-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DAArzdPFRj/9Mk+XybEfDbinXRW/HkvyoPyh8VB9RFyAG8s3zRUnfCGl/a8R2YBM CTe3rS0yMJlRjccWxaDOYg== 0000947871-03-002765.txt : 20031224 0000947871-03-002765.hdr.sgml : 20031224 20031224103810 ACCESSION NUMBER: 0000947871-03-002765 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20031224 FILED AS OF DATE: 20031224 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TOYOTA MOTOR CORP/ CENTRAL INDEX KEY: 0001094517 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLES & PASSENGER CAR BODIES [3711] IRS NUMBER: 000000000 FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14948 FILM NUMBER: 031072987 BUSINESS ADDRESS: STREET 1: 1 TOYOTA CHO TOYOTA CITY STREET 2: AICHI PREFECTURE 471-8571 CITY: JAPAN STATE: M0 ZIP: 00000 BUSINESS PHONE: 81-565-28-2121 MAIL ADDRESS: STREET 1: TOYOTA MOTOR SALES USA INC STREET 2: 19001 SOUTH WESTERN AVE PO BOX 2991 CITY: TORRANCE STATE: CA ZIP: 90509-2991 6-K 1 f6k_121903.txt REPORT OF FOREIGN PRIVATE ISSUER FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934 For the month of December, 2003 Commission File Number 1-14948 Toyota Motor Corporation ------------------------ (Translation of Registrant's Name Into English) 1, Toyota-cho, Toyota City, Aichi Prefecture 471-8571, Japan (Address of Principal Executive Offices) Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F X Form 40-F --- Indicate by check mark whether by furnishing the information contained in this Form the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes No X --- --- If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): ______ Material Contained in this Report: 1. English translation of a notice, dated December 15, 2003, announcing the results of the registrant's repurchase of 15,250,000 shares of common stock between December 2, 2003 and December 15, 2003 at an aggregate price of JPY 52,755,600,000. 2. English excerpt translation of a Report on Number of Listed Shares, as filed by the registrant with the Tokyo Stock Exchange on December 19, 2003. 3. English translation of a Report of Bulk Holding, as filed with the Director of the Tokai Local Finance Bureau on December 22, 2003. 4. Executive summary of a Japanese-language Semi-Annual Securities Report, as filed with the Director of the Kanto Local Finance Bureau on December 24, 2003. 5. English translation of the registrant's Semi-Annual Consolidated Financial Statements for the six months ended September 30, 2003, which were filed with the Director of the Kanto Local Finance Bureau as part of the Semi-Annual Securities Report dated December 24, 2003. (All financial information for the semi-annual period of FY2004 was prepared in accordance with accounting principles generally accepted in the United States; however, financial information for the fiscal year and semi-annual period of FY2003 was prepared in accordance with accounting principles generally accepted in Japan.) 6. The registrant's unaudited Semi-annual Consolidated Financial Statements for the six months ended September 30, 2003, prepared in accordance with accounting principles generally accepted in the United States. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Toyota Motor Corporation By: /s/ Takahiko Ijichi ---------------------------------- Date: December 24, 2003 Name: Takahiko Ijichi Title: General Manager, Accounting Division EX-1 3 ex1_121903.txt NOTICE ON SHARE REPURCHASE Exhibit 1 (TRANSLATION) To Whom It May Concern: December 15, 2003 Toyota Motor Corporation (Toyota Jidosha Kabushiki Kaisha) 1, Toyota-cho, Toyota City, Aichi Prefecture Notice of Repurchase of Shares from the Market (Repurchase of Shares Pursuant to the Provisions of Article 210 of the Commercial Code) We hereby inform you that Toyota Motor Corporation ("TMC") repurchased its shares from the market as follows pursuant to the provisions of Article 210 of the Commercial Code. 1. Purchase period December 2, 2003 through December 15, 2003 2. Number of shares repurchased 15,250,000 shares 3. Aggregate purchase price JPY 52,755,600,000 4. Method of repurchase Purchase on the Tokyo Stock Exchange (Reference) o Matters resolved at the FY 2003 Ordinary General Shareholders' Meeting held on June 26, 2003. (1) Type of shares to be repurchased Shares of common stock of TMC (2) Aggregate number of shares to be repurchased Up to 150,000,000 shares (3) Aggregate purchase price Up to JPY 400,000,000,000 o Shares having been repurchased up to December 15, 2003 (1) Aggregate number of shares repurchased 64,288,200 shares (2) Aggregate purchase price JPY 206,524,992,000 # # # Contact: TMC, Public Affairs at (03) 3817-9111~6 (Tokyo Head Office) (0565) 23-1520~4 (Head Office) (052) 952-3461~4 (Nagoya) EX-2 4 ex2_121903.txt REPORT ON NUMBER OF LISTED SHARES Exhibit 2 (Excerpt Translation) December 19, 2003 Toyota Motor Corporation (Toyota Jidosha Kabushiki Kaisha) 1, Toyota-cho, Toyota City, Aichi Prefecture Report on Number of Listed Shares --------------------------------- We hereby report changes in the number of listed securities, as a result of the exercise of stock acquisition rights, etc. ("Stock Acquisition Rights") in November 2003 (the "Current Month"). 1. Summary Number of listed shares as at the end of the 3,609,997,492 shares proceeding to the Current Month Total number of shares changed during the month 0 shares (out of which, as a result of exercise of Stock (0 shares) Acquisition Rights) (out of which, as a result of other reasons) (0 shares) Number of listed shares as at the end of 3,609,997,492 shares the Current Month 2. Stock Acquisition Rights Exercised (Bonds with detachable warrants to subscribe for shares) Aggregate face value of the bonds allotted to the JPY 600,000,000 outstanding warrants as at the end of the month Aggregate face value of the bonds originally JPY 0 allotted to the warrants exercised during the month Aggregate face value of the bonds as allotted to the JPY 600,000,000 outstanding warrants at the end of the Current Month (Details of Shares Delivered (Issued or Transferred) upon Exercise of Stock Acquisition Rights) (1) Number of shares Total number of shares delivered during the Current Month 0 shares (out of which, number of newly issued shares) (0 shares) (out of which, number of shares transferred from treasury (0 shares) shares) (2) Issue price Aggregate issue price during the Current Month JPY 0 (out of which, aggregate amount of newly issued shares) (JPY 0) (out of which, aggregate amount of shares transferred from (JPY 0) treasury shares) EX-3 5 ex3_121903.txt REPORT OF BULK HOLDING Exhibit 3 [Translation] Cabinet Office Ordinance Concerning Disclosure of Status of Bulk Holding of Share Certificates, Etc. Form No. 1 Cover page Filing Document (2): Report on Amendment No. 3 Based on: Article 27-25, Paragraph 1 of the Securities and Exchange Law Filed with: Director of Tokai Local Finance Bureau Name (3): Fujio Cho, President, Toyota Motor Corporation Address or Location of Head Office (3): 1 Toyota-cho, Toyota City, Aichi Prefecture Effective Date of Reporting Duty (4): December 15, 2003 Filing Date: December 22, 2003 Total Number of Submitter and Joint Holders (persons): 5 Submitting Method (5): Jointly I. Matters Regarding Issuing Company (6) Name of Issuing Company Toyota Motor Corporation - -------------------------------------------------------------------------------- Company Code 7203 - -------------------------------------------------------------------------------- Listed / Over-the-counter Listed - -------------------------------------------------------------------------------- Listed Securities Exchange(s) Tokyo, Nagoya, Osaka, Fukuoka, Sapporo - -------------------------------------------------------------------------------- Location of Head Office 1 Toyota-cho, Toyota City, Aichi Prefecture - -------------------------------------------------------------------------------- II. Matters Regarding Submitter 1. Submitter (Bulk Holder)/1 (7) (1) Profile of Submitter (8) [1] Submitter (Bulk Holder) Individual / Judicial person Judicial person (Joint stock company) - -------------------------------------------------------------------------------- Name Toyota Motor Corporation - -------------------------------------------------------------------------------- Address or Location of Head 1 Toyota-cho, Toyota City, Aichi Prefecture Office - -------------------------------------------------------------------------------- Former Name - -------------------------------------------------------------------------------- Former Address or Location of Head Office - -------------------------------------------------------------------------------- [2] Individual - -------------------------------------------------------------------------------- Date of Birth - -------------------------------------------------------------------------------- Occupation - -------------------------------------------------------------------------------- Name of Company - -------------------------------------------------------------------------------- Address of Company - -------------------------------------------------------------------------------- [3] Judicial Person - -------------------------------------------------------------------------------- Date of Incorporation August 27, 1937 - -------------------------------------------------------------------------------- Name of Representative Fujio Cho - -------------------------------------------------------------------------------- Title of Representative President - -------------------------------------------------------------------------------- Business Purposes Manufacture, sale, leasing and repair of motor vehicles, ships, aircraft, other transportation machinery and apparatus, space machinery and apparatus, and parts thereof, etc. - -------------------------------------------------------------------------------- [4] Place to Contact - -------------------------------------------------------------------------------- Place to Contact and Name of Yuji Maki, Project General Manager of Person in Charge Planning Department, Accounting Division - -------------------------------------------------------------------------------- Telephone Number 0565-28-2121 - -------------------------------------------------------------------------------- (2) Holding Purposes (9) - -------------------------------------------------------------------------------- In order to improve capital efficiency and to implement flexible capital policies in accordance with the business environment. - -------------------------------------------------------------------------------- (3) Breakdown of Stock, Etc. Held by Submitter (10) [1] Number of Stock, Etc. Held
Main Text of Article Article 27-23, Article 27-23, 27-23, Paragraph 3 Paragraph 3, Item 1 Paragraph 3, Item 2 - ---------------------------------------------------------------------------------------------------------------- Shares (shares) 250,761,029 - - - ---------------------------------------------------------------------------------------------------------------- Warrants (shares) A 400 - G - ---------------------------------------------------------------------------------------------------------------- Certificate of Stock B - H Acquisition Rights (shares) - ---------------------------------------------------------------------------------------------------------------- Bonds with Stock Acquisition C - I Rights (shares) - ---------------------------------------------------------------------------------------------------------------- Covered Warrants relating to D J Subject Securities - ---------------------------------------------------------------------------------------------------------------- Depositary Receipts Representing Ownership Interest in Shares - ---------------------------------------------------------------------------------------------------------------- Other Related Depositary E K Receipts - ---------------------------------------------------------------------------------------------------------------- Bonds Redeemable by Subject F L Securities - ---------------------------------------------------------------------------------------------------------------- Total (shares) M 250,761,429 N - O - - ---------------------------------------------------------------------------------------------------------------- Number of Shares, Etc., which P - were Transferred through a Margin Transaction and which are to be Deducted - ---------------------------------------------------------------------------------------------------------------- Number of Shares, Etc. Held Q 250,761,429 (Total) (M+N+O-P) - ---------------------------------------------------------------------------------------------------------------- Number of Potentially Diluted R 400 Shares Held (A+B+C+D+E+F+G+H+I+J+K+L) - ----------------------------------------------------------------------------------------------------------------
[2] Percentage of Shares, Etc. Held - ------------------------------------------------------------------------------- Total Number of Issued Shares S 3,609,997,492 (shares) (as of November 30, 2003) - ------------------------------------------------------------------------------- Percentage of Shares, Etc. 6.95 Held by the Above-stated Submitter (%) (Q/(R+S)x100) - ------------------------------------------------------------------------------- Percentage of Shares, Etc. 5.84 Held Stated in the Preceding Report (%) - ------------------------------------------------------------------------------- (4)Conditions concerning Acquisition or Disposal during the Last Sixty (60) Days of Shares, Etc. Issued by Issuing Company (11)
- ---------------------------------------------------------------------------------------------------------------- Date Kind of Stock, Etc. Number Acquisition / Disposal Unit Price - ---------------------------------------------------------------------------------------------------------------- October Shares of common stock 4,313 Acquisition Y3,358 31,2003 - ---------------------------------------------------------------------------------------------------------------- November 27, Shares of common stock 24,750,000 Acquisition Y3,210 2003 - ---------------------------------------------------------------------------------------------------------------- November 28, Shares of common stock 4,435 Acquisition Y3,303 2003 - ---------------------------------------------------------------------------------------------------------------- December 15, Shares of common stock 15,250,000 Acquisition 2003 - ----------------------------------------------------------------------------------------------------------------
(5) Material Agreements Including Security Agreements Related to Shares, Etc. (12) - -------------------------------------------------------------------------------- Not applicable. - -------------------------------------------------------------------------------- (6) Funds for Acquisition of Shares Held (13) [1] Breakdown of Funds for Acquisition - ------------------------------------------------------------------------------- Amount of Own Funds (T) (Y1,000) 761,417,725 - ------------------------------------------------------------------------------- Total Amount of Borrowed Funds (U) - (Y1,000) - ------------------------------------------------------------------------------- Total Amount of Other Funds (V) (Y1,000) - - ------------------------------------------------------------------------------- Breakdown of Above (V) - - ------------------------------------------------------------------------------- Total Amount of Funds for Acquisition 761,417,725 (Y1,000) (T+U+V) - ------------------------------------------------------------------------------- [2] Breakdown of Borrowings
- ---------------------------------------------------------------------------------------------------------------- Number Name Type of Name of Location Purpose of Amount (Name of Branch) Business Representative Borrowing (Y1,000) - ---------------------------------------------------------------------------------------------------------------- 1 Not applicable. - ---------------------------------------------------------------------------------------------------------------- 2 - ---------------------------------------------------------------------------------------------------------------- 3 - ---------------------------------------------------------------------------------------------------------------- 4 - ---------------------------------------------------------------------------------------------------------------- 5 - ---------------------------------------------------------------------------------------------------------------- 6 - ---------------------------------------------------------------------------------------------------------------- 7 - ---------------------------------------------------------------------------------------------------------------- 8 - ---------------------------------------------------------------------------------------------------------------- 9 - ---------------------------------------------------------------------------------------------------------------- 10 - ----------------------------------------------------------------------------------------------------------------
II. Matters Regarding Submitter 2. Submitter (Bulk Holder)/2 (7) (1) Profile of Submitter (8) [1] Submitter (Bulk Holder) - ------------------------------------------------------------------------------- Individual / Judicial person Judicial person (Joint stock company) - ------------------------------------------------------------------------------- Name Toyota Auto Body Co., Ltd. - ------------------------------------------------------------------------------- Address or Location of Head 100, Kaneyama, Ichirisato-cho, Office Kariya City, Aichi Prefecture - ------------------------------------------------------------------------------- Former Name - ------------------------------------------------------------------------------- Former Address or Location of Head Office - ------------------------------------------------------------------------------- [2] Individual - ------------------------------------------------------------------------------- Date of Birth - ------------------------------------------------------------------------------- Occupation - ------------------------------------------------------------------------------- Name of Company - ------------------------------------------------------------------------------- Address of Company - ------------------------------------------------------------------------------- [3] Judicial Person - ------------------------------------------------------------------------------- Date of Incorporation August 31, 1945 - ------------------------------------------------------------------------------- Name of Representative Risuke Kubochi - ------------------------------------------------------------------------------- Title of Representative President - ------------------------------------------------------------------------------- Business Purposes Manufacture and sale of auto bodies - ------------------------------------------------------------------------------- [4] Place to Contact - ------------------------------------------------------------------------------- Place to Contact and Name of Shinobu Ichikawa, Director and Deputy Person in Charge General Manager of Business Administration Division - ------------------------------------------------------------------------------- Telephone Number 0566-36-2121 - ------------------------------------------------------------------------------- (2) Holding Purposes (9) - ------------------------------------------------------------------------------- For strategic investment (maintenance and development of the business relationship) - ------------------------------------------------------------------------------- (3) Breakdown of Stock, Etc. Held by Submitter (10) [1] Number of Stock, Etc. Held
- ---------------------------------------------------------------------------------------------------------------- Main Text of Article Article 27-23, Article 27-23, 27-23, Paragraph 3 Paragraph 3, Item 1 Paragraph 3, Item 2 - ---------------------------------------------------------------------------------------------------------------- Shares (shares) - - 5,328,000 - ---------------------------------------------------------------------------------------------------------------- Warrants (shares) A - G - ---------------------------------------------------------------------------------------------------------------- Certificate of Stock B - H Acquisition Rights (shares) - ---------------------------------------------------------------------------------------------------------------- Bonds with Stock Acquisition C - I Rights (shares) - ---------------------------------------------------------------------------------------------------------------- Covered Warrants relating to D J Subject Securities - ---------------------------------------------------------------------------------------------------------------- Depositary Receipts Representing Ownership Interest in Shares - ---------------------------------------------------------------------------------------------------------------- Other Related Depositary E K Receipts - ---------------------------------------------------------------------------------------------------------------- Bonds Redeemable by Subject F L Securities - ---------------------------------------------------------------------------------------------------------------- Total (shares) M - N - O 5,328,000 - ---------------------------------------------------------------------------------------------------------------- Number of Shares, Etc., which P - were Transferred through a Margin Transaction and which are to be Deducted - ---------------------------------------------------------------------------------------------------------------- Number of Shares, Etc. Held Q 5,328,000 (Total) (M+N+O-P) - ---------------------------------------------------------------------------------------------------------------- Number of Potentially Diluted R - Shares Held (A+B+C+D+E+F+G+H+I+J+K+L) - ----------------------------------------------------------------------------------------------------------------
[2] Percentage of Shares, Etc. Held - ------------------------------------------------------------------------------- Total Number of Issued Shares S 3,609,997,492 (shares) (as of November 30, 2003) - ------------------------------------------------------------------------------- Percentage of Shares, Etc. 0.15 Held by the Above-stated Submitter (%) (Q/(R+S)x100) - ------------------------------------------------------------------------------- Percentage of Shares, Etc. 0.15 Held Stated in the Preceding Report (%) - ------------------------------------------------------------------------------- (4)Conditions concerning Acquisition or Disposal during the Last Sixty (60) Days of Shares, Etc. Issued by Issuing Company (11)
- ---------------------------------------------------------------------------------------------------------------- Date Kind of Stock, Etc. Number Acquisition / Disposal Unit Price - ---------------------------------------------------------------------------------------------------------------- Not Applicable - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------
(5) Material Agreements Including Security Agreements Related to Shares, Etc. (12) - ------------------------------------------------------------------------------- Not applicable. - ------------------------------------------------------------------------------- (6) Funds for Acquisition of Shares Held (13) [1] Breakdown of Funds for Acquisition - ------------------------------------------------------------------------------- Amount of Own Funds (T) (Y1,000) 1,176,102 - ------------------------------------------------------------------------------- Total Amount of Borrowed Funds (U) - (Y1,000) - ------------------------------------------------------------------------------- Total Amount of Other Funds (V) (Y1,000) - - ------------------------------------------------------------------------------- Breakdown of Above (V) - - ------------------------------------------------------------------------------- Total Amount of Funds for Acquisition 1,176,102 (Y1,000) (T+U+V) - ------------------------------------------------------------------------------- [2] Breakdown of Borrowings
- ---------------------------------------------------------------------------------------------------------------- Number Name Type of Name of Location Purpose of Amount (Name of Branch) Business Representative Borrowing (Y1,000) - ---------------------------------------------------------------------------------------------------------------- 1 Not applicable. - ---------------------------------------------------------------------------------------------------------------- 2 - ---------------------------------------------------------------------------------------------------------------- 3 - ---------------------------------------------------------------------------------------------------------------- 4 - ---------------------------------------------------------------------------------------------------------------- 5 - ---------------------------------------------------------------------------------------------------------------- 6 - ---------------------------------------------------------------------------------------------------------------- 7 - ---------------------------------------------------------------------------------------------------------------- 8 - ---------------------------------------------------------------------------------------------------------------- 9 - ---------------------------------------------------------------------------------------------------------------- 10 - ----------------------------------------------------------------------------------------------------------------
II. Matters Regarding Submitter 3. Submitter (Bulk Holder)/3 (7) (1) Profile of Submitter (8) [1] Submitter (Bulk Holder) - ------------------------------------------------------------------------------- Individual / Judicial person Judicial person (Joint stock company) - ------------------------------------------------------------------------------- Name Kanto Auto Works Ltd. - ------------------------------------------------------------------------------- Address or Location of Head Tauraminato-cho, Yokosuka City, Office Kanagawa Prefecture - ------------------------------------------------------------------------------- Former Name - ------------------------------------------------------------------------------- Former Address or Location of Head Office - ------------------------------------------------------------------------------- [2] Individual - ------------------------------------------------------------------------------- Date of Birth - ------------------------------------------------------------------------------- Occupation - ------------------------------------------------------------------------------- Name of Company - ------------------------------------------------------------------------------- Address of Company - ------------------------------------------------------------------------------- [3] Judicial Person - ------------------------------------------------------------------------------- Date of Incorporation July 22, 1942 - ------------------------------------------------------------------------------- Name of Representative Susumu Uchikawa - ------------------------------------------------------------------------------- Title of Representative President - ------------------------------------------------------------------------------- Business Purposes Manufacture, sale and repair of motor vehicles and other transportation machinery apparatus, and parts thereof, etc. - ------------------------------------------------------------------------------- [4] Place to Contact - ------------------------------------------------------------------------------- Place to Contact and Name of Yousuke Uematsu, General Manager of Person in Charge Finance and Cost Management Division - ------------------------------------------------------------------------------- Telephone Number 046-862-2681 - ------------------------------------------------------------------------------- (2) Holding Purposes (9) - ------------------------------------------------------------------------------- For strategic investment (maintenance and development of the business relationship) - ------------------------------------------------------------------------------- (3) Breakdown of Stock, Etc. Held by Submitter (10) [1] Number of Stock, Etc. Held
- ---------------------------------------------------------------------------------------------------------------- Main Text of Article Article 27-23, Article 27-23, 27-23, Paragraph 3 Paragraph 3, Item 1 Paragraph 3, Item 2 - ---------------------------------------------------------------------------------------------------------------- Shares (shares) - - 2,814,000 - ---------------------------------------------------------------------------------------------------------------- Warrants (shares) A - G - ---------------------------------------------------------------------------------------------------------------- Certificate of Stock B - H Acquisition Rights (shares) - ---------------------------------------------------------------------------------------------------------------- Bonds with Stock Acquisition C - I Rights (shares) - ---------------------------------------------------------------------------------------------------------------- Covered Warrants relating to D J Subject Securities - ---------------------------------------------------------------------------------------------------------------- Depositary Receipts Representing Ownership Interest in Shares - ---------------------------------------------------------------------------------------------------------------- Other Related Depositary E K Receipts - ---------------------------------------------------------------------------------------------------------------- Bonds Redeemable by Subject F L Securities - ---------------------------------------------------------------------------------------------------------------- Total (shares) M - N - O 2,814,000 - ---------------------------------------------------------------------------------------------------------------- Number of Shares, Etc., which P - were Transferred through a Margin Transaction and which are to be Deducted - ---------------------------------------------------------------------------------------------------------------- Number of Shares, Etc. Held Q 2,814,000 (Total) (M+N+O-P) - ---------------------------------------------------------------------------------------------------------------- Number of Potentially Diluted R - Shares Held (A+B+C+D+E+F+G+H+I+J+K+L) - ----------------------------------------------------------------------------------------------------------------
[2] Percentage of Shares, Etc. Held - ------------------------------------------------------------------------------- Total Number of Issued Shares S 3,609,997,492 (shares) (as of November 30, 2003) - ------------------------------------------------------------------------------- Percentage of Shares, Etc. 0.08 Held by the Above-stated Submitter (%) (Q/(R+S)x100) - ------------------------------------------------------------------------------- Percentage of Shares, Etc. 0.08 Held Stated in the Preceding Report (%) - ------------------------------------------------------------------------------- (4)Conditions concerning Acquisition or Disposal during the Last Sixty (60) Days of Shares, Etc. Issued by Issuing Company (11)
- ---------------------------------------------------------------------------------------------------------------- Date Kind of Stock, Etc. Number Acquisition / Disposal Unit Price - ---------------------------------------------------------------------------------------------------------------- Not Applicable - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------
(5) Material Agreements Including Security Agreements Related to Shares, Etc. (12) - ------------------------------------------------------------------------------- Not applicable. - ------------------------------------------------------------------------------- (6) Funds for Acquisition of Shares Held (13) [1] Breakdown of Funds for Acquisition - ------------------------------------------------------------------------------- Amount of Own Funds (T) (Y1,000) 2,102,568 - ------------------------------------------------------------------------------- Total Amount of Borrowed Funds (U) - (Y1,000) - ------------------------------------------------------------------------------- Total Amount of Other Funds (V) (Y1,000) - - ------------------------------------------------------------------------------- Breakdown of Above (V) - - ------------------------------------------------------------------------------- Total Amount of Funds for Acquisition 2,102,568 (Y1,000) (T+U+V) - ------------------------------------------------------------------------------- [2] Breakdown of Borrowings
- ---------------------------------------------------------------------------------------------------------------- Number Name Type of Name of Location Purpose of Amount (Name of Branch) Business Representative Borrowing (Y1,000) - ---------------------------------------------------------------------------------------------------------------- 1 Not applicable. - ---------------------------------------------------------------------------------------------------------------- 2 - ---------------------------------------------------------------------------------------------------------------- 3 - ---------------------------------------------------------------------------------------------------------------- 4 - ---------------------------------------------------------------------------------------------------------------- 5 - ---------------------------------------------------------------------------------------------------------------- 6 - ---------------------------------------------------------------------------------------------------------------- 7 - ---------------------------------------------------------------------------------------------------------------- 8 - ---------------------------------------------------------------------------------------------------------------- 9 - ---------------------------------------------------------------------------------------------------------------- 10 - ----------------------------------------------------------------------------------------------------------------
II. Matters Regarding Submitter 4. Submitter (Bulk Holder)/4 (7) (1) Profile of Submitter (8) [1] Submitter (Bulk Holder) - ------------------------------------------------------------------------------- Individual / Judicial person Judicial person (Joint stock company) - ------------------------------------------------------------------------------- Name Horie Metal Co.,Ltd. - ------------------------------------------------------------------------------- Address or Location of Head 26, Konosu-cho 2-chome, Toyota City, Office Aichi Prefecture - ------------------------------------------------------------------------------- Former Name - ------------------------------------------------------------------------------- Former Address or Location of Head Office - ------------------------------------------------------------------------------- [2] Individual - ------------------------------------------------------------------------------- Date of Birth - ------------------------------------------------------------------------------- Occupation - ------------------------------------------------------------------------------- Name of Company - ------------------------------------------------------------------------------- Address of Company - ------------------------------------------------------------------------------- [3] Judicial Person - ------------------------------------------------------------------------------- Date of Incorporation July 7, 1942 - ------------------------------------------------------------------------------- Name of Representative Taketo Matoba - ------------------------------------------------------------------------------- Title of Representative President - ------------------------------------------------------------------------------- Business Purposes Manufacture, sale and designing of parts of motor vehicles, processing and sale of steel plate. - ------------------------------------------------------------------------------- [4] Place to Contact - ------------------------------------------------------------------------------- Place to Contact and Name of Katsuhide Ito, General Manager of Person in Charge Accounting Division, Operation Department - ------------------------------------------------------------------------------- Telephone Number 0565-29-8364 - ------------------------------------------------------------------------------- (2) Holding Purposes (9) - ------------------------------------------------------------------------------- For strategic investment (maintenance and development of the business relationship) - ------------------------------------------------------------------------------- (3) Breakdown of Stock, Etc. Held by Submitter (10) [1] Number of Stock, Etc. Held
- ---------------------------------------------------------------------------------------------------------------- Main Text of Article Article 27-23, Article 27-23, 27-23, Paragraph 3 Paragraph 3, Item 1 Paragraph 3, Item 2 - ---------------------------------------------------------------------------------------------------------------- Shares (shares) 560,949 - - - ---------------------------------------------------------------------------------------------------------------- Warrants (shares) A - G - ---------------------------------------------------------------------------------------------------------------- Certificate of Stock B - H Acquisition Rights (shares) - ---------------------------------------------------------------------------------------------------------------- Bonds with Stock Acquisition C - I Rights (shares) - ---------------------------------------------------------------------------------------------------------------- Covered Warrants relating to D J Subject Securities - ---------------------------------------------------------------------------------------------------------------- Depositary Receipts Representing Ownership Interest in Shares - ---------------------------------------------------------------------------------------------------------------- Other Related Depositary E K Receipts - ---------------------------------------------------------------------------------------------------------------- Bonds Redeemable by Subject F L Securities - ---------------------------------------------------------------------------------------------------------------- Total (shares) M 560,949 N - O - - ---------------------------------------------------------------------------------------------------------------- Number of Shares, Etc., which P - were Transferred through a Margin Transaction and which are to be Deducted - ---------------------------------------------------------------------------------------------------------------- Number of Shares, Etc. Held Q 560,949 (Total) (M+N+O-P) - ---------------------------------------------------------------------------------------------------------------- Number of Potentially Diluted R - Shares Held (A+B+C+D+E+F+G+H+I+J+K+L) - ---------------------------------------------------------------------------------------------------------------- [2] Percentage of Shares, Etc. Held - ---------------------------------------------------------------------------------------------------------------- Total Number of Issued Shares S 3,609,997,492 (shares) (as of November 30, 2003) - ---------------------------------------------------------------------------------------------------------------- Percentage of Shares, Etc. 0.02 Held by the Above-stated Submitter (%) (Q/(R+S)x100) - ---------------------------------------------------------------------------------------------------------------- Percentage of Shares, Etc. 0.02 Held Stated in the Preceding Report (%) - ----------------------------------------------------------------------------------------------------------------
(4)Conditions concerning Acquisition or Disposal during the Last Sixty (60) Days of Shares, Etc. Issued by Issuing Company (11)
- ---------------------------------------------------------------------------------------------------------------- Date Kind of Stock, Etc. Number Acquisition / Disposal Unit Price - ---------------------------------------------------------------------------------------------------------------- Not Applicable - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------
(5) Material Agreements Including Security Agreements Related to Shares, Etc. (12) - -------------------------------------------------------------------------------- Not applicable. - -------------------------------------------------------------------------------- (6) Funds for Acquisition of Shares Held (13) [1] Breakdown of Funds for Acquisition - ------------------------------------------------------------------------------- Amount of Own Funds (T) (Y1,000) - - ------------------------------------------------------------------------------- Total Amount of Borrowed Funds (U) - (Y1,000) - ------------------------------------------------------------------------------- Total Amount of Other Funds (V) (Y1,000) - - ------------------------------------------------------------------------------- Breakdown of Above (V) - - ------------------------------------------------------------------------------- Total Amount of Funds for Acquisition - (Y1,000) (T+U+V) - ------------------------------------------------------------------------------- [2] Breakdown of Borrowings
- ---------------------------------------------------------------------------------------------------------------- Number Name Type of Name of Location Purpose of Amount (Name of Branch) Business Representative Borrowing (Y1,000) - ---------------------------------------------------------------------------------------------------------------- 1 Not applicable. - ---------------------------------------------------------------------------------------------------------------- 2 - ---------------------------------------------------------------------------------------------------------------- 3 - ---------------------------------------------------------------------------------------------------------------- 4 - ---------------------------------------------------------------------------------------------------------------- 5 - ---------------------------------------------------------------------------------------------------------------- 6 - ---------------------------------------------------------------------------------------------------------------- 7 - ---------------------------------------------------------------------------------------------------------------- 8 - ---------------------------------------------------------------------------------------------------------------- 9 - ---------------------------------------------------------------------------------------------------------------- 10 - ----------------------------------------------------------------------------------------------------------------
II. Matters Regarding Submitter 5. Submitter (Bulk Holder)/5 (7) (1) Profile of Submitter (8) [1] Submitter (Bulk Holder) - ------------------------------------------------------------------------------- Individual / Judicial person Judicial person (Joint stock company) - ------------------------------------------------------------------------------- Name TakaNichi Co., Ltd. - ------------------------------------------------------------------------------- Address or Location of Head 1-1, Maehata, Ooshima-cho, Toyota City, Office Aichi Prefecture - ------------------------------------------------------------------------------- Former Name - ------------------------------------------------------------------------------- Former Address or Location of Head Office - ------------------------------------------------------------------------------- [2] Individual - ------------------------------------------------------------------------------- Date of Birth - ------------------------------------------------------------------------------- Occupation - ------------------------------------------------------------------------------- Name of Company - ------------------------------------------------------------------------------- Address of Company - ------------------------------------------------------------------------------- [3] Judicial Person - ------------------------------------------------------------------------------- Date of Incorporation December 27, 1960 - ------------------------------------------------------------------------------- Name of Representative Naoki Noda - ------------------------------------------------------------------------------- Title of Representative President - ------------------------------------------------------------------------------- Business Purposes Manufacture and sale of interior parts of motor vehicles. - ------------------------------------------------------------------------------- [4] Place to Contact - ------------------------------------------------------------------------------- Place to Contact and Name of Kazuhisa Saiba, Group Leader of Legal Person in Charge Group, General Affairs Department - ------------------------------------------------------------------------------- Telephone Number 0565-52-3458 - ------------------------------------------------------------------------------- (2) Holding Purposes (9) - ------------------------------------------------------------------------------- For strategic investment (maintenance and development of the business relationship) - ------------------------------------------------------------------------------- (3) Breakdown of Stock, Etc. Held by Submitter (10) [1] Number of Stock, Etc. Held
