of significant accounting policies(1) Consolidation
The consolidated financial statements include the accounts of
the Company and its 118 subsidiaries (33 domestic subsidiaries
and 85 overseas subsidiaries, which are listed on page 98 and99) in 2003, 111 subsidiaries (26 domestic subsidiaries and 85
overseas subsidiaries) in 2002 and 100 subsidiaries (22domestic subsidiaries and 78 overseas subsidiaries) in 2001.
For the year ended March 31, 2003, eight subsidiaries were
newly added to the scope of consolidation and one company
was excluded from the scope of consolidation. Since two
subsidiaries out of eight subsidiaries are deemed as being
acquired by the Company as of the semi-annual period end
and as of October 1, 2002, respectively, the results ofoperations of the latter half of the year of those subsidiaries
are consolidated in the consolidated financial statements. Two
subsidiaries are excluded from the scope of consolidation due
to temporary investments.
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 fivesubsidiaries out of 15 subsidiaries were deemed as being
acquired by the Company as of the semi-annual period end,
the results of operations of the latter half of the year of thosesubsidiaries were consolidated in the consolidated financial

statements. One subsidiary was excluded from the scope of
consolidation due to temporary investments.
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 out of 72
subsidiaries were deemed as being acquired by the Company
as of the semi-annual period end, the results of operations of
the latter half of the year of those subsidiaries wereconsolidated in the consolidated financial statements. Two
subsidiaries were excluded from the scope of consolidation
due to temporary investments.
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 two unconsolidated subsidiaries and 16 majoraffiliates in 2003, one unconsolidated subsidiary and 18 majoraffiliates in 2002 and two unconsolidated subsidiaries and 17
major affiliates in 2001 are accounted for by the equity
method of accounting. Investments in unconsolidated

subsidiaries and affiliates not accounted for by the equity
method are stated at cost due to their insignificant effect on
the consolidated financial statements.
The major affiliates accounted for by the equity method arelisted on page 99.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

55

(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
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 did
not have trading securities or held-to-maturity securities as ofMarch 31, 2003 and 2002.
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.

(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 are capitalized at cost.
Repair and maintenance are charged to income as incurred.

Accumulated depreciation as of March 31, 2003 and 2002
was ¥465,151 million (US$3,869,809 thousand) and ¥447,600
million, respectively.
Estimated useful lives are mainly as follows:
Building and structures ................................ 5 – 50 years
Machinery, equipment and vehicles............... 3 – 22
Tools, furniture and fixtures........................... 2 – 20(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.
Accumulated amortization of intangibles and goodwill as ofMarch 31, 2003 and 2002 was ¥23,579 million (US$196,165
thousand) and ¥16,185 million, respectively.

(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 individually

56

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

uncollectible 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
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 theretirement benefits for directors and corporate auditors, anamount which is required at the end of the year 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 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 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
Mainly the deferral method of hedge accounting is applied. In
the case of foreign currency forward contracts and foreign
currency option contracts, the hedged items are translated atcontracted forward rates if certain conditions are met.
(b) Hedging instruments and hedged items
Hedging instruments: derivatives instruments (interest rate
swaps, foreign currency forwards andforeign currency option contracts)
Hedged items:
risk of change in interest rate on
borrowings and risk of change inforward exchange rate on transactions
denominated in foreign currencies(assets and liabilities, and forecasted
transactions)(c) Hedging policy
Hedging transactions are executed and controlled based on

Toyota Industries’ internal 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 toincome for the year.

(16) Income taxes
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.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

57

(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. The change in accounting
policy is described in Note 3.

(18) Reclassification
Certain prior year amounts have been reclassified to conformto the 2003 presentation. These changes had no impact onpreviously reported results of operation or cash flows orshareholders’ equity.

3. Changes in accounting policies and adoption of new accounting standards(1) For the year ended March 31, 2003
Accounting standard for earnings per share
Effective beginning the year ended March 31, 2003, Financial
Accounting Standard No. 2 “Accounting Standard for Earnings
Per Share” and Financial Accounting Standards
Implementation Guidance No. 4 “Implementation Guidance for

Accounting Standards for Earnings Per Share” issued by the
Accounting Standards Board of Japan have been applied. The
impact of adoption for new accounting standards is describedin “20. Net income per share” below.

(2) 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.

58

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003(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 owned. 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, have 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.

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

Current assets¥11,912

Fixed assets

14,957

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

24,533

Less: cash and cash equivalents(814)

Cash payment for the acquisition¥23,719(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 2003

59

5. Marketable securities(1) As of and for the year ended March 31, 2003(a) Other securities with readily determinable fair value as of March 31, 2003 are as follows:
Thousands of U.S. dollars

Millions of yen

Acquisition
cost

Carrying
amountDifference

Acquisition
cost

Carrying
amount¥159,155¥713,979¥554,824$1,324,085 $5,939,925 $4,615,840

703

703

0

5,849

5,849

0

430

472

42

3,577

3,927

350

160,288715,154554,866

1,333,511

5,949,701

4,616,190

17,963

14,341(3,622)

149,443

119,310(30,133)

Government and municipal bonds, etc.

20,00020,000(0)

166,389

166,389(0)

Corporate bonds

2,002

2,002

(0)

16,656

16,656(0)

Difference

Securities with carrying amountexceeding acquisition cost:
Stocks
Bonds
Corporate bonds
Other
Subtotal
Securities with carrying amountnot exceeding acquisition cost:
Stocks
Bonds

Other bonds
Subtotal
Total

3

3

–

24

24

–

39,96836,346(3,622)

332,512302,379(30,133)¥200,256¥751,500¥551,244

In this year, Toyota Industries recorded ¥3,671 million(US$30,541 thousand) of impairment on an equity security$1,666,023 $6,252,080 $4,586,057

included in securities with carrying amount not exceeding thecost lines.

(b) Other securities sold during the year ended March 31, 2003 are as follows:
Millions of yen

Proceeds

Realized gains¥9,762¥1,558

Thousands of U.S. dollars

Realized losses¥5

Proceeds

Realized gains

Realized losses$81,215$12,962$42(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, 2003 are as follows:
Carrying amountMillions of yen

Held-to-maturity securities¥–

Thousands of
U.S. dollars$–

Other securities

60

Domestic unlisted stocks excluding over-the-counter stocks

17,117

142,404

Money management funds

30,073

250,191

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

(d) Redemption schedule of securities which have maturities within other securities as of March 31, 2003 is as follows:
Millions of yen

Within1 yearThousands of U.S. dollars

Over 1 year
within5 years

Over 5 years
within
10 yearsOver
10 yearsWithin1 yearOver 1 year
within5 years

Over 5 years
within
10 yearsOver
10 years

Bonds
Government bonds¥ 20,000

¥0

¥–

¥–

$166,389

$0

$–

$–

Corporate bonds

2,705

–

–

–

22,504

–

–

–

3

–

–

–

25

–

–

–

¥ 22,708

¥0

¥–

¥–

$188,918

$0

$–

$–

Other bonds
Total(2) 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:
Millions of yen

Acquisition
cost

Carrying
amountDifference

Securities with carrying amount exceeding acquisition cost:
Stocks¥160,158¥941,875¥781,717

Bonds
Corporate bonds
Subtotal

2,999

3,000

1

163,157

944,875

781,718

15,324

10,014(5,310)

0

0

–

7,093

7,090

(3)

Securities with carrying amount not exceeding acquisition cost:
Stocks
Bonds
Government and municipal bonds, etc.
Corporate bonds
Other bonds
SubtotalTotal
In this year, Toyota Industries recorded ¥302 million of
impairment on an equity security included in securities with

3

3

–

22,42017,107(5,313)¥185,577¥961,982¥776,405

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

Realized gains

Realized losses

¥242

¥11

¥17,967(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:
Millions of yen

Held-to-maturity securities¥–

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

14,996

Money management funds

20,440Foreign unlisted bonds

7

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

61

(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 yearOver 5 years
within
10 yearsOver
10 years

Bonds
Government bonds¥

Corporate bonds
Other bonds
Total

0

¥–

¥–

8,379

–

¥

1,711

–

–

2

7

–

–

¥8,381¥1,718¥–¥–

6. Inventories
Inventories as of March 31, 2003 and 2002 consist of the following:Thousands of
U.S. dollars

Millions of yen

2003

2002

2003

Finished goods¥28,524¥27,490$237,304

Raw materials

10,284

11,73385,557Work in process

22,95625,193

190,982

Supplies

7,377

6,095

61,373¥69,141¥70,511$575,216

Total

62

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

7. Long-term debt
(1) Long-term debt as of March 31, 2003 and 2002 consists of the following:Thousands of
U.S. dollars

Millions of yen

2003

2002

2003

¥ 75,692¥ 75,742$ 629,717

2.70% bonds due 2008 without collateral

30,00030,000249,584

1.50% bonds due 2003 without collateral

20,00020,000166,389

2.15% bonds due 2008 without collateral

20,00020,000166,389

1.50% bonds due 2006 without collateral

15,00015,000124,792

1.94% bonds due 2009 without collateral

15,00015,000124,792

1.25% bonds due 2005 without collateral

20,00020,000166,389

1.91% bonds due 2010 without collateral

20,00020,000166,389

0.41% bonds due 2007 without collateral

30,000–249,584

1.13% bonds due 2012 without collateral

50,000–415,974

The Company:
0.35% convertible bonds due 2003 without collateral

Consolidated subsidiaries:
1.80% bonds due 2005

300

300

2,496

Long-term bank loans

39,90467,899331,980(99,019)(1,958)(823,785)¥236,877¥281,983$1,970,690

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 (US$16.50) per share as ofMarch 31, 2003. The aggregate number of shares issuable upon
conversion thereof at such conversion price was 38,153
thousand shares.

