SEMI-ANNUAL REPORT 2004

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					                           SEMI-ANNUAL REPORT
                             APRIL— SEPTEMBER 2004




TOYOTA MOTOR CORPORATION
    Consolidated Financial Highlight (U.S. GAAP)

                                                                                                      Yen in millions except per share data
                                                               FY2005 semi-annual                   FY2004 semi-annual       % change from previous                      FY2004
                                                                                                                             semi-annual

    Net revenues .................................                  9,025,665                         8,224,241                                 9.7               17,294,760
    Operating income .........................                        866,249                           767,769                                12.8                1,666,890
    Income before income taxes,
    minority interest and equity in
    earnings of affiliated companies ...                               913,215                          812,013                                12.5                1,765,793
    Net income ....................................                    584,038                          524,460                                11.4                1,162,098
    Per share data (yen):
        Net income (Basic) .................                            176.32                            153.36                               15.0                    342.90
        Net income (Diluted)...............                             176.28                            153.35                               15.0                    342.86
        Shareholders’ equity...............                           2,602.72                          2,228.52                               16.8                  2,456.08
        Interim cash dividends
        per common share .................                                      25                                 20                          25.0                                   45
    At the end of each period
    Total assets ...................................              23,310,194                        20,777,120                                 12.2               22,040,228
    Shareholders’ equity .....................                     8,542,076                         7,572,474                                 12.8                8,178,567

     Net revenues          (¥ Billion)                             Net income         (¥ Billion)                                Cash Dividends per share                       (¥)

    20,000                                                        1,200                                                            50




                                                                                                                                   40
    15,000                                                          900
                                                                                                                                                                           ¥ 25

                                                                                                                                   30
                                         ¥ 9,025 billion                                                 ¥ 584 billion
    10,000                                                          600

                                                                                                                                   20



     5,000                                                          300
                                                                                                                                   10




        0                                                             0                                                             0
       FY    ’01   ’02   ’03    ’04      ’05                         FY   ’01   ’02   ’03       ’04    ’05                         FY    ’00    ’01   ’02   ’03    ’04    ’05




       Cautionary Statement with Respect to Forward-Looking Statements
       This report contains forward-looking statements that reflect Toyota’s plans and expectations. These forward-looking statements are not guarantees of future
       performance and involve known and unknown risks, uncertainties and other factors that may cause Toyota’s actual results, performance, achievements or financial
       position to be materially different from any future results, performance, achievements or financial position expressed or implied by these forward-looking
       statements. These factors include: (i) changes in economic conditions and market demand affecting, and the competitive environment in, the automotive markets in
       Japan, North America, Europe 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 and the British pound; (iii) Toyota’s ability to realize production efficiencies and to implement capital
       expenditures at the levels and times planned by management; (iv) 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 policies relating to trade, environmental protection, vehicle emissions, vehicle fuel
       economy and vehicle safety, as well as changes in laws, regulations and government policies that affect Toyota’s other operations, including the outcome of future
       litigation and other legal proceedings; (v) political instability in the markets in which Toyota operates; (vi) Toyota’s ability to timely develop and achieve market
       acceptance of new products; and (vii) fuel shortages or interruptions in 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. A discussion of these and other factors which may affect Toyota’s actual results, performance, achievements or financial
       position is contained in Toyota’s annual report on Form 20-F, which is on file with the United States Securities and Exchange Commission.
1
To Our Shareholders


Performance Overview
   In the semi-annual period ended September 30, 2004, Toyota continued to perform strongly.
Efforts to build a globally balanced operational system and market attractive products that
accurately reflect demand helped us to sell a record 3.56 million vehicles worldwide on a
consolidated basis. As a result, we posted new highs for net revenues and operating income for
the fifth consecutive semi-annual period. The maintenance of a high operating income margin of
9.6% testified to Toyota’s simultaneous achievement of growth and efficiency. Further, we raised
the FY 2005 interim cash dividend ¥5.00 to ¥25.00 per share compared with the FY 2004 interim
dividend.

Regional Breakdown
   In Japan, despite unfavorable market conditions, Toyota increased its market share thanks to
brisk sales of such new models as the Crown Majesta. In North America, we captured our highest-
ever share of the U.S. market due to continued favorable sales of the Siena, the Prius, and other
vehicles as well as to the growing popularity of Scion-marque cars, which we began marketing
across the United States in June 2004. In Europe, sales remained strong on the back of
favorable performances by core models, including the Avensis and the Corolla. In Asia, we
developed new pickup trucks and multi-purpose vehicles as part of the IMV project, the aim of
which is to build an optimal production and supply system on a global scale. Production under the
IMV project started smoothly in Thailand and Indonesia.

Management Strategy
   We believe that the automobile industry still has huge potential for growth and expect that
competition among automakers in markets worldwide will continue to intensify. In response to that
business environment, Toyota will focus on the following issues over the medium-to-long term:
reinforcing development of environmental technologies; developing and supplying products that
anticipate customer needs; creating a globally balanced business structure that efficiently utilizes
group resources; and promoting the development of human resources, which is the source of
corporate competitiveness.
   By addressing those issues, we will seek to increase shareholder value. At the same time, we
aim to become a company that can successfully compete on a global scale while continuing to
grow in the 21st century and to become a global company that is trusted worldwide and
contributes to the development of a prosperous society. With sincerity and humility, we will
therefore pursue growth in harmony with society.

  In closing, we ask all of our shareholders for their continued support.

  December 2004




                                          Hiroshi Okuda, Chairman       Fujio Cho, President

                                                                                                       2
    Consolidated Financial Overview of FY 2005 Semi-Annual by Segment


                                                                              Financial Services —                     *% change from previous semi-annual
    Segment Operating Results                                                 Net revenues                       ¥ 384.4 billion                         + 3.5%*
                                                                              Operating income                   ¥ 102.7 billion                         + 66.4%*
    In the semi-annual term, all segments—the
                                                                              The increase in operating income was primarily due
    Automotive, Financial Services, and All Other
                                                                              to solid performance as a result of an increase in
    business segments—posted year-on-year increases
                                                                              financing volumes.
    in revenues and operating income. Mainstay
    automotive operations accounted for higher earnings
                                                                              All Other —                              *% change from previous semi-annual
    as production and vehicle unit sales remained
    favorable, while income from financial services                           Net revenues                       ¥ 466.8 billion                         + 15.7%*
    operations rose significantly due to steady growth in                     Operating income                        ¥ 12.7 billion                   + 110.8%*
    financing volumes.                                                        Operating Income for all other businesses in FY 2005
                                                                              semi-annual results increased compared with FY
    Automotive —                     *% change from previous semi-annual
                                                                              2004 semi-annual results.
    Net revenues                 ¥ 8,339.6 billion           + 9.9%*
    Operating income                ¥ 756.8 billion          + 7.7%*
    The increase in operating income was mainly due to
    increases in vehicle units sold in all regions,
    including Japan, North America and Asia, and cost
    reduction efforts made by Toyota Motor Corporation
    (TMC) and its subsidiaries, partially offset by
    increases in R&D and other expenses.


     Vehicle Sales     (Thousands of units)                                 Operating income: Automotive Operations         Operating income: Financial Services Operations
                                                                           (¥ Billion)                                     (¥ Billion)
    7,500                                                                  2,000                                              150




    6,000
                                                                           1,500

                                                                                                                              100
    4,500

                                                                           1,000

    3,000
                                                                                                                                50

                                                                              500
    1,500




       0                                                                          0                                               0
      FY    ’01        ’02            ’03        ’04         ’05                FY       ’03   ’04   ’05                        FY       ’03     ’04       ’05


3
Geographic Information
Vehicle unit sales and revenues were up in all                                increases in both local production volume and
regions. Although Japan saw a decline in operating                            vehicle units sold, as well as cost reduction efforts
income due to the impact of currency exchange rate                            made by manufacturing subsidiaries.
fluctuations, North America, Europe, and Other
foreign countries achieved large increases.                                   Europe —                          *% change from previous semi-annual

                                                                              Net revenues               ¥ 1,201.3 billion                  + 16.4%*
Japan —                             *% change from previous semi-annual
                                                                              Operating income                 ¥ 66.3 billion             + 194.9%*
Net revenues                 ¥ 5,780.6 billion                 + 5.2%*
                                                                              The increase in operating income was mainly due to
Operating income               ¥ 490.6 billion                 - 7.4%*        increases in local production volumes in Turkey,
The decrease in operating income was mainly due to the                        France and the United Kingdom, as well as
impact from currency exchange rate changes as well as                         substantial increases in vehicle units sold.
increase in R&D expenses and other costs, partially
offset by cost reduction efforts made by TMC and its                          Other foreign countries —
                                                                                                                *% change from previous semi-annual
subsidiaries and increases in vehicle units sold.
                                                                              Net revenues                ¥ 1,332.3billion                  + 20.8%*
North America —                     *% change from previous semi-annual       Operating income                 ¥ 70.9 billion               + 33.0%*
Net revenues                 ¥ 3,189.7 billion                 + 5.8%*        The increase in operating income was primarily due
Operating income               ¥ 244.7 billion                 + 49.6%*       to increases in local production volumes as well as
The increase in operating income was mainly due to                            vehicle units sold mainly in Asia.


