Financial Section

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

Toyota Industries Corporation

Annual Report 200753

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

2007

2006

2005

2004

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

Operating income
Ordinary income

89,95464,04053,12052,631

108,484

80,63570,91258,970For The YearNet sales

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

Net income
Overseas sales
Depreciation and amortization

106,060

87,28770,21365,351

Capital expenditures

166,505

158,835

136,506

89,508

Research and development expenses

34,54831,16630,051

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

189.88¥146.16¥135.09¥108.04

189.66146.02135.03101.97

5,612.11

5,044.45

3,504.80

3,199.69

50.00

38.00

32.00

24.00

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

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

1,810,483

1,611,227

1,115,747

1,016,763

Common stock

80,46280,46280,46280,462

Number of shares outstanding (excluding treasury stock)

312,075

319,320

318,237

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

92,406

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

85,17250,020(56,015)

Cash and cash equivalents at end of year

108,569

112,596

100,535

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

3.5

3.5

4.1

3.8

Return on assets (ROA) (%)

1.7

1.7

2.0

1.8

Return on sales (ROS) (%)

3.2

3.1

3.5

2.9

Debt/equity ratio (%)

28.9

29.4

34.4

31.6

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

7.4

7.8

7.7

7.4

¥ 191,007¥ 150,674¥ 128,381¥ 113,676

36,09632,97730,99027,431

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

54

Toyota Industries Corporation

Annual Report 2007

Thousands of
U.S. dollars

Millions of yen

2003

2002

2001

2000

1999

1998

1997

2007

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

52,477

46,33047,304

28,867

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

23,172

33,201

31,157918,971

21,93327,311

22,637

13,686

10,391

20,491

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

59,15455,17346,45442,751

34,37927,95828,042

898,433

87,55988,319127,273

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

29,70529,98526,19524,061

23,231

23,112

19,691

292,657

¥

70.19

¥

87.28

¥

75.90

¥

48.32

¥

36.30

¥

72.33

¥

63.55

$

1.61

62.90

78.26

67.77

43.18

32.62

63.48

55.20

1.61

2,522.52

2,809.54

3,036.77

1,116.62

1,063.05

1,056.81

996.18

47.54

22.00

19.00

17.00

16.00

16.00

16.00

16.00

0.42

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

738,867

878,812951,298

316,293

301,158

304,097

281,154

15,336,578

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

681,598

292,777

312,796313,260

283,260

283,296287,752

282,233

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

57,775

1,225

94,472

27,49924,368(12,918)

69,081(167,295)

136,929

71,11995,296

77,332

49,95574,30362,322919,691

2.7

3.0

3.6

4.4

3.4

7.0

6.5

1.3

1.5

1.8

2.1

1.7

3.6

3.6

2.1

2.8

2.9

2.2

1.9

3.6

3.4

55.6

35.9

30.7

60.5

51.6

37.5

46.0

6.7
¥

81,07895,47225,0305.8¥

97,54023,056

¥

9.1

14.5

16.4

17.6

13.0

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

21,11813,132

12,797

11,23910,738$ 1,618,020

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

Toyota Industries Corporation

Annual Report 200755

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

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

Result of Operations

efforts to strengthen its corporate structure by attempting to ensure

Operating Performanceof appealing new products, aggressive sales promotions and the

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

execution of a Group-wide program to reduce costs.

customer trust through its dedication to quality, the development

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

As a result, total consolidated net sales of Toyota Industries

strong corporate earnings while consumer spending was on a mild

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

upswing as employment conditions improved. The overall economic

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

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

Segment.)

In this operating environment, Toyota Industries undertook

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

Operating Income andOperating Income Ratio

Net Sales(¥ Billion)(¥ Billion)

(%)

2,000

90

18

80

16

70

14

60

12

50

10

1,500

1,000

500

0
FY

40

8

30

6

20

4

10

2

0

03

04

05

06

07

0

FY

03

04

05

06

Operating income (left)
Operating income ratio (right)

56

Toyota Industries Corporation

Annual Report 200707

Ordinary Income andOrdinary Income Ratio

Net Sales ofAutomobile Segment

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

120

12

1,000

50

100

10

800

40

80

8
600

30

60

6
400

20

40

4

20

2

200

10

0
FY

0

03

04

05

06

07

0
FY 03

0

04 05 06 07

FY

03 04 05 06 07

Ordinary income (left)
Ordinary income ratio (right)

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

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

Sales increased in the automobile industry as a whole. Although

depreciation and personnel expenses, this increase was achieved

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

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

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

overseas sales.

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

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

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

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

20

Operating Income

15

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

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

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

5

0
FY

03

04

05

06

07

Japan
North America
EuropeAsia and Oceania

Toyota Industries Corporation

Annual Report 2007

57

Net Sales ofMaterials Handling
Equipment Segment

Operating Income ofMaterials Handling
Equipment Segment

Net Sales of
Logistics Segment

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

800

50

100

3

40

80

30

60

20

40

600

2
400
1
200
10

0
FY 03

20

0

04 05 06 07

FY 03

0

0

04 05 06 07

FY 03

04 05 06 07

FY 03

04 05 06 07

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

Within this segment, net sales of the Vehicle Business totaled

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

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

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

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

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

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

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

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

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

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

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

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

work platforms, posted a significant increase in sales bolstered by

2006. Although sales decreased in the domestic market, sales

replacement demand from the electricity and telecommunications

increased in North America, Europe and China.

industries.

Materials Handling Equipment Segment

Logistics Segment

In the materials handling equipment industry as a whole, sales

The overall operating environment was severe in the logistics industry

remained strong in the Japanese market. Overseas markets

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

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

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

crude oil prices.

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

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

the solid performance of the logistics solutions and transportation

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

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

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

58

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

Textile Machinery Segment

2007, Toyota Industries continued to strengthen its sales network

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

Toyota Industries Corporation

Annual Report 2007

Net Sales of
Textile Machinery
Segment

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

Net Sales of
Others Segment

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

80

7
6

50

2

60

5

40
1

4
40

30

3

0
20

2

20
(1)

10

1
(2)

0
FY 03

04 05 06 07

FY 03

0

04 05 06 07

FY

0

03 04 05 06 07

FY

03 04 05 06 07

market remained strong on the back of robust capital investment

year-end of the BT Industries Group comprising Toyota Industries

supported by rapid growth.

subsidiaries. Conversely, operating income decreased ¥0.8 billion

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

production expenses at lift truck manufacturing subsidiaries.

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

Europeweaving machinery. Strong sales of spinning machinery in India also

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

contributed to the remarkable performance of the segment.

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

Others Segment

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

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

¥9.4 billion (19.2%) from fiscal 2006.

OthersSales by Geographical Segment

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

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

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

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

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

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

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

unit sales of vehicles and engines.

Income before Income Taxes
North America

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

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

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

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

ordinary income.

Toyota Industries Corporation

Annual Report 2007

59

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

(%)

200

4,000

80

3,500

70

3,000

60

2,500

50

2,000

40

1,500

30

1,000

20

500

10

180
160
140
120
100
80
60
40
20
0
FY

0

03

04

05

06

07

Basic
Diluted

FY

0

03

04

05

06

07

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

Income Taxes

and securities, Toyota Industries maintained a commercial paper

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

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

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

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

funds procured from financial institutions, Toyota Industries believes

Minority interests in consolidated subsidiaries amounted to ¥7.3

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

subsidiaries.

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

Net Income

integrated fund management of its subsidiaries in Japan, while Toyota

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

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

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

North America and Europe, respectively.

¥146.02 to ¥189.66.

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

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

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

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

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

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

corporate bonds and loans from financial institutions.

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

In addition to current assets such as cash and cash equivalents

60

Cash Flows

Toyota Industries Corporation

Annual Report 2007

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

Cash Flows(¥ Billion)(¥ Billion)
200

160

150

140

100

120

50

100

0
80
(50)
60
(100)
40

(150)

20

(200)
(250)

0
FY

03

04

05

06

07

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

FY

03

04

05

06

07

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

The primary breakdown comprised ¥8.8 billion for the Company,

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

billion in fiscal 2006. Cash flows from financing activities resulted

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

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

Investment in property, plant and equipment in the Logistics

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

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

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

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

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

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

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

launch new products, streamline and upgrade production equipment,

Outlook for Results for Fiscal 2008

and augment R&D facilities.

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

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

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

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

in crude oil prices, precluding optimism.

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

For fiscal 2008, Toyota Industries forecasts consolidated net

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

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

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

Izumi Machine Mfg. Co., Ltd.

determined to place utmost emphasis on product quality and develop

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

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

Toyota Industries Corporation

Annual Report 200761

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

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

Dividend Policy

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

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

Product Development Capabilities

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

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

to strengthen Toyota Industries’ corporate constitution, promote

Toyota Industries proactively develops new products by utilizing its

proactive business development and raise its corporate value.

leading-edge technologies, as it strives to anticipate increasingly

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

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

capital demand, the dividend payout ratio on a consolidated basis

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

peripheral sectors. Toyota Industries expects that revenues derived

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

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

an increase of ¥12.0 per share over fiscal 2006.

