~~Research and Development of, and Collaboration Regarding, Connected Platforms~~

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

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

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

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

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

The Executive Compensation Meeting reviews the remuneration system for members of the board of directors and senior management and determines the amount of remuneration for each member of the board of directors, taking into account factors such as corporate performance as well as individual job responsibilities and performance. The members of the meeting are Takeshi Uchiyamada, the Chairman of the Board of Directors, and Koji Kobayashi, Ikuro Sugawara, Sir Philip Craven and Teiko Kudo, each, a Member of the Board of Directors.

the operation and management of such facilities as parking lots, showrooms, educational facilities, medical care facilities, sports facilities, marinas, airfields, food and drink stands and restaurants, lodging facilities, retail stores and others;

thenon-life insurance agency business and the life insurance agency business;

the production and processing by using biotechnology of agricultural products including trees, and the sale of such products;

the sale of goods related to each of the preceding items and mineral oil;

the conducting of engineering, consulting, invention and research relating to each of the preceding items and the utilization of such invention and research; and

any businesses incidental to or related to any of the preceding items.

Dividends

Dividends — General

Toyota normally pays dividends twice per year, including an interim dividend and ayear-end dividend. Toyota’s articles of incorporation provide that retained earnings can be distributed as dividends pursuant to a resolution of its board of directors. Toyota’s board of directors resolves to payyear-end dividends to holders of common shares and registered pledgees of common shares of record as of March 31, the record date, in each year. In addition, the articles of incorporation provide that in the event that Toyota pays ayear-end dividend to holders of common shares, it will pay AA Dividends in cash from surplus to any holders of Model AA Class Shares or registered pledgees of Model AA Class Shares entered or recorded in the final register of shareholders as of the record date for theyear-end dividend, in preference to holders of common shares or registered pledgees of common shares. The amount of annual AA Dividends per Model AA Class Share is

calculated by multiplying the amount per Model AA Class Share paid to Toyota as consideration by a rate determined by the board of directors prior to the issuance of such Model AA Class Share, which rate is not to exceed 5%.

In addition to theseyear-end dividends, Toyota may pay an interim dividend in the form of cash distributions from its distributable surplus to holders of common shares and pledgees of common shares of record as of September 30, the record date, in each year by a resolution of its board of directors. The articles of incorporation provide that in the event that Toyota pays such interim dividends, Toyota will pay AA Interim Dividends in cash as interim dividend to any holders of Model AA Class Shares or registered pledgees of Model AA Class Shares entered or recorded in the final register of shareholders as of the record date for the interim dividend, in preference to holders of common shares or registered pledgees of common shares. If AA Interim Dividends are paid during the fiscal year in which the record date for theyear-end dividend falls, the amount of AA Interim Dividends is deducted from AA Dividends to be paid per the above paragraph.

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

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

Dividends — Distributable amount

Under the Companies Act, Toyota is permitted to make distributions of surplus to the extent that the aggregate book value of the assets to be distributed to shareholders does not exceed the distributable amount provided for by the Companies Act and the ordinance of the Ministry of Justice as at the effective date of such distribution of surplus.

The amount of surplus at any given time shall be the amount of Toyota’s assets and the book value of Toyota’s treasury stock after subtracting and adding the amounts of items provided for by the Companies Act and the ordinance of the Ministry of Justice, and the amount of surplus distributable for dividends is calculated by adding to and subtracting from this amount the amounts of items provided for by the Companies Act and the ordinance of the Ministry of Justice.

Dividends — Prescription

Under its articles of incorporation, Toyota is not obligated to pay any dividends in cash which are left unclaimed for a period of three years after the date on which they first became payable.

Capital Accounts

The amount of the cash or assets paid or contributed by subscribers for new shares (with certain exceptions) is required to be accounted for as stated capital, although Toyota may account for an amount not exceedingone-half of such cash or assets as additionalpaid-in capital.

Under the Companies Act, Toyota may reduce its additionalpaid-in capital and legal reserve without limitation on the amount to be reduced, generally, by a resolution of a general shareholders’ meeting and if so

decided by the same resolution, may account for the whole or any part of the amount of the reduction of additionalpaid-in capital as stated capital. The whole or any part of surplus which may be distributed as dividends may also be transferred to stated capital by a resolution of a general shareholders’ meeting.

Stock Splits

Toyota may at any time split the outstanding shares into a greater number of shares by a resolution of the board of directors. Toyota must give public notice of the stock split, specifying a record date for the stock split, not less than two weeks prior to the record date. Toyota shall conduct any stock split simultaneously and in the same proportion with respect to the common shares and the Model AA Class Shares.

Consolidation of Shares

Toyota may at any time consolidate shares in issue into a smaller number of shares by a special shareholders resolution (as defined in “Voting Rights”). When a consolidation of shares is to be made, Toyota must give public notice of certain matters two weeks prior to the effective date of the consolidation. Toyota must disclose the reason for the consolidation of shares at a general shareholders’ meeting. Toyota shall conduct any consolidation of shares simultaneously and in the same proportion with respect to the common shares and the Model AA Class Shares.

Japanese Unit Share System

General.Consistent with the requirements of the Companies Act, Toyota’s articles of incorporation provide that 100 common shares or Model AA Class Shares each constitute one “unit.” Although the number of shares constituting a unit is included in the articles of incorporation, any amendment to the articles of incorporation reducing (but not increasing) the number of shares constituting a unit or eliminating the provisions for the unit of shares may be made by a resolution of the board of directors rather than by a special shareholders resolution, which is otherwise required for amending the articles of incorporation.

Voting Rights under the Unit Share System.Under the unit share system, shareholders have one voting right for each unit of shares that they hold. Any number of common shares or Model AA Class Shares less than a full unit will carry no voting rights.

Purchase by Toyota of Shares Constituting Less Than a Unit.A holder of shares constituting less than a full unit may require Toyota to purchase those shares at their market value in the case of common shares and at fair price in the case of Model AA Class Shares in accordance with the provisions of Toyota’s share handling regulations and the Companies Act.

Surrender of American Depositary Receipts.ADR holders will only be permitted to surrender ADRs and withdraw underlying common shares constituting an integral number of a whole unit. If a holder surrenders an ADR including ADRs representing common shares that do not constitute an integral number of whole units, the Depositary will deliver to that holder only those common shares which constitute a whole unit. The Depositary will then issue to the holder a new ADR representing the remaining shares. Holders of an ADR that represents less than a whole unit of underlying shares will be unable to withdraw the underlying shares. As a result, those holders will be unable to require Toyota to purchase their common shares to the extent those common shares constitute less than one whole unit.

Voting Rights

Toyota holds its ordinary general shareholders’ meeting each year. In addition, Toyota may hold an extraordinary general shareholders’ meeting whenever necessary by giving at least two weeks’ advance notice. Under the Companies Act, notice of any shareholders’ meeting must be given to each shareholder having voting rights or, in the case of anon-resident shareholder, to his or her resident proxy or mailing address in Japan in accordance with Toyota’s share handling regulations, at least two weeks prior to the date of the meeting.

Holders of common shares and holders of Model AA Class Shares shall have voting rights exercisable at a general shareholders’ meeting. A holder of shares constituting one or more whole units is entitled to one vote per unit of shares subject to the limitations on voting rights set forth in this paragraph. In general, under the Companies Act, a resolution can be adopted at a general shareholders’ meeting by a majority of the shares having voting rights represented at the meeting. The Companies Act and Toyota’s articles of incorporation require a quorum for the election of members of the board of directors and audit & supervisory board members of not less thanone-third of the total number of outstanding shares having voting rights. Toyota’s shareholders are not entitled to cumulative voting in the election of members of the board of directors. A corporate shareholder, the management of which is substantially under Toyota’s control as provided by an ordinance of the Ministry of Justice, either through the holding of voting rights or for any other reason, does not have voting rights.

Shareholders may exercise their voting rights by attending the general shareholders’ meeting or in writing by mail. Shareholders who choose to exercise their voting rights by mail must fill out and return to Toyota the voting right exercise form enclosed with the convocation notice of the general shareholders’ meeting by the date specified in such convocation notice. In addition, from the general shareholders’ meeting for fiscal 2009, shareholders may exercise their voting rights through the internet. Shareholders electing to exercise their voting rights through the internet must log on to the “Website to Exercise Voting Rights” using the login ID and temporary password provided in the voting right exercise form enclosed with the convocation notice and submit their votes by a date specified in the convocation notice, following instructions appearing on the website. Institutional investors may also use the Electronic Proxy Voting Platform operated by Investor Communications Japan (“ICJ”) to exercise their voting rights through the use of the Internet, if such institutional investor applies to use the platform in advance. Shareholders may also exercise their voting rights through proxies, provided that those proxies are also shareholders who have voting rights. Toyota may refuse a shareholder having two or more proxies attend a general shareholders’ meeting.

The Companies Act provides that a quorum of at leastone-third of outstanding shares with voting rights must be present at a shareholders’ meeting to approve any material corporate actions such as:

(1)

any amendment of the articles of incorporation with certain exceptions in which a shareholders’ resolution is not required;

(2)

acquisition of its own shares from a specific party;

(3)

consolidation of shares;

(4)

any issue or transfer of its shares at a “specially favorable” price (or any issue of stock acquisition rights or bonds with stock acquisition rights at “specially favorable” conditions by Toyota) to any persons other than shareholders;

(5)

the removal of an audit & supervisory board member;

(6)

the exemption of liability of a director or audit & supervisory board member with certain exceptions;

(7)

a reduction of stated capital which meets certain requirements with certain exceptions;

(8)

a distribution ofin-kind dividends which meets certain requirements;

(9)

dissolution, merger, or consolidation with certain exceptions in which a shareholders’ resolution is not required;

(10)

the transfer of the whole or a material part of the business;

(11)

the transfer in entirety or in part of shares or equity interest of a subsidiary under certain conditions;

(12)

the taking over of the entire business of any other corporation with certain exceptions in which a shareholders’ resolution is not required;

(13)

share exchange or share transfer for the purpose of establishing 100% parent-subsidiary relationships with certain exceptions in which a shareholders’ resolution is not required; or

(14)

company split with certain exceptions in which a shareholders’ resolution is not required.

At leasttwo-thirds of the shares having voting rights represented at the meeting must approve these actions.

The voting rights of holders of ADSs are exercised by the Depositary based on instructions from those holders.

Rights to be Allotted Shares

Holders of common shares and Model AA Class Shares have no preemptive rights under Toyota’s articles of incorporation. Under the Companies Act, the board of directors may, however, determine that shareholders shall be given rights to be allotted shares or stock acquisition rights on request in connection with a particular issue or transfer of shares, or issue of stock acquisition rights, respectively. In this case, such rights must be given on uniform terms to all shareholders as of a specified record date by at least two weeks’ prior public notice to shareholders of the record date.

Rights to be allotted shares are nontransferable. However, a shareholder may be allotted stock acquisition rights without consideration thereto, and may transfer such rights.

Liquidation Rights

In the event of a liquidation of Toyota, the assets remaining after payment of all debts, liquidation expenses and taxes will be distributed as follows. First, an amount per First Series Model AA Class Share through Fifth

Series Model AA Class Share, determined by resolution of the board of directors or calculated using a formula determined by a resolution of the board of directors prior to the issuance of such Model AA Class Shares based on the amount per Model AA Class Shares paid to Toyota as consideration (the “Base Amount”), shall be paid in cash to holders of Model AA Class Shares or registered pledgees of Model AA Class Shares. No other distribution of residual assets shall be made to holders of Model AA Class Shares or registered pledgees of Model AA Class Shares. The remaining residual assets shall be distributed among the holders of common shares or registered pledgees of common shares in proportion to the respective number of shares they own.

Liability to Further Calls or Assessments

All of Toyota’s currently outstanding shares, including shares represented by the ADSs, are fully paid and nonassessable.

Transfer Agent

Mitsubishi UFJ Trust and Banking Corporation is the transfer agent for all shares. Mitsubishi UFJ Trust and Banking Corporation’s office is located at4-5, Marunouchi1-chome,Chiyoda-ku, ~~Chiyoda-ku,~~ Tokyo,100-8212 Japan. Mitsubishi UFJ Trust and Banking Corporation maintains Toyota’s register of shareholders and records transfers of record ownership (in the case of common shares, upon receiving notification from JASDEC).

Record Date

The close of business on March 31 is the record date for Toyota’syear-end dividends, if paid. A holder of common shares or Model AA Class Shares constituting one or more whole units who is recorded or registered as a holder on Toyota’s register at the close of business as of March 31 is also entitled to exercise shareholders’ voting rights at the ordinary general shareholders’ meeting with respect to the business year ending on March 31.

The close of business on September 30 of each year is the record date for interim dividends, if paid. In addition, Toyota may set a record date for determining the shareholders entitled to other rights and for other purposes by giving at least two weeks’ prior public notice.

The shares generally tradeex-dividend orex-rights in the Japanese stock exchanges ~~on the second~~two business ~~day before~~days prior to a record date (or if the record date is not a business day, ~~the third~~three business ~~day~~days prior thereto), for the purpose of dividends or rights offerings. However, in connection with the scheduled shortening of the settlement period of shares listed on any Japanese stock exchange, theex-dividend date andex-rights date is expected to become the preceding business day before the record date (or if the record date is not a business day, two business days prior thereto) if the record date is on or after July 18, 2019 (provided, however, such transition date is subject to change).

Acquisition by Toyota of Shares

Toyota may acquire its own common shares (i) through a stock exchange on which such shares are listed or by way of tender offer (pursuant to an ordinary resolution of a general shareholders’ meeting or a resolution of the board of directors), (ii) by purchase from a specific party (pursuant to a special resolution of a general shareholders’ meeting) or (iii) from a subsidiary of Toyota (pursuant to a resolution of the board of directors). In addition, Toyota may acquire its own Model AA Class Shares (i) by purchase from all holders of the relevant series of Model AA Class Shares who make an offer to transfer the shares to Toyota upon notice from Toyota to acquire the shares (pursuant to an ordinary resolution of a general shareholders’ meeting), (ii) by purchase from a specific party (pursuant to a special resolution of a general shareholders’ meeting) or (iii) from a subsidiary of Toyota (pursuant to a resolution of the board of directors). When such acquisition of common shares is made by Toyota from a specific party other than a subsidiary of Toyota, any other holder of common shares may make a demand to a representative director, more than five calendar days prior to the relevant shareholders’ meeting, that Toyota also purchase the common shares held by such holder. However, the acquisition of its own common shares at a price not exceeding the market price to be provided under an ordinance of the Ministry of Justice will not trigger the right of any shareholder to include him/her as the seller of his/her shares in such proposed purchase.

Any acquisition of shares must satisfy certain requirements that the total amount of the acquisition price may not exceed the amount of the distributable dividends. See “— Dividends.”

Shares acquired by Toyota may be held by it for any period or may be cancelled by resolution of the board of directors. Toyota may also transfer to any person the shares held by it, subject to a resolution of the board of directors, and subject also to other requirements applicable to the issuance of new shares. Toyota may also utilize its treasury stock for the purpose of transfer to any person upon exercise of stock acquisition rights or for the purpose of acquiring another company by way of merger, share exchange or corporate split through exchange of treasury stock for shares or assets of the acquired company.

The Companies Act generally prohibits any subsidiary of Toyota from acquiring shares of Toyota.

Model AA Class Shareholder’s Conversion Right into Common Shares

Holders of Model AA Class Shares may, at certain times specified in resolution of the board of directors as the conversion period at the time of the issuance of First Series Model AA Class Shares to Fifth Series Model AA Class Shares, demand that Toyota acquire some or all of such Model AA Class Shares held by such holder of Model AA Class shares in exchange for common shares in a number determined by a formula specified in such board resolution. Any fractions of less than one common share to be delivered in exchange for such Model AA Class Shares shall be disregarded, in which case payment of money as provided in the Companies Act shall not be made.

Model AA Class Shareholder’s Cash Put Option

Holders of Model AA Class Shares may, at certain times specified in resolution of the board of directors as the cash put option period at the time of the issuance of First Series Model AA Class Shares to Fifth Series Model AA Class Shares, demand that Toyota acquire some or all of such Model AA Class Shares in exchange for cash in an amount equivalent to the Base Amount. If demand for acquisition exceeds the amount available under the Companies Act for distribution as of the date of demand for such acquisition, Model AA Class Shares to be acquired by Toyota shall be determined by a resolution of the board of directors, and the cash put option in respect of Model AA Class Shares not so acquired shall be deemed not to have been exercised.

Toyota’s Cash Call Option

After the lapse of period specified in resolution of its board of directors at the time of the issuance of First Series Model AA Class Shares to Fifth Series Model AA Class Shares, on an acquisition date separately determined by a resolution of the board of directors, Toyota may acquire all of such Model AA Class Shares in exchange for cash in an amount equivalent to the Base Amount.

Acquisition or Disposition of Shares or ADS

Under the Foreign Exchange and Foreign Trade Law and the cabinet orders and ministerial ordinances thereunder (collectively, the “Foreign Exchange Regulations”), all aspects of regulations on foreign exchange and foreign trade transactions are, with minor exceptions (which are not generally applicable to the purchase and sale of Toyota’s shares), only subject to post transaction reporting requirements. Acquisitions and dispositions of shares of common stock or ADS bynon-residents of Japan (including foreign corporations not resident in Japan) are generally not subject to this reporting requirement. However, the Minister of Finance has the power to impose a licensing requirement for transactions in limited circumstances.

Report of Substantial Shareholdings

The Financial Instruments and Exchange Law of Japan and regulations under the Law require any person who has become a holder (together with its related persons) of more than 5% of the total issued shares of a

company listed on any Japanese stock exchange (including ADSs representing such shares) to file with the Director of a competent Local Finance Bureau, within five business days, a report concerning those shareholdings. A similar report must also be filed to reflect any change of 1% or more in any shareholding or any change in material matters set out in reports previously filed. Any such report shall be filed with the Director of a competent Local Finance Bureau through the Electronic Disclosure for Investor’s Network (“EDINET”) system. For this purpose, shares issuable to a shareholder upon exercise of stock acquisition rights are taken into account in determining both the number of shares held by that stock acquisition rights holder and the company’s total issued shares.

10.C MATERIAL CONTRACTS

All contracts concluded by Toyota during the two years preceding this filing were entered into in the ordinary course of business.

10.D EXCHANGE CONTROLS

The Foreign Exchange Regulations govern the acquisition and holding of shares of capital stock of Toyota by “exchangenon-residents” and by “foreign investors.” The Foreign Exchange Regulations currently in effect do not, however, affect transactions between exchangenon-residents to purchase or sell shares outside Japan using currencies other than Japanese yen.

Exchangenon-residents are:

individuals who do not reside in Japan; and

corporations whose principal offices are located outside Japan.

Generally, branches and other offices ofnon-resident corporations that are located within Japan are regarded as residents of Japan. Conversely, branches and other offices of Japanese corporations located outside Japan are regarded as exchangenon-residents.

Foreign investors are:

individuals who are exchangenon-residents;

corporations or other organizations that are organized under the laws of foreign countries or whose principal offices are located outside of Japan; and

corporations (1) of which 50% or more of their voting rights are held directly or indirectly by individuals who are exchangenon-residents and/or corporations or other organizations (a) that are organized under the laws of foreign countries or (b) whose principal offices are located outside of Japan or (2) a majority of whose officers, or officers having the power of representation, are individuals who are exchangenon-residents.

In general, the acquisition of shares of a Japanese company (such as the shares of capital stock of Toyota) by an exchangenon-resident from a resident of Japan is not subject to any prior filing requirements. In certain limited circumstances, however, the Minister of Finance may require prior approval of an acquisition of this type. While prior approval, as described above, is not required, in the case where a resident of Japan transfers shares of a Japanese company (such as the shares of capital stock of Toyota) for consideration exceeding ¥100 million to an exchangenon-resident, the resident of Japan who transfers the shares is required to report the transfer to the Minister of Finance within 20 days from the date of the transfer or the date of receipt of payment, whichever comes later, unless the transfer was made through a bank or financial instruments business operator licensed or registered under Japanese law.

If a foreign investor acquires shares of a Japanese company that is listed on a Japanese stock exchange (such as the shares of capital stock of Toyota) and, as a result of the acquisition, the foreign investor, in combination with any existing holdings, directly or indirectly holds 10% or more of the issued shares of the relevant company, the foreign investor, in general, must file a report of the acquisition with the Minister of Finance and any other competent Ministers having jurisdiction over that Japanese company by the 15th day of the month following the month in which the date of the acquisition falls. In limited circumstances, such as where the foreign investor is in a country that is not listed on an exemption schedule in the Foreign Exchange Regulations, or where that Japanese company is engaged in certain businesses designated by the Foreign Exchange Regulations, a prior notification of the acquisition must be filed with the Minister of Finance and any other competent Ministers, who may then modify or prohibit the proposed acquisition.

Under the Foreign Exchange Regulations, dividends paid on, and the proceeds of sales in Japan of, shares held bynon-residents of Japan may in general be converted into any foreign currency and repatriated abroad. Under the terms of the deposit agreement pursuant to which Toyota’s ADSs are issued, the Depositary is required, to the extent that in its judgment it can convert yen on a reasonable basis into dollars and transfer the resulting dollars to the United States, to convert all cash dividends that it receives in respect of deposited shares into dollars and to distribute the amount received (after deduction of applicable withholding taxes) to the holders of ADSs.

10.E TAXATION

The following discussion is a general summary of the principal U.S. federal income and Japanese national tax consequences of the acquisition, ownership and disposition of shares of common stock or ADSs. This

summary does not purport to address all material tax consequences that may be relevant to holders of shares of common stock or ADSs, and does not take into account the specific circumstances of any particular investors, some of which (such astax-exempt entities, banks, insurance companies, broker-dealers, traders in securities that elect to use amark-to-market method of accounting for their securities holdings, regulated investment companies, real estate investment trusts, partnerships and other pass-through entities, investors liable for the U.S. alternative minimum tax, investors that own or are treated as owning 10% or more of Toyota’s stock (by vote or value), investors that hold shares of common stock or ADSs as part of a straddle, hedge, conversion transaction or other integrated transaction, U.S. Holders (as defined below) subject to special tax accounting rules as a result of any item of gross income with respect to shares of common stock or ADSs being taken into account in an “applicable financial statement” (as defined in section 451 of the Internal Revenue Code of 1986, as amended) and U.S. Holders (as defined below) whose functional currency is not the U.S. dollar) may be subject to special tax rules. This summary is based on the tax laws and regulations of the United States and Japan, judicial decisions, published rulings and administrative pronouncements all as in effect on the date hereof, as well as on the current income tax convention between the United States and Japan (the “Treaty”), as described below, all of which are subject to change (possibly with retroactive effect), and to differing interpretations.

For purposes of this discussion, a “U.S. Holder” is any beneficial owner of shares of common stock or ADSs that, for U.S. federal income tax purposes, is:

an individual who is a citizen or resident of the United States;

a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized in or under the laws of the United States, any state thereof, or the District of Columbia;

an estate the income of which is subject to U.S. federal income tax without regard to its source; or

a trust that is subject to the primary supervision of a U.S. court and the control of one or more U.S. persons, or that has a valid election in effect under applicable Treasury regulations to be treated as a U.S. person.

An “Eligible U.S. Holder” is a U.S. Holder that:

is a resident of the United States for purposes of the Treaty;

does not maintain a permanent establishment in Japan (a) with which the shares of common stock or ADSs are effectively connected and through which the U.S. Holder carries on or has carried on business, or (b) of which the shares of common stock or ADSs form part of the business property; and

is eligible for benefits under the Treaty with respect to income and gain derived in connection with the shares of common stock or ADSs.

This summary does not address any aspects of U.S. federal tax law other than income taxation and does not discuss any aspects of Japanese ~~tax law~~taxation other than income taxation, as limited to national taxes, inheritance and gift taxation. This summary also does not cover any state or local, ornon-U.S.,non-Japanese tax considerations. Investors are urged to consult their tax advisors regarding the U.S. federal, state and local and Japanese and other tax consequences of acquiring, owning and disposing of shares of common stock or ADSs. In particular, where relevant, investors are urged to confirm their status as Eligible U.S. Holders with their tax advisors and to discuss with their tax advisors any possible consequences of their failure to qualify as Eligible U.S. Holders. In addition, this summary is based in part upon the representations of the Depositary and the assumption that each obligation in the deposit agreement, and in any related agreement, will be performed in accordance with its terms.

In general, for purposes of the Treaty and for U.S. federal income and Japanese income tax purposes, owners of ADRs evidencing ADSs will be treated as the owners of the shares of common stock represented by those ADSs, and exchanges of shares of common stock for ADSs, and exchanges of ADSs for shares of common stock, will not be subject to U.S. federal income or Japanese income tax.

The discussion below is intended for general information only and does not constitute a complete analysis of all tax consequences relating to ownership of shares of common stock or ADSs. Prospective purchasers of shares of common stock or ADSs should consult their own tax advisors concerning the tax consequences of their particular situations.

Japanese Taxation

The following is a summary of the principal Japanese tax consequences (limited to national taxes) tonon-residents of Japan ornon-Japanese corporations without permanent establishments in Japan(“non-resident Holders”) who are holders of shares of common stock or of ADSs of Toyota. The following information regarding taxation in Japan is based on the tax treaties and tax laws in force and their interpretation by Japan’s tax authorities as of the date of this annual report. Tax laws and treaties and their interpretations may change (including with retroactive effect). Toyota will not revise this summary on the basis of any such change occurring after the date of this annual report.

Generally,non-resident Holders are subject to Japanese withholding tax on dividends paid by Japanese corporations. Stock splits are, in general, not taxable events.

In the absence of an applicable income tax treaty, convention or agreement reducing the maximum rate of Japanese withholding tax or allowing an exemption from Japanese withholding tax, the rate of Japanese withholding tax applicable to dividends paid by Japanese corporations tonon-resident Holders is generally 20.42 percent, provided that, with respect to dividends paid on listed shares issued by a Japanese corporation (such as the shares of common stock or ADSs of Toyota) tonon-resident Holders, other than any individual shareholder who holds 3three percent or more of the total issued shares of the relevant Japanese corporation, the aforementioned 20.42 percent withholding tax rate is reduced to 15.315 percent for dividends due and payable on or before December 31, 2037. These rates include a special additional withholding tax (2.1 percent of the original withholding tax amount) to secure funds for reconstruction from the Great East Japan Earthquake.

At the date of this annual report, Japan has income tax treaties, conventions or agreements whereby the above-mentioned withholding tax rate is reduced, in most cases to 15 percent or 10ten percent for portfolio investors

~~(15~~ (15 percent under the income tax treaties in force with, among other countries, Belgium (until 2019), Canada, Denmark, Finland, Germany, Iceland, Ireland, Italy, Luxembourg, New Zealand, Norway, Singapore, and Spain, and 10ten percent under the income tax treaties with, among other countries, Australia, Austria, Belgium (from 2020), France, Hong Kong, the Netherlands, Portugal, Sweden, Switzerland, the U.K. and the United States).

Under the Treaty, the maximum rate of Japanese withholding tax which may be imposed on dividends paid by a Japanese corporation to an Eligible U.S. Holder that is a portfolio investor is generally reduced to 10ten percent of the gross amount actually distributed, and dividends paid by a Japanese corporation to an Eligible U.S. Holder that is a pension fund (as defined in the Treaty) are exempt from Japanese income tax by way of withholding or otherwise, provided that such dividends are not derived from the carrying on of a business, directly or indirectly, by such pension fund.

If the maximum tax rate provided for in the income tax treaty applicable to dividends paid by Toyota to any particularnon-resident Holder is lower than the withholding tax rate otherwise applicable under Japanese tax law or if any particularnon-resident Holder is exempt from Japanese income tax with respect to such dividends under the income tax treaty applicable to such particularnon-resident Holder, suchnon-resident Holder who is entitled to a reduced rate of or exemption from Japanese withholding tax on the payment of dividends on shares of common stock by Toyota is required to submit an Application Form for Income Tax Convention Regarding Relief from Japanese Income Tax and Special Income Tax for Reconstruction on Dividends (together with any other required forms and documents) in advance through the withholding agent to the relevant tax authority before the payment of dividends. A standing proxy fornon-resident Holders of a Japanese corporation may

provide this application service. In addition, a simplified special filing procedure is available fornon-resident Holders to claim treaty benefits of exemption from or reduction of Japanese withholding tax by submitting a Special Application Form for Income Tax Convention Regarding Relief from Japanese Income Tax and Special Income Tax for Reconstruction on Dividends of Listed Stock (together with any other required forms and documents). With respect to ADSs, this reduced rate or exemption is applicable if the Depositary or its agent submits, together with other documents, two Special Application Forms (one before payment of dividends, the other within eight months after the recording date concerning such payment of dividends) to the Japanese tax authority. To claim this reduced rate or exemption, any relevantnon-resident Holder of ADSs will be required to file proof of taxpayer status, residence and beneficial ownership (as applicable) and to provide other information or documents as may be required by the Depositary. Anon-resident Holder who is entitled, under an applicable income tax treaty, to a reduced treaty rate lower than the withholding tax rate otherwise applicable under Japanese tax law or an exemption from the withholding tax, but fails to submit the required application in advance, will be entitled to claim the refund of Japanese taxes withheld in excess of the rate under an applicable tax treaty (if suchnon-resident Holder is entitled to a reduced treaty rate under the applicable income tax treaty) or the entire amount of Japanese tax withheld (if suchnon-resident Holder is entitled to an exemption under the applicable income tax treaty) by complying with a certain subsequent filing procedure. Toyota does not assume any responsibility to ensure withholding at the reduced rate, or exemption therefrom, fornon-resident Holders who would be so eligible under an applicable tax treaty, but where the required procedures as stated above are not followed.

Gains derived from the sale of shares of common stock or ADSs outside Japan by anon-resident Holder holding such shares of common stock or ADSs as portfolio investors are, in general, not subject to Japanese income tax or corporation tax under Japanese law. In addition, Eligible U.S. Holders are ~~not subject to~~exempt from Japanese income or corporation tax with respect to such gains under the Treaty so long as filings required under Japanese law are made.

Japanese inheritance and gift taxes at progressive rates may be payable by an individual who has acquired from another individual shares of common stock or ADSs as a legatee, heir or donee even though neither the individual, nor the deceased, nor donor is a Japanese resident.

Holders of shares of common stock or ADSs should consult their tax advisors regarding the effect of these taxes and, in the case of U.S. Holders, the possible application of the Estate and Gift Tax Treaty between the United States and Japan.

U.S. Federal Income Taxation

U.S. Holders

The following discussion is a summary of the principal U.S. federal income tax consequences to U.S. Holders that hold shares of common stock or ADSs as capital assets (generally, for investment purposes).

Taxation of Dividends

Subject to the passive foreign investment company (“PFIC”) rules discussed below, the gross amount of any distribution made by Toyota in respect of shares of common stock or ADSs (without reduction for Japanese withholding taxes) will constitute a taxable dividend to the extent paid out of current or accumulated earnings and profits, as determined under U.S. federal income tax principles. The U.S. dollar amount of such a dividend generally will be included in the gross income of a U.S. Holder, as ordinary income, when actually or constructively received by the U.S. Holder, in the case of shares of common stock, or by the Depositary, in the case of ADSs. Dividends paid by Toyota will not be eligible for the dividends-received deduction generally allowed to U.S. corporations in respect of dividends received from other U.S. corporations.

Dividends received on shares and ADSs of certain foreign corporations bynon-corporate U.S. investors may be subject to U.S. federal income tax at lower rates than other types of ordinary income if certain conditions are

met. Dividends received bynon-corporate U.S. Holders with respect to shares of common stock or ADSs of Toyota are expected to be eligible for these reduced rates of tax. U.S. Holders should consult their own tax advisors regarding the eligibility of such dividends for a reduced rate of tax.

The U.S. dollar amount of a dividend paid in Japanese yen will be determined based on the Japanese yen/U.S. dollar exchange rate in effect on the date that the dividend is included in the gross income of the U.S. Holder, regardless of whether the payment is converted into U.S. dollars on that date. Generally, any gain or loss resulting from currency exchange fluctuations during the period from the date the dividend payment is included in the gross income of a U.S. Holder through the date that payment is converted into U.S. dollars (or otherwise disposed of) will be treated as U.S.-source ordinary income or loss. U.S. Holders should consult their own tax advisors regarding the calculation and U.S. federal income tax treatment of foreign currency gain or loss.

To the extent, if any, that the amount of any distribution received by a U.S. Holder in respect of shares of common stock or ADSs exceeds Toyota’s current and accumulated earnings and profits, as determined under U.S. federal income tax principles, the distribution first will be treated as atax-free return of capital to the extent of the U.S. Holder’s adjusted tax basis in those shares or ADSs, and thereafter will be treated as U.S.-source capital gain.

Distributions of additional shares of common stock that are made to U.S. Holders with respect to their shares of common stock or ADSs, and that are part of a pro rata distribution to all of Toyota’s shareholders, generally will not be subject to U.S. federal income tax.

For U.S. foreign tax credit purposes, dividends included in gross income by a U.S. Holder in respect of shares of common stock or ADSs will constitute income from sources outside the United States, and will generally be “passive category income” or, in the case of certain U.S. Holders, “general category income.” Subject to generally applicable limitations under U.S. federal income tax law and the Treaty, any Japanese withholding tax imposed in respect of a Toyota dividend may be claimed as a credit against the U.S. federal income tax liability of a U.S. Holder, or alternatively as a deduction in the computation of such U.S. Holder’s

taxable income if the U.S. Holder does not elect to claim a credit for any foreign taxes paid or accrued for the taxable year. Special rules generally will apply to the calculation of foreign tax credits in respect of dividend income that qualifies for preferential U.S. federal income tax rates. Additionally, special rules apply to individuals whose foreign source income during the taxable year consists entirely of “qualified passive income” and whose creditable foreign taxes paid or accrued during the taxable year do not exceed $300 ($600 in the case of a joint return). Further, under some circumstances, a U.S. Holder that:

(i)

has held shares of common stock or ADSs for less than a specified minimum period; or

(ii)

is obligated to make payments related to Toyota dividends,

will not be allowed a foreign tax credit for Japanese taxes imposed on Toyota dividends.

U.S. Holders are urged to consult their tax advisors regarding the availability of the foreign tax credit under their particular circumstances.

Taxation of Capital Gains and Losses

In general, upon a sale or other taxable disposition of shares of common stock or ADSs, a U.S. Holder will recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference between the amount realized on the sale or other taxable disposition and the U.S. Holder’s adjusted tax basis in those shares of common stock or ADSs. A U.S. Holder generally will have an adjusted tax basis in a share of common stock or an ADS equal to its U.S. dollar cost. Subject to the PFIC rules discussed below, gain or loss recognized on the sale or other taxable disposition of shares of common stock or ADSs generally will be capital gain or loss and, if the U.S. Holder’s holding period for those shares or ADSs exceeds one year, will be long-term capital gain or

loss.Non-corporate U.S. Holders, including individuals, currently are eligible for preferential rates of U.S. federal income tax in respect of long-term capital gains. Under U.S. federal income tax law, the deduction of capital losses is subject to limitations. Any gain or loss recognized by a U.S. Holder in respect of the sale or other disposition of shares of common stock or ADSs generally will be treated as U.S.-source income or loss for U.S. foreign tax credit purposes.

Deposits and withdrawals of common stock in exchange for ADSs will not result in the realization of gain or loss for U.S. federal income tax purposes.

Passive Foreign Investment Companies

Anon-U.S. corporation generally will be classified as a PFIC for U.S. federal income tax purposes in any taxable year in which, after applying look-through rules, either (1) at least 75% of its gross income is passive income or (2) on average at least 50% of the gross value of its assets is attributable to assets that produce passive income or are held for the production of passive income. Passive income for this purpose generally includes dividends, interest, royalties, rents and gains from commodities and securities transactions. The PFIC determination is made annually and generally is based on the value of anon-U.S. corporation’s assets (including goodwill) and composition of its income.

Toyota does not believe that it was a PFIC for U.S. federal income tax purposes for its taxable year ended March 31, 2018, and currently intends to continue its operations in such a manner that it will not become a PFIC in the future. Because the PFIC determination is made annually and the application of the PFIC rules to a corporation such as Toyota (which among other things is engaged in leasing and financing through several subsidiaries) is not entirely clear, no assurances can be made regarding determination of its PFIC status in the current or any future taxable year. If Toyota is determined to be a PFIC, U.S. Holders could be subject to additional U.S. federal income taxes on gain recognized with respect to the shares of common stock or ADSs and on certain distributions. In addition, an interest charge may apply to the portion of the U.S. federal income tax liability on such gains or distributions treated under the PFIC rules as having been deferred by the U.S. Holder.

Moreover, dividends that anon-corporate U.S. Holder receives from Toyota will not be eligible for the reduced U.S. federal income tax rates on dividends described above if Toyota is a PFIC either in the taxable year of the dividend or the preceding taxable year. If a U.S. Holder owns shares of common stock or ADSs in any taxable year in which Toyota is a PFIC, such U.S. Holder generally would be required to file Internal Revenue Service (“IRS”) Form 8621 (or other form specified by the U.S. Department of the Treasury) on an annual basis, subject to certain exceptions based on the value of PFIC stock held. Toyota will inform U.S. Holders if it believes that it will be classified as a PFIC in any taxable year.

Prospective investors should consult their own tax advisors regarding the potential application of the PFIC rules to shares of common stock or ADSs.

Non-U.S. Holders

The following discussion is a summary of the principal U.S. federal income tax consequences to beneficial owners of shares of common stock or ADSs that are neither U.S. Holders, nor partnerships, nor entities taxable as partnerships for U.S. federal income tax purposes(“Non-U.S. Holders”).

ANon-U.S. Holder generally will not be subject to any U.S. federal income or withholding tax on distributions received in respect of shares of common stock or ADSs unless the distributions are effectively connected with the conduct by theNon-U.S. Holder of a trade or business within the United States (and, if an applicable tax treaty requires, are attributable to a U.S. permanent establishment or fixed base of suchNon-U.S. Holder).

ANon-U.S. Holder generally will not be subject to U.S. federal income tax in respect of gain recognized on a sale or other disposition of shares of common stock or ADSs, unless:

(i)

the gain is effectively connected with a trade or business conducted by theNon-U.S. Holder within the United States (and, if an applicable tax treaty requires, is attributable to a U.S. permanent establishment or fixed base of suchNon-U.S. Holder); or

(ii)

theNon-U.S. Holder is an individual who was present in the United States for 183 or more days in the taxable year of the disposition and other conditions are met.

Income that is effectively connected with a U.S. trade or business of aNon-U.S. Holder, and, if an income tax treaty applies and so requires, is attributable to a U.S. permanent establishment or fixed base of theNon-U.S. Holder, generally will be taxed in the same manner as the income of a U.S. Holder. In addition, under certain circumstances, any effectively connected earnings and profits realized by a corporateNon-U.S. Holder may be subject to an additional “branch profits tax” at the rate of 30% or at a lower rate that may be prescribed by an applicable income tax treaty.

Backup Withholding and Information Reporting

In general, information reporting requirements will apply to dividends paid to a U.S. Holder in respect of shares of common stock or ADSs, and to the proceeds received upon the sale, exchange or redemption of the shares of common stock or ADSs within the United States by U.S. Holders. Furthermore, backup withholding may apply to those amounts (currently at a 24% rate) if a U.S. Holder fails to provide an accurate taxpayer identification number to certify that such U.S. Holder is not subject to backup withholding or to otherwise comply with the applicable requirements of the backup withholding requirements.

Dividends paid to aNon-U.S. Holder in respect of shares of common stock or ADSs, and proceeds received upon the sale, exchange or redemption of shares of common stock or ADSs by aNon-U.S. Holder, generally are exempt from information reporting and backup withholding under current U.S. federal income tax law. However, aNon-U.S. Holder may be required to provide certification ofnon-U.S. status in order to obtain that exemption.