(2) Annual maturities of long-term debt as of March 31, 2003 are as follows:Year ending March 31

2004

Millions of yen

Thousands of
U.S. dollars¥ 99,019$ 823,785

2005

7,810

64,975

2006

22,935

190,8072007

16,058

133,594

2008

61,682

513,161

2009 and thereafter

128,392

1,068,153

Total¥335,896$2,794,475

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

63

8. Assets pledged as collateral(1) Assets pledged as collateral as of March 31, 2003 and 2002 are as follows:
Thousands of
U.S. dollars

Millions of yen

2003

2002

2003

Investments in securities¥21,724¥21,854$180,732

Buildings and structures

3,713

4,213

30,890

Land

5,340

3,715

44,426

Machinery, equipment and vehicles

–

734

–

Trade notes and accounts receivable

519

449

4,318

Other

29

29

241

Total

¥31,325¥30,994$260,607(2) Secured liabilities as of March 31, 2003 and 2002 are as follows:
Thousands of
U.S. dollars

Millions of yen

2003

2002

2003

Other current liabilities¥18,936¥18,468$157,537

Short-term bank loans

7,756

10,92364,526Long-term debt
Total

3,276

2,691

27,255¥29,968¥32,082$249,318

9. Contingent liabilities
Toyota Industries is contingently liable for guarantees as of March 31, 2003 and 2002 as follows:
Thousands of
U.S. dollars

Millions of yen

2003
Guarantees given by the Company

2002¥32,996

¥ 262

2003
$274,509

Guarantees given by consolidated subsidiaries

6,378

5,205

53,062

Guarantee forwards given by the Company

3,621

3,881

30,125

Guarantees given by consolidated subsidiaries consist of 467,278 and 421,480 thousand of Swedish krona.

10. 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 the sum of common stock and capital reserve. The legal
reserve may be used to reduce a 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 are accounted for as retained earnings.
Year-end cash dividend is approved at the Ordinary General
Meeting of Shareholders of the Company held after the close

64

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003of 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 theproceeds have been accounted for as common stock, in
accordance with the provisions of the Japanese Commercial
Code.

11. Research and development expenses
Research and development expenses, which are included inselling, general and administrative expenses andmanufacturing costs, amounted to ¥29,705 million(US$247,130 thousand), ¥29,985 million and ¥26,196 million
for the years ended March 31, 2003, 2002 and 2001,
respectively.

12. Other non-operating income and expenses
Thousands of
U.S. dollars

Millions of yen

2003

2002

2001

2003

¥ 1,851

¥ 242

¥

725

¥ 15,399

Rental income of fixed assets

2,036

2,214

1,475

16,939Exchange gain

1,709

2,324

453

14,218Other non-operating income:Gain on sales of marketable securities

Gain on sales of fixed assets

332

375

148

2,762

2,533

1,624

2,249

21,073¥ 8,461¥ 6,779¥ 5,050¥ 70,391¥¥¥

Sundries
Total
Other non-operating expenses:

–

¥ 302

Depreciation

Loss on impairment of securities

2,202

2,082

2,307

18,320Loss on disposal of fixed assets

3,101

1,941

2,996

25,799Exchange loss

1,224

557

525

10,183

Bond issue costs
Sundries
Total

430

–

329

19

227

2,737

5,425

4,914

5,124

45,133¥12,281¥ 9,815¥11,609¥102,172

13. Derivative instruments(1) Qualitative disclosure about derivatives(a) Contents of derivative instruments into which Toyota
Industries entered, policy with respect to entering into
derivative instruments, and purpose of using derivative
instruments:
Toyota Industries uses interest rate swap agreements to
reduce interest rate risks on borrowings. Toyota Industries
also uses foreign currency forward contracts and foreign
currency option contracts to hedge foreign currency risks
on transactions denominated in foreign currencies(receivables and payables, and forecasted transactions).
(b)Contents of risks related to derivative instruments:
Interest rate swaps, foreign currency forward contracts
and foreign currency option contracts into which Toyota

Industries entered have risks of fluctuations in interest
rates and in foreign currency exchange rates. Due to 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
based on Toyota Industries’ internal rule and Toyota
Industries’ hedging activities are reported periodicallyto 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.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

65

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, 2003, tax qualified pension plan
covers 50% of total plans. Also, the Company established an
employee retirement benefit trust.

(2) Components of allowance for retirement benefits as of March 31, 2003 and 2002 are as follows:
Thousands of
U.S. dollars

Millions of yen

2003

2002

2003

Benefit obligation¥ 95,904¥ 80,039$ 797,870

Plan assets(46,640)(49,105)(388,020)

Unfunded benefit obligation

49,26430,934

409,850

Unrecognized actuarial loss

(25,341)(9,581)(210,823)

Unrecognized loss in prior service obligation

(187)

–

(1,556)

Net amount recognized on the balance sheet

23,736

21,353

197,471

Prepaid pension expenses(7,626)(5,115)(63,444)¥ 31,362¥ 26,468$ 260,915

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 sheets includes ¥2,738 million(US$22,779 thousand) and ¥2,372 million of allowance forretirement and severance benefits for directors and corporate
auditors as of March 31, 2003 and 2002, respectively.

(3) Components of retirement benefit expenses for the years ended March 31, 2003, 2002 and 2001 are as follows:
Thousands of
U.S. dollars

Millions of yen

2001

2003

Service cost

2003
¥6,615¥6,018¥ 3,799$55,033

Interest cost

2,036

1,843

1,677

16,939

Expected return on plan assets

(797)

(704)

(637)

(6,631)

Amortization of prior service obligation

12

–

–

100

Amortization of unrecognized actuarial gain or loss

484

225

–

4,027

Amortization of transition obligation
Retirement benefit expenses
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

66

2002

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003––

19,057–¥8,350¥7,382¥23,896$69,468

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.

(4) Assumptions used for calculation of retirement benefits for the years ended March 31, 2003, 2002 and 2001 are as follows:
2003

2002

2001

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

2.0%

3.0%

3.0%

Expected return on plan assets

3.0%

3.0%

3.0%

6–11 years––

Amortization period of prior service obligation— Straight-line method
over the remaining
service period of
employees startingfrom following year

Amortization period of unrecognized actuarial gains or losses

20 years

20 years

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

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

67

15. Income taxes(1) The significant components of deferred tax assets and liabilities as of March 31, 2003 and 2002 are as follows:
Thousands of
U.S. dollars

Millions of yen

2003

2002

2003

Deferred tax assets:
Allowance for retirement benefits

¥

6,285

¥

4,090

$

52,288Trade receivables

5,122

3,282

42,612

Accrued expenses

4,644

3,272

38,636

Net operating loss carry-forwards for tax purposes

2,437

2,806

20,275

Depreciation

2,867

2,386

23,852

Securities

3,149

1,456

26,198Enterprise tax payable

1,124

709

9,351

Other

11,567

9,608

96,231

Subtotal

37,19527,609309,443

Less — valuation allowance(2,508)(2,382)(20,865)

34,68725,227

288,578

Total deferred tax assets
Deferred tax liabilities:
Other securities

219,413319,819

1,825,399

Depreciation

4,513

4,290

37,546

Land

2,650

1,138

22,047

Reserve for advanced depreciation

337

338

2,804

Reserve for special depreciation

549

290

4,567

3,837

3,506

31,922

Other
Total deferred tax liabilities

231,299

329,381

1,924,285

Net deferred tax liabilities¥(196,612)¥(304,154)$(1,635,707)

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

Millions of yen

Current assets — deferred tax assets

2002

2003

¥ 14,072¥ 10,081

Investments and other assets — deferred tax assets

2,863

2,237

23,819Current liabilities — deferred tax liabilities(1,192)(494)(9,917)Long-term liabilities — deferred tax liabilities(212,355)(315,978)(1,766,681)

Net deferred tax liabilities¥(196,612)¥(304,154)$(1,635,707)

In conjunction with promulgation of “The act that amends
part of local tax regulations that stipulate change of enterprisetax rate” (No. 9, 2003) on March 31, 2003, effective tax rate thatis used for calculation of deferred tax assets and liabilities as ofMarch 31, 2003, which will be realized on and after April 1,

68

2003

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003$

117,072

2004 has been changed from 41.2% to 39.8%. As a result, net
assets as of March 31, 2003 increased by ¥7,290 million and net
income for the year then ended decreased by ¥421 million,
respectively.

