ANNUAL REPORT 2002

2-1, Toyoda-cho, Kariya-shi, Aichi-ken 448-8671, Japan
Telephone: +81-(0)566-22-2511 Facsimile: +81-(0)566-27-5650
URL: http://www.toyota-industries.com/

ANNUAL REPORT 2002
Year ended March 31, 2002

This annual report is printed onrecycled paper using soy ink to minimize
the impact on the environment.
Printed in Japan

Profile
What is now Toyota Industries Corporation (“Toyota Industries”) was founded in
1926 as Toyoda Automatic Loom Works, Ltd. by the renowned Japanese inventor
Sakichi Toyoda to manufacture automatic looms. The enterprise proceeded over
the years to diversify into such fields as automobiles, forklift trucks and electronics.

Contents

In line with its strategy of globalization, Toyota Industries now has production
facilities in Europe, North America and other regions.

Financial Highlights

1

At a Glance2

To Our Shareholders

4

Automobile, which comprises the vehicle (automobile assembly), engine and car

Toyota Industries in Focus

11

air-conditioning compressor businesses; Materials Handling Equipment, which

Review of Operations

37

specializes in forklift trucks and other materials handling equipment; Textile

Financial Section

41

Machinery, which covers the spinning and weaving machinery businesses; andToyota Industries Close-up

81

Others, which includes electronics and other businesses. Each of these segments

The business universe of Toyota Industries consists of four segments:

already has or is building a secure footing in its particular fields. The Car Air-

Major Developments
90

Conditioning Compressor and Materials Handling Equipment businesses currently

92

make up the mainstays of Toyota Industries’ operations, while the Electronics

Directors and Corporate Auditors 93

Business is well positioned to develop into the core of its future operations.

in Toyota Industries’ History
Corporate Organization

Corporate Data

94

We aim to develop technological and market synergies among our various

Investor Information

96

businesses in order to produce added value in terms of overall performance.

Cautionary Statement with Respect to Forward-Looking Statements
This annual report contains projections and other forward-looking statements that involve risks and uncertainties.
Such projections and forward-looking statements are based on the current expectations and estimates of Toyota
Industries Corporation and its Group companies regarding their plans, outlook, strategies and results for the future. Allsuch projections and forward-looking statements are based on management’s assumptions and beliefs derived fromthe information available to it at the time of producing this report and are not guarantees of future performance. These
projections and forward-looking statements are subject to change without notice, and Toyota Industries Corporationand its Group companies will not necessarily inform you of such changes. Therefore, it is advised that you should not
rely solely upon these projections and forward-looking statements in making your investment decisions. You should
also be aware that certain risks and uncertainties could cause the actual results of Toyota Industries Corporation and
its Group companies to differ materially from any projections or forward-looking statements discussed in this report.
These risks and uncertainties include, but are not limited to, the following:

The cover of this annual report shows
the silhouettes of Toyota Industries’
main products. From left to right:
7SEU compressor, 1CD diesel engine,
TOYOTA’s small car Vitz (Yaris),
GENEO (7FG/D) internal combustion
counterbalanced forklift truck,
BT REFLEX AC reach truck,
JAT610 air-jet loom,
and low-temperature polysilicon
TFT-LCDs (manufactured by ST-LCD).

i) Domestic and overseas economic conditions, particularly levels of consumer spending, demand for our products
and private sector capital expenditureii) Adverse changes in laws and regulations, such as trade restrictions and tariffs, or stricter safety or emissions
regulations, resulting in higher costs and/or sales restrictionsiii) Currency exchange rate fluctuations, notably involving yen, U.S. dollars, Asian currencies and the euro—thecurrencies in which Toyota Industries Corporation and its Group companies have holdings and use to conduct theirinternational businessiv) Fluctuations in market prices of securities in which Toyota Industries Corporation and its Group companies havesubstantial holdingsv) The ability of Toyota Industries Corporation and its Group companies to maintain their strength in many productdevelopment and geographical areas, through such means as new product development and launches in highly
competitive markets characterized by continual new product introductions, rapid technological advances andfluctuations in demandvi) Effects of natural disasters, terrorist activities or warvii) Other factors such as greater price competition in Asia, North America and Europe resulting from industry
overcapacity or other factors; higher fuel prices; labor or other constraints on the ability of Toyota Industries
Corporation and its Group companies to restructure their business; work stoppages at their or key supplier facilities;
and the discovery of defects in their products resulting in delays in new product launches, recall campaigns,
increased warranty costs or litigation.

Financial Highlights
Toyota Industries Corporation
Years ended March 31, 2002 and 2001

Thousands of
U.S. dollars

Millions of yen

2002

2001

% change2002¥ 980,163¥ 767,383

Operating income

46,33047,304(2.1)

347,692

Income before income taxes

47,86638,22025.2

359,220

Net income

27,311

22,63720.6

204,961

Depreciation and amortization

55,17446,45418.8

414,064

Capital expenditures

88,320127,273(30.6)

662,814

Research and development expenses

29,98526,19614.5

225,028

Net income — basic

87.28

75.90

15.0

0.66

Net income — diluted

78.26

67.77

15.5

0.59

Cash dividends

19.00

17.00

11.8

0.14

¥1,770,401¥1,869,642(5.3)%$13,286,311

Shareholders’ equity

878,812951,298(7.6)

6,595,212

Number of employees

23,05621,118

9.2

For The YearNet sales

27.7 %$ 7,355,820

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

Note: U.S. dollar amounts have been translated from yen, for convenience only, at the rate of ¥133.25 = US$1, the approximate exchange rate on March 29, 2002.

Net Sales

Net Income

Total Assets

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

1,000

30

2,000

1,000

800

800
1,500
20

600

600
1,000
400

400
10
500

200

0
FY

200

98 99 00 01 02

0
FY

98 99 00 01 02

0
FY

98 99 00 01 02

TOYOTA INDUSTRIES CORPORATION

0
FY

98 99 00 01 02

ANNUAL REPORT 20021

At a Glance
Toyota Industries has been and will be aggressively switching its focus from the Textile Machinery Segment, the business uponwhich the Company was founded, to more diverse sectors. These include the Automobile Segment, comprising the vehicle(automobile assembly), engine and car air-conditioning compressor businesses, and the Materials Handling Equipment Segment,
which specializes in forklift trucks and other materials handling equipment. The Others Segment includes the Electronics
Business, which we expect will be the main driving force of future growth.
Essentially, Toyota Industries is a conglomerate focused on a variety of core businesses. We aim to enhance the value of theCompany as a whole by exploiting synergies among the key technologies and markets cultivated by each business division.
Note: Segment net sales figures do not include intersegment transactions. However, segment operating income figures do include operating income arising fromintersegment transactions.

Automobile Segment

Materials Handling Equipment Segment

The Automobile Segment, comprising vehicles (automobile
assembly), engines, car air-conditioning compressors andother businesses (including foundry parts for engines andelectronic components for automobiles), currently accounts
for 57.5% of consolidated net sales. Our Vehicle Businessproduces four models: Vitz (Yaris overseas), a compact car
popular in Japan and Europe; RAV4; bB Open Deck; andSprinter Carib (Corolla Wagon overseas. Discontinued in thefirst half of fiscal 2003). Our Engine Business produces morethan ten engine models, including the 1CD and 1HD diesel
engines and the 1FZ, 5E and 2UZ gasoline engines. Our Car
Air-Conditioning Compressor Business develops andproduces various types of compressors, including swash platecompressors with fixed displacement, swash platecompressors with continuous variable displacement, andscroll-type compressors. We supply these products to theworld’s leading auto manufacturers through DENSO
Corporation.
Net sales of the Automobile Segment for fiscal 2002
totaled ¥563.6 billion. Operating income was ¥29.0 billion.

The Materials Handling Equipment Segment produces andmarkets the GENEO (7FG/D overseas) internal combustion
counterbalanced forklift truck, the GENEO-B (7FB overseas)
electric counterbalanced forklift truck, automated storage
and retrieval systems, and automatic guided vehicle systems.
In June 2000, we acquired BT Industries AB (“BT Industries”),
a leading warehouse truck company based in Sweden. This
expanded our product lineup. In April 2001, we absorbed
Toyota Motor Corporation’s Industrial Equipment Sales
Division with a view to accelerating our responses to market
needs.
Net sales of the Materials Handling Equipment Segment
for fiscal 2002 rose to ¥353.0 billion as a result of theconsolidation of BT Industries. Operating income was ¥13.4
billion.

GENEO-B (7FB15)

BT REFLEX AC
Reach Truck

Vitz (Yaris)
1CD Diesel Engine
Rack Sorter P
Automated Storageand Retrieval System(Pallet Type)

7SEU16 Compressor
Business/Operation

Products

Business/Operation

Products

VehiclePassenger vehicles

Industrial Vehicle

Counterbalanced forklift trucks

EngineDiesel engines

Warehouse trucks , etc.

Gasoline engines, etc.
Car Air-Conditioning
Compressor

Car air-conditioning compressors, etc.

OthersElectronic equipment for automobiles
Foundry parts for automobiles, etc.

2

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

Materials Handling
SystemAutomated storage and retrieval systems
Automatic guided vehicle systems, etc.

Percentage of Net Sales

3.1%

3.4%

36.0%

57.5%
Automobile
Materials Handling Equipment
Textile Machinery
OthersTextile Machinery Segment

Others Segment

The Textile Machinery Segment is engaged in the
manufacture and sales of spinning and weaving machinery.
The Spinning Machinery Business produces ring spinning
frames, roving frames, drawing frames and combing machines.
The Weaving Machinery Business manufactures air-jet looms,
water-jet looms and preparatory machinery for weaving, suchas sizing machines and automatic drawing-in machines.
While sales of spinning machinery for fiscal 2002 increased
over fiscal 2001, sales of weaving machinery decreased. Net
sales of the Textile Machinery Segment totaled ¥30.7 billion.
Despite concerted efforts to streamline management, thisdecrease in sales resulted in an operating loss of ¥0.4 billion.
During the first three months of 2002, we received a large
order for a total of some 3,900 air-jet looms from a group of
textile manufacturers in Jiangsu Province, China. These sales
will be included in fiscal 2003, and we therefore expect salesof our Weaving Machinery Business to show a substantial
increase.

The Others Segment comprises businesses that we enteredcomparatively recently. Although our operations in thesefields are still relatively limited, we expect them to become akey pillar of Toyota Industries in the future. ST Liquid Crystal
Display Corp. (“ST-LCD”)*, a 50-50 joint venture with Sony
Corporation, forms the core of this new business sphere. In
April 1999, ST-LCD began production of low-temperaturepolysilicon TFT-LCDs, a next-generation product. Also in thissegment, TIBC Corporation, a joint venture with Ibiden Co.,
Ltd., began production of ball grid array (BGA) plastic
package substrates for IC chipsets, and flexible printed circuit(FPC) substrates for smart cards in April 1999. This segment
also includes the manufacture and sales of press dies andproduction equipment.
Net sales of the Others Segment for fiscal 2002 totaled¥32.8 billion. Operating income was ¥4.5 billion.
* As ST-LCD is an affiliate, its sales and operating income are not included in the
consolidated figures, but are accounted for by the equity method.

RX240NEW Ring Spinning Frame

Low-Temperature
Polysilicon TFT-LCDs

JAT610 Air-Jet Loom

Plastic Package Substrates

Business/Operation

Products

Business/Operation

Products

Spinning Machinery

Ring spinning frames

ST Liquid Crystal
Display Corp.

Low-temperature polysilicon TFT-LCDs

TIBC Corporation

Ball grid array (BGA) plastic package
substrates for IC chipsets

Roving frames
Drawing frames, etc.
Weaving Machinery

Air-jet looms

Flexible printed circuit (FPC) substrates for
smart cards

Water-jet looms
Sizing machines, etc.

OthersPress dies, etc.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 20023

To Our Shareholders

Akira Yokoi

Tadashi Ishikawa

ChairmanPresident

In November 2001, Toyota Industries Corporation (“Toyota Industries”) celebrated its 75th
anniversary. Looking back, we feel both gratitude and pride. Gratitude for the support wehave received over the years from our shareholders, customers, local communities andemployees. Pride in our evolution from a specialized manufacturer of automatic looms into an
enterprise with a wide and varied business universe. To reflect this diversification and makethe width of our activities more clearly recognizable, in August 2001 we changed the name of
the Company from Toyoda Automatic Loom Works to Toyota Industries Corporation. Looking
forward, our corporate vision is as clear as our new name is apt.

4

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

Excellent Performance Despite Adverse Environment
For fiscal 2002, ended March 31, 2002, Toyota Industries posted consolidated net income of ¥27.3 billion (US$205.0
million) on consolidated net sales of ¥980.2 billion (US$7,355.8 million), up 20.6% and 27.7%, respectively, over fiscal
2001. Both these figures marked record highs for a second consecutive year. However, consolidated operating
income decreased by 2.1% to ¥46.3 billion (US$347.7 million).

Slowdown of the World Economy

All Segments in Good ShapeOur results were all the more remarkable given the

Although the performance of Toyota Industries’

adverse business environment prevailing in the fiscal

business segments varied, most increased their net

year. The growth of the Japanese economy was anemic,

sales over fiscal 2001 and maintained their operatingwith further signs of deflation, and the government

incomes at the fiscal 2001 level.

restricted in its policy options due to its huge fiscal

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

deficit. Expectations of radical economic structural andfiscal reforms by the government were raised but not
met. The U.S. economy, which had been robust foralmost a decade, slowed consequent to the bursting ofAutomobile Segment

the information technology (IT) “bubble” and the

Net sales totaled ¥563.6 billion (US$4,229.6 million),

terrorist attacks on New York and Washington.

up 23.2% over fiscal 2001 and accounting for 57.5% of

Economic growth in Europe and Asia also slowed as a

total net sales. The increase was due mainly to a rise in

result of the downturn in the IT industry.

sales of car air-conditioning compressors and the fact

Despite the unfavorable business environment, wethat Toyota Motor Corporation (“TMC”) changed its

were able to improve on the consolidated results ofpurchasing policy and started charging for engines

fiscal 2001 because we succeeded in implementing aand other parts for automobiles we assemble that had

clearly defined strategy that exploited our competitive

previously been supplied free. Operating income wasstrengths in each segment and in making further¥29.0 billion (US$217.3 million), up 1.5%.

significant cost reductions. The consolidation of thefinancial results of BT Industries AB (“BT Industries”) for

Materials Handling Equipment Segment

the full year and a weakening of the yen also worked

Net sales totaled ¥353.0 billion (US$2,649.5 million),to our advantage.

an increase of 49.3% over fiscal 2001. Operating

Note: U.S. dollar amounts have been translated from yen, forconvenience only, at the rate of ¥133.25=US$1, theapproximate exchange rate on the Tokyo Foreign Exchange
Market on March 29, 2002.

income was ¥13.4 billion (US$100.3 million), down
8.1%, due mainly to a one-time amortization of
goodwill following the transfer of TMC’s Industrial
Equipment Sales Division to Toyota Industries in April
2001. The increase in sales reflected two majorchanges. In June 2000, Toyota Industries acquired BT
Industries, a leading warehouse truck manufacturer.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

5

To Our Shareholders

BT Industries’ sales were consolidated in Toyota
Industries’ results for the full fiscal year, whereas they

Achievements in Fiscal 2002

were consolidated only for the second half of fiscal

Business Integration

2001. The second was the integration of TMC’s

A key motivation for the absorption of TMC’s Industrial

Industrial Equipment Sales Division in April 2001,

Equipment Sales Division was a strong will towhich increased net sales by approximately ¥27

strengthen the global competitiveness of our Materials

billion (US$202 million).

Handling Equipment Segment, one of our corebusinesses. Toyota Industries now has fullTextile Machinery Segment

responsibility for the development, manufacture, sales

Net sales totaled ¥30.7 billion (US$230.4 million), aand marketing of all TOYOTA-brand industrial

decrease of 7.6% from fiscal 2001. While the Spinningequipment, centered on forklift trucks. The integration

Machinery Business achieved better year-on-yearof development and manufacturing expertise withresults because a sales increase in Bangladesh

strong sales and marketing capabilities should makeoutweighed decreased exports to Uzbekistan, thefor more flexible management and faster decision-

Weaving Machinery Business suffered from decreases

making in response to changes in the market.

in sales of air-jet looms in South Korea, Taiwan,

In May 2001, Toyota Industries and DENSO

Indonesia and China. The overall result was an

Corporation (“DENSO”) agreed to integrate theiroperating loss of ¥0.4 billion (US$2.9 million). In a very

production of car air-conditioning compressors. Toyota

encouraging sign for fiscal 2003, approximately 70

Industries is taking over production of car air-textile manufacturers in Wujiang, Jiangsu Province,

conditioning compressors at DENSO’s Toyohashi Plant

China, had placed orders for a total of more than 3,900

in Japan. Overseas, production will be shared between

air-jet looms by the end of March 2002. These sales

the two companies on a country-by-country basis. All

will be included in fiscal 2003.

our car air-conditioning compressors will continue tobe supplied to DENSO for marketing to major

Others Segmentautomakers worldwide.

Net sales totaled ¥32.8 billion (US$246.3 million),
down 18.0% from fiscal 2001. The global IT slump led

Cost Reduction Activities

to a decrease in the sales of our subsidiary, TIBC

Toyota Industries embarked on an ambitious

Corporation (“TIBC”). Sales of press dies andthree-year cost reduction program to be implemented

production equipment also dipped. Operating income

throughout the Company starting April 2001. We

was ¥4.5 billion (US$33.6 million), an increase of 2.7%.

achieved most of the objectives in the first year, i.e.

Improved profitability in businesses other than thefiscal 2002. We established a special project team inElectronics Business in this segment made up foreach business division to ensure that our costdecreased sales by TIBC. Meanwhile, ST Liquid Crystal

reduction activities were systematic and thorough. As

Display Corp. (“ST-LCD”), which is our affiliate and not

well as enhancing our ongoing VE (Value Engineering)consolidated but is accounted for by the equity

and VA (Value Analysis) activities, we reduced general

method in Toyota Industries’ consolidated financial

expenses and head office fixed costs, and sought toresults, was also directly hit by the high-tech sector

optimize our procurement of materials andcollapse, but maintained its sales and profitability atcomponents globally. Some more difficult tasks

the same level as fiscal 2001.

6

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

remain, and tackling them will be a priority for thesuch criteria as return on assets and cash flows, as wellsecond year of the program.

as by levels of sales and operating income. The effectsof the business integration and the introduction of the

Exploiting IT

in-house company system are manifest in our

The exploitation of the latest advances in IT is one ofachievement of a 40.6% share of the Japanese forklift

our important strategic objectives. We believe that thetruck market in calendar 2001, a record high andpotential impact of IT on competitiveness will bemarking a third successive year of market shares above

significant. Using IT, we are overhauling our traditional40%.

way of doing business to accelerate management
processes, reduce costs and improve productivity.

Reorganization of the Headquarters

We installed three-dimensional CAD (Computer

In January 2002, we embarked on a reorganization of

Aided Design) systems throughout the Company withthe headquarters with the aim of strengthening its

a view to shortening lead-times and further improving

roles in acting as the springboard for corporate growth,

productivity in our development and production

and in creating new values through an organic

departments. Thanks to the introduction of V-Commcombination of technologies and markets generated(Virtual & Visual Communication System), the lead-by our diverse business universe.

time of the bB Open Deck, marketed in June 2001, wasBased on its key functions, the headquarters was

reduced by 30%. We are pushing ahead with thedivided into the Corporate Center, which is responsible

introduction of ERP (Enterprise Resource Planning)for the strategy and administration of the wholesystems to facilitate improvements in overall

company, and the Business Support Center, which

management and to allow swifter decision-making

provides support and services to divisions andthrough universal access to a unified management

departments. This partition clarified the roles of thedatabase. We are gradually harnessing ERP to upgrade

headquarters, and we believe it led to improved

our accounting, procurement, personnel andbusiness efficiency and faster decision-making. We also

production management.

established specialized departments such as theBusiness Planning Department, which is in charge ofPartial Adoption of
In-House Company Systemgenerating ideas for the creation of new products andTaking advantage of TMC’s transfer of its Industrial

and the Technical Planning Department, which unifies

Equipment Sales Division to Toyota Industries in April

and administers our diverse technologies. We also

2001, we created TOYOTA Material Handling Company

strengthened those functions where the headquarters(“TMHC”) as a uniquely independent corporate entity

had not previously played an adequate role, such as

within Toyota Industries. The purpose of this move is tothe management of technologies and theachieve swifter decision-making in the Materials

development of personnel specialized in the Toyota

Handling Equipment Segment so that it can better

Production System.

services that may develop into future business pillars,cope with ever-changing market trends and survive

To coincide with the reorganization, we set out toescalating global mega-competition. TMHC, thoughchange the mind-set of our employees, and laid down

not legally incorporated, has its own highly

five key values as an action guide for them. These

autonomous management and will be evaluated onvalues are detailed on page 14.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

7

To Our Shareholders

Entering the Aftermarket for
Car Air-Conditioning Compressors
In July 2001, Toyota Industries established ACTISManufacturing, Ltd. LLC (“ACTIS”) in Grapevine, Texas,
as a joint venture with DENSO and Toyota Tsusho
Corporation. ACTIS, a remanufacturer of car airconditioning compressors for the North American
market, started production in March 2002. The
company was created to cope with the rising demand
for remanufactured compressors, itself a response tosocial and environmental needs for more efficientutilization of automotive part resources. Armed with
our long-accumulated know-how in production
technologies and quality control, ACTIS intends toreinforce its competitiveness in the remanufactured

Tadashi Ishikawa
President

compressor aftermarket. In February 2002, TD
Deutsche Klimakompressor GmbH (“TDDK”), ourfacilities. Another new product in the Materials

European base for car air-conditioning compressors,

Handling Equipment Segment is a new version of thealso commenced the remanufacture of car air-High-Pick Lift, an electric order picking truck for loads

conditioning compressors.

of 0.5 to 1.5 tons, introduced in October 2001. The newWith respect to the value chain, Toyota Industries

model complements our warehouse equipment lineup,

will expand its car air-conditioning compressor

allowing us to provide materials handling solutions

operations by strengthening the aftermarket business

fine-tuned to the diverse needs of customers. Both theand related services, and providing higher customer

Rail-Less Partner Rack and the High-Pick Lift aresatisfaction.

available in Japan only.
During the fiscal year under review, BT Industries

New Products

also launched several new products, including

Toyota Industries is committed to developing new

warehouse trucks, in the European and Northproducts that accurately reflect market needs andAmerican markets.

satisfy customers. During fiscal 2002, we continued todevelop, manufacture and market new products thatof the TOYOTA RAV4, a compact SUV. Our output isare fully in tune with the needs of our customers.

exported to North America and Europe. In June 2001, we

Some of the following may become mainstays ofbegan production of the TOYOTA bB Open Deck. With

Toyota Industries’ future lineup.

such distinctive features as a rear open deck, the bB

In June 2001, TMHC marketed the Rail-Less Partner
Rack, a “rail-less” addition to the Mobile Rack lineup

8

In April 2001, our Vehicle Division began production

Open Deck appeals to those who favor an outdoor,
active lifestyle. It is available in Japan only.

launched in July 2000. Capitalizing on the unique

The Compressor Division launched the 5SE12, atechnology developed for automatic guided vehicle

compact, lightweight compressor with one-way swash

systems, the product uses electromagnetic guidance,

plate and continuous variable displacement. The 5SE12

rather than rails, to move shelves around warehousedelivers excellent fuel efficiency and acceleration by

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

controlling displacement via sensors that monitor the

manufacture of materials handling equipment such as

operating environment.

forklift trucks and warehouse equipment. ThroughIn June 2001, our Technology Development Center

efficient allocation of management resources, we willdeveloped and launched the 1.5kW DC-AC inverter forwork to turn around Aichi’s performance as well as

the TOYOTA Estima Hybrid. This product increases the

expand our shareholder value.

recreational- and business-use features of a hybrid
vehicle.
headquartered in the U.S., our Compressor Division

Medium-Term Management
Vision for a Prosperous Future

jointly developed a next-generation dry vacuum

Toyota Industries has strategies for both the short andpump for application in semiconductor processing

medium term. In May 2001, we unveiled our medium-

equipment, and started marketing the product interm vision for growth, which targets consolidated net

October 2001. The pump is distinguished by its

sales of more than ¥1 trillion and consolidated

reliability, compactness, light weight, high throughput,

ordinary income of ¥80 billion by fiscal 2006. To makequiet operation, clean vacuum and energy efficiency.

this a reality, we intend to allocate significant

Together with Applied Materials Inc.,

management resources to the Materials Handling

Capital and Business
Collaboration

Equipment Segment and Car Air-Conditioning

In May 2002, following the conclusion of apromote new technologies and business areas thatcomprehensive agreement on capital and businesswill form the core of our future operations, including

collaboration between Toyota Industries and Aichi

the Electronics Business. We will take actions to secure

Corporation (“Aichi”), Aichi made an allocation of new

our global prominence, maintain a high standard of

shares to Toyota Industries. As a result, Toyota

quality control, engage in cost reduction activities,

Industries now holds 34% of Aichi’s outstanding

revolutionize business procedures through utilization

shares. We also obtained a warrant, an option that ifof IT, and focus on the development of personnel with

exercised in May 2003 will raise our holding to 51%. In

specialized knowledge of the Toyota Production

the future, we intend to include Aichi in our network of

System, which is a source of our competitive edge.

Compressor Business in order to further reinforce theiralready high competitive advantage. We will also

subsidiaries once we hold a majority of its shares.
Although currently suffering from poor businessperformance due to the deteriorating market
environment, Aichi is a leading manufacturer of aerial
lift equipment, with a market share of more than 70%
in Japan. Toyota Industries will provide Aichi withcapital, production technology and production control
know-how. In time, we plan to transfer TMHC’s
manufacturing operations for special-purpose
vehicles, including aerial lift equipment, to Aichi, andmake it into a specialized manufacturer of thesevehicles. TMHC will in turn concentrate on theBusiness Outlook for Fiscal 2003
The future course of the world economy is even moreunpredictable than ever. The slowdown in the IT field
and the aftermath of the terrorist attacks on the U.S. in
September 2001 have created great uncertainty. We
expect that in fiscal 2003, ending March 31, 2003,
Toyota Industries will face increasingly challenging
economic conditions. Though showing signs ofrecovery, our electronics-related businesses will bechallenged to fully counter the influences of the global

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

9

To Our Shareholders

IT collapse. We are also concerned that our Materials

implementation of ambitious strategies with specificHandling Equipment Segment will suffer especiallygoals in each business area, and by streamlining

from its vulnerability to lower demand in the North

management. Concurrently, as a responsible corporate

American market. The Vehicle Business will facecitizen, we emphasize activities to protect the naturaldifficult times ahead as production of the Vitz (Yaris inenvironment and fulfill our other social responsibilities.

Europe), our mainstay vehicle, is likely to decrease as a

We thank all of our stakeholders, including

result of intensifying competition in the domestic

shareholders, customers, suppliers, local communities

compact car market and TMC’s full-fledged local

and employees, for their support.

production of Yaris in France. Although demand for car

Toyota Industries has achieved double-digit growth

air-conditioning compressors is expected to increase

for the past three years. Though we expect the growthin the European market, automakers are clamoring

to slow down in fiscal 2003, we believe that will be justever louder for reduced prices.

temporary. Just as high-jumpers momentarily crouch

In these circumstances, we will seek to ensure that

before starting their run-up to the bar for theour products and services are attuned to customer

maximum muscular effect, so corporations need timeneeds. We will also continue with our cost reduction

to gather strength before stepping forward to further

activities. A wider use of IT in improving management

growth. We believe fiscal 2003 will be such a year for us.

efficiency and a continued review of ourIn this annual report, we include as much information

organizational structure will be on the agenda, too.

as available at the time of publication to describe the

For fiscal 2003, we forecast consolidated net sales

direction in which the management team is trying toof ¥990 billion (US$7,429.6 million), up 1.0% over fiscal

lead Toyota Industries. We sincerely hope this report

2002, ordinary income of ¥48 billion (US$360.2

will help all stakeholders to understand where we havemillion), up 0.3%, and net income of ¥23.5 billion

come from, where we are now, and where we are going.

