Toyota Motor (TM) 6-K Report of Foreign Private Issuer

TOYOTA MOTOR

CORPORATION

Unaudited Consolidated Financial Statements

For the periods ended

September 30, 2014

TOYOTA MOTOR CORPORATION

Unaudited Consolidated Balance Sheets

At March 31, 2014 and September 30, 2014

	Yen in millions
	March 31, 2014			September 30, 2014
Assets
Current assets:
Cash and cash equivalents		2,041,170			2,309,322
Time deposits		180,207			138,572
Marketable securities		2,046,877			2,143,561
Trade accounts and notes receivable, less allowance for doubtful accounts		2,036,232			1,918,624
Finance receivables, net		5,628,934			5,837,413
Other receivables		351,182			380,029
Inventories		1,894,704			2,062,906
Deferred income taxes		866,386			842,334
Prepaid expenses and other current assets		672,014			625,475
Total current assets		15,717,706			16,258,236
Noncurrent finance receivables, net		8,102,294			8,741,428
Investments and other assets:
Marketable securities and other securities investments		6,765,043			7,206,755
Affiliated companies		2,429,778			2,462,146
Employees receivables		44,966			44,600
Other		736,388			759,921
Total investments and other assets		9,976,175			10,473,422
Property, plant and equipment:
Land		1,314,040			1,328,512
Buildings		4,073,335			4,170,463
Machinery and equipment		10,381,285			10,571,394
Vehicles and equipment on operating leases		3,709,560			4,400,150
Construction in progress		286,571			390,247
Total property, plant and equipment, at cost		19,764,791			20,860,766
Less – Accumulated depreciation		(12,123,493	)		(12,549,779	)
Total property, plant and equipment, net		7,641,298			8,310,987
Total assets		41,437,473			43,784,073

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

2

TOYOTA MOTOR CORPORATION

Unaudited Consolidated Balance Sheets

At March 31, 2014 and September 30, 2014

	Yen in millions
	March 31, 2014			September 30, 2014
Liabilities
Current liabilities:
Short-term borrowings		4,830,820			4,964,254
Current portion of long-term debt		2,949,663			3,681,042
Accounts payable		2,213,218			2,233,578
Other payables		845,426			740,314
Accrued expenses		2,313,160			2,322,003
Income taxes payable		594,829			334,413
Other current liabilities		933,569			1,026,711
Total current liabilities		14,680,685			15,302,315
Long-term liabilities:
Long-term debt		8,546,910			8,998,871
Accrued pension and severance costs		767,618			804,846
Deferred income taxes		1,811,846			1,985,048
Other long-term liabilities		411,427			456,461
Total long-term liabilities		11,537,801			12,245,226
Total liabilities		26,218,486			27,547,541
Shareholders’ equity
Toyota Motor Corporation shareholders’ equity:
Common stock, no par value, authorized: 10,000,000,000 shares at March 31, 2014 and September 30, 2014 issued: 3,447,997,492 shares at March 31, 2014 and 3,417,997,492 shares at September 30, 2014		397,050			397,050
Additional paid-in capital		551,308			548,154
Retained earnings		14,116,295			14,681,771
Accumulated other comprehensive income (loss)		528,161			886,513
Treasury stock, at cost, 278,231,473 shares at March 31, 2014 and 245,245,745 shares at September 30, 2014		(1,123,666	)		(1,043,933	)
Total Toyota Motor Corporation shareholders’ equity		14,469,148			15,469,555
Noncontrolling interests		749,839			766,977
Total shareholders’ equity		15,218,987			16,236,532
Commitments and contingencies
Total liabilities and shareholders’ equity		41,437,473			43,784,073

