Financial Section
64 Consolidated Eleven-Year Summary
66 Management’s Discussion and Analysis ofFinancial Condition and Results of Operations
74 Consolidated Balance Sheets
76 Consolidated Statements of Income
77 Consolidated Statements of Changes in Net Assets
78 Consolidated Statements of Cash Flows
79 Notes to Consolidated Financial Statements
96 Reports of Independent Auditors

Toyota Industries Report 200863

Financial Section

Consolidated Eleven-Year Summary

Toyota Industries Corporation
Years ended March 31
The figures in this table are unaudited.
Millions of yen

2008

2007

¥2,000,536¥1,878,398

2006

2005

¥1,505,955¥1,241,538

For The YearNet sales
Operating income

96,853

89,95464,04053,120Ordinary income

126,488

108,484

80,63570,91280,46059,46847,07743,357¥ 829,855¥ 791,913¥ 620,946¥ 539,002

Depreciation and amortization

119,905

106,060

87,28770,213

Capital expenditures

142,158

166,505

158,835

136,506

Research and development expenses

36,75034,54831,16630,051

Net income
Overseas sales

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

257.50¥189.88¥146.16¥135.09257.43189.66146.02135.03

4,483.32

5,612.11

5,044.45

3,504.80

60.00

50.00

38.00

32.00

Total assets¥2,965,585¥3,585,857¥3,245,341¥2,326,824

Total net assets

1,453,996

1,810,483

1,611,227

1,115,747

Common stock

80,46280,46280,46280,462

Number of shares outstanding (excluding treasury stock)311,589

312,075

319,320

318,237¥ 188,805¥ 177,467¥ 131,784¥ 100,095(138,789)(164,446)(205,013)(128,230)

Total net assets per share
Cash dividends per share
At Year-End(thousands)
Cash FlowsNet cash provided by operating activities
Net cash used in investing activities
Net cash provided by (used in) financing activities(33,992)(19,749)

85,17250,020Cash and cash equivalents at end of year

121,284

108,569

112,596

100,535Return on equity (ROE) (%)

5.1

3.5

3.5

4.1

Return on assets (ROA) (%)

2.5

1.7

1.7

2.0

Return on sales (ROS) (%)

4.0

3.2

3.1

3.5

Debt/equity ratio (%)

35.9

28.9

29.4

34.4

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

7.5

7.4

7.8

7.7

¥ 222,125¥ 191,007¥ 150,674¥ 128,381

39,52836,09632,97730,990Notes: 1. U.S. dollar amounts have been translated from yen, for convenience only, at the rate of ¥100.19 = US$1, the approximate exchange rate on March 31, 2008.
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) Depreciation expense, which was listed as a separate component of non-operating expenses, is included in other non-operating expenses because the amount is immaterial.
(2) 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.
(3) Effective beginning the year ended March 31, 2005, the new accounting standards for impairment on fixed assets have been applied.
(4) Effective beginning the year ended March 31, 2003, the new accounting standards for net income per share have been applied.
(5) Effective beginning the year ended March 31, 2001, the new accounting standards for retirement benefits, financial instrument and foreign currency transactions have been applied.
(6) 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 theoperating results more precisely as significance of the overseas consolidated subsidiaries had been increasing and their revenue and expenses were incurred throughout the fiscal years.

64

Toyota Industries Report 2008

Thousands of
U.S. dollars

Millions of yen

2004

2003

2002

2001

2000

1999

1998

2008

¥1,164,378¥1,069,218¥ 980,163¥ 767,382¥625,772¥558,875¥572,698$19,967,427

52,63152,477

46,33047,304

28,867

24,81332,729966,700

58,97051,37547,86544,52627,162

23,172

33,201

1,262,487

33,623

21,93327,311

22,637

13,686

10,391

20,491

803,083¥ 497,356¥ 451,593¥ 396,470¥ 298,794¥191,992¥178,737¥150,417$ 8,282,822¥

65,351

59,15455,17346,45442,751

34,37927,9581,196,783

89,50887,55988,319127,273

44,74660,46862,006

1,418,891

29,562

29,70529,98526,19524,061

23,231

23,112366,813108.04

¥

70.19

¥

87.28

¥

75.90

¥

48.32

¥

36.30

¥

72.33

$

2.57

101.97

62.90

78.26

67.77

43.18

32.62

63.48

2.57

3,199.69

2,522.52

2,809.54

3,036.77

1,116.62

1,063.05

1,056.81

44.75

24.00

22.00

19.00

17.00

16.00

16.00

16.00

0.60

¥2,011,995¥1,650,391¥1,770,401¥1,869,642¥685,914¥617,070¥593,003$29,599,616

1,016,763

738,867

878,812951,298

316,293

301,158

304,097

14,512,396

80,462

68,04668,02168,01840,17840,17840,133803,101

317,666

292,777

312,796313,260

283,260

283,296287,752

92,406¥ 103,183

78,412¥ 68,057¥ 44,133¥ 50,952$ 1,884,474(92,667)(95,120)(106,710)(155,870)(67,186)(96,222)(26,897)(1,385,261)¥¥

81,078¥(56,015)

57,775

1,225

94,472

27,49924,368(12,918)(339,278)

77,212

136,929

71,11995,296

77,332

49,95574,303

1,210,543

3.8

2.7

3.0

3.6

4.4

3.4

7.0

1.8

1.3

1.5

1.8

2.1

1.7

3.6

2.9

2.1

2.8

2.9

2.2

1.9

3.6

31.6

55.6

35.9

30.7

60.5

51.6

37.5

7.4
¥ 113,676
27,431

6.7¥

95,47225,0305.8¥

97,54023,056

¥

9.1

14.5

16.4

17.6

79,921¥ 64,681¥ 51,033¥ 55,212

21,11813,132

12,797

11,239$ 2,217,044

The Company also has adopted tax effect accounting due to the amendment of the accounting standards for income taxes.
Deferred tax assets have been newly recognized in current assets, and investments and other assets. Deferred tax liabilities have been recognized in current and long-term liabilities.
(7) 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 years, 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 Report 200865

Financial Section

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 isbased on information known to management as of June 2008.
This section contains projections and forward-looking statements that involve risks, uncertainties andassumptions. You should be aware that certain risks and uncertainties could cause the actual results ofToyota 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, 2008 is referred to as fiscal 2008 and other fiscal years are referred toin a corresponding manner. All references to the “Company” herein are to Toyota Industries Corporation andreferences to “Toyota Industries” herein are to the Company and its 163 consolidated subsidiaries.

As a result, total consolidated net sales of Toyota Industries

Result of Operations

amounted to ¥2,000.5 billion, an increase of ¥122.2 billion (7%) over

Operating Performancefiscal 2007.

In fiscal 2008, the Japanese economy continued on a moderate

At the profit level, ordinary income amounted to ¥126.4 billion, an

recovery track as private-sector capital investment increased

increase of ¥18.0 billion (17%) over fiscal 2007. Despite the effects ofamid strong corporate earnings. Consumer spending picked up

higher depreciation expenses, sharp rises in raw materials and parts

momentum as well on the back of improved employment conditions.

costs as well as higher personnel expenses, this increase was achieved

In the second half of the fiscal year, however, the economy came todue largely to expanded sales, cost-reduction efforts throughout thea standstill as a result of soaring crude oil and other raw materials

Group and an increase in non-operating income. Net income amounted

prices, apparent deceleration of the U.S. economy triggered by theto ¥80.4 billion, an increase of ¥21.0 billion (35%) over fiscal 2007.

subprime loan debacle as well as rapid depreciation of the U.S.
economy beginning to reverberate around the world, the European

Cost of Sales and Selling, General and
Administrative Expenses

economy remained solidly on track and China and India maintained

Cost of sales for fiscal 2008 increased ¥91.7 billion (6%) overhigh economic growth.

fiscal 2007 to ¥1,678.4 billion. This increase reflected increases indollar. Overseas, despite the impact of deceleration of the U.S.

In this operating environment, Toyota Industries undertook efforts
to strengthen its management platform by ensuring customer trust

depreciation expenses, raw materials prices, purchased parts prices
and personnel expenses in addition to an increase in net sales.

through its dedication to quality, the development of appealing new

Selling, general and administrative expenses increased ¥23.5

products, aggressive sales promotions and the execution of a Group-

billion (12%) to ¥225.1 billion, due primarily to increases in personnel

wide program to reduce costs.

expenses.

Operating Income andOperating Income Ratio

Net Sales(¥ Billion)(¥ Billion)

(%)

2,500

100

20

2,000

80

16

1,500

60

12

1,000

40

8

500

20

4

0
(FY)

0

04

05

06

07

08

0

(FY)

04

05

06

07

Ordinary income (left)
Ordinary income ratio (right)

66

Toyota Industries Report 200808

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

0
(FY)

04

05

06

07

08

0
(FY)

0

04 05 06 07 08(FY)

04 05 06 07 08

Ordinary income (left)
Ordinary income ratio (right)

Operating Income

Materials Handling Equipment Segment

Operating income for fiscal 2008 increased ¥6.9 billion (8%) overIn the materials handling equipment industry as a whole, sales in thefiscal 2007 to ¥96.8 billion, attributable mainly to Group-wide cost-

Japanese market remained at the same level as fiscal 2007. Overseas

reduction activities as well as higher sales.

markets continued to expand steadily, with increases in sales in Europe
and BRICs countries, despite a decline in the North American market.

Operating Performance Highlights by Business
Segment¥783.1 billion, an increase of ¥15.9 billion (2%) over fiscal 2007.

Following are the operating results by business segment. Net sales

Operating income amounted to ¥39.8 billion, a decrease of ¥7.4

for each segment do not include intersegment transactions.

billion (16%). Excluding the effects of changes in the fiscal year-end

Net sales of the Materials Handling Equipment Segment totaledof certain overseas subsidiaries in fiscal 2007, net sales increased

Automobile Segment¥80.6 billion (11%) and operating income decreased ¥5.4 billion

Although domestic sales were sluggish during fiscal 2008, higher(12%). With regards to lift trucks, Toyota Industries strove to enhancesales overseas, primarily in emerging markets, gave rise to an overall

its sales network, resulting in increases in total unit sales for both theincrease in sales. Amid this environment, net sales of the Automobile

TOYOTA and BT brands backed by the robust European market.

Segment totaled ¥969.2 billion, an increase of ¥64.4 billion (7%) overSales of aerial work platforms were solid, bolstered by replacementfiscal 2007, while operating income rose ¥8.0 billion (24%) to ¥41.5

demand from customers in the electricity and construction industries.

billion.
Within this segment, net sales of the Vehicle Business totaled

Logistics Segment¥500.1 billion, an increase of ¥29.9 billion (6%) over fiscal 2007.

The overall operating environment remained severe in the logistics

This was attributable to an increase in sales of the Vitz (Yaris outsideindustry as the volume of cargo transport continued to decline in theJapan) in addition to sales of the Mark X ZiO, for which productioncommenced in September 2007.
Net sales of the Engine Business totaled ¥178.7 billion, an
increase of ¥11.3 billion (7%) over fiscal 2007. Despite a decrease insales of AD diesel engines for the RAV4 in the European market, thisincrease was achieved due largely to an increase in sales of KD diesel
engines for Toyota Motor Corporation’s (TMC) Innovative International

Car Air-Conditioning
Compressor Unit Sales(Million Units)
25

20

Multi-Purpose Vehicle (IMV) Project as well as VD diesel engines,
which are fitted in the Land Cruiser for overseas markets.