  Operating income
 (¥ Billion)                  (%)       (¥ Billion)                   (%)   (¥ Billion)                  (%)      (¥ Billion)                   (%)
1,500                         15           500                        15       100                       15          150                        15
               Japan                                  North America                       Europe                                Other foreign
                                                                                                                                countries
1,200                         12           400                        12         80                      12          120                        12




    900                        9           300                        9          60                       9            90                        9




    600                        6           200                         6         40                       6            60                        6




    300                        3           100                         3         20                       3            30                        3




        0                      0               0                       0           0                      0              0                       0
      FY         ’04   ’05                   FY         ’04    ’05               FY         ’04    ’05                 FY          ’04    ’05


                                                                                                                                                       4
    Topics


    Regional Strategy
    Japan: Realigning    Brand Channels—New Product and
            Distribution Strategy


    Aiming to revitalize the Toyota brand and
    heighten marketing efficiency, we reorganized
    our five existing brand channels into four in
    May 2004. The post-realignment strategy
    focuses Toyota channel on high-end vehicles,
    Toyopet channel on mid-range products, and
    Corolla channel on compact cars. Moreover,
                                                          Lexus dealer image
    our new Netz channel—created by merging the
    former Vista and Netz channels—will cultivate
    untapped markets by concentrating on                  North America: Leveraging       Scion to Cultivate a New
    progressive, differentiated lineups. We aim to                             Customer Segment
    carve out a larger market share by leveraging
    each channel to raise brand value.                    Following on from the marketing of the xA and
                                                          the xB in June 2003 in California, we debuted
                                                          the tC—designed exclusively for the U.S.
                                                          market—in July 2004. At the same time, we
                               The new Netz logo          stepped up efforts to target young customers
    Also, plans call for the introduction of the Lexus    by launching Scion-marque vehicles at more
    brand into the Japanese market in August              than 700 dealers throughout the United States.
    2005. We hope to further entrench competitive         Internet sales and a personal specifications
    dominance in our home market by using this            concept that allows customers to freely
    global, premium brand to meet the increasing          combine more than 40 optional parts when
    demand for cars that offer a “sense of the best”      ordering a car have captured the imagination
    as well as individuality. In the first year, Toyota   of younger consumers. As a result, we believe
    plans to offer four Lexus models through 180                                             we are
    dealers. We expect then to steadily open more                                            successfully
    dealerships and increase the number of                                                   cultivating a
    models carried by the Lexus channel.                                                     new customer
                                                                                             base of first-
                                                                                             time Toyota
                                                                                             buyers.


                                                          Scion tC



5
                             Isis                          PASSO                                Porte                        HIACE




Europe: Expanding         Operations by Increasing Local
            Production
                                                                   China, Guangzhou Toyota Motor Co., Ltd.. With
                                                                   an annual production capacity of 100 thousand
                                         In line with efforts to   vehicles, it is expected that the new company
                                         advance local                                                              will begin
                                         production, we                                                             manufacturing
                                         increased annual                                                           and selling the
                                         production capacity                                                        Camry from
                                         at Toyota Motor                                                            mid-2006.
                                         Manufacturing                                                              As a result,
Toyota Motor Manufacturing France (TMMF)                                                                            Toyota plans
                                         France (TMMF) from
184 thousand to 210 thousand vehicles in May                                                                        to raise its
2004. Along with an increase in production                                                                          total annual
capacity at our plant in Turkey (Toyota Motor                      Signing ceremony with Guangzhou Automobile Group
                                                                                                                     production
Manufacturing Turkey) in March 2004 and a                                                                            capacity in
slated raising of capacity at Toyota Motor                         China to 335 thousand vehicles by 2006. We
Manufacturing UK (TMUK), we expect annual                          intend to enhance lineups by continuing to
production capacity to reach 645 thousand                          actively bring new products to the market.
vehicles next year. Also, Toyota and PSA                           Also in September 2004, we concluded an
Peugeot Citroën plan to start manufacturing                        agreement with China FAW Group Corporation
small passenger cars in the Czech Republic                         to jointly promote the widespread use of high-
starting in 2005. Our market share is                              quality, high-performance hybrid vehicles built
approaching 5% thanks to seven straight years                      in China. Plans call for beginning assembly of
of vehicle sales growth in Europe’s fiercely                       the Prius by the end of 2005. Moreover, both
competitive market. Toyota intends to continue                     sides agreed to consider future possibility of an
curbing the average CO2 emissions of its                           FAW-branded vehicle featuring a hybrid
vehicles while enhancing profitability by                                                                            system based
increasing sales of locally produced vehicles                                                                        on Toyota
and expanding lineups of diesel vehicles—                                                                            technology.
which account for roughly half of the European
market.


China: Expanding Operations Dramatically

In September 2004, Toyota and Guangzhou
Automobile Group Co., Ltd. established a joint                     Signing ceremony with China FAW Group Corporation
vehicle production and sales company in
                                                                                                                                      6
    Production Strategy
    IMV Project—Building an Optimal Production
    System

    In August 2004, we unveiled the Hilux VIGO                     resources and potential of outside-Japan
    new-model pickup in Thailand as the first                      global production and supply bases for both
    installment of the IMV (Innovative International               vehicles and components. It is also remarkable
    Multi-Purpose Vehicle) series. Also, in                        for fact that production will start almost at the
    Indonesia, we began rolling out a new minivan,                 same time at its four main production bases of
    the Kijang Innova, as an addition to the IMV                   Thailand, Indonesia, Argentina, and South
    range in September 2004.                                       Africa, which will supply vehicles to markets in
    Initially, the globalization of Toyota’s business              more than 140 countries. Moreover, the project
    activities was centered on production in Japan                 includes the production of components in
    and exporting abroad. This was gradually                       Thailand, Indonesia, and India for supply to the
    followed by efforts to build where sold. Today,                vehicle-producing countries. Toyota hopes to
    as free trade agreements become increasingly                   benefit the automobile industries and
    common, Toyota aims to offer more-attractive                   economies of each country involved in the IMV
    products worldwide and at the same time by                     project
    building production and supply structures that
    improve efficiency through global scale. We
    call that initiative the IMV Project—an
    unprecedented approach under the “Made by
    Toyota” banner that draws fully on the


                                                              Europe
                                                                                                                           Hilux VIGO
                                                                                                                       (manufactured in
                                                                                                                             Thailand)
                                                                           Middle East


                                                                                            Asia
                                    Central and South            Africa                                      Thailand
                                    America                                                           TMT 280,000 units*2
                                                                                                       (140,000 for export)
                                                                                                            Indonesia
                                                                                                      TMMIN 80,000 units*2
                                                                                                        (10,000 for export)
                  Kijang Innova
     (manufactured in Indonesia)    Argentina [2005]*1    South Africa [2005]*1
                                   TASA 60,000 units *2   TSAM 60,000 units*2
                                    (45,000 for export)    (30,000 for export)
                                                                                                           Oceania
                                                              *1 Year production is scheduled to begin *2 Annual production capacity
7
Technological Strategy
Development of VDIM – Revolutionizing Active
Safety Technology

Toyota’s technological development vision is                                                          TRC (Traction Control System) and ABS (Anti-
founded on “Zero-nizing”, or ultimately striving                                                      lock Brake System) begin activating control
for zero negative aspects of car society, such                                                        when the vehicle’s limit has been reached,
as environmental damage and traffic                                                                   VDIM seamlessly integrates the engine, brakes
accidents, while “Maxi-mizing” our customers’                                                         and steering control before the vehicle reaches
sense of well-being by offering highly                                                                its limits, closing the gap between how a driver
enjoyable, comfortable products.                                                                      intends the vehicle to perform and the vehicle’s
VDIM (Vehicle Dynamics Integrated                                                                     actual performance, based on data gleaned
Management) is one example of a new                                                                   from various sensors. It ensures a high level of
technology born as a result of our tireless quest                                                     active safety and creates new driving pleasure.
to “Zero-nize” and “Maxi-mize.”

VDIM integrates management of the engine,
brakes, steering and other control systems that
hitherto functioned independently, thereby
achieving ideal vehicle kinetics. Whereas
conventional VSC (Vehicle Stability Control),


 VDIM System Structure
                              Steering angle sensor
            Brake pedal stroke sensor
  Braking pressure sensor
           Brake actuator
              Brake ECU



                                                                   Speed sensor (all wheels)
                                                                   Electronically controlled
                                                                   power steering ECU
             Steering torque sensor                                Yaw rate and acceleration sensor
                                                                   Engine ECU
                                                      Electronically controlled
                                                      power steering actuator


                                                                             Vehicle path presumed
                                                                             by the driver
                                                                                  VDIM
                                                                                   VSC                The Crown Majesta (front engine rear drive) with VDIM fitted as standard




                                                                                                                                                                                 8
    Consolidated Financial Statement

    Consolidated Balance Sheets (Unaudited)
    Toyota Motor Corporation and Consolidated Subsidiaries
    March 31, 2004 and September 30, 2004                                                         U.S. dollars
                                                                      Yen in millions           in millions (Note 4)
                                                                  March 31,   September 30,      September 30,
    ASSETS                                                         2004             2004              2004
    Current assets:
       Cash and cash equivalents                                ¥001,729,776    ¥001,528,243        $0013,762
       Time deposits                                                  68,473          68,375              616
       Marketable securities (Note 5)                                448,457         679,172            6,116
       Trade accounts and notes receivable, less allowance
        for doubtful accounts of ¥ 28,966 million as of March
        31, 2004 and ¥ 23,896 million ($ 215 million) as of
        September 30, 2004                                         1,531,651       1,401,820             12,623
       Finance receivables, net                                    2,622,939       2,835,006             25,529
       Other receivables                                             396,788         455,747              4,104
       Inventories                                                 1,083,326       1,191,041             10,725
       Deferred income taxes                                         457,161         464,369              4,182
       Prepaid expenses and other current assets                     509,882         513,936              4,628
         Total current assets                                      8,848,453       9,137,709             82,285

    Noncurrent finance receivables, net                            3,228,973       3,830,554             34,494

    Investments and other assets:
       Marketable securities and
        other securities investments (Note 5)                      2,241,971       2,424,590             21,833
       Affiliated companies                                        1,370,171       1,430,730             12,884
       Employees receivables                                          35,857          43,698                393
       Other                                                         960,156         847,102              7,628
                                                                   4,608,155       4,746,120             42,738

    Property, plant and equipment:
         Land                                                      1,135,665       1,170,975            10,545
         Buildings                                                 2,801,993       2,863,953            25,790
         Machinery and equipment                                   7,693,616       7,866,194            70,835
         Vehicles and equipment on operating leases (Note 6)       1,493,780       1,664,343            14,987
         Construction in progress                                    237,195         260,804             2,348
                                                                  13,362,249      13,826,269           124,505
          Less – Accumulated depreciation                         (8,007,602)     (8,230,458)          (74,115)
                                                                   5,354,647       5,595,811            50,390

    Total assets                                                ¥022,040,228    ¥023,310,194        $0209,907
    The accompanying notes are an integral part of these statements.



