Notes to Consolidated Financial Statements
1. Basis of presenting interim consolidated
financial statements
On June 28, 2001, the General Meeting of Shareholders of
Toyoda Automatic Loom Works, Ltd. approved to change theCompany’s name effective August 1, 2001 to Toyota Industries
Corporation. The accompanying interim consolidated financial
statements have been prepared based on the accounts
maintained by Toyoda Automatic Loom Works, Ltd. under the
new corporate name of Toyota Industries Corporation (the“Company”) and its consolidated subsidiaries (together,hereinafter referred to as “Toyota Industries”) in accordancewith the provisions set forth in the Japanese Commercial Codeand the Securities and Exchange Law, and in conformity withaccounting principles and practices generally accepted inJapan, which are different in certain respects from theapplication and disclosure requirements of International
Accounting Standards.
Certain items presented in the interim consolidated
financial statements submitted to the Director of Kanto
Finance Bureau in Japan have been reclassified in theseaccounts for the convenience of readers outside Japan.
The interim consolidated financial statements are notintended to present the consolidated financial position, resultsof operations and cash flows in accordance with accounting
principles and practices generally accepted in countries andjurisdictions other than Japan.
Amounts in U.S. dollars are included solely for theconvenience of readers outside Japan. The rate of ¥119.40 =US$1, the approximate rate of exchange prevailing at
September 28, 2001, has been used in translation. The
inclusion of such amounts are not intended to imply that theJapanese yen have been or could be readily converted, realized
or settled in U.S. dollars at this rate or any other rates.

2. Summary of significant accounting
policies(1) Consolidation
The interim consolidated financial statements include theaccounts of the Company and its 109 subsidiaries (26domestic subsidiaries and 83 overseas subsidiaries, which arelisted on pages 24 and 25) as of September 30, 2001 and 91
subsidiaries (23 domestic subsidiaries and 68 overseas
subsidiaries) as of September 30, 2000. The unconsolidated
subsidiaries are excluded from consolidation because such
subsidiaries would have no material effect on the consolidated
financial statements of Toyota Industries, or Toyota Industries’
owning a majority of such subsidiaries’ shares would be
temporary.
For the six-month period ended September 30, 2001, 12
subsidiaries were newly added to the scope of consolidationand three BT Industries group companies have been excluded
from the scope of consolidation. Since five subsidiaries out of
12 subsidiaries were deemed as being acquired by theCompany as of the interim period end, they were consolidated
only in the balance sheets. Two unconsolidated subsidiaries
are excluded from the scope of consolidation because majority

ownership of those two subsidiaries is temporary.
For the six-month period ended September 30, 2000, 62
subsidiaries, including 59 BT Industries group companies, were
newly added to the scope of consolidation. Since 60
subsidiaries out of 62 subsidiaries were deemed as being
acquired by the Company as of the interim period end, they
were consolidated only in the balance sheets. Twounconsolidated subsidiaries are excluded from the scope of
consolidation because majority ownership of those two
subsidiaries is temporary.
The interim period of certain subsidiaries are different fromthe interim period of the Company. Since the difference is not
more than three months, the Company is using thosesubsidiaries’ statements for their interim periods, making
adjustments for significant transactions that materially affectthe financial position or results of operations.
All significant intercompany transactions, balances andunrealized profits among Toyota Industries have been
eliminated.
A full portion of the assets and liabilities of the acquired
subsidiaries is stated at fair value as of the date of acquisitionof control.

(2) Investments in unconsolidated subsidiaries andaffiliates
Investments in two unconsolidated subsidiaries and 17
affiliates as of September 30, 2001 and investments in two
unconsolidated subsidiaries and 12 affiliates as of September
30, 2000 are accounted for by the equity method of
accounting.
Investments in unconsolidated subsidiaries and affiliates
not accounted for by the equity method are stated at cost due
to their insignificant effect on the consolidated financial
statements.
The major affiliates accounted for by the equity method
are listed on page 25.