Industries believes that it can continue to develop appealing new

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

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

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

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

include no assurance Toyota Industries can allocate sufficient future

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

treasury stock.

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

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

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

no assurance that newly developed products and technologies will

Law, as well as repurchase treasury stock through market dealings

always be protected as intellectual property.

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

Ordinary General Meeting of Shareholders.

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

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

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

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

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

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

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

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

the intellectual property rights of a third party.

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

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

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

62

Toyota Industries Corporation

Annual Report 2007

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

Accordingly, any expenses necessary for continuous strict adherence

utmost efforts to enhance quality. However, Toyota Industries cannot

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

costs and have an adverse impact on Toyota Industries’ financial

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

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

Alliances with Other Companies

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

Aiming to expand its businesses, Toyota Industries engages in joint

and product liability indemnities could result in large cost burdens

activities with other companies through alliances and joint ventures.

and have a significant negative impact on the evaluation of Toyota

However, a wildly fluctuating market trend or a disagreement between

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

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

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

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

intended benefits of its alliances.

Industries.

Exchange Rate Fluctuations
Price Competition

Toyota Industries’ businesses encompass the production and sales

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

strengthening of the yen against other currencies (especially against

and Materials Handling Equipment businesses, which are the core

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

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

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

technology, quality and cost. Amid an environment characterized

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

Toyota Industries carries out production could lead to an increase in

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

local production, procurement and distribution costs. Such an increase

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

impact on Toyota Industries’ financial condition and business results.

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

Reliance on Suppliers of Raw Materials andComponents

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

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

Share Price Fluctuations

Toyota Industries has concluded basic business contracts with these

Toyota Industries holds marketable securities, and therefore bears

external suppliers and assumes it can carry out stable transactions

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

for raw materials and components. However, Toyota Industries

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

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

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

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

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

Effects of Disasters, Power Blackouts andOther Incidents

Environmental Regulations

Toyota Industries carries out regular checks and inspections of its

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

production facilities to minimize the effect of production breakdown.

strives to reduce any burden on the environment resulting from

However, there is no assurance Toyota Industries can completely

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

environmental laws and regulations. However, various environmental

including malfunctions of production facilities, fires at production

regulations could also be revised and strengthened in the future.

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

Toyota Industries Corporation

Annual Report 200763

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

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

essential and crucial estimate—including future estimates of cash

other operations, could delay or stop production or shipment

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

on currently available information, Toyota Industries’ management

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

results.

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

Latent Risks Associated with
International Activities

Industries’ business results.

Toyota Industries manufactures and sells products and provides

Allowance for Retirement Benefits

services in various countries. Such unforeseen factors as social

Calculations differ for retirement benefits, retirement benefit

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

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

benefits for employees on leave of absence because different

Toyota Industries’ financial condition and business results.

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

Retirement Benefit Liabilities

expenses, expected rates of return on pension assets and mortality

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

liabilities are calculated based on expected rates of return on

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

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

is recognized as a liability in future accounting periods. Toyota

Therefore, differences between actual results and assumptions

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

differences between actual results or changes in the assumptions

impact on recognized expenses and calculated liabilities in future

could have an impact on retirement benefits and retirement benefit

accounting periods.

expenses and liabilities after employee retirement.

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

Toyota Industries’ financial statements are prepared in conformity

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

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

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

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

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

considerable degree of judgment and estimation and are highly

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

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

Allowance for Doubtful Accounts

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

present Toyota Motor Corporation).

Industries estimates its allowance for doubtful accounts by utilizing64

the percentage of historical experiences in credit losses for ordinary

Capital Relationshipreceivables and individually examining the feasibility of collection for

In light of this historical background, Toyota Industries and TMC

receivables that seem to be uncollectible. Evaluating the allowance

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

Toyota Industries Corporation

Annual Report 2007

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

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

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

Toyota Industries Corporation

Annual Report 200765

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

Millions of yen

ASSETS

2007

2006

2007

¥ 108,569¥ 112,596

234,611200,690

1,987,390

48

75

411

Inventories (Note 5)

120,737

104,534

1,022,767

Deferred tax assets (Note 16)

17,92418,096

151,835

Other current assets

88,89475,938753,026

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

568,001

509,266

4,811,532

Buildings and structures (Notes 6 and 8)

171,897

155,168

1,456,138

Machinery, equipment and vehicles (Note 6)

269,769

240,467

2,285,216

Tools, furniture and fixtures (Note 6)

26,081

22,310220,936

Land (Note 8)

99,117

87,213

839,627

Construction in progress

39,05620,994

330,846

Total property, plant and equipment

605,922526,154

5,132,763

Goodwill

101,102

97,485

856,435

Software

11,714

12,48399,231

Total intangible assets

112,816

109,968

955,666

2,172,648

1,975,793

18,404,480

Investments in unconsolidated subsidiaries and affiliated companies

60,41560,976

511,782Long-term loans

8,460

8,591

71,672Long-term prepaid expenses

11,603

11,35898,297

Deferred tax assets (Note 16)

7,435

6,842

62,986

Other investments and other assets

38,78436,625328,544

Less — allowance for doubtful accounts

(232)

(237)

(1,967)

Total investments and other assets

2,299,117

2,099,951

19,475,794

3,017,856

2,736,074

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

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

Total current assets$

919,691

Fixed assets
Property, plant and equipment

Intangible assets

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

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

66

Toyota Industries Corporation

Annual Report 2007

Thousands of
U.S. dollars (Note 1)

Millions of yen

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

2007

2006

2007

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

558,405

446,118

4,730,249

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

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

1,216,969
1,775,374–

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

80,46280,462

681,598

105,055
402,431(47,253)

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

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

540,696

530,150

4,580,234

1,157,793(0)52,912

1,047,190–
33,886

9,807,649(6)448,221

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

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

1,081,077––
1,611,227¥3,245,341

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

Toyota Industries Corporation

Annual Report 200767

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

Millions of yen

2007

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

2006

2005

2007

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

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

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

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

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

13,76027,547
–
2,389
317

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

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

116,561
233,351–
20,238
2,690

6,868

7,665

5,967

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

4,305

–

–

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

Yen

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

68

Toyota Industries Corporation

Annual Report 2007

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

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

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

Balance at March 31, 2004

Retainedearnings

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

Foreigncurrencytranslation
adjustments

Subscription
rights to shares

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

Dividens paid
Bonuses to directors and corporate auditors

–
–

–
–

(7,948)
(331)

–
–

–
–

–
–

–
–

–
–

–
–

Net income for the period
Repurchase of treasury stock

–
–

–
–

43,357
–

–
(52)

–
–

–
–

–
–

–
–

–
–

Exercise of stock options

–

(142)

–

1,301

–

–

–

–

–

–

–

(4,419)

–

–

–

–

–

–

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

–

–

–

–

57,139–10,078–5,977

80,462–

105,600–

325,330(11,793)(16,726)–

591,218–––

29,861–––40,904
–

(406)

–

–

–

–

–

–

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

–

–

–

–

(1,821)

–

–

–

–

–

–

Net income for the period
Repurchase of treasury stock

–
–

–
–

47,077
–

–
(52)

–
–

–
–

–
–

–
–

–
–

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

–

65

–

2,415

–

–

–

–

–

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

–

–

–

–

455,972

–

4,024

–

8,366

80,462

105,665

358,385(14,363)

1,047,190–

33,886–49,270

–
–
–

–
–
–

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

–
–
–

–
–
–

–
–
–

–
–
–

–
–
–

–
–
–

–

–

(1,673)

–

–

–

–

–

–

–
–
–

–
–
–

(71)
59,468–––(35,524)

–
–
–

–
–
–

–
–
–

–
–
–

–
–
–

–

(610)

–

2,634

–

–

–

–

–

–

110,602(0)

19,026202

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

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

Foreigncurrencytranslation
adjustments

Subscription
rights to shares

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

$–
–

$287,051–$––$417,373
–

–

–

–

¥80,462¥105,055¥402,431

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

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

$681,598–

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

–
–

–
–

–
–

–
–

–
–

–
–

–

–

(14,172)

–

–

–

–

–

–

–
–
–
–

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

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

–
936,909$(400,282) $9,807,649

(6)
$(6)

161,170$448,221

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

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

Toyota Industries Corporation

Annual Report 200769

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

Millions of yen

2007

2006

2005

2007

¥ 108,399¥ 80,635¥ 70,353$ 918,248

Depreciation and amortization

106,060

87,28770,213

898,433

Impairment loss of fixed assets

–

–

558

–

(250)