(2) Reconciliations of differences between the statutory rate of income taxes and the effective rate of income taxes for the years
ended March 31, 2003, 2002 and 2001 are as follows:
2003
Statutory rate of income taxes

2002

2001

41.2%

41.2%

41.2%

Equity in losses of affiliates

4.0

0.8

1.0

Net pre-tax losses of subsidiaries

1.2

0.6

1.4

Elimination of dividend income

0.8

0.7

0.9

Dividends income and others permanently not recognized as taxable income

(3.5)

(5.4)

(6.7)

Amortization of goodwill

3.1

4.1

–

Other

0.9

(0.8)

1.0

47.7%

41.2%

38.8%

Addition (reduction) in taxes resulting from:

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, 2003 and 2002 is as follows:
Thousands of
U.S. dollars

Millions of yen

2003

2002

2003

Machinery and equipment:
Acquisition cost equivalents¥8,258¥5,849$68,702

Accumulated depreciation equivalents

2,772

1,391

23,061

5,486

4,458

45,641

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

5,277

5,313

43,902

Accumulated depreciation equivalents

2,911

2,530

24,218Tools, furniture and fixtures net balance equivalents

2,366

2,783

19,684

Total net leased properties¥7,852¥7,241$65,325

Acquisition cost equivalents include the imputed interest
expense portion because the percentage which is computedby dividing future minimum lease payments by total balanceof property, plant and equipment at year-end is immaterial.

(b) Pro forma information regarding future minimum lease payments as of March 31, 2003 and 2002 is as follows:
Thousands of
U.S. dollars

Millions of yen

2003

2002

2003

Due within 1 year

¥2,274¥1,937$18,918

Due after 1 year

5,577

5,304

46,398

Total¥7,851¥7,241$65,316

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

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

69

(c) Total lease payments for the years ended March 31, 2003, 2002 and 2001 are as follows:
Millions of yen

Thousands of
U.S. dollars

2003¥2,566$21,348

2002

1,842

–

2001

1,505

–

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

zero residual value and leasing term to be useful lives for theyear ended 2003, 2002 and 2001, and are equivalent to theamount of total lease payments of the above.

(2) Operating leases (as a lessee)
Pro forma future lease payments under operating leases as of March 31, 2003 and 2002 are as follows:
Thousands of
U.S. dollars

Millions of yen

2003

2002

2003

Due within 1 year

¥ 2,878¥ 2,545$ 23,943

Due after 1 year

10,084

9,696

83,894

Total¥12,962¥12,241$ 107,837(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, 2003 and 2002 is as follows:
Thousands of
U.S. dollars

Millions of yen

2003

2002

2003

Machinery and equipment:
Acquisition cost

¥7,306¥6,975$60,782

Accumulated depreciation

4,284

4,005

35,641¥3,022¥2,970$25,141

Total net leased property(b) Pro forma information regarding future minimum lease income as of March 31, 2003 and 2002 is as follows:
Thousands of
U.S. dollars

Millions of yen

2003

2003

¥1,816¥1,658$15,108

Due after 1 year

2,657

2,966

22,105

Total¥4,473¥4,624$37,213

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

70

2002

Due within 1 year

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

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

(c) Total lease receipts and depreciation expenses for the years ended March 31, 2003 and 2002 are as follows:
Thousands of
U.S. dollars

Millions of yen

2003

2002

2003

Total lease payments to be received¥1,930¥2,220$16,057

Depreciation expenses

1,631

1,112

13,569(4) Operating leases (as a lessor)
Pro forma information regarding future minimum rentals under operating leases as of March 31, 2003 and 2002 is as follows:
Thousands of
U.S. dollars

Millions of yen

Due within 1 year
Due after 1 year
Total

2003

2002

2003

¥ 5,431¥ 4,525$ 45,183

9,320

7,147

77,538¥14,751¥11,672$122,721

17. Subsequent events
On May 15, 2003, the Company exercised a warrant issued by
Aichi Corporation on May 15, 2002. As a result, the Company
increased its share of Aichi Corporation by 17.0% to 51.0%,
making Aichi Corporation a subsidiary of the Company.
On June 27, 2003, the Ordinary General Meeting of
Shareholders of the Company authorized payment of a year-

end cash dividend to shareholders of record as of March 31,
2003 of ¥12 (US$0.100) per share, or a total of ¥3,513 million(US$29,226 thousand), and bonuses to directors and corporate
auditors of ¥224 million (US$1,864 thousand). Cash dividends
for the year totaled ¥22 (US$0.183) per share, including a semiannual dividend of ¥10 (US$0.083).

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

71

18. Segment information(1) Business segments
As of and for the years ended March 31, 2003, 2002 and 2001:
Thousands of
U.S. dollars

Millions of yen

2003

2002

2001

2003

¥ 595,460¥ 563,599¥457,631$4,953,910

Sales:
Automobile
Outside customer sales
Intersegment transactions

15,523

15,412

4,097

129,143

610,983

579,011

461,728

5,083,053

373,008

353,043

236,5023,103,228

Materials handling equipment
Outside customer sales
Intersegment transactions

90

44

–

749

373,098

353,087

236,5023,103,977

48,74030,70533,238405,491

Textile machinery
Outside customer sales
Intersegment transactions

6

50

–

50

48,74630,75533,238405,541

Outside customer sales

52,01132,81640,012432,704

Intersegment transactions

13,078

11,056

4,531

108,802

OthersSubtotal
Elimination of intersegment transactions
Total

65,08943,87244,543

541,506

1,097,916

1,006,725

776,011

9,134,077(28,697)(26,562)(8,628)(238,744)¥1,069,219¥ 980,163¥767,383$8,895,333

Operating costs and expenses:¥ 580,875¥ 550,051¥433,203$4,832,571

Materials handling equipment

Automobile

356,923

339,721

221,955

2,969,410

Textile machinery

46,43731,14633,203386,331

Others61,17739,39040,178508,960

Elimination of intersegment transactions(28,671)(26,475)(8,460)(238,528)¥1,016,741¥ 933,833¥720,079$8,458,744¥¥

28,960¥ 28,525$ 250,482

Total
Operating income (loss):
Automobile
Materials handling equipment

16,175

13,366

14,547

134,567

Textile machinery

2,309

(391)

35

19,210

Others

3,912

4,482

4,365

32,546

(26)

(87)

(168)

(216)

46,330¥ 47,304$ 436,589

Elimination of intersegment transactions
Total

72

30,108TOYOTA INDUSTRIES CORPORATION¥ANNUAL REPORT 2003

52,478¥

Thousands of
U.S. dollars

Millions of yen

2003

2002

2001

2003

¥ 328,370¥ 317,133¥ 282,504$ 2,731,863

Materials handling equipment

337,453

319,335

270,975

2,807,429

Textile machinery

30,922

22,32325,404257,255

Assets:Automobile

Others

51,83931,640

15,487431,273

Corporate assets or elimination

901,8071,079,970

1,275,272

7,502,554¥1,650,391¥1,770,401¥1,869,642$13,730,374

¥

¥

¥

$

Total
Depreciation and amortization:
Automobile

34,15733,40331,764284,168

Materials handling equipment

20,801

18,882

10,766173,053

Textile machinery

1,006

797

1,034

8,370

Others

3,487

2,307

3,071

29,010

Corporate or elimination of intersegment transactions

(297)

(215)

(181)

(2,471)

Total¥

59,154¥55,174¥46,454$492,130¥

49,380¥61,023¥54,734$

410,815

Capital expenditures:
Automobile
Materials handling equipment

24,35026,33770,673

202,579

Textile machinery

2,164

523

320

18,003

Others

12,068903

2,311

100,400

(403)

(466)

(765)

(3,353)88,320¥ 127,273

Corporate or elimination of intersegment transactions
Total

¥

87,559¥$728,444

Main products of each segment are as follows:
Automobile …………………………… Passenger vehicles, diesel and gasoline engines, car air-conditioning compressors
Materials handling equipment . . ……… Counterbalanced forklifts, 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 included in corporate assets or eliminationconsist mainly of cash and cash equivalents, short-term

investments and investments in securities held by theCompany.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 200373

(2) Geographical segments
As of and for the years ended March 31, 2003, 2002 and 2001:
Thousands of
U.S. dollars

Millions of yen

2003

2002

2001

2003

¥ 733,869¥ 675,346¥586,087$6,105,399

78,51861,097

31,770653,228

812,387

736,443

617,857

6,758,627

192,385

180,535

123,355

1,600,541

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

1,411

1,392

337

11,739193,796

181,927

123,692

1,612,280

139,515

121,036

55,826

1,160,691

EuropeOutside customer sales
Intersegment transactions

4,899

5,426

749

40,757

144,414

126,462

56,5751,201,448

Outside customer sales

3,450

3,246

2,115

28,702

Intersegment transactions

1,034

652

478

8,602

4,484

3,898

2,593

37,304

1,155,081(85,862)

1,048,730(68,567)

800,717(33,334)

9,609,659(714,326)¥1,069,219¥ 980,163¥767,383$8,895,333

OthersSubtotal
Elimination of intersegment transactions
Total
Operating costs and expenses:
Japan¥ 767,342¥ 695,442¥577,381$6,383,877

North America

187,596

177,442

118,422

1,560,699

Europe142,469

125,345

53,724

1,185,267

Others

4,560

4,011

2,841

37,936

Elimination of intersegment transactions
Total(85,226)(68,407)(32,289)(709,035)¥1,016,741¥ 933,833¥720,079$8,458,744¥¥

Operating income (loss):Japan

41,001¥ 40,476$ 374,750

North America

6,200

4,485

5,270

51,581

Europe

1,945

1,117

2,851

16,181Others

(76)

(113)

(248)

(632)

Elimination of intersegment transactions
Total

74

TOYOTA INDUSTRIES CORPORATION

(636)
¥

ANNUAL REPORT 2003

45,04552,478¥(160)(1,045)(5,291)

46,330¥ 47,304$ 436,589

Thousands of
U.S. dollars

Millions of yen

2003

2002

2001

2003

¥ 554,034¥ 511,856¥ 460,474$ 4,609,268

North America

144,739

156,188

126,520

1,204,151

Europe223,446

202,078

158,351

1,858,951

Assets:Japan

OthersCorporate assets or elimination
Total

9,759

5,757

4,987

81,190718,413894,522

1,119,310

5,976,814¥1,650,391¥1,770,401¥1,869,642$13,730,374

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 included in corporate assets or eliminationconsist mainly of cash and cash equivalents, short-term

investments and investments in securities held by theCompany.

