Form 6-K TOYOTA MOTOR CORP/ For: Nov 29

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

 

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 under

the Securities Exchange Act of 1934

For the month of November, 2016

Commission File Number 001-14948

 

 

Toyota Motor Corporation

(Translation of Registrant’s Name Into English)

 

 

1, Toyota-cho, Toyota City,

Aichi Prefecture 471-8571,

Japan

(Address of Principal Executive Offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F      X        Form 40-F             

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):            

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):            

 

 

 

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Material Contained in this Report:

 

I.	Executive Summary of the Japanese-language Quarterly Securities Report, as filed with the Director of the Kanto Local Finance Bureau on November 11, 2016.

 

II.

The registrant’s Unaudited Condensed Consolidated Financial Statements for the periods ended September 30, 2016, prepared in accordance with U.S. generally accepted accounting principles, which materially conform to the Consolidated Financial Statements filed with the Japanese-language Quarterly Securities Report referred to above.

 

III.	English excerpt translation of a Report on Number of Listed Shares, as filed by the registrant with the Tokyo Stock Exchange on November 18, 2016.

 

IV.	English excerpt translation of Semi-Annual Business Report for the registrant’s first half of the 113th period from April 1, 2016 through September 30, 2016, as distributed to the shareholders on November 28, 2016.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date: November 29, 2016

Japanese-language Quarterly Securities Reports for the periods ended September 30, 2016, as filed with the Director of the Kanto Local Finance Bureau of the Ministry of Finance of Japan on November 11, 2016, and which includes the following:

 

I.

Corporate information

 

A.

Corporate overview

 

1.

History of changes in major business indices

 

2.

Overview of business

 

B.

Business

 

1.

Risk factors

 

2.

Material contracts

 

3.

Analysis of financial position, results of operations and cash flows

 

C.

Company information

 

1.

Share information

 

2.

Directors and corporate auditors

 

D.

Financial information

 

1.

Consolidated financial statements and notes

 

2.

Other

 

II.

Information on Guarantors

Auditors Report

Certificate

 

 

TOYOTA MOTOR

CORPORATION

Unaudited Consolidated Financial Statements

For the periods ended

September 30, 2016

 

 

 

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TOYOTA MOTOR CORPORATION

Unaudited Consolidated Balance Sheets

At March 31, 2016 and September 30, 2016

 

 

		Yen in millions
		March 31, 2016				September 30, 2016
Assets
Current assets:
Cash and cash equivalents			2,939,428				2,767,004
Time deposits			1,032,034				987,985
Marketable securities			1,511,389				1,503,005
Trade accounts and notes receivable, less allowance for doubtful accounts			2,000,149				1,805,932
Finance receivables, net			5,912,684				5,349,933
Other receivables			451,406				425,195
Inventories			2,061,511				2,058,076
Deferred income taxes			967,607				—
Prepaid expenses and other current assets			1,333,345				756,009
Total current assets			18,209,553				15,653,139
Noncurrent finance receivables, net			8,642,947				7,944,409
Investments and other assets:
Marketable securities and other securities investments			7,439,799				7,355,033
Affiliated companies			2,631,612				2,587,773
Employees receivables			32,998				29,075
Other			730,271				917,845
Total investments and other assets			10,834,680				10,889,726
Property, plant and equipment:
Land			1,352,904				1,347,459
Buildings			4,311,895				4,253,545
Machinery and equipment			10,945,267				10,524,881
Vehicles and equipment on operating leases			5,652,622				5,282,596
Construction in progress			513,953				502,263
Total property, plant and equipment, at cost			22,776,641				21,910,744
Less – Accumulated depreciation			(13,036,224	)			(12,621,913	)
Total property, plant and equipment, net			9,740,417				9,288,831
Total assets			47,427,597				43,776,105

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

 

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TOYOTA MOTOR CORPORATION

Unaudited Consolidated Balance Sheets

At March 31, 2016 and September 30, 2016

 

 

		Yen in millions
		March 31, 2016				September 30, 2016
Liabilities
Current liabilities:
Short-term borrowings			4,698,134				4,600,148
Current portion of long-term debt			3,822,954				3,554,849
Accounts payable			2,389,515				2,225,891
Other payables			1,040,277				824,848
Accrued expenses			2,726,120				2,556,974
Income taxes payable			343,325				226,339
Other current liabilities			1,104,131				1,029,213
Total current liabilities			16,124,456				15,018,262
Long-term liabilities:
Long-term debt			9,772,065				8,706,063
Accrued pension and severance costs			904,911				917,057
Deferred income taxes			2,046,089				1,230,450
Other long-term liabilities			491,890				462,009
Total long-term liabilities			13,214,955				11,315,579
Total liabilities			29,339,411				26,333,841
Mezzanine equity
Model AA Class Shares, no par value, authorized: 150,000,000 shares at March 31, 2016 and September 30, 2016 issued: 47,100,000 shares at March 31, 2016 and September 30, 2016			479,779				483,452
Shareholders’ equity
Toyota Motor Corporation shareholders’ equity:
Common stock, no par value, authorized: 10,000,000,000 shares at March 31, 2016 and September 30, 2016 issued: 3,337,997,492 shares at March 31, 2016 and September 30, 2016			397,050				397,050
Additional paid-in capital			548,161				514,587
Retained earnings			16,794,240				17,401,371
Accumulated other comprehensive income (loss)			610,768				(103,018	)
Treasury stock, at cost, 300,321,622 shares at March 31, 2016 and 334,684,022 shares at September 30, 2016			(1,603,284	)			(1,818,082	)
Total Toyota Motor Corporation shareholders’ equity			16,746,935				16,391,908
Noncontrolling interests			861,472				566,904
Total shareholders’ equity			17,608,407				16,958,812
Commitments and contingencies
Total liabilities, mezzanine equity and shareholders’ equity			47,427,597				43,776,105

Note: The total number of authorized shares for common stock and Model AA Class Shares is 10,000,000,000 shares.