101

371

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

Interest expenses

17,855

11,955

9,735

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

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

Increase (decrease) in allowance for doubtful accounts

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

Increase (decrease) in payables

15,022

21,376

26,893

127,258

Others, net

17,238

12,161(4,063)146,027

Subtotal

187,642

144,055

109,561

1,589,520

Interest and dividends income received

41,29429,236

21,971

349,808

Interest expenses paid

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

Income taxes paid

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

177,467

131,784

100,095

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

7,624

8,415

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

Proceeds from sales of investment securities

8,419

2,045

3,299

71,321

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

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

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

4,490

3,264

2,783

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

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

Increase (decrease) in commercial paper–

29,520(15,000)–

Proceeds from long-term loans

40,00438,82440,785

338,880

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

Proceeds from issuances of bonds

25,107

68,73050,000212,687

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

Payments for repurchase of treasury stock(35,524)

(52)

(52)

(300,926)

Cash dividends paid

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

Cash dividends paid to minority shareholders(1,039)

(854)

(667)

(8,809)Others, net

7,388

7,357

3,554

62,584(167,295)

Net cash used in investing activities
Cash flows from financing activities

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

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

2,700

117

1,438

22,875

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

12,06023,323(34,113)

Cash and cash equivalents at beginning of year

112,596

100,535

77,212

953,805

Cash and cash equivalents at end of year

¥108,569¥112,596¥100,535$ 919,691

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

70

Toyota Industries Corporation

Annual Report 2007

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

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

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

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

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

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

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

Toyota Industries Corporation

Annual Report 200771

generally with original maturities of three months or less, that arereadily convertible to known amounts of cash and are so near
maturity that they present insignificant risk of changes in value
because of changes in interest rates.

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

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

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

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

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

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

(7) Property, plant and equipment, anddepreciation
Property, plant and equipment are stated at cost. Depreciation
expenses of property, plant and equipment are computed
mainly by the declining-balance method for the Company andJapanese subsidiaries and by the straight-line method for foreignsubsidiaries.
Significant renewals and additions are capitalized at cost.
Repairs and maintenance are charged to income as incurred.
Accumulated depreciation as of March 31, 2007 and 2006
was ¥651,651 million (US$5,520,147 thousand) and ¥585,994
million, respectively.

(8) Intangible assets and amortization
Amortization of intangible assets is computed using the straightline method. Software costs for internal use are amortized by thestraight-line method over their expected useful lives (mainly five
years).
Goodwill, if material, is amortized principally over less than
20 years on a straight-line basis, while immaterial goodwill ischarged to income as incurred.
Accumulated amortization of intangibles and goodwill as ofMarch 31, 2007 and 2006 was ¥70,124 million (US$594,023
thousand) and ¥53,552 million, respectively.

(9) Impairment of fixed assets
Calculation of the impairment of fixed assets is based onreasonable and supportable assumptions and projection of the72

Toyota Industries Corporation

Annual Report 2007

Toyota Industries accrues an amount which is considered to be
incurred in the period based on the estimated projected benefit
obligations and estimated pension assets at the end of the year.
To provide for the retirement benefits for directors and corporate
auditors, an amount which is calculated at the end of the year as
required by an internal policy describing the retirement benefits
for directors and corporate auditors is accrued.

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

(15) Consumption tax
The consumption tax under the Japanese Consumption Tax Law
withheld by Toyota Industries on sales of goods is not includedin the amount of net sales in the accompanying consolidated
statements of income, and the consumption tax paid by Toyota
Industries under the law on purchases of goods and services,and expenses is not included in the related amount.

(16) Hedge accounting(a) Method of hedge accounting
Mainly the deferral method of hedge accounting is applied. In thecase of foreign currency forward contracts and foreign currency
option contracts, the hedged items are translated at contracted
forward rates if certain conditions are met.
(b) Hedging instruments and hedged items
Hedging instruments: Derivatives instruments (interest rate
swaps, foreign currency forwards andforeign currency option contracts)

Hedged items:

Risk of change in interest rate on
borrowings and risk of change inforward exchange rate on transactions
denominated in foreign currencies(assets and liabilities, and forecasted
transactions)(c) Hedging policy
Hedging transactions are executed and controlled based on
Toyota Industries’ internal policy and Toyota Industries is hedging
interest rate risks and foreign currency risks. Toyota Industries’
hedging activities are reported periodically to a director
responsible for accounting.
(d) Method used to measure hedge effectivenessHedge effectiveness is measured by comparing accumulatedchanges in market prices of hedged items and hedging
instruments or accumulated changes in estimated cash flows
from the inception of the hedge to the date of measurements
performed. Currently it is considered that there are highcorrelations between them.
(e) Others
Due to the fact that counterparties to Toyota Industries represent
major financial institutions which have high creditworthiness,
Toyota Industries believes that the overall credit risk related to its
financial instruments is insignificant.

(17) Income taxes
The provision for income taxes is computed based on the pretax
income included in the consolidated statements of income. The
asset and liability approach is used to recognize deferred tax
liabilities and assets for the expected future tax consequences of
temporary differences between the carrying amounts and the tax
bases of assets and liabilities.
Valuation allowances are recorded to reduce deferred tax
assets when it is more likely than not that a tax benefit will not berealized.

(18) Net income per share
The computation of basic net income per share is based on theweighted-average number of outstanding shares of common
stock. The calculation of diluted net income per share is similar
to the calculation of basic net income per share, except that theweighted-average number of shares outstanding includes the
additional dilution from potential common stock equivalents suchas subscription rights to shares. Cash dividends per share shownin the statements of income are the amounts applicable to therespective years.

3. Change in accounting policy and adoption of new accounting standards
For the year ended March 31, 2007
Accounting Standard for Directors’ Bonus
Effective from the fiscal year beginning April 1, 2006, Toyota
Industries applied Financial Accounting Standard No. 4“Accounting Standard for Directors’ Bonus” issued on November
29, 2005 by the Accounting Standards Board of Japan. As
a result, ordinary income and income before income taxes
and minority interests decreased by ¥554 million (US$4,697
thousand).
Accounting Standards for Presentation of Net Assets in
the Balance Sheet
Effective from the fiscal year beginning April 1, 2006, Toyota
Industries applied Financial Accounting Standard No. 5“Accounting Standards for Presentation of Net Assets in the
Balance Sheet” and its Implementation Guidance No. 8 “Guidanceon Accounting Standards for Presentation of Net Assets in the
Balance Sheet” issued on December 9, 2005 by the AccountingStandards Board of Japan. If the previous accounting policy had
been applied, net assets at March 31, 2007 would have been
¥1,751,402 million (US$14,836,104 thousands).
Accounting Standard for Share-Based Payment
Effective from the fiscal year beginning April 1, 2006, Toyota
Industries applied Financial Accounting Standard No. 8“Accounting Standard for Share-based Payment” issued on
December 27, 2005 by the Accounting Standards Board ofJapan, and its Implementation Guidance No. 11 “Guidanceon Accounting Standard for Share-based Payment” issued on
May 31, 2006 by the Accounting Standards Board of Japan.

As a result, ordinary income and income before income taxes
and minority interests decreased by ¥202 million (US$1,719
thousand).
Accounting Standard for Business Combinations
Effective from the fiscal year beginning April 1, 2006, Toyota
Industries applied Financial Accounting Standard for Business
Combinations issued on October 31, 2003 by the BusinessAccounting Council in Japan, and Financial Accounting Standard
No. 7 “Accounting Standard for Business Divestitures” andthe related Implementation Guidance No. 10 “Guidance on
Accounting Standard for Business Combinations and AccountingStandard for Business Divestitures” issued on December 27,
2005 by the Accounting Standards Board of Japan.

For the year ended March 31, 2005
Impairment of fixed assets
Toyota Industries has applied Accounting Standards for
Impairment of Fixed Assets (Opinions Concerning Establishmentof Accounting Standards for Impairment of Fixed Assets) issued
on August 9, 2002 by the Business Accounting Council in Japan,
and the application guideline for Accounting Standards for
Impairment of Fixed Assets (the Financial Accounting Standard
Implementation Guideline No. 6 issued on October 31, 2003),
to the consolidated financial statements for fiscal 2005, as early
adoption of such standards and guidelines, which are effective forfiscal years beginning on and after April 1, 2005, was permitted
for the consolidated accounting for the fiscal year ended March
31, 2005.

