20-F

As filed with the U.S. Securities and Exchange Commission on June 25, 2018

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

(Mark One)

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: March 31, 2018

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-14948

TOYOTA JIDOSHA KABUSHIKI KAISHA

(Exact Name of Registrant as Specified in its Charter)

TOYOTA MOTOR CORPORATION

(Translation of Registrant’s Name into English)

Japan

(Jurisdiction of Incorporation or Organization)

1 Toyota-cho, Toyota City

Aichi Prefecture 471-8571

Japan

+81 565 28-2121

(Address of Principal Executive Offices)

Nobukazu Takano

Telephone number: +81 565 28-2121

Facsimile number: +81 565 23-5800

Address: 1 Toyota-cho, Toyota City, Aichi Prefecture 471-8571, Japan

(Name, telephone, e-mail and/or facsimile number and address of registrant’s contact person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of Each Class:	Name of Each Exchange on Which Registered:
American Depositary Shares*	The New York Stock Exchange
Common Stock**

* American Depositary Receipts evidence American Depositary Shares, each American Depositary Share representing two shares of the registrant’s Common Stock.

** No par value. Not for trading, but only in connection with the registration of American Depositary Shares, pursuant to the requirements of the U.S. Securities and Exchange Commission.

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: 2,909,923,992 shares of common stock (including 45,002,629 shares of common stock in the form of American Depositary Shares) and 47,100,000 First Series Model AA class shares as of March 31, 2018

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act: Yes  ☒    No  ☐

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934: Yes  ☐    No  ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files): Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  ☒	Accelerated filer  ☐	Non-accelerated filer  ☐
		Emerging growth company  ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act: ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP  ☒             International Financial Reporting Standards as issued by the International Accounting Standards Board  ☐            Other  ☐

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow: Item  17  ☐    Item  18  ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):Yes  ☐    No  ☒

TABLE OF CONTENTS

ITEM 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS	1
ITEM 2.	OFFER STATISTICS AND EXPECTED TIMETABLE	1
ITEM 3.	KEY INFORMATION	1
3.A	SELECTED FINANCIAL DATA	1
3.B	CAPITALIZATION AND INDEBTEDNESS	4
3.C	REASONS FOR THE OFFER AND USE OF PROCEEDS	4
3.D	RISK FACTORS	5
ITEM 4.	INFORMATION ON THE COMPANY	8
4.A	HISTORY AND DEVELOPMENT OF THE COMPANY	8
4.B	BUSINESS OVERVIEW	9
4.C	ORGANIZATIONAL STRUCTURE	54
4.D	PROPERTY, PLANTS AND EQUIPMENT	55
ITEM 4A.	UNRESOLVED STAFF COMMENTS	56
ITEM 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS	56
5.A	OPERATING RESULTS	56
5.B	LIQUIDITY AND CAPITAL RESOURCES	87
5.C	RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES	90
5.D	TREND INFORMATION	92
5.E	OFF-BALANCE SHEET ARRANGEMENTS	92
5.F	TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS	93
5.G	SAFE HARBOR	94
ITEM 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	94
6.A	DIRECTORS AND SENIOR MANAGEMENT	94
6.B	COMPENSATION	100
6.C	BOARD PRACTICES	101
6.D	EMPLOYEES	103
6.E	SHARE OWNERSHIP	103
ITEM 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	104
7.A	MAJOR SHAREHOLDERS	104
7.B	RELATED PARTY TRANSACTIONS	105
7.C	INTERESTS OF EXPERTS AND COUNSEL	106
ITEM 8.	FINANCIAL INFORMATION	106
8.A	CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION	106
8.B	SIGNIFICANT CHANGES	106
ITEM 9.	THE OFFER AND LISTING	107
9.A	LISTING DETAILS	107
9.B	PLAN OF DISTRIBUTION	107
9.C	MARKETS	107
9.D	SELLING SHAREHOLDERS	108
9.E	DILUTION	108
9.F	EXPENSES OF THE ISSUE	108
ITEM 10.	ADDITIONAL INFORMATION	108
10.A	SHARE CAPITAL	108
10.B	MEMORANDUM AND ARTICLES OF ASSOCIATION	108
10.C	MATERIAL CONTRACTS	116
10.D	EXCHANGE CONTROLS	116

10.E	TAXATION	117
10.F	DIVIDENDS AND PAYING AGENTS	123
10.G	STATEMENT BY EXPERTS	123
10.H	DOCUMENTS ON DISPLAY	123
10.I	SUBSIDIARY INFORMATION	123
ITEM 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	123
ITEM 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	125
12.A	DEBT SECURITIES	125
12.B	WARRANTS AND RIGHTS	125
12.C	OTHER SECURITIES	125
12.D	AMERICAN DEPOSITARY SHARES	125
ITEM 13.	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	127
ITEM 14.	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	127
ITEM 15.	CONTROLS AND PROCEDURES	127
ITEM 16.	[RESERVED]	128
ITEM 16A.	AUDIT COMMITTEE FINANCIAL EXPERT	128
ITEM 16B.	CODE OF ETHICS	128
ITEM 16C.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	128
ITEM 16D.	EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES	130
ITEM 16E.	PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS	130
ITEM 16F.	CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT	131
ITEM 16G.	CORPORATE GOVERNANCE	131
ITEM 16H.	MINE SAFETY DISCLOSURE	134
ITEM 17.	FINANCIAL STATEMENTS	135
ITEM 18.	FINANCIAL STATEMENTS	135
ITEM 19.	EXHIBITS	136

As used in this annual report, the term “fiscal” preceding a year means the twelve-month period ended March 31 of the year referred to. All other references to years refer to the applicable calendar year, unless the context otherwise requires. As used herein, the term “Toyota” refers to Toyota Motor Corporation and its consolidated subsidiaries as a group, unless the context otherwise indicates.

In parts of this annual report, amounts reported in Japanese yen have been translated into U.S. dollars for the convenience of readers. Unless otherwise noted, the rate used for this translation was ¥106.24 = $1.00. This was the approximate exchange rate in Japan on March 31, 2018.

CAUTIONARY STATEMENT WITH RESPECT TO FORWARD-LOOKING STATEMENTS

Written forward-looking statements may appear in documents filed with the U.S. Securities and Exchange Commission, or the SEC, including this annual report, documents incorporated by reference, reports to shareholders and other communications.

The U.S. Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking information to encourage companies to provide prospective information about themselves without fear of litigation so long as the information is identified as forward looking and is accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those projected in the information. Toyota relies on this safe harbor in making forward-looking statements.

Forward-looking statements appear in a number of places in this annual report and include statements regarding Toyota’s current intent, belief, targets or expectations or those of its management. In many, but not all cases, words such as “aim,” “anticipate,” “believe,” “estimate,” “expect,” “hope,” “intend,” “may,” “plan,” “predict,” “probability,” “risk,” “should,” “will,” “would,” and similar expressions, are used as they relate to Toyota or its management, to identify forward-looking statements. These statements reflect Toyota’s current views with respect to future events and are subject to risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may vary materially from those which are anticipated, aimed at, believed, estimated, expected, intended or planned.

Forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may differ from those in forward-looking statements as a result of various factors. Important factors that could cause actual results to differ materially from estimates or forecasts contained in the forward-looking statements are identified in “Risk Factors” and elsewhere in this annual report, and include, among others:

(i) changes in economic conditions, market demand, and the competitive environment affecting the automotive markets in Japan, North America, Europe, Asia and other markets in which Toyota operates;

(ii) fluctuations in currency exchange rates, particularly with respect to the value of the Japanese yen, the U.S. dollar, the euro, the Australian dollar, the Russian ruble, the Canadian dollar and the British pound, and interest rates fluctuations;

(iii) changes in funding environment in financial markets and increased competition in the financial services industry;

(iv) Toyota’s ability to market and distribute effectively;

(v) Toyota’s ability to realize production efficiencies and to implement capital expenditures at the levels and times planned by management;

(vi) changes in the laws, regulations and government policies in the markets in which Toyota operates that affect Toyota’s automotive operations, particularly laws, regulations and government policies relating to vehicle safety including remedial measures such as recalls, trade, environmental protection, vehicle emissions and vehicle fuel economy, as well as changes in laws, regulations and government policies that affect Toyota’s other operations, including the outcome of current and future litigation and other legal proceedings, government proceedings and investigations;

(vii) political and economic instability in the markets in which Toyota operates;

(viii) Toyota’s ability to timely develop and achieve market acceptance of new products that meet customer demand;

(ix) any damage to Toyota’s brand image;

(x) Toyota’s reliance on various suppliers for the provision of supplies;

(xi) increases in prices of raw materials;

(xii) Toyota’s reliance on various digital and information technologies;

(xiii) fuel shortages or interruptions in electricity, transportation systems, labor strikes, work stoppages or other interruptions to, or difficulties in, the employment of labor in the major markets where Toyota purchases materials, components and supplies for the production of its products or where its products are produced, distributed or sold; and

(xiv) the impact of natural calamities including the negative effect on Toyota’s vehicle production and sales.

PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. KEY INFORMATION

3.A SELECTED FINANCIAL DATA

You should read the U.S. GAAP selected consolidated financial information presented below together with “Operating and Financial Review and Prospects” and Toyota’s consolidated financial statements contained in this annual report.

U.S. GAAP Selected Financial Data

The following selected financial data have been derived from Toyota’s consolidated financial statements. These financial statements were prepared in accordance with U.S. GAAP.

	Year Ended March 31,
	2014			2015			2016			2017			2018
	(Yen in millions, except share and per share data)
Consolidated Statement of Income Data:
Automotive:
Revenues		23,781,404			25,062,129			25,977,416			25,081,847			26,397,940
Operating income		1,938,778			2,325,310			2,448,998			1,692,973			2,011,135
Financial Services:
Revenues		1,421,047			1,661,149			1,896,224			1,823,600			2,017,008
Operating income		294,891			361,833			339,226			222,428			285,546
All Other:
Revenues		1,151,280			1,255,791			1,177,387			1,321,052			1,646,118
Operating income		64,270			65,650			66,507			81,327			100,812
Elimination of intersegment:
Revenues		(661,820	)		(744,548	)		(647,909	)		(629,306	)		(681,556	)
Operating income		(5,827	)		(2,229	)		(760	)		(2,356	)		2,369
Total Company:
Revenues		25,691,911			27,234,521			28,403,118			27,597,193			29,379,510
Operating income		2,292,112			2,750,564			2,853,971			1,994,372			2,399,862
Income before income taxes and equity in earnings of affiliated companies		2,441,080			2,892,828			2,983,381			2,193,825			2,620,429
Net income attributable to Toyota Motor Corporation		1,823,119			2,173,338			2,312,694			1,831,109			2,493,983
Net income attributable to Toyota Motor Corporation per common share (yen):
Basic		575.30			688.02			741.36			605.47			842.00
Diluted		574.92			687.66			735.36			599.22			832.78
Shares used in computing net income attributable to Toyota Motor Corporation per common share, basic (in thousands)		3,168,989			3,158,851			3,111,306			3,008,088			2,947,365
Shares used in computing net income attributable to Toyota Motor Corporation per common share, diluted (in thousands)		3,170,911			3,160,429			3,144,947			3,055,826			2,994,766

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	Year Ended March 31,
	2014		2015		2016		2017		2018
	(Yen in millions, except per share and numbers of vehicles sold data)
Consolidated Balance Sheet Data (end of period):
Total Assets:		41,437,473		47,729,830		47,427,597		48,750,186		50,308,249
Short-term debt, including current portion of long-term debt		7,780,483		8,963,492		8,521,088		9,244,131		9,341,190
Long-term debt, less current portion		8,546,910		10,014,395		9,772,065		9,911,596		10,006,374
Toyota Motor Corporation shareholders’ equity		14,469,148		16,788,131		16,746,935		17,514,812		18,735,982
Common stock		397,050		397,050		397,050		397,050		397,050
Other Data:
Dividends per share (yen)		165.0		200.0		210.0		210.0		220.0
Number of vehicles sold
Japan		2,365,410		2,153,694		2,059,093		2,273,962		2,255,313
North America		2,529,398		2,715,173		2,839,229		2,837,334		2,806,467
Europe		844,003		859,038		844,412		924,560		968,077
Asia		1,608,355		1,488,922		1,344,836		1,587,822		1,542,806
Other*		1,768,867		1,755,037		1,593,758		1,347,182		1,391,731
Worldwide total		9,116,033		8,971,864		8,681,328		8,970,860		8,964,394

* “Other” consists of Central and South America, Oceania, Africa and the Middle East, etc.

Dividend Information

Toyota normally pays dividends twice per year, including an interim dividend and a year-end dividend. Toyota’s articles of incorporation provide that retained earnings can be distributed as dividends pursuant to a resolution of its board of directors. Toyota’s board of directors resolves to pay year-end dividends to holders of common shares and registered pledgees of common shares of record as of March 31, the record date, in each year.

At the 111th Ordinary General Shareholders’ Meeting held in June 2015, Toyota’s shareholders approved amendments to Toyota’s articles of incorporation permitting the issuance of Model AA Class Shares in the future. The articles of incorporation currently provide that in the event that Toyota pays a year-end dividend to holders of common shares, it will pay a year-end dividend to any holders of Model AA Class Shares or registered pledgees of Model AA Class Shares of record as of the record date for the year-end dividend, in the amount payable on the Model AA Class Shares pursuant to their terms (“AA Dividends”), in preference to holders of common shares or registered pledgees of common shares.

In addition to these year-end dividends, Toyota may pay an interim dividend in the form of cash distributions from its distributable surplus to holders of common shares and pledgees of common shares of record as of September 30, the record date, in each year by a resolution of its board of directors. The articles of incorporation currently provide that in the event that Toyota pays such interim dividends, Toyota will pay an amount equivalent to one-half of the AA Dividends (“AA Interim Dividends”) as an interim dividend to any holders of Model AA Class Shares or registered pledgees of Model AA Class Shares of record as of the record date for the interim dividend, in preference to holders of common shares or registered pledgees of common shares.

If the amount of the dividends from surplus paid to holders of Model AA Class Shares or registered pledgees of Model AA Class Shares is less than the prescribed amount of AA Dividends in any fiscal year, the amount of the shortfall will be carried forward to and accumulate in the following fiscal year and thereafter. Dividends from surplus will be paid to holders of Model AA Class Shares or registered pledgees of Model AA Class Shares in preference to the payment of interim and year-end dividends until such payment reaches the amount of the accumulated unpaid dividends on the Model AA Class Shares.

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For a further discussion of Model AA Class Shares, please see “Additional Information—Memorandum and Articles of Association.”

In addition, under the Companies Act of Japan (the “Companies Act”), dividends may be paid to holders of common shares and pledgees of record of common shares as of any record date, other than those specified above, as set forth in Toyota’s articles of incorporation or as determined by its board of directors from time to time. Under the Companies Act, dividends may be distributed in cash or (except in the case of interim dividends mentioned in the third preceding paragraph) in kind, subject to limitations on distributable surplus and to certain other conditions.

The following table sets forth the dividends declared per common share by Toyota for each of the periods shown. The periods shown are the six months ended on that date. The U.S. dollar equivalents for the cash dividends shown are based on the noon buying rate for Japanese yen on the last date of each period set forth below.

	Cash Dividends per Common Share
Period Ended	Yen		U.S. dollars
September 30, 2012		30.0		0.38
March 31, 2013		60.0		0.63
September 30, 2013		65.0		0.66
March 31, 2014		100.0		0.97
September 30, 2014		75.0		0.68
March 31, 2015		125.0		1.04
September 30, 2015		100.0		0.83
March 31, 2016		110.0		0.97
September 30, 2016		100.0		0.98
March 31, 2017		110.0		0.98
September 30, 2017		100.0		0.88
March 31, 2018		120.0		1.12

Toyota deems the benefit of its shareholders as one of its priority management policies, and it continues to work to improve its corporate structure to realize sustainable growth in order to enhance its corporate value. Toyota will strive to continue to pay stable dividends on its common shares aiming at a consolidated dividend payout ratio, defined as dividends per common share divided by net income attributable to Toyota Motor Corporation per common share, of 30% while giving due consideration to factors such as business results for each term, investment plans and its cash reserves. Toyota will pay dividends on the First Series Model AA Class Shares in accordance with a prescribed calculation method.

In order to successfully compete in this highly competitive industry, Toyota plans to utilize its internal funds for the early commercialization of technologies for next-generation environment and safety giving priority to customer safety and sense of security. Considering these factors, with respect to the dividends for fiscal 2018, Toyota has determined to pay a year-end dividend of 120 yen per common share by a resolution of the board of directors pursuant to Toyota’s articles of incorporation. As a result, combined with the interim dividend of 100 yen per common share, the annual dividend will be 220 yen per common share, and the total amount of the dividends on common shares for the year will be 642.6 billion yen. Furthermore, through repurchasing shares, Toyota will return capital to shareholders and promote capital efficiency and agile capital policy in view of the business environment.

In fiscal 2018, Toyota repurchased 33 million common shares, for an aggregate purchase price of 249.9 billion yen, in order to return to shareholders the profits derived from Toyota’s business operations in the interim period.

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Furthermore, Toyota has determined to repurchase 55 million common shares (maximum), for an aggregate purchase price of 300.0 billion yen (maximum), in order to return to shareholders the profits for the fiscal year ended March 31, 2018 by a resolution of the board of directors on May 9, 2018.

Exchange Rates

In parts of this annual report, yen amounts have been translated into U.S. dollars for the convenience of investors. Unless otherwise noted, the rate used for the translations was ¥106.24 = $1.00. This was the approximate exchange rate in Japan on March 31, 2018.

The following table sets forth information regarding the noon buying rates for Japanese yen in New York City as announced for customs purposes by the Federal Reserve Bank of New York expressed in Japanese yen per $1.00 during the periods shown. At the end of May 2018, the noon buying rate was ¥108.73 = $1.00. The average exchange rate for the periods shown is the average of the month-end rates during the period.

Fiscal Year Ended or Ending March 31,	At End of Period		Average (of month-end rates)		High		Low
			(¥ per $1.00)
2014		102.98		100.46		105.25		92.96
2015		119.96		110.78		121.50		101.26
2016		112.42		120.13		125.58		111.30
2017		111.41		108.31		118.32		100.07
2018		106.20		110.70		114.25		104.83
2019 (through May 31, 2018)		108.73		109.01		111.08		105.99
Month Ended					High		Low
					(¥ per $1.00)
December 31, 2017						113.62		111.88
January 31, 2018						113.18		108.38
February 28, 2018						110.40		106.10
March 31, 2018						106.91		104.83
April 30, 2018						109.33		105.99
May 31, 2018						111.08		108.62

Fluctuations in the exchange rate between the Japanese yen and the U.S. dollar will affect the dollar equivalent of the price of the shares on the Japanese stock exchanges. As a result, exchange rate fluctuations are likely to affect the market price of the American Depositary Shares (“ADSs”) on the New York Stock Exchange (“NYSE”). Toyota will declare any cash dividends on shares of capital stock in Japanese yen. Exchange rate fluctuations will also affect the U.S. dollar amounts received on conversion of cash dividends.

Exchange rate fluctuations can also materially affect Toyota’s reported operating results. In particular, a strengthening of the Japanese yen against the U.S. dollar can have a material adverse effect on Toyota’s reported operating results. For a further discussion of the effects of currency rate fluctuations on Toyota’s operating results, please see “Operating and Financial Review and Prospects — Operating Results — Overview — Currency Fluctuations.”

3.B CAPITALIZATION AND INDEBTEDNESS

Not applicable.

3.C REASONS FOR THE OFFER AND USE OF PROCEEDS

Not applicable.

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3.D RISK FACTORS

Industry and Business Risks

The worldwide automotive market is highly competitive.

The worldwide automotive market is highly competitive. Toyota faces intense competition from automotive manufacturers in the markets in which it operates. Although the global economy continues to recover gradually, competition in the automotive industry has further intensified amidst difficult overall market conditions. In addition, competition is likely to further intensify in light of further continuing globalization in the worldwide automotive industry, possibly resulting in industry reorganizations. Factors affecting competition include product quality and features, safety, reliability, fuel economy, the amount of time required for innovation and development, pricing, customer service and financing terms. Increased competition may lead to lower vehicle unit sales, which may result in a further downward price pressure and adversely affect Toyota’s financial condition and results of operations. Toyota’s ability to adequately respond to the recent rapid changes in the automotive market and to maintain its competitiveness will be fundamental to its future success in existing and new markets and to maintain its market share. There can be no assurances that Toyota will be able to compete successfully in the future.

The worldwide automotive industry is highly volatile.

Each of the markets in which Toyota competes has been subject to considerable volatility in demand. Demand for vehicles depends to a large extent on economic, social and political conditions in a given market and the introduction of new vehicles and technologies. As Toyota’s revenues are derived from sales in markets worldwide, economic conditions in such markets are particularly important to Toyota.

Reviewing the general economic environment for the fiscal year ended March 2018, the world economy has continued its moderate recovery due to the global expansion of trade and production and solid domestic demand. The Japanese economy has been on a moderate recovery due to improvements in employment and income conditions. For the automotive industry, although markets have progressed in a steady manner in the developed countries and expanded in China, markets in some resource-rich countries have slowed down.

The changes in demand for automobiles are continuing, and it is unclear how this situation will transition in the future. Toyota’s financial condition and results of operations may be adversely affected if the changes in demand for automobiles continues or progresses further. Demand may also be affected by factors directly impacting vehicle price or the cost of purchasing and operating vehicles such as sales and financing incentives, prices of raw materials and parts and components, cost of fuel and governmental regulations (including tariffs, import regulation and other taxes). Volatility in demand may lead to lower vehicle unit sales, which may result in downward price pressure and adversely affect Toyota’s financial condition and results of operations.

Toyota’s future success depends on its ability to offer new, innovative and competitively priced products that meet customer demand on a timely basis.

Meeting customer demand by introducing attractive new vehicles and reducing the amount of time required for product development are critical to automotive manufacturers. In particular, it is critical to meet customer demand with respect to quality, safety and reliability. The timely introduction of new vehicle models, at competitive prices, meeting rapidly changing customer preferences and demand is more fundamental to Toyota’s success than ever, as the automotive market is rapidly transforming in light of the changing global economy. There is no assurance, however, that Toyota will adequately and appropriately respond to changing customer preferences and demand with respect to quality, safety, reliability, styling and other features in a timely manner. Even if Toyota succeeds in perceiving customer preferences and demand, there is no assurance that Toyota will be capable of developing and manufacturing new, price competitive products in a timely manner with its available technology, intellectual property, sources of raw materials and parts and components, and production

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capacity, including cost reduction capacity. Further, there is no assurance that Toyota will be able to implement capital expenditures at the level and times planned by management. Toyota’s inability to develop and offer products that meet customers’ preferences and demand with respect to quality, safety, reliability, styling and other features in a timely manner could result in a lower market share and reduced sales volumes and margins, and may adversely affect Toyota’s financial condition and results of operations.

Toyota’s ability to market and distribute effectively is an integral part of Toyota’s successful sales.

Toyota’s success in the sale of vehicles depends on its ability to market and distribute effectively based on distribution networks and sales techniques tailored to the needs of its customers. There is no assurance that Toyota will be able to develop sales techniques and distribution networks that effectively adapt to changing customer preferences or changes in the regulatory environment in the major markets in which it operates. Toyota’s inability to maintain well-developed sales techniques and distribution networks may result in decreased sales and market share and may adversely affect its financial condition and results of operations.

Toyota’s success is significantly impacted by its ability to maintain and develop its brand image.

In the highly competitive automotive industry, it is critical to maintain and develop a brand image. In order to maintain and develop a brand image, it is necessary to further increase customers’ confidence by providing safe, high-quality products that meet customer preferences and demand. If Toyota is unable to effectively maintain and develop its brand image as a result of its inability to provide safe, high-quality products or as a result of the failure to promptly implement safety measures such as recalls when necessary, vehicle unit sales and/or sale prices may decrease, and as a result revenues and profits may not increase as expected or may decrease, adversely affecting its financial condition and results of operations.

Toyota relies on suppliers for the provision of certain supplies including parts, components and raw materials

Toyota purchases supplies including parts, components and raw materials from a number of external suppliers located around the world. For some supplies, Toyota relies on a single supplier or a limited number of suppliers, whose replacement with another supplier may be difficult. Inability to obtain supplies from a single or limited source supplier may result in difficulty obtaining supplies and may restrict Toyota’s ability to produce vehicles. Furthermore, even if Toyota were to rely on a large number of suppliers, first-tier suppliers with whom Toyota directly transacts may in turn rely on a single second-tier supplier or limited second-tier suppliers. Toyota’s ability to continue to obtain supplies from its suppliers in a timely and cost-effective manner is subject to a number of factors, some of which are not within Toyota’s control. These factors include the ability of Toyota’s suppliers to provide a continued source of supply, and Toyota’s ability to effectively compete and obtain competitive prices from suppliers. A loss of any single or limited source supplier or inability to obtain supplies from suppliers in a timely and cost-effective manner could lead to increased costs or delays or suspensions in Toyota’s production and deliveries, which could have an adverse effect on Toyota’s financial condition and results of operations.

The worldwide financial services industry is highly competitive.

The worldwide financial services industry is highly competitive^. Increased competition in automobile financing may lead to decreased margins. A decline in Toyota’s vehicle unit sales, an increase in residual value risk due to lower used vehicle prices, an increase in the ratio of credit losses and increased funding costs are additional factors which may impact Toyota’s financial services operations. If Toyota is unable to adequately respond to the changes and competition in automobile financing, Toyota’s financial services operations may adversely affect its financial condition and results of operations.

Toyota’s operations and vehicles rely on various digital and information technologies.

Toyota depends on various information technology networks and systems, some of which are managed by third parties, to process, transmit and store electronic information, including sensitive data, and to manage or

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support a variety of business processes and activities, including manufacturing, research and development, supply chain management, sales and accounting. In addition, Toyota’s vehicles may rely on various digital and information technologies, including information service and driving assistance functions. Despite security measures, Toyota’s digital and information technology networks and systems may be vulnerable to damage, disruptions or shutdowns due to attacks by hackers, computer viruses, breaches due to unauthorized use, errors or malfeasance by employees and others who have or gain access to the networks and systems Toyota depends on, service failures or bankruptcy of third parties such as software development or cloud computing vendors, power shortages and outages, and utility failures or other catastrophic events like natural disasters. Such incidents could materially disrupt critical operations, disclose sensitive data, interfere with information services and driving assistance functions in Toyota’s vehicles, and/or give rise to legal claims or proceedings, liability or regulatory penalties under applicable laws, which could have an adverse effect on Toyota’s brand image and its financial condition and results of operations.

Financial Market and Economic Risks

Toyota’s operations are subject to currency and interest rate fluctuations.

Toyota is sensitive to fluctuations in foreign currency exchange rates and is principally exposed to fluctuations in the value of the Japanese yen, the U.S. dollar and the euro and, to a lesser extent, the Australian dollar, the Russian ruble, the Canadian dollar and the British pound. Toyota’s consolidated financial statements, which are presented in Japanese yen, are affected by foreign currency exchange fluctuations through translation risk, and changes in foreign currency exchange rates may also affect the price of products sold and materials purchased by Toyota in foreign currencies through transaction risk. In particular, strengthening of the Japanese yen against the U.S. dollar can have an adverse effect on Toyota’s operating results.

Toyota believes that its use of certain derivative financial instruments including foreign exchange forward contracts and interest rate swaps and increased localized production of its products have reduced, but not eliminated, the effects of interest rate and foreign currency exchange rate fluctuations. Nonetheless, a negative impact resulting from fluctuations in foreign currency exchange rates and changes in interest rates may adversely affect Toyota’s financial condition and results of operations. For a further discussion of currency and interest rate fluctuations and the use of derivative financial instruments, see “Operating and Financial Review and Prospects — Operating Results — Overview — Currency Fluctuations,” “Quantitative and Qualitative Disclosures About Market Risk,” and notes 21 and 22 to Toyota’s consolidated financial statements.

High prices of raw materials and strong pressure on Toyota’s suppliers could negatively impact Toyota’s profitability.

Increases in prices for raw materials that Toyota and Toyota’s suppliers use in manufacturing their products or parts and components such as steel, precious metals, non-ferrous alloys including aluminum, and plastic parts, may lead to higher production costs for parts and components. This could, in turn, negatively impact Toyota’s future profitability because Toyota may not be able to pass all those costs on to its customers or require its suppliers to absorb such costs.

A downturn in the financial markets could adversely affect Toyota’s ability to raise capital.

Should the world economy suddenly deteriorate, a number of financial institutions and investors will face difficulties in providing capital to the financial markets at levels corresponding to their own financial capacity, and, as a result, there is a risk that companies may not be able to raise capital under terms that they would expect to receive with their creditworthiness. If Toyota is unable to raise the necessary capital under appropriate conditions on a timely basis, Toyota’s financial condition and results of operations may be adversely affected.

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Regulatory, Legal, Political and Other Risks

The automotive industry is subject to various governmental regulations.

The worldwide automotive industry is subject to various laws and governmental regulations including those related to vehicle safety and environmental matters such as emission levels, fuel economy, noise and pollution. In particular, automotive manufacturers such as Toyota are required to implement safety measures such as recalls for vehicles that do not or may not comply with the safety standards of laws and governmental regulations. In addition, Toyota may, in order to reassure its customers of the safety of Toyota’s vehicles, decide to voluntarily implement recalls or other safety measures even if the vehicle complies with the safety standards of relevant laws and governmental regulations. Many governments also impose tariffs and other trade barriers, taxes and levies, or enact price or exchange controls. Toyota has incurred, and expects to incur in the future, significant costs in complying with these regulations. If Toyota launches products that result in safety measures such as recalls, Toyota may incur various costs including significant costs for free repairs. Furthermore, new legislation or changes in existing legislation may also subject Toyota to additional expenses in the future. If Toyota incurs significant costs related to implementing safety measures or meeting laws and governmental regulations, Toyota’s financial condition and results of operations may be adversely affected.

Toyota may become subject to various legal proceedings.

As an automotive manufacturer, Toyota may become subject to legal proceedings in respect of various issues, including product liability and infringement of intellectual property. Toyota may also be subject to legal proceedings brought by its shareholders and governmental proceedings and investigations. Toyota is in fact currently subject to a number of pending legal proceedings and government investigations. A negative outcome in one or more of these pending legal proceedings could adversely affect Toyota’s financial condition and results of operations. For a further discussion of governmental regulations, see “Information on the Company — Business Overview — Governmental Regulation, Environmental and Safety Standards” and for legal proceedings, please see “Information on the Company — Business Overview — Legal Proceedings.”

Toyota may be adversely affected by natural calamities, political and economic instability, fuel shortages or interruptions in social infrastructure, wars, terrorism and labor strikes.

Toyota is subject to various risks associated with conducting business worldwide. These risks include natural calamities; political and economic instability; fuel shortages; interruption in social infrastructure including energy supply, transportation systems, gas, water, or communication systems resulting from natural hazards or technological hazards; wars; terrorism; labor strikes and work stoppages. Should the major markets in which Toyota purchases materials, parts and components and supplies for the manufacture of Toyota products or in which Toyota’s products are produced, distributed or sold be affected by any of these events, it may result in disruptions and delays in the operations of Toyota’s business. Should significant or prolonged disruptions or delays related to Toyota’s business operations occur, it may adversely affect Toyota’s financial condition and results of operations.

ITEM 4. INFORMATION ON THE COMPANY

4.A HISTORY AND DEVELOPMENT OF THE COMPANY

Toyota Motor Corporation is a limited liability, joint-stock company incorporated under the Commercial Code of Japan and continues to exist under the Companies Act. Toyota commenced operations in 1933 as the automobile division of Toyota Industries Corporation (formerly, Toyoda Automatic Loom Works, Ltd.). Toyota became a separate company in August 1937. In 1982, the Toyota Motor Company and Toyota Motor Sales merged into one company, the Toyota Motor Corporation of today. As of March 31, 2018, Toyota operated through 606 consolidated subsidiaries (including variable interest entities) and 199 affiliated companies, of which 57 companies were accounted for through the equity method.

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See “— Business Overview — Capital Expenditures and Divestitures” for a description of Toyota’s principal capital expenditures and divestitures between April 1, 2015 and March 31, 2018 and information concerning Toyota’s principal capital expenditures and divestitures currently in progress.

Toyota’s principal executive offices are located at 1 Toyota-cho, Toyota City, Aichi Prefecture 471-8571, Japan. Toyota’s telephone number in Japan is +81-565-28-2121.

4.B BUSINESS OVERVIEW

Toyota primarily conducts business in the automotive industry. Toyota also conducts business in finance and other industries. Toyota sold 8,964 thousand vehicles in fiscal 2018 on a consolidated basis. Toyota had net revenues of ¥29,379.5 billion and net income attributable to Toyota Motor Corporation of ¥2,493.9 billion in fiscal 2018.

Toyota’s business segments are automotive operations, financial services operations and all other operations. The following table sets forth Toyota’s sales to external customers in each of its business segments for each of the past three fiscal years.

	Yen in millions
	Year Ended March 31,
	2016		2017		2018
Automotive		25,923,813		25,032,229		26,347,229
Financial Services		1,854,007		1,783,697		1,959,234
All Other		625,298		781,267		1,073,047

Toyota’s automotive operations include the design, manufacture, assembly and sale of passenger vehicles, minivans and commercial vehicles such as trucks and related parts and accessories. Toyota’s financial services business consists primarily of providing financing to dealers and their customers for the purchase or lease of Toyota vehicles. Toyota’s financial services business also provides retail installment credit and leasing through the purchase of installment and lease contracts originated by Toyota dealers. Related to Toyota’s automotive operations, Toyota is working towards having all of its vehicles become connected vehicles, creating new value and reforming businesses by utilizing big data obtained from those connected vehicles, and establishing new mobility services. Toyota’s all other operations business segment includes the design and manufacture of prefabricated housing and information technology related businesses including a web portal for automobile information called GAZOO.com, etc.

Toyota sells its vehicles in approximately 190 countries and regions. Toyota’s primary markets for its automobiles are Japan, North America, Europe and Asia. The following table sets forth Toyota’s sales to external customers in each of its geographical markets for each of the past three fiscal years.

	Yen in millions
	Year Ended March 31,
	2016		2017		2018
Japan		8,588,437		8,798,903		9,273,672
North America		10,822,772		10,033,419		10,347,266
Europe		2,507,292		2,517,601		2,940,243
Asia		4,475,623		4,279,617		4,497,374
Other*		2,008,994		1,967,653		2,320,955

* “Other” consists of Central and South America, Oceania, Africa and the Middle East.

During fiscal 2018, 25.2% of Toyota’s automobile unit sales on a consolidated basis were in Japan, 31.3% were in North America, 10.8% were in Europe and 17.2% were in Asia. The remaining 15.5% of consolidated unit sales were in other markets.

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The Worldwide Automotive Market

Toyota estimates that annual worldwide vehicle sales totaled approximately 97 million units in 2017.

Automobile sales are affected by a number of factors including:

• social, political and economic conditions;

• introduction of new vehicles and technologies; and

• costs incurred by customers to purchase and operate automobiles.

These factors can cause consumer demand to vary substantially from year to year in different geographic markets and in individual categories of automobiles.

In fiscal 2018, the U.S. saw steady employment growth as well as enhanced consumer spending, economies in Europe expanded at a solid pace under monetary easing measures, and Japan continued to experience favorable employment environment supporting consumption. In emerging markets, China continued to recover due to economic stimulus measures, which led to stronger growth of the global economy, while consumption in resource-rich countries has also been gradually recovering.

The automotive industry was also impacted by these economic trends. In 2017, with respect to developed countries, the automotive market contracted in the United States from the effect of interest-rate hikes, while on the other hand, it expanded in Europe. In addition, in Japan, demand expanded due primarily to the introduction of new models. The automotive markets in emerging countries, including China, as a whole also expanded.

In the medium- to long-term, Toyota expects the automotive market to continue growing driven principally by growth in China and other emerging markets. Global competition is expected to be severe, as competition in compact and low-price vehicles intensifies, and the pace of technological advancement and development of new products quickens, including in response to a heightened global awareness of the environment and more stringent fuel economy standards.

In 2017, China, North America, Europe and Asia were the world’s largest automotive markets. The share of each market across the globe, which Toyota estimates based on the available automobile sales data in each country and region information, was 30% for China, 22% for North America (21% excluding Mexico and Puerto Rico), 22% for Europe and 10% for Asia. In China, new vehicle sales increased to approximately 29.3 million units. In North America, new vehicle sales decreased from the previous year to approximately 20.9 million units. In Europe, new vehicle sales increased to approximately 20.7 million units. In Asia (including India but excluding Japan and China), new vehicle unit sales increased from the previous year to approximately 10 million units.

The worldwide automotive industry is affected significantly by government regulations aimed at reducing harmful effects on the environment, enhancing vehicle safety and improving fuel economy. These regulations have added to the cost of manufacturing vehicles. Many governments also mandate local procurement of parts and components and impose tariffs and other trade barriers, as well as price or exchange controls as a means of creating jobs, protecting domestic producers or influencing their balance of payments. Changes in regulatory requirements and other government-imposed restrictions can limit or otherwise burden an automaker’s operations. Government laws and regulations can also make it difficult to repatriate profits to an automaker’s home country.

The development of the worldwide automotive market includes the continuing globalization of automotive operations. Manufacturers seek to achieve globalization by localizing the design and manufacture of automobiles and their parts and components in the markets in which they are sold. By expanding production capabilities beyond their home markets, automotive manufacturers are able to reduce their exposure to fluctuations in foreign exchange rates as well as to trade restrictions and tariffs.

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Over the years, there have been many global business alliances and investments entered into between manufacturers in the global automotive industry. There are various reasons behind these transactions including the need to address excessive global capacity in the production of automobiles, and the need to reduce costs and improve efficiency by increasing the number of automobiles produced using common vehicle platforms and by sharing research and development expenses for environmental and other technology, the desire to expand a company’s global presence through increased size and the desire to expand into particular segments or geographic markets.

Toyota believes that its research and development initiatives, particularly the development of environmentally friendly new vehicle technologies, vehicle safety and information technology, provide it with a strategic advantage.

Toyota’s ability to compete in the global automotive industry will depend in part on Toyota’s successful implementation of its business strategy. This is subject to a number of factors, some of which are not in Toyota’s control. These factors are discussed in “Operating and Financial Review and Prospects” and elsewhere in this annual report.

Toyota Global Vision

In March 2011, Toyota unveiled its “Toyota Global Vision” corporate outline for the future, which serves not only to give direction to Toyota employees around the world, but also to convey such direction to customers and to the public at large. Toyota will work to achieve sustained growth through the realization of the following ideals which are parts of the Vision:

Toyota Global Vision

Toyota will lead the way to the future of mobility, enriching lives around the world with the safest and most responsible ways of moving people.

Through our commitment to quality, constant innovation and respect for the planet, we aim to exceed expectations and be rewarded with a smile.

We will meet challenging goals by engaging the talent and passion of people, who believe there is always a better way.

“The safest and most responsible ways of moving people”

• Safety is Toyota’s highest priority, and Toyota will continue to provide world-class safety.

• Toyota will also continue to contribute to environmental quality and to human happiness by using leading environmental technology and by deploying that technology in a growing line of vehicle models. At the same time, Toyota will work through the provision of products, sales and services that exceed customer expectation to offer a rewarding experience for customers.

“Enriching lives around the world”

• Toyota has been consistently true to its founding spirit of serving society through conscientious manufacturing, and it will continue working in that spirit to contribute to enhance the quality of life wherever it has operations.

• Toyota will strive to continue contributing to economic vitality wherever it has operations by generating stable employment and by participating in mutually beneficial business relationships with dealers and suppliers. It will also strive to continue to actively engage in initiatives for human resources development and the promotion of cultural activities of its host communities.

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“Lead the way to the future of mobility”

• Toyota will lead the industry in technological development that will spawn next-generation mobility. For example, it will explore possibilities in personal mobility and in the convergence of information technology for automobiles and “smart grids” for optimizing energy generation and consumption. Toyota will strive to offer products and services that match the needs in each market.

• Toyota will strive to advance environmental technology and develop low-carbon technologies and technologies for maximizing safety through interaction with the transport infrastructure to lay a foundation for sustainable and amenable future mobility.

“Our commitment to quality, constant innovation”

• Toyota is committed to providing quality vehicles that are highly reliable and driven with a sense of safety and reliability.

• Toyota will constantly reinvent itself and continue to engage in cutting-edge technology development. Toyota will work towards offering vehicles around the world that address the needs of today and of tomorrow at affordable prices.

“Respect for the planet”

• Toyota will continue working to minimize environmental impact in its manufacturing and other operations, as well as in its products.

• Toyota’s activities will include conserving energy and reducing output of carbon dioxide, as well as conserving material resources through recycling; it will also include establishing mindsets and production methods appropriate for coexistence with nature.

“Exceed expectations and be rewarded with a smile”

• Everyone at Toyota will continuously maintain a sense of gratitude to customers and will strive to earn smiles with products and services that are stimulating and inspiring and exceed customer expectations.

“There is always a better way”

• All Toyota employees will share the recognition that there is always a better way and share a commitment to continuous improvement, which are fundamental to The Toyota Way.

“Meet challenging goals by engaging the talent and passion of people”

• Toyota will nurture a corporate culture where teamwork and individual creativity thrive and where people will approach their work with pride and passion.

• Toyota will honor the spirit of diversity in recruiting, training and promoting capable individuals around the world. Human resources development at Toyota will continue to promote the transfer of the company’s monozukuri spirit of conscientious manufacturing and related skills and know-how from one generation to the next.

Based on these initiatives, the Toyota group will contribute to “enriching lives of communities” by providing “ever-better cars.” This is expected to encourage more customers to purchase Toyota cars and thereby lead to the establishment of a stable business base. The automotive industry is facing a time of profound transformation that could happen only once in a hundred years in response to significant technological innovation such as electrification, connected vehicles and automated driving. Toyota is committed to realizing a mobility society of the future that enables everyone to enjoy freedom of movement beyond the conventional concept of vehicles.

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Toyota Environmental Challenge 2050

Positioning responding to environmental issues as one of the most prioritized challenges for management, Toyota has tackled head-on activities such as the development and promotion of next-generation vehicles including hybrid vehicles (“HVs”) and fuel cell vehicles (“FCVs”), efficient production that puts less of a burden on the environment, the recycling of end-of-life vehicles and hybrid vehicle batteries, planting trees for the coexistence of humans and nature in harmony, and conservation of ecosystems.

However, in recent years, the seriousness and reach of environmental issues has increased, as evidenced by global warming, water shortages, resource depletion, and degradation of biodiversity. In response to the situation, Toyota believes it is necessary to take on new challenges that consider the world 20 or 30 years in the future, in order to remain closely aligned with the global environment. Accordingly, Toyota announced Toyota Environmental Challenge 2050 in October 2015.

In order to contribute to the realization of a sustainable society, the Toyota Environmental Challenge 2050 has set forth the following six challenges for Toyota to address. Those challenges are to reduce CO2 emissions from driving and producing, as well as throughout the lifecycle of, vehicles, and to ensure a net positive impact on the Earth and society toward 2050.

1. New Vehicle Zero CO2 Emissions Challenge

2. Life Cycle Zero CO2 Emissions Challenge

3. Plant Zero CO2 Emissions Challenge

4. Challenge of Minimizing and Optimizing Water Usage

5. Challenge of Establishing a Recycling-Based Society and Systems

6. Challenge of Establishing a Future Society in Harmony with Nature

Further strengthening collaboration with the Toyota group and all other stakeholders, Toyota will consolidate new ideas, dynamism and technology to tackle together the realization of a truly sustainable society from a long-term perspective.

Automotive Operations

Toyota’s revenues from its automotive operations were ¥26,397.9 billion in fiscal 2018, ¥25,081.8 billion in fiscal 2017 and ¥25,977.4 billion in fiscal 2016.

Toyota produces and sells passenger vehicles, minivans and commercial vehicles such as trucks. Toyota Motor Corporation’s subsidiary, Daihatsu Motor Co., Ltd. (“Daihatsu”), produces and sells mini-vehicles and compact cars. Hino Motors, Ltd. (“Hino”), also a subsidiary of Toyota Motor Corporation, produces and sells commercial vehicles such as trucks and buses. Toyota also manufactures automotive parts, components and accessories for its own use and for sale to others.

With an aim to strengthen competitiveness in the small car segment, on January 29, 2016, Toyota and Daihatsu entered into a share exchange agreement to make Daihatsu a wholly-owned subsidiary of Toyota as of August 1, 2016. From January 2017, Toyota and Daihatsu established the “Emerging-market Compact Car Company” to promote development of competitive products in emerging markets. Through planning and implementation of optimal strategies including combining their technical expertise and bases of operations, bold cost reduction and expansion of product lineups with a global brand strategy, Daihatsu will play a key role in developing globally competitive small cars of both brands based on the technology Daihatsu has developed through manufacturing of mini-vehicles.

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Vehicle Models

Toyota’s vehicles (produced by Toyota, Daihatsu and Hino) can be classified into three categories: HVs, conventional engine vehicles, and FCVs. Toyota’s product line-up includes subcompact and compact cars, mini-vehicles, mid-size, luxury, sports and specialty cars, recreational and sport-utility vehicles, pickup trucks, minivans, trucks and buses.

Hybrid Vehicles

The world’s first mass-produced hybrid car was Toyota’s Prius. It runs on an efficient combination of a gasoline engine and motor. This system allows the Prius to travel more efficiently than conventional engine vehicles of comparable size and performance. The hybrid design of the Prius also results in the output of 75% less emission than the maximum amount allowed by Japanese environmental regulations. Toyota views the Prius as the cornerstone of its emphasis on designing and producing eco-friendly automobiles.

In the last three years, Toyota has strengthened its hybrid lineup by introducing the fully remodeled Alphard HV and Vellfire HV in January 2015, the Sienta HV in June 2015, the fully remodeled RX-HV in September 2015 and the fully remodeled Prius in November 2015, as well as adding Auris HV in April 2016, Prius PHV and the new model C-HR HV in October 2016, the new model LC HV in March 2017, the fully remodeled Camry HV in June 2017, the fully remodeled LS HV in October 2017, JPN TAXI, which employs a newly developed LPG HV, in October 2017, the fully remodeled Avalon HV in April 2018, the fully remodeled Corolla HB HV in May 2018 and the fully remodeled Crown HV and Century HV in June 2018. In the area of HVs, where strong growth is seen, Toyota aims to continue its efforts to offer a diverse line-up of HVs, enhance engine power while improving fuel economy and otherwise work towards increasing the sales of HVs.

Fuel Cell Vehicles

Toyota began limited sales of a fuel cell vehicle in Japan and the United States in December 2002. Since then, Toyota has made advances by solving technological issues such as the above and worked towards the practical use of such solutions, culminating in the general sale of the world’s first mass produced fuel cell vehicle MIRAI in Japan beginning in December 2014, in the United States beginning in June 2015 and in Europe beginning in September 2015. Toyota also launched “SORA,” the first production model fuel cell bus to receive vehicle type certification in Japan, in March 2018.

Conventional Engine Vehicles

Subcompact and Compact

Toyota’s subcompact and compact cars include the four-door Corolla sedan, which is one of Toyota’s bestselling models. The Yaris, marketed as the Vitz in Japan, is a subcompact car designed to perform better and offer greater comfort than other compact cars available in the market with low emissions that are particularly attractive to European consumers. In Europe, Toyota introduced the fully remodeled Aygo in June 2014. In Japan, Toyota introduced, in addition to the Corolla and Vitz, the Prius C (named Aqua in Japan), as well as Passo, Roomy and Tank, which three vehicles are OEM vehicles supplied by Daihatsu. In India, Asia, China and other markets, Toyota introduced the Etios and Vios, as well as the AGYA and Rush, which are designed and manufactured by Daihatsu, and Yaris iA, which is designed and manufactured by Mazda Motor Corporation (“Mazda”).

Mini-Vehicles

Mini-vehicles are manufactured and sold by Daihatsu. Daihatsu manufactures mini-vehicles, passenger vehicles, commercial vehicles and auto parts. Mini-vehicles are passenger vehicles, vans or trucks with engine displacements of 660 cubic centimeters or less. Daihatsu sold approximately 586 thousand mini-vehicles and

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220 thousand automobiles on a consolidated basis during fiscal 2018. Daihatsu’s largest market is Japan, which accounted for approximately 80% of Daihatsu’s unit sales during fiscal 2018. From 2011, Toyota began to sell some mini-vehicles manufactured by Daihatsu under the Toyota brand.

Mid-Size

Toyota’s mid-size models include the Camry, which has been the bestselling passenger car in the United States for twenty of the past twenty-one calendar years (from 1997 to present) and also for the last sixteen consecutive years. The Camry was fully remodeled in June 2017. Camry sales in the United States for 2018 were approximately 387 thousand units (including Camry hybrids). In addition, Toyota’s other mid-size models include the REIZ for the Chinese market and the Avensis for the European market.

Luxury and Large

In North America, Europe, Japan and other regions, Toyota’s luxury lineup consists primarily of vehicles sold under the Lexus brand name. Lexus passenger car models include the LS, the GS, the ES, the IS, the CT, the LC and the RC. Lexus models also include the LX, the GX, the RX and the NX sold as luxury sport-utility vehicles. Toyota commenced sales of its luxury automobiles in Japan under the Lexus brand in August 2005. As of March 31, 2018, the Lexus brand lineup in Japan includes the LS, the GS, the IS, the CT, the LX, the RX, the NX, the LC and the RC. The Toyota brand’s full-size luxury car, the Avalon, was remodeled in April 2018, and the Crown was fully remodeled in June 2018. Toyota also fully remodeled the Century limousine in Japan in June 2018.

Sports and Specialty

In April 2012, Toyota introduced the 86 (called Scion FR-S in the U.S.), a compact sports car with a front-mounted engine and rear-wheel drive. In October 2014, Toyota introduced the RC coupe that leads the image of Lexus, which engages drivers on a sentimental level. In March 2017, Toyota introduced LC, the new model flagship coupe for Lexus.

Recreational and Sport-Utility Vehicles and Pickup Trucks

Toyota sells a variety of sport-utility vehicles and pickup trucks. Toyota’s sport-utility vehicles available in North America include the Sequoia, the 4Runner, the RAV4, the Highlander, the FJ Cruiser and the Land Cruiser, and pickup trucks available are the Tacoma and Tundra. The Tacoma, the Tundra, the Highlander and the Sequoia are manufactured in the United States. Toyota also offers four types of sport-utility vehicles under the Lexus brand, including the LX, the GX, the RX, and the NX. Toyota also manufactures the RX and RAV4 models in Canada. Toyota’s pickup truck, the Hilux, has been the bestselling model of all Toyota cars sold in Thailand. In July 2014, Toyota introduced the new NX model under the Lexus brand. In May 2015, Toyota introduced the fully remodeled Hilux and in September 2015, it introduced the fully remodeled RX of the Lexus brand. In December 2016, Toyota introduced C-HR, a model with a focus on both design and drive.

Minivans and Cabwagons

Toyota offers several basic models for the global minivan market. Its largest minivans in Japan, the Alphard and the Vellfire, were remodeled in January 2015. In addition, the Noah/Voxy was remodeled in January 2014 and the new model Esquire was introduced in October 2014 in Japan. The new model Calya, an original equipment manufacturing (“OEM”) vehicle by Daihatsu, was introduced in July 2016 in Indonesia. Toyota’s other minivan models include, in Japan, the Estima and the Sienta, and, in North America, the Sienna.

Trucks and Buses

Toyota’s product lineup includes trucks (including vans) up to a gross vehicle weight of five tons and micro-buses that are sold in Japan and in overseas markets. Toyota launched “SORA,” a production model fuel cell bus,

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in Japan in March 2018. Trucks and buses are also manufactured and sold by Hino, a subsidiary of Toyota. Hino’s product lineup includes large trucks with a gross vehicle weight of over eleven tons, medium trucks with a gross vehicle weight of between five and eleven tons and small trucks with a gross vehicle weight of up to five tons. Hino’s bus lineup includes medium to large buses used primarily as tour buses and public buses, as well as small buses and micro-buses.

Product Development

New cars introduced in Japan during fiscal 2018 and thereafter include the Hilux, the JPN TAXI and TOYOTA driving school vehicles. The remodeled car in Japan during fiscal 2018 and thereafter is the Camry HV. Remodeled cars outside of Japan during fiscal 2018 and thereafter include the Lexus LS, the Avalon and the Camry.

In addition, the IMV product lineup based on the IMV project to optimize global manufacturing and supply systems is a lineup of strategic multipurpose vehicles produced from a single platform to meet market demand. The IMV product lineup includes, as of March 31, 2017, the Hilux, Fortuner, and Innova, one or all of which are available in all regions.

Markets, Sales and Competition

Toyota’s primary markets are Japan, North America, Europe and Asia. The following table sets forth Toyota’s consolidated vehicle unit sales by geographic market for the periods shown. The vehicle unit sales below reflect vehicle sales made by Toyota to unconsolidated entities (recognized as sales under Toyota’s revenue recognition policy), including sales to unconsolidated distributors and dealers. Vehicles sold by Daihatsu and Hino are included in the vehicle unit sales figures set forth below.

	Year Ended March 31,
	2014					2015					2016					2017					2018
	Units		%			Units		%			Units		%			Units		%			Units		%
Market
Japan		2,365,410		26.0	%		2,153,694		24.0	%		2,059,093		23.7	%		2,273,962		25.4	%		2,255,313		25.2	%
North America		2,529,398		27.7			2,715,173		30.3			2,839,229		32.7			2,837,334		31.6			2,806,467		31.3
Europe		844,003		9.3			859,038		9.6			844,412		9.7			924,560		10.3			968,077		10.8
Asia		1,608,355		17.6			1,488,922		16.6			1,344,836		15.5			1,587,822		17.7			1,542,806		17.2
Other*		1,768,867		19.4			1,755,037		19.5			1,593,758		18.4			1,347,182		15.0			1,391,731		15.5
Total		9,116,033		100.0	%		8,971,864		100.0	%		8,681,328		100.0	%		8,970,860		100.0	%		8,964,394		100.0	%

* “Other” consists of Central and South America, Oceania, Africa and the Middle East, etc.

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The following table sets forth Toyota’s vehicle unit sales and market share in Japan, North America, Europe and Asia on a retail basis for the periods shown. Each market’s total sales and Toyota’s sales represent new vehicle registrations in the relevant year (except for the Asia market where vehicle registration does not necessarily apply). All information on Japan excludes mini-vehicles. The sales information contained below excludes unit sales by Daihatsu and Hino, each a consolidated subsidiary of Toyota. Vehicle unit sales in Asia do not include sales in China.

	(Thousands of Units)
	Fiscal Year Ended March 31,
	2014			2015			2016			2017			2018
Japan:
Total market sales (excluding mini-vehicles)		3,433			3,126			3,126			3,360			3,340
Toyota sales (retail basis, excluding mini-vehicles)		1,605			1,439			1,462			1,607			1,565
Toyota market share		46.7	%		46.0	%		46.8	%		47.8	%		46.9	%
	(Thousands of Units)
	Calendar Year Ended December 31,
	2013			2014			2015			2016			2017
North America:
Total market sales		18,514			19,597			20,804			21,191			20,887
Toyota sales (retail basis)		2,520			2,670			2,817			2,798			2,791
Toyota market share		13.6	%		13.6	%		13.5	%		13.2	%		13.4	%
Europe:
Total market sales		18,009			18,397			18,971			19,968			20,721
Toyota sales (retail basis)		848			888			874			928			1,002
Toyota market share		4.7	%		4.8	%		4.6	%		4.6	%		4.8	%
Asia (excluding China):
Total market sales		8,899			8,785			9,287			9,541			10,078
Toyota sales (retail basis)		1,427			1,324			1,249			1,305			1,318
Toyota market share		16.0	%		15.1	%		13.4	%		13.7	%		13.1	%

Japan

Japan is one of the leading countries with respect to technological advancements and improvements in the automotive industry and will continue to demonstrate such strength. Toyota strives to earn customer satisfaction by introducing products distinctive of Japan’s manufacturing ability such as value-added products including Lexus models, FCVs, plug-in hybrid vehicles (“PHVs”) and HVs, vehicles with 3-seat rows and mini-vehicles. Toyota’s consolidated vehicle sales in Japan in fiscal 2018 was 2,255 thousand units, a decrease of 19 thousand units in comparison with the previous year. Toyota endeavors to secure and maintain its large share of and position atop the Japanese market. Toyota held a domestic market share (excluding mini-vehicles) on a retail basis of 46.8% in fiscal 2016, 47.8% in fiscal 2017 and 46.9% in fiscal 2018.

Although Toyota’s principle is to conduct production in regions where it enjoys true competitiveness, it considers Japan to be the source of its good manufacturing practices. Toyota supports its operations worldwide through measures such as the development of new technologies and products, low-volume vehicles to complement local production, production of global vehicle models which straddle multiple regions and supporting overseas factories. Toyota will continue the implementation of the new platform and the new unit for the Toyota New Global Architecture (“TNGA”) globally, with Japan at the core. In Japan, Toyota is implementing flexible production based on market needs, in order to support its large share of domestic sales.

Since Toyota formed an alliance with SUBARU CORPORATION (“SUBARU”) in 2005, Toyota and SUBARU have utilized each other’s resources in development and production. In April 2008, in order to create

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synergy and to further strengthen competitiveness, Toyota, Daihatsu and SUBARU agreed on joint development of a compact rear-wheel-drive sports car and OEM supply with compact cars and mini-vehicles. In order to promote a smooth cooperation, SUBARU transferred 61 million SUBARU shares owned by SUBARU to Toyota in July 2008. As a result of this transfer, Toyota owns 16.5% of SUBARU issued shares. While Toyota vehicles have been manufactured at SUBARU’s North American production center, Subaru of Indiana Automotive, Inc. (“SIA”), since 2007, Toyota and SUBARU ceased such production in May 2016, and the collaboration between Toyota and SUBARU has shifted to collaboration focusing on products and technology.

In 2011, Toyota and BMW Group agreed to conduct collaborative research in the field of next-generation lithium-ion battery technologies and for BMW to supply diesel engines to Toyota Motor Europe, Toyota’s European subsidiary. In 2013, as part of their strategic long-term cooperation in the field of sustainable mobility, Toyota and BMW Group entered into agreements for the joint development of a fuel cell system, joint development of architecture and components for sports vehicles and joint research and development of lightweight technologies. The two companies completed collaborative research on lithium-air batteries, a post-lithium-battery solution as planned by conducting the second phase of collaborative research into next-generation lithium-ion battery cells.

Toyota and Mazda have been engaged in collaboration such as the licensing of Toyota’s hybrid technologies to Mazda and the production of compact cars for Toyota at Mazda’s plant in Mexico. In May 2015, Toyota and Mazda entered into an agreement to build a mutually beneficial long-term partnership that will result in more appealing cars that meet the diverse needs and tastes of customers around the world, and after subsequent discussions, Toyota signed an agreement to enter a business and capital alliance with Mazda in August 2017. Based on this business and capital alliance, Toyota and Mazda mutually acquired shares of each other in value of 50 billion yen for each company in October 2017. Toyota also established EV C.A. Spirit Corporation with Mazda and Denso Corporation (“Denso”) to jointly develop basic structural technologies for electric vehicles (“EVs”). Furthermore, in March 2018, Toyota and Mazda established Mazda Toyota Manufacturing, U.S.A., Inc., a new joint venture company, to produce vehicles in the United States starting in 2021.

In February 2017, Toyota and Suzuki Motor Corporation (“Suzuki”), aiming to contribute jointly to resolution of social issues and achievement of the sound and sustainable development of an automobile-based society, entered into a memorandum of understanding on beginning concrete examination of a business partnership. In November 2017, the two companies agreed to move forward in considering a cooperative structure for introducing EVs in the Indian market around 2020, and in March 2018, concluded a basic agreement toward the mutual supply of hybrid and other vehicles with the aim of bolstering both companies’ product lineups and encouraging competition in the Indian automotive market. In May 2018, Toyota and Suzuki agreed to start discussing joint projects in the fields of technological development, vehicle production and market development. Specifically, the discussions will include matters such as Denso and Toyota providing Suzuki with technological support for a compact, ultrahigh-efficiency powertrain to be developed mainly by Suzuki, Toyota Kirloskar Motor Private Ltd. producing models developed by Suzuki for sale, under both the Toyota and Suzuki brands, in India, and supplying models developed by Suzuki to African markets and advancing cooperation in the domains of logistics and services for such models.

In December 2017, Toyota and Panasonic entered into an agreement to begin studying the feasibility of a joint automotive prismatic battery business for the purpose of contributing to finding solutions for pressing societal issues such as global warming, air pollution, the depletion of natural resources and energy security, as well as addressing growing demand and expectations for electrified vehicles. Both companies will consider details of the collaboration with the aim of achieving the best automotive prismatic battery in the industry and, ultimately, contributing to the popularization of Toyota’s and other automakers’ electrified vehicles.

In Japan, there are five major domestic manufacturers, five specialized domestic manufacturers and a growing volume of imports from major United States and European manufacturers. The prolonged economic slump in the Japanese economy and the recent increases in environmental awareness have also shifted consumer

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preference towards more affordable automobiles such as compact and subcompact vehicles and towards utility vehicles such as mini-vans. For more than 40 years, Toyota has maintained its position as the largest automobile manufacturer in Japan. Every year since fiscal 1999, Toyota, excluding Daihatsu and Hino, has achieved a market share (excluding mini-vehicles) of over 40%, reflecting in part the success of the introduction of new models for subcompact and compact cars, mini-vans and sedans. In August 2005, Toyota launched the Lexus brand in Japan and achieved a record top market share of 25.6% in the luxury market in 2011. Toyota aims to further distinguish the Lexus brand by continuing to attract new and affluent customers including customers that typically had purchased imported vehicles.

North America

The North American region is one of Toyota’s most significant markets. Toyota has reorganized its production structure and made improvements to its product lineup. In addition, Toyota is actively working to promote increased local operations independence in North America, in accordance with the Toyota Global Vision, announced in 2011.

In the North American region, of which the U.S. is the main market, Toyota has a wide product lineup (excluding large trucks and buses), and sold 2,806 thousand vehicles on a consolidated basis in fiscal 2018. This represents approximately 31% of Toyota’s total unit sales on a consolidated basis. The U.S., in particular, is the largest market in the North American region, which accounts for 87% of the retail sales of Toyota in such region. Sales figures for fiscal 2018 were 98.9% of those in the prior fiscal year.

Toyota commenced sales of the first-generation Prius hybrid model in North America in 2000. The Prius became Toyota’s bestselling model behind the Corolla and Camry, having gained particular support among customers concerned with the environment. Toyota introduced the first hybrid model under the Lexus brand, the RX400h, and the Highlander hybrid in 2005. Toyota continued further expansion of its environmentally friendly vehicles with the introduction of models such as the CT200h in 2011, the ES300h and the Avalon HV in 2012, the NX300h in 2014, the fully remodeled all-new Prius and the all-new fuel cell vehicle MIRAI in 2015, the Prius PHV in 2016 and the fully remodeled Camry HV in 2017.

Since the introduction of the LS and ES models under the premium brand model, Lexus, in the United States in 1989, Toyota has expanded its Lexus sales with models including the GS, IS and RX. Toyota sold 311 thousand units through the introduction of the new NX and RC models in 2014, 344 thousand units through the introduction of the new RX model in 2015, 352 thousand units in 2016 and 305 thousand units in 2017.

Toyota is continuing to revise its vehicle models and North American production capacities in response to changes in market conditions. Starting 2011, Toyota, instead of importing from Japan, began production of the Corolla at its Mississippi plant. In 2013, the production capacity at the Woodstock plant in Canada increased from 150 to 200 thousand units per year, and the production capacity at the Indiana plant also increased. Toyota commenced production of the RX450h hybrid model at its Cambridge plant in Canada in 2014. Through the business alliance with Mazda Motor Corporation, the production of Toyota brand compact cars for sale mainly in North America began at Mazda’s plant in Mexico in June 2015. In addition, Toyota commenced production of the Lexus ES350 at its Kentucky plant for sale in the North America market starting in October 2015. Toyota also launched the all-new Camry with the first TNGA platform in North America at the Kentucky plant in 2017 and redesigned Avalon into an all-new model in 2018. Toyota plans to increase the production capacity of the Tacoma from 100,000 to 160,000 in Baja California, Mexico in 2018 and of the Highlander at its Indiana plant in 2019. In the meantime, consignment production that started at SIA in 2007 ceased in May 2016.

In terms of auto parts, Toyota increased production capacity of engine plants in Kentucky and Alabama in 2013 and 2014, respectively, to meet rising demand, and also increased production capacity of auto parts at its automatic transmission plant in West Virginia in 2014.

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In order to further strengthen competitiveness in North America, Toyota will continue the realignment of North American manufacturing operations going forward. As part of this effort, a new plant will be built in Mexico in 2019 to produce the Tacoma. Furthermore, production of the Corolla, which was initially planned to be shifted from the plant in Canada to the new plant in Mexico, instead will be shifted to a new plant in Alabama that will be established by the joint venture with Mazda around 2021. In addition to the plant in Mississippi, compact cars will also be produced at the new plant in Alabama. Toyota will consider focusing its production of mid-sized vehicles in the plant in Canada, along with the plants in Indiana and Kentucky, by commencing production of mid-sized vehicles instead of the Corolla in Canada starting in 2019.

As for Toyota’s vehicle development in North America, the Toyota Technical Center spearheads the design, planning, and evaluation of vehicles and parts as to their ability to meet customer needs. Toyota will continue to promote self-reliance towards producing even better cars in the future.

In July 2017, Toyota held an opening ceremony of its new North American headquarters in Plano, Texas. By unifying its North American manufacturing, sales and marketing, financial services and other functions, Toyota plans to promote collaboration and efficiencies across functions, position itself to deliver “ever-better cars” to customers and work towards realizing sustainable growth in the North America market.

Europe

Toyota’s principal European markets are Germany, France, the United Kingdom, Italy, Spain and Russia. Toyota’s principal competitors in Europe are Volkswagen, Renault, Ford, Opel and Peugeot, as well as Korean manufacturers Hyundai and Kia.

While competition in Europe continues to intensify, Toyota has expanded its lineup of hybrid models to further strengthen its sales operations, and has entered into supply agreements with BMW and PSA for diesel engines and light commercial vehicles, respectively. To strengthen its business setup so that it is less likely to be affected by exchange rates, Toyota launched RAV4 for Russia at OOO “TOYOTA MOTOR” (“TMR”) and C-HR at Toyota Motor Manufacturing Turkey Inc. (“TMMT”) in 2016 in the form of local production. In addition, Toyota is actively promoting production and sales measures that meet local demand by strengthening its value chain including used car dealerships, after-sales services and finance and insurance services.

In 2017, the European automotive market expanded from the previous year as the growth of the Russian and other European markets made up for the sluggish market in the United Kingdom.

Toyota sales in 2017 in Europe exceeded the previous year due to higher sales in principal markets such as the United Kingdom, Germany, France, Italy and Spain from the sales expansion of hybrid core models including C-HR and Yaris, even though the sales in Russia remained around the same as the previous year. Sales in Poland and Israel hit a new record. Toyota’s consolidated vehicle sales in Europe in fiscal 2018 was 968 thousand units, an increase of 4.7% from fiscal 2017.

Toyota has in the past increased European production in response to sales growth, establishing Toyota Motor Manufacturing (UK) Ltd. (“TMUK”) in 1992, TMMT in 1994 and Toyota Motor Manufacturing France S.A.S. (“TMMF”) in 2001. Further, in 2005, Toyota Peugeot Citroën Automobile Czech was formed as a result of a joint venture with PSA Peugeot Citroën as vehicle supply factories to Europe.

Toyota commenced production of the compact crossover C-HR by increasing the annual production capacity of TMMT from 150,000 units to 280,000 units (three-shift) in September 2016.

Toyota opened the Toyota Motor Manufacturing Russia plant in 2007 as a base for its manufacturing operations in the Russian market (integrated to sales entity TMR in March 2013). A two-shift production operation started in September 2012 and production capacity was increased from 20,000 units to 50,000 units

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per year. In August 2016, the production capacity was increased to 100,000 units and the production of the RAV4 commenced in addition to the Camry. Toyota commenced complete knock down, or CKD, production of the IMV Fortuner in Kazakhstan beginning in the spring of 2014. In April 2018, Toyota redesigned the Camry into an all-new model with the TNGA platform.

In terms of auto parts, in October 2016, Toyota decided to produce hybrid transaxles and gasoline engines in Poland. Toyota will start production of hybrid transaxles in 2018 at Toyota Motor Manufacturing Poland (“TMMP”), a production plant for transmissions and engines, and add two gasoline engines — a 1.5L in 2017 and a 2.0L in 2019 — at Toyota Motor Industries, Poland (“TMIP”), a production plant for diesel engines. In concert with the enhancement of the gasoline engine business, the two companies were integrated in April 2017.

Asia

Toyota’s consolidated vehicle sales in Asia (including China) in fiscal 2018 was 1,543 thousand units, a decrease of 2.8% from fiscal 2017.

In light of the importance of the Asian market that is further expected to grow in the long term, Toyota aims to build an operational framework that is efficient and self-reliant as well as a predominant position in the automotive market in Asia. Toyota has responded to increasing competition in Asia by making strategic investments in the market and developing relationships with local suppliers. Toyota believes that its existing local presence in the market provides it with an advantage over new entrants to the market and expects to be able to promptly respond to demand for vehicles in the region.

In this region, Toyota has been further strengthening its business foundations by improving its product line-up, expanding local procurement and increasing production capacities.

Toyota’s principal Asian markets are Thailand, India, Indonesia, Malaysia and Taiwan.

As part of Toyota’s efforts to expand business, Toyota Motor Thailand Co., Ltd. commenced production of HVs such as the Camry hybrid in 2009. Toyota also started operation of its second Gateway plant in 2013, expanding production capacity by 80 thousand units in Thailand to 810 thousand units. In April 2015, Toyota implemented a full model change for IMV models manufactured at its Samrong Plant and Ban Pho Plant in Thailand. In February 2018, Toyota started production of the C-HR at its second Gateway plant.

In India, Toyota constructed a second plant with an annual production capacity of 70 thousand units and commenced production and sales of the Etios compact model designed specifically for the Indian market in 2011. Furthermore, Toyota increased production capacity in India during 2012 and 2013 to 210 thousand units. Moreover, Toyota began exporting the gasoline-fueled model of the Etios to South Africa from India in 2012.

In Indonesia, Toyota introduced the Etios and commenced operation of a second plant in Karawang in 2013 in order to meet the diverse customer needs and the expanding market. In 2014, Toyota increased the initial production capacity of 70 thousand units per year to 120 thousand units per year with the introduction of the Vios and the Yaris, and also began exporting the Vios to the Middle East. Toyota also constructed a passenger vehicle engine plant that commenced production in February 2016.

In Malaysia, Toyota began production of the Camry hybrid in March 2015, and is planning to reorganize its production structure there in 2019 by building a new plant dedicated to passenger vehicles while making the existing plant dedicated to commercial vehicles. In addition, in 2016 Toyota began production and sales of the Sienta in Taiwan in response to diversifying demands.

China

Toyota has been conducting operations in China through joint ventures, and its success in producing products that meet local demands and in establishing its sales and service network has significantly contributed to

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Toyota’s profits. Based on the firm business foundation that it has established, Toyota is conducting its operations with the aim of promoting further growth and increasing profitability through further development of its sales and service network and expansion of its product lineup.

In China, Toyota has been conducting joint ventures with two major partners. First, with respect to the joint venture with China FAW Group Corporation since Toyota first launched the Vios through the joint venture in 2002, Toyota has been producing and selling the Land Cruiser Prado, the Corolla, the Corolla HV, the Crown, the REIZ, the Coaster and the RAV4 in China. With regard to production capacity, in 2007, Toyota commenced production at the new Tianjin Teda plant, which has an annual production capacity of 200 thousand units, and in 2012, commenced production at a new factory of Sichuan FAW Toyota Motor Co., Ltd. in Changchun, China, which has an annual production capacity of 100 thousand units. Toyota also increased annual production capacity of the plant in Sichuan from 30 thousand units to 50 thousand units in the spring of 2015 to increase production of the Prado. Toyota completed the construction of a new production line to replace an aging existing line at the Tianjin Teda plant in June 2018. In addition, Toyota sought to improve production efficiency by closing small, aging production lines at the Changchun East Plant of Sichuan FAW Toyota Motor Co., Ltd. in December 2016 and the Xiqing Plant of Tianjin FAW Toyota Motor Co., Ltd. in February 2017.

GAC Toyota Motor Co., Ltd., a joint venture between Toyota and Guangzhou Automobile Group Co., Ltd., commenced sales of the Camry in 2006, followed by production and sales of the Yaris, the Highlander, the E’z, the Levin and the Levin HV. In 2006, it commenced production at the first plant with an annual production capacity of around 200 thousand units. In addition, Toyota expanded its annual production capacity to approximately 560 thousand units by starting a second plant in 2009 and a third plant in early 2018. In 2017, Toyota redesigned the Camry into an all-new model with the TNGA platform.

In terms of auto parts, in 2014, Toyota opened a plant in Changshu in Jiangsu, China for the production of the Continuously Variable Transmission (“CVT”) as the first CVT plant outside of Japan and in September 2015, Toyota also began production of HV Transaxles at the CVT plant. Toyota also launched a plant to produce hybrid vehicle batteries in October 2015.

Total vehicle sales in the Chinese market increased 4% from 28.30 million in 2016 to 29.30 million in 2017. In this market, Toyota’s sales in 2017 were 1.30 million vehicles, up 6% from the previous year. In the domestically produced passenger vehicle market in mainland China (23.38 million units), Toyota had a market share of 5%. In 2017, sales of SUVs expanded as a result of customers’ value diversification. As for Toyota’s distribution network, Toyota has been expanding the distribution network for locally produced vehicles in cooperation with Chinese joint venture partners under Tianjin FAW Toyota Motor Co., Ltd. and Guanqi Toyota Motor Co., Ltd., and for imported vehicles, Toyota has also been expanding primarily the Lexus brand sales network. Toyota plans to further increase sales by expanding the number of dealers and the product lineup for both locally produced and imported vehicles. In addition, as the market in China develops, Toyota plans to promote the so-called “Value Chain” businesses such as used cars, services, financing and insurance.

South and Central America, Oceania, Africa and the Middle East

Toyota’s consolidated vehicle sales in South and Central America, Oceania, Africa and the Middle East (collectively, the “Four Regions”) in fiscal 2018 were 1,392 thousand units, an increase of 3.3% from fiscal 2017.

In these regions, which are expected to become increasingly important to Toyota’s business strategy, Toyota aims to develop new products which meet the specific demands of each region, increase production and further promote sales.

Toyota’s principal markets in the Four Regions are Brazil in South and Central America, Australia in Oceania, South Africa in Africa and Saudi Arabia in the Middle East.

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The core models in this region are global models such as the Corolla, IMV (the Hilux) and Camry. In order to increase production of IMVs, Toyota expanded the annual production capacity of its Argentina factory from 70 thousand units to 90 thousand units in 2011. Toyota further increased annual production capacity to 140 thousand units per year at the end of 2015 and is seeking to increase production to meet demand after 2016. In order to expand business in Brazil, Toyota constructed a new factory in Sorocaba with an annual production capacity of 70 thousand units, and in 2012, began production and sales of compact vehicles. Starting from the beginning of 2016, Toyota increased production capacity to 110 thousand units per year.

Further, Toyota began local production of the Fortuner in Egypt in 2012.

Moreover, in terms of auto parts, Toyota commenced production at a plant in Brazil for passenger vehicle engines in February 2016.

Toyota ended production of vehicles and engines at Toyota Motor Corporation Australia Ltd. in September 2017.

Production

Toyota and its affiliated companies produce automobiles and related parts and components through more than 50 overseas manufacturing companies in 26 countries and regions besides Japan. Toyota’s major manufacturing facilities include plants in Japan, the United States, Canada, the United Kingdom, France, Turkey, Thailand, China, Taiwan, India, Indonesia, South Africa, Argentina and Brazil. Daihatsu brand vehicles are produced at 4 factories in Japan and 2 manufacturing companies in 2 other countries of Indonesia and Malaysia. Hino brand vehicles are produced at 2 factories in Japan and 10 manufacturing companies in 10 countries, including Indonesia and Thailand. For a listing of Toyota’s principal production facilities, see “Information on the Company — Property, Plants and Equipment.”

In promoting a sustainable growth strategy, establishing a system capable of providing optimal supply of products in the global market is integral to Toyota’s strategy.

In line with its basic policy of manufacturing in countries or regions where there is demand and where Toyota is truly competitive, Toyota will make efficient use of and maximize capacity utilization at its existing plants to respond to the expanding market and will continue to focus on making efficient capital investments as necessary. Furthermore, Toyota will continue to place top priority on safety and quality in strengthening true competitiveness with the aim of achieving sustainable growth.

In 2017, 75.9% of Toyota vehicles sold in overseas markets were manufactured in overseas plants by Toyota and its unconsolidated affiliated companies. In 2017, approximately 71.1% of Toyota vehicles sold in North America were produced in North America. Of the vehicles sold in Europe in 2017, approximately 81.5% were produced in Europe. In fiscal 2018, Toyota produced on a consolidated basis 4,286 thousand vehicles in Japan and 4,678 thousand vehicles overseas, compared to 4,109 thousand vehicles in Japan and 4,866 thousand vehicles overseas in fiscal 2017.

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The following table shows Toyota’s worldwide vehicle unit production by geographic market for the periods shown. These production figures do not include vehicles produced by Toyota’s unconsolidated affiliated companies. The sales unit information elsewhere in this annual report includes sales of vehicles produced by these affiliated companies. Vehicles produced by Daihatsu and Hino are included in the vehicle production figures set forth below.

	Year Ended March 31,
	2014		2015		2016		2017		2018
Units Produced
Japan		4,344,892		4,124,593		3,980,576		4,109,038		4,285,844
North America		1,759,439		1,932,618		1,970,053		2,062,862		1,902,304
Europe		506,556		556,462		564,934		637,352		681,048
Asia		1,938,155		1,829,048		1,605,345		1,674,468		1,601,473
Other*		483,123		487,166		454,991		491,789		493,464
Total		9,032,165		8,929,887		8,575,899		8,975,509		8,964,133

* “Other” consists of Central and South America, Oceania and Africa.

Toyota closely monitors its actual units of sale, market share and units of production data and uses this information to allocate resources to existing manufacturing facilities and to plan for future expansions.

See “— Capital Expenditures and Divestitures” for a description of Toyota’s recent investments in completed plant constructions and for a description of Toyota’s current investments in ongoing plant constructions.

The Toyota Production System

Toyota pioneered the internationally recognized production system known as the “Toyota Production System” (“TPS”). The TPS is based on Toyota’s own concepts of efficient production of only necessary and quality products and efficient cost reduction, and has the following two principal elements:

• “Just-in-Time,” and

• “Jidoka.”

Just-in-Time is an approach in which necessary parts and components are manufactured and delivered in just the right quantity in a timely manner just as they are needed. This allows Toyota to maintain low levels of inventory while maintaining operating efficiency.

Jidoka is a production concept which involves immediate stop of work when problems arise in the production line in order to stop the production of defective items from being passed on to subsequent stages of the process, and therefore making quality assurance an inherent part of the production process. To achieve this, Toyota’s equipment is designed to detect and highlight abnormalities and to stop whenever abnormalities occur. Toyota also authorizes its machine operators and other members of its production team to stop production whenever they note anything suspicious. This helps Toyota to build quality into the production process by avoiding defects and preventing the waste that would result from producing a series of defective items.

Toyota believes that the TPS allows it to achieve mass-production efficiencies even in high-mix, low-volume production. This belief gives Toyota the flexibility to respond to changing consumer demand without significantly increasing production costs. While the TPS remains the basis of Toyota’s automobile production, the system has been expanded for use in Toyota’s parts production, logistics and customer service activities as well.

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Through the TPS, issues are identified and analyzed at the actual site, the entire production process is made visible and production efficiency as well as product quality are improved through the application of measures to address the sources of problems. As one method to implement these measures, Toyota utilizes sophisticated information technologies to improve each step of its vehicle development process, from product planning to commencement of mass-production. These technologies are intended to enhance flexibility, simplification, quality, cost competitiveness and speed. Specifically, detailed virtual assembly and other simulations of manufacturing processes are conducted on computers for a new vehicle or new production equipment/systems before a prototype is made. An actual prototype is made only after defects and related issues have been identified and resolved by computer simulation, thereby minimizing the time required for rebuilding prototypes and significantly shortening the time required before starting mass production. Moreover, this system is used to prepare virtual factories and other visual aids in order to facilitate training and communication at overseas plants and enable the efficient transfer of necessary technology and skills.

In January 2018, Toyota established the TPS Group, and in order to stay true to itself, Toyota has gone back to its roots, positioning TPS as the bedrock of its management, and is moving forward with initiatives to ensure that TPS is passed on to the future as part of Toyota’s DNA. Specifically, Toyota will have the concepts of “Just-in-Time” and “jidoka,” which are the two main pillars of the TPS, spread within the entire company and have all divisions, including technical and administrative divisions, work to reduce lead time and ensure that abnormalities are made visible, through which Toyota will achieve results by both cost reduction through improved productivity as well as improved work quality.

Distribution

Toyota’s automotive sales distribution network is the largest in Japan. As of March 31, 2018, this network consisted of 280 dealers employing approximately 32 thousand sales personnel and operating approximately 4.7 thousand sales and service outlets. Toyota owns 15 of these dealers and the remainder is independent.

Toyota believes that this extensive sales network has been an important factor in its success in the Japanese market. A large number of the cars sold in Japan are purchased from salespersons who visit customers in their homes or offices. In recent years, however, the traditional method of sales through home visits is being replaced by showroom sales and the percentage of automobile purchases through showrooms has been gradually increasing. Toyota expects this trend to continue, and accordingly, is working to improve its sales activities such as customer reception and meticulous service at showrooms to increase customer satisfaction.

Sales of Toyota vehicles in Japan are conducted through four sales channels — “Toyota,” “Toyopet,” “Corolla” and “Netz.” In addition, Toyota introduced the Lexus brand to the Japanese market in August 2005, and currently distributes the Lexus brand vehicles through a network of 168 sales outlets in order to enhance its competitiveness in the domestic luxury automotive market. The following table provides information for each channel as of March 31, 2018.

	Dealers
Channel	Toyota Owned		Independent		Total		Market Focus
Toyota		4		45		49	Luxury channel for Toyota brand vehicles
Toyopet		4		48		52	Leading channel for the medium market
Corolla		4		70		74	Volume retail channel centering on compact models
Netz		3		102		105	Sales channel targeting customers with new values for the 21st century
Brand					Sales Outlets		Market Focus
Lexus						168	Premium brand

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Outside Japan, Toyota vehicles are sold through approximately 170 distributors in approximately 190 countries and regions. Through these distributors, Toyota maintains networks of dealers. The chart below shows the number of Toyota distributors as of March 31, 2018 by country and region:

Country/Region	Number of Countries		Number of Distributors
North America		3		5
Europe		53		30
China		1		4
Asia (excluding China)		19		13
Oceania		17		15
Middle East		16		14
Africa		55		49
Central and South America		30		40

Improving Efficiency

Toyota is working on the following to create a corporate structure allowing for efficient development, production and sales that can respond flexibly to changes in the external environment:

• working with suppliers as one team to dramatically increase the efficiency of development;

• creating a production structure that can better withstand fluctuations in demand and currency exchange rates; and

• strengthening sales capabilities in line with local conditions.

Toyota also plans to improve profitability and enhance operating efficiency by continuing to pursue aggressive cost reduction programs, including:

• improving product development and production efficiencies through the re-integration and improvement of vehicle platforms and power trains as well as through the development of electronic platforms which organize electronic devices of vehicles as a package and standardize electronic structure and infrastructure;

• reinforcing and promoting Ryohin-Renka Cost Innovation (“RR-CI”) activity, which aims for the elimination of waste in all processes from design to production while ensuring the reliability and safety of each part;

• applying advanced information technologies to improve efficiency throughout the product development and production processes;

• globally reinforcing the supply base under an open and fair purchasing policy;

• streamlining production systems; and

• improving the efficiency of domestic and international distribution.

Toyota is further improving production efficiency by installing more versatile equipment and systems, modifying vehicle body designs to allow for a greater variety of models on each production line and sharing more parts among vehicles, not simply among different models but also among different platforms.

In April 2012, Toyota announced a new development framework, the TNGA, which reconciles sweeping advances in product appeal with cost reductions. The new framework sets forth an architecture that incorporates not only the three fundamental vehicle functions of moving, turning and stopping, but also ergonomics such as driving position as well as freedom of design. Toyota plans to efficiently develop cars with high basic-performance attributes by developing parts and modules based on this architecture. The TNGA provides for

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handling multiple models simultaneously in grouped development projects that will increase the sharing of parts and core vehicle components. This sharing, carried out in cooperation with suppliers, will result in lowered costs, thereby allowing developmental manpower and funds to be reinvested in R&D to meet consumer preferences and R&D to meet regional needs, resulting in further product improvement.

By April 2013, Toyota established systems to rapidly promote the TNGA and carried out product development under this new way of doing business. As a result, Toyota realized high basic performance and marketability in the Prius that was introduced in Japan in December 2015. Toyota subsequently launched the all-new Camry in 2017. Toyota has rolled out, and plans to continue to roll out, the results of such development to other vehicles as well.

Realizing a Smart Mobility Society that expands through connected car technologies

Toyota is moving forward with initiatives striving to realize a smart mobility society, in which people can enjoy freedom of movement and feel at ease and excited, by connecting vehicles, people and communities with its connected car technologies in order to meet the needs of rapidly changing societies, including the falling birth rate and aging populations in developed nations, an increasingly diverse range of energy sources and the evolution of IoT, among others. In particular, Toyota aims to contribute to an affluent lifestyle that offers peace of mind by enhancing vehicle functionality that will increase the attractiveness of vehicles and the excitement of driving, enhancing transport systems that make being in cars more comfortable and more environmentally friendly, and realizing Smart Communities that aim for optimization of local energy use and establishment of a low-carbon emission transportation system.

Enhancing Vehicle Functionality — Information Service Functions

To Toyota, enhancing vehicle functionality means advancing information service functions that integrate vehicles with telecommunication systems, and driving assistance functions that use communication technologies and sensor technologies to create vehicles with intelligent features. Information service functions can improve convenience and enrich the driving experience through information communication technologies that add new functions that are connected to the basic vehicle functions of “running, turning and stopping.” Examples include the following:

• Toyota is advancing enhancement of car navigation systems, such as car parking maps that display detailed information inside car parks, as well as the VICS system (Vehicle Information and Communication System) that provides real-time road traffic information such as congestion, accidents, traffic restrictions and parking. Car navigation systems play an increasingly important role in providing drivers with various types of information on safety, smooth traveling, comfort and convenience.

• T-Connect/G-BOOK is the latest information network service that merges the latest network technologies and car multimedia a step ahead of the arrival of the ubiquitous network society. T-Connect/G-BOOK provides various types of information useful for driving, as well as safety and security services that detect unusual conditions in the vehicle, thereby supporting a lifestyle with one’s vehicles anytime and anywhere through a network. In 2005, Toyota started G-BOOK ALPHA and G-Link for Lexus, each with additional various features including traffic congestion forecast service. In 2007, Toyota launched G-BOOK mX, which in addition to the well-received conventional safety and security services of G-BOOK, introduced even more useful car navigation services such as “Map-on-Demand” — the world’s first technology for automatically updating map data — and “Probe Communication Traffic Information” that provides drivers with highly precise information on traffic congestion. In 2014, Toyota launched T-Connect, which in addition to conventional telematics services, provides new services and functions through the distribution of applications to on-board device, as well as destination and other information searches through the adoption of a voice recognition system.

• HELPNET is an emergency dial system that, in the event of a traffic accident or medical emergency, transmits information required for emergency rescue, such as present-location data and vehicle details,

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either automatically or with the touch of a button. It immediately contacts police and fire departments through the HELPNET Operation Center. This system is integrated into T-Connect/G-BOOK and G-Link to improve the quality of services. HELPNET shortens the time taken to report following an emergency situation, which contributes to decreasing the number of traffic accident fatalities and reducing the level of impact, while at the same time aiming to prevent secondary disasters and ease traffic congestion.

In addition to the above, Toyota also operates a Japanese-language web portal for automobile information, GAZOO.com. The name “GAZOO” originates from the Japanese word gazo, meaning images. GAZOO was established as an Internet membership service linking Toyota, its national dealer network and GAZOO members, and has provided information on new and used Toyota vehicles and related services, as well as online shopping services. GAZOO later expanded to include information on other automakers, as well as a rich blog feature as a social networking portal site on automobiles. In addition, GAZOO has exhanced its contents line-up through which Toyota aims to expand the fan base of car enthusiasts by promoting activities where customers can experience in real life the enjoyment that cars offer, such as TOYOTA GAZOO Racing. GAZOO is currently in charge of all Toyota motor sports activities (such as WRC, WEC and SuperGT). Toyota utilized its GAZOO technology that links the customers, distributors and Toyota to further expand its automobile information service by launching the G-BOOK telematics service in Japan in fall 2002 and G-Link, which is a service exclusive to Lexus, in August 2005. Toyota also offers a theft detection system, vehicle tracking service and operator support service as standard services to enhance services aiming to provide safety, security and comfort for T-Connect/G-BOOK and G-Link users in their lifestyle using vehicles. With G-BOOK mX announced in April 2007, Toyota started offering services that allow drivers to use more convenient navigation systems such as “Map-on-Demand” — the world’s first technology for automatically updating map data. In addition, Toyota has further strengthened its linkage between GAZOO and G-BOOK and has, for example, allowed map information searched on a blog on GAZOO.com to be used on G-BOOK, further maturing as a comprehensive telematics service. In Japan, Toyota is seeking to promote the use of the T-Connect/G-BOOK by equipping all Lexus models and certain Crown models with the T-Connect/G-BOOK as a standard feature. Toyota has also licensed its T-Connect/G-BOOK technology to certain other competitors in Japan. Toyota is applying the technology and experience which it has accumulated in Japan to regions outside Japan; G-BOOK services were introduced in China in March 2009, and unique telematics services in the United States were launched in August 2009. In addition, Toyota began offering telematics services for smartphones in December 2010 in Japan, and began to offer the same service in Thailand in March 2012 and the Middle East from January 2014 (UAE, Qatar and Lebanon in January 2014, Saudi Arabia in August 2014, Bahrain in October 2014 and Kuwait in January 2015).

In addition, in March 2004, Toyota launched its CRM (Customer Relationship Management) system called e-CRB (evolutionary Customer Relationship Building) in Thailand. e-CRB builds on a technology cultivated through the development of Gazoo and G-BOOK and offers its customers a variety of services such as providing information on new vehicles, accepting requests for brochures and estimates and notifying customers when it is time for maintenance by keeping track of the vehicle’s maintenance history and mileage. In addition, e-CRB offers an advanced operation system that can be utilized comprehensively at dealers including new and used cars and services. Toyota is promoting e-CRB in countries such as China, Thailand, Australia, India and Brazil where steady progress has been made as the service-in ratio has increased. In 2013, Toyota introduced the next-generation e-CRB that adopts tablet terminals (portable information processing terminals) in China. These tablet terminals are supporting the improvement of customer satisfaction at points of sale and in after-sale service.

Toyota also introduced a system called Sales Logistics Integrated Management (“SLIM”) in Guangzhou, China and India. By utilizing real sales information and linking with production and distribution, Toyota is able to realize the Just-in-Time production system of producing and delivering only the number of vehicles that have been sold. SLIM has been recognized to significantly increase the freshness of inventory and improve cash flow.

In September 2010, Toyota announced its smart-grid initiatives, which are intended to demonstrate efficient energy use toward the realization of a low-carbon and energy-saving society. By utilizing technology cultivated

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through the Internet and telematics services mentioned above, Toyota developed the Toyota Smart Center (“TSC”) that optimally controls electricity and links EVs and PHVs with homes, and conducted a demonstration project in Rokkasho Village in Aomori aimed at reducing overall CO2 emissions and users’ electricity costs. In addition, in order to develop a global platform of the TSC, Toyota announced a partnership with Microsoft Corp. in April 2011 and a partnership with Salesforce.com in May 2011. Toyota plans to utilize the cloud technology of these two companies in its Internet and telematics services to build a framework for TSC’s global implementation. In January 2012, Toyota began eConnect and “TOYOTA friend” services for PHV. In May 2013, Toyota utilized the latest version of Microsoft’s SharePoint to comprehensively redesign GAZOO, the automobile information portal site. Toyota aims to offer new services, achieve better vehicle quality and enhance product attractiveness as well as contribute further to society by utilizing the vehicle information, road conditions and other parameters collected via telematics services and stored at the TSC. With regard to contribution to society, Toyota began offering the Big Data Traffic Information Service in June 2013, through which traffic information, statistics and other related information are provided to local governments, universities and businesses to support traffic flow improvement and assist disaster prevention measures. In December 2016, Toyota launched the TC Smartphone Navigation free-of-charge to users, including those other than Toyota users, to provide readily usable route history maps. Toyota plans to continue to work with new information technologies and the IT industry to establish a framework for TSC’s global implementation and to realize a mobility society of the future.

In 2016, Toyota has been working actively on “connected car technology” and alliances with other companies for effective vehicle data utilization to “make ever-better cars” and for safer and securer “connected” service. In January 2016, Toyota announced a “connected vehicle framework” to increase installation of a Data Communication Module (DCM) into a broader range of its vehicles starting in the United States from 2017. In April 2016, Toyota established a new company, “Toyota Connected, Inc.,” in the United States to consolidate and analyze information collected from vehicles and to develop new products, and thereby promoting “making ever-better cars” through utilizing big data. In addition, Toyota is collaborating with insurance companies on developing insurance services as well as tying up with a sharing service company, thereby actively advancing research for new services and the realization of a mobility society utilizing big data.

As a further engagement in the insurance industry, Toyota established Toyota Insurance Management Solutions USA, LLC (“TIMS”), a new U.S. telematics car insurance services company, to promote analysis of big data and development of algorithms. TIMS provides telematics insurance services best suited to Toyota’s customers by consolidating Toyota’s data, financing and insurance knowhow.

In November 2016, based on the proliferation and popularity of mobility services such as car-sharing, Toyota started to establish the Mobility Services Platform (“MSPF”), which has various functions to support mobility services, leveraging the TSC, the Toyota Big Data Center, and financial services. MSPF is a platform that aggregates and covers individual business functions, such as vehicle management systems and leasing programs, that Toyota developed and offered to mobility service providers such as ridesharing operators when working together with them. As one example of the functions that MSPF offers, to enhance a MSPF-based car-sharing, Toyota developed the smart key box (“SKB”) that enables users to lock and unlock doors and to start the engine with their smartphone — thus providing a safer and more secure way of lending and renting cars. Using the MSPF and SKB, Toyota started a pilot program in collaboration with Getaround, a venture company providing car-sharing services targeted at individuals in the United States, in March 2017 in San Francisco, California. In addition, Toyota is working with Toyota Financial Services Corporation (“TFSC”) to make vehicles with expired leases available on Getaround, in order to effectively utilize TFSC’s assets. Toyota is also examining the viability of car sharing using SKBs. Furthermore, Servco Pacific Inc., a Toyota dealer in Hawaii, has begun an employee-only car-sharing services program.

Toyota and Uber Technologies, Inc. have entered into a memorandum of understanding to explore collaboration with respect to ridesharing. As part of the partnership, the companies created new leasing options in which car purchasers can lease vehicles with connected terminals from Toyota Financial Services and cover their

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payments through earnings generated as Uber drivers. In Southeast Asia, Toyota started to collaborate with Grab, Inc. (“Grab”) in August 2017, and commenced a pilot program in Singapore to collect driving data generated from vehicles owned by Grab. In June 2018, Toyota further expanded the collaboration and invested in Grab. Toyota is moving forward with providing various connected services that use MSPF to Grab, and will consider future collaboration with Grab in the area of Mobility as a Service (“MaaS”).

Toyota and Japan Federation of Hire-Taxi Associations have entered into a memorandum of understanding to explore areas for collaboration, so as to develop and introduce the “Japanese taxi of the future.” Through use of taxis to collect and analyze of information concerning the road traffic environment, and applying those results to the development of the Mobility Teammate Concept, which embodies Toyota’s vision of automated driving, Toyota and the Japan Federation of Hire-Taxi Associations will continue to be important partners in helping to develop Japanese taxis into the “world’s safest, most pleasant, world-class public transportation service” and to strengthen the Japanese transportation infrastructure.

With the background of expanding mobility services and the tightening of data regulations in Europe, Toyota has established Toyota Connected Europe, and plans to utilize MSPF in Europe as well to promote car-sharing businesses in coordination with local dealers.

In January 2018, Toyota announced the e-Palette Concept, a next generation EV designed exclusively for MaaS, leveraging electrification, connected vehicles and automated driving technologies. The e-Palette Concept can be adapted for various services, such as passenger transportation, logistics services or retail services, and is the embodiment of Toyota’s concept of “new mobility” that supports the lifestyles of its customers. Amazon.com, Inc., DiDi Chuxing, Pizza Hut, LLC, Uber Technologies, Inc. and Mazda Motor Corporation are collaborating with Toyota as initial launch partners in order to explore vehicle specifications that are even more practical and to ensure the realization of a new mobility service.

Enhancing Vehicle Functionality — Driving Assistance Functions

Toyota’s driving assistance functions offer functions that assist drivers with an aim to lessen the burden of driving, enhance safety and provide to everyone the pleasure of driving. Toyota has commercialized enhancements to various functions that assist the driver in sensing external information, avoiding danger and making appropriate maneuvers. Examples of driving assistance functions include the following:

• VDIM (Vehicle Dynamics Integrated Management) is a system that constantly monitors the driver’s operations and the vehicle’s situation and centrally manages the engine, steering mechanisms and brakes. By stabilizing the vehicle before the driver loses control of the vehicle, VDIM achieves a high level of ‘active safety’ and improves driving performance, consisting namely of running, turning and stopping.

• “Pre-collision System” is a system that perceives possibilities of a crash with obstacles, cars in front or crossing pedestrians through a sensor installed in a vehicle. If a collision seems likely, it proceeds to activate warnings as well as brake assistance, which aids the driver’s operation of the brake, or the automatic braking system, which aids in avoiding the collision altogether or mitigates any damage.

• “Radar Cruise Control (with all-speed tracking function)” allows the vehicle to keep a constant distance between itself and the preceding vehicle within a speed range from zero to a preset speed, automatically slowing down and stopping if necessary to avoid collision. When the car in front speeds up, it allows the driver to accelerate.

• “Lane Departure Alert” is a system that uses a camera to detect white or yellow lane markers while driving. The system warns the driver with a buzzer and displays if it detects possible deviation in order to assist in avoiding a collision accident resulting from deviation. In addition, “Lane Keeping Assist System,” a system that assists the driver’s operation of the steering wheel with electric power steering in order to help keep the vehicle traveling between lane markers, has been developed.

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• “Automatic High Beam” detects the headlights of oncoming vehicles or taillights of vehicles running in front and adjusts the headlight range, automatically switching to low beam or high beam, in order to avoid dazzling the visions of the drivers with bright lights, as well as to secure the drivers’ forward visions at night.

• “Blind Spot Monitor” is a system which aims to reduce accidents by alerting the driver to other vehicles in the driver’s blind spot diagonally behind the driver’s seat with sound and visual display in the side mirrors while changing lanes.

From these driving assistance functions, in 2015 Toyota commercialized the Toyota Safety Sense, a collision avoidance support package that includes the Pre-collision System, the Lane Departure Alert and the Automatic High Beam. By the end of 2017, Toyota had completed installation of this package on nearly all models sold in Japan, the United States and Europe at an affordable price aimed at widespread adaption.

Enhancing Transport Systems

Enhancing transport systems requires taking a general approach that addresses various factors across a wide scope that are pertinent not only to vehicles but also roads, people and public transport systems in order to ensure smooth and efficient movement of people and vehicles and to build a safe transportation environment. In addition to VICS and ETC (Electronic Toll Collection System), which are already standard in Japan, the “Cooperative ITS,” which combines cutting edge IT and vehicle technology, is in development and has begun to be partially implemented.

• The operation of “ETC2.0” commenced in 2009 and corresponding products are available for purchase. Mainly for use on highways, this service provides drivers with information related to road traffic and safe driving that is transmitted from road infrastructures to car navigation systems via video and voice.

• In the summer of 2011, Toyota introduced products corresponding to the driving safety support system, “DSSS,” which the National Police Agency has started operating. Mainly for use on general roads, this system supports safe driving, including by preventing the driver from overlooking red lights, by transmitting traffic control information (such as traffic lights and signs) and peripheral information from road infrastructures to automobiles.

• Aiming at further reducing accidents, “ITS Connect,” a driving safety support system that uses a dedicated ITS frequency of 760 MHz, was introduced in the fall of 2015. Through direct and continuous exchange of information between vehicles and the road and among vehicles, this system aims to mitigate accidents near intersections, which have been difficult to mitigate to date. The system also includes Communicating Radar Cruise Control features, which supports smooth acceleration and deceleration when following behind another vehicle. In addition, from August 2017, Toyota and Mazda started a partnership in the field of advanced safety technologies and a collaboration in Toyota’s vehicle-to-vehicle and vehicle-to-infrastructure technologies, and aims at the realization of automated driving in which all drivers can move safely, smoothly and freely by harmonizing ITS technology and vehicle control technology.

Toyota is committed to developing new ITS products. Toyota believes that intelligent transport systems will become an integral part of its overall automotive operations and enhance the competitiveness of its vehicles. As familiarity with and demand for ITS products grow, Toyota expects an increasing number of ITS products to become commercially available and achieve greater acceptance each year.

Smart Communities

In April 2010, Toyota City was selected as a “Model Region for Next-Generation Energy Systems” by the Ministry of Economy, Trade and Industry. Toyota since joined the “Toyota City Low-Carbon Society Verification Council” (established in August 2010), and carried out experiments relating to the “Optimization of

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Local Energy Use in Households and Destinations (commercial and public facilities)” and “Establishment of a System for Low-Carbon Emission Transportation” until March 2015. As a way of building on the results of such experiments, Toyota launched an experimental ultra-compact electric vehicle sharing program in Tokyo from April 2015. It also launched an experimental ultra-compact electric vehicle program for tourism using a Toyota developed car-sharing system in Okinawa from January 2016. An experimental car-sharing program was also implemented in Okayama City from October through December 2016, and from October 2017 through January 2018. Furthermore, in Toyota City and Okinawa, these experimental programs were commercialized, and management was transferred to local companies and organizations in April 2017.

Research and Development of, and Collaboration Regarding, Connected Platforms

With respect to research and development of platform technologies to make connected services a reality in the future, Toyota is moving forward with the following research and development activities related to in-vehicle system technologies as well as telecommunication and data processing system technologies by means of both open collaboration led by a nonprofit organization as well as collaboration with certain other companies.

For in-vehicle system technologies, a collaborative open source project is underway to develop an operating system for in-vehicle multimedia telematics systems based on the open source software Linux, but incorporating in-vehicle requirements. Named Automotive Grade Linux, the operating system is being developed in collaboration with other auto companies as well as companies that design a manufacture the hardware and software for devices that make up in-vehicle systems, under the initiative of Linux Foundation, an incorporated nonprofit organization. With respect to functions that link in-vehicle multimedia system to smartphones, Toyota established a nonprofit organization called Smart Device Link Consortium in November 2016, jointly with Ford and certain other auto companies, to develop specifications for in-vehicle multimedia systems and their related platform software.

For telecommunication and server system technologies, Toyota is developing a “global mobile communications platform,” which allows for globally integrated management of the telecommunication environment, in collaboration with KDDI Corporation. Toyota is also conducting research and development jointly with the NTT Group in the areas of data processing system technologies and mobile communications technologies that will enable the processing of big data obtained from vehicles in the future.

Financial Services

Toyota’s financial services include loan programs and leasing programs for customers and dealers. Toyota believes that its ability to provide financing to its customers is an important value-added service. In July 2000, Toyota established a wholly-owned subsidiary, TFSC, to oversee the management of Toyota’s finance companies worldwide, through which Toyota aims to strengthen the overall competitiveness of its financial business, improve risk management and streamline decision-making processes. Toyota has expanded its network of financial services, in accordance with its strategy of developing auto-related financing businesses in significant markets. Accordingly, Toyota currently operates financial services companies in 37 countries and regions, which support its automotive operations globally.

Toyota’s revenues from its financial services operations were ¥2,017.0 billion in fiscal 2018, ¥1,823.6 billion in fiscal 2017 and ¥1,896.2 billion in fiscal 2016. In fiscal 2017, although uncertainties related to political trends emerged primarily in Europe and North America, Toyota’s business remained solid in areas where Toyota’s financial services business is operated. In fiscal 2018, weak used vehicle prices in the United States resulted in increased disposal losses for vehicles with expired leases as well as losses on depreciation compared with the past. Interest rates also increased in the United States and some emerging countries. This market environment exerted downward pressure on revenue in the financing business. Under such circumstances, as a result of Toyota’s continued collaboration with dealers in various countries and regions and efforts to expand products and services that meet customer needs, Toyota’s share of financing provided for new car sales of Toyota

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and Lexus vehicles in regions where TFSC operates remained at a high level of approximately 35% and the balance of loan receivables continued to steadily increase globally, with the exception of some countries. Meanwhile, Toyota is making efforts to provide both its customers and dealers with stable financial services by diversifying its funding methods using such means as commercial paper, corporate bonds, bank borrowings, ABCP (Asset Backed Commercial Paper) and ABS (Asset Backed Securities). Toyota continued to perform detailed credit appraisals and serve customers by monitoring bad debt and loan payment extensions, and the percentage of credit losses remained low, at 0.30% and 0.37% in fiscal years 2018 and 2017, respectively. Toyota continues to work towards improving its risk management measures in connection with credit and residual value risks.

Toyota Motor Credit Corporation is Toyota’s principal financial services subsidiary in the United States. Toyota also provides financial services in 36 other countries and regions through various financial services subsidiaries, including:

• Toyota Finance Corporation in Japan;

• Toyota Credit Canada Inc. in Canada;

• Toyota Finance Australia Ltd. in Australia;

• Toyota Kreditbank GmbH in Germany;

• Toyota Financial Services (UK) PLC in the United Kingdom;

• Toyota Leasing (Thailand) Co., Ltd. in Thailand; and

• Toyota Motor Finance (China) Co., Ltd. in China.

Toyota Motor Credit Corporation provides a wide range of financial services, including retail financing, retail leasing, wholesale financing and insurance. Toyota Finance Corporation also provides a range of financial services, including retail financing, retail leasing and credit cards. Toyota’s other finance subsidiaries provide services including retail financing, retail leasing and wholesale financing.

In June 2017, Toyota established Toyota Financial Services (Ireland) DAC, as a subsidiary of Toyota Financial Services (UK) PLC, and started its operation in November 2017. This subsidiary is a joint venture with Killeen Group Holdings, the parent company of Toyota’s local distributor.

Net finance receivables for all of Toyota’s dealer and customer financing operations were ¥15,829.9 billion as of March 31, 2018, representing an increase of 4.1% as compared to the previous year. The majority of Toyota’s financial services are provided in North America. As of March 31, 2018, 55.7% of Toyota’s finance receivables were derived from financing operations in North America, 12.3% from Asia, 12.1% from Europe, 8.2% from Japan and 11.7% from other areas.

Approximately 50% of Toyota’s unit sales in the United States during fiscal 2018 included a finance or lease arrangement with Toyota. Because the majority of Toyota’s financial services operations are related to the sale of Toyota vehicles, a decrease in vehicle unit sales may lead to a contraction of Toyota’s financial services operations.

The worldwide financial services market is highly competitive. Toyota’s competitors in retail financing and retail leasing include commercial banks, credit unions and other finance companies. Commercial banks and other automobile finance subsidiary companies serving their parent automobile companies are competitors of Toyota’s wholesale financing activities. Competitors in Toyota’s insurance operations are primarily national and regional insurance companies.

For information on Toyota’s finance receivables and operating leases, please see “Operating and Financial Review and Prospects — Operating Results — Financial Services Operations.”

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Retail Financing

Toyota’s finance subsidiaries acquire new and used vehicle installment contracts primarily from Toyota dealers. Installment contracts acquired must first meet specified credit standards. Thereafter, the finance company retains responsibility for installment payment collections and administration. Toyota’s finance subsidiaries acquire security interests in the vehicles financed and can generally repossess vehicles if customers fail to meet their contractual obligations. Almost all retail financings are non-recourse, which relieves the dealers from financial responsibility in the event of repossession. In most cases, Toyota’s finance subsidiaries require their retail financing customers to carry automobile insurance on financed vehicles covering the interests of both the finance company and the customer.

Toyota has historically sponsored, and continues to sponsor, special lease and retail programs by subsidizing below market lease and retail contract rates.

Retail Leasing

In the area of retail leasing, Toyota’s finance subsidiaries acquire new vehicle lease contracts originated primarily through Toyota dealers. Lease contracts acquired must first meet specified credit standards after which the finance company assumes ownership of the leased vehicle. The finance company is generally permitted to take possession of the vehicle upon a default by the lessee. Toyota’s finance subsidiaries are responsible for contract collection and administration during the lease period. The residual value is normally estimated at the time the vehicle is first leased. Vehicles returned to the finance subsidiaries at the end of their leases are sold by auction. For example, in the United States, vehicles are sold through a network of auction sites as well as through the Internet. In most cases, Toyota’s finance subsidiaries require lessees to carry automobile insurance on leased vehicles covering the interests of both the finance company and the lessee.

Wholesale Financing

Toyota’s finance subsidiaries also provide wholesale financing primarily to qualified Toyota dealers to finance inventories of new Toyota vehicles and used vehicles of Toyota and others. The finance companies acquire security interests in vehicles financed at wholesale. In cases where additional security interests would be required, the finance companies take dealership assets or personal assets, or both, as additional security. If a dealer defaults, the finance companies have the right to liquidate any assets acquired and seek legal remedies.

Toyota’s finance subsidiaries also make term loans to dealers for business acquisitions, facilities refurbishment, real estate purchases and working capital requirements. These loans are typically secured with liens on real estate, other dealership assets and/or personal assets of the dealers.

Insurance

Toyota provides insurance services in the United States through Toyota Motor Credit Corporation’s wholly-owned subsidiary, Toyota Motor Insurance Services, Inc. (“TMIS”) and its wholly-owned insurance company subsidiaries. Their principal activities include marketing, underwriting and claims administration. TMIS also provides coverage related to vehicle service agreements through Toyota dealers to customers. In addition, TMIS also provides coverage and related administrative services to affiliated companies of Toyota Motor Credit Corporation. Toyota dealers in Japan and in other countries and regions also engage in vehicle insurance sales.

Other Financial Services

Toyota Finance Corporation launched its credit card business in April 2001 and began issuing Lexus credit cards in 2005 when the Lexus brand was introduced in Japan. As of March 31, 2018, Toyota Finance Corporation has 15.3 million card holders (including Lexus credit card holders).

