![]() AsfiledwiththeU.S.SecuritiesandExchangeCommissiononJune23,2022 UNITEDSTATES SECURITIESANDEXCHANGECOMMISSION Washington,D.C.20549 FORM20-F (MarkOne) ‘ REGISTRATIONSTATEMENTPURSUANTTOSECTION12(b)OR(g)OFTHESECURITIESEXCHANGEACTOF1934 OR È ANNUALREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTOF1934 Forthefiscalyearended:March31,2022 OR ‘ TRANSITIONREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTOF1934 OR ‘ SHELLCOMPANYREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTOF1934 Commissionfilenumber:001-14948 TOYOTAJIDOSHAKABUSHIKIKAISHA (Exactnameofregistrantasspecifiedinitscharter) TOYOTAMOTORCORPORATION (Translationofregistrant’snameintoEnglish) Japan (Jurisdictionofincorporationororganization) 1Toyota-cho,ToyotaCity AichiPrefecture471-8571 Japan +8156528-2121 (Addressofprincipalexecutiveoffices) MasayoshiHachisuka Telephonenumber:+8156528-2121 Facsimilenumber:+8156523-5800 Address:1Toyota-cho,ToyotaCity,AichiPrefecture471-8571,Japan (Name,telephone,e-mailand/orfacsimilenumberandaddressofregistrant’scontactperson) SecuritiesregisteredortoberegisteredpursuanttoSection12(b)oftheAct: Titleofeachclass TradingSymbol(s)Nameofeachexchangeonwhichregistered AmericanDepositaryShares\* CommonStock\*\* TMTheNewYorkStockExchange \*Each American Depositary Share representing ten shares of the registrant’s Common Stock. \*\* No par value.Not for trading, butonly in connection with the registration of American Depositary Shares, pursuant to therequirements of the U.S. Securities and Exchange Commission. SecuritiesregisteredortoberegisteredpursuanttoSection12(g)oftheAct: None SecuritiesforwhichthereisareportingobligationpursuanttoSection15(d)oftheAct: None Indicate thenumberofoutstandingsharesofeachoftheissuer’s classesofcapitalorcommonstock asofthecloseoftheperiodcoveredbytheannualreport: 13,778,301,544sharesofcommonstock(including295,944,975sharesofcommonstockintheformofAmericanDepositaryShares)asofMarch31,2022 Indicate by check mark if the registrantis a well-known seasoned issuer, as defined inRule 405 of the Securities Act: Yes È No ‘ Ifthisreportisanannualortransitionreport,indicatebycheckmarkiftheregistrantisnotrequiredtofilereportspursuanttoSection13or15(d)ofthe Securities Exchange Act of 1934: Yes ‘ No È Indicate by checkmark whethertheregistrant (1) hasfiled allreports required tobe filedby Section13 or15(d) of theSecurities Exchange Actof 1934 during the preceding12months(orforsuchshorterperiodthat theregistrantwasrequiredtofile suchreports),and(2) hasbeensubject tosuchfiling requirementsfor the past 90 days: Yes È No ‘ IndicatebycheckmarkwhethertheregistranthassubmittedelectronicallyeveryInteractiveDataFilerequiredtobesubmittedpursuanttoRule405of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for suchshorter period that the registrant was required to submit such files): Yes È No ‘ Indicatebycheckmarkwhethertheregistrantisalargeacceleratedfiler,anacceleratedfiler,anon-acceleratedfiler,oranemerginggrowthcompany.See definition of “large accelerated filer,”“accelerated filer,” and “emerginggrowth company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer È Accelerated filer ‘ Non-accelerated filer ‘ Emerging growth company ‘ If an emerginggrowthcompanythat preparesitsfinancial statementsinacco rdancewith U.S.GAAP,indicateby checkmarkif the registranthas electe dnot touse the extendedtransitionperiodforcomplyingwithanyneworrevisedfina ncialaccountingstandards†providedpursuanttoSection13(a)ofthe ExchangeAct: ‘ †Theterm“neworrevisedfinancialaccountingstandard”referstoanyupdateissuedbytheFinancialAccountingStandardsBoardtoitsAccountingStandards Codification after April 5, 2012. Indicatebycheckmarkwhethertheregistranthasfiledareportonandattestationtoitsmanagement’sassessmentoftheeffectivenessofitsinternalcontrol overfinancialreportingunderSection404(b)oftheSarbanes-OxleyAct(15U.S.C.7262(b))bytheregisteredpublicaccountingfirmthatpreparedorissuedits audit report. È Indicate by check mark which basis of accounting theregistrant has used to prepare the financialstatements included in thisfiling: U.S. GAAP ‘ International Financial ReportingStandards as issued by the InternationalAccounting Standards Board È Other ‘ If“Other”hasbeencheckedinresponsetothepreviousquestion,indicatebycheckmarkwhichfinancialstatementitemtheregistranthaselectedto follow:Item17 ‘ Item18 ‘ If this is an annual report, indicateby check mark whether the registrant isa shell company (as defined in Rule 12b-2 of the Exchange Act):Yes ‘ No È ITEM 1.IDENTITY OF DIRECTORS, SENIOR MANAGEMENTAND ADVISERS ..........1 ITEM 2.OFFER STATISTICS AND EXPECTEDTIMETABLE ...........................1 ITEM 3.KEY INFORMATION .....................................................1 3.A[RESERVED] ............................................................1 3.BCAPITALIZATION AND INDEBTEDNESS ...................................1 3.CREASONS FOR THE OFFERAND USE OF PROCEEDS ........................1 3.DRISK FACTORS ..........................................................1 ITEM 4.INFORMATION ON THE COMPANY .......................................6 4.AHISTORY AND DEVELOPMENTOF THE COMPANY .........................6 4.BBUSINESS OVERVIEW ...................................................6 4.CORGANIZATIONAL STRUCTURE ..........................................45 4.DPROPERTY, PLANTS ANDEQUIPMENT ....................................46 ITEM 4A.UNRESOLVED STAFF COMMENTS ........................................47 ITEM 5.OPERATING AND FINANCIAL REVIEWAND PROSPECTS ....................47 5.AOPERATING RESULTS ...................................................47 5.BLIQUIDITY AND CAPITAL RESOURCES ....................................70 5.CRESEARCH AND DEVELOPMENT,PATENTS AND LICENSES .................74 5.DTREND INFORMATION ...................................................76 5.ECRITICAL ACCOUNTING ESTIMATES .....................................76 ITEM 6.DIRECTORS, SENIOR MANAGEMENTAND EMPLOYEES ....................76 6.ADIRECTORS AND SENIOR MANAGEMENT .................................76 6.BCOMPENSATION ........................................................83 6.CBOARD PRACTICES .....................................................87 6.DEMPLOYEES ............................................................89 6.ESHARE OWNERSHIP .....................................................89 ITEM 7.MAJOR SHAREHOLDERS ANDRELATED PARTY TRANSACTIONS ............91 7.AMAJOR SHAREHOLDERS .................................................91 7.BRELATED PARTY TRANSACTIONS ........................................92 7.CINTERESTS OF EXPERTS ANDCOUNSEL ..................................92 ITEM 8.FINANCIAL INFORMATION ..............................................92 8.ACONSOLIDATED STATEMENTSAND OTHER FINANCIAL INFORMATION .....92 8.BSIGNIFICANT CHANGES .................................................94 ITEM 9.THE OFFER AND LISTING ................................................94 9.ALISTING DETAILS .......................................................94 9.BPLAN OF DISTRIBUTION .................................................94 9.CMARKETS ..............................................................94 9.DSELLING SHAREHOLDERS ...............................................95 9.EDILUTION ..............................................................95 9.FEXPENSES OF THE ISSUE ................................................95 ITEM 10.ADDITIONAL INFORMATION .............................................95 10.ASHARE CAPITAL ........................................................95 10.BMEMORANDUM AND ARTICLES OFASSOCIATION .........................95 10.CMATERIAL CONTRACTS .................................................102 10.DEXCHANGE CONTROLS ..................................................102 10.ETAXATION .............................................................106 10.FDIVIDENDS AND PAYING AGENTS ........................................112 10.GSTATEMENT BY EXPERTS ...............................................112 10.HDOCUMENTS ON DISPLAY ...............................................112 10.ISUBSIDIARY INFORMATION .............................................113 ITEM 11.QUANTITATIVE AND QUALITATIVEDISCLOSURES ABOUT MARKET RISK. . .113 ITEM 12.DESCRIPTION OF SECURITIES OTHERTHAN EQUITY SECURITIES ...........113 12.ADEBT SECURITIES .......................................................113 12.BWARRANTS AND RIGHTS ................................................113 12.COTHER SECURITIES .....................................................113 12.DAMERICAN DEPOSITARY SHARES ........................................113 ITEM 13.DEFAULTS, DIVIDEND ARREARAGESAND DELINQUENCIES ................115 ITEM 14.MATERIAL MODIFICATIONS TO THE RIGHTSOF SECURITY HOLDERS AND USE OF PROCEEDS ......................................................115 ITEM 15.CONTROLS AND PROCEDURES ...........................................115 ITEM 16.[RESERVED] ............................................................116 ITEM 16A.AUDIT COMMITTEE FINANCIAL EXPERT ..................................116 ITEM 16B.CODE OF ETHICS ........................................................116 ITEM 16C.PRINCIPAL ACCOUNTANT FEESAND SERVICES ...........................117 ITEM 16D.EXEMPTIONS FROM THE LISTING STANDARDSFOR AUDIT COMMITTEES. . .118 ITEM 16E.PURCHASES OF EQUITY SECURITIESBY THE ISSUER AND AFFILIATED PURCHASERS ...........................................................118 ITEM 16F.CHANGE IN REGISTRANT’S CERTIFYINGACCOUNTANT ...................119 ITEM 16G.CORPORATE GOVERNANCE ..............................................119 ITEM 16H.MINE SAFETY DISCLOSURE ..............................................122 ITEM 16I.DISCLOSURE REGARDING FOREIGNJURISDICTIONS THAT PREVENT INSPECTIONS ...........................................................122 ITEM 17.FINANCIAL STATEMENTS ...............................................123 ITEM 18.FINANCIAL STATEMENTS ...............................................123 ITEM 19.EXHIBITS ...............................................................124 Asusedinthisannualreport,theterm“fiscal”precedingayearmeansthetwelve-monthperiodended March31oftheyearreferredto.Allotherreferencestoyearsrefertotheapplicablecalendaryearunlessthe contextotherwiserequires.Unlessthecontextotherwiserequiresorasotherwiseexpresslystated,referencesin thisprospectussupplementto“Toyota,”“we,”“us,”“our”andsimilartermsrefertoToyotaMotorCorporation and its consolidated subsidiaries,as a group. Toyota’sconsolidatedfinancialstatementsinthisannualreporthavebeenpreparedinaccordancewith InternationalFinancial ReportingStandards (“IFRS”),as issuedby theInternationalAccountingStandards Board (“IASB”).Theterm“IFRS”alsoincludesInternationalAccountingStandards(“IASs”)andtherelated interpretations of the interpretationscommittees(SIC and IFRIC). CAUTIONARYSTATEMENTWITHRESPECTTOFORWARD-LOOKINGSTATEMENTS Writtenforward-lookingstatementsmayappearindocumentsfiledwiththeSEC,includingthisannual report, documents incorporatedby reference, reports to shareholdersand other communications. TheU.S.PrivateSecuritiesLitigationReformActof1995providesa“safeharbor”forforward-looking informationtoencouragecompaniestoprovideprospectiveinformationaboutthemselveswithoutfearof litigationsolongastheinformationisidentifiedasforward-lookingandisaccompaniedbymeaningful cautionarystatementsidentifyingimportantfactorsthatcouldcauseactualresultstodiffermateriallyfromthose projected in the information.Toyota relies on this safe harborin making forward-looking statements. Forward-lookingstatementsappearinanumberofplacesinthisannualreportandincludestatements regardingToyota’scurrentintent,belief,targetsorexpectationsorthoseofitsmanagement.Inmany,butnotall cases,wordssuchas“aim,”“anticipate,”“believe,”“estimate,”“expect,”“hope,”“intend,”“may,”“plan,” “predict,”“probability,”“risk,”“should,”“will,”“would,”andsimilarexpressions,areusedastheyrelateto Toyotaoritsmanagement,toidentifyforward-lookingstatements.ThesestatementsreflectToyota’scurrent views withrespectto futureevents andare subjectto risks,uncertaintiesand assumptions.Shouldone ormore of theserisksoruncertaintiesmaterializeorshouldunderlyingassumptionsproveincorrect,actualresultsmay vary materially from thosewhich are anticipated, aimed at,believed, estimated, expected,intended or planned. Forward-lookingstatementsarenotguaranteesoffutureperformanceandinvolverisksanduncertainties. Actualresultsmaydifferfromthoseinforward-lookingstatementsasaresultofvariousfactors.Important factorsthatcouldcauseactualresultstodiffermateriallyfromestimatesorforecastscontainedintheforward- lookingstatementsareidentifiedin“RiskFactors”andelsewhereinthisannualreport,andinclude,among others: (i)changesineconomicconditions,marketdemand,andthecompetitiveenvironmentaffectingthe automotive markets in Japan, NorthAmerica, Europe, Asia and other marketsin which Toyota operates; (ii)fluctuationsincurrencyexchangerates(particularlywithrespecttothevalueoftheJapaneseyen, theU.S.dollar,theeuro,theAustraliandollar,theRussianruble,theCanadiandollarandtheBritish pound), stock prices and interest ratesfluctuations; (iii)changesinfundingenvironmentinfinancialmarketsandincreasedcompetitioninthefinancial services industry; (iv) Toyota’s ability to marketand distribute effectively; (v)Toyota’sabilitytorealizeproductionefficienciesandtoimplementcapitalexpendituresatthe levels and times planned by management; (vi)changesinthelaws,regulationsandgovernmentpoliciesinthemarketsinwhichToyotaoperates thataffectToyota’sautomotiveoperations,particularlylaws,regulationsandgovernmentpoliciesrelating tovehiclesafetyincludingremedialmeasuressuchasrecalls,trade,environmentalprotection,vehicle emissionsandvehiclefueleconomy,aswellaschangesinlaws,regulationsandgovernmentpoliciesthat affectToyota’sotheroperations,includingtheoutcomeofcurrentandfuturelitigationandotherlegal proceedings, government proceedings andinvestigations; (vii) political and economicinstability in the marketsin which Toyota operates; (viii)Toyota’sabilitytotimelydevelopandachievemarketacceptanceofnewproductsthatmeet customer demand; (ix) any damage to Toyota’s brand image; (x) Toyota’s reliance on various suppliersfor the provision of supplies; (xi) increases in prices ofraw materials; (xii) Toyota’s reliance on variousdigital and informationtechnologies, as well as informationsecurity; (xiii)fuelshortagesorinterruptionsinelectricity,transportationsystems,laborstrikes,workstoppages orotherinterruptionsto,ordifficultiesin,theemploymentoflaborinthemajormarketswhereToyota purchasesmaterials,componentsandsuppliesfortheproductionofitsproductsorwhereitsproductsare produced, distributed or sold; (xiv)theimpactofnaturalcalamities,epidemics,politicalandeconomicinstability,fuelshortagesor interruptionsinsocialinfrastructure,wars,terrorismandlaborstrikes,includingtheirnegativeeffecton Toyota’s vehicle production and sales;and (xv) the impact of climatechange and the transition towardsa low-carbon economy. PARTI ITEM1.IDENTITYOFDIRECTORS,SENIORMANAGEMENTANDADVISERS Not applicable. ITEM2.OFFERSTATISTICSANDEXPECTEDTIMETABLE Not applicable. ITEM3.KEYINFORMATION 3.A[RESERVED] 3.BCAPITALIZATIONANDINDEBTEDNESS Not applicable. 3.CREASONSFORTHEOFFERANDUSEOFPROCEEDS Not applicable. 3.DRISKFACTORS IndustryandBusinessRisks Theworldwideautomotivemarketishighlycompetitive. The worldwideautomotivemarketishighlycompetitive.Toyota facesintensecompetitionfromautomotive manufacturersinthemarketsinwhichitoperates.Competitionintheautomotiveindustryhasfurtherintensified amidstdifficultoverallmarketconditions.Inaddition,competitionislikelytofurtherintensifyin lightoffurther continuingglobalizationintheworldwideautomotiveindustry,possiblyresultinginindustryreorganizations. Factorsaffectingcompetitionincludeproductqualityandfeatures,safety,reliability,fueleconomy,theamount oftimerequiredforinnovationanddevelopment,pricing,customerserviceandfinancingterms.Increased competitionmayleadtolowervehicleunitsales,whichmayresultinafurtherdownwardpricepressureand adverselyaffectToyota’sfinancialconditionandresultsofoperations.Toyota’sabilitytoadequatelyrespondto therecentrapidchangesintheautomotivemarketandtomaintainitscompetitivenesswillbefundamentaltoits futuresuccessinexistingandnewmarketsandtomaintainitsmarketshare.Therecanbenoassurancesthat Toyota will be able to compete successfullyin the future. Theworldwideautomotiveindustryishighlyvolatile. EachofthemarketsinwhichToyotacompeteshasbeensubjecttoconsiderablevolatilityindemand. Demand forvehiclesdependsto alargeextenton economic,social andpoliticalconditions ina givenmarket and theintroductionofnewvehiclesandtechnologies.AsToyota’srevenuesarederivedfromsalesinmarkets worldwide, economic conditions in such marketsare particularlyimportant to Toyota. Reviewingthegeneraleconomicenvironmentforfiscal2022,theeconomyappearedtobeheadedtowarda recoveryduetofiscalandmonetarypoliciesadoptedbyvariouscountriesthathavesupportedtheeconomy, coupledwiththegradualrelaxationofstrictCOVID-19restrictions.Whiletheautomotivemarkethasbeen subjectedtoglobalproductionconstraintsduetocomponentsshortagescausedbyatighteningofglobalsupply of,andincreasingdemandfor,semiconductorsandtheimpactofCOVID-19,continuedsteadydemandin countriessuchas theU.S., China,andJapan resultedinarecovery fromlastyear.Geopoliticaltensionsthathave 1 increasedsinceFebruary2022havehadarippleeffectgloballyinsuchformsassoaringmaterialsprices, includingforrawmaterialsandpartsandcomponentsforToyota’svehicles,whichhasmadeitmoredifficultto foresee the future. Changesindemandforautomobilesarecontinuing,anditisunclearhowthissituationwilltransitioninthe future.Toyota’sfinancialconditionandresultsofoperations maybeadverselyaffectedif thechangesindemand forautomobilescontinuesorprogressesfurther.Demandmayalsobeaffectedbyfactorsdirectlyimpacting vehiclepriceorthecostofpurchasingandoperatingvehiclessuchassalesandfinancingincentives,pricesof rawmaterialsandpartsandcomponents,costoffuelandgovernmentalregulations(includingtariffs,import regulationandothertaxes).Volatilityindemandmayleadtolowervehicleunitsales,whichmayresultin downward price pressure and adversely affectToyota’s financial conditionand results of operations. Toyota’sfuturesuccessdependsonitsabilitytooffernew,innovativeandcompetitivelypricedproductsthat meetcustomerdemandonatimelybasis. Meetingcustomerdemandbyintroducingattractivenewvehiclesandreducingtheamountoftimerequired forproductdevelopmentarecriticaltoautomotivemanufacturers.Inparticular,itiscriticaltomeetcustomer demandwithrespecttoquality,safety,reliabilityandsustainability.Thetimelyintroductionofnewvehicle models,atcompetitiveprices,meetingrapidlychangingcustomerpreferencesanddemandismorefundamental toToyota’ssuccessthanever,astheautomotivemarketisrapidlytransforminginlightofthechangingglobal economy.Thereisnoassurance,however,thatToyotawilladequatelyandappropriatelyrespondtochanging customerpreferencesanddemandwithrespecttoquality,safety,reliability,styling,sustainabilityandother features inatimelymanner.Even ifToyotasucceeds inperceivingcustomerpreferences anddemand, thereisno assurancethatToyotawillbecapableofdevelopingandmanufacturingnew,pricecompetitiveproductsina timelymannerwithitsavailabletechnology,intellectualproperty,sourcesofrawmaterialsandpartsand components,andproductioncapacity,includingcostreductioncapacity.Further,thereisnoassurancethat Toyotawillbeabletoimplementcapitalexpendituresatthelevelandtimesplannedbymanagement.Toyota’s inabilitytodevelopandofferproductsthatmeetcustomers’preferencesanddemandwithrespecttoquality, safety,reliability,styling,sustainabilityandotherfeaturesinatimelymannercouldresultinalowermarket shareandreducedsalesvolumesandmargins,andmayadverselyaffectToyota’sfinancialconditionandresults of operations. Toyota’sabilitytomarketanddistributeeffectivelyisanintegralpartofToyota’ssuccessfulsales. Toyota’ssuccessinthesaleofvehiclesdependsonitsabilitytomarketanddistributeeffectivelybasedon distributionnetworksandsalestechniquestailoredtotheneedsofitscustomers.Thereisnoassurancethat Toyotawillbeabletodevelopsalestechniquesanddistributionnetworksthateffectivelyadapttochanging customerpreferencesorchangesinthegeopoliticalandregulatoryenvironmentinthemajormarketsinwhichit operates.Toyota’sinabilitytomaintainwell-developedsalestechniquesanddistributionnetworksmayresultin decreased sales and market shareand may adversely affect itsfinancial condition and resultsof operations. Toyota’ssuccessissignificantlyimpactedbyitsabilitytomaintainanddevelopitsbrandimage. Inthehighlycompetitiveautomotiveindustry,itiscriticaltomaintainanddevelopabrandimage.Inorder tomaintainanddevelopabrandimage,itisnecessarytofurtherincreasecustomers’confidencebyproviding safe,high-qualityproductsthatmeetcustomerpreferencesanddemand.IfToyotaisunabletoeffectively maintainanddevelopitsbrandimageasaresultofsuchreasonsasitsinabilitytoprovidesafe,high-quality productsorasaresultofthefailuretopromptlyimplementsafetymeasuressuchasrecallswhennecessary, vehicleunitsalesand/orsalepricesmaydecrease,andasaresultrevenuesandprofitsmaynotincreaseas expected or may decrease, adverselyaffecting its financialcondition and results of operations. 