Financial Section

Financial Section
Management’s Discussion and Analysis ofFinancial Condition and Results of Operations
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Changes in Net Assets
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Report of Independent Auditors
Investor Information

42-47
48-49
50
51
52
53-74
75
77

Toyota Industries Report 201041

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 are
based on information known to management as of June 2010.
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, 2010 is referred to as fiscal 2010 and other fiscal years are referred to ina corresponding manner. All references to the “Company” herein are to Toyota Industries Corporation andreferences to “Toyota Industries” herein are to the Company and its 159 consolidated subsidiaries.

Result of Operations

Operating Performance Highlights by Business
Segment

Operating Performance

Operating results by business segment are as follows. Net sales for

In fiscal 2010, the global economic recession persisted even thougheach segment do not include inter-segment transactions.

certain Asian countries, especially China, witnessed an economic
recovery and economies in the United States, Europe and other

Automobile Segmentcountries appear to have bottomed out owing to the effects ofIn fiscal 2010, the automobile industry saw a mild recovery in theeconomic stimulus measures. Despite signs of steady improvements

market due to the effects of economic stimulus measures in the form

such as increases in exports and decreases in private-sector capitalof tax cuts or incentives. Amid such operating conditions, net sales ofinvestment leveling off, the Japanese economy still remained in grave

the Automobile Segment totaled ¥778.3 billion, an increase of ¥22.4

condition overall due mainly to declining consumer prices and a highbillion (3%) from fiscal 2009. Operating income amounted to ¥23.6

unemployment rate.

billion, compared with an operating loss of ¥11.5 billion in fiscal 2009.

In such an operating environment, Toyota Industries undertook

Within this segment, net sales of the Vehicle Business amounted

efforts to strengthen its management platform by ensuring customer

to ¥398.7 billion, an increase of ¥20.6 billion (5%), due mainly to antrust through its dedication to quality as well as aggressively

increase in unit sales of the RAV4 that offset decreases in unit sales

implementing fixed cost reductions across the board.

of the Vitz (Yaris outside Japan) and Mark X ZiO.

In response to a rapidly deteriorating operating environment since

Net sales of the Engine Business totaled ¥165.0 billion, an

autumn 2008, the Toyota Industries Group worked to respond toincrease of ¥8.4 billion (5%), attributable primarily to an increase inharsh market conditions by systematically and quickly implementing

unit sales of AR gasoline engines.

emergency profit improvement activities. Consequently, Toyota

Net sales of the Car Air-Conditioning Compressor BusinessIndustries recorded operating income in fiscal 2010, comparedtotaled ¥177.0 billion, a decrease of ¥9.3 billion (5%), resulting fromwith posting an operating loss in fiscal 2009. In fiscal 2010, total

declines in production volume by automakers.

consolidated net sales of Toyota Industries amounted to ¥1,377.7
billion, a decrease of ¥206.5 billion (13%) from fiscal 2009 due toMaterials Handling Equipment Segment

lower sales in the materials handling equipment market.

In the materials handling equipment industry as a whole, the market

In terms of overall profit, due to concerted efforts during fiscal

remained in grave condition despite market growth in certain2010 to realize and maintain a streamlined structure mainly throughemerging countries. Although Toyota Industries aggressively engaged

reductions in personnel costs, expenses and capital investments,

in global sales promotion activities for lift trucks, a mainstay productsuch measures could offset lower sales in Japan and overseas. Asof this segment, unit sales decreased. A decline in unit sales of aeriala result, Toyota Industries posted consolidated operating income ofwork platforms was also a key factor. As a result, net sales of the¥22.0 billion compared with an operating loss of ¥6.6 billion in the

Materials Handling Equipment Segment totaled ¥431.6 billion, aprevious fiscal year. Ordinary income amounted to ¥31.7 billion, an

decrease of ¥208.0 billion (33%), while operating loss was ¥9.5 billion

increase of ¥17.4 billion (121%), while net loss totaled ¥26.2 billion,

compared with operating income of ¥3.7 billion in fiscal 2009.

compared with a net loss of ¥32.7 billion in the previous fiscal year,

42

due primarily to posting a loss arising from business restructuring of

Logistics Segment

the Materials Handling Equipment Segment as an extraordinary loss.

In the logistics industry as a whole, the overall operating environment

Toyota Industries Report 2010

Financial Section

remained severe as the volume of cargo transport continued toOperating Income (Loss)decline in the Japanese market. Net sales of the Logistics Segment

Operating income for fiscal 2010 was ¥22.0 billion, compared with anamounted to ¥108.5 billion, a decrease of ¥6.3 billion (5%), despite

operating loss of ¥6.6 billion in fiscal 2009, due to concerted efforts

the strong performance by businesses engaged in collection andduring fiscal 2010 to realize and maintain a streamlined structuredelivery of cash and management of sales proceeds. This was offset

mainly through reductions in personnel costs and expenses.

by a decline in sales of the cargo transport business of automotiverelated parts. Operating income amounted to ¥5.2 billion, an increase

Ordinary Incomeof ¥2.3 billion (82%) from fiscal 2009.

Ordinary income amounted to ¥31.7 billion, an increase of ¥17.4
billion (121%) from fiscal 2009. This was due to operating income of

Textile Machinery Segment¥22.0 billion, while an operating loss of ¥6.6 billion in fiscal 2009 andIn the textile machinery industry as a whole, the market remained

equity in net earnings of unconsolidated subsidiaries and affiliatedsevere even though the primary market of China experienced a mildcompanies amounting to ¥0.7 billion, compared with equity in net

recovery. Net sales of the Textile Machinery Segment totaled ¥20.8

losses of unconsolidated subsidiaries and affiliated companies ofbillion, a decrease of ¥8.7 billion (29%), owing mainly to a significant¥3.1 billion in fiscal 2009.

decrease in unit sales of air-jet looms to China, while operating loss
was ¥1.8 billion compared with an operating loss of ¥2.0 billion inThis was offset by a ¥22.5 billion (60%) decrease in dividends
income from fiscal 2009 to ¥15.2 billion.

fiscal 2009.

Loss before Income Taxes and Minority Interests
Others Segment

Loss before income taxes and minority interests amounted to ¥11.3

Net sales of the Others Segment totaled ¥38.3 billion, a decrease ofbillion, compared with loss before income taxes and minority interests¥5.9 billion (13%) from fiscal 2009, while operating income was ¥3.9

of ¥23.2 billion in fiscal 2009, as a result of a ¥17.4 billion (121%)

billion compared with an operating loss of ¥46 million in fiscal 2009.

increase in ordinary income to ¥31.7 billion. Extraordinary losses
increased ¥5.5 billion from fiscal 2009 to ¥43.0 billion as a result ofSales by Geographical Segment

business restructuring of the Materials Handling Equipment Segment.

Below are Toyota Industries’ operating results by geographicalsegment. Net sales for each geographical segment do not include

Net Lossinter-segment transactions.

Net loss totaled ¥26.2 billion compared with a net loss of ¥32.7 billion
in fiscal 2009. Net loss per share was ¥84.33 compared with net lossJapan

per share of ¥105.16 in fiscal 2009.

Net sales decreased ¥71.4 billion (7%) from fiscal 2009 to ¥995.2
billion, while operating income was ¥29.9 billion compared with anoperating loss of ¥1.6 billion in fiscal 2009. This was attributableprimarily to decreases in personnel costs and expenses, despite
decreases in unit sales of lift trucks.

Consolidated Financial Condition
Total assets increased ¥261.8 billion from the end of the previous
fiscal year to ¥2,589.2 billion due mainly to an increase in market

North America

value of investment securities. Net assets amounted to ¥1,104.9

Net sales decreased ¥56.8 billion (29%) from fiscal 2009 to ¥137.0

billion, an increase of ¥127.3 billion from the end of the previous fiscalbillion, while operating loss was ¥1.4 billion compared with anyear.

operating loss of ¥4.7 billion in fiscal 2009, due mainly to decreases
in unit sales of car air-conditioning compressors and lift trucks.

EuropeLiquidity and Capital Resources

Net sales decreased ¥71.6 billion (26%) from fiscal 2009 to ¥200.5

Toyota Industries’ financial policy is to ensure sufficient financing

billion, while operating loss was ¥7.1 billion compared with anand liquidity for its business activities and to maintain strong balance

operating loss of ¥3.9 billion in fiscal 2009. This was attributablesheets. Currently, funds for capital investments and other long-term

primarily to a decrease in unit sales of lift trucks.

capital needs are provided from retained earnings and long-term
debt, and working capital needs are met through short-term loans.

OthersLong-term debt financing is carried out mainly through issuance ofNet sales totaled ¥44.9 billion, a decrease of ¥6.7 billion (13%) from

corporate bonds and loans from financial institutions.

fiscal 2009, while operating income increased ¥0.5 billion (23%) to¥2.5 billion.

Toyota Industries continues to maintain its solid financial
condition. Through the use of such current assets as cash andToyota Industries Report 201043

Financial Section

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

cash equivalents and securities, as well as free cash flows andInvestment in property, plant and equipment in the Logistics

funds procured from financial institutions, Toyota Industries believes

Segment totaled ¥6.3 billion, including ¥4.2 billion for Asahi Security

that it will be able to provide sufficient funds for the working capitalCo., Ltd. and ¥1.8 billion for Wanbishi Archives Co., Ltd.

necessary to expand existing businesses and develop new projects,
as well as for future investments.
Regarding fund management, the Company undertakes

The Textile Machinery Segment made an investment in property,
plant and equipment in the total amount of ¥45 million, including ¥27
million for the Company.

integrated fund management of its subsidiaries in Japan, while Toyota

The Others Segment made an investment in property, plant andIndustries North America, Inc. (TINA) and Toyota Industries Financeequipment in the total amount of ¥3.1 billion, including ¥2.5 billion forInternational AB (TIFI) centrally manage the funds of subsidiaries in

the Company.

North America and Europe, respectively.
Through close cooperation among the Company, TINA andNecessary funds were provided by a portion of bonds as well as
cash on hand and bank loans.

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

Strategies and Outlook
Cash Flows

Outlook for Results for Fiscal 2011

Cash flows from operating activities resulted in an increase in cash

recovery path in fiscal 2011, uncertainties remain with regard toof ¥203.4 billion in fiscal 2010, due mainly to depreciation andpersistent concerns over deteriorating financial and employment

amortization of ¥110.1 billion and loss before income taxes andsituations, the impact of the discontinuation of car replacement

minority interests of ¥11.3 billion. Net cash provided by operating

incentive measures and rising prices of raw materials such as ironactivities increased by ¥137.7 billion from ¥65.7 billion in fiscal 2009.

and crude oil. As a result, the business operating environment isCash flows from investing activities resulted in a decrease in
cash of ¥36.8 billion in fiscal 2010, attributable primarily to payments

Although we expect the global economy to continue on a gradualexpected to remain difficult.
Amid this challenging environment, Toyota Industries will continue

for purchases of property, plant and equipment amounting to ¥48.3

to undertake concerted efforts on a global basis to quickly andbillion. Net cash used in investing activities decreased by ¥77.4 billion

thoroughly rebuild our business structure into a more muscular andfrom ¥114.2 billion for fiscal 2009.

stronger one. For medium- to long-term growth, we will pursue

Cash flows from financing activities resulted in a decrease in cashof ¥38.2 billion in fiscal 2010, due mainly to repayments of short-termloans payable of ¥37.6 billion.

greater efficiency and further improvement of our business structure.
Specifically, our initiatives to reduce fixed costs will remain inplace to maintain a streamlined business structure. At the same

After translation adjustments, cash and cash equivalents as oftime, we will work to enhance our competitiveness by strengthening

March 31, 2010 stood at ¥317.5 billion, an increase of ¥129.5 billion

cost planning activities for each product category. We will pursue(69%) from fiscal 2009.

every opportunity geared toward sales expansion along with closely
monitoring market needs.
In the medium to long term, our foremost focus remains on

Investment in Property, Plant and Equipment

quality. Addressing environmental and safety concerns as well as

During fiscal 2010, Toyota Industries made a total investment of

Keeping these in mind, we will strive to develop products and¥47.5 billion in property, plant and equipment (including vehicles

cutting-edge technologies that are closely aligned with customer

and materials handling equipment for lease) in order to launchperspectives.

new products, streamline and upgrade production equipment andaugment R&D facilities.