Toyota Industries Corporation

Annual Report 200773

4. Marketable securities(1) As of and for the year ended March 31, 2007:(a) Other securities with readily determinable fair value as of March 31, 2007 are as follows:
Millions of yen
Acquisition
cost

Carrying
amountThousands of U.S. dollars
Difference

Acquisition
cost

Carrying
amountDifference

Securities with carrying amountexceeding acquisition cost:
Stocks¥223,782 ¥2,152,078 ¥1,928,296$1,895,659 $18,230,233 $16,334,574

Subtotal

223,782

2,152,078

1,928,296

1,895,659 18,230,233 16,334,574

Stocks

3,716

2,910

(806)

31,48424,654(6,831)

Subtotal

3,716

2,910

(806)

31,48424,654(6,831)

Securities with carrying amountnot exceeding acquisition cost:

Total¥227,499 ¥2,154,989 ¥1,927,490$1,927,143 $18,254,887 $16,327,744(b) Other securities sold during the year ended March 31, 2007 are as follows:
Millions of yen

Thousands of U.S. dollars

Proceeds

Realized gains

Realized losses

Proceeds

Realized gains¥8,419¥4,305–$71,321$36,468

Realized losses–(c) The carrying amount of securities (excluding held-to-maturity bonds which are included within securities with fair value) without readily
determinable fair values as of March 31, 2007 are as follows:
Carrying amountMillions of yen

Thousands of
U.S. dollars

Domestic unlisted stocks excluding over-the-counter stocks¥17,659$149,594

Money management funds

30,065

254,687

Other securities(2) As of and for the year ended March 31, 2006:(a) Other securities with readily determinable fair value as of March 31, 2006 are as follows:
Millions of yen
Acquisition
cost

Carrying
amountDifference

Securities with carrying amount exceeding acquisition cost:
Stocks¥212,297 ¥1,956,653 ¥1,744,356

Subtotal

212,297

1,956,653

1,744,356

Stocks

1,808

1,339

(469)

Subtotal

1,808

1,339

(469)

Securities with carrying amount not exceeding acquisition cost:

Total¥214,105 ¥1,957,992 ¥1,743,887(b) Other securities sold during the year ended March 31, 2006 are as follows:
Millions of yen

74

Proceeds

Realized gains

Realized losses¥2,516¥1,280¥1

Toyota Industries Corporation

Annual Report 2007

(c) The carrying amount of securities (excluding held-to-maturity bonds which are included within securities with fair value) without readily
determinable fair values as of March 31, 2006 are as follows:
Carrying amountMillions of yen

Other securities
Domestic unlisted stocks excluding over-the-counter stocks¥17,800

Money management funds

45,002(d) Redemption schedule of securities which have maturities within other securities as of March 31, 2006 is as follows:
Millions of yen
Over 1 year
within5 years

Within1 yearOver 5 years
within
10 yearsOver
10 years

Bonds
Government bonds
Total

¥0

–

–

–

¥0

¥–

¥–

¥–

5. Inventories
Inventories as of March 31, 2007 and 2006 consist of the following:Thousands of
U.S. dollars

Millions of yen

2007

2006

2007

Finished goods¥ 51,144¥ 40,702$ 433,247

Raw materials

20,32516,097

172,174

Work in process

37,84137,089320,554

Supplies

11,426

10,64596,792¥120,737¥104,534$1,022,767

Total

6. Property, plant and equipment
Accumulated depreciation as of March 31, 2007 and 2006 is as follows:
Thousands of
U.S. dollars

Millions of yen

2007

2006

2007

Buildings and structures¥146,690¥132,151$1,242,616

Machinery, equipment and vehicles

437,123

393,3073,702,870

Tools, furniture and fixtures

67,83860,536574,661

Toyota Industries Corporation

Annual Report 200775

7. Long-term debt
(1) Long-term debt as of March 31, 2007 and 2006 consists of the following:Thousands of
U.S. dollars

Millions of yen

2007

2006

2007

2.70% bonds due 2008 without collateral¥ 30,000¥ 30,000$ 254,130

2.15% bonds due 2008 without collateral

20,00020,000169,420

1.50% bonds due 2006 without collateral–

15,000

–1.94% bonds due 2009 without collateral

15,00015,000127,065

1.91% bonds due 2010 without collateral

20,00020,000169,420

0.41% bonds due 2007 without collateral

30,00030,000254,130

1.13% bonds due 2012 without collateral

50,00050,000423,549

1.03% bonds due 2012 without collateral

30,00030,000254,130

1.46% bonds due 2014 without collateral

20,00020,000169,420

1.01% bonds due 2010 without collateral

20,00020,000169,420

1.66% bonds due 2015 without collateral

30,00030,000254,130

0.49-3.24% medium-term notes due 2009-2010

25,77018,831

218,304

1.95% bonds due 2016 without collateral

19,990–169,336

Long-term bank loans

145,940

109,268

1,236,257

Less: current portion of long-term debt

(64,372)(18,000)(545,302)¥392,328¥390,100$3,323,409

The Company:

Consolidated subsidiaries:

Total(2) Annual maturities of long-term debt as of March 31, 2007 are as follows:

Thousands of
U.S. dollars

Year ending March 31

Millions of yen

2008¥ 64,372 $ 545,302

2009

29,299248,198

2010

32,885278,576

2011

61,185518,3032012

37,907321,1122013 and thereafter

231,049

1,957,220

Total¥456,701 $3,868,711

8. Assets pledged as collateral(1) Assets pledged as collateral as of March 31, 2007 and 2006 are as follows:
Thousands of
U.S. dollars

Millions of yen

2007

2006

2007

¥56,710¥57,035$480,390

Land

1,989

2,952

16,851

Buildings and structures

1,160

1,798

9,830

–

244

–

¥59,859¥62,031$507,071

Investments in securities

Trade notes and accounts receivable
Total

76

Toyota Industries Corporation

Annual Report 2007

(2) Secured liabilities as of March 31, 2007 and 2006 are as follows:
Thousands of
U.S. dollars

Millions of yen

2007

2006

2007

Other current liabilities¥21,736¥20,805$184,133

Short-term bank loans

138

363

1,175

Long-term bank loans

67

155

568

¥21,942¥21,324$185,876

Total

9. Contingent liabilities
Toyota Industries is contingently liable for guarantees as of March 31, 2007 and 2006 as follows:
Thousands of
U.S. dollars

Millions of yen

2007

2006

2007

¥4,200¥1,000$35,578

Guarantees given by consolidated subsidiaries

455

1,179

3,862

Guarantee forwards given by the Company

473

543

4,007

Guarantees given by the Company

10. Export discount bills
Export discount bills as of March 31, 2007 and 2006 are as follows:
Thousands of
U.S. dollars

Millions of yen

2007

Export discount bills

¥443

2006

¥395

2007

$3,761

11. Net assets
Under the Japanese Corporate Law, amounts equal to 10% of
the sum of the cash dividends and other external appropriations
paid by the Company and its domestic subsidiaries must be set
aside as a legal reserve until it equals 25% of common stock.
The legal reserve may be used to reduce a deficit or may betransferred to common stock by taking appropriate corporate
action. In consolidation, the legal reserves of the Company andits domestic subsidiaries are accounted for as retained earnings.
The year-end cash dividend is approved at the Ordinary
General Meeting of Shareholders of the Company held after theclose of the fiscal year to which the dividend is applicable. In
addition, interim cash dividends may be paid upon resolutionof the Board of Directors, subject to limitations imposed by theJapanese Corporate Law.
Proceeds from the conversion of convertible bonds havebeen accounted for in approximately equal amounts as common
stock and capital surplus. At least 50% of the proceeds havebeen accounted for as common stock, in accordance with theprovisions of the Japanese Corporate Law.

12. Research and development expenses
Research and development expenses, which are included inselling, general and administrative expenses and manufacturingcosts, amounted to ¥34,548 million (US$292,657 thousand),¥31,166 million and ¥30,051 million for the years ended March
31, 2007, 2006 and 2005, respectively.

Toyota Industries Corporation

Annual Report 200777

13. Derivative instruments(1) Qualitative disclosure about derivatives(a) Contents of derivative instruments into which Toyota
Industries entered, policy with respect to entering into
derivative instruments, and purpose of using derivative
instruments:
Toyota Industries uses interest rate swap agreements to
reduce interest rate risks on borrowings. Toyota Industries
also uses foreign currency forward contracts and foreign
currency option contracts to hedge foreign currency
risks on transactions denominated in foreign currencies(receivables and payables and forecasted transactions).
(b) Contents of risks related to derivative instruments:
Interest rate swaps, foreign currency forward contracts
and foreign currency option contracts into which Toyota
Industries entered have risks of fluctuations in interest rates
and in foreign currency exchange rates. Due to the factthat counterparties to Toyota Industries represent major
financial institutions which have high creditworthiness,
Toyota Industries believes that the overall credit risk related
to its financial instruments is insignificant.
(c) Controls in place over transactions handling derivative
instruments:
Hedging transactions are executed and controlled basedon Toyota Industries’ internal policy and Toyota Industries’
hedging activities are reported periodically to a director
responsible for accounting.

