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Published: 2021-03-18 06:18:55 ET

EX-99.1 2 d16207dex991.htm UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS AND ADDITIONAL PORTIONS UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS AND ADDITIONAL PORTIONS

TOYOTA MOTOR CORPORATION

Corporate Overview

Part I. Corporate Information

Section 1. Corporate Overview

1. History of Changes in Major Business Indices


Accounting period		For the first nine months ended December 31, 2019			For the first nine months ended December 31, 2020			Previous fiscal year
Accounting period		From April 1, 2019 to December 31, 2019			From April 1, 2020 to December 31, 2020			From April 1, 2019 to March 31 2020
Sales revenues	(Million yen)		22,967,208			19,525,255			29,866,547
(For the third quarter)			(7,608,931	)		(8,150,032	)		29,866,547
Income before income taxes	(Million yen)		2,393,760			1,869,989			2,792,942
(For the third quarter)			(771,941	)		(1,141,174	)		2,792,942
Net income attributable to Toyota Motor Corporation	(Million yen)		1,708,838			1,468,064			2,036,140
(For the third quarter)			(559,298	)		(838,696	)		2,036,140
Comprehensive income attributable to Toyota Motor Corporation	(Million yen)		1,910,336			1,610,308			1,555,009
Total Toyota Motor Corporation shareholders’ equity	(Million yen)		20,828,533			21,804,119			20,618,888
Total assets	(Million yen)		54,901,470			58,010,315			53,972,363
Basic earnings per share attributable to Toyota Motor Corporation	(Yen)		608.73			525.23			727.47
(For the third quarter)			(200.79	)		(299.97	)		727.47
Diluted earnings per share attributable to Toyota Motor Corporation	(Yen)		602.17			520.04			720.10
(For the third quarter)			(198.63	)		(296.25	)		720.10
Ratio of Toyota Motor Corporation shareholders’ equity	(%)		37.9			37.6			38.2
Cash flows from operating activities	(Million yen)		2,004,496			1,834,089			2,398,496
Cash flows from investing activities	(Million yen)		(1,725,356	)		(3,689,079	)		(2,124,650	)
Cash flows from financing activities	(Million yen)		(5,710	)		2,196,066			362,805
Cash and cash equivalents at the end of period	(Million yen)		3,798,726			4,479,992			4,098,450


(Note 1)		TMC’s condensed quarterly consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”).
(Note 2)		As TMC has prepared the condensed quarterly consolidated financial statements, the History of Changes in Major Business Indices of the reporting entity is not provided.
(Note 3)		Sales revenues do not include national and local consumption taxes.

TOYOTA MOTOR CORPORATION

Corporate Overview

2. Overview of Business

Toyota Motor Corporation (“TMC”) has prepared the condensed quarterly consolidated financial statements in accordance with IFRS, and the scope of affiliated entities is based on the IFRS definition. The same applies in “Section 2. Business.”

TMC and its affiliated entities primarily conduct business in the automotive industry. TMC and its affiliated entities also conduct business in finance and other industries.

There have been no material changes to the lines of business of TMC and its affiliated entities during the first nine months ended December 31, 2020. Moreover, there have been no changes to the major affiliated entities engaging in those lines of business.

TOYOTA MOTOR CORPORATION

Business

Section 2. Business

1. Risk Factors

There were no new material matters or material changes to the risk factors during the first nine months ended December 31, 2020.

2. Management’s Analysis of Financial Position, Results of Operations and Cash Flows

TMC has replaced Generally Accepted Accounting Principles in the United States (“U.S. GAAP”) and adopted International Financial Reporting Standards (“IFRS”) for its consolidated financial statements beginning with the first quarter ended June 30, 2020. In addition, consolidated financial statements for the first nine months ended December 31, 2019 and for the fiscal year ended March 31, 2020 are also presented in accordance with IFRS for the purpose of comparative analysis.

(1)	Financial position and financial results

①	Financial results

Consolidated vehicle unit sales in Japan and overseas decreased by 1,420 thousand units, or 20.7%, to 5,438 thousand units in FY2021 first nine months (the first nine months ended December 31, 2020) compared with FY2020 first nine months (the first nine months ended December 31, 2019) mainly due to a decline of the automotive market affected by the global spread of COVID-19. Vehicle unit sales in Japan decreased by 143 thousand units, or 8.7%, to 1,513 thousand units in FY2021 first nine months compared with FY2020 first nine months. Overseas vehicle unit sales decreased by 1,277 thousand units, or 24.5%, to 3,925 thousand units in FY2021 first nine months compared with FY2020 first nine months.

TOYOTA MOTOR CORPORATION

Business

The results of operations for FY2021 first nine months were as follows:


Sales revenues	¥	19,525.2 billion	(a decrease of ¥3,441.9 billion or 15.0% compared with FY2020 first nine months)

Operating income	¥	1,507.9 billion	(a decrease of ¥531.3 billion or 26.1% compared with FY2020 first nine months)

Income before income taxes	¥	1,869.9 billion	(a decrease of ¥523.7 billion or 21.9% compared with FY2020 first nine months)

Net income attributable to Toyota Motor Corporation	¥	1,468.0 billion	(a decrease of ¥240.7 billion or 14.1% compared with FY2020 first nine months)

The changes in operating income were as follows:


Effects of marketing activities		a decrease of ¥615.0 billion

Effects of changes in exchange rates		a decrease of ¥175.0 billion

Cost reduction efforts		an increase of ¥100.0 billion

Increase or decrease in expenses and expense reduction efforts		an increase of ¥85.0 billion

Other		an increase of ¥73.7 billion

Segment operating results

(i)	Automotive:

Sales revenues for the automotive operations decreased by ¥2,967.8 billion, or 14.4%, to ¥17,614.0 billion in FY2021 first nine months compared with FY2020 first nine months, and operating income decreased by ¥620.8 billion, or 37.0%, to ¥1,058.3 billion in FY2021 first nine months compared with FY2020 first nine months. The decrease in operating income was mainly due to decreases in both production volume and vehicle unit sales.

(ii)	Financial services:

Sales revenues for the financial services operations decreased by ¥23.2 billion, or 1.4%, to ¥1,621.0 billion in FY2021 first nine months compared with FY2020 first nine months. However, operating income increased by ¥98.7 billion, or 33.0%, to ¥397.6 billion in FY2021 first nine months compared with FY2020 first nine months. The increase in operating income was mainly due to the increase in valuation gains on interest rate swaps stated at fair value and the decrease in expenses related to residual value losses, in sales finance subsidiaries.

(iii)

All other:

Sales revenues for all other businesses decreased by ¥518.5 billion, or 42.3%, to ¥706.2 billion in FY2021 first nine months compared with FY2020 first nine months, and operating income decreased by ¥20.2 billion, or 29.2%, to ¥49.0 billion in FY2021 first nine months compared with FY2020 first nine months.

TOYOTA MOTOR CORPORATION

Business

Geographic information

(i)

Japan:

Sales revenues in Japan decreased by ¥1,717.2 billion, or 13.8%, to ¥10,748.1 billion in FY2021 first nine months compared with FY2020 first nine months, and operating income decreased by ¥448.9 billion, or 36.5%, to ¥780.8 billion in FY2021 first nine months compared with FY2020 first nine months. The decrease in operating income was mainly due to decreases in both production volume and vehicle unit sales.

(ii)	North America:

Sales revenues in North America decreased by ¥1,346.6 billion, or 16.4%, to ¥6,884.1 billion in FY2021 first nine months compared with FY2020 first nine months. However, operating income increased by ¥7.7 billion, or 2.4%, to ¥331.7 billion in FY2021 first nine months compared with FY2020 first nine months. The increase in operating income was mainly due to the decrease in sales expenses.

(iii)

Europe:

Sales revenues in Europe decreased by ¥375.8 billion, or 14.7%, to ¥2,187.6 billion in FY2021 first nine months compared with FY2020 first nine months, and operating income decreased by ¥56.9 billion, or 47.6%, to ¥62.6 billion in FY2021 first nine months compared with FY2020 first nine months. The decrease in operating income was mainly due to decreases in both production volume and vehicle unit sales.

(iv)

Asia:

Sales revenues in Asia decreased by ¥561.7 billion, or 13.5%, to ¥3,599.1 billion in FY2021 first nine months compared with FY2020 first nine months, and operating income decreased by ¥9.7 billion, or 3.2%, to ¥291.6 billion in FY2021 first nine months compared with FY2020 first nine months. The decrease in operating income was mainly due to decreases in both production volume and vehicle unit sales.

(v)	Other (Central and South America, Oceania, Africa and the Middle East):

Sales revenues in other regions decreased by ¥324.7 billion, or 19.9%, to ¥1,306.3 billion in FY2021 first nine months compared with FY2020 first nine months, and operating income decreased by ¥26.4 billion, or 37.9%, to ¥43.3 billion in FY2021 first nine months compared with FY2020 first nine months. The decrease in operating income was mainly due to the effects of changes in exchange rates.

②	Financial position

The financial position of TMC as of the end of the quarter ended December 31, 2020 is as follows.

Total assets increased by ¥4,037.9 billion, or 7.5%, to ¥58,010.3 billion as of December 31, 2020 compared with the end of FY2020. Liabilities increased by ¥2,743.8 billion, or 8.4%, to ¥35,377.2 billion as of December 31, 2020 compared with the end of FY2020. Shareholders’ equity increased by ¥1,294.0 billion, or 6.1%, to ¥22,633.0 billion as of December 31, 2020 compared with the end of FY2020.

TOYOTA MOTOR CORPORATION

Business

(2) Cash Flow Status

Cash and cash equivalents increased by ¥381.5 billion, or 9.3%, to ¥4,479.9 billion as of the end of the quarter ended December 31, 2020 compared with the end of FY2020.

The cash flow status during FY2021 first nine months and the increases or decreases in cash flows in FY2021 first nine months compared with FY2020 first nine months are as follows.

Cash flows from operating activities

Net cash flows from operating activities resulted in an increase in cash by ¥1,834.0 billion in FY2021 first nine months. Net cash provided by operating activities decreased by ¥170.4 billion from an increase in cash by ¥2,004.4 billion in FY2020 first nine months.

Cash flows from investing activities

Net cash flows from investing activities resulted in a decrease in cash by ¥3,689.0 billion in FY2021 first nine months. Net cash used in investing activities increased by ¥1,963.7 billion from a decrease in cash by ¥1,725.3 billion in FY2020 first nine months.

Cash flows from financing activities

Net cash flows from financing activities resulted in an increase in cash by ¥2,196.0 billion in FY2021 first nine months. Net cash provided by investing activities increased by ¥2,201.7 billion from a decrease in cash by ¥5.7 billion in FY2020 first nine months.

TOYOTA MOTOR CORPORATION

Business

(3) Management Policy and Management Strategy

To transform itself into a mobility company, TMC has looked back on the path it has walked along and redefined the Toyota Philosophy that will be its signpost for the future.

TMC’s mission is to expand the possibilities for all humankind, companies and communities and “producing happiness for all” by addressing mobility issues as a mobility company. To that end, we value not only thorough persistence in manufacturing but also imagination toward humankind and society, and we will endeavor to create unique value with various partners.

Toyota Philosophy



		MISSION		Producing Happiness for All We will offer future convenience and happiness seized with our technologies to people in an affordable manner
		VISION		Creating Mobility for All We wish to create new possibilities for all humankind and support a sustainable relationship with our planet.
		VALUE		Combining software, hardware and partnerships to create unique value that comes from the Toyota Way

(4) Business or Financial Issues to be Addressed on a Priority Basis

There have been no material changes, and no new issues have arisen, concerning business or financial issues to be addressed on a priority basis in FY2021 first nine months.

(5) Research and Development Activities

Research and development expenditures by TMC and its consolidated subsidiaries during FY2021 first nine months totaled ¥833.4 billion. The research and development cost recorded in the condensed quarterly consolidated statement of income is ¥824.7 billion.

3. Material Contracts

TMC has not made any decision on, or executed, any agreements that are material for operations during the quarter ended December 31, 2020.

TOYOTA MOTOR CORPORATION

Company Information

Section 3. Company Information

1. Share Information

(1) Total Number of Shares and Issued Shares

① Total number of shares


Class	Total number of authorized shares (shares)
Common stock		10,000,000,000
Model AA class shares		150,000,000

Total		10,000,000,000


(Note)		The total number of authorized shares for common stock and Model AA class shares is 10,000,000,000 shares.

② Issued shares


Class	Number of issued shares at the end of FY2021 first nine months (December 31, 2020)		Number of issued shares as of the date of this report (February 12, 2021)		Financial instruments exchange on which the shares are listed or authorized financial instruments dealers association with which shares are registered	Description
Common stock		3,262,997,492		3,262,997,492	Securities exchanges in Tokyo, Nagoya, New York and London (for Tokyo and Nagoya, the first section)	Share units: 100 shares (Note 1)
First Series Model AA class shares		47,100,000		47,100,000	Not listed	(Note 2)

Total		3,310,097,492		3,310,097,492	—	—


(Note 1)		All issued shares bear voting rights.

TOYOTA MOTOR CORPORATION

Company Information

(2) Status of Stock Options

① Details of stock option plan

Not applicable

② Status of other stock options, etc.

Not applicable

(3) Status of Exercises, etc. of Moving Strike Convertible Bonds, etc.

Not applicable

(4) Changes in Total Number of Issued Shares, Stated Capital, etc.


Date	Increase or decrease in total number of issued shares (1,000 shares)		Balance of total number of issued shares (1,000 shares)		Increase or decrease in stated capital in value (million yen)		Balance of stated capital (million yen)		Increase or decrease in capital reserve in value (million yen)		Balance of capital reserve (million yen)
October 1, 2020 to December 31, 2020		—		3,310,097		—		635,401		—		655,322

(5) Status of Major Shareholders

As this quarter is the third quarter, there is nothing to report.

TOYOTA MOTOR CORPORATION

Company Information

(6) Status of Voting Rights

Since TMC is unable to confirm the details entered in the shareholders register, the status of voting rights as of the end of the quarter ended December 31, 2020 is provided based on the shareholders register as of the immediately preceding reference date (September 30, 2020).

① Issued shares

As of September 30, 2020


Category	Number of shares (shares)		(Number of voting rights (votes)		Description
Nonvoting shares	—			—		—
Shares with restricted voting rights (treasury stock, etc.)	—			—		—
Shares with restricted voting rights (other)	—			—		—
Shares with voting rights (treasury stock, etc.) (Note 1)	Common stock	474,022,200		—		—
	Series 1 Model AA class shares	2,024,900		—		—
Shares with voting rights (other) (Note 2)	Common stock	2,786,286,100		27,862,861		—
	Series 1 Model AA class shares	45,072,900		450,729		—
Shares less than one unit	Common stock	2,689,192		—		—
Shares less than one unit	Series 1 Model AA class shares	2,200		—		—

Total number of issued shares		3,310,097,492		—		—

Voting rights of all shareholders	—			28,313,590		—


(Note 1)		Shares with voting rights (treasury stock, etc.) include 469,045,400 treasury stock and 7,001,700 reciprocally held shares.
(Note 2)		Shares with voting rights (other) include 4,000 shares (40 voting rights) in the name of Japan Securities Depository Center, Inc.