2 Toyotareliesonsuppliersfortheprovisionofcertainsuppliesincludingparts,componentsandrawmaterials. Toyotapurchasessuppliesincludingparts,componentsandrawmaterialsfromanumberofexternal supplierslocatedaroundtheworld.Forsomesupplies,Toyotareliesonasinglesupplieroralimitednumberof suppliers,whosereplacementwithanothersuppliermaybedifficult.Inabilitytoobtainsuppliesfromasingleor limitedsourcesuppliermayresultindifficultyobtainingsuppliesandmayrestrictToyota’sabilitytoproduce vehicles.Furthermore,evenifToyotaweretorelyonalargenumberofsuppliers,first-tiersupplierswithwhom Toyota directly transacts mayin turn rely on a single second-tiersupplier or limitedsecond-tier suppliers. Irrespectiveof the numberofsuppliers, Toyota’sability tocontinue to obtainsupplies fromits suppliersin a timelyandcost-effectivemannerissubjecttoanumberoffactors,someofwhicharenotwithinToyota’s control.ThesefactorsincludetheabilityofToyota’ssupplierstoprovideacontinuedsourceofsupply,and Toyota’sabilitytoeffectivelycompeteandobtaincompetitivepricesfromsuppliers.Circumstancesthatmay adverselyaffectsuchabilitiesincludegeopoliticaltensionsaswellasrelatedgovernmentalactionssuchas economic sanctions. Alossofanysingleorlimitedsourcesupplier,orinabilitytoobtainsuppliesfromsuppliersinatimelyand cost-effectivemanner,couldleadtoincreasedcostsordelaysorsuspensionsinToyota’sproductionand deliveries, which could have an adverseeffect on Toyota’s financial conditionand results of operations. Theworldwidefinancialservicesindustryishighlycompetitive. Theworldwidefinancialservicesindustryishighlycompetitive.Increasedcompetitioninautomobile financingmayleadtodecreasedmargins.AdeclineinToyota’svehicleunitsales,anincreaseinresidualvalue riskduetolowerusedvehicleprices,anincreaseintheratioofcreditlossesandincreasedfundingcostsare additionalfactorswhichmayimpactToyota’sfinancialservicesoperations.IfToyotaisunabletoadequately respondtothechangesandcompetitioninautomobilefinancing,Toyota’sfinancialservicesoperationsmay adversely affect its financialcondition and results ofoperations. Toyota’soperationsandvehiclesrelyonvariousdigitalandinformationtechnologies,aswellasinformation security. Toyotadependsonvariousinformationtechnologynetworksandsystems,someofwhicharemanagedby thirdparties,toprocess,transmitandstoreelectronicinformation,includingsensitivedata,andtomanageor supportavarietyofbusinessprocessesandactivities,includingmanufacturing,researchanddevelopment, supplychainmanagement,salesandaccounting.Inaddition,Toyota’svehiclesmayrelyonvariousdigitaland information technologies, includinginformation serviceand driving assistance functions. Despitesecuritymeasures,Toyota’sdigitalandinformationtechnologynetworksandsystemsmaybe vulnerabletodamage,disruptions,shutdownsduetounauthorizedaccessorattacksbyhackers,computer viruses,breachesduetounauthorizeduse,errorsormalfeasancebyemployeesandotherswhohaveorgain accesstothenetworksandsystemsToyotadependson,servicefailuresorbankruptcyofthirdpartiessuchas softwaredevelopmentorcloudcomputingvendors,powershortagesandoutages,andutilityfailuresorother catastrophiceventslikenaturaldisasters.Inparticular,cyber-attacksorotherintentionalmalfeasanceare increasingintermsofintensity,sophisticationandfrequency,andToyotahasbeenandexpectstocontinuetobe thesubjectofsuchattacks.Suchattackscouldmateriallydisruptcriticaloperations,disclosesensitivedata, interferewithinformationservicesanddrivingassistancefunctionsinToyota’svehicles,and/orgiverisetolegal claimsorproceedings,liabilityorregulatorypenaltiesunderapplicablelaws,whichcouldhavean adverseeffect onToyota’sbrandimageanditsfinancialconditionandresultsofoperations.Moreover,similarattackson Toyota’ssuppliersandbusinesspartnershavehad,andmayinthefuturehave,asimilarnegativeimpacton Toyota. 3 Toyotaisexposedtorisksassociatedwithclimatechange,includingthephysicalrisksofclimatechangeand risksfromthetransitiontoalower-carboneconomy. Risksassociatedwithclimatechangearesubjecttoincreasingsocietal,regulatoryandpoliticalfocusin Japanandglobally.Theserisksincludethephysicalrisksofclimatechangeandrisksfromthetransitiontoa lower-carbon economy. Thephysicalrisksofclimatechangeincludebothacute,event-drivenriskssuchasthoserelatingto hurricanes,floodsandtornadoes,aswellaslonger-termweatherpatternsandrelatedeffects,suchassustained highertemperatures,sealevelrise,droughtandincreasedwildfires.DespiteToyota’scontingencyplanning, large-scaledisastersduetoextremeweatherconditionshaveinthepastharmed,andmayinthefutureagain harm,Toyota’semployeesoritsfacilitiesandotherassets,aswellasthoseofToyota’ssuppliersandother businesspartners,therebyadverselyaffectingToyota’sproduction,salesorotheroperationalcapacities.Large- scaledisastersmayalsoadverselyaffectthefinancialconditionofToyota’scustomers,andtherebydemandfor its products and services. Transitionrisksarethoseattributabletoregulatory,technologicalandmarketchangestoaddressthe mitigationof,oradaptationto,climate-relatedrisks.Forexample,Toyotaissubjecttotheriskofchangesin customerdemandforvehiclesduetosuchfactorsaschangesinlaws,regulationsandgovernmentpolicies relatingtoclimatechange,technologicalinnovationtoaddressclimatechange,andnewentrantsintothe automobileindustrythatseektocapitalizeonchangingmarketdynamics.Changesincustomerdemandmay poseancillaryrisksandchallenges,suchasToyota’shavingtoestablishnew,orenhanceexisting,supply networksinordertosourcetherawmaterials,partsandcomponentsnecessaryforittomanufacturetheproducts then in demand atdesired volumesand at competitivecosts. Toyota mayincur significant costs and expensesas a resultofthematerializationofsuchrisks,orinitseffortstomitigateoradapttosuchrisks.Toyota’sinabilityto developandofferproductsthatmeetcustomers’preferencesanddemandinatimelymannercouldresultina lowermarketshareandreducedsalesvolumesandmargins,andmayadverselyaffectToyota’sfinancial condition and results of operations. FinancialMarketandEconomicRisks Toyota’soperationsaresubjecttocurrencyandinterestratefluctuations. Toyotaissensitivetofluctuationsinforeigncurrencyexchangeratesandisprincipallyexposedto fluctuationsinthevalueoftheJapaneseyen,theU.S.dollarandtheeuroand,toalesserextent,theAustralian dollar,theRussianruble,theCanadiandollarandtheBritishpound.Toyota’sconsolidatedfinancialstatements, whicharepresentedinJapaneseyen,areaffectedbyforeigncurrencyexchangefluctuationsthroughtranslation risk,andchangesinforeigncurrencyexchangeratesmayalsoaffectthepriceofproductssoldandmaterials purchasedbyToyotainforeigncurrenciesthroughtransactionrisk.Inparticular,strengtheningoftheJapanese yen against the U.S. dollar can have an adverseeffect on Toyota’s operating results. Toyotabelievesthatitsuseofcertainderivativefinancialinstrumentsincludingforeignexchangeforward contractsandinterestrateswapsandincreasedlocalizedproductionofitsproductshavereduced,butnot eliminated,theeffectsofinterestrateandforeigncurrencyexchangeratefluctuations.Nonetheless,anegative impact resultingfromfluctuationsinforeigncurrencyexchangerates andchangesin interestratesmay adversely affect Toyota’sfinancialcondition andresultsof operations.For afurther discussionofcurrency and interestrate fluctuationsandtheuseofderivativefinancialinstruments,see“OperatingandFinancialReviewandProspects —OperatingResults—Overview—CurrencyFluctuations,”“QuantitativeandQualitativeDisclosuresAbout Market Risk,” and notes 19 and 20 to Toyota’s consolidatedfinancial statements. HighpricesofrawmaterialsandstrongpressureonToyota’ssupplierscouldnegativelyimpactToyota’s profitability. IncreasesinrawmaterialspricesthatToyotaandToyota’ssuppliersuseinmanufacturingtheirproductsor partsandcomponentssuchassteel,preciousmetals,non-ferrousalloysincludingaluminum,andplasticparts, 4 mayleadtohigherproductioncostsforpartsandcomponents.Thiscould,inturn,negativelyimpactToyota’s futureprofitabilitybecauseToyotamaynotbeabletopassallthosecostsontoitscustomersorrequireits supplierstoabsorbsuchcosts.Forexample,Toyotabelievesthatincreasesinthepricesofrawmaterials,aswell asrelatedlogisticsandothercosts,hadasignificantnegativeimpactonitsresultsforfiscal2022,andcurrently expects that they will have a greaternegative impact on its resultsfor fiscal 2023. AdownturninthefinancialmarketscouldadverselyaffectToyota’sabilitytoraisecapital. Shouldtheworldeconomysuddenlydeteriorate,anumberoffinancialinstitutionsandinvestorswillface difficultiesinprovidingcapitaltothefinancialmarketsatlevelscorrespondingtotheirownfinancialcapacity, and, asaresult,thereisariskthatcompaniesmaynotbeableto raisecapitalundertermsthatthey wouldexpect toreceivewiththeircreditworthiness.IfToyotaisunabletoraisethenecessarycapitalunderappropriate conditions on a timely basis, Toyota’sfinancial condition and resultsof operations may be adverselyaffected. Regulatory,Legal,PoliticalandOtherRisks Theautomotiveindustryissubjecttovariousgovernmentalregulationsandactions. Theworldwideautomotiveindustryissubjecttovariouslawsandgovernmentalregulationsincludingthose related to vehiclesafety andenvironmental matterssuch as emissionlevels, fuel economy, noise and pollution.In particular,automotivemanufacturerssuchasToyotaarerequiredtoimplementsafetymeasuressuchasrecalls forvehiclesthatdonotormaynotcomplywiththesafetystandardsoflawsandgovernmentalregulations.In addition,Toyotamay,inordertoreassureitscustomersofthesafetyofToyota’svehicles,decidetovoluntarily implement recallsor othersafety measureseven if thevehicle complieswith the safetystandards ofrelevant laws andgovernmentalregulations.IfToyotalaunchesproductsthatresultinsafetymeasuressuchasrecalls (includingwherepartsrelatedtorecallsorothermeasureswereprocuredbyToyotafromathirdparty),Toyota mayincurvariouscostsincludingsignificantcostsforfreerepairs.Manygovernmentsalsoimposetariffsand other tradebarriers,taxesand levies,or enactpriceorexchange controls.Toyotahasincurredsignificantcostsin responsetogovernmentalregulationsandactions,includingcostsrelatingtochangesinglobaltradedynamics and policies,andexpectstoincursuchcostsinthefuture.Furthermore,new legislationorregulationsorchanges inexistinglegislationorregulationsmayalsosubjectToyotatoadditionalcostsinthefuture.IfToyotaincurs significantcostsrelatedtoimplementingsafetymeasuresorrespondingtolaws,regulationsandgovernmental actions, Toyota’s financial conditionand results of operationsmay be adversely affected. Toyotamaybecomesubjecttovariouslegalproceedings. Asanautomotivemanufacturer,Toyotamaybecomesubjecttolegalproceedingsinrespectofvarious issues,includingissuesrelatingtothetopicsdiscussedin“—Theautomotiveindustryissubjecttovarious governmentalregulationsandactions,”aswellasproductliabilityandinfringementofintellectualproperty. Toyotamayalsobesubjecttolegalproceedingsbroughtbyitsshareholdersandgovernmentalproceedingsand investigations.Toyotaisinfactcurrentlysubjecttoanumberofpendinglegalproceedingsandgovernment investigations.Anegativeoutcomeinoneormoreofthesependinglegalproceedingscouldadverselyaffect Toyota’sreputation,brandimage,financialconditionandresultsofoperations.Forafurtherdiscussionof governmentalregulations,see“InformationontheCompany—BusinessOverview—Governmental Regulation,EnvironmentalandSafetyStandards”andforlegalproceedings,pleasesee“Informationonthe Company — Business Overview — Legal Proceedings.” Toyotamaybeadverselyaffectedbynaturalcalamities,epidemics,politicalandeconomicinstability,fuel shortagesorinterruptionsinsocialinfrastructure,wars,terrorismandlaborstrikes. Toyotaissubjecttovariousrisksassociatedwithconductingbusinessworldwide.Theserisksinclude naturalcalamities;epidemics;politicalandeconomicinstability;fuelshortages;interruptioninsocial 5 infrastructureincludingenergysupply,transportationsystems,gas,water,orcommunicationsystemsresulting fromnaturalhazardsortechnologicalhazards;wars;terrorism;laborstrikesandworkstoppages.Shouldthe majormarketsinwhichToyotapurchasesmaterials,partsandcomponentsandsuppliesforthemanufactureof ToyotaproductsorinwhichToyota’sproductsareproduced,distributedorsoldbeaffectedbyanyofthese events, it may result in disruptionsand delays in the operationsof Toyota’s business. Toyotahasbeen,andisexpectedtocontinuetobe,adverselyaffectedbythespreadofCOVID-19. TheglobalspreadofCOVID-19andtheresponsestoitbygovernmentsandotherstakeholdershave adverselyaffectedToyotainanumberofways.Forexample,forreasonssuchasgovernmentdirectivesaswell asanticipatedreduceddemandforitsvehicles,Toyotahastemporarilysuspended,orintendstotemporarily suspend, production ofautomobiles and components at selectedplants in Japan and overseas.COVID-19 has also affected, and isexpected to continueto affect,the businesses of Toyota dealersand distributors, as wellas certain ofToyota’sthird-partysuppliersandbusinesspartners.Inaddition,theglobalspreadofCOVID-19andrelated mattershaveadverselyaffectedbusinessesinawidevarietyofindustries,aswellasconsumers,allofwhich negatively impacted demand forToyota’s vehicles and related financialservices. ThedurationoftheCOVID-19outbreakandtheresultingfutureeffectsareuncertain,andtheforegoing impactsandothereffectsnotreferencedabove,aswellastheultimateimpactoftheCOVID-19outbreak,are difficulttopredict.TheimpactoftheCOVID-19outbreakandtheresultingfutureeffectsmaythusadversely affect Toyota’s financial conditionand results of operationsin later periods as well. ITEM4.INFORMATIONONTHECOMPANY 4.AHISTORYANDDEVELOPMENTOFTHECOMPANY ToyotaMotorCorporationisalimitedliability,joint-stockcompanyincorporatedundertheCommercial CodeofJapanandcontinuestoexistundertheCompaniesActofJapan(the“CompaniesAct”).Toyota commencedoperationsin1933astheautomobiledivisionofToyotaIndustriesCorporation(formerlyToyoda AutomaticLoomWorks,Ltd.).ToyotabecameaseparatecompanyinAugust1937.In1982,theToyotaMotor CompanyandToyotaMotorSalesmergedintoonecompany,theToyotaMotorCorporationoftoday.Asof March31,2022,Toyotaoperatedthrough559consolidatedsubsidiaries(includingstructuredentities)and169 associates and joint venturesaccounted for by the equity method. See“—BusinessOverview—CapitalExpendituresandDivestitures”foradescriptionofToyota’s principalcapitalexpendituresanddivestituresbetweenApril1,2020andMarch31,2022andinformation concerning Toyota’s principal capitalexpenditures and divestiturescurrently in progress. Toyota’sprincipalexecutiveofficesarelocatedat1Toyota-cho,ToyotaCity,AichiPrefecture471-8571, Japan. Toyota’s telephone number in Japanis +81-565-28-2121. TheSECmaintainsawebsite(https://www.sec.gov/)thatcontainsreports,proxyandinformation statements,andotherinformationregardingissuersthatfileelectronicallywiththeSEC.Toyotaalsomaintainsa website(https://global.toyota/en/)throughwhichitsannualreportsonForm20-FandcertainofitsotherSEC filingsmaybeaccessed.InformationcontainedonoraccessiblethroughToyota’swebsiteisnotpartofthis annual report on Form 20-F. 4.BBUSINESSOVERVIEW Toyotaprimarilyconductsbusinessintheautomotiveindustry.Toyotaalsoconductsbusinessinfinance and other industries.Toyota sold8,230 thousand vehiclesin fiscal 2022on a consolidatedbasis. Toyota hadsales revenuesof¥31,379.5billionandnetincomeattributabletoToyotaMotorCorporationof¥2,874.6billionin fiscal 2022. 6 ![]() Toyota’sbusinesssegmentsareautomotiveoperations,financialservicesoperationsandallother operations.ThefollowingtablesetsforthToyota’ssalestoexternalcustomersineachofitsbusinesssegments for each of the past three fiscalyears. Yeninmillions YearEndedMarch31, 202020212022 Automotive ................................................ 26,770,37924,597,84628,531,993 Financial Services ........................................... 2,172,8542,137,1952,306,079 All Other .................................................. 923,314479,553541,436 Toyota’sautomotiveoperationsincludethedesign,manufacture,assemblyandsaleofpassengervehicles, minivansandcommercialvehiclessuchastrucksandrelatedpartsandaccessories.Toyota’sfinancialservices businessconsistsprimarilyofprovidingfinancingtodealersandtheircustomersforthepurchaseorleaseof Toyotavehicles.Toyota’sfinancialservicesbusinessalsoprovidesmainlyretailinstallmentcreditandleasing throughthepurchaseofinstallmentandleasecontractsoriginatedbyToyotadealers.RelatedtoToyota’s automotiveoperations,Toyotaisworkingtowardshavingallofitsvehiclesbecomeconnectedvehicles,creating newvalueandreformingbusinessesbyutilizingbigdataobtainedfromthoseconnectedvehicles,and establishingnewmobilityservices.Toyota’sallotheroperationsbusinesssegmentincludestheinformation technology related businesses includinga web portal for automobileinformation called GAZOO.com. Toyotasellsitsvehiclesinapproximately200countriesandregions.Toyota’sprimarymarketsforits automobiles areJapan, NorthAmerica,Europe and Asia.The following tablesets forthToyota’s sales toexternal customers in each of its geographicalmarkets for each of thepast three fiscal years. Yeninmillions YearEndedMarch31, 202020212022 Japan ..................................................... 9,503,2388,587,1938,214,740 North America .............................................. 10,419,8699,325,95010,897,946 Europe .................................................... 3,133,2272,968,2893,692,214 Asia ...................................................... 4,785,4894,555,8975,778,115 Other\* .................................................... 2,024,7241,777,2662,796,493 \*“Other” consists of Centraland South America, Oceania, Africa andthe Middle East. Duringfiscal2022,23.4%ofToyota’sautomobileunitsalesonaconsolidatedbasiswereinJapan,29.1% wereinNorthAmerica,12.4%wereinEuropeand18.7%wereinAsia.Theremaining16.4%ofconsolidated unit sales were in other markets. TheWorldwideAutomotiveMarket Toyota estimates that annual worldwidevehicle sales totaled approximately83 million unitsin 2021. Automobile sales are affectedby a number of factors including: •social,political and economic conditions; •introductionof new vehicles and technologies; •costs incurredby customers to purchaseand operate automobiles; and •the availabilityof parts and componentsthat Toyota needs to manufactureits products. Thesefactorscancauseconsumerdemandtovarysubstantiallyfromyeartoyearindifferentgeographic markets and in individual categoriesof automobiles. 7 Globaleconomicactivityheadedtorecoveryinfiscal2022underpinnedbyeachcountry’sfiscaland monetarypoliciesaswellasthegradualrelaxationofthestrictrestrictionsduetoCOVID-19.Theautomobile marketfacedglobalproductionconstraintsduetoa lackofsupplyofpartsandcomponentscausedbytheimpact of COVID-19,and alsothetighteningof globalsupplyof,and increasingdemandfor, semiconductors.However, therewassteadydemandincountriessuchas theU.S., ChinaandJapan,resultinginarecoverycomparedtolast year.Intheshortterm,theimpactofgeopoliticaltensionsthatarosesinceFebruary2022spreadworldwidein the form of price increasesof products, making it even moredifficult to foresee thefuture. TheUnitedStateshasseensustainedeconomicactivityduetoprogressmadeonvaccinationsandthe favorableemploymentandwageenvironment,andgovernmenteconomicpolicieshavecontributedtoa continuedrecoverybasedonstrongdomesticdemand.Monetarypolicyhasnowshiftedtowardinterestrates increasesinordertocurboverheatinginflation.InEurope,whileprogresshasbeenmadeonvaccinations,there isonceagainanincreasingnumberofCOVID-19cases,whichhasledtorestrictionsoneconomicactivity. Further,EuropehasbeenthemostaffectedbythegeopoliticaltensionsthatarosebeginninginFebruary2022, whichhasbluntedthemomentumofrecovery.WhileJapanhasmaderapidprogressonvaccinationssincethe middleof 2021,inthemidstofcool-downsandresurgencesinthenumber ofCOVID-19 cases,theeconomyhas stagnatedduetopoliciesrestrictingeconomicactivity,aswellasreducedproductionactivitycausedbysupply constraints.InChina,despitegovernmentsupport,its“zero-COVID”policytocombataresurgenceof COVID-19caseshasseverelyrestrictedeconomicactivitysincethebeginningof2022,leadingtoasharp decelerationoftheeconomy.Whileslowerthandevelopedcountries,progresswithvaccinationsinemerging economiesisgraduallybeingmade,andinfectioncontrolmeasuresarebeingeased,leadingtoagradual recovery;however,somecountries,includingBrazil,haveseenaslightdecreaseinconsumptionduetoinflation taking hold. Amidthisenvironment,theautomobilemarketslightlyrecoveredoverallin2021comparedtotheprevious yearwhenthemarketfacedasizabledropduetoCOVID-19,butitcontinuestobeamoredifficultyearthan usual. Inthemedium-tolong-term,Toyotaexpectstheautomotivemarkettocontinuegrowingdrivenprincipally bygrowthinChinaandotheremergingmarkets.However,globalcompetitionisexpectedtobesevere,asthe paceoftechnologicaladvancementanddevelopmentofnewproducts,particularlyrelatedtoelectrification, quickensfurther,includinginresponsetoaheightenedglobalawarenessoftheenvironmentwithaviewto carbon neutrality and the strengtheningof various standards in linewith such awareness. In2021,China,NorthAmerica,EuropeandAsiaweretheworld’slargestautomotivemarkets.InNorth America,newvehiclesaleswereapproximately17.86millionunits,anincreasefromthepreviousyear.In Europe,newvehiclesalesalsoincreasedfromthepreviousyearatapproximately16.87millionunits.InAsia (includingIndiabutexcludingJapanandChina),newvehicleunitsalesalsoincreasedfromthepreviousyearto approximately9.22millionunits.Theshareofeachmarketacrosstheglobe,whichToyotaestimatesbasedon theavailableautomobilesalesdataineachcountryandregioninformation,was31%forChina,22%forNorth America(21%excludingMexicoandPuertoRico),20%forEuropeand11%forAsia.InChina,newvehicle sales increased from the previousyear to approximately 25.22 millionunits. Theworldwideautomotiveindustryisaffectedsignificantlybygovernmentregulationsaimedatreducing harmfuleffectsontheenvironment,enhancingvehiclesafetyandimprovingfueleconomy.Theseregulations haveaddedtothecostofmanufacturingvehicles.Manygovernmentsalsomandatelocalprocurementofparts andcomponentsandimposetariffsandothertradebarriers,aswellaspriceorexchangecontrolsasameansof creatingjobs,protectingdomesticproducersorinfluencingtheirbalanceofpayments.Changesinregulatory requirementsandothergovernment-imposedrestrictionscanlimitorotherwiseburdenanautomaker’s operations.Governmentlawsandregulationscanalsomakeitdifficulttorepatriateprofitstoanautomaker’s home country. 