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

3

TOYOTA MOTOR CORPORATION

Unaudited Consolidated Statements of Income and

Unaudited Consolidated Statements of Comprehensive Income

For the first half ended September 30, 2014

Consolidated Statements of Income

	Yen in millions
	For the first half ended September 30, 2013			For the first half ended September 30, 2014
Net revenues:
Sales of products		11,872,003			12,187,394
Financing operations		665,482			758,203
Total net revenues		12,537,485			12,945,597
Costs and expenses:
Cost of products sold		9,706,426			9,925,576
Cost of financing operations		416,158			421,969
Selling, general and administrative		1,159,426			1,246,106
Total costs and expenses		11,282,010			11,593,651
Operating income		1,255,475			1,351,946
Other income (expense):
Interest and dividend income		58,130			73,043
Interest expense		(9,738	)		(9,469	)
Foreign exchange gain, net		16,724			64,161
Other income, net		22,934			29,493
Total other income (expense)		88,050			157,228
Income before income taxes and equity in earnings of affiliated companies		1,343,525			1,509,174
Provision for income taxes		437,180			493,591
Equity in earnings of affiliated companies		158,791			165,896
Net income		1,065,136			1,181,479
Less – Net income attributable to noncontrolling interests		(64,513	)		(54,643	)
Net income attributable to Toyota Motor Corporation		1,000,623			1,126,836
	Yen
Net income attributable to Toyota Motor Corporation per share
Basic		315.80			356.08
Diluted		315.58			355.91

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

4

TOYOTA MOTOR CORPORATION

Unaudited Consolidated Statements of Income and

Unaudited Consolidated Statements of Comprehensive Income

For the first half ended September 30, 2014

Consolidated Statements of Comprehensive Income

	Yen in millions
	For the first half ended September 30, 2013			For the first half ended September 30, 2014
Net income		1,065,136			1,181,479
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments		94,631			142,827
Unrealized gains (losses) on securities		305,566			223,968
Pension liability adjustments		2,089			862
Total other comprehensive income (loss)		402,286			367,657
Comprehensive income		1,467,422			1,549,136
Less – Comprehensive income attributable to noncontrolling interests		(62,027	)		(63,948	)
Comprehensive income attributable to Toyota Motor Corporation		1,405,395			1,485,188

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

5

TOYOTA MOTOR CORPORATION

Unaudited Consolidated Statements of Income and

Unaudited Consolidated Statements of Comprehensive Income

For the second quarter ended September 30, 2014

Consolidated Statements of Income

	Yen in millions
	For the second quarter ended September 30, 2013			For the second quarter ended September 30, 2014
Net revenues:
Sales of products		5,945,468			6,163,804
Financing operations		336,698			391,105
Total net revenues		6,282,166			6,554,909
Costs and expenses:
Cost of products sold		4,903,970			5,029,490
Cost of financing operations		196,361			222,880
Selling, general and administrative		589,743			643,321
Total costs and expenses		5,690,074			5,895,691
Operating income		592,092			659,218
Other income (expense):
Interest and dividend income		19,967			26,560
Interest expense		(5,154	)		(5,555	)
Foreign exchange gain, net		7,247			51,176
Other income, net		5,210			5,949
Total other income (expense)		27,270			78,130
Income before income taxes and equity in earnings of affiliated companies		619,362			737,348
Provision for income taxes		227,050			233,618
Equity in earnings of affiliated companies		68,853			60,567
Net income		461,165			564,297
Less – Net income attributable to noncontrolling interests		(22,736	)		(25,235	)
Net income attributable to Toyota Motor Corporation		438,429			539,062
	Yen
Net income attributable to Toyota Motor Corporation per share
Basic		138.35			170.62
Diluted		138.26			170.54

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

6

TOYOTA MOTOR CORPORATION

Unaudited Consolidated Statements of Income and

Unaudited Consolidated Statements of Comprehensive Income

For the second quarter ended September 30, 2014

Consolidated Statements of Comprehensive Income

	Yen in millions
	For the second quarter ended September 30, 2013			For the second quarter ended September 30, 2014
Net income		461,165			564,297
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments		(23,230	)		228,337
Unrealized gains (losses) on securities		44,645			171,473
Pension liability adjustments		(690	)		411
Total other comprehensive income (loss)		20,725			400,221
Comprehensive income		481,890			964,518
Less – Comprehensive income attributable to noncontrolling interests		(11,354	)		(40,713	)
Comprehensive income attributable to Toyota Motor Corporation		470,536			923,805