9
                                                                                          U.S. dollars
                                                              Yen in millions          in millions (Note 4)
                                                          March 31,   September 30,     September 30,
LIABILITIES AND SHAREHOLDERS’ EQUITY                       2004             2004             2004


Current liabilities:
   Short-term borrowings                               ¥002,189,024    ¥002,285,994        $0020,585
   Current portion of long-term debt                      1,125,195       1,157,635           10,424
   Accounts payable                                       1,709,344       1,648,873           14,848
   Other payables                                           665,624         697,566            6,282
   Accrued expenses                                       1,133,281       1,208,947           10,886
   Income taxes payable                                     252,555         271,250            2,443
   Other current liabilities                                522,968         571,422            5,146
     Total current liabilities                            7,597,991       7,841,687           70,614

Long-term liabilities:
   Long-term debt                                         4,247,266       4,807,512             43,291
   Accrued pension and severance costs                      725,569         714,795              6,437
   Deferred income taxes                                    778,561         822,567              7,407
   Other long-term liabilities                               65,981         109,225                984
     Total long-term liabilities                          5,817,377       6,454,099             58,119

Minority interest in consolidated subsidiaries              446,293        472,332                4,253

Shareholders’ equity:
   Common stock, no par value, authorized:
     9,740,185,400 shares at March 31, 2004 and
     9,740,185,400 shares at September 30, 2004;
     issued :
     3,609,997,492 shares at March 31, 2004 and
     3,609,997,492 shares at September 30, 2004             397,050         397,050              3,575
   Additional paid-in capital                               495,179         494,431              4,452
   Retained earnings                                      8,326,215       8,827,003             79,487
   Accumulated other comprehensive loss                    (204,592)       (134,377)            (1,210)
   Treasury stock, at cost
     280,076,395 shares at March 31, 2004 and
     328,022,418 shares at September 30, 2004              (835,285)     (1,042,031)            (9,383)
      Total shareholders’ equity                          8,178,567       8,542,076             76,921

Commitments and contingencies (Note 9)

Total liabilities and shareholders’ equity             ¥022,040,228    ¥023,310,194        $0209,907
The accompanying notes are an integral part of these statements.

                                                                                                              10
     Consolidated Statements of Income (Unaudited)
     Toyota Motor Corporation and Consolidated Subsidiaries                                          U.S. dollars
     Six-month periods ended September 30, 2003 and 2004              Yen in millions              in millions (Note 4)
                                                                                                      For the six-
                                                                                                    month period
                                                              For the six-month periods ended           ended
                                                                        September 30,               September 30,
                                                                    2003             2004                2004
     Net revenues:
        Sales of products                                       ¥07,861,781       ¥08,651,257             $077,904
        Financing operations                                        362,460           374,408                3,372
                                                                  8,224,241         9,025,665               81,276
     Costs and expenses:
        Cost of products sold                                     6,274,364         6,961,521                 62,688
        Cost of financing operations (Note 7)                       191,361           177,728                  1,600
        Selling, general and administrative                         990,747         1,020,167                  9,187
                                                                  7,456,472         8,159,416                 73,475
     Operating income                                               767,769           866,249                  7,801
     Other income (expense):
        Interest and dividend income                                 28,779              33,128                   298
        Interest expense                                            (12,210)             (7,944)                  (71)
        Foreign exchange gain, net (Note 7)                          26,597               6,196                    56
        Other income, net                                             1,078              15,586                   140
                                                                     44,244              46,966                   423
     Income before income taxes, minority interest
      and equity in earnings of affiliated companies                812,013             913,215                8,224
     Provision for income taxes                                     309,931             361,338                3,254
     Income before minority interest and equity in
      earnings of affiliated companies                              502,082          551,877                 4,970
     Minority interest in consolidated subsidiaries                 (18,615)         (26,652)                 (240)
     Equity in earnings of affiliated companies                      40,993           58,813                   529
         Net income                                              ¥00524,460       ¥00584,038              $005,259
                                                                           Yen                     U.S. dollars (Note 4)
     Net income per common share (Note 11):
     -Basic                                                         ¥153.36             ¥176.32                $1.59
     -Diluted                                                       ¥153.35             ¥176.28                $1.59
     Interim cash dividends per common share                        ¥020.00             ¥025.00                $0.23

     The accompanying notes are an integral part of these statements.




11
Consolidated Statements of Shareholders’ Equity (Unaudited)
Toyota Motor Corporation and Consolidated Subsidiaries
Six-month periods ended September 30, 2003 and 2004
                                                               Yen in millions
                                                                         Accumulated
                                             Additional                     other        Treasury
                                 Common       paid-in      Retained    comprehensive      stock,
                                  stock       capital      earnings     income (loss)     at cost         Total
Balances at March 31, 2003       ¥0397,050   ¥0493,790    ¥ 7,301,795    ¥0(604,272)    ¥0(467,363)    ¥ 7,121,000
Comprehensive income:
   Net income                                                524,460                                      524,460
   Other comprehensive
    income (loss)
     Foreign currency                                                      (112,479)                     (112,479)
       translation
       adjustments
     Unrealized gains on
       securities, net of
       reclassification
       adjustments                                                          228,270                       228,270
     Minimum pension
       liability adjustments                                                 11,928                        11,928
   Total comprehensive
    income                                                                                                 652,179
Dividends paid                                                (69,782)                                     (69,782)
Purchase and reissuance of
 common stock                                                                             (130,923)       (130,923)
Balances at September 30, 2003   ¥0397,050   ¥0493,790    ¥7,756,473     ¥0(476,553)    ¥0(598,286)    ¥ 7,572,474

Balances at March 31, 2004       ¥0397,050   ¥0495,179    ¥8,326,215     ¥0(204,592)    ¥0(835,285)    ¥ 8,178,567
Issuance during the period                        (748)                                                       (748)
Comprehensive income:
   Net income                                                584,038                                      584,038
   Other comprehensive
    income (loss)
     Foreign currency
       translation
       adjustments                                                          119,499                       119,499
     Unrealized losses on
       securities, net of
       reclassification
       adjustments                                                          (55,051)                      (55,051)
     Minimum pension
       liability adjustments                                                  5,767                         5,767
   Total comprehensive
    income                                                                                                654,253
Dividends paid                                                (83,250)                                    (83,250)
Purchase and reissuance of
  common stock                                                                             (206,746)      (206,746)
Balances at September 30, 2004   ¥0397,050   ¥0494,431    ¥8,827,003     ¥0(134,377)    ¥(1,042,031)   ¥ 8,542,076
The accompanying notes are an integral part of these statements.


                                                                                                                      12
                                                               U.S. dollars in millions (Note 4)
                                                                                 Accumulated
                                                 Additional                         other          Treasury
                                      Common      paid-in        Retained      comprehensive        stock,
                                        stock     capital        earnings       income (loss)       at cost     Total
     Balances at March 31, 2004        $03,575      $04,459        $074,977         $0(1,842)       $0(7,521)   $073,648
     Issuance during the period                          (7)                                                          (7)
     Comprehensive income:
        Net income                                                     5,259                                       5,259
        Other comprehensive
         income (loss)
          Foreign currency
            translation
            adjustments                                                                 1,076                       1,076
          Unrealized losses on
            securities, net of
            reclassification
            adjustments                                                                  (496)                      (496)
          Minimum pension
            liability adjustments                                                          52                           52
        Total comprehensive
         income                                                                                                    5,891
     Dividends paid                                                     (749)                                       (749)
     Purchase and reissuance of
       common stock                                                                                   (1,862)     (1,862)
     Balances at September 30, 2004    $03,575     $04,452         $079,487         $0(1,210)       $0(9,383)   $076,921
     The accompanying notes are an integral part of these statements.




13
Consolidated Statements of Cash-flows (Unaudited)
Toyota Motor Corporation and Consolidated Subsidiaries                                                  U.S. dollars
Six-month periods ended September 30, 2003 and 2004                      Yen in millions               in millions (Note 4)
                                                                                                         For the six-
                                                                   For the six-month periods            month period
                                                                             ended                          ended
                                                                         September 30,                  September 30,
                                                                     2003             2004                   2004
Cash flows from operating activities:
    Net income                                                     ¥ 00524,460       ¥ 00584,038              $005,259
    Adjustments to reconcile net income to net cash
      provided by operating activities
       Depreciation                                                    475,938           485,311                  4,370
       Provision for doubtful accounts and credit losses                38,418            31,966                    288
       Pension and severance costs, less payments                       33,957             3,085                     28
       Losses on disposal of fixed assets                               18,896            18,914                    170
       Unrealized losses on available-for-sale securities, net           2,697             1,997                     18
       Deferred income taxes                                            21,996            49,858                    449
       Minority interest in consolidated subsidiaries                   18,615            26,652                    240
       Equity in earnings of affiliated companies                      (40,993)          (58,813)                  (529)
       Changes in operating assets and liabilities, and other           18,940           224,965                  2,025
         Net cash provided by operating activities                   1,112,924         1,367,973                 12,318
Cash flows from investing activities:
    Additions to finance receivables                                (4,182,349)       (4,358,871)               (39,251)
    Collection of and proceeds from sales of finance receivables     3,727,776         3,837,570                 34,557
    Additions to fixed assets excluding equipment
     leased to others                                                 (445,522)            (538,886)              (4,853)
    Additions to equipment leased to others                           (298,454)            (361,708)              (3,257)
    Proceeds from sales of fixed assets excluding
     equipment leased to others                                         31,234               29,152                  263
    Proceeds from sales of equipment leased to others                  133,073              152,433                1,373
    Purchases of marketable securities and security investments     (1,137,863)            (747,373)              (6,730)
    Proceeds from sales of and maturity of marketable
     securities and security investments                              705,614              226,907                 2,043
    Payments for additional investments in affiliated companies,
     net of cash acquired                                              (18,876)             (683)                    (6)
    Changes in investments and other assets, and other                  13,263             1,168                     10
         Net cash used in investing activities                      (1,472,104)       (1,760,291)               (15,851)
Cash flows from financing activities:
  Purchases of common stock                                           (120,229)         (206,917)               (1,863)
  Proceeds from issuance of long-term debt                             700,149           921,299                 8,296
  Payments of long-term debt                                          (622,709)         (538,467)               (4,849)
  Increase in short-term borrowings                                    160,970            58,904                   530
  Dividends paid                                                       (69,782)          (83,250)                 (749)
         Net cash provided by financing activities                      48,399           151,569                 1,365
Effect of exchange rate changes on cash and cash equivalents           (38,036)           39,216                   353
Net decrease in cash and cash equivalents                             (348,817)         (201,533)               (1,815)
Cash and cash equivalents at beginning of period                     1,592,028         1,729,776                15,577
Cash and cash equivalents at end of period                         ¥01,243,211       ¥01,528,243              $013,762
The accompanying notes are an integral part of these statements.
                                                                                                                              14
     Notes to Consolidated Financial Statements


     1. Basis of preparation:
        The accompanying semi-annual condensed consolidated financial statements of Toyota Motor
        Corporation (the “parent company”) as of September 30, 2004, and for the six-month periods ended
        September 30, 2003 and 2004, respectively, have been prepared in accordance with accounting
        principles generally accepted in the United States of America and on substantially the same basis as
        its annual consolidated financial statements. The semi-annual condensed consolidated financial
        statements should be read in conjunction with the Annual Report on Form 20-F for the year ended
        March 31, 2004. The semi-annual condensed consolidated financial statements reflect all adjustments,
        consisting of only normal recurring adjustments, necessary for a fair presentation of the results for
        those periods and the financial condition at those dates. The consolidated results for six-month
        periods are not necessarily indicative of results to be expected for the full year.