(2) Quantitative disclosure about derivatives
Toyota Industries omitted this information because hedge
accounting is applied to all of the derivative instruments into
which Toyota Industries entered.

14. Retirement benefits(1) Outline of retirement benefit plans
The Company and its domestic subsidiaries maintain tax-qualified
pension plans, lump-sum indemnities plans and welfare pension
fund plans, all of which are non-contributory defined benefit
pension plans. In addition, certain foreign subsidiaries maintainnon-contributory defined benefit pension plans. Since 1987,
the Company has been transferring the covering percentagesof its pension plan from its lump-sum indemnities plan to its
tax-qualified pension plan. As of March 31, 2007 and 2006, its
tax-qualified pension plan covers 50% of total plans. Also, theCompany established an employee retirement benefit trust. In
April 2003, the Company transferred a portion of the lump-sum
indemnities plan to a defined contribution pension plan.

(2) Components of allowance for retirement benefits as of March 31, 2007 and 2006 are as follows:
Thousands of
U.S. dollars

Millions of yen

2007

2006

2007

Benefit obligation¥150,203¥138,808$1,272,368

Plan assets(118,227)(105,552)(1,001,503)

Unfunded benefit obligation

31,97533,256

270,866

Unrecognized actuarial gains or losses

2,907

2,443

24,630

Unrecognized loss in prior service obligation

(331)

(614)

(2,805)

Net amount recognized on the balance sheets

34,55235,085

292,691

Prepaid pension expenses(6,212)(6,006)(52,628)¥ 40,764¥ 41,092$ 345,319

Allowance for retirement benefits

Certain subsidiaries use the simplified method to determine benefit obligations. Prepaid pension expenses are included in otherinvestments and other assets. Allowance for retirement benefits on the consolidated balance sheets includes ¥4,717 million (US$39,963
thousand) and ¥5,443 million of allowance for retirement and severance benefits for directors and corporate auditors as of March 31,
2007 and 2006, respectively.

78

Toyota Industries Corporation

Annual Report 2007

(3) Components of retirement benefit expenses for the years ended March 31, 2007, 2006 and 2005 are as follows:
Thousands of
U.S. dollars

Millions of yen

2007

2006

2005

2007

Service cost

¥ 9,171¥ 7,921¥ 7,445$77,688

Interest cost

5,036

4,079

3,986

42,663

Expected return on plan assets(3,573)(2,435)(2,196)(30,272)

Amortization of prior service obligation

398

94

85

3,372

Amortization of unrecognized actuarial gains or losses

(153)

778

1,030

(1,296)¥10,878¥10,438¥10,351$92,155

Retirement benefit expenses

Retirement expenses of subsidiaries which adopted the simplified method are included in service cost.
(4) Assumptions used for calculation of retirement benefits for the years ended March 31, 2007, 2006 and 2005 are as follows:
2007

2006

2005

Discount rate

2.00%

2.00%

2.00%

Expected return on plan assets

3.00%

3.00%

3.00%

6–11 years

6–11 years

Method of attribution of estimated retirement benefits
to periods of employee service: Straight-line method

Amortization period of prior service obligation

6–11 years — Straight-line method over
the remaining service
period of employees

Amortization period of unrecognized actuarial gains
or losses

20 years

20 years

20 years — Straight-line method over
the average remaining
service period of
employees starting fromthe following year

(5) Plan assets relating to welfare pension fund under multiemployer pension plan:
Amounts of plan assets calculated based on proportion of contribution to the fund made by each domestic subsidiary are ¥12,473 million(US$105,659 thousand) and ¥11,213 million as of March 31, 2007 and 2006, respectively.

Toyota Industries Corporation

Annual Report 200779

15. Stock options(1) Stock option expenses recorded in the fiscal year and class of options
Selling, general and administrative expenses

Millions of yen

Thousands of
U.S. dollars¥202$1,719(2) Stock option details, number of stock options and state of fluctuation(a) Stock option details
2007

2006

Company name

The Company

The Company

The Company

Position and number ofgrantees

Directors: 17
Managing officers and employees: 152

Directors: 30
Employees: 134

Directors: 30
Employees: 135

Class and number ofshares*802,000 shares of common stock

791,000 shares of common stock

775,000 shares of common stock

Date of issue

August 1, 2006

August 1, 2005

August 2, 2004

Same as left

Same as left

Vesting condition

1. Grantee must be employed as adirector, managing officer or regular
employee of the Company at the timeof exercise. However, this does not
apply if no more than 18 months haveelapsed after retirement or resignationfrom the Company.
2. Other conditions of exercise shall bedecided as prescribed by the Contract
for Allotment of Stock Acquisition
Rights concluded by the Company andgrantee in accordance with resolutions
at the Ordinary General Meeting of
Shareholders and resolutions on theissue of stock acquisition rights by the
Board of Directors.

Service period

From August 1, 2006 to July 31, 2008

From August 1, 2005 to June 30, 2007

From August 2, 2004 to June 30, 2006

Exercise period

From August 1, 2008 to July 31, 2012

From July 1, 2007 to June 30, 2011

From July 1, 2006 to June 30, 2010

Company name

The Company

The Company

Position and number ofgrantees

Directors: 30
Employees: 128

Directors: 30
Employees: 115

Class and number ofshares*750,000 shares of common stock

728,000 shares of common stock

Date of issue

August 1, 2003

August 1, 2002

1. Grantee must be employed as adirector, managing officer or regular
employee of the Company at the timeof exercise. However, this does not
apply if no more than 18 months haveelapsed after retirement or resignationfrom the Company.
2. Other conditions of exercise shall bedecided as prescribed by the Contract
for Allotment of Stock Acquisition
Rights concluded by the Company andgrantee in accordance with resolutions
at the Ordinary General Meeting of
Shareholders and resolutions on theissue of stock acquisition rights by the
Board of Directors.

1. Grantee must be employed as adirector, managing officer or regular
employee of the Company at the timeof exercise. However, this does not
apply if no more than six months haveelapsed after retirement or resignationfrom the Company.
2. Other conditions of exercise shall bedecided as prescribed by the Contract
for Allotment of Stock Acquisition
Rights concluded by the Company andgrantee in accordance with resolutions
at the Ordinary General Meeting of
Shareholders and resolutions on theissue of stock acquisition rights by the
Board of Directors.

Service period

From August 1, 2003 to June 30, 2005

From August 1, 2002 to June 30, 2004

Exercise period

From July 1, 2005 to June 30, 2009

From July 1, 2004 to June 30, 2008

2004

Vesting condition* Number of options granted by class are listed as number of shares.

80

2005

Toyota Industries Corporation

Annual Report 2007

2003

(b) Number of stock options and state of fluctuation
Stock options are those outstanding in the fiscal year and are listed as the number of shares.
(i) Number of stock options
Non-exercisable stock options
2007

Stock options outstanding at the end of the previous fiscal year

2006

2005

2004

2003

–

791,000

775,000––

802,000

–

–

–

–

Forfeitures

–

–

–

–

–

Conversion to exercisable stock options––

775,000––

802,000

791,000

–

–

–

2007

2006

Stock options granted

Stock options outstanding at the end of the fiscal year
Exercisable stock options

2005

2004

2003

Stock options outstanding at the end of the previous fiscal year

–

–

–

31,000118,000

Conversion from non-exercisable stock options––

775,000––

Stock options exercised––

736,500

25,00010,000Forfeitures

–

–

–

–

–

Stock options outstanding at the end of the fiscal year––

38,5006,000

108,000(ii) Price of options
Exact yen amounts

Exercise price

2007

2006

2005

2004

2003

¥4,642¥3,306¥2,652¥2,074¥1,982––¥4,467¥5,467¥5,218

759

–

–

–

–

Average market price of the stock at the time of exercise
Fair value of options on grant date(3) Method for estimating fair value of stock options
The method for estimating fair value of stock options granted for fiscal 2007 is as follows:(a) Valuation method used: Black-Scholes model(b) Principal basic values and estimation methods
2007

Share price fluctuations*1

20.63%

Projected remaining period *2
Projected dividend

4 years*3

Non-risk interest rate

¥40/share
*4

1.21%

*1 Computed based on actual share prices during a four-year period (from August 2002 to July 2006).
*2 Because of a lack of accumulated data and difficulty in making rational estimates, it is assumed the rights
are excercised at the midpoint of the exercise period.
*3 Based on the year-end dividend for the fiscal year ended March 31, 2006 and the estimated interim
dividend on the grant date.
*4 Yields on government bonds for the period corresponding to the projected remaining period.

(4) Method for estimating the number of confirmed stock option rights
Specifically, because of the difficulty in rationally estimating the number of expired rights in the future, a method has been adopted thatreflects actual past expirations.