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

7

TOYOTA MOTOR CORPORATION

Unaudited Condensed Consolidated Statements of Cash Flows

For the first half ended September 30, 2014

	Yen in millions
	For the first half ended September 30, 2013			For the first half ended September 30, 2014
Cash flows from operating activities:
Net income		1,065,136			1,181,479
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		595,181			648,233
Provision for doubtful accounts and credit losses		17,106			30,169
Pension and severance costs, less payments		10,882			10,896
Losses on disposal of fixed assets		12,882			10,674
Unrealized losses on available-for-sale securities, net		3,948			2,479
Deferred income taxes		5,143			57,747
Equity in earnings of affiliated companies		(158,791	)		(165,896	)
Changes in operating assets and liabilities, and other		415,601			(124,475	)
Net cash provided by operating activities		1,967,088			1,651,306
Cash flows from investing activities:
Additions to finance receivables		(6,115,913	)		(6,457,063	)
Collection of and proceeds from sales of finance receivables		5,496,979			6,022,356
Additions to fixed assets excluding equipment leased to others		(454,550	)		(477,570	)
Additions to equipment leased to others		(852,371	)		(1,080,047	)
Proceeds from sales of fixed assets excluding equipment leased to others		16,054			22,121
Proceeds from sales of equipment leased to others		394,953			366,939
Purchases of marketable securities and security investments		(2,733,407	)		(1,343,269	)
Proceeds from sales of and maturity of marketable securities and security investments		1,727,726			1,262,020
Changes in investments and other assets, and other		(26,463	)		76,305
Net cash used in investing activities		(2,546,992	)		(1,608,208	)
Cash flows from financing activities:
Proceeds from issuance of long-term debt		1,993,201			2,080,226
Payments of long-term debt		(1,617,468	)		(1,283,305	)
Increase (decrease) in short-term borrowings		426,881			(82,249	)
Dividends paid to Toyota Motor Corporation shareholders		(190,046	)		(316,977	)
Dividends paid to noncontrolling interests		(44,379	)		(50,483	)
Reissuance (repurchase) of treasury stock		6,319			(167,955	)
Net cash provided by financing activities		574,508			179,257
Effect of exchange rate changes on cash and cash equivalents		30,402			45,797
Net increase in cash and cash equivalents		25,006			268,152
Cash and cash equivalents at beginning of period		1,718,297			2,041,170
Cash and cash equivalents at end of period		1,743,303			2,309,322

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

8

TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

1. Basis of preparation:

The accompanying unaudited condensed consolidated financial statements of Toyota Motor Corporation (the “parent company”) as of and for the periods ended September 30, 2014, have been prepared in accordance with U.S. generally accepted accounting principles (“U.S.GAAP”) and on substantially the same basis as its annual consolidated financial statements except for certain required disclosures which have been omitted. The unaudited condensed consolidated financial statements should be read in conjunction with the Annual Report on Form 20-F for the year ended March 31, 2014. The unaudited condensed consolidated financial statements reflect all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the result for that period and the financial condition at that date. The consolidated results for the six-month and the three-month periods are not necessarily indicative of results to be expected for the full year.

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

Accounting changes -

In July 2013, the Financial Accounting Standards Board (“FASB”) issued updated guidance on uncertain tax positions. This guidance requires an unrecognized tax benefit, or a portion of an unrecognized tax benefit, to be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward for tax purposes, a similar tax loss, or a tax credit carryforward. The parent company and its consolidated subsidiaries (“Toyota”) adopted this guidance on April 1, 2014. 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 will supersede the current revenue recognition guidance. This guidance is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Management is evaluating the impact of adopting this guidance on Toyota’s consolidated financial statements.

9

TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

3. Accounting procedures specific to quarterly consolidated financial statements:

Provision for income taxes

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

4. Derivative financial instruments:

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

Fair value hedges -

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

For the first half and the second quarter ended September 30, 2013 and 2014, 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 which Toyota is unable to or has elected not to apply hedge accounting.

10

TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

Fair value and gains or losses on derivative financial instruments -

The following table summarizes the fair values of derivative financial instruments as of March 31, 2014 and September 30, 2014:

	Yen in millions
	March 31, 2014			September 30, 2014
Derivative assets
Derivative financial instruments designated as hedging instruments
Interest rate and currency swap agreements
Prepaid expenses and other current assets		1,254			1,622
Investments and other assets - Other		36,572			6,707
Total		37,826			8,329
Undesignated derivative financial instruments
Interest rate and currency swap agreements
Prepaid expenses and other current assets		23,182			32,960
Investments and other assets - Other		159,644			148,033
Total		182,826			180,993
Foreign exchange forward and option contracts
Prepaid expenses and other current assets		7,052			9,883
Investments and other assets - Other		—			—
Total		7,052			9,883
Total derivative assets		227,704			199,205
Counterparty netting		(85,331	)		(76,734	)
Collateral received		(78,554	)		(47,878	)
Carrying value of derivative assets		63,819			74,593
Derivative liabilities
Derivative financial instruments designated as hedging instruments
Interest rate and currency swap agreements
Other current liabilities		(1,442	)		—
Other long-term liabilities		—			(2,250	)
Total		(1,442	)		(2,250	)
Undesignated derivative financial instruments
Interest rate and currency swap agreements
Other current liabilities		(32,569	)		(41,835	)
Other long-term liabilities		(132,161	)		(122,489	)
Total		(164,730	)		(164,324	)
Foreign exchange forward and option contracts
Other current liabilities		(9,468	)		(23,423	)
Other long-term liabilities		(5	)		(2	)
Total		(9,473	)		(23,425	)
Total derivative liabilities		(175,645	)		(189,999	)
Counterparty netting		85,331			76,734
Collateral posted		61,680			71,232
Carrying value of derivative liabilities		(28,634	)		(42,033	)