     2. Nature of operations:
        The parent company and its subsidiaries (collectively “Toyota”) are primarily engaged in the design,
        manufacture, assembly and sale of passenger cars, sport-utility vehicles, minivans, trucks and related
        parts and accessories throughout the world. In addition, Toyota provides retail and wholesale
        financing, retail leasing and certain other financial services primarily to its dealers and their
        customers related to vehicles manufactured by Toyota.

     3. Summary of significant accounting policies:
        The parent company and its subsidiaries in Japan maintain their records and prepare their financial
        statements in accordance with accounting principles generally accepted in Japan, and its foreign
        subsidiaries in conformity with those of their countries of domicile. Certain adjustments and
        reclassifications have been incorporated in the accompanying consolidated financial statements to
        conform with accounting principles generally accepted in the United States of America.

       Significant accounting policies after reflecting adjustments for the above are as follows:

       Basis of consolidation and accounting for investments in affiliated companies -
       The semi-annual condensed consolidated financial statements include the accounts of the parent
       company and those of its majority-owned subsidiary companies. All significant intercompany
       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 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 semi-annual condensed consolidated financial statements in conformity
       with accounting principles generally accepted in the United States of America requires management
15
to make estimates and assumptions that affect the amounts reported in the semi-annual condensed
consolidated financial statements and accompanying notes. Actual results could differ from those
estimates. The more significant estimates include: product warranties, allowance for doubtful
accounts and credit losses, residual values for leased assets, impairment of long-lived assets,
postretirement benefits costs and obligations, fair value of derivative financial instruments and other-
than-temporary losses on marketable securities.

Translation of foreign currencies -
All asset and liability accounts of foreign subsidiaries and affiliates are translated into Japanese yen at
the appropriate period-end currency exchange rates and all income and expense accounts of those
subsidiaries are translated at the average currency exchange rates for the period. The resulting
translation adjustments are included as a component of accumulated other comprehensive income.

Foreign denominated receivables and payables are translated at the appropriate period-end currency
exchange rates and the resulting transaction gains or losses are taken into income 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 in 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.

Revenue from the sale of vehicles under which Toyota conditionally guarantees the minimum resale
value is recognized on a pro rata basis from the date of sale to the first exercise date of the guarantee
in a manner similar to lease accounting. The underlying vehicles of these transactions are recorded
as assets and are depreciated in accordance with Toyota’s depreciation policy.

Revenue from retail financing contracts and finance leases is recognized using the effective yield
method. Revenue from operating leases is recognized on a straight-line basis over the lease term.

Toyota on occasion sells finance receivables in transactions subject to limited recourse provisions.
These sales are to trusts and Toyota retains the servicing and is paid a servicing fee. Gains or losses
from the sales of the finance receivables are recognized in the period in which such sales occur.

Other costs -
Advertising and sales promotion costs are expensed as incurred. Advertising costs were ¥162,295
million and ¥175,343 million ($1,579 million) for the six-month periods ended September 30, 2003 and
                                                                                                              16
     2004, respectively.

     Toyota generally warrants its products against certain manufacturing and other defects. Provisions
     for product warranties are provided for specific periods of time and/or usage of the product and vary
     depending upon the nature of the product, the geographic location of its sale and other factors.
     Toyota provides a provision for estimated product warranty costs at the time the related sale is
     recognized based on estimates that Toyota will incur to repair or replace product parts that fail while
     under warranty. The amount of accrued estimated warranty costs is primarily based on historical
     experience as to product failures as well as current information on repair costs. The amount of
     warranty costs accrued also contains an estimate as to warranty claim recoveries from suppliers.

     Research and development costs are expensed as incurred and were ¥304,638 million and ¥351,419
     million ($3,165 million) for the six-month periods ended September 30, 2003 and 2004, respectively.

     Cash and cash equivalents -
     Cash and cash equivalents include all highly liquid investments, generally with original maturities of
     three months or less, that are readily convertible to known amounts of cash and are so near to
     maturity that they present insignificant risk of changes in value because of changes in interest rates.

     Marketable securities -
     Marketable securities consist of debt and equity securities. Debt and equity securities designated as
     available-for-sale are carried at fair value with changes in unrealized gains or losses included as a
     component of accumulated other comprehensive income in shareholders’ equity, net of applicable
     taxes. Debt securities designated as held-to-maturity investments are carried at amortized costs.
     Individual securities classified as either available-for-sale or held-to-maturity are reduced to net
     realizable value for other-than-temporary declines in market value. In determining if a decline in
     value is other-than-temporary, Toyota considers the length of time and the extent to which the fair
     value has been less than the carrying value, the financial condition and prospects of the company
     and Toyota’s ability and intent to retain its investment in the company for a period of time sufficient
     to allow for any anticipated recovery in market value. Realized gains and losses, which are
     determined on the average-cost method, are reflected in the statement of income 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 of the investee.



17
Finance receivables -
Finance receivables are recorded at the present value of the related future cash flows including
residual values for finance leases.

Allowance for credit losses -
Allowances for credit losses are established to cover probable losses on receivables resulting from
the inability of customers to make required payments. The allowance for credit losses is based
primarily on the frequency of occurrence and loss severity. Other factors affecting collectibility are
also evaluated in determining the amount to be provided.

Losses are charged to the allowance when it has been determined that payments will not be received
and collateral cannot be recovered or the related collateral is repossessed and sold. Any shortfall
between proceeds received and the carrying cost of repossessed collateral is charged to the
allowance. Recoveries are 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 sales.

Inventories -
Inventories are valued at cost, not in excess of market, cost being determined on the “average-cost”
basis, except for the cost of finished products carried by certain subsidiary companies, which is
determined on the “specific identification” basis or “last in, first out” (“LIFO”) basis. Inventories
valued on the LIFO basis totaled ¥190,642 million and ¥207,835 million ($1,872 million) at March 31,
2004 and September 30, 2004, respectively. Had the “first in, first out” basis been used for those
companies using the LIFO basis, inventories would have been ¥21,463 million and ¥27,652 million
($249 million) higher than reported at March 31, 2004 and September 30, 2004, respectively.



                                                                                                         18
     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 the estimated useful lives of the respective assets according to general
     class, type of construction and use. Estimated useful lives range from 3 to 60 years for buildings and
     from 2 to 20 years for machinery and equipment.

     Vehicles and equipment on operating leases to third parties are originated by dealers and acquired
     by certain consolidated subsidiaries. Such subsidiaries are also the lessors of certain property that
     they acquire directly. Vehicles and equipment on operating leases are depreciated primarily on the
     straight-line method over the lease term, generally three years, to the estimated residual value.

     Long-lived assets -
     Toyota reviews its long-lived assets, including investments in affiliated companies, for impairment
     whenever events or changes in circumstances indicate that the carrying amount of an asset may not
     be recoverable. An impairment loss would be recognized when the carrying amount of an asset
     exceeds the estimated undiscounted future cash flows expected to result from the use of the asset
     and its eventual disposition. The amount of the impairment loss to be recorded is calculated by the
     excess of the assets carrying value over its fair value. Fair value is determined mainly using a
     discounted cash flow valuation method.

     Goodwill and intangible assets -
     Goodwill is not material to Toyota’s semi-annual condensed 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 the 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
     using a discounted cash flow analysis.

     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
19
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 semi-annual
condensed consolidated statement of income. The asset and liability approach is used to recognize
deferred tax liabilities and assets for the expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of assets and liabilities. Valuation allowances are
recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be
realized.

Derivative financial instruments -
Toyota employs derivative financial instruments, including foreign exchange forward contracts,
foreign currency options, interest rate swaps, interest rate currency swap agreements and interest
rate options to manage its exposure to fluctuations in interest rates and foreign currency exchange
rates. Toyota does not use derivatives for speculation or trading purposes. Changes in the fair value
of derivatives are recorded each period in current earnings or through other comprehensive income,
depending on whether or not a derivative is designated as part of a hedge transaction and the type of
hedge transaction. The ineffective portion of all hedges is recognized currently in earnings.

Net income per common share -
Basic net income per common share is calculated by dividing net income by the weighted-average
number of shares outstanding during the period. The calculation of diluted net income per common
share is similar to the calculation of basic net income per common share, except that the weighted-
average number of shares outstanding includes the additional dilution from the assumed exercise of
dilutive stock options.

Stock-based compensation -
Toyota measures compensation expense for its stock-based compensation plan using the intrinsic
value method. Toyota accounts for the stock-based compensation plans under the recognition and
measurement principles of the Accounting Principles Board (“APB”) Opinion No. 25, Accounting for
Stock Issued to Employees, and related Interpretations. No stock-based compensation cost is
reflected in net income, as all options granted under those plans had an exercise price higher than
the market value of the underlying common stock on the date of grant.

Other comprehensive income -
Other comprehensive income refers to revenues, expenses, gains and losses that, under accounting
principles generally accepted in the United States of America are included in comprehensive income,
but are excluded from net income as these amounts are recorded directly as an adjustment to
shareholders’ equity. Toyota’s other comprehensive income is primarily comprised of unrealized
                                                                                                        20
       gains/losses on marketable securities designated as available-for-sale, foreign currency translation
       adjustments and adjustments to recognize additional minimum liabilities associated with Toyota’s
       defined benefit pension plans.

       Accounting change -
       In September 2004, the Emerging Issues Task Force (“EITF”) reached consensus on the disclosure
       provisions in its Issue No. 03-1, The Meaning of Other-Than-Temporary Impairment and Its
       Application to Certain Investments (“EITF 03-1”) for investments accounted for under the Statement
       of Financial Accounting Standards (“FAS”) No. 115, Accounting for Certain Investments in Debt and
       Equity Securities, and FAS No. 124, Accounting for Certain Investments Held by Not-for-Profit
       Organizations. See note 5 for disclosures required by those provisions.