(3) Overseas sales
For the years ended March 31, 2003, 2002 and 2001:
Thousands of
U.S. dollars

Millions of yen

2003

2002

2001

2003

¥ 192,422¥181,177¥140,161$1,600,849

181,347

160,456

102,666

1,508,710

Overseas sales:
North America
Europe77,82554,83755,967647,463

Total

Others¥ 451,594¥396,470¥298,794$3,757,022

Total sales¥1,069,219¥980,163¥767,383$8,895,333

North America

18.0%

18.5%

18.2%

Europe

17.0

16.4

13.4

Others

7.2

5.5

7.3

42.2%

40.4%

38.9%

Ratio of overseas sales to total sales (%):

Total
Significant countries or areas belonging to each area as of March 31, 2003 are as follows:
North America ………………………… U.S.A., Canada
Europe ………………………………… Germany, France, U.K.
Others ………………………………… China, Indonesia, Pakistan

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 200375

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, 2003, 2002 and 2001 were as follows:
Thousands of
U.S. dollars

Millions of yen

Toyota Motor Corporation
Toyota Motor Corporation held 24.7% of the Company’s shares
as of March 31, 2003, 2002 and 2001, respectively. The above

2003

2002

2001

2003

¥417,058¥410,995¥425,377$3,469,700

transactions were carried out on commercial terms andconditions.

(2) Purchase of goods and services for the years ended March 31, 2003, 2002 and 2001 were as follows:
Purchase of goods:
Thousands of
U.S. dollars

Millions of yen

Toyota Motor Corporation

2003

2002

2001

2003

¥293,853¥284,531¥195,514$2,444,700

Purchase of services:
Thousands of
U.S. dollars

Millions of yen

2003
Toyota Industries Health Insurance Society
Toyota Medical Corporation
Total
Toyota Industries Health Insurance Society’s chairman as ofMarch 31, 2003, 2002 and 2001 is Shiro Endo, who is a directorof the Company and holds 0.01% of the Company’s shares.
Toyota Medical Corporation’s chairman as of March 31, 2003,

2002

2001

2003

¥ 69

¥ 72

¥ 69

$574

39

42

33

325

¥108

¥114

¥102

$899

2002 and 2001 is Yoshitoshi Toyoda, who is a director of theCompany and holds 0.05% of the Company’s shares. The
transactions above were carried out on commercial terms andconditions.

(3) Outstanding balances arising from sale/purchase of goods/services as of March 31, 2003 and 2002 are as follows:
Receivables from a related party:
Millions of yen

Toyota Motor Corporation

Thousands of
U.S. dollars

2003

2002

2003

¥21,108¥20,873$175,607

Payable to a related party:
Millions of yen

Toyota Motor Corporation

76

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

Thousands of
U.S. dollars

2003

2002

2003

¥29,753¥30,527$247,504

20. Net income per share (EPS)
Bases of calculation for net income per share and net income per share diluted are as follows:
Millions of yen

Thousands of
U.S. dollars

2003

2003

¥ 21,933$182,471

329

2,737

Net income attributable to common shareholders

21,603

179,725

Weighted-average shares (thousand)

307,813–

Net income per share (exact yen)

¥ 70.19

$

0.58

¥

$

1,306

$

0.52

Net income per share:
Net income
Net income not attributable to common shareholders(bonus for directors and statutory auditors that are paid through appropriation)

Net income per share diluted:
Adjustment for effect of dilutive securities (interest expenses of convertible bond)

157

Weighted-average shares for diluted computation (thousand)

38,153

Net income per share diluted (exact yen)

¥ 62.90

In conjunction with the implementation of Financial
Accounting Standard No. 2 “Accounting Standard for Earnings
Per Share” and Financial Accounting Standards
Implementation Guidance No. 4 “Implementation Guidance for
Accounting Standards for Earnings Per Share” issued by the
Accounting Standards Board of Japan, the Company has–

adopted those standards for the fiscal year. Net income pershare for the year ended March 31, 2002 is changed from¥87.28 to ¥86.39 and net income per share diluted for the year
then ended is changed from ¥78.26 to ¥77.47, respectively, in
accordance with new standards.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

77

Report of Independent Accountants

June 27, 2003
To the Board of Directors of
Toyota Industries Corporation

We have audited the accompanying consolidated balance sheets of Toyota Industries Corporationand its subsidiaries as of March 31, 2003 and 2002, and the related consolidated statements ofincome, shareholders’ equity, and cash flows for the three years in the period ended March 31, 2003,
all expressed in Japanese yen. These consolidated financial statements are the responsibility of theCompany’s management. Our responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with auditing standards, procedures and practices generally
accepted and applied in Japan. Those standards require that we plan and perform the audit toobtain reasonable assurance about whether the consolidated financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting theamounts and disclosures in the consolidated financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by management, as well as
evaluating the overall consolidated financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the consolidated financial position of Toyota Industries Corporation and its subsidiaries asof March 31, 2003 and 2002, and the consolidated results of their operations and their cash flows forthe three years in the period ended March 31, 2003 in conformity with accounting principles andpractices generally accepted in Japan (see Note 1).
As described in Note 3, effective beginning 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 beginning 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 the reader,have been translated on the basis set forth in Note 1 to the accompanying consolidated financial
statements.

78

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

Toyota Industries
in Figures

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

79

Toyota Industries in Figures(Years ended March 31)

Net Sales, Ordinary Income andOrdinary Income Ratio

Millions of yen(¥ Billion)(¥ Billion)
1,000

100

Net sales
5.8%

800

80
4.9%

600
4.1%

200

20

00

2001

2002

¥558,876¥625,773¥767,383¥980,163 ¥1,069,219

2003

23,172

27,162

44,52547,866

51,375

4.1

4.3

5.8

4.9

4.8

60

4.3%

40

99

2000

Ordinary income ratio (%)

4.8%

400

0
FY

Ordinary income

1999

01

02

0

03

Net sales (left)

Ordinary income (right)

Ordinary income ratio

Depreciation and Amortization
Millions of yen(¥ Billion)
60

1999

2000

2001

2002

2003

¥34,380¥42,752¥46,454¥55,174¥59,154

Automobile Segment

26,51831,70731,76433,40334,157

Materials Handling Equipment Segment

5,548

7,751

10,766

18,88220,801

Textile Machinery Segment

1,024

978

1,034

797

1,006

1,290

2,316

2,890

2,092

3,190

Depreciation and amortization:

40

Others Segment (including corporate
20

or elimination)

0
FY

99

00

01

02

Automobile

03

Materials Handling Equipment

Textile Machinery

OthersCapital Expenditures
Millions of yen(¥ Billion)
150

1999

2000

2001

2002

2003

¥60,468¥44,746¥127,273¥88,320¥87,559

Automobile Segment

47,63533,05854,73461,02349,380Materials Handling Equipment Segment

11,691

5,426

70,673

26,337

24,350

663

1,042

320

523

2,164

479

5,220

1,546

437

11,665

Capital expenditures:100

Textile Machinery Segment
Others Segment (including corporate
50

or elimination)

0
FY

99

00

01

02

03

Automobile

Materials Handling Equipment

Textile Machinery

OthersR&D Expenses andR&D Expenses to Net Sales Ratio

Millions of yen(%)
4.5(¥ Billion)
30

1999

2000

2001

2002

2003

¥23,231¥24,062¥26,196¥29,985¥29,705

Automobile Segment

9,454

10,401

16,27518,06018,748Materials Handling Equipment Segment

7,348

6,694

7,908

9,246

9,298

Textile Machinery Segment

2,243

1,905

615

1,335

1,053

4,186

5,062

1,398

1,344

606

4.2

3.8

3.4

3.1

2.8

R & D expenses:

3.0

20

Others Segment (including corporate
1.5

10

or elimination)
R & D expenses to net sales ratio (%)