11

TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

The following table summarizes the notional amounts of derivative financial instruments as of March 31, 2014 and September 30, 2014:

	Yen in millions
	March 31, 2014		September 30, 2014
	Designated derivative financial instruments	Undesignated derivative financial instruments	Designated derivative financial instruments	Undesignated derivative financial instruments
Interest rate and currency swap agreements	151,704	15,135,193	107,918	16,861,750
Foreign exchange forward and option contracts		1,965,611		1,815,645
Total	151,704	17,100,804	107,918	18,677,395

The following table summarizes the gains and losses on derivative financial instruments and hedged items reported in the consolidated statements of income for the first half and the second quarter ended September 30, 2013 and 2014:

	Yen in millions
	For the first half ended September 30, 2013		For the first half ended September 30, 2014
	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 – Fair value hedge
Interest rate and currency swap agreements
Cost of financing operations	635	(397)	(7,483)	7,542
Undesignated derivative financial instruments
Interest rate and currency swap agreements
Cost of financing operations	(38,415)		(25,904)
Foreign exchange gain (loss), net	1,646		2,209
Foreign exchange forward and option contracts
Cost of financing operations	15,563		5,828
Foreign exchange gain (loss), net	1,355		6,009

12

TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

	Yen in millions
	For the second quarter ended September 30, 2013						For the second quarter ended September 30, 2014
	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 – Fair value hedge
Interest rate and currency swap agreements
Cost of financing operations		5,520			(5,393	)		(7,088	)		7,099
Undesignated derivative financial instruments
Interest rate and currency swap agreements
Cost of financing operations		17,574						(47,080	)
Foreign exchange gain (loss), net		156						1,090
Foreign exchange forward and option contracts
Cost of financing operations		(2,450	)					11,105
Foreign exchange gain (loss), net		20,079						(18,810	)

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

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

Credit risk related contingent features -

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

The aggregate fair value amount of derivative financial instruments that contain credit risk related contingent features that are in a net liability position after being offset by cash collateral as of September 30, 2014 is ¥4,458 million. The aggregate fair value amount of assets that are already posted as cash collateral as of September 30, 2014 is ¥54,397 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 ¥4,458 million as of September 30, 2014.

13

TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

5. Contingencies:

Guarantees

Toyota enters into contracts with Toyota dealers to guarantee customers’ payments of their installment payables that arise from installment contracts between customers and Toyota dealers, as and when requested by Toyota dealers. Toyota is required to execute its guarantee primarily when customers are unable to make required payments. The maximum potential amount of future payments as of September 30, 2014 is ¥2,140,323 million. Liabilities for guarantees totaling ¥6,615 million have been provided as of September 30, 2014. 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

Product recalls

From time-to-time, Toyota issues vehicle recalls and takes other safety measures including safety campaigns relating to its vehicles. In November 2009, Toyota announced a safety campaign in North America for certain models of Toyota and Lexus vehicles related to floor mat entrapment of accelerator pedals, and later expanded it to include additional models. In January 2010, Toyota announced a recall in North America for certain models of Toyota vehicles related to sticking and slow-to-return accelerator pedals. Also in January 2010, Toyota recalled in Europe, China and other regions certain models of Toyota vehicles related to sticking accelerator pedals. In February 2010, Toyota announced a worldwide recall related to the software program that controls the antilock braking system in certain vehicle models including the Prius. Set forth below is a description of the claims, lawsuits and government investigations involving Toyota in the United States relating to these recalls and other safety measures.