8 ![]() Thedevelopmentoftheworldwideautomotivemarketincludesthecontinuingglobalizationofautomotive operations.Manufacturersseektoachieveglobalizationbylocalizingthedesignand manufactureof automobiles andtheirpartsandcomponentsinthemarketsinwhichtheyaresold.Byexpandingproductioncapabilities beyond theirhomemarkets,automotivemanufacturersare ableto reducetheirexposure tofluctuationsin foreign exchange rates, as well as to traderestrictions and tariffs. Overtheyears,therehavebeenmanyglobalbusinessalliancesandinvestmentsenteredintobetween manufacturersintheglobalautomotiveindustry.Therearevariousreasonsbehindthesetransactionsincluding theneedtoaddressexcessiveglobalcapacityintheproductionofautomobiles,andtheneedtoreducecostsand improveefficiencybyincreasingthenumberofautomobilesproducedusingcommonvehicleplatformsandby sharingresearchanddevelopmentexpensesforenvironmentalandothertechnology,thedesiretoexpanda company’sglobalpresencethroughincreasedsize;andthedesiretoexpandintoparticularsegmentsor geographic markets. Toyotabelievesthatitsresearchanddevelopmentinitiatives,particularlythedevelopmentof environmentallyfriendlynewvehicletechnologies,vehiclesafetyandinformationtechnology,provideitwitha strategic advantage. Toyota’sabilitytocompeteintheglobalautomotiveindustrywilldependinpartonToyota’ssuccessful implementationofitsbusinessstrategy.Thisissubjectto anumberof factors,someofwhich arenotinToyota’s control.Thesefactorsarediscussedin“OperatingandFinancialReviewandProspects”andelsewhereinthis annual report. ToyotaPhilosophy Theautomotiveindustryisexperiencingaonce-in-a-centurytransformation.Wearenowstrivingto transformourselves intoamobilitycompany.In anerawhich itishard topredictthefuture, Toyotahas reflected on the path it has taken thus far andhas formulated the “Toyota Philosophy” asa roadmap for the future. Toyota’smissionis“ProducingHappinessforAll”byexpandingthepossibilitiesofpeople,companiesand communitiesthrough addressingthechallengesofmobilityas amobilitycompany. Inorder todo so,Toyota will continuetocreatenewanduniquevaluewithvariouspartnersbyrelentlesslycommittingtowards monozukuri (manufacturing), and by fosteringimagination for people and society. Toyoda Principles Partnerships Software The Toyota Way Value Mission Vision Hardware P r o d u c i n g H a p p i n e s s f o r A l l C r e a t i n g M o b i l i t y f o r A l l MISSION Producing Happiness for All Using our technology, we work towards a future of convenience and happiness, available toall VISION Creating Mobility for All Toyota strives to raise the qualityand availability of mobility so that individuals,businesses, municipalities and communities can do more, while achievinga sustainable relationship withour planet VALUE We unite our three strengths (Software,Hardware and Partnerships) to create new and uniquevalue that comes from the Toyota Way 9 ToyotaProductionSystem(“TPS”) TPSisimbuedwiththedesireofSakichiToyoda,thefounderoftheToyotafamilyofcompanies,and Kiichiro Toyoda, the founder, “to make someone’swork easier.” TPSwasestablishedbasedontwoconcepts: Jidoka, whichcanbelooselytranslatedas“automationwitha humantouch,”—anideaofstoppingequipmentimmediatelywhenaproblemoccurs,inordertoprevent defectiveproductsfrombeingproduced—and“ JustinTime ”(“JIT”),aconceptbasedontheideathat“each process producesonly whatis neededfor thenext processin acontinuous flow.”Based onthe basicphilosophies of jidoka andJIT,throughTPS,Toyotaaimstoefficientlyandquicklyproducevehiclesofsoundquality,oneat a time, to fully satisfycustomer requirements. ToyotabelievesthatimprovinguponTPSisessentialtoitsfuturesurvival.Currently,TPSisbeing introducedintodevelopmentdepartmentsandadministrativedepartments.ToyotaintendstoapplyTPStoits developmentdepartmentssothatitcanbeusednotonlytoshortendevelopmenttimesandreducecosts,butalso to develop our human resources, thus leadingto the manufacturing of ever-bettercars that customerswill love. SelectedInitiatives Astheautomotiveindustryfacesaonce-in-a-centurytransformationalperiodandatatimewhentheright answersareelusive,wearecommittedto“ProducingHappinessforAll”togetherwithourstakeholders, underpinnedbythespiritof“FortheSakeofOthers”whichwehavemaintainedsinceour founding.Webelieve managementpracticesthatvaluewhatmakesusToyotawillleadtosustainedeffortstoachievetheaimsofthe SustainableDevelopmentGoals,formallyadoptedbytheUnitedNationsinSeptember2015(the“SDGs”),to “build a better world” while ensuringthat “no one will be left behind.” Weareacceleratingourshifttowardproduct-centeredmanagementunderthe“makingever-bettercars” initiative,effortstoachievecarbonneutrality,andendeavorstodevelopessentialtechnologiessuchassoftware and connected vehicles. The following detailsthe areas in which we particularlywish to focus our efforts. Product-centeredManagement Wehavehistoricallyofferedawiderangeofvehiclesaimedatmeetingcustomerneeds.Oneofthekey aspectsin ourcarmakingissportscars,whichservesasthefrontlineforpassingdown theskillsandknowledge thatwillbepasseddownaswellasforhumanresourcedevelopment.Therootsofourmotorsportsactivitiescan betracedbacktothefounderKiichiroToyoda’swords,“racingisindispensabletothedevelopmentofJapan’s automobilemanufacturingindustry.”Wehavecreatedsportscarsthatbringtogetherthemostcutting-edge technological prowessof theera, such asthe “Publica Sports,”“Sports 800,” and“2000GT” in the 1960s,and the “Supra,” “MR2,” “Celica,”“CorollaLevin,” and“SprinterTrueno” in the1980s. Wedeveloped the“LFA” in the 2010s,whichisthecornerstoneofourvehiclestoday.The“GRYaris”isourattempttofliptheapproachof makingracecarsfrommass-productioncarsbydesigningaracecarfromthegroundup.Fromtheinitialstages ofdevelopment,wereachedouttoprofessionaldriverstohavethemdrivethecarforrepeatedcyclesof evaluation and improvement. As a result,the car evolved into one thatis fun to drive. Theotherkeyaspectislong-sellingproducts.Ourlong-sellingcarshavebeenbelovedbycustomersasan integralpartoftheirlives,andmustcontinuallyevolvetomeettheneedsofthetimes.The“Vitz,”asitwas known inJapan, wasunifiedunderthe nameYaris,which hadtakenrootoverseas, andweexpanded itslineupto includethe“GRYaris”and“YarisCross.”Similarly,the“Corolla”lineupsawtheadditionofthe“Corolla Sport”and“CorollaCross.”Wewillpromoteourstrategytobuildalineuptailoredtocurrentneedswhile leveraging the brand strength ofour long sellers. Inordertopracticeproduct-centeredmanagement,ourpresident,PresidentToyodahasdriventhe transformationofToyotasincetakingoffice,basedonthethreepillarstomakeever-bettercars:i)TNGA (ToyotaNewGlobalArchitecture),whichfacilitatestherealizationofexcellentperformanceintermsof 10 fundamentalcarfunctions—moving,turning,andstopping,ii)acompanywhosepeoplearealwayspassionate about, andhavea senseofresponsibilitywith respectto,thefullproduct lineupandeach andeverycar,and iii)a masterdriverintopmanagementwhotakesfinalresponsibilityforassessingwhetherthecarsweputoutwill satisfyourcustomers.Wewillcontinueaimingtobethebestcompany“intown”bycreatingbettercarsthat bring smiles to customers’faces. InitiativestoAchieveCarbonNeutrality InApril2021,Toyotaannouncedthatitwouldaddressglobal-scalechallengestoachievecarbonneutrality by 2050. To achieve carbonneutrality,Toyota intends tocontinue implementingelectrifiedvehicle strategiesthat contributetoreducingCO 2 emissionsthroughouttheproductlifecyclewhilecoordinatingwithnational governmentsregardingenergypolicies,includingrenewableenergyandcharginginfrastructure,andpublic policies, including purchasing grants,supplier support, and batteryrecycling systems. Sincelaunchingthe“Prius”—theworld’sfirstmass-productionhybridelectricvehicle(“HEV”)—in 1997,wehavesoldacumulativetotalofover20millionelectrifiedvehiclesworldwide,achievingaCO 2 emissionsreductionofover160milliontonsaccordingtoourestimates.Tocontinueacceleratingtherealization ofcarbonneutrality,wewillresponddeftlytochangesincustomerdemandtrendsbyprovidingadiversesetof productoptions,takingintoconsiderationregion-specificelectricpowerconditions.Wearepromotingour vehicleelectrificationstrategyfromalldirections,includingbatteryelectricvehicles(“BEVs”),HEVs,plug-in hybridelectricvehicles(“PHEVs”),andfuelcellelectricvehicles(“FCEVs”).InDecember2021,weannounced our aimofdeveloping30typesofBEVsand achievingafulllineupineachsegmentgloballyby 2030toachieve globalsalesof3.5millionBEVsperyearby2030.WealsoannouncedthatToyotaplanstoinvest,by2030,a totalofapproximately8trillionyenincapitalexpenditures,researchanddevelopmentexpensesandother investmentsrelatingtoelectrification.Oftheplanned8trillionyen,approximately4trillionyenisexpectedto relatetoBEVs;oftheapproximately4trillionyentowardsBEVs,approximately2trillionyenisplannedtobe relatedtobatteries.Batteriesarecrucialcomponentsofelectrifiedvehicles.Todevelopbatteriesthatour customerscanuse withpeaceofmind,we focusonproducingbatteriesthat standoutforfive factorsandstrikea balanceamongthem:safety,longservicelife,highquality,qualityatanaffordableprice,andoutstanding performance.Wewillworkontheintegrateddevelopmentofvehiclesandbatteriestoreducecosts.Wearealso makinguseofourinternalcombustionenginetechnology.Thehydrogenengine,whichdrawsonmanydecades oftriedandtestedtechnology,hasthepotentialofcontributingtocarbonneutrality.Wearerepeatedlyassessing andimprovingthehydrogenengine-poweredCorollainamotorsportsenvironment,wheredevelopmenttakes placeonamuchshortertimelinethan itdoesformass-producedautomobiles.In additiontodevelopingvehicles, we need toexpand optionsfor creating,distributing,and usingenergy. Through participationin theSuper Taikyu Series,wearetakingonthischallengetogetherwithmanycomradesgainedinandoutsideoftheautoindustry with the will and passion for collaboration. In theproductionfield,weannouncedthatweaimto achievecarbonneutralityatourglobal plantsby2035. WearepromotingthereductionofCO 2 emissionsthroughtheintroductionofrenewableenergyandhydrogenat plants in addition to comprehensiveenergy conservation. ForafurtherdiscussionofToyota’s initiatives,see“AutomotiveOperations —BEV Strategies,”“Automotive Operations — The Development and Supply of Batteries” and “Automotive Operations — Hydrogen Engine.” SoftwareandConnectedInitiatives Inaneradefinedby“CASE,”anacronymforConnected,Autonomous/Automated,Shared,andElectric, automobilemanufacturingrequirestechnologicaldevelopmentinnewfieldssuchaselectrification,automated driving, andconnectivity. Weaim toprovidenew value throughnovelexperiences andby bringing excitementto customersthroughthemobilityof“people,”“goods,”and“things”ascarsbecomemorelinkedtoinformation. Webelievethatthevehicledevelopmentplatform“Arene,”whichiscurrentlyindevelopmentatWovenAlpha, 11 Inc.,asubsidiaryofToyota,willdramaticallytransformthedevelopmentofsoftwareforvehicles.Byenabling theindependentdevelopmentofsoftwareapartfromhardware,Areneleveragesthestrengthsofhardware cultivatedbyToyotatoachievethedevelopmentofsafe,high-quality,andadvancedsoftware.Furthermore, application development on Arene isalso made easier, enabling usersto program applications moreefficiently. Theproportionofacar’svalueattributabletosoftwareisgrowing.Bydevelopinginternallytheportions centraltoToyota’sfuturetoenhanceourcompetitiveness,wewillcollaboratewithourpartnercompaniesto acceleratethespeedofmassproduction.Connectedcarsandconnectedtechnologieswillbeappliedtoavariety of areas, and that which is to be connectedwill expand to include people, cars, communities,and society. Forafurtherdiscussionofthisinitiative,see“AutomotiveOperations—SoftwareandConnected Initiatives.” CommercialSectorInitiatives CASEtechnologiescanonlycontributetosocietyoncetheybecomewidespread.Commercialvehiclescan playimportantrolesinCASEtechnologydissemination,astheytravellongdistancesforextendedperiodsof time tosupport theeconomy andsociety andcan beeasily linkedwithinfrastructuredevelopment. InApril 2021, Toyota,IsuzuMotorsLimited(“Isuzu”)andHinoMotors,Ltd.(“Hino”)establishedCommercialJapan PartnershipTechnologies(“CJPT”)withtheaimtoacceleratetheimplementationandadoptionofCASE technologiesandservicesandtherebyhelpaddresssocialissuesandcontributetotherealizationofcarbon neutrality.InJuly2021,SuzukiMotorCorporation(“Suzuki”)andDaihatsuMotorCo.,Ltd.(“Daihatsu”) announcedthattheyhadjoinedCJPT.CJPTplanstorealizeitsaimsbycombiningthecommercialvehicle foundationscultivatedbyIsuzuandHinoandthestrengthsofSuzukiandDaihatsuinhigh-quality,low-cost manufacturingwithToyota’sCASEtechnologies.CJPTiscurrently60%ownedbyToyota,withIsuzu,Hino, SuzukiandDaihatsueachowning10%.CJPTwilllinkeachcompany’sconnectedtechnologyplatformstobuild amorecomprehensiveplatformforcommercialvehiclesandleverageTPStorealizeJITlogisticsandincrease transport efficiency, therebyhelping to reduce CO 2 emissions. For a further discussion of thisinitiative, see “AutomotiveOperations — Commercial Sector Initiatives.” WovenCity “WovenCity”isahuman-centeredcitywhereweaimtocontinuouslyproducenewvalueandbusiness modelsbyutilizingthemobilityof“information,”“goods,”and“people”tosupportdailylife,byrapidly implementingdevelopmentand demonstrationcyclesoftechnologiesand services.Byusingdigitaltwins,which involvereproductionsoffutureproductsandtechnologiesinadigitalspaceforadvancingdevelopmentinboth realanddigitalforms,wearesimultaneouslytestingavarietyofoptionsvirtuallybeforebuildingthereal versions.WovenCitywillbeaconstantlyimproving,ever-evolvingcityrootedinToyota’skaizenapproach— thinkingthatthereisalwaysabetterway.Wewillworkwithourpartnersinthisquesttoincreasethe significanceandvalueofmobility,whichisnotonlyaboutmovingpeopleandgoodsbutalsoaboutmoving hearts. For a further discussion of thisinitiative, see “AutomotiveOperations — Woven City.” DialoguewithEmployeesandHumanResourceDevelopment AtToyota,managementandlaborunionsworkhandinhandtodeveloptheeconomythroughthe automobileindustry.AttalksheldinMarch2022,wedeepenedourmutualunderstandingontopicsincluding howourproductionwilladdressthesemiconductorshortage,therealityfacingoursuppliersastheyworkto achievecarbonneutrality,andconcernsoverhavingallmembersactivelyparticipateindiversifyingworkplaces, usingaforumakintoamanagementmeetingbutwithfullparticipation.Tosurviveandthrivethroughthese 12 uncertaintimesasweheadintounchartedterritory,wearetakingactionamidarapidlychangingmanagement environmentbasedonthebeliefthatthereisaworldofdifferencebetweenwherewemightendupsimplyby lettingthingsruntheircourseforthenextdecadeandhowthatsamefuturemightlookifwecontinuestrivingto make things better. To enhance the overallpotential ofour workforce, westrive to develophuman resourcesequipped with both theabilitytoact,whichisthedrivingforceofourbusiness,andcompassion,ortheabilitytomakeeffortsfor others,suchascustomersandteammates,andtolearnrespectfullyfromothersandkeepimproving.Webelieve wecanlearnalotfromathleteswholeaddisciplinedlifestylesfocusedonreachingtheirmaximumpotentialin theinstantitmatters,aswellastheircommitmenttoservingothersthroughcontributiontotheirownteamand training the next generation. TheToyotagroupwillkeepmovingforwardsteadilytogetherwiththe5.5millionpeopleworkinginthe automotiveindustryinJapan,aswellasvariousstakeholdersaroundtheworld,inordertobecomeamobility company. We sincerely hope that our shareholderswill continue to extendtheir patronage and support to us. OnJuly20,2021,ToyotaandTOYOTAMobilityTokyoInc.(“TMT”),awhollyownedsubsidiary, announcedthat,duringcertaininspectionsofautomobilesperformedaspartoflegallyrequiredmaintenanceata LexusdealershipinTokyo,inspectionresultshadbeenfalsifiedtomeetthestandardsandsomeoftherequired inspectionshadbeenomitted.Furthermore,upon carryingoutaninvestigationofall4,852dealerships,including independentdealerships,sellingToyotaandLexusbrandvehicles,acrossJapan,itwasdiscoveredthatsuch misconducthadbeenperformedatmultiplelocations.Therearevariousissuesunderlyingtheseincidents, including staffshortages,inadequate facilities,misguidedattitudestoward theJapanesesystem of regular,legally requiredinspectionsofautomobiles,andanunforthcomingcorporateculture.Toyotabelievesoneoftheroot causesofthemisconductisthatitfailedtohaveafullgraspoftheactualconditionsatdealershipworksitesand their requests. Toyotaandallofitsdealershipsaretakingtheseriesofincidentsextremelyseriouslyandplacingahigh priorityonproperlycarryingoutcertaininspectionsofautomobilesperformedaspartoflegallyrequired maintenanceoperations.Wewillmakeconcertedeffortstoregainthetrustofcustomersandtoprevent recurrence. Furthermore,onMarch4,2022,HinoMotors,Ltd.,apubliclytradedJapanesecompanythatproducesand sellscommercialtrucksandbuses,andofwhichToyotaowns50.18%ofthevotinginterestsasofMarch31, 2022,announcedthatithasidentifiedpastmisconductinrelationtoitsapplicationsforcertificationconcerning theemissionsandthefueleconomyperformanceofcertainofitsenginesfortheJapanesemarket.Seealso “—LegalProceedings.”HinoannouncedonMarch11,2022thatitestablishedaSpecialInvestigation Committeecommissionedwithdevelopingaclearerunderstandingofthematterandanalyzingtherootcauses. HinohasstatedthattheCommitteewillproposeremedialmeasuresconcerningenginedevelopmentprocesses andbestpracticeatHino.Hinohasannouncedthatitwillfullycooperatewiththeinvestigationtobeconducted by the Special Investigation Committee,and expressed its commitmentto taking effectiveremedial measures. The Toyotagroup believescomplianceis thefoundation ofmanagement.We willwork tirelesslytoearn the trust of customers and to preventrecurrence. AutomotiveOperations Toyota’ssalesrevenuesfromitsautomotiveoperationswere¥28,605.7billioninfiscal2022, ¥24,651.5 billion in fiscal 2021, and ¥26,799.7 billionin fiscal 2020. Toyotaproducesandsellspassengervehicles,minivansandcommercialvehiclessuchastrucks.Toyota MotorCorporation’ssubsidiary,Daihatsu,producesandsellsmini-vehiclesandcompactcars.Hino,alsoa subsidiaryofToyotaMotorCorporation,producesandsellscommercialvehiclessuchastrucksandbuses. Toyota also manufactures automotiveparts, components and accessoriesfor its own use and for sale toothers. 13 VehicleModelsandProductDevelopment Toyota’svehicles(producedbyToyota,DaihatsuandHino)canbeclassifiedlargelyintoelectrified vehiclesandconventionalenginevehicles.Toyota’sproductline-upincludessubcompactandcompactcars, mini-vehicles,mid-size,luxury,sportsandspecialtycars,recreationalandsport-utilityvehicles,pickuptrucks, minivans,trucksandbuses.Toyota’sluxurycarsaresoldinNorthAmerica,Europe,Japanandotherregions, primarily under the Lexus brand name. Infiscal2020,ToyotaintroducedanewYarismodeldevelopedwiththeaimofcreatingacarwithhigh- qualityridecomfortandthelatestsafetyandsecuritytechnologies,whiletakingadvantageofthenimble handlingofacompactcar.Inaddition,wecommencedsalesoftheRaize,whichcaterstothedesiresof customers whowant todrive anSUV and load theircars with alot of luggage,but also havea car thatis compact andeasytodrive.Inaddition,welaunchedthenewHighlander,amid-sizeSUVsuitableforcitydrivingand multi-passengeruse,graduallyinoverseasmarketsstartingwiththeU.S.IntheLexusbrand,wepremieredin ChinatheUX300e,whichpursuesrefined,pure,exhilaratingperformanceandexcellentquietnessuniqueto LexusEVs,whilemaintainingthedistinctivedesign,highconvenienceandeaseofhandlingoftheLexusUX compactcrossover.WealsounveiledtheGRYaris–asportscarimbuedwiththeknowledgeandknow-howto make it an FIA World Rally Championship winner– at the Tokyo Auto Salon 2020. In fiscal2021, despitethe suspensionof operationsatfactoriesand the suspensionof business atdealers due totheimpactofCOVID-19,Toyotalaunchedvariousnewmodelsasplanned.ThenewHarrier,anSUVforthe newera,wasdesignedtoresonatewiththeheartofthedriver,withafocusonsensoryqualityfromthefirst momentofseeing,ridinganddrivingoffinit,ratherthanrelyingonutilityornumericalperformance.Thenew Miraifeaturedadesignthatappealstothesenses,adistinctivedrivingexperience,industry-leadinginnovation, andcruisingrangethatgivespeaceofmindasitsconcept,whilegeneratingzeroemissions,andwillserveasa new departurepointforcreatingahydrogen-basedsocietyofthefuture.IntheLexus brand,welaunched theUX 300e,whichoffersthehigh-qualitydrivingperformanceandexcellentquietnessunique toLexus BEVs,thehigh reliabilityandconvenienceoftheelectrificationtechnologycultivatedinthemanufactureofhybridmodels,and thedistinctivedesignandhighfunctionalityoftheLexusUX.GRYarisisthefirstToyotavehicledeveloped withthereversedconceptofturningamotorsportscarintoaproductioncar.ThecarwasevaluatedbyMaster DriverMorizo(theracingdrivernameforAkioToyoda)andnon-Toyotaprofessionaldriversfromtheearly stagesofdevelopment,andevenafteritwasunveiledattheTokyoAutoSalon2020,itunderwentrepeated cyclesofevaluationandimprovementatthecircuitbeforeitwasfinallylaunched.Asaresultofoureffortsto furtherstreamlinecostsfollowingtheLehmanBrothersbankruptcyandthe“everbettercarsmanufacturing” initiative,thecompactcar,Yaris,wontheCaroftheYearinEurope,aplacewherepeoplehavecontinuedto havestrongpassionforcarsinitslongautomotivehistory.TheawardrecognizedYaris’sfun-to-drivefeatures and fuel efficiency as a HEV. Infiscal2022,Toyotalaunchedthefirst-everSUVCorollamodel,CorollaCross.Sincethelaunchofthe first-generationin1966,theCorollaserieshascontinuedtoevolveandembracenewchallengesandhassold morethan50millionunitsworldwide.TheNoahandVoxy,carssupportedandlovedbymanycustomers, includingfamiliesamongothers,werecompletelyredesignedasminivanswiththefurtherincreasedeaseofuse andenhancedadvancedfixtures.Inpursuitofasuiteoffeaturesdesignedtoenablecustomerstodrivetheir vehicleseverydaywithjoy,safety,peaceofmind,andcomfort,whilealsorealizingsuperiorenvironmental performance,ToyotalaunchedtheHEVAqua,whichistheworld’sfirstvehicletouseahigh-outputbipolar nickel-hydrogenbatteryasanelectricdrivebattery.Withelevatedlevelsofdrivingperformance,design,and advancedtechnology,theall-newNX,whichisthefirstmodeltointroducethenextgenerationofLexus, acceleratestheproliferationofelectrifiedmodelsbybeingLexus’first-everPHEValsoofferedasaHEV.In addition, the new ToyotabZ series ofBEVs that are easyto use andhighly appealing, andthe introductionof this seriesisapartofToyota’seffortstoreduceCO 2 emissions.ToyotalaunchedthebZ4X, thefirstofthebZseries, whichoffers,inadditiontoacomfortablecabin,anewlifestyleandtheopportunitytospendprecioustimewith familyandfriendsaswellastheBEV’suniquejoyofdriving.Formotorsportscars,Toyotadevelopedthe 14 ![]() GRMNYarisas“embodimentsofmakingever-bettermotorsports-bredcars.”Toyotawillfurtherevolveits concept of “making ever-bettercars” to meet customers’needs in countries and regions worldwide. Markets,SalesandCompetition Toyota’sprimarymarketsareJapan,NorthAmerica,EuropeandAsia.Thefollowingtablesetsforth Toyota’sconsolidatedvehicleunitsalesbygeographicmarketfortheperiodsshown.Thevehicleunitsales belowreflectvehiclesalesmadebyToyotatounconsolidatedentities(recognizedassalesunderToyota’s revenue recognitionpolicy),including salesto unconsolidateddistributorsand dealers.Vehicles soldby Daihatsu and Hino are included in the vehicle unitsales figures set forthbelow. YearEndedMarch31, 202020212022 Market Units%Units%Units% Japan .............................. 