TOYOTA MOTOR CORPORATION

Company Information

② Treasury stock, etc.

As of September 30, 2020


Name of shareholder	Address of shareholder	Number of common stock held in own name (shares)		Number of Model AA class shares held in own name (shares)	Number of shares held in others’ names (shares)	Total number of shares held (shares)		Shareholding ratio (%)
Toyota Motor Corporation [Treasury stock]	1 Toyota-Cho, Toyota, Aichi		467,038,200	2,007,200	—		469,045,400		14.17
Toyoda Gosei Co., Ltd.	1 Haruhinagahata Kiyosu, Aichi		1,818,200	—	—		1,818,200		0.05
Nagoya Broadcasting Network Co., Ltd.	2-10-1 Tachibana, Naka-ku, Nagoya, Aichi		900,000	3,000	—		903,000		0.03
Futaba Industrial Co., Ltd.	1 Ochaya, Hashime-cho, Okazaki, Aichi		816,300	—	—		816,300		0.02
Toyota Mizunami Development Co., Ltd.	8671-1 Hiyoshi-cho, Mizunami, Gifu		722,500	—	—		722,500		0.02
Toyoda Iron Works Co., Ltd.	4-50 Hosoya-cho, Toyota, Aichi		500,000	—	—		500,000		0.02
Aisin Takaoka Co., Ltd.	1 Tenno, Takaokashinmachi, Toyota, Aichi		484,000	—	—		484,000		0.01
Denso Ten Limited	1-2-28 Gosho-dori, Hyogo-ku, Kobe, Hyogo		347,300	—	—		347,300		0.01
Toyotomi Kiko Co., Ltd.	7 Higashi Mukaiyama, Imahon-machi, Anjo, Aichi		317,100	—	—		317,100		0.01
Toyota Boshoku Corporation	1-1 Toyoda-cho, Kariya, Aichi		237,700	—	—		237,700		0.01
Kyosan Denki Co., Ltd.	11-3 Okazato, Koga, Ibaraki		222,400	—	—		222,400		0.01
Trinity Industrial Corporation	1-9 Kakimoto-cho, Toyota, Aichi		150,600	—	—		150,600		0.00
Namicoh Co., Ltd.	1-65 Higashi-arioka, Itami, Hyogo		140,000	10,000	—		150,000		0.00
Kyowa Leather Cloth Co., Ltd.	1876 Higashi-machi, Minami-ku, Hamamatsu, Shizuoka		100,000	—	—		100,000		0.00
Aisan Industry Co., Ltd.	1-1-1 Kyowa-machi, Oobu, Aichi		97,700	—	—		97,700		0.00
Tokai Rika Co., Ltd.	3-260 Toyota, Oguchi-cho, Niwa-gun, Aichi		77,900	—	—		77,900		0.00
Taiho Kogyo Co., Ltd.	3-65 Midorigaoka, Toyota, Aichi		15,200	—	—		15,200		0.00
Tokushima Daihatsu Motors Corporation	84 Hon-urashimo, Ronden-cho, Tokushima, Tokushima		13,000	—	—		13,000		0.00
Aisin Keikinzoku Co., Ltd.	12-3 Nagonoe, Imizu, Toyama		9,900	—	—		9,900		0.00
Metalart Corporation	3-2-18 Noji, Kusatsu, Shiga		7,800	—	—		7,800		0.00
Asano Gear Co., Ltd.	4-1402-1, Higashi-ikejiri, Osaka-sayama, Osaka		6,200	—	—		6,200		0.00
Lattice Technology Co., Ltd.	2-3-21 Korakuen, Bunkyo-ku, Tokyo		—	4,700	—		4,700		0.00
Tsuda Industries Co., Ltd.	1-1-1 Saiwai-cho, Kariya, Aichi		200	—	—		200		0.00

Total	—		474,022,200	2,024,900	—		476,047,100		14.38


(Note)		Treasury stock, etc. have been calculated based on the numbers as of the relevant delivery dates.

TOYOTA MOTOR CORPORATION

Company Information

2. Directors and Audit & Supervisory Board Members

Not applicable

TOYOTA MOTOR CORPORATION

Financial Information

Section 4. Financial Information

1.	Preparation Method of Condensed Quarterly Consolidated Financial Statements

TMC’s condensed quarterly consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting (“IAS 34”) by applying the provisions of Article 93 of the Regulations on the Terminology, Forms, and Preparation Methods of Quarterly Consolidated Financial Statements (Cabinet Office Order No. 64 of 2007, “Regulations on Quarterly Consolidated Financial Statements”).

Amounts presented in the condensed quarterly consolidated financial statements are rounded to the nearest million yen. Amounts may not sum to totals due to rounding.

2.	Special Measures to Ensure the Appropriateness of the Consolidated Financial Statements and Establishment of a System for Properly Preparing Consolidated Financial Statements in accordance with IFRS

TMC implements special measures to ensure the appropriateness of its consolidated financial statements and puts in place a system to properly prepare consolidated financial statements in accordance with IFRS as detailed below.

(1)

TMC participates in organizations such as the Financial Accounting Standards Foundation (FASF) in order to put in place a system that enables TMC to appropriately understand the details of accounting standards and policies and properly address changes to accounting standards and policies. In addition, TMC attends seminars hosted by the FASF or auditing firms and has subscriptions to accounting journals.

(2)

To ensure the appropriate application of IFRS, TMC obtains press releases and statements of accounting principles published by the International Accounting Standards Board as they are published in order to gain an understanding of the most recent standards. Furthermore, to prepare appropriate consolidated financial statements in accordance with IFRS, TMC has developed its consolidated accounting policies and accounting guidelines in compliance with IFRS and processes accounting in accordance with those policies and guidelines.

(3)

To prepare appropriate consolidated financial statements, TMC puts in place and undertakes efforts to maintain an effective internal control system for financial reporting as required under Section 404 of the U.S. Public Company Accounting Reform and Investor Protection Act. To enhance accountability, TMC has a disclosure committee that ensures the completeness and appropriateness of material information to be disclosed by TMC.

TOYOTA MOTOR CORPORATION

Financial Information

1. Condensed Quarterly Consolidated Financial Statements and Notes

TOYOTA MOTOR CORPORATION

Unaudited Condensed Quarterly Consolidated Statement of Financial Position


		Yen in millions
	Notes	Transition date April 1, 2019			March 31, 2020			December 31, 2020
Assets
Current assets
Cash and cash equivalents			3,602,805			4,098,450			4,479,992
Trade accounts and other receivables			2,954,617			2,648,360			2,847,322
Receivables related to financial services	VII		6,657,367			6,621,604			6,500,567
Other financial assets	VII		2,640,392			2,143,602			4,205,732
Inventories			2,731,040			2,533,892			2,619,909
Income tax receivable			84,574			237,609			294,464
Other current assets			507,654			679,804			728,805

Total current assets			19,178,450			18,963,320			21,676,792

Non-current assets
Investments accounted for using the equity method			3,467,242			4,297,564			3,923,054
Receivables related to financial services	VII		10,281,028			10,417,797			11,527,467
Other financial assets	VII		7,769,740			7,901,517			8,071,476
Property, plant and equipment
Land			1,359,271			1,318,964			1,341,262
Buildings			4,833,278			4,741,451			4,871,734
Machinery and equipment			11,956,773			11,979,449			12,315,986
Vehicles and equipment on operating leases			6,139,163			5,928,833			5,756,225
Construction in progress			656,067			517,460			630,262

Total property, plant and equipment, at cost			24,944,551			24,486,156			24,915,468

Less - Accumulated depreciation and impairment losses			(14,260,446	)		(13,952,141	)		(14,129,887	)

Total property, plant and equipment, net			10,684,105			10,534,016			10,785,581

Right of use assets			396,830			337,335			369,909
Intangible assets			908,737			1,000,257			1,057,967
Deferred tax assets			446,383			326,364			345,278
Other non-current assets			283,889			194,192			252,790

Total non-current assets			34,237,955			35,009,043			36,333,523

Total assets			53,416,405			53,972,363			58,010,315

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

TOYOTA MOTOR CORPORATION

Unaudited Condensed Quarterly Consolidated Statement of Financial Position


		Yen in millions
	Notes	Transition date April 1, 2019			March 31, 2020			December 31, 2020
Liabilities
Current liabilities
Trade accounts and other payables			3,856,133			3,498,029			3,563,106
Short-term and current portion of long-term debt	VII		9,701,813			9,906,755			12,031,321
Accrued expenses	XI		1,350,252			1,256,794			1,214,649
Other financial liabilities	VII		475,302			538,740			817,392
Income taxes payable			321,316			212,276			405,825
Liabilities for quality assurance			1,769,514			1,552,970			1,437,861
Other current liabilities			1,008,032			1,176,645			1,140,088

Total current liabilities			18,482,362			18,142,209			20,610,241

Non-current liabilities
Long-term debt	VII		11,342,315			11,434,219			11,943,533
Other financial liabilities	VII		189,957			360,588			331,459
Retirement benefit liabilities			1,002,710			1,022,161			1,056,051
Deferred tax liabilities			1,227,292			1,198,005			999,677
Other non-current liabilities			516,560			476,169			436,276

Total non-current liabilities			14,278,833			14,491,142			14,766,995

Total liabilities			32,761,195			32,633,351			35,377,237

Shareholders’ equity
Common stock			397,050			397,050			397,050
Additional paid-in capital			487,162			489,334			504,291
Retained earnings			20,613,776			22,234,061			23,102,819
Other components of equity			1,016,035			585,549			701,586
Treasury stock			(2,606,925	)		(3,087,106	)		(2,901,627	)

Total Toyota Motor Corporation shareholders’ equity			19,907,100			20,618,888			21,804,119

Non-controlling interests			748,110			720,124			828,959

Total shareholders’ equity			20,655,210			21,339,012			22,633,078

Total liabilities and shareholders’ equity			53,416,405			53,972,363			58,010,315

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

TOYOTA MOTOR CORPORATION

Unaudited Condensed Quarterly Consolidated Statement of Income and

Unaudited Condensed Quarterly Consolidated Statement of Comprehensive Income

Condensed Quarterly Consolidated Statement of Income


		Yen in millions
	Notes	For the first nine months ended December 31, 2019			For the first nine months ended December 31, 2020
Sales revenues
Sales of products	IX		21,338,170			17,922,573
Financial services	IX		1,629,038			1,602,683

Total sales revenues	IX		22,967,208			19,525,255

Costs and expenses
Cost of products sold			17,767,373			15,289,445
Cost of financial services			1,013,940			881,533
Selling, general and administrative			2,146,579			1,846,356

Total costs and expenses			20,927,893			18,017,334

Operating income			2,039,315			1,507,922

Share of profit (loss) of investments accounted for using the equity method			275,702			201,474
Other finance income			202,796			220,854
Other finance costs			(34,400	)		(33,096	)
Foreign exchange gain (loss), net			(56,986	)		(12,808	)
Other income (loss), net			(32,667	)		(14,356	)

Income before income taxes			2,393,760			1,869,989

Income tax expense			623,575			371,292

Net income			1,770,185			1,498,697

Net income attributable to
Toyota Motor Corporation			1,708,838			1,468,064
Non-controlling interests			61,347			30,633

Net income			1,770,185			1,498,697



		Yen
Earnings per share attributable to Toyota Motor Corporation
Basic	X		608.73	525.23

Diluted	X		602.17	520.04

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

TOYOTA MOTOR CORPORATION

Unaudited Condensed Quarterly Consolidated Statement of Income and

Unaudited Condensed Quarterly Consolidated Statement of Comprehensive Income

Condensed Quarterly Consolidated Statement of Comprehensive Income


		Yen in millions
	Notes	For the first nine months ended December 31, 2019			For the first nine months ended December 31, 2020
Net income			1,770,185			1,498,697
Other comprehensive income, net of tax
Items that will not be reclassified to profit (loss)
Net changes in revaluation of financial assets measured at fair value through other comprehensive income			291,348			192,880
Remeasurements of defined benefit plans			(9,554	)		(2,381	)
Share of other comprehensive income of equity method investees			51,514			(2,739	)

Total of items that will not be reclassified to profit (loss)			333,308			187,760

Items that may be reclassified subsequently to profit (loss)
Exchange differences on translating foreign operations			(99,836	)		27,415
Net changes in revaluation of financial assets measured at fair value through other comprehensive income			27,583			(28,450	)
Share of other comprehensive income of equity method investees			(54,657	)		(24,184	)

Total of items that may be reclassified subsequently to profit (loss)			(126,910	)		(25,219	)

Total other comprehensive income, net of tax			206,398			162,541

Comprehensive income			1,976,583			1,661,238

Comprehensive income for the period attributable to
Toyota Motor Corporation			1,910,336			1,610,308
Non-controlling interests			66,247			50,929

Comprehensive income			1,976,583			1,661,238

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

TOYOTA MOTOR CORPORATION

Unaudited Condensed Quarterly Consolidated Statement of Income and

Unaudited Condensed Quarterly Consolidated Statement of Comprehensive Income

Condensed Quarterly Consolidated Statement of Income


		Yen in millions
	Notes	For the third quarter ended December 31, 2019			For the third quarter ended December 31, 2020
Sales revenues
Sales of products	IX		7,061,014			7,605,418
Financial services	IX		547,917			544,615

Total sales revenues	IX		7,608,931			8,150,032

Costs and expenses
Cost of products sold			5,866,014			6,211,206
Cost of financial services			360,742			282,124
Selling, general and administrative			742,078			668,762

Total costs and expenses			6,968,834			7,162,092

Operating income			640,097			987,941

Share of profit (loss) of investments accounted for using the equity method			75,836			125,084
Other finance income			61,093			52,879
Other finance costs			(11,851	)		(9,859	)
Foreign exchange gain (loss), net			26,326			(622	)
Other income (loss), net			(19,559	)		(14,249	)

Income before income taxes			771,941			1,141,174

Income tax expense			185,748			273,666

Net income			586,193			867,508

Net income attributable to
Toyota Motor Corporation			559,298			838,696
Non-controlling interests			26,894			28,812

Net income			586,193			867,508


		Yen
Earnings per share attributable to Toyota Motor Corporation
Basic	X		200.79	299.97

Diluted	X		198.63	296.25

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

TOYOTA MOTOR CORPORATION

Unaudited Condensed Quarterly Consolidated Statement of Income and

Unaudited Condensed Quarterly Consolidated Statement of Comprehensive Income

Condensed Quarterly Consolidated Statement of Comprehensive Income


		Yen in millions
	Notes	For the third quarter ended December 31, 2019			For the third quarter ended December 31, 2020
Net income			586,193			867,508
Other comprehensive income, net of tax
Items that will not be reclassified to profit (loss)
Net changes in revaluation of financial assets measured at fair value through other comprehensive income			190,037			202,914
Remeasurements of defined benefit plans			(4,480	)		(246	)
Share of other comprehensive income of equity method investees			9,659			39,114