15

Net sales of the Car Air-Conditioning Compressor Businesstotaled ¥253.5 billion, an increase of ¥18.1 billion (8%) over fiscal

10

2007. A slight decrease in sales in Japan was offset by an increase in5

sales overseas, mainly in Europe.
0
(FY)

04

05

06

07

08

Japan
North America
EuropeAsia and Oceania

Toyota Industries Report 200867

Financial Section

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

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

120

5

100

40

4

600
80
3

30
400

60
2

20
40
200
10

0
(FY) 04

0

05 06 07 08(FY) 04

1

20

0

0

05 06 07 08(FY) 04

05 06 07 08(FY) 04

05 06 07 08

The logistics-related business, which was included in the Others Segment, had been
separated and declared independently as the Logistics Segment starting from fiscal 2006.

domestic market accompanied by an increase in costs resulting fromJapan

higher crude oil prices.

Net sales increased ¥110.9 billion (9%) over fiscal 2007 to ¥1,343.0

Amid this environment, net sales of the Logistics Segment totaled

billion, while operating income totaled ¥82.0 billion, up ¥13.1 billion¥117.5 billion, an increase of ¥28.1 billion (31%) over fiscal 2007.

(19%). These increases were due mainly to a rise in unit sales of car

Operating income amounted to ¥4.2 billion, an increase of ¥2.5 billion

air-conditioning compressors and making Wanbishi Archives a wholly(138%). This was due largely to the solid performance of transportation

owned subsidiary.

businesses accompanied by an increase in the transport volume ofautomotive parts in addition to making Wanbishi Archives Co., Ltd.

North America(Wanbishi Archives), which provides total information management

Net sales decreased ¥21.8 billion (8%) from fiscal 2007 to ¥265.5

services, a wholly owned subsidiary in May 2007.

billion, while operating income totaled ¥3.5 billion, down ¥2.4 billion(41%), due largely to the sluggish market and rising prices of raw

Textile Machinery Segment

materials and purchased parts.

In the textile machinery industry as a whole, the mainstay Chinese
market remained strong on the back of robust capital investment

Europesupported by rapid growth.

Net sales increased ¥15.7 billion (5%) over fiscal 2007 to ¥327.7 billion

Net sales of the Textile Machinery Segment totaled ¥66.2 billion,

as a result of an increase in unit sales of lift trucks. Operating income

an increase of ¥7.8 billion (13%) over fiscal 2007, while operating

totaled ¥7.9 billion, down ¥3.3 billion (30%), attributable primarily toincome rose ¥3.2 billion (297%) to ¥4.2 billion. In fiscal 2008, Toyota

higher prices for raw materials and purchased parts as well as to an

Industries sold more than 10,000 air-jet looms, primarily to China,

increase in expenses arising from reorganization of the sales network.

for the second consecutive year. Cumulative production of 100,000
air-jet looms, which Toyota Industries began manufacturing in 1980,

Otherswas also commemorated in February 2008. Strong sales of spinning

Net sales totaled ¥64.1 billion, an increase of ¥17.3 billion (37%),

machinery in Vietnam and Indonesia also contributed to the strong

whereas operating income rose ¥2.0 billion (65%) to ¥5.1 billion.

performance of this segment.

Non-Operating Income and Expenses
Others Segment

Non-operating income increased ¥14.1 billion (28%) to ¥64.9 billion

Net sales of the Others Segment totaled ¥64.2 billion, an increase ofin fiscal 2008, owing primarily to an increase in dividends income¥5.9 billion (10%) from fiscal 2007, while operating income rose ¥0.4

from TMC.

billion (6%) to ¥6.7 billion in fiscal 2008.

Non-operating expenses totaled ¥35.2 billion, an increase of ¥2.9
billion (9%), due mainly to increases in interest expenses.

Sales by Geographical Segment
Below are Toyota Industries’ operating results by geographical

Income before Income Taxes

segment. Net sales for each geographical segment do not include

Income before income taxes amounted to ¥132.3 billion, up ¥24.0

intersegment transactions.

billion (22%) as a result of an ¥18.0 billion increase in ordinary income
in fiscal 2008.

68

Toyota Industries Report 2008

Net Sales of
Textile Machinery
Segment

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

70

5

60

4

50

3

40

2

30

1

20

0

10

(1)

Net Sales of
Others Segment

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

80

7
6

60

5
4

40

05 06 07 08(FY) 04

2

20

1

(2)

0
(FY) 04

3

0

05 06 07 08(FY) 04

0

05 06 07 08(FY) 04

05 06 07 08

Income Taxes

Industries North America, Inc. (TINA) and Toyota Industries Finance

Income taxes increased ¥3.0 billion (7%) to ¥44.5 billion, due largely

International AB (TIFI) centrally manage the funds of subsidiaries in

to an increase in corporate income taxes of the Company.

North America and Europe, respectively.
Through close cooperation among the Company, TINA andMinority Interest in Consolidated Subsidiaries

TIFI, we strive for efficient, unified fund management on a global

Minority interest in consolidated subsidiaries amounted to ¥7.3 billion.

consolidated basis.

Net Income
Net income totaled ¥80.4 billion, an increase of ¥21.0 billion (35%)
over fiscal 2007. Net income per share was ¥257.50 compared with

Cash Flows¥189.88 in fiscal 2007. Diluted net income per share increased from

Cash flows from operating activities amounted to ¥188.8 billion¥189.66 to ¥257.43.

in fiscal 2008, due mainly to income before income taxes in theamount of ¥132.3 billion, an increase of ¥24.0 billion (22%). Net cash
provided by operating activities increased by ¥11.4 billion (6%) from

Liquidity and Capital Resources¥177.4 billion in fiscal 2007.

Toyota Industries’ financial policy is to ensure sufficient financing

by ¥138.7 billion in fiscal 2008, attributable primarily to payments forand liquidity for its business activities and to maintain strong balancepurchases of property, plant and equipment amounting to ¥135.5

sheets. Currently, funds for capital investments and other long-termbillion, down ¥20.0 billion (13%). Net cash used in investing activities

capital needs are provided from retained earnings and long-term

decreased by ¥25.7 billion (16%) from ¥164.4 billion for fiscal 2007.

Cash flows from investing activities resulted in a decrease in cash

debt, and working capital needs are met through short-term loans.

Cash flows from financing activities resulted in an increase inLong-term debt financing is carried out mainly through issuance of

cash by ¥33.9 billion in fiscal 2008, due mainly to repayments ofcorporate bonds and loans from financial institutions.

bonds in an amount of ¥60.0 billion, an increase of ¥44.1 billion

In addition to current assets such as cash and cash equivalents
and securities, Toyota Industries maintained a commercial paper
issuance capacity of ¥100.0 billion as of March 31, 2008.
Toyota Industries continues to maintain its solid financial
condition. Through the use of such current assets as cash and(275%). Net cash provided by financing activities increased by ¥14.2
billion from ¥19.7 billion in fiscal 2007.
After translation adjustments, cash and cash equivalents as ofMarch 31, 2008 stood at ¥121.2 billion, an increase of ¥12.7 billion(12%) over fiscal 2007.

cash equivalents and securities, as well as free cash flows andfunds procured from financial institutions, Toyota Industries believes
that it will be able to provide sufficient funds for the working capitalnecessary to expand existing businesses and develop new projects,
as well as for future investments.
Regarding fund management, the Company undertakes
integrated fund management of its subsidiaries in Japan, while Toyota

Investment in Property, Plant and Equipment
During fiscal 2008, Toyota Industries made a total investment of¥130.7 billion in property, plant and equipment (including vehicles
and materials handling equipment for lease) in order to launch new

Toyota Industries Report 200869

Financial Section

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

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

(%)

4,000

80

3,500

70

3,000

60

2,500

50

2,000

40

1,500

30

1,000

20

500

10

300

250

200

150

100

50

0
(FY)

0

04

05

06

07

08

(FY)

Basic
Diluted

0

04

05

06

07

08

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

products, streamline and upgrade production equipment, andan anticipated ongoing depreciation of the U.S. dollar, further rises inaugment R&D facilities.

raw materials costs and a downturn in the global stock market. ThereIn the Automobile Segment, investment in property, plant andare also concerns over the impact that a delay in the U.S. economic

equipment totaled ¥43.5 billion. A primary breakdown of this amountrecovery might have on the global economy. Amid this challenging

included ¥24.1 billion for the Company, ¥4.6 billion for Tokaiseiki Co.,

operating environment, Toyota Industries forecasts consolidated net

Ltd., ¥2.7 billion for TD Deutsche Klimakompressor GmbH, ¥2.5

sales of ¥2,050.0 billion, operating income of ¥77.0 billion, ordinary

billion for TD Automotive Compressor Georgia, LLC, ¥2.2 billion forincome of ¥107.0 billion and net income of ¥59.0 billion.

Tokyu Co., Ltd., ¥2.1 billion for Iwama Loom Works, Ltd., ¥1.4 billion

By segment, we forecast net sales of ¥970.0 billion in thefor Michigan Automotive Compressor, Inc. and ¥1.2 billion for Toyota

Automobile Segment and ¥840.0 billion in the Materials HandlingIndustry Automotive Parts (Kunshan) Co., Ltd.

Equipment Segment. We are determined to place utmost emphasis

The Materials Handling Equipment Segment made an investment

on product quality, the environment and safety, as well as promotein property, plant and equipment in the total amount of ¥57.0 billion.

the development of leading-edge technologies to provide high value-

The primary breakdown comprised ¥8.6 billion for the Company, ¥20.4

added products that anticipate customer needs. Toyota Industries

billion for the Toyota Industries Sweden Group, ¥2.6 billion for Handa

will further make concerted efforts to strengthen sales and service

Casting Co., Ltd., ¥2.5 billion for the Aichi Group, ¥1.5 billion for Toyota

structures, enhance the value chain and undertake Group-wide cost-Industries Equipment Mfg., Inc. and ¥1.2 billion, respectively, for Toyota

reduction activities.

Industries Equipment S.A. and Indiana Hydraulic Equipment Corp.

Our projections are based on an exchange rate of ¥100.0 = US$1.

Investment in property, plant and equipment in the Logistics
Segment totaled ¥14.4 billion, including ¥13.0 million for theCompany, ¥8.6 billion for Wanbishi Archives Co., Ltd. and ¥3.7 billion
for Taikoh Transportation Co., Ltd.

Dividend Policy

The Textile Machinery Segment made an investment in property,

The Company regards the benefits of shareholders as one of its mostplant and equipment in the total amount of ¥1.4 billion, including ¥1.1

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

billion for the Company.

to strengthen Toyota Industries’ corporate constitution, promote

The Others Segment made an investment in property, plant andequipment in the total amount of ¥14.3 billion, including ¥8.7 billion
for the Company and ¥5.1 billion for TIBC Corporation.
Necessary funds were provided by a portion of bonds as well as
treasury stock and bank loans.

proactive business development and raise its corporate value.
The Company’s dividend policy is to meet the expectations ofshareholders while giving full consideration to business performance,
capital demand, the dividend payout ratio on a consolidated basis
and other factors. Toyota Industries’ Ordinary General Meeting of
Shareholders, held on June 20, 2008, approved a year-end cash
dividend of ¥32.0 per share. Including the interim cash dividend of

Strategies and Outlook
Outlook for Results for Fiscal 2009
In fiscal 2009, ending March 31, 2009, uncertainties persist in view of70

Toyota Industries Report 2008

¥28.0 per share, cash dividends for the year totaled ¥60.0 per share,
an increase of ¥10.0 per share over fiscal 2007.
The dividend payout ratio was 33.1%. On a consolidated basis, it
was 23.3%.