2,239,54925.0%2,125,12127.8%1,924,18523.4% North America ....................... 2,713,16530.32,312,79930.32,393,91229.1 Europe ............................. 1,029,24911.5959,36312.51,017,09912.4 Asia ............................... 1,600,34117.91,222,07316.01,542,91818.7 Other\* ............................. 1,372,39215.31,026,74913.41,352,31116.4 Total .................................. 8,954,696100.0%7,646,105100.0%8,230,425100.0% \*“Other” consists of Centraland South America, Oceania, Africa andthe Middle East, etc. The followingtablesetsforth Toyota’svehicleunitsales andmarketshare inJapan, NorthAmerica, Europe andAsiaonaretailbasisfortheperiodsshown.Eachmarket’stotalsalesandToyota’ssalesrepresentnew vehicleregistrationsintherelevantyear(exceptfortheAsiamarketwherevehicleregistrationdoesnot necessarilyapply).AllinformationonJapanexcludesmini-vehicles.Thesalesinformationcontainedbelow excludes unitsalesbyDaihatsu andHino, eacha consolidatedsubsidiaryof Toyota.Vehicle unitsales inAsia do not include sales in China. ThousandsofUnits YearEndedMarch31, 202020212022 Japan : Total market sales (excludingmini-vehicles) ............ 3,1852,9012,664 Toyota sales (retail basis,excluding mini-vehicles) ....... 1,5531,5051,361 Toyota market share ............................... 48.8%51.9%51.1% ThousandsofUnits YearEndedDecember31, 201920202021 NorthAmerica : Total market sales ................................. 20,37917,15717,861 Toyota sales (retail basis) ........................... 2,7572,4082,681 Toyota market share ............................... 13.5%14.0%15.0% Europe : Total market sales ................................. 20,75116,63816,870 Toyota sales (retail basis) ........................... 1,0899931,076 Toyota market share ............................... 5.3%6.0%6.4% Asia(excludingChina) : Total market sales ................................. 9,7268,1819,224 Toyota sales (retail basis) ........................... 1,3479691,189 Toyota market share ............................... 13.8%11.8%12.9% 15 Japan Japanisoneoftheleadingcountrieswithrespecttotechnologicaladvancementsandimprovementsinthe automotiveindustryandwillcontinuetodemonstratesuchstrength.Toyotastrivestoearncustomersatisfaction byintroducingproductsdistinctiveofJapan’smanufacturingabilitysuchasvalue-addedproductsincluding Lexusmodels,FCEVs,PHEVsandHEVs,vehicleswiththree-seatrowsandmini-vehicles.Toyota’s consolidatedvehiclesalesinJapaninfiscal2022was1,924thousandunits,90.5%ofthatofthepreviousfiscal year.Toyotaendeavorstosecureandmaintainitssignificantshareofandpositionatop,theJapanesemarket. Toyotaheldadomesticmarketshare(excludingmini-vehicles)onaretailbasisof48.8%infiscal2020,51.9% in fiscal 2021 and 51.1% in fiscal2022. AlthoughToyota’sprincipleistoconductproductioninregionswhereitenjoystruecompetitiveness,it considers Japan tobe the sourceof its good manufacturingpractices.Having 16 production sitesin Japan, Toyota supportsitsoperationsworldwidethroughmeasuressuchasthedevelopmentofnewtechnologiesandproducts, low-volumevehiclestocomplementlocalproduction,productionofglobalvehiclemodelswhichstraddle multiple regions and supportingoverseas factories. NorthAmerica TheNorthAmericanregionisoneofToyota’smostsignificantmarkets.Intheregion,Toyotahasinrecent years reorganized its productionstructure and made improvementsto its product lineup. IntheNorthAmericanregion,Toyotahasawideproductlineupineverysegment(excludinglargetrucks and buses).Toyotasold 2,394thousandvehicles inthe regionon aconsolidatedbasis infiscal 2022,representing approximately29%ofToyota’stotalunitsalesonaconsolidatedbasis.TheUnitedStates,inparticular,isthe largestmarketintheNorthAmericanregion,accountingfor87%ofToyota’sretailsalesintheregion.Sales figures for fiscal 2022 were 103.5%of that of the prior fiscalyear. Toyota’s North Americanproduction capacitiesinclude theproduction of vehiclemodels suchas the RAV4, Camry, Tacoma and Highlander through 13 manufacturingentities. InNovember2021,ToyotacreatedToyotaBatteryManufacturing,NorthCarolina(“TBMNC”)asthefirst planttoproduceautomotivebatteriesforToyotainNorthAmerica.Whenitcomesonlinein2025,itisexpected that TBMNC willhave fourproductionlines, eachcapable of deliveringenough lithium-ionbatteriesfor 200,000 vehicles—withtheintentiontoexpandtoatleastsixproductionlinesforacombinedtotalofupto1.2million vehicles per year. ToyotahasfiveresearchanddevelopmentcentersinNorthAmerica.Asforvehicledevelopment,the ToyotaTechnicalCenterspearheadsthedesign,planning,andevaluationofvehiclesandpartsastotheirability to meet customer needs. Europe Toyota’sprincipalEuropeanmarketsareGermany,France, theUnitedKingdom, Italy,SpainandRussia. In theEuropeanmarkets,asafull-lineupcarmanufacturer,Toyotaaimstoincreaseitsglobalvehiclesaleswitha focusonelectrifiedvehicles(HEVs,PHEVs,FCEVsandBEVs)thatsuittheneedsofcustomersandthe circumstancesofeachregion.Toyotasold1,017thousandvehiclesonaconsolidatedbasisintheregioninfiscal 2022, 106.0% of that of the prior fiscalyear. Intermsofproduction,tostrengthenitsbusinesssetupsothatitislesslikelytobeaffectedbyexchange rates,ToyotaproducesmodelssuchastheCorolla,YarisandC-HRlocallythroughsevenentitiesinEurope.In addition, Toyota isactively promoting productionand sales measures that meetlocal demand by strengthening its value chain including used car dealerships,after-sales servicesand finance and insurance services. 16 Asia Toyota’sprincipalAsianmarketsareThailand,India,IndonesiaandTaiwan.Toyotasold1,543thousand vehiclesonaconsolidatedbasisintheregioninfiscal2022(includingChina),126.3%ofthatofthepriorfiscal year. In lightofthe importanceoftheAsian marketthatisfurtherexpectedto growin thelong term,Toyota aims tobuildanoperationalframeworkthatisefficientandself-reliant,aswellasapredominantpositioninthe automotivemarketinAsia.ToyotahasrespondedtoincreasingcompetitioninAsiabymakingstrategic investmentsinthemarketanddevelopingrelationshipswithlocalsuppliers.Toyotabelievesthatitsexisting localpresence inthemarketprovidesit withanadvantage overnewentrantsto themarketandexpects tobeable to promptly respond to demand for vehiclesin the region. Intermsofproduction,ToyotamanufacturesmodelssuchastheHilux,Hiace,Corolla,CamryandVios through16entities.Toyota’splantsinThailand,notonlytomeetdomesticdemandbutalsotoserveasa production base for locations insideand outside of the ASEAN region. China ToyotahasbeenconductingoperationsinChinainlargepartthroughjointventures,anditssuccessin producingproductsthatmeetlocaldemandsandinestablishingitssalesandservicenetworkhassignificantly contributedtoToyota’sprofits.Basedonthefirmbusinessfoundationthatithasestablished,Toyotais conductingitsoperationswiththeaimofpromotingfurthergrowthandincreasingprofitabilitythroughfurther development of its sales and servicenetwork and expansion of its productlineup. Intermsofproduction,ToyotahasbeenconductingasignificantportionofitsChinabusiness,includingin relationtotheproductionandsalesofvehicles,throughjointventures.Toyotahastwomajorjointventure partnersinChina,namely,ChinaFAWGroupCorporationandGuangzhouAutomobileGroupCo.,Ltd.The jointventurewithChinaFAWGroupmanufacturesmodelssuchastheCorolla,ViosandRAV4,andthejoint venturewithGuangzhouAutomobileGroupCo.,Ltd.manufacturesmodelssuchastheCamry,Yarisand Highlander. TotalvehiclesalesintheChinesemarketwere25.17millionvehiclesin2021,approximatelythesameas the25.21millionvehiclesin2020.Inthismarket,Toyota’ssalesin2021were1.94millionvehicles,107.8%of thatofthepreviousyear.InthedomesticallyproducedpassengervehiclemarketinmainlandChina (20.78 millionvehicles), Toyotahad a marketshare of 9.3%.Toyota has been expandingthe distributionnetwork forlocallyproducedvehiclesincooperationwithChinaFAWGroupandGuangzhouAutomobileGroupunder thenamesTianjinFAWToyotaMotorCo.,Ltd.andGuanqiToyotaMotorCo.,Ltd.,respectively,andfor importedvehicles,ToyotahasalsobeenexpandingprimarilytheLexusbrandsalesnetwork.Toyotaplansto furtherincreasesalesbyexpandingthenumberofdealersanditsproductlineup.Inaddition,asthemarketin Chinadevelopsandbecomesmoresophisticated,Toyotaplanstopromoteso-called“ValueChain”businesses, suchasusedcarsales,services,financingandinsurance,soastocontributetothedevelopmentofamobility society. SouthandCentralAmerica,Oceania,AfricaandtheMiddleEast Toyota’sconsolidatedvehiclesalesinSouthandCentralAmerica,Oceania,AfricaandtheMiddleEast (collectively,the“FourRegions”)infiscal2022were1,352thousandunits,131.7%ofthatofthepriorfiscal year.Toyota’sprincipalmarketsintheFourRegionsareBrazilandArgentinainSouthandCentralAmerica, AustraliainOceania,SouthAfricainAfricaandSaudiArabiaintheMiddleEast.ThecoremodelsintheFour Regions are global models such as the Corolla,IMV (the Hilux) and Camry. 17 ![]() ToyotahassevenproductionbasesintheFourRegions.Intheseregions,whichareexpectedtobecome increasinglyimportanttoToyota’sbusinessstrategy,Toyotaaimstocontinuedevelopingnewproductswhich meet the specific demands ofeach region, increasing productionand promoting sales. Production Toyotaanditsaffiliatedcompaniesproduceautomobilesandrelatedcomponentsthroughmorethan50 overseasmanufacturingorganizationsin27countriesandregionsasidefromJapan.Facilitiesarelocated principallyinJapan,theUnitedStates,Canada,theUnitedKingdom,France,Turkey,CzechRepublic,Russia, Poland,Thailand,China,Taiwan,India,Indonesia,SouthAfrica,ArgentinaandBrazil.See“Informationonthe Company — Property, Plants and Equipment” for adescription of Toyota’s principalproduction facilities. Inpromotingasustainablegrowthstrategy,establishingasystemcapableofprovidingoptimalsupplyof products in the global market isintegral to Toyota’s strategy. Inlinewithitsbasicpolicyofmanufacturingincountriesorregionswherethereisdemandandwhere Toyotaistrulycompetitive,Toyotawillmakeefficientuseofandmaximizecapacityutilizationatitsexisting plantstorespondtotheexpandingmarketandwillcontinuetofocusonmakingefficientcapitalinvestmentsas necessary. Furthermore,Toyotawillcontinuetoplacetoppriorityonsafetyandqualityinstrengtheningtrue competitiveness with the aimof achieving sustainable growth. ThefollowingtableshowsToyota’sworldwidevehicleunitproductionbygeographicmarketforthe periodsshown.TheseproductionfiguresdonotincludevehiclesproducedbyToyota’sunconsolidatedaffiliated companies.The salesunitinformationelsewherein thisannualreportincludessales ofvehicleunitsproducedby theseaffiliatedcompanies.VehicleunitsproducedbyDaihatsuandHinoareincludedinthevehicleunit production figures set forthbelow. YearEndedMarch31, 202020212022 Japan ........................................................ 4,413,1623,948,3853,738,321 North America ................................................. 1,807,2891,641,8301,751,915 Europe ....................................................... 674,125641,830706,732 Asia ......................................................... 1,521,5511,014,9681,498,557 Other\* ....................................................... 403,495305,883462,698 Total ........................................................ 8,819,6227,552,8968,158,223 \*“Other” consists of Centraland South America and Africa. Toyotacloselymonitorsitsactualunitsofsale,marketshareandunitsofproductiondataandusesthis information to allocateresources to existing manufacturingfacilities and toplan for future expansions. See“—CapitalExpendituresandDivestitures”foradescriptionofToyota’srecentinvestmentsin completedplantconstructionsandforadescriptionofToyota’scurrentinvestmentsinongoingplant constructions. Distribution Toyota’sautomotivesalesdistributionnetworkisthelargestinJapan.AsofMarch31,2022,thisnetwork consistedof256dealersemployingapproximately110thousandpersonnelandoperatingapproximately 4.6 thousand salesand service outlets.TOYOTA Mobility Tokyo Inc. is the only dealer owned by Toyota and the rest are independent. 18 ![]() Toyotabelievesthatthisextensivesales networkofindependentlocalinterestshas beenanimportantfactor initssuccessintheJapanesemarket.AlargenumberofthecarssoldinJapanarepurchasedfromsalespersons whovisitcustomersintheirhomesoroffices.Inrecentyears,however,thetraditionalmethodofsalesthrough homevisitsisbeingreplacedbyshowroomsales,andthepercentageofautomobilepurchasesthrough showrooms hasbeen graduallyincreasing. Toyotaexpects this trendto continueeven after theCOVID-19 related crisis,andaccordinglyisworkingtoimproveitssalesactivitiessuchascustomerreceptionandmeticulous service at showrooms, as well as onlinesales, to increase customersatisfaction. Sales ofToyota vehicles inJapan had been conductedthrough foursales channels untilApril 2020, butfrom May 2020shiftedtoaframeworkwhereallofitsJapanese-marketvehiclemodelsaremadeavailablethroughall sales outlets inJapan. In addition, Toyota introduced theLexus brand to the Japanese market inAugust 2005, and currently distributesthe Lexus brandvehicles through a network of 181 new-vehiclesales outlets dedicatedto the Lexusbrandinordertoenhanceitscompetitivenessinthedomesticluxuryautomotivemarket.Thefollowing table provides informationon the dealer network as of March 31, 2022. Dealers Channel Toyota OwnedIndependentOutlets Toyota brand .............................1 company255 companies4,482 outlets Lexus brand ..............................22 outlets159 outlets181 outlets OutsideJapan,Toyotavehiclesaresoldthroughapproximately168distributorsinapproximately 204countriesandregions.Throughthesedistributors,Toyotamaintainsnetworksofdealers.Thechartbelow shows the number of Toyota distributorsas of March 31, 2022 by country and region: Country/RegionNumberofCountriesNumberofDistributors North America ............................................35 Europe ..................................................5329 China ...................................................14 Asia (excluding China) .....................................1913 Oceania .................................................1715 Middle East ..............................................1614 Africa. ..................................................5648 Central and South America ..................................3940 BEVStrategies OnDecember14,2021,ToyotaheldabriefingonitsBEVstrategywhereitannouncedthatitwouldbe boosting itsplans forBEV salesin 2030from 2million to3.5 millionunits, and thatLexus was aimingfor BEVs to accountfor100percentofitssalesinEurope,NorthAmerica,and Chinaby thesameyear,followed byBEVs accounting for 100 percent of itssales globally starting in 2035. Toyotabelievesthatachievingcarbonneutralitymeansrealizingaworldinwhichallpeoplelivingonthis planetcontinuetolivehappily.Wewanttohelprealizesuchaworld.Thishasbeenandwillcontinuetobe Toyota’swishandourmissionasaglobalcompany.Forthatchallenge,weneedtoreduceCO 2 emissionsas much as possible, as soon as possible. Energyplaysacriticalroleinachievingcarbonneutrality.Atpresent,theenergysituationvariesgreatly from region toregion. That is exactly why Toyota iscommitted to providing a diversifiedrange of carbon-neutral optionstomeetwhatevertheneedsandsituationsmightbeineverycountryandregion.Inthisdiversifiedand unchartedera,itisimportanttoflexiblychangethetype andquantityofproductsproducedwhilekeepinganeye on markettrends.Webelieve thatthereductionin leadtimesandhigh-mix,low-volumeproduction methodsthat we have cultivatedthrough the TPS, alongwith the steadyefforts ofJapanese manufacturing,will enable usto be competitive going forward. 19 Intermsofvehicleproduction,webelievethatallelectrifiedvehiclescanbedividedintotwocategories, dependingontheenergythattheyuse.Onecategoryisthatof“carbon-reducingvehicles.”Iftheenergythat powers vehiclesis notclean, theuse ofan electrifiedvehicle,no matterwhat typeitmight be, would notresult in zeroCO 2 emissions.Theothercategoryisthatof“carbon-neutralvehicles.”Vehiclesinthiscategoryrunon cleanenergyandachievezeroCO 2 emissionsinthewholeprocessoftheiruse.WeatToyotawillstriveto realize such vehicles. TheToyotabrandnowoffersmorethan100modelsofengine-onlyvehicles,HEVs,PHEVs,andFCEVsin morethan170countriesandregions.TheLexusbrandhasintroducedmorethan30modelsofengine-only vehicles,HEVs,andPHEVsinmorethan90countriesandregions.Furthermore,we plantoexpandtheoptions for carbonneutralvehicles byofferinga fulllineupofBEVs. Specifically,weplanto rollout30 BEVmodelsby 2030, offering a full lineup of BEVs globallyin both the passenger and commercialvehicle segments. TheDevelopmentandSupplyofBatteries While promoting afull lineupof electrifiedvehicles, we havealso been developing and manufacturinga full lineupofbatteries.Thesedevelopmenteffortsareorganizedbytypeofelectrifiedvehicle.ForHEVs,ourfocus is on poweroutput, orin otherwords, instantaneouspower,while, whenit comesto PHEVs andBEVs, our focus is on capacity or what can be called “endurance.” Intheareaofbatteries,Toyotahascontinuedtoresearch,develop,andproducebatteriesin-houseformany years.In1996,weestablishedwhatistodayPrimeEarthEVEnergyCo.,Ltd.Whilerefiningourtechnologies related to nickel-metalhydride batteries, we startedaccelerating the developmentof lithium-ion batteriesin 2003. Furthermore,sinceestablishingourBatteryResearchDivisionin2008,wehavebeenadvancingresearchon solid-statebatteriesandothernext-generationbatteries.In2020,weestablishedPrimePlanetEnergy& Solutions,Inc.toaccelerateintegratedeffortsinthebatterybusiness.Overthepast26years,Toyotahasmade nearly1trillionyenincapitalexpenditures,researchanddevelopmentexpensesandotherinvestmentsto producemorethan20millionbatteries.Webelievethatouraccumulatedexperienceisanassetthatgivesusa competitive edge.Going forward,we intend tomake a totalof 2 trillionyen in newcapital expenditures,research anddevelopmentexpensesandotherinvestmentsrelatingtobatteries,withtheaimofrealizingevenmore- advanced, high-quality, and affordablebatteries. AsforbatteriesforHEVs,wehavebeencontinuouslyupgradingnickel-metalhydridebatteriesand lithium-ionbatteries,takingadvantageoftheirrespectivecharacteristics.Inparticular,wetookonthechallenge ofdevelopingabipolarstructureinthecourseofcreatinganickel-metalhydridebatterytobeinstalledinthe Aqua,whichunderwentafull-scaleredesigncompletedinJuly2021,andhavebecomethefirstintheworldto commercializeabatteryofthiskindasanonboardbatteryfordriving.Comparedtothebatteriesusedinthe previousgenerationoftheAqua,theoutputdensityhasbeendoubled,givingthecarapowerfulacceleration sensation.Wearecurrentlyengagedindevelopmentaimedatcreatingmore-advancedlithium-ionbatteriesby the second half of the 2020s. Todevelopbatteriesthatourcustomerscanusewithpeaceofmind,wefocusonproducingbatteriesthat balancesfivefactors,whichstandoutfortheir“safety,”have“longservicelife,”boast“high-levelquality,”and are“goodyetaffordable”aswellascapableof“outstandingperformance.”Forexample,alongerservicelife affectsavehicle’sresidualvalue.Intermsofcruisingrange,highenergydensityandhigh-levelperformanceare alsonecessary.Ontheotherhand,over-emphasisonafastchargingspeedmayincreasethedangerof overheatingorevenfireandthusdecreasebatterysafety.Thisconcepthasremainedunchangedsincebatteries wereinstalledinthefirst-generationPrius,anditappliedtoallthebatteriesinallofourelectrifiedvehicles. AlthoughToyotaiscommittedtobalancingthefivefactors,toomuchemphasisononecouldbedetrimentalto theothers.Thatiswhywebelievethattheintegrateddevelopmentofbatteriesandvehiclesisessential.How batteriesareuseddependsonhowthevehiclesinwhichtheyareinstalledareused.Forexample,the environmentsinwhichvehiclesareoperateddifferaccordingtoeachvehicle’smodeofuse—forexample,ifit 20 isbeingusedasataxiorforcommuting—aswellasgeographiclocation,andthesefactorswillaffectsuch conditionsaschargingfrequencyandbatterytemperature.Accordingly,wecarryoutmockdrivingteststhat assumeadiverserangeofvehicleusageinordertoobtaindataonactualusageenvironmentsandprovide feedbacktoinformtheevaluationanddesignofbatteries.Todeterminethebalancingpointofthefivefactors discussedabove,itisnecessarytoobtaindrivingdatathatincludesdrivingconditionsandusageenvironments, find outwhatthe conditionswouldbe likeifbatterieswere usedinstead, andrepeatedlyverify whatis happening insidethebatteries.SuchsteadyandearnesteffortsforbothbatteriesandvehiclesarethesecretbehindToyota’s advantages. TopopularizeBEVs,westrivetoreducecostsviatheintegrateddevelopmentofvehiclesandbatteriesto provideBEVsatareasonableprice.Tostartwith,weaimtoreducethecostsofbatteriesthemselvesby30%or morebydevelopingmaterialsandstructures.Then,forthevehicle,weaimtoimprovepowerconsumption, whichisanindicatoroftheamountofelectricityusedperunitofdistance,by30%,startingwiththeToyota