Specific initiatives include refining element technologies that willcontribute to electrification, lighter weights and energy savings based

In the Automobile Segment, investment in property, plant andon 3Es (energy, environmental protection and ecological thinking).

equipment totaled ¥12.0 billion. A primary breakdown of this amount

By employing these element technologies in new automobile andincluded ¥7.3 billion for the Company and ¥2.2 billion for Toyota

materials handling equipment products, our mainstay businesses, weIndustry Automotive Parts (Kunshan) Co., Ltd.

aim for further business expansion.

The Materials Handling Equipment Segment made an investment

Concurrently, in emerging countries where economies are expectedin property, plant and equipment in the total amount of ¥26.0 billion.

to grow, we will strive to quickly establish more customer-oriented supply

The primary breakdown comprised ¥0.6 billion for the Company,

chain management via product planning and product development to¥15.5 billion for the Toyota Material Handling Europe Group and ¥6.3

meet the needs in respective local markets.

billion for the Toyota Material Handling Australia Group.

44

enhancing our competitive strength will also be equally imperative.

Toyota Industries Report 2010

To support such consolidated management on a global scale,to Toyota Motor Corporation (TMC). In fiscal 2010, net sales to TMC

learn, think and act and who will enhance the power of the workplace.

accounted for 43.6% of consolidated net sales. Therefore, TMC’s

In addition to placing top priority on safety, we will thoroughly

vehicle sales could have an impact on Toyota Industries’ businessenforce compliance, including observance of laws and regulations,

results. As of March 31, 2010, TMC holds 24.61% of the Company’s

and actively participate in social contribution activities. Through thesevoting rights.

Financial Section

Toyota Industries will strive to nurture people who take the initiative toand further measures, Toyota Industries aims to meet the trust ofsociety, raise corporate value and grow in harmony with society.

Product Development Capabilities
Based on the concept of “developing appealing new products,”
Toyota Industries proactively develops new products by utilizing its

Dividend Policy

leading-edge technologies, as it strives to anticipate increasingly

Toyota Industries regards the benefits of shareholders as one of its

satisfaction of its customers.

most important management policies. Based on this stance, we

sophisticated and diversifying needs of the market and ensure the
R&D activities are focused mainly on developing and upgrading

will strive to strengthen Toyota Industries’ corporate constitution,

products in current business fields and peripheral sectors. Toyota

promote proactive business development and raise Toyota Industries’

Industries expects that revenues derived from these fields will

corporate value.

continue to account for a significant portion of total revenues andToyota Industries’ dividend policy is to meet the expectations ofanticipates that future growth will be contingent on the development

shareholders for continuous dividends while giving full considerationand sales of new products in these fields. Toyota Industries believes

to business performance, funding requirements, the dividend payoutthat it can continue to develop appealing new products. However,ratio and other factors. Toyota Industries’ Ordinary General Meeting

Toyota Industries may not be able to forecast market needs andof Shareholders, held on June 23, 2010, approved a year-end cash

develop and introduce appealing new products in a timely manner.

dividend of ¥20.0 per share. Including the interim cash dividend ofThis could result in lower future growth and have an adverse impact¥10.0 per share, cash dividends for the year totaled ¥30.0 per share,on Toyota Industries’ financial condition and business results.

a decrease of ¥10.0 per share from fiscal 2009.

Such a situation could result from risks that include no assurance

Toyota Industries will use retained earnings to improve the

Toyota Industries can allocate sufficient future funds necessary for thecompetitiveness of its products, augment production capacity indevelopment of appealing new products; no assurance that productJapan and overseas, as well as to expand into new fields of businesssales will be successful, as forecasts of products supported by theand strengthen its corporate constitution in securing future profits formarket may not always be accurate; and no assurance that newly

its shareholders. Toyota Industries will also use retained earnings todeveloped products and technologies will always be protected as

repurchase treasury stock.

intellectual property.

The Company’s Articles of Incorporation stipulate that it may pay
interim cash dividends as prescribed in Article 454-5 of the Corporate

Intellectual Property Rights

Law, and it is the Company’s basic policy to pay dividends fromIn undertaking its business activities, Toyota Industries has acquired

retained earnings twice a year (interim and annual).

numerous intellectual property rights, including those acquired

The Company’s Articles of Incorporation also stipulate that what

overseas, such as patents related to its products, product designs

is prescribed in Article 459-1 of the Corporate Law can be added toand manufacturing methods. However, not all patents submitted will

the Articles of Incorporation. As the Company’s policy, discretion tonecessarily be registered as rights, and these patents could thus bepay interim cash dividends is determined by the Board of Directors

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

while payment of year-end cash dividends is subject to approval ata third party could circumvent a patent of Toyota Industries andthe Ordinary General Meeting of Shareholders.

introduce a competing product into the market. Moreover, Toyota
Industries’ products utilize a wide range of technologies. Therefore,
Toyota Industries could become a party subject to litigation involving

Risk Information

the intellectual property rights of a third party.

The following represent risks that could have a material impact on

Product Defects

Toyota Industries’ financial condition, business results and share

Guided by the basic philosophy of “offering products and services

prices. Toyota Industries judged the following as future risks as ofthat are clean, safe and of high quality,” Toyota Industries makes its

March 31, 2010.

utmost efforts to enhance quality. However, Toyota Industries cannot
guarantee all its products will be defect-free and that product recalls

Principal Customers

will not be made in the future. Product defects that could lead to

Toyota Industries’ automobile and engine products are sold primarily

large-scale recalls and product liability indemnities could result in

Toyota Industries Report 201045

Financial Section

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

large cost burdens and have a significant negative impact on the

Exchange Rate Fluctuations

evaluation of Toyota Industries. It could also have an adverse effectToyota Industries’ businesses encompass the production and sales

on Toyota Industries’ financial condition and business results due to aof products and the provision of services worldwide. Generally, thedecrease in sales, deterioration of profitability and decrease in sharestrengthening of the yen against other currencies (especially against

prices of Toyota Industries.

the U.S. dollar and the euro, which account for a significant portion of
Toyota Industries’ sales) has an adverse impact on Toyota Industries’

Price Competitionbusiness, while a weakening of the yen has a favorable impact. An

Toyota Industries faces extremely harsh competition in each of theincrease in the value of currencies in countries or regions whereindustries in which it conducts business, including its Automobile

Toyota Industries carries out production could lead to an increase in

and Materials Handling Equipment businesses, which are the core

local production, procurement and distribution costs. Such an increaseof Toyota Industries’ earnings foundation. Toyota Industries believes

in costs could reduce Toyota Industries’ price competitiveness.

it offers high value-added products that are unrivalled in terms of

Additionally, because export sales of several businesses aretechnology, quality and cost. Amid an environment characterized

denominated mainly in yen, exchange rate fluctuations could have an

by intensifying price competition, however, Toyota Industries may

adverse impact on Toyota Industries’ financial condition and businessbe unable to maintain or increase market share against low-cost

results due to a change in market prices.

competitors or to maintain profitability. This could have an adverse
impact on Toyota Industries’ financial condition and business results.

Share Price Fluctuations
Toyota Industries holds marketable securities, and therefore bears

Reliance on Suppliers of Raw Materials andComponents

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

Toyota Industries’ products rely on various raw materials andToyota Industries had unrealized gains. However, unrealized gains oncomponents from suppliers outside Toyota Industries. Toyota

marketable securities could worsen depending on future share priceIndustries has concluded basic business contracts with these

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

external suppliers and assumes it can carry out stable transactionsof pension assets, leading to an increase in the pension shortfall.

value of these shares at the end of the fiscal year under review,for raw materials and components. However, Toyota Industries
components, which arise from a global shortage due to tight supply

Effects of Disasters, Power Blackouts and Other
Incidents

or an unforeseen accident involving a supplier. Such shortages could

Toyota Industries carries out regular checks and inspections of its

have a negative effect on Toyota Industries’ product production andproduction facilities to minimize the effect of production breakdown.

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

However, there is no assurance Toyota Industries can completely

Toyota Industries’ financial condition and business results.

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

has no assurances against future shortages of raw materials andincluding malfunctions of production facilities, fires at production

Environmental Regulations

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

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

Industries’ domestic production facilities and most of its businessstrives to reduce any burden on the environment resulting frompartners are situated in the Chubu region. Therefore, a major

its production processes, as well as strictly adheres to applicableearthquake such as the Tokai Earthquake, or an incident that affects

environmental laws and regulations. However, various environmental

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

regulations could also be revised and strengthened in the future.

Such prolonged delays and stoppages could have an adverse impact

Accordingly, any expenses necessary for continuous strict adherenceon Toyota Industries’ financial condition and business results.

to these environmental regulations could result in increased businesscosts and have an adverse impact on Toyota Industries’ financial
condition and business results.

Latent Risks Associated with International
Activities
Toyota Industries manufactures and sells products and provides

Alliances with Other Companies

services in various countries. Such unforeseen factors as social chaos,Aiming to expand its businesses, Toyota Industries engages in joint

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

activities with other companies through alliances and joint ventures.

in economic conditions, could have an adverse impact on Toyota

However, a wildly fluctuating market trend or a disagreement between

Industries’ financial condition and business results.

Toyota Industries and its partners, owing to business, financial orother reasons, could prevent Toyota Industries from deriving theRetirement Benefit Liabilities

intended benefits of its alliances.

Toyota Industries’ employee retirement benefit expenses and liabilities
are calculated based on expected rates of return on pension assets

46

Toyota Industries Report 2010

incorporate discount rates and other factors. Therefore, differences
between actual results and assumptions as well as changes in the

Financial Section

as well as assumptions upon making actuarial calculations that

Toyota Industries’ Relationship to Toyota
Motor Corporation

assumptions could have a significant impact on recognized expenses

Due to historical reasons, Toyota Industries maintains closeand calculated liabilities in future accounting periods.

relationships with Toyota Motor Corporation (TMC) and Toyota Group
companies in terms of capital and business dealings.

Significant Accounting Policies andEstimates

Historical BackgroundToyota Industries’ financial statements are prepared in conformity

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

with accounting principles and practices generally accepted in

Department within the Company based on his resolve to manufacture

Japan. In preparing financial statements, management must makeJapanese-made automobiles. In 1937, the Automobile Department

estimates, judgments and assumptions that affect reported amounts

was spun off and became an independent company, Toyota Motorof assets and liabilities at fiscal year-end as well as revenues andCo., Ltd. (the present Toyota Motor Corporation).

In 1933, Kiichiro Toyoda, the eldest son of founder Sakichi
Toyoda and then Managing Director of Toyota Industries (thenexpenses during each fiscal year. Among Toyota Industries’ significant
accounting policies, the following categories require a considerable

Capital Relationshipdegree of judgment and estimation and are highly complex.

In light of this historical background, Toyota Industries and TMC havemaintained a close capital relationship. As of March 31, 2010, Toyota

Allowance for Doubtful Accounts

Industries holds 6.42% (201,195 thousand shares) of TMC’s total

To prepare for the risk of receivables becoming uncollectible, Toyota

shares issued. Likewise, as of the same date, TMC holds 24.61%

Industries estimates its allowance for doubtful accounts by utilizingof Toyota Industries’ total voting rights. Toyota Industries is a TMC

the percentage of historical experiences in credit losses for ordinary

affiliate accounted for by the equity method.

receivables and individually examining the feasibility of collection forreceivables that seem to be uncollectible. Evaluating the allowance for

Business Relationshipdoubtful accounts involves judgments made in accordance with the

Toyota Industries assembles certain cars and produces automobile

nature of the situation, and this allowance represents an essential andengines under consignment from TMC. Additionally, we sell a portion

crucial estimate—including future estimates of cash flow amountsof our other components and products directly or indirectly to otherand timing—that could change significantly. Based on currently

Toyota Group companies. In fiscal 2010, our net sales to TMC

available information, Toyota Industries’ management believes its

accounted for 43.6% of our consolidated net sales.

present allowance for doubtful accounts is sufficient. However, theneed to significantly increase allowance for doubtful accounts in theContributions to the Toyota Groupfuture could have an adverse impact on Toyota Industries’ businessAs a member of the Toyota Group, Toyota Industries aims toresults.