(3) Cash and cash equivalents
Cash and cash equivalents include all highly liquid
investments, generally with original maturities of three months
or less, that are readily convertible to known amounts of cash
and are so near maturity that they present insignificant risk ofchanges in value because of changes in interest rates.

(4) Marketable securities and investments 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 havetrading securities nor held-to-maturity securities as of
September 30, 2001 and 2000, respectively. Other securities
with fair values are stated at fair value based on market prices
at the end of the interim period. Unrealized gains and losses
are included in net unrealized gains on other securities as aseparate component of shareholders’ equity. Cost of sales ofsuch securities is determined by the moving average method.
Other securities without fair values are stated at cost, as
determined by the moving average method.

15

Investments in unconsolidated subsidiaries and affiliates areaccounted for by the equity method (see Note 2 (2) above).

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

(6) 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, under which useful
lives and residual values are as prescribed in Japanese Tax Law.
Accumulated depreciation as of September 30, 2001 and 2000
was ¥434,792 million ($3,641,474 thousand) and ¥391,499
million, respectively.

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

(b) Hedging instruments and hedged items
Hedging
instruments:

Derivative instruments (interest rate
swaps and foreign currency forwards)

Hedged items:

Risk of change in interest rate on
borrowings and risk of change in forward
exchange rate on transactions
denominated in foreign currencies(monetary assets and liabilities,
marketable securities and forecasted
transactions)(7) Intangible assets and amortization
Amortization of intangible assets is computed using thestraight-line method. Software costs for internal use areamortized by the straight-line method over their expected
useful lives (mainly five years).

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

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

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

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

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

16(c) Hedging policy
Hedging transactions are executed and controlled based on
Toyota Industries’ internal rule. 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) The method used to measure hedge effectivenessHedge effectiveness is measured by comparing accumulatedchanges in market prices of hedged items and hedging
instruments or accumulated changes in estimated cash flows
from the inception of the hedge to the date of measurements
performed. Currently it is considered that there are highcorrelations between them.

(e) Others
Due to the fact that counterparties to Toyota Industries
represent major financial institutions which have highcreditworthiness, Toyota Industries believes that the overall
credit risk related to its financial instruments is insignificant.

(14) Goodwill
Goodwill, if material, is amortized principally over less than 20
years on a straight-line basis, while immaterial goodwill ischarged to income as incurred. Goodwill incurred before April
1, 2000 has been amortized over five years on a straight-line
basis.

(15) Appropriation of retained earnings
In the accompanying interim consolidated statements ofshareholders’ equity, the approved amount during therelevant fiscal year is reflected for the appropriation ofretained earnings of consolidated subsidiaries. In Japan, thepayment of bonuses to directors and corporate auditors ismade out of retained earnings through an appropriation,
instead of being charged to the income for the period.

3. Additional information
There is no additional information for the six months ended
September 30, 2001.

For the six months ended September 30, 2000
(1) Allowance for retirement and severance
benefits for directors and corporate auditors
The Company’s retirement and severance benefits for
directors and corporate auditors was previously recorded as
expenses at the time they were awarded. However, in orderto make period earnings more appropriate, from the period
ended September 30, 2000, these expenses are accrued
based on the directors’ retirement benefit rule. Compared tothe previous method, operating income and ordinary
income decreased by ¥78 million and income before income
taxes decreased by ¥2,407 million.

(2) Accounting for retirement benefits
Effective for the period ended September 30, 2000, the new
accounting standards for retirement benefits have been
applied. As a result, operating income and ordinary income
decreased by ¥453 million. Also, the cumulative effect of achange in accounting standards for retirement benefits of¥19,057 million was charged to income and recorded as an
extraordinary loss, and gain on securities contribution toemployee retirement benefit trust of ¥15,080 million was
charged to income and recorded as an extraordinary gain.
Allowance for retirement and severance benefits andunamortized prior service cost are included in allowance forretirement benefits.