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

 

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TOYOTA MOTOR CORPORATION

Unaudited Consolidated Statements of Income and

Unaudited Consolidated Statements of Comprehensive Income

For the first half ended September 30, 2016

 

Consolidated Statements of Income

 

		Yen in millions
		For the first half  ended September 30, 2015				For the first half  ended September 30, 2016
Net revenues:
Sales of products			13,162,616				12,216,706
Financing operations			928,872				853,827
Total net revenues			14,091,488				13,070,533
Costs and expenses:
Cost of products sold			10,518,787				10,056,838
Cost of financing operations			588,751				533,813
Selling, general and administrative			1,400,545				1,363,017
Total costs and expenses			12,508,083				11,953,668
Operating income			1,583,405				1,116,865
Other income (expense):
Interest and dividend income			83,036				79,754
Interest expense			(19,658	)			(11,113	)
Foreign exchange gain (loss), net			36,590				(27,907	)
Other income (loss), net			(8,222	)			18,935
Total other income (expense)			91,746				59,669
Income before income taxes and equity in earnings of affiliated companies			1,675,151				1,176,534
Provision for income taxes			516,368				354,924
Equity in earnings of affiliated companies			161,662				168,395
Net income			1,320,445				990,005
Less – Net income attributable to noncontrolling interests			(62,333	)			(43,832	)
Net income attributable to Toyota Motor Corporation			1,258,112				946,173

 

Note:

Net income attributable to common shareholders for the first half ended September 30, 2016 and 2015 is 941,275 million yen and 1,255,652 million yen, respectively, which is derived by deducting dividend and accretion to Model AA Class Shares of 4,898 million yen and 2,460 million yen, respectively, from Net income attributable to Toyota Motor Corporation.

 

		Yen
Net income attributable to Toyota Motor Corporation per common share
Basic			399.39				311.08
Diluted			397.75				307.84

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

 

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TOYOTA MOTOR CORPORATION

Unaudited Consolidated Statements of Income and

Unaudited Consolidated Statements of Comprehensive Income

For the first half ended September 30, 2016

 

Consolidated Statements of Comprehensive Income

 

		Yen in millions
		For the first half ended September 30, 2015				For the first half ended September 30, 2016
Net income			1,320,445				990,005
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments			(142,295	)			(554,883	)
Unrealized gains (losses) on securities			(252,582	)			(191,427	)
Pension liability adjustments			(535	)			(714	)
Total other comprehensive income (loss)			(395,412	)			(747,024	)
Comprehensive income			925,033				242,981
Less – Comprehensive income attributable to noncontrolling interests			(31,596	)			(8,368	)
Comprehensive income attributable to Toyota Motor Corporation			893,437				234,613

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

 

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TOYOTA MOTOR CORPORATION

Unaudited Consolidated Statements of Income and

Unaudited Consolidated Statements of Comprehensive Income

For the second quarter ended September 30, 2016

 

Consolidated Statements of Income

 

		Yen in millions
		For the second quarter ended September 30, 2015				For the second quarter ended September 30, 2016
Net revenues:
Sales of products			6,634,883				6,057,702
Financing operations			468,957				423,718
Total net revenues			7,103,840				6,481,420
Costs and expenses:
Cost of products sold			5,269,997				5,043,030
Cost of financing operations			280,376				268,395
Selling, general and administrative			726,063				695,360
Total costs and expenses			6,276,436				6,006,785
Operating income			827,404				474,635
Other income (expense):
Interest and dividend income			29,710				22,993
Interest expense			(15,262	)			(6,190	)
Foreign exchange gain, net			2,402				1,398
Other income (loss), net			(14,362	)			6,642
Total other income (expense)			2,488				24,843
Income before income taxes and equity in earnings of affiliated companies			829,892				499,478
Provision for income taxes			248,411				167,099
Equity in earnings of affiliated companies			60,760				78,395
Net income			642,241				410,774
Less – Net income attributable to noncontrolling interests			(30,523	)			(17,066	)
Net income attributable to Toyota Motor Corporation			611,718				393,708

 

Note:

Net income attributable to common shareholders for the second quarter ended September 30, 2016 and 2015 is 391,259 million yen and 609,258 million yen, respectively, which is derived by deducting dividend and accretion to Model AA Class Shares of 2,449 million yen and 2,460 million yen, respectively, from Net income attributable to Toyota Motor Corporation.

 

		Yen
Net income attributable to Toyota Motor Corporation per common share
Basic			193.97				129.77
Diluted			192.51				128.54

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

 

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TOYOTA MOTOR CORPORATION

Unaudited Consolidated Statements of Income and

Unaudited Consolidated Statements of Comprehensive Income

For the second quarter ended September 30, 2016

 

Consolidated Statements of Comprehensive Income

 

		Yen in millions
		For the second quarter ended September 30, 2015				For the second quarter ended September 30, 2016
Net income			642,241				410,774
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments			(227,562	)			(104,983	)
Unrealized gains (losses) on securities			(330,242	)			73,775
Pension liability adjustments			(2,376	)			2,894
Total other comprehensive income (loss)			(560,180	)			(28,314	)
Comprehensive income			82,061				382,460
Less – Comprehensive income attributable to noncontrolling interests			3,045				(12,635	)
Comprehensive income attributable to Toyota Motor Corporation			85,106				369,825

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

 

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TOYOTA MOTOR CORPORATION

Unaudited Condensed Consolidated Statements of Cash Flows

For the first half ended September 30, 2016

 

 