Total of items that will not be reclassified to profit (loss)			195,216			241,782

Items that may be reclassified subsequently to profit (loss)
Exchange differences on translating foreign operations			168,718			16,627
Net changes in revaluation of financial assets measured at fair value through other comprehensive income			(37,025	)		(13,351	)
Share of other comprehensive income of equity method investees			(6,204	)		11,501

Total of items that may be reclassified subsequently to profit (loss)			125,489			14,777

Total other comprehensive income, net of tax			320,705			256,560

Comprehensive income			906,897			1,124,068

Comprehensive income for the period attributable to
Toyota Motor Corporation			869,151			1,087,116
Non-controlling interests			37,746			36,952

Comprehensive income			906,897			1,124,068

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

TOYOTA MOTOR CORPORATION

Unaudited Condensed Quarterly Consolidated Statement of Changes in Equity

For the first nine months ended December 31, 2019


			Yen in millions
	Notes		Common stock		Additional paid-in capital			Retained earnings			Other components of equity			Treasury stock			Toyota Motor Corporation shareholders’ equity			Non-controlling interests			Total shareholders’ equity
Balances at April 1, 2019				397,050		487,162			20,613,776			1,016,035			(2,606,925	)		19,907,100			748,110			20,655,210

Comprehensive income
Net income				—		—			1,708,838			—			—			1,708,838			61,347			1,770,185
Other comprehensive income, net of tax				—		—			—			201,498			—			201,498			4,900			206,398

Total comprehensive income				—		—			1,708,838			201,498			—			1,910,336			66,247			1,976,583
Transactions with owners and other
Dividends paid		VIII		—		—			(618,801	)		—			—			(618,801	)		(54,716	)		(673,517	)
Repurchase of treasury stock				—		—			—			—			(370,329	)		(370,329	)		—			(370,329	)
Equity transactions and other				—		229			—			—			—			229			(3,654	)		(3,425	)

Total transactions with owners and other				—		229			(618,801	)		—			(370,329	)		(988,901	)		(58,370	)		(1,047,271	)
Reclassification to retained earnings				—		—			1,692			(1,692	)		—			—			—			—

Balances at December 31 , 2019				397,050		487,392			21,705,505			1,215,840			(2,977,254	)		20,828,533			755,987			21,584,520


For the first nine months ended December 31, 2020
			Yen in millions
	Notes		Common stock		Additional paid-in capital			Retained earnings			Other components of equity			Treasury stock			Toyota Motor Corporation shareholders’ equity			Non-controlling interests			Total shareholders’ equity
Balances at April 1, 2020				397,050		489,334			22,234,061			585,549			(3,087,106	)		20,618,888			720,124			21,339,012

Comprehensive income
Net income				—		—			1,468,064			—			—			1,468,064			30,633			1,498,697
Other comprehensive income, net of tax				—		—			—			142,244			—			142,244			20,297			162,541

Total comprehensive income				—		—			1,468,064			142,244			—			1,610,308			50,929			1,661,238
Transactions with owners and other
Dividends paid		VIII		—		—			(625,514	)		—			—			(625,514	)		(35,858	)		(661,372	)
Repurchase of treasury stock				—		—			—			—			(65	)		(65	)		—			(65	)
Reissuance of treasury stock				—		15,041			—			—			185,544			200,585			—			200,585
Change in scope of consolidation				—		—			—			—			—			—			75,260			75,260
Equity transactions and other				—		(83	)		—			—			—			(83	)		18,503			18,420

Total transactions with owners and other				—		14,958			(625,514	)		—			185,479			(425,077	)		57,906			(367,171	)
Reclassification to retained earnings				—		—			26,208			(26,208	)		—			—			—			—

Balances at December 31 , 2020				397,050		504,291			23,102,819			701,586			(2,901,627	)		21,804,119			828,959			22,633,078

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

TOYOTA MOTOR CORPORATION

Unaudited Condensed Quarterly Consolidated Statement of Cash Flows


			Yen in millions
	Notes		For the first nine months ended December 31, 2019			For the first nine months ended December 31, 2020
Cash flows from operating activities
Net income				1,770,185			1,498,697
Depreciation and amortization				1,190,951			1,218,187
Interest income and interest costs related to financial services, net				(153,554	)		(179,525	)
Share of profit (loss) of investments accounted for using the equity method				(275,702	)		(201,474	)
Income tax expense				623,575			371,292
Changes in operating assets and liabilities, and other				(982,859	)		(891,402	)
Interest received				603,379			586,251
Dividends received				317,043			286,345
Interest paid				(369,929	)		(329,170	)
Income taxes paid, net of refunds				(718,593	)		(525,113	)

Net cash provided by (used in) operating activities				2,004,496			1,834,089

Cash flows from investing activities
Additions to fixed assets excluding equipment leased to others				(963,240	)		(953,430	)
Additions to equipment leased to others				(1,734,289	)		(1,596,399	)
Proceeds from sales of fixed assets excluding equipment leased to others				26,934			28,195
Proceeds from sales of equipment leased to others				1,064,857			1,000,085
Additions to intangible assets				(206,262	)		(200,780	)
Additions to public and corporate bonds and stocks				(1,182,554	)		(1,803,956	)
Proceeds from sales of public and corporate bonds and stocks and upon maturity of public and corporate bonds				1,616,283			1,712,421
Other, net		XII		(347,084	)		(1,875,215	)

Net cash provided by (used in) investing activities				(1,725,356	)		(3,689,079	)

Cash flows from financing activities
Increase (decrease) in short-term debt				228,070			(762,114	)
Proceeds from long-term debt				4,115,284			7,230,747
Payments of long-term debt				(3,305,218	)		(3,811,132	)
Dividends paid to Toyota Motor Corporation common shareholders		VIII		(618,801	)		(625,514	)
Dividends paid to non-controlling interests				(54,716	)		(35,858	)
Reissuance (repurchase) of treasury stock				(370,329	)		199,937

Net cash provided by (used in) financing activities				(5,710	)		2,196,066

Effect of exchange rate changes on cash and cash equivalents				(28,499	)		40,466

Net increase (decrease) in cash and cash equivalents				244,931			381,542

Cash and cash equivalents at beginning of period				3,602,805			4,098,450

Cash and cash equivalents reclassified to assets held for sale				(49,010	)		—

Cash and cash equivalents at end of period				3,798,726			4,479,992

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

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

I.	Reporting entity

TMC is a limited liability, joint-stock company located in Japan, and TMC’s principal executive offices are registered in Toyota City, Aichi Prefecture. For the first nine months and third quarter ended December 31, 2020, the condensed quarterly consolidated financial statements of the group consist of TMC, its consolidated subsidiaries (collectively, “Toyota”) and their interests in associates and joint ventures.

Toyota and its associates 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 associates provide financing, vehicle 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 associates.

II.

Basis of preparation

1. Compliance with international financial reporting standards

Toyota’s condensed quarterly consolidated financial statements have been prepared in accordance with IAS 34 “Interim Financial Reporting”.

TMC has prepared its consolidated financial statements in accordance with IFRS from the first quarter of the fiscal year starting April 1, 2020, and the date of the transition to IFRS (“Transition Date”) was April 1, 2019. In the transition to IFRS, TMC has adopted IFRS 1 “First-time Adoption of International Financial Reporting Standards” (“IFRS 1”). The effect of the transition to IFRS on Toyota’s financial position, results of operations and cash flows are presented in “XIII. First-time adoption”.

The condensed quarterly consolidated financial statements were approved on February 10, 2021 by the Board of Directors.

2. Basis of measurement

Toyota’s condensed quarterly consolidated financial statements have been prepared on a historical cost basis, except for certain financial assets and liabilities measured at fair value and assets and liabilities associated with defined benefit plans indicated in “III. Significant accounting policies”.

3. Functional currency and presentation currency

The condensed quarterly consolidated financial statements are presented in Japanese yen, which is the functional currency of TMC. All financial information presented in Japanese yen has been rounded to the nearest million Japanese yen, except when otherwise indicated. Amounts may not sum to totals due to rounding.

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

III.

Significant accounting policies

1. Basis of consolidation

(1) Subsidiaries

The condensed quarterly consolidated financial statements include the accounts of TMC, its subsidiaries that are controlled by TMC, and those structured entities that are controlled by Toyota. Toyota controls an entity when Toyota is exposed or has rights to variable returns from involvement with the entity, and has the ability to affect those returns by using its power over the entity.

The financial statements of subsidiaries have been adjusted in order to ensure consistency with the accounting policies adopted by Toyota as necessary. All significant intercompany balances and transactions as well as the unrealized profit have been eliminated in consolidation.

Changes in a subsidiary’s ownership interests that do not result in a loss of control are accounted for as equity transactions. When control over a subsidiary is lost, any gain or loss on the disposal of the interest sold is recognized in profit or loss.

(2) Associates and joint ventures

Associates are entities over which Toyota has a significant influence over the decisions on financial and operating policies, but does not have control or joint control.

Joint ventures are entities over which two or more parties including Toyota have joint control, based on a contractual arrangement, and financial and business decisions about the relevant activities of which require unanimous consent of the parties that have joint control.

Investments in associates and joint ventures are accounted for using the equity method. The financial statements of associates and joint ventures have been adjusted in order to ensure consistency with the accounting policies adopted by Toyota as necessary.

When the use of the equity method is discontinued from the date when the investees are determined to be no longer associates or joint ventures, any gain or loss on such disposal of the investment is recognized in profit or loss.

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

2. Foreign currency translation

(1) Foreign currency transactions

Foreign currency transactions are translated into the respective functional currencies of Toyota at the exchange rates prevailing when such transactions occur. All foreign currency receivables and payables are translated into the respective functional currencies at the applicable exchange rates at the end of the reporting period. Non-monetary assets and liabilities in foreign currencies that are measured at fair value are translated into the functional currency using the exchange rate on the date when the fair value was measured. Gains or losses on exchange differences arising from settlement of foreign currency receivables and payables or on their translations at the end of the reporting date are recognized in profit or loss. Furthermore, exchange differences arising from financial assets measured at fair value through other comprehensive income is recognized as other comprehensive income.

(2) Foreign operations

All assets and liabilities of foreign subsidiaries, associates and joint ventures (collectively, “foreign operations”) that use a functional currency other than Japanese yen are translated into Japanese yen at the exchange rates at the end of the reporting period. All revenues and expenses of foreign operations are translated into Japanese yen at the average exchange rate for the period unless the exchange rate fluctuates widely. Exchange differences arising from such translations are recognized in other comprehensive income and accumulated in other components of equity in the condensed quarterly consolidated statement of financial position. When a foreign operation is disposed of, and control, significant influence or joint control over the foreign operation is lost, the cumulative amount of exchange differences relating to the foreign operation is reclassified from equity to profit or loss.

3. Cash and cash equivalents

Cash and cash equivalents consist of cash on hand, demand deposits, and short-term investments that are readily convertible to cash and are subject to insignificant risk of changes in value with three months or less maturities from the acquisition date.

4. Financial instruments

(1) Financial assets

(i) Initial recognition and measurement

Toyota initially recognizes financial assets when it becomes a party to a contract and except for derivatives, classifies financial assets into “financial assets measured at amortized cost”, “debt and equity financial assets measured at fair value through other comprehensive income” or “financial assets measured at fair value through profit or loss”. The sale or purchase of financial assets that occurred in the normal course of business are recognized and derecognized at the trade date.

Financial assets classified as being measured at fair value through profit or loss are measured at fair value, but other financial assets are initially recognized and measured at fair value adding transaction costs directly attributable to acquisition. Trade receivables that do not contain significant financial elements are measured at the transaction price.

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

(a) Financial assets measured at amortized cost

Toyota classifies a financial asset as measured at amortized cost if both of the following conditions are met:

The asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

(b) Debt financial assets measured at fair value through other comprehensive income

Debt financial assets are measured at fair value through other comprehensive income only if it meets both of the following conditions:

The asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

For equity financial assets such as shares held mainly for the purpose of maintaining or enhancing business relationships with investees are irrevocably designated at initial recognition, as financial assets measured at fair value through other comprehensive income.

(d) Financial assets measured at fair value through profit or loss

Financial assets other than (a) to (c) are classified as financial assets measured at fair value through profit or loss.

(ii) Subsequent measurement

After initial recognition, financial assets are measured based on the following classification.

(a) Financial assets measured at amortized cost

Financial assets measured at amortized cost are measured at amortized cost using the effective interest method.

(b) Debt financial assets measured at fair value through other comprehensive income

Subsequent changes in fair value of the financial assets are recognized as other comprehensive income. Impairment gains or losses, interest income and foreign exchange gains and losses are recognized in profit or loss. When the financial assets are derecognized, the cumulative gain or loss recognized in other comprehensive income is reclassified from other components of equity to profit or loss.

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

Subsequent changes in fair value of the financial assets are recognized as other comprehensive income. When the financial assets are derecognized, the cumulative gain or loss recognized through other comprehensive income is reclassified from other components of equity to retained earnings. Dividends from equity financial assets are recognized in profit or loss.

(d) Financial assets measured at fair value through profit or loss

Subsequent changes in the fair value of the financial assets are recognized in profit or loss.

(iii) Impairment of financial assets

An allowance for credit losses is provided for expected credit losses on financial assets that are measured at amortized cost as well as debt financial assets measured at fair value through other comprehensive income. An allowance for credit losses is also provided for expected credit losses on loan commitments or financial guarantee agreements that are off-balance sheet credit exposures.

At the end of the reporting period, Toyota assesses whether the credit risk on financial assets have significantly increased since initial recognition. At the end of the reporting period, if Toyota identifies a significant increase in credit risk, allowances for credit losses are measured as being equal to the amount of expected credit losses that would result from default events that are possible over the expected life of a financial asset. At the end of the reporting period, if the credit risk for a financial instrument has not increased significantly since its initial recognition, allowances for credit losses are measured as being equal to the amount of the expected credit losses caused by default events that may occur within 12 months from the end of the reporting period.

For accounts receivable that are included in “Trade accounts and other receivables” and finance lease receivables, the allowance for credit losses is continuously measured at amounts equal to expected credit losses over the expected life of financial assets.

The amount of expected credit losses is measured as the present value of all cash short falls resulting from the difference between the cash flows due to Toyota in accordance with the contract and cash flows that Toyota expects to receive, and such amount is recognized in profit or loss. A reversal of the allowance for credit losses resulting from a reduction in the amount of expected credit losses is recognized in profit or loss.

If there is objective evidence of impairment such as significant financial difficulty of a borrower, or a default or delinquency by a borrower, interest income is measured applying the effective interest method to the net carrying amount of the financial asset (after deducting the allowance for credit loss). Financial assets are written off either partially or fully when there is no reasonable expectation of recovering a financial asset in its entirely or a portion thereof.