(3) Accounting for financial instruments
Effective for the period ended September 30, 2000, the new
accounting standards for financial instruments have been
applied. As a result, ordinary income and income before
income taxes increased by ¥173 million. At the beginning of
the period ended September 30, 2000, Toyota Industries
reviewed the holding purposes of the securities it owns. As aresult, marketable securities expiring within one year wereclassified under current assets as marketable securities andthe others were classified as investment in securities. As aresult, marketable securities decreased by ¥394 million andinvestments in securities increased by the same amount.

(4) Accounting for foreign currency transactions
Effective for the period ended September 30, 2000, theamended accounting standards for foreign currencytransactions have been applied. Neither profits nor losses
resulted from this change. Effective for the period ended
September 30, 2000, foreign currency translation
adjustments, which had been listed under assets in the
consolidated balance sheets as of March 31, 2000 have been
moved to shareholders’ equity and included in minority
interest in consolidated subsidiaries and foreign currencytranslation adjustments due to the amendment of JapaneseRegulations Concerning the Terminology, Forms andPreparation Methods of Consolidated Financial Statements.

4. Assets pledged as collateral(1) Assets pledged as collateral as of September 30, 2001 and 2000 are as follows:
Millions of yen

Investments in securities
Property, plant and equipment (other)
Machinery, equipment and vehicles
Trade notes and accounts receivable
Other
Total

Thousands of
U.S. dollars

2001

2000

2001

¥17,467
9,727
–
200
29

¥26,249
7,348
631
–
–

$146,290
81,465–
1,675
243¥27,423¥34,228$229,673(2) Secured liabilities as of September 30, 2001 and 2000 are as follows:
Millions of yen

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

Thousands of
U.S. dollars

2001

2000

2001

¥17,984
11,8593,273
300¥17,573
9,167
3,021
300

$150,620
99,322
27,4122,512¥33,416¥30,061$279,866

17

5. Contingent liabilities
Toyota Industries is contingently liable for guarantees as of September 30, 2001 and 2000 as follows:
Thousands of
U.S. dollars

Millions of yen

2001
Guarantees given by the Company
Guarantees given by consolidated subsidiaries
Guarantee forwards given by the Company
Guarantee forwards given by consolidated subsidiaries
Acts similar to guarantees given by consolidated subsidiaries

¥

283
2,869
3,251
–
14,522

2000
335
–
2,846
934
13,085¥2001$ 2,370
24,02827,228–
121,625

Guarantees given by consolidated subsidiaries as of September 30, 2001 amount to 250,538 thousand Swedish krona, guarantee
forwards given by consolidated subsidiaries as of September 30, 2000 amount to 78,266 thousand Swedish krona and acts similar
to guarantees given by consolidated subsidiaries as of September 30, 2001 and 2000 amount to 1,268,283 thousand Swedishkrona and 1,096,786 thousand Swedish krona, respectively.

6. 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, accumulated depreciation under finance leases
as of September 30, 2001 and 2000 is as follows:
Thousands of
U.S. dollars

Millions of yen

2001

2000

2001

¥1,635777¥2,439762$13,694
6,508

858

1,677

7,186

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

4,922
2,222

5,223
2,978

41,223
18,610Tools, furniture and fixtures interim period end balance equivalents

2,700

2,245

22,613¥3,558¥3,922$29,799

Machinery and equipment:
Acquisition cost equivalents
Accumulated depreciation equivalents
Machinery and equipment interim period end 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, etc., at interim period end is immaterial.
(b) Pro forma information regarding future minimum lease payments as of September 30, 2001 and 2000 is as follows:
Thousands of
U.S. dollars

Millions of yen

Due within 1 year
Due after 1 year
Total

2001

2000

2001

¥1,3992,159¥1,353
2,569$11,717
18,082¥3,558¥3,922$29,799

Future minimum lease payments under finance leases include the imputed interest expense portion.
(c) Total lease payments for the six-month periods ended September 30, 2001 and 2000 are as follows:

2001
2000

18

Millions of yen

Thousands of
U.S. dollars

¥772
874

$6,466–

Pro forma depreciation expenses, which are not reflected in the accompanying interim consolidated statements of income, arecomputed mainly by the straight-line method which assumes zero residual value and leasing term to be useful lives for the sixmonth periods ended September 30, 2001 and 2000, and are equivalent to the amount of total lease payments of the above.