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All Other Operations

In addition to its automotive operations and financial services operations, Toyota is involved in a number of other non-automotive business activities. Net sales for these activities totaled ¥1,646.1 billion in fiscal 2018, ¥1,321.0 billion in fiscal 2017 and ¥1,177.3 billion in fiscal 2016.

Housing

Toyota established its subsidiary Toyota Housing Corporation in April 2003 and has transferred to it product planning and sales operations related to the manufacture and sale of housing. Furthermore, in order to quickly and accurately grasp clients’ needs and to plan, develop and sell products on a timely basis, in April 2008, Toyota transferred the product development operation to Toyota Housing Corporation. In October 2010, Toyota spun-off its housing operations (project planning, technology development and manufacturing) through a statutory demerger and integrated them into Toyota Housing Corporation. Toyota believes that in the vastly changing housing market environment, the integration of the development, manufacture and sales functions will expedite decision making and lead to flexible business operations that will enable Toyota to better respond to the needs of even more customers. In March 2005, Toyota, together with institutional investors, agreed to jointly invest in Misawa Home Holdings, Inc. (“Misawa”; renamed Misawa Homes Co., Ltd.) pursuant to its request for assistance in its rehabilitation. In April 2010, determining that a stronger collaboration with Misawa would be desirable in order to achieve further growth in the difficult operating environment of the housing industry, Toyota Housing Corporation agreed to purchase Misawa shares from an institutional investor. In addition, Toyota transferred ownership of Misawa to Toyota Housing Corporation in October 2010. Through these activities, Toyota has strengthened the housing business of both companies.

Information Technology

See “— Enhancing Vehicle Functionality and Intelligent Transport Systems” for a description of Toyota’s information technology.

Governmental Regulation, Environmental and Safety Standards

Toyota is subject to laws in various jurisdictions regulating the levels of pollutants generated by its plants. In addition, Toyota is subject to regulations relating to the emission levels, fuel economy, noise and safety of its products. Toyota has incurred significant costs in complying with these laws and regulations and expects to incur significant compliance costs in the future. Toyota’s management views leadership in environmental protection as an important competitive factor in the marketplace.

Vehicle Emissions

Japanese Standards

The Air Pollution Control Act of Japan and the Road Transport Vehicle Act and the Act Concerning Special Measures for Total Emission Reduction of Nitrogen Oxides and Particulate Matter from Automobiles in Specified Areas regulate vehicle emissions in Japan. In addition, both the Noise Regulation Act and the Road Transport Vehicle Act provide for noise reduction standards on automobiles in Japan. Toyota’s vehicles manufactured for sale in Japan comply with all Japanese exhaust emission and noise level standards.

U.S. Federal Standards

The federal Clean Air Act directs the Environmental Protection Agency (“EPA”) to establish and enforce air quality standards, including emission control standards on passenger vehicles, light-duty trucks and heavy-duty vehicles. Manufacturers are not permitted to sell vehicles in the United States that do not meet the standards. In February 2000, the EPA adopted more stringent vehicle emission and fuel economy standards applicable to

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passenger vehicles and light-duty trucks produced in model years 2004 and beyond. In April 2007, EPA regulations that further restricted emissions from passenger vehicles and light-duty trucks operating at cold temperatures became effective. These emission standards were phased in between 2010 and 2013. Similar standards that further restricted emissions from heavy-duty vehicles operating at cold temperatures were phased in from 2012 to 2015. In March 2014, the EPA finalized new “Tier 3” tailpipe emission and evaporative emission standards for passenger vehicles, light-duty trucks, medium-duty passenger vehicles and some heavy-duty vehicles. Under the new rule, tailpipe emission standards for volatile organic compounds, nitrogen oxides, and particulate matter, as well as standards for evaporative emissions, will become increasingly stringent in phases from 2017 to 2025, bringing the federal emission standards in line with California’s emission standards. The harmonization of the federal and California emission standards is expected to lead to reductions in the burden on development, such as a reduction in the number of tests required for certification and standardization of emission reduction systems. The new Tier 3 rule also required reductions in gasoline’s sulfur content beginning in 2017.

In April 2007, the U.S. Supreme Court ruled that the EPA has the authority to regulate automobile emissions of greenhouse gases. In response to this ruling, on April 1, 2010 the EPA and the federal National Highway Traffic Safety Administration (“NHTSA”) issued a joint final rule to reduce the emission of greenhouse gases from passenger vehicles, light-duty trucks and medium-duty passenger vehicles for model years 2012 through 2016. These vehicles were required to meet an estimated combined average emissions level of 250 grams of carbon dioxide per mile, equivalent to 35.5 miles per gallon if the requirements were met through improvements in fuel economy standards. The NHTSA also set Corporate Average Fuel Economy (“CAFE”) standards for passenger vehicles and light-duty trucks that required manufacturers of those vehicles to meet an estimated combined average fuel economy level of 34.1 miles per gallon in model year 2016.

On August 28, 2012, the EPA and the NHTSA jointly issued the final rule to further reduce greenhouse gas emissions and improve fuel economy for passenger vehicles, light-duty trucks and medium-duty passenger vehicles for model years 2017 through 2025. In the final rule, these vehicles are required to meet an estimated combined average emission level of 163 grams of carbon dioxide per mile in model year 2025, equivalent to 54.5 miles per gallon if these requirements were met through improvements in fuel economy standards. The NHTSA also issued CAFE standards for passenger vehicles and light-duty trucks that would require manufacturers to meet an estimated combined average fuel economy level of 49.6 miles per gallon in model year 2025.

On January 12, 2017, the EPA, as part of a Midterm Evaluation of the rule, issued a final determination to maintain the final rule for model years 2022 through 2025. On March 13, 2017, however, the newly-appointed Administrator of the EPA and the newly-appointed Secretary of the Department of Transportation issued a notice that they were reconsidering the final determination.

The EPA announced that it and the NHTSA would issue a “new” final determination by April 1, 2018. On April 2, 2018, the EPA announced that the greenhouse gas emission standards for model years 2022 through 2025 would be repealed and replaced with new, presumably less-stringent, standards and that the EPA and NHTSA would jointly commence drafting a new rule that would set new and presumably less stringent CAFÉ standards for these model years. A draft of the rule setting forth new emission standards is expected to be published in 2018 and, after going through the rule-making process, including the solicitation and review of public comments, the rule could take effect as early as January 2019. On May 1, 2018, however, California, along with 16 other states and the District of Columbia filed suit in the U.S. Circuit Court of Appeals for the District of Columbia to oppose the EPA and NHTSA’s decision to repeal and replace the greenhouse gas emission standards.

In addition, in July 2015, the EPA adopted final rules to limit, in relation to greenhouse gas emissions, the use of various hydroflourocarbons (“HFCs”) and HFC-containing refrigerant blends used in motor vehicle air conditioning systems for new vehicles, among other applications. Toyota purchases air conditioning systems from third parties for use in its vehicles. The final rules list HFC-134a, the most widely-used refrigerant in light-duty vehicles worldwide, as unacceptable for use in motor vehicle air conditioning systems in new light-duty

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vehicles beginning in model year 2021. The final rules also list additional refrigerant blends as unacceptable for use in new light-duty vehicles beginning in model year 2017. Feasible alternatives to these refrigerants that will be prohibited by the rules may be costly or present other risks, such as flammability or other safety concerns.

The EPA has been granted the authority to set fuel standards in connection with the regulation of automobile emissions. In October 2010, the EPA approved the sale and use of fuel with a 15% ethanol blend (“E15”) for model years 2007 and later passenger vehicles and light-duty trucks. The use of E15 is not permitted for engines used in lawnmowers, small generators, motorbikes, boats and other vehicles and equipment. Subsequently, in February 2011, the EPA approved the use of E15 for certain 2001 model year or newer vehicles, such as light-duty passenger vehicles and small trucks. However, E15 is prohibited for use in other 2000 model year or older vehicles and general purpose engines. As a result, the EPA promulgated regulations in July 2011, effective August 2011, requiring businesses that sell E15 to put a warning label regarding E15 on gasoline fuel dispensers.

On January 12, 2017, pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, the EPA announced changes to penalties for violations on exhaust gas and greenhouse gas emissions.

California Standards

Under the federal Clean Air Act, the State of California is permitted to establish its own vehicle emission control standards if it receives a waiver from the EPA. As a result, the California Air Resources Board (“CARB”) established the Low Emission Vehicle Program and set emission standards for certain regulated pollutants that were phased in beginning in the 2004 model year. Under these standards, most light-duty trucks and passenger vehicles are required to meet the same emission standards, which were stricter than the federal standards. As part of the original Low Emission Vehicle Program, the CARB also required that a specified percentage of a manufacturer’s passenger vehicles and light-duty trucks sold in California for all model years 1998 and after be “zero-emission vehicles” (vehicles producing no emissions of regulated pollutants). This zero-emission vehicles requirement also permitted certain advanced technology vehicles such as PHVs, and alternative fuel vehicles that meet “partial zero-emission vehicles requirements” to be granted partial qualification as EVs or FCVs. The current zero-emission regulations mandate substantial annual increases in the production and sale of EVs, FCVs and PHVs such that, by 2025, the state of California has estimated that approximately 15% of the new vehicles sold in the state would be either zero-emission vehicles or partial zero-emission vehicles. Toyota’s MIRAI qualifies as a zero-emission vehicle. The current Prius PHV qualifies as a partial zero-emission vehicle. Toyota intends to continue to develop additional advanced technologies and alternative fuel technologies that will allow other vehicles to qualify as zero-emission vehicles or partial-zero-emission vehicles.

In January 2012, the CARB adopted the Advanced Clean Cars (“ACC”) program. The ACC program includes new Low-Emission Vehicle regulations that reduce smog-causing pollutants (including nitrogen oxides and particulate matter) and greenhouse gas emissions from cars and light-duty trucks for model years 2015 to 2025, and more stringent zero-emission vehicle regulations which will require increased production of zero-emission vehicles and partial zero-emission vehicles for model years 2018 to 2025. The ACC program also lowers allowable smog-forming particulate emissions to 1 mg/mile or lower, to be phased in beginning with model year 2015.

In February 2010, the CARB had enacted a “deemed to comply” rule that provided that compliance with federal greenhouse gas emission standards for model years 2012 through 2016 and 2017 through 2025 would also satisfy California’s greenhouse gas emissions standards. However on March 14, 2017, in reaction to the EPA Administrator’s and the Department of Transportation Secretary’s decision to reconsider the EPA’s prior final determination to maintain the final rule for greenhouse gas emissions for model years 2022 through 2025, California petitioned the U.S. Court of Appeals for the District of Columbia to protect its interests in the final rule. Moreover, in a March 24, 2017 ACC Midterm Review, the CARB affirmed the ACC program’s requirements, and suggested that its decision to follow the federal final rule might change if the federal standards “were substantially changed.”

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On April 2, 2018, upon the EPA and NHTSA’s announcement that it would repeal and replace the greenhouse gas emission standards for model years 2022 through 2025, the CARB stated that, regardless of this federal action, it would not change California’s more stringent standards. On May 1, 2018, California and 16 other states filed suit in the U.S. Circuit Court of Appeals for the District of Columbia to oppose the EPA and NHTSA’s decision to repeal and replace the greenhouse gas emission standards.

Other States’ Standards

The states of New York, Massachusetts, Connecticut, Maine, Maryland, New Jersey, Oregon, Rhode Island and Vermont have adopted regulations substantially similar to California’s zero-emission vehicles requirement. These states, along with Delaware, New Mexico, Pennsylvania, and Washington, have also adopted regulations substantially similar to California’s low emission vehicle and greenhouse gas emission regulations.

Canadian Standards

Canada has established vehicle emission standards equivalent to the federal standards in the United States, including the heightened requirements that became applicable to passenger vehicles and light-duty trucks in model years 2004 and beyond. In addition, in response to the strengthening of the federal greenhouse gas emission standards in the United States applicable to model years 2017 to 2025, Canada finalized equivalent standards in October 2014. Furthermore, certain Canadian provinces are currently considering enacting their own regulations on vehicle emissions of greenhouse gases. On January 11, 2018, the Ministry of Sustainable Development, Environment and the Fight against Climate Change of the Province of Quebec issued regulations on zero-emission vehicles including EVs, FCVs and PHVs, among others. Canada also adopted a more stringent fuel rule, which is based on the fuel rule in the United States, that reduces refineries’ annual average sulfur concentration of gasoline to 10 mg/kg from 2017 with a new addition of credit system to secure compliance.

European Standards

In 2007, the European Parliament adopted more stringent emission standards for passenger vehicles and light commercial vehicles. The effective dates for phasing in these stricter standards for passenger vehicles were September 2009 for Euro 5 and September 2014 for Euro 6. For light commercial vehicles, the effective dates are September 2010 for Euro 5 and September 2015 for Euro 6.

Euro 5 provides for lower emission levels for gasoline and diesel powered vehicles and also extends the manufacturers’ responsibility for emission performance to total vehicle miles of 160 thousand kilometers. The primary focus of Euro 6 is to limit further emissions of diesel powered vehicles and bring them down to a level equivalent to gasoline powered vehicles. In addition, Euro 6 is being implemented in two stages, and beginning with the second stage (September 2017 for passenger vehicles and September 2018 for commercial vehicles), the EU is implementing the Real Driving Emission (“RDE”) regulations, which requires manufactures to conduct on-road emissions tests using portable emissions testers. During the initial phase, which started in January 2016, the RDE tests were used for monitoring purposes. Beginning in September 2017, manufacturers have been required to reduce the divergence between the regulatory limit tested in laboratory conditions and the values of RDE tests. The EU has also decided to implement the Worldwide harmonized Light vehicles Test Procedure (WLTP), which were introduced on September 1, 2017 and will be phased in for all new cars between 2018 and 2019.

Chinese Standards

Emissions regulations are being implemented throughout China pursuant to the Chinese National Standards (GB) of the Ministry of Environmental Protection of the People’s Republic of China, and the manufacture and sale of models not meeting these regulations are prohibited.

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For passenger vehicles, pursuant to GB18352.3-2005, Level 3 Emissions Regulations (China 3) (corresponding to Euro 3 standards) apply to new models after July 2007 and Level 4 Emissions Regulations (China 4) (corresponding to Euro 4 standards) apply to new models after July 2010. Starting with new models after July 2008, on-board diagnostics must be equipped. Furthermore, pursuant to GB18352.5-2013, it has been decided that Level 5 Emissions Regulations (China 5) (corresponding to Euro 5 standards) are to be implemented throughout China for all models that are sold and registered after January 2018.

In an effort to improve the fuel quality in the market, stricter China 5 gasoline and diesel fuel standards have been stipulated in GB17930-2013 and GB19147-2013 to achieve the Level 5 Emissions Regulations, and it has been decided that these standards will be implemented from January 2018. Following that, however, given the accelerated improvement in fuel quality in the market, new China 5 fuel standards (corresponding to Euro 5) have been implemented in 11 provincial capitals in eastern China from January 2016 and nationwide in China from January 2017, as opposed to January 2018 as initially determined. In connection with this, the Ministry of Environmental Protection and the Ministry of Industry and Information Technology issued a directive on the implementation timing of the Level 5 Emissions Regulations, in accordance with which, the implementation started for gasoline-powered passenger vehicles in the 11 provincial capitals from April 2016 and nationwide in China from January 2017, as well as for diesel passenger vehicles nationwide in China pursuant to the regulations of GB18352.5-2013 from January 2018. The next-generation emissions regulations for passenger vehicles, or Level 6 Emissions Regulations (China 6), have been issued as GB18352.6-2016 at the end of 2016, pursuant to which tighter requirements will be implemented in two steps, depending on the regulated subjects and the implementation timing. Specifically, China 6a will apply to all models to be sold or registered in July 2020 and beyond, and China 6b will apply to all models to be sold or registered in July 2023 and beyond. With respect to fuels in the market, the quality standards and the implementation timing for China 6 gasoline fuel and China 6 diesel fuel have been provided in GB17930-2016 and GB19147-2016 so as to keep up with the implementation timing of China 6 emissions regulations.

For heavy-duty diesel-powered commercial vehicles, pursuant to GB17691-2005, Level III Emissions Regulations (China III) apply to models after January 2007. Although Level IV Emissions Regulations (China IV) were to apply to new models after January 2010, and Level V Staged Emissions Regulations (China V) were to apply to new models after January 2012, because the infrastructure to supply sufficient diesel fuel meeting the Level 4 fuel quality standards had yet to be put in place, the implementation of the China IV Emissions Regulations for all models was postponed to July 2013. In connection with such delay, the implementation of the China V Emissions Regulations has been postponed from the original plan and was implemented from July 2017. For heavy-duty gasoline-powered commercial vehicles, pursuant to GB14762-2008, Level III Emissions Regulations (China III) apply to new models after July 2009 and Level IV Emissions Regulations (China IV) apply to new models after July 2012. After the first day the regulation is implemented to a new model, all new models released during the following one-year period also become subject to the regulation. Tightening of the next-generation emissions regulations is currently considered for heavy-duty diesel-powered commercial vehicles and heavy-duty gasoline-powered commercial vehicles.

Compliance with new and more stringent emissions and fuel consumption standards will present significant technological challenges to automobile manufacturers and will likely require significant expenditures. Examples of these challenges include the development of advanced technologies, such as high performance batteries and catalytic converters, as well as the development of alternative fuel technologies. Manufacturers that are unable to develop commercially viable technologies within the time frames set by the new standards will lose their market share and will be forced to decrease the number of types of vehicles and engines in their principal markets.

Standards of Other Countries or Regions

Countries or regions other than Japan, the United States, Europe and China are also proactively introducing emissions regulations. Many countries or regions such as Australia, Mexico, the Middle East, Taiwan and Hong Kong, as well as countries in Eastern Europe and Asia, have considered or implemented emissions regulations.

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In particular, in India, given the worsening air pollution, in December 2015, the Supreme Court banned the registration of diesel cars with engines that are 2 liters or larger in the National Capital Region, including the Delhi metropolitan area. In August 2016, the ban on registration was lifted on the condition that a deposit equal to 1% of the vehicle’s retail price is to be paid to the Environment Pollution Control Authority. Furthermore, the government accelerated the implementations of BS-6 (equivalent to EURO6) to 2020.

Vehicle Fuel Economy

Japanese Standards

The Act on Rationalizing Energy Use requires automobile manufacturers to improve their vehicles to meet specified fuel economy standards. Fuel economy standards are established according to the types of vehicles specified below, and are required to be met by either fiscal 2011 (April 2010-March 2011), fiscal 2016 (April 2015-March 2016), fiscal 2021 (April 2020-March 2021) or fiscal 2023 (April 2022-March 2023).

Among qualifying passenger vehicles are:

• Vehicles which are designated in Article 75, Paragraph 1 of the Road Transport Vehicle Act as type-designated vehicles (“type-designated vehicles”) with 10 seats or less using LPG;

• Type-designated vehicles with 9 seats or less or that are 3.5 tons or less in vehicle weight using gasoline, or type-designated vehicles with 9 seats or less or 10 seats that are 3.5 tons or less in vehicle weight using gas oil;

• Type-designated vehicles with 11 seats or more that are 3.5 tons or less in vehicle weight using gasoline or gas oil; and

• Type-designated vehicles with 10 seats or more that are over 3.5 tons in vehicle weight using gas oil, or designated carbon monoxide emission control vehicles (“designated carbon monoxide emission control vehicles”) which are designated in Article 75-3 Paragraph 1 of the Road Transport Vehicle Act.

Among qualifying cargo vehicles are:

• Type-designated vehicles that are 3.5 tons or less in vehicle weight using gasoline, gas oil or LPG; and

• Type-designated vehicles that are over 3.5 tons in vehicle weight using gas oil or LPG, or designated carbon monoxide emission control vehicles.

Toyota is promoting the improvement of its vehicles in order to achieve compliance with these standards.

Japan is a signatory to the United Nations Framework Convention on Climate Change and has agreed to take measures to reduce its greenhouse gas emissions. Improved vehicle fuel economy is contributing to the reduction in carbon dioxide emissions.

U.S. Standards

The Federal Motor Vehicle Information and Cost Savings Act requires automobile manufacturers to comply with CAFE standards. A manufacturer is subject to substantial civil penalties if, in any model year, its vehicles do not meet the CAFE standards. Manufacturers that exceed the CAFE standards earn credits determined by the difference between the average fuel economy performance of their vehicles and the CAFE standards. Credits earned for the five model years preceding the current model year, and credits projected to be earned for the next three model years, can be used to meet CAFE standards in a current model year.

In April 2006, the NHTSA established CAFE standards applicable to light-duty trucks for model year 2008 and beyond. These CAFE standards aimed at shifting the framework from one that used to be advantageous only

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to compact car manufacturers to one that is fair to full line manufacturers. The requirements were changed so that the CAFE standards are now determined by a sales rate based on vehicle size (measured by the footprint, defined as the size of each vehicle based on the product of wheelbase and tread width) for each manufacturer.

On April 1, 2010, the EPA and the NHTSA issued a joint final rule to reduce the emission of greenhouse gases from passenger vehicles, light-duty trucks and medium-duty passenger vehicles for model years 2012 through 2016. These vehicles were required to meet an estimated combined average emissions level of 250 grams of carbon dioxide per mile, equivalent to 35.5 miles per gallon if the requirements were met through fuel economy standards. The NHTSA also set CAFE standards for passenger vehicles and light-duty trucks that will require manufacturers of those vehicles to meet an estimated combined average fuel economy level of 34.1 miles per gallon in model year 2016. Furthermore, the EPA and the NHTSA joint final rule allows the two agencies and California standards to act in a unified way, and creates a regulatory framework that makes compliance less burdensome for the manufacturers. In addition, in December 2011, the EPA and the NHTSA issued a joint proposed rule to further reduce greenhouse gas emissions and improve fuel economy for passenger vehicles, light-duty trucks and medium-duty passenger vehicles for model years 2017 through 2025. In the rule, which was finalized in August 2012, these vehicles are required to meet an estimated combined average emission level of 163 grams of carbon dioxide per mile in model year 2025, equivalent to 54.5 miles per gallon if these requirements are met through improvements in fuel economy standards. At the same time, the NHTSA also issued CAFE standards for passenger vehicles and light-duty trucks that would require manufacturers to meet an estimated combined average fuel economy level of 49.6 miles per gallon in model year 2025. As discussed above, however, on April 2, 2018, the EPA announced that the greenhouse gas emission standards for model years 2022 through 2025 would be repealed and replaced with new, presumably less-stringent standards, and that the EPA and NHTSA would jointly commence drafting a new rule that would set new and presumably less stringent CAFÉ standards for these model years. On May 1, 2018, California and 16 other states filed suit in the U.S. Circuit Court of Appeals for the District of Columbia to oppose the EPA and NHTSA’s decision to repeal and replace the standards. Whatever the outcome of the EPA and NHTSA’s new rule making efforts or the related litigation, Toyota will continue to strive to meet applicable fuel economy standards by further developing fuel-efficient technology, alternative fuel technology and other advanced technology.

In April 2018, the NHTSA reviewed the penalties on nonconformity of CAFE standards and proposed to re-impose a fine of $5.5 for each inadequate fuel economy level of 0.1 mile per gallon and invited comments from the general public on the Federal Register.

In addition, the Energy Tax Act of 1978 imposes a “gas guzzler” tax on automobiles with a fuel economy rating below specified levels.

European Standards

In February 2014, the European Parliament and Council reduced the average carbon dioxide emissions target for light commercial vehicles to 147 grams per kilometer beginning in 2020. In March 2014, the European Parliament and Council reduced the average carbon dioxide emissions target for passenger vehicles to 95 grams per kilometer beginning in 2021. 95% of each manufacturer’s new cars must comply with this new standard by 2020. Penalties apply to those manufacturers who fail to meet their targets, in amounts corresponding to the degree of shortfall. Manufacturers failing to meet their targets incur penalties of between €5 and €95 per each gram of carbon dioxide per kilometer shortfall for each non-compliant vehicle, and such penalties will rise to €95 in 2019 and beyond. The relevant legislation requested the European Commission to conduct a review by 2015 and, if appropriate, propose new targets for the period beyond 2020, including possibly setting a 2025 target. In November 2017, the European Commission proposed new carbon dioxide standards for cars and light commercial vehicles for the period after 2020. Average emissions of the EU fleet of new cars and vans in 2025 are proposed to be 15% lower than in 2021, reduced further to 30% lower than in 2021 by 2030.

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An increasing number of EU member states are introducing vehicle tax laws based on carbon dioxide emission levels pursuant to the directive issued by the European Commission in 2005. This trend is expected to continue in accordance with the recent increases in environmental awareness.

An EU directive on motor vehicle air conditioning units required manufacturers to replace currently used refrigerants with refrigerants having a lower global warming impact for all newly registered vehicles starting in January 2017.

Chinese Standards

Fuel consumption regulations are being implemented pursuant to the Chinese National Standards (“GB”), and the manufacture and sale of vehicle models not meeting these regulations are prohibited. For light-duty passenger vehicles, pursuant to GB19578-2004, Level 1 Fuel Consumption Regulations apply to new models after July 2005 and Level 2 Fuel Consumption Regulations apply to new models after January 2008. These regulations determine the consumption standards that apply depending on the mass of the applicable vehicle and set forth a method for determining whether each model has met the regulation. GB27999-2011 was then issued to further strengthen fuel consumption regulations from 2012 and beyond. In these Level 3 Fuel Consumption Regulations for passenger vehicles, the regulation framework was substantially revised, such as the introduction of new regulations requiring automobile manufacturers to meet standards of corporate average fuel consumption across models in addition to existing regulations requiring each model to meet consumption standards. Furthermore, in order to achieve the national target for average fuel efficiency for 2020, the following more stringent fuel consumption regulations have been enacted and enforced. First, GB19578-2014, which has been enacted to strengthen regulations for each model, is being applied to new models after January 2016. Second, GB27999-2014, which has been enacted as Level 4 Fuel Consumption Regulations for passenger vehicles to strengthen corporate average regulations, has been in effect since 2016. In addition, Level 5 Fuel Consumption Regulations for passenger vehicles are being examined as more stringent next-generation fuel consumption regulations. For light-duty commercial vehicles, pursuant to GB20997-2007, Level 2 Fuel Consumption Regulations apply to new models after February 2008, Level 1 Fuel Consumption Regulations apply to all vehicles after January 2009, and Level 2 Fuel Consumption Regulations apply to all models after January 2011. In addition, in an effort to further strengthen fuel consumption regulations, GB20997-2015 was enacted, which further applied Level 3 Fuel Consumption Regulations to all new vehicles from January 2018 and is currently being enforced.

With respect to large commercial vehicles, pursuant to QC/T924-2011, Level 1 Fuel Consumption Regulations for large vehicles apply to new vehicles from July 2012, and pursuant to the subsequent enactment of GB30510-2014, Level 2 Fuel Consumption Regulations apply to new vehicles from July 2014 and are currently being enforced. In addition, in an effort to further strengthen fuel consumption regulations, GB30510-2018 was enacted, pursuant to which Level 3 Fuel Consumption Regulations are scheduled to be applied to new vehicles from July 2019.

Standards of Other Countries or Regions

As momentum gathers to increase energy security and prevent global warming, other countries or regions in addition to Japan, the United States, Europe and China are moving to introduce fuel consumption regulations, and Korea, Mexico, Brazil, Taiwan, India, Saudi Arabia and Canada have already decided to introduce or implemented fuel consumption regulations. Australia is also considering the introduction of new regulations to reduce average carbon dioxide emissions by vehicles. Toyota predicts that this trend will spread to other countries, and in the future many nations will consider new regulations related to fuel consumption and carbon dioxide.

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Vehicle Safety

Japanese Standards

In Japan, efforts have been made since 1998 to bring Japanese standards in line with the regulations of the United Nations Economic Commission for Europe (“UN”).

With respect to standards that were previously brought in line with the UN regulations, under the Japanese standards regarding seat belts, the range of vehicles and seats requiring the fitting of seatbelt reminder devices that warn the driver when seat belts are not fastened has been expanded; such requirements will become applicable in stages, starting in September 2020. Standards for compressed natural gas vehicles and liquid natural gas vehicles will apply to new models beginning in March 2020 and to existing models still in production beginning in March 2021. Standards for approaching vehicle audible systems apply to new models beginning from March 2018 and to existing models still in production beginning in October 2020. With respect to standards that are scheduled to be newly brought in line with the UN regulations, the standards for accident emergency call devices will apply to new vehicles fitted with the devices from January 2020 and to existing models still in production from July 2021. Standards for ISOFIX attachment devices will be separated from the standards for seat belt attachment, and apply as new standards to new vehicles from July 2018.

Furthermore, unique to Japan, guidelines for emergency driving stop systems (evacuate to road shoulder type) were established. The enhancement of visibility standards for rearward and surrounding area, as well as the standardization of measures relating to brake override systems, the strengthening of anti-spinal injury measures and anti-drunk driving measures are currently under consideration.

U.S. Standards

The U.S. National Traffic and Motor Vehicle Safety Act of 1966, or Safety Act, requires vehicles and equipment sold in the United States to meet various safety standards issued by the NHTSA. The Safety Act also authorizes the NHTSA to investigate complaints relating to vehicle safety and to order manufacturers to recall and repair vehicles found to have safety-related defects. The cost of these recalls can be substantial depending on the nature of the repair and the number of vehicles affected.

The Transportation Recall Enhancement, Accountability and Documentation Act was enacted in the United States on November 1, 2000. This Act required the NHTSA to regulate the dynamic rollover standards and to upgrade federal motor vehicle safety standards relating to tires. It also required the NHTSA to enhance its authority to gather information potentially relating to motor vehicle defects. This Act substantially increases the maximum civil penalties for violation of regulatory requirements and specifies possible criminal penalties for violations of the federal Fraud and False Statements Act. In 2003, the NHTSA expanded its New Car Assessment Program (“NCAP”) to implement consumer information programs for vehicle rollover resistance and child restraints and, beginning in 2003, adopted extensive early warning defect reporting requirements. Regulations regarding tire-pressure monitoring systems were strengthened in 2005.

Legislation on a transportation budget plan promoting a safe and efficient vehicle safety program for drivers, the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) was passed in August 2005. The legislation requires the NHTSA to propose and issue safety standards to reduce rollover accidents, to complete the creation of standards for the reduction of vehicle passengers released from cars at the time of rollover accidents, to upgrade door lock standards, to complete the upgrade of roof crash standards, to decide on the side impact protection standards for passengers in all seat locations, to review seat belt wearing technology and complete a study that includes a proposal for improving the rate of seat belt usage, to establish standards to display NCAP ratings on new car labels and to complete the upgrade of the standard for power windows that will require pulling up switches. Some actions have already been taken and completed in response to the above requirements.

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In February 2008, legislation to prevent non-traffic related injuries to young children caused by vehicles, the “Cameron Gulbransen Kids Transportation Safety Act,” was passed. Pursuant to this legislation, the NHTSA finalized standards requiring vehicles to be equipped with rearview camera systems in order to ensure rearward visibility to prevent children from being struck by backing vehicles and mandating the use of brake shift interlock systems.

In January 2011, legislation to improve the safety of the visually impaired and other pedestrians, the “Pedestrian Safety Enhancement Act of 2010,” was passed. Based on this standard, the NHTSA determined minimum sound standards for electric and hybrid vehicles.

In response to the unintended acceleration issue in 2010, the NHTSA has started to examine and implement measures to strengthen safety standards, such as mandating brake override systems, mandating Event Data Recorders, or EDR, and standardizing push-start switches.

In December 2015, the Fixing America’s Surface Transportation (“FAST”) Act was signed into law. The FAST Act increased the maximum civil penalty that NHTSA can collect for violations of applicable safety laws from $35 million to $105 million. In connection with recalls of defective vehicles, the FAST Act expanded the free remedy that manufacturers must provide car owners from applying to cars up to 10 years old to applying to cars up to 15 years old.

In 2016, the NHTSA and the Insurance Institute for Highway Safety announced that they have agreed with twenty major vehicle manufacturers to standardize equipment of automatic emergency brakes on almost all new models by 2022. In the same year, the NHTSA also announced a policy regarding automatic driving vehicles to promote such vehicles safely, as well as best practices to enhance cybersecurity for vehicles.

In 2017, the NHTSA proposed to establish a new safety standard to require passenger vehicles and light-duty commercial vehicles to have dedicated short-range communication units that enable Vehicle-to-Vehicle communication.

European Standards

In October 2010, CARS 21 was resumed in order to proceed with the realization of the “2020 Strategy” (CARS 2020) by the European Commission that aims for high-level, sustainable and comprehensive growth, and the CARS 21 final report was issued in June 2012. The final report addresses issues facing the widespread adoption of electrified vehicles, including charging infrastructure in the EU, establishing battery requirements, adopting seat belt reminder devices for all seats, connection of alcohol interlock devices to vehicles, adopting speed management devices, establishing safety requirements for micro urban mobility, strengthening safety regulation to protect the vulnerable from collisions and the possibility of regulation in connection with preventative safety technology. In November 2012, “CARS 2020: Action Plan for a competitive and sustainable automotive industry in Europe” was issued based on the final report. The action plan is built on four core concepts, and within these concepts it discusses enhancement of road safety, improving the market conditions within the EU and the implementation of smart regulations. Each item is given a target date and is to be monitored going forward.

Fitting of emergency call systems (“eCall”) became mandatory for new vehicles from the end of March 2018 for light-duty passenger vehicles and light-duty commercial vehicles using the framework of “Whole Vehicle Type Approval.” New regulations regarding eCall have also been enacted by the United Nations, and these are scheduled to come into effect in July 2018. These regulations will be enacted in conjunction with the building of infrastructure such as communication bases in the different member states of the EU for the receipt and handling of eCalls.

In March 2015, the European Commission published a final report on the benefit and feasibility of a range of new safety technologies. Currently, a process to revise the General Safety Regulation (EC) No 661/2009 and

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Regulation (EC) No 78/2009 with regards to pedestrian protection is ongoing. Amendments to certain UN regulations for individual matters that are to be strengthened through regulations are in progress at the United Nations, while other matters are likely to be considered within the EU. In most cases, the strengthened regulations will apply to new vehicle models from 2020-2021 and to registered vehicles from 2022-2023, although target date of the regulations vary for each matter. Matters to be strengthened include requirement for installation of AEB to small cars, LKAS to small cars, driver monitoring systems, ESS and EDR, as well as TPMS regulations, expansion of application of regulations on collision, strengthening of regulations on pedestrian protection and requirement for installation of camera monitoring system.

In 2016, the European Commission’s proposal regarding major amendments to the WVTA, including a strengthening of type approval process (e.g. enabling access to software algorithm) with the market surveillance requirements (addition of auditing authority by the European Commission), strengthening of auditing of technical service, clarification of recall requirements and increased surveillance of cars already in circulation, was submitted. In May 2018, the European Parliament and Council adopted this proposal.

In addition, GEAR2030 (the High Level Group on the Competitiveness and Sustainable Growth of the Automotive Industry in the European Union) was established in January 2016 as a successor body of the CARS2020, deliberations were conducted at the European Commission and each member state, as well as among high-level related stakeholders, for strengthening the competitiveness of the automobile value chain in Europe by 2030, and the final report was issued in October 2017. The final report discussed the importance of the simplification of the existing and future regulatory framework and its implementation, specific measures addressing automated and connected vehicles, the creation of a EU type-approval framework for the certification of automated driving vehicles and the implementation of the ITS Directive and its delegated regulations by each member state. Going forward, detailed strategies will be deliberated based on the final report.

United Nations Regulations

The 1958 Agreement (“Agreement Concerning the Adoption of Uniform Technical Prescriptions for Wheeled Vehicles, Equipment and Parts which can be Fitted and/or be Used on Wheeled Vehicles and the Conditions for Reciprocal Recognition of Approvals Granted on the Basis of These Prescriptions”) was originally based on the European regulations, but the UN Regulations are developing as an established international law, and Japan, Thailand, Malaysia and Egypt as well as other countries outside the EU have become members after the amendment in 1995, and many other countries are expected to join in the future. The countries bound by the 1958 Agreement have incorporated the UN Regulations into their own domestic policies (The EU and Japan have directly included the UN Regulations into their domestic legislations). While automotive parts and vehicle systems are regulated by the UN regulations, there are currently no regulations with respect to Whole Vehicle Type Approval (WVTA) such as those in Europe. Japan proposed legislation establishing International Whole Vehicle Type Approval (IWVTA) under the United Nations in 2016, and the proposal was adopted as UN Regulation No. 0 (“R0”) in November 2017. IWVTA is expected to take effect in July 2018 (although the mutual recognition of IWVTA will not take place) and to be implemented with the mutual recognition in April 2019. Although this IWVTA, which was created as a first step, is incomplete, it is significant because it creates a framework that enables the reciprocal recognition of whole vehicles. Work will continue to formulate a complete IWVTA system in the future. If a complete IWVTA is formulated, integration of global approval administrative regulations of each country and simplification of vehicle construction regulations are expected.

An amendment to the 1958 Agreement has been considered in order to establish R0 (IWVTA). The bill of such amendment to the 1958 Agreement was passed in June 2016 and came into effect in September 2017. Such amendment will increase the flexibility of the regulations, enabling approvals to be granted for the old series of regulations according to the needs of the signatory countries to the 1958 Agreement. The percentage of required votes for voting in connection with proposed UN regulations will also be considered and the 1958 Agreement is

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expected to become fairer. Such amendment to the 1958 Agreement is expected to make the 1958 Agreement more attractive to countries that are not currently party to the 1958 Agreement, and aims to increase the number of signatory countries.

With the United Nations currently debating the regulation of automated driving vehicles, a requirement relating to automatically commanded steering functions will be added to Regulation No. 79 (steering equipment); in addition, there will be consideration of horizontal regulation for advanced automated driving vehicles (as related initiatives, new fields including data storage, periodic inspections, cyber security and software updates are also being examined).

The 1998 Agreement (“Agreement Concerning the Establishing of Global Technical Regulations for Wheeled Vehicles, Equipment and Parts which can be Fitted and/or be Used on Wheeled Vehicles”) is a U.S.-led agreement that aims to harmonize technical regulations, and defines each regulation as a Global Technical Regulation (“GTR”). At present, there are around 20 regulations in total. Potential future proposals are being examined in order to include more regulations. Potential future proposals include advanced automated driving vehicles, cyber security, EDR, AEBS and LKAS. The countries bound by the 1998 agreement are required to incorporate the GTRs into their domestic laws. The parties to the 1998 agreement include the United States, Canada, China and India, which are not parties to the 1958 agreement, so GTRs will also influence those countries.

Chinese Standards

Vehicle safety regulations in China were drafted with reference to the UN regulations and cover almost the same matters as the UN regulations. However, recently, these regulations also include unique provisions which take into account the distinctive characteristics of the Chinese market environment and the progress of technological development in China and there are increasing number of legislations that differ from the latest UN regulations or other international standards. As for future safety regulations, standards related to batteries, motors, the charging of EVs and data communication are currently being planned.

Standards of Other Countries

Vehicle safety regulations in Canada are basically similar to those in the United States. In regions outside of North America, movements for adoption and conformity with the UN regulations have become active, including in those countries without automotive manufacturing industries. The list of signatories to the 1958 agreement of the United Nations continues to grow, and now includes Korea, Thailand and Malaysia in Asia, as well as Russia, South Africa, Egypt and Morocco. In addition, ASEAN, pursuant to its economic community mission, has decided to adopt the UN regulations as its regional agreement. Latin America, India and countries in the Middle East that are not signatories to the 1958 agreement of the United Nations are also moving forward to conform their respective regulations to the UN regulations or to adopt new regulations consistent with the UN regulations.

Environmental Matters

Japanese Standards

Toyota’s automotive operations in Japan are subject to substantial environmental regulation under laws such as the Air Pollution Control Act the Water Pollution Prevention Act, the Noise Regulation Act and the Vibration Control Act. Under these laws, if a business entity establishes or alters any facility that is regulated by these laws, the business entity is required to give prior notice to regulators, and if a business entity discharges, uses or stores substances that are environmental burdens or causes noise or vibration from such facility, the business entity is also required to comply with the applicable standards. Toyota is also subject to local regulations, which in some cases impose more stringent obligations than the Japanese central government requirements. Toyota has complied with these regulations. Under the Waste Management and Public Cleansing Act, producers of industrial waste must dispose of industrial waste in the manner prescribed in the same act. Toyota has also complied with the same act.

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The Soil Contamination Countermeasures Act of Japan requires that land owners conduct contamination testing and submit a report at the time they cease to use hazardous substances, such as in connection with the sale of a former factory, or if there is a possibility of health hazards due to land contamination. If it is found that land contamination exceeds a certain level, the relevant prefectural authority designates the area considered to be contaminated and orders the land owner to take necessary measures. Toyota is suitably managing its land in accordance with the same law. In addition, under the Act on Recycling, etc. of End-of-Life Vehicles, vehicle manufacturers are required to take back and recycle specified materials (automotive shredder residues, air bags and fluorocarbons) of end-of-life vehicles and the provisions concerning such obligations of vehicle manufacturers became effective in January 2005. Toyota has coordinated with relevant parties to establish a vehicle take-back and recycle system throughout Japan. As a result, in fiscal 2018, Toyota achieved a recycling/recovery rate of 98% for automobile shredder residue (the legal requirement being 70%) and 94% for air bags (the legal requirement being 85%) and reached the targets set forth in this law.

U.S. Standards

Toyota’s assembly, manufacturing and other operations in the United States are subject to a wide range of environmental regulation under the Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act, the Pollution Prevention Act of 1990 and the Toxic Substances Control Act. Toyota is also subject to a variety of state legislation that parallels, and in some cases imposes more stringent obligations than, federal requirements. These federal and state regulations impose severe restrictions on air- and water-borne discharges of pollution from Toyota facilities, the handling of hazardous materials at Toyota facilities and the disposal of wastes from Toyota operations. Toyota is subject to many similar requirements in its operations in Europe, Canada and other countries.

Pursuant to the Clean Air Act, the EPA has promulgated National Ambient Air Quality Standards (“NAAQS”) for six “criteria” pollutants, including for ozone and particulate matter. The Clean Air Act requires that the EPA review and possibly revise these NAAQS every five years. On December 14, 2012, the EPA made the annual health-based particulate matter NAAQS more stringent. On October 1, 2015, the EPA made the annual health-based and welfare-based ozone NAAQS more stringent. The revised annual health-based particulate matter NAAQS and the revised annual health-based and welfare-based ozone NAAQS, as well as any future NAAQS revisions, could lead to additional pollution control requirements on the industry, including on Toyota’s manufacturing operations.

Toyota expects growing pressure in the next several years to further reduce emissions from motor vehicles and manufacturing facilities.

European Standards

In October 2000, the European Union brought into effect a directive that requires member states to promulgate regulations implementing the following:

• automotive manufacturers shall bear all or a significant part of the costs for taking back end-of-life vehicles sold after July 1, 2002 and dismantling and recycling those vehicles. Beginning January 1, 2007, this requirement became applicable to vehicles put on the market before July 1, 2002 as well;

• automotive manufacturers may not use certain hazardous materials in vehicles sold after July 1, 2003;

• type-approved vehicle models put on the market after December 15, 2008 shall be re-usable and/or recyclable to a minimum of 85% by weight per vehicle and shall be re-usable and/or re-use as material or energy to a minimum of 95% by weight per vehicle; and

• end-of-life vehicles must meet actual re-use and/or recycling of 80% and re-use and/or recovery of 85%, respectively, of vehicle weight by 2006, and must meet respectively to 85% and 95% by 2015.

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Laws to implement this directive have come into effect in each of the EU member states. Even now, there are uncertainties surrounding the implementation of the applicable regulations in different EU member states, particularly regarding automotive manufacturer responsibilities and resultant expenses that may be incurred.

In addition, under this directive, the member states must take measures to ensure that car manufacturers, distributors and other auto-related economic operators establish adequate used vehicle collection and treatment facilities and to ensure that hazardous materials and recyclable parts are removed from vehicles prior to shredding. This directive impacts Toyota’s vehicles sold in the EU. Toyota accommodated, in offering its products, any measures the EU member states chose to implement in order to comply with this directive.

The EU has also issued directives and made proposals relating to the following subjects on environmental matters:

• emission standards that include a framework permitting member states to introduce fiscal incentives to promote early compliance; and

• reform of rules governing automotive distribution and service. The block exemption on distribution has been amended so that dealers may engage in cross-border sales actively within the EU and open additional facilities for sales and services. Additionally, dealers may no longer be required by manufacturers to operate both sales and service facilities side by side.

In December 2011, the European Commission proposed to reduce noise produced by cars, vans, buses, coaches and light and heavy trucks. As proposed, noise limit values would ultimately be lowered by four A-weighted decibels for vehicles other than trucks, and three A-weighted decibels for trucks. Compliance would be achieved in three steps over a 10 to 12 year period. In May 2014, a regulation adopting the proposal was published in final form in the EU Official Journal.

Toyota believes that its operations are materially in compliance with environmental regulatory requirements concerning its facilities and products in each of the markets in which it operates. Toyota continuously monitors these requirements and takes necessary operational measures to ensure that it remains in material compliance with all of these requirements.

Toyota believes that environmental regulatory requirements have not had a material adverse effect on its operations. However, compliance with environmental regulations and standards has increased costs and is expected to lead to higher costs in the future. Therefore, Toyota recognizes that effective environmental cost management will become increasingly important. Moreover, innovation and leadership in the area of environmental protection are becoming increasingly important to remain competitive in the market. As a result, Toyota has proceeded with the development and production of environmentally friendly technologies, such as hybrid vehicles, FCVs and high fuel efficiency, low emission engines.

In addressing environmental issues, based on an assessment of the environmental impact of its products through their entire life cycles, from production through sales, disposal and recycling, Toyota, as a manufacturer, strives to take all possible measures from development stage and continues to work toward technological innovations to make efficient use of resources and to reduce the burden on the environment.

Disclosure of Iranian Activities under Section 13(r) of the Securities Exchange Act of 1934

Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012 added Section 13(r) to the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Section 13(r) requires an issuer to disclose in its annual or quarterly reports, as applicable, whether it or any of its affiliates knowingly engaged in certain activities, transactions, or dealings relating to Iran or with designated natural persons or entities involved in terrorism or the proliferation of weapons of mass destruction. Pursuant to Section 13(r), Toyota is disclosing the following information.

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During the fiscal year ended March 31, 2018:

• Toyota Kirloskar Motor Private Limited, a majority-owned subsidiary of Toyota, sold one Toyota vehicle to the Iranian Embassy in India.

This activity contributed approximately ¥5 million in gross revenues and an insignificant amount in net profit to Toyota. Toyota believes that this transaction would not subject it or its affiliates to U.S. sanctions. As this time, Toyota Kirloskar Motor Private Limited intends to cease conducting the activity described above.

Research and Development

The overriding goals of Toyota’s technology and product development activities are to minimize the negative aspects of cars, such as traffic accidents and impact on the environment, and maximize the positive aspects, such as driving pleasure, comfort and convenience. By achieving these sometimes conflicting goals to a high degree, Toyota seeks to open the door to the automobile society of the future. To ensure efficient progress in research and development activities, Toyota coordinates and integrates all research and development phases, from basic research and advanced research to forward-looking technology and product development. With respect to long-term basic research in areas such as energy, the environment, information technology, telecommunications and materials, projects are regularly reviewed and evaluated in consultation with outside experts to achieve research and development cost control. With respect to forward-looking, leading-edge technology and product development, Toyota establishes cost-performance benchmarks on a project-by-project basis to ensure efficient development investment.

The chart below provides an overview of Toyota’s R&D at each phase.

Basic research	Phase to discover development theme Research on basic vehicle-related technology
Forward-looking and leading-edge technology development	Phase requiring technological breakthroughs such as components and systems Development of leading-edge components and systems that are more advanced than those of competitors
Product development	Phase mainly for development of new models Development of all-new models and existing-model upgrades

Toyota is promoting research and development into the early commercialization of next generation environmentally friendly, energy-efficient and safe-vehicle technology. Toyota is also moving forward with the development of innovative technologies such as electrification, connected vehicles and automated driving so as to realize a mobility society of the future that enables everyone to enjoy freedom of movement beyond the conventional concept of vehicles. To this end, Toyota is focusing on the following areas:

• further improvements in hybrid technologies, including in functions and cost, and contributions to the environment through advancements;

• improvement in internal combustion engine fuel economy technology as well as improvement in technology in connection with more stringent emission standards;

• development of EVs, FCVs and other alternative fuel vehicles;

• development of advanced safety technology designed to promote driving and vehicle safety;

• automated driving technologies; and

• connected car technologies.

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For a detailed discussion of the company’s research and development infrastructure, see “Operating and Financial Review and Prospects — Research and Development, Patents and Licenses.”

Components and Parts, Raw Materials and Sources of Supply

Toyota purchases parts, components, raw materials, equipment and other supplies from multiple competing suppliers located around the world. Toyota works closely with its suppliers to pursue optimal procurement. Toyota believes that this policy encourages technological innovation, cost reduction and other measures to strengthen its vehicle competitiveness. Toyota plans to continue purchases based on the same principle and does not anticipate any difficulty in obtaining stable supplies in the foreseeable future.

Because Toyota had more than 50 overseas operations in 26 countries and regions as of March 31, 2018, procurement of parts and components is being carried out not only locally in the country of the production site but also from third countries. As a result, the distribution network has become increasingly complex. In order to realize timely and efficient distribution while minimizing costs, Toyota is promoting efforts to optimize each stage of the supply-chain. To this end, Toyota has developed a standardized system of global distribution and is supporting the operation of the system at each production base. The use of the global distribution system aims at implementing parts procurement that meets changes in vehicle production in a timely manner. These varying efforts, combined together, have led to maximized customer satisfaction, as well as to building a good working relationship with Toyota’s suppliers.

Toyota aims to share information and collaborate among the procurement divisions in each of the regions throughout the world in order to procure parts and materials from the most competitive suppliers among Toyota factories located in various areas worldwide. At the same time, Toyota carries out streamlining efforts together with suppliers in each country in order to achieve sustainable growth. Toyota has been working on cost reduction measure, referred to as RR-CI and VA activities. Through RR-CI activities, which are conducted in conjunction with TNGA, Toyota aims to ensure cost competitiveness through such means as thorough localization, sharing parts and components and manufacturing reforms, together with producing products matching customers’ needs in each region and vehicle category, and reinforcing activities from a medium- to long-term perspective as the third phase of RR-CI. Toyota has been continuously working on VA (value analysis) activities for the various types of vehicles already on sale in collaboration with in-house vehicle companies. In addition, Toyota has been working on the TNGA to achieve sweeping advances in basic performance and product appeal of parts and units as well as seeking cost reductions by sharing more parts and implementing manufacturing reforms.

In 2017, market prices of raw materials generally increased; the impact of OPEC’s coordinated production cut, for example, resulted in higher prices for crude oil and naptha-related products, and the impact of environmental regulations enacted by the government of China resulted in higher prices for aluminum. The direction of prices is still unforeseeable and Toyota is continually promoting cost reduction efforts, such as reducing the amount of raw materials it uses.

Toyota’s ability to continue to obtain supplies in an efficient manner is subject to a number of factors, some of which are not in Toyota’s control. These factors include the ability of its suppliers to provide a continued source of supplies and the effect on Toyota of competition by other users in obtaining the supplies.

Intellectual Property

Toyota holds numerous Japanese and foreign patents, trademarks, design patents and some utility model registrations. It also has a number of applications pending for Japanese and foreign patents. While Toyota considers all of its intellectual property to be important, it does not consider any specific subset of its patents, trademarks, design patents or utility model registrations to be so important that their expiration or termination would materially affect Toyota’s business.

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Capital Expenditures and Divestitures

Set forth below is a chart of Toyota’s principal capital expenditures between April 1, 2015 and March 31, 2018, the approximate total costs of such activity, as well as the location and method of financing of such activity, presented on a “by subsidiary” basis and as reported in Toyota’s annual Japanese securities report filed with the director of the Kanto Local Finance Bureau.

Description of Activity	Total Cost (Yen in billions)		Location	Primary Method of Financing
Japan
Investment primarily in technology and products by Toyota Motor Corporation		1,011.6	Japan	Internal funds, financing from issuance of bonds, etc.
Investment primarily in technology and products by Hino Motors, Ltd.		129.3	Japan	Internal funds
Investment primarily in technology and products by Toyota Motor Kyushu, Inc.		101.0	Japan	Internal funds
Investment primarily in technology and products by Toyota Auto Body Co., Ltd.		73.0	Japan	Internal funds
Investment primarily in technology and products by Daihatsu Motor Co., Ltd.		53.0	Japan	Internal funds
Outside of Japan
Investment primarily to promote localization by Toyota Motor Manufacturing, Kentucky, Inc.		267.7	United States	Internal funds
Investment primarily to promote localization by Toyota Motor Thailand Co., Ltd.		134.9	Thailand	Internal funds
Investment primarily to establish office facilities by Toyota Motor North America, Inc.		113.2	United States	Internal funds
Investment primarily to promote localization by Toyota Motor Manufacturing Canada Inc.		93.1	Canada	Internal funds
Investment primarily to promote localization by PT. Toyota Motor Manufacturing Indonesia		86.5	Indonesia	Borrowings
Investment primarily to promote localization by Toyota do Brazil Ltda.		75.5	Brazil	Internal funds
Investment primarily to promote localization by Toyota Motor Manufacturing, Indiana, Inc.		59.7	United States	Internal funds
Investment primarily to promote localization by Toyota Argentina S.A.		50.5	Argentina	Borrowings
Investment primarily to promote localization by Toyota Motor Europe NV/SA		42.7	Belgium	Internal funds
Investment primarily in leased automobiles by Toyota Motor Credit Corporation		6,619.0	United States	Internal funds, financing from issuance of bonds, etc.

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Set forth below is information with respect to Toyota’s material plans to construct, expand or improve its facilities between April 2018 and March 2019, presented on a “by subsidiary” basis and as reported in Toyota’s annual Japanese securities report filed with the director of the Kanto Local Finance Bureau.

Description of Activity	Total Cost (Yen in billions)		Location	Primary Method of Financing
Japan
Investment primarily in manufacturing facilities by Toyota Motor Corporation		396.4	Japan	Internal funds
Outside of Japan
Investment primarily in manufacturing facilities by Toyota Motor Manufacturing Canada Inc.		83.1	Canada	Internal funds
Investment primarily in manufacturing facilities by Toyota Motor Manufacturing, Indiana, Inc.		54.3	United States	Internal funds
Investment primarily in manufacturing facilities by Toyota Motor Europe NV/SA		53.4	Belgium	Internal funds
Investment primarily in manufacturing facilities by Toyota do Brazil Ltda.		42.2	Brazil	Internal funds
Investment primarily in manufacturing facilities by Toyota Motor Manufacturing, Mississippi, Inc.		39.5	United States	Internal funds

Set forth below is additional information with respect to Toyota’s material plans to construct, expand or improve its facilities.

In Mexico, Toyota plans to increase production capacity at its Baja California factory from 100 thousand units to 160 thousand units in 2018 and to build a new plant in 2019. In the U.S., Toyota plans to construct a new joint-manufacturing plant with Mazda in 2021. In China, Toyota launched a third plant in Guangzhou in 2018. Tianjin FAW Toyota Motor Co., Ltd. also constructed a new production line to replace an aging existing line in June 2018. At the beginning of 2019, Toyota plans to launch a new plant in Malaysia dedicated to passenger vehicles with annual production capacity of 50,000 cars.

Toyota does not collect information on the amount of expenditures already paid for each plant under construction because Toyota believes that it is difficult and it would require unreasonable effort or expense to identify and categorize each expenditure item with reasonable accuracy as past and future expenditures. Toyota’s construction projects consist of numerous expenditures, each of which is continually being adjusted and incurred in variable and constantly changing amounts as part of the overall work-in-progress.

Seasonality

Toyota does not consider its seasonality material in the sense of significantly higher sales during any certain period of the year as compared to other periods of the year.

Legal Proceedings

From time-to-time, Toyota issues vehicle recalls and takes other safety measures including safety campaigns relating to its vehicles. Since 2009, Toyota issued safety campaigns related to the risk of floor mat entrapment of accelerator pedals and vehicle recalls related to slow-to-return or sticky accelerator pedals. In March 2014, Toyota entered into a Deferred Prosecution Agreement (“DPA”) to resolve an investigation by the U.S. Attorney for the Southern District of New York (“SDNY”) related to unintended acceleration in certain of its vehicles. The DPA provided for an independent monitor to review and assess policies and procedures relating to Toyota’s

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safety communications process, its process for sharing vehicle accident information internally and its process for preparing and sharing certain technical reports. In August 2017, the DPA and the monitorship terminated, and in October 2017, the criminal charge that had been filed in connection with the DPA was dismissed.

Personal injury and wrongful death claims involving allegations of unintended acceleration are pending in several consolidated proceedings in federal and state courts, as well as in individual cases in various other states. The judges in the consolidated federal action and the consolidated California state action have approved an Intensive Settlement Process (“ISP”) for such claims in those actions. Under the ISP, all individual claims within the consolidated actions are stayed pending completion of a process to assess whether they can be resolved on terms acceptable to the parties. Cases not resolved after completion of the ISP will then proceed to discovery and toward trial. Toyota has offered the ISP process to plaintiffs in other consolidated actions and in individual cases, as well.

Toyota has been named as a defendant in 33 economic loss class action lawsuits in the United States, which, together with similar lawsuits against Takata and other automakers, have been made part of a multi-district litigation proceeding in the United States District Court for the Southern District of Florida, arising out of allegations that airbag inflators manufactured by Takata are defective. Toyota has reached a settlement with the plaintiffs in the United States economic loss class actions. While the court approved the settlement on October 31, 2017, objectors have filed appeals, which have not yet been resolved. Toyota and other automakers have also been named in certain class actions filed in Mexico, Canada, Australia and Israel, as well as some other actions by states or territories of the United States. Those actions have not been settled and are being litigated.

Toyota self-reported a process gap in fulfilling certain emissions defect information reporting requirements of the U.S. Environmental Protection Agency (“EPA”) and California Air Resources Board, including updates on its repair completion rates for recalled emissions components and certain other reports concerning emissions related defects. Toyota is involved in discussions with the EPA and the SDNY’s Civil Division on this reporting issue. These agencies have requested certain follow-up information regarding this reporting issue, and Toyota is cooperating with the request.

Toyota also has various other pending legal actions and claims, including without limitation personal injury and wrongful death lawsuits and claims in the United States, and is subject to government investigations from-time-to-time.

Beyond the amounts accrued with respect to all aforementioned matters, Toyota is unable to estimate a range of reasonably possible loss, if any, for the pending legal matters because (i) many of the proceedings are in evidence gathering stages, (ii) significant factual issues need to be resolved, (iii) the legal theory or nature of the claims is unclear, (iv) the outcome of future motions or appeals is unknown and/or (v) the outcomes of other matters of these types vary widely and do not appear sufficiently similar to offer meaningful guidance. Based upon information currently available to Toyota, however, Toyota believes that its losses from these matters, if any, beyond the amounts accrued, would not have a material adverse effect on Toyota’s financial position, results of operations or cash flows.

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4.C ORGANIZATIONAL STRUCTURE

As of March 31, 2018, Toyota Motor Corporation had 299 Japanese subsidiaries and 307 overseas subsidiaries. The following table sets forth for each of Toyota Motor Corporation’s principal subsidiaries, the country of incorporation and the percentage ownership interest and the voting interest held by Toyota Motor Corporation.

Name of Subsidiary	Country of Incorporation	Percentage Ownership Interest		Percentage Voting Interest
Toyota Financial Services Corporation	Japan		100.00		100.00
Hino Motors, Ltd.	Japan		50.21		50.30
Toyota Motor Kyushu, Inc.	Japan		100.00		100.00
Daihatsu Motor Co., Ltd.	Japan		100.00		100.00
Toyota Finance Corporation	Japan		100.00		100.00
Misawa Homes Co., Ltd.	Japan		51.00		51.23
Toyota Auto Body Co., Ltd.	Japan		100.00		100.00
Toyota Motor East Japan, Inc.	Japan		100.00		100.00
Daihatsu Motor Kyushu Co., Ltd.	Japan		100.00		100.00
Toyota Motor Engineering & Manufacturing North America, Inc.	United States		100.00		100.00
Toyota Motor Manufacturing, Kentucky, Inc.	United States		100.00		100.00
Toyota Motor North America, Inc.	United States		100.00		100.00
Toyota Motor Credit Corporation	United States		100.00		100.00
Toyota Motor Manufacturing, Indiana, Inc.	United States		100.00		100.00
Toyota Motor Manufacturing, Texas, Inc.	United States		100.00		100.00
Toyota Motor Sales, U.S.A., Inc.	United States		100.00		100.00
Toyota Motor Manufacturing de Baja California, S. de R.L. de C.V.	Mexico		100.00		100.00
Toyota Motor Manufacturing Canada Inc.	Canada		100.00		100.00
Toyota Credit Canada Inc.	Canada		100.00		100.00
Toyota Canada Inc.	Canada		51.00		51.00
Toyota Motor Europe NV/SA	Belgium		100.00		100.00
Toyota Motor Manufacturing France S.A.S.	France		100.00		100.00
Toyota Motor Finance (Netherlands) B.V.	Netherlands		100.00		100.00
Toyota Motor Manufacturing (UK) Ltd.	United Kingdom		100.00		100.00
Toyota Financial Services (UK) PLC	United Kingdom		100.00		100.00
Toyota Motor Manufacturing Turkey Inc.	Turkey		90.00		90.00
OOO “TOYOTA MOTOR”	Russia		100.00		100.00
Toyota Motor (China) Investment Co., Ltd.	China		90.00		90.00
Toyota Motor Finance (China) Co., Ltd.	China		100.00		100.00
Toyota Kirloskar Motor Pvt. Ltd.	India		89.00		89.00
P.T. Astra Daihatsu Motor	Indonesia		61.75		61.75
P.T. Toyota Motor Manufacturing Indonesia	Indonesia		95.00		95.00
Toyota Motor Asia Pacific Pte Ltd.	Singapore		100.00		100.00
Toyota Leasing (Thailand) Co., Ltd.	Thailand		86.84		86.84
Toyota Motor Thailand Co., Ltd.	Thailand		86.43		86.43
Toyota Daihatsu Engineering & Manufacturing Co., Ltd.	Thailand		100.00		100.00
Toyota Motor Corporation Australia Ltd.	Australia		100.00		100.00
Toyota Finance Australia Ltd.	Australia		100.00		100.00
Toyota Argentina S.A.	Argentina		100.00		100.00
Toyota do Brasil Ltda.	Brazil		100.00		100.00
Toyota South Africa Motors (Pty) Ltd.	South Africa		100.00		100.00

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4.D PROPERTY, PLANTS AND EQUIPMENT

As of March 31, 2018, Toyota and its affiliated companies produced automobiles and related components through more than 50 overseas manufacturing organizations in 26 countries and regions besides Japan. The facilities are located principally in Japan, the United States, Canada, the United Kingdom, France, Turkey, Thailand, China, Taiwan, India, Indonesia, South Africa, Argentina and Brazil.

In addition to its manufacturing facilities, Toyota’s properties include sales offices and other sales facilities in major cities, repair service facilities and research and development facilities.

The following table sets forth information, as of March 31, 2018, with respect to Toyota’s principal facilities and organizations, all of which are owned by Toyota Motor Corporation or its subsidiaries. However, small portions, all under approximately 20%, of some facilities are on leased premises.

Facility or Subsidiary Name	Location	Land Area (thousand square meters)		Number of Employees		Principal Products or Functions
Japan (Toyota Motor Corporation)
Tahara Plant	Tahara City, Aichi Pref.		4,029		7,237	Automobiles
Toyota Head Office and Technical Center	Toyota City, Aichi Pref.		3,569		24,051	Research and Development
Higashi-Fuji Technical Center	Susono City, Shizuoka Pref.		2,037		3,144	Research and Development
Motomachi Plant	Toyota City, Aichi Pref.		1,593		7,578	Automobiles
Takaoka Plant	Toyota City, Aichi Pref.		1,312		4,199	Automobiles
Tsutsumi Plant	Toyota City, Aichi Pref.		937		5,111	Automobiles
Kamigo Plant	Toyota City, Aichi Pref.		868		2,996	Automobile parts
Kinu-ura Plant	Hekinan City, Aichi Pref.		836		3,030	Automobile parts
Honsha Plant	Toyota City, Aichi Pref.		551		2,028	Automobile parts
Nagoya Office	Nagoya City, Aichi Pref.		3		2,333	Office
Japan (Subsidiaries)
Hino Motors, Ltd.	Hino City, Tokyo, etc.		6,256		12,705	Automobiles
Daihatsu Motor Co., Ltd.	Ikeda City, Osaka, etc.		7,820		11,446	Automobiles
Toyota Motor Kyushu, Inc.	Miyawaka City, Fukuoka Pref., etc.		1,940		7,807	Automobiles
Toyota Auto Body Co., Ltd.	Kariya City, Aichi Pref., etc.		2,261		11,191	Automobiles
Toyota Motor East Japan, Inc.	Kurokawa-gun, Miyagi Pref., etc.		2,576		7,192	Automobiles
Outside Japan (Subsidiaries)
Toyota Motor Manufacturing, Kentucky, Inc.	Kentucky, U.S.A.		5,161		8,162	Automobiles
Toyota Motor Thailand Co., Ltd.	Samutprakan, Thailand		4,414		10,182	Automobiles
Toyota Motor Sales, U.S.A., Inc.	California, U.S.A.		3,276		5,510	Sales facilities
Toyota Motor Manufacturing Canada, Inc.	Ontario, Canada		4,752		7,589	Automobiles
Toyota Motor North America, Inc.	Texas, U.S.A.		724		1,812	Office

Toyota is constantly engaged in upgrading, modernizing and revamping the operations of its manufacturing facilities based on its assessment of market needs and prospects. To respond flexibly to fluctuations in demand in each of its production operations throughout the world, Toyota continually reviews and implements appropriate

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production measures such as revising takt time and adjusting days of operation. As a result, Toyota believes it would require unreasonable effort to track the exact productive capacity and the extent of utilization of each of its manufacturing facilities with a reasonable degree of accuracy.

As of March 31, 2018, property, plant and equipment having a net book value of approximately ¥658.7 billion was pledged as collateral securing indebtedness incurred by Toyota Motor Corporation’s consolidated subsidiaries. Toyota believes that there does not exist any material environmental issues that may affect the company’s utilization of its assets.

Toyota considers all its principal manufacturing facilities and other significant properties to be in good condition and adequate to meet the needs of its operations.

See “— Business Overview — Capital Expenditures and Divestitures” for a description of Toyota’s material plans to construct, expand or improve facilities.

ITEM 4A. UNRESOLVED STAFF COMMENTS

None.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

5.A OPERATING RESULTS

Financial information discussed in this section is derived from Toyota’s consolidated financial statements that appear elsewhere in this annual report. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America.

Overview

The business segments of Toyota include automotive operations, financial services operations and all other operations. Automotive operations are Toyota’s most significant business segment, accounting for 88% of Toyota’s total revenues before the elimination of intersegment revenues for fiscal 2018. Toyota’s primary markets based on vehicle unit sales for fiscal 2018 were: Japan (25.2%), North America (31.3%), Europe (10.8%) and Asia (17.2%).

Automotive Market Environment

The worldwide automotive market is highly competitive and volatile. The demand for automobiles is affected by a number of factors including social, political and general economic conditions; introduction of new vehicles and technologies; and costs incurred by customers to purchase or operate vehicles. These factors can cause consumer demand to vary substantially in different geographic markets and for different types of automobiles.

During fiscal 2018, for the automotive industry, markets have remained stable in the developed countries and expanded in China, but have slowed down in some resource-rich countries. Meanwhile, there have been movements in different countries and regions to tighten existing regulations or introduce new regulations for the reduction of greenhouse gases, including compulsory quotas for the sale of electrified vehicles.

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The following table sets forth Toyota’s consolidated vehicle unit sales by geographic market based on location of customers for the past three fiscal years.

	Thousands of units
	Year Ended March 31,
	2016		2017		2018
Japan		2,059		2,274		2,255
North America		2,839		2,837		2,806
Europe		844		925		968
Asia		1,345		1,588		1,543
Other*		1,594		1,347		1,392
Overseas total		6,622		6,697		6,709
Total		8,681		8,971		8,964

* “Other” consists of Central and South America, Oceania, Africa and the Middle East, etc.

During fiscal 2017, Toyota’s consolidated vehicle unit sales in Japan increased primarily as a result of the active introduction of new products and the efforts of dealers nationwide. During fiscal 2018, although vehicle unit sales in Japan decreased compared to the previous fiscal year, for fiscal 2017 and fiscal 2018, the Toyota and Lexus brands’ market share excluding mini-vehicles in Japan was 47.8% and 46.9%, and the market share (including Daihatsu and Hino brands) including mini-vehicles was a record high of 45.0% and 44.4%, each remaining at a high level as a result of the efforts of dealers nationwide, consistent with fiscal 2016. Overseas consolidated vehicle unit sales increased as a whole during fiscal 2017, due mainly to increases in Asia and Europe, despite a decrease in the Middle East, and vehicle unit sales increased as a whole during fiscal 2018, due mainly to increases in Europe and Other.

Toyota’s share of total vehicle unit sales in each market is influenced by the quality, safety, reliability, price, design, performance, economy and utility of Toyota’s vehicles compared with those offered by other manufacturers. The timely introduction of new or redesigned vehicles is also an important factor in satisfying customer needs. Toyota’s ability to satisfy changing customer preferences can affect its revenues and earnings significantly.

The profitability of Toyota’s automotive operations is affected by many factors. These factors include:

• vehicle unit sales volumes,

• the mix of vehicle models and options sold,

• the level of parts and service sales,

• the levels of price discounts and other sales incentives and marketing costs,

• the cost of customer warranty claims and other customer satisfaction actions,

• the cost of research and development and other fixed costs,

• the prices of raw materials,

• the ability to control costs,

• the efficient use of production capacity,

• the adverse effect on production due to the reliance on various suppliers for the provision of supplies,

• the adverse effect on market, sales and productions of natural calamities and interruptions of social infrastructure, and

• changes in the value of the Japanese yen and other currencies in which Toyota conducts business.

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Changes in laws, regulations, policies and other governmental actions can also materially impact the profitability of Toyota’s automotive operations. These laws, regulations and policies include those attributed to environmental matters, vehicle safety, fuel economy and emissions that can add significantly to the cost of vehicles.

Many governments also impose local content requirements, impose tariffs and other trade barriers, and enact price or exchange controls that can limit an automaker’s operations and can make the repatriation of profits unpredictable. Changes in these laws, regulations, policies and other governmental actions may affect the production, licensing, distribution or sale of Toyota’s products, cost of products or applicable tax rates. From time-to-time when potential safety problems arise, Toyota issues vehicle recalls and takes other safety measures including safety campaigns relating to its vehicles. Since 2009, Toyota issued safety campaigns related to the risk of floor mat entrapment of accelerator pedals and vehicle recalls related to slow-to-return or sticky accelerator pedals. The recalls and other safety measures described above have led to a number of claims and lawsuits against Toyota. For a more detailed description of these claims and lawsuits, see “Information on the Company — Business Overview — Legal Proceedings” and note 24 to the consolidated financial statements.

The worldwide automotive industry is in a period of global competition which may continue for the foreseeable future, and in general the competitive environment in which Toyota operates is likely to intensify. Toyota believes it has the resources, strategies and technologies in place to compete effectively in the industry as an independent company for the foreseeable future.

Financial Services Operations

The competition in the worldwide automobile financial services industry is intensifying. As competition increases, margins on financing transactions may decrease and market share may also decline as customers obtain financing for Toyota vehicles from alternative sources.

Toyota’s financial services operations mainly include loans and leasing programs for customers and dealers. Toyota believes that its ability to provide financing to its customers is an important value added service. Therefore, Toyota has expanded its network of finance subsidiaries in order to offer financial services in many countries.

Toyota’s competitors for retail financing and retail leasing include commercial banks, credit unions and other finance companies. Meanwhile, commercial banks and other captive automobile finance companies also compete against Toyota’s wholesale financing activities.

Toyota’s total finance receivables increased during fiscal 2018 mainly due to an increase in retail receivables. Also, vehicles and equipment on operating leases, net decreased during fiscal 2018 mainly due to the unfavorable impact of fluctuations in foreign currency translation rates.

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The following table provides information regarding Toyota’s finance receivables and operating leases in the past two fiscal years.

	Yen in millions
	March 31,
	2017			2018
Finance Receivables
Retail		11,453,352			11,995,174
Finance leases		1,265,882			1,460,600
Wholesale and other dealer loans		3,281,142			3,281,427
		16,000,376			16,737,201
Deferred origination costs		172,298			181,764
Unearned income		(804,591	)		(919,967	)
Allowance for credit losses
Retail		(104,354	)		(103,457	)
Finance leases		(23,962	)		(28,817	)
Wholesale and other dealer loans		(30,896	)		(36,800	)
		(159,212	)		(169,074	)
Total finance receivables, net		15,208,871			15,829,924
Less – Current portion		(6,196,649	)		(6,348,306	)
Noncurrent finance receivables, net		9,012,222			9,481,618
Operating Leases
Vehicles		6,105,527			6,124,699
Equipment		13,096			13,373
Less – Deferred income and other		(152,044	)		(203,679	)
		5,966,579			5,934,393
Less – Accumulated depreciation		(1,263,774	)		(1,352,840	)
Less – Allowance for credit losses		(18,889	)		(15,013	)
Vehicles and equipment on operating leases, net		4,683,916			4,566,540

Toyota’s finance receivables are subject to collectability risks. These risks include consumer and dealer insolvencies and insufficient collateral values (less costs to sell) to realize the full carrying values of these receivables. See discussion in “Critical Accounting Estimates — Allowance for Doubtful Accounts and Credit Losses” and note 10 to the consolidated financial statements.

Toyota continues to originate leases to finance new Toyota vehicles. These leasing activities are subject to residual value risk. Residual value losses could be incurred when the lessee of a vehicle does not exercise the option to purchase the vehicle at the end of the lease term. See discussion in “Critical Accounting Estimates — Investment in Operating Leases” and note 2 to the consolidated financial statements.

Toyota enters into interest rate swap agreements and cross currency interest rate swap agreements to convert its fixed-rate debt to variable-rate functional currency debt. A portion of the derivative instruments are entered into to hedge interest rate risk from an economic perspective and are not designated as a hedge of specific assets or liabilities on Toyota’s consolidated balance sheet and accordingly, unrealized gains or losses related to derivatives that are not designated as a hedge are recognized currently in operations. See discussion in “Critical Accounting Estimates — Derivatives and Other Contracts at Fair Value” and “Quantitative and Qualitative Disclosures about Market Risk” and notes 21 and 27 to the consolidated financial statements.

The fluctuations in funding costs can affect the profitability of Toyota’s financial services operations. Funding costs are affected by a number of factors, some of which are not in Toyota’s control. These factors

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include general economic conditions, prevailing interest rates and Toyota’s financial strength. Funding costs increased during fiscal 2017 and fiscal 2018, mainly as a result of higher interest rates.

Toyota launched its credit card business in Japan in April 2001. As of March 31, 2017, Toyota had 14.9 million cardholders, an increase of 0.6 million cardholders compared with March 31, 2016. As of March 31, 2018, Toyota had 15.3 million cardholders, an increase of 0.4 million cardholders compared with March 31, 2017. Credit card receivables as of March 31, 2017 increased by ¥26.0 billion from March 31, 2016 to ¥409.6 billion, and that as of March 31, 2018 increased by ¥23.1 billion from March 31, 2017 to ¥432.7 billion.

Other Business Operations

Toyota’s other business operations consist of housing (including the manufacture and sale of prefabricated homes), information technology related businesses (including information technology and telecommunications, intelligent transport systems and GAZOO) and other businesses.

Toyota does not expect its other business operations to materially contribute to Toyota’s consolidated results of operations.

Currency Fluctuations

Toyota is affected by fluctuations in foreign currency exchange rates. Toyota is exposed to fluctuations in the value of the Japanese yen against the U.S. dollar and the euro as well as the Australian dollar, the Russian ruble, the Canadian dollar, the British pound, and others. Toyota’s consolidated financial statements, which are presented in Japanese yen, are affected by foreign currency exchange fluctuations through both translation risk and transaction risk.

Translation risk is the risk that Toyota’s consolidated financial statements for a particular period or for a particular date will be affected by changes in the prevailing exchange rates of the currencies in those countries in which Toyota does business compared with the Japanese yen. Even though the fluctuations of currency exchange rates to the Japanese yen can be substantial, and, therefore, significantly impact comparisons with prior periods and among the various geographic markets, the translation risk is a reporting consideration and does not reflect Toyota’s underlying results of operations. Toyota does not hedge against translation risk.

Transaction risk is the risk that the currency structure of Toyota’s costs and liabilities will deviate from the currency structure of sales proceeds and assets. Transaction risk relates primarily to sales proceeds from Toyota’s non-domestic operations from vehicles produced in Japan.

Toyota believes that the location of its production facilities in different parts of the world has significantly reduced the level of transaction risk. As part of its globalization strategy, Toyota has continued to localize production by constructing production facilities in the major markets in which it sells its vehicles. In calendar 2016 and 2017, Toyota produced 76.5% and 75.9%, respectively, of its non-domestic sales outside Japan. In North America, 75.9% and 71.1% of vehicles sold in calendar 2016 and 2017, respectively, were produced locally. In Europe, 75.2% and 81.5% of vehicles sold in calendar 2016 and 2017, respectively, were produced locally. Localizing production enables Toyota to locally purchase many of the supplies and resources used in the production process, which allows for a better match of local currency revenues with local currency expenses.

Toyota also enters into foreign currency transactions and other hedging instruments to address a portion of its transaction risk. This has reduced, but not eliminated, the effects of foreign currency exchange rate fluctuations, which in some years can be significant. See notes 21 and 27 to the consolidated financial statements for additional information.

Generally, a weakening of the Japanese yen against other currencies has a positive effect on Toyota’s revenues, operating income and net income attributable to Toyota Motor Corporation. A strengthening of the

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Japanese yen against other currencies has the opposite effect. In fiscal 2017, the Japanese yen was on average stronger against the U.S. dollar in comparison to the previous fiscal year, but in fiscal 2018, was on average weaker against the U.S. dollar in comparison to the previous fiscal year. At the end of each of fiscal 2017 and 2018, the Japanese yen was stronger against the U.S. dollar in comparison to the end of fiscal 2016 and 2017, respectively. In fiscal 2017, the Japanese yen was on average stronger against the euro in comparison to the previous fiscal year, but in fiscal 2018, was on average weaker against the euro in comparison to the previous fiscal year. The Japanese yen was at the end of fiscal 2017 stronger against the euro in comparison to the end of fiscal 2016, but was at the end of fiscal 2018 weaker against the euro in comparison to the end of fiscal 2017. See further discussion in “Quantitative and Qualitative Disclosures about Market Risk — Market Risk Disclosures — Foreign Currency Exchange Rate Risk”.

Segmentation

Toyota’s most significant business segment is its automotive operations. Toyota carries out its automotive operations as a global competitor in the worldwide automotive market. Management allocates resources to, and assesses the performance of, its automotive operations as a single business segment on a worldwide basis and assesses financial and non-financial data such as vehicle unit sales, production volume, market share information, vehicle model plans and plant location costs to allocate resources within the automotive operations. Toyota does not manage any subset of its automotive operations, such as domestic or overseas operations or parts, as separate management units.

Geographic Breakdown

The following table sets forth Toyota’s net revenues in each geographic market based on the country location of the parent company or the subsidiaries that transacted the sale with the external customer for the past three fiscal years.

	Yen in millions
	Year ended March 31,
	2016		2017		2018
Japan		8,588,437		8,798,903		9,273,672
North America		10,822,772		10,033,419		10,347,266
Europe		2,507,292		2,517,601		2,940,243
Asia		4,475,623		4,279,617		4,497,374
Other*		2,008,994		1,967,653		2,320,955

* “Other” consists of Central and South America, Oceania, Africa and the Middle East.

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Results of Operations — Fiscal 2018 Compared with Fiscal 2017

	Yen in millions
	Year ended March 31,						2018 v. 2017 Change
	2017			2018			Amount			Percentage
Net revenues:
Japan		14,830,868			16,024,844			1,193,976			8.1	%
North America		10,239,091			10,574,410			335,319			3.3
Europe		2,681,039			3,185,224			504,185			18.8
Asia		4,819,821			5,148,139			328,318			6.8
Other*		2,161,074			2,453,299			292,225			13.5
Intersegment elimination/unallocated amount		(7,134,700	)		(8,006,406	)		(871,706	)		—
Total		27,597,193			29,379,510			1,782,317			6.5
Operating income (loss):
Japan		1,202,245			1,659,918			457,673			38.1
North America		311,194			138,899			(172,295	)		(55.4	)
Europe		(12,244	)		75,026			87,270			—
Asia		435,179			433,199			(1,980	)		(0.5	)
Other*		58,694			112,663			53,969			91.9
Intersegment elimination/unallocated amount		(696	)		(19,843	)		(19,147	)		—
Total		1,994,372			2,399,862			405,490			20.3
Operating margin		7.2	%		8.2	%		1.0	%
Income before income taxes and equity in earnings of affiliated companies		2,193,825			2,620,429			426,604			19.4
Net margin from income before income taxes and equity in earnings of affiliated companies		7.9	%		8.9	%		1.0	%
Equity in earnings of affiliated companies		362,060			470,083			108,023			29.8
Net income attributable to Toyota Motor Corporation		1,831,109			2,493,983			662,874			36.2
Net margin attributable to Toyota Motor Corporation		6.6	%		8.5	%		1.9	%

* “Other” consists of Central and South America, Oceania, Africa and the Middle East.

Net Revenues

Toyota had net revenues for fiscal 2018 of ¥29,379.5 billion, an increase of ¥1,782.3 billion, or 6.5%, compared with the prior fiscal year. The increase resulted mainly from the ¥770.0 billion favorable impact of fluctuations in foreign currency translation rates and the ¥670.0 billion impact of changes in vehicle unit sales and sales mix.

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The table below shows Toyota’s net revenues from external customers by product category and by business.

	Yen in millions
	Year ended March 31,				2018 v. 2017 Change
	2017		2018		Amount		Percentage
Vehicles		21,540,563		22,631,201		1,090,638		5.1	%
Parts and components for overseas production		468,214		498,802		30,588		6.5
Parts and components for after service		1,955,781		2,044,104		88,323		4.5
Other		1,067,671		1,173,122		105,451		9.9
Total Automotive		25,032,229		26,347,229		1,315,000		5.3
All Other		781,267		1,073,047		291,780		37.3
Total sales of products		25,813,496		27,420,276		1,606,780		6.2
Financial Services		1,783,697		1,959,234		175,537		9.8
Total		27,597,193		29,379,510		1,782,317		6.5	%

Toyota’s net revenues include net revenues from sales of products, consisting of net revenues from automotive operations and all other operations, which increased by 6.2% during fiscal 2018 compared with the prior fiscal year to ¥27,420.2 billion, and net revenues from financial services operations which increased by 9.8% during fiscal 2018 compared with the prior fiscal year to ¥1,959.2 billion. The increase in net revenues from sales of products is mainly due to the favorable impact of fluctuations in foreign currency translation rates and the impact of changes in vehicle unit sales and sales mix.

The following table shows the number of financing contracts by geographic region at the end of fiscal 2018 and 2017, respectively.

	Number of financing contracts in thousands
	Year ended March 31,				2018 v. 2017 Change
	2017		2018		Amount		Percentage
Japan		1,977		2,103		126		6.4	%
North America		5,394		5,465		71		1.3
Europe		1,019		1,112		93		9.1
Asia		1,575		1,672		97		6.2
Other*		786		846		60		7.6
Total		10,751		11,198		447		4.2	%

* “Other” consists of Central and South America, Oceania and Africa.

Geographically, net revenues (before the elimination of intersegment revenues) for fiscal 2018 increased by 8.1% in Japan, 3.3% in North America, 18.8% in Europe, 6.8% in Asia, and 13.5% in Other compared with the prior fiscal year. Excluding the impact of changes in the Japanese yen values used for translation purposes of ¥770.0 billion, net revenues in fiscal 2018 would have increased by 8.1% in Japan, 0.7% in North America, 8.0% in Europe, 2.5% in Asia, and 10.4% in Other compared with the prior fiscal year.

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The following is a discussion of net revenues in each geographic market (before the elimination of intersegment revenues).

Japan

	Thousands of units
	Year ended March 31,				2018 v. 2017 Change
	2017		2018		Amount		Percentage
Toyota’s consolidated vehicle unit sales*		4,000		4,137		137		3.4	%
*  including number of exported vehicle unit sales
	Yen in millions
	Year ended March 31,				2018 v. 2017 Change
	2017		2018		Amount		Percentage
Net revenues:
Sales of products		14,705,518		15,893,465		1,187,947		8.1	%
Financial services		125,350		131,379		6,029		4.8
Total		14,830,868		16,024,844		1,193,976		8.1	%

Toyota’s domestic and exported vehicle unit sales increased by 137 thousand vehicles compared with the prior fiscal year and net revenues in Japan increased. For fiscal 2017 and 2018, exported vehicle unit sales were 1,726 thousand units and 1,882 thousand units, respectively.

North America

	Thousands of units
	Year ended March 31,				2018 v. 2017 Change
	2017		2018		Amount			Percentage
Toyota’s consolidated vehicle unit sales		2,837		2,806		(31	)		(1.1	)%
	Yen in millions
	Year ended March 31,				2018 v. 2017 Change
	2017		2018		Amount			Percentage
Net revenues:
Sales of products		8,951,333		9,173,277		221,944			2.5	%
Financial services		1,287,758		1,401,133		113,375			8.8
Total		10,239,091		10,574,410		335,319			3.3	%

Net revenues in North America increased due primarily to the favorable impact of fluctuations in foreign currency translation rates despite vehicle unit sales decreasing by 31 thousand vehicles compared with the prior fiscal year.

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Europe

	Thousands of units
	Year ended March 31,				2018 v. 2017 Change
	2017		2018		Amount		Percentage
Toyota’s consolidated vehicle unit sales		925		968		43		4.7	%
	Yen in millions
	Year ended March 31,				2018 v. 2017 Change
	2017		2018		Amount		Percentage
Net revenues:
Sales of products		2,588,968		3,074,396		485,428		18.7	%
Financial services		92,071		110,828		18,757		20.4
Total		2,681,039		3,185,224		504,185		18.8	%

Net revenues in Europe increased due primarily to the favorable impact of fluctuations in foreign currency translation rates and the 43 thousand vehicle increase in vehicle unit sales compared with the prior fiscal year. The vehicle unit sales increased due mainly to strong sales of C-HR and hybrid vehicles.

Asia

	Thousands of units
	Year ended March 31,				2018 v. 2017 Change
	2017		2018		Amount			Percentage
Toyota’s consolidated vehicle unit sales		1,588		1,543		(45	)		(2.8	)%
	Yen in millions
	Year ended March 31,				2018 v. 2017 Change
	2017		2018		Amount			Percentage
Net revenues:
Sales of products		4,689,774		4,996,339		306,565			6.5	%
Financial services		130,047		151,800		21,753			16.7
Total		4,819,821		5,148,139		328,318			6.8	%

Net revenues in Asia increased due primarily to the favorable impact of fluctuations in foreign currency translation rates despite vehicle unit sales decreasing by 45 thousand compared with the prior fiscal year.

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Other

	Thousands of units
	Year ended March 31,				2018 v. 2017 Change
	2017		2018		Amount		Percentage
Toyota’s consolidated vehicle unit sales		1,347		1,392		45		3.3	%
	Yen in millions
	Year ended March 31,				2018 v. 2017 Change
	2017		2018		Amount		Percentage
Net revenues:
Sales of products		1,996,087		2,270,150		274,063		13.7	%
Financial services		164,987		183,149		18,162		11.0
Total		2,161,074		2,453,299		292,225		13.5	%

Net revenues in Other increased due primarily to the 45 thousand vehicle increase in vehicle unit sales compared with the prior fiscal year. The increase in vehicle unit sales was due mainly to strong sales of Hilux and Etios in Central and South America.

Operating Costs and Expenses

	Yen in millions
	Year ended March 31,				2018 v. 2017 Change
	2017		2018		Amount		Percentage
Operating costs and expenses
Cost of products sold		21,543,035		22,600,474		1,057,439		4.9	%
Cost of financing operations		1,191,301		1,288,679		97,378		8.2
Selling, general and administrative		2,868,485		3,090,495		222,010		7.7
Total		25,602,821		26,979,648		1,376,827		5.4	%

	Yen in millions
	2018 v. 2017 Change
Changes in operating costs and expenses:
Effect of changes in vehicle unit sales and sales mix		600,000
Effect of fluctuation in foreign currency translation rates		505,000
Effect of increase of cost of financing operations		61,300
Effect of cost reduction efforts		(165,000	)
Effect of decrease of miscellaneous costs and others		(60,000	)
Other		435,527
Total		1,376,827

Operating costs and expenses increased by ¥1,376.8 billion, or 5.4%, to ¥26,979.6 billion during fiscal 2018 compared with the prior fiscal year. This increase resulted from the ¥600.0 billion impact of changes in vehicle unit sales and sales mix, the ¥505.0 billion unfavorable impact of fluctuations in foreign currency translation rates, the ¥61.3 billion increase in cost of financing operations (excluding the effect of fluctuation in foreign currency translation rates), and the ¥435.5 billion increase in other, partially offset by the ¥165.0 billion impact of cost reduction efforts, and the ¥60.0 billion decrease of miscellaneous costs and others.

The decrease in miscellaneous costs and others was due mainly to the ¥300.0 billion decrease in product quality related expenses, partially offset by the ¥75.0 billion increase in labor costs, the ¥50.0 billion increase in

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depreciation expenses and the ¥90.0 billion increase in other various costs. “Other” includes the impact of consolidation and deconsolidation of certain entities due to changes in ownership interest.

The decrease in product quality related expenses was due mainly to a decrease in provisions for recalls and other safety measures resulting from a decrease in actual payments during fiscal 2018. See note 13 to the consolidated financial statements for further discussion.

Cost Reduction Efforts

During fiscal 2018, continued cost reduction efforts together with suppliers contributed to a reduction of operating costs and expenses by ¥165.0 billion. This was due to ¥120.0 billion in cost reduction efforts concerning design related costs due mainly to ongoing value engineering activities, and ¥45.0 billion in cost reduction efforts at plants and logistics departments.

These cost reduction efforts related to ongoing value engineering and value analysis activities, the use of common parts resulting in a reduction of part types and other manufacturing initiatives designed to reduce the costs of vehicle production. The amount of the effect of cost reduction efforts includes the impact of fluctuation in the price of steel, precious metals, non-ferrous alloys including aluminum, plastic parts and other production materials and parts.

Cost of Products Sold

Cost of products sold increased by ¥1,057.4 billion, or 4.9%, to ¥22,600.4 billion during fiscal 2018 compared with the prior fiscal year. The increase resulted mainly from the impact of changes in vehicle unit sales and sales mix, as well as the unfavorable impact of fluctuations in foreign currency translation rates, the impact of consolidation and deconsolidation of certain entities due to changes in ownership interest, and the increase in depreciation expenses and labor costs, partially offset by the decrease in product quality related expenses and the impact of cost reduction efforts.

Cost of Financing Operations

Cost of financing operations increased by ¥97.3 billion, or 8.2%, to ¥1,288.6 billion during fiscal 2018 compared with the prior fiscal year. The increase resulted mainly from the unfavorable impact of fluctuations in foreign currency translation rates.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased by ¥222.0 billion, or 7.7%, to ¥3,090.4 billion during fiscal 2018 compared with the prior fiscal year. This increase mainly reflected the impact of changes in vehicle unit sales and sales mix, the unfavorable impact of fluctuations in foreign currency translation rates, and the impact of consolidation and deconsolidation of certain entities due to changes in ownership interest.

Operating Income

	Yen in millions
	2018 v. 2017 Change
Changes in operating income and loss:
Effect of changes in exchange rates		265,000
Effect of cost reduction efforts		165,000
Effect of decrease of miscellaneous costs and others		60,000
Effect of marketing activities		(100,000	)
Other		15,490
Total		405,490

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Toyota’s operating income increased by ¥405.4 billion, or 20.3%, to ¥2,399.8 billion during fiscal 2018 compared with the prior fiscal year. This increase was due mainly to the ¥265.0 billion favorable impact of changes in foreign currency exchange rates, the ¥165.0 billion impact of cost reduction efforts, and the ¥60.0 billion decrease in miscellaneous costs and others, partially offset by the ¥100.0 billion impact of marketing activities. The decrease in miscellaneous costs and others was due to the ¥300.0 billion decrease in product quality related expenses, partially offset by the ¥75.0 billion increase in labor costs, the ¥50.0 billion increase in depreciation expenses and the ¥90.0 billion increase in other various costs.

Marketing efforts and marketing activities include changes in vehicle unit sales and sales mix, sales expenses and other. “Other” includes valuation gains and losses from interest rate swaps etc.

From fiscal 2017, the effect of changes in exchange rates includes translational impacts concerning operating income of overseas subsidiaries and concerning provisions in foreign currencies at the end of the fiscal year. During fiscal 2018, the positive effect of changes in exchange rates includes ¥25.0 billion in translational impacts concerning operating income of overseas subsidiaries (North America ¥5.0 billion and Asia ¥20.0 billion) and ¥25.0 billion in translational impacts concerning provisions in foreign currencies at the end of the fiscal year.

During fiscal 2018, operating income (before elimination of intersegment profits) compared with the prior fiscal year increased by ¥457.6 billion, or 38.1%, in Japan, ¥87.2 billion in Europe, ¥53.9 billion, or 91.9%, in Other, and decreased by ¥172.2 billion, or 55.4%, in North America, and ¥1.9 billion, or 0.5%, in Asia.

The following is a description of operating income in each geographic market.

Japan

	Yen in millions
	2018 v. 2017 Change
Changes in operating income and loss:
Effect of changes in exchange rates		260,000
Effect of cost reduction efforts		140,000
Effect of increase of miscellaneous costs and others		(35,000	)
Effect of marketing efforts		85,000
Other		7,673
Total		457,673

North America

	Yen in millions
	2018 v. 2017 Change
Changes in operating income and loss:
Effect of changes in exchange rates		20,000
Effect of decrease of miscellaneous costs and others		30,000
Effect of marketing activities		(245,000	)
Other		22,705
Total		(172,295	)

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Europe

	Yen in millions
	2018 v. 2017 Change
Changes in operating income and loss:
Effect of changes in exchange rates		(5,000	)
Effect of cost reduction efforts		20,000
Effect of decrease of miscellaneous costs and others		85,000
Effect of marketing activities		(5,000	)
Other		(7,730	)
Total		87,270

Asia

	Yen in millions
	2018 v. 2017 Change
Changes in operating income and loss:
Effect of changes in exchange rates		(25,000	)
Effect of cost reduction efforts		15,000
Effect of marketing efforts		15,000
Other		(6,980	)
Total		(1,980	)

Other

	Yen in millions
	2018 v. 2017 Change
Changes in operating income and loss:
Effect of changes in exchange rates		15,000
Effect of cost reduction efforts		(10,000	)
Effect of marketing efforts		50,000
Other		(1,031	)
Total		53,969

Other Income and Expenses

Interest and dividend income increased by ¥20.5 billion, or 12.9%, to ¥179.5 billion during fiscal 2018 compared with the prior fiscal year.

Interest expense decreased by ¥1.7 billion, or 6.0%, to ¥27.5 billion during fiscal 2018 compared with the prior fiscal year.

Foreign exchange gain (loss), net decreased by ¥10.9 billion, or 32.5%, to ¥22.6 billion during fiscal 2018 compared with the prior fiscal year. Foreign exchange gains and losses include the differences between the value of foreign currency denominated assets and liabilities recognized through transactions in foreign currencies translated at prevailing exchange rates and the value at the date the transaction settled during the fiscal year, including those settled using forward foreign currency exchange contracts, or the value translated by appropriate year-end exchange rates. The ¥10.9 billion decrease in foreign exchange gain (loss), net was due mainly to the losses recorded in fiscal 2018 resulting from the Japanese yen being stronger against foreign currencies at the dates of settlement of the foreign currency trade accounts receivable than at the dates of the transactions.

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Other income, net increased by ¥9.7 billion, or 26.9%, to ¥45.9 billion during fiscal 2018 compared with the prior fiscal year.

Income Taxes

The provision for income taxes decreased by ¥124.4 billion, or 19.8%, to ¥504.4 billion during fiscal 2018 compared with the prior fiscal year. This decrease was due mainly to revaluation of deferred tax assets and liabilities resulting from the Tax Cuts and Jobs Act of 2017 of the United States. The effective tax rate for fiscal 2018 was 19.2%.

Net Income Attributable to Noncontrolling Interests and Equity in Earnings of Affiliated Companies

Net income attributable to noncontrolling interests decreased by ¥3.7 billion, or 3.9%, to ¥92.1 billion during fiscal 2018 compared with the prior fiscal year. This decrease was due mainly to a decrease during fiscal 2018 in net income attributable to the shareholders of consolidated subsidiaries.

Equity in earnings of affiliated companies during fiscal 2018 increased by ¥108.0 billion, or 29.8%, to ¥470.0 billion compared with the prior fiscal year. This increase was due mainly to an increase during fiscal 2018 in net income attributable to the shareholders of affiliated companies accounted for by the equity method.

Net Income Attributable to Toyota Motor Corporation

Net income attributable to the shareholders of Toyota Motor Corporation increased by ¥662.8 billion, or 36.2%, to ¥2,493.9 billion during fiscal 2018 compared with the prior fiscal year.

Net income attributable to common shareholders during fiscal 2018 is ¥2,481.6 billion, which is derived by deducting dividends and accretion to Model AA Class Shares of ¥12.2 billion from net income attributable to Toyota Motor Corporation.

Other Comprehensive Income and Loss

Other comprehensive income and loss decreased by ¥235.3 billion to losses of ¥205.2 billion for fiscal 2018 compared with the prior fiscal year. This decrease resulted from unfavorable foreign currency translation adjustment losses of ¥118.9 billion in fiscal 2018 compared with losses of ¥52.4 billion in the prior fiscal year due mainly to appreciation of the yen against the U.S. dollar, from unrealized holding losses on securities in fiscal 2018 of ¥96.5 billion compared with losses of ¥8.0 billion in the prior fiscal year due mainly to changes in prices of marketable securities in stock exchange markets, and from pension liability adjustment gains in fiscal 2018 of ¥21.7 billion compared with gains of ¥92.8 billion in the prior fiscal year due mainly to changes in fair value of plan assets.

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Segment Information

The following is a discussion of the results of operations for each of Toyota’s operating segments. The amounts presented are prior to intersegment elimination.

	Yen in millions
	Year ended March 31,						2018 v. 2017 Change
	2017			2018			Amount			Percentage
Automotive:
Net revenues		25,081,847			26,397,940			1,316,093			5.2	%
Operating income		1,692,973			2,011,135			318,162			18.8
Financial Services:
Net revenues		1,823,600			2,017,008			193,408			10.6
Operating income		222,428			285,546			63,118			28.4
All Other:
Net revenues		1,321,052			1,646,118			325,066			24.6
Operating income		81,327			100,812			19,485			24.0
Intersegment elimination/unallocated amount:
Net revenues		(629,306	)		(681,556	)		(52,250	)		—
Operating income		(2,356	)		2,369			4,725			—

Automotive Operations Segment

The automotive operations segment is Toyota’s largest operating segment by net revenues. Net revenues for the automotive segment increased during fiscal 2018 by ¥1,316.0 billion, or 5.2%, to ¥26,397.9 billion compared with the prior fiscal year. The increase mainly reflects the ¥710.0 billion favorable impact of fluctuations in foreign currency translation rates and the ¥670.0 billion favorable impact of changes in vehicle unit sales and sales mix.

Operating income from the automotive operations increased by ¥318.1 billion, or 18.8%, to ¥2,011.1 billion during fiscal 2018 compared with the prior fiscal year. This increase in operating income was due mainly to the ¥265.0 billion favorable impact of changes in foreign currency exchange rates, ¥165.0 billion impact of cost reduction efforts, and the ¥60.0 billion decrease in miscellaneous costs and others, partially offset by the ¥150.0 billion impact of marketing activities.

The decrease in miscellaneous costs and others was due mainly to the ¥300.0 billion decrease in product quality related expenses, partially offset by the ¥75.0 billion increase in labor costs, the ¥50.0 billion increase in depreciation expenses and the ¥90.0 billion increase in other various costs. The impact of marketing activities was due primarily to the increase in sales incentives in North America.

Financial Services Operations Segment

Net revenues for the financial services operations increased during fiscal 2018 by ¥193.4 billion, or 10.6%, to ¥2,017.0 billion compared with the prior fiscal year. This increase was primarily due to the ¥60.0 billion favorable impact of fluctuations in foreign currency translation rates.

Operating income from financial services operations increased by ¥63.1 billion, or 28.4%, to ¥285.5 billion during fiscal 2018 compared with the prior fiscal year. This increase was due primarily to the increase in financing volume and the decrease in expenses related to credit losses and residual value losses, in sales finance subsidiaries.

All Other Operations Segment

Net revenues for Toyota’s other operations segments increased by ¥325.0 billion, or 24.6%, to ¥1,646.1 billion during fiscal 2018 compared with the prior fiscal year.

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Operating income from Toyota’s other operations segments increased by ¥19.4 billion, or 24.0%, to ¥100.8 billion during fiscal 2018 compared with the prior fiscal year.

Results of Operations — Fiscal 2017 Compared with Fiscal 2016

	Yen in millions
	Year ended March 31,						2017 v. 2016 Change
	2016			2017			Amount			Percentage
Net revenues:
Japan		14,759,488			14,830,868			71,380			0.5	%
North America		11,051,970			10,239,091			(812,879	)		(7.4	)
Europe		2,661,331			2,681,039			19,708			0.7
Asia		5,003,859			4,819,821			(184,038	)		(3.7	)
Other*		2,210,214			2,161,074			(49,140	)		(2.2	)
Intersegment elimination/unallocated amount		(7,283,744	)		(7,134,700	)		149,044			—
Total		28,403,118			27,597,193			(805,925	)		(2.8	)
Operating income (loss):
Japan		1,677,522			1,202,245			(475,277	)		(28.3	)
North America		528,819			311,194			(217,625	)		(41.2	)
Europe		72,416			(12,244	)		(84,660	)		—
Asia		449,189			435,179			(14,010	)		(3.1	)
Other*		108,909			58,694			(50,215	)		(46.1	)
Intersegment elimination/unallocated amount		17,116			(696	)		(17,812	)		—
Total		2,853,971			1,994,372			(859,599	)		(30.1	)
Operating margin		10.0	%		7.2	%		(2.8	)%
Income before income taxes and equity in earnings of affiliated companies		2,983,381			2,193,825			(789,556	)		(26.5	)
Net margin from income before income taxes and equity in earnings of affiliated companies		10.5	%		7.9	%		(2.6	)%
Equity in earnings of affiliated companies		329,099			362,060			32,961			10.0
Net income attributable to Toyota Motor Corporation		2,312,694			1,831,109			(481,585	)		(20.8	)
Net margin attributable to Toyota Motor Corporation		8.1	%		6.6	%		(1.5	)%

* “Other” consists of Central and South America, Oceania, Africa and the Middle East.

Net Revenues

Toyota had net revenues for fiscal 2017 of ¥27,597.1 billion, a decrease of ¥805.9 billion, or 2.8%, compared with the prior fiscal year. This decrease mainly reflected the unfavorable impact of fluctuations in foreign currency translation rates of ¥2,380.0 billion, partially offset by the changes in vehicle unit sales and sales mix of ¥1,250.0 billion. For fiscal 2017 automotive market, Europe and Japan progressed in a steady manner and the market in Europe increased by 8.1% in calendar 2016 compared with the prior calendar year and the market in Japan increased by 7.5% compared with the prior fiscal year. Under these automotive market conditions, Toyota’s consolidated vehicle unit sales increased by 3.3% compared with the prior fiscal year to 8,971 thousand vehicles.

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The table below shows Toyota’s net revenues from external customers by product category and by business.

	Yen in millions
	Year ended March 31,				2017 v. 2016 Change
	2016		2017		Amount			Percentage
Vehicles		22,267,136		21,540,563		(726,573	)		(3.3	)%
Parts and components for overseas production		493,499		468,214		(25,285	)		(5.1	)
Parts and components for after service		2,042,623		1,955,781		(86,842	)		(4.3	)
Other		1,120,555		1,067,671		(52,884	)		(4.7	)
Total Automotive		25,923,813		25,032,229		(891,584	)		(3.4	)
All Other		625,298		781,267		155,969			24.9
Total sales of products		26,549,111		25,813,496		(735,615	)		(2.8	)
Financial Services		1,854,007		1,783,697		(70,310	)		(3.8	)
Total		28,403,118		27,597,193		(805,925	)		(2.8	)%

Toyota’s net revenues include net revenues from sales of products, consisting of net revenues from automotive operations and all other operations, which decreased by 2.8% during fiscal 2017 compared with the prior fiscal year to ¥25,813.4 billion, and net revenues from financial services operations which decreased by 3.8% during fiscal 2017 compared with the prior fiscal year to ¥1,783.6 billion. The decrease in net revenues from sales of products is mainly due to the unfavorable impact of fluctuations in foreign currency translation rates.

The following table shows the number of financing contracts by geographic region at the end of fiscal 2017 and 2016, respectively.

	Number of financing contracts in thousands
	Year ended March 31,				2017 v. 2016 Change
	2016		2017		Amount		Percentage
Japan		1,961		1,977		16		0.8	%
North America		5,252		5,394		142		2.7
Europe		954		1,019		65		6.8
Asia		1,531		1,575		44		2.9
Other*		767		786		19		2.5
Total		10,465		10,751		286		2.7	%

* “Other” consists of Central and South America, Oceania and Africa.

Geographically, net revenues (before the elimination of intersegment revenues) for fiscal 2017 increased by 0.5% in Japan and 0.7% in Europe, while they decreased by 7.4% in North America, 3.7% in Asia, and 2.2% in Other compared with the prior fiscal year. Excluding the impact of changes in the Japanese yen values used for translation purposes of ¥2,380.0 billion, net revenues in fiscal 2017 would have increased by 0.5% in Japan, 3.1% in North America, 17.1% in Europe, 8.0% in Asia and 12.8% in Other compared with the prior fiscal year.

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The following is a discussion of net revenues in each geographic market (before the elimination of intersegment revenues).

Japan

	Thousands of units
	Year ended March 31,				2017 v. 2016 Change
	2016		2017		Amount		Percentage
Toyota’s consolidated vehicle unit sales*		3,818		4,000		182		4.8	%

* including number of exported vehicle unit sales

	Yen in millions
	Year ended March 31,				2017 v. 2016 Change
	2016		2017		Amount		Percentage
Net revenues:
Sales of products		14,638,709		14,705,518		66,809		0.5	%
Financial services		120,779		125,350		4,571		3.8
Total		14,759,488		14,830,868		71,380		0.5	%

Toyota’s domestic and exported vehicle unit sales increased by 182 thousand vehicles compared with the prior fiscal year and net revenues in Japan increased. For fiscal 2016 and 2017, exported vehicle unit sales were 1,759 thousand units and 1,726 thousand units, respectively.

North America

	Thousands of units
	Year ended March 31,				2017 v. 2016 Change
	2016		2017		Amount			Percentage
Toyota’s consolidated vehicle unit sales		2,839		2,837		(2	)		(0.1	)%
	Yen in millions
	Year ended March 31,				2017 v. 2016 Change
	2016		2017		Amount			Percentage
Net revenues:
Sales of products		9,741,529		8,951,333		(790,196	)		(8.1	)%
Financial services		1,310,441		1,287,758		(22,683	)		(1.7	)
Total		11,051,970		10,239,091		(812,879	)		(7.4	)%

Net revenues in North America decreased due primarily to the unfavorable impact of fluctuations in foreign currency translation rates despite vehicle unit sales being nearly equal to those of the prior fiscal year.

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Europe

	Thousands of units
	Year ended March 31,				2017 v. 2016 Change
	2016		2017		Amount			Percentage
Toyota’s consolidated vehicle unit sales		844		925		81			9.5	%
	Yen in millions
	Year ended March 31,				2017 v. 2016 Change
	2016		2017		Amount			Percentage
Net revenues:
Sales of products		2,562,788		2,588,968		26,180			1.0	%
Financial services		98,543		92,071		(6,472	)		(6.6	)
Total		2,661,331		2,681,039		19,708			0.7	%

Despite the unfavorable impact of fluctuations in foreign currency translation rates, net revenues in Europe increased due primarily to the 81 thousand vehicle increase in vehicle unit sales compared with the prior fiscal year. The vehicle unit sales increased due mainly to strong sales of new models such as C-HR and RAV4.

Asia

	Thousands of units
	Year ended March 31,				2017 v. 2016 Change
	2016		2017		Amount			Percentage
Toyota’s consolidated vehicle unit sales		1,345		1,588		243			18.1	%
	Yen in millions
	Year ended March 31,				2017 v. 2016 Change
	2016		2017		Amount			Percentage
Net revenues:
Sales of products		4,850,563		4,689,774		(160,789	)		(3.3	)%
Financial services		153,296		130,047		(23,249	)		(15.2	)
Total		5,003,859		4,819,821		(184,038	)		(3.7	)%

Net revenues in Asia decreased due primarily to the unfavorable impact of fluctuations in foreign currency translation rates despite vehicle unit sales increasing by 243 thousand compared with the prior fiscal year. The increase in vehicle unit sales was due mainly to increased sales of new models such as Calya, Sienta and IMV in Indonesia and the Philippines.

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Other

	Thousands of units
	Year ended March 31,				2017 v. 2016 Change
	2016		2017		Amount			Percentage
Toyota’s consolidated vehicle unit sales		1,594		1,347		(247	)		(15.5	)%
	Yen in millions
	Year ended March 31,				2017 v. 2016 Change
	2016		2017		Amount			Percentage
Net revenues:
Sales of products		2,023,206		1,996,087		(27,119	)		(1.3	)%
Financial services		187,008		164,987		(22,021	)		(11.8	)
Total		2,210,214		2,161,074		(49,140	)		(2.2	)%

Net revenues in Other decreased due primarily to the 247 thousand vehicles decrease in vehicle unit sales compared with the prior fiscal year. The decrease in vehicle unit sales was due mainly to decreased sales in the Middle East and Africa.