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 differencein amounts between these assumptions and actual results is
calculated cumulatively and amortized over future accounting
periods, and thus becomes an expense and is recognized as aliability in future accounting periods. Toyota Industries believes its
assumptions are reasonable. However, differences between actual
results or changes in the assumptions could have an impact onretirement benefits and retirement benefit expenses and liabilities
after employee retirement.

Toyota Industries Report 201047

Financial Section

Consolidated Balance Sheets
Toyota Industries Corporation
As of March 31, 2010 and 2009
Millions of yen

ASSETS
Current assets:
Cash and deposits

2010

2009

¥ 287,965 ¥ 169,743

Trade notes and accounts receivable (Note 8)

163,708

158,798

Short-term investments

71,391

58,838Merchandise and finished goods (Notes 4 and 8)

37,35844,237Work in process (Notes 4 and 8)

25,67230,500Raw materials and supplies (Notes 4 and 8)

25,31827,423

Deferred tax assets (Note 20)

17,182

16,600

Other current assets

47,30764,632

Allowance for doubtful accounts(3,103)(2,806)

672,801

567,967

Total current assets
Fixed assets:
Property, plant and equipment:
Buildings and structures (Notes 5 and 8)

169,991

182,214

Machinery, equipment and vehicles (Notes 5 and 8)

212,079

252,402

Tools, furniture and fixtures (Note 5)

21,84025,598Land (Note 8)

119,517

110,078

8,547

18,970531,977

589,264

Goodwill

72,745

107,072

Software

9,976

11,736

Total intangible assets

82,722

118,809

1,162,685

907,524

Long-term loans receivable

5,554

5,954

Deferred tax assets (Note 20)

10,429

11,578Other investments and other assets

123,278

126,534

(202)

(199)

1,301,744

1,051,391

1,916,444

1,759,464

Construction in progress
Total property, plant and equipment
Intangible assets:

Investments and other assets:
Investments in securities (Note 8)

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

48

Toyota Industries Report 2010

¥2,589,246 ¥2,327,432

Financial Section

Millions of yen

LIABILITIES AND NET ASSETS
Current liabilities:
Trade notes and accounts payable
Short-term loans payable (Note 8)
Commercial paper
Current portion of bonds
Accounts payable—otherAccrued income taxes
Deferred tax liabilities (Note 20)
Allowance for bonuses to directors and corporate auditors
Other current liabilities (Note 8)
Total current liabilities
Long-term liabilities:
Bonds (Note 6)Long-term loans payable (Notes 6 and 8)
Lease obligations (Notes 2, 3 and 6)
Deferred tax liabilities (Note 20)
Allowance for retirement benefits (Note 9)
Other long-term obligations
Total long-term liabilities
Total liabilities
Shareholders’ equity (Note 12):
Capital stock
Authorized — 1,100,000,000 shares
Issued— 325,840,640 shares as of March 31, 2010
		
325,840,640 shares as of March 31, 2009
Capital surplus
Retained earnings
Treasury stock
14,263,943 shares as of March 31, 2010
14,263,027 shares as of March 31, 2009

2010

2009

¥ 141,787 ¥ 104,658
46,241
63,187
9,575
26,35650,44632,072
13,14925,34915,014
7,570
316
249
310
214
158,100
154,720434,941

414,379

231,401
299,208
108,014351,00945,234
14,507

231,501
285,340
104,245
252,20944,05518,0291,049,375
1,484,316

935,382
1,349,762

80,46280,462

106,179
378,648(50,689)

106,180
412,294(50,672)

Total shareholders’ equity
514,601
548,264
Valuation and translation adjustments:
Valuation difference on available-for-sale securities
544,068
392,489
Deferred gains or losses on hedges(9)24Foreign currency translation adjustment(2,430)(10,048)
		Total valuation and translation adjustments
541,628
382,466
Subscription rights to shares
1,720
1,224
Minority interests
46,97845,715
Total net assets
1,104,929
977,670
Total liabilities and net assets¥2,589,246 ¥2,327,432

Toyota Industries Report 201049

Financial Section

Consolidated Statements of Income

Toyota Industries Corporation
For the years ended March 31, 2010 and 2009
Millions of yen

2010

2009

Net sales¥1,377,769 ¥1,584,252

Cost of sales (Note 13)

1,194,399

1,389,002

Gross profit

183,370

195,249

Sales commissions

6,814

10,287

Salaries and allowances

64,71675,426Retirement benefit expenses

1,953

2,012

Depreciation

8,151

8,734

Research and development expenses

19,482

23,610Other60,24881,80022,002(6,621)

Interest income

10,804

12,677

Dividends income

Selling, general and administrative expenses (Notes 13 and 18):

Operating income (loss)
Non-operating income:

15,29737,781Gain on sales of marketable securities

135

498

Equity in net earnings of unconsolidated subsidiaries and affiliated companies

744

–

7,413

8,356

Interest expenses(17,847)(19,770)

Loss on disposal of fixed assets(1,257)(4,131)–(3,130)

Other non-operating income
Non-operating expenses:

Equity in net losses of unconsolidated subsidiaries and affiliated companies
Other non-operating expenses
Ordinary income(5,535)(11,314)31,756

14,343(43,099)––(26,526)

Extraordinary losses (Note 14):
Losses on business restructuring of the Materials Handling Equipment Segment
Losses on impairment of property, plant and equipment due to a decrease in production volume
Losses of discontinuing production of designated electronic parts
Loss before income taxes and minority interests–(11,064)(11,343)(23,247)

Income taxes — current (Note 20)

13,3208,248

Income taxes — deferred (Note 20)

(438)

8,240

Income (loss) on minority interests in consolidated subsidiaries

2,048(6,968)(26,273) ¥(32,767)

Net loss¥Yen

Net loss per share — basic (Note 26)
Net loss per share — diluted (Note 26)
Net assets per share (Note 27)
Cash dividends per share
The accompanying notes are an integral part of these financial statements.

50

Toyota Industries Report 2010¥(84.33) ¥ (105.16)––

3,390.02

2,987.16

30.00

40.00

Financial Section

Consolidated Statements of Changes in Net Assets

Toyota Industries Corporation
For the years ended March 31, 2010 and 2009
Millions of yen

2010

Millions of yen

2010

2009

Shareholders’ equity		Capital stock

24

140

Net changes of items other than shareholders’ equity

(33)

(115)

Total changes of items during the period

(33)

(115)

Balance at the end of current period

(9)

24

Balance at the end of previous period

Balance at the end of previous period¥ 80,462¥  80,462

Balance at the end of current period

80,46280,462

Capital surplus
Balance at the end of previous period

106,180

106,184

Changes of items during the period

Foreign currency translation adjustment		

Changes of items during the period
Disposal of treasury stock

(0)

(4)

Balance at the end of previous period

Total changes of items during the period

(0)

(4)

Changes of items during the period

106,179

106,180

Balance at the end of current period
Retained earnings
Balance at the end of previous period
Effect of changes in accounting policies applied to412,294

466,780–(2,400)(10,048)

41,477

Net changes of items other than shareholders’ equity

7,618(51,525)

Total changes of items during the period

7,618(51,525)(2,430)(10,048)

382,466

794,171

Net changes of items other than shareholders’ equity

159,162(411,705)

Total changes of items during the period

159,162(411,705)

541,628

382,466

1,224

695

Net changes of items other than shareholders’ equity

496

528

Total changes of items during the period

496

528

1,720

1,224

45,71556,345

Net changes of items other than shareholders’ equity

1,263(10,630)

Total changes of items during the period

1,263(10,630)

46,97845,715

977,670–

1,453,996(2,400)

Balance at the end of current period
Total valuation and translation adjustments

  foreign subsidiaries

Balance at the end of previous period

Changes of items during the period

Changes of items during the period

Dividends from surplus(6,231)(19,318)

Decrease due to increase in consolidated subsidiaries(1,138)–Decrease due to decrease in consolidated subsidiaries(1)–(26,273)(32,767)

Net loss
Total changes of items during the period
Balance at the end of current period

Balance at the end of current period
Subscription rights to shares(33,646)(52,086)

Balance at the end of previous period

378,648412,294

Changes of items during the period(50,672)(50,644)

Treasury stock
Balance at the end of previous period
Changes of items during the period

Balance at the end of current period

Repurchase of treasury stock

(18)

(41)

Disposal of treasury stock

1

12

Balance at the end of previous period

(16)

(28)

Changes of items during the period(50,689)(50,672)

Total changes of items during the period
Balance at the end of current period
Total shareholders’ equity
Balance at the end of previous period
Effect of changes in accounting policies

2009

Deferred gains or losses on hedges		548,264

602,783–(2,400)Minority interests

Balance at the end of current period
Total net assets

   applied to foreign subsidiaries

Balance at the end of previous period

Changes of items during the period

Effect of changes in accounting policies applied to

Dividends from surplus(6,231)(19,318)

Decrease due to increase in consolidated subsidiaries(1,138)–Decrease due to decrease in consolidated subsidiaries(1)–

Dividends from surplus(6,231)(19,318)(26,273)(32,767)

Decrease due to increase in consolidated subsidiaries(1,138)–

Repurchase of treasury stock

(18)

(41)

Decrease due to decrease in consolidated subsidiaries(1)–

Disposal of treasury stock0

8(26,273)(32,767)(41)

Net loss

Total changes of items during the period
Balance at the end of current period

Changes of items during the period

Net loss(33,663)(52,118)

Repurchase of treasury stock(18)

514,601

548,264

Disposal of treasury stock08

160,922(421,807)

127,259(473,926)

Valuation and translation adjustments

Net changes of items other than shareholders’ equity

Valuation difference on available-for-sale securities

Total changes of items during the period
392,489752,553

Net changes of items other than shareholders’ equity

151,578(360,063)

Total changes of items during the period

151,578(360,063)

544,068

392,489

Balance at the end of previous period   foreign subsidiaries

Balance at the end of current period¥1,104,929 ¥   977,670

Changes of items during the period

Balance at the end of current period

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

Toyota Industries Report 201051

Financial Section

Consolidated Statements of Cash Flows

Toyota Industries Corporation
For the years ended March 31, 2010 and 2009
Millions of yen

Cash flows from operating activities:
Loss before income taxes and minority interests
Depreciation and amortization
Impairment loss
Increase (decrease) in allowance for doubtful accounts
Interest and dividends income
Interest expenses
Equity in net (earnings) losses of unconsolidated subsidiaries and affiliated companies(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) received
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 in change 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 payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Proceeds from issuances of bonds
Repayments of bonds
Payments for repurchase of treasury stocks
Cash dividends paid
Cash dividends paid to minority shareholders
Proceeds from payment by 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.

52

Toyota Industries Report 2010

2010

2009

¥ (11,343)
110,119
36,902
84(26,101)
17,847(744)(777)
17,334
36,164
7,372
186,859
26,145(17,976)
8,424
203,452¥ (23,247)
125,543
35,8681,207(50,458)
19,7703,13061,8703,939(93,949)(8,141)75,53450,435(19,622)(40,577)
65,768(48,312)15,729(3,927)
197
(781)
(293)
2,003
(1,470)(36,855)(122,422)
10,991(4,982)
12,367(11)(4,465)
5,126(10,820)(114,217)(37,614)
27,820(1,915)50,000(33,286)(18)(6,231)(625)–(36,359)(38,230)
1,211
129,578
188,011¥317,590

6,947
126,178(10,420)
39,399(20,000)(41)(19,318)(1,310)575(1,038)120,971(5,795)66,727
121,284¥188,011

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.

2. Summary of significant accounting policies:(1) Consolidation

The consolidated financial statements include the accounts of theCompany and its 159 subsidiaries (40 domestic subsidiaries and 119
overseas subsidiaries, which are listed on pages 38 and 39) as ofMarch 31, 2010, and 160 subsidiaries (43 domestic subsidiaries and117 overseas subsidiaries) as of March 31, 2009.
For the year ended March 31, 2010, two subsidiaries were newly
added to the scope of consolidation and three companies were
excluded from the scope of consolidation because of liquidation andmergers as a result of reorganization.
For the year ended March 31, 2009, four subsidiaries were newly
added to the scope of consolidation and seven companies were
excluded from the scope of consolidation because of mergers andacquisitions as a result of reorganization.
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
that materially affect the financial position or results of operations.
All significant inter-company 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 ofcontrol.
In June 2009, Toyota Industries Sweden AB changed thecompany name to Toyota Material Handling Europe AB.