       Recent pronouncements to be adopted in future periods -
       No new accounting standards were issued subsequent to the annual report for the year ended March
       31, 2004 that will be effective in future periods and are expected to have material impact on Toyota’s
       consolidated financial statements.

       Reclassifications -
       Certain prior year amounts have been reclassified to conform to the presentation of the six-month
       period ended September 30, 2004.

     4. U.S. dollar amounts:
        U.S. dollar amounts presented in the semi-annual condensed consolidated financial statements and
        related notes are included solely for the convenience of the reader. These translations should not be
        construed as representations that the yen amounts actually represent, or have been or could be
        converted into, U.S. dollars. For this purpose, the rate of ¥111.05 = U.S. $1, the approximate currency
        exchange rate at September 30, 2004, was used for the translation of the accompanying semi-annual
        condensed consolidated financial amounts of Toyota as of and for the six-month period ended
        September 30, 2004.




21
5. Marketable securities and other securities investments:
   Marketable securities and other securities investments include debt and equity securities for which
   the aggregate cost, gross unrealized gains and losses and fair value are as follows:
                                                             Yen in millions
                                                             March 31, 2004
                                                           Gross              Gross
                                                         unrealized         unrealized       Fair
                                               Cost        gains              losses        value
Available-for-sale
 Debt securities                           ¥01,606,685   ¥0,010,094          ¥001,626    ¥01,615,153
 Equity securities                             460,778      492,483               720        952,541

                 Total                     ¥02,067,463   ¥0,502,577          ¥002,346    ¥02,567,694

Securities not practicable to fair value
 Debt securities                           ¥00,043,382
 Equity securities                              79,352

                 Total                     ¥00,122,734


                                                             Yen in millions
                                                           September 30, 2004
                                                           Gross              Gross
                                                         unrealized         unrealized       Fair
                                               Cost        gains              losses        value
Available-for-sale
 Debt securities                           ¥02,087,913   ¥0,008,865          ¥000,388    ¥02,096,390
 Equity securities                             454,206      414,764               772     00,868,198

                 Total                     ¥02,542,119   ¥0,423,629          ¥001,160    ¥02,964,588

Securities not practicable to fair value
 Debt securities                           ¥00,044,840
 Equity securities                              94,334

                 Total                     ¥00,139,174




                                                                                                         22
                                                               U.S. dollars in millions
                                                                September 30, 2004
                                                                Gross                Gross
                                                              unrealized           unrealized      Fair
                                                  Cost          gains                losses       value
     Available-for-sale
      Debt securities                           $018,801       $000,080               $0003      $0018,878
      Equity securities                            4,090          3,735                   7          7,818

                      Total                     $022,891       $003,815               $0010      $0026,696

     Securities not practicable to fair value
      Debt securities                           $000,404
      Equity securities                              849

                      Total                     $001,253

       Unrealized losses continuously over a 12-month period or more in the aggregate were not material
       both at March 31, 2004 and September 30, 2004.

       In the ordinary course of business, Toyota maintains long-term investment securities, included in
       “Marketable securities and other securities investments”, issued by a number of non-public
       companies which are recorded at cost, as their fair values were not readily determinable. Toyota’s
       management employs a systematic methodology to assess the recoverability of such investments by
       reviewing the financial viability of the underlying companies and the prevailing market conditions in
       which these companies operate to determine if Toyota’s investment in each individual company is
       impaired and whether the impairment is other-than-temporary. Toyota performs this impairment
       testing for significant investments recorded at cost semi-annually, and if the impairment is
       determined to be other-than-temporary, the cost of the investment is written-down by the impaired
       amount and the losses are recognized currently in earnings.




23
6. Vehicles and equipment on operating leases:
  Vehicles and equipment on operating leases consist of the following:

                                                                                                     U.S. dollars
                                                                       Yen in millions                in millions
                                                                   March 31,   September 30,        September 30,
                                                                    2004             2004                2004
Vehicles                                                         ¥01,387,404         ¥01,550,039       $013,958
Equipment                                                            106,376             114,304          1,029
                                                                   1,493,780           1,664,343         14,987

Less - Accumulated depreciation                                      (375,861)          (413,675)         (3,725)

      Vehicles and equipment on operating leases, net            ¥01,117,919         ¥01,250,668       $011,262
  Rental income from vehicles and equipment on operating leases were ¥ 149,591 million and
  ¥ 140,711 million ($ 1,267 million) for the six-month periods ended September 30, 2003 and 2004,
  respectively. Future minimum rentals from vehicles and equipment on operating leases are due in
  installments as follows:
                                                                                                      U.S. dollars
12-month periods ending September 30                               Yen in millions                    in millions

   2005                                                                  ¥0277,044                       $02,495
   2006                                                                    190,868                         1,719
   2007                                                                    103,369                           931
   2008                                                                     40,985                           369
   2009                                                                     13,848                           124
   Thereafter                                                               11,414                           103

 Total minimum future rentals                                            ¥0637,528                       $05,741

  The future minimum rentals as shown above should not be considered indicative of future cash collections.




7. 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 its
  exposure to interest rate fluctuations. Interest rate swap agreements are executed as either an
  integral part of specific debt transactions or on a portfolio basis. Toyota uses interest rate currency
                                                                                                                     24
     swap agreements to entirely 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 obligation at agreed-upon currency exchange and interest rates.

     For the six-month periods ended September 30, 2003 and 2004, the ineffective portions of Toyota’s
     fair value hedge relationships, which are included in cost of financing operation, were 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 fluctuations and interest rate fluctuations from an economic perspective, and
     which Toyota is unable or has elected not to apply hedge accounting. Unrealized gains or losses on
     these derivative instruments are reported in the cost of financing operations and foreign exchange
     gain, net in the accompanying consolidated statements of income.




25
8. Lease commitments:
   Toyota leases certain assets under capital lease and operating lease arrangements.

  An analysis of leased assets under capital leases is as follows:


                                                                                              U.S. dollars
                                                                  Yen in millions              in millions
                                                              March 31,   September 30,      September 30,
 Class of property                                             2004             2004              2004


Building                                                     ¥0010,937          ¥0011,627        $000105
Machinery and equipment                                        161,446            163,708           1,474
Less - Accumulated depreciation                               (118,956)          (124,433)         (1,121)

                                                             ¥0053,427          ¥0050,902        $000458

Amortization expenses under capital leases for the six-month periods ended September 30, 2003 and
2004 were ¥9,116 million and ¥6,674 million ($60 million), respectively.
Future minimum lease payments under capital leases together with the present value of the net
minimum lease payments as of September 30, 2004 are as follows:

                                                                                               U.S. dollars
12-month periods ending September 30                                 Yen in millions           in millions

  2005                                                                 ¥016,508                    $0149
  2006                                                                   16,147                      145
  2007                                                                   16,758                      151
  2008                                                                    6,155                       56
  2009                                                                    5,680                       51
  Thereafter                                                             20,577                      185
        Total minimum lease payments                                     81,825                      737
Less - Amount representing interest                                      (8,096)                     (73)
        Present value of net minimum lease payments                      73,729                      664
Less - Current obligations                                              (15,253)                    (137)

         Long-term capital lease obligations                           ¥058,476                    $0527




                                                                                                              26
     Rental expenses under operating leases for the six-month periods ended September 30, 2003 and 2004
     were ¥40,679 million and ¥40,241 million ($362 million), respectively.
     The minimum rental payments required under operating leases relating primarily to land, buildings and
     equipment having initial or remaining non-cancelable lease terms in excess of one year at September
     30, 2004 are as follows:
                                                                                                 U.S. dollars
     12-month periods ending September 30                              Yen in millions           in millions

        2005                                                             ¥008,648                    $0078
        2006                                                                6,465                       58
        2007                                                                4,807                       43
        2008                                                                3,712                       33
        2009                                                                3,087                       28
        Thereafter                                                          9,844                       89
             Total minimum future rentals                                ¥036,563                    $0329




     9. Other commitments and contingencies, concentrations and factors that may affect future
        operations:
        Commitments outstanding at September 30, 2004 for the purchase of property, plant and equipment
        and other assets are ¥85,105 million ($766 million).

       Toyota enters into contracts with Toyota dealers to guarantee customers’ payment of their
       installment payables that arises from installment contracts between customers and Toyota dealers,
       as and when requested by Toyota dealers. Guarantee periods are set to match maturity of
       installment payments, and range from one month to 35 years at September 30, 2004; however, they
       are generally shorter than the useful lives of products sold. Toyota is required to execute its
       guarantee primarily when customers are unable to make required payments. The maximum
       potential amount of future payments as of September 30, 2004 is ¥1,056,896 million ($9,517 million).
       Liabilities for guarantee of ¥4,092 million ($37 million) have been provided for as of September 30,
       2004. Under these guarantee contracts, Toyota is entitled to recover any amount paid by Toyota
       from the customers whose obligations Toyota guaranteed.

       In February 2003, Toyota, General Motors Corporation, Ford, DaimlerChrysler, Honda, Nissan, BMW
       and their U.S. and Canadian sales and marketing subsidiaries, the National Automobile Dealers
       Association and the Canadian Automobile Dealers Association were named as defendants in
       purported nationwide class actions on behalf of all purchasers of new motor vehicles in the United
       States since January 1, 2001. Twenty-six similar actions were filed in federal district courts in
       California, Illinois, New York, Massachusetts, Florida, New Jersey and Pennsylvania. Additionally,
       fifty-five parallel class actions were filed in state courts in California, Minnesota, New Mexico, New

27
York, Tennessee, Wisconsin, Arizona, Florida, Iowa and New Jersey on behalf of the same
purchasers in these states. As of September 30, 2004, actions filed in federal district courts were
consolidated in Maine and actions filed in the state courts of California and New Jersey were also
consolidated, respectively. The nearly identical complaints allege that the defendants violated the
Sherman Antitrust Act by conspiring among themselves and with their dealers to prevent the sale to
United States citizens of vehicles produced for the Canadian market. The complaints allege that new
vehicle prices in Canada are 10% to 30% lower than those in the United States and that preventing
the sale of these vehicles to United States citizens resulted in United States consumers paying
excessive prices for the same type of vehicles. The complaints seek permanent injunctions against
the alleged antitrust violations and treble damages in an unspecified amount. In March 2004, the
federal district court of Maine (i) dismissed claims against certain Canadian sales and marketing
subsidiaries, including Toyota Canada, Inc., for lack of personal jurisdiction, but denied or deferred to
dismiss claims against certain other Canadian companies, and (ii) dismissed the claim for damages,
but did not bar the plaintiffs from seeking injunctive relief against the alleged antitrust violations.
The plaintiffs have already submitted an amended compliant in order to proceed on the claim for
damages. In the process of the federal district court case, Toyota is now responding to the plaintiff’s
discovery requests. Toyota believes that its actions have been lawful and intends to vigorously
defend these cases.