Toyota Industries Corporation

Annual Report 200781

16. Income taxes(1) The significant components of deferred tax assets and liabilities as of March 31, 2007 and 2006 are as follows:
Thousands of
U.S. dollars

Millions of yen

2007

2006

2007

¥ 15,347¥ 15,560

Trade receivables

2,464

2,867

20,880Accrued expenses

7,465

6,739

63,244

Net operating loss carry-forwards for tax purposes

2,039

2,012

17,274

Depreciation

6,350

4,538

53,794

Securities

2,066

2,528

17,504Enterprise tax payable

1,692

1,045

14,336

Other

12,741

14,119107,931

Subtotal

50,16849,410424,974

Deferred tax assets:
Allowance for retirement benefits

Less: valuation allowance$

130,010(2,742)(2,705)(23,232)

47,42546,705

401,742

Other securities

768,659695,354

6,511,303

Depreciation

6,155

6,004

52,147

Land

1,111

1,111

9,419

Reserve for advanced depreciation

502

519

4,256

Reserve for special depreciation

590

678

5,001

Total deferred tax assets
Deferred tax liabilities:

(26)

3,459

(228)

Total deferred tax liabilities

Other

776,992

707,128

6,581,896

Net deferred tax liabilities¥(729,567)¥(660,423)$(6,180,154)

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

Millions of yen

Current assets — deferred tax assets
Investments and other assets — deferred tax assets

2007

2006

2007

¥ 17,924¥ 18,096

7,435

6,842

$

151,835
62,986

Current liabilities — deferred tax liabilities(3,162)(3,857)(26,788)

Long-term liabilities — deferred tax liabilities(751,764)(681,503)(6,368,186)

Net deferred tax liabilities¥(729,567)¥(660,423)$(6,180,154)(2) Reconciliations of differences between the statutory rate of income taxes and the effective rate of income taxes for the years ended
March 31, 2007 and 2006 are as follows:
2007

Statutory rate of income taxes

2006

39.9%

39.9%

Dividends income and others permanently not recognized as taxable income

(5.2)

(5.0)

Other

3.6

0.2

38.3%

35.1%

Addition (reduction) in taxes resulting from:

Effective rate of income taxes

82

Toyota Industries Corporation

Annual Report 2007

17. Leases(1) Finance leases (as a lessee) which do not transfer ownership of leased properties to lessees(a) Pro forma information regarding the leased properties such as acquisition cost and accumulated depreciation, which are not reflectedin the accompanying consolidated balance sheets under finance leases as of March 31, 2007 and 2006 is as follows:
Thousands of
U.S. dollars

Millions of yen

2007

2006

2007

¥14,047¥14,894$118,999

Machinery and equipment:
Acquisition cost equivalents
Accumulated depreciation equivalents
Machinery and equipment net balance equivalents

7,830

7,838

66,335

6,217

7,056

52,665

13,667

13,603

115,777

Tools, furniture and fixtures:
Acquisition cost equivalents
Accumulated depreciation equivalents
Tools, furniture and fixtures net balance equivalents

6,396

6,866

54,184

7,271

6,736

61,593

154

122

1,305

Software:Acquisition cost equivalents
Accumulated depreciation equivalents

77

73

660

76

49

644

¥13,564¥13,842$114,902

Software net balance equivalents
Total net leased properties

Acquisition cost equivalents include the imputed interest expense portion because the percentage which is computed by dividing
future minimum lease payments by total balance of property, plant and equipment at year-end is immaterial.
(b) Pro forma information regarding future minimum lease payments as of March 31, 2007 and 2006 is as follows:
Thousands of
U.S. dollars

Millions of yen

2007

2006

2007

Due within one year

¥ 4,342¥ 4,253$ 36,788

Due after one year

9,221

9,588

78,114¥13,564¥13,842$114,902

Total

The amount equivalent to future minimum lease payments as of the end of the year includes the imputed interest expense portion
because the percentage which is computed by dividing future minimum lease payments by total balance of property, plant andequipment at year-end is immaterial.
(c) Total lease payments for the years ended March 31, 2007, 2006 and 2005 are as follows:
Millions of yen

Thousands of
U.S. dollars

2007¥5,212$44,153

2006

5,235

–

2005

4,926

–

Pro forma depreciation expenses, which are not reflected in the accompanying consolidated statements of income, are computed mainlyby the straight-line method, which assumes zero residual value and leasing term to be useful lives for the years ended March 31, 2007,
2006 and 2005, and are equivalent to the amount of total lease payments of the above.

(2) Operating leases (as a lessee)
Pro forma future lease payments under operating leases as of March 31, 2007 and 2006 are as follows:
Thousands of
U.S. dollars

Millions of yen

Due within one year

2007

2006

2007

¥ 5,068¥ 4,366$ 42,933

Due after one year

18,307

12,272

155,086

Total¥23,376¥16,639$198,019

Toyota Industries Corporation

Annual Report 200783

(3) Finance leases (as a lessor) which do not transfer ownership of leased properties to lessees(a) Information regarding leased properties such as acquisition cost and accumulated depreciation under finance leases as of March 31,
2007 and 2006 is as follows:
Thousands of
U.S. dollars

Millions of yen

Machinery and equipment:
Acquisition cost
Accumulated depreciation
Total net leased property

2007

2006

2007

¥10,013
5,711¥ 4,301¥7,356
4,030¥3,325$84,820
48,385$36,435(b) Pro forma information regarding future minimum lease income as of March 31, 2007 and 2006 is as follows:
Thousands of
U.S. dollars

Millions of yen

Due within one year
Due after one year
Total

2007

2006

2007

¥1,161
5,166¥6,328¥1,256
3,307¥4,563$ 9,842
43,768$53,609

The amount equivalent to future minimum lease income includes the imputed interest income portion because the percentage which iscomputed by dividing future minimum lease income by total balance of property, plant and equipment at year-end is immaterial.
(c) Total lease receipt and depreciation expenses for the years ended March 31, 2007 and 2006 are as follows:
Thousands of
U.S. dollars

Millions of yen

Total lease payments to be received
Depreciation expenses

2007

2006

2007

¥2,4502,391¥1,703
1,602$20,757
20,255(4) Operating leases (as a lessor)
Pro forma information regarding future minimum rentals under operating leases as of March 31, 2007 and 2006 is as follows:
Millions of yen

Due within one year
Due after one year
Total

Thousands of
U.S. dollars

2007

2006

2007

¥14,835
23,639¥38,475¥10,722
21,611¥32,333$125,670
200,252$325,922

18. Changes in net assets(1) Common stock outstanding for the year ended March 31, 2007:
SharesBalance at March 31, 2006
Increase
Decrease
Balance at March 31, 2007

325,840,640––
325,840,640(2) Treasury stock outstanding for the year ended March 31, 2007:
SharesBalance at March 31, 2006
Increase due to purchase of treasury stock in accordance with the resolutions at
Ordinary General Meeting of Shareholders held on June 22, 2006
Increase due to purchase of odd stock
Decrease due to exercise of stock options
Balance at March 31, 200784

Toyota Industries Corporation

Annual Report 2007

6,520,194
8,000,000
16,471(771,500)
13,765,165

(3) Subscription rights to shares outstanding for the year ended March 31, 2007:

The Company

Millions of yen

Thousands of
U.S. dollars¥202$1,719(4) Dividends(a) Dividends paid
Total dividends

Dividends per share

Resolutions

Class of shares

Millions of yen

Thousands of
U.S. dollars

Ordinary General Meeting of
Shareholders held on June 22, 2006

Common stock

6,386

54,09820

0.17

March 31,2006

June 23,
2006

Board of Directors meeting held on
October 31, 2006

Common stock

6,864

58,14922

0.19

September 30,
2006

November 27,
2006

Yen

U.S. dollars

Record date

Effective date(b) Dividends with a record date in the fiscal year under review for which the effective date falls in the following fiscal year
Total dividends
Resolutions

Class of shares

Ordinary General
Common stock
Meeting of Shareholders
held on June 21, 2007

Dividends per share

Millions of yen

Thousands of
U.S. dollars

Source ofdividends

8,738

74,020Retainedearnings

Yen

U.S. dollars

Record date

Effective date

28

0.24

March 31,2007

June 22,2007

19. Subsequent events
1. In January 2006, the Company acquired a 43.1% equity
stake in Wanbishi Archives Co., Ltd. In consideration of the
future growth potential of Wanbishi Archives, Toyota Industries
subsequently acquired all remaining shares in that company froma fund operated by Tokio Marine Capital Co., Ltd. and madeWanbishi Archives a subsidiary.
(1) Outline of Wanbishi Archives Co., Ltd.
(a) Main businesses
Engages in comprehensive information managementbusiness (provides services for safe storage, management,collection and delivery of internal company data, including
crucial documents and magnetic tapes) and insurance
service business.
(b) Capital: ¥4,000 million (as of March 31, 2007)(c) Total number of shares issued: 330,000 shares (as ofMarch 31, 2007)(d) Net sales: ¥19,309 million (year ended March 31, 2007)

2. At a meeting of the Board of Directors held on May 11, 2007,
the board decided that the Company would respond to a tender
offer by DENSO Corporation for shares of Aisan Industry Co.,
Ltd. held by the Company.
Consequently, on June 12, 2007, a report on the results of the
response to the tender was received from DENSO and on June18, 2007, the Company transferred 4,819,000 shares of Aisan
Industry at ¥1,350 per share.
As a result, the Company will post the ¥5,862 million gain on
the sale of investment securities as an extraordinary gain in thefiscal year ending March 2008.
3. On June 21, 2007, the shareholders of the Company
authorized payment of a year-end cash dividend to shareholdersof record as of March 31, 2007 of ¥28 (US$0.24) per share, ora total of ¥8,738 million (US$74,020 thousand). Cash dividends
for the year totaled ¥50 (US$0.42) per share, including an interim
dividend of ¥22 (US$0.18).