bZ4X.Improvedpowerefficiencyleadstoreducedrequirementsforbatterycapacity,whichwillresultinacost reduction.Throughthisintegrateddevelopmentofvehiclesandbatteries,weaimtoreducethebatterycostper vehicle by 50% compared to the Toyota bZ4X in thesecond half of the 2020s. Inthenearfuture,theenergydensityofconventionallithium-ionbatteriesperunitofweightisexpectedto seeitspeak.Accordingly,vigorouseffortsarenowunderwaytodevelopnext-generationlithium-ionbatteries, aimingtoachievelongerservicelife,greaterenergydensity,morecompactsize,andlowercosts.AtToyota,we pushaheadwiththedevelopmentofsuchbatteriesbyemployingthefollowingthreeapproaches.Forliquid batteries,whichuseliquidelectrolyte,wearetakingonthechallengeofrealizing“materialevolution”and “structuralinnovation.”Atthesametime,weareaimingtocommercializeall-solid-statebatteriesthatemploy solidelectrolyteinsteadofliquidelectrolyte.Assuch,ourwide-rangingdevelopmenteffortsareaimedat creatingthreetypesofbatteries,andbythesecondhalfofthe2020s,wehopetoimprovethecharacteristicsof eachtypesothatwecanprovidebatteriesthatcanbeusedwithpeaceofmind.Withregardtoall-solid-state batteries,wepromotedevelopmentaimedatachievinghigheroutput,longercruising range,andshortercharging times.InJune2020,webuiltavehicleequippedwithall-solid-statebatteriesandconductedtestrunsonatest coursetoobtaindrivingdata.Basedonthatdata,wecontinuedtomakeimprovements,andinAugust2020,we obtained licenseplate registrationforvehicles equippedwith all-solid-statebatteries andconducted testdrives. In thecourseofthedevelopmentprocess,wediscoveredthatthefastmovementofionswithinall-solid-state batteriescouldpossiblyenablethemtoachievehigheroutput.Ontheotherhand,itwasrevealedthatthese batteriestendtodeterioratefasterduetotheformationofgapswithinthesolidelectrolyte,posinganissueof shorterservicelife.Therefore,weneedtocontinuedevelopment,mainlyofsolidelectrolytematerials.Weplan tostarttheintroductionofall-solid-statebatterieswiththoseforHEVsasthesevehiclesrequirehighoutput.We have alsoaccumulateda wealthofknow-howregardingHEVs.We intendtoreleasethesebatteriestothe market promptly in order to gain customerfeedback and continue to improvethem. WiththerapidexpansionofEVusage,weareworkingtobuildaflexiblesystemthatcanstablysupplythe requiredvolumeofbatteriesattherequiredtimewhilemeetingtheneedsofvariouscustomersineachregion aroundtheworld.Tothisend,weintendtoestablishneededtechnologiesbyconductingacertainamountof in-houseproductioninthepursuitofourbatterydevelopmentconceptofachievingbatteriesthatcanbeused withpeaceofmind.Wewillthencooperateandcollaboratewithpartnerswhounderstandandwillputinto practiceourconcept.Wewillalsoproceedwithdiscussionswithnewpartnersinsomeregions.Ourapproachto productioncanbedescribedas“startingupusingsmallbasicunits.”Thisapproachdrawsonlessonslearned fromtheglobalfinancialcrisis.Itisdifficulttonoticelatentriskswhenproductionisgrowing.Becauseofthis, wehavetotakearisk-controlledapproachtogrowthbasedonToyota’sphilosophyof“makingonlywhatis needed,whenitisneeded,andonlyintheamountneeded.”Forexample,theproductionofall-solid-state batterieswillstartwithbatteriesforHEVs,whichwehavebeendevelopingforyearsandthatrequireasmall batteryvolume,ratherthanbuildingamassiveproductionlineforbatteriesforBEVs,whichrequirealarger volumeofbatteries.Thiswillnotonlyenableustoacceleratethereleaseoftheproductsbutalsopositionusto betterfocusonimprovingmanufacturingtechnologies.Moreover,Toyota’sstrategyof“startingupusingsmall 21 basicunits”isalsomeanttoenablethecompanytoswiftlyrespondtochangesarisingfromthearrivalofanew technology,whichoftenoccursinthecourseofaproductcyclewhenthemanufacturingcostsfortheoldmodel come down and stabilize. In thefieldofFCEVs,wereleasedthe completelyredesignedMiraiinDecember2020. Premisedontheuse ofanFCEVsystem,thedevelopmentofthesecondgenerationMiraiwaspromotedtodeliverafuturistic premiumcarthatwillbegenuinelyappreciatedandsoughtafterbyourcustomers.Specifically,westroveto deliveravehiclethatcanwindrivers’heartsduringandafterdriving,ifnotfromthemomentwhentheyfirst catchsightofit.Moreover,Toyotaaimstobecomeafuelcell(“FC”)systemsuppliersupportingtherealization ofahydrogen-poweredsociety.Inlinewiththisaim,weprovideavarietyofbusinessoperatorswithacompact FCsystemmodulepackagethatwehavedeveloped.ThispackageconsistsofFCstacksforthesecond- generation Mirai,which boast higherperformance, aswell as air supply, hydrogen supply, cooling, powercontrol andotherFCsystem-relatedparts.InNorthAmerica,wehaveunveiledanewprototypeforanFCcommercial heavy-dutytruckthatusesthesecond-generationFCsysteminstalledonthenewMirai.Thistruckboasts considerablyimprovedperformance,includingmorepowerfulaccelerationandflexibledrivingresponse. Furthermore,havingattainedamaximumloadedweightof80,000pounds(approximately36tons)andcruising rangeof300miles(morethan480kilometers),thetruckisdesignedtoaccommodatearangeofcommercial truckneeds.WeintendtoconducttheverificationtestingofthisnewFCtruckinactualcargotransport operations. HydrogenEngine Toyota Motor Corporationannounced in April2021 that it is workingon the technological developmentof a hydrogenengine.WhileFCEVsaredrivenbyelectricmotorspoweredusingelectricitygeneratedbyachemical reactionbetweenhydrogenandairborneoxygen,vehiclespoweredbyhydrogenenginesgettheirpowerby directlyburninghydrogenasfuelinamodifiedconventionalgasolineenginesetup.Thefuelis100-percentpure hydrogen,unmixedwithgasoline.Asnofossilfuelsareburned,exceptforthecombustionofminuteamountsof engineoilduringdriving,hydrogenenginevehiclesemitnearlynoCO 2 wheninoperation.Torealizecarbon neutrality,itwillbeimportanttoincreasepeople’soptionswithoutlosingsightofthegoal.Webelievethat hydrogenenginetechnology,whichdrawsonmanydecadesoftriedandtestedinternalcombustionengine technology, hasthe potentialto contributesignificantlytocarbon neutrality;itis alsoone option forsafeguarding engine-related employmentin Japan’s automobile industry. At the end of2020, Master DriverMorizo (PresidentAkio Toyoda, using hisrace driver name) swiftlycame to a decision:he would enter the2021 Super TaikyuSeries race drivinga prototype hydrogen enginevehicle, and therebydevelopthevehicleonthefrontlineofmotorsports.Developmentinmotorsportstakesplaceonamuch shorter timelinethanit doesfor mass-producedautomobiles.It isalso moreflexible.To realize carbonneutrality, wedeterminedthatmotorsportsisthemostappropriatevenuefordevelopinghydrogenengines.Torealize carbonneutrality,weneedtoexpandoptionsforcreating,distributing,andusingenergy,andcooperationwitha widerangeofcompanieswillbeindispensable.Throughdevelopingthehydrogenengineatthe2021Super Taikyu Series, we gained many friends with therequisite will and passion forsuch collaboration. IncooperationwithKawasakiHeavyIndustries,SUBARUCORPORATION(“SUBARU”),MazdaMotor Corporation(“Mazda”),andYamahaMotorCompany(“Yamaha”),weannouncedthatwewouldtryto (1)enter racesusingcarbon-neutralengines(Mazdausingnext-generationbiofuelsandSUBARUandToyotatakingon thechallengeofracingintheSuperTaikyuSeries2022usingbiomass-derivedsyntheticfuel)and(2)consider usinghydrogenenginesfortwo-wheeledvehicles(KawasakiHeavyIndustriesandYamahainitiating considerationofthepossibilityofjointresearch).Inthisway,webelievethattheautomobileindustrywill becomeapacesetterpromotinginitiativesthatplaytoindustrystrengthswhileaimingfortherealizationofa carbon-neutralsociety.Throughthissuchintentionalapplicationofpassionandaction,thefuturevisionforthe next10to20yearswillevolve.Withcourageand determination,wecanshapethisfuturevisionandcontinueto take on challenges and go beyond the industryborders going forward. 22 SoftwareandConnectedInitiatives AmidthiseraidentifiedbyCASE,automobilemanufacturingrequirestechnologicaldevelopmentinsuch newfieldsas“electrification,”“automateddriving,”and“connectivity.”Amongthesefields,softwareis becominganimportantfactorindeterminingproductappeal.Today’scarsareequippedwithmorethan50 electronic controlunits, or ECUs, anduse as many as 1,000 chips. Furthermore,society has entered theage of the internetofthings,andthingsbeingconnectedhasbecomethenorm.Carsarealsoequippedwithcommunication devices,furtheradvancingtheirelectronification,andthevolumeofsoftware(linesofcode)usedincarsisthus growingeverlarger.Facingthismajortransformationintheautomobileindustry,Toyotaispayingparticular attentiontohowcellularphoneshavechangedovertime.Astheshoulderphoneevolvedintothefeaturephone andthenintothesmartphone,thephone,whichhadbecomecommoditized,becamelinkedwithinformation, creatingnew valuethroughnew experiencesandquicklyspreadaround theworld.This changewassupportedby softwareandconnectedtechnologies.DuetotheCASErevolution,carsarebecomingmoredeeplyconnectedto communitiesandpeople’slivesthroughinformation,becomingamoreintegralpartofsocialsystems.Atthe sametime,Toyotawillaimtohavecarsbemorelinkedtoinformation,andthroughthemovementofpeople, goods, and things, provide new value through new experiencesand by bringing excitement to customers. When itcomes tothe manufacturingofcars, Toyotahas a basicstancethat hasbeen handeddown internally overtheyears:westicktoourprinciplesandinternalizeimportantelementsbyattemptingtofirstachievethem onourown.Wealsocontinuetointroduceimprovementsonthefrontlinestoenhanceourcompetitive advantage.Sinceitsfounding,Toyotahasbeenproducingvariousproductionequipmentin-houseasnecessary. Inthe1990s,wepursuedthein-housedesignofECUsandestablishedanelectronicsplant,achipplant,anda batteryplant.TheseeffortseventuallyledtothecommercializationofthePrius,theworld’sfirstmass-produced HEV.Toyotahasalwaysmaintainedastrongawarenessoftherealworldregardlessoftheeraathand,pursued ourprinciples,andpromotedinternalization.Thatiswhyintheareaofsoftwareandconnectedtechnologies,we establishedtheToyotaResearchInstitute(“TRI”),WovenPlanetHoldings,andToyotaConnected,anditiswhy weareworkingonthedevelopmentofthee-Palette,theconstructionofWovenCityasatownforpilottesting, and the development of the Arene platformand other technologies. To date,Toyotahassold10millionLexusand Toyotavehiclesthatareconnectedcars,mainlyinJapan,the United States,Europe,andChina.Toyota’svisionof theconnectedcaris notsimplyoneof connectingthecarto the internet.Rather, itis aboutprovidingcustomers withemotionalexperiences throughthe movementof people, goods,andactivities—avisioncenteredonpeoplethatwecall“humanconnected.”Toachievethis,weare operating acall centeras apoint ofcontactwith customers;the ToyotaSmartCenter, whichprovides avariety of services;andtheToyotaBigDataCenter,whichutilizesvehicleinformationgatheredfromcars.Inaddition,we haveestablishedtheMobilityServicePlatform(“MSPF”)toprovidemobilityservicesandarepromoting collaborationwithserviceproviders.Connectedcarsandconnectedtechnologieswillbeappliedtoavarietyof areas,andweanticipatethatwhichistobeconnectedwillexpandtoincludepeople,cars,communities,and society(business-to-society,orBtoS).Toyotawillhandletheinformationgatheredfromcustomersandvehicles withcare,utilizingitforthehappinessofcustomersandthedevelopmentofsocietywhilecreatingnewvalue from experiences centered on mobility. Withthee-PaletteBEVusedintheOlympicVillagefortheOlympicandParalympicGamesTokyo2020, ourgoalwastocreatemobilitythatintegratescarsandinformationandthatcoordinateswiththecommunity. DuringtheGames,49,000athletes,staff,andvolunteersusede-Palette.Wealsodevelopedafleetmanagement system fore-Palettesbased onthe principlesof theTPS to ensureeffective, efficient,and accurateoperation. The systemmonitorsthevehiclesremotelyandoperatestheminajust-in-timefashionaccordingtotheconditionsof thesurroundingenvironmentandthenumberofpassengers.AllofthiswasrealizedviatheMSPFthatToyota hasbeenbuildingandrefining.Inthefuture,weexpectthatthesetechnologieswillbeappliedtotheSienna Autono-MaaSminivanbeingdevelopedintheUnitedStatesforuseasarobotaxi,andthattheMSPFwillbe used not only for automated vehicles,but also for regular commercialvehicles and logistics. 23 Inthisway,softwarehasthepowertopromptlyturnideasintoproducts.TheaimofArene,thevehicle developmentplatformthatToyotaandWovenPlanetarefocusedon,istocontinuefundamentallychangingthe developmentofsoftwareforvehicles.ThemostnotablecharacteristicsofArenearethatitabsorbsthe differencesinvehiclehardwarespecifications(abstraction)andemployshardwareabstractionlayersthatenable hardwaretobecontrolledwithuniversalmethods.This,inturn,enablestheindependentdevelopmentof hardwareandsoftwareaswellasthereuseofsoftware.Areneleveragesthestrengthsofhardwarecultivatedby Toyota to achieve the development of safe,high-quality, and advanced software. Becauseincreasinglycomplicatedsoftwaredevelopmentisbecomingabottleneckforcars,too,thereisa needforarevolutionaryvehicleoperatingsystemthatcansolvetheseissues.Thevehicleoperatingsystemwill achieveTPSinsoftwaredevelopmentaswell,andwemustcontinuetorealizecombinationsofgoodhardware andsoftware.Forexample,whendevelopingautomateddrivingsoftware,theon-boardsoftwareneededfor automateddrivingactuallymakesuponlyasmallportionofit;therestcomprisesvarioustools,suchasdata processingbythemachinelearningsystem,mounting,codereview,softwareupdates,loganalyses,and simulations.Basically,mostofthesoftwarewedevelopisused“off-board”(thatis,outsidevehicles)orthrough thecloud.Areneisusedtodevelopframeworksforvehicledevelopmentanddevelopmentenvironmentsbased onthoseframeworksaswellastobuildecosystemsformobilitydevelopment.Usingindustry-leadingsoftware technologies, we will strive to continueproviding privacy-conscious, secure,and safe cars. Furthermore,applicationdevelopmentonAreneisalsoeasy.Webelievepartnercompanieswillbeableto programapplicationsmoreefficientlyusingArene’sapplicationprogramminginterface(amechanismthatcan share software functions) and softwaredevelopment kit, which includessimulation environments. Inthis way, we believedevelopmentonArenewillswiftlyrealizecommercializationandenablesuserstosharethefunof providingnewideasthatappealtocustomerswhilemeetingtheexpectationsofworldwidepartnersand developers as well as the Toyota brand’shigh-quality standards. Theportionofacar’svalueattributabletosoftwareisgrowing.Byinternalizingthepartscentralto Toyota’sfuture,wewillstrategicallyensurethestrengthsofourhardwareandsoftwarethroughinternal production,compartmentalizedevelopmentundertakenwithpartners,andacceleratethespeedofmass production.Fortheseinitiatives,wearebuildingasoftwaredevelopmentstructureona3,000-personscalefor Toyota, Woven Planet,and ToyotaConnected andon a18,000-person scalewhen includingassociatesaccounted forbytheequitymethod.Wearealsostrengtheningtheteamsresponsiblefortheinternalproductionand development of software. Through connected technologies,we can contributeto carbon neutralityby gaininga better understandingof thecharacteristicsofeachregionintheformofdataandcombiningthisknowledgewithrealizedtechnologies. Forexample,accordingtomarketdata,inJapan,theengineisturnedoffforhalfofalldrivingtimeinhybrid electricvehicles,orHEVs,whileforplug-inhybridelectricvehicles,orPHEVs,theengineisturnedoffforas muchas80percent.WebelieveHEVsandPHEVscanevolveintoenvironment-friendlyvehiclestoaneven higher degreebyupgradingtheswitchingcontrolofenginesandelectricmotors.Inotherwords,thereisroomto expand the possibilities of bothHEVs and PHEVs. One mechanismthatwebelievewillenablethisisgeofencingtechnology.Aportmanteauofgeographyand fence,geofencingreferstothecombinationofnavigationandcloudtechnologiestoenabletheautomatic switchingofengineandmotorfunctionsinrealtimetoreflectdrivinglocationsanddrivingtimesbasedon geographicdata.Forexample,inzero-emissionregulationregionsthatlimitvehicleoperationtoonlyBEVs during certaintimeperiods,geofencingwould automaticallycontrol thefunctionsofHEVs and PHEVsto ensure compliance with regulations. Furthermore,geofencingwouldenableanticipatoryeco-drivingthatswitchesovertoBEVdrivingas appropriatebypredictingthedrivingburdenbasedonthedrivingenvironmentuptothedestination.Webelieve utilizingconnectedtechnologiestocontrolHEVsandPHEVsmoreintelligentlywillmakeitpossibletofurther 24 promoteenergysavingincars.ThenewNXfeaturesamechanismthatswitchestoHEVcontrol.Weexpectthat in thenearfuturewewillbeable toconductan over-the-air(“OTA”) updateofits softwaresothatit willbeable to use geofencing technology. InOctober2021,inadvanceofintroducinggeofencingtechnologythatisunderdevelopmentwithaneye towardpracticalapplication,weintroducedanticipatoryeco-driving(anticipatoryEV/HEVmodeswitching control)intheJapanesemarket.ItrealizeshighlyefficientdrivingbyautomaticallyswitchingbetweenEVand HEV modes depending on the charge left in the batteryand the road conditions and characteristics. OTA refers to usingwireless connectionsto keep the software (controlsoftware and high-precisionmapping software)updatedtothelatestversions.Thismeansthatafteracar’spurchase,newfunctionscontinuetobe addedanditsperformancecontinuestobeenhanced,therebycontinuingthevehicle’sevolutionintoasaferand more secure car that has thelatest driving assistancetechnology. FortheLSandMirailaunchedinJapaninApril2021,wehaveincludedcarsthatfeaturethelatest AdvancedDrivefunctionofthenewestsophisticateddrivingassistancetechnologiesdevelopedbyToyota Teammate/LexusTeammate,andtheyareeligibleforrelatedsoftwareupdatesonanongoingbasis.TheGR Yaris“MorizoSelection”isanewinitiativebasedonGRYaristhatcombinestheROOKIERacingprivateer teamrunbyMorizo(theracingdrivernameforAkioToyoda,ourPresident)andToyota’sKINTOcar subscription.Wewillcontinuetoevolveeachcartobestmatcheachcustomerbyreflectingupdates(whichare basedonfeedbackanddatagainedinracesparticipatedinbyMorizoandROOKIERacing)andpersonalization (whichisbasedoncustomerdrivingdata)inthesoftwareinGRGarageshopsthroughwiredconnections(not OTA). Furthermore, we offerbetter drivingmethods and supportthe enhancementof driving skills.Through this, we strive to realize cars thatevolve to suit people by updating tothe latest software in linewith each customer. Carshaveawiderangeofapplications,frompassengercarstoMaaSandcommercialvehicles,andwewill continuetoexpandtheregionswhereweoperategoingforward.Needsareincreasinglydiversifying,andcars canbeusedinamyriadofwaystomeetthem.Oureffortsthusencompasspeople’sproblemsandsocialissues, smiles and joy, and needed technologicaldevelopment. Theautomobileindustrymustmovepeoplewhilealsoachievingcoexistencewithlocalcommunities.For thefutureandforchildren,theToyotafamilyofcompaniesisworkingonproducinghappinessforallthrough freedomofmovementforallandtheprovisionofexcitingexperiences.Wewillcontinuetoenhancethe excitementthatcanbeexperiencedbybeingabletomovebycombiningrealcarsandthepowerofsoftware.If wecombineinnovationwithtechnology,weexpectthatthevalueofcarswillbeenhancedfurther.Wewillalso contributetothefurtherdevelopmentofsocietybygoingbeyondthebordersofcarsandcontributingto community building and the creationof society-wide platforms. EffortsinRealizingaSafeMobilitySociety According toa2018WorldHealth Organizationsurvey,1.35millionpeople peryeardiein trafficaccidents worldwide.WhilethenumberofdeathsduetotrafficaccidentshasbeengraduallydecreasinginJapan,the UnitedStates,andEurope,ithasbeenincreasingelsewhere,especiallyinemergingnations,asimprovementsin safetyeducationandtransportationinfrastructurehavenotkeptupwithincreasesincarsontheroad.Unless countermeasuresareimplemented,trafficaccidentcausalitiesarepredictedtobecometheseventhleadingcause ofdeathgloballyby2030.ForToyotatoachieveitsultimategoalofeliminatingtrafficaccidentcausalities,the developmentofsafevehiclesisofcourseimportant,butitisalsoessentialtoeducatepeople,includingdrivers andpedestrians,andtoensuresafetrafficinfrastructure,includingtrafficsignalsandroads.Toachieveasafe mobilitysociety,Toyotabelievesitwillbeimportanttoimplementanintegratedthree-partinitiativeinvolving people,vehicles,andthetrafficenvironment,aswellastopursuereal-worldsafetybylearningfromactual accidentsandincorporatingthatknowledgeintovehicledevelopment.“IntegratedSafetyManagementConcept” is Toyota’sbasic philosophybehind itstechnologiesfor eliminatingtrafficcasualtiesand ismoving forwardwith development. 