Persons required to establish their exempt status generally must provide such certification under penalty of perjury on IRS FormW-9, entitled Request for Taxpayer Identification Number and Certification, in the case of U.S. persons, and on IRS FormW-8BEN, entitled Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals), or IRS FormW-8BEN-E, entitled Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities) (or other appropriate IRS FormW-8), in the case ofnon-U.S. persons. Backup withholding is not an additional tax. The amount of backup withholding imposed on a payment generally may be claimed as a credit against the holder’s U.S. federal income tax liability, provided that the required information is properly furnished to the IRS in a timely manner.

In addition, certain U.S. Holders who are individuals that hold certain foreign financial assets (which may include shares of common stock or ADSs) are required to report information relating to such assets, subject to certain exceptions. U.S. Holders should consult their tax advisors regarding the effect, if any, of this legislation on their ownership and disposition of shares of common stock or ADSs.

THE SUMMARY OF U.S. FEDERAL INCOME AND JAPANESE NATIONAL TAX CONSEQUENCES SET OUT ABOVE IS INTENDED FOR GENERAL INFORMATION PURPOSES ONLY. PROSPECTIVE PURCHASERS OF COMMON STOCK OR ADSs ARE URGED TO CONSULT WITH THEIR OWN TAX ADVISORS WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF OWNING OR DISPOSING OF COMMON STOCK OR ADSs, BASED ON THEIR PARTICULAR CIRCUMSTANCES.

10.F DIVIDENDS AND PAYING AGENTS

Not applicable.

10.G STATEMENT BY EXPERTS

Not applicable.

10.H DOCUMENTS ON DISPLAY

Toyota files annual reports on Form20-F and reports on Form6-K with the SEC. You may ~~read and copy~~access this information atthrough the SEC’s ~~Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549 or by accessing the SEC’s home page~~website (http://www.sec.gov). ~~You can also request copies of the documents, upon payment of a duplicating fee, by writing to the Public Reference Section of the SEC. Please call the SEC at1-800-SEC-0330~~ ~~for further information on the operation of the Public Reference Room.~~ In addition, Toyota’s reports, proxy statements and other information may be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005. Copies of the documents referred to herein may also be inspected at Toyota’s offices by contacting Toyota at 1Toyota-cho, Toyota City, Aichi Prefecture471-8571, Japan, attention: Financial Reporting Department, Accounting Division, telephone number:+81-565-28-2121.

10.I SUBSIDIARY INFORMATION

Not applicable.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Quantitative and Qualitative Disclosures about Market Risk

Toyota is exposed to market risk from changes in foreign currency exchange rates, interest rates, certain commodity and equity security prices. In order to manage the risk arising from changes in foreign currency exchange rates and interest rates, Toyota enters into a variety of derivative financial instruments.

A description of Toyota’s accounting policies for derivative instruments is included in note 2 to the consolidated financial statements and further disclosure is provided in notes 21 and 2728 to the consolidated financial statements.

Toyota monitors and manages these financial exposures as an integral part of its overall risk management program, which recognizes the unpredictability of financial markets, and seeks to reduce the potentially adverse effects on Toyota’s operating results.

The financial instruments included in the market risk analysis consist of all of Toyota’s cash and cash equivalents, ~~marketable~~equity securities with readily determinable fair values, debt securities designated asavailable-for-sale, finance receivables, securities investments, long-term and short-term debt and all derivative financial instruments. Toyota’s portfolio of derivative financial instruments consists of forward foreign currency exchange contracts, foreign currency options, interest rate swaps, interest rate currency swap agreements and interest rate options. Anticipated transactions denominated in foreign currencies that are covered by Toyota’s derivative hedging are not included in the market risk analysis. Although operating leases are not required to be included, Toyota has included these instruments in determining interest rate risk.

Foreign Currency Exchange Rate Risk

Toyota has foreign currency exposures related to buying, selling and financing in currencies other than the local currencies in which it operates. Toyota is exposed to foreign currency risk related to future earnings or assets and liabilities that are exposed due to operating cash flows and various financial instruments that are denominated in foreign currencies. Toyota’s most significant foreign currency exposures relate to the U.S. dollar and the euro.

Toyota uses avalue-at-risk analysis (“VAR”) to evaluate its exposure to changes in foreign currency exchange rates. The VAR of the combined foreign exchange position represents a potential loss inpre-tax earnings that was estimated to be ~~¥183.6~~¥206.9 billion and ~~¥206.9~~¥224.0 billion as of March 31, ~~2017~~2018 and ~~2018,~~2019, respectively.

Based on Toyota’s overall currency exposure (including derivative positions), the risk during fiscal ~~2018~~2019 topre-tax cash flow from currency movements was on average ~~¥210.8~~¥219.3 billion, with a high of ~~¥214.6~~¥225.3 billion and a low of ~~¥206.9~~¥211.2 billion.

The VAR was estimated by using a Monte Carlo Simulation Method and assumed 95% confidence level on the realization date and a10-day holding period.

Interest Rate Risk

Toyota is subject to market risk from exposures to changes in interest rates based on its financing, investing and cash management activities. Toyota enters into various financial instrument transactions to maintain the desired level of exposure to the risk of interest rate fluctuations and to minimize interest expense. The potential decrease in fair value resulting from a hypothetical 100 basis point upward shift in interest rates would be approximately ~~¥240.9 billion as of March 31, 2017 and~~ ¥251.2 billion as of March 31, ~~2018.~~2018 and ¥249.1 billion as of March 31, 2019.

There are certain shortcomings inherent to the sensitivity analyses presented. The model assumes that interest rate changes are instantaneous parallel shifts in the yield curve. However, in reality, changes are rarely instantaneous. Although certain assets and liabilities may have similar maturities or periods to repricing, they may not react correspondingly to changes in market interest rates. Also, the interest rates on certain types of assets and liabilities may fluctuate with changes in market interest rates, while interest rates on other types of assets may lag behind changes in market rates. Finance receivables are less susceptible to prepayments when interest rates change and, as a result, Toyota’s model does not address prepayment risk for automotive related finance receivables. However, in the event of a change in interest rates, actual loan prepayments may deviate significantly from the assumptions used in the model.

Commodity Price Risk

Commodity price risk is the possibility of higher or lower costs due to changes in the prices of commodities, such asnon-ferrous alloys (e.g., aluminum), precious metals (e.g., palladium, platinum and rhodium) and ferrous alloys, which Toyota uses in the production of motor vehicles. Toyota does not use derivative instruments to hedge the price risk associated with the purchase of those commodities and controls its commodity price risk by holding minimum stock levels.

Equity Price Risk

Toyota holds investments in various~~available-for-sale~~ equity securities with readily determinable fair values that are subject to price risk. The fair value of~~available-for-sale~~ equity securities with readily determinable fair values was ~~¥2,686.9 billion as of March 31, 2017 and~~ ¥2,582.1 billion as of March 31, ~~2018.~~2018 and ¥2,154.9 billion as of March 31, 2019. The potential change in the fair value of these investments, assuming a 10% change in prices, would be approximately ~~¥268.6 billion as of March 31, 2017 and~~ ¥258.2 billion as of March 31, ~~2018.~~2018 and ¥215.4 billion as of March 31, 2019.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

12.A DEBT SECURITIES

Not applicable.

12.B WARRANTS AND RIGHTS

Not applicable.

12.C OTHER SECURITIES

Not applicable.

12.D AMERICAN DEPOSITARY SHARES

Fees and Charges for Holders of American Depositary Receipts

The Bank of New York Mellon, as Depositary for the ADSs, collects its fees for delivery and surrender of ADSs directly from investors depositing shares or surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The Depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The Depositary may generally refuse to providefee-attracting services until its fees for those services are paid.


Persons depositing or withdrawing shares must pay:		For:

$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)		• Issuance of ADSs, including issuances resulting from a distribution, sale or exercise of shares or rights or other property • Cancellation of ADSs for the purpose of withdrawal including if the deposit agreement terminates

$0.02 (or less) per ADS		• Any cash distribution to ADS registered holders

A fee equivalent to the fee that would be payable if securities distributed to the ADR holder had been shares and the shares had been deposited for issuance of ADSs		• Distribution of securities distributed to holders of deposited securities which are distributed by the Depositary to ADS registered holders


~~Persons depositing or withdrawing shares must pay:~~		~~For:~~

Registration fees		• Registration of transfer of shares on Toyota’s share register to the name of the Depositary or its nominee or the custodian or its nominee when shares are deposited or withdrawn

Expenses of the Depositary		• Cable, telex and facsimile transmissions (when expressly provided in the deposit agreement) • Converting foreign currency to U.S. dollars

Taxes and other governmental charges the Depositary or the custodian have to pay on any ADS or share underlying an ADS		• As necessary

Fees Incurred in Fiscal 2018

For fiscal ~~2018,~~2019, Toyota received ~~$822,582.54~~$751,594.86 from the Depositary for standardout-of-pocket maintenance costs for the ADRs (consisting of the expenses of postage and envelopes for mailing annual reports, printing and distributing dividend checks, stationery, postage, facsimile, and telephone calls), expenses relating to Toyota’s annual general shareholders’ meeting that are incurred with respect to Toyota’s ADR holders and 50% of the net dividend fees collected by the Depositary. The Depositary also paid Toyota’s continuing annual stock exchange listing fees.

Fees to be Paid in the Future

With regards to the ADS program, the Depositary has agreed to pay the standardout-of-pocket maintenance costs for the ADRs, which includes the expenses of postage and envelopes for mailing annual reports, printing and distributing dividend checks, stationery, postage, facsimile and telephone calls. It has also agreed to pay for investor relations expenses and any other program related expenses. The limit on the amount of expenses for which the Depositary will pay is the sum of $300,000 annually. In addition, the Depositary has agreed to pay Toyota 50% of the net dividend fees collected by the Depositary during each annual period towards the aforementioned expenses.

PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

None.

ITEM 15. CONTROLS AND PROCEDURES

(a) DISCLOSURE CONTROLS AND PROCEDURES

Toyota performed an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures as of the end of fiscal ~~2018.~~2019. Disclosure controls and procedures are designed to ensure that information required to be disclosed in the Form20-F that Toyota files under the Exchange Act is accumulated and communicated to its management, including the chief executive officer and the principal accounting and financial officer, to allow timely decisions regarding required disclosure. The disclosure controls and procedures also ensure that the Form20-F that it files under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms. The evaluation was performed under the supervision of Toyota’s President and the Executive Vice President, both Representative Directors. Toyota’s disclosure controls and procedures are designed to provide reasonable assurance of achieving its objectives. Managerial judgment was necessary to evaluate the cost-benefit relationship of possible controls and procedures. The President and the Executive Vice President, both Representative Directors, have concluded that Toyota’s disclosure controls and procedures are effective at the reasonable assurance level.

(b) MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Toyota’s management is responsible for establishing and maintaining effective internal control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Toyota’s internal control over financial reporting includes those policies and procedures that:

(i)

pertain to the maintenance of records that in reasonable detail, accurately and fairly reflect the transactions and dispositions of Toyota’s assets;

(ii)

provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that Toyota’s receipts and expenditures are being made only in accordance with authorizations of Toyota’s management and members of the board of directors; and

(iii)

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of Toyota’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Toyota’s management conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in “Internal Control — Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this evaluation, management concluded that Toyota’s internal control over financial reporting was effective as of March 31, ~~2018.~~2019.

PricewaterhouseCoopers Aarata LLC, an independent registered public accounting firm that audited the consolidated financial statements included in this report, has also audited the effectiveness of Toyota’s internal control over financial reporting as of March 31, ~~2018,~~2019, as stated in its report included herein.

Toyota’s independent registered public accounting firm, PricewaterhouseCoopers Aarata LLC, has issued an audit report on the effectiveness of Toyota’s internal control over financial reporting. This report appears in Item 18.

(d) CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There have been no changes in Toyota’s internal control over financial reporting during fiscal ~~2018~~2019 that have materially affected, or are reasonably likely to materially affect, Toyota’s internal control over financial reporting.

ITEM 16. [RESERVED]

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

Toyota maintains an audit & supervisory board system, in accordance with the Companies Act. Toyota’s audit & supervisory board is comprised of six audit & supervisory board members, three of whom are outside audit & supervisory board members. Each audit & supervisory board member has been appointed at Toyota’s meetings of shareholders and has certain statutory powers independently, including auditing the business affairs and accounts of Toyota.

Toyota’s audit & supervisory board has determined that it does not have an “audit committee financial expert” serving on the audit & supervisory board. The qualifications for, and powers of, the audit & supervisory board member delineated in the Companies Act are different from those anticipated for any audit committee financial expert. Audit & supervisory board members have the authority to be given reports from a certified public accountant or an accounting firm concerning audits, including technical accounting matters. At the same time, each audit & supervisory board member has the authority to consult internal and external experts on accounting matters. Each audit & supervisory board member must fulfill the requirements under Japanese laws and regulations and otherwise follow Japanese corporate governance practices and, accordingly, Toyota’s audit & supervisory board has confirmed that it is not necessarily in Toyota’s best interest to nominate as audit & supervisory board member a person who meets the definition of audit committee financial expert. Although Toyota does not have an audit committee financial expert on its audit & supervisory board, Toyota believes that Toyota’s current corporate governance system, taken as a whole, including the audit & supervisory board members’ ability to consult internal and external experts, is fully equivalent to a system having an audit committee financial expert on its audit & supervisory board.

ITEM 16B. CODE OF ETHICS

Toyota has adopted a code of ethics that applies to its members of the board of directors and ~~managing~~operating officers, including its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A copy of Toyota’s code of ethics is included as an exhibit to this annual report on Form20-F.

~~ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES~~

ITEM 16C.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

PricewaterhouseCoopers Aarata LLC has audited the financial statements of Toyota included in this annual report on Form20-F.

The following table presents the aggregate fees for professional services and other services rendered by PricewaterhouseCoopers Aarata LLC and the various network and member firms of PricewaterhouseCoopers to Toyota in fiscal ~~2017~~2018 and fiscal ~~2018.~~2019.


	Yen in millions				Yen in millions
	2017		2018		2018		2019
Audit Fees⁽¹⁾		4,279		4,645		4,645		4,517
Audit-related Fees⁽²⁾		90		85		85		84
Tax Fees⁽³⁾		477		449		449		462
All Other Fees⁽⁴⁾		293		316		316		233

Total		5,139		5,495		5,495		5,296

(1)

Audit Fees consist of fees billed for the annual audit services engagement and other audit services, which are those services that only the external auditor reasonably can provide, and include the services of annual audit, quarterly reviews and assessment and reviews of the effectiveness of internal controls over financial reporting of Toyota and its subsidiaries and affiliated companies; the services associated with SEC registration statements or other documents issued in connection with securities offerings such as comfort letters and consents; and consultations as to the accounting or disclosure treatment of transactions or events.

(2)

Audit-related Fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of its financial statements or that are traditionally performed by the external auditor, and mainly include services such as due diligence; agreed-upon or expanded audit procedures; internal control reviews and assistance; review of the information system; and financial statement audits of employee benefit plans.

(3)

Tax Fees include fees billed for tax compliance services, including services such as tax planning, advice and compliance of federal, state, local and international tax; the review of tax returns; assistance with tax audits and appeals;tax-only valuation services including transfer pricing and cost segregation studies; expatriate tax assistance and compliance.

(4)	All Other Fees primarily include fees billed for risk management advisory services of assessment and testing of security infrastructure controls; services providing information related to automotive market conditions; IT advisory services; and other advisory services.

Policies and Procedures of the Audit & Supervisory Board

Below is a summary of the current policies and procedures of the audit & supervisory board for thepre-approval of audit and permissiblenon-audit services performed by Toyota’s independent public accountants.

Under the policy, ~~the Representative Directors~~specified operating officers or managers submit a request for generalpre-approval of audit and permissiblenon-audit services for the following fiscal year, which shall include details of the specific services and estimated fees for the services, to the audit & supervisory board, which reviews and determines whether or not to grant the request by the end of March of the fiscal year. Upon the generalpre-approval of the audit & supervisory board, the ~~Representative Directors~~specified operating officers or managers are not required to obtain any specificpre-approval for audit and permissiblenon-audit services so long as those services fall within the scope of the generalpre-approval provided.

The audit & supervisory board makes a further determination of whether or not to grant a request to revise the generalpre-approval for the applicable fiscal year if such request is submitted by ~~the Representative Directors.~~specified operating officers or managers. Such request may include (i) adding any audit or permissiblenon-audit services other than the ones listed in the generalpre-approval and (ii) obtaining services that are listed in the generalpre-approval but of which the total fee amount exceeds the amount affirmed by the generalpre-approval. The determination of whether or not to grant a request to revise the generalpre-approval noted in the foregoing may alternatively be

made by an audit & supervisory board member (full time), who is designated in advance by a resolution of the audit & supervisory board, in which case such audit & supervisory board member (full time) shall report such decision at the next meeting of the audit & supervisory board. The performance of audit and permissiblenon-audit services and the payment of fees are subject to review by the audit & supervisory board at least once every fiscal half year.

None of the audit related fees, tax fees or all other fees described in the table above were approved by the audit & supervisory board pursuant to the de minimis exception provided by paragraph (c)(7)(i)(C) of Rule2-01 of RegulationS-X.

ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Toyota does not have an audit committee. Toyota is relying on the general exemption contained inRule 10A-3(c)(3) under the Exchange Act, which provides an exemption from the NYSE’s listing standards relating to audit committees for foreign companies like Toyota that have an audit & supervisory board. Toyota’s reliance onRule 10A-3(c)(3) does not, in its opinion, materially adversely affect the ability of its audit & supervisory board to act independently and to satisfy the other requirements ofRule 10A-3.

ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

The following table sets forth purchases of Toyota’s common stock by Toyota and its affiliated purchasers during fiscal ~~2018:~~2019:

Period
(a)
Total
Number of
Shares
Purchased⁽¹⁾ (b)
Average
Price Paid per
Share (Yen)⁽¹⁾ (c)
Total
Number of
Shares
Purchased as
Part of
Publicly
Announced
Plans or
Programs⁽²⁾ (d)
Maximum
Number of
Shares
that May
Yet Be
Purchased
Under the
Plans or
Programs⁽²⁾
April 1, 2017 – April 30, 2017
922 5,896.74 —   —
May 1, 2017 – May 31, 2017
1,120 6,061.75 —   —
June 1, 2017 – June 30, 2017
1,484 5,853.15 —   —
July 1, 2017 – July 31, 2017
21,625,247 6,155.24 21,623,700 —
August 1, 2017 – August 31, 2017
18,714,178 6,246.63 18,711,800 —
September 1, 2017 – September 30, 2017
2,296 6,517.56 —   —
October 1, 2017 – October 31, 2017
3,973 6,921.19 —   —
November 1, 2017 – November 30, 2017
3,635 7,089.97 —   —
December 1, 2017 – December 31, 2017
4,843,895 7,230.12 4,840,500 —
January 1, 2018– January 31, 2018
14,537,271 7,637.48 14,533,700 —
February 1, 2018 – February 28, 2018
14,000,289 7,428.23 13,998,700 —
March 1, 2018 – March 31, 2018
1,654 6,933.76 —   —

Total
73,735,964 73,708,400 —


Period	(a) Total Number of Shares Purchased⁽¹⁾		(b) Average Price Paid per Share (Yen)⁽¹⁾		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs⁽²⁾		(d) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs⁽²⁾
April 1, 2018 – April 30, 2018		1,072		6,824.38		—		—
May 1, 2018 – May 31, 2018		1,999		7,372.49		—		—
June 1, 2018 – June 30, 2018		17,439,198		7,408.48		17,437,400		—
July 1, 2018 – July 31, 2018		15,434,017		7,309.27		15,432,200		—
August 1, 2018 – August 31, 2018		5,015,842		7,416.63		5,013,500		—
September 1, 2018 – September 30, 2018		965		6,887.22		—		—
October 1, 2018 – October 31, 2018		1,360		6,781.67		—		—
November 1, 2018 – November 30, 2018		5,964,002		6,741.02		5,963,200		—
December 1, 2018 – December 31, 2018		16,234,509		6,875.01		16,232,600		—
January 1, 2019 – January 31, 2019		14,618,806		6,716.59		14,618,100		—
February 1, 2019 – February 28, 2019		1,272		6,684.28		—		—
March 1, 2019 – March 31, 2019		1,183		6,673.93		—		—

Total		74,714,225		—		74,697,000		—

(1)

A portion of the above purchases were made as a result of holders of shares constituting less than one unit, which is 100 shares of common stock, requesting Toyota to purchase shares that are a fraction of a unit, in accordance with Toyota’s share handling regulations. Toyota is required to comply with such requests pursuant to the Companies Act. See “Additional Information — Memorandum and Articles of Association — Japanese Unit Share System.” The number of shares purchased not pursuant to publicly announced plans or programs conducted in fiscal ~~2018~~2019 is ~~27,564.~~17,225.

(2)

Toyota announced on May ~~10, 2017,~~9, 2018, that it would repurchase up to 5055 million common shares between May ~~17, 2017~~16, 2018 and ~~August 31, 2017~~September 28, 2018 at a total price up to ~~¥250~~¥300 billion, in order to return to shareholders the profits derived in the fiscal year ended March 31, ~~2017.~~2018. Toyota also announced on November ~~7, 2017~~6, 2018 that it would repurchase up to 4542 million common shares between November ~~14, 2017~~13, 2018 and March ~~30, 2018~~29, 2019 at a total price up to ¥250 billion in order to return to shareholders the profits derived in the interim period ended September 30, ~~2017.~~2018.

ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

Not applicable.

ITEM 16G. CORPORATE GOVERNANCE

Significant Differences in Corporate Governance Practices between Toyota and U.S. Companies Listed on the NYSE

Pursuant to home country practices exemptions granted by the NYSE, Toyota is permitted to follow certain corporate governance practices complying with Japanese laws, regulations and stock exchange rules in lieu of the NYSE’s listing standards. The SEC approved changes to the NYSE’s listing standards related to corporate governance practices of listed companies (the “NYSE Corporate Governance Rules”) in November 2003, as further amended in November 2004. Toyota is exempt from the approved changes, except for requirements that (a) Toyota’s audit & supervisory board satisfies the requirements ofRule 10A-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (b) Toyota must disclose significant differences in its corporate governance practices as compared to those followed by domestic companies under the NYSE listing standards, (c) Toyota’s principal executive officer must notify the NYSE in writing after any executive officer of Toyota becomes aware of anynon-compliance with (a) and (b), and (d) Toyota must submit annual and interim written affirmations to the NYSE. Toyota’s corporate governance practices and those followed by domestic companies under the NYSE Corporate Governance Rules have the following significant differences:

1. Members of the Board of Directors.Toyota currently does not have any members of the board of directors who will be deemed an “independent director” as required under the NYSE Corporate Governance Rules for U.S. listed companies. Unlike the NYSE Corporate Governance Rules, the Companies Act does not require Japanese companies with an audit & supervisory board such as Toyota to have any independent directors on its board of directors. While the NYSE Corporate Governance Rules require that thenon-management directors of each listed company meet at regularly scheduled executive sessions without management, Toyota currently has nonon-management member on its board of directors. Unlike the NYSE Corporate Governance Rules, the Companies Act does not require, and accordingly Toyota does not have, an internal corporate organ or committee comprised solely of independent directors.

Toyota currently has three outside members of the board of directors under the Companies Act. An “outside” member of the board of directors refers to:

(a) a person who is not, and has never been during the 10ten year period before becoming an outside member of the board of directors, an executive director (a member of the board of directors who engages in the execution of business), executive officer, manager or employee (collectively, “Executive Director, etc.”) of Toyota or its subsidiaries;

(b) if a person was a member of the board of directors, accounting counselor (in the case that an accounting counselor is a legal entity, an employee of such entity who is in charge of its affairs) or audit & supervisory board member (excluding those who have ever been Executive Directors, etc.) of Toyota or any of its subsidiaries at any time during the 10ten year period before becoming an outside member of the board of directors, such person who has not been an Executive Director, etc. of Toyota or any of its subsidiaries during the 10ten year period before becoming a member of the board of directors, accounting counselor or audit & supervisory board member; and

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

Such qualifications for an “outside” member of the board of directors are different from the director independence requirements under the NYSE Corporate Governance Rules.

In addition, pursuant to the regulations of the Japanese stock exchanges, Toyota is required to have one or more “independent director(s)/audit & supervisory board member(s),” defined under the relevant regulations of the Japanese stock exchanges as “outside directors” or “outside audit & supervisory board members” (as defined under the Companies Act), who are unlikely to have any conflicts of interests with Toyota’s general shareholders, and is also required to make efforts to have at least one “independent director(s)/audit & supervisory board member(s)” who is also a director. Each of the outside members of the board of directors of Toyota satisfies the “independent director/audit & supervisory board member” requirements under the regulations of the Japanese stock exchanges. Japan’s Corporate Governance Code provides that companies should appoint at least two “independent outside directors” as defined based on the criteria for assessing director independence established by Toyota in line with the independence standards of the Japanese stock exchanges. The content of the criteria for assessing director independence established by Toyota is the same as that of the independence standards of the Japanese stock exchanges, and each of the outside members of the board of directors of Toyota satisfies the “independent outside director” requirements under such independence standards. The definition of “independent director/audit & supervisory board member” and “independent outside director” is different from that of the definition of independent director under the NYSE Corporate Governance Rules.

2. Committees.Under the Companies Act, Toyota has elected to structure its corporate governance system as a company with audit & supervisory board members who are under a statutory duty to monitor, review and report on the management of the affairs of Toyota. Toyota, as with other Japanese companies with an audit & supervisory board, does not have certain committees that are required of U.S. listed companies subject to the NYSE Corporate Governance Rules, including those that are responsible for director nomination, corporate governance and executive compensation. However, members of Toyota’s ~~“Executive~~Executive Appointment ~~Meeting” and “Executive Compensation~~ Meeting,~~” half~~ a majority of whom ~~in each meeting~~ are outside directors, discuss recommendations to the board of directors concerning ~~nominees~~the appointment and ~~remuneration for~~dismissal of members of the board of directors ~~respectively.~~and audit & supervisory board members, and members of the Executive Compensation Meeting, a majority of whom are outside directors, review the remuneration system for members of board of directors and senior management as well as determine the amount of remuneration for each member of the board of directors.

Pursuant to the Companies Act, Toyota’s board of directors nominates and submits a proposal for the appointment of members of the board of directors for shareholder approval. The shareholders vote on such nomination at the general shareholders’ meeting. The Companies Act requires that the limits or calculation formula and kind (in case that the remuneration, bonus and any other benefits in compensation for the execution of duties (“remuneration, etc.”) are to be paid in other than cash) of remuneration, etc. to be paid to directors as well as limits of remuneration, etc. to be paid to audit & supervisory board members must be determined by a resolution of the general shareholders’ meeting, unless their remuneration, etc. is provided for in the articles of incorporation. The distribution of remuneration, etc. among each member of the board of directors is broadly delegated to the board of directors and the distribution of remuneration among each audit & supervisory board member is determined by consultation among the audit & supervisory board members.

3. Audit Committee.Toyota avails itself of paragraph (c)(3) ofRule 10A-3 of the Exchange Act, which provides a general exemption from the audit committee requirements to a foreign private issuer with an audit & supervisory board, subject to certain requirements which continue to be applicable underRule 10A-3.

Pursuant to the requirements of the Companies Act, Toyota elects its audit & supervisory board members through a resolution adopted at a general shareholders’ meeting. Toyota currently has six audit & supervisory board members, which exceeds the minimum number of audit & supervisory board members required pursuant to the Companies Act.

Unlike the NYSE Corporate Governance Rules, the Companies Act, among others, does not require audit & supervisory board members to establish an expertise in accounting or financial management nor are they required to present other special knowledge and experience. Therefore, none of Toyota’s audit & supervisory board members has “an expertise in accounting or financial management” as set forth in the NYSE Corporate Governance Rules. The Japanese Corporate Governance Code indicates that persons with appropriate experience and skills as well as necessary knowledge of finance, accounting, and laws should be appointed as audit & supervisory board members, and in particular, one or more audit & supervisory board members who have sufficient knowledge of finance and accounting matters should be appointed. Toyota has appointed persons who are able to provide opinions and advice regarding management based on their broader experience and discretion beyond finance and accounting. Under the Companies Act, the audit & supervisory board may determine the auditing policies and methods of investigating the conditions of Toyota’s business and assets, and may resolve other matters concerning the execution of the audit & supervisory board member’s duties. The audit & supervisory board also prepares auditors’ reports and gives consent to proposals of the nomination of audit & supervisory board ~~members and~~members. Further, the audit & supervisory board makes decisions concerning proposals relating to the appointment and dismissal of accounting ~~auditors.~~auditors; it also has the authority to dismiss the accounting auditor when certain matters specified under the Companies Act occur.

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

(a)

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

(b)

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

(c)

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

Such qualifications for an “outside” audit & supervisory board member are different from the audit committee independence requirement under the NYSE Corporate Governance Rules.

Each of the outside audit & supervisory board members of Toyota satisfies the “independent director/audit & supervisory board member” requirements under the regulations of the Japanese stock exchanges, as described above in “1. Members of the Board of Directors.”

4. Corporate Governance Guidelines.Unlike the NYSE Corporate Governance Rules, Toyota is not required to adopt Japan’s Corporate Governance Code under Japanese laws and regulations, including the Companies Act, the Financial Instruments and Exchange Law of Japan and stock exchange rules. However, if Toyota does not comply with Japan’s Corporate Governance Code, it is required to explain the reasons why it does not do so in accordance with the regulations of the Japanese stock exchanges. In addition, Toyota is required to resolve at the board of directors matters relating to a system, which is required under the ordinance of the Ministry of Justice (“internal control system” or “naibu-tosei“), to ensure the execution of duties of the members of the board of directors to comply with laws, regulations and articles of incorporation, and any other systems to ensure the adequacy of the business, and to disclose such matters resolved, policies and the present status of its corporate governance in its business reports, annual securities report and certain other disclosure

documents in accordance with the regulations under the Financial Instruments and Exchange Law and stock exchange rules in respect of timely disclosure.

5. Code of Business Conduct and Ethics.Similar to the NYSE Corporate Governance Rules, under Japan’s Corporate Governance Code, Toyota is encouraged to adopt a code of conduct regarding ethical business activities for members of the board of directors, officers and employees. Toyota has resolved matters relating to maintenance of an “internal control system,” or “naibu-tosei,“ in order to ensure its employees comply with laws, regulations and the articles of incorporation, etc. pursuant to the Companies Act, and Toyota maintains guidelines and internal regulations such as “Guiding Principles at Toyota,” “Toyota Code of Conduct” and a code of ethics pursuant to Section 406 of the Sarbanes-Oxley Act. Please see “Code of Ethics” for additional information.

ITEM 16H. MINE SAFETY DISCLOSURE

Not applicable.

PART III

ITEM 17. FINANCIAL STATEMENTS

Not applicable.

ITEM 18. FINANCIAL STATEMENTS

The following financial statements are filed as part of this annual report on Form20-F.

TOYOTA MOTOR CORPORATION

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


	Page

Report of Independent Registered Public Accounting Firm		F-2

Consolidated balance sheets at March 31, ~~2017~~2018 and ~~2018~~2019		F-3

Consolidated statements of income for the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018~~2019		F-5

Consolidated statements of comprehensive income for the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018~~2019		F-6

Consolidated statements of shareholders’ equity for the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018~~2019		F-7

Consolidated statements of cash flows for the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018~~2019		F-9

Notes to consolidated financial statements		F-10

All financial statements schedules are omitted because they are not applicable or the required information is shown in the financial statements or the notes thereto.

Financial statements of 50% or less owned persons accounted for by the equity method have been omitted because the registrant’s proportionate share of the income from continuing operations before income taxes is less than 20% of consolidated income from continuing operations before income taxes and the investment in and advances to each company is less than 20% of consolidated total assets.

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of

Toyota Jidosha Kabushiki Kaisha

(“Toyota Motor Corporation”)

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Toyota Motor Corporation and its subsidiaries (collectively referred to as the “Company”) as of March 31, ~~2017~~2018 and ~~2018,~~2019, and the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended March 31, ~~2018,~~2019, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of March 31, ~~2018,~~2019, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of March 31, ~~2017~~2018 and ~~2018,~~2019, and the results of its operations and its cash flows for each of the three years in the period ended March 31, ~~2018~~2019 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, ~~2018,~~2019, based on criteria established inInternal Control—Integrated Framework (2013) issued by the COSO.

Change in Accounting Principle

As discussed in Note 2 to the financial statements, the Company has changed its method of accounting for investments in equity securities as of April 1, 2018 due to the adoption of ASU 2016-01 “Financial Instruments—Recognition and Measurement of Financial Assets and Financial Liabilities.”

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control Over Financial Reporting appearing under Item 15(b). Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

/s/ PricewaterhouseCoopers Aarata LLC

Nagoya, Japan

June ~~25, 2018~~21, 2019

We have served as the Company’s auditor since 2006.

TOYOTA MOTOR CORPORATION

CONSOLIDATED BALANCE SHEETS


	Yen in millions						Yen in millions
	March 31,						March 31,
	2017			2018			2018			2019
Assets
Current assets
Cash and cash equivalents		2,995,075			3,052,269			3,052,269			3,574,704
Time deposits		1,082,654			901,244			901,244			1,126,352
Marketable securities		1,821,598			1,768,360			1,768,360			1,127,160
Trade accounts and notes receivable, less allowance for doubtful accounts of ¥50,110 million in 2017 and ¥25,925 million in 2018		2,115,938			2,219,562
Trade accounts and notes receivable, less allowance for doubtful accounts of ¥25,925 million in 2018 and ¥16,370 million in 2019								2,219,562			2,372,734
Finance receivables, net		6,196,649			6,348,306			6,348,306			6,647,771
Other receivables		436,867			489,338			489,338			568,156
Inventories		2,388,617			2,539,789			2,539,789			2,656,396
Prepaid expenses and other current assets		796,297			833,788			833,788			805,964

Total current assets		17,833,695			18,152,656			18,152,656			18,879,237

Noncurrent finance receivables, net		9,012,222			9,481,618			9,481,618			10,281,118

Investments and other assets
Marketable securities and other securities investments		7,679,928			7,999,323			7,999,323			7,479,926
Affiliated companies		2,845,639			3,162,917			3,162,917			3,313,723
Employees receivables		25,187			22,562			22,562			21,683
Other		1,156,406			1,221,500			1,221,500			1,275,768

Total investments and other assets		11,707,160			12,406,302			12,406,302			12,091,100

Property, plant and equipment
Land		1,379,991			1,404,611			1,404,611			1,386,308
Buildings		4,470,996			4,659,753			4,659,753			4,802,175
Machinery and equipment		11,357,340			11,535,381			11,535,381			11,857,425
Vehicles and equipment on operating leases		5,966,579			5,934,393			5,934,393			6,139,163
Construction in progress		474,188			509,851			509,851			651,713

Total property, plant and equipment, at cost		23,649,094			24,043,989			24,043,989			24,836,784
Less - Accumulated depreciation		(13,451,985	)		(13,776,316	)		(13,776,316	)		(14,151,290	)

Total property, plant and equipment, net		10,197,109			10,267,673			10,267,673			10,685,494

Total assets		48,750,186			50,308,249			50,308,249			51,936,949

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

TOYOTA MOTOR CORPORATION

CONSOLIDATED BALANCE SHEETS (CONTINUED)


	Yen in millions						Yen in millions
	March 31,						March 31,
	2017			2018			2018			2019
Liabilities
Current liabilities
Short-term borrowings		4,953,682			5,154,913			5,154,913			5,344,973
Current portion of long-term debt		4,290,449			4,186,277			4,186,277			4,254,260
Accounts payable		2,566,382			2,586,657			2,586,657			2,645,984
Other payables		936,938			1,048,216			1,048,216			1,102,802
Accrued expenses		3,137,827			3,104,260			3,104,260			3,222,446
Income taxes payable		223,574			462,327			462,327			320,998
Other current liabilities		1,210,113			1,254,241			1,254,241			1,335,475

Total current liabilities		17,318,965			17,796,891			17,796,891			18,226,938

Long-term liabilities
Long-term debt		9,911,596			10,006,374			10,006,374			10,550,945
Accrued pension and severance costs		905,070			931,182			931,182			963,406
Deferred income taxes		1,423,726			1,118,165			1,118,165			1,014,851
Other long-term liabilities		521,876			533,561			533,561			615,599

Total long-term liabilities		12,762,268			12,589,282			12,589,282			13,144,801

Total liabilities		30,081,233			30,386,173			30,386,173			31,371,739

Mezzanine equity
Model AA Class Shares, no par value,		485,877			491,974			491,974			498,073
authorized: 150,000,000 shares in 2017 and 2018; issued: 47,100,000 shares in 2017 and 2018
authorized: 150,000,000 shares in 2018 and 2019; issued: 47,100,000 shares in 2018 and 2019

Shareholders’ equity
Toyota Motor Corporation shareholders’ equity
Common stock, no par value, authorized: 10,000,000,000 shares in 2017 and 2018; issued: 3,262,997,492 shares in 2017 and 2018		397,050			397,050
Common stock, no par value, authorized: 10,000,000,000 shares in 2018 and 2019; issued: 3,262,997,492 shares in 2018 and 2019								397,050			397,050
Additionalpaid-in capital		484,013			487,502			487,502			487,162
Retained earnings		17,601,070			19,473,464			19,473,464			21,987,515
Accumulated other comprehensive income (loss)		640,922			435,699			435,699			(916,650	)
Treasury stock, at cost, 288,274,636 shares in 2017 and 353,073,500 shares in 2018		(1,608,243	)		(2,057,733	)
Treasury stock, at cost, 353,073,500 shares in 2018 and 430,558,325 shares in 2019								(2,057,733	)		(2,606,925	)

Total Toyota Motor Corporation shareholders’ equity		17,514,812			18,735,982			18,735,982			19,348,152

Noncontrolling interests		668,264			694,120			694,120			718,985

Total shareholders’ equity		18,183,076			19,430,102			19,430,102			20,067,137

Commitments and contingencies
Total liabilities, mezzanine equity and shareholders’ equity		48,750,186			50,308,249			50,308,249			51,936,949

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.

TOYOTA MOTOR CORPORATION

CONSOLIDATED STATEMENTS OF INCOME


	Yen in millions										Yen in millions
	For the years ended March 31,										For the years ended March 31,
	2016			2017			2018				2017			2018				2019
Net revenues
Sales of products		26,549,111			25,813,496			27,420,276				25,813,496			27,420,276				28,105,338
Financing operations		1,854,007			1,783,697			1,959,234				1,783,697			1,959,234				2,120,343

Total net revenues		28,403,118			27,597,193			29,379,510				27,597,193			29,379,510				30,225,681

Costs and expenses
Cost of products sold		21,456,086			21,543,035			22,600,474				21,543,035			22,600,474				23,389,495
Cost of financing operations		1,149,379			1,191,301			1,288,679				1,191,301			1,288,679				1,392,290
Selling, general and administrative		2,943,682			2,868,485			3,090,495				2,868,485			3,090,495				2,976,351

Total costs and expenses		25,549,147			25,602,821			26,979,648				25,602,821			26,979,648				27,758,136

Operating income		2,853,971			1,994,372			2,399,862				1,994,372			2,399,862				2,467,545

Other income (expense)
Interest and dividend income		157,862			158,983			179,541				158,983			179,541				225,495
Interest expense		(35,403	)		(29,353	)		(27,586	)			(29,353	)		(27,586	)			(28,078	)
Foreign exchange gain (loss), net		(5,573	)		33,601			22,664
Foreign exchange gain, net												33,601			22,664				12,400
Unrealized gains (losses) on equity securities												—			—				(341,054	)
Other income (loss), net		12,524			36,222			45,948				36,222			45,948				(50,843	)

Total other income (expense)		129,410			199,453			220,567				199,453			220,567				(182,080	)
																	��
Income before income taxes and equity in earnings of affiliated companies		2,983,381			2,193,825			2,620,429				2,193,825			2,620,429				2,285,465

Provision for income taxes		878,269			628,900			504,406				628,900			504,406				659,944
Equity in earnings of affiliated companies		329,099			362,060			470,083				362,060			470,083				360,066

Net income		2,434,211			1,926,985			2,586,106				1,926,985			2,586,106				1,985,587

Less - Net income attributable to noncontrolling interests		(121,517	)		(95,876	)		(92,123	)			(95,876	)		(92,123	)			(102,714	)

Net income attributable to Toyota Motor Corporation		2,312,694			1,831,109			2,493,983				1,831,109			2,493,983				1,882,873


Note: Net income attributable to common shareholders for the fiscal year ended March 31, 2018 and 2017 is 2,481,692 million yen and 1,821,314 million yen, respectively, which is derived by deducting dividend and accretion to Model AA Class Shares of 12,291 million yen and 9,795 million yen, respectively, from Net income attributable to Toyota Motor Corporation.
Note: Net income attributable to common shareholders for the fiscal year ended March 31, 2017, 2018 and 2019 is ¥1,821,314 million, ¥2,481,692 million and ¥1,868,085 million, respectively, which is derived by deducting dividend and accretion to Model AA Class Shares of ¥9,795 million, ¥12,291 million and ¥14,788 million, respectively, from Net income attributable to Toyota Motor Corporation.										Note: Net income attributable to common shareholders for the fiscal year ended March 31, 2017, 2018 and 2019 is ¥1,821,314 million, ¥2,481,692 million and ¥1,868,085 million, respectively, which is derived by deducting dividend and accretion to Model AA Class Shares of ¥9,795 million, ¥12,291 million and ¥14,788 million, respectively, from Net income attributable to Toyota Motor Corporation.