Cash Flows

Investment in Property,
Plant and Equipment(¥ Billion)(¥ Billion)

200

160

150

140

100

120

50

100

0
80
(50)
60
(100)
40

(150)

20

(200)
(250)

0
(FY)

04

05

06

07

08

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

Toyota Industries will use retained earnings to improve the(FY) 04

05

06

07

08

Automobile
Materials Handling Equipment
Logistics
Textile Machinery
Others

Product Development Capabilities

competitiveness of its products, augment production capacity in

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

Japan and overseas, as well as expand into new fields of businessIndustries proactively develops new products by utilizing its leading-and strengthen its management platform in securing future profits foredge technologies, as it strives to anticipate increasingly sophisticatedits shareholders.

and diversifying needs of the market and ensure the satisfaction of

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

its customers. R&D activities are focused mainly on developing andinterim cash dividends as prescribed in Article 454-5 of the Corporate

upgrading products in current business fields and peripheral sectors.

Law, and it is the Company’s basic policy to pay dividends fromToyota Industries expects that revenues derived from these fields willretained earnings twice a year (interim and annual). The Company’s

continue to account for a significant portion of total revenues andArticles of Incorporation also stipulate that what is prescribed in

anticipates that future growth will be contingent on the development

Article 459-1 of the Corporate Law can be added to the Articles ofand sales of new products in these fields. Toyota Industries believes that

Incorporation. As the Company’s policy, discretion to pay interim cash

it can continue to develop appealing new products. However, Toyota

dividends is determined by the Board of Directors while payment

Industries may not be able to forecast market needs and develop

of year-end cash dividends is subject to approval at the Ordinary

and introduce appealing new products in a timely manner. This could

General Meeting of Shareholders.

result in lower future growth and have an adverse impact on Toyota
Industries’ financial condition and business results. Such a situation
could result from risks that include no assurance Toyota Industries

Risk Information

can allocate sufficient future funds necessary for the development

The following represent risks that could have a material impact on

successful, as forecasts of products supported by the market may not

Toyota Industries’ financial condition, business results and sharealways be accurate; and no assurance that newly developed products

prices. The risks mentioned in this annual report represent only aand technologies will always be protected as intellectual property.

of appealing new products; no assurance that product sales will be

portion of the risks that could have an impact on Toyota Industries’
financial condition and business results, and do not necessarily coverIntellectual Property Rights

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

In undertaking its business activities, Toyota Industries has acquired

could be affected in the future by risks currently unknown or not

numerous intellectual property rights, including those acquiredconsidered noteworthy or significant.

overseas, such as patents related to its products, product designs
and manufacturing methods. However, not all patents submitted will

Principal Customers

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

Toyota Industries’ automobile and engine products are sold primarily

rejected by patent authorities or invalidated by third parties. Also,

to TMC. In fiscal 2008, net sales to TMC accounted for 35.6% of

a third party could circumvent a patent of Toyota Industries andconsolidated net sales. Therefore, TMC’s vehicle sales could have an

introduce a competing product into the market. Moreover, Toyota

impact on Toyota Industries’ business results. As of March 31, 2008,

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

TMC held 24.6% of the Company’s voting rights.

Toyota Industries could become a party subject to litigation involving
the intellectual property rights of a third party.

Toyota Industries Report 200871

Financial Section

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

Product Defects

Alliances with Other Companies

Guided by the basic philosophy of “offering products and services

Aiming to expand its businesses, Toyota Industries engages in jointthat are clean, safe and of high quality,” Toyota Industries makes its

activities with other companies through alliances and joint ventures.

utmost efforts to enhance quality. However, Toyota Industries cannot

However, a wildly fluctuating market trend or a disagreement between

guarantee all its products will be defect-free and that product recalls

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

will not be made in the future. Toyota Industries is insured for productother reasons, could prevent Toyota Industries from deriving theliability indemnity. However, Toyota Industries cannot guarantee that

intended benefits of its alliances.

this insurance will sufficiently cover final indemnity amounts incurred.
Product defects that could lead to large-scale recalls and productExchange Rate Fluctuations

liability indemnities could result in large cost burdens and have a

Toyota Industries’ businesses encompass the production and sales

significant negative impact on the evaluation of Toyota Industries.

of products and the provision of services worldwide. Generally, theIt could also have an adverse effect on Toyota Industries’ financial

strengthening of the yen against other currencies (especially against

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

the U.S. dollar and the euro, which account for a significant portion ofof profitability and decrease in share prices of Toyota Industries.

Toyota Industries’ sales) has an adverse impact on Toyota Industries’
business, while a weakening of the yen has a favorable impact. An

Price Competition

increase in the value of currencies in countries or regions where

Toyota Industries faces extremely harsh competition in each of the

Toyota Industries carries out production could lead to an increase inindustries in which it conducts business, including its Automobile

local production, procurement and distribution costs. Such an increase

and Materials Handling Equipment businesses, which are the core

in costs could reduce Toyota Industries’ price competitiveness.

of Toyota Industries’ earnings foundation. Toyota Industries believes

Additionally, because export sales of several businesses are

it offers high value-added products that are unrivalled in terms ofdenominated mainly in yen, exchange rate fluctuations could have an

technology, quality and cost. Amid an environment characterized

adverse impact on Toyota Industries’ financial condition and businessby intensifying price competition, however, Toyota Industries may

results due to a change in market prices.

be unable to maintain or increase market share against low-costcompetitors or to maintain profitability. This could have an adverse

Share Price Fluctuations

impact on Toyota Industries’ financial condition and business results.

Toyota Industries holds marketable securities, and therefore bears
the risk of price fluctuations of these shares. Based on fair market

Reliance on Suppliers of Raw Materials andComponents

value of these shares at the end of the fiscal year under review,

Toyota Industries’ products rely on various raw materials andmarketable securities could worsen depending on future share pricecomponents from suppliers outside the Toyota Industries Group.

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

Toyota Industries has concluded basic business contracts with theseof pension assets, leading to an increase in the pension shortfall.

Toyota Industries had unrealized gains. However, unrealized gains on

external suppliers and assumes it can carry out stable transactions
has no assurances against future shortages of raw materials andEffects of Disasters, Power Blackouts and Other
Incidents

components, which arise from a global shortage due to tight supply

Toyota Industries carries out regular checks and inspections of its

or an unforeseen accident involving a supplier. Such shortages could

production facilities to minimize the effect of production breakdown.

have a negative effect on Toyota Industries’ product production andHowever, there is no assurance Toyota Industries can completely

cause an increase in costs, which could have an adverse impact on

prevent or lessen the impact of man-made or natural disasters,

Toyota Industries’ financial condition and business results.

including malfunctions of production facilities, fires at production

for raw materials and components. However, Toyota Industries

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

Environmental Regulations

Industries’ domestic production facilities and most of its businessIn view of its social responsibilities as a company, Toyota Industries

partners are situated in the Chubu region. Therefore, a major

strives to reduce any burden on the environment resulting fromearthquake such as the Tokai Earthquake, or an incident that affects

its production processes, as well as strictly adheres to applicable

other operations, could delay or stop production or shipment activities.

environmental laws and regulations. However, various environmental

Such prolonged delays and stoppages could have an adverse impact

regulations could also be revised and strengthened in the future.

on Toyota Industries’ financial condition and business results.

Accordingly, any expenses necessary for continuous strict adherence
costs and have an adverse impact on Toyota Industries’ financial

Latent Risks Associated with International
Activities

condition and business results.

Toyota Industries manufactures and sells products and provides

to these environmental regulations could result in increased business72

Toyota Industries Report 2008

services in various countries. Such unforeseen factors as social

thus becomes an expense and is recognized as a liability in futurechaos, including political disruptions, terrorism and wars, as well as

accounting periods. Toyota Industries believes its assumptions arechanges in economic conditions, could have an adverse impact onreasonable. However, differences between actual results or changes

Toyota Industries’ financial condition and business results.

in the assumptions could have an impact on retirement benefits andretirement benefit expenses and liabilities after employee retirement.

Retirement Benefit Liabilities
Toyota Industries’ employee retirement benefit expenses and liabilities
are calculated based on expected rates of return on pension assets
as well as assumptions upon making actuarial calculations thatincorporate discount rates and other factors. Therefore, differences

Toyota Industries’ Relationship to Toyota
Motor Corporation

between actual results and assumptions as well as changes in the

Due to historical reasons, Toyota Industries maintains close

assumptions could have a significant impact on recognized expenses

relationships with TMC and Toyota Group companies in terms ofand calculated liabilities in future accounting periods.

capital and business dealings.

Historical BackgroundSignificant Accounting Policies andEstimates

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

Toyota Industries’ financial statements are prepared in conformity

Department within the Company based on his resolve to manufacturewith accounting principles and practices generally accepted inJapanese-made automobiles. In 1937, the Automobile Department

Japan. In preparing financial statements, management must makewas spun off and became an independent company, Toyota Motorestimates, judgments and assumptions that affect reported amounts

Co., Ltd. (the present Toyota Motor Corporation).

Toyoda and then Managing Director of Toyota Industries (thenToyoda Automatic Loom Works, Ltd.), established the Automobile

of assets and liabilities at fiscal year-end as well as revenues andexpenses during each fiscal year. Among Toyota Industries’ significant

Capital Relationshipaccounting policies, the following categories require a considerable

In light of this historical background, Toyota Industries and TMC

degree of judgment and estimation and are highly complex.

have maintained a close capital relationship. As of March 31, 2008,
Toyota Industries held 6.4% (200,195 thousand shares) of TMC’s

Allowance for Doubtful Accounts

total shares issued. Likewise, as of the same date, TMC held 24.6%

To prepare for the risk of receivables becoming uncollectible, Toyota

of Toyota Industries’ total voting rights. Toyota Industries is a TMC

Industries estimates its allowance for doubtful accounts by utilizing

affiliate accounted for by the equity method.

the percentage of historical experiences in credit losses for ordinary
receivables and individually examining the feasibility of collection for

Business Relationshipreceivables that seem to be uncollectible. Evaluating the allowance for

Toyota Industries assembles certain cars and produces automobile

doubtful accounts involves judgments made in accordance with theengines under consignment from TMC. Additionally, we sell a portion

nature of the situation, and this allowance represents an essential andof our other components and products directly or indirectly to othercrucial estimate—including future estimates of cash flow amounts andToyota Group companies. In fiscal 2008, our net sales to TMC

timing—that could change significantly. Based on currently available

accounted for 35.6% of our consolidated net sales.

information, Toyota Industries’ management believes its present
allowance for doubtful accounts is sufficient. However, the need toContributions to the Toyota Groupsignificantly increase allowance for doubtful accounts in the future

As a member of the Toyota Group, Toyota Industries aims to

could have an adverse impact on Toyota Industries’ business results.

contribute to strengthening the competitiveness of TMC and otherToyota Group companies in such areas as quality, cost, delivery andAllowance for Retirement Benefits

technologies. Toyota Industries is confident that raising the Toyota

Calculations differ for retirement benefits, retirement benefit expenses

Group’s competitiveness will lead to increases in our sales to andand liabilities after employee retirement, as well as benefits forprofits from the Toyota Group, thereby contributing to raising Toyota

employees on leave of absence, because different assumptions are

Industries’ corporate value.

used at the time of calculation. Assumptions include such factors as
discount rates, amount of benefits, interest expenses, expected rates
of return on pension assets and mortality rates. The difference inamounts between these assumptions and actual results is calculated
cumulatively and amortized over future accounting periods, andToyota Industries Report 200873

Financial Section

Consolidated Balance Sheets

Toyota Industries Corporation
As of March 31, 2008 and 2007
Thousands of
U.S. dollars (Note 1)

Millions of yen

ASSETS

2008

2007

2008

¥ 121,284¥ 108,569$ 1,210,543

244,035

234,6112,435,723

45

48

453

Inventories (Notes 5 and 8)

124,633

120,737

1,243,973

Deferred tax assets (Note 16)

18,86017,924

188,243

Other current assets

89,241

88,894

890,719

Less — allowance for doubtful accounts(2,486)(2,784)(24,820)595,612568,001

5,944,834

Buildings and structures (Note 6)

188,776

171,897

1,884,187

Machinery, equipment and vehicles (Note 6)

266,347

269,769

2,658,427

Tools, furniture and fixtures (Note 6)

28,14526,081

280,920

Land (Note 8)

107,727

99,117

1,075,234

Construction in progress

31,84939,056

317,894

Total property, plant and equipment

622,847

605,922

6,216,662

Goodwill

137,163

101,1021,369,030

Software12,522

11,714

124,991

Total intangible assets

149,685

112,816

1,494,021

1,506,312

2,172,648

15,034,555

Investments in unconsolidated subsidiaries and affiliated companies

15,79660,415

157,662

Long-term loans

8,056

8,460

80,415Long-term prepaid expenses

16,574

11,603

165,426

Deferred tax assets (Note 16)

8,578

7,435

85,621Other investments and other assets

42,29938,784422,188

Less — allowance for doubtful accounts

(177)

(232)

(1,768)

Total investments and other assets

1,597,439

2,299,117

15,944,099

2,369,972

3,017,856

23,654,782¥2,965,585¥3,585,857$29,599,616

Current assets
Cash and cash equivalents
Trade notes and accounts receivable
Short-term investments

Total current assets
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.