Operating Costs and Expenses

	Yen in millions
	Year ended March 31,				2017 v. 2016 Change
	2016		2017		Amount			Percentage
Operating costs and expenses
Cost of products sold		21,456,086		21,543,035		86,949			0.4	%
Cost of financing operations		1,149,379		1,191,301		41,922			3.6
Selling, general and administrative		2,943,682		2,868,485		(75,197	)		(2.6	)
Total		25,549,147		25,602,821		53,674			0.2	%

	Yen in millions
	2017 v. 2016 Change
Changes in operating costs and expenses:
Effect of changes in vehicle unit sales and sales mix		1,060,000
Effect of fluctuation in foreign currency translation rates		(1,470,000	)
Effect of increase of cost of financing operations		174,000
Effect of cost reduction efforts		(440,000	)
Effect of increase of miscellaneous costs and others		729,674
Total		53,674

Operating costs and expenses increased by ¥53.6 billion, or 0.2%, to ¥25,602.8 billion during fiscal 2017 compared with the prior fiscal year. This increase resulted from the ¥1,060.0 billion impact of changes in vehicle unit sales and sales mix, the ¥174.0 billion increase in cost of financing operations (excluding the effect of fluctuation in foreign currency translation rates) and the ¥729.6 billion increase of miscellaneous costs and others, partially offset by the ¥1,470.0 billion favorable impact of fluctuations in foreign currency translation rates, and the ¥440.0 billion impact of cost reduction efforts.

The increase in miscellaneous costs and others was due mainly to the ¥310.0 billion increase in product quality related expenses, the ¥80.0 billion increase in labor costs, the ¥50.0 billion increase in depreciation expenses and the ¥105.0 billion increase in other various costs.

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The increase in product quality related expenses was due mainly to an increase in provisions for recalls and other safety measures resulting from an increase in actual payments during fiscal 2017. See note 13 to the consolidated financial statements for further discussion.

During fiscal 2017 and beyond, Toyota announced recalls and other safety measures including the following:

In June 2016, Toyota announced in Japan and other regions recalls on certain Toyota and Lexus vehicles in relation to the fuel suction plate assembled to the fuel tank. In June 2016, Toyota announced in Japan and other regions recalls on certain Toyota and Lexus vehicles in relation to the curtain shield air bags in the driver and passenger side roof rails. In May, June and October 2016 and in January and March 2017, Toyota announced in Japan and other regions recalls on certain Toyota and Lexus vehicles in relation to the driver/front passenger airbag inflators.

Cost Reduction Efforts

During fiscal 2017, continued cost reduction efforts together with suppliers contributed to a reduction of operating costs and expenses by ¥440.0 billion. This was due to ¥370.0 billion in cost reduction efforts concerning design related costs due mainly to ongoing value engineering activities, and ¥70.0 billion in cost reduction efforts at plants and logistics departments.

These cost reduction efforts related to ongoing value engineering and value analysis activities, the use of common parts resulting in a reduction of part types and other manufacturing initiatives designed to reduce the costs of vehicle production. The amount of the effect of cost reduction efforts includes the impact of fluctuation in the price of steel, precious metals, non-ferrous alloys including aluminum, plastic parts and other production materials and parts.

Cost of Products Sold

Cost of products sold increased by ¥86.9 billion, or 0.4%, to ¥21,543.0 billion during fiscal 2017 compared with the prior fiscal year. The increase resulted mainly from the impact of changes in vehicle unit sales and sales mix, as well as the increase in product quality related expenses, depreciation expenses and labor costs, partially offset by the favorable impact of fluctuations in foreign currency translation rates and the impact of cost reduction efforts.

Cost of Financing Operations

Cost of financing operations increased by ¥41.9 billion, or 3.6%, to ¥1,191.3 billion during fiscal 2017 compared with the prior fiscal year. The increase resulted mainly from the increase in expenses related to residual value losses.

Selling, General and Administrative Expenses

Selling, general and administrative expenses decreased by ¥75.1 billion, or 2.6%, to ¥2,868.4 billion during fiscal 2017 compared with the prior fiscal year. This decrease mainly reflected the favorable impact of fluctuations in foreign currency translation rates, partially offset by the impact of changes in vehicle unit sales and sales mix.

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Operating Income

	Yen in millions
	2017 v. 2016 Change
Changes in operating income and loss:
Effect of cost reduction efforts		440,000
Effect of marketing efforts		210,000
Effect of increase of miscellaneous costs and others		(530,000	)
Effect of changes in exchange rates		(940,000	)
Other		(39,599	)
Total		(859,599	)

Toyota’s operating income decreased by ¥859.5 billion, or 30.1%, to ¥1,994.3 billion during fiscal 2017 compared with the prior fiscal year. This decrease was due mainly to the ¥940.0 billion unfavorable impact of changes in foreign currency exchange rates and the ¥530.0 billion increase in miscellaneous costs and others, partially offset by the ¥440.0 billion impact of cost reduction efforts and the ¥210.0 billion impact of marketing efforts. The increase in miscellaneous costs and others was due to the ¥310.0 billion increase in product quality related expenses, ¥80.0 billion increase in labor costs, the ¥50.0 billion increase in depreciation expenses and the ¥105.0 billion increase in other various costs.

Marketing efforts and marketing activities include changes in vehicle unit sales and sales mix, sales expenses and other. “Other” includes valuation gains and losses from interest rate swaps etc.

From fiscal 2017, the effect of changes in exchange rates includes translational impacts concerning operating income of overseas subsidiaries and concerning provisions in foreign currencies at the end of the fiscal year. During fiscal 2017, the negative effect of changes in exchange rates includes ¥130.0 billion in translational impacts concerning operating income of overseas subsidiaries (North America ¥40.0 billion, Europe ¥15.0 billion, Asia ¥50.0 billion and Other ¥25.0 billion) and ¥30.0 billion in translational impacts concerning provisions in foreign currencies at the end of the fiscal year.

During fiscal 2017, operating income (before elimination of intersegment profits) compared with the prior fiscal year decreased by ¥475.2 billion, or 28.3%, in Japan, ¥217.6 billion, or 41.2%, in North America, ¥84.6 billion in Europe, ¥14.0 billion, or 3.1%, in Asia, and ¥50.2 billion, or 46.1%, in Other.

The following is a description of operating income in each geographic market.

Japan

	Yen in millions
	2017 v. 2016 Change
Changes in operating income and loss:
Effect of cost reduction efforts		320,000
Effect of marketing efforts		85,000
Effect of increase of miscellaneous costs and others		(185,000	)
Effect of changes in exchange rates		(690,000	)
Other		(5,277	)
Total		(475,277	)

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North America

	Yen in millions
	2017 v. 2016 Change
Changes in operating income and loss:
Effect of cost reduction efforts		110,000
Effect of marketing activities		(125,000	)
Effect of increase of miscellaneous costs and others		(115,000	)
Effect of changes in exchange rates		(45,000	)
Other		(42,625	)
Total		(217,625	)

Europe

	Yen in millions
	2017 v. 2016 Change
Changes in operating income and loss:
Effect of cost reduction efforts		25,000
Effect of marketing efforts		25,000
Effect of increase of miscellaneous costs and others		(100,000	)
Effect of changes in exchange rates		(40,000	)
Other		5,340
Total		(84,660	)

Asia

	Yen in millions
	2017 v. 2016 Change
Changes in operating income and loss:
Effect of cost reduction efforts		25,000
Effect of marketing efforts		75,000
Effect of increase of miscellaneous costs and others		(20,000	)
Effect of changes in exchange rates		(115,000	)
Other		20,990
Total		(14,010	)

Other

	Yen in millions
	2017 v. 2016 Change
Changes in operating income and loss:
Effect of cost reduction efforts		(40,000	)
Effect of marketing efforts		150,000
Effect of increase of miscellaneous costs and others		(95,000	)
Effect of changes in exchange rates		(50,000	)
Other		(15,215	)
Total		(50,215	)

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Other Income and Expenses

Interest and dividend income increased by ¥1.1 billion, or 0.7%, to ¥158.9 billion during fiscal 2017 compared with the prior fiscal year.

Interest expense decreased by ¥6.0 billion, or 17.1%, to ¥29.3 billion during fiscal 2017 compared with the prior fiscal year.

Foreign exchange gain (loss), net increased by ¥39.1 billion to ¥33.6 billion during fiscal 2017 compared with the prior fiscal year. Foreign exchange gains and losses include the differences between the value of foreign currency denominated assets and liabilities recognized through transactions in foreign currencies translated at prevailing exchange rates and the value at the date the transaction settled during the fiscal year, including those settled using forward foreign currency exchange contracts, or the value translated by appropriate year-end exchange rates. The ¥39.1 billion increase in foreign exchange gain (loss), net was due mainly to the losses recorded in fiscal 2016 resulting from the Japanese yen being stronger against foreign currencies at the dates of settlement of the foreign currency trade accounts receivable than at the dates of the transactions.

Other income, net increased by ¥23.6 billion to ¥36.2 billion during fiscal 2017 compared with the prior fiscal year.

Income Taxes

The provision for income taxes decreased by ¥249.3 billion, or 28.4%, to ¥628.9 billion during fiscal 2017 compared with the prior fiscal year due mainly to the decrease in income before income taxes and equity in earnings of affiliated companies. The effective tax rate for fiscal 2017 was 28.7%, which was lower than the statutory tax rate in Japan. This was due mainly to the increase in tax credits and the effect of foreign subsidiaries where statutory tax rates are lower than that of Japan.

Net Income Attributable to Noncontrolling Interests and Equity in Earnings of Affiliated Companies

Net income attributable to noncontrolling interests decreased by ¥25.6 billion, or 21.1%, to ¥95.8 billion during fiscal 2017 compared with the prior fiscal year. This was due mainly to a decrease during fiscal 2017 in net income attributable to the shareholders of consolidated subsidiaries.

Equity in earnings of affiliated companies during fiscal 2017 increased by ¥32.9 billion, or 10.0%, to ¥362.0 billion compared with the prior fiscal year. This increase was due mainly to an increase during fiscal 2017 in net income attributable to the shareholders of affiliated companies accounted for by the equity method.

Net Income Attributable to Toyota Motor Corporation

Net income attributable to the shareholders of Toyota Motor Corporation decreased by ¥481.5 billion, or 20.8%, to ¥1,831.1 billion during fiscal 2017 compared with the prior fiscal year.

Net income attributable to common shareholders during fiscal 2017 is ¥1,821.3 billion, which is derived by deducting dividends and accretion to Model AA Class Shares of ¥9.7 billion from net income attributable to Toyota Motor Corporation.

Other Comprehensive Income and Loss

Other comprehensive income and loss increased by ¥896.9 billion to ¥30.1 billion for fiscal 2017 compared with the prior fiscal year. This increase resulted from unfavorable foreign currency translation adjustment losses of ¥52.4 billion in fiscal 2017 compared with losses of ¥362.9 billion in the prior fiscal year due mainly to

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appreciation of the yen against the U.S. dollar, from unrealized holding losses on securities in fiscal 2017 of ¥8.0 billion compared with losses of ¥302.6 billion in the prior fiscal year due mainly to an increase in prices of marketable securities in stock exchange markets in Japan, and from pension liability adjustment gains in fiscal 2017 of ¥92.8 billion compared with losses of ¥201.1 billion in the prior fiscal year due mainly to an increase in fair value of plan assets.

Segment Information

The following is a discussion of the results of operations for each of Toyota’s operating segments. The amounts presented are prior to intersegment elimination.

	Yen in millions
	Year ended March 31,						2017 v. 2016 Change
	2016			2017			Amount			Percentage
Automotive:
Net revenues		25,977,416			25,081,847			(895,569	)		(3.4	)%
Operating income		2,448,998			1,692,973			(756,025	)		(30.9	)
Financial Services:
Net revenues		1,896,224			1,823,600			(72,624	)		(3.8	)
Operating income		339,226			222,428			(116,798	)		(34.4	)
All Other:
Net revenues		1,177,387			1,321,052			143,665			12.2
Operating income		66,507			81,327			14,820			22.3
Intersegment elimination/unallocated amount:
Net revenues		(647,909	)		(629,306	)		18,603			—
Operating income		(760	)		(2,356	)		(1,596	)		—

Automotive Operations Segment

The automotive operations segment is Toyota’s largest operating segment by net revenues. Net revenues for the automotive segment decreased during fiscal 2017 by ¥895.5 billion, or 3.4%, to ¥25,081.8 billion compared with the prior fiscal year. The decrease mainly reflects the ¥2,180.0 billion unfavorable impact of fluctuations in foreign currency translation rates, partially offset by the ¥1,250.0 billion favorable impact of changes in vehicle unit sales and sales mix.

Operating income from the automotive operations decreased by ¥756.0 billion, or 30.9%, to ¥1,692.9 billion during fiscal 2017 compared with the prior fiscal year. This decrease in operating income was due mainly to the ¥940.0 billion unfavorable impact of changes in foreign currency exchange rates and the ¥530.0 billion increase in miscellaneous costs and others, partially offset by the ¥440.0 billion impact of cost reduction efforts and ¥210.0 billion impact of marketing efforts.

The increase in miscellaneous costs and others was due mainly to the ¥310.0 billion increase in product quality related expenses, ¥80.0 billion increase in labor costs, the ¥50.0 billion increase in depreciation expenses and the ¥105.0 billion increase in other various costs. The impact of marketing efforts was due primarily to the increase in Toyota’s vehicle unit sales by 290 thousand vehicles compared with the prior fiscal year. Vehicle unit sales increased due mainly to new models in Japan, Asia and Europe, despite the fall in demand resulting from the downturn in the economy and market in the Middle East caused by the low price of crude oil.

Financial Services Operations Segment

Net revenues for the financial services operations decreased during fiscal 2017 by ¥72.6 billion, or 3.8%, to ¥1,823.6 billion compared with the prior fiscal year. This decrease was primarily due to the ¥190.0 billion unfavorable impact of fluctuations in foreign currency translation rates.

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Operating income from financial services operations decreased by ¥116.7 billion, or 34.4%, to ¥222.4 billion during fiscal 2017 compared with the prior fiscal year. This decrease was due primarily to the increase in expenses related to credit losses and residual value losses, mainly in North America.

All Other Operations Segment

Net revenues for Toyota’s other operations segments increased by ¥143.6 billion, or 12.2%, to ¥1,321.0 billion during fiscal 2017 compared with the prior fiscal year.

Operating income from Toyota’s other operations segments increased by ¥14.8 billion, or 22.3%, to ¥81.3 billion during fiscal 2017 compared with the prior fiscal year.

Related Party Transactions

Toyota does not have any significant related party transactions other than transactions with affiliated companies in the ordinary course of business. See note 11 to the consolidated financial statements for further discussion.

Recent Accounting Pronouncements in the United States

For a detail of recent accounting pronouncements to be adopted in future periods, see note 2 to the consolidated financial statements.

Critical Accounting Estimates

The consolidated financial statements of Toyota are prepared in conformity with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Toyota believes that of its significant accounting policies, the following may involve a higher degree of judgments, estimates and assumptions:

Product Warranties and Recalls and Other Safety Measures

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 the sale and other factors. All product warranties are consistent with commercial practices. Toyota includes a provision for estimated product warranty costs as a component of cost of sales at the time the related sale is recognized. The accrued warranty costs represent management’s best estimate at the time of sale of the total costs 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 of product failures as well as current information on repair costs. The amount of warranty costs accrued also contains an estimate of warranty claim recoveries to be received from suppliers. The foregoing evaluations are inherently uncertain, as they require material estimates and some products’ warranties extend for several years. Consequently, actual warranty costs may differ from the estimated amounts and could require additional warranty provisions. If these factors require a significant increase in Toyota’s accrued estimated warranty costs, it would negatively affect future operating results of the automotive operations.

An estimate of warranty claim accrued for each fiscal year is calculated based on the estimate of warranty claim per unit. The estimate of warranty claim per unit is calculated by dividing the actual amounts of warranty claim, net of claim recovery cost received from suppliers, by the number of sales units for the fiscal year.

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As the historical recovery amounts received from suppliers is used as a factor in Toyota’s calculation of estimated accrued warranty cost, the estimated accrued warranty cost may change depending on the average recovery amounts received from suppliers in the past. However, Toyota believes that there is not a significant uncertainty of estimated amounts based on historical experience regarding recoveries received from suppliers. Toyota may seek recovery to suppliers over the life of the warranty, and there are no other significant special terms and conditions including cap on amounts that can be recovered.

Toyota accrues for costs of recalls and other safety measures, as well as product warranty cost described above, as a component of cost of sales. Toyota generally measures such “liabilities for recalls and other safety measures” at the time of vehicle sales comprehensively by aggregate sales of various models in a certain period by geographical regions. However, when circumstances warrant, Toyota measures “liabilities for a particular recall or other safety measure” using an individual model when they are probable and reasonably estimable. While there is no difference in the calculation method among geographical regions, Toyota believes it is reasonable to calculate the liabilities by geographical regions because of factors such as varying labor costs among geographical regions.

The portion of “liabilities for the costs of recalls and other safety measures” recorded in the balance sheet comprehensively is calculated by deducting the “accumulated amount of repair cost paid” from the “expected liability for the cost of recalls and other safety measures”. As such, this liability is evaluated every period based on new data and are adjusted as appropriate. Toyota calculates these liabilities for units sold in the current period and each of the past 10 fiscal years, and aggregates such liabilities in determining the final liability amount.

The “expected liability for the cost of recalls and other safety measures” are calculated by multiplying the “sales unit” by the “expected average repair cost per unit”. The “expected average repair cost per unit” is calculated based on dividing the “accumulated amount of repair cost paid per unit” by the “pattern of payment occurrences”. The “pattern of payment occurrence” represents a ratio that shows the measure of payment occurrence over 10 years based on actual payments with regard to units sold within 10 years.

Factors that may cause a difference between the amount accrued comprehensively at the time of vehicle sale and actual payment on individual recalls and other safety measures mainly include actual cost of recalls and safety measures during the period being significantly different from the accumulated amount of repair cost paid per unit (generally comprised of parts and labor) and the actual pattern of payment occurrence during the period being significantly different from the pattern of the payment occurrence in the past, which is considered as part of our estimation process for future recalls and other safety measures.

As described above, in estimating the comprehensive provision, the actual cost of individual recalls and other safety measures is included as a component of the calculation such as the accumulated amount of repair cost paid per unit. Thus, an individual recall announcement generally does not directly impact the financial statements when it occurs.

Allowance for Doubtful Accounts and Credit Losses

Natures of estimates and assumptions

Retail receivables and finance lease receivables consist of retail installment sales contracts secured by passenger cars and commercial vehicles. Collectability risks include consumer and dealer insolvencies and insufficient collateral values (less costs to sell) to realize the full carrying values of these receivables. As a matter of policy, Toyota maintains an allowance for doubtful accounts and credit losses representing management’s estimate of the amount of asset impairment in the portfolios of finance, trade and other receivables. Toyota determines the allowance for doubtful accounts and credit losses based on a systematic, ongoing review and evaluation performed as part of the credit-risk evaluation process, historical loss experience, the size and composition of the portfolios, current economic events and conditions, the estimated fair value and adequacy of

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collateral, and other pertinent factors. This evaluation is inherently judgmental and requires material estimates, including the amounts and timing of future cash flows expected to be received, which may be susceptible to significant change. Although management considers the allowance for doubtful accounts and credit losses to be adequate based on information currently available, additional provisions may be necessary due to (i) changes in management estimates and assumptions about asset impairments, (ii) information that indicates changes in expected future cash flows, or (iii) changes in economic and other events and conditions. To the extent that sales incentives remain an integral part of sales promotion with the effect of reducing new vehicle prices, resale prices of used vehicles and, correspondingly, the collateral value of Toyota’s retail receivables and finance lease receivables could experience further downward pressure. If these factors require a significant increase in Toyota’s allowance for doubtful accounts and credit losses, it could negatively affect future operating results of the financial services operations. The level of credit losses, which has a greater impact on Toyota’s results of operations, is influenced by two factors: frequency of occurrence and expected severity of loss. For evaluation purposes, exposures to credit losses are segmented into the two primary categories of “consumer” and “dealer”. Toyota’s “consumer” category consists of smaller balances that are homogenous retail receivables and finance lease receivables. The “dealer” category consists of wholesale and other dealer loan receivables. The overall allowance for credit losses is evaluated at least quarterly, considering a variety of assumptions and factors to determine whether reserves are considered adequate to cover probable losses.

Sensitivity analysis

The level of credit losses, which could significantly impact Toyota’s results of operations, is influenced by two factors: frequency of occurrence and expected severity of loss. The overall allowance for credit losses is evaluated at least quarterly, considering a variety of assumptions and factors to determine whether reserves are considered adequate to cover probable losses. The following table illustrates the effect of an assumed change in frequency of occurrence or expected severity of loss mainly in the United States, assuming all other assumptions are held consistent. The table below represents the impact on the allowance for credit losses in Toyota’s financial services operations of the change in frequency of occurrence or expected severity of loss as any change impacts most significantly on the financial services operations.

	Yen in millions
	Effect on the allowance for credit losses as of March 31, 2018
10 percent change in frequency of occurrence or expected severity of loss		4,781

Investment in Operating Leases

Natures of estimates and assumptions

Vehicles on operating leases, where Toyota is the lessor, are valued at cost and depreciated over their estimated useful lives using the straight-line method to their estimated residual values. Toyota utilizes industry published information and its own historical experience to determine estimated residual values for these vehicles. Toyota evaluates the recoverability of the carrying values of its leased vehicles for impairment when there are indications of declines in residual values, and if impaired, Toyota recognizes an allowance for losses on its residual values.

Throughout the life of the lease, management performs periodic evaluations of estimated end-of-term fair values to determine whether estimates used in the determination of the contractual residual value are still considered reasonable. Factors affecting the estimated residual value at lease maturity include, but are not limited to, new vehicle incentive programs, new vehicle pricing, used vehicle supply, projected vehicle return rates, and projected loss severity. The vehicle return rate represents the number of leased vehicles actually returned at contract maturity as a percentage of the number of lease contracts originally scheduled to mature in the same period less lease contracts subject to early terminations. A higher rate of vehicle returns exposes Toyota to higher

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potential losses incurred at lease termination. Severity of loss is the extent to which the end-of-term fair value of a lease is less than its carrying value at lease end.

To the extent that sales incentives remain an integral part of sales promotion, resale prices of used vehicles and, correspondingly, the fair value of Toyota’s leased vehicles could be subject to downward pressure. The extent of the impact this will have on the end of term residual value depends on the significance of the incentive programs and whether they are sustained over a number of periods. This in turn can impact the projection of future used vehicle values, adversely impacting the expected residual value of the current operating lease portfolio and increasing the provision for residual value losses. However, various other factors impact used vehicle values and the projection of future residual values, including the supply of and demand for used vehicles, interest rates, inflation, the actual or perceived quality, safety and reliability of vehicles, the general economic outlook, new vehicle pricing, projected vehicle return rates and projected loss severity, which may offset this effect. Such factors may adversely affect the results of operations for financial services due to significant charges reducing the estimated residual value.

Sensitivity analysis

The following table illustrates the effect of an assumed change in the vehicle return rate and end-of-term market values mainly in the United States, which Toyota believes are the critical estimates, in determining the residual value losses, holding all other assumptions constant. The following table represents the impact on the residual value losses in Toyota’s financial services operations of the change in vehicle return rate and end-of-term market values for returned units as those changes have a significant impact on financial services operations.

	Yen in millions
	Effect on the residual value losses over the remaining terms of the operating leases on and after April 1, 2018
1 percent increase in vehicle return rate		4,462
1 percent increase in end-of-term market values		15,299

Impairment of Long-Lived Assets

Toyota periodically reviews the carrying value of its long-lived assets held and used and assets to be disposed of, including intangible assets, when events and circumstances warrant such a review. This review is performed using estimates of future cash flows. If the carrying value of a long-lived asset is considered impaired, an impairment charge is recorded for the amount by which the carrying value of the long-lived asset exceeds its fair value. Management believes that the estimates of future cash flows and fair values are reasonable. However, changes in estimates of such cash flows and fair values would affect the evaluations and negatively affect future operating results of the automotive operations.

Pension Costs and Obligations

Natures of estimates and assumptions

Pension costs and obligations are dependent on assumptions used in calculating such amounts. These assumptions include discount rates, benefits earned, interest costs, expected rate of return on plan assets, mortality rates and other factors. Actual results that differ from the assumptions are accumulated and amortized over future periods and, therefore, generally affect recognized expense in future periods. While management believes that the assumptions used are appropriate, differences in actual experience or changes in assumptions may affect Toyota’s pension costs and obligations.

The two most critical assumptions impacting the calculation of pension costs and obligations are the discount rates and the expected rates of returns on plan assets. Toyota determines the discount rates mainly based

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on the rates of high quality fixed income bonds or fixed income governmental bonds currently available and expected to be available during the period to maturity of the defined benefit pension plans. Toyota determines the expected rates of return for pension assets after considering several applicable factors including, the composition of plan assets held, assumed risks of asset management, historical results of the returns on plan assets, Toyota’s principal policy for plan asset management, and forecasted market conditions. A weighted-average discount rate of 0.7% domestically and 4.0% overseas and a weighted-average expected rate of return on plan assets of 2.4% domestically and 6.0% overseas were used in calculating Toyota’s consolidated pension costs for fiscal 2018. Also, a weighted-average discount rate of 0.7% domestically and 3.9% overseas were used in calculating Toyota’s consolidated pension obligations for fiscal 2018.

Sensitivity analysis

The following table illustrates the effects of assumed changes in weighted-average discount rates and the weighted-average expected rate of return on plan assets, which Toyota believes are critical estimates in determining pension costs and obligations, assuming all other assumptions are consistent.

	Yen in millions
	Domestic						Overseas
	Effect on pre-tax income for the year ended March 31, 2019			Effect on obligations for the year ended March 31, 2018			Effect on pre-tax income for the year ended March 31, 2019			Effect on obligations for the year ended March 31, 2018
Discount rates
0.5% decrease		(10,458	)		167,996			(7,172	)		129,227
0.5% increase		9,249			(147,854	)		6,368			(109,454	)
Expected rate of return on plan assets
0.5% decrease		(8,064	)					(4,077	)
0.5% increase		8,064						4,077

Derivatives and Other Contracts at Fair Value

Toyota uses derivatives in the normal course of business to manage its exposure to foreign currency exchange rates and interest rates. The accounting for derivatives is complex and continues to evolve. Toyota estimates the fair value of derivative financial instruments using industry-standard valuation models that require observable inputs including interest rates and foreign exchange rates, and the contractual terms. In other certain cases when market data is not available, key inputs to the fair value measurement include quotes from counterparties, and other market data. These estimates are based upon valuation methodologies deemed appropriate under the circumstances. However, the use of different assumptions may have a material effect on the estimated fair value amounts.

Marketable Securities and Investments in Affiliated Companies

Toyota’s accounting policy is to record a write-down of such investments to fair value when a decline in fair value below the carrying value is other-than-temporary. 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 fair value.

Deferred Tax Assets

The factors used to assess the likelihood of realization of the deferred tax assets are the future reversal of existing taxable temporary differences, the future taxable income and available tax planning strategies that are prudent and feasible. All available evidence, both positive and negative, is considered to determine whether,

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based on the weight of that evidence, a valuation allowance is needed for deferred tax assets which are not more-likely-than-not to be realized.

The accounting for deferred tax assets represents Toyota’s current best estimate based on all available evidence. Unanticipated events or changes could result in re-evaluating the realizability of deferred tax assets.

Outlook

As for the future automotive market, developed countries are expected to remain steady while emerging countries are expected to expand gradually on the back of economic recovery and other factors. Meanwhile, the automotive industry is facing the time of profound transformation that could happen only once in a hundred years in response to increasing serious environmental issues and other social challenges, technological innovation such as automated driving, connected vehicles and robotics which adopts the rapidly evolving technology of artificial intelligence, and diversification of lifestyles. Taking the foregoing external factors into account, Toyota expects that net revenues for fiscal 2019 will decrease compared with fiscal 2018 due mainly to an unfavorable impact of fluctuations in foreign currency translation rates. Toyota expects that operating income will decrease in fiscal 2019 compared with fiscal 2018 due mainly to the effect of marketing activities, partially offset by a favorable impact of cost reduction efforts and a decrease in miscellaneous costs. Toyota expects that income before income taxes and equity in earnings of affiliated companies and net income attributable to Toyota Motor Corporation will also decrease in fiscal 2019.

For the purposes of this outlook discussion, Toyota is assuming an average exchange rate of ¥105 to the U.S. dollar and ¥130 to the euro. Exchange rate fluctuations can materially affect Toyota’s operating results. In particular, a strengthening of the Japanese yen against the U.S. dollar can have a material adverse effect on Toyota’s operating results. See “Operating and Financial Review and Prospects — Operating Results — Overview — Currency Fluctuations” for further discussion.

The foregoing statements are forward-looking statements based upon Toyota’s management’s assumptions and beliefs regarding exchange rates, market demand for Toyota’s products, economic conditions and others. See “Cautionary Statement Concerning Forward-Looking Statements”. Toyota’s actual results of operations could vary significantly from those described above as a result of unanticipated changes in the factors described above or other factors, including those described in “Risk Factors”.

5.B LIQUIDITY AND CAPITAL RESOURCES

Historically, Toyota has funded its capital expenditures and research and development activities through cash generated by operations.

In fiscal 2019, Toyota expects to sufficiently fund its capital expenditures and research and development activities through cash and cash equivalents on hand, and cash generated by operations. Toyota will use its funds for the development of environment technologies, maintenance and replacement of manufacturing facilities, and the introduction of new products. See “Information on the Company — Business Overview — Capital Expenditures and Divestitures” for information regarding Toyota’s material capital expenditures and divestitures for fiscal 2016, 2017 and 2018, and information concerning Toyota’s principal capital expenditures and divestitures currently in progress.

Toyota funds its financing programs for customers and dealers, including loans and leasing programs, from both cash generated by operations and borrowings by its sales finance subsidiaries. Toyota seeks to expand its ability to raise funds locally in markets throughout the world by expanding its network of finance subsidiaries.

Net cash provided by operating activities increased by ¥795.7 billion to ¥4,210.0 billion for fiscal 2018, compared with ¥3,414.2 billion for fiscal 2017.

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The increase was primarily attributable to the ¥405.4 billion increase in operating income. Results of operations are recorded on an accrual basis and are therefore different from cash provided or used in operating activities. Other than the operating income increase, net cash provided by operating activities increased primarily due to the ¥359.7 billion increase in income taxes payable, resulting mainly from increased income before income taxes and equity in earnings of affiliated companies.

Net cash provided by operating activities decreased by ¥1,046.6 billion to ¥3,414.2 billion for fiscal 2017, compared with ¥4,460.8 billion for fiscal 2016.

The decrease was primarily attributable to the ¥859.5 billion decrease in operating income. Results of operations are recorded on an accrual basis and are therefore different from cash provided or used in operating activities. Other than the operating income decrease, net cash provided by operating activities decreased primarily due to the ¥239.6 billion increase in accrued trade receivables, resulting mainly from increased revenue from sales of after-service parts and components.

Net cash used in investing activities increased by ¥690.1 billion to ¥3,660.0 billion for fiscal 2018, compared with ¥2,969.9 billion for fiscal 2017. The increase was primarily attributable to the ¥374.2 billion increase in investments and other assets and the ¥303.4 billion increase in finance receivables.

Net cash used in investing activities decreased by ¥212.6 billion to ¥2,969.9 billion for fiscal 2017, compared with ¥3,182.5 billion for fiscal 2016. The decrease was primarily attributable to the ¥1,634.6 billion decrease in investments and other assets and the ¥459.1 billion decrease in purchases of equipment leased to others, partially offset by a ¥1,833.8 billion increase in purchases of marketable securities and security investments.

Net cash used in financing activities increased by ¥73.9 billion to ¥449.1 billion for fiscal 2018, compared with ¥375.1 billion for fiscal 2017. The increase was primarily attributable to the ¥606.7 billion increase in payments of long-term debt, partially offset by the ¥256.1 billion decrease in repurchase and reissuance of treasury stock, and the ¥190.4 billion increase in financing of long-term debt.

Net cash used in financing activities decreased by ¥48.4 billion to ¥375.1 billion for fiscal 2017, compared with ¥423.5 billion for fiscal 2016. The decrease was primarily attributable to the ¥330.6 billion decrease in payments of long-term debt and a ¥283.9 billion increase in short-term borrowings, partially offset by the ¥474.9 billion in proceeds from the issuance of Model AA Class Shares, being recorded in the prior fiscal year.

Total capital expenditures for property, plant and equipment, excluding vehicles and equipment on operating leases, were ¥1,291.1 billion during fiscal 2018, an increase of 5.5% from the ¥1,223.8 billion in total capital expenditures during the prior fiscal year. This increase was due primarily to an increase in investments in Japan.

Total capital expenditures for vehicles and equipment on operating leases were ¥2,307.5 billion during fiscal 2018, a decrease of 0.4% from the ¥2,317.5 billion in total capital expenditures during the prior fiscal year. This decrease was due primarily to a decrease in investments in the financial services operations.

Toyota expects investments in property, plant and equipment, excluding vehicles and equipment on operating leases, to be approximately ¥1,370.0 billion during fiscal 2019.

Cash and cash equivalents were ¥3,052.2 billion as of March 31, 2018. Most of Toyota’s cash and cash equivalents are held in Japanese yen or in U.S. dollars. In addition, time deposits were ¥901.2 billion and marketable securities were ¥1,768.3 billion as of March 31, 2018.

Liquid assets, which Toyota defines as cash and cash equivalents, time deposits, marketable debt securities and its investment in monetary trust funds, increased during fiscal 2018 by ¥53.8 billion, or 0.5%, to ¥10,803.4 billion.

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Trade accounts and notes receivable, less allowance for doubtful accounts increased during fiscal 2018 by ¥103.6 billion, or 4.9%, to ¥2,219.5 billion. This increase was due mainly to increased revenue from sales in the fourth quarter of fiscal 2018.

Inventories increased during fiscal 2018 by ¥151.1 billion, or 6.3%, to ¥2,539.7 billion. This increase was due mainly to the increase in vehicle inventories at foreign subsidiaries.

Total finance receivables, net increased during fiscal 2018 by ¥621.0 billion, or 4.1%, to ¥15,829.9 billion. This increase was due mainly to the increase in the lending balance in the financial services operations. As of March 31, 2018, finance receivables were geographically distributed as follows: in North America 55.7%, in Asia 12.3%, in Europe 12.1%, in Japan 8.2% and in Other 11.7%.

Marketable securities and other securities investments, including those included in current assets, increased during fiscal 2018 by ¥266.1 billion, or 2.8%, reflecting the purchases of marketable securities and other securities investments.

Property, plant and equipment increased during fiscal 2018 by ¥70.5 billion, or 0.7%, primarily reflecting the increase in the capital expenditures.

Accounts and notes payable increased during fiscal 2018 by ¥20.2 billion, or 0.8%. This increase was due mainly to the impact of fluctuation in the price of materials and parts.

Accrued expenses decreased during fiscal 2018 by ¥33.5 billion, or 1.1%. This decrease was due mainly to the fluctuations in foreign currency translation rates.

Income taxes payable increased during fiscal 2018 by ¥238.7 billion, or 106.8%. This increase was due mainly to the increase in income before income taxes and equity in earnings of affiliated companies.

Toyota’s total borrowings increased during fiscal 2018 by ¥191.8 billion, or 1.0%. Toyota’s short-term borrowings consist of loans with a weighted-average interest rate of 2.14% and commercial paper with a weighted-average interest rate of 1.65%. Short-term borrowings increased during fiscal 2018 by ¥201.2 billion, or 4.1%, to ¥5,154.9 billion. Toyota’s long-term debt consists of unsecured and secured loans, medium-term notes, unsecured and secured notes etc. with weighted-average interest rates ranging from 0.94% to 7.90%, and maturity dates ranging from 2018 to 2046. The current portion of long-term debt decreased during fiscal 2018 by ¥104.1 billion, or 2.4%, to ¥4,186.2 billion and the non-current portion increased by ¥94.7 billion, or 1.0%, to ¥10,006.3 billion. The increase in total borrowings resulted mainly from the increasing demand for financing associated with the increase in the lending balance. As of March 31, 2018, approximately 48% of long-term debt was denominated in U.S. dollars, 11% in Japanese yen, 10% in Euros, 9% in Australian dollars, 6% in Canadian dollars, and 16% in other currencies. Toyota hedges interest rate risk exposure of fixed-rate borrowings by entering into interest rate swaps. There are no material seasonal variations in Toyota’s borrowings requirements.

As of March 31, 2018, Toyota’s total interest bearing debt was 103.3% of Toyota Motor Corporation shareholders’ equity, compared with 109.4% as of March 31, 2017.

The following table provides information for credit rating of Toyota’s short-term borrowing and long-term debt from rating agencies, Standard & Poor’s Ratings Group (S&P), Moody’s Investors Services (Moody’s), and Rating and Investment Information, Inc. (R&I), as of May 31, 2018. A credit rating is not a recommendation to buy, sell or hold securities. A credit rating may be subject to withdrawal or revision at any time. Each rating should be evaluated separately of any other rating.

	S&P	Moody’s	R&I
Short-term borrowing	A-1+	P-1	—
Long-term debt	AA-	Aa3	AA+

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Toyota’s unfunded pension liabilities of Japanese plans decreased during fiscal 2018 by ¥40.1 billion, or 9.0%, to ¥406.4 billion. The liabilities of foreign plans increased during fiscal 2018 by ¥14.7 billion, or 5.5%, to ¥282.4 billion. The unfunded amounts will be funded through future cash contributions by Toyota or in some cases will be settled on the retirement date of each covered employee. The decrease in unfunded pension liabilities of the Japanese plans reflects mainly an increase in plan assets that resulted from an increase in stock prices. See note 20 to the consolidated financial statements for further discussion.

Toyota’s treasury policy is to maintain controls on all exposures, to adhere to stringent counterparty credit standards, and to actively monitor marketplace exposures. Toyota remains centralized, and is pursuing global efficiency of its financial services operations through Toyota Financial Services Corporation.

The key element of Toyota’s financial strategy is maintaining a strong financial position that will allow Toyota to fund its research and development initiatives, capital expenditures and financial services operations efficiently even if earnings are subject to short-term fluctuations. Toyota believes that it maintains sufficient liquidity for its present requirements and that by maintaining its high credit ratings, it will continue to be able to access funds from external sources in large amounts and at relatively low costs. Toyota’s ability to maintain its high credit ratings is subject to a number of factors, some of which are not within Toyota’s control. These factors include general economic conditions in Japan and the other major markets in which Toyota does business, as well as Toyota’s successful implementation of its business strategy.

5.C RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES

Toyota’s research and development is dedicated to capturing the increasingly diverse and sophisticated market through the development of attractive, affordable, high-quality products for customers worldwide. The intellectual property that R&D generates is a vital management resource that Toyota utilizes and protects to maximize its corporate value. For a more detailed discussion of the company’s research and development objectives and policies, see “Information on the Company — Business Overview — Research and Development.”

Toyota’s research and development expenditures were approximately ¥1,064.2 billion in fiscal 2018, ¥1,037.5 billion in fiscal 2017, and ¥1,055.6 billion in fiscal 2016.

Toyota operates a global research and development organization with the primary goal of building automobiles that meet the needs of customers in every region of the world. In Japan, research and development operations are led by Toyota and Toyota Central Research & Development Laboratories, Inc., which works closely with Daihatsu Motor Co., Ltd., Hino Motors, Ltd., Toyota Auto Body Co., Ltd., Toyota Motor East Japan, Inc., and many other Toyota group companies. Overseas, Toyota has a worldwide network of technical centers as well as design and motorsports research and development centers.

Toyota established Toyota Research Institute, Inc. (“TRI”) in January 2016 to accelerate research and development of artificial intelligence technology, which has significant potential to support future industrial technologies. In July 2017, Toyota Research Institute, Inc. invested $100 million to launch a venture capital fund designed to provide financing to startup companies, and is making investments in newly established promising startup companies in the four areas of artificial intelligence, robotics, autonomous mobility, and data and cloud technology.

In Japan, Toyota established a new company, Toyota Research Institute-Advanced Development (“TRI-AD”), in March 2018 to further accelerate its efforts in advanced development for automated driving technology. Its key objectives include creating a smooth software pipeline from research to commercialization, leveraging data-handling capabilities, strengthening collaboration in development within the Toyota group, including TRI, to accelerate development, and recruiting and employing top-level engineers globally, while cultivating and coordinating strong talent within the Toyota group.

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The following table provides information on Toyota’s principal research and development facilities.

Facility	Principal Activity
Japan
Toyota Technical Center	Product planning, style, design and evaluation
Higashi-Fuji Technical Center	Advanced research and development
Tokyo Design Research & Laboratory	Research of advanced styling designs
Toyota Research Institute-Advanced Development (TRI-AD)	Development of artificial intelligence technology with a focus on automated driving technology
Shibetsu Proving Ground	Vehicle testing and evaluation
Toyota Central R&D Labs., Inc.	Basic research
United States
Toyota Motor Engineering and Manufacturing North America, Inc.	North American production and product planning, upper body planning, evaluation
Calty Design Research, Inc.	Design
Toyota Research Institute of North America (TRI-NA)	Advanced research relating to “energy and environment,” “safety” and “mobility infrastructure”
Toyota Research Institute, Inc.	Research and development of artificial intelligence technology
Europe
Toyota Motor Europe NV/SA	Upper body planning for European production, evaluation and advanced research
Toyota Europe Design Development S.A.R.L.	Design
Toyota Motorsport GmbH	Development of motor sports vehicles
Asia Pacific
Toyota Daihatsu Engineering and Manufacturing Co., Ltd.	Upper body planning for Australian and Asian production and evaluation
China
Toyota Motor Engineering and Manufacturing (China) Co., Ltd.	Research of new, low-energy vehicle technology, vehicle evaluation and quality assurance in China
FAW Toyota Research & Development Co., Ltd	Design and evaluation of vehicles manufactured in China
GAC Toyota Motor Co., Ltd. R&D Center	Design and evaluation of vehicles manufactured in China

Toyota reorganized its subsidiary and vehicle development partner Toyota Technical Development Corporation, integrating its vehicle development functions into Toyota in January 2016.

Toyota carefully analyzes patents and the need for patents in each area of research to formulate more effective research and development strategies. Toyota identifies research and development projects in which it should build a strong global patent portfolio.

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In addition, Toyota wishes to contribute to sustainable mobility by promoting the spread of technologies with environmental and safety benefits. This is why Toyota takes an open stance to patent licensing and grants licenses when appropriate terms are met. For example, in March 2010, Toyota and Mazda entered into a licensing agreement regarding the supply of hybrid system technology.

For a further discussion of Toyota’s intellectual property, see “Information on the Company — Business Overview — Intellectual Property.”

5.D TREND INFORMATION

For a discussion of the trends that affect Toyota’s business and operating results, see “— Operating Results” and “— Liquidity and Capital Resources.”

5.E OFF-BALANCE SHEET ARRANGEMENTS

Toyota uses its securitization program as part of its funding through special purpose entities for its financial services operations. Toyota is considered as the primary beneficiary of these special purpose entities and therefore consolidates them. Toyota has not entered into any off-balance sheet securitization transactions during fiscal 2018.

Lending Commitments

Credit Facilities with Credit Card Holders

Toyota’s financial services operations issue credit cards to customers. As customary for credit card businesses, Toyota maintains credit facilities with holders of credit cards issued by Toyota. These facilities are used upon each holder’s requests up to the limits established on an individual holder’s basis. Although loans made to customers through these facilities are not secured, for the purposes of minimizing credit risks and of appropriately establishing credit limits for each individual credit card holder, Toyota employs its own risk management policy which includes an analysis of information provided by financial institutions in alliance with Toyota. Toyota periodically reviews and revises, as appropriate, these credit limits. Outstanding credit facilities with credit card holders were ¥202.7 billion as of March 31, 2018.

Credit Facilities with Dealers

Toyota’s financial services operations maintain credit facilities with dealers. These credit facilities may be used for business acquisitions, facilities refurbishment, real estate purchases, and working capital requirements. These loans are typically collateralized with liens on real estate, vehicle inventory, and/or other dealership assets, as appropriate. Toyota obtains a personal guarantee from the dealer or corporate guarantee from the dealership when deemed prudent. Although the loans are typically collateralized or guaranteed, the value of the underlying collateral or guarantees may not be sufficient to cover Toyota’s exposure under such agreements. Toyota evaluates the credit facilities according to the risks assumed in entering into the credit facility. Toyota’s financial services operations also provide financing to various multi-franchise dealer organizations, referred to as dealer groups, often as part of a lending consortium, for wholesale inventory financing, business acquisitions, facilities refurbishment, real estate purchases, and working capital requirements. Toyota’s outstanding credit facilities with dealers totaled ¥2,486.5 billion as of March 31, 2018.

Guarantees

Toyota enters into certain guarantee contracts with its dealers to guarantee customers’ payments of their installment payables that arise from installment contracts between customers and Toyota dealers, as and when requested by Toyota dealers. Guarantee periods are set to match the maturity of installment payments, and as of

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March 31, 2018, ranged from one month to 35 years. 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 March 31, 2018 is ¥2,830.7 billion. Liabilities for these guarantees of ¥6.9 billion have been provided as of March 31, 2018. Under these guarantee contracts, Toyota is entitled to recover any amounts paid by it from the customers whose obligations it guaranteed.

5.F TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS

Contractual Obligations and Commitments

For information regarding debt obligations, capital lease obligations, operating lease obligations and other obligations, including amounts maturing in each of the next five years, see notes 12, 23 and 24 to the consolidated financial statements. In addition, as part of Toyota’s normal business practices, Toyota enters into long-term arrangements with suppliers for purchases of certain raw materials, components and services. These arrangements may contain fixed/minimum quantity purchase requirements. Toyota enters into such arrangements to facilitate an adequate supply of these materials and services.

The following tables summarize Toyota’s contractual obligations and commercial commitments as of March 31, 2018.

	Yen in millions
	Total		Payments Due by Period
			Less than 1 year		1 to 3 years		3 to 5 years		5 years and after
Contractual Obligations:
Short-term borrowings (note 12)
Loans		1,254,444		1,254,444		—		—		—
Commercial paper		3,900,469		3,900,469		—		—		—
Long-term debt* (note 12)		14,172,025		4,180,481		5,242,051		3,846,409		903,084
Estimated amount of interest expense on long-term debt		901,074		293,609		340,749		124,221		142,495
Capital lease obligations (note 23)		20,626		5,796		4,807		2,671		7,352
Non-cancelable operating lease obligations (note 23)		76,849		14,296		20,797		15,650		26,106
Commitments for the purchase of property, plant, other assets and services (note 24)		368,483		166,716		74,527		84,946		42,294
Total		20,693,970		9,815,811		5,682,931		4,073,897		1,121,331

* “Long-term debt” represents future principal payments.

Toyota is unable to make reasonable estimates of the period of cash settlement with respect to liabilities recognized for uncertain tax benefits, and accordingly such liabilities are excluded from the table above. See note 15 to the consolidated financial statements for further discussion.

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Toyota expects to contribute ¥42,220 million domestically and ¥23,234 million overseas to its pension plans in fiscal 2019.

	Yen in millions
	Total Amounts Committed		Amount of Commitment Expiration Per Period
			Less than 1 year		1 to 3 years		3 to 5 years		5 years and after
Commercial Commitments (note 24):
Maximum potential exposure to guarantees given in the ordinary course of business		2,830,749		727,656		1,136,800		704,739		261,554
Total Commercial Commitments		2,830,749		727,656		1,136,800		704,739		261,554

5.G SAFE HARBOR

All information that is not historical in nature disclosed under “— Off-Balance Sheet Arrangements” and “— Tabular Disclosure of Contractual Obligations” is deemed to be a forward-looking statement. See “Cautionary Statement Concerning Forward-Looking Statements” for additional information.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

6.A DIRECTORS AND SENIOR MANAGEMENT

In March 2011, Toyota announced its “Toyota Global Vision.” With respect to its framework for executing its operations, Toyota, with the aim of realizing the Toyota Global Vision, has been continuing its efforts to respond swiftly to the external environment, which is changing faster than ever. Following the introduction of “region-based operations”, the “business unit system” and the “in-house company system” in 2011, 2013 and 2016, respectively, for the purpose of further accelerating decision-making and operational execution, Toyota further clarified that members of the board of directors are responsible for decision-making and management oversight and that operating officers are responsible for operational execution. Furthermore, in 2018, Toyota changed the commencement of operating officers’ terms of office from April to January, reduced corporate strategy functions and restructured the Japan Sales Business Group based on regions rather than sales channels in an effort to enable decision-making closer to customers and the field, in order to further accelerate execution in full coordination with each site.

Toyota believes it is fundamental for it to be led by members of the board of directors and senior management who deeply understand, and can effectively implement, Toyota’s focus — the “making ever-better cars” spirit and the genchi genbutsu principle of placing emphasis on on-site operations with a go-and-see attitude for continued improvement and problem solving —, and contribute to decision-making towards sustainable growth for the future. Toyota maintains its board of directors and senior management at an adequate size, and ensures they are overall balanced and diverse, including from the perspective of gender and nationality. Three outside members of the board of directors have been appointed in order to further reflect the opinions of those from outside the company in management’s decision-making process. Toyota has six audit & supervisory board members, three of whom are outside audit & supervisory board members. In order to be prepared in the event Toyota lacks the number of audit & supervisory board members required by law, one substitute audit & supervisory board member has been appointed pursuant to Article 329, Paragraph 3 of the Companies Act.

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Set forth below are brief summaries of Toyota’s members of the board of directors and audit & supervisory board members.

Name (Date of birth)	Position	Brief career summary and important concurrent duties	Number and kind of shares
Takeshi Uchiyamada (August 17, 1946)	Chairman of the Board of Directors	1969 Joined Toyota Motor Corporation (“TMC”) 1998 Member of the Board of Directors of TMC 2001 Managing Director of TMC 2003 Senior Managing Director of TMC 2005 Executive Vice President of TMC 2012 Vice Chairman of TMC 2013 Chairman of TMC (to present) (important concurrent duties) President and Representative Director of Toyota Kuragaike Kaihatsu Kabushiki Kaisha Audit & Supervisory Board Member of Tokai Rika Co., Ltd. Audit & Supervisory Board Member of Toyoda Gosei Co., Ltd.		58,939 common shares
Shigeru Hayakawa (September 15, 1953)	Vice Chairman of the Board of Directors	1977 Joined Toyota Motor Sales Co., Ltd. 2007 Managing Officer of TMC 2007 Toyota Motor North America, Inc. President 2009 Retired from Toyota Motor North America, Inc. President 2012 Senior Managing Officer of TMC 2015 Member of the Board of Directors and Senior Managing Officer of TMC 2017 Vice Chairman of TMC (to present) (important concurrent duties) Representative Director of Institute for International Economic Studies		33,000 common shares
Akio Toyoda (May 3, 1956)	President, Member of the Board of Directors	1984 Joined TMC 2000 Member of the Board of Directors of TMC 2002 Managing Director of TMC 2003 Senior Managing Director of TMC 2005 Executive Vice President of TMC 2009 President of TMC (to present) (important concurrent duties) Chairman and CEO of Toyota Motor North America, Inc. Chairman of TOWA REAL ESTATE Co., Ltd. Chairman and Executive Director of Toyota Alvark Tokyo Corporation Chairman of Nagoya Grampus Eight Inc. Chairman of the Japan Automobile Manufacturers Association, Inc.		4,751,575 common shares

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Name (Date of birth)	Position	Brief career summary and important concurrent duties	Number and kind of shares
Koji Kobayashi (October 23, 1948)	Executive Vice President, Member of the Board of Directors	1972 Joined TMC 2004 Executive Director of DENSO CORPORATION (“DENSO”) 2007 Senior Executive Director, Member of the Board of Directors of DENSO 2010 Executive Vice President of DENSO 2015 Vice Chairman of DENSO 2016 Advisor of TMC 2017 Senior Advisor of TMC 2018 Operating Officer (Executive Vice President) of TMC (to present) 2018 Member of the Board of Directors of DENSO 2018 Member of the Board of Directors of TMC (to present) 2018 Retired as Member of the Board of Directors of DENSO		20,736 common shares
Didier Leroy (December 26, 1957)	Executive Vice President, Member of the Board of Directors	1982 Joined Renault S.A. 1998 Retired from Renault S.A. 1998 Joined Toyota Motor Manufacturing France S.A.S. 1998 Toyota Motor Manufacturing France S.A.S. Vice President 2005 Toyota Motor Manufacturing France S.A.S. President 2007 Managing Officer of TMC 2007 Toyota Motor Europe NV/SA Executive Vice President 2009 Toyota Motor Manufacturing France S.A.S. Chairman 2010 Toyota Motor Europe NV/SA President 2010 Retired from Toyota Motor Manufacturing France S.A.S. Chairman 2011 Toyota Motor Europe NV/SA President and CEO 2012 Senior Managing Officer of TMC 2015 Toyota Motor Europe NV/SA Chairman (to present) 2015 Executive Vice President, Member of the Board of Directors of TMC 2017 Member of the Board of Directors of TMC (to present) (important concurrent duties) Chairman of Toyota Motor Europe NV/SA Vice Chairman of Toyota Motor North America, Inc. Director of Toyota Tsusho Corporation		50,000 common shares
Shigeki Terashi (February 16, 1955)	Executive Vice President,	1980 Joined TMC 2008 Managing Officer of TMC		43,500 common shares

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Name (Date of birth)	Position	Brief career summary and important concurrent duties	Number and kind of shares
	Member of the Board of Directors	2008 Executive Vice President of Toyota Motor Engineering & Manufacturing North America, Inc. 2011 President and COO of Toyota Motor Engineering & Manufacturing North America, Inc. 2012 President and CEO of Toyota Motor Engineering & Manufacturing North America, Inc. 2012 President and COO of Toyota Motor North America, Inc. 2013 Retired from Toyota Motor Engineering & Manufacturing North America, Inc. President and CEO 2013 Retired from Toyota Motor North America, Inc. President and COO 2013 Senior Managing Officer of TMC 2013 Member of the Board of Directors and Senior Managing Officer of TMC 2015 Executive Vice President, Member of the Board of Directors of TMC 2017 Member of the Board of Directors of TMC (to present) (important concurrent duties) Director of Hino Motors, Ltd. President, Representative Director of EV C.A. Spirit Corporation
Ikuro Sugawara (March 6, 1957)	Outside Member of the Board of Directors	1981 Joined Ministry of International Trade and Industry 2010 Director-General of the Industrial Science and Technology Policy and Environment Bureau, Ministry of Economy, Trade and Industry 2012 Director-General of the Manufacturing Industries Bureau, Ministry of Economy, Trade and Industry 2013 Director-General of the Economic and Industrial Policy Bureau, Ministry of Economy, Trade and Industry 2015 Vice-Minister of Ministry of Economy, Trade and Industry 2017 Retired from the Ministry of Economy, Trade and Industry 2017 Special Advisor to the Cabinet 2018 Retired from Special Advisor to the Cabinet 2018 Outside Member of the Board of Directors of TMC (to present)		—

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Name (Date of birth)	Position	Brief career summary and important concurrent duties	Number and kind of shares
Sir Philip Craven (July 4, 1950)	Outside Member of the Board of Directors	1998 President of the International Wheelchair Basketball Federation 2001 President of the International Paralympic Committee 2002 Retired as President of the International Wheelchair Basketball Federation 2017 Retired as President of the International Paralympic Committee 2018 Outside Member of the Board of Directors of TMC (to present)		—
Teiko Kudo (May 22, 1964)	Outside Member of the Board of Directors	2014 Executive Officer of Sumitomo Mitsui Banking Corporation 2017 Managing Executive Officer of Sumitomo Mitsui Banking Corporation (to present) 2018 Outside Member of the Board of Directors of TMC (to present) (important concurrent duties) Managing Executive Officer of Sumitomo Mitsui Banking Corporation		—
Masahide Yasuda (April 1, 1949)	Full-time Audit & Supervisory Board Member	1972 Joined TMC 2000 General Manager of Overseas Parts Division of TMC 2007 President of Toyota Motor Corporation Australia Ltd. 2014 Chairman of Toyota Motor Corporation Australia Ltd. 2017 Retired as Chairman of Toyota Motor Corporation Australia Ltd. 2018 Audit & Supervisory Board Member of TMC (to present)		9,300 common shares
Masahiro Kato (September 17, 1952)	Full-time Audit & Supervisory Board Member	1975 Joined TMC 2009 Toyota Motor (China) Investment Co., Ltd. President 2009 Managing Officer of TMC 2011 Retired from Toyota Motor (China) Investment Co., Ltd. President 2011 Audit & Supervisory Board Member of TMC (to present)		15,600 common shares, 1,000 First Series Model AA Class Shares
Yoshiyuki Kagawa (December 18, 1960)	Full-time Audit & Supervisory Board Member	1983 Joined TMC 2010 General Manager of Prototype Production Division of TMC 2015 Project General Manager of Secretary Division of TMC 2015 Audit & Supervisory Board Member of TMC (to present)		3,200 common shares, 200 First Series Model AA Class Shares

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Name (Date of birth)	Position	Brief career summary and important concurrent duties	Number and kind of shares
Yoko Wake (November 18, 1947)	Outside Audit & Supervisory Board Member	1970 Joined the Fuji Bank, Limited 1973 Retired from the same 1977 Assistant Lecturer of Faculty of Business and Commerce of Keio University 1982 Associate Professor of the same 1993 Professor of the same 2011 Outside Audit & Supervisory Board Member of TMC (to present) 2013 Professor Emeritus of Keio University (to present) (important concurrent duties) Professor Emeritus of Keio University		—
Hiroshi Ozu (July 21, 1949)	Outside Audit & Supervisory Board Member	2012 Prosecutor-General 2014 Retired from Prosecutor-General 2014 Registered as Attorney 2015 Outside Audit & Supervisory Board Member of TMC (to present) (important concurrent duties) Attorney Outside Corporate Auditor of Mitsui & Co., Ltd. Audit & Supervisory Board Member (External) of Shiseido Company, Limited		—
Nobuyuki Hirano (October 23, 1951)	Outside Audit & Supervisory Board Member	1974 Joined Mitsubishi Bank 2001 Executive Officer of The Bank of Tokyo-Mitsubishi, Ltd. 2005 Director of Mitsubishi UFJ Financial Group, Inc. 2006 Managing Director of The Bank of Tokyo-Mitsubishi UFJ, Ltd. 2008 Senior Managing Director of The Bank of Tokyo-Mitsubishi UFJ, Ltd. 2009 Deputy President of The Bank of Tokyo-Mitsubishi UFJ, Ltd. 2009 Managing Officer of Mitsubishi UFJ Financial Group, Inc. 2010 Deputy President of Mitsubishi UFJ Financial Group, Inc. 2012 President of The Bank of Tokyo-Mitsubishi UFJ, Ltd. 2012 Director of Mitsubishi UFJ Financial Group, Inc. 2013 President & CEO of Mitsubishi UFJ Financial Group, Inc. 2015 Director, President & Group CEO of Mitsubishi UFJ Financial Group, Inc. (to present)		—

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Name (Date of birth)	Position	Brief career summary and important concurrent duties	Number and kind of shares
		2016 Chairman of the Board of Directors of Bank of Tokyo-Mitsubishi UFJ, Ltd. (to present) 2018 Company name changed from The Bank of Tokyo-Mitsubishi UFJ, Ltd. to MUFG Bank, Ltd. 2018 Outside Audit & Supervisory Board Member of TMC (to present) (important concurrent duties) Director, President & Group CEO of Mitsubishi UFJ Financial Group, Inc. Chairman of the Board of Directors of MUFG Bank, Ltd. Director of Morgan Stanley

1. Mr. Akio Toyoda, who is President and Member of the Board of Directors, concurrently serves as Operating Officer (President).

2. Mr. Koji Kobayashi, Mr. Didier Leroy and Mr. Shigeki Terashi, who are Members of the Board of Directors, concurrently serve as Operating Officers (Executive Vice Presidents).

None of the persons listed above was selected as member of board of directors, audit & supervisory board member or member of senior management pursuant to an arrangement or understanding with Toyota’s major shareholders, customers, suppliers or others.

Set forth below is a brief summary of Toyota’s substitute audit & supervisory board member.

Name (Date of birth)	Position	Brief career summary and important concurrent duties	Number and kind of shares
Ryuji Sakai (August 7, 1957)	Substitute Audit & Supervisory Board Member	1985 Registered as attorney and joined Nagashima & Ohno 1990 Wilson Sonsini Goodrich & Rosati 1995 Partner of Nagashima & Ohno 2000 Partner of Nagashima Ohno & Tsunematsu (to present) (important concurrent duties) Attorney Outside Audit & Supervisory Board Member of Kobayashi Pharmaceutical Co., Ltd. Outside Audit & Supervisory Board Member of Tokyo Electron Limited		—

6.B COMPENSATION

The aggregate amount of remuneration, including bonuses but excluding stock options, accrued for all members of the board of directors and audit & supervisory board members as a group by Toyota for services in all capacities during fiscal 2018 was approximately ¥2,260 million. Members of the board of directors of Toyota Motor Corporation receive year-end bonuses based on Toyota Motor Corporation’s financial performance for the fiscal year.

Furthermore, remuneration for members of the board of directors was set at four billion yen or less per year (including 300 million yen or less for outside members of the board of directors), pursuant to a resolution at the

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113th Ordinary General Shareholders’ Meeting held on June 14, 2017. The “Executive Compensation Meeting,” members of which include outside members of the board of directors, will prepare recommendations to the board of directors regarding details of the aggregate remuneration and bonuses for the members of the board of directors and amount paid to each individual member within the aforementioned maximum total amount per year, and the board of directors will make the final decision.

In addition to the above form of compensation, Toyota enacted a stock option plan in 2010. Under the 2010 plan, Toyota issued to its members of the board of directors stock acquisition rights to purchase 400,000 shares of common stock at an exercise price of ¥3,183 and with an expiration date of July 31, 2018. See “Share Ownership — Stock Options” for a more detailed discussion of Toyota’s stock option plan.

Toyota Motor Corporation and its subsidiaries have not set aside or accrued any amounts to provide pension, retirement or similar benefits to members of the board of directors and audit & supervisory board members of Toyota Motor Corporation.

Toyota’s Annual Securities Report filed with the Kanto Local Bureau of Finance on June 25, 2018, contained the following information concerning compensation in fiscal 2018 on a consolidated basis for members of the board of directors and audit & supervisory board members whose total compensation exceeded ¥100 million during such period:

- Takeshi Uchiyamada, Member of the Board of Directors: ¥181 million (¥99 million in base compensation and ¥82 million in bonus)

- Shigeru Hayakawa, Member of the Board of Directors: ¥108 million (¥61 million in base compensation and ¥47 million in bonus)

- Akio Toyoda, Member of the Board of Directors: ¥380 million (¥99 million in base compensation and ¥280 million in bonus)

- Didier Leroy, Member of the Board of Directors: ¥1,026 million (¥249 million in base compensation and ¥777 million in bonus)

- Shigeki Terashi, Member of the Board of Directors: ¥124 million (¥70 million in base compensation and ¥54 million in bonus)

The amounts above were recorded as expenses in fiscal 2018.

6.C BOARD PRACTICES

Toyota’s articles of incorporation provide for a board of directors of not more than 20 members and for not more than seven audit & supervisory board members. Shareholders elect the members of the board of directors and audit & supervisory board members at the general shareholders’ meeting. The normal term of office of a member of the board of directors is one year and of an audit & supervisory board member is four years. Members of the board of directors and audit & supervisory board members may serve any number of consecutive terms.

The board of directors may appoint one Chairman of the Board of Directors and one President, as well as one or more Vice Chairmen of the Board and Executive Vice Presidents. The board of directors elects, pursuant to its resolutions, one or more Representative Directors. Each Representative Director represents Toyota generally in the conduct of its affairs. The board of directors has the ultimate responsibility for the administration of Toyota’s affairs. None of Toyota’s members of the board of directors is party to a service contract with Toyota or any of its subsidiaries that provides for benefits upon termination of employment.

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Under the Companies Act and Toyota’s articles of incorporation, Toyota may, by a resolution of its board of directors, exempt members of the board of directors (including former members of the board of directors) from their liabilities to Toyota arising in connection with their failure to execute their duties within the limits stipulated by laws and regulations. In addition, Toyota may enter into a liability limitation agreement with each member of the board of directors (excluding executive members of the board of directors, among others) which limits the maximum amount of their liabilities owed to Toyota arising in connection with their failure to execute their duties to an amount equal to the minimum liability limit amount prescribed in the laws and regulations.

Under the Companies Act, Toyota must have at least three audit & supervisory board members. At least half of the audit & supervisory board members are required to be an “outside” audit & supervisory board member, which is any person who satisfies all of the following requirements:

(a) the person has never been a member of the board of directors, accounting counselor (in the case that an accounting counselor is a legal entity, an employee of such entity who is in charge of its affairs), executive officer, manager or employee of Toyota or its subsidiaries during the 10 year period before becoming an outside audit & supervisory board member;

(b) if the person was an audit & supervisory board member of Toyota or any of its subsidiaries at any time during the 10 year period before becoming an outside audit & supervisory board member, such person has not been a member of the board of directors, accounting counselor (in the case that an accounting counselor is a legal entity, an employee of such entity who is in charge of its affairs), executive officer, manager or employee of Toyota or any of its subsidiaries during the 10 year period before becoming an audit & supervisory board member of Toyota or any of its subsidiaries; and

(c) the person is not a spouse or relative within the second degree of kinship of any member of the board of directors or manager or other key employee of Toyota.

The audit & supervisory board members may not at the same time be a member of the board of directors, accounting counselor (in case that an accounting counselor is a judicial person, a member of such judicial person who is in charge of its affairs), executive officers, general managers or employees of Toyota or any of its subsidiaries. Together, these audit & supervisory board members form the audit & supervisory board. The audit & supervisory board members have the duty to examine the financial statements and business reports which are submitted by the board of directors to the general shareholders’ meeting. The audit & supervisory board members also monitor the administration of Toyota’s affairs by the members of the board of directors. Audit & supervisory board members are not required to be, and Toyota’s audit & supervisory board members are not, certified public accountants. They are required to participate in meetings of the board of directors but are not entitled to vote.

Under the Companies Act and Toyota’s articles of incorporation, Toyota may, by a resolution of its board of directors, exempt audit & supervisory board members (including former audit & supervisory board members) from their liabilities to Toyota arising in connection with their failure to execute their duties within the limits stipulated by laws and regulations. In addition, Toyota may enter into a liability limitation agreement with each audit & supervisory board member which limits the maximum amount of their liabilities owed to Toyota arising in connection with their failure to execute their duties to an amount equal to the minimum liability limit amount prescribed in the laws and regulations.

Toyota does not have a remuneration committee. However, members of Toyota’s “Executive Compensation Meeting,” consisting of the Chairman, President, Chief Officer in charge of human resources and outside directors, discuss recommendations to the board of directors concerning remuneration for members of the board of directors.

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6.D EMPLOYEES

The total number of Toyota employees, on a consolidated basis, was 369,124 as of March 31, 2018, 364,445 as of March 31, 2017 and 348,877 as of March 31, 2016. The following tables set forth a breakdown of persons employed by business segment and by geographic location as of March 31, 2018.

Segment	Number of Employees	Location	Number of Employees
Automotive	320,339	Japan	213,251
Financial services	10,492	North America	49,250
All other	32,925	Europe	20,746
Unallocated	5,368	Asia	64,500
		Other*	21,377
Total	369,124	Total	369,124
		*  “Other” consists of Central and South America, Oceania, Africa and the Middle East.

Most regular employees of Toyota Motor Corporation and its consolidated subsidiaries in Japan, other than management, are required to become members of the labor unions that compose the Federation of All Toyota Workers’ Unions. Approximately 87% of Toyota Motor Corporation’s regular employees in Japan are members of this union.

In Japan, basic wages and other working conditions are negotiated annually. In addition, in accordance with Japanese national custom, each employee is also paid a semi-annual bonus. Bonuses are negotiated at the time of wage negotiations and are based on Toyota’s financial results, prospects and other factors. The average wage increase for all union members, excluding bonuses, in Japan was approximately 3.3% in fiscal 2018.

In general, Toyota considers its labor relations with all of its workers to be good. However, Toyota is currently a party to, and otherwise from time to time experiences, labor disputes in some of the countries in which it operates. Toyota does not expect any disputes to which it is currently a party to materially affect Toyota’s consolidated financial position.

Toyota’s average number of temporary employees on a consolidated basis was 84,731 during fiscal 2018.

6.E SHARE OWNERSHIP

For information on the number of shares of Toyota’s common stock held by each member of the board of directors and audit & supervisory board member as of June 2018, see “— Directors and Senior Management.” Each such member of the board of directors and audit & supervisory board member owns less than one percent of the issued and outstanding shares of common stock of Toyota. The shares held by each member of the board of directors and audit & supervisory board member do not include options that are exercisable for shares of Toyota’s common stock. For a description of these options, see “— Stock Options” below.

None of Toyota’s shares of common stock entitles the holder to any preferential voting rights.

Stock Options

The only stock option plan for which stock options or stock acquisition rights are currently exercisable or will become exercisable in the future is the plan approved by Toyota’s shareholders in June 2010. Toyota has not enacted any such plan after 2011. Under the 2010 plan, Toyota issued stock acquisition rights to purchase 3,435,000 shares of common stock to its members of the board of directors and officers and employees, including directors, officers and employees of its subsidiaries and one Toyota affiliated company.

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Pursuant to the provisions of the 2010 plan, stock acquisition rights may be exercised during a six-year period that starts two years from the date of grant. The exercise price of each stock acquisition right is 1.025 times the closing price of Toyota’s common stock on the Tokyo Stock Exchange on the date of grant. The 2010 plan provides that each member of the board of directors will be granted no more than 400 and no less than 300 stock acquisition rights, and each eligible officer or employee will be granted no more than 200 and no less than 20 stock acquisition rights. For the 2010 plan, 100 shares will be issued or delivered upon the exercise of each stock acquisition right. The options were granted in early August 2010.

An option holder who retires while one’s options are still exercisable retains the right to exercise one’s options until the expiration of the exercise period described above. However, an option holder’s right to purchase common stock under each plan lapses automatically upon one’s death or upon taking position such as in the management with a competitor.

The following table summarizes information for options and the incentive plan outstanding and exercisable at March 31, 2018:

Outstanding					Exercisable
Number of shares	Exercise price		Remaining life		Number of shares		Exercise price
	(Yen)		(Years)				(Yen)
283,600		3,153		0.33		283,600		3,153

Toyota also has an employee stock ownership association in Japan for employees and full time and part time company advisors. Members of the employee stock ownership association set aside certain amounts from their monthly salary and bonuses to purchase Toyota’s common stock through the employee stock ownership association. As of March 31, 2018, the employee stock ownership association held 14,365,346 shares of Toyota’s common stock.

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

7.A MAJOR SHAREHOLDERS

As of March 31, 2018, 3,262,997,492 shares of Toyota’s common stock (out of which 353,073,500 shares were treasury stock and 2,909,923,992 shares were outstanding) and 47,100,000 First Series Model AA Class Shares of Toyota were issued. Beneficial ownership of Toyota’s common stock in the table below was prepared from information known to Toyota or that could be ascertained from public filings, including filings made by Toyota’s shareholders regarding their ownership of Toyota’s common stock under the Financial Instruments and Exchange Law of Japan.

Under the Financial Instruments and Exchange Law, any person who becomes, beneficially and solely or jointly, a holder, including, but not limited to, a deemed holder who manages shares for another holder pursuant to a discretionary investment agreement, of more than 5% of the total issued shares of a company listed on a Japanese stock exchange (including ADSs representing such shares) must file a report concerning the shareholding with the director of the relevant local finance bureau. A similar report must be filed, with certain exceptions, if the percentage of shares held by a holder, solely or jointly, of more than 5% of the total issued shares of a company increases or decreases by 1% or more, or if any change to a material matter set forth in any previously filed reports occurs.

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Based on information known to Toyota or can be ascertained from public filings, the following table sets forth the beneficial ownership of holders of 5% or more of Toyota’s common stock as of the most recent practicable date. Toyota is not aware of any holder of First Series Model AA Class Shares who beneficially owns 5% or more of Toyota’ outstanding First Series Model AA Class Shares.

Name of Beneficial Owner	Number of Shares of Common Stock (in thousands)		Percentage of Outstanding Voting Shares of Common Stock
Toyota Industries Corporation		232,037		7.97

According to The Bank of New York Mellon, depositary for Toyota’s ADSs (the “Depositary”), as of March 31, 2018, 45,002,629 shares of Toyota’s common stock were held in the form of ADRs and there were 1,883 ADR holders of record and 151,777 beneficial owners in the United States. According to Toyota’s register of shareholders, as of March 31, 2018, there were 632,418 holders of common stock and First Series Model AA Class Shares of record worldwide. As of March 31, 2018, there were 510 record holders of Toyota’s common stock with addresses in the United States, whose shareholdings represented approximately 10.4% of the issued common stock on that date. Because some of these shares were held by brokers or other nominees, the number of record holders with addresses in the United States might not fully show the number of beneficial owners in the United States.

None of Toyota’s shares of common stock entitles the holder to any preferential voting rights.

To the extent known to Toyota, Toyota is not owned or controlled, directly or indirectly, by another corporation, any foreign government or any natural or legal person.

Toyota knows of no arrangements the operation of which may at a later time result in a change of control.

7.B RELATED PARTY TRANSACTIONS

Business Relationships

Toyota purchases materials, supplies and services, among others, from numerous suppliers throughout the world in the ordinary course of business, including Toyota’s affiliated companies accounted for by the equity method and those firms with which certain members of Toyota’s board of directors are affiliated. Toyota purchased materials, supplies and services, among others, from these affiliated entities in the amount of ¥5,749.4 billion in fiscal 2018. Toyota also sells its products and services, among others, to Toyota’s affiliated companies accounted for by the equity method and firms with which certain members of Toyota’s board of directors are affiliated. Toyota sold products and services, among others, to these affiliated entities in the amount of ¥2,004.6 billion in fiscal 2018. See note 11 of Toyota’s consolidated financial statements for additional information regarding Toyota’s investments in and transactions with affiliated companies.

Loans

Toyota regularly has trade accounts and other receivables by, and accounts payable to, Toyota’s affiliated companies accounted for by the equity method and firms with which certain members of Toyota’s board of directors are affiliated. Toyota had outstanding trade accounts and other receivables by these affiliated entities in the amount of ¥301.3 billion as of March 31, 2018. Toyota had outstanding trade accounts and other payables to these affiliated entities in the amount of ¥736.0 billion as of March 31, 2018.

Toyota, from time to time, provides short- to medium-term loans to its affiliated companies, as well as loans under a loan program established by certain subsidiaries to assist their executives and members of the board of directors with the purchase of homes. As of March 31, 2018, an aggregate amount of ¥0.5 billion in loans was

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outstanding to its affiliated companies accounted for by the equity method. As of March 31, 2018, an aggregate amount of ¥32.7 billion in loans was outstanding to those of its affiliated companies not accounted for by the equity method, which are 20% to 50% owned by Toyota. As of March 31, 2018, the largest loan outstanding to any such affiliated company accounted for by the equity method was a loan of ¥0.3  billion at a fixed rate of 0.46%. Toyota believes that each of these loans was entered into in the ordinary course of business.

7.C INTERESTS OF EXPERTS AND COUNSEL

Not applicable.

ITEM 8. FINANCIAL INFORMATION

8.A CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

1-3. Consolidated Financial Statements. Toyota’s audited consolidated financial statements are included under “Item 18 — Financial Statements.” Except for Toyota’s consolidated financial statements included under Item 18, no other information in this annual report has been audited by Toyota’s auditors.

4. Not applicable.

5. Not applicable.

6. Export Sales. See “Operating and Financial Review and Prospects — Operating Results — Overview — Geographic Breakdown.”

7. Legal and Arbitration Proceedings. See “Information on the Company — Business Overview — Legal Proceedings.”

8. Dividend Policy. See “Key Information — Selected Financial Data — Dividend Information.”

8.B SIGNIFICANT CHANGES

Except as disclosed in this annual report, there have been no significant changes since the date of Toyota’s latest annual financial statements.

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ITEM 9. THE OFFER AND LISTING

9.A LISTING DETAILS

The following table sets forth for the periods shown the reported high and low sales prices of the common stock on the Tokyo Stock Exchange and the ADSs on the New York Stock Exchange.

	Tokyo Stock Exchange				New York Stock Exchange
	Price per Share				Price per ADS
	High		Low		High		Low
Fiscal Year Ended March 31,
2014		6,760		4,610		134.94		99.70
2015		8,783		5,205		145.80		103.38
2016		8,700		5,703		142.84		102.54
2017		7,215		4,917		123.18		97.80
2018		7,806		5,670		140.99		103.62
Financial Quarter Ended:
June 30, 2016		6,027		4,917		110.00		97.80
September 30, 2016		6,372		4,965		122.09		98.48
December 31, 2016		7,215		5,492		123.18		109.94
March 31, 2017		7,103		6,042		121.39		108.41
June 30, 2017		6,242		5,670		110.35		103.62
September 30, 2017		6,832		5,887		121.80		105.65
December 31, 2017		7,312		6,670		128.44		118.82
March 31, 2018		7,806		6,531		140.99		124.46
Month Ended:
December 31, 2017		7,300		6,835		128.44		122.63
January 31, 2018		7,806		7,293		140.99		127.17
February 28, 2018		7,704		7,080		139.48		131.31
March 31, 2018		7,198		6,531		133.56		124.46
April 30, 2018		7,243		6,687		131.87		124.44
May 31, 2018		7,686		6,825		138.68		126.36

9.B PLAN OF DISTRIBUTION

Not applicable.

9.C MARKETS

The primary trading market for Toyota’s common stock is the Tokyo Stock Exchange. The common stock is also listed on the Nagoya Stock Exchange.

Since September 29, 1999, American Depositary Shares, each equal to two shares of Toyota’s common stock and evidenced by American Depositary Receipts, have been traded and listed on the New York Stock Exchange through a sponsored ADR facility operated by The Bank of New York Mellon, as Depositary. Prior to that time, Toyota’s ADSs were listed on the Nasdaq SmallCap Market through five unsponsored ADR facilities.

Toyota’s common stock is also listed on the London Stock Exchange.

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9.D SELLING SHAREHOLDERS

Not applicable.

9.E DILUTION

Not applicable.

9.F EXPENSES OF THE ISSUE

Not applicable.

ITEM 10. ADDITIONAL INFORMATION

10.A SHARE CAPITAL

Not applicable.

10.B MEMORANDUM AND ARTICLES OF ASSOCIATION

Except as otherwise stated, set forth below is information relating to Toyota’s common stock and Model AA Class Shares, including brief summaries of the relevant provisions of Toyota’s articles of incorporation and share handling regulations, as currently in effect, and of the Companies Act, Act Concerning Book-Entry Transfer of Corporate Bonds, Shares and Other Securities (the “Book-Entry Transfer Act”) and related legislation.

General

Toyota’s authorized number of shares as of March 31, 2018 was 10,000,000,000 common shares, of which 3,262,997,492 shares were issued. The articles of incorporation was amended at the 111th Ordinary General Shareholders’ Meeting held in June 2015 and Toyota’s authorized number of shares was changed to 10,000,000,000 shares, with the total number of authorized shares per class, of 10,000,000,000 for common shares, 50,000,000 for First Series Model AA Class Shares, 50,000,000 for Second Series Model AA Class Shares, 50,000,000 for Third Series Model AA Class Shares, 50,000,000 for Fourth Series Model AA Class Shares and 50,000,000 for Fifth Series Model AA Class Shares, and the total number of shares authorized to be issued with respect to First Series Model AA Class Shares through the Fifth Series Model AA Class Shares not to exceed 150,000,000 shares. As of June 23, 2017, there were 47,100,000 shares of First Series Model AA Class Shares issued and outstanding.

Toyota does not issue share certificates for its shares. In accordance with the Companies Act, the Book-Entry Transfer Act and Toyota’s articles of incorporation, Toyota’s common shares are recorded or registered on (i) Toyota’s register of shareholders and (ii) transfer account books of the Japan Securities Depository Center, Inc. (“JASDEC”) which is a book-entry transfer institution and securities firms, banks or other account management institutions. The transfer of common shares will generally become effective once the transfer is recorded in the transferee’s account. In order to assert shareholders’ rights against Toyota, a shareholder must generally have his or her name and address recorded or registered on Toyota’s register of shareholders. A holder of common shares can assert minority shareholders’ rights (shareholders’ rights for which Toyota has not set a record date) against Toyota if JASDEC provides an individual shareholder notice to Toyota upon the shareholder’s request. The shareholder of deposited shares underlying the ADSs is the Depositary for the ADSs. Accordingly, holders of ADSs will not be able directly to assert shareholders’ rights.

A holder of common shares must have a transfer account to transfer shares. Holders of common shares who do not have a transfer account with JASDEC must have an account with an account management institution that directly or indirectly has a transfer account with JASDEC. Once Toyota decides on the record date for its

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shareholders’ meeting or makes a request to JASDEC based on justifiable grounds, JASDEC will promptly provide to Toyota names, addresses and other information with respect to the holders of Toyota’s common shares who are recorded on the transfer account books of JASDEC or account management institutions. Upon receiving such information, Toyota will record or register such information received from JASDEC on its register of shareholders. Accordingly, holders of common shares recorded or registered on Toyota’s register of shareholders will be treated as holders of common shares of Toyota and may exercise rights, such as voting rights, and will receive dividends (if any) and notices to holders of common shares directly from Toyota. Holders of common shares wishing to assert minority shareholders’ rights against Toyota must request an individual shareholder notice to JASDEC or the account management institution at which the shareholder has opened a transfer account. In response to such request, JASDEC will provide the individual shareholders notice to Toyota. A holder of common shares may assert his or her minority shareholders’ rights against Toyota for a period of four weeks after the date the individual shareholder notice is provided to Toyota. The shares held by a person who is deemed to hold additional shares according to the transfer account books are aggregated for these purposes.

Model AA Class Shares, once issued, will be recorded or registered on Toyota’s register of shareholders. The transfer of Model AA Class Shares, once issued, will be effective upon an agreement between the transferor and the transferee, but entry or record of a change of holder in the register of shareholders will require an approval from the board of directors.

Corporate Purpose

Article 2 of Toyota’s articles of incorporation states that its purpose is to engage in the following businesses:

• the manufacture, sale, leasing and repair of:

• motor vehicles, industrial vehicles, ships, aircraft, other transportation machinery and apparatus, spacecraft and space machinery and apparatus, and parts thereof;

• industrial machinery and apparatus, other general machinery and apparatus, and parts thereof;

• electrical machinery and apparatus, and parts thereof; and

• measuring machinery and apparatus, medical machinery and apparatus, and parts thereof.

• the manufacture and sale of ceramics and products of synthetic resins, and materials thereof;

• the manufacture, sale and repair of construction materials and equipment, furnishings and fixtures for residential buildings;

• the planning, designing, supervision, execution and undertaking of construction works, civil engineering works, land development, urban development and regional development;

• the sale, purchase, leasing, brokerage and management of real estate;

• the service of information processing, information communications and information supply and the development, sale and leasing of software;

• the design and development of product sales systems that utilize networks such as the Internet, sale, leasing and maintenance of computers included within such systems, and sale of products by utilizing such systems;

• the inland transportation, marine transportation, air transportation, stevedoring, warehousing and tourism businesses;

• the printing, publishing, advertising and publicity, general leasing, security and workers dispatch businesses;

• the credit card operations, purchase and sale of securities, investment consulting, investment trust operation, and other financial services;

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• the operation and management of such facilities as parking lots, showrooms, educational facilities, medical care facilities, sports facilities, marinas, airfields, food and drink stands and restaurants, lodging facilities, retail stores and others;

• the non-life insurance agency business and the life insurance agency business;

• the production and processing by using biotechnology of agricultural products including trees, and the sale of such products;

• the sale of goods related to each of the preceding items and mineral oil;

• the conducting of engineering, consulting, invention and research relating to each of the preceding items and the utilization of such invention and research; and

• any businesses incidental to or related to any of the preceding items.

Dividends

Dividends — General

Toyota normally pays dividends twice per year, including an interim dividend and a year-end dividend. Toyota’s articles of incorporation provide that retained earnings can be distributed as dividends pursuant to a resolution of its board of directors. Toyota’s board of directors resolves to pay year-end dividends to holders of common shares and registered pledgees of common shares of record as of March 31, the record date, in each year. In addition, the articles of incorporation provide that in the event that Toyota pays a year-end dividend to holders of common shares, it will pay AA Dividends in cash from surplus to any holders of Model AA Class Shares or registered pledgees of Model AA Class Shares entered or recorded in the final register of shareholders as of the record date for the year-end dividend, in preference to holders of common shares or registered pledgees of common shares. The amount of annual AA Dividends per Model AA Class Share is calculated by multiplying the amount per Model AA Class Share paid to Toyota as consideration by a rate determined by the board of directors prior to the issuance of such Model AA Class Share, which rate is not to exceed 5%.

In addition to these year-end dividends, Toyota may pay an interim dividend in the form of cash distributions from its distributable surplus to holders of common shares and pledgees of common shares of record as of September 30, the record date, in each year by a resolution of its board of directors. The articles of incorporation provide that in the event that Toyota pays such interim dividends, Toyota will pay AA Interim Dividends in cash as interim dividend to any holders of Model AA Class Shares or registered pledgees of Model AA Class Shares entered or recorded in the final register of shareholders as of the record date for the interim dividend, in preference to holders of common shares or registered pledgees of common shares. If AA Interim Dividends are paid during the fiscal year in which the record date for the year-end dividend falls, the amount of AA Interim Dividends is deducted from AA Dividends to be paid per the above paragraph.

If the amount of the dividends from surplus paid in cash to holders of Model AA Class Shares or registered pledgees of Model AA Class Shares is less than the prescribed amount of AA Dividends in any fiscal year, the amount of the shortfall will be carried forward to and accumulate in the following fiscal year and thereafter. Dividends from surplus will be paid in cash to holders of Model AA Class Shares or registered pledgees of Model AA Class Shares in preference to the payment of interim and year-end dividends until such payment reaches the amount of the accumulated unpaid dividends.

In addition, under the Companies Act, dividends may be paid to holders of common shares and pledgees of record of common shares as of any record date, other than those specified above, as set forth by Toyota’s articles of incorporation or as determined by its board of directors from time to time. Under the Companies Act, dividends may be distributed in cash or (except in the case of interim dividends mentioned in the second preceding paragraph) in kind, subject to limitations on distributable surplus and to certain other conditions.

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Dividends — Distributable amount

Under the Companies Act, Toyota is permitted to make distributions of surplus to the extent that the aggregate book value of the assets to be distributed to shareholders does not exceed the distributable amount provided for by the Companies Act and the ordinance of the Ministry of Justice as at the effective date of such distribution of surplus.

The amount of surplus at any given time shall be the amount of Toyota’s assets and the book value of Toyota’s treasury stock after subtracting and adding the amounts of items provided for by the Companies Act and the ordinance of the Ministry of Justice, and the amount of surplus distributable for dividends is calculated by adding to and subtracting from this amount the amounts of items provided for by the Companies Act and the ordinance of the Ministry of Justice.

Dividends — Prescription

Under its articles of incorporation, Toyota is not obligated to pay any dividends in cash which are left unclaimed for a period of three years after the date on which they first became payable.

Capital Accounts

The amount of the cash or assets paid or contributed by subscribers for new shares (with certain exceptions) is required to be accounted for as stated capital, although Toyota may account for an amount not exceeding one-half of such cash or assets as additional paid-in capital.

Under the Companies Act, Toyota may reduce its additional paid-in capital and legal reserve without limitation on the amount to be reduced, generally, by a resolution of a general shareholders’ meeting and if so decided by the same resolution, may account for the whole or any part of the amount of the reduction of additional paid-in capital as stated capital. The whole or any part of surplus which may be distributed as dividends may also be transferred to stated capital by a resolution of a general shareholders’ meeting.

Stock Splits

Toyota may at any time split the outstanding shares into a greater number of shares by a resolution of the board of directors. Toyota must give public notice of the stock split, specifying a record date for the stock split, not less than two weeks prior to the record date. Toyota shall conduct any stock split simultaneously and in the same proportion with respect to the common shares and the Model AA Class Shares.

Consolidation of Shares

Toyota may at any time consolidate shares in issue into a smaller number of shares by a special shareholders resolution (as defined in “Voting Rights”). When a consolidation of shares is to be made, Toyota must give public notice of certain matters two weeks prior to the effective date of the consolidation. Toyota must disclose the reason for the consolidation of shares at a general shareholders’ meeting. Toyota shall conduct any consolidation of shares simultaneously and in the same proportion with respect to the common shares and the Model AA Class Shares.

Japanese Unit Share System

General. Consistent with the requirements of the Companies Act, Toyota’s articles of incorporation provide that 100 common shares or Model AA Class Shares each constitute one “unit.” Although the number of shares constituting a unit is included in the articles of incorporation, any amendment to the articles of incorporation reducing (but not increasing) the number of shares constituting a unit or eliminating the provisions for the unit of shares may be made by a resolution of the board of directors rather than by a special shareholders resolution, which is otherwise required for amending the articles of incorporation.

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Voting Rights under the Unit Share System. Under the unit share system, shareholders have one voting right for each unit of shares that they hold. Any number of common shares or Model AA Class Shares less than a full unit will carry no voting rights.

Purchase by Toyota of Shares Constituting Less Than a Unit. A holder of shares constituting less than a full unit may require Toyota to purchase those shares at their market value in the case of common shares and at fair price in the case of Model AA Class Shares in accordance with the provisions of Toyota’s share handling regulations and the Companies Act.

Surrender of American Depositary Receipts. ADR holders will only be permitted to surrender ADRs and withdraw underlying common shares constituting an integral number of a whole unit. If a holder surrenders an ADR including ADRs representing common shares that do not constitute an integral number of whole units, the Depositary will deliver to that holder only those common shares which constitute a whole unit. The Depositary will then issue to the holder a new ADR representing the remaining shares. Holders of an ADR that represents less than a whole unit of underlying shares will be unable to withdraw the underlying shares. As a result, those holders will be unable to require Toyota to purchase their common shares to the extent those common shares constitute less than one whole unit.

Voting Rights

Toyota holds its ordinary general shareholders’ meeting each year. In addition, Toyota may hold an extraordinary general shareholders’ meeting whenever necessary by giving at least two weeks’ advance notice. Under the Companies Act, notice of any shareholders’ meeting must be given to each shareholder having voting rights or, in the case of a non-resident shareholder, to his or her resident proxy or mailing address in Japan in accordance with Toyota’s share handling regulations, at least two weeks prior to the date of the meeting.

Holders of common shares and holders of Model AA Class Shares shall have voting rights exercisable at a general shareholders’ meeting. A holder of shares constituting one or more whole units is entitled to one vote per unit of shares subject to the limitations on voting rights set forth in this paragraph. In general, under the Companies Act, a resolution can be adopted at a general shareholders’ meeting by a majority of the shares having voting rights represented at the meeting. The Companies Act and Toyota’s articles of incorporation require a quorum for the election of members of the board of directors and audit & supervisory board members of not less than one-third of the total number of outstanding shares having voting rights. Toyota’s shareholders are not entitled to cumulative voting in the election of members of the board of directors. A corporate shareholder, the management of which is substantially under Toyota’s control as provided by an ordinance of the Ministry of Justice, either through the holding of voting rights or for any other reason, does not have voting rights.

Shareholders may exercise their voting rights by attending the general shareholders’ meeting or in writing by mail. Shareholders who choose to exercise their voting rights by mail must fill out and return to Toyota the voting right exercise form enclosed with the convocation notice of the general shareholders’ meeting by the date specified in such convocation notice. In addition, from the general shareholders’ meeting for fiscal 2009, shareholders may exercise their voting rights through the internet. Shareholders electing to exercise their voting rights through the internet must log on to the “Website to Exercise Voting Rights” using the login ID and temporary password provided in the voting right exercise form enclosed with the convocation notice and submit their votes by a date specified in the convocation notice, following instructions appearing on the website. Institutional investors may also use the Electronic Proxy Voting Platform operated by Investor Communications Japan (“ICJ”) to exercise their voting rights through the use of the Internet, if such institutional investor applies to use the platform in advance. Shareholders may also exercise their voting rights through proxies, provided that those proxies are also shareholders who have voting rights. Toyota may refuse a shareholder having two or more proxies attend a general shareholders’ meeting.

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The Companies Act provides that a quorum of at least one-third of outstanding shares with voting rights must be present at a shareholders’ meeting to approve any material corporate actions such as:

(1) any amendment of the articles of incorporation with certain exceptions in which a shareholders’ resolution is not required;

(2) acquisition of its own shares from a specific party;

(3) consolidation of shares;

(4) any issue or transfer of its shares at a “specially favorable” price (or any issue of stock acquisition rights or bonds with stock acquisition rights at “specially favorable” conditions by Toyota) to any persons other than shareholders;

(5) the removal of an audit & supervisory board member;

(6) the exemption of liability of a director or audit & supervisory board member with certain exceptions;

(7) a reduction of stated capital which meets certain requirements with certain exceptions;

(8) a distribution of in-kind dividends which meets certain requirements;

(9) dissolution, merger, or consolidation with certain exceptions in which a shareholders’ resolution is not required;

(10) the transfer of the whole or a material part of the business;

(11) the transfer in entirety or in part of shares or equity interest of a subsidiary under certain conditions;

(12) the taking over of the entire business of any other corporation with certain exceptions in which a shareholders’ resolution is not required;

(13) share exchange or share transfer for the purpose of establishing 100% parent-subsidiary relationships with certain exceptions in which a shareholders’ resolution is not required; or

(14) company split with certain exceptions in which a shareholders’ resolution is not required.

At least two-thirds of the shares having voting rights represented at the meeting must approve these actions.

The voting rights of holders of ADSs are exercised by the Depositary based on instructions from those holders.

Rights to be Allotted Shares

Holders of common shares and Model AA Class Shares have no preemptive rights under Toyota’s articles of incorporation. Under the Companies Act, the board of directors may, however, determine that shareholders shall be given rights to be allotted shares or stock acquisition rights on request in connection with a particular issue or transfer of shares, or issue of stock acquisition rights, respectively. In this case, such rights must be given on uniform terms to all shareholders as of a specified record date by at least two weeks’ prior public notice to shareholders of the record date.

Rights to be allotted shares are nontransferable. However, a shareholder may be allotted stock acquisition rights without consideration thereto, and may transfer such rights.

Liquidation Rights

In the event of a liquidation of Toyota, the assets remaining after payment of all debts, liquidation expenses and taxes will be distributed as follows. First, an amount per First Series Model AA Class Share through Fifth

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Series Model AA Class Share, determined by resolution of the board of directors or calculated using a formula determined by a resolution of the board of directors prior to the issuance of such Model AA Class Shares based on the amount per Model AA Class Shares paid to Toyota as consideration (the “Base Amount”), shall be paid in cash to holders of Model AA Class Shares or registered pledgees of Model AA Class Shares. No other distribution of residual assets shall be made to holders of Model AA Class Shares or registered pledgees of Model AA Class Shares. The remaining residual assets shall be distributed among the holders of common shares or registered pledgees of common shares in proportion to the respective number of shares they own.

Liability to Further Calls or Assessments

All of Toyota’s currently outstanding shares, including shares represented by the ADSs, are fully paid and nonassessable.

Transfer Agent

Mitsubishi UFJ Trust and Banking Corporation is the transfer agent for all shares. Mitsubishi UFJ Trust and Banking Corporation’s office is located at 4-5, Marunouchi 1-chome, Chiyoda-ku, Tokyo, 100-8212 Japan. Mitsubishi UFJ Trust and Banking Corporation maintains Toyota’s register of shareholders and records transfers of record ownership (in the case of common shares, upon receiving notification from JASDEC).

Record Date

The close of business on March 31 is the record date for Toyota’s year-end dividends, if paid. A holder of common shares or Model AA Class Shares constituting one or more whole units who is recorded or registered as a holder on Toyota’s register at the close of business as of March 31 is also entitled to exercise shareholders’ voting rights at the ordinary general shareholders’ meeting with respect to the business year ending on March 31. The close of business on September 30 of each year is the record date for interim dividends, if paid. In addition, Toyota may set a record date for determining the shareholders entitled to other rights and for other purposes by giving at least two weeks’ prior public notice.

The shares generally trade ex-dividend or ex-rights in the Japanese stock exchanges on the second business day before a record date (or if the record date is not a business day, the third business day prior thereto), for the purpose of dividends or rights offerings.

Acquisition by Toyota of Shares

Toyota may acquire its own common shares (i) through a stock exchange on which such shares are listed or by way of tender offer (pursuant to an ordinary resolution of a general shareholders’ meeting or a resolution of the board of directors), (ii) by purchase from a specific party (pursuant to a special resolution of a general shareholders’ meeting) or (iii) from a subsidiary of Toyota (pursuant to a resolution of the board of directors). In addition, Toyota may acquire its own Model AA Class Shares (i) by purchase from all holders of the relevant series of Model AA Class Shares who make an offer to transfer the shares to Toyota upon notice from Toyota to acquire the shares (pursuant to an ordinary resolution of a general shareholders’ meeting), (ii) by purchase from a specific party (pursuant to a special resolution of a general shareholders’ meeting) or (iii) from a subsidiary of Toyota (pursuant to a resolution of the board of directors). When such acquisition of common shares is made by Toyota from a specific party other than a subsidiary of Toyota, any other holder of common shares may make a demand to a representative director, more than five calendar days prior to the relevant shareholders’ meeting, that Toyota also purchase the common shares held by such holder. However, the acquisition of its own common shares at a price not exceeding the market price to be provided under an ordinance of the Ministry of Justice will not trigger the right of any shareholder to include him/her as the seller of his/her shares in such proposed purchase.

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Any acquisition of shares must satisfy certain requirements that the total amount of the acquisition price may not exceed the amount of the distributable dividends. See “— Dividends.”

Shares acquired by Toyota may be held by it for any period or may be cancelled by resolution of the board of directors. Toyota may also transfer to any person the shares held by it, subject to a resolution of the board of directors, and subject also to other requirements applicable to the issuance of new shares. Toyota may also utilize its treasury stock for the purpose of transfer to any person upon exercise of stock acquisition rights or for the purpose of acquiring another company by way of merger, share exchange or corporate split through exchange of treasury stock for shares or assets of the acquired company.

The Companies Act generally prohibits any subsidiary of Toyota from acquiring shares of Toyota.

Model AA Class Shareholder’s Conversion Right into Common Shares

Holders of Model AA Class Shares may, at certain times specified in resolution of the board of directors as the conversion period at the time of the issuance of First Series Model AA Class Shares to Fifth Series Model AA Class Shares, demand that Toyota acquire some or all of such Model AA Class Shares held by such holder of Model AA Class shares in exchange for common shares in a number determined by a formula specified in such board resolution. Any fractions of less than one common share to be delivered in exchange for such Model AA Class Shares shall be disregarded, in which case payment of money as provided in the Companies Act shall not be made.

Model AA Class Shareholder’s Cash Put Option

Holders of Model AA Class Shares may, at certain times specified in resolution of the board of directors as the cash put option period at the time of the issuance of First Series Model AA Class Shares to Fifth Series Model AA Class Shares, demand that Toyota acquire some or all of such Model AA Class Shares in exchange for cash in an amount equivalent to the Base Amount. If demand for acquisition exceeds the amount available under the Companies Act for distribution as of the date of demand for such acquisition, Model AA Class Shares to be acquired by Toyota shall be determined by a resolution of the board of directors, and the cash put option in respect of Model AA Class Shares not so acquired shall be deemed not to have been exercised.

Toyota’s Cash Call Option

After the lapse of period specified in resolution of its board of directors at the time of the issuance of First Series Model AA Class Shares to Fifth Series Model AA Class Shares, on an acquisition date separately determined by a resolution of the board of directors, Toyota may acquire all of such Model AA Class Shares in exchange for cash in an amount equivalent to the Base Amount.

Acquisition or Disposition of Shares or ADS

Under the Foreign Exchange and Foreign Trade Law and the cabinet orders and ministerial ordinances thereunder (collectively, the “Foreign Exchange Regulations”), all aspects of regulations on foreign exchange and foreign trade transactions are, with minor exceptions (which are not generally applicable to the purchase and sale of Toyota’s shares), only subject to post transaction reporting requirements. Acquisitions and dispositions of shares of common stock or ADS by non-residents of Japan (including foreign corporations not resident in Japan) are generally not subject to this reporting requirement. However, the Minister of Finance has the power to impose a licensing requirement for transactions in limited circumstances.

Report of Substantial Shareholdings

The Financial Instruments and Exchange Law of Japan and regulations under the Law require any person who has become a holder (together with its related persons) of more than 5% of the total issued shares of a

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company listed on any Japanese stock exchange (including ADSs representing such shares) to file with the Director of a competent Local Finance Bureau, within five business days, a report concerning those shareholdings. A similar report must also be filed to reflect any change of 1% or more in any shareholding or any change in material matters set out in reports previously filed. Any such report shall be filed with the Director of a competent Local Finance Bureau through the Electronic Disclosure for Investor’s Network (“EDINET”) system. For this purpose, shares issuable to a shareholder upon exercise of stock acquisition rights are taken into account in determining both the number of shares held by that stock acquisition rights holder and the company’s total issued shares.

10.C MATERIAL CONTRACTS

All contracts concluded by Toyota during the two years preceding this filing were entered into in the ordinary course of business.

10.D EXCHANGE CONTROLS

The Foreign Exchange Regulations govern the acquisition and holding of shares of capital stock of Toyota by “exchange non-residents” and by “foreign investors.” The Foreign Exchange Regulations currently in effect do not, however, affect transactions between exchange non-residents to purchase or sell shares outside Japan using currencies other than Japanese yen.

Exchange non-residents are:

• individuals who do not reside in Japan; and

• corporations whose principal offices are located outside Japan.

Generally, branches and other offices of non-resident corporations that are located within Japan are regarded as residents of Japan. Conversely, branches and other offices of Japanese corporations located outside Japan are regarded as exchange non-residents.

Foreign investors are:

• individuals who are exchange non-residents;

• corporations or other organizations that are organized under the laws of foreign countries or whose principal offices are located outside of Japan; and

• corporations (1) of which 50% or more of their voting rights are held directly or indirectly by individuals who are exchange non-residents and/or corporations or other organizations (a) that are organized under the laws of foreign countries or (b) whose principal offices are located outside of Japan or (2) a majority of whose officers, or officers having the power of representation, are individuals who are exchange non-residents.

In general, the acquisition of shares of a Japanese company (such as the shares of capital stock of Toyota) by an exchange non-resident from a resident of Japan is not subject to any prior filing requirements. In certain limited circumstances, however, the Minister of Finance may require prior approval of an acquisition of this type. While prior approval, as described above, is not required, in the case where a resident of Japan transfers shares of a Japanese company (such as the shares of capital stock of Toyota) for consideration exceeding ¥100 million to an exchange non-resident, the resident of Japan who transfers the shares is required to report the transfer to the Minister of Finance within 20 days from the date of the transfer or the date of receipt of payment, whichever comes later, unless the transfer was made through a bank or financial instruments business operator licensed or registered under Japanese law.

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If a foreign investor acquires shares of a Japanese company that is listed on a Japanese stock exchange (such as the shares of capital stock of Toyota) and, as a result of the acquisition, the foreign investor, in combination with any existing holdings, directly or indirectly holds 10% or more of the issued shares of the relevant company, the foreign investor, in general, must file a report of the acquisition with the Minister of Finance and any other competent Ministers having jurisdiction over that Japanese company by the 15th day of the month following the month in which the date of the acquisition falls. In limited circumstances, such as where the foreign investor is in a country that is not listed on an exemption schedule in the Foreign Exchange Regulations, or where that Japanese company is engaged in certain businesses designated by the Foreign Exchange Regulations, a prior notification of the acquisition must be filed with the Minister of Finance and any other competent Ministers, who may then modify or prohibit the proposed acquisition.

Under the Foreign Exchange Regulations, dividends paid on, and the proceeds of sales in Japan of, shares held by non-residents of Japan may in general be converted into any foreign currency and repatriated abroad. Under the terms of the deposit agreement pursuant to which Toyota’s ADSs are issued, the Depositary is required, to the extent that in its judgment it can convert yen on a reasonable basis into dollars and transfer the resulting dollars to the United States, to convert all cash dividends that it receives in respect of deposited shares into dollars and to distribute the amount received (after deduction of applicable withholding taxes) to the holders of ADSs.

10.E TAXATION

The following discussion is a general summary of the principal U.S. federal income and Japanese national tax consequences of the acquisition, ownership and disposition of shares of common stock or ADSs. This summary does not purport to address all material tax consequences that may be relevant to holders of shares of common stock or ADSs, and does not take into account the specific circumstances of any particular investors, some of which (such as tax-exempt entities, banks, insurance companies, broker-dealers, traders in securities that elect to use a mark-to-market method of accounting for their securities holdings, regulated investment companies, real estate investment trusts, partnerships and other pass-through entities, investors liable for the U.S. alternative minimum tax, investors that own or are treated as owning 10% or more of Toyota’s stock (by vote or value), investors that hold shares of common stock or ADSs as part of a straddle, hedge, conversion transaction or other integrated transaction, U.S. Holders (as defined below) subject to special tax accounting rules as a result of any item of gross income with respect to shares of common stock or ADSs being taken into account in an “applicable financial statement” (as defined in section 451 of the Internal Revenue Code of 1986, as amended) and U.S. Holders (as defined below) whose functional currency is not the U.S. dollar) may be subject to special tax rules. This summary is based on the tax laws and regulations of the United States and Japan, judicial decisions, published rulings and administrative pronouncements all as in effect on the date hereof, as well as on the current income tax convention between the United States and Japan (the “Treaty”), as described below, all of which are subject to change (possibly with retroactive effect), and to differing interpretations.

For purposes of this discussion, a “U.S. Holder” is any beneficial owner of shares of common stock or ADSs that, for U.S. federal income tax purposes, is:

1. an individual who is a citizen or resident of the United States;

2. a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized in or under the laws of the United States, any state thereof, or the District of Columbia;

3. an estate the income of which is subject to U.S. federal income tax without regard to its source; or

4. a trust that is subject to the primary supervision of a U.S. court and the control of one or more U.S. persons, or that has a valid election in effect under applicable Treasury regulations to be treated as a U.S. person.

An “Eligible U.S. Holder” is a U.S. Holder that:

1. is a resident of the United States for purposes of the Treaty;

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2. does not maintain a permanent establishment in Japan (a) with which the shares of common stock or ADSs are effectively connected and through which the U.S. Holder carries on or has carried on business, or (b) of which the shares of common stock or ADSs form part of the business property; and

3. is eligible for benefits under the Treaty with respect to income and gain derived in connection with the shares of common stock or ADSs.

This summary does not address any aspects of U.S. federal tax law other than income taxation and does not discuss any aspects of Japanese tax law other than income taxation, as limited to national taxes, inheritance and gift taxation. This summary also does not cover any state or local, or non-U.S., non-Japanese tax considerations. Investors are urged to consult their tax advisors regarding the U.S. federal, state and local and Japanese and other tax consequences of acquiring, owning and disposing of shares of common stock or ADSs. In particular, where relevant, investors are urged to confirm their status as Eligible U.S. Holders with their tax advisors and to discuss with their tax advisors any possible consequences of their failure to qualify as Eligible U.S. Holders. In addition, this summary is based in part upon the representations of the Depositary and the assumption that each obligation in the deposit agreement, and in any related agreement, will be performed in accordance with its terms.

In general, for purposes of the Treaty and for U.S. federal income and Japanese income tax purposes, owners of ADRs evidencing ADSs will be treated as the owners of the shares of common stock represented by those ADSs, and exchanges of shares of common stock for ADSs, and exchanges of ADSs for shares of common stock, will not be subject to U.S. federal income or Japanese income tax.

The discussion below is intended for general information only and does not constitute a complete analysis of all tax consequences relating to ownership of shares of common stock or ADSs. Prospective purchasers of shares of common stock or ADSs should consult their own tax advisors concerning the tax consequences of their particular situations.

Japanese Taxation

The following is a summary of the principal Japanese tax consequences (limited to national taxes) to non-residents of Japan or non-Japanese corporations without permanent establishments in Japan (“non-resident Holders”) who are holders of shares of common stock or of ADSs of Toyota. The following information regarding taxation in Japan is based on the tax treaties and tax laws in force and their interpretation by Japan’s tax authorities as of the date of this annual report. Tax laws and treaties and their interpretations may change (including with retroactive effect). Toyota will not revise this summary on the basis of any such change occurring after the date of this annual report.

Generally, non-resident Holders are subject to Japanese withholding tax on dividends paid by Japanese corporations. Stock splits are, in general, not taxable events.

In the absence of an applicable income tax treaty, convention or agreement reducing the maximum rate of Japanese withholding tax or allowing an exemption from Japanese withholding tax, the rate of Japanese withholding tax applicable to dividends paid by Japanese corporations to non-resident Holders is generally 20.42 percent, provided that, with respect to dividends paid on listed shares issued by a Japanese corporation (such as the shares of common stock or ADSs of Toyota) to non-resident Holders, other than any individual shareholder who holds 3 percent or more of the total issued shares of the relevant Japanese corporation, the aforementioned 20.42 percent withholding tax rate is reduced to 15.315 percent for dividends due and payable on or before December 31, 2037. These rates include a special additional withholding tax (2.1 percent of the original withholding tax amount) to secure funds for reconstruction from the Great East Japan Earthquake.

At the date of this annual report, Japan has income tax treaties, conventions or agreements whereby the above-mentioned withholding tax rate is reduced, in most cases to 15 percent or 10 percent for portfolio investors

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(15 percent under the income tax treaties in force with, among other countries, Canada, Denmark, Finland, Germany, Ireland, Italy, Luxembourg, New Zealand, Norway, Singapore, and Spain, and 10 percent under the income tax treaties with, among other countries, Australia, France, Hong Kong, the Netherlands, Portugal, Sweden, Switzerland, the U.K. and the United States).

Under the Treaty, the maximum rate of Japanese withholding tax which may be imposed on dividends paid by a Japanese corporation to an Eligible U.S. Holder that is a portfolio investor is generally reduced to 10 percent of the gross amount actually distributed, and dividends paid by a Japanese corporation to an Eligible U.S. Holder that is a pension fund (as defined in the Treaty) are exempt from Japanese income tax by way of withholding or otherwise, provided that such dividends are not derived from the carrying on of a business, directly or indirectly, by such pension fund.