	Yen										Yen
Net income attributable to Toyota Motor Corporation per common share
- Basic		741.36			605.47			842.00				605.47			842.00				650.55

- Diluted		735.36			599.22			832.78				599.22			832.78				645.11

Cash dividends per common share		210.00			210.00			220.00

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

TOYOTA MOTOR CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


	Yen in millions									Yen in millions
	For the years ended March 31,									For the years ended March 31,
	2016			2017			2018			2017			2018			2019
Net income		2,434,211			1,926,985			2,586,106			1,926,985			2,586,106			1,985,587
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments		(395,352	)		(57,926	)		(120,606	)		(57,926	)		(120,606	)		27,016
Unrealized gains (losses) on securities		(312,192	)		4,279			(94,559	)		4,279			(94,559	)		(21,165	)
Pension liability adjustments		(209,181	)		93,312			22,315			93,312			22,315			(54,836	)

Total other comprehensive income (loss)		(916,725	)		39,665			(192,850	)		39,665			(192,850	)		(48,985	)

Comprehensive income		1,517,486			1,966,650			2,393,256			1,966,650			2,393,256			1,936,602

Less - Comprehensive income attributable to noncontrolling interests		(71,569	)		(103,161	)		(93,096	)		(103,161	)		(93,096	)		(96,458	)

Comprehensive income attributable to Toyota Motor Corporation		1,445,917			1,863,489			2,300,160			1,863,489			2,300,160			1,840,144

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

TOYOTA MOTOR CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY


	Yen in millions																							Yen in millions
	Common stock		Additional paid-in capital			Retained earnings			Accumulated other comprehensive income (loss)			Treasury stock, at cost			Total Toyota Motor Corporation shareholders’ equity			Noncontrolling interests			Total shareholders’ equity
Balances at March 31, 2015		397,050		547,054			15,591,947			1,477,545			(1,225,465	)		16,788,131			859,198			17,647,329

Equity transaction with noncontrolling interests and other				1,972			(97	)								1,875			3,834			5,709
Comprehensive income
Net income							2,312,694									2,312,694			121,517			2,434,211
Other comprehensive income (loss)
Foreign currency translation adjustments										(362,965	)					(362,965	)		(32,387	)		(395,352	)
Unrealized gains (losses) on securities										(302,620	)					(302,620	)		(9,572	)		(312,192	)
Pension liability adjustments										(201,192	)					(201,192	)		(7,989	)		(209,181	)

Total comprehensive income																1,445,917			71,569			1,517,486

Accretion to Mezzanine equity							(3,638	)								(3,638	)					(3,638	)
Dividends to Toyota Motor Corporation class shareholders							(2,449	)								(2,449	)					(2,449	)
Dividends paid to Toyota Motor Corporation common shareholders							(704,728	)								(704,728	)					(704,728	)
Dividends paid to noncontrolling interests																			(73,129	)		(73,129	)
Repurchase of treasury stock													(782,871	)		(782,871	)					(782,871	)
Reissuance of treasury stock				183									4,515			4,698						4,698
Retirement of treasury stock				(1,048	)		(399,489	)					400,537			—						—
																								Common stock		Additional paid-in capital			Retained earnings			Accumulated other comprehensive income (loss)			Treasury stock, at cost			Total Toyota Motor Corporation shareholders’ equity			Noncontrolling interests			Total shareholders’ equity
Balances at March 31, 2016		397,050		548,161			16,794,240			610,768			(1,603,284	)		16,746,935			861,472			17,608,407			397,050		548,161			16,794,240			610,768			(1,603,284	)		16,746,935			861,472			17,608,407

Equity transaction with noncontrolling interests and other				(35,555	)					(2,226	)		283,561			245,780			(232,433	)		13,347					(35,555	)					(2,226	)		283,561			245,780			(232,433	)		13,347
Comprehensive income
Net income							1,831,109									1,831,109			95,876			1,926,985								1,831,109									1,831,109			95,876			1,926,985
Other comprehensive income (loss)
Foreign currency translation adjustments										(52,427	)					(52,427	)		(5,499	)		(57,926	)										(52,427	)					(52,427	)		(5,499	)		(57,926	)
Unrealized gains (losses) on securities										(8,002	)					(8,002	)		12,281			4,279											(8,002	)					(8,002	)		12,281			4,279
Pension liability adjustments										92,809						92,809			503			93,312											92,809						92,809			503			93,312

Total comprehensive income																1,863,489			103,161			1,966,650																	1,863,489			103,161			1,966,650

Accretion to Mezzanine equity							(4,849	)								(4,849	)					(4,849	)							(4,849	)								(4,849	)					(4,849	)
Dividends to Toyota Motor Corporation class shareholders							(4,946	)								(4,946	)					(4,946	)							(4,946	)								(4,946	)					(4,946	)
Dividends paid to Toyota Motor Corporation common shareholders							(634,475	)								(634,475	)					(634,475	)							(634,475	)								(634,475	)					(634,475	)
Dividends paid to noncontrolling interests																			(63,936	)		(63,936	)																			(63,936	)		(63,936	)
Repurchase of treasury stock													(700,228	)		(700,228	)					(700,228	)													(700,228	)		(700,228	)					(700,228	)
Reissuance of treasury stock				(1,219	)								4,325			3,106						3,106					(1,219	)								4,325			3,106						3,106
Retirement of treasury stock				(27,374	)		(380,009	)					407,383			—						—					(27,374	)		(380,009	)					407,383			—						—

Balances at March 31, 2017		397,050		484,013			17,601,070			640,922			(1,608,243	)		17,514,812			668,264			18,183,076			397,050		484,013			17,601,070			640,922			(1,608,243	)		17,514,812			668,264			18,183,076

Equity transaction with noncontrolling interests and other																											1,817			11,400			(11,400	)					1,817			(3,476	)		(1,659	)
Comprehensive income
Net income																														2,493,983									2,493,983			92,123			2,586,106
Other comprehensive income (loss)
Foreign currency translation adjustments																																	(118,977	)					(118,977	)		(1,629	)		(120,606	)
Unrealized gains (losses) on securities																																	(96,581	)					(96,581	)		2,022			(94,559	)
Pension liability adjustments																																	21,735						21,735			580			22,315

Total comprehensive income																																							2,300,160			93,096			2,393,256

Accretion to Mezzanine equity																														(4,849	)								(4,849	)					(4,849	)
Dividends to Toyota Motor Corporation class shareholders																														(7,442	)								(7,442	)					(7,442	)
Dividends paid to Toyota Motor Corporation common shareholders																														(620,698	)								(620,698	)					(620,698	)
Dividends paid to noncontrolling interests																																										(63,764	)		(63,764	)
Repurchase of treasury stock																																				(500,177	)		(500,177	)					(500,177	)
Reissuance of treasury stock																											1,672									50,687			52,359						52,359

Balances at March 31, 2018																									397,050		487,502			19,473,464			435,699			(2,057,733	)		18,735,982			694,120			19,430,102

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

TOYOTA MOTOR CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (CONTINUED)


	Yen in millions																						Yen in millions
	Common stock		Additional paid-in capital		Retained earnings			Accumulated other comprehensive income (loss)			Treasury stock, at cost			Total Toyota Motor Corporation shareholders’ equity			Noncontrolling interests			Total shareholders’ equity			Common stock		Additional paid-in capital			Retained earnings			Accumulated other comprehensive income (loss)			Treasury stock, at cost			Total Toyota Motor Corporation shareholders’ equity			Noncontrolling interests			Total shareholders’ equity
Balances at March 31, 2017		397,050		484,013		17,601,070			640,922			(1,608,243	)		17,514,812			668,264			18,183,076
Balances at March 31, 2018																								397,050		487,502			19,473,464			435,699			(2,057,733	)		18,735,982			694,120			19,430,102

Cumulative effect of accounting changes																													1,282,082			(1,309,620	)					(27,538	)					(27,538	)
Equity transaction with noncontrolling interests and other				1,817		11,400			(11,400	)					1,817			(3,476	)		(1,659	)				105												105			(2,226	)		(2,121	)
Comprehensive income
Net income						2,493,983									2,493,983			92,123			2,586,106								1,882,873									1,882,873			102,714			1,985,587
Other comprehensive income (loss)
Foreign currency translation adjustments									(118,977	)					(118,977	)		(1,629	)		(120,606	)										29,448						29,448			(2,432	)		27,016
Unrealized gains (losses) on securities									(96,581	)					(96,581	)		2,022			(94,559	)										(21,111	)					(21,111	)		(54	)		(21,165	)
Pension liability adjustments									21,735						21,735			580			22,315											(51,066	)					(51,066	)		(3,770	)		(54,836	)

Total comprehensive income															2,300,160			93,096			2,393,256																	1,840,144			96,458			1,936,602

Accretion to Mezzanine equity						(4,849	)								(4,849	)					(4,849	)							(4,850	)								(4,850	)					(4,850	)
Dividends to Toyota Motor Corporation class shareholders						(7,442	)								(7,442	)					(7,442	)							(9,938	)								(9,938	)					(9,938	)
Dividends paid to Toyota Motor Corporation common shareholders						(620,698	)								(620,698	)					(620,698	)							(636,116	)								(636,116	)					(636,116	)
Dividends paid to noncontrolling interests																		(63,764	)		(63,764	)																			(69,367	)		(69,367	)
Repurchase of treasury stock												(500,177	)		(500,177	)					(500,177	)													(550,107	)		(550,107	)					(550,107	)
Reissuance of treasury stock				1,672								50,687			52,359						52,359					(445	)								915			470						470

Balances at March 31, 2018		397,050		487,502		19,473,464			435,699			(2,057,733	)		18,735,982			694,120			19,430,102
Balances at March 31, 2019																								397,050		487,162			21,987,515			(916,650	)		(2,606,925	)		19,348,152			718,985			20,067,137

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

TOYOTA MOTOR CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS


	Yen in millions									Yen in millions
	For the years ended March 31,									For the years ended March 31,
	2016			2017			2018			2017			2018			2019
Cash flows from operating activities
Net income		2,434,211			1,926,985			2,586,106			1,926,985			2,586,106			1,985,587
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		1,625,837			1,610,950			1,734,033			1,610,950			1,734,033			1,792,375
Provision for doubtful accounts and credit losses		159,265			98,666			76,069
Provision (reversal) for doubtful accounts and credit losses											98,666			76,069			80,065
Pension and severance costs, less payments		8,833			23,253			4,286			23,253			4,286			31,645
Losses on disposal of fixed assets		33,329			30,673			35,289			30,673			35,289			35,902
Unrealized losses onavailable-for-sale securities, net		9,272			7,073			846
Unrealized losses (gains) on marketable securities											7,073			846			339,472
Deferred income taxes		32,889			(53,299	)		(237,961	)		(53,299	)		(237,961	)		(86,594	)
Equity in earnings of affiliated companies		(329,099	)		(362,060	)		(470,083	)		(362,060	)		(470,083	)		(360,066	)
Changes in operating assets and liabilities, and other
Increase in accounts and notes receivable		(25,180	)		(264,784	)		(105,435	)		(264,784	)		(105,435	)		(246,845	)
Increase in inventories		(68,912	)		(246,326	)		(171,148	)		(246,326	)		(171,148	)		(166,902	)
Increase in other current assets		(200,669	)		(152,116	)		(162,582	)
(Increase) decrease in other current assets											2,135			(149,463	)		(102,472	)
Increase in accounts payable		120,381			145,957			46,648			145,957			46,648			94,887
Increase (decrease) in accrued income taxes		(5,516	)		(121,032	)		238,753			(121,032	)		238,753			(141,329	)
Increase in other current liabilities		368,923			480,094			211,452			480,094			211,452			351,122
Other		297,293			290,203			423,736			290,203			423,736			159,750

Net cash provided by operating activities		4,460,857			3,414,237			4,210,009			3,568,488			4,223,128			3,766,597

Cash flows from investing activities
Additions to finance receivables		(13,549,278	)		(13,636,694	)		(15,058,516	)		(13,636,694	)		(15,058,516	)		(15,884,610	)
Collection of finance receivables		13,067,700			12,885,944			14,013,204			12,885,944			14,013,204			14,834,709
Proceeds from sales of finance receivables		48,154			42,037			33,108			42,037			33,108			24,394
Additions to fixed assets excluding equipment leased to others		(1,282,545	)		(1,223,878	)		(1,291,117	)		(1,223,878	)		(1,291,117	)		(1,452,725	)
Additions to equipment leased to others		(2,776,671	)		(2,317,559	)		(2,307,590	)		(2,317,559	)		(2,307,590	)		(2,286,162	)
Proceeds from sales of fixed assets excluding equipment leased to others		42,147			41,238			71,820			41,238			71,820			65,437
Proceeds from sales of equipment leased to others		1,111,727			1,238,278			1,211,272			1,238,278			1,211,272			1,385,074
Purchases of marketable securities and security investments		(2,197,477	)		(2,517,008	)		(3,052,916	)		(2,517,008	)		(3,052,916	)		(1,840,355	)
Proceeds from sales of marketable securities and security investments		108,708			260,039			275,574			260,039			275,574			1,134,127
Proceeds upon maturity of marketable securities and security investments		3,307,107			1,641,502			2,247,964			1,641,502			2,247,964			1,564,671
Payment for additional investments in affiliated companies, net of cash acquired		628			44,274			(576	)		44,274			(576	)		5,010
Changes in investments and other assets, and other		(1,062,744	)		571,888			197,681			571,888			197,681			(246,811	)

Net cash used in investing activities		(3,182,544	)		(2,969,939	)		(3,660,092	)		(2,969,939	)		(3,660,092	)		(2,697,241	)

Cash flows from financing activities
Proceeds from issuance of long-term debt		4,845,872			4,603,446			4,793,939			4,603,446			4,793,939			5,000,921
Payments of long-term debt		(4,176,202	)		(3,845,554	)		(4,452,338	)		(3,845,554	)		(4,452,338	)		(4,442,232	)
Increase (decrease) in short-term borrowings		(10,903	)		273,037			347,738
Proceeds from issuance of class shares		474,917			—			—
Increase in short-term borrowings											273,037			347,738			164,282
Dividends paid to Toyota Motor Corporation class shareholders		(1,225	)		(3,697	)		(6,194	)		(3,697	)		(6,194	)		(8,690	)
Dividends paid to Toyota Motor Corporation common shareholders		(704,728	)		(634,475	)		(620,698	)		(634,475	)		(620,698	)		(636,116	)
Dividends paid to noncontrolling interests		(73,129	)		(63,936	)		(63,764	)		(63,936	)		(63,764	)		(69,367	)
Reissuance (repurchase) of treasury stock, and other		(778,173	)		(703,986	)		(447,818	)
Reissuance (repurchase) of treasury stock											(703,986	)		(447,818	)		(549,637	)

Net cash used in financing activities		(423,571	)		(375,165	)		(449,135	)		(375,165	)		(449,135	)		(540,839	)

Effect of exchange rate changes on cash and cash equivalents		(199,871	)		(13,486	)		(43,588	)
Net increase in cash and cash equivalents		654,871			55,647			57,194
Cash and cash equivalents at beginning of year		2,284,557			2,939,428			2,995,075
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents											(13,486	)		(43,588	)		(41,641	)
Net increase in cash and cash equivalents and restricted cash and cash equivalents											209,898			70,313			486,876
Cash and cash equivalents and restricted cash and cash equivalents at beginning of year											2,939,428			3,149,326			3,219,639

Cash and cash equivalents at end of year		2,939,428			2,995,075			3,052,269
Cash and cash equivalents and restricted cash and cash equivalents at end of year											3,149,326			3,219,639			3,706,515

Cash and cash equivalents and restricted cash and cash equivalents for the fiscal year ended March 31, 2019 include restricted cash and cash equivalents of 167,370 million yen and 131,811 million yen at the beginning of the year and the end of the year, respectively. Restricted cash and cash equivalents were included in Prepaid expenses and other current assets in the consolidated balance sheets.

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

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Nature of operations:

Toyota and its affiliated companies are primarily engaged in the design, manufacture, and sale of sedans, minivans, compact cars, sport-utility vehicles, trucks and related parts and accessories throughout the world. In addition, Toyota and its affiliated companies provide financing, vehicle ~~and equipment~~ leasing and certain other financial services primarily to its dealers and their customers to support the sales of vehicles and other products manufactured by Toyota and its affiliated companies.

2. Summary of significant accounting policies:

The parent company and its subsidiaries in Japan and its foreign subsidiaries maintain their records and prepare their financial statements in accordance with Japanese generally accepted accounting principles and those of their countries of domicile. Certain adjustments and reclassifications have been incorporated in the accompanying consolidated financial statements to conform to U.S.GAAP.

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

Basis of consolidation and accounting for investments in affiliated companies -

The consolidated financial statements include the accounts of the parent company, its majority-owned subsidiary companies and variable interest entities of which Toyota is the primary beneficiary. All significant intercompany transactions and accounts have been eliminated. Investments in affiliated companies in which Toyota exercises significant influence, but which it does not control, are stated at cost plus equity in undistributed earnings. Consolidated net income includes Toyota’s equity in current earnings of such companies, after elimination of unrealized intercompany profits. Investments in such companies are reduced to fair value if a decline in market value is determined other-than-temporary. ~~Investments innon-public~~ ~~companies in which Toyota does not exercise significant influence (generally less than a 20% ownership interest) are stated at cost.~~

Estimates -

The preparation of Toyota’s consolidated financial statements in conformity with U.S.GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The more significant estimates include: product warranties, liabilities accrued for recalls and other safety measures, allowance for doubtful accounts and credit losses, residual values for leased assets, impairment of long-lived assets, pension costs and obligations, fair value of derivative financial instruments, other-than-temporary losses on ~~marketable~~debt securities, litigation liabilities and valuation allowance for deferred tax assets.

Translation of foreign currencies -

All asset and liability accounts of foreign subsidiaries and affiliated companies are translated into Japanese yen at appropriateyear-end current exchange rates and all income and expense accounts of those subsidiaries are translated at the average exchange rates for each period. The foreign currency translation adjustments are included as a component of accumulated other comprehensive income.

Foreign currency receivables and payables are translated at appropriateyear-end current exchange rates and the resulting transaction gains or losses are recorded in operations currently.

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Revenue recognition -

~~Revenues from sales of~~In the automotive operations, performance obligations are considered to be satisfied when completed vehicles and parts are ~~generally recognized upon delivery which is considered to have occurred when the dealer has taken title~~delivered to the ~~product and~~agreed locations with dealers. For parts for overseas production, it is when they are loaded on a ship to foreign manufacturing companies. We do not have any material significant payment terms as payment is received at or shortly after the ~~risk and reward~~point of ~~ownership have been substantively transferred, except as described below.~~sale.

Toyota’s sales incentive programs principally consist of cash payments to dealers calculated based on vehicle volume or a model sold by a dealer during a certain period of time. Toyota accrues these incentives as revenue reductions upon the sale of a vehicle corresponding to the program by the amount determined in the related incentive ~~program.~~program utilizing the most likely outcome method.

The sale of certain vehicles includes a contractual right, which entitles customers to free vehicle maintenance. We use an observable price to determine the stand-alone selling price for separate performance obligations or a cost plus margin approach when one is not available. Such revenues from free maintenance contracts are deferred and recognized as revenue over the period of the contract in proportion to the costs expected to be incurred in satisfying the obligations under the contract.

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

We have elected to recognize the cost of transport service activities after the customer gains control as expenses at the time that control of products transfers.

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

~~The sale~~All other operations business of ~~certain vehicles~~Toyota includes the design, manufacture and sales of housing. Certain revenues from the housing business, such as those of ordered housing are recognized only to the extent of the costs incurred until such time that it can reasonably measure the outcome of the performance obligation.

If the period between satisfaction of the performance obligation and receipt of consideration is expected to be within one year or less, as a ~~determinable~~practical expedient, we do not adjust the promised amount of consideration for the ~~contract, which entitles~~effects of a significant financing component.

Revenue is recognized net of any taxes collected from customers and subsequently remitted to ~~free vehicle maintenance. Such revenues from free maintenance contracts are deferred and recognized as revenue over the period of the contract, which approximates the pattern of the related costs.~~governmental authorities.

Other costs -

Advertising and sales promotion costs are expensed as incurred. Advertising costs were ~~¥489,036 million,~~ ¥448,780 million, ¥509,653 million and ~~¥509,653~~¥490,093 million for the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018,~~2019, respectively.

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

In addition to product warranties above, Toyota accrues for costs of recalls and other safety measures based on management’s estimates when it is probable a liability has been incurred and the amount of loss can be reasonably estimated. Toyota mainly employs an estimation model, to accrue at the time of vehicle sale, an amount that represents management’s best estimate of expenses related to future recalls and other safety measures. The estimation model for recalls and other safety measures takes into account Toyota’s historical experience of recalls and other safety measures.

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Litigation liabilities are established to cover probable losses on various lawsuits based on the information currently available. Attorneys’ fees are expensed as incurred.

Research and development costs are expensed as incurred. Research and development costs were ~~¥1,055,672 million,~~ ¥1,037,528 million, ¥1,064,269 million and ~~¥1,064,269~~¥1,048,882 million for the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018,~~2019, respectively.

~~TOYOTA MOTOR CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

~~Cash~~Restricted cash and cash equivalents -

Cash and cash equivalents include all highly liquid investments with original maturities of three months or less, that are readily convertible to known amounts of cash and are so near maturity that they present insignificant risk of changes in value because of changes in interest rates. Restricted cash and cash equivalents mainly include customer collections on securitized receivables to be distributed to investors as payments on the related secured debt.

Marketable securities and other securities investments -

Marketable securities and other securities investments consist of debt and equity securities. Debt ~~and equity~~ securities designated asavailable-for-sale are carried at fair value ~~with unrealized gains or losses included~~and the difference between fair value and acquisition cost is reflected as a component of accumulated other comprehensive income in shareholders’ equity, net of applicable taxes. Individual securities classified asavailable-for-sale are reduced to fair value for other-than-temporary declines in market value. In determining if a decline in value is other-than-temporary, Toyota considers the length of time during and the extent to which the fair value has been less than the carrying value, the financial condition and prospects of the ~~company~~entity issuing such securities and Toyota’s ability and intent to retain its investment in the ~~company~~entity for a period of time sufficient to allow for any anticipated recovery in market value. Realized gains and losses, which are determined based on the average-cost method, are reflected in the consolidated statements of income when realized.

~~Security investments~~Changes in~~non-public~~ ~~companies -~~

~~Security investments~~ fair value on equity securities with readily determinable fair values are recognized in~~non-public~~ ~~companies~~ net income. Equity securities without readily determinable fair values are ~~carried~~measured at cost ~~as fair value is not readily determinable. If~~minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the ~~value of~~identical or a~~non-public~~ ~~security~~ similar 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.same issuer.

Finance receivables -

Finance receivables recorded on Toyota’s consolidated balance sheets are comprised of the unpaid principal balance, plus accrued interest, less charge-offs, net of any unearned income and deferred origination costs and the allowance for credit losses. Deferred origination costs are amortized so as to approximate a level rate of return over the term of the related contracts.

The determination of portfolio segments is based primarily on the qualitative consideration of the nature of Toyota’s business operations and finance receivables. The three portfolio segments within finance receivables are as follows:

Retail receivables portfolio segment -

The retail receivables portfolio segment consists of retail installment sales contracts acquired mainly from dealers (“auto loans”) including credit card loans. These contracts acquired must first meet specified credit standards. Thereafter, Toyota retains responsibility for contract collection and administration.

The contract periods of auto loans primarily range from 2 to 7 years. Toyota acquires security interests in the vehicles financed and has the right to repossess vehicles if customers fail to meet their contractual obligations. Almost all auto loans arenon-recourse, which relieves the dealers from financial responsibility in the event of repossession.

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Toyota classifies retail receivables portfolio segment into one class based on common risk characteristics associated with the underlying finance receivables, the similarity of the credit risks, and the quantitative materiality.

Finance lease receivables portfolio segment -

Toyota acquires new vehicle lease contracts originated primarily through dealers. The contract periods of these primarily range from 2 to 5 years. Lease contracts acquired must first meet specified credit standards after which Toyota assumes ownership of the leased vehicle. Toyota is responsible for contract collection and administration during the lease period.

Toyota is generally permitted to take possession of the vehicle upon a default by the lessee. The residual value is estimated at the time the vehicle is first leased. Vehicles returned to Toyota at the end of their leases are sold by auction.

Toyota classifies finance lease receivables portfolio segment into one class based on common risk characteristics associated with the underlying finance receivables and the similarity of the credit risks.

Wholesale and other dealer loan receivables portfolio segment -

Toyota provides wholesale financing to qualified dealers to finance inventories. Toyota acquires security interests in vehicles financed at wholesale. In cases where additional security interests would be required, Toyota takes dealership assets or personal assets, or both, as additional security. If a dealer defaults, Toyota has the right to liquidate any assets acquired and seek legal remedies.

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

Toyota classifies wholesale and other dealer loan receivables portfolio segment into three classes of wholesale, real estate and working capital, based on the risk characteristics associated with the underlying finance receivables.

A receivable account balance is considered impaired when, based on current information and events, it is probable that Toyota will be unable to collect all amounts due according to the terms of the contract. Factors such as payment history, compliance with terms and conditions of the underlying loan agreement and other subjective factors related to the financial stability of the borrower are considered when determining whether a loan is impaired. Impaired finance receivables include certain nonaccrual receivables for which a specific reserve has been assessed. An account modified as a troubled debt restructuring is considered to be impaired. A troubled debt restructuring occurs when an account is modified through a concession to a borrower experiencing financial difficulty.

All classes of wholesale and other dealer loan receivables portfolio segment are placed on nonaccrual status when full payment of principal or interest is in doubt, or when principal or interest is 90 days or more contractually past due, whichever occurs first. Collateral dependent loans are placed on nonaccrual status if collateral is insufficient to cover principal and interest. Interest accrued but not collected at the date a receivable is placed on nonaccrual status is reversed against interest income. In addition, the amortization of net deferred fees is suspended.

~~TOYOTA MOTOR CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

Interest income on nonaccrual receivables is recognized only to the extent it is received in cash. Accounts are restored to accrual status only when interest and principal payments are brought current and future payments are reasonably assured. Receivable balances arewritten-off against the allowance for credit losses when it is

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

probable that a loss has been realized. Retail receivables class and finance lease receivables class are not placed generally on nonaccrual status when principal or interest is 90 days or more past due. However, these receivables are generallywritten-off against the allowance for credit losses when payments due are no longer expected to be received or the account is 120 days contractually past due, whichever occurs first.

As of March 31, ~~2017~~2018 and ~~2018,~~2019, finance receivables on nonaccrual status are as follows:


	Yen in millions				Yen in millions
	March 31,				March 31,
	2017		2018		2018		2019
Retail		7,064		6,897		6,897		9,401
Finance leases		2,297		2,117		2,117		2,431
Wholesale		15,018		12,484		12,484		18,217
Real estate		12,632		13,856		13,856		18,281
Working capital		561		105		105		—

		37,572		35,459		35,459		48,330

As of March 31, ~~2017~~2018 and ~~2018,~~2019, finance receivables 90 days or more past due and accruing are as follows:


	Yen in millions				Yen in millions
	March 31,				March 31,
	2017		2018		2018		2019
Retail		26,616		26,007		26,007		28,438
Finance leases		3,526		3,812		3,812		3,821

		30,142		29,819		29,819		32,259

Allowance for credit losses -

Allowance for credit losses is established to cover probable losses on finance receivables and vehicles and equipment on operating leases, resulting from the inability of customers to make required payments. Provision for credit losses is included in selling, general and administrative expenses.

The allowance for credit losses is based on a systematic, ongoing review and evaluation performed as part of the credit-risk evaluation process, historical loss experience, the size and composition of the portfolios, current economic events and conditions, the estimated fair value and adequacy of collateral and other pertinent factors. Vehicles and equipment on operating leases are not within the scope of accounting guidance governing the disclosure of portfolio segments.

Retail receivables portfolio segment -

Toyota calculates allowance for credit losses to cover probable losses on retail receivables by applying reserve rates to such receivables. Reserve rates are calculated mainly by historical loss experience, current economic events and conditions and other pertinent factors.

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Finance lease receivables portfolio segment -

Toyota calculates allowance for credit losses to cover probable losses on finance lease receivables by applying reserve rates to such receivables. Reserve rates are calculated mainly by historical loss experience, current economic events and conditions and other pertinent factors such as used car markets.

Wholesale and other dealer loan receivables portfolio segment -

Toyota calculates allowance for credit losses to cover probable losses on wholesale and other dealer loan receivables by applying reserve rates to such receivables. Reserve rates are calculated mainly by financial conditions of the dealers, terms of collateral setting, current economic events and conditions and other pertinent factors.

Toyota establishes specific reserves to cover the estimated losses on individually impaired receivables within the wholesale and other dealer loan receivables portfolio segment. Specific reserves on impaired receivables are determined by the present value of expected future cash flows or the fair value of collateral when it is probable that such receivables will be unable to be fully collected. The fair value of the underlying collateral is used if the receivable is collateral-dependent. The receivable is determined collateral-dependent if the repayment of the loan is expected to be provided by the underlying collateral. For the receivables in which the fair value of the underlying collateral was in excess of the outstanding balance, no allowance was provided.

Troubled debt restructurings in the retail receivables and finance lease receivables portfolio segments are specifically identified as impaired and aggregated with their respective portfolio segments when determining the allowance for credit losses. Impaired loans in the retail receivables and finance lease receivables portfolio segments are insignificant for individual evaluation and Toyota has determined that allowance for credit losses for each of the retail receivables and finance lease receivables portfolio segments would not be materially different if they had been individually evaluated for impairment.

Specific reserves on impaired receivables within the wholesale and other dealer loan receivables portfolio segment are recorded by an increase to the allowance for credit losses based on the related measurement of impairment. Related collateral, if recoverable, is repossessed and sold and the account balance iswritten-off.

Any shortfall between proceeds received and the carrying cost of repossessed collateral is charged to the allowance. Recoveries are reversed from the allowance for credit losses.

Allowance for residual value losses -

Toyota is exposed to risk of loss on the disposition ofoff-lease vehicles to the extent that sales proceeds are not sufficient to cover the carrying value of the leased asset at lease termination. Toyota maintains an allowance to cover probable estimated losses related to unguaranteed residual values on its owned portfolio. The allowance is evaluated considering projected vehicle return rates and projected loss severity. Factors considered in the determination of projected return rates and loss severity include historical and market information on used vehicle sales, trends in lease returns and new car markets, and general economic conditions. Management evaluates the foregoing factors, develops several potential loss scenarios, and reviews allowance levels to determine whether reserves are considered adequate to cover the probable range of losses.

The allowance for residual value losses is maintained in amounts considered by Toyota to be appropriate in relation to the estimated losses on its owned portfolio. Upon disposal of the assets, the allowance for residual losses is adjusted for the difference between the net book value and the proceeds from sale.

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Inventories -

Inventories are valued at cost, not in excess of net realizable value, cost being determined on the “average-cost” basis, except for the cost of finished products carried by certain subsidiary companies which is determined on the “specific identification” basis or“last-in,first-out” (“LIFO”) basis. Inventories valued on the LIFO basis totaled ~~¥433,802~~¥472,717 million and ~~¥472,717~~¥470,208 million at March 31, ~~2017~~2018 and ~~2018,~~2019, respectively. Had the“first-in,first-out” basis been used for those companies using the LIFO basis, inventories would have been ~~¥40,650~~¥22,778 million and ~~¥22,778~~¥25,302 million higher than reported at March 31, ~~2017~~2018 and ~~2018,~~2019, respectively.

Property, plant and equipment -

Property, plant and equipment are stated at cost. Major renewals and improvements are capitalized; minor replacements, maintenance and repairs are charged to current operations. Depreciation of property, plant and equipment is mainly computed on the declining-balance method for the parent company and Japanese subsidiaries and on the straight-line method for foreign subsidiary companies at rates based on estimated useful lives of the respective assets according to general class, type of construction and use. The estimated useful lives range from 2 to 65 years for buildings and from 2 to 20 years for machinery and equipment.

Vehicles and equipment on operating leases to third parties are originated by dealers and acquired by certain consolidated subsidiaries. Such subsidiaries are also the lessors of certain property that they acquire directly. Vehicles and equipment on operating leases are depreciated primarily on a straight-line method over the lease term, generally from 2 to 5 years, to the estimated residual value. Incremental direct costs incurred in connection with the acquisition of operating lease contracts are capitalized and amortized on a straight-line method over the lease term.

Long-lived assets -

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

Goodwill and intangible assets -

Goodwill is not material to Toyota’s consolidated balance sheets.

Intangible assets consist mainly of software. Intangible assets with a definite life are amortized on a straight-line basis with estimated useful lives mainly of 5 years. Intangible assets with an indefinite life are tested for impairment whenever events or circumstances indicate that a carrying amount of an asset (asset group) may not be recoverable.

An impairment loss would be recognized when the carrying amount of an asset exceeds the estimated undiscounted cash flows used in determining the fair value of the asset. The amount of the impairment loss to be recorded is generally determined by the difference between the fair value of the asset using a discounted cash flow valuation method and the current book value.

~~TOYOTA MOTOR CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

Employee benefit obligations -

Toyota has both defined benefit and defined contribution plans for employees’ retirement benefits. Retirement benefit obligations are measured by actuarial calculations in accordance with U.S.GAAP. The funded status of the defined benefit postretirement plans is recognized on the consolidated balance sheets as prepaid pension and severance costs or accrued pension and severance costs, and the funded status change is recognized in the year in which it occurs through other comprehensive income.

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Environmental matters -

Environmental expenditures relating to current operations are expensed or capitalized as appropriate. Expenditures relating to existing conditions caused by past operations, which do not contribute to current or future revenues, are expensed. Liabilities for remediation costs are recorded when they are probable and reasonably estimable, generally no later than the completion of feasibility studies or Toyota’s commitment to a plan of action. The cost of each environmental liability is estimated by using current technology available and various engineering, financial and legal specialists within Toyota based on current law. Such liabilities do not reflect any offset for possible recoveries from insurance companies and are not discounted. There were no material changes in these liabilities for all periods presented.

Income taxes -

The provision for income taxes is computed based on the pretax income included in the consolidated statements of income. The asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized.

Derivative financial instruments -

Toyota employs derivative financial instruments, including forward foreign currency exchange contracts, foreign currency options, interest rate swaps, interest rate currency swap agreements and interest rate options to manage its exposure to fluctuations in interest rates and foreign currency exchange rates. All derivative financial instruments are recorded on the consolidated balance sheets at fair value, taking into consideration the effects of legally enforceable master netting agreements that allow us to net settle positive and negative positions and offset cash collateral held with the same counterparty on a net basis. Toyota does not use derivatives for speculation or trading purposes. Changes in the fair value of derivatives are recorded each period in current earnings or through other comprehensive income, depending on whether a derivative is designated as part of a hedge transaction and the type of hedge transaction. The ineffective portion of all hedges is recognized currently in operations.

Net income attributable to Toyota Motor Corporation per common share -

Basic net income attributable to Toyota Motor Corporation per common share is calculated by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding during the reported period. The calculation of diluted net income attributable to Toyota Motor Corporation per common share is done by adjusting net income attributable to common shareholders and the weighted-average number of common shares outstanding, which includes the additional dilution from the assumed conversion of model AA class shares and the assumed exercise of dilutive stock options.

~~TOYOTA MOTOR CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

Stock-based compensation -

Toyota measures compensation expense for its stock-based compensation plan based on the grant-date fair value of the award, and accounts for the award.

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Other comprehensive income -

Other comprehensive income refers to revenues, expenses, gains and losses that, under U.S.GAAP are included in comprehensive income, but are excluded from net income as these amounts are recorded directly as an adjustment to shareholders’ equity. Toyota’s other comprehensive income is primarily comprised of unrealized gains/losses on marketable securities designated asavailable-for-sale, foreign currency translation adjustments and adjustments attributed to pension liabilities associated with Toyota’s defined benefit pension plans.

Accounting changes -

In ~~July 2015,~~May 2014, the Financial Accounting Standards Board (“FASB”) issued updated guidance to simplify the measurement of inventory. Toyota adopted this guidance on April 1, 2017. The adoption of this guidance did not have a material impact on Toyota’s consolidated financial statements.

In March 2016, the FASB issued updated guidance for effect of derivative contract novations on existing hedge accounting relationships. This guidance clarifies that a change in the counterparty to a designated derivative hedging instrument does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. Toyota adopted this guidance on April 1, 2017. The adoption of this guidance did not have a material impact on Toyota’s consolidated financial statements.

In March 2016, the FASB issued updated guidance for contingent put and call options in debt instruments. This guidance clarifies whether embedded contingent put and call options are clearly and closely related to the debt host when bifurcating embedded derivatives. Toyota adopted this guidance on April 1, 2017. The adoption of this guidance did not have a material impact on Toyota’s consolidated financial statements.

In October 2016, the FASB issued updated guidance for consolidation. Under this guidance, a reporting entity would evaluate its indirect economic interest in a variable interest entity held through a related party under common control on a proportionate basis. Toyota adopted this guidance on April 1, 2017. The adoption of this guidance did not have a material impact on Toyota’s consolidated financial statements.

In February 2018, the FASB issued updated guidance for comprehensive income. This guidance allows entities to reclassify tax effects stranded in accumulated other comprehensive incomes as a result of the Tax Cuts and Jobs Act of 2017 of the United States to retained earnings. Toyota early adopted this guidance on April 1, 2017. The adoption of this guidance did not have a material impact on Toyota’s consolidated financial statements.

~~Recent pronouncements to be adopted in future periods -~~

~~In May 2014, the FASB~~ issued updated guidance on the recognition of revenue from contracts with customers. This guidance requires an entity to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which the entity expects to be entitled in

~~TOYOTA MOTOR CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

exchange for those goods or services and supersedes the current revenue recognition guidance. In August 2015, the FASB issued updated guidance on the deferral of the effective date. As a result, this guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. This guidance may be adopted retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying this guidance recognized at the date of initial application. Toyota ~~will apply~~applied the modified retrospective method of adoption ~~from~~to contracts that were not completed as of the ~~fiscal year beginning~~adoption on April 1, 2018. ~~Management does not expect~~The adoption of this guidance todid not have a material impact on Toyota’s consolidated financial statements. See note 26 to the consolidated financial statements for the disclosure by adoption of this guidance.