74

Toyota Industries Report 2008

Thousands of
U.S. dollars (Note 1)

Millions of yen

LIABILITIES AND NET ASSETS

2008

2007

2008

¥ 214,084
52,32633,70020,00030,38979,241
27,137
22,632
1,881
626
56,020¥ 205,168
37,10333,76060,00037,80877,69825,85422,0203,162
554
55,275$ 2,136,789
522,274
336,361
199,621
303,320
790,912
270,863
225,895
18,7786,252
559,145538,041

558,405

5,370,210

230,766
185,513482,787
47,102
27,376

250,761
141,567
751,764
45,482
27,3932,303,290
1,851,613
4,818,724
470,136
273,247

973,547
1,511,588

1,216,969
1,775,374

9,717,010
15,087,220

80,46280,462

803,101

106,184
466,780(50,644)

105,055
402,431(47,253)

1,059,830
4,658,955(505,481)

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

602,783

540,696

6,016,406

752,553140
41,477

1,157,793(0)52,9127,511,261
1,402
413,991

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

794,171695
56,345
1,453,996¥2,965,585

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

7,926,653
6,946
562,390
14,512,396$29,599,616

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
Shareholders’ equity (Note 11)
Common stock:
Authorized — 1,100,000,000 shares
Issued— 325,840,640 shares as of March 31, 2008
325,840,640 shares as of March 31, 2007
Capital surplus
Retained earnings
Treasury stock at cost
14,251,070 shares as of March 31, 2008
13,765,165 shares as of March 31, 2007

Toyota Industries Report 200875

Financial Section

Consolidated Statements of Income

Toyota Industries Corporation
For the years ended March 31, 2008, 2007 and 2006
Thousands of
U.S. dollars (Note 1)

Millions of yen

2008

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
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

2007

2006

2008

¥2,000,536 ¥1,878,398 ¥1,505,955
1,678,493 1,586,781 1,276,499
322,043
291,616
229,456
11,65082,362
2,063
10,05822,36596,68896,853

11,32574,360
1,678
8,733
21,52784,03689,954

10,87558,382
1,982
6,507
20,30767,36164,040116,284
822,064
20,600100,391
223,230
965,055
966,700

14,73734,850
3,043
987
2,749

13,76027,547
–
2,389
317

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

147,098
347,847
30,3789,860
27,445

8,547

6,868

7,665

85,308(19,453)–(2,988)(12,840)
126,488(17,855)(1,932)(3,567)(8,997)
108,484(11,955)(1,716)(4,487)(9,099)80,635(194,164)–(29,824)(128,162)
1,262,487

5,866

4,305

–

58,556–80,63530,446(2,137)
5,249
47,077–
1,321,043
469,682(25,237)
73,514$ 803,083–(4,390)132,355
108,399
47,05743,750(2,528)(2,209)7,365
7,390¥ 80,460 ¥ 59,468 ¥YenNet income per share — basic (Note 22)
Net income per share — diluted (Note 22)
Equity per share (Note 23)
Cash dividends per share
The accompanying notes are an integral part of these financial statements.

76

Toyota Industries Report 2008

$19,967,427
16,753,103
3,214,324¥ 257.50
257.43
4,483.32
60.00¥ 189.88
189.66
5,612.11
50.00

U.S. dollars (Note 1)¥ 146.16
146.02
5,044.45
38.00

$

2.57
2.57
44.75
0.60

Financial Section

Consolidated Statements of Changes in Net Assets

Toyota Industries Corporation
For the years ended March 31, 2008, 2007 and 2006
Millions of yen
Common stock Capital surplus

Balance at March 31, 2005
Dividends paid
Bonuses to directors and corporate auditors
Decrease due to increase in affiliates
accounted for under the equity method
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, 2006
Dividends 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 decrease inconsolidated 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
Dividends paid
Decrease due to increase inconsolidated subsidiaries
Decrease due to decrease inconsolidated subsidiaries
Decrease due to increase in affiliates
accounted for under the equity method
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, 2008

Retainedearnings

Treasury stock Net unrealized Deferred gains
at costgains or losses or losses onon other
hedgessecurities¥(16,726) ¥ 591,218
–
–
–
–
–
–

¥

Foreigncurrencytranslation
adjustments

Subscription
rights to shares

Minority
interests inconsolidated
subsidiaries

–
–
–
–

¥29,861
–
–
–

¥

–
–
–
–

¥40,904–––¥80,462–––¥105,600–––¥325,330(11,793)(406)(1,821)

–
–
–
–

–
–
65
–

47,077
–
–
–

–
(52)
2,415
–

–
–
–
455,972

–
–
–
–

–
–
–
4,024

–
–
–
–

–
–
–
8,366

80,462––––

105,665––––

358,385(6,386)(6,864)(427)(1,673)(14,363)––––

1,047,190
–
–
–
–

–
–
–
–
–

33,886
–
–
–
–

–
–
–
–
–

49,270
–
–
–
–

–

–

(71)

–

–

–

–

–

–

–
–
–
–

–
–
(610)
–

59,468––––(35,524)
2,634
–

–
–
–
110,602

–
–
–
(0)

–
–
–
19,026

–
–
–
202

–
–
–
9,607

80,462––

105,055––

402,431(17,489)(1,316)(47,253)––

1,157,793
–
–

(0)
–
–

52,912
–
–

202
–
–

58,878
–
–

–

–

(77)

–

–

–

–

–

–

–

–

2,771

–

–

–

–

–

–

–
–
–
–

–
–
1,128
–

80,460––––(8,728)
5,337
–

–
–
–
(405,239)

–
–
–
140

–
–
–
(11,434)

–
–
–
493

–
–
–
(2,532)¥80,462¥106,184¥466,780¥(50,644) ¥ 752,553¥140¥41,477¥695¥56,345

Foreigncurrencytranslation
adjustments

Subscription
rights to shares

Minority
interests inconsolidated
subsidiaries

(7)
–
–

$528,122––$2,025––$587,670––

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

Balance at March 31, 2007
Dividends paid
Decrease due to increase inconsolidated subsidiaries
Decrease due to decrease inconsolidated subsidiaries
Decrease due to increase in affiliates
accounted for under the equity method
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, 2008

Retainedearnings

Treasury stock Net unrealized Deferred gains
at costgains or losses or losses onon other
hedgessecurities$803,101 $1,048,563 $4,016,685 $(471,637) $11,555,974––(174,560)––––(13,144)
–
–

$

–

–

(771)

–

–

–

–

–

–

–

–

27,662

–

–

–

–

–

–

–
–
–
–

–
–
11,267–803,083––––(87,122)53,278––––(4,044,712)

–
–
–
1,409

–
–
–
(114,131)

–
–
–
4,921

–
–
–
(25,280)$(505,481) $ 7,511,261$1,402$413,991$6,946$562,390$803,101 $1,059,830 $4,658,955

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

Toyota Industries Report 200877

Financial Section

Consolidated Statements of Cash Flows

Toyota Industries Corporation
For the years ended March 31, 2008, 2007 and 2006
Thousands of
U.S. dollars (Note 1)

Millions of yen

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:
Depreciation and amortization
Increase (decrease) in allowance for doubtful accounts
Interest and dividends income
Interest expenses
Equity in net earnings of affiliates(Increase) decrease in receivables(Increase) decrease in inventories
Increase (decrease) in payables
Others, net
SubtotalInterest and dividends income received
Interest expenses paid
Income taxes paid
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
Proceeds from sales of investment securities
Payments for acquisition of subsidiaries’ stock resulting inchange in scope of consolidation
Proceeds from acquisition of subsidiaries' stock resulting inchange in scope of consolidation
Payments for loans madeProceeds from collections of loans
Others, net
Net cash used in investing activities
Cash flows from financing activities
Increase (decrease) in short-term loans
Increase (decrease) in commercial paper
Proceeds from long-term loans
Repayments of long-term loans
Proceeds from issuances of bonds
Repayments of bonds
Payments for repurchase of treasury stock
Cash dividends paid
Cash dividends paid to minority shareholders
Others, net
Net cash provided by (used in) financing activities
Translation adjustments of cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
The accompanying notes are an integral part of these financial statements.

78

Toyota Industries Report 2008

2008

2007

2006

2008

¥ 132,355¥ 108,399¥ 80,635$ 1,321,043

119,905(365)(49,588)
19,453(2,749)(6,623)(7,490)7,568(6,777)
205,687
49,506(19,318)(47,069)
188,805

106,060(250)(41,307)17,855(317)(25,836)(9,221)
15,022
17,238
187,642
41,294(17,777)(33,692)
177,467

87,287101(29,204)
11,955(3,593)(27,435)(9,227)
21,376
12,161
144,055
29,236(11,009)(30,498)
131,784

1,196,783(3,643)(494,945)
194,164(27,445)(66,107)(74,766)
75,539(67,649)
2,052,972
494,122(192,815)(469,806)
1,884,474(135,561)
15,456(1,568)26,551(36,929)(155,550)
7,624(17,604)
8,419(1,939)(161,504)
8,415(47,726)
2,045–(1,353,040)
154,269(15,652)
265,010(368,597)

424

–

–

4,240

(2,320)3,059(7,901)(138,789)(3,172)
4,490(6,714)(164,446)(2,256)
3,264(7,250)(205,013)(23,164)
30,534(78,861)(1,385,261)

7,115–
51,662(10,210)–(60,000)(8,728)(17,489)(1,594)
5,252(33,992)(3,309)12,714
108,569¥ 121,284(12,434)–
40,004(14,020)
25,107(15,980)(35,524)(13,250)(1,039)7,388(19,749)
2,700(4,027)
112,596¥ 108,569(22,902)
29,52038,824(3,365)68,730(20,300)(52)(11,784)
(854)
7,357
85,172
117
12,060100,535¥ 112,596

71,025–515,648(101,913)–(598,862)(87,122)(174,560)(15,919)
52,426(339,278)(33,027)
126,908
1,083,636$ 1,210,543

Financial Section

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 accordancewith the provisions set forth in the Corporate Law of Japan and the
Financial Instruments and Exchange Law, and in conformity withaccounting principles generally accepted in Japan, which are different
in certain respects from the application and disclosure requirements ofInternational Financial Reporting Standards.
Certain items presented in the consolidated financial statements

submitted to the Director of Kanto Finance Bureau in Japan havebeen reclassified in these accounts for the convenience of readers
outside Japan.
Amounts in U.S. dollars are included solely for the convenience ofreaders outside Japan. The rate of ¥100.19=US$1, the approximate
rate of exchange prevailing at March 31, 2008, has been used intranslation. The inclusion of such amounts are not intended to imply
that the Japanese yen actually represent, or have been or could be
converted into, equivalent amounts in U.S. dollars at this rate or any
other rates.