Class action and consolidated litigation

Approximately 200 putative class actions and more than 500 individual product liability personal injury cases have been filed since November 2009 alleging that certain Toyota, Lexus and Scion vehicles contain defects that lead to unintended acceleration. All of the class actions and many of the product liability personal injury, warranty and lemon law cases were consolidated either in a consolidated action in the United States District Court for the Central District of California or in a consolidated action in California state court.

14

TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

In July 2013, the federal court signed an order and judgment granting final approval of the December 2012 settlement of the economic loss claims and dismissing the economic loss cases. Various objectors appealed the court’s rulings, but all of these appeals have been dismissed and the settlement is final.

Although the settlement does not cover product liability personal injury claims in the consolidated federal action or pending in various state courts in the United States, the judges overseeing the federal and California consolidated actions have approved an Intensive Settlement Process (“ISP”) for the product liability personal injury claims in those actions. Under the ISP, all cases 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.

Beginning in February 2010, Toyota was sued in approximately 20 putative class actions alleging defects in the antilock braking system in various hybrid vehicles that cause the vehicles to fail to stop in a timely manner when driving in certain road conditions. These cases were consolidated into two actions, one in the United States District Court for the Central District of California and one in the Los Angeles County Superior Court. In January 2013, the Court in the federal case issued an order denying the plaintiff’s motion for class certification and granting summary judgment in favor of Toyota on the claims of the principal named plaintiff for the cases relating to recalled vehicles. In July 2013, the court denied the motion for class certification for claims related to vehicles that were not recalled, and that ruling has been appealed.

While Toyota has resolved or is attempting to resolve many of the outstanding matters, Toyota believes that it has meritorious defenses to all of them and will vigorously defend those matters not resolved.

Government investigations

In February 2010, Toyota received a subpoena from the U.S. Attorney for the Southern District of New York seeking documents related to unintended acceleration. In March 2014, Toyota announced that it entered into a deferred prosecution agreement (“DPA”) with the U.S. Attorney’s Office to resolve its investigation. The DPA provided for a $1.2 billion payment to the U.S. government, and Toyota recorded a $1.2 billion charge against earnings in fiscal 2014. Pursuant to the agreement, an independent monitor has been appointed 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.

15

TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

Beyond the amounts accrued for the recall-related matters, Toyota is unable to estimate a range of reasonably possible loss, if any, for the other recall-related 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. Toyota continues to evaluate these matters and expects that it may have resolution discussions from time to time in some of them. Although Toyota cannot estimate a reasonable range of loss based on currently available information, the resolution of the above-mentioned matters could have an adverse effect on Toyota’s financial position, results of operations or cash flows.

Other proceedings

Toyota has various other legal actions, other governmental proceedings and other claims pending against it, including other product liability claims in the United States. For the same reasons discussed above relating to the recall-related legal proceedings, Toyota is unable to estimate a range of reasonably possible loss, if any, beyond the amounts accrued, with respect to these other proceedings. Based upon information currently available to Toyota, however, Toyota believes that its losses from these matters, if any, would not have a material adverse effect on Toyota’s financial position, results of operations or cash flows.

Environmental matters

The European Union brought into effect a directive that requires member states to promulgate regulations implementing automotive manufacturers shall bear the costs for taking back end-of-life vehicles and dismantling and recycling those vehicles. Currently, there are uncertainties surrounding the implementation of the applicable regulations in different European Union member states, particularly regarding automotive manufacturer responsibilities and resultant expenses that may be incurred. Based on the legislation that has been enacted to date, Toyota has provided for its estimated liability. Although Toyota does not expect its compliance with the directive to result in significant cash expenditures, Toyota is continuing to assess the impact of this future legislation on Toyota’s financial position, results of operations and cash flows.

16

TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

6. Segment data:

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

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

The following tables present certain information regarding Toyota’s industry or geographic segments and overseas revenues by destination for the first half and the second quarter ended September 30, 2013 and 2014.