If the maximum tax rate provided for in the income tax treaty applicable to dividends paid by Toyota to any particular non-resident Holder is lower than the withholding tax rate otherwise applicable under Japanese tax law or if any particular non-resident Holder is exempt from Japanese income tax with respect to such dividends under the income tax treaty applicable to such particular non-resident Holder, such non-resident Holder who is entitled to a reduced rate of or exemption from Japanese withholding tax on the payment of dividends on shares of common stock by Toyota is required to submit an Application Form for Income Tax Convention Regarding Relief from Japanese Income Tax and Special Income Tax for Reconstruction on Dividends (together with any other required forms and documents) in advance through the withholding agent to the relevant tax authority before the payment of dividends. A standing proxy for non-resident Holders of a Japanese corporation may provide this application service. In addition, a simplified special filing procedure is available for non-resident Holders to claim treaty benefits of exemption from or reduction of Japanese withholding tax by submitting a Special Application Form for Income Tax Convention Regarding Relief from Japanese Income Tax and Special Income Tax for Reconstruction on Dividends of Listed Stock (together with any other required forms and documents). With respect to ADSs, this reduced rate or exemption is applicable if the Depositary or its agent submits, together with other documents, two Special Application Forms (one before payment of dividends, the other within eight months after the recording date concerning such payment of dividends) to the Japanese tax authority. To claim this reduced rate or exemption, any relevant non-resident Holder of ADSs will be required to file proof of taxpayer status, residence and beneficial ownership (as applicable) and to provide other information or documents as may be required by the Depositary. A non-resident Holder who is entitled, under an applicable income tax treaty, to a reduced treaty rate lower than the withholding tax rate otherwise applicable under Japanese tax law or an exemption from the withholding tax, but fails to submit the required application in advance, will be entitled to claim the refund of Japanese taxes withheld in excess of the rate under an applicable tax treaty (if such non-resident Holder is entitled to a reduced treaty rate under the applicable income tax treaty) or the entire amount of Japanese tax withheld (if such non-resident Holder is entitled to an exemption under the applicable income tax treaty) by complying with a certain subsequent filing procedure. Toyota does not assume any responsibility to ensure withholding at the reduced rate, or exemption therefrom, for non-resident Holders who would be so eligible under an applicable tax treaty, but where the required procedures as stated above are not followed.

Gains derived from the sale of shares of common stock or ADSs outside Japan by a non-resident Holder holding such shares of common stock or ADSs as portfolio investors are, in general, not subject to Japanese income tax or corporation tax under Japanese law. In addition, Eligible U.S. Holders are not subject to Japanese income or corporation tax with respect to such gains under the Treaty so long as filings required under Japanese law are made.

Japanese inheritance and gift taxes at progressive rates may be payable by an individual who has acquired from another individual shares of common stock or ADSs as a legatee, heir or donee even though neither the individual, nor the deceased, nor donor is a Japanese resident.

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Holders of shares of common stock or ADSs should consult their tax advisors regarding the effect of these taxes and, in the case of U.S. Holders, the possible application of the Estate and Gift Tax Treaty between the United States and Japan.

U.S. Federal Income Taxation

U.S. Holders

The following discussion is a summary of the principal U.S. federal income tax consequences to U.S. Holders that hold shares of common stock or ADSs as capital assets (generally, for investment purposes).

Taxation of Dividends

Subject to the passive foreign investment company (“PFIC”) rules discussed below, the gross amount of any distribution made by Toyota in respect of shares of common stock or ADSs (without reduction for Japanese withholding taxes) will constitute a taxable dividend to the extent paid out of current or accumulated earnings and profits, as determined under U.S. federal income tax principles. The U.S. dollar amount of such a dividend generally will be included in the gross income of a U.S. Holder, as ordinary income, when actually or constructively received by the U.S. Holder, in the case of shares of common stock, or by the Depositary, in the case of ADSs. Dividends paid by Toyota will not be eligible for the dividends-received deduction generally allowed to U.S. corporations in respect of dividends received from other U.S. corporations.

Dividends received on shares and ADSs of certain foreign corporations by non-corporate U.S. investors may be subject to U.S. federal income tax at lower rates than other types of ordinary income if certain conditions are met. Dividends received by non-corporate U.S. Holders with respect to shares of common stock or ADSs of Toyota are expected to be eligible for these reduced rates of tax. U.S. Holders should consult their own tax advisors regarding the eligibility of such dividends for a reduced rate of tax.

The U.S. dollar amount of a dividend paid in Japanese yen will be determined based on the Japanese yen/U.S. dollar exchange rate in effect on the date that the dividend is included in the gross income of the U.S. Holder, regardless of whether the payment is converted into U.S. dollars on that date. Generally, any gain or loss resulting from currency exchange fluctuations during the period from the date the dividend payment is included in the gross income of a U.S. Holder through the date that payment is converted into U.S. dollars (or otherwise disposed of) will be treated as U.S.-source ordinary income or loss. U.S. Holders should consult their own tax advisors regarding the calculation and U.S. federal income tax treatment of foreign currency gain or loss.

To the extent, if any, that the amount of any distribution received by a U.S. Holder in respect of shares of common stock or ADSs exceeds Toyota’s current and accumulated earnings and profits, as determined under U.S. federal income tax principles, the distribution first will be treated as a tax-free return of capital to the extent of the U.S. Holder’s adjusted tax basis in those shares or ADSs, and thereafter will be treated as U.S.-source capital gain.

Distributions of additional shares of common stock that are made to U.S. Holders with respect to their shares of common stock or ADSs, and that are part of a pro rata distribution to all of Toyota’s shareholders, generally will not be subject to U.S. federal income tax.

For U.S. foreign tax credit purposes, dividends included in gross income by a U.S. Holder in respect of shares of common stock or ADSs will constitute income from sources outside the United States, and will generally be “passive category income” or, in the case of certain U.S. Holders, “general category income.” Subject to generally applicable limitations under U.S. federal income tax law and the Treaty, any Japanese withholding tax imposed in respect of a Toyota dividend may be claimed as a credit against the U.S. federal income tax liability of a U.S. Holder, or alternatively as a deduction in the computation of such U.S. Holder’s

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taxable income if the U.S. Holder does not elect to claim a credit for any foreign taxes paid or accrued for the taxable year. Special rules generally will apply to the calculation of foreign tax credits in respect of dividend income that qualifies for preferential U.S. federal income tax rates. Additionally, special rules apply to individuals whose foreign source income during the taxable year consists entirely of “qualified passive income” and whose creditable foreign taxes paid or accrued during the taxable year do not exceed $300 ($600 in the case of a joint return). Further, under some circumstances, a U.S. Holder that:

(i) has held shares of common stock or ADSs for less than a specified minimum period; or

(ii) is obligated to make payments related to Toyota dividends,

will not be allowed a foreign tax credit for Japanese taxes imposed on Toyota dividends.

U.S. Holders are urged to consult their tax advisors regarding the availability of the foreign tax credit under their particular circumstances.

Taxation of Capital Gains and Losses

In general, upon a sale or other taxable disposition of shares of common stock or ADSs, a U.S. Holder will recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference between the amount realized on the sale or other taxable disposition and the U.S. Holder’s adjusted tax basis in those shares of common stock or ADSs. A U.S. Holder generally will have an adjusted tax basis in a share of common stock or an ADS equal to its U.S. dollar cost. Subject to the PFIC rules discussed below, gain or loss recognized on the sale or other taxable disposition of shares of common stock or ADSs generally will be capital gain or loss and, if the U.S. Holder’s holding period for those shares or ADSs exceeds one year, will be long-term capital gain or loss. Non-corporate U.S. Holders, including individuals, currently are eligible for preferential rates of U.S. federal income tax in respect of long-term capital gains. Under U.S. federal income tax law, the deduction of capital losses is subject to limitations. Any gain or loss recognized by a U.S. Holder in respect of the sale or other disposition of shares of common stock or ADSs generally will be treated as U.S.-source income or loss for U.S. foreign tax credit purposes.

Deposits and withdrawals of common stock in exchange for ADSs will not result in the realization of gain or loss for U.S. federal income tax purposes.

Passive Foreign Investment Companies

A non-U.S. corporation generally will be classified as a PFIC for U.S. federal income tax purposes in any taxable year in which, after applying look-through rules, either (1) at least 75% of its gross income is passive income or (2) on average at least 50% of the gross value of its assets is attributable to assets that produce passive income or are held for the production of passive income. Passive income for this purpose generally includes dividends, interest, royalties, rents and gains from commodities and securities transactions. The PFIC determination is made annually and generally is based on the value of a non-U.S. corporation’s assets (including goodwill) and composition of its income.

Toyota does not believe that it was a PFIC for U.S. federal income tax purposes for its taxable year ended March 31, 2018, and currently intends to continue its operations in such a manner that it will not become a PFIC in the future. Because the PFIC determination is made annually and the application of the PFIC rules to a corporation such as Toyota (which among other things is engaged in leasing and financing through several subsidiaries) is not entirely clear, no assurances can be made regarding determination of its PFIC status in the current or any future taxable year. If Toyota is determined to be a PFIC, U.S. Holders could be subject to additional U.S. federal income taxes on gain recognized with respect to the shares of common stock or ADSs and on certain distributions. In addition, an interest charge may apply to the portion of the U.S. federal income tax liability on such gains or distributions treated under the PFIC rules as having been deferred by the U.S. Holder.

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Moreover, dividends that a non-corporate U.S. Holder receives from Toyota will not be eligible for the reduced U.S. federal income tax rates on dividends described above if Toyota is a PFIC either in the taxable year of the dividend or the preceding taxable year. If a U.S. Holder owns shares of common stock or ADSs in any taxable year in which Toyota is a PFIC, such U.S. Holder generally would be required to file Internal Revenue Service (“IRS”) Form 8621 (or other form specified by the U.S. Department of the Treasury) on an annual basis, subject to certain exceptions based on the value of PFIC stock held. Toyota will inform U.S. Holders if it believes that it will be classified as a PFIC in any taxable year.

Prospective investors should consult their own tax advisors regarding the potential application of the PFIC rules to shares of common stock or ADSs.

Non-U.S. Holders

The following discussion is a summary of the principal U.S. federal income tax consequences to beneficial owners of shares of common stock or ADSs that are neither U.S. Holders, nor partnerships, nor entities taxable as partnerships for U.S. federal income tax purposes (“Non-U.S. Holders”).

A Non-U.S. Holder generally will not be subject to any U.S. federal income or withholding tax on distributions received in respect of shares of common stock or ADSs unless the distributions are effectively connected with the conduct by the Non-U.S. Holder of a trade or business within the United States (and, if an applicable tax treaty requires, are attributable to a U.S. permanent establishment or fixed base of such Non-U.S. Holder).

A Non-U.S. Holder generally will not be subject to U.S. federal income tax in respect of gain recognized on a sale or other disposition of shares of common stock or ADSs, unless:

(i) the gain is effectively connected with a trade or business conducted by the Non-U.S. Holder within the United States (and, if an applicable tax treaty requires, is attributable to a U.S. permanent establishment or fixed base of such Non-U.S. Holder); or

(ii) the Non-U.S. Holder is an individual who was present in the United States for 183 or more days in the taxable year of the disposition and other conditions are met.

Income that is effectively connected with a U.S. trade or business of a Non-U.S. Holder, and, if an income tax treaty applies and so requires, is attributable to a U.S. permanent establishment or fixed base of the Non-U.S. Holder, generally will be taxed in the same manner as the income of a U.S. Holder. In addition, under certain circumstances, any effectively connected earnings and profits realized by a corporate Non-U.S. Holder may be subject to an additional “branch profits tax” at the rate of 30% or at a lower rate that may be prescribed by an applicable income tax treaty.

Backup Withholding and Information Reporting

In general, information reporting requirements will apply to dividends paid to a U.S. Holder in respect of shares of common stock or ADSs, and to the proceeds received upon the sale, exchange or redemption of the shares of common stock or ADSs within the United States by U.S. Holders. Furthermore, backup withholding may apply to those amounts (currently at a 24% rate) if a U.S. Holder fails to provide an accurate taxpayer identification number to certify that such U.S. Holder is not subject to backup withholding or to otherwise comply with the applicable requirements of the backup withholding requirements.

Dividends paid to a Non-U.S. Holder in respect of shares of common stock or ADSs, and proceeds received upon the sale, exchange or redemption of shares of common stock or ADSs by a Non-U.S. Holder, generally are exempt from information reporting and backup withholding under current U.S. federal income tax law. However, a Non-U.S. Holder may be required to provide certification of non-U.S. status in order to obtain that exemption.

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Persons required to establish their exempt status generally must provide such certification under penalty of perjury on IRS Form W-9, entitled Request for Taxpayer Identification Number and Certification, in the case of U.S. persons, and on IRS Form W-8BEN, entitled Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals), or IRS Form W-8BEN-E, entitled Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities) (or other appropriate IRS Form W-8), in the case of non-U.S. persons. Backup withholding is not an additional tax. The amount of backup withholding imposed on a payment generally may be claimed as a credit against the holder’s U.S. federal income tax liability, provided that the required information is properly furnished to the IRS in a timely manner.

In addition, certain U.S. Holders who are individuals that hold certain foreign financial assets (which may include shares of common stock or ADSs) are required to report information relating to such assets, subject to certain exceptions. U.S. Holders should consult their tax advisors regarding the effect, if any, of this legislation on their ownership and disposition of shares of common stock or ADSs.

THE SUMMARY OF U.S. FEDERAL INCOME AND JAPANESE NATIONAL TAX CONSEQUENCES SET OUT ABOVE IS INTENDED FOR GENERAL INFORMATION PURPOSES ONLY. PROSPECTIVE PURCHASERS OF COMMON STOCK OR ADSs ARE URGED TO CONSULT WITH THEIR OWN TAX ADVISORS WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF OWNING OR DISPOSING OF COMMON STOCK OR ADSs, BASED ON THEIR PARTICULAR CIRCUMSTANCES.

10.F DIVIDENDS AND PAYING AGENTS

Not applicable.

10.G STATEMENT BY EXPERTS

Not applicable.

10.H DOCUMENTS ON DISPLAY

Toyota files annual reports on Form 20-F and reports on Form 6-K with the SEC. You may read and copy this information at the SEC’s Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549 or by accessing the SEC’s home page (http://www.sec.gov). You can also request copies of the documents, upon payment of a duplicating fee, by writing to the Public Reference Section of the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room. In addition, Toyota’s reports, proxy statements and other information may be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005. Copies of the documents referred to herein may also be inspected at Toyota’s offices by contacting Toyota at 1 Toyota-cho, Toyota City, Aichi Prefecture 471-8571, Japan, attention: Financial Reporting Department, Accounting Division, telephone number: 81-565-28-2121.

10.I SUBSIDIARY INFORMATION

Not applicable.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Quantitative and Qualitative Disclosures about Market Risk

Toyota is exposed to market risk from changes in foreign currency exchange rates, interest rates, certain commodity and equity security prices. In order to manage the risk arising from changes in foreign currency exchange rates and interest rates, Toyota enters into a variety of derivative financial instruments.

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A description of Toyota’s accounting policies for derivative instruments is included in note 2 to the consolidated financial statements and further disclosure is provided in notes 21 and 27 to the consolidated financial statements.

Toyota monitors and manages these financial exposures as an integral part of its overall risk management program, which recognizes the unpredictability of financial markets, and seeks to reduce the potentially adverse effects on Toyota’s operating results.

The financial instruments included in the market risk analysis consist of all of Toyota’s cash and cash equivalents, marketable securities, finance receivables, securities investments, long-term and short-term debt and all derivative financial instruments. Toyota’s portfolio of derivative financial instruments consists of forward foreign currency exchange contracts, foreign currency options, interest rate swaps, interest rate currency swap agreements and interest rate options. Anticipated transactions denominated in foreign currencies that are covered by Toyota’s derivative hedging are not included in the market risk analysis. Although operating leases are not required to be included, Toyota has included these instruments in determining interest rate risk.

Foreign Currency Exchange Rate Risk

Toyota has foreign currency exposures related to buying, selling and financing in currencies other than the local currencies in which it operates. Toyota is exposed to foreign currency risk related to future earnings or assets and liabilities that are exposed due to operating cash flows and various financial instruments that are denominated in foreign currencies. Toyota’s most significant foreign currency exposures relate to the U.S. dollar and the euro.

Toyota uses a value-at-risk analysis (“VAR”) to evaluate its exposure to changes in foreign currency exchange rates. The VAR of the combined foreign exchange position represents a potential loss in pre-tax earnings that was estimated to be ¥183.6 billion and ¥206.9 billion as of March 31, 2017 and 2018, respectively. Based on Toyota’s overall currency exposure (including derivative positions), the risk during fiscal 2018 to pre-tax cash flow from currency movements was on average ¥210.8 billion, with a high of ¥214.6 billion and a low of ¥206.9 billion.

The VAR was estimated by using a Monte Carlo Simulation Method and assumed 95% confidence level on the realization date and a 10-day holding period.

Interest Rate Risk

Toyota is subject to market risk from exposures to changes in interest rates based on its financing, investing and cash management activities. Toyota enters into various financial instrument transactions to maintain the desired level of exposure to the risk of interest rate fluctuations and to minimize interest expense. The potential decrease in fair value resulting from a hypothetical 100 basis point upward shift in interest rates would be approximately ¥240.9 billion as of March 31, 2017 and ¥251.2 billion as of March 31, 2018.

There are certain shortcomings inherent to the sensitivity analyses presented. The model assumes that interest rate changes are instantaneous parallel shifts in the yield curve. However, in reality, changes are rarely instantaneous. Although certain assets and liabilities may have similar maturities or periods to repricing, they may not react correspondingly to changes in market interest rates. Also, the interest rates on certain types of assets and liabilities may fluctuate with changes in market interest rates, while interest rates on other types of assets may lag behind changes in market rates. Finance receivables are less susceptible to prepayments when interest rates change and, as a result, Toyota’s model does not address prepayment risk for automotive related finance receivables. However, in the event of a change in interest rates, actual loan prepayments may deviate significantly from the assumptions used in the model.

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Commodity Price Risk

Commodity price risk is the possibility of higher or lower costs due to changes in the prices of commodities, such as non-ferrous alloys (e.g., aluminum), precious metals (e.g., palladium, platinum and rhodium) and ferrous alloys, which Toyota uses in the production of motor vehicles. Toyota does not use derivative instruments to hedge the price risk associated with the purchase of those commodities and controls its commodity price risk by holding minimum stock levels.

Equity Price Risk

Toyota holds investments in various available-for-sale equity securities that are subject to price risk. The fair value of available-for-sale equity securities was ¥2,686.9 billion as of March 31, 2017 and ¥2,582.1 billion as of March 31, 2018. The potential change in the fair value of these investments, assuming a 10% change in prices, would be approximately ¥268.6 billion as of March 31, 2017 and ¥258.2 billion as of March 31, 2018.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

12.A DEBT SECURITIES

Not applicable.

12.B WARRANTS AND RIGHTS

Not applicable.

12.C OTHER SECURITIES

Not applicable.

12.D AMERICAN DEPOSITARY SHARES

Fees and Charges for Holders of American Depositary Receipts

The Bank of New York Mellon, as Depositary for the ADSs, collects its fees for delivery and surrender of ADSs directly from investors depositing shares or surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The Depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The Depositary may generally refuse to provide fee-attracting services until its fees for those services are paid.

Persons depositing or withdrawing shares must pay:	For:
$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)	•  Issuance of ADSs, including issuances resulting from a distribution, sale or exercise of shares or rights or other property •  Cancellation of ADSs for the purpose of withdrawal including if the deposit agreement terminates
$0.02 (or less) per ADS	•  Any cash distribution to ADS registered holders
A fee equivalent to the fee that would be payable if securities distributed to the ADR holder had been shares and the shares had been deposited for issuance of ADSs	•  Distribution of securities distributed to holders of deposited securities which are distributed by the Depositary to ADS registered holders

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Persons depositing or withdrawing shares must pay:	For:
Registration fees	•  Registration of transfer of shares on Toyota’s share register to the name of the Depositary or its nominee or the custodian or its nominee when shares are deposited or withdrawn
Expenses of the Depositary	•  Cable, telex and facsimile transmissions (when expressly provided in the deposit agreement) •  Converting foreign currency to U.S. dollars
Taxes and other governmental charges the Depositary or the custodian have to pay on any ADS or share underlying an ADS	•  As necessary

Fees Incurred in Fiscal 2018

For fiscal 2018, Toyota received $822,582.54 from the Depositary for standard out-of-pocket maintenance costs for the ADRs (consisting of the expenses of postage and envelopes for mailing annual reports, printing and distributing dividend checks, stationery, postage, facsimile, and telephone calls), expenses relating to Toyota’s annual general shareholders’ meeting that are incurred with respect to Toyota’s ADR holders and 50% of the net dividend fees collected by the Depositary. The Depositary also paid Toyota’s continuing annual stock exchange listing fees.

Fees to be Paid in the Future

With regards to the ADS program, the Depositary has agreed to pay the standard out-of-pocket maintenance costs for the ADRs, which includes the expenses of postage and envelopes for mailing annual reports, printing and distributing dividend checks, stationery, postage, facsimile and telephone calls. It has also agreed to pay for investor relations expenses and any other program related expenses. The limit on the amount of expenses for which the Depositary will pay is the sum of $300,000 annually. In addition, the Depositary has agreed to pay Toyota 50% of the net dividend fees collected by the Depositary during each annual period towards the aforementioned expenses.

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PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

None.

ITEM 15. CONTROLS AND PROCEDURES

(a) DISCLOSURE CONTROLS AND PROCEDURES

Toyota performed an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures as of the end of fiscal 2018. Disclosure controls and procedures are designed to ensure that information required to be disclosed in the Form 20-F that Toyota files under the Exchange Act is accumulated and communicated to its management, including the chief executive officer and the principal accounting and financial officer, to allow timely decisions regarding required disclosure. The disclosure controls and procedures also ensure that the Form 20-F that it files under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms. The evaluation was performed under the supervision of Toyota’s President and the Executive Vice President, both Representative Directors. Toyota’s disclosure controls and procedures are designed to provide reasonable assurance of achieving its objectives. Managerial judgment was necessary to evaluate the cost-benefit relationship of possible controls and procedures. The President and the Executive Vice President, both Representative Directors, have concluded that Toyota’s disclosure controls and procedures are effective at the reasonable assurance level.

(b) MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Toyota’s management is responsible for establishing and maintaining effective internal control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Toyota’s internal control over financial reporting includes those policies and procedures that:

(i) pertain to the maintenance of records that in reasonable detail, accurately and fairly reflect the transactions and dispositions of Toyota’s assets;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that Toyota’s receipts and expenditures are being made only in accordance with authorizations of Toyota’s management and members of the board of directors; and

(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of Toyota’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Toyota’s management conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in “Internal Control — Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission.

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Based on this evaluation, management concluded that Toyota’s internal control over financial reporting was effective as of March 31, 2018.

PricewaterhouseCoopers Aarata LLC, an independent registered public accounting firm that audited the consolidated financial statements included in this report, has also audited the effectiveness of Toyota’s internal control over financial reporting as of March 31, 2018, as stated in its report included herein.

(c) ATTESTATION REPORT OF THE REGISTERED PUBLIC ACCOUNTING FIRM

Toyota’s independent registered public accounting firm, PricewaterhouseCoopers Aarata LLC, has issued an audit report on the effectiveness of Toyota’s internal control over financial reporting. This report appears in Item 18.

(d) CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There have been no changes in Toyota’s internal control over financial reporting during fiscal 2018 that have materially affected, or are reasonably likely to materially affect, Toyota’s internal control over financial reporting.

ITEM  16. [RESERVED]

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

Toyota maintains an audit & supervisory board system, in accordance with the Companies Act. Toyota’s audit & supervisory board is comprised of six audit & supervisory board members, three of whom are outside audit & supervisory board members. Each audit & supervisory board member has been appointed at Toyota’s meetings of shareholders and has certain statutory powers independently, including auditing the business affairs and accounts of Toyota.

Toyota’s audit & supervisory board has determined that it does not have an “audit committee financial expert” serving on the audit & supervisory board. The qualifications for, and powers of, the audit & supervisory board member delineated in the Companies Act are different from those anticipated for any audit committee financial expert. Audit & supervisory board members have the authority to be given reports from a certified public accountant or an accounting firm concerning audits, including technical accounting matters. At the same time, each audit & supervisory board member has the authority to consult internal and external experts on accounting matters. Each audit & supervisory board member must fulfill the requirements under Japanese laws and regulations and otherwise follow Japanese corporate governance practices and, accordingly, Toyota’s audit & supervisory board has confirmed that it is not necessarily in Toyota’s best interest to nominate as audit & supervisory board member a person who meets the definition of audit committee financial expert. Although Toyota does not have an audit committee financial expert on its audit & supervisory board, Toyota believes that Toyota’s current corporate governance system, taken as a whole, including the audit & supervisory board members’ ability to consult internal and external experts, is fully equivalent to a system having an audit committee financial expert on its audit & supervisory board.

ITEM 16B. CODE OF ETHICS

Toyota has adopted a code of ethics that applies to its members of the board of directors and managing officers, including its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A copy of Toyota’s code of ethics is included as an exhibit to this annual report on Form 20-F.

ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

PricewaterhouseCoopers Aarata LLC has audited the financial statements of Toyota included in this annual report on Form 20-F.

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The following table presents the aggregate fees for professional services and other services rendered by PricewaterhouseCoopers Aarata LLC and the various network and member firms of PricewaterhouseCoopers to Toyota in fiscal 2017 and fiscal 2018.

	Yen in millions
	2017		2018
Audit Fees(1)		4,279		4,645
Audit-related Fees(2)		90		85
Tax Fees(3)		477		449
All Other Fees(4)		293		316
Total		5,139		5,495

(1) Audit Fees consist of fees billed for the annual audit services engagement and other audit services, which are those services that only the external auditor reasonably can provide, and include the services of annual audit, quarterly reviews and assessment and reviews of the effectiveness of internal controls over financial reporting of Toyota and its subsidiaries and affiliated companies; the services associated with SEC registration statements or other documents issued in connection with securities offerings such as comfort letters and consents; and consultations as to the accounting or disclosure treatment of transactions or events.

(2) Audit-related Fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of its financial statements or that are traditionally performed by the external auditor, and mainly include services such as due diligence; agreed-upon or expanded audit procedures; internal control reviews and assistance; review of the information system; and financial statement audits of employee benefit plans.

(3) Tax Fees include fees billed for tax compliance services, including services such as tax planning, advice and compliance of federal, state, local and international tax; the review of tax returns; assistance with tax audits and appeals; tax-only valuation services including transfer pricing and cost segregation studies; expatriate tax assistance and compliance.

(4) All Other Fees primarily include fees billed for risk management advisory services of assessment and testing of security infrastructure controls; services providing information related to automotive market conditions; IT advisory services; and other advisory services.

Policies and Procedures of the Audit & Supervisory Board

Below is a summary of the current policies and procedures of the audit & supervisory board for the pre-approval of audit and permissible non-audit services performed by Toyota’s independent public accountants.

Under the policy, the Representative Directors submit a request for general pre-approval of audit and permissible non-audit services for the following fiscal year, which shall include details of the specific services and estimated fees for the services, to the audit & supervisory board, which reviews and determines whether or not to grant the request by the end of March of the fiscal year. Upon the general pre-approval of the audit & supervisory board, the Representative Directors are not required to obtain any specific pre-approval for audit and permissible non-audit services so long as those services fall within the scope of the general pre-approval provided.

The audit & supervisory board makes a further determination of whether or not to grant a request to revise the general pre-approval for the applicable fiscal year if such request is submitted by the Representative Directors. Such request may include (i) adding any audit or permissible non-audit services other than the ones listed in the general pre-approval and (ii) obtaining services that are listed in the general pre-approval but of which the total fee amount exceeds the amount affirmed by the general pre-approval. The determination of whether or not to grant a request to revise the general pre-approval noted in the foregoing may alternatively be

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made by an audit & supervisory board member (full time), who is designated in advance by a resolution of the audit & supervisory board, in which case such audit & supervisory board member (full time) shall report such decision at the next meeting of the audit & supervisory board. The performance of audit and permissible non-audit services and the payment of fees are subject to review by the audit & supervisory board at least once every fiscal half year.

None of the audit related fees, tax fees or all other fees described in the table above were approved by the audit & supervisory board pursuant to the de minimis exception provided by paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Toyota does not have an audit committee. Toyota is relying on the general exemption contained in Rule 10A-3(c)(3) under the Exchange Act, which provides an exemption from the NYSE’s listing standards relating to audit committees for foreign companies like Toyota that have an audit & supervisory board. Toyota’s reliance on Rule 10A-3(c)(3) does not, in its opinion, materially adversely affect the ability of its audit & supervisory board to act independently and to satisfy the other requirements of Rule 10A-3.

ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

The following table sets forth purchases of Toyota’s common stock by Toyota and its affiliated purchasers during fiscal 2018:

Period	(a) Total Number of Shares Purchased(1)		(b) Average Price Paid per Share (Yen)(1)		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2)		(d) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs(2)
April 1, 2017 – April 30, 2017		922		5,896.74		—		—
May 1, 2017 – May 31, 2017		1,120		6,061.75		—		—
June 1, 2017 – June 30, 2017		1,484		5,853.15		—		—
July 1, 2017 – July 31, 2017		21,625,247		6,155.24		21,623,700		—
August 1, 2017 – August 31, 2017		18,714,178		6,246.63		18,711,800		—
September 1, 2017 – September 30, 2017		2,296		6,517.56		—		—
October 1, 2017 – October 31, 2017		3,973		6,921.19		—		—
November 1, 2017 – November 30, 2017		3,635		7,089.97		—		—
December 1, 2017 – December 31, 2017		4,843,895		7,230.12		4,840,500		—
January 1, 2018– January 31, 2018		14,537,271		7,637.48		14,533,700		—
February 1, 2018 – February 28, 2018		14,000,289		7,428.23		13,998,700		—
March 1, 2018 – March 31, 2018		1,654		6,933.76		—		—
Total		73,735,964				73,708,400		—

(1) A portion of the above purchases were made as a result of holders of shares constituting less than one unit, which is 100 shares of common stock, requesting Toyota to purchase shares that are a fraction of a unit, in accordance with Toyota’s share handling regulations. Toyota is required to comply with such requests pursuant to the Companies Act. See “Additional Information — Memorandum and Articles of Association — Japanese Unit Share System.” The number of shares purchased not pursuant to publicly announced plans or programs conducted in fiscal 2018 is 27,564.

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(2) Toyota announced on May 10, 2017, that it would repurchase up to 50 million common shares between May 17, 2017 and August 31, 2017 at a total price up to ¥250 billion, in order to return to shareholders the profits derived in the fiscal year ended March 31, 2017. Toyota also announced on November 7, 2017 that it would repurchase up to 45 million common shares between November 14, 2017 and March 30, 2018 at a total price up to ¥250 billion in order to return to shareholders the profits derived in the interim period ended September 30, 2017.

ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

Not applicable.

ITEM 16G. CORPORATE GOVERNANCE

Significant Differences in Corporate Governance Practices between Toyota and U.S. Companies Listed on the NYSE

Pursuant to home country practices exemptions granted by the NYSE, Toyota is permitted to follow certain corporate governance practices complying with Japanese laws, regulations and stock exchange rules in lieu of the NYSE’s listing standards. The SEC approved changes to the NYSE’s listing standards related to corporate governance practices of listed companies (the “NYSE Corporate Governance Rules”) in November 2003, as further amended in November 2004. Toyota is exempt from the approved changes, except for requirements that (a) Toyota’s audit & supervisory board satisfies the requirements of Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (b) Toyota must disclose significant differences in its corporate governance practices as compared to those followed by domestic companies under the NYSE listing standards, (c) Toyota’s principal executive officer must notify the NYSE in writing after any executive officer of Toyota becomes aware of any non-compliance with (a) and (b), and (d) Toyota must submit annual and interim written affirmations to the NYSE. Toyota’s corporate governance practices and those followed by domestic companies under the NYSE Corporate Governance Rules have the following significant differences:

1. Members of the Board of Directors. Toyota currently does not have any members of the board of directors who will be deemed an “independent director” as required under the NYSE Corporate Governance Rules for U.S. listed companies. Unlike the NYSE Corporate Governance Rules, the Companies Act does not require Japanese companies with an audit & supervisory board such as Toyota to have any independent directors on its board of directors. While the NYSE Corporate Governance Rules require that the non-management directors of each listed company meet at regularly scheduled executive sessions without management, Toyota currently has no non-management member on its board of directors. Unlike the NYSE Corporate Governance Rules, the Companies Act does not require, and accordingly Toyota does not have, an internal corporate organ or committee comprised solely of independent directors.

Toyota currently has three outside members of the board of directors under the Companies Act. An “outside” member of the board of directors refers to:

(a) a person who is not, and has never been during the 10 year period before becoming an outside member of the board of directors, an executive director (a member of the board of directors who engages in the execution of business), executive officer, manager or employee (collectively, “Executive Director, etc.”) of Toyota or its subsidiaries;

(b) if a person was a member of the board of directors, accounting counselor (in the case that an accounting counselor is a legal entity, an employee of such entity who is in charge of its affairs) or audit & supervisory board member (excluding those who have ever been Executive Directors, etc.) of Toyota or any of its subsidiaries at any time during the 10 year period before becoming an outside member of the board of directors, such person who has not been an Executive Director, etc. of Toyota or any of its subsidiaries during the 10 year period before becoming a member of the board of directors, accounting counselor or audit & supervisory board member; and

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(c) a person who is not a spouse or relative within the second degree of kinship of any member of the board of directors or manager or other key employee of Toyota.

Such qualifications for an “outside” member of the board of directors are different from the director independence requirements under the NYSE Corporate Governance Rules.

In addition, pursuant to the regulations of the Japanese stock exchanges, Toyota is required to have one or more “independent director(s)/audit & supervisory board member(s),” defined under the relevant regulations of the Japanese stock exchanges as “outside directors” or “outside audit & supervisory board members” (as defined under the Companies Act), who are unlikely to have any conflicts of interests with Toyota’s general shareholders, and is also required to make efforts to have at least one “independent director(s)/audit & supervisory board member(s)” who is also a director. Each of the outside members of the board of directors of Toyota satisfies the “independent director/audit & supervisory board member” requirements under the regulations of the Japanese stock exchanges. Japan’s Corporate Governance Code provides that companies should appoint at least two “independent outside directors” as defined based on the criteria for assessing director independence established by Toyota in line with the independence standards of the Japanese stock exchanges. The content of the criteria for assessing director independence established by Toyota is the same as that of the independence standards of the Japanese stock exchanges, and each of the outside members of the board of directors of Toyota satisfies the “independent outside director” requirements under such independence standards. The definition of “independent director/audit & supervisory board member” and “independent outside director” is different from that of the definition of independent director under the NYSE Corporate Governance Rules.

2. Committees. Under the Companies Act, Toyota has elected to structure its corporate governance system as a company with audit & supervisory board members who are under a statutory duty to monitor, review and report on the management of the affairs of Toyota. Toyota, as with other Japanese companies with an audit & supervisory board, does not have certain committees that are required of U.S. listed companies subject to the NYSE Corporate Governance Rules, including those that are responsible for director nomination, corporate governance and executive compensation. However, members of Toyota’s “Executive Appointment Meeting” and “Executive Compensation Meeting,” half of whom in each meeting are outside directors, discuss recommendations to the board of directors concerning nominees and remuneration for members of the board of directors, respectively.

Pursuant to the Companies Act, Toyota’s board of directors nominates and submits a proposal for the appointment of members of the board of directors for shareholder approval. The shareholders vote on such nomination at the general shareholders’ meeting. The Companies Act requires that the limits or calculation formula and kind (in case that the remuneration, bonus and any other benefits in compensation for the execution of duties (“remuneration, etc.”) are to be paid in other than cash) of remuneration, etc. to be paid to directors as well as limits of remuneration, etc. to be paid to audit & supervisory board members must be determined by a resolution of the general shareholders’ meeting, unless their remuneration, etc. is provided for in the articles of incorporation. The distribution of remuneration, etc. among each member of the board of directors is broadly delegated to the board of directors and the distribution of remuneration among each audit & supervisory board member is determined by consultation among the audit & supervisory board members.

3. Audit Committee. Toyota avails itself of paragraph (c)(3) of Rule 10A-3 of the Exchange Act, which provides a general exemption from the audit committee requirements to a foreign private issuer with an audit & supervisory board, subject to certain requirements which continue to be applicable under Rule 10A-3.

Pursuant to the requirements of the Companies Act, Toyota elects its audit & supervisory board members through a resolution adopted at a general shareholders’ meeting. Toyota currently has six audit & supervisory board members, which exceeds the minimum number of audit & supervisory board members required pursuant to the Companies Act.

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Unlike the NYSE Corporate Governance Rules, the Companies Act, among others, does not require audit & supervisory board members to establish an expertise in accounting or financial management nor are they required to present other special knowledge and experience. Therefore, none of Toyota’s audit & supervisory board members has “an expertise in accounting or financial management” as set forth in the NYSE Corporate Governance Rules. The Japanese Corporate Governance Code indicates that persons with appropriate experience and skills as well as necessary knowledge of finance, accounting, and laws should be appointed as audit & supervisory board members, and in particular, one or more audit & supervisory board members who have sufficient knowledge of finance and accounting matters should be appointed. Toyota has appointed persons who are able to provide opinions and advice regarding management based on their broader experience and discretion beyond finance and accounting. Under the Companies Act, the audit & supervisory board may determine the auditing policies and methods of investigating the conditions of Toyota’s business and assets, and may resolve other matters concerning the execution of the audit & supervisory board member’s duties. The audit & supervisory board also prepares auditors’ reports, gives consent to proposals of the nomination of audit & supervisory board members and makes decisions concerning proposals relating to the appointment and dismissal of accounting auditors.

Toyota currently has three outside audit & supervisory board members under the Companies Act. Under the Companies Act, at least half of the audit & supervisory board members must be an “outside” audit & supervisory board member, which is any person who satisfies all of the following requirements:

(a) the person has never been a member of the board of directors, accounting counselor (in the case that an accounting counselor is a legal entity, an employee of such entity who is in charge of its affairs), executive officer, manager or employee of Toyota or its subsidiaries during the 10 year period before becoming an outside audit & supervisory board member;

(b) if the person was an audit & supervisory board member of Toyota or any of its subsidiaries at any time during the 10 year period before becoming an outside audit & supervisory board member, such person has not been a member of the board of directors, accounting counselor (in the case that an accounting counselor is a legal entity, an employee of such entity who is in charge of its affairs), executive officer, manager or employee of Toyota or any of its subsidiaries during the 10 year period before becoming an audit & supervisory board member of Toyota or any of its subsidiaries; and

(c) the person is not a spouse or relative within the second degree of kinship of any member of the board of directors or manager or other key employee of Toyota.

Such qualifications for an “outside” audit & supervisory board member are different from the audit committee independence requirement under the NYSE Corporate Governance Rules.

Each of the outside audit & supervisory board members of Toyota satisfies the “independent director/audit & supervisory board member” requirements under the regulations of the Japanese stock exchanges, as described above in “1. Members of the Board of Directors.”

4. Corporate Governance Guidelines. Unlike the NYSE Corporate Governance Rules, Toyota is not required to adopt Japan’s Corporate Governance Code under Japanese laws and regulations, including the Companies Act, the Financial Instruments and Exchange Law of Japan and stock exchange rules. However, if Toyota does not comply with Japan’s Corporate Governance Code, it is required to explain the reasons why it does not do so in accordance with the regulations of the Japanese stock exchanges. In addition, Toyota is required to resolve at the board of directors matters relating to a system, which is required under the ordinance of the Ministry of Justice (“internal control system” or “naibu-tosei“), to ensure the execution of duties of the members of the board of directors to comply with laws, regulations and articles of incorporation, and any other systems to ensure the adequacy of the business, and to disclose such matters resolved, policies and the present status of its corporate governance in its business reports, annual securities report and certain other disclosure documents in accordance with the regulations under the Financial Instruments and Exchange Law and stock exchange rules in respect of timely disclosure.

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5. Code of Business Conduct and Ethics. Similar to the NYSE Corporate Governance Rules, under Japan’s Corporate Governance Code, Toyota is encouraged to adopt a code of conduct regarding ethical business activities for members of the board of directors, officers and employees. Toyota has resolved matters relating to maintenance of an “internal control system,” or “naibu-tosei,“ in order to ensure its employees comply with laws, regulations and the articles of incorporation, etc. pursuant to the Companies Act, and Toyota maintains guidelines and internal regulations such as “Guiding Principles at Toyota,” “Toyota Code of Conduct” and a code of ethics pursuant to Section 406 of the Sarbanes-Oxley Act. Please see “Code of Ethics” for additional information.

ITEM 16H. MINE SAFETY DISCLOSURE

Not applicable.

134

PART III

ITEM 17. FINANCIAL STATEMENTS

Not applicable.

ITEM 18. FINANCIAL STATEMENTS

The following financial statements are filed as part of this annual report on Form 20-F.

135

TOYOTA MOTOR CORPORATION

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm		F-2
Consolidated balance sheets at March 31, 2017 and 2018		F-3
Consolidated statements of income for the years ended March  31, 2016, 2017 and 2018		F-5
Consolidated statements of comprehensive income for the years ended March 31, 2016, 2017 and 2018		F-6
Consolidated statements of shareholders’ equity for the years ended March 31, 2016, 2017 and 2018		F-7
Consolidated statements of cash flows for the years ended March  31, 2016, 2017 and 2018		F-9
Notes to consolidated financial statements		F-10

All financial statements schedules are omitted because they are not applicable or the required information is shown in the financial statements or the notes thereto.

Financial statements of 50% or less owned persons accounted for by the equity method have been omitted because the registrant’s proportionate share of the income from continuing operations before income taxes is less than 20% of consolidated income from continuing operations before income taxes and the investment in and advances to each company is less than 20% of consolidated total assets.

F-1

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of

Toyota Jidosha Kabushiki Kaisha

(“Toyota Motor Corporation”)

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Toyota Motor Corporation and its subsidiaries (collectively referred to as the “Company”) as of March 31, 2017 and 2018, and the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended March 31, 2018, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of March 31, 2018, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of March 31, 2017 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended March 31, 2018 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, 2018, based on criteria established in Internal Control—Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control Over Financial Reporting appearing under Item 15(b). Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ PricewaterhouseCoopers Aarata LLC

Nagoya, Japan

June 25, 2018

We have served as the Company’s auditor since 2006.

F-2

TOYOTA MOTOR CORPORATION

CONSOLIDATED BALANCE SHEETS

	Yen in millions
	March 31,
	2017			2018
Assets
Current assets
Cash and cash equivalents		2,995,075			3,052,269
Time deposits		1,082,654			901,244
Marketable securities		1,821,598			1,768,360
Trade accounts and notes receivable, less allowance for doubtful accounts of ¥50,110 million in 2017 and ¥25,925 million in 2018		2,115,938			2,219,562
Finance receivables, net		6,196,649			6,348,306
Other receivables		436,867			489,338
Inventories		2,388,617			2,539,789
Prepaid expenses and other current assets		796,297			833,788
Total current assets		17,833,695			18,152,656
Noncurrent finance receivables, net		9,012,222			9,481,618
Investments and other assets
Marketable securities and other securities investments		7,679,928			7,999,323
Affiliated companies		2,845,639			3,162,917
Employees receivables		25,187			22,562
Other		1,156,406			1,221,500
Total investments and other assets		11,707,160			12,406,302
Property, plant and equipment
Land		1,379,991			1,404,611
Buildings		4,470,996			4,659,753
Machinery and equipment		11,357,340			11,535,381
Vehicles and equipment on operating leases		5,966,579			5,934,393
Construction in progress		474,188			509,851
Total property, plant and equipment, at cost		23,649,094			24,043,989
Less - Accumulated depreciation		(13,451,985	)		(13,776,316	)
Total property, plant and equipment, net		10,197,109			10,267,673
Total assets		48,750,186			50,308,249

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

F-3

TOYOTA MOTOR CORPORATION

CONSOLIDATED BALANCE SHEETS

	Yen in millions
	March 31,
	2017			2018
Liabilities
Current liabilities
Short-term borrowings		4,953,682			5,154,913
Current portion of long-term debt		4,290,449			4,186,277
Accounts payable		2,566,382			2,586,657
Other payables		936,938			1,048,216
Accrued expenses		3,137,827			3,104,260
Income taxes payable		223,574			462,327
Other current liabilities		1,210,113			1,254,241
Total current liabilities		17,318,965			17,796,891
Long-term liabilities
Long-term debt		9,911,596			10,006,374
Accrued pension and severance costs		905,070			931,182
Deferred income taxes		1,423,726			1,118,165
Other long-term liabilities		521,876			533,561
Total long-term liabilities		12,762,268			12,589,282
Total liabilities		30,081,233			30,386,173
Mezzanine equity
Model AA Class Shares, no par value,		485,877			491,974
authorized: 150,000,000 shares in 2017 and 2018; issued: 47,100,000 shares in 2017 and 2018
Shareholders’ equity
Toyota Motor Corporation shareholders’ equity
Common stock, no par value, authorized: 10,000,000,000 shares in 2017 and 2018; issued: 3,262,997,492 shares in 2017 and 2018		397,050			397,050
Additional paid-in capital		484,013			487,502
Retained earnings		17,601,070			19,473,464
Accumulated other comprehensive income (loss)		640,922			435,699
Treasury stock, at cost, 288,274,636 shares in 2017 and 353,073,500 shares in 2018		(1,608,243	)		(2,057,733	)
Total Toyota Motor Corporation shareholders’ equity		17,514,812			18,735,982
Noncontrolling interests		668,264			694,120
Total shareholders’ equity		18,183,076			19,430,102
Commitments and contingencies
Total liabilities, mezzanine equity and shareholders’ equity		48,750,186			50,308,249

Note: The total number of authorized shares for common stock and Model AA Class Shares is 10,000,000,000 shares.

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

F-4

TOYOTA MOTOR CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

	Yen in millions
	For the years ended March 31,
	2016			2017			2018
Net revenues
Sales of products		26,549,111			25,813,496			27,420,276
Financing operations		1,854,007			1,783,697			1,959,234
Total net revenues		28,403,118			27,597,193			29,379,510
Costs and expenses
Cost of products sold		21,456,086			21,543,035			22,600,474
Cost of financing operations		1,149,379			1,191,301			1,288,679
Selling, general and administrative		2,943,682			2,868,485			3,090,495
Total costs and expenses		25,549,147			25,602,821			26,979,648
Operating income		2,853,971			1,994,372			2,399,862
Other income (expense)
Interest and dividend income		157,862			158,983			179,541
Interest expense		(35,403	)		(29,353	)		(27,586	)
Foreign exchange gain (loss), net		(5,573	)		33,601			22,664
Other income (loss), net		12,524			36,222			45,948
Total other income (expense)		129,410			199,453			220,567
Income before income taxes and equity in earnings of affiliated companies		2,983,381			2,193,825			2,620,429
Provision for income taxes		878,269			628,900			504,406
Equity in earnings of affiliated companies		329,099			362,060			470,083
Net income		2,434,211			1,926,985			2,586,106
Less - Net income attributable to noncontrolling interests		(121,517	)		(95,876	)		(92,123	)
Net income attributable to Toyota Motor Corporation		2,312,694			1,831,109			2,493,983
Note: Net income attributable to common shareholders for the fiscal year ended March 31, 2018 and 2017 is 2,481,692 million yen and 1,821,314 million yen, respectively, which is derived by deducting dividend and accretion to Model AA Class Shares of 12,291 million yen and 9,795 million yen, respectively, from Net income attributable to Toyota Motor Corporation.
	Yen
Net income attributable to Toyota Motor Corporation per common share
- Basic		741.36			605.47			842.00
- Diluted		735.36			599.22			832.78
Cash dividends per common share		210.00			210.00			220.00

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

F-5

TOYOTA MOTOR CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Yen in millions
	For the years ended March 31,
	2016			2017			2018
Net income		2,434,211			1,926,985			2,586,106
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments		(395,352	)		(57,926	)		(120,606	)
Unrealized gains (losses) on securities		(312,192	)		4,279			(94,559	)
Pension liability adjustments		(209,181	)		93,312			22,315
Total other comprehensive income (loss)		(916,725	)		39,665			(192,850	)
Comprehensive income		1,517,486			1,966,650			2,393,256
Less - Comprehensive income attributable to noncontrolling interests		(71,569	)		(103,161	)		(93,096	)
Comprehensive income attributable to Toyota Motor Corporation		1,445,917			1,863,489			2,300,160

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

F-6

TOYOTA MOTOR CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

	Yen in millions
	Common stock		Additional paid-in capital			Retained earnings			Accumulated other comprehensive income (loss)			Treasury stock, at cost			Total Toyota Motor Corporation shareholders’ equity			Noncontrolling interests			Total shareholders’ equity
Balances at March 31, 2015		397,050		547,054			15,591,947			1,477,545			(1,225,465	)		16,788,131			859,198			17,647,329
Equity transaction with noncontrolling interests and other				1,972			(97	)								1,875			3,834			5,709
Comprehensive income
Net income							2,312,694									2,312,694			121,517			2,434,211
Other comprehensive income (loss)
Foreign currency translation adjustments										(362,965	)					(362,965	)		(32,387	)		(395,352	)
Unrealized gains (losses) on securities										(302,620	)					(302,620	)		(9,572	)		(312,192	)
Pension liability adjustments										(201,192	)					(201,192	)		(7,989	)		(209,181	)
Total comprehensive income																1,445,917			71,569			1,517,486
Accretion to Mezzanine equity							(3,638	)								(3,638	)					(3,638	)
Dividends to Toyota Motor Corporation class shareholders							(2,449	)								(2,449	)					(2,449	)
Dividends paid to Toyota Motor Corporation common shareholders							(704,728	)								(704,728	)					(704,728	)
Dividends paid to noncontrolling interests																			(73,129	)		(73,129	)
Repurchase of treasury stock													(782,871	)		(782,871	)					(782,871	)
Reissuance of treasury stock				183									4,515			4,698						4,698
Retirement of treasury stock				(1,048	)		(399,489	)					400,537			—						—
Balances at March 31, 2016		397,050		548,161			16,794,240			610,768			(1,603,284	)		16,746,935			861,472			17,608,407
Equity transaction with noncontrolling interests and other				(35,555	)					(2,226	)		283,561			245,780			(232,433	)		13,347
Comprehensive income
Net income							1,831,109									1,831,109			95,876			1,926,985
Other comprehensive income (loss)
Foreign currency translation adjustments										(52,427	)					(52,427	)		(5,499	)		(57,926	)
Unrealized gains (losses) on securities										(8,002	)					(8,002	)		12,281			4,279
Pension liability adjustments										92,809						92,809			503			93,312
Total comprehensive income																1,863,489			103,161			1,966,650
Accretion to Mezzanine equity							(4,849	)								(4,849	)					(4,849	)
Dividends to Toyota Motor Corporation class shareholders							(4,946	)								(4,946	)					(4,946	)
Dividends paid to Toyota Motor Corporation common shareholders							(634,475	)								(634,475	)					(634,475	)
Dividends paid to noncontrolling interests																			(63,936	)		(63,936	)
Repurchase of treasury stock													(700,228	)		(700,228	)					(700,228	)
Reissuance of treasury stock				(1,219	)								4,325			3,106						3,106
Retirement of treasury stock				(27,374	)		(380,009	)					407,383			—						—
Balances at March 31, 2017		397,050		484,013			17,601,070			640,922			(1,608,243	)		17,514,812			668,264			18,183,076

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

F-7

TOYOTA MOTOR CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (CONTINUED)

	Yen in millions
	Common stock		Additional paid-in capital		Retained earnings			Accumulated other comprehensive income (loss)			Treasury stock, at cost			Total Toyota Motor Corporation shareholders’ equity			Noncontrolling interests			Total shareholders’ equity
Balances at March 31, 2017		397,050		484,013		17,601,070			640,922			(1,608,243	)		17,514,812			668,264			18,183,076
Equity transaction with noncontrolling interests and other				1,817		11,400			(11,400	)					1,817			(3,476	)		(1,659	)
Comprehensive income
Net income						2,493,983									2,493,983			92,123			2,586,106
Other comprehensive income (loss)
Foreign currency translation adjustments									(118,977	)					(118,977	)		(1,629	)		(120,606	)
Unrealized gains (losses) on securities									(96,581	)					(96,581	)		2,022			(94,559	)
Pension liability adjustments									21,735						21,735			580			22,315
Total comprehensive income															2,300,160			93,096			2,393,256
Accretion to Mezzanine equity						(4,849	)								(4,849	)					(4,849	)
Dividends to Toyota Motor Corporation class shareholders						(7,442	)								(7,442	)					(7,442	)
Dividends paid to Toyota Motor Corporation common shareholders						(620,698	)								(620,698	)					(620,698	)
Dividends paid to noncontrolling interests																		(63,764	)		(63,764	)
Repurchase of treasury stock												(500,177	)		(500,177	)					(500,177	)
Reissuance of treasury stock				1,672								50,687			52,359						52,359
Balances at March 31, 2018		397,050		487,502		19,473,464			435,699			(2,057,733	)		18,735,982			694,120			19,430,102

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

F-8

TOYOTA MOTOR CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Yen in millions
	For the years ended March 31,
	2016			2017			2018
Cash flows from operating activities
Net income		2,434,211			1,926,985			2,586,106
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		1,625,837			1,610,950			1,734,033
Provision for doubtful accounts and credit losses		159,265			98,666			76,069
Pension and severance costs, less payments		8,833			23,253			4,286
Losses on disposal of fixed assets		33,329			30,673			35,289
Unrealized losses on available-for-sale securities, net		9,272			7,073			846
Deferred income taxes		32,889			(53,299	)		(237,961	)
Equity in earnings of affiliated companies		(329,099	)		(362,060	)		(470,083	)
Changes in operating assets and liabilities, and other
Increase in accounts and notes receivable		(25,180	)		(264,784	)		(105,435	)
Increase in inventories		(68,912	)		(246,326	)		(171,148	)
Increase in other current assets		(200,669	)		(152,116	)		(162,582	)
Increase in accounts payable		120,381			145,957			46,648
Increase (decrease) in accrued income taxes		(5,516	)		(121,032	)		238,753
Increase in other current liabilities		368,923			480,094			211,452
Other		297,293			290,203			423,736
Net cash provided by operating activities		4,460,857			3,414,237			4,210,009
Cash flows from investing activities
Additions to finance receivables		(13,549,278	)		(13,636,694	)		(15,058,516	)
Collection of finance receivables		13,067,700			12,885,944			14,013,204
Proceeds from sales of finance receivables		48,154			42,037			33,108
Additions to fixed assets excluding equipment leased to others		(1,282,545	)		(1,223,878	)		(1,291,117	)
Additions to equipment leased to others		(2,776,671	)		(2,317,559	)		(2,307,590	)
Proceeds from sales of fixed assets excluding equipment leased to others		42,147			41,238			71,820
Proceeds from sales of equipment leased to others		1,111,727			1,238,278			1,211,272
Purchases of marketable securities and security investments		(2,197,477	)		(2,517,008	)		(3,052,916	)
Proceeds from sales of marketable securities and security investments		108,708			260,039			275,574
Proceeds upon maturity of marketable securities and security investments		3,307,107			1,641,502			2,247,964
Payment for additional investments in affiliated companies, net of cash acquired		628			44,274			(576	)
Changes in investments and other assets, and other		(1,062,744	)		571,888			197,681
Net cash used in investing activities		(3,182,544	)		(2,969,939	)		(3,660,092	)
Cash flows from financing activities
Proceeds from issuance of long-term debt		4,845,872			4,603,446			4,793,939
Payments of long-term debt		(4,176,202	)		(3,845,554	)		(4,452,338	)
Increase (decrease) in short-term borrowings		(10,903	)		273,037			347,738
Proceeds from issuance of class shares		474,917			—			—
Dividends paid to Toyota Motor Corporation class shareholders		(1,225	)		(3,697	)		(6,194	)
Dividends paid to Toyota Motor Corporation common shareholders		(704,728	)		(634,475	)		(620,698	)
Dividends paid to noncontrolling interests		(73,129	)		(63,936	)		(63,764	)
Reissuance (repurchase) of treasury stock, and other		(778,173	)		(703,986	)		(447,818	)
Net cash used in financing activities		(423,571	)		(375,165	)		(449,135	)
Effect of exchange rate changes on cash and cash equivalents		(199,871	)		(13,486	)		(43,588	)
Net increase in cash and cash equivalents		654,871			55,647			57,194
Cash and cash equivalents at beginning of year		2,284,557			2,939,428			2,995,075
Cash and cash equivalents at end of year		2,939,428			2,995,075			3,052,269

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

F-9

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Nature of operations:

Toyota and its affiliated companies are primarily engaged in the design, manufacture, and sale of sedans, minivans, compact cars, sport-utility vehicles, trucks and related parts and accessories throughout the world. In addition, Toyota and its affiliated companies provide financing, vehicle and equipment leasing and certain other financial services primarily to its dealers and their customers to support the sales of vehicles and other products manufactured by Toyota and its affiliated companies.

2. Summary of significant accounting policies:

The parent company and its subsidiaries in Japan and its foreign subsidiaries maintain their records and prepare their financial statements in accordance with Japanese generally accepted accounting principles and those of their countries of domicile. Certain adjustments and reclassifications have been incorporated in the accompanying consolidated financial statements to conform to U.S.GAAP.

Significant accounting policies after reflecting adjustments for the above are as follows:

Basis of consolidation and accounting for investments in affiliated companies -

The consolidated financial statements include the accounts of the parent company, its majority-owned subsidiary companies and variable interest entities of which Toyota is the primary beneficiary. 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. Consolidated net income includes Toyota’s equity in current earnings of such companies, after elimination of unrealized intercompany profits. Investments in such companies are reduced to fair value if a decline in market value is determined other-than-temporary. Investments in non-public companies 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 U.S.GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The more significant estimates include: product warranties, liabilities accrued for recalls and other safety measures, allowance for doubtful accounts and credit losses, residual values for leased assets, impairment of long-lived assets, pension costs and obligations, fair value of derivative financial instruments, other-than-temporary losses on marketable securities, litigation liabilities and valuation allowance for deferred tax assets.

Translation of foreign currencies -

All asset and liability accounts of foreign subsidiaries and affiliated companies are translated into Japanese yen at appropriate year-end current exchange rates and all income and expense accounts of those subsidiaries are translated at the average exchange rates for each period. The foreign currency translation adjustments are included as a component of accumulated other comprehensive income.

Foreign currency receivables and payables are translated at appropriate year-end current exchange rates and the resulting transaction gains or losses are recorded in operations currently.

F-10

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Revenue recognition -

Revenues from sales of vehicles and parts are 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 a dealer during a certain period of time. Toyota accrues these incentives as revenue reductions upon the sale of a vehicle corresponding to the program by the amount determined in the related incentive program.

Revenues from the sales of vehicles under which Toyota conditionally guarantees the minimum resale value are recognized on a pro rata basis from the date of sale to the first exercise date of the guarantee in a manner similar to operating lease accounting. The underlying vehicles of these transactions are recorded as assets and are depreciated in accordance with Toyota’s depreciation policy.

Revenues from retail financing contracts and finance leases are recognized using the effective yield method. Revenues from operating leases are recognized on a straight-line basis over the lease term.

The sale of certain vehicles includes a determinable amount for the contract, which entitles customers to free vehicle maintenance. Such revenues from free maintenance contracts are deferred and recognized as revenue over the period of the contract, which approximates the pattern of the related costs.

Other costs -

Advertising and sales promotion costs are expensed as incurred. Advertising costs were ¥489,036 million, ¥448,780 million and ¥509,653 million for the years ended March 31, 2016, 2017 and 2018, 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 the sale and other factors. Toyota records 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 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 of warranty claim recoveries to be received from suppliers.

In addition to product warranties above, Toyota accrues for costs of recalls and other safety measures based on management’s estimates when it is probable a liability has been incurred and the amount of loss can be reasonably estimated. Toyota mainly employs an estimation model, to accrue at the time of vehicle sale, an amount that represents management’s best estimate of expenses related to future recalls and other safety measures. The estimation model for recalls and other safety measures takes into account Toyota’s historical experience of recalls and other safety measures.

Litigation liabilities are established to cover probable losses on various lawsuits based on the information currently available. Attorneys’ fees are expensed as incurred.

Research and development costs are expensed as incurred. Research and development costs were ¥1,055,672 million, ¥1,037,528 million and ¥1,064,269 million for the years ended March 31, 2016, 2017 and 2018, respectively.

F-11

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Cash and cash equivalents -

Cash and cash equivalents include all highly liquid investments 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 unrealized gains or losses included as a component of accumulated other comprehensive income in shareholders’ equity, net of applicable taxes. Individual securities classified as available-for-sale are reduced to fair 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 consolidated statements of income when 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 recorded on Toyota’s consolidated balance sheets are comprised of the unpaid principal balance, plus accrued interest, less charge-offs, net of any unearned income and deferred origination costs and the allowance for credit losses. Deferred origination costs are amortized so as to approximate a level rate of return over the term of the related contracts.

The determination of portfolio segments is based primarily on the qualitative consideration of the nature of Toyota’s business operations and finance receivables. The three portfolio segments within finance receivables are as follows:

Retail receivables portfolio segment -

The retail receivables portfolio segment consists of retail installment sales contracts acquired mainly from dealers (“auto loans”) including credit card loans. These contracts acquired must first meet specified credit standards. Thereafter, Toyota retains responsibility for contract collection and administration.

The contract periods of auto loans primarily range from 2 to 7 years. Toyota acquires security interests in the vehicles financed and has the right to repossess vehicles if customers fail to meet their contractual obligations. Almost all auto loans are non-recourse, which relieves the dealers from financial responsibility in the event of repossession.

F-12

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Toyota classifies retail receivables portfolio segment into one class based on common risk characteristics associated with the underlying finance receivables, the similarity of the credit risks, and the quantitative materiality.

Finance lease receivables portfolio segment -

Toyota acquires new vehicle lease contracts originated primarily through dealers. The contract periods of these primarily range from 2 to 5 years. Lease contracts acquired must first meet specified credit standards after which Toyota assumes ownership of the leased vehicle. Toyota is responsible for contract collection and administration during the lease period.

Toyota is generally permitted to take possession of the vehicle upon a default by the lessee. The residual value is estimated at the time the vehicle is first leased. Vehicles returned to Toyota at the end of their leases are sold by auction.

Toyota classifies finance lease receivables portfolio segment into one class based on common risk characteristics associated with the underlying finance receivables and the similarity of the credit risks.

Wholesale and other dealer loan receivables portfolio segment -

Toyota provides wholesale financing to qualified dealers to finance inventories. Toyota acquires security interests in vehicles financed at wholesale. In cases where additional security interests would be required, Toyota takes dealership assets or personal assets, or both, as additional security. If a dealer defaults, Toyota has the right to liquidate any assets acquired and seek legal remedies.

Toyota also makes term loans to dealers for business acquisitions, facilities refurbishment, real estate purchases and working capital requirements. These loans are typically secured with liens on real estate, other dealership assets and/or personal assets of the dealers.

Toyota classifies wholesale and other dealer loan receivables portfolio segment into three classes of wholesale, real estate and working capital, based on the risk characteristics associated with the underlying finance receivables.

A receivable account balance is considered impaired when, based on current information and events, it is probable that Toyota will be unable to collect all amounts due according to the terms of the contract. Factors such as payment history, compliance with terms and conditions of the underlying loan agreement and other subjective factors related to the financial stability of the borrower are considered when determining whether a loan is impaired. Impaired finance receivables include certain nonaccrual receivables for which a specific reserve has been assessed. An account modified as a troubled debt restructuring is considered to be impaired. A troubled debt restructuring occurs when an account is modified through a concession to a borrower experiencing financial difficulty.

All classes of wholesale and other dealer loan receivables portfolio segment are placed on nonaccrual status when full payment of principal or interest is in doubt, or when principal or interest is 90 days or more contractually past due, whichever occurs first. Collateral dependent loans are placed on nonaccrual status if collateral is insufficient to cover principal and interest. Interest accrued but not collected at the date a receivable is placed on nonaccrual status is reversed against interest income. In addition, the amortization of net deferred fees is suspended.

F-13

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Interest income on nonaccrual receivables is recognized only to the extent it is received in cash. Accounts are restored to accrual status only when interest and principal payments are brought current and future payments are reasonably assured. Receivable balances are written-off against the allowance for credit losses when it is probable that a loss has been realized. Retail receivables class and finance lease receivables class are not placed generally on nonaccrual status when principal or interest is 90 days or more past due. However, these receivables are generally written-off against the allowance for credit losses when payments due are no longer expected to be received or the account is 120 days contractually past due, whichever occurs first.

As of March 31, 2017 and 2018, finance receivables on nonaccrual status are as follows:

	Yen in millions
	March 31,
	2017		2018
Retail		7,064		6,897
Finance leases		2,297		2,117
Wholesale		15,018		12,484
Real estate		12,632		13,856
Working capital		561		105
		37,572		35,459

As of March 31, 2017 and 2018, finance receivables 90 days or more past due and accruing are as follows:

	Yen in millions
	March 31,
	2017		2018
Retail		26,616		26,007
Finance leases		3,526		3,812
		30,142		29,819

Allowance for credit losses -

Allowance for credit losses is established to cover probable losses on finance receivables and vehicles and equipment on operating leases, resulting from the inability of customers to make required payments. Provision for credit losses is included in selling, general and administrative expenses.

The allowance for credit losses is based on a systematic, ongoing review and evaluation performed as part of the credit-risk evaluation process, historical loss experience, the size and composition of the portfolios, current economic events and conditions, the estimated fair value and adequacy of collateral and other pertinent factors. Vehicles and equipment on operating leases are not within the scope of accounting guidance governing the disclosure of portfolio segments.

Retail receivables portfolio segment -

Toyota calculates allowance for credit losses to cover probable losses on retail receivables by applying reserve rates to such receivables. Reserve rates are calculated mainly by historical loss experience, current economic events and conditions and other pertinent factors.

F-14

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Finance lease receivables portfolio segment -

Toyota calculates allowance for credit losses to cover probable losses on finance lease receivables by applying reserve rates to such receivables. Reserve rates are calculated mainly by historical loss experience, current economic events and conditions and other pertinent factors such as used car markets.

Wholesale and other dealer loan receivables portfolio segment -

Toyota calculates allowance for credit losses to cover probable losses on wholesale and other dealer loan receivables by applying reserve rates to such receivables. Reserve rates are calculated mainly by financial conditions of the dealers, terms of collateral setting, current economic events and conditions and other pertinent factors.

Toyota establishes specific reserves to cover the estimated losses on individually impaired receivables within the wholesale and other dealer loan receivables portfolio segment. Specific reserves on impaired receivables are determined by the present value of expected future cash flows or the fair value of collateral when it is probable that such receivables will be unable to be fully collected. The fair value of the underlying collateral is used if the receivable is collateral-dependent. The receivable is determined collateral-dependent if the repayment of the loan is expected to be provided by the underlying collateral. For the receivables in which the fair value of the underlying collateral was in excess of the outstanding balance, no allowance was provided.

Troubled debt restructurings in the retail receivables and finance lease receivables portfolio segments are specifically identified as impaired and aggregated with their respective portfolio segments when determining the allowance for credit losses. Impaired loans in the retail receivables and finance lease receivables portfolio segments are insignificant for individual evaluation and Toyota has determined that allowance for credit losses for each of the retail receivables and finance lease receivables portfolio segments would not be materially different if they had been individually evaluated for impairment.

Specific reserves on impaired receivables within the wholesale and other dealer loan receivables portfolio segment are recorded by an increase to the allowance for credit losses based on the related measurement of impairment. Related collateral, if recoverable, is repossessed and sold and the account balance is written-off.

Any shortfall between proceeds received and the carrying cost of repossessed collateral is charged to the allowance. Recoveries are reversed from 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 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 by Toyota to be appropriate in relation to the estimated losses on its 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.

F-15

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Inventories -

Inventories are valued at cost, not in excess of net realizable value, 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 ¥433,802 million and ¥472,717 million at March 31, 2017 and 2018, respectively. Had the “first-in, first-out” basis been used for those companies using the LIFO basis, inventories would have been ¥40,650 million and ¥22,778 million higher than reported at March 31, 2017 and 2018, 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 respective assets according to general class, type of construction and use. The estimated useful lives range from 2 to 65 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 method over the lease term, generally from 2 to 5 years, to the estimated residual value. Incremental direct costs incurred in connection with the acquisition of operating lease contracts are capitalized and amortized on a straight-line method over the lease term.

Long-lived assets -

Toyota reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. An impairment loss would be recognized when the carrying amount of an asset group exceeds the estimated undiscounted 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 carrying value of the asset group 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.

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 an indefinite 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 generally determined by the difference between the fair value of the asset using a discounted cash flow valuation method and the current book value.

F-16

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Employee benefit obligations -

Toyota has both defined benefit and defined contribution plans for employees’ retirement benefits. Retirement benefit obligations are measured by actuarial calculations in accordance with U.S.GAAP. The funded status of the defined benefit postretirement plans is recognized on the consolidated balance sheets as prepaid pension and severance costs or accrued pension and severance costs, and the funded status change is recognized in the year in which it occurs through other comprehensive income.

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 liabilities do not reflect any offset for possible recoveries from insurance companies and are not discounted. There were no material changes in these liabilities for all periods presented.

Income taxes -

The provision for income taxes is computed based on the pretax income included in the consolidated statements of income. The asset and liability approach is used to recognize deferred tax assets and liabilities 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 forward foreign currency exchange 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. All derivative financial instruments are recorded on the consolidated balance sheets at fair value, taking into consideration the effects of legally enforceable master netting agreements that allow us to net settle positive and negative positions and offset cash collateral held with the same counterparty on a net basis. 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 through 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 operations.

Net income attributable to Toyota Motor Corporation per common share -

Basic net income attributable to Toyota Motor Corporation per common share is calculated by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding during the reported period. The calculation of diluted net income attributable to Toyota Motor Corporation per common share is done by adjusting net income attributable to common shareholders and the weighted-average number of common shares outstanding, which includes the additional dilution from the assumed conversion of model AA class shares and the assumed exercise of dilutive stock options.

F-17

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Stock-based compensation -

Toyota measures compensation expense for its stock-based compensation plan based on the grant-date fair value of the award, and accounts for the award.

Other comprehensive income -

Other comprehensive income 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 is primarily comprised of unrealized gains/losses on marketable securities designated as available-for-sale, foreign currency translation adjustments and adjustments attributed to pension liabilities associated with Toyota’s defined benefit pension plans.

Accounting changes -

In July 2015, the Financial Accounting Standards Board (“FASB”) issued updated guidance to simplify the measurement of inventory. Toyota adopted this guidance on April 1, 2017. The adoption of this guidance did not have a material impact on Toyota’s consolidated financial statements.

In March 2016, the FASB issued updated guidance for effect of derivative contract novations on existing hedge accounting relationships. This guidance clarifies that a change in the counterparty to a designated derivative hedging instrument does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. Toyota adopted this guidance on April 1, 2017. The adoption of this guidance did not have a material impact on Toyota’s consolidated financial statements.

In March 2016, the FASB issued updated guidance for contingent put and call options in debt instruments. This guidance clarifies whether embedded contingent put and call options are clearly and closely related to the debt host when bifurcating embedded derivatives. Toyota adopted this guidance on April 1, 2017. The adoption of this guidance did not have a material impact on Toyota’s consolidated financial statements.

In October 2016, the FASB issued updated guidance for consolidation. Under this guidance, a reporting entity would evaluate its indirect economic interest in a variable interest entity held through a related party under common control on a proportionate basis. Toyota adopted this guidance on April 1, 2017. The adoption of this guidance did not have a material impact on Toyota’s consolidated financial statements.

In February 2018, the FASB issued updated guidance for comprehensive income. This guidance allows entities to reclassify tax effects stranded in accumulated other comprehensive incomes as a result of the Tax Cuts and Jobs Act of 2017 of the United States to retained earnings. Toyota early adopted this guidance on April 1, 2017. The adoption of this guidance did not have a material impact on Toyota’s consolidated financial statements.

Recent pronouncements to be adopted in future periods -

In May 2014, the FASB issued updated guidance on the recognition of revenue from contracts with customers. This guidance requires an entity to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which the entity expects to be entitled in

F-18

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

exchange for those goods or services and supersedes the current revenue recognition guidance. In August 2015, the FASB issued updated guidance on the deferral of the effective date. As a result, this guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. This guidance may be adopted retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying this guidance recognized at the date of initial application. Toyota will apply the modified retrospective method of adoption from the fiscal year beginning April 1, 2018. Management does not expect this guidance to have a material impact on Toyota’s consolidated financial statements.

In January 2016, the FASB issued updated guidance for financial instruments. This guidance addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments and will require entities to measure equity investments at fair value and recognize any changes in fair value in net income. This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Toyota will adopt this guidance from the fiscal year beginning April 1, 2018. Toyota will recognize a cumulative-effect adjustment to retained earnings of ¥1,125,109 million as of April 1, 2018 for after-tax unrealized gains of available-for-sale equity securities previously recognized in accumulated other comprehensive income.

In February 2016, the FASB issued updated guidance for leases. This guidance will require lessees to recognize almost all leases on their balance sheet as a right-of-use asset and a lease liability. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Management is evaluating the impact of adopting this guidance on Toyota’s consolidated financial statements.

In June 2016, the FASB issued updated guidance for measurement of credit losses on financial instruments. This guidance introduces an approach to estimate credit losses on certain types of financial instruments based on expected losses. It also modifies the impairment model for available-for-sale debt securities. This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Management is evaluating the impact of adopting this guidance on Toyota’s consolidated financial statements.

In August 2016, the FASB issued updated guidance for classification of statement of cash flows. This guidance clarifies classification of certain cash receipts and cash payments of statement of cash flows. This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Management does not expect this guidance to have a material impact on Toyota’s consolidated financial statements.

In October 2016, the FASB issued updated guidance that would require entities to recognize the income tax consequences of intercompany asset transfers other than inventory. This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Management does not expect this guidance to have a material impact on Toyota’s consolidated financial statements.

In November 2016, the FASB issued updated guidance for the statement of cash flows. This guidance will require that restricted cash and restricted cash equivalents should be included with cash and cash equivalents. It will also require entities to disclose how the statement of cash flows that includes restricted cash with cash and cash equivalents reconciles to the balance sheet. This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Management does not expect this guidance to have a material impact on Toyota’s consolidated financial statements.

F-19

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

In August 2017, the FASB issued updated guidance for hedge accounting. This guidance simplifies and expands the application of hedge accounting. This guidance is effective for fiscal year beginning after December 15, 2018, including interim periods within those fiscal years. Management is evaluating the impact of adopting this guidance on Toyota’s consolidated financial statements.

Reclassifications -

Certain prior year amounts have been reclassified to conform to the presentations as of and for the year ended March 31, 2018.

3. Supplemental cash flow information:

Cash payments for income taxes were ¥884,589 million, ¥854,600 million and ¥500,214 million for the years ended March 31, 2016, 2017 and 2018, respectively. Interest payments during the years ended March 31, 2016, 2017 and 2018 were ¥381,280 million, ¥362,602 million and ¥422,720 million, respectively.

Capital lease obligations of ¥6,546 million, ¥5,975 million and ¥4,467 million were incurred for the years ended March 31, 2016, 2017 and 2018, respectively.

4. Acquisitions and dispositions:

Toyota Housing Corporation, a consolidated subsidiary of Toyota Motor Corporation, increased its ownership interest in Misawa Homes Co., Ltd. (Business description: Production and sale of housing materials and components, etc.) to 51% by acquiring 11,181,798 shares of common stock of Misawa Homes Co., Ltd. through a tender offer on December 29, 2016 as well as a third-party allotment of Misawa Homes Co., Ltd. shares to Toyota Housing Corporation and a disposal of Misawa Homes Co., Ltd. treasury stock on January 5, 2017, in order to increase competitiveness through enhanced cooperation with Misawa Homes Co., Ltd. As a result, Misawa Homes Co., Ltd., previously an affiliated company accounted for under the equity method, is now accounted for as a consolidated subsidiary of Toyota Motor Corporation.

The acquisition was accounted for under the acquisition method. Acquisition-related costs were accounted as expense when incurred, and the estimated fair values of the assets acquired, liabilities assumed and noncontrolling interests as of the date of the acquisition of control are immaterial in value.

The amount of sales of Misawa Homes Co., Ltd. after the date of the acquisition of control, which is included in “Sales of products” of Toyota’s consolidated statements of income for fiscal 2017, is ¥130,046 million. Misawa Homes’ net income does not have a material effect on net income attributable to Toyota Motor Corporation in term of monetary value.

In addition to the above, Toyota made several acquisitions and dispositions during the years ended March 31, 2016, 2017 and 2018, however the assets and liabilities acquired or transferred were not material.

F-20

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

5. Marketable securities and other securities investments:

Marketable securities and other securities investments include public and corporate bonds and common stocks for which the aggregate cost, gross unrealized gains and losses and fair value are as follows:

	Yen in millions
	March 31, 2017
	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Available-for-sale
Public and corporate bonds		5,789,221		145,640		49,030		5,885,831
Common stocks		668,345		2,018,910		321		2,686,934
Other		819,514		9,724		2,670		826,568
Total		7,277,080		2,174,274		52,021		9,399,333
Securities not practicable to determine fair value
Public and corporate bonds		25,257
Common stocks		76,936
Total		102,193
	Yen in millions
	March 31, 2018
	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Available-for-sale
Public and corporate bonds		6,276,811		150,198		118,275		6,308,734
Common stocks		676,959		1,910,767		5,611		2,582,115
Other		730,334		8,058		1,413		736,979
Total		7,684,104		2,069,023		125,299		9,627,828
Securities not practicable to determine fair value
Public and corporate bonds		29,980
Common stocks		109,875
Total		139,855

Japanese bonds and foreign bonds including U.S., European and other bonds represent 28% and 72% (as of March 31, 2017) and 16% and 84% (as of March 31, 2018) of public and corporate bonds included in available-for-sale, respectively. Listed stocks on the Japanese stock markets represent 92% and 93% of common stocks which are included in available-for-sale as of March 31, 2017 and 2018, respectively. Public and corporate bonds include government bonds, and “Other” includes investment trusts.

Unrealized losses continuing over a 12 month period or more in the aggregate were not material as of March 31, 2017 and 2018.

As of March 31, 2017 and 2018, maturities of public and corporate bonds included in available-for-sale are mainly from 1 to 10 years.

F-21

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Proceeds from sales of available-for-sale securities were ¥108,708 million, ¥251,940 million and ¥248,046 million for the years ended March 31, 2016, 2017 and 2018, respectively. On those sales, gross realized gains were ¥9,500 million, ¥61,038 million and ¥7,684 million and gross realized losses were ¥365 million, ¥108 million and ¥278 million, respectively.

During the years ended March 31, 2016, 2017 and 2018, Toyota recognized impairment losses on available-for-sale securities of ¥9,272 million, ¥7,073 million and ¥846 million, respectively, which are included in “Other income (loss), net” and other in the accompanying consolidated statements of income.

In the ordinary course of business, Toyota maintains long-term investment securities, included in “Marketable securities and other securities investments” and issued by a number of non-public companies which are recorded at cost, as their fair values were not readily determinable. 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. Toyota periodically performs this impairment test for significant investments recorded at cost. If the impairment is determined to be other-than-temporary, the carrying value of the investment is written-down by the impaired amount and the losses are recognized currently in operations.

6. Finance receivables:

Finance receivables consist of the following:

	Yen in millions
	March 31,
	2017			2018
Retail		11,453,352			11,995,174
Finance leases		1,265,882			1,460,600
Wholesale and other dealer loans		3,281,142			3,281,427
		16,000,376			16,737,201
Deferred origination costs		172,298			181,764
Unearned income		(804,591	)		(919,967	)
Allowance for credit losses
Retail		(104,354	)		(103,457	)
Finance leases		(23,962	)		(28,817	)
Wholesale and other dealer loans		(30,896	)		(36,800	)
Total allowance for credit losses		(159,212	)		(169,074	)
Total finance receivables, net		15,208,871			15,829,924
Less - Current portion		(6,196,649	)		(6,348,306	)
Noncurrent finance receivables, net		9,012,222			9,481,618

Finance receivables were geographically distributed as follows: in North America 59.1%, in Asia 11.3%, in Europe 10.3%, in Japan 8.1% and in Other 11.2% as of March 31, 2017, and in North America 55.7%, in Asia 12.3%, in Europe 12.1%, in Japan 8.2% and in Other 11.7% as of March 31, 2018.

F-22

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The contractual maturities of retail receivables, the future minimum lease payments on finance leases and the contractual maturities of wholesale and other dealer loans at March 31, 2018 are summarized as follows:

	Yen in millions
Years ending March 31,	Retail		Finance leases		Wholesale and other dealer loans
2019		3,887,959		370,916		2,431,231
2020		2,870,540		293,371		234,874
2021		2,269,797		228,764		140,295
2022		1,569,215		103,796		162,198
2023		884,871		37,134		121,654
Thereafter		512,792		5,122		191,175
		11,995,174		1,039,103		3,281,427

Finance leases consist of the following:

	Yen in millions
	March 31,
	2017			2018
Minimum lease payments		889,522			1,039,103
Estimated unguaranteed residual values		376,360			421,497
		1,265,882			1,460,600
Deferred origination costs		5,809			10,411
Less - Unearned income		(103,518	)		(120,884	)
Less - Allowance for credit losses		(23,962	)		(28,817	)
Finance leases, net		1,144,211			1,321,310

Toyota is exposed to credit risk on Toyota’s finance receivables. Credit risk is the risk of loss arising from the failure of customers or dealers to meet the terms of their contracts with Toyota or otherwise fail to perform as agreed. Toyota estimates allowance for credit losses by variety of credit-risk evaluation process to cover probable and estimable losses above.

F-23

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The table below shows the amount of the finance receivables segregated into aging categories based on the number of days outstanding as of March 31, 2017 and 2018:

	Yen in millions
	March 31, 2017
	Retail		Finance leases		Wholesale		Real estate		Working capital
Current		11,264,660		1,255,626		1,707,432		848,757		722,697
30-59 days past due		125,626		5,114		1,327		—		405
60-89 days past due		29,321		1,321		—		—		—
90 days or greater past due		33,745		3,821		—		266		258
Total		11,453,352		1,265,882		1,708,759		849,023		723,360
	Yen in millions
	March 31, 2018
	Retail		Finance leases		Wholesale		Real estate		Working capital
Current		11,802,032		1,448,989		1,721,225		823,007		731,877
30-59 days past due		127,830		5,741		138		—		—
60-89 days past due		32,408		1,760		5,112		—		—
90 days or greater past due		32,904		4,110		—		65		3
Total		11,995,174		1,460,600		1,726,475		823,072		731,880

The tables below show the recorded investment for each credit quality of the finance receivable within the wholesale and other dealer loan receivables portfolio segment in the United States and other regions as of March 31, 2017 and 2018:

United States

The wholesale and other dealer loan receivables portfolio segment is primarily segregated into credit qualities below based on internal risk assessments by dealers.

Performing: Account not classified as either Credit Watch, At Risk or Default

Credit Watch: Account designated for elevated attention

At Risk: Account where there is an increased likelihood that default may exist based on qualitative and quantitative factors

Default: Account is not currently meeting contractual obligations or we have temporarily waived certain contractual requirements

	Yen in millions
	March 31, 2017
	Wholesale		Real estate		Working capital		Total
Performing		1,076,164		449,884		233,677		1,759,725
Credit Watch		142,336		68,726		16,049		227,111
At Risk		1,286		5,071		561		6,918
Default		8,791		5,079		544		14,414
Total		1,228,577		528,760		250,831		2,008,168

F-24

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	Yen in millions
	March 31, 2018
	Wholesale		Real estate		Working capital		Total
Performing		1,005,030		432,397		225,442		1,662,869
Credit Watch		99,547		51,420		10,730		161,697
At Risk		7,968		3,081		3,506		14,555
Default		4,356		4,993		2,231		11,580
Total		1,116,901		491,891		241,909		1,850,701

Other regions

Credit qualities of the wholesale and other dealer loan receivables portfolio segment in other regions are also monitored based on internal risk assessments by dealers on a consistent basis as in the United States. These accounts classified as “Credit Watch” or “At Risk” were not significant in other regions, and consequently the tables below summarize information for two categories, “Performing” and “Default”.

	Yen in millions
	March 31, 2017
	Wholesale		Real estate		Working capital		Total
Performing		460,308		316,008		472,198		1,248,514
Default		19,874		4,255		331		24,460
Total		480,182		320,263		472,529		1,272,974

	Yen in millions
	March 31, 2018
	Wholesale		Real estate		Working capital		Total
Performing		585,760		323,581		489,801		1,399,142
Default		23,814		7,600		170		31,584
Total		609,574		331,181		489,971		1,430,726

F-25

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The tables below summarize information about impaired finance receivables:

	Yen in millions
	Recorded investment				Unpaid principal balance				Individually evaluated allowance
	March 31,				March 31,				March 31,
	2017		2018		2017		2018		2017		2018
Impaired account balances individually evaluated for impairment with an allowance:
Wholesale		10,667		11,582		10,667		11,582		1,373		1,525
Real estate		10,986		9,353		10,986		9,353		1,596		588
Working capital		3,793		5,858		3,793		5,858		1,291		5,429
Total		25,446		26,793		25,446		26,793		4,260		7,542
Impaired account balances individually evaluated for impairment without an allowance:
Wholesale		15,033		8,818		15,033		8,818
Real estate		11,780		15,086		11,780		15,086
Working capital		—		2,337		—		2,337
Total		26,813		26,241		26,813		26,241
Impaired account balances aggregated and evaluated for impairment:
Retail		27,269		27,151		26,597		26,418
Finance leases		66		100		54		74
Total		27,335		27,251		26,651		26,492
Total impaired account balances:
Retail		27,269		27,151		26,597		26,418
Finance leases		66		100		54		74
Wholesale		25,700		20,400		25,700		20,400
Real estate		22,766		24,439		22,766		24,439
Working capital		3,793		8,195		3,793		8,195
Total		79,594		80,285		78,910		79,526

	Yen in millions
	Average impaired finance receivables
	For the years ended March 31,
	2017		2018
Total impaired account balances:
Retail		26,628		27,664
Finance leases		76		83
Wholesale		26,306		23,171
Real estate		22,482		22,831
Working capital		4,208		5,818
Total		79,700		79,567

For the years ended March 31, 2017 and 2018, interest income on impaired finance receivables was not material.

The amount of finance receivables modified as a troubled debt restructuring for the year ended March 31, 2018 was not significant for all classes of finance receivables. Finance receivables modified as troubled debt restructurings for the year ended March 31, 2018 and for which there was a payment default were not significant for all classes of such receivables.

F-26

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

7. Other receivables:

Other receivables relate to arrangements with certain component manufacturers whereby Toyota procures inventory for these component manufactures and is reimbursed for the related purchases.

8. Inventories:

Inventories consist of the following:

	Yen in millions
	March 31,
	2017		2018
Finished goods		1,552,823		1,683,694
Raw materials		413,049		435,360
Work in process		309,387		304,929
Supplies and other		113,358		115,806
Total		2,388,617		2,539,789

9. Vehicles and equipment on operating leases:

Vehicles and equipment on operating leases consist of the following:

	Yen in millions
	March 31,
	2017			2018
Vehicles		6,105,527			6,124,699
Equipment		13,096			13,373
Less - Deferred income and other		(152,044	)		(203,679	)
		5,966,579			5,934,393
Less - Accumulated depreciation		(1,263,774	)		(1,352,840	)
Less - Allowance for credit losses		(18,889	)		(15,013	)
Vehicles and equipment on operating leases, net		4,683,916			4,566,540

Rental income from vehicles and equipment on operating leases was ¥891,733 million, ¥850,210 million and ¥927,443 million for the years ended March 31, 2016, 2017 and 2018, respectively. Future minimum rentals from vehicles and equipment on operating leases are due in installments as follows:

Years ending March 31,	Yen in millions
2019		769,926
2020		490,182
2021		221,216
2022		46,818
2023		11,675
Thereafter		1,478
Total minimum future rentals		1,541,295

The future minimum rentals as shown above should not be considered indicative of future cash collections.

F-27

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

10. Allowance for doubtful accounts and credit losses:

The net changes in the allowance for doubtful accounts relating to trade accounts and notes receivable for the years ended March 31, 2016, 2017 and 2018 are as follows:

	Yen in millions
	For the years ended March 31,
	2016			2017			2018
Allowance for doubtful accounts at beginning of year		50,410			94,853			100,712
Provision for doubtful accounts, net of reversal		69,029			6,519			(74	)
Write-offs		(20,649	)		(3,839	)		(2,374	)
Other		(3,937	)		3,179			326
Allowance for doubtful accounts at end of year		94,853			100,712			98,590

“Other” includes the impact of currency translation adjustments for the years ended March 31, 2016, 2017 and 2018.

A portion of the allowance for doubtful accounts balance at March 31, 2017 and 2018 totaling ¥50,602 million and ¥72,665 million, respectively, is attributed to certain non-current receivable balances which are reported as “Other” assets in the consolidated balance sheets.

The net changes in the allowance for credit losses relating to finance receivables and vehicles and equipment on operating leases for the years ended March 31, 2016, 2017 and 2018 are as follows:

	Yen in millions
	For the years ended March 31,
	2016			2017			2018
Allowance for credit losses at beginning of year		178,038			167,330			178,101
Provision for credit losses, net of reversal		90,236			92,147			76,143
Charge-offs		(102,948	)		(99,550	)		(96,444	)
Recoveries		22,356			21,757			25,344
Other		(20,352	)		(3,583	)		943
Allowance for credit losses at end of year		167,330			178,101			184,087

“Other” primarily includes the impact of currency translation adjustments for the years ended March 31, 2016, 2017 and 2018.

F-28

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The net changes in the allowance for credit losses above relating to retail receivables portfolio segment, finance lease receivables portfolio segment and wholesale and other dealer loan receivables portfolio segment for the years ended March 31, 2016, 2017 and 2018 are as follows:

	Yen in millions
	For the year ended March 31, 2016
	Retail			Finance leases			Wholesale and other dealer loans
Allowance for credit losses at beginning of year		109,316			29,303			30,053
Provision for credit losses, net of reversal		65,677			1,742			4,962
Charge-offs		(83,116	)		(3,833	)		(667	)
Recoveries		18,999			380			230
Other		(12,023	)		(2,992	)		(3,750	)
Allowance for credit losses at end of year		98,853			24,600			30,828
	Yen in millions
	For the year ended March 31, 2017
	Retail			Finance leases			Wholesale and other dealer loans
Allowance for credit losses at beginning of year		98,853			24,600			30,828
Provision for credit losses, net of reversal		67,433			1,657			854
Charge-offs		(78,114	)		(2,007	)		(324	)
Recoveries		18,282			194			160
Other		(2,100	)		(482	)		(622	)
Allowance for credit losses at end of year		104,354			23,962			30,896

	Yen in millions
	For the year ended March 31, 2018
	Retail			Finance leases			Wholesale and other dealer loans
Allowance for credit losses at beginning of year		104,354			23,962			30,896
Provision for credit losses, net of reversal		52,891			7,115			6,497
Charge-offs		(74,868	)		(2,708	)		(823	)
Recoveries		20,511			315			59
Other		569			133			171
Allowance for credit losses at end of year		103,457			28,817			36,800

F-29

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

11. Affiliated companies and variable interest entities:

Investments in and transactions with affiliated companies -

Summarized financial information for affiliated companies accounted for by the equity method is shown below:

	Yen in millions
	March 31,
	2017		2018
Current assets		11,795,296		12,766,962
Noncurrent assets		11,003,432		12,326,689
Total assets		22,798,728		25,093,651
Current liabilities		7,419,176		8,061,342
Long-term liabilities and noncontrolling interests		5,423,938		5,940,549
Affiliated companies accounted for by the equity method shareholders’ equity		9,955,614		11,091,760
Total liabilities and shareholders’ equity		22,798,728		25,093,651
Toyota’s share of affiliated companies accounted for by the equity method shareholders’ equity		2,845,422		3,162,711
Number of affiliated companies accounted for by the equity method at end of period		54		57

	Yen in millions
	For the years ended March 31,
	2016		2017		2018
Net revenues		31,037,029		30,309,263		30,680,535
Gross profit		3,852,899		3,644,267		4,065,344
Net income attributable to affiliated companies accounted for by the equity method		957,742		1,099,080		1,344,687
Equity in earnings of affiliated companies attributable to Toyota Motor Corporation		329,099		362,060		470,083

Entities comprising a significant portion of Toyota’s investment in affiliated companies and percentage of ownership are presented below:

	Percentage of ownership
	March 31,
Name of affiliated companies	2017			2018
Denso Corporation		24.9	%		24.4	%
Toyota Industries Corporation		24.9	%		24.9	%
Aisin Seiki Co., Ltd.		24.1	%		24.9	%
Toyota Tsusho Corporation		22.0	%		22.0	%
Toyoda Gosei Co., Ltd.		43.0	%		43.0	%

F-30

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Certain affiliated companies accounted for by the equity method with carrying amounts of ¥2,126,128 million and ¥2,334,642 million at March 31, 2017 and 2018, respectively, were quoted on various established markets at an aggregate value of ¥2,894,106 million and ¥3,145,940 million, respectively. Toyota evaluated its investments in affiliated companies, considering the length of time and the extent to which the quoted market prices have been less than the carrying amounts, the financial condition and near-term prospects of the affiliated companies and Toyota’s ability and intent to retain those investments in the companies for a period of time. Toyota did not recognize any impairment loss for the years ended March 31, 2016, 2017 and 2018.

Account balances and transactions with affiliated companies are presented below:

	Yen in millions
	March 31,
	2017		2018
Trade accounts and notes receivable, and other receivables		289,406		301,335
Accounts payable and other payables		691,173		736,023

	Yen in millions
	For the years ended March 31,
	2016		2017		2018
Net revenues		1,804,493		1,914,318		2,004,632
Purchases		4,359,854		5,357,682		5,749,430

Dividends from affiliated companies accounted for by the equity method for the years ended March 31, 2016, 2017 and 2018 were ¥186,212 million, ¥180,326 million and ¥196,403 million, respectively.

Toyota does not have any significant related party transactions other than transactions with affiliated companies in the ordinary course of business.

Variable Interest Entities -

Toyota enters into securitization transactions using special-purpose entities, that are considered variable interest entities (“VIEs”). Although the finance receivables and vehicles on operating leases related to securitization transactions have been legally sold to the VIEs, Toyota has both the power to direct the activities of the VIEs that most significantly impact the VIEs’ economic performance and the obligation to absorb losses of the VIEs or the right to receive benefits from the VIEs that could potentially be significant to the VIEs. As a result, Toyota is considered the primary beneficiary of the VIEs and therefore consolidates the VIEs.

Related to securitization transactions, ¥2,092,311 million and ¥1,964,350 million retail finance receivables, ¥557,383 million and ¥618,787 million vehicles on operating leases, ¥151,943 million and ¥146,828 million restricted cash and ¥2,067,221 million and ¥1,952,973 million secured debt were included in Toyota’s consolidated financial statements as of March 31, 2017 and 2018, respectively. The creditors of the VIEs do not have recourse to Toyota’s general credit with the exception of debts guaranteed by Toyota. Risks to which Toyota is exposed including credit, interest rate, and/or prepayment risks are not incremental compared with the situation before Toyota enters into securitization transactions.

F-31

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Toyota has variable interests in investment trusts that are VIEs due mainly to insufficient equity within the structure but determined that it was not the primary beneficiary due to lack of the power to direct the activities of the VIEs that most significantly impact the VIEs’ economic performance and, therefore, does not consolidate the VIEs. Investments in the trusts are held at fair value and are included in “Marketable securities and other securities investments” in the accompanying consolidated balance sheets. As of March 31, 2018, the maximum exposure to loss is limited to the carrying value of its investment in the trusts, which totaled ¥446,778 million, compared to ¥539,862 million as of March 31, 2017. Toyota does not provide support that is not contractually required to the trusts.

As for VIEs other than those specified above, neither the aggregate size nor Toyota’s involvements are material to Toyota’s consolidated financial statements.

12. Short-term borrowings and long-term debt:

Short-term borrowings at March 31, 2017 and 2018 consist of the following:

	Yen in millions
	March 31,
	2017		2018
Loans, principally from banks, with a weighted-average interest at March 31, 2017 and March 31, 2018 of 1.86% and of 2.14% per annum, respectively		1,125,324		1,254,444
Commercial paper with a weighted-average interest at March 31, 2017 and March 31, 2018 of 1.08% and of 1.65% per annum, respectively		3,828,358		3,900,469
		4,953,682		5,154,913

As of March 31, 2018, Toyota has unused short-term lines of credit amounting to ¥1,712,315 million of which ¥245,797 million related to commercial paper programs. Under these programs, Toyota is authorized to obtain short-term financing at prevailing interest rates for periods not in excess of 360 days.

F-32

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Long-term debt at March 31, 2017 and 2018 comprises the following:

	Yen in millions
	March 31,
	2017			2018
Unsecured loans, representing obligations principally to banks, due 2017 to 2036 in 2017 and due 2018 to 2036 in 2018 with a weighted-average interest at March 31, 2017 and March 31, 2018 of 2.44% and of 2.70% per annum, respectively		3,318,865			3,215,309
Secured loans, representing obligations principally to finance receivables securitization due 2017 to 2030 in 2017 and due 2018 to 2030 in 2018 with a weighted-average interest at March 31, 2017 and March 31, 2018 of 1.43% and of 1.99% per annum, respectively		2,080,362			1,963,057
Medium-term notes of consolidated subsidiaries, due 2017 to 2046 in 2017 and due 2018 to 2046 in 2018 with a weighted-average interest at March 31, 2017 and March 31, 2018 of 2.12% and of 2.18% per annum, respectively		6,923,511			6,994,629
Unsecured notes of parent company, due 2017 to 2036 in 2017 and due 2018 to 2037 in 2018 with a weighted-average interest at March 31, 2017 and March 31, 2018 of 1.35% and of 0.94% per annum, respectively		370,000			370,000
Unsecured notes of consolidated subsidiaries, due 2017 to 2032 in 2017 and due 2018 to 2031 in 2018 with a weighted-average interest at March 31, 2017 and March 31, 2018 of 2.17% and of 2.20% per annum, respectively		1,430,022			1,569,517
Secured notes of consolidated subsidiaries, due 2017 to 2020 in 2017 and due 2018 to 2021 in 2018 with a weighted-average interest at March 31, 2017 and March 31, 2018 of 8.14% and of 7.90% per annum, respectively		57,036			59,513
Long-term capital lease obligations, due 2017 to 2035 in 2017 and due 2018 to 2035 in 2018 with interest ranging from 0.37% to 14.73% per annum in 2017 and from 0.37% to 14.73% per annum in 2018		22,249			20,626
		14,202,045			14,192,651
Less - Current portion due within one year		(4,290,449	)		(4,186,277	)
		9,911,596			10,006,374

As of March 31, 2018, approximately 48%, 11%, 10%, 9%, 6% and 16% of long-term debt are denominated in U.S. dollars, Japanese yen, euros, Australian dollars, Canadian dollars and other currencies, respectively.

As of March 31, 2018, property, plant and equipment with a book value of ¥658,675 million and other assets aggregating ¥2,052,752 million were pledged as collateral mainly for certain debt obligations of subsidiaries. These other assets principally consist of securitized finance receivables.

The aggregate amounts of annual maturities of long-term debt during the next five years are as follows:

Years ending March 31,	Yen in millions
2019		4,186,277
2020		2,848,360
2021		2,398,498
2022		2,236,208
2023		1,612,872

F-33

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Standard agreements with certain banks include provisions that collateral (including sums on deposit with such banks) or guarantees will be furnished upon the banks’ request and that any collateral furnished, pursuant to such agreements or otherwise, will be applicable to all present or future indebtedness to such banks. During the year ended March 31, 2018, Toyota has not received any significant requests from these banks.

As of March 31, 2018, Toyota has unused long-term lines of credit amounting to ¥6,728,922 million.

Interest expense during the years ended March 31, 2016, 2017 and 2018 were ¥377,310 million, ¥352,691 million and ¥415,094 million, respectively. Interest expense related to the financial services business is included in “Cost of financing operations” in the accompanying consolidated statements of income.

13. Product warranties and recalls and other safety measures:

Toyota provides product warranties for certain defects mainly resulting from manufacturing based on warranty contracts with its customers at the time of sale of products. Toyota accrues estimated warranty costs to be incurred in the future in accordance with the warranty contracts. In addition to product warranties, Toyota initiates recalls and other safety measures to repair or to replace parts which might be expected to fail from products safety perspectives or customer satisfaction standpoints. Toyota accrues for costs of recalls and other safety measures based on the amount estimated from historical experience.

Liabilities for product warranties and liabilities for recalls and other safety measures have been combined into a single table showing an aggregate liability for quality assurances due to the fact that both are liabilities for costs to repair or replace defects of vehicles and the amounts incurred for recalls and other safety measures may affect the amounts incurred for product warranties and vice versa.

Liabilities for quality assurances are included in “Accrued expenses” in the consolidated balance sheets.

The net changes in liabilities for quality assurances above for the years ended March 31, 2016, 2017 and 2018 consist of the following:

	Yen in millions
	For the years ended March 31,
	2016			2017			2018
Liabilities for quality assurances at beginning of year		1,328,916			1,403,764			1,696,938
Payments made during year		(501,073	)		(604,853	)		(586,943	)
Provision for quality assurances		636,719			919,086			649,377
Changes relating to pre-existing quality assurances		(39,225	)		(24,147	)		(56,769	)
Other		(21,573	)		3,088			(291	)
Liabilities for quality assurances at end of year		1,403,764			1,696,938			1,702,312

“Other” primarily includes the impact of currency translation adjustments and the impact of consolidation and deconsolidation of certain entities due to changes in ownership interest.

F-34

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The table below shows the net changes in liabilities for recalls and other safety measures which are comprised in liabilities for quality assurances above for the years ended March 31, 2016, 2017 and 2018.

	Yen in millions
	For the years ended March 31,
	2016			2017			2018
Liabilities for recalls and other safety measures at beginning of year		755,050			925,475			1,275,200
Payments made during year		(347,861	)		(444,416	)		(456,177	)
Provision for recalls and other safety measures		524,100			794,009			454,391
Other		(5,814	)		132			1,842
Liabilities for recalls and other safety measures at end of year		925,475			1,275,200			1,275,256

14. Other payables:

Other payables are mainly related to purchases of property, plant and equipment and non-manufacturing purchases.

15. Income taxes:

The components of income before income taxes comprise the following:

	Yen in millions
	For the years ended March 31,
	2016		2017		2018
Income before income taxes:
Parent company and domestic subsidiaries		1,834,413		1,423,208		1,880,971
Foreign subsidiaries		1,148,968		770,617		739,458
		2,983,381		2,193,825		2,620,429

The provision for income taxes consists of the following:

	Yen in millions
	For the years ended March 31,
	2016			2017			2018
Current income tax expense:
Parent company and domestic subsidiaries		591,868			435,560			565,998
Foreign subsidiaries		253,512			246,639			176,369
Total current		845,380			682,199			742,367
Deferred income tax expense (benefit):
Parent company and domestic subsidiaries		(40,934	)		(21,756	)		45,097
Foreign subsidiaries		73,823			(31,543	)		(283,058	)
Total deferred		32,889			(53,299	)		(237,961	)
Total provision		878,269			628,900			504,406

F-35

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Net deferred liabilities as of March 31, 2018 decreased by ¥218,323 million and provision for income taxes for the year ended March 31, 2018 decreased by ¥249,694 million, respectively, resulting from the Tax Cuts and Jobs Act of 2017 of the United States.

Toyota is subject to a number of different income taxes which, in the aggregate, indicate a statutory rate in Japan of approximately 32.9%, 31.1% and 31.1% for the years ended March 31, 2016, 2017 and 2018, respectively. The statutory tax rates in effect for the year in which the temporary differences are expected to reverse are used to calculate the tax effects of temporary differences which are expected to reverse in the future years. Reconciliation of the differences between the statutory tax rate and the effective income tax rate is as follows:

	For the years ended March 31,
	2016			2017			2018
Statutory tax rate		32.9	%		31.1	%		31.1	%
Increase (reduction) in taxes resulting from:
Non-deductible expenses		0.3			0.4			0.4
Deferred tax liabilities on undistributed earnings of foreign subsidiaries		1.0			1.3			1.1
Deferred tax liabilities on undistributed earnings of affiliated companies accounted for by the equity method		2.4			3.3			3.8
Valuation allowance		(0.4	)		(0.6	)		(2.0	)
Tax credits		(4.7	)		(4.8	)		(4.3	)
The difference between the statutory tax rate in Japan and that of foreign subsidiaries		(1.3	)		(1.9	)		(1.5	)
Unrecognized tax benefits adjustments		0.2			0.4			0.2
Revision to reduce deferred tax assets and liabilities at the fiscal year-end due to changes in tax rates		(0.5	)		—			—
Effect of the Tax Cuts and Jobs Act of 2017 of the United States		—			—			(9.5	)
Other		(0.5	)		(0.5	)		(0.1	)
Effective income tax rate		29.4	%		28.7	%		19.2	%

F-36

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Significant components of deferred tax assets and liabilities are as follows:

	Yen in millions
	March 31,
	2017			2018
Deferred tax assets
Accrued pension and severance costs		219,465			199,366
Accrued expenses and liabilities for quality assurances		644,936			609,257
Other accrued employees’ compensation		114,752			112,316
Operating loss carryforwards for tax purposes		76,317			203,897
Allowance for doubtful accounts and credit losses		82,916			63,223
Property, plant and equipment and other assets		234,372			249,320
Other		335,992			348,852
Gross deferred tax assets		1,708,750			1,786,231
Less - Valuation allowance		(146,623	)		(93,814	)
Total deferred tax assets		1,562,127			1,692,417
Deferred tax liabilities
Unrealized gains on securities, net		(692,962	)		(635,292	)
Undistributed earnings of foreign subsidiaries		(28,544	)		(29,967	)
Undistributed earnings of affiliated companies accounted for by the equity method		(709,094	)		(794,485	)
Basis difference of acquired assets		(31,861	)		(30,768	)
Lease transactions		(973,000	)		(751,292	)
Other		(46,407	)		(74,658	)
Gross deferred tax liabilities		(2,481,868	)		(2,316,462	)
Net deferred tax liability		(919,741	)		(624,045	)

The deferred tax assets and liabilities above that comprise the net deferred tax liability are included in the consolidated balance sheets as follows:

	Yen in millions
	March 31,
	2017			2018
Deferred tax assets
Investments and other assets - Other		503,985			494,120
Deferred tax liabilities
Deferred income taxes (Long-term liabilities)		(1,423,726	)		(1,118,165	)
Net deferred tax liability		(919,741	)		(624,045	)

The factors used to assess the likelihood of realization of the deferred tax assets are the future reversal of existing taxable temporary differences, the future taxable income and available tax planning strategies that are prudent and feasible. All available evidence, both positive and negative, is considered to determine whether, based on the weight of that evidence, a valuation allowance is needed for deferred tax assets which are not more-likely-than-not to be realized.

F-37

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The accounting for deferred tax assets represents Toyota’s current best estimate based on all available evidence. Unanticipated events or changes could result in re-evaluating the realizability of deferred tax assets.

Operating loss carryforwards for tax purposes as of March 31, 2018 in Japan and foreign countries were ¥26,712 million and ¥866,392 million, respectively, and are available as an offset against future taxable income. The majority of these carryforwards in Japan and foreign countries expire in years 2019 to 2027 and expire in years 2019 to 2038, respectively. Tax credit carryforwards as of March 31, 2018 in Japan and foreign countries were ¥2,847 million and ¥55,939 million, respectively, and the majority of these carryforwards in Japan and foreign countries expire in years 2019 to 2021 and expire in years 2019 to 2038, respectively.

The valuation allowance mainly relates to deferred tax assets of operating loss and foreign tax credit carryforwards for tax purposes that are not more-likely-than-not to be realized. The net changes in the total valuation allowance for deferred tax assets for the years ended March 31, 2016, 2017 and 2018 consist of the following:

	Yen in millions
	For the years ended March 31,
	2016			2017			2018
Valuation allowance at beginning of year		169,811			151,665			146,623
Additions		33,243			27,147			16,106
Deductions		(43,723	)		(37,891	)		(74,435	)
Other		(7,666	)		5,702			5,520
Valuation allowance at end of year		151,665			146,623			93,814

“Other” includes the impact of consolidation and deconsolidation of certain entities due to changes in ownership interest and currency translation adjustments during the years ended March 31, 2016, 2017 and 2018.

Because management intends to reinvest undistributed earnings of foreign subsidiaries to the extent not expected to be remitted in the foreseeable future, management has made no provision for income taxes on those undistributed earnings aggregating ¥3,623,657 million as of March 31, 2018. Toyota estimates an additional tax provision of ¥139,287 million would be required if the full amount of those undistributed earnings were remitted.

A summary of the gross unrecognized tax benefits changes for the years ended March 31, 2016, 2017 and 2018 is as follows:

	Yen in millions
	For the years ended March 31,
	2016			2017			2018
Balance at beginning of year		13,644			19,250			21,553
Additions based on tax positions related to the current year		1,001			8,187			612
Additions for tax positions of prior years		6,378			6,076			13,954
Reductions for tax positions of prior years		(77	)		(5,593	)		(13,217	)
Reductions for tax positions related to lapse of statute of limitations		(7	)		(9	)		—
Reductions for settlements		(427	)		(6,317	)		(26	)
Other		(1,262	)		(41	)		(1,312	)
Balance at end of year		19,250			21,553			21,564

F-38

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was not material at March 31, 2016, 2017 and 2018, respectively. Toyota does not believe it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within the next twelve months.

Interest and penalties related to income tax liabilities are included in “Other income (loss), net”. The amounts of interest and penalties accrued as of and recognized for the years ended March 31, 2016, 2017 and 2018, were not material.

Toyota remains subject to income tax examination for the tax returns related to the years beginning on and after April 1, 2011 and April 1, 2002, with various tax jurisdictions in Japan and foreign countries, respectively.

16. Class Shares:

TMC issued First Series Model AA Class Shares (the “Model AA Class Shares”) on July 24, 2015. Presented below is additional information regarding the Model AA Class Shares:

Total number of shares issued	:	47,100,000 shares
Issue price	:	10,598 yen per share
Purchase price	:	10,121.09 yen per share
Voting rights	:	Model AA Class Shares shall have voting rights. The number of shares constituting one unit with respect to Model AA Class Shares shall be 100.
Restrictions on transfer	:	Model AA Class Shares shall have restrictions on transfer.
Dividends	:	(1)   If the record date falls in the fiscal year ending on March 31, 2016: 0.5% of the issue price
		(2)   If the record date falls in the fiscal year ending on March 31, 2017 through March 31, 2020: the annual dividend rate for the previous fiscal year plus 0.5% of the issue price
		(3)   If the record date falls in the fiscal year ending on March 31, 2021 or later: 2.5% of the issue price
Shareholder’s right	:	(1)   Shareholder’s conversion right into Common Shares Shareholders of the Model AA Class Shares may demand TMC to acquire all or a part of their Model AA Class Shares in exchange for Common Shares on the first business day of April and October of every year, starting October 1, 2020.
		(2)   Shareholder’s cash put option Shareholders of the Model AA Class Shares may demand TMC to acquire all or a part of their Model AA Class Shares in exchange for cash on the last business day of March, June, September and December of each year, starting on September 1, 2020.
TMC’s right	:	TMC may acquire, on or after April 2, 2021, all of the outstanding Model AA Class Shares in exchange for cash.

F-39

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The Model AA Class Shares will not be treated as shareholders’ equity because the shareholders of the Model AA Class Shares will have cash put options and hence, the Model AA Class Shares will be reported as mezzanine equity, a separate line item between liabilities and shareholders’ equity.

Unpaid dividends included in mezzanine equity as of March 31, 2017 and 2018 were ¥2,473 million and ¥3,721 million, respectively.