2. Summary of significant accounting policies(1) Consolidation
The consolidated financial statements include the accounts of theCompany and its 163 subsidiaries (45 domestic subsidiaries and 118
overseas subsidiaries, which are listed on pages 60 and 61) as of March
31, 2008, 162 subsidiaries (45 domestic subsidiaries and 117 overseas
subsidiaries) as of March 31, 2007 and 153 subsidiaries (43 domestic
subsidiaries and 110 overseas subsidiaries) as of March 31, 2006.
For the year ended March 31, 2008, two subsidiaries were newly
added to the scope of consolidation and three companies were
excluded from the scope of consolidation because of liquidation, sales,
mergers and acquisitions. Additionally, 12 subsidiaries were newly
added to the scope of consolidation and 10 companies were excluded
from the scope of consolidation because of mergers and acquisitions
as a result of reorganization of the sales structure.
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 of mergers andacquisitions.
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 of mergers and acquisitions.
Some of the affiliates are not accounted for under the equity method
since their net income/losses, retained earnings and other financial
amounts are immaterial.
The fiscal years of certain subsidiaries are different from the fiscal
year of the Company. Since the difference is not more than threemonths, the Company is using those subsidiaries’ statements for
those fiscal years, making adjustments for significant transactions thatmaterially affect the financial position or results of operations.
All significant intercompany transactions, balances and unrealized
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 of control.

(2) Equity method
Investments in 15 major affiliates in 2008, 21 major affiliates in 2007
and 22 major affiliates in 2006 are accounted for by the equity methodof accounting. For the year ended March 31, 2008, one affiliate was
newly added to the scope of equity-method accounting from the scopeof consolidation and seven affiliates were excluded from the scopeof equity-method accounting because of transfer to the scope of
consolidation, mergers and a decline of holding shares.
For the year ended March 31, 2007, one affiliate was newly added
to the scope of equity-method accounting and two affiliates were
excluded from the scope of equity-method accounting and added tothe scope of consolidation.
For the year ended March 31, 2006, two affiliates were newly added
to the scope of equity-method accounting.

Investments in unconsolidated subsidiaries and affiliates notaccounted for by the equity method are stated at cost due to theirinsignificant effect on the consolidated financial statements.
The major affiliates accounted for by the equity method are listed on
page 61.

(3) Translation of foreign currencies
Foreign currency denominated receivables and payables are translated
into Japanese yen at the year-end exchange rates and the resulting
transaction gains or losses are included in the consolidated statements
of income.
All asset and liability accounts of foreign subsidiaries and affiliates
are translated into Japanese yen at year-end exchange rates andall 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,
generally with original maturities of three months or less, that are readily
convertible to known amounts of cash and are so near maturity thatthey present insignificant risk of changes in value because of changes ininterest rates.

(5) Marketable securities and investment in securities
Toyota Industries classifies securities into four categories by purpose ofholding: trading securities, held-to-maturity securities, other securities
and investments in unconsolidated subsidiaries and affiliates. Toyota
Industries did not have trading securities or held-to-maturity securities
as of March 31, 2008 and 2007.
Other securities with readily determinable fair values are stated at fairvalue based on market prices at the end of the year. Unrealized gains
and losses are included in “Net unrealized gains on other securities” asa separate component of 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)).

(6) Inventories
Inventories are stated mainly at cost determined by the moving-averagemethod.

(7) Property, plant and equipment, and depreciation
Property, plant and equipment are stated at cost. Depreciation
expenses of property, plant and equipment are computed mainlyby the declining-balance method for the Company and Japanesesubsidiaries and by the straight-line method for foreign subsidiaries.

Toyota Industries Report 200879

Financial Section

Notes to Consolidated Financial Statements
Significant renewals and additions are capitalized at cost. Repairs
and maintenance are charged to income as incurred.
Accumulated depreciation as of March 31, 2008 and 2007 was¥703,879 million (US$7,025,448 thousand) and ¥651,653 million,
respectively.
Toyota Industries changed the depreciation method for property,
plant and equipment acquired on or after April 1, 2007 in accordancewith the revised Corporate Tax Law of Japan, effective from the fiscal
year beginning April 1, 2007. As a result, operating income decreased¥3,181 million (US$31,752 thousand), and ordinary income andincome before income taxes decreased ¥3,182 million (US$31,764
thousand), respectively.
As for property, plant and equipment acquired before April 1,
2007, Toyota Industries applied the pre-revised depreciation method
during the fiscal year beginning April 1, 2007. Among these, property,
plant and equipment for which the allowable limit on the depreciable
amount has been reached are to be depreciated evenly over five years
beginning from the following fiscal year.
As a result, operating income decreased ¥1,762 million (US$17,596
thousand), and ordinary income and income before income taxes
decreased ¥1,763 million (US$17,601 thousand), respectively.

(8) Intangible assets and amortization
Amortization of intangible assets is computed using the straight-line
method. Software costs for internal use are amortized by the straightline 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 is charged toincome as incurred.
Accumulated amortization of intangibles and goodwill as of March
31, 2008 and 2007 was ¥76,371 million (US$762,263 thousand) and¥70,124 million, respectively.

(9) Impairment of fixed assets
Calculation of the impairment of fixed assets is based on reasonable
and supportable assumptions and projection of the grouping ofassets and recoverable value, with due consideration for the specificconditions of each company.
The recoverable amount of assets is calculated based on net
selling price.

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

(11) Allowance 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.

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

It was resolved at the Board of Directors meeting on March
20, 2008 that the Company abolish the retirement benefit planfor directors as of the closing of the Ordinary General Meetingof Shareholders held on June 20, 2008. In appreciation of theircontributions to the Company while in office until the closing of theOrdinary General Meeting of Shareholders, retirement benefits will be
paid to directors within reasonable amounts to be determined basedon the tenure of service to the Company. The amounts and methodsof payment thereof will be entrusted to the decision of the Board of
Directors.

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

(15) Hedge accounting(a) Method of hedge accounting
Mainly the deferral method of hedge accounting is applied. In the caseof 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 and foreign currency
option contracts)
Hedged items:
Risk of change in interest rate on borrowings
and risk of change in forward exchange rate ontransactions 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 raterisks 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 inceptionof the hedge to the date of measurements performed. Currently it isconsidered that there are high correlations 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.

(16) Consumption tax
The consumption tax under the Japanese Consumption Tax Law
withheld by Toyota Industries on sales of goods is not included in theamount 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 notincluded in the related amount.

(17) Income taxes(13) Allowance for retirement benefits
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 byan internal policy describing the retirement benefits for directors andcorporate auditors is accrued.

80

Toyota Industries Report 2008

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 be realized.

(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 thecalculation of basic net income per share, except that the weighted-

average number of shares outstanding includes the additional dilution
from potential common stock equivalents such as subscription rights
to shares. Cash dividends per share shown in the consolidated
statements of income are the amounts applicable to the respective
years.

3. Changes in accounting policies and adoption of new accounting standards
For the year ended March 31, 2008
Classification Change in Consolidated Statements ofIncomeon December 9, 2005 by the Accounting Standards Board of Japan.
If the previous accounting policy is applied, net assets at March 31,
2007 were ¥1,751,402 million.

Effective from the fiscal year beginning April 1, 2007, depreciation
expense, which was listed as a separate component of non-operating
expenses, is included in other non-operating expenses because theamount is immaterial. Depreciation expense in fiscal 2008 was ¥60
million (US$605 thousand).

Accounting Standard for Share-based Payment

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 AccountingStandards Board of Japan. As a result, ordinary income and income
before income taxes and minority interests decreased by ¥554 million.

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 “AccountingStandards for Presentation of Net Assets in the Balance Sheet”
and its Implementation Guidance No. 8 “Guidance on AccountingStandards for Presentation of Net Assets in the Balance Sheet” issued

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 of Japan and its Implementation
Guidance No. 11 “Guidance on 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 ¥202 million.

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 27, 2003 by the Business Accounting Council
in Japan, and Financial Accounting Standard No. 7 “AccountingStandard for Business Divestitures” and the related Implementation
Guidance No. 10 “Guidance on Accounting Standard for Business
Combinations and Accounting Standard for Business Divestitures”
issued on December 27, 2005 by the Accounting Standards Board ofJapan.

4. Marketable securities(1) As of and for the year ended March 31, 2008:(a) Other securities with readily determinable fair value as of March 31, 2008 are as follows:
Millions of yen
Acquisition
cost

Securities with carrying amountexceeding acquisition cost:
StocksSubtotal
Securities with carrying amountnot exceeding acquisition cost:
StocksOthersSubtotal
Total

Thousands of U.S. dollars

Carrying
amountDifference¥219,262
219,262¥1,472,631
1,472,631¥1,253,369
1,253,369$2,188,464 $14,698,392 $12,509,928
2,188,464 14,698,392 12,509,928

7,081
340
7,421
¥226,683

6,318
340
6,658
¥1,479,290

(763)
–
(763)
¥1,252,606

70,67863,062(7,617)
3,396
3,396
–
74,07466,457(7,617)$2,262,537 $14,764,849 $12,502,312

Acquisition
cost

Carrying
amountDifference(b) Other securities sold during the year ended March 31, 2008 are as follows:
Millions of yen
Proceeds

Realized gains¥6,567¥5,866

Thousands of U.S. dollars
Realized losses–

Proceeds

Realized gains$65,550$58,556

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, 2008 are as follows:
Millions of yen

Thousands of
U.S. dollars

Carrying amount

Other securities:
Domestic unlisted stocks excluding over-the-counter stocks
Money management funds
Negotiable certificate of deposit¥27,021
25,211
15,400$269,706
251,640
153,708

Toyota Industries Report 200881

Financial Section

Notes to Consolidated Financial Statements(2) 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

Securities with carrying amount exceeding acquisition cost:
StocksSubtotal
Securities with carrying amount not exceeding acquisition cost:
StocksSubtotal
Total

Carrying
amountDifference¥223,782
223,782¥2,152,078
2,152,078¥1,928,296
1,928,296

3,716
3,716
¥227,499

2,910
2,910
¥2,154,989

(806)
(806)
¥1,927,490(b) Other securities sold during the year ended March 31, 2007 are as follows:
Millions of yen
Proceeds

Realized gains¥8,419¥4,305

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:
Millions of yen
Carrying amount

Other securities:
Domestic unlisted stocks excluding over-the-counter stocks
Money management funds¥17,659
30,065

5. Inventories
Inventories as of March 31, 2008 and 2007 consist of the following:
Millions of yen

Finished goods
Raw materials
Work in process
Supplies
Total

2008
¥ 57,959
19,11635,873
11,683¥124,633

2007¥ 51,144
20,32537,841
11,426¥120,737

Thousands of
U.S. dollars

2008$ 578,500
190,799
358,060
116,615$1,243,973

6. Property, plant and equipment
Accumulated depreciation as of March 31, 2008 and 2007 is as follows:
Millions of yen

Buildings and structures
Machinery, equipment and vehicles
Tools, furniture and fixtures