- ---------------------------------------------------------------------------------------------------------------- Main Text of Article Article 27-23, Article 27-23, 27-23, Paragraph 3 Paragraph 3, Item 1 Paragraph 3, Item 2 - ---------------------------------------------------------------------------------------------------------------- Shares (shares) - - 30,000 - ---------------------------------------------------------------------------------------------------------------- Warrants (shares) A - G - ---------------------------------------------------------------------------------------------------------------- Certificate of Stock B - H Acquisition Rights (shares) - ---------------------------------------------------------------------------------------------------------------- Bonds with Stock Acquisition C - I Rights (shares) - ---------------------------------------------------------------------------------------------------------------- Covered Warrants relating to D J Subject Securities - ---------------------------------------------------------------------------------------------------------------- Depositary Receipts Representing Ownership Interest in Shares - ---------------------------------------------------------------------------------------------------------------- Other Related Depositary E K Receipts - ---------------------------------------------------------------------------------------------------------------- Bonds Redeemable by Subject F L Securities - ---------------------------------------------------------------------------------------------------------------- Total (shares) M - N - O 30,000 - ---------------------------------------------------------------------------------------------------------------- Number of Shares, Etc., which P - were Transferred through a Margin Transaction and which are to be Deducted - ---------------------------------------------------------------------------------------------------------------- Number of Shares, Etc. Held Q 30,000 (Total) (M+N+O-P) - ---------------------------------------------------------------------------------------------------------------- Number of Potentially Diluted R - Shares Held (A+B+C+D+E+F+G+H+I+J+K+L) - -------------------------------------------------------------------------------
[2] Percentage of Shares, Etc. Held - ------------------------------------------------------------------------------- Total Number of Issued Shares S 3,609,997,492 (shares) (as of November 30, 2003) - ------------------------------------------------------------------------------- Percentage of Shares, Etc. 0.00 Held by the Above-stated Submitter (%) (Q/(R+S)x100) - ------------------------------------------------------------------------------- Percentage of Shares, Etc. 0.01 Held Stated in the Preceding Report (%) - ------------------------------------------------------------------------------- (4)Conditions concerning Acquisition or Disposal during the Last Sixty (60) Days of Shares, Etc. Issued by Issuing Company (11)
- ---------------------------------------------------------------------------------------------------------------- Date Kind of Stock, Etc. Number Acquisition / Disposal Unit Price - ---------------------------------------------------------------------------------------------------------------- November 7, Shares of common stock 213,600 Disposal 2003 - ---------------------------------------------------------------------------------------------------------------- November 13, Shares of common stock 79 Disposal Y3,470 2003 - ---------------------------------------------------------------------------------------------------------------- December 12, Shares of common stock 42,300 Disposal 2003 - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------
(5) Material Agreements Including Security Agreements Related to Shares, Etc. (12) - ------------------------------------------------------------------------------- Not applicable. - ------------------------------------------------------------------------------- (6) Funds for Acquisition of Shares Held (13) [1] Breakdown of Funds for Acquisition - ------------------------------------------------------------------------------- Amount of Own Funds (T) (Y1,000) - - ------------------------------------------------------------------------------- Total Amount of Borrowed Funds (U) - (Y1,000) - ------------------------------------------------------------------------------- Total Amount of Other Funds (V) (Y1,000) - - ------------------------------------------------------------------------------- Breakdown of Above (V) - - ------------------------------------------------------------------------------- Total Amount of Funds for Acquisition - (Y1,000) (T+U+V) - ------------------------------------------------------------------------------- [2] Breakdown of Borrowings
- ---------------------------------------------------------------------------------------------------------------- Number Name Type of Name of Location Purpose of Amount (Name of Branch) Business Representative Borrowing (Y1,000) - ---------------------------------------------------------------------------------------------------------------- 1 Not applicable. - ---------------------------------------------------------------------------------------------------------------- 2 - ---------------------------------------------------------------------------------------------------------------- 3 - ---------------------------------------------------------------------------------------------------------------- 4 - ---------------------------------------------------------------------------------------------------------------- 5 - ---------------------------------------------------------------------------------------------------------------- 6 - ---------------------------------------------------------------------------------------------------------------- 7 - ---------------------------------------------------------------------------------------------------------------- 8 - ---------------------------------------------------------------------------------------------------------------- 9 - ---------------------------------------------------------------------------------------------------------------- 10 - ----------------------------------------------------------------------------------------------------------------
IV. Summary List Regarding Submitter and Joint Holders 1. Submitter and Joint Holders (18) Toyota Motor Corporation Toyota Auto Body Co., Ltd. Kanto Auto Works Ltd. Horie Metal Co.,Ltd. TakaNichi Co., Ltd. 2.Breakdown of Stock, Etc. Held by Submitter and Joint Holders (19) (1) Number of Stock, Etc. Held
- ---------------------------------------------------------------------------------------------------------------- Main Text of Article Article 27-23, Article 27-23, 27-23, Paragraph 3 Paragraph 3, Item 1 Paragraph 3, Item 2 - ---------------------------------------------------------------------------------------------------------------- Shares (shares) 251,321,978 8,172,000 - ---------------------------------------------------------------------------------------------------------------- Warrants (shares) A 400 - G - ---------------------------------------------------------------------------------------------------------------- Certificate of Stock Acquisition B - H Rights (shares) - ---------------------------------------------------------------------------------------------------------------- Bonds with Stock Acquisition Rights C - I (shares) - ---------------------------------------------------------------------------------------------------------------- Covered Warrants relating to D J Subject Securities - ---------------------------------------------------------------------------------------------------------------- Depositary Receipts Representing Ownership Interest in Shares - ---------------------------------------------------------------------------------------------------------------- Other Related Depositary Receipts E K - ---------------------------------------------------------------------------------------------------------------- Bonds Redeemable by Subject F L Securities - ---------------------------------------------------------------------------------------------------------------- Total (shares) M 251,322,378 N O 8,172,000 - ---------------------------------------------------------------------------------------------------------------- Number of Shares, Etc., which were P - Transferred through a Margin Transaction and which are to be Deducted - ---------------------------------------------------------------------------------------------------------------- Number of Shares, Etc. Held Q 259,494,378 (Total) (M+N+O-P) - ---------------------------------------------------------------------------------------------------------------- Number of Potentially Diluted R 400 Shares Held (A+B+C+D+E+F+G+H+I+J+K+L) - ---------------------------------------------------------------------------------------------------------------- (2) Percentage of Shares, Etc. Held - ---------------------------------------------------------------------------------------------------------------- Total Number of Issued Shares S 3,609,997,492 (shares) (as of November 30, 2003) - ---------------------------------------------------------------------------------------------------------------- Percentage of Shares, Etc. Held by 7.19 the Above-stated Submitter (%) (Q/(R+S)x100) - ---------------------------------------------------------------------------------------------------------------- Percentage of Shares, Etc. Held 6.09 Stated in the Preceding Report (%) - ----------------------------------------------------------------------------------------------------------------
EX-4 6 ex4_121903.txt EXECUTIVE SUMMARY SEMI-ANNUAL SECURITIES REPORT Exhibit 4 Japanese Semi-Annual Securities Report for the six-month ended September 30, 2003, as filed with the Director of the Kanto Local Finance Bureau on December 24, 2003, which includes the following: I. Corporate information A. Corporate overview 1. Major business indices during three semi-annual periods and two fiscal years 2. Overview of business 3. Associated companies 4. Employee information B. Business 1. Business results 2. Production, orders and sales 3. Management issues 4. Material contracts, etc. 5. Research and development C. Capital assets 1. Changes in important capital assets 2. Plans for addition or disposition of capital assets D. Company information 1. Share information, etc. a. Total number of shares, etc. b. Stock acquisition rights c. Number of shares outstanding, changes in capital stock, etc. d. Major shareholders e. Voting rights 2. Changes in share price 3. Directors and corporate auditors E. Financial information 1. Semi-annual consolidated financial statements and notes, etc. 2. Semi-annual unconsolidated financial statements and notes, etc. F. Reference materials II. Information on guarantors (none) EX-5 7 ex5_121903.txt SEMI-ANNUAL CONSOLIDATED FINANCIAL STATEMENTS Exhibit 5 1.Semi-annual consolidated financial statements and other information. (1) Semi-annual consolidated financial statements 1 Semi-annual consolidated balance sheets
- ------------------------------------------------------------------------------------------------------------------------------ FY2003 semi-annual FY2004 semi-annual FY2003 selected data September 30, 2002 September 30, 2003 March 31, 2003 - ------------------------------------------------------------------------------------------------------------------------------ Item Notes Yen in millions Percent Yen in millions Percent Yen in millions Percent age age age - ------------------------------------------------------------------------------------------------------------------------------ (Assets) 1 Current assets 1 Cash and deposits 1,042,984 - 620,870 2 Trade notes and 1,317,877 - 1,583,393 accounts receivable 3 Marketable securities 1,447,001 - 1,661,978 4 Inventories 986,311 - 1,072,947 5 Installment credits 3,480,274 - 3,430,444 from dealers 6 Short-term loans *3 1,260,688 - 1,558,161 7 Deferred income taxes 383,622 - 413,039 8 Other current assets 812,948 - 826,442 9 Less: allowance for (120,339) - (147,670) doubtful accounts ------------- ----------- ------------- Total current assets 10,611,370 53.2 - - 11,019,607 53.1 2 Fixed assets (1) Property, plant and *1 equipment 1 Buildings and structures 1,215,000 - 1,253,674 2 Machinery and equipment 1,174,074 - 1,163,778 3 Vehicles and delivery *2 1,237,833 - 1,238,252 equipment 4 Land 1,078,622 - 1,097,189 5 Construction in progress 268,288 - 232,966 6 Other property, plant 433,430 - 521,123 and equipment ------------- -------------- ------------- Total property, plant 5,407,249 27.1 - - 5,506,985 26.6 and equipment (2) Intangible fixed assets Software 4,116 - 5,123 ------------- -------------- ------------- Total intangible fixed 4,116 0.0 - - 5,123 0.0 assets (3) Investments and other assets 1 Investments in 2,599,479 - 2,695,939 securities 2 Long-term loans 727,049 - 757,922 3 Deferred income taxes 327,816 - 446,123 4 Other investments and 299,042 - 335,618 other assets 5 Less: allowance for (19,187) - (24,934) doubtful accounts ------------- -------------- ------------- Total investments and 3,934,200 19.7 - - 4,210,669 20.3 other assets ------------- -------------- ------------- Total fixed assets 9,345,567 46.8 - - 9,722,778 46.9 ------------- -------------- ------------- Total assets 19,956,937 100.0 - - 20,742,386 100.0 ------------- -------------- ------------- -1-
- ------------------------------------------------------------------------------------------------------------------------------ FY2003 semi-annual FY2004 semi-annual FY2003 selected data September 30, 2002 September 30, 2003 March 31, 2003 - ------------------------------------------------------------------------------------------------------------------------------ Item Notes Yen in millions Percent Yen in millions Percent Yen in millions Percent age age age - ------------------------------------------------------------------------------------------------------------------------------ (Liabilities) 1 Current liabilities 1 Trade notes and 1,420,607 - 1,582,245 accounts payable 2 Current portion of bonds 1,008,708 - 1,124,035 3 Short-term borrowings 1,042,581 - 966,243 4 Commercial papers 1,102,701 - 1,080,613 5 Accrued expenses and other accounts 1,170,114 - 1,356,294 payables 6 Income taxes payable 309,352 - 317,194 7 Deferred income taxes 1,391 - 1,570 8 Allowance for product 240,397 - 244,552 warranties 9 Allowance for employee 35,679 - 36,026 bonus 10 Other current 833,916 - 848,764 liabilities ------------- -------------- ------------- Total current 7,165,451 35.9 - - 7,557,541 36.4 liabilities 2 Long-term liabilities 1 Bonds 3,231,027 - 3,520,344 2 Long-term debt 467,989 - 573,767 3 Deferred income taxes 338,381 - 410,330 4 Allowance for 674,750 - 639,708 retirement benefits 5 Other long-term 96,184 - 84,218 liabilities ------------- -------------- ------------- Total long-term 4,808,334 24.1 - - 5,228,369 25.2 liabilities ------------- -------------- ------------- Total liabilities 11,973,785 60.0 - - 12,785,911 61.6 (Minority interest in consolidated subsidiaries) Minority interest in consolidated 472,094 2.4 - - 496,207 2.4 subsidiaries (Shareholders' equity) 1 Common stock 397,049 2.0 - - 397,049 1.9 2 Capital surplus 415,769 2.1 - - 418,401 2.0 3 Retained earnings 6,884,863 34.5 - - 7,219,896 34.8 4 Unrealized gains on other 151,609 0.7 - - 78,630 0.4 securities, net 5 Translation adjustments (83,968) (0.4) - - (112,350) (0.5) 6 Less: treasury stock (254,265) (1.3) - - (541,360) (2.6) ------------- -------------- ------------- Total shareholders' 7,511,057 37.6 - - 7,460,267 36.0 equity ------------- -------------- ------------- Total liabilities, 19,956,937 100.0 - - 20,742,386 100.0 minority interest in consolidated subsidiaries and shareholders' equity ------------- -------------- -------------
-2-
- -------------------------------------------------------------------------------------------------------------------- FY2004 semi-annual September 30, 2003 - -------------------------------------------------------------------------------------------------------------------- Item Notes Yen in millions Percentage - -------------------------------------------------------------------------------------------------------------------- (Assets) 1 Current assets 1 Cash and cash equivalents 1,243,211 2 Time deposits 43,086 3 Marketable securities 4 787,715 4 Trade accounts and notes receivable, less allowance for doubtful accounts of 34,480 million yen 1,290,688 5 Finance receivables, net 2,242,227 6 Other receivables 471,139 7 Inventories 1,059,824 8 Deferred income taxes 400,218 9 Prepaid expenses and other current assets 566,475 ----------------- Total current assets 8,104,583 39.0 2 Noncurrent finance receivables, net 3,026,614 14.6 3 Investments and other assets 1 Marketable securities and other securities 4 2,269,829 investments 2 Affiliated companies 1,245,596 3 Employees receivables 26,023 4 Other 703,915 ----------------- Total investments and other assets 4,245,363 20.4 4 Property, plant and equipment 1 Land 1,134,538 2 Buildings 2,775,775 3 Machinery and equipment 7,652,074 4 Vehicles and equipment on operating leases 5 1,556,037 5 Construction in progress 195,355 ----------------- Sub total 13,313,779 6 Less - Accumulated depreciation (7,913,219) ----------------- Total property, plant and equipment 5,400,560 26.0 ----------------- Total assets 20,777,120 100.0 -----------------
-3-
- -------------------------------------------------------------------------------------------------------------------- FY2004 semi-annual September 30, 2003 - -------------------------------------------------------------------------------------------------------------------- Item Notes Yen in millions Percentage - -------------------------------------------------------------------------------------------------------------------- (Liabilities) 1 Current liabilities 1 Short-term borrowings 1,999,453 2 Current portion of long-term debt 1,135,297 3 Accounts payable 1,563,774 4 Other payables 633,646 5 Accrued expenses 1,054,127 6 Income taxes payable 267,244 7 Other current liabilities 420,324 ----------------- Total current liabilities 7,073,865 34.0 2 Long-term liabilities 1 Long-term debt 4,108,804 2 Accrued pension and severance costs 1,112,900 3 Deferred income taxes 413,455 4 Other long-term liabilities 68,089 ----------------- Total long-term liabilities 5,703,248 27.5 ----------------- Total liabilities 12,777,113 61.5 (Minority interest in consolidated subsidiaries) Minority interest in consolidated subsidiaries 427,533 2.1 (Shareholders' equity) 1 Common stock, no par value, authorized: 9,740,185,400 shares issued: 3,609,997,492 shares 397,050 1.9 2 Additional paid-in capital 493,790 2.4 3 Retained earnings 7,756,473 37.3 4 Accumulated other comprehensive loss (476,553) (2.3) 5 Treasury stock, at cost (598,286) (2.9) 212,015,180 shares ----------------- Total shareholders' equity 7,572,474 36.4 (Commitments and contingencies) 8 ----------------- Total liabilities, minority interest in consolidated subsidiaries and shareholders' equity 20,777,120 100.0 -----------------
-4- 2 Semi-annual consolidated statements of income
- ----------------------------------------------------------------------------------------------------------------------------------- FY2003 semi-annual FY2004 semi-annual FY2003 selected data April 1, 2002 through April 1, 2003 through April 1, 2002 through September 30, 2002 September 30, 2003 March 31, 2003 - ----------------------------------------------------------------------------------------------------------------------------------- Item Notes Yen in millions Percent Yen in millions Percent Yen in millions Percent age age age - ----------------------------------------------------------------------------------------------------------------------------------- 1 Net revenues 7,886,681 100.0 - - 16,054,290 100.0 2 Cost of revenues 5,933,485 75.2 - - 12,156,140 75.7 ------------ ------------ ----------- Gross profit 1,953,196 24.8 - - 3,898,149 24.3 3 Selling, general and administrative expenses 1 Freight and 104,463 - 212,364 transportation charges 2 Selling expenses 179,301 - 354,998 3 Advertisement 136,710 - 327,793 4 Provision for product 102,738 - 199,777 warranties 5 Salaries and wages 310,529 - 649,620 6 Provision for 22,180 - 25,452 employee bonus 7 Net periodic pension 21,348 - 43,869 cost 8 Depreciation and 43,814 - 94,975 amortization 9 Provision for 47,097 - 124,011 doubtful accounts 10 Amortization of 10,711 - 13,498 goodwill 11 Other 243,471 1,222,368 15.5 - - - 488,107 2,534,469 15.8 ---------------------- ----------------------- ----------------------- Operating income 730,827 9.3 - - 1,363,679 8.5 4 Non-operating income 1 Interest income 23,072 - 43,278 2 Dividend income 6,466 - 10,002 3 Gains on sales of 1,767 - 12,641 securities 4 Gains on foreign 5,533 - 27,687 exchange 5 Equity in earnings of 51,627 - 81,966 affiliates 6 Other 67,403 155,871 2.0 - - - 120,523 296,100 1.8 ----------- ------------ --------- 5 Non-operating expenses 1 Interest expenses 15,426 - 28,687 2 Interests on 459 - 859 commercial papers 3 Losses on disposal of 25,820 - 53,863 fixed assets 4 Unrealized holding 2,034 - 55,273 losses on securities 5 Reductions of acquisition cost of 547 - 331 fixed assets 6 Donations 3,806 - 11,733 7 Other 44,575 92,671 1.2 - - - 95,026 245,775 1.5 ---------------------- ------------------- ----------------------- Ordinary income 794,028 10.1 - - 1,414,003 8.8 6 Extraordinary gains Gains on return of substitutional portion of employees' pension fund 186,050 186,050 2.3 - - - 235,314 235,314 1.5 ---------------------- ------------------- ----------------------- Income before income 980,078 12.4 - - 1,649,318 10.3 taxes and minority interest in consolidated subsidiaries Income taxes - current 334,162 - 617,556 Income taxes - deferred 59,338 393,500 5.0 - - - 33,237 650,794 4.1 ----------- ------------ ----------- Minority interest in 32,780 0.4 - - 53,852 0.3 consolidated subsidiaries ------------ ------------ ------------ Net income 553,797 7.0 - - 944,671 5.9 ------------ ------ ------------
-5-
- ------------------------------------------------------------------------------------------------------------------ FY2004 semi-annual April 1, 2003 through September 30, 2003 - ------------------------------------------------------------------------------------------------------------------ Item Notes Yen in millions Percentage - ------------------------------------------------------------------------------------------------------------------ 1 Net revenues 1 Sales of products 7,861,781 2 Financing operations 362,460 ----------------------------------- Total net revenues 8,224,241 100.0 2 Costs and expenses 1 Cost of products sold 6,274,364 2 Cost of financing operations 7 191,361 3 Selling, general and administrative 990,747 ----------------------------------- Total costs and expenses 7,456,472 90.7 ----------------------------------- Operating income 767,769 9.3 3 Other income (expense) 1 Interest and dividend income 28,779 2 Interest expense (12,210) 3 Foreign exchange gain, net 7 26,597 4 Other income, net 1,078 ----------------------------------- Total other income 44,244 0.6 ----------------------------------- Income before income taxes, minority interest 812,013 9.9 and equity in earnings of affiliated companies Provision for income taxes 309,931 3.8 ----------------------------------- ----------------------------------- Income before minority interest and equity in 502,082 6.1 earnings of affiliated companies ----------------------------------- Minority interest in consolidated subsidiaries (18,615) (0.2) Equity in earnings of affiliated companies 40,933 0.5 ----------------------------------- Net income 524,460 6.4 -----------------------------------
(Yen) - --------------------------------------------------------------------------- Net income per common share Basic 153.36 Diluted 153.35 Interim cash dividends per common share 20.00 - --------------------------------------------------------------------------- -6- 3 Semi-annual consolidated statements of capital surplus and retained earnings and semi-annual consolidated statements of shareholders' equity (Semi-annual consolidated statements of capital surplus and retained earnings)
- --------------------------------------------------------------------------------------------------------------------- FY2003 semi-annual FY2004 semi-annual FY2003 April 1, 2002 through April 1, 2003 through April 1, 2002 through September 30, 2002 September 30, 2003 March 31, 2003 - --------------------------------------------------------------------------------------------------------------------- Item Notes Yen in millions Yen in millions Yen in millions - --------------------------------------------------------------------------------------------------------------------- (Capital surplus) 1 Capital surplus at beginning of period Capital reserve at 415,150 415,150 - - 415,150 415,150 beginning of period ---------- ---------- ----------- 2 Increase in capital surplus 1 Gain on disposal of 619 - 1,430 treasury stock 2 Increase resulting from - 619 - - 1,820 3,251 exchange of shares ---------------------------------------------------------------------------- 3 Capital surplus at end of 415,769 - 418,401 period ----------- --------- ----------- (Retained earnings) 1 Retained earnings at beginning of period Consolidated earned surplus at beginning of period 6,527,956 6,527,956 - - 6,527,956 6,527,956 ---------- ---------- ----------- 2 Increase in retained earnings 1 Net income 553,797 - 944,671 2 Increase resulting from decrease in consolidated 1,496 - 3,804 subsidiaries 3 Increase resulting from increase in affiliates accounted for under the equity method 272 555,567 - - 166 948,642 ---------- ---------- ----------- 3 Decrease in retained earnings 1 Dividends 53,342 - 109,330 2 Bonuses to directors 2,316 - 2,316 and corporate auditors 3 Decrease resulting from increase in consolidated 9 - 2,062 subsidiaries 4 Decrease resulting from share retirement by the parent company 142,992 198,660 - - 142,992 256,702 ---------------------------------------------------------------------------- 4 Retained earnings at end of 6,884,863 - 7,219,896 period ----------- --------- ----------- - ---------------------------------------------------------------------------------------------------------------------
-7- (Semi-annual consolidated statements of shareholders' equity)
- ---------------------------------------------------------------------------------------------------------------------- FY2004 semi-annual April 1,2003 through September 30,2003 - ---------------------------------------------------------------------------------------------------------------------- Accumulated Additional other Treasury Item Notes Common paid-in Retained comprehensive stock, Total stock capital earnings income (loss) at cost - ---------------------------------------------------------------------------------------------------------------------- Yen in millions - ---------------------------------------------------------------------------------------------------------------------- Balance at March 31, 2003 397,050 493,790 7,301,795 (604,272) (467,363) 7,121,000 ------------------------------------------------------------------------------ 1 Comprehensive income: (1) Net income 524,460 524,460 (2) Other comprehensive income (loss), 1 Foreign currency translation adjustments (112,479) (112,479) 2 Unrealized gains (losses) on securities, net of reclassification 228,270 228,270 adjustments 3 Minimum pension liability 11,928 11,928 adjustments ---------- Total comprehensive income 652,179 ---------- 2 Dividends paid (69,782) (69,782) 3 Purchase and retirement of (130,923) (130,923) common stock ------------------------------------------------------------------------------ Balance at September 30, 2003 397,050 493,790 7,756,473 (476,553) (598,286) 7,572,474 ------------------------------------------------------------------------------ - ----------------------------------------------------------------------------------------------------------------------
-8- 4 Semi-annual consolidated statements of cash flows
- --------------------------------------------------------------------------------------------------------------------- FY2003 semi-annual FY2004 semi-annual FY2003 selected data April 1, 2002 through April 1, 2003 through April 1, 2002 through September 30, 2002 September 30, 2003 March 31, 2003 - --------------------------------------------------------------------------------------------------------------------- Item Notes Yen in millions Yen in millions Yen in millions - --------------------------------------------------------------------------------------------------------------------- 1 Cash flows from operating activities 1 Income before income taxes and minority interest in consolidated 980,078 - 1,649,318 subsidiaries 2 Depreciation 416,044 - 851,634 3 Losses on disposal of fixed 25,820 - 53,863 assets 4 Decrease in allowance for (181,472) - (113,478) retirement benefits 5 Interest and dividend income (29,539) - (53,280) 6 Interest expenses 15,886 - 29,547 7 Equity in earnings of (51,627) - (81,966) affiliates 8 Increase in trade notes and (143,035) - (357,746) accounts receivable 9 Increase in loans receivable of consolidated finance (98,704) - (407,186) subsidiaries 10 (Increase) decrease in 7,805 - (25,842) inventories 11 Increase (decrease ) in (45,766) - 108,611 trade notes and accounts payable 12 Other (4,133) - 294,123 ---------------------------------------------------------------------- Sub total 891,355 - 1,947,598 13 Interests and dividends 38,860 - 69,766 received 14 Interests paid (15,574) - (30,084) 15 Income taxes paid (382,641) - (657,808) - --------------------------------------------------------------------------------------------------------------------- Cash flows from operating activities 532,001 - 1,329,472 - --------------------------------------------------------------------------------------------------------------------- 2 Cash flows from investing activities 1 Net increase in time deposits (11,248) - (32,195) 2 Purchases of marketable securities and investments in (483,502) - (1,111,584) securities 3 Proceeds from sales of marketable securities and 107,632 - 208,776 investments in securities 4 Proceeds on maturity of marketable securities and 462,247 - 723,981 investments in securities 5 Additions to property, plant and equipment (excluding vehicles (533,773) - (1,012,803) for lease) 6 Additions to vehicles for lease (256,877) - (540,945) 7 Proceeds from sales of property, plant and equipment 31,605 - 64,074 (excluding vehicles for lease) 8 Proceeds from sales of 126,598 - 283,840 vehicles for lease 9 Other 34,403 - 31,042 - --------------------------------------------------------------------------------------------------------------------- Cash flows from investing activities (522,914) - (1,385,814) - ---------------------------------------------------------------------------------------------------------------------
-9-
- --------------------------------------------------------------------------------------------------------------------- FY2003 semi-annual FY2004 semi-annual FY2003 selected data April 1, 2002 through April 1, 2003 through April 1, 2002 through September 30, 2002 September 30, 2003 March 31, 2003 - --------------------------------------------------------------------------------------------------------------------- Item Notes Yen in millions Yen in millions Yen in millions - --------------------------------------------------------------------------------------------------------------------- 3 Cash flows from financing activities 1 Net decrease in short-term (72,158) - (202,190) borrowings 2 Net increase in commercial 207,884 - 179,453 papers 3 Proceeds from origination of 49,762 - 189,693 long-term debt 4 Payments for long-term debt (63,047) - (144,933) 5 Proceeds from issuance of bonds 840,917 - 1,564,564 6 Payments for redemption of (498,603) - (984,848) bonds 7 Purchase of treasury stock (169,213) - (454,611) 8 Dividends paid (53,342) - (109,330) 9 Other (5,089) - (4,241) - --------------------------------------------------------------------------------------------------------------------- Cash flows from financing activities 237,111 - 33,555 - --------------------------------------------------------------------------------------------------------------------- 4 Effect of exchange rate changes on (40,937) - (42,098) cash and cash equivalents - --------------------------------------------------------------------------------------------------------------------- 5 Net increase (decrease) in cash and 205,261 - (64,884) cash equivalents - --------------------------------------------------------------------------------------------------------------------- 6 Cash and cash equivalents at 1,688,126 - 1,688,126 beginning of period - --------------------------------------------------------------------------------------------------------------------- 7 Cash and cash equivalents at end of 1,893,387 - 1,623,241 period ----------------------------------------------------------------------
-10-
- -------------------------------------------------------------------------------------------------------------------- FY2004 semi-annual April 1, 2003 through September 30, 2003 - -------------------------------------------------------------------------------------------------------------------- Item Notes Yen in millions - -------------------------------------------------------------------------------------------------------------------- 1 Cash flows from operating activities 1 Net income 524,460 2 Adjustments to reconcile net income to net cash provided by operating activities (1) Depreciation 475,938 (2) Provision for doubtful accounts and credit losses 38,418 (3) Pension and severance costs, less payments 33,957 (4) Loss on disposal of fixed assets 18,896 (5) Unrealized losses on available-for-sale securities, net 2,697 (6) Deferred income taxes 21,996 (7) Minority interest in consolidated subsidiaries 18,615 (8) Equity in earnings of affiliated companies (40,993) (9) Changes in operating assets and liabilities 80,125 (10) Other (61,185) - -------------------------------------------------------------------------------------------------------------------- Net cash provided by operating activities 1,112,924 - -------------------------------------------------------------------------------------------------------------------- 2 Cash flows from investing activities 1 Additions to finance receivables (4,182,349) 2 Collection of and proceeds from sales of finance 3,727,776 receivables 3 Additions to fixed assets excluding equipment leased to (445,522) others 4 Additions to equipment leased to others (298,454) 5 Proceeds from sales of fixed assets excluding equipment 31,234 leased to others 6 Proceeds from sales of equipment leased to others 133,073 7 Purchases of marketable securities and security (1,137,863) investments 8 Proceeds from sales of and maturity of marketable 705,614 securities and security investments 9 Decrease in time deposits 15,845 10 Decrease in investments and other assets 138 11 Payments for additional investments in affiliated companies, net of cash acquired (18,876) 12 Other (2,720) - -------------------------------------------------------------------------------------------------------------------- Net cash used in investing activities (1,472,104) - -------------------------------------------------------------------------------------------------------------------- 3 Cash flows from financing activities 1 Purchases of common stock (120,229) 2 Proceeds from issuance of long-term debt 700,149 3 Payments of long-term debt (622,709) 4 Increase in short-term borrowings 160,970 5 Dividends paid (69,782) - -------------------------------------------------------------------------------------------------------------------- Net cash provided by financing activities 48,399 - -------------------------------------------------------------------------------------------------------------------- 4 Effect of exchange rate changes on cash and cash equivalents (38,036) - -------------------------------------------------------------------------------------------------------------------- 5 Net decrease in cash and cash equivalents (348,817) - -------------------------------------------------------------------------------------------------------------------- 6 Cash and cash equivalents at beginning of period 1,592,028 - -------------------------------------------------------------------------------------------------------------------- 7 Cash and cash equivalents at end of period 1,243,211 ---------------------------------------
-11- Significant matters for preparation of semi-annual consolidated financial statements
- -------------------------------------------------------------------------------------------------------------------- FY2003 semi-annual FY2004 semi-annual FY2003 April 1, 2002 through April 1, 2003 through April 1, 2002 through September 30, 2002 September 30, 2003 March 31, 2003 - -------------------------------------------------------------------------------------------------------------------- 1. Scope of Consolidation 1. Scope of Consolidation Number of consolidated Number of consolidated subsidiaries: 579 subsidiaries: 581 (1) Number of consolidated (1) Number of consolidated subsidiaries in Japan: 354 subsidiaries in Japan: 355 Tokyo Toyota Motor Co., Ltd. Tokyo Toyota Motor Co., Ltd. Tokyo Toyo-Pet Motor Sales Tokyo Toyo-Pet Motor Sales Co., Ltd. Co., Ltd. Osaka Toyopet Co., Ltd. Osaka Toyopet Co., Ltd. Toyota Tokyo Corolla Co., Ltd. Toyota Tokyo Corolla Co., Ltd. Hino Motors, Ltd. Hino Motors, Ltd. Toyota Motor Kyushu, Inc. Toyota Motor Kyushu, Inc. Daihatsu Motor Co., Ltd. Daihatsu Motor Co., Ltd. Toyota Motor Hokkaido, Inc. Toyota Motor Hokkaido, Inc. Toyota Auto Body Co., Ltd. Toyota Auto Body Co., Ltd. Kanto Auto Works, Ltd. Kanto Auto Works, Ltd. Araco Corporation Araco Corporation Toyota Financial Services Toyota Financial Services Corporation Corporation Toyota Finance Corporation Toyota Finance Corporation Others Others (2) Number of overseas (2) Number of overseas consolidated subsidiaries: consolidated subsidiaries: 225 226 Toyota Motor North America, Toyota Motor North America, Inc. Inc. Toyota Motor Europe n.v./s.v. Toyota Motor Europe n.v./s.v. Toyota Motor Sales, U.S.A., Toyota Motor Sales, U.S.A., Inc. Inc. Toyota Motor Marketing Europe ----------------------- Toyota Motor Marketing Europe n.v./s.a. n.v./s.a. Toyota Deutschland G.m.b.H. Toyota Deutschland G.m.b.H. Toyota (GB) PLC Toyota France S.A. Toyota Motor Manufacturing, Toyota Motor Italia S.p.A. North America, Inc. Toyota (GB) PLC Toyota Motor Manufacturing, Toyota Motor Manufacturing, Kentucky, Inc. North America, Inc. Toyota Motor Manufacturing, Toyota Motor Manufacturing, Indiana, Inc. Kentucky, Inc. Toyota Motor Manufacturing Toyota Motor Manufacturing, Canada Inc. Indiana, Inc. Toyota Motor Engineering & Toyota Motor Manufacturing Manufacturing Europe n.v./s.a. Canada Inc. Toyota Motor Manufacturing Toyota Motor Engineering & (UK) Ltd. Manufacturing Europe Kuozui Motors Ltd. n.v./s.a. Toyota Motor Thailand Co., Ltd. Toyota Motor Manufacturing Toyota Motor Corporation (UK) Ltd. Australia Ltd. Toyota South Africa Motors Toyota Motor Credit Corporation (Pty) Ltd. Toyota Credit Canada Inc. Kuozui Motors Ltd. Toyota Kreditbank G.m.b.H. Toyota Motor Thailand Co., Toyota Motor Finance Ltd. (Netherlands) B.V. Toyota Motor Corporation Toyota Financial Services (UK) Australia Ltd. PLC Toyota Motor Credit Toyota Finance Australia Ltd. Corporation Others Toyota Credit Canada Inc. Toyota Kreditbank G.m.b.H. Toyota Motor Finance (Netherlands) B.V. Toyota Financial Services (UK) PLC Toyota Finance Australia Ltd. Others
-12-
- -------------------------------------------------------------------------------------------------------------------- FY2003 semi-annual FY2004 semi-annual FY2003 April 1, 2002 through April 1, 2003 through April 1, 2002 through September 30, 2002 September 30, 2003 March 31, 2003 - -------------------------------------------------------------------------------------------------------------------- During this semi-annual During this fiscal year, 41 period, 27 companies, companies, including Toyota including Toyota Motor Europe Motor Europe n.v./s.v., newly n.v./s.v., newly became became subsidiaries of Toyota subsidiaries of Toyota Motor Motor Corporation ("TMC") and Corporation ("TMC") and were were consolidated. consolidated. Subsidiaries Subsidiaries excluded from excluded from the scope of the scope of consolidation consolidation included (i) 4 included (i) 6 companies, companies, including Toyota including Toyota Kyoei Kyoei Service Co, Ltd., that Service Co., Ltd., that ceased to be subsidiaries of ceased to be subsidiaries of TMC due to decreases in TMC due to decreases in shareholding ratios resulting shareholding ratios resulting from sales of their respective from sales of their voting shares or other respective voting shares or reasons; (ii) 3 companies, other reasons; (ii) 12 including Toyota Media Station companies, including Toyota Inc., that were liquidated; Media Station Inc., that were and (iii) 5 companies, liquidated; and (iii) 6 including Toyota Modellista companies, including Toyota Fukuoka Corporation, that were Modellista Fukuoka merged into other consolidated Corporation, that were merged subsidiaries. into other consolidated subsidiaries. 2. Application of Equity Method 2. Application of Equity Method (1)Number of affiliates accounted (1)Number of affiliates for under the equity method: 50 accounted for under the equity method: 51 (a) Number of domestic affiliates accounted for (a) Number of domestic under the equity method: 34 affiliates accounted for under the equity method: 34 Toyota Industries Corporation Aichi Steel Corporation Toyota Industries Toyoda Machine Works, Ltd. Corporation Toyota Tsusho Corporation ------------------------ Aichi Steel Corporation Aisin Seiki Co., Ltd. Toyoda Machine Works, Ltd. Denso Corporation Toyota Tsusho Corporation Toyoda Gosei Co., Ltd. Aisin Seiki Co., Ltd. Aisin AW Co., Ltd. Denso Corporation Aioi Insurance Co., Ltd. Toyoda Gosei Co., Ltd. Others Aisin AW Co., Ltd. Aioi Insurance Co., Ltd. (b) Number of overseas Others affiliates accounted for under the equity method: 16 (b) Number of overseas affiliates accounted for New United Motor under the equity method: 17 Manufacturing, Inc. Others New United Motor Manufacturing, Inc. Toyota Canada Inc. From this semi-annual period, Others 2 affiliates, including Tianjin Toyota Motor Co., Ltd. From this fiscal year, 6 were accounted for under the affiliates, including Tianjin equity method in consideration Toyota Motor Co., Ltd. were of their materiality. In accounted for under the addition, Toyota Espana S.L., equity method in which was previously accounted consideration of their as an equity method affiliate, materiality. In addition, 4 has newly become subsidiaries companies previously of TMC and has consequently accounted as equity method been consolidated. Jeco Co., affiliates, including Toyota Ltd. was no longer accounted Woodyou Home Corporation and for under the equity method in Toyota Espana S.L., have consideration of its newly become subsidiaries of materiality, resulting from TMC and have consequently the sale of its shares. been consolidated. Jeco Co., Ltd. was no longer accounted for under the equity method in consideration of its materiality, resulting from the sale of its shares.