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

(iv) Derecognition of financial assets

Toyota derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or when Toyota transfers the contractual right to receive cash flows from financial assets in transactions in which substantially all the risks and rewards of ownership of the asset are transferred to another entity. Even if Toyota transfers a financial asset, it neither transfers nor holds substantially all the risks and rewards of ownership of such transferred financial asset. Further, in cases where Toyota continues to control such a transferred financial asset, Toyota recognizes the retained interest on such financial asset and the relevant liabilities that might possibly be paid in association therewith.

(2) Financial liabilities

(i) Initial recognition and measurement

Toyota initially measures financial liabilities other than derivatives at fair value less transaction costs directly attributable to the issuance of financial liabilities.

(ii) Subsequent measurement

Toyota subsequently measures financial liabilities at amortized cost using the effective interest method. Amortization under the effective interest method and gain or losses on derecognition are recognized as finance income or costs and recognized in profit or loss.

(iii) Derecognition of financial liabilities

Toyota derecognizes financial liabilities when the financial liabilities expire, that is, when the liability identified in the contract expires due to performance, discharges, cancels, or expires.

(3) Derivative financial instruments

Toyota employs derivative financial instruments, including forward foreign 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 transactions are measured at fair value as assets or liabilities.

Toyota does not use derivative financial instruments for speculative or trading purposes.

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

5. Finance receivables

Finance receivables recorded on Toyota’s condensed quarterly consolidated statement of financial position are net of any unearned financial 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 finance receivable portfolios is based primarily on the qualitative consideration of the nature of Toyota’s business operations and finance receivables. The three portfolios within finance receivables are as follows:

(1) Retail receivables portfolio

The retail receivables portfolio 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 are non-recourse, which relieves the dealers from financial responsibility in the event of repossession.

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

(2) Finance lease receivables portfolio

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 manages the finance lease receivables portfolio as one portfolio based on common risk characteristics associated with the underlying finance receivables and the similarity of the credit risks.

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

(3) Wholesale and other dealer loan receivables portfolio

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.

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 manages the wholesale and other dealer loan receivables portfolio as one portfolio based on the risk characteristics associated with the underlying finance receivables.

6. Allowance for credit losses on finance receivables

The allowance for credit losses on finance receivables is measured at the portfolio level, 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, forward-looking information including movements of the world economy and other pertinent factors. Furthermore, portfolios are grouped based on similarities of risk characteristics, such as product and collateral classes, when calculating expected credit losses in the aggregate.

(1) Retail receivables portfolio

With respect to retail receivables, Toyota reviews whether the credit risk on finance receivables has increased significantly. To evaluate the risk, Toyota uses the changes for the possibility of a credit loss occurring or days in arrears as an index. Toyota assesses the significant increases in credit risk when contractual payments are more than 30 days past due. When the credit risk on finance receivables has not increased significantly since initial recognition, Toyota measures the loss allowance for that finance receivables at an amount equal to 12-month expected credit losses at the reporting date.

Meanwhile, Toyota measures the loss allowance for finance receivables at an amount equal to the lifetime expected credit losses if the credit risk on that finance receivables has increased significantly since initial recognition at the reporting date. Toyota calculates the loss allowance for finance receivables at an amount equal to the lifetime expected credit losses by considering historical credit loss experience and future collectability, when there is evidence that finance receivables is credit-impaired such as a significant deterioration in the financial condition of the debtor, or breach of contract due to default or delayed contractual payments.

In calculating expected credit losses, Toyota uses the probability of a default and the loss rate in the event of a default based on past experience and then reflects its forecasts of current and future economic conditions.

Suspension of payment over a certain period of time and or situations which contractual obligations are not being met are considered as being in default in accordance with internal management rules.

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

(2) Finance lease receivables portfolio

With respect to the finance lease receivables portfolio, Toyota always measures loss allowance at an amount equal to lifetime expected credit losses. Suspension of payment over a certain period of time and/or situations which contractual obligations are not being met are considered as being in default in accordance with internal management rules.

(3) Wholesale and other dealer loan receivables portfolio

With respect to the wholesale and other dealer loan receivables portfolio, receivables are sorted primarily by credit qualities based on internal risk assessments. Toyota reviews the change of the segment as an index whether the credit risk on finance receivables has increased significantly since initial recognition to assess these receivables for credit risk. Toyota assesses the significant increases in credit risk when contractual payments are more than 30 days past due. If the credit risk on finance receivables has not increased significantly since initial recognition, Toyota measures the loss allowance for that finance receivables at an amount equal to 12-month expected credit losses at the reporting date.

Meanwhile, Toyota measures the loss allowance for finance receivables at an amount equal to the lifetime expected credit losses if the credit risk on that finance receivables has increased significantly since initial recognition at the reporting date. Toyota calculates the loss allowance for finance receivables at an amount equal to the lifetime expected credit losses by considering historical credit loss experience and future collectability, when there is evidence that finance receivables are credit-impaired such as a debtor’s worsened financial conditions, breach of contract due to default or delayed contractual payments.

Suspension of payment over a certain period of time and/or situations where contractual obligations are not being met are considered as defaults in accordance with internal management rules.

7. Inventories

Inventories are valued at cost, not in excess of net realizable value. Net realizable value is the estimated selling price in the ordinary course of business less the estimated original cost and estimated selling expense to product completion. The cost of inventories includes purchase costs, conversion costs and other costs incurred in bringing the inventories to their present location and condition. The cost is determined principally by using the weighted-average method.

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

8. Property, plant and equipment

Property, plant and equipment is measured based on the cost model and carried at its cost less accumulated depreciation and impairment losses. Expenditures relating to major renewals and improvements are capitalized; minor replacements, maintenance and repairs are charged to current operations as incurred. Depreciation of property, plant and equipment, except for land that is not subject to depreciation, is calculated on the straight-line method over the estimated useful life of the respective assets according to general class, type of structure and use. The estimated useful lives range from 2 to 65 years for buildings and from 2 to 20 years for machinery and equipment.

The depreciation method, useful lives and residual values of property, plant and equipment are reviewed annually at each fiscal year end, and adopted prospectively, if applicable.

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 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 lease contracts are capitalized and amortized on a straight-line method over the lease term.

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

9. Intangible assets

Intangible assets are measured based on the cost model and carried at their cost less accumulated amortization and impairment losses.

The estimated useful lives and the amortization method of intangible assets are reviewed annually at each fiscal year end, and adopted prospectively, if appropriate.

(1) Capitalized development cost

Development expenditure for a product is capitalized only when there is a technical and commercial feasibility of completing the development, Toyota has the intention, ability and sufficient resources to use the outcome of the development, it is probable that the outcome will generate a future economic benefit, and the cost can be measured reliably.

Capitalized development cost is amortized using the straight-line method over the expected product life cycle of the developed product ranging mainly from 5 to 10 years.

(2) Other intangible assets

Other intangible assets mainly consist of software for internal use and amortized using the straight-line method over their estimated useful lives, mainly 5 years. Goodwill is not material to Toyota’s condensed quarterly consolidated statement of financial position.

10. Impairment of non-financial assets

At the end of the reporting period, the carrying amount of non-financial assets other than inventories and deferred tax assets are assessed to determine whether or not there is any indication of impairment. If there is such an indication, the recoverable amount of such an asset or a cash-generating unit is estimated. An impairment loss would be recognized when the carrying amount of an asset or a cash-generating unit exceeds the estimated discounted cash flows expected to result from the use of the assets and its eventual disposition. The amount of the impairment loss to be recorded is calculated by the excess of the carrying amount of the assets over its recoverable amount.

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

11. Leases

At the inception of a contract, Toyota assesses whether the contract is, or contains, a lease.

(1) Lessee

Toyota recognizes a right of use asset and a lease liability at the lease commencement date. The cost of the right of use asset is measured at the amount of the initial measurement of the lease liability by adjusting any lease payments made or before the commencement date. Lease liability is initially measured at the present value of the lease payments that are not paid as of the commencement date.

After the commencement date, Toyota applies a cost model and subsequently depreciates the right of use asset using a straight-line method from the commencement date to the earlier of the end of the useful life of the right of use asset or the end of the lease term. Lease liability is measured at amortized cost using the effective interest method. In the condensed quarterly consolidated statement of financial position, lease liability is included in short-term and long-term debt. Interest on the lease liability in each period during the lease term is the amount that produces a constant periodic rate of interest on the remaining balance of the lease liability and recognized in profit or loss over the lease term.

Many lease contracts relating to land and buildings entered into by Toyota include extension options that can be exercisable by Toyota as lessee for various purposes, such as to ensure business flexibility. Toyota assesses whether it is reasonably certain to exercise an extension option, and if it assesses it to be reasonably certain, the extension option is included in the lease term.

Toyota recognizes the lease payments associated with lease terms of 12 months or less as an expense on a straight-line basis over the lease term.

(2) Lessor

With respect to lessor lease transactions, Toyota determines at the commencement of the lease whether each lease is a finance lease or operating lease.

A lease is classified as a finance lease if it transfers substantially all of the risks and rewards incidental to the ownership of an underlying asset. Otherwise leases are classified as operating leases.

Toyota recognizes the operating lease payments in profit or loss on a straight-line basis over the lease term.

12. Employee benefit obligations

Toyota has both defined benefit and defined contribution plans for employees’ retirement benefits.

(1) Defined benefit plan

The present value of defined benefit obligations and service cost are principally determined for each plan using the projected unit credit method. The net defined benefit liability (asset) is the present value of the defined benefit obligations less the fair value of plan assets. Current service cost and net interest on the net defined benefit liability (asset) are recognized as net income (loss) on the statement of net income.

Past service cost is recognized in profit or loss upon occurrence.

Toyota recognizes the difference arising from remeasurement of the net defined benefit liability (asset) including actuarial gains and losses in other comprehensive income when it is incurred and reclassifies it immediately to retained earnings.

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

(2) Defined contribution plan

For defined contribution plans, when the employees render services, the contribution payables are recognized in profit or loss.

13. Product warranty obligations

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. The accrued warranty costs represent management’s best estimate at the time of sale of the total costs that Toyota will incur to repair or replace product parts that fail while still under warranty. The amount of accrued estimated warranty costs is primarily based on historical experience of product failures as well as current information on repair costs.

Toyota accrues for costs of recalls and other safety measures when they are probable and reasonably estimable. Toyota mainly employs an estimation model, to accrue for costs of recalls and other safety measures at the time the related sale is recognized based on historical experience.

14. Revenue recognition

In the automotive operations, performance obligations are considered to be satisfied when completed vehicles and parts are delivered to the agreed locations with dealers. For parts for production, it is when they are loaded on a ship or delivered to manufacturing companies. We do not have any material significant payment terms as payment is received at or shortly after the point of sale.

Toyota’s sales incentive programs principally consist of cash payments to dealers calculated based on total vehicle volume or vehicle unit sales of certain models 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 utilizing the most likely outcome method.

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

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 accordance with lease accounting. The underlying vehicles of these transactions are recorded as assets and are depreciated in accordance with Toyota’s depreciation policy.

Interest income from financial services is recognized using the effective interest method. Revenues from operating leases are recognized on a straight-line basis over the lease term.

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

Revenue is recognized net of any taxes collected from customers and subsequently remitted to governmental authorities.

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

15. Income taxes

Income tax expenses are presented as the aggregate amount of current taxes and deferred taxes.

Deferred tax assets and deferred tax liabilities are recognized for future tax consequences attributable to temporary differences between the carrying amount of assets or liabilities in the consolidated statements of financial position and the tax base of the assets or liabilities and carryforwards of unused tax losses and tax credits.

Deferred tax assets are recognized for all future deductible amounts, to the extent that it is probable that we will have sufficient profit to utilize the benefit of future deductible amounts.

Deferred tax liabilities for deductible temporary differences arising from investments in subsidiaries, associates, and interest in joint ventures are recognized in principle. However, they are not recognized when Toyota is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets and deferred tax liabilities are measured at the tax rates that are expected to apply in the period when the assets are realized or the liabilities are settled, based on the tax rates and tax laws enacted or substantively enacted at the end of the reporting period. The measurement of deferred tax assets and deferred tax liabilities reflects the tax consequences that would follow from the manner in which Toyota expects, at the end of reporting period, to recover or settle the carrying amount of its assets and liabilities.

Income taxes for the first nine months ended December 31, 2020 are calculated based on the estimated average annual effective income tax rate.

16. Earnings per share attributable to Toyota Motor Corporation

Basic earnings per share attributable to Toyota Motor Corporation is calculated by dividing net income attributable to Toyota Motor Corporation by the weighted-average number of common shares outstanding with adjustment for treasury stock during the reporting period. Diluted earnings per share attributable to Toyota Motor Corporation is calculated by dividing net income attributable to Toyota Motor Corporation by the weighted-average number of common shares outstanding taking into consideration the effect of dilutive securities.

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

IV.

Significant accounting judgments and estimates

The preparation of the consolidated financial statements in conformity with IFRS requires management to make judgments, estimates, and assumptions that affect the application of accounting policies, the reported amounts of assets, liabilities, revenue and expenses, and the disclosure of contingent assets and liabilities. Actual results could differ from these estimates. These estimates and underlying assumptions are reviewed on a continuous basis. Changes in these accounting estimates are recognized in the period in which the estimates were revised and in any future periods affected.

Information about important estimation and judgments that have significant effects on the amounts recognized in the consolidated financial statements is as follows:

Scope of subsidiaries, associates, and joint ventures (Note III 1)

Intangible assets incurred by research and development (Note III 9)

Information about accounting estimates and assumption that affect the application of accounting policies and the reported amounts of assets and liabilities, and financial statements based on IFRS is as follows:

Product warranty obligations (Note III 13)

Allowance for credit losses on finance receivables (Note III 6)

Impairment of non-financial assets (Note III 10)

Employee benefit obligations (Note III 12)

Fair value measurements (Note VII)

Recoverability of deferred tax assets (Note III 15)

V.	Additional information

For the first nine months ended December 31, 2020, sales revenues decreased by ¥3,441,953 million, or 15.0%, to ¥19,525,255 million, operating income decreased by ¥531,394 million, or 26.1%, to ¥1,507,922 million compared with the first nine months ended December 31, 2019. These decreases were mainly due to a decline of the automotive market affected by the global spread of COVID-19. Income before income taxes decreased by ¥523,771 million, or 21.9%, to ¥1,869,989 million, net income attributable to Toyota Motor Corporation decreased by ¥240,774 million, or 14.1%, to ¥1,468,064 million compared with the first nine months ended December 31, 2019.

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

VI.

Segment information

1. Outline of reporting segments

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 leasing operations to assist in the merchandising of Toyota’s products as well as other products. The All other segment includes telecommunications and other businesses.