0
FY

80

99

00

01

02

03

TOYOTA INDUSTRIES CORPORATION

0

Automobile
Materials Handling Equipment
R & D expenses to net sales ratio (right)

ANNUAL REPORT 2003

Textile Machinery

Others (left)

(Years ended March 31)

Net Sales and Operating Income ofAutomobile Segment(¥ Billion)
600

Millions of yen(¥ Billion)
60

Net sales of Automobile Segment

1999

2000

2001

2002

2003

¥364,269¥423,413¥457,631¥563,599¥595,460

17,39824,42828,52528,96030,108Operating income of
400

40

200

20

0
FY

0

99

00

01

02

03

Automobile Segment

Net sales (left)

Operating income (right)

Net Sales and Operating Income ofMaterials Handling Equipment Segment

Millions of yen(¥ Billion)(¥ Billion)
400

40

1999

2000

2001

2002

2003

¥151,370¥149,085¥236,502¥353,043¥373,008

8,452

5,750

14,547

13,366

16,175Net sales of300

30

Materials Handling Equipment
Segment

200

20

Operating income ofMaterials Handling Equipment
Segment

10

100

0
FY

0

99

00

01

02

03

Net sales (left)

Operating income (right)

Net Sales and Operating Income (loss) of
Textile Machinery Segment(¥ Billion)
60

Millions of yen(¥ Billion)
6

1999

2000

2001

2002

2003

¥18,947¥23,135¥33,238¥30,705¥48,740(3,455)(2,972)

35

(391)

2,309

Net sales of40

4

Textile Machinery Segment
Operating income (loss) of

20

2

0

0

(20)

(2)

(40)
FY

Textile Machinery Segment

(4)

99

00

01

02

Net sales (left)

03

Operating income (loss) (right)

Net Sales and Operating Income of
Others Segment

Millions of yen(¥ Billion)(¥ Billion)
60

12

Net sales of Others Segment
50

10

40

8

30

6

20

4

10

2

0
FY

0

99

00

01

02

03

Operating income of Others Segment

Net sales (left)

1999

2000

2001

2002

2003

¥24,290¥30,140¥40,012¥32,816¥52,011

2,419

1,661

4,197

4,395

3,886

Operating income (right)

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

81

Toyota Industries in Figures(Years ended March 31)

ROE and ROA
%
(%)
6

1999

2000

2001

2002

2003

Return on equity (ROE)

3.4

4.4

3.6

3.0

2.7

Return on assets (ROA)

1.7

2.1

1.8

1.5

1.3

4

2

0
FY

99

00

01

02

03

ROE

ROA

Net Income per Share
Yen
(¥)
100

80

1999

2000

2001

2002

2003

Net income per share — basic¥36.30¥48.32¥75.90¥87.28¥70.19Net income per share — diluted

32.62

43.18

67.77

78.26

62.90

60

40

20

0
FY

99

00

01

02

03

Basic

DilutedInterest-Bearing Debt, Shareholders’ Equity
and Debt/Equity Ratio(¥ Billion)
1,000

800

80

600

60

400

40

200

20

0
FY

Millions of yen

(%)
100

1999

2000

2001

2002

2003

Interest-bearing debt

¥155,368¥191,371¥291,688¥315,354¥410,622

Shareholder’s equity

301,158

316,293951,298

878,812738,868

Debt/equity ratio (%)

51.6

60.5

30.7

35.9

55.6

0

99

00

01

02

03

Interest-bearing debt (left)

Shareholders’ equity (left)

Debt/equity ratio (right)

Shareholders’ Equity per Share
Yen
(¥)
4,000

Shareholders’ equity per share
3,000

2,000

1,000

0
FY

82

99

00

01

02

03

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

1999

2000

2001

¥1,063.05¥1,116.62¥3,036.77

2002

2003

¥2,809.54 ¥2,522.52

(Years ended March 31)

Cash Dividends per Share andPayout Ratio

Yen

(¥)
30

(%)
60

Cash dividends per share
Payout ratio (%)
20

40

10

20

0
FY

1999

2000

2001

2002

2003

¥16.00¥16.00¥17.00¥19.00¥22.00

34.1

26.4

24.4

23.8

34.0

0

99

00

01

02

03

Cash dividends per share (left)

Payout ratio (right)

Market Capitalization
Millions of yen(¥ Billion)
800

Market capitalization

1999

2000

2001

2002

2003

¥613,336¥561,138¥767,487¥649,052¥513,824

2002

2003

600

400

200

0
FY

99

00

01

02

03

PER and PBR
Times(Times)60(Times)
2.0

45

1.5

30

1.0

15

0.5

0
FY

1999

2000

2001

Price/earnings ratio (PER)

59.6

41.0

32.3

23.8

25.0

Price/bookvalue ratio (PBR)

2.0

1.8

0.8

0.7

0.7

0

99

00

01

02

03

PER (left)

PBR (right)

Number of Employees
Persons(Thousands)
30

Number of employees

1999

2000

2001

2002

2003

12,797

13,132

21,11823,05625,030

20

10

0
FY

99

00

01

02

03

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

83

Toyota Industries in Figures
Common Stock Price and Trading Volume(Tokyo Stock Exchange)

High
Opening
Closing
Low

High
Closing
Opening
Low

Black: Opening Price > Closing PriceWhite: Closing Price > Opening Price

(¥)
3,000

(Points)
3,000

Common stock price (left)
2,500

2,500

2,000

2,000

1,500

1,500
1,000

1,000

TOPIX monthly average (right)
500

500

0

0

(Thousand shares)
14,000

Trading volume
12,00010,000
8,000
6,000
4,000
2,000
0

4/98

7

10

1/99

4

7

10

1/00

4

7

10

1/01

4

7

10

1/02

4

7

10

1/03

4

Note: TOPIX (Tokyo Stock Price Index) is an intellectual property that belongs to the Tokyo Stock Exchange, Inc. (“TSE”). All the rights to calculate,publicize, disseminate, and use the index value are reserved by the TSE.

(Years ended March 31)
Yen

1999

2000

2001

2002

2003

High

¥2,455¥2,350¥2,580¥2,770¥2,165

Low

1,880

1,761

1,922

1,766

1,725

At year-end

2,165

1,981

2,450

2,075

1,755

(5.0)

(8.5)

23.7

(15.3)(15.4)

Common stock price:

Annual increase (decrease) (%)

84

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

Toyota Industries
Close-up
Founded in 1926 by Japanese inventor Sakichi Toyoda as a manufacturing
company of automatic looms, Toyota Industries Corporation has growninto a diverse enterprise covering a wide range of businesses, fromautomobiles to electronics. Today, the Company is divided into four
segments: Automobile, Materials Handling Equipment, Textile Machineryand Others. Each of these segments is further divided into various
subcategories of businesses and operations. The following pages provide acloser look at our extensive range of business fields and product groups.

Materials Handling Equipment

86

Compressor Division

89

Vehicle Division

90

Engine Division

90

Electronics

91

Textile Machinery Division92

Sub-Divisions

93

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

85

Toyota Industries Close-up
Materials Handling Equipment

TOYOTA Material Handling Company

A Solid Presence in World Markets
TOYOTA Material Handling Company (“TMHC”) was

TMHC also manufactures and markets materials handlingestablished as an in-house company in April 2001 whensystems; i.e., products for storing, conveying, sorting andToyota Industries took over Toyota Motor Corporation’s

picking.

(“TMC’s”) Industrial Equipment Sales Division and integrated it

TMHC offers customers improved efficiency in theirwith the Industrial Vehicle Division and the Materials Handlingmaterials handling operations by developing a variety of

System Division.

materials handling systems such as automatic guided vehicle

Note: TMHC is an in-house company (a division of Toyota Industries) and not alegally incorporated entity.

systems and automated storage and retrieval systems. Its

TMHC is a world leader in forklift trucks, with a full lineup of

wealth of know-how in materials handling, which has been
accumulated and developed based on the Toyota Production

internal combustion and electric models ranging in capacity

System, helps TMHC provide customers with optimal

from 0.5 to over 40 tons. TMHC also develops andmaterials handling solutions.

manufactures other industrial vehicles, including skid steer

Note: Toyota Industries’ materials handling systems such as racks, automatedstorage and retrieval systems, and automatic guided vehicle systems
are sold only in Japan.

loaders and tow tractors for use at airports.