-13-
- -------------------------------------------------------------------------------------------------------------------- FY2003 semi-annual FY2004 semi-annual FY2003 April 1, 2002 through April 1, 2003 through April 1, 2002 through September 30, 2002 September 30, 2003 March 31, 2003 - -------------------------------------------------------------------------------------------------------------------- (2) Number of unconsolidated (2) Number of unconsolidated subsidiaries and affiliates subsidiaries and affiliates not accounted for under the not accounted for under the equity method equity method Affiliates: 184, including Affiliates: 182, including Aisin Takaoka Co., Ltd. Aisin Takaoka Co., Ltd. (3) Affiliates not accounted for (3) Affiliates not accounted under the equity method are for under the equity method all insignificant in terms of are all insignificant in their net income (loss), legal terms of their net income reserve and retained earnings, (loss), legal reserve and and impact on the semi-annual retained earnings, and consolidated financial impact on the consolidated statements is immaterial. financial statements is immaterial. 3. Semi-Annual Period Ends of 3. Fiscal Year Ends of Consolidated Subsidiaries Consolidated Subsidiaries (1) The semi-annual period ends (1) The fiscal year ends of the of the following consolidated following consolidated subsidiaries are different subsidiaries differ from that from the one of TMC, which is of TMC, which is March 31. September 30. A total of 39 subsidiaries A total of 40 subsidiaries whose fiscal year ends on whose semi-annual period end ------------------------ December 31 includes: on June 30 includes: OOO Toyota Motor Toyota Motor Italia S.p.A. Tianjin Toyota Forging Co., OOO Toyota Motor Ltd. Toyota Motor Thailand Co., Tianjin Fengjin Auto Parts Limited Co., Ltd. Tianjin Toyota Forging Co., Toyota Motor (China) Ltd. Investment Co., Ltd. Tianjin Fengjin Auto Parts Toyota Motor Technical Center Co., Ltd. (China) Co., Ltd. Toyota Motor (China) Toyota Motorsport G.m.b.H. Investment Co., Ltd. Toyota Motor Technical Center (China) Co., Ltd. Toyota Motorsport G.m.b.H. In addition, the following In addition, the following subsidiaries' fiscal years subsidiaries follow fiscal end on the date specified in calendars whose semi-annual parentheses: periods end on the date specified in parentheses: Fahren Miyagi Co., Ltd. (April 30) Itagaki Kousan Co., Ltd. Itagaki Syouji Co., Ltd. (March 31) (June 30) Fahren Miyagi Co., Ltd. Itagaki Kousan Co., Ltd. (October 31) (September 30) Itagaki Syouji Co., Ltd. (December 31)
-14-
- -------------------------------------------------------------------------------------------------------------------- FY2003 semi-annual FY2004 semi-annual FY2003 April 1, 2002 through April 1, 2003 through April 1, 2002 through September 30, 2002 September 30, 2003 March 31, 2003 - -------------------------------------------------------------------------------------------------------------------- (2) Of the above subsidiaries, (2) Of the above subsidiaries, Itagaki Kousan Co., Ltd (whose Fahren Miyagi Co., Ltd (whose semi-annual period ends on fiscal year ends on April March 31), Fahren Miyagi Co., 30), Itagaki Syouji Co., Ltd Ltd (whose semi-annual period (whose fiscal year ends on ends on Octorber 31), Itagaki June 30), Itagaki Kousan Co., Syouji Co., Ltd (whose Ltd (whose fiscal year ends semi-annual period ends on on September 30) and 10 other December 31) and 12 other subsidiaries whose fiscal subsidiaries whose semi-annual years end on December 31, periods end on June 30, including Banco Toyota do including Toyota Motor Brasil S.A., were Thailand Co., Limited, were consolidated based on the consolidated based on the amounts for a year ended amounts for six month period March 31 prepared for the ended September 30 prepared purpose of consolidation. In for the purpose of addition, 29 subsidiaries, consolidation. In addition, 28 including OOO Toyota Motor, subsidiaries, including OOO were consolidated based on Toyota Motor, were their respective financial consolidated based on their statements. respective semi-annual financial statements. 4. Significant Accounting Policies 4. Significant Accounting Policies (1) Valuation of assets (1) Valuation of assets (a) Securities (a) Securities Securities with fair value Securities with fair value Principally stated at fair Principally stated at fair value based on market value based on market prices at end of prices at end of fiscal semi-annual period. year. (Unrealized holding (Unrealized holding gains gains and losses are and losses are accounted accounted for as a for as a component of ------------------------ component of shareholders' shareholders' equity; cost equity; cost of sales is of sales is determined determined using the using the moving average moving average method.) method.) Securities not practicable Securities not practicable to fair value to fair value Principally stated at cost Principally stated at cost using the moving average using the moving average method. method. (b) Derivatives (b) Derivatives Principally stated at fair Principally stated at fair value. value. (c) Money trusts for trading (c) Money trusts for trading purposes purposes Stated at fair value. Stated at fair value. (d) Inventories (d) Inventories TMC and domestic TMC and domestic consolidated subsidiaries consolidated subsidiaries Principally stated at Principally stated at cost, as determined cost, as determined using the periodic using the periodic average method or the average method or the specific identification specific identification method. method. Overseas consolidated Overseas consolidated subsidiaries subsidiaries Principally stated at Principally stated at the lower of cost or the lower of cost or market value based on market value based on the specific the specific identification method, identification method, first-in-first-out first-in-first-out method or method or last-in-first-out method. last-in-first-out method.
-15-
- -------------------------------------------------------------------------------------------------------------------- FY2003 semi-annual FY2004 semi-annual FY2003 April 1, 2002 through April 1, 2003 through April 1, 2002 through September 30, 2002 September 30, 2003 March 31, 2003 - -------------------------------------------------------------------------------------------------------------------- (2)Depreciation and amortization (2) Depreciation and amortization (a) Depreciation of property, (a) Depreciation of property, plant and equipment plant and equipment TMC and domestic TMC and domestic consolidated subsidiaries: consolidated subsidiaries: Principally computed using Principally computed the declining balance using the declining method. The determination balance method. The of useful life and determination of useful residual value is based on life and residual value the same standards as in is based on the same the Corporate Tax Laws. standards as in the Corporate Tax Laws. Buildings and structures, machinery and equipment, Buildings and structures, vehicles and delivery machinery and equipment, equipment and other vehicles and delivery property, plant and equipment and other equipment of TMC is property, plant and depreciated to their equipment of TMC is actual residual value depreciated to their after they have been actual residual value depreciated to their after they have been depreciable limit under depreciated to their the Corporate Tax Laws. depreciable limit under the Corporate Tax Laws. Overseas consolidated subsidiaries: Overseas consolidated subsidiaries: Principally computed using the straight-line method. Principally computed using the straight-line ------------------------ method. (b) Amortization of intangible (b) Amortization of intangible fixed assets fixed assets Software for internal use Software for internal use is amortized over its is amortized over its estimated useful life of 5 estimated useful life of years using the 5 years using the straight-line method. straight-line method. (3) Accounting of deferred assets (3) Accounting of deferred assets Organization expenses, Organization expenses, business commencement business commencement expenses, share issuance expenses, share issuance expenses, bond issuance expenses, bond issuance expenses and bond discounts expenses and bond discounts are expensed when the payment are expensed when the is made. payment is made. (4) Significant allowances (4) Significant allowances (a)Allowance for doubtful (a)Allowance for doubtful accounts accounts TMC: TMC: To prepare for losses from To prepare for losses uncollectible receivables, from uncollectible allowance for doubtful receivables, allowance accounts is provided in an for doubtful accounts is amount equivalent to the provided in an amount maximum limit deductible equivalent to the maximum for tax purposes which is limit deductible for tax determined by the purposes which is Corporate Tax Laws or an determined by the amount determined by Corporate Tax Laws or an considering the amount determined by collectibility of considering the receivable. collectibility of receivable.
-16-
- -------------------------------------------------------------------------------------------------------------------- FY2003 semi-annual FY2004 semi-annual FY2003 April 1, 2002 through April 1, 2003 through April 1, 2002 through September 30, 2002 September 30, 2003 March 31, 2003 - -------------------------------------------------------------------------------------------------------------------- Consolidated subsidiaries: Consolidated subsidiaries: Principally computed based Principally computed on the maximum limit based on the maximum deductible for tax limit deductible for tax purposes which is purposes which is determined by the determined by the Corporate Tax Laws or the Corporate Tax Laws or the historical loss experience. historical loss experience. (b)Allowance for product (b)Allowance for product warranties warranties To prepare for expenses To prepare for expenses related to after-sale related to after-sale services, allowance for services, allowance for product warranty is provided product warranty is based on the terms of the provided based on the warranties and historical terms of the warranties experience. and historical experience. (c)Allowance for employee bonus (c)Allowance for employee bonus To provide for employee To provide for employee bonuses, some of the bonus, some of the consolidated subsidiaries consolidated subsidiaries accrue part of the estimated ------------------------ accrue part of the bonus payments for the estimated bonus payments following fiscal period which for the following fiscal are attributed to the current year which are attributed semi-annual period. to the current fiscal year. (d)Allowance for retirement (d)Allowance for retirement benefits benefits Principally to provide for Principally to provide the retirement benefits for for the retirement employees, including those benefits for employees, already retired, allowance including those already for retirement benefits retired, allowance for obligations deemed to have retirement benefits been incurred during the obligations deemed to current semi-annual period is have been incurred during stated based on estimated the current fiscal year retirement benefit is stated based on obligations and estimated estimated retirement pension assets at the end of benefit obligations and the current semi-annual estimated pension assets period. at the end of the fiscal year. (5)Accounting for Lease (5)Accounting for Lease Transactions Transactions Finance lease transactions Finance lease transactions other than those which are other than those which are deemed to transfer the deemed to transfer the ownership of the leased ownership of the leased assets to lessees are assets to lessees are accounted for by a method accounted for by a method similar to that used for similar to that used for ordinary operating lease ordinary operating lease transactions. transactions.
-17-
- -------------------------------------------------------------------------------------------------------------------- FY2003 semi-annual FY2004 semi-annual FY2003 April 1, 2002 through April 1, 2003 through April 1, 2002 through September 30, 2002 September 30, 2003 March 31, 2003 - -------------------------------------------------------------------------------------------------------------------- (6)Accounting for Hedges (6)Accounting for Hedges Gains or losses arising from Gains or losses arising from changes in fair value of the changes in fair value of the derivatives designed as derivatives designed as "hedging instruments" are "hedging instruments" are deferred as assets or deferred as assets or liabilities, or those liabilities, or those derivatives are used for derivatives are used for valuating hedged assets or valuating hedged assets or liabilities. liabilities. TMC and its consolidated TMC and its consolidated subsidiaries enter into the subsidiaries enter into the following hedge transactions: following hedge transactions: (i) foreign exchange forward (i) foreign exchange forward contracts and foreign currency contracts and foreign currency options, primarily to hedge options, primarily to hedge against exchange rate against exchange rate fluctuation risks related to fluctuation risks related to accounts receivable denominated accounts receivable in foreign currencies, denominated in foreign primarily the U.S. dollar; (ii) currencies, primarily the U.S. interest rate options, dollar; (ii) interest rate primarily to hedge against options, primarily to hedge interest rate fluctuation risks against interest rate related to floating-rate fluctuation risks related to liabilities; and (iii) interest floating-rate liabilities; and rate currency swaps and (iii) interest rate currency interest rate swaps, primarily swaps and interest rate swaps, to hedge against currency and primarily to hedge against interest rate fluctuation risks currency and interest rate related to the principal and fluctuation risks related to interest of bond portfolios the principal and interest of denominated in foreign bond portfolios denominated in currencies and straight bonds foreign currencies and issued in foreign currencies. straight bonds issued in foreign currencies. ------------------------ The assessment of hedge The assessment of hedge effectiveness is conducted by effectiveness is conducted by comparing the accumulated comparing the accumulated fluctuation in fair value or fluctuation in fair value or cash flow of the hedged item cash flow of the hedged item and the hedge instrument in the and the hedge instrument in period between the start date the period between the start of the hedge transaction and date of the hedge transaction the day of assessment. and the day of assessment. TMC believes that its exposure TMC believes that its exposure to credit risk is immaterial as to credit risk is immaterial the counterparties of the as the counterparties of the transactions entered into by transactions entered into by TMC and its subsidiaries are TMC and its subsidiaries are diversified among financial diversified among financial institutions with strong credit institutions with strong profiles. The execution and credit profiles.The execution management of hedge and management of hedge transactions are conducted by transactions are conducted by the financial department of the financial department of each company upon obtaining each company upon obtaining approval from directors approval from directors overseeing the accounting and overseeing the accounting and financial operations. The financial operations. The status of these transactions is status of these transactions periodically reported to the is periodically reported to overseeing directors. these overseeing directors. (7)Accounting of consumption taxes (7)Accounting of consumption taxes Consumption tax is computed using the net-of-tax method. Consumption tax is computed using the net-of-tax method.
-18-
- -------------------------------------------------------------------------------------------------------------------- FY2003 semi-annual FY2004 semi-annual FY2003 April 1, 2002 through April 1, 2003 through April 1, 2002 through September 30, 2002 September 30, 2003 March 31, 2003 - -------------------------------------------------------------------------------------------------------------------- 5. Definition of funds on 5. Definition of funds on semi-annual consolidated consolidated statements of statements of cash flows cash flows Cash and cash equivalents on Cash and cash equivalents on the semi-annual consolidated the consolidated statements of statements of cash flows cash flows include cash on include cash on hand, ------------------------ hand, immediately accessible immediately accessible bank bank deposits, and short-term deposits, and short-term investments with original investments with original maturities of 3 months or maturities of 3 months or less, less, that are readily that are readily convertible convertible into cash and that into cash and that bear bear insignificant risk of insignificant risk of changes changes in value. in value.
-19- (Changes in Accounting Policy)
- -------------------------------------------------------------------------------------------------------------------- FY2003 semi-annual FY2004 semi-annual FY2003 April 1, 2002 through April 1, 2003 through April 1, 2002 through September 30, 2002 September 30, 2003 March 31, 2003 - -------------------------------------------------------------------------------------------------------------------- 1. Accounting Standards for Treasury Stock and the Withdrawal of Legal Reserve In conjunction with the implementation of "Accounting Standards for Treasury Stock and the Withdrawal of Legal Reserve" (Financial Accounting Standards No. 1) effective from April 1, 2002, TMC and its domestic subsidiaries have adopted this statement for this fiscal year. The adoption of the new standard had no material impact on the results for this fiscal year. In connection with the amendment of the Regulations Regarding Consolidated Financial Statements, shareholders' equity in the - ------------------------ ------------------------ consolidated balance sheet and consolidated statements of retained earnings and capital surplus for this fiscal year have been prepared in accordance with the amended regulations. 2. Earnings per share In conjunction with the implementation of "Accounting Standard for Earnings Per Share" (Financial Accounting Standards No. 2) and "Implementation Guidance of Accounting Standard for Earnings Per Share" (Implementation Guidance of Financial Accounting Standards No. 4) for the year beginning on and after April 1, 2002, TMC has adopted these statements for this fiscal year. The impact due to the adoption of these new standards is described in (Per share data).
(Changes in Presentation)
- -------------------------------------------------------------------------------------------------------------------- FY2003 semi-annual FY2004 semi-annual April 1, 2002 through April 1, 2003 through September 30, 2002 September 30, 2003 - -------------------------------------------------------------------------------------------------------------------- "Commercial paper" is presented as a separate line item in the semi-annual consolidated balance sheet because it exceeded 5% of the total of liabilities, -------------------- minority interests and shareholders' equity as of the end of the semi-annual period. The line item "Other" under "Current liabilities" in the semi-annual consolidated balance sheet of the previous semi-annual period included commercial paper in the amount of 616,901 million yen. - --------------------------------------------------------------------------------------------------------------------
-20- (Additional Information)
- -------------------------------------------------------------------------------------------------------------------- FY2003 semi-annual FY2004 semi-annual FY2003 April 1, 2002 through April 1, 2003 through April 1, 2002 through September 30, 2002 September 30, 2003 March 31, 2003 - -------------------------------------------------------------------------------------------------------------------- 1.In conjunction with enforcement In conjunction with enforcement of the Defined Benefit of the Defined Benefit Enterprise Pension Plan Law, Enterprise Pension Plan Law, TMC, some of its domestic TMC, some of its domestic consolidated subsidiaries and consolidated subsidiaries and domestic affiliates accounted domestic affiliates accounted for under the equity method for under the equity method received approval from the received approval from the Minister of Health, Labor and Minister of Health, Labor and Welfare, for exemption from the Welfare, for exemption from the obligation for benefits related obligation for benefits related to future employee service under to future employee service the substitutional portion. (TMC under the substitutional received approval on April 1, portion. (TMC received the 2002). approval on April 1, 2002) TMC and these subsidiaries and TMC and these subsidiaries and affiliates applied the affiliates applied the transitional provision transitional provision stipulated in paragraph 47-2 of stipulated in paragraph 47-2 of the "Practical Guidelines of the "Practical Guidelines of Accounting for Retirement Accounting for Retirement Benefits (Interim Report)" Benefits (Interim Report)" (Accounting Committee Report No. (Accounting Committee Report 13 issued by the Japanese No. 13 issued by the Japanese Institute of Certified Public Institute of Certified Public Accountants), and recognized an Accountants), and recognized an extinguishment of retirement extinguishment of retirement benefit obligation related to benefit obligation related to the substitutional portion as of the substitutional portion as the date of the approval. of the date of the approval. As a result, 30,301 million yen As a result, 32,341 million yen was recognized as "Equity in was recognized as "Equity in earnings of affiliates" under earnings of affiliates" under "Non-operating income", and ------------------------ "Non-operating income", and 186,050 million yen was 235,314 million yen was recognized as "Gains on return recognized as "Gains on return of substitutional portion of of substitutional portion of employees' pension fund" under employees' pension fund" under "Extraordinary gains" in this "Extraordinary gains" in this semi-annual period. fiscal year. Perspective amount to be Perspective amount to be returned is 354,083 million yen returned is 474,400 million yen as of September 30, 2002. as of March 31, 2003. 2.From this consolidated semi-annual period, TMC and its subsidiaries has adopted the new standard "Accounting Standard for Treasury Stock and Reduction of Legal Reserve" (Financial Accounting Standards No. 1). The adoption of the new standard had no material impact on the results of this semi-annual period. In connection with the amendment of the Regulations Regarding Interim Financial Statements, etc., shareholders' equity in the semi-annual consolidated balance sheet and the semi-annual consolidated statements of retained earnings of this semi-annual period have been prepared in accordance with the amended regulations.
-21- Notes to semi-annual consolidated financial statements (Semi-annual consolidated balance sheets)
- -------------------------------------------------------------------------------------------------------------------- FY2003 semi-annual FY2004 semi-annual FY2003 September 30, 2002 September 30, 2003 March 31, 2003 - -------------------------------------------------------------------------------------------------------------------- 1. 1. *1 Accumulated depreciation of *1 Accumulated depreciation of property, plant and equipment property, plant and equipment 7,770,939 million yen 7,931,514 million yen *2 Vehicles and delivery equipment *2 Vehicles and delivery include assets under lease equipment include assets under contracts (Toyota as lessor) in lease contracts (Toyota as the amounts of 1,109,561 lessor) in the amounts of million yen. 1,134,883 million yen. *3 Fair value of securities held as collateral of repurchase agreement transactions, which TMC and its consolidated subsidiaries have the right to dispose of, are 24,999 million yen. 2. Assets pledged as collateral and 2. Assets pledged as collateral and secured secured liabilities liabilities (1) Assets pledged as collateral (1) Assets pledged as collateral Yen in millions Yen in millions --------------- --------------- Notes receivable 42,874 Notes receivable 38,134 Installment credit Installment credit from dealers 94,699 from dealers 66,013 Buildings and Buildings and structures 68,954 structures 58,691 Machinery and Machinery and equipment 18,167 equipment 12,190 Land 103,622 Land 98,248 Other 22,285 Other 27,445 - --------------------------------- ------------------------ --------------------------------------- Total 350,603 Total 300,723 (2) Secured liabilities (2) Secured liabilities Yen in millions Yen in millions ----------------- ---------------- Short-term Short-term borrowings 147,280 borrowings 143,266 Long-term debt 76,378 Long-term debt 56,769 Bonds 94,699 Bonds 66,013 - --------------------------------- ---------------------------------------- Total 318,359 Total 266,048 3. Liabilities for guarantees 3. Liabilities for guarantees Yen in millions Yen in millions ----------------- ---------------- Debt guarantees Debt guarantees relate to the related to the operation of operation of consolidated consolidated finance finance subsidiaries 795,818 subsidiaries 841,871 Other liabilities Other liabilities for Guarantees 27,532 for guarantees 35,619 Other acts Other acts similar to similar to guarantees 16 guarantees 13 - -------------------------------- ------------------------------------------ Total 823,367 Total 877,504
-22-
- -------------------------------------------------------------------------------------------------------------------- FY2003 semi-annual FY2004 semi-annual FY2003 September 30, 2002 September 30, 2003 March 31, 2003 - -------------------------------------------------------------------------------------------------------------------- 4. Notes receivable 4. Notes receivable Yen in millions Yen in millions ----------------- ---------------- Discounted 12,014 Discounted 17,343 Endorsed 55 Endorsed 11 5. Unexecuted loans under overdraft 5. Unexecuted loans under overdraft contracts and loan commitments contracts and loan commitments Unexecuted loans provided by Unexecuted loans provided by consolidated finance consolidated finance subsidiaries under overdraft ------------------------ subsidiaries under overdraft contracts and loan commitments contracts and loan commitment 1,003,915 million yen 1,306,483 million yen The above loans are not The above loans are not necessarily fully executed, as necessarily fully executed, as some of the overdraft contracts some of the overdraft contracts and loan commitments referred and loan commitments referred above are contingent upon a above are contingent upon a satisfactory review of the satisfactory review of the creditworthiness of the customer. creditworthiness of the customer.
(Semi-annual consolidated statements of cash flows)
- -------------------------------------------------------------------------------------------------------------------- FY2003 semi-annual FY2004 semi-annual FY2003 April 1, 2002 through April 1, 2003 through April 1, 2002 through September 30, 2002 September 30, 2003 March 31, 2003 - -------------------------------------------------------------------------------------------------------------------- 1. Reconciliation between cash and 1. Reconciliation between cash and cash equivalents presented in the cash equivalents presented in the semi-annual consolidated balance semi-annual consolidated balance sheets sheets (September 30, 2002) (March 31, 2003) Yen in millions Yen in millions ----------------- ------------------------ ---------------- Cash and deposits 1,042,984 Cash and deposits 620,870 Marketable securities 1,447,001 Marketable securities 1,661,978 - ---------------------------------- ------------------------------------------- Total 2,489,986 Total 2,282,848 Time deposits and Time deposits and securities with securities with maturities over 3 (596,599) maturities over 3 months months (659,606) - --------------------------------- ------------------------------------------- Cash and cash Cash and cash equivalents 1,893,387 equivalents 1,623,241 - --------------------------------------------------------------------------------------------------------------------
-23-
(Lease) - ------------------------------------------------------------------------------------------------------------------------------------ FY2003 semi-annual FY2004 semi-annual FY2003 April 1, 2002 through April 1, 2003 through April 1, 2002 through September 30, 2002 September 30, 2003 March 31, 2003 - ------------------------------------------------------------------------------------------------------------------------------------ 1. Finance lease transactions not 1. Finance lease transactions not involving a transfer of ownership of involving a transfer of ownership of leased property to the lessee leased property to the lessee (1) As lessee (1) As lessee (a) Amounts equivalent to acquisition (a) Amounts equivalent to acquisition cost, accumulated depreciation cost, accumulated depreciation and book value of leased property and book value of leased property - ------------------------------------------- ---------------------------------------------- Accumu- Accumu- Acquisi- lated Book Acquisi- lated Book tion cost deprecia- value tion cost deprecia- value (Yen in tion (Yen in (Yen in tion (Yen in millions) (Yen in millions) millions) (Yen in millions) millions) millions) - ------------------------------------------- ---------------------------------------------- Machinery Machinery and 30,389 8,053 22,335 and 31,726 8,468 23,257 equipment equipment - ------------------------------------------- ---------------------------------------------- Vehicles Vehicles and 2,797 1,343 1,454 and 7,232 2,637 4,595 delivery delivery equipment equipment - ------------------------------------------- ---------------------------------------------- Other 34,032 15,368 18,664 Other 39,141 18,287 20,854 - ------------------------------------------- ---------------------------------------------- Total 67,219 24,765 42,454 Total 78,100 29,392 48,707 - ------------------------------------------- ---------------------------------------------- (b) The amounts equivalent to the (b) The amounts equivalent to the outstanding future lease payments ------------- outstanding future lease payments Yen in millions Yen in millions --------------- --------------- Due within one year 7,351 Due within one year 8,366 Due after one year 42,207 Due after one year 49,405 - ------------------------------------------- ------------------------------------------- Total 49,558 Total 57,772 - ------------------------------------------- ------------------------------------------- (c) Lease payments, the amounts (c) Lease payments, the amounts equivalent to depreciation and equivalent to depreciation and interest expenses interest expenses Yen in millions Yen in millions --------------- --------------- Lease payments 6,113 Lease payments 10,887 Depreciation expenses 5,463 Depreciation expenses 9,830 Interest expenses 1,098 Interest expenses 2,987 (d) Calculation method of the amount (d) Calculation method of the amount equivalent to depreciation equivalent to depreciation expenses expenses The amount equivalent to The amount equivalent to depreciation expenses is depreciation expenses is calculated based on the calculated based on the straight-line method with no straight-line method with no residual value over the lease residual value over the lease term term - ------------------------------------------------------------------------------------------------------------------------------------
-24-
- ------------------------------------------------------------------------------------------------------------------------------------ FY2003 semi-annual FY2004 semi-annual FY2003 April 1, 2002 through April 1, 2003 through April 1, 2002 through September 30, 2002 September 30, 2003 March 31, 2003 - ------------------------------------------------------------------------------------------------------------------------------------ (e) Calculation method of the amount (e) Calculation method of the amount equivalent to interest expenses equivalent to interest expenses The amount equivalent to The amount equivalent to interest expenses is calculated interest expenses is calculated as the difference between the -------- as the difference between the total lease payment and the total lease payment and the amount equivalent to amount equivalent to acquisition cost of the leased acquisition cost of the leased property. The allocation of property. The allocation of the amount equivalent to the amount equivalent to interset expenses to each interest expenses to each period is based on the interest period is based on the interest method. method.
-25-
- ------------------------------------------------------------------------------------------------------------------------------------ FY2003 semi-annual FY2004 semi-annual FY2003 selected data April 1, 2002 through April 1, 2003 through April 1, 2002 through September 30, 2002 September 30, 2003 March 31, 2003 - ------------------------------------------------------------------------------------------------------------------------------------ (2) As lessor (2) As lessor (a) Acquisition cost, accumulated (a) Acquisition cost, accumulated depreciation and book value of depreciation and book value of leased property included in leased property included in property, plant and equipment property, plant and equipment - ------------------------------------------- ------------------------------------------- Accumu- Accumu- Acquisi- lated Book Acquisi- lated Book tion cost deprecia- value tion cost deprecia- value (Yen in tion (Yen in (Yen in tion (Yen in millions) (Yen in millions millions) (Yen in millions millions) millions) - ------------------------------------------- ------------------------------------------- Machinery Machinery and 17,817 6,590 11,226 and 20,530 7,212 13,317 equipment equipment - ------------------------------------------- ------------------------------------------- Vehicles Vehicles and 58,024 29,157 28,866 and 53,045 29,160 23,884 delivery delivery equipment equipment - ------------------------------------------- ------------------------------------------- Other 42,181 19,155 23,026 Other 44,100 20,077 24,022 - ------------------------------------------- ------------------------------------------- Total 118,023 54,903 63,119 Total 117,676 56,451 61,224 - ------------------------------------------- ------------------------------------------- (b) The amount equivalent to the (b) The amount equivalent to the outstanding future lease income outstanding future lease income Yen in millions Yen in millions --------------- --------------- Due within one year 21,902 Due within one year 24,119 Due after one year 44,149 Due after one year 43,571 - ------------------------------------------- ------------------------ ------------------------------------------- Total 66,051 Total 67,691 (c) Lease income, depreciation (c) Lease income, depreciation expenses and the amount expenses and the amount equivalent to interest income equivalent to interest income Yen in millions Yen in millions --------------- --------------- Lease income 14,296 Lease income 28,384 Depreciation expenses 9,599 Depreciation expenses 19,851 Interest income 1,215 Interest income 2,806 (d) Calculation method of the (d) Calculation method of the amount equivalent to interest amount equivalent to interest income income The amount equivalent to The amount equivalent to interest income is calculated as interest income is calculated as the difference between the total the difference between the total lease income and estimated lease income and estimated residual value, and the residual value, and the acquisition cost of the leased acquisition cost of the leased property. The allocation of the property. The allocation of the amount equivalent to interest amount equivalent to interest income to each period is based income to each period is based on the interest method. on the interest method.