		Yen in millions
		For the first half ended September 30, 2015				For the first half ended September 30, 2016
Cash flows from operating activities:
Net income			1,320,445				990,005
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation			784,705				767,044
Provision for doubtful accounts and credit losses			43,737				37,763
Pension and severance costs, less payments			7,293				21,956
Losses on disposal of fixed assets			18,077				12,202
Unrealized losses on available-for-sale securities, net			6,197				5,990
Deferred income taxes			53,219				18,740
Equity in earnings of affiliated companies			(161,662	)			(168,395	)
Changes in operating assets and liabilities, and other			(114,488	)			(110,929	)
Net cash provided by operating activities			1,957,523				1,574,376
Cash flows from investing activities:
Additions to finance receivables			(7,018,921	)			(6,471,350	)
Collection of and proceeds from sales of finance receivables			6,725,564				6,248,137
Additions to fixed assets excluding equipment leased to others			(631,430	)			(592,974	)
Additions to equipment leased to others			(1,422,814	)			(1,198,120	)
Proceeds from sales of fixed assets excluding equipment leased to others			14,846				15,866
Proceeds from sales of equipment leased to others			537,111				620,871
Purchases of marketable securities and security investments			(915,383	)			(1,220,327	)
Proceeds from sales of and maturity of marketable securities and security investments			1,580,087				864,289
Changes in investments and other assets, and other			(1,025,228	)			698,684
Net cash used in investing activities			(2,156,168	)			(1,034,924	)
Cash flows from financing activities:
Proceeds from issuance of long-term debt			2,806,288				2,080,740
Payments of long-term debt			(2,150,070	)			(2,112,216	)
Increase in short-term borrowings			230,267				353,872
Proceeds from issuance of class shares			474,917				—
Dividends paid to Toyota Motor Corporation class shareholders			—				(1,224	)
Dividends paid to Toyota Motor Corporation common shareholders			(393,352	)			(334,144	)
Dividends paid to noncontrolling interests			(59,027	)			(47,934	)
Reissuance (repurchase) of treasury stock, and other			(245,819	)			(505,603	)
Net cash provided by (used in) financing activities			663,204				(566,509	)
Effect of exchange rate changes on cash and cash equivalents			(58,265	)			(145,367	)
Net increase (decrease) in cash and cash equivalents			406,294				(172,424	)
Cash and cash equivalents at beginning of period			2,284,557				2,939,428
Cash and cash equivalents at end of period			2,690,851				2,767,004

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

 

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TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

 

 

1.	Basis of preparation:

The accompanying unaudited condensed consolidated financial statements of Toyota Motor Corporation (the “parent company”) as of and for the periods ended September 30, 2016, have been prepared in accordance with U.S. generally accepted accounting principles (“U.S.GAAP”) and on substantially the same basis as its annual consolidated financial statements except for certain required disclosures which have been omitted. The unaudited condensed consolidated financial statements should be read in conjunction with the Annual Report on Form 20-F for the year ended March 31, 2016. The unaudited condensed consolidated financial statements reflect all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the result for that period and the financial condition at that date. The consolidated results for the six-month and the three-month periods are not necessarily indicative of results to be expected for the full year.

 

2.	Accounting changes and recent pronouncements to be adopted in future periods:

Accounting changes -

In February 2015, the Financial Accounting Standards Board (“FASB”) issued updated guidance that amends the analysis a reporting entity must perform to determine whether it should consolidate certain legal entities. The parent company and its consolidated subsidiaries (“Toyota”) adopted this guidance on April 1, 2016. The adoption of this guidance did not have a material impact on Toyota’s consolidated financial statements.

In April 2015, the FASB issued updated guidance that requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. In August 2015, the FASB issued an additional update which clarifies that debt issuance costs for line of credit agreements may continue to be deferred and amortized. Toyota adopted this guidance on April 1, 2016. The adoption of this guidance did not have a material impact on Toyota’s consolidated financial statements.

In April 2015, the FASB issued updated guidance to help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement. Toyota adopted this guidance on April 1, 2016. The adoption of this guidance did not have a material impact on Toyota’s consolidated financial statements.

In May 2015, the FASB issued updated guidance on disclosures for investments in certain entities that calculate net asset value per share. This guidance removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. Toyota adopted this guidance on April 1, 2016. The adoption of this guidance did not have a material impact on Toyota’s consolidated financial statements. For a further discussion of additional disclosures by adoption of this guidance, see note 8 to the consolidated financial statements.

 

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TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

 

 

In November 2015, the FASB issued updated guidance to simplify the balance sheet classification of deferred taxes. This guidance will require that deferred tax assets and liabilities be classified as noncurrent on the balance sheet. Toyota early adopted this guidance on April 1, 2016. Toyota adopted this guidance on a prospective basis from April 1, 2016 and prior periods were not retrospectively adjusted.

Recent pronouncements to be adopted in future periods -

In May 2014, the FASB issued updated guidance on the recognition of revenue from contracts with customers. This guidance will supersede the current revenue recognition guidance. In August 2015, the FASB issued updated guidance on the deferral of the effective date. As a result, this guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. This guidance may be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying this guidance recognized at the date of initial application. Management is evaluating the impact of adopting this guidance on Toyota’s consolidated financial statements.

In July 2015, the FASB issued updated guidance to simplify the measurement of inventory. This guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Management is evaluating the impact of adopting this guidance on Toyota’s consolidated financial statements.

In January 2016, the FASB issued updated guidance for financial instruments. This guidance addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments and will require entities to measure equity investments at fair value and recognize any changes in fair value in net income. This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Management is evaluating the impact of adopting this guidance on Toyota’s consolidated financial statements.

In February 2016, the FASB issued updated guidance for leases. This guidance will require lessees to recognize almost all leases on their balance sheet as a right-of-use asset and a lease liability. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Management is evaluating the impact of adopting this guidance on Toyota’s consolidated financial statements.

 

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TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

 

 

In March 2016, the FASB issued updated guidance for effect of derivative contract novations on existing hedge accounting relationships. This guidance clarifies that a change in the counterparty to a designated derivative hedging instrument does not, in and of itself, require designation of that hedging relationship provided that all other hedge accounting criteria continue to be met. This guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Management does not expect this guidance to have a material impact on Toyota’s consolidated financial statements.

In March 2016, the FASB issued updated guidance for contingent put and call options in debt instruments. This guidance clarifies whether embedded contingent put and call options are clearly and closely related to the debt host when bifurcating embedded derivatives. This guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Management does not expect this guidance to have a material impact on Toyota’s consolidated financial statements.