Toyota has various other legal actions, governmental proceedings and other claims pending against
it, including product liability claims in the United States. Although the claimants in some of these
actions seek potentially substantial damages, Toyota cannot currently determine its potential liability
or the damages, if any, with respect to these claims. However, based upon information currently
available to Toyota, Toyota believes that its losses from these matters, if any, would not have a
material adverse effect on Toyota’s financial position, operating results or cash flows.

In September 2000, the European Union approved a directive that requires member states to
promulgate regulations implementing the following by April 21, 2002: 1) manufacturers shall bear all
or significant part of the cost for taking back End-of-life vehicles put on the market after July 1, 2002
and dismantling and recycling those vehicles. Beginning January 1, 2007, manufacturers will also be
financially responsible for vehicles put on the market before July 1, 2002; 2) manufacturers may not
use certain hazardous materials in vehicles to be sold after July 2003; 3) vehicles type-approved and
put on the market after three years after the amendment of Directive on Type-approval, shall be re-
usable and/or recyclable to a minimum of 85% by weight per vehicle and shall be re-usable and/or
recoverable to a minimum of 95% by weight per vehicle; and 4) End-of-life vehicles must meet actual
re-use and recovery targets of 80% and 85%, respectively, of vehicle weight by 2006, rising
respectively to 85% and 95% by 2015.
Currently, there are numerous uncertainties surrounding the form and implementation of the
applicable regulations in different European Union member states, particularly regarding
manufacturer responsibilities and resultant expenses that may be incurred. All of the member states
have adopted legislation to implement the directive. In addition, Sweden and Denmark have existing
                                                                                                            28
       legislation that partially implements the directive. Belgium has partially adopted legislation
       implementing the directive. The implementation of the directive has also been in progress in 10
       states newly joined the European Union in May 2004. In addition, under this directive member states
       must take measures to ensure that car manufacturers, distributors and other auto-related businesses
       establish adequate End-of-life vehicle disposal facilities and to ensure that hazardous materials and
       recyclable parts are removed from vehicles prior to scrapping. This directive impacts Toyota’s
       vehicles sold in the European Union and Toyota expects to introduce vehicles that are in compliance
       with such measures taken by the member states pursuant to the directive. Based on the legislation
       that has been enacted to date, Toyota has provided for its estimated liability related to covered
       vehicles in existence as of September 30, 2004. Depending on the legislation implemented in the
       member states that have not yet enacted legislation and other circumstances, Toyota may be
       required to provide additional accruals for the expected costs to comply with these regulations.
       Although Toyota does not expect its compliance with the directive to result in significant cash
       expenditures, Toyota is continuing to assess the impact of this future legislation on its results of
       operations, cash flows and financial position.

       Toyota has a concentration of material purchases from a supplier which is an affiliated company.
       These purchases approximate 10% of material costs.

       The parent company has a concentration of labor supply in employees working under collective
       bargaining agreements and a substantial portion of these employees are working under the
       agreement that will expire on December 31, 2005.

     10. Segment data:
        The operating segments reported below are the segments of Toyota for which separate financial
        information is available and for which operating income/loss amounts are evaluated regularly by
        executive management in deciding how to allocate resources and in assessing performance.
        The major portions of Toyota’s operations on a worldwide basis are derived from the Automotive
        and Financial Services business segments. The Automotive segment designs, manufactures,
        assembles and distributes passenger cars, sport-utility vehicles, minivans, trucks and related parts
        and accessories. The Financial Services segment consists primarily of financing operations, and
        vehicle and equipment leasing operations to assist in the merchandising of Toyota’s products as well
        as other products. The All Other segment includes Toyota’s housing business and various other
        business activities.
        The following tables present certain information regarding Toyota’s industry segments and
        operations by geographic areas as of March 31, 2004 and September 30, 2004 and for the six-month
        periods ended September 30, 2003 and 2004:




29
Information about segment results and assets -
As of March 31, 2004 and for the six-month period ended September 30, 2003:
                                                                Yen in millions
                                                                                  Intersegment
                                                                                   Elimination/
                                                Financial                          Unallocated
                               Automotive       Services         All Other           Amount           Total
Net revenues
External customers           ¥07,584,310      ¥00,362,460      ¥00,277,471        ¥00,139,—       ¥008,224,241
Inter-segment                      6,126            9,000          126,208           (141,334)             —
 Total net revenues            7,590,436          371,460          403,679           (141,334)       8,224,241
Operating expenses             6,887,802          309,779          397,632           (138,741)       7,456,472
Operating income(loss)       ¥00,702,634      ¥00,061,681      ¥00,006,047        ¥00,1(2,593)    ¥000,767,769

Segment assets*              ¥10,207,395      ¥08,138,297      ¥00,941,925        ¥02,752,611     ¥022,040,228
Investment in equity
 method investees*              1,092,713        211,657                —              60,407        1,364,777
Depreciation                      368,242         97,493             10,203               —            475,938
Expenditures
 for segment assets               459,390        238,155            20,371             26,060         743,976
* Representing figures as of March 31, 2004



As of and for the six-month period ended September 30, 2004:
                                                                Yen in millions
                                                                                  Intersegmet
                                                                                  Elimination/
                                                Financial                         Unallocated
                               Automotive       Services         All Other          Amount            Total
Net revenues
External customers           ¥08,332,161      ¥00,374,408      ¥00,319,096        ¥00,141,—       ¥009,025,665
Inter-segment                      7,477            9,958          147,795           (165,230)             —
 Total net revenues            8,339,638          384,366          466,891           (165,230)       9,025,665
Operating expenses             7,582,799          281,699          454,143           (159,225)       8,159,416
Operating income             ¥00,756,839      ¥00,102,667      ¥00,012,748        ¥,000(6,005)    ¥000,866,249

Segment assets               ¥10,602,067      ¥09,060,240      ¥00,927,781        ¥02,720,106     ¥023,310,194
Investment in equity
 method investees               1,159,997        207,182               —               55,064        1,422,243
Depreciation                      378,416         96,252            10,643                —            485,311
Expenditures for
 segment assets                   543,568        295,427            21,357             40,242         900,594




                                                                                                                 30
                                                          U.S. dollars in millions
                                                                                     Intersegmet
                                                                                     Elimination/
                                             Financial                               Unallocated
                            Automotive       Services          All Other               Amount         Total
     Net revenues
     External customers        $075,031        $003,371           $002,874               $00,0—       $0081,276
     Inter-segment                   67              90              1,331                  (1,488)         —
      Total net revenues         75,098           3,461              4,205                  (1,488)      81,276
     Operating expenses          68,283           2,536              4,090                  (1,434)      73,475
     Operating income          $006,815        $000,925           $000,115               $,000,(54)   $0007,801

     Segment assets            $095,471        $081,587           $008,355               $024,494     $0209,907
     Investment in equity
      method investees           10,446           1,865                —                      496        12,807
     Depreciation                 3,407             867                96                     —           4,370
     Expenditures for
      segment assets              4,895           2,660                192                    363         8,110

       Revenue and operating income of the Financial Services segment for the six-month period ended
       September 30, 2004, includes the impact of adjustments made by a sales financing subsidiary in the
       United States of America relating to the correction of errors relating to prior periods.




31
Geographic Information -
As of March 31, 2004 and for the six-month period ended September 30, 2003:
                                                                       Yen in millions
                                                                                             Intersegmet
                                                                                             Elimination/
                                                North                       Other foreign    Unallocated
                            Japan              America        Europe          countries        Amount           Total
Net revenues
External customers ¥03,325,570                ¥02,896,155   ¥00,977,630     ¥01,024,886      ¥000(139—       ¥08,224,241
Inter-segment         2,171,720                   117,912        54,645          77,931        (2,422,208)           —
 Total net revenues   5,497,290                 3,014,067     1,032,275       1,102,817        (2,422,208)     8,224,241
Operating expenses    4,967,548                 2,850,451     1,009,801       1,049,524        (2,420,852)     7,456,472
Operating income    ¥00,529,742               ¥00,163,616   ¥00,022,474     ¥00,053,293      ¥,000,(1,356)   ¥00,767,769

Segment assets*          ¥10,210,904          ¥06,674,694   ¥01,842,947     ¥01,567,276      ¥01,744,407     ¥22,040,228
Long-lived assets*         3,032,629            1,536,550       448,954         336,514              —         5,354,647
* Representing figures as of March 31, 2004


As of and for the six-month period ended September 30, 2004:
                                                                       Yen in millions
                                                                                             Intersegmet
                                                                                             Elimination/
                                                North                       Other foreign    Unallocated
                            Japan              America        Europe          countries        Amount           Total
Net revenues
External customers ¥03,540,760                ¥03,102,246   ¥01,129,304     ¥01,253,355      ¥00,(139,—      ¥09,025,665
Inter-segment         2,239,791                    87,520        71,993          78,951        (2,478,255)           —
 Total net revenues   5,780,551                 3,189,766     1,201,297       1,332,306        (2,478,255)     9,025,665
Operating expenses    5,289,985                 2,944,990     1,135,027       1,261,412        (2,471,998)     8,159,416
Operating income    ¥00,490,566               ¥00,244,776   ¥00,066,270     ¥00,070,894      ¥,00,0(6,257)   ¥00,866,249

Segment assets           ¥10,217,231          ¥07,452,016   ¥02,080,172     ¥01,705,329      ¥01,855,446     ¥23,310,194
Long-lived assets          3,040,406            1,659,928       490,765         404,712              —         5,595,811


                                                                  U.S. dollars in millions
                                                                                             Intersegmet
                                                                                             Elimination/
                                                North                       Other foreign    Unallocated
                            Japan              America        Europe          countries        Amount           Total
Net revenues
External customers        $0,031,884           $0,027,936    $0,010,170      $0,011,286       $0,000,—        $0,081,276
Inter-segment                 20,170                  788           648             711           (22,317)           —
 Total net revenues           52,054               28,724        10,818          11,997           (22,317)        81,276
Operating expenses            47,636               26,520        10,221          11,359           (22,261)        73,475
Operating income          $0,004,418           $0,002,204    $0,000,597      $0,000,638       $ 0,000,(56)    $0,007,801

Segment assets            $0,092,006           $0,067,105    $0,018,732      $0,015,356       $0,016,708      $0,209,907
Long-lived assets             27,379               14,948         4,419           3,644              —            50,390
                                                                                                                           32
     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, operating expenses, operating
     income, segment assets and long-lived assets included in Other foreign countries.