82

Toyota Industries Report 2008

2008
¥159,862
468,784
75,233

2007¥146,690
437,123
67,838

Thousands of
U.S. dollars

2008$1,595,590
4,678,952
750,907

7. Long-term debt
(1) Long-term debt as of March 31, 2008 and 2007 consists of the following:Thousands of
U.S. dollars

Millions of yen

The Company:
2.70% bonds due 2008 without collateral
2.15% bonds due 2008 without collateral
1.94% bonds due 2009 without collateral
1.91% bonds due 2010 without collateral
0.41% bonds due 2007 without collateral
1.13% bonds due 2012 without collateral
1.03% bonds due 2012 without collateral
1.46% bonds due 2014 without collateral
1.01% bonds due 2010 without collateral
1.66% bonds due 2015 without collateral
Consolidated subsidiaries:
0.49-4.813% medium-term notes due 2009-2010
1.95% bonds due 2016 without collateralLong-term bank loans
Less: current portion of long-term debt and bonds
Total

2008

2007

2008

¥

–
20,00015,00020,000–50,00030,00020,00020,00030,000¥ 30,000
20,00015,00020,00030,00050,00030,00020,00020,00030,000$25,77519,991
192,019(26,506)¥416,279

25,77019,990145,940(64,372)¥392,328

257,263
199,535
1,916,552(264,560)$4,154,903–
199,621
149,716
199,621–499,052
299,431
199,621
199,621299,431(2) Annual maturities of long-term debt as of March 31, 2008 are as follows:Year ending March 31

Millions of yen

Thousands of
U.S. dollars

2010
2011
2012
2013
2014 and thereafter
Total¥ 46,713
61,083
41,87075,120191,491¥416,279$ 466,253
609,672
417,913749,782
1,911,283$4,154,903

8. Assets pledged as collateral(1) Assets pledged as collateral as of March 31, 2008 and 2007 are as follows:
Thousands of
U.S. dollars

Millions of yen

Investments in securities
Inventories
Land
Buildings and structures
Total

2008
¥40,530
1,153
875
425
¥42,9842007¥56,710
–
1,989
1,160
¥59,8592008$404,531
11,513
8,738
4,245$429,026(2) Secured liabilities as of March 31, 2008 and 2007 are as follows:
Thousands of
U.S. dollars

Millions of yen

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

2008
¥22,359
1,187
33¥23,579

2007¥21,736138
67¥21,9422008$223,171
11,848334$235,353

9. Contingent liabilities
Toyota Industries is contingently liable for guarantees as of March 31, 2008 and 2007 as follows:
Thousands of
U.S. dollars

Millions of yen

Guarantees given by the Company
Guarantees given by consolidated subsidiaries
Guarantee forwards given by the Company

2008
¥402
324
–

2007
¥ 473
455
4,200

2008
$4,015
3,236–

Toyota Industries Report 200883

Financial Section

Notes to Consolidated Financial Statements

10. Export discount bills
Export discount bills as of March 31, 2008 and 2007 are as follows:
Millions of yen

Export discount bills

2008
¥394

2007
¥443

Thousands of
U.S. dollars

2008$3,941

11. Net assets
Under the Japanese Corporate Law, amounts equal to at least 10% of
the sum of the cash dividends and other external appropriations paidby the Company and its domestic subsidiaries must be set aside as alegal reserve until it equals 25% of common stock. The legal reserve
may be used to reduce a deficit or may be transferred to common
stock by taking appropriate corporate action. In consolidation, thelegal reserves of the Company and its domestic subsidiaries areaccounted for as retained earnings.
The year-end cash dividend is approved at the Ordinary General
Meeting of Shareholders of the Company held after the close of the
fiscal year to which the dividend is applicable. In addition, interim cash
dividends may be paid upon resolution of the Board of Directors,
subject to limitations imposed by the Japanese Corporate Law.

12. Research and development expenses
Research and development expenses, which are included in selling,
general and administrative expenses and manufacturing costs,
amounted to ¥36,750 million (US$366,813 thousand), ¥34,548 millionand ¥31,166 million for the years ended March 31, 2008, 2007 and2006, respectively.

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 alsouses 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 andforeign currency option contracts into which Toyota Industries
entered have risks of fluctuations in interest rates and in foreign
currency exchange rates. Due to the fact that counterparties to

Toyota Industries represent major financial institutions whichhave high creditworthiness, Toyota Industries believes that theoverall credit risk related to its financial instruments is
insignificant.
(c) Controls in place over transactions handling derivative instruments:
Hedging transactions are executed and controlled based on
Toyota Industries’ internal policy and Toyota Industries’ hedging
activities are reported periodically to a director responsible foraccounting.

(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 fundplans, all of which are non-contributory defined benefit pension plans.
In addition, certain foreign subsidiaries maintain non-contributory
defined benefit pension plans.
Since 1987, the Company has been transferring the covering

84

Toyota Industries Report 2008

percentages of its pension plan from its lump-sum indemnities plan to
its tax-qualified pension plan. As of March 31, 2008 and 2007, its taxqualified pension plan covers 50% of total plans. Also, the Company
established an employee retirement benefit trust. In April 2003, theCompany transferred a portion of the lump-sum indemnities plan to adefined contribution pension plan.

(2) Components of allowance for retirement benefits as of March 31, 2008 and 2007 are as follows:
Thousands of
U.S. dollars

Millions of yen

2008¥149,465(105,287)
44,178(7,668)(267)
36,242(5,584)¥ 41,826

Benefit obligation
Plan assets
Unfunded benefit obligation
Unrecognized actuarial gains or losses
Unrecognized loss in prior service obligation
Net amount recognized on the balance sheets
Prepaid pension expenses
Allowance for retirement benefits

2007¥150,203(118,227)
31,9752,907(331)
34,552(6,212)¥ 40,7642008$ 1,491,820(1,050,877)
440,943(76,538)(2,670)361,735(55,737)$ 417,472

Certain subsidiaries use the simplified method to determine benefit obligations. Prepaid pension expenses are included in other investments andother assets.

(3) Components of retirement benefit expenses for the years ended March 31, 2008, 2007 and 2006 are as follows:
Thousands of
U.S. dollars

Millions of yen

2008¥ 8,897
5,235(3,847)1,207(0)¥11,493

Service cost
Interest cost
Expected return on plan assets
Amortization of prior service obligation
Amortization of unrecognized actuarial gains or losses
Retirement benefit expenses

2007¥ 9,171
5,036(3,573)398(153)¥10,878

2006¥ 7,921
4,079(2,435)94
778¥10,4382008$ 88,810
52,255(38,404)
12,055(2)$114,713

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, 2008, 2007 and 2006 are as
follows:
Method of attribution of estimated retirement benefits
to periods of employee service: Straight-line method
Discount rate
Expected return on plan assets
Amortization period of prior service obligation

Amortization period of unrecognized actuarial gains
or losses

2008

2007

2.00%
3.00%
6–11 years

2.00%
3.00%
6–11 years

20 years

20 years

2006

2.00%
3.00%
6–11 years — Straight-line method over theremaining service period of
employees
20 years — Straight-line method over the
average remaining service
period of employees(5) Plan assets relating to welfare pension fund under multiemployer pension plan:
Effective from the fiscal year beginning April 1, 2007, Toyota Industries applied a new method of disclosure of retirement benefits. Information
regarding the welfare pension fund under multiemployer pension plans as of March 31, 2008 is as follows.

As of March 31, 2007
Plan assets
Estimated benefit obligation
Variance
As of March 31, 2008
Toyota Industries Group contribution to welfare pension plan

The Japan Society of Industrial
Machinery Manufacturers’ welfare
pension fund¥97,361 million¥99,244 million¥ (1,883 million)

Other welfare pension funds¥174,653 million¥166,460 million¥ 8,192 million

4.99%

4.47%

Disclosure of retirement benefits as of March 31, 2007
The amount of plan assets calculated based on the proportion of contribution to the fund made by each domestic subsidiary was ¥12,473 million
as of March 31, 2007.

(6) Additional note regarding retirement benefit
Effective from the fiscal year beginning April 1, 2007, Toyota Industries applied Implementation Guidance No. 14 “Partial Revision No.2 ofAccounting Standard for Retirement Benefit” issued on May 15, 2007 by the Accounting Standards Board of Japan.

Toyota Industries Report 200885

Financial Section

Notes to Consolidated Financial Statements

15. Stock options(1) Stock option expenses recorded in the fiscal year and class of options
Thousands of
U.S. dollars

Millions of yen

2008
¥493

Selling, general and administrative expenses

2007
¥202

2008
$4,921(2) Stock option details, number of stock options and state of fluctuation(1) Stock option details
2008

2007

The Company

The Company

The Company

Position and number ofgrantees

Directors: 16
Managing officers and employees: 159

Directors: 17
Managing officers and employees: 152

Directors: 30
Employees: 134

Class and number of shares*

830,000 shares of common stock

802,000 shares of common stock

791,000 shares of common stock

Date of issue

August 1, 2007

August 1, 2006

August 1, 2005

1. Grantee must be employed as adirector, managing officer or regular
employee of the Company at the time of
exercise. However, this does not apply
if no more than 18 months have elapsed
after retirement or resignation from theCompany.

Same as left

Same as left

2. Other conditions of exercise shall bedecided as prescribed by the Contract
for Allotment of Stock Acquisition Rights
concluded by the Company and grantee
in accordance with resolutions at the
Meeting of Shareholders and resolutions
on the issue of stock acquisition rights
by the Board of Directors.

Same as left

Same as left

3. In the case where grantee becomesno longer applicable to the conditionsof exercise, the grantee immediately
loses stock acquisition rights and must
return the rights to the Company without
consideration.

––

Periods that grantees must
provide service in return forstock options

From August 1, 2007 to July 31, 2009

From August 1, 2006 to July 31, 2008

From August 1, 2005 to June 30, 2007

Periods that stock subscription
rights are to be exercised

Four years after determination of rights

Four years after determination of rights

Four years after determination of rights

Company name

The Company

The Company

The Company

Position and number ofgrantees

Directors: 30
Managing officers and employees: 135

Directors: 30
Managing officers and employees: 128

Directors: 30
Employees: 115

Class and number of shares*

775,000 shares of common stock

750,000 shares of common stock

728,000 shares of common stock

Date of issue

August 2, 2004

August 1, 2003

August 1, 2002

1. Grantee must be employed as a director,
managing officer or regular employee of theCompany at the time of exercise. However,this does not apply if no more than 18
months have elapsed after retirement or
resignation from the Company.

Same as left

1. Grantee must be employed as a director,
managing officer or regular employee of theCompany at the time of exercise. However,this does not apply if no more than 6 months
have elapsed 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 and grantee inaccordance with resolutions at the Meetingof Shareholders and resolutions on the issueof stock acquisition rights by the Board of
Directors.

Same as left

2. Other conditions of exercise shall bedecided as prescribed by the Contract
for Allotment of Stock Acquisition Rights
concluded by the Company and grantee inaccordance with resolutions at the Meetingof Shareholders and resolutions on the issueof stock acquisition rights by the Board of
Directors.

Periods that grantees must
provide service in return forstock options

From August 2, 2004 to June 30, 2006

From August 1, 2003 to June 30, 2005

From August 1, 2002 to June 30, 2004

Periods that stock subscription
rights are to be exercised

Four years after determination of rights

Four years after determination of rights

Four years after determination of rights

Condition of settlement ofrights2005

Condition of settlement ofrights*Number of options granted by class are listed as number of shares.