The difference between the issuance amount and initial carrying amount of the mezzanine equity is adjusted for accretion of the mezzanine equity over a period of time from the issuance date until the Class Shares can first be redeemed.

17. Shareholders’ equity:

Changes in the number of shares of common stock issued have resulted from the following:

	For the years ended March 31,
	2016			2017			2018
Common stock issued
Balance at beginning of year		3,417,997,492			3,337,997,492			3,262,997,492
Issuance during the year		—			—			—
Purchase and retirement		(80,000,000	)		(75,000,000	)		—
Balance at end of year		3,337,997,492			3,262,997,492			3,262,997,492

The Companies Act provides that an amount equal to 10% of distributions from surplus paid by the parent company and its Japanese subsidiaries be appropriated as a capital reserve or a retained earnings reserve. No further appropriations are required when the total amount of the capital reserve and the retained earnings reserve reaches 25% of stated capital.

The retained earnings reserve included in retained earnings as of March 31, 2017 and 2018 were ¥190,227 million and ¥194,890 million, respectively. The Companies Act provides that the retained earnings reserve of the parent company and its Japanese subsidiaries is restricted and unable to be used for dividend payments, and is excluded from the calculation of the profit available for dividend.

The amounts of statutory retained earnings of the parent company available for dividend payments to shareholders were ¥8,470,887 million and ¥9,256,045 million as of March 31, 2017 and 2018, respectively. In accordance with customary practice in Japan, the distributions from surplus are not accrued in the financial statements for the corresponding period, but are recorded in the subsequent accounting period after shareholders’ approval has been obtained. Retained earnings at March 31, 2018 include amounts representing year-end cash dividends of ¥349,190 million, ¥120 per common share, which were resolved at the Meeting of the Board of Directors held on May 9, 2018.

Retained earnings at March 31, 2018 include ¥2,429,170 million relating to equity in undistributed earnings of affiliated companies accounted for by the equity method.

F-40

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The repurchase, reissuance and retirement of treasury stock for the years ended March 31, 2016, 2017 and 2018 are as follows:

For the year ended March 31, 2016

Repurchase of treasury stock

Reason for repurchasing treasury stock -

The repurchase was made to avoid the dilution of common share value as a result of the issuance of the First Series Model AA Class Shares.

Details of matters relating to repurchase -

Number of common shares repurchased	47,100,000 shares
Total purchase price for repurchase of shares	¥349,935 million

Reason for repurchasing treasury stock -

The repurchase was made to return capital to shareholders in addition to promoting capital efficiency and agile capital policy in view of the business environment.

Details of matters relating to repurchase -

Number of common shares repurchased	62,942,900 shares
Total purchase price for repurchase of shares	¥432,692 million

Retirement of treasury stock

Reason for retiring treasury stock -

The retirement was made to relieve concerns regarding the dilution of common share value due to reissuanceof treasury stock in the future.

Details of matters relating to retirement -

Number of common shares retired 80,000,000 shares

The amount on retirement of treasury stock was treated as a reduction in additional paid-in capital and retained earnings. As a result, treasury stock, additional paid-in capital and retained earnings decreased by ¥400,537 million, ¥1,048 million and ¥399,489 million, respectively.

For the year ended March 31, 2017

Repurchase of treasury stock

Reason for repurchasing treasury stock -

The repurchase was made to return capital to shareholders in addition to promoting capital efficiency and agile capital policy in view of the business environment.

F-41

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Details of matters relating to repurchase -

Number of common shares repurchased	116,555,700 shares
Total purchase price for repurchase of shares	¥699,986 million

Reissuance of treasury stock

Reason for reissuing treasury stock and details of matters relating to reissuance -

On August 1, 2016, the parent company implemented share exchange as a result of which the parent company became a wholly owning parent company and Daihatsu Motor Co., Ltd. (“Daihatsu”) became a wholly owned subsidiary, and the parent company acquired additional shares of Daihatsu. As a result of this share exchange, the parent company issued 52,856,096 shares of treasury stock, treasury stock decreased by ¥283,561 million and gains on disposal of treasury stock occurred in the amount of ¥27,972 million. As a result, additional paid-in capital increased by ¥27,972 million. As a result of acquiring additional shares of Daihatsu, additional paid-in capital, noncontrolling interests and accumulated other comprehensive income (loss) decreased by ¥53,742 million, ¥255,565 million and ¥2,226 million, respectively.

Retirement of treasury stock

Reason for retiring treasury stock -

The retirement was made to relieve concerns regarding the dilution of common share value due to reissuanceof treasury stock in the future.

Details of matters relating to retirement -

Number of common shares retired 75,000,000 shares

The amount on retirement of treasury stock was treated as a reduction in additional paid-in capital and retained earnings. As a result, treasury stock, additional paid-in capital and retained earnings decreased by ¥407,383 million, ¥27,374 million and ¥380,009 million, respectively.

For the year ended March 31, 2018

Repurchase of treasury stock

Reason for repurchasing treasury stock -

The repurchase was made to return capital to shareholders in addition to promoting capital efficiency and agile capital policy in view of the business environment.

Details of matters relating to repurchase -

Number of common shares repurchased	73,708,400 shares
Total purchase price for repurchase of shares	¥499,989 million

Reissuance of treasury stock

Reason for reissuing treasury stock -

On August 4, 2017, the parent company and Mazda Motor Corporation (Mazda) signed an agreement to enter a business and capital alliance, with the aim of further strengthening their lasting partnership. The parent company acquired common stock newly issued by Mazda through a third-party allotment. Mazda acquired the

F-42

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

parent company’s shares that were equivalent in value to the Mazda shares through a disposition of treasury stock involving a third-party allotment implemented by the parent company.

Details of matters relating to reissuance -

Number of common shares reissued	8,293,300 shares
Amount of proceeds	¥50,000 million

F-43

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

18. Accumulated other comprehensive income:

Changes in accumulated other comprehensive income (loss) are as follows:

	Yen in millions
	Foreign currency translation adjustments			Unrealized gains (losses) on securities			Pension liability adjustments			Accumulated other comprehensive income (loss)
Balance at March 31, 2015		(136,090	)		1,727,565			(113,930	)		1,477,545
Other comprehensive income (loss) before reclassifications, net of taxes of ¥10,719 million, ¥130,092 million, ¥93,210 million and ¥234,021 million		(423,404	)		(291,681	)		(214,600	)		(929,685	)
Reclassifications, net of taxes of ¥— million, ¥9,832 million, ¥(3,318) million and ¥6,514 million		28,052			(20,511	)		5,419			12,960
Other comprehensive income (loss), net of tax		(395,352	)		(312,192	)		(209,181	)		(916,725	)
Less - Other comprehensive income attributable to noncontrolling interests		32,387			9,572			7,989			49,948
Balance at March 31, 2016		(499,055	)		1,424,945			(315,122	)		610,768
Other comprehensive income (loss) before reclassifications, net of taxes of ¥9,240 million, ¥(9,048) million, ¥(40,099) million and ¥(39,907) million		(57,926	)		41,134			82,939			66,147
Reclassifications, net of taxes of ¥— million, ¥23,275 million, ¥(5,255) million and ¥18,020 million		—			(36,855	)		10,373			(26,482	)
Other comprehensive income (loss), net of tax		(57,926	)		4,279			93,312			39,665
Less - Other comprehensive income attributable to noncontrolling interests		5,499			(12,281	)		(503	)		(7,285	)
Equity transaction with noncontrolling interests and other		(8,626	)		9,060			(2,660	)		(2,226	)
Balance at March 31, 2017		(560,108	)		1,426,003			(224,973	)		640,922
Other comprehensive income (loss) before reclassifications, net of taxes of ¥(3,624) million, ¥38,539 million, ¥(7,568) million and ¥27,347 million		(113,942	)		(72,501	)		15,814			(170,629	)
Reclassifications, net of taxes of ¥— million, ¥9,729 million, ¥(2,500) million and ¥7,229 million		(6,664	)		(22,058	)		6,501			(22,221	)
Other comprehensive income (loss), net of tax		(120,606	)		(94,559	)		22,315			(192,850	)
Less - Other comprehensive income attributable to noncontrolling interests		1,629			(2,022	)		(580	)		(973	)
Equity transaction with noncontrolling interests and other		—			162			(11,562	)		(11,400	)
Balance at March 31, 2018		(679,085	)		1,329,584			(214,800	)		435,699

F-44

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Reclassifications for the years ended March 31, 2016, 2017 and 2018 consist of the following:

	Yen in millions
	For the years ended March 31,									Affected line items in the consolidated statements of income
	2016			2017			2018
Foreign currency translation adjustments:
		28,052			—			(6,664	)	Other income (loss), net
		28,052			—			(6,664	)	Income before income taxes and equity in earnings of affiliated companies
		28,052			—			(6,664	)	Net income
Unrealized gains (losses) on securities:
		(779	)		(24,553	)		(4,567	)	Financing operations
		(27,275	)		(3,572	)		(25,247	)	Foreign exchange gain (loss), net
		(6,185	)		(31,685	)		(1,993	)	Other income (loss), net
		(34,239	)		(59,810	)		(31,807	)	Income before income taxes and equity in earnings of affiliated companies
		9,832			23,275			9,729		Provision for income taxes
		3,896			(320	)		20		Equity in earnings of affiliated companies
		(20,511	)		(36,855	)		(22,058	)	Net income
Pension liability adjustments:
Recognized net actuarial loss		12,971			19,432			12,914		*1
Amortization of prior service costs		(4,234	)		(3,804	)		(3,913	)	*1
		8,737			15,628			9,001		Income before income taxes and equity in earnings of affiliated companies
		(3,318	)		(5,255	)		(2,500	)	Provision for income taxes
		5,419			10,373			6,501		Net income
Total reclassifications, net of tax		12,960			(26,482	)		(22,221	)

Amounts of reclassifications in parentheses indicate gains in the consolidated statements of income.

*1: These components are included in the computation of net periodic pension cost. See note 20 to the consolidated financial statements for additional information.

19. Stock-based compensation:

In June 1997, the parent company’s shareholders approved a stock option plan for board members. In June 2001, the shareholders approved an amendment of the plan to include both board members and key employees. Each year until June 2010, since the plans’ inception, the shareholders have approved the authorization for the grant of options for the purchase of the parent company’s common stock. Authorized shares for each year that remain ungranted are unavailable for grant in future years. Stock options granted in and after August 2006 have terms of 8 years and an exercise price equal to 1.025 times the closing price of Toyota’s common stock on the date of grant. These options generally vest 2 years from the date of grant.

F-45

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

There were no stock-based compensation expenses for stock options as selling, general and administrative expenses for the years ended March 31, 2016, 2017 and 2018, respectively.

The following table summarizes Toyota’s stock option activity:

				Yen				Yen in millions
	Number of shares			Weighted- average exercise price		Weighted- average remaining contractual life in years		Aggregate intrinsic value
Options outstanding at March 31, 2015		3,503,500			4,632		2.05		13,143
Granted		—			—
Exercised		(936,400	)		5,049
Canceled		(473,600	)		6,917
Options outstanding at March 31, 2016		2,093,500			3,858		1.56		4,384
Granted		—			—
Exercised		(785,600	)		4,006
Canceled		(115,600	)		4,682
Options outstanding at March 31, 2017		1,192,300			3,682		0.80		2,813
Granted		—			—
Exercised		(643,800	)		3,726
Canceled		(264,900	)		4,154
Options outstanding at March 31, 2018		283,600			3,153		0.33		1,041
Options exercisable at March 31, 2016		2,093,500			3,858		1.56		4,384
Options exercisable at March 31, 2017		1,192,300			3,682		0.80		2,813
Options exercisable at March 31, 2018		283,600			3,153		0.33		1,041

The total intrinsic value of options exercised for the years ended March 31, 2016, 2017 and 2018 was ¥2,236 million, ¥1,632 million and ¥1,881 million, respectively.

Cash received from the exercise of stock options for the years ended March 31, 2016, 2017 and 2018 was ¥4,728 million, ¥3,147 million and ¥2,399 million, respectively.

The following table summarizes information for options outstanding and options exercisable at March 31, 2018:

Outstanding						Exercisable
Number of shares		Exercise price		Remaining life		Number of shares		Exercise price
		Yen		Years				Yen
	283,600		3,153		0.33		283,600		3,153

F-46

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

20. Employee benefit plans:

Pension and severance plans -

Upon terminations of employment, employees of the parent company and subsidiaries in Japan are entitled, under the retirement plans of each company, to lump-sum indemnities or pension payments, based on current rates of pay and lengths of service or the number of “points” mainly determined by those. Under normal circumstances, the minimum payment prior to retirement age is an amount based on voluntary retirement. Employees receive additional benefits on involuntary retirement, including retirement at the age limit.

Effective October 1, 2004, the parent company amended its retirement plan to introduce a “point” based retirement benefit plan. Under the new plan, employees are entitled to lump-sum or pension payments determined based on accumulated “points” vested in each year of service.

There are three types of “points” that vest in each year of service consisting of “service period points” which are attributed to the length of service, “job title points” which are attributed to the job title of each employee, and “performance points” which are attributed to the annual performance evaluation of each employee. Under normal circumstances, the minimum payment prior to retirement age is an amount reflecting an adjustment rate applied to represent voluntary retirement. Employees receive additional benefits upon involuntary retirement, including retirement at the age limit.

Effective October 1, 2005, the parent company partly amended its retirement plan and introduced the quasi cash-balance plan under which benefits are determined based on the variable-interest crediting rate rather than the fixed-interest crediting rate as was in the pre-amended plan.

The parent company and most subsidiaries in Japan have contributory funded defined benefit pension plans, which are pursuant to the Corporate Defined Benefit Pension Plan Law (CDBPPL). The contributions to the plans are funded with several financial institutions in accordance with the applicable laws and regulations. These pension plan assets consist principally of common stocks, government bonds and insurance contracts.

Most foreign subsidiaries have pension plans or severance indemnity plans covering substantially all of their employees under which the cost of benefits are currently invested or accrued. The benefits for these plans are based primarily on lengths of service and current rates of pay.

Toyota uses a March 31 measurement date for its benefit plans.

F-47

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Information regarding Toyota’s defined benefit plans is as follows:

	Yen in millions
	March 31,
	Japanese plans						Foreign plans
	2017			2018			2017			2018
Change in benefit obligation
Benefit obligation at beginning of year		1,912,156			1,930,498			963,255			1,026,024
Service cost		89,443			88,964			41,733			35,887
Interest cost		8,800			13,252			35,593			37,817
Plan participants’ contributions		923			1,266			436			912
Plan amendments		(21	)		(58	)		(996	)		(12	)
Net actuarial (gain) loss		(45,783	)		35,017			22,220			66,039
Acquisition and other		30,622			18,206			(18,778	)		(26,616	)
Benefits paid		(65,642	)		(67,835	)		(17,439	)		(42,070	)
Benefit obligation at end of year		1,930,498			2,019,310			1,026,024			1,097,981
Change in plan assets
Fair value of plan assets at beginning of year		1,369,236			1,483,889			692,801			758,306
Actual return on plan assets		81,600			111,278			74,760			89,924
Acquisition and other		30,266			14,615			(11,960	)		(16,009	)
Employer contributions		39,692			42,095			15,925			20,961
Plan participants’ contributions		923			1,266			436			912
Benefits paid		(37,828	)		(40,264	)		(13,656	)		(38,611	)
Fair value of plan assets at end of year		1,483,889			1,612,879			758,306			815,483
Funded status		446,609			406,431			267,718			282,498

Amounts recognized in the consolidated balance sheets as of March 31, 2017 and 2018 are comprised of the following:

	Yen in millions
	March 31,
	Japanese plans						Foreign plans
	2017			2018			2017			2018
Accrued expenses (Accrued pension and severance costs)		28,265			27,718			2,936			2,982
Accrued pension and severance costs		633,774			647,134			271,296			284,048
Investments and other assets - Other (Prepaid pension and severance costs)		(215,430	)		(268,421	)		(6,514	)		(4,532	)
Net amount recognized		446,609			406,431			267,718			282,498

F-48

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Amounts recognized in accumulated other comprehensive income (loss) as of March 31, 2017 and 2018 are comprised of the following:

	Yen in millions
	March 31,
	Japanese plans						Foreign plans
	2017			2018			2017			2018
Net actuarial loss		(288,126	)		(248,791	)		(116,700	)		(119,407	)
Prior service costs		36,980			32,812			(2,151	)		(1,826	)
Net transition obligation		—			—			—			—
Net amount recognized		(251,146	)		(215,979	)		(118,851	)		(121,233	)

The accumulated benefit obligation for all defined benefit pension plans was ¥1,874,424 million and ¥1,959,533 million in Japanese plans, ¥957,217 million and ¥1,023,094 million in Foreign plans at March 31, 2017 and 2018, respectively.

The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for which the accumulated benefit obligations exceed plan assets are as follows:

	Yen in millions
	March 31,
	Japanese plans				Foreign plans
	2017		2018		2017		2018
Projected benefit obligation		892,684		833,080		445,482		490,844
Accumulated benefit obligation		866,566		806,774		426,201		468,611
Fair value of plan assets		242,488		170,234		178,357		201,402

Components of the net periodic pension cost are as follows:

	Yen in millions
	For the years ended March 31,
	Japanese plans									Foreign plans
	2016			2017			2018			2016			2017			2018
Service cost		78,611			89,443			88,964			47,544			41,733			35,887
Interest cost		17,509			8,800			13,252			40,340			35,593			37,817
Expected return on plan assets		(35,012	)		(33,524	)		(36,409	)		(44,616	)		(38,893	)		(41,048	)
Amortization of prior service costs		(4,669	)		(4,148	)		(4,226	)		435			344			313
Recognized net actuarial loss		5,850			14,298			7,462			7,121			5,134			5,452
Amortization of net transition obligation		—			—			—			—			—			—
Net periodic pension cost		62,289			74,869			69,043			50,824			43,911			38,421

F-49

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) are as follows:

	Yen in millions
	For the years ended March 31,
	Japanese plans									Foreign plans
	2016			2017			2018			2016			2017		2018
Net actuarial gain (loss)		(290,664	)		93,859			39,852			(11,242	)		13,647		(17,163	)
Recognized net actuarial loss		5,850			14,298			7,462			7,121			5,134		5,452
Prior service costs		489			21			58			573			996		12
Amortization of prior service costs		(4,669	)		(4,148	)		(4,226	)		435			344		313
Amortization of net transition obligation		—			—			—			—			—		—
Other		76			811			(7,979	)		272			1,962		9,004
Total recognized in other comprehensive income (loss)		(288,918	)		104,841			35,167			(2,841	)		22,083		(2,382	)

“Other” includes the impact of consolidation and deconsolidation of certain entities due to changes in ownership interest and currency translation adjustments during the years ended March 31, 2016, 2017 and 2018.

The estimated prior service costs and net actuarial loss that will be amortized from accumulated other comprehensive income (loss) into net periodic pension cost during the year ending March 31, 2019 are ¥ (4,200) million and ¥7,100 million in Japanese plans, ¥300 million and ¥6,900 million in Foreign plans, respectively.

Weighted-average assumptions used to determine benefit obligations as of March 31, 2017 and 2018 are as follows:

	March 31,
	Japanese plans						Foreign plans
	2017			2018			2017			2018
Discount rate		0.7	%		0.7	%		4.0	%		3.9	%
Rate of compensation increase		2.9	%		3.3	%		3.8	%		3.6	%

As of March 31, 2017 and 2018, the parent company and certain subsidiaries in Japan employ “point” based retirement benefit plans and do not use the rates of compensation increase to determine benefit obligations.

Weighted-average assumptions used to determine net periodic pension cost for the years ended March 31, 2016, 2017 and 2018 are as follows:

	For the years ended March 31,
	Japanese plans									Foreign plans
	2016			2017			2018			2016			2017			2018
Discount rate		1.1	%		0.5	%		0.7	%		4.0	%		4.2	%		4.0	%
Expected return on plan assets		2.5	%		2.4	%		2.4	%		6.3	%		6.1	%		6.0	%
Rate of compensation increase		2.5	%		2.7	%		2.9	%		4.4	%		3.9	%		3.8	%

During the years ended March 31, 2016, 2017 and 2018, the parent company and certain subsidiaries in Japan employ “point” based retirement benefit plans and do not use the rates of compensation increase to determine net periodic pension cost.

F-50

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The expected rate of return on plan assets is determined after considering several applicable factors including, the composition of plan assets held, assumed risks of asset management, historical results of the returns on plan assets, Toyota’s principal policy for plan asset management, and forecasted market conditions.

Toyota’s policy and objective for plan asset management is to maximize returns on plan assets to meet future benefit payment requirements under risks which Toyota considers permissible. Asset allocations under the plan asset management are determined based on plan asset management policies of each plan which are established to achieve the optimized asset compositions in terms of the long-term overall plan asset management. In Japanese plans, excepting equity securities contributed by Toyota, approximately 40% of the plan assets is invested in equity securities, approximately 30% is invested in debt securities, and the rest of them is invested in insurance contracts and other products. In Foreign plans, excepting equity securities contributed by Toyota, approximately 65% of the plan assets is invested in equity securities, approximately 25% is invested in debt securities, and the rest of them is invested in other products. When actual allocations are not in line with target allocations, Toyota rebalances its investments in accordance with the policies. Prior to making individual investments, Toyota performs in-depth assessments of corresponding factors including category of products, industry type, currencies and liquidity of each potential investment under consideration to mitigate concentrations of risks such as market risk and foreign currency exchange rate risk. To assess performance of the investments, Toyota establishes bench mark return rates for each individual investment, combines these individual bench mark rates based on the asset composition ratios within each asset category, and compares the combined rates with the corresponding actual return rates on each asset category.

The following table summarizes the fair value of classes of plan assets as of March 31, 2017 and 2018. See note 27 to the consolidated financial statements for three levels of input which are used to measure fair value.

Japanese plans

	Yen in millions
	March 31, 2017
	Level 1		Level 2		Level 3		Total
Equity securities
Common stocks		585,052		—		—		585,052
Commingled funds		—		180,835		—		180,835
		585,052		180,835		—		765,887
Debt securities
Government bonds		87,958		—		—		87,958
Commingled funds		—		248,498		—		248,498
Other		—		39,754		81		39,835
		87,958		288,252		81		376,291
Insurance contracts		—		199,779		—		199,779
Other		42,083		34,131		496		76,710
Investments measured at net asset value		—		—		—		65,222
Total		715,093		702,997		577		1,483,889

F-51

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	Yen in millions
	March 31, 2018
	Level 1		Level 2		Level 3		Total
Equity securities
Common stocks		620,281		—		—		620,281
Commingled funds		—		202,816		—		202,816
		620,281		202,816		—		823,097
Debt securities
Government bonds		88,959		—		—		88,959
Commingled funds		—		284,870		—		284,870
Other		—		36,567		19		36,586
		88,959		321,437		19		410,415
Insurance contracts		—		201,141		—		201,141
Other		41,446		61,301		—		102,747
Investments measured at net asset value		—		—		—		75,479
Total		750,686		786,695		19		1,612,879

Foreign plans

	Yen in millions
	March 31, 2017
	Level 1		Level 2		Level 3		Total
Equity securities
Common stocks		207,036		—		—		207,036
Commingled funds		—		152,104		—		152,104
		207,036		152,104		—		359,140
Debt securities
Government bonds		76,730		—		—		76,730
Commingled funds		—		36,430		—		36,430
Other		—		33,430		—		33,430
		76,730		69,860		—		146,590
Insurance contracts		—		—		—		—
Other		13,533		13,851		30,903		58,287
Investments measured at net asset value		—		—		—		194,289
Total		297,299		235,815		30,903		758,306

F-52

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	Yen in millions
	March 31, 2018
	Level 1		Level 2		Level 3		Total
Equity securities
Common stocks		178,476		—		—		178,476
Commingled funds		—		197,566		—		197,566
		178,476		197,566		—		376,042
Debt securities
Government bonds		89,928		—		—		89,928
Commingled funds		—		11,642		—		11,642
Other		—		35,032		—		35,032
		89,928		46,674		—		136,602
Insurance contracts		—		—		—		—
Other		12,487		18,107		31,288		61,882
Investments measured at net asset value		—		—		—		240,957
Total		280,891		262,347		31,288		815,483

Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.

The following is description of the assets, information about the valuation techniques used to measure fair value, key inputs and significant assumptions:

Quoted market prices for identical securities are used to measure fair value of common stocks. Japanese stocks and foreign stocks represent 74% and 26% (as of March 31, 2017) and 76% and 24% (as of March 31, 2018) of common stocks, respectively, in Japanese plans. Common stocks include mainly foreign stocks as of March 31, 2017 and 2018 in Foreign plans.

Quoted market prices for identical securities are used to measure fair value of government bonds. Japanese government bonds and foreign government bonds represent 28% and 72% (as of March 31, 2017) and 29% and 71% (as of March 31, 2018) of government bonds, respectively, in Japanese plans. Government bonds include mainly foreign government bonds as of March 31, 2017 and 2018 in Foreign plans.

Commingled funds are beneficial interests of collective trust. The fair values of commingled funds are measured using the net asset value (“NAV”) provided by the administrator of the fund, and are categorized by the ability to redeem investments by the NAV.

The fair values of insurance contracts are measured using contracted amount with accrued interest.

“Other” consists of cash equivalents, other private placement investment funds and other assets. The fair values of other private placement investment funds are measured using the NAV provided by the administrator of the fund, and are categorized by the ability to redeem investments by the NAV.

F-53

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following tables summarize the changes in Level 3 plan assets measured at fair value for the years ended March 31, 2016, 2017 and 2018:

Japanese plans

	Yen in millions
	For the years ended March 31,
	2016									2017									2018
	Debt securities			Other			Total			Debt securities			Other			Total			Debt securities			Other			Total
Balance at beginning of year		233			1,018			1,251			146			2,518			2,664			81			496			577
Actual return on plan assets		1			(3	)		(2	)		—			(11	)		(11	)		—			(4	)		(4	)
Purchases, sales and settlements		(88	)		1,503			1,415			(65	)		(2,011	)		(2,076	)		(62	)		(492	)		(554	)
Other		—			—			—			—			—			—			—			—			—
Balance at end of year		146			2,518			2,664			81			496			577			19			—			19

Foreign plans

	Yen in millions
	For the years ended March 31,
	2016			2017			2018
	Other			Other			Other
Balance at beginning of year		17,511			30,758			30,903
Actual return on plan assets		1,966			279			2,024
Purchases, sales and settlements		12,372			—			—
Other		(1,091	)		(134	)		(1,639	)
Balance at end of year		30,758			30,903			31,288

Toyota expects to contribute ¥42,220 million in Japanese plans and ¥23,234 million in Foreign plans to its pension plans in the year ending March 31, 2019.

The following pension benefit payments, which reflect expected future service, as appropriate, are expected to be paid:

	Yen in millions
Years ending March 31,	Japanese plans		Foreign plans
2019		72,756		21,972
2020		73,891		23,700
2021		74,890		25,089
2022		78,254		26,724
2023		82,433		28,552
from 2024 to 2028		429,821		167,337
Total		812,045		293,374

F-54

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Postretirement benefits other than pensions and postemployment benefits -

Toyota’s U.S. subsidiaries provide certain health care and life insurance benefits to eligible retired employees. In addition, Toyota provides benefits to certain former or inactive employees after employment, but before retirement. These benefits are provided through various insurance companies, health care providers and others. The costs of these benefits are recognized over the period the employee provides credited service to Toyota. Toyota’s obligations under these arrangements are not material.

21. 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.

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 interest rate risk exposure. 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 hedge exposure to currency 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 years ended March 31, 2016, 2017 and 2018, the ineffective portion of Toyota’s fair value hedge relationships was not material. 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, to manage its exposure to foreign currency exchange rate fluctuations and interest rate fluctuations from an economic perspective, and for some of which Toyota is unable to or has elected not to apply hedge accounting.

F-55

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Fair value and gains or losses on derivative financial instruments -

The following table summarizes the fair values of derivative financial instruments as of March 31, 2017 and 2018:

	Yen in millions
	March 31,
	2017			2018
Derivative assets
Derivative financial instruments designated as hedging instruments
Interest rate and currency swap agreements
Prepaid expenses and other current assets		—			154
Investments and other assets - Other		662			668
Total		662			822
Undesignated derivative financial instruments
Interest rate and currency swap agreements
Prepaid expenses and other current assets		61,946			46,425
Investments and other assets - Other		168,292			175,635
Total		230,238			222,060
Foreign exchange forward and option contracts
Prepaid expenses and other current assets		12,357			34,922
Investments and other assets - Other		164			—
Total		12,521			34,922
Total derivative assets		243,421			257,804
Counterparty netting		(84,883	)		(97,617	)
Collateral received		(60,021	)		(92,146	)
Carrying value of derivative assets		98,517			68,041
Derivative liabilities
Derivative financial instruments designated as hedging instruments
Interest rate and currency swap agreements
Other current liabilities		(64	)		—
Other long-term liabilities		—			—
Total		(64	)		—
Undesignated derivative financial instruments
Interest rate and currency swap agreements
Other current liabilities		(67,091	)		(34,716	)
Other long-term liabilities		(158,383	)		(158,830	)
Total		(225,474	)		(193,546	)
Foreign exchange forward and option contracts
Other current liabilities		(19,919	)		(3,610	)
Other long-term liabilities		—			—
Total		(19,919	)		(3,610	)
Total derivative liabilities		(245,457	)		(197,156	)
Counterparty netting		84,883			97,617
Collateral posted		122,231			55,650
Carrying value of derivative liabilities		(38,343	)		(43,889	)

F-56

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table summarizes the notional amounts of derivative financial instruments as of March 31, 2017 and 2018:

	Yen in millions
	March 31,
	2017				2018
	Designated derivative financial instruments		Undesignated derivative financial instruments		Designated derivative financial instruments		Undesignated derivative financial instruments
Interest rate and currency swap agreements		40,837		19,459,677		12,643		19,895,085
Foreign exchange forward and option contracts		—		2,772,741		—		2,731,534
Total		40,837		22,232,418		12,643		22,626,619

The following table summarizes the gains and losses on derivative financial instruments and hedged items reported in the consolidated statements of income for the years ended March 31, 2016, 2017 and 2018:

	Yen in millions
	For the years ended March 31,
	2016					2017					2018
	Gains or (losses) on derivative financial instruments			Gains or (losses) on hedged items		Gains or (losses) on derivative financial instruments			Gains or (losses) on hedged items		Gains or (losses) on derivative financial instruments		Gains or (losses) on hedged items
Derivative financial instruments designated as hedging instruments
Interest rate and currency swap agreements
Cost of financing operations		(133	)		122		(339	)		1,212		782		(227	)
Undesignated derivative financial instruments
Interest rate and currency swap agreements
Cost of financing operations		119,096					(61,884	)				42,220
Foreign exchange gain (loss), net		(379	)				12,516					30,339
Foreign exchange forward and option contracts
Cost of financing operations		(16,363	)				2,614					6,442
Foreign exchange gain (loss), net		115,256					81,614					73,115

Undesignated derivative financial instruments are used to manage economic risks of fluctuations in foreign currency exchange rates and interest rates of certain receivables and payables. Those economic risks are offset by changes in the fair value of undesignated derivative financial instruments.

F-57

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Cash flows from transactions of derivative financial instruments are included in cash flows from operating activities in the consolidated statements of cash flows.

Credit risk related contingent features -

Toyota enters into International Swaps and Derivatives Association Master Agreements with counterparties. These Master Agreements contain a provision requiring either Toyota or the counterparty to settle the contract or to post assets to the other party in the event of a ratings downgrade below a specified threshold.

The aggregate fair value amount of derivative financial instruments that contain credit risk related contingent features that are in a net liability position after being offset by cash collateral as of March 31, 2018 is ¥2,489 million. The aggregate fair value amount of assets that are already posted as cash collateral as of March 31, 2018 is ¥28,012 million. If the ratings of Toyota decline below specified thresholds, the maximum amount of assets to be posted or for which Toyota could be required to settle the contracts is ¥2,489 million as of March 31, 2018.

22. Other financial instruments:

Toyota has certain financial instruments, including financial assets and liabilities which arose in the normal course of business. These financial instruments are executed with creditworthy financial institutions, and virtually all foreign currency contracts are denominated in U.S. dollars, euros and other currencies of major developed countries. Financial instruments involve, to varying degrees, market risk as instruments are subject to price fluctuations, and elements of credit risk in the event a counterparty should default. In the unlikely event the counterparties fail to meet the contractual terms of a foreign currency or an interest rate instrument, Toyota’s risk is limited to the fair value of the instrument. Although Toyota may be exposed to losses in the event of non-performance by counterparties on financial instruments, it does not anticipate significant losses due to the nature of its counterparties. Counterparties to Toyota’s financial instruments represent, in general, international financial institutions. Additionally, Toyota does not have a significant exposure to any individual counterparty. Toyota believes that the overall credit risk related to its financial instruments is not significant.

The following table summarizes the estimated fair values of Toyota’s financial instruments, excluding marketable securities, other securities investments, investments and other assets in affiliated companies and derivative financial instruments. See note 27 to the consolidated financial statements for three levels of input which are used to measure fair value.

	Yen in millions
	March 31, 2017
				Estimated fair value
	Carrying amount			Level 1		Level 2			Level 3			Total
Assets (Liabilities)
Cash and cash equivalents		2,995,075			2,103,469		891,606			—			2,995,075
Time deposits		1,082,654			—		1,082,654			—			1,082,654
Total finance receivables, net		14,064,660			—		—			14,226,440			14,226,440
Other receivables		436,867			—		—			436,867			436,867
Short-term borrowings		(4,953,682	)		—		(4,953,682	)		—			(4,953,682	)
Long-term debt including the current portion		(14,179,796	)		—		(12,241,617	)		(2,065,884	)		(14,307,501	)

F-58

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	Yen in millions
	March 31, 2018
				Estimated fair value
	Carrying amount			Level 1		Level 2			Level 3			Total
Assets (Liabilities)
Cash and cash equivalents		3,052,269			2,278,060		774,209			—			3,052,269
Time deposits		901,244			—		901,244			—			901,244
Total finance receivables, net		14,508,614			—		—			14,615,409			14,615,409
Other receivables		489,338			—		—			489,338			489,338
Short-term borrowings		(5,154,913	)		—		(5,154,913	)		—			(5,154,913	)
Long-term debt including the current portion		(14,172,025	)		—		(12,265,260	)		(1,940,888	)		(14,206,148	)

Cash and cash equivalents and time deposits -

In the normal course of business, substantially all cash and cash equivalents and time deposits are highly liquid and are carried at amounts which approximate fair value due to its short duration. Cash equivalents and time deposits include negotiable certificate of deposit measured at fair value on a recurring basis. Where money market funds produce a daily net asset value in an active market, this value is used to determine the fair value of the fund investment, and the investment is classified in Level 1. All other types of cash and cash equivalents and time deposits are classified in Level 2.

Finance receivables, net -

The fair values of finance receivables are estimated by discounting expected cash flows to present value using internal assumptions, including prepayment speeds, expected credit losses and collateral value. Certain impaired finance receivables are measured at fair value on a nonrecurring basis based on collateral values.

As unobservable inputs are utilized, finance receivables are classified in Level 3.

Other receivables -

Other receivables are short-term receivables. These receivables are carried at amounts which approximate fair value, and the difference between the carrying amount and the fair value is not material. These receivables are classified in Level 3.

Short-term borrowings and long-term debt -

The fair values of short-term borrowings and long-term debt including the current portion, except for secured loans provided by securitization transactions using special-purpose entities, are estimated based on the discounted amounts of future cash flows using Toyota’s current borrowing rates for similar liabilities. As these inputs are observable, these debts are classified in Level 2.

The fair values of the secured loans provided by securitization transactions are estimated based on current market rates and credit spreads for debt with similar maturities. Internal assumptions including prepayment speeds and expected credit losses are used to estimate the timing of cash flows to be paid on the underlying securitized assets. As these valuations utilize unobservable inputs, the secured loans are classified in Level 3. See note 11 to the consolidated financial statements for information regarding the secured loans.

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TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

23. Lease commitments:

Toyota leases certain assets under capital lease and operating lease arrangements.

An analysis of leased assets under capital leases is as follows:

	Yen in millions
	March 31,
	2017			2018
Class of property
Building		18,775			17,934
Machinery and equipment		29,630			31,217
Less - Accumulated depreciation		(28,703	)		(30,853	)
		19,702			18,298

Amortization expenses under capital leases for the years ended March 31, 2016, 2017 and 2018 were ¥4,801 million, ¥4,586 million and ¥5,541 million, respectively.

Future minimum lease payments under capital leases together with the present value of the net minimum lease payments as of March 31, 2018 are as follows:

Years ending March 31,	Yen in millions
2019		6,645
2020		3,892
2021		2,276
2022		1,921
2023		1,801
Thereafter		8,933
Total minimum lease payments		25,468
Less - Amount representing interest		(4,842	)
Present value of net minimum lease payments		20,626
Less - Current obligations		(5,796	)
Long-term capital lease obligations		14,830

Rental expenses under operating leases for the years ended March 31, 2016, 2017 and 2018 were ¥101,932 million, ¥92,321 million and ¥112,934 million, respectively.

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TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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 March 31, 2018 are as follows:

Years ending March 31,	Yen in millions
2019		14,296
2020		11,375
2021		9,422
2022		8,403
2023		7,247
Thereafter		26,106
Total minimum future rentals		76,849

24. Other commitments and contingencies, concentrations and factors that may affect future operations:

Commitments -

Commitments outstanding as of March 31, 2018 for the purchase of property, plant and equipment, other assets and services totaled ¥368,483 million.

Guarantees -

Toyota enters into contracts with Toyota dealers to guarantee customers’ payments of their installment payables that arise 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 as of March 31, 2018, range from 1 month to 35 years; 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 March 31, 2018 is ¥2,830,749 million. Liabilities for guarantees totaling ¥6,901 million have been provided as of March 31, 2018. Under these guarantee contracts, Toyota is entitled to recover any amount paid by Toyota from the customers whose original obligations Toyota has guaranteed.

Legal proceedings -

From time-to-time, Toyota issues vehicle recalls and takes other safety measures including safety campaigns relating to its vehicles. Since 2009, Toyota issued safety campaigns related to the risk of floor mat entrapment of accelerator pedals and vehicle recalls related to slow-to-return or sticky accelerator pedals. In March 2014, Toyota entered into a Deferred Prosecution Agreement (“DPA”) to resolve an investigation by the U.S. Attorney for the Southern District of New York (“SDNY”) related to unintended acceleration in certain of its vehicles. The DPA provided for an independent monitor to review and assess policies and procedures relating to Toyota’s safety communications process, its process for sharing vehicle accident information internally and its process for preparing and sharing certain technical reports. In August 2017, the DPA and the monitorship terminated, and in October 2017, the criminal charge that had been filed in connection with the DPA was dismissed.

Personal injury and wrongful death claims involving allegations of unintended acceleration are pending in several consolidated proceedings in federal and state courts, as well as in individual cases in various other states. The judges in the consolidated federal action and the consolidated California state action have approved an

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TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Intensive Settlement Process (“ISP”) for such claims in those actions. Under the ISP, all individual claims within the consolidated actions are stayed pending completion of a process to assess whether they can be resolved on terms acceptable to the parties. Cases not resolved after completion of the ISP will then proceed to discovery and toward trial. Toyota has offered the ISP process to plaintiffs in other consolidated actions and in individual cases, as well.

Toyota has been named as a defendant in 33 economic loss class action lawsuits in the United States, which, together with similar lawsuits against Takata and other automakers, have been made part of a multi-district litigation proceeding in the United States District Court for the Southern District of Florida, arising out of allegations that airbag inflators manufactured by Takata are defective. Toyota has reached a settlement with the plaintiffs in the United States economic loss class actions. While the court approved the settlement on October 31, 2017, objectors have filed appeals, which have not yet been resolved. Toyota and other automakers have also been named in certain class actions filed in Mexico, Canada, Australia and Israel, as well as some other actions by states or territories of the United States. Those actions have not been settled and are being litigated.

Toyota self-reported a process gap in fulfilling certain emissions defect information reporting requirements of the U.S. Environmental Protection Agency (“EPA”) and California Air Resources Board, including updates on its repair completion rates for recalled emissions components and certain other reports concerning emissions related defects. Toyota is involved in discussions with the EPA and the SDNY’s Civil Division on this reporting issue. These agencies have requested certain follow-up information regarding this reporting issue, and Toyota is cooperating with the request.

Toyota also has various other pending legal actions and claims, including without limitation personal injury and wrongful death lawsuits and claims in the United States, and is subject to government investigations from-time-to-time.

Beyond the amounts accrued with respect to all aforementioned matters, Toyota is unable to estimate a range of reasonably possible loss, if any, for the pending legal matters because (i) many of the proceedings are in evidence gathering stages, (ii) significant factual issues need to be resolved, (iii) the legal theory or nature of the claims is unclear, (iv) the outcome of future motions or appeals is unknown and/or (v) the outcomes of other matters of these types vary widely and do not appear sufficiently similar to offer meaningful guidance. Based upon information currently available to Toyota, however, Toyota believes that its losses from these matters, if any, beyond the amounts accrued, would not have a material adverse effect on Toyota’s financial position, results of operations or cash flows.

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, 2020.

25. 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.

F-62

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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 and distributes sedans, minivans, compact cars, sport-utility vehicles, trucks and related parts and accessories. The Financial Services segment consists primarily of financing, and vehicle and equipment leasing operations to assist in the merchandising of the parent company and its affiliated companies products as well as other products. The All Other segment includes the design, manufacturing and sales of housing, telecommunications and other businesses.

The following tables present certain information regarding Toyota’s industry or geographic segments and overseas revenues by destination as of and for the years ended March 31, 2016, 2017 and 2018.

Segment operating results and assets -

As of and for the year ended March 31, 2016:

	Yen in millions
	Automotive		Financial Services		All Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		25,923,813		1,854,007		625,298		—			28,403,118
Inter-segment sales and transfers		53,603		42,217		552,089		(647,909	)		—
Total		25,977,416		1,896,224		1,177,387		(647,909	)		28,403,118
Operating expenses		23,528,418		1,556,998		1,110,880		(647,149	)		25,549,147
Operating income		2,448,998		339,226		66,507		(760	)		2,853,971
Assets		15,621,757		21,709,010		1,917,148		8,179,682			47,427,597
Investment in equity method investees		2,532,644		9,168		10,801		78,776			2,631,389
Depreciation expenses		900,434		697,991		27,412		—			1,625,837
Capital expenditure		1,389,289		2,638,111		41,826		(10,010	)		4,059,216

As of and for the year ended March 31, 2017:

	Yen in millions
	Automotive		Financial Services		All Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		25,032,229		1,783,697		781,267		—			27,597,193
Inter-segment sales and transfers		49,618		39,903		539,785		(629,306	)		—
Total		25,081,847		1,823,600		1,321,052		(629,306	)		27,597,193
Operating expenses		23,388,874		1,601,172		1,239,725		(626,950	)		25,602,821
Operating income		1,692,973		222,428		81,327		(2,356	)		1,994,372
Assets		16,156,496		22,507,613		2,170,498		7,915,579			48,750,186
Investment in equity method investees		2,745,437		9,792		—		90,193			2,845,422
Depreciation expenses		912,797		671,155		26,998		—			1,610,950
Capital expenditure		1,293,564		2,182,149		53,710		12,014			3,541,437

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TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

As of and for the year ended March 31, 2018:

	Yen in millions
	Automotive		Financial Services		All Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		26,347,229		1,959,234		1,073,047		—			29,379,510
Inter-segment sales and transfers		50,711		57,774		573,071		(681,556	)		—
Total		26,397,940		2,017,008		1,646,118		(681,556	)		29,379,510
Operating expenses		24,386,805		1,731,462		1,545,306		(683,925	)		26,979,648
Operating income		2,011,135		285,546		100,812		2,369			2,399,862
Assets		17,054,209		23,055,981		2,178,118		8,019,941			50,308,249
Investment in equity method investees		3,054,583		11,713		—		96,415			3,162,711
Depreciation expenses		976,735		723,061		34,237		—			1,734,033
Capital expenditure		1,381,122		2,166,805		62,447		(11,667	)		3,598,707

Geographic information -

As of and for the year ended March 31, 2016:

	Yen in millions
	Japan		North America		Europe		Asia		Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		8,588,437		10,822,772		2,507,292		4,475,623		2,008,994		—			28,403,118
Inter-segment sales and transfers		6,171,051		229,198		154,039		528,236		201,220		(7,283,744	)		—
Total		14,759,488		11,051,970		2,661,331		5,003,859		2,210,214		(7,283,744	)		28,403,118
Operating expenses		13,081,966		10,523,151		2,588,915		4,554,670		2,101,305		(7,300,860	)		25,549,147
Operating income		1,677,522		528,819		72,416		449,189		108,909		17,116			2,853,971
Assets		14,291,434		16,622,979		2,612,210		4,415,700		2,579,113		6,906,161			47,427,597
Long-lived assets		3,210,376		4,958,989		309,657		869,989		391,406		—			9,740,417

F-64

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

As of and for the year ended March 31, 2017:

	Yen in millions
	Japan		North America		Europe			Asia		Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		8,798,903		10,033,419		2,517,601			4,279,617		1,967,653		—			27,597,193
Inter-segment sales and transfers		6,031,965		205,672		163,438			540,204		193,421		(7,134,700	)		—
Total		14,830,868		10,239,091		2,681,039			4,819,821		2,161,074		(7,134,700	)		27,597,193
Operating expenses		13,628,623		9,927,897		2,693,283			4,384,642		2,102,380		(7,134,004	)		25,602,821
Operating income (loss)		1,202,245		311,194		(12,244	)		435,179		58,694		(696	)		1,994,372
Assets		14,791,969		17,365,237		2,846,469			4,486,021		2,819,935		6,440,555			48,750,186
Long-lived assets		3,376,157		5,274,928		313,182			828,619		404,223		—			10,197,109

As of and for the year ended March 31, 2018:

	Yen in millions
	Japan		North America		Europe		Asia		Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		9,273,672		10,347,266		2,940,243		4,497,374		2,320,955		—			29,379,510
Inter-segment sales and transfers		6,751,172		227,144		244,981		650,765		132,344		(8,006,406	)		—
Total		16,024,844		10,574,410		3,185,224		5,148,139		2,453,299		(8,006,406	)		29,379,510
Operating expenses		14,364,926		10,435,511		3,110,198		4,714,940		2,340,636		(7,986,563	)		26,979,648
Operating income		1,659,918		138,899		75,026		433,199		112,663		(19,843	)		2,399,862
Assets		15,797,024		16,936,704		3,346,179		4,893,582		2,986,661		6,348,099			50,308,249
Long-lived assets		3,511,663		5,179,139		359,355		797,435		420,081		—			10,267,673

“Other” consists of Central and South America, Oceania, Africa and the Middle East.

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.

Unallocated amounts included in assets represent assets held for corporate purposes, which mainly consist of cash and cash equivalents and marketable securities. Such corporate assets were ¥9,369,868 million, ¥9,177,953 million and ¥9,386,399 million, as of March 31, 2016, 2017 and 2018, respectively.

F-65

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Transfers between industry or geographic segments are made at terms and conditions in the ordinary course of business. In measuring the reportable segments’ income or losses, operating income consists of revenue less operating expenses.

Overseas revenues by destination -

The following information shows revenues that are attributed to countries based on location of customers, excluding customers in Japan. In addition to the disclosure requirements under U.S.GAAP, Toyota discloses this information in order to provide financial statements users with valuable information.

	Yen in millions
	For the years ended March 31,
	2016		2017		2018
North America		10,797,304		10,054,431		10,403,647
Europe		2,323,399		2,341,364		2,730,915
Asia		4,292,800		4,414,236		4,793,110
Other		4,724,784		3,923,621		4,186,666

“Other” consists of Central and South America, Oceania, Africa and the Middle East, etc.

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TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Certain financial statements data on non-financial services and financial services businesses -

The financial data below presents separately Toyota’s non-financial services and financial services businesses.

Balance sheets -

	Yen in millions
	March 31,
	2017			2018
Assets
Non-Financial Services Businesses
Current assets
Cash and cash equivalents		2,257,064			2,390,524
Marketable securities		1,439,944			1,546,459
Trade accounts and notes receivable, less allowance for doubtful accounts		2,191,594			2,304,676
Inventories		2,388,394			2,539,497
Prepaid expenses and other current assets		1,988,016			1,818,687
Total current assets		10,265,012			10,599,843
Investments and other assets		11,276,128			11,861,394
Property, plant and equipment		5,700,818			5,901,958
Total Non-Financial Services Businesses assets		27,241,958			28,363,195
Financial Services Business
Current assets
Cash and cash equivalents		738,011			661,745
Marketable securities		381,654			221,901
Finance receivables, net		6,196,649			6,348,306
Prepaid expenses and other current assets		831,924			957,122
Total current assets		8,148,238			8,189,074
Noncurrent finance receivables, net		9,012,222			9,481,618
Investments and other assets		850,862			1,019,574
Property, plant and equipment		4,496,291			4,365,715
Total Financial Services Business assets		22,507,613			23,055,981
Eliminations		(999,385	)		(1,110,927	)
Total assets		48,750,186			50,308,249

Assets in the non-financial services include unallocated corporate assets.

F-67

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	Yen in millions
	March 31,
	2017			2018
Liabilities
Non-Financial Services Businesses
Current liabilities
Short-term borrowings		669,947			541,968
Current portion of long-term debt		196,227			179,994
Accounts payable		2,540,078			2,556,393
Accrued expenses		3,038,218			2,980,981
Income taxes payable		203,101			429,616
Other current liabilities		1,512,662			1,797,724
Total current liabilities		8,160,233			8,486,676
Long-term liabilities
Long-term debt		590,366			642,691
Accrued pension and severance costs		890,684			917,133
Other long-term liabilities		1,206,427			1,111,843
Total long-term liabilities		2,687,477			2,671,667
Total Non-Financial Services Businesses liabilities		10,847,710			11,158,343
Financial Services Business
Current liabilities
Short-term borrowings		4,605,389			4,929,478
Current portion of long-term debt		4,129,005			4,053,538
Accounts payable		33,283			40,251
Accrued expenses		117,773			145,127
Income taxes payable		20,473			32,711
Other current liabilities		833,813			870,634
Total current liabilities		9,739,736			10,071,739
Long-term liabilities
Long-term debt		9,491,504			9,574,118
Accrued pension and severance costs		14,386			14,049
Other long-term liabilities		987,289			678,858
Total long-term liabilities		10,493,179			10,267,025
Total Financial Services Business liabilities		20,232,915			20,338,764
Eliminations		(999,392	)		(1,110,934	)
Total liabilities		30,081,233			30,386,173
Mezzanine equity		485,877			491,974
Total Toyota Motor Corporation shareholders’ equity		17,514,812			18,735,982
Noncontrolling interests		668,264			694,120
Total shareholders’ equity		18,183,076			19,430,102
Total liabilities, mezzanine equity and shareholders’ equity		48,750,186			50,308,249

F-68

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Statements of income -

	Yen in millions
	For the years ended March 31,
	2016			2017			2018
Non-Financial Services Businesses
Net revenues		26,581,102			25,845,453			27,448,165
Costs and expenses
Cost of revenues		21,474,386			21,557,194			22,613,450
Selling, general and administrative		2,589,082			2,511,647			2,721,362
Total costs and expenses		24,063,468			24,068,841			25,334,812
Operating income		2,517,634			1,776,612			2,113,353
Other income (expense), net		117,930			200,370			222,326
Income before income taxes and equity in earnings of affiliated companies		2,635,564			1,976,982			2,335,679
Provision for income taxes		752,248			562,452			738,763
Equity in earnings of affiliated companies		327,167			360,130			467,718
Net income		2,210,483			1,774,660			2,064,634
Less - Net income attributable to noncontrolling interests		(117,544	)		(89,337	)		(89,533	)
Net income attributable to Toyota Motor Corporation - Non-Financial Services Businesses		2,092,939			1,685,323			1,975,101
Financial Services Business
Net revenues		1,896,224			1,823,600			2,017,008
Costs and expenses
Cost of revenues		1,181,437			1,221,268			1,320,348
Selling, general and administrative		375,561			379,904			411,114
Total costs and expenses		1,556,998			1,601,172			1,731,462
Operating income		339,226			222,428			285,546
Other income (expense), net		8,579			(5,618	)		(794	)
Income before income taxes and equity in earnings of affiliated companies		347,805			216,810			284,752
Provision for income taxes		126,319			66,583			(234,356	)
Equity in earnings of affiliated companies		1,932			1,930			2,365
Net income		223,418			152,157			521,473
Less - Net income attributable to noncontrolling interests		(3,963	)		(6,518	)		(2,589	)
Net income attributable to Toyota Motor Corporation - Financial Services Business		219,455			145,639			518,884
Eliminations		300			147			(2	)
Net income attributable to Toyota Motor Corporation		2,312,694			1,831,109			2,493,983

F-69

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Statements of cash flows -

	Yen in millions									Yen in millions
	For the year ended March 31, 2016									For the year ended March 31, 2017
	Non-Financial Services Businesses			Financial Services Business			Consolidated			Non-Financial Services Businesses			Financial Services Business			Consolidated
Cash flows from operating activities
Net income		2,210,483			223,418			2,434,211			1,774,660			152,157			1,926,985
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		927,846			697,991			1,625,837			939,795			671,155			1,610,950
Provision for doubtful accounts and credit losses		69,029			90,236			159,265			6,519			92,147			98,666
Pension and severance costs, less payments		8,300			533			8,833			21,796			1,457			23,253
Losses on disposal of fixed assets		33,293			36			33,329			30,461			212			30,673
Unrealized losses on available-for-sale securities, net		3,217			6,055			9,272			4,422			2,651			7,073
Deferred income taxes		(43,237	)		76,423			32,889			(59,668	)		6,504			(53,299	)
Equity in earnings of affiliated companies		(327,167	)		(1,932	)		(329,099	)		(360,130	)		(1,930	)		(362,060	)
Changes in operating assets and liabilities, and other		386,529			148,376			486,320			206,455			103,840			131,996
Net cash provided by operating activities		3,268,293			1,241,136			4,460,857			2,564,310			1,028,193			3,414,237
Cash flows from investing activities
Additions to finance receivables		—			(23,399,113	)		(13,549,278	)		—			(22,894,114	)		(13,636,694	)
Collection of and proceeds from sales of finance receivables		—			22,918,132			13,115,854			—			22,006,010			12,927,981
Additions to fixed assets excluding equipment leased to others		(1,265,174	)		(17,371	)		(1,282,545	)		(1,206,738	)		(17,140	)		(1,223,878	)
Additions to equipment leased to others		(155,931	)		(2,620,740	)		(2,776,671	)		(152,550	)		(2,165,009	)		(2,317,559	)
Proceeds from sales of fixed assets excluding equipment leased to others		41,154			993			42,147			40,189			1,049			41,238
Proceeds from sales of equipment leased to others		60,989			1,050,738			1,111,727			72,659			1,165,619			1,238,278
Purchases of marketable securities and security investments		(1,302,965	)		(894,512	)		(2,197,477	)		(2,104,202	)		(412,806	)		(2,517,008	)
Proceeds from sales of and maturity of marketable securities and security investments		2,471,876			943,939			3,415,815			1,435,267			466,274			1,901,541
Payment for additional investments in affiliated companies, net of cash acquired		628			—			628			44,274			—			44,274
Changes in investments and other assets, and other		(1,371,996	)		296,788			(1,062,744	)		582,649			(60,345	)		571,888
Net cash used in investing activities		(1,521,419	)		(1,721,146	)		(3,182,544	)		(1,288,452	)		(1,910,462	)		(2,969,939	)
Cash flows from financing activities
Proceeds from issuance of long-term debt		110,691			4,815,323			4,845,872			111,727			4,541,541			4,603,446
Payments of long-term debt		(71,758	)		(4,127,178	)		(4,176,202	)		(82,840	)		(3,773,644	)		(3,845,554	)
Increase (decrease) in short-term borrowings		75,990			(132,852	)		(10,903	)		51,523			233,331			273,037
Proceeds from issuance of class shares		474,917			—			474,917			—			—			—
Dividends paid to Toyota Motor Corporation class shareholders		(1,225	)		—			(1,225	)		(3,697	)		—			(3,697	)
Dividends paid to Toyota Motor Corporation common shareholders		(704,728	)		—			(704,728	)		(634,475	)		—			(634,475	)
Dividends paid to noncontrolling interests		(73,129	)		—			(73,129	)		(63,936	)		—			(63,936	)
Reissuance (repurchase) of treasury stock, and other		(778,173	)		—			(778,173	)		(703,986	)		—			(703,986	)
Net cash provided by (used in) financing activities		(967,415	)		555,293			(423,571	)		(1,325,684	)		1,001,228			(375,165	)
Effect of exchange rate changes on cash and cash equivalents		(142,301	)		(57,570	)		(199,871	)		(11,262	)		(2,224	)		(13,486	)
Net increase (decrease) in cash and cash equivalents		637,158			17,713			654,871			(61,088	)		116,735			55,647
Cash and cash equivalents at beginning of year		1,680,994			603,563			2,284,557			2,318,152			621,276			2,939,428
Cash and cash equivalents at end of year		2,318,152			621,276			2,939,428			2,257,064			738,011			2,995,075

F-70

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	Yen in millions
	For the year ended March 31, 2018
	Non-Financial Services Businesses			Financial Services Business			Consolidated
Cash flows from operating activities
Net income		2,064,634			521,473			2,586,106
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		1,010,972			723,061			1,734,033
Provision for doubtful accounts and credit losses		(74	)		76,143			76,069
Pension and severance costs, less payments		5,027			(741	)		4,286
Losses on disposal of fixed assets		35,010			279			35,289
Unrealized losses on available-for-sale securities, net		459			387			846
Deferred income taxes		64,143			(302,103	)		(237,961	)
Equity in earnings of affiliated companies		(467,718	)		(2,365	)		(470,083	)
Changes in operating assets and liabilities, and other		205,434			299,709			481,424
Net cash provided by operating activities		2,917,887			1,315,843			4,210,009
Cash flows from investing activities
Additions to finance receivables		—			(25,153,088	)		(15,058,516	)
Collection of and proceeds from sales of finance receivables		—			24,117,335			14,046,312
Additions to fixed assets excluding equipment leased to others		(1,276,788	)		(14,329	)		(1,291,117	)
Additions to equipment leased to others		(155,114	)		(2,152,476	)		(2,307,590	)
Proceeds from sales of fixed assets excluding equipment leased to others		70,755			1,065			71,820
Proceeds from sales of equipment leased to others		63,402			1,147,870			1,211,272
Purchases of marketable securities and security investments		(2,273,805	)		(779,111	)		(3,052,916	)
Proceeds from sales of and maturity of marketable securities and security investments		1,762,189			761,349			2,523,538
Payment for additional investments in affiliated companies, net of cash acquired		(576	)		—			(576	)
Changes in investments and other assets, and other		260,015			(106,597	)		197,681
Net cash used in investing activities		(1,549,922	)		(2,177,982	)		(3,660,092	)
Cash flows from financing activities
Proceeds from issuance of long-term debt		212,387			4,666,579			4,793,939
Payments of long-term debt		(170,072	)		(4,314,294	)		(4,452,338	)
Increase (decrease) in short-term borrowings		(122,222	)		461,052			347,738
Proceeds from issuance of class shares		—			—			—
Dividends paid to Toyota Motor Corporation class shareholders		(6,194	)		—			(6,194	)
Dividends paid to Toyota Motor Corporation common shareholders		(620,698	)		—			(620,698	)
Dividends paid to noncontrolling interests		(63,764	)		—			(63,764	)
Reissuance (repurchase) of treasury stock, and other		(447,818	)		—			(447,818	)
Net cash provided by (used in) financing activities		(1,218,381	)		813,337			(449,135	)
Effect of exchange rate changes on cash and cash equivalents		(16,124	)		(27,464	)		(43,588	)
Net increase (decrease) in cash and cash equivalents		133,460			(76,266	)		57,194
Cash and cash equivalents at beginning of year		2,257,064			738,011			2,995,075
Cash and cash equivalents at end of year		2,390,524			661,745			3,052,269

F-71

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

26. Per share amounts:

Reconciliations of the differences between basic and diluted net income attributable to Toyota Motor Corporation per common share for the years ended March 31, 2016, 2017 and 2018 are as follows:

	Yen in millions			Thousands of shares		Yen
	Net income attributable to Toyota Motor Corporation			Weighted- average common shares		Net income attributable to Toyota Motor Corporation per common share
For the year ended March 31, 2016
Net income attributable to Toyota Motor Corporation		2,312,694
Accretion to Mezzanine equity		(3,638	)
Dividends to Toyota Motor Corporation Model AA Class Shareholders		(2,449	)
Basic net income attributable to Toyota Motor Corporation per common share		2,306,607			3,111,306		741.36
Effect of dilutive securities
Model AA Class Shares		6,087			32,429
Assumed exercise of dilutive stock options		(21	)		1,212
Diluted net income attributable to Toyota Motor Corporation per common share		2,312,673			3,144,947		735.36
For the year ended March 31, 2017
Net income attributable to Toyota Motor Corporation		1,831,109
Accretion to Mezzanine equity		(4,849	)
Dividends to Toyota Motor Corporation Model AA Class Shareholders		(4,946	)
Basic net income attributable to Toyota Motor Corporation per common share		1,821,314			3,008,088		605.47
Effect of dilutive securities
Model AA Class Shares		9,795			47,100
Assumed exercise of dilutive stock options		(6	)		638
Diluted net income attributable to Toyota Motor Corporation per common share		1,831,103			3,055,826		599.22
For the year ended March 31, 2018
Net income attributable to Toyota Motor Corporation		2,493,983
Accretion to Mezzanine equity		(4,849	)
Dividends to Toyota Motor Corporation Model AA Class Shareholders		(7,442	)
Basic net income attributable to Toyota Motor Corporation per common share		2,481,692			2,947,365		842.00
Effect of dilutive securities
Model AA Class Shares		12,291			47,100
Assumed exercise of dilutive stock options		(4	)		301
Diluted net income attributable to Toyota Motor Corporation per common share		2,493,979			2,994,766		832.78

F-72

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

In addition to the disclosure requirements under U.S.GAAP, Toyota discloses the information below in order to provide financial statements users with valuable information.

The following table shows Toyota Motor Corporation shareholders’ equity per share as of March 31, 2017 and 2018. Toyota Motor Corporation shareholders’ equity per share amounts are calculated by dividing Toyota Motor Corporation shareholders’ equities’ amount at the end of each period by the number of shares issued and outstanding, excluding treasury stock at the end of the corresponding period.

	Yen in millions		Thousands of shares		Yen
	Toyota Motor Corporation shareholders’ equity		Common shares issued and outstanding at the end of the  year (excluding treasury stock)		Toyota Motor Corporation shareholders’ equity per share
As of March 31, 2017		17,514,812		2,974,723		5,887.88
As of March 31, 2018		18,735,982		2,909,924		6,438.65

27. Fair value measurements:

In accordance with U.S.GAAP, Toyota classifies fair value into three levels of input as follows which are used to measure it.

Level 1:	Quoted prices in active markets for identical assets or liabilities
Level 2:	Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; valuation of assets or liabilities using inputs, other than quoted prices that are observable
Level 3:	Valuation of assets or liabilities using unobservable inputs which reflect the reporting entity’s assumptions

F-73

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table summarizes the fair values of the assets and liabilities measured at fair value on a recurring basis as of March 31, 2017 and 2018. Transfers between levels of the fair value are recognized at the end of their respective reporting periods:

	Yen in millions
	March 31, 2017
	Level 1		Level 2			Level 3			Total
Assets
Cash equivalents		41,876		891,606			—			933,482
Time deposits		—		600,000			—			600,000
Marketable securities and other securities investments
Public and corporate bonds		4,797,499		1,079,385			8,947			5,885,831
Common stocks		2,686,934		—			—			2,686,934
Other		18,191		73,246			—			91,437
Investments measured at net asset value		—		—			—			735,131
Derivative financial instruments		—		243,334			87			243,421
Total		7,544,500		2,887,571			9,034			11,176,236
Liabilities
Derivative financial instruments		—		(237,848	)		(7,609	)		(245,457	)
Total		—		(237,848	)		(7,609	)		(245,457	)

	Yen in millions
	March 31, 2018
	Level 1		Level 2			Level 3			Total
Assets
Cash equivalents		44,897		774,209			—			819,106
Time deposits		—		400,000			—			400,000
Marketable securities and other securities investments
Public and corporate bonds		4,778,019		1,523,227			7,488			6,308,734
Common stocks		2,582,115		—			—			2,582,115
Other		169,282		50,746			—			220,028
Investments measured at net asset value		—		—			—			516,951
Derivative financial instruments		—		257,795			9			257,804
Total		7,574,313		3,005,977			7,497			11,104,738
Liabilities
Derivative financial instruments		—		(194,935	)		(2,221	)		(197,156	)
Total		—		(194,935	)		(2,221	)		(197,156	)

Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.

F-74

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following is description of the assets and liabilities measured at fair value, information about the valuation techniques used to measure fair value, key inputs and significant assumptions:

Cash equivalents and time deposits -

Cash equivalents include money market funds and other investments with original maturities of three months or less. Cash equivalents classified in Level 2 include negotiable certificate of deposit with original maturities of three months or less. These are measured at fair value using primarily observable interest rates in the market. Time deposits consist of negotiable certificates of deposit with original maturities over three months. These are measured at fair value using primarily observable interest rates in the market.

Marketable securities and other securities investments -

Marketable securities and other securities investments include public and corporate bonds, common stocks and other investments. Public and corporate bonds include government bonds. Japanese bonds and foreign bonds including U.S., European and other bonds represent 28% and 72% (as of March 31, 2017) and 16% and 84% (as of March 31, 2018) of public and corporate bonds, respectively. Listed stocks on the Japanese stock markets represent 92% and 93% of common stocks as of March 31, 2017 and 2018, respectively. Toyota uses primarily quoted market prices for identical assets to measure fair value of these securities. “Other” includes investment trusts. Generally, Toyota uses quoted market prices for similar assets or quoted non-active market prices for identical assets to measure fair value of these securities. These assets are classified in Level 2.

Derivative financial instruments -

See note 21 to the consolidated financial statements about derivative financial instruments. Toyota primarily estimates the fair value of derivative financial instruments using industry-standard valuation models that require observable inputs including interest rates and foreign exchange rates, and the contractual terms. The usage of these models does not require significant judgment to be applied. These derivative financial instruments are classified in Level 2. In other certain cases when market data is not available, key inputs to the fair value measurement include quotes from counterparties, and other market data. Toyota assesses the reasonableness of changes of the quotes using observable market data. These derivative financial instruments are classified in Level 3. Toyota’s derivative fair value measurements consider assumptions about counterparty and Toyota’s own non-performance risk, using such as credit default probabilities.

F-75

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table summarizes the changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the periods ended March 31, 2016, 2017 and 2018:

	Yen in millions
	For the year ended March 31, 2016
	Marketable securities and other securities investments			Derivative financial instruments			Total
Balance at beginning of year		12,317			1,010			13,327
Total gains (losses)
Included in income (loss)		1			2,507			2,508
Included in other comprehensive income (loss)		(286	)		—			(286	)
Purchases and issuances		931			—			931
Settlements		(1,451	)		(479	)		(1,930	)
Other		(1,178	)		(189	)		(1,367	)
Balance at end of year		10,334			2,849			13,183

	Yen in millions
	For the year ended March 31, 2017
	Marketable securities and other securities investments			Derivative financial instruments			Total
Balance at beginning of year		10,334			2,849			13,183
Total gains (losses)
Included in income (loss)		(16	)		(7,310	)		(7,326	)
Included in other comprehensive income (loss)		60			—			60
Purchases and issuances		1,126			—			1,126
Settlements		(2,282	)		(2,693	)		(4,975	)
Other		(275	)		(368	)		(643	)
Balance at end of year		8,947			(7,522	)		1,425

	Yen in millions
	For the year ended March 31, 2018
	Marketable securities and other securities investments			Derivative financial instruments			Total
Balance at beginning of year		8,947			(7,522	)		1,425
Total gains (losses)
Included in income (loss)		17			805			822
Included in other comprehensive income (loss)		(12	)		—			(12	)
Purchases and issuances		3,860			—			3,860
Settlements		(4,739	)		4,320			(419	)
Other		(585	)		185			(400	)
Balance at end of year		7,488			(2,212	)		5,276

F-76

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

“Included in income (loss)” in marketable securities and other securities investments and derivative financial instruments are included in “Other income (loss), net” and “Cost of financing operations” in the accompanying consolidated statements of income, respectively.

In the reconciliation table above, derivative financial instruments are presented net of assets and liabilities. “Other” includes the currency translation adjustments for the years ended March 31, 2016, 2017 and 2018.

As of March 31, 2018, the Level 3 assets and liabilities measured at fair value on a recurring basis are not significant.

Certain assets and liabilities are measured at fair value on a nonrecurring basis. During the years ended March 31, 2017 and 2018, Toyota measured certain finance receivables at fair value of ¥47,999 million and ¥45,492 million based on the collateral value, resulting in gain of ¥2,405 million and loss of ¥4,190 million, respectively. This fair value measurement on a nonrecurring basis is classified in Level 3. See note 22 to the consolidated financial statements for the fair value measurement. These Level 3 financial assets are not significant.

F-77

ITEM 19. EXHIBITS

Index to Exhibits

1.1	Amended and Restated Articles of Incorporation of the Registrant (English translation) (incorporated by reference to Exhibit 1.1 to Toyota’s Annual Report on Form 20-F for the fiscal year ended March 31, 2015, filed with the SEC on June 24, 2015 (file no. 001-14948))
1.2	Amended and Restated Regulations of the Board of Directors of the Registrant (English translation)
1.3	Amended and Restated Regulations of the Audit  & Supervisory Board of the Registrant (English translation) (incorporated by reference to Exhibit 1.3 to Toyota’s Annual Report on Form 20-F for the fiscal year ended March  31, 2016, filed with the SEC on June 24, 2016 (file no. 001-14948))
2.1	Amended and Restated Share Handling Regulations of the Registrant (English translation) (incorporated by reference to Exhibit 2.1 to Toyota’s Annual Report on Form 20-F for the fiscal year ended March 31, 2015, filed with the SEC on June 24, 2015 (file no. 001-14948))
2.2	Form of Deposit Agreement among the Registrant, The Bank of New York (predecessor of The Bank of New York Mellon), as depositary, and the owners and beneficial owners from time to time of American Depositary Receipts, including the form of American Depositary Receipt (incorporated by reference to Exhibit 1 to Toyota’s Registration Statement on Form F-6, filed with the SEC on November 7, 2006 (file no. 333-138477))
2.3	Form of ADR (included in Exhibit 2.2)
8.1	List of Principal Subsidiaries (See “Organizational Structure” in “Item 4. Information on the Company”)
11.1	Code of Ethics of the Registrant applicable to its members of the board of directors and managing officers, including its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions (English translation)
12.1	Certifications of the Registrant’s President and Executive Vice President, both Members of the Board, pursuant to Section 302 of the Sarbanes-Oxley Act
13.1	Certifications of the Registrant’s President and Executive Vice President, both Members of the Board, pursuant to Section 906 of the Sarbanes-Oxley Act
15.1	Consent of Independent Registered Public Accounting Firm
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

136

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

TOYOTA MOTOR CORPORATION
By:	/s/    MASAYOSHI SHIRAYANAGI
Name:	Masayoshi Shirayanagi
Title:	Senior Managing Officer

Date: June 25, 2018

EX-1.2

Exhibit 1.2

(TRANSLATION)

REGULATIONS OF

THE BOARD OF DIRECTORS

OF

TOYOTA MOTOR CORPORATION

Established: February 27, 1952

As last amended on June 14, 2018

(Aa004-21)

Article 1. (Regulations of the Board of Directors)

Except as provided for in laws, ordinances or the Articles of Incorporation, matters relating to the Board of Directors of Toyota Motor Corporation (the “Company”) shall be governed by the provisions of these Regulations.

Article 2. (Purpose and Composition)

1. The Board of Directors shall be composed of all the Members of the Board of Directors and shall make decisions on the execution of business, supervise the execution of the duties of Members of the Board of Directors, and designate and dismiss the Representative Directors.

2. Audit & Supervisory Board Members shall be present and, whenever necessary, give their opinions at a meeting of the Board of Directors.

3. The Board of Directors is able to request Operating Officers and Executive General Managers to be present and give explanation or comment. However, Operating Officers and Executive General Managers are not able to participate in resolutions.

Article 3. (Person to Convene Meeting and Notice of Meeting)

1. A meeting of the Board of Directors shall be convened by the Chairman of the Board of Directors or the President, Member of the Board of Directors. In the event that the positions of both the Chairman of the Board of Directors and the President, Member of the Board of Directors are vacant or that both of them are prevented from convening, such meeting shall be convened by the Vice Chairman of the Board of Directors or other Members of the Board of Directors in that order and according to their rank, if there are multiple persons holding the same position.

2. Notice of convening a meeting of the Board of Directors shall be dispatched to each Member of the Board of Directors and each Audit & Supervisory Board Member at least three (3) days before the date of the meeting. In the case of urgency, however, such period may be shortened.

3. A meeting of the Board of Directors may be held without following the convening procedure, if consented to by all the Members of the Board of Directors and the Audit & Supervisory Board Members.

Article 4. (Chairmanship and Method of Adopting Resolutions)

1. The Chairman of the Board of Directors or the President, Member of the Board of Directors shall preside as chairman at a meeting of the Board of Directors. In the event that the positions of both the Chairman of the Board of Directors and the President, Member of the Board of Directors are vacant or that both of them are prevented from so presiding as chairman, the Vice Chairman of the Board of Directors or other Members of the Board of Directors shall preside as chairman in that order and according to their rank in the case that there are multiple persons holding the same position.

2. Resolutions of the Board of Directors shall be adopted at meetings at which a majority of the Members of the Board of Directors who are entitled to vote shall be present by a majority of the Members of the Board of Directors so present.

3. With respect to matters to be resolved by the Board of Directors, the Company shall deem that such matters were approved by a resolution of the Board of Directors when all the Members of the Board of Directors express their agreement in writing or by electronic records. Provided, however, that this provision shall not apply when any Audit & Supervisory Board Member expresses his/her objection to such matters.

4. With respect to matters to be reported to the Board of Directors, Members of the Board of Directors, Audit & Supervisory Board Members or Accounting Auditors shall not be required to report such matters to the Board of Directors when such matters are notified to all the Members of the Board of Directors and Audit & Supervisory Board Members.

Article 5. (Matters to be Resolved)

The following matters shall be subject to the resolution of the Board of Directors:

(1) Matters provided for in the Corporation Act or other laws or ordinances;

(2) Matters provided for in the Articles of Incorporation;

(3) Matters delegated to the Board of Directors by resolution of a general meeting of shareholders; and

(4) Other important managerial matters.

Article 6. (Matters to Be Reported)

Members of the Board of Directors shall report to the Board of Directors on the following matters:

(1) State of execution of business and such other matters as are provided for in the Corporation Act or other laws or ordinances; and

(2) Such other matters as the Board of Directors may deem necessary.

Article 7. (Meetings and Minutes)

1. A meeting of the Board of Directors shall be held in Japanese, minutes shall be prepared each time a meeting of the Board of Directors is held and such minutes shall be kept on file at the head office for ten years.

2. Minutes shall set forth matters provided for in the laws or ordinances and the Members of the Board of Directors and Audit & Supervisory Board Members present shall sign or affix their names and seals thereto.

3. Minutes shall be prepared in Japanese.

Article 8. (TMC Executives’ Meeting)

1. The Board of Directors shall establish TMC Executives’ meeting in which important matters are discussed in order to enhance efficiency and effectiveness of decision-making on management and execution of the company.

2. Matters related to the establishment, function changes, and abolition of TMC Executives’ meeting shall be submitted to the Board of Directors.

Supplementary Provisions

Article 1. (Effective Date)

These Regulations shall become effective as of June 14, 2018.

Article 2. (Amendment to Regulations)

Any amendment to these Regulations shall be made by a resolution of the Board of Directors.

MATTERS TO BE SUBMITTED TO THE BOARD OF DIRECTORS

General Rules of the “Matters To Be Submitted To The Board of Directors” (this “List”)

1. Pursuant to Article 5(1), (2) and (3) of the Regulations of the Board of Directors, matters and items defined in I-1, 2 and 3 of this List shall, without fail, be submitted to the Board of Directors.

2. In addition, pursuant to Article 5(4) of the Regulations of the Board of Directors, for matters and items defined in I-4 of this List, materiality must be appropriately judged and matters must be submitted accordingly to the Board of Directors.

3. Materiality shall be determined by the Executive(s) and Executive General Managers(s) responsible for their divisions, or persons in similar positions,* taking into consideration “submission standards,” “special rules,” “definitions” and “explanations” in this List. If the amount of transaction does not meet the submission standards at first, but there occurs a possibility that it may exceed such standards later on, such transaction shall be submitted to the Board of Directors at the time such possibility arises.

4. Pursuant to Article 6 of the Regulations of the Board of Directors, matters and items defined in II of this List shall be reported to the Board of Directors without delay.

* Business Unit/Company President or Executive Vice President, or Chief Officer / Chief Executive Officer or Deputy Chief Officer (TMC Executives’ meeting : Chairman of applicable meetings / Divisions not belonging to a group: Operating Officer or Executive General Manager responsible for the applicable division)

Standard for re-submission

If material changes are made to a matter previously submitted to the Board of Directors (such as 20% or more of increase in the amount approved by the Board of Directors), such matter shall be re-submitted to the Board of Directors.

I. Matters to be Resolved:

1. Matters provided for in the Companies Act or other laws or ordinances:

Classifications	Items	Relevant Articles of Applicable Law
Shares; stock acquisition rights:	Fixing the record date	Article 124
	Acquisition of the Company’s own shares held by its subsidiaries	Article 163
	Cancellation of the Company’s own shares	Article 178
	Share-splits	Article 183
	Free Allotment of shares	Article 186
	Reduction of the number of shares constituting one unit (tangen) of shares or abolishment of the provisions which define such number	Article 195
	Auction of shares held by shareholders whose whereabouts are unknown	Article 197
	Issuance of new shares	Article 201
	Disposition of the Company’s own shares	Article 201
	Approval of undertaking a contract for the total number of shares of subscription or similar ones with transfer restrictions	Articles 205 and 244

Classifications	Items	Relevant Articles of Applicable Law
	Issuance of stock acquisition rights	Article 240
	Approval of transferring stock acquisition rights with transfer restrictions	Article 265
	Acquisition of stock acquisition rights with acquisition clause	Articles 273 and 274
	Cancellation of stock acquisition rights	Article 276
General meetings of shareholders:	Free Allotment of stock acquisition rights	Article 278
	Convening of a general meeting of shareholders	Article 298
Board of Directors;
Members of the Board of Directors:	Designation and dismissal of Representative Directors	Article 362
	Approval of Members of the Board of Directors’ competing transactions	Article 365
	Approval of Members of the Board of Directors’ transactions for their own account	Article 365
	Approval of Members of the Board of Directors’ transactions involving conflict of interests	Article 365
Accounts:	Approval of financial statements, business reports and the accompanying detailed statements	Article 436
	Approval of extraordinary financial statements	Article 441
	Approval of consolidated financial statements	Article 444
	Reduction in the amount of capital (with conditions)	Article 447
	Reduction in the amount of reserves (with conditions)	Article 448
Bonds:	Offering of bonds	Article 362
	Issuance of bonds with stock acquisition rights	Article 240
Others:	Disposition and acquisition of important property*1	Article 362
	Borrowing of a large amount of money	Article 362
	Appointment and removal of managers and other important employees	Article 362
	Establishment, alteration and abolishment of branch offices and other important organizations	Article 362
	Development of a system to ensure the appropriateness of business operations of the Company and business group consisting of the parent company and subsidiaries	Article 362
	Other important business execution	Article 362

2. Matters provided for in the Articles of Incorporation:

Classifications	Items	Relevant Articles of the Articles of Incorporation
Shares:	Acquisition of Company’s own shares	Articles 7 and 46
	Acquisition of shares with acquisition clause	Article 19
	Selection of registration agent and its location of business	Article 9
	Amendment to the Share Handling Regulations	Article 10
	Approval of transferring shares with transfer restrictions	Article 21
General meeting of shareholders:	The order in which to assume chairmanship of a general meeting of shareholders	Article 25
Board of Directors; Members of the Board of Directors:	Appointment and removal of Members of the Board of Directors with specific titles	Article 33
	Amendment to the Regulations of the Board of Directors	Article 32
	Exemption of Members of the Board of Director from their liabilities	Article 35
Audit & Supervisory Board Members:	Exemption of Audit & Supervisory Board Members from their liabilities	Article 42
Accounts:	Distribution of interim dividends from surplus	Article 46
	Reduction in the amount of reserves	Article 46
	Other disposition of surplus	Article 46
	Distribution of dividends from surplus	Article 46
Others:	Appointment of Honorary Chairman and Senior Advisor	Article 34

3. Matters delegated to the Board of Directors by resolution of a general meeting of shareholders:

Classifications	Items
Shares:	Acquisition of Company’s own shares
	Issuance of new shares or stock acquisition rights on favorable conditions
Others:	Other matters delegated to the Board of Directors

4. Other important managerial matters:

Classifications	Items
Management:	Business Plan (profit planning, Corporate Hoshin, etc.)
	Important business alliances and important joint ventures
	Launching of new projects
	Short-form and simplified corporate splits
	Short-form and simplified share exchanges
	Simplified acquisition of an entire business of another company
	Approval of interim and quarterly accounts
	Approval of consolidated accounts (including interim and quarterly accounts)

Classifications	Items
	Institution of important legal actions and defending and responding to important disputes
	Establishment, changes in functions, and abolishment of TMC Executives’ meeting
	Other important matters
Personnel affairs; organization:	Members of the Board of Directors, Operating Officers, and Executive General Managers’ (jyomu riji) assumption of offices in other companies (in the case of new offices in listed companies only)
	Members of the Board of Directors and Operating Officers’ assumption of offices in important associations (in the case of new offices only)
	Assignment of Members of the Board of Directors and Operating Officers to take charge of group, field, plant, technical center and any other organizations similar thereto (Excluding changes in the same organization)
	Treatment and discipline relating to Members of the Board of Directors and Operating Officers
	Appointment and removal of Operating Officers
	Appointment and removal of Senior Technical Executive (gikan) and Advisor (komon)
	Approval of Operating Officers’ competing transactions
	Approval of Operating Officers’ transactions for their own account
	Approval of Operating Officers’ transactions involving conflict of interests
	Changes in important working conditions
	Other important matters
Production; Sales; Technology development:	Long-term or annual production, shipment or sales plans
	Long-term or annual equipment plans
	Licensing, acquisition or transfer of important intellectual property rights
	Other important matters
Group management:	Incorporation, dissolution, acquisition and transfer of subsidiaries
	Important group managerial matters
	Other important matters
Others:	Other important managerial matters

II. Matters to be reported:

Items	Relevant Articles of Applicable Law
State of execution of business	Companies Act Article 363
Important facts about a competing transaction	Article 365

Items	Relevant Articles of Applicable Law
Important facts about any Member of the Board of Director’s transactions for his/her own accounts	Article 365
Important facts about any transactions involving conflict of interests	Article 365
Members of the Board of Directors, Operating Officers and Executive General Managers’ (jyomu riji) retirement from offices in other companies (Listed companies only)
Members of the Board of Directors and Operating Officers’ retirement from offices in important associations
Audit & Supervisory Board Members’ assumption (in the case of new offices only) and retirement from offices in other companies (Listed companies only)
Audit & Supervisory Board Members’ assumption (in the case of new offices only) and retirement from offices in important associations
Monthly production/shipment/sales results
Important matters, such as incorporation of subsidiaries by a joint venture company
Management status of a system to ensure the appropriateness of business operations of the Company and business group consisting of the parent company and subsidiaries	Article 362
Other important matters

1. Out of “I. Matters to be Resolved” of the “Matters to be Submitted to the Board of Directors”, the matters described in “Others” in “1. Matters provided for in the Companies Act or other laws or ordinances” shall be submitted to the Board of Directors in accordance with the standards contained in this Appendix 1.

Appendix 1

Items	Standard
(1)   Disposition and acquisition of important property:
1   purchase and disposition of land (excluding land for business use)	5,000,000,000 Yen*2 or more per transaction
2   acquisition and transfer of leaseholds	5,000,000,000 Yen*3 or more per transaction
3   investments (excluding fund management investments)	5,000,000,000 Yen*4 or more per transaction
4   capital expenditure (excluding model change and renewal of aging assets)	30,000,000,000 Yen*5 or more per transaction
5   loans (excluding renewal of bills and notes, and loans as part of financial business)	5,000,000,000 Yen*6 or more per transaction, or loans outstanding of 5,000,000,000 Yen*6 or more per company

Items	Standard
6   discharge of debts	200,000,000 Yen or more per transaction
7   donations (excluding those via Japan Automobile Manufacturers Association, Inc.)	200,000,000 Yen or more per transaction
(2)   Borrowings of large amounts of money:
1   borrowing	5,000,000,000 Yen or more per transaction
2   guarantee of obligations	5,000,000,000 Yen*7 or more per transaction, or outstanding guarantee of obligation of 5,000,000,000 Yen*6 or more per company
(3)   Appointment and removal of managers and other important employees	Assignment of Executive General Manager (jyomu riji) and any other personnel similar thereto to take charge of group, field, plant, technical center and any other organizations similar thereto (excluding transfers within the same organization)
	Appointment of operating officers at membership companies (limited liability company, etc.) and limited liability partnerships, and removal of operating officers at such companies*8
(4)   Establishment, alteration and abolishment of branch offices and other important organizations	Establishment, alteration and abolishment of group, field, plant, technical center and any other similar organizations

(*1) Disposition and Acquisition of important property

Important matters will be submitted at the initial phase (overview, the maximum amount of money, etc.).

Deliberate a project as a whole (delegate the decision on details to the operating side).

Multiple year appropriation is allowed if necessary. (Report is required.)

(*2) Purchase and disposition of land

In the case where any of the acquisition price, book value, or transaction price is 5,000,000,000 Yen or more per transaction, a submission shall be required.

(*3) Definition of “leaseholds”

“Leasehold” is a right which is obtained by a temporary payment of concession money as a setup fee for leasehold, when leasing land for the purpose of owning buildings (excluding parking space, etc.).

(*4) Special rules regarding “investment”

(I) Even if the amount is below 5,000,000,000 Yen, if the conditions match either of the following, a submission shall be required.

(i) Investment made to subsidiaries which were insolvent as of the end of the most recent closing date of accounts or those anticipated to become insolvent during their current fiscal period.

(ii) Investment made to companies other than the subsidiaries.

(II) Notwithstanding (I) above, such submission may be omitted by the decision(s) of the Executive Vice President(s) whose main duties are in relation to the division in charge of the case concerned and to the accounting areas, in the case where the amount of investment is below 2,000,000,000 Yen.

(III) After the investment is made, if such investment comes to fall under (i) or (ii) in (I) above, whether or not to submit such matter to the Board of Directors shall be decided by the Executive Vice President(s) as defined in (II) above.

(*5) Capital expenditure

1 Explanation of “capital expenditure”

The main coverage of this item shall be those such as the construction of new factories, production lines, buildings and sales bases, among others, which change the structure of business and may possibly pose new management risks.

2 Special rules regarding “capital expenditure”

(I) Even if the amount is below 30,000,000,000 Yen, if new factories are constructed, a submission shall be required.

(II) In making a submission, attention shall be made to show a project overall picture such as vehicles and unit components.

(*6) Special rules regarding “loans”

(I) Even if the amount is below 5,000,000,000 Yen, if the conditions match any of the following, a submission shall be required.

(i) Loans made available to companies which were insolvent as at the end of the most recent closing date of accounts or those anticipated to become insolvent during their current fiscal period (whether or not such finance is directed to the subsidiaries).

(ii) Loans made available to companies (excluding the subsidiaries) which have their head office located in countries or areas having a country risk rating below A.

(iii) Unsecured loans made available to companies other than the subsidiaries.

(II) Notwithstanding (I) above, such submission may be omitted by the decision(s) of the Executive Vice President(s) whose main duties are in relation to the division in charge of the case concerned and to the accounting areas, in the case where amounts of loans and loans outstanding are below 2,000,000,000 Yen.

(III) After the loan is made available, if such loan comes to fall under (i), (ii) or (iii) in (I) above, whether or not to submit such matter to the Board of Directors shall be decided by the Executive Vice President(s) as defined in (II) above.

(*7) Special rules regarding “guarantee of obligations”

(I) Even if the amount is below 5,000,000,000 Yen, if the conditions match either of the following, a submission shall be required.

(i) Guarantee of obligation made to subsidiaries which were insolvent as at the end of the most recent closing date of accounts or those anticipated to become insolvent during their current fiscal period.

(ii) Guarantee of obligation made to companies other than the subsidiaries.

(II) Notwithstanding (I) above, such submission may be omitted by the decision(s) of the Executive Vice President(s) whose main duties are in relation to the division in charge of the case concerned and to the accounting areas, in the case where amounts of guarantee of obligation and outstanding guarantee of obligation are below 2,000,000,000 Yen.

(III) After the guarantee of obligation is made, if such guarantee comes to fall under (i) or (ii) in (I) above, whether or not to submit such matter to the Board of Directors shall be decided by the Executive Vice President(s) as defined in (II) above.

(*8) Special rules regarding “membership companies (limited liability company, etc.) and limited liability partnerships”

(I) An overall business plan must be submitted when a membership company (LLC, etc.) and LLP is established or investment is newly made.

(II) If material changes are made to a business plan previously submitted to a meeting of the Board of Directors, such matters shall be re-submitted to a meeting of the Board of Directors.

2. Out of “I. Matters to be Resolved” of the “Matters to be Submitted to the Board of Directors”, the matters relating to “Management” in “4. Other important managerial matters” shall be submitted to the Board of Directors in accordance with the standards contained in this Appendix 2.

Appendix 2

Items	Standard
(1)   Business Plan (profit planning, Corporate Hoshin, etc.):
1   Definition of “Business Plan”
(1)   “profit planning”	Short-term profit planning (revenue, capital expenditure, R&D cost, etc.), Sales and Production Plan, (initial annual plan, etc.), Mid-tem profit planning, Vision, etc.
(2)   “Corporate Hoshin”	company-wide, Region/Company, Function
(2)   Important business alliances and important joint ventures:
1   Definition of “business alliance” and “joint venture”
(1)   “Business alliance”	Used when businesses such as sales tie-up, continuous provision of products, acceptance/entrustment of production, joint production, joint development, or technology licensing, etc. are commenced or terminated, or material changes with respect to these businesses are made.
(2)   “Joint venture”	Used when Toyota Motor Corporation (“TMC”) and a business partner or its subsidiary make joint investment to establish or acquire a joint venture company and have such joint venture company conduct businesses for the purposes of the subject joint venture.
2   Materiality standards for “important business alliances and important joint ventures” *1
(1)   Monetary standard	In case TMC plans to spend 5,000,000,000 Yen or more in total for loan and investment, capital expenditures, etc. at the beginning of the plan.
(2)   Qualitative standard	In case the subject business alliance or joint venture (including with a dominant competitor) may materially affect TMC’s management in terms of sales, profits, etc.
(3)   Launching of new projects:
1   Definition of “launching of new projects”	Used when TMC launches a business not relating to its existing business areas (such as automobiles, industrial vehicles, housing, information and telecommunication, boats and ships, airplanes, biotechnology or financial businesses.)

Items	Standard
	Other than launch of business by TMC itself, launch of business through business alliance or through its subsidiary or joint venture company (excluding companies in which TMC invests without being required to include such companies’ operating results in its consolidated financial statements pursuant to the Financial Instruments and Exchange Act) shall also be considered as “launching of new projects.”
(4)   Institution of important legal actions and defending and responding to important disputes *2
1   Monetary standard	In case that value of subjects (including rights and obligations) that are subject to legal action (in a response to legal action, reasonable amount for settlement) is 2,000,000,000 Yen or more.
2   Qualitative standard	In case of legal actions such as filing of legal action with respect to important intellectual property rights or dispute with a public entity with respect to environmental issues, which may materially affect TMC’s management, business, rights or brand image, etc.

(*1) Materiality standards for “important business alliances and important joint ventures”

If a business alliance or joint venture falls under either the “Monetary standard” or “Qualitative standard”, it shall be submitted to the Board of Directors.

(*2) Materiality standards for “institution of important legal actions and defending against and responding to important disputes”

If a case falls under either “Monetary standard” or “Qualitative standard”, it shall be submitted to the Board of Directors.

3. Out of “I. Matters to be Resolved” of the “Matters to be Submitted to the Board of Directors”, the matters relating to “Personnel affairs, organization” in “4. Other important managerial matters” shall be submitted to the Board of Directors in accordance with the standards contained in this Appendix 3.

Appendix 3

Items	Standard
(1)   Members of the Board of Directors and Operating Officers’ assumption of offices in important associations (in case of new offices only)	In case that Members of the Board of Directors or Operating Officers of TMC assume or resign from a position such as chairman, board chairman, committee chairman, etc. of Japan Business Federation, The Japan Chamber of Commerce and Industry, Japan Association of Corporate Executives, Japan Automobile Manufacturer Association, Counsel of government authorities or other important associations comparable to these associations
(2)   Changes in important working conditions:	In case that certain actions such as changes in working conditions with respect to employment which may materially affect TMC’s management and employees

4. Out of “I. Matters to be Resolved” of the “Matters to be Submitted to the Board of Directors”, the matters relating to “Production; Sales; Technology development” in “4. Other important managerial matters” shall be submitted to the Board of Directors in accordance with the standards contained in this Appendix 4.

Appendix 4

Materiality standard for “licensing, acquisition or transfer of important intellectual property rights”

Certain actions such as licensing of intellectual property rights relating to TMC’s essential technologies or transfer of TMC’s trademark, which may materially affect TMC’s management, such licensing, transfer or acquisition shall be deemed material.

5. Out of “I. Matters to be Resolved” of the “Matters to be Submitted to the Board of Directors”, the matters relating to “Group Management” in “4. Other important managerial matters” shall be submitted to the Board of Directors in accordance with the standards contained in this Appendix 5.

Appendix 5

Items	Standard
(1)   Incorporation, dissolution, acquisition and transfer of subsidiaries:
1   Definition of “incorporation, dissolution, acquisition and transfer of subsidiaries”
(1)   “Subsidiary”	A joint stock company of which TMC holds a majority of its voting rights, or other companies judged to be a subsidiary of TMC pursuant to Article 3 of the Implementation Rules of the Companies Act. (including a membership company such as a limited liability company, a partnership, any other business entities similar thereto)
(2)   “Incorporation”	Used when a subsidiary is established.
(3)   “Dissolution”	Used when a subsidiary is dissolved.
(4)   “Acquisition”	Used when a subsidiary is obtained through, for example, acquisition of shares (excluding cases which fall under incorporation).
(5)   “Transfer”	Used when a company loses its status as a subsidiary of TMC through, for example, TMC’s sale of shares of the subsidiary (excluding cases which fall under dissolution).
2   Submission standard of “incorporation, dissolution, acquisition and transfer of subsidiaries”
(1)   Directly held subsidiary*1	Matters to be resolved
(2)   Principal subsidiary, not falling under (1) above*2	Matters to be resolved
(3)   Subsidiary with capital of 2,000,000,000 Yen or more, not falling under (1) or (2) above	Matters to be reported
(4)   Subsidiary, not falling under (1)-(3) above	Submission not necessary in principle

Items	Standard
(2)   Important group managerial matters*3
1   Monetary standard	In case a wholly owned subsidiary*i conducts Items 1~5 of “Disposition and acquisition of important property” as defined above, amounts, quantities, special rules, definitions and explanations of the same Items shall apply. However, such submission may be omitted, in the case where submission of a matter is a formality, the matter virtually requires no managerial decision (transfer of land/equipment conducted between wholly owned subsidiaries etc.) and the matter is judged not to have TMC’s group managerial materiality.
2   Qualitative standard	If in case of “Disposition and acquisition of important property”*ii, “Borrowing of a large amount of money”*iii, business alliance, joint venture or reorganization of business, etc., conducted by subsidiary of TMC, which may materially affect TMC’s group management and reputation*iv.

(*1) “Directly held subsidiary” shall mean a subsidiary of which TMC directly holds a majority of the total voting rights.

(*2) Examples of “principal subsidiary” are as follows:

(i) Subsidiary engaged in a new business

(ii) Subsidiary with a substantial amount of capital (5,000,000,000 Yen or more)

(iii) Subsidiary established as a result of a business alliance or joint venture with a dominant competitor

(iv) Subsidiary which was insolvent as of the end of the most recent closing date of accounts or that is anticipated to become insolvent during its current fiscal period (this shall apply only to acquisition)

(v) Other managerially important subsidiary

(*3) If a matter falls under either “Monetary standard” or “Qualitative standard”, it shall be submitted to the Board of Directors.

(*i) “Wholly owned subsidiary” shall mean a subsidiary of which TMC directly or indirectly holds all of the total voting rights.

(*ii) In conducting Items 1~7 of “Disposition and acquisition of important property” as defined above, materiality shall be determined with reference to amount, quantity, special rules, definition and explanation defined in the same Items.

(*iii) In conducting Items 1~2 of “Borrowing of a large amount of money” as defined above, materiality shall be determined with reference to amount, quantity and special rules defined in the same Items.

(*iv) With respect to other items, materiality shall be determined with reference to TMC’s submission standards of matters to be submitted to the Board of Directors.

6. Out of “II. Matters to be reported” of the “Matters to be Submitted to the Board of Directors”, the matters falling under “State of execution of business” shall be submitted to the Board of Directors in accordance with the standards contained in this Appendix 6.

Appendix 6

Items

Standard

(1)   Report of the execution status of business:

Improve contents of report to the supervision side while enhancing the decision-making process by operating officers (1) Progress of important investment in new businesses and risk taking status shall be reported as appropriate. (2) As for report by in-house company/region, the annual plans will be confirmed in the Hoshin. As for other organizations, report will be made by project. (Outside Board Member Meeting can be utilized.)

EX-11.1

Exhibit 11.1

The Code of Ethics for Directors and Operating Officers

Article 1. (Purpose)

This document comprises a code of ethics (the “Code”) for members of the board of directors and operating officers (presidents, executive vice presidents, senior managing officers and managing officers) (the “Officers”) of Toyota Motor Corporation (the “Company”) that sets forth the basic rules that, in addition to those outlined in “Guiding Principles at Toyota,” “Toyota Code of Conduct” and other guidelines and internal regulations of the Company, each Officer shall comply with in the performance of their professional management duties.

Article 2. (Objective)

This Code seeks to ensure honest and ethical conduct by all Officers, as well as their compliance with applicable laws and regulations.

Article 3. (Scope of Application)

This Code shall be applicable to all Officers.

Article 4. (Disclosure of this Code of Ethics)

This Code shall be appropriately disclosed in accordance with applicable laws and regulations.

Article 5. (Honest and Ethical Conduct)

1. Each Officer shall act honestly and ethically in the course of any business activity of the Company.

2. No Officer may engage in or otherwise enter into any act or transaction that gives rise to an actual or potential conflict of interest between such Officer and the Company without first reporting such matter to the Board of Directors and obtaining prior approval therefrom in accordance with the applicable provisions of the Companies Act of Japan and the internal regulations of the Company. Such Officer may not participate in the determination of the Board of Directors resolution relating to the granting of such approval.

Article 6. (Ensuring Fairness and Accuracy of Financial Disclosure; Appropriate Disclosure)

1. The chairman of the board of directors, president, member of the board of directors, accounting and financial officers and persons performing similar functions shall be responsible for ensuring that documents submitted to applicable governmental authorities and other information made public by the Company with respect to the Company’s financial position and financial statements are fair and readily comprehensible in content and the method of presentation, and that such documents and information are timely disclosed.

2. The chairman of the board of directors, president, member of the board of directors, accounting and financial officers and persons performing similar functions shall be responsible for establishing and maintaining disclosure controls and internal controls for documents and information specified in the previous paragraph.

3. In connection with the preparation of the Company’s financial statements, an Officer may not act in a way that may cause a material misunderstanding to or otherwise materially mislead any employee or independent public accountant involved in the preparation of such financial statements.

Article 7. (Compliance with Laws and Regulations)

The Officers shall comply with all applicable laws, rules and regulations, including those related to the prohibition of insider trading, in each of the countries and regions in which the Company operates.

Article 8. (Reporting of Unlawful Acts and Unethical Conduct)

1. Each Officer shall promptly report to the Board of Directors, Representative Director, Disclosure Committee, Sustainability Meeting, or other responsible division or person appointed by these committees, in the event that such Officer or other Officers have acted in violation of the applicable laws or ethics.

2. Officers may contact the “Compliance Hotline” set up by the Company at an outside law firm with any legal or ethical inquiries or to report any breach of applicable laws or ethics. Upon receiving such report or other such inquiry, the designated law firm shall conduct necessary investigations and provide a report or recommendation to the Company while ensuring the anonymity of the person making such a contact. The Company shall then take appropriate measures based on such report or recommendation.

Article 9. (Accountability for Adherence to the Code)

1. Each Officer recognizes that legal compliance and ethical conduct form the basis for all corporate activities, and is obligated to comply with this Code.

2. The Company shall take appropriate disciplinary action in accordance with applicable laws and internal regulations of the Company against any Officer who acts in violation of the Code.

3. Officers who are subject to disciplinary action pursuant to the previous paragraph may not participate in any meeting, relating to the determination of such disciplinary action, of the Board of Directors, Disclosure Committee, Sustainability Meeting, or other investigative committees appointed thereby.

Article 10. (Exemption)

An exemption from the Code shall only be granted pursuant to a resolution of the Board of Directors, and any such exemption shall be appropriately disclosed in accordance with applicable laws.

Article 11. (Amendment)

1. Any amendment of this Code shall only be effected by a resolution of the Board of Directors.

2. The Sustainability Meeting shall be responsible for regularly evaluating the appropriateness of this Code, and for making recommendations relating to any necessary amendments of the Code to the Board of Directors.

Supplementary Provision

Article 1. (Effective Date)

This Code shall become effective on January 1, 2018.

EX-12.1

Exhibit 12.1

CERTIFICATIONS

I, Akio Toyoda, certify that:

1. I have reviewed this annual report on Form 20-F of Toyota Motor Corporation (the “Company”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4. The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the Audit & Supervisory Board (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: June 25, 2018

/S/    AKIO TOYODA        

Akio Toyoda

President, Member of the Board of Directors

Toyota Motor Corporation

CERTIFICATIONS

I, Koji Kobayashi, certify that:

1. I have reviewed this annual report on Form 20-F of Toyota Motor Corporation (the “Company”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4. The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the Audit & Supervisory Board (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: June 25, 2018

/S/    KOJI KOBAYASHI      

Koji Kobayashi

Executive Vice President, Member of the Board of Directors

Toyota Motor Corporation

EX-13.1

Exhibit 13.1

CERTIFICATION

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of Toyota Motor Corporation, a Japanese corporation (the “Company”), does hereby certify that, to such officer’s knowledge:

1. The accompanying Annual Report of the Company on Form 20-F for the period ended March 31, 2018 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/    AKIO TOYODA
Name:	Akio Toyoda
Title:	President, Member of the Board of Directors
Date: June 25, 2018
By:	/s/    KOJI KOBAYASHI
Name:	Koji Kobayashi
Title:	Executive Vice President, Member of the Board of Directors
Date: June 25, 2018

(A signed original of this written statement required by Section 906 has been provided to Toyota Motor Corporation and will be retained by Toyota Motor Corporation and furnished to the U.S. Securities and Exchange Commission or its staff upon request.)

EX-15.1

Exhibit 15.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (No. 333-125977, 333-107322, 333-143955, 333-160081 and 333-175377) of Toyota Motor Corporation of our report dated June 25, 2018 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in this Form 20-F.