(2) Finance leases (as a lessor) which do not transfer ownership of leased properties to lessees(a) Information regarding the leased properties such as acquisition cost, accumulated depreciation under finance leases as of
September 30, 2001 is as follows:

Millions of yen

Thousands of
U.S. dollars

Machinery and equipment:
Acquisition cost
Accumulated depreciation¥7,333
4,061$61,415
34,011

Total net leased properties¥3,272$27,404(b) Pro forma information regarding future minimum lease payments as of September 30, 2001 is as follows:

Due within 1 year
Due after 1 year
Total

Millions of yen

Thousands of
U.S. dollars¥1,893
2,681$15,854
22,454¥4,574$38,308

Millions of yen

Thousands of
U.S. dollars¥1,210$10,134

Millions of yen

Thousands of
U.S. dollars¥709$5,938Future minimum lease payments under finance leases include the imputed interest income portion.
(c) Total lease payments for the six-month period ended September 30, 2001 is as follows:

2001(d) Depreciation for the six-month period ended September 30, 2001 is as follows:

2001(3) Operating leases (as a lessee)
Pro forma future lease payments under operating leases as of September 30, 2001 and 2000 are as follows:
Millions of yen

Due within 1 year
Due after 1 year
Total

Thousands of
U.S. dollars

2001

2000

2001

¥1,803
4,973

¥785
1,284

$15,100
41,650¥6,776¥2,069$56,750

Millions of yen

Thousands of
U.S. dollars¥ 3,1147,017$26,080
58,769¥10,131$84,849(4) Operating leases (as a lessor)
Pro forma future minimum rentals under operating leases as of September 30, 2001 are as follows:

Due within 1 year
Due after 1 year
Total

19

7. Marketable securities(1) As of September 30, 2001(a) Other securities with fair value

Millions of yen

Stocks
Bonds
Government and municipal bonds, etc.
Corporate bonds
Other bonds
Other
Total

Acquisition
cost

Carrying
amountDifference¥171,235¥819,825¥648,590

013,2113120

013,225
3
120

–
14
–
–

¥184,569¥833,173¥648,604

Thousands of U.S. dollars

Stocks
Bonds
Government and municipal bonds, etc.
Corporate bonds
Other bonds
Other
Total

Acquisition
cost

Carrying
amountDifference$1,434,129$6,866,206$5,432,077

0
110,64525
1,005

0
110,762
25
1,005

–
117
–
–

$1,545,804$6,977,998$5,432,194(b) Significant contents and carrying amount of securities (excluding held-to-maturity bonds within securities with fair value) notpracticable to fair value as of September 30, 2001, are as follows:

Held-to-maturity securities
Other securities
Domestic unlisted stocks excluding over-the-counter stocks
Money management fundForeign unlisted bonds

Millions of yen

Thousands of
U.S. dollars––¥12,978
5,924
406$108,693
49,6153,400(2) As of September 30, 2000(a) Other securities with fair value
Millions of yen

Stocks
Bonds
Government and municipal bonds, etc.
Corporate bonds
Other bonds
Other
Total

20

Acquisition
cost

Carrying
amount¥165,252¥1,114,681¥949,429

–
9,096
3
121

–
9,063
3
121

–
(33)
–
–

¥174,472¥1,123,868¥949,396

Difference(b) Significant contents and carrying amount of securities (excluding held-to-maturity bonds within securities with fair value) notpracticable to fair value as of September 30, 2000, are as follows:

Millions of yen

Held-to-maturity securities
Other securities
Domestic unlisted stocks excluding over-the-counter stocks
Bond used in repurchase agreements
Commercial paper used in repurchase agreements
Money management fundForeign unlisted bonds–¥13,004
7,986
3,000
942
310

8. Derivative instruments
Notes relating to derivative instruments are omitted, since Toyota Industries has not used derivative instruments for other than hedging.