■ Products for the Japanese Market — Industrial Vehicles

GENEO (7FD25)
Internal Combustion
Counterbalanced Forklift Truck

GENEO-B (7FB15)

GENEO-E (7FBE15)

Skid Steer Loader

Electric Counterbalanced
Forklift Truck

Three-Wheel ElectricCounterbalanced
Forklift Truck(4SDKL8)■ Products for the Japanese Market — Materials Handling Systems

Partner Rack
(Rail-Less Mobile Type)
Rail-Less Mobile Rack

86

Rack Sorter B

Rack Sorter P

2AFBR15Road Sorter H

Automated Storage andRetrieval System(Plastic Container Type)

Automated Storage andRetrieval System (Pallet Type)

Automatic Guided
Forklift Truck(ACBH10)
Automatic Guided Vehicle
SystemTOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

■ Products for the North American Market

7FBEU20

7FBCU25

7FGCU25

Three-Wheel Electric Counterbalanced
Forklift Truck

Electric Cushion Tire Counterbalanced
Forklift Truck

Internal Combustion Cushion Tire
Counterbalanced Forklift Truck

7FGU707FGCU55-BCS

6BPU15Internal Combustion Counterbalanced
Forklift Truck

Internal Combustion Cushion Tire
Counterbalanced Forklift Truck —Boxcar Special Model

Electric Order Picker Truck■ Products for the European Market

7FGF/FDF25

7FBMF25

7FBRE16

Internal Combustion Counterbalanced
Forklift Truck

Electric Counterbalanced Forklift Truck

Coldstore Reach Truck

7PML20

7FBEF18

Electric Pallet Truck

Three-Wheel Electric Counterbalanced Forklift Truck

These are only a few of the products Toyota Industries has introduced into each market.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

87

Toyota Industries Close-up
Materials Handling Equipment

BT Industries AB

Global Supplier of Warehouse Trucks
Headquartered in Sweden, BT Industries AB (“BT Industries”)

approximately 70 countries. BT Industries meets the needs ofis the world’s leading supplier of warehouse trucks.

the entire spectrum of materials handling, with products

BT Industries manufactures in seven plants in Europe andincluding hand pallet trucks, electric pallet trucks, reachNorth America, where the company has particularly strong

trucks, very narrow aisle trucks and counterbalanced forklift

customer bases. BT Industries‘ products contribute totrucks. Some examples are shown below.

efficient materials handling operations for customers in

BT LIFTERBT MINIMOVERBT ORIONBT IXION

Hand Pallet Truck

Electric Pallet Truck

Electric Pallet Truck

Stacker Truck

BT REFLEX AC

BT OPUSBT OPALBT VECTORBT CARGO

Reach Truck

Low Level Order Picking
Truck

High Level Order Picking
Truck

Very Narrow Aisle Truck

Counterbalanced Truck

RaymondReach-Fork Truck

Raymond Model 112
Pallet Truck

Reach Truck

Electric Pallet Truck

Raymond EASi Pacer
Stand-Up
Counterbalanced Truck
Electric Counterbalanced Truck

88

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

Raymond EASi
Orderpicker Truck

RaymondSwing-Reach Truck

Order Picking Truck

Very Narrow Aisle Truck

Compressor Division

Compressors — the Core of Car Air Conditioners
Toyota Industries is a leading manufacturer of car airconditioning compressors with outstanding, unrivaled
technologies. Such products include a 10-cylinder compressor
with swash plate and fixed displacement, one-way swash
plate compressor with continuous variable displacement,
scroll-type and vane-type compressors, and electriccompressors for electric vehicles.
In fiscal 2003, the Division succeeded in developing jointlywith DENSO Corporation a car air-conditioning compressor
that uses carbon dioxide (CO2), a natural refrigerant.

■ Fixed Displacement Type

10S17 Compressor

SCS06 Compressor

SV07 Compressor(Fixed Displacement,
Swash Plate Type)(Scroll Type)(Vane Type)■ Continuous Variable Displacement Type■ For Electric Vehicles■ Auxiliary Car Heater

7SBU16 Compressor

7SEU16 Compressor

ES25 Electric Compressor

Viscous-Type Power Heater(Variable Displacement,
Swash Plate Type)(External Signal-Controlled,
Variable Displacement,
Clutchless Type)(Hermetic Scroll Type)(Vehicle Cabin Supplementary
Heater)TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 200389

Toyota Industries Close-up

Vehicle Division

Building Safe, Environment-Friendly Cars
Toyota Industries currently assembles the Vitz (Yaris in

strategic small car in global markets. The RAV4 sport utility

Europe), RAV4 and Corolla Sedan under consignment fromvehicle is exported to North America and Europe, while the

TMC. The fuel-efficient, environmentally friendly Vitz is TMC’s

Corolla Sedan is exported to North America.

Vitz

RAV4

Corolla Sedan(Yaris in Europe)

Engine Division

From Small Cars to Large Industrial Vehicles
Toyota Industries manufactures diesel and gasoline engines

low noise and vibration. Superior in output andranging in capacity from 1500 to 5200cc. All the car engines

environmental impact, our industrial vehicle engines are

we manufacture are sold to TMC and then fitted in TOYOTA

fitted in forklift trucks and other industrial vehicles

cars. Developed together with TMC, our diesel engines for

manufactured by TMHC.

automobiles feature high power and light weight, as well as■ Diesel Engines

90■ Gasoline Engines

1CD Diesel Engine

1HD-FTE Diesel Engine

2UZ Gasoline Engine

1FZ-FE Gasoline Engine(Displacement: 2.0 Liters, Used in
the RAV4 for Europe and Corolla)(Displacement: 4.2 Liters,
Used in the Land Cruiser )(Displacement: 4.7 Liters,
Used in the Lexus LX470)(Displacement: 4.5 Liters,
Used in the Land Cruiser)

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

Electronics

Corporate Technical Center
The Corporate Technical Center carries out product planning, design andmanufacture of products related mainly to power supply andcommunications. The Center manufactures DC-AC inverters that convert
DC-DC Converter
for the Prius

12V DC car battery current to 100V AC (standard Japanese household
current) and DC-DC converters fitted in TOYOTA Prius hybrid cars. It also

Spread Spectrum
Radio Modem“GIGA WAVE”

develops and manufactures SS wireless modems.
Serving as Toyota Industries’ R&D base, the Center is engaged in basic
R&D in the materials field as well as research in the latest technologies,

DC-AC Inverter(Pre-Installed Type)such as electronics.

Electronics

ST Liquid Crystal Display Corp.
ST Liquid Crystal Display Corp. (“ST-LCD”), established in October 1997 as a50-50 joint venture with Sony Corporation (“Sony”), manufactures lowtemperature polysilicon TFT-LCD panels. Taking advantage of Sony’s
superb LCD technology and Toyota Industries’ expertise in quality control
and manufacturing technology, ST-LCD produces high-quality, highperformance LCD panels on the unique Toyota Production System.
ST-LCD’s panels are expected to create huge demand for a wide rangeof display device applications, including mobile phones, digital video andstill cameras and personal digital assistants (PDAs).

Low-Temperature
Polysilicon TFT-LCDs

Electronics

TIBC Corporation
TIBC Corporation (“TIBC”) was formed in 1998 as a joint venture
between Toyota Industries and Ibiden Co., Ltd. TIBC makes ball gridarray (BGA) plastic package substrates, an indispensable component ofPCs, mobile phones and video game systems. TIBC also manufactures
flexible printed circuit (FPC) substrates for smart cards.

Ball Grid Array (BGA)
Plastic Package Substrates

Flexible Printed Circuit (FPC)
Substrates

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 200391

Toyota Industries Close-up

Textile Machinery Division

Innovation and Creativity in the Global Textile Industry
Toyota Industries traces its roots back to Sakichi Toyoda’s

mechatronics and other technologies. Toyota Industries is ainvention of the automatic loom over 75 years ago. Since

global leader in the manufacture of air-jet looms, ringthen, we have developed and manufactured spinning,spinning frames and roving frames.

weaving and other textile machinery, which we have

The Textile Machinery Division continues its commitment

marketed to customers around the world. To stay ahead of

to customer satisfaction with a complete range of high-ever-advancing market needs, the Textile Machinery Divisionquality products that meet the needs of today’s global textile

is enhancing its products with the latest communications,industry.

■ Weaving Machinery

JAT710 Air-Jet Loom

LW600 Series Water-Jet Loom

Mackee Eagle
Sizing Machine for Spun Yarn

Filamaster Express 610
Sizing Machine for Filament Yarn

■ Spinning Machinery

RX240NEW Ring Spinning Frame

92

TOYOTA INDUSTRIES CORPORATION

FL100 Roving Frame

ANNUAL REPORT 2003

DX8 Drawing FrameSub-Division

Machinery & Tools Sub-Division

Superior Press Die Manufacturing Technology
The Machinery & Tools Sub-Division designs andmanufactures high-precision, high-quality automobile press
dies for TMC. We will continue to contribute to TMC’s
business with press dies that offer excellent quality, cost
efficiency and fast delivery times.

The Machinery & Tools Sub-Division manufactures various types ofautomobile press dies and distributes them to Toyota Industries’
Vehicle Division and TMC.

Sub-Division

Mechatronics Engineering Sub-Division

Designing and Producing Manufacturing Equipment for
Toyota Industries
Toyota Industries has promoted in-house manufacture of the
all-important machining and assembly equipment. The
Mechatronics Engineering Sub-Division designs andproduces superior production equipment for Toyota
Industries’ divisions and Group companies, giving all of ourbusinesses a competitive edge.

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

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

93

Major Developments in Toyota Industries’ History
1920s

1940

1960

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

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

Shovel loader production starts.

1944

Sakichi Toyoda

Obu Plant starts operations,producing castings.

Toyoda Automatic Loom Type G
invented by Sakichi Toyoda.