/s/ PricewaterhouseCoopers Aarata LLC

Nagoya, Japan

June 25, 2018

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Document and Entity Information	12 Months Ended
	Mar. 31, 2018 shares
Document Type	20-F
Amendment Flag	false
Document Period End Date	Mar. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Trading Symbol	TM
Entity Registrant Name	TOYOTA MOTOR CORP/
Entity Central Index Key	0001094517
Current Fiscal Year End Date	--03-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding	2,909,923,992

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CONSOLIDATED BALANCE SHEETS - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Current assets
Cash and cash equivalents	¥ 3,052,269	¥ 2,995,075
Time deposits	901,244	1,082,654
Marketable securities	1,768,360	1,821,598
Trade accounts and notes receivable, less allowance for doubtful accounts of ¥50,110 million in 2017 and ¥25,925 million in 2018	2,219,562	2,115,938
Finance receivables, net	6,348,306	6,196,649
Other receivables	489,338	436,867
Inventories	2,539,789	2,388,617
Prepaid expenses and other current assets	833,788	796,297
Total current assets	18,152,656	17,833,695
Noncurrent finance receivables, net	9,481,618	9,012,222
Investments and other assets
Marketable securities and other securities investments	7,999,323	7,679,928
Affiliated companies	3,162,917	2,845,639
Employees receivables	22,562	25,187
Other	1,221,500	1,156,406
Total investments and other assets	12,406,302	11,707,160
Property, plant and equipment
Land	1,404,611	1,379,991
Buildings	4,659,753	4,470,996
Machinery and equipment	11,535,381	11,357,340
Vehicles and equipment on operating leases	5,934,393	5,966,579
Construction in progress	509,851	474,188
Total property, plant and equipment, at cost	24,043,989	23,649,094
Less - Accumulated depreciation	(13,776,316)	(13,451,985)
Total property, plant and equipment, net	10,267,673	10,197,109
Total assets	50,308,249	48,750,186
Current liabilities
Short-term borrowings	5,154,913	4,953,682
Current portion of long-term debt	4,186,277	4,290,449
Accounts payable	2,586,657	2,566,382
Other payables	1,048,216	936,938
Accrued expenses	3,104,260	3,137,827
Income taxes payable	462,327	223,574
Other current liabilities	1,254,241	1,210,113
Total current liabilities	17,796,891	17,318,965
Long-term liabilities
Long-term debt	10,006,374	9,911,596
Accrued pension and severance costs	931,182	905,070
Deferred income taxes	1,118,165	1,423,726
Other long-term liabilities	533,561	521,876
Total long-term liabilities	12,589,282	12,762,268
Total liabilities	30,386,173	30,081,233
Mezzanine equity
Model AA Class Shares, no par value, authorized: 150,000,000 shares in 2017 and 2018; issued: 47,100,000 shares in 2017 and 2018	491,974	485,877
Toyota Motor Corporation shareholders' equity
Common stock, no par value, authorized: 10,000,000,000 shares in 2017 and 2018; issued: 3,262,997,492 shares in 2017 and 2018	397,050	397,050
Additional paid-in capital	487,502	484,013
Retained earnings	19,473,464	17,601,070
Accumulated other comprehensive income (loss)	435,699	640,922
Treasury stock, at cost, 288,274,636 shares in 2017 and 353,073,500 shares in 2018	(2,057,733)	(1,608,243)
Total Toyota Motor Corporation shareholders' equity	18,735,982	17,514,812
Noncontrolling interests	694,120	668,264
Total shareholders' equity	19,430,102	18,183,076
Commitments and contingencies
Total liabilities, mezzanine equity and shareholders' equity	¥ 50,308,249	¥ 48,750,186

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Trade accounts and notes receivable, allowance for doubtful accounts, current	¥ 25,925	¥ 50,110
Model AA Class Shares, no par value
Model AA Class Shares, authorized	150,000,000	150,000,000
Model AA Class Shares, issued	47,100,000	47,100,000
Common stock, no par value
Common stock, authorized	10,000,000,000	10,000,000,000
Common stock, issued	3,262,997,492	3,262,997,492
Treasury stock, shares	353,073,500	288,274,636
Total number of authorized shares for common stock and Model AA Class Shares	10,000,000,000	10,000,000,000

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CONSOLIDATED STATEMENTS OF INCOME - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Net revenues
Sales of products	¥ 27,420,276	¥ 25,813,496	¥ 26,549,111
Financing operations	1,959,234	1,783,697	1,854,007
Total net revenues	29,379,510	27,597,193	28,403,118
Costs and expenses
Cost of products sold	22,600,474	21,543,035	21,456,086
Cost of financing operations	1,288,679	1,191,301	1,149,379
Selling, general and administrative	3,090,495	2,868,485	2,943,682
Total costs and expenses	26,979,648	25,602,821	25,549,147
Operating income	2,399,862	1,994,372	2,853,971
Other income (expense)
Interest and dividend income	179,541	158,983	157,862
Interest expense	(27,586)	(29,353)	(35,403)
Foreign exchange gain (loss), net	22,664	33,601	(5,573)
Other income (loss), net	45,948	36,222	12,524
Total other income (expense)	220,567	199,453	129,410
Income before income taxes and equity in earnings of affiliated companies	2,620,429	2,193,825	2,983,381
Provision for income taxes	504,406	628,900	878,269
Equity in earnings of affiliated companies	470,083	362,060	329,099
Net income	2,586,106	1,926,985	2,434,211
Less - Net income attributable to noncontrolling interests	(92,123)	(95,876)	(121,517)
Net income attributable to Toyota Motor Corporation	¥ 2,493,983	¥ 1,831,109	¥ 2,312,694
Net income attributable to Toyota Motor Corporation per common share
- Basic	¥ 842.00	¥ 605.47	¥ 741.36
- Diluted	832.78	599.22	735.36
Cash dividends per common share	¥ 220.00	¥ 210.00	¥ 210.00

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CONSOLIDATED STATEMENTS OF INCOME (Parenthetical) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Net income attributable to common shareholders	¥ 2,481,692	¥ 1,821,314
Dividend and accretion to Model AA Class Shares	¥ 12,291	¥ 9,795

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Net income	¥ 2,586,106	¥ 1,926,985	¥ 2,434,211
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments	(120,606)	(57,926)	(395,352)
Unrealized gains (losses) on securities	(94,559)	4,279	(312,192)
Pension liability adjustments	22,315	93,312	(209,181)
Other comprehensive income (loss), net of tax	(192,850)	39,665	(916,725)
Total comprehensive income	2,393,256	1,966,650	1,517,486
Less - Comprehensive income attributable to noncontrolling interests	(93,096)	(103,161)	(71,569)
Comprehensive income attributable to Toyota Motor Corporation	¥ 2,300,160	¥ 1,863,489	¥ 1,445,917

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - JPY (¥) ¥ in Millions	Total	Common stock	Additional paid-in capital	Retained earnings	Accumulated other comprehensive income (loss)	Treasury stock, at cost	Total Toyota Motor Corporation shareholders' equity	Noncontrolling interests
Balances at Mar. 31, 2015	¥ 17,647,329	¥ 397,050	¥ 547,054	¥ 15,591,947	¥ 1,477,545	¥ (1,225,465)	¥ 16,788,131	¥ 859,198
Equity transaction with noncontrolling interests and other	5,709		1,972	(97)			1,875	3,834
Comprehensive income
Net income	2,434,211			2,312,694			2,312,694	121,517
Other comprehensive income (loss)
Foreign currency translation adjustments	(395,352)				(362,965)		(362,965)	(32,387)
Unrealized gains (losses) on securities	(312,192)				(302,620)		(302,620)	(9,572)
Pension liability adjustments	(209,181)				(201,192)		(201,192)	(7,989)
Total comprehensive income	1,517,486						1,445,917	71,569
Accretion to Mezzanine equity	(3,638)			(3,638)			(3,638)
Dividends to Toyota Motor Corporation class shareholders	(2,449)			(2,449)			(2,449)
Dividends paid to Toyota Motor Corporation common shareholders	(704,728)			(704,728)			(704,728)
Dividends paid to noncontrolling interests	(73,129)							(73,129)
Repurchase of treasury stock	(782,871)					(782,871)	(782,871)
Reissuance of treasury stock	4,698		183			4,515	4,698
Retirement of treasury stock			(1,048)	(399,489)		400,537
Balances at Mar. 31, 2016	17,608,407	397,050	548,161	16,794,240	610,768	(1,603,284)	16,746,935	861,472
Equity transaction with noncontrolling interests and other	13,347		(35,555)		(2,226)	283,561	245,780	(232,433)
Comprehensive income
Net income	1,926,985			1,831,109			1,831,109	95,876
Other comprehensive income (loss)
Foreign currency translation adjustments	(57,926)				(52,427)		(52,427)	(5,499)
Unrealized gains (losses) on securities	4,279				(8,002)		(8,002)	12,281
Pension liability adjustments	93,312				92,809		92,809	503
Total comprehensive income	1,966,650						1,863,489	103,161
Accretion to Mezzanine equity	(4,849)			(4,849)			(4,849)
Dividends to Toyota Motor Corporation class shareholders	(4,946)			(4,946)			(4,946)
Dividends paid to Toyota Motor Corporation common shareholders	(634,475)			(634,475)			(634,475)
Dividends paid to noncontrolling interests	(63,936)							(63,936)
Repurchase of treasury stock	(700,228)					(700,228)	(700,228)
Reissuance of treasury stock	3,106		(1,219)			4,325	3,106
Retirement of treasury stock			(27,374)	(380,009)		407,383
Balances at Mar. 31, 2017	18,183,076	397,050	484,013	17,601,070	640,922	(1,608,243)	17,514,812	668,264
Equity transaction with noncontrolling interests and other	(1,659)		1,817	11,400	(11,400)		1,817	(3,476)
Comprehensive income
Net income	2,586,106			2,493,983			2,493,983	92,123
Other comprehensive income (loss)
Foreign currency translation adjustments	(120,606)				(118,977)		(118,977)	(1,629)
Unrealized gains (losses) on securities	(94,559)				(96,581)		(96,581)	2,022
Pension liability adjustments	22,315				21,735		21,735	580
Total comprehensive income	2,393,256						2,300,160	93,096
Accretion to Mezzanine equity	(4,849)			(4,849)			(4,849)
Dividends to Toyota Motor Corporation class shareholders	(7,442)			(7,442)			(7,442)
Dividends paid to Toyota Motor Corporation common shareholders	(620,698)			(620,698)			(620,698)
Dividends paid to noncontrolling interests	(63,764)							(63,764)
Repurchase of treasury stock	(500,177)					(500,177)	(500,177)
Reissuance of treasury stock	52,359		1,672			50,687	52,359
Balances at Mar. 31, 2018	¥ 19,430,102	¥ 397,050	¥ 487,502	¥ 19,473,464	¥ 435,699	¥ (2,057,733)	¥ 18,735,982	¥ 694,120

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CONSOLIDATED STATEMENTS OF CASH FLOWS - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Cash flows from operating activities
Net income	¥ 2,586,106	¥ 1,926,985	¥ 2,434,211
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation	1,734,033	1,610,950	1,625,837
Provision for doubtful accounts and credit losses	76,069	98,666	159,265
Pension and severance costs, less payments	4,286	23,253	8,833
Losses on disposal of fixed assets	35,289	30,673	33,329
Unrealized losses on available-for-sale securities, net	846	7,073	9,272
Deferred income taxes	(237,961)	(53,299)	32,889
Equity in earnings of affiliated companies	(470,083)	(362,060)	(329,099)
Changes in operating assets and liabilities, and other
Increase in accounts and notes receivable	(105,435)	(264,784)	(25,180)
Increase in inventories	(171,148)	(246,326)	(68,912)
Increase in other current assets	(162,582)	(152,116)	(200,669)
Increase in accounts payable	46,648	145,957	120,381
Increase (decrease) in accrued income taxes	238,753	(121,032)	(5,516)
Increase in other current liabilities	211,452	480,094	368,923
Other	423,736	290,203	297,293
Net cash provided by operating activities	4,210,009	3,414,237	4,460,857
Cash flows from investing activities
Additions to finance receivables	(15,058,516)	(13,636,694)	(13,549,278)
Collection of finance receivables	14,013,204	12,885,944	13,067,700
Proceeds from sales of finance receivables	33,108	42,037	48,154
Additions to fixed assets excluding equipment leased to others	(1,291,117)	(1,223,878)	(1,282,545)
Additions to equipment leased to others	(2,307,590)	(2,317,559)	(2,776,671)
Proceeds from sales of fixed assets excluding equipment leased to others	71,820	41,238	42,147
Proceeds from sales of equipment leased to others	1,211,272	1,238,278	1,111,727
Purchases of marketable securities and security investments	(3,052,916)	(2,517,008)	(2,197,477)
Proceeds from sales of marketable securities and security investments	275,574	260,039	108,708
Proceeds upon maturity of marketable securities and security investments	2,247,964	1,641,502	3,307,107
Payment for additional investments in affiliated companies, net of cash acquired	(576)	44,274	628
Changes in investments and other assets, and other	197,681	571,888	(1,062,744)
Net cash used in investing activities	(3,660,092)	(2,969,939)	(3,182,544)
Cash flows from financing activities
Proceeds from issuance of long-term debt	4,793,939	4,603,446	4,845,872
Payments of long-term debt	(4,452,338)	(3,845,554)	(4,176,202)
Increase (decrease) in short-term borrowings	347,738	273,037	(10,903)
Proceeds from issuance of class shares			474,917
Dividends paid to Toyota Motor Corporation class shareholders	(6,194)	(3,697)	(1,225)
Dividends paid to Toyota Motor Corporation common shareholders	(620,698)	(634,475)	(704,728)
Dividends paid to noncontrolling interests	(63,764)	(63,936)	(73,129)
Reissuance (repurchase) of treasury stock, and other	(447,818)	(703,986)	(778,173)
Net cash used in financing activities	(449,135)	(375,165)	(423,571)
Effect of exchange rate changes on cash and cash equivalents	(43,588)	(13,486)	(199,871)
Net increase in cash and cash equivalents	57,194	55,647	654,871
Cash and cash equivalents at beginning of year	2,995,075	2,939,428	2,284,557
Cash and cash equivalents at end of year	¥ 3,052,269	¥ 2,995,075	¥ 2,939,428

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Nature of operations

12 Months Ended

Mar. 31, 2018

Nature of operations

1. Nature of operations:

Toyota and its affiliated companies are primarily engaged in the design, manufacture, and sale of sedans, minivans, compact cars, sport-utility vehicles, trucks and related parts and accessories throughout the world. In addition, Toyota and its affiliated companies provide financing, vehicle and equipment leasing and certain other financial services primarily to its dealers and their customers to support the sales of vehicles and other products manufactured by Toyota and its affiliated companies.

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Summary of significant accounting policies

12 Months Ended

Mar. 31, 2018

Summary of significant accounting policies

2. Summary of significant accounting policies:

The parent company and its subsidiaries in Japan and its foreign subsidiaries maintain their records and prepare their financial statements in accordance with Japanese generally accepted accounting principles and those of their countries of domicile. Certain adjustments and reclassifications have been incorporated in the accompanying consolidated financial statements to conform to U.S.GAAP.

Significant accounting policies after reflecting adjustments for the above are as follows:

Basis of consolidation and accounting for investments in affiliated companies -

The consolidated financial statements include the accounts of the parent company, its majority-owned subsidiary companies and variable interest entities of which Toyota is the primary beneficiary. 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. Consolidated net income includes Toyota’s equity in current earnings of such companies, after elimination of unrealized intercompany profits. Investments in such companies are reduced to fair value if a decline in market value is determined other-than-temporary. Investments in non-public companies 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 U.S.GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The more significant estimates include: product warranties, liabilities accrued for recalls and other safety measures, allowance for doubtful accounts and credit losses, residual values for leased assets, impairment of long-lived assets, pension costs and obligations, fair value of derivative financial instruments, other-than-temporary losses on marketable securities, litigation liabilities and valuation allowance for deferred tax assets.

Translation of foreign currencies -

All asset and liability accounts of foreign subsidiaries and affiliated companies are translated into Japanese yen at appropriate year-end current exchange rates and all income and expense accounts of those subsidiaries are translated at the average exchange rates for each period. The foreign currency translation adjustments are included as a component of accumulated other comprehensive income.

Foreign currency receivables and payables are translated at appropriate year-end current exchange rates and the resulting transaction gains or losses are recorded in operations currently.

Revenue recognition -

Revenues from sales of vehicles and parts are 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 a dealer during a certain period of time. Toyota accrues these incentives as revenue reductions upon the sale of a vehicle corresponding to the program by the amount determined in the related incentive program.

Revenues from the sales of vehicles under which Toyota conditionally guarantees the minimum resale value are recognized on a pro rata basis from the date of sale to the first exercise date of the guarantee in a manner similar to operating lease accounting. The underlying vehicles of these transactions are recorded as assets and are depreciated in accordance with Toyota’s depreciation policy.

Revenues from retail financing contracts and finance leases are recognized using the effective yield method. Revenues from operating leases are recognized on a straight-line basis over the lease term.

The sale of certain vehicles includes a determinable amount for the contract, which entitles customers to free vehicle maintenance. Such revenues from free maintenance contracts are deferred and recognized as revenue over the period of the contract, which approximates the pattern of the related costs.

Other costs -

Advertising and sales promotion costs are expensed as incurred. Advertising costs were ¥489,036 million, ¥448,780 million and ¥509,653 million for the years ended March 31, 2016, 2017 and 2018, 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 the sale and other factors. Toyota records 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 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 of warranty claim recoveries to be received from suppliers.

In addition to product warranties above, Toyota accrues for costs of recalls and other safety measures based on management’s estimates when it is probable a liability has been incurred and the amount of loss can be reasonably estimated. Toyota mainly employs an estimation model, to accrue at the time of vehicle sale, an amount that represents management’s best estimate of expenses related to future recalls and other safety measures. The estimation model for recalls and other safety measures takes into account Toyota’s historical experience of recalls and other safety measures.

Litigation liabilities are established to cover probable losses on various lawsuits based on the information currently available. Attorneys’ fees are expensed as incurred.

Research and development costs are expensed as incurred. Research and development costs were ¥1,055,672 million, ¥1,037,528 million and ¥1,064,269 million for the years ended March 31, 2016, 2017 and 2018, respectively.

Cash and cash equivalents -

Cash and cash equivalents include all highly liquid investments 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 unrealized gains or losses included as a component of accumulated other comprehensive income in shareholders’ equity, net of applicable taxes. Individual securities classified as available-for-sale are reduced to fair 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 consolidated statements of income when 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 recorded on Toyota’s consolidated balance sheets are comprised of the unpaid principal balance, plus accrued interest, less charge-offs, net of any unearned income and deferred origination costs and the allowance for credit losses. Deferred origination costs are amortized so as to approximate a level rate of return over the term of the related contracts.

The determination of portfolio segments is based primarily on the qualitative consideration of the nature of Toyota’s business operations and finance receivables. The three portfolio segments within finance receivables are as follows:

Retail receivables portfolio segment -

The retail receivables portfolio segment consists of retail installment sales contracts acquired mainly from dealers (“auto loans”) including credit card loans. These contracts acquired must first meet specified credit standards. Thereafter, Toyota retains responsibility for contract collection and administration.

The contract periods of auto loans primarily range from 2 to 7 years. Toyota acquires security interests in the vehicles financed and has the right to repossess vehicles if customers fail to meet their contractual obligations. Almost all auto loans are non-recourse, which relieves the dealers from financial responsibility in the event of repossession.

Toyota classifies retail receivables portfolio segment into one class based on common risk characteristics associated with the underlying finance receivables, the similarity of the credit risks, and the quantitative materiality.

Finance lease receivables portfolio segment -

Toyota acquires new vehicle lease contracts originated primarily through dealers. The contract periods of these primarily range from 2 to 5 years. Lease contracts acquired must first meet specified credit standards after which Toyota assumes ownership of the leased vehicle. Toyota is responsible for contract collection and administration during the lease period.

Toyota is generally permitted to take possession of the vehicle upon a default by the lessee. The residual value is estimated at the time the vehicle is first leased. Vehicles returned to Toyota at the end of their leases are sold by auction.

Toyota classifies finance lease receivables portfolio segment into one class based on common risk characteristics associated with the underlying finance receivables and the similarity of the credit risks.

Wholesale and other dealer loan receivables portfolio segment -

Toyota provides wholesale financing to qualified dealers to finance inventories. Toyota acquires security interests in vehicles financed at wholesale. In cases where additional security interests would be required, Toyota takes dealership assets or personal assets, or both, as additional security. If a dealer defaults, Toyota has the right to liquidate any assets acquired and seek legal remedies.

Toyota also makes term loans to dealers for business acquisitions, facilities refurbishment, real estate purchases and working capital requirements. These loans are typically secured with liens on real estate, other dealership assets and/or personal assets of the dealers.

Toyota classifies wholesale and other dealer loan receivables portfolio segment into three classes of wholesale, real estate and working capital, based on the risk characteristics associated with the underlying finance receivables.

A receivable account balance is considered impaired when, based on current information and events, it is probable that Toyota will be unable to collect all amounts due according to the terms of the contract. Factors such as payment history, compliance with terms and conditions of the underlying loan agreement and other subjective factors related to the financial stability of the borrower are considered when determining whether a loan is impaired. Impaired finance receivables include certain nonaccrual receivables for which a specific reserve has been assessed. An account modified as a troubled debt restructuring is considered to be impaired. A troubled debt restructuring occurs when an account is modified through a concession to a borrower experiencing financial difficulty.

All classes of wholesale and other dealer loan receivables portfolio segment are placed on nonaccrual status when full payment of principal or interest is in doubt, or when principal or interest is 90 days or more contractually past due, whichever occurs first. Collateral dependent loans are placed on nonaccrual status if collateral is insufficient to cover principal and interest. Interest accrued but not collected at the date a receivable is placed on nonaccrual status is reversed against interest income. In addition, the amortization of net deferred fees is suspended.

Interest income on nonaccrual receivables is recognized only to the extent it is received in cash. Accounts are restored to accrual status only when interest and principal payments are brought current and future payments are reasonably assured. Receivable balances are written-off against the allowance for credit losses when it is probable that a loss has been realized. Retail receivables class and finance lease receivables class are not placed generally on nonaccrual status when principal or interest is 90 days or more past due. However, these receivables are generally written-off against the allowance for credit losses when payments due are no longer expected to be received or the account is 120 days contractually past due, whichever occurs first.

As of March 31, 2017 and 2018, finance receivables on nonaccrual status are as follows:

	Yen in millions
	March 31,
	2017		2018
Retail		7,064		6,897
Finance leases		2,297		2,117
Wholesale		15,018		12,484
Real estate		12,632		13,856
Working capital		561		105
		37,572		35,459

As of March 31, 2017 and 2018, finance receivables 90 days or more past due and accruing are as follows:

	Yen in millions
	March 31,
	2017		2018
Retail		26,616		26,007
Finance leases		3,526		3,812
		30,142		29,819

Allowance for credit losses -

Allowance for credit losses is established to cover probable losses on finance receivables and vehicles and equipment on operating leases, resulting from the inability of customers to make required payments. Provision for credit losses is included in selling, general and administrative expenses.

The allowance for credit losses is based on a systematic, ongoing review and evaluation performed as part of the credit-risk evaluation process, historical loss experience, the size and composition of the portfolios, current economic events and conditions, the estimated fair value and adequacy of collateral and other pertinent factors. Vehicles and equipment on operating leases are not within the scope of accounting guidance governing the disclosure of portfolio segments.

Retail receivables portfolio segment -

Toyota calculates allowance for credit losses to cover probable losses on retail receivables by applying reserve rates to such receivables. Reserve rates are calculated mainly by historical loss experience, current economic events and conditions and other pertinent factors.

Finance lease receivables portfolio segment -

Toyota calculates allowance for credit losses to cover probable losses on finance lease receivables by applying reserve rates to such receivables. Reserve rates are calculated mainly by historical loss experience, current economic events and conditions and other pertinent factors such as used car markets.

Wholesale and other dealer loan receivables portfolio segment -

Toyota calculates allowance for credit losses to cover probable losses on wholesale and other dealer loan receivables by applying reserve rates to such receivables. Reserve rates are calculated mainly by financial conditions of the dealers, terms of collateral setting, current economic events and conditions and other pertinent factors.

Toyota establishes specific reserves to cover the estimated losses on individually impaired receivables within the wholesale and other dealer loan receivables portfolio segment. Specific reserves on impaired receivables are determined by the present value of expected future cash flows or the fair value of collateral when it is probable that such receivables will be unable to be fully collected. The fair value of the underlying collateral is used if the receivable is collateral-dependent. The receivable is determined collateral-dependent if the repayment of the loan is expected to be provided by the underlying collateral. For the receivables in which the fair value of the underlying collateral was in excess of the outstanding balance, no allowance was provided.

Troubled debt restructurings in the retail receivables and finance lease receivables portfolio segments are specifically identified as impaired and aggregated with their respective portfolio segments when determining the allowance for credit losses. Impaired loans in the retail receivables and finance lease receivables portfolio segments are insignificant for individual evaluation and Toyota has determined that allowance for credit losses for each of the retail receivables and finance lease receivables portfolio segments would not be materially different if they had been individually evaluated for impairment.

Specific reserves on impaired receivables within the wholesale and other dealer loan receivables portfolio segment are recorded by an increase to the allowance for credit losses based on the related measurement of impairment. Related collateral, if recoverable, is repossessed and sold and the account balance is written-off.

Any shortfall between proceeds received and the carrying cost of repossessed collateral is charged to the allowance. Recoveries are reversed from 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 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 by Toyota to be appropriate in relation to the estimated losses on its 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 net realizable value, 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 ¥433,802 million and ¥472,717 million at March 31, 2017 and 2018, respectively. Had the “first-in, first-out” basis been used for those companies using the LIFO basis, inventories would have been ¥40,650 million and ¥22,778 million higher than reported at March 31, 2017 and 2018, 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 respective assets according to general class, type of construction and use. The estimated useful lives range from 2 to 65 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 method over the lease term, generally from 2 to 5 years, to the estimated residual value. Incremental direct costs incurred in connection with the acquisition of operating lease contracts are capitalized and amortized on a straight-line method over the lease term.

Long-lived assets -

Toyota reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. An impairment loss would be recognized when the carrying amount of an asset group exceeds the estimated undiscounted 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 carrying value of the asset group 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.

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 an indefinite 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 generally determined by the difference between the fair value of the asset using a discounted cash flow valuation method and the current book value.

Employee benefit obligations -

Toyota has both defined benefit and defined contribution plans for employees’ retirement benefits. Retirement benefit obligations are measured by actuarial calculations in accordance with U.S.GAAP. The funded status of the defined benefit postretirement plans is recognized on the consolidated balance sheets as prepaid pension and severance costs or accrued pension and severance costs, and the funded status change is recognized in the year in which it occurs through other comprehensive income.

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 liabilities do not reflect any offset for possible recoveries from insurance companies and are not discounted. There were no material changes in these liabilities for all periods presented.

Income taxes -

The provision for income taxes is computed based on the pretax income included in the consolidated statements of income. The asset and liability approach is used to recognize deferred tax assets and liabilities 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 forward foreign currency exchange 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. All derivative financial instruments are recorded on the consolidated balance sheets at fair value, taking into consideration the effects of legally enforceable master netting agreements that allow us to net settle positive and negative positions and offset cash collateral held with the same counterparty on a net basis. 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 through 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 operations.

Net income attributable to Toyota Motor Corporation per common share -

Basic net income attributable to Toyota Motor Corporation per common share is calculated by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding during the reported period. The calculation of diluted net income attributable to Toyota Motor Corporation per common share is done by adjusting net income attributable to common shareholders and the weighted-average number of common shares outstanding, which includes the additional dilution from the assumed conversion of model AA class shares and the assumed exercise of dilutive stock options.

Stock-based compensation -

Toyota measures compensation expense for its stock-based compensation plan based on the grant-date fair value of the award, and accounts for the award.

Other comprehensive income -

Other comprehensive income 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 is primarily comprised of unrealized gains/losses on marketable securities designated as available-for-sale, foreign currency translation adjustments and adjustments attributed to pension liabilities associated with Toyota’s defined benefit pension plans.

Accounting changes -

In July 2015, the Financial Accounting Standards Board (“FASB”) issued updated guidance to simplify the measurement of inventory. Toyota adopted this guidance on April 1, 2017. The adoption of this guidance did not have a material impact on Toyota’s consolidated financial statements.

In March 2016, the FASB issued updated guidance for effect of derivative contract novations on existing hedge accounting relationships. This guidance clarifies that a change in the counterparty to a designated derivative hedging instrument does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. Toyota adopted this guidance on April 1, 2017. The adoption of this guidance did not have a material impact on Toyota’s consolidated financial statements.

In March 2016, the FASB issued updated guidance for contingent put and call options in debt instruments. This guidance clarifies whether embedded contingent put and call options are clearly and closely related to the debt host when bifurcating embedded derivatives. Toyota adopted this guidance on April 1, 2017. The adoption of this guidance did not have a material impact on Toyota’s consolidated financial statements.

In October 2016, the FASB issued updated guidance for consolidation. Under this guidance, a reporting entity would evaluate its indirect economic interest in a variable interest entity held through a related party under common control on a proportionate basis. Toyota adopted this guidance on April 1, 2017. The adoption of this guidance did not have a material impact on Toyota’s consolidated financial statements.

In February 2018, the FASB issued updated guidance for comprehensive income. This guidance allows entities to reclassify tax effects stranded in accumulated other comprehensive incomes as a result of the Tax Cuts and Jobs Act of 2017 of the United States to retained earnings. Toyota early adopted this guidance on April 1, 2017. The adoption of this guidance did not have a material impact on Toyota’s consolidated financial statements.

Recent pronouncements to be adopted in future periods -

In May 2014, the FASB issued updated guidance on the recognition of revenue from contracts with customers. This guidance requires an entity to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and supersedes the current revenue recognition guidance. In August 2015, the FASB issued updated guidance on the deferral of the effective date. As a result, this guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. This guidance may be adopted retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying this guidance recognized at the date of initial application. Toyota will apply the modified retrospective method of adoption from the fiscal year beginning April 1, 2018. Management does not expect this guidance to have a material impact on Toyota’s consolidated financial statements.

In January 2016, the FASB issued updated guidance for financial instruments. This guidance addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments and will require entities to measure equity investments at fair value and recognize any changes in fair value in net income. This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Toyota will adopt this guidance from the fiscal year beginning April 1, 2018. Toyota will recognize a cumulative-effect adjustment to retained earnings of ¥1,125,109 million as of April 1, 2018 for after-tax unrealized gains of available-for-sale equity securities previously recognized in accumulated other comprehensive income.

In February 2016, the FASB issued updated guidance for leases. This guidance will require lessees to recognize almost all leases on their balance sheet as a right-of-use asset and a lease liability. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Management is evaluating the impact of adopting this guidance on Toyota’s consolidated financial statements.

In June 2016, the FASB issued updated guidance for measurement of credit losses on financial instruments. This guidance introduces an approach to estimate credit losses on certain types of financial instruments based on expected losses. It also modifies the impairment model for available-for-sale debt securities. This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Management is evaluating the impact of adopting this guidance on Toyota’s consolidated financial statements.

In August 2016, the FASB issued updated guidance for classification of statement of cash flows. This guidance clarifies classification of certain cash receipts and cash payments of statement of cash flows. This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Management does not expect this guidance to have a material impact on Toyota’s consolidated financial statements.

In October 2016, the FASB issued updated guidance that would require entities to recognize the income tax consequences of intercompany asset transfers other than inventory. This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Management does not expect this guidance to have a material impact on Toyota’s consolidated financial statements.

In November 2016, the FASB issued updated guidance for the statement of cash flows. This guidance will require that restricted cash and restricted cash equivalents should be included with cash and cash equivalents. It will also require entities to disclose how the statement of cash flows that includes restricted cash with cash and cash equivalents reconciles to the balance sheet. This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Management does not expect this guidance to have a material impact on Toyota’s consolidated financial statements.

In August 2017, the FASB issued updated guidance for hedge accounting. This guidance simplifies and expands the application of hedge accounting. This guidance is effective for fiscal year beginning after December 15, 2018, including interim periods within those fiscal years. Management is evaluating the impact of adopting this guidance on Toyota’s consolidated financial statements.

Reclassifications -

Certain prior year amounts have been reclassified to conform to the presentations as of and for the year ended March 31, 2018.

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Supplemental cash flow information

12 Months Ended

Mar. 31, 2018

Supplemental cash flow information

3. Supplemental cash flow information:

Cash payments for income taxes were ¥884,589 million, ¥854,600 million and ¥500,214 million for the years ended March 31, 2016, 2017 and 2018, respectively. Interest payments during the years ended March 31, 2016, 2017 and 2018 were ¥381,280 million, ¥362,602 million and ¥422,720 million, respectively.

Capital lease obligations of ¥6,546 million, ¥5,975 million and ¥4,467 million were incurred for the years ended March 31, 2016, 2017 and 2018, respectively.

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Acquisitions and dispositions

12 Months Ended

Mar. 31, 2018

Acquisitions and dispositions

4. Acquisitions and dispositions:

Toyota Housing Corporation, a consolidated subsidiary of Toyota Motor Corporation, increased its ownership interest in Misawa Homes Co., Ltd. (Business description: Production and sale of housing materials and components, etc.) to 51% by acquiring 11,181,798 shares of common stock of Misawa Homes Co., Ltd. through a tender offer on December 29, 2016 as well as a third-party allotment of Misawa Homes Co., Ltd. shares to Toyota Housing Corporation and a disposal of Misawa Homes Co., Ltd. treasury stock on January 5, 2017, in order to increase competitiveness through enhanced cooperation with Misawa Homes Co., Ltd. As a result, Misawa Homes Co., Ltd., previously an affiliated company accounted for under the equity method, is now accounted for as a consolidated subsidiary of Toyota Motor Corporation.

The acquisition was accounted for under the acquisition method. Acquisition-related costs were accounted as expense when incurred, and the estimated fair values of the assets acquired, liabilities assumed and noncontrolling interests as of the date of the acquisition of control are immaterial in value.

The amount of sales of Misawa Homes Co., Ltd. after the date of the acquisition of control, which is included in “Sales of products” of Toyota’s consolidated statements of income for fiscal 2017, is ¥130,046 million. Misawa Homes’ net income does not have a material effect on net income attributable to Toyota Motor Corporation in term of monetary value.

In addition to the above, Toyota made several acquisitions and dispositions during the years ended March 31, 2016, 2017 and 2018, however the assets and liabilities acquired or transferred were not material.

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Marketable securities and other securities investments

12 Months Ended

Mar. 31, 2018

Marketable securities and other securities investments

5. Marketable securities and other securities investments:

Marketable securities and other securities investments include public and corporate bonds and common stocks for which the aggregate cost, gross unrealized gains and losses and fair value are as follows:

	Yen in millions
	March 31, 2017
	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Available-for-sale
Public and corporate bonds		5,789,221		145,640		49,030		5,885,831
Common stocks		668,345		2,018,910		321		2,686,934
Other		819,514		9,724		2,670		826,568
Total		7,277,080		2,174,274		52,021		9,399,333
Securities not practicable to determine fair value
Public and corporate bonds		25,257
Common stocks		76,936
Total		102,193
	Yen in millions
	March 31, 2018
	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Available-for-sale
Public and corporate bonds		6,276,811		150,198		118,275		6,308,734
Common stocks		676,959		1,910,767		5,611		2,582,115
Other		730,334		8,058		1,413		736,979
Total		7,684,104		2,069,023		125,299		9,627,828
Securities not practicable to determine fair value
Public and corporate bonds		29,980
Common stocks		109,875
Total		139,855

Japanese bonds and foreign bonds including U.S., European and other bonds represent 28% and 72% (as of March 31, 2017) and 16% and 84% (as of March 31, 2018) of public and corporate bonds included in available-for-sale, respectively. Listed stocks on the Japanese stock markets represent 92% and 93% of common stocks which are included in available-for-sale as of March 31, 2017 and 2018, respectively. Public and corporate bonds include government bonds, and “Other” includes investment trusts.

Unrealized losses continuing over a 12 month period or more in the aggregate were not material as of March 31, 2017 and 2018.

As of March 31, 2017 and 2018, maturities of public and corporate bonds included in available-for-sale are mainly from 1 to 10 years.

Proceeds from sales of available-for-sale securities were ¥108,708 million, ¥251,940 million and ¥248,046 million for the years ended March 31, 2016, 2017 and 2018, respectively. On those sales, gross realized gains were ¥9,500 million, ¥61,038 million and ¥7,684 million and gross realized losses were ¥365 million, ¥108 million and ¥278 million, respectively.

During the years ended March 31, 2016, 2017 and 2018, Toyota recognized impairment losses on available-for-sale securities of ¥9,272 million, ¥7,073 million and ¥846 million, respectively, which are included in “Other income (loss), net” and other in the accompanying consolidated statements of income.

In the ordinary course of business, Toyota maintains long-term investment securities, included in “Marketable securities and other securities investments” and issued by a number of non-public companies which are recorded at cost, as their fair values were not readily determinable. 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. Toyota periodically performs this impairment test for significant investments recorded at cost. If the impairment is determined to be other-than-temporary, the carrying value of the investment is written-down by the impaired amount and the losses are recognized currently in operations.

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Finance receivables

12 Months Ended

Mar. 31, 2018

Finance receivables

6. Finance receivables:

Finance receivables consist of the following:

	Yen in millions
	March 31,
	2017			2018
Retail		11,453,352			11,995,174
Finance leases		1,265,882			1,460,600
Wholesale and other dealer loans		3,281,142			3,281,427
		16,000,376			16,737,201
Deferred origination costs		172,298			181,764
Unearned income		(804,591	)		(919,967	)
Allowance for credit losses
Retail		(104,354	)		(103,457	)
Finance leases		(23,962	)		(28,817	)
Wholesale and other dealer loans		(30,896	)		(36,800	)
Total allowance for credit losses		(159,212	)		(169,074	)
Total finance receivables, net		15,208,871			15,829,924
Less - Current portion		(6,196,649	)		(6,348,306	)
Noncurrent finance receivables, net		9,012,222			9,481,618

Finance receivables were geographically distributed as follows: in North America 59.1%, in Asia 11.3%, in Europe 10.3%, in Japan 8.1% and in Other 11.2% as of March 31, 2017, and in North America 55.7%, in Asia 12.3%, in Europe 12.1%, in Japan 8.2% and in Other 11.7% as of March 31, 2018.

The contractual maturities of retail receivables, the future minimum lease payments on finance leases and the contractual maturities of wholesale and other dealer loans at March 31, 2018 are summarized as follows:

	Yen in millions
Years ending March 31,	Retail		Finance leases		Wholesale and other dealer loans
2019		3,887,959		370,916		2,431,231
2020		2,870,540		293,371		234,874
2021		2,269,797		228,764		140,295
2022		1,569,215		103,796		162,198
2023		884,871		37,134		121,654
Thereafter		512,792		5,122		191,175
		11,995,174		1,039,103		3,281,427

Finance leases consist of the following:

	Yen in millions
	March 31,
	2017			2018
Minimum lease payments		889,522			1,039,103
Estimated unguaranteed residual values		376,360			421,497
		1,265,882			1,460,600
Deferred origination costs		5,809			10,411
Less - Unearned income		(103,518	)		(120,884	)
Less - Allowance for credit losses		(23,962	)		(28,817	)
Finance leases, net		1,144,211			1,321,310

Toyota is exposed to credit risk on Toyota’s finance receivables. Credit risk is the risk of loss arising from the failure of customers or dealers to meet the terms of their contracts with Toyota or otherwise fail to perform as agreed. Toyota estimates allowance for credit losses by variety of credit-risk evaluation process to cover probable and estimable losses above.

The table below shows the amount of the finance receivables segregated into aging categories based on the number of days outstanding as of March 31, 2017 and 2018:

	Yen in millions
	March 31, 2017
	Retail		Finance leases		Wholesale		Real estate		Working capital
Current		11,264,660		1,255,626		1,707,432		848,757		722,697
30-59 days past due		125,626		5,114		1,327		—		405
60-89 days past due		29,321		1,321		—		—		—
90 days or greater past due		33,745		3,821		—		266		258
Total		11,453,352		1,265,882		1,708,759		849,023		723,360
	Yen in millions
	March 31, 2018
	Retail		Finance leases		Wholesale		Real estate		Working capital
Current		11,802,032		1,448,989		1,721,225		823,007		731,877
30-59 days past due		127,830		5,741		138		—		—
60-89 days past due		32,408		1,760		5,112		—		—
90 days or greater past due		32,904		4,110		—		65		3
Total		11,995,174		1,460,600		1,726,475		823,072		731,880

The tables below show the recorded investment for each credit quality of the finance receivable within the wholesale and other dealer loan receivables portfolio segment in the United States and other regions as of March 31, 2017 and 2018:

United States

The wholesale and other dealer loan receivables portfolio segment is primarily segregated into credit qualities below based on internal risk assessments by dealers.

Performing: Account not classified as either Credit Watch, At Risk or Default

Credit Watch: Account designated for elevated attention

At Risk: Account where there is an increased likelihood that default may exist based on qualitative and quantitative factors

Default: Account is not currently meeting contractual obligations or we have temporarily waived certain contractual requirements

	Yen in millions
	March 31, 2017
	Wholesale		Real estate		Working capital		Total
Performing		1,076,164		449,884		233,677		1,759,725
Credit Watch		142,336		68,726		16,049		227,111
At Risk		1,286		5,071		561		6,918
Default		8,791		5,079		544		14,414
Total		1,228,577		528,760		250,831		2,008,168

	Yen in millions
	March 31, 2018
	Wholesale		Real estate		Working capital		Total
Performing		1,005,030		432,397		225,442		1,662,869
Credit Watch		99,547		51,420		10,730		161,697
At Risk		7,968		3,081		3,506		14,555
Default		4,356		4,993		2,231		11,580
Total		1,116,901		491,891		241,909		1,850,701

Other regions

Credit qualities of the wholesale and other dealer loan receivables portfolio segment in other regions are also monitored based on internal risk assessments by dealers on a consistent basis as in the United States. These accounts classified as “Credit Watch” or “At Risk” were not significant in other regions, and consequently the tables below summarize information for two categories, “Performing” and “Default”.

	Yen in millions
	March 31, 2017
	Wholesale		Real estate		Working capital		Total
Performing		460,308		316,008		472,198		1,248,514
Default		19,874		4,255		331		24,460
Total		480,182		320,263		472,529		1,272,974

	Yen in millions
	March 31, 2018
	Wholesale		Real estate		Working capital		Total
Performing		585,760		323,581		489,801		1,399,142
Default		23,814		7,600		170		31,584
Total		609,574		331,181		489,971		1,430,726

The tables below summarize information about impaired finance receivables:

	Yen in millions
	Recorded investment				Unpaid principal balance				Individually evaluated allowance
	March 31,				March 31,				March 31,
	2017		2018		2017		2018		2017		2018
Impaired account balances individually evaluated for impairment with an allowance:
Wholesale		10,667		11,582		10,667		11,582		1,373		1,525
Real estate		10,986		9,353		10,986		9,353		1,596		588
Working capital		3,793		5,858		3,793		5,858		1,291		5,429
Total		25,446		26,793		25,446		26,793		4,260		7,542
Impaired account balances individually evaluated for impairment without an allowance:
Wholesale		15,033		8,818		15,033		8,818
Real estate		11,780		15,086		11,780		15,086
Working capital		—		2,337		—		2,337
Total		26,813		26,241		26,813		26,241
Impaired account balances aggregated and evaluated for impairment:
Retail		27,269		27,151		26,597		26,418
Finance leases		66		100		54		74
Total		27,335		27,251		26,651		26,492
Total impaired account balances:
Retail		27,269		27,151		26,597		26,418
Finance leases		66		100		54		74
Wholesale		25,700		20,400		25,700		20,400
Real estate		22,766		24,439		22,766		24,439
Working capital		3,793		8,195		3,793		8,195
Total		79,594		80,285		78,910		79,526

	Yen in millions
	Average impaired finance receivables
	For the years ended March 31,
	2017		2018
Total impaired account balances:
Retail		26,628		27,664
Finance leases		76		83
Wholesale		26,306		23,171
Real estate		22,482		22,831
Working capital		4,208		5,818
Total		79,700		79,567

For the years ended March 31, 2017 and 2018, interest income on impaired finance receivables was not material.

The amount of finance receivables modified as a troubled debt restructuring for the year ended March 31, 2018 was not significant for all classes of finance receivables. Finance receivables modified as troubled debt restructurings for the year ended March 31, 2018 and for which there was a payment default were not significant for all classes of such receivables.

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Other receivables

12 Months Ended

Mar. 31, 2018

Other receivables

7. Other receivables:

Other receivables relate to arrangements with certain component manufacturers whereby Toyota procures inventory for these component manufactures and is reimbursed for the related purchases.

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Inventories

12 Months Ended

Mar. 31, 2018

Inventories

8. Inventories:

Inventories consist of the following:

	Yen in millions
	March 31,
	2017		2018
Finished goods		1,552,823		1,683,694
Raw materials		413,049		435,360
Work in process		309,387		304,929
Supplies and other		113,358		115,806
Total		2,388,617		2,539,789

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Vehicles and equipment on operating leases

12 Months Ended

Mar. 31, 2018

Vehicles and equipment on operating leases

9. Vehicles and equipment on operating leases:

Vehicles and equipment on operating leases consist of the following:

	Yen in millions
	March 31,
	2017			2018
Vehicles		6,105,527			6,124,699
Equipment		13,096			13,373
Less - Deferred income and other		(152,044	)		(203,679	)
		5,966,579			5,934,393
Less - Accumulated depreciation		(1,263,774	)		(1,352,840	)
Less - Allowance for credit losses		(18,889	)		(15,013	)
Vehicles and equipment on operating leases, net		4,683,916			4,566,540

Rental income from vehicles and equipment on operating leases was ¥891,733 million, ¥850,210 million and ¥927,443 million for the years ended March 31, 2016, 2017 and 2018, respectively. Future minimum rentals from vehicles and equipment on operating leases are due in installments as follows:

Years ending March 31,	Yen in millions
2019		769,926
2020		490,182
2021		221,216
2022		46,818
2023		11,675
Thereafter		1,478
Total minimum future rentals		1,541,295

The future minimum rentals as shown above should not be considered indicative of future cash collections.

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Allowance for doubtful accounts and credit losses

12 Months Ended

Mar. 31, 2018

Allowance for doubtful accounts and credit losses

10. Allowance for doubtful accounts and credit losses:

The net changes in the allowance for doubtful accounts relating to trade accounts and notes receivable for the years ended March 31, 2016, 2017 and 2018 are as follows:

	Yen in millions
	For the years ended March 31,
	2016			2017			2018
Allowance for doubtful accounts at beginning of year		50,410			94,853			100,712
Provision for doubtful accounts, net of reversal		69,029			6,519			(74	)
Write-offs		(20,649	)		(3,839	)		(2,374	)
Other		(3,937	)		3,179			326
Allowance for doubtful accounts at end of year		94,853			100,712			98,590

“Other” includes the impact of currency translation adjustments for the years ended March 31, 2016, 2017 and 2018.

A portion of the allowance for doubtful accounts balance at March 31, 2017 and 2018 totaling ¥50,602 million and ¥72,665 million, respectively, is attributed to certain non-current receivable balances which are reported as “Other” assets in the consolidated balance sheets.

The net changes in the allowance for credit losses relating to finance receivables and vehicles and equipment on operating leases for the years ended March 31, 2016, 2017 and 2018 are as follows:

	Yen in millions
	For the years ended March 31,
	2016			2017			2018
Allowance for credit losses at beginning of year		178,038			167,330			178,101
Provision for credit losses, net of reversal		90,236			92,147			76,143
Charge-offs		(102,948	)		(99,550	)		(96,444	)
Recoveries		22,356			21,757			25,344
Other		(20,352	)		(3,583	)		943
Allowance for credit losses at end of year		167,330			178,101			184,087

“Other” primarily includes the impact of currency translation adjustments for the years ended March 31, 2016, 2017 and 2018.

The net changes in the allowance for credit losses above relating to retail receivables portfolio segment, finance lease receivables portfolio segment and wholesale and other dealer loan receivables portfolio segment for the years ended March 31, 2016, 2017 and 2018 are as follows:

	Yen in millions
	For the year ended March 31, 2016
	Retail			Finance leases			Wholesale and other dealer loans
Allowance for credit losses at beginning of year		109,316			29,303			30,053
Provision for credit losses, net of reversal		65,677			1,742			4,962
Charge-offs		(83,116	)		(3,833	)		(667	)
Recoveries		18,999			380			230
Other		(12,023	)		(2,992	)		(3,750	)
Allowance for credit losses at end of year		98,853			24,600			30,828
	Yen in millions
	For the year ended March 31, 2017
	Retail			Finance leases			Wholesale and other dealer loans
Allowance for credit losses at beginning of year		98,853			24,600			30,828
Provision for credit losses, net of reversal		67,433			1,657			854
Charge-offs		(78,114	)		(2,007	)		(324	)
Recoveries		18,282			194			160
Other		(2,100	)		(482	)		(622	)
Allowance for credit losses at end of year		104,354			23,962			30,896

	Yen in millions
	For the year ended March 31, 2018
	Retail			Finance leases			Wholesale and other dealer loans
Allowance for credit losses at beginning of year		104,354			23,962			30,896
Provision for credit losses, net of reversal		52,891			7,115			6,497
Charge-offs		(74,868	)		(2,708	)		(823	)
Recoveries		20,511			315			59
Other		569			133			171
Allowance for credit losses at end of year		103,457			28,817			36,800

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Affiliated companies and variable interest entities

12 Months Ended

Mar. 31, 2018

Affiliated companies and variable interest entities

11. Affiliated companies and variable interest entities:

Investments in and transactions with affiliated companies -

Summarized financial information for affiliated companies accounted for by the equity method is shown below:

	Yen in millions
	March 31,
	2017		2018
Current assets		11,795,296		12,766,962
Noncurrent assets		11,003,432		12,326,689
Total assets		22,798,728		25,093,651
Current liabilities		7,419,176		8,061,342
Long-term liabilities and noncontrolling interests		5,423,938		5,940,549
Affiliated companies accounted for by the equity method shareholders’ equity		9,955,614		11,091,760
Total liabilities and shareholders’ equity		22,798,728		25,093,651
Toyota’s share of affiliated companies accounted for by the equity method shareholders’ equity		2,845,422		3,162,711
Number of affiliated companies accounted for by the equity method at end of period		54		57

	Yen in millions
	For the years ended March 31,
	2016		2017		2018
Net revenues		31,037,029		30,309,263		30,680,535
Gross profit		3,852,899		3,644,267		4,065,344
Net income attributable to affiliated companies accounted for by the equity method		957,742		1,099,080		1,344,687
Equity in earnings of affiliated companies attributable to Toyota Motor Corporation		329,099		362,060		470,083

Entities comprising a significant portion of Toyota’s investment in affiliated companies and percentage of ownership are presented below:

	Percentage of ownership
	March 31,
Name of affiliated companies	2017			2018
Denso Corporation		24.9	%		24.4	%
Toyota Industries Corporation		24.9	%		24.9	%
Aisin Seiki Co., Ltd.		24.1	%		24.9	%
Toyota Tsusho Corporation		22.0	%		22.0	%
Toyoda Gosei Co., Ltd.		43.0	%		43.0	%

Certain affiliated companies accounted for by the equity method with carrying amounts of ¥2,126,128 million and ¥2,334,642 million at March 31, 2017 and 2018, respectively, were quoted on various established markets at an aggregate value of ¥2,894,106 million and ¥3,145,940 million, respectively. Toyota evaluated its investments in affiliated companies, considering the length of time and the extent to which the quoted market prices have been less than the carrying amounts, the financial condition and near-term prospects of the affiliated companies and Toyota’s ability and intent to retain those investments in the companies for a period of time. Toyota did not recognize any impairment loss for the years ended March 31, 2016, 2017 and 2018.

Account balances and transactions with affiliated companies are presented below:

	Yen in millions
	March 31,
	2017		2018
Trade accounts and notes receivable, and other receivables		289,406		301,335
Accounts payable and other payables		691,173		736,023

	Yen in millions
	For the years ended March 31,
	2016		2017		2018
Net revenues		1,804,493		1,914,318		2,004,632
Purchases		4,359,854		5,357,682		5,749,430

Dividends from affiliated companies accounted for by the equity method for the years ended March 31, 2016, 2017 and 2018 were ¥186,212 million, ¥180,326 million and ¥196,403 million, respectively.

Toyota does not have any significant related party transactions other than transactions with affiliated companies in the ordinary course of business.

Variable Interest Entities -

Toyota enters into securitization transactions using special-purpose entities, that are considered variable interest entities (“VIEs”). Although the finance receivables and vehicles on operating leases related to securitization transactions have been legally sold to the VIEs, Toyota has both the power to direct the activities of the VIEs that most significantly impact the VIEs’ economic performance and the obligation to absorb losses of the VIEs or the right to receive benefits from the VIEs that could potentially be significant to the VIEs. As a result, Toyota is considered the primary beneficiary of the VIEs and therefore consolidates the VIEs.

Related to securitization transactions, ¥2,092,311 million and ¥1,964,350 million retail finance receivables, ¥557,383 million and ¥618,787 million vehicles on operating leases, ¥151,943 million and ¥146,828 million restricted cash and ¥2,067,221 million and ¥1,952,973 million secured debt were included in Toyota’s consolidated financial statements as of March 31, 2017 and 2018, respectively. The creditors of the VIEs do not have recourse to Toyota’s general credit with the exception of debts guaranteed by Toyota. Risks to which Toyota is exposed including credit, interest rate, and/or prepayment risks are not incremental compared with the situation before Toyota enters into securitization transactions.

Toyota has variable interests in investment trusts that are VIEs due mainly to insufficient equity within the structure but determined that it was not the primary beneficiary due to lack of the power to direct the activities of the VIEs that most significantly impact the VIEs’ economic performance and, therefore, does not consolidate the VIEs. Investments in the trusts are held at fair value and are included in “Marketable securities and other securities investments” in the accompanying consolidated balance sheets. As of March 31, 2018, the maximum exposure to loss is limited to the carrying value of its investment in the trusts, which totaled ¥446,778 million, compared to ¥539,862 million as of March 31, 2017. Toyota does not provide support that is not contractually required to the trusts.

As for VIEs other than those specified above, neither the aggregate size nor Toyota’s involvements are material to Toyota’s consolidated financial statements.

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Short-term borrowings and long-term debt

12 Months Ended

Mar. 31, 2018

Short-term borrowings and long-term debt

12. Short-term borrowings and long-term debt:

Short-term borrowings at March 31, 2017 and 2018 consist of the following:

	Yen in millions
	March 31,
	2017		2018
Loans, principally from banks, with a weighted-average interest at March 31, 2017 and March 31, 2018 of 1.86% and of 2.14% per annum, respectively		1,125,324		1,254,444
Commercial paper with a weighted-average interest at March 31, 2017 and March 31, 2018 of 1.08% and of 1.65% per annum, respectively		3,828,358		3,900,469
		4,953,682		5,154,913

As of March 31, 2018, Toyota has unused short-term lines of credit amounting to ¥1,712,315 million of which ¥245,797 million related to commercial paper programs. Under these programs, Toyota is authorized to obtain short-term financing at prevailing interest rates for periods not in excess of 360 days.

Long-term debt at March 31, 2017 and 2018 comprises the following:

	Yen in millions
	March 31,
	2017			2018
Unsecured loans, representing obligations principally to banks, due 2017 to 2036 in 2017 and due 2018 to 2036 in 2018 with a weighted-average interest at March 31, 2017 and March 31, 2018 of 2.44% and of 2.70% per annum, respectively		3,318,865			3,215,309
Secured loans, representing obligations principally to finance receivables securitization due 2017 to 2030 in 2017 and due 2018 to 2030 in 2018 with a weighted-average interest at March 31, 2017 and March 31, 2018 of 1.43% and of 1.99% per annum, respectively		2,080,362			1,963,057
Medium-term notes of consolidated subsidiaries, due 2017 to 2046 in 2017 and due 2018 to 2046 in 2018 with a weighted-average interest at March 31, 2017 and March 31, 2018 of 2.12% and of 2.18% per annum, respectively		6,923,511			6,994,629
Unsecured notes of parent company, due 2017 to 2036 in 2017 and due 2018 to 2037 in 2018 with a weighted-average interest at March 31, 2017 and March 31, 2018 of 1.35% and of 0.94% per annum, respectively		370,000			370,000
Unsecured notes of consolidated subsidiaries, due 2017 to 2032 in 2017 and due 2018 to 2031 in 2018 with a weighted-average interest at March 31, 2017 and March 31, 2018 of 2.17% and of 2.20% per annum, respectively		1,430,022			1,569,517
Secured notes of consolidated subsidiaries, due 2017 to 2020 in 2017 and due 2018 to 2021 in 2018 with a weighted-average interest at March 31, 2017 and March 31, 2018 of 8.14% and of 7.90% per annum, respectively		57,036			59,513
Long-term capital lease obligations, due 2017 to 2035 in 2017 and due 2018 to 2035 in 2018 with interest ranging from 0.37% to 14.73% per annum in 2017 and from 0.37% to 14.73% per annum in 2018		22,249			20,626
		14,202,045			14,192,651
Less - Current portion due within one year		(4,290,449	)		(4,186,277	)
		9,911,596			10,006,374

As of March 31, 2018, approximately 48%, 11%, 10%, 9%, 6% and 16% of long-term debt are denominated in U.S. dollars, Japanese yen, euros, Australian dollars, Canadian dollars and other currencies, respectively.

As of March 31, 2018, property, plant and equipment with a book value of ¥658,675 million and other assets aggregating ¥2,052,752 million were pledged as collateral mainly for certain debt obligations of subsidiaries. These other assets principally consist of securitized finance receivables.

The aggregate amounts of annual maturities of long-term debt during the next five years are as follows:

Years ending March 31,	Yen in millions
2019		4,186,277
2020		2,848,360
2021		2,398,498
2022		2,236,208
2023		1,612,872

Standard agreements with certain banks include provisions that collateral (including sums on deposit with such banks) or guarantees will be furnished upon the banks’ request and that any collateral furnished, pursuant to such agreements or otherwise, will be applicable to all present or future indebtedness to such banks. During the year ended March 31, 2018, Toyota has not received any significant requests from these banks.

As of March 31, 2018, Toyota has unused long-term lines of credit amounting to ¥6,728,922 million.

Interest expense during the years ended March 31, 2016, 2017 and 2018 were ¥377,310 million, ¥352,691 million and ¥415,094 million, respectively. Interest expense related to the financial services business is included in “Cost of financing operations” in the accompanying consolidated statements of income.

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Product warranties and recalls and other safety measures

12 Months Ended

Mar. 31, 2018

Product warranties and recalls and other safety measures

13. Product warranties and recalls and other safety measures:

Toyota provides product warranties for certain defects mainly resulting from manufacturing based on warranty contracts with its customers at the time of sale of products. Toyota accrues estimated warranty costs to be incurred in the future in accordance with the warranty contracts. In addition to product warranties, Toyota initiates recalls and other safety measures to repair or to replace parts which might be expected to fail from products safety perspectives or customer satisfaction standpoints. Toyota accrues for costs of recalls and other safety measures based on the amount estimated from historical experience.

Liabilities for product warranties and liabilities for recalls and other safety measures have been combined into a single table showing an aggregate liability for quality assurances due to the fact that both are liabilities for costs to repair or replace defects of vehicles and the amounts incurred for recalls and other safety measures may affect the amounts incurred for product warranties and vice versa.

Liabilities for quality assurances are included in “Accrued expenses” in the consolidated balance sheets.

The net changes in liabilities for quality assurances above for the years ended March 31, 2016, 2017 and 2018 consist of the following:

	Yen in millions
	For the years ended March 31,
	2016			2017			2018
Liabilities for quality assurances at beginning of year		1,328,916			1,403,764			1,696,938
Payments made during year		(501,073	)		(604,853	)		(586,943	)
Provision for quality assurances		636,719			919,086			649,377
Changes relating to pre-existing quality assurances		(39,225	)		(24,147	)		(56,769	)
Other		(21,573	)		3,088			(291	)
Liabilities for quality assurances at end of year		1,403,764			1,696,938			1,702,312

“Other” primarily includes the impact of currency translation adjustments and the impact of consolidation and deconsolidation of certain entities due to changes in ownership interest.

The table below shows the net changes in liabilities for recalls and other safety measures which are comprised in liabilities for quality assurances above for the years ended March 31, 2016, 2017 and 2018.

	Yen in millions
	For the years ended March 31,
	2016			2017			2018
Liabilities for recalls and other safety measures at beginning of year		755,050			925,475			1,275,200
Payments made during year		(347,861	)		(444,416	)		(456,177	)
Provision for recalls and other safety measures		524,100			794,009			454,391
Other		(5,814	)		132			1,842
Liabilities for recalls and other safety measures at end of year		925,475			1,275,200			1,275,256

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Other payables

12 Months Ended

Mar. 31, 2018

Other payables

14. Other payables:

Other payables are mainly related to purchases of property, plant and equipment and non-manufacturing purchases.

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Income taxes

12 Months Ended

Mar. 31, 2018

Income taxes

15. Income taxes:

The components of income before income taxes comprise the following:

	Yen in millions
	For the years ended March 31,
	2016		2017		2018
Income before income taxes:
Parent company and domestic subsidiaries		1,834,413		1,423,208		1,880,971
Foreign subsidiaries		1,148,968		770,617		739,458
		2,983,381		2,193,825		2,620,429

The provision for income taxes consists of the following:

	Yen in millions
	For the years ended March 31,
	2016			2017			2018
Current income tax expense:
Parent company and domestic subsidiaries		591,868			435,560			565,998
Foreign subsidiaries		253,512			246,639			176,369
Total current		845,380			682,199			742,367
Deferred income tax expense (benefit):
Parent company and domestic subsidiaries		(40,934	)		(21,756	)		45,097
Foreign subsidiaries		73,823			(31,543	)		(283,058	)
Total deferred		32,889			(53,299	)		(237,961	)
Total provision		878,269			628,900			504,406

Net deferred liabilities as of March 31, 2018 decreased by ¥218,323 million and provision for income taxes for the year ended March 31, 2018 decreased by ¥249,694 million, respectively, resulting from the Tax Cuts and Jobs Act of 2017 of the United States.

Toyota is subject to a number of different income taxes which, in the aggregate, indicate a statutory rate in Japan of approximately 32.9%, 31.1% and 31.1% for the years ended March 31, 2016, 2017 and 2018, respectively. The statutory tax rates in effect for the year in which the temporary differences are expected to reverse are used to calculate the tax effects of temporary differences which are expected to reverse in the future years. Reconciliation of the differences between the statutory tax rate and the effective income tax rate is as follows:

	For the years ended March 31,
	2016			2017			2018
Statutory tax rate		32.9	%		31.1	%		31.1	%
Increase (reduction) in taxes resulting from:
Non-deductible expenses		0.3			0.4			0.4
Deferred tax liabilities on undistributed earnings of foreign subsidiaries		1.0			1.3			1.1
Deferred tax liabilities on undistributed earnings of affiliated companies accounted for by the equity method		2.4			3.3			3.8
Valuation allowance		(0.4	)		(0.6	)		(2.0	)
Tax credits		(4.7	)		(4.8	)		(4.3	)
The difference between the statutory tax rate in Japan and that of foreign subsidiaries		(1.3	)		(1.9	)		(1.5	)
Unrecognized tax benefits adjustments		0.2			0.4			0.2
Revision to reduce deferred tax assets and liabilities at the fiscal year-end due to changes in tax rates		(0.5	)		—			—
Effect of the Tax Cuts and Jobs Act of 2017 of the United States		—			—			(9.5	)
Other		(0.5	)		(0.5	)		(0.1	)
Effective income tax rate		29.4	%		28.7	%		19.2	%

Significant components of deferred tax assets and liabilities are as follows:

	Yen in millions
	March 31,
	2017			2018
Deferred tax assets
Accrued pension and severance costs		219,465			199,366
Accrued expenses and liabilities for quality assurances		644,936			609,257
Other accrued employees’ compensation		114,752			112,316
Operating loss carryforwards for tax purposes		76,317			203,897
Allowance for doubtful accounts and credit losses		82,916			63,223
Property, plant and equipment and other assets		234,372			249,320
Other		335,992			348,852
Gross deferred tax assets		1,708,750			1,786,231
Less - Valuation allowance		(146,623	)		(93,814	)
Total deferred tax assets		1,562,127			1,692,417
Deferred tax liabilities
Unrealized gains on securities, net		(692,962	)		(635,292	)
Undistributed earnings of foreign subsidiaries		(28,544	)		(29,967	)
Undistributed earnings of affiliated companies accounted for by the equity method		(709,094	)		(794,485	)
Basis difference of acquired assets		(31,861	)		(30,768	)
Lease transactions		(973,000	)		(751,292	)
Other		(46,407	)		(74,658	)
Gross deferred tax liabilities		(2,481,868	)		(2,316,462	)
Net deferred tax liability		(919,741	)		(624,045	)

The deferred tax assets and liabilities above that comprise the net deferred tax liability are included in the consolidated balance sheets as follows:

	Yen in millions
	March 31,
	2017			2018
Deferred tax assets
Investments and other assets - Other		503,985			494,120
Deferred tax liabilities
Deferred income taxes (Long-term liabilities)		(1,423,726	)		(1,118,165	)
Net deferred tax liability		(919,741	)		(624,045	)

The factors used to assess the likelihood of realization of the deferred tax assets are the future reversal of existing taxable temporary differences, the future taxable income and available tax planning strategies that are prudent and feasible. All available evidence, both positive and negative, is considered to determine whether, based on the weight of that evidence, a valuation allowance is needed for deferred tax assets which are not more-likely-than-not to be realized.

The accounting for deferred tax assets represents Toyota’s current best estimate based on all available evidence. Unanticipated events or changes could result in re-evaluating the realizability of deferred tax assets.

Operating loss carryforwards for tax purposes as of March 31, 2018 in Japan and foreign countries were ¥26,712 million and ¥866,392 million, respectively, and are available as an offset against future taxable income. The majority of these carryforwards in Japan and foreign countries expire in years 2019 to 2027 and expire in years 2019 to 2038, respectively. Tax credit carryforwards as of March 31, 2018 in Japan and foreign countries were ¥2,847 million and ¥55,939 million, respectively, and the majority of these carryforwards in Japan and foreign countries expire in years 2019 to 2021 and expire in years 2019 to 2038, respectively.

The valuation allowance mainly relates to deferred tax assets of operating loss and foreign tax credit carryforwards for tax purposes that are not more-likely-than-not to be realized. The net changes in the total valuation allowance for deferred tax assets for the years ended March 31, 2016, 2017 and 2018 consist of the following:

	Yen in millions
	For the years ended March 31,
	2016			2017			2018
Valuation allowance at beginning of year		169,811			151,665			146,623
Additions		33,243			27,147			16,106
Deductions		(43,723	)		(37,891	)		(74,435	)
Other		(7,666	)		5,702			5,520
Valuation allowance at end of year		151,665			146,623			93,814

“Other” includes the impact of consolidation and deconsolidation of certain entities due to changes in ownership interest and currency translation adjustments during the years ended March 31, 2016, 2017 and 2018.

Because management intends to reinvest undistributed earnings of foreign subsidiaries to the extent not expected to be remitted in the foreseeable future, management has made no provision for income taxes on those undistributed earnings aggregating ¥3,623,657 million as of March 31, 2018. Toyota estimates an additional tax provision of ¥139,287 million would be required if the full amount of those undistributed earnings were remitted.

A summary of the gross unrecognized tax benefits changes for the years ended March 31, 2016, 2017 and 2018 is as follows:

	Yen in millions
	For the years ended March 31,
	2016			2017			2018
Balance at beginning of year		13,644			19,250			21,553
Additions based on tax positions related to the current year		1,001			8,187			612
Additions for tax positions of prior years		6,378			6,076			13,954
Reductions for tax positions of prior years		(77	)		(5,593	)		(13,217	)
Reductions for tax positions related to lapse of statute of limitations		(7	)		(9	)		—
Reductions for settlements		(427	)		(6,317	)		(26	)
Other		(1,262	)		(41	)		(1,312	)
Balance at end of year		19,250			21,553			21,564

The amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was not material at March 31, 2016, 2017 and 2018, respectively. Toyota does not believe it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within the next twelve months.

Interest and penalties related to income tax liabilities are included in “Other income (loss), net”. The amounts of interest and penalties accrued as of and recognized for the years ended March 31, 2016, 2017 and 2018, were not material.

Toyota remains subject to income tax examination for the tax returns related to the years beginning on and after April 1, 2011 and April 1, 2002, with various tax jurisdictions in Japan and foreign countries, respectively.

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Class Shares

12 Months Ended

Mar. 31, 2018

Class Shares

16. Class Shares:

TMC issued First Series Model AA Class Shares (the “Model AA Class Shares”) on July 24, 2015. Presented below is additional information regarding the Model AA Class Shares:

Total number of shares issued	:	47,100,000 shares
Issue price	:	10,598 yen per share
Purchase price	:	10,121.09 yen per share
Voting rights	:	Model AA Class Shares shall have voting rights. The number of shares constituting one unit with respect to Model AA Class Shares shall be 100.
Restrictions on transfer	:	Model AA Class Shares shall have restrictions on transfer.
Dividends	:	(1)   If the record date falls in the fiscal year ending on March 31, 2016: 0.5% of the issue price
		(2)   If the record date falls in the fiscal year ending on March 31, 2017 through March 31, 2020: the annual dividend rate for the previous fiscal year plus 0.5% of the issue price
		(3)   If the record date falls in the fiscal year ending on March 31, 2021 or later: 2.5% of the issue price
Shareholder’s right	:	(1)   Shareholder’s conversion right into Common Shares Shareholders of the Model AA Class Shares may demand TMC to acquire all or a part of their Model AA Class Shares in exchange for Common Shares on the first business day of April and October of every year, starting October 1, 2020.
		(2)   Shareholder’s cash put option Shareholders of the Model AA Class Shares may demand TMC to acquire all or a part of their Model AA Class Shares in exchange for cash on the last business day of March, June, September and December of each year, starting on September 1, 2020.
TMC’s right	:	TMC may acquire, on or after April 2, 2021, all of the outstanding Model AA Class Shares in exchange for cash.

The Model AA Class Shares will not be treated as shareholders’ equity because the shareholders of the Model AA Class Shares will have cash put options and hence, the Model AA Class Shares will be reported as mezzanine equity, a separate line item between liabilities and shareholders’ equity.

Unpaid dividends included in mezzanine equity as of March 31, 2017 and 2018 were ¥2,473 million and ¥3,721 million, respectively.

The difference between the issuance amount and initial carrying amount of the mezzanine equity is adjusted for accretion of the mezzanine equity over a period of time from the issuance date until the Class Shares can first be redeemed.

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Shareholders' equity

12 Months Ended

Mar. 31, 2018

Shareholders' equity

17. Shareholders’ equity:

Changes in the number of shares of common stock issued have resulted from the following:

	For the years ended March 31,
	2016			2017			2018
Common stock issued
Balance at beginning of year		3,417,997,492			3,337,997,492			3,262,997,492
Issuance during the year		—			—			—
Purchase and retirement		(80,000,000	)		(75,000,000	)		—
Balance at end of year		3,337,997,492			3,262,997,492			3,262,997,492

The Companies Act provides that an amount equal to 10% of distributions from surplus paid by the parent company and its Japanese subsidiaries be appropriated as a capital reserve or a retained earnings reserve. No further appropriations are required when the total amount of the capital reserve and the retained earnings reserve reaches 25% of stated capital.

The retained earnings reserve included in retained earnings as of March 31, 2017 and 2018 were ¥190,227 million and ¥194,890 million, respectively. The Companies Act provides that the retained earnings reserve of the parent company and its Japanese subsidiaries is restricted and unable to be used for dividend payments, and is excluded from the calculation of the profit available for dividend.

The amounts of statutory retained earnings of the parent company available for dividend payments to shareholders were ¥8,470,887 million and ¥9,256,045 million as of March 31, 2017 and 2018, respectively. In accordance with customary practice in Japan, the distributions from surplus are not accrued in the financial statements for the corresponding period, but are recorded in the subsequent accounting period after shareholders’ approval has been obtained. Retained earnings at March 31, 2018 include amounts representing year-end cash dividends of ¥349,190 million, ¥120 per common share, which were resolved at the Meeting of the Board of Directors held on May 9, 2018.

Retained earnings at March 31, 2018 include ¥2,429,170 million relating to equity in undistributed earnings of affiliated companies accounted for by the equity method.

The repurchase, reissuance and retirement of treasury stock for the years ended March 31, 2016, 2017 and 2018 are as follows:

For the year ended March 31, 2016

Repurchase of treasury stock

Reason for repurchasing treasury stock -

The repurchase was made to avoid the dilution of common share value as a result of the issuance of the First Series Model AA Class Shares.

Details of matters relating to repurchase -

Number of common shares repurchased	47,100,000 shares
Total purchase price for repurchase of shares	¥349,935 million

Reason for repurchasing treasury stock -

The repurchase was made to return capital to shareholders in addition to promoting capital efficiency and agile capital policy in view of the business environment.

Details of matters relating to repurchase -

Number of common shares repurchased	62,942,900 shares
Total purchase price for repurchase of shares	¥432,692 million

Retirement of treasury stock

Reason for retiring treasury stock -

The retirement was made to relieve concerns regarding the dilution of common share value due to reissuanceof treasury stock in the future.

Details of matters relating to retirement -

Number of common shares retired 80,000,000 shares

The amount on retirement of treasury stock was treated as a reduction in additional paid-in capital and retained earnings. As a result, treasury stock, additional paid-in capital and retained earnings decreased by ¥400,537 million, ¥1,048 million and ¥399,489 million, respectively.

For the year ended March 31, 2017

Repurchase of treasury stock

Reason for repurchasing treasury stock -

The repurchase was made to return capital to shareholders in addition to promoting capital efficiency and agile capital policy in view of the business environment.

Details of matters relating to repurchase -

Number of common shares repurchased	116,555,700 shares
Total purchase price for repurchase of shares	¥699,986 million

Reissuance of treasury stock

Reason for reissuing treasury stock and details of matters relating to reissuance -

On August 1, 2016, the parent company implemented share exchange as a result of which the parent company became a wholly owning parent company and Daihatsu Motor Co., Ltd. (“Daihatsu”) became a wholly owned subsidiary, and the parent company acquired additional shares of Daihatsu. As a result of this share exchange, the parent company issued 52,856,096 shares of treasury stock, treasury stock decreased by ¥283,561 million and gains on disposal of treasury stock occurred in the amount of ¥27,972 million. As a result, additional paid-in capital increased by ¥27,972 million. As a result of acquiring additional shares of Daihatsu, additional paid-in capital, noncontrolling interests and accumulated other comprehensive income (loss) decreased by ¥53,742 million, ¥255,565 million and ¥2,226 million, respectively.

Retirement of treasury stock

Reason for retiring treasury stock -

The retirement was made to relieve concerns regarding the dilution of common share value due to reissuanceof treasury stock in the future.

Details of matters relating to retirement -

Number of common shares retired 75,000,000 shares

The amount on retirement of treasury stock was treated as a reduction in additional paid-in capital and retained earnings. As a result, treasury stock, additional paid-in capital and retained earnings decreased by ¥407,383 million, ¥27,374 million and ¥380,009 million, respectively.

For the year ended March 31, 2018

Repurchase of treasury stock

Reason for repurchasing treasury stock -

The repurchase was made to return capital to shareholders in addition to promoting capital efficiency and agile capital policy in view of the business environment.

Details of matters relating to repurchase -

Number of common shares repurchased	73,708,400 shares
Total purchase price for repurchase of shares	¥499,989 million

Reissuance of treasury stock

Reason for reissuing treasury stock -

On August 4, 2017, the parent company and Mazda Motor Corporation (Mazda) signed an agreement to enter a business and capital alliance, with the aim of further strengthening their lasting partnership. The parent company acquired common stock newly issued by Mazda through a third-party allotment. Mazda acquired the parent company’s shares that were equivalent in value to the Mazda shares through a disposition of treasury stock involving a third-party allotment implemented by the parent company.

Details of matters relating to reissuance -

Number of common shares reissued	8,293,300 shares
Amount of proceeds	¥50,000 million

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Accumulated other comprehensive income

12 Months Ended

Mar. 31, 2018

Accumulated other comprehensive income

18. Accumulated other comprehensive income:

Changes in accumulated other comprehensive income (loss) are as follows:

	Yen in millions
	Foreign currency translation adjustments			Unrealized gains (losses) on securities			Pension liability adjustments			Accumulated other comprehensive income (loss)
Balance at March 31, 2015		(136,090	)		1,727,565			(113,930	)		1,477,545
Other comprehensive income (loss) before reclassifications, net of taxes of ¥10,719 million, ¥130,092 million, ¥93,210 million and ¥234,021 million		(423,404	)		(291,681	)		(214,600	)		(929,685	)
Reclassifications, net of taxes of ¥— million, ¥9,832 million, ¥(3,318) million and ¥6,514 million		28,052			(20,511	)		5,419			12,960
Other comprehensive income (loss), net of tax		(395,352	)		(312,192	)		(209,181	)		(916,725	)
Less - Other comprehensive income attributable to noncontrolling interests		32,387			9,572			7,989			49,948
Balance at March 31, 2016		(499,055	)		1,424,945			(315,122	)		610,768
Other comprehensive income (loss) before reclassifications, net of taxes of ¥9,240 million, ¥(9,048) million, ¥(40,099) million and ¥(39,907) million		(57,926	)		41,134			82,939			66,147
Reclassifications, net of taxes of ¥— million, ¥23,275 million, ¥(5,255) million and ¥18,020 million		—			(36,855	)		10,373			(26,482	)
Other comprehensive income (loss), net of tax		(57,926	)		4,279			93,312			39,665
Less - Other comprehensive income attributable to noncontrolling interests		5,499			(12,281	)		(503	)		(7,285	)
Equity transaction with noncontrolling interests and other		(8,626	)		9,060			(2,660	)		(2,226	)
Balance at March 31, 2017		(560,108	)		1,426,003			(224,973	)		640,922
Other comprehensive income (loss) before reclassifications, net of taxes of ¥(3,624) million, ¥38,539 million, ¥(7,568) million and ¥27,347 million		(113,942	)		(72,501	)		15,814			(170,629	)
Reclassifications, net of taxes of ¥— million, ¥9,729 million, ¥(2,500) million and ¥7,229 million		(6,664	)		(22,058	)		6,501			(22,221	)
Other comprehensive income (loss), net of tax		(120,606	)		(94,559	)		22,315			(192,850	)
Less - Other comprehensive income attributable to noncontrolling interests		1,629			(2,022	)		(580	)		(973	)
Equity transaction with noncontrolling interests and other		—			162			(11,562	)		(11,400	)
Balance at March 31, 2018		(679,085	)		1,329,584			(214,800	)		435,699

Reclassifications for the years ended March 31, 2016, 2017 and 2018 consist of the following:

	Yen in millions
	For the years ended March 31,									Affected line items in the consolidated statements of income
	2016			2017			2018
Foreign currency translation adjustments:
		28,052			—			(6,664	)	Other income (loss), net
		28,052			—			(6,664	)	Income before income taxes and equity in earnings of affiliated companies
		28,052			—			(6,664	)	Net income
Unrealized gains (losses) on securities:
		(779	)		(24,553	)		(4,567	)	Financing operations
		(27,275	)		(3,572	)		(25,247	)	Foreign exchange gain (loss), net
		(6,185	)		(31,685	)		(1,993	)	Other income (loss), net
		(34,239	)		(59,810	)		(31,807	)	Income before income taxes and equity in earnings of affiliated companies
		9,832			23,275			9,729		Provision for income taxes
		3,896			(320	)		20		Equity in earnings of affiliated companies
		(20,511	)		(36,855	)		(22,058	)	Net income
Pension liability adjustments:
Recognized net actuarial loss		12,971			19,432			12,914		*1
Amortization of prior service costs		(4,234	)		(3,804	)		(3,913	)	*1
		8,737			15,628			9,001		Income before income taxes and equity in earnings of affiliated companies
		(3,318	)		(5,255	)		(2,500	)	Provision for income taxes
		5,419			10,373			6,501		Net income
Total reclassifications, net of tax		12,960			(26,482	)		(22,221	)

Amounts of reclassifications in parentheses indicate gains in the consolidated statements of income.

*1: These components are included in the computation of net periodic pension cost. See note 20 to the consolidated financial statements for additional information.

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Stock-based compensation

12 Months Ended

Mar. 31, 2018

Stock-based compensation

19. Stock-based compensation:

In June 1997, the parent company’s shareholders approved a stock option plan for board members. In June 2001, the shareholders approved an amendment of the plan to include both board members and key employees. Each year until June 2010, since the plans’ inception, the shareholders have approved the authorization for the grant of options for the purchase of the parent company’s common stock. Authorized shares for each year that remain ungranted are unavailable for grant in future years. Stock options granted in and after August 2006 have terms of 8 years and an exercise price equal to 1.025 times the closing price of Toyota’s common stock on the date of grant. These options generally vest 2 years from the date of grant.

There were no stock-based compensation expenses for stock options as selling, general and administrative expenses for the years ended March 31, 2016, 2017 and 2018, respectively.

The following table summarizes Toyota’s stock option activity:

				Yen				Yen in millions
	Number of shares			Weighted- average exercise price		Weighted- average remaining contractual life in years		Aggregate intrinsic value
Options outstanding at March 31, 2015		3,503,500			4,632		2.05		13,143
Granted		—			—
Exercised		(936,400	)		5,049
Canceled		(473,600	)		6,917
Options outstanding at March 31, 2016		2,093,500			3,858		1.56		4,384
Granted		—			—
Exercised		(785,600	)		4,006
Canceled		(115,600	)		4,682
Options outstanding at March 31, 2017		1,192,300			3,682		0.80		2,813
Granted		—			—
Exercised		(643,800	)		3,726
Canceled		(264,900	)		4,154
Options outstanding at March 31, 2018		283,600			3,153		0.33		1,041
Options exercisable at March 31, 2016		2,093,500			3,858		1.56		4,384
Options exercisable at March 31, 2017		1,192,300			3,682		0.80		2,813
Options exercisable at March 31, 2018		283,600			3,153		0.33		1,041

The total intrinsic value of options exercised for the years ended March 31, 2016, 2017 and 2018 was ¥2,236 million, ¥1,632 million and ¥1,881 million, respectively.

Cash received from the exercise of stock options for the years ended March 31, 2016, 2017 and 2018 was ¥4,728 million, ¥3,147 million and ¥2,399 million, respectively.

The following table summarizes information for options outstanding and options exercisable at March 31, 2018:

Outstanding					Exercisable
Number of shares	Exercise price		Remaining life		Number of shares		Exercise price
	Yen		Years				Yen
283,600		3,153		0.33		283,600		3,153

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Employee benefit plans

12 Months Ended

Mar. 31, 2018

Employee benefit plans

20. Employee benefit plans:

Pension and severance plans -

Upon terminations of employment, employees of the parent company and subsidiaries in Japan are entitled, under the retirement plans of each company, to lump-sum indemnities or pension payments, based on current rates of pay and lengths of service or the number of “points” mainly determined by those. Under normal circumstances, the minimum payment prior to retirement age is an amount based on voluntary retirement. Employees receive additional benefits on involuntary retirement, including retirement at the age limit.

Effective October 1, 2004, the parent company amended its retirement plan to introduce a “point” based retirement benefit plan. Under the new plan, employees are entitled to lump-sum or pension payments determined based on accumulated “points” vested in each year of service.

There are three types of “points” that vest in each year of service consisting of “service period points” which are attributed to the length of service, “job title points” which are attributed to the job title of each employee, and “performance points” which are attributed to the annual performance evaluation of each employee. Under normal circumstances, the minimum payment prior to retirement age is an amount reflecting an adjustment rate applied to represent voluntary retirement. Employees receive additional benefits upon involuntary retirement, including retirement at the age limit.

Effective October 1, 2005, the parent company partly amended its retirement plan and introduced the quasi cash-balance plan under which benefits are determined based on the variable-interest crediting rate rather than the fixed-interest crediting rate as was in the pre-amended plan.

The parent company and most subsidiaries in Japan have contributory funded defined benefit pension plans, which are pursuant to the Corporate Defined Benefit Pension Plan Law (CDBPPL). The contributions to the plans are funded with several financial institutions in accordance with the applicable laws and regulations. These pension plan assets consist principally of common stocks, government bonds and insurance contracts.

Most foreign subsidiaries have pension plans or severance indemnity plans covering substantially all of their employees under which the cost of benefits are currently invested or accrued. The benefits for these plans are based primarily on lengths of service and current rates of pay.

Toyota uses a March 31 measurement date for its benefit plans.

Information regarding Toyota’s defined benefit plans is as follows:

	Yen in millions
	March 31,
	Japanese plans						Foreign plans
	2017			2018			2017			2018
Change in benefit obligation
Benefit obligation at beginning of year		1,912,156			1,930,498			963,255			1,026,024
Service cost		89,443			88,964			41,733			35,887
Interest cost		8,800			13,252			35,593			37,817
Plan participants’ contributions		923			1,266			436			912
Plan amendments		(21	)		(58	)		(996	)		(12	)
Net actuarial (gain) loss		(45,783	)		35,017			22,220			66,039
Acquisition and other		30,622			18,206			(18,778	)		(26,616	)
Benefits paid		(65,642	)		(67,835	)		(17,439	)		(42,070	)
Benefit obligation at end of year		1,930,498			2,019,310			1,026,024			1,097,981
Change in plan assets
Fair value of plan assets at beginning of year		1,369,236			1,483,889			692,801			758,306
Actual return on plan assets		81,600			111,278			74,760			89,924
Acquisition and other		30,266			14,615			(11,960	)		(16,009	)
Employer contributions		39,692			42,095			15,925			20,961
Plan participants’ contributions		923			1,266			436			912
Benefits paid		(37,828	)		(40,264	)		(13,656	)		(38,611	)
Fair value of plan assets at end of year		1,483,889			1,612,879			758,306			815,483
Funded status		446,609			406,431			267,718			282,498

Amounts recognized in the consolidated balance sheets as of March 31, 2017 and 2018 are comprised of the following:

	Yen in millions
	March 31,
	Japanese plans						Foreign plans
	2017			2018			2017			2018
Accrued expenses (Accrued pension and severance costs)		28,265			27,718			2,936			2,982
Accrued pension and severance costs		633,774			647,134			271,296			284,048
Investments and other assets - Other (Prepaid pension and severance costs)		(215,430	)		(268,421	)		(6,514	)		(4,532	)
Net amount recognized		446,609			406,431			267,718			282,498

Amounts recognized in accumulated other comprehensive income (loss) as of March 31, 2017 and 2018 are comprised of the following:

	Yen in millions
	March 31,
	Japanese plans						Foreign plans
	2017			2018			2017			2018
Net actuarial loss		(288,126	)		(248,791	)		(116,700	)		(119,407	)
Prior service costs		36,980			32,812			(2,151	)		(1,826	)
Net transition obligation		—			—			—			—
Net amount recognized		(251,146	)		(215,979	)		(118,851	)		(121,233	)

The accumulated benefit obligation for all defined benefit pension plans was ¥1,874,424 million and ¥1,959,533 million in Japanese plans, ¥957,217 million and ¥1,023,094 million in Foreign plans at March 31, 2017 and 2018, respectively.

The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for which the accumulated benefit obligations exceed plan assets are as follows:

	Yen in millions
	March 31,
	Japanese plans				Foreign plans
	2017		2018		2017		2018
Projected benefit obligation		892,684		833,080		445,482		490,844
Accumulated benefit obligation		866,566		806,774		426,201		468,611
Fair value of plan assets		242,488		170,234		178,357		201,402

Components of the net periodic pension cost are as follows:

	Yen in millions
	For the years ended March 31,
	Japanese plans									Foreign plans
	2016			2017			2018			2016			2017			2018
Service cost		78,611			89,443			88,964			47,544			41,733			35,887
Interest cost		17,509			8,800			13,252			40,340			35,593			37,817
Expected return on plan assets		(35,012	)		(33,524	)		(36,409	)		(44,616	)		(38,893	)		(41,048	)
Amortization of prior service costs		(4,669	)		(4,148	)		(4,226	)		435			344			313
Recognized net actuarial loss		5,850			14,298			7,462			7,121			5,134			5,452
Amortization of net transition obligation		—			—			—			—			—			—
Net periodic pension cost		62,289			74,869			69,043			50,824			43,911			38,421

Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) are as follows:

	Yen in millions
	For the years ended March 31,
	Japanese plans									Foreign plans
	2016			2017			2018			2016			2017		2018
Net actuarial gain (loss)		(290,664	)		93,859			39,852			(11,242	)		13,647		(17,163	)
Recognized net actuarial loss		5,850			14,298			7,462			7,121			5,134		5,452
Prior service costs		489			21			58			573			996		12
Amortization of prior service costs		(4,669	)		(4,148	)		(4,226	)		435			344		313
Amortization of net transition obligation		—			—			—			—			—		—
Other		76			811			(7,979	)		272			1,962		9,004
Total recognized in other comprehensive income (loss)		(288,918	)		104,841			35,167			(2,841	)		22,083		(2,382	)

“Other” includes the impact of consolidation and deconsolidation of certain entities due to changes in ownership interest and currency translation adjustments during the years ended March 31, 2016, 2017 and 2018.

The estimated prior service costs and net actuarial loss that will be amortized from accumulated other comprehensive income (loss) into net periodic pension cost during the year ending March 31, 2019 are ¥ (4,200) million and ¥7,100 million in Japanese plans, ¥300 million and ¥6,900 million in Foreign plans, respectively.

Weighted-average assumptions used to determine benefit obligations as of March 31, 2017 and 2018 are as follows:

	March 31,
	Japanese plans						Foreign plans
	2017			2018			2017			2018
Discount rate		0.7	%		0.7	%		4.0	%		3.9	%
Rate of compensation increase		2.9	%		3.3	%		3.8	%		3.6	%

As of March 31, 2017 and 2018, the parent company and certain subsidiaries in Japan employ “point” based retirement benefit plans and do not use the rates of compensation increase to determine benefit obligations.

Weighted-average assumptions used to determine net periodic pension cost for the years ended March 31, 2016, 2017 and 2018 are as follows:

	For the years ended March 31,
	Japanese plans									Foreign plans
	2016			2017			2018			2016			2017			2018
Discount rate		1.1	%		0.5	%		0.7	%		4.0	%		4.2	%		4.0	%
Expected return on plan assets		2.5	%		2.4	%		2.4	%		6.3	%		6.1	%		6.0	%
Rate of compensation increase		2.5	%		2.7	%		2.9	%		4.4	%		3.9	%		3.8	%

During the years ended March 31, 2016, 2017 and 2018, the parent company and certain subsidiaries in Japan employ “point” based retirement benefit plans and do not use the rates of compensation increase to determine net periodic pension cost.

The expected rate of return on plan assets is determined after considering several applicable factors including, the composition of plan assets held, assumed risks of asset management, historical results of the returns on plan assets, Toyota’s principal policy for plan asset management, and forecasted market conditions.

Toyota’s policy and objective for plan asset management is to maximize returns on plan assets to meet future benefit payment requirements under risks which Toyota considers permissible. Asset allocations under the plan asset management are determined based on plan asset management policies of each plan which are established to achieve the optimized asset compositions in terms of the long-term overall plan asset management. In Japanese plans, excepting equity securities contributed by Toyota, approximately 40% of the plan assets is invested in equity securities, approximately 30% is invested in debt securities, and the rest of them is invested in insurance contracts and other products. In Foreign plans, excepting equity securities contributed by Toyota, approximately 65% of the plan assets is invested in equity securities, approximately 25% is invested in debt securities, and the rest of them is invested in other products. When actual allocations are not in line with target allocations, Toyota rebalances its investments in accordance with the policies. Prior to making individual investments, Toyota performs in-depth assessments of corresponding factors including category of products, industry type, currencies and liquidity of each potential investment under consideration to mitigate concentrations of risks such as market risk and foreign currency exchange rate risk. To assess performance of the investments, Toyota establishes bench mark return rates for each individual investment, combines these individual bench mark rates based on the asset composition ratios within each asset category, and compares the combined rates with the corresponding actual return rates on each asset category.

The following table summarizes the fair value of classes of plan assets as of March 31, 2017 and 2018. See note 27 to the consolidated financial statements for three levels of input which are used to measure fair value.

Japanese plans

	Yen in millions
	March 31, 2017
	Level 1		Level 2		Level 3		Total
Equity securities
Common stocks		585,052		—		—		585,052
Commingled funds		—		180,835		—		180,835
		585,052		180,835		—		765,887
Debt securities
Government bonds		87,958		—		—		87,958
Commingled funds		—		248,498		—		248,498
Other		—		39,754		81		39,835
		87,958		288,252		81		376,291
Insurance contracts		—		199,779		—		199,779
Other		42,083		34,131		496		76,710
Investments measured at net asset value		—		—		—		65,222
Total		715,093		702,997		577		1,483,889

	Yen in millions
	March 31, 2018
	Level 1		Level 2		Level 3		Total
Equity securities
Common stocks		620,281		—		—		620,281
Commingled funds		—		202,816		—		202,816
		620,281		202,816		—		823,097
Debt securities
Government bonds		88,959		—		—		88,959
Commingled funds		—		284,870		—		284,870
Other		—		36,567		19		36,586
		88,959		321,437		19		410,415
Insurance contracts		—		201,141		—		201,141
Other		41,446		61,301		—		102,747
Investments measured at net asset value		—		—		—		75,479
Total		750,686		786,695		19		1,612,879

Foreign plans

	Yen in millions
	March 31, 2017
	Level 1		Level 2		Level 3		Total
Equity securities
Common stocks		207,036		—		—		207,036
Commingled funds		—		152,104		—		152,104
		207,036		152,104		—		359,140
Debt securities
Government bonds		76,730		—		—		76,730
Commingled funds		—		36,430		—		36,430
Other		—		33,430		—		33,430
		76,730		69,860		—		146,590
Insurance contracts		—		—		—		—
Other		13,533		13,851		30,903		58,287
Investments measured at net asset value		—		—		—		194,289
Total		297,299		235,815		30,903		758,306

	Yen in millions
	March 31, 2018
	Level 1		Level 2		Level 3		Total
Equity securities
Common stocks		178,476		—		—		178,476
Commingled funds		—		197,566		—		197,566
		178,476		197,566		—		376,042
Debt securities
Government bonds		89,928		—		—		89,928
Commingled funds		—		11,642		—		11,642
Other		—		35,032		—		35,032
		89,928		46,674		—		136,602
Insurance contracts		—		—		—		—
Other		12,487		18,107		31,288		61,882
Investments measured at net asset value		—		—		—		240,957
Total		280,891		262,347		31,288		815,483

Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.

The following is description of the assets, information about the valuation techniques used to measure fair value, key inputs and significant assumptions:

Quoted market prices for identical securities are used to measure fair value of common stocks. Japanese stocks and foreign stocks represent 74% and 26% (as of March 31, 2017) and 76% and 24% (as of March 31, 2018) of common stocks, respectively, in Japanese plans. Common stocks include mainly foreign stocks as of March 31, 2017 and 2018 in Foreign plans.

Quoted market prices for identical securities are used to measure fair value of government bonds. Japanese government bonds and foreign government bonds represent 28% and 72% (as of March 31, 2017) and 29% and 71% (as of March 31, 2018) of government bonds, respectively, in Japanese plans. Government bonds include mainly foreign government bonds as of March 31, 2017 and 2018 in Foreign plans.

Commingled funds are beneficial interests of collective trust. The fair values of commingled funds are measured using the net asset value (“NAV”) provided by the administrator of the fund, and are categorized by the ability to redeem investments by the NAV.

The fair values of insurance contracts are measured using contracted amount with accrued interest.

“Other” consists of cash equivalents, other private placement investment funds and other assets. The fair values of other private placement investment funds are measured using the NAV provided by the administrator of the fund, and are categorized by the ability to redeem investments by the NAV.

The following tables summarize the changes in Level 3 plan assets measured at fair value for the years ended March 31, 2016, 2017 and 2018:

Japanese plans

	Yen in millions
	For the years ended March 31,
	2016									2017									2018
	Debt securities			Other			Total			Debt securities			Other			Total			Debt securities			Other			Total
Balance at beginning of year		233			1,018			1,251			146			2,518			2,664			81			496			577
Actual return on plan assets		1			(3	)		(2	)		—			(11	)		(11	)		—			(4	)		(4	)
Purchases, sales and settlements		(88	)		1,503			1,415			(65	)		(2,011	)		(2,076	)		(62	)		(492	)		(554	)
Other		—			—			—			—			—			—			—			—			—
Balance at end of year		146			2,518			2,664			81			496			577			19			—			19

Foreign plans

	Yen in millions
	For the years ended March 31,
	2016			2017			2018
	Other			Other			Other
Balance at beginning of year		17,511			30,758			30,903
Actual return on plan assets		1,966			279			2,024
Purchases, sales and settlements		12,372			—			—
Other		(1,091	)		(134	)		(1,639	)
Balance at end of year		30,758			30,903			31,288

Toyota expects to contribute ¥42,220 million in Japanese plans and ¥23,234 million in Foreign plans to its pension plans in the year ending March 31, 2019.

The following pension benefit payments, which reflect expected future service, as appropriate, are expected to be paid:

	Yen in millions
Years ending March 31,	Japanese plans		Foreign plans
2019		72,756		21,972
2020		73,891		23,700
2021		74,890		25,089
2022		78,254		26,724
2023		82,433		28,552
from 2024 to 2028		429,821		167,337
Total		812,045		293,374

Postretirement benefits other than pensions and postemployment benefits -

Toyota’s U.S. subsidiaries provide certain health care and life insurance benefits to eligible retired employees. In addition, Toyota provides benefits to certain former or inactive employees after employment, but before retirement. These benefits are provided through various insurance companies, health care providers and others. The costs of these benefits are recognized over the period the employee provides credited service to Toyota. Toyota’s obligations under these arrangements are not material.

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Derivative financial instruments

12 Months Ended

Mar. 31, 2018

Derivative financial instruments

21. 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.

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 interest rate risk exposure. 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 hedge exposure to currency 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 years ended March 31, 2016, 2017 and 2018, the ineffective portion of Toyota’s fair value hedge relationships was not material. 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, to manage its exposure to foreign currency exchange rate fluctuations and interest rate fluctuations from an economic perspective, and for some of which Toyota is unable to or has elected not to apply hedge accounting.

Fair value and gains or losses on derivative financial instruments -

The following table summarizes the fair values of derivative financial instruments as of March 31, 2017 and 2018:

	Yen in millions
	March 31,
	2017			2018
Derivative assets
Derivative financial instruments designated as hedging instruments
Interest rate and currency swap agreements
Prepaid expenses and other current assets		—			154
Investments and other assets - Other		662			668
Total		662			822
Undesignated derivative financial instruments
Interest rate and currency swap agreements
Prepaid expenses and other current assets		61,946			46,425
Investments and other assets - Other		168,292			175,635
Total		230,238			222,060
Foreign exchange forward and option contracts
Prepaid expenses and other current assets		12,357			34,922
Investments and other assets - Other		164			—
Total		12,521			34,922
Total derivative assets		243,421			257,804
Counterparty netting		(84,883	)		(97,617	)
Collateral received		(60,021	)		(92,146	)
Carrying value of derivative assets		98,517			68,041
Derivative liabilities
Derivative financial instruments designated as hedging instruments
Interest rate and currency swap agreements
Other current liabilities		(64	)		—
Other long-term liabilities		—			—
Total		(64	)		—
Undesignated derivative financial instruments
Interest rate and currency swap agreements
Other current liabilities		(67,091	)		(34,716	)
Other long-term liabilities		(158,383	)		(158,830	)
Total		(225,474	)		(193,546	)
Foreign exchange forward and option contracts
Other current liabilities		(19,919	)		(3,610	)
Other long-term liabilities		—			—
Total		(19,919	)		(3,610	)
Total derivative liabilities		(245,457	)		(197,156	)
Counterparty netting		84,883			97,617
Collateral posted		122,231			55,650
Carrying value of derivative liabilities		(38,343	)		(43,889	)

The following table summarizes the notional amounts of derivative financial instruments as of March 31, 2017 and 2018:

	Yen in millions
	March 31,
	2017				2018
	Designated derivative financial instruments		Undesignated derivative financial instruments		Designated derivative financial instruments		Undesignated derivative financial instruments
Interest rate and currency swap agreements		40,837		19,459,677		12,643		19,895,085
Foreign exchange forward and option contracts		—		2,772,741		—		2,731,534
Total		40,837		22,232,418		12,643		22,626,619

The following table summarizes the gains and losses on derivative financial instruments and hedged items reported in the consolidated statements of income for the years ended March 31, 2016, 2017 and 2018:

	Yen in millions
	For the years ended March 31,
	2016					2017					2018
	Gains or (losses) on derivative financial instruments			Gains or (losses) on hedged items		Gains or (losses) on derivative financial instruments			Gains or (losses) on hedged items		Gains or (losses) on derivative financial instruments		Gains or (losses) on hedged items
Derivative financial instruments designated as hedging instruments
Interest rate and currency swap agreements
Cost of financing operations		(133	)		122		(339	)		1,212		782		(227	)
Undesignated derivative financial instruments
Interest rate and currency swap agreements
Cost of financing operations		119,096					(61,884	)				42,220
Foreign exchange gain (loss), net		(379	)				12,516					30,339
Foreign exchange forward and option contracts
Cost of financing operations		(16,363	)				2,614					6,442
Foreign exchange gain (loss), net		115,256					81,614					73,115

Undesignated derivative financial instruments are used to manage economic risks of fluctuations in foreign currency exchange rates and interest rates of certain receivables and payables. Those economic risks are offset by changes in the fair value of undesignated derivative financial instruments.

Cash flows from transactions of derivative financial instruments are included in cash flows from operating activities in the consolidated statements of cash flows.

Credit risk related contingent features -

Toyota enters into International Swaps and Derivatives Association Master Agreements with counterparties. These Master Agreements contain a provision requiring either Toyota or the counterparty to settle the contract or to post assets to the other party in the event of a ratings downgrade below a specified threshold.

The aggregate fair value amount of derivative financial instruments that contain credit risk related contingent features that are in a net liability position after being offset by cash collateral as of March 31, 2018 is ¥2,489 million. The aggregate fair value amount of assets that are already posted as cash collateral as of March 31, 2018 is ¥28,012 million. If the ratings of Toyota decline below specified thresholds, the maximum amount of assets to be posted or for which Toyota could be required to settle the contracts is ¥2,489 million as of March 31, 2018.

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Other financial instruments

12 Months Ended

Mar. 31, 2018

Other financial instruments

22. Other financial instruments:

Toyota has certain financial instruments, including financial assets and liabilities which arose in the normal course of business. These financial instruments are executed with creditworthy financial institutions, and virtually all foreign currency contracts are denominated in U.S. dollars, euros and other currencies of major developed countries. Financial instruments involve, to varying degrees, market risk as instruments are subject to price fluctuations, and elements of credit risk in the event a counterparty should default. In the unlikely event the counterparties fail to meet the contractual terms of a foreign currency or an interest rate instrument, Toyota’s risk is limited to the fair value of the instrument. Although Toyota may be exposed to losses in the event of non-performance by counterparties on financial instruments, it does not anticipate significant losses due to the nature of its counterparties. Counterparties to Toyota’s financial instruments represent, in general, international financial institutions. Additionally, Toyota does not have a significant exposure to any individual counterparty. Toyota believes that the overall credit risk related to its financial instruments is not significant.

The following table summarizes the estimated fair values of Toyota’s financial instruments, excluding marketable securities, other securities investments, investments and other assets in affiliated companies and derivative financial instruments. See note 27 to the consolidated financial statements for three levels of input which are used to measure fair value.

	Yen in millions
	March 31, 2017
				Estimated fair value
	Carrying amount			Level 1		Level 2			Level 3			Total
Assets (Liabilities)
Cash and cash equivalents		2,995,075			2,103,469		891,606			—			2,995,075
Time deposits		1,082,654			—		1,082,654			—			1,082,654
Total finance receivables, net		14,064,660			—		—			14,226,440			14,226,440
Other receivables		436,867			—		—			436,867			436,867
Short-term borrowings		(4,953,682	)		—		(4,953,682	)		—			(4,953,682	)
Long-term debt including the current portion		(14,179,796	)		—		(12,241,617	)		(2,065,884	)		(14,307,501	)

	Yen in millions
	March 31, 2018
				Estimated fair value
	Carrying amount			Level 1		Level 2			Level 3			Total
Assets (Liabilities)
Cash and cash equivalents		3,052,269			2,278,060		774,209			—			3,052,269
Time deposits		901,244			—		901,244			—			901,244
Total finance receivables, net		14,508,614			—		—			14,615,409			14,615,409
Other receivables		489,338			—		—			489,338			489,338
Short-term borrowings		(5,154,913	)		—		(5,154,913	)		—			(5,154,913	)
Long-term debt including the current portion		(14,172,025	)		—		(12,265,260	)		(1,940,888	)		(14,206,148	)

Cash and cash equivalents and time deposits -

In the normal course of business, substantially all cash and cash equivalents and time deposits are highly liquid and are carried at amounts which approximate fair value due to its short duration. Cash equivalents and time deposits include negotiable certificate of deposit measured at fair value on a recurring basis. Where money market funds produce a daily net asset value in an active market, this value is used to determine the fair value of the fund investment, and the investment is classified in Level 1. All other types of cash and cash equivalents and time deposits are classified in Level 2.

Finance receivables, net -

The fair values of finance receivables are estimated by discounting expected cash flows to present value using internal assumptions, including prepayment speeds, expected credit losses and collateral value. Certain impaired finance receivables are measured at fair value on a nonrecurring basis based on collateral values.

As unobservable inputs are utilized, finance receivables are classified in Level 3.

Other receivables -

Other receivables are short-term receivables. These receivables are carried at amounts which approximate fair value, and the difference between the carrying amount and the fair value is not material. These receivables are classified in Level 3.

Short-term borrowings and long-term debt -

The fair values of short-term borrowings and long-term debt including the current portion, except for secured loans provided by securitization transactions using special-purpose entities, are estimated based on the discounted amounts of future cash flows using Toyota’s current borrowing rates for similar liabilities. As these inputs are observable, these debts are classified in Level 2.

The fair values of the secured loans provided by securitization transactions are estimated based on current market rates and credit spreads for debt with similar maturities. Internal assumptions including prepayment speeds and expected credit losses are used to estimate the timing of cash flows to be paid on the underlying securitized assets. As these valuations utilize unobservable inputs, the secured loans are classified in Level 3. See note 11 to the consolidated financial statements for information regarding the secured loans.

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Lease commitments

12 Months Ended

Mar. 31, 2018

Lease commitments

23. Lease commitments:

Toyota leases certain assets under capital lease and operating lease arrangements.

An analysis of leased assets under capital leases is as follows:

	Yen in millions
	March 31,
	2017			2018
Class of property
Building		18,775			17,934
Machinery and equipment		29,630			31,217
Less - Accumulated depreciation		(28,703	)		(30,853	)
		19,702			18,298

Amortization expenses under capital leases for the years ended March 31, 2016, 2017 and 2018 were ¥4,801 million, ¥4,586 million and ¥5,541 million, respectively.

Future minimum lease payments under capital leases together with the present value of the net minimum lease payments as of March 31, 2018 are as follows:

Years ending March 31,	Yen in millions
2019		6,645
2020		3,892
2021		2,276
2022		1,921
2023		1,801
Thereafter		8,933
Total minimum lease payments		25,468
Less - Amount representing interest		(4,842	)
Present value of net minimum lease payments		20,626
Less - Current obligations		(5,796	)
Long-term capital lease obligations		14,830

Rental expenses under operating leases for the years ended March 31, 2016, 2017 and 2018 were ¥101,932 million, ¥92,321 million and ¥112,934 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 March 31, 2018 are as follows:

Years ending March 31,	Yen in millions
2019		14,296
2020		11,375
2021		9,422
2022		8,403
2023		7,247
Thereafter		26,106
Total minimum future rentals		76,849

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Other commitments and contingencies, concentrations and factors that may affect future operations

12 Months Ended

Mar. 31, 2018

Other commitments and contingencies, concentrations and factors that may affect future operations

24. Other commitments and contingencies, concentrations and factors that may affect future operations:

Commitments -

Commitments outstanding as of March 31, 2018 for the purchase of property, plant and equipment, other assets and services totaled ¥368,483 million.

Guarantees -

Toyota enters into contracts with Toyota dealers to guarantee customers’ payments of their installment payables that arise 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 as of March 31, 2018, range from 1 month to 35 years; 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 March 31, 2018 is ¥2,830,749 million. Liabilities for guarantees totaling ¥6,901 million have been provided as of March 31, 2018. Under these guarantee contracts, Toyota is entitled to recover any amount paid by Toyota from the customers whose original obligations Toyota has guaranteed.

Legal proceedings -

From time-to-time, Toyota issues vehicle recalls and takes other safety measures including safety campaigns relating to its vehicles. Since 2009, Toyota issued safety campaigns related to the risk of floor mat entrapment of accelerator pedals and vehicle recalls related to slow-to-return or sticky accelerator pedals. In March 2014, Toyota entered into a Deferred Prosecution Agreement (“DPA”) to resolve an investigation by the U.S. Attorney for the Southern District of New York (“SDNY”) related to unintended acceleration in certain of its vehicles. The DPA provided for an independent monitor to review and assess policies and procedures relating to Toyota’s safety communications process, its process for sharing vehicle accident information internally and its process for preparing and sharing certain technical reports. In August 2017, the DPA and the monitorship terminated, and in October 2017, the criminal charge that had been filed in connection with the DPA was dismissed.

Personal injury and wrongful death claims involving allegations of unintended acceleration are pending in several consolidated proceedings in federal and state courts, as well as in individual cases in various other states. The judges in the consolidated federal action and the consolidated California state action have approved an Intensive Settlement Process (“ISP”) for such claims in those actions. Under the ISP, all individual claims within the consolidated actions are stayed pending completion of a process to assess whether they can be resolved on terms acceptable to the parties. Cases not resolved after completion of the ISP will then proceed to discovery and toward trial. Toyota has offered the ISP process to plaintiffs in other consolidated actions and in individual cases, as well.

Toyota has been named as a defendant in 33 economic loss class action lawsuits in the United States, which, together with similar lawsuits against Takata and other automakers, have been made part of a multi-district litigation proceeding in the United States District Court for the Southern District of Florida, arising out of allegations that airbag inflators manufactured by Takata are defective. Toyota has reached a settlement with the plaintiffs in the United States economic loss class actions. While the court approved the settlement on October 31, 2017, objectors have filed appeals, which have not yet been resolved. Toyota and other automakers have also been named in certain class actions filed in Mexico, Canada, Australia and Israel, as well as some other actions by states or territories of the United States. Those actions have not been settled and are being litigated.

Toyota self-reported a process gap in fulfilling certain emissions defect information reporting requirements of the U.S. Environmental Protection Agency (“EPA”) and California Air Resources Board, including updates on its repair completion rates for recalled emissions components and certain other reports concerning emissions related defects. Toyota is involved in discussions with the EPA and the SDNY’s Civil Division on this reporting issue. These agencies have requested certain follow-up information regarding this reporting issue, and Toyota is cooperating with the request.

Toyota also has various other pending legal actions and claims, including without limitation personal injury and wrongful death lawsuits and claims in the United States, and is subject to government investigations from-time-to-time.

Beyond the amounts accrued with respect to all aforementioned matters, Toyota is unable to estimate a range of reasonably possible loss, if any, for the pending legal matters because (i) many of the proceedings are in evidence gathering stages, (ii) significant factual issues need to be resolved, (iii) the legal theory or nature of the claims is unclear, (iv) the outcome of future motions or appeals is unknown and/or (v) the outcomes of other matters of these types vary widely and do not appear sufficiently similar to offer meaningful guidance. Based upon information currently available to Toyota, however, Toyota believes that its losses from these matters, if any, beyond the amounts accrued, would not have a material adverse effect on Toyota’s financial position, results of operations or cash flows.

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, 2020.

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Segment data

12 Months Ended

Mar. 31, 2018

Segment data

25. 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 and distributes sedans, minivans, compact cars, sport-utility vehicles, trucks and related parts and accessories. The Financial Services segment consists primarily of financing, and vehicle and equipment leasing operations to assist in the merchandising of the parent company and its affiliated companies products as well as other products. The All Other segment includes the design, manufacturing and sales of housing, telecommunications and other businesses.

The following tables present certain information regarding Toyota’s industry or geographic segments and overseas revenues by destination as of and for the years ended March 31, 2016, 2017 and 2018.

Segment operating results and assets -

As of and for the year ended March 31, 2016:

	Yen in millions
	Automotive		Financial Services		All Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		25,923,813		1,854,007		625,298		—			28,403,118
Inter-segment sales and transfers		53,603		42,217		552,089		(647,909	)		—
Total		25,977,416		1,896,224		1,177,387		(647,909	)		28,403,118
Operating expenses		23,528,418		1,556,998		1,110,880		(647,149	)		25,549,147
Operating income		2,448,998		339,226		66,507		(760	)		2,853,971
Assets		15,621,757		21,709,010		1,917,148		8,179,682			47,427,597
Investment in equity method investees		2,532,644		9,168		10,801		78,776			2,631,389
Depreciation expenses		900,434		697,991		27,412		—			1,625,837
Capital expenditure		1,389,289		2,638,111		41,826		(10,010	)		4,059,216

As of and for the year ended March 31, 2017:

	Yen in millions
	Automotive		Financial Services		All Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		25,032,229		1,783,697		781,267		—			27,597,193
Inter-segment sales and transfers		49,618		39,903		539,785		(629,306	)		—
Total		25,081,847		1,823,600		1,321,052		(629,306	)		27,597,193
Operating expenses		23,388,874		1,601,172		1,239,725		(626,950	)		25,602,821
Operating income		1,692,973		222,428		81,327		(2,356	)		1,994,372
Assets		16,156,496		22,507,613		2,170,498		7,915,579			48,750,186
Investment in equity method investees		2,745,437		9,792		—		90,193			2,845,422
Depreciation expenses		912,797		671,155		26,998		—			1,610,950
Capital expenditure		1,293,564		2,182,149		53,710		12,014			3,541,437

As of and for the year ended March 31, 2018:

	Yen in millions
	Automotive		Financial Services		All Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		26,347,229		1,959,234		1,073,047		—			29,379,510
Inter-segment sales and transfers		50,711		57,774		573,071		(681,556	)		—
Total		26,397,940		2,017,008		1,646,118		(681,556	)		29,379,510
Operating expenses		24,386,805		1,731,462		1,545,306		(683,925	)		26,979,648
Operating income		2,011,135		285,546		100,812		2,369			2,399,862
Assets		17,054,209		23,055,981		2,178,118		8,019,941			50,308,249
Investment in equity method investees		3,054,583		11,713		—		96,415			3,162,711
Depreciation expenses		976,735		723,061		34,237		—			1,734,033
Capital expenditure		1,381,122		2,166,805		62,447		(11,667	)		3,598,707

Geographic information -

As of and for the year ended March 31, 2016:

	Yen in millions
	Japan		North America		Europe		Asia		Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		8,588,437		10,822,772		2,507,292		4,475,623		2,008,994		—			28,403,118
Inter-segment sales and transfers		6,171,051		229,198		154,039		528,236		201,220		(7,283,744	)		—
Total		14,759,488		11,051,970		2,661,331		5,003,859		2,210,214		(7,283,744	)		28,403,118
Operating expenses		13,081,966		10,523,151		2,588,915		4,554,670		2,101,305		(7,300,860	)		25,549,147
Operating income		1,677,522		528,819		72,416		449,189		108,909		17,116			2,853,971
Assets		14,291,434		16,622,979		2,612,210		4,415,700		2,579,113		6,906,161			47,427,597
Long-lived assets		3,210,376		4,958,989		309,657		869,989		391,406		—			9,740,417

As of and for the year ended March 31, 2017:

	Yen in millions
	Japan		North America		Europe			Asia		Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		8,798,903		10,033,419		2,517,601			4,279,617		1,967,653		—			27,597,193
Inter-segment sales and transfers		6,031,965		205,672		163,438			540,204		193,421		(7,134,700	)		—
Total		14,830,868		10,239,091		2,681,039			4,819,821		2,161,074		(7,134,700	)		27,597,193
Operating expenses		13,628,623		9,927,897		2,693,283			4,384,642		2,102,380		(7,134,004	)		25,602,821
Operating income (loss)		1,202,245		311,194		(12,244	)		435,179		58,694		(696	)		1,994,372
Assets		14,791,969		17,365,237		2,846,469			4,486,021		2,819,935		6,440,555			48,750,186
Long-lived assets		3,376,157		5,274,928		313,182			828,619		404,223		—			10,197,109

As of and for the year ended March 31, 2018:

	Yen in millions
	Japan		North America		Europe		Asia		Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		9,273,672		10,347,266		2,940,243		4,497,374		2,320,955		—			29,379,510
Inter-segment sales and transfers		6,751,172		227,144		244,981		650,765		132,344		(8,006,406	)		—
Total		16,024,844		10,574,410		3,185,224		5,148,139		2,453,299		(8,006,406	)		29,379,510
Operating expenses		14,364,926		10,435,511		3,110,198		4,714,940		2,340,636		(7,986,563	)		26,979,648
Operating income		1,659,918		138,899		75,026		433,199		112,663		(19,843	)		2,399,862
Assets		15,797,024		16,936,704		3,346,179		4,893,582		2,986,661		6,348,099			50,308,249
Long-lived assets		3,511,663		5,179,139		359,355		797,435		420,081		—			10,267,673

“Other” consists of Central and South America, Oceania, Africa and the Middle East.

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.

Unallocated amounts included in assets represent assets held for corporate purposes, which mainly consist of cash and cash equivalents and marketable securities. Such corporate assets were ¥9,369,868 million, ¥9,177,953 million and ¥9,386,399 million, as of March 31, 2016, 2017 and 2018, respectively.

Transfers between industry or geographic segments are made at terms and conditions in the ordinary course of business. In measuring the reportable segments’ income or losses, operating income consists of revenue less operating expenses.