     Unallocated amounts included in segment assets represent assets held for corporate purposes, which
     mainly consist of cash and cash equivalents and marketable securities. Such corporate assets were
     ¥3,270,973 million and ¥3,292,816 million ($29,652 million) as of March 31, 2004 and September 30, 2004,
     respectively.


     Transfers between industry or geographic segments are made at amounts which Toyota’s management
     believes approximate arm’s-length prices. In measuring the reportable segments’ income or losses,
     operating income consists of net revenues less operating expenses.


     Overseas revenues by destination -
     The following information shows revenues that are attributed to countries based on the location of the
     customers, excluding customers in Japan.
     In addition to the disclosure requirements under FAS No. 131, Disclosure about Segments of an
     Enterprise and Related Information, Toyota discloses this supplemental information in order to provide
     readers with valuable information.

                                                                                                  U.S. dollars in
                                                                      Yen in millions                 millions
                                                                                                 For the six-month
                                                               For the six-month periods ended     period ended
                                                                         September 30,            September 30,
                                                                 2003                 2004             2004

     North America                                             ¥03,013,321        ¥03,194,425         $028,766
     Europe                                                        944,563          1,139,092           10,257
     Other foreign countries                                     1,601,666          1,865,702           16,801




33
Certain financial statement data on non-financial services business and financial services business -
The financial data presents separately Toyota’s non-financial services and financial services businesses.
                                                                                           U.S. dollars
                                                                 Yen in millions            in millions
                                                             March 31,   September 30,    September 30,
Balance sheets                                                2004             2004            2004


Non-Financial Services Business
  Current assets
     Cash and cash equivalents                           ¥001,618,876     ¥001,314,036       $0011,833
     Time deposits                                             16,689           13,511             122
     Marketable securities                                    444,543          678,372           6,109
     Trade accounts and notes receivable,
      less allowance for doubtful accounts                   1,570,205       1,427,122          12,851
     Inventories                                             1,083,326       1,191,041          10,725
     Prepaid expenses and other current assets               1,391,600       1,592,838          14,343
        Total current assets                                 6,125,239       6,216,920          55,983
  Investments and other assets                               4,254,625       4,477,055          40,316
  Property, plant and equipment                              4,398,163       4,522,952          40,729
        Total Non-Financial Services Business assets        14,778,027      15,216,927         137,028

Financial Services Business
   Current assets
      Cash and cash equivalents                                110,900         214,207           1,929
      Time deposits                                             51,784          54,864             494
      Marketable securities                                      3,914             800               7
      Finance receivables, net                               2,608,340       2,835,006          25,529
      Prepaid expenses and other current assets                605,019         584,485           5,264
         Total current assets                                3,379,957       3,689,362          33,223
   Noncurrent finance receivables, net                       3,221,013       3,830,554          34,494
   Investments and other assets                                580,843         467,465           4,209
   Property, plant and equipment                               956,484       1,072,859           9,661
         Total Financial Services Business assets            8,138,297       9,060,240          81,587

   Elimination of assets                                     (876,096)        (966,973)         (8,708)
        Total assets                                     ¥022,040,228     ¥023,310,194       $0209,907




                                                                                                            34
                                                                                               U.S. dollars
                                                                      Yen in millions           in millions
                                                                  March 31,   September 30,   September 30,
                                                                   2004             2004           2004


     Non-Financial Services Business
       Current liabilities
         Short-term borrowings                                  ¥000718,396    ¥000758,411      $0006,829
         Current portion of long-term debt                            62,634         66,061           595
         Accounts payable                                          1,695,255      1,628,552        14,665
         Accrued expenses                                          1,084,357      1,151,471        10,369
         Income taxes payable                                        241,691        255,131         2,298
         Other current liabilities                                   971,796      1,065,345         9,593
            Total current liabilities                              4,774,129      4,924,971        44,349
       Long-term liabilities
         Long-term debt                                             771,791        764,403           6,883
         Accrued pension and severance costs                        724,369        713,352           6,424
         Other long-term liabilities                                600,158        605,394           5,452
            Total long-term liabilities                           2,096,318      2,083,149          18,759
            Total Non-Financial Services Business liabilities     6,870,447      7,008,120          63,108

     Financial Services Business
        Current liabilities
          Short-term borrowings                                   2,029,258      2,152,069          19,379
          Current portion of long-term debt                       1,088,762      1,094,264           9,854
          Accounts payable                                           15,287         20,596             185
          Accrued expenses                                           53,031         62,186             560
          Income taxes payable                                       10,864         16,119             145
          Other current liabilities                                 259,826        286,132           2,577
             Total current liabilities                            3,457,028      3,631,366          32,700
        Long-term liabilities
          Long-term debt                                          3,726,355      4,304,904          38,766
          Accrued pension and severance costs                         1,200          1,443              13
          Other long-term liabilities                               244,386        326,398           2,939
             Total long-term liabilities                          3,971,941      4,632,745          41,718
             Total Financial Services Business liabilities        7,428,969      8,264,111          74,418

       Elimination of liabilities                                  (884,048)      (976,445)        (8,793)
            Total liabilities                                    13,415,368     14,295,786        128,733
       Minority interest in consolidated subsidiaries               446,293        472,332          4,253
       Shareholders’ equity                                       8,178,567      8,542,076         76,921
            Total liabilities and shareholders’ equity          ¥22,040,228    ¥23,310,194      $0209,907
35
                                                                                             U.S. dollars
                                                               Yen in millions                in millions
                                                                                             For the six-
                                                                                            month period
                                                       For the six-month periods ended          ended
                                                                 September 30,              September 30,
Statements of income                                         2003             2004               2004
Non-Financial Services Business
  Net revenues                                         ¥07,867,021       ¥08,655,852          $0077,945
  Costs and expenses
     Cost of revenues                                     6,275,627         6,958,489             62,661
     Selling, general and administrative                    880,774           925,295              8,332
       Total costs and expenses                           7,156,401         7,883,784             70,993
  Operating income                                          710,620           772,068              6,952
  Other income, net                                          44,272            40,854                368
  Income before income taxes, minority interest and
     equity in earnings of affiliated companies             754,892              812,922           7,320
  Provision for income taxes                                285,959              319,354           2,875
  Income before minority interest and equity in
     earnings of affiliated companies                       468,933              493,568           4,445
  Minority interest in consolidated subsidiaries            (18,150)             (26,413)           (238)
  Equity in earnings of affiliated companies                 37,413               50,762             457
  Net income- Non- Financial Services Business              488,196              517,917           4,664

Financial Services Business
   Net revenues                                             371,460              384,366           3,461
   Costs and expenses
      Cost of revenues                                      192,157              182,535           1,643
      Selling, general and administrative                   117,622               99,164             893
        Total costs and expenses                            309,779              281,699           2,536
   Operating income                                          61,681              102,667             925
   Other expenses, net                                       (4,689)              (2,395)            (22)
   Income before income taxes, minority interest
      and equity in earnings of affiliated companies         56,992              100,272             903
   Provision for income taxes                                23,840               41,976             378
   Income before minority interest and equity in
      earnings of affiliated companies                       33,152               58,296             525
   Minority interest in consolidated subsidiaries              (465)                (239)             (2)
   Equity in earnings of affiliated companies                 3,580                8,051              72
   Net income- Financial Services Business                   36,267               66,108             595

  Elimination of net income                                     (3)               13                  0
  Net income                                            ¥00524,460        ¥00584,038          $0005,259

                                                                                                            36
                                                                                                           U.S. dollars
                                                                             Yen in millions                in millions
                                                                                                           For the six-
                                                                                                          month period
                                                                     For the six-month periods ended          ended
                                                                               September 30,              September 30,
     Statement of cash flows                                               2003             2004               2004
                Non-Financial Services Business
     Cash flows from operating activities
       Net income                                                    ¥00,488,196       ¥00,517,917           $004,664
       Adjustments to reconcile net income to net cash provided
        by operating activities
          Depreciation                                                    378,445              389,059           3,503
          Pension and severance costs, less payments                       34,000                2,857              26
          Losses on disposal of fixed assets                               18,423               18,540             167
          Unrealized losses on available-for-sale securities, net           2,697                1,997              18
          Deferred income taxes                                             6,831               19,492             176
          Minority interest in consolidated subsidiaries                   18,150               26,413             238
          Equity in earnings of affiliated companies                      (37,413)             (50,762)           (457)
          Changes in operating assets and liabilities, and other          (44,461)              22,187             199
             Net cash provided by operating activities                    864,868              947,700           8,534

     Cash flows from investing activities
       Additions to fixed assets excluding equipment
          leased to others                                               (433,924)         (531,073)            (4,783)
       Additions to equipment leased to others                            (71,897)          (74,094)              (667)
       Proceeds from sales of fixed assets excluding equipment
          leased to others                                                 25,888            26,037                234
       Proceeds from sales of equipment leased to others                   24,840            38,576                347
       Purchases of marketable securities and security investments       (968,766)         (686,319)            (6,180)
       Proceeds from sales of and maturity of marketable
          securities and security investments                             582,102              166,815           1,502
       Payments for additional investments in affiliated
          companies, net of cash acquired                                 (18,876)             (683)                (6)
       Changes in investments and other assets, and other                  (3,170)           42,691                385
             Net cash used in investing activities                       (863,803)       (1,018,050)            (9,168)

     Cash flows from financing activities
       Purchases of common stock                                         (120,229)         (206,917)            (1,863)
       Proceeds from issuance of long-term debt                            32,088            13,463                121
       Payments of long-term debt                                        (111,290)          (28,653)              (258)
       Increase (Decrease) in short-term borrowings                        (4,387)           45,804                413
       Dividends paid                                                     (69,782)          (83,250)              (750)
       Other                                                              (15,000)           (7,000)               (63)
             Net cash used in financing activities                       (288,600)         (266,553)            (2,400)