(2) Equity method

Investments in 13 major affiliates in 2010 and 2009 are accounted forby the equity method of accounting.
For the year ended March 31, 2010, there were no changes in thescope of equity-method accounting.
For the year ended March 31, 2009, two companies were excluded
from the scope of equity-method accounting because of transfer to thescope of consolidation.
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 major affiliates accounted for by the equity method are listed on
page 39.

(3) Translation of foreign currencies

Foreign currency denominated receivables and payables aretranslated into Japanese yen at the year-end exchange rates and theresulting 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 arereadily convertible to known amounts of cash and are so near
maturity that they present insignificant risk of changes in value
because of changes in interest rates.

(5) Short-term investments and investment in securities

Toyota Industries classifies securities into four categories by purposeof holding: trading securities, held-to-maturity securities, othersecurities and investments in affiliates. Toyota Industries did not havetrading securities or held-to-maturity securities as of March 31, 2010
and 2009.
Other securities with readily determinable fair values are stated atfair value based on market prices at the end of the year. Unrealized
gains and losses are included in “Valuation difference on available-forsale securities” as a separate component of net assets. Cost of salesof such securities is determined by the moving-average method.
Other securities without readily determinable fair values are stated atcost, as determined by the moving-average method.
Investments in affiliates are accounted for by the equity method(see Note 2 (2)).
Investments in affiliates not accounted for by the equity method
are stated at cost due to their insignificant effect on the consolidated
financial statements.

(6) Inventories

Inventories are stated mainly at cost determined by the movingaverage method (the values on the consolidated balance sheets arecalculated through the write-down method based on the deteriorationof profitability).

(7) Property, plant and equipment, and depreciation(Except for lease assets)

Property, plant and equipment are stated at cost. Depreciation
expenses of property, plant and equipment are computed mainly by
the declining-balance method for the Company and subsidiaries.
Significant renewals and additions are capitalized at cost. Repairs
and maintenance are charged to income as incurred.
In accordance with the revision of the Corporation Tax Act ofJapan, as a result of a review of the useful lives, Toyota Industries
revised the useful lives of tangible assets and applied the revisionfrom the consolidated fiscal year ended March 31, 2009.
As a result, operating income decreased by ¥5,824 million andordinary income and income before income taxes and minority
interests decreased by ¥5,843 million, 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).

Toyota Industries Report 201053

Financial Section

Notes to Consolidated Financial Statements
Goodwill, if material, is amortized principally over less than 20
years on a straight-line basis, while immaterial goodwill is charged toincome as incurred.

(9) Lease transactions

The depreciation method of leased properties on finance leases thatare deemed to transfer the ownership of the leased properties tolessees is the same as those applied to properties owned by Toyota
Industries.
The depreciation method of leased properties on finance leases
other than those deemed to transfer the ownership of leased
properties to lessees is computed mainly by the straight-line method,which assumes zero residual value and the leasing term to be for theuseful life of the asset.
As for the finance leases other than finance leases deemed totransfer the ownership of leased properties to lessees, those thatcame into effect before March 31, 2008 (inclusive) will continue to beaccounted for by the former method (similar to the method applicableto ordinary operating leases).

(10) Method of accounting of deferred assets

As for bond issuance costs, the full amount is treated as an expenseat the time of payout.

(11) Allowances for doubtful accounts

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

(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.

(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, corporate auditorsand managing officers, an amount which is calculated at the end of
the year as required by an internal policy describing the retirement
benefits for directors, corporate auditors and managing officers is
accrued.

(14) Accounting standards for finance leasetransactions

As for the accounting standards for finance lease transactions, net
sales and cost of sales are recognized when the lease payments arereceived.

(15) Hedge accounting(a) Method of hedge accounting
Mainly the deferral method of hedge accounting is applied. In thecase of foreign currency forward contracts and foreign currency
option contracts, the hedged items are translated at contracted
forward rates if certain conditions are met.
As for the interest rate swap contracts, which meet therequirements of preferential accounting method, the preferential
accounting method is applied.

54

Toyota Industries Report 2010(b) Hedging instruments and hedged items
Hedging instruments: Derivatives instruments (foreign currency
forward contracts, foreign currency
option contracts, foreign currency swaps
and interest rate swaps)
Hedged items:
Risk of change in interest rate on borrowings,
receivables and payables and risk of change
in forward exchange rates on transactions
denominated in foreign currencies(borrowings, receivables and payables, andforecasted 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.

(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

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 weightedaverage 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 statements ofincome are the amounts applicable to the respective years.

Financial Section

3. Changes in accounting policies and adoption of new accounting standards:
For the year ended March 31, 2010
Accounting Standard for Construction Contracts

Effective from the fiscal year beginning April 1, 2009, Toyota Industries
applies Financial Accounting Standard No. 15 “Accounting Standard
for Construction Contracts” and its Implementation Guidance No.
18 “Guidance on Accounting Standard for Construction Contracts,”
both of which were issued on December 27, 2007 by the AccountingStandards Board of Japan. This modification does not have asignificant effect on the income (or loss) of the Company.

Partial Amendments to Accounting Standard for
Retirement Benefits (Part 3)

Effective from the fiscal year beginning April 1, 2009, Toyota Industries
applies Financial Accounting Standard No. 19 “Partial Amendments
to Accounting Standard for Retirement Benefits (Part 3),” which was
issued on July 31, 2008 by the Accounting Standards Board of Japan.
This modification has no effect on the income (or loss) of the Company.

For the year ended March 31, 2009
Accounting Standard for Measurement of Inventories

Effective from the fiscal year beginning from April 1, 2008, Toyota
Industries applies Financial Accounting Standard No. 9 “AccountingStandard for Measurement of Inventories” issued on July 5, 2006 by
the Accounting Standards Board of Japan.
With regard to the measurement method, inventories are statedmainly at cost determined by the moving-average method (the values
on the consolidated balance sheets are calculated through the writedown method based on the deterioration of profitability).
As a result, operating income, ordinary income and income before
income taxes and minority interests decreased by ¥692 million,
respectively. 			

Practical Solution on Unification of Accounting Policies
Applied to Foreign Subsidiaries for Consolidated
Financial Statements
Effective from the fiscal year beginning from April 1, 2008, Toyota
Industries applies Practical Issue Task Force No. 18 “Practical

Solution on Unification of Accounting Policies Applied to Foreign
Subsidiaries for Consolidated Financial Statements” issued on May
17, 2006 by the Accounting Standards Board of Japan.
As a result, operating income increased by ¥2,197 million,
ordinary income and income before income taxes and minority
interests increased by ¥2,213 million, respectively, and retained
earnings at the beginning of the consolidated fiscal year beginningfrom April 1, 2008 decreased by ¥2,400 million.

Accounting Standard for Lease Transactions

Effective from the fiscal year beginning from April 1, 2008, Toyota
Industries applies Financial Accounting Standard No. 13 “AccountingStandard for Lease Transactions” (issued by the AccountingStandards Board of Japan on June 17, 1993; latest revision, March
30, 2007) and Implementation Guidance No. 16 “Guidance on
the Accounting Standard for Lease Transactions” (issued by the
Accounting Standards Board of Japan on January 18, 1994; latest
revision, March 30, 2007). In accordance with the Standard and the
Guidance, finance leases other than those deemed to transfer theownership of leased properties to lessees are accounted for mainly
by a method similar to that applicable to ordinary sales transactions,instead of by the former method, which was similar to that applicableto ordinary operating leases.
As a result, operating income, ordinary income and income
before income taxes and minority interests increased by ¥608 million,
respectively.
As for finance leases other than finance leases deemed to transfer
the ownership of leased properties to lessees, those that came into
effect before March 31, 2008 (inclusive) will continue to be accounted
for by the former method (similar to the method applicable to ordinary
operating leases).

Classification Change in Consolidated Statement of
IncomeEffective from the fiscal year beginning April 1, 2008, rental incomeof fixed assets, which was listed as a separate component of nonoperating income, is included in other non-operating income because
the amount is immaterial. Rental income of fixed assets in fiscal 2009was ¥1,061 million.

4. Inventories:
Inventories as of March 31, 2010 and 2009 consist of the following:
Millions of yen

Merchandise and finished goods		
Raw materials		Work in process		
Supplies		
Total

2010
¥ 37,358
14,12725,672
11,190¥ 88,349

2009¥ 44,237
15,94130,500
11,482¥102,162

5. Property, plant and equipment:
Accumulated depreciation as of March 31, 2010 and 2009 is as follows:
Millions of yen

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

2010
¥ 196,985
569,604
86,215¥ 852,805

2009¥ 180,043
524,949
78,162¥ 783,154

Toyota Industries Report 201055

Financial Section

Notes to Consolidated Financial Statements

6. Long-term debt:(1) Long-term debt as of March 31, 2010 and 2009 consists of the following:
Millions of yen

2010
¥

–
20,00050,00030,00020,00020,00030,00013,85319,99326,0002,000
50,000311,939
123,591(63,177)(15,576)¥638,624

1.94% bonds due 2009 without collateral
1.91% bonds due 2010 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
0.50-2.65% medium-term notes due 2010-2014 without collateral
1.95% bonds due 2016 without collateral
1.72% bonds due 2018 without collateral
1.35% medium-term notes due 2014 without collateral
2.109% bonds due 2019 without collateralLong-term loans payable
Lease obligations
Less: current portion of long-term loans payable and bonds
Less: current portion of lease obligations
Total

2009
¥ 15,000
20,00050,00030,00020,00020,00030,00030,582
19,99226,0002,000–
294,005
115,537(40,737)(11,292)¥621,088(2) Annual maturities of long-term debt as of March 31, 2010 are as follows:
Millions of yen
Year ending March 31

Long-termloans payable
and bonds

2012
2013
2014
2015
2016 and thereafter
Total¥ 112,732
75,33061,55255,000225,993¥ 530,609

Lease obligations¥

36,81931,48523,84014,492
1,377¥ 108,014

Total¥ 149,552
106,816
85,39369,493
227,371¥ 638,624

7. Investments in affiliated companies:
Investments in affiliated companies as of March 31, 2010 and 2009 are as follows:
Millions of yen

Investments in securities (stock)
Investments and other assets (others)

2010¥ 10,964
4,440

2009
¥ 7,520
3,434

8. Assets pledged as collateral:(1) Assets pledged as collateral as of March 31, 2010 and 2009 are as follows:
Millions of yen

Investments in securities
Buildings and structures
Machinery, equipment and vehicles
Land
Merchandise and finished goods
Accounts receivable
Work in process
Raw materials and supplies
Total

2010
¥ 70,680
2,004
1,734
466
335
283
122
77
¥ 75,704

2009¥ 51,520
532
–
396
486
–
–
–
¥ 52,935(2) Secured liabilities as of March 31, 2010 and 2009 are as follows:
Millions of yen

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

56

Toyota Industries Report 20102010
¥ 22,410
2,246
492¥ 25,149

2009¥ 23,056505
44¥ 23,606

Financial Section

9. Allowance for retirement benefits:
Allowance for retirement benefits including the allowance for retirement benefits to directors (including managing officers) for the years ended March
31, 2010 and 2009 is as follows:
Millions of yen

Allowance for retirement benefits to directors (including managing officers)2010¥ 3,7412009¥ 5,460

10. Contingent liabilities:
Toyota Industries is contingently liable for guarantees as of March 31, 2010 and 2009 as follows:
Millions of yen

Guarantees given by consolidated subsidiaries

2010
¥ 67

2009
¥ 134

11. Export discount bills:
Export discount bills as of March 31, 2010 and 2009 are as follows:
Millions of yen

Export discount bills

2010
¥ 314

2009
¥ 158

12. Net assets:
Under the Corporate Law of Japan, amounts equal to at least 10% of the sum of the cash dividends and other external appropriations paid by theCompany and its domestic subsidiaries must be set aside as a legal reserve until it equals 25% of capital stock. The legal reserve may be used
to reduce a deficit or may be transferred to capital stock taking appropriate corporate action. In consolidation, the legal reserves of the Company
and its domestic subsidiaries are accounted for as retained earnings. The year-end cash dividend is approved at the Ordinary General Meeting of
Shareholders of the Company held after 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 Corporate Law of Japan.

13. Research and development expenses:
Research and development expenses, which are included in selling, general and administrative expenses and manufacturing costs, amounted to¥26,826 million and ¥33,646 million for the years ended March 31, 2010 and 2009, respectively.