Overseas revenues by destination -

The following information shows revenues that are attributed to countries based on location of customers, excluding customers in Japan. In addition to the disclosure requirements under U.S.GAAP, Toyota discloses this information in order to provide financial statements users with valuable information.

	Yen in millions
	For the years ended March 31,
	2016		2017		2018
North America		10,797,304		10,054,431		10,403,647
Europe		2,323,399		2,341,364		2,730,915
Asia		4,292,800		4,414,236		4,793,110
Other		4,724,784		3,923,621		4,186,666

“Other” consists of Central and South America, Oceania, Africa and the Middle East, etc.

Certain financial statements data on non-financial services and financial services businesses -

The financial data below presents separately Toyota’s non-financial services and financial services businesses.

Balance sheets -

	Yen in millions
	March 31,
	2017			2018
Assets
Non-Financial Services Businesses
Current assets
Cash and cash equivalents		2,257,064			2,390,524
Marketable securities		1,439,944			1,546,459
Trade accounts and notes receivable, less allowance for doubtful accounts		2,191,594			2,304,676
Inventories		2,388,394			2,539,497
Prepaid expenses and other current assets		1,988,016			1,818,687
Total current assets		10,265,012			10,599,843
Investments and other assets		11,276,128			11,861,394
Property, plant and equipment		5,700,818			5,901,958
Total Non-Financial Services Businesses assets		27,241,958			28,363,195
Financial Services Business
Current assets
Cash and cash equivalents		738,011			661,745
Marketable securities		381,654			221,901
Finance receivables, net		6,196,649			6,348,306
Prepaid expenses and other current assets		831,924			957,122
Total current assets		8,148,238			8,189,074
Noncurrent finance receivables, net		9,012,222			9,481,618
Investments and other assets		850,862			1,019,574
Property, plant and equipment		4,496,291			4,365,715
Total Financial Services Business assets		22,507,613			23,055,981
Eliminations		(999,385	)		(1,110,927	)
Total assets		48,750,186			50,308,249

Assets in the non-financial services include unallocated corporate assets.

	Yen in millions
	March 31,
	2017			2018
Liabilities
Non-Financial Services Businesses
Current liabilities
Short-term borrowings		669,947			541,968
Current portion of long-term debt		196,227			179,994
Accounts payable		2,540,078			2,556,393
Accrued expenses		3,038,218			2,980,981
Income taxes payable		203,101			429,616
Other current liabilities		1,512,662			1,797,724
Total current liabilities		8,160,233			8,486,676
Long-term liabilities
Long-term debt		590,366			642,691
Accrued pension and severance costs		890,684			917,133
Other long-term liabilities		1,206,427			1,111,843
Total long-term liabilities		2,687,477			2,671,667
Total Non-Financial Services Businesses liabilities		10,847,710			11,158,343
Financial Services Business
Current liabilities
Short-term borrowings		4,605,389			4,929,478
Current portion of long-term debt		4,129,005			4,053,538
Accounts payable		33,283			40,251
Accrued expenses		117,773			145,127
Income taxes payable		20,473			32,711
Other current liabilities		833,813			870,634
Total current liabilities		9,739,736			10,071,739
Long-term liabilities
Long-term debt		9,491,504			9,574,118
Accrued pension and severance costs		14,386			14,049
Other long-term liabilities		987,289			678,858
Total long-term liabilities		10,493,179			10,267,025
Total Financial Services Business liabilities		20,232,915			20,338,764
Eliminations		(999,392	)		(1,110,934	)
Total liabilities		30,081,233			30,386,173
Mezzanine equity		485,877			491,974
Total Toyota Motor Corporation shareholders’ equity		17,514,812			18,735,982
Noncontrolling interests		668,264			694,120
Total shareholders’ equity		18,183,076			19,430,102
Total liabilities, mezzanine equity and shareholders’ equity		48,750,186			50,308,249

Statements of income -

	Yen in millions
	For the years ended March 31,
	2016			2017			2018
Non-Financial Services Businesses
Net revenues		26,581,102			25,845,453			27,448,165
Costs and expenses
Cost of revenues		21,474,386			21,557,194			22,613,450
Selling, general and administrative		2,589,082			2,511,647			2,721,362
Total costs and expenses		24,063,468			24,068,841			25,334,812
Operating income		2,517,634			1,776,612			2,113,353
Other income (expense), net		117,930			200,370			222,326
Income before income taxes and equity in earnings of affiliated companies		2,635,564			1,976,982			2,335,679
Provision for income taxes		752,248			562,452			738,763
Equity in earnings of affiliated companies		327,167			360,130			467,718
Net income		2,210,483			1,774,660			2,064,634
Less - Net income attributable to noncontrolling interests		(117,544	)		(89,337	)		(89,533	)
Net income attributable to Toyota Motor Corporation - Non-Financial Services Businesses		2,092,939			1,685,323			1,975,101
Financial Services Business
Net revenues		1,896,224			1,823,600			2,017,008
Costs and expenses
Cost of revenues		1,181,437			1,221,268			1,320,348
Selling, general and administrative		375,561			379,904			411,114
Total costs and expenses		1,556,998			1,601,172			1,731,462
Operating income		339,226			222,428			285,546
Other income (expense), net		8,579			(5,618	)		(794	)
Income before income taxes and equity in earnings of affiliated companies		347,805			216,810			284,752
Provision for income taxes		126,319			66,583			(234,356	)
Equity in earnings of affiliated companies		1,932			1,930			2,365
Net income		223,418			152,157			521,473
Less - Net income attributable to noncontrolling interests		(3,963	)		(6,518	)		(2,589	)
Net income attributable to Toyota Motor Corporation - Financial Services Business		219,455			145,639			518,884
Eliminations		300			147			(2	)
Net income attributable to Toyota Motor Corporation		2,312,694			1,831,109			2,493,983

Statements of cash flows -

	Yen in millions									Yen in millions
	For the year ended March 31, 2016									For the year ended March 31, 2017
	Non-Financial Services Businesses			Financial Services Business			Consolidated			Non-Financial Services Businesses			Financial Services Business			Consolidated
Cash flows from operating activities
Net income		2,210,483			223,418			2,434,211			1,774,660			152,157			1,926,985
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		927,846			697,991			1,625,837			939,795			671,155			1,610,950
Provision for doubtful accounts and credit losses		69,029			90,236			159,265			6,519			92,147			98,666
Pension and severance costs, less payments		8,300			533			8,833			21,796			1,457			23,253
Losses on disposal of fixed assets		33,293			36			33,329			30,461			212			30,673
Unrealized losses on available-for-sale securities, net		3,217			6,055			9,272			4,422			2,651			7,073
Deferred income taxes		(43,237	)		76,423			32,889			(59,668	)		6,504			(53,299	)
Equity in earnings of affiliated companies		(327,167	)		(1,932	)		(329,099	)		(360,130	)		(1,930	)		(362,060	)
Changes in operating assets and liabilities, and other		386,529			148,376			486,320			206,455			103,840			131,996
Net cash provided by operating activities		3,268,293			1,241,136			4,460,857			2,564,310			1,028,193			3,414,237
Cash flows from investing activities
Additions to finance receivables		—			(23,399,113	)		(13,549,278	)		—			(22,894,114	)		(13,636,694	)
Collection of and proceeds from sales of finance receivables		—			22,918,132			13,115,854			—			22,006,010			12,927,981
Additions to fixed assets excluding equipment leased to others		(1,265,174	)		(17,371	)		(1,282,545	)		(1,206,738	)		(17,140	)		(1,223,878	)
Additions to equipment leased to others		(155,931	)		(2,620,740	)		(2,776,671	)		(152,550	)		(2,165,009	)		(2,317,559	)
Proceeds from sales of fixed assets excluding equipment leased to others		41,154			993			42,147			40,189			1,049			41,238
Proceeds from sales of equipment leased to others		60,989			1,050,738			1,111,727			72,659			1,165,619			1,238,278
Purchases of marketable securities and security investments		(1,302,965	)		(894,512	)		(2,197,477	)		(2,104,202	)		(412,806	)		(2,517,008	)
Proceeds from sales of and maturity of marketable securities and security investments		2,471,876			943,939			3,415,815			1,435,267			466,274			1,901,541
Payment for additional investments in affiliated companies, net of cash acquired		628			—			628			44,274			—			44,274
Changes in investments and other assets, and other		(1,371,996	)		296,788			(1,062,744	)		582,649			(60,345	)		571,888
Net cash used in investing activities		(1,521,419	)		(1,721,146	)		(3,182,544	)		(1,288,452	)		(1,910,462	)		(2,969,939	)
Cash flows from financing activities
Proceeds from issuance of long-term debt		110,691			4,815,323			4,845,872			111,727			4,541,541			4,603,446
Payments of long-term debt		(71,758	)		(4,127,178	)		(4,176,202	)		(82,840	)		(3,773,644	)		(3,845,554	)
Increase (decrease) in short-term borrowings		75,990			(132,852	)		(10,903	)		51,523			233,331			273,037
Proceeds from issuance of class shares		474,917			—			474,917			—			—			—
Dividends paid to Toyota Motor Corporation class shareholders		(1,225	)		—			(1,225	)		(3,697	)		—			(3,697	)
Dividends paid to Toyota Motor Corporation common shareholders		(704,728	)		—			(704,728	)		(634,475	)		—			(634,475	)
Dividends paid to noncontrolling interests		(73,129	)		—			(73,129	)		(63,936	)		—			(63,936	)
Reissuance (repurchase) of treasury stock, and other		(778,173	)		—			(778,173	)		(703,986	)		—			(703,986	)
Net cash provided by (used in) financing activities		(967,415	)		555,293			(423,571	)		(1,325,684	)		1,001,228			(375,165	)
Effect of exchange rate changes on cash and cash equivalents		(142,301	)		(57,570	)		(199,871	)		(11,262	)		(2,224	)		(13,486	)
Net increase (decrease) in cash and cash equivalents		637,158			17,713			654,871			(61,088	)		116,735			55,647
Cash and cash equivalents at beginning of year		1,680,994			603,563			2,284,557			2,318,152			621,276			2,939,428
Cash and cash equivalents at end of year		2,318,152			621,276			2,939,428			2,257,064			738,011			2,995,075

	Yen in millions
	For the year ended March 31, 2018
	Non-Financial Services Businesses			Financial Services Business			Consolidated
Cash flows from operating activities
Net income		2,064,634			521,473			2,586,106
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		1,010,972			723,061			1,734,033
Provision for doubtful accounts and credit losses		(74	)		76,143			76,069
Pension and severance costs, less payments		5,027			(741	)		4,286
Losses on disposal of fixed assets		35,010			279			35,289
Unrealized losses on available-for-sale securities, net		459			387			846
Deferred income taxes		64,143			(302,103	)		(237,961	)
Equity in earnings of affiliated companies		(467,718	)		(2,365	)		(470,083	)
Changes in operating assets and liabilities, and other		205,434			299,709			481,424
Net cash provided by operating activities		2,917,887			1,315,843			4,210,009
Cash flows from investing activities
Additions to finance receivables		—			(25,153,088	)		(15,058,516	)
Collection of and proceeds from sales of finance receivables		—			24,117,335			14,046,312
Additions to fixed assets excluding equipment leased to others		(1,276,788	)		(14,329	)		(1,291,117	)
Additions to equipment leased to others		(155,114	)		(2,152,476	)		(2,307,590	)
Proceeds from sales of fixed assets excluding equipment leased to others		70,755			1,065			71,820
Proceeds from sales of equipment leased to others		63,402			1,147,870			1,211,272
Purchases of marketable securities and security investments		(2,273,805	)		(779,111	)		(3,052,916	)
Proceeds from sales of and maturity of marketable securities and security investments		1,762,189			761,349			2,523,538
Payment for additional investments in affiliated companies, net of cash acquired		(576	)		—			(576	)
Changes in investments and other assets, and other		260,015			(106,597	)		197,681
Net cash used in investing activities		(1,549,922	)		(2,177,982	)		(3,660,092	)
Cash flows from financing activities
Proceeds from issuance of long-term debt		212,387			4,666,579			4,793,939
Payments of long-term debt		(170,072	)		(4,314,294	)		(4,452,338	)
Increase (decrease) in short-term borrowings		(122,222	)		461,052			347,738
Proceeds from issuance of class shares		—			—			—
Dividends paid to Toyota Motor Corporation class shareholders		(6,194	)		—			(6,194	)
Dividends paid to Toyota Motor Corporation common shareholders		(620,698	)		—			(620,698	)
Dividends paid to noncontrolling interests		(63,764	)		—			(63,764	)
Reissuance (repurchase) of treasury stock, and other		(447,818	)		—			(447,818	)
Net cash provided by (used in) financing activities		(1,218,381	)		813,337			(449,135	)
Effect of exchange rate changes on cash and cash equivalents		(16,124	)		(27,464	)		(43,588	)
Net increase (decrease) in cash and cash equivalents		133,460			(76,266	)		57,194
Cash and cash equivalents at beginning of year		2,257,064			738,011			2,995,075
Cash and cash equivalents at end of year		2,390,524			661,745			3,052,269

XML

Per share amounts

12 Months Ended

Mar. 31, 2018

Per share amounts

26. Per share amounts:

Reconciliations of the differences between basic and diluted net income attributable to Toyota Motor Corporation per common share for the years ended March 31, 2016, 2017 and 2018 are as follows:

	Yen in millions			Thousands of shares		Yen
	Net income attributable to Toyota Motor Corporation			Weighted- average common shares		Net income attributable to Toyota Motor Corporation per common share
For the year ended March 31, 2016
Net income attributable to Toyota Motor Corporation		2,312,694
Accretion to Mezzanine equity		(3,638	)
Dividends to Toyota Motor Corporation Model AA Class Shareholders		(2,449	)
Basic net income attributable to Toyota Motor Corporation per common share		2,306,607			3,111,306		741.36
Effect of dilutive securities
Model AA Class Shares		6,087			32,429
Assumed exercise of dilutive stock options		(21	)		1,212
Diluted net income attributable to Toyota Motor Corporation per common share		2,312,673			3,144,947		735.36
For the year ended March 31, 2017
Net income attributable to Toyota Motor Corporation		1,831,109
Accretion to Mezzanine equity		(4,849	)
Dividends to Toyota Motor Corporation Model AA Class Shareholders		(4,946	)
Basic net income attributable to Toyota Motor Corporation per common share		1,821,314			3,008,088		605.47
Effect of dilutive securities
Model AA Class Shares		9,795			47,100
Assumed exercise of dilutive stock options		(6	)		638
Diluted net income attributable to Toyota Motor Corporation per common share		1,831,103			3,055,826		599.22
For the year ended March 31, 2018
Net income attributable to Toyota Motor Corporation		2,493,983
Accretion to Mezzanine equity		(4,849	)
Dividends to Toyota Motor Corporation Model AA Class Shareholders		(7,442	)
Basic net income attributable to Toyota Motor Corporation per common share		2,481,692			2,947,365		842.00
Effect of dilutive securities
Model AA Class Shares		12,291			47,100
Assumed exercise of dilutive stock options		(4	)		301
Diluted net income attributable to Toyota Motor Corporation per common share		2,493,979			2,994,766		832.78

In addition to the disclosure requirements under U.S.GAAP, Toyota discloses the information below in order to provide financial statements users with valuable information.

The following table shows Toyota Motor Corporation shareholders’ equity per share as of March 31, 2017 and 2018. Toyota Motor Corporation shareholders’ equity per share amounts are calculated by dividing Toyota Motor Corporation shareholders’ equities’ amount at the end of each period by the number of shares issued and outstanding, excluding treasury stock at the end of the corresponding period.

	Yen in millions		Thousands of shares		Yen
	Toyota Motor Corporation shareholders’ equity		Common shares issued and outstanding at the end of the  year (excluding treasury stock)		Toyota Motor Corporation shareholders’ equity per share
As of March 31, 2017		17,514,812		2,974,723		5,887.88
As of March 31, 2018		18,735,982		2,909,924		6,438.65

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Fair value measurements

12 Months Ended

Mar. 31, 2018

Fair value measurements

27. Fair value measurements:

In accordance with U.S.GAAP, Toyota classifies fair value into three levels of input as follows which are used to measure it.

Level 1:	Quoted prices in active markets for identical assets or liabilities
Level 2:	Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; valuation of assets or liabilities using inputs, other than quoted prices that are observable
Level 3:	Valuation of assets or liabilities using unobservable inputs which reflect the reporting entity’s assumptions

The following table summarizes the fair values of the assets and liabilities measured at fair value on a recurring basis as of March 31, 2017 and 2018. Transfers between levels of the fair value are recognized at the end of their respective reporting periods:

	Yen in millions
	March 31, 2017
	Level 1		Level 2			Level 3			Total
Assets
Cash equivalents		41,876		891,606			—			933,482
Time deposits		—		600,000			—			600,000
Marketable securities and other securities investments
Public and corporate bonds		4,797,499		1,079,385			8,947			5,885,831
Common stocks		2,686,934		—			—			2,686,934
Other		18,191		73,246			—			91,437
Investments measured at net asset value		—		—			—			735,131
Derivative financial instruments		—		243,334			87			243,421
Total		7,544,500		2,887,571			9,034			11,176,236
Liabilities
Derivative financial instruments		—		(237,848	)		(7,609	)		(245,457	)
Total		—		(237,848	)		(7,609	)		(245,457	)

	Yen in millions
	March 31, 2018
	Level 1		Level 2			Level 3			Total
Assets
Cash equivalents		44,897		774,209			—			819,106
Time deposits		—		400,000			—			400,000
Marketable securities and other securities investments
Public and corporate bonds		4,778,019		1,523,227			7,488			6,308,734
Common stocks		2,582,115		—			—			2,582,115
Other		169,282		50,746			—			220,028
Investments measured at net asset value		—		—			—			516,951
Derivative financial instruments		—		257,795			9			257,804
Total		7,574,313		3,005,977			7,497			11,104,738
Liabilities
Derivative financial instruments		—		(194,935	)		(2,221	)		(197,156	)
Total		—		(194,935	)		(2,221	)		(197,156	)

Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.

The following is description of the assets and liabilities measured at fair value, information about the valuation techniques used to measure fair value, key inputs and significant assumptions:

Cash equivalents and time deposits -

Cash equivalents include money market funds and other investments with original maturities of three months or less. Cash equivalents classified in Level 2 include negotiable certificate of deposit with original maturities of three months or less. These are measured at fair value using primarily observable interest rates in the market. Time deposits consist of negotiable certificates of deposit with original maturities over three months. These are measured at fair value using primarily observable interest rates in the market.

Marketable securities and other securities investments -

Marketable securities and other securities investments include public and corporate bonds, common stocks and other investments. Public and corporate bonds include government bonds. Japanese bonds and foreign bonds including U.S., European and other bonds represent 28% and 72% (as of March 31, 2017) and 16% and 84% (as of March 31, 2018) of public and corporate bonds, respectively. Listed stocks on the Japanese stock markets represent 92% and 93% of common stocks as of March 31, 2017 and 2018, respectively. Toyota uses primarily quoted market prices for identical assets to measure fair value of these securities. “Other” includes investment trusts. Generally, Toyota uses quoted market prices for similar assets or quoted non-active market prices for identical assets to measure fair value of these securities. These assets are classified in Level 2.

Derivative financial instruments -

See note 21 to the consolidated financial statements about derivative financial instruments. Toyota primarily estimates the fair value of derivative financial instruments using industry-standard valuation models that require observable inputs including interest rates and foreign exchange rates, and the contractual terms. The usage of these models does not require significant judgment to be applied. These derivative financial instruments are classified in Level 2. In other certain cases when market data is not available, key inputs to the fair value measurement include quotes from counterparties, and other market data. Toyota assesses the reasonableness of changes of the quotes using observable market data. These derivative financial instruments are classified in Level 3. Toyota’s derivative fair value measurements consider assumptions about counterparty and Toyota’s own non-performance risk, using such as credit default probabilities.

The following table summarizes the changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the periods ended March 31, 2016, 2017 and 2018:

	Yen in millions
	For the year ended March 31, 2016
	Marketable securities and other securities investments			Derivative financial instruments			Total
Balance at beginning of year		12,317			1,010			13,327
Total gains (losses)
Included in income (loss)		1			2,507			2,508
Included in other comprehensive income (loss)		(286	)		—			(286	)
Purchases and issuances		931			—			931
Settlements		(1,451	)		(479	)		(1,930	)
Other		(1,178	)		(189	)		(1,367	)
Balance at end of year		10,334			2,849			13,183

	Yen in millions
	For the year ended March 31, 2017
	Marketable securities and other securities investments			Derivative financial instruments			Total
Balance at beginning of year		10,334			2,849			13,183
Total gains (losses)
Included in income (loss)		(16	)		(7,310	)		(7,326	)
Included in other comprehensive income (loss)		60			—			60
Purchases and issuances		1,126			—			1,126
Settlements		(2,282	)		(2,693	)		(4,975	)
Other		(275	)		(368	)		(643	)
Balance at end of year		8,947			(7,522	)		1,425

	Yen in millions
	For the year ended March 31, 2018
	Marketable securities and other securities investments			Derivative financial instruments			Total
Balance at beginning of year		8,947			(7,522	)		1,425
Total gains (losses)
Included in income (loss)		17			805			822
Included in other comprehensive income (loss)		(12	)		—			(12	)
Purchases and issuances		3,860			—			3,860
Settlements		(4,739	)		4,320			(419	)
Other		(585	)		185			(400	)
Balance at end of year		7,488			(2,212	)		5,276

“Included in income (loss)” in marketable securities and other securities investments and derivative financial instruments are included in “Other income (loss), net” and “Cost of financing operations” in the accompanying consolidated statements of income, respectively.

In the reconciliation table above, derivative financial instruments are presented net of assets and liabilities. “Other” includes the currency translation adjustments for the years ended March 31, 2016, 2017 and 2018.

As of March 31, 2018, the Level 3 assets and liabilities measured at fair value on a recurring basis are not significant.

Certain assets and liabilities are measured at fair value on a nonrecurring basis. During the years ended March 31, 2017 and 2018, Toyota measured certain finance receivables at fair value of ¥47,999 million and ¥45,492 million based on the collateral value, resulting in gain of ¥2,405 million and loss of ¥4,190 million, respectively. This fair value measurement on a nonrecurring basis is classified in Level 3. See note 22 to the consolidated financial statements for the fair value measurement. These Level 3 financial assets are not significant.

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Summary of significant accounting policies (Policies)

12 Months Ended

Mar. 31, 2018

Basis of consolidation and accounting for investments in affiliated companies

Basis of consolidation and accounting for investments in affiliated companies -

The consolidated financial statements include the accounts of the parent company, its majority-owned subsidiary companies and variable interest entities of which Toyota is the primary beneficiary. 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. Consolidated net income includes Toyota’s equity in current earnings of such companies, after elimination of unrealized intercompany profits. Investments in such companies are reduced to fair value if a decline in market value is determined other-than-temporary. Investments in non-public companies in which Toyota does not exercise significant influence (generally less than a 20% ownership interest) are stated at cost.

Estimates

Estimates -

The preparation of Toyota’s consolidated financial statements in conformity with U.S.GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The more significant estimates include: product warranties, liabilities accrued for recalls and other safety measures, allowance for doubtful accounts and credit losses, residual values for leased assets, impairment of long-lived assets, pension costs and obligations, fair value of derivative financial instruments, other-than-temporary losses on marketable securities, litigation liabilities and valuation allowance for deferred tax assets.

Translation of foreign currencies

Translation of foreign currencies -

All asset and liability accounts of foreign subsidiaries and affiliated companies are translated into Japanese yen at appropriate year-end current exchange rates and all income and expense accounts of those subsidiaries are translated at the average exchange rates for each period. The foreign currency translation adjustments are included as a component of accumulated other comprehensive income.

Foreign currency receivables and payables are translated at appropriate year-end current exchange rates and the resulting transaction gains or losses are recorded in operations currently.

Revenue recognition

Revenue recognition -

Revenues from sales of vehicles and parts are 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 a dealer during a certain period of time. Toyota accrues these incentives as revenue reductions upon the sale of a vehicle corresponding to the program by the amount determined in the related incentive program.

Revenues from the sales of vehicles under which Toyota conditionally guarantees the minimum resale value are recognized on a pro rata basis from the date of sale to the first exercise date of the guarantee in a manner similar to operating lease accounting. The underlying vehicles of these transactions are recorded as assets and are depreciated in accordance with Toyota’s depreciation policy.

Revenues from retail financing contracts and finance leases are recognized using the effective yield method. Revenues from operating leases are recognized on a straight-line basis over the lease term.

The sale of certain vehicles includes a determinable amount for the contract, which entitles customers to free vehicle maintenance. Such revenues from free maintenance contracts are deferred and recognized as revenue over the period of the contract, which approximates the pattern of the related costs.

Other costs

Other costs -

Advertising and sales promotion costs are expensed as incurred. Advertising costs were ¥489,036 million, ¥448,780 million and ¥509,653 million for the years ended March 31, 2016, 2017 and 2018, 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 the sale and other factors. Toyota records 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 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 of warranty claim recoveries to be received from suppliers.

In addition to product warranties above, Toyota accrues for costs of recalls and other safety measures based on management’s estimates when it is probable a liability has been incurred and the amount of loss can be reasonably estimated. Toyota mainly employs an estimation model, to accrue at the time of vehicle sale, an amount that represents management’s best estimate of expenses related to future recalls and other safety measures. The estimation model for recalls and other safety measures takes into account Toyota’s historical experience of recalls and other safety measures.

Litigation liabilities are established to cover probable losses on various lawsuits based on the information currently available. Attorneys’ fees are expensed as incurred.

Research and development costs are expensed as incurred. Research and development costs were ¥1,055,672 million, ¥1,037,528 million and ¥1,064,269 million for the years ended March 31, 2016, 2017 and 2018, respectively.

Cash and cash equivalents

Cash and cash equivalents -

Cash and cash equivalents include all highly liquid investments 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 -

Marketable securities consist of debt and equity securities. Debt and equity securities designated as available-for-sale are carried at fair value with unrealized gains or losses included as a component of accumulated other comprehensive income in shareholders’ equity, net of applicable taxes. Individual securities classified as available-for-sale are reduced to fair 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 consolidated statements of income when realized.

Security investments in non-public companies

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 -

Finance receivables recorded on Toyota’s consolidated balance sheets are comprised of the unpaid principal balance, plus accrued interest, less charge-offs, net of any unearned income and deferred origination costs and the allowance for credit losses. Deferred origination costs are amortized so as to approximate a level rate of return over the term of the related contracts.

The determination of portfolio segments is based primarily on the qualitative consideration of the nature of Toyota’s business operations and finance receivables. The three portfolio segments within finance receivables are as follows:

Retail receivables portfolio segment -

The retail receivables portfolio segment consists of retail installment sales contracts acquired mainly from dealers (“auto loans”) including credit card loans. These contracts acquired must first meet specified credit standards. Thereafter, Toyota retains responsibility for contract collection and administration.

The contract periods of auto loans primarily range from 2 to 7 years. Toyota acquires security interests in the vehicles financed and has the right to repossess vehicles if customers fail to meet their contractual obligations. Almost all auto loans are non-recourse, which relieves the dealers from financial responsibility in the event of repossession.

Toyota classifies retail receivables portfolio segment into one class based on common risk characteristics associated with the underlying finance receivables, the similarity of the credit risks, and the quantitative materiality.

Finance lease receivables portfolio segment -

Toyota acquires new vehicle lease contracts originated primarily through dealers. The contract periods of these primarily range from 2 to 5 years. Lease contracts acquired must first meet specified credit standards after which Toyota assumes ownership of the leased vehicle. Toyota is responsible for contract collection and administration during the lease period.

Toyota is generally permitted to take possession of the vehicle upon a default by the lessee. The residual value is estimated at the time the vehicle is first leased. Vehicles returned to Toyota at the end of their leases are sold by auction.

Toyota classifies finance lease receivables portfolio segment into one class based on common risk characteristics associated with the underlying finance receivables and the similarity of the credit risks.

Wholesale and other dealer loan receivables portfolio segment -

Toyota provides wholesale financing to qualified dealers to finance inventories. Toyota acquires security interests in vehicles financed at wholesale. In cases where additional security interests would be required, Toyota takes dealership assets or personal assets, or both, as additional security. If a dealer defaults, Toyota has the right to liquidate any assets acquired and seek legal remedies.

Toyota also makes term loans to dealers for business acquisitions, facilities refurbishment, real estate purchases and working capital requirements. These loans are typically secured with liens on real estate, other dealership assets and/or personal assets of the dealers.

Toyota classifies wholesale and other dealer loan receivables portfolio segment into three classes of wholesale, real estate and working capital, based on the risk characteristics associated with the underlying finance receivables.

A receivable account balance is considered impaired when, based on current information and events, it is probable that Toyota will be unable to collect all amounts due according to the terms of the contract. Factors such as payment history, compliance with terms and conditions of the underlying loan agreement and other subjective factors related to the financial stability of the borrower are considered when determining whether a loan is impaired. Impaired finance receivables include certain nonaccrual receivables for which a specific reserve has been assessed. An account modified as a troubled debt restructuring is considered to be impaired. A troubled debt restructuring occurs when an account is modified through a concession to a borrower experiencing financial difficulty.

All classes of wholesale and other dealer loan receivables portfolio segment are placed on nonaccrual status when full payment of principal or interest is in doubt, or when principal or interest is 90 days or more contractually past due, whichever occurs first. Collateral dependent loans are placed on nonaccrual status if collateral is insufficient to cover principal and interest. Interest accrued but not collected at the date a receivable is placed on nonaccrual status is reversed against interest income. In addition, the amortization of net deferred fees is suspended.

Interest income on nonaccrual receivables is recognized only to the extent it is received in cash. Accounts are restored to accrual status only when interest and principal payments are brought current and future payments are reasonably assured. Receivable balances are written-off against the allowance for credit losses when it is probable that a loss has been realized. Retail receivables class and finance lease receivables class are not placed generally on nonaccrual status when principal or interest is 90 days or more past due. However, these receivables are generally written-off against the allowance for credit losses when payments due are no longer expected to be received or the account is 120 days contractually past due, whichever occurs first.

As of March 31, 2017 and 2018, finance receivables on nonaccrual status are as follows:

	Yen in millions
	March 31,
	2017		2018
Retail		7,064		6,897
Finance leases		2,297		2,117
Wholesale		15,018		12,484
Real estate		12,632		13,856
Working capital		561		105
		37,572		35,459

As of March 31, 2017 and 2018, finance receivables 90 days or more past due and accruing are as follows:

	Yen in millions
	March 31,
	2017		2018
Retail		26,616		26,007
Finance leases		3,526		3,812
		30,142		29,819

Allowance for credit losses

Allowance for credit losses -

Allowance for credit losses is established to cover probable losses on finance receivables and vehicles and equipment on operating leases, resulting from the inability of customers to make required payments. Provision for credit losses is included in selling, general and administrative expenses.

The allowance for credit losses is based on a systematic, ongoing review and evaluation performed as part of the credit-risk evaluation process, historical loss experience, the size and composition of the portfolios, current economic events and conditions, the estimated fair value and adequacy of collateral and other pertinent factors. Vehicles and equipment on operating leases are not within the scope of accounting guidance governing the disclosure of portfolio segments.

Retail receivables portfolio segment -

Toyota calculates allowance for credit losses to cover probable losses on retail receivables by applying reserve rates to such receivables. Reserve rates are calculated mainly by historical loss experience, current economic events and conditions and other pertinent factors.

Finance lease receivables portfolio segment -

Toyota calculates allowance for credit losses to cover probable losses on finance lease receivables by applying reserve rates to such receivables. Reserve rates are calculated mainly by historical loss experience, current economic events and conditions and other pertinent factors such as used car markets.

Wholesale and other dealer loan receivables portfolio segment -

Toyota calculates allowance for credit losses to cover probable losses on wholesale and other dealer loan receivables by applying reserve rates to such receivables. Reserve rates are calculated mainly by financial conditions of the dealers, terms of collateral setting, current economic events and conditions and other pertinent factors.

Toyota establishes specific reserves to cover the estimated losses on individually impaired receivables within the wholesale and other dealer loan receivables portfolio segment. Specific reserves on impaired receivables are determined by the present value of expected future cash flows or the fair value of collateral when it is probable that such receivables will be unable to be fully collected. The fair value of the underlying collateral is used if the receivable is collateral-dependent. The receivable is determined collateral-dependent if the repayment of the loan is expected to be provided by the underlying collateral. For the receivables in which the fair value of the underlying collateral was in excess of the outstanding balance, no allowance was provided.

Troubled debt restructurings in the retail receivables and finance lease receivables portfolio segments are specifically identified as impaired and aggregated with their respective portfolio segments when determining the allowance for credit losses. Impaired loans in the retail receivables and finance lease receivables portfolio segments are insignificant for individual evaluation and Toyota has determined that allowance for credit losses for each of the retail receivables and finance lease receivables portfolio segments would not be materially different if they had been individually evaluated for impairment.

Specific reserves on impaired receivables within the wholesale and other dealer loan receivables portfolio segment are recorded by an increase to the allowance for credit losses based on the related measurement of impairment. Related collateral, if recoverable, is repossessed and sold and the account balance is written-off.

Any shortfall between proceeds received and the carrying cost of repossessed collateral is charged to the allowance. Recoveries are reversed from the allowance for credit losses.

Allowance for residual value 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 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 by Toyota to be appropriate in relation to the estimated losses on its 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 -

Inventories are valued at cost, not in excess of net realizable value, 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 ¥433,802 million and ¥472,717 million at March 31, 2017 and 2018, respectively. Had the “first-in, first-out” basis been used for those companies using the LIFO basis, inventories would have been ¥40,650 million and ¥22,778 million higher than reported at March 31, 2017 and 2018, respectively.

Property, plant and equipment

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 respective assets according to general class, type of construction and use. The estimated useful lives range from 2 to 65 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 method over the lease term, generally from 2 to 5 years, to the estimated residual value. Incremental direct costs incurred in connection with the acquisition of operating lease contracts are capitalized and amortized on a straight-line method over the lease term.

Long-lived assets

Long-lived assets -

Toyota reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. An impairment loss would be recognized when the carrying amount of an asset group exceeds the estimated undiscounted 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 carrying value of the asset group over its fair value. Fair value is determined mainly using a discounted cash flow valuation method.

Goodwill and intangible assets

Goodwill and intangible assets -

Goodwill is not material to Toyota’s consolidated balance sheets.

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 an indefinite 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 generally determined by the difference between the fair value of the asset using a discounted cash flow valuation method and the current book value.

Employee benefit obligations

Employee benefit obligations -

Toyota has both defined benefit and defined contribution plans for employees’ retirement benefits. Retirement benefit obligations are measured by actuarial calculations in accordance with U.S.GAAP. The funded status of the defined benefit postretirement plans is recognized on the consolidated balance sheets as prepaid pension and severance costs or accrued pension and severance costs, and the funded status change is recognized in the year in which it occurs through other comprehensive income.

Environmental matters

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 liabilities do not reflect any offset for possible recoveries from insurance companies and are not discounted. There were no material changes in these liabilities for all periods presented.

Income taxes

Income taxes -

The provision for income taxes is computed based on the pretax income included in the consolidated statements of income. The asset and liability approach is used to recognize deferred tax assets and liabilities 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

Derivative financial instruments -

Toyota employs derivative financial instruments, including forward foreign currency exchange 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. All derivative financial instruments are recorded on the consolidated balance sheets at fair value, taking into consideration the effects of legally enforceable master netting agreements that allow us to net settle positive and negative positions and offset cash collateral held with the same counterparty on a net basis. 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 through 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 operations.

Net income attributable to Toyota Motor Corporation per common share

Net income attributable to Toyota Motor Corporation per common share -

Basic net income attributable to Toyota Motor Corporation per common share is calculated by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding during the reported period. The calculation of diluted net income attributable to Toyota Motor Corporation per common share is done by adjusting net income attributable to common shareholders and the weighted-average number of common shares outstanding, which includes the additional dilution from the assumed conversion of model AA class shares and the assumed exercise of dilutive stock options.

Stock-based compensation

Stock-based compensation -

Toyota measures compensation expense for its stock-based compensation plan based on the grant-date fair value of the award, and accounts for the award.

Other comprehensive income

Other comprehensive income -

Other comprehensive income 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 is primarily comprised of unrealized gains/losses on marketable securities designated as available-for-sale, foreign currency translation adjustments and adjustments attributed to pension liabilities associated with Toyota’s defined benefit pension plans.

Accounting changes

Accounting changes -

In July 2015, the Financial Accounting Standards Board (“FASB”) issued updated guidance to simplify the measurement of inventory. Toyota adopted this guidance on April 1, 2017. The adoption of this guidance did not have a material impact on Toyota’s consolidated financial statements.

In March 2016, the FASB issued updated guidance for effect of derivative contract novations on existing hedge accounting relationships. This guidance clarifies that a change in the counterparty to a designated derivative hedging instrument does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. Toyota adopted this guidance on April 1, 2017. The adoption of this guidance did not have a material impact on Toyota’s consolidated financial statements.

In March 2016, the FASB issued updated guidance for contingent put and call options in debt instruments. This guidance clarifies whether embedded contingent put and call options are clearly and closely related to the debt host when bifurcating embedded derivatives. Toyota adopted this guidance on April 1, 2017. The adoption of this guidance did not have a material impact on Toyota’s consolidated financial statements.

In October 2016, the FASB issued updated guidance for consolidation. Under this guidance, a reporting entity would evaluate its indirect economic interest in a variable interest entity held through a related party under common control on a proportionate basis. Toyota adopted this guidance on April 1, 2017. The adoption of this guidance did not have a material impact on Toyota’s consolidated financial statements.

In February 2018, the FASB issued updated guidance for comprehensive income. This guidance allows entities to reclassify tax effects stranded in accumulated other comprehensive incomes as a result of the Tax Cuts and Jobs Act of 2017 of the United States to retained earnings. Toyota early adopted this guidance on April 1, 2017. The adoption of this guidance did not have a material impact on Toyota’s consolidated financial statements.

Recent pronouncements to be adopted in future periods

Recent pronouncements to be adopted in future periods -

In May 2014, the FASB issued updated guidance on the recognition of revenue from contracts with customers. This guidance requires an entity to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and supersedes the current revenue recognition guidance. In August 2015, the FASB issued updated guidance on the deferral of the effective date. As a result, this guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. This guidance may be adopted retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying this guidance recognized at the date of initial application. Toyota will apply the modified retrospective method of adoption from the fiscal year beginning April 1, 2018. Management does not expect this guidance to have a material impact on Toyota’s consolidated financial statements.

In January 2016, the FASB issued updated guidance for financial instruments. This guidance addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments and will require entities to measure equity investments at fair value and recognize any changes in fair value in net income. This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Toyota will adopt this guidance from the fiscal year beginning April 1, 2018. Toyota will recognize a cumulative-effect adjustment to retained earnings of ¥1,125,109 million as of April 1, 2018 for after-tax unrealized gains of available-for-sale equity securities previously recognized in accumulated other comprehensive income.

In February 2016, the FASB issued updated guidance for leases. This guidance will require lessees to recognize almost all leases on their balance sheet as a right-of-use asset and a lease liability. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Management is evaluating the impact of adopting this guidance on Toyota’s consolidated financial statements.

In June 2016, the FASB issued updated guidance for measurement of credit losses on financial instruments. This guidance introduces an approach to estimate credit losses on certain types of financial instruments based on expected losses. It also modifies the impairment model for available-for-sale debt securities. This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Management is evaluating the impact of adopting this guidance on Toyota’s consolidated financial statements.

In August 2016, the FASB issued updated guidance for classification of statement of cash flows. This guidance clarifies classification of certain cash receipts and cash payments of statement of cash flows. This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Management does not expect this guidance to have a material impact on Toyota’s consolidated financial statements.

In October 2016, the FASB issued updated guidance that would require entities to recognize the income tax consequences of intercompany asset transfers other than inventory. This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Management does not expect this guidance to have a material impact on Toyota’s consolidated financial statements.

In November 2016, the FASB issued updated guidance for the statement of cash flows. This guidance will require that restricted cash and restricted cash equivalents should be included with cash and cash equivalents. It will also require entities to disclose how the statement of cash flows that includes restricted cash with cash and cash equivalents reconciles to the balance sheet. This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Management does not expect this guidance to have a material impact on Toyota’s consolidated financial statements.

In August 2017, the FASB issued updated guidance for hedge accounting. This guidance simplifies and expands the application of hedge accounting. This guidance is effective for fiscal year beginning after December 15, 2018, including interim periods within those fiscal years. Management is evaluating the impact of adopting this guidance on Toyota’s consolidated financial statements.

Reclassifications

Reclassifications -

Certain prior year amounts have been reclassified to conform to the presentations as of and for the year ended March 31, 2018.

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Summary of significant accounting policies (Tables)

12 Months Ended

Mar. 31, 2018

Finance Receivables on Nonaccrual Status

As of March 31, 2017 and 2018, finance receivables on nonaccrual status are as follows:

	Yen in millions
	March 31,
	2017		2018
Retail		7,064		6,897
Finance leases		2,297		2,117
Wholesale		15,018		12,484
Real estate		12,632		13,856
Working capital		561		105
		37,572		35,459

Finance Receivables 90 Days or More Past Due and Accruing

As of March 31, 2017 and 2018, finance receivables 90 days or more past due and accruing are as follows:

	Yen in millions
	March 31,
	2017		2018
Retail		26,616		26,007
Finance leases		3,526		3,812
		30,142		29,819

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Marketable securities and other securities investments (Tables)

12 Months Ended

Mar. 31, 2018

Aggregate Cost, Gross Unrealized Gains and Losses and Fair Value of Marketable Securities and Other Securities Investments

Marketable securities and other securities investments include public and corporate bonds and common stocks for which the aggregate cost, gross unrealized gains and losses and fair value are as follows:

	Yen in millions
	March 31, 2017
	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Available-for-sale
Public and corporate bonds		5,789,221		145,640		49,030		5,885,831
Common stocks		668,345		2,018,910		321		2,686,934
Other		819,514		9,724		2,670		826,568
Total		7,277,080		2,174,274		52,021		9,399,333
Securities not practicable to determine fair value
Public and corporate bonds		25,257
Common stocks		76,936
Total		102,193
	Yen in millions
	March 31, 2018
	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Available-for-sale
Public and corporate bonds		6,276,811		150,198		118,275		6,308,734
Common stocks		676,959		1,910,767		5,611		2,582,115
Other		730,334		8,058		1,413		736,979
Total		7,684,104		2,069,023		125,299		9,627,828
Securities not practicable to determine fair value
Public and corporate bonds		29,980
Common stocks		109,875
Total		139,855

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Finance receivables (Tables)

12 Months Ended

Mar. 31, 2018

Schedule of Finance Receivables

Finance receivables consist of the following:

	Yen in millions
	March 31,
	2017			2018
Retail		11,453,352			11,995,174
Finance leases		1,265,882			1,460,600
Wholesale and other dealer loans		3,281,142			3,281,427
		16,000,376			16,737,201
Deferred origination costs		172,298			181,764
Unearned income		(804,591	)		(919,967	)
Allowance for credit losses
Retail		(104,354	)		(103,457	)
Finance leases		(23,962	)		(28,817	)
Wholesale and other dealer loans		(30,896	)		(36,800	)
Total allowance for credit losses		(159,212	)		(169,074	)
Total finance receivables, net		15,208,871			15,829,924
Less - Current portion		(6,196,649	)		(6,348,306	)
Noncurrent finance receivables, net		9,012,222			9,481,618

Summary of Contractual Maturities

The contractual maturities of retail receivables, the future minimum lease payments on finance leases and the contractual maturities of wholesale and other dealer loans at March 31, 2018 are summarized as follows:

	Yen in millions
Years ending March 31,	Retail		Finance leases		Wholesale and other dealer loans
2019		3,887,959		370,916		2,431,231
2020		2,870,540		293,371		234,874
2021		2,269,797		228,764		140,295
2022		1,569,215		103,796		162,198
2023		884,871		37,134		121,654
Thereafter		512,792		5,122		191,175
		11,995,174		1,039,103		3,281,427

Summary of Finance Leases

Finance leases consist of the following:

	Yen in millions
	March 31,
	2017			2018
Minimum lease payments		889,522			1,039,103
Estimated unguaranteed residual values		376,360			421,497
		1,265,882			1,460,600
Deferred origination costs		5,809			10,411
Less - Unearned income		(103,518	)		(120,884	)
Less - Allowance for credit losses		(23,962	)		(28,817	)
Finance leases, net		1,144,211			1,321,310

Amount of Finance Receivables Segregated into Aging Categories Based on Number of Days Outstanding

The table below shows the amount of the finance receivables segregated into aging categories based on the number of days outstanding as of March 31, 2017 and 2018:

	Yen in millions
	March 31, 2017
	Retail		Finance leases		Wholesale		Real estate		Working capital
Current		11,264,660		1,255,626		1,707,432		848,757		722,697
30-59 days past due		125,626		5,114		1,327		—		405
60-89 days past due		29,321		1,321		—		—		—
90 days or greater past due		33,745		3,821		—		266		258
Total		11,453,352		1,265,882		1,708,759		849,023		723,360
	Yen in millions
	March 31, 2018
	Retail		Finance leases		Wholesale		Real estate		Working capital
Current		11,802,032		1,448,989		1,721,225		823,007		731,877
30-59 days past due		127,830		5,741		138		—		—
60-89 days past due		32,408		1,760		5,112		—		—
90 days or greater past due		32,904		4,110		—		65		3
Total		11,995,174		1,460,600		1,726,475		823,072		731,880

Recorded Investment for each Credit Quality of Finance Receivable within Wholesale and Other Dealer Loan Receivables Portfolio Segment in United States and Other Regions

The tables below show the recorded investment for each credit quality of the finance receivable within the wholesale and other dealer loan receivables portfolio segment in the United States and other regions as of March 31, 2017 and 2018:

United States

The wholesale and other dealer loan receivables portfolio segment is primarily segregated into credit qualities below based on internal risk assessments by dealers.

Performing: Account not classified as either Credit Watch, At Risk or Default

Credit Watch: Account designated for elevated attention

At Risk: Account where there is an increased likelihood that default may exist based on qualitative and quantitative factors

Default: Account is not currently meeting contractual obligations or we have temporarily waived certain contractual requirements

	Yen in millions
	March 31, 2017
	Wholesale		Real estate		Working capital		Total
Performing		1,076,164		449,884		233,677		1,759,725
Credit Watch		142,336		68,726		16,049		227,111
At Risk		1,286		5,071		561		6,918
Default		8,791		5,079		544		14,414
Total		1,228,577		528,760		250,831		2,008,168

	Yen in millions
	March 31, 2018
	Wholesale		Real estate		Working capital		Total
Performing		1,005,030		432,397		225,442		1,662,869
Credit Watch		99,547		51,420		10,730		161,697
At Risk		7,968		3,081		3,506		14,555
Default		4,356		4,993		2,231		11,580
Total		1,116,901		491,891		241,909		1,850,701

Other regions

Credit qualities of the wholesale and other dealer loan receivables portfolio segment in other regions are also monitored based on internal risk assessments by dealers on a consistent basis as in the United States. These accounts classified as “Credit Watch” or “At Risk” were not significant in other regions, and consequently the tables below summarize information for two categories, “Performing” and “Default”.

	Yen in millions
	March 31, 2017
	Wholesale		Real estate		Working capital		Total
Performing		460,308		316,008		472,198		1,248,514
Default		19,874		4,255		331		24,460
Total		480,182		320,263		472,529		1,272,974

	Yen in millions
	March 31, 2018
	Wholesale		Real estate		Working capital		Total
Performing		585,760		323,581		489,801		1,399,142
Default		23,814		7,600		170		31,584
Total		609,574		331,181		489,971		1,430,726

Impaired Finance Receivables

The tables below summarize information about impaired finance receivables:

	Yen in millions
	Recorded investment				Unpaid principal balance				Individually evaluated allowance
	March 31,				March 31,				March 31,
	2017		2018		2017		2018		2017		2018
Impaired account balances individually evaluated for impairment with an allowance:
Wholesale		10,667		11,582		10,667		11,582		1,373		1,525
Real estate		10,986		9,353		10,986		9,353		1,596		588
Working capital		3,793		5,858		3,793		5,858		1,291		5,429
Total		25,446		26,793		25,446		26,793		4,260		7,542
Impaired account balances individually evaluated for impairment without an allowance:
Wholesale		15,033		8,818		15,033		8,818
Real estate		11,780		15,086		11,780		15,086
Working capital		—		2,337		—		2,337
Total		26,813		26,241		26,813		26,241
Impaired account balances aggregated and evaluated for impairment:
Retail		27,269		27,151		26,597		26,418
Finance leases		66		100		54		74
Total		27,335		27,251		26,651		26,492
Total impaired account balances:
Retail		27,269		27,151		26,597		26,418
Finance leases		66		100		54		74
Wholesale		25,700		20,400		25,700		20,400
Real estate		22,766		24,439		22,766		24,439
Working capital		3,793		8,195		3,793		8,195
Total		79,594		80,285		78,910		79,526

	Yen in millions
	Average impaired finance receivables
	For the years ended March 31,
	2017		2018
Total impaired account balances:
Retail		26,628		27,664
Finance leases		76		83
Wholesale		26,306		23,171
Real estate		22,482		22,831
Working capital		4,208		5,818
Total		79,700		79,567

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Inventories (Tables)

12 Months Ended

Mar. 31, 2018

Components of Inventories

Inventories consist of the following:

	Yen in millions
	March 31,
	2017		2018
Finished goods		1,552,823		1,683,694
Raw materials		413,049		435,360
Work in process		309,387		304,929
Supplies and other		113,358		115,806
Total		2,388,617		2,539,789

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Vehicles and equipment on operating leases (Tables)

12 Months Ended

Mar. 31, 2018

Summary of Vehicles and Equipment on Operating Lease

Vehicles and equipment on operating leases consist of the following:

	Yen in millions
	March 31,
	2017			2018
Vehicles		6,105,527			6,124,699
Equipment		13,096			13,373
Less - Deferred income and other		(152,044	)		(203,679	)
		5,966,579			5,934,393
Less - Accumulated depreciation		(1,263,774	)		(1,352,840	)
Less - Allowance for credit losses		(18,889	)		(15,013	)
Vehicles and equipment on operating leases, net		4,683,916			4,566,540

Future Minimum Rentals from Vehicles and Equipment on Operating Leases

Future minimum rentals from vehicles and equipment on operating leases are due in installments as follows:

Years ending March 31,	Yen in millions
2019		769,926
2020		490,182
2021		221,216
2022		46,818
2023		11,675
Thereafter		1,478
Total minimum future rentals		1,541,295

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Allowance for doubtful accounts and credit losses (Tables)

12 Months Ended

Mar. 31, 2018

Allowance for Doubtful Accounts Relating to Trade Accounts and Notes Receivable

The net changes in the allowance for doubtful accounts relating to trade accounts and notes receivable for the years ended March 31, 2016, 2017 and 2018 are as follows:

	Yen in millions
	For the years ended March 31,
	2016			2017			2018
Allowance for doubtful accounts at beginning of year		50,410			94,853			100,712
Provision for doubtful accounts, net of reversal		69,029			6,519			(74	)
Write-offs		(20,649	)		(3,839	)		(2,374	)
Other		(3,937	)		3,179			326
Allowance for doubtful accounts at end of year		94,853			100,712			98,590

Allowance for Credit Losses Relating to Finance Receivables and Vehicles and Equipment on Operating Leases

The net changes in the allowance for credit losses relating to finance receivables and vehicles and equipment on operating leases for the years ended March 31, 2016, 2017 and 2018 are as follows:

	Yen in millions
	For the years ended March 31,
	2016			2017			2018
Allowance for credit losses at beginning of year		178,038			167,330			178,101
Provision for credit losses, net of reversal		90,236			92,147			76,143
Charge-offs		(102,948	)		(99,550	)		(96,444	)
Recoveries		22,356			21,757			25,344
Other		(20,352	)		(3,583	)		943
Allowance for credit losses at end of year		167,330			178,101			184,087

Allowance for Credit Losses Relating to Retail Receivables, Finance Lease Receivables and Wholesale and Other Dealer Loan Receivables Portfolio Segments

The net changes in the allowance for credit losses above relating to retail receivables portfolio segment, finance lease receivables portfolio segment and wholesale and other dealer loan receivables portfolio segment for the years ended March 31, 2016, 2017 and 2018 are as follows:

	Yen in millions
	For the year ended March 31, 2016
	Retail			Finance leases			Wholesale and other dealer loans
Allowance for credit losses at beginning of year		109,316			29,303			30,053
Provision for credit losses, net of reversal		65,677			1,742			4,962
Charge-offs		(83,116	)		(3,833	)		(667	)
Recoveries		18,999			380			230
Other		(12,023	)		(2,992	)		(3,750	)
Allowance for credit losses at end of year		98,853			24,600			30,828
	Yen in millions
	For the year ended March 31, 2017
	Retail			Finance leases			Wholesale and other dealer loans
Allowance for credit losses at beginning of year		98,853			24,600			30,828
Provision for credit losses, net of reversal		67,433			1,657			854
Charge-offs		(78,114	)		(2,007	)		(324	)
Recoveries		18,282			194			160
Other		(2,100	)		(482	)		(622	)
Allowance for credit losses at end of year		104,354			23,962			30,896

	Yen in millions
	For the year ended March 31, 2018
	Retail			Finance leases			Wholesale and other dealer loans
Allowance for credit losses at beginning of year		104,354			23,962			30,896
Provision for credit losses, net of reversal		52,891			7,115			6,497
Charge-offs		(74,868	)		(2,708	)		(823	)
Recoveries		20,511			315			59
Other		569			133			171
Allowance for credit losses at end of year		103,457			28,817			36,800

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Affiliated companies and variable interest entities (Tables)

12 Months Ended

Mar. 31, 2018

Summary of Financial Information for Affiliated Companies Accounted for by Equity Method

Summarized financial information for affiliated companies accounted for by the equity method is shown below:

	Yen in millions
	March 31,
	2017		2018
Current assets		11,795,296		12,766,962
Noncurrent assets		11,003,432		12,326,689
Total assets		22,798,728		25,093,651
Current liabilities		7,419,176		8,061,342
Long-term liabilities and noncontrolling interests		5,423,938		5,940,549
Affiliated companies accounted for by the equity method shareholders’ equity		9,955,614		11,091,760
Total liabilities and shareholders’ equity		22,798,728		25,093,651
Toyota’s share of affiliated companies accounted for by the equity method shareholders’ equity		2,845,422		3,162,711
Number of affiliated companies accounted for by the equity method at end of period		54		57

	Yen in millions
	For the years ended March 31,
	2016		2017		2018
Net revenues		31,037,029		30,309,263		30,680,535
Gross profit		3,852,899		3,644,267		4,065,344
Net income attributable to affiliated companies accounted for by the equity method		957,742		1,099,080		1,344,687
Equity in earnings of affiliated companies attributable to Toyota Motor Corporation		329,099		362,060		470,083

Entities Comprising Significant Portion of Toyota's Investment in Affiliated Companies and Percentage of Ownership

Entities comprising a significant portion of Toyota’s investment in affiliated companies and percentage of ownership are presented below:

	Percentage of ownership
	March 31,
Name of affiliated companies	2017			2018
Denso Corporation		24.9	%		24.4	%
Toyota Industries Corporation		24.9	%		24.9	%
Aisin Seiki Co., Ltd.		24.1	%		24.9	%
Toyota Tsusho Corporation		22.0	%		22.0	%
Toyoda Gosei Co., Ltd.		43.0	%		43.0	%

Account Balances and Transactions with Affiliated Companies

Account balances and transactions with affiliated companies are presented below:

	Yen in millions
	March 31,
	2017		2018
Trade accounts and notes receivable, and other receivables		289,406		301,335
Accounts payable and other payables		691,173		736,023

	Yen in millions
	For the years ended March 31,
	2016		2017		2018
Net revenues		1,804,493		1,914,318		2,004,632
Purchases		4,359,854		5,357,682		5,749,430

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Short-term borrowings and long-term debt (Tables)

12 Months Ended

Mar. 31, 2018

Short-term Borrowings

Short-term borrowings at March 31, 2017 and 2018 consist of the following:

	Yen in millions
	March 31,
	2017		2018
Loans, principally from banks, with a weighted-average interest at March 31, 2017 and March 31, 2018 of 1.86% and of 2.14% per annum, respectively		1,125,324		1,254,444
Commercial paper with a weighted-average interest at March 31, 2017 and March 31, 2018 of 1.08% and of 1.65% per annum, respectively		3,828,358		3,900,469
		4,953,682		5,154,913

Long-term Debt

Long-term debt at March 31, 2017 and 2018 comprises the following:

	Yen in millions
	March 31,
	2017			2018
Unsecured loans, representing obligations principally to banks, due 2017 to 2036 in 2017 and due 2018 to 2036 in 2018 with a weighted-average interest at March 31, 2017 and March 31, 2018 of 2.44% and of 2.70% per annum, respectively		3,318,865			3,215,309
Secured loans, representing obligations principally to finance receivables securitization due 2017 to 2030 in 2017 and due 2018 to 2030 in 2018 with a weighted-average interest at March 31, 2017 and March 31, 2018 of 1.43% and of 1.99% per annum, respectively		2,080,362			1,963,057
Medium-term notes of consolidated subsidiaries, due 2017 to 2046 in 2017 and due 2018 to 2046 in 2018 with a weighted-average interest at March 31, 2017 and March 31, 2018 of 2.12% and of 2.18% per annum, respectively		6,923,511			6,994,629
Unsecured notes of parent company, due 2017 to 2036 in 2017 and due 2018 to 2037 in 2018 with a weighted-average interest at March 31, 2017 and March 31, 2018 of 1.35% and of 0.94% per annum, respectively		370,000			370,000
Unsecured notes of consolidated subsidiaries, due 2017 to 2032 in 2017 and due 2018 to 2031 in 2018 with a weighted-average interest at March 31, 2017 and March 31, 2018 of 2.17% and of 2.20% per annum, respectively		1,430,022			1,569,517
Secured notes of consolidated subsidiaries, due 2017 to 2020 in 2017 and due 2018 to 2021 in 2018 with a weighted-average interest at March 31, 2017 and March 31, 2018 of 8.14% and of 7.90% per annum, respectively		57,036			59,513
Long-term capital lease obligations, due 2017 to 2035 in 2017 and due 2018 to 2035 in 2018 with interest ranging from 0.37% to 14.73% per annum in 2017 and from 0.37% to 14.73% per annum in 2018		22,249			20,626
		14,202,045			14,192,651
Less - Current portion due within one year		(4,290,449	)		(4,186,277	)
		9,911,596			10,006,374

Aggregate Amounts of Annual Maturities of Long-term Debt During Next Five Years

The aggregate amounts of annual maturities of long-term debt during the next five years are as follows:

Years ending March 31,	Yen in millions
2019		4,186,277
2020		2,848,360
2021		2,398,498
2022		2,236,208
2023		1,612,872

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Product warranties and recalls and other safety measures (Tables)

12 Months Ended

Mar. 31, 2018

Net Changes in Liabilities for Quality Assurances

The net changes in liabilities for quality assurances above for the years ended March 31, 2016, 2017 and 2018 consist of the following:

	Yen in millions
	For the years ended March 31,
	2016			2017			2018
Liabilities for quality assurances at beginning of year		1,328,916			1,403,764			1,696,938
Payments made during year		(501,073	)		(604,853	)		(586,943	)
Provision for quality assurances		636,719			919,086			649,377
Changes relating to pre-existing quality assurances		(39,225	)		(24,147	)		(56,769	)
Other		(21,573	)		3,088			(291	)
Liabilities for quality assurances at end of year		1,403,764			1,696,938			1,702,312

Net Changes in Liabilities for Recalls and Other Safety Measures which are Comprised in Liabilities for Quality Assurances

The table below shows the net changes in liabilities for recalls and other safety measures which are comprised in liabilities for quality assurances above for the years ended March 31, 2016, 2017 and 2018.

	Yen in millions
	For the years ended March 31,
	2016			2017			2018
Liabilities for recalls and other safety measures at beginning of year		755,050			925,475			1,275,200
Payments made during year		(347,861	)		(444,416	)		(456,177	)
Provision for recalls and other safety measures		524,100			794,009			454,391
Other		(5,814	)		132			1,842
Liabilities for recalls and other safety measures at end of year		925,475			1,275,200			1,275,256

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Income taxes (Tables)

12 Months Ended

Mar. 31, 2018

Components of Income Before Income Taxes

The components of income before income taxes comprise the following:

	Yen in millions
	For the years ended March 31,
	2016		2017		2018
Income before income taxes:
Parent company and domestic subsidiaries		1,834,413		1,423,208		1,880,971
Foreign subsidiaries		1,148,968		770,617		739,458
		2,983,381		2,193,825		2,620,429

Provision for Income Taxes

The provision for income taxes consists of the following:

	Yen in millions
	For the years ended March 31,
	2016			2017			2018
Current income tax expense:
Parent company and domestic subsidiaries		591,868			435,560			565,998
Foreign subsidiaries		253,512			246,639			176,369
Total current		845,380			682,199			742,367
Deferred income tax expense (benefit):
Parent company and domestic subsidiaries		(40,934	)		(21,756	)		45,097
Foreign subsidiaries		73,823			(31,543	)		(283,058	)
Total deferred		32,889			(53,299	)		(237,961	)
Total provision		878,269			628,900			504,406

Reconciliation of Differences Between Statutory Tax Rate and Effective Income Tax Rate

Reconciliation of the differences between the statutory tax rate and the effective income tax rate is as follows:

	For the years ended March 31,
	2016			2017			2018
Statutory tax rate		32.9	%		31.1	%		31.1	%
Increase (reduction) in taxes resulting from:
Non-deductible expenses		0.3			0.4			0.4
Deferred tax liabilities on undistributed earnings of foreign subsidiaries		1.0			1.3			1.1
Deferred tax liabilities on undistributed earnings of affiliated companies accounted for by the equity method		2.4			3.3			3.8
Valuation allowance		(0.4	)		(0.6	)		(2.0	)
Tax credits		(4.7	)		(4.8	)		(4.3	)
The difference between the statutory tax rate in Japan and that of foreign subsidiaries		(1.3	)		(1.9	)		(1.5	)
Unrecognized tax benefits adjustments		0.2			0.4			0.2
Revision to reduce deferred tax assets and liabilities at the fiscal year-end due to changes in tax rates		(0.5	)		—			—
Effect of the Tax Cuts and Jobs Act of 2017 of the United States		—			—			(9.5	)
Other		(0.5	)		(0.5	)		(0.1	)
Effective income tax rate		29.4	%		28.7	%		19.2	%

Components of Deferred Tax Assets and Liabilities

Significant components of deferred tax assets and liabilities are as follows:

	Yen in millions
	March 31,
	2017			2018
Deferred tax assets
Accrued pension and severance costs		219,465			199,366
Accrued expenses and liabilities for quality assurances		644,936			609,257
Other accrued employees’ compensation		114,752			112,316
Operating loss carryforwards for tax purposes		76,317			203,897
Allowance for doubtful accounts and credit losses		82,916			63,223
Property, plant and equipment and other assets		234,372			249,320
Other		335,992			348,852
Gross deferred tax assets		1,708,750			1,786,231
Less - Valuation allowance		(146,623	)		(93,814	)
Total deferred tax assets		1,562,127			1,692,417
Deferred tax liabilities
Unrealized gains on securities, net		(692,962	)		(635,292	)
Undistributed earnings of foreign subsidiaries		(28,544	)		(29,967	)
Undistributed earnings of affiliated companies accounted for by the equity method		(709,094	)		(794,485	)
Basis difference of acquired assets		(31,861	)		(30,768	)
Lease transactions		(973,000	)		(751,292	)
Other		(46,407	)		(74,658	)
Gross deferred tax liabilities		(2,481,868	)		(2,316,462	)
Net deferred tax liability		(919,741	)		(624,045	)

The deferred tax assets and liabilities above that comprise the net deferred tax liability are included in the consolidated balance sheets as follows:

	Yen in millions
	March 31,
	2017			2018
Deferred tax assets
Investments and other assets - Other		503,985			494,120
Deferred tax liabilities
Deferred income taxes (Long-term liabilities)		(1,423,726	)		(1,118,165	)
Net deferred tax liability		(919,741	)		(624,045	)

Net Changes in Total Valuation Allowance for Deferred Tax Assets

The net changes in the total valuation allowance for deferred tax assets for the years ended March 31, 2016, 2017 and 2018 consist of the following:

	Yen in millions
	For the years ended March 31,
	2016			2017			2018
Valuation allowance at beginning of year		169,811			151,665			146,623
Additions		33,243			27,147			16,106
Deductions		(43,723	)		(37,891	)		(74,435	)
Other		(7,666	)		5,702			5,520
Valuation allowance at end of year		151,665			146,623			93,814

Summary of Gross Unrecognized Tax Benefits Changes

A summary of the gross unrecognized tax benefits changes for the years ended March 31, 2016, 2017 and 2018 is as follows:

	Yen in millions
	For the years ended March 31,
	2016			2017			2018
Balance at beginning of year		13,644			19,250			21,553
Additions based on tax positions related to the current year		1,001			8,187			612
Additions for tax positions of prior years		6,378			6,076			13,954
Reductions for tax positions of prior years		(77	)		(5,593	)		(13,217	)
Reductions for tax positions related to lapse of statute of limitations		(7	)		(9	)		—
Reductions for settlements		(427	)		(6,317	)		(26	)
Other		(1,262	)		(41	)		(1,312	)
Balance at end of year		19,250			21,553			21,564

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Class Shares (Tables)

12 Months Ended

Mar. 31, 2018

Additional Information Regarding Model AA Class Shares

Presented below is additional information regarding the Model AA Class Shares:

Total number of shares issued	:	47,100,000 shares
Issue price	:	10,598 yen per share
Purchase price	:	10,121.09 yen per share
Voting rights	:	Model AA Class Shares shall have voting rights. The number of shares constituting one unit with respect to Model AA Class Shares shall be 100.
Restrictions on transfer	:	Model AA Class Shares shall have restrictions on transfer.
Dividends	:	(1)   If the record date falls in the fiscal year ending on March 31, 2016: 0.5% of the issue price
		(2)   If the record date falls in the fiscal year ending on March 31, 2017 through March 31, 2020: the annual dividend rate for the previous fiscal year plus 0.5% of the issue price
		(3)   If the record date falls in the fiscal year ending on March 31, 2021 or later: 2.5% of the issue price
Shareholder’s right	:	(1)   Shareholder’s conversion right into Common Shares Shareholders of the Model AA Class Shares may demand TMC to acquire all or a part of their Model AA Class Shares in exchange for Common Shares on the first business day of April and October of every year, starting October 1, 2020.
		(2)   Shareholder’s cash put option Shareholders of the Model AA Class Shares may demand TMC to acquire all or a part of their Model AA Class Shares in exchange for cash on the last business day of March, June, September and December of each year, starting on September 1, 2020.
TMC’s right	:	TMC may acquire, on or after April 2, 2021, all of the outstanding Model AA Class Shares in exchange for cash.

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Shareholders' equity (Tables)

12 Months Ended

Mar. 31, 2018

Changes in Number of Shares of Common Stock Issued

Changes in the number of shares of common stock issued have resulted from the following:

	For the years ended March 31,
	2016			2017			2018
Common stock issued
Balance at beginning of year		3,417,997,492			3,337,997,492			3,262,997,492
Issuance during the year		—			—			—
Purchase and retirement		(80,000,000	)		(75,000,000	)		—
Balance at end of year		3,337,997,492			3,262,997,492			3,262,997,492

Additional Information Regarding Repurchase, Reissuance and Retirement of Treasury Stock

The repurchase, reissuance and retirement of treasury stock for the years ended March 31, 2016, 2017 and 2018 are as follows:

For the year ended March 31, 2016

Repurchase of treasury stock

Reason for repurchasing treasury stock -

The repurchase was made to avoid the dilution of common share value as a result of the issuance of the First Series Model AA Class Shares.

Details of matters relating to repurchase -

Number of common shares repurchased	47,100,000 shares
Total purchase price for repurchase of shares	¥349,935 million

Reason for repurchasing treasury stock -

The repurchase was made to return capital to shareholders in addition to promoting capital efficiency and agile capital policy in view of the business environment.

Details of matters relating to repurchase -

Number of common shares repurchased	62,942,900 shares
Total purchase price for repurchase of shares	¥432,692 million

Retirement of treasury stock

Reason for retiring treasury stock -

The retirement was made to relieve concerns regarding the dilution of common share value due to reissuanceof treasury stock in the future.

Details of matters relating to retirement -

Number of common shares retired 80,000,000 shares

The amount on retirement of treasury stock was treated as a reduction in additional paid-in capital and retained earnings. As a result, treasury stock, additional paid-in capital and retained earnings decreased by ¥400,537 million, ¥1,048 million and ¥399,489 million, respectively.

For the year ended March 31, 2017

Repurchase of treasury stock

Reason for repurchasing treasury stock -

The repurchase was made to return capital to shareholders in addition to promoting capital efficiency and agile capital policy in view of the business environment.

Details of matters relating to repurchase -

Number of common shares repurchased	116,555,700 shares
Total purchase price for repurchase of shares	¥699,986 million

Reissuance of treasury stock

Reason for reissuing treasury stock and details of matters relating to reissuance -

On August 1, 2016, the parent company implemented share exchange as a result of which the parent company became a wholly owning parent company and Daihatsu Motor Co., Ltd. (“Daihatsu”) became a wholly owned subsidiary, and the parent company acquired additional shares of Daihatsu. As a result of this share exchange, the parent company issued 52,856,096 shares of treasury stock, treasury stock decreased by ¥283,561 million and gains on disposal of treasury stock occurred in the amount of ¥27,972 million. As a result, additional paid-in capital increased by ¥27,972 million. As a result of acquiring additional shares of Daihatsu, additional paid-in capital, noncontrolling interests and accumulated other comprehensive income (loss) decreased by ¥53,742 million, ¥255,565 million and ¥2,226 million, respectively.

Retirement of treasury stock

Reason for retiring treasury stock -

The retirement was made to relieve concerns regarding the dilution of common share value due to reissuanceof treasury stock in the future.

Details of matters relating to retirement -

Number of common shares retired 75,000,000 shares

The amount on retirement of treasury stock was treated as a reduction in additional paid-in capital and retained earnings. As a result, treasury stock, additional paid-in capital and retained earnings decreased by ¥407,383 million, ¥27,374 million and ¥380,009 million, respectively.

For the year ended March 31, 2018

Repurchase of treasury stock

Reason for repurchasing treasury stock -

The repurchase was made to return capital to shareholders in addition to promoting capital efficiency and agile capital policy in view of the business environment.

Details of matters relating to repurchase -

Number of common shares repurchased	73,708,400 shares
Total purchase price for repurchase of shares	¥499,989 million

Reissuance of treasury stock

Reason for reissuing treasury stock -

On August 4, 2017, the parent company and Mazda Motor Corporation (Mazda) signed an agreement to enter a business and capital alliance, with the aim of further strengthening their lasting partnership. The parent company acquired common stock newly issued by Mazda through a third-party allotment. Mazda acquired the parent company’s shares that were equivalent in value to the Mazda shares through a disposition of treasury stock involving a third-party allotment implemented by the parent company.

Details of matters relating to reissuance -

Number of common shares reissued	8,293,300 shares
Amount of proceeds	¥50,000 million

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Accumulated other comprehensive income (Tables)

12 Months Ended

Mar. 31, 2018

Components of Accumulated Other Comprehensive Income (Loss) and Related Changes, Net of Taxes

Changes in accumulated other comprehensive income (loss) are as follows:

	Yen in millions
	Foreign currency translation adjustments			Unrealized gains (losses) on securities			Pension liability adjustments			Accumulated other comprehensive income (loss)
Balance at March 31, 2015		(136,090	)		1,727,565			(113,930	)		1,477,545
Other comprehensive income (loss) before reclassifications, net of taxes of ¥10,719 million, ¥130,092 million, ¥93,210 million and ¥234,021 million		(423,404	)		(291,681	)		(214,600	)		(929,685	)
Reclassifications, net of taxes of ¥— million, ¥9,832 million, ¥(3,318) million and ¥6,514 million		28,052			(20,511	)		5,419			12,960
Other comprehensive income (loss), net of tax		(395,352	)		(312,192	)		(209,181	)		(916,725	)
Less - Other comprehensive income attributable to noncontrolling interests		32,387			9,572			7,989			49,948
Balance at March 31, 2016		(499,055	)		1,424,945			(315,122	)		610,768
Other comprehensive income (loss) before reclassifications, net of taxes of ¥9,240 million, ¥(9,048) million, ¥(40,099) million and ¥(39,907) million		(57,926	)		41,134			82,939			66,147
Reclassifications, net of taxes of ¥— million, ¥23,275 million, ¥(5,255) million and ¥18,020 million		—			(36,855	)		10,373			(26,482	)
Other comprehensive income (loss), net of tax		(57,926	)		4,279			93,312			39,665
Less - Other comprehensive income attributable to noncontrolling interests		5,499			(12,281	)		(503	)		(7,285	)
Equity transaction with noncontrolling interests and other		(8,626	)		9,060			(2,660	)		(2,226	)
Balance at March 31, 2017		(560,108	)		1,426,003			(224,973	)		640,922
Other comprehensive income (loss) before reclassifications, net of taxes of ¥(3,624) million, ¥38,539 million, ¥(7,568) million and ¥27,347 million		(113,942	)		(72,501	)		15,814			(170,629	)
Reclassifications, net of taxes of ¥— million, ¥9,729 million, ¥(2,500) million and ¥7,229 million		(6,664	)		(22,058	)		6,501			(22,221	)
Other comprehensive income (loss), net of tax		(120,606	)		(94,559	)		22,315			(192,850	)
Less - Other comprehensive income attributable to noncontrolling interests		1,629			(2,022	)		(580	)		(973	)
Equity transaction with noncontrolling interests and other		—			162			(11,562	)		(11,400	)
Balance at March 31, 2018		(679,085	)		1,329,584			(214,800	)		435,699

Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

Reclassifications for the years ended March 31, 2016, 2017 and 2018 consist of the following:

	Yen in millions
	For the years ended March 31,									Affected line items in the consolidated statements of income
	2016			2017			2018
Foreign currency translation adjustments:
		28,052			—			(6,664	)	Other income (loss), net
		28,052			—			(6,664	)	Income before income taxes and equity in earnings of affiliated companies
		28,052			—			(6,664	)	Net income
Unrealized gains (losses) on securities:
		(779	)		(24,553	)		(4,567	)	Financing operations
		(27,275	)		(3,572	)		(25,247	)	Foreign exchange gain (loss), net
		(6,185	)		(31,685	)		(1,993	)	Other income (loss), net
		(34,239	)		(59,810	)		(31,807	)	Income before income taxes and equity in earnings of affiliated companies
		9,832			23,275			9,729		Provision for income taxes
		3,896			(320	)		20		Equity in earnings of affiliated companies
		(20,511	)		(36,855	)		(22,058	)	Net income
Pension liability adjustments:
Recognized net actuarial loss		12,971			19,432			12,914		*1
Amortization of prior service costs		(4,234	)		(3,804	)		(3,913	)	*1
		8,737			15,628			9,001		Income before income taxes and equity in earnings of affiliated companies
		(3,318	)		(5,255	)		(2,500	)	Provision for income taxes
		5,419			10,373			6,501		Net income
Total reclassifications, net of tax		12,960			(26,482	)		(22,221	)

Amounts of reclassifications in parentheses indicate gains in the consolidated statements of income.

*1: These components are included in the computation of net periodic pension cost. See note 20 to the consolidated financial statements for additional information.

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Stock-based compensation (Tables)

12 Months Ended

Mar. 31, 2018

Summary of Toyota's Stock Option Activity

The following table summarizes Toyota’s stock option activity:

				Yen				Yen in millions
	Number of shares			Weighted- average exercise price		Weighted- average remaining contractual life in years		Aggregate intrinsic value
Options outstanding at March 31, 2015		3,503,500			4,632		2.05		13,143
Granted		—			—
Exercised		(936,400	)		5,049
Canceled		(473,600	)		6,917
Options outstanding at March 31, 2016		2,093,500			3,858		1.56		4,384
Granted		—			—
Exercised		(785,600	)		4,006
Canceled		(115,600	)		4,682
Options outstanding at March 31, 2017		1,192,300			3,682		0.80		2,813
Granted		—			—
Exercised		(643,800	)		3,726
Canceled		(264,900	)		4,154
Options outstanding at March 31, 2018		283,600			3,153		0.33		1,041
Options exercisable at March 31, 2016		2,093,500			3,858		1.56		4,384
Options exercisable at March 31, 2017		1,192,300			3,682		0.80		2,813
Options exercisable at March 31, 2018		283,600			3,153		0.33		1,041

Summary of Options Outstanding and Options Exercisable

The following table summarizes information for options outstanding and options exercisable at March 31, 2018:

Outstanding					Exercisable
Number of shares	Exercise price		Remaining life		Number of shares		Exercise price
	Yen		Years				Yen
283,600		3,153		0.33		283,600		3,153

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Employee benefit plans (Tables)

12 Months Ended

Mar. 31, 2018

Information Regarding Defined Benefit Plans

Information regarding Toyota’s defined benefit plans is as follows:

	Yen in millions
	March 31,
	Japanese plans						Foreign plans
	2017			2018			2017			2018
Change in benefit obligation
Benefit obligation at beginning of year		1,912,156			1,930,498			963,255			1,026,024
Service cost		89,443			88,964			41,733			35,887
Interest cost		8,800			13,252			35,593			37,817
Plan participants’ contributions		923			1,266			436			912
Plan amendments		(21	)		(58	)		(996	)		(12	)
Net actuarial (gain) loss		(45,783	)		35,017			22,220			66,039
Acquisition and other		30,622			18,206			(18,778	)		(26,616	)
Benefits paid		(65,642	)		(67,835	)		(17,439	)		(42,070	)
Benefit obligation at end of year		1,930,498			2,019,310			1,026,024			1,097,981
Change in plan assets
Fair value of plan assets at beginning of year		1,369,236			1,483,889			692,801			758,306
Actual return on plan assets		81,600			111,278			74,760			89,924
Acquisition and other		30,266			14,615			(11,960	)		(16,009	)
Employer contributions		39,692			42,095			15,925			20,961
Plan participants’ contributions		923			1,266			436			912
Benefits paid		(37,828	)		(40,264	)		(13,656	)		(38,611	)
Fair value of plan assets at end of year		1,483,889			1,612,879			758,306			815,483
Funded status		446,609			406,431			267,718			282,498

Amounts Recognized in Consolidated Balance Sheet Associated with Defined Benefit Plans

Amounts recognized in the consolidated balance sheets as of March 31, 2017 and 2018 are comprised of the following:

	Yen in millions
	March 31,
	Japanese plans						Foreign plans
	2017			2018			2017			2018
Accrued expenses (Accrued pension and severance costs)		28,265			27,718			2,936			2,982
Accrued pension and severance costs		633,774			647,134			271,296			284,048
Investments and other assets - Other (Prepaid pension and severance costs)		(215,430	)		(268,421	)		(6,514	)		(4,532	)
Net amount recognized		446,609			406,431			267,718			282,498

Amounts Recognized in Accumulated Other Comprehensive Income (Loss)

Amounts recognized in accumulated other comprehensive income (loss) as of March 31, 2017 and 2018 are comprised of the following:

	Yen in millions
	March 31,
	Japanese plans						Foreign plans
	2017			2018			2017			2018
Net actuarial loss		(288,126	)		(248,791	)		(116,700	)		(119,407	)
Prior service costs		36,980			32,812			(2,151	)		(1,826	)
Net transition obligation		—			—			—			—
Net amount recognized		(251,146	)		(215,979	)		(118,851	)		(121,233	)

Projected Benefit Obligation, Accumulated Benefit Obligation and Fair Value of Plan Assets for which Accumulated Benefit Obligations Exceed Plan Assets

The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for which the accumulated benefit obligations exceed plan assets are as follows:

	Yen in millions
	March 31,
	Japanese plans				Foreign plans
	2017		2018		2017		2018
Projected benefit obligation		892,684		833,080		445,482		490,844
Accumulated benefit obligation		866,566		806,774		426,201		468,611
Fair value of plan assets		242,488		170,234		178,357		201,402

Components of Net Periodic Pension Cost

Components of the net periodic pension cost are as follows:

	Yen in millions
	For the years ended March 31,
	Japanese plans									Foreign plans
	2016			2017			2018			2016			2017			2018
Service cost		78,611			89,443			88,964			47,544			41,733			35,887
Interest cost		17,509			8,800			13,252			40,340			35,593			37,817
Expected return on plan assets		(35,012	)		(33,524	)		(36,409	)		(44,616	)		(38,893	)		(41,048	)
Amortization of prior service costs		(4,669	)		(4,148	)		(4,226	)		435			344			313
Recognized net actuarial loss		5,850			14,298			7,462			7,121			5,134			5,452
Amortization of net transition obligation		—			—			—			—			—			—
Net periodic pension cost		62,289			74,869			69,043			50,824			43,911			38,421

Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss)

Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) are as follows:

	Yen in millions
	For the years ended March 31,
	Japanese plans									Foreign plans
	2016			2017			2018			2016			2017		2018
Net actuarial gain (loss)		(290,664	)		93,859			39,852			(11,242	)		13,647		(17,163	)
Recognized net actuarial loss		5,850			14,298			7,462			7,121			5,134		5,452
Prior service costs		489			21			58			573			996		12
Amortization of prior service costs		(4,669	)		(4,148	)		(4,226	)		435			344		313
Amortization of net transition obligation		—			—			—			—			—		—
Other		76			811			(7,979	)		272			1,962		9,004
Total recognized in other comprehensive income (loss)		(288,918	)		104,841			35,167			(2,841	)		22,083		(2,382	)

Weighted-Average Assumptions Used to Determine Benefit Obligations and Net Periodic Pension Cost

Weighted-average assumptions used to determine benefit obligations as of March 31, 2017 and 2018 are as follows:

	March 31,
	Japanese plans						Foreign plans
	2017			2018			2017			2018
Discount rate		0.7	%		0.7	%		4.0	%		3.9	%
Rate of compensation increase		2.9	%		3.3	%		3.8	%		3.6	%

Weighted-average assumptions used to determine net periodic pension cost for the years ended March 31, 2016, 2017 and 2018 are as follows:

	For the years ended March 31,
	Japanese plans									Foreign plans
	2016			2017			2018			2016			2017			2018
Discount rate		1.1	%		0.5	%		0.7	%		4.0	%		4.2	%		4.0	%
Expected return on plan assets		2.5	%		2.4	%		2.4	%		6.3	%		6.1	%		6.0	%
Rate of compensation increase		2.5	%		2.7	%		2.9	%		4.4	%		3.9	%		3.8	%

Summary of Fair Value of Classes of Plan Assets

The following table summarizes the fair value of classes of plan assets as of March 31, 2017 and 2018. See note 27 to the consolidated financial statements for three levels of input which are used to measure fair value.

Japanese plans

	Yen in millions
	March 31, 2017
	Level 1		Level 2		Level 3		Total
Equity securities
Common stocks		585,052		—		—		585,052
Commingled funds		—		180,835		—		180,835
		585,052		180,835		—		765,887
Debt securities
Government bonds		87,958		—		—		87,958
Commingled funds		—		248,498		—		248,498
Other		—		39,754		81		39,835
		87,958		288,252		81		376,291
Insurance contracts		—		199,779		—		199,779
Other		42,083		34,131		496		76,710
Investments measured at net asset value		—		—		—		65,222
Total		715,093		702,997		577		1,483,889

	Yen in millions
	March 31, 2018
	Level 1		Level 2		Level 3		Total
Equity securities
Common stocks		620,281		—		—		620,281
Commingled funds		—		202,816		—		202,816
		620,281		202,816		—		823,097
Debt securities
Government bonds		88,959		—		—		88,959
Commingled funds		—		284,870		—		284,870
Other		—		36,567		19		36,586
		88,959		321,437		19		410,415
Insurance contracts		—		201,141		—		201,141
Other		41,446		61,301		—		102,747
Investments measured at net asset value		—		—		—		75,479
Total		750,686		786,695		19		1,612,879

Foreign plans

	Yen in millions
	March 31, 2017
	Level 1		Level 2		Level 3		Total
Equity securities
Common stocks		207,036		—		—		207,036
Commingled funds		—		152,104		—		152,104
		207,036		152,104		—		359,140
Debt securities
Government bonds		76,730		—		—		76,730
Commingled funds		—		36,430		—		36,430
Other		—		33,430		—		33,430
		76,730		69,860		—		146,590
Insurance contracts		—		—		—		—
Other		13,533		13,851		30,903		58,287
Investments measured at net asset value		—		—		—		194,289
Total		297,299		235,815		30,903		758,306

	Yen in millions
	March 31, 2018
	Level 1		Level 2		Level 3		Total
Equity securities
Common stocks		178,476		—		—		178,476
Commingled funds		—		197,566		—		197,566
		178,476		197,566		—		376,042
Debt securities
Government bonds		89,928		—		—		89,928
Commingled funds		—		11,642		—		11,642
Other		—		35,032		—		35,032
		89,928		46,674		—		136,602
Insurance contracts		—		—		—		—
Other		12,487		18,107		31,288		61,882
Investments measured at net asset value		—		—		—		240,957
Total		280,891		262,347		31,288		815,483

Changes in Level 3 Plan Assets Measured At Fair Value

The following tables summarize the changes in Level 3 plan assets measured at fair value for the years ended March 31, 2016, 2017 and 2018:

Japanese plans

	Yen in millions
	For the years ended March 31,
	2016									2017									2018
	Debt securities			Other			Total			Debt securities			Other			Total			Debt securities			Other			Total
Balance at beginning of year		233			1,018			1,251			146			2,518			2,664			81			496			577
Actual return on plan assets		1			(3	)		(2	)		—			(11	)		(11	)		—			(4	)		(4	)
Purchases, sales and settlements		(88	)		1,503			1,415			(65	)		(2,011	)		(2,076	)		(62	)		(492	)		(554	)
Other		—			—			—			—			—			—			—			—			—
Balance at end of year		146			2,518			2,664			81			496			577			19			—			19

Foreign plans

	Yen in millions
	For the years ended March 31,
	2016			2017			2018
	Other			Other			Other
Balance at beginning of year		17,511			30,758			30,903
Actual return on plan assets		1,966			279			2,024
Purchases, sales and settlements		12,372			—			—
Other		(1,091	)		(134	)		(1,639	)
Balance at end of year		30,758			30,903			31,288

Expected Benefit Payments Associated with Pension and Postretirement Benefit Plans

The following pension benefit payments, which reflect expected future service, as appropriate, are expected to be paid:

	Yen in millions
Years ending March 31,	Japanese plans		Foreign plans
2019		72,756		21,972
2020		73,891		23,700
2021		74,890		25,089
2022		78,254		26,724
2023		82,433		28,552
from 2024 to 2028		429,821		167,337
Total		812,045		293,374

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Derivative financial instruments (Tables)

12 Months Ended

Mar. 31, 2018

Fair Values of Derivative Financial Instruments

The following table summarizes the fair values of derivative financial instruments as of March 31, 2017 and 2018:

	Yen in millions
	March 31,
	2017			2018
Derivative assets
Derivative financial instruments designated as hedging instruments
Interest rate and currency swap agreements
Prepaid expenses and other current assets		—			154
Investments and other assets - Other		662			668
Total		662			822
Undesignated derivative financial instruments
Interest rate and currency swap agreements
Prepaid expenses and other current assets		61,946			46,425
Investments and other assets - Other		168,292			175,635
Total		230,238			222,060
Foreign exchange forward and option contracts
Prepaid expenses and other current assets		12,357			34,922
Investments and other assets - Other		164			—
Total		12,521			34,922
Total derivative assets		243,421			257,804
Counterparty netting		(84,883	)		(97,617	)
Collateral received		(60,021	)		(92,146	)
Carrying value of derivative assets		98,517			68,041
Derivative liabilities
Derivative financial instruments designated as hedging instruments
Interest rate and currency swap agreements
Other current liabilities		(64	)		—
Other long-term liabilities		—			—
Total		(64	)		—
Undesignated derivative financial instruments
Interest rate and currency swap agreements
Other current liabilities		(67,091	)		(34,716	)
Other long-term liabilities		(158,383	)		(158,830	)
Total		(225,474	)		(193,546	)
Foreign exchange forward and option contracts
Other current liabilities		(19,919	)		(3,610	)
Other long-term liabilities		—			—
Total		(19,919	)		(3,610	)
Total derivative liabilities		(245,457	)		(197,156	)
Counterparty netting		84,883			97,617
Collateral posted		122,231			55,650
Carrying value of derivative liabilities		(38,343	)		(43,889	)

Notional Amounts of Derivative Financial Instruments

The following table summarizes the notional amounts of derivative financial instruments as of March 31, 2017 and 2018:

	Yen in millions
	March 31,
	2017				2018
	Designated derivative financial instruments		Undesignated derivative financial instruments		Designated derivative financial instruments		Undesignated derivative financial instruments
Interest rate and currency swap agreements		40,837		19,459,677		12,643		19,895,085
Foreign exchange forward and option contracts		—		2,772,741		—		2,731,534
Total		40,837		22,232,418		12,643		22,626,619

Gains and Losses on Derivative Financial Instruments and Hedged Items Reported in Consolidated Statement of Income

The following table summarizes the gains and losses on derivative financial instruments and hedged items reported in the consolidated statements of income for the years ended March 31, 2016, 2017 and 2018:

	Yen in millions
	For the years ended March 31,
	2016					2017					2018
	Gains or (losses) on derivative financial instruments			Gains or (losses) on hedged items		Gains or (losses) on derivative financial instruments			Gains or (losses) on hedged items		Gains or (losses) on derivative financial instruments		Gains or (losses) on hedged items
Derivative financial instruments designated as hedging instruments
Interest rate and currency swap agreements
Cost of financing operations		(133	)		122		(339	)		1,212		782		(227	)
Undesignated derivative financial instruments
Interest rate and currency swap agreements
Cost of financing operations		119,096					(61,884	)				42,220
Foreign exchange gain (loss), net		(379	)				12,516					30,339
Foreign exchange forward and option contracts
Cost of financing operations		(16,363	)				2,614					6,442
Foreign exchange gain (loss), net		115,256					81,614					73,115

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Other financial instruments (Tables)

12 Months Ended

Mar. 31, 2018

Estimated Fair Value of Toyota's Financial Instrument, Excluding Marketable Securities, Other Securities Investments, Investments and Other Assets in Affiliated Companies and Derivative Financial Instruments

The following table summarizes the estimated fair values of Toyota’s financial instruments, excluding marketable securities, other securities investments, investments and other assets in affiliated companies and derivative financial instruments. See note 27 to the consolidated financial statements for three levels of input which are used to measure fair value.

	Yen in millions
	March 31, 2017
				Estimated fair value
	Carrying amount			Level 1		Level 2			Level 3			Total
Assets (Liabilities)
Cash and cash equivalents		2,995,075			2,103,469		891,606			—			2,995,075
Time deposits		1,082,654			—		1,082,654			—			1,082,654
Total finance receivables, net		14,064,660			—		—			14,226,440			14,226,440
Other receivables		436,867			—		—			436,867			436,867
Short-term borrowings		(4,953,682	)		—		(4,953,682	)		—			(4,953,682	)
Long-term debt including the current portion		(14,179,796	)		—		(12,241,617	)		(2,065,884	)		(14,307,501	)

	Yen in millions
	March 31, 2018
				Estimated fair value
	Carrying amount			Level 1		Level 2			Level 3			Total
Assets (Liabilities)
Cash and cash equivalents		3,052,269			2,278,060		774,209			—			3,052,269
Time deposits		901,244			—		901,244			—			901,244
Total finance receivables, net		14,508,614			—		—			14,615,409			14,615,409
Other receivables		489,338			—		—			489,338			489,338
Short-term borrowings		(5,154,913	)		—		(5,154,913	)		—			(5,154,913	)
Long-term debt including the current portion		(14,172,025	)		—		(12,265,260	)		(1,940,888	)		(14,206,148	)

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Lease commitments (Tables)

12 Months Ended

Mar. 31, 2018

Analysis of Leased Assets Under Capital Leases

An analysis of leased assets under capital leases is as follows:

	Yen in millions
	March 31,
	2017			2018
Class of property
Building		18,775			17,934
Machinery and equipment		29,630			31,217
Less - Accumulated depreciation		(28,703	)		(30,853	)
		19,702			18,298

Future Minimum Lease Payments Under Capital Leases Together with Present Value of Net Minimum Lease Payments

Future minimum lease payments under capital leases together with the present value of the net minimum lease payments as of March 31, 2018 are as follows:

Years ending March 31,	Yen in millions
2019		6,645
2020		3,892
2021		2,276
2022		1,921
2023		1,801
Thereafter		8,933
Total minimum lease payments		25,468
Less - Amount representing interest		(4,842	)
Present value of net minimum lease payments		20,626
Less - Current obligations		(5,796	)
Long-term capital lease obligations		14,830

Minimum Rental Payments Required Under Operating Leases Relating to Land, Buildings and Equipment

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 March 31, 2018 are as follows:

Years ending March 31,	Yen in millions
2019		14,296
2020		11,375
2021		9,422
2022		8,403
2023		7,247
Thereafter		26,106
Total minimum future rentals		76,849

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Segment data (Tables)

12 Months Ended

Mar. 31, 2018

Segment Operating Results and Assets

Segment operating results and assets -

As of and for the year ended March 31, 2016:

	Yen in millions
	Automotive		Financial Services		All Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		25,923,813		1,854,007		625,298		—			28,403,118
Inter-segment sales and transfers		53,603		42,217		552,089		(647,909	)		—
Total		25,977,416		1,896,224		1,177,387		(647,909	)		28,403,118
Operating expenses		23,528,418		1,556,998		1,110,880		(647,149	)		25,549,147
Operating income		2,448,998		339,226		66,507		(760	)		2,853,971
Assets		15,621,757		21,709,010		1,917,148		8,179,682			47,427,597
Investment in equity method investees		2,532,644		9,168		10,801		78,776			2,631,389
Depreciation expenses		900,434		697,991		27,412		—			1,625,837
Capital expenditure		1,389,289		2,638,111		41,826		(10,010	)		4,059,216

As of and for the year ended March 31, 2017:

	Yen in millions
	Automotive		Financial Services		All Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		25,032,229		1,783,697		781,267		—			27,597,193
Inter-segment sales and transfers		49,618		39,903		539,785		(629,306	)		—
Total		25,081,847		1,823,600		1,321,052		(629,306	)		27,597,193
Operating expenses		23,388,874		1,601,172		1,239,725		(626,950	)		25,602,821
Operating income		1,692,973		222,428		81,327		(2,356	)		1,994,372
Assets		16,156,496		22,507,613		2,170,498		7,915,579			48,750,186
Investment in equity method investees		2,745,437		9,792		—		90,193			2,845,422
Depreciation expenses		912,797		671,155		26,998		—			1,610,950
Capital expenditure		1,293,564		2,182,149		53,710		12,014			3,541,437

As of and for the year ended March 31, 2018:

	Yen in millions
	Automotive		Financial Services		All Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		26,347,229		1,959,234		1,073,047		—			29,379,510
Inter-segment sales and transfers		50,711		57,774		573,071		(681,556	)		—
Total		26,397,940		2,017,008		1,646,118		(681,556	)		29,379,510
Operating expenses		24,386,805		1,731,462		1,545,306		(683,925	)		26,979,648
Operating income		2,011,135		285,546		100,812		2,369			2,399,862
Assets		17,054,209		23,055,981		2,178,118		8,019,941			50,308,249
Investment in equity method investees		3,054,583		11,713		—		96,415			3,162,711
Depreciation expenses		976,735		723,061		34,237		—			1,734,033
Capital expenditure		1,381,122		2,166,805		62,447		(11,667	)		3,598,707

Geographic Information

Geographic information -

As of and for the year ended March 31, 2016:

	Yen in millions
	Japan		North America		Europe		Asia		Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		8,588,437		10,822,772		2,507,292		4,475,623		2,008,994		—			28,403,118
Inter-segment sales and transfers		6,171,051		229,198		154,039		528,236		201,220		(7,283,744	)		—
Total		14,759,488		11,051,970		2,661,331		5,003,859		2,210,214		(7,283,744	)		28,403,118
Operating expenses		13,081,966		10,523,151		2,588,915		4,554,670		2,101,305		(7,300,860	)		25,549,147
Operating income		1,677,522		528,819		72,416		449,189		108,909		17,116			2,853,971
Assets		14,291,434		16,622,979		2,612,210		4,415,700		2,579,113		6,906,161			47,427,597
Long-lived assets		3,210,376		4,958,989		309,657		869,989		391,406		—			9,740,417

As of and for the year ended March 31, 2017:

	Yen in millions
	Japan		North America		Europe			Asia		Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		8,798,903		10,033,419		2,517,601			4,279,617		1,967,653		—			27,597,193
Inter-segment sales and transfers		6,031,965		205,672		163,438			540,204		193,421		(7,134,700	)		—
Total		14,830,868		10,239,091		2,681,039			4,819,821		2,161,074		(7,134,700	)		27,597,193
Operating expenses		13,628,623		9,927,897		2,693,283			4,384,642		2,102,380		(7,134,004	)		25,602,821
Operating income (loss)		1,202,245		311,194		(12,244	)		435,179		58,694		(696	)		1,994,372
Assets		14,791,969		17,365,237		2,846,469			4,486,021		2,819,935		6,440,555			48,750,186
Long-lived assets		3,376,157		5,274,928		313,182			828,619		404,223		—			10,197,109

As of and for the year ended March 31, 2018:

	Yen in millions
	Japan		North America		Europe		Asia		Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		9,273,672		10,347,266		2,940,243		4,497,374		2,320,955		—			29,379,510
Inter-segment sales and transfers		6,751,172		227,144		244,981		650,765		132,344		(8,006,406	)		—
Total		16,024,844		10,574,410		3,185,224		5,148,139		2,453,299		(8,006,406	)		29,379,510
Operating expenses		14,364,926		10,435,511		3,110,198		4,714,940		2,340,636		(7,986,563	)		26,979,648
Operating income		1,659,918		138,899		75,026		433,199		112,663		(19,843	)		2,399,862
Assets		15,797,024		16,936,704		3,346,179		4,893,582		2,986,661		6,348,099			50,308,249
Long-lived assets		3,511,663		5,179,139		359,355		797,435		420,081		—			10,267,673

Revenues that are Attributed to Countries Based on Location of Customers, Excluding Customers in Japan

The following information shows revenues that are attributed to countries based on location of customers, excluding customers in Japan. In addition to the disclosure requirements under U.S.GAAP, Toyota discloses this information in order to provide financial statements users with valuable information.

	Yen in millions
	For the years ended March 31,
	2016		2017		2018
North America		10,797,304		10,054,431		10,403,647
Europe		2,323,399		2,341,364		2,730,915
Asia		4,292,800		4,414,236		4,793,110
Other		4,724,784		3,923,621		4,186,666

Balance Sheets - Non-financial Services and Financial Services Businesses

The financial data below presents separately Toyota’s non-financial services and financial services businesses.

Balance sheets -

	Yen in millions
	March 31,
	2017			2018
Assets
Non-Financial Services Businesses
Current assets
Cash and cash equivalents		2,257,064			2,390,524
Marketable securities		1,439,944			1,546,459
Trade accounts and notes receivable, less allowance for doubtful accounts		2,191,594			2,304,676
Inventories		2,388,394			2,539,497
Prepaid expenses and other current assets		1,988,016			1,818,687
Total current assets		10,265,012			10,599,843
Investments and other assets		11,276,128			11,861,394
Property, plant and equipment		5,700,818			5,901,958
Total Non-Financial Services Businesses assets		27,241,958			28,363,195
Financial Services Business
Current assets
Cash and cash equivalents		738,011			661,745
Marketable securities		381,654			221,901
Finance receivables, net		6,196,649			6,348,306
Prepaid expenses and other current assets		831,924			957,122
Total current assets		8,148,238			8,189,074
Noncurrent finance receivables, net		9,012,222			9,481,618
Investments and other assets		850,862			1,019,574
Property, plant and equipment		4,496,291			4,365,715
Total Financial Services Business assets		22,507,613			23,055,981
Eliminations		(999,385	)		(1,110,927	)
Total assets		48,750,186			50,308,249

Assets in the non-financial services include unallocated corporate assets.

	Yen in millions
	March 31,
	2017			2018
Liabilities
Non-Financial Services Businesses
Current liabilities
Short-term borrowings		669,947			541,968
Current portion of long-term debt		196,227			179,994
Accounts payable		2,540,078			2,556,393
Accrued expenses		3,038,218			2,980,981
Income taxes payable		203,101			429,616
Other current liabilities		1,512,662			1,797,724
Total current liabilities		8,160,233			8,486,676
Long-term liabilities
Long-term debt		590,366			642,691
Accrued pension and severance costs		890,684			917,133
Other long-term liabilities		1,206,427			1,111,843
Total long-term liabilities		2,687,477			2,671,667
Total Non-Financial Services Businesses liabilities		10,847,710			11,158,343
Financial Services Business
Current liabilities
Short-term borrowings		4,605,389			4,929,478
Current portion of long-term debt		4,129,005			4,053,538
Accounts payable		33,283			40,251
Accrued expenses		117,773			145,127
Income taxes payable		20,473			32,711
Other current liabilities		833,813			870,634
Total current liabilities		9,739,736			10,071,739
Long-term liabilities
Long-term debt		9,491,504			9,574,118
Accrued pension and severance costs		14,386			14,049
Other long-term liabilities		987,289			678,858
Total long-term liabilities		10,493,179			10,267,025
Total Financial Services Business liabilities		20,232,915			20,338,764
Eliminations		(999,392	)		(1,110,934	)
Total liabilities		30,081,233			30,386,173
Mezzanine equity		485,877			491,974
Total Toyota Motor Corporation shareholders’ equity		17,514,812			18,735,982
Noncontrolling interests		668,264			694,120
Total shareholders’ equity		18,183,076			19,430,102
Total liabilities, mezzanine equity and shareholders’ equity		48,750,186			50,308,249

Statements of Income - Non-financial Services and Financial Services Businesses

Statements of income -

	Yen in millions
	For the years ended March 31,
	2016			2017			2018
Non-Financial Services Businesses
Net revenues		26,581,102			25,845,453			27,448,165
Costs and expenses
Cost of revenues		21,474,386			21,557,194			22,613,450
Selling, general and administrative		2,589,082			2,511,647			2,721,362
Total costs and expenses		24,063,468			24,068,841			25,334,812
Operating income		2,517,634			1,776,612			2,113,353
Other income (expense), net		117,930			200,370			222,326
Income before income taxes and equity in earnings of affiliated companies		2,635,564			1,976,982			2,335,679
Provision for income taxes		752,248			562,452			738,763
Equity in earnings of affiliated companies		327,167			360,130			467,718
Net income		2,210,483			1,774,660			2,064,634
Less - Net income attributable to noncontrolling interests		(117,544	)		(89,337	)		(89,533	)
Net income attributable to Toyota Motor Corporation - Non-Financial Services Businesses		2,092,939			1,685,323			1,975,101
Financial Services Business
Net revenues		1,896,224			1,823,600			2,017,008
Costs and expenses
Cost of revenues		1,181,437			1,221,268			1,320,348
Selling, general and administrative		375,561			379,904			411,114
Total costs and expenses		1,556,998			1,601,172			1,731,462
Operating income		339,226			222,428			285,546
Other income (expense), net		8,579			(5,618	)		(794	)
Income before income taxes and equity in earnings of affiliated companies		347,805			216,810			284,752
Provision for income taxes		126,319			66,583			(234,356	)
Equity in earnings of affiliated companies		1,932			1,930			2,365
Net income		223,418			152,157			521,473
Less - Net income attributable to noncontrolling interests		(3,963	)		(6,518	)		(2,589	)
Net income attributable to Toyota Motor Corporation - Financial Services Business		219,455			145,639			518,884
Eliminations		300			147			(2	)
Net income attributable to Toyota Motor Corporation		2,312,694			1,831,109			2,493,983

Statement of Cash Flows - Non-financial Services and Financial Services Businesses

Statements of cash flows -

	Yen in millions									Yen in millions
	For the year ended March 31, 2016									For the year ended March 31, 2017
	Non-Financial Services Businesses			Financial Services Business			Consolidated			Non-Financial Services Businesses			Financial Services Business			Consolidated
Cash flows from operating activities
Net income		2,210,483			223,418			2,434,211			1,774,660			152,157			1,926,985
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		927,846			697,991			1,625,837			939,795			671,155			1,610,950
Provision for doubtful accounts and credit losses		69,029			90,236			159,265			6,519			92,147			98,666
Pension and severance costs, less payments		8,300			533			8,833			21,796			1,457			23,253
Losses on disposal of fixed assets		33,293			36			33,329			30,461			212			30,673
Unrealized losses on available-for-sale securities, net		3,217			6,055			9,272			4,422			2,651			7,073
Deferred income taxes		(43,237	)		76,423			32,889			(59,668	)		6,504			(53,299	)
Equity in earnings of affiliated companies		(327,167	)		(1,932	)		(329,099	)		(360,130	)		(1,930	)		(362,060	)
Changes in operating assets and liabilities, and other		386,529			148,376			486,320			206,455			103,840			131,996
Net cash provided by operating activities		3,268,293			1,241,136			4,460,857			2,564,310			1,028,193			3,414,237
Cash flows from investing activities
Additions to finance receivables		—			(23,399,113	)		(13,549,278	)		—			(22,894,114	)		(13,636,694	)
Collection of and proceeds from sales of finance receivables		—			22,918,132			13,115,854			—			22,006,010			12,927,981
Additions to fixed assets excluding equipment leased to others		(1,265,174	)		(17,371	)		(1,282,545	)		(1,206,738	)		(17,140	)		(1,223,878	)
Additions to equipment leased to others		(155,931	)		(2,620,740	)		(2,776,671	)		(152,550	)		(2,165,009	)		(2,317,559	)
Proceeds from sales of fixed assets excluding equipment leased to others		41,154			993			42,147			40,189			1,049			41,238
Proceeds from sales of equipment leased to others		60,989			1,050,738			1,111,727			72,659			1,165,619			1,238,278
Purchases of marketable securities and security investments		(1,302,965	)		(894,512	)		(2,197,477	)		(2,104,202	)		(412,806	)		(2,517,008	)
Proceeds from sales of and maturity of marketable securities and security investments		2,471,876			943,939			3,415,815			1,435,267			466,274			1,901,541
Payment for additional investments in affiliated companies, net of cash acquired		628			—			628			44,274			—			44,274
Changes in investments and other assets, and other		(1,371,996	)		296,788			(1,062,744	)		582,649			(60,345	)		571,888
Net cash used in investing activities		(1,521,419	)		(1,721,146	)		(3,182,544	)		(1,288,452	)		(1,910,462	)		(2,969,939	)
Cash flows from financing activities
Proceeds from issuance of long-term debt		110,691			4,815,323			4,845,872			111,727			4,541,541			4,603,446
Payments of long-term debt		(71,758	)		(4,127,178	)		(4,176,202	)		(82,840	)		(3,773,644	)		(3,845,554	)
Increase (decrease) in short-term borrowings		75,990			(132,852	)		(10,903	)		51,523			233,331			273,037
Proceeds from issuance of class shares		474,917			—			474,917			—			—			—
Dividends paid to Toyota Motor Corporation class shareholders		(1,225	)		—			(1,225	)		(3,697	)		—			(3,697	)
Dividends paid to Toyota Motor Corporation common shareholders		(704,728	)		—			(704,728	)		(634,475	)		—			(634,475	)
Dividends paid to noncontrolling interests		(73,129	)		—			(73,129	)		(63,936	)		—			(63,936	)
Reissuance (repurchase) of treasury stock, and other		(778,173	)		—			(778,173	)		(703,986	)		—			(703,986	)
Net cash provided by (used in) financing activities		(967,415	)		555,293			(423,571	)		(1,325,684	)		1,001,228			(375,165	)
Effect of exchange rate changes on cash and cash equivalents		(142,301	)		(57,570	)		(199,871	)		(11,262	)		(2,224	)		(13,486	)
Net increase (decrease) in cash and cash equivalents		637,158			17,713			654,871			(61,088	)		116,735			55,647
Cash and cash equivalents at beginning of year		1,680,994			603,563			2,284,557			2,318,152			621,276			2,939,428
Cash and cash equivalents at end of year		2,318,152			621,276			2,939,428			2,257,064			738,011			2,995,075

	Yen in millions
	For the year ended March 31, 2018
	Non-Financial Services Businesses			Financial Services Business			Consolidated
Cash flows from operating activities
Net income		2,064,634			521,473			2,586,106
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		1,010,972			723,061			1,734,033
Provision for doubtful accounts and credit losses		(74	)		76,143			76,069
Pension and severance costs, less payments		5,027			(741	)		4,286
Losses on disposal of fixed assets		35,010			279			35,289
Unrealized losses on available-for-sale securities, net		459			387			846
Deferred income taxes		64,143			(302,103	)		(237,961	)
Equity in earnings of affiliated companies		(467,718	)		(2,365	)		(470,083	)
Changes in operating assets and liabilities, and other		205,434			299,709			481,424
Net cash provided by operating activities		2,917,887			1,315,843			4,210,009
Cash flows from investing activities
Additions to finance receivables		—			(25,153,088	)		(15,058,516	)
Collection of and proceeds from sales of finance receivables		—			24,117,335			14,046,312
Additions to fixed assets excluding equipment leased to others		(1,276,788	)		(14,329	)		(1,291,117	)
Additions to equipment leased to others		(155,114	)		(2,152,476	)		(2,307,590	)
Proceeds from sales of fixed assets excluding equipment leased to others		70,755			1,065			71,820
Proceeds from sales of equipment leased to others		63,402			1,147,870			1,211,272
Purchases of marketable securities and security investments		(2,273,805	)		(779,111	)		(3,052,916	)
Proceeds from sales of and maturity of marketable securities and security investments		1,762,189			761,349			2,523,538
Payment for additional investments in affiliated companies, net of cash acquired		(576	)		—			(576	)
Changes in investments and other assets, and other		260,015			(106,597	)		197,681
Net cash used in investing activities		(1,549,922	)		(2,177,982	)		(3,660,092	)
Cash flows from financing activities
Proceeds from issuance of long-term debt		212,387			4,666,579			4,793,939
Payments of long-term debt		(170,072	)		(4,314,294	)		(4,452,338	)
Increase (decrease) in short-term borrowings		(122,222	)		461,052			347,738
Proceeds from issuance of class shares		—			—			—
Dividends paid to Toyota Motor Corporation class shareholders		(6,194	)		—			(6,194	)
Dividends paid to Toyota Motor Corporation common shareholders		(620,698	)		—			(620,698	)
Dividends paid to noncontrolling interests		(63,764	)		—			(63,764	)
Reissuance (repurchase) of treasury stock, and other		(447,818	)		—			(447,818	)
Net cash provided by (used in) financing activities		(1,218,381	)		813,337			(449,135	)
Effect of exchange rate changes on cash and cash equivalents		(16,124	)		(27,464	)		(43,588	)
Net increase (decrease) in cash and cash equivalents		133,460			(76,266	)		57,194
Cash and cash equivalents at beginning of year		2,257,064			738,011			2,995,075
Cash and cash equivalents at end of year		2,390,524			661,745			3,052,269

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Per share amounts (Tables)

12 Months Ended

Mar. 31, 2018

Reconciliations of Differences Between Basic and Diluted Net Income Attributable to Toyota Motor Corporation Per Common Share

Reconciliations of the differences between basic and diluted net income attributable to Toyota Motor Corporation per common share for the years ended March 31, 2016, 2017 and 2018 are as follows:

	Yen in millions			Thousands of shares		Yen
	Net income attributable to Toyota Motor Corporation			Weighted- average common shares		Net income attributable to Toyota Motor Corporation per common share
For the year ended March 31, 2016
Net income attributable to Toyota Motor Corporation		2,312,694
Accretion to Mezzanine equity		(3,638	)
Dividends to Toyota Motor Corporation Model AA Class Shareholders		(2,449	)
Basic net income attributable to Toyota Motor Corporation per common share		2,306,607			3,111,306		741.36
Effect of dilutive securities
Model AA Class Shares		6,087			32,429
Assumed exercise of dilutive stock options		(21	)		1,212
Diluted net income attributable to Toyota Motor Corporation per common share		2,312,673			3,144,947		735.36
For the year ended March 31, 2017
Net income attributable to Toyota Motor Corporation		1,831,109
Accretion to Mezzanine equity		(4,849	)
Dividends to Toyota Motor Corporation Model AA Class Shareholders		(4,946	)
Basic net income attributable to Toyota Motor Corporation per common share		1,821,314			3,008,088		605.47
Effect of dilutive securities
Model AA Class Shares		9,795			47,100
Assumed exercise of dilutive stock options		(6	)		638
Diluted net income attributable to Toyota Motor Corporation per common share		1,831,103			3,055,826		599.22
For the year ended March 31, 2018
Net income attributable to Toyota Motor Corporation		2,493,983
Accretion to Mezzanine equity		(4,849	)
Dividends to Toyota Motor Corporation Model AA Class Shareholders		(7,442	)
Basic net income attributable to Toyota Motor Corporation per common share		2,481,692			2,947,365		842.00
Effect of dilutive securities
Model AA Class Shares		12,291			47,100
Assumed exercise of dilutive stock options		(4	)		301
Diluted net income attributable to Toyota Motor Corporation per common share		2,493,979			2,994,766		832.78

Toyota Motor Corporation Shareholders' Equity Per Share

The following table shows Toyota Motor Corporation shareholders’ equity per share as of March 31, 2017 and 2018. Toyota Motor Corporation shareholders’ equity per share amounts are calculated by dividing Toyota Motor Corporation shareholders’ equities’ amount at the end of each period by the number of shares issued and outstanding, excluding treasury stock at the end of the corresponding period.