2. Segment operating results

For the first nine months ended December 31, 2019:


	Yen in millions
	Automotive		Financial services		All other		Elimination			Consolidated
Sales revenues
Revenues from external customers		20,562,103		1,629,038		776,067		—			22,967,208
Inter-segment revenues and transfers		19,808		15,252		448,764		(483,825	)		—

Total		20,581,911		1,644,291		1,224,831		(483,825	)		22,967,208
Operating expenses		18,902,654		1,345,386		1,155,596		(475,742	)		20,927,893

Operating income		1,679,257		298,905		69,235		(8,083	)		2,039,315


For the first nine months ended December 31, 2020:
	Yen in millions
	Automotive		Financial services		All other		Elimination			Consolidated
Sales revenues
Revenues from external customers		17,588,339		1,602,683		334,233		—			19,525,255
Inter-segment revenues and transfers		25,696		18,392		372,052		(416,140	)		—

Total		17,614,035		1,621,074		706,286		(416,140	)		19,525,255
Operating expenses		16,555,654		1,223,446		657,280		(419,046	)		18,017,334

Operating income		1,058,382		397,628		49,006		2,905			1,507,922

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

For the third quarter ended December 31, 2019:


	Yen in millions
	Automotive		Financial services		All other		Elimination			Consolidated
Sales revenues
Revenues from external customers		6,817,039		547,917		243,975		—			7,608,931
Inter-segment revenues and transfers		4,901		5,013		156,604		(166,519	)		—

Total		6,821,940		552,931		400,579		(166,519	)		7,608,931
Operating expenses		6,250,973		480,982		374,141		(137,262	)		6,968,834

Operating income		570,967		71,949		26,438		(29,257	)		640,097


For the third quarter ended December 31, 2020:
	Yen in millions
	Automotive		Financial services		All other		Elimination			Consolidated
Sales revenues
Revenues from external customers		7,479,834		544,615		125,584		—			8,150,032
Inter-segment revenues and transfers		11,548		9,931		140,534		(162,013	)		—

Total		7,491,382		554,546		266,118		(162,013	)		8,150,032
Operating expenses		6,678,695		402,245		241,789		(160,637	)		7,162,092

Operating income		812,687		152,301		24,328		(1,376	)		987,941

Accounting policies applied by each segment is in conformity with those of Toyota’s condensed quarterly consolidated financial statements. Transfers between industry segments are made in accordance with terms and conditions in the ordinary course of business.

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

3. Geographic information

For the first nine months ended December 31, 2019:


	Yen in millions
	Japan		North America		Europe		Asia		Other		Elimination			Consolidated
Sales revenues
Revenues from external customers		7,161,401		8,064,578		2,399,538		3,779,372		1,562,318		—			22,967,208
Inter-segment revenues and transfers		5,303,922		166,223		163,981		381,513		68,785		(6,084,426	)		—

Total		12,465,324		8,230,802		2,563,520		4,160,885		1,631,103		(6,084,426	)		22,967,208
Operating expenses		11,235,500		7,906,809		2,444,002		3,859,559		1,561,232		(6,079,208	)		20,927,893

Operating income		1,229,824		323,993		119,518		301,327		69,872		(5,217	)		2,039,315


For the first nine months ended December 31, 2020:
	Yen in millions
	Japan		North America		Europe		Asia		Other		Elimination			Consolidated
Sales revenues
Revenues from external customers		6,169,283		6,780,176		2,072,093		3,260,598		1,243,105		—			19,525,255
Inter-segment revenues and transfers		4,578,830		104,017		115,528		338,585		63,242		(5,200,202	)		—

Total		10,748,113		6,884,194		2,187,621		3,599,183		1,306,347		(5,200,202	)		19,525,255
Operating expenses		9,967,230		6,552,457		2,125,004		3,307,569		1,262,960		(5,197,887	)		18,017,334

Operating income		780,883		331,736		62,617		291,614		43,387		(2,315	)		1,507,922

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

For the third quarter ended December 31, 2019:


	Yen in millions
	Japan		North America		Europe		Asia		Other		Elimination			Consolidated
Sales revenues
Revenues from external customers		2,328,521		2,649,156		814,894		1,278,648		537,711		—			7,608,931
Inter-segment revenues and transfers		1,715,178		59,449		51,972		121,362		17,858		(1,965,819	)		—

Total		4,043,699		2,708,605		866,866		1,400,011		555,569		(1,965,819	)		7,608,931
Operating expenses		3,640,653		2,613,653		821,135		1,318,215		531,611		(1,956,433	)		6,968,834

Operating income		403,046		94,952		45,730		81,795		23,958		(9,386	)		640,097


For the third quarter ended December 31, 2020:
	Yen in millions
	Japan		North America		Europe		Asia		Other		Elimination			Consolidated
Sales revenues
Revenues from external customers		2,429,659		2,897,118		861,504		1,392,879		568,873		—			8,150,032
Inter-segment revenues and transfers		1,955,019		41,129		44,067		150,553		37,127		(2,227,896	)		—

Total		4,384,678		2,938,247		905,571		1,543,432		606,000		(2,227,896	)		8,150,032
Operating expenses		3,846,137		2,725,261		852,592		1,388,071		571,094		(2,221,064	)		7,162,092

Operating income		538,541		212,986		52,979		155,361		34,906		(6,832	)		987,941

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

The above amounts are aggregated by region based on the location of the country where TMC or consolidated subsidiaries are located. Transfers between geographic areas are made in accordance with terms and conditions in the ordinary course of business.

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

4. Sales revenues by location of external customers

In addition to the disclosure requirements under IFRS, Toyota discloses this information in order to provide financial statements users with valuable information.


	Yen in millions
	For the first nine months ended December 31,
	2019		2020
Japan		5,447,893		4,890,051
North America		8,150,469		6,854,311
Europe		2,223,514		1,938,744
Asia		4,133,206		3,683,729
Other		3,012,125		2,158,420

Total		22,967,208		19,525,255


	Yen in millions
	For the third quarter ended December 31,
	2019		2020
Japan		1,737,401		1,888,332
North America		2,660,306		2,932,527
Europe		747,197		796,702
Asia		1,403,698		1,548,750
Other		1,060,328		983,722

Total		7,608,931		8,150,032

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

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

VII.

Fair value measurements

1. Definition of fair value hierarchy

In accordance with IFRS, Toyota classifies fair value measurement into the following three levels based on the observability and significance of the inputs used.


Level 1:		Quoted prices in active markets for identical assets or liabilities

Level 2:		Fair value measurement based on inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly or indirectly

Level 3:		Fair value measurement based on models using unobservable inputs for the assets or liabilities

2. Method of fair value measurement

The fair value of assets and liabilities is determined using relevant market information and appropriate valuation methods.

The methods and assumptions for measuring the fair value of assets and liabilities are as follows;

(1) Cash and cash equivalents -

Cash equivalents include money market funds and other investments with original maturities of three months or less. 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 their short duration.

(2) Trade accounts and other receivables and Trade accounts and other payables -

These receivables and payables are carried at amounts which approximate fair value due to their short duration.

(3) Receivables related to financial services -

The fair values of receivables from financial services are estimated by discounting expected cash flows to present value using internal assumptions, including prepayment speeds, expected credit losses and collateral value.

As unobservable inputs are utilized, the fair value of receivables from financial services are classified as Level 3.

(4) Other financial assets -

(Public and corporate bonds)

Public and corporate bonds include government bonds. Japanese bonds and foreign bonds, including U.S., European and other bonds, represent 17% and 83% (as of April 1, 2019), 20% and 80% (as of March 31, 2020) and 25% and 75% (as of December 31, 2020) of public and corporate bonds, respectively. Toyota uses primarily quoted market prices for identical assets to measure the fair value of these securities.

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

(Stocks)

Listed stocks on the Japanese stock markets represent 92% (as of April 1, 2019), 90% (as of March 31, 2020) and 88% (as of December 31, 2020) of stocks that Toyota holds. Toyota uses primarily quoted market prices for identical assets to measure fair value of these securities. Therefore, stocks with an active market are classified as Level 1.

Fair value of stocks with no active market is measured by using the comparable company valuation method, discounted cash flow valuation method (“DCF”) or other appropriate methods. Therefore, stocks with no active market are thus classified as Level 3.

Price book-value ratios (“PBR”) of comparable companies and discount ratios of DCF are the significant unobservable inputs relating to the fair value measurement of stocks classified as Level 3. The fair value increases (decreases) as PBR of a comparable company rises (declines) or the discount rate declines (rises). The estimated increase or decrease in fair value of stocks if the unobservable inputs were to be replaced by other reasonable alternative assumptions are not significant.

The shares classified as Level 3 are measured by the responsible department using quarterly available information in accordance with Toyota’s consolidated financial accounting policies and reported to the supervisors along with the basis of the change in fair value.

(5) 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. 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 as 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 as Level 3. Toyota’s derivative fair value measurements consider assumptions about counterparty and Toyota’s own non-performance risk, using such as credit default probabilities.

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

(6) Short-term and long-term debt -

The fair values of short-term 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, the fair value of these debts are classified as Level 2.

The fair values of the secured loans entered into in connection with 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 fair value of these secured loans are classified as Level 3.

3. Financial instrument measured at fair value on recurring basis

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


	Yen in millions
	April 1, 2019
	Level 1		Level 2			Level 3		Total
Other financial assets:
Financial assets measured at fair value through profit or loss
Public and corporate bonds		19,209		25,047			15,171		59,426
Derivative financial instruments		—		200,256			77		200,333
Other		182,470		103,989			—		286,459

Total		201,678		329,292			15,247		546,218

Financial assets measured at fair value through other comprehensive income
Public and corporate bonds		4,359,335		1,427,428			19,739		5,806,502
Stocks		2,155,236		—			288,380		2,443,615
Other		6,920		469			—		7,388

Total		6,521,490		1,427,897			308,119		8,257,506

Other financial liabilities:
Financial liabilities measured at fair value through profit or loss
Derivative financial instruments		—		(231,915	)		—		(231,915	)

Total		—		(231,915	)		—		(231,915	)

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements


	Yen in millions
	March 31, 2020
	Level 1		Level 2			Level 3		Total
Other financial assets:
Financial assets measured at fair value through profit or loss
Public and corporate bonds		17,676		28,203			12,831		58,711
Derivative financial instruments		—		503,826			—		503,826
Other		188,122		98,060			—		286,182

Total		205,798		630,090			12,831		848,719

Financial assets measured at fair value through other comprehensive income
Public and corporate bonds		3,197,097		2,155,491			20,099		5,372,687
Stocks		1,895,189		—			370,452		2,265,641
Other		5,964		27,104			—		33,067

Total		5,098,250		2,182,595			390,551		7,671,396

Other financial liabilities:
Financial liabilities measured at fair value through profit or loss
Derivative financial instruments		—		(437,369	)		—		(437,369	)

Total		—		(437,369	)		—		(437,369	)


	Yen in millions
	December 31, 2020
	Level 1		Level 2			Level 3		Total
Other financial assets:
Financial assets measured at fair value through profit or loss
Public and corporate bonds		23,453		23,441			10,616		57,510
Derivative financial instruments		—		335,707			—		335,707
Other		315,142		119,718			—		434,859

Total		338,594		478,866			10,616		828,077

Financial assets measured at fair value through other comprehensive income
Public and corporate bonds		2,754,966		2,627,658			19,133		5,401,757
Stocks		2,362,254		—			364,194		2,726,448
Other		8,563		69,987			—		78,550

Total		5,125,782		2,697,646			383,328		8,206,756

Other financial liabilities:
Financial liabilities measured at fair value through profit or loss
Derivative financial instruments		—		(379,888	)		—		(379,888	)

Total		—		(379,888	)		—		(379,888	)

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

4. Changes in financial instruments classified as level 3 and measured at fair value on recurring basis

The following table summarizes the changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the periods ended December 31, 2019 and 2020:


	Yen in millions
	For the first nine months ended December 31, 2019
	Public and corporate bonds			Stocks			Derivative financial instruments			Total
Balance at beginning of year		34,910			288,380			77			323,366
Total gains (losses)
Net income (loss)		(4	)		—			—			(4	)
Other comprehensive income (loss)		111			16,172			—			16,282
Purchases and issuances		7,421			107,632			—			115,053
Sales and settlements		(5,996	)		(10,598	)		(77	)		(16,670	)
Transfer from Level 3		—			(61,008	)		—			(61,008	)
Others		(565	)		21,219			—			20,655

Balance at end of period		35,877			361,798			—			397,674


	Yen in millions
	For the first nine months ended December 31, 2020
	Public and corporate bonds			Stocks			Derivative financial instruments			Total
Balance at beginning of year		32,931			370,452			—			403,383
Total gains (losses)
Net income (loss)		100			—			—			100
Other comprehensive income (loss)		889			(11,961	)		—			(11,071	)
Purchases and issuances		312			5,831			—			6,143
Sales and settlements		(3,928	)		(202	)		—			(4,130	)
Others		(555	)		74			—			(481	)

Balance at end of period		29,750			364,194			—			393,944

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements


	Yen in millions
	For the third quarter ended December 31, 2019
	Public and corporate bonds			Stocks			Derivative financial instruments		Total
Balance at beginning of year		39,556			299,191			—		338,747
Total gains (losses)
Net income (loss)		(3	)		—			—		(3	)
Other comprehensive income (loss)		(87	)		4,765			—		4,677
Purchases and issuances		225			45,285			—		45,510
Sales and settlements		(5,121	)		(796	)		—		(5,916	)
Others		1,306			13,353			—		14,660

Balance at end of period		35,877			361,798			—		397,674


	Yen in millions
	For the third quarter ended December 31, 2020
	Public and corporate bonds			Stocks			Derivative financial instruments		Total
Balance at beginning of year		30,705			366,455			—		397,160
Total gains (losses)
Net income (loss)		33			—			—		33
Other comprehensive income (loss)		110			(7,363	)		—		(7,253	)
Purchases and issuances		—			2,518			—		2,518
Sales and settlements		(392	)		(43	)		—		(435	)
Others		(706	)		2,627			—		1,921

Balance at end of period		29,750			364,194			—		393,944

“Net income (loss)” in public and corporate bonds, stocks and derivative financial instruments, other than transactions related to financial services, are each included in “Other finance income” and “Other financial costs” in the accompanying condensed quarterly consolidated statement of income. Transactions related to financial services are included in each of “Financial services” and “Cost of financial services” in the condensed quarterly consolidated statement of income.

In the reconciliation table above, derivative financial instruments are presented as net of assets and liabilities. “Other” includes currency translation adjustments for the first nine months and the third quarter ended December 31, 2019 and 2020.

Transfer from Level 3 recognized in the first nine months ended December 31, 2019 is due to the listing of investees.