86

2006

Company nameToyota Industries Report 2008

2004

2003

(2) 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.
(a) Number of stock options
Non-exercisable stock options
Stock options outstanding at the end of the previous fiscal year
Stock options granted
Forfeitures
Conversion to exercisable stock options
Stock options outstanding at the end of the fiscal year

2008–
830,000––
830,000

2007
802,000–––
802,000

2006
791,000––
791,000
–

2005
–
–
–
–
–

2004
–
–
–
–
–

2003
–
–
–
–
–

2008
–
–
–
–
–

2007
–
–
–
–
–

2006
791,000–
655,500
5,000
130,500

2005
38,500–22,9002,000
13,600

2004
6,000
–
2,000
2,000
2,000

2003
108,000–
2,000
106,000–

2008¥5,866–682

2007¥4,642–759

2006¥3,306
5,183
–

2004
¥2,074
4,820
–

2003
¥1,982
5,370
–

2008
21.78%
4 years¥56/share
1.210%

2007
20.63%
4 years¥40/share
1.210%

Exercisable stock options
Stock options outstanding at the end of the previous fiscal year
Conversion from non-exercisable stock options
Stock options exercised
Forfeitures
Stock options outstanding at the end of the fiscal year(b) Price of options
Exact yen amounts

Paid-in value
Average market price of the stock at the time of exercise
Fair value of options on grant date2005
¥2,652
4,492–(3) Methods for estimating fair value of stock options
The methods for estimating fair value of stock options granted for fiscal 2008 and 2007 are as follows:(a) Valuation methods used: Black-Scholes model(b) Principal basic values and estimation methods
Share price fluctuations *1
Projected remaining period *2
Projected dividend *3
Non-risk interest rate *4*1 Computed based on actual share prices during a four-year period (from August 2003 to July 2007) and (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 exercised at the midpoint of the exercise period.
*3 Based on the year-end dividend for the fiscal year ended March 31, 2007 and 2006, respectively, 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 that reflects
actual past expirations.

Toyota Industries Report 200887

Financial Section

Notes to Consolidated Financial Statements

16. Income taxes(1) The significant components of deferred tax assets and liabilities as of March 31, 2008 and 2007 are as follows:
Thousands of
U.S. dollars

Millions of yen

Deferred tax assets:
Allowance for retirement benefits
Trade receivables
Accrued expenses
Net operating loss carry-forwards for tax purposes
Depreciation
Securities
Enterprise tax payable
Other
Subtotal
Less: valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Other securities
Depreciation
Land
Reserve for advanced depreciation
Reserve for special depreciation
Other
Total deferred tax liabilities
Net deferred tax liabilities

2008

2007

2008

¥ 16,576
992
8,198
3,163
5,206
2,712
1,830
11,32450,004(1,341)
48,663¥ 15,347
2,464
7,465
2,039
6,350
2,066
1,692
12,74150,168(2,742)47,425$

499,760
6,590
562
484
470
(1,975)505,893¥(457,230)

768,659
6,155
1,111
502
590
(26)
776,992¥(729,567)

4,988,131
65,780
5,619
4,839
4,697
(19,722)5,049,345$(4,563,638)

165,451
9,902
81,831
31,57851,96427,06918,272
113,027
499,096(13,389)
485,707

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
Current liabilities — deferred tax liabilities
Long-term liabilities — deferred tax liabilities
Net deferred tax liabilities2008¥ 18,860
8,578(1,881)(482,787)¥(457,230)

2007¥ 17,924
7,435(3,162)(751,764)¥(729,567)

2008
188,243
85,621(18,778)(4,818,724)$(4,563,638)$(2) Reconciliations of differences between the statutory rate of income taxes and the effective rate of income taxes
for the years ended March 31, 2008 and 2007 are as follows:
Statutory rate of income taxes
Addition (reduction) in taxes resulting from:
Dividends income and others permanently not recognized as taxable income
Other
Effective rate of income taxes

88

Toyota Industries Report 2008

2008
39.9%

2007
39.9%

(5.4)
(0.9)
33.6%

(5.2)
3.6
38.3%

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 notreflected in the accompanying consolidated balance sheets under finance leases as of March 31, 2008 and 2007 are as follows:
Thousands of
U.S. dollars

Millions of yen

Buildings and structures:
Acquisition cost equivalents
Accumulated depreciation equivalents
Buildings and structures net balance equivalents
Machinery and equipment:
Acquisition cost equivalents
Accumulated depreciation equivalents
Machinery and equipment net balance equivalents
Tools, furniture and fixtures:
Acquisition cost equivalents
Accumulated depreciation equivalents
Tools, furniture and fixtures net balance equivalents
Software:Acquisition cost equivalents
Accumulated depreciation equivalents
Software net balance equivalents
Total net leased properties

2008

2007

¥

¥

276
125
150

2008
–
–
–

$

2,760
1,255
1,505

17,656
8,965
8,691

14,047
7,830
6,217

176,230
89,48086,75014,946
7,306
7,639

13,6676,396
7,271

149,182
72,92876,254132
49
82¥16,564

154
77
76¥13,564

1,320
497
823
$165,332

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, 2008 and 2007 is as follows:
Thousands of
U.S. dollars

Millions of yen

Due within one year
Due after one year
Total

2008
¥ 6,134
13,741¥19,8762007¥ 4,342
9,221¥13,564

2008$ 61,233
137,153$198,387

The amount equivalent to future minimum lease payments as of the end of the year includes the imputed interest expense portion because thepercentage which is computed by dividing future minimum lease payments by future minimum lease payment and total balance of property, plantand equipment at year-end is immaterial.
(c) Total lease payments and pro forma depreciation expenses for the years ended March 31, 2008 and 2007 are as follows:
Thousands of
U.S. dollars

Millions of yen

Lease payments
Pro forma depreciation expenses

2008¥5,997¥5,9972007¥5,212¥5,212

2008$59,857$59,857

Pro forma depreciation expenses, which are not reflected in the accompanying consolidated statements of income, are computed mainly by
the straight-line method, which assumes zero residual value and the leasing term to be useful lives for the years ended 2008 and 2007, and areequivalent to the amount of total lease payments of the above.

Toyota Industries Report 200889

Financial Section

Notes to Consolidated Financial Statements(2) 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, 2008 and2007 is as follows:
Thousands of
U.S. dollars

Millions of yen

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

2008

2007

2008

¥10,957
7,297¥ 3,660¥10,013
5,711¥ 4,301$109,364
72,833$ 36,531(b) Pro forma information regarding future minimum lease income as of March 31, 2008 and 2007 is as follows:
Thousands of
U.S. dollars

Millions of yen

2008

2007

2008

¥3,073
5,832¥8,906¥1,161
5,166¥6,328$30,677
58,219$88,896

Due within one year
Due after one year
Total

Future minimum lease income under finance leases include the imputed interest income portion because the percentage which is computed by
dividing the total of future minimum lease income and estimated residual value by the total of future minimum lease income and estimated residual
value and the balance of operating receivables balance at the year-ends is immaterial.
(c) Total lease payments to be received and depreciation expenses for the years ended March 31, 2008 and 2007 are as follows:
Thousands of
U.S. dollars

Millions of yen

2008

2007

2008

¥2,5432,239¥2,4502,391$25,388
22,349Total lease payments to be received
Depreciation expenses(3) Operating leases (as a lessee)
Pro forma future lease payments under operating leases as of March 31, 2008 and 2007 are as follows:
Millions of yen

Due within one year
Due after one year
Total

2008
¥ 9,143
43,762¥52,9062007¥ 5,068
18,307¥23,376

Thousands of
U.S. dollars

2008$ 91,263
436,797$528,061(4) Operating leases (as a lessor)
Pro forma information regarding future minimum rentals under operating leases as of March 31, 2008 and 2007 is as follows:
Millions of yen

Due within one year
Due after one year
Total

90

Toyota Industries Report 2008

2008
¥22,406
26,638¥49,0442007¥14,835
23,639¥38,475

Thousands of
U.S. dollars

2008$223,637
265,880$489,51718. Changes in net assets(1) Common stock outstanding for the years ended March 31, 2008 and 2007:
SharesBalance at March 31, 2006
Increase
Decrease
Balance at March 31, 2007
Increase
Decrease
Balance at March 31, 2008

325,840,640––
325,840,640––
325,840,640(2) Treasury stock outstanding for the years ended March 31, 2008 and 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, 2007
Increase due to purchase of treasury stock in accordance with the resolutions at
Board of Directors meeting
Increase due to acquisition from shareholders by share exchange
Increase due to purchase of odd stock
Decrease due to exercise of stock options
Decrease due to share exchange
Balance at March 31, 2008

6,520,194
8,000,000
16,471(771,500)
13,765,165
2,000,000
26,00014,280(871,975)(682,400)
14,251,070(3) Subscription rights to shares outstanding for the years ended March 31, 2008 and 2007:
Thousands of
U.S. dollars

Millions of yen

2008
¥695

The Company

2007
¥202

2008
$6,946(4) Dividends(a) Dividends paid
Total dividends

Dividends per share

Resolutions

Class of shares

Millions of yen

Thousands of
U.S. dollars

Yen

U.S. dollars

Record date

Effective dateOrdinary General Meeting of
Shareholders held on June 21, 2007

Common stock¥8,738$87,215

¥28

$0.28

March 31,2007

June 22,
2007

Board of Directors meeting held on
October 31, 2007

Common stock

8,751

87,34528

0.28

September 30,
2007

November 26,2007(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

Ordinary General Meetingof Shareholders held on
June 20, 2008

Class of shares

Millions of yen

Thousands of
U.S. dollars

Common stock¥9,970$99,520

Dividends per share
Source ofdividends

Retainedearnings

Yen

U.S. dollars

Record date

Effective date

¥32

$0.32

March 31,2008

June 23,
2008

19. Subsequent events
None

Toyota Industries Report 200891

Financial Section

Notes to Consolidated Financial Statements

20. Segment information(1) Business segments
As of and for the years ended March 31, 2008, 2007 and 2006:
Thousands of
U.S. dollars

Millions of yen

Sales:
Automobile
Outside customer sales
Intersegment transactions

2008

2007

2006

2008

¥ 969,226
26,026995,252¥ 904,893
21,134926,028¥ 746,795
20,768
767,564$ 9,673,884
259,771
9,933,655

783,173
3,415
786,589

767,237805
768,042595,236482
595,718

7,816,887
34,0887,850,975

117,591
7,942
125,533

89,4707,275
96,746

65,145
6,355
71,5001,173,684
79,271
1,252,955

66,264
7
66,271

58,403
5
58,40949,78922
49,811

661,38973
661,462

64,28021,386
85,666
2,059,313(58,777)¥2,000,536

58,392
21,85580,2481,929,475(51,077)¥1,878,398

48,98820,851
69,8391,554,436(48,480)¥1,505,955

641,583
213,455
855,038
20,554,084(586,657)$19,967,427¥ 953,734
746,747
121,303
61,97478,958(59,035)¥1,903,682¥ 892,435
720,840
94,96557,32773,920(51,046)¥1,788,443¥ 747,468
556,950
69,91349,882
66,107(48,407)¥1,441,915$ 9,519,262
7,453,315
1,210,733
618,571788,083(589,237)$19,000,727