25 Toyotaprovidesoptimizeddriversupportateverystageofdriving,fromparkingtonormaloperation,the momentbeforeacollision,duringacollision,andpost-collisionemergencyresponse.Wealsoaimtoenhance safetybystrengtheninginter-systemcoordination,ratherthanconsideringeachsystemseparately.Thesearethe approaches behind our Integrated SafetyManagement Concept. BasedonthisIntegratedSafetyManagementConcept,Toyotaisworkingonactivesafety,passivesafety, emergency response and initiativesfor people. Withregardstoactivesafety,theToyotaSafetySensesystempackagesmultipleactivesafetyfunctions basedaroundthreemajorfunctionsconsideredeffectiveinreducingserioustrafficaccidentscausingdeathor injury. ThesearePre-CollisionSafety,which helpsavoid andmitigatedamage fromcollisionswith carsahead or pedestrians; LaneDeparture Alert,which contributes topreventing accidentscaused by leavingthe lane oftravel; andAutomaticHighBeam,whichhelpsensureclearsightinfrontofthevehicleatnight.In2018,weexpanded the system’s drivingassistance functionsto offerthose such as nighttime pedestrianand daytime cyclist detection andLaneTracingAssist.Sinceitsmarketlaunchin2015,ToyotaSafetySensehasbeeninstalledinmorethan 30millionvehiclesgloballyasofMarch2022.ToyotaSafetySenseisnowavailableonnearlyallpassengercar models(asstandardoranoption)intheJapanese,UnitedStates,andEuropeanmarkets.Ithasalsobeen introducedinatotalof120countriesandregions,includingsuchkeymarketsasChina,otherselectAsian countries, the Middle East, Australiaand the Central and South America region. Anotherimportantconceptispassivesafety.Inthecontextofautomobiles,passivesafetycombinesabody structure thatabsorbscollision energywith supportto protectvehicleoccupants to minimizecollisiondamage. In 1995,inthepursuitofworld-leadingsafety,Toyotacreateditsownstringentinternaltargetrelatedtopassive safetyperformancecalled“GlobalOutstandingAssessment(“GOA”)”anddevelopedacollision-safetybody structureandpassengerprotectiondevices.Sincethen,tomaintainitsleadershipinthisfield,Toyotahas continuedtoevolveGOA, strivingtoimprovethereal-worldsafetyperformanceofitsvehiclesinawidevariety of accidents. Inaddition,toanalyzevehicle-relatedinjuries,ToyotacollaboratedwithToyotaCentralR&DLabs.,Inc.to developtheTotalHumanModelforSafety(“THUMS”),avirtualhumanbodymodel.THUMSisbeingusedin theresearchanddevelopmentofavarietyofsafetytechnologies,includingseatbelts,airbags,andothersafety equipment,aswellasvehiclestructuresthatmitigateinjuriesinaccidentsinvolvingpedestrians.Toyotamade THUMSfreelyavailablethroughitswebsiteinJanuary2021inthehopethatitwillbeusedbymorepeople across more applications. Every minutecounts inthe responseto an accidentor medicalemergency. As away of using connectivityto supportsafety,in2000,ToyotarolledoutitsHELPNET ® service,anemergencyreportingsystemutilizingthe G-Bookinformationnetwork(nowT-Connect)andG-LinkinJapan.Intheeventofanaccidentormedical emergency,HELPNET ® contactsadedicatedoperatorwhowillarrangefortherapiddispatchofanemergency vehiclefromthepoliceorfiredepartment/emergencyservices.Specifically,HELPNET ® automaticallycontacts anoperatorwhentheairbagsdeployandsupportsD-CallNet ® ,aserviceavailablethroughoutJapanthatmakes quickdeploymentdecisionsforairambulances.Thisserviceisprovidedbysendingvehicledatatothe HELPNET ® centerfromanon-boarddatacommunicationmodule(“DCM”).DCMisinstalledasastandard feature in all new passenger vehiclesin Japan. Toyotabelievesthateducationisanimportantpartofpreventingtrafficaccidents.Topreventaccidents involvingsmallchildren,incooperationwithToyotadealersacrossJapan,Toyotahasbeendonatingtraffic safetyteachingmaterialstokindergartensandnurseryschoolsnationwidesince1969.In2020, werevampedour educationalwebsiteforchildrenandguardians,andweuseourwebsiteandsocialmediatoraiseawarenessof traffic safety while walkingand cycling. Fordrivers,weperiodicallyholdtheToyotaDriverCommunicationsafedrivingtechniqueseminarat ToyotaSafetyEducationCenterMobilitas,onthegroundsofFujiSpeedway.Additionally,instepwiththe 26 government-promotedSafetySupportCarprogram,weareworkingwithToyotadealersacrossJapantorollout safetyandassuranceactivitiesunderthename“SupportToyota”tohelprealizecarownershipexperiencesthat offer safety and assurance. CommercialSectorInitiatives OnMarch24,2021,Toyota,IsuzuandHinoagreedtoformanewallianceincommercialvehiclesand establishedCJPTtopromotethisalliance.CASEtechnologiescanonlycontributetosocietyoncetheybecome widespread.CommercialvehiclescanplayimportantrolesinCASEtechnologydissemination,astheytravel longdistancesforextendedperiodsoftimetosupporttheeconomyandsocietyandcanbeeasilylinkedwith infrastructuredevelopment.By combiningthe commercialvehiclefoundations cultivatedbyIsuzu andHino with Toyota’sCASEtechnologies,thecompaniesaimtoacceleratethesocietalimplementationandadoptionof CASE technologies andservices and therebyhelp address socialissues andcontribute to therealizationof carbon neutrality. Specifically,thethree companiesarejointlyworkingon thedevelopmentofBEVs andFCEVs, autonomous drivingtechnologies,andelectronicplatformscenteredonthedomainofsmallcommercial-purposetrucks. WhileworkingtogetheronBEVsandFCEVstoreducevehiclecosts,thecompaniesplantoadvance infrastructure-coordinatedendeavors,suchasintroducingFCEVtruckswiththegoalofimplementinga hydrogen-basedsocietyinJapan’sFukushimaPrefecture,therebybuildinganimplementationmodelforacity withapopulationof300,000peoplebeforeendeavoringtoapplythismodelinthemanysimilar-sizedcities nationwide.Furthermore,workingtowardcarbonneutrality,inadditiontopromotingthespreadofelectrified vehiclesthataresuitedtologisticsuses,thecompanieswillworktoincreasetransportefficiencybasedonthe JITlogisticsapproachofdeliveringwhatisneeded,whenitisneeded,intheamountneeded,expandingthe range of the options for achievingcarbon neutrality. Workingtogether,webelieveIsuzuandHinoareabletoreachmostofJapan’struckcustomersandlearn abouttheirrealneedsandconcerns.Distributionbytrucksaccountsforthevastmajorityofoverlandlogistics, andthetransportationsector(includingbusesandtaxis)involvesasignificantnumberofpeople.Commercial vehiclesaccountforasignificantamountofthetotaldistancetraveledbyautomobilesandCO 2 emissionsfrom automobilesinJapan.Furthermore,thelogisticscompaniesoperatinginJapancurrentlyfacenumerous managementissues,suchashigh-frequencydistribution,harshworkenvironments,laborshortages,andrising burdens.ThepowerofCASE,centeredonconnectedtechnologiesandservices,isexpectedtodeliver improvements that help resolvethese issues. Solving thesekinds ofsocial issuesis notsomethingthat one companycan accomplishalone. It isnecessary toseekawiderangeoflike-mindedpartners,applytheirdifferentstrengths,andworktogetherforthesakeof thosesupportingtransportationandforsociety.As solutionstosuchissuesprogress,weexpectworkinoverland transporttobecomemoreappealing,leadingtoanincreaseinthenumberofdriversandotherlogistics professionals. OnJuly21,2021,SuzukiandDaihatsujoinedCJPT.AsmanyofJapan’sroadsaresonarrowthatonly mini-vehiclescaneasilyusethem,mini-vehiclesarecollectivelyakindof“people’scar,”madetosuittheroads of Japan.They area practicalandsustainablelifeline forpeopleacross thecountry, andhave continuedto evolve alongsidechanginglifestyles.Similarly,commercialmini-vehiclesareabletoeffectivelycoverareasthattheir smallsizemakesaccessible,supportinglogisticsoperationsmainlyinthelastmile.Formorethan60years, SuzukiandDaihatsuhavebeenprotectingtheselifelinesanddrivingthemarketforward.Webelievethatby working together,thesetwocompanieswillbe abletoaccess therealneedsand concernsofa significantnumber of Japan’s mini-vehicle users. WeexpectthatexpandingCJPTtoincludemini-vehicleswillenableefficient,integratedlogistics,linking the main arteriesof logistics(handled by trucks)with thecapillaries oflogistics (thedomain of commercialmini- 27 vehicles)whileleveragingconnectedtechnologiesandabundantdata.Thisnewcollaborationisalsoaimedat promotingthebroaderuseofaffordableadvancedsafetytechnologiesandelectrificationbyleveragingSuzuki and Daihatsu’s strengths in high-quality,low-cost manufacturingand Toyota’s CASE technologies. Amidpressuretoenhancecostcompetitiveness,maintainingacompetitiveedgeintheareaofcommercial vehicleelectrificationisincreasinglychallenging.Competitivenessincreasinglyhingesonconnected technologiesandusesofbatteriesandothertechnologies.Accordingly,manufacturersmuststepuptheunique added value that they offer. Inadditiontoelectrification,improvingtransportefficiencywillcontributegreatlytorealizingcarbon neutrality.ThefivecompaniesthatmakeupCJPTplantolinktheirconnectedtechnologyplatformstobuilda morecomprehensiveplatformforcommercialvehiclesandleveragetheTPS,oneofToyota’sstrengths,to realizeJITlogisticsandincreasetransportefficiency,therebyhelpingtoreduceCO 2 emissions.Usingconnected technologiestolinklogisticsfromthemajorarteriestothefinecapillaries,fromproducerstoconsumers,using trucklogisticsandlocalmini-vehicle-baseddistribution,JITlogisticshavethepotentialtolowerrunningcosts forlogisticsvendorsandsustainablyimprovelogistics.Goingforward,webelievethefivecompanieswill deepen their collaborationwhile openlyconsidering cooperation with otherlike-minded partners, workingto help fulfilltheautomotiveindustry’smissionofhelpingimprovepeople’slivesandleaveabetterJapanandabetter planet for the next generation. WovenCity TheWovenCityproject,firstannouncedinJanuary2020,officiallybrokegroundonFebruary23,2021. WovenCitywilldemonstratecuttingedgetechnologiesinsuchareasasautomateddriving,MaaS,personal mobility,robotics,smarthomes,andartificialintelligenceinareallivingenvironment.Byrapidlyimplementing developmentanddemonstrationcyclesoftechnologiesandservicesinthishuman-centeredcity,weaimto continuetoproducenewvalueandbusinessmodelsbyutilizingthemobilityof“information,”“goods,”and “people” to support daily life. WovenCitywillbeconstructedonthesiteofToyotaMotorEastJapan’sformerHigashi-FujiPlant,which wasapillarofproductionforToyotafor53years,startingin1967.Atitspeak,theplanthad2,000employees, andatotalof7,000individualsworkedthereoveritshistory,producingsuchvehiclesastheToyotaCentury, Toyota’sflagshipchauffeurcarinfusedwithToyotacraftsmanship,andtheJPNTaxi,acarthatrequiresmany times the durability of anordinary passenger car. TheconceptforWovenCitycanbetracedbacktotheGreatEastJapanEarthquakein2011.Asour President,AkioToyodasoughttocreatejobsfortheregion’speople,whowerehithardestbythedisaster,by creatingathirdbaseofoperationsintheTohokuregion.Guidedbyhisstrongleadership,Toyotaestablished ToyotaMotorEastJapan,Inc.in2012.However,thisalsoledtothedifficultdecisiontoclosetheHigashi-Fuji Plant.LookingforawaytocarryontheHigashi-FujiPlant’slegacyofmanufacturingtohelpcreatefuture mobility forthenext50 years,he arrivedat theidea oftransformingthe siteintoa connectedcity asa large-scale demonstration experiment. UndertheWovenCityproject,weareimaginingthelifeofeachresidentasweseektodesignacitythat willmostmakepeoplehappy.Workingwithresearchers,engineers,andscientists,weintendtodemonstrate futuretechnologiesinboththevirtualandtherealworldandtorollouttheresultingtechnologiesandproducts developedaroundtheglobe.WovenCitywillbeaconstantlyimproving,ever-evolvingcityrootedinToyota’s kaizenapproach—thinkingthatthereisalwaysabetterway.Wewillworkwithpartnerswhoshareour aspiration in this quest to realizebetter living and mobilityfor all. WovenCitywillcomprisethreetypesofroads,woventogetherlikewarpandweft:pathsforpeople,roads sharedbypeopleandpersonalmobilitydevices,androadsforautonomousvehicles.Aimedatrealizingsafe 28 mobility,itwillbeasortoftestcoursefortheintegratedthree-partdevelopmentofautomateddrivingatthe levelsofpeople,vehicles,andthetrafficenvironment.Initsearlystages,weanticipateWovenCitywillhouse around360residents,comprisingmainlyseniors,families,andinventors.Inthefuture,webelievethecitywill havemorethan2,000residents,includingToyotaemployees,demonstratingtechnologiesinmobilityandawide rangeofotherfields,fromlogisticstoenergy,foodandagricultureasitgrowsintoanenvironmentconduciveto the timely generation of new inventionsthat address social issues. Thename“WovenCity”comesfromToyota’soriginsinautomaticlooms.SakichiToyoda,thefounderof theToyotafamilyofcompanies,wasdriventoinventanautomaticloomoutofadesiretomakehismother’s workeasier.Wehaveguardedandnurturedthisspiritofservicetootherseversince.WovenCitywilltakeup this commitment fromthe Higashi-Fuji Plant, growing and evolving asthe foundation for a new era at Toyota. FinancialServices Toyota’sfinancialservicesincludeloanprogramsandleasingprogramsforcustomersanddealers.Toyota believesthatitsabilitytoprovidefinancingtoitscustomersisanimportantvalue-addedservice.InJuly2000, Toyotaestablishedawholly-ownedsubsidiary,ToyotaFinancialServicesCorporation,tooverseethe managementofToyota’sfinancecompaniesworldwide,throughwhichToyotaaimstostrengthentheoverall competitivenessofitsfinancialbusiness,improveriskmanagementandstreamlinedecision-makingprocesses. Toyotahasexpandeditsnetworkoffinancialservices,inaccordancewithitsstrategyofdevelopingauto-related financingbusinessesinsignificantmarkets.Accordingly,Toyotacurrentlyoperatesfinancialservicescompanies in 42 countries and regions, which support itsautomotive operations globally. Toyota’ssalesrevenuesfromitsfinancialservicesoperationswere¥2,324.0billioninfiscal2022, ¥2,162.2billioninfiscal2021and¥2,193.1billioninfiscal2020.Whiletherewerenegativefactorsinfiscal 2022,suchastightglobalsemiconductorsupplyrelativetodemand,supplyconstraintsonnewcarsduetothe impactofCOVID-19,andincreasedcompetitionwithotherfinancialinstitutions,Toyota’sbusinesssawsteady growthmainlyduetotheaccumulatedbalanceofearningassetsresultingfromenhancedused-vehiclefinancing, higherused-vehiclepricesintheUnitedStatesandotherregions,lowerinterestratesworldwideandother measures.Undersuchcircumstances,asaresultofToyota’scontinuedcollaborationwithdealersinvarious countriesandregionsandeffortstoexpandproductsandservicesthatmeetcustomerneeds,Toyota’sshareof financingprovidedfornewcarsalesofToyotaandLexusvehiclesinregionswhereToyotaFinancialServices Corporation operatesremainedatahigh levelofapproximately30%,and thebalanceof earningassets continued tosteadilyincrease,withtheexceptionofsomecountries.Inaddition,Toyotaismakingeffortstoprovideboth itscustomersanddealerswithstablefinancialservicesbydiversifyingitsfundingmethodsinrecentyears,such asissuingGreenBondsinadditiontousingalreadyexistingmeansascommercialpaper,corporatebonds,bank borrowings,ABCP(AssetBackedCommercialPaper)andABS(AssetBackedSecurities).Furthermore,Toyota continuedtoperformdetailedcreditappraisalsandservecustomersbymonitoringbaddebtandloanpayment extensions,andthepercentageofcreditlossesremainedlow,at0.23%and0.17%infiscal2021and2022, respectively.Toyotacontinuestoworktowardsimprovingitsriskmanagementmeasuresinconnectionwith credit and residual value risks. ToyotaMotorCreditCorporationisToyota’sprincipalfinancialservicessubsidiaryintheUnitedStates. Toyotaalsoprovidesfinancialservicesin41othercountriesandregionsthroughvariousfinancialservices subsidiaries, including: •Toyota FinanceCorporation in Japan; •Toyota CreditCanada Inc. in Canada; •Toyota FinanceAustralia Ltd. in Australia; •Toyota KreditbankGmbH in Germany; •Toyota FinancialServices (UK) PLC in the United Kingdom; 29 •Toyota Leasing(Thailand) Co., Ltd. in Thailand; and •Toyota MotorFinance (China) Co., Ltd. in China. ToyotaMotorCreditCorporationprovidesawiderangeoffinancialservices,includingretailfinancing, retailleasing,wholesalefinancingandinsurance.ToyotaFinanceCorporationalsoprovidesarangeoffinancial services,includingretailfinancing,retailleasingandcreditcards.Toyota’sotherfinancesubsidiariesprovide services including retailfinancing, retail leasingand wholesale financing. The KINTO subscriptionservice, whichstartedinJapan in2019 inresponse tothe shiftfrom“owning” cars to“using”cars,hasbeensteadilyenhancingitsservicelineupandgainingbrandawareness.InEurope,full serviceleasingisbeingmadeavailableinwiderareas.Furthermore,Toyotadevelopedandprovidescustomers withthepaymentapplication“TOYOTAWallet”asaplatformthatcontributestoimprovingtheconvenienceof customers’ daily payments andcreating a foundation for a mobilitysociety. FinancereceivablesforallofToyota’sdealerandcustomerfinancingoperationswere¥21,764.4billionas ofMarch31,2022,representinganincreaseof13.3%ascomparedtothepreviousyear.Themajorityof Toyota’sfinancialservicesareprovidedinNorthAmerica.AsofMarch31,2022,55.0%ofToyota’sfinance receivableswerederivedfromfinancingoperationsinNorthAmerica,13.3%fromEurope,12.9%fromAsia, 7.3% from Japan and 11.5% from otherareas. Approximately40%ofToyota’sunitsalesintheUnitedStatesduringfiscal2022includedafinanceor leasearrangementwithToyota.BecausethemajorityofToyota’sfinancialservicesoperationsarerelatedtothe saleofToyotavehicles,adecreaseinvehicleunitsalesmayleadtoacontractionofToyota’sfinancialservices operations. Theworldwidefinancialservicesmarketishighlycompetitive.Toyota’scompetitorsinretailfinancingand retail leasingincludecommercialbanks,creditunionsand otherfinancecompanies. Commercialbanksand other automobilefinancesubsidiarycompaniesservingtheirparentautomobilecompaniesarecompetitorsofToyota’s wholesalefinancingactivities.CompetitorsinToyota’sinsuranceoperationsareprimarilynationalandregional insurance companies. ForinformationonToyota’sfinancereceivablesandoperatingleases,pleasesee“OperatingandFinancial Review and Prospects — Operating Results — FinancialServices Operations.” RetailFinancing Toyota’sfinancesubsidiariesacquirenewandusedvehicleinstallmentcontractsprimarilyfromToyota dealers.Installmentcontractsacquiredmustfirstmeetspecifiedcreditstandards.Thereafter,thefinance companyretainsresponsibilityforinstallmentpaymentcollectionsandadministration.Toyota’sfinance subsidiariesacquiresecurityinterestsinthevehiclesfinancedandcangenerallyrepossessvehiclesifcustomers failto meettheircontractualobligations.Almost allretailfinancingsarenon-recourse,whichrelievesthe dealers fromfinancialresponsibilityintheeventofrepossession.Inmostcases,Toyota’sfinancesubsidiariesrequire theirretailfinancingcustomerstocarryautomobileinsuranceonfinancedvehiclescoveringtheinterestsofboth the finance company and the customer. Toyota has historicallysponsored, and continuesto sponsor, special leaseand retail programs by subsidizing below market lease and retailcontract rates. RetailLeasing Intheareaofretailleasing,Toyota’sfinancesubsidiariesacquirenewvehicleleasecontractsoriginated primarilythroughToyotadealers.Leasecontractsacquiredmustfirstmeetspecifiedcreditstandardsafterwhich 30 thefinancecompanyassumesownershipoftheleasedvehicle.Thefinancecompanyisgenerallypermittedto takepossessionofthevehicleuponadefaultbythelessee.Toyota’sfinancesubsidiariesareresponsiblefor contractcollectionandadministrationduringtheleaseperiod.Theresidualvalueisnormallyestimatedatthe timethevehicleisfirstleased.Vehiclesreturnedtothefinancesubsidiariesattheendoftheirleasesaresoldby auction.Forexample,intheUnitedStates,vehiclesaresoldthroughanetworkofauctionsites,aswellas throughtheInternet.Inmostcases,Toyota’sfinancesubsidiariesrequirelesseestocarryautomobileinsurance on leased vehicles covering the interestsof both the finance companyand the lessee. WholesaleFinancing Toyota’sfinancesubsidiariesalsoprovidewholesalefinancingprimarilytoqualifiedToyotadealersto financeinventoriesofnewToyotavehiclesandusedvehiclesofToyotaandothers.Thefinancecompanies acquiresecurityinterestsinvehiclesfinancedatwholesale.Incaseswhereadditionalsecurityinterestswouldbe required,thefinancecompaniestakedealershipassetsorpersonalassets,orboth,asadditionalsecurity.Ifa dealer defaults, the financecompanies have the right to liquidateany assets acquired and seeklegal remedies. Toyota’sfinancesubsidiariesalsomaketermloanstodealersforbusinessacquisitions,facilities refurbishment,realestatepurchasesandworkingcapitalrequirements.Theseloansaretypicallysecuredwith liens on real estate, otherdealership assets and/or personalassets of the dealers. Insurance ToyotaprovidesinsuranceservicesintheUnitedStatesthroughToyotaMotorCreditCorporation’swholly ownedsubsidiary,ToyotaMotorInsuranceServices,Inc.