-26-
- ------------------------------------------------------------------------------------------------------------------------------------ FY2003 semi-annual FY2004 semi-annual FY2003 selected data April 1, 2002 through April 1, 2003 through April 1, 2002 through September 30, 2002 September 30, 2003 March 31, 2003 - ------------------------------------------------------------------------------------------------------------------------------------ 2. Operating lease transactions 3. Operating lease transactions (1) As lessee (1) As lessee Outstanding future lease payments Outstanding future lease payments Yen in millions Yen in millions --------------- --------------- Due within one year 10,113 Due within one year 9,740 Due after one year 30,675 Due after one year 30,721 - ------------------------------------------- ------------------------------------------- Total 40,788 Total 40,461 --------- (2) As lessor (2) As lessor Outstanding future lease income Outstanding future lease income Yen in millions Yen in millions --------------- --------------- Due within one year 275,755 Due within one year 281,033 Due after one year 344,899 Due after one year 352,155 - ------------------------------------------- ------------------------------------------- Total 620,655 Total 633,189
-27- (Securities) (FY 2003 semi-annual) (As of September 30, 2002) Securities 1. Bonds with fair value that are classified as be held-to-maturity securities
- ------------------------------------------------------------------------------------------------------------------------------------ Carrying amount on semi-annual Category consolidated balance sheet Fair value Difference (Yen in millions) (Yen in millions) (Yen in millions) - ------------------------------------------------------------------------------------------------------------------------------------ (1) Government bonds, municipal bonds, etc. - - - (2) Corporate bonds - - - (3) Other - - - - ------------------------------------------------------------------------------------------------------------------------------------ Total - - - - ------------------------------------------------------------------------------------------------------------------------------------
2. Other securities with fair values
- ------------------------------------------------------------------------------------------------------------------------------------ Carrying amount on Acquisition cost semi-annual Difference Category (Yen in millions) consolidated (Yen in millions) balance sheet (Yen in millions) - ------------------------------------------------------------------------------------------------------------------------------------ (1) Equity securities 413,640 628,744 215,104 (2) Bonds Government bonds, municipal bonds, etc. 406,979 417,605 10,626 Corporate bonds 912,449 925,076 12,627 Other - - - (3) Other 392,166 391,691 (475) - ------------------------------------------------------------------------------------------------------------------------------------ Total 2,125,235 2,363,117 237,882 - ------------------------------------------------------------------------------------------------------------------------------------
3. The main categories of securities not practicable to determining fair value and their carrying amounts on the semi-annual consolidated balance sheets:
(Yen in millions) (1) Bonds classified as be held-to-maturity securities Government bonds, municipal bonds, etc. - Corporate bonds - Other - (2) Other securities Unlisted equity securities (excluding over-the-counter 44,922 stocks) Unlisted bonds Government bonds, municipal bonds, etc. - Corporate bonds 8,432 Other unlisted securities 574,102
-28- (FY2003) (As of March 31, 2003) Securities 1. Bonds with fair value that are classified as be held-to-maturity securities
- ------------------------------------------------------------------------------------------------------------------------------------ Carrying amount on consolidated Category balance sheet Fair value Difference (Yen in millions) (Yen in millions) (Yen in millions) - ------------------------------------------------------------------------------------------------------------------------------------ (1) Government bonds, municipal bonds, etc. - - - (2) Corporate bonds - - - (3) Other - - - - ------------------------------------------------------------------------------------------------------------------------------------ Total - - - - ------------------------------------------------------------------------------------------------------------------------------------
2. Other securities with fair values
- ------------------------------------------------------------------------------------------------------------------------------------ Carrying amount Acquisition cost on Difference Category (Yen in millions) consolidated (Yen in millions) balance sheet (Yen in millions) - ------------------------------------------------------------------------------------------------------------------------------------ (1) Equity securities 367,184 487,322 120,138 (2) Bonds Government bonds, municipal bonds, etc. 1,508,258 1,519,977 11,719 Corporate bonds 685,473 697,088 11,615 Other - - - (3) Other 262,898 263,146 248 - ------------------------------------------------------------------------------------------------------------------------------------ Total 2,823,815 2,967,534 143,719
3. The main categories of securities not practicable to determining fair value and their carrying amounts on the consolidated balance sheets:
(Yen in millions) (1) Bonds classified as be held-to-maturity securities Government bonds, municipal bonds, etc. - Corporate bonds - Other - (2) Other securities Unlisted equity securities (excluding over-the-counter 55,676 stocks) Unlisted bonds Government bonds, municipal bonds, etc. - Corporate bonds 5,787 Other unlisted securities 237,802
-29- (Derivative transaction) The contract amount, fair value and unrealized gains (losses) of derivative transactions
FY2003 semi-annual FY2003 (September 30, 2002) (March 31, 2003) Type of Type of Contract Fair value Unrealized gains/ Contract amount Fair value Unrealized underling transaction amount (Yen in losses (Yen in (Yen in gains/losses (Yen in millions) (Yen in millions) millions) millions) (Yen in millions) millions) Currency Foreign exchange forward contracts Selling Japanese yen 1,000 (1) (1) - - - British pound - - - - - - Other 10,124 (51) (51) 19,928 (280) (280) Buying U.S. dollar 14,860 (81) (81) 12,033 (47) (47) Other 1,594 16 16 2,180 10 10 Swap transactions Receive U.S. dollar and pay 118,482 (4,877) (4,877) 2,999 10 10 Japanese yen Receive U.S. dollar and pay 4,308 741 741 4,646 324 324 Euro Receive Euro and 111,450 (3,817) (3,817) - - - pay U.S. dollars Other 87,957 (766) (766) 137,811 3,197 3,197 Interest Swap transactions rate Receive fixed, 652,802 12,846 12,846 673,027 9,332 9,332 pay floating Receive floating, 1,544,884 (43,287) (43,287) 1,729,098 (40,578) (40,578) pay fixed Receive floating, 354,068 762 762 342,930 150 150 pay floating Options Cap purchased 956,280 4,648 4,648 1,093,820 4,022 4,022 Total - - (33,866) - - (23,858)
(Notes) 1. Derivative transactions to which the hedge accounting is applied are not included in the above. 2. Derivative transactions allocated to receivables or payables denominated in foreign currencies in accordance with the "Accounting Standard for Foreign Currency Transaction, etc." are not included in the above. -30-
( Segment information) - ----------------------------------------------------------------------------------------------------------------------------------- [Segment operating results and assets] FY 2003 semi-annual (April 1, 2002 through September 30, 2002) Intersegment Elimination/ Consolidated Financial Unallocated Total Automotive Services All Other Total Amount (Yen (Yen in (Yen in (Yen in (Yen in (Yen in in millions) millions) millions) millions) millions) millions) - ----------------------------------------------------------------------------------------------------------------------------------- Net revenues (1) Sales to external customers 7,279,136 341,737 265,807 7,886,681 - 7,886,681 (2) Intersegment sales and transfers 3,173 8,444 131,226 142,844 ( 142,844) - - ----------------------------------------------------------------------------------------------------------------------------------- Total 7,282,310 350,182 397,034 8,029,526 ( 142,844) 7,886,681 Operating expenses 6,548,048 347,568 394,463 7,290,080 ( 134,226) 7,155,853 - ----------------------------------------------------------------------------------------------------------------------------------- Operating income 734,261 2,614 2,570 739,446 ( 8,618) 730,827 - ----------------------------------------------------------------------------------------------------------------------------------- (Notes) 1. Reporting segments Reporting segments are defined based on the type of products and services provided 2. Main products and services of each reporting segment Automotive -- Passenger cars, trucks, buses, etc. Financial services -- Financing operations, etc. All other -- Housing, information technologies, etc. 3. The following table is a breakdown by segment of the assets, depreciation expenses and capital expenditure belonging to each segment. Unallocated corporate assets included in "Intersegment Elimination/Unallocated Amount" is (Y)3,354,735 million, and consists primarily of funds such as cash and deposits, marketable securities and portion of investments in securities of TMC. - ----------------------------------------------------------------------------------------------------------------------------------- Intersegment Elimination/ Consolidated Financial Unallocated Total Automotive Services All Other Total Amount (Yen (Yen in (Yen in (Yen in (Yen in (Yen in in millions) millions) millions) millions) millions) millions) - ----------------------------------------------------------------------------------------------------------------------------------- Segment assets 9,073,001 7,198,614 809,616 17,081,232 2,875,704 19,956,937 Depreciation 353,238 53,364 9,441 416,044 - 416,044 Capital expenditures for 495,270 224,332 17,730 737,333 - 737,333 segment assets - -----------------------------------------------------------------------------------------------------------------------------------
-31- (Note) 4. Semi-annual consolidated financial statements on non-financial services business and financial services business (a) Semi-annual consolidated balance sheets as on non-financial services business and financial services business
- -------------------------------------------------------------------------------------------------------------------- FY 2003 semi-annual September 30, 2002 - -------------------------------------------------------------------------------------------------------------------- Item Yen in millions Percentage - -------------------------------------------------------------------------------------------------------------------- (Assets) (Non-Financial Services Business) 1 Current assets 1 Cash and deposits 947,523 2 Trade notes and accounts receivable 1,337,361 3 Marketable securities 1,440,996 4 Inventories 986,311 5 Other 1,200,850 ---------- Total current assets 5,913,043 29.6 2 Fixed assets (1) Property, plant and equipment 4,354,678 21.8 (2) Investments and other assets 1 Investments in securities 2,381,021 2 Long-term loans 374,268 3 Other 481,959 ------------ Total investments and other assets 3,237,249 16.2 ------------ Total fixed assets 7,591,927 38.0 ------------ Total assets 13,504,971 67.6 (Financial Services Business) 1 Current assets 1 Cash and deposits 95,460 2 Marketable securities 6,814 3 Installment credits from dealers 3,362,829 4 Other 1,762,115 ----------- Total current assets 5,227,220 26.2 2 Fixed assets (1) Property, plant and equipment 1,052,571 5.3 (2) Intangible fixed assets 4,116 0.0 (3) Investments and other assets 1 Investment in securities 218,457 2 Long-term loans 570,747 3 Other 125,500 ------------ Total investments and other assets 914,705 4.6 ------------ Total fixed assets 1,971,393 9.9 ------------ Total assets 7,198,614 36.1 (Elimination) Elimination of assets (746,648) (3.7) (Consolidated) ------------ Total assets 19,956,937 100.0 ------------ - ------------------------------------------------------------------------------------------------------------------
-32-
- -------------------------------------------------------------------------------------------------------------------- FY 2003 semi-annual September 30, 2002 - -------------------------------------------------------------------------------------------------------------------- Item Yen in millions Percentage - -------------------------------------------------------------------------------------------------------------------- (Liabilities) (Non-Financial Services Business) 1 Current liabilities 1 Trade notes and accounts payable 1,413,256 2 Current portion of bonds 69,899 3 Short-term borrowings 866,630 4 Accrued expenses and other accounts payable 1,294,760 5 Income taxes payable 306,821 6 Other 462,871 ----------- Total current liabilities 4,414,239 22.1 2 Long-term liabilities 1 Bonds and convertible bonds 500,400 2 Long-term debt 236,640 3 Other 811,818 ----------- Total long-term liabilities 1,548,859 7.8 ----------- Total liabilities 5,963,099 29.9 (Financial Services Business) 1 Current liabilities 1 Current portion of bonds 939,619 2 Short-term borrowings 664,435 3 Commercial paper 1,077,307 4 Accrued expenses and other accounts payable 139,106 5 Income taxes payable 2,530 6 Other 450,598 ----------- Total current liabilities 3,273,597 16.4 2 Long-term liabilities 1 Bonds 2,730,627 2 Long-term debt 456,094 3 Other 297,498 ----------- Total long-term liabilities 3,484,220 17.4 ----------- Total liabilities 6,757,817 33.8 (Elimination) (747,130) (3.7) Elimination of liabilities ----------- (Consolidated) 11,973,785 60.0 Total liabilities ----------- (Minority interest in consolidated subsidiaries) (Consolidated) 472,094 2.4 Minority interest in consolidated subsidiaries ----------- (Shareholders' equity) (Consolidated) 1 Common stock 397,049 2.0 2 Capital surplus 415,769 2.1 3 Retained earnings 6,884,863 34.5 4 Unrealized gains on other securities, net 151,609 0.7 5 Translation adjustments (83,968) (0.4) 6 Treasury stock (254,265) (1.3) ----------- Total shareholder's equity 7,511,057 37.6 ----------- (Consolidated) 19,956,937 100.0 Total liabilities, minority interest in consolidated subsidiaries and shareholders' equity ----------- - -----------------------------------------------------------------------------------------------------------------------------------
(Notes) 1. Segment assets in the non-financial services business include unallocated corporate assets. 2. "Trade notes and accounts receivable", "Inventories" and "Trade notes and accounts payable" in the financial services business were previously presented as separate line items. As these amounts are not material, starting -33- from this semi-annual period "Trade notes and accounts receivable" and "Inventories" are included in "Other" in current assets, and "Trade notes and accounts payable" is included in "Other" in current liabilities. On the other hand, "Commercial paper" in the financial services business was previously included in "Other" in current liabilities. As this item has increased in materiality, it is presented as a separate line item starting from this semi-annual period. -34- (b) Semi-annual consolidated statements of income on non-financial services business and financial services business
- -------------------------------------------------------------------------------------------------------------------- FY 2003 semi-annual April 1, 2002 through September 30, 2002 - -------------------------------------------------------------------------------------------------------------------- Item Yen in millions Percentage - -------------------------------------------------------------------------------------------------------------------- (Non-Financial Services Business) 1 Net revenues 7,543,567 100.0 2 Cost of revenues 5,697,351 75.5 --------- Gross profit 1,846,216 24.5 3 Selling, general and administrative expenses 1,107,360 14.7 --------- Operating income 738,855 9.8 4 Non-operating income 153,290 2.0 5 Non-operating expenses 95,605 1.2 --------- Ordinary income 796,540 10.6 6 Extraordinary gains Gains on return of substituted portion of employee 186,050 186,050 2.4 pension fund -------------------------------- Income before income taxes and minority interest 982,591 13.0 in consolidated subsidiaries Income taxes 395,175 5.2 Minority interest in consolidated subsidiaries 32,519 0.4 ----------------- Net income 554,895 7.4 (Financial Services Business) 1 Net revenues 350,182 100.0 2 Cost of revenues 232,141 66.3 ----------------- Gross profit 118,040 33.7 3 Selling, general and administrative expenses 115,426 33.0 ----------------- Operating income 2,614 0.7 4 Non-operating income 5,522 1.6 5 Non-operating expenses 4,543 1.3 ----------------- Ordinary income 3,592 1.0 ----------------- Income before income taxes and minority interest 3,592 1.0 in consolidated subsidiaries Income taxes 594 0.1 Minority interest in consolidated subsidiaries 272 0.1 ----------------- Net income 2,725 0.8 (Elimination) Elimination of net income (3,823) - (Consolidated) ----------------- Net income 553,797 - ----------------- - ---------------------------------------------------------------------------------------------------------------------
-35- (c) Semi-annual consolidated statements of cash flows on non-financial services business and financial services business
- ---------------------------------------------------------------------------------------------------------------------------------- Y2003 semi-annual April 1, 2002 through September 30, 2002 - ----------------------------------------------------------------------------------------------------------------------------------- Item Yen in millions - ----------------------------------------------------------------------------------------------------------------------------------- (Non-Financial Services Business) 1 Cash flows from operating activities 1 Income before income taxes and minority interest in consolidated subsidiaries 982,591 2 Depreciation 362,679 3 Losses on disposal of fixed assets 25,680 4 Decrease in allowance for retirement benefits (182,293) 5 Interests and dividend income (30,473) 6 Interest expenses 21,710 7 Equity in earnings of affiliates (46,873) 8 Decrease in trade notes and accounts receivable 247,847 9 Decrease in inventories 7,805 10 Decrease in trade notes and accounts payable (46,458) 11 Other 95,493 ------------------- Sub total 1,437,710 12 Interest and dividends received 38,029 13 Interest paid (21,398) 14 Income taxes paid (376,974) - ---------------------------------------------------------------------------------------------------------------- Cash flows from operating activities 1,077,366 - ---------------------------------------------------------------------------------------------------------------- 2 Cash flows from investing activities 1 Net decrease in time deposits 663 2 Purchases of marketable securities and investments in securities (388,605) 3 Proceeds from sales of marketable securities and investments in securities 77,796 4 Proceeds on maturity of marketable securities and investments in securities 386,119 5 Additions to property, plant and equipment (excluding vehicles for lease) (509,178) 6 Additions to vehicles for lease (57,793) 7 Proceeds from sales of property, plant and equipment (excluding vehicles for lease) 25,434 8 Proceeds from sales of vehicles for lease 19,839 9 Other (20,566) - ---------------------------------------------------------------------------------------------------------------- Cash flows from investing activities (466,291) - ---------------------------------------------------------------------------------------------------------------- 3 Cash flows from financing activities 1 Net decrease in short-term borrowings (61,792) 2 Proceeds from origination of long-term debt 8,675 3 Payments for long-term debt (33,992) 4 Purchase of treasury stock (169,213) 5 Dividends paid (53,342) 6 Other 7,973 - ---------------------------------------------------------------------------------------------------------------- Cash flows from financing activities (301,690) - ---------------------------------------------------------------------------------------------------------------- 4 Effect of exchange rate changes on cash and cash equivalents (32,659) - ---------------------------------------------------------------------------------------------------------------- 5 Net increase in cash and cash equivalents 276,725 - ---------------------------------------------------------------------------------------------------------------- 6 Cash and cash equivalents at beginning of period 1,541,940 - ---------------------------------------------------------------------------------------------------------------- 7 Cash and cash equivalents at end of period 1,818,666 - ----------------------------------------------------------------------------------------------------------------
-36-
- ---------------------------------------------------------------------------------------------------------------------------------- Y2003 semi-annual April 1, 2002 through September 30, 2002 - ----------------------------------------------------------------------------------------------------------------------------------- Item Yen in millions - ----------------------------------------------------------------------------------------------------------------------------------- (Financial Services Business) 1 Cash flows from operating activities 1 Income before income taxes and minority interest in consolidated subsidiaries 3,592 2 Depreciation 53,364 3 Equity in earnings of affiliates (4,754) 4 Increase in trade notes and accounts receivable (400,729) 5 Increase in loans receivable of consolidated financial subsidiaries (98,704) 6 Other (94,232) --------------------------------------- Sub total (541,463) 7 Interests and dividends received 1,766 8 Income taxes paid (5,666) - ------------------------------------------------------------------------------------------------------------------------------------ Cash flows from operating activities (545,364) - ------------------------------------------------------------------------------------------------------------------------------------ 2 Cash flows from investing activities 1 Net increase in time deposits (11,911) 2 Purchases of marketable securities and investments in securities (95,707) 3 Proceeds from sales of marketable securities and investments in securities 29,836 4 Proceeds on maturity of marketable securities and investments in securities 76,127 5 Additions to property, plant and equipment (excluding vehicles for lease) (24,594) 6 Additions to vehicles for lease (199,084) 7 Proceeds from sales of property, plant and equipment (excluding vehicles for lease) 6,171 8 Proceeds from sales of vehicles for lease 106,758 9 Other 17,900 - ------------------------------------------------------------------------------------------------------------------------------------ Cash flows from investing activities (94,502) - ------------------------------------------------------------------------------------------------------------------------------------ 3 Cash flows from financing activities 1 Net increase in short-term borrowings 29,242 2 Net increase in commercial paper 210,671 3 Proceeds from origination of long-term debt 47,942 4 Payments for long-term debt (38,451) 5 Proceeds from issuance of bonds 691,727 6 Payments for redemption of bonds (364,453) - ------------------------------------------------------------------------------------------------------------------------------------ Cash flows from financing activities 576,679 - ------------------------------------------------------------------------------------------------------------------------------------ 4 Effect of exchange rate changes on cash and cash equivalents (8,277) - ------------------------------------------------------------------------------------------------------------------------------------ 5 Net decrease in cash and cash equivalents (71,464) - ------------------------------------------------------------------------------------------------------------------------------------ 6 Cash and cash equivalents at beginning of period 146,185 - ------------------------------------------------------------------------------------------------------------------------------------ 7 Cash and cash equivalents at end of period 74,721 --------------------------------------- - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ (Consolidated) 1 Effect of exchange rate changes on cash and cash equivalents (40,937) - ------------------------------------------------------------------------------------------------------------------------------------ 2 Net increase in cash and cash equivalents 205,261 - ------------------------------------------------------------------------------------------------------------------------------------ 3 Cash and cash equivalents at beginning of period 1,688,126 - ------------------------------------------------------------------------------------------------------------------------------------ 4 Cash and cash equivalents at end of period 1,893,387 --------------------------------------- - ------------------------------------------------------------------------------------------------------------------------------------
-37-
- ----------------------------------------------------------------------------------------------------------------------------------- FY2003 (April 1, 2002 through March 31, 2003) - ----------------------------------------------------------------------------------------------------------------------------------- Intersegment Financial All Other Total Elimination/ Consolidated Automotive Services (Yen in (Yen in Unallociated Total (Yen in (Yen in millions) millions) Amount (Yen in millions millions) (Yen in millions) millions) - ----------------------------------------------------------------------------------------------------------------------------------- Net revenues (1) Sales to external customers 14,788,940 700,961 564,387 16,054,290 - 16,054,290 (2) Intersegment sales and 12,337 19,045 307,564 338,947 ( 338,947) - transfer - ----------------------------------------------------------------------------------------------------------------------------------- Total 14,801,278 720,007 871,952 16,393,238 ( 338,947) 16,054,290 Operating Expenses 13,468,917 691,486 857,569 15,017,973 ( 327,363) 14,690,610 - ----------------------------------------------------------------------------------------------------------------------------------- Operating Income 1,332,360 28,520 14,383 1,375,264 ( 11,584) 1,363,679 - ----------------------------------------------------------------------------------------------------------------------------------- (Notes) 1. Reporting segments Reporting segments are defined based on the type of products and services provided 2. Main products and services of each segment Automotive -- Passenger cars, trucks, buses, etc. Financial services -- Financing operations, etc. All other -- Housing, information technologies, etc. 3. The following table is a breakdown by segment of the assets, depreciation expenses and capital expenditure belonging to each segment. Unallocated corporate assets included in "Intersegment Elimination/Unallocated Amount" is 3,136,008 million yen, and consists primarily of funds such as cash and deposits, marketable securities and portion of investments in securities of TMC. - ----------------------------------------------------------------------------------------------------------------------------------- Intersegment Financial All Other Total Elimination/ Consolidated Automotive Services (Yen in (Yen in Unallociated Total (Yen in (Yen in millions) millions) Amount (Yen in millions millions) (Yen in millions) millions) - ----------------------------------------------------------------------------------------------------------------------------------- Segment assets 9,617,993 7,657,144 857,739 18,132,877 2,609,508 20,742,386 Depreciation 722,742 109,151 19,740 851,634 - 851,634 Capital expenditures for 1,013,586 470,863 52,708 1,537,157 - 1,537,157 segment assets - ------------------------------------------------------------------------------------------------------------------------------------ - -----------------------------------------------------------------------------------------------------------------------------------
-38- (Note) 4. Consolidated financial statements on non-financial services business and financial services business (a) Consolidated balance sheets on non-financial services business and financial services business
- ----------------------------------------------------------------------------------------------------------------------------- FY2003 March 31, 2003 - ----------------------------------------------------------------------------------------------------------------------------- Item Yen in millions Percentage - ----------------------------------------------------------------------------------------------------------------------------- (Assets) (Non-Financial Services Business) 1 Current assets 1 Cash and deposits 443,913 2 Trade notes and accounts receivable 1,599,344 3 Marketable securities 1,655,596 4 Inventories 1,072,947 5 Other 1,293,207 --------------------------- Total current assets 6,065,008 29.2 2 Fixed assets (1) Property, plant and equipment 4,447,518 21.5 (2) Investments and other assets 1 Investments in securities 2,422,902 2 Long-term loans 327,945 3 Other 590,028 --------------------------- Total investments and other assets 3,340,877 16.1 --------------------------- Total fixed assets 7,788,396 37.6 --------------------------- Total assets 13,853,404 66.8 (Financial Services Business) 1 Current assets 1 Cash and deposits 176,957 2 Marketable securities 6,381 3 Installment credits from dealers 3,320,405 4 Other 2,038,920 --------------------------- Total current assets 5,542,664 26.7 2 Fixed assets (1) Property, plant and equipment 1,059,466 5.1 (2) Intangible fixed assets 5,123 0.0 (3) Investments and other assets 1 Investments in securities 273,036 2 Long-term loans 610,249 3 Other 166,603 --------------------------- Total investments and other assets 1,049,889 5.1 --------------------------- Total fixed assets 2,114,479 10.2 --------------------------- Total assets 7,657,144 36.9 (Elimination) Elimination of assets (768,162) (3.7) (Consolidated) --------------------------- Total assets 20,742,386 100.0 --------------------------- - -----------------------------------------------------------------------------------------------------------------------------
-39-
- ----------------------------------------------------------------------------------------------------------------------------- FY2003 March 31, 2003 - ----------------------------------------------------------------------------------------------------------------------------- Item Yen in millions Percentage - ----------------------------------------------------------------------------------------------------------------------------- (Liabilities) (Non-Financial Services Business) 1 Current liabilities 1 Trade notes and accounts payable 1,570,853 2 Current portion of bonds 63,308 3 Short-term borrowings 843,193 4 Accrued expenses and other accounts payable 1,235,818 5 Income taxes payable 310,232 6 Other 713,471 --------------------------- Total current liabilities 4,736,878 22.8 2 Long-term liabilities 1 Bonds and convertible bonds 500,400 2 Long-term debt 247,730 3 Other 842,864 --------------------------- Total long-term liabilities 1,590,995 7.7 --------------------------- Total liabilities 6,327,874 30.5 (Financial Services Business) 1 Current liabilities 1 Current portion of bonds 1,060,727 2 Short-term borrowings 667,814 3 Commercial papers 1,031,271 4 Accrued expenses and other accounts payable 154,595 5 Income taxes payable 6,962 6 Other 483,151 --------------------------- Total current liabilities 3,404,522 16.4 2 Long-term liabilities 1 Bonds 3,019,944 2 Long-term debt 510,829 3 Other 291,392 --------------------------- Total long-term liabilities 3,822,166 18.4 --------------------------- Total liabilities 7,226,689 34.8 (Elimination) (768,651) (3.7) Elimination of liabilities --------------------------- (Consolidated) 12,785,911 61.6 Total liabilities (Minority interest in consolidated subsidiaries) (Consolidated) 496,207 2.4 Minority interest in consolidated subsidiaries (Shareholders' equity) (Consolidated) 1 Common stock 397,049 1.9 2 Capital surplus 418,401 2.0 3 Retained earnings 7,219,896 34.8 4 Unrealized gains on other securities, net 78,630 0.4 5 Translation adjustments (112,350) (0.5) 6 Treasury stock (541,360) (2.6) --------------------------- Total Shareholder's equity 7,460,267 36.0 --------------------------- (Consolidated) Total liabilities, minority interest in consolidated subsidiaries and shareholders' 20,742,386 100.0 equity --------------------------- - -----------------------------------------------------------------------------------------------------------------------------
Note 1 Segment assets in the non-financial services business include unallocated corporate assets. 2 "Commercial papers" in the financial services business was previously included in "Other" in current liabilities. Due to the fact that this amount became material as of March 31, 2003, it has been presented as a separate line item. -40- (b) Consolidated statements of income on non-financial services business and financial services business
- ----------------------------------------------------------------------------------------------------------------------------- FY2003 April 1, 2002 through March 31, 2003 - ----------------------------------------------------------------------------------------------------------------------------- Item Yen in millions Percentage - ----------------------------------------------------------------------------------------------------------------------------- (Non-Financial Services Business) 1 Net revenues 15,362,780 100.0 2 Cost of revenues 11,730,912 76.4 --------------------------- Gross profit 3,631,868 23.6 3 Selling, general and administrative expenses 2,279,566 14.8 --------------------------- Operating income 1,352,301 8.8 4 Non-operating income 287,566 1.9 5 Non-operating expenses 256,878 1.7 --------------------------- Ordinary income 1,382,989 9.0 --------------------------- 6 Extraordinary gains Gains on return of substitutional 235,314 235,314 1.5 portion of employees' pension fund ------------------------------------------ Income before income taxes and minority interest 1,618,304 10.5 in consolidated subsidiaries Income taxes 637,385 4.2 Minority interest in consolidated 53,279 0.3 subsidiaries --------------------------- Net income 927,639 6.0 (Financial Services Business) 1 Net revenues 720,007 100.0 2 Cost of revenues 428,327 59.5 --------------------------- Gross profit 291,679 40.5 3 Selling, general and administrative expenses 263,158 36.5 --------------------------- Operating income 28,520 4.0 4 Non-operating income 12,773 1.8 5 Non-operating expenses 9,824 1.4 --------------------------- Ordinary income 31,468 4.4 --------------------------- Income before income taxes and minority interest 31,468 4.4 in consolidated subsidiaries Income taxes 13,790 1.9 Minority interest in consolidated 575 0.1 subsidiaries --------------------------- Net income 17,102 2.4 (Elimination) Elimination of net income (71) - (Consolidated) --------------------------- Net income 944,671 - --------------------------- - -----------------------------------------------------------------------------------------------------------------------------
-41- (c) Consolidated statements of cash flows on non-financial services business and financial services business
- ----------------------------------------------------------------------------------------------------------------------------- FY2003 April 1, 2002 through March 31, 2003 - ----------------------------------------------------------------------------------------------------------------------------- Item Yen in millions - ----------------------------------------------------------------------------------------------------------------------------- (Non-Financial Services Business) 1 Cash flows from operating activities 1 Income before income taxes and minority interest in 1,618,304 consolidated subsidiaries 2 Depreciation 742,482 3 Losses on disposal of fixed assets 53,576 4 Decrease in allowance for retirement benefits (113,836) 5 Interest and dividend income (55,078) 6 Interest expenses 48,748 7 Equity in earnings of affiliates (70,649) 8 Decrease in trade notes and accounts receivable 2,952 9 Increase in inventories (25,842) 10 Increase in trade notes and accounts payable 105,652 11 Other 150,494 -------------------------------------- Sub total 2,456,804 12 Interests and dividends received 69,798 13 Interests paid (49,285) 14 Income taxes paid (649,282) - ----------------------------------------------------------------------------------------------------------------------------- Cash flows from operating activities 1,828,034 - ----------------------------------------------------------------------------------------------------------------------------- 2 Cash flows from investing activities 1 Net increase in time deposits (19,935) 2 Purchases of marketable securities and investments in (860,913) securities 3 Proceeds from sales of marketable securities and investments 146,331 in securities 4 Proceeds on maturity of marketable securities and 591,922 investments in securities 5 Additions to property, plant and equipment (excluding vehicles for lease) (964,338) 6 Additions to vehicles for lease (121,227) 7 Proceeds from sales of property, plant and equipment (excluding 52,929 vehicles for lease) 8 Proceeds from sales of vehicles for lease 61,222 9 Other (53,639) - ----------------------------------------------------------------------------------------------------------------------------- Cash flows from investing activities (1,167,647) - ----------------------------------------------------------------------------------------------------------------------------- 3 Cash flows from financing activities 1 Net decrease in short-term borrowings (104,607) 2 Proceeds from origination of long-term debt 39,447 3 Payments for long-term debt (82,090) 4 Purchase of treasury stock (454,611) 5 Dividends paid (109,330) 6 Other 11,982 - ----------------------------------------------------------------------------------------------------------------------------- Cash flows from financing activities (699,209) - ----------------------------------------------------------------------------------------------------------------------------- 4 Effect of exchange rate changes on cash and cash equivalents (34,172) - ----------------------------------------------------------------------------------------------------------------------------- 5 Net decrease in cash and cash equivalents (72,995) - ----------------------------------------------------------------------------------------------------------------------------- 6 Cash and cash equivalents at beginning of year 1,541,940 - ----------------------------------------------------------------------------------------------------------------------------- 7 Cash and cash equivalents at end of year 1,468,944 ------------------------------------- - -----------------------------------------------------------------------------------------------------------------------------
-42-
- ----------------------------------------------------------------------------------------------------------------------------- FY2003 April 1, 2002 through March 31, 2003 - ----------------------------------------------------------------------------------------------------------------------------- Item Yen in millions - ----------------------------------------------------------------------------------------------------------------------------- (Financial Services Business) 1 Cash flows from operating activities 1 Income before income taxes and minority interest in 31,468 consolidated subsidiaries 2 Depreciation 109,151 3 Equity in earnings of affiliates (11,317) 4 Increase in trade notes and accounts receivable (367,213) 5 Increase in loans receivable of consolidated finance subsidiaries (407,186) 6 Other 153,296 ------------------------------------- Sub total (491,800) 7 Interests and dividends received 1,766 8 Income taxes paid (8,526) - ----------------------------------------------------------------------------------------------------------------------------- Cash flows from operating activities (498,560) - ----------------------------------------------------------------------------------------------------------------------------- 2 Cash flows from investing activities 1 Net increase in time deposits (12,259) 2 Purchases of marketable securities and investments in (250,670) securities 3 Proceeds from sales of marketable securities and investments 62,444 in securities 4 Proceeds on maturity of marketable securities and 132,059 investments in securities 5 Additions to property, plant and equipment (excluding vehicles for lease) (48,465) 6 Additions to vehicles for lease (419,718) 7 Proceeds from sales of property, plant and equipment (excluding 11,144 vehicles for lease) 8 Proceeds from sales of vehicles for lease 222,617 9 Other 35,365 - ----------------------------------------------------------------------------------------------------------------------------- Cash flows from investing activities (267,482) - ----------------------------------------------------------------------------------------------------------------------------- 3 Cash flows from financing activities 1 Net decrease in short-term borrowings (45,124) 2 Net increase in commercial papers 159,080 3 Proceeds from origination of long-term debt 166,768 4 Payments for long-term debt (82,508) 5 Proceeds from issuance of bonds 1,414,564 6 Payments for redemption of bonds (830,698) - ----------------------------------------------------------------------------------------------------------------------------- Cash flows from financing activities 782,080 - ----------------------------------------------------------------------------------------------------------------------------- 4 Effect of exchange rate changes on cash and cash equivalents (7,925) - ----------------------------------------------------------------------------------------------------------------------------- 5 Net increase in cash and cash equivalents 8,111 - ----------------------------------------------------------------------------------------------------------------------------- 6 Cash and cash equivalents at beginning of year 146,185 - ----------------------------------------------------------------------------------------------------------------------------- 7 Cash and cash equivalents at end of year 154,297 ------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------- (Consolidated) 1 Effect of exchange rate changes on cash and cash equivalents (42,098) - ----------------------------------------------------------------------------------------------------------------------------- 2 Net decrease in cash and cash equivalents (64,884) - ----------------------------------------------------------------------------------------------------------------------------- 3 Cash and cash equivalents at beginning of year 1,688,126 - ----------------------------------------------------------------------------------------------------------------------------- 4 Cash and cash equivalents at end of year 1,623,241 ------------------------------------- - -----------------------------------------------------------------------------------------------------------------------------
-43-
- -------------------------------------------------------------------------------------------------------------------------------- [Geographic information] FY2003 semi-annual (April 1, 2002 through September 30, 2003) - -------------------------------------------------------------------------------------------------------------------------------- Other Intersegment North Foreign Elimination/ Consolidated Japan America Europe Countries Total Unallociated Total (Yen in (Yen in (Yen in (Yen in (Yen in Amount (Yen in millions) millions) millions) millions) millions) (Yen in millions) millons) - -------------------------------------------------------------------------------------------------------------------------------- Net revenues (1) Sales to external 3,300,299 3,091,451 714,199 780,731 7,886,681 - 7,886,681 customers (2) Intersegment sales and 2,088,302 127,371 32,043 43,169 2,290,887 (2,290,887) - transfers - -------------------------------------------------------------------------------------------------------------------------------- Total 5,388,602 3,218,822 746,243 823,901 10,177,568 (2,290,887) 7,886,691 Operating Expenses 4,852,733 3,039,678 740,825 799,339 9,432,577 (2,276,723) 7,155,853 - -------------------------------------------------------------------------------------------------------------------------------- Operating Income 535,868 178,144 5,417 24,561 744,991 (14,163) 730,827 - -------------------------------------------------------------------------------------------------------------------------------- (Notes) 1. Reporting segments Reporting segments are defined based on geographic proximity. 2. Main countries and regions in each reporting segment North America -- United States of America, Canada Europe -- Belgium, Germany, United Kingdom Other foreign countries -- Thailand, Australia 3. The following table is a breakdown of the assets belonging to each reporting segment. Unallocated corporate assets included in "Intersegment Elimination/Unallocated Amount" is 3,354,735 yen million, and consists primarily of funds such as cash and deposits, marketable securities and portion of investments in securities of TMC. - -------------------------------------------------------------------------------------------------------------------------------- Other Intersegment North Foreign Elimination/ Consolidated Japan America Europe Countries Total Unallociated Total (Yen in (Yen in (Yen in (Yen in (Yen in Amount (Yen in millions) millions) millions) millions) millions) (Yen in millions) millons) - -------------------------------------------------------------------------------------------------------------------------------- Assets 8,928,115 6,457,512 1,301,488 967,875 17,654,992 2,301,945 19,956,937 - -------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------