(US$176.4 million), down 14.0%.

As we look to secure further growth in shareholder

Note: The financial projections set forth above are based upon anumber of assumptions and estimates that, while presented withnumerical specificity and considered reasonable by us whentaken as a whole, are inherently subject to significant economic,
business, competitive, regulatory and operational uncertainties,
contingencies and risks, many of which are beyond our control.
Financial projections are necessarily speculative in nature, and it
can be expected that one or more of the assumptions underlying
the projections will prove not to be valid, and unanticipated
events and circumstances are likely to occur. Actual results willvary from the financial projections and those variations may bematerial. Consequently, this report should not be regarded as arepresentation by us or any other person that the financial
projections will be achieved. Current negative market trends inthe global economy make it particularly difficult at present topredict product demand and other related matters.

value, we respectfully request a continuation of the
support we have enjoyed to date.
July 1, 2002

Akira Yokoi
ChairmanCrouching Before Leaping
The most important aspect of our corporate mission is
to increase shareholder value. We consistently aim to
improve profitability, increase shareholder value andachieve stable corporate growth through10

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

Tadashi Ishikawa
PresidentToyota Industries in Focus
Focus 1

Reorganization of the Headquarters

12

Focus 2Five Values to Shape Our Principles and Guide Our Behavior

14

Focus 3Medium-Term Management Vision

16

Focus 4Globalization of the Materials Handling Equipment Segment

19

Focus 5

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

26

Focus 6

Electronics Business — A Key to Future Growth28

Focus 7

Research and Development Structure

30

Focus 8Harnessing the Power of Information Technology

31

Focus 9Corporate Governance32

Focus 10 Caring for the Environment

TOYOTA INDUSTRIES CORPORATION

33

ANNUAL REPORT 2002

11

Focus1

Reorganization of the Headquarters
In recent years, both the scale and speed of changes in thestrengthened those functions where the headquarters hadbusiness environment surrounding Toyota Industries,

not previously played a sufficiently satisfactory role.

including market needs and technological development, haveSpecifically, the Corporate Center sets company-wide

increased as never before. Unless we cope with the changes

management strategies, allocates management resources,

flexibly, we cannot survive in the face of unrelenting global

creates new growth businesses by moving into areas wherecompetition. It is also increasingly important to develop

we can apply our advantages, and develops management

technological and market synergies among our various

personnel. The Business Support Center provides eachbusinesses in order to create new values. As we build up ourbusiness division and the Corporate Center departments with

global business presence and advance into new businesshighly specialized expertise.

fields, it is vital that we reinforce the functions of theheadquarters, which is responsible for plotting the course of
the Company and acting as a catalyst for corporate growth.

Headquarters’ Structural Reform

In January 2002, we embarked on a reorganization of the
Corporate Center

headquarters with the aim of making full use of the strengths
generated by our diverse business universe and promoting a

Existing Headquarters

Functions that support corporate management

higher level of growth and prosperity.
Based on its key functions, the headquarters was divided

Business Support Center

into the Corporate Center, which is responsible for the

Functions that support businesses

strategy and administration of the Company as a whole, andthe Business Support Center, which provides support andDividing the existing headquarters into two functionally distinct
organizations: a “Corporate Center” and a “Business Support Center”

services to divisions and departments. As a result of thismove, we believe the role of the headquarters became clearer,
enabling improved business efficiency and faster decisionmaking. We also established new departments andStaff at the headquarters are also expected to change their
way of thinking to a strategically oriented type. Bytransforming itself into a service-oriented entity with highly
specialized expertise in order to provide optimal support andservices, the headquarters will be able to act as a unifying
force in the pursuit of clear strategic goals.
The headquarters will delegate even more authority for
day-to-day operations to the individual divisions and the inhouse company. This will enable each division to act as anautonomous entity, allowing swifter, more flexible and selfsufficient management in line with each division’s
characteristics.

12

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

Corporate Organization

Corporate Center
Board of Directors

TOYOTA Material Handling Company

Functions that support corporate
management• Formulating corporate strategy for the entire
company• Searching for and developing new businesses• Strengthening TPS (Toyota Production System),
etc.

Chairman

Textile Machinery Division
Compressor Division
Vehicle Division
Engine Division

President

Business Support Center
Functions that support businesses
This section will provide services that are
essential to the operations of business units andother departments.

Technology Development Center
Mechatronics & Engineering Sub-Division
Machinery & Tools Sub-Division

Strengthening the Rolesof the Headquarters

catalyst in producing new value and a spur to the development

As part of the recent reorganization, we have established thestrategies within the context of our latest technologicalBusiness Planning Department in the Corporate Center indevelopment and company-wide management strategies.

and execution of our medium- to long-term technologicalorder to focus our accumulated information, expertise and

The Toyota Production System (“TPS”), which was originallytechnologies on the task of continually and systematicallyformulated by Toyota Motor Corporation, also symbolizes ourgenerating ideas for the creation of new products andbasic concept of production and serves as one of theservices that may develop into future business pillars.

essential sources of our competitiveness. In order to fully

We have also set up the Technical Planning Department toestablish TPS within Toyota Industries and familiarize more

unify and administer our diverse technologies. An organic

employees with the system, we set up a specialized

combination of our technological resources will act both as adepartment within the Corporate Center.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

13

Focus2

Five Values to Shape Our Principles and Guide Our Behavior
For continuous growth and prosperity in the face ofincreasingly intense global competition, we embarked on an
administrative reform of the headquarters in January 2002,

PROFESSIONAL
E XC E L L E N C E

redefining its role and reorganizing its structure. To ensure

C U S TO M E R
O R I E N TAT I O N

that the reform takes firm root, we are taking measures tomake each and every employee aware of the true meaning of
the reform and committed to its success. To this end, we laid
down five key values as an action guide for our employees.

CHALLENGE
TO C H A N G E

G LO B A L I Z AT I O N

The Five Values
Global Perspective—
Learning from the Best in the World,
Aiming to Become the Best in the WorldTEAMWORK

The spirit of Toyota Industries’ origins can be expressed thus:“Put your heart into research and creation, constantly staying

development. In order to achieve these goals, we will work to

Welcoming New Challenges—
Unbound by Convention,
We Embrace the Challenge of Creation

become the best in the world in all of our endeavors. Taking

The acceleration of deregulation, advances in information

up every challenge, we will equip ourselves with thetechnology and the rapid progress of economic globalizationnecessary perspectives, technology, skills and proficiency inhave all served to intensify competition. Today, conventional

communication, and aim to become known as the world’s

frameworks and past experience are not always relevant.

best, both individually and as a company.

Rather, we must meet new challenges with the weapons ofahead of the times.” This means a total commitment tocreating new value and making a contribution to global

creativity and innovation. We will not confine ourselves to

Forging Partnerships with Our Customers
and Exceeding Their Expectations
Since the Company’s foundation, we have strived to put

benchmarking but strive for the ideal. We will think freshly
and with passion, and check everything with our own eyes
and with our own hands.

ourselves in the position of the customer in order to betterwe will continue to do our utmost to embody these needs,

Encouraging Professional Excellence—
Developing Our Strengths,
Thinking and Acting Responsibly

including those as yet unperceived, in our products andArmed with a full grasp of corporate policy, all individuals at

services. In order to achieve this goal, we will always ensure

Toyota Industries will develop their strengths and becomethat the basis of any idea is totally customer-oriented.

people who can stand confidently on their own feet. We will

respond to their needs. By visiting customers, listening towhat they have to say and engaging in direct communication,then think and act responsibly within our own areas ofauthority. Acting in this way will also lead to accomplishingtasks more quickly.

14

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

Encouraging Effective Teamwork—
Recognizing the Human Worth of Each
Individual and Collaborating to Achieve Goals

The Purpose of theFive Values

When we work together as a team, we can achieve what wecannot do individually. A team is a collection of individuals.
Their abilities are as different as their faces. Our subsidiaries
and affiliates, including BT Industries AB and other overseas
subsidiaries, are all part of the same team. Toyota Industries
consists of this diverse collection of people. As a team, we will

To point each employee
in the direction ofideal achievement

To encourage each
employee’s self-growth andprofessional development

To bring out thebest of ourorganizational strength

To ensure each employee
uses his or her capabilities
to the maximum

solidify our strengths. In order to generate synergy, it isimportant that we recognize the human worth of one
another and at the same time invest one another with power.
Managers will imbue team members with wisdom, courage
and a sense of opportunity. Team members will meet
managers’ expectations and empower them. We willencourage and learn from one another regardless of age,gender, nationality, position or department, forging open
relationships.
Continuous growth and prosperity
for the Company

Basic Philosophy
Toyota Industries has a basic philosophy that forms
the foundation for the Five Values. As a guide forcorporate behavior, this basic philosophy constitutes
the expressly stated beliefs of the management.

Respect for the Natural Environment

Respect for the Law

Respect for Customers

Toyota Industries is determined to comply with the letter andspirit of the law, in Japan and overseas, and to be fair andtransparent in all its dealings.

Toyota Industries conducts intensive product research andforward-looking development activities to create new value forits customers.

Respect for Others

Respect for Employees

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

Toyota Industries nurtures the inventiveness and other abilities
of its employees. It seeks to create a climate of cooperation, sothat both employees and the Company can realize their fullpotential.

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

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

15

Focus3

Medium-Term Management Vision
In May 2001, we launched our medium-term strategy forestablished TD Deutsche Klimakompressor GmbH (“TDDK”) as

growth, targeting consolidated sales of more than ¥1 trillion

a joint venture with DENSO Corporation. In April 2000, TDDKand consolidated ordinary income of ¥80 billion in fiscal 2006.

began operations at its factory in Sachsen, Germany. We now

Through consistent implementation of the strategy, we

manufacture car air-conditioning compressors in Japan, thebelieve we can expand our corporate value. As part of aU.S. and Europe. This tri-polar system allows us to stay close toconcerted push toward this goal, we reorganized thecustomers, meet their needs more precisely and reduce

functions of the headquarters in January 2002.

exchange rate risks. The proportion of cars in Europe fittedwith air-conditioning systems is expected to rise and we aim

Securing Global Leadership in
the Materials Handling Equipment andCar Air-Conditioning Compressor Fields

to make the most of this opportunity. We shall also seek to

Toyota Industries is determined to retain the No. 1 market

and the Car Air-Conditioning Compressor Business are coreshare in Japan and achieve global leadership among

operations, and serve as the driving force in the achievement

manufacturers of forklift trucks and other industrialof our medium-term corporate objectives. As we cannot

equipment. Steps already taken to achieve that goal include

expect a great increase in demand in the maturing Japanese

the acquisition of BT Industries AB (“BT Industries”) and themarket, it is vital that we expand our global presence totransfer of Toyota Motor Corporation’s (“TMC’s”) Industrial

ensure business expansion, and we shall commit resources toEquipment Sales Division to the Company. These measuresthese fields on an appropriate scale.

increase sales in the North American market.
In summary, the Materials Handling Equipment Segment

will enable swifter decision-making and more dynamic
business management in reflecting customer needs andresponding to market changes on a global scale.
We expect that our acquisition of BT Industries will bring

Fostering New Core Businesses,
Including Electronics
We intend our electronics operations, which are now

benefits of synergy. We have started to supply

comparatively small, to play an important part in our futurecounterbalanced forklift trucks to BT Industries on an OEM

growth. The opportunities in this field are substantial. The

basis. We are also distributing BT Industries’ various warehousecore of our Electronics Business includes ST Liquid Crystal

trucks not only in Japan but also in the U.S. and Europe. These

Display Corp. (“ST-LCD”), a joint venture with Sonyexchanges will be broadened to include other products. We

Corporation; TIBC Corporation (“TIBC”), a joint venture withintend to introduce our manufacturing technique, the Toyota

Ibiden Co., Ltd.; and the Technology Development Center (anProduction System (“TPS”), to BT Industries. In return, we are

in-house organization).

drawing on BT Industries’ wealth of sales know-how, in

ST-LCD manufactures low-temperature poly-Si TFT-LCDs,

particular their solution-proposal sales technique. We have

which have considerable growth potential as the next-

begun to introduce BT Industries’ fleet management program

generation LCD, while TIBC produces ball grid array (BGA)

to reinforce our sales activities in Japan. We will also work

plastic package substrates for IC chipsets. As a result of using

together in joint component purchase, technology exchange

TPS, ST-LCD’s quality levels and production volume haveand product development.

improved substantially. The bursting of the IT bubble forced

The Materials Handling Equipment Segment is striving to

ST-LCD to temporarily lower its output. However, the excellent

adopt a global perspective in monitoring changes in demand,

functionality of ST-LCD’s products, including high numericaldeveloping products that meet market needs and enhancing

aperture, high resolution and energy efficiency, is expected toservice activities in order to maximize customer satisfaction.

generate increased demand for applications in digital

To consolidate our leading international position in the car

cameras, mobile phones and personal digital assistants

air-conditioning compressor manufacturing field, we

16

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

(PDAs). To expand business in line with the medium-term

Ordinary Income(¥ Billion)
100
80
47.9

48
60

44.5

20
Over
1,000

Net Sales(¥ Billion)
980.2

1,000

990

767.4

800

600

Materials Handling Equipment

400

Car Air-Conditioning Compressor
Electronics

200

Vehicle & Engine
0
FY

Textile Machinery and Others

99

00

01

02

03

06
Targetbusiness plan, ST-LCD began a ¥75 billion capital investment

Our Vehicle Business, one of the manufacturing bases ofprogram for additional facilities in the fall of 2001. Looking

the Toyota Group’s compact cars, strives constantly to enhanceclosely and flexibly at the pattern of demand, ST-LCD plans to

the attractiveness of TOYOTA-brand cars by further improving

start operations at the new facilities and increase its

product quality and cost efficiency, making proposals for the

production capacity.

design and launch of new compact and other cars, and

TIBC also suffered from the worldwide IT slump. However,once the IT-related inventory clears, we expect TIBC to revert
to full operation.

improving production technology.
In the Engine Business, we work constantly to enhance theenvironment-friendly features of our engines without

As we believe the growth potential of the Electronics

compromising their performance, and to contribute to theBusiness in the medium to long term is promising, we see it asimprovement in the overall performance of TOYOTA-brand

one of our core businesses. We intend to allocate

cars.

management resources accordingly in anticipation of a

Our Vehicle and Engine businesses are dedicated mainly to

successful future for our LCD and other electronics-related

production for TMC. Our production is therefore dependent

businesses. We will also aggressively engage in theon TMC’s production and ordering plans. We seek toexploration and development of promising new technologies

strengthen our sales link to TMC through ceaseless quality

and businesses.

enhancement and cost-down activities. Our goal is that TMC
will entrust us with the assembly of, and employ our engines

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

capabilities to play a more active part in product development

The Vehicle (automobile assembly) and Engine businesses

for TOYOTA vehicles and engines. Our overall aim in the Vehicle

provide stable revenues for the Automobile Segment. In theand Engine businesses is to secure stable revenues through an

medium term, we aim to improve cost management and soefficient production system.

in, a wider range of models.
We are also strengthening our research and development

maintain profitability in these fields.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

17

Focus 3

Extensive Cost Reduction Campaign

In May 2002, Toyota Industries opened ”e-Lab,” ourTo survive ruthless price competition worldwide, it is essential

information technology research laboratory, as a key

to regularly market attractive products, implement sustainedorganization for the information system division as well as

cost reduction programs and reform our revenue structure. In

our R&D facility for information technology. E-Lab isApril 2001, we began an ambitious three-year cost reduction

responsible for researching digital simulation technologies

program to substantially reduce operating and other costs. A

with a view to reducing lead-times from development toproject team in each business division promotes VE (Value

manufacture to shipment. It is also involved in developing an

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

optimal network system for joint development of parts withactivities in order to achieve an even higher level of overall

suppliers, and for parts procurement.

efficiency. Measures to be taken include optimizing a systemof global procurement of materials and components,

Fostering Personnel

reducing expenses and cutting back fixed costs at the head

Toyota Industries creates and makes a wide range of

office.

products. We maintain our excellent competitiveness by
manufacturing high-quality products through efficient

Promoting a Global Presence

production. TPS serves as one of the essential sources of our

It is impossible to rely solely on the Japanese market inknow-how in maintaining efficient production andseeking further business expansion. Toyota Industries hascompetitiveness. By improving TPS and familiarizing moreestablished production bases for forklift trucks and car air-employees with the system, we can further enhance

conditioning compressors in North America and Europe. In

efficiency and competitiveness. To this end, we haveJune 2000, we also acquired BT Industries, a Swedish

established a specialized department within the Corporate

warehouse truck manufacturer, as part of our globalization

Center to foster the development of qualified personnel.

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

Maximizing Benefits of Synergy

will strive to provide our customers worldwide with superior

Throughout our long history, we have continually pushed

products, procure high-quality and price-competitive parts

forward with technological innovation, explored new markets

from the world, and engage in production close to ourand achieved substantial growth for each of our businesses.

customers.

Toyota Industries has become a conglomerate, each of whose
divisions possesses core technologies and markets. By

Harnessing the Powerof Information Technology

transcending divisional boundaries, we are taking advantage

The Internet, PCs, mobile communications and so on areof the next generation of business sectors and products, andalready having a major influence on corporate activity. We

to create added values. We believe the strategic cooperation

recognize the importance of IT as a key factor in corporate

among divisions will enhance the value of the Company as acompetitiveness, and we are accelerating its application

whole and offer great opportunities for expanded businessaccordingly. Utilizing IT, we are overhauling our traditional

operations.

of these assets to develop technologies that will be the basis

way of doing business to achieve speedier management
processes, reduction in fixed costs and increased customer
satisfaction. To date, improvement is most evident in shorterproduct lead-times and enhanced productivity among nonmanufacturing divisions.

18

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

Focus4

Globalization of the Materials Handling Equipment Segment
Toyota Industries’ Materials Handling Equipment Segment, a world leader in the production and sale of lift trucks, comprises TOYOTA
Material Handling Company (“TMHC”) and BT Industries AB (“BT Industries”). The two companies will cooperate globally as equal strategic
partners, marketing each other’s products on an OEM basis.
Competition in the materials handling equipment market is intensifying, marked by cross-border consolidation and alliances. By
assuming the industrial equipment sales and marketing operations of Toyota Motor Corporation (“TMC”) and acquiring BT Industries, we
intend to strengthen our position as a global leader distinguished by our comprehensive lineup, superior technologies and responsivenessto customer needs.

Brand Portfolio of the Materials Handling
Equipment Segment

primarily the brand names BT in Europe and other regions

The Materials Handling Equipment Segment will continue tobrand names, TMHC and BT Industries will cooperate closely

provide products under the TOYOTA and BT brands. TMHCin seeking to develop potential benefits of synergy to theuses the brand name TOYOTA L&F in Japan and Toyota

maximum.

and Raymond in North America. While maintaining their own

Industrial Equipment in other regions. BT Industries uses

TOYOTA Material Handling Company

BT Industries AB

Japanese market

European market

Non-Japanese markets

North American market

Industrial equipment made by Toyota Industries is sold in

BT Industries uses the brand names BT in Europe andJapan under the brand name of TOYOTA L&F (Logistics

other regions and Raymond in North America. BT

and Forklifts), which refers to materials handling systems

Industries also has the Cesab, Prime-Mover and Lift-Riteand industrial vehicles and equipment. Outside Japan, thebrand names used in certain areas.

signature of TOYOTA INDUSTRIAL EQUIPMENT is used.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

19

Focus 4
TOYOTA Material Handling Company
Division of Toyota Motor Sales, U.S.A., Inc., also transferred in
April 2001. We also absorbed other related operations,
including TMC’s industrial equipment sales subsidiaries in
Europe.

Operations in JapanThe forklift truck markets in advanced countries, including
Japan, are maturing, and demand therefore tends to follow
the business cycle. Calendar year 2001 saw total demand in
the domestic market increase by 2.9% over 2000 while TMHC
outperformed market demand, increasing unit sales by 3.8%
and recording a record-high market share of 40.6%. The
consolidation of manufacturing and sales operations was a
key factor in this achievement.
TMHC supplies TOYOTA-brand forklift trucks and materials
handling systems through an established sales network of 43
dealers throughout the country. To provide optimal solutions

Gearing Up for Future Growth

to customers who want higher materials handling efficiency,

In April 2001, Toyota Industries took over the industrial

we also sell warehouse trucks other than counterbalanced

equipment sales and marketing operations of TMC. From

forklift trucks. In October 2001, we marketed the fully

1956, when the first TOYOTA-brand forklift truck was launched,remodeled High-Pick Lift, an electric order picking truck for

TMC had been responsible for the sales and marketing ofloads of 0.5 to 1.5 tons.

materials handling equipment developed and manufactured

Although the Japanese forklift truck market is expected toby Toyota Industries. With the transfer, Toyota Industries

improve marginally in the second half of fiscal 2002, a fullassumed full responsibility for all materials handlingrecovery will take longer. In these circumstances, we haveequipment operations on a global basis.

embarked on a full-fledged fleet management programThis consolidation positions materials handling equipment

targeted at increasing Toyota Industries’ presence in the fleet

as a core business within the Toyota Group, and underlines

market and set up a specialized section within TMHC. In April

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

2001, we introduced BT Industries’ hand pallet trucks on ancomprehensive manufacturers in the field. The integration of

OEM basis into the Japanese market to enhance ourdevelopment and manufacturing expertise with strong sales

warehouse truck lineup. In May 2002, we started sales ofand marketing capabilities will make for more flexible

electric pallet trucks, also on an OEM basis. We will continue tomanagement, faster decision-making and strengthened

introduce BT Industries’ products step by step.

global competitiveness.

In April 2001, the TOYOTA Material Handling Customer

Consequent to the above move, the section that handles

Center opened for

TOYOTA-brand forklift trucks within the Materials Handlingbusiness. The Center,

Equipment Segment became TOYOTA Material Handling

located just east ofCompany, an in-house corporate entity within Toyota

Tokyo in Ichikawa,

Industries. TMHC acts as a virtual company with its own

markets TMHC’s

management, enabling it to operate in close line with market

products and also offerschanges. TMHC also subsumed some of TMC’s domestic

consulting services.

forklift truck sales subsidiaries and the Industrial Equipment

20

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

TOYOTA Material Handling Customer CenterSupported by TMHC’s accumulated know-how and abroad lineup of software and hardware, including forklift
trucks, racks and materials handling systems, the engineers at
the Center can provide customized total materials handlingsolutions, from efficient equipment layout to inventory
analysis.

Operations in the U.S.A.
The year 2001 was a time of transition and challenge in the
U.S. for both the Toyota Group’s industrial equipment
operations and the forklift truck industry. As part of the
Toyota Group’s strategy to strengthen its global materials
handling operations, Toyota Industrial Equipment, formerly adivision of Toyota Motor Sales, U.S.A., Inc., was acquired by
Toyota Industries Corporation. This resulted in the formationof a new sales company in the U.S., Toyota Material Handling,
USA, Inc. (“TMHU”), which is responsible for TMHC’s sales
operations in the United States.
The already faltering U.S. economy was hit hard by the

For 2002, the market is moving slowly into recovery.
Current trends center on environmental and safety

tragic events of September 11, and the industrial equipment

considerations, increased productivity and reduced operating

sector did not escape this impact. In 2001, retail orders for the

expenses, leading to increased demand for energy-efficientindustry as a whole slipped more than 30%. However, TMHU’selectric forklift trucks. TMHU has taken advantage of this trend

commitment to growth helped the company reach newwith the successful launch of its new line of 7-Series electric

market share records while remaining profitable. In 2001,

lift trucks in 2000 and 2001. These new four-wheel electric lift

TMHU became the exclusive industrial equipment supplier totrucks offer advanced performance features, including an AC

the United States Postal Service for the next ten years. This,drive system with power regeneration technology for greater

along with other strategic partnerships, helped TMHU toefficiency and productivity. The line offers a broad range ofgrow in a depressed market.

lift capacities to suit most industry applications, and eachmodel incorporates TMHC’s exclusive System of Active
Stability (SAS) for increased safety and stability.
Headquartered in Irvine, California, TMHU has beenoffering high-quality lift trucks in the U.S. for 35 years. With areputation for quality and durability, TOYOTA is one of thebest-selling brands of forklift trucks in the world.
Approximately 95% of Toyota lift trucks sold in the U.S. areassembled by Toyota Industrial Equipment Manufacturing,Inc., in Columbus, Indiana. TMHU’s commitment to customer
service extends nationwide. Eighty authorized dealers with a
total of 182 facilities located throughout the U.S. offer
comprehensive customer support, including one-stop
shopping for Toyota Industrial Equipment lift trucks, parts,

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

21

Focus 4

Toyota network across 20 European countries.

service, financing and rentals.
In 2002, TMHU will continue its rise as a comprehensive
industrial equipment service provider in the U.S., while

maintaining Toyota
Focus
4 Industries’ No. 1 position in U.S.

counterbalanced forklift truck sales and market share. TMHU isfocused on attaining the No. 1 position in all product classes.

The year 2001 brought many challenges in economic andmarket conditions. However, TIEE succeeded inoutperforming market trends and conditions, achieving a
year-on-year sales increase of 5% in 2001.
In general, the European economy started to slow in the

For more information on TMHU, please visit

beginning of the second quarter of 2001, as a delayed result

www.toyotaforklift.com.

of the recession in the U.S. The tragic events of September 11
accelerated this downward trend. The German economy in

Operations in Europe

particular performed worse than expected.

Toyota Industrial Equipment Europe, S.A.R.L. (“TIEE”), theThe market for counterbalanced forklift trucks suffered

European division of TMHC, offers a comprehensive lineup of

severely from the general economic conditions in 2001, but

forklift trucks and warehouse products for use in a variety of

TIEE managed to maintain its market share of about 10% andmaterials handling situations. Building on its corporate theme

to keep orders at the same level as in 2000. The market forof “Share Our Strength, ” TIEE is continuously developing its

warehouse equipment showed more resistance to the

products and services to meet changing customer needs ineconomic situation, growing by approximately 12% over thethe European market. With its marketing headquarters inyear 2000. Again, TIEE succeeded in outperforming themarket, with orders up 40%.
Market analysts expect the European economy to recover
over the second and third quarters of 2002, and the market
for counterbalanced forklift trucks and warehouse equipment
will likely pick up in response. The first few months of 2002
showed signs that the downward trend is indeed stabilizing.
As a whole, 2002 promises to be a very exciting year for
TIEE. In May, TIEE moved to new European headquarters inBrussels. From there, it will continue its efforts to extend its
European sales, distribution and after-sales network in orderto ensure a quick and effective response to customers’
demands. TIEE will continue to invest heavily in newengineering technologies and manufacturing techniques,and provide existing and new customers with state-of-the-art
products. Among the innovative products scheduled for

Brussels, TIEE provides extended marketing and sales support

launch during 2002 are the Generation 7 Stackers, the 7FBRE

to distributors all over Europe. It is responsible for identifying

reach truck and the Easymover handy electric pallet truck. The

and analyzing customers’ needs and passing on thisextended range of warehouse equipment was introduced at

information to technical and research departments for

the CeMAT fair in Hannover in April 2002. Later in the year

implementation. TIEE manages an extensive after-sales service

TIEE will launch the 7FBMF, a counterbalanced forklift truck

to guarantee continuous operation of its products. Extremely

featuring the latest technology that is destined to set

short delivery times are ensured through a European

revolutionary new standards for the industry in productivity,

centralized spare parts distribution network. European

safety, ergonomics and reliability. For more information on

customers are supported and serviced through the local

products and services, visit www.tiee.com.
Note: The fiscal years of Toyota Material Handling USA, Inc. and Toyota
Industrial Equipment, S.A.R.L. run from January 1 to December 31.