14. Impairment losses:
For the year ended March 31, 2010, Toyota Industries recorded extraordinary losses on business restructuring of the Materials Handling
Equipment Segment. The amount of impairment losses related to property, plant and equipment and goodwill was ¥36,902 million. Toyota
Industries also recorded extraordinary losses associated with restructuring expenses of closing a plant in Canada and an early retirement schemein France.
The total amount was ¥3,464 million in Japan, ¥5,075 million in the United States and Canada, ¥27,606 million in Europe and ¥755 million inAustralia.
By category of assets, impairment losses totaled ¥27,606 million for goodwill, ¥4,334 million for machinery, equipment and vehicles, ¥2,697
million for buildings and structures, ¥1,213 million for tools, furniture and fixtures, ¥452 million for software, ¥414 million for land and ¥183 million
for construction in progress.
The recoverable amount of assets is measured based on the value in use. The value in use is calculated by discounting the expected future
cash in-flow mainly using a 9% discount rate.
For the year ended March 31, 2009, Toyota Industries recorded impairment losses on property, plant and equipment for automobile parts of¥25,709 million due to a decrease in production volume. The total amount was ¥8,170 million in Japan and ¥17,023 million in the United States.
Also, Toyota Industries recorded impairment losses on equipment for materials handling equipment of ¥514 million due to a decrease inproduction volume in Japan.
Toyota Industries recorded impairment losses on property, plant and equipment of ¥10,159 million due to discontinuing production ofdesignated electronics parts in Japan.
By category of assets, impairment losses totaled ¥20,487 million for machinery, equipment and vehicles, ¥10,448 million for buildings andstructures, ¥4,247 million for construction in progress, ¥580 million for tools, furniture and fixtures and ¥102 million for software.
The recoverable amount of assets is calculated based on net selling price.

Toyota Industries Report 201057

Financial Section

Notes to Consolidated Financial Statements

15. Financial instruments:(1) Matters concerning financial instruments for the year ended March 31, 2010:(a) Policy for financial instruments
Toyota Industries borrows funds from financial institutions and issues corporate bonds to procure funds to meet its needs for long-term funding.
Toyota Industries also borrows from funds and issues commercial paper to procure funds to meet its needs for short-term working capital. Toyota
Industries manages its cash reserves as highly safe financial assets. The purpose of using derivative instruments is to reduce risk, not to obtain
earnings from exchanges or for speculative purposes.
(b) Contents and risk of financial instruments
Cash and deposits are subject to credit risk of financial institutions and foreign currency risk. Trade notes and accounts receivable are subject tocounterparty credit risk and foreign currency risk.
Loans receivable are subject to counterparty credit risk and foreign currency risk. With regards to foreign currency risk, Toyota Industries uses
derivative instruments (foreign currency forward contracts and foreign currency option contracts) for the amount of foreign currency trade assets (tradenotes and accounts receivable) offset by foreign currency trade liabilities (trade notes and accounts payable).
Short-term investments and investment in securities are subject to market risk and foreign currency risk.
Trade notes and accounts payable are subject to foreign currency risk. All of them are due within one year.
Loans payable, commercial paper, bonds and lease obligations are subject to foreign currency risk and interest rate risk.
Toyota Industries uses derivative instruments (foreign currency swaps and interest rate swaps) to cover such kinds of risks. The longest
redemption date is 12 years after the closing date on March 31, 2010.
Toyota Industries uses derivative instruments (foreign currency forward contracts, foreign currency option contracts, foreign currency swaps andinterest rate swaps) in order to hedge the above risk and derivative instruments are subject to credit risk of financial institutions.
As for the hedge accounting, the method, items, policy and evaluation method of measure of effectiveness are referred in Note 2 “(15) Hedge
accounting.”(c) Risk management of financial instruments
1) Management of credit risk (risk of non-execution of contract by counterparty)
In accordance with its treasury policy, Toyota Industries carries out regular monitoring of principal counterparties and strives to quickly ascertain andminimize concerns about collecting credits due to worsening financial and other conditions of counterparties. In using derivatives, to reduce credit
risk of financial institutions, Toyota Industries engages in transactions only with those financial institutions that have high credit ratings.
2) Management of market risk (foreign currency risk, interest rate risk, others)
In accordance with its treasury policy, in principle, Toyota Industries uses foreign currency forward contracts, foreign currency option contracts andforeign currency swaps to hedge foreign currency risk for each currency for its monetary credits and liabilities denominated in foreign currencies.
Toyota Industries uses interest swaps to hedge interest rate risk on monetary liabilities. Toyota Industries monitors the financial condition andreviews the valuations of short-term investments and investments in securities.
3) Management of financing-related liquidity risk (risk that payments cannot be made on payment date)In accordance with its treasury policy, Toyota Industries manages liquidity risk with cash reserves and commitment lines.
(d) Supplemental explanation of financial instruments
The fair value of financial instruments includes values based on market values as well as rationally calculated values when market values cannot be
determined. These calculated values could also conceivably change along with the adoption of different premises.

(2) Matters concerning the fair value of financial instruments:

Consolidated balance sheet amounts, fair values as well as respective differentials as of March 31, 2010 are as follows. Financial instruments forwhich ascertaining fair value is extremely difficult are not included. Refer to Note 2 regarding these financial instruments.
Millions of yen
Carrying
amount *1,*2

Fair value

Difference

Cash and deposits¥ 287,965¥ 287,965¥–
Trade notes and accounts receivable
160,608
160,607(0)
Short-term investments and investments in securities
			
Investments in affiliated companies
6,380
5,410
(969)
Other securities
1,207,913
1,207,913–
Long-term loans receivable
5,552
5,552
–
Total assets¥1,668,420¥1,667,449¥ (970)Trade notes and accounts payable¥ (141,787)¥ (141,787)¥–
Short-term loans payable(46,241)(46,241)–
Commercial paper(9,575)(9,575)–Current portion of bonds(50,446)(50,446)–
Bonds(231,401)(238,739)(7,338)Long-term loans payable(299,208)(307,370)(8,161)
Lease obligations(108,014)(108,146)(132)
Total liabilities¥ (886,674)¥ (902,306)¥(15,632)
Derivative transactions				Derivative instruments for which hedge accounting is not applied
¥
1,317
¥
1,317
¥
–
Derivative instruments for which hedge accounting is applied
(559)
(861)
(301)
Total derivative transactions
¥
757
¥
455
¥ (301)*1: Allowance for doubtful accounts is excluded from total assets.
*2: The figures for liabilities are indicated in parentheses.

58

Toyota Industries Report 2010

Financial Section

1. Methods for calculating fair value of financial instruments and matters concerning marketable securities and derivatives(Assets)(1) Cash and deposits
All deposits are short term and fair value approximates the carrying amount. Therefore, fair value for deposits is calculated at the carrying amount.
(2) Trade notes and accounts receivable
Fair value is calculated by discounting to net present value the amounts of receivables for each category of receivables for each specified time
period using interest rates that incorporate time (interest) risk and credit risk up to maturity.
(3) Short-term investments and investments in securities
The fair value of stocks in investments in affiliated companies is calculated based on prices listed on stock exchanges. Other securities arestocks, money management funds and negotiable certificates of deposit. The fair value of stocks in other securities is calculated based on prices
listed on stock exchanges. The fair value of money management funds and negotiable certificates of deposit approximates the carrying amount.
Therefore, fair value is calculated at the carrying amount.
Details regarding other securities are referred to in Note 16 “Marketable securities.”(4) Long-term loans receivable
The majority of these are loans with floating interest rates made to employees, with fair value approximating the carrying amount. Therefore, fairvalue is calculated at the carrying amount.
(Liabilities)(1) Trade notes and accounts payable
All notes and accounts payable are short term and fair value approximates the carrying amount. Therefore, fair value for notes and accounts
payable is calculated at the carrying amount.
(2) Short-term loans payable, (3) Commercial paper, (4) Current portion of bonds
These items are short term and fair value approximates the carrying amount. Therefore, fair value for these items is calculated at the carrying
amount.
(5) Bonds
Fair value is calculated by discounting to net present value the total of principal and interest using expected interest rates when newly borrowing
the same amount.
(6) Long-term loans payable
Fair value is calculated by discounting to net present value the total of principal and interest using expected interest rates when newly borrowing
the same amount.
Interest rate swaps that meet the requirement for the preferential accounting method are handled together with the aforementioned long-termloans payable. The fair value of interest rate swaps is included in the fair value of the aforementioned long-term loans payable. The fair value iscalculated by discounting expected future cash flow using interest rates when newly borrowing the same amount.
(7) Lease obligations
Fair value is calculated by discounting to net present value the total amount of lease payments using an expected interest rate when newly
undertaking the same lease transaction.
(Derivative transactions)
Details regarding derivative transactions are referred to in Note 17 “Derivative instruments.”
2. Financial instruments for which ascertaining fair value is extremely difficult
Millions of yen
Carrying
amountNon-listed stocks				Investments in affiliated companies			¥ 4,584
Other securities			
15,198
Total			¥19,783
Non-listed stocks are not included in “Short-term investments and investments in securities” because there are no market prices and ascertaining
fair value is extremely difficult.
3. Amounts of projected future redemptions after March 31, 2010 for monetary credits and liabilities as well as marketable securities withmaturities
Millions of yen
2011Year ending March 31¥287,965
160,541771¥449,279

Cash and deposits
Trade notes and accounts receivable
Long-term loans receivable
Total

2012-20152016-2020

¥

¥

¥

–
66
2,109
2,176

–
–
1,198
1,198

¥

Over 10 years

¥

–
–
1,472
¥1,472

4. Scheduled repayments of bonds, long-term loans payable, lease obligations and other interest-bearing debt after the consolidated settlement
date
Millions of yen
2011Year ending March 31

BondsLong-term loans payable
Lease obligations
Total

¥

¥

–
–
–
–

2012-20152016-2020¥105,407
199,208
106,637¥411,254¥125,993
100,000
1,376¥227,369

Over 10 years

¥

¥

–
–
0
0

Application of Accounting Standard for Financial Instruments

Effective from the fiscal year beginning April 1, 2009, Toyota Industries applies Financial Accounting Standard No. 10 “Accounting Standard for
Financial Instruments” and its Implementation Guidance No. 19 “Guidance on Disclosures about Fair Value of Financial Instruments,” both ofwhich were issued on March 10, 2008 by the Accounting Standards Board of Japan.

Toyota Industries Report 201059

Financial Section

Notes to Consolidated Financial Statements

16. Marketable securities:(1) As of and for the year ended March 31, 2010:(a) Other securities with readily determinable fair value as of March 31, 2010 are as follows:
Millions of yen

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

Acquisition
cost

Carrying
amountDifference¥223,373
223,373¥1,130,531
1,130,531¥907,157
907,157

7,432
71,391
78,824¥302,197

5,991
71,391
77,382¥1,207,913(1,441)–(1,441)¥905,716

Non-listed stocks (total amount is ¥15,198 million in the Consolidated Balance Sheet) are not included in “Other securities” because there are nomarket prices and ascertaining fair value is extremely difficult.
Others in securities with the carrying amount not exceeding acquisition cost are money management funds and negotiable certificates of deposit.
(b) Other securities sold during the year ended March 31, 2010 are as follows:
Millions of yen
Proceeds Realized gains¥197

Realized losses

¥135

¥0

(2) As of and for the year ended March 31, 2009:(a) Other securities with readily determinable fair value as of March 31, 2009 are as follows:
Millions of yen

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

Acquisition
cost

Carrying
amountDifference¥215,764
215,764¥873,947
873,947¥658,183
658,183

15,17915,179¥230,943

10,785
10,785¥884,732(4,394)(4,394)¥653,788

Proceeds

Realized gains

Realized losses¥12,368¥498¥3(b) Other securities sold during the year ended March 31, 2009 are as follows:
Millions of yen(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, 2009 are as follows:
Millions of yen
Carrying
amountOther securities:				
Domestic unlisted stocks excluding over-the-counter stocks			
¥15,271
Money management funds			
40,338Negotiable certificates of deposit			
18,50060

Toyota Industries Report 2010

Financial Section

17. Derivative instruments:(1) Quantitative disclosure about derivatives for the year ended March 31, 2010
1) Derivative instruments for which hedge accounting is not applied(a) Foreign currency transactions as of March 31, 2010 are as follows:

Millions of yen
Category

Transactions other thanmarket transactions

Type

Notional
amountOver one year of
notional amount

Fair value

Net unrealized
gain/loss

Foreign currency forward contracts transactions					Buy JPY / Sell USD
¥ 119
¥–
¥ 120
¥ (1)
Buy JPY / Sell EUR
68
–
64
3
Buy JPY / Sell SEK
27
–
26
0
Buy SEK / Sell EUR
22,796–22,541254
Buy SEK / Sell USD
4,477
–
4,547
(70)
Buy SEK / Sell AUD
3,336
–
3,420
(83)
Buy SEK / Sell DKK
1,783
–
1,724
59
Buy SEK / Sell NOK
1,332
–
1,332
0
Buy SEK / Sell CHF
328
–
327
0
Buy SEK / Sell CZK
208
–
208
0
Buy SEK / Sell THB
206
–
215
(9)
Buy SEK / Sell CAD
118
–
127
(8)
Buy SEK / Sell HUF
28
–
28
0
Sell JPY / Buy USD
45
–
46
1
Sell SEK / Buy EUR
13,742–
13,735(7)
Sell SEK / Buy CAD
3,865
–
3,913
47
Sell SEK / Buy NOK
2,854
–
2,894
40
Sell SEK / Buy GBP
911
–
908
(3)
Sell SEK / Buy USD
637
–
635
(2)
Sell SEK / Buy PLN
243
–
249
6
Sell SEK / Buy DKK
135
–
134
(1)
Sell SEK / Buy CHF
130
–
131
1
Sell SEK / Buy HUF
79
–
80
0
Sell SEK / Buy CZK
5
–
4
(0)
Sell PLN / Buy EUR
49
–
48
(0)
Sell USD / Buy CAD
28
–
28
0
Sell EUR / Buy USD
46
–
45
0
Total
¥57,609¥–¥57,546¥226
Millions of yen

Category

Transactions other thanmarket transactions

Type

Notional
amountOver one year of
notional amount

Fair value

Net unrealized
gain/loss

Foreign currency swap transactions					Payment SEK / Receipt USD¥ 4,730¥–¥ 4,482¥ (248)
Payment JPY / Receipt USD
7,042
2,378
8,482
1,439
Total
¥11,772¥2,378¥12,964¥1,191

The fair value calculation method is based on the index price as of March 31, 2010.
(b) Interest rate transactions as of March 31, 2010 are as follows:
Millions of yen
Category

Transactions other thanmarket transactions

Type

Notional
amountOver one year of
notional amount

Fair value

Net unrealized
gain/loss

Interest rate swap transactions					Fixed rate payment / Floating rate receipt¥ 9,545¥4,734¥ 9,429¥(116)
Floating rate payment / Fixed rate receipt
923
923
938
15
Total
¥10,469¥5,657¥10,367¥(101)

The fair value calculation method is based on the index price as of March 31, 2010.

Toyota Industries Report 201061

Financial Section

Notes to Consolidated Financial Statements
2) Derivative instruments for which hedge accounting is applied
Millions of yen
Category

Type

Contents ofhedge

Notional
amountOver one yearof notionalamountFair value

Net unrealized
gain/loss

Evaluation
method–––––¥ 1,627
355
187
1,746
1,346

¥ (46)
(17)
(2)
61
49

By theexchange rate
on foreign
currency
market

–

<44>

(14)

–

<15>

(6)

–

<3>

(0)

–

<9>

(20)

–

<1>

(7)

–

<1>

(2)

148

575

(57)

148

¥ 5,915¥ (63)

Foreign currency forward contracts transactions
		 Buy JPY / Sell USD
		 Buy JPY / Sell AUD
		 Buy JPY / Sell EUR		 Buy SEK / Sell GBP		 Buy SEK / Sell EUR

Accounts
receivable¥ 1,580
338
184
1,807
1,396

¥

Foreign currency option contracts transactions
Sell
		 Call USD / Put JPY					Call AUD / Put JPY
Deferredhedge method					 Call EUR / Put JPY			Buy		 Put USD / Call JPY					 Put AUD / Call JPY					 Put EUR / Call JPY
			Interest rate swap transactions

1,860
<29>
358
<9>
199
<3>

Accounts
receivable

1,860
<29>
358
<9>
199
<3>
Long-term

632

Fixed rate payment / Floating rate receipt loans payable¥10,864

Total¥

By the priceon currency
option market

By the rate oninterest swap
market

The amounts indicated in brackets for foreign currency option contracts transactions refer to the option fee, and the related figures
for fair value and net unrealized gain/loss are also shown.
Millions of yen
Category

Type

Contents ofhedge

Notional
amountOver one yearof notionalamountNet unrealized
gain/loss

Evaluation
method

901
891

¥ 46
51

By theexchange rate
on foreign
currency
market

–

<17>

(2)

–

<9>

(3)

–

<0>

0

–

<1>

(13)

–

<0>

(5)

–

<0>

(0)

21,577

13,925

21,108(468)

By the rate oninterest swap
market

2,338
239
73

–
–
–

2,421
255
74

(83)
(15)
(1)

By theexchange rate
on foreign
currency
marketFixed rate payment / Floating rate receipt borrowings

25,00025,00024,698(301)

By the rate oninterest swap
marketTotal¥53,245¥38,925¥50,379¥(798)

Fair value

Foreign currency forward contracts transactions
		 Buy SEK / Sell GBP		 Buy SEK / Sell EUR

Accounts
receivable

¥

947
943

¥

–
–

¥

Foreign currency option contracts transactions
Sell
		 Call USD / Put JPY			Fair value hedge		Call AUD / Put JPY
accounting					 Call EUR / Put JPY			Buy		 Put USD / Call JPY					 Put AUD / Call JPY					 Put EUR / Call JPY
			Interest rate swap transactions
Net valuation method
using forward foreignexchange contracts

Accounts
receivable

744
<14>
255
<6>
62
<0>
744
<14>
255
<6>
62
<0>

Fixed rate payment / Floating rate receipt Lease assets

By the priceon currency
option market

Foreign currency forward contracts transactions
		 Buy JPY / Sell USD
		 Buy JPY / Sell AUD
		 Buy JPY / Sell EUR

Accounts
receivable

Interest rate swap transaction
Preferential accounting
method of interest rate
swap transactions

Long-term

The amounts indicated in brackets for foreign currency option contracts transactions refer to the option fee, and the related figures
for fair value and net unrealized gain/loss are also shown.

62

Toyota Industries Report 2010

Financial Section(2) Quantitative disclosure about derivatives for the year ended March 31, 20091) Qualitative disclosure about derivatives(a) Contents of derivative instruments into which Toyota Industries entered, policy with respect to entering into derivative instruments and purposeof using derivative instruments:
Toyota Industries uses foreign currency forward contracts, foreign currency swaps and foreign currency option contracts to hedge foreign
currency risks on transactions denominated in foreign currencies (borrowings, receivables and payables, and forecasted transactions).
Toyota Industries also uses interest rate swaps agreements to reduce interest rate risks on borrowings, receivables and payables.
The purpose of using derivative instruments is to reduce risk, not to obtain earnings from exchanges or for speculative purposes.
(b) Contents of risks related to derivative instruments:
Interest rate swaps, foreign currency forward contracts and foreign currency option contracts into which Toyota Industries entered have risksof fluctuations in interest rates and in foreign currency exchange rates. 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.
(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 arereported periodically to a director responsible for accounting.
2) Quantitative disclosure about derivatives(a) Foreign currency transactions as of March 31, 2009 are as follows:
Millions of yen
Category

Transactions other thanmarket transactions

Type

Notional
amountOver one year of
notional amount

Fair value

Net unrealized
gain/loss

Foreign currency swap transactions					Payment SEK / Receipt USD¥16,892¥4,977¥14,220¥(2,671)
Payment JPN / Receipt USD¥12,278¥7,410¥13,723¥ 1,444

The fair value calculation method is based on the index price as of March 31, 2009.
The derivative instruments to which hedge accounting is applied were excluded from disclosure.
(b) Interest rate transactions as of March 31, 2009 are as follows:
Millions of yen
Category

Transactions other thanmarket transactions

Type

Notional
amountOver one year of
notional amount

Fair value

Net unrealized
gain/loss

Interest rate swap transactions					Fixed rate payment / Floating rate receipt¥13,740¥9,237¥13,508¥(232)
Floating rate payment / Fixed rate receipt
¥ 971
¥ 971
¥ 980
¥ 9

The fair value calculation method is based on the index price as of March 31, 2009.
The derivative instruments to which hedge accounting is applied were excluded from disclosure.

18. Retirement benefits:(1) Outline of retirement benefit plans:
The Company and its domestic subsidiaries maintain tax-qualified pension plans, lump-sum indemnities plans and welfare pension fund plans,
all of which are non-contributory defined benefit pension plans. In addition, certain foreign subsidiaries maintain non-contributory defined benefit
pension plans.
Since 1987, the Company has been transferring the covering percentages of its pension plan from its lump-sum indemnities plan to its taxqualified pension plan. As of March 31, 2010 and 2009, its tax-qualified pension plan covers 50% of total plans. Also, the Company establishedan employee retirement benefit trust. In April 2003, the Company transferred a portion of the lump-sum indemnities plan to a defined contribution
pension plan.

(2) Components of allowance for retirement benefits as of March 31, 2010 and 2009 are as follows:
Millions of yen

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		

2010¥(152,615)
92,936(59,678)
19,953(186)(39,911)1,580¥ (41,492)

2009¥(139,954)
75,012(64,941)
30,491(163)(34,612)3,982¥ (38,595)

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

Toyota Industries Report 201063

Financial Section

Notes to Consolidated Financial Statements(3) Components of retirement benefit expenses for the years ended March 31, 2010 and 2009 are as follows:
Millions of yen

Service cost		
Interest cost		
Expected return on plan assets		
Amortization of prior service obligation		
Amortization of unrecognized actuarial gains or losses
Retirement benefit expenses		2010¥ 8,968
4,111(2,673)36
2,150¥12,593

2009¥7,794
3,869(3,121)
57
638¥9,238Retirement 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, 2010 and 2009 are as
follows:
2010

2009

Method of attribution of estimated retirement benefits to periods of employee service:			Straight-line method			Discount rate
2.00%
2.00%
Expected return on plan assets
3.00%
3.00%
Amortization of prior service obligation
6–11 years 6–11 years — Straight-line method over theremaining service period of			
employees
			Amortization period of unrecognized actuarial gains or losses
20 years
20 years — Straight-line method over the

average remaining service periodof employees(5) Plan assets relating to welfare pension fund under multiemployer pension plan:

Information regarding the welfare pension fund under multiemployer plans as of March 31, 2010 is as follows.
The Japan Society of Industrial
Machinery Manufacturers’ welfare
Other welfare pension funds
pension fund
As of March 31, 2009			
Plan assets¥ 72,130 million¥118,423 million		
Estimated benefit obligation
104,869 million
172,737 million
Variance¥ (32,739 million)¥ (54,313 million)
As of March 31, 2010			
Toyota Industries Group contribution to welfare pension plan
6.01%
4.66%
The Japan Society of Industrial
Machinery Manufacturers’ welfare
pension fund
Other welfare pension funds
As of March 31, 2008			
Plan assets¥ 83,238 million¥150,411 million		
Estimated benefit obligation
104,244 million
178,666 million
Variance¥ (21,006 million)¥ (28,254 million)
As of March 31, 2009			
Toyota Industries Group contribution to welfare pension plan
5.59%
4.61%

19. Stock options:(1) Stock option expenses recorded in the fiscal year and class of options
Millions of yen

Selling, general and administrative expenses

2010
¥604

2009
¥575

(2) The amount recorded as a profit because of forfeitures of stock option rights
Millions of yen

2010
¥108

64

Toyota Industries Report 2010

2009
¥ 46

Financial Section(3) Stock option details, number of stock options and state of fluctuation
1) Stock option details

2010

2009

2008

Company name

The Company

The Company

The Company

Position and number ofgrantees

Directors: 14
Managing officers and employees: 153

Directors: 17
Managing officers and employees: 159

Directors: 16
Managing officers and employees: 159

Class and number of shares*

1,157,000 shares of common stock

1,360,000 shares of common stock

830,000 shares of common stock

Date of issue

August 3, 2009

August 1, 2008

August 1, 2007

Same as left

Same as left

2. Other conditions of exercise shall be decided
as prescribed by the Contract for Allotment of
Subscription Rights to Shares concluded by
the Company and grantee in accordance withresolutions at the General Meeting of Shareholders
and resolutions on the issue of subscription rights
to shares by the Board of Directors.