	Yen in millions		Thousands of shares		Yen
	Toyota Motor Corporation shareholders’ equity		Common shares issued and outstanding at the end of the  year (excluding treasury stock)		Toyota Motor Corporation shareholders’ equity per share
As of March 31, 2017		17,514,812		2,974,723		5,887.88
As of March 31, 2018		18,735,982		2,909,924		6,438.65

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Fair value measurements (Tables)

12 Months Ended

Mar. 31, 2018

Fair Values of Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table summarizes the fair values of the assets and liabilities measured at fair value on a recurring basis as of March 31, 2017 and 2018. Transfers between levels of the fair value are recognized at the end of their respective reporting periods:

	Yen in millions
	March 31, 2017
	Level 1		Level 2			Level 3			Total
Assets
Cash equivalents		41,876		891,606			—			933,482
Time deposits		—		600,000			—			600,000
Marketable securities and other securities investments
Public and corporate bonds		4,797,499		1,079,385			8,947			5,885,831
Common stocks		2,686,934		—			—			2,686,934
Other		18,191		73,246			—			91,437
Investments measured at net asset value		—		—			—			735,131
Derivative financial instruments		—		243,334			87			243,421
Total		7,544,500		2,887,571			9,034			11,176,236
Liabilities
Derivative financial instruments		—		(237,848	)		(7,609	)		(245,457	)
Total		—		(237,848	)		(7,609	)		(245,457	)

	Yen in millions
	March 31, 2018
	Level 1		Level 2			Level 3			Total
Assets
Cash equivalents		44,897		774,209			—			819,106
Time deposits		—		400,000			—			400,000
Marketable securities and other securities investments
Public and corporate bonds		4,778,019		1,523,227			7,488			6,308,734
Common stocks		2,582,115		—			—			2,582,115
Other		169,282		50,746			—			220,028
Investments measured at net asset value		—		—			—			516,951
Derivative financial instruments		—		257,795			9			257,804
Total		7,574,313		3,005,977			7,497			11,104,738
Liabilities
Derivative financial instruments		—		(194,935	)		(2,221	)		(197,156	)
Total		—		(194,935	)		(2,221	)		(197,156	)

Changes in Level 3 Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table summarizes the changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the periods ended March 31, 2016, 2017 and 2018:

	Yen in millions
	For the year ended March 31, 2016
	Marketable securities and other securities investments			Derivative financial instruments			Total
Balance at beginning of year		12,317			1,010			13,327
Total gains (losses)
Included in income (loss)		1			2,507			2,508
Included in other comprehensive income (loss)		(286	)		—			(286	)
Purchases and issuances		931			—			931
Settlements		(1,451	)		(479	)		(1,930	)
Other		(1,178	)		(189	)		(1,367	)
Balance at end of year		10,334			2,849			13,183

	Yen in millions
	For the year ended March 31, 2017
	Marketable securities and other securities investments			Derivative financial instruments			Total
Balance at beginning of year		10,334			2,849			13,183
Total gains (losses)
Included in income (loss)		(16	)		(7,310	)		(7,326	)
Included in other comprehensive income (loss)		60			—			60
Purchases and issuances		1,126			—			1,126
Settlements		(2,282	)		(2,693	)		(4,975	)
Other		(275	)		(368	)		(643	)
Balance at end of year		8,947			(7,522	)		1,425

	Yen in millions
	For the year ended March 31, 2018
	Marketable securities and other securities investments			Derivative financial instruments			Total
Balance at beginning of year		8,947			(7,522	)		1,425
Total gains (losses)
Included in income (loss)		17			805			822
Included in other comprehensive income (loss)		(12	)		—			(12	)
Purchases and issuances		3,860			—			3,860
Settlements		(4,739	)		4,320			(419	)
Other		(585	)		185			(400	)
Balance at end of year		7,488			(2,212	)		5,276

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Summary of significant accounting policies - Additional Information (Detail) - JPY (¥) ¥ in Millions		12 Months Ended
	Apr. 01, 2018	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Significant Accounting Policies [Line Items]
Investments in non-public companies stated at cost		Investments in non-public companies in which Toyota does not exercise significant influence (generally less than a 20% ownership interest) are stated at cost.
Advertising costs		¥ 509,653	¥ 448,780	¥ 489,036
Research and development costs		1,064,269	1,037,528	¥ 1,055,672
Inventories, LIFO basis		472,717	433,802
Inventory increase had LIFO been replaced by FIFO basis		¥ 22,778	¥ 40,650
Intangible assets with a definite life, estimated useful lives		5 years
Cumulative-effect adjustment to retained earnings	¥ 1,125,109
Building | Maximum
Significant Accounting Policies [Line Items]
Property, plant and equipment, estimated useful lives		65 years
Building | Minimum
Significant Accounting Policies [Line Items]
Property, plant and equipment, estimated useful lives		2 years
Machinery and equipment | Maximum
Significant Accounting Policies [Line Items]
Property, plant and equipment, estimated useful lives		20 years
Machinery and equipment | Minimum
Significant Accounting Policies [Line Items]
Property, plant and equipment, estimated useful lives		2 years
Assets Leased to Others | Maximum
Significant Accounting Policies [Line Items]
Property, plant and equipment, estimated useful lives		5 years
Assets Leased to Others | Minimum
Significant Accounting Policies [Line Items]
Property, plant and equipment, estimated useful lives		2 years
Retail Receivables Portfolio Segment | Maximum
Significant Accounting Policies [Line Items]
Contract period		7 years
Retail Receivables Portfolio Segment | Minimum
Significant Accounting Policies [Line Items]
Contract period		2 years
Finance Lease Receivables Portfolio Segment | Maximum
Significant Accounting Policies [Line Items]
Contract period		5 years
Finance Lease Receivables Portfolio Segment | Minimum
Significant Accounting Policies [Line Items]
Contract period		2 years

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Summary of significant accounting policies (Finance Receivables on Nonaccrual Status) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance receivables on nonaccrual status	¥ 35,459	¥ 37,572
Retail Receivables Portfolio Segment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance receivables on nonaccrual status	6,897	7,064
Finance Lease Receivables Portfolio Segment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance receivables on nonaccrual status	2,117	2,297
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Wholesale
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance receivables on nonaccrual status	12,484	15,018
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance receivables on nonaccrual status	13,856	12,632
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Working capital
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance receivables on nonaccrual status	¥ 105	¥ 561

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Summary of significant accounting policies (Finance Receivables 90 Days or More Past Due and Accruing) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Financing Receivable, Recorded Investment, Past Due [Line Items]
Finance receivables past due over 90 days and still accruing	¥ 29,819	¥ 30,142
Retail Receivables Portfolio Segment
Financing Receivable, Recorded Investment, Past Due [Line Items]
Finance receivables past due over 90 days and still accruing	26,007	26,616
Finance Lease Receivables Portfolio Segment
Financing Receivable, Recorded Investment, Past Due [Line Items]
Finance receivables past due over 90 days and still accruing	¥ 3,812	¥ 3,526

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Supplemental cash flow information - Additional Information (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Schedule of Cash Flow, Supplemental [Line Items]
Cash payments for income taxes	¥ 500,214	¥ 854,600	¥ 884,589
Interest payments	422,720	362,602	381,280
Capital lease obligations incurred	¥ 4,467	¥ 5,975	¥ 6,546

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Acquisitions and dispositions - Additional Information (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Business Acquisition [Line Items]
Sales of products	¥ 27,420,276	¥ 25,813,496	¥ 26,549,111
Misawa Homes Company Limited
Business Acquisition [Line Items]
Number of shares acquired		11,181,798
Ownership interest percentage		51.00%
Sales of products		¥ 130,046

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Marketable securities and other securities investments (Aggregate Cost, Gross Unrealized Gains and Losses and Fair Value of Marketable Securities and Other Securities Investments) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Gain (Loss) on Investments [Line Items]
Cost	¥ 7,684,104	¥ 7,277,080
Gross unrealized gains	2,069,023	2,174,274
Gross unrealized losses	125,299	52,021
Fair value	9,627,828	9,399,333
Public and Corporate Bonds
Gain (Loss) on Investments [Line Items]
Cost	6,276,811	5,789,221
Gross unrealized gains	150,198	145,640
Gross unrealized losses	118,275	49,030
Fair value	6,308,734	5,885,831
Common stocks
Gain (Loss) on Investments [Line Items]
Cost	676,959	668,345
Gross unrealized gains	1,910,767	2,018,910
Gross unrealized losses	5,611	321
Fair value	2,582,115	2,686,934
Other
Gain (Loss) on Investments [Line Items]
Cost	730,334	819,514
Gross unrealized gains	8,058	9,724
Gross unrealized losses	1,413	2,670
Fair value	736,979	826,568
Securities not practicable to determine fair value
Gain (Loss) on Investments [Line Items]
Cost	139,855	102,193
Securities not practicable to determine fair value | Public and Corporate Bonds
Gain (Loss) on Investments [Line Items]
Cost	29,980	25,257
Securities not practicable to determine fair value | Common stocks
Gain (Loss) on Investments [Line Items]
Cost	¥ 109,875	¥ 76,936

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Marketable securities and other securities investments - Additional Information (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Net Investment Income [Line Items]
Proceeds from sales of available-for-sale securities	¥ 248,046	¥ 251,940	¥ 108,708
Gross realized gains on sales of available-for-sale securities	7,684	61,038	9,500
Gross realized losses on sales of available-for-sale securities	278	108	365
Impairment losses recognized on available-for-sale securities	¥ 846	¥ 7,073	¥ 9,272
Available-for-sale Securities | Public and Corporate Bonds
Net Investment Income [Line Items]
Maturity period for securities, minimum	1 year	1 year
Maturity period for securities, maximum	10 years	10 years
Japanese bonds | Available-for-sale Securities | Public and Corporate Bonds
Net Investment Income [Line Items]
Percentage of Assets	16.00%	28.00%
U.S., European and other bonds | Available-for-sale Securities | Public and Corporate Bonds
Net Investment Income [Line Items]
Percentage of Assets	84.00%	72.00%
Japan | Available-for-sale Securities | Common stocks
Net Investment Income [Line Items]
Percentage of Assets	93.00%	92.00%

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Finance receivables (Schedule of Finance Receivables) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance receivables	¥ 16,737,201	¥ 16,000,376
Deferred origination costs	181,764	172,298
Unearned income	(919,967)	(804,591)
Allowance for credit losses	(169,074)	(159,212)
Total finance receivables, net	15,829,924	15,208,871
Less - Current portion	(6,348,306)	(6,196,649)
Noncurrent finance receivables, net	9,481,618	9,012,222
Total finance receivables, net	15,829,924	15,208,871
Retail Receivables Portfolio Segment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance receivables	11,995,174	11,453,352
Allowance for credit losses	(103,457)	(104,354)	¥ (98,853)	¥ (109,316)
Finance Lease Receivables Portfolio Segment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance receivables	1,460,600	1,265,882
Allowance for credit losses	(28,817)	(23,962)	(24,600)	(29,303)
Wholesale and Other Dealer Loan Receivables Portfolio Segment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance receivables	3,281,427	3,281,142
Allowance for credit losses	¥ (36,800)	¥ (30,896)	¥ (30,828)	¥ (30,053)

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Finance receivables - Additional Information (Detail) - Geographic Concentration Ratio - Finance receivables	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
North America
Accounts, Notes, Loans and Financing Receivable [Line Items]
Concentration Risk Percentage	55.70%	59.10%
Europe
Accounts, Notes, Loans and Financing Receivable [Line Items]
Concentration Risk Percentage	12.10%	10.30%
Japan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Concentration Risk Percentage	8.20%	8.10%
Asia
Accounts, Notes, Loans and Financing Receivable [Line Items]
Concentration Risk Percentage	12.30%	11.30%
Other Countries
Accounts, Notes, Loans and Financing Receivable [Line Items]
Concentration Risk Percentage	11.70%	11.20%

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Finance receivables (Summary of Contractual Maturities) (Detail) ¥ in Millions	Mar. 31, 2018 JPY (¥)
Retail Receivables Portfolio Segment
Contractual Maturities [Line Items]
2019	¥ 3,887,959
2020	2,870,540
2021	2,269,797
2022	1,569,215
2023	884,871
Thereafter	512,792
Financing Receivables, Gross , Total	11,995,174
Finance Lease Receivables Portfolio Segment
Contractual Maturities [Line Items]
2019	370,916
2020	293,371
2021	228,764
2022	103,796
2023	37,134
Thereafter	5,122
Financing Receivables, Gross , Total	1,039,103
Wholesale and Other Dealer Loan Receivables Portfolio Segment
Contractual Maturities [Line Items]
2019	2,431,231
2020	234,874
2021	140,295
2022	162,198
2023	121,654
Thereafter	191,175
Financing Receivables, Gross , Total	¥ 3,281,427

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Finance receivables (Summary of Finance Leases) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Schedule of Finance Lease Obligations [Line Items]
Minimum lease payments	¥ 1,039,103	¥ 889,522
Estimated unguaranteed residual values	421,497	376,360
Capital Leases, Net Investment in Direct Financing Leases, Gross, Total	1,460,600	1,265,882
Deferred origination costs	10,411	5,809
Less - Unearned income	(120,884)	(103,518)
Less - Allowance for credit losses	(28,817)	(23,962)
Finance leases, net	¥ 1,321,310	¥ 1,144,211

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Finance receivables (Amount of Finance Receivables Segregated into Aging Categories Based on Number of Days Outstanding) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	¥ 16,737,201	¥ 16,000,376
Retail Receivables Portfolio Segment
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	11,802,032	11,264,660
Total	11,995,174	11,453,352
Retail Receivables Portfolio Segment | 30-59 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	127,830	125,626
Retail Receivables Portfolio Segment | 60-89 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	32,408	29,321
Retail Receivables Portfolio Segment | 90 days or greater past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	32,904	33,745
Finance Lease Receivables Portfolio Segment
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	1,448,989	1,255,626
Total	1,460,600	1,265,882
Finance Lease Receivables Portfolio Segment | 30-59 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	5,741	5,114
Finance Lease Receivables Portfolio Segment | 60-89 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	1,760	1,321
Finance Lease Receivables Portfolio Segment | 90 days or greater past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	4,110	3,821
Wholesale and Other Dealer Loan Receivables Portfolio Segment
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	3,281,427	3,281,142
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Wholesale
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	1,721,225	1,707,432
Total	1,726,475	1,708,759
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Wholesale | 30-59 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	138	1,327
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Wholesale | 60-89 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	5,112
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	823,007	848,757
Total	823,072	849,023
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Real estate | 90 days or greater past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	65	266
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Working capital
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	731,877	722,697
Total	731,880	723,360
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Working capital | 30-59 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due		405
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Working capital | 90 days or greater past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	¥ 3	¥ 258

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Finance receivables (Credit Quality of Finance Receivable within Wholesale and Other Dealer Loan Receivables Portfolio Segment) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	¥ 16,737,201	¥ 16,000,376
Wholesale and Other Dealer Loan Receivables Portfolio Segment
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	3,281,427	3,281,142
Wholesale and Other Dealer Loan Receivables Portfolio Segment | United States
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	1,850,701	2,008,168
Wholesale and Other Dealer Loan Receivables Portfolio Segment | United States | Performing
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	1,662,869	1,759,725
Wholesale and Other Dealer Loan Receivables Portfolio Segment | United States | Credit Watch
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	161,697	227,111
Wholesale and Other Dealer Loan Receivables Portfolio Segment | United States | At Risk
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	14,555	6,918
Wholesale and Other Dealer Loan Receivables Portfolio Segment | United States | Default
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	11,580	14,414
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Other Regions
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	1,430,726	1,272,974
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Other Regions | Performing
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	1,399,142	1,248,514
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Other Regions | Default
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	31,584	24,460
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Wholesale
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	1,726,475	1,708,759
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Wholesale | United States
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	1,116,901	1,228,577
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Wholesale | United States | Performing
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	1,005,030	1,076,164
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Wholesale | United States | Credit Watch
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	99,547	142,336
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Wholesale | United States | At Risk
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	7,968	1,286
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Wholesale | United States | Default
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	4,356	8,791
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Wholesale | Other Regions
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	609,574	480,182
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Wholesale | Other Regions | Performing
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	585,760	460,308
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Wholesale | Other Regions | Default
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	23,814	19,874
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Real estate
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	823,072	849,023
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Real estate | United States
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	491,891	528,760
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Real estate | United States | Performing
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	432,397	449,884
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Real estate | United States | Credit Watch
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	51,420	68,726
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Real estate | United States | At Risk
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	3,081	5,071
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Real estate | United States | Default
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	4,993	5,079
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Real estate | Other Regions
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	331,181	320,263
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Real estate | Other Regions | Performing
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	323,581	316,008
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Real estate | Other Regions | Default
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	7,600	4,255
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Working capital
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	731,880	723,360
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Working capital | United States
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	241,909	250,831
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Working capital | United States | Performing
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	225,442	233,677
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Working capital | United States | Credit Watch
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	10,730	16,049
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Working capital | United States | At Risk
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	3,506	561
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Working capital | United States | Default
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	2,231	544
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Working capital | Other Regions
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	489,971	472,529
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Working capital | Other Regions | Performing
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	489,801	472,198
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Working capital | Other Regions | Default
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	¥ 170	¥ 331

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Finance receivables (Impaired Finance Receivables) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded investment	¥ 80,285	¥ 79,594
Unpaid principal balance	79,526	78,910
Average recorded investment	79,567	79,700
Retail Receivables Portfolio Segment
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded investment	27,151	27,269
Unpaid principal balance	26,418	26,597
Average recorded investment	27,664	26,628
Finance Lease Receivables Portfolio Segment
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded investment	100	66
Unpaid principal balance	74	54
Average recorded investment	83	76
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Wholesale
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded investment	20,400	25,700
Unpaid principal balance	20,400	25,700
Average recorded investment	23,171	26,306
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Real estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded investment	24,439	22,766
Unpaid principal balance	24,439	22,766
Average recorded investment	22,831	22,482
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Working capital
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded investment	8,195	3,793
Unpaid principal balance	8,195	3,793
Average recorded investment	5,818	4,208
Impaired account balances individually evaluated for impairment with an allowance | Wholesale and Other Dealer Loan Receivables Portfolio Segment
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded investment	26,793	25,446
Unpaid principal balance	26,793	25,446
Individually evaluated allowance	7,542	4,260
Impaired account balances individually evaluated for impairment with an allowance | Wholesale and Other Dealer Loan Receivables Portfolio Segment | Wholesale
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded investment	11,582	10,667
Unpaid principal balance	11,582	10,667
Individually evaluated allowance	1,525	1,373
Impaired account balances individually evaluated for impairment with an allowance | Wholesale and Other Dealer Loan Receivables Portfolio Segment | Real estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded investment	9,353	10,986
Unpaid principal balance	9,353	10,986
Individually evaluated allowance	588	1,596
Impaired account balances individually evaluated for impairment with an allowance | Wholesale and Other Dealer Loan Receivables Portfolio Segment | Working capital
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded investment	5,858	3,793
Unpaid principal balance	5,858	3,793
Individually evaluated allowance	5,429	1,291
Impaired account balances individually evaluated for impairment without an allowance | Wholesale and Other Dealer Loan Receivables Portfolio Segment
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded investment	26,241	26,813
Unpaid principal balance	26,241	26,813
Impaired account balances individually evaluated for impairment without an allowance | Wholesale and Other Dealer Loan Receivables Portfolio Segment | Wholesale
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded investment	8,818	15,033
Unpaid principal balance	8,818	15,033
Impaired account balances individually evaluated for impairment without an allowance | Wholesale and Other Dealer Loan Receivables Portfolio Segment | Real estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded investment	15,086	11,780
Unpaid principal balance	15,086	11,780
Impaired account balances individually evaluated for impairment without an allowance | Wholesale and Other Dealer Loan Receivables Portfolio Segment | Working capital
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded investment	2,337
Unpaid principal balance	2,337
Impaired Account Balances Aggregated and Evaluated for Impairment
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded investment	27,251	27,335
Unpaid principal balance	26,492	26,651
Impaired Account Balances Aggregated and Evaluated for Impairment | Retail Receivables Portfolio Segment
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded investment	27,151	27,269
Unpaid principal balance	26,418	26,597
Impaired Account Balances Aggregated and Evaluated for Impairment | Finance Lease Receivables Portfolio Segment
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded investment	100	66
Unpaid principal balance	¥ 74	¥ 54

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Inventories (Components of Inventories) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Inventory [Line Items]
Finished goods	¥ 1,683,694	¥ 1,552,823
Raw materials	435,360	413,049
Work in process	304,929	309,387
Supplies and other	115,806	113,358
Total	¥ 2,539,789	¥ 2,388,617

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Vehicles and equipment on operating leases (Summary of Vehicles and Equipment on Operating Lease) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Property Subject to or Available for Operating Lease [Line Items]
Less - Deferred income and other	¥ (203,679)	¥ (152,044)
Vehicles and equipment on operating leases, gross	5,934,393	5,966,579
Less - Accumulated depreciation	(1,352,840)	(1,263,774)
Less - Allowance for credit losses	(15,013)	(18,889)
Vehicles and equipment on operating leases, net	4,566,540	4,683,916
Vehicles
Property Subject to or Available for Operating Lease [Line Items]
Vehicles and equipment on operating leases, gross	6,124,699	6,105,527
Equipment
Property Subject to or Available for Operating Lease [Line Items]
Vehicles and equipment on operating leases, gross	¥ 13,373	¥ 13,096

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Vehicles and equipment on operating leases - Additional Information (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Leases Disclosure [Line Items]
Rental income from vehicles and equipment on operating leases	¥ 927,443	¥ 850,210	¥ 891,733

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Vehicles and equipment on operating leases (Future Minimum Rentals from Vehicles and Equipment on Operating Leases) (Detail) ¥ in Millions	Mar. 31, 2018 JPY (¥)
Future Minimum Payments Receivable [Line Items]
2019	¥ 769,926
2020	490,182
2021	221,216
2022	46,818
2023	11,675
Thereafter	1,478
Total minimum future rentals	¥ 1,541,295

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Allowance for doubtful accounts and credit losses (Allowance for Doubtful Accounts Relating to Trade Accounts and Notes Receivable) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for doubtful accounts at beginning of year	¥ 100,712	¥ 94,853	¥ 50,410
Provision for doubtful accounts, net of reversal	(74)	6,519	69,029
Write-offs	(2,374)	(3,839)	(20,649)
Other	326	3,179	(3,937)
Allowance for doubtful accounts at end of year	¥ 98,590	¥ 100,712	¥ 94,853

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Allowance for doubtful accounts and credit losses - Additional Information (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Financing Receivable, Allowance for Credit Losses [Line Items]
Trade accounts and notes receivable, allowance for doubtful accounts, non-current	¥ 72,665	¥ 50,602

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Allowance for doubtful accounts and credit losses (Allowance for Credit Losses Relating to Finance Receivables and Vehicles and Equipment on Operating Leases) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for credit losses at beginning of year	¥ 178,101	¥ 167,330	¥ 178,038
Provision for credit losses, net of reversal	76,143	92,147	90,236
Charge-offs	(96,444)	(99,550)	(102,948)
Recoveries	25,344	21,757	22,356
Other	943	(3,583)	(20,352)
Allowance for credit losses at end of year	¥ 184,087	¥ 178,101	¥ 167,330

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Allowance for doubtful accounts and credit losses (Allowance for Credit Losses Relating to Retail Receivables, Finance Lease Receivables and Wholesale and Other Dealer Loan Receivables Portfolio Segments) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for credit losses at beginning of year	¥ 159,212
Allowance for credit losses at end of year	169,074	¥ 159,212
Retail Receivables Portfolio Segment
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for credit losses at beginning of year	104,354	98,853	¥ 109,316
Provision for credit losses, net of reversal	52,891	67,433	65,677
Charge-offs	(74,868)	(78,114)	(83,116)
Recoveries	20,511	18,282	18,999
Other	569	(2,100)	(12,023)
Allowance for credit losses at end of year	103,457	104,354	98,853
Finance Lease Receivables Portfolio Segment
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for credit losses at beginning of year	23,962	24,600	29,303
Provision for credit losses, net of reversal	7,115	1,657	1,742
Charge-offs	(2,708)	(2,007)	(3,833)
Recoveries	315	194	380
Other	133	(482)	(2,992)
Allowance for credit losses at end of year	28,817	23,962	24,600
Wholesale and Other Dealer Loan Receivables Portfolio Segment
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for credit losses at beginning of year	30,896	30,828	30,053
Provision for credit losses, net of reversal	6,497	854	4,962
Charge-offs	(823)	(324)	(667)
Recoveries	59	160	230
Other	171	(622)	(3,750)
Allowance for credit losses at end of year	¥ 36,800	¥ 30,896	¥ 30,828

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Affiliated companies and variable interest entities (Summary of Financial Information for Affiliated Companies Accounted for by Equity Method) (Detail) ¥ in Millions	12 Months Ended
	Mar. 31, 2018 JPY (¥) Entity	Mar. 31, 2017 JPY (¥) Entity	Mar. 31, 2016 JPY (¥)
Schedule of Equity Method Investments [Line Items]
Current assets	¥ 12,766,962	¥ 11,795,296
Noncurrent assets	12,326,689	11,003,432
Total assets	25,093,651	22,798,728
Current liabilities	8,061,342	7,419,176
Long-term liabilities and noncontrolling interests	5,940,549	5,423,938
Affiliated companies accounted for by the equity method shareholders' equity	11,091,760	9,955,614
Total liabilities and shareholders' equity	25,093,651	22,798,728
Toyota's share of affiliated companies accounted for by the equity method shareholders' equity	¥ 3,162,711	¥ 2,845,422	¥ 2,631,389
Number of affiliated companies accounted for by the equity method at end of period | Entity	57	54
Net revenues	¥ 30,680,535	¥ 30,309,263	31,037,029
Gross profit	4,065,344	3,644,267	3,852,899
Net income attributable to affiliated companies accounted for by the equity method	1,344,687	1,099,080	957,742
Equity in earnings of affiliated companies attributable to Toyota Motor Corporation	¥ 470,083	¥ 362,060	¥ 329,099

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Affiliated companies and variable interest entities (Entities Comprising Significant Portion of Toyota's Investment in Affiliated Companies and Percentage of Ownership) (Detail)	Mar. 31, 2018	Mar. 31, 2017
Denso Corporation
Schedule of Equity Method Investments [Line Items]
Percentage of ownership	24.40%	24.90%
Toyota Industries Corporation
Schedule of Equity Method Investments [Line Items]
Percentage of ownership	24.90%	24.90%
Aisin Seiki Co Ltd
Schedule of Equity Method Investments [Line Items]
Percentage of ownership	24.90%	24.10%
Toyota Tsusho Corporation
Schedule of Equity Method Investments [Line Items]
Percentage of ownership	22.00%	22.00%
Toyoda Gosei Co Ltd
Schedule of Equity Method Investments [Line Items]
Percentage of ownership	43.00%	43.00%

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Affiliated companies and variable interest entities - Additional Information (Detail) - JPY (¥)	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Schedule of Equity Method Investments [Line Items]
Certain affiliated companies accounted for by the equity method	¥ 2,334,642,000,000	¥ 2,126,128,000,000
Affiliated companies aggregate value	3,145,940,000,000	2,894,106,000,000
Impairment loss on a certain investment in affiliated company accounted for by the equity method	0	0	¥ 0
Dividends from affiliated companies accounted for by the equity method	196,403,000,000	180,326,000,000	¥ 186,212,000,000
Finance receivables	15,829,924,000,000	15,208,871,000,000
Operating leases	5,934,393,000,000	5,966,579,000,000
Maximum exposure to loss related to VIEs	446,778,000,000	539,862,000,000
Vehicles
Schedule of Equity Method Investments [Line Items]
Operating leases	6,124,699,000,000	6,105,527,000,000
Variable Interest Entity, Primary Beneficiary
Schedule of Equity Method Investments [Line Items]
Restricted cash	146,828,000,000	151,943,000,000
Secured debt	1,952,973,000,000	2,067,221,000,000
Variable Interest Entity, Primary Beneficiary | Vehicles
Schedule of Equity Method Investments [Line Items]
Operating leases	618,787,000,000	557,383,000,000
Retail Receivables Portfolio Segment | Variable Interest Entity, Primary Beneficiary
Schedule of Equity Method Investments [Line Items]
Finance receivables	¥ 1,964,350,000,000	¥ 2,092,311,000,000

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Affiliated companies and variable interest entities (Account Balances and Transactions with Affiliated Companies) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Schedule of Equity Method Investments [Line Items]
Trade accounts and notes receivable, and other receivables	¥ 301,335	¥ 289,406
Accounts payable and other payables	736,023	691,173
Net revenues	2,004,632	1,914,318	¥ 1,804,493
Purchases	¥ 5,749,430	¥ 5,357,682	¥ 4,359,854

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Short-term borrowings and long-term debt (Short-term Borrowings) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Short-term Debt [Line Items]
Loans, principally from banks, with a weighted-average interest at March 31, 2017 and March 31, 2018 of 1.86% and of 2.14% per annum, respectively	¥ 1,254,444	¥ 1,125,324
Commercial paper with a weighted-average interest at March 31, 2017 and March 31, 2018 of 1.08% and of 1.65% per annum, respectively	3,900,469	3,828,358
Short-term borrowings	¥ 5,154,913	¥ 4,953,682

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Short-term borrowings and long-term debt (Short-term Borrowings) (Parenthetical) (Detail)	Mar. 31, 2018	Mar. 31, 2017
Short Term Bank Loans and Notes Payable
Short-term Debt [Line Items]
Short-term borrowings, weighted-average interest rate	2.14%	1.86%
Commercial Paper
Short-term Debt [Line Items]
Short-term borrowings, weighted-average interest rate	1.65%	1.08%

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Short-term borrowings and long-term debt - Additional Information (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Debt Instrument [Line Items]
Unused short-term lines of credit	¥ 1,712,315
Assets pledged as collateral mainly for certain debt obligations of subsidiaries	658,675
Other assets pledged as collateral mainly for certain debt obligations of subsidiaries	2,052,752
Unused long-term lines of credit	6,728,922
Debt interest expense	¥ 415,094	¥ 352,691	¥ 377,310
Currency, U.S. Dollar
Debt Instrument [Line Items]
Percentage of debt	48.00%
Currency, Japanese Yen
Debt Instrument [Line Items]
Percentage of debt	11.00%
Euro Member Countries, Euro
Debt Instrument [Line Items]
Percentage of debt	10.00%
Currency, Australian Dollar
Debt Instrument [Line Items]
Percentage of debt	9.00%
Canada, Dollars
Debt Instrument [Line Items]
Percentage of debt	6.00%
Other Foreign Currency Denominated Debt
Debt Instrument [Line Items]
Percentage of debt	16.00%
Commercial Paper
Debt Instrument [Line Items]
Unused short-term lines of credit	¥ 245,797

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Short-term borrowings and long-term debt (Long-term Debt) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Debt Instrument [Line Items]
Long-term Debt and Capital Lease Obligations, Including Current Maturities, Total	¥ 14,192,651	¥ 14,202,045
Less - Current portion due within one year	(4,186,277)	(4,290,449)
Long-term debt	10,006,374	9,911,596
Unsecured Debt | Bank Loan Obligations
Debt Instrument [Line Items]
Long-term debt	3,215,309	3,318,865
Secured Debt | Finance Receivables Securitization
Debt Instrument [Line Items]
Long-term debt	1,963,057	2,080,362
Medium-term Notes | Consolidated Subsidiaries
Debt Instrument [Line Items]
Long-term debt	6,994,629	6,923,511
Unsecured Notes | Consolidated Subsidiaries
Debt Instrument [Line Items]
Long-term debt	1,569,517	1,430,022
Unsecured Notes | Parent Company
Debt Instrument [Line Items]
Long-term debt	370,000	370,000
Secured Notes | Consolidated Subsidiaries
Debt Instrument [Line Items]
Long-term debt	59,513	57,036
Capital Lease Obligations
Debt Instrument [Line Items]
Long-term capital lease obligations	¥ 20,626	¥ 22,249

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Short-term borrowings and long-term debt (Long-term Debt) (Parenthetical) (Detail)	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Medium-term Notes | Consolidated Subsidiaries
Debt Instrument [Line Items]
Long-term debt, weighted average interest rate	2.18%	2.12%
Medium-term Notes | Range Start | Consolidated Subsidiaries
Debt Instrument [Line Items]
Debt maturity year	2018	2017
Medium-term Notes | Range End | Consolidated Subsidiaries
Debt Instrument [Line Items]
Debt maturity year	2046	2046
Unsecured Notes | Consolidated Subsidiaries
Debt Instrument [Line Items]
Long-term debt, weighted average interest rate	2.20%	2.17%
Unsecured Notes | Parent Company
Debt Instrument [Line Items]
Long-term debt, weighted average interest rate	0.94%	1.35%
Unsecured Notes | Range Start | Consolidated Subsidiaries
Debt Instrument [Line Items]
Debt maturity year	2018	2017
Unsecured Notes | Range Start | Parent Company
Debt Instrument [Line Items]
Debt maturity year	2018	2017
Unsecured Notes | Range End | Consolidated Subsidiaries
Debt Instrument [Line Items]
Debt maturity year	2031	2032
Unsecured Notes | Range End | Parent Company
Debt Instrument [Line Items]
Debt maturity year	2037	2036
Secured Notes | Consolidated Subsidiaries
Debt Instrument [Line Items]
Long-term debt, weighted average interest rate	7.90%	8.14%
Secured Notes | Range Start | Consolidated Subsidiaries
Debt Instrument [Line Items]
Debt maturity year	2018	2017
Secured Notes | Range End | Consolidated Subsidiaries
Debt Instrument [Line Items]
Debt maturity year	2021	2020
Capital Lease Obligations | Minimum
Debt Instrument [Line Items]
Long-term debt, interest rate	0.37%	0.37%
Capital Lease Obligations | Maximum
Debt Instrument [Line Items]
Long-term debt, interest rate	14.73%	14.73%
Capital Lease Obligations | Range Start
Debt Instrument [Line Items]
Debt maturity year	2018	2017
Capital Lease Obligations | Range End
Debt Instrument [Line Items]
Debt maturity year	2035	2035
Bank Loan Obligations | Unsecured Debt
Debt Instrument [Line Items]
Long-term debt, weighted average interest rate	2.70%	2.44%
Bank Loan Obligations | Unsecured Debt | Range Start
Debt Instrument [Line Items]
Debt maturity year	2018	2017
Bank Loan Obligations | Unsecured Debt | Range End
Debt Instrument [Line Items]
Debt maturity year	2036	2036
Finance Receivables Securitization | Secured Debt
Debt Instrument [Line Items]
Long-term debt, weighted average interest rate	1.99%	1.43%
Finance Receivables Securitization | Secured Debt | Range Start
Debt Instrument [Line Items]
Debt maturity year	2018	2017
Finance Receivables Securitization | Secured Debt | Range End
Debt Instrument [Line Items]
Debt maturity year	2030	2030

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Short-term borrowings and long-term debt (Aggregate Amounts of Annual Maturities of Long-term Debt During Next Five Years) (Detail) ¥ in Millions	Mar. 31, 2018 JPY (¥)
Long Term Debt And Capital Lease Obligations Repayments Of Principal [Line Items]
2019	¥ 4,186,277
2020	2,848,360
2021	2,398,498
2022	2,236,208
2023	¥ 1,612,872

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Product warranties and recalls and other safety measures (Net Changes in Liabilities for Quality Assurances) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Product Liability Contingency [Line Items]
Liabilities for quality assurances at beginning of year	¥ 1,696,938	¥ 1,403,764	¥ 1,328,916
Payments made during year	(586,943)	(604,853)	(501,073)
Provision for quality assurances	649,377	919,086	636,719
Changes relating to pre-existing quality assurances	(56,769)	(24,147)	(39,225)
Other	(291)	3,088	(21,573)
Liabilities for quality assurances at end of year	¥ 1,702,312	¥ 1,696,938	¥ 1,403,764

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Product warranties and recalls and other safety measures (Net Changes in Liabilities for Recalls and Other Safety Measures which are Comprised in Liabilities for Quality Assurances) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Product Liability Contingency [Line Items]
Liabilities for recalls and other safety measures at beginning of year	¥ 1,275,200	¥ 925,475	¥ 755,050
Payments made during year	(456,177)	(444,416)	(347,861)
Provision for recalls and other safety measures	454,391	794,009	524,100
Other	1,842	132	(5,814)
Liabilities for recalls and other safety measures at end of year	¥ 1,275,256	¥ 1,275,200	¥ 925,475

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Income taxes (Components of Income Before Income Taxes) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Income before income taxes:
Parent company and domestic subsidiaries	¥ 1,880,971	¥ 1,423,208	¥ 1,834,413
Foreign subsidiaries	739,458	770,617	1,148,968
Income before income taxes and equity in earnings of affiliated companies	¥ 2,620,429	¥ 2,193,825	¥ 2,983,381

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Income taxes (Provision for Income Taxes) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Current income tax expense:
Current income tax expense	¥ 742,367	¥ 682,199	¥ 845,380
Deferred income tax expense (benefit):
Deferred income tax expense (benefit)	(237,961)	(53,299)	32,889
Provision for income taxes	504,406	628,900	878,269
Parent Company And Domestic Subsidiaries
Current income tax expense:
Current income tax expense	565,998	435,560	591,868
Deferred income tax expense (benefit):
Deferred income tax expense (benefit)	45,097	(21,756)	(40,934)
Foreign Subsidiaries
Current income tax expense:
Current income tax expense	176,369	246,639	253,512
Deferred income tax expense (benefit):
Deferred income tax expense (benefit)	¥ (283,058)	¥ (31,543)	¥ 73,823

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Income taxes - Additional Information (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Income Taxes [Line Items]
Decrease in net deferred liabilities	¥ 218,323
Decrease in provision for income taxes	¥ 249,694
Japanese Tax Authority
Income Taxes [Line Items]
Statutory tax rate	31.10%	31.10%	32.90%
Operating loss carryforwards for tax purposes	¥ 26,712
Tax credit carryforwards	2,847
Undistributed earnings of foreign subsidiaries	3,623,657
Undistributed earnings of foreign subsidiaries, additional tax provision, estimate	¥ 139,287
Tax years remain open to examination by various tax jurisdictions	On and after April 1, 2011
Japanese Tax Authority | Minimum
Income Taxes [Line Items]
Expiration date for operating loss carryforwards	2019
Expiration date for tax credit carryforwards	2019
Japanese Tax Authority | Maximum
Income Taxes [Line Items]
Expiration date for operating loss carryforwards	2027
Expiration date for tax credit carryforwards	2021
Foreign Tax Authority
Income Taxes [Line Items]
Operating loss carryforwards for tax purposes	¥ 866,392
Tax credit carryforwards	¥ 55,939
Tax years remain open to examination by various tax jurisdictions	On and after April 1, 2002
Foreign Tax Authority | Minimum
Income Taxes [Line Items]
Expiration date for operating loss carryforwards	2019
Expiration date for tax credit carryforwards	2019
Foreign Tax Authority | Maximum
Income Taxes [Line Items]
Expiration date for operating loss carryforwards	2038
Expiration date for tax credit carryforwards	2038

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Income taxes (Reconciliation of Differences Between Statutory Tax Rate and Effective Income Tax Rate) (Detail) - Japanese Tax Authority	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Reconciliation of Statutory Federal Tax Rate [Line Items]
Statutory tax rate	31.10%	31.10%	32.90%
Increase (reduction) in taxes resulting from:
Non-deductible expenses	0.40%	0.40%	0.30%
Deferred tax liabilities on undistributed earnings of foreign subsidiaries	1.10%	1.30%	1.00%
Deferred tax liabilities on undistributed earnings of affiliated companies accounted for by the equity method	3.80%	3.30%	2.40%
Valuation allowance	(2.00%)	(0.60%)	(0.40%)
Tax credits	(4.30%)	(4.80%)	(4.70%)
The difference between the statutory tax rate in Japan and that of foreign subsidiaries	(1.50%)	(1.90%)	(1.30%)
Unrecognized tax benefits adjustments	0.20%	0.40%	0.20%
Revision to reduce deferred tax assets and liabilities at the fiscal year-end due to changes in tax rates			(0.50%)
Effect of the Tax Cuts and Jobs Act of 2017 of the United States	(9.50%)
Other	(0.10%)	(0.50%)	(0.50%)
Effective income tax rate	19.20%	28.70%	29.40%

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Income taxes (Components of Deferred Tax Assets and Liabilities) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2015
Deferred tax assets
Accrued pension and severance costs	¥ 199,366	¥ 219,465
Accrued expenses and liabilities for quality assurances	609,257	644,936
Other accrued employees' compensation	112,316	114,752
Operating loss carryforwards for tax purposes	203,897	76,317
Allowance for doubtful accounts and credit losses	63,223	82,916
Property, plant and equipment and other assets	249,320	234,372
Other	348,852	335,992
Gross deferred tax assets	1,786,231	1,708,750
Less - Valuation allowance	(93,814)	(146,623)	¥ (151,665)	¥ (169,811)
Total deferred tax assets	1,692,417	1,562,127
Deferred tax liabilities
Unrealized gains on securities, net	(635,292)	(692,962)
Undistributed earnings of foreign subsidiaries	(29,967)	(28,544)
Undistributed earnings of affiliated companies accounted for by the equity method	(794,485)	(709,094)
Basis difference of acquired assets	(30,768)	(31,861)
Lease transactions	(751,292)	(973,000)
Other	(74,658)	(46,407)
Gross deferred tax liabilities	(2,316,462)	(2,481,868)
Net deferred tax liability	(624,045)	(919,741)
Deferred tax assets
Investments and other assets - Other	494,120	503,985
Deferred tax liabilities
Deferred income taxes (Long-term liabilities)	(1,118,165)	(1,423,726)
Net deferred tax liability	¥ (624,045)	¥ (919,741)

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Income taxes (Net Changes in Total Valuation Allowance for Deferred Tax Assets) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Valuation Allowance [Line Items]
Valuation allowance at beginning of year	¥ 146,623	¥ 151,665	¥ 169,811
Additions	16,106	27,147	33,243
Deductions	(74,435)	(37,891)	(43,723)
Other	5,520	5,702	(7,666)
Valuation allowance at end of year	¥ 93,814	¥ 146,623	¥ 151,665

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Income taxes (Summary of Gross Unrecognized Tax Benefits Changes) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Income Tax Contingency [Line Items]
Balance at beginning of year	¥ 21,553	¥ 19,250	¥ 13,644
Additions based on tax positions related to the current year	612	8,187	1,001
Additions for tax positions of prior years	13,954	6,076	6,378
Reductions for tax positions of prior years	(13,217)	(5,593)	(77)
Reductions for tax positions related to lapse of statute of limitations		(9)	(7)
Reductions for settlements	(26)	(6,317)	(427)
Other	(1,312)	(41)	(1,262)
Balance at end of year	¥ 21,564	¥ 21,553	¥ 19,250

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Class Shares (Additional Information Regarding Model AA Class Shares) (Detail) - JPY (¥) ¥ / shares in Units, ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Jul. 24, 2015
Class of Stock [Line Items]
Total number of shares issued	47,100,000	47,100,000
Unpaid dividends included in mezzanine equity	¥ 3,721	¥ 2,473
Model AA Class Shares
Class of Stock [Line Items]
Total number of shares issued			47,100,000
Issue price			¥ 10,598
Purchase price			¥ 10,121.09
Voting rights	Model AA Class Shares shall have voting rights. The number of shares constituting one unit with respect to Model AA Class Shares shall be 100.
Restrictions on transfer	Model AA Class Shares shall have restrictions on transfer.
Dividends	(1) If the record date falls in the fiscal year ending on March 31, 2016: 0.5% of the issue price (2) If the record date falls in the fiscal year ending on March 31, 2017 through March 31, 2020: the annual dividend rate for the previous fiscal year plus 0.5% of the issue price (3) If the record date falls in the fiscal year ending on March 31, 2021 or later: 2.5% of the issue price
Shareholder's right	(1) Shareholder's conversion right into Common Shares Shareholders of the Model AA Class Shares may demand TMC to acquire all or a part of their Model AA Class Shares in exchange for Common Shares on the first business day of April and October of every year, starting October 1, 2020. (2) Shareholder's cash put option Shareholders of the Model AA Class Shares may demand TMC to acquire all or a part of their Model AA Class Shares in exchange for cash on the last business day of March, June, September and December of each year, starting on September 1, 2020.
TMC's right	TMC may acquire, on or after April 2, 2021, all of the outstanding Model AA Class Shares in exchange for cash.

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Class Shares (Additional Information Regarding Model AA Class Shares) (Parenthetical) (Detail) - Model AA Class Shares	Jul. 24, 2015
If the record date falls in the fiscal year ending on March 31, 2016
Class of Stock [Line Items]
Dividends rate	0.50%
If the record date falls in the fiscal year ending on March 31, 2017 through March 31, 2020
Class of Stock [Line Items]
Dividends rate	0.50%
If the record date falls in the fiscal year ending on March 31, 2021 or later
Class of Stock [Line Items]
Dividends rate	2.50%

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Shareholders' equity (Changes in Number of Shares of Common Stock Issued) (Detail) - shares	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Reconciliation of Common Stock Outstanding [Line Items]
Balance at beginning of year	3,262,997,492	3,337,997,492	3,417,997,492
Issuance during the year	0	0	0
Purchase and retirement		(75,000,000)	(80,000,000)
Balance at end of year	3,262,997,492	3,262,997,492	3,337,997,492

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Shareholders' equity - Additional Information (Detail) - JPY (¥) ¥ / shares in Units, ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Stockholders Equity Note [Line Items]
Percentage of distributions from surplus appropriated as capital or retained earnings reserve	10.00%
Percentage of total amount of capital reserve and retained earnings reserves to stated capital	25.00%
Retained earnings, reserve	¥ 194,890	¥ 190,227
Retained earnings related to the equity in undistributed earnings of companies accounted for by the equity method	¥ 2,429,170
Reissuance of Treasury Stock | Business Cooperation With Mazda.
Stockholders Equity Note [Line Items]
Number of common shares reissued	8,293,300
Amount of proceeds	¥ 50,000
Reissuance of Treasury Stock | Daihatsu Motor Company Limited
Stockholders Equity Note [Line Items]
Number of common shares reissued		52,856,096
Amount of proceeds		¥ 27,972
Decrease in treasury stock		283,561
Increase in additional paid-in capital		27,972
Decrease in additional paid in capital due to acquisition of additional shares		53,742
Decrease in non controlling interest due to acquisition of additional shares		255,565
Decrease in accumulated other comprehensive income (loss) due to acquisition of additional shares		2,226
Parent Company
Stockholders Equity Note [Line Items]
Retained earnings, available for dividend payments	9,256,045	8,470,887
Cash dividends included in retained earnings at year-end	¥ 349,190
Cash dividends per common share	¥ 120
Treasury stock, at cost
Stockholders Equity Note [Line Items]
Retirement of treasury stock		(407,383)	¥ (400,537)
Additional paid-in capital
Stockholders Equity Note [Line Items]
Retirement of treasury stock		27,374	1,048
Retained earnings
Stockholders Equity Note [Line Items]
Retirement of treasury stock		¥ 380,009	¥ 399,489

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Shareholders' equity (Additional Information Regarding Repurchase, Reissuance and Retirement of Treasury Stock) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Repurchase of Treasury Stock | To avoid dilution of common share value due to issuance of First Series Model AA class shares
Equity, Class of Treasury Stock [Line Items]
Reason for repurchasing treasury stock	For the year ended March 31, 2016, the repurchase was made to avoid the dilution of common share value as a result of the issuance of the First Series Model AA Class Shares.
Number of common shares repurchased			47,100,000
Total purchase price for repurchase of shares			¥ 349,935
Repurchase of Treasury Stock | To return capital to shareholders
Equity, Class of Treasury Stock [Line Items]
Reason for repurchasing treasury stock	For the years ended March 31, 2018, 2017 and 2016, the repurchase was made to return capital to shareholders in addition to promoting capital efficiency and agile capital policy in view of the business environment.
Number of common shares repurchased	73,708,400	116,555,700	62,942,900
Total purchase price for repurchase of shares	¥ 499,989	¥ 699,986	¥ 432,692
Retirement of Treasury Stock
Equity, Class of Treasury Stock [Line Items]
Reason for retiring treasury stock	For the years ended March 31, 2017 and 2016, the retirement was made to relieve concerns regarding the dilution of common share value due to reissuance of treasury stock in the future.
Number of common shares retired		75,000,000	80,000,000

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Accumulated other comprehensive income (Components of Accumulated Other Comprehensive Income (Loss) and Related Changes, Net of Taxes) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balances	¥ 18,183,076	¥ 17,608,407	¥ 17,647,329
Other comprehensive income (loss) before reclassifications, net of taxes	(170,629)	66,147	(929,685)
Reclassifications, net of taxes	(22,221)	(26,482)	12,960
Other comprehensive income (loss), net of tax	(192,850)	39,665	(916,725)
Less - Other comprehensive income attributable to noncontrolling interests	(973)	(7,285)	49,948
Equity transaction with noncontrolling interests and other	(1,659)	13,347	5,709
Balances	19,430,102	18,183,076	17,608,407
Foreign currency translation adjustments
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balances	(560,108)	(499,055)	(136,090)
Other comprehensive income (loss) before reclassifications, net of taxes	(113,942)	(57,926)	(423,404)
Reclassifications, net of taxes	(6,664)		28,052
Other comprehensive income (loss), net of tax	(120,606)	(57,926)	(395,352)
Less - Other comprehensive income attributable to noncontrolling interests	1,629	5,499	32,387
Equity transaction with noncontrolling interests and other		(8,626)
Balances	(679,085)	(560,108)	(499,055)
Unrealized gains (losses) on securities
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balances	1,426,003	1,424,945	1,727,565
Other comprehensive income (loss) before reclassifications, net of taxes	(72,501)	41,134	(291,681)
Reclassifications, net of taxes	(22,058)	(36,855)	(20,511)
Other comprehensive income (loss), net of tax	(94,559)	4,279	(312,192)
Less - Other comprehensive income attributable to noncontrolling interests	(2,022)	(12,281)	9,572
Equity transaction with noncontrolling interests and other	162	9,060
Balances	1,329,584	1,426,003	1,424,945
Pension liability adjustments
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balances	(224,973)	(315,122)	(113,930)
Other comprehensive income (loss) before reclassifications, net of taxes	15,814	82,939	(214,600)
Reclassifications, net of taxes	6,501	10,373	5,419
Other comprehensive income (loss), net of tax	22,315	93,312	(209,181)
Less - Other comprehensive income attributable to noncontrolling interests	(580)	(503)	7,989
Equity transaction with noncontrolling interests and other	(11,562)	(2,660)
Balances	(214,800)	(224,973)	(315,122)
Accumulated other comprehensive income (loss)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balances	640,922	610,768	1,477,545
Equity transaction with noncontrolling interests and other	(11,400)	(2,226)
Balances	¥ 435,699	¥ 640,922	¥ 610,768

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Accumulated other comprehensive income (Components of Accumulated Other Comprehensive Income (Loss) and Related Changes, Net of Taxes) (Parenthetical) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other comprehensive income (loss) before reclassifications, taxes	¥ 27,347	¥ (39,907)	¥ 234,021
Reclassifications, taxes	7,229	18,020	6,514
Foreign currency translation adjustments
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other comprehensive income (loss) before reclassifications, taxes	(3,624)	9,240	10,719
Reclassifications, taxes	0	0	0
Unrealized gains (losses) on securities
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other comprehensive income (loss) before reclassifications, taxes	38,539	(9,048)	130,092
Reclassifications, taxes	9,729	23,275	9,832
Pension liability adjustments
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other comprehensive income (loss) before reclassifications, taxes	(7,568)	(40,099)	93,210
Reclassifications, taxes	¥ (2,500)	¥ (5,255)	¥ (3,318)

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Accumulated other comprehensive income (Reclassifications Out of Accumulated Other Comprehensive Income (Loss)) (Detail) - JPY (¥) ¥ in Millions		12 Months Ended
		Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Financing operations		¥ (1,959,234)	¥ (1,783,697)	¥ (1,854,007)
Foreign exchange gain (loss), net		(22,664)	(33,601)	5,573
Other income (loss), net		(45,948)	(36,222)	(12,524)
Income before income taxes and equity in earnings of affiliated companies		(2,620,429)	(2,193,825)	(2,983,381)
Provision for income taxes		504,406	628,900	878,269
Equity in earnings of affiliated companies		(470,083)	(362,060)	(329,099)
Net income		(2,586,106)	(1,926,985)	(2,434,211)
Reclassification from AOCI, Current Period, Tax		7,229	18,020	6,514
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax		(22,221)	(26,482)	12,960
Foreign currency translation adjustments | Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other income (loss), net		(6,664)		28,052
Income before income taxes and equity in earnings of affiliated companies		(6,664)		28,052
Net income		(6,664)		28,052
Unrealized gains (losses) on securities | Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Financing operations		(4,567)	(24,553)	(779)
Foreign exchange gain (loss), net		(25,247)	(3,572)	(27,275)
Other income (loss), net		(1,993)	(31,685)	(6,185)
Income before income taxes and equity in earnings of affiliated companies		(31,807)	(59,810)	(34,239)
Provision for income taxes		9,729	23,275	9,832
Equity in earnings of affiliated companies		20	(320)	3,896
Net income		(22,058)	(36,855)	(20,511)
Recognized net actuarial loss | Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax	[1]	12,914	19,432	12,971
Amortization of prior service costs | Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax	[1]	(3,913)	(3,804)	(4,234)
Pension liability adjustments
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax		9,001	15,628	8,737
Reclassification from AOCI, Current Period, Tax		(2,500)	(5,255)	(3,318)
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax		¥ 6,501	¥ 10,373	¥ 5,419

[1] These components are included in the computation of net periodic pension cost. See note 20 to the consolidated financial statements for additional information.

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Stock-based compensation - Additional Information (Detail) - JPY (¥)	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Compensation Related Costs Share Based Payments Disclosure [Line Items]
Stock-based compensation expense related to stock options	¥ 0	¥ 0	¥ 0
Total intrinsic value of stock options exercised	1,881,000,000	1,632,000,000	2,236,000,000
Cash received from options exercised	¥ 2,399,000,000	¥ 3,147,000,000	¥ 4,728,000,000
Stock options granted in and after August 2006
Compensation Related Costs Share Based Payments Disclosure [Line Items]
Term of options (in years)	8 years
Exercise price ratio	1.025%
Vesting period	2 years

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Stock-based compensation (Summary of Toyota's Stock Option Activity) (Detail) - JPY (¥) ¥ / shares in Units, ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2015
Number of shares
Options outstanding, beginning balance	1,192,300	2,093,500	3,503,500
Granted	0	0	0
Exercised	(643,800)	(785,600)	(936,400)
Canceled	(264,900)	(115,600)	(473,600)
Options outstanding, ending balance	283,600	1,192,300	2,093,500	3,503,500
Options exercisable at year end	283,600	1,192,300	2,093,500
Weighted-average exercise price
Options outstanding, beginning balance	¥ 3,682	¥ 3,858	¥ 4,632
Granted	0	0	0
Exercised	3,726	4,006	5,049
Canceled	4,154	4,682	6,917
Options outstanding, ending balance	3,153	3,682	3,858	¥ 4,632
Options exercisable at year end	¥ 3,153	¥ 3,682	¥ 3,858
Weighted-average remaining contractual life in years
Options outstanding, Weighted- average remaining contractual term	3 months 29 days	9 months 18 days	1 year 6 months 22 days	2 years 18 days
Options exercisable at year end	3 months 29 days	9 months 18 days	1 year 6 months 22 days
Aggregate intrinsic value
Option outstanding aggregate intrinsic value at year end	¥ 1,041	¥ 2,813	¥ 4,384	¥ 13,143
Options exercisable at year end	¥ 1,041	¥ 2,813	¥ 4,384

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Stock-based compensation (Summary of Options Outstanding and Options Exercisable) (Detail) - ¥ / shares	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2015
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Outstanding Number of shares	283,600	1,192,300	2,093,500	3,503,500
Outstanding Exercise price Yen	¥ 3,153	¥ 3,682	¥ 3,858	¥ 4,632
Outstanding Remaining life Years	3 months 29 days	9 months 18 days	1 year 6 months 22 days	2 years 18 days
Exercisable Number of shares	283,600	1,192,300	2,093,500
Exercisable Exercise price Yen	¥ 3,153	¥ 3,682	¥ 3,858

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Employee benefit plans (Information Regarding Defined Benefit Plans) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Japan
Change in benefit obligation
Benefit obligation at beginning of year	¥ 1,930,498	¥ 1,912,156
Service cost	88,964	89,443	¥ 78,611
Interest cost	13,252	8,800	17,509
Plan participants' contributions	1,266	923
Plan amendments	(58)	(21)
Net actuarial (gain) loss	35,017	(45,783)
Acquisition and other	18,206	30,622
Benefits paid	(67,835)	(65,642)
Benefit obligation at end of year	2,019,310	1,930,498	1,912,156
Change in plan assets
Balance at beginning of year	1,483,889	1,369,236
Actual return on plan assets	111,278	81,600
Acquisition and other	14,615	30,266
Employer contributions	42,095	39,692
Plan participants' contributions	1,266	923
Benefits paid	(40,264)	(37,828)
Balance at end of year	1,612,879	1,483,889	1,369,236
Funded status	406,431	446,609
Foreign Plans
Change in benefit obligation
Benefit obligation at beginning of year	1,026,024	963,255
Service cost	35,887	41,733	47,544
Interest cost	37,817	35,593	40,340
Plan participants' contributions	912	436
Plan amendments	(12)	(996)
Net actuarial (gain) loss	66,039	22,220
Acquisition and other	(26,616)	(18,778)
Benefits paid	(42,070)	(17,439)
Benefit obligation at end of year	1,097,981	1,026,024	963,255
Change in plan assets
Balance at beginning of year	758,306	692,801
Actual return on plan assets	89,924	74,760
Acquisition and other	(16,009)	(11,960)
Employer contributions	20,961	15,925
Plan participants' contributions	912	436
Benefits paid	(38,611)	(13,656)
Balance at end of year	815,483	758,306	¥ 692,801
Funded status	¥ 282,498	¥ 267,718

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Employee benefit plans (Amounts Recognized in Consolidated Balance Sheet Associated with Defined Benefit Plans) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Defined Benefit Plan Disclosure [Line Items]
Accrued pension and severance costs	¥ 931,182	¥ 905,070
Japan
Defined Benefit Plan Disclosure [Line Items]
Accrued expenses (Accrued pension and severance costs)	27,718	28,265
Accrued pension and severance costs	647,134	633,774
Investments and other assets - Other (Prepaid pension and severance costs)	(268,421)	(215,430)
Net amount recognized	406,431	446,609
Foreign Plans
Defined Benefit Plan Disclosure [Line Items]
Accrued expenses (Accrued pension and severance costs)	2,982	2,936
Accrued pension and severance costs	284,048	271,296
Investments and other assets - Other (Prepaid pension and severance costs)	(4,532)	(6,514)
Net amount recognized	¥ 282,498	¥ 267,718

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Employee benefit plans (Amounts Recognized in Accumulated Other Comprehensive Income (Loss)) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Japan
Schedule of Pension and Other Postretirement Benefits Recognized in Accumulated Other Comprehensive Income (Loss) [Line Items]
Net actuarial loss	¥ (248,791)	¥ (288,126)
Prior service costs	32,812	36,980
Net transition obligation	0	0
Net amount recognized	(215,979)	(251,146)
Foreign Plans
Schedule of Pension and Other Postretirement Benefits Recognized in Accumulated Other Comprehensive Income (Loss) [Line Items]
Net actuarial loss	(119,407)	(116,700)
Prior service costs	(1,826)	(2,151)
Net transition obligation	0	0
Net amount recognized	¥ (121,233)	¥ (118,851)

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Employee benefit plans - Additional Information (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2017
Japan
Pension and Other Postretirement Benefits Disclosure [Line Items]
Accumulated benefit obligation for all defined benefit pension plans		¥ 1,959,533	¥ 1,874,424
Japan | Equity securities
Pension and Other Postretirement Benefits Disclosure [Line Items]
Percentage of plan assets invested		40.00%
Japan | Equity securities | Common stocks
Pension and Other Postretirement Benefits Disclosure [Line Items]
Plan asset allocation		76.00%	74.00%
Japan | Debt securities
Pension and Other Postretirement Benefits Disclosure [Line Items]
Percentage of plan assets invested		30.00%
Japan | Debt securities | Government bonds
Pension and Other Postretirement Benefits Disclosure [Line Items]
Plan asset allocation		29.00%	28.00%
Japan | Scenario Forecast
Pension and Other Postretirement Benefits Disclosure [Line Items]
Estimated prior service costs	¥ (4,200)
Estimated net actuarial loss	7,100
Expected contribution to pension plans	42,220
Foreign Plans
Pension and Other Postretirement Benefits Disclosure [Line Items]
Accumulated benefit obligation for all defined benefit pension plans		¥ 1,023,094	¥ 957,217
Foreign Plans | Equity securities
Pension and Other Postretirement Benefits Disclosure [Line Items]
Percentage of plan assets invested		65.00%
Foreign Plans | Equity securities | Common stocks
Pension and Other Postretirement Benefits Disclosure [Line Items]
Plan asset allocation		24.00%	26.00%
Foreign Plans | Debt securities
Pension and Other Postretirement Benefits Disclosure [Line Items]
Percentage of plan assets invested		25.00%
Foreign Plans | Debt securities | Government bonds
Pension and Other Postretirement Benefits Disclosure [Line Items]
Plan asset allocation		71.00%	72.00%
Foreign Plans | Scenario Forecast
Pension and Other Postretirement Benefits Disclosure [Line Items]
Estimated prior service costs	300
Estimated net actuarial loss	6,900
Expected contribution to pension plans	¥ 23,234

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Employee benefit plans (Projected Benefit Obligation, Accumulated Benefit Obligation and Fair Value of Plan Assets for which Accumulated Benefit Obligations Exceed Plan Assets) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Japan
Schedule of Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets [Line Items]
Projected benefit obligation	¥ 833,080	¥ 892,684
Accumulated benefit obligation	806,774	866,566
Fair value of plan assets	170,234	242,488
Foreign Plans
Schedule of Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets [Line Items]
Projected benefit obligation	490,844	445,482
Accumulated benefit obligation	468,611	426,201
Fair value of plan assets	¥ 201,402	¥ 178,357

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Employee benefit plans (Components of Net Periodic Pension Cost) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Japan
Net Period Benefit Cost Assumptions [Line Items]
Service cost	¥ 88,964	¥ 89,443	¥ 78,611
Interest cost	13,252	8,800	17,509
Expected return on plan assets	(36,409)	(33,524)	(35,012)
Amortization of prior service costs	(4,226)	(4,148)	(4,669)
Recognized net actuarial loss	7,462	14,298	5,850
Amortization of net transition obligation	0	0	0
Net periodic pension cost	69,043	74,869	62,289
Foreign Plans
Net Period Benefit Cost Assumptions [Line Items]
Service cost	35,887	41,733	47,544
Interest cost	37,817	35,593	40,340
Expected return on plan assets	(41,048)	(38,893)	(44,616)
Amortization of prior service costs	313	344	435
Recognized net actuarial loss	5,452	5,134	7,121
Amortization of net transition obligation	0	0	0
Net periodic pension cost	¥ 38,421	¥ 43,911	¥ 50,824

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Employee benefit plans (Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss)) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Japan
Schedule of Pension and Other Postretirement Benefits Recognized in Accumulated Other Comprehensive Income (Loss) [Line Items]
Net actuarial gain (loss)	¥ 39,852	¥ 93,859	¥ (290,664)
Recognized net actuarial loss	7,462	14,298	5,850
Prior service costs	58	21	489
Amortization of prior service costs	(4,226)	(4,148)	(4,669)
Amortization of net transition obligation	0	0	0
Other	(7,979)	811	76
Total recognized in other comprehensive income (loss)	35,167	104,841	(288,918)
Foreign Plans
Schedule of Pension and Other Postretirement Benefits Recognized in Accumulated Other Comprehensive Income (Loss) [Line Items]
Net actuarial gain (loss)	(17,163)	13,647	(11,242)
Recognized net actuarial loss	5,452	5,134	7,121
Prior service costs	12	996	573
Amortization of prior service costs	313	344	435
Amortization of net transition obligation	0	0	0
Other	9,004	1,962	272
Total recognized in other comprehensive income (loss)	¥ (2,382)	¥ 22,083	¥ (2,841)

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Employee benefit plans (Weighted-Average Assumptions Used to Determine Benefit Obligations and Net Periodic Pension Cost) (Detail)	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Japan
Defined benefit plan, weighted average assumptions used in calculating benefit obligation
Discount rate	0.70%	0.70%
Rate of compensation increase	3.30%	2.90%
Defined benefit plan, weighted average assumptions used in calculating net periodic benefit cost
Discount rate	0.70%	0.50%	1.10%
Expected return on plan assets	2.40%	2.40%	2.50%
Rate of compensation increase	2.90%	2.70%	2.50%
Foreign Plans
Defined benefit plan, weighted average assumptions used in calculating benefit obligation
Discount rate	3.90%	4.00%
Rate of compensation increase	3.60%	3.80%
Defined benefit plan, weighted average assumptions used in calculating net periodic benefit cost
Discount rate	4.00%	4.20%	4.00%
Expected return on plan assets	6.00%	6.10%	6.30%
Rate of compensation increase	3.80%	3.90%	4.40%

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Employee benefit plans (Summary of Fair Value of Classes of Plan Assets) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2015
Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	¥ 815,483	¥ 758,306	¥ 692,801
Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	1,612,879	1,483,889	1,369,236
Investments | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	240,957	194,289
Investments | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	75,479	65,222
Equity securities | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	376,042	359,140
Equity securities | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	823,097	765,887
Equity securities | Common stocks | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	178,476	207,036
Equity securities | Common stocks | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	620,281	585,052
Equity securities | Commingled funds | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	197,566	152,104
Equity securities | Commingled funds | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	202,816	180,835
Debt securities | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	136,602	146,590
Debt securities | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	410,415	376,291
Debt securities | Commingled funds | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	11,642	36,430
Debt securities | Commingled funds | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	284,870	248,498
Debt securities | Government bonds | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	89,928	76,730
Debt securities | Government bonds | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	88,959	87,958
Debt securities | Other | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	35,032	33,430
Debt securities | Other | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	36,586	39,835
Insurance Contracts | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	201,141	199,779
Other | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	61,882	58,287
Other | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	102,747	76,710
Level 1 | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	280,891	297,299
Level 1 | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	750,686	715,093
Level 1 | Equity securities | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	178,476	207,036
Level 1 | Equity securities | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	620,281	585,052
Level 1 | Equity securities | Common stocks | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	178,476	207,036
Level 1 | Equity securities | Common stocks | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	620,281	585,052
Level 1 | Debt securities | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	89,928	76,730
Level 1 | Debt securities | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	88,959	87,958
Level 1 | Debt securities | Government bonds | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	89,928	76,730
Level 1 | Debt securities | Government bonds | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	88,959	87,958
Level 1 | Other | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	12,487	13,533
Level 1 | Other | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	41,446	42,083
Level 2 | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	262,347	235,815
Level 2 | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	786,695	702,997
Level 2 | Equity securities | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	197,566	152,104
Level 2 | Equity securities | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	202,816	180,835
Level 2 | Equity securities | Commingled funds | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	197,566	152,104
Level 2 | Equity securities | Commingled funds | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	202,816	180,835
Level 2 | Debt securities | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	46,674	69,860
Level 2 | Debt securities | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	321,437	288,252
Level 2 | Debt securities | Commingled funds | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	11,642	36,430
Level 2 | Debt securities | Commingled funds | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	284,870	248,498
Level 2 | Debt securities | Other | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	35,032	33,430
Level 2 | Debt securities | Other | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	36,567	39,754
Level 2 | Insurance Contracts | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	201,141	199,779
Level 2 | Other | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	18,107	13,851
Level 2 | Other | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	61,301	34,131
Level 3 | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	31,288	30,903
Level 3 | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	19	577	2,664	¥ 1,251
Level 3 | Debt securities | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	19	81	146	233
Level 3 | Debt securities | Other | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	19	81
Level 3 | Other | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	¥ 31,288	30,903	30,758	17,511
Level 3 | Other | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets		¥ 496	¥ 2,518	¥ 1,018

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Employee benefit plans (Changes in Level 3 Plan Assets Measured At Fair Value) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Japan
Defined Benefit Plan Disclosure [Line Items]
Balance at beginning of year	¥ 1,483,889	¥ 1,369,236
Actual return on plan assets	111,278	81,600
Balance at end of year	1,612,879	1,483,889	¥ 1,369,236
Foreign Plans
Defined Benefit Plan Disclosure [Line Items]
Balance at beginning of year	758,306	692,801
Actual return on plan assets	89,924	74,760
Balance at end of year	815,483	758,306	692,801
Debt securities | Japan
Defined Benefit Plan Disclosure [Line Items]
Balance at beginning of year	376,291
Balance at end of year	410,415	376,291
Debt securities | Foreign Plans
Defined Benefit Plan Disclosure [Line Items]
Balance at beginning of year	146,590
Balance at end of year	136,602	146,590
Other | Japan
Defined Benefit Plan Disclosure [Line Items]
Balance at beginning of year	76,710
Balance at end of year	102,747	76,710
Other | Foreign Plans
Defined Benefit Plan Disclosure [Line Items]
Balance at beginning of year	58,287
Balance at end of year	61,882	58,287
Level 3 | Japan
Defined Benefit Plan Disclosure [Line Items]
Balance at beginning of year	577	2,664	1,251
Actual return on plan assets	(4)	(11)	(2)
Purchases, sales and settlements	(554)	(2,076)	1,415
Balance at end of year	19	577	2,664
Level 3 | Foreign Plans
Defined Benefit Plan Disclosure [Line Items]
Balance at beginning of year	30,903
Balance at end of year	31,288	30,903
Level 3 | Debt securities | Japan
Defined Benefit Plan Disclosure [Line Items]
Balance at beginning of year	81	146	233
Actual return on plan assets			1
Purchases, sales and settlements	(62)	(65)	(88)
Balance at end of year	19	81	146
Level 3 | Other | Japan
Defined Benefit Plan Disclosure [Line Items]
Balance at beginning of year	496	2,518	1,018
Actual return on plan assets	(4)	(11)	(3)
Purchases, sales and settlements	(492)	(2,011)	1,503
Balance at end of year		496	2,518
Level 3 | Other | Foreign Plans
Defined Benefit Plan Disclosure [Line Items]
Balance at beginning of year	30,903	30,758	17,511
Actual return on plan assets	2,024	279	1,966
Purchases, sales and settlements			12,372
Other	(1,639)	(134)	(1,091)
Balance at end of year	¥ 31,288	¥ 30,903	¥ 30,758

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Employee benefit plans (Expected Benefit Payments Associated with Pension and Postretirement Benefit Plans) (Detail) ¥ in Millions	Mar. 31, 2018 JPY (¥)
Japan
Schedule of Pension Expected Future Benefit Payments [Line Items]
2019	¥ 72,756
2020	73,891
2021	74,890
2022	78,254
2023	82,433
from 2024 to 2028	429,821
Total	812,045
Foreign Plans
Schedule of Pension Expected Future Benefit Payments [Line Items]
2019	21,972
2020	23,700
2021	25,089
2022	26,724
2023	28,552
from 2024 to 2028	167,337
Total	¥ 293,374

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Derivative financial instruments (Fair Values of Derivative Financial Instruments) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Derivatives, Fair Value [Line Items]
Total derivative assets	¥ 257,804	¥ 243,421
Counterparty netting	(97,617)	(84,883)
Collateral received	(92,146)	(60,021)
Carrying value of derivative assets	68,041	98,517
Total derivative liabilities	(197,156)	(245,457)
Counterparty netting	97,617	84,883
Collateral posted	55,650	122,231
Carrying value of derivative liabilities	(43,889)	(38,343)
Interest rate and currency swap agreements
Derivatives, Fair Value [Line Items]
Derivative assets	222,060	230,238
Derivative liabilities	(193,546)	(225,474)
Interest rate and currency swap agreements | Prepaid expenses and Other current assets
Derivatives, Fair Value [Line Items]
Derivative assets	46,425	61,946
Interest rate and currency swap agreements | Investments and other assets - Other
Derivatives, Fair Value [Line Items]
Derivative assets	175,635	168,292
Interest rate and currency swap agreements | Other current liabilities
Derivatives, Fair Value [Line Items]
Derivative liabilities	(34,716)	(67,091)
Interest rate and currency swap agreements | Other long-term liabilities
Derivatives, Fair Value [Line Items]
Derivative liabilities	(158,830)	(158,383)
Foreign exchange forward and option contracts
Derivatives, Fair Value [Line Items]
Derivative assets	34,922	12,521
Derivative liabilities	(3,610)	(19,919)
Foreign exchange forward and option contracts | Prepaid expenses and Other current assets
Derivatives, Fair Value [Line Items]
Derivative assets	34,922	12,357
Foreign exchange forward and option contracts | Investments and other assets - Other
Derivatives, Fair Value [Line Items]
Derivative assets		164
Foreign exchange forward and option contracts | Other current liabilities
Derivatives, Fair Value [Line Items]
Derivative liabilities	(3,610)	(19,919)
Fair value hedging derivative financial instruments | Interest rate and currency swap agreements
Derivatives, Fair Value [Line Items]
Derivative assets	822	662
Derivative liabilities		(64)
Fair value hedging derivative financial instruments | Interest rate and currency swap agreements | Prepaid expenses and Other current assets
Derivatives, Fair Value [Line Items]
Derivative assets	154
Fair value hedging derivative financial instruments | Interest rate and currency swap agreements | Investments and other assets - Other
Derivatives, Fair Value [Line Items]
Derivative assets	¥ 668	662
Fair value hedging derivative financial instruments | Interest rate and currency swap agreements | Other current liabilities
Derivatives, Fair Value [Line Items]
Derivative liabilities		¥ (64)

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Derivative financial instruments (Notional Amounts of Derivative Financial Instruments) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Undesignated derivative financial instruments
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative financial instruments, notional amount	¥ 22,626,619	¥ 22,232,418
Interest rate and currency swap agreements | Undesignated derivative financial instruments
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative financial instruments, notional amount	19,895,085	19,459,677
Foreign exchange forward and option contracts | Undesignated derivative financial instruments
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative financial instruments, notional amount	2,731,534	2,772,741
Fair value hedging derivative financial instruments | Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative financial instruments, notional amount	12,643	40,837
Fair value hedging derivative financial instruments | Interest rate and currency swap agreements | Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative financial instruments, notional amount	¥ 12,643	¥ 40,837

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Derivative financial instruments (Gains and Losses on Derivative Financial Instruments and Hedged Items Reported in Consolidated Statement of Income) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Fair value hedging derivative financial instruments | Interest rate and currency swap agreements | Cost of financing operations
Derivative Instruments, Gain (Loss) [Line Items]
Gains or (losses) on derivative financial instruments	¥ 782	¥ (339)	¥ (133)
Gains or (losses) on hedged items	(227)	1,212	122
Undesignated derivative financial instruments | Interest rate and currency swap agreements | Cost of financing operations
Derivative Instruments, Gain (Loss) [Line Items]
Gains or (losses) on derivative financial instruments	42,220	(61,884)	119,096
Undesignated derivative financial instruments | Interest rate and currency swap agreements | Foreign exchange gain (loss), net
Derivative Instruments, Gain (Loss) [Line Items]
Gains or (losses) on derivative financial instruments	30,339	12,516	(379)
Undesignated derivative financial instruments | Foreign exchange forward and option contracts | Cost of financing operations
Derivative Instruments, Gain (Loss) [Line Items]
Gains or (losses) on derivative financial instruments	6,442	2,614	(16,363)
Undesignated derivative financial instruments | Foreign exchange forward and option contracts | Foreign exchange gain (loss), net
Derivative Instruments, Gain (Loss) [Line Items]
Gains or (losses) on derivative financial instruments	¥ 73,115	¥ 81,614	¥ 115,256

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Derivative financial instruments - Additional Information (Detail) ¥ in Millions	Mar. 31, 2018 JPY (¥)
Derivative [Line Items]
Credit risk derivatives, fair value, net liability	¥ 2,489
Credit risk derivatives, aggregate fair value of assets posted	28,012
Maximum amount of assets to be posted if the ratings decline below specified thresholds	¥ 2,489

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Other financial instruments (Estimated Fair Value of Toyota's Financial Instrument, Excluding Marketable Securities, Other Securities Investments, Investments and Other Assets in Affiliated Companies and Derivative Financial Instruments) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2015
Assets (Liabilities)
Cash and cash equivalents	¥ 3,052,269	¥ 2,995,075	¥ 2,939,428	¥ 2,284,557
Time deposits	901,244	1,082,654
Other receivables	489,338	436,867
Short-term borrowings	(5,154,913)	(4,953,682)
Carrying amount
Assets (Liabilities)
Cash and cash equivalents	3,052,269	2,995,075
Time deposits	901,244	1,082,654
Total finance receivables, net	14,508,614	14,064,660
Other receivables	489,338	436,867
Short-term borrowings	(5,154,913)	(4,953,682)
Long-term debt including the current portion	(14,172,025)	(14,179,796)
Estimated fair value
Assets (Liabilities)
Cash and cash equivalents	3,052,269	2,995,075
Time deposits	901,244	1,082,654
Total finance receivables, net	14,615,409	14,226,440
Other receivables	489,338	436,867
Short-term borrowings	(5,154,913)	(4,953,682)
Long-term debt including the current portion	(14,206,148)	(14,307,501)
Estimated fair value | Level 1
Assets (Liabilities)
Cash and cash equivalents	2,278,060	2,103,469
Estimated fair value | Level 2
Assets (Liabilities)
Cash and cash equivalents	774,209	891,606
Time deposits	901,244	1,082,654
Short-term borrowings	(5,154,913)	(4,953,682)
Long-term debt including the current portion	(12,265,260)	(12,241,617)
Estimated fair value | Level 3
Assets (Liabilities)
Total finance receivables, net	14,615,409	14,226,440
Other receivables	489,338	436,867
Long-term debt including the current portion	¥ (1,940,888)	¥ (2,065,884)

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Lease commitments (Analysis of Leased Assets Under Capital Leases) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Class of property
Less - Accumulated depreciation	¥ (30,853)	¥ (28,703)
Capital Leases, Balance Sheet, Assets by Major Class, Net, Total	18,298	19,702
Building
Class of property
Capital leased assets, gross	17,934	18,775
Machinery and equipment
Class of property
Capital leased assets, gross	¥ 31,217	¥ 29,630

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Lease commitments - Additional Information (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Lease and Rental Expense [Line Items]
Capital leases, amortization expenses	¥ 5,541	¥ 4,586	¥ 4,801
Operating lease, rental expenses	¥ 112,934	¥ 92,321	¥ 101,932

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Lease commitments (Future Minimum Lease Payments Under Capital Leases Together with Present Value of Net Minimum Lease Payments) (Detail) ¥ in Millions	Mar. 31, 2018 JPY (¥)
Schedule of Capital Lease Obligations [Line Items]
2019	¥ 6,645
2020	3,892
2021	2,276
2022	1,921
2023	1,801
Thereafter	8,933
Total minimum lease payments	25,468
Less - Amount representing interest	(4,842)
Present value of net minimum lease payments	20,626
Less - Current obligations	(5,796)
Long-term capital lease obligations	¥ 14,830

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Lease commitments (Minimum Rental Payments Required Under Operating Leases Relating to Land, Buildings and Equipment) (Detail) ¥ in Millions	Mar. 31, 2018 JPY (¥)
Schedule of Operating Leases [Line Items]
2019	¥ 14,296
2020	11,375
2021	9,422
2022	8,403
2023	7,247
Thereafter	26,106
Total minimum future rentals	¥ 76,849

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Other commitments and contingencies, concentrations and factors that may affect future operations - Additional Information (Detail) ¥ in Millions	12 Months Ended
	Mar. 31, 2018 JPY (¥)
Commitments and Contingencies Disclosure [Line Items]
Guarantee contracts obligations, maximum potential amount of future payments	¥ 2,830,749
Guarantee contracts obligations, liabilities	6,901
Purchase Commitment
Commitments and Contingencies Disclosure [Line Items]
Commitments outstanding for purchase of property, plant and equipment, service and other assets	¥ 368,483
Minimum
Commitments and Contingencies Disclosure [Line Items]
Payment guarantee period	1 month
Maximum
Commitments and Contingencies Disclosure [Line Items]
Payment guarantee period	35 years

XML

Segment data (Segment Operating Results and Assets) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Net revenues
Sales to external customers	¥ 29,379,510	¥ 27,597,193	¥ 28,403,118
Total net revenues	29,379,510	27,597,193	28,403,118
Operating expenses	26,979,648	25,602,821	25,549,147
Operating income	2,399,862	1,994,372	2,853,971
Assets	50,308,249	48,750,186	47,427,597
Investment in equity method investees	3,162,711	2,845,422	2,631,389
Depreciation expenses	1,734,033	1,610,950	1,625,837
Capital expenditure	3,598,707	3,541,437	4,059,216
Inter-segment Elimination
Net revenues
Inter-segment sales and transfers	(681,556)	(629,306)	(647,909)
Total net revenues	(681,556)	(629,306)	(647,909)
Operating expenses	(683,925)	(626,950)	(647,149)
Operating income	2,369	(2,356)	(760)
Assets	8,019,941	7,915,579	8,179,682
Investment in equity method investees	96,415	90,193	78,776
Capital expenditure	(11,667)	12,014	(10,010)
Automotive | Operating Segments
Net revenues
Sales to external customers	26,347,229	25,032,229	25,923,813
Inter-segment sales and transfers	50,711	49,618	53,603
Total net revenues	26,397,940	25,081,847	25,977,416
Operating expenses	24,386,805	23,388,874	23,528,418
Operating income	2,011,135	1,692,973	2,448,998
Assets	17,054,209	16,156,496	15,621,757
Investment in equity method investees	3,054,583	2,745,437	2,532,644
Depreciation expenses	976,735	912,797	900,434
Capital expenditure	1,381,122	1,293,564	1,389,289
Financial Services | Operating Segments
Net revenues
Sales to external customers	1,959,234	1,783,697	1,854,007
Inter-segment sales and transfers	57,774	39,903	42,217
Total net revenues	2,017,008	1,823,600	1,896,224
Operating expenses	1,731,462	1,601,172	1,556,998
Operating income	285,546	222,428	339,226
Assets	23,055,981	22,507,613	21,709,010
Investment in equity method investees	11,713	9,792	9,168
Depreciation expenses	723,061	671,155	697,991
Capital expenditure	2,166,805	2,182,149	2,638,111
All Other | Operating Segments
Net revenues
Sales to external customers	1,073,047	781,267	625,298
Inter-segment sales and transfers	573,071	539,785	552,089
Total net revenues	1,646,118	1,321,052	1,177,387
Operating expenses	1,545,306	1,239,725	1,110,880
Operating income	100,812	81,327	66,507
Assets	2,178,118	2,170,498	1,917,148
Investment in equity method investees			10,801
Depreciation expenses	34,237	26,998	27,412
Capital expenditure	¥ 62,447	¥ 53,710	¥ 41,826

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Segment data (Geographic Information) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Net revenues
Sales to external customers	¥ 29,379,510	¥ 27,597,193	¥ 28,403,118
Total net revenues	29,379,510	27,597,193	28,403,118
Operating expenses	26,979,648	25,602,821	25,549,147
Operating income (loss)	2,399,862	1,994,372	2,853,971
Assets	50,308,249	48,750,186	47,427,597
Long-lived assets	10,267,673	10,197,109	9,740,417
Geography Eliminations
Net revenues
Inter-segment sales and transfers	(8,006,406)	(7,134,700)	(7,283,744)
Total net revenues	(8,006,406)	(7,134,700)	(7,283,744)
Operating expenses	(7,986,563)	(7,134,004)	(7,300,860)
Operating income (loss)	(19,843)	(696)	17,116
Assets	6,348,099	6,440,555	6,906,161
Japan | Reportable Geographical Components
Net revenues
Sales to external customers	9,273,672	8,798,903	8,588,437
Inter-segment sales and transfers	6,751,172	6,031,965	6,171,051
Total net revenues	16,024,844	14,830,868	14,759,488
Operating expenses	14,364,926	13,628,623	13,081,966
Operating income (loss)	1,659,918	1,202,245	1,677,522
Assets	15,797,024	14,791,969	14,291,434
Long-lived assets	3,511,663	3,376,157	3,210,376
North America | Reportable Geographical Components
Net revenues
Sales to external customers	10,347,266	10,033,419	10,822,772
Inter-segment sales and transfers	227,144	205,672	229,198
Total net revenues	10,574,410	10,239,091	11,051,970
Operating expenses	10,435,511	9,927,897	10,523,151
Operating income (loss)	138,899	311,194	528,819
Assets	16,936,704	17,365,237	16,622,979
Long-lived assets	5,179,139	5,274,928	4,958,989
Europe | Reportable Geographical Components
Net revenues
Sales to external customers	2,940,243	2,517,601	2,507,292
Inter-segment sales and transfers	244,981	163,438	154,039
Total net revenues	3,185,224	2,681,039	2,661,331
Operating expenses	3,110,198	2,693,283	2,588,915
Operating income (loss)	75,026	(12,244)	72,416
Assets	3,346,179	2,846,469	2,612,210
Long-lived assets	359,355	313,182	309,657
Asia | Reportable Geographical Components
Net revenues
Sales to external customers	4,497,374	4,279,617	4,475,623
Inter-segment sales and transfers	650,765	540,204	528,236
Total net revenues	5,148,139	4,819,821	5,003,859
Operating expenses	4,714,940	4,384,642	4,554,670
Operating income (loss)	433,199	435,179	449,189
Assets	4,893,582	4,486,021	4,415,700
Long-lived assets	797,435	828,619	869,989
Other Countries | Reportable Geographical Components
Net revenues
Sales to external customers	2,320,955	1,967,653	2,008,994
Inter-segment sales and transfers	132,344	193,421	201,220
Total net revenues	2,453,299	2,161,074	2,210,214
Operating expenses	2,340,636	2,102,380	2,101,305
Operating income (loss)	112,663	58,694	108,909
Assets	2,986,661	2,819,935	2,579,113
Long-lived assets	¥ 420,081	¥ 404,223	¥ 391,406

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Segment data - Additional Information (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Segment Reporting Information [Line Items]
Total assets	¥ 50,308,249	¥ 48,750,186	¥ 47,427,597
Corporate
Segment Reporting Information [Line Items]
Total assets	¥ 9,386,399	¥ 9,177,953	¥ 9,369,868

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Segment data (Revenues that are Attributed to Countries Based on Location of Customers, Excluding Customers in Japan (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues	¥ 29,379,510	¥ 27,597,193	¥ 28,403,118
North America
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues	10,403,647	10,054,431	10,797,304
Europe
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues	2,730,915	2,341,364	2,323,399
Asia
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues	4,793,110	4,414,236	4,292,800
Other Countries
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues	¥ 4,186,666	¥ 3,923,621	¥ 4,724,784

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Segment data (Balance Sheets - Non-financial Services and Financial Services Businesses) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2015
Current assets
Cash and cash equivalents	¥ 3,052,269	¥ 2,995,075	¥ 2,939,428	¥ 2,284,557
Marketable securities	1,768,360	1,821,598
Finance receivables, net	6,348,306	6,196,649
Inventories	2,539,789	2,388,617
Prepaid expenses and other current assets	833,788	796,297
Total current assets	18,152,656	17,833,695
Noncurrent finance receivables, net	9,481,618	9,012,222
Investments and other assets	12,406,302	11,707,160
Property, plant and equipment	10,267,673	10,197,109	9,740,417
Total assets	50,308,249	48,750,186	47,427,597
Current liabilities
Short-term borrowings	5,154,913	4,953,682
Current portion of long-term debt	4,186,277	4,290,449
Accounts payable	2,586,657	2,566,382
Accrued expenses	3,104,260	3,137,827
Income taxes payable	462,327	223,574
Other current liabilities	1,254,241	1,210,113
Total current liabilities	17,796,891	17,318,965
Long-term liabilities
Long-term debt	10,006,374	9,911,596
Accrued pension and severance costs	931,182	905,070
Other long-term liabilities	533,561	521,876
Total long-term liabilities	12,589,282	12,762,268
Total liabilities	30,386,173	30,081,233
Mezzanine equity	491,974	485,877
Total Toyota Motor Corporation shareholders' equity	18,735,982	17,514,812
Noncontrolling interests	694,120	668,264
Total shareholders' equity	19,430,102	18,183,076	17,608,407	17,647,329
Total liabilities, mezzanine equity and shareholders' equity	50,308,249	48,750,186
Eliminations
Current assets
Total assets	(1,110,927)	(999,385)
Long-term liabilities
Total liabilities	(1,110,934)	(999,392)
Non Financial Services Businesses
Current assets
Cash and cash equivalents	2,390,524	2,257,064	2,318,152	1,680,994
Marketable securities	1,546,459	1,439,944
Trade accounts and notes receivable, less allowance for doubtful accounts	2,304,676	2,191,594
Inventories	2,539,497	2,388,394
Prepaid expenses and other current assets	1,818,687	1,988,016
Total current assets	10,599,843	10,265,012
Investments and other assets	11,861,394	11,276,128
Property, plant and equipment	5,901,958	5,700,818
Total assets	28,363,195	27,241,958
Current liabilities
Short-term borrowings	541,968	669,947
Current portion of long-term debt	179,994	196,227
Accounts payable	2,556,393	2,540,078
Accrued expenses	2,980,981	3,038,218
Income taxes payable	429,616	203,101
Other current liabilities	1,797,724	1,512,662
Total current liabilities	8,486,676	8,160,233
Long-term liabilities
Long-term debt	642,691	590,366
Accrued pension and severance costs	917,133	890,684
Other long-term liabilities	1,111,843	1,206,427
Total long-term liabilities	2,671,667	2,687,477
Total liabilities	11,158,343	10,847,710
Financial Services Business
Current assets
Cash and cash equivalents	661,745	738,011	¥ 621,276	¥ 603,563
Marketable securities	221,901	381,654
Finance receivables, net	6,348,306	6,196,649
Prepaid expenses and other current assets	957,122	831,924
Total current assets	8,189,074	8,148,238
Noncurrent finance receivables, net	9,481,618	9,012,222
Investments and other assets	1,019,574	850,862
Property, plant and equipment	4,365,715	4,496,291
Total assets	23,055,981	22,507,613
Current liabilities
Short-term borrowings	4,929,478	4,605,389
Current portion of long-term debt	4,053,538	4,129,005
Accounts payable	40,251	33,283
Accrued expenses	145,127	117,773
Income taxes payable	32,711	20,473
Other current liabilities	870,634	833,813
Total current liabilities	10,071,739	9,739,736
Long-term liabilities
Long-term debt	9,574,118	9,491,504
Accrued pension and severance costs	14,049	14,386
Other long-term liabilities	678,858	987,289
Total long-term liabilities	10,267,025	10,493,179
Total liabilities	¥ 20,338,764	¥ 20,232,915

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Segment data (Statements of Income - Non-financial Services and Financial Services Businesses) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Net revenues	¥ 29,379,510	¥ 27,597,193	¥ 28,403,118
Costs and expenses
Selling, general and administrative	3,090,495	2,868,485	2,943,682
Total costs and expenses	26,979,648	25,602,821	25,549,147
Operating income	2,399,862	1,994,372	2,853,971
Other income (expense), net	220,567	199,453	129,410
Income before income taxes and equity in earnings of affiliated companies	2,620,429	2,193,825	2,983,381
Provision for income taxes	504,406	628,900	878,269
Equity in earnings of affiliated companies	470,083	362,060	329,099
Net income	2,586,106	1,926,985	2,434,211
Less - Net income attributable to noncontrolling interests	(92,123)	(95,876)	(121,517)
Net income attributable to Toyota Motor Corporation	2,493,983	1,831,109	2,312,694
Eliminations
Costs and expenses
Net income attributable to Toyota Motor Corporation	(2)	147	300
Non Financial Services Businesses
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Net revenues	27,448,165	25,845,453	26,581,102
Costs and expenses
Cost of revenues	22,613,450	21,557,194	21,474,386
Selling, general and administrative	2,721,362	2,511,647	2,589,082
Total costs and expenses	25,334,812	24,068,841	24,063,468
Operating income	2,113,353	1,776,612	2,517,634
Other income (expense), net	222,326	200,370	117,930
Income before income taxes and equity in earnings of affiliated companies	2,335,679	1,976,982	2,635,564
Provision for income taxes	738,763	562,452	752,248
Equity in earnings of affiliated companies	467,718	360,130	327,167
Net income	2,064,634	1,774,660	2,210,483
Less - Net income attributable to noncontrolling interests	(89,533)	(89,337)	(117,544)
Net income attributable to Toyota Motor Corporation	1,975,101	1,685,323	2,092,939
Financial Services Business
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Net revenues	2,017,008	1,823,600	1,896,224
Costs and expenses
Cost of revenues	1,320,348	1,221,268	1,181,437
Selling, general and administrative	411,114	379,904	375,561
Total costs and expenses	1,731,462	1,601,172	1,556,998
Operating income	285,546	222,428	339,226
Other income (expense), net	(794)	(5,618)	8,579
Income before income taxes and equity in earnings of affiliated companies	284,752	216,810	347,805
Provision for income taxes	(234,356)	66,583	126,319
Equity in earnings of affiliated companies	2,365	1,930	1,932
Net income	521,473	152,157	223,418
Less - Net income attributable to noncontrolling interests	(2,589)	(6,518)	(3,963)
Net income attributable to Toyota Motor Corporation	¥ 518,884	¥ 145,639	¥ 219,455

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Segment data (Statement of Cash Flows - Non-financial Services and Financial Services Businesses) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Cash flows from operating activities
Net income	¥ 2,586,106	¥ 1,926,985	¥ 2,434,211
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation	1,734,033	1,610,950	1,625,837
Provision for doubtful accounts and credit losses	76,069	98,666	159,265
Pension and severance costs, less payments	4,286	23,253	8,833
Losses on disposal of fixed assets	35,289	30,673	33,329
Unrealized losses on available-for-sale securities, net	846	7,073	9,272
Deferred income taxes	(237,961)	(53,299)	32,889
Equity in earnings of affiliated companies	(470,083)	(362,060)	(329,099)
Changes in operating assets and liabilities, and other	481,424	131,996	486,320
Net cash provided by operating activities	4,210,009	3,414,237	4,460,857
Cash flows from investing activities
Additions to finance receivables	(15,058,516)	(13,636,694)	(13,549,278)
Collection of and proceeds from sales of finance receivables	14,046,312	12,927,981	13,115,854
Additions to fixed assets excluding equipment leased to others	(1,291,117)	(1,223,878)	(1,282,545)
Additions to equipment leased to others	(2,307,590)	(2,317,559)	(2,776,671)
Proceeds from sales of fixed assets excluding equipment leased to others	71,820	41,238	42,147
Proceeds from sales of equipment leased to others	1,211,272	1,238,278	1,111,727
Purchases of marketable securities and security investments	(3,052,916)	(2,517,008)	(2,197,477)
Proceeds from sales of and maturity of marketable securities and security investments	2,523,538	1,901,541	3,415,815
Payment for additional investments in affiliated companies, net of cash acquired	(576)	44,274	628
Changes in investments and other assets, and other	197,681	571,888	(1,062,744)
Net cash used in investing activities	(3,660,092)	(2,969,939)	(3,182,544)
Cash flows from financing activities
Proceeds from issuance of long-term debt	4,793,939	4,603,446	4,845,872
Payments of long-term debt	(4,452,338)	(3,845,554)	(4,176,202)
Increase (decrease) in short-term borrowings	347,738	273,037	(10,903)
Proceeds from issuance of class shares			474,917
Dividends paid to Toyota Motor Corporation class shareholders	(6,194)	(3,697)	(1,225)
Dividends paid to Toyota Motor Corporation common shareholders	(620,698)	(634,475)	(704,728)
Dividends paid to noncontrolling interests	(63,764)	(63,936)	(73,129)
Reissuance (repurchase) of treasury stock, and other	(447,818)	(703,986)	(778,173)
Net cash provided by (used in) financing activities	(449,135)	(375,165)	(423,571)
Effect of exchange rate changes on cash and cash equivalents	(43,588)	(13,486)	(199,871)
Net increase (decrease) in cash and cash equivalents	57,194	55,647	654,871
Cash and cash equivalents at beginning of year	2,995,075	2,939,428	2,284,557
Cash and cash equivalents at end of year	3,052,269	2,995,075	2,939,428
Non Financial Services Businesses
Cash flows from operating activities
Net income	2,064,634	1,774,660	2,210,483
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation	1,010,972	939,795	927,846
Provision for doubtful accounts and credit losses	(74)	6,519	69,029
Pension and severance costs, less payments	5,027	21,796	8,300
Losses on disposal of fixed assets	35,010	30,461	33,293
Unrealized losses on available-for-sale securities, net	459	4,422	3,217
Deferred income taxes	64,143	(59,668)	(43,237)
Equity in earnings of affiliated companies	(467,718)	(360,130)	(327,167)
Changes in operating assets and liabilities, and other	205,434	206,455	386,529
Net cash provided by operating activities	2,917,887	2,564,310	3,268,293
Cash flows from investing activities
Additions to fixed assets excluding equipment leased to others	(1,276,788)	(1,206,738)	(1,265,174)
Additions to equipment leased to others	(155,114)	(152,550)	(155,931)
Proceeds from sales of fixed assets excluding equipment leased to others	70,755	40,189	41,154
Proceeds from sales of equipment leased to others	63,402	72,659	60,989
Purchases of marketable securities and security investments	(2,273,805)	(2,104,202)	(1,302,965)
Proceeds from sales of and maturity of marketable securities and security investments	1,762,189	1,435,267	2,471,876
Payment for additional investments in affiliated companies, net of cash acquired	(576)	44,274	628
Changes in investments and other assets, and other	260,015	582,649	(1,371,996)
Net cash used in investing activities	(1,549,922)	(1,288,452)	(1,521,419)
Cash flows from financing activities
Proceeds from issuance of long-term debt	212,387	111,727	110,691
Payments of long-term debt	(170,072)	(82,840)	(71,758)
Increase (decrease) in short-term borrowings	(122,222)	51,523	75,990
Proceeds from issuance of class shares			474,917
Dividends paid to Toyota Motor Corporation class shareholders	(6,194)	(3,697)	(1,225)
Dividends paid to Toyota Motor Corporation common shareholders	(620,698)	(634,475)	(704,728)
Dividends paid to noncontrolling interests	(63,764)	(63,936)	(73,129)
Reissuance (repurchase) of treasury stock, and other	(447,818)	(703,986)	(778,173)
Net cash provided by (used in) financing activities	(1,218,381)	(1,325,684)	(967,415)
Effect of exchange rate changes on cash and cash equivalents	(16,124)	(11,262)	(142,301)
Net increase (decrease) in cash and cash equivalents	133,460	(61,088)	637,158
Cash and cash equivalents at beginning of year	2,257,064	2,318,152	1,680,994
Cash and cash equivalents at end of year	2,390,524	2,257,064	2,318,152
Financial Services Business
Cash flows from operating activities
Net income	521,473	152,157	223,418
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation	723,061	671,155	697,991
Provision for doubtful accounts and credit losses	76,143	92,147	90,236
Pension and severance costs, less payments	(741)	1,457	533
Losses on disposal of fixed assets	279	212	36
Unrealized losses on available-for-sale securities, net	387	2,651	6,055
Deferred income taxes	(302,103)	6,504	76,423
Equity in earnings of affiliated companies	(2,365)	(1,930)	(1,932)
Changes in operating assets and liabilities, and other	299,709	103,840	148,376
Net cash provided by operating activities	1,315,843	1,028,193	1,241,136
Cash flows from investing activities
Additions to finance receivables	(25,153,088)	(22,894,114)	(23,399,113)
Collection of and proceeds from sales of finance receivables	24,117,335	22,006,010	22,918,132
Additions to fixed assets excluding equipment leased to others	(14,329)	(17,140)	(17,371)
Additions to equipment leased to others	(2,152,476)	(2,165,009)	(2,620,740)
Proceeds from sales of fixed assets excluding equipment leased to others	1,065	1,049	993
Proceeds from sales of equipment leased to others	1,147,870	1,165,619	1,050,738
Purchases of marketable securities and security investments	(779,111)	(412,806)	(894,512)
Proceeds from sales of and maturity of marketable securities and security investments	761,349	466,274	943,939
Changes in investments and other assets, and other	(106,597)	(60,345)	296,788
Net cash used in investing activities	(2,177,982)	(1,910,462)	(1,721,146)
Cash flows from financing activities
Proceeds from issuance of long-term debt	4,666,579	4,541,541	4,815,323
Payments of long-term debt	(4,314,294)	(3,773,644)	(4,127,178)
Increase (decrease) in short-term borrowings	461,052	233,331	(132,852)
Net cash provided by (used in) financing activities	813,337	1,001,228	555,293
Effect of exchange rate changes on cash and cash equivalents	(27,464)	(2,224)	(57,570)
Net increase (decrease) in cash and cash equivalents	(76,266)	116,735	17,713
Cash and cash equivalents at beginning of year	738,011	621,276	603,563
Cash and cash equivalents at end of year	¥ 661,745	¥ 738,011	¥ 621,276

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Per share amounts (Reconciliations of Differences Between Basic and Diluted Net Income Attributable to Toyota Motor Corporation Per Common Share) (Detail) - JPY (¥) ¥ / shares in Units, shares in Thousands, ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Earnings Per Share Disclosure [Line Items]
Net income attributable to Toyota Motor Corporation	¥ 2,493,983	¥ 1,831,109	¥ 2,312,694
Accretion to Mezzanine equity	(4,849)	(4,849)	(3,638)
Dividends to Toyota Motor Corporation Model AA Class Shareholders	(7,442)	(4,946)	(2,449)
Net income attributable to Toyota Motor Corporation, basic	2,481,692	1,821,314	2,306,607
Effect of dilutive securities
Model AA Class Shares	12,291	9,795	6,087
Assumed exercise of dilutive stock options	(4)	(6)	(21)
Net income attributable to Toyota Motor Corporation, diluted	¥ 2,493,979	¥ 1,831,103	¥ 2,312,673
Weighted-average shares, basic	2,947,365	3,008,088	3,111,306
Effect of dilutive securities
Model AA Class Shares	47,100	47,100	32,429
Assumed exercise of dilutive stock options	301	638	1,212
Weighted-average shares, diluted	2,994,766	3,055,826	3,144,947
Net income attributable to Toyota Motor Corporation per share, basic	¥ 842.00	¥ 605.47	¥ 741.36
Net income attributable to Toyota Motor Corporation per share, diluted	¥ 832.78	¥ 599.22	¥ 735.36

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Per share amounts (Toyota Motor Corporation Shareholders' Equity Per Share) (Detail) - JPY (¥) ¥ / shares in Units, shares in Thousands, ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Total Toyota Motor Corporation shareholders' equity	¥ 18,735,982	¥ 17,514,812
Common shares issued and outstanding at the end of the year (excluding treasury stock)	2,909,924	2,974,723
Toyota Motor Corporation shareholders' equity per share	¥ 6,438.65	¥ 5,887.88

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Fair value measurements (Fair Values of Assets and Liabilities Measured at Fair Value on Recurring Basis) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Assets
Derivative financial instruments	¥ 257,804	¥ 243,421
Liabilities
Derivative financial instruments	(197,156)	(245,457)
Fair Value, Measurements, Recurring
Assets
Cash equivalents	819,106	933,482
Time deposits	400,000	600,000
Derivative financial instruments	257,804	243,421
Total	11,104,738	11,176,236
Liabilities
Derivative financial instruments	(197,156)	(245,457)
Total	(197,156)	(245,457)
Fair Value, Measurements, Recurring | Public and Corporate Bonds
Assets
Marketable securities and other securities investments	6,308,734	5,885,831
Fair Value, Measurements, Recurring | Common stocks
Assets
Marketable securities and other securities investments	2,582,115	2,686,934
Fair Value, Measurements, Recurring | Other Investments
Assets
Marketable securities and other securities investments	220,028	91,437
Fair Value, Measurements, Recurring | Investments
Assets
Marketable securities and other securities investments	516,951	735,131
Level 1 | Fair Value, Measurements, Recurring
Assets
Cash equivalents	44,897	41,876
Total	7,574,313	7,544,500
Level 1 | Fair Value, Measurements, Recurring | Public and Corporate Bonds
Assets
Marketable securities and other securities investments	4,778,019	4,797,499
Level 1 | Fair Value, Measurements, Recurring | Common stocks
Assets
Marketable securities and other securities investments	2,582,115	2,686,934
Level 1 | Fair Value, Measurements, Recurring | Other Investments
Assets
Marketable securities and other securities investments	169,282	18,191
Level 2 | Fair Value, Measurements, Recurring
Assets
Cash equivalents	774,209	891,606
Time deposits	400,000	600,000
Derivative financial instruments	257,795	243,334
Total	3,005,977	2,887,571
Liabilities
Derivative financial instruments	(194,935)	(237,848)
Total	(194,935)	(237,848)
Level 2 | Fair Value, Measurements, Recurring | Public and Corporate Bonds
Assets
Marketable securities and other securities investments	1,523,227	1,079,385
Level 2 | Fair Value, Measurements, Recurring | Other Investments
Assets
Marketable securities and other securities investments	50,746	73,246
Level 3 | Fair Value, Measurements, Recurring
Assets
Derivative financial instruments	9	87
Total	7,497	9,034
Liabilities
Derivative financial instruments	(2,221)	(7,609)
Total	(2,221)	(7,609)
Level 3 | Fair Value, Measurements, Recurring | Public and Corporate Bonds
Assets
Marketable securities and other securities investments	¥ 7,488	¥ 8,947

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Fair value measurements - Additional Information (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Level 3
Fair Value Measurements [Line Items]
Finance receivables, fair value	¥ 45,492	¥ 47,999
Level 3 | Financing receivable
Fair Value Measurements [Line Items]
Fair value, assets measured on nonrecurring basis, gain (loss)	¥ 4,190	¥ 2,405
Japanese bonds | Available-for-sale Securities | Public and Corporate Bonds
Fair Value Measurements [Line Items]
Percentage of Assets	16.00%	28.00%
U.S., European and other bonds | Available-for-sale Securities | Public and Corporate Bonds
Fair Value Measurements [Line Items]
Percentage of Assets	84.00%	72.00%
Japan | Available-for-sale Securities | Common stocks
Fair Value Measurements [Line Items]
Percentage of Assets	93.00%	92.00%
Maximum
Fair Value Measurements [Line Items]
Cash equivalents maturity period	3 months
Maximum | Level 2 | Cash Equivalents
Fair Value Measurements [Line Items]
Negotiable certificate of deposit original maturities	3 months
Minimum | Level 2 | Time Deposit
Fair Value Measurements [Line Items]
Negotiable certificate of deposit original maturities	3 months

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Fair value measurements (Changes in Level 3 Assets and Liabilities Measured at Fair Value on Recurring Basis) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Balance at beginning of year	¥ 1,425	¥ 13,183	¥ 13,327
Total gains (losses)
Included in income (loss)	822	(7,326)	2,508
Included in other comprehensive income (loss)	(12)	60	(286)
Purchases and issuances	3,860	1,126	931
Settlements	(419)	(4,975)	(1,930)
Other	(400)	(643)	(1,367)
Balance at end of year	5,276	1,425	13,183
Derivative financial instruments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Balance at beginning of year	(7,522)	2,849	1,010
Total gains (losses)
Included in income (loss)	805	(7,310)	2,507
Settlements	4,320	(2,693)	(479)
Other	185	(368)	(189)
Balance at end of year	(2,212)	(7,522)	2,849
Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Balance at beginning of year	8,947	10,334	12,317
Total gains (losses)
Included in income (loss)	17	(16)	1
Included in other comprehensive income (loss)	(12)	60	(286)
Purchases and issuances	3,860	1,126	931
Settlements	(4,739)	(2,282)	(1,451)
Other	(585)	(275)	(1,178)
Balance at end of year	¥ 7,488	¥ 8,947	¥ 10,334