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TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

BT Industries
In June 2000, Toyota Industries acquired BT Industries, a Swedish warehouse equipment manufacturer, and made it a subsidiary. BT
Industries is the world’s leading manufacturer of warehouse trucks.

A Message from BT Industries’ President

BT Industries Stays Strong in a Declining Market
through mergers and acquisitions, with large international
companies leading the way. At the same time, there is a trend
for customers to concentrate on their core businesses andsubcontract their entire materials handling operations. Boththese developments call for BT Industries to provide turnkey
solutions across borders. Companies want access to theconcepts they use in their home markets no matter where
else in the world they set up operations. Thanks to its Group’s
global presence, BT Industries has a competitive advantage. It
is the only lift truck producer that can provide customers withfull product lines that meet both European and U.S.
standards.
Carl-Erik Ridderstråle (left), credited with having transformed BT Industries
into the world leader in warehouse equipment, was succeeded as president andCEO by Per Zaunders (right) on June 1, 2002.

Demand for warehouse trucks weakened in 2001, but BT
Industries achieved continued growth in revenue and income.
This was helped by, among other things, a good order backlog
at the beginning of the year. The year was also notable forfurther investments in product development and increased
market coverage.
BT Industries is the world’s leading manufacturer of electric

One reason why BT Industries has succeeded inestablishing long-term relationships with its customers is its
ability to develop along with them. Short-term rental andmulti-year leasing represent an important and growing shareof BT Industries’ operations. The leasing concept in Europe
allows customers to calculate their truck costs in advance. It
also eliminates the need to tie up capital that can be betterused in other areas of their operations. A few years ago, oneof every three trucks BT Industries delivered in Europe waspart of some form of rental agreement. Today, the figure iswarehouse trucks and manual trucks, so-called hand pallettrucks, and these lines are complemented by a broad range ofcounterbalanced trucks. But efficient materials handling
involves much more than hardware. BT Industries also offers awide range of services, including repair and maintenancesolutions, fast, efficient distribution of spare parts, driver
training, various leasing alternatives and truck financing. In
fact, service is BT Industries’ core business, allowing customers
to concentrate on theirs.
Several of our client industries are undergoing consolidation

Note: The fiscal year of BT Industries, unlike that of Toyota Industries, runs
from January 1 to December 31.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

23

Focus 4nearly 40%. In North America, BT Industries has an extensive
leasing business, with independent dealers usually
responsible for maintenance and service. In this case as well,freeing up capital, in combination with access to sufficient
truck capacity, is an important factor in customers’ decisions.
The lift truck market is experiencing long-term growth,particularly with regard to warehouse trucks. The market forelectric warehouse trucks has grown by an annual average of
6–7% over the past 30 years. Despite a temporary decline in2001, average growth over the last ten years has been evenhigher. This is a reflection of increases in consumer spending
and changes in spending patterns. One example is theconsumer goods sector, where a growing share of finishedand semi-finished goods is distributed directly to end-users.
Another is the trend among large engineering companies
toward outsourcing of production, allowing them to focus on

Europe, demand remained good, although a decline wasassembly. As a result, higher volumes of components have to

noted toward the end of the year. Demand also fell in markets

be transported.

outside Western Europe and North America late in the year.

The global market for lift trucks is largely concentrated inOrders received increased to SEK12.2 billion, up 2% overregions with high levels of consumer spending, such as

2001, while sales rose by 15% to SEK13.2 billion. A very good

Europe, North America and Japan. But as their standards oforder backlog at the start of the year contributed to the sales

living rise, developing countries, particularly in Eastern Europe,

increase and income trend. Income after net financial items

Southeast Asia and Latin America, are also becoming highly

was SEK888 million, up 8%.

attractive markets for BT Industries. There are exciting

BT Industries is continuing to add capacity. During the last
two years, capacity has been expanded at the production

developments ahead in these markets.
Before its acquisition by Toyota Industries in June 2000, BT

units in Mjölby (Sweden), Bologna (Italy) and Brantford

Industries was the world leader in warehouse trucks and(Canada). These investments demonstrate confidence in the

Toyota Industries was the world leader in counterbalanced

long-term growth of the industry and our ability to make thetrucks. Now, BT Industries and Toyota Industries’ lift truck

most of future opportunities. Continued investments inoperations complement each other geographically as well as

product development should be seen from the samein terms of products, resources and competence. Together, theperspective. In 2001, BT Industries launched several important

two command over 20% of the total global market for lift

new products. At the main U.S. plant in Greene, New York,

trucks, making it the market leader in the industry as a whole.

ground was broken on a facility that will house productToyota Industries and BT Industries are continuously

development and a demonstration hall.

developing their cooperation, engaging in various joint

In 2002, the North American market is expected to recoverprojects and benefiting from an increased exchange ofand then grow modestly. In Europe and the rest of the world,

knowledge and experience. This cooperation is helping to

BT Industries anticipates that demand will develop moreincrease our competitive strength.

weakly than in 2001. However, BT Industries has very good

In 2001, the global market for lift trucks was adversely

prospects of further expanding its operations in mature

affected by the major economic slowdown in North America.

markets such as Western Europe and North America as well as

BT Industries adapted its production to the weaker market. In

in growth markets.

24

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

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

BT Industries’ Worldwide Manufacturing Bases

trends in fiscal 2001 and future prospects.

Organization of BT Industries
BT Industries’ products and services are marketed in some 70
countries around the world. Operations are divided into threegeographic business areas: BT EUROPE (Western Europe), BT
RAYMOND (North America) and BT INTERNATIONAL (rest of
the world). The BT Industries Group has seven production
units. In Europe, there are two plants in Mjölby, Sweden, andone in Bologna, Italy. In the U.S., there are plants in Greene,
New York, and Muscatine, Iowa. In Canada, there areproduction facilities in Brantford and Toronto, Ontario.
The BT Industries Group’s sales and service activities are

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

carried out by its own companies as well as by partly owned
associated companies and independent dealers. The BT
Industries Group comprises a total of 70 companies and it

lift truck market is concentrated in the industrialized world.

cooperates with around 450 dealers spread across much of

Approximately 78% of demand for warehouse trucks is in

the world. BT Industries Group operations are managed

Western Europe, North America and Japan. The global market

through the parent company, BT Industries AB, part of Toyota

for products and services based on electric warehouse trucks

Industries Corporation since 2000.

is estimated at SEK50 billion, half of which represents trucksales and half the service market.
The largest suppliers in the market consist of around ten

BT INDUSTRIES

companies based in Europe, the U.S. or Japan. Some arefocused mainly on counterbalanced trucks, while others, like

BT EUROPE

BT RAYMONDBT INTERNATIONALBT Industries and Toyota Industries, offer both warehouse andcounterbalanced trucks. With a market share of over 20%, BT

Note: The BT Industries Group comprises some 70 companies with global
coverage. BT Industries’ operations are organized into three businessareas.

Industries and Toyota Industries together are the world leader.
Despite a weak market in 2001, the lift truck market isundergoing long-term growth. This applies in particular to themarket for electric warehouse trucks. During the past 30 years

Market Trend

demand for electric warehouse trucks in Western Europe and

The global market for the year 2001 for lift trucks (excluding

North America has grown by an average of 6–7% a year.

manual trucks) is estimated at 591,000 units, with warehouse

Emerging markets in Eastern Europe, Southeast Asia andtrucks accounting for approximately 41% and electric- andSouth America have grown by more than 10% annually in the

combustion-powered counterbalanced trucks for 19% andlast decade. Demand for warehouse trucks is driven mainly by

40%, respectively.

a society’s standard of living. A higher standard of living leads

BT Industries’ principal focus remains warehouse trucks. In
recent years, the product range has been broadened toinclude mainly electric counterbalanced trucks. Since Toyota
Industries’ main focus is counterbalanced trucks, BT Industries

to more commerce and an increased flow of goods, which inturn raises the demand for efficient distribution.
BT Industries expects demand in the electric warehousetruck segment to remain at its historical growth rate.

and Toyota Industries’ products complement each other. The

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

25

Focus5

Car Air-Conditioning Compressor Business —Establishing a Global Presence with Advanced Technologies
The production of car air-conditioning compressors is a core

Toyota Industries has made an important contribution tobusiness not only of the Automobile Segment but also ofinnovation in the automobile field. We anticipate changes in

Toyota Industries itself. Making full use of our cutting-edge

market needs accurately and develop products to meet thosetechnologies, we develop and manufacture products thatneeds ahead of competitors. For example, in the 1980s wemeet the needs of each local market throughout the world.

launched our compact, lightweight 10-cylinder compressor
with swash plate and fixed displacement, which is extremely
reliable at high operating speeds. In the 1990s, in response toincreased environmental concerns, we launched a one-way
swash plate compressor with continuous variabledisplacement, which increases fuel efficiency by reducing theload on the engine. In the late 1990s, we introduced an
external signal-controlled compressor with one-way swash
plate and continuous variable displacement, which offers
both excellent acceleration and lower energy consumption.
In the near future, electric vehicles are expected to become
more popular, leading to increased demand for electriccompressors. Toyota Industries is undertaking substantial
research and development in this field. We are also conducting

Technological Superiority Beating
the Competition

extensive research into new products. These include a car airconditioning compressor that uses CO2 as a refrigerant.

Toyota Industries’ car air-conditioning compressors are thepreferred choice not only of Toyota Motor Corporation

Strong Global Presence(“TMC”) but also of many other of the world’s major car

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

manufacturers. Competitors cannot match them in terms ofcompressor market, producing more than 13 million units atechnology and overall quality.

year at our facilities around the world.

Worldwide Manufacturing Bases and Local Offices
TDDK
MunichDNTS
MACI

Detroit
ACTIS

DWHI
YSD
SUBROSDNIA
DNBRConsolidated subsidiaries
Licensed manufacturers
Local offices

26

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

Production Integration and
the Aftermarket
In May 2001, in order to enhance mutual international
competitiveness, Toyota Industries and DENSO Corporation(“DENSO”) agreed to integrate their production of car airconditioning compressors. Toyota Industries now takes thelead in product development and manufacturing, while
DENSO focuses on sales while also undertaking limited
manufacturing operations. Toyota Industries is now taking
Over the years, Toyota Industries has globalized its

over production of car air-conditioning compressors at

production, establishing a tri-polar production network with

DENSO’s Toyohashi Plant in Japan. Overseas, production willbases in all the major automobile markets, i.e., Europe, the U.S.

be shared between the two companies on a country-by-

and Japan. We also license production in Asia (excluding

country basis. As has always been the case, all our car air-Japan) and South America. Local production allows theconditioning compressors will be supplied to DENSO, which

manufacture of products that accurately reflect local needs,

will then sell them to major automakers worldwide. Our

while at the same time reducing shipment costs andcompressors are also incorporated in DENSO’s car air-exchange rate risks. Local procurement is increasing, and willconditioning systems.

continue to increase for the foreseeable future.
Our U.S. production base, Michigan Automotive Compressor,

In July 2001, Toyota Industries established ACTISManufacturing, Ltd. LLC (“ACTIS”) in Grapevine, Texas, as a joint

Inc. (“MACI”)*, sold over 4.4 million swash plate compressors

venture with DENSO and Toyota Tsusho Corporation. ACTIS, awith fixed displacement in 2001. Our European production

remanufacturer of car air-base, TD Deutsche Klimakompressor GmbH (“TDDK”)*,

conditioning compressors for

produced approximately 0.7 million swash plate compressors

the North American market,

with variable displacement in 2001.

started production in MarchIn fiscal 2002, Toyota Industries was the leading player in

2002. The company was

the Japanese market, selling more than 5 million units tocreated to cope with the

major car manufacturers, including TMC. Sales to American

rising demand forautomakers and Japanese manufacturers producing in North

remanufactured compressors,

America totaled over 4.5 million units (including exports anditself a response to social andlocal production), mainly fixed displacement compressors.

environmental needs for more efficient utilization of

In Europe, Toyota Industries sold over 4.1 million units

automotive part resources. Making full use of our long-(including exports and local production), including variable

accumulated know-how in production technologies anddisplacement compressors for luxury cars and compact

quality control, ACTIS intends to reinforce competitiveness invariable displacement compressors for smaller cars.

the North American aftermarket for remanufactured

Despite uncertain prospects for automobile sales triggered bycompressors. In June 2002, the compressor remanufacturing

an economic slowdown in the U.S., our medium-term focus isbusiness of American Industrial Manufacturing Services, Inc.

on North America and Europe. In North America, we will seek(“AIMS”), a DENSO subsidiary, was integrated into ACTIS.

new orders aggressively. In Europe, the potential for sales is

ACTIS Manufacturing, Ltd. LLC

In February 2002, TDDK also commenced thevast as the proportion of cars fitted with car air-conditioners isremanufacture of car air-conditioning compressors in the

expected to increase significantly. We will vigorously cultivate

European market.

new customers by rapidly developing and launching products
tailored to European needs, such as the compact variabledisplacement compressor.

* MACI and TDDK are joint ventures with DENSO Corporation. As of March 31,
2002, Toyota Industries held 60% and 65%, respectively, of the shares of thesecompanies. The fiscal years of MACI and TDDK, unlike that of Toyota
Industries, run from January 1 to December 31.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

27

Focus6

Electronics Business — A Key to Future Growth
Toyota Industries is confident that its Electronics Business has

production line that incorporates the Toyota Production

the growth potential to make it a main business pillar of

System (“TPS”) ensures that quality keeps pace with output.

future operations. We intend to allocate the necessary capital

Although the worldwide IT slump in the second half of 2001

and management resources to turn this potential into reality.

and the terrorist attacks on the U.S. in September of that year

We are also committed to pioneering new technologies anddrastically reduced demand in the electronics-related field, asbusiness models in the electronics field by vigorously

inventory readjustment proceeds and business picks up again

investigating opportunities for technological collaboration

within the IT industry, the demand for low-temperature poly-and capital participation.

Si TFT-LCD panels will increase.
Toyota Industries believes that the outstanding features ofthe low-temperature poly-Si TFT-LCD panel give it significant
potential to spur greater demand in the medium to long term.
ST-LCD is now producing the LCD panel for mainly digital stilland video cameras, and personal digital assistants (PDAs). The
panels are supplied to customers through Sony. The lowtemperature poly-Si TFT-LCD panels are energy-efficient, andoffer high resolution as well as high numerical aperture. They
also facilitate the integration of the display device and its
driver circuits into a single TFT glass base plate. The resultant
reduction in cost and miniaturization of the display unit
allows the LCD panels to be used in a wide range ofapplications, including in-car monitors. They are also suitablefor wide-band mobile phones, where they allow easy
exchange of large volumes of data for video and still images.
We expect that demand for low-temperature poly-Si TFT-LCD
panels will increase further as their application in highdefinition displays extends to ever smaller, lighter mobile
phones and PDAs.
Anticipating a sharp increase in demand for the panels
over the medium to long term, in the fall of 2001 ST-LCD

LCD BusinessIn October 1997, Toyota Industries and Sony Corporation
established ST Liquid Crystal Display Corp. (“ST-LCD”) as a 5050 joint venture. ST-LCD manufactures low-temperaturepolysilicon TFT-LCD panels. ST-LCD benefits from Sony’s
advanced LCD development technologies and Toyota
Industries’ superior quality control and manufacturing

invested ¥75 billion to establish a second production line, andincreased the capacity of its first production line. In total, STLCD has increased its monthly capacity to 32,000 base plates(600mm x 720mm). To help fund this investment, Sony andToyota Industries each injected ¥10 billion into ST-LCD,
increasing its capital to ¥50 billion. Looking closely andflexibly at the pattern of demand, ST-LCD plans to put thetechnologies.
Since our investment in ST-LCD is not a majority stake, we
do not include it as a subsidiary. Nevertheless, we consider STLCD as the core of our Electronics Business. Since it beganmass production in April 1999, ST-LCD has expanded
production to meet rising market demand. A uniquesecond line into operation sometime after the summer of
2002. Sony, Toyota Industries and ST-LCD regard the lowtemperature poly-Si TFT-LCD as a key device in the field ofcompact displays, and are collaborating to develop andmanufacture superior products for further expansion of thebusiness.

28

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

Package Substrate BusinessToyota Industries entered the electronic substrate business

Joint Development
through Business Collaboration

through its subsidiary, TIBC Corporation (“TIBC”), a joint

We developed an ultra-compact radio tuner for AM/FM/

venture with Ibiden Co., Ltd. (“Ibiden”). TIBC manufactures ballteletext broadcasts jointly with Niigata Seimitsu Co., Ltd. as

grid array (BGA) plastic package substrates and flexible printed

part of a business collaboration agreement, and displayed thecircuit (FPC) substrates for smart cards. TIBC substrates areproduct at the Tokyo Motor Show in October 2001. Based on

supplied through Ibiden to IDMs (Integrated Device

advanced CMOS (Complementary Metal Oxide

Manufacturers) and IC packaging and assembly houses

Semiconductor), RF (Radio Frequency) and IC (Integrated

worldwide for incorporation in a variety of electronics andCircuit) technologies, this is the world’s first radio tuner that

information devices.

incorporates both analog and digital circuits. In addition to

TIBC suffered from the depressed business conditions offacilitating the design of ultra-compact car radio systems, this

2001, but as inventory within the IT industry was almost

product will enable mobile

cleared in the first half of 2002, the demand for TIBC’s

phones and PDAs to receive radio

substrates is showing signs of recovery.

and teletext broadcasts, opening
the way for application in a wide

Technology Development Center

range of information devices.

Toyota Industries’ Technology Development Center develops
and manufactures power electronics parts for automobiles,
and engages in research and development of various
electronics technologies. The Center also serves as Toyota
Industries’ R&D facility and its production base for a vast arrayRadio tuner moduleof electronics parts, so accumulating know-how in productmanufacture.
TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

29

Focus7

Research and Development Structure
Toyota Industries has a diversified range of businesses, andDevelopment Laboratories, Inc., an R&D facility of the Toyota

each of its business divisions has distinctive technologicalGroup, and other outside R&D institutions.

strengths, core technologies and market characteristics. For

In January 2002, following reorganization of thethis reason, product improvement, technology development

headquarters, Toyota Industries established the Technicaland applied research are all carried out by the development

Planning Department within the Corporate Center. This

department of each division. Each division also has its own

department engages in the lateral transfer of technologies

engineers, experimental facilities and research laboratories.

among the different divisions and the examination of newtechnology development themes in order to establish astrong and efficient corporate R&D structure.
The Business Planning Department utilizes the longaccumulated technological know-how and outside network(both people and information) of each division tosystematically and continually explore the potential for new
products and services that might become our future businesspillars.
”E-Lab,” our IT research laboratory opened in May 2002,
serves as a support organization for the information system
division as well as our R&D facility for information technology.
The lab is responsible for researching digital simulation
technologies with a view to reducing lead-times fromdevelopment to manufacture to shipment. It is also involved
in developing an optimal network system for joint
development of parts with suppliers, and for partsprocurement.
BT Industries has its own network of R&D facilities, which
engage mainly in warehouse equipment research. Toyota
Industries conducts technological exchanges with BT
Industries, and is preparing to jointly develop key parts ofmaterials handling equipment.
At TIBC Corporation, one of our subsidiaries, our joint
venture partner Ibiden Co., Ltd. contributes to productdevelopment, while Toyota Industries offers support in the
manufacturing technology field. ST Liquid Display Corp., our

The autonomous Technology Development Center takes

affiliate accounted for by the equity method, benefits fromthe initiative in basic R&D activities in the materials field as

the product development technologies of Sony Corporation,

well as research in the latest technologies, such as electronics.

our joint venture partner, and our own manufacturing

We also collaborate with Toyota Central Research &technologies.

30

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

Focus8Harnessing the Power of Information Technology
The potential impact of information technology (IT) on

management and to allow swifter decision-making throughinnovation in corporate activity is huge. We are using IT touniversal access to a unified management database. We are

overhaul our traditional way of doing business and speed up

gradually harnessing ERP to upgrade our accounting,management processes, improve productivity and reinforce

procurement, personnel and production management.

international competitiveness. By unifying and providing realsuppliers and corporate management, Toyota Industries aims

Renovating the Design and
Manufacturing Process

to accelerate decision-making and facilitate networking as

We are concurrently developing products by exchanging

well as digitalize the process from order receipt throughdigital information on every process from development todevelopment and manufacture to delivery.

procurement to manufacture, thus enabling shorter producttime access to a variety of information on group companies,

We have made the following progress in the introduction
and use of IT.

development lead-times. Utilizing three-dimensional CAD
systems and other systems, we are reducing man-day andproduct development costs.

Establishing a Global Network
We will proceed with an enlargement of the existing network
to include our overseas subsidiaries, starting with TMHU, TIEM,
MACI and TIESA. In the future, we intend to combine the
network with that of BT Industries, thereby establishing a
network encompassing all Toyota Industries Group companies.
In May 2002, we established “e-Lab,” an information
technology research laboratory, to promote IT within Toyota
Industries, create new businesses to bank on the network era
and further improve the added value of our products. The lab
E-Lab, our springboard for promoting IT

will study the feasibility of digital technologies in enablingproduction line simulations necessary to shorten the lead-

Strengthening Network Infrastructure

time from product development to manufacture.

We have been working to set up a network infrastructure thatenables each division and employee to share needed
information. Toyota Industries Corporation (the parent
company) has completed upgrading almost all its PCs. We arereinforcing network lines among domestic plants as well as
inside the Company. Servers are integrated to improve dataprocessing and security. Through these measures, thestrengthening of the domestic network infrastructure has
been almost completed.

Introducing ERP Systems
We are pushing ahead with the introduction of ERP (Enterprise
Resource Planning) systems to facilitate improvements in overall(Photos on this page by Yasunori Shimomura)

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

31

Focus9Corporate GovernanceJapan’s Commercial Code was recently under review with a viewto ensuring that corporate governance functions fully andShareholders’ Meeting

properly. A new legal framework for corporate governance isBoard of Auditors

planned to go into effect in April 2003.
This section covers the corporate governance system of
Toyota Industries as of July 1, 2002. We are determined tocomply fully with the provisions of the amended Commercial
Code. Over and above that, we will make independent efforts toensure that we adhere to the spirit as well as the letter of the law,in Japan and overseas, conducting our business affairs fairly andtransparently. Accordingly, we intend to conform to the highest
possible standards with respect to disclosure of information andaccountability to shareholders and others concerned.

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

Decision-Making
As a rule, day-to-day operations are entrusted to division
managers or an in-house company president. Strategic

articles of incorporation is made by a director or the prospectdecision-making and the establishment of divisional andof such a violation is identified, it is reported to the Board ofcompany-wide business goals are discussed and decided by

Directors.

the Management Committee. Issues arising, when necessary
and appropriate, are presented for discussion by the Board ofInformation Disclosure

Directors, which includes five auditors charged with a legal

We have taken measures to improve

responsibility to prevent any unlawful or inappropriate

disclosure, including upgrading theresolutions. The management decision-making bodies of

IR section of our Web site. We are

Toyota Industries are the Board of Directors, the Management

examining ways of further

Committee and the Business Operation Committee.

reinforcing accountability toshareholders and others concerned,

Board of Auditors

such as expanding the volume and

The Board of Auditors is composed of five corporate auditors,

contents of information available toincluding two standing auditors and three outside auditors. In

the public.

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

order to strengthen the auditing function and promote better
corporate governance, one additional outside auditor wasGood Corporate Citizenshipappointed at the Ordinary General Meeting of Shareholders

Code of Conduct Council

held on June 27, 2002. The corporate auditors, appointed at theIn the early 1990s, we established a Code of Conduct Council

Ordinary General Meeting of Shareholders, conduct operations

for the purpose of promoting awareness of ethical, legal,

audits as well as accounting audits. For this purpose, the law

social and environmental issues. The Council is chaired by an

grants auditors a great deal of authority. In the operations audit,

Executive Vice President. In 1998, the Council published athey investigate whether ordinances and articles ofguide for employees containing specific guidelines on goodincorporation are being observed by the directors in the

conduct. The Council liaises closely with the Legal

execution of their duties. In order to prevent illegal or improper

Department, the Global Human Resources Department andresolutions from being made at meetings of the Board of

the Audit Office, among others. It also conducts regular

Directors, the auditors attend the meetings and are able to give

checks of each department and promotes educational

their opinions if necessary. If any violation of an ordinance or

activities.

32

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

Focus10

Caring for the Environment
Basic Principle

Third Environmental Action Plan

Toyota Industries, recognizing that preservation of the global

Since we devised the First Environmental Action Plan in 1993,

environment is an issue that could affect the survival of

we have tackled environmental issues systematically. In 1996,

mankind, embraces environmental soundness as a crucial

we revised the plan and announced the Second

medium- to long-term business concern. Our basic corporate

Environmental Action Plan. As the targets set out in theprinciple states that “Toyota Industries believes that

second plan had almost been met, we unveiled the Third Five-

economic growth and conservation of the natural

Year Environmental Action Plan (April 2001 – March 2006) inenvironment are compatible. It strives to offer products andAugust 2000. This plan defines specific targets and activity

services that are clean, safe and of high quality.” In

guidelines, including “zero emissions”* at all of Toyota

accordance with this principle, we have been actively

Industries’ plants by March 2004. The following is an outline ofengaged in the protection of the environment.

the plan.
* Toyota Industries defines “zero emissions” as reducing emissions to a level
equivalent to at least 95% of landfill waste.

Environmental Policies
1. Conduct corporate activities that are considerate of theenvironment at every stage of a product’s life cycle, fromdevelopment through design, production, use anddisposal, so as to provide clean and safe products
2. Strive to intensify environmental management, includingthat of consolidated subsidiaries, for the further
advancement of corporate activities that support
environmental protection
3. Promote social contribution, information disclosure andknowledge through wide-ranging cooperation withsociety on environmental protection, with the ultimate
aim of achieving a better global environment

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

33

Focus 10

Action Guidelines

Specific numerical targets include the following: By the end of

1. Develop and provide clean products withminimal environmental impact

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

March 2006, total CO2 emissions to be 95% of the fiscal 1991

(1) Thoroughly incorporate environmental considerations

1991 level; by the end of March 2006, total emissions of PRTR

in development and design(Pollutant Release and Transfer Register) substances specified(2) Promote environmentally preferable purchasing (EPP)

by the Ministry of the Environment to be 50% of the fiscal
1999 level; and by the same date total VOC (Volatile Organic

2. Promote manufacturing that strives forzero emissions

Compound) emissions from paint lines to be 50% of the fiscal(1) Further reduce adverse environmental impacts

1999 level.

through resource and energy conservation

System for Environmental Activities(In-House Organization)(2) Voluntarily set, execute and monitor goals throughthe Environmental Committee

To tackle environmental issues in a consistent and organized

3. Expand environmental management systems

manner, we have set up the Environmental Committee,(1) Strengthen cooperation between the Company andchaired by the President. The committee has four specialized

its subsidiaries and trading partners

subcommittees. Also, each plant has organized its own Plant(2) Firmly grasp environmental protection costs andEnvironmental Committee and specialized subcommittees tocost-efficiency

deal with environmental issues regarding individual

4. Actively participate in public environmental
protection efforts as a responsible corporate
citizenmanufacturing facilities.
We realize the need to set up an encompassing(1) Engage in the creation of a recycling-oriented society

organizational structure to uniformly and efficiently manage(2) Thoroughly implement active information disclosure

and promote the environmental activities that each Toyota

and communication with local communities

Industries Group company has been engaged in. We areconducting a feasibility study on this task.

Company-Wide Waste Emissions(Ton)
60,00050,00040,00030,000Toyota Industries aims atzero emissions by March 2004.

20,00010,000

0
FY

91

92

93

94

95

96

97

98

99

00

01

02

04
TargetNote: Waste emissions increased in fiscal 2002 due to Higashichita Plant’s commencement of full-fledged operations.