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~~requires entities to measure equity investments at fair value and recognize any changes in fair value in net income. ~~This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years.~~ Toyota ~~will adopt~~adopted this guidance ~~from the fiscal year beginning~~on April 1, 2018. Toyota ~~will recognize~~recognized a cumulative-effect adjustment to retained earnings of ~~¥1,125,109~~¥1,309,725 million as of April 1, 2018 forafter-tax unrealized gains ~~of available-for-sale~~(losses) on equity securities previously recognized in accumulated other comprehensive income. Unrealized gains (losses) on equity securities, which is mainly included in “Unrealized gains (losses) on equity securities” and “Equity in earnings of affiliated companies” of Toyota’s consolidated statements of income for the fiscal year ended March 31, 2019, was losses of ¥419,429 million. See note 5 to the consolidated financial statements for the disclosure by adoption of this guidance.

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. Toyota adopted this guidance on April 1, 2018. The adoption of this guidance did not have a material impact on Toyota’s consolidated financial statements.

In October 2016, the FASB issued updated guidance that would require entities to recognize the income tax consequences of intercompany asset transfers other than inventory. Toyota adopted this guidance on April 1, 2018. The adoption of this guidance did not have a material impact on Toyota’s consolidated financial statements.

In November 2016, the FASB issued updated guidance for the statement of cash flows. This guidance requires that restricted cash and restricted cash equivalents should be included with cash and cash equivalents. It also requires entities to disclose how the statement of cash flows that includes restricted cash with cash and cash equivalents reconciles to the balance sheet. Toyota adopted this guidance on April 1, 2018. The adoption of this guidance did not have a material impact on Toyota’s consolidated financial statements.

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Recent pronouncements to be adopted in future periods -

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 aright-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. This guidance may be adopted retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying this guidance recognized at the date of initial application. Toyota will apply the modified retrospective method of adoption from the fiscal year beginning April 1, 2019. Management is evaluating the impact of adopting this guidance on Toyota’s consolidated financial ~~statements.~~statements, but expects to record an increase in total assets by approximately 1%.

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 foravailable-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,~~2017, the FASB issued updated guidance for ~~classification of statement of cash flows.~~hedge accounting. This guidance ~~clarifies classification~~simplifies and expands the application of ~~certain cash receipts and cash payments of statement of cash flows.~~hedge accounting. This guidance is effective for fiscal years beginning after December 15, ~~2017,~~2018, 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,~~August 2018, the FASB issued updated guidance ~~that would require entities to recognize the income tax consequences of intercompany asset transfers other than inventory.~~for fair value measurements. This guidance adds, removes and modifies fair value measurement disclosure requirements. This guidance is effective for fiscal years beginning after December 15, ~~2017, including interim periods within those fiscal years. Management does not expect this guidance to have a material impact on Toyota’s consolidated financial statements.~~

In November 2016, the FASB issued updated guidance for the statement of cash flows. This guidance will require that restricted cash and restricted cash equivalents should be included with cash and cash equivalents. It will also require entities to disclose how the statement of cash flows that includes restricted cash with cash and cash equivalents reconciles to the balance sheet. This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Management does not expect this guidance to have a material impact on Toyota’s consolidated financial statements.

~~TOYOTA MOTOR CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

In August 2017, the FASB issued updated guidance for hedge accounting. This guidance simplifies and expands the application of hedge accounting. This guidance is effective for fiscal year beginning after December 15, 2018,2019, including interim periods within those fiscal years. Management is evaluating the ~~impact~~potential impacts of ~~adopting~~ this guidance on Toyota’s ~~consolidated financial statements.~~disclosures.

Other information -

On April 1, 2018, Toyota changed the exchange rate used to translate foreign currency-denominated transactions as well as foreign currency-denominated monetary receivables and payables from the Telegraphic Transfer Buying Rate and Telegraphic Transfer Selling Rate to the Telegraphic Transfer Middle Rate. As a result, for the year ended March 31, 2019, net revenues and operating income increased by ¥56,127 million and ¥136,272 million, respectively, other income (expense) decreased by ¥103,300 million and income before income taxes and equity in earnings of affiliated companies increased by ¥32,972 million.

Reclassifications -

Certain prior year amounts have been reclassified to conform to the presentations as of and for the year ended March 31, ~~2018.~~2019.

3. Supplemental cash flow information:

Cash payments for income taxes were ~~¥884,589 million,~~ ¥854,600 million, ¥500,214 million and ~~¥500,214~~¥836,619 million for the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018,~~2019, respectively. Interest payments during the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018~~2019 were ~~¥381,280 million,~~ ¥362,602 million, ¥422,720 million and ~~¥422,720~~¥507,812 million, respectively.

Capital lease obligations of ~~¥6,546 million,~~ ¥5,975 million, ¥4,467 million and ~~¥4,467~~¥6,086 million were incurred for the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018,~~2019, respectively.

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

4. Acquisitions and dispositions:

Toyota Housing Corporation, a consolidated subsidiary of Toyota Motor Corporation, increased its ownership interest in Misawa Homes Co., Ltd. (Business description: Production and sale of housing materials and components, etc.) to 51% by acquiring 11,181,798 shares of common stock of Misawa Homes Co., Ltd. through a tender offer on December 29, 2016 as well as a third-party allotment of Misawa Homes Co., Ltd. shares to Toyota Housing Corporation and a disposal of Misawa Homes Co., Ltd. treasury stock on January 5, 2017, in order to increase competitiveness through enhanced cooperation with Misawa Homes Co., Ltd. As a result, Misawa Homes Co., Ltd., previously an affiliated company accounted for under the equity method, is now accounted for as a consolidated subsidiary of Toyota Motor Corporation.

The acquisition was accounted for under the acquisition method. Acquisition-related costs were accounted as expense when incurred, and the estimated fair values of the assets acquired, liabilities assumed and noncontrolling interests as of the date of the acquisition of control are immaterial in value.

The amount of sales of Misawa Homes Co., Ltd. after the date of the acquisition of control, which is included in “Sales of products” of Toyota’s consolidated statements of income for fiscal 2017, is ¥130,046 million. Misawa Homes’ net income does not have a material effect on net income attributable to Toyota Motor Corporation in term of monetary value.

In addition to the above, Toyota made several acquisitions and dispositions during the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018,~~2019, however the assets and liabilities acquired or transferred were not material.

~~TOYOTA MOTOR CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

5. Marketable securities and other securities investments:

Marketable securities and other securities investments include public and corporate bonds and common stocks for which the aggregate cost, gross unrealized gains and losses and fair value are as follows:


	Yen in millions								Yen in millions
	March 31, 2017								March 31, 2018
	Cost		Gross unrealized gains		Gross unrealized losses		Fair value		Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Available-for-sale
Public and corporate bonds		5,789,221		145,640		49,030		5,885,831		6,276,811		150,198		118,275		6,308,734
Common stocks		668,345		2,018,910		321		2,686,934		676,959		1,910,767		5,611		2,582,115
Other		819,514		9,724		2,670		826,568		730,334		8,058		1,413		736,979

Total		7,277,080		2,174,274		52,021		9,399,333		7,684,104		2,069,023		125,299		9,627,828

Securities not practicable to determine fair value
Public and corporate bonds		25,257								29,980
Common stocks		76,936								109,875

Total		102,193								139,855


	Yen in millions
	March 31, 2018
	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Available-for-sale
Public and corporate bonds		6,276,811		150,198		118,275		6,308,734
Common stocks		676,959		1,910,767		5,611		2,582,115
Other		730,334		8,058		1,413		736,979

Total		7,684,104		2,069,023		125,299		9,627,828

Securities not practicable to determine fair value
Public and corporate bonds		29,980
Common stocks		109,875

Total		139,855

~~Japanese bonds and foreign bonds including U.S., European and other bonds represent 28% and 72% (as~~

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)



	Yen in millions
	March 31, 2019
	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Available-for-sale
Public and corporate bonds		5,837,423		82,022		73,256		5,846,189
Other		289,285		5,406		845		293,846

Total		6,126,708		87,428		74,101		6,140,035

Securities not practicable to determine fair value
Public and corporate bonds		32,922

Note: Due to the adoption of ~~March 31, 2017) and 16% and 84% (as of March 31, 2018) of public and corporate bonds included inavailable-for-sale,~~ ~~respectively. Listed stocks on~~ the ~~Japanese stock markets represent 92% and 93% of common stocks which are included inavailable-for-sale~~new guidance for financial instruments, as of March 31, ~~2017 and 2018, respectively.~~ 2019, equity securities with readily determinable fair values are measured at fair value with changes in the fair value recognized in net income.

Public and corporate bonds include government bonds, and “Other” includes investment trusts.

Unrealized losses continuing over a 12 month period or more in the aggregate were not material as of March 31, ~~2017~~2018 and ~~2018.~~2019.

As of March 31, ~~2017~~2018 and ~~2018,~~2019, maturities of public and corporate bonds included inavailable-for-sale are mainly from 1 to 10 years.

~~TOYOTA MOTOR CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

Proceeds from sales ofavailable-for-sale securities were ~~¥108,708 million,~~ ¥251,940 million and ¥248,046 million for the years ended March 31, ~~2016,~~ 2017 and 2018, respectively. On those sales, gross realized gains were ~~¥9,500 million,~~ ¥61,038 million and ¥7,684 million and gross realized losses were ~~¥365 million,~~ ¥108 million and ¥278 million, respectively.

During the years ended March 31, ~~2016,~~ 2017 and 2018, Toyota recognized impairment losses onavailable-for-sale securities of ~~¥9,272 million,~~ ¥7,073 million and ¥846 million, respectively, which are included in “Other income (loss), net” and other in the accompanying consolidated statements of income.

~~In the ordinary course~~The carrying amount of ~~business, Toyota maintains long-term investment~~equity securities ~~included in “Marketable securities and other securities investments” and issued by a number ofnon-public~~ ~~companies which are recorded at cost, as their~~with readily determinable fair values ~~were~~was ¥2,154,951 million as of March 31, 2019.

Gains and losses related to equity securities for the year ended March 31, 2019 are as follows:


	Yen in millions
Net gains (losses) recognized on equity securities		(334,636	)
Less: Net gains (losses) recognized on equity securities sold		4,836

Unrealized gains (losses) on equity securities still held as of March 31, 2019		(339,472	)

Toyota did not recognize any material impairment or other adjustments on equity securities without readily ~~determinable. Management employs a systematic methodology to assess~~determinable fair values for the ~~recoverability~~years ended March 31, 2019. The carrying amount of ~~such investments by reviewing the financial viability~~equity securities without readily determinable fair values was ¥279,178 million as of the underlying companies and the prevailing market conditions in which these companies operate to determine if Toyota’s investment in each individual company is impaired and whether the impairment is other-than-temporary. Toyota periodically performs this impairment test for significant investments recorded at cost. If the impairment is determined to be other-than-temporary, the carrying value of the investment is written-down by the impaired amount and the losses are recognized currently in operations.March 31, 2019.

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

6. Finance receivables:

Finance receivables consist of the following:


	Yen in millions						Yen in millions
	March 31,						March 31,
	2017			2018			2018			2019
Retail		11,453,352			11,995,174			11,995,174			12,768,305
Finance leases		1,265,882			1,460,600			1,460,600			1,636,536
Wholesale and other dealer loans		3,281,142			3,281,427			3,281,427			3,489,757

		16,000,376			16,737,201			16,737,201			17,894,598
Deferred origination costs		172,298			181,764			181,764			204,304
Unearned income		(804,591	)		(919,967	)		(919,967	)		(986,928	)
Allowance for credit losses
Retail		(104,354	)		(103,457	)		(103,457	)		(117,594	)
Finance leases		(23,962	)		(28,817	)		(28,817	)		(26,483	)
Wholesale and other dealer loans		(30,896	)		(36,800	)		(36,800	)		(39,008	)

Total allowance for credit losses		(159,212	)		(169,074	)		(169,074	)		(183,085	)

Total finance receivables, net		15,208,871			15,829,924			15,829,924			16,928,889
Less - Current portion		(6,196,649	)		(6,348,306	)		(6,348,306	)		(6,647,771	)

Noncurrent finance receivables, net		9,012,222			9,481,618			9,481,618			10,281,118

Finance receivables were geographically distributed as follows: ~~in North America 59.1%, in Asia 11.3%, in Europe 10.3%, in Japan 8.1% and in Other 11.2% as of March 31, 2017, and~~ in North America 55.7%, in Asia 12.3%, in Europe 12.1%, in Japan 8.2% and in Other 11.7% as of March 31, ~~2018.~~

~~TOYOTA MOTOR CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

2018, and in North America 55.2%, in Asia 13.0%, in Europe 12.3%, in Japan 8.2% and in Other 11.3% as of March 31, 2019.

The contractual maturities of retail receivables, the future minimum lease payments on finance leases and the contractual maturities of wholesale and other dealer loans at March 31, ~~2018~~2019 are summarized as follows:


	Yen in millions						Yen in millions
Years ending March 31,	Retail		Finance leases		Wholesale and other dealer loans		Retail		Finance leases		Wholesale and other dealer loans
2019		3,887,959		370,916		2,431,231
2020		2,870,540		293,371		234,874		4,089,096		418,450		2,495,356
2021		2,269,797		228,764		140,295		3,035,992		325,744		235,985
2022		1,569,215		103,796		162,198		2,434,026		251,888		237,026
2023		884,871		37,134		121,654		1,728,217		113,040		140,418
2024								942,876		42,582		143,747
Thereafter		512,792		5,122		191,175		538,098		6,538		237,225

		11,995,174		1,039,103		3,281,427		12,768,305		1,158,242		3,489,757

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Finance leases consist of the following:


	Yen in millions						Yen in millions
	March 31,						March 31,
	2017			2018			2018			2019
Minimum lease payments		889,522			1,039,103			1,039,103			1,158,242
Estimated unguaranteed residual values		376,360			421,497			421,497			478,294

		1,265,882			1,460,600			1,460,600			1,636,536
Deferred origination costs		5,809			10,411			10,411			11,929
Less - Unearned income		(103,518	)		(120,884	)		(120,884	)		(143,838	)
Less - Allowance for credit losses		(23,962	)		(28,817	)		(28,817	)		(26,483	)

Finance leases, net		1,144,211			1,321,310			1,321,310			1,478,144

Toyota is exposed to credit risk on Toyota’s finance receivables. Credit risk is the risk of loss arising from the failure of customers or dealers to meet the terms of their contracts with Toyota or otherwise fail to perform as agreed. Toyota estimates allowance for credit losses by variety of credit-risk evaluation process to cover probable and estimable losses above.

~~TOYOTA MOTOR CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

The table below shows the amount of the finance receivables segregated into aging categories based on the number of days outstanding as of March 31, ~~2017~~2018 and ~~2018:~~2019:


	Yen in millions										Yen in millions
	March 31, 2017										March 31, 2018
	Retail		Finance leases		Wholesale		Real estate		Working capital		Retail		Finance leases		Wholesale		Real estate		Working capital
Current		11,264,660		1,255,626		1,707,432		848,757		722,697		11,802,032		1,448,989		1,721,225		823,007		731,877
30-59 days past due		125,626		5,114		1,327		—		405		127,830		5,741		138		—		—
60-89 days past due		29,321		1,321		—		—		—		32,408		1,760		5,112		—		—
90 days or greater past due		33,745		3,821		—		266		258		32,904		4,110		—		65		3

Total		11,453,352		1,265,882		1,708,759		849,023		723,360		11,995,174		1,460,600		1,726,475		823,072		731,880


	Yen in millions
	March 31, 2018
	Retail		Finance leases		Wholesale		Real estate		Working capital
Current		11,802,032		1,448,989		1,721,225		823,007		731,877
30-59 days past due		127,830		5,741		138		—		—
60-89 days past due		32,408		1,760		5,112		—		—
90 days or greater past due		32,904		4,110		—		65		3

Total		11,995,174		1,460,600		1,726,475		823,072		731,880


	Yen in millions
	March 31, 2019
	Retail		Finance leases		Wholesale		Real estate		Working capital
Current		12,554,265		1,625,893		1,806,305		873,427		808,755
30-59 days past due		141,111		4,972		191		—		—
60-89 days past due		35,090		1,396		100		—		—
90 days or greater past due		37,839		4,275		393		106		480

Total		12,768,305		1,636,536		1,806,989		873,533		809,235

The tables below show the recorded investment for ~~each~~ credit quality of the finance receivable within the wholesale and other dealer loan receivables portfolio segment ~~in the United States and other regions~~ as of March 31, ~~2017~~2018 and ~~2018:~~

~~United States~~2019:

The wholesale and other dealer loan receivables portfolio segment is primarily segregated into credit qualities below based on internal risk assessments by dealers.

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Performing: Account not classified as either Credit Watch, At Risk or Default

Credit Watch: Account designated for elevated attention

At Risk:

Account where there is an increased likelihood that default may exist based on qualitative and quantitative factors

Default:

Account is not currently meeting contractual obligations or we have temporarily waived certain contractual requirements

   Yen in millions
   March 31, 2017
   Wholesale    Real estate    Working capital    Total
Performing
   1,076,164    449,884    233,677    1,759,725
Credit Watch
   142,336    68,726    16,049    227,111
At Risk
   1,286    5,071    561    6,918
Default
   8,791    5,079    544    14,414








Total
   1,228,577    528,760    250,831    2,008,168

~~TOYOTA MOTOR CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~


	Yen in millions
	March 31, 2018
	Wholesale		Real estate		Working capital		Total
Performing		1,532,786		716,187		711,193		2,960,166
Credit Watch		126,181		68,923		12,016		207,120
At Risk		39,338		25,369		6,270		70,977
Default		28,170		12,593		2,401		43,164

Total		1,726,475		823,072		731,880		3,281,427

   Yen in millions
   March 31, 2018
   Wholesale    Real estate    Working capital    Total
Performing
   1,005,030    432,397    225,442    1,662,869
Credit Watch
   99,547    51,420    10,730    161,697
At Risk
   7,968    3,081    3,506    14,555
Default
   4,356    4,993    2,231    11,580








Total
   1,116,901    491,891    241,909    1,850,701

~~Other regions~~

Credit qualities of the wholesale and other dealer loan receivables portfolio segment in other regions are also monitored based on internal risk assessments by dealers on a consistent basis as in the United States. These accounts classified as “Credit Watch” or “At Risk” were not significant in other regions, and consequently the tables below summarize information for two categories, “Performing” and “Default”.

   Yen in millions
   March 31, 2017
   Wholesale    Real estate    Working capital    Total
Performing
   460,308    316,008    472,198    1,248,514
Default
   19,874    4,255    331    24,460








Total
   480,182    320,263    472,529    1,272,974


	Yen in millions								Yen in millions
	March 31, 2018								March 31, 2019
	Wholesale		Real estate		Working capital		Total		Wholesale		Real estate		Working capital		Total
Performing		585,760		323,581		489,801		1,399,142		1,566,475		743,379		789,948		3,099,802
Credit Watch										156,740		81,848		8,610		247,198
At Risk										58,550		45,564		10,189		114,303
Default		23,814		7,600		170		31,584		25,224		2,742		488		28,454

Total		609,574		331,181		489,971		1,430,726		1,806,989		873,533		809,235		3,489,757

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The tables below summarize information about impaired finance receivables:

   Yen in millions
   Recorded investment    Unpaid principal balance    Individually evaluated allowance
   March 31,    March 31,    March 31,
         2017                2018                2017                2018                2017                2018
Impaired account balances individually evaluated for impairment with an allowance:

Wholesale
   10,667    11,582    10,667    11,582    1,373    1,525
Real estate
   10,986    9,353    10,986    9,353    1,596    588
Working capital
   3,793    5,858    3,793    5,858    1,291    5,429












Total
   25,446    26,793    25,446    26,793    4,260    7,542












Impaired account balances individually evaluated for impairment without an allowance:

Wholesale
   15,033    8,818    15,033    8,818
Real estate
   11,780    15,086    11,780    15,086
Working capital
   —      2,337    —      2,337









Total
   26,813    26,241    26,813    26,241









Impaired account balances aggregated and evaluated for impairment:

Retail
   27,269    27,151    26,597    26,418
Finance leases
   66    100    54    74









Total
   27,335    27,251    26,651    26,492









Total impaired account balances:

Retail
   27,269    27,151    26,597    26,418
Finance leases
   66    100    54    74
Wholesale
   25,700    20,400    25,700    20,400
Real estate
   22,766    24,439    22,766    24,439
Working capital
   3,793    8,195    3,793    8,195









Total
   79,594    80,285    78,910    79,526

   Yen in millions
   Average impaired
finance receivables
   For the years ended March 31,
   2017    2018
Total impaired account balances:

Retail
   26,628    27,664
Finance leases
   76    83
Wholesale
   26,306    23,171
Real estate
   22,482    22,831
Working capital
   4,208    5,818




Total
   79,700    79,567

~~For the years ended March 31, 2017 and 2018, interest income on impaired finance receivables was not material.~~


	Yen in millions
	Recorded investment				Unpaid principal balance				Individually evaluated allowance
	March 31,				March 31,				March 31,
	2018		2019		2018		2019		2018		2019
Impaired account balances individually evaluated for impairment with an allowance:
Wholesale		11,582		18,187		11,582		18,187		1,525		3,141
Real estate		9,353		10,545		9,353		10,545		588		1,280
Working capital		5,858		7,451		5,858		7,451		5,429		6,670

Total		26,793		36,183		26,793		36,183		7,542		11,091

Impaired account balances individually evaluated for impairment without an allowance:
Wholesale		8,818		14,429		8,818		14,429
Real estate		15,086		16,870		15,086		16,870
Working capital		2,337		2,220		2,337		2,220

Total		26,241		33,519		26,241		33,519

Impaired account balances aggregated and evaluated for impairment:
Retail		27,151		29,537		26,418		28,788
Finance leases		100		99		74		75

Total		27,251		29,636		26,492		28,863

Total impaired account balances:
Retail		27,151		29,537		26,418		28,788
Finance leases		100		99		74		75
Wholesale		20,400		32,616		20,400		32,616
Real estate		24,439		27,415		24,439		27,415
Working capital		8,195		9,671		8,195		9,671

Total		80,285		99,338		79,526		98,565

The amount of finance receivables modified as a troubled debt restructuring for the year ended March 31, ~~2018~~2019 was not significant for all classes of finance receivables. Finance receivables modified as troubled debt restructurings for the year ended March 31, ~~2018~~2019 and for which there was a payment default were not significant for all classes of such receivables.

~~TOYOTA MOTOR CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

7. Other receivables:

Other receivables relate to arrangements with certain component manufacturers whereby Toyota procures inventory for these component manufactures and is reimbursed for the related purchases.

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

8. Inventories:

Inventories consist of the following:

   Yen in millions
   March 31,
   2017    2018
Finished goods
   1,552,823    1,683,694
Raw materials
   413,049    435,360
Work in process
   309,387    304,929
Supplies and other
   113,358    115,806




Total
   2,388,617    2,539,789

~~9. Vehicles and equipment on operating leases:~~

~~Vehicles and equipment on operating leases consist of the following:~~


								Yen in millions
								March 31,
								2018			2019
Finished goods									1,683,694			1,746,159
Raw materials									435,360			475,504
Work in process									304,929			324,921
Supplies and other									115,806			109,812

Total									2,539,789			2,656,396

9. Vehicles and equipment on operating leases: Vehicles and equipment on operating leases consist of the following:							9. Vehicles and equipment on operating leases: Vehicles and equipment on operating leases consist of the following:
	Yen in millions							Yen in millions
	March 31,							March 31,
	2017			2018				2018			2019
Vehicles		6,105,527			6,124,699				6,124,699			6,383,788
Equipment		13,096			13,373				13,373			14,499
Less - Deferred income and other		(152,044	)		(203,679	)			(203,679	)		(259,124	)

		5,966,579			5,934,393				5,934,393			6,139,163
Less - Accumulated depreciation		(1,263,774	)		(1,352,840	)			(1,352,840	)		(1,428,779	)
Less - Allowance for credit losses		(18,889	)		(15,013	)			(15,013	)		(13,314	)

Vehicles and equipment on operating leases, net		4,683,916			4,566,540				4,566,540			4,697,070

Rental income from vehicles and equipment on operating leases was ~~¥891,733 million,~~ ¥850,210 million, ¥927,443 million and ~~¥927,443~~¥959,497 million for the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018,~~2019, respectively. Future minimum rentals from vehicles and equipment on operating leases are due in installments as follows:


Years ending March 31,	Yen in millions		Yen in millions
2019		769,926
2020		490,182		805,907
2021		221,216		537,742
2022		46,818		245,145
2023		11,675		50,834
2024				9,860
Thereafter		1,478		1,983

Total minimum future rentals		1,541,295		1,651,471

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

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

10. Allowance for doubtful accounts and credit losses:

The net changes in the allowance for doubtful accounts relating to trade accounts and notes receivable for the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018~~2019 are as follows:


	Yen in millions									Yen in millions
	For the years ended March 31,									For the years ended March 31,
	2016			2017			2018			2017			2018			2019
Allowance for doubtful accounts at beginning of year		50,410			94,853			100,712			94,853			100,712			98,590
Provision for doubtful accounts, net of reversal		69,029			6,519			(74	)		6,519			(74	)		(1,375	)
Write-offs		(20,649	)		(3,839	)		(2,374	)		(3,839	)		(2,374	)		(2,472	)
Other		(3,937	)		3,179			326			3,179			326			(4,370	)

Allowance for doubtful accounts at end of year		94,853			100,712			98,590			100,712			98,590			90,373

“Other” includes the impact of currency translation adjustments for the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018.~~2019.

A portion of the allowance for doubtful accounts balance at March 31, ~~2017~~2018 and ~~2018~~2019 totaling ~~¥50,602~~¥72,665 million and ~~¥72,665~~¥74,003 million, respectively, is attributed to certainnon-current receivable balances which are reported as “Other” assets in the consolidated balance sheets.

The net changes in the allowance for credit losses relating to finance receivables and vehicles and equipment on operating leases for the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018~~2019 are as follows:


	Yen in millions									Yen in millions
	For the years ended March 31,									For the years ended March 31,
	2016			2017			2018			2017			2018			2019
Allowance for credit losses at beginning of year		178,038			167,330			178,101			167,330			178,101			184,087
Provision for credit losses, net of reversal		90,236			92,147			76,143			92,147			76,143			81,440
Charge-offs		(102,948	)		(99,550	)		(96,444	)		(99,550	)		(96,444	)		(91,698	)
Recoveries		22,356			21,757			25,344			21,757			25,344			26,178
Other		(20,352	)		(3,583	)		943			(3,583	)		943			(3,608	)

Allowance for credit losses at end of year		167,330			178,101			184,087			178,101			184,087			196,399

“Other” primarily includes the impact of currency translation adjustments for the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018.~~2019.

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The net changes in the allowance for credit losses above relating to retail receivables portfolio segment, finance lease receivables portfolio segment and wholesale and other dealer loan receivables portfolio segment for the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018~~2019 are as follows:


	Yen in millions									Yen in millions
	For the year ended March 31, 2016									For the year ended March 31, 2017
	Retail			Finance leases			Wholesale and other dealer loans			Retail			Finance leases			Wholesale and other dealer loans
Allowance for credit losses at beginning of year		109,316			29,303			30,053			98,853			24,600			30,828
Provision for credit losses, net of reversal		65,677			1,742			4,962			67,433			1,657			854
Charge-offs		(83,116	)		(3,833	)		(667	)		(78,114	)		(2,007	)		(324	)
Recoveries		18,999			380			230			18,282			194			160
Other		(12,023	)		(2,992	)		(3,750	)		(2,100	)		(482	)		(622	)

Allowance for credit losses at end of year		98,853			24,600			30,828			104,354			23,962			30,896


	Yen in millions
	For the year ended March 31, 2017
	Retail			Finance leases			Wholesale and other dealer loans
Allowance for credit losses at beginning of year		98,853			24,600			30,828
Provision for credit losses, net of reversal		67,433			1,657			854
Charge-offs		(78,114	)		(2,007	)		(324	)
Recoveries		18,282			194			160
Other		(2,100	)		(482	)		(622	)

Allowance for credit losses at end of year		104,354			23,962			30,896


	Yen in millions
	For the year ended March 31, 2018
	Retail			Finance leases			Wholesale and other dealer loans
Allowance for credit losses at beginning of year		104,354			23,962			30,896
Provision for credit losses, net of reversal		52,891			7,115			6,497
Charge-offs		(74,868	)		(2,708	)		(823	)
Recoveries		20,511			315			59
Other		569			133			171

Allowance for credit losses at end of year		103,457			28,817			36,800


	Yen in millions
	For the year ended March 31, 2019
	Retail			Finance leases			Wholesale and other dealer loans
Allowance for credit losses at beginning of year		103,457			28,817			36,800
Provision for credit losses, net of reversal		68,470			710			3,990
Charge-offs		(72,657	)		(2,903	)		(1,111	)
Recoveries		20,485			345			45
Other		(2,161	)		(486	)		(716	)

Allowance for credit losses at end of year		117,594			26,483			39,008

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

11. Affiliated companies and variable interest entities:

Investments in and transactions with affiliated companies -

Summarized financial information for affiliated companies accounted for by the equity method is shown below:


	Yen in millions				Yen in millions
	March 31,				March 31,
	2017		2018		2018		2019
Current assets		11,795,296		12,766,962		12,766,962		13,555,478
Noncurrent assets		11,003,432		12,326,689		12,326,689		12,464,250

Total assets		22,798,728		25,093,651		25,093,651		26,019,728

Current liabilities		7,419,176		8,061,342		8,061,342		8,322,336
Long-term liabilities and noncontrolling interests		5,423,938		5,940,549		5,940,549		6,398,659
Affiliated companies accounted for by the equity method shareholders’ equity		9,955,614		11,091,760		11,091,760		11,298,733

Total liabilities and shareholders’ equity		22,798,728		25,093,651		25,093,651		26,019,728

Toyota’s share of affiliated companies accounted for by the equity method shareholders’ equity		2,845,422		3,162,711		3,162,711		3,313,703

Number of affiliated companies accounted for by the equity method at end of period		54		57		57		63


	Yen in millions						Yen in millions
	For the years ended March 31,						For the years ended March 31,
	2016		2017		2018		2017		2018		2019
Net revenues		31,037,029		30,309,263		30,680,535		30,309,263		30,680,535		32,200,711

Gross profit		3,852,899		3,644,267		4,065,344		3,644,267		4,065,344		4,070,621

Net income attributable to affiliated companies accounted for by the equity method		957,742		1,099,080		1,344,687		1,099,080		1,344,687		857,832

Equity in earnings of affiliated companies attributable to Toyota Motor Corporation		329,099		362,060		470,083		362,060		470,083		360,066

Entities comprising a significant portion of Toyota’s investment in affiliated companies and percentage of ownership are presented below:


	Percentage of ownership						Percentage of ownership
	March 31,						March 31,
Name of affiliated companies	2017			2018			2018			2019
Denso Corporation		24.9	%		24.4	%		24.4	%		24.5	%
Toyota Industries Corporation		24.9	%		24.9	%		24.9	%		24.9	%
Aisin Seiki Co., Ltd.		24.1	%		24.9	%		24.9	%		24.9	%
Toyota Tsusho Corporation		22.0	%		22.0	%		22.0	%		22.0	%
Toyoda Gosei Co., Ltd.		43.0	%		43.0	%		43.0	%		43.0	%

Certain affiliated companies accounted for by the equity method with carrying amounts of ¥2,334,642 million and ¥2,430,251 million at March 31, 2018 and 2019, respectively, were quoted on various established markets at an aggregate value of ¥3,145,940 million and ¥2,513,886 million, respectively. Toyota

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Certain affiliated companies accounted for by the equity method with carrying amounts of ¥2,126,128 million and ¥2,334,642 million at March 31, 2017 and 2018, respectively, were quoted on various established markets at an aggregate value of ¥2,894,106 million and ¥3,145,940 million, respectively. Toyota evaluated its investments in affiliated companies, considering the length of time and the extent to which the quoted market prices have been less than the carrying amounts, the financial condition and near-term prospects of the affiliated companies and Toyota’s ability and intent to retain those investments in the companies for a period of time. Toyota did not recognize any impairment loss for the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018.~~2019.

Account balances and transactions with affiliated companies are presented below:


	Yen in millions				Yen in millions
	March 31,				March 31,
	2017		2018		2018		2019
Trade accounts and notes receivable, and other receivables		289,406		301,335		301,335		362,831
Accounts payable and other payables		691,173		736,023		736,023		845,755


	Yen in millions						Yen in millions
	For the years ended March 31,						For the years ended March 31,
	2016		2017		2018		2017		2018		2019
Net revenues		1,804,493		1,914,318		2,004,632		1,914,318		2,004,632		2,213,236
Purchases		4,359,854		5,357,682		5,749,430		5,357,682		5,749,430		6,431,464

Dividends from affiliated companies accounted for by the equity method for the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018~~2019 were ~~¥186,212 million,~~ ¥180,326 million, ¥196,403 million and ~~¥196,403~~¥204,322 million, respectively.

Toyota does not have any significant related party transactions other than transactions with affiliated companies in the ordinary course of business.

Variable Interest Entities -

Toyota enters into securitization transactions using special-purpose entities, that are considered variable interest entities (“VIEs”). Although the finance receivables and vehicles on operating leases related to securitization transactions have been legally sold to the VIEs, Toyota has both the power to direct the activities of the VIEs that most significantly impact the VIEs’ economic performance and the obligation to absorb losses of the VIEs or the right to receive benefits from the VIEs that could potentially be significant to the VIEs. As a result, Toyota is considered the primary beneficiary of the VIEs and therefore consolidates the VIEs.

Related to securitization transactions, ~~¥2,092,311~~¥1,964,350 million and ~~¥1,964,350~~¥1,872,564 million retail finance receivables, ~~¥557,383~~¥618,787 million and ~~¥618,787~~¥609,694 million vehicles on operating leases, ~~¥151,943~~¥146,828 million and ~~¥146,828~~¥131,804 million restricted cash and ~~¥2,067,221~~¥1,952,973 million and ~~¥1,952,973~~¥1,893,073 million secured debt were included in Toyota’s consolidated financial statements as of March 31, ~~2017~~2018 and ~~2018,~~2019, respectively. The creditors of the VIEs do not have recourse to Toyota’s general credit with the exception of debts guaranteed by Toyota. Risks to which Toyota is exposed including credit, interest rate, and/or prepayment risks are not incremental compared with the situation before Toyota enters into securitization transactions.

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Toyota has variable interests in investment trusts that are VIEs. With respect to some of the investment trusts, Toyota has both the obligation to absorb losses of or the right to receive benefits from the VIEs ~~due mainly~~that could potentially be significant to ~~insufficient equity within~~ the ~~structure but~~VIEs and the power to direct the activities of the VIEs that most significantly impact the VIEs’ economic performance through the asset manager. As a result, Toyota is considered the primary beneficiary of the VIEs and therefore consolidates the VIEs. Related to such investment trusts, ¥2,790,679 million marketable securities and other securities investments were included in Toyota’s consolidated financial statements as of March 31, 2019.

As for other investment trusts, Toyota determined that it was not the primary beneficiary due to lack of the power to direct the activities of the VIEs that most significantly impact the VIEs’ economic performance and, therefore, does not consolidate the VIEs. Investments in the trusts are held at fair value and are included in “Marketable securities and other securities investments” in the accompanying consolidated balance sheets. As of March 31, ~~2018,~~2019, the maximum exposure to loss is limited to the carrying value of its investment in the trusts, which totaled ~~¥446,778~~¥22,001 million, compared to ~~¥539,862~~¥446,778 million as of March 31, ~~2017.~~2018. Toyota does not provide support that is not contractually required to the trusts.

As for VIEs other than those specified above, neither the aggregate size nor Toyota’s involvements are material to Toyota’s consolidated financial statements.

12. Short-term borrowings and long-term debt:

Short-term borrowings at March 31, ~~2017~~2018 and ~~2018~~2019 consist of the following:

   Yen in millions
   March 31,
   2017    2018
Loans, principally from banks, with a weighted-average interest at March 31, 2017 and March 31, 2018 of 1.86% and of 2.14% per annum, respectively
   1,125,324    1,254,444
Commercial paper with a weighted-average interest at March 31, 2017 and March 31, 2018 of 1.08% and of 1.65% per annum, respectively
   3,828,358    3,900,469




   4,953,682    5,154,913


	Yen in millions
	March 31,
	2018		2019
Loans, principally from banks, with a weighted-average interest at March 31, 2018 and March 31, 2019 of 2.14% and of 2.11% per annum, respectively		1,254,444		1,468,430
Commercial paper with a weighted-average interest at March 31, 2018 and March 31, 2019 of 1.65% and of 2.28% per annum, respectively		3,900,469		3,876,544

		5,154,913		5,344,973

As of March 31, ~~2018,~~2019, Toyota has unused short-term lines of credit amounting to ~~¥1,712,315~~¥1,892,166 million of which ~~¥245,797~~¥274,058 million related to commercial paper programs. Under these programs, Toyota is authorized to obtain short-term financing at prevailing interest rates for periods not in excess of 360 days.

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Long-term debt at March 31, ~~2017~~2018 and ~~2018~~2019 comprises the following:

   Yen in millions
   March 31,
   2017 2018
Unsecured loans, representing obligations principally to banks, due 2017 to 2036 in 2017 and due 2018 to 2036 in 2018 with a weighted-average interest at March 31, 2017 and March 31, 2018 of 2.44% and of 2.70% per annum, respectively
   3,318,865 3,215,309
Secured loans, representing obligations principally to finance receivables securitization due 2017 to 2030 in 2017 and due 2018 to 2030 in 2018 with a weighted-average interest at March 31, 2017 and March 31, 2018 of 1.43% and of 1.99% per annum, respectively
   2,080,362 1,963,057
Medium-term notes of consolidated subsidiaries, due 2017 to 2046 in 2017 and due 2018 to 2046 in 2018 with a weighted-average interest at March 31, 2017 and March 31, 2018 of 2.12% and of 2.18% per annum, respectively
   6,923,511 6,994,629
Unsecured notes of parent company, due 2017 to 2036 in 2017 and due 2018 to 2037 in 2018 with a weighted-average interest at March 31, 2017 and March 31, 2018 of 1.35% and of 0.94% per annum, respectively
   370,000 370,000
Unsecured notes of consolidated subsidiaries, due 2017 to 2032 in 2017 and due 2018 to 2031 in 2018 with a weighted-average interest at March 31, 2017 and March 31, 2018 of 2.17% and of 2.20% per annum, respectively
   1,430,022 1,569,517
Secured notes of consolidated subsidiaries, due 2017 to 2020 in 2017 and due 2018 to 2021 in 2018 with a weighted-average interest at March 31, 2017 and March 31, 2018 of 8.14% and of 7.90% per annum, respectively
   57,036 59,513
Long-term capital lease obligations, due 2017 to 2035 in 2017 and due 2018 to 2035 in 2018 with interest ranging from 0.37% to 14.73% per annum in 2017 and from 0.37% to 14.73% per annum in 2018
   22,249 20,626


   14,202,045 14,192,651
Less - Current portion due within one year
   (4,290,449 ) (4,186,277 )


   9,911,596 10,006,374


	Yen in millions
	March 31,
	2018			2019
Unsecured loans, representing obligations principally to banks, due 2018 to 2036 in 2018 and due 2019 to 2041 in 2019 with a weighted-average interest at March 31, 2018 and March 31, 2019 of 2.70% and of 2.78% per annum, respectively		3,215,309			3,441,336
Secured loans, representing obligations principally to finance receivables securitization due 2018 to 2030 in 2018 and due 2019 to 2026 in 2019 with a weighted-average interest at March 31, 2018 and March 31, 2019 of 1.99% and of 2.47% per annum, respectively		1,963,057			1,840,204
Medium-term notes of consolidated subsidiaries, due 2018 to 2046 in 2018 and due 2019 to 2048 in 2019 with a weighted-average interest at March 31, 2018 and March 31, 2019 of 2.18% and of 2.46% per annum, respectively		6,994,629			7,372,550
Unsecured notes of parent company, due 2018 to 2037 in 2018 and due 2019 to 2037 in 2019 with a weighted-average interest at March 31, 2018 and March 31, 2019 of 0.94% and of 1.84% per annum, respectively		370,000			511,980
Unsecured notes of consolidated subsidiaries, due 2018 to 2031 in 2018 and due 2019 to 2031 in 2019 with a weighted-average interest at March 31, 2018 and March 31, 2019 of 2.20% and of 2.12% per annum, respectively		1,569,517			1,566,994
Secured notes of consolidated subsidiaries, due 2018 to 2021 in 2018 and due 2019 to 2022 in 2019 with a weighted-average interest at March 31, 2018 and March 31, 2019 of 7.90% and of 7.78% per annum, respectively		59,513			53,120
Long-term capital lease obligations, due 2018 to 2035 in 2018 and due 2019 to 2035 in 2019 with interest ranging from 0.37% to 14.73% per annum in 2018 and from 0.12% to 14.73% per annum in 2019		20,626			19,021

		14,192,651			14,805,205
Less - Current portion due within one year		(4,186,277	)		(4,254,260	)

		10,006,374			10,550,945

As of March 31, ~~2018,~~2019, approximately 48%, 11%, ~~10%~~11%, 9%, 6%5% and 16% of long-term debt are denominated in U.S. dollars, euros, Japanese yen, ~~euros,~~ Australian dollars, Canadian dollars and other currencies, respectively.