Same as left

Same as left

3. In the case where grantee becomes no longer
applicable to the conditions of exercise, thegrantee immediately loses subscription rights toshares and must return the rights to the Company
without consideration.

Same as left

Same as left

Periods that grantees must
provide service in return forstock options

From August 3, 2009 to July 31, 2011

From August 1, 2008 to July 31, 2010

From August 1, 2007 to July 31, 2009

Periods that stock subscription
rights are to be exercised

From August 1, 2011 to July 31, 2015

From August 1, 2010 to July 31, 2014

From August 1, 2009 to July 31, 2013

Company name

The Company

The Company

The Company

Position and number ofgrantees

Directors: 17
Managing officers and employees: 152

Directors: 30
Employees: 134

Directors: 30
Employees: 135

Class and number of shares*

802,000 shares of common stock

791,000 shares of common stock

775,000 shares of common stock

Date of issue

August 1, 2006

August 1, 2005

August 2, 2004

1. Grantee must be employed as a director, managing
officer or regular employee of the Company at thetime of exercise. However, this does not apply if nomore than 18 months have elapsed after retirement or
resignation from the Company.

Same as left

Same as left

Same as left

Same as left

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

Condition of settlement ofrights2007

Condition of settlement ofrights

2. Other conditions of exercise shall be decided asprescribed by the Contract for Allotment of Subscription
Rights to Shares concluded by the Company andgrantee in accordance with resolutions at the General
Meeting of Shareholders and resolutions on the issue ofsubscription rights to shares by the Board of Directors.

2006

2005

Periods that grantees must
provide service in return forstock options

From August 1, 2006 to July 31, 2008

From August 1, 2005 to June 30, 2007

From August 2, 2004 to June 30, 2006

Periods that stock subscription
rights are to be exercised

From August 1, 2008 to July 31, 2012

From July 1, 2007 to June 30, 2011

From July 1, 2006 to June 30, 2010

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

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
2010
2009
Stock options outstanding at the end of the previous fiscal year
– 1,358,000
Stock options granted
1,157,000–
Forfeitures––
Conversion to exercisable stock options––
Stock options outstanding at the end of the fiscal year
1,157,000 1,358,000(shares)

2008
828,000––
828,000
–

2007
–
–
–
–
–

2006
–
–
–
–
–

2005
–
–
–
–
–

Toyota Industries Report 201065

Financial Section

Notes to Consolidated Financial Statements
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

(shares)

2010
–
–
–
–
–

2009
–
–
–
–
–

2008
–
828,000–
72,000756,000

2010¥2,570–581

2009¥3,410–421

2008¥5,866–682

2007743,000––
78,000665,000

2006
130,500––
10,000120,500

2005
12,000––2,000
10,0002006¥3,306––2005¥2,652––

2010
32.47%
4 years¥40/share
0.600%

2009
24.63%
4 years¥60/share
1.000%(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 date2007
¥4,642–759(4) Methods for estimating fair value of stock options

The methods for estimating fair value of stock options granted for fiscal 2010 and 2009 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 2005 to July 2009) and (from August 2004 to July 2008)*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: For fiscal 2010, based on the year-end dividend for the fiscal year ended March 31, 2009; For fiscal 2009, based on the year-end dividend for the fiscal year ended
March 31, 2008 and the estimated interim dividend on the grant date

*4: Yields on government bonds for the period corresponding to the projected remaining period(5) 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.

20. Income taxes:(1) The significant components of deferred tax assets and liabilities as of March 31, 2010 and 2009 are as follows:
Millions of yen

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

2010

2009

17,33915,628
8,949
6,988
5,036
1,839
19,49075,271(28,696)
46,574¥ 16,509
14,683
8,833
6,520
3,791
1,316
18,577
70,232(25,348)
44,883(361,032)(2,258)
(562)
(456)
(288)
(5,689)(370,288)¥ (323,714)(260,677)(2,307)
(562)
(509)
(406)
(4,700)(269,164)¥(224,280)¥

Net deferred tax liabilities consist of the following components on the consolidated balance sheets.
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 liabilities
66

Toyota Industries Report 20102010
¥ 17,182
10,429(316)(351,009)¥(323,714)

2009¥ 16,600
11,578(249)(252,209)¥(224,280)

Financial Section(2) Reconciliations of differences between the statutory rate of income taxes and the effective rate of income taxes
for the years ended March 31, 2010 and 2009 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

2010
39.9%

2009
39.9%

–
–
39.9%

–
–
39.9%

Toyota Industries eliminated the line item for the year ended March 31, 2010 because it recorded a loss before income taxes and minority
interests.

21. Leases:(1) Finance leases

As for finance leases other than finance leases deemed to transfer the ownership of leased properties to lessees, those that came into effectbefore March 31, 2008 (inclusive) will continue to be accounted for by the former method (similar to the method applicable to ordinary operatingleases).
1) Finance leases (as a lessee)(a) Pro forma information regarding the leased properties such as acquisition cost and accumulated depreciation, which are not reflected in theaccompanying consolidated balance sheets under finance leases as of March 31, 2010 and 2009 are as follows:
Millions of yen

Buildings and structures:

Acquisition cost equivalents
Accumulated depreciation equivalents
Buildings and structures net balance equivalents
Machinery, equipment and vehicles:
Acquisition cost equivalents
Accumulated depreciation equivalents
Machinery, equipment and vehicles 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		

2010
¥ 245
178
66
¥7,9804,696
3,283¥9,761
6,742
3,018
¥ 100
63
36
¥6,405

2009
245
137
107
¥11,568
6,930
4,638¥12,172
7,081
5,090
¥ 107
49
57
¥ 9,893¥

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, 2010 and 2009 is as follows:
Millions of yen

Due within one year
Due after one year
Total

2010
¥3,061
4,641¥7,7022009¥ 4,421
7,801¥12,222

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 total balance of property, plant and equipment at year-end isimmaterial.
(c) Total lease payments and pro forma depreciation expenses for the years ended March 31, 2010 and 2009 are as follows:
Millions of yen

Lease payments
Pro forma depreciation expenses

2010¥3,606¥3,606

2009¥4,918¥4,918Pro 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 leasing term to be useful lives for the years ended 2010 and 2009, and areequivalent to the amount of total lease payments of the above.

Toyota Industries Report 201067

Financial Section

Notes to Consolidated Financial Statements
2) Finance leases (as a lessor)(a) Information regarding leased properties such as acquisition cost and accumulated depreciation under finance leases as of March 31, 2010
and 2009 is as follows:
Millions of yen

2010
2009
Machinery and equipment:			
¥7,865Acquisition cost
¥6,302
Accumulated depreciation
5,541
6,220
Total net leased property¥ 761¥1,645(b) Pro forma information regarding future minimum lease income as of March 31, 2010 and 2009 is as follows:
Millions of yen

Due within one year
Due after one year
Total

2010
¥1,651
1,016¥2,6672009¥2,072
2,961¥5,033Future 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 at the year-ends is immaterial.
(c) Total lease payments to be received and depreciation expenses for the years ended March 31, 2010 and 2009 are as follows:
Millions of yen

Total lease payments to be received
Depreciation expenses

2010¥1,793951

2009¥2,157
1,695(2) Operating leases

1) Operating leases (as a lessee)
Pro forma future lease payments under operating leases as of March 31, 2010 and 2009 are as follows:
Millions of yen

Due within one year
Due after one year
Total

2010
¥ 9,069
34,148¥43,2172009¥ 8,818
34,229¥43,048

2) Operating leases (as a lessor)
Pro forma information regarding future minimum rentals under operating leases as of March 31, 2010 and 2009 is as follows:
Millions of yen

Due within one year
Due after one year
Total

68

Toyota Industries Report 20102010
¥19,491
29,056¥48,547

2009¥17,187
28,385¥45,572

Financial Section

22. Changes in net assets:(1) Common stock outstanding for the years ended March 31, 2010 and 2009:

sharesBalance at March 31, 2008
Increase
Decrease
Balance at March 31, 2009
Increase
Decrease
Balance at March 31, 2010

325,840,640––
325,840,640––
325,840,640(2) Treasury stock outstanding for the years ended March 31, 2010 and 2009:

sharesBalance at March 31, 2008
Increase due to purchase of odd stock
Decrease due to exercise of stock options
Balance at March 31, 2009
Increase due to purchase of odd stock
Decrease due to sale of odd stock
Balance at March 31, 2010

14,251,070
15,557(3,600)14,263,027
7,277
(361)
14,269,943(3) Subscription rights to shares outstanding for the years ended March 31, 2010 and 2009:
Millions of yen

2010¥1,720

The Company

2009¥1,224(4) Dividends(a) Dividends paid for the year ended March 31, 2010
Resolutions

Ordinary General Meeting of
Shareholders held on June 19, 2009
Board of Directors meeting held on
October 30, 2009

Total dividends

Dividends per share

Millions of yen

Yen

Common stock¥3,115

Common stock

3,115

Class of shares

Record date

Effective date¥10

March 31, 2009

June 22, 200910

September 30,
2009

November 26,2009(b) Dividends with a record date in the fiscal year ended March 31, 2010 for which the effective date falls in the following fiscal year
Resolutions

Ordinary General Meeting of
Shareholders held on June 23, 2010

Class of shares

Common stock

Total dividends
Millions of yen¥6,231

Source ofdividends

Dividends per share

Retainedearnings¥20

Yen

Record date

Effective date

March 31, 2010

June 24, 2010

Record date

Effective date(c) Dividends paid for the year ended March 31, 2009
Resolutions

Ordinary General Meeting of
Shareholders held on June 20, 2008
Board of Directors meeting held on
October 30, 2008

Total dividends

Dividends per share

Millions of yen

Yen

Common stock¥9,970¥32

March 31, 2008

June 23, 2008

Common stock

9,347

30

September 30,
2008

November 26,
2008

Class of shares(d) Dividends with a record date in the fiscal year ended March 31, 2009 for which the effective date falls in the following fiscal year
Resolutions

Ordinary General Meeting of
Shareholders held on June 19, 2009Class of shares

Common stock

Total dividends
Millions of yen¥3,115

Source ofdividends

Dividends per share

Retainedearnings¥10

Yen

Record date

Effective date

March 31, 2009

June 22, 2009

Toyota Industries Report 201069

Financial Section

Notes to Consolidated Financial Statements

23. Subsequent events:
There were no subsequent events for the year ended March 31, 2010.
In accordance with a resolution of the Board of Directors meeting held on February 19, 2009, the Company issued the 18th unsecured bond as
follows:(1) Total amount of bonds to be issued(2) Issue price(3) Date of payment(4) Date of maturity(5) Interest rate(6) Redemption price(7) Appropriation of the raised fund

50,000 million yen
100 yen (par issuance for the stated value of 100 yen)
April 22, 2009
March 20, 20192.109% per annum
100 yen for the stated value of 100 yen
Allotted for redemption of bonds and capital investment of the Company

24. Segment information:(1) Business segments

As of and for the years ended March 31, 2010 and 2009:
Millions of yen

Sales:
Automobile
Outside customer sales
Inter-segment transactions

2010

2009

¥ 778,356
12,810791,166¥ 755,924
18,465774,389431,619
999
432,618

639,656
3,931
643,587

108,596
5,685
114,282

114,825
6,927
121,753

20,87857
20,93629,55646
29,60338,317
10,301
48,6191,407,623(29,853)¥1,377,769

44,28921,531
65,821
1,635,154(50,902)¥1,584,252¥ 767,503
442,168
108,987
22,77244,647(30,313)¥1,355,767¥ 785,894
639,816
118,851
31,662
65,867(51,218)¥1,590,874¥¥

Materials Handling Equipment
Outside customer sales
Inter-segment transactions
Logistics
Outside customer sales
Inter-segment transactions
Textile Machinery
Outside customer sales
Inter-segment transactions
Others
Outside customer sales
Inter-segment transactions
Subtotal
Elimination of inter-segment transactions
Total
Operating costs and expenses:
Automobile
Materials Handling Equipment
Logistics
Textile Machinery
OthersElimination of inter-segment transactions
Total
Operating income (loss):
Automobile
Materials Handling Equipment
Logistics
Textile Machinery
OthersElimination of inter-segment transactions
Total