In June 2016, the FASB issued updated guidance for measurement of credit losses on financial instruments. This guidance introduces an approach to estimate credit losses on certain types of financial instruments based on expected losses. It also modifies the impairment model for available-for-sale debt securities. This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Management is evaluating the impact of adopting this guidance on Toyota’s consolidated financial statements.

In August 2016, the FASB issued updated guidance for classification of statement of cash flows. This guidance clarifies classification of certain cash receipts and cash payments of statement of cash flows. This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Management is evaluating the impact of adopting this guidance on Toyota’s consolidated financial statements.

In October 2016, the FASB issued updated guidance that would require entities to recognize the income tax consequences of intercompany asset transfers. This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Management does not expect this guidance to have a material impact on Toyota’s consolidated financial statements.

In October 2016, the FASB issued updated guidance for consolidation. Under this guidance, a reporting entity would evaluate its indirect economic interest in a variable interest entity held through a related party under common control on a proportionate basis. This guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Management does not expect this guidance to have a material impact on Toyota’s consolidated financial statements.

 

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TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

 

 

3.	Accounting procedures specific to quarterly consolidated financial statements:

Provision for income taxes -

The provision for income taxes is computed by multiplying income before income taxes and equity in earnings of affiliated companies for the first half by estimated annual effective tax rates. These estimated annual effective tax rates reflect anticipated investment tax credits, foreign tax credits and other items, including changes in valuation allowances, that are expected to affect estimated annual effective tax rates.

 

4.	Derivative financial instruments:

Toyota employs derivative financial instruments, including foreign exchange forward contracts, foreign currency options, interest rate swaps, interest rate currency swap agreements and interest rate options to manage its exposure to fluctuations in interest rates and foreign currency exchange rates. Toyota does not use derivatives for speculation or trading.

Fair value hedges -

Toyota enters into interest rate swaps and interest rate currency swap agreements mainly to convert its fixed-rate debt to variable-rate debt. Toyota uses interest rate swap agreements in managing interest rate risk exposure. Interest rate swap agreements are executed as either an integral part of specific debt transactions or on a portfolio basis. Toyota uses interest rate currency swap agreements to hedge exposure to currency exchange rate fluctuations on principal and interest payments for borrowings denominated in foreign currencies. Notes and loans payable issued in foreign currencies are hedged by concurrently executing interest rate currency swap agreements, which involve the exchange of foreign currency principal and interest obligations for each functional currency obligations at agreed-upon currency exchange and interest rates.

For the first half and the second quarter ended September 30, 2015 and 2016, the ineffective portion of Toyota’s fair value hedge relationships was not material. For fair value hedging relationships, the components of each derivative’s gain or loss are included in the assessment of hedge effectiveness.

Undesignated derivative financial instruments -

Toyota uses foreign exchange forward contracts, foreign currency options, interest rate swaps, interest rate currency swap agreements, and interest rate options, to manage its exposure to foreign currency exchange rate fluctuations and interest rate fluctuations from an economic perspective, and for some of which Toyota is unable to or has elected not to apply hedge accounting.

 

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TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

 

 

Fair value and gains or losses on derivative financial instruments -

The following table summarizes the fair values of derivative financial instruments as of March 31, 2016 and September 30, 2016:

 

		Yen in millions
		March 31, 2016				September 30, 2016
Derivative assets
Derivative financial instruments designated as hedging instruments
Interest rate and currency swap agreements
Prepaid expenses and other current assets			—				—
Investments and other assets - Other			4,371				7,724
Total			4,371				7,724
Undesignated derivative financial instruments
Interest rate and currency swap agreements
Prepaid expenses and other current assets			96,996				60,428
Investments and other assets - Other			230,726				194,645
Total			327,722				255,073
Foreign exchange forward and option contracts
Prepaid expenses and other current assets			34,290				30,476
Investments and other assets - Other			428				279
Total			34,718				30,755
Total derivative assets			366,811				293,552
Counterparty netting			(116,174	)			(87,187	)
Collateral received			(65,810	)			(64,095	)
Carrying value of derivative assets			184,827				142,270
Derivative liabilities
Derivative financial instruments designated as hedging instruments
Interest rate and currency swap agreements
Other current liabilities			—				—
Other long-term liabilities			—				—
Total			—				—
Undesignated derivative financial instruments
Interest rate and currency swap agreements
Other current liabilities			(42,404	)			(64,687	)
Other long-term liabilities			(180,716	)			(122,200	)
Total			(223,120	)			(186,887	)
Foreign exchange forward and option contracts
Other current liabilities			(21,167	)			(7,646	)
Other long-term liabilities			—				(44	)
Total			(21,167	)			(7,690	)
Total derivative liabilities			(244,287	)			(194,577	)
Counterparty netting			116,174				87,187
Collateral posted			94,953				82,050
Carrying value of derivative liabilities			(33,160	)			(25,340	)

 

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TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

 

 

The following table summarizes the notional amounts of derivative financial instruments as of March 31, 2016 and September 30, 2016:

 

		Yen in millions
		March 31, 2016								September 30, 2016
		Designated derivative financial instruments				Undesignated derivative financial instruments				Designated derivative financial instruments				Undesignated derivative financial instruments
Interest rate and currency swap agreements			41,016				18,312,359				36,808				17,084,406
Foreign exchange forward and option contracts			—				2,742,102				—				2,355,589
Total			41,016				21,054,461				36,808				19,439,995

 

The following table summarizes the gains and losses on derivative financial instruments and hedged items reported in the consolidated statements of income for the first half and the second quarter ended September 30, 2015 and 2016:

 

		Yen in millions
		For the first half ended September 30, 2015								For the first half ended September 30, 2016
		Gains or (losses) on derivative financial instruments				Gains or (losses) on hedged items				Gains or (losses) on derivative financial instruments				Gains or (losses) on hedged items
Derivative financial instruments designated as hedging instruments
Interest rate and currency swap agreements
Cost of financing operations			(2,137	)			2,122				3,904				(3,904	)
Undesignated derivative financial instruments
Interest rate and currency swap agreements
Cost of financing operations			110,932								17,776
Foreign exchange gain (loss), net			13,646								(3,711	)
Foreign exchange forward and option contracts
Cost of financing operations			6,930								3,665
Foreign exchange gain (loss), net			33,493								124,289