34

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

In-House Organization for Environmental Activities

Product Technology
Subcommittee- Development of products reflecting concern for theenvironment- Facilitation of product recycling- LCA (Life Cycle Assessment) systems

Energy Subcommittee- Proposal of plans for increasing energy efficiency andpromotion of related activities

Pollution Prevention
Subcommittee- Promotion of pollution prevention activities- Management of chemical substances- Management and phase-out of materials that have a negativeenvironmental impact

Waste Minimization
Subcommittee- Preparation and promotion of plans for curbing the volume ofwaste materials and promoting the reuse of materials

Environmental
Committee
Established in December 1991,
chaired by the President

Plant
Environmental
Committee

Specialized
Subcommittees
at Plant Level- Implementation of decisions made by the specialized
subcommittees listed above- Promotion of environmental protection at the plant level

Compliance with
International Environmental Standards

Environmental Audits

Toyota Industries is working to obtain ISO14001 certificationand externally. Internal audits are carried out by teams ofin order to establish a company-wide environmental

employees who have received specialist training. Externalmanagement system and fulfill its corporate responsibilities

auditors from an independent inspection institution

for international environmental protection. Besides Toyota

periodically visit each site to check that environmental

Industries Corporation’s headquarters, which acquired

management is being applied in accordance with ISO14001

certification in October 2001, all the production plants ofstandards. In fiscal 2002, the auditors found no significant

Toyota Industries (the parent company), except for the newly

environmental violations.

Toyota Industries implements environmental audits internallyestablished Higashichita and Higashiura plants, had received
ISO14001 as of June 2002. The same applies to TIEM, MACI,

Environmental Training

TIESA, TIK, KTTM and TDDK, i.e., all our overseas production

Based on the notion that it is important to raise thebases except BT Industries. BT Industries is also working on

environmental awareness of each employee, Toyota Industries

obtaining ISO14001 certification. To date, four out of its sevenregularly conducts environmental training and education

production bases have been certified. We are working toprograms. These programs include courses for training

obtain certification for all our group companies.

internal auditors, providing ISO14001 internal auditing
education for divisional project leaders, and general education
programs for all employees.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

35

Focus 10

Environmentally Preferable Purchasing(EPP)

Environmental Reporting

In March 2001, we devised an EPP Guideline and distributed abelief that responsible corporate citizens should disclose

copy to 700 materials and parts suppliers as notification of

their environmental protection activities to the general

our intention to commence

public. For example, we hold regular meetings with local“green” procurement. The

communities. Since 1999, we have also published an

guideline lays out our intention

Environmental Report, detailing the activities andto establish an environmental

performance of our environmental protection programs. For

management system by thedetails on how to obtain copies of this report, see the lastend of March 2004, and procure

page of this annual report. The contents of the latest

parts and materials from only

Environmental Report, together with details of our recent

those companies considered toactivities and related matters, are also posted on our Web site

have established a system to(http://www.toyota-industries.com/environment/) dedicatedobtain ISO14001 certification or

to environmental issues, launched in April 2002.

Over the years, we have on various occasions fulfilled ourequivalent.

Environmental Accounting
As environmental issues to tackle increase, so does theimportance of accurate analysis and understanding of thecosts and effectiveness of environmental investment from thestandpoints of corporate management and information
disclosure to investors and shareholders. Thoughinternational standards regarding the range and definition ofenvironmental costs have not yet been established, we areusing the guidelines laid down by the Japanese Ministry of
the Environment as a reference to calculate the costs ofenvironmental investment and maintenance and study costefficiency.
Our environmental accounting system is still at the trial
stage and requires further fine-tuning. At the same time, we
are working to create a framework for a consolidated
environmental accounting system.

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

36

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

Review of Operations
The performance of Toyota Industries’ business segments varied for fiscal 2002. The Materials Handling Equipment Segment and theAutomobile Segment showed year-on-year increases in sales due to the acquisition of BT Industries AB (“BT Industries”) in June 2000 and astrong performance by the Car Air-Conditioning Compressor Business. On the other hand, the Textile Machinery Segment and the Others
Segment saw sales decrease. The operating income of some businesses decreased from fiscal 2001, but overall Toyota Industries
maintained the fiscal 2001 level. An overview of fiscal 2002 by segment follows.
Note: Segment net sales figures do not include intersegment transactions. However, segment operating income figures do include operating income arising fromintersegment transactions. U.S. dollar amounts have been translated from yen, for convenience only, at the rate of ¥133.25=US$1, the approximate exchange rateon the Tokyo Foreign Exchange Market on March 29, 2002.

Automobile Segment(exported as the Corolla Wagon. Discontinued in the first halfThis segment consists of vehicle (automobile assembly),of fiscal 2003). Although the assembly of the RAV4 and bBengine, car air-conditioning compressor and other businesses

Open Deck began in fiscal 2002, sales of the Vitz (Yaris), our(including foundry parts and electronic components formainstay vehicle, decreased due to TMC’s commencement of

automobiles).

production of this model in Europe and the ruthless domestic

Net sales amounted to ¥563.6 billion (US$4,229.6 million),competition in the compact car market.

up 23.2% over fiscal 2001 and accounting for 57.5% of total

Total Vehicle Business production for fiscal 2002 was

net sales of Toyota Industries. The increase was due mainly to247,000 units, down 29,000 from fiscal 2001. Sales of thea rise in sales of car air-conditioning compressors and the fact

Vehicle Business amounted to ¥280.1 billion (US$2,102.3

that Toyota Motor Corporation (“TMC”) started charging formillion), up 43.0% over fiscal 2001. Approximately half of thisengines and other parts for automobiles we assemble that

increase, ¥67.5 billion (US$506.6 million), was due to the fact

had previously been supplied free. Operating income wasthat Toyota Industries now pays for parts previously supplied¥29.0 billion (US$217.3 million), up 1.5%.

free by TMC and recoups an identical aggregate amount in
the form of increased unit prices to TMC.

Net Sales of
the Automobile Segment

Operating Income of
the Automobile Segment(¥ Billion)(¥ Billion)

600

30

Engine BusinessWe produce gasoline and diesel engines for TMC vehicles andfor our own line of forklift trucks and other industrial vehicles.
For fiscal 2002, gasoline engine production totaled 172,000
units, a decrease of 11,000 from fiscal 2001. Though the
production of the 2UZ gasoline engine from August 2000
made an excellent contribution to the total, production of 5E

400

20

gasoline engines for automobiles and 4Y gasoline engines forindustrial vehicles decreased. Production of diesel engines
totaled 212,000 units, up 42,000. Production of 2000cc-class

200

10

C-type diesel engines for automobiles decreased. This was
outweighed by an increase in production of 1CD 2000cc
direct injection turbo diesel engines with a common rail fuel

0
FY 98

99 00 01 02

0
FY

98 99 00 01 02

system. Total engine production was 384,000 units, up 31,000
from fiscal 2001.
In April 2001, Toyota Industries absorbed TMC’s Industrial

Vehicle Business

Equipment Sales Division. Sales of engines for forklift trucks

We currently assemble four models in the TMC lineup: Vitz

are now all intersegment transactions. Previously, we sold(Yaris in Europe), TMC’s strategic compact car; RAV4 compact

forklift engines to TMC, which were then supplied to us for

sport utility vehicle; bB Open Deck; and Sprinter Carib

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

37

Review of Operations
production of forklift trucks. Excluding intersegment sales,

production of car air-conditioning compressors. Toyota

sales of gasoline engines and diesel engines totaled 148,000

Industries now takes the lead in product development andand 194,000 units, respectively. On the same basis, total engine

manufacturing, while DENSO undertakes sales and limited

sales amounted to 342,000 units, down 11,000 from fiscal

manufacturing operations. Toyota Industries is taking over2001.

production of car air-conditioning compressors at DENSO’s

Net sales excluding intersegment sales totaled ¥114.9

Toyohashi Plant in Japan. Overseas, production will be sharedbillion (US$862.1 million), an increase of 12.5%, reflecting abetween the two companies on a country-by-country basis.

higher ratio of value-added products and consequent increasein the average unit sales price.

Materials Handling Equipment Segment
Car Air-Conditioning Compressor Business

The Materials Handling Equipment Segment manufactures andCar air-conditioning compressors developed andsells forklift trucks, warehouse trucks and materials handling

manufactured by Toyota Industries are marketed to theleading auto manufacturers worldwide through DENSO

systems such as automated storage and retrieval systems, andautomatic guided vehicle systems.

Corporation (“DENSO”). Sales of car air-conditioning
compressors in the domestic market remained strong.
Overseas, increased orders and stable car sales in Europe

Net Sales ofthe Materials Handling
Equipment Segment

Operating Income of
the Materials Handling
Equipment Segment

fiscal 2001. Overseas, we sold 8.7 million units, up 788,000.

(¥ Billion)(¥ Billion)

Total unit sales amounted to 13.8 million, up 1.2 million.

400

15

worked to our advantage. Orders increased in North America
as well. In Japan, we sold 5.1 million units, up 436,000 over300

Car Air-Conditioning
Compressor Unit Sales

10
200(Million Units)
15

5
100

10

0
FY

98 99 00 01 02

0
FY

98 99 00 01 02

5

Net sales of the Materials Handling Equipment Segment

0FY

98 99 00 01 02

Japan
North America
EuropeAsia and Oceania

totaled ¥353.0 billion (US$2,649.5 million), an increase of 49.3%
over fiscal 2001. Operating income was ¥13.4 billion (US$100.3
million), down 8.1%, due mainly to a one-time amortization of
goodwill in an amount of approximately ¥2.1 billion (US$15.6
million) following the acquisition of TMC’s Industrial

Net sales totaled ¥153.1 billion (US$1,149.1 million), up
9.7% over fiscal 2001.

Equipment Sales Division in April 2001.
The substantial increase in sales reflected two major factors.

In May 2001, in order to enhance the efficiency andFirst, in June 2000 Toyota Industries acquired BT Industries, atherefore global competitiveness of operations in this area,leading warehouse truck manufacturer based in Sweden. BT

Toyota Industries and DENSO agreed to integrate their

Industries’ sales were consolidated in Toyota Industries’ results

38

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

for the full fiscal year, whereas they were consolidated only for

Textile Machinery Segment

the second half of fiscal 2001. Second, in April 2001 TMC

This segment comprises the Spinning Machinery Business,transferred its Industrial Equipment Sales Division to Toyota

with the manufacture of ring spinning frames at its core, andIndustries, which accounted for approximately ¥27 billion

the Weaving Machinery Business, based on the manufacture(US$202 million) of the increase in net sales.

of air-jet looms. Toyota Industries is a world leader in the air-In the forklift truck business excluding BT Industries, sales
were down in North America but up in Europe. In thejet loom and spinning machinery fields.
Net sales of the Textile Machinery Segment amounted todomestic market, sales of our exhaust-free GENEO-B (7FB

¥30.7 billion (US$230.4 million), a decrease of 7.6% from fiscal

outside Japan) electric counterbalanced forklift truck

2001. Despite aggressive organizational reform, decreased

continued strong, supported by good demand forsales resulted in an operating loss of ¥0.4 billion (US$2.9

environment-friendly vehicles. The GENEO-R (7FBR outside

million). The export ratio in this segment is very high, andJapan) electric reach trucks, launched in January 2001 mainly

exports, mainly to Asia, accounted for approximately 93% offor the Japanese market, and the High-Pick Lift (7FBPR andtotal net sales for fiscal 2002.

7FBP) electric order picking trucks, marketed in October 2001,
also contributed to total sales.
Sales of materials handling systems, which comprise

Net Sales of
the Textile Machinery
Segment

Operating Income (Loss) of
the Textile Machinery
Segment

substantially, contributing to the overall good performance of(¥ Billion)(¥ Billion)

this segment. BT Industries’ orders received were slightly up

40

1

automatic guided vehicle systems and automated storage
and retrieval systems for the domestic market, increased

over fiscal 2001. Orders received in Europe remained steady,but orders received in North America showed a large

030decrease due to the adverse economic environment. On the(1)other hand, BT Industries’ sales registered a double-digit
percentage increase over fiscal 2001, with sales in Europe

20(2)

continuing strong and sales in North America slightly up,
reflecting order backlogs at the beginning of 2001. However,

10

(3)

since sales in North America for fiscal 2002 exceeded orders
received, the order backlog decreased.
The Materials Handling Equipment Segment also

0
FY 99

00

01

(4)
FY

02

99

00

01

02

manufactures and sells tow tractors, shovel loaders, sweepers
and other industrial equipment. As a result of our acquisitionof TMC’s Industrial Equipment Sales Division in April 2001, we

Spinning Machinery Business

now undertake comprehensive materials handling

Although exports to Uzbekistan decreased, sales inequipment operations, from design through production to

Bangladesh increased on the back of vigorous sales activities.

sales and marketing. This puts us in an even better position to

As a result, net sales of the Spinning Machinery Businessdeliver high levels of customer satisfaction.

totaled ¥12.3 billion (US$92.1 million), up 3.7% over fiscal

Note: Toyota Industries consolidated BT Industries’ operating results from thesecond half of 2000. The year-on-year comparative information on BT
Industries’ orders and sales is for reference only.

2001.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

39

Review of Operations
Net sales of the Others Segment totaled ¥32.8 billion

Weaving Machinery Business
Sales of air-jet looms totaled 3,322 units, a decrease of 1,256(US$246.3 million), down 18.0% from fiscal 2001. This was duefrom fiscal 2001. Sales in India increased, but were down into the adverse impact of the worldwide IT crash on the

China, Indonesia, South Korea and Taiwan. Sales of water-jet

Electronics Business, including TIBC. Sales of press dies andlooms, at 1,225 units, showed a slight increase. Sales in China

production equipment also decreased. Operating income wasincreased, but decreased in South Korea and the U.S. Net sales¥4.5 billion (US$33.6 million), up 2.7%, due mainly toof the Weaving Machinery Business totaled ¥18.4 billion

improved profitability of businesses other than the(US$138.4 million), down 13.9% from fiscal 2001.

Electronics Business.
Note: ST-LCD is not consolidated but is accounted for by the equity method in
Toyota Industries’ consolidated financial results. Its operating income(loss) is not included in the operating income (loss) for this segment.

Others Segment
This segment, currently relatively small, comprises mainly new
businesses that have outstanding growth potential. A corebusiness in this segment is ST Liquid Crystal Display Corp.
(“ST-LCD”), a joint venture that we established with Sony
Corporation in 1997. ST-LCD manufactures low-temperaturepolysilicon TFT-LCDs, expected to be the next-generation LCD.
TIBC Corporation (“TIBC”), a joint venture with Ibiden Co., Ltd.
established in 1998, is another core business within thissegment. TIBC manufactures ball grid array (BGA) plastic
package substrates for IC chipsets, and flexible printed circuit(FPC) substrates for smart cards. This segment also includes
the manufacture and sales of press dies and production
equipment, and other businesses.

Net Sales of
the Others Segment

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

50

5

40

4

30

3

20

2

10

1

0
FY

40

98 99 00 01 02

0
FY

98 99 00 01 02

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

Financial Section
Consolidated Six-Year Summary

42Management’s Discussion and Analysisof Financial Condition and Results of Operations

43

Consolidated Balance Sheets

52

Consolidated Statements of Income

54

Consolidated Statements of Shareholders’ Equity

55

Consolidated Statements of Cash Flows

56

Notes to Consolidated Financial Statements

57

Report of Independent Accountants

80

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

41

Consolidated Six-Year Summary
Toyota Industries Corporation
Years ended March 31, 2002

Millions of yen

2002

2001

2000

1999

1998

1997

¥ 980,163¥ 767,383¥ 625,773¥ 558,876¥ 572,698¥530,851

Operating income

46,33047,304

28,867

24,81432,72932,675

Income before income taxes

47,86638,22027,162

23,172

33,202

31,157

Net income

27,311

22,637

13,686

10,391

20,491

17,931

Total assets¥1,770,401¥1,869,642¥ 685,914¥ 617,071¥ 593,004¥556,291

Shareholders’ equity

878,812951,298

316,293

301,158

304,097

281,154

Common stock

68,02268,01940,17840,17840,13331,458

Number of shares outstanding at year-end(excluding treasury stock) (thousands)

312,796313,260

283,260

283,296287,752

282,233¥ 396,470¥ 298,794¥ 191,992¥ 178,737¥ 150,417¥116,738

Depreciation and amortization

55,17446,45442,752

34,38027,95828,043

Capital expenditures

88,320127,273

44,74660,46862,00735,408

Research and development expenses

29,98526,19624,062

23,231

23,112

19,691

Net sales

Overseas sales

Per share of common stock (yen):
Net income — basic

¥

87.28

¥

75.90

¥

48.32

¥

36.30

¥

72.33

¥

63.55

Net income — diluted

78.26

67.77

43.18

32.62

63.48

55.20

Shareholders’ equity

2,809.54

3,036.77

1,116.62

1,063.05

1,056.81

996.18

19.00

17.00

16.00

16.00

16.00

16.00

Return on equity (ROE) (%)

3.0

3.6

4.4

3.4

7.0

6.5

Return on assets (ROA) (%)

1.5

1.8

2.1

1.7

3.6

3.6

Return on sales (ROS) (%)

2.8

2.9

2.2

1.9

3.6

3.4

Debt / equity ratio (%)

35.9

30.7

60.5

51.6

37.5

46.0

Interest coverage (times)

5.8

9.1

14.5

16.4

17.6

13.0

EBITDA (millions of yen)

97,54079,92164,681

51,03355,21255,54823,05621,11813,132

12,797

11,23910,738Cash dividends
Indices:Number of employees

Notes: 1. The differences of the accounting methods for fiscal 2000 and fiscal 2001 are described in Notes to Consolidated Financial Statements.
2. Net income per share, ROE and ROA are computed based on the average number of shares, shareholders’ equity and total assets, respectively, during each year.
3. Debt / equity ratio = Interest-bearing debt / Shareholders’ equity
4. Interest coverage = (Operating income + Interest and dividends income) / Interest expenses
5. EBITDA = Income before income taxes + Interest expenses - Interest and dividends income + Depreciation and amortization

42

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

Management’s Discussion and Analysisof Financial Condition and Results of Operations
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on information known tomanagement as of June 27, 2002. It includes forward-looking statements concerning the expected future performance of Toyota Industries
Corporation. Please refer to “Cautionary Statement with Respect to Forward-Looking Statements” at the beginning of this annual report,
which pertains to the report as a whole.

Liquidity and Capital Resources

Financial Position

Toyota Industries’ financial policy is to ensure sufficient

Total assets as of the end of the fiscal year ended March 31,

financing and liquidity for its business activities and to2002 (“fiscal 2002”) stood at ¥1,770.4 billion, a decrease ofmaintain the strength of its balance sheet. Currently, in¥99.2 billion (5.3%) from fiscal 2001.

principle, funds for investments and other long-term capital

Current assets decreased ¥6.0 billion (2.0%) to ¥295.3

needs are raised from retained earnings and long-term debt,

billion. This is mainly because decreases in cash and cash

and working capital needs are met through short-term bankequivalents and securities outweighed increases in trade notesloans. Long-term debt financing is carried out mainly throughand accounts receivable and inventories. Cash and cash

issuance of bonds, including convertible bonds, and bankequivalents decreased ¥24.2 billion (25.4%) to ¥71.1 billion.

loans.

Trade notes and accounts receivable increased ¥10.4 billion

Exceptionally, the 7.4 billion Swedish krona (¥89.2 billion)(10.6%) to ¥107.8 billion. This is due mainly to theused for the acquisition of BT Industries AB (“BT Industries”) in

consolidation of the industrial equipment sales operation ofJune 2000 was raised through issuance of commercial paper,

Toyota Motor Corporation (“TMC”) in April 2001. Short-termbonds and new shares. The decision to issue the new sharesinvestments decreased ¥14.6 billion (64.7%) to ¥8.0 billion.

was based on a comprehensive management evaluation madefrom a medium-term perspective. The aim was to maintain astrong financial condition and expand Toyota Industries’ rangeof shareholders and investors worldwide. Part of the funds

Total Assets, Shareholders’ Equity
and Shareholders’ Equity Ratio

raised through the issuance of new shares has been(¥ Billion)(%)

appropriated as investments in plant and equipment for the

2,000

80

1,500

60

1,000

40

500

20

Car Air-Conditioning Compressor Business and otheroperations.
In addition to current assets such as cash and cash
equivalents, time deposits and securities, Toyota Industries
maintains ¥100.0 billion of commercial paper issuance capacity
as of March 31, 2002. Toyota Industries’ financial condition
remains solid. Through the use of cash and cash equivalents,
current assets such as time deposits and securities, as well as
free cash flows and fund-raising from financial institutions,Toyota Industries believes that it will be able to provide
sufficient funds for the working capital necessary to expand
existing operations and develop new projects, and for future
investments.

0
FY

0

98

99

00

01

02

Total Assets
Shareholders’ Equity
Shareholders’ Equity Ratio (%)

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

43

Management’s Discussion and Analysisof Financial Condition and Results of Operations
Inventories increased ¥17.7 billion (33.6%) to ¥70.5 billion, andCash Flows

the inventory turnover period increased from 19.7 days to

Net cash and cash equivalents provided by operating activities

23.0 days.

was ¥81.1 billion, an increase of ¥2.7 billion (3.4%) over fiscal

Property, plant and equipment increased ¥42.9 billion

2001. Net cash and cash equivalents used in investing activities(14.6%) to ¥337.6 billion, attributable to an increase in

decreased ¥49.2 billion (31.5%) to ¥106.7 billion. Net cash andmachinery, equipment and vehicles, as well as buildings andcash equivalents provided by financing activities decreased

structures. Intangible assets increased ¥6.9 billion (7.8%) to¥93.2 billion (98.7%) to ¥1.2 billion. Including translation¥94.9 billion.

adjustments, cash and cash equivalents decreased ¥24.2 billion

Investments and other assets decreased ¥143.0 billion(25.4%) to ¥71.1 billion.

(12.1%) to ¥1,042.6 billion. This is attributable largely to adecrease in the market prices of shares of Toyota Group
companies, including TMC, and other shares held by Toyota

Cash Flows

Industries. Toyota Industries, primarily in its Automobile(¥ Billion)

Segment, has a very close business relationship with each of100

the Toyota Group companies, and it recognizes that holding
securities of each of these business partners contributes tomutual management stability. From a long-term point of view,

50

0Toyota Industries firmly believes that maintaining andimproving the competitive strength of the Toyota Group
raises its own profitability and contributes to increasing

(50)

(100)

shareholder value.
Current liabilities increased ¥23.0 billion (10.8%) from fiscal(150)

2001 to ¥236.6 billion. This is due mainly to increases in shortterm bank loans, reflecting the consolidation of materials
handling equipment sales subsidiaries. Trade notes andaccounts payable was ¥111.3 billion, an increase of ¥7.8 billion(7.5%). Short-term bank loans increased ¥10.2 billion (43.9%)

(200)
FY

98

99

00

01

02

Net Cash Provided by Operating Activities
Net Cash Used in Investing Activities
Net Cash Provided by (Used in) Financing Activities

to ¥33.4 billion.
Long-term liabilities were ¥636.1 billion, a decrease of ¥50.5
billion (7.4%). This is because deferred tax liabilities decreased¥71.6 billion as a result of a decrease in the market value ofinvestment securities, and long-term debt increased
Minority interest in consolidated subsidiaries increased ¥0.7

change in accounting standards for retirement benefits was
charged to income in fiscal 2001. In fiscal 2002, depreciation

billion (4.0%) to ¥18.9 billion.
Shareholders’ equity decreased ¥72.5 billion (7.6%) to¥878.8 billion. This is mainly because net unrealized gains onother securities decreased ¥102.3 billion and retained earnings
increased ¥20.6 billion. Shareholders’ equity per share at yearend decreased to ¥2,809.54 from ¥3,036.77.

TOYOTA INDUSTRIES CORPORATION

Depreciation and amortization increased ¥8.7 billion to ¥55.2
billion, which was offset by the fact that cumulative effect of¥13.5 billion.

44

The increase in net cash provided by operating activities
reflects mainly the increase in income before income taxes.

ANNUAL REPORT 2002

was ¥48.7 billion, and amortization of intangibles and goodwill
were ¥1.5 billion and ¥5.0 billion, respectively.

Depreciation and Amortization

The amounts used for purchase of property, plant andequipment by principal segment were ¥53.7 billion, up ¥3.4(¥ Billion)

billion (6.8%), in the Automobile Segment, and ¥9.4 billion, up

60¥1.2 billion (14.6%), in the Materials Handling Equipment
Segment. In January 2002, Toyota Industries made an
additional investment of ¥10.0 billion in ST Liquid Crystal
40

Display Corp. (“ST-LCD”), a 50-50 joint venture with Sony
Corporation, in order to establish a second production line forlow-temperature polysilicon TFT-LCD panels in the fall of 2001.

20

Sony also invested an additional ¥10.0 billion. As a result, thetotal paid-in capital of ST-LCD reached ¥50.0 billion.
A decrease in net cash provided by financing activities

0
FY

98

99

00

01

02

reflected the fact that the fiscal 2001 figure included proceedsfrom issuance of common stock and bonds in amounts ofAutomobile
Materials Handling Equipment
Textile Machinery
Others (Including Corporate or Elimination)

Net cash used in investing activities decreased due mainly¥55.2 billion and ¥39.8 billion, respectively. For fiscal 2002,
Toyota Industries paid ¥5.6 billion in cash dividends.

Overview of Performance

to a decrease of ¥85.4 billion in payments for acquisition ofManagement of Foreign Exchange Risks

subsidiaries’ stock. In addition, Toyota Industries used ¥73.6

The average exchange rate of the yen to the U.S. dollar (TTM)billion to purchase property, plant and equipment, an increasein fiscal 2002 was ¥125.09, a year-on-year depreciation ofof ¥18.5 billion over fiscal 2001, and ¥23.7 billion for¥14.51 (13.1%).
Overseas sales increased ¥97.7 billion (32.7%) over fiscal

acquisition of business.

2001 to ¥396.5 billion, accounting for 40.4% of total sales. Thisis due primarily to the large increases in sales in Europe andNorth America which accompanied the consolidation of BT

Capital Expenditures

Industries’ results into Toyota Industries’ accounts for the full(¥ Billion)

year, as well as the transfer of TMC’s industrial equipment sales

150

operation.
Overseas sales and the ratio of overseas sales to total sales
are likely to remain at this high level as sales of TOYOTA- and100

BT-brand materials handling equipment are expected tocontinue to increase in Europe and the U.S., and the overseas
operations of the Car Air-Conditioning Compressor Business

50

will also expand.
To hedge the foreign exchange risks arising from the export
and import of materials, parts and products, Toyota Industries

0
FY

98

99

00

01

02

Automobile
Materials Handling Equipment
Textile Machinery
Others (Including Corporate or Elimination)

uses derivative instruments (foreign currency forward
contracts and foreign currency option contracts). Toyota
Industries is also making efforts to procure materials and parts
and to produce finished goods in areas closer to overseas
markets in order to reduce currency exchanges.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

45

Management’s Discussion and Analysisof Financial Condition and Results of Operations
Operating Performance Highlights
by Business Segment

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

Net sales figures for each segment described below do not

1,000

50

include intersegment transactions.