     Effect of exchange rate changes on cash and cash equivalents        (30,774)           32,063                289
     Net decrease in cash and cash equivalents                          (318,309)         (304,840)            (2,745)
     Cash and cash equivalents at beginning of period                  1,437,731         1,618,876             14,578
     Cash and cash equivalents at end of period                      ¥01,119,422       ¥01,314,036           $011,833

37
                                                                                                      U.S. dollars
                                                                       Yen in millions                 in millions
                                                                                                      For the six-
                                                                                                     month period
                                                               For the six-month periods ended           ended
                                                                         September 30,               September 30,
                                                                     2003             2004                2004
                 Financial Services Business
Cash flows from operating activities
  Net income                                                    ¥000,036,267     ¥000,066,108           $0000,595
  Adjustments to reconcile net income to net cash provided
      by operating activities
      Depreciation                                                    97,493              96,252               867
      Deferred income taxes                                           15,033              30,358               273
      Minority interest in consolidated subsidiaries                     465                 239                 2
      Equity in earnings of affiliated companies                      (3,580)             (8,051)              (72)
      Changes in operating assets and liabilities, and other             524             163,504             1,472
            Net cash provided by operating activities                146,202             348,410             3,137

Cash flows from investing activities
  Additions to finance receivables                                 (4,182,349)      (4,358,871)            (39,251)
  Collection of and proceeds from sales of finance
      receivables                                                  3,727,776         3,837,570             34,557
  Additions to fixed assets excluding equipment leased to
      others                                                         (11,598)              (7,813)             (70)
  Additions to equipment leased to others                           (226,557)            (287,614)          (2,590)
  Proceeds from sales of fixed assets excluding
      equipment leased to others                                       5,346               3,115                28
  Proceeds from sales of equipment leased to others                  108,233             113,857             1,025
  Purchases of marketable securities and security
      investments                                                   (169,097)             (61,054)            (550)
  Proceeds from sales of and maturity of marketable
      securities and security investments                            123,512               60,092              541
  Changes in investments and other assets, and other                 (19,281)             (20,247)            (182)
            Net cash used in investing activities                   (644,015)            (720,965)          (6,492)

Cash flows from financing activities
  Proceeds from issuance of long-term debt                           706,040              928,861            8,365
  Payments of long-term debt                                        (546,392)            (543,592)          (4,895)
  Increase in short-term borrowings                                  299,919               76,440              688
  Other                                                               15,000                7,000               63
            Net cash provided by financing activities                474,567              468,709            4,221

Effect of exchange rate changes on cash and cash equivalents          (7,262)           7,153                  64
Net increase (decrease) in cash and cash equivalents                 (30,508)         103,307                 930
Cash and cash equivalents at beginning of period                     154,297          110,900                 999
Cash and cash equivalents at end of period                      ¥000,123,789     ¥000,214,207           $0001,929

                 Consolidated
Effect of exchange rate changes on cash and cash equivalents    ¥0000(38,036)     ¥000039,216           $00,00353
Net decrease in cash and cash equivalents                           (348,817)        (201,533)              (1,815)
Cash and cash equivalents at beginning of period                   1,592,028        1,729,776              15,577
Cash and cash equivalents at end of period                      ¥001,243,211     ¥001,528,243           $0013,762
                                                                                                                      38
     11. Per share amounts
         Reconciliations of the differences between basic and diluted net income per share for the six-month
         periods ended September 30, 2003 and 2004 are as follows:
                                                   Yen in        Thousands                         U.S.
                                                   millions       of shares           Yen         dollars
                                                               Weighted-average   Net income    Net income
                                                 Net income         shares         per share     per share


     For the six-month period ended
     September 30, 2003
     Basic net income per common share             ¥0524,460        3,419,900      ¥00,153.36
      Effect of dilutive securities
         Assumed exercise of dilutive stock
         options                                                           90
     Diluted net income per common share           ¥0524,460        3,419,990      ¥00,153.35

     For the six-month period ended
     September 30, 2004
     Basic net income per common share             ¥0584,038        3,312,441      ¥00,176.32      $00,1.59
      Effect of dilutive securities
         Assumed exercise of dilutive stock
         options                                                          760
     Diluted net income per common share           ¥0584,038        3,313,201      ¥00,176.28      $00,1.59
     Certain stock options were not included in the computation of diluted net income per common share for
     the six-month periods ended September 30, 2003 and 2004 because the options’ exercise prices were
     greater than the average market price per common share during the periods.

     The following table shows Toyota’s net assets per share as of March 31, 2004 and September 30, 2004.
     Net assets per share amounts are calculated as dividing net assets’ amount at the end of each period by
     the number of shares issued and outstanding, excluding treasury stock at the end of corresponding
     period.




39
                               Yen in         Thousands                           U.S.
                               millions        of shares            Yen          dollars
                                            Shares issued and
                                            outstanding at the   Net assets     Net assets
                              Net assets    end of the period    per share      per share


As of March 31, 2004
Net assets per common share   ¥08,178,567        3,329,921        ¥02,456.08
As of September 30, 2004
Net assets per common share     8,542,076        3,281,975           2,602.72     $0,023.44




                                                                                              40
     Directors and Auditors                                      Managing Officers
     (as of September 30, 2004)                                  (as of September 30, 2004)


     Board of Directors           Honorary Chairman              Hajime Wakayama
                                  and Director                   Hiroshi Takada
     Chairman of the Board        Shoichiro Toyoda               Teiji Tachibana
     Hiroshi Okuda                                               Shinichi Sasaki
                                  Directors (with Senior         Shin Kanada
     Vice Chairmen                Managing Director status)      Akira Okabe
     Kosuke Ikebuchi              Yukitoshi Funo                 Yoshio Shirai
     Katsuhiro Nakagawa           Atsushi Niimi                  Yoichiro Ichimaru
                                                                 Shoji Ikawa
     President                    Board of Corporate Auditors    Masuji Arai
     Fujio Cho                                                   Koichi Ina
                                  Full-time Corporate Auditors   Yoshikazu Amano
     Executive Vice Presidents     Hideaki Miyahara              Shinichi Kawashima
     Akihiko Saito                 Yoshio Hayashi                Kunio Komada
     Ryuji Araki                   Chiaki Yamaguchi              Akira Sasaki
     Yoshio Ishizaka              Corporate Auditors             Takeshi Yoshida
     Kosuke Shiramizu              Yasutaka Okamura              Hiroshi Kawakami
     Katsuaki Watanabe             Hiromu Okabe                  Hitoshi Nishiyama
     Kazushi Iwatsuki              Yoichi Kaya                   Iwao Nihashi
                                   Tadashi Ishikawa              Shinzo Kobuki
     Senior Managing Directors                                   Tadashi Arashima
     Yasuhito Yamauchi                                           Masamoto Maekawa
     Takashi Kamio                                               Mamoru Furuhashi
     Hiroyuki Watanabe                                           Satoshi Ozawa
     Akio Matsubara                                              Seiichi Sudo
     Tokuichi Uranishi                                           Yasuhiko Ichihashi
     Kazuo Okamoto                                               Tadashi Yamashina
     Kyoji Sasazu                                                Takashi Hata
     Mitsuo Kinoshita                                            James E. Press
     Yoshimi Inaba                                               Gary L. Convis
     Takeshi Uchiyamada                                          Alan J. Jones
     Masatami Takimoto                                           Wahei Hirai
     Akio Toyoda                                                 Tatehito Ueda
     Tetsuo Hattori                                              Takashi Shigematsu
     Takeshi Suzuki                                              Yuzo Ushiyama
                                                                 Yoshikatsu Tanaka
                                                                 Nobuyoshi Hisada
                                                                 Yasumori Ihara
                                                                 Mitsuhisa Kato
                                                                 Takahiko Ijichi
                                                                 Toshio Furutani
                                                                 Tetsuo Agata
                                                                 John H. Conomos
                                                                 Panagiotis J. Athanasopoulos
41
42
TOYOTA MOTOR CORPORATION

Date of Establishment                                           Shares of Common Stock (September 30, 2004)
August 28, 1937                                                 3,609,997,492 shares issued

Head Office                                                     Number of Shareholders (September 30, 2004)
1, Toyota-cho, Toyota City,                                     317,907
Aichi Prefecture 471-8571, Japan
Telephone: (0565)28-2121                                        Transfer Agent in Japan
Facsimile: (0565)23-5800                                        UFJ Trust Bank Ltd.
                                                                4-3, Marunouchi 1-chome, Chiyoda-ku,
                                                                Tokyo 100-0005, Japan
Tokyo Head Office                                               Telephone: (03)3287-2211
4-18 Koraku 1-chome, Bunkyo-ku,                                 http://www.ufjtrustbank.co.jp
Tokyo 112-8701, Japan
Telephone: (03)3817-7111
Facsimile: (03)3817-9034                                        Depositary and transfer agent for
                                                                American Depositary Receipts
                                                                The Bank of New York
New York                                                        101 Barclay Street
Toyota Motor North America, Inc.                                New York, NY 10286, U.S.A.
9 West 57th St., Suite 4900                                     Telephone: (212)815-2042
New York, NY 10019. U.S.A.                                      U.S. toll free: 1-888-269-2377 (1-888-BNY-ADRS)
Telephone: (212)223-0303                                        http://www.adrbny.com
Facsimile: (212)759-7670                                        Ratio: 1 ADR=2 ordinary shares
                                                                Symbol: TM

London
Toyota Motor Europe                                             Ten Largest Shareholders (September 30, 2004)
9 Clifford Street                                               Japan Trustee Services Bank, Ltd.
London, W1S 2LD, U.K.                                           The Master Trust Bank of Japan, Ltd.
Telephone: (020)7851-2312                                       Toyota Industries Corporation
Facsimile: (020)7851-2339                                       Nippon Life Insurance Company
                                                                Trust & Custody Services Bank, Ltd.
                                                                Shinsei Bank, Ltd.
World Wide Web                                                  State Street Bank and Trust Company
http://www.toyota.co.jp                                         Mitsui Sumitomo Insurance Co., Ltd.
                                                                Sumitomo Mitsui Banking Corporation
                                                                The Tokio Marine and Fire Insurance Co., Ltd.




Front cover : The Crown Majesta (Fully redesigned in Japan in 2004)

				
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