 

14

 

 

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TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

 

 

		Yen in millions
		For the second quarter ended September 30, 2015								For the second quarter ended September 30, 2016
		Gains or (losses) on derivative financial instruments				Gains or (losses) on hedged items				Gains or (losses) on derivative financial instruments				Gains or (losses) on hedged items
Derivative financial instruments designated as hedging instruments
Interest rate and currency swap agreements
Cost of financing operations			(304	)			314				298				(289	)
Undesignated derivative financial instruments
Interest rate and currency swap agreements
Cost of financing operations			115,862								18,604
Foreign exchange gain (loss), net			10,411								(3,463	)
Foreign exchange forward and option contracts
Cost of financing operations			11,869								(3,092	)
Foreign exchange gain (loss), net			36,987								27,854

Undesignated derivative financial instruments are used to manage economic risks of fluctuations in foreign currency exchange rates and interest rates of certain receivables and payables. Those economic risks are offset by changes in the fair value of undesignated derivative financial instruments.

Cash flows from transactions of derivative financial instruments are included in cash flows from operating activities in the consolidated statements of cash flows.

Credit risk related contingent features -

Toyota enters into International Swaps and Derivatives Association Master Agreements with counterparties. These Master Agreements contain a provision requiring either Toyota or the counterparty to settle the contract or to post assets to the other party in the event of a ratings downgrade below a specified threshold.

The aggregate fair value amount of derivative financial instruments that contain credit risk related contingent features that are in a net liability position after being offset by cash collateral as of September 30, 2016 is ¥2,473 million. The aggregate fair value amount of assets that are already posted as cash collateral as of September 30, 2016 is ¥70,380 million. If the ratings of Toyota decline below specified thresholds, the maximum amount of assets to be posted or for which Toyota could be required to settle the contracts is ¥2,473 million as of September 30, 2016.

 

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TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

 

 

5.	Contingencies:

Guarantees -

Toyota enters into contracts with Toyota dealers to guarantee customers’ payments of their installment payables that arise from installment contracts between customers and Toyota dealers, as and when requested by Toyota dealers. 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, 2016 is ¥2,405,803 million. Liabilities for guarantees totaling ¥5,762 million have been provided as of September 30, 2016. Under these guarantee contracts, Toyota is entitled to recover any amount paid by Toyota from the customers whose original obligations Toyota has guaranteed.

Legal proceedings -

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

In 2010, there was a recall related to the software program that controls the antilock braking system in certain models, including the Prius, which led to putative class action lawsuits on behalf of owners of recalled vehicles and owners of vehicles which were not recalled. The United States District Court for the Central District of California denied the plaintiffs’ motions for class certification and granted summary judgment in Toyota’s favor denying the plaintiffs’ claims related to both the recalled vehicles and the non-recalled vehicles. The District Court’s rulings have been affirmed by the Ninth Circuit Court of Appeals.

 

16

 

 

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TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

 

 

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

Toyota has been named as a defendant in 33 economic loss class action lawsuits in the United States, which, together with similar lawsuits against Takata and other automakers, have been made part of a multi-district litigation proceeding in the United States District Court for the Southern District of Florida, arising out of allegations that airbag inflators manufactured by Takata are defective. These lawsuits are at an early stage.

Toyota has received a request for information from the SDNY related to statements concerning one or more reported injuries sustained in Toyota vehicles following deployments of Takata airbags. Toyota is cooperating with the request.

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

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

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

 

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TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

 

 

6.	Segment data:

The operating segments reported below are the segments of Toyota for which separate financial information is available and for which operating income/loss amounts are evaluated regularly by executive management in deciding how to allocate resources and in assessing performance.

The major portions of Toyota’s operations on a worldwide basis are derived from the Automotive and Financial Services business segments. The Automotive segment designs, manufactures and distributes sedans, minivans, compact cars, sport-utility vehicles, trucks and related parts and accessories. The Financial Services segment consists primarily of financing, and vehicle and equipment leasing operations to assist in the merchandising of the parent company and its affiliated companies products as well as other products. The All Other segment includes the design, manufacturing and sales of housing, telecommunications and other businesses.

The following tables present certain information regarding Toyota’s industry or geographic segments and overseas revenues by destination for the first half and the second quarter ended September 30, 2015 and 2016.

Segment operating results -

For the first half ended September 30, 2015:

 

		Yen in millions
		Automotive				Financial Services				All Other				Inter-segment Elimination				Consolidated
Net revenues
Sales to external customers			12,856,840				928,872				305,776				—				14,091,488
Inter-segment sales and transfers			26,091				21,109				245,772				(292,972	)			—
Total			12,882,931				949,981				551,548				(292,972	)			14,091,488
Operating expenses			11,491,577				784,138				524,313				(291,945	)			12,508,083
Operating income			1,391,354				165,843				27,235				(1,027	)			1,583,405
For the first half ended September 30, 2016:
		Yen in millions
		Automotive				Financial Services				All Other				Inter-segment Elimination				Consolidated
Net revenues
Sales to external customers			11,915,160				853,827				301,546				—				13,070,533
Inter-segment sales and transfers			22,849				17,137				231,306				(271,292	)			—
Total			11,938,009				870,964				532,852				(271,292	)			13,070,533
Operating expenses			11,000,649				718,768				505,623				(271,372	)			11,953,668
Operating income			937,360				152,196				27,229				80				1,116,865

 

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TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

 

 

For the second quarter ended September 30, 2015:

 

		Yen in millions
		Automotive				Financial Services				All Other				Inter-segment Elimination				Consolidated
Net revenues
Sales to external customers			6,458,452				468,957				176,431				—				7,103,840
Inter-segment sales and transfers			13,089				10,722				118,168				(141,979	)			—
Total			6,471,541				479,679				294,599				(141,979	)			7,103,840
Operating expenses			5,757,750				384,009				279,647				(144,970	)			6,276,436
Operating income			713,791				95,670				14,952				2,991				827,404