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

5. Financial assets and liabilities measured at amortized cost

The following table summarizes the carrying amount and the fair value of financial assets and liabilities measured on an amortized cost basis:


	Yen in millions
	April 1, 2019
	Carrying amount		Fair value
	Carrying amount		Level 1		Level 2		Level 3		Total
Receivables related to financial services		16,938,395		—		—		17,167,354		17,167,354
Interest-bearing liabilities
Long-term debt (Including current portion)		14,785,662		—		12,805,942		1,833,623		14,639,565

	Yen in millions
	March 31, 2020
	Carrying amount		Fair value
	Carrying amount		Level 1		Level 2		Level 3		Total
Receivables related to financial services		17,039,401		—		—		17,235,037		17,235,037
Interest-bearing liabilities
Long-term debt (Including current portion)		15,237,740		—		13,128,224		1,966,646		15,094,870

	Yen in millions
	December 31, 2020
	Carrying amount		Fair value
	Carrying amount		Level 1		Level 2		Level 3		Total
Receivables related to financial services		18,028,034		—		—		18,796,477		18,796,477
Interest-bearing liabilities
Long-term debt (Including current portion)		18,713,516		—		15,908,762		2,536,324		18,445,085

Of financial assets and liabilities that are measured on an amortized cost basis, those with carrying values that approximate fair value are excluded from the table above.

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

VIII.

Dividends

The paid dividend amounts are as follows:

For the first nine months ended December 31, 2019

Resolution

Type of shares

Total amount of
dividends
(yen in millions)

Dividend per share
(yen)

Record date

Effective date

The Board of
Directors Meeting
on May 8, 2019

Common shares

339,893

120.00

March 31, 2019

May 24, 2019

The Board of
Directors Meeting
on November 7, 2019

Common shares

278,908

100.00

September 30, 2019

November 27, 2019

For the first nine months ended December 31, 2020

Resolution

Type of shares

Total amount of
dividends
(yen in millions)

Dividend per share
(yen)

Record date

Effective date

The Board of
Directors Meeting
on May 12, 2020

Common shares

331,938

120.00

March 31, 2020

May 28, 2020

The Board of
Directors Meeting
on November 6, 2020

Common shares

293,576

105.00

September 30, 2020

November 27, 2020

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

IX.

Sales revenues

The table below shows Toyota’s sales revenues from external customers by business and by product category.


	Yen in millions
	For the first nine months ended December 31,
	2019		2020
Sales of products
Automotive
Vehicles		17,383,363		14,580,535
Parts and components for production		1,007,935		947,081
Parts and components for after service		1,607,802		1,494,645
Other		563,003		566,080

Total automotive		20,562,103		17,588,339
All other		776,067		334,233

Total sales of products		21,338,170		17,922,573
Financial services		1,629,038		1,602,683

Total sales revenues		22,967,208		19,525,255


	Yen in millions
	For the third quarter ended December 31,
	2019		2020
Sales of products
Automotive
Vehicles		5,715,529		6,339,359
Parts and components for production		352,151		355,588
Parts and components for after service		546,674		564,709
Other		202,685		220,178

Total automotive		6,817,039		7,479,834
All other		243,975		125,584

Total sales of products		7,061,014		7,605,418
Financial services		547,917		544,615

Total sales revenues		7,608,931		8,150,032

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

X.	Earnings per share

Reconciliation of the difference between basic and diluted earnings per share attributable to Toyota Motor Corporation are as follows:


	Yen in millions		Thousands of shares		Yen
	Net income attributable to Toyota Motor Corporation		Weighted- average common shares		Earnings per share attributable to Toyota Motor Corporation
For the first nine months ended December 31, 2019
Net income attributable to Toyota Motor Corporation		1,708,838

Basic earnings per share attributable to Toyota Motor Corporation		1,708,838		2,807,227		608.73
Effect of dilutive securities
Model AA Class Shares		9,965		47,100

Diluted earnings per share attributable to Toyota Motor Corporation		1,718,803		2,854,327		602.17

For the first nine months ended December 31, 2020
Net income attributable to Toyota Motor Corporation		1,468,064

Basic earnings per share attributable to Toyota Motor Corporation		1,468,064		2,795,071		525.23
Effect of dilutive securities
Model AA Class Shares		9,618		46,418

Diluted earnings per share attributable to Toyota Motor Corporation		1,477,682		2,841,489		520.04


	Yen in millions		Thousands of shares		Yen
	Net income attributable to Toyota Motor Corporation		Weighted- average common shares		Earnings per share attributable to Toyota Motor Corporation
For the third quarter ended December 31, 2019
Net income attributable to Toyota Motor Corporation		559,298

Basic earnings per share attributable to Toyota Motor Corporation		559,298		2,785,447		200.79
Effect of dilutive securities
Model AA Class Shares		3,335		47,100

Diluted earnings per share attributable to Toyota Motor Corporation		562,633		2,832,547		198.63

For the third quarter ended December 31, 2020
Net income attributable to Toyota Motor Corporation		838,696

Basic earnings per share attributable to Toyota Motor Corporation		838,696		2,795,958		299.97
Effect of dilutive securities
Model AA Class Shares		2,976		45,084

Diluted earnings per share attributable to Toyota Motor Corporation		841,672		2,841,042		296.25

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

XI.

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 December 31, 2020 is ¥3,591,603 million. Liabilities for guarantees totaling ¥12,818 million have been provided as of December 31, 2020. 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 -

Toyota and other automakers have been named in certain class actions filed in Mexico, Canada, Australia, Israel and Brazil, as well as some other actions by states or territories of the United States relating to Takata airbag issues. The remaining actions in Mexico, Australia, Israel, and Brazil are being litigated. The actions by states or territories of the United States are being litigated, in the process of resolution, or have been resolved.

As previously disclosed, Toyota self-reported a process gap in fulfilling certain emissions defect information reporting requirements of the U.S. Environmental Protection Agency (“EPA”). After cooperating with civil investigations by the EPA and the Civil Division of the Southern District of New York (“SDNY”) on this reporting issue, on January 14, 2021, Toyota entered into a consent decree with the EPA, the Department of Justice and the SDNY to resolve these investigations. Under the consent decree, Toyota has agreed to payment of a $180 million civil penalty and the imposition of injunctive relief. The consent decree is subject to court approval.

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

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

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

XII.

Supplemental cash flow information

“Other, net” in cash flows from investing activities includes a net increase in time deposits of ¥1,930,951 million for the first nine months ended December 31, 2020.

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

XIII. First-time adoption

1. Transition to reporting in accordance with IFRS

TMC has prepared its condensed consolidated financial statements in accordance with IFRS from the first quarter ended June 30, 2020.

Up to the fiscal year ended March 31, 2020, Toyota prepared its consolidated financial statements in accordance with U.S. GAAP. The Transition Date was April 1, 2019.

IFRS 1 stipulates that, in principle, the retrospective application of IFRS is required. However, it provides some voluntary and mandatory exemptions from full retrospective applications. TMC elected such exemptions with respect to the following items.

(1) Business combination

IFRS 3 “Business Combinations”, was not applied retrospectively to business combinations that occurred before the Transition Date.

(2) Foreign currency translation adjustments of foreign operations

The cumulative foreign currency translation adjustments were reclassified from other comprehensive income to retained earnings as of the Transition Date.

(3) Designation of equity financial assets

Equity financial assets recognized before the Transition Date were designated as financial assets measured at fair value through other comprehensive income based on the facts and circumstances that existed as of the Transition Date.

(4) Deemed cost

IFRS 1 permits a first-time adopter to elect to use fair value at the Transition Date as deemed cost for items of property, plant and equipment. For some property, plant and equipment, the fair value at the Transition Date is used as deemed cost.

(5) Recognition of right of use assets and lease liabilities

When a first-time adopter that is a lessee recognizes right of use assets and lease liabilities, it is permitted to measure right of use assets and lease liabilities at the Transition Date under IFRS 1. Toyota measured all lease liabilities at the Transition Date, using the present value of the remaining lease payments discounted by the lessee’s incremental borrowing rate at the Transition Date. Toyota measured right of use assets at the Transition Date, making them equal to the lease liabilities.

For leases for which the lease term ends within 12 months of the Transition Date, lease payments associated with those leases were recognized as profit or loss on a straight-line basis over the lease term.

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

2. Reconciliation of U.S. GAAP to IFRS

Toyota has made the necessary adjustments to the previously disclosed U.S. GAAP consolidated financial statements or quarterly consolidated financial statements in transition to IFRS.

Items that do not affect retained earnings and comprehensive income are included in “Reclassification,” and items that affect retained earnings and comprehensive income are included in “Adjustment of recognition and measurement” of the reconciliation tables.

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

(1) Reconciliation of equity as of the transition date (April 1, 2019)


	Yen in millions
Presentation under U.S. GAAP	U.S. GAAP			Reclassification			Adjustment of recognition and measurement			IFRS			Notes		Presentation under IFRS
Assets															Assets
Current assets															Current assets
Cash and cash equivalents		3,574,704			—			28,101			3,602,805				Cash and cash equivalents
Trade accounts and notes receivable, less allowance for doubtful accounts		2,372,734			568,156			13,728			2,954,617			A	Trade accounts and other receivables
Other receivables		568,156			(568,156	)		—			—			A
Finance receivables, net		6,647,771			—			9,596			6,657,367				Receivables related to financial services
Time deposits		1,126,352			1,508,812			5,228			2,640,392			B,C,D	Other financial assets
Marketable securities		1,127,160			(1,127,160	)		—			—			B
Inventories		2,656,396			—			74,644			2,731,040			a	Inventories
		—			84,281			293			84,574			E	Income tax receivable
Prepaid expenses and other current assets		805,964			(297,502	)		(807	)		507,654			C,D,E	Other current assets

Total current assets		18,879,237			168,431			130,781			19,178,450				Total current assets

															Non-current assets
Investments in affiliated companies		3,313,723			54,004			99,516			3,467,242				Investments accounted for using the equity method
Noncurrent finance receivables, net		10,281,118			—			(90	)		10,281,028				Receivables related to financial services
Marketable securities and other securities investments		7,479,926			238,009			51,806			7,769,740			D,F,G,b	Other financial assets
Employees receivables		21,683			(21,683	)		—			—			F
Property, plant and equipment															Property, plant and equipment
Land		1,386,308			1,353			(28,391	)		1,359,271			c	Land
Buildings		4,802,175			(14,489	)		45,593			4,833,278				Buildings
Machinery and equipment		11,857,425			(6,097	)		105,445			11,956,773				Machinery and equipment
Vehicles and equipment on operating leases		6,139,163			—			—			6,139,163				Vehicles and equipment on operating leases
Construction in progress		651,713			61			4,293			656,067				Construction in progress

Total property, plant and equipment, at cost		24,836,784			(19,172	)		126,939			24,944,551				Total property, plant and equipment, at cost

Less – Accumulated depreciation		(14,151,290	)		(8,140	)		(101,016	)		(14,260,446	)			Less – Accumulated depreciation and impairment losses

Total property, plant and equipment, net		10,685,494			(27,313	)		25,923			10,684,105				Total property, plant and equipment, net

		—			27,313			369,517			396,830			d	Right of use assets
		—			297,394			611,343			908,737			G,e	Intangible assets
		—			501,872			(55,489	)		446,383			G,f	Deferred tax assets
Other		1,275,768			(991,888	)		9			283,889			G	Other non-current assets

		33,057,712			77,709			1,102,535			34,237,955				Total non-current assets

Total assets		51,936,949			246,140			1,233,316			53,416,405				Total assets

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements


	Yen in millions
Presentation under U.S. GAAP	U.S. GAAP			Reclassification			Adjustment of recognition and measurement			IFRS			Notes	Presentation under IFRS
Liabilities														Liabilities
Current liabilities														Current liabilities
Accounts payable		2,645,984			1,180,657			29,492			3,856,133		H	Trade accounts and other payables
Other payables		1,102,802			(1,102,802	)		—			—		H
Short-term borrowings		5,344,973			4,254,260			102,580			9,701,813		I,d	Short-term and current portion of long-term debt
Current portion of long-term debt		4,254,260			(4,254,260	)		—			—		I
Accrued expenses		3,222,446			(1,870,433	)		(1,761	)		1,350,252		J	Accrued expenses
		—			475,409			(107	)		475,302		D,K	Other financial liabilities
Income taxes payable		320,998			—			318			321,316			Income taxes payable
		—			1,769,275			239			1,769,514		J	Liabilities for quality assurance
Other current liabilities		1,335,475			(339,131	)		11,688			1,008,032		D,K	Other current liabilities

Total current liabilities		18,226,938			112,975			142,449			18,482,362			Total current liabilities

Long-term liabilities														Non-current liabilities
Long-term debt		10,550,945			498,073			293,298			11,342,315		L,d	Long-term debt
		—			189,957			—			189,957		D	Other financial liabilities
Accrued pension and severance costs		963,406			37,532			1,771			1,002,710			Retirement benefit liabilities
Deferred income taxes		1,014,851			11,670			200,771			1,227,292		f	Deferred tax liabilities
Other long-term liabilities		615,599			(105,994	)		6,955			516,560			Other non-current liabilities

Total long-term liabilities		13,144,801			631,238			502,794			14,278,833			Total non-current liabilities

Total liabilities		31,371,739			744,213			645,244			32,761,195			Total liabilities

Mezzanine equity		498,073			(498,073	)		—			—		L
Shareholders’ equity														Shareholders’ equity
Toyota Motor Corporation shareholders’ equity
Common stock, no par value		397,050			—			—			397,050			Common stock
Additional paid-in capital		487,162			—			—			487,162			Additional paid-in capital
Retained earnings		21,987,515			—			(1,373,738	)		20,613,776		j	Retained earnings
Accumulated other comprehensive income (loss)		(916,650	)		—			1,932,686			1,016,035		b,g,h	Other components of equity
Treasury stock, at cost		(2,606,925	)		—			—			(2,606,925	)		Treasury stock

Total Toyota Motor Corporation shareholders’ equity		19,348,152			—			558,947			19,907,100			Total Toyota Motor Corporation shareholders’ equity

Noncontrolling interests		718,985			—			29,125			748,110			Non-controlling interests

Total shareholders’ equity		20,067,137			—			588,072			20,655,210			Total shareholders’ equity

Total mezzanine equity and shareholders’ equity		20,565,210			(498,073	)		588,072			20,655,210

Commitments and contingencies

Total liabilities, mezzanine equity and shareholders’ equity		51,936,949			246,140			1,233,316			53,416,405			Total liabilities and shareholders’ equity

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

(2) Reconciliation of equity as of the end of the third quarter (December 31, 2019)


	Yen in millions
Presentation under U.S. GAAP	U.S. GAAP			Reclassification			Adjustment of recognition and measurement			IFRS			Notes	Presentation under IFRS
Assets														Assets
Current assets														Current assets
Cash and cash equivalents		3,759,240			—			39,485			3,798,726			Cash and cash equivalents
Trade accounts and notes receivable, less allowance for doubtful accounts		2,108,870			592,197			14,865			2,715,932		A	Trade accounts and other receivables
Other receivables		592,197			(592,197	)		—			—		A
Finance receivables, net		6,773,867			—			9,351			6,783,218			Receivables related to financial services
Time deposits		1,488,530			1,097,037			7,325			2,592,893		B,C,D	Other financial assets
Marketable securities		795,154			(795,154	)		—			—		B
Inventories		2,433,401			—			20,676			2,454,077		a	Inventories
		—			167,305			365			167,670		E	Income tax receivable
Prepaid expenses and other current assets		1,299,082			(43,120	)		9,285			1,265,247		C,D,E,N	Other current assets