¥

¥

¥

$

Materials Handling Equipment
Outside customer sales
Intersegment transactions
Logistics
Outside customer sales
Intersegment transactions
Textile Machinery
Outside customer sales
Intersegment transactions
Others
Outside customer sales
Intersegment transactions
Subtotal
Elimination of intersegment transactions
Total
Operating costs and expenses:
Automobile
Materials Handling Equipment
Logistics
Textile Machinery
OthersElimination of intersegment transactions
Total
Operating income (loss):
Automobile
Materials Handling Equipment
Logistics
Textile Machinery
OthersElimination of intersegment transactions
Total
Assets:Automobile
Materials Handling Equipment
Logistics
Textile Machinery
OthersCorporate assets or elimination
Total
Depreciation and amortization:
Automobile
Materials Handling Equipment
Logistics
Textile Machinery
OthersCorporate or elimination of intersegment transactions
Total
Capital expenditures:
Automobile
Materials Handling Equipment
Logistics
Textile Machinery
OthersCorporate or elimination of intersegment transactions
Total

92

Toyota Industries Report 2008¥

41,51839,841
4,230
4,297
6,708
258
96,853¥33,592
47,201
1,780
1,081
6,328
(30)
89,954¥20,09538,768
1,587
(70)
3,732
(73)
64,040$414,393
397,660
42,22242,891
66,954
2,580
966,700¥ 434,952
601,299
187,064
17,811
81,342
1,643,115¥2,965,585¥444,564
593,607
132,857
17,034
113,156
2,284,637¥3,585,857¥ 420,204
509,366
106,356
16,516103,083
2,089,813¥3,245,341$ 4,341,278
6,001,591
1,867,094
177,780
811,881
16,399,992$29,599,616¥

57,98746,609
9,012
1,310
4,985
−
¥ 119,905¥

53,557
41,947
4,178
1,087
5,288
–
¥ 106,060¥

48,37030,044
3,309
1,010
4,544
9
87,287$¥¥¥ 101,897
43,520
4,046
730
8,620
20
¥ 158,835$

50,14568,945
15,067
1,869
6,130
−
¥ 142,158

74,967
67,152
5,863
1,472
17,049–¥ 166,505¥

578,776465,21089,95413,081
49,763−$ 1,196,783
500,505
688,146
150,393
18,65961,187−$ 1,418,891

1. Business segments are divided by the type and nature of the product.
2. Main products of each segment are as follows:
Fiscal 2008
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, logistics planning, operation of distribution centers, collection and delivery of cash and management of sales proceeds,
secure storage, management, collection and delivery of corporate documents
Textile machinery ......................................Air-jet looms, water-jet looms, ring spinning frames
Others ......................................................Semiconductor package substrates

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, 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 ¥1,707,060 million (US$17,038,228 thousand) and ¥2,352,362 million as ofMarch 31, 2008 and 2007, respectively.

(2) Geographical segments
As of and for the years ended March 31, 2008, 2007 and 2006:
Thousands of
U.S. dollars

Millions of yen

Sales:
Japan
Outside customer sales
Intersegment transactions

2008

2007

2006

2008

¥1,343,041
132,206
1,475,248¥1,232,131
121,338
1,353,470¥1,009,368
112,543
1,121,912$13,404,946
1,319,557
14,724,503

265,571
2,185
267,756

287,316
2,712
290,029

246,129
2,056
248,186

2,650,677
21,814
2,672,490

327,7857,821
335,607

312,051
7,152
319,204

216,230
5,689
221,919

3,271,644
78,063
3,349,707

64,137
7,630
71,7682,150,380(149,843)¥2,000,536

46,897
5,573
52,471
2,015,175(136,776)¥1,878,398

34,227
3,998
38,226
1,630,243(124,288)¥1,505,955

640,161
76,159716,320
21,463,021(1,495,594)$19,967,427¥1,393,225
264,232
327,674
66,633(148,083)¥1,903,682¥1,284,500
284,095
307,91249,364(137,428)¥1,788,443¥1,069,137
241,467
217,370
36,743(122,804)¥1,441,915$13,905,834
2,637,316
3,270,527
665,076(1,478,026)$19,000,727

¥

¥

¥

$

North America
Outside customer sales
Intersegment transactions
EuropeOutside customer sales
Intersegment transactions
Others
Outside customer sales
Intersegment transactions
Subtotal
Elimination of intersegment transactions
Total
Operating costs and expenses:
Japan
North America
EuropeOthersElimination of intersegment transactions
Total
Operating income:Japan
North America
EuropeOthersElimination of intersegment transactions
Total
Assets:Japan
North America
EuropeOthersCorporate assets or elimination
Total

¥

82,022
3,524
7,933
5,134
(1,760)96,853¥ 906,548
165,525
356,570
71,882
1,465,058¥2,965,585¥

68,9705,934
11,292
3,106
651
89,954¥ 887,351
196,769
337,866
66,1482,097,722¥3,585,857¥

52,775
6,718
4,548
1,482
(1,484)64,040¥ 834,716
179,116
278,825
48,207
1,904,475¥3,245,341$

818,669
35,174
79,18051,244(17,568)
966,700$ 9,048,290
1,652,114
3,558,945
717,462
14,622,804$29,599,616

Toyota Industries Report 200893

Financial Section

Notes to Consolidated Financial Statements
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 2008
North America .........................................U.S.A., Canada
Europe ....................................................Sweden, Germany, France
Others .....................................................Australia, China, Brazil

Fiscal 2007
North America .........................................U.S.A., Canada
Europe ....................................................Sweden, Germany, France
Others .....................................................Australia, China, India

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 ¥1,707,060 million (US$17,038,228 thousand) and ¥2,352,362 million asof March 31, 2008 and 2007, respectively.

(3) Overseas sales
For the years ended March 31, 2008, 2007 and 2006:
Thousands of
U.S. dollars

Millions of yen

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

2008

2007

2006

2008

¥ 265,942
373,374
190,539¥ 829,855¥2,000,536¥ 287,957
347,617156,338¥ 791,913¥1,878,398¥ 247,957
249,237
123,751¥ 620,946¥1,505,955$ 2,654,380
3,726,665
1,901,777$ 8,282,822$19,967,427

13.3%
18.7
9.5
41.5%

15.3%
18.5
8.4
42.2%

16.5%
16.5
8.2
41.2%

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 2008
North America .........................................U.S.A., Canada
Europe ....................................................Germany, France, Russia
Others .....................................................China, Australia, Indonesia

Fiscal 2007
North America .........................................U.S.A., Canada
Europe ....................................................Germany, France, Italy
Others .....................................................China, Australia, Pakistan

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

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, 2008 and 2007 were as follows:
Millions of yen

Toyota Motor Corporation

2008¥710,9762007¥665,595

Thousands of
U.S. dollars

2008$7,096,281

Toyota Motor Corporation held 24.61% of the Company’s voting rights as of March 31, 2008. The above transactions were carried out oncommercial terms and conditions.

94

Toyota Industries Report 2008

(2) Purchase of goods and services for the years ended March 31, 2008 and 2007 were as follows:
Purchase of goods:
Thousands of
U.S. dollars

Millions of yen

2008¥521,644

Toyota Motor Corporation2008$5,206,552

2007¥484,336

Purchase of services:
Thousands of
U.S. dollars

Millions of yen

2008
Toyota Industries Health Insurance Society
Toyota Medical Corporation

–
¥671

2007
¥ 41
664

2008
–
$6,706

Toyota Industries Health Insurance Society’s chairman as of March 31, 2008 and 2007 is Yutaka Murodono, who is a director of the Company
and holds 0.00% of the Company’s shares. Toyota Medical Corporation’s chairman as of March 31, 2008 and 2007 is Yoshitoshi Toyoda, who
is a director of the Company and holds 0.08% and 0.07% of the Company’s shares, respectively. The above transactions were carried out oncommercial terms and conditions.

(3) Outstanding balances arising from sale/purchase of goods/services as of March 31, 2008 and 2007 are as follows:
Receivables from a related party:
Thousands of
U.S. dollars

Millions of yen

2008¥30,282

Toyota Motor Corporation

2008$302,255

2007¥33,859

Payable to a related party:
Thousands of
U.S. dollars

Millions of yen

2008¥49,571

Toyota Motor Corporation

2008$494,778

2007¥48,815

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

Millions of yen

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

2008

2007

2008

¥ 80,460–¥ 59,468–$803,083–

80,460312,467¥ 257.50

59,468313,191¥ 189.88

803,083
–
$
2.57

85
¥ 257.43362¥ 189.66

$

–
2.57

23. Equity per share
The basis of calculation for equity per share is as follows:
Thousands of
U.S. dollars

Millions of yen

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

2008

2007

2008

¥1,453,996¥1,810,483$14,512,396

695
56,345
1,396,955

202
58,878
1,751,401

6,946
562,390
13,943,059

311,589¥ 4,483.32

312,075¥ 5,612.11

$

44.75

Toyota Industries Report 200895

Financial Section

Reports of Independent Auditors

Report of Independent Auditors

To the Board of Directors of Toyota Industries Corporation

We have audited the accompanying consolidated balance sheets of Toyota Industries Corporation (“theCompany”) and its subsidiaries as of March 31, 2008, 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, 2008, 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, 2008, 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 14, 200896

Toyota Industries Report 2008

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, 2007

Toyota Industries Report 200897

Financial Section

Investor Information(As of March 31, 2008)

Corporate Head Office

Number of Shareholders

TOYOTA INDUSTRIES CORPORATION

21,5722-1, Toyoda-cho, Kariya-shi, Aichi-ken, 448-8671, Japan
Telephone: +81-(0)566-22-2511

Independent Accountants

Facsimile:

PricewaterhouseCoopers Aarata+81-(0)566-27-5650

Shin-Marunouchi Bldg., 32nd Floor

Date of Establishment

1-5-1, Marunouchi, Chiyoda-ku, Tokyo

November 18, 1926

100-6532, Japan

Common Stock

Transfer Agent

No par value

Mitsubishi UFJ Trust and Banking Corporation

Authorized: 1,100,000,000 shares

1-4-5, Marunouchi, Chiyoda-ku, Tokyo-to, 100-8212, Japan

Issued:Telephone: +81-(0)3-3212-1211

325,840,640 shares

Stock Exchange Listings
Tokyo, Osaka and Nagoya (Ticker Code: 6201)

Major Shareholders (Top 10) (As of March 31, 2008)

98

Distribution of Shares

Toyota Motor Corporation

76,600 (Thousands of shares)

DENSO Corporation

29,647

Third Avenue Fund-Custodial Trust Company

18,376

Towa Real Estate Co., Ltd.

15,697The Master Trust Bank of Japan, Ltd.

9,901

Toyota Tsusho Corporation

8,289

Nippon Life Insurance Company

6,735

Aisin Seiki Co., Ltd.

6,578

Japan Trustee Services Bank, Ltd.

5,398

Mitsui Sumitomo Insurance Company, Limited

5,345

Toyota Industries Report 2008

0.3%

12.3%

20.4%

As of
March 31,
2008

46.0%

21.0%

Individuals, etc.
Financial institutions
Foreign corporate entities and others
Other corporate entities
Brokerages

Common Stock Price and Trading Volume(Tokyo Stock Exchange)
Stock Price

(¥)

7,000

6,000
High
Low
5,000

4,000

3,000

2,000

1,000

0

Trading Volume(thousand shares)

30,00025,00020,00015,00010,0005,000

0FY 2004

FY 2005

FY 2006

FY 2007

FY 2008High¥2,530¥3,180¥4,850¥6,160¥5,830

Low

1,686

2,235

2,780

3,980

3,320

At Year-End

2,475

3,020

4,810

5,580

3,540

Toyota Industries Report 200899