For the second quarter ended September 30, 2016:

 

		Yen in millions
		Automotive				Financial Services				All Other				Inter-segment Elimination				Consolidated
Net revenues
Sales to external customers			5,897,299				423,718				160,403				—				6,481,420
Inter-segment sales and transfers			11,673				8,335				123,406				(143,414	)			—
Total			5,908,972				432,053				283,809				(143,414	)			6,481,420
Operating expenses			5,515,053				370,098				266,908				(145,274	)			6,006,785
Operating income			393,919				61,955				16,901				1,860				474,635

 

19

 

 

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TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

 

 

Geographic information -

For the first half ended September 30, 2015:

 

		Yen in millions
		Japan				North America				Europe				Asia				Other				Inter-segment Elimination				Consolidated
Net revenues
Sales to external customers			4,149,579				5,416,766				1,244,296				2,204,258				1,076,589				—			14,091,488
Inter-segment sales and transfers			3,072,596				114,026				65,017				236,834				108,233				(3,596,706	)		—
Total			7,222,175				5,530,792				1,309,313				2,441,092				1,184,822				(3,596,706	)		14,091,488
Operating expenses			6,263,942				5,255,398				1,279,062				2,196,962				1,117,928				(3,605,209	)		12,508,083
Operating income			958,233				275,394				30,251				244,130				66,894				8,503			1,583,405
For the first half ended September 30, 2016:
		Yen in millions
		Japan				North America				Europe				Asia				Other				Inter-segment Elimination				Consolidated
Net revenues
Sales to external customers			4,119,205				4,785,406				1,166,278				2,057,926				941,718				—			13,070,533
Inter-segment sales and transfers			2,861,212				90,989				59,639				243,644				104,894				(3,360,378	)		—
Total			6,980,417				4,876,395				1,225,917				2,301,570				1,046,612				(3,360,378	)		13,070,533
Operating expenses			6,495,708				4,565,136				1,191,392				2,078,779				993,761				(3,371,108	)		11,953,668
Operating income			484,709				311,259				34,525				222,791				52,851				10,730			1,116,865
“Other” consists of Central and South America, Oceania, Africa and the Middle East.

 

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TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

 

 

For the second quarter ended September 30, 2015:

 

		Yen in millions
		Japan				North America				Europe				Asia				Other				Inter-segment Elimination				Consolidated
Net revenues
Sales to external customers			2,142,419				2,635,474				636,733				1,160,467				528,747				—			7,103,840
Inter-segment sales and transfers			1,577,794				54,873				28,556				137,648				59,800				(1,858,671	)		—
Total			3,720,213				2,690,347				665,289				1,298,115				588,547				(1,858,671	)		7,103,840
Operating expenses			3,237,834				2,541,813				642,897				1,154,082				559,681				(1,859,871	)		6,276,436
Operating income			482,379				148,534				22,392				144,033				28,866				1,200			827,404

For the second quarter ended September 30, 2016:

 

		Yen in millions
		Japan				North America				Europe				Asia				Other				Inter-segment Elimination				Consolidated
Net revenues
Sales to external customers			2,139,769				2,300,602				576,245				994,421				470,383				—			6,481,420
Inter-segment sales and transfers			1,479,238				41,234				27,842				124,492				54,696				(1,727,502	)		—
Total			3,619,007				2,341,836				604,087				1,118,913				525,079				(1,727,502	)		6,481,420
Operating expenses			3,424,665				2,202,017				578,572				1,023,570				499,528				(1,721,567	)		6,006,785
Operating income			194,342				139,819				25,515				95,343				25,551				(5,935	)		474,635

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

Revenues are attributed to geographies based on the country location of the parent company or the subsidiary that transacted the sale with the external customer.

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

 

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TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

 

 

Overseas revenues by destination -

The following information shows revenues that are attributed to countries based on location of customers, excluding customers in Japan. In addition to the disclosure requirements under U.S.GAAP, Toyota discloses this information in order to provide financial statements users with valuable information.

For the first half ended September 30, 2015:

 

		Yen in millions
		North America				Europe				Asia				Other				Total
Overseas sales			5,394,689				1,138,140				2,063,518				2,472,122				11,068,469
Consolidated sales			—				—				—				—				14,091,488
Ratio of overseas sales to consolidated sales			38.3	%			8.1	%			14.6	%			17.5	%			78.5	%

For the first half ended September 30, 2016:

		Yen in millions
		North America				Europe				Asia				Other				Total
Overseas sales			4,782,618				1,065,043				2,069,144				1,945,550				9,862,355
Consolidated sales			—				—				—				—				13,070,533
Ratio of overseas sales to consolidated sales			36.6	%			8.2	%			15.8	%			14.9	%			75.5	%

For the second quarter ended September 30, 2015:

		Yen in millions
		North America				Europe				Asia				Other				Total
Overseas sales			2,623,311				582,153				1,021,745				1,301,260				5,528,469
Consolidated sales			—				—				—				—				7,103,840
Ratio of overseas sales to consolidated sales			36.9	%			8.2	%			14.4	%			18.3	%			77.8	%

For the second quarter ended September 30, 2016:

		Yen in millions
		North America				Europe				Asia				Other				Total
Overseas sales			2,303,290				519,262				1,014,710				969,384				4,806,646
Consolidated sales			—				—				—				—				6,481,420
Ratio of overseas sales to consolidated sales			35.5	%			8.0	%			15.7	%			15.0	%			74.2	%

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

 

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TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

 

 

7.	Per share amounts:

Reconciliations of the differences between basic and diluted net income attributable to Toyota Motor Corporation per common share for the first half and the second quarter ended September 30, 2015 and 2016 are as follows:

 