-44-
- -------------------------------------------------------------------------------------------------------------------------------- FY2003 (April 1, 2002 through March 31, 2003) - -------------------------------------------------------------------------------------------------------------------------------- Other Intersegment North Foreign Elimination/ Consolidated Japan America Europe Countries Total Unallociated Total (Yen in (Yen in (Yen in (Yen in (Yen in Amount (Yen in millions) millions) millions) millions) millions) (Yen in millions) millons) - -------------------------------------------------------------------------------------------------------------------------------- Net revenues (1) Sales to external 6,990,384 5,973,581 1,505,895 1,584,428 16,054,290 - 16,054,290 customers (2) Intersegment sales and 4,274,841 289,118 85,137 111,381 4,760,478 (4,760,478) - transfers - -------------------------------------------------------------------------------------------------------------------------------- Total 11,265,225 6,262,699 1,591,033 1,695,810 20,814,679 (4,760,478) 16,054,290 Operating Expenses 10,232,412 5,972,908 1,587,128 1,643,300 19,435,749 (4,745,139) 14,690,610 - -------------------------------------------------------------------------------------------------------------------------------- Operating Income 1,032,813 289,791 3,904 52,509 1,379,019 ( 15,339) 1,363,679 - -------------------------------------------------------------------------------------------------------------------------------- (Notes) 1. Reporting segments Reporting segments are defined based on geographic proximity. 2. Main countries and regions in each reporting segment North America -- United States of America, Canada Europe -- Belgium, Germany, United Kingdom Other foreign countries -- Thailand, Australia 3. The following table is a breakdown of the assets belonging to each reporting segment. Unallocated corporate assets included in "Intersegment Elimination/Unallocated Amount" is 3,136,008 yen million, and consists primarily of funds such as cash and deposits, marketable securities and portion of investments in securities of TMC. - -------------------------------------------------------------------------------------------------------------------------------- Other Intersegment North Foreign Elimination/ Consolidated Japan America Europe Countries Total Unallociated Total (Yen in (Yen in (Yen in (Yen in (Yen in Amount (Yen in millions) millions) millions) millions) millions) (Yen in millions) millons) - -------------------------------------------------------------------------------------------------------------------------------- Assets 9,474,768 6,577,056 1,557,523 1,211,312 18,820,660 1,921,725 20,742,386 - -------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------
-45-
- -------------------------------------------------------------------------------------------------------------------------------- [Overseas Sales] FY 2003 semi-annual (April 2002 through September 2002) - -------------------------------------------------------------------------------------------------------------------------------- Other Foreign North America Europe Countries Total - -------------------------------------------------------------------------------------------------------------------------------- 1 Overseas sales 3,216,881 717,383 1,328,687 5,262,952 (Yen in millions) - -------------------------------------------------------------------------------------------------------------------------------- 2 Consolidated sales 7,886,681 (Yen in millions) - -------------------------------------------------------------------------------------------------------------------------------- 3 Ratio of overseas sales to 40.8 9.1 16.8 66.7 consolidated sales (%) - -------------------------------------------------------------------------------------------------------------------------------- (Notes) 1. Reporting segments Reporting segments are defined based on geographic proximity. 2. Main countries and regions in each reporting segment North America -- United States of America, Canada Europe -- Germany, United Kingdom Other foreign countries -- Thailand, Australia 3. Overseas sales shows revenues recorded at TMC and its consolidated subsidiaries in countries or regions outside of Japan. FY 2003 (April 1, 2002 through March 31, 2003) - -------------------------------------------------------------------------------------------------------------------------------- Other Foreign North America Europe Countries Total - -------------------------------------------------------------------------------------------------------------------------------- 1 Overseas sales 6,243,637 1,547,389 2,666,889 10,457,916 (Yen in millions) - -------------------------------------------------------------------------------------------------------------------------------- 2 Consolidated sales 16,054,290 (Yen in millions) - -------------------------------------------------------------------------------------------------------------------------------- 3 Ratio of overseas sales to 38.9 9.6 16.6 65.1 consolidated sales (%) - -------------------------------------------------------------------------------------------------------------------------------- (Notes) 1. Reporting segments Reporting segments are defined based on geographic proximity. 2. Main countries and regions in each reporting segments North America -- United States of America, Canada Europe -- Germany, United Kingdom Other foreign countries -- Thailand, Australia 3. Overseas sales shows revenues recorded at TMC and its consolidated subsidiaries in countries or regions outside of Japan. - --------------------------------------------------------------------------------------------------------------------------------
-46- (Per Share Data)
- ------------------------------------------------------------------------------------------------------------------------------- FY2003 semi-annual FY2004 semi-annual FY2003 April 1, 2002 through April 1, 2003 through April 1, 2002 through September 30, 2002 September 30, 2003 March 31, 2003 - ------------------------------------------------------------------------------------------------------------------------------- 1 Net assets per share 1 Net assets per share 2,179.68 yen 2,226.34 yen 2 Basic net income per share for 2 Basic net income per share semi-annual period 272.75 yen 158.54 yen 3 Diluted net income per share for 3 Diluted net income per share semi-annual period 272.73 yen 158.54 yen (Additional Information) TMC has adopted "Accounting TMC has adopted "Accounting Standard for Earnings Per Share" Standard for Earnings Per Share" (Financial Accounting Standards (Financial Accounting Standards No.2) and "Implementation No.2) and "Implementation Guidance of Accounting Standard Guidance of Accounting Standard for Earnings Per Share" for Earnings Per Share" ______ (Implementation Guidance of (Implementation Guidance of Financial Accounting Standards No. Financial Accounting Standards No. 4) for this fiscal year. 4) for this period. The following represents the per The following represents the per share data for the year ended March share data for the period ended 31, 2003, as if it was calculated September 30, 2002, as if it was based on the previous method. calculated based on the previous method. 1 Net assets per share 1 Net assets per share 2,192.85 yen 2,158.47 yen 2 Basic net income per share 2 Basic net income per share for 269.48 yen semi-annual period 3 Diluted net income per share 156.15 yen 269.48 yen 3 Diluted net income per share for semi-annual period 156.15 yen - -------------------------------------------------------------------------------------------------------------------------------
-47- (Note) Bases for the calculation of basic and diluted net income per share for the (semi-annual) period are as follows:
- ---------------------------------------------------------------------------------------------------------------------------------- FY2003 semi-annual FY2004 semi-annual FY2003 April 1, 2002 through April 1, 2003 through April 1, 2002 through September 30, 2002 September 30, 2003 March 31, 2003 (Yen in millions) (Yen in millions) (Yen in millions) - ---------------------------------------------------------------------------------------------------------------------------------- Basic net income per share - ---------------------------------------------------------------------------------------------------------------------------------- Net income 553,797 - 944,671 - ---------------------------------------------------------------------------------------------------------------------------------- The amount not attributed to common shareholders - - 2,382 - ---------------------------------------------------------------------------------------------------------------------------------- (Bonuses to the directors based on the - - 2,382 appropriation of earnings, inner amount) - ---------------------------------------------------------------------------------------------------------------------------------- Net income attributed to 553,797 - 942,289 common shares - ---------------------------------------------------------------------------------------------------------------------------------- Weighted-average number of common shares 3,492,915,041 shares - 3,454,704,711 shares during the period - ---------------------------------------------------------------------------------------------------------------------------------- Diluted net income per share - ---------------------------------------------------------------------------------------------------------------------------------- The amount adjusted to (2) - (52) net income - ---------------------------------------------------------------------------------------------------------------------------------- (The amount resulting from the changes in equity ownership of TMC and the decreased (2) - (52) amount in interest expenses of the subsidiaries, inner amount) - ---------------------------------------------------------------------------------------------------------------------------------- Increase in number of 6,071 shares - shares 21,577 shares common shares - ---------------------------------------------------------------------------------------------------------------------------------- (The number of common shares to be used for the stock option plan under Articles 280-20 and 280-21 of Japanese 6,071 shares - shares 21,577 shares Commercial Code, inner amount) - ---------------------------------------------------------------------------------------------------------------------------------- The description of shares The shares to be used for - The shares to be used for not included in the the stock option plan under the stock option plan under calculation of diluted net Article 210-2 of the old Article 210-2 of the old income per share due to Japanese Commercial Code Japanese Commercial Code anti-dilutive effect 2,011,000 shares 1,941,000 shares Unsecured warrant bonds Unsecured warrant bonds 116,400 shares 116,400 shares - ----------------------------------------------------------------------------------------------------------------------------------
-48- (Subsequent Events)
- --------------------------------------------------------------------------------------------------------------------------------- FY2003 semi-annual FY2004 semi-annual FY2003 April 1, 2002 through April 1, 2003 through April 1, 2002 through September 30, 2002 September 30, 2003 March 31, 2003 - --------------------------------------------------------------------------------------------------------------------------------- Subsequent to the date of this semi-annual period end and before the date of submission of this Semi-Annual Securities Report, TMC repurchased 29,385 thousand shares of ______ ______ its common stock at a cost of 93,125 million yen pursuant to a resolution made in its general shareholders' meeting held on June 26, 2002. - ---------------------------------------------------------------------------------------------------------------------------------
-49- Notes to semi-annual consolidated financial statements - -------------------------------------------------------------------------------- FY2004 semi-annual April 1, 2003 through September 30, 2003 - -------------------------------------------------------------------------------- 1 Accounting Principles, Procedures and Presentation Methods for Semi-Annual Consolidated Financial Statements The accompanying semi-annual consolidated financial statements of Toyota Motor Corporation (the "parent company") have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). In September 1999, the parent company listed its American Depositary Shares ("ADS") on the New York Stock Exchange. Since then, the parent company has prepared the consolidated financial statements in accordance with the terminology, forms and preparation methods required in issuing ADS and registered them with the United States Securities and Exchange Commission. The following paragraphs describe the major differences between accounting principles, procedures and presentation methods for semi-annual consolidated financial statements which the parent company and its subsidiaries (collectively "Toyota") adopt and those in Japan. (1) Semi-annual consolidated statements of shareholders' equity Toyota has prepared semi-annual consolidated statements of shareholders' equity which present all changes in shareholders' equity during a period as a part of its semi-annual consolidated financial statements. The consolidated comprehensive income and all components of comprehensive income are disclosed in accordance with Statement of Financial Accounting Standards ("FAS") No. 130 Reporting Comprehensive Income in the semi-annual consolidated statements of shareholders' equity. In the Statement, comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from nonowner sources, and consists of net income and other comprehensive income. Other comprehensive income includes any changes in foreign currency translation adjustments, unrealized gains or losses on securities and minimum pension liability adjustments. Any changes in capital surplus and retained earnings during a period presented in semi-annual consolidated statements of capital surplus and retained earnings under accounting principles generally accepted in Japan ("Japanese GAAP") are included in the semi-annual consolidated statements of shareholders' equity. (2) The basis for determination of subsidiary Under U.S. GAAP, subsidiaries subject to the consolidation are determined mainly based on the ownership of voting shares (more than 50%). Under Japanese GAAP, subsidiaries according to the control basis are added to those subsidiaries determined by the ownership of voting shares. (3) Reporting category of equity in earnings of affiliated companies Under Japanese GAAP, equity in earnings of affiliated companies is included in non-operating income or expenses, while under U.S. GAAP, it is presented below "Income before minority interest and equity in earnings of affiliated companies". (4) Recognition of gains on transfer of the substitutional portion of the employee pension fund Under Japanese GAAP, gains or losses on transfer of the substitutional portion of the employee pension fund are required to be recognized at the date of the approval for the separation of the benefit obligation that relates to past employee services, while those gains or losses can be recognized as a transitional measure at the date of the approval for the exemption from the payment of the benefits related to future employee services. Under U.S. GAAP, those gains or losses should be recorded upon completion of the actual transfer of the plan assets to the government. - -------------------------------------------------------------------------------- -50- - -------------------------------------------------------------------------------- FY2004 semi-annual April 1, 2003 through September 30, 2003 - -------------------------------------------------------------------------------- (5) Accounting for leases Under U.S. GAAP, Toyota has accounted for lease transactions in accordance with FAS No. 13 Accounting for Leases. In the Statement, as a lessor, Toyota has accounted them as if they are sold, and as "sales-type leases" or "direct financing leases" for lease transactions that meet certain criteria. As a lessee, Toyota has recorded fixed assets as "capital leases" for lease transactions that meet certain criteria. (6) Accounting for accrued pension and severance costs Under U.S. GAAP, Toyota has accrued pension and severance costs in accordance with FAS No. 87 Employers' Accounting for Pensions ("FAS 87") and FAS No. 88 Employers' Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits. In FAS 87, additional minimum pension liabilities are required when the accumulated benefit obligation exceeds the fair value of plan assets, while such treatment is not provided under Japanese GAAP. Under U.S. GAAP, unrecognized actuarial gain or loss is amortized over the remaining service period of employees when such balance at beginning of year exceeds the "Corridor" which is defined as a 10% of larger of projected benefit obligation or fair value of plan assets, while such gain or loss is amortized for a certain period regardless of the Corridor under Japanese GAAP. (7) Accounting for goodwill Under U.S. GAAP, goodwill shall not be amortized and shall be tested for impairment on annual basis and between annual tests if an event occurs or circumstances change that would indicate the possibility of the impairment, and written off when impaired in accordance with FAS No. 142 Goodwill and Other Intangible Assets. Under Japanese GAAP, goodwill shall be amortized over 5 years on the straight-line method, while it shall be expensed as incurred, if not material. - -------------------------------------------------------------------------------- -51- - -------------------------------------------------------------------------------- FY2004 semi-annual April 1, 2003 through September 30, 2003 - -------------------------------------------------------------------------------- 2 Nature of operations Toyota is primarily engaged in the design, manufacture, assembly and sale of passenger cars, sport-utility vehicles, minivans, trucks and related parts and accessories throughout the world. In addition, Toyota provides retail and wholesale financing, retail leasing and certain other financial services primarily to its dealers and their customers related to vehicles manufactured by Toyota. 3 Summary of significant accounting policies The parent company and its subsidiaries in Japan maintain their records and prepare their semi-annual financial statements in accordance with Japanese GAAP, and its foreign subsidiaries in conformity with those of their countries of domicile. Certain adjustments and reclassifications have been incorporated in the accompanying semi-annual consolidated financial statements to conform with. U.S. GAAP. These adjustments were not recorded in the statutory books. Significant accounting policies after reflecting adjustments for the above are as follows: (1) Basis of consolidation and accounting for investments in affiliated companies The semi-annual condensed consolidated financial statements include the accounts of the parent company and those of its majority-owned subsidiary companies. All significant intercompany transactions and accounts have been eliminated. Investments in affiliated companies in which Toyota exercises significant influence, but which it does not control, are stated at cost plus equity in undistributed earnings. Net income includes Toyota's equity in current earnings of such companies, after elimination of unrealized intercompany profits. Investments in which Toyota does not exercise significant influence (generally less than a 20% ownership interest) are stated at cost. (2) Estimates The preparation of Toyota's semi-annual consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the semi-annual consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The more significant estimates include: product warranties, allowance for doubtful accounts and credit losses, residual values for leased assets, impairment of long-lived assets, postretirement benefits costs and obligations and post-employment benefit costs and other-than-temporary losses on marketable securities. (3) Translation of foreign currencies All asset and liability accounts of foreign subsidiaries and affiliates are translated into Japanese yen at appropriate period-end current rates and all income and expense accounts of those subsidiaries are translated at average-period exchange rates. The resulting translation adjustments are included as a component of accumulated other comprehensive income/loss. Foreign currency receivables and payables are translated at appropriate period-end current rates and the resulting transaction gains or losses are taken into income currently. - -------------------------------------------------------------------------------- -52- - -------------------------------------------------------------------------------- FY2004 semi-annual April 1, 2003 through September 30, 2003 - -------------------------------------------------------------------------------- (4) Revenue recognition Revenue from sales of vehicles and parts is generally recognized upon delivery which is considered to have occurred when the dealer has taken title to the product and the risk and reward of ownership have been substantively transferred, except as described below. Toyota's sales incentive programs principally consist of cash payments to dealers calculated based on vehicle volume or a model sold by the dealers in a certain period of time. Toyota specifies those volume, model or period covered in the incentive programs. Toyota accrues these incentives as revenue reductions at the sale of a vehicle corresponding to the program by the amount determined in the related incentive program. Revenue from the sale of vehicles under which Toyota conditionally guarantees the minimum resale value is recognized on a pro rata basis from the date of sale to the first exercise date of the guarantee in a manner similar to lease accounting. The underlying vehicles of these transactions are recorded as assets and are depreciated in accordance with Toyota's depreciation policy. Revenue from retail financing contracts and finance leases is recognized using the effective yield method. Revenue from operating leases is recognized on a straight-line basis over the lease term. Toyota on occasion sells finance receivables in transactions subject to limited recourse provisions. These sales are to trusts and Toyota retains the servicing and is paid a servicing fee. Gains or losses from the sales of the finance receivables are recognized in the period in which such sales occur. (5) Other costs Advertising and sales promotion costs are expensed as incurred. Advertising costs were 162,295 million yen for the six month period ended September 30, 2003. Toyota generally warrants its products against certain manufacturing and other defects. Provisions for product warranties are provided for specific periods of time and/or usage of the product and vary depending upon the nature of the product, the geographic location of its sale and other factors. Toyota provides a provision for estimated product warranty costs at the time the related sale is recognized based on estimates that Toyota will incur to repair or replace product parts that fail while still under warranty. The amount of accrued estimated warranty costs is primarily based on historical experience as to product failures as well as current information on repair costs. The amount of warranty costs accrued also contains an estimate as to warranty claim recoveries from suppliers. Research and development costs are expensed as incurred and were 304,638 million yen for the six month periods ended September 30, 2003. (6) 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 of changes in value because of changes in interest rates. - -------------------------------------------------------------------------------- -53- - -------------------------------------------------------------------------------- FY2004 semi-annual April 1, 2003 through September 30, 2003 - -------------------------------------------------------------------------------- (7) Marketable securities Marketable securities consist of debt and equity securities. Debt and equity securities designated as available-for-sale are carried at fair value with changes in unrealized gains or losses included as a component of accumulated other comprehensive income/loss in shareholders' equity, net of applicable taxes. Should Toyota acquire securities in the future and designate them as held-to-maturity investments, such securities would be carried at amortized cost. Individual securities classified as either available-for-sale or held-to-maturity are reduced to net realizable value for other-than-temporary declines in market value. In determining if a decline in value is other-than-temporary, Toyota considers the length of time and the extent to which the fair value has been less than the carrying value, the financial condition and prospects of the company and Toyota's ability and intent to retain its investment in the company for a period of time sufficient to allow for any anticipated recovery in market value. Realized gains and losses, which are determined on the average cost method, are reflected in the statement of income upon realized. (8) Security investments in non-public companies Security investments in non-public companies are carried at cost as fair value is not readily determinable. If the value of a non-public security investment is estimated to have declined and such decline is judged to be other-than-temporary, Toyota recognizes the impairment of the investment and the carrying value is reduced to its fair value. Determination of impairment is based on the consideration of such factors as operating results, business plans and estimated future cash flows. Fair value is determined principally through the use of the latest financial information. (9) Finance receivables Finance receivables are recorded at the present value of the related future cash flows including residual values for finance leases. (10) Allowance for credit losses Allowances for credit losses are established to cover probable losses on receivables resulting from the inability of customers to make required payments. The allowance for credit losses is based primarily on historical loss experience. Other factors affecting collectibility are also evaluated in determining the amount to be provided. Losses are charged to the allowance when it has been determined that payments will not be received and collateral cannot be recovered or the related collateral is repossessed and sold. Any shortfall between proceeds received and the carrying cost of repossessed collateral is charged to the allowance. Recoveries are credited to the allowance for credit losses. (11) Allowance for residual value losses Toyota is exposed to risk of loss on the disposition of off-lease vehicles to the extent that sales proceeds are not sufficient to cover the carrying value of the leased asset at lease termination. Toyota maintains an allowance to cover probable estimated losses related to unguaranteed residual values on its present owned portfolio. The allowance is evaluated considering projected vehicle return rates and projected loss severity. Factors considered in the determination of projected return rates and loss severity include historical and market information on used vehicle sales, trends in lease returns and new car markets, and general economic conditions. Management evaluates the foregoing factors, develops several potential loss scenarios, and reviews allowance levels to determine whether reserves are considered adequate to cover the probable range of losses. The allowance for residual value losses is maintained in amounts considered Toyota to be appropriate in relation to the estimated losses on the present owned portfolio. Upon disposal of the assets, the allowance for residual losses is adjusted for the difference between the net book value and the proceeds from sale. - -------------------------------------------------------------------------------- -54- - -------------------------------------------------------------------------------- FY2004 semi-annual April 1, 2003 through September 30, 2003 - -------------------------------------------------------------------------------- (12) Inventories Inventories are valued at cost, not in excess of market, cost being determined on the "average cost" basis, except for the cost of finished products carried by certain subsidiary companies which is determined on the "specific identification" basis or "last in, first out" ("LIFO") basis. Inventories valued on the LIFO basis totaled 169,351 million yen at September 30, 2003. Had the "first in, first out" basis been used for those companies using the LIFO basis, inventories would have been 19,136 million yen higher than reported at September 30, 2003. (13) Property, plant and equipment Property, plant and equipment are stated at cost. Major renewals and improvements are capitalized; minor replacements, maintenance and repairs are charged to current operations. Depreciation of property, plant and equipment is mainly computed on the declining-balance method for the parent company and Japanese subsidiaries and on the straight-line method for foreign subsidiary companies at rates based on estimated useful lives of the assets according to general class, type of construction and use. Estimated useful lives range from 3 to 60 years for buildings and from 2 to 20 years for machinery and equipment. Vehicles and equipment on operating leases to third parties are originated by dealers and acquired by certain consolidated subsidiaries. Such subsidiaries are also the lessors of certain property that they acquire directly. Vehicles and equipment on operating leases are depreciated primarily on a straight-line basis over the lease term, generally three years, to the estimated residual value. (14) Long-lived assets Toyota reviews its long-lived assets, including investments in affiliated companies, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when the carrying amount of an asset exceeds the estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. The amount of the impairment loss to be recorded is calculated by the excess of the assets carrying value over its fair value. Fair value is determined mainly using a discounted cash flow valuation method. (15) Goodwill and intangible assets Goodwill is not material to Toyota's semi-annual consolidated balance sheet. Intangible assets consist mainly of software. Intangible assets with a definite life are amortized on a straight-line basis with estimated useful lives mainly of 5 years. Intangible assets with a definite life are tested for impairment whenever events or circumstances indicate that a carrying amount of an asset (asset group) may not be recoverable. An impairment loss would be recognized when the carrying amount of an asset exceeds the estimated undiscounted cash flows used in determining the fair value of the asset. The amount of the impairment loss to be recorded is calculated generally determined using a discounted cash flow analysis. Costs related to internally developed intangible assets are expensed as incurred. - -------------------------------------------------------------------------------- -55- - -------------------------------------------------------------------------------- FY2004 semi-annual April 1, 2003 through September 30, 2003 - -------------------------------------------------------------------------------- (16) Environmental matters Environmental expenditures relating to current operations are expensed or capitalized as appropriate. Expenditures relating to existing conditions caused by past operations, which do not contribute to current or future revenues, are expensed. Liabilities for remediation costs are recorded when they are probable and reasonably estimable, generally no later than the completion of feasibility studies or Toyota's commitment to a plan of action. The cost of each environmental liability is estimated by using current technology available and various engineering, financial and legal specialists within Toyota based on current law. Such liability does not reflect any offset for possible recoveries from insurance companies and is not discounted. (17) Income taxes The provision for income taxes is computed based on the pretax income included in the semi-annual consolidated statement of income. The asset and liability approach is used to recognize deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. (18) Derivative financial instruments Toyota employs derivative financial instruments, including foreign exchange forward contracts, foreign currency options, interest rate swaps, interest rate currency swap agreements and interest rate options to manage its exposure to fluctuations in interest rates and foreign currency exchange rates. Toyota does not use derivatives for speculation or trading purposes. Changes in the fair value of derivatives are recorded each period in current earnings, depending on whether a derivative is designated as part of a hedge transaction and the type of hedge transaction. The ineffective portion of all hedges is recognized currently in earnings. (19) Net income per common share Basic net income per common share is calculated by dividing net income by the weighted-average number of shares outstanding during the reported period 3,419,900,609 for the six month period ended September 30, 2003. The calculation of diluted net income per common share is similar to the calculation of basic net income per common share, except that the weighted-average number of shares outstanding includes the additional dilution from assumed exercise of dilutive stock options. The weighted average numbers of shares outstanding used in diluted net income per common share calculation was 3,419,990,391 for the six month period ended September 30, 2003. (20) Stock-based compensation Toyota measures compensation expense for its stock-based compensation plan using the intrinsic value method. (21) Other comprehensive income/loss Other comprehensive income/loss refers to revenues, expenses, gains and losses that, under U.S. GAAP are included in comprehensive income, but are excluded from net income as these amounts are recorded directly as an adjustment to shareholders' equity. Toyota's other comprehensive income/loss is primarily comprised of unrealized gains/losses on marketable securities designated as available-for-sale, foreign currency translation adjustments, gains/losses on derivative instruments and adjustments to recognize additional minimum liabilities associated with Toyota's defined benefit pension plans. - -------------------------------------------------------------------------------- -56- - -------------------------------------------------------------------------------- FY2004 semi-annual April 1, 2003 through September 30, 2003 - -------------------------------------------------------------------------------- (22) Accounting changes In June 2001, the Financial Accounting Standards Board ("FASB") issued FAS No.143 Accounting for Asset Retirement Obligations ("FAS 143"). FAS 143 requires full recognition of asset retirement obligations on the balance sheet from the point in time at which a legal obligation exists. The obligation is required to be measured at fair value. The carrying value of the asset or assets to which the retirement obligation relates would be increased by an amount equal to the liability recognized. This amount would then be included in the depreciable base of the asset and charged to income over its life as depreciation. Toyota adopted FAS 143 on April 1, 2003. The adoption of FAS 143 did not have a material impact on Toyota's semi-annual consolidated financial statements. In April 2002, FASB issued FAS No. 145, Rescission of FAS No. 4, 44, and 64, Amendment of FAS 13, and Technical Corrections ("FAS 145"). This statement makes various technical corrections to existing pronouncements including the classification of gain or loss on extinguishment of debt, sale-lease back accounting for certain lease modifications. Toyota adopted FAS 145 on April 1, 2003. The adoption of FAS 145 did not have a material impact on Toyota's semi-annual consolidated financial statements. In November 2002, FASB Emerging Issues Task Force ("EITF") reached consensus on EITF Issue No. 00-21, Revenue Arrangements with Multiple Deliverables ("EITF 00-21"). EITF 00-21 addresses certain aspects of the accounting by a vendor for arrangements under which it will perform multiple revenue-generating activities. Toyota applied this consensus for revenue arrangements entered into in the period begun July 1, 2003. The adoption of EITF 00-21 did not have a material impact on Toyota's semi-annual consolidated financial statements. In January 2003, FASB issued FASB Interpretation ("FIN") No. 46, Consolidation of Variable Interest Entities - an interpretation of ARB No. 51 ("FIN 46"). This interpretation provides guidance on identifying variable interest entities ("VIE") for which control is achieved through means other than voting rights and on how to determine when a company should consolidate the VIE. It is not limited to special purpose entities and will require more companies to consolidate entities with which they have contractual, ownership, or other pecuniary interests that absorb a portion of that entity's expected losses or receive a portion of the entity's residual returns. Toyota applied FIN 46 to VIEs created after January 31, 2003 and to VIEs in which Toyota obtained an interest after that date upon its creation or obtaining an interest. However, the application of FIN 46 to these VIEs did not have a material impact on Toyota's semi-annual consolidated financial statements. Toyota will apply FIN 46 on December 31, 2003 to VIEs existed at January 31, 2003. Toyota enters into securitization transactions with certain special-purpose entities. However, because securitization transactions are primarily with entities that are qualifying special-purpose entities ("QSPEs") under FAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities ("FAS 140"), and because QSPEs are excluded from the scope of FIN 46, the implementation of FIN 46 relating to these securitization transactions is not expected to have a material impact on Toyota's consolidated financial statements. Toyota has invested in several joint ventures. These joint ventures may be deemed as variable interest entities, however, neither the aggregate size of these joint ventures nor Toyota's involvements in these entities are expected to be material to Toyota's consolidated financial statements. - -------------------------------------------------------------------------------- -57- - -------------------------------------------------------------------------------- FY2004 semi-annual April 1, 2003 through September 30, 2003 - -------------------------------------------------------------------------------- In February 2003, EITF reached a consensus on EITF Issue No. 03-2, Accounting for the Transfer to the Japanese Government of the Substitutional Portion of Employee Pension Fund Liabilities ("EITF 03-2"), which should be applied retroactively to April 1, 2002, the earliest date on which the separation process begun. EITF 03-2 provides a consensus that the entire process for the transfer of the substitutional portion of the benefit obligation and related plan assets to the Japanese government should be accounted for as a single settlement transaction upon completion of the transfer to the government. Under the consensus reached, the difference between the obligation settled, assuming the remeasurement at fair value immediately prior to the settlement, including the effects of the future salary increases previously accrued under the substitutional arrangement, and the assets transferred to the government, determined pursuant to the government formula, should be accounted for as settlement gain or loss at the time of the settlement. In accounting for the settlement of the substitutional portion of the obligation, a proportionate amount of the unrecognized gain or loss relating to the entire employee pension fund should also be recognized as a settlement gain or loss. Toyota has already begun the separation process by obtaining the approval from the Japanese government of exemption from the benefits related to future employee service under the substitutional portion. However, in accordance with EITF 03-2, no effect of this transaction has been recognized in the semi-annual consolidated financial statements for the six month period ended September 30, 2003 as the completion of the transfer of the substitutional portion of the benefit obligation and related plan assets to the Japanese government has not completed as at September 30, 2003. In March 2003, EITF released Issue No. 02-9, Accounting for Changes That Result in a Transferor Regaining Control of Financial Assets Sold ("EITF 02-9"). EITF 02-9 relates to securitizations that have been accounted for as sales under FAS 140. In the event that one or more of the control rules are no longer met, the transferor would have to recognize those assets and the related liabilities on the consolidated balance sheet at the fair value. Toyota adopted EITF 02-9 prospectively to such events occurring after April 2, 2003. The adoption of EITF 02-9 did not have a material impact on Toyota's semi- annual consolidated financial statements. In April 2003, the FASB issued FAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities ("FAS 149"). This statement amends and clarifies financial accounting and reporting for derivative instruments, including derivative instruments embedded in other contracts and for hedging activities under FAS No. 133, Accounting for Derivative Instruments and Hedging Activities ("FAS 133"). Toyota applied FAS 149 (1) to contracts entered into or modified after June 30, 2003, with certain exceptions, and (2) to hedging relationships designated after June 30, 2003. The adoption of FAS 149 did not have a material impact on Toyota's semi- annual consolidated financial statements. In May 2003, the FASB issued FAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity ("FAS 150"). This Statement improves the accounting for certain financial instruments that, under previous guidance, issuers could account for as equity. FAS 150 requires that those instruments be classified as liabilities in the balance sheets. Toyota applied FAS 150 to financial instruments entered into or modified after May 31, 2003, and otherwise in the fiscal period starting July 1, 2003. The adoption of FAS 150 did not have a material impact on Toyota's semi-annual consolidated financial statements. - -------------------------------------------------------------------------------- -58- - -------------------------------------------------------------------------------- FY2004 semi-annual April 1, 2003 through September 30, 2003 - -------------------------------------------------------------------------------- In May 2003, the EITF reached consensus on EITF 01-8, Determining Whether an Arrangement Contains a Lease. EITF 01-8 clarifies the method to identify lease elements in arrangements that do not explicitly include lease provisions, and requires any lease element identified should be accounted for by current accounting literatures prescribing leases. Toyota applied the provisions of the EITF in the fiscal period beginning July 1, 2003. The adoption of EITF 01-8 did not have a significant impact on the Toyota's semi-annual consolidated financial statements. (23) Recent pronouncements to be adopted in future periods In May 2003, EITF announced EITF Topic No. D-107, Lessor Consideration of Third-Party Residual Value Guarantees. EITF Topic No. D-107 has clarified that some of the accounting practices by lessors regarding residual value guarantees issued by an unrelated third party for a portfolio of leased assets for which settlement is not solely based upon the residual value of the individual leased assets. Under this EITF, residual value guarantees of a portfolio of leased assets preclude a lessor from determining the amount of the guaranteed residual value of any individual leased asset within the portfolio at lease inception and, accordingly, no such amounts should be included in minimum lease payments. Toyota will apply this provision for the fiscal period starting January 1, 2004. Management does not expect this provision to have a material impact on Toyota's consolidated financial statements. - -------------------------------------------------------------------------------- -59- - -------------------------------------------------------------------------------- FY2004 semi-annual September 30, 2003 - -------------------------------------------------------------------------------- 4 Marketable securities and other securities investments Marketable securities and other securities investments include debt and equity securities for which the aggregate cost, gross unrealized gains and losses and fair value are as follows:
Yen in millions --------------------------------------------------------------------- Gross Gross unrealized unrealized Fair Cost gains losses value --------------- --------------- --------------- ------------------ Available-for-sale ------------------ Debt securities 1,981,094 17,857 4,010 1,994,941 Equity securities 577,227 353,383 10,422 920,188 --------------- --------------- --------------- ------------------ Total 2,558,321 371,240 14,432 2,915,129 --------------- --------------- --------------- ------------------ Securities not practicable to fair value ---------------------------------------- Debt securities 51,734 Equity securities 90,681 --------------- Total 142,415 ---------------
In the ordinary course of business, Toyota maintains long-term investment securities, included in "Marketable securities and other securities investments", issued by a number of non-public companies which are recorded at cost, as their fair values were not readily determinable. Toyota's management employs a systematic methodology to assess the recoverability of such investments by reviewing the financial viability of the underlying companies and the prevailing market conditions in which these companies operate to determine if Toyota's investment in each individual company is impaired and whether the impairment is other-than-temporary. If the impairment is determined to be other-than-temporary, the cost of the investment is written-down by the impaired amount and the losses are recognized currently in earnings. - -------------------------------------------------------------------------------- -60- - -------------------------------------------------------------------------------- FY2004 semi-annual September 30, 2003 - -------------------------------------------------------------------------------- 5 Vehicles and equipment on operating leases Vehicles and equipment on operating leases consist of the following: Yen in millions ------------------ September 30, 2003 ------------------ Vehicles 1,438,962 Equipment and other 116,075 ------------------ 1,556,037 Less - Accumulated depreciation (397,650) ------------------ Vehicles and equipment on operating leases, net 1,158,387 ------------------ Rental income from vehicles and equipment on operating leases was 149,591 million yen for the six month period ended September 30, 2003. Future minimum rentals from vehicles and equipment on operating leases are due in installments as follows: Years ending September 30: Yen in millions ---------------------------------- ------------------ 2004 276,546 2005 187,976 2006 96,863 2007 28,039 2008 7,474 The future minimum rentals as shown above should not be considered indicative of future cash collections. - -------------------------------------------------------------------------------- -61- 6 Lease commitments Toyota leases certain assets under capital lease and operating lease arrangements. Yen in millions ------------------- Class of property September 30, 2003 ------------------- Building 11,006 Machinery and equipment 157,121 Less - Accumulated depreciation (111,487) ------------------- 56,640 ------------------- Amortization expense under capital leases for the six month period ended September 30, 2003 was 9,116 million yen. Future minimum lease payments under capital leases together with the present value of the net minimum lease payments as of September 30, 2003 are as follows: Years ending September 30: Yen in millions ---------------------------------- ------------------ 2004 16,817 2005 14,085 2006 13,922 2007 14,936 2008 5,368 Thereafter 24,385 ------------------- Total minimum lease payments 89,513 Less - Amount representing interest (10,744) ------------------- Present value of net minimum lease 78,769 payments Less - Current obligations (14,316) ------------------- Long-term capital lease obligations 64,453 ------------------- - -------------------------------------------------------------------------------- -62- - -------------------------------------------------------------------------------- FY2004 semi-annual September 30, 2003 - -------------------------------------------------------------------------------- Rental expense under operating leases for the six month period ended September 30, 2003 was 40,679 million yen. The minimum rental payments required under operating leases relating primarily to land, buildings and equipment having initial or remaining non-cancelable lease terms in excess of one year at September 30, 2003 are as follows: Years ending September 30: Yen in millions ----------------------------------------------- -------------------- 2004 8,072 2005 7,186 2006 5,185 2007 3,670 2008 2,703 Thereafter 12,192 -------------------- Total minimum future rentals 39,008 -------------------- - -------------------------------------------------------------------------------- -63- - -------------------------------------------------------------------------------- FY2004 semi-annual April 1, 2003 through September 30, 2003 - -------------------------------------------------------------------------------- 7 Derivative financial instruments Toyota employs derivative financial instruments, including foreign exchange forward contracts, foreign currency options, interest rate swaps and interest rate currency swap agreements to manage its exposure to fluctuations in interest rates and foreign currency exchange rates. Toyota does not use derivatives for speculation or trading. Fair value hedges ----------------- Toyota enters into interest rate swaps, and interest rate currency swap agreements mainly to convert its fixed-rate debt to variable-rate debt. Toyota uses interest rate swap agreements in managing its exposure to interest rate fluctuations. Interest rate swap agreements are executed as either an integral part of specific debt transactions or on a portfolio basis. Toyota uses interest rate currency swap agreements to entirely hedge exposure to exchange rate fluctuations on principal and interest payments for borrowings denominated in foreign currencies. Notes and loans payable issued in foreign currencies are hedged by concurrently executing interest rate currency swap agreements which involve the exchange of foreign currency principal and interest obligations for each functional currency obligations at agreed-upon currency exchange and interest rates. For the six month period ended September 30, 2003, Toyota reported a gain of 2,007 million yen, related to the ineffective portion of Toyota's fair value hedges which is included in cost of financing operations in the accompanying semi-annual consolidated statement of income. For fair value hedging relationships, the components of each derivative's gain or loss are included in the assessment of hedge effectiveness. Undesignated derivative financial instruments --------------------------------------------- Toyota uses foreign exchange forward contracts, foreign currency options, interest rate swaps, interest rate currency swap agreements, and interest rate options, which manage its exposure to foreign currency exchange fluctuation and interest rate fluctuation from an economic perspective, and which Toyota is unable or has elected not to apply hedge accounting. Unrealized gains or losses on these derivative instruments are reported in cost of financing operations and foreign exchange gain, net in the accompanying semi-annual consolidated statement of income. - -------------------------------------------------------------------------------- -64- - -------------------------------------------------------------------------------- FY2004 semi-annual April 1, 2003 through September 30, 2003 - -------------------------------------------------------------------------------- 8 Other commitments and contingencies, concentrations and factors that may affect future operations Commitments outstanding at September 30, 2003 for the purchase of property, plant and equipment and other assets are 78,372 million yen. Toyota enters into contracts with Toyota dealers to guarantee customers' payment of their installment payables that arises from installment contracts between customers and Toyota dealers, as and when requested by Toyota dealers. Guarantee periods are set to match maturity of installment payments, and range from 1 month to 105 months at September 30, 2003, however, they are generally shorter than the useful lives of products sold. Toyota is required to execute its guarantee primarily when customers are unable to make required payments. The maximum potential amount of future payments as of September 30, 2003 is 907,069 million yen. Liability for guarantee of 4,295 million yen has been provided as of September 30, 2003. Under these guarantee contracts, Toyota is entitled to recover its payments from customers either by cash or through vehicles foreclosed. In February 2003, Toyota, General Motors, Ford, DaimlerChrysler, Honda, Nissan and BMW and their U.S. and Canadian sales and marketing subsidiaries, the National Automobile Dealers Association and the Canadian Automobile Dealers Association were named as defendants in purported nationwide class actions on behalf of all purchasers of new motor vehicles in the United States since January 1, 2001. These actions were filed in federal courts in California, Illinois, New York, Massachusetts, Florida, New Jersey and Pennsylvania. Additionally, parallel class actions were filed in state courts in California, Minnesota, New Mexico, New York, Tennessee, Wisconsin, Arizona, Florida, Massachusetts, Iowa, and New Jersey on behalf of the same purchasers in those states. As of November 30, 2003, approximately 10 such cases were pending before the various federal and state courts. (The cases in the federal courts, and the state courts in California and New Jersey have been consolidated respectively.) The nearly identical complaints allege that the defendants violated the Sherman Antitrust Act by conspiring among themselves and with their dealers to prevent the sale to United States citizens of vehicles produced for the Canadian market. The complaints allege that new vehicle prices in Canada are 10% to 30% lower than those in the United States and that preventing the sale of these vehicles to United States citizens resulted in United States consumers paying excessive prices for the same type of vehicles. The complaints seek permanent injunctions against the alleged antitrust violations and treble damages in an unspecified amount. The cases are at a preliminary stage; as of November 30, 2003, no defendant has yet answered the complaints and there has been no decision on the certification of the alleged cases. Toyota believes that its actions have been lawful and intends to vigorously defend these cases. Toyota has various other legal actions, governmental proceedings and other claims pending against it, including product liability claims in the United States. Although the claimants in some of these actions seek potentially substantial damages, Toyota cannot currently determine its potential liability or the damages, if any, with respect to these claims. However, based upon information currently available to Toyota, Toyota believes that its losses from these matters, if any, would not have a material adverse effect on Toyota's financial position, operating results or cash flows. - -------------------------------------------------------------------------------- -65- - -------------------------------------------------------------------------------- FY2004 semi-annual April 1, 2003 through September 30, 2003 - -------------------------------------------------------------------------------- In September 2000, the European Union approved a directive that mandates member states to promulgate regulations implementing, by April 21, 2002, the following requirements (1) manufacturers shall bear all or a significant part of the cost for taking back end-of-life vehicles put on the market after July 1, 2002 and dismantling and recycling those vehicles; provided however, that beginning January 1, 2007, manufacturers will also be financially responsible for vehicles put on the market before July 1, 2002; (2) manufacturers may not use certain hazardous materials in vehicles to be sold after July 2003; (3) vehicle type approved and put on the market after three years after the amendment of Directive on Type-approval, shall be re-usable and/or recyclable to a minimum of 85% by weight per vehicle and shall be re-usable and/or recoverable to a minimum of 95% by weight per vehicle; and (4) end-of-life vehicles must meet actual re-use and recovery targets of 80% and 85%, respectively, of vehicle weight by January 1, 2006, rising respectively to 85% and 95% by January 1, 2015. Currently, there are numerous uncertainties surrounding the form and implementation of the applicable regulations in different European Union member states, including in particular, regarding manufacturer responsibilities and resulting expenses that may be incurred. As of November 30, 2003, the following 10 member states have adopted legislation to implement the directive: The Netherlands, Germany, Austria, Spain, Luxembourg, Italy, Portugal, France, United Kingdom and Ireland. In addition, Sweden, Norway and Denmark have adopted legislation similar to the directive and Belgium has adopted legislation that partially implements the directive. Despite the requirement to enact legislation to implement the directive by April 21, 2002, implementation of the directive has been delayed in some countries. In addition, under this directive, member states must take measures to ensure that car manufacturers, distributors and other auto-related businesses establish adequate used vehicle disposal facilities and to ensure that hazardous materials and recyclable parts are removed from vehicles prior to scrapping. Accordingly, this directive may impact Toyota's vehicles sold in the European Union. Based on the legislation that has been enacted to date, Toyota has provided for its estimated liability related to covered vehicles in existence as of September 30, 2003. Depending on the legislation implemented in the 2 member states that have not yet enacted legislation and other circumstances, Toyota may be required to take additional accruals for the expected costs to comply with these regulations. Although Toyota does not expect its compliance with the directive to result in significant cash expenditures, Toyota is continuing to assess the impact of this future legislation on its results of operations, cash flows and financial position. Toyota has a concentration of material purchases from a supplier which is an affiliated company. These purchases approximate 10% of material costs. The parent company has a concentration of labor supply in employees working under collective bargaining agreements and a substantial portion of these employees are working under the agreement that will expire on December 31, 2005. - -------------------------------------------------------------------------------- -66- - -------------------------------------------------------------------------------- FY2004 semi-annual April 1, 2003 through September 30, 2003 - -------------------------------------------------------------------------------- 9 Segment data The operating segments reported below are the segments of Toyota for which separate financial information is available and for which operating income/loss amounts are evaluated regularly by executive management in deciding how to allocate resources and in assessing performance. The major portions of Toyota's operations on a worldwide basis are derived from the Automotive and Financial Services business segments. The Automotive segment designs, manufactures, assembles and distributes passenger cars, sport-utility vehicles, minivans, trucks and related parts and accessories. The Financial Services segment consists primarily of financing operations, and vehicle and equipment leasing operations to assist in the merchandising of Toyota's products as well as other products. The All Other segment includes Toyota's housing business and various other business activities. The following tables present certain information regarding Toyota's industry segments and operations by geographic areas as of September 30, 2003 and for the six month period ended September 30, 2003: (Segment operating results and assets)
--------------------------------------------------------------------------------------------------------------------------------- Intersegment Financial Elimination/ Consolidated Automotive Services All Other Unallocated Total (Yen in millions) (Yen in millions) (Yen in millions) Amount (Yen in millions) (Yen in millions) --------------------------------------------------------------------------------------------------------------------------------- Net revenues (1) Sales to external 7,584,310 362,460 277,471 - 8,224,241 customers (2) Intersegment sales 6,126 9,000 126,208 ( 141,334) - --------------------------------------------------------------------------------------------------------------------------------- Total 7,590,436 371,460 403,679 ( 141,334) 8,224,241 --------------------------------------------------------------------------------------------------------------------------------- Depreciation 368,242 97,493 10,203 - 475,938 --------------------------------------------------------------------------------------------------------------------------------- Operating income 702,634 61,681 6,047 ( 2,593) 767,769 --------------------------------------------------------------------------------------------------------------------------------- Segment assets 9,689,020 7,560,742 831,670 2,695,688 20,777,120 --------------------------------------------------------------------------------------------------------------------------------- Investment in equity 993,789 181,226 - 64,171 1,239,186 method investees --------------------------------------------------------------------------------------------------------------------------------- Expenditures for segment 459,390 238,155 20,371 26,060 743,976 assets ---------------------------------------------------------------------------------------------------------------------------------
Semi-annual consolidated financial statement data on non-financial services business and financial services business --------------------------------------------------------------------------- Toyota is preparing certain financial statement data relating to the segmentation of Toyota's non-financial services and financial services businesses. This financial statement data includes semi-annual balance sheet at September 30, 2003, semi-annual statement of income for the six month period ended September 30, 2003 and semi-annual statement of cash flows for the six month period ended September 30, 2003. -67- - -------------------------------------------------------------------------------- FY2004 semi-annual September 30, 2003 - -------------------------------------------------------------------------------- (a) Semi-annual consolidated balance sheet on non-financial services business and financial services business
-------------------------------------------------------------------------------------------------------------------------------- Item Yen in millions Percentage -------------------------------------------------------------------------------------------------------------------------------- (Assets) (Non-Financial Services Business) 1 Current assets 1 Cash and cash equivalents 1,119,422 2 Time deposits 17,014 3 Marketable securities 780,942 4 Trade accounts and notes receivable, less allowance for 1,318,935 doubtful accounts 5 Finance receivables, net 14,678 6 Inventories 1,059,824 7 Prepaid expenses and other current assets 1,495,026 --------------------------------------------- Total current assets 5,805,841 27.9 2 Noncurrent finance receivables, net 13,319 0.1 3 Investments and other assets 3,915,763 18.8 4 Property, plant and equipment 4,383,157 21.1 --------------------------------------------- Total assets 14,118,080 67.9 --------------------------------------------- (Financial Services Business) 1 Current assets 1 Cash and cash equivalents 123,789 2 Time deposits 26,072 3 Marketable securities 6,773 4 Finance receivables, net 2,227,549 5 Prepaid expenses and other current assets 600,411 --------------------------------------------- Total current assets 2,984,594 14.4 2 Noncurrent finance receivables, net 3,013,295 14.5 3 Investments and other assets 545,450 2.6 4 Property, plant and equipment 1,017,403 4.9 --------------------------------------------- Total assets 7,560,742 36.4 (Elimination) Elimination of assets (901,702) (4.3) (Consolidated) --------------------------------------------- Total assets 20,777,120 100.0 --------------------------------------------- --------------------------------------------------------------------------------------------------------------------------------
-68- - -------------------------------------------------------------------------------- FY2004 semi-annual September 30, 2003 - --------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------- Item Yen in millions Percentage ------------------------------------------------------------------------------------------------------------------------------- (Liabilities) (Non-Financial Services Business) 1 Current liabilities 1 Short-term borrowings 822,072 2 Current portion of long-term debt 69,438 3 Accounts payable 1,552,185 4 Accrued expenses 1,008,779 5 Income taxes payable 260,128 6 Other current liabilities 914,782 --------------------------------------------- Total current liabilities 4,627,384 22.2 2 Long-term liabilities 1 Long-term debt 774,022 2 Accrued pension and severance costs 1,111,749 3 Other long-term liabilities 269,617 --------------------------------------------- Total long-term liabilities 2,155,388 10.4 --------------------------------------------- Total liabilities 6,782,772 32.6 (Financial Services Business) 1 Current liabilities 1 Short-term borrowings 1,783,862 2 Current portion of long-term debt 1,129,859 3 Accounts payable 12,083 4 Accrued expenses 49,302 5 Income taxes payable 7,116 6 Other current liabilities 170,337 --------------------------------------------- Total current liabilities 3,152,559 15.2 2 Long-term liabilities 1 Long-term debt 3,531,045 2 Accrued pension and severance costs 1,151 3 Other long-term liabilities 211,926 --------------------------------------------- Total long-term liabilities 3,744,122 18.0 --------------------------------------------- Total liabilities 6,896,681 33.2 (Elimination) Elimination of liabilities (902,340) (4.3) --------------------------------------------- (Consolidated) Total liabilities 12,777,113 61.5 (Minority interest in consolidated subsidiaries) (Consolidated) Minority interest in consolidated subsidiaries 427,533 2.1 (Shareholders' equity) --------------------------------------------- (Consolidated) Total shareholder's equity 7,572,474 36.4 --------------------------------------------- (Consolidated) Total liabilities, minority interest in consolidated subsidiaries and shareholders' equity 20,777,120 100.0 --------------------------------------------- -------------------------------------------------------------------------------------------------------------------------------
(Note) Segment assets in the non-financial services business include unallocated corporate assets. -69- - -------------------------------------------------------------------------------- FY2004 semi-annual April 1, 2003 through September 30, 2003 - -------------------------------------------------------------------------------- (b) Semi-annual consolidated statement of income on non-financial services business and financial services business
------------------------------------------------------------------------------------------------------------------------------- Item Yen in millions Percentage ------------------------------------------------------------------------------------------------------------------------------- (Non-Financial Services Business) 1 Net revenues 7,867,021 100.0 2 Costs and expenses 7,156,401 91.0 1 Cost of revenues 6,275,627 2 Selling, general and administrative 880,774 ------------------------------ Operating income 710,620 9.0 3 Other income, net 44,272 0.6 ------------------------------ Income before income taxes, minority interest and 754,892 9.6 equity in earnings of affiliated companies Provision for income taxes 285,959 3.6 ------------------------------ Income before minority interest and equity 468,933 6.0 in earnings of affiliated companies ------------------------------ Minority interest in consolidated subsidiaries (18,150) (0.3) Equity in earnings of affiliated companies 37,413 0.5 ------------------------------ Net income 488,196 6.2 (Financial Services Business) 1 Net revenues 371,460 100.0 2 Costs and expenses 309,779 83.4 1 Cost of revenues 192,157 2 Selling, general and administrative 117,622 ------------------------------ Operating income 61,681 16.6 3 Other expenses, net (4,689) (1.3) ------------------------------ Income before income taxes, minority interest and 56,992 15.3 equity in earnings of affiliated companies Provision for income taxes 23,840 6.4 ------------------------------ Income before minority interest and equity 33,152 8.9 in earnings of affiliated companies ------------------------------ Minority interest in consolidated subsidiaries (465) (0.1) Equity in earnings of affiliated companies 3,580 1.0 ------------------------------ Net income 36,267 9.8 (Elimination) Elimination of net income (3) - (Consolidated) ------------------------------ Net income 524,460 - ------------------------------ -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- -70- - -------------------------------------------------------------------------------- FY2004 semi-annual April 1, 2003 through September 30, 2003 - -------------------------------------------------------------------------------- (c) Semi-annual consolidated statement of cash flows on non-financial services business and financial services business
------------------------------------------------------------------------------------------------------------ Item Yen in millions ------------------------------------------------------------------------------------------------------------ (Non-Financial Services Business) 1 Cash flows from operating activities 1 Net income 488,196 2 Adjustments to reconcile net income to net cash provided by operating activities (1) Depreciation 378,445 (2) Pension and severance costs, less payments 34,000 (3) Loss on disposal of fixed assets 18,423 (4) Unrealized losses on available-for-sale securities, net 2,697 (5) Deferred income taxes 6,831 (6) Minority interest in consolidated subsidiaries 18,150 (7) Equity in earnings of affiliated companies (37,413) (8) Changes in operating assets and liabilities 21,737 (9) Other (66,198) ------------------------------------------------------------------------------------------------------------ Net cash provided by operating activities 864,868 ------------------------------------------------------------------------------------------------------------ 2 Cash flows from investing activities 1 Additions to fixed assets excluding equipment leased to others (433,924) 2 Additions to equipment leased to others (71,897) 3 Proceeds from sales of fixed assets excluding equipment leased to others 25,888 4 Proceeds from sales of equipment leased to others 24,840 5 Purchases of marketable securities and security investments (968,766) 6 Proceeds from sales of and maturity of marketable securities and security investments 582,102 7 Decrease in time deposits 15,856 8 Increase in investments and other assets (15,431) 9 Payments for additional investments in affiliated companies, net of cash acquired (18,876) 10 Other (3,595) ------------------------------------------------------------------------------------------------------------ Net cash used in investing activities (863,803) ------------------------------------------------------------------------------------------------------------ 3 Cash flows from financing activities 1 Purchases of common stock (120,229) 2 Proceeds from issuance of long-term debt 32,088 3 Payments of long-term debt (111,290) 4 Decrease in short-term borrowings (4,387) 5 Dividends paid (69,782) 6 Other (15,000) ------------------------------------------------------------------------------------------------------------ Net cash used in financing activities (288,600) ------------------------------------------------------------------------------------------------------------ 4 Effect of exchange rate changes on cash and cash equivalents (30,774) ------------------------------------------------------------------------------------------------------------ 5 Net decrease in cash and cash equivalents (318,309) ------------------------------------------------------------------------------------------------------------ 6 Cash and cash equivalents at beginning of period 1,437,731 ------------------------------------------------------------------------------------------------------------ 7 Cash and cash equivalents at end of period 1,119,422 --------------------------------------- ------------------------------------------------------------------------------------------------------------
-71- - -------------------------------------------------------------------------------- FY2004 semi-annual April 1, 2003 through September 30, 2003 - --------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------ Item Yen in millions ------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------ (Financial Services Business) 1 Cash flows from operating activities 1 Net income 36,267 2 Adjustments to reconcile net income to net cash provided by operating activities (1) Depreciation 97,493 (2) Deferred income taxes 15,033 (3) Minority interest in consolidated subsidiaries 465 (4) Equity in earnings of affiliated companies (3,580) (5) Changes in operating assets and liabilities (43,735) (6) Other 44,259 ------------------------------------------------------------------------------------------------------------ Net cash provided by operating activities 146,202 ------------------------------------------------------------------------------------------------------------ 2 Cash flows from investing activities 1 Additions to finance receivables (4,182,349) 2 Collection of and proceeds from sales of finance receivables 3,727,776 3 Additions to fixed assets excluding equipment leased to others (11,598) 4 Additions to equipment leased to others (226,557) 5 Proceeds from sales of fixed assets excluding equipment leased to leased to others 5,346 6 Proceeds from sales of equipment leased to others 108,233 7 Purchases of marketable securities and security investments (169,097) 8 Proceeds from sales of and maturity of marketable securities and security investments 123,512 9 Increase in time deposits (11) 10 Other (19,270) ------------------------------------------------------------------------------------------------------------ Net cash used in investing activities (644,015) ------------------------------------------------------------------------------------------------------------ 3 Cash flows from financing activities 1 Proceeds from issuance of long-term debt 706,040 2 Payments of long-term debt (546,392) 3 Increase in short-term borrowings 299,919 4 Other 15,000 ------------------------------------------------------------------------------------------------------------ Net cash provided by financing activities 474,567 ------------------------------------------------------------------------------------------------------------ 4 Effect of exchange rate changes on cash and cash equivalents (7,262) ------------------------------------------------------------------------------------------------------------ 5 Net decrease in cash and cash equivalents (30,508) ------------------------------------------------------------------------------------------------------------ 6 Cash and cash equivalents at beginning of period 154,297 ------------------------------------------------------------------------------------------------------------ 7 Cash and cash equivalents at end of period 123,789 --------------------------------------- ------------------------------------------------------------------------------------------------------------ (Consolidated) 1 Effect of exchange rate changes on cash and cash equivalents (38,036) ------------------------------------------------------------------------------------------------------------ 2 Net decrease in cash and cash equivalents (348,817) ------------------------------------------------------------------------------------------------------------ 3 Cash and cash equivalents at beginning of period 1,592,028 ------------------------------------------------------------------------------------------------------------ 4 Cash and cash equivalents at end of period 1,243,211 --------------------------------------- ------------------------------------------------------------------------------------------------------------
-72- - -------------------------------------------------------------------------------- FY2004 semi-annual April 1, 2003 through September 30, 2003 - -------------------------------------------------------------------------------- (Geographic information)
------------------------------------------------------------------------------------------------------------------------------- Intersegment Other Foreign Elimination/ Consolidated Japan North America Europe Countries Unallocated Total (Yen in (Yen in (Yen in (Yen in Amount (Yen in millions) (millions) millions) millions) (Yen in millions) millions) ------------------------------------------------------------------------------------------------------------------------------- Net revenues (1) Sales to external customers 3,325,570 2,896,155 977,630 1,024,886 - 8,224,241 (2) Intersegment 2,171,720 117,912 54,645 77,931 ( 2,422,208) - sales ------------------------------------------------------------------------------------------------------------------------------- Total 5,497,290 3,014,067 1,032,275 1,102,817 ( 2,422,208) 8,224,241 ------------------------------------------------------------------------------------------------------------------------------- Operating income 529,742 163,616 22,474 53,293 ( 1,356) 767,769 ------------------------------------------------------------------------------------------------------------------------------- Segment assets 9,796,611 6,037,536 1,616,800 1,309,265 2,016,908 20,777,120 ------------------------------------------------------------------------------------------------------------------------------- Long-lived assets 3,016,108 1,633,045 424,368 327,039 - 5,400,560 -------------------------------------------------------------------------------------------------------------------------------
Revenues are attributed to geographies based on the country location of the parent company or the subsidiary that transacted the sale with the external customer. There are no any individually material countries with respect to revenues and long-lived assets included in other foreign countries. Transfers between industry or geographic segments are made at amounts which Toyota's management believes arm's-length prices. In measuring the reportable segments' income or losses, operating income consists of sales and operating revenue less costs and operating expenses. Unallocated assets consist primarily of cash and cash equivalents and marketable securities maintained for general corporate purposes. (Overseas Sales) The following information shows revenues that are attributed to countries based on location of customers for the six month period ended September 30, 2003. In addition to the disclosure required by FAS No. 131, Toyota discloses the supplemental information in order to provide Japanese readers with valuable information.
----------------------------------------------------------------------------------------------------- North America Europe Other Foreign Total Countries ----------------------------------------------------------------------------------------------------- 1 Overseas sales 3,013,321 944,563 1,601,666 5,559,550 (Yen in millions) ----------------------------------------------------------------------------------------------------- 2 Consolidated sales 8,224,241 (Yen in millions) ----------------------------------------------------------------------------------------------------- 3 Ratio of overseas sales to 36.6 11.5 19.5 67.6 consolidated sales (%) -----------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- -73- - -------------------------------------------------------------------------------- FY2004 semi-annual April 1, 2003 through September 30, 2003 - -------------------------------------------------------------------------------- 10 Per share information The following table shows net assets per common share as of September 30, 2003. -------------------- September 30, 2003 -------------------- Net assets per common share 2,228.52 Yen 11 Subsequent events (1) On September 1, 2003, the employee pension fund of the parent company received an approval from the Minister of Health, Labor and Welfare for transition to the corporate defined benefit pension plan. On December 22, 2003, as required by the article 112-5 of the Defined Benefit Enterprise Pension Plan Law, the parent company contributed 115,294 million yen in cash, equivalent to the difference between the minimum funding amount required by the Law and the amount of net assets of the employee pension fund as at its dissolution. This contribution did not have any impact on Toyota's consolidated income statement. (2) At the meeting on November 5, 2003, the Board of Directors of the parent company approved to repurchase treasury stock from the market, based on the resolution of the Ordinary Shareholders' Meeting held on June 26, 2003, in order to improve its capital efficiency and implement its capital policy flexibly in response to the business environment. During the repurchasing periods, which were November 27, 2003 and from December 2, 2003 to December 15, 2003, the parent company repurchased 40,000 thousand shares of its common stock amounting to 132,203 million yen. - -------------------------------------------------------------------------------- -74- (2) Other (U.S. GAAP Financial Information) (The accompanying financial information as of and for the six month period ended September 30, 2002 and for the year ended March 31, 2003, in conformity with U.S. GAAP, has not been audited with the auditing standards which is required by the article 193-2 of the Securities and Exchange Law.) 1 Semi-annual consolidated balance sheets
- -------------------------------------------------------------------------------------------------------------------- FY2003 semi-annual FY2003 September 30, 2002 March 31, 2003 - -------------------------------------------------------------------------------------------------------------------- Item Yen in millions Percentage Yen in millions Percentage - -------------------------------------------------------------------------------------------------------------------- (Assets) 1 Current assets 1 Cash and cash equivalents 1,870,153 1,592,028 2 Time deposits 32,324 55,406 3 Marketable securities 561,783 605,483 4 Trade accounts and notes receivable, less allowance for doubtful accounts of 24,398 million yen as of 1,221,335 1,475,797 September 30, 2002 and 29,489 million yen as of March 31, 2003 5 Finance receivables, net 2,187,518 2,505,140 6 Other receivables 518,999 513,952 7 Inventories 927,040 1,025,838 8 Deferred income taxes 441,378 385,148 9 Prepaid expenses and other current 442,270 463,441 assets --------------- --------------- Total current assets 8,202,800 42.0 8,622,233 42.8 2 Noncurrent finance receivables, net 2,708,898 13.9 2,569,808 12.8 3 Investments and other assets 1 Marketable securities and other 1,555,701 1,652,110 securities investments 2 Affiliated companies 1,314,640 1,279,645 3 Employees receivables 15,276 21,270 4 Other 622,373 804,029 --------------- --------------- Total investments and other assets 3,507,990 18.0 3,757,054 18.6 4 Property, plant and equipment 1 Land 1,045,286 1,064,125 2 Buildings 2,445,338 2,521,208 3 Machinery and equipment 7,014,789 7,089,592 4 Vehicles and equipment on operating 1,419,989 1,601,060 leases 5 Construction in progress 240,200 211,584 --------------- --------------- Sub total 12,165,602 12,487,569 6 Less - Accumulated depreciation (7,060,763) (7,283,690) --------------- --------------- Total property, plant and equipment 5,104,839 26.1 5,203,879 25.8 --------------- --------------- Total assets 19,524,527 100.0 20,152,974 100.0 --------------- --------------- - --------------------------------------------------------------------------------------------------------------------
-75-
- -------------------------------------------------------------------------------------------------------------------- FY2003 semi-annual FY2003 September 30, 2002 March 31, 2003 - -------------------------------------------------------------------------------------------------------------------- Item Yen in millions Percentage Yen in millions Percentage - -------------------------------------------------------------------------------------------------------------------- (Liabilities) 1 Current liabilities 1 Short-term borrowings 1,878,992 1,855,648 2 Current portion of long-term debt 1,192,895 1,263,017 3 Accounts payable 1,377,863 1,531,552 4 Other payables 541,683 618,748 5 Accrued expenses 941,825 1,063,496 6 Income taxes payable 296,015 300,718 7 Other current liabilities 439,507 420,757 --------------- --------------- Total current liabilities 6,668,780 34.2 7,053,936 35.0 2 Long-term liabilities 1 Long-term debt 3,798,192 4,137,528 2 Accrued pension and severance costs 727,057 1,052,687 3 Deferred income taxes 496,531 371,004 4 Other long-term liabilities 104,437 101,353 --------------- --------------- Total long-term liabilities 5,126,217 26.2 5,662,572 28.1 --------------- --------------- Total liabilities 11,794,997 60.4 12,716,508 63.1 (Minority interest in consolidated subsidiaries) Minority interest in consolidated 345,038 1.8 315,466 1.6 subsidiaries (Shareholders' equity) 1 Common stock, no par value, authorized: 9,740,185,400 shares at September 30, 2002 9,740,185,400 shares at March 31, 2003; issued: 397,050 2.0 397,050 2.0 3,609,997,492 shares at September 30, 2002 and 3,609,997,492 shares at March 31, 2003 2 Additional paid-in capital 491,158 2.5 493,790 2.4 3 Retained earnings 7,033,122 36.0 7,301,795 36.2 4 Accumulated other comprehensive loss (356,412) (1.8) (604,272) (3.0) 5 Treasury stock, at cost 62,014,597 shares and at September 30, 2003 (180,426) (0.9) (467,363) (2.3) 158,940,796 shares at March 31, 2003 --------------- --------------- Total shareholders' equity 7,384,492 37.8 7,121,000 35.3 (Commitments and contingencies) Total liabilities, minority interest in --------------- --------------- consolidated subsidiaries and 19,524,527 100.0 20,152,974 100.0 shareholders' equity --------------- --------------- - --------------------------------------------------------------------------------------------------------------------
-76- 2 Semi-annual consolidated statements of income
- -------------------------------------------------------------------------------------------------------------------- FY2003 semi-annual FY2003 April 1, 2002 through April 1, 2002 through September 30, 2002 March 31, 2003 - -------------------------------------------------------------------------------------------------------------------- Item Yen in millions Percentage Yen in millions Percentage - -------------------------------------------------------------------------------------------------------------------- 1 Net revenues 1 Sales of products 7,270,735 14,793,973 2 Financing operations 342,687 707,580 ---------------------------- ----------------------------- Total net revenues 7,613,422 100.0 15,501,553 100.0 2 Costs and expenses 1 Cost of products sold 5,792,840 11,914,245 2 Cost of financing operations 227,292 423,885 3 Selling, general and administrative 908,267 1,891,777 ---------------------------- ----------------------------- Total costs and expenses 6,928,399 91.0 14,229,907 91.8 ---------------------------- ----------------------------- Operating income 685,023 9.0 1,271,646 8.2 3 Other income (expense) 1 Interest and dividend income 29,892 52,661 2 Interest expense (15,464) (30,467) 3 Foreign exchange gain, net 21,033 35,585 4 Other loss, net (6,023) (102,773) ---------------------------- ----------------------------- Total other income (expense) 29,438 0.4 (44,994) (0.3) ---------------------------- ----------------------------- Income before income taxes, minority 714,461 9.4 1,226,652 7.9 interest and equity in earnings of affiliated companies Provision for income taxes 296,920 3.9 517,014 3.3 ---------------------------- ----------------------------- Income before minority interest and 417,541 5.5 709,638 4.6 equity in earnings of affiliated companies ---------------------------- ----------------------------- Minority interest in consolidated (9,528) (0.1) (11,531) (0.1) subsidiaries Equity in earnings of affiliated 17,787 0.2 52,835 0.3 companies ---------------------------- ----------------------------- Net income 425,800 5.6 750,942 4.8 ---------------------------- ----------------------------- - -------------------------------------------------------------------------------------------------------------------- (Yen) - -------------------------------------------------------------------------------------------------------------------- Net income per common share Basic 118.44 211.32 Diluted 118.44 211.32 Cash dividends per common share applicable to earnings for the period (year) 16.00 36.00 - --------------------------------------------------------------------------------------------------------------------