800

40

up ¥106.0 billion (23.2%) over fiscal 2001. Within this segment,

600

30

400

20

200

10

Net sales of the Automobile Segment totaled ¥563.6 billion,
net sales of the Vehicle Business totaled ¥280.1 billion, an
increase of ¥84.2 billion (43.0%). In April 2001, Toyota
Industries started production of the RAV4, a compact sportutility vehicle. However, production of the Vitz (Yaris in Europe)decreased because TMC started production of the Yaris in

0
FY

0

98

99

00

01

02

France. Total production decreased 29,000 units (10.4%) to
247,000 units. The increase in net sales reflects the fact that
TMC started charging for engines and other parts, whereas
previously such parts had been supplied free of cost. As thisNet Sales
Overseas Sales
Overseas Sales Ratio (%)

change caused an increase of ¥67.5 billion in both sales andcost of sales, there was no effect on the gross profit of Toyota
Industries. Net sales of the Engine Business totaled ¥114.9
billion, an increase of ¥12.8 billion (12.5%), due mainly to

Operating Performance
In fiscal 2002, the Japanese economy remained sluggish. A
global economic slowdown resulted in decreased exports,
production and capital investment, while a weakening of thedomestic jobs market kept consumer spending stagnant.
Although the global economy was severely affected by theterrorist attacks in September 2001, it showed signs of an
upturn from the beginning of 2002.
In this operating environment, Toyota Industries focused its
efforts on product quality and retaining the trust of its
customers. It also made efforts to strengthen its corporate
structure by stepping up the development of attractive
products, aggressively conducting sales promotions andcarrying out a company-wide program to reduce costs.
Toyota Industries’ net sales for fiscal 2002 increased ¥212.8
billion (27.7%) over fiscal 2001 to ¥980.2 billion, and net
income increased ¥4.7 billion (20.6%) to ¥27.3 billion, marking
a record high for a second consecutive year. The increase in net
sales is due primarily to an increase in sales of the Automobile
Segment and Materials Handling Equipment Segment. The
increase in net income is due largely to the growth in net sales,
as well as the success of efforts to reduce costs and increase
productivity.

46

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

increased sales of CD-type diesel engines. Net sales of the Car
Air-Conditioning Compressor Business totaled ¥153.1 billion,
an increase of ¥13.6 billion (9.7%). Sales were up both in Japanand overseas, due mainly to new product development,
strengthened sales promotion and increased production
capacity.
Net sales of the Materials Handling Equipment Segment
totaled ¥353.0 billion, an increase of ¥116.5 billion (49.3%) overfiscal 2001. The increase reflected steady domestic sales andthe consolidation of the operating results of BT Industries forthe full year (Note 2(1)). These factors were partially offset byadverse market conditions in North America.
Net sales of the Textile Machinery Segment totaled ¥30.7
billion, a decrease of ¥2.5 billion (7.6%) from fiscal 2001.
Though Toyota Industries engaged in vigorous sales andservice activities, including the display of selections of its latest
products, from current models to next-generation models, atinternational exhibitions, these efforts could not make up for
decreased exports to Indonesia, Thailand and South Korea.
Net sales of the Others Segment totaled ¥32.8 billion,a decrease of ¥7.2 billion (18.0%) from fiscal 2001.

Cost of Sales andSelling, General and Administrative Expenses

Operating Income

Toyota Industries’ cost of sales for fiscal 2002 increased ¥165.6

fiscal 2002 decreased ¥1.0 billion (2.1%) from fiscal 2001 to

billion (25.0%) over fiscal 2001 to ¥828.6 billion. This reflects¥46.3 billion. Operating income ratio decreased from 6.2% tothe fact that TMC charged Toyota Industries for engine and

4.7%.

Due to the factors summarized above, operating income forother parts in an amount of ¥67.5 billion in the Automobile
Segment, as well as the increase in sales of the Materials
Handling Equipment Segment. The ratio of cost of sales to net
sales improved from 86.4% to 84.5%, due primarily to the

Operating Income andOperating Income Ratio

effects of increases in productivity and capacity utilization(¥ Billion)(%)

ratio driven by increased production and cost reduction

50

10

40

8

30

6

20

4

10

2

activities.
Selling, general and administrative (SGA) expenses
increased ¥48.1 billion (84.4%) to ¥105.2 billion. The ratio of
SGA expenses to net sales increased from 7.4% to 10.7%,
largely as a result of the consolidation of materials handlingequipment sales subsidiaries, including BT Industries.
Amortization of goodwill increased ¥3.5 billion over fiscal
2001, of which an amount of approximately ¥2.0 billion wasused for a one-time amortization of goodwill following theconsolidation of materials handling equipment sales

0FY

subsidiaries.

0

98

99

00

01

02

Operating Income
Operating Income Ratio (%)

Research and development expenses, included in SGA andmanufacturing costs, increased ¥3.8 billion (14.5%) to ¥30.0
billion, representing 3.1% of net sales. By principal segment,
research and development expenses were ¥18.1 billion in the
Automobile Segment and ¥9.2 billion in the Materials

Non-Operating Income and Expenses
Non-operating income for fiscal 2002 increased ¥6.9 billion(42.3%) over fiscal 2001 to ¥23.1 billion. This was because

Handling Equipment Segment.

interest income increased ¥4.4 billion as a result of theconsolidation of BT Industries for the full year.
Non-operating expenses increased ¥2.6 billion (13.5%) over

R&D Expenses andR&D Expenses to Net Sales Ratio

fiscal 2001 to ¥21.6 billion. This was because interest expenses(¥ Billion)

increased ¥4.4 billion as a result of the consolidation of BT

(%)

30

6

Industries for the full year.

Ordinary Income
204Ordinary income increased ¥3.3 billion (7.5%) over fiscal 2001
to ¥47.9 billion.

10

2

0
FY

0

98

99

00

01

02

R&D Expenses
R&D Expenses to Net Sales Ratio (%)

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

47

Management’s Discussion and Analysisof Financial Condition and Results of Operations
Extraordinary Gains and Losses

Net Income, ROE and ROS

No item was registered for fiscal 2002. The adoption of new
accounting standards for retirement benefits, which became(¥ Billion)

(%)

30

12

20

8

10

4

effective on April 1, 2000, led to an aggregate funding shortfallof ¥19.1 billion in retirement benefit obligation for fiscal 2001,
and the whole shortfall was accounted for as an extraordinary
loss. To compensate for this loss, ¥15.1 billion was posted as an
extraordinary gain by an employee retirement benefit trust,established through the contribution of certain investment
securities held by Toyota Industries. Also, a change was made in
the treatment of Toyota Industries’ retirement and severance
benefits for directors and corporate auditors. This had beentreated as an expense recorded at the time of payment. In

0
FY

0

98

99

00

01

02

order to make period earnings more appropriate and the
Net Income
ROE (%)ROS (%)

financial statements healthier beginning from fiscal 2001,
Toyota Industries changed the accounting method to provide
for actual amounts payable during the term based on its
internal rules. Accordingly, a ¥2.3 billion provision for
retirement and severance benefits for directors and corporate
auditors was recorded as an extraordinary loss.

Net Income per Share(¥)
100

Income before Income Taxes
Income before income taxes was ¥47.9 billion, an increase of80¥9.6 billion (25.2%) over fiscal 2001.
60

Income Taxes
Net of current and deferred income taxes was ¥19.7 billion, up

40¥4.9 billion (32.9%) over fiscal 2001. The effective income tax
20

rate increased from 38.8% to 41.2%.

Minority Interest in Consolidated Subsidiaries
Minority interest in consolidated subsidiaries increased ¥0.1
billion to ¥0.8 billion over fiscal 2001.

Net Income
Net income for fiscal 2002 was ¥27.3 billion, an increase of ¥4.7
billion (20.6%) over fiscal 2001. Return on sales (ROS)
decreased from 2.9% to 2.8%. Return on equity (ROE), using the
average at fiscal 2002 and fiscal 2001 year-ends, decreased
from 3.6% to 3.0%. Net income per share increased from ¥75.90
to ¥87.28, and diluted net income per share increased from
¥67.77 to ¥78.26.

48

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

0
FY

98

Basic
Diluted

99

00

01

02

Strategies and Projections
for the Fiscal Year Ending March 31, 2003

The second category, which comprises the Car
Air-Conditioning Compressor Business, the Materials Handling
Equipment Business and the Textile Machinery Business, isBusiness Strategies

identified as a business field in which Toyota Industries must

Since its establishment as a textile machinery manufacturer

cultivate further development of global markets by precisely

over 75 years ago, Toyota Industries has expanded the scope ofgrasping customers’ needs, and developing and marketingits specific characteristics. The operational strategies for thesestate-of-the-art products that meet these needs through thecategories are based on the mission assigned to each.

application of original technologies. Firmly believing thattechnological improvement is the key to competitiveness,

First Category: Vehicle Business and Engine BusinessToyota Industries strives to strengthen its technological<Mission>development capabilities by fostering the training and

As a member of the Toyota Group, to contribute to the highdevelopment of superior engineers. Since the Car Air-

quality and technological advances of TOYOTA-brand cars.

Conditioning Compressor Business and the Materials Handling
Equipment Business are positioned as core businesses, Toyota

Second Category: Car Air-Conditioning Compressor

Industries places a priority on them in its allocation ofBusiness, Materials Handling Equipment Business andmanagement resources. In addition, on April 1, 2001, Toyota

Textile Machinery BusinessIndustries established TOYOTA Material Handling Company as a<Mission>uniquely independent company within Toyota Industries. The

To aggressively expand global markets through themain purpose of this move was to strengthen independent

development of products using Toyota Industries’ uniquemanagement in the unit by giving it the authority needed totechnologies.

respond flexibly and speedily to changes in the businessenvironment and to emerge a winner in the face of intensifying

Third Category: Electronics Business<Mission>
To be a key source of Toyota Industries’ future growth.

global competition.
The third category, the Electronics Business, which includes
the production of LCDs, will also be made a priority in Toyota
Industries’ allocation of management resources in order to

The first category, the Vehicle Business and the Engine

develop this activity into a core business in the future. This is a

Business, handles mainly the production of vehicles consigned

field characterized by rapid advances in technologicalby TMC and production of engines for TOYOTA-brand cars. To

innovation. Toyota Industries recognizes that it must

play a more important role in the Toyota Group, Toyota

strengthen its research and development capability to

Industries is making continual efforts to improve its

maintain competitiveness in this field. Continuing capital

production technologies and strengthen quality control. For

expenditures will be required to do this. Swift decision-making

Toyota Industries, this field of business provides a stable

is also required for success in this business, which depends on

platform for its own growth, while also contributing to therapidly getting production on track, improving the rejection

success of the Toyota Group. Aiming to play a more important

rate of products and achieving a return on investment. Aimingrole in the development and production of TOYOTA-brand cars

to participate in the Electronics Business and expand

and engines, Toyota Industries will step up its efforts tooperations in the short term, and to diversify risks by enteringstrengthen its research and development capability andnew areas of this business, Toyota Industries has not only

improve productivity. In its work in this category for TMC,

carried out independent product development, but has also

Toyota Industries will also make proposals for the design andentered into joint ventures with both Sony Corporation andlaunch of auto parts and compact cars, and actively work to

Ibiden Co., Ltd. Toyota Industries believes that this strategy has

ensure that such proposals are adopted.

been successful to date and views this category as a key sourceof future corporate growth.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

49

Management’s Discussion and Analysisof Financial Condition and Results of Operations
More Efficient Management of Funds

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

Until March 2002, the full amount of deposits in financial

billion. We also obtained a warrant that when exercised in May

institutions that have headquarters in Japan was fully

2003 will raise our holding to 51%. This will turn Aichi into one

protected by the Deposit Insurance Corporation of Japanof our subsidiaries, and raise our total investment amount to(DICJ), a government organization under the Deposit¥7.0 billion.

Insurance Law. Effective April 2002, the guaranteed sum
insured was reduced to a maximum principal of ¥10 million

Forecast for Fiscal 2003

per depositor per financial institution, plus interest (limited

For fiscal 2003, ending March 31, 2003, Toyota Industries

coverage). To achieve more efficient fund utilization, Toyota

forecasts consolidated net sales of ¥990.0 billion, ordinary

Industries Group is pushing ahead with localized fundincome of ¥48.0 billion and net income of ¥23.5 billion. These

management by region.

projections are based on an exchange rate of ¥125=US$1.

At Toyota Industries Group, we are spreading risk by
switching to more secure credits and reviewing relationships
with banks with a view to establishing deposit limits in

Dividend Policy

accordance with bank credit ratings. Also, to minimize risks to

Toyota Industries Corporation’s dividend policy is to continue

the working capital of the Group, Toyota Industries has started

paying stable dividends, while giving overall consideration toto take in the surplus funds of its subsidiaries. In Northbusiness results and dividends payout ratio, in order to meet

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

the expectations of shareholders.

our holding companies, is promoting intensive management

Toyota Industries’ Ordinary General Meeting ofof funds. TINA is mainly responsible for efficient appropriation

Shareholders, held on June 27, 2002, approved a year-end cashof funds by coordinating surpluses and shortfalls among

dividend of ¥10.0 per share. Including the interim cash

Group companies and borrowing directly from Toyota

dividend of ¥9.0 per share, cash dividends for the year totaled

Industries Corporation. From fiscal 2001, ended December 31,¥19.0 per share, an increase of ¥2.0 per share over fiscal 2001.

2001, TINA and its subsidiaries have paid taxes on a

The dividend payout ratio was 23.8%.

consolidated basis. Tax planning through consolidated tax

Toyota Industries views retained earnings as an important

payment is expected to reduce Toyota Industries’ effective

resource for securing future profits for its shareholders, and it

income tax rate.

intends to strategically invest to aggressively pursue businessexpansion and strengthen its management foundations.

Capital and Business Collaboration

Toyota Industries also use reserves to repurchase treasury

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

stocks.

Industries and Aichi Corporation (“Aichi”) voted to conclude acomprehensive agreement on capital and businesscollaboration between the two companies. Aichi is listed on

Stock Repurchase Program

the Tokyo and Nagoya Stock Exchanges as a manufacturer of

On May 10, 2002, the Board of Directors of Toyota Industries

special-purpose vehicles such as aerial lift equipment for

Corporation resolved to propose an agenda item asking forconstruction works. Through this collaboration, both

authorization to repurchase its shares by a shareholder

companies will be able to offer product lineups that best

resolution to be adopted at the Ordinary General Meeting of

exploit the strengths of each company. Toyota Industries will

Shareholders held on June 27, 2002. This will allow theconcentrate on the manufacture of materials handling

Company to implement flexible capital policies in accordance

equipment such as forklift trucks, while Aichi will specialize inwith the business environment. The Board of Directors ofspecial-purpose vehicles.

Toyota Industries Corporation is authorized to repurchase up

On May 14, 2002, Aichi issued and allocated 20,056,000

to 20 million of the Company’s common shares (representing

shares of common stock to Toyota Industries. This amounts to

6.4% of the Company’s issued shares) at a total purchase pricenot exceeding ¥50 billion.

50

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

Change in Share Trading Unit
To broaden the range of investors in Toyota Industries’ stockand to promote the trading of its shares, Toyota Industries
lowered the minimum trading unit of its shares from 1,000 to
100 with effect from August 1, 2001. Accordingly, Toyota
Industries’ shares listed on the Tokyo Stock Exchange, Nagoya
Stock Exchange and Osaka Securities Exchange have since
been traded in units of 100 shares. As a result, the number ofshareholders increased by 2,867—from 14,937 as of March 31,
2001 to 17,804 as of March 31, 2002.

Toyota Industries’ Relationship to Toyota
Motor Corporation
In 1933, Kiichiro Toyoda, eldest son of founder Sakichi Toyoda
and Managing Director of Toyota Industries (then Toyoda
Automatic Loom Works, Ltd.) at the time, established theAutomobile Division within the Company. In 1937, theAutomobile Division was spun off and became an
independent company, Toyota Motor Co., Ltd. (the present
Toyota Motor Corporation).
As of March 31, 2002, Toyota Industries holds 5.4% (196,725
thousand shares) of TMC’s total shares issued. As of the samedate, TMC holds 24.7% (77,282 thousand shares) of Toyota
Industries’ total shares issued. Toyota Industries is one of TMC’s
affiliates accounted for by the equity method.
TMC assigns the assembly of certain cars and the
production of automobile engines to us. We also directly or
indirectly manufacture and sell other automobile components
to TMC. In fiscal 2002, our net sales to TMC totaled ¥411.0
billion and accounted for 41.9% of consolidated net sales.
As a member of the Toyota Group, we intend to enhance
the competitiveness of TMC and other Toyota Group members
by contributing in such areas as quality, cost, delivery andtechnologies. We believe that this will be reflected in increases
in sales and profits for the Toyota Group, thus increasing theshareholder value of Toyota Industries.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

51

Consolidated Balance Sheets
Toyota Industries Corporation
As of March 31, 2002 and 2001

Thousands of
U.S. dollars (Note 1)

Millions of yen

ASSETS

2002

2001

2002

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

Trade notes and accounts receivable (Notes 8 and 10)

71,120¥95,297$533,734

107,82197,455

Short-term investments (Note 5)

7,979

22,62559,880Inventories (Note 6)

70,511

52,763529,163

Deferred tax assets (Note 15)

10,081

8,686

75,655

Other current assets

29,731

25,684

223,122

Less — allowance for doubtful accounts(1,917)(1,159)(14,387)

295,326

301,351

2,216,330

Buildings and structures (Note 8)

102,659

88,858770,424

Total current assets

809,163

Fixed assets:
Property, plant and equipment:
Machinery, equipment and vehicles (Notes 8 and 16)

149,259

135,406

1,120,143

Tools, furniture and fixtures (Note 16)

15,483

14,550116,195

Land (Note 8)

46,55042,103349,343

Construction in progress

23,692

13,826

177,801

Total property, plant and equipment

337,643294,7432,533,906

Intangible assets:
Software

6,347

1,580

47,633

Goodwill

88,52886,407664,375

Total intangible assets

94,87587,987712,008

Investments in securities (Notes 5 and 8)

986,355

1,145,176

7,402,289

Long-term loans

11,5338,106

86,552Long-term prepaid expenses

11,927

5,354

89,508Deferred tax assets (Note 15)

2,237

1,374

16,788Other investments and other assets (Note 14)

30,621

25,663229,801

(116)

(112)

(871)

1,042,557

1,185,561

7,824,067

Investments and other assets:

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

52

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

1,475,075

1,568,291

11,069,981¥1,770,401¥1,869,642$13,286,311

Thousands of
U.S. dollars (Note 1)

Millions of yen

LIABILITIES AND SHAREHOLDERS’ EQUITY

2002

2001

2002

¥ 111,251¥ 103,444

Short-term bank loans (Note 8)

33,371

23,193

250,439

Other payables

21,662

17,114

162,567

Accrued expenses

36,32732,220272,623

Accrued income taxes

8,611

12,36464,623

Deposits received from employees

18,54818,030139,197

Current liabilities:
Trade notes and accounts payable (Note 10)$

834,904

Deferred tax liabilities (Note 15)

494

15

3,707

Other current liabilities (Note 8)

6,375

7,220

47,842

236,639

213,600

1,775,902

Long-term debt (Notes 7 and 8)

281,983

268,495

2,116,195

Deferred tax liabilities (Note 15)

315,978

387,548

2,371,318

Allowance for retirement benefits (Note 14)

28,84025,534

216,435

Other long-term liabilities

9,293

5,041

69,741

Total long-term liabilities

636,094

686,618

4,773,689

Total liabilities

872,733

900,218

6,549,591

Minority interest in consolidated subsidiaries

18,85618,126

141,508

68,02268,019510,484

Capital surplus

89,32788,513670,372

Retained earnings

253,975

233,368

1,906,004

Total current liabilities
Long-term liabilities:

Shareholders’ equity (Note 11):
Common stock, par value ¥50:
Authorized — 1,091,245,000 shares
Issued— 313,299,249 shares in 2002 and 313,296,225 shares in 2001

Net unrealized gains on other securities

456,415558,673

3,425,253

Foreign currency translation adjustments

12,361

2,746

92,765

Treasury stock at cost (Note 20) — 503,091 shares in 2002 and 36,093 shares in 2001

(1,288)(21)(9,666)

Total shareholders’ equity
Total liabilities and shareholders’ equity

878,812951,298

6,595,212¥1,770,401¥1,869,642$13,286,311

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

53

Consolidated Statements of Income
Toyota Industries Corporation
For the years ended March 31, 2002, 2001 and 2000

Thousands of
U.S. dollars (Note1)

Millions of yen

2002

2001

2000

2002

Net sales¥980,163¥767,383¥625,773$ 7,355,820

Cost of sales (Note 12)828,626

663,013557,554

6,218,582

Gross profit

151,537

104,370

68,2191,137,238

Selling, general and administrative expenses (Note 12)
Operating income

105,207

57,06639,352789,546

46,33047,304

28,867

347,692

8,618

4,242

901

64,675Non-operating income:Interest income
Dividends income

7,726

6,957

6,864

57,981Other non-operating income

6,779

5,050

8,554

50,875Non-operating expenses:
Interest expenses

10,844

6,446

2,532

81,381Other non-operating expenses

10,743

12,582

15,49280,62247,86644,525

27,162359,220–

15,080–––19,056––

Ordinary income
Extraordinary gains:
Gain on securities contribution
to employee retirement benefit trust
Extraordinary losses:
Cumulative effect of change in accounting standards
for retirement benefits
Provision for retirement and severance benefits
for directors and corporate auditors

–

2,329

–

–

Income before income taxes

47,86638,22027,162359,220

Income taxes — current (Note 15)

20,843

21,161

15,395

156,420

Income taxes — deferred (Note 15)(1,136)(6,338)(2,812)(8,525)

848

760

893

6,364

¥ 27,311¥ 22,637¥ 13,686$ 204,961

Minority interest in consolidated subsidiaries
Net income

Yen

U.S. dollars

Net income per share — basic¥87.28¥75.90¥48.32$0.66

Net income per share — diluted

78.26

67.77

43.18

0.59

Cash dividends per share

19.00

17.00

16.00

0.14

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

54

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

Consolidated Statements of Shareholders’ Equity
Toyota Industries Corporation
For the years ended March 31, 2002, 2001 and 2000

Millions of yen

Numberof shares(Thousands)

Commonstock

CapitalsurplusRetainedearnings

Net unrealized
Treasurygains on other Translationstock
securities
adjustments at cost

Balance at March 31, 1999
Increase due to increase inconsolidated subsidiaries
Cumulative effect of the adoption oftax effect accounting (Note 3)
Net income
Cash dividends
Bonuses to directors and corporate auditors
Treasury stock owned by
newly consolidated subsidiaries

283,296¥ 40,178¥ 60,673¥ 200,308

–

–

–

702

–

–

–

–
–
–
–

–
–
–
–

–
–
–
–

5,487
13,686(4,533)
(187)

–
–
–
–

–
–
–
–

–
–
–
–

(36)

–

–

–

–

–

(20)

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

283,260–––
30,00040,178–––27,84160,673–––
27,840215,463
22,637(4,533)
(199)
–

–
–
–
–
–

–
–
–
–
–

(21)
–
–
–
–

–

–

–

–

558,673

–

–

–

–

–

–

–

2,746

–

Balance at March 31, 2001

313,260

68,01988,513

233,368

558,673

2,746

(21)

–
–
–
–
–
3
(467)
–

–
–
–
–
–
3
–
–

–
–
–
–
–
3
–
811

27,311(5,635)
(258)
–
–
–
–
(811)

–
–
–
(102,258)
–
–
–
–

–
–
–
–
9,615
–
–
–

–
–
–
–
–
–
(1,267)–

312,796¥68,022¥ 89,327¥253,975¥ 456,415¥ 12,361¥(1,288)

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

¥

–

¥

–

¥

(1)

Thousands of U.S. dollars (Note 1)

Net unrealized
Treasurygains on other Translationstock
securities
adjustments at cost

Commonstock

CapitalsurplusRetainedearnings

Balance at March 31, 2001
Net income
Cash dividends
Bonuses to directors and corporate auditors
Net unrealized gains on other securities
Foreign currency translation adjustments
Conversions of convertible bonds
Treasury stock at cost
Transfer due to merger of a subsidiary$ 510,461
–
–
–
–
–
23
–
–

$ 664,263
–
–
–
–
–
23
–
6,086

$ 1,751,355 $ 4,192,668 $ 20,608
204,961––(42,290)––(1,936)–––(767,415)–––
72,157––––––(6,086)––$

Balance at March 31, 2002

$510,484$670,372$1,906,004$(9,666)$3,425,253$92,765

(158)
–
–
–
–
–
–
(9,508)–The accompanying notes are an integral part of these financial statements.

TOYOTA INDUSTRIES CORPORATION ANNUAL REPORT 2002

55

Consolidated Statements of Cash Flows
Toyota Industries Corporation
For the years ended March 31, 2002, 2001 and 2000

Thousands of
U.S. dollars (Note 1)

Millions of yen

Cash flows from operating activities:
Income before income taxes
Adjustments to reconcile income before income taxes
to net cash provided by operating activities:
Depreciation and amortization
Increase (decrease) in allowance for doubtful accounts
Interest and dividends income
Interest expenses
Equity in net loss of affiliates
Decrease (increase) in receivables
Increase in inventories(Decrease) increase in payables
Others, net
SubtotalInterest and dividends income received
Interest expenses paid
Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities:
Payments for purchases of marketable securities
Proceeds from sales of marketable securities
Payments for purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Payments for purchases of investment securities
Proceeds from sales of investment securities
Payments for acquisition of subsidiaries’ stock
resulting in change in scope of consolidation
Payments for loans madeProceeds from collections of loans
Payments for acquisition of business
Others, net
Net cash used in investing activities
Cash flows from financing activities:
Increase in short-term bank loans, net
Proceeds from issuance of commercial paper
Redemption of commercial paper
Proceeds from long-term bank loans
Repayments of long-term bank loans
Proceeds from issuances of bonds
Proceeds from issuances of common stock
Cash dividends paid
Cash dividends paid for minority shareholders
Others, net
Net cash provided by financing activities
Translation adjustments of cash and cash equivalents
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents
due to increase in consolidated subsidiaries
Cash and cash equivalents at end of year
The accompanying notes are an integral part of these financial statements.

56

TOYOTA INDUSTRIES CORPORATION ANNUAL REPORT 2002

2002

2001

2000

2002

¥ 47,866¥ 38,220¥ 27,162$ 359,220

55,174
251(16,343)
10,844928
8,081(1,371)(3,403)(174)
101,853
16,372(10,907)(26,240)
81,07846,454(129)(11,199)6,446
973(2,450)(3,922)
8,178
8,914
91,485
11,212(6,155)(18,129)
78,413

42,681(36)(7,765)2,532
5,036(8,427)(1,998)14,563549
74,297
7,779(2,532)(11,486)
68,058414,064
1,884(122,649)
81,381
6,964
60,645(10,289)(25,539)(1,306)764,375
122,867(81,854)(196,923)
608,465(5,884)
4,213(73,606)
2,617(21,121)
4,033(1,719)4,323(55,127)
2,384(9,667)2,107(3,506)
7,608(52,082)
1,147(16,101)26(44,158)
31,617(552,390)
19,640(158,507)
30,266(705)(3,139)2,575(23,719)8,025(106,711)(86,137)(3,411)
11,266–(19,890)(155,871)–(10,503)
3,958(1,499)3,765(67,187)(5,291)(23,557)
19,325(178,004)
60,226(800,833)

1,062
–
–
8,048
(2,755)––(5,634)
(614)
1,118
1,225
231
(24,177)
95,297

6,884
80,000(80,000)
4,111(6,586)
39,79755,229(4,533)(420)(10)
94,472951
17,96577,332

1,934
–
–
1,633
(1,032)
29,849–(4,533)(330)(21)
27,500(1,808)26,563
49,955

7,970––
60,398(20,675)––(42,281)(4,607)
8,389
9,194
1,734
(181,440)
715,174–¥ 71,120–¥ 95,297

814¥ 77,332–$ 533,734

Notes to Consolidated Financial Statements
1. Basis of presenting consolidated financial statements
On June 27, 2001, the Ordinary General Meeting of
Shareholders of Toyoda Automatic Loom Works, Ltd. approved
to change the company name to Toyota Industries Corporation
effective August 1, 2001. The accompanying consolidated
financial statements have been prepared based on theaccounts 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 Japanese Commercial Codeand the Securities and Exchange Law, and in conformity withaccounting principles and practices generally accepted inJapan, which are different in certain respects from theapplication and disclosure requirements of International
Accounting Standards.
Certain items presented in the consolidated financial

statements submitted to the Director of Kanto Finance Bureau
in Japan have been reclassified in these accounts for theconvenience of readers outside Japan.
The consolidated financial statements are not intended topresent the consolidated financial position, results ofoperations and cash flows in accordance with accounting
principles and practices generally accepted in countries andjurisdictions other than Japan.
Amounts in U.S. dollars are included solely for theconvenience of readers outside Japan. The rate of ¥133.25=US$1, the approximate rate of exchange prevailing at March
29, 2002, has been used in translation. The inclusion of suchamounts are not intended to imply that the Japanese yen havebeen or could be converted into equivalent amounts in U.S.
dollars at this rate or any other rates.