(“TMIS”)anditswhollyownedinsurancecompany subsidiaries.Theirprincipalactivitiesincludemarketing,underwritingandclaimsadministration.TMISalso providescoveragerelatedtovehicleserviceagreementsthroughToyotadealerstocustomers.Inaddition,TMIS alsoprovidescoverageandrelatedadministrativeservicestoaffiliatedcompaniesofToyotaMotorCredit Corporation. Toyota dealers in Japan and inother countries and regions also engagein vehicle insurance sales. OtherFinancialServices ToyotaFinanceCorporationlauncheditscreditcardbusinessinApril2001andbeganissuingLexuscredit cards in 2005 whenthe Lexus brand was introducedin Japan. As of March 31, 2022, Toyota Finance Corporation has 15.3 million card holders (includingLexus credit card holders). AllOtherOperations Inadditiontoitsautomotiveoperationsandfinancialservicesoperations,Toyotaisinvolvedinanumberof othernon-automotivebusinessactivities.Salesrevenuesfortheseactivitiestotaled¥1,129.8billioninfiscal 2022, ¥1,052.3 billion in fiscal 2021, and ¥1,504.9 billionin fiscal 2020. GovernmentalRegulation,EnvironmentalandSafetyStandards Toyotaisinevitablyrequiredtocomplywiththeregulationsappliedtoitsproductsrelatingtotheemission levels,fueleconomy,noise,safetyandsoon.Inaddition,Toyotaissubjecttolawsinvariousjurisdictions regulating thelevels ofpollutants generatedby its plants.Toyota has incurredsignificantcosts in complyingwith theselawsandregulationsandexpectstoincursignificantcompliancecostsinthefuture.Toyota’smanagement views leadership in environmentalprotection as an importantcompetitive factor in themarketplace. InternationalHarmonizationofVehicleRegulations TheWorldForumforHarmonizationofVehicleRegulations(“WP.29”)oftheUnitedNationsEconomic CommissionforEurope(“UNECE”)hasdevelopedcertaininternationalrulesandregulationssuchastheUN 31 Regulations(“UNR”)underthe1958AgreementandtheGlobalTechnicalRegulations(“GTR”)underthe1998 Agreementandhasbeenworkingtopromoteinternationalharmonizationofthetechnicalprescriptionsforthe constructionandapprovalofwheeledvehicles.TheUNRhasbeenadoptedinjurisdictionssuchasJapan,EU andRussia,andeachparticipatingparty’stypeapprovalsaremutuallyrecognizedunderthe1958Agreement. The parties tothe 1998 Agreementinclude the U.S., Chinaand India inaddition to Japan,the EU and Russia, and 22GlobalTechnicalRegulationshavebeenestablishedtodate.Astheprogressoftheinternational harmonization oftechnical prescriptionswilllead to thereduction of thevariations inproduct specificationsfrom country to country, it is expected tolead to greater efficiencyin Toyota’s product development. VehicleEmissions JapaneseStandards The AirPollutionControl ActofJapan and theRoad TransportVehicleAct and theAct ConcerningSpecial MeasuresforTotalEmissionReductionofNitrogenOxidesandParticulateMatterfromAutomobilesin SpecifiedAreasregulatevehicleemissionsinJapan.Inrecentyears,inadditiontothestrengthenedregulations onparticulatemattersemittedfromgasoline-fueledvehicles,ascanbeseenfromtheadoptionoftheWorldwide HarmonizedLightVehiclesTestCycle(“WLTC”)drivingcyclesandtheintroductionoftheRealDriving Emission(“RDE”),morestringentregulationshavebeendecidedtobeintroducedtomatchtheEuropean Standards.Moreover,boththeNoiseRegulationActandtheRoadTransportVehicleActprovidefornoise reduction standards on automobilesin Japan. U.S.FederalStandards The federal CleanAir Act directsthe EnvironmentalProtection Agency (“EPA”)to establish and enforceair qualitystandards,includingemissioncontrolstandardsonpassengervehicles,light-dutytrucksandheavy-duty vehicles.ManufacturersarenotpermittedtosellvehiclesintheUnitedStatesthatdonotmeetthestandards.In March2014,theEPAfinalizednew“Tier3”tailpipeemissionandevaporativeemissionstandardsforpassenger vehicles,light-dutytrucks,medium-dutypassengervehiclesandsomeheavy-dutyvehicles.Undertherule, tailpipeemissionstandardsforvolatileorganiccompounds,carbonmonoxide,nitrogenoxides,andparticulate matter,aswellasstandardsforevaporativeemissionsandguaranteedusefullife(whichrelatestoavehicle’s ability to meetemission limitsover time),would become increasinglystringent in phases from2017 to 2025. The rule would bring federal emissionstandards for these pollutantsin line with California’semission standards. The new Tier 3 rule also required reductionsin gasoline’s sulfur contentbeginning in 2017. CaliforniaStandards UnderthefederalCleanAirAct,theStateofCaliforniahasbeenpermittedtoestablishitsownvehicle emissioncontrolstandardsifitreceivesawaiverfromtheEPAthatallowstheCaliforniastandardstopreempt less-stringentfederalstandards.TheEPAgrantedsuchapreemptionwaivertoCaliforniainJanuary2013.The waiver provides a legal basis forCalifornia’s Advanced Clean Cars (“ACC”) program. InJanuary2012,theCaliforniaAirResourcesBoard(“CARB”)adoptedtheACCprogram.TheACC program,developedincoordinationwiththeEPAandthefederalNationalHighwayTrafficSafety Administration(“NHTSA”),includesLow-EmissionVehicle(“LEV”)regulations,knownastheLEVIII regulations,thatreduceemissionsofsmog-causingpollutants(volatileorganiccompounds,carbonmonoxide, nitrogen oxidesand particulatematter)and greenhousegases from passengercars andlight-duty trucksfor model years2015to2025.Theregulationsincludestandardsforevaporativeemissionsandguaranteedusefullifeas well. TheACCprogramalsoincludesamandateforzero-emissionvehicles.Pursuanttothemandate,CARB requires thataspecifiedpercentageof amanufacturer’spassengercarsandlight-dutytruckssold inCaliforniabe 32 “zero-emissionvehicles”(vehiclesproducingnoemissionsofregulatedpollutants)(“ZEV”),aswellaspermits certainadvancedtechnologyvehiclessuchasPHEVs,andalternativefuelvehiclesthatmeet“partial zero-emissionvehiclesrequirements,”tobegrantedpartialqualificationasBEVsorFCEVs.Toyota’sMIRAI qualifies as azero-emission vehicle.The currentPrius Prime hasbeen certifiedas a partial zero-emissionvehicle. Toyotaintendstocontinuetodevelopadditionaladvancedtechnologiesandalternativefueltechnologiesthat will allow other vehicles to qualifyas zero-emission vehiclesor partial-zero-emissionvehicles. TheAdvancedCleanCarsII(“ACCII”)regulationswillgobeforetheCARBonJune9,2022.ACCII includesLEVIVregulationsthatwouldfurtherreduceemissionsfromlight-andmedium-dutyvehicles,andan expanded mandate thatwould increase thepercentage of ZEV vehicles that manufacturersmust sell in California. The new LEV IV regulations and expanded ZEV mandate would apply to model years2026 – 2035. Californiahas adoptedregulationsthatrequire thatOn-Board Diagnostics(“OBD”)systems beincorporated intothecomputersofvehiclessoldinCalifornia.OBDsystemsmonitorcomponentsthatcanaffecttheemission performanceofavehicleand,ifaproblemwithacomponentisdetected,illuminatesawarninglightonthe vehicle’sinstrumentpanel.Thesystemsalsostorethemalfunctioninformationinthecomputertofacilitate repairs. California’s OBD regulationsare the most stringent inthe world. OtherStates’Standards Seventeenstates(Colorado,Connecticut,Delaware,Maine,Maryland,Massachusetts,Minnesota,New Jersey,NewMexico,NewYork,Nevada,Oregon,Pennsylvania,RhodeIsland,Vermont,Virginiaand Washington)haveadoptedregulationssubstantiallysimilartoCalifornia’slow-emissionvehiclerequirement, and 15 of these have adopted California’szero-emission vehicle requirement. CanadianStandards CanadahasfinalizedvehicleemissionstandardsequivalenttothefederalstandardsintheUnitedStatesin October2014,inresponsetothestrengtheningofthefederalvehicleemissionstandardsintheUnitedStates applicabletomodelyears2017to2025.Furthermore,certainCanadianprovincesarecurrentlyconsidering enacting theirownregulations. OnJanuary 11,2018, theMinistry ofSustainableDevelopment, Environmentand theFightagainstClimateChangeoftheProvinceofQuebecissuedregulationsonzero-emissionvehicles includingBEVs,FCVsandPHEVs,amongothers.InNovember2018,thepremierofBritishColumbia announcedthatthegovernmentwouldintroducelegislationconcerningzero-emissionvehicles(indicatingthe phase-inintroductionstartingfrommodelyear2020).Canadaalsoadoptedamorestringentfuelrule,whichis basedonthefuelruleintheUnitedStates,thatreducesrefineries’annualaveragesulfurconcentrationof gasoline to 10mg/kg from 2017 with a new additionof credit system to securecompliance. EuropeanStandards In2007,theEuropeanParliamentadoptedmorestringentemissionstandardsforpassengervehiclesand lightcommercialvehicles.Theeffectivedateforphasinginthesestricterstandardsforpassengervehicleswas September 2014 for Euro 6. For light commercialvehicles, the effectivedate was September 2015 for Euro 6. The primary focusof Euro 6 isto limitfurther emissionsof diesel-poweredvehicles and bringthem down to alevelequivalenttogasoline-poweredvehicles.TheEUisnowimplementingtheRDEregulations,which requiremanufacturerstoconducton-roademissionstestsusingportableemissionstesterstodemonstrate compliance.SinceSeptember2017,manufacturershavebeenrequiredtoreducethedivergencebetweenthe regulatorylimittestedinlaboratoryconditionsandthevaluesofRDEtests,andthisdivergencefactorwasmade morestringentforallnewvehicleseffectiveJanuary2021.TheEUisnowalsoimplementingtheWorldwide harmonizedLightvehiclesTestProcedure(“WLTP”),whichwasintroducedonSeptember1,2017.TheOBD regulationshavealsobeentightenedintermsofbothsubjectpartsandregulatoryvalues.EffectiveJanuary1, 2019,theEUimplementedanimprovedWLTPthatpurportstoeliminatetestflexibilitiesandintroduces on-board fuel and energy consumption monitoringdevices. 33 DiscussionsarecurrentlyunderwayforEuro7,whichwillbemorestringentthanEuro6.TheEuropean Commission expects to publish the Euro7 proposed limits in the thirdquarter of 2022. ChineseStandards Thenext-generationemissionsregulationsforpassengervehicles,orLevel6EmissionsRegulations(China 6),wereissuedasGB18352.6-2016attheendof2016,pursuanttowhichtighterrequirementswillbe implementedintwosteps,dependingontheregulatedsubjectsandtheimplementationtiming.Specifically, China 6awillapplytoallmodelsto besoldor registeredinJuly2020 andbeyond,and China6b willapplytoall modelstobesoldorregisteredinJuly2023andbeyond.China6bwillalsointroducetheRDERegulations adoptedunderEuro6.TheOBDregulationshavealsobeentightenedintermsofbothsubjectpartsand regulatoryvalues. Withrespecttofuels inthemarket,the qualitystandardsandtheimplementationfrom January 2019 for China6 gasolinefueland China 6diesel fuelhavebeen provided inGB17930-2016 and GB19147-2016 so astokeepupwiththe implementationtiming ofChina6 emissionsregulations.Moreover,forareaswhere the airqualityimprovementisanurgentnecessity,China6isscheduledtobeimplementedfromJuly2019aheadof theimplementationthroughoutChina.DiscussionsarecurrentlyunderwayforLevel7EmissionsRegulations (“China 7”), which will be more stringentthat the China 6 Emissions Regulations. Forheavy-dutydiesel-poweredcommercialvehicles,pursuanttoGB17691-2005,theChinaVEmissions RegulationsarebeingimplementedfromJuly2017.WiththeestablishmentofGB17691-2018,whichprovides next-levelChinaVIEmissionsRegulations(“ChinaVI”),ithasbeendecidedthatChinaVIawillbe implementedfromJuly2021andChinaVIbfromJuly2023(theseregulationswillapplytogas-fueledvehicles andpublicvehiclesforurbanareasearlierthanthosedates).Forheavy-dutygasoline-poweredcommercial vehicles,pursuanttoGB14762-2008,LevelIVEmissionsRegulations(“ChinaIV”)applytonewmodelsafter July2012.Afterthefirstdaytheregulationisimplementedtoanewmodel,allnewmodelsreleasedduringthe followingone-yearperiodalsobecomesubjecttotheregulation.Tighteningofthenext-generationemissions regulations(ChinaVandChinaVI)iscurrentlyconsideredforheavy-dutygasoline-poweredcommercial vehicles. StandardsofOtherCountriesorRegions Inparticular,inIndia,giventheworseningairpollution,inDecember2015,theSupremeCourtbannedthe registrationofdieselcarswithenginesthataretwolitersorlargerintheNationalCapitalRegion,includingthe Delhimetropolitanarea.InAugust2016,thebanonregistrationwasliftedontheconditionthatadepositequal to1%ofthevehicle’sretailpriceistobepaidtotheEnvironmentPollutionControlAuthority.Furthermore,the governmentacceleratedtheimplementationsofBS-6(equivalenttoEURO6)to2020.Moreover,Thailandhas also decided to introduce regulationsequivalent to Euro 5 and Euro 6. VehicleFuelEconomy JapaneseStandards TheActonRationalizingEnergyUserequiresautomobilemanufacturerstoimprovetheirvehiclestomeet specified fueleconomystandards.Fuel economystandards areestablishedaccordingto thetypes ofvehicles, and arerequiredtobemetbyeitherfiscal2011(April2010-March2011),fiscal2016(April2015-March2016), fiscal2021(April2020-March2021),fiscal2023(April2022-March2023),fiscal2026(April2025-March 2026)orfiscal2031(April2030-March2031).From2020,iftheWLTCmodeisappliedasavehicleemissions test cycle, fuel economy testmust be also conducted based on the WLTC mode. U.S.Standards The FederalMotorVehicleInformationand CostSavingsAct requiresautomobilemanufacturerstocomply withCAFEstandards.Amanufacturerissubjecttosubstantialcivilpenaltiesif,inanymodelyear,itsvehicles 34 donotmeettheCAFEstandards.ManufacturersthatexceedtheCAFEstandardsearncreditsdeterminedbythe differencebetweentheaveragefueleconomyperformanceoftheirvehiclesandtheCAFEstandards.Credits earnedforthefivemodelyearsprecedingthecurrentmodelyear,andcreditsprojectedtobeearnedforthenext three model years, can be used to meetCAFE standards in a current model year. InDecember2011,theEPAandtheNHTSAissuedajointproposedruletofurtherreducegreenhousegas emissionsandimprovefueleconomyforpassengercars,light-dutytrucksandmedium-dutypassengervehicles formodelyears2017through2025.Pursuanttotherule,whichwasfinalizedinAugust2012,thesevehicles wouldberequiredtomeetanestimatedcombinedaverageemissionlevelof163gramsofcarbondioxideper mile inmodel year2025, equivalentto 54.5milesper gallonif theserequirementsare met throughimprovements infueleconomystandards.Atthesametime,theNHTSAissuedCAFEstandardsforpassengervehiclesand light-dutytrucksthatwouldrequiremanufacturerstomeetanestimatedcombined averagefueleconomylevelof 49.6 miles per gallon in model year2025. Under the TrumpAdministration,the EPA and the NHTSA proposedless stringentgreenhouse gas emission standardsandCAFEstandards,andthewithdrawalofCalifornia’swaivertoissueitsown,morestringent greenhousegasemissionstandardsundertheLEVIIIprogram.However,undertheBidenAdministration,the EPAandtheNHTSAwithdrewtheseproposedgreenhousegasemissionstandardsandCAFEstandards,andin March 2022, the EPA reinstated California’sauthority to enforce itsown greenhouse gas emissions standards. OnDecember30,2021,theEPAissuedafinalrulerevisingpassengercarandlight-dutytruckgreenhouse gasemissionsstandardsformodelyears2023through2026.Thenewrule,whichisbasedonPresidential ExecutiveOrder13990,reducesgreenhousegasemissions,year-over-year,by10%formodelyear2023,5%for 2024,6.6%for2025,andmorethan10%for2026.Basedonthesereductions,theindustry-wideaverage emissiontargetsforpassengercarsandlight-dutytrucksisprojectedbytheEPAtobe161gramsofcarbon dioxide per mile in model year2026. On March 31, 2022, theNHTSA issued a final rule revising passengercar and light-duty truck fueleconomy standardsformodelyears2024through2026.AswiththeEPA’sgreenhousegasemissionrule,thisnewruleis basedonPresidentialExecutiveOrder13990.Thenewruleestablishesstandardsthatwouldrequireanindustry- widefleetofapproximately49mpgforpassengercarsandlightdutytrucksinmodelyear2026.Thisistobe achievedbyincreasingfuelefficiency,year-over-year,by8%formodelyear2024,8%for2025,and10%for 2026. EuropeanStandards IntheEU,theaveragecarbondioxideemissionslimitforlightcommercialvehiclesiscurrently147grams per kilometerand for passengervehicles 95 grams per kilometer.Manufacturers failingto meet their targetsincur penaltiesof € 95fromthefirstgramofexceedanceonwardsin2019andbeyond.Startingin2021,these emissions targets are testedusing the WLTP. InApril2019,theEuropeanParliamentandtheCounciladoptednewcarbondioxidestandardsforvehicles andlightcommercialvehiclesfortheperiodafter2020.AverageemissionsoftheEUfleetofnewvehiclesand lightcommercialvehiclesin2025mustbe15%lowerthanin2021,andby2030,emissionsmustbereduced furtherto37.5%and31%of2021levelsforvehiclesandlightcommercialvehicles,respectively.From2025,a creditingsystemwillbeintroducedtorelaxa manufacturer’sspecificcarbondioxideemissionstargetswherethe manufacturer produces numbersof “zero and low-emission vehicles”above specified benchmarks. Toachieveaclimate-neutralEUby2050andanintermediatetargetofatleast55%netreductionin greenhouse gasemissions by2030, theEuropean Commissionproposedin July 2021 substantiallymore stringent carbondioxideemissionstargetsforvehiclesandlightcommercialvehicles,aspartofits“Fitfor55”package. Theproposalstrengthensthe2030targetsfrom37.5%toa55%reductionfornewpassengercarsandfrom31% 35 toa50%reductionfornewlightcommercialvehicles,bothrelativetothe2021baselinediscussedabove.In addition,theproposalintroducesanew2035carbondioxidetargetsetata100%reductionfornewvehiclesand vans,againrelativetothe2021baseline.The2025targetremainsunchangedata15%reductionforbothnew vehicles and vans. The proposal has not yet beenfinalized. AnEUdirectiveonmotorvehicleairconditioningunitsrequiresmanufacturerstoreplacetherefrigerants with that having a lower global warming impactfor all newly registeredvehicles starting in January2017. ChineseStandards FuelconsumptionregulationsarebeingimplementedpursuanttotheChineseNationalStandards(“GB”), andthemanufactureandsaleofvehiclemodelsnotmeetingtheseregulationsareprohibited.Forlight-duty passengervehicles,GB27999-2011wasissued.IntheseLevel3FuelConsumptionRegulationsforpassenger cars,theregulationframeworkwassubstantiallyrevised,suchastheintroductionofnewregulationsrequiring automobilemanufacturerstomeetstandardsofcorporateaveragefuelconsumptionacrossmodelsinadditionto existingregulationsrequiringeachmodeltomeetconsumptionstandards.Furthermore,inordertoachievethe nationaltargetforaveragefuelefficiencyfor2020,thefollowingmorestringentfuelconsumptionregulations have been enactedandenforced. First,GB19578-2014, which has beenenacted to strengthenregulationsfor each model,isbeingappliedtonewmodelsafterJanuary2016.Second,GB27999-2019,whichhasbeenenactedas Level5FuelConsumptionRegulationsforpassengervehiclestostrengthencorporateaverageregulations,has beenineffectsince2021.Inaddition,Level5FuelConsumptionRegulationsforpassengervehiclesarebeing examinedasmorestringentnext-generationfuelconsumptionregulations.Forlight-dutycommercialvehicles, GB20997-2015wasenacted,whichfurtherappliedLevel3FuelConsumptionRegulationstoallnewvehicles fromJanuary2018andiscurrentlybeingenforced.Moreover,theimplementationoftheLifeCycleAssessment (LCA),whichcomprehensivelyregulatestheamountofcarbondioxideemittedduringthevehicle manufacturing,use,anddisposalprocesses,amongothers,isbeingconsideredearlierthanintherestofthe world. Withrespecttolargecommercialvehicles,pursuanttoGB30510-2018,Level3FuelConsumption RegulationsapplytonewvehiclesfromJuly2019andarecurrentlybeingenforced.Inaddition,inaneffortto furtherstrengthenfuelconsumptionregulationsforthenextgeneration,Level4FuelConsumptionRegulations are currently being considered. VehicleSafety JapaneseStandards Japanhasbeenparticipatinginthe1958AgreementoftheUNandhasanumberoftechnicalstandardsthat are harmonized with the UN Regulations. Furthermore,unique toJapan,the safetystandardsforautomateddrivingsystems wereestablishedin March 2020,requiring,inadditiontoacertainlevelofperformanceofautomateddrivingsystem,theinstallationofan eventdatarecorderandcybersecuritymeasuresagainstunauthorizedaccess.Inaddition,acertificationprogram wasintroducedinApril2020withrespecttothesystemtocontrolsuddenaccelerationbymixingupthegasand brake pedals as well as the collisiondamage mitigation brakesystem. Inaddition,fuel-cellvehiclesusingcompressedhydrogenaresubjecttotheapprovalandcontrolunderthe High Pressure Gas Safety Act in addition to theRoad Vehicles Act. U.S.Standards IntheU.S.,inlightoftheExecutiveOrderissuedbyPresidentTrumponJanuary30,2017,fewsafety standards providingnew technicalrequirementshave beenissued.With respectto automateddrivingvehicles, on 36 January8,2020theTrumpAdministrationandtheU.S.DepartmentofTransportationreleasedEnsuring AmericanLeadershipinAutomatedVehicleTechnologies:AutomatedVehicles4.0(“AV4.0”).AV4.0unified effortsacross38Federaldepartments,independentagencies,commissions,and PresidentialExecutiveOfficesin providinghighlevelguidancetostateandlocalgovernmentsandotherstakeholders.AV4.0alsoestablished Federalprinciplesforthedevelopmentandintegrationofautomatedvehicles.Californiaandmanyotherstates, despiteAV4.0,haveadopteddifferentapprovalsystemssothatautomatedvehiclesmustbecompliantwith regulationsandsystemsthatvaryfromstatetostate.OnDecember23,2020,Californiaissueditsfirst autonomous vehicle deployment permit. EuropeanStandards InDecember2019,theEUissuedtherevisedGeneralSafetyRegulationtotightentherequirements concerningsafetyandtheprotectionof vehicleoccupantsandvulnerableroadusers.This revisedGeneral Safety Regulationwillmakecertainvehiclesafetyequipmentmandatoryinstagesstarting2022,including:advanced emergencybraking,emergencylanekeepingsystems,driverdrowsinessandattentionwarning,intelligentspeed assistance,reversingdetectionsystems,tirepressuremonitoringsystems,anddatarecordersincaseofan accident(“eventdatarecorders”).Inrelationtothis,variousUNRegulationsweredeveloped,andforthe equipment for which UN Regulations have not been developed,the EU established its own technicalstandards. Furthermore,amajoroverhauloftheEU-typeapprovalframeworkformotorvehicleswasissuedinMay 2018.Thenewregulationpurportstoraisethequalityandindependencyofvehicletype-approvalandtesting,to increase checksofvehicles thatarealready onthe EU market,andto strengthenEuropean Commissionoversight oftheframework.ItbecamemandatoryforallnewvehiclemodelsasofSeptember1,2020.Automateddriving vehicles must obtain exemptionunder this framework. UnitedNationsStandards TheUnitedNationsrestructuredtheexistingworkingpartiesandestablishedtheWorkingPartyon Automated/AutonomousandConnectedVehicles(“GRVA”)thatisdedicatedtothedevelopmentofregulations onautomateddriving.TheGRVAisdevelopingregulationscoveringfunctionalsafetyrequirements,new evaluationtestmethodrequirements,cybersecurity,softwareupdates,datarecordingforautomateddriving vehiclesanddatarecordingincaseofanaccident.Thenewregulationsoncybersecurity,softwareupdatesand automated lane keeping system cameinto effect in January 2021. ChineseStandards VehiclesafetyregulationsinChinawereingeneralestablishedhavingregardtotheUNregulations. However,China’sownnationaltechnicalstandardsonfunctionssuchasbatteries,motors,andthechargingand remotesurveillanceofBEVshavebeenmademandatory.Fuel-cellvehiclesaresubjecttothesupervising regulationsonthesafetyofhighpressuregasinadditiontothevehicletypeapprovalrequirement.Moreover,in accordancewiththeMadeinChina2025policy,morethan100standardsforintelligentconnectedvehicles (“ICV”) are being developed (includingautomation, telecommunicationand security). EnvironmentalMatters JapaneseStandards AutomotiveoperationsinJapanaresubjecttosubstantialenvironmentalregulationunderlawssuchasthe AirPollutionControlAct,theWaterPollutionPreventionAct,theNoiseRegulationActandtheVibration Control Act. Under theselaws, if a business entity establishesor alters any facilitythat is regulated by theselaws, thebusinessentityisrequiredto givepriornoticetoregulators,andifabusinessentitydischarges,usesorstores substancesthatareenvironmentalburdensorcausesnoiseorvibrationfromsuchfacility,thebusinessentityis 37 also requiredtocomplywith theapplicablestandards.Toyotais subjectto localregulations,which insome cases imposemorestringentobligationsthantheJapanesecentralgovernmentrequirements.UndertheWaste ManagementandPublicCleansingAct,producersofindustrialwastemustdisposeofindustrialwasteinthe manner prescribed in the sameact. TheSoilContaminationCountermeasuresActofJapanrequiresthatlandownersconductcontamination testing andsubmit areport atthe timetheycease touse hazardoussubstances, such asin connection withthe sale ofaformerfactory,orifthereisapossibilityofhealthhazardsdue tolandcontamination.Ifitisfoundthatland contaminationexceedsacertainlevel,therelevantprefecturalauthoritydesignatestheareaasconsideredtobe contaminated,ordersthelandownertosubmitaplanfordecontamination(suchplanmustdescribethemeasures tobetakeninthearea,thereasonstherefor,andthedeadlineforimplementingsuchmeasures,etc.),andhasthe landownertakesuchmeasuresinaccordancewithsuchplan.Inaddition,undertheActonRecycling,etc.of End-of-LifeVehicles,vehiclemanufacturersarerequiredtotakebackandrecyclespecifiedmaterials (automotiveshredderresidues,airbagsandfluorocarbons)ofend-of-lifevehiclesandtheprovisionsconcerning suchobligationsofvehiclemanufacturersbecameeffectiveinJanuary2005.Toyotahascoordinatedwith relevantpartiestoestablishavehicletake-backandrecyclesystemthroughoutJapan.Asaresult,infiscal2021, Toyotaachievedarecycling/recoveryrateof96%forautomobileshredderresidue(thelegalrequirementbeing 