-77- 3 Semi-annual consolidated statements of shareholders' equity
- -------------------------------------------------------------------------------------------------------------------- FY2003 semi-annual April 1, 2002 through September 30, 2002 - -------------------------------------------------------------------------------------------------------------------- Accumulated Common Additional Retained other Treasury Item stock paid-in earnings comprehensive stock, Total capital income (loss) at cost - -------------------------------------------------------------------------------------------------------------------- Yen in millions - -------------------------------------------------------------------------------------------------------------------- Balance at March 31, 2002 397,050 490,538 6,804,722 (267,304) (160,894) 7,264,112 ------------------------------------------------------------------------------------- 1 Issuance during the period 620 620 2 Comprehensive income (1) Net income 425,800 425,800 (2) Other comprehensive income (loss) 1 Foreign currency translation (107,889) (107,889) adjustments 2 Unrealized gains on securities, net of reclassification 10,182 10,182 adjustments 3 Minimum pension liability 9,141 9,141 adjustments 4 Net losses on derivative instruments (542) (542) --------------- Total comprehensive income 336,692 --------------- 3 Dividends paid (54,108) (54,108) 4 Purchase and retirement of (143,292) (19,532) (162,824) common stock ------------------------------------------------------------------------------------- Balance at September 30, 2002 397,050 491,158 7,033,122 (356,412) (180,426) 7,384,492 ------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------- FY2003 ------ April 1, 2002 through September 30, 2002 - -------------------------------------------------------------------------------------------------------------------- Accumulated Common Additional Retained other Treasury Item stock paid-in earnings comprehensive stock, Total capital income (loss) at cost - -------------------------------------------------------------------------------------------------------------------- Yen in millions - -------------------------------------------------------------------------------------------------------------------- Balance at March 31, 2002 397,050 490,538 6,804,722 (267,304) (160,894) 7,264,112 ------------------------------------------------------------------------------------- 1 Issuance during the year 3,252 3,252 2 Comprehensive income (1) Net income 750,942 750,942 (2) Other comprehensive income (loss) 1 Foreign currency translation (139,285) (139,285) adjustments 2 Unrealized losses on securities, net of reclassification (26,495) (26,495) adjustments 3 Minimum pension liability (171,978) (171,978) adjustments 4 Net income on derivative instruments 790 790 --------------- Total comprehensive income 413,974 --------------- 3 Dividends paid (110,876) (110,876) 4 Purchase and retirement of (142,993) (306,469) (449,462) common stock ------------------------------------------------------------------------------------- Balance at March 31, 2003 397,050 493,790 7,301,795 (604,272) (467,363) 7,121,000 ------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------
-78- 4 Semi-annual consolidated statement of cash flows
- -------------------------------------------------------------------------------------------------------------------- FY2003 semi-annual FY2003 April 1, 2002 through April 1, 2002 through September 30, 2002 March 31, 2003 - -------------------------------------------------------------------------------------------------------------------- Item Yen in millions Yen in millions - -------------------------------------------------------------------------------------------------------------------- 1 Cash flows from operating activities 1 Net income 425,800 750,942 2 Adjustments to reconcile net income to net cash provided by operating activities (1) Depreciation 434,995 870,636 (2) Provision for doubtful accounts and credit losses 19,709 99,837 (3) Pension and severance costs, less payments 30,315 55,637 (4) Loss on disposal of fixed assets 23,880 46,492 (5) Unrealized losses on available-for-sale securities, net 23,853 111,346 (6) Deferred income taxes (24,067) (74,273) (7) Minority interest in consolidated subsidiaries 9,528 11,531 (8) Equity in earnings of affiliated companies (17,787) (52,835) (9) Changes in operating assets and liabilities 134,014 129,054 (10) Other 50,698 136,680 - -------------------------------------------------------------------------------------------------------------------- Net cash provided by operating activities 1,110,938 2,085,047 - -------------------------------------------------------------------------------------------------------------------- 2 Cash flows from investing activities 1 Additions to finance receivables (2,474,800) (6,481,200) 2 Collection of and proceeds from sales of finance receivables 1,938,368 5,825,456 3 Additions to fixed assets excluding equipment leased to others (519,108) (1,005,931) 4 Additions to equipment leased to others (289,594) (604,298) 5 Proceeds from sales of fixed assets excluding equipment 31,606 61,847 leased to others 6 Proceeds from sales of equipment leased to others 125,919 286,538 7 Purchases of marketable securities and security investments (521,364) (1,113,998) 8 Proceeds from sales of and maturity of marketable securities 569,846 921,965 and security investments 9 Increase in time deposits (12,085) (33,379) 10 (Increase) decrease in investments and other assets 7,527 (30,481) 11 Payments for additional investments in affiliated companies (16,016) (28,229) net of cash acquired 12 Other 20,652 55,303 - -------------------------------------------------------------------------------------------------------------------- Net cash used in investing activities (1,139,049) (2,146,407) - -------------------------------------------------------------------------------------------------------------------- 3 Cash flows from financing activities 1 Purchases of common stock (142,090) (454,611) 2 Proceeds from issuance of long-term debt 907,482 1,686,564 3 Payments of long-term debt (561,651) (1,117,803) 4 Increase in short-term borrowings 132,004 30,327 5 Dividends paid (54,108) (110,876) 6 Other - 4,074 - -------------------------------------------------------------------------------------------------------------------- Net cash provided by financing activities 281,637 37,675 - -------------------------------------------------------------------------------------------------------------------- 4 Effect of exchange rate changes on cash and cash equivalents (40,533) (41,447) - -------------------------------------------------------------------------------------------------------------------- 5 Net increase (decrease) in cash and cash equivalents 212,993 (65,132) - -------------------------------------------------------------------------------------------------------------------- 6 Cash and cash equivalents at beginning of period 1,657,160 1,657,160 - -------------------------------------------------------------------------------------------------------------------- 7 Cash and cash equivalents at end of period 1,870,153 1,592,028 ------------------------------------------------------ - --------------------------------------------------------------------------------------------------------------------
-79- EX-6 8 ex6_121903.txt CONSOLIDATED FINANCIAL STATEMENTS TOYOTA MOTOR CORPORATION CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2003 -80- TOYOTA MOTOR CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited) ASSETS
U.S. dollars in millions Yen in millions (Note 4) ------------------------------------ -------------------- March 31, September 30, September 30, 2003 2003 2003 ------------------ ----------------- -------------------- Current assets: Cash and cash equivalents (Y) 1,592,028 (Y) 1,243,211 $ 11,175 Time deposits 55,406 43,086 387 Marketable securities (Note 5) 605,483 787,715 7,081 Trade accounts and notes receivable, less allowance for doubtful accounts of(Y)29,489 million as of March 31, 2003 and(Y)34,480 million ($310 million) as of September 30, 2003 1,475,797 1,290,688 11,602 Finance receivables, net 2,505,140 2,242,227 20,155 Other receivables 513,952 471,139 4,235 Inventories 1,025,838 1,059,824 9,526 Deferred income taxes 385,148 400,218 3,597 Prepaid expenses and other current assets 463,441 566,475 5,092 ----------------- ----------------- ------------------- Total current assets 8,622,233 8,104,583 72,850 ----------------- ----------------- ------------------- Noncurrent finance receivables, net 2,569,808 3,026,614 27,206 ----------------- ----------------- ------------------- Investments and other assets: Marketable securities and other securities investments (Note 5) 1,652,110 2,269,829 20,403 Affiliated companies 1,279,645 1,245,596 11,197 Employees receivables 21,270 26,023 234 Other 804,029 703,915 6,327 ----------------- ----------------- ------------------- 3,757,054 4,245,363 38,161 ----------------- ----------------- ------------------- Property, plant and equipment: Land 1,064,125 1,134,538 10,198 Buildings 2,521,208 2,775,775 24,951 Machinery and equipment 7,089,592 7,652,074 68,782 Vehicles and equipment on operating leases (Note 6) 1,601,060 1,556,037 13,987 Construction in progress 211,584 195,355 1,756 ----------------- ----------------- ------------------- 12,487,569 13,313,779 119,674 Less - Accumulated depreciation (7,283,690) (7,913,219) (71,130) ----------------- ----------------- ------------------- 5,203,879 5,400,560 48,544 ----------------- ----------------- ------------------- Total assets (Y)20,152,974 (Y)20,777,120 $ 186,761 ================= ================= ===================
The accompanying notes are an integral part of these statements. -81- TOYOTA MOTOR CORPORATION CONSOLIDATED BALANCE SHEETS(CONTINUED) (Unaudited) LIABILITIES AND SHAREHOLDERS' EQUITY
U.S. dollars in millions Yen in millions (Note 4) ------------------------------------ -------------------- March 31, September 30, September 30, 2003 2003 2003 ------------------ ----------------- -------------------- Current liabilities: Short-term borrowings (Y) 1,855,648 (Y) 1,999,453 $ 17,973 Current portion of long-term debt 1,263,017 1,135,297 10,205 Accounts payable 1,531,552 1,563,774 14,057 Other payables 618,748 633,646 5,696 Accrued expenses 1,063,496 1,054,127 9,475 Income taxes payable 300,718 267,244 2,402 Other current liabilities 420,757 420,324 3,778 ------------------ ----------------- -------------------- Total current liabilities 7,053,936 7,073,865 63,586 ------------------ ----------------- -------------------- Long-term liabilities: Long-term debt 4,137,528 4,108,804 36,933 Accrued pension and severance costs 1,052,687 1,112,900 10,004 Deferred income taxes 371,004 413,455 3,716 Other long-term liabilities 101,353 68,089 612 ------------------ ----------------- -------------------- Total long-term liabilities 5,662,572 5,703,248 51,265 ------------------ ----------------- -------------------- Minority interest in consolidated subsidiaries 315,466 427,533 3,843 ------------------ ----------------- -------------------- Shareholders' equity: Common stock, no par value, authorized: 9,740,185,400 shares at March 31, 2003 and 9,740,185,400 shares at September 30, 2003; issued: 3,609,997,492 shares at March 31, 2003 and 3,609,997,492 shares at September 30, 2003 397,050 397,050 3,569 Additional paid-in capital 493,790 493,790 4,439 Retained earnings 7,301,795 7,756,473 69,721 Accumulated other comprehensive loss (604,272) (476,553) (4,284) Treasury stock, at cost 158,940,796 shares at March 31, 2003 and 212,015,180 shares at September 30, 2003 (467,363) (598,286) (5,378) ------------------ ----------------- -------------------- Total shareholders' equity 7,121,000 7,572,474 68,067 ------------------ ----------------- -------------------- Commitments and contingencies (Note 9) Total liabilities and shareholders' equity (Y)20,152,974 (Y)20,777,120 $ 186,761 ================== ================= =====================
The accompanying notes are an integral part of these statements. -82- TOYOTA MOTOR CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
U.S. dollars in millions Yen in millions (Note 4) ---------------------------------------- -------------------- For the six month For the six month periods ended period ended September 30, September 30, 2002 2003 2003 ------------------ -------------------- -------------------- Net revenues: Sales of products (Y) 7,270,735 (Y) 7,861,781 $ 70,668 Financing operations 342,687 362,460 3,258 ------------------ -------------------- -------------------- 7,613,422 8,224,241 73,926 ------------------ -------------------- -------------------- Costs and expenses: Cost of products sold 5,792,840 6,274,364 56,399 Cost of financing operations (Note 8) 227,292 191,361 1,720 Selling, general and administrative 908,267 990,747 8,906 ------------------ -------------------- -------------------- 6,928,399 7,456,472 67,025 ------------------ -------------------- -------------------- Operating income 685,023 767,769 6,901 ------------------ -------------------- -------------------- Other income (expense): Interest and dividend income 29,892 28,779 259 Interest expense (15,464) (12,210) (110) Foreign exchange gain, net (Note 8) 21,033 26,597 239 Other income (loss), net (6,023) 1,078 10 ------------------ -------------------- -------------------- 29,438 44,244 398 ------------------ -------------------- -------------------- Income before income taxes, minority interest and equity in earnings of affiliated companies 714,461 812,013 7,299 Provision for income taxes 296,920 309,931 2,786 ------------------ -------------------- -------------------- Income before minority interest and equity in earnings of affiliated companies 417,541 502,082 4,513 Minority interest in consolidated subsidiaries (9,528) (18,615) (167) Equity in earnings of affiliated companies 17,787 40,993 368 ------------------ -------------------- -------------------- Net income (Y) 425,800 (Y) 524,460 $ 4,714 ================== ==================== ==================== U.S. dollars Yen (Note 4) Net income per common share: ---------------------------------------- -------------------- Basic (Y) 118.44 (Y) 153.36 $ 1.38 Diluted (Y) 118.44 (Y) 153.35 $ 1.38 Interim cash dividends per common share (Y) 16.00 (Y) 20.00 $ 0.18
The accompanying notes are an integral part of these statements. -83- TOYOTA MOTOR CORPORATION CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited)
Yen in millions ------------------------------------------------------------------------------------- Accumulated Additional other Treasury Common paid-in Retained comprehensive stock, stock capital earnings income (loss) at cost Total ------------ ------------- ------------- ---------------- ------------- ------------- Balance at March 31, 2002 397,050 490,538 6,804,722 (267,304) (160,894) 7,264,112 ------------ -------------------------------------------- ------------- ------------- Issuance during the period 620 620 Comprehensive income: Net income 425,800 425,800 Other comprehensive income (loss) - Foreign currency translation adjustments (107,889) (107,889) Unrealized gains (losses) on securities, net of reclassification adjustments 10,182 10,182 Minimum pension liability adjustments 9,141 9,141 Net gains (losses) on derivative instruments (542) (542) ------------- Total comprehensive income 336,692 ------------- Dividends paid (54,108) (54,108) Purchase and retirement of common stock (143,292) (19,532) (162,824) ----------- ----------- ------------- ------------- ------------- ------------- Balance at September 30, 2002 (Y) 397,050 (Y) 491,158 (Y) 7,033,122 (Y) (356,412) (Y) (180,426)(Y)7,384,492 Balance at March 31, 2003 397,050 493,790 7,301,795 (604,272) (467,363) 7,121,000 ------------ -------------------------------------------- ------------- ------------- Comprehensive income: Net income 524,460 524,460 Other comprehensive income (loss) - Foreign currency translation adjustments (112,479) (112,479) Unrealized gains (losses) on securities, net of reclassification adjustments 228,270 228,270 Minimum pension liability adjustments 11,928 11,928 ------------- Total comprehensive income 652,179 ------------- Dividends paid (69,782) (69,782) Purchase and retirement of common stock (130,923) (130,923) ----------- ----------- ------------- ------------- ------------- ------------- Balance at September 30, 2003 (Y) 397,050 (Y) 493,790 (Y) 7,756,473 (Y) (476,553) (Y) (598,286)(Y)7,572,474 =========== ========== ============= ============= ============= =============
The accompanying notes are an integral part of these statements. -84- TOYOTA MOTOR CORPORATION CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (CONTINUED) (Unaudited)
U.S.dollars in millions (Note 4) ------------------------------------------------------------------------------------ Accumulated Additional other Treasury Common paid-in Retained comprehensive stock, stock capital earnings income (loss) at cost Total ------------ ------------ ------------ ------------------- ------------- ----------- Balance at March 31, 2003 $ 3,569 $ 4,439 $ 65,634 $ (5,432) $ (4,201) $ 64,009 ------------ ------------ ------------ ------------------- ------------- ----------- Comprehensive income: Net income 4,714 4,714 Other comprehensive income (loss) Foreign currency translation adjustments (1,011) (1,011) Unrealized gains (losses) on securities, net of reclassification adjustments 2,052 2,052 Minimum pension liability adjustments 107 107 Total comprehensive income 5,862 Dividends paid (627) (627) ------------ ------------ ------------ ------------------- ------------- ----------- Purchase and retirement of common stock (1,177) (1,177) Balance at September 30, 2003 $ 3,569 $ 4,439 $ 69,721 $ (4,284) $(5,378) $ 68,067 ============ =========== ============= =================== ============= ===========
The accompanying notes are an integral part of these statements. -85- TOYOTA MOTOR CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
U.S. dollars in millions Yen in millions (Note 4) ---------------------------------- -------------------- For the six month For the six month periods ended period ended September 30, September 30, ---------------------------------- 2002 2003 2003 ----------------- ---------------- -------------------- Cash flows from operating activities: Net income (Y) 425,800 (Y) 524,460 $ 4,714 Adjustments to reconcile net income to net cash provided by operating activities - Depreciation 434,995 475,938 4,278 Provision for doubtful accounts and credit losses 19,709 38,418 345 Pension and severance costs, less payments 30,315 33,957 305 Loss on disposal of fixed assets 23,880 18,896 170 Unrealized losses on available-for-sale securities, net 23,853 2,697 24 Deferred income taxes (24,067) 21,996 198 Minority interest in consolidated subsidiaries 9,528 18,615 167 Equity in earnings of affiliated companies (17,787) (40,993) (368) Changes in operating assets and liabilities 134,014 80,125 720 Other 50,698 (61,185) (549) ----------------- ---------------- -------------------- Net cash provided by operating activities 1,110,938 1,112,924 10,004 ----------------- ---------------- -------------------- Cash flows from investing activities: Additions to finance receivables (2,474,800) (4,182,349) (37,594) Collection of and proceeds from sales of finance receivables 1,938,368 3,727,776 33,508 Additions to fixed assets excluding equipment leased to others (519,108) (445,522) (4,005) Additions to equipment leased to others (289,594) (298,454) (2,683) Proceeds from sales of fixed assets excluding equipment leased 31,234 281 to others 31,606 Proceeds from sales of equipment leased to others 125,919 133,073 1,196 Purchases of marketable securities and security investments (521,364) (1,137,863) (10,228) Proceeds from sales of and maturity of marketable securities and security investments 569,846 705,614 6,343 (Increase) decrease in time deposits (12,085) 15,845 143 Decrease in investments and other assets 7,527 138 1 Payments for additional investments in affiliated companies, net of cash acquired (16,016) (18,876) (170) Other 20,652 (2,720) (24) ----------------- ---------------- -------------------- Net cash used in investing activities (1,139,049) (1,472,104) (13,232) ----------------- ---------------- -------------------- Cash flows from financing activities: Purchases of common stock (142,090) (120,229) (1,081) Proceeds from issuance of long-term debt 907,482 700,149 6,293 Payments of long-term debt (561,651) (622,709) (5,597) Increase in short-term borrowings 132,004 160,970 1,447 Dividends paid (54,108) (69,782) (627) ----------------- ---------------- -------------------- Net cash provided by financing activities 281,637 48,399 435 ----------------- ---------------- -------------------- Effect of exchange rate changes on cash and cash equivalents (40,533) (38,036) (342) ----------------- ---------------- -------------------- Net increase (decrease) in cash and cash equivalents 212,993 (348,817) (3,135) Cash and cash equivalents at beginning of period 1,657,160 1,592,028 14,310 ----------------- ---------------- -------------------- Cash and cash equivalents at end of period (Y) 1,870,153 (Y) 1,243,211 $ 11,175 ================ ================ ====================
The accompanying notes are an integral part of these statements. -86- TOYOTA MOTOR CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Basis of preparation: The accompanying semi-annual condensed consolidated financial statements of Toyota Motor Corporation as of September 30, 2003 and for the six month periods ended September 30, 2002 and 2003, respectively, have been prepared in accordance with accounting principles generally accepted in the United States of America and on substantially the same basis as Toyota's annual consolidated financial statements. The semi-annual condensed consolidated financial statements should be read in conjunction with Toyota's Annual Report on Form 20-F for the year ended March 31, 2003. The semi-annual condensed consolidated financial statements reflect all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the results for those periods and the financial condition at those dates. The consolidated results for six month periods are not necessarily indicative of results to be expected for the full year. 2. Nature of operations: Toyota Motor Corporation (the "parent company") and its subsidiaries (collectively "Toyota") are primarily engaged in the design, manufacture, assembly and sale of passenger cars, sport-utility vehicles, minivans, trucks and related parts and accessories throughout the world. In addition, Toyota provides retail and wholesale financing, retail leasing and certain other financial services primarily to its dealers and their customers related to vehicles manufactured by Toyota. 3. Summary of significant accounting policies: The parent company and its subsidiaries in Japan maintain their records and prepare their financial statements in accordance with accounting principles generally accepted in Japan, and its foreign subsidiaries in conformity with those of their countries of domicile. Certain adjustments and reclassifications have been incorporated in the accompanying consolidated financial statements to conform with accounting principles generally accepted in the United States of America. These adjustments were not recorded in the statutory books. Significant accounting policies after reflecting adjustments for the above are as follows: Basis of consolidation and accounting for investments in affiliated companies - - ----------------------------------------------------------------------------- The semi-annual condensed consolidated financial statements include the accounts of the parent company and those of its majority-owned subsidiary companies. All significant intercompany -87- transactions and accounts have been eliminated. Investments in affiliated companies in which Toyota exercises significant influence, but which it does not control, are stated at cost plus equity in undistributed earnings. Net income includes Toyota's equity in current earnings of such companies, after elimination of unrealized intercompany profits. Investments in which Toyota does not exercise significant influence (generally less than a 20% ownership interest) are stated at cost. Estimates - - --------- The preparation of Toyota's consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The more significant estimates include: product warranties, allowance for doubtful accounts and credit losses, residual values for leased assets, impairment of long-lived assets, postretirement benefits costs and obligations and post-employment benefit costs and other-than-temporary losses on marketable securities. Translation of foreign currencies - - --------------------------------- All asset and liability accounts of foreign subsidiaries and affiliates are translated into Japanese yen at appropriate period-end current rates and all income and expense accounts of those subsidiaries are translated at average-period exchange rates. The resulting translation adjustments are included as a component of accumulated other comprehensive income/loss. Foreign currency receivables and payables are translated at appropriate current rates and the resulting transaction gains or losses are taken into income currently. Revenue recognition - Revenue from sales of vehicles and parts is generally recognized upon delivery which is considered to have occurred when the dealer has taken title to the product and the risk and reward of ownership have been substantively transferred, except as described below. Toyota's sales incentive programs principally consist of cash payments to dealers calculated based on vehicle volume or a model sold by the dealer in a certain period of time. Toyota specifies those volume, model or period covered in the incentive programs. Toyota accrues these incentives as revenue reductions at the sale of a vehicle corresponding to the program by the amount determined in the related incentive program. Revenue from the sale of vehicles under which Toyota conditionally guarantees the minimum resale value is recognized on a pro rata basis from the date of sale to the first exercise date of the guarantee in a manner similar to lease accounting. The underlying vehicles of these transactions are recorded as assets and are depreciated in accordance with Toyota's depreciation policy. -88- Revenue from retail financing contracts and finance leases is recognized using the effective yield method. Revenue from operating leases is recognized on a straight-line basis over the lease term. Toyota on occasion sells finance receivables in transactions subject to limited recourse provisions. These sales are to trusts and Toyota retains the servicing and is paid a servicing fee. Gains or losses from the sales of the finance receivables are recognized in the period in which such sales occur. Other costs - - ----------- Advertising and sales promotion costs are expensed as incurred. Advertising costs were (Y)136,401 million and (Y)162,295 million ($1,459 million) for the six month periods ended September 30, 2002 and 2003, respectively. Toyota generally warrants its products against certain manufacturing and other defects. Provisions for product warranties are provided for specific periods of time and/or usage of the product and vary depending upon the nature of the product, the geographic location of its sale and other factors. Toyota provides a provision for estimated product warranty costs at the time the related sale is recognized based on estimates that Toyota will incur to repair or replace product parts that fail while still under warranty. The amount of accrued estimated warranty costs is primarily based on historical experience as to product failures as well as current information on repair costs. The amount of warranty costs accrued also contains an estimate as to warranty claim recoveries from suppliers. Research and development costs are expensed as incurred and were (Y)292,400 million and (Y)304,638 million ($2,738 million) for the six month periods ended September 30, 2002 and 2003, respectively. 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 of changes in value because of changes in interest rates. Marketable securities - - --------------------- Marketable securities consist of debt and equity securities. Debt and equity securities designated as available-for-sale are carried at fair value with changes in unrealized gains or losses included as a component of accumulated other comprehensive income/loss in shareholders' equity, net of applicable taxes. Should Toyota acquire securities in the future and designate them as held-to-maturity investments, such securities would be carried at amortized cost. Individual securities classified as either available-for-sale or held-to-maturity are reduced to net realizable value for other-than-temporary declines in market value. In determining if a decline in value is other-than-temporary, Toyota considers the length of time and the extent to which the fair value has -89- been less than the carrying value, the financial condition and prospects of the company and Toyota's ability and intent to retain its investment in the company for a period of time sufficient to allow for any anticipated recovery in market value. Realized gains and losses, which are determined on the average cost method, are reflected in the statement of income upon realized. Security investments in non-public companies - - -------------------------------------------- Security investments in non-public companies are carried at cost as fair value is not readily determinable. If the value of a non-public security investment is estimated to have declined and such decline is judged to be other-than-temporary, Toyota recognizes the impairment of the investment and the carrying value is reduced to its fair value. Determination of impairment is based on the consideration of such factors as operating results, business plans and estimated future cash flows. Fair value is determined principally through the use of the latest financial information. Finance receivables - - ------------------- Finance receivables are recorded at the present value of the related future cash flows including residual values for finance leases. Allowance for credit losses - - --------------------------- Allowances for credit losses are established to cover probable losses on receivables resulting from the inability of customers to make required payments. The allowance for credit losses is based primarily on historical loss experience. Other factors affecting collectibility are also evaluated in determining the amount to be provided. Losses are charged to the allowance when it has been determined that payments will not be received and collateral cannot be recovered or the related collateral is repossessed and sold. Any shortfall between proceeds received and the carrying cost of repossessed collateral is charged to the allowance. Recoveries are credited to the allowance for credit losses. Allowance for Residual Value Losses - - ----------------------------------- Toyota is exposed to risk of loss on the disposition of off-lease vehicles to the extent that sales proceeds are not sufficient to cover the carrying value of the leased asset at lease termination. Toyota maintains an allowance to cover probable estimated losses related to unguaranteed residual values on its present owned portfolio. The allowance is evaluated considering projected vehicle return rates and projected loss severity. Factors considered in the determination of projected return rates and loss severity include historical and market information on used vehicle sales, trends in lease returns and new car markets, and general economic conditions. Management evaluates the foregoing factors, develops several potential loss scenarios, and reviews allowance levels to determine whether reserves are considered adequate to cover the probable range of losses. -90- The allowance for residual value losses is maintained in amounts considered Toyota to be appropriate in relation to the estimated losses on the present owned portfolio. Upon disposal of the assets, the allowance for residual losses is adjusted for the difference between the net book value and the proceeds from sale. Inventories - - ----------- Inventories are valued at cost, not in excess of market, cost being determined on the "average cost" basis, except for the cost of finished products carried by certain subsidiary companies which is determined on the "specific identification" basis or "last in, first out" ("LIFO") basis. Inventories valued on the LIFO basis totaled (Y)153,879 million and (Y)169,351 million ($1,522 million) at March 31, 2003 and September 30, 2003, respectively. Had the "first in, first out" basis been used for those companies using the LIFO basis, inventories would have been (Y)30,489 million and (Y)19,136 million ($172 million) higher than reported at March 31, 2003 and September 30, 2003, respectively. Property, plant and equipment - - ----------------------------- Property, plant and equipment are stated at cost. Major renewals and improvements are capitalized; minor replacements, maintenance and repairs are charged to current operations. Depreciation of property, plant and equipment is mainly computed on the declining-balance method for the parent company and Japanese subsidiaries and on the straight-line method for foreign subsidiary companies at rates based on estimated useful lives of the assets according to general class, type of construction and use. Estimated useful lives range from 3 to 60 years for buildings and from 2 to 20 years for machinery and equipment. Vehicles and equipment on operating leases to third parties are originated by dealers and acquired by certain consolidated subsidiaries. Such subsidiaries are also the lessors of certain property that they acquire directly. Vehicles and equipment on operating leases are depreciated primarily on a straight-line basis over the lease term, generally three years, to the estimated residual value. Long-lived assets - - ----------------- Toyota reviews its long-lived assets, including investments in affiliated companies, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when the carrying amount of an asset exceeds the estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. The amount of the impairment loss to be recorded is calculated by the excess of the assets carrying value over its fair value. Fair value is determined mainly using a discounted cash flow valuation method. Goodwill and intangible assets - - ------------------------------ Goodwill is not material to Toyota's consolidated balance sheets. -91- Intangible assets consist mainly of software. Intangible assets with a definite life are amortized on a straight-line basis with estimated useful lives mainly of 5 years. Intangible assets with a definite life are tested for impairment whenever events or circumstances indicate that a carrying amount of an asset (asset group) may not be recoverable. An impairment loss would be recognized when the carrying amount of an asset exceeds the estimated undiscounted cash flows used in determining the fair value of the asset. The amount of the impairment loss to be recorded is calculated generally determined using a discounted cash flow analysis. Costs related to internally developed intangible assets are expensed as incurred. Environmental matters - - --------------------- Environmental expenditures relating to current operations are expensed or capitalized as appropriate. Expenditures relating to existing conditions caused by past operations, which do not contribute to current or future revenues, are expensed. Liabilities for remediation costs are recorded when they are probable and reasonably estimable, generally no later than the completion of feasibility studies or Toyota's commitment to a plan of action. The cost of each environmental liability is estimated by using current technology available and various engineering, financial and legal specialists within Toyota based on current law. Such liability does not reflect any offset for possible recoveries from insurance companies and is not discounted. There were no material changes in the liability for all periods presented. Income taxes - - ------------ The provision for income taxes is computed based on the pretax income included in the consolidated statement 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. Derivative financial instruments - - -------------------------------- Toyota employs derivative financial instruments, including foreign exchange forward contracts, foreign currency options, interest rate swaps, interest rate currency swap agreements and interest rate options to manage its exposure to fluctuations in interest rates and foreign currency exchange rates. Toyota does not use derivatives for speculation or trading purposes. Changes in the fair value of derivatives are recorded each period in current earnings or other comprehensive income, depending on whether a derivative is designated as part of a hedge transaction and the type of hedge transaction. The ineffective portion of all hedges is recognized currently in earnings. Net income per share - - -------------------- -92- Basic net income per common share is calculated by dividing net income by the weighted-average number of shares outstanding during the reported period 3,595,184,689 and 3,419,900,609 for the six month periods ended September 30, 2002 and 2003, respectively. The calculation of diluted net income per common share is similar to the calculation of basic net income per common share, except that the weighted-average number of shares outstanding includes the additional dilution from assumed exercise of dilutive stock options. The weighted average numbers of shares outstanding used in diluted net income per common share calculation were 3,595,190,760 and 3,419,990,391 for the six month periods ended September 30, 2002 and 2003, respectively. Stock-based compensation - - ------------------------ Toyota measures compensation expense for its stock-based compensation plan using the intrinsic value method. Other comprehensive income/loss - - ------------------------------- Other comprehensive income/loss refers to revenues, expenses, gains and losses that, under accounting principles generally accepted in the United States of America are included in comprehensive income, but are excluded from net income as these amounts are recorded directly as an adjustment to shareholders' equity. Toyota's other comprehensive income/loss is primarily comprised of unrealized gains/losses on marketable securities designated as available-for-sale, foreign currency translation adjustments, gains/losses on derivative instruments and adjustments to recognize additional minimum liabilities associated with Toyota's defined benefit pension plans. Accounting changes - - ------------------ In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("FAS") No.143 Accounting for Asset Retirement Obligations ("FAS 143"). FAS 143 requires full recognition of asset retirement obligations on the balance sheet from the point in time at which a legal obligation exists. The obligation is required to be measured at fair value. The carrying value of the asset or assets to which the retirement obligation relates would be increased by an amount equal to the liability recognized. This amount would then be included in the depreciable base of the asset and charged to income over its life as depreciation. Toyota adopted FAS 143 on April 1, 2003. The adoption of FAS 143 did not have a material impact on Toyota's consolidated financial statements. In April 2002, FASB issued FAS No. 145, Rescission of FAS No. 4, 44, and 64, Amendment of FAS 13, and Technical Corrections ("FAS 145"). This statement makes various technical corrections to existing pronouncements including the classification of gain or loss on extinguishment of debt, sale-lease back accounting for certain lease modifications. Toyota adopted FAS 145 on April 1, 2003. The adoption of FAS 145 did not have a material impact on Toyota's consolidated financial statements. -93- In November 2002, FASB Emerging Issues Task Force ("EITF") reached consensus on EITF Issue No. 00-21, Revenue Arrangements with Multiple Deliverables ("EITF 00-21"). EITF 00-21 addresses certain aspects of the accounting by a vendor for arrangements under which it will perform multiple revenue-generating activities. Toyota applied this consensus for revenue arrangements entered into in the period begun July 1, 2003. The adoption of EITF 00-21 did not have a material impact on Toyota's consolidated financial statements. In January 2003, FASB issued FASB Interpretation ("FIN") No. 46, Consolidation of Variable Interest Entities - an interpretation of ARB No. 51 ("FIN 46"). This interpretation provides guidance on identifying variable interest entities ("VIE") for which control is achieved through means other than voting rights and on how to determine when a company should consolidate the VIE. It is not limited to special purpose entities and will require more companies to consolidate entities with which they have contractual, ownership, or other pecuniary interests that absorb a portion of that entity's expected losses or receive a portion of the entity's residual returns. Toyota applied FIN 46 to VIEs created after January 31, 2003 and to VIEs in which Toyota obtained an interest after that date upon its creation or obtaining an interest. However, the application of FIN 46 to these VIEs did not have a material impact on Toyota's consolidated financial statements. Toyota will apply FIN 46 on December 31, 2003 to VIEs existed at January 31, 2003. Toyota enters into securitization transactions with certain special-purpose entities. However, because securitization transactions are primarily with entities that are qualifying special-purpose entities ("QSPEs") under FAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities ("FAS 140"), and because QSPEs are excluded from the scope of FIN 46, the implementation of FIN 46 relating to these securitization transactions is not expected to have a material impact on Toyota's consolidated financial statements. Toyota has invested in several joint ventures. These joint ventures may be deemed as variable interest entities, however, neither the aggregate size of these joint ventures nor Toyota's involvements in these entities are expected to be material to Toyota's consolidated financial statements. In February 2003, EITF reached a consensus on EITF Issue No. 03-2, Accounting for the Transfer to the Japanese Government of the Substitutional Portion of Employee Pension Fund Liabilities ("EITF 03-2"), which should be applied retroactively to April 1, 2002, the earliest date on which the separation process begun. EITF 03-2 provides a consensus that the entire process for the transfer of the substitutional portion of the benefit obligation and related plan assets to the Japanese government should be accounted for as a single settlement transaction upon completion of the transfer to the government. Under the consensus reached, the difference between the obligation settled, assuming the remeasurement at fair value immediately prior to the settlement, including the effects of the future salary increases previously accrued under the substitutional arrangement, and the assets transferred to the government, determined pursuant to the government formula, should be accounted for as settlement gain or loss at the time of the settlement. In accounting for the settlement of the substitutional portion of the obligation, a proportionate amount of the unrecognized gain or loss relating to the entire employee pension fund should also be recognized as a settlement gain or loss. Toyota -94- has already begun the separation process by obtaining the approval from the Japanese government of exemption from the benefits related to future employee service under the substitutional portion. However, in accordance with EITF 03-2, no effect of this transaction has been recognized in the consolidated financial statements for the six month period ended September 30, 2003 as the transfer of the substitutional portion of the benefit obligation and related plan assets to the Japanese government has not been completed as at September 30, 2003. In March 2003, EITF released Issue No. 02-9, Accounting for Changes That Result in a Transferor Regaining Control of Financial Assets Sold ("EITF 02-9"). EITF 02-9 relates to securitizations that have been accounted for as sales under FAS 140. In the event that one or more of the control rules are no longer met, the transferor would have to recognize those assets and the related liabilities on the consolidated balance sheet at the fair value. Toyota adopted EITF 02-9 prospectively to such events occurring after April 2, 2003. The adoption of EITF 02-9 did not have a material impact on Toyota's consolidated financial statements. In April 2003, the FASB issued FAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities ("FAS 149"). This statement amends and clarifies financial accounting and reporting for derivative instruments, including derivative instruments embedded in other contracts and for hedging activities under FAS No. 133, Accounting for Derivative Instruments and Hedging Activities ("FAS 133"). Toyota applied FAS 149 (1) to contracts entered into or modified after June 30, 2003, with certain exceptions, and (2) to hedging relationships designated after June 30, 2003. The adoption of FAS 149 did not have a material impact on Toyota's consolidated financial statements. In May 2003, the FASB issued FAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity ("FAS 150"). This Statement improves the accounting for certain financial instruments that, under previous guidance, issuers could account for as equity. FAS 150 requires that those instruments be classified as liabilities in the balance sheets. Toyota applied FAS 150 to financial instruments entered into or modified after May 31, 2003, and otherwise in the fiscal period started July 1, 2003. The adoption of FAS 150 did not have a material impact on Toyota's consolidated financial statements. In May 2003, the EITF reached consensus on EITF 01-8, Determining Whether an Arrangement Contains a Lease. EITF 01-8 clarifies the method to identify lease elements in arrangements that do not explicitly include lease provisions, and requires any lease element identified should be accounted for by current accounting literatures prescribing leases. Toyota applied the provisions of the EITF in the fiscal period bugun July 1, 2003. The adoption of EITF 01-8 did not have a significant impact on the Toyota's consolidated financial statements. Recent pronouncements to be adopted in future periods - - ----------------------------------------------------- In May 2003, EITF announced EITF Topic No. D-107, Lessor Consideration of Third-Party Residual -95- Value Guarantees. EITF Topic No. D-107 has clarified that some of the accounting practices by lessors regarding residual value guarantees issued by an unrelated third party for a portfolio of leased assets for which settlement is not solely based upon the residual value of the individual leased assets. Under this EITF, residual value guarantees of a portfolio of leased assets preclude a lessor from determining the amount of the guaranteed residual value of any individual leased asset within the portfolio at lease inception and, accordingly, no such amounts should be included in minimum lease payments. Toyota will apply this provision for the fiscal period starting January 1, 2004. Management does not expect this provision to have a material impact on Toyota's consolidated financial statements. Reclassifications - - ----------------- Certain prior year amounts have been reclassified to conform to the presentation of the six month period ended September 30, 2003. 4. U.S. dollar amounts: ------------------- U.S. dollar amounts presented in the semi-annual condensed consolidated financial statements and related notes are included solely for the convenience of the reader. These translations should not be construed as representations that the yen amounts actually represent, or have been or could be converted into, U.S. dollars. For this purpose, the rate of (Y)111.25 = U.S. $1, the approximate current exchange rate at September 30, 2003, was used for the translation of the accompanying consolidated financial amounts of Toyota as of and for the six month period ended September 30, 2003. -96- 5. Marketable securities and other securities investments: Marketable securities and other securities investments include debt and equity securities for which the aggregate cost, gross unrealized gains and losses and fair value are as follows:
Yen in millions ------------------------------------------------------------- March 31, 2003 ------------------------------------------------------------- Gross Gross unrealized unrealized Fair Cost gains losses value -------------- --------------- ------------------------------ Available-for-sale Debt securities (Y) 1,591,393 (Y) 26,535 (Y) 2,525 (Y)1,615,403 Equity securities 476,870 53,534 42,770 487,634 -------------- --------------- --------------- -------------- Total (Y) 2,068,263 (Y) 80,069 (Y) 45,295 (Y)2,103,037 Securities not practicable to fair value Debt securities (Y) 53,052 Equity securities 101,504 -------------- Total (Y) 154,556 ============== Yen in millions ------------------------------------------------------------- September 30, 2003 ------------------------------------------------------------- Gross Gross unrealized unrealized Fair Cost gains losses value -------------- --------------- ---------------- ------------- Available-for-sale Debt securities (Y) 1,981,094 (Y) 17,857 (Y) 4,010 (Y)1,994,941 Equity securities 577,227 353,383 10,422 920,188 -------------- --------------- --------------- -------------- Total (Y) 2,558,321 (Y) 371,240 (Y) 14,432 (Y)2,915,129 Securities not practicable to fair value Debt securities (Y) 51,734 Equity securities 90,681 Total (Y) 142,415 U.S. dollars in millions ------------------------------------------------------------- September 30, 2003 ------------------------------------------------------------- Gross Gross unrealized unrealized Fair Cost gains losses value -------------- --------------- ---------------- ------------- Available-for-sale Debt securities $17,808 $ 160 $ 36 $17,932 Equity securities 5,188 3,177 93 8,272 -------------- --------------- ---------------- ------------- Total $22,996 $ 3,337 $ 129 $26,204 ============== Securities not practicable to fair value Debt securities $ 465 Equity securities 815 -------------- Total $ 1,280 ==============
In the ordinary course of business, Toyota maintains long-term investment securities, included in -97- "Marketable securities and other securities investments", issued by a number of non-public companies which are recorded at cost, as their fair values were not readily determinable. Toyota's management employs a systematic methodology to assess the recoverability of such investments by reviewing the financial viability of the underlying companies and the prevailing market conditions in which these companies operate to determine if Toyota's investment in each individual company is impaired and whether the impairment is other-than-temporary. If the impairment is determined to be other-than-temporary, the cost of the investment is written-down by the impaired amount and the losses are recognized currently in earnings. -98- 6. Vehicles and equipment on operating leases: Vehicles and equipment on operating leases consist of the following:
U.S. dollars Yen in millions in millions ----------------------------------- ------------------ March 31, 2003 September 30, September 30, 2003 2003 ----------------- ----------------- ------------------ Vehicles (Y)1,480,556 (Y)1,439,962 $ 12,944 Equipment and other 120,504 116,075 1,043 1,601,060 1,556,037 13,987 Less - Accumulated depreciation (397,289) (397,650) (3,574) Vehicles and equipment on ============== ============= ============= operating leases, net (Y)1,203,771 (Y)1,158,387 $ 10,413
Rental income from vehicles and equipment on operating leases was (Y)149,591 million ($1,345 million) for the six month period ended September 30, 2003. Future minimum rentals from vehicles and equipment on operating leases are due in installments as follows: Years ending U.S. dollars September 30: Yen in millions in millions - ----------------------------- ------------------ ------------------- 2004 (Y) 276,546 $ 2,486 2005 187,976 1,690 2006 96,863 871 2007 28,039 252 2008 7,474 67 The future minimum rentals as shown above should not be considered indicative of future cash collections. -99- 7. Lease commitments: Toyota leases certain assets under capital lease and operating lease arrangements. An analysis of leased assets under capital leases is as follows:
U.S. dollars Yen in millions in millions ----------------------------------- ----------------- Class of property March 31, 2003 September 30, September 30, 2003 2003 - ------------------------------------------- ---------------- ------------------ ----------------- Building (Y) 11,059 (Y) 11,006 $ 99 Machinery and equipment 155,197 157,121 1,412 Less - Accumulated depreciation (106,633) (111,487) (1,002) ---------------- ------------------ ----------------- (Y) 59,623 (Y) 56,640 $ 509 ================ ================== =================
Amortization expenses under capital leases for the six month periods ended September 30, 2002 and 2003 were (Y)6,926 million and (Y)9,116 million ($82 million), respectively. Future minimum lease payments under capital leases together with the present value of the net minimum lease payments as of September 30, 2003 are as follows:
U.S. dollars Years ending September 30: Yen in millions in millions - --------------------------------------------------------- ----------------- ----------------- 2004 (Y) 16,817 $ 151 2005 14,085 127 2006 13,922 125 2007 14,936 135 2008 5,368 48 Thereafter 24,385 219 ------------- ------------- Total minimum lease payments 89,513 805 Less - Amount representing interest (10,744) (97) Present value of net minimum lease payments 78,769 708 Less - Current obligations (14,316) (129) ------------- ------------- Long-term capital lease obligations (Y) 64,453 $ 579 ============= =============
Rental expenses under operating leases for the six month periods ended September 30, 2002 and 2003 were (Y)39,703 million and (Y) 40,679 million ($366 million), respectively. The minimum rental payments required under operating leases relating primarily to land, buildings and equipment having initial or remaining non-cancelable lease terms in excess of one year at September 30, 2003 are as follows: Yen in U.S. dollars Years ending September 30: millions in millions -100- - --------------------------------------------- ----------------- ---------------- 2004 (Y) 8,072 $ 72 2005 7,186 65 2006 5,185 47 2007 3,670 33 2008 2,703 24 Thereafter 12,192 110 ----------- ---------- Total minimum future rentals (Y) 39,008 $ 351 ========== ========== -101- 8. Derivative financial instruments: Toyota employs derivative financial instruments, including foreign exchange forward contracts, foreign currency options, interest rate swaps and interest rate currency swap agreements to manage its exposure to fluctuations in interest rates and foreign currency exchange rates. Toyota does not use derivatives for speculation or trading. Fair value hedges - - ------------------- Toyota enters into interest rate swaps, and interest rate currency swap agreements mainly to convert its fixed-rate debt to variable-rate debt. Toyota uses interest rate swap agreements in managing its exposure to interest rate fluctuations. Interest rate swap agreements are executed as either an integral part of specific debt transactions or on a portfolio basis. Toyota uses interest rate currency swap agreements to entirely hedge exposure to exchange rate fluctuations on principal and interest payments for borrowings denominated in foreign currencies. Notes and loans payable issued in foreign currencies are hedged by concurrently executing interest rate currency swap agreements which involve the exchange of foreign currency principal and interest obligations for each functional currency obligations at agreed-upon currency exchange and interest rates. For the six month periods ended September 30, 2002 and 2003, Toyota reported gains of (Y)6,400 million, and (Y)2,007 million ($18 million), respectively, related to the ineffective portion of Toyota's fair value hedges which is included in cost of financing operations in the accompanying consolidated statements of income. For fair value hedging relationships, the components of each derivative's gain or loss are included in the assessment of hedge effectiveness. Cash flow hedges - - ------------------ Toyota enters into interest rate swaps, and interest rate currency swap agreements to manage its exposure to interest rate risk, and foreign currency exchange risk mainly associated with funding in currencies in which it operates. Interest rate swap agreements are used in managing Toyota's exposure to the variability of interest payments due to the changes in interest rates arising principally in variable-rate debts issued by Toyota. Interest rate swap agreements, which are designated as, and qualify as cash flow hedges are executed as an integral part of specific debt transactions and the critical terms of the interest rate swaps and the hedged debt transactions are the same. Toyota uses interest rate currency swap agreements to manage the foreign-currency exposure to variability in functional-currency-equivalent cash flows principally from debts or borrowings denominated in currencies other than functional currencies. Net derivative gains and losses included in other comprehensive income are reclassified into earnings at the time that the associated hedged transactions impact the income statement. For the six month period ended September 30, 2002, net derivative losses of (Y)790 million was reclassified to foreign -102- exchange gain, net in the accompanying consolidated statements of income. These net gains and losses were offset by net losses and gains from transactions being hedged. The components of each derivative's gain and loss are included in the assessment of hedge effectiveness, and no hedge ineffectiveness was reported because all critical terms of derivative financial instruments designated as, and qualify as, cash flow hedging instruments are same as those of hedged debt transactions. Toyota does not expect to reclassify any gains or losses included in other comprehensive income as at September 30, 2003, into earnings in next twelve months because no derivative instruments designated as, and qualify as, cash flow hedges as of the date. Undesignated derivative financial instruments - - --------------------------------------------- Toyota uses foreign exchange forward contracts, foreign currency options, interest rate swaps, interest rate currency swap agreements, and interest rate options, which manage its exposure to foreign currency exchange fluctuation and interest rate fluctuation from an economic perspective, and which Toyota is unable or has elected not to apply hedge accounting. Unrealized gains or losses on these derivative instruments are reported in cost of financing operations and foreign exchange gain, net in the accompanying consolidated statements of income. 9. Other commitments and contingencies, concentrations and factors that may affect future operations: Commitments outstanding at September 30, 2003 for the purchase of property, plant and equipment and other assets are (Y)78,372 million ($704 million). Toyota enters into contracts with Toyota dealers to guarantee customers' payment of their installment payables that arises from installment contracts between customers and Toyota dealers, as and when requested by Toyota dealers. Guarantee periods are set to match maturity of installment payments, and range from 1 month to 105 months at September 30, 2003, however, they are generally shorter than the useful lives of products sold. Toyota is required to execute its guarantee primarily when customers are unable to make required payments. The maximum potential amount of future payments as of September 30, 2003 is (Y)907,069 million ($8,153 million). Liability for guarantee of (Y)4,295 million ($39 million) has been provided as of September 30, 2003. Under these guarantee contracts, Toyota is entitled to recover its payments from customers either by cash or through vehicles foreclosed. In February 2003, Toyota, General Motors, Ford, DaimlerChrysler, Honda, Nissan and BMW and their U.S. and Canadian sales and marketing subsidiaries, the National Automobile Dealers Association and the Canadian Automobile Dealers Association were named as defendants in purported nationwide class actions on behalf of all purchasers of new motor vehicles in the United States since January 1, 2001. These actions were filed in federal courts in California, Illinois, New York, Massachusetts, Florida, New Jersey and Pennsylvania. Additionally, parallel class actions were filed in state courts in California, Minnesota, New Mexico, New York, Tennessee, Wisconsin, Arizona, Florida, -103- Massachusetts, Iowa, and New Jersey on behalf of the same purchasers in those states. As of November 30, 2003, approximately 10 such cases were pending before the various federal and state courts. (The cases in the federal courts, and the state courts in California and New Jersey have been consolidated respectively.) The nearly identical complaints allege that the defendants violated the Sherman Antitrust Act by conspiring among themselves and with their dealers to prevent the sale to United States citizens of vehicles produced for the Canadian market. The complaints allege that new vehicle prices in Canada are 10% to 30% lower than those in the United States and that preventing the sale of these vehicles to United States citizens resulted in United States consumers paying excessive prices for the same type of vehicles. The complaints seek permanent injunctions against the alleged antitrust violations and treble damages in an unspecified amount. The cases are at a preliminary stage; as of November 30, 2003, no defendant has yet answered the complaints and there has been no decision on the certification of the alleged cases. Toyota believes that its actions have been lawful and intends to vigorously defend these cases. Toyota has various other legal actions, governmental proceedings and other claims pending against it, including product liability claims in the United States. Although the claimants in some of these actions seek potentially substantial damages, Toyota cannot currently determine its potential liability or the damages, if any, with respect to these claims. However, based upon information currently available to Toyota, Toyota believes that its losses from these matters, if any, would not have a material adverse effect on Toyota's financial position, operating results or cash flows. In September 2000, the European Union approved a directive that mandates member states to promulgate regulations implementing, by April 21, 2002, the following requirements: (1) manufacturers shall bear all or a significant part of the cost for taking back end-of-life vehicles put on the market after July 1, 2002 and dismantling and recycling those vehicles; provided however, that beginning January 1, 2007, manufacturers will also be financially responsible for vehicles put on the market before July 1, 2002; (2) manufacturers may not use certain hazardous materials in vehicles to be sold after July 2003; (3) vehicle types approved and put on the market after three years after the amendment of Directive on Type-approval shall be re-usable and/or recyclable to a minimum of 85% by weight per vehicle and shall be re-usable and/or recoverable to a minimum of 95% by weight per vehicle; and (4) end-of-life vehicles must meet actual re-use and recovery targets of 80% and 85%, respectively, of vehicle weight by January 1, 2006, rising respectively to 85% and 95% by January 1, 2015. Currently, there are numerous uncertainties surrounding the form and implementation of the applicable regulations in different European Union member states, including, in particular, regarding manufacturer responsibilities and resulting expenses that may be incurred. As of November 30, 2003, the following 10 member states have adopted legislation to implement the directive: The Netherlands, Germany, Austria, Spain, Luxembourg, Italy, Portugal, France, United Kingdom and Ireland. In addition, Sweden, Norway and Denmark have adopted legislation similar to the directive and Belgium has adopted legislation that partially implements the directive. Despite the requirement to enact legislation to implement the directive by April 21, 2002, implementation of the directive has been -104- delayed in some countries. In addition, under this directive, member states must take measures to ensure that car manufacturers, distributors and other auto-related businesses establish adequate used vehicle disposal facilities and to ensure that hazardous materials and recyclable parts are removed from vehicles prior to scrapping. Accordingly, this directive may impact Toyota's vehicles sold in the European Union. Based on the legislation that has been enacted to date, Toyota has provided for its estimated liability related to covered vehicles in existence as of September 30, 2003. Depending on the legislation implemented in the 2 member states that have not yet enacted legislation and other circumstances, Toyota may be required to take additional accruals for the expected costs to comply with these regulations. Although Toyota does not expect its compliance with the directive to result in significant cash expenditures, Toyota is continuing to assess the impact of this future legislation on its results of operations, cash flows and financial position. Toyota has a concentration of material purchases from a supplier which is an affiliated company. These purchases approximate 10% of material costs. The parent company has a concentration of labor supply in employees working under collective bargaining agreements and a substantial portion of these employees are working under the agreement that will expire on December 31, 2005. -105- 10. Segment data: The operating segments reported below are the segments of Toyota for which separate financial information is available and for which operating income/loss amounts are evaluated regularly by executive management in deciding how to allocate resources and in assessing performance. The major portions of Toyota's operations on a worldwide basis are derived from the Automotive and Financial Services business segments. The Automotive segment designs, manufactures, assembles and distributes passenger cars, sport-utility vehicles, minivans, trucks and related parts and accessories. The Financial Services segment consists primarily of financing operations, and vehicle and equipment leasing operations to assist in the merchandising of Toyota's products as well as other products. The All Other segment includes Toyota's housing business and various other business activities. The following tables present certain information regarding Toyota's industry segments and operations by geographic areas as of March 31, 2003 and September 30, 2003 and for the six month periods ended September 30, 2002 and 2003: Information about segment profit and assets - - ------------------------------------------- As of March 31, 2003 and for the six month period ended September 30, 2002:
Yen in millions -------------------------------------------------------------------------------------- Intersegment Elimination/ Financial Unallocated Consolidated Automotive Services All Other Amount Total ---------------------------------- --------------------------------- ----------------- Revenues from external (Y) 7,038,387 (Y) 342,377 (Y) 232,658 (Y) - (Y) 7,613,422 customers Intersegment revenues 3,164 8,428 128,071 (139,663) - Total 7,041,551 350,805 360,729 (139,663) 7,613,422 Depreciation 328,501 96,929 9,565 - 434,995 Operating income 685,921 3,805 (1,202) (3,501) 685,023 Segment assets (1) 9,392,749 7,392,486 722,604 2,645,135 20,152,974 Investment in equity method investees (1) 1,054,234 161,820 - 56,493 1,272,547 Capital expenditures for segment assets 476,256 263,888 14,586 53,972 808,702
(1) Representing figures as of March 31, 2003. -106- As of and for the six month period ended September 30, 2003:
Yen in millions -------------------------------------------------------------------------------------- Intersegment Elimination/ Financial Unallocated Consolidated Automotive Services All Other Amount Total ---------------------------------- --------------------------------- ----------------- Revenues from external (Y) 7,584,310 (Y) 362,460 (Y) 277,471 (Y) - (Y) 8,224,241 customers Intersegment revenues 6,126 9,000 126,208 (141,334) - Total 7,590,436 371,460 403,679 (141,334) 8,224,241 Depreciation 368,242 97,493 10,203 - 475,938 Operating income 702,634 61,681 6,047 (2,593) 767,769 Segment assets 9,689,020 7,560,742 831,670 2,695,688 20,777,120 Investment in equity method investees ---------------- 993,789 181,226 - 64,171 1,239,186 Capital expenditures for segment assets 459,390 238,155 20,371 26,060 743,976
U.S. dollars in millions -------------------------------------------------------------------------------------- Intersegment Elimination/ Financial Unallocated Consolidated Automotive Services All Other Amount Total ---------------------------------- --------------------------------- ----------------- Revenues from external $ 68,174 $ 3,258 $ 2,494 $ - $ 73,926 customers Intersegment revenues 55 81 1,135 (1,271) - Total 68,229 3,339 3,629 (1,271) 73,926 Depreciation 3,310 876 92 - 4,278 Operating income 6,316 554 54 (23) 6,901 Segment assets 87,092 67,962 7,476 24,231 186,761 Investment in equity method investees 8,933 1,629 - 577 11,139 Capital expenditures for segment assets 4,129 2,141 183 234 6,687
-107- Geographic Information - - ------------------------ Revenues for the six month periods ended September 30:
U.S. dollars in Yen in millions millions --------------------------------------- -------------------- 2002 2003 2003 ------------------- ------------------ -------------------- Japan External customers (Y) 3,131,544 (Y) 3,325,570 $ 29,893 Intersegment 2,060,909 2,171,720 19,521 ------------------ ------------------- -------------------- Total 5,192,453 5,497,290 49,414 ------------------ ------------------- -------------------- North America External customers 3,069,254 2,896,155 26,033 Intersegment 127,292 117,912 1,060 ------------------ ------------------- -------------------- Total 3,196,546 3,014,067 27,093 ------------------ ------------------- -------------------- Europe External customers 713,832 977,630 8,788 Intersegment 32,043 54,645 491 ------------------ ------------------- -------------------- Total 745,875 1,032,275 9,279 ------------------ ------------------- -------------------- Other foreign countries External customers 698,792 1,024,886 9,212 Intersegment 42,654 77,931 701 ------------------ ------------------- -------------------- Total 741,446 1,102,817 9,913 ------------------ ------------------- -------------------- Elimination of intersegment revenue (2,262,898) (2,422,208) (21,773) ------------------ ------------------- -------------------- Consolidated total (Y) 7,613,422 (Y) 8,224,241 $ 73,926 ================== =================== ====================
Operating income (loss) for the six month periods ended September 30:
U.S. dollars in Yen in millions millions ---------------------------------------- ------------------- 2002 2003 2003 ------------------ -------------------- ------------------- Japan (Y) 479,783 (Y) 529,742 $ 4,762 North America 181,793 163,616 1,470 Europe 5,083 22,474 202 Other foreign countries 21,955 53,293 479 Elimination of intersegment profits (3,591) (1,356) (12) ---------------- ----------------- ----------- Consolidated total (Y) 685,023 (Y) 767,769 $ 6,901 ================ ================= ============
Total assets as of March 31 and September 30, 2003:
U.S. dollars in Yen in millions millions ---------------------------------------- ------------------ March 31 September 30 September 30 ------------------- ------------------- ------------------ Japan (Y)9,272,330 (Y) 9,796,611 $ 88,059 North America 6,217,941 6,037,536 54,270 Europe 1,516,360 1,616,800 14,533 Other foreign countries 1,072,887 1,309,265 11,769 Unallocated amount 2,073,456 2,016,908 18,130 ------------- --------------- ------------- Consolidated total (Y)20,152,974 (Y) 20,777,120 $ 186,761 ============= =============== =============
-108- Long-lived assets as of March 31 and September 30, 2003:
U.S. dollars in Yen in millions millions ---------------------------------------- ------------------ March 31 September 30 September 30 ------------------- ------------------- ------------------ Japan (Y)2,732,654 (Y) 3,016,108 $ 27,111 North America 1,778,892 1,633,045 14,679 Europe 410,389 424,368 3,814 Other foreign countries 281,944 327,039 2,940 ------------ --------------- ------------- Consolidated total (Y)5,203,879 (Y) 5,400,560 $ 48,544 ============ =============== =============
Revenues are attributed to geographies based on the country location of the parent company or the subsidiary that transacted the sale with the external customer. There are no any individually material countries with respect to revenues and long-lived assets included in other foreign countries. Transfers between industry or geographic segments are made at amounts which Toyota's management believes arm's-length prices. In measuring the reportable segments' income or losses, operating income consists of sales and operating revenue less costs and operating expenses. Unallocated assets consist primarily of cash and cash equivalents and marketable securities maintained for general corporate purposes. The following information shows revenues that are attributed to countries based on location of customers for the six month periods ended September 30, 2002 and 2003. In addition to the disclosure requirements under FAS No. 131, Toyota discloses this supplemental information in order to provide the Japanese readers with valuable information. U.S. dollars in Yen in millions millions ----------------------------------- ----------------- 2002 2003 2003 ---------------- ------------------ ----------------- North America (Y) 3,194,639 (Y) 3,013,321 $ 27,086 Europe 717,015 944,563 8,491 Other foreign countries 1,274,020 1,601,666 14,397 -109- Certain financial statement data on non-financial services business and financial services business - - ------------------------------- Toyota is preparing certain financial statement data relating to the segmentation of Toyota's non-financial services and financial services businesses. This financial statement data includes balance sheets at March 31, 2003 and September 30, 2003, and statements of income for the six month periods ended September 30, 2002 and 2003. Balance sheets - - ----------------
U.S. dollars Yen in millions in millions --------------------------------------- ---------------- March 31, September 30, September 30, 2002 2003 2003 ------------------- ------------------- ---------------- Non-Financial Services Business Current assets Cash and cash equivalents (Y) 1,437,731 (Y) 1,119,422 $ 10,062 Time deposits 29,213 17,014 153 Marketable securities 602,634 780,942 7,020 Trade accounts and notes receivable, 1,496,432 1,318,935 11,856 less allowance for doubtful accounts Finance receivables, net 14,296 14,678 132 Inventories 1,025,838 1,059,824 9,526 Prepaid expenses and other current assets 1,383,264 1,495,026 13,438 -------------------- ------------------ ---------------- Total current assets 5,989,408 5,805,841 52,187 -------------------- ------------------ ---------------- Noncurrent finance receivables, net 14,463 13,319 120 Investments and other assets 3,423,676 3,915,763 35,198 Property, plant and equipment 4,100,077 4,383,157 39,399 -------------------- ------------------ ---------------- Total Non-Financial Services Business assets 13,527,624 14,118,080 126,904 -------------------- ------------------ ---------------- Financial Services Business Current assets Cash and cash equivalents 154,297 123,789 1,113 Time deposits 26,193 26,072 234 Marketable securities 2,849 6,773 61 Finance receivables, net 2,490,844 2,227,549 20,023 Prepaid expenses and other current assets 545,701 600,411 5,397 -------------------- ------------------ ---------------- Total current assets 3,219,884 2,984,594 26,828 -------------------- ------------------ ---------------- Noncurrent finance receivables, net 2,555,345 3,013,295 27,086 Investments and other assets 513,455 545,450 4,903 Property, plant and equipment 1,103,802 1,017,403 9,145 -------------------- ------------------ ---------------- Total Financial Services Business assets 7,392,486 7,560,742 67,962 -------------------- ------------------ ---------------- Elimination of assets (767,136) (901,702) (8,105) -------------------- ------------------ ---------------- Total assets (Y) 20,152,974 (Y) 20,777,120 $ 186,761 ==================== ================== ================
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U.S. dollars Yen in millions in millions ---------------------------------------- ---------------- March 31, September 30, September 30, 2003 2003 2003 --------------------------------------- ---------------- Non-Financial Services Business Current liabilities Short-term borrowings (Y) 784,501 (Y) 822,072 $ 7,390 Current portion of long-term debt 134,636 69,438 624 Accounts payable 1,520,160 1,552,185 13,952 Accrued expenses 1,019,241 1,008,779 9,068 Income taxes payable 293,756 260,128 2,338 Other current liabilities 893,723 914,782 8,223 ------------------- -------------------- ---------------- Total current liabilities 4,646,017 4,627,384 41,595 ------------------- -------------------- ---------------- Long-term liabilities Long-term debt 789,509 774,022 6,957 Accrued pension and severance costs 1,051,500 1,111,749 9,993 Other long-term liabilities 222,405 269,617 2,424 ------------------- -------------------- ---------------- Total long-term liabilities 2,063,414 2,155,388 19,374 ------------------- -------------------- ---------------- Total Non-Financial Services Business liabilities 6,709,431 6,782,772 60,969 ------------------- -------------------- ---------------- Financial Services Business Current liabilities Short-term borrowings 1,542,514 1,783,862 16,035 Current portion of long-term debt 1,200,900 1,129,859 10,156 Accounts payable 11,893 12,083 109 Accrued expenses 51,388 49,302 443 Income taxes payable 6,962 7,116 64 Other current liabilities 177,115 170,337 1,531 ------------------- -------------------- ---------------- Total current liabilities 2,990,772 3,152,559 28,338 ------------------- -------------------- ---------------- Long-term liabilities Long-term debt 3,532,811 3,531,045 31,739 Accrued pension and severance costs 1,187 1,151 11 Other long-term liabilities 249,952 211,926 1,905 ------------------- -------------------- ---------------- Total long-term liabilities 3,783,950 3,744,122 33,655 ------------------- -------------------- ---------------- Total Financial Services Business liabilities 6,774,722 6,896,681 61,993 ------------------- -------------------- ---------------- Elimination of liabilities (767,645) (902,340) (8,111) Minority interest in consolidated subsidiaries 315,466 427,533 3,843 Shareholders' equity 7,121,000 7,572,474 68,067 ------------------- -------------------- ---------------- Total liabilities and shareholders' equity (Y) 20,152,974 (Y) 20,777,120 $ 186,761 =================== ==================== ================
-111- Statements of income -
U.S. dollars Yen in millions in millions -------------------------------------------------------- For the six month For the six month periods ended period ended September 30, September 30, ------------------------------------- ------------------ 2002 2003 2003 ------------------ ------------------ ------------------ Non- Financial Services Business Net revenues (Y) 7,269,669 (Y) 7,867,021 $ 70,715 ------------------ ------------------ ------------------ Costs and expenses Cost of revenues 5,792,839 6,275,627 56,410 Selling, general and administrative 790,455 880,774 7,917 ------------------- ----------------- ------------------ Total costs and expenses 6,583,294 7,156,401 64,327 ------------------- ----------------- ------------------ Operating income 686,375 710,620 6,388 ------------------- ----------------- ------------------ Other income, net 30,377 44,272 398 ------------------- ----------------- ------------------ Income before income taxes, minority interest and equity in earnings of affiliated companies 716,752 754,892 6,786 Provision for income taxes 300,891 285,959 2,571 ------------------- ----------------- ------------------ Income before minority interest and equity in earnings of affiliated companies 415,861 468,933 4,215 Minority interest in consolidated subsidiaries (9,002) (18,150) (163) Equity in earnings of affiliated companies 16,942 37,413 336 ------------------- ----------------- ------------------ Net income- Non-Financial Services Business 423,801 488,196 4,388 ------------------- ----------------- ------------------ Financial Services Business Net revenues 350,805 371,460 3,339 ------------------- ----------------- ------------------ Costs and expenses Cost of revenues 228,771 192,157 1,727 Selling, general and administrative 118,229 117,622 1,058 ------------------- ----------------- ------------------ Total costs and expenses 347,000 309,779 2,785 ------------------- ----------------- ------------------ Operating income 3,805 61,681 554 ------------------- ----------------- ------------------ Other expenses, net (5,490) (4,689) (42) ------------------- ----------------- ------------------ Income (losses) before income taxes, minority interest and equity in earnings of affiliated (1,685) 56,992 512 companies Provision for income taxes (3,725) 23,840 214 ------------------- ----------------- ------------------ Income before minority interest and equity in earnings of affiliated companies 2,040 33,152 298 Minority interest in consolidated subsidiaries (538) (465) (4) Equity in earnings of affiliated companies 845 3,580 32 ------------------- ----------------- ------------------ Net income- Financial Services Business 2,347 36,267 326 ------------------- ----------------- ------------------ Elimination of net income (348) (3) (0) ------------------- ----------------- ------------------ Net income (Y) 425,800 (Y) 524,460 $ 4,714 =================== ================= ==================
-112- Statement of cash flows -
U.S. dollars Yen in millions in millions -------------------------------------------------------- For the six month For the six month periods ended period ended September 30, September 30, ------------------------------------- ------------------ 2002 2003 2003 ------------------ ------------------ ------------------ Non-Financial Services Business Cash flows from operating activities Net income (Y) 423,801 (Y) 488,196 $ 4,388 Adjustments to reconcile net income to net cash provided by operating activities Depreciation 338,066 378,445 3,402 Pension and severance costs, less payments 30,154 34,000 306 Loss on disposal of fixed assets 23,740 18,423 166 Unrealized losses on available-for-sale securities, net 23,853 2,697 24 Deferred income taxes (35,867) 6,831 61 Minority interest in consolidated 9,002 18,150 163 subsidiaries Equity in earnings of affiliated companies (16,942) (37,413) (336) Changes in operating assets and liabilities 96,578 21,737 195 Other 113,912 (66,198) (595) ---------------- ---------------- --------------- Net cash provided by operating activities 1,006,297 864,868 7,774 ---------------- ---------------- --------------- Cash flows from investing activities Additions to fixed assets excluding equipment leased to others (493,827) (433,924) (3,901) Additions to equipment leased to others (50,987) (71,897) (646) Proceeds from sales of fixed assets excluding equipment leased to others 25,435 25,888 233 Proceeds from sales of equipment leased to others 19,579 24,840 223 Purchases of marketable securities and security investments (427,791) (968,766) (8,708) Proceeds from sales of and maturity of marketable securities and security investments 463,882 582,102 5,233 (Increase) decrease in time deposits (173) 15,856 143 (Increase) decrease in investments and other assets 39,225 (15,431) (139) Payments for additional investments in affiliated companies, net of cash acquired (16,016) (18,876) (170) Other 8,259 (3,595) (32) ---------------- ---------------- --------------- Net cash used in investing activities (432,414) (863,803) (7,764) ---------------- ---------------- --------------- Cash flows from financing activities Purchases of common stock (142,090) (120,229) (1,081) Proceeds from issuance of long-term debt 164,337 32,088 288 Payments of long-term debt (168,142) (111,290) (1,000) Decrease in short-term borrowings (57,167) (4,387) (39) Dividends paid (54,108) (69,782) (627) Other - (15,000) (135) ---------------- ---------------- --------------- Net cash used in financing activities (257,170) (288,600) (2,594) ---------------- ---------------- --------------- Effect of exchange rate changes on cash and cash equivalents (32,255) (30,774) (277) ---------------- ---------------- --------------- Net increase (decrease) in cash and cash equivalents 284,458 (318,309) (2,861) Cash and cash equivalents at beginning of period 1,510,974 1,437,731 12,923 ---------------- ---------------- --------------- Cash and cash equivalents at end of period (Y) 1,795,432 (Y) 1,119,422 $ 10,062 ================ ================ ===============
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U.S. dollars Yen in millions in millions -------------------------------------------------------- For the six month For the six month periods ended period ended September 30, September 30, ------------------------------------- ------------------ 2002 2003 2003 ------------------ ------------------ ------------------ Financial Service Business Cash flows from operating activities Net income (Y) 2,347 (Y) 36,267 $ 326 Adjustments to reconcile net income to net cash provided by operating activities Depreciation 96,929 97,493 876 Deferred income taxes 12,046 15,033 135 Minority interest in consolidated subsidiaries 538 465 4 Equity in earnings of affiliated companies (845) (3,580) (32) Changes in operating assets and liabilities (79,197) (43,735) (393) Other 9,806 44,259 398 ---------------- ---------------- --------------- Net cash provided by operating activities 41,624 146,202 1,314 ---------------- ---------------- --------------- Cash flows from investing activities Additions to finance receivables (2,474,800) (4,182,349) (37,594) Collection of and proceeds from sales of finance receivables 1,938,368 3,727,776 33,508 Additions to fixed assets excluding equipment leased to others (25,281) (11,598) (104) Additions to equipment leased to others (238,607) (226,557) (2,037) Proceeds from sales of fixed assets excluding equipment leased to others 6,171 5,346 48 Proceeds from sales of equipment leased to others 106,340 108,233 973 Purchases of marketable securities and security investments (93,573) (169,097) (1,520) Proceeds from sales of and maturity of marketable securities and security investments 105,964 123,512 1,110 Increase in time deposits (11,912) (11) (0) Other 5,874 (19,270) (173) ---------------- ---------------- --------------- Net cash used in investing activities (681,456) (644,015) (5,789) ---------------- ---------------- --------------- Cash flows from financing activities Proceeds from issuance of long-term debt 750,810 706,040 6,346 Payments of long-term debt (402,905) (546,392) (4,911) Increase in short-term borrowings 228,740 299,919 2,696 Other - 15,000 135 ---------------- ---------------- --------------- Net cash provided by financing activities 576,645 474,567 4,266 ---------------- ---------------- --------------- Effect of exchange rate changes on cash and cash equivalents (8,278) (7,262) (65) ---------------- ---------------- --------------- Net decrease in cash and cash equivalents (71,465) (30,508) (274) Cash and cash equivalents at beginning of period 146,186 154,297 1,387 ---------------- ---------------- --------------- Cash and cash equivalents at end of period (Y) 74,721 (Y) 123,789 $ 1,113 ================ ================ =============== (Consolidated) Effect of exchange rate changes on cash and cash equivalents (Y) (40,533) (Y) (38,036) $ (342) Net increase (decrease) in cash and cash equivalents 212,993 (348,817) (3,135) Cash and cash equivalents at beginning of period 1,657,160 1,592,028 14,310 ---------------- ---------------- --------------- Cash and cash equivalents at end of period (Y) 1,870,153 (Y) 1,243,211 $ 11,175 ================ ================ ===============
-114- 11. Per share information The following table shows net assets per common share as of March 31 and September 30, 2003.
Yen U.S. dollars ---------------------------------------- --------------- March 31, September 30, September 2003 2003 30,2003 ---------------------------------------- --------------- Net assets per common share 2,063.43 2,228.52 20.03
12. Subsequent events On September 1, 2003, the employee pension fund of the parent company received an approval from the Minister of Health, Labor and Welfare for transition to the corporate defined benefit pension plan. On December 22, 2003, as required by the article 112-5 of the Defined Benefit Enterprise Pension Plan Law, the parent company contributed (Y)115,294 million ($1,036 million) in cash, equivalent to the difference between the minimum funding amount required by the Law and the amount of net assets of the employee pension fund as at its dissolution. This contribution did not have any impact on Toyota's consolidated income statement. At the meeting on November 5, 2003, the Board of Directors of the parent company approved to repurchase treasury stock from the market, based on the resolution of the Ordinary Shareholders' Meeting held on June 26, 2003, in order to improve its capital efficiency and implement its capital policy flexibly in response to the business environment. During the repurchasing periods, which were November 27, 2003 and from December 2, 2003 to December 15, 2003, the parent company repurchased 40,000 thousand shares of its common stock amounting to (Y)132, 203 million. -----END PRIVACY-ENHANCED MESSAGE-----