2. Summary of significant accounting policies(1) Consolidation
The consolidated financial statements include the accounts of
the Company and its 111 subsidiaries (26 domestic
subsidiaries and 85 overseas subsidiaries, which are listed on
page 94 and 95) in 2002, 100 subsidiaries (22 domestic
subsidiaries and 78 overseas subsidiaries) in 2001 and 29
subsidiaries (22 domestic subsidiaries and seven overseas
subsidiaries) in 2000. The unconsolidated subsidiaries arethose which have no material effect on the consolidated
financial statements of Toyota Industries, or Toyota Industries’
majority ownership of such subsidiaries would be temporary.
For the year ended March 31, 2002, 15 subsidiaries were
newly added to the scope of consolidation and four
companies were excluded from the scope of consolidation.
Since five subsidiaries out of 15 subsidiaries are deemed as
being acquired by the Company as of the semiannual period
end, the results of operations of the latter half of the year of
those subsidiaries are consolidated in the consolidated
financial statements. One unconsolidated subsidiary is
excluded from the scope of consolidation since ownership is
temporary.
For the year ended March 31, 2001, 72 subsidiaries,
including 63 BT Industries Group companies, were newly

added to the scope of consolidation. Since 64 subsidiaries outof 72 subsidiaries were deemed as being acquired by theCompany as of the semiannual period end, the results ofoperations of the latter half of the year of those subsidiaries
are consolidated in the consolidated financial statements. Twounconsolidated subsidiaries are excluded from the scope of
consolidation since ownership is temporary.
For the year ended March 31, 2000, as a result of adoptionof the new accounting standards, two companies which had
been treated as affiliates became consolidated subsidiaries.
The fiscal years of certain subsidiaries are different from thefiscal year of the Company. Since the difference is not morethan three months, the Company is using those subsidiaries’
statements for those fiscal years, making adjustments for
significant transactions that materially affect the financial
position or results of operations.
All significant intercompany transactions, balances andunrealized profits within Toyota Industries have been
eliminated.
A full portion of the assets and liabilities of the acquired
subsidiaries is stated at fair value as of the date of acquisitionof control.

(2) Investments in unconsolidated subsidiaries and affiliates
Investments in one unconsolidated subsidiary and 18 majoraffiliates in 2002, two unconsolidated subsidiaries and 17
major affiliates in 2001 and two affiliates in 2000 are
accounted for by the equity method of accounting.
Investments in unconsolidated subsidiaries and affiliates notaccounted for by the equity method are stated at cost due totheir insignificant effect on the consolidated financial
statements.
The major affiliates accounted for by the equity method arelisted on page 95.

TOYOTA INDUSTRIES CORPORATION ANNUAL REPORT 2002

57

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

exchange rates and all revenue and expense accounts aretranslated at prevailing fiscal average rates. The resulting
translation adjustments are included as a separate componentof shareholders’ equity from the year ended March 31, 2001.
Changes in accounting policies are discussed in Note 3.

(4) Cash and cash equivalents
Cash and cash equivalents include all highly liquid
investments, generally with original maturities of three months
or less, that are readily convertible to known amounts of cash

and are so near maturity that they present insignificant risk ofchanges in value because of changes in interest rates.

(5) Marketable securities and investment in securities
Until the year ended March 31, 2000, marketable securities(current) and investment in securities (non-current) with amarket quotation on a stock exchange were valued at thelower of moving-average cost or market value. Marketablesecurities and investment in securities without a market
quotation were valued at moving-average cost.
Effective beginning the year ended March 31, 2001, Toyota
Industries adopted new accounting standards for financial
instruments that include accounting for marketable securities
and investment in securities. The new accounting standards
require Toyota Industries to classify securities into four
categories by purpose of holding: trading securities, held-tomaturity securities, other securities and investments inunconsolidated subsidiaries and affiliates. Toyota Industries
had no trading securities or held-to-maturity securities as ofMarch 31, 2002 and 2001.
Other securities with readily determinable fair values arestated at fair value based on market prices at the end of theyear. Unrealized gains and losses are included in “Netunrealized gains on other securities” as a separate componentof shareholders’ equity. Cost of sales of such securities isdetermined by the moving-average method. Other securities
without readily determinable fair values are stated at cost, as
determined by the moving-average method.
Investments in unconsolidated subsidiaries and affiliates
are accounted for by the equity method (see Note 2(2) above).

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

(7) Property, plant and equipment, and depreciation
Property, plant and equipment are stated at cost. Depreciation
expenses of property, plant and equipment are computed
mainly by the declining-balance method for the Company andJapanese subsidiaries and by the straight-line method forforeign subsidiaries. Significant renewals and additions arecapitalized at cost. Repair and maintenance are charged toincome as incurred.
Accumulated depreciation as of March 31, 2002 and 2001
was ¥447,600 million (US$3,359,099 thousand) and ¥406,843
million, respectively.

(8) Intangible assets and amortization
Amortization of intangible assets is computed using thestraight-line method. Software costs for internal use areamortized by the straight-line method over their expected
useful lives (mainly five years).

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

(9) Allowances for doubtful accounts
Toyota Industries adopted the policy of providing an allowancefor doubtful accounts in an amount sufficient to cover possible
losses on collection by estimating individually uncollectible

amounts and applying to the remaining accounts a
percentage determined by certain factors such as historicalcollection experiences.

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

58

TOYOTA INDUSTRIES CORPORATION ANNUAL REPORT 2002

(11) Allowance for retirement benefits
Until the year ended March 31, 2000, allowance for retirement
benefits was calculated at the present value based on theamount that would be paid if all employees voluntarily retired.
Effective beginning the year ended March 31, 2001, Toyota
Industries adopted new accounting standards for retirement
benefits for employees. Toyota Industries accrues an amountwhich is considered to be incurred in the period based on theestimated projected benefit obligations and estimatedpension assets at the end of the year. To provide for retirement
benefits for directors and corporate auditors, an amount whichis required at the end of the year by an internal rule describing
the retirement benefits for directors is accrued. The change inaccounting policy is described in Note 3.

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

(13) Consumption tax
The consumption tax under the Japanese Consumption Tax Law
withheld by Toyota Industries on sales of goods is not included in
the amount of net sales in the accompanying consolidated

statements of income, and the consumption tax paid by Toyota
Industries under the law on purchases of goods and services,and expenses is not included in the related amount.

(14) Hedge accounting(a) Method of hedge accounting
Mainly the deferral method of hedge accounting is applied. In
the case of foreign currency forward contracts, the hedged
items are translated at contracted forward rates if certain
conditions are met. In the year ended March 31, 2002 , foreignexchange forward contracts and foreign currency option
contracts are used for hedging risk of change in foreignexchange rate relating to accounts receivable.
(b) Hedging instruments and hedged items
Hedging instruments: derivatives instruments (interest rate
swaps, foreign currency forwards andforeign currency option contracts)
Hedged items:
risk of change in interest rate on
borrowings and risk of change inforward exchange rate on transactions
denominated in foreign currencies(monetary assets and liabilities,
marketable securities and forecasted
transactions)(c) Hedging policy
Hedging transactions are executed and controlled based on
Toyota Industries’ internal rule and Toyota Industries is
hedging interest rate risks and foreign currency risks. Toyota
Industries’ hedging activities are reported periodically to a
director responsible for accounting.
(d) Method used to measure hedge effectivenessHedge effectiveness is measured by comparing accumulatedchanges in market prices of hedged items and hedging
instruments or accumulated changes in estimated cash flows
from the inception of the hedge to the date of measurements
performed. Currently it is considered that there are highcorrelations between them.
(e) Others
Due to the fact that counterparties to Toyota Industries
represent major financial institutions which have highcreditworthiness, Toyota Industries believes that the overall
credit risk related to its financial instruments is insignificant.

(15) Appropriation of retained earnings
In the accompanying consolidated statements of shareholders’equity, the approved amount during the relevant fiscal year isreflected for the appropriation of retained earnings ofconsolidated subsidiaries. In Japan, the payment of bonuses todirectors and corporate auditors is made out of retained
earnings through an appropriation, instead of being charged
to income for the year.

(16) Income taxes
Effective beginning the year ended March 31, 2000, tax effectaccounting has been adopted. The change in accounting
policies is discussed in Note 3.
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.
TOYOTA INDUSTRIES CORPORATION ANNUAL REPORT 2002

59

(17) Net income per share
The computation of basic net income per share is based on theweighted-average number of outstanding shares of common
stock. The calculation of diluted net income per share is similar
to the calculation of basic net income per share, except thatthe weighted-average number of shares outstanding includes

the additional dilution from potential common stock
equivalents such as convertible bonds. Cash dividends per
share shown in the statements of income are the amounts
applicable to the respective years.

3. Changes in accounting policies and adoption of new accounting standards(1) For the year ended March 31, 2001(a) Allowance for retirement and severance benefits
for directors and corporate auditors
The Company’s retirement and severance benefits for directors
and corporate auditors were previously recorded as expenses
at the time they were awarded. However, in order to makeperiod earnings more appropriate, beginning the year ended
March 31, 2001, these expenses are accrued based on the
directors’ retirement benefit rule. Compared to the previous
method, operating income and ordinary income decreased by¥196 million and income before income taxes decreased by¥2,525 million.
(b) Accounting for retirement benefits
Effective beginning the year ended March 31, 2001, the new
accounting standards for retirement benefits have been
applied. As a result, operating income and ordinary income
decreased by ¥1,005 million and income before income taxes
decreased by ¥4,982 million. Also, cumulative effect of changein accounting standards for retirement benefits of ¥19,057
million was charged to income and recorded as an
extraordinary loss, and gain on securities contribution toemployee retirement benefit trust of ¥15,080 million was
charged to income and recorded as an extraordinary gain.
Allowance for retirement and severance benefits andunamortized prior service cost are included in allowance forretirement benefits.

(c) Accounting for financial instruments
Effective beginning the year ended March 31, 2001, the new
accounting standards for financial instruments have been
applied. As a result, ordinary income and income before
income taxes increased by ¥359 million. At the beginning of
the year ended March 31, 2001, Toyota Industries reviewed theholding purposes of the securities it owns. As a result,marketable securities expiring within one year were classified
under current assets as marketable securities and the others
were classified as investment in securities. As a result,marketable securities decreased by ¥394 million andinvestment in securities increased by the same amount.
(d) Accounting for foreign currency transactions
Effective beginning the year ended March 31, 2001, theamended accounting standards for foreign currencytransactions have been applied. Neither profits nor losses
resulted from this change. Effective beginning the year ended
March 31, 2001, translation adjustments, which had been listed
under assets in the consolidated balance sheets as of March
31, 2000, has been shifted under shareholders’ equity andincluded in minority interest in consolidated subsidiaries dueto the amendment of Japanese Regulations Concerning the
Terminology, Forms and Preparation Methods of Consolidated
Financial Statements.

(2) For the year ended March 31, 2000(a) Consolidation and investments in affiliates
Since the year ended March 31, 2000, Toyota Industries has
adopted the new accounting standards for preparation of
consolidated financial statements. To follow the new standards,
Toyota Industries has changed its criteria with regard to theidentification of companies to be consolidated from thepercentage-of-ownership approach to the effective control

60

TOYOTA INDUSTRIES CORPORATION ANNUAL REPORT 2002

approach. Pro forma disclosure of the effect of the retroactive
application of the new accounting standards is not required
under accounting standards generally accepted in Japan. As aresult of the adoption of the new standards, two companies
have been newly consolidated because Toyota Industries wasdeemed to have effective control over those two companies.

(b) Translation of foreign subsidiaries’
financial statements
Until the year ended March 31, 1999, revenue and expenses
accounts of overseas consolidated subsidiaries had beentranslated into Japanese yen at year-end rates. From the year
ended March 31, 2000, the Company has used annual average
rates. This change was made to present the operating results
more precisely as the significance of the overseas consolidated
subsidiaries had been increasing and their revenue andexpenses were incurred throughout the fiscal years.
As a result of this change, net sales increased by ¥10,431
million, ordinary income increased by ¥551 million and income
before income taxes increased by ¥198 million for the year
ended March 31, 2000 compared to the amounts accounted
for under the former policies.

(c) Income taxes
Tax effect accounting has been adopted from the year ended
March 31, 2000 due to the amendment of the accounting
standards for income taxes. As a result, deferred tax assets
were newly recognized in an amount of ¥9,867 million, ¥4,556
million in current assets and ¥5,311 million in investments andother assets, and deferred tax liabilities were recognized in an
amount of ¥2,042 million in the consolidated financial
statements as of March 31, 2000. Also, net income for the year
ended March 31, 2000 and retained earnings as of March
31,2000 increased by ¥2,970 million and ¥8,458 million,
respectively.
In addition to the above, cumulative effect of the adoptionof tax effect accounting of ¥5,487 million at the beginning of
the year ended March 31, 2000 was recognized as adjustments
in retained earnings.

4. Acquisitions(1) For the year ended March 31, 2002
Summary of assets and liabilities that increased due to the acquisition of business (materials handling sales operation) from Toyota
Motor Corporation is as follows:
Millions of yen

Thousands of
U.S. dollars

Current assets¥11,912$ 89,396

Fixed assets

14,957112,248

Current liabilities(1,184)(8,886)Long-term liabilities(1,152)(8,645)Acquisition cost

24,533

184,113(814)(6,109)¥23,719$178,004

Less: cash and cash equivalents
Cash payment for the acquisition(2) For the year ended March 31, 2001
By May 31, 2000, the Company had acquired 97.1% of theshare capital of BT Industries AB, a holding company of BT
Industries Group, which consists of materials handlingequipment manufacturing and sales companies. Due to thisacquisition, Toyota Industries recorded goodwill amounting to¥61,557 million, which is amortized over 20 years.
The summarized assets and liabilities arising from theacquisition, the acquisition cost to purchase BT Industries AB’sshares, and the net cash payment made for the acquisition are
as follows:
Millions of yen

Current assets¥ 56,289

Fixed assets

117,255

Current liabilities(33,559)

Long-term liabilities(49,450)

Minority interest(762)

Acquisition cost of BT Industries AB

89,773

Less: cash and cash equivalents in BT Industries AB(3,745)

Cash payment for the acquisition of BT Industries AB¥ 86,028

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

61

(3) For the year ended March 31, 2000
Summary of assets and liabilities that increased due to the acquisition of the water-jet loom business of Nissan Texsys Co., Ltd. is asfollows:
Millions of yen

Current assets¥1,222

Fixed assets

386

Total assets

1,608

Current liabilities

99

Long-term liabilities

11

Total liabilities¥ 110

5. Marketable securities(1) As of and for the year ended March 31, 2002(a) Other securities with readily determinable fair value as of March 31, 2002 are as follows:
Thousands of U.S. dollars

Millions of yen

Acquisition
cost

Carrying
amountDifference

Acquisition
cost

Carrying
amount¥160,158¥941,875¥781,717$1,201,936 $7,068,480 $5,866,544

2,999

3,000

1

22,506

22,514

8

163,157

944,875

781,718

1,224,442

7,090,994

5,866,552

15,324

10,014(5,310)115,00275,152(39,850)

Difference

Securities with carrying amountexceeding acquisition cost:
Stocks
Bonds
Corporate bonds
Subtotal
Securities with carrying amountnot exceeding acquisition cost:
Stocks
Bonds
Government and municipal bonds, etc.
Corporate bonds

0

0

–

0

0

–

7,093

7,090

(3)

53,23153,208

(23)

3

3

–

23

23

–

22,42017,107(5,313)

168,256

128,383(39,873)¥185,577¥961,982¥776,405

Other bonds
SubtotalTotal

In this year, Toyota Industries recorded ¥302 million (US$2,269
thousand) of impairment on an equity security included in$1,392,698 $7,219,377 $5,826,679

securities with carrying amount not exceeding the cost lines.

(b) Other securities sold during the year ended March 31, 2002 are as follows:
Millions of yen

Proceeds¥17,967

62

Thousands of U.S. dollars

Realized gains

Realized losses

¥242

¥11

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

Proceeds$134,837

Realized gains

Realized losses$1,816$83

(c) Contents and carrying amount of securities (excluding held-to-maturity bonds within securities with fair value) without readily
determinable fair value as of March 31, 2002 are as follows:
Carrying amountThousands of
U.S. dollars

Millions of yen

Held-to-maturity securities

¥

–

$

–

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

14,996

112,540

Money management funds

20,440

153,396753

Foreign unlisted bonds(d) Redemption schedule of securities which have maturities within other securities as of March 31, 2002 is as follows:
Millions of yen

Over 1 year
within5 years

Within1 yearThousands of U.S. dollars

Over 5 years
within
10 yearsOver
10 years

Over 1 year
within5 years

Within1 yearOver 5 years
within
10 yearsOver
10 years

Bonds
Government bonds
Corporate bonds

¥

0

¥–

¥–

0

$–

$–

8,379

–

1,711

–

–

62,882

12,841

–

–

2

7

–

–

15

52

–

–

¥8,381¥1,718¥–¥–$ 62,897$12,893

$–

$–

Other
Total

¥

$

–

$

(2) As of and for the year ended March 31, 2001(a) Other securities with readily determinable fair value as of March 31, 2001 are as follows:
Millions of yen

Acquisition
cost

Carrying
amount¥159,376¥1,110,176¥950,800

13,702

13,723

21

–

–

–

–

–

–

173,078

1,123,899

950,821

7,995

7,560

(435)

Difference

Securities with carrying amount exceeding acquisition cost:
Stocks
Bonds
Corporate bonds
Other bonds
Other
Subtotal
Securities with carrying amount not exceeding acquisition cost:
Stocks
Bonds
Government and municipal bonds, etc.
Corporate bonds

0

0

–

2,498

2,475

(23)

3

3

–

Other bonds
Other

720

720

–

Subtotal

11,216

10,758(458)¥184,294¥1,134,657¥950,363

ANNUAL REPORT 2002

63

Total
In this year, Toyota Industries recorded ¥2 million of impairment
on an equity security included in securities with carrying

amount not exceeding the cost lines.

TOYOTA INDUSTRIES CORPORATION

(b) Other securities sold during the year ended March 31, 2001 are as follows:
Millions of yen

Proceeds

Realized gains

Realized losses¥23,689¥15,317¥0Proceeds include ¥17,845 million of proceeds from theestablishment of retirement benefit trust. And, realized gains

include ¥15,080 million of gain on securities contribution toemployee retirement benefit trust.

(c) Contents and carrying amount of securities (excluding held-to-maturity bonds within securities with fair value) without readily
determinable fair value as of March 31, 2001 are as follows:
Millions of yen

Held-to-maturity securities¥–

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

12,644

Commercial paper used in repurchase agreements

3,999

Bonds used in repurchase agreements

2,000

Money management funds

341

Foreign unlisted bonds

310(d) Redemption schedule of securities which have maturities within other securities as of March 31, 2001 is as follows:
Millions of yen

Over 1 year
within5 years

Within1 yearOver 5 years
within
10 yearsOver
10 years

Bonds
Government bonds¥

Corporate bonds
Other
Securities other than bonds
Total

–

¥

–

¥0

¥

–

10,702

4,518

–

978

3

10

–

300

6,022

129

–

–

¥16,727¥4,657¥0¥1,278

6. Inventories
Inventories as of March 31, 2002 and 2001 consist of the following:Thousands of
U.S. dollars

Millions of yen

2002

2001

2002

Finished goods¥27,490¥16,164$206,304

Raw materials

11,733

10,32988,052Work in process

25,193

21,370

189,066

Supplies
Total

64

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

6,095

4,900

45,741¥70,511¥52,763$529,163

7. Long-term debt
(1) Long-term debt as of March 31, 2002 and 2001 consists of the following:Thousands of
U.S. dollars

Millions of yen

2002

2001

2002

¥ 75,742¥ 75,748$ 568,420

2.70% bonds due 2008 without collateral

30,00030,000225,141

1.50% bonds due 2003 without collateral

20,00020,000150,094

2.15% bonds due 2008 without collateral

20,00020,000150,094

1.50% bonds due 2006 without collateral

15,00015,000112,570

1.94% bonds due 2009 without collateral

15,00015,000112,570

1.25% bonds due 2005 without collateral

20,00020,000150,094

1.91% bonds due 2010 without collateral

20,00020,000150,094

The Company:
0.35% convertible bonds due 2003 without collateral

Consolidated subsidiaries:
1.80% bonds due 2005

300

300

2,251

Long-term bank loans

67,89953,555509,561(1,958)(1,108)(14,694)¥281,983¥268,495$2,116,195

Less: current portion of long-term debt
Total
The conversion period of the 0.35% convertible bonds due 2003
is from May 1, 1996 to September 29, 2003 and the conversion
price was ¥1,983.90 (US$14.89) per share as of March 31, 2002.

The aggregate number of shares issuable upon conversion
thereof at such conversion price was 38,178 thousand shares.

(2) Annual maturities of long-term debt as of March 31, 2002 are as follows:Year ending March 31

Millions of yen

2003

¥

2004

1,958
146,964

Thousands of
U.S. dollars$

14,694
1,102,919

2005

3,783

28,3902006

25,309189,936

2007

15,603

117,096

2008 and thereafter
Total

TOYOTA INDUSTRIES CORPORATION

90,324

677,854¥283,941$2,130,889

ANNUAL REPORT 2002

65

8. Assets pledged as collateral(1) Assets pledged as collateral as of March 31, 2002 and 2001 are as follows:
Thousands of
U.S. dollars

Millions of yen

2002

2001

2002

Investments in securities¥21,854¥23,116$164,008

Buildings and structures

4,213

4,249

31,617

Land

3,715

3,190

27,880Machinery, equipment and vehicles

734

383

5,508

Trade notes and accounts receivable

449

200

3,369

Other

29

29

218

Total

¥30,994¥31,167$232,600(2) Secured liabilities as of March 31, 2002 and 2001 are as follows:
Thousands of
U.S. dollars

Millions of yen

2002

2001

2002

Other current liabilities¥18,468¥17,608$138,596

Short-term bank loans

10,923

8,702

81,974Long-term debt

2,691

1,867

20,195¥32,082¥28,177$240,765

Total

9. Contingent liabilities
Toyota Industries is contingently liable for guarantees as of March 31, 2002 and 2001 as follows:
Thousands of
U.S. dollars

Millions of yen

2002

2001

2002

¥

338

$ 1,966

Guarantees given by the Company¥ 262

Guarantees given by consolidated subsidiaries

5,205

3,468

39,062

Guarantee forwards given by the Company

3,881

3,363

29,126–

10,289–Acts similar to guarantees given by consolidated subsidiaries
Guarantees given by consolidated subsidiaries consist of421,480 and 288,278 thousand of Swedish krona as of March 31,
2002 and 2001, and acts similar to guarantees given by

consolidated subsidiaries consist of 855,299 thousand of
Swedish krona as of March 31, 2001.

10. Accounting for notes receivable and notes payable maturing at year-end date
Although year-end dates of the years ended March 31, 2002 and2001 were a holiday for banking institutions, the following
notes receivable and notes payable were accounted as if they
were settled at year-end date. Consequently, they are notincluded in trade notes and account receivable and trade notes
and accounts payable on the balance sheet as of March 31, 2002
and 2001, respectively.

Thousands of
U.S. dollars

Millions of yen

2002

2001

2002

Notes receivable

¥ 763

¥569

$ 5,730

Notes payable

1,529

857

11,47566

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

11. Shareholders’ equity
Under the Japanese Commercial Code, amounts equal to atleast 10% of the sum of the cash dividends and other external
appropriations paid by the Company and its domestic
subsidiaries must be set aside as a legal reserve until it equals
25% of common stock. The legal reserve may be used to reducea deficit or may be transferred to common stock by taking
appropriate corporate action. In consolidation, the legal
reserves of the Company and its domestic subsidiaries areaccounted for as retained earnings.
Year-end cash dividend is approved at the Ordinary General

Meeting of Shareholders of the Company held after the closeof the fiscal year to which the dividend is applicable. In
addition, interim cash dividends may be paid upon resolutionof the Board of Directors, subject to limitations imposed by theJapanese Commercial Code.
Proceeds from the conversion of convertible bonds havebeen accounted for in approximately equal amounts ascommon stock and capital surplus. At least 50% of the proceeds
have been accounted for as common stock, in accordance withthe provisions of the Japanese Commercial Code.

12. Research and development expenses
Research and development expenses, which are included inselling, general and administrative expenses and manufacturingcosts, amounted to ¥29,985 million (US$225,028 thousand),¥26,196 million and ¥24,062 million for the years ended March
31, 2002, 2001 and 2000, respectively.

13. Derivative instruments
For the years ended March 31, 2002 and 2001
(1) Qualitative disclosure about derivatives(a) Contents of derivative instruments into which Toyota
Industries entered, policy with respect to entering into
derivative instruments, and purpose of using derivative
instruments:
Toyota Industries uses interest rate swap agreements andforeign currency forward contracts to reduce interest raterisks on borrowings and to hedge foreign currency risks ontransactions denominated in foreign currencies(receivables and payables, securities, and forecasted
transactions),respectively.
In the year ended March 31, 2002, Toyota Industries also
used foreign currency option contracts to hedge foreign
currency risks on transactions denominated in foreign
currencies.
(b) Contents of risks related to derivative instruments:
Interest rate swaps, foreign currency forward contracts andforeign currency option contracts into which Toyota

Industries entered have risks of fluctuations in interest
rates and in foreign currency exchange rates. Due to thefact that counterparties to Toyota Industries represent
major financial institutions which have highcreditworthiness, Toyota Industries believes that theoverall credit risk related to its financial instruments is
insignificant.
(c) Controls in place over transactions handling derivative
instruments:
Hedging transactions are executed and controlled basedon Toyota Industries’ internal rule and Toyota Industries’
hedging activities are reported periodically to a director
responsible for accounting.
(2) Quantitative disclosure about derivatives
Toyota Industries omitted this information because hedge
accounting is applied to all of the derivative instruments into
which Toyota Industries entered.

14. Retirement benefits(1) Outline of retirement benefit plans:
The Company and its domestic subsidiaries maintain tax
qualified pension plans and lump-sum indemnities plans, bothof 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 pension planfrom lump-sum indemnities plan to tax qualified pension plan.
As of March 31, 2002, tax qualified pension plan covers 50% of
total plans. Also, the Company established an employee
retirement benefit trust.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 200267

(2) Components of allowance for retirement benefits as of March 31, 2002 and 2001 are as follows:
Thousands of
U.S. dollars

Millions of yen

2002

2001

2002

Benefit obligation¥ 80,039¥ 71,458$ 600,668

Plan assets(49,105)(46,513)(368,518)

Unfunded benefit obligation

30,93424,945

232,150

Unrecognized actuarial loss

(9,581)(4,812)(71,902)

Net amount recognized on the balance sheet

21,353

20,133

160,248

Prepaid pension expenses
Allowance for retirement benefits
Certain subsidiaries use the simplified method to determine
benefit obligations. Prepaid pension expenses are included inother investments and other assets. Allowance for retirement
benefits on the balance sheet includes ¥2,372 million(5,115)(2,598)(38,386)¥ 26,468¥ 22,731$ 198,634(US$17,794 thousand) and ¥2,803 million of allowance forretirement and severance benefits for directors and corporate
auditors as of March 31, 2002 and 2001, respectively, as
discussed in Note 3.