Segment operating results -

For the first half ended September 30, 2013:

	Yen in millions
	Automotive		Financial Services		All Other		Inter-segment Elimination			Consolidated
Net revenues
Sales to external customers		11,612,379		665,482		259,624		—			12,537,485
Inter-segment sales and transfers		20,890		22,161		248,439		(291,490	)		—
Total		11,633,269		687,643		508,063		(291,490	)		12,537,485
Operating expenses		10,525,221		554,345		487,749		(285,305	)		11,282,010
Operating income		1,108,048		133,298		20,314		(6,185	)		1,255,475
For the first half ended September 30, 2014:
	Yen in millions
	Automotive		Financial Services		All Other		Inter-segment Elimination			Consolidated
Net revenues
Sales to external customers		11,919,067		758,203		268,327		—			12,945,597
Inter-segment sales and transfers		28,199		19,171		286,904		(334,274	)		—
Total		11,947,266		777,374		555,231		(334,274	)		12,945,597
Operating expenses		10,806,994		592,859		526,823		(333,025	)		11,593,651
Operating income		1,140,272		184,515		28,408		(1,249	)		1,351,946

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TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

For the second quarter ended September 30, 2013:
	Yen in millions
	Automotive		Financial Services		All Other		Inter-segment Elimination			Consolidated
Net revenues
Sales to external customers		5,805,330		336,698		140,138		—			6,282,166
Inter-segment sales and transfers		9,934		11,069		133,454		(154,457	)		—
Total		5,815,264		347,767		273,592		(154,457	)		6,282,166
Operating expenses		5,315,712		265,738		260,412		(151,788	)		5,690,074
Operating income		499,552		82,029		13,180		(2,669	)		592,092
For the second quarter ended September 30, 2014:
	Yen in millions
	Automotive		Financial Services		All Other		Inter-segment Elimination			Consolidated
Net revenues
Sales to external customers		6,018,997		391,105		144,807		—			6,554,909
Inter-segment sales and transfers		13,602		8,841		152,108		(174,551	)		—
Total		6,032,599		399,946		296,915		(174,551	)		6,554,909
Operating expenses		5,479,079		313,644		279,306		(176,338	)		5,895,691
Operating income		553,520		86,302		17,609		1,787			659,218

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TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

Geographic information -

For the first half ended September 30, 2013:

	Yen in millions
	Japan		North America		Europe		Asia		Other		Inter-segment Elimination			Consolidated
Net revenues
Sales to external customers		4,005,694		3,986,493		1,249,724		2,199,653		1,095,921		—			12,537,485
Inter-segment sales and transfers		2,938,098		81,459		53,318		200,242		96,286		(3,369,403	)		—
Total		6,943,792		4,067,952		1,303,042		2,399,895		1,192,207		(3,369,403	)		12,537,485
Operating expenses		6,113,765		3,905,652		1,277,631		2,204,253		1,116,061		(3,335,352	)		11,282,010
Operating income		830,027		162,300		25,411		195,642		76,146		(34,051	)		1,255,475

For the first half ended September 30, 2014:

	Yen in millions
	Japan		North America		Europe		Asia		Other		Inter-segment Elimination			Consolidated
Net revenues
Sales to external customers		3,969,582		4,377,124		1,300,200		2,185,524		1,113,167		—			12,945,597
Inter-segment sales and transfers		2,881,231		122,627		65,674		197,093		92,863		(3,359,488	)		—
Total		6,850,813		4,499,751		1,365,874		2,382,617		1,206,030		(3,359,488	)		12,945,597
Operating expenses		6,132,046		4,187,084		1,332,670		2,169,697		1,128,074		(3,355,920	)		11,593,651
Operating income		718,767		312,667		33,204		212,920		77,956		(3,568	)		1,351,946

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

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TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

For the second quarter ended September 30, 2013:

	Yen in millions
	Japan		North America		Europe		Asia		Other		Inter-segment Elimination			Consolidated
Net revenues
Sales to external customers		2,066,627		1,924,217		681,446		1,076,636		533,240		—			6,282,166
Inter-segment sales and transfers		1,420,949		38,602		25,598		105,192		49,949		(1,640,290	)		—
Total		3,487,576		1,962,819		707,044		1,181,828		583,189		(1,640,290	)		6,282,166
Operating expenses		3,113,624		1,883,190		686,897		1,090,364		549,549		(1,633,550	)		5,690,074
Operating income		373,952		79,629		20,147		91,464		33,640		(6,740	)		592,092

For the second quarter ended September 30, 2014:

	Yen in millions
	Japan		North America		Europe		Asia		Other		Inter-segment Elimination			Consolidated
Net revenues
Sales to external customers		2,061,111		2,180,798		678,830		1,071,480		562,690		—			6,554,909
Inter-segment sales and transfers		1,493,171		59,830		36,386		113,709		51,382		(1,754,478	)		—
Total		3,554,282		2,240,628		715,216		1,185,189		614,072		(1,754,478	)		6,554,909
Operating expenses		3,201,478		2,093,497		692,880		1,082,655		570,167		(1,744,986	)		5,895,691
Operating income		352,804		147,131		22,336		102,534		43,905		(9,492	)		659,218