94

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

1963
Dump truck production starts.
Friction welder production starts.

1929

1949

1964

Spinning frame production starts.

Company stock listed on Tokyo, Osakaand Nagoya Stock Exchanges.

J-type diesel engine production starts.

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

1930s
1933
Automobile Division set up.

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.

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

1955
Company unveils Model G1 truck at a
new-car-release exhibition in Shibaura,
Tokyo.

1924

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
and development of textile
machinery. Starting with awooden handloom, he
subsequently pioneered a
new era in textile machinerywith inventions that included
Japan’s first power loom, thecircular loom and the Toyoda
Automatic Loom Type G.
Sakichi was awarded 84
patents and 35 utility models
in his lifetime and isremembered with pride inJapan as one of the world’s
greatest inventors. We at
Toyota Industries are proud tocarry on the engineering spiritof our illustrious founder.

1940s

Vehicle Division set up.

1968

1956

Open-end spinning machine
production starts.

Forklift truck production starts.

1959
1937
Automobile Division separates andbecomes Toyota Motor Co., Ltd. (nowToyota Motor Corporation).

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

Publica (van)Electric counterbalanced forklift truck
production starts.

P-type gasoline engine production
starts.

1970s

1985

1995

1970

Engine Division separates from
Vehicle Division.

Takahama Plant starts operations,producing industrial vehicles.

10PA-type compressor production
starts.

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

1971

1986

7SB-type compressor production
starts.

Corolla (van) production starts.

Company awarded the Deming Prize
for quality control implementation.

B500 electric counterbalanced forklift
truck production starts.

X300 series forklift truck production
starts.

Kirloskar Toyoda Textile Machinery
Ltd. (“KTTM”) established in India as a
joint venture with the Kirloskar Group.

Divisional organization system
introduced (3 divisions: Textile
Machinery, Industrial Vehicle, andVehicle).
Toyoda-Sulzer Manufacturing Ltd.
established as a joint venture with
Sulzer Brothers, Ltd. of Switzerland to
produce projectile looms.

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

1974
6P-type compressor production starts.

1977
Swash plate compressor technology
licensed to Chrysler and Ford.
Compressor Division separates from
Textile Machinery Division.

1978
Starlet (automobile) production starts.

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

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

1990s
Aerial lift equipment production starts.

1980s
1980
JA-type air-jet loom production starts.

1981
10P-type compressor production starts.

1990
Sprinter Carib (automobile; exported
as the Corolla Wagon) production
starts.

2000s
2000
LW600 series water-jet loom
production starts.
Company acquires BT Industries AB of
Sweden, a world-leading
manufacturer of warehouse trucks.
2UZ-type gasoline engine production
starts.
Higashichita Plant starts operations,producing foundry parts.

1996

2001

JAT610 air-jet loom production starts.

GENEO-R (7FBR outside Japan) reachtruck production starts.

RX240 ring spinning frame
production starts.

1997

Company takes over the Industrial
Equipment Sales Division of Toyota
Motor Corporation.

Compressor production at Kariya
Plant reaches 100 million units.

TOYOTA Material Handling Company
established as an in-house company.

6SE-type compressor production
starts.

RAV4 (SUV) production starts.

ST Liquid Crystal Display Corp.
(“ST-LCD”) established as a joint
venture with Sony Corporation.

1998
TD Deutsche Klimakompressor GmbH(“TDDK”) established in Germany as a
joint venture with DENSO Corporation to produce car air-conditioning
compressors.
GENEO (7FG/D outside Japan) internal
combustion counterbalanced forklift
trucks introduced.

Company receives 1990 PM Excellent
Plant Award.

Name changed to Toyota Industries
Corporation.

2002
Advanced Logistics Solutions Co., Ltd.
(“ALSO”) established to plan overalllogistics operations and operate
distribution centers.
Higashiura Plant starts operations,producing parts for car
air-conditioning compressors.
Toyota Motor Industries Poland
Sp.zo.o. (”TMIP”) established in Poland
as a joint venture with Toyota Motor
Corporation in order to produce
diesel engines.

2003
1992

Corolla Sedan production starts.

Materials Handling System Division
set up.

JAT710 air-jet loom production starts.

Production starts on automatedstorage and retrieval systems.

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

JAT600 air-jet loom production starts.

10S-type compressor production starts.

1993

1999

RX200 ring spinning frame production
starts.

Vitz (Yaris in Europe) production starts.

GENEO-E (7FBE outside Japan) threewheel electric counterbalanced
forklift truck production starts.

1994
X500 series internal combustion
counterbalanced forklift truck
production starts.

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

Toyota Industry (Kunshan) Co., Ltd.
(“TIK”) established in China as a joint
venture with Toyota Tsusho
Corporation and Lioho MachineWorks, Ltd.
R500 reach truck production starts.

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

Company acquires Aichi Corporation,a manufacturer of special-purpose
vehicles.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

95

Corporate Organization(As of July 1, 2003)

Corporate Auditors
Corporate Auditor’s Office

TOYOTA Material Handling Company*

Board ofCorporate Auditors
Corporate Center

Board of Directors

Management
Committee

President’s Office
Corporate Planning Dept.
Business Reform Office
Audit OfficeBusiness Planning Dept.
Advanced Logistics Project Office
BT OfficeInvestor Relations OfficePublic Affairs Dept.
Finance Dept.
Global Human Resources Dept.
Quality Control Dept.
Osaka OfficeTextile Machinery Division

Compressor Division

Vehicle Division

ChairmanEngine Division

President
Business Support Center

Business Operation
Committee

Legal Dept.
Secretarial Dept.
General Administration Dept.
Employee Support Center
Technical Training Dept.
Accounting Dept.
Global Information Technology Dept.
Purchasing Dept.
Logistics Dept.
Safety, Health & Environment Dept.
Operations Management Consulting Dept.
Plant Engineering Dept.
Intellectual Property Dept.
Health Care Administration CenterTokyo Office

Corporate Code of Conduct Council
Export Supervisory Committee
Environmental Committee
Safety and Health Committee
Stock Option Council
Human Resources Development Committee
Information Technology Promotion Committee
Manufacturing Technique Promotion Committee
Technical Committee

96

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

Corporate Technical Center

Mechatronics Engineering Sub-Division

Machinery & Tools Sub-Division* TOYOTA Material Handling Company is a division of Toyota
Industries Corporation, not a legally incorporated entity.

Directors and Corporate Auditors(As of June 27, 2003)

Board of Directors

ChairmanPresident

Akira Yokoi*

Tadashi Ishikawa*Executive Vice President

Executive Vice President

Executive Vice President

Shozo Nakayama*

Koichiro Noguchi*

Tetsuro Toyoda*

Senior Managing Directors
Shiro Endo*
Kazuhiko Takeuchi*
Norio Sato*
Masazumi Konishi*
Shinjiro Kamimura*
Tatsuo Matsuura*Managing Directors
Iwao Katayama
Shigetaka Yoshida
Masafumi Kato
Yasuharu Toyoda
Honorary Chairman

Directors
Tatsuro Toyoda
Kimpei Mitsuya
Hiroya Kono
Kazunori Yoshida
Kenji Takenaka
Kosaku Yamada
Satoshi Kaseda
Shoji Shimo
Yutaka Murodono
Ryoji Inoue
Hirofumi Tsuji
Yukio Yamakita
Takaki Ogawa
Kazue Sasaki

Yoshitoshi Toyoda* Representative Director

Corporate Auditors
Standing Corporate Auditors
Shigetaka Mitomo
Masanori ItohCorporate Auditors
Iwao Isomura
Kosuke Shiramizu
Hiroshi Makino

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

97

Corporate Data

(As of March 31, 2003)

Plants and Offices (Parent Company)
Number of
Employees

Main Products

Land Area(1,000 m2)

Kariya Plant

Textile machinery, car air-conditioning compressors

1,720

171

Takahama Plant

Forklift trucks, materials handling systems

1,440

333

Nagakusa Plant

Automobiles

2,140

267

Kyowa Plant

Semiconductors, electronics equipment, press dies

918

161

Obu Plant

Parts for car air-conditioning compressors

383

148

Hekinan Plant

Engines

1,369

271

Higashichita Plant

Foundry parts

380

332

Higashiura Plant

Parts for car air-conditioning compressors

64

244

Head Office and Others

1,355

662

Total

9,769

2,589

Consolidated Subsidiaries
Japan
Location98(thousands of the local currency)

CapitalEquityOwnership

TIBC Corporation

Aichi¥3,250,000

60.0%

TOYOTA L&F Tokyo Co., Ltd.

Tokyo

¥350,000

90.0%

Logistics Planning Tokyo Co.,Ltd.

Tokyo¥10,000

100.0%

Altex Co., Ltd.

Shizuoka¥200,000

75.0%

Sun River Co., Ltd.

Osaka

¥150,000

81.5%

Izumi Machine Mfg. Co., Ltd.

Aichi

¥150,000

60.7%

TOYOTA L&F Keiji Co., Ltd.

Kyoto

¥140,00065.0%Tokyu Co., Ltd.

Aichi

¥135,000

63.3%

Mino Tokyu Co., Ltd.