		Yen in millions				Thousands of shares				Yen
		Net income attributable to Toyota Motor Corporation				Weighted- average common shares				Net income attributable to Toyota Motor Corporation per common share
For the first half ended September 30, 2015
Net income attributable to Toyota Motor Corporation			1,258,112
Accretion to Mezzanine equity			(1,235	)
Dividends to Toyota Motor Corporation Model AA Class Shareholders			(1,225	)
Basic net income attributable to Toyota Motor Corporation per common share			1,255,652				3,143,912				399.39
Effect of dilutive securities
Model AA Class Shares			2,460				17,759
Assumed exercise of dilutive stock options			(16	)			1,384
Diluted net income attributable to Toyota Motor Corporation per common share			1,258,096				3,163,055				397.75
For the first half ended September 30, 2016
Net income attributable to Toyota Motor Corporation			946,173
Accretion to Mezzanine equity			(2,425	)
Dividends to Toyota Motor Corporation Model AA Class Shareholders			(2,473	)
Basic net income attributable to Toyota Motor Corporation per common share			941,275				3,025,876				311.08
Effect of dilutive securities
Model AA Class Shares			4,898				47,100
Assumed exercise of dilutive stock options			(4	)			636
Diluted net income attributable to Toyota Motor Corporation per common share			946,169				3,073,612				307.84

 

23

 

 

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TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

 

 

 

		Yen in millions				Thousands of shares				Yen
		Net income attributable to Toyota Motor Corporation				Weighted- average common shares				Net income attributable to Toyota Motor Corporation per common share
For the second quarter ended September 30, 2015
Net income attributable to Toyota Motor Corporation			611,718
Accretion to Mezzanine equity			(1,235	)
Dividends to Toyota Motor Corporation Model AA Class Shareholders			(1,225	)
Basic net income attributable to Toyota Motor Corporation per common share			609,258				3,140,962				193.97
Effect of dilutive securities
Model AA Class Shares			2,460				35,325
Assumed exercise of dilutive stock options			(6	)			1,244
Diluted net income attributable to Toyota Motor Corporation per common share			611,712				3,177,531				192.51
For the second quarter ended September 30, 2016
Net income attributable to Toyota Motor Corporation			393,708
Accretion to Mezzanine equity			(1,212	)
Dividends to Toyota Motor Corporation Model AA Class Shareholders			(1,237	)
Basic net income attributable to Toyota Motor Corporation per common share			391,259				3,015,060				129.77
Effect of dilutive securities
Model AA Class Shares			2,449				47,100
Assumed exercise of dilutive stock options			(2	)			634
Diluted net income attributable to Toyota Motor Corporation per common share			393,706				3,062,794				128.54

On May 11, 2016, the Board of Directors of the parent company resolved to distribute year-end cash dividends of ¥334,144 million, ¥110 per common share, to common shareholders effective on June 2, 2016. On November 8, 2016, the Board of Directors of the parent company resolved to distribute interim cash dividends of ¥300,331 million, ¥100 per common share, to common shareholders effective on November 29, 2016.

 

24

 

 

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TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

 

 

 

8.	Fair value measurements:

In accordance with U.S.GAAP, Toyota classifies fair value into three levels of input as follows which are used to measure it.

 

The following table summarizes the fair values of the assets and liabilities measured at fair value on a recurring basis as of March 31, 2016 and September 30, 2016. Transfers between levels of the fair value are recognized at the end of their respective reporting periods:

 

		Yen in millions
		March 31, 2016
		Level 1				Level 2				Level 3				Total
Assets
Cash equivalents			100,841				915,684				—				1,016,525
Time deposits			—				600,000				—				600,000
Marketable securities and other securities investments
Public and corporate bonds			4,911,769				1,029,478				10,334				5,951,581
Common stocks			2,558,931				—				—				2,558,931
Other			83,082				68,185				—				151,267
Investments measured at net asset value			—				—				—				197,215
Derivative financial instruments			—				362,388				4,423				366,811
Total			7,654,623				2,975,735				14,757				10,842,330
Liabilities
Derivative financial instruments			—				(242,713	)			(1,574	)			(244,287	)
Total			—				(242,713	)			(1,574	)			(244,287	)

 

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TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

 

 

 

		Yen in millions
		September 30, 2016
		Level 1				Level 2				Level 3				Total
Assets
Cash equivalents			27,197				911,320				—				938,517
Time deposits			—				600,000				—				600,000
Marketable securities and other securities investments
Public and corporate bonds			4,722,401				933,768				8,603				5,664,772
Common stocks			2,510,915				—				—				2,510,915
Other			77,538				40,774				—				118,312
Investments measured at net asset value			—				—				—				470,544
Derivative financial instruments			—				290,148				3,404				293,552
Total			7,338,051				2,776,010				12,007				10,596,612
Liabilities
Derivative financial instruments			—				(189,657	)			(4,920	)			(194,577	)
Total			—				(189,657	)			(4,920	)			(194,577	)

Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.

The following is description of the assets and liabilities measured at fair value, information about the valuation techniques used to measure fair value, key inputs and significant assumptions:

Cash equivalents and time deposits -

Cash equivalents include money market funds and other investments with original maturities of three months or less. Cash equivalents classified in Level 2 include negotiable certificates of deposit with original maturities of three months or less. These are measured at fair value using primarily observable interest rates in the market. Time deposits consist of negotiable certificates of deposit with original maturities over three months. These are measured at fair value using primarily observable interest rates in the market.

Marketable securities and other securities investments -

Marketable securities and other securities investments include public and corporate bonds, common stocks and other investments. Public and corporate bonds include government bonds and represent 37% of Japanese bonds, and 63% of U.S., European and other bonds as of March 31, 2016, and 34% of Japanese bonds, and 66% of U.S., European and other bonds as of September 30, 2016. Listed stocks on the Japanese stock markets represent 90% and 90% of common stocks as of March 31, 2016 and September 30, 2016, respectively. Toyota uses primarily quoted market prices for identical assets to measure fair value of these securities. “Other” includes investment trusts. Generally, Toyota uses quoted market prices for similar assets or quoted non-active market prices for identical assets to measure fair value of these securities. These assets are classified in Level 2.