(3) Components of retirement benefit expenses for the years ended March 31, 2002 and 2001 are as follows:
Thousands of
U.S. dollars

Millions of yen

2002

2001

2002

Service cost

¥6,018¥ 3,799$45,163Interest cost

1,843

1,677

13,831

Expected return on plan assets

(704)

(637)

(5,283)–19,057

–

225

–

1,689

¥7,382¥23,896$55,400

Amortization of transition obligation
Amortization of unrecognized actuarial loss
Retirement benefit expenses

accounting standards for retirement benefit’s adoption,amortization of transition obligation also included ¥17,845
million of one-time amortization of retirement benefit
obligation which was equivalent to fair value of trust properties
at the time of its contribution.

Retirement expenses of subsidiaries which adopted thesimplified method are included in both service cost andamortization of transition obligation.
Due to the establishment of a retirement benefit trust in theyear ended March 31, 2001, which was the first year of(4) Assumptions used for calculation of retirement benefits for the years ended March 31, 2002 and 2001 are as follows:
2002

2001

Method of attribution of estimated retirement benefits
to periods of employee service: straight-line method
Discount rate

3.0%

3.0%

Expected return on plan assets

3.0%

3.0%

20 years

20 years

Amortization period of unrecognized actuarial gains or losses

Straight-line method over the averageremaining service period of employees
starting from following year

Amortization period of net transition obligation

68

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002–

1 year15. Income taxes(1) The significant components of deferred tax assets and liabilities as of March 31, 2002 and 2001 are as follows:
Thousands of
U.S. dollars

Millions of yen

2002

2001

2002

Deferred tax assets:
Allowance for retirement benefits

¥

4,090

¥

3,562

$

30,694

Trade receivables

3,282

3,203

Accrued expenses

3,272

2,330

24,555

Net operating loss carry-forwards for tax purposes

2,806

2,290

21,058Depreciation

2,386

1,708

17,906

Securities

1,456

1,034

10,927

709

1,058

5,321

Other

9,608

4,602

72,105

Subtotal

27,60919,787207,196

Enterprise tax payable

Less — valuation allowance
Total deferred tax assets

24,630(2,382)(2,448)(17,876)

25,227

17,339189,320

Deferred tax liabilities:
Other securities

319,819

391,484

2,400,143

Depreciation

4,290

1,618

32,195

Land

1,138

1,112

8,540

Reserve for advanced depreciation

338

384

2,537

Reserve for special depreciation

290

96

2,176

3,506

148

26,311

Total deferred tax liabilities

329,381394,8422,471,902

Net deferred tax liabilities¥(304,154)¥(377,503)$(2,282,582)

Other

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

Millions of yen

2002
Current assets — deferred tax assets¥ 10,081

2001
¥

2002

8,686

$

75,655Investments and other assets — deferred tax assets

2,237

1,374

16,788Current liabilities — deferred tax liabilities

(494)

(15)

(3,707)Long-term liabilities — deferred tax liabilities(315,978)(387,548)(2,371,318)

Net deferred tax liabilities¥(304,154)¥(377,503)$(2,282,582)

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 200269

(2) Reconciliations of differences between the statutory rate of income taxes and the effective rate of income taxes for the years
ended March 31, 2002, 2001 and 2000 are as follows:
2002
Statutory rate of income taxes

2001

2000

41.2%

41.2%

41.2%

Equity in losses of affiliates

0.8

1.0

7.6

Net pre-tax losses of subsidiaries

0.6

1.4

3.5

Elimination of dividend income

0.7

0.9

1.3

Dividends income and others permanently not recognized as taxable income

(5.4)

(6.7)

(8.6)

Addition (reduction) in taxes resulting from:Amortization of goodwill

4.1

–

–

Other

(0.8)

1.0

1.3

41.2%

38.8%

46.3%

Effective rate of income taxes

16. Leases(1) Finance leases (as a lessee) which do not transfer ownership of leased properties to lessees(a) Pro forma information regarding the leased properties such as acquisition cost and accumulated depreciation, which are notreflected in the accompanying consolidated balance sheets, as of March 31, 2002 and 2001 is as follows:
Thousands of
U.S. dollars

Millions of yen

2002

2001

2002

Machinery and equipment:
Acquisition cost equivalents
Accumulated depreciation equivalents¥5,849¥2,339$43,895

1,391

910

10,439

4,458

1,429

33,456

Acquisition cost equivalents

5,313

4,660

39,872

Accumulated depreciation equivalents

2,530

2,228

18,987

Tools, furniture and fixtures net balance equivalents

2,783

2,432

20,885

Total net leased properties¥7,241¥3,861$54,341

Machinery and equipment net balance equivalents
Tools, furniture and fixtures:

Acquisition cost equivalents include the imputed interest
expense portion because the percentage which is computed by

dividing future minimum lease payments by total balance ofproperty, plant and equipment at year-end is immaterial.

(b) Pro forma information regarding future minimum lease payments as of March 31, 2002 and 2001 is as follows:
Thousands of
U.S. dollars

Millions of yen

2002

2001

2002

Due within 1 year

¥1,937¥1,302$14,537

Due after 1 year

5,304

2,559

39,805

Total¥7,241¥3,861$54,342

The amount equivalent to future minimum lease payments asof the end of the year includes the imputed interest expense
portion because the percentage which is computed by dividing

70

TOYOTA INDUSTRIES CORPORATION ANNUAL REPORT 2002

future minimum lease payments by total balance of property,
plant and equipment at year-end is immaterial.

(c) Total lease payments for the years ended March 31, 2002, 2001 and 2000 are as follows:
Millions of yen

Thousands of
U.S. dollars

2002¥1,842$13,824

2001

1,505

–

2000

1,749

–

Pro forma depreciation expenses, which are not reflected in theaccompanying consolidated statements of income, arecomputed mainly by the straight-line method, which assumes

zero residual value and leasing term to be useful lives for theyears ended 2002, 2001 and 2000, and are equivalent to theamount of total lease payments of the above.

(2) Operating leases (as a lessee)(a) Pro forma future lease payments under operating leases as of March 31, 2002 and 2001 are as follows:
Thousands of
U.S. dollars

Millions of yen

2002

2001

2002

Due within 1 year

¥ 2,545¥ 5,116$19,099

Due after 1 year

9,696

9,543

72,766¥12,241¥14,659$91,865

Total(3) Finance leases (as a lessor) which do not transfer ownership of leased properties to lessees(a) Information regarding leased properties such as acquisition cost and accumulated depreciation under finance leases as ofMarch 31, 2002 and 2001 is as follows:
Thousands of
U.S. dollars

Millions of yen

2002

2001

2002

Machinery and equipment:
Acquisition cost

¥6,975¥–$52,345

Accumulated depreciation

4,005

–

30,056¥2,970¥–$22,289

Total net leased property(b) Pro forma information regarding future minimum lease payments as of March 31, 2002 and 2001 is as follows:
Thousands of
U.S. dollars

Millions of yen

2002
Due within 1 year

¥1,658

2001

2002
¥–

$12,443

Due after 1 year

2,966

–

22,259Total¥4,624¥–$34,702

The amount equivalent to future minimum lease payments
includes the imputed interest income portion because thepercentage which is computed by dividing future minimum

lease payments by total balance of property, plant andequipment at year-end is immaterial.

TOYOTA INDUSTRIES CORPORATION ANNUAL REPORT 200271

(c) Total lease receipts and depreciation expenses for the years ended March 31, 2002 and 2001 are as follows:
Thousands of
U.S. dollars

Millions of yen

2002

2001

2002

Total lease payments to be received¥2,220¥–$16,660

Depreciation expenses

1,112

–

8,345

(4) Operating leases (as a lessor)
Pro forma information regarding future minimum rentals under operating leases as of March 31, 2002 and 2001 is as follows:
Thousands of
U.S. dollars

Millions of yen

2002

2001

2002

Due within 1 year

¥ 4,525¥1,456$33,959

Due after 1 year

7,147

7,717

53,636¥11,672¥9,173$87,595

Total

17. Subsequent event
On June 27, 2002, the shareholders of the Company authorized
payment of a year-end cash dividend to shareholders of record asof March 31, 2002 of ¥10 (US$0.075) per share, or a total of ¥3,127
million (US$23,467 thousand), and bonuses to directors and

72

TOYOTA INDUSTRIES CORPORATION ANNUAL REPORT 2002

corporate auditors of ¥208 million (US$1,561 thousand). Cashdividends for the year totaled ¥19 (US$0.143) per share, includinginterim cash dividend of ¥9 (US$0.068).

18. Segment information(1) Business segments
As of and for the years ended March 31, 2002, 2001 and 2000:
Thousands of
U.S. dollars

Millions of yen

2002

2001

2000

2002

¥ 563,599¥457,631¥423,413$4,229,636

Sales:
Automobile
Outside customer sales
Intersegment transactions

15,412

4,097

3,335

115,662

579,011

461,728

426,748

4,345,298

353,043

236,502

149,0852,649,479

Materials handling equipment
Outside customer sales
Intersegment transactions

44

–

–

330

353,087

236,502

149,0852,649,809

30,70533,23823,135

230,432

50

–

–

375

30,75533,23823,135

230,807

Outside customer sales

32,81640,01230,140246,274

Intersegment transactions

11,056

4,531

2,613

82,972

Textile machinery
Outside customer sales
Intersegment transactions
OthersSubtotal
Elimination of intersegment transactions

43,87244,54332,753329,246

1,006,725

776,011

631,7217,555,160(26,562)(8,628)(5,948)(199,340)¥ 980,163¥767,383¥625,773$7,355,820¥ 550,051¥433,203¥402,320$4,127,962

Materials handling equipment

339,721

221,955

143,335

2,549,502

Textile machinery

31,14633,203

26,107

233,741

Others39,39040,17832,001

295,610

Elimination of intersegment transactions(26,475)(8,460)(6,857)(198,687)¥ 933,833¥720,079¥596,906$7,008,128¥

28,960¥ 28,525¥ 24,428$ 217,336

Total
Operating costs and expenses:
Automobile

Total
Operating income (loss):
Automobile

13,366

14,547

5,750

100,307

Textile machinery

Materials handling equipment

(391)

35

(2,972)(2,934)

Others

4,482

4,365

752

33,636

(87)

(168)

909

(653)

46,330¥ 47,304¥ 28,867$ 347,692

Elimination of intersegment transactions
Total

¥

TOYOTA INDUSTRIES CORPORATION ANNUAL REPORT 2002

73

(Continued from page 73)
Thousands of
U.S. dollars

Millions of yen

2002

2001

2000

2002

¥ 317,133¥ 282,504¥266,839$ 2,379,985

319,335

270,975

81,343

2,396,510

Assets:Automobile
Materials handling equipment
Textile machinery

22,32325,404

23,427

167,527

Others31,640

15,48718,012

237,448

Corporate assets or elimination
Total

1,079,970

1,275,272

296,293

8,104,841¥1,770,401¥1,869,642¥685,914$13,286,311

¥

¥

$

Depreciation and amortization:
Automobile

31,764¥ 31,707

18,882

10,766

7,751

141,704

797

1,034

978

5,981

Others

2,307

3,071

2,398

17,313

Corporate or elimination of intersegment transactions

(215)

(181)

(82)

(1,614)

Materials handling equipment
Textile machinery

Total

33,403

250,679¥

55,174¥46,454¥ 42,752$

414,063¥

61,023¥54,734¥ 33,058$

457,959

Capital expenditures:
Automobile

26,33770,673

5,426

197,651

Textile machinery

Materials handling equipment

523

320

1,042

3,925

Others

903

2,311

5,794

6,777

Corporate or elimination of intersegment transactions
Total

¥

(466)

(765)

(574)

88,320¥ 127,273¥ 44,746(3,497)$

662,815Main products of each segment are as follows:
Automobile …………………………… Passenger vehicles, diesel and gasoline engines, car air-conditioning compressors
Materials handling equipment . . ……… Counterbalanced forklift trucks, warehouse trucks, skid steer loaders, automated storage and retrieval systems, automatic guided vehicles
Textile machinery .. …………………… Ring spinning frames, air-jet looms, water-jet looms
Others ………………………………… Ball grid array plastic package substrates for IC chipsets, casting machines

Corporate assets as of March 31, 2002 and 2001, included incorporate assets or elimination amounting to ¥1,093,812 million(US$8,208,720 thousand) and ¥1,278,393 million, respectively,
consist mainly of cash and cash equivalents, short-term
investments and investments in securities held by the Company.
Effective beginning the year ended March 31, 2001, the new
accounting standards for retirement benefits have been
applied. Consequently, operating costs and expenses increasedby ¥721 million for the Automobile Segment, ¥197 million for
the Materials Handling Equipment Segment, ¥41 million for
the Textile Machinery Segment and ¥46 million for the Others
Segment, and operating income for each segment decreasedby the same amount.
Effective beginning the year ended March 31, 2001,
allowance for retirement and severance benefits for directors
and corporate auditors has been recorded. Consequently,
operating costs and expenses increased by ¥145 million for theAutomobile Segment, ¥37 million for the Materials Handling

74

TOYOTA INDUSTRIES CORPORATION ANNUAL REPORT 2002

Equipment Segment, ¥10 million for the Textile Machinery
Segment and ¥4 million for the Others Segment, andoperating income for each segment decreased by the sameamounts.
Effective beginning the year ended March 31, 2001, the new
accounting standards for financial instruments have been
applied. Consequently, assets increased by ¥40 million for the
Materials Handling Equipment Segment and ¥942,594 million
for corporate assets or elimination.
Effective beginning the year ended March 31, 2000, the new
accounting standards for income taxes have been applied.
Consequently, assets increased by ¥3,335 million for theAutomobile Segment, ¥1,221 million for the Materials
Handling Equipment Segment, ¥442 million for the Textile
Machinery Segment, ¥621 million for the Others Segment and¥4,247 million for corporate assets or elimination.
As discussed in Note 3, from the year ended March 31, 2000,
revenue and expense accounts of overseas subsidiaries have

been translated into Japanese yen at annual average rates,
while up to and including the year ended March 31, 1999, yearend rates had been used. Consequently, sales, operating
income, assets, depreciation and amortization, and capital
expenditures increased by ¥4,477 million, ¥251 million, ¥145
million, ¥287 million and ¥960 million, respectively, for theAutomobile Segment, and increased by ¥5,856 million, ¥338

million, ¥210 million, ¥135 million and ¥303 million,
respectively, for the Materials Handling Equipment Segment.
For the Textile Machinery Segment, sales, operating loss,
depreciation and amortization, and capital expenditures
increased by ¥99 million, ¥30 million, ¥12 million and ¥5
million, respectively, and assets decreased by ¥36 million.

(2) Geographical segments
As of and for the years ended March 31, 2002, 2001 and 2000:
Thousands of
U.S. dollars

Millions of yen

2002

2001

2000

2002

¥ 675,346¥586,087¥531,274$5,068,263

61,097

31,77025,309458,514

736,443

617,857

556,583

5,526,777

180,535

123,355

79,232

1,354,859

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

1,392

337

–

10,447

181,927

123,692

79,232

1,365,306

121,036

55,826–908,338

EuropeOutside customer sales
Intersegment transactions

5,426

749

–

40,720126,462

56,575–

949,058

3,246

2,115

15,26724,360

Others
Outside customer sales
Intersegment transactions

652

478

589

4,893

3,898

2,593

15,85629,253

1,048,730

800,717651,671

7,870,394(68,567)(33,334)(25,898)(514,574)¥ 980,163¥767,383¥625,773$7,355,820

Subtotal
Elimination of intersegment transactions
Total
Operating costs and expenses:¥ 695,442¥577,381¥533,987$5,219,077

North America

Japan

177,442

118,42274,5471,331,648

Europe125,345

53,724–

940,675

Others

4,011

2,841

15,35830,101Elimination of intersegment transactions
Total(68,407)(32,289)(26,986)(513,373)¥ 933,833¥720,079¥596,906$7,008,128¥

Operating income (loss):
41,001¥ 40,476¥ 22,596$ 307,700

North America

Japan

4,485

5,270

4,685

33,658Europe

1,117

2,851

–

8,383

Others

(113)

(248)

498

(848)

Elimination of intersegment transactions(160)(1,045)

1,088(1,201)

46,330¥ 47,304¥ 28,867$ 347,692

Total

¥

TOYOTA INDUSTRIES CORPORATION ANNUAL REPORT 2002

75

(Continued from page 75)
Thousands of
U.S. dollars

Millions of yen

2002

2001

2000

2002

Assets:Japan¥ 511,856¥ 460,474¥361,459$ 3,841,321

North America

156,188

126,52044,035

1,172,142Europe202,078

158,351–

1,516,532

Others

5,757

4,987

17,322

43,205

Corporate assets or elimination
Total

894,522

1,119,310

263,098

6,713,111¥1,770,401¥1,869,642¥685,914$13,286,311

Significant countries or areas belonging to each segment are as follows:
North America ………………………… U.S.A., Canada
Europe ………………………………… Sweden, France, Germany
Others ………………………………… India, China

Corporate assets as of March 31, 2002 and 2001, included incorporate assets or elimination amounting to ¥1,093,812 million(US$8,208,720 thousand) and ¥1,278,393 million, respectively,
consist mainly of cash and cash equivalents, short-term
investments and investments in securities held by the Company.
Effective beginning the year ended March 31, 2001, theEurope Segment was separated from the Others Segment
because business there increased in importance. Sales,
operating income and assets of the Europe Segment in theprior year were ¥14,822 million, ¥681 million and ¥13,472
million, respectively.
Effective beginning the year ended March 31, 2001, the new
accounting standards for retirement benefits have been
applied. Consequently, operating costs and expenses of theJapan Segment increased by ¥1,005 million and operating
income of the Japan Segment decreased by the same amount.
Effective beginning the year ended March 31, 2001,
allowance for retirement and severance benefits for directors
and corporate auditors have been recorded. Consequently,
operating costs and expenses of the Japan Segment increased

76

TOYOTA INDUSTRIES CORPORATION ANNUAL REPORT 2002by ¥196 million and operating income of the Japan Segment
decreased by the same amount.
Effective beginning the year ended March 31, 2001, the new
accounting standards for financial instruments have been
applied. Consequently, assets increased by ¥40 million for theJapan Segment and ¥942,594 million for corporate assets orelimination.
Effective beginning the year ended March 31, 2000, the new
accounting standards for income taxes have been applied.
Consequently, assets increased by ¥9,025 million for the Japan
Segment, ¥811 million for the North America Segment and ¥31
million for the Others Segment.
As discussed in Note 3, from the year ended March 31, 2000,
revenue and expense accounts of overseas subsidiaries havebeen translated into Japanese yen at annual average rates while
year-end rates had been used until the year ended March 31,
1999. Consequently, sales, operating income and assets
increased by ¥8,031 million, ¥475 million and ¥308 million for
the North America Segment, ¥2,401 million, ¥84 million and ¥11
million for the Others Segment.

(3) Overseas sales
For the years ended March 31, 2002, 2001 and 2000:
Thousands of
U.S. dollars

Millions of yen

2002

2001

2000

2002

Overseas sales:
North America¥181,177¥140,161¥ 90,314$1,359,677

Europe160,456

102,666–

1,204,173

Others54,83755,967

101,678

411,535

Total¥396,470¥298,794¥191,992$2,975,385

Total sales¥980,163¥767,383¥625,773$7,355,820

North America

18.5%

18.2%

14.4%

Europe

16.4

13.4

–

Others

5.5

7.3

16.3

40.4%

38.9%

30.7%

Ratio of overseas sales to total sales (%):

Total
Significant countries or areas belonging to each area are as follows:
North America ………………………… U.S.A., Canada
Europe ………………………………… Germany, France, U.K.
Others ………………………………… China, Indonesia, Australia, Korea, Taiwan, Thailand

The Europe area, which had been included in Others until theyear ended March 31, 2000, has been separately disclosed
beginning the year ended March 31, 2001 due to its increasedmateriality. Sales to the Europe area were ¥54,034 million (8.6%of total sales) in the previous year.
As discussed in Note 3, beginning the year ended March 31,

2000, revenue and expense accounts of overseas subsidiaries
have been translated into Japanese yen at annual average rates,
while until the year ended March 31, 1999 year-end rates had
been used. Consequently, overseas sales increased by ¥8,027
million for the North America area and ¥2,347 million for the
Others area.

19. Related party transactions
The following transactions were carried out with related parties:(1) Sales of goods and services for the years ended March 31, 2002, 2001 and 2000 are as follows:
Thousands of
U.S. dollars

Millions of yen

Toyota Motor Corporation
Toyota Motor Corporation held 24.67% of the Company’s shares
as of March 31, 2002, 2001 and 2000, respectively. The above

2002

2001

2000

2002

¥410,995¥425,377¥393,780$3,084,390

transactions were carried out on commercial terms andconditions.

TOYOTA INDUSTRIES CORPORATION ANNUAL REPORT 2002

77

(2) Purchase of goods and services for the years ended March 31, 2002, 2001 and 2000 are as follows:
Purchase of goods:
Thousands of
U.S. dollars

Millions of yen

Toyota Motor Corporation

2002

2001

2000

2002

¥284,531¥195,514¥184,935$2,135,317

Purchase of services:
Thousands of
U.S. dollars

Millions of yen

2002
Toyota Motor Corporation

2001

2000

2002

¥2,333¥4,685¥4,848$17,509

Toyota Industries Health Insurance Society

72

69

62

540

Toyota Medical Corporation

42

33

32

315

¥2,447¥4,787¥4,942$18,364

Total
Toyota Industries Health Insurance Society’s chairman as ofMarch 31, 2002 and 2001 is Shiro Endo, who is a director of theCompany and holds 0.01% of the Company’s shares, andShigetaka Mitomo as of March 31, 2000, who was a corporate
auditor of the Company. Toyota Medical Corporation’s chairman

as of March 31, 2002, 2001 and 2000 is Yoshitoshi Toyoda, who isa director of the Company and holds 0.05%, 0.05% and 0.06% of
the Company’s shares, respectively. The transactions above
were carried out on commercial terms and conditions.

(3) Outstanding balances arising from sale/purchase of goods/services as of March 31, 2002 and 2001 are as follows:
Receivables from a related party:
Millions of yen

Toyota Motor Corporation

Thousands of
U.S. dollars

2002

2001

2002

¥20,873¥35,483$156,645

Payable to a related party:
Millions of yen

Toyota Motor Corporation

Thousands of
U.S. dollars

2002

2001

2002

¥30,527¥18,214$229,096(4) Loans to an affiliate for the year ended March 31, 2001 are as follows:
Millions of yen

Balance at the beginning of the year

¥ 8,600

Loans made during the year–

Repayments during the year

(8,600)

Balance at the end of the year
A loan was made to ST Liquid Crystal Display Corp., in which theCompany owns 50.0% of the shares, and given on commercial

78

TOYOTA INDUSTRIES CORPORATION ANNUAL REPORT 2002¥
terms and conditions without any collateral.

–20. Stock-based compensation
The introduction for the first time of an incentive plan involving
the granting of stock options was approved at the Ordinary
General Meeting of Shareholders in June 2001. Consequently,
options on a total of 500,000 shares, the maximum allowable,
were granted at a predetermined exercise price to all directors
and certain employees. The purpose of this plan is to further
sharpen the motivation of senior management in enhancing
shareholder value. The grant price is the higher of the closing
price on the Tokyo Stock Exchange on the date of grant and 1.05
times the average closing price in the full calendar month prior

to the month of the grant date. Recipients may not exercise theoption within the first two years. Subsequent to that initialperiod, the option must be exercised or waived within the next
two years.
To finance this plan, we purchased 499,200 shares ofcommon stock (¥1.3 billion) as treasury stock in fiscal 2002.
In June 2002, the Ordinary General Meeting of Shareholders
approved a warrant, which earmarks a maximum of 800,000
shares of common stock to be further distributed among
directors and employees.

TOYOTA INDUSTRIES CORPORATION ANNUAL REPORT 2002

79

Report of Independent Accountants

June 27, 2002
To the Board of Directors of
Toyota Industries Corporation

We have audited the accompanying consolidated balance sheets of Toyota Industries Corporationand its consolidated subsidiaries as of March 31, 2002 and 2001, and the consolidated statements ofincome, shareholders’ equity and cash flows for the three years in the period ended March 31, 2002,
expressed in Japanese yen. Our audits were made in accordance with auditing standards,
procedures and practices generally accepted and applied in Japan and, accordingly, included suchtests of the accounting records and such other auditing procedures as we considered necessary inthe circumstances.
In our opinion, the consolidated financial statements referred to above present fairly the
consolidated financial position of Toyota Industries Corporation and its consolidated subsidiaries asof March 31, 2002 and 2001, and the consolidated results of their operations and their cash flows forthe three years in the period ended March 31, 2002 in conformity with accounting principles andpractices generally accepted in Japan (see Note 1) applied on a consistent basis, except for thechanges described in the next two paragraphs.
As described in Note 3, effective for the year ended March 31, 2000, Toyota Industries Corporation
has changed its method of translation of foreign subsidiaries’ financial statements.
As described in Note 3, effective for the year ended March 31, 2001, Toyota Industries Corporation
has changed its method of allowance for retirement and severance benefits for directors andcorporate auditors.
As described in Note 3, effective for the year ended March 31, 2000, Toyota Industries Corporationand its Japanese consolidated subsidiaries have adopted new Japanese accounting standards forincome taxes.
As described in Note 3, effective for the year ended March 31, 2001, Toyota Industries Corporationand its Japanese consolidated subsidiaries have adopted new Japanese accounting standards for
retirement benefits, financial instruments and foreign currency transactions.
The amounts expressed in U.S. dollars, which are provided solely for the convenience of readers
outside Japan, have been translated on the basis set forth in Note 1 to the accompanying
consolidated financial statements.

80

TOYOTA INDUSTRIES CORPORATION ANNUAL REPORT 2002

Toyota Industries Close-up
Materials Handling Equipment

82

Compressor Division

85

Vehicle Division

86

Engine Division

86Electronics

87

Textile Machinery Division88

Sub-Divisions

89

Founded in 1926 by Japanese inventor Sakichi Toyoda as a manufacturing company ofautomatic looms, Toyota Industries Corporation has grown into a diverse enterprise covering
a wide range of businesses, from automobiles to electronics. Today, the company is divided
into four segments: Automobile, Materials Handling Equipment, Textile Machinery andOthers. Each of these segments is further divided into various subcategories of businesses
and operations. The following pages provide a closer look at our extensive range of businessfields and product groups.