(2) Date of stock acquisition: May 25, 2007
(3) Number of shares acquired, acquisition price and percentageof shares held after acquisition(a) Number of shares acquired: 187,000 shares(b) Acquisition price: ¥33,007 million(c) Percentage of shares held after acquisition: 100%

Toyota Industries Corporation

Annual Report 200785

20. Segment information(1) Business segments
As of and for the years ended March 31, 2007, 2006 and 2005:
Thousands of
U.S. dollars

Millions of yen

2007

2006

2005

2007

Sales:
Automobile
Outside customer sales¥ 904,893 ¥ 746,795 ¥ 616,200

Intersegment transactions$ 7,665,345

21,134

20,76818,222

179,027

926,028

767,564

634,4227,844,371

767,237

595,236

503,989

6,499,258

805

482

148

6,823

768,042595,718

504,138

6,506,081

Outside customer sales

89,47065,145–757,908

Intersegment transactions

7,275

6,355

–

61,632

96,746

71,500–819,540

58,40349,78943,902494,735

Materials Handling Equipment
Outside customer sales
Intersegment transactions

Logistics

Textile Machinery
Outside customer sales
Intersegment transactions

5

22

24

50

58,40949,811

43,927494,785

Outside customer sales

58,392

48,98877,446494,641

Intersegment transactions

21,85520,851

21,579185,141

80,24869,83999,025

679,783

1,929,475

1,554,436

1,281,514

16,344,560(51,077)(48,480)

OthersSubtotal
Elimination of intersegment transactions
Total(39,975)(432,674)¥1,878,398 ¥1,505,955 ¥1,241,538$15,911,886¥ 892,435 ¥ 747,468 ¥ 611,659$ 7,559,813

Operating costs and expenses:
Automobile
Materials Handling Equipment

720,840

556,950

478,053

6,106,234

Logistics

94,96569,913–

804,454

Textile Machinery

57,32749,882

44,698

485,621

Others73,92066,107

93,782

626,177(51,046)(48,407)

Elimination of intersegment transactions
Total(39,775)(432,415)¥1,788,443 ¥1,441,915 ¥1,188,418$15,149,883¥$

Operating income (loss):
33,592 ¥20,095 ¥22,763

Materials Handling Equipment

47,201

38,76826,084

399,847

Logistics

1,780

1,587

–

15,085

Textile Machinery

1,081

(70)

(771)

9,164

Others

6,328

3,732

5,243

53,606

(30)

(73)

(200)

(259)

89,954 ¥64,040 ¥53,120Automobile

Elimination of intersegment transactions
Total

86

Toyota Industries Corporation¥

Annual Report 2007$

284,559

762,002

Thousands of
U.S. dollars

Millions of yen

2007

2006

2005

2007

Assets:Automobile¥ 444,564 ¥ 420,204 ¥ 407,435$ 3,765,896

Materials Handling Equipment

593,607509,366

465,8315,028,441

Logistics

132,857

106,356–

1,125,435

Textile Machinery

17,034

16,51625,621

144,299

OthersCorporate assets or elimination
Total

113,156

103,083

148,712958,551

2,284,637

2,089,813

1,279,222

19,353,134¥3,585,857 ¥3,245,341 ¥2,326,824$30,375,755¥$

Depreciation and amortization:
53,557 ¥48,370 ¥37,075Materials Handling Equipment

41,94730,04427,015355,339

Logistics

4,178

3,309

–

35,397

Textile Machinery

1,087

1,010

897

9,216

Others

5,288

4,544

5,215

44,796−

9

8−

Automobile

Corporate or elimination of intersegment transactions
Total¥ 106,060 ¥453,686

87,287 ¥70,213$

898,433$

635,046

Capital expenditures:
74,967 ¥ 101,897 ¥

92,692

Materials Handling Equipment

67,152

43,52033,972568,847

Logistics

5,863

4,046

–

49,671

Textile Machinery

1,472

730

1,612

12,473

Others

17,049

8,620

8,222

144,429

−

20

5

−

¥ 166,505 ¥ 158,835 ¥ 136,506$ 1,410,466

Automobile

Corporate or elimination of intersegment transactions
Total

¥

1. Business segments are divided by the type and nature of the product.
2. Main products of each segment are as follows:
Fiscal 2007
Automobile ...............................................Passenger vehicles, diesel and gasoline engines, car air-conditioning compressors, foundry parts, electronics components
Materials handling equipment ...................Counterbalanced lift trucks, warehouse trucks, automated storage and retrieval systems, truck mount aerial work platforms
Logistics ...................................................Transportation services, collection and delivery of cash and management of sales proceeds
Textile machinery ......................................Air-jet looms, water-jet looms, ring spinning frames
Others ......................................................Semiconductor package substrates
Fiscal 2006
Automobile ...............................................Passenger vehicles, diesel and gasoline engines, car air-conditioning compressors
Materials handling equipment ...................Counterbalanced lift trucks, warehouse trucks, automated storage and retrieval systems, truck mount aerial work platforms
Logistics ...................................................Transportation services, logistics planning, operation of distribution centers, collection and delivery of cash and management of sales proceeds
Textile machinery ......................................Air-jet looms, water-jet looms, ring spinning frames
Others ......................................................Semiconductor package substrates

3. Corporate assets included in corporate assets or elimination consist mainly of cash and cash equivalents, short-term investments andinvestments in securities held by the Company. Corporate assets were ¥2,352,362 million (US$19,926,836 thousand) and ¥2,141,920
million as of March 31, 2007 and 2006, respectively.
Changes in business segment
The logistics-related business, which was included in the Others Segment until fiscal 2005, has been separated and declared independently as the Logistics Segment starting fromfiscal 2006. In fiscal 2005, the Logistics Segment posted net sales of ¥37,913 million, an operating loss of ¥650 million, assets of ¥78,951 million, depreciation and amortization of¥1,323 million and capital expenditures of ¥2,930 million.

Toyota Industries Corporation

Annual Report 200787

(2) Geographical segments
As of and for the years ended March 31, 2007, 2006 and 2005:
Thousands of
U.S. dollars

Millions of yen

2007

2006

2005

2007

Sales:
Japan
Outside customer sales¥1,232,131 ¥ 1,009,368 ¥ 815,039

Intersegment transactions$10,437,372

121,338

112,543

99,464

1,027,857

1,353,470

1,121,912

914,503

11,465,229

Outside customer sales

287,316

246,129

212,253

2,433,856

Intersegment transactions

2,712

2,056

1,125

22,978290,029

248,186

213,379

2,456,835

Outside customer sales

312,051

216,230

188,668

2,643,387

Intersegment transactions

7,152

5,689

7,221

60,587319,204

221,919

195,890

2,703,974

Outside customer sales

46,89734,22725,576397,271

Intersegment transactions

5,573

3,998

2,776

47,212

North America

EuropeOthers52,471

38,22628,352444,483

Subtotal

2,015,175

1,630,243

1,352,126

17,070,521

Elimination of intersegment transactions(136,776)(124,288)(110,588)(1,158,635)¥1,878,398 ¥1,505,955 ¥1,241,538$15,911,886¥1,284,500 ¥1,069,137 ¥ 870,928$10,880,984

Total
Operating costs and expenses:
Japan
North America

284,095

241,467

207,068

2,406,568

Europe307,912217,370

191,2022,608,319

Others49,36436,74327,712

418,167(137,428)(122,804)(108,493)(1,164,155)¥1,788,443 ¥1,441,915 ¥1,188,418$15,149,883¥$

Elimination of intersegment transactions
Total
Operating income (loss):

68,970 ¥52,775 ¥43,575

North America

5,934

6,718

6,311

50,267

Europe11,292

4,548

4,688

95,655

Others

3,106

1,482

639

26,317651(1,484)(2,094)