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

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

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

20

TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

Overseas revenues by destination -

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

For the first half ended September 30, 2013 and 2014:

	Yen in millions
	For the first half ended September 30, 2013		For the first half ended September 30, 2014
North America		3,962,214		4,358,599
Europe		1,191,917		1,227,979
Asia		2,087,433		2,054,895
Other		2,291,088		2,413,068
For the second quarter ended September 30, 2013 and 2014:
	Yen in millions
	For the second quarter ended September 30, 2013		For the second quarter ended September 30, 2014
North America		1,907,164		2,174,670
Europe		648,900		637,247
Asia		1,022,826		1,008,144
Other		1,144,859		1,237,826

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

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TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

7. Per share amounts:

Reconciliations of the differences between basic and diluted net income attributable to Toyota Motor Corporation per share for the first half and the second quarter ended September 30, 2013 and 2014 are as follows:

	Yen in millions			Thousands of shares		Yen
	Net income attributable to Toyota Motor Corporation			Weighted- average shares		Net income attributable to Toyota Motor Corporation per share
For the first half ended September 30, 2013
Basic net income attributable to Toyota Motor Corporation per common share		1,000,623			3,168,554		315.80
Effect of dilutive securities
Assumed exercise of dilutive stock options		(55	)		2,051
Diluted net income attributable to Toyota Motor Corporation per common share		1,000,568			3,170,605		315.58
For the first half ended September 30, 2014
Basic net income attributable to Toyota Motor Corporation per common share		1,126,836			3,164,551		356.08
Effect of dilutive securities
Assumed exercise of dilutive stock options		(25	)		1,469
Diluted net income attributable to Toyota Motor Corporation per common share		1,126,811			3,166,020		355.91
For the second quarter ended September 30, 2013
Basic net income attributable to Toyota Motor Corporation per common share		438,429			3,168,883		138.35
Effect of dilutive securities
Assumed exercise of dilutive stock options		(12	)		2,105
Diluted net income attributable to Toyota Motor Corporation per common share		438,417			3,170,988		138.26
For the second quarter ended September 30, 2014
Basic net income attributable to Toyota Motor Corporation per common share		539,062			3,159,374		170.62
Effect of dilutive securities
Assumed exercise of dilutive stock options		(11	)		1,538
Diluted net income attributable to Toyota Motor Corporation per common share		539,051			3,160,912		170.54

22

TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

Stock options that were not included in the computation of diluted net income attributable to Toyota Motor Corporation per share for the first half ended September 30, 2013 and 2014 were 2,663 thousand shares and 1,276 thousand shares, and for the second quarter ended September 30, 2013 and 2014 were 1,523 thousand shares and 1,276 thousand shares, respectively, because the options’ exercise prices were greater than the average market price per common share during the period.

On June 17, 2014, at the Ordinary General Shareholders’ Meeting, the shareholders of the parent company approved to distribute year-end cash dividends of ¥316,977 million, ¥100 per share, effective on June 18, 2014. On November 5, 2014, the Board of Directors of the parent company resolved to distribute interim cash dividends of ¥237,956 million, ¥75 per share, effective on November 27, 2014.

23

TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

8. Fair value measurements:

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

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; inputs other than quoted prices that are observable for the assets or liabilities
Level 3:	Unobservable inputs for assets or liabilities

The following table summarizes the fair values of the assets and liabilities measured at fair value on a recurring basis as of March 31, 2014 and September 30, 2014. Transfers between levels of the fair value are recognized at the end of their respective reporting periods:

	Yen in millions
	March 31, 2014
	Level 1		Level 2			Level 3		Total
Assets
Cash equivalents		311,582		401,546			—		713,128
Marketable securities and other securities investments
Public and corporate bonds		5,234,856		920,975			9,092		6,164,923
Common stocks		1,997,196		—			—		1,997,196
Other		54,383		517,950			—		572,333
Derivative financial instruments		—		220,160			7,544		227,704
Total		7,598,017		2,060,631			16,636		9,675,284
Liabilities
Derivative financial instruments		—		(175,645	)		—		(175,645	)
Total		—		(175,645	)		—		(175,645	)

