Exhibit 99
Earnings Release
Toyota Motor Credit Corporation Reports
Third Quarter Operating Net Income of $56 Million
TORRANCE, Calif. February 8, 2002 -- Toyota Motor Credit Corporation
("TMCC"), which is marketed under the brands of Toyota Financial Services
("TFS") and Lexus Financial Services ("LFS"), today announced fiscal third
quarter operating net income of $56 million, an increase of $31 million
(124%) over the comparable prior year period. For the nine months ended
December 31, 2001, operating net income was $167 million, an increase of
$95 million (132%) over the same period in the prior year. The strong
financial performance is primarily attributed to asset and revenue growth and
improvement in net interest margin. The net margin increase was partially
offset by higher credit and disposition losses and increased operating costs
associated with the restructuring of its field operations and technology
projects. Operating net income excludes the effect of market value changes
related to derivative hedging contracts and a charge related to the Company's
minority investment in Toyota Credit Argentina ("TCA").
Finance volume of $4.6 billion was strong for the quarter, exceeding the
comparable prior year period by $1.5 billion (50%). As of December 31, 2001,
managed assets totaled $35 billion, an increase of $4 billion (13%) from a
year earlier. "Our strong operating performance through the third quarter
keeps us on track for a record year," said George Borst, President and CEO.
"Our overall market share penetration of Toyota and Lexus financed sales to
consumers improved to 36.8% and we continue to increase our penetration of
wholesale financing for Toyota and Lexus dealers."
Annualized net charge-offs totaled .59% for the three months ended
December 31, 2001, an increase of 9 bps from the quarter ended
September 30, 2001 and an increase of 15 bps over the same period in the
prior year. The restructuring of field operations combined with the recent
economic downturn and the introduction of the expanded tiered pricing program
for both retail and lease contracts resulted in an increase in 60+ day
delinquency to .39%, up 13 bps from September 30, 2001 and 14 bps from
December 31, 2000.
Net income, including the effect of mark to market adjustments on derivative
contracts and the charge related to its Argentina investment, for the three
month and nine month periods ending December 31, 2001 totaled $92 million and
$163 million, respectively. TMCC uses derivative contracts as part of its
interest rate risk management program. The mark to market adjustments are
determined in accordance with Financial Accounting Standards Board
Pronouncement Numbers 133 and 138.
In the third quarter, in connection with the recent Argentine currency re-
denomination, TMCC recorded a charge of $31 million ($19 million after tax)
to write-off its $5 million investment in TCA and to establish a contingency
reserve of $26 million which is the estimate of what TMCC will be required to
fund under its $47 million guaranty of TCA's offshore outstanding debt.
TFS and LFS are the finance and insurance brands for Toyota and Lexus
respectively in the United States. They primarily offer retail auto
financing and leasing, and wholesale auto financing through Toyota Motor
Credit Company and extended service contracts through Toyota Motor Insurance
Services ("TMIS"). TFS\LFS currently employs over 2,600 associates
nationwide, and has managed assets of $35 billion. It is part of a worldwide
network of comprehensive financial services offered by Toyota Financial
Services Corporation, a wholly-owned subsidiary of Toyota Motor Corporation.
This news release contains certain forward-looking statements that are
subject to risks and uncertainties. The factors which may cause future
results to differ materially from expectations are discussed in the Form 10-
KT for the transitional year ended March 31, 2001, filed with the Securities
and Exchange Commission. TMCC undertakes no obligation to update or revise
any forward-looking statements.
Toyota Motor Credit Corporation
Financial Highlights
Condensed Financial Information ($ Millions)
- -------------------------------------------
Nine Months
Three Months Ended or at % Change Ended or at
------------------------------ Prior -------------------
12/31/01 9/30/01 12/31/00 Year 12/31/01 12/31/00 % Change
-------- -------- -------- -------- -------- -------- --------
Revenues:
Net Financing Revenues $ 250 $ 234 $ 127 97% $ 688 $ 467 47%
Other Revenues 64 72 73 -12% 194 142 37%
Expenses:
Operating Costs & Other 156 147 122 28% 437 372 17%
Provision for Credit Losses 65 51 36 81% 166 111 50%
Operating Net Income $ 56 $ 73 $ 25 124% $ 167 $ 72 132%
======== ======== ======== ======== ========
Net Income (1) $ 92 $ 21 $ 18 411% $ 163 $ 65 151%
======== ======== ======== ======== ========
Key Data ($ Millions)
- --------------------
Contract Volume
- ---------------
Retail $ 3,367 $ 2,918 $ 1,733 94% $ 8,984 $ 5,581 61%
Lease 1,246 1,454 1,340 -7% 4,368 4,266 2%
-------- -------- -------- -------- --------
Total Volume $ 4,613 $ 4,372 $ 3,073 50% $ 13,352 $ 9,847 36%
======== ======== ======== ======== ========
Market Share (2)
- ------------
Retail 28.6% 24.5% 17.2% 25.4% 17.9%
Lease 9.3% 11.6% 13.3% 11.4% 13.6%
---- ---- ---- ---- ----
Total Market Share 37.9% 36.1% 30.5% 36.8% 31.5%
==== ==== ==== ==== ====
Credit Quality
- --------------
60+ Day Contractual
Delinquency 0.39% 0.26% 0.25%
Annualized Credit Loss Ratio 0.59% 0.50% 0.44%
Balance Sheet Information
- -------------------------
Net Earning Assets (3)
Retail $ 13,494 $ 11,160 $ 9,675 39%
Lease 13,207 13,431 12,993 2%
Wholesale & Other 4,384 3,950 3,899 12%
-------- -------- --------
Total $ 31,085 $ 28,541 $ 26,567 17%
======== ======== ========
Allowance for Credit Losses $ 269 $ 248 $ 225
% of Average Earning Assets 0.86% 0.86% 0.84%
Total Assets $ 33,446 $ 32,079 $ 29,051
Notes and loans payable (4) $ 26,523 $ 25,199 $ 22,374
Capital Stock $ 915 $ 915 $ 915
Retained Earnings $ 1,740 $ 1,648 $ 1,557
Managed Information
- -------------------
Managed Assets (3) (5)
Retail $ 17,230 $ 15,496 $ 12,652 36%
Lease 13,345 13,668 14,384 -7%
Wholesale & Other 4,384 3,950 3,899 12%
-------- -------- --------
Total $ 34,959 $ 33,114 $ 30,935 13%
======== ======== ========
(1) After SFAS 133/138 mark to market adjustment (net of income tax effect) of $55 million, $(52) million and
$(7) million for the three months ended December 31, 2001, September 30, 2001 and December 31, 2000,
respectively, and $15 million and $(7) million for the nine months ended December 31, 2001 and
December 31, 2000, respectively, and after the charge related to TCA (net of income tax effect) of
$(19) million for the three months and nine months ended December 31, 2001.
(2) Market share represents penetration of Toyota and Lexus financed sales to consumers.
(3) Net of allowance for credit losses.
(4) Notes and Loans Payable at December 31, 2001 includes notes payable related to securitized finance
receivables structured as collateralized borrowings.
(5) Includes securitized retail and lease assets.