Gifu

¥18,000

93.4%

Advanced Logistics Solutions Co., Ltd.

Aichi

¥100,000

100.0%

Teion Shokuhin Ryutsu Inc.

Tokyo

¥55,000

60.0%

Toyoda High System, Incorporated

Aichi¥100,000

90.0%

Nishina Industrial Co., Ltd.

Nagano¥100,000

69.2%

Suzaka Nishina Industrial Co., Ltd.

Nagano¥50,000

96.8%

Tokaiseiki Co., Ltd.

Shizuoka¥98,000

92.1%

Logistec Co., Ltd.

Aichi

¥90,000

100.0%

Taikoh Transportation Group *1 (5 companies)

–

–

–

SKE Inc.

Aichi¥78,500

100.0%SK Maintenance Inc.

Aichi

¥50,000

70.0%

Iwama Loom Works, Ltd.

Aichi

¥49,920

50.0%

Kawamoto System Corporation

Aichi¥47,000

100.0%

Arti Inc.

Aichi¥30,000

100.0%TOYOTA L&F Shizuoka Co., Ltd.

Shizuoka¥30,000

90.0%

Hara Corporation

Gifu¥23,19373.2%

Mizuho Industry Co., Ltd.

Aichi

¥20,000

93.8%

Sun Valley Inc.

Aichi

¥20,000

100.0%Sun Staff, Inc.

Aichi

¥20,000

100.0%

Tokai System Institute Corp.

Aichi¥10,000

100.0%

Shine’s Inc.

Aichi

¥10,000

100.0%TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

Outside Japan
Location(thousands of the local currency)

CapitalEquityOwnership

SEK6,652,977

100.0%––

Toyoda International Sweden AB *2 *3

Mjölby, Sweden

BT Industries Group *2 (63 companies)–

Michigan Automotive Compressor, Inc.

Parma, Michigan, U.S.A.

US$146,000

60.0%

Toyota Industries North America, Inc. *4

Schaumburg, Illinois, U.S.A.

US$37,900

100.0%

Toyota Industrial Equipment Mfg., Inc. *4

Columbus, Indiana, U.S.A.

US$60,000

100.0%
100.0%

Toyota Material Handling USA, Inc. *4

Irvine, California, U.S.A.

US$12,500

ACTIS Manufacturing, Ltd. LLC *4

Grapevine, Texas, U.S.A.

US$2,000

60.0%

Toyota–Lift of Los Angeles, Inc. *4

Santa Fe Springs, California, U.S.A.

US$1,500

100.0%

Toyoda Textile Machinery, Inc. *4Charlotte, North Carolina, U.S.A.

US$1,300

100.0%

Toyota Industries Personnel Service of America, Inc.*4

Schaumburg, Illinois, U.S.A.

US$100100.0%TD Deutsche Klimakompressor GmbH

Straßgräbchen, Germany

EUR20,452

65.0%

Kirloskar Toyoda Textile Machinery Limited

Bangalore, Karnataka, India

Rs2,116,200

94.4%

Toyota Industry (Kunshan) Co., Ltd.

Kunshan, Jiangsu, China

US$16,000

70.0%

Toyota Truck Norge AS

Trondheim, Norway

NOK110,000

100.0%

Toyota Truckutleie Norge AS

Trondheim, Norway

NOK100100.0%

Toyota Truck Danmark A/S

Vejle, Denmark

DKK9,000

100.0%

Toyota Truckudlejning Danmark A/S

Vejle, Denmark

DKK500100.0%

Toyota Industrial Equipment, S.A.

Ancenis, France

EUR9,000

60.0%

Toyota Gabelstapler Deutschland GmbH

Duisburg, Germany

EUR720100.0%

Toyota Industrial Equipment (UK) Limited

Castleford, West Yorkshire, U.K.

GBP48

100.0%

Toyota Industrial Equipment (Northern) Limited

Castleford, West Yorkshire, U.K.

GBP1,243

100.0%

Toyota Industrial Equipment Europe, S.A.R.L.

Ancenis, France

EUR75

100.0%

Toyota Carrelli Elevatori Italia S.r.l.

Bologna, Italy

EUR3,249

100.0%

Unconsolidated Subsidiary Accounted for by the Equity Method
Outside Japan
Location

Capital(thousands of the local currency)

BT Industries Group *2 (2 companies*5)–

EquityOwnership––

Affiliates Accounted for by the Equity Method
Japan
Location(thousands of the local currency)

CapitalEquityOwnership

ST Liquid Crystal Display Corp.

Aichi¥50,000,000

50.0%

Aichi Corporation

Aichi¥8,542,545

34.0%

CapitalEquityOwnership

Outside Japan
Location(thousands of the local currency)

BT Industries Group *2 (14 companies)

–

–

–

*1 Taikoh Transportation Group comprises Taikoh Transportation Co., Ltd. (parent company) and its four subsidiaries. Taikoh Transportation Co., Ltd. is headquartered in Aichi
and capitalized at ¥83,985 thousand. Toyota Industries Corporation holds 50.2% of the outstanding shares of Taikoh Transportation Co., Ltd.
*2 BT Industries Group is composed of 79 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 holds 100.0% of the shares of BT Industries AB.
*3 Toyoda International Sweden AB changed its name to Toyota Industries Sweden AB in May 2003.
*4 Toyota Industries North America, Inc. is a holding company that exercises control over Toyota Industrial Equipment Mfg., Inc., Toyota Material Handling USA, Inc.,ACTIS Manufacturing Ltd. LLC, Toyota-Lift of Los Angeles, Inc., Toyoda Textile Machinery, Inc. and Toyota Industries Personnel Service of America, Inc.
TAL personnel Service Inc. changed its name to Toyota Industries Personnel Service of America, Inc. in October 2002.
*5 BT Industries AB temporarily holds more than a 50% share of the capital of two subsidiaries.
Note: ¥–Japanese yen; SEK–Swedish krona; US$–U.S. dollar; EUR–Euro; Rs–Indian rupee; NOK–Norwegian krone; DKK–Danish krone; GBP–British pound

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

99

Investor Information(As of March 31, 2003)

Corporate Head Office

Percentage of Shareholders

TOYOTA INDUSTRIES CORPORATION
2-1, Toyoda-cho, Kariya-shi, Aichi-ken 448-8671, Japan

9.7%

0.3%

Telephone: +81-(0)566-22-2511
Facsimile: +81-(0)566-27-5650
15.9%

41.4%

Date of Establishment
November 18, 1926

Domestic companies
Financial institutions
Indivisuals and others
Foreign investors
Securities companies

32.7%

Common Stock
No par value
Authorized:1,091,245,000 shares
Issued:313,324,451 shares

Major Shareholders
Ownership Ratioof Voting Shares

Stock Exchange Listings
Toyota Motor Corporation

24.73%DENSO Corporation

9.26

Number of Shareholders

The Master Trust Bank of Japan, Ltd.

7.50

18,217

Sumitomo Mitsui Banking Corporation

3.74

Custodial Trust Company

3.13

Nippon Life Insurance Company

3.05

Towa Real Estate Co, Ltd.

2.63

3-28-12, Meieki, Nakamura-ku, Nagoya-shi, Aichi-ken

Mitsui Asset Trust and Banking Co., Ltd.

2.21

450-8565, Japan

Mitsui Sumitomo Insurance Company, Limited

2.01

Toyota Tsusho Corporation

1.80

Tokyo, Osaka and Nagoya (Ticker Code : 6201)

Independent Accountants
ChuoAoyama Audit Corporation

Transfer Agent
UFJ Trust Bank Limited
1-4-3, Marunouchi, Chiyoda-ku, Tokyo-to 100-0005, Japan
Telephone: +81-(0)3-3287-2211

Common Stock Price Range (Tokyo Stock Exchange)

1st quarter2nd quarter3rd quarter
4th quarter

100

FY2003High
Low

FY2002High
Low

FY2001High
Low

FY2000High
Low

FY1999HighLow¥2,165
2,005
1,909
1,820

¥2,770
2,620
2,165
2,210

¥2,435
2,580
2,305
2,575

¥2,350
2,170
2,250
2,320

¥2,455
2,455
2,130
2,195

¥1,862
1,770
1,732
1,725

TOYOTA INDUSTRIES CORPORATION¥2,355
1,845
1,766
1,823

ANNUAL REPORT 2003

¥1,950
1,980
1,922
2,100

¥2,050
1,761
1,880
1,870

¥2,170
2,005
1,880
1,941

Publications
Our Corporate Brochure and Environmental Report are available in both English and Japanese upon written request
to the Public Affairs Department at our Corporate Head Office.

Internet Home Page
Updated information is published regularly on our Web site. (http://www.toyota-industries.com/)

Further Information
For further information, please write to the Investor Relations Office at our Corporate Head Office.

2-1, Toyoda-cho, Kariya-shi, Aichi-ken 448-8671, Japan
Telephone: +81-(0)566-22-2511 Facsimile: +81-(0)566-27-5650
URL: http://www.toyota-industries.com/

This annual report is printed onrecycled paper using soy ink to minimize
the impact on the environment.
Printed in Japan