9. Segment information(a) Business segments
Millions of yen

Thousands of
U.S. dollars

For the six months
ended September 30

For the six months
ended September 30

2001

2000

2001

¥266,143
6,637
272,780¥228,789
1,912
230,701$2,229,004
55,5862,284,590

180,526
27
180,553

82,273–82,273

1,511,943
226
1,512,169

16,195223
16,41814,399–14,399135,636
1,868
137,504

16,101
6,586
22,687

18,7692,104
20,873

134,849
55,159190,008

Subtotal
Elimination of intersegment transactions
Total

492,438
348,246(13,473)(4,016)¥478,965 ¥344,230

4,124,271(112,839)$4,011,432

Operating costs and expenses:
Automobile
Materials Handling Equipment
Textile Machinery
OthersElimination of intersegment transactions
Total¥259,236 ¥216,678
172,546
76,27016,217
14,665
19,847
18,992(13,291)(3,860)¥454,555 ¥322,745$2,171,156
1,445,109
135,821
166,222(111,315)$3,806,993

Operating income (loss):
Automobile
Materials Handling Equipment
Textile Machinery
OthersElimination of intersegment transactions
Total¥ 13,544 ¥ 14,023
8,007
6,003
201
(266)
2,840
1,881
(182)
(156)
¥ 24,410 ¥ 21,485$ 113,434
67,0601,683
23,786(1,524)$ 204,439

Sales:
Automobile
Outside customer sales
Intersegment transactions
Materials Handling Equipment
Outside customer sales
Intersegment transactions
Textile Machinery
Outside customer sales
Intersegment transactions
Others
Outside customer sales
Intersegment transactions

21

(b) Geographical segments
Millions of yen

Thousands of
U.S. dollars

For the six months
ended September 30

For the six months
ended September 30

2001

2000

2001

¥324,118
29,723353,841¥287,313
13,624300,937$2,714,556
248,936
2,963,492

94,547704
95,25147,260–47,260791,851
5,896
797,747

58,506
2,118
60,624

8,875
–
8,875

490,000
17,739507,739

Subtotal
Elimination of intersegment transactions
Total

1,794
782
98
286
1,892
1,068
511,608
358,140(32,643)(13,910)¥478,965 ¥344,230

15,025821
15,846
4,284,824(273,392)$4,011,432

Operating costs and expenses:
Japan
North America
EuropeOthersElimination of intersegment transactions
Total¥332,783 ¥281,684
92,93245,12759,450
8,570
1,951
1,043
(32,561)(13,679)¥454,555 ¥322,745$2,787,127
778,325497,906
16,340(272,705)$3,806,993

Operating income (loss):Japan
North America
EuropeOthersElimination of intersegment transactions
Total¥ 21,058 ¥ 19,253
2,319
2,133
1,174
305
(59)
25
(82)
(231)
¥ 24,410 ¥ 21,485$ 176,365
19,422
9,833
(494)
(687)
$ 204,439

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

Main Products of Each Segment
Automobile

Passenger vehicles, diesel and gasoline engines, car air-conditioning compressors

Materials Handling Equipment

Counterbalanced forklift trucks, warehouse trucks, skid steer loaders, automated storage

Textile Machinery

Ring spinning frames, air-jet looms, water-jet looms

OthersBall grid array plastic package substrates for IC chipsets, casting machines

and retrieval systems, automatic guided vehicles

Significant Countries Belonging to Each Segment

22

North America

U.S.A., Canada

EuropeSweden, France, Germany

Other

India, China