70%) and 95% for air bags (the legalrequirement being 85%) and reachedthe targets set forthin this law. U.S.Standards The environmentalregulationsapplicableintheUnitedStatesinclude,amongothers,theCleanAirAct, the CleanWaterAct,theResourceConservationandRecoveryAct,thePollutionPreventionActof1990andthe ToxicSubstancesControlAct.Toyotaissubjecttoavarietyofstatelegislationthatparallels,andinsomecases imposes more stringent obligationsthan, federal requirements. PursuanttotheCleanAirAct,theEPAhaspromulgatedNationalAmbientAirQualityStandards (“NAAQS”)forsix“criteria”pollutants,includingforozoneandparticulatematter.TheCleanAirActrequires thattheEPAreviewandpossiblyrevisetheseNAAQSeveryfiveyears.In2012,theEPAmadetheannual health-basedparticulatematterNAAQSmorestringent.In2015,theEPAmadetheannualhealth-basedand welfare-basedozoneNAAQSmorestringent.OnJune10,2021,theEPAannouncedthatitwouldreconsidera December7,2020decisiontoretainthe2012annualhealth-basedparticulatematterNAAQSwithoutchanges, which mightresultina tighteningofthestandards. The2012 annualhealth-based particulatematterNAAQS, the 2015annualhealth-basedandwelfare-basedozoneNAAQS,aswellasanyfutureNAAQSrevisions,couldlead to additional pollution controlrequirements on the industry,including on Toyota’s manufacturingoperations. EuropeanStandards IntheEU,theAmbientAirQualityandClearerAirforEuropeDirective(Directive2008/50/EC)setsthe environmentalstandardsforairquality.Inrelationtothis,environmentalregulations,suchastheNational EmissionsCeilingsDirective,orNECDirective(2016/2284/EU),theIndustrialEmissionsDirective,orIED Directive(2010/75/EU),andDirective2007/46/EC,whichisintendedtocontrolon-roademissionsources,have been established, and emissions aremanaged under these directivesbased on their source. TheEuropeanCommissioniscurrentlyreviewingtheEUDirectiveonEnd-of-LifeVehicleswithapublic consultationprocess.TheCommissionexpectstopresentalegislativeproposalforrevisionstothisdirectivein 2022. Toyotastrivestoensurethatitsoperationsareincompliancewithenvironmentalregulatoryrequirements concerningitsfacilitiesandproductsineachofthemarketsinwhichitoperates.Toyotacontinuouslymonitors theserequirementsandtakesnecessaryoperationalmeasuresinanefforttoensurethatitremainsinmaterial compliancewithalloftheserequirements.However,compliancewithenvironmentalregulationsandstandards 38 ![]() hasincreasedcostsandisexpectedtoleadtohighercostsinthefuture.Therefore,Toyotarecognizesthat effectiveenvironmentalcostmanagementwillbecomeincreasinglyimportant.Moreover,innovationand leadershipintheareaofenvironmentalprotectionarebecomingincreasinglyimportanttoremaincompetitivein themarket.Asaresult,Toyotahasproceededwiththedevelopmentandproductionofenvironmentallyfriendly technologies,suchashybridelectricvehicles,PHEVs,FCEVs,BEVsandhighfuelefficiency,lowemission engines. Inaddressingenvironmentalissues,basedonanassessmentoftheenvironmentalimpactofitsproducts through theirentire lifecycles,fromproductionthroughsales, disposalandrecycling,Toyota,as amanufacturer, strivestotakeallpossiblemeasuresfromdevelopmentstageandcontinuestoworktowardstechnological innovations to make efficientuse of resources and to reduce theburden on the environment. DisclosureofIranianActivitiesunderSection13(r)oftheSecuritiesExchangeActof1934 Section219oftheIranThreatReductionandSyriaHumanRightsActof2012addedSection13(r)tothe SecuritiesExchangeActof1934,asamended.Section13(r)requiresanissuertodiscloseinitsannualor quarterlyreports,asapplicable,whetheritoranyofitsaffiliatesknowinglyengagedincertainactivities, transactionsordealingsrelatingtoIranorwithdesignatednaturalpersonsorentitiesinvolvedinterrorismorthe proliferationofweaponsofmassdestruction.PursuanttoSection13(r),Toyotaisdisclosingthefollowing information. DuringthefiscalyearendedMarch31,2022,TMTperformedmaintenanceservicesonToyotavehicles owned by the Iranian embassy in Japan. This activitycontributedan insignificantamountof grossrevenues andnet profitto Toyota. Toyotabelieves thatnoneoftheabovetransactionssubjectitoritsaffiliatestoU.S.sanctions.TMTintendstoceaseconducting its activitiesdescribedabove,exceptthatitintendstoprovide totheIranianembassynecessaryrepair servicesin case of a recall or other safetymeasures in accordance withapplicable laws and regulations. ResearchandDevelopment TheoverridinggoalsofToyota’stechnologyandproductdevelopmentactivitiesaretominimizethe negativeaspectsofvehicles,suchastrafficaccidentsandimpactontheenvironment,andmaximizethepositive aspects,suchasdrivingpleasure,comfortandconvenience.Byachievingthesesometimesconflictinggoalstoa high degree, Toyota seeksto open thedoor to theautomobile society of thefuture. To ensure efficientprogress in researchanddevelopmentactivities,Toyotacoordinatesandintegratesallresearchanddevelopmentphases, frombasicresearchandadvancedresearchtoforward-lookingtechnologyandproductdevelopment.With respecttolong-termbasicresearchinareassuchasenergy,theenvironment,informationtechnology, telecommunicationsandmaterials,projectsareregularlyreviewedandevaluatedinconsultationwithoutside expertstoachieveresearchanddevelopmentcostcontrol.Withrespecttoforward-looking,leading-edge technologyandproductdevelopment,Toyotaestablishescost-performancebenchmarksonaproject-by-project basis to ensure efficient developmentinvestment. The chart below provides an overview of Toyota’s R&D ateach phase. BasicresearchPhasetodiscoverdevelopmenttheme Research on basic vehicle-relatedtechnology Forward-lookingand leading-edgetechnology development Phaserequiringtechnologicalbreakthroughssuchascomponentsandsystems Developmentofleading-edgecomponentsandsystemsthataremoreadvanced than those of competitors ProductdevelopmentPhasemainlyfordevelopmentofnewmodels Development of all-new models and existing-modelupgrades 39 Withafocusonenvironmentallyfriendly,carbon-neutralandsafe-vehicletechnology,Toyotaispromoting researchanddevelopmentintotheearlycommercializationofnextgenerationenvironmentallyfriendly, energy-efficientandsafe-vehicletechnology.Toyotaisalsomovingforwardwiththedevelopmentofinnovative technologiessuchaselectrification,connectedvehiclesandautomateddrivingsoastorealizeamobilitysociety ofthefuturethatenableseveryonetoenjoyfreedomofmovementbeyondtheconventionalconceptofvehicles. To this end, Toyota is focusing on the followingareas: •furtherimprovementsinhybridtechnologies,includinginfunctionsandcost,andcontributionstothe environment through advancements; •improvementininternalcombustionenginefueleconomytechnologyaswellasimprovementin technology in connection with more stringentemission standards; •developmentof BEVs, FCEVs and other alternative fuel vehicles; •developmentof advanced safety technology designedto promote driving and vehiclesafety; •developmentof automated driving technologies •connectedcar technologies; and •developmentof technology to bring about morecomfortable travel (driving). Foradetaileddiscussionofthecompany’sresearchanddevelopmentinfrastructure,see“Operatingand Financial Review and Prospects — Research and Development,Patents and Licenses.” ComponentsandParts,RawMaterialsandSourcesofSupply Toyotapurchasesparts,components,rawmaterials,equipmentandothersuppliesfrommultiplecompeting supplierslocatedaroundtheworld.Toyotaworkscloselywithitssupplierstopursueoptimalprocurement. Toyotabelievesthatthispolicyencouragestechnologicalinnovation,costreductionandothermeasuresto strengthenitsvehiclecompetitiveness.Althoughtherearesupplyrestrictionswithrespecttotheprocurementof certain parts and components, Toyotaplans to continue purchases based on the sameprinciple. BecauseToyotahadmorethan50overseasoperationsin27countriesandregionsasofMarch31,2022, procurementofpartsandcomponentsisbeingcarriedoutnotonlylocallyinthecountryoftheproductionsite butalsofromthirdcountries.Asaresult,thedistributionnetworkhasbecomeincreasinglycomplex.Inorderto realizetimelyandefficientdistributionwhileminimizingcosts,Toyotaispromotingeffortstooptimizeeach stageofthesupplychain.Tothisend,Toyotahasdevelopedastandardizedsystemofglobaldistributionandis supportingtheoperationofthesystemateachproductionbase.Theuseoftheglobaldistributionsystemaimsat implementingpartsprocurementthatmeetschangesinvehicleproductioninatimelymanner.Thesevarying efforts,combinedtogether,haveledtomaximizedcustomersatisfaction,aswellastobuildingagoodworking relationship with Toyota’s suppliers. Toyotaaimstoshareinformationandcollaborateamongtheprocurementdivisionsineachoftheregions throughouttheworldinordertoprocurepartsandmaterialsfromthemostcompetitivesuppliersamongToyota factorieslocatedinvariousareasworldwide.Atthesametime,Toyotacarriesoutstreamliningeffortstogether with suppliersineachcountry inorderto achievesustainablegrowth. Toyotahas beenworking on costreduction measures,referredtoasRR-CI(ryohin-renkacostinnovation)andVA(valueanalysis)activities,whichaimsto eliminatewasteinallprocessesfromdesigntoproductionwhileensuringthereliabilityandsafetyofeachpart. Throughtheseactivities,Toyotafocuseson“developingarealcost-competitivestructure”byworkingtogether with suppliers. Inresponsetoasignificantupwardtrendinmaterialscosts,includingrelatedlogisticsand othercosts,since fiscal2022,Toyotaisacceleratinginitiativessuchasthereplacementofrawmaterialswiththosethatareless subject to price pressure and reductionof raw material usage. 40 IntellectualProperty Throughitsongoingchallengetobeonestepaheadinconductingnewresearchanddevelopment,Toyota hasenhanceditsproductappealandtechnologicalprowess,whichhavebeenservingasthesourceofthe company’scompetitiveness.AtthecoreofToyota’sproductscreatedthroughthisresearchanddevelopment alwaysliesintellectualproperty,includinginvention,know-howandbrands.Thisintellectualpropertyfunctions asToyota’simportantmanagementresources.Byprotectingandutilizingourintellectualpropertyinan appropriate manner, we will continueto contribute to society. Towardtherealizationofafuturemobilitysociety,Toyotaiscarryingoutintellectualpropertyactivitiesin linewithitsfocusareas.Forexample,bydistributingresourcesmainlytosuchareasascarbonneutrality, software andWoven Cityand enhancingthe obtainmentand use of intellectualpropertyrights, we arecommitted to strengthening our future competitiveness. As for the intellectualproperty activities framework,having established intellectualproperty functionsat the R&DcentersintheUnitedStates,EuropeandChina,Toyotasupportstechnologydevelopmentgloballyby securing organic, systematiccoordination between R&D activitiesand intellectualproperty activities. Workingin concert withapproximately110 law firmsaroundthe world,we collectintellectualproperty informationand take measuressuitableforeachcountryorregion.Toenhanceactivitiesthatincorporatemanagement,R&Dand intellectualpropertyinone,ToyotahasanIntellectualPropertyManagementCommittee.Themembersofthe Committeediscussandmakedecisionsconcerningobtainingandutilizingimportantintellectualproperty conducive to management and for respondingto management risks relatedto intellectual property. Toyotaholdsapproximately70,000patentsaroundtheworld.WhileToyotaconsidersallofitsintellectual propertytobeimportant,itdoesnotconsideranyspecificsubsetofitspatents,trademarks,designpatentsor utility modelregistrationsto beso importantthattheirexpiration orterminationwould materiallyaffectToyota’s business. Inrecentyears,Toyotahasfiledapproximately12,000patentapplicationsayeardomesticallyand internationally.In 2020,Toyotabecame theholder ofthe mostpatentsamong thecar manufacturersinJapan, the UnitedStatesandothercountries.Accordingtoarankinglistofcompaniesfilingpatentapplicationsconcerning decarbonization-relatedtechnologiestotheJapanPatentOffice,whichwasreleasedbyanexternalinstitution, Toyotahasmaintainedatopranking.OneexampleofToyota’sutilizingitspatentstowardtherealizationof carbon neutralityisits grantingroyalty-freelicenses onpatentsforvehicle electrification-relatedtechnologies.In 2019,aspartofitsinitiativesforfurtherpromotingthewidespreaduseofelectrifiedvehicles,Toyotadecidedto grantroyalty-freelicensesonapproximately23,740patents,whichToyotaholdsaroundtheworld,forvehicle electrification-relatedtechnologies,includingpowercontrolunitsandsystemcontrols.Theseadvancedvehicle electrification-relatedtechnologieshavehelpedToyotarealizeenhancedperformance,reducedsizeandcost reductionsthroughovermorethan20yearsofHEVdevelopment,servingascoretechnologiesthatcanbe appliedtothedevelopmentofvarioustypesofelectrifiedvehicles,includingHEVs,PHEVs,BEVsandFCEVs. Inthisway,whilebuildingexternalpartnershipsbysharingtechnologies,weareactivelyinvolvedinpromoting the further growth of electrifiedvehicles. 41 ![]() CapitalExpendituresandDivestitures SetforthbelowisachartofToyota’sprincipalcapitalexpendituresbetweenApril1,2019andMarch31, 2022,theapproximatetotalcostsofsuchactivity,aswellasthelocationandmethodoffinancingofsuch activity,presentedona“bysubsidiary”basisandasreportedinToyota’sannualJapanesesecuritiesreportfiled with the director of the Kanto Local FinanceBureau. DescriptionofActivity TotalCost (Yeninbillions)Location Primary Methodof Financing Japan Investment primarily intechnology and products by Toyota Motor Corporation ........................ 1,081.6JapanInternal funds, financing from issuance of bonds, etc. Investment primarily intechnology and products by Daihatsu Motor Co., Ltd. ......................... 121.9JapanInternalfunds Investment primarily intechnology and products by Toyota Motor Kyushu, Inc. ....................... 107.5JapanInternalfunds Investment primarily intechnology and products by Toyota Auto Body Co., Ltd. ...................... 92.3JapanInternal funds Investment primarily intechnology and products by Primearth EV Energy Co., Ltd. .................... 73.6JapanInternalfunds Investment primarily intechnology and products by Prime Planet Energy & Solutions, Inc. .............. 72.1JapanInternalfunds Investment primarily intechnology and products by Hino Motors, Ltd. .............................. 56.8JapanInternalfunds OutsideofJapan Investment primarily topromote localization by Toyota Motor Manufacturing, Indiana,Inc. .......... 199.2United StatesInternal funds Investment primarily topromote localization by Toyota Motor Manufacturing Texas, Inc. ............ 167.0United StatesInternalfunds Investment primarily topromote localization by Toyota Motor Manufacturing Canada, Inc. ........... 91.9CanadaInternal funds Investment primarily topromote localization by Toyota Motor Europe NV/SA ..................... 85.6BelgiumInternal funds Investment primarily topromote localization by Toyota Motor Manufacturing, Northern Kentucky, Inc. .......................................... 72.0United StatesInternal funds Investment primarily topromote localization by Toyota Motor Thailand Co., Ltd. ................... 71.2ThailandInternal funds Investment primarily topromote localization by Toyota Motor Manufacturing, Kentucky, Inc. ......... 69.6United StatesInternalfunds Investment primarily inleased automobiles by Toyota Motor Credit Corporation .................. 5,596.6United StatesInternal funds, financing from issuance of bonds, etc. 42 ![]() SetforthbelowisinformationwithrespecttoToyota’smaterialplanstoconstruct,expandorimproveits facilitiesbetweenApril2022andMarch2023,presentedona“bysubsidiary”basisandasreportedinToyota’s annual Japanese securities reportfiled with the directorof the Kanto Local Finance Bureau. DescriptionofActivity TotalCost (Yeninbillions)Location Primary Methodof Financing Japan Investment primarily inmanufacturing facilitiesby Toyota Motor Corporation ........................ 430.0JapanInternalfunds OutsideofJapan Investment primarily inmanufacturing facilitiesby Toyota Battery Manufacturing, Inc. ................ 69.8United StatesInternal funds Investment primarily inmanufacturing facilitiesby Toyota Motor Manufacturing, Canada, Inc. .......... 66.5CanadaInternal funds Investment primarily inmanufacturing facilitiesby Toyota Motor Manufacturing, Kentucky, Inc. ......... 60.4United StatesInternal funds Investment primarily inmanufacturing facilitiesby Toyota Motor Europe NV/SA ..................... 55.2BelgiumInternal funds Investment primarily inmanufacturing facilitiesby Toyota Kirloskar Motor Private Ltd. ................ 53.2IndiaInternal funds Toyotadoesnotcollectinformationontheamountofexpendituresalreadypaidforeachplantunder constructionbecauseToyotabelievesthatitisdifficultanditwouldrequireunreasonableeffortorexpenseto identifyand categorizeeach expenditureitemwithreasonableaccuracy aspastand futureexpenditures.Toyota’s constructionprojectsconsistofnumerousexpenditures,eachofwhich iscontinuallybeingadjustedandincurred in variable and constantly changingamounts as part of the overallwork-in-progress. Seasonality Toyota doesnotconsider itsseasonalitymaterialinthesense ofsignificantlyhighersalesduringany certain period of the year as compared toother periods of the year. LegalProceedings ToyotaandotherautomakerswerenamedincertainclassactionsfiledinMexico,Canada,Australia,Israel andBrazilrelatingtoTakataairbagissues.TheactionsinMexico,IsraelandBrazilarebeinglitigated.The action in Australia is in theprocess of resolution. The action inCanada has been settled. ToyotaisnamedasadefendantinaneconomiclossclassactionlawsuitinAustraliainwhichdamagesare claimedonthebasisthatdieselparticulatefiltersincertainvehiclemodelsaredefective.OnApril7,2022, Toyotareceivedanunfavourablejudgmentinthecourtoffirstinstance.Thejudgmentincludedafindingthat therewasaperceivedreductioninvehiclevalueofcertainvehiclemodels.Toyotadisagreeswiththejudgment andhasfiledanappeal.Otherclaimsofeconomiclossinthisclassactionlawsuitcontinuetobelitigatedatthe courtoffirstinstance.Inestimatingtheprovisionweshouldrecordintheconsolidatedfinancialstatementsasa resultoftheaforementionedjudgment,Toyotahasconsideredvariousfactorsincludingthelegalandfactual circumstancesofthecase,thecontentsofthejudgementofthecourtoffirstinstance,andtheviewsoflegal counsel.ThecurrentlyestimatedprobableeconomicoutflowrelatedtotheclassactionisimmaterialtoToyota’s consolidatedfinancialposition,resultsofoperationsandcashflows.Atthisstage,however,thefinaloutcome and therefore ultimate financialliability forToyota on account of this mattercannot be predicted with certainty. Aspreviouslydisclosed,ToyotaenteredintoaconsentdecreeonJanuary14,2021withtheU.S.EPA,the DepartmentofJustice(“DOJ”)andtheCivilDivisionoftheU.S.Attorney’sOfficefortheSouthernDistrictof 43 NewYork(“SDNY”)toresolveinvestigationsstemmingfromaself-reportedprocessgapinfulfillingcertain emissionsdefectinformationreportingrequirements.Undertheconsentdecree,Toyotaagreedtopay,andhas paid, a $180 millioncivil penalty and to complywith certain additionalperiodic reporting requirements.The U.S. District Court for the Southern Districtof New York approved the consent decree on April2, 2021. InApril2020,Toyotareportedpossibleanti-briberyviolationsrelatedtoaThaisubsidiarytotheSECand theDOJ,andiscooperatingwiththeirinvestigations.Investigationsbygovernmentalauthoritiesrelatedtothese matterscouldresultintheimpositionofcivilorcriminalpenalties,finesorothersanctions,orlitigation.Toyota cannot predict the scope, duration oroutcome of these mattersat this time. OnMarch4,2022,HinoMotors,Ltd.,apubliclytradedJapanesecompanythatproducesandsells commercialtrucksandbuses,andofwhichToyotaowns50.18%ofthevotinginterestsasofMarch31,2022, disclosedthatithadvoluntarilycommencedaninvestigationintopotentialissuesregardingemissions performance and certificationinthe North Americanand Japanese markets,and thatit has reportedsuch issues to andiscooperatingwiththerelevantauthorities,includingtheJapaneseMinistryofLand,Infrastructure, TransportandTourism(“MLIT”)andtheU.S.DepartmentofJustice.Hinoannouncedthat,throughsuch investigation,itidentifiedpastmisconductinrelationtoitsapplicationsforcertificationconcerningthe emissions and thefuel economy performanceof certain of itsengines for the Japanese market.Accordingly, Hino disclosedthatitdecidedto suspendthesaleofsuchenginemodelsandtheircorrespondingvehiclesinJapanand announcedonMarch25,2022arecallofvehiclesequippedwithoneoftheengines.OnMarch29,2022,MLIT announcedthatithadrevokedcertainofthe“typeapprovals”(thatis,approvalsthatexemptnewvehiclesor vehicleswithcertainequipmentfromindividualtestingbygovernmentinspectorspriortosale)andthefuel consumptionratingsrelatingtosuchenginemodels.Investigationsbygovernmentalauthoritiesrelatedtothese matterscouldresultintheimpositionofcivilorcriminalpenalties,finesorothersanctions,orlitigation.Toyota cannot predict the scope, duration, oroutcome of these mattersat this time. Toyotaalsohasvariousotherpendinglegalactionsandclaims,includingwithoutlimitationpersonalinjury andwrongfuldeathlawsuitsandclaimsintheUnitedStates,aswellasintellectualpropertylitigation,andis subject to government investigationsfrom time to time. Beyondtheamountsaccruedwithrespecttoallaforementionedmatters,Toyotaisunabletoestimatea range ofreasonablypossibleloss, ifany,forthe pendinglegalmattersbecause(i)many ofthe proceedingsarein evidencegatheringstages,(ii)significantfactualissuesneedtoberesolved,(iii)thelegaltheoryornatureofthe claimsisunclear,(iv)theoutcomeoffuturemotionsorappealsisunknownand/or(v)theoutcomesofother matters of thesetypes vary widely and do not appearsufficiently similarto offer meaningful guidance.Therefore, foralloftheaforementionedmatters,whichToyotaisindiscussionstoresolve,anylossesthatarebeyondthe amounts accrued could have an adverse effecton Toyota’s financial position,results of operationsor cash flows. 44 ![]() 4.CORGANIZATIONALSTRUCTURE AsofMarch31,2022,ToyotaMotorCorporationhad208Japanesesubsidiariesand351