5,518

89,954 ¥64,040 ¥53,120Japan

Elimination of intersegment transactions
Total

88

Toyota Industries Corporation¥

Annual Report 2007$

584,245762,002

Thousands of
U.S. dollars

Millions of yen

2007

2006

2005

2007

Assets:Japan¥ 887,351 ¥ 834,716 ¥ 788,827$ 7,516,742

North America

196,769

179,116

151,047

1,666,828

Europe337,866

278,825

264,274

2,862,060

Others

66,14848,207

33,639560,347

2,097,722

1,904,475

1,089,034

17,769,779¥3,585,857 ¥3,245,341 ¥2,326,824$30,375,755

Corporate assets or elimination
Total

1. Geographical segments are divided into categories based on their geographical proximity.
2. Significant countries or areas belonging to each segment are as follows:
Fiscal 2007
North America .........................................U.S.A., Canada
Europe ....................................................Sweden, Germany, France
Others .....................................................Australia, China, India
Fiscal 2006
North America .........................................U.S.A., Canada
Europe ....................................................Sweden, France, Germany
Others .....................................................Australia, China, Brazil

3. Corporate assets included in corporate assets or elimination consist mainly of cash and cash equivalents, short-term investments andinvestments in securities held by the Company. Corporate assets are ¥2,352,362 million (US$19,926,836 thousand) and ¥2,141,920
million as of March 31, 2007 and 2006, respectively.

(3) Overseas sales
For the years ended March 31, 2007, 2006 and 2005:
Thousands of
U.S. dollars

Millions of yen

2007

2006

2005

2007

Overseas sales:
North America¥ 287,957 ¥ 247,957 ¥ 208,675$ 2,439,287

Europe347,617249,237

225,4092,944,663

Others156,338

123,751

104,917

1,324,342

Total¥ 791,913 ¥ 620,946 ¥ 539,002$ 6,708,292

Total sales¥1,878,398 ¥1,505,955 ¥1,241,538$15,911,886

Ratio of overseas sales to total sales (%):
North America

15.3%

16.5%

16.8%

Europe

18.5

16.5

18.2

Others

8.4

8.2

8.4

42.2%

41.2%

43.4%

Total

1. Geographical segments are divided into categories based on their geographical proximity.
2. Significant countries or areas belonging to each segment are as follows:
Fiscal 2007
North America .........................................U.S.A., Canada
Europe ....................................................Germany, France, Italy
Others .....................................................China, Australia, Pakistan
Fiscal 2006
North America .........................................U.S.A., Canada
Europe ....................................................Germany, France, Italy
Others .....................................................China, Australia, India

3. Overseas sales are sales of the Company and its consolidated subsidiaries in countries and areas other than Japan.

Toyota Industries Corporation

Annual Report 200789

21. Related party transactions
The following transactions were carried out with related parties:(1) Sales of goods and services for the years ended March 31, 2007, 2006 and 2005 were as follows:
Thousands of
U.S. dollars

Millions of yen

Toyota Motor Corporation

2007

2006

2005

2007

¥665,595¥527,020¥414,235$5,638,250

Toyota Motor Corporation held 24.57% of the Company’s voting rights as of March 31, 2007. The above transactions were carried out
on commercial terms and conditions.
(2) Purchase of goods and services for the years ended March 31, 2007, 2006 and 2005 were as follows:
Purchase of goods:
Thousands of
U.S. dollars

Millions of yen

Toyota Motor Corporation

2007

2006

2005

2007

¥484,336¥370,565¥285,019$4,102,808

Purchase of services:
Thousands of
U.S. dollars

Millions of yen

2007

2006

2005

2007

Toyota Industries Health Insurance Society

¥ 41

¥61

¥59

$ 348

Toyota Medical Corporation

664

45

45

5,629

Toyota Technological Institute

−

50

50

−

Toyota Industries Health Insurance Society’s chairman as of March 31, 2007 is Yutaka Murodono, who is a director of the Company
and holds 0.00% of the Company’s shares. Toyota Industries Health Insurance Society’s chairman as of March 31, 2006 and 2005 was
Shiro Endo, who was a director of the Company and held 0.01% of the Company’s shares. Toyota Medical Corporation’s chairman asof March 31, 2007, 2006 and 2005 is Yoshitoshi Toyoda, who is a director of the Company and holds 0.07% of the Company’s shares
as of March 31, 2007 and previously held 0.06% of the Company’s shares as of March 31, 2006 and 2005. Toyota Technological
Institute’s chairman as of March 31, 2007, 2006 and 2005 was Tatsuro Toyoda, who is a director of the Company and holds 0.08% of
the Company’s shares. The transactions above were carried out based on commercial terms and conditions.
(3) Outstanding balances arising from sale/purchase of goods/services as of March 31, 2007 and 2006 are as follows:
Receivables from a related party:
Millions of yen

Toyota Motor Corporation

Thousands of
U.S. dollars

2007

2006

2007

¥33,859¥32,599$286,820

Payable to a related party:
Millions of yen

Toyota Motor Corporation

90

Toyota Industries Corporation

Annual Report 2007

Thousands of
U.S. dollars

2007

2006

2007

¥48,815¥46,965$413,513

22. Net income per share (EPS)
Bases of calculation for net income per share basic and net income per share diluted are as follows:
Thousands of
U.S. dollars

Millions of yen

2007

2006

2007

¥ 59,468¥ 47,077$503,756

–

432

–

Net income attributable to common shareholders

59,46846,644

503,756

Weighted-average shares (thousand)

313,191

319,125–

Net income per share basic (exact yen amounts) (exact US$ amounts)¥ 189.88¥ 146.16

Net income per share basic:
Net income
Net income not attributable to common shareholders(bonuses for directors and statutory auditors that are paid through appropriation)

$

1.61

$

1.61

Net income per share diluted:
Weighted-average shares for diluted computation (thousand)Net income per share diluted (exact yen amounts) (exact US$ amounts)

362

314

¥ 189.66¥ 146.02–

23. Net assets per share
The basis of calculation for net assets per share is as follows:
Thousands of
U.S. dollars

Millions of yen

2007

2006

2007

Net assets per share:
Total net assets¥1,810,483–$15,336,578

202

–

1,719

58,878–498,761

1,751,401–

14,836,098

312,075–¥ 5,612.11–

Amounts deducted from total net assets
Subscription rights to shares
Minority interests in consolidated subsidiaries
Net assets applicable to common stock at end of year
Outstanding shares of common stock at end of year used
for the computation of net assets per share (thousand)Net assets per share (exact yen amounts) (exact US$ amounts)

Toyota Industries Corporation

$

47.54

Annual Report 200791

Reports of Independent Auditors

Report of Independent Auditors

To the Board of Directors of Toyota Industries Corporation

We have audited the accompanying consolidated balance sheet of Toyota Industries Corporation (“theCompany”) and its subsidiaries as of March 31, 2007, and the related consolidated statements of income,changes in net assets and cash flows for the year then ended, all expressed in Japanese yen. These
consolidated financial statements are the responsibility of the Company’s management. Our responsibility
is to express an opinion on these consolidated financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in Japan. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audit provides a reasonablebasis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the financial position of the Company and its subsidiaries as of March 31, 2007, and the resultsof their operations and their cash flows for the year then ended in conformity with accounting principles
generally accepted in Japan.
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year
ended March 31, 2007, are presented solely for convenience. Our audit also included the translation ofJapanese yen amounts into U.S. dollar amounts and, in our opinion, such translation has been made on
the basis described in Note 1 to the consolidated financial statements.

July 10, 200792

Toyota Industries Corporation

Annual Report 2007

Report of Independent Auditors

To the Board of Directors and Shareholders of
Toyota Industries Corporation

We have audited the accompanying consolidated balance sheets of Toyota Industries Corporation andits consolidated subsidiaries as of March 31, 2005 and 2006, and the related consolidated statements ofincome, shareholders’ equity, and cash flows for each of the three years in the period ended March 31,
2006, all expressed in Japanese Yen. These consolidated financial statements are the responsibility of
the Company’s management. Our responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit
also includes assessing the accounting principles used and significant estimates made by management,
as well as evaluating the overall consolidated financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the consolidated financial position of Toyota Industries Corporation and its consolidated
subsidiaries as of March 31, 2005 and 2006, and the consolidated results of their operations and their
cash flows for each of the three years in the period ended March 31, 2006 in conformity with accounting
principles generally accepted in Japan.
The amounts expressed in U.S. dollars, which are provided solely for the convenience of the reader, havebeen translated on the basis set forth in Note 1 to the accompanying consolidated financial statements.

ChuoAoyama PricewaterhouseCoopers
Nagoya, Japan
June 22, 2006

Toyota Industries Corporation

Annual Report 200793