TOYOTA INDUSTRIES CORPORATION ANNUAL REPORT 2002

81

Toyota Industries Close-up
Materials Handling Equipment

TOYOTA Material Handling Company

A Solid Presence in World Markets
TOYOTA Material Handling Company (“TMHC”) was formed in

manufactures a variety of other industrial vehicles, including

April 2001 when Toyota Industries took over Toyota Motor

tow tractors and skid steer loaders.
TMHC also manufactures and markets materials handling

Corporation’s (“TMC’s”) Industrial Equipment Sales Divisionand integrated it with the Industrial Vehicle Division and thesystems; i.e., products for storing, conveying, sorting andMaterials Handling System Division.

picking. Armed with the Toyota Production System’s wealth of

Note: TMHC is an “in-house” company (a division of Toyota Industries) and nota legally incorporated entity.

expertise, TMHC is developing a product range that includes

TMHC is a world leader in forklift trucks, with a full lineup of

automatic guided vehicle systems.

internal combustion and electric models ranging in capacity

Note: Toyota Industries’ materials handling systems such as racks, automatedstorage and retrieval systems, and automatic guided vehicle systems
are sold only in Japan.

racks, automated storage and retrieval systems, andfrom 0.5 to over 40 tons. The company also develops and■ Products for the Japanese Market — Industrial Vehicles

GENEO (7FD25)
Internal Combustion
Counterbalanced Forklift Truck

GENEO-B (7FB15)
Electric Counterbalanced
Forklift Truck

GENEO-R (7FBR15)

Tow Tractor

Skid Steer Loader

Reach Truck(2TD20)(4SDKL8)■ Products for the Japanese Market — Materials Handling Systems

Partner Rack
(Rail-Less Mobile Type)
Rail-Less Mobile Rack

82

Rack Sorter B

Rack Sorter P

2AFBR15Road Sorter H

Automated Storage andRetrieval System(Plastic Container Type)

Automated Storage andRetrieval System (Pallet Type)

Automatic Guided
Forklift Truck(ACBH10)
Automatic Guided Vehicle
SystemTOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

■ Products for the North American Market

7FBCU25

7FGCU35-BCS

Electric 4-Wheel Cushion Tire
Counterbalanced Forklift Truck

Internal Combustion Cushion Tire
Counterbalanced Forklift Truck—
Boxcar Special Model

7FBCU35

7FDU35

Electric 4-Wheel Cushion Tire
Counterbalanced Forklift Truck

Internal Combustion Pneumatic Tire
Counterbalanced Forklift Truck

7FGCU25
Internal Combustion Cushion Tire
Counterbalanced Forklift Truck■ Products for the European Market

7FGF/FDF25

Easymover

Internal Combustion
Counterbalanced Forklift Truck

Electric Pallet Truck

7FB15
Electric Counterbalanced
Forklift Truck

7FBRE

SLL12.5

Reach Truck

Stacker Truck with Folding Platform

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

83

Toyota Industries Close-up

Materials Handling Equipment

BT Industries AB

Global Supplier of Warehouse Trucks
Headquartered in Sweden, BT Industries AB (“BT Industries”)

approximately 70 countries. BT Industries meets the needs ofis the world’s leading supplier of warehouse trucks. BT

the entire spectrum of materials handling, with products

Industries manufactures in seven plants in Europe and North

including hand pallet trucks, electric pallet trucks, reach

America, where the company has particularly strong

trucks, very narrow aisle trucks, and counterbalanced forklift

customer bases. BT Industries‘ products contribute totrucks. Some examples are shown below.

efficient materials handling operations for customers in

BT LIFTERBT MINIMOVERBT ORIONBT IXION

Hand Pallet Truck

Electric Pallet Truck

Electric Pallet Truck

Stacker Truck

BT REFLEX AC

BT OPUSBT OPALBT VECTORBT CARGO

Reach Truck

Low Level Order Picking Truck

High Level Order Picking
Truck

Very Narrow Aisle Truck

Counterbalanced Truck

Raymond Model 112
Pallet Truck

RaymondReach-Fork Truck

Raymond EASi™
Orderpicker Truck

RaymondSwing-Reach Truck

Electric Pallet Truck

Reach Truck

Order Picking Truck

Very Narrow Aisle Truck

84

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

Compressor Division

Compressors — the Core of Car Air Conditioners
Toyota Industries’ Compressor Division develops car airconditioning compressors that are a cut above thecompetition. Our proprietary technology has allowed us tostay on top of the industry with various developments. These
include swash plate compressors with fixed displacement,swash plate compressors with continuous variabledisplacement, scroll-type and vane-type compressors, andelectric compressors for electric cars.

■ Fixed Displacement Type

10S17 Compressor

SCS06 Compressor

SV07 Compressor(Fixed Displacement,
Swash Plate Type)(Scroll Type)(Vane Type)■ Continuous Variable Displacement Type■ For Electric Vehicles■ Auxiliary Car Heater

7SBU16 Compressor

7SEU16 Compressor

ES25 Electric Compressor

Viscous Type Power Heater(Variable Displacement,
Swash Plate Type)(External Signal-Controlled,
Variable Displacement,
Clutchless Type)(Hermetic Scroll Type)(Vehicle Cabin Supplementary
Heater)TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 200285

Toyota Industries Close-up

Vehicle Division

Building Safe, Environmentally Friendly Cars
Toyota Industries currently assembles the Vitz (Yaris inexported to the U.S. and Europe. Available only in Japan, theEurope), the RAV4, and the bB Open Deck for TMC. The fuel-bB Open Deck has open space in the back, like a pickup truck,efficient, environmentally friendly Vitz is a strategic small carthat can be used for hauling bulky cargo.

for TMC in global markets. The RAV4 sport utility vehicle is

Vitz

RAV4

bB Open Deck

(Yaris in Europe)(available only in Japan)

Engine Division

From Small Cars to Large Industrial Vehicles
Toyota Industries manufactures car and industrial vehicle

to their light weight and low noise and vibration. Our

engines ranging in capacity from 1.5 to 5.2 liters. All the car

industrial vehicle engines are fitted in forklift trucks and otherengines we manufacture are sold to TMC and then fitted inindustrial vehicles manufactured by TMHC and are a reason

TOYOTA cars. The diesel engines we manufacture for TMC

these products offer both high output and low environmental

offer plenty of power yet are easy on the environment thanks

impact.

■ Diesel Engines■ Gasoline Engines

86

1CD Diesel Engine

1HD-FTE Diesel Engine

2UZ Gasoline Engine

1FZ-FE Gasoline Engine(Displacement: 2.0 Liters,
Used in the RAV4 forEurope and Corolla)(Displacement: 4.2 Liters,
Used in the Land Cruiser )(Displacement: 4.7 Liters,
Used in the Lexus LX470)(Displacement: 4.5 Liters,
Used in the Land Cruiser)

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

Electronics

Technology Development Center
The Technology Development Center carries out productplanning, design, and manufacture of products related mainly
to power supply and communications. The Center
DC-DC Converter
for the PRIUS

manufactures DC-DC converters fitted in TOYOTA PRIUS
hybrid cars, DC-AC inverters that convert 12V-DC car battery
current to 100V AC (standard Japanese household current),
and inductive battery charging systems for electric vehicles. It
also develops and manufactures SS wireless modems.

DC-AC Inverter

Battery Charging System
for EV(Pre-Installed Type)Electronics

ST Liquid Crystal Display Corp.
ST Liquid Crystal Display Corp. (“ST-LCD”) was established in
October 1997 as a 50-50 joint venture with Sony Corporation(“Sony”). The company makes low-temperature polysilicon
TFT-LCDs. The main rationale behind the joint venture wasthat it would create an optimum manufacturing systemthrough a combination of Sony’s superb LCD technology andToyota Industries’ expertise in quality control andmanufacturing technology.
The TFT-LCDs made by ST-LCD are used mainly for Sonydigital video and still cameras, and PDAs. These nextgeneration TFT-LCDs are expected to create huge demand for

Low-Temperature
Polysilicon TFT-LCDs

a wide range of display device applications, including digital
video and still cameras, PDAs, mobile phones, and monitors
for car navigation systems.

Electronics

TIBC Corporation
TIBC Corporation (“TIBC”) was formed in 1998 as a joint
venture between Toyota Industries and Ibiden Co., Ltd. TIBC
makes ball grid array (BGA) plastic package substrates for IC
chipsets, an indispensable component of PCs, mobile phones,and video game systems. TIBC also manufactures flexible
printed circuit (FPC) substrates for IC cards.
Ball Grid Array (BGA)
Plastic Package Substrates
for IC Chipsets

TOYOTA INDUSTRIES CORPORATION

Flexible Printed Circuit (FPC)
Substrates for Smart Cards

ANNUAL REPORT 2002

87

Toyota Industries Close-up

Textile Machinery Division

Innovation in the Global Textile Industry
Toyota Industries traces its roots back to Sakichi Toyoda’s

products with the latest communications, mechatronics, andinvention of the automatic loom over 75 years ago. Since then,other technologies.

we have developed and manufactured spinning, weaving, and

The Textile Machinery Division continues its commitment toother textile machinery that are marketed to customers

customer satisfaction with a complete range of high-quality

around the world. To stay ahead of ever-advancing market

products that meet the needs of today’s global textile industry.

needs, the Textile Machinery Division is enhancing its■ Weaving Machinery

JAT610 Air-Jet Loom

LW600 Series Water-Jet Loom

Mackee Eagle
Sizing Machine for Spun Yarn

Filamaster Express 610
Sizing Machine for Filament Yarn

■ Spinning Machinery

RX240NEW Ring Spinning Frame

88

TOYOTA INDUSTRIES CORPORATION

FL100 Roving Frame

ANNUAL REPORT 2002

DX7A Drawing FrameSub-Division

Machinery & Tools Sub-Division

Superior Press Die Manufacturing Technology
The Machinery & Tools Sub-Division designs andmanufactures high-precision, high-quality automobile press
dies, mainly for TMC. We will continue to contribute to TMC’s
business with press dies that offer quality, cost efficiency, andfast delivery times.

The Machinery & Tools Sub-Division manufactures various types ofautomobile press dies and distributes them to Toyota Industries’
Vehicle Division and TMC.

Sub-Division

Mechatronics Engineering Sub-Division

Designing and Producing
Manufacturing Equipment for Toyota Industries
The work of the Mechatronics Engineering Sub-Division
allows us to do more in-house manufacture of the allimportant machining and assembly equipment. Through thedesign and production of superior manufacturing equipment,
the Mechatronics Engineering Sub-Division supplies Toyota
Industries’ divisions and group companies with the advanced
manufacturing technology that gives all of our businesses acompetitive edge.

Equipment developed and manufactured by the Mechatronics Engineering
Sub-Division is utilized by Toyota Industries’ compressor business and ST-LCD,
enhancing the productivity and competitiveness of these operations.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

89

Major Developments in Toyota Industries’ History
1920s

1940

1960

Toyoda Automatic Loom Works, Ltd.
(now Toyota Industries Corporation)
established to manufacture andmarket automatic looms invented by
Sakichi Toyoda.

Steel Production Division separates
and becomes Toyoda Steel Works, Ltd.
(now Aichi Steel Corporation).

Shovel loader production starts.

1944

Sakichi Toyoda

Obu Plant starts operations,producing castings.

90

1963
Dump truck production starts.
Friction welder production starts.

1949

1964

Spinning frame production starts.

Company stock listed on Tokyo, Osaka,
and Nagoya Stock Exchanges.

J-type diesel engine production starts.

Automatic loom patent sold to PlattBrothers & Co., Ltd. of the U.K.

1930s
1933
Automobile Division set up.

1950s
1952
Automobile engine (S-type gasoline
engine) production starts.

1967

1934
A-type automobile engine completed.

Nagakusa Plant starts operations,producing small commercial vehicles.

1935

Publica (van) and Mini Ace(automobile) production starts.

Prototype of Model A1 passenger carcompleted.

1953
Kyowa Plant starts operations,producing engines and assembling
automobiles.

1955

1937
Automobile Division separates andbecomes Toyota Motor Co., Ltd. (nowToyota Motor Corporation).

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

Publica (van)Electric counterbalanced forklift truck
production starts.

Vehicle Division set up.

1968

1956

Open-end spinning machine
production starts.

Forklift truck production starts.

1959

Toyoda Automatic Loom Type G
invented by Sakichi Toyoda.

Car air-conditioning compressor(CC3A type, CC3B type) production
starts.

1929

Company unveils Model G1 truck at a
new-car-release exhibition in Shibaura,
Tokyo.

1924

1960s

1926

Founder

Sakichi Toyoda was born inShizuoka Prefecture, Japan, in
1867. He became an inventor
while still in his teens anddevoted his life to the study
and development of textile
machinery. Starting with awooden handloom, he
subsequently pioneered a
new era in textile machinerywith inventions that included
Japan’s first power loom, thecircular loom and the Toyoda
Automatic Loom Type G.
Sakichi was awarded 84
patents and 35 utility models
in his lifetime and isremembered with pride inJapan as one of the world’s
greatest inventors. We at
Toyota Industries are proud tocarry on the engineering spiritof our illustrious founder.

1940s

P-type gasoline engine production
starts.

1970s

1985

1995

1999

1970

Engine Division separates from
Vehicle Division.

Vitz (Yaris in Europe) production starts.

Takahama Plant starts operations,producing industrial vehicles.

10PA-type compressor production
starts.

Toyota Industrial Equipment, S.A.
(“TIESA”) established in France as a
joint venture with Toyota Motor
Corporation and Manitou B.F.

1971

1986

7SB-type compressor production
starts.

Corolla (van) production starts.

Company awarded the Deming Prize
for quality control implementation.

B500 electric counterbalanced forklift
truck production starts.

X300 series forklift truck production
starts.

Kirloskar Toyoda Textile Machinery Ltd.
(“KTTM”) established in India as a joint
venture with the Kirloskar Group.

1CD-type diesel engine production
starts.

1996

GENEO-B (7FB outside Japan) electriccounterbalanced forklift trucks
introduced.

Divisional organization system
introduced (3 divisions: Textile
Machinery, Industrial Vehicle, andVehicle).
Toyoda-Sulzer Manufacturing Ltd.
established as a joint venture with
Sulzer Brothers, Ltd. of Switzerland to
produce projectile looms.

1987
Sprinter Cielo (exported as the Collora
Lift Back) production starts.

JAT610 air-jet loom production starts.

Electronics Sub-Division set up.

1974
6P-type compressor production starts.

1977
Swash plate compressor technology
licensed to Chrysler and Ford.
Compressor Division separates from
Textile Machinery Division.

1978
Starlet (automobile) production starts.

RX100 ring spinning frame
production starts.

1989
Michigan Automotive Compressor, Inc.
(“MACI”) established in Jackson,
Michigan, U.S., as a joint venture with
DENSO Corporation.

1990s
Aerial work platform production starts.

1980s
1980
JA-type air-jet loom production starts.

1990
Sprinter Carib (automobile; exported
as the Corolla Wagon) production
starts.
Company receives 1990 PM Excellent
Plant Award.

1992

1981
10P-type compressor production starts.

Hekinan Plant starts operations,producing automobile diesel engines.

LW600 series water-jet loom
production starts.
RX240 ring spinning frame
production starts.

Company acquires BT Industries AB of
Sweden, a world-leading
manufacturer of warehouse trucks.

1997

2UZ-type gasoline engine production
starts.

Compressor production at Kariya Plant
reaches 100 million units.
6SE-type compressor production starts.

Higashichita Plant starts operations,producing foundry parts.

ST Liquid Crystal Display Corp.
(“ST-LCD”) established as a joint
venture with Sony Corporation.

1998
TD Deutsche Klimakompressor GmbH(“TDDK”) established in Germany as a
joint venture with DENSO Corporation
to produce car air-conditioning
compressors.
GENEO (7FG/D outside Japan) internal
combustion counterbalanced forklift
trucks introduced.

2001
GENEO-R (7FBR outside Japan) reachtruck production starts.
Company takes over the industrial
equipment sales division of Toyota
Motor Corporation.

Production starts on automatedstorage and retrieval systems.

TOYOTA Material Handling Company
established as an in-house company.

JAT600 air-jet loom production starts.

RAV4 (SUV) production starts.

1993

bB Open Deck (automobile)
production starts.

RX200 ring spinning frame production
starts.

X500 series internal combustion
counterbalanced forklift truck
production starts.

Production starts on C-type diesel
engines for small passenger cars.

2000

Materials Handling System Division
set up.

1994

1982

2000s

1988
Toyota Industrial Equipment Mfg., Inc.
(“TIEM”) established in Columbus,
Indiana, U.S., as a joint venture with
Toyota Motor Corporation.

Company takes over water-jet loom
business from Nissan Texsys Co., Ltd.

TIBC Corporation (“TIBC”) established
as a joint venture with Ibiden Co., Ltd.
(“Ibiden”) to produce plastic package
substrates for IC chipsets.
10S-type compressor production starts.

Toyota Industry (Kunshan) Co., Ltd.
(“TIK”) established in China as a joint
venture with Toyota Tsusho
Corporation and Lioho MachineWorks, Ltd.

Name changed to Toyota Industries
Corporation.

2002
Company reorganizes theheadquarters into the Corporate
Center and the Business Support
Center.

R500 reach truck production starts.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 200291

Corporate Organization
Board of Auditors

Auditors

Board of Directors

ChairmanPresident

Corporate Center
Audit Office
President's Office
Corporate Planning Dept.
Investor Relations OfficeBusiness Planning Dept.
BT OfficePublic Affairs Dept.
Finance Dept.
Global Human Resources Dept.
Technical Planning Dept.
Quality Control Dept.
Operations Management Consulting Dept.
Tokyo OfficeOsaka OfficeBusiness Support Center
Legal Dept.
Secretarial Dept.
General Administration Dept.
Employee Support Center
Accounting Dept.
Global Information Technology Dept.
Purchasing Dept.
Logistics Dept.
Safety, Health & Environment Dept.
Kaizen Support Dept.
Plant Engineering Dept.
Intellectual Property Dept.
Health Care Administration Center[ Committees & Councils ]Management Committee
Corporate Code of Conduct Council
Environmental Committee
Safety and Health Committee
Stock Option Council
Business Operation Committee
Human Resources Development Committee
Information Technology Promotion Committee
Manufacturing Technique Promotion Committee
Technical Committee

92

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

(As of July 1, 2002)

TOYOTA Material Handling Company*

Textile Machinery Division

Compressor Division

Vehicle Division

Engine Division

Technology Development Center

Mechatronics & Engineering Sub-Division

Machinery & Tools Sub-Division* TOYOTA Material Handling Company is simply
the name of a division of Toyota Industries,
not a legally incorporated entity.

Directors and Corporate Auditors(As of June 27, 2002)

Board of Directors

ChairmanPresident

Akira Yokoi*

Tadashi Ishikawa*Executive Vice President

Executive Vice President

Executive Vice President

Shozo Nakayama*

Koichiro Noguchi*

Tetsuro Toyoda*

Senior Managing Directors
Morio Kawamura*
Shiro Endo*
Kazuhiko Takeuchi*
Managing Directors
Norio Sato
Masazumi Konishi
Shinjiro Kamimura
Tatsuo Matsuura
Masanori Itoh
Akira Imura
Iwao Katayama
Honorary Chairman

Directors
Tatsuro Toyoda
Yoshimitsu Ogihara
Seiji Ueda
Shigetaka Yoshida
Tsuneyoshi Kajiwara
Shinichiro Matsuyama
Masafumi Kato
Yasuharu Toyoda
Kimpei Mitsuya
Hiroya Kono
Kazunori Yoshida
Kenji Takenaka
Kosaku Yamada
Satoshi Kaseda

Yoshitoshi Toyoda* Representative Director

Corporate Auditors
Standing Corporate Auditors
Shigetaka Mitomo
Tadashi Komiya

Corporate Auditors
Iwao Isomura
Kosuke Shiramizu
Hiroshi Makino

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 200293

Corporate Data

(As of March 31, 2002)

Plants and Offices
Number of
Employees

Main Products

Land Area(1,000 m2)

Kariya Plant

Textile machinery, car air-conditioning compressors

1,685

171

Takahama Plant

Forklift trucks, materials handling systems

1,507

329

Nagakusa Plant

Automobiles

2,146

271

Kyowa Plant

Semiconductors, electronics equipment, press dies

978

159

Obu Plant

Car air-conditioning compressors, die-cast parts

428

156

Hekinan Plant

Engines

1,279

271

Higashichita Plant

Foundry parts

305

332

Head Office and Others

1,348

846

Total

9,676

2,535

Note: Though not listed above, Higashiura Plant, which manufactures parts for car air-conditioning compressors, is scheduled to start operations in July 2002.

Consolidated Subsidiaries
Japan
Location(thousands of the local currency)

CapitalEquityOwnership

65.0%

TIBC Corporation

Aichi¥3,000,000

TOYOTA L&F Tokyo Co., Ltd.

Tokyo

¥350,000

90.0%

Logistics Planning Tokyo Co.,Ltd.

Tokyo¥10,000

90.0%

Altex Co., Ltd.

Shizuoka¥200,000

75.0%
81.3%

Sun River Co., Ltd.

Osaka

¥150,000

Izumi Machine Mfg. Co., Ltd.

Aichi

¥150,000

60.7%

TOYOTA L&F Keiji Co., Ltd.

Kyoto

¥140,00065.0%Tokyu Co., Ltd.

Aichi

¥135,000

63.3%

Mino Tokyu Co., Ltd.

Gifu

¥18,000

93.4%

Toyoda High System, Incorporated

Aichi¥100,000

90.0%

Nishina Industrial Co., Ltd.

Nagano¥100,000

59.1%

Advanced Logistics Solutions Co., Ltd.

Aichi

¥100,000

100.0%

Tokaiseiki Co., Ltd.

Shizuoka¥98,000

92.1%

Logistec Co., Ltd.

Aichi

¥90,000

100.0%SKE Inc.

Aichi¥78,500

100.0%SK Maintenance Inc.

Aichi

¥50,000

70.0%

Iwama Loom Works, Ltd.

Aichi

¥49,920

50.0%

Kawamoto System Corporation

Aichi¥47,000

100.0%

Arti Inc.

Aichi¥30,000

100.0%TOYOTA L&F Shizuoka Co., Ltd.

Shizuoka¥30,000

90.0%

Hara Corporation

Gifu¥23,19373.2%

Mizuho Industry Co., Ltd.

Aichi

¥20,000

93.8%

Sun Valley Inc.

Aichi

¥20,000

100.0%Sun Staff, Inc.

Aichi

¥20,000

100.0%

Tokai System Institute Corp.

Aichi¥10,000

100.0%

Shine’s Inc.

Aichi

¥10,000

100.0%

94

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

Consolidated Subsidiaries
Outside Japan
Location

CapitalToyoda International Sweden AB *1

Mjölby, Sweden

BT Industries Group *1 (63 companies)–

Michigan Automotive Compressor, Inc.
Toyota Industries North America, Inc. *2
Toyota Industrial Equipment Mfg., Inc. *2(thousands of the local currency)

EquityOwnership

SEK6,652,977

100.0%––

Parma, Michigan, U.S.A.

US$146,000

60.0%

Schaumburg, Illinois, U.S.A.

US$37,900

100.0%

Columbus, Indiana, U.S.A.

US$60,000

100.0%

Toyota Material Handling USA, Inc. *2

Irvine, California, U.S.A.

US$12,500

100.0%ACTIS Manufacturing, Ltd. LLC *2

Grapevine, Texas, U.S.A.

US$2,000

60.0%

Toyota–Lift of Los Angeles, Inc. *2

Santa Fe Springs, California, U.S.A.

US$1,500

100.0%

Toyoda Textile Machinery, Inc. *2

Charlotte, North Carolina, U.S.A.

US$1,300

100.0%TAL Personnel Service, Inc. *2

Charlotte, North Carolina, U.S.A.

US$100100.0%

Kirloskar Toyoda Textile Machinery Ltd.

Bangalore, Karnataka, India

Rs1,116,200

89.4%

TD Deutsche Klimakompressor GmbH

Straßgräbchen, Germany

EUR20,452

65.0%

Toyota Industry (Kunshan) Co., Ltd.

Kunshan, Jiangsu, China

Toyota Truck Norge AS

Trondheim, Norway

US$16,000

70.0%

NOK110,000

100.0%

Toyota Truckutleie Norge AS

Trondheim, Norway

NOK100100.0%

Toyota Truck Danmark A/S

Vejle, Denmark

DKK9,000

100.0%

Toyota Truckudlejning Danmark A/S

Vejle, Denmark

DKK500100.0%

Toyota Industrial Equipment, S.A.

Ancenis, France

EUR9,000

60.0%

Toyota Gabelstapler Deutschland GmbH

Duisburg, Germany

DM1,400

100.0%

Toyota Industrial Equipment (UK) Limited

Castleford, West Yorkshire, U.K.

GBP48

100.0%

Toyota Industrial Equipment (Northern) Limited

Castleford, West Yorkshire, U.K.

GBP10

100.0%

Toyota Industrial Equipment Europe, S.A.R.L.

Ancenis, France

EUR75

100.0%

Toyota Carrelli Elevatoria Italia S.r.l.

Bologna, Italy

EUR1,250

100.0%

Unconsolidated Subsidiary Accounted for by the Equity Method
Outside Japan
Location

Capital(thousands of the local currency)

BT Industries Group *1 (1 company *3)–

EquityOwnership––

Affiliates Accounted for by the Equity Method
Japan
Location(thousands of the local currency)

CapitalEquityOwnership

ST Liquid Crystal Display Corp.

Aichi¥50,000,000

50.0%

Taikoh Transportation Co., Ltd.

Aichi

¥83,985

46.2%

Outside Japan
Location

Capital(thousands of the local currency)

BT Industries Group *1 (16 companies)–

EquityOwnership––*1 BT Industries Group is composed of 80 subsidiaries and affiliates and is centered on the holding company BT Industries AB (headquartered in Mjölby, Sweden,
capitalized at SEK560 million). Toyoda International Sweden AB held 99.3% of the outstanding shares of BT Industries AB as of March 31, 2002.
*2 Toyota Industries North America, Inc. is a holding company that exercises control over Toyota Industrial Equipment Mfg., Inc., Toyota Material Handling USA, Inc.,ACTIS Manufacturing, Ltd. LLC, Toyota–Lift of Los Angeles, Inc., Toyoda Textile Machinery, Inc. and TAL Personnel Service, Inc.
*3 BT Industries AB temporarily holds more than a 50% share of the capital of the subsidiary.
Note: ¥–Japanese yen; SEK–Swedish krona; US$–U.S. dollar; Rs–Indian rupee; EUR–Euro; NOK–Norwegian krone; DKK–Danish krone; DM–German mark;
GBP–British pound

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

95

Investor Information(As of March 31, 2002)

Corporate Head OfficeTransfer Agent

TOYOTA INDUSTRIES CORPORATION

UFJ Trust Bank Limited

2-1, Toyoda-cho, Kariya-shi, Aichi-ken 448-8671, Japan

1-4-3, Marunouchi, Chiyoda-ku, Tokyo-to 100-0005, Japan

Telephone: +81-(0)566-22-2511

Telephone: +81-(0)3-3287-2211

Facsimile: +81-(0)566-27-5650

Major Shareholders
Date of Establishment% ofOwnership

November 18, 1926
Toyota Motor Corporation

24.67

Common Stock

DENSO Corporation

7.75

Par value: ¥50

UFJ Bank Limited

5.00

Authorized:1,091,245,000 shares

Sumitomo Mitsui Banking Corporation

4.39

Issued:Nippon Life Insurance Company

3.23

UFJ Trust Bank Limited

3.13

Stock Exchange Listings

Mitsui Sumitomo Insurance Co., Ltd.

2.51

Tokyo, Osaka and Nagoya (Ticker Code : 6201)

Towa Real Estate Co., Ltd.

2.46

Mitsui Asset Trust and Banking Co., Ltd.

2.23

The Mitsubishi Trust and Banking Corporation

2.05

313,299,249 shares

Number of Shareholders
17,804

Independent Accountants
ChuoAoyama Audit Corporation
3-28-12, Meieki, Nakamura-ku, Nagoya-shi, Aichi-ken
450-8565, Japan

Common Stock Price & Trading Volume (Tokyo Stock Exchange)
High
Opening
Closing
Low

(yen)

High
Closing
Opening
Low

Black: Opening Price > Closing PriceWhite: Closing Price > Opening Price(thousand shares)
24,0003,000
Common stock price (left scale)
2,500

20,0002,000

16,0001,500

12,000
Trading volume (right scale)

1,000

8,000

500

4,000

0

96

4/97

7

10

1/98

4

7

TOYOTA INDUSTRIES CORPORATION

10

1/99

4

7

10

ANNUAL REPORT 2002

1/00

4

7

10

1/01

4

7

10

1/02

4

0

Publications
Our Corporate Brochure and Environmental Report are available in both English and Japanese upon written request
to the Public Affairs Department at our Corporate Head Office.

Internet Home Page
Updated information is published regularly on our Web site. (http://www.toyota-industries.com/)

Further Information
For further information, please write to the Investor Relations Office at our Corporate Head Office.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

96

ANNUAL REPORT 2002

2-1, Toyoda-cho, Kariya-shi, Aichi-ken 448-8671, Japan
Telephone: +81-(0)566-22-2511 Facsimile: +81-(0)566-27-5650
URL: http://www.toyota-industries.com/

ANNUAL REPORT 2002
Year ended March 31, 2002

This annual report is printed onrecycled paper using soy ink to minimize
the impact on the environment.
Printed in Japan