70

Toyota Industries Report 2010¥

23,663(9,549)5,294(1,836)
3,971
459
22,002¥(11,504)
3,770
2,901
(2,058)(46)
315(6,621)

Financial Section

Millions of yen

Assets:Automobile
Materials Handling Equipment
Logistics
Textile Machinery
OthersCorporate or elimination of inter-segment transactions
Total
Depreciation and amortization:
Automobile
Materials Handling Equipment
Logistics
Textile Machinery
OthersCorporate or elimination of inter-segment transactions
Total
Impairment losses:
Automobile
Materials Handling Equipment
Logistics
Textile Machinery
OthersCorporate or elimination of inter-segment transactions
Total
Capital expenditures:
Automobile
Materials Handling Equipment
Logistics
Textile Machinery
OthersCorporate or elimination of inter-segment transactions
Total

2010

2009

¥ 346,068
500,652
190,745
14,03756,187
1,481,555¥2,589,246¥ 354,661
580,945
192,977
8,959
74,842
1,115,047¥2,327,432¥

50,08545,958
10,735
1,032
2,306
–
¥ 110,119¥¥–
36,902––––36,902¥

14,98429,908
6,963
72
1,104
–
53,033¥¥¥¥58,19551,291
10,098
1,264
4,692
–
¥ 125,543¥

25,194514––
10,159–35,86864,26857,083
14,543606
2,269–¥ 138,770

1. Business segments are divided by the type and nature of the product.
2. Main products of each segment are as follows:
Fiscal 2010
Automobile.................................. Vehicles, diesel and gasoline engines, car air-conditioning compressors, foundry parts, electronics components
Materials Handling Equipment..... Lift trucks, warehouse trucks, automated storage and retrieval systems, aerial work platforms
Logistics...................................... Land transportation services, cash collection and delivery and cash proceeds management services, data storage,
management, collection and delivery services
Textile Machinery......................... Weaving machinery, spinning machinery
Others......................................... Semiconductor package substrates
Fiscal 2009
Automobile.................................. Vehicles, diesel and gasoline engines, car air-conditioning compressors, foundry parts, electronics components
Materials Handling Equipment..... Lift trucks, warehouse trucks, automated storage and retrieval systems, aerial work platforms
Logistics...................................... Land transportation services, cash collection and delivery and cash proceeds management services, data storage,
management, collection and delivery services
Textile Machinery.......................... Weaving machinery, spinning machinery
Others......................................... Semiconductor package substrates
3. Corporate assets included in corporate or elimination of inter-segment transactions consist mainly of cash and cash equivalents, short-term
investments and investments in securities held by the Company. Corporate assets were ¥1,536,600 million and ¥1,182,062 million as of March
31, 2010 and 2009, respectively.
4. Effective from the consolidated fiscal year ended March 31, 2009, the Company applies Practical Issues Task Force No. 18 “Practical Solution
on Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial Statements” issued on May 17, 2006 by
the Accounting Standards Board of Japan. As a result, operating income increased by ¥2,197 million in the Materials Handling Equipment
Segment.
5. In accordance with the revision of the Corporation Tax Act of Japan, Toyota Industries revised the useful lives of tangible assets and appliedthem from the consolidated fiscal year ended March 31, 2009. As a result, operating income decreased by ¥5,008 million in the Automobile
Segment, ¥388 million in the Materials Handling Equipment Segment, ¥3 million in the Logistics Segment and ¥424 million in the Others
Segment.

Toyota Industries Report 201071

Financial Section

Notes to Consolidated Financial Statements(2) Geographical segments

As of and for the years ended March 31, 2010 and 2009:
Millions of yen

Sales:
Japan
Outside customer sales
Inter-segment transactions

2010

2009

¥ 995,264
80,763
1,076,027¥1,066,635
93,3891,160,024

137,038967
138,005

193,884
1,875
195,760

200,556
4,243
204,800

272,108
6,087
278,195

44,9104,642
49,552
1,468,386(90,617)¥1,377,769

51,624
6,139
57,763
1,691,744(107,491)¥1,584,252¥1,046,048
139,480
211,932
46,992(88,687)¥1,355,767¥1,161,639
200,496
282,153
55,675(109,089)¥1,590,874¥¥

North America
Outside customer sales
Inter-segment transactions
EuropeOutside customer sales
Inter-segment transactions
Others
Outside customer sales
Inter-segment transactions
Subtotal
Elimination of inter-segment transactions
Total
Operating costs and expenses:
Japan
North America
EuropeOthersElimination of inter-segment transactions
Total
Operating income (loss):Japan
North America
EuropeOthersElimination of inter-segment transactions
Total
Assets:Japan
North America
EuropeOthersCorporate or elimination of inter-segment transactions
Total

¥

29,979(1,474)(7,131)
2,560(1,930)22,002¥ 787,274
127,491
296,827
69,895
1,307,757¥2,589,246¥(1,614)(4,736)(3,957)
2,087
1,598(6,621)¥ 821,724
140,847
350,298
61,314
953,247¥2,327,432

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 2010
North America ......................................................... U.S.A., Canada
Europe .................................................................... Sweden, Germany, France
Others ..................................................................... Australia, China
Fiscal 2009
North America ......................................................... U.S.A., Canada
Europe .................................................................... Sweden, Germany, France
Others ..................................................................... Australia, China, Brazil
3. Corporate assets included in corporate or elimination of inter-segment transactions consist mainly of cash and cash equivalents, short-term
investments and investments in securities held by the Company. Corporate assets were ¥1,536,600 million and ¥1,182,062 million as of March
31, 2010 and 2009, respectively.
4. Effective from the consolidated fiscal year ended March 31, 2009, the Company applies Practical Issues Task Force No. 18 “Practical Solution
on Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial Statements” issued on May 17, 2006 by the
Accounting Standards Board of Japan. As a result, operating income increased by ¥729 million in North America and ¥1,467 million in Europe.
5. In accordance with the revision of the Corporation Tax Act of Japan, Toyota Industries revised the useful lives of tangible assets and appliedthem from the consolidated fiscal year ended March 31, 2009. As a result, operating income decreased by ¥5,824 million in Japan.

72

Toyota Industries Report 2010

Financial Section(3) Overseas sales

For the years ended March 31, 2010 and 2009:
Millions of yen

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

2010

2009

¥ 137,260
221,054
102,630¥ 460,944¥1,377,769¥ 192,678
302,812130,503¥ 625,994¥1,584,252

10.0%
16.0
7.5
33.5%

12.2%
19.1
8.2
39.5%

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 2010
North America ......................................................... U.S.A., Canada
Europe .................................................................... Germany, France, U.K.
Others ..................................................................... Australia, China
Fiscal 2009
North America ......................................................... U.S.A., Canada
Europe .................................................................... Germany, France, Russia
Others ..................................................................... China, Australia, Brazil
3. Overseas sales are sales of the Company and its consolidated subsidiaries in countries and areas other than Japan.

25. Related party transactions:
The following transactions were carried out with related parties:(1) Sales of goods and services for the years ended March 31, 2010 and 2009 were as follows:
Millions of yen

Toyota Motor Corporation

2010¥599,217

2009¥563,665

Toyota Motor Corporation held 24.61% of the Company’s voting rights as of March 31, 2010. As for the sales of automobiles and engines, etc.,
the Company offers prices on such products based on their overall costs and negotiates conditions for each fiscal year, as per conditions on
arm’s-length transactions. The above transactions are carried out based on commercial terms and conditions. Transaction amounts exclude
consumption taxes.

(2) Purchase of goods for the years ended March 31, 2010 and 2009 were as follows:
Purchase of goods:

Millions of yen

Toyota Motor Corporation

2010¥435,232

2009¥405,120

As for the purchase of parts of automobiles and engines, etc., the Company negotiates conditions for each fiscal year, based on offered prices
on such products, as per conditions on arm’s-length transactions. The above transactions are carried out based on commercial terms andconditions. Transaction amounts exclude consumption taxes.

(3) Outstanding balances arising from sale/purchase of goods/services as of March 31, 2010 and 2009 are
as follows:
Receivables from a related party:

Millions of yen

Toyota Motor Corporation

2010¥32,841

2009¥22,692

Payables to a related party:
Millions of yen

Toyota Motor Corporation

2010¥47,2122009¥22,678

The balance as of March 31, 2010 and 2009 includes consumption taxes.

Toyota Industries Report 201073

Financial Section

Notes to Consolidated Financial Statements

26. Net loss per share (EPS):
The basis of calculation for net loss per share basic and net income per share diluted is as follows:
Millions of yen

Net loss per share — basic:
Net loss
Net income not attributable to common shareholders(bonuses for directors and statutory auditors that are paid through appropriation)
Net loss attributable to common shareholders
Weighted­-average shares (thousand)Net loss per share — basic (exact yen amounts)
Net loss per share — diluted:
Weighted-average shares for diluted computation (thousand)Net loss per share — diluted (exact yen amounts)

2010

2009

¥ (26,273)–¥ (32,767)–(26,273)
311,573¥ (84.33)(32,767)
311,584¥ (105.16)

–
–

¥

0
–

¥

Amounts for net loss per share—diluted are not shown due to being negative numbers.

27. Net assets per share:
The basis of calculation for net assets per share is as follows:
Millions of yen

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

2010

2009

¥1,104,929¥ 977,670

1,720
46,9781,056,230
311,570¥ 3,390.02

1,224
45,715
930,730
311,577¥ 2,987.16

28. Cash and cash flows:
The relationship between the accounts in the consolidated balance sheets and the remaining balance of cash and cash equivalents as of March
31, 2010 and 2009 are as follows:
Millions of yen

Cash and deposits
Deposits with a maturity of over three months to one year
Short-term investments (securities) which have an original maturity within three months
Cash and deposits for business engaged in collection and delivery
Cash and cash equivalents

74

Toyota Industries Report 2010

2010
¥287,965(30)
71,391(41,736)¥317,590

2009¥169,743(21)
58,838(40,549)¥188,011

Financial Section

Report of Independent Auditors

Toyota Industries Report 201075

Financial Section

Further DetailFor further information, please visit our Investor Relations Website. (http://www.toyota-industries.com/ir/)76

Toyota Industries Report 2010

Financial Section

Investor Information(As of March 31, 2010)

Corporate Head Office

Number of Shareholders

TOYOTA INDUSTRIES CORPORATION

22,1432-1, Toyoda-cho, Kariya-shi, Aichi, 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, 100-6532, Japan

November 18, 1926

Common Stock

Transfer Agent
Special Account Management Institution

No par value

Mitsubishi UFJ Trust and Banking Corporation
1-4-5, Marunouchi, Chiyoda-ku, Tokyo, 100-8212, Japan

Authorized: 1,100,000,000 shares
Issued:325,840,640 shares

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

Major Shareholders (Top 10)(As of March 31, 2010)

Toyota Motor Corporation

Number of
Shares Held (Thousands)

Percentage ofTotal Shares in Issue (%)

76,60023.51

DENSO Corporation

29,647

9.10

Third Avenue Fund

17,400

5.34

Towa Real Estate Co., Ltd.

15,697

4.82

The Master Trust Bank of Japan, Ltd. (Trust Account)

9,160

2.81

Toyota Tsusho Corporation

8,289

2.54

Japan Trustee Services Bank, Ltd. (Trust Account)

6,814

2.09

Nippon Life Insurance Company

6,735

2.07

Aisin Seiki Co., Ltd.

6,578

2.02

The National Mutual Insurance Federation of Agricultural Cooperatives
Total

6,097

1.87

183,022

56.17

Notes:
1. Toyota Industries Corporation also holds 14,269 thousand shares of treasury stock but is excluded from the above list.
2. Shares held for the purpose of trust services of respective banks are as follows:
The Master Trust Bank of Japan, Ltd. (Trust Account)9,160 (Thousands)
Japan Trustee Services Bank, Ltd. (Trust Account)
6,814

Distribution of Shares(As of March 31, 2010)

0.2%
4.4%
8.3%

20.4%

20.7%

46.0%

Japanese corporate entities
Japanese financial institutions
Foreign corporate entities and others
Individuals, etc.
Treasury stock
Japanese brokerages

Toyota Industries Report 201077