As of March 31, ~~2018,~~2019, property, plant and equipment with a book value of ~~¥658,675~~¥641,465 million and other assets aggregating ~~¥2,052,752~~¥1,936,680 million were pledged as collateral mainly for certain debt obligations of subsidiaries. These other assets principally consist of securitized finance receivables.

The aggregate amounts of annual maturities of long-term debt during the next five years are as follows:


Years ending March 31,	Yen in millions		Yen in millions
2019		4,186,277
2020		2,848,360		4,254,260
2021		2,398,498		3,057,026
2022		2,236,208		3,033,332
2023		1,612,872		2,221,041
2024				1,123,524

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Standard agreements with certain banks include provisions that collateral (including sums on deposit with such banks) or guarantees will be furnished upon the banks’ request and that any collateral furnished, pursuant to such agreements or otherwise, will be applicable to all present or future indebtedness to such banks. During the year ended March 31, ~~2018,~~2019, Toyota has not received any significant requests from these banks.

As of March 31, ~~2018,~~2019, Toyota has unused long-term lines of credit amounting to ~~¥6,728,922~~¥6,457,394 million.

Interest expense during the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018~~2019 were ~~¥377,310 million,~~ ¥352,691 million, ¥415,094 million and ~~¥415,094~~¥499,871 million, respectively. Interest expense related to the financial services business is included in “Cost of financing operations” in the accompanying consolidated statements of income.

13. Product warranties and recalls and other safety measures:

Toyota provides product warranties for certain defects mainly resulting from manufacturing based on warranty contracts with its customers at the time of sale of products. Toyota accrues estimated warranty costs to be incurred in the future in accordance with the warranty contracts. In addition to product warranties, Toyota initiates recalls and other safety measures to repair or to replace parts which might be expected to fail from products safety perspectives or customer satisfaction standpoints. Toyota accrues for costs of recalls and other safety measures based on the amount estimated from historical experience.

Liabilities for product warranties and liabilities for recalls and other safety measures have been combined into a single table showing an aggregate liability for quality assurances due to the fact that both are liabilities for costs to repair or replace defects of vehicles and the amounts incurred for recalls and other safety measures may affect the amounts incurred for product warranties and vice versa.

Liabilities for quality assurances are included in “Accrued expenses” in the consolidated balance sheets.

The net changes in liabilities for quality assurances above for the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018~~2019 consist of the following:


	Yen in millions									Yen in millions
	For the years ended March 31,									For the years ended March 31,
	2016			2017			2018			2017			2018			2019
Liabilities for quality assurances at beginning of year		1,328,916			1,403,764			1,696,938			1,403,764			1,696,938			1,702,312
Payments made during year		(501,073	)		(604,853	)		(586,943	)		(604,853	)		(586,943	)		(489,461	)
Provision for quality assurances		636,719			919,086			649,377			919,086			649,377			565,012
Changes relating topre-existing quality assurances		(39,225	)		(24,147	)		(56,769	)		(24,147	)		(56,769	)		(1,411	)
Other		(21,573	)		3,088			(291	)		3,088			(291	)		(7,177	)

Liabilities for quality assurances at end of year		1,403,764			1,696,938			1,702,312			1,696,938			1,702,312			1,769,275

“Other” primarily includes the impact of currency translation adjustments and the impact of consolidation and deconsolidation of certain entities due to changes in ownership interest.

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The table below shows the net changes in liabilities for recalls and other safety measures which are comprised in liabilities for quality assurances above for the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018.~~2019.


	Yen in millions									Yen in millions
	For the years ended March 31,									For the years ended March 31,
	2016			2017			2018			2017			2018			2019
Liabilities for recalls and other safety measures at beginning of year		755,050			925,475			1,275,200			925,475			1,275,200			1,275,256
Payments made during year		(347,861	)		(444,416	)		(456,177	)		(444,416	)		(456,177	)		(396,971	)
Provision for recalls and other safety measures		524,100			794,009			454,391			794,009			454,391			428,613
Other		(5,814	)		132			1,842			132			1,842			(4,589	)

Liabilities for recalls and other safety measures at end of year		925,475			1,275,200			1,275,256			1,275,200			1,275,256			1,302,309

14. Other payables:

Other payables are mainly related to purchases of property, plant and equipment andnon-manufacturing purchases.

15. Income taxes:

The components of income before income taxes comprise the following:

   Yen in millions
   For the years ended March 31,
   2016    2017    2018
Income before income taxes:

Parent company and domestic subsidiaries
   1,834,413    1,423,208    1,880,971
Foreign subsidiaries
   1,148,968    770,617    739,458






   2,983,381    2,193,825    2,620,429

~~The provision for income taxes consists of the following:~~

   Yen in millions
   For the years ended March 31,
   2016 2017 2018
Current income tax expense:

Parent company and domestic subsidiaries
   591,868 435,560 565,998
Foreign subsidiaries
   253,512 246,639 176,369


Total current
   845,380 682,199 742,367


Deferred income tax expense (benefit):

Parent company and domestic subsidiaries
   (40,934 ) (21,756 ) 45,097
Foreign subsidiaries
   73,823 (31,543 ) (283,058 )


Total deferred
   32,889 (53,299 ) (237,961 )


Total provision
   878,269 628,900 504,406

~~TOYOTA MOTOR CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~


	Yen in millions
	For the years ended March 31,
	2017			2018			2019
Income before income taxes:
Parent company and domestic subsidiaries		1,423,208			1,880,971			1,552,975
Foreign subsidiaries		770,617			739,458			732,490

		2,193,825			2,620,429			2,285,465

The provision for income taxes consists of the following:
	Yen in millions
	For the years ended March 31,
	2017			2018			2019
Current income tax expense:
Parent company and domestic subsidiaries		435,560			565,998			599,521
Foreign subsidiaries		246,639			176,369			147,017

Total current		682,199			742,367			746,538

Deferred income tax expense (benefit):
Parent company and domestic subsidiaries		(21,756	)		45,097			(110,608	)
Foreign subsidiaries		(31,543	)		(283,058	)		24,014

Total deferred		(53,299	)		(237,961	)		(86,594	)

Total provision		628,900			504,406			659,944

Net deferred liabilities as of March 31, 2018 decreased by ¥218,323 million and provision for income taxes for the year ended March 31, 2018 decreased by ¥249,694 million, respectively, resulting from the Tax Cuts and Jobs Act of 2017 of the United States.

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Toyota is subject to a number of different income taxes which, in the aggregate, indicate a statutory rate in Japan of approximately ~~32.9%~~31.1%, 31.1% and ~~31.1%~~30.9% for the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018,~~2019, respectively. The statutory tax rates in effect for the year in which the temporary differences are expected to reverse are used to calculate the tax effects of temporary differences which are expected to reverse in the future years. Reconciliation of the differences between the statutory tax rate and the effective income tax rate is as follows:


	For the years ended March 31,										For the years ended March 31,
	2016			2017			2018				2017			2018			2019
Statutory tax rate		32.9	%		31.1	%		31.1	%			31.1	%		31.1	%		30.9	%
Increase (reduction) in taxes resulting from:
Non-deductible expenses		0.3			0.4			0.4		��		0.4			0.4			0.4
Deferred tax liabilities on undistributed earnings of foreign subsidiaries		1.0			1.3			1.1				1.3			1.1			1.2
Deferred tax liabilities on undistributed earnings of affiliated companies accounted for by the equity method		2.4			3.3			3.8				3.3			3.8			3.1
Valuation allowance		(0.4	)		(0.6	)		(2.0	)			(0.6	)		(2.0	)		0.2
Tax credits		(4.7	)		(4.8	)		(4.3	)			(4.8	)		(4.3	)		(5.3	)
The difference between the statutory tax rate in Japan and that of foreign subsidiaries		(1.3	)		(1.9	)		(1.5	)			(1.9	)		(1.5	)		(2.3	)
Unrecognized tax benefits adjustments		0.2			0.4			0.2				0.4			0.2			(0.1	)
Revision to reduce deferred tax assets and liabilities at the fiscalyear-end due to changes in tax rates		(0.5	)		—			—				—			—			—
Effect of the Tax Cuts and Jobs Act of 2017 of the United States		—			—			(9.5	)			—			(9.5	)		—
Other		(0.5	)		(0.5	)		(0.1	)			(0.5	)		(0.1	)		0.8

Effective income tax rate		29.4	%		28.7	%		19.2	%			28.7	%		19.2	%		28.9	%

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Significant components of deferred tax assets and liabilities are as follows:


	Yen in millions						Yen in millions
	March 31,						March 31,
	2017			2018			2018			2019
Deferred tax assets
Accrued pension and severance costs		219,465			199,366			199,366			256,478
Accrued expenses and liabilities for quality assurances		644,936			609,257			609,257			664,950
Other accrued employees’ compensation		114,752			112,316			112,316			121,024
Operating loss carryforwards for tax purposes		76,317			203,897			203,897			364,220
Allowance for doubtful accounts and credit losses		82,916			63,223			63,223			69,049
Property, plant and equipment and other assets		234,372			249,320			249,320			266,866
Other		335,992			348,852			348,852			338,744

Gross deferred tax assets		1,708,750			1,786,231			1,786,231			2,081,331
Less - Valuation allowance		(146,623	)		(93,814	)		(93,814	)		(93,599	)

Total deferred tax assets		1,562,127			1,692,417			1,692,417			1,987,732

Deferred tax liabilities
Unrealized gains on securities, net		(692,962	)		(635,292	)		(635,292	)		(493,052	)
Undistributed earnings of foreign subsidiaries		(28,544	)		(29,967	)		(29,967	)		(25,972	)
Undistributed earnings of affiliated companies accounted for by the equity method		(709,094	)		(794,485	)		(794,485	)		(836,860	)
Basis difference of acquired assets		(31,861	)		(30,768	)		(30,768	)		(29,116	)
Lease transactions		(973,000	)		(751,292	)		(751,292	)		(946,128	)
Other		(46,407	)		(74,658	)		(74,658	)		(169,583	)

Gross deferred tax liabilities		(2,481,868	)		(2,316,462	)		(2,316,462	)		(2,500,711	)

Net deferred tax liability		(919,741	)		(624,045	)		(624,045	)		(512,979	)

The deferred tax assets and liabilities above that comprise the net deferred tax liability are included in the consolidated balance sheets as follows:


	Yen in millions						Yen in millions
	March 31,						March 31,
	2017			2018			2018			2019
Deferred tax assets
Investments and other assets - Other		503,985			494,120			494,120			501,872
Deferred tax liabilities
Deferred income taxes (Long-term liabilities)		(1,423,726	)		(1,118,165	)		(1,118,165	)		(1,014,851	)

Net deferred tax liability		(919,741	)		(624,045	)		(624,045	)		(512,979	)

The factors used to assess the likelihood of realization of the deferred tax assets are the future reversal of existing taxable temporary differences, the future taxable income and available tax planning strategies that are prudent and feasible. All available evidence, both positive and negative, is considered to determine whether, based on the weight of that evidence, a valuation allowance is needed for deferred tax assets which are notmore-likely-than-not to be realized.

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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

Operating loss carryforwards for tax purposes as of March 31, ~~2018~~2019 in Japan and foreign countries were ~~¥26,712~~¥23,548 million and ~~¥866,392~~¥1,658,779 million, respectively, and are available as an offset against future taxable income. The majority of these carryforwards in Japan and foreign countries expire in years ~~2019~~2020 to ~~2027~~2029 and expire in years ~~2019~~2020 to ~~2038,~~2039, respectively. Tax credit carryforwards as of March 31, ~~2018~~2019 in Japan and foreign countries were ~~¥2,847~~¥3,296 million and ~~¥55,939~~¥65,796 million, respectively, and the majority of these carryforwards in Japan and foreign countries expire in years ~~2019~~2020 to ~~2021~~2022 and expire in years ~~2019~~2020 to ~~2038,~~2039, respectively.

The valuation allowance mainly relates to deferred tax assets of operating loss and foreign tax credit carryforwards for tax purposes that are notmore-likely-than-not to be realized. The net changes in the total valuation allowance for deferred tax assets for the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018~~2019 consist of the following:


	Yen in millions									Yen in millions
	For the years ended March 31,									For the years ended March 31,
	2016			2017			2018			2017			2018			2019
Valuation allowance at beginning of year		169,811			151,665			146,623			151,665			146,623			93,814
Additions		33,243			27,147			16,106			27,147			16,106			13,967
Deductions		(43,723	)		(37,891	)		(74,435	)		(37,891	)		(74,435	)		(9,801	)
Other		(7,666	)		5,702			5,520			5,702			5,520			(4,381	)

Valuation allowance at end of year		151,665			146,623			93,814			146,623			93,814			93,599

“Other” includes the impact of consolidation and deconsolidation of certain entities due to changes in ownership interest and currency translation adjustments during the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018.~~2019.

Because management intends to reinvest undistributed earnings of foreign subsidiaries to the extent not expected to be remitted in the foreseeable future, management has made no provision for income taxes on those undistributed earnings aggregating ~~¥3,623,657~~¥3,850,458 million as of March 31, ~~2018.~~2019. Toyota estimates an additional tax provision of ~~¥139,287~~¥150,714 million would be required if the full amount of those undistributed earnings were remitted.

A summary of the gross unrecognized tax benefits changes for the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018~~2019 is as follows:


	Yen in millions									Yen in millions
	For the years ended March 31,									For the years ended March 31,
	2016			2017			2018			2017			2018			2019
Balance at beginning of year		13,644			19,250			21,553			19,250			21,553			21,564
Additions based on tax positions related to the current year		1,001			8,187			612			8,187			612			1,212
Additions for tax positions of prior years		6,378			6,076			13,954			6,076			13,954			1,304
Reductions for tax positions of prior years		(77	)		(5,593	)		(13,217	)		(5,593	)		(13,217	)		(819	)
Reductions for tax positions related to lapse of statute of limitations		(7	)		(9	)		—			(9	)		—			—
Reductions for settlements		(427	)		(6,317	)		(26	)		(6,317	)		(26	)		(6,696	)
Other		(1,262	)		(41	)		(1,312	)		(41	)		(1,312	)		703

Balance at end of year		19,250			21,553			21,564			21,553			21,564			17,268

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was not material at March 31, ~~2016,~~ 2017, 2018 and ~~2018,~~2019, respectively. Toyota does not believe it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within the next twelve months.

Interest and penalties related to income tax liabilities are included in “Other income (loss), net”. The amounts of interest and penalties accrued as of and recognized for the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018,~~2019, were not material.

Toyota remains subject to income tax examination for the tax returns related to the years beginning on and after April 1, ~~2011~~2012 and April 1, 2002, with various tax jurisdictions in Japan and foreign countries, respectively.

16. Class Shares:

TMC issued First Series Model AA Class Shares (the “Model AA Class Shares”) on July 24, 2015. Presented below is additional information regarding the Model AA Class Shares:


Total number of shares issued	:	47,100,000 shares

Issue price	:	10,598 yen per share

Purchase price	:	10,121.09 yen per share

Voting rights	:	Model AA Class Shares shall have voting rights. The number of shares constituting one unit with respect to Model AA Class Shares shall be 100.

Restrictions on transfer	:	Model AA Class Shares shall have restrictions on transfer.

Dividends	:	(1) If the record date falls in the fiscal year ending on March 31, ~~2016:~~2016 : 0.5% of the issue price
		(2) If the record date falls in the fiscal year ending on March 31, 2017 through March 31, ~~2020:~~2020 : the annual dividend rate for the previous fiscal year plus 0.5% of the issue price
		(3) If the record date falls in the fiscal year ending on March 31, 2021 or ~~later:~~later : 2.5% of the issue price

Shareholder’s right	:	(1) Shareholder’s conversion right into Common Shares Shareholders of the Model AA Class Shares may demand TMC to acquire all or a part of their Model AA Class Shares in exchange for Common Shares on the first business day of April and October of every year, starting October 1, 2020.
		(2) Shareholder’s cash put option Shareholders of the Model AA Class Shares may demand TMC to acquire all or a part of their Model AA Class Shares in exchange for cash on the last business day of March, June, September and December of each year, starting on September 1, 2020.

TMC’s right	:	TMC may acquire, on or after April 2, 2021, all of the outstanding Model AA Class Shares in exchange for cash.

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The Model AA Class Shares will not be treated as shareholders’ equity because the shareholders of the Model AA Class Shares will have cash put options and hence, the Model AA Class Shares will be reported as mezzanine equity, a separate line item between liabilities and shareholders’ equity.

Unpaid dividends included in mezzanine equity as of March 31, ~~2017~~2018 and ~~2018~~2019 were ~~¥2,473~~¥3,721 million and ~~¥3,721~~¥4,969 million, respectively.

The difference between the issuance amount and initial carrying amount of the mezzanine equity is adjusted for accretion of the mezzanine equity over a period of time from the issuance date until the Class Shares can first be redeemed.

17. Shareholders’ equity:

Changes in the number of shares of common stock issued have resulted from the following:


	For the years ended March 31,								For the years ended March 31,
	2016			2017			2018		2017			2018		2019
Common stock issued
Balance at beginning of year		3,417,997,492			3,337,997,492			3,262,997,492		3,337,997,492			3,262,997,492		3,262,997,492
Issuance during the year		—			—			—		—			—		—
Purchase and retirement		(80,000,000	)		(75,000,000	)		—		(75,000,000	)		—		—

Balance at end of year		3,337,997,492			3,262,997,492			3,262,997,492		3,262,997,492			3,262,997,492		3,262,997,492

Annual dividends per common share were ¥210, ¥220 and ¥220 for the years ended March 31, 2017, 2018 and 2019, respectively.

The Companies Act provides that an amount equal to 10% of distributions from surplus paid by the parent company and its Japanese subsidiaries be appropriated as a capital reserve or a retained earnings reserve. No further appropriations are required when the total amount of the capital reserve and the retained earnings reserve reaches 25% of stated capital.

The retained earnings reserve included in retained earnings as of March 31, ~~2017~~2018 and ~~2018~~2019 were ~~¥190,227~~¥194,890 million and ~~¥194,890~~¥198,605 million, respectively. The Companies Act provides that the retained earnings reserve of the parent company and its Japanese subsidiaries is restricted and unable to be used for dividend payments, and is excluded from the calculation of the profit available for dividend.

The amounts of statutory retained earnings of the parent company available for dividend payments to shareholders were ~~¥8,470,887~~¥9,256,045 million and ~~¥9,256,045~~¥9,958,581 million as of March 31, ~~2017~~2018 and ~~2018,~~2019, respectively. In accordance with customary practice in Japan, the distributions from surplus are not accrued in the financial statements for the corresponding period, but are recorded in the subsequent accounting period after shareholders’ approval has been obtained. Retained earnings at March 31, ~~2018~~2019 include amounts representingyear-end cash dividends of ~~¥349,190~~¥339,892 million, ¥120 per common share, which were resolved at the Meeting of the Board of Directors held on May ~~9, 2018.~~8, 2019.

Retained earnings at March 31, ~~2018~~2019 include ~~¥2,429,170~~¥2,771,434 million relating to equity in undistributed earnings of affiliated companies accounted for by the equity method.

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The repurchase, reissuance and retirement of treasury stock for the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018~~2019 are as follows:

~~For the year ended March 31, 2016~~

~~Repurchase of treasury stock~~

~~Reason for repurchasing treasury stock -~~

~~The repurchase was made to avoid the dilution of common share value as a result of the issuance of the First Series Model AA Class Shares.~~

~~Details of matters relating to repurchase -~~


~~Number of common shares repurchased~~		~~47,100,000 shares~~
~~Total purchase price for repurchase of shares~~		~~¥349,935 million~~

~~Reason for repurchasing treasury stock -~~

~~The repurchase was made to return capital to shareholders in addition to promoting capital efficiency and agile capital policy in view of the business environment.~~

~~Details of matters relating to repurchase -~~


~~Number of common shares repurchased~~		~~62,942,900 shares~~
~~Total purchase price for repurchase of shares~~		~~¥432,692 million~~

~~Retirement of treasury stock~~

~~Reason for retiring treasury stock -~~

~~The retirement was made to relieve concerns regarding the dilution of common share value due to reissuanceof treasury stock in the future.~~

~~Details of matters relating to retirement -~~


~~Number of common shares retired~~		~~80,000,000 shares~~

~~The amount on retirement of treasury stock was treated as a reduction in additionalpaid-in~~ ~~capital and retained earnings. As a result, treasury stock, additionalpaid-in~~ ~~capital and retained earnings decreased by ¥400,537 million, ¥1,048 million and ¥399,489 million, respectively.~~

For the year ended March 31, 2017

Repurchase of treasury stock

Reason for repurchasing treasury stock -

The repurchase was made to return capital to shareholders in addition to promoting capital efficiency and agile capital policy in view of the business environment.

~~TOYOTA MOTOR CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

Details of matters relating to repurchase -


Number of common shares repurchased		116,555,700 shares
Total purchase price for repurchase of shares		¥699,986 million

Reissuance of treasury stock

Reason for reissuing treasury stock and details of matters relating to reissuance -

On August 1, 2016, the parent company implemented share exchange as a result of which the parent company became a wholly owning parent company and Daihatsu Motor Co., Ltd. (“Daihatsu”) became a wholly owned subsidiary, and the parent company acquired additional shares of Daihatsu. As a result of this share exchange, the parent company issued 52,856,096 shares of treasury stock, treasury stock decreased by ¥283,561 million and gains on disposal of treasury stock occurred in the amount of ¥27,972 million. As a result, additionalpaid-in capital increased by ¥27,972 million. As a result of acquiring additional shares of Daihatsu, additionalpaid-in capital, noncontrolling interests and accumulated other comprehensive income (loss) decreased by ¥53,742 million, ¥255,565 million and ¥2,226 million, respectively.

Retirement of treasury stock

Reason for retiring treasury stock -

The retirement was made to relieve concerns regarding the dilution of common share value due to ~~reissuanceof~~reissuance of treasury stock in the future.

Details of matters relating to retirement -


Number of common shares retired		75,000,000 shares

The amount on retirement of treasury stock was treated as a reduction in additionalpaid-in capital and retained earnings. As a result, treasury stock, additionalpaid-in capital and retained earnings decreased by ¥407,383 million, ¥27,374 million and ¥380,009 million, respectively.

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the year ended March 31, 2018

Repurchase of treasury stock

Reason for repurchasing treasury stock -

The repurchase was made to return capital to shareholders in addition to promoting capital efficiency and agile capital policy in view of the business environment.

Details of matters relating to repurchase -


Number of common shares repurchased		73,708,400 shares
Total purchase price for repurchase of shares		¥499,989 million

Reissuance of treasury stock

Reason for reissuing treasury stock -

On August 4, 2017, the parent company and Mazda Motor Corporation (Mazda) signed an agreement to enter a business and capital alliance, with the aim of further strengthening their lasting partnership. The parent company acquired common stock newly issued by Mazda through a third-party allotment. Mazda acquired the

~~TOYOTA MOTOR CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

parent company’s shares that were equivalent in value to the Mazda shares through a disposition of treasury stock involving a third-party allotment implemented by the parent company.

Details of matters relating to reissuance -


Number of common shares reissued		8,293,300 shares
Amount of proceeds		¥50,000 million

For the year ended March 31, 2019

Repurchase of treasury stock

Reason for repurchasing treasury stock -

The repurchase was made to return capital to shareholders in addition to promoting capital efficiency and agile capital policy in view of the business environment.

Details of matters relating to repurchase -


Number of common shares repurchased		77,622,700 shares
Total purchase price for repurchase of shares		¥549,986 million

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

18. Accumulated other comprehensive income:

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


	Yen in millions												Yen in millions
	Foreign currency translation adjustments			Unrealized gains (losses) on securities			Pension liability adjustments			Accumulated other comprehensive income (loss)
Balance at March 31, 2015		(136,090	)		1,727,565			(113,930	)		1,477,545
Other comprehensive income (loss) before reclassifications, net of taxes of ¥10,719 million, ¥130,092 million, ¥93,210 million and ¥234,021 million		(423,404	)		(291,681	)		(214,600	)		(929,685	)
Reclassifications, net of taxes of ¥— million, ¥9,832 million, ¥(3,318) million and ¥6,514 million		28,052			(20,511	)		5,419			12,960

Other comprehensive income (loss), net of tax		(395,352	)		(312,192	)		(209,181	)		(916,725	)
Less - Other comprehensive income attributable to noncontrolling interests		32,387			9,572			7,989			49,948
													Foreign currency translation adjustments			Unrealized gains (losses) on securities			Pension liability adjustments			Accumulated other comprehensive income (loss)
Balance at March 31, 2016		(499,055	)		1,424,945			(315,122	)		610,768			(499,055	)		1,424,945			(315,122	)		610,768
Other comprehensive income (loss) before reclassifications, net of taxes of ¥9,240 million, ¥(9,048) million, ¥(40,099) million and ¥(39,907) million		(57,926	)		41,134			82,939			66,147			(57,926	)		41,134			82,939			66,147
Reclassifications, net of taxes of ¥— million, ¥23,275 million, ¥(5,255) million and ¥18,020 million		—			(36,855	)		10,373			(26,482	)		—			(36,855	)		10,373			(26,482	)

Other comprehensive income (loss), net of tax		(57,926	)		4,279			93,312			39,665			(57,926	)		4,279			93,312			39,665
Less - Other comprehensive income attributable to noncontrolling interests		5,499			(12,281	)		(503	)		(7,285	)		5,499			(12,281	)		(503	)		(7,285	)
Equity transaction with noncontrolling interests and other		(8,626	)		9,060			(2,660	)		(2,226	)		(8,626	)		9,060			(2,660	)		(2,226	)

Balance at March 31, 2017		(560,108	)		1,426,003			(224,973	)		640,922			(560,108	)		1,426,003			(224,973	)		640,922
Other comprehensive income (loss) before reclassifications, net of taxes of ¥(3,624) million, ¥38,539 million, ¥(7,568) million and ¥27,347 million		(113,942	)		(72,501	)		15,814			(170,629	)		(113,942	)		(72,501	)		15,814			(170,629	)
Reclassifications, net of taxes of ¥— million, ¥9,729 million, ¥(2,500) million and ¥7,229 million		(6,664	)		(22,058	)		6,501			(22,221	)		(6,664	)		(22,058	)		6,501			(22,221	)

Other comprehensive income (loss), net of tax		(120,606	)		(94,559	)		22,315			(192,850	)		(120,606	)		(94,559	)		22,315			(192,850	)
Less - Other comprehensive income attributable to noncontrolling interests		1,629			(2,022	)		(580	)		(973	)		1,629			(2,022	)		(580	)		(973	)
Equity transaction with noncontrolling interests and other		—			162			(11,562	)		(11,400	)		—			162			(11,562	)		(11,400	)

Balance at March 31, 2018		(679,085	)		1,329,584			(214,800	)		435,699			(679,085	)		1,329,584			(214,800	)		435,699
Effect of change in accounting policy														105			(1,309,725	)		—			(1,309,620	)
Other comprehensive income (loss) before reclassifications, net of taxes of ¥8,703 million, ¥3,382 million, ¥25,795 million and ¥37,880 million														25,639			(6,139	)		(62,288	)		(42,788	)
Reclassifications, net of taxes of ¥— million, ¥6,963 million, ¥(2,892) million and ¥4,071 million														1,377			(15,026	)		7,452			(6,197	)

Other comprehensive income (loss), net of tax														27,016			(21,165	)		(54,836	)		(48,985	)
Less - Other comprehensive income attributable to noncontrolling interests														2,432			54			3,770			6,256

Balance at March 31, 2019														(649,532	)		(1,252	)		(265,866	)		(916,650	)

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Reclassifications for the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018~~2019 consist of the following:


	Yen in millions										Yen in millions
	For the years ended March 31,									Affected line items in the consolidated statements of income	For the years ended March 31,									Affected line items in the consolidated statements of income
	2016			2017			2018				2017			2018			2019
Foreign currency translation adjustments:
		28,052			—			(6,664	)	Other income (loss), net		—			(6,664	)		1,377		Other income (loss), net

		28,052			—			(6,664	)	Income before income taxes and equity in earnings of affiliated companies		—			(6,664	)		1,377		Income before income taxes and equity in earnings of affiliated companies

		28,052			—			(6,664	)	Net income		—			(6,664	)		1,377		Net income

Unrealized gains (losses) on securities:
		(779	)		(24,553	)		(4,567	)	Financing operations		(24,553	)		(4,567	)		1,243		Financing operations
		(27,275	)		(3,572	)		(25,247	)	Foreign exchange gain (loss), net		(3,572	)		(25,247	)		(22,374	)	Foreign exchange gain, net
		(6,185	)		(31,685	)		(1,993	)	Other income (loss), net		(31,685	)		(1,993	)		(827	)	Other income (loss), net

		(34,239	)		(59,810	)		(31,807	)	Income before income taxes and equity in earnings of affiliated companies		(59,810	)		(31,807	)		(21,958	)	Income before income taxes and equity in earnings of affiliated companies
		9,832			23,275			9,729		Provision for income taxes		23,275			9,729			6,963		Provision for income taxes
		3,896			(320	)		20		Equity in earnings of affiliated companies		(320	)		20			(31	)	Equity in earnings of affiliated companies

		(20,511	)		(36,855	)		(22,058	)	Net income		(36,855	)		(22,058	)		(15,026	)	Net income

Pension liability adjustments:
Recognized net actuarial loss		12,971			19,432			12,914		*1		19,432			12,914			14,029		*1
Amortization of prior service costs		(4,234	)		(3,804	)		(3,913	)	*1		(3,804	)		(3,913	)		(3,685	)	*1

		8,737			15,628			9,001		Income before income taxes and equity in earnings of affiliated companies		15,628			9,001			10,344		Income before income taxes and equity in earnings of affiliated companies
		(3,318	)		(5,255	)		(2,500	)	Provision for income taxes		(5,255	)		(2,500	)		(2,892	)	Provision for income taxes

		5,419			10,373			6,501		Net income		10,373			6,501			7,452		Net income

Total reclassifications, net of tax		12,960			(26,482	)		(22,221	)			(26,482	)		(22,221	)		(6,197	)

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

*1:	These components are included in the computation of net periodic pension cost. See note 20 to the consolidated financial statements for additional information.

19. Stock-based compensation:

In June 1997, the parent company’s shareholders approved a stock option plan for board members. In June 2001, the shareholders approved an amendment of the plan to include both board members and key employees. Each year until June 2010, since the plans’ inception, the shareholders have approved the authorization for the grant of options for the purchase of the parent company’s common stock. Authorized shares for each year that remain ungranted are unavailable for grant in future years. Stock options granted in and after August 2006 have terms of 8 years and an exercise price equal to 1.025 times the closing price of Toyota’s common stock on the date of grant. These options generally vest 2 years from the date of grant.

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

There were no stock-based compensation expenses for stock options as selling, general and administrative expenses for the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018,~~2019, respectively.

The following table summarizes Toyota’s stock option activity:


				Yen				Yen in millions					Yen				Yen in millions
	Number of shares			Weighted- average exercise price		Weighted- average remaining contractual life in years		Aggregate intrinsic value
Options outstanding at March 31, 2015		3,503,500			4,632		2.05		13,143
Granted		—			—
Exercised		(936,400	)		5,049
Canceled		(473,600	)		6,917
										Number of shares			Weighted- average exercise price		Weighted- average remaining contractual life in years		Aggregate intrinsic value
Options outstanding at March 31, 2016		2,093,500			3,858		1.56		4,384		2,093,500			3,858		1.56		4,384
Granted		—			—						—			—
Exercised		(785,600	)		4,006						(785,600	)		4,006
Canceled		(115,600	)		4,682						(115,600	)		4,682

Options outstanding at March 31, 2017		1,192,300			3,682		0.80		2,813		1,192,300			3,682		0.80		2,813

Granted		—			—						—			—
Exercised		(643,800	)		3,726						(643,800	)		3,726
Canceled		(264,900	)		4,154						(264,900	)		4,154

Options outstanding at March 31, 2018		283,600			3,153		0.33		1,041		283,600			3,153		0.33		1,041

Options exercisable at March 31, 2016		2,093,500			3,858		1.56		4,384
Granted											—			—
Exercised											(155,100	)		3,156
Canceled											(128,500	)		3,153

Options outstanding at March 31, 2019											—			—		—		—

Options exercisable at March 31, 2017		1,192,300			3,682		0.80		2,813		1,192,300			3,682		0.80		2,813
Options exercisable at March 31, 2018		283,600			3,153		0.33		1,041		283,600			3,153		0.33		1,041
Options exercisable at March 31, 2019											—			—		—		—

The total intrinsic value of options exercised for the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018~~2019 was ~~¥2,236 million,~~ ¥1,632 million, ¥1,881 million and ~~¥1,881~~¥618 million, respectively.

Cash received from the exercise of stock options for the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018~~2019 was ~~¥4,728 million,~~ ¥3,147 million, ~~and~~ ¥2,399 million and ¥490 million, respectively.

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

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

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

20. Employee benefit plans:

Pension and severance plans -

Upon terminations of employment, employees of the parent company and subsidiaries in Japan are entitled, under the retirement plans of each company, tolump-sum indemnities or pension payments, based on current rates of pay and lengths of service or the number of “points” mainly determined by those. Under normal circumstances, the minimum payment prior to retirement age is an amount based on voluntary retirement. Employees receive additional benefits on involuntary retirement, including retirement at the age limit.

Effective October 1, 2004, the parent company amended its retirement plan to introduce a “point” based retirement benefit plan. Under the new plan, employees are entitled tolump-sum or pension payments determined based on accumulated “points” vested in each year of service.

There are three types of “points” that vest in each year of service consisting of “service period points” which are attributed to the length of service, “job title points” which are attributed to the job title of each employee, and “performance points” which are attributed to the annual performance evaluation of each employee. Under normal circumstances, the minimum payment prior to retirement age is an amount reflecting an adjustment rate applied to represent voluntary retirement. Employees receive additional benefits upon involuntary retirement, including retirement at the age limit.

Effective October 1, 2005, the parent company partly amended its retirement plan and introduced the quasi cash-balance plan under which benefits are determined based on the variable-interest crediting rate rather than the fixed-interest crediting rate as was in thepre-amended plan.

The parent company and most subsidiaries in Japan have contributory funded defined benefit pension plans, which are pursuant to the Corporate Defined Benefit Pension Plan Law (CDBPPL). The contributions to the plans are funded with several financial institutions in accordance with the applicable laws and regulations. These pension plan assets consist principally of common stocks, government bonds and insurance contracts.

Most foreign subsidiaries have pension plans or severance indemnity plans covering substantially all of their employees under which the cost of benefits are currently invested or accrued. The benefits for these plans are based primarily on lengths of service and current rates of pay.

Toyota uses a March 31 measurement date for its benefit plans.

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Information regarding Toyota’s defined benefit plans is as follows:


	Yen in millions												Yen in millions
	March 31,												March 31,
	Japanese plans						Foreign plans						Japanese plans						Foreign plans
	2017			2018			2017			2018			2018			2019			2018			2019
Change in benefit obligation
Benefit obligation at beginning of year		1,912,156			1,930,498			963,255			1,026,024			1,930,498			2,019,310			1,026,024			1,097,981
Service cost		89,443			88,964			41,733			35,887			88,964			99,838			35,887			46,930
Interest cost		8,800			13,252			35,593			37,817			13,252			12,967			37,817			40,708
Plan participants’ contributions		923			1,266			436			912			1,266			974			912			1,045
Plan amendments		(21	)		(58	)		(996	)		(12	)		(58	)		(1,067	)		(12	)		13
Net actuarial (gain) loss		(45,783	)		35,017			22,220			66,039			35,017			67,391			66,039			7,755
Acquisition and other		30,622			18,206			(18,778	)		(26,616	)		18,206			(20,786	)		(26,616	)		21,634
Benefits paid		(65,642	)		(67,835	)		(17,439	)		(42,070	)		(67,835	)		(78,554	)		(42,070	)		(29,169	)

Benefit obligation at end of year		1,930,498			2,019,310			1,026,024			1,097,981			2,019,310			2,100,073			1,097,981			1,186,897

Change in plan assets
Fair value of plan assets at beginning of year		1,369,236			1,483,889			692,801			758,306			1,483,889			1,612,879			758,306			815,483
Actual return on plan assets		81,600			111,278			74,760			89,924			111,278			3,208			89,924			59,237
Acquisition and other		30,266			14,615			(11,960	)		(16,009	)		14,615			(13,705	)		(16,009	)		12,696
Employer contributions		39,692			42,095			15,925			20,961			42,095			41,276			20,961			18,952
Plan participants’ contributions		923			1,266			436			912			1,266			974			912			1,045
Benefits paid		(37,828	)		(40,264	)		(13,656	)		(38,611	)		(40,264	)		(44,141	)		(38,611	)		(24,629	)

Fair value of plan assets at end of year		1,483,889			1,612,879			758,306			815,483			1,612,879			1,600,491			815,483			882,784

Funded status		446,609			406,431			267,718			282,498			406,431			499,582			282,498			304,113

Amounts recognized in the consolidated balance sheets as of March 31, ~~2017~~2018 and ~~2018~~2019 are comprised of the following:


	Yen in millions												Yen in millions
	March 31,												March 31,
	Japanese plans						Foreign plans						Japanese plans						Foreign plans
	2017			2018			2017			2018			2018			2019			2018			2019
Accrued expenses (Accrued pension and severance costs)		28,265			27,718			2,936			2,982			27,718			34,298			2,982			3,234
Accrued pension and severance costs		633,774			647,134			271,296			284,048			647,134			657,380			284,048			306,026
Investments and other assets - Other (Prepaid pension and severance costs)		(215,430	)		(268,421	)		(6,514	)		(4,532	)		(268,421	)		(192,096	)		(4,532	)		(5,147	)

Net amount recognized		446,609			406,431			267,718			282,498			406,431			499,582			282,498			304,113

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Amounts recognized in accumulated other comprehensive income (loss) as of March 31, ~~2017~~2018 and ~~2018~~2019 are comprised of the following:


	Yen in millions												Yen in millions
	March 31,												March 31,
	Japanese plans						Foreign plans						Japanese plans						Foreign plans
	2017			2018			2017			2018			2018			2019			2018			2019
Net actuarial loss		(288,126	)		(248,791	)		(116,700	)		(119,407	)		(248,791	)		(339,814	)		(119,407	)		(91,072	)
Prior service costs		36,980			32,812			(2,151	)		(1,826	)		32,812			29,801			(1,826	)		(1,612	)
Net transition obligation		—			—			—			—			—			—			—			—

Net amount recognized		(251,146	)		(215,979	)		(118,851	)		(121,233	)		(215,979	)		(310,013	)		(121,233	)		(92,684	)

The accumulated benefit obligation for all defined benefit pension plans was ~~¥1,874,424~~¥1,959,533 million and ~~¥1,959,533~~¥2,040,344 million in Japanese plans, ~~¥957,217~~¥1,023,094 million and ~~¥1,023,094~~¥1,120,453 million in Foreign plans at March 31, ~~2017~~2018 and ~~2018,~~2019, respectively.