Total current assets		19,250,341			426,069			101,352			19,777,762			Total current assets

														Non-current assets
Investments in affiliated companies		3,495,795			69,290			88,017			3,653,102			Investments accounted for using the equity method
Noncurrent finance receivables, net		10,896,215			—			(3,028	)		10,893,186			Receivables related to financial services
Marketable securities and other securities investments		7,651,412			229,302			47,304			7,928,018		D,F,G,b	Other financial assets
Employees receivables		23,497			(23,497	)		—			—		F
Property, plant and equipment														Property, plant and equipment
Land		1,317,567			242			(27,853	)		1,289,956		c	Land
Buildings		4,752,932			(5,600	)		40,396			4,787,728			Buildings
Machinery and equipment		12,127,185			(36,405	)		112,666			12,203,446			Machinery and equipment
Vehicles and equipment on operating leases		6,043,761			—			(1,324	)		6,042,437			Vehicles and equipment on operating leases
Construction in progress		523,349			60			13,394			536,803			Construction in progress

Total property, plant and equipment, at cost		24,764,794			(41,702	)		137,280			24,860,372			Total property, plant and equipment, at cost

Less – Accumulated depreciation		(14,058,592	)		859			(115,382	)		(14,173,115	)		Less – Accumulated depreciation and impairment losses

Total property, plant and equipment, net		10,706,202			(40,843	)		21,898			10,687,257			Total property, plant and equipment, net

		—			273,920			(764	)		273,155		G	Right of use assets
		—			332,974			617,913			950,887		G,e	Intangible assets
		—			455,502			(27,811	)		427,691		G,f	Deferred tax assets
Other		1,777,672			(1,470,124	)		2,863			310,411		G,N	Other non-current assets

		34,550,793			(173,476	)		746,392			35,123,708			Total non-current assets

Total assets		53,801,134			252,593			847,744			54,901,470			Total assets

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements


	Yen in millions
Presentation under U.S. GAAP	U.S. GAAP			Reclassification			Adjustment of recognition and measurement			IFRS			Notes		Presentation under IFRS
Liabilities															Liabilities
Current liabilities															Current liabilities
Accounts payable		2,301,240			1,093,618			43,884			3,438,743			H	Trade accounts and other payables
Other payables		1,044,419			(1,044,419	)		—			—			H
Short-term borrowings		5,484,398			4,522,766			(37,399	)		9,969,765			I	Short-term and current portion of long-term debt
Current portion of long-term debt		4,485,926			(4,485,926	)		—			—			I
Accrued expenses		2,927,810			(1,728,374	)		16,751			1,216,187			J	Accrued expenses
		—			571,515			(6,616	)		564,899			D,K	Other financial liabilities
Income taxes payable		212,278			—			544			212,822				Income taxes payable
		—			1,600,254			850			1,601,105			J	Liabilities for quality assurance
Other current liabilities		1,675,911			(204,469	)		1,677			1,473,118			D,K,N	Other current liabilities

Total current liabilities		18,131,982			324,967			19,691			18,476,639				Total current liabilities

Long-term liabilities															Non-current liabilities
Long-term debt		10,934,987			695,998			3,324			11,634,308			L,M	Long-term debt
		—			239,472			121			239,592			D	Other financial liabilities
Accrued pension and severance costs		971,702			37,806			19,680			1,029,188				Retirement benefit liabilities
Deferred income taxes		1,195,432			12,093			237,825			1,445,351			f	Deferred tax liabilities
Other long-term liabilities		1,035,377			(557,895	)		14,389			491,872			M,N	Other non-current liabilities

Total long-term liabilities		14,137,498			427,474			275,338			14,840,311				Total non-current liabilities

Total liabilities		32,269,480			752,441			295,029			33,316,950				Total liabilities

Mezzanine equity		499,848			(499,848	)		—			—			L
Shareholders’ equity															Shareholders’ equity
Toyota Motor Corporation shareholders’ equity
Common stock, no par value		397,050			—			—			397,050				Common stock
Additional paid-in capital		487,392			—			—			487,392				Additional paid-in capital
Retained earnings		23,368,761			—			(1,663,256	)		21,705,505			j	Retained earnings
Accumulated other comprehensive income (loss)		(970,426	)		—			2,186,266			1,215,840			b,g,h	Other components of equity
Treasury stock, at cost		(2,977,254	)		—			—			(2,977,254	)			Treasury stock
Total Toyota Motor Corporation shareholders’ equity		20,305,523			—			523,010			20,828,533				Total Toyota Motor Corporation shareholders’ equity

Noncontrolling interests		726,283			—			29,704			755,987				Non-controlling interests
Total shareholders’ equity		21,031,806			—			552,714			21,584,520				Total shareholders’ equity
Total mezzanine equity and shareholders’ equity		21,531,654			(499,848	)		552,714			21,584,520

Commitments and contingencies

Total liabilities, mezzanine equity and shareholders’ equity		53,801,134			252,593			847,744			54,901,470				Total liabilities and shareholders’ equity

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

(3) Reconciliation of equity as of the end of the prior period (March 31, 2020)


	Yen in millions
Presentation under U.S. GAAP	U.S. GAAP			Reclassification			Adjustment of recognition and measurement			IFRS			Notes		Presentation under IFRS
Assets															Assets
Current assets															Current assets
Cash and cash equivalents		4,190,518			—			(92,068	)		4,098,450				Cash and cash equivalents
Trade accounts and notes receivables, less allowance for doubtful accounts		2,094,894			564,854			(11,389	)		2,648,360			A	Trade accounts and other receivables
Other receivables		564,854			(564,854	)		—			—			A
Finance receivables, net		6,614,171			—			7,433			6,621,604				Receivables related to financial services
Time deposits		828,220			1,316,339			(958	)		2,143,602			B,C,D	Other financial assets
Marketable securities		678,731			(678,731	)		—			—			B
Inventories		2,434,918			—			98,974			2,533,892			a	Inventories
		—			237,333			275			237,609			E	Income tax receivable
Prepaid expenses and other current assets		1,236,225			(578,614	)		22,193			679,804			C,D,E	Other current assets

Total current assets		18,642,531			296,327			24,462			18,963,320				Total current assets

															Non-current assets
Investments in affiliated companies		4,123,453			81,731			92,380			4,297,564				Investments accounted for using the equity method
Noncurrent finance receivables, net		10,423,858			49			(6,109	)		10,417,797				Receivables related to financial services
Marketable securities and other securities investments		7,348,651			502,296			50,570			7,901,517			D,F,G,b	Other financial assets
Employees receivables		21,484			(21,484	)		—			—			F
Property, plant and equipment															Property, plant and equipment
Land		1,346,988			165			(28,189	)		1,318,964			c	Land
Buildings		4,730,783			(19,860	)		30,528			4,741,451				Buildings
Machinery and equipment		11,939,121			(43,092	)		83,419			11,979,449				Machinery and equipment
Vehicles and equipment on operating leases		5,929,233			—			(400	)		5,928,833				Vehicles and equipment on operating leases
Construction in progress		510,963			60			6,438			517,460				Construction in progress

Total property, plant and equipment, at cost		24,457,088			(62,728	)		91,797			24,486,156				Total property, plant and equipment, at cost

Less – Accumulated depreciation		(13,855,563	)		2,355			(98,933	)		(13,952,141	)			Less – Accumulated depreciation and impairment losses

Total property, plant and equipment, net		10,601,525			(60,373	)		(7,136	)		10,534,016				Total property, plant and equipment, net

		—			337,442			(107	)		337,335			G	Right of use assets
		—			374,263			625,994			1,000,257			G,e	Intangible assets
		—			354,785			(28,420	)		326,364			G,f	Deferred tax assets
Other		1,518,934			(1,331,576	)		6,834			194,192			G	Other non-current assets

		34,037,905			237,133			734,005			35,009,043				Total non-current assets

Total assets		52,680,436			533,460			758,468			53,972,363				Total assets

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements


	Yen in millions
Presentation under U.S. GAAP	U.S. GAAP			Reclassification			Adjustment of recognition and measurement			IFRS			Notes		Presentation under IFRS
Liabilities															Liabilities
Current liabilities															Current liabilities
Accounts payable		2,434,180			1,064,224			(375	)		3,498,029			H	Trade accounts and other payables
Other payables		1,020,270			(1,020,270	)		—			—			H
Short-term borrowings		5,286,026			4,611,537			9,192			9,906,755			I	Short-term and current portion of long-term debt
Current portion of long-term debt		4,574,045			(4,574,045	)		—			—			I
Accrued expenses		2,926,052			(1,689,158	)		19,901			1,256,794			J	Accrued expenses
		—			546,378			(7,637	)		538,740			D,K	Other financial liabilities
Income taxes payable		218,117			—			(5,841	)		212,276				Income taxes payable
		—			1,553,816			(846	)		1,552,970			J	Liabilities for quality assurance
Other current liabilities		1,443,687			(252,101	)		(14,942	)		1,176,645			D,K	Other current liabilities

Total current liabilities		17,902,377			240,382			(549	)		18,142,209				Total current liabilities

Long-term liabilities															Non-current liabilities
Long-term debt		10,692,898			739,633			1,688			11,434,219			L,M	Long-term debt
		—			360,588			—			360,588			D	Other financial liabilities
Accrued pension and severance costs		978,626			41,356			2,179			1,022,161				Retirement benefit liabilities
Deferred income taxes		1,043,169			1,487			153,349			1,198,005			f	Deferred tax liabilities
Other long-term liabilities		821,515			(345,816	)		471			476,169			M	Other non-current liabilities

Total long-term liabilities		13,536,208			797,247			157,687			14,491,142				Total non-current liabilities

Total liabilities		31,438,585			1,037,629			157,138			32,633,351				Total liabilities

Mezzanine equity		504,169			(504,169	)		—			—			L
Shareholders’ equity															Shareholders’ equity
Toyota Motor Corporation shareholders’ equity
Common stock, no par value		397,050			—			—			397,050				Common stock
Additional paid-in capital		489,334			—			—			489,334				Additional paid-in capital
Retained earnings		23,427,613			—			(1,193,552	)		22,234,061			j	Retained earnings
Accumulated other comprehensive income (loss)		(1,166,273	)		—			1,751,822			585,549			b,g,h	Other components of equity
Treasury stock, at cost		(3,087,106	)		—			—			(3,087,106	)			Treasury stock

Total Toyota Motor Corporation shareholders’ equity		20,060,618			—			558,270			20,618,888				Total Toyota Motor Corporation Shareholders’ equity

Noncontrolling interests		677,064			—			43,060			720,124				Non-controlling interests

Total shareholders’ equity		20,737,682			—			601,330			21,339,012				Total shareholders’ equity

Total mezzanine equity and shareholders’ equity		21,241,851			(504,169	)		601,330			21,339,012

Commitments and contingencies

Total liabilities, mezzanine equity and shareholders’ equity		52,680,436			533,460			758,468			53,972,363				Total liabilities and shareholders’ equity

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

(4) Reconciliation of net profit or loss for the first nine months ended December 31 (from April 1, 2019 to December 31, 2019)


	Yen in millions
Presentation under U.S. GAAP	U.S. GAAP			Reclassification			Adjustment of recognition and measurement			IFRS			Notes		Presentation under IFRS
Net revenues															Sales revenues
Sales of products		21,202,842			—			135,328			21,338,170			i	Sales of products
Financing operations		1,627,322			—			1,717			1,629,038				Financial services

Total net revenues		22,830,164			—			137,044			22,967,208				Total sales revenues

Costs and expenses															Costs and expenses
Cost of products sold		17,628,319			(9,132	)		148,186			17,767,373			i	Cost of products sold
Cost of financing operations		1,014,831			—			(890	)		1,013,940				Cost of financial services
Selling, general and administrative		2,128,231			(3,125	)		21,473			2,146,579				Selling, general and administrative

Total costs and expenses		20,771,381			(12,257	)		168,769			20,927,893				Total costs and expenses

Operating income		2,058,783			12,257			(31,724	)		2,039,315				Operating income

Other income (expense)
		—			303,422			(27,720	)		275,702				Share of profit (loss) of investments accounted for using the equity method
Interest and dividend income		192,831			20,387			(10,422	)		202,796				Other finance income
Interest expense		(18,315	)		(1,698	)		(14,387	)		(34,400	)			Other finance costs
Foreign exchange gain (loss), net		(42,295	)		—			(14,691	)		(56,986	)			Foreign exchange gain (loss), net
Unrealized gains (losses) on equity securities		360,457			—			(360,457	)		—			b
Other income (loss), net		(35,682	)		(30,946	)		33,962			(32,667	)			Other income (loss), net

Income before income taxes and equity in earnings of affiliated companies		2,515,779			303,422			(425,440	)		2,393,760				Income before income taxes

Provision for income taxes		740,549			—			(116,973	)		623,575			b	Income tax expense
Equity in earnings of affiliated companies		303,422			(303,422	)		—			—

Net income		2,078,652			—			(308,467	)		1,770,185				Net income

															Net income attributable to
Net income attributable to Toyota Motor Corporation		2,013,010			—			(304,172	)		1,708,838				Toyota Motor Corporation
Net income attributable to noncontrolling interests		65,642			—			(4,295	)		61,347				Non-controlling interests

		2,078,652			—			(308,467	)		1,770,185				Net income

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

(5) Reconciliation of other comprehensive income for the first nine months ended December 31 (from April 1, 2019 to December 31, 2019)


	Yen in millions
Presentation under U.S. GAAP	U.S. GAAP			Reclassification			Adjustment of recognition and measurement			IFRS			Notes	Presentation under IFRS
Net income		2,078,652			—			(308,467	)		1,770,185			Net income
Other comprehensive income (loss), net of tax														Other comprehensive income, net of tax
														Items that will not be reclassified to profit (loss)
Unrealized gains (losses) on securities		32,240			(32,240	)		291,348			291,348		b	Net changes in revaluation of financial assets measured at fair value through other comprehensive income
Pension liability adjustments		2,081			(647	)		(10,988	)		(9,554	)		Remeasurements of defined benefit plans
		—			647			50,867			51,514			Shares of other comprehensive income of equity method investees

		34,321			(32,240	)		331,227			333,308			Total of items that will not be reclassified to profit (loss)

														Items that may be reclassified subsequently to profit (loss)
Foreign currency translation adjustments		(87,969	)		108,484			(120,351	)		(99,836	)		Exchange differences on translating foreign operations
		—			32,240			(4,657	)		27,583			Net changes in revaluation of financial assets measured at fair value through other comprehensive income
		—			(108,484	)		53,826			(54,657	)		Shares of other comprehensive income of equity method investees

		(87,969	)		32,240			(71,182	)		(126,910	)		Total of items that may be reclassified subsequently to profit (loss)

Total other comprehensive income (loss)		(53,648	)		—			260,045			206,398			Total other comprehensive income, net of tax

Comprehensive income		2,025,004			—			(48,422	)		1,976,583			Comprehensive income