24

TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

	Yen in millions
	September 30, 2014
	Level 1		Level 2			Level 3		Total
Assets
Cash equivalents		291,357		584,493			—		875,850
Time deposits		—		28,000			—		28,000
Marketable securities and other securities investments
Public and corporate bonds		5,583,908		1,052,965			10,284		6,647,157
Common stocks		2,274,628		—			—		2,274,628
Other		57,051		280,205			—		337,256
Derivative financial instruments		—		193,187			6,018		199,205
Total		8,206,944		2,138,850			16,302		10,362,096
Liabilities
Derivative financial instruments		—		(189,999	)		—		(189,999	)
Total		—		(189,999	)		—		(189,999	)

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

Cash equivalents and time deposits -

Cash equivalents include money market funds and other investments with original maturities of three months or less. Cash equivalents classified in Level 2 include primarily negotiable certificate of deposit with original maturities of three months or less. These are measured at fair value using observable interest rates in the market. Time deposits include negotiable certificate of deposit with original maturities over three months. These are measured at fair value using 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 primarily government bonds and represent 50% of Japanese bonds, and 50% of U.S., European and other bonds as of March 31, 2014, and 46% of Japanese bonds, and 54% of U.S., European and other bonds as of September 30, 2014. Listed stocks on the Japanese stock markets represent 86% and 88% of common stocks as of March 31, 2014 and September 30, 2014, respectively. Toyota uses primarily quoted market prices for identical assets to measure fair value of these securities. “Other” includes primarily investment trusts. Generally, Toyota uses quoted market prices for similar assets or quoted non-active market prices for identical assets to measure fair value of these securities. These assets are classified in Level 2.

25

TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

Derivative financial instruments -

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

The changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the first half and second quarter ended September 30, 2013 and 2014 were not material.

Certain assets and liabilities are measured at fair value on a nonrecurring basis. The assets and liabilities measured at fair value on a nonrecurring basis for the first half and second quarter ended September 30, 2013 and 2014 were not material.

26

TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

9. Accumulated other comprehensive income:

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

	Yen in millions
	Foreign currency translation adjustments			Unrealized gains (losses) on securities			Pension liability adjustments			Accumulated other comprehensive income (loss)
For the first half ended September 30, 2013
Balance at March 31, 2013		(813,480	)		666,813			(209,456	)		(356,123	)
Other comprehensive income (loss) before reclassifications		94,631			311,431			(1,799	)		404,263
Reclassifications		—			(5,865	)		3,888			(1,977	)
Other comprehensive income (loss), net of tax		94,631			305,566			2,089			402,286
Less: Other comprehensive income attributable to noncontrolling interests		8,440			(5,175	)		(779	)		2,486
Balance at September 30, 2013		(710,409	)		967,204			(208,146	)		48,649
For the first half ended September 30, 2014
Balance at March 31, 2014		(516,538	)		1,160,563			(115,864	)		528,161
Other comprehensive income (loss) before reclassifications		142,827			235,781			(167	)		378,441
Reclassifications		—			(11,813	)		1,029			(10,784	)
Other comprehensive income (loss), net of tax		142,827			223,968			862			367,657
Less: Other comprehensive income attributable to noncontrolling interests		(6,712	)		(2,968	)		375			(9,305	)
Balance at September 30, 2014		(380,423	)		1,381,563			(114,627	)		886,513

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TOYOTA MOTOR CORPORATION

Notes to Unaudited Consolidated Financial Statements

Reclassifications consist of the following:

	Yen in millions
	For the first half ended September 30, 2013			For the first half ended September 30, 2014			Affected line items in the consolidated statements of income
Unrealized gains (losses) on securities:
		3,930			(4,519	)	Financing operations
		5,079			(5,400	)	Foreign exchange gain, net
		(18,543	)		(9,127	)	Other income, net
		(9,534	)		(19,046	)	Income before income taxes and equity in earnings of affiliated companies
		3,827			7,232		Provision for income taxes
		(158	)		1		Equity in earnings of affiliated companies
		(5,865	)		(11,813	)	Net income
Pension liability adjustments:
Recognized net actuarial loss		8,623			3,932		*1
Amortization of prior service costs		(2,462	)		(2,386	)	*1
		6,161			1,546		Income before income taxes and equity in earnings of affiliated companies
		(2,273	)		(517	)	Provision for income taxes
		3,888			1,029		Net income
Total reclassifications, net of tax		(1,977	)		(10,784	)

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

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

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