The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for which the accumulated benefit obligations exceed plan assets are as follows:


	Yen in millions								Yen in millions
	March 31,								March 31,
	Japanese plans				Foreign plans				Japanese plans				Foreign plans
	2017		2018		2017		2018		2018		2019		2018		2019
Projected benefit obligation		892,684		833,080		445,482		490,844		833,080		872,867		490,844		535,630
Accumulated benefit obligation		866,566		806,774		426,201		468,611		806,774		847,017		468,611		515,918
Fair value of plan assets		242,488		170,234		178,357		201,402		170,234		198,315		201,402		215,006

Components of the net periodic pension cost are as follows:


	Yen in millions																		Yen in millions
	For the years ended March 31,																		For the years ended March 31,
	Japanese plans									Foreign plans									Japanese plans									Foreign plans
	2016			2017			2018			2016			2017			2018			2017			2018			2019			2017			2018			2019
Service cost		78,611			89,443			88,964			47,544			41,733			35,887			89,443			88,964			99,838			41,733			35,887			46,930
Interest cost		17,509			8,800			13,252			40,340			35,593			37,817			8,800			13,252			12,967			35,593			37,817			40,708
Expected return on plan assets		(35,012	)		(33,524	)		(36,409	)		(44,616	)		(38,893	)		(41,048	)		(33,524	)		(36,409	)		(38,551	)		(38,893	)		(41,048	)		(37,530	)
Amortization of prior service costs		(4,669	)		(4,148	)		(4,226	)		435			344			313			(4,148	)		(4,226	)		(3,904	)		344			313			219
Recognized net actuarial loss		5,850			14,298			7,462			7,121			5,134			5,452			14,298			7,462			6,927			5,134			5,452			7,102
Amortization of net transition obligation		—			—			—			—			—			—			—			—			—			—			—			—

Net periodic pension cost		62,289			74,869			69,043			50,824			43,911			38,421			74,869			69,043			77,277			43,911			38,421			57,429

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) are as follows:


	Yen in millions																	Yen in millions
	For the years ended March 31,																	For the years ended March 31,
	Japanese plans									Foreign plans								Japanese plans									Foreign plans
	2016			2017			2018			2016			2017		2018			2017			2018			2019			2017		2018			2019
Net actuarial gain (loss)		(290,664	)		93,859			39,852			(11,242	)		13,647		(17,163	)		93,859			39,852			(102,734	)		13,647		(17,163	)		13,952
Recognized net actuarial loss		5,850			14,298			7,462			7,121			5,134		5,452			14,298			7,462			6,927			5,134		5,452			7,102
Prior service costs		489			21			58			573			996		12			21			58			1,067			996		12			(13	)
Amortization of prior service costs		(4,669	)		(4,148	)		(4,226	)		435			344		313			(4,148	)		(4,226	)		(3,904	)		344		313			219
Amortization of net transition obligation		—			—			—			—			—		—			—			—			—			—		—			—
Other		76			811			(7,979	)		272			1,962		9,004			811			(7,979	)		4,610			1,962		9,004			7,289

Total recognized in other comprehensive income (loss)		(288,918	)		104,841			35,167			(2,841	)		22,083		(2,382	)		104,841			35,167			(94,034	)		22,083		(2,382	)		28,549

The estimated prior service costs and net actuarial loss that will be amortized from accumulated other comprehensive income (loss) into net periodic pension cost during the year ending March 31, ~~2019~~2020 are ¥ ~~(4,200)~~(3,400) million and ~~¥7,100~~¥10,100 million in Japanese plans, ~~¥300~~¥200 million and ~~¥6,900~~¥4,500 million in Foreign plans , respectively.

Weighted-average assumptions used to determine benefit obligations as of March 31, ~~2017~~2018 and ~~2018~~2019 are as follows:


	March 31,												March 31,
	Japanese plans						Foreign plans						Japanese plans						Foreign plans
	2017			2018			2017			2018			2018			2019			2018			2019
Discount rate		0.7	%		0.7	%		4.0	%		3.9	%		0.7	%		0.6	%		3.9	%		3.8	%
Rate of compensation increase		2.9	%		3.3	%		3.8	%		3.6	%		3.3	%		3.1	%		3.6	%		3.5	%

As of March 31, ~~2017~~2018 and ~~2018,~~2019, the parent company and certain subsidiaries in Japan employ “point” based retirement benefit plans and do not use the rates of compensation increase to determine benefit obligations.

Weighted-average assumptions used to determine net periodic pension cost for the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018~~2019 are as follows:


	For the years ended March 31,																		For the years ended March 31,
	Japanese plans									Foreign plans									Japanese plans									Foreign plans
	2016			2017			2018			2016			2017			2018			2017			2018			2019			2017			2018			2019
Discount rate		1.1	%		0.5	%		0.7	%		4.0	%		4.2	%		4.0	%		0.5	%		0.7	%		0.7	%		4.2	%		4.0	%		3.9	%
Expected return on plan assets		2.5	%		2.4	%		2.4	%		6.3	%		6.1	%		6.0	%		2.4	%		2.4	%		2.4	%		6.1	%		6.0	%		5.6	%
Rate of compensation increase		2.5	%		2.7	%		2.9	%		4.4	%		3.9	%		3.8	%		2.7	%		2.9	%		3.3	%		3.9	%		3.8	%		3.6	%

During the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018,~~2019, the parent company and certain subsidiaries in Japan employ “point” based retirement benefit plans and do not use the rates of compensation increase to determine net periodic pension cost.

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The expected rate of return on plan assets is determined after considering several applicable factors including, the composition of plan assets held, assumed risks of asset management, historical results of the returns on plan assets, Toyota’s principal policy for plan asset management, and forecasted market conditions.

Toyota’s policy and objective for plan asset management is to maximize returns on plan assets to meet future benefit payment requirements under risks which Toyota considers permissible. Asset allocations under the plan asset management are determined based on plan asset management policies of each plan which are established to achieve the optimized asset compositions in terms of the long-term overall plan asset management. In Japanese plans, excepting equity securities contributed by Toyota, approximately 40% of the plan assets is invested in equity securities, approximately 30% is invested in debt securities, and the rest of them is invested in insurance contracts and other products. In Foreign plans, excepting equity securities contributed by Toyota, approximately ~~65%~~50% of the plan assets is invested in equity securities, approximately ~~25%~~40% is invested in debt securities, and the rest of them is invested in other products. When actual allocations are not in line with target allocations, Toyota rebalances its investments in accordance with the policies. Prior to making individual investments, Toyota performsin-depth assessments of corresponding factors including category of products, industry type, currencies and liquidity of each potential investment under consideration to mitigate concentrations of risks such as market risk and foreign currency exchange rate risk. To assess performance of the investments, Toyota establishes bench mark return rates for each individual investment, combines these individual bench mark rates based on the asset composition ratios within each asset category, and compares the combined rates with the corresponding actual return rates on each asset category.

The following table summarizes the fair value of classes of plan assets as of March 31, ~~2017~~2018 and ~~2018.~~2019. See note 2728 to the consolidated financial statements for three levels of input which are used to measure fair value.

Japanese plans


	Yen in millions								Yen in millions
	March 31, 2017								March 31, 2018
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Equity securities
Common stocks		585,052		—		—		585,052		620,281		—		—		620,281
Commingled funds		—		180,835		—		180,835		—		202,816		—		202,816

		585,052		180,835		—		765,887		620,281		202,816		—		823,097

Debt securities
Government bonds		87,958		—		—		87,958		88,959		—		—		88,959
Commingled funds		—		248,498		—		248,498		—		284,870		—		284,870
Other		—		39,754		81		39,835		—		36,567		19		36,586

		87,958		288,252		81		376,291		88,959		321,437		19		410,415

Insurance contracts		—		199,779		—��		199,779		—		201,141		—		201,141
Other		42,083		34,131		496		76,710		41,446		61,301		—		102,747
Investments measured at net asset value		—		—		—		65,222		—		—		—		75,479

Total		715,093		702,997		577		1,483,889		750,686		786,695		19		1,612,879

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)


	Yen in millions								Yen in millions
	March 31, 2018								March 31, 2019
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Equity securities
Common stocks		620,281		—		—		620,281		531,159		—		—		531,159
Commingled funds		—		202,816		—		202,816		—		192,012		—		192,012

		620,281		202,816		—		823,097		531,159		192,012		—		723,171

Debt securities
Government bonds		88,959		—		—		88,959		98,578		—		—		98,578
Commingled funds		—		284,870		—		284,870		—		286,783		—		286,783
Other		—		36,567		19		36,586		—		54,652		—		54,652

		88,959		321,437		19		410,415		98,578		341,435		—		440,013

Insurance contracts		—		201,141		—		201,141		—		226,093		—		226,093
Other		41,446		61,301		—		102,747		84,208		38,439		4,242		126,889
Investments measured at net asset value		—		—		—		75,479		—		—		—		84,325

Total		750,686		786,695		19		1,612,879		713,945		797,979		4,242		1,600,491

Foreign plans


	Yen in millions								Yen in millions
	March 31, 2017								March 31, 2018
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Equity securities
Common stocks		207,036		—		—		207,036		178,476		—		—		178,476
Commingled funds		—		152,104		—		152,104		—		197,566		—		197,566

		207,036		152,104		—		359,140		178,476		197,566		—		376,042

Debt securities
Government bonds		76,730		—		—		76,730		89,928		—		—		89,928
Commingled funds		—		36,430		—		36,430		—		11,642		—		11,642
Other		—		33,430		—		33,430		—		35,032		—		35,032

		76,730		69,860		—		146,590		89,928		46,674		—		136,602

Insurance contracts		—		—		—		—		—		—		—		—
Other		13,533		13,851		30,903		58,287		12,487		18,107		31,288		61,882
Investments measured at net asset value		—		—		—		194,289		—		—		—		240,957

Total		297,299		235,815		30,903		758,306		280,891		262,347		31,288		815,483

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)


	Yen in millions								Yen in millions
	March 31, 2018								March 31, 2019
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Equity securities
Common stocks		178,476		—		—		178,476		123,875		—		—		123,875
Commingled funds		—		197,566		—		197,566		—		215,386		—		215,386

		178,476		197,566		—		376,042		123,875		215,386		—		339,261

Debt securities
Government bonds		89,928		—		—		89,928		141,054		—		—		141,054
Commingled funds		—		11,642		—		11,642		—		—		—		—
Other		—		35,032		—		35,032		—		164,877		—		164,877

		89,928		46,674		—		136,602		141,054		164,877		—		305,931

Insurance contracts		—		—		—		—		—		—		—		—
Other		12,487		18,107		31,288		61,882		10,292		24,810		27,903		63,005
Investments measured at net asset value		—		—		—		240,957		—		—		—		174,587

Total		280,891		262,347		31,288		815,483		275,221		405,073		27,903		882,784

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

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

Quoted market prices for identical securities are used to measure fair value of common stocks. Japanese stocks and foreign stocks represent ~~74% and 26% (as of March 31, 2017) and~~ 76% and 24% (as of March 31, 2018) and 73% and 27% (as of March 31, 2019) of common stocks, respectively, in Japanese plans. Common stocks include mainly foreign stocks as of March 31, ~~2017~~2018 and ~~2018~~2019 in Foreign plans.

Quoted market prices for identical securities are used to measure fair value of government bonds. Japanese government bonds and foreign government bonds represent ~~28% and 72% (as of March 31, 2017) and~~ 29% and 71% (as of March 31, 2018) and 33% and 67% (as of March 31, 2019) of government bonds, respectively, in Japanese plans. Government bonds include mainly foreign government bonds as of March 31, ~~2017~~2018 and ~~2018~~2019 in Foreign plans.

Commingled funds are beneficial interests of collective trust. The fair values of commingled funds are measured using the net asset value (“NAV”) provided by the administrator of the fund, and are categorized by the ability to redeem investments by the NAV.

The fair values of insurance contracts are measured using contracted amount with accrued interest.

“Other” consists of cash equivalents, other private placement investment funds and other assets. The fair values of other private placement investment funds are measured using the NAV provided by the administrator of the fund, and are categorized by the ability to redeem investments by the NAV.

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following tables summarize the changes in Level 3 plan assets measured at fair value for the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018:~~2019:

Japanese plans


	Yen in millions																											Yen in millions
	For the years ended March 31,																											For the years ended March 31,
	2016									2017									2018									2017									2018									2019
	Debt securities			Other			Total			Debt securities			Other			Total			Debt securities			Other			Total			Debt securities			Other			Total			Debt securities			Other			Total			Debt securities			Other			Total
Balance at beginning of year		233			1,018			1,251			146			2,518			2,664			81			496			577			146			2,518			2,664			81			496			577			19			—			19
Actual return on plan assets		1			(3	)		(2	)		—			(11	)		(11	)		—			(4	)		(4	)		—			(11	)		(11	)		—			(4	)		(4	)		—			(164	)		(164	)
Purchases, sales and settlements		(88	)		1,503			1,415			(65	)		(2,011	)		(2,076	)		(62	)		(492	)		(554	)		(65	)		(2,011	)		(2,076	)		(62	)		(492	)		(554	)		(19	)		—			(19	)
Other		—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			4,406			4,406

Balance at end of year		146			2,518			2,664			81			496			577			19			—			19			81			496			577			19			—			19			—			4,242			4,242
												��

Foreign plans


	Yen in millions									Yen in millions
	For the years ended March 31,									For the years ended March 31,
	2016			2017			2018			2017			2018			2019
	Other			Other			Other			Other			Other			Other
Balance at beginning of year		17,511			30,758			30,903			30,758			30,903			31,288
Actual return on plan assets		1,966			279			2,024			279			2,024			(4,784	)
Purchases, sales and settlements		12,372			—			—			—			—			—
Other		(1,091	)		(134	)		(1,639	)		(134	)		(1,639	)		1,399

Balance at end of year		30,758			30,903			31,288			30,903			31,288			27,903

Toyota expects to contribute ~~¥42,220~~¥40,124 million in Japanese plans and ~~¥23,234~~¥14,330 million in Foreign plans to its pension plans in the year ending March 31, ~~2019.~~2020.

The following pension benefit payments, which reflect expected future service, as appropriate, are expected to be paid:


	Yen in millions				Yen in millions
Years ending March 31,	Japanese plans		Foreign plans		Japanese plans		Foreign plans
2019		72,756		21,972
2020		73,891		23,700		78,333		26,350
2021		74,890		25,089		79,217		27,750
2022		78,254		26,724		82,638		29,423
2023		82,433		28,552		86,906		31,281
from 2024 to 2028		429,821		167,337
2024						90,064		33,094
from 2025 to 2029						455,028		190,987

Total		812,045		293,374		872,186		338,885

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Postretirement benefits other than pensions and postemployment benefits -

Toyota’s U.S. subsidiaries provide certain health care and life insurance benefits to eligible retired employees. In addition, Toyota provides benefits to certain former or inactive employees after employment, but before retirement. These benefits are provided through various insurance companies, health care providers and others. The costs of these benefits are recognized over the period the employee provides credited service to Toyota. Toyota’s obligations under these arrangements are not material.

21. Derivative financial instruments:

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

Fair value hedges -

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

For the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018,~~2019, 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.

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Fair value and gains or losses on derivative financial instruments -

The following table summarizes the fair values of derivative financial instruments as of March 31, ~~2017~~2018 and ~~2018:~~2019:


	Yen in millions						Yen in millions
	March 31,						March 31,
	2017			2018			2018			2019
Derivative assets
Derivative financial instruments designated as hedging instruments
Interest rate and currency swap agreements
Prepaid expenses and other current assets		—			154			154			—
Investments and other assets - Other		662			668			668			—

Total		662			822			822			—

Undesignated derivative financial instruments
Interest rate and currency swap agreements
Prepaid expenses and other current assets		61,946			46,425			46,425			74,971
Investments and other assets - Other		168,292			175,635			175,635			114,642

Total		230,238			222,060			222,060			189,613

Foreign exchange forward and option contracts
Prepaid expenses and other current assets		12,357			34,922			34,922			10,720
Investments and other assets - Other		164			—			—			—

Total		12,521			34,922			34,922			10,720

Total derivative assets		243,421			257,804			257,804			200,333
Counterparty netting		(84,883	)		(97,617	)		(97,617	)		(89,364	)
Collateral received		(60,021	)		(92,146	)		(92,146	)		(46,590	)

Carrying value of derivative assets		98,517			68,041			68,041			64,379

Derivative liabilities
Derivative financial instruments designated as hedging instruments
Interest rate and currency swap agreements
Other current liabilities		(64	)		—			—			—
Other long-term liabilities		—			—			—			—

Total		(64	)		—			—			—

Undesignated derivative financial instruments
Interest rate and currency swap agreements
Other current liabilities		(67,091	)		(34,716	)		(34,716	)		(28,911	)
Other long-term liabilities		(158,383	)		(158,830	)		(158,830	)		(189,157	)

Total		(225,474	)		(193,546	)		(193,546	)		(218,068	)

Foreign exchange forward and option contracts
Other current liabilities		(19,919	)		(3,610	)		(3,610	)		(13,847	)
Other long-term liabilities		—			—			—			—

Total		(19,919	)		(3,610	)		(3,610	)		(13,847	)

Total derivative liabilities		(245,457	)		(197,156	)		(197,156	)		(231,915	)
Counterparty netting		84,883			97,617			97,617			89,364
Collateral posted		122,231			55,650			55,650			110,159

Carrying value of derivative liabilities		(38,343	)		(43,889	)		(43,889	)		(32,392	)

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table summarizes the notional amounts of derivative financial instruments as of March 31, ~~2017~~2018 and ~~2018:~~2019:


	Yen in millions								Yen in millions
	March 31,								March 31,
	2017				2018				2018				2019
	Designated derivative financial instruments		Undesignated derivative financial instruments		Designated derivative financial instruments		Undesignated derivative financial instruments		Designated derivative financial instruments		Undesignated derivative financial instruments		Designated derivative financial instruments		Undesignated derivative financial instruments
Interest rate and currency swap agreements		40,837		19,459,677		12,643		19,895,085		12,643		19,895,085		—		21,001,883
Foreign exchange forward and option contracts		—		2,772,741		—		2,731,534		—		2,731,534		—		4,005,578

Total		40,837		22,232,418		12,643		22,626,619		12,643		22,626,619		—		25,007,461

The following table summarizes the gains and losses on derivative financial instruments and hedged items reported in the consolidated statements of income for the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018:~~2019:


	Yen in millions															Yen in millions
	For the years ended March 31,															For the years ended March 31,
	2016					2017					2018					2017					2018					2019
	Gains or (losses) on derivative financial instruments			Gains or (losses) on hedged items		Gains or (losses) on derivative financial instruments			Gains or (losses) on hedged items		Gains or (losses) on derivative financial instruments		Gains or (losses) on hedged items			Gains or (losses) on derivative financial instruments			Gains or (losses) on hedged items		Gains or (losses) on derivative financial instruments		Gains or (losses) on hedged items			Gains or (losses) on derivative financial instruments			Gains or (losses) on hedged items
Derivative financial instruments designated as hedging instruments
Interest rate and currency swap agreements
Cost of financing operations		(133	)		122		(339	)		1,212		782		(227	)		(339	)		1,212		782		(227	)		(822	)		799

Undesignated derivative financial instruments
Interest rate and currency swap agreements
Cost of financing operations		119,096					(61,884	)				42,220					(61,884	)				42,220					(18,433	)
Foreign exchange gain (loss), net		(379	)				12,516					30,339					12,516					30,339					37,124
Foreign exchange forward and option contracts
Cost of financing operations		(16,363	)				2,614					6,442					2,614					6,442					2,240
Foreign exchange gain (loss), net		115,256					81,614					73,115					81,614					73,115					(69,826	)

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.

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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

Credit risk related contingent features -

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

The aggregate fair value amount of derivative financial instruments that contain credit risk related contingent features that are in a net liability position after being offset by cash collateral as of March 31, ~~2018~~2019 is ~~¥2,489~~¥4,126 million. The aggregate fair value amount of assets that are already posted as cash collateral as of March 31, ~~2018~~2019 is ~~¥28,012~~¥105,460 million. If the ratings of Toyota decline below specified thresholds, the maximum amount of assets to be posted or for which Toyota could be required to settle the contracts is ~~¥2,489~~¥4,126 million as of March 31, ~~2018.~~2019.

22. Other financial instruments:

Toyota has certain financial instruments, including financial assets and liabilities which arose in the normal course of business. These financial instruments are executed with creditworthy financial institutions, and virtually all foreign currency contracts are denominated in U.S. dollars, euros and other currencies of major developed countries. Financial instruments involve, to varying degrees, market risk as instruments are subject to price fluctuations, and elements of credit risk in the event a counterparty should default. In the unlikely event the counterparties fail to meet the contractual terms of a foreign currency or an interest rate instrument, Toyota’s risk is limited to the fair value of the instrument. Although Toyota may be exposed to losses in the event ofnon-performance by counterparties on financial instruments, it does not anticipate significant losses due to the nature of its counterparties. Counterparties to Toyota’s financial instruments represent, in general, international financial institutions. Additionally, Toyota does not have a significant exposure to any individual counterparty. Toyota believes that the overall credit risk related to its financial instruments is not significant.

The following table summarizes the estimated fair values of Toyota’s financial instruments, excluding marketable securities, other securities investments, investments and other assets in affiliated companies and derivative financial instruments. See note 2728 to the consolidated financial statements for three levels of input which are used to measure fair value.


	Yen in millions														Yen in millions
	March 31, 2017														March 31, 2018
				Estimated fair value														Estimated fair value
	Carrying amount			Level 1		Level 2			Level 3			Total			Carrying amount			Level 1		Level 2			Level 3			Total
Assets (Liabilities)
Cash and cash equivalents		2,995,075			2,103,469		891,606			—			2,995,075			3,052,269			2,278,060		774,209			—			3,052,269
Time deposits		1,082,654			—		1,082,654			—			1,082,654			901,244			—		901,244			—			901,244
Total finance receivables, net		14,064,660			—		—			14,226,440			14,226,440			14,508,614			—		—			14,615,409			14,615,409
Other receivables		436,867			—		—			436,867			436,867			489,338			—		—			489,338			489,338
Short-term borrowings		(4,953,682	)		—		(4,953,682	)		—			(4,953,682	)		(5,154,913	)		—		(5,154,913	)		—			(5,154,913	)
Long-term debt including the current portion		(14,179,796	)		—		(12,241,617	)		(2,065,884	)		(14,307,501	)		(14,172,025	)		—		(12,265,260	)		(1,940,888	)		(14,206,148	)

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)


	Yen in millions														Yen in millions
	March 31, 2018														March 31, 2019
				Estimated fair value														Estimated fair value
	Carrying amount			Level 1		Level 2			Level 3			Total			Carrying amount			Level 1		Level 2			Level 3			Total
Assets (Liabilities)
Cash and cash equivalents		3,052,269			2,278,060		774,209			—			3,052,269			3,574,704			2,980,504		594,200			—			3,574,704
Time deposits		901,244			—		901,244			—			901,244			1,126,352			—		1,126,352			—			1,126,352
Total finance receivables, net		14,508,614			—		—			14,615,409			14,615,409			15,450,745			—		—			15,668,542			15,668,542
Other receivables		489,338			—		—			489,338			489,338			568,156			—		—			568,156			568,156
Short-term borrowings		(5,154,913	)		—		(5,154,913	)		—			(5,154,913	)		(5,344,973	)		—		(5,285,807	)		(59,166	)		(5,344,973	)
Long-term debt including the current portion		(14,172,025	)		—		(12,265,260	)		(1,940,888	)		(14,206,148	)		(14,786,184	)		—		(12,786,541	)		(1,833,623	)		(14,620,164	)

Cash and cash equivalents and time deposits -

In the normal course of business, substantially all cash and cash equivalents and time deposits are highly liquid and are carried at amounts which approximate fair value due to its short duration. Cash equivalents and time deposits include negotiable certificate of deposit measured at fair value on a recurring basis. Where money market funds produce a daily net asset value in an active market, this value is used to determine the fair value of the fund investment, and the investment is classified in Level 1. All other types of cash and cash equivalents and time deposits are classified in Level 2.

Finance receivables, net -

The fair values of finance receivables are estimated by discounting expected cash flows to present value using internal assumptions, including prepayment speeds, expected credit losses and collateral value. Certain impaired finance receivables are measured at fair value on a nonrecurring basis based on collateral values.

As unobservable inputs are utilized, finance receivables are classified in Level 3.

Other receivables -

Other receivables are short-term receivables. These receivables are carried at amounts which approximate fair value, and the difference between the carrying amount and the fair value is not material. These receivables are classified in Level 3.

Short-term borrowings and long-term debt -

The fair values of short-term borrowings and long-term debt including the current portion, except for secured loans provided by securitization transactions using special-purpose entities, are estimated based on the discounted amounts of future cash flows using Toyota’s current borrowing rates for similar liabilities. As these inputs are observable, these debts are classified in Level 2.

The fair values of the secured loans provided by securitization transactions are estimated based on current market rates and credit spreads for debt with similar maturities. Internal assumptions including prepayment speeds and expected credit losses are used to estimate the timing of cash flows to be paid on the underlying securitized assets. As these valuations utilize unobservable inputs, the secured loans are classified in Level 3. See note 11 to the consolidated financial statements for information regarding the secured loans.

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

23. Lease commitments:

Toyota leases certain assets under capital lease and operating lease arrangements.

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


	Yen in millions						Yen in millions
	March 31,						March 31,
	2017			2018			2018			2019
Class of property
Building		18,775			17,934			17,934			18,519
Machinery and equipment		29,630			31,217			31,217			28,836
Less - Accumulated depreciation		(28,703	)		(30,853	)		(30,853	)		(30,016	)

		19,702			18,298			18,298			17,339

Amortization expenses under capital leases for the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018~~2019 were ~~¥4,801 million,~~ ¥4,586 million, ¥5,541 million and ~~¥5,541~~¥7,879 million, respectively.

Future minimum lease payments under capital leases together with the present value of the net minimum lease payments as of March 31, ~~2018~~2019 are as follows:


Years ending March 31,	Yen in millions			Yen in millions
2019		6,645
2020		3,892			6,536
2021		2,276			3,988
2022		1,921			2,301
2023		1,801			2,081
2024					1,919
Thereafter		8,933			5,947

Total minimum lease payments		25,468			22,772
Less - Amount representing interest		(4,842	)		(3,751	)

Present value of net minimum lease payments		20,626			19,021
Less - Current obligations		(5,796	)		(5,747	)

Long-term capital lease obligations		14,830			13,274

Rental expenses under operating leases for the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018~~2019 were ~~¥101,932 million,~~ ¥92,321 million, ¥112,934 million and ~~¥112,934~~¥115,503 million, respectively.

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The minimum rental payments required under operating leases relating primarily to land, buildings and equipment having initial or remainingnon-cancelable lease terms in excess of one year at March 31, ~~2018~~2019 are as follows:


Years ending March 31,	Yen in millions		Yen in millions
2019		14,296
2020		11,375		16,078
2021		9,422		13,396
2022		8,403		11,862
2023		7,247		10,219
2024				8,034
Thereafter		26,106		32,598

Total minimum future rentals		76,849		92,187

24. Other commitments and contingencies, concentrations and factors that may affect future operations:

Commitments -

Commitments outstanding as of March 31, ~~2018~~2019 for the purchase of property, plant and equipment, other assets and services totaled ~~¥368,483~~¥363,319 million.

Guarantees -

Toyota enters into contracts with Toyota dealers to guarantee customers’ payments of their installment payables that arise from installment contracts between customers and Toyota dealers, as and when requested by Toyota dealers. Guarantee periods are set to match maturity of installment payments, and as of March 31, ~~2018,~~2019, range from 1 month to 35 years; however, they are generally shorter than the useful lives of products sold. Toyota is required to execute its guarantee primarily when customers are unable to make required payments.

The maximum potential amount of future payments as of March 31, ~~2018~~2019 is ~~¥2,830,749~~¥3,078,955 million. Liabilities for guarantees totaling ~~¥6,901~~¥8,921 million have been provided as of March 31, ~~2018.~~2019. 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 -

Fromtime-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 toslow-to-return or sticky accelerator pedals. In March 2014, Toyota entered into a Deferred Prosecution Agreement (“DPA”) to resolve an investigation by the U.S. Attorney for the Southern District of New York (“SDNY”) related to unintended acceleration in certain of its vehicles. The DPA provided for an independent monitor to review and assess policies and procedures relating to Toyota’s safety communications process, its process for sharing vehicle accident information internally and its process for preparing and sharing certain technical reports. In August 2017, the DPA and the monitorship terminated, and in October 2017, the criminal charge that had been filed in connection with the DPA was dismissed.

Personal injury and wrongful death claims involving allegations of unintended acceleration are still 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

~~TOYOTA MOTOR CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

Intensive Settlement Process (“ISP”) for such claims in those actions. Under the ISP, all individual claims within the consolidated actions are stayed pending completion of a process to assess whether they can be resolved on terms acceptable to the parties. Cases not resolved after completion of the ISP will then proceed to discovery and toward trial. Toyota has offered the ISP process to plaintiffs in other consolidated actions and in individual cases, as well.

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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

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

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

The parent company has a concentration of labor supply in employees working under collective bargaining agreements and a substantial portion of these employees are working under the agreement that will expire on December 31, 2020.

25. Segment data:

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

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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

The following tables present certain information regarding Toyota’s industry or geographic segments and overseas revenues by destination as of and for the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018.~~2019.

Segment operating results and assets -

As of and for the year ended March 31, ~~2016:~~2017:


	Yen in millions											Yen in millions
	Automotive		Financial Services		All Other		Inter-segment Elimination/ Unallocated Amount			Consolidated		Automotive		Financial Services		All Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		25,923,813		1,854,007		625,298		—			28,403,118		25,032,229		1,783,697		781,267		—			27,597,193
Inter-segment sales and transfers		53,603		42,217		552,089		(647,909	)		—		49,618		39,903		539,785		(629,306	)		—

Total		25,977,416		1,896,224		1,177,387		(647,909	)		28,403,118		25,081,847		1,823,600		1,321,052		(629,306	)		27,597,193
Operating expenses		23,528,418		1,556,998		1,110,880		(647,149	)		25,549,147		23,388,874		1,601,172		1,239,725		(626,950	)		25,602,821

Operating income		2,448,998		339,226		66,507		(760	)		2,853,971		1,692,973		222,428		81,327		(2,356	)		1,994,372

Assets		15,621,757		21,709,010		1,917,148		8,179,682			47,427,597		16,156,496		22,507,613		2,170,498		7,915,579			48,750,186
Investment in equity method investees		2,532,644		9,168		10,801		78,776			2,631,389		2,745,437		9,792		—		90,193			2,845,422
Depreciation expenses		900,434		697,991		27,412		—			1,625,837		912,797		671,155		26,998		—			1,610,950
Capital expenditure		1,389,289		2,638,111		41,826		(10,010	)		4,059,216		1,293,564		2,182,149		53,710		12,014			3,541,437

As of and for the year ended March 31, 2018:


	Yen in millions
	Automotive		Financial Services		All Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		26,347,229		1,959,234		1,073,047		—			29,379,510
Inter-segment sales and transfers		50,711		57,774		573,071		(681,556	)		—

Total		26,397,940		2,017,008		1,646,118		(681,556	)		29,379,510
Operating expenses		24,386,805		1,731,462		1,545,306		(683,925	)		26,979,648

Operating income		2,011,135		285,546		100,812		2,369			2,399,862

Assets		17,054,209		23,055,981		2,178,118		8,019,941			50,308,249
Investment in equity method investees		3,054,583		11,713		—		96,415			3,162,711
Depreciation expenses		976,735		723,061		34,237		—			1,734,033
Capital expenditure		1,381,122		2,166,805		62,447		(11,667	)		3,598,707

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

As of and for the year ended March 31, 2019:


	Yen in millions
	Automotive		Financial Services		All Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		27,034,492		2,120,343		1,070,846		—			30,225,681
Inter-segment sales and transfers		44,585		33,204		605,531		(683,320	)		—

Total		27,079,077		2,153,547		1,676,377		(683,320	)		30,225,681
Operating expenses		25,040,193		1,830,726		1,570,839		(683,622	)		27,758,136

Operating income		2,038,884		322,821		105,538		302			2,467,545

Assets		17,799,376		24,044,700		2,125,271		7,967,602			51,936,949
Investment in equity method investees		3,215,856		12,172		—		85,675			3,313,703
Depreciation expenses		997,312		758,847		36,216		—			1,792,375
Capital expenditure		1,520,366		2,165,609		66,075		(13,163	)		3,738,887

Geographic information -

As of and for the year ended March 31, 2017:


	Yen in millions											Yen in millions
	Automotive		Financial Services		All Other		Inter-segment Elimination/ Unallocated Amount			Consolidated		Japan		North America		Europe			Asia		Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		25,032,229		1,783,697		781,267		—			27,597,193		8,798,903		10,033,419		2,517,601			4,279,617		1,967,653		—			27,597,193
Inter-segment sales and transfers		49,618		39,903		539,785		(629,306	)		—		6,031,965		205,672		163,438			540,204		193,421		(7,134,700	)		—

Total		25,081,847		1,823,600		1,321,052		(629,306	)		27,597,193		14,830,868		10,239,091		2,681,039			4,819,821		2,161,074		(7,134,700	)		27,597,193
Operating expenses		23,388,874		1,601,172		1,239,725		(626,950	)		25,602,821		13,628,623		9,927,897		2,693,283			4,384,642		2,102,380		(7,134,004	)		25,602,821

Operating income		1,692,973		222,428		81,327		(2,356	)		1,994,372
Operating income (loss)													1,202,245		311,194		(12,244	)		435,179		58,694		(696	)		1,994,372

Assets		16,156,496		22,507,613		2,170,498		7,915,579			48,750,186		14,791,969		17,365,237		2,846,469			4,486,021		2,819,935		6,440,555			48,750,186
Investment in equity method investees		2,745,437		9,792		—		90,193			2,845,422
Depreciation expenses		912,797		671,155		26,998		—			1,610,950
Capital expenditure		1,293,564		2,182,149		53,710		12,014			3,541,437
Long-lived assets													3,376,157		5,274,928		313,182			828,619		404,223		—			10,197,109

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

As of and for the year ended March 31, 2018:

   Yen in millions
   Automotive    Financial
Services    All Other    Inter-segment
Elimination/
Unallocated
Amount Consolidated
Net revenues

Sales to external customers
   26,347,229    1,959,234    1,073,047    —   29,379,510
Inter-segment sales and transfers
   50,711    57,774    573,071    (681,556 ) —








Total
   26,397,940    2,017,008    1,646,118    (681,556 ) 29,379,510
Operating expenses
   24,386,805    1,731,462    1,545,306    (683,925 ) 26,979,648








Operating income
   2,011,135    285,546    100,812    2,369 2,399,862








Assets
   17,054,209    23,055,981    2,178,118    8,019,941 50,308,249
Investment in equity method investees
   3,054,583    11,713    —      96,415 3,162,711
Depreciation expenses
   976,735    723,061    34,237    —   1,734,033
Capital expenditure
   1,381,122    2,166,805    62,447    (11,667 ) 3,598,707

~~Geographic information -~~


	Yen in millions
	Japan		North America		Europe		Asia		Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		9,273,672		10,347,266		2,940,243		4,497,374		2,320,955		—			29,379,510
Inter-segment sales and transfers		6,751,172		227,144		244,981		650,765		132,344		(8,006,406	)		—

Total		16,024,844		10,574,410		3,185,224		5,148,139		2,453,299		(8,006,406	)		29,379,510
Operating expenses		14,364,926		10,435,511		3,110,198		4,714,940		2,340,636		(7,986,563	)		26,979,648

Operating income		1,659,918		138,899		75,026		433,199		112,663		(19,843	)		2,399,862

Assets		15,797,024		16,936,704		3,346,179		4,893,582		2,986,661		6,348,099			50,308,249
Long-lived assets		3,511,663		5,179,139		359,355		797,435		420,081		—			10,267,673

As of and for the year ended March 31, ~~2016:~~2019:

Yen in millions
Japan North
America Europe Asia Other Inter-segment
Elimination/
Unallocated
Amount Consolidated
Net revenues

Sales to external customers
8,588,437 10,822,772 2,507,292 4,475,623 2,008,994 —   28,403,118
Inter-segment sales and transfers
6,171,051 229,198 154,039 528,236 201,220 (7,283,744 ) —

Total
14,759,488 11,051,970 2,661,331 5,003,859 2,210,214 (7,283,744 ) 28,403,118
Operating expenses
13,081,966 10,523,151 2,588,915 4,554,670 2,101,305 (7,300,860 ) 25,549,147

Operating income
1,677,522 528,819 72,416 449,189 108,909 17,116 2,853,971

Assets
14,291,434 16,622,979 2,612,210 4,415,700 2,579,113 6,906,161 47,427,597
Long-lived assets
3,210,376 4,958,989 309,657 869,989 391,406 —   9,740,417

~~TOYOTA MOTOR CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

~~As of and for the year ended March 31, 2017:~~

Yen in millions
Japan North
America Europe Asia Other Inter-segment
Elimination/
Unallocated
Amount Consolidated
Net revenues

Sales to external customers
8,798,903 10,033,419 2,517,601 4,279,617 1,967,653 —   27,597,193
Inter-segment sales and transfers
6,031,965 205,672 163,438 540,204 193,421 (7,134,700 ) —

Total
14,830,868 10,239,091 2,681,039 4,819,821 2,161,074 (7,134,700 ) 27,597,193
Operating expenses
13,628,623 9,927,897 2,693,283 4,384,642 2,102,380 (7,134,004 ) 25,602,821

Operating income (loss)
1,202,245 311,194 (12,244 ) 435,179 58,694 (696 ) 1,994,372

Assets
14,791,969 17,365,237 2,846,469 4,486,021 2,819,935 6,440,555 48,750,186
Long-lived assets
3,376,157 5,274,928 313,182 828,619 404,223 —   10,197,109

~~As of and for the year ended March 31, 2018:~~


	Yen in millions															Yen in millions
	Japan		North America		Europe		Asia		Other		Inter-segment Elimination/ Unallocated Amount			Consolidated		Japan		North America		Europe		Asia		Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		9,273,672		10,347,266		2,940,243		4,497,374		2,320,955		—			29,379,510		9,520,148		10,585,934		3,055,654		4,832,392		2,231,553		—			30,225,681
Inter-segment sales and transfers		6,751,172		227,144		244,981		650,765		132,344		(8,006,406	)		—		7,105,213		231,313		183,197		680,639		101,890		(8,302,252	)		—

Total		16,024,844		10,574,410		3,185,224		5,148,139		2,453,299		(8,006,406	)		29,379,510		16,625,361		10,817,247		3,238,851		5,513,031		2,333,443		(8,302,252	)		30,225,681
Operating expenses		14,364,926		10,435,511		3,110,198		4,714,940		2,340,636		(7,986,563	)		26,979,648		14,933,686		10,702,732		3,113,983		5,055,542		2,242,333		(8,290,140	)		27,758,136

Operating income		1,659,918		138,899		75,026		433,199		112,663		(19,843	)		2,399,862		1,691,675		114,515		124,868		457,489		91,110		(12,112	)		2,467,545

Assets		15,797,024		16,936,704		3,346,179		4,893,582		2,986,661		6,348,099			50,308,249		16,465,702		17,452,216		3,872,301		5,176,990		3,067,270		5,902,470			51,936,949
Long-lived assets		3,511,663		5,179,139		359,355		797,435		420,081		—			10,267,673		3,607,843		5,469,262		453,921		729,494		424,974		—			10,685,494

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

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

There are no any individually material countries with respect to revenues, and long-lived assets included in other foreign countries.