														Comprehensive income for the period attributable to
Comprehensive income attributable to Toyota Motor Corporation		1,959,234			—			(48,899	)		1,910,336			Toyota Motor Corporation
Comprehensive income attributable to noncontrolling interests		65,770			—			478			66,247			Non-controlling interests

		2,025,004			—			(48,422	)		1,976,583			Comprehensive income

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

(6) Reconciliation of net profit or loss for the third quarter ended December 31 (from October 1, 2019 to December 31, 2019)


	Yen in millions
Presentation under U.S. GAAP	U.S. GAAP			Reclassification			Adjustment of recognition and measurement			IFRS			Notes		Presentation under IFRS
Net revenues															Sales revenues
Sales of products		6,996,181			—			64,833			7,061,014			i	Sales of products
Financing operations		548,388			—			(470	)		547,917				Financial services

Total net revenues		7,544,569			—			64,362			7,608,931				Total sales revenues

Costs and expenses															Costs and expenses
Cost of products sold		5,787,954			(2,050	)		80,110			5,866,014			i	Cost of products sold
Cost of financing operations		360,705			—			38			360,742				Cost of financial services
Selling, general and administrative		741,463			(1,060	)		1,675			742,078				Selling, general and administrative

Total costs and expenses		6,890,122			(3,111	)		81,823			6,968,834				Total costs and expenses

Operating income		654,447			3,111			(17,460	)		640,097				Operating income

Other income (expense)
		—			97,470			(21,634	)		75,836				Share of profit (loss) of investments accounted for using the equity method
Interest and dividend income		66,610			5,734			(11,252	)		61,093				Other finance income
Interest expense		(3,469	)		(321	)		(8,061	)		(11,851	)			Other finance costs
Foreign exchange gain (loss), net		18,872			—			7,454			26,326				Foreign exchange gain (loss), net
Unrealized gains (losses) on equity securities		215,030			—			(215,030	)		—			b
Other income (loss), net		(19,196	)		(8,524	)		8,161			(19,559	)			Other income (loss), net

Income before income taxes and equity in earnings of affiliated companies		932,294			97,470			(257,823	)		771,941				Income before income taxes

Provision for income taxes		265,901			—			(80,152	)		185,748			b	Income tax expense
Equity in earnings of affiliated companies		97,470			(97,470	)		—			—

Net income		763,863			—			(177,671	)		586,193				Net income

															Net income attributable to
Net income attributable to Toyota Motor Corporation		738,034			—			(178,736	)		559,298				Toyota Motor Corporation
Net income attributable to noncontrolling interests		25,829			—			1,065			26,894				Non-controlling interests

		763,863			—			(177,671	)		586,193				Net income

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

(7) Reconciliation of other comprehensive income for the third quarter ended December 31 (from October 1, 2019 to December 31, 2019)


	Yen in millions
Presentation under U.S. GAAP	U.S. GAAP			Reclassification			Adjustment of recognition and measurement			IFRS			Notes	Presentation under IFRS
Net income		763,863			—			(177,671	)		586,193			Net income
Other comprehensive income (loss), net of tax														Other comprehensive income, net of tax
														Items that will not be reclassified to profit (loss)
Unrealized gains (losses) on securities		(33,327	)		33,327			190,037			190,037		b	Net changes in revaluation of financial assets measured at fair value through other comprehensive income
Pension liability adjustments		881			(285	)		(5,077	)		(4,480	)		Remeasurements of defined benefit plans
		—			285			9,374			9,659			Shares of other comprehensive income of equity method investees

		(32,446	)		33,327			194,334			195,216			Total of items that will not be reclassified to profit (loss)

														Items that may be reclassified subsequently to profit (loss)
Foreign currency translation adjustments		163,687			155,723			(150,691	)		168,718			Exchange differences on translating foreign operations
		—			(33,327	)		(3,697	)		(37,025	)		Net changes in revaluation of financial assets measured at fair value through other comprehensive income
		—			(155,723	)		149,518			(6,204	)		Shares of other comprehensive income of equity method investees

		163,687			(33,327	)		(4,870	)		125,489			Total of items that may be reclassified subsequently to profit (loss)

Total other comprehensive income (loss)		131,241			—			189,463			320,705			Total other comprehensive income, net of tax

Comprehensive income		895,104			—			11,792			906,897			Comprehensive income

														Comprehensive income for the period attributable to
Comprehensive income attributable to Toyota Motor Corporation		867,036			—			2,115			869,151			Toyota Motor Corporation
Comprehensive income attributable to noncontrolling interests		28,068			—			9,678			37,746			Non-controlling interests

		895,104			—			11,792			906,897			Comprehensive income

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

(8) Reconciliation of net profit or loss for prior period (from April 1, 2019 to March 31 2020)


	Yen in millions
Presentation under U.S. GAAP	U.S. GAAP			Reclassification			Adjustment of recognition and measurement			IFRS			Notes		Presentation under IFRS
Net revenues															Sales revenues
Sales of products		27,759,749			—			(66,056	)		27,693,693			i	Sales of products
Financing operations		2,170,243			—			2,611			2,172,854				Financial services

Total net revenues		29,929,992			—			(63,445	)		29,866,547				Total sales revenues

Costs and expenses															Costs and expenses
Cost of products sold		23,142,744			(12,761	)		(26,387	)		23,103,596			i	Cost of products sold
Cost of financing operations		1,379,620			—			2,134			1,381,755				Cost of financial services
Selling, general and administrative		2,964,759			(3,391	)		20,597			2,981,965				Selling, general and administrative

Total costs and expenses		27,487,123			(16,153	)		(3,655	)		27,467,315				Total costs and expenses

Operating income		2,442,869			16,153			(59,790	)		2,399,232				Operating income

Other income (expense)
		—			271,152			39,094			310,247				Share of profit (loss) of investments accounted for using the equity method
Interest and dividend income		232,870			77,241			(4,266	)		305,846				Other finance income
Interest expense		(32,217	)		(2,573	)		(12,365	)		(47,155	)			Other finance costs
Foreign exchange gain (loss), net		(79,020	)		—			(15,599	)		(94,619	)			Foreign exchange gain(loss), net
Unrealized gains (losses) on equity securities		(24,600	)		—			24,600			—			b
Other income (loss), net		14,705			(90,821	)		(4,491	)		(80,607	)			Other income (loss), net

Income before income taxes and equity in earnings of affiliated companies		2,554,607			271,152			(32,817	)		2,792,942				Income before income taxes

Provision for income taxes		683,430			—			(1,613	)		681,817			b	Income tax expense
Equity in earnings of affiliated companies		271,152			(271,152	)		—			—

Net income		2,142,329			—			(31,204	)		2,111,125				Net income

															Net income attributable to
Net income attributable to Toyota Motor Corporation		2,076,183			—			(40,043	)		2,036,140				Toyota Motor Corporation
Net income attributable to noncontrolling interests		66,146			—			8,839			74,985				Non-controlling interests

		2,142,329			—			(31,204	)		2,111,125				Net income

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

(9) Reconciliation of other comprehensive income during prior period (from April 1, 2019 to March 31 2020)


	Yen in millions
Presentation under U.S. GAAP	U.S. GAAP			Reclassification			Adjustment of recognition and measurement			IFRS			Notes	Presentation under IFRS
Net income		2,142,329			—			(31,204	)		2,111,125			Net income
Other comprehensive income (loss), net of tax														Other comprehensive income, net of tax
														Items that will not be reclassified to profit (loss)
Unrealized gains (losses) on securities		118,363			(118,363	)		(243,853	)		(243,853	)	b	Net changes in revaluation of financial assets measured at fair value through other comprehensive income
Pension liability adjustments		(60,196	)		(612	)		17,409			(43,399	)		Remeasurements of defined benefit plans
		—			612			61,956			62,568			Shares of other comprehensive income of equity method investees

		58,167			(118,363	)		(164,488	)		(224,684	)		Total of items that will not be reclassified to profit (loss)

														Items that may be reclassified subsequently to profit (loss)
Foreign currency translation adjustments		(333,854	)		89,371			(117,614	)		(362,098	)		Exchange differences on translating foreign operations
		—			118,363			(4,973	)		113,390			Net changes in revaluation of financial assets measured at fair value through other comprehensive income
		—			(89,371	)		54,118			(35,253	)		Shares of other comprehensive income of equity method investees

		(333,854	)		118,363			(68,469	)		(283,961	)		Total of items that may be reclassified subsequently to profit (loss)

Total other comprehensive income (loss)		(275,687	)		—			(232,958	)		(508,645	)		Total other comprehensive income, net of tax

Comprehensive income		1,866,642			—			(264,162	)		1,602,480			Comprehensive income

														Comprehensive income for the period attributable to
Comprehensive income attributable to Toyota Motor Corporation		1,820,764			—			(265,756	)		1,555,009			Toyota Motor Corporation
Comprehensive income attributable to noncontrolling interests		45,878			—			1,594			47,472			Non-controlling interests

		1,866,642			—			(264,162	)		1,602,480			Comprehensive income

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

3.	Notes to reconciliation

(1) Changes in presentation

A.	Other receivables separately presented under U.S. GAAP have been reclassified into trade accounts and other receivables under IFRS.

B.	Marketable securities separately presented under U.S. GAAP have been reclassified into other financial assets in current assets under IFRS.

C.	Other financial assets included in prepaid expenses and other current assets under U.S. GAAP are separately presented under IFRS.

D.	Derivative assets and liabilities that meet certain requirements are offset under U.S. GAAP. Under IFRS they are presented in gross amount.

E.	Income tax receivable included in prepaid expenses and other current assets under U.S. GAAP are separately presented under IFRS.

F.	Employees receivables separately presented under U.S. GAAP have been reclassified into other financial assets in non-current assets under IFRS.

G.	Right of use assets, intangible assets, deferred tax assets and other financial assets in non-current assets included in other in investment and other assets under U.S. GAAP are separately presented under IFRS.

H.	Other payables separately presented under U.S. GAAP have been reclassified into trade accounts and other payables under IFRS.

I.	Current portion of long-term debt separately presented under U.S. GAAP have been reclassified into short-term and current portion of long-term debt under IFRS.

J.	Liabilities for quality assurance included in accrued expenses under U.S. GAAP are separately presented under IFRS.

K.	Other financial liabilities included in other current liabilities under U.S. GAAP are separately presented under IFRS.

L.	Model AA Class Shares presented as mezzanine equity under U.S. GAAP have been reclassified into long-term debt under IFRS.

M.	Lease liabilities included in other long-term liabilities under U.S. GAAP have been reclassified into long-term debt under IFRS.

Assets and liabilities held for sale that were included in prepaid expenses and other current assets, other in investment and other assets, other current liabilities and other long-term liabilities under U.S. GAAP have been reclassified into other current assets and other current liabilities under IFRS.

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

(2) Difference in recognition and measurement

For the following reconciliation, the related allocation to the non-controlling interests is recorded.

a.	Inventory valuation method

Under U.S. GAAP, inventories of some subsidiaries are calculated using the last-in, first-out method, but under IFRS, they are calculated using the weighted-average method.

b.	Fair value measurement of equity financial assets

Unlisted stocks are recorded at acquisition cost under U.S. GAAP but are measured at fair value through other comprehensive income under IFRS. For equity financial assets, U.S. GAAP recognizes valuation gains and losses, gains and losses on sales and impairment as profit or loss, but under IFRS, changes in fair value are recognized as other comprehensive income.

c.	Deemed cost

In accordance with IFRS 1, Toyota has elected to use fair value at the Transition Date as deemed cost for certain items of property, plant and equipment. The carrying amount of property, plant and equipment under U.S. GAAP to which the exemption is applied is ¥59,456 million and the fair value is ¥21,225 million.

d.	Recognition of right of use assets and lease liabilities

Under IFRS, newly recognized right of use assets and lease liabilities are recorded as a result of the adoption of IFRS 16 “Leases”.

e.	Capitalization of costs incurred for development of products

Under U.S. GAAP, development expense is expensed as incurred. Under IFRS, costs incurred for development of products are capitalized if it meets the capitalization requirements.

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

f.	Deferred income taxes

Deferred income taxes have been adjusted due to the other adjustments from U.S. GAAP to IFRS. The adjustment mainly related to ¥188,837 million (as of April 1, 2019), ¥190,394 million (as of December 31, 2019), and ¥193,271 million (as of March 31, 2020) of the capitalization of development costs.

g.	Exchange differences on translating foreign operations

In accordance with the first-time exemption, the cumulative translation differences of foreign operations as of the Transition Date are transferred from other components of equity to retained earnings.

h.	Retirement benefit obligations for defined benefit plans

Under U.S. GAAP, actuarial gains and losses and past service cost are recognized in other comprehensive income when they are incurred and amortized over a certain period of future years. Under IFRS, remeasurements arising from defined benefit plans, including actuarial gains and losses are recognized in other comprehensive income and reclassified directly from other components of equity to retained earnings when they are incurred. Past service cost is recognized in profit or loss when incurred.

i.	Unification of a reporting period

For certain consolidated subsidiaries and companies accounted for by the equity method that have closing dates different from Toyota, the reporting period has been unified to Toyota’s closing date on the Transition Date.

j.	Reconciliation of retained earnings


	Yen in millions
	Transition Date (April 1, 2019)			Third quarter (December 31, 2019)			Prior fiscal year (March 31, 2020)
b. Fair value measurement of equity instruments		(990,815	)		(1,233,187	)		(799,568	)
g. Exchange differences on translating foreign operations		(649,532	)		(649,532	)		(649,532	)
h. Retirement benefit obligations for defined benefit plans		(265,867	)		(264,132	)		(324,014	)

Subtotal		(1,906,213	)		(2,146,850	)		(1,773,114	)

e. Capitalization of cost incurred for development of product		410,531			425,767			432,202
i. Unification of a reporting period		85,211			58,620			51,480
Others		36,732			(793	)		95,880

Total		(1,373,738	)		(1,663,256	)		(1,193,552	)

Subtotal represents reclassification from other components of equity.

TOYOTA MOTOR CORPORATION

Notes to Unaudited Condensed Quarterly Consolidated Financial Statements

Adjustments on the Cash Flows

Additions, collections and sales of receivables from financial services which were classified as cash flows from investing activities under U.S. GAAP are classified as cash flows from operating activities under IFRS.

TOYOTA MOTOR CORPORATION

Other

2. Other

TMC resolved at its board of directors meeting held on November 6, 2020 to pay interim dividends to the shareholders and registered pledgees of shares entered or registered in the final shareholders register as of September 30, 2020 as follows.


①	Total interim dividends
	Common stock	¥	293,575,723,035
	Series 1 Model AA class shares	¥	5,952,240,360
②	Interim dividend per share
	Common stock	¥	105.00
	Series 1 Model AA class share	¥	132.00
③	Effective date of a claim for payment and payment start date		November 27, 2020

TOYOTA MOTOR CORPORATION

Information on Guarantors

Part II. Information on Guarantors

Not applicable