 

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TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

 

 

Derivative financial instruments -

See note 4 to the consolidated financial statements about derivative financial instruments. Toyota primarily estimates the fair value of derivative financial instruments using industry-standard valuation models that require observable inputs including interest rates and foreign exchange rates, and the contractual terms. The usage of these models does not require significant judgment to be applied. These derivative financial instruments are classified in Level 2. In other certain cases when market data is not available, key inputs to the fair value measurement include quotes from counterparties, and other market data. Toyota assesses the reasonableness of changes of the quotes using observable market data. These derivative financial instruments are classified in Level 3. Toyota’s derivative fair value measurements consider assumptions about counterparty and Toyota’s own non-performance risk, using such as credit default probabilities.

The changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the first half and second quarter ended September 30, 2015 and 2016 were not material.

Certain assets and liabilities are measured at fair value on a nonrecurring basis. The assets and liabilities measured at fair value on a nonrecurring basis for the first half and second quarter ended September 30, 2015 and 2016 were not material.

 

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TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

 

 

 

9.	Accumulated other comprehensive income:

Changes in accumulated other comprehensive income (loss) are as follows:

 

		Yen in millions
		Foreign currency translation adjustments				Unrealized gains (losses) on securities				Pension liability adjustments				Accumulated other comprehensive income (loss)
For the first half ended September 30, 2015
Balance at March 31, 2015			(136,090	)			1,727,565				(113,930	)			1,477,545
Other comprehensive income (loss) before reclassifications			(142,295	)			(242,828	)			(3,160	)			(388,283	)
Reclassifications			—				(9,754	)			2,625				(7,129	)
Other comprehensive income (loss), net of tax			(142,295	)			(252,582	)			(535	)			(395,412	)
Less – Other comprehensive income attributable to noncontrolling interests			25,047				5,248				442				30,737
Balance at September 30, 2015			(253,338	)			1,480,231				(114,023	)			1,112,870
For the first half ended September 30, 2016
Balance at March 31, 2016			(499,055	)			1,424,945				(315,122	)			610,768
Other comprehensive income (loss) before reclassifications			(554,883	)			(189,315	)			(6,002	)			(750,200	)
Reclassifications			—				(2,112	)			5,288				3,176
Other comprehensive income (loss), net of tax			(554,883	)			(191,427	)			(714	)			(747,024	)
Less – Other comprehensive income attributable to noncontrolling interests			33,504				669				1,291				35,464
Equity transaction with noncontrolling interests and other			(8,626	)			9,060				(2,660	)			(2,226	)
Balance at September 30, 2016			(1,029,060	)			1,243,247				(317,205	)			(103,018	)

 

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TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

 

 

Reclassifications consist of the following:

 

		Yen in millions
		For the first half ended September 30, 2015				For the first half ended September 30, 2016				Affected line items in the consolidated statements of income
Unrealized gains (losses) on securities:
			1,221				(8,717	)		Financing operations
			(13,966	)			198			Foreign exchange gain (loss), net
			(1,440	)			4,096			Other income (loss), net
			(14,185	)			(4,423	)		Income before income taxes and equity in earnings of affiliated companies
			4,431				2,444			Provision for income taxes
			(0	)			(133	)		Equity in earnings of affiliated companies
			(9,754	)			(2,112	)		Net income
Pension liability adjustments:
Recognized net actuarial loss			6,325				9,888			*1
Amortization of prior service costs			(2,114	)			(1,897	)		*1
			4,211				7,991			Income before income taxes and equity in earnings of affiliated companies
			(1,586	)			(2,703	)		Provision for income taxes
			2,625				5,288			Net income
Total reclassifications, net of tax			(7,129	)			3,176

Amounts of reclassifications in parentheses indicate gains in the consolidated statements of income.

 

*1:	These components are included in the computation of net periodic pension cost.

 

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TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

 

 

 

10.	Significant subsequent events:

Repurchase of shares -

At the Meeting of the Board of Directors held on November 8, 2016, TMC resolved to repurchase its common shares pursuant to Article 156 of the Companies Act of Japan (the “Companies Act”) as applied to Article 165, Paragraph 3 of the Companies Act, as set forth below.

Reason for repurchasing shares

To return capital to shareholders in addition to promoting capital efficiency and agile capital policy in view of the business environment.

Details of matters relating to repurchase

 

Kind of stock to be repurchased		Common stock of TMC
Number of shares to be repurchased		40,000,000 shares (maximum)
Total purchase price for repurchase of shares		¥200,000 million (maximum)
Method of acquisition		Market purchase through a trust bank
Period of repurchase		From November 15, 2016 to February 14, 2017

Retirement of treasury stock -

At the Meeting of the Board of Directors held on November 8, 2016, TMC resolved to retire its treasury stock pursuant to Article 178 of the Companies Act.

Reason for retiring treasury stock

To relieve concerns regarding the dilution of TMC’s share value due to disposition of treasury stock in the future.

Details of matters relating to retirement

 

Kind of stock to be retired		Common stock of TMC
Number of shares to be retired		75,000,000 shares
Scheduled date of retirement		November 30, 2016

 

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(Excerpt Translation)

November 18, 2016

Toyota Motor Corporation

1, Toyota-cho, Toyota City, Aichi Prefecture

Report on Number of Listed Shares

We hereby report changes in the number of listed securities, as a result of the exercise of stock acquisition rights, etc. in October 2016 (the “Current Month”).

 

1.

Summary

 

Number of listed shares as of the end of the preceding month			3,337,997,492 shares
Total number of shares changed during the Current Month			0 shares
(out of which, as a result of exercise of stock acquisition rights)			(0 shares	)
(out of which, as a result of other reasons)			(0 shares	)
Number of listed shares as of the end of the Current Month			3,337,997,492 shares

 

2.	Stock acquisition rights exercised

<Details of shares delivered (issued or transferred) upon exercise of stock acquisition rights>

 

(1)	Number of shares

 

 

(2)	Exercise price

 

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