Unallocated amounts included in assets represent assets held for corporate purposes, which mainly consist of cash and cash equivalents and marketable ~~securities.~~securities and other securities investments. Such corporate assets were ~~¥9,369,868 million,~~ ¥9,177,953 million, ¥9,386,399 million and ~~¥9,386,399~~¥9,329,020 million, as of March 31, ~~2016,~~ 2017, 2018 and ~~2018,~~2019, respectively.

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Transfers between industry or geographic segments are made at terms and conditions in the ordinary course of business. In measuring the reportable segments’ income or losses, operating income consists of revenue less operating expenses.

Overseas revenues by destination -

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


	Yen in millions						Yen in millions
	For the years ended March 31,						For the years ended March 31,
	2016		2017		2018		2017		2018		2019
North America		10,797,304		10,054,431		10,403,647		10,054,431		10,403,647		10,675,298
Europe		2,323,399		2,341,364		2,730,915		2,341,364		2,730,915		2,873,737
Asia		4,292,800		4,414,236		4,793,110		4,414,236		4,793,110		5,355,991
Other		4,724,784		3,923,621		4,186,666		3,923,621		4,186,666		3,944,854

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

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Certain financial statements data onnon-financial services and financial services businesses -

The financial data below presents separately Toyota’snon-financial services and financial services businesses.

Balance sheets -


	Yen in millions						Yen in millions
	March 31,						March 31,
	2017			2018			2018			2019
Assets
Non-Financial Services Businesses
Current assets
Cash and cash equivalents		2,257,064			2,390,524			2,390,524			2,790,212
Marketable securities		1,439,944			1,546,459			1,546,459			1,108,540
Trade accounts and notes receivable, less allowance for doubtful accounts		2,191,594			2,304,676			2,304,676			2,489,105
Inventories		2,388,394			2,539,497			2,539,497			2,656,396
Prepaid expenses and other current assets		1,988,016			1,818,687			1,818,687			2,118,922

Total current assets		10,265,012			10,599,843
Total current assets .								10,599,843			11,163,175

Investments and other assets		11,276,128			11,861,394			11,861,394			11,643,209
Property, plant and equipment		5,700,818			5,901,958			5,901,958			6,178,503

TotalNon-Financial Services Businesses assets		27,241,958			28,363,195			28,363,195			28,984,887

Financial Services Business
Current assets
Cash and cash equivalents		738,011			661,745			661,745			784,492
Marketable securities		381,654			221,901			221,901			18,620
Finance receivables, net		6,196,649			6,348,306			6,348,306			6,647,771
Prepaid expenses and other current assets		831,924			957,122			957,122			997,116

Total current assets		8,148,238			8,189,074			8,189,074			8,447,999

Noncurrent finance receivables, net		9,012,222			9,481,618			9,481,618			10,281,118
Investments and other assets		850,862			1,019,574			1,019,574			808,592
Property, plant and equipment		4,496,291			4,365,715			4,365,715			4,506,991

Total Financial Services Business assets		22,507,613			23,055,981			23,055,981			24,044,700

Eliminations		(999,385	)		(1,110,927	)		(1,110,927	)		(1,092,638	)

Total assets		48,750,186			50,308,249			50,308,249			51,936,949

Assets in thenon-financial services include unallocated corporate assets.

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)


	Yen in millions						Yen in millions
	March 31,						March 31,
	2017			2018			2018			2019
Liabilities
Non-Financial Services Businesses
Current liabilities
Short-term borrowings		669,947			541,968			541,968			579,901
Current portion of long-term debt		196,227			179,994			179,994			173,379
Accounts payable		2,540,078			2,556,393			2,556,393			2,616,143
Accrued expenses		3,038,218			2,980,981			2,980,981			3,075,411
Income taxes payable		203,101			429,616			429,616			300,703
Other current liabilities		1,512,662			1,797,724			1,797,724			1,755,737

Total current liabilities		8,160,233			8,486,676			8,486,676			8,501,274

Long-term liabilities
Long-term debt		590,366			642,691			642,691			784,256
Accrued pension and severance costs		890,684			917,133			917,133			948,377
Other long-term liabilities		1,206,427			1,111,843			1,111,843			1,059,237

Total long-term liabilities		2,687,477			2,671,667			2,671,667			2,791,870

TotalNon-Financial Services Businesses liabilities		10,847,710			11,158,343			11,158,343			11,293,144

Financial Services Business
Current liabilities
Short-term borrowings		4,605,389			4,929,478			4,929,478			5,113,888
Current portion of long-term debt		4,129,005			4,053,538			4,053,538			4,127,133
Accounts payable		33,283			40,251			40,251			39,187
Accrued expenses		117,773			145,127			145,127			161,105
Income taxes payable		20,473			32,711			32,711			20,295
Other current liabilities		833,813			870,634			870,634			997,842

Total current liabilities		9,739,736			10,071,739			10,071,739			10,459,450

Long-term liabilities
Long-term debt		9,491,504			9,574,118			9,574,118			9,974,516
Accrued pension and severance costs		14,386			14,049			14,049			15,029
Other long-term liabilities		987,289			678,858			678,858			722,279

Total long-term liabilities		10,493,179			10,267,025			10,267,025			10,711,824

Total Financial Services Business liabilities		20,232,915			20,338,764			20,338,764			21,171,274

Eliminations		(999,392	)		(1,110,934	)		(1,110,934	)		(1,092,679	)

Total liabilities		30,081,233			30,386,173			30,386,173			31,371,739

Mezzanine equity		485,877			491,974			491,974			498,073

Total Toyota Motor Corporation shareholders’ equity		17,514,812			18,735,982			18,735,982			19,348,152

Noncontrolling interests		668,264			694,120			694,120			718,985

Total shareholders’ equity		18,183,076			19,430,102			19,430,102			20,067,137

Total liabilities, mezzanine equity and shareholders’ equity		48,750,186			50,308,249			50,308,249			51,936,949

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Statements of income -


	Yen in millions									Yen in millions
	For the years ended March 31,									For the years ended March 31,
	2016			2017			2018			2017			2018			2019
Non-Financial Services Businesses
Net revenues		26,581,102			25,845,453			27,448,165			25,845,453			27,448,165			28,133,676

Costs and expenses
Cost of revenues		21,474,386			21,557,194			22,613,450			21,557,194			22,613,450			23,400,550
Selling, general and administrative		2,589,082			2,511,647			2,721,362			2,511,647			2,721,362			2,591,249

Total costs and expenses		24,063,468			24,068,841			25,334,812			24,068,841			25,334,812			25,991,799

Operating income		2,517,634			1,776,612			2,113,353			1,776,612			2,113,353			2,141,877

Other income (expense), net		117,930			200,370			222,326			200,370			222,326			(161,608	)

Income before income taxes and equity in earnings of affiliated companies		2,635,564			1,976,982			2,335,679			1,976,982			2,335,679			1,980,269

Provision for income taxes		752,248			562,452			738,763			562,452			738,763			580,031
Equity in earnings of affiliated companies		327,167			360,130			467,718			360,130			467,718			357,527

Net income		2,210,483			1,774,660			2,064,634			1,774,660			2,064,634			1,757,765

Less - Net income attributable to noncontrolling interests		(117,544	)		(89,337	)		(89,533	)		(89,337	)		(89,533	)		(97,500	)

Net income attributable to Toyota Motor Corporation -Non-Financial Services Businesses		2,092,939			1,685,323			1,975,101			1,685,323			1,975,101			1,660,265

Financial Services Business
Net revenues		1,896,224			1,823,600			2,017,008			1,823,600			2,017,008			2,153,547

Costs and expenses
Cost of revenues		1,181,437			1,221,268			1,320,348			1,221,268			1,320,348			1,418,636
Selling, general and administrative		375,561			379,904			411,114			379,904			411,114			412,090

Total costs and expenses		1,556,998			1,601,172			1,731,462			1,601,172			1,731,462			1,830,726

Operating income		339,226			222,428			285,546			222,428			285,546			322,821

Other income (expense), net		8,579			(5,618	)		(794	)		(5,618	)		(794	)		(17,658	)

Income before income taxes and equity in earnings of affiliated companies		347,805			216,810			284,752			216,810			284,752			305,163

Provision for income taxes		126,319			66,583			(234,356	)		66,583			(234,356	)		79,903
Equity in earnings of affiliated companies		1,932			1,930			2,365			1,930			2,365			2,539

Net income		223,418			152,157			521,473			152,157			521,473			227,799

Less - Net income attributable to noncontrolling interests		(3,963	)		(6,518	)		(2,589	)		(6,518	)		(2,589	)		(5,214	)

Net income attributable to Toyota Motor Corporation - Financial Services Business		219,455			145,639			518,884			145,639			518,884			222,585

Eliminations		300			147			(2	)		147			(2	)		23

Net income attributable to Toyota Motor Corporation		2,312,694			1,831,109			2,493,983			1,831,109			2,493,983			1,882,873

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Statements of cash flows -


	Yen in millions									Yen in millions									Yen in millions									Yen in millions
	For the year ended March 31, 2016									For the year ended March 31, 2017									For the year ended March 31, 2017									For the year ended March 31, 2018
	Non-Financial Services Businesses			Financial Services Business			Consolidated			Non-Financial Services Businesses			Financial Services Business			Consolidated			Non-Financial Services Businesses			Financial Services Business			Consolidated			Non-Financial Services Businesses			Financial Services Business			Consolidated
Cash flows from operating activities
Net income		2,210,483			223,418			2,434,211			1,774,660			152,157			1,926,985			1,774,660			152,157			1,926,985			2,064,634			521,473			2,586,106
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		927,846			697,991			1,625,837			939,795			671,155			1,610,950			939,795			671,155			1,610,950			1,010,972			723,061			1,734,033
Provision for doubtful accounts and credit losses		69,029			90,236			159,265			6,519			92,147			98,666
Provision (reversal) for doubtful accounts and credit losses																				6,519			92,147			98,666			(74	)		76,143			76,069
Pension and severance costs, less payments		8,300			533			8,833			21,796			1,457			23,253			21,796			1,457			23,253			5,027			(741	)		4,286
Losses on disposal of fixed assets		33,293			36			33,329			30,461			212			30,673			30,461			212			30,673			35,010			279			35,289
Unrealized losses onavailable-for-sale securities, net		3,217			6,055			9,272			4,422			2,651			7,073
Unrealized losses (gains) on marketable securities																				4,422			2,651			7,073			459			387			846
Deferred income taxes		(43,237	)		76,423			32,889			(59,668	)		6,504			(53,299	)		(59,668	)		6,504			(53,299	)		64,143			(302,103	)		(237,961	)
Equity in earnings of affiliated companies		(327,167	)		(1,932	)		(329,099	)		(360,130	)		(1,930	)		(362,060	)		(360,130	)		(1,930	)		(362,060	)		(467,718	)		(2,365	)		(470,083	)
Changes in operating assets and liabilities, and other		386,529			148,376			486,320			206,455			103,840			131,996			206,455			258,091			286,247			205,434			312,828			494,543

Net cash provided by operating activities		3,268,293			1,241,136			4,460,857			2,564,310			1,028,193			3,414,237			2,564,310			1,182,444			3,568,488			2,917,887			1,328,962			4,223,128

Cash flows from investing activities
Additions to finance receivables		—			(23,399,113	)		(13,549,278	)		—			(22,894,114	)		(13,636,694	)		—			(22,894,114	)		(13,636,694	)		—			(25,153,088	)		(15,058,516	)
Collection of and proceeds from sales of finance receivables		—			22,918,132			13,115,854			—			22,006,010			12,927,981			—			22,006,010			12,927,981			—			24,117,335			14,046,312
Additions to fixed assets excluding equipment leased to others		(1,265,174	)		(17,371	)		(1,282,545	)		(1,206,738	)		(17,140	)		(1,223,878	)		(1,206,738	)		(17,140	)		(1,223,878	)		(1,276,788	)		(14,329	)		(1,291,117	)
Additions to equipment leased to others		(155,931	)		(2,620,740	)		(2,776,671	)		(152,550	)		(2,165,009	)		(2,317,559	)		(152,550	)		(2,165,009	)		(2,317,559	)		(155,114	)		(2,152,476	)		(2,307,590	)
Proceeds from sales of fixed assets excluding equipment leased to others		41,154			993			42,147			40,189			1,049			41,238			40,189			1,049			41,238			70,755			1,065			71,820
Proceeds from sales of equipment leased to others		60,989			1,050,738			1,111,727			72,659			1,165,619			1,238,278			72,659			1,165,619			1,238,278			63,402			1,147,870			1,211,272
Purchases of marketable securities and security investments		(1,302,965	)		(894,512	)		(2,197,477	)		(2,104,202	)		(412,806	)		(2,517,008	)		(2,104,202	)		(412,806	)		(2,517,008	)		(2,273,805	)		(779,111	)		(3,052,916	)
Proceeds from sales of and maturity of marketable securities and security investments		2,471,876			943,939			3,415,815			1,435,267			466,274			1,901,541			1,435,267			466,274			1,901,541			1,762,189			761,349			2,523,538
Payment for additional investments in affiliated companies, net of cash acquired		628			—			628			44,274			—			44,274			44,274			—			44,274			(576	)		—			(576	)
Changes in investments and other assets, and other		(1,371,996	)		296,788			(1,062,744	)		582,649			(60,345	)		571,888			582,649			(60,345	)		571,888			260,015			(106,597	)		197,681

Net cash used in investing activities		(1,521,419	)		(1,721,146	)		(3,182,544	)		(1,288,452	)		(1,910,462	)		(2,969,939	)		(1,288,452	)		(1,910,462	)		(2,969,939	)		(1,549,922	)		(2,177,982	)		(3,660,092	)

Cash flows from financing activities
Proceeds from issuance of long-term debt		110,691			4,815,323			4,845,872			111,727			4,541,541			4,603,446			111,727			4,541,541			4,603,446			212,387			4,666,579			4,793,939
Payments of long-term debt		(71,758	)		(4,127,178	)		(4,176,202	)		(82,840	)		(3,773,644	)		(3,845,554	)		(82,840	)		(3,773,644	)		(3,845,554	)		(170,072	)		(4,314,294	)		(4,452,338	)
Increase (decrease) in short-term borrowings		75,990			(132,852	)		(10,903	)		51,523			233,331			273,037			51,523			233,331			273,037			(122,222	)		461,052			347,738
Proceeds from issuance of class shares		474,917			—			474,917			—			—			—
Dividends paid to Toyota Motor Corporation class shareholders		(1,225	)		—			(1,225	)		(3,697	)		—			(3,697	)		(3,697	)		—			(3,697	)		(6,194	)		—			(6,194	)
Dividends paid to Toyota Motor Corporation common shareholders		(704,728	)		—			(704,728	)		(634,475	)		—			(634,475	)		(634,475	)		—			(634,475	)		(620,698	)		—			(620,698	)
Dividends paid to noncontrolling interests		(73,129	)		—			(73,129	)		(63,936	)		—			(63,936	)		(63,936	)		—			(63,936	)		(63,764	)		—			(63,764	)
Reissuance (repurchase) of treasury stock, and other		(778,173	)		—			(778,173	)		(703,986	)		—			(703,986	)
Reissuance (repurchase) of treasury stock																				(703,986	)		—			(703,986	)		(447,818	)		—			(447,818	)

Net cash provided by (used in) financing activities		(967,415	)		555,293			(423,571	)		(1,325,684	)		1,001,228			(375,165	)		(1,325,684	)		1,001,228			(375,165	)		(1,218,381	)		813,337			(449,135	)

Effect of exchange rate changes on cash and cash equivalents		(142,301	)		(57,570	)		(199,871	)		(11,262	)		(2,224	)		(13,486	)
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents																				(11,262	)		(2,224	)		(13,486	)		(16,124	)		(27,464	)		(43,588	)

Net increase (decrease) in cash and cash equivalents		637,158			17,713			654,871			(61,088	)		116,735			55,647
Cash and cash equivalents at beginning of year		1,680,994			603,563			2,284,557			2,318,152			621,276			2,939,428
Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents																				(61,088	)		270,986			209,898			133,460			(63,147	)		70,313

Cash and cash equivalents at end of year		2,318,152			621,276			2,939,428			2,257,064			738,011			2,995,075
Cash and cash equivalents and restricted cash and cash equivalents at beginning of year																				2,318,152			621,276			2,939,428			2,257,064			892,262			3,149,326

Cash and cash equivalents and restricted cash and cash equivalents at end of year																				2,257,064			892,262			3,149,326			2,390,524			829,115			3,219,639

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)


	Yen in millions									Yen in millions
	For the year ended March 31, 2018									For the year ended March 31, 2019
	Non-Financial Services Businesses			Financial Services Business			Consolidated			Non-Financial Services Businesses			Financial Services Business			Consolidated
Cash flows from operating activities
Net income		2,064,634			521,473			2,586,106			1,757,765			227,799			1,985,587
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		1,010,972			723,061			1,734,033			1,033,528			758,847			1,792,375
Provision for doubtful accounts and credit losses		(74	)		76,143			76,069
Provision (reversal) for doubtful accounts and credit losses											(1,375	)		81,440			80,065
Pension and severance costs, less payments		5,027			(741	)		4,286			30,477			1,168			31,645
Losses on disposal of fixed assets		35,010			279			35,289			33,676			2,226			35,902
Unrealized losses onavailable-for-sale securities, net		459			387			846
Unrealized losses (gains) on marketable securities											338,626			846			339,472
Deferred income taxes		64,143			(302,103	)		(237,961	)		(110,346	)		23,742			(86,594	)
Equity in earnings of affiliated companies		(467,718	)		(2,365	)		(470,083	)		(357,527	)		(2,539	)		(360,066	)
Changes in operating assets and liabilities, and other		205,434			299,709			481,424			(17,488	)		15,557			(51,789	)

Net cash provided by operating activities		2,917,887			1,315,843			4,210,009			2,707,336			1,109,086			3,766,597

Cash flows from investing activities
Additions to finance receivables		—			(25,153,088	)		(15,058,516	)		—			(26,000,249	)		(15,884,610	)
Collection of and proceeds from sales of finance receivables		—			24,117,335			14,046,312			—			24,925,930			14,859,103
Additions to fixed assets excluding equipment leased to others		(1,276,788	)		(14,329	)		(1,291,117	)		(1,435,964	)		(16,761	)		(1,452,725	)
Additions to equipment leased to others		(155,114	)		(2,152,476	)		(2,307,590	)		(137,314	)		(2,148,848	)		(2,286,162	)
Proceeds from sales of fixed assets excluding equipment leased to others		70,755			1,065			71,820			63,955			1,482			65,437
Proceeds from sales of equipment leased to others		63,402			1,147,870			1,211,272			60,657			1,324,417			1,385,074
Purchases of marketable securities and security investments		(2,273,805	)		(779,111	)		(3,052,916	)		(1,737,107	)		(103,248	)		(1,840,355	)
Proceeds from sales of and maturity of marketable securities and security investments		1,762,189			761,349			2,523,538			2,255,635			443,163			2,698,798
Payment for additional investments in affiliated companies, net of cash acquired		(576	)		—			(576	)		5,010			—			5,010
Changes in investments and other assets, and other		260,015			(106,597	)		197,681			(268,946	)		(4,130	)		(246,811	)

Net cash used in investing activities		(1,549,922	)		(2,177,982	)		(3,660,092	)		(1,194,074	)		(1,578,244	)		(2,697,241	)

Cash flows from financing activities
Proceeds from issuance of long-term debt		212,387			4,666,579			4,793,939			286,085			4,747,506			5,000,921
Payments of long-term debt		(170,072	)		(4,314,294	)		(4,452,338	)		(142,556	)		(4,336,250	)		(4,442,232	)
Increase (decrease) in short-term borrowings		(122,222	)		461,052			347,738			49,161			144,277			164,282
Proceeds from issuance of class shares		—			—			—
Dividends paid to Toyota Motor Corporation class shareholders		(6,194	)		—			(6,194	)		(8,690	)		—			(8,690	)
Dividends paid to Toyota Motor Corporation common shareholders		(620,698	)		—			(620,698	)		(636,116	)		—			(636,116	)
Dividends paid to noncontrolling interests		(63,764	)		—			(63,764	)		(69,367	)		—			(69,367	)
Reissuance (repurchase) of treasury stock, and other		(447,818	)		—			(447,818	)
Reissuance (repurchase) of treasury stock											(549,637	)		—			(549,637	)

Net cash provided by (used in) financing activities		(1,218,381	)		813,337			(449,135	)		(1,071,120	)		555,533			(540,839	)

Effect of exchange rate changes on cash and cash equivalents		(16,124	)		(27,464	)		(43,588	)
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents											(42,454	)		813			(41,641	)

Net increase (decrease) in cash and cash equivalents		133,460			(76,266	)		57,194
Cash and cash equivalents at beginning of year		2,257,064			738,011			2,995,075
Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents											399,688			87,188			486,876
Cash and cash equivalents and restricted cash and cash equivalents at beginning of year											2,390,524			829,115			3,219,639

Cash and cash equivalents at end of year		2,390,524			661,745			3,052,269
Cash and cash equivalents and restricted cash and cash equivalents at end of year											2,790,212			916,303			3,706,515

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

26. Net revenues

Summary by business segments and products -

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


	Yen in millions
	For the year ended March 31, 2019
Sales of products
Automotive
Vehicles		23,066,190
Parts and components for overseas production		625,483
Parts and components for after service		2,093,437
Other		1,249,382

Total automotive		27,034,492
All other		1,070,846

Total sales of products		28,105,338
Financial services		2,120,343

Total net revenues		30,225,681

The majority of sales of products are revenues recognized from contracts with customers based on ASC 606 “Revenue from Contracts with customers,” and receivables related to such revenues are recognized as “Trade accounts and notes receivable, less allowance for doubtful accounts.” For the year ended March 31, 2019, ¥84,230 million of financial service revenues were accounted for under ASU2014-09.

Contract liabilities -

Contract liabilities consist of the following:


	Yen in millions
	April 1, 2018		March 31, 2019
Contract liabilities		519,422		675,018

Contract liabilities are mainly related to advances received from customers. On the consolidated financial statements, contract liabilities are included in “Other current liabilities” or “Other long-term liabilities”. For the year ended March 31, 2019, the amount of revenue recognized which was included in the contract liability balance as of April 1, 2018 was ¥336,206 million.

Performance obligations -

As of March 31, 2019, which is the end of the reporting period, the aggregate amount of transaction price allocated to unsatisfied performance obligations related to contracts that have original expected durations in excess of one year was ¥553,218 million.

The main contents of unsatisfied performance obligations related to contracts are insurance revenues and maintenance revenues.

For insurance revenues, we receive the payment agreed upon in the contract at the inception of the contract, and revenue is recognized over the term of the contract, which ranges from 3 to 120 months. As of March 31, 2019, the unsatisfied performance obligations related to insurance revenues was ¥212,384 million, and we expect to recognize as revenue ¥63,611 million in fiscal 2020, and ¥148,773 million thereafter.

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For maintenance revenues, we receive the payment agreed upon in the contract at the inception of the contract, and revenue is recognized over the term of the contract, which ranges from 18 to 84 months.

Unsatisfied performance obligations for sales of products related to contracts that have an original expected duration of one year or less have been excluded from this disclosure.

27. Per share amounts:

Reconciliations of the differences between basic and diluted net income attributable to Toyota Motor Corporation per common share for the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018~~2019 are as follows:


	Yen in millions			Thousands of shares		Yen		Yen in millions			Thousands of shares		Yen
	Net income attributable to Toyota Motor Corporation			Weighted- average common shares		Net income attributable to Toyota Motor Corporation per common share
For the year ended March 31, 2016
Net income attributable to Toyota Motor Corporation		2,312,694
Accretion to Mezzanine equity		(3,638	)
Dividends to Toyota Motor Corporation Model AA Class Shareholders		(2,449	)

Basic net income attributable to Toyota Motor Corporation per common share		2,306,607			3,111,306		741.36
Effect of dilutive securities
Model AA Class Shares		6,087			32,429
Assumed exercise of dilutive stock options		(21	)		1,212

Diluted net income attributable to Toyota Motor Corporation per common share		2,312,673			3,144,947		735.36
								Net income attributable to Toyota Motor Corporation			Weighted- average common shares		Net income attributable to Toyota Motor Corporation per common share
For the year ended March 31, 2017
Net income attributable to Toyota Motor Corporation		1,831,109							1,831,109
Accretion to Mezzanine equity		(4,849	)						(4,849	)
Dividends to Toyota Motor Corporation Model AA Class Shareholders		(4,946	)						(4,946	)

Basic net income attributable to Toyota Motor Corporation per common share		1,821,314			3,008,088		605.47		1,821,314			3,008,088		605.47
Effect of dilutive securities
Model AA Class Shares		9,795			47,100				9,795			47,100
Assumed exercise of dilutive stock options		(6	)		638				(6	)		638

Diluted net income attributable to Toyota Motor Corporation per common share		1,831,103			3,055,826		599.22		1,831,103			3,055,826		599.22

For the year ended March 31, 2018
Net income attributable to Toyota Motor Corporation		2,493,983							2,493,983
Accretion to Mezzanine equity		(4,849	)						(4,849	)
Dividends to Toyota Motor Corporation Model AA Class Shareholders		(7,442	)						(7,442	)

Basic net income attributable to Toyota Motor Corporation per common share		2,481,692			2,947,365		842.00		2,481,692			2,947,365		842.00
Effect of dilutive securities
Model AA Class Shares		12,291			47,100				12,291			47,100
Assumed exercise of dilutive stock options		(4	)		301				(4	)		301

Diluted net income attributable to Toyota Motor Corporation per common share		2,493,979			2,994,766		832.78		2,493,979			2,994,766		832.78

For the year ended March 31, 2019
Net income attributable to Toyota Motor Corporation									1,882,873
Accretion to Mezzanine equity									(4,850	)
Dividends to Toyota Motor Corporation Model AA Class Shareholders									(9,938	)

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)


	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
Basic net income attributable to Toyota Motor Corporation per common share		1,868,085			2,871,534		650.55
Effect of dilutive securities
Model AA Class Shares		14,788			47,100
Assumed exercise of dilutive stock options		(0	)		40

Diluted net income attributable to Toyota Motor Corporation per common share		1,882,873			2,918,674		645.11

In addition to the disclosure requirements under U.S.GAAP, Toyota discloses the information below in order to provide financial statements users with valuable information.

The following table shows Toyota Motor Corporation shareholders’ equity per share as of March 31, ~~2017~~2018 and ~~2018.~~2019. Toyota Motor Corporation shareholders’ equity per share amounts are calculated by dividing Toyota Motor Corporation shareholders’ equities’ amount at the end of each period by the number of shares issued and outstanding, excluding treasury stock at the end of the corresponding period.


	Yen in millions		Thousands of shares		Yen		Yen in millions		Thousands of shares		Yen
	Toyota Motor Corporation shareholders’ equity		Common shares issued and outstanding at the end of the year (excluding treasury stock)		Toyota Motor Corporation shareholders’ equity per share		Toyota Motor Corporation shareholders’ equity		Common shares issued and outstanding at the end of the year (excluding treasury stock)		Toyota Motor Corporation shareholders’ equity per share
As of March 31, 2017		17,514,812		2,974,723		5,887.88
As of March 31, 2018		18,735,982		2,909,924		6,438.65		18,735,982		2,909,924		6,438.65
As of March 31, 2019								19,348,152		2,832,439		6,830.92

~~27.~~28. Fair value measurements:

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


Level 1:		Quoted prices in active markets for identical assets or liabilities

Level 2:		Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; valuation of assets or liabilities using inputs, other than quoted prices, that are observable

Level 3:		Valuation of assets or liabilities using unobservable inputs which reflect the reporting entity’s assumptions

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table summarizes the fair values of the assets and liabilities measured at fair value on a recurring basis as of March 31, ~~2017~~2018 and ~~2018.~~2019. Transfers between levels of the fair value are recognized at the end of their respective reporting periods:

   Yen in millions
   March 31, 2017
   Level 1    Level 2 Level 3 Total
Assets

Cash equivalents
   41,876    891,606 —   933,482
Time deposits
   —      600,000 —   600,000
Marketable securities and other securities investments

Public and corporate bonds
   4,797,499    1,079,385 8,947 5,885,831
Common stocks
   2,686,934    —   —   2,686,934
Other
   18,191    73,246 —   91,437
Investments measured at net asset value
   —      —   —   735,131
Derivative financial instruments
   —      243,334 87 243,421




Total
   7,544,500    2,887,571 9,034 11,176,236




Liabilities

Derivative financial instruments
   —      (237,848 ) (7,609 ) (245,457 )




Total
   —      (237,848 ) (7,609 ) (245,457 )


	Yen in millions											Yen in millions
	March 31, 2018											March 31, 2018
	Level 1		Level 2			Level 3			Total			Level 1		Level 2			Level 3			Total
Assets
Cash equivalents		44,897		774,209			—			819,106			44,897		774,209			—			819,106
Time deposits		—		400,000			—			400,000			—		400,000			—			400,000
Marketable securities and other securities investments
Public and corporate bonds		4,778,019		1,523,227			7,488			6,308,734			4,778,019		1,523,227			7,488			6,308,734
Common stocks		2,582,115		—			—			2,582,115			2,582,115		—			—			2,582,115
Other		169,282		50,746			—			220,028			169,282		50,746			—			220,028
Investments measured at net asset value		—		—			—			516,951			—		—			—			516,951
Derivative financial instruments		—		257,795			9			257,804			—		257,795			9			257,804

Total		7,574,313		3,005,977			7,497			11,104,738			7,574,313		3,005,977			7,497			11,104,738

Liabilities
Derivative financial instruments		—		(194,935	)		(2,221	)		(197,156	)		—		(194,935	)		(2,221	)		(197,156	)

Total		—		(194,935	)		(2,221	)		(197,156	)		—		(194,935	)		(2,221	)		(197,156	)


												Yen in millions
												March 31, 2019
												Level 1		Level 2			Level 3			Total
Assets
Cash equivalents													249,193		594,200			—			843,393
Time deposits													—		520,000			—			520,000
Marketable securities and other securities investments
Public and corporate bonds													4,378,543		1,452,475			15,171			5,846,189
Common stocks													2,154,951		—			—			2,154,951
Other													189,389		6,007			—			195,396
Investments measured at net asset value													—		—			—			98,451
Derivative financial instruments													—		200,256			77			200,333

Total													6,972,076		2,772,938			15,248			9,858,713

Liabilities
Derivative financial instruments													—		(231,915	)		—			(231,915	)

Total													—		(231,915	)		—			(231,915	)

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.

~~TOYOTA MOTOR CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

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

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Cash equivalents and time deposits -

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

Marketable securities and other securities investments -

Marketable securities and other securities investments include public and corporate bonds, common stocks and other investments. Public and corporate bonds include government bonds. Japanese bonds and foreign bonds including U.S., European and other bonds represent ~~28% and 72% (as of March 31, 2017) and~~ 16% and 84% (as of March 31, 2018) and 17% and 83% (as of March 31, 2019) of public and corporate bonds, respectively. Listed stocks on the Japanese stock markets represent ~~92%~~93% and ~~93%~~91% of common stocks as of March 31, ~~2017~~2018 and ~~2018,~~2019, 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 quotednon-active~~ ~~market prices for identical assets to measure fair value of these securities. These assets are classified in Level 2.~~

Derivative financial instruments -

See note 21 to the consolidated financial statements about derivative financial instruments. Toyota primarily estimates the fair value of derivative financial instruments using industry-standard valuation models that require observable inputs including interest rates and foreign exchange rates, and the contractual terms. The usage of these models does not require significant judgment to be applied. These derivative financial instruments are classified in Level 2. In other certain cases when market data is not available, key inputs to the fair value measurement include quotes from counterparties, and other market data. Toyota assesses the reasonableness of changes of the quotes using observable market data. These derivative financial instruments are classified in Level 3. Toyota’s derivative fair value measurements consider assumptions about counterparty and Toyota’s ownnon-performance risk, using such as credit default probabilities.

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table summarizes the changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the periods ended March 31, ~~2016,~~ 2017, 2018 and ~~2018:~~2019:

   Yen in millions
   For the year ended March 31, 2016
   Marketable
securities and
other securities
investments Derivative
financial
instruments Total
Balance at beginning of year
   12,317 1,010 13,327
Total gains (losses)

Included in income (loss)
   1 2,507 2,508
Included in other comprehensive income (loss)
   (286 ) —   (286 )
Purchases and issuances
   931 —   931
Settlements
   (1,451 ) (479 ) (1,930 )
Other
   (1,178 ) (189 ) (1,367 )


Balance at end of year
   10,334 2,849    13,183

   Yen in millions
   For the year ended March 31, 2017
   Marketable
securities and
other securities
investments Derivative
financial
instruments Total
Balance at beginning of year
   10,334 2,849 13,183
Total gains (losses)

Included in income (loss)
   (16 ) (7,310 ) (7,326 )
Included in other comprehensive income (loss)
   60 —   60
Purchases and issuances
   1,126 —   1,126
Settlements
   (2,282 ) (2,693 ) (4,975 )
Other
   (275 ) (368 ) (643 )


Balance at end of year
   8,947 (7,522 ) 1,425


	Yen in millions									Yen in millions
	For the year ended March 31, 2018									For the year ended March 31, 2017
	Marketable securities and other securities investments			Derivative financial instruments			Total			Marketable securities and other securities investments			Derivative financial instruments			Total
Balance at beginning of year		8,947			(7,522	)		1,425			10,334			2,849			13,183
Total gains (losses)
Included in income (loss)		17			805			822			(16	)		(7,310	)		(7,326	)
Included in other comprehensive income (loss)		(12	)		—			(12	)		60			—			60
Purchases and issuances		3,860			—			3,860			1,126			—			1,126
Settlements		(4,739	)		4,320			(419	)		(2,282	)		(2,693	)		(4,975	)
Other		(585	)		185			(400	)		(275	)		(368	)		(643	)

Balance at end of year		7,488			(2,212	)		5,276			8,947			(7,522	)		1,425


										Yen in millions
										For the year ended March 31, 2018
										Marketable securities and other securities investments			Derivative financial instruments			Total
Balance at beginning of year											8,947			(7,522	)		1,425
Total gains (losses)
Included in income (loss)											17			805			822
Included in other comprehensive income (loss)											(12	)		—			(12	)
Purchases and issuances											3,860			—			3,860
Settlements											(4,739	)		4,320			(419	)
Other											(585	)		185			(400	)

Balance at end of year											7,488			(2,212	)		5,276


										Yen in millions
										For the year ended March 31, 2019
										Marketable securities and other securities investments			Derivative financial instruments			Total
Balance at beginning of year											7,488			(2,212	)		5,276
Total gains (losses)
Included in income (loss)											1			3,169			3,170
Included in other comprehensive income (loss)											82			—			82
Purchases and issuances											5,254			—			5,254
Settlements											(2,875	)		(784	)		(3,659	)
Other											337			(96	)		241

Balance at end of year											10,287			77			10,364

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

“Included in income (loss)” in marketable securities and other securities investments and derivative financial instruments are included in “Other income (loss), net” and “Cost of financing operations” in the accompanying consolidated statements of income, respectively.

In the reconciliation table above, derivative financial instruments are presented net of assets and liabilities. “Other” includes the currency translation adjustments for the years ended March 31, ~~2016,~~ 2017, 2018 and ~~2018.~~2019.

As of March 31, ~~2018,~~2019, the Level 3 assets and liabilities measured at fair value on a recurring basis are not significant.

Certain assets and liabilities are measured at fair value on a nonrecurring basis. During the years ended March 31, ~~2017~~2018 and ~~2018,~~2019, Toyota measured certain finance receivables at fair value of ~~¥47,999~~¥45,492 million and ~~¥45,492~~¥58,611 million based on the collateral value, resulting in ~~gain~~loss of ~~¥2,405~~¥4,190 million and loss of ~~¥4,190~~¥3,305 million, respectively. This fair value measurement on a nonrecurring basis is classified in Level 3. See note 22 to the consolidated financial statements for the fair value measurement. These Level 3 financial assets are not significant.

29. Significant subsequent events:

At the Meeting of the Board of Directors held on May 9, 2019, Toyota resolved to conclude contracts aimed toward the establishment of a new joint venture (“Prime Life Technologies Corporation” or “joint venture”) related to a town development business with Panasonic Corporation.

Toyota will make Toyota Housing Corporation and Misawa Homes Co., Ltd. its wholly-owned subsidiaries and thereafter will transfer all of the outstanding shares of those two subsidiaries to the joint venture by a joint share transfer. Management is evaluating the impact of this agreement on Toyota’s consolidated financial statements.

ITEM 19. EXHIBITS

Index to Exhibits



1.1		Amended and Restated Articles of Incorporation of the Registrant (English translation)(incorporated by reference to Exhibit 1.1 to Toyota’s Annual Report on Form20-F for the fiscal year ended March 31, 2015, filed with the SEC on June 24, 2015 (file no.001-14948))

1.2		Amended and Restated Regulations of the Board of Directors of the Registrant (English translation)

1.3		Amended and Restated Regulations of the Audit & Supervisory Board of the Registrant (English translation) (incorporated by reference to Exhibit 1.3 to Toyota’s Annual Report on Form20-F for the fiscal year ended March 31, 2016, filed with the SEC on June 24, 2016 (file no.001-14948))

2.1		Amended and Restated Share Handling Regulations of the Registrant (English translation) (incorporated by reference to Exhibit 2.1 to Toyota’s Annual Report on Form20-F for the fiscal year ended March 31, 2015, filed with the SEC on June 24, 2015 (file no.001-14948))

2.2		Form of Deposit Agreement among the Registrant, The Bank of New York (predecessor of The Bank of New York Mellon), as depositary, and the owners and beneficial owners from time to time of American Depositary Receipts, including the form of American Depositary Receipt (incorporated by reference to Exhibit 1 to Toyota’s Registration Statement on FormF-6, filed with the SEC on November 7, 2006 (file no.333-138477))

2.3		Form of ADR (included in Exhibit 2.2)

2.4		Description of Securities

8.1		List of Principal Subsidiaries (See “Organizational Structure” in “Item 4. Information on the Company”)

11.1		Code of Ethics of the Registrant applicable to its members of the board of directors and ~~managing~~operating officers, including its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions (English translation)

12.1		Certifications of the Registrant’s President and Executive Vice President, both Members of the Board, pursuant to Section 302 of the Sarbanes-Oxley Act

13.1		Certifications of the Registrant’s President and Executive Vice President, both Members of the Board, pursuant to Section 906 of the Sarbanes-Oxley Act

15.1		Consent of Independent Registered Public Accounting Firm

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema

101.CAL		XBRL Taxonomy Extension Calculation Linkbase

101.DEF		XBRL Taxonomy Extension Definition Linkbase

101.LAB		XBRL Taxonomy Extension Label Linkbase

101.PRE		XBRL Taxonomy Extension Presentation Linkbase

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.


TOYOTA MOTOR CORPORATION

By:		/s/ M~~ASAYOSHI~~ S~~HIRAYANAGI~~ Masayoshi Shirayanagi
Name:		Masayoshi Shirayanagi
Title:		~~Senior Managing~~Operating Officer

Date: June ~~25, 2018~~21, 2019


Title of ~~Each Class:~~each class	Trading Symbol(s)	Name of ~~Each Exchange~~each exchange on ~~Which Registered:~~which registered
American Depositary Shares*	TM	The New York Stock Exchange
Common Stock**


Large accelerated filer ☒	Accelerated filer ☐	Non-accelerated filer ☐

		Emerging growth company ☐


ITEM 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS	1

ITEM 2.	OFFER STATISTICS AND EXPECTED TIMETABLE	1

ITEM 3.	KEY INFORMATION	1

3.A	SELECTED FINANCIAL DATA	1
3.B	CAPITALIZATION AND INDEBTEDNESS	4
3.C	REASONS FOR THE OFFER AND USE OF PROCEEDS	4
3.D	RISK FACTORS	54

ITEM 4.	INFORMATION ON THE COMPANY	8

4.A	HISTORY AND DEVELOPMENT OF THE COMPANY	8
4.B	BUSINESS OVERVIEW	98
4.C	ORGANIZATIONAL STRUCTURE	5449
4.D	PROPERTY, PLANTS AND EQUIPMENT	5550

ITEM 4A.	UNRESOLVED STAFF COMMENTS	5651

ITEM 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS	5651

5.A	OPERATING RESULTS	5651
5.B	LIQUIDITY AND CAPITAL RESOURCES	8782
5.C	RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES	9084
5.D	TREND INFORMATION	9287
5.E	OFF-BALANCE SHEET ARRANGEMENTS	9287
5.F	TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS	9388
5.G	SAFE HARBOR	9489

ITEM 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	9489

6.A	DIRECTORS AND SENIOR MANAGEMENT	9489
6.B	COMPENSATION	~~100~~96
6.C	BOARD PRACTICES	~~101~~99
6.D	EMPLOYEES	~~103~~100
6.E	SHARE OWNERSHIP	~~103~~101

ITEM 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	~~104~~102

7.A	MAJOR SHAREHOLDERS	~~104~~102
7.B	RELATED PARTY TRANSACTIONS	~~105~~103
7.C	INTERESTS OF EXPERTS AND COUNSEL	~~106~~103

ITEM 8.	FINANCIAL INFORMATION	~~106~~103

8.A	CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION	~~106~~103
8.B	SIGNIFICANT CHANGES	~~106~~103

ITEM 9.	THE OFFER AND LISTING	~~107~~104

9.A	LISTING DETAILS	~~107~~104
9.B	PLAN OF DISTRIBUTION	~~107~~104
9.C	MARKETS	~~107~~104
9.D	SELLING SHAREHOLDERS	~~108~~104
9.E	DILUTION	~~108~~104
9.F	EXPENSES OF THE ISSUE	~~108~~104

ITEM 10.	ADDITIONAL INFORMATION	~~108~~104

10.A	SHARE CAPITAL	~~108~~104
10.B	MEMORANDUM AND ARTICLES OF ASSOCIATION	~~108~~104
10.C	MATERIAL CONTRACTS	~~116~~112
10.D	EXCHANGE CONTROLS	~~116~~112


	Year Ended March 31,										Year Ended March 31,
	2014		2015		2016		2017		2018		2015		2016		2017		2018		2019
	(Yen in millions, except per share and numbers of vehicles sold data)										(Yen in millions, except per share and numbers of vehicles sold data)
Consolidated Balance Sheet Data (end of period):
Total Assets:		41,437,473		47,729,830		47,427,597		48,750,186		50,308,249		47,729,830		47,427,597		48,750,186		50,308,249		51,936,949
Short-term debt, including current portion of long-term debt		7,780,483		8,963,492		8,521,088		9,244,131		9,341,190		8,963,492		8,521,088		9,244,131		9,341,190		9,599,233
Long-term debt, less current portion		8,546,910		10,014,395		9,772,065		9,911,596		10,006,374		10,014,395		9,772,065		9,911,596		10,006,374		10,550,945
Toyota Motor Corporation shareholders’ equity		14,469,148		16,788,131		16,746,935		17,514,812		18,735,982		16,788,131		16,746,935		17,514,812		18,735,982		19,348,152
Common stock		397,050		397,050		397,050		397,050		397,050		397,050		397,050		397,050		397,050		397,050
Other Data:
Dividends per share (yen)		165.0		200.0		210.0		210.0		220.0	¥	200.0	¥	210.0	¥	210.0	¥	220.0	¥	220.0
Number of vehicles sold
Japan		2,365,410		2,153,694		2,059,093		2,273,962		2,255,313		2,153,694		2,059,093		2,273,962		2,255,313		2,226,177
North America		2,529,398		2,715,173		2,839,229		2,837,334		2,806,467		2,715,173		2,839,229		2,837,334		2,806,467		2,745,047
Europe		844,003		859,038		844,412		924,560		968,077		859,038		844,412		924,560		968,077		994.060
Asia		1,608,355		1,488,922		1,344,836		1,587,822		1,542,806		1,488,922		1,344,836		1,587,822		1,542,806		1,684,494
Other*		1,768,867		1,755,037		1,593,758		1,347,182		1,391,731		1,755,037		1,593,758		1,347,182		1,391,731		1,327,017

Worldwide total		9,116,033		8,971,864		8,681,328		8,970,860		8,964,394		8,971,864		8,681,328		8,970,860		8,964,394		8,976,795


	Cash Dividends per Common Share				Cash Dividends per Common Share
Period Ended	Yen		U.S. dollars		Yen		U.S. dollars
September 30, 2012		30.0		0.38
March 31, 2013		60.0		0.63
September 30, 2013		65.0		0.66		65.0		0.66
March 31, 2014		100.0		0.97		100.0		0.97
September 30, 2014		75.0		0.68		75.0		0.68
March 31, 2015		125.0		1.04		125.0		1.04
September 30, 2015		100.0		0.83		100.0		0.83
March 31, 2016		110.0		0.97		110.0		0.97
September 30, 2016		100.0		0.98		100.0		0.98
March 31, 2017		110.0		0.98		110.0		0.98
September 30, 2017		100.0		0.88		100.0		0.88
March 31, 2018		120.0		1.12		120.0		1.12
September 30, 2018						100.0		0.88
March 31, 2019						120.0		1.08


10.E	TAXATION	~~117~~113
10.F	DIVIDENDS AND PAYING AGENTS	~~123~~119
10.G	STATEMENT BY EXPERTS	~~123~~120
10.H	DOCUMENTS ON DISPLAY	~~123~~120
10.I	SUBSIDIARY INFORMATION	~~123~~120

ITEM 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	~~123~~120

ITEM 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	~~125~~121

12.A	DEBT SECURITIES	~~125~~121
12.B	WARRANTS AND RIGHTS	~~125~~121
12.C	OTHER SECURITIES	~~125~~121
12.D	AMERICAN DEPOSITARY SHARES	~~125~~122

ITEM 13.	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	~~127~~123

ITEM 14.	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	~~127~~123

ITEM 15.	CONTROLS AND PROCEDURES	~~127~~123

ITEM 16.	[RESERVED]	~~128~~124

ITEM 16A.	AUDIT COMMITTEE FINANCIAL EXPERT	~~128~~124

ITEM 16B.	CODE OF ETHICS	~~128~~124

ITEM 16C.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	~~128~~124

ITEM 16D.	EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES	~~130~~126

ITEM 16E.	PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS	~~130~~126

ITEM 16F.	CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT	~~131~~127

ITEM 16G.	CORPORATE GOVERNANCE	~~131~~127

ITEM 16H.	MINE SAFETY DISCLOSURE	~~134~~130

ITEM 17.	FINANCIAL STATEMENTS	~~135~~131

ITEM 18.	FINANCIAL STATEMENTS	~~135~~131

ITEM 19.	EXHIBITS	~~136~~132


Fiscal Year Ended or Ending March 31,	At End of Period		Average (of month-end rates)		High		Low
			(¥ per $1.00)
2014		102.98		100.46		105.25		92.96
2015		119.96		110.78		121.50		101.26
2016		112.42		120.13		125.58		111.30
2017		111.41		108.31		118.32		100.07
2018		106.20		110.70		114.25		104.83
2019 (through May 31, 2018)		108.73		109.01		111.08		105.99

Month Ended					High		Low
					(¥ per $1.00)
December 31, 2017						113.62		111.88
January 31, 2018						113.18		108.38
February 28, 2018						110.40		106.10
March 31, 2018						106.91		104.83
April 30, 2018						109.33		105.99
May 31, 2018						111.08		108.62


	(Thousands of Units)															(Thousands of Units)
	Fiscal Year Ended March 31,															Fiscal Year Ended March 31,
	2014			2015			2016			2017			2018			2015			2016			2017			2018			2019
Japan:
Total market sales (excluding mini-vehicles)		3,433			3,126			3,126			3,360			3,340			3,126			3,126			3,360			3,340			3,339
Toyota sales (retail basis, excluding mini-vehicles)		1,605			1,439			1,462			1,607			1,565			1,439			1,462			1,607			1,565			1,532
Toyota market share		46.7	%		46.0	%		46.8	%		47.8	%		46.9	%		46.0	%		46.8	%		47.8	%		46.9	%		45.9	%

	(Thousands of Units)															(Thousands of Units)
	Calendar Year Ended December 31,															Calendar Year Ended December 31,
	2013			2014			2015			2016			2017			2014			2015			2016			2017			2018
North America:
Total market sales		18,514			19,597			20,804			21,191			20,887			19,597			20,804			21,191			20,887			21,186
Toyota sales (retail basis)		2,520			2,670			2,817			2,798			2,791			2,670			2,817			2,798			2,791			2,798
Toyota market share		13.6	%		13.6	%		13.5	%		13.2	%		13.4	%		13.6	%		13.5	%		13.2	%		13.4	%		13.2	%

Europe:
Total market sales		18,009			18,397			18,971			19,968			20,721			18,397			18,971			19,968			20,721			21,324
Toyota sales (retail basis)		848			888			874			928			1,002			888			874			928			1,002			1,035
Toyota market share		4.7	%		4.8	%		4.6	%		4.6	%		4.8	%		4.8	%		4.6	%		4.6	%		4.8	%		4.9	%

Asia (excluding China):
Total market sales		8,899			8,785			9,287			9,541			10,078			8,785			9,287			9,541			10,078			10,710
Toyota sales (retail basis)		1,427			1,324			1,249			1,305			1,318			1,324			1,249			1,305			1,318			1,365
Toyota market share		16.0	%		15.1	%		13.4	%		13.7	%		13.1	%		15.1	%		13.4	%		13.7	%		13.1	%		12.7	%


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


Brand					Sales Outlets		Market Focus
Lexus						168	Premium brand


Country/Region	Number of Countries		Number of Distributors		Number of Countries		Number of Distributors
North America		3		5		3		5
Europe		53		30		53		29
China		1		4		1		4
Asia (excluding China)		19		13		19		13
Oceania		17		15		17		15
Middle East		16		14		16		14
Africa		55		49		55		49
Central and South America		30		40		30		40


Basic research		Phase to discover development theme Research on basic vehicle-related technology

Forward-looking and leading-edge technology development		Phase requiring technological breakthroughs such as components and systems Development of leading-edge components and systems that are more advanced than those of competitors

Product development		Phase mainly for development of new models Development ofall-new models and existing-model upgrades


Description of Activity	Total Cost (Yen in billions)		Location	Primary Method of Financing
Japan

Investment primarily in technology and products by Toyota Motor Corporation		~~1,011.6~~1,042.5	Japan	Internal funds, financing from issuance of bonds, etc.

Investment primarily in technology and products by ~~Hino Motors, Ltd.~~Toyota Motor Kyushu, Inc.		~~129.3~~110.1	Japan	Internal funds
Investment primarily in technology and products by ~~Toyota Motor Kyushu, Inc.~~Hino Motors, Ltd.		~~101.0~~99.9	Japan	Internal funds
Investment primarily in technology and products by Toyota Auto Body Co., Ltd.		~~73.0~~81.1	Japan	Internal funds
Investment primarily in technology and products by Daihatsu Motor Co., Ltd.		~~53.0~~68.1	Japan	Internal funds
Investment primarily in technology and products by Primearth EV Energy Co., Ltd.		54.4	Japan	Borrowings

Outside of Japan
Investment primarily to promote localization by Toyota Motor Manufacturing, Kentucky, Inc.		~~267.7~~266.2	United States	Internal funds
Investment primarily to promote localization by Toyota Motor Manufacturing Canada Inc.		147.1	Canada	Internal funds
Investment primarily to promote localization by Toyota Motor Manufacturing, Indiana, Inc.		108.3	United States	Internal funds
Investment primarily to promote localization by Toyota do Brazil Ltda.		97.8	Brazil	Internal funds
Investment primarily to establish office facilities by Toyota Motor North America, Inc.		97.5	United States	Internal funds
Investment primarily to promote localization by Toyota Motor Thailand Co., Ltd.		~~134.9~~93.4	Thailand	Internal funds
Investment primarily to ~~establish office facilities~~promote localization by Toyota Motor ~~North America,~~Manufacturing Mississippi, Inc.		~~113.2~~70.2	United States	Internal funds
Investment primarily to promote localization by Toyota Motor ~~Manufacturing Canada Inc.~~		~~93.1~~	~~Canada~~	~~Internal funds~~
~~Investment primarily to promote localization by~~ ~~PT. Toyota Motor Manufacturing Indonesia~~		~~86.5~~	~~Indonesia~~	~~Borrowings~~
~~Investment primarily to promote localization by~~ ~~Toyota do Brazil Ltda.~~		~~75.5~~	~~Brazil~~	~~Internal funds~~
~~Investment primarily to promote localization by~~ ~~Toyota Motor Manufacturing, Indiana, Inc.~~		~~59.7~~	~~United States~~	~~Internal funds~~
~~Investment primarily to promote localization by~~ ~~Toyota Argentina S.A.~~		~~50.5~~	~~Argentina~~	~~Borrowings~~
~~Investment primarily to promote localization by~~ ~~Toyota Motor~~ Europe NV/SA		~~42.7~~64.5	Belgium	Internal funds
Investment primarily in leased automobiles by Toyota Motor Credit Corporation		~~6,619.0~~6,085.0	United States	Internal funds, financing from issuance of bonds, etc.


Name of Subsidiary	Country of Incorporation	Percentage Ownership Interest		Percentage Voting Interest		Country of Incorporation	Percentage Ownership Interest		Percentage Voting Interest
Toyota Financial Services Corporation	Japan		100.00		100.00	Japan		100.00		100.00
Hino Motors, Ltd.	Japan		50.21		50.30	Japan		50.21		50.29
Toyota Motor Kyushu, Inc.	Japan		100.00		100.00	Japan		100.00		100.00
Daihatsu Motor Co., Ltd.	Japan		100.00		100.00	Japan		100.00		100.00
Toyota Finance Corporation	Japan		100.00		100.00	Japan		100.00		100.00
Misawa Homes Co., Ltd.	Japan		51.00		51.23	Japan		51.00		51.21
Toyota Auto Body Co., Ltd.	Japan		100.00		100.00	Japan		100.00		100.00
Toyota Motor East Japan, Inc.	Japan		100.00		100.00	Japan		100.00		100.00
Daihatsu Motor Kyushu Co., Ltd.	Japan		100.00		100.00	Japan		100.00		100.00
Toyota Motor Engineering & Manufacturing North America, Inc.	United States		100.00		100.00	United States		100.00		100.00
Toyota Motor Manufacturing, Kentucky, Inc.	United States		100.00		100.00	United States		100.00		100.00
Toyota Motor North America, Inc.	United States		100.00		100.00	United States		100.00		100.00
Toyota Motor Credit Corporation	United States		100.00		100.00	United States		100.00		100.00
Toyota Motor Manufacturing, Indiana, Inc.	United States		100.00		100.00	United States		100.00		100.00
Toyota Motor Manufacturing, Texas, Inc.	United States		100.00		100.00	United States		100.00		100.00
Toyota Motor Sales, U.S.A., Inc.	United States		100.00		100.00	United States		100.00		100.00
Toyota Motor Manufacturing de Baja California, S. de R.L. de C.V.	Mexico		100.00		100.00	Mexico		100.00		100.00
Toyota Motor Manufacturing Canada Inc.	Canada		100.00		100.00	Canada		100.00		100.00
Toyota Credit Canada Inc.	Canada		100.00		100.00	Canada		100.00		100.00
Toyota Canada Inc.	Canada		51.00		51.00	Canada		51.00		51.00
Toyota Motor Europe NV/SA	Belgium		100.00		100.00	Belgium		100.00		100.00
Toyota Motor Manufacturing France S.A.S.	France		100.00		100.00	France		100.00		100.00
Toyota Kreditbank GmbH						Germany		100.00		100.00
Toyota Motor Finance (Netherlands) B.V.	Netherlands		100.00		100.00	Netherlands		100.00		100.00
Toyota Motor Manufacturing (UK) Ltd.	United Kingdom		100.00		100.00	United Kingdom		100.00		100.00
Toyota Financial Services (UK) PLC	United Kingdom		100.00		100.00	United Kingdom		100.00		100.00
Toyota Motor Manufacturing Turkey Inc.	Turkey		90.00		90.00	Turkey		90.00		90.00
OOO “TOYOTA MOTOR”	Russia		100.00		100.00	Russia		100.00		100.00
Toyota Motor (China) Investment Co., Ltd.	China		90.00		90.00	China		100.00		100.00
Toyota Motor Finance (China) Co., Ltd.	China		100.00		100.00	China		100.00		100.00
Toyota Kirloskar Motor Pvt. Ltd.	India		89.00		89.00	India		89.00		89.00
P.T. Astra Daihatsu Motor	Indonesia		61.75		61.75	Indonesia		61.75		61.75
P.T. Toyota Motor Manufacturing Indonesia	Indonesia		95.00		95.00	Indonesia		95.00		95.00
Toyota Motor Asia Pacific Pte Ltd.	Singapore		100.00		100.00	Singapore		100.00		100.00
Toyota Leasing (Thailand) Co., Ltd.	Thailand		86.84		86.84	Thailand		86.84		86.84
Toyota Motor Thailand Co., Ltd.	Thailand		86.43		86.43	Thailand		86.43		86.43
Toyota Daihatsu Engineering & Manufacturing Co., Ltd.	Thailand		100.00		100.00	Thailand		100.00		100.00
Toyota Motor Corporation Australia Ltd.	Australia		100.00		100.00	Australia		100.00		100.00
Toyota Finance Australia Ltd.	Australia		100.00		100.00	Australia		100.00		100.00
Toyota Argentina S.A.	Argentina		100.00		100.00	Argentina		100.00		100.00
Toyota do Brasil Ltda.	Brazil		100.00		100.00	Brazil		100.00		100.00
Toyota South Africa Motors (Pty) Ltd.	South Africa		100.00		100.00	South Africa		100.00		100.00


Facility or Subsidiary Name	Location	Land Area (thousand square meters)		Number of Employees		Principal Products or Functions	Location	Land Area (thousand square meters)		Number of Employees		Principal Products or Functions
Japan (Toyota Motor Corporation)
Tahara Plant	Tahara City, Aichi Pref.		4,029		7,237	Automobiles	Tahara City, Aichi Pref.		4,029		6,608	Automobiles
Toyota Head Office and Technical Center	Toyota City, Aichi Pref.		3,569		24,051	Research and Development	Toyota City, Aichi Pref.		3,568		23,868	Research and Development
Higashi-Fuji Technical Center	Susono City, Shizuoka Pref.		2,037		3,144	Research and Development	Susono City, Shizuoka Pref.		2,037		2,968	Research and Development
Motomachi Plant	Toyota City, Aichi Pref.		1,593		7,578	Automobiles	Toyota City, Aichi Pref.		1,593		7,793	Automobiles
Takaoka Plant	Toyota City, Aichi Pref.		1,312		4,199	Automobiles	Toyota City, Aichi Pref.		1,312		4,369	Automobiles
Tsutsumi Plant	Toyota City, Aichi Pref.		937		5,111	Automobiles	Toyota City, Aichi Pref.		937		5,364	Automobiles
Kamigo Plant	Toyota City, Aichi Pref.		868		2,996	Automobile parts	Toyota City, Aichi Pref.		868		3,118	Automobile parts
Kinu-ura Plant	Hekinan City, Aichi Pref.		836		3,030	Automobile parts	Hekinan City, Aichi Pref.		836		3,100	Automobile parts
Honsha Plant	Toyota City, Aichi Pref.		551		2,028	Automobile parts	Toyota City, Aichi Pref.		551		2,049	Automobile parts
Nagoya Office	Nagoya City, Aichi Pref.		3		2,333	Office	Nagoya City, Aichi Pref.		3		2,337	Office

Japan (Subsidiaries)
Hino Motors, Ltd.	Hino City, Tokyo, etc.		6,256		12,705	Automobiles	Hino City, Tokyo, etc.		6,263		12,935	Automobiles
Daihatsu Motor Co., Ltd.	Ikeda City, Osaka, etc.		7,820		11,446	Automobiles
Daihatsu Motor Co., Ltd. .							Ikeda City, Osaka, etc.		7,747		11,428	Automobiles
Toyota Motor Kyushu, Inc.	Miyawaka City, Fukuoka Pref., etc.		1,940		7,807	Automobiles	Miyawaka City, Fukuoka Pref., etc.		1,949		8,064	Automobiles
Toyota Auto Body Co., Ltd.	Kariya City, Aichi Pref., etc.		2,261		11,191	Automobiles	Kariya City, Aichi Pref., etc.		2,262		11,286	Automobiles
Toyota Motor East Japan, Inc.	Kurokawa-gun, Miyagi Pref., etc.		2,576		7,192	Automobiles	Kurokawa-gun, Miyagi Pref., etc.		2,572		7,130	Automobiles

Outside Japan (Subsidiaries)
Toyota Motor Manufacturing, Kentucky, Inc.	Kentucky, U.S.A.		5,161		8,162	Automobiles	Kentucky, U.S.A.		5,161		7,902	Automobiles
Toyota Motor Thailand Co., Ltd.	Samutprakan, Thailand		4,414		10,182	Automobiles	Samutprakan, Thailand		4,414		10,073	Automobiles
Toyota Motor Sales, U.S.A., Inc.	California, U.S.A.		3,276		5,510	Sales facilities	Texas, U.S.A.		3,279		5,203	Sales facilities
Toyota Motor Manufacturing Canada, Inc.	Ontario, Canada		4,752		7,589	Automobiles	Ontario, Canada		4,752		7,615	Automobiles
Toyota Motor North America, Inc.	Texas, U.S.A.		724		1,812	Office
Toyota Motor North America, Inc							Texas, U.S.A.		724		1,812	Office


	Thousands of units						Thousands of units
	Year Ended March 31,						Year Ended March 31,
	2016		2017		2018		2017		2018		2019
Japan		2,059		2,274		2,255		2,274		2,255		2,226
North America		2,839		2,837		2,806		2,837		2,806		2,745
Europe		844		925		968		925		968		994
Asia		1,345		1,588		1,543		1,588		1,543		1,684
Other*		1,594		1,347		1,392		1,347		1,392		1,327

Overseas total		6,622		6,697		6,709		6,697		6,709		6,751

Total		8,681		8,971		8,964		8,971		8,964		8,977


	Year Ended March 31,										Year Ended March 31,
	2014		2015		2016		2017		2018		2015		2016		2017		2018		2019
Units Produced
Japan		4,344,892		4,124,593		3,980,576		4,109,038		4,285,844		4,124,593		3,980,576		4,109,038		4,285,844		4,308,903
North America		1,759,439		1,932,618		1,970,053		2,062,862		1,902,304		1,932,618		1,970,053		2,062,862		1,902,304		1,840,502
Europe		506,556		556,462		564,934		637,352		681,048		556,462		564,934		637,352		681,048		679,380
Asia		1,938,155		1,829,048		1,605,345		1,674,468		1,601,473		1,829,048		1,605,345		1,674,468		1,601,473		1,681,783
Other*		483,123		487,166		454,991		491,789		493,464		487,166		454,991		491,789		493,464		474,618
Total		9,032,165		8,929,887		8,575,899		8,975,509		8,964,133		8,929,887		8,575,899		8,975,509		8,964,133		8,985,186


	Yen in millions
	Year ended March 31,						2019 v. 2018 Change
	2018			2019			Amount			Percentage
Net revenues:
Japan		16,024,844			16,625,361			600,517			3.7	%
North America		10,574,410			10,817,247			242,837			2.3
Europe		3,185,224			3,238,851			53,627			1.7
Asia		5,148,139			5,513,031			364,892			7.1
Other*		2,453,299			2,333,443			(119,856	)		(4.9	)
Intersegment elimination/unallocated amount		(8,006,406	)		(8,302,252	)		(295,846	)		—

Total		29,379,510			30,225,681			846,171			2.9
Operating income (loss):
Japan		1,659,918			1,691,675			31,757			1.9
North America		138,899			114,515			(24,384	)		(17.6	)
Europe		75,026			124,868			49,842			66.4
Asia		433,199			457,489			24,290			5.6
Other*		112,663			91,110			(21,553	)		(19.1	)
Intersegment elimination/unallocated amount		(19,843	)		(12,112	)		7,731			—

Total		2,399,862			2,467,545			67,683			2.8
Operating margin		8.2	%		8.2	%		(0.0	)%
Income before income taxes and equity in earnings of affiliated companies		2,620,429			2,285,465			(334,964	)		(12.8	)
Net margin from income before income taxes and equity in earnings of affiliated companies		8.9	%		7.6	%		(1.3	)%
Equity in earnings of affiliated companies		470,083			360,066			(110,017	)		(23.4	)
Net income attributable to Toyota Motor Corporation		2,493,983			1,882,873			(611,110	)		(24.5	)
Net margin attributable to Toyota Motor Corporation		8.5	%		6.2	%		(2.3	)%


	Number of financing contracts in thousands
	Year ended March 31,				2019 v. 2018 Change
	2018		2019		Amount			Percentage
Japan		2,103		2,249		146			6.9	%
North America		5,465		5,404		(61	)		(1.1	)
Europe		1,112		1,220		108			9.7
Asia		1,672		1,803		131			7.8
Other*		846		890		44			5.2

Total		11,198		11,566		368			3.3	%


	Yen in millions
	2019 v. 2018 Change
Changes in operating costs and expenses:
Effect of changes in vehicle unit sales and sales mix		750,000
Effect of changes in exchange rates		(460,000	)
Effect of increase of cost of financing operations		118,500
Effect of cost reduction efforts		(80,000	)
Increase or decrease in expenses and expense reduction efforts		165,000
Other		284,988

Total		778,488


	Yen in millions
	2019 v. 2018 Change
Changes in operating income and loss:
Effect of marketing efforts		275,000
Effect of cost reduction efforts		80,000
Effect of changes in exchange rates		(50,000	)
Increase or decrease in expenses and expense reduction efforts		(165,000	)
Other		(72,317	)

Total		67,683


	Yen in millions
	Year ended March 31,						2018 v. 2017 Change
	2017			2018			Amount			Percentage
Net revenues:
Japan		14,830,868			16,024,844			1,193,976			8.1	%
North America		10,239,091			10,574,410			335,319			3.3
Europe		2,681,039			3,185,224			504,185			18.8
Asia		4,819,821			5,148,139			328,318			6.8
Other*		2,161,074			2,453,299			292,225			13.5
Intersegment elimination/unallocated amount		(7,134,700	)		(8,006,406	)		(871,706	)		—

Total		27,597,193			29,379,510			1,782,317			6.5
Operating income (loss):
Japan		1,202,245			1,659,918			457,673			38.1
North America		311,194			138,899			(172,295	)		(55.4	)
Europe		(12,244	)		75,026			87,270			—
Asia		435,179			433,199			(1,980	)		(0.5	)
Other*		58,694			112,663			53,969			91.9
Intersegment elimination/unallocated amount		(696	)		(19,843	)		(19,147	)		—

Total		1,994,372			2,399,862			405,490			20.3
Operating margin		7.2	%		8.2	%		1.0	%
Income before income taxes and equity in earnings of affiliated companies		2,193,825			2,620,429			426,604			19.4
Net margin from income before income taxes and equity in earnings of affiliated companies		7.9	%		8.9	%		1.0	%
Equity in earnings of affiliated companies		362,060			470,083			108,023			29.8
Net income attributable to Toyota Motor Corporation		1,831,109			2,493,983			662,874			36.2
Net margin attributable to Toyota Motor Corporation		6.6	%		8.5	%		1.9	%


	Yen in millions
	Year ended March 31,						2017 v. 2016 Change
	2016			2017			Amount			Percentage
Net revenues:
Japan		14,759,488			14,830,868			71,380			0.5	%
North America		11,051,970			10,239,091			(812,879	)		(7.4	)
Europe		2,661,331			2,681,039			19,708			0.7
Asia		5,003,859			4,819,821			(184,038	)		(3.7	)
Other*		2,210,214			2,161,074			(49,140	)		(2.2	)
Intersegment elimination/unallocated amount		(7,283,744	)		(7,134,700	)		149,044			—

Total		28,403,118			27,597,193			(805,925	)		(2.8	)
Operating income (loss):
Japan		1,677,522			1,202,245			(475,277	)		(28.3	)
North America		528,819			311,194			(217,625	)		(41.2	)
Europe		72,416			(12,244	)		(84,660	)		—
Asia		449,189			435,179			(14,010	)		(3.1	)
Other*		108,909			58,694			(50,215	)		(46.1	)
Intersegment elimination/unallocated amount		17,116			(696	)		(17,812	)		—

Total		2,853,971			1,994,372			(859,599	)		(30.1	)
Operating margin		10.0	%		7.2	%		(2.8	)%
Income before income taxes and equity in earnings of affiliated companies		2,983,381			2,193,825			(789,556	)		(26.5	)
Net margin from income before income taxes and equity in earnings of affiliated companies		10.5	%		7.9	%		(2.6	)%
Equity in earnings of affiliated companies		329,099			362,060			32,961			10.0
Net income attributable to Toyota Motor Corporation		2,312,694			1,831,109			(481,585	)		(20.8	)
Net margin attributable to Toyota Motor Corporation		8.1	%		6.6	%		(1.5	)%


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

~~Total~~		~~53,674~~


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

~~Total~~		~~(859,599~~	)


	Yen in millions
	Effect on the allowance for credit losses as of March 31, ~~2018~~2019
10 percent change in frequency of occurrence or expected severity of loss		~~4,781~~4,551


	Yen in millions
	Effect on the residual value losses over the remaining terms of the operating leases on and after April 1, ~~2018~~2019
1 percent increase in vehicle return rate		~~4,462~~3,441
1 percent increase inend-of-term market values		~~15,299~~13,652


	Yen in millions												Yen in millions
	Domestic						Overseas						Domestic						Overseas
	Effect on pre-tax income for the year ended March 31, 2019			Effect on obligations for the year ended March 31, 2018			Effect on pre-tax income for the year ended March 31, 2019			Effect on obligations for the year ended March 31, 2018			Effect on pre-tax income for the year ended March 31, 2020			Effect on obligations for the year ended March 31, 2019			Effect on pre-tax income for the year ended March 31, 2020			Effect on obligations for the year ended March 31, 2019
Discount rates
0.5% decrease		(10,458	)		167,996			(7,172	)		129,227			(12,422	)		181,168			(13,627	)		151,578
0.5% increase		9,249			(147,854	)		6,368			(109,454	)		10,908			(158,791	)		14,645			(154,892	)
Expected rate of return on plan assets
0.5% decrease		(8,064	)					(4,077	)					(8,002	)					(4,414	)
0.5% increase		8,064						4,077						8,002						4,414


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


Facility		Principal Activity

Japan
Toyota Technical Center		Product planning, style, design, prototype production and vehicle evaluation
Higashi-Fuji Technical Center		Advanced ~~research and~~ development
Tokyo Design Research & Laboratory		~~Research of advanced~~Advanced styling designs
Toyota Research Institute-Advanced Development(TRI-AD)		Development of artificial intelligence technology with a focus on automated driving technology
Otemachi Office		Development of key IT technologies, creation of new values by utilizing big data and collaboration with venture companies
Shibetsu Proving Ground		~~Vehicle testing and evaluation~~Evaluation
Toyota Central R&D Labs., Inc.		Basic research

United States
Toyota Motor Engineering and Manufacturing North America, Inc.		Product planning, design and evaluation of vehicles manufactured in North ~~American production and product planning, upper body planning, evaluation~~America
Calty Design Research, Inc.		Design
Toyota Research Institute of North America(TRI-NA)		Advanced research relating to “energy and environment,” “safety” and “mobility infrastructure”
Toyota Research Institute, Inc.		Research and development of artificial intelligence technology

Europe
Toyota Motor Europe NV/SA		~~Upper body planning for European production,~~Planning and evaluation ~~and advanced research~~ of vehicles manufactured in Europe
Toyota Europe Design Development S.A.R.L.		Design
Toyota Motorsport GmbH		Development of motor sports vehicles

Asia Pacific
Toyota Daihatsu Engineering and Manufacturing Co., Ltd.		~~Upper body planning for~~Planning and evaluation of vehicles manufactured in Australian and ~~Asian production and evaluation~~Asia.

China
Toyota Motor Engineering and Manufacturing (China) Co., Ltd.		~~Research of new,low-energy~~ ~~vehicle~~Environmental technology ~~vehicle~~design and evaluation ~~and quality assurance~~ in China
FAW Toyota Research & Development Co., Ltd		Design, evaluation and ~~evaluation~~certification of vehicles manufactured in China
GAC Toyota Motor Co., Ltd. R&D Center		Design, evaluation and ~~evaluation~~certification of vehicles manufactured in China


	Yen in millions											Yen in millions
	Total Amounts Committed			Amount of Commitment Expiration Per Period								Total Amounts Committed			Amount of Commitment Expiration Per Period
			Less than 1 year			1 to 3 years		3 to 5 years		5 years and after		Total Amounts Committed		Less than 1 year			1 to 3 years		3 to 5 years		5 years and after
Commercial Commitments (note 24):	Total Amounts Committed
Maximum potential exposure to guarantees given in the ordinary course of business		2,830,749			727,656		1,136,800		704,739		261,554		3,078,955			789,443		1,266,435		783,713		239,364

Total Commercial Commitments		2,830,749			727,656		1,136,800		704,739		261,554		3,078,955			789,443		1,266,435		783,713		239,364


Name (Date of birth)	Position	Brief career summary and important concurrent duties	Number and kind of shares
Takeshi Uchiyamada (August 17, 1946)	Chairman of the Board of Directors	1969 Joined Toyota Motor Corporation (“TMC”) 1998 Member of the Board of Directors of TMC 2001 Managing Director of TMC 2003 Senior Managing Director of TMC 2005 Executive Vice President of TMC 2012 Vice Chairman of TMC 2013 Chairman of TMC (to present) (important concurrent duties) ~~President and Representative Director of Toyota Kuragaike~~ ~~Kaihatsu Kabushiki Kaisha~~ Audit & Supervisory Board Member of Tokai Rika Co., Ltd. Audit & Supervisory Board Member of Toyoda Gosei Co., Ltd. Director of JTEKT Corporation		~~58,939~~77,039 common shares

Shigeru Hayakawa (September 15, 1953)	Vice Chairman of the Board of Directors	1977 Joined Toyota Motor Sales Co., Ltd. 2007 Managing Officer of TMC 2007 Toyota Motor North America, Inc. President 2009 Retired from Toyota Motor North America, Inc. President 2012 Senior Managing Officer of TMC 2015 Member of the Board of Directors and Senior Managing Officer of TMC 2017 Vice Chairman of TMC (to present) (important concurrent duties) Representative Director of Institute for International Economic Studies		~~33,000~~35,056 common shares

Akio Toyoda (May 3, 1956)	President, Member of the Board of Directors	1984 Joined TMC 2000 Member of the Board of Directors of TMC 2002 Managing Director of TMC 2003 Senior Managing Director of TMC 2005 Executive Vice President of TMC 2009 President of TMC (to present) (important concurrent duties) ~~Chairman and CEO of Toyota Motor North America, Inc.~~ ~~Chairman of TOWA REAL ESTATE Co., Ltd.~~ ~~Chairman and Executive Director of Toyota Alvark Tokyo Corporation~~ ~~Chairman of Nagoya Grampus Eight Inc.~~ ~~Chairman of the Japan Automobile Manufacturers Association, Inc.~~		~~4,751,575~~4,752,895 common shares


~~Name~~ ~~(Date of birth)~~	~~Position~~	~~Brief career summary and important concurrent duties~~	~~Number and~~ ~~kind of shares~~
	~~Member of the Board of Directors~~	2008 Executive Vice President of Toyota Motor Engineering & Manufacturing North America, Inc. 2011 President and COO of Toyota Motor Engineering & Manufacturing North America, Inc. 2012 President and CEO of Toyota Motor Engineering & Manufacturing North America, Inc. 2012 President and COO of Toyota Motor North America, Inc. 2013 Retired from Toyota Motor Engineering & Manufacturing North America, Inc. President and CEO 2013 Retired from Toyota Motor North America, Inc. President and COO 2013 Senior Managing Officer of TMC 2013 Member of the Board of Directors and Senior Managing Officer of TMC 2015 Executive Vice President, Member of the Board of Directors of TMC 2017 Member of the Board of Directors of TMC (to present) (important concurrent duties) Director of Hino Motors, Ltd. President, Representative Director of EV C.A. Spirit Corporation		49,172 common shares

Ikuro Sugawara (March 6, 1957)	Outside Member of the Board of Directors	1981 Joined Ministry of International Trade and Industry 2010 Director-General of the Industrial Science and Technology Policy and Environment Bureau, Ministry of Economy, Trade and Industry 2012 Director-General of the Manufacturing Industries Bureau, Ministry of Economy, Trade and Industry 2013 Director-General of the Economic and Industrial Policy Bureau, Ministry of Economy, Trade and Industry		—


Consolidated operating income		Indicator for evaluating Toyota’s efforts based on business performance
Volatility of the share price		Corporate value indicator for shareholders and investors to evaluate Toyota’s efforts
Individual performance evaluation		Qualitative evaluation of performance of each member of the board of directors



	Evaluation Method	Reference Value	Evaluation Result for Fiscal 2019
Consolidated operating income	Evaluate the degree of attainment of consolidated operating income in fiscal 2019, using required income (set in 2011) for Toyota’s sustainable growth as reference value	¥1 trillion	170%
Volatility of the Company’s share price	Comparatively evaluate the volatility of Toyota’s share price up to the end of fiscal 2019, using the share price of Toyota and the Nikkei stock average at the end of fiscal 2018 as reference values	Company’s share price: ¥6,825 Nikei average: ¥21,454	170%


Segment	Number of Employees	Location	Number of Employees	Number of Employees	Location	Number of Employees
Automotive	320,339	Japan	213,251	320,563	Japan	213,862
Financial services	10,492	North America	49,250	10,796	North America	49,638
All other	32,925	Europe	20,746	34,378	Europe	21,168
Unallocated	5,368	Asia	64,500	5,133	Asia	64,293
		Other*	21,377		Other*	21,909

Total	369,124	Total	369,124	370,870	Total	370,870

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


Eligible persons		Members of the board of directors of Toyota (excluding outside members of the board of directors)
Total amount of the share compensation		Maximum of 4.0 billion yen per year
Amount of the share compensation payable to each member of the board of directors		Set each year considering factors such as corporate results, duties, and performance
Type of shares to be allotted and method of allotment		Issue or disposal of common shares (with transfer restrictions under an allotment agreement)
Total number of shares to be allotted		Maximum of 800,000 shares per year in total to eligible members of the board of directors
Amount to be paid		Determined by the board of directors of Toyota based on the closing price of Toyota’s common shares on the Tokyo Stock Exchange on the business day prior to each resolution of the board of directors, within a range that is not particularly advantageous to eligible members of the board of directors
Transfer restriction period		A period of between three and fifty years, as predetermined by the board of directors of Toyota
Conditions for removal of transfer restrictions		Restrictions will be removed upon the expiration of the transfer restriction period. However, restrictions will also be removed in the case of expiration of the term of office, death, or other legitimate reasons.
Gratis acquisition by Toyota		Toyota will be able to acquire all allotted shares without consideration in the case of violations of laws and regulations or other reasons specified by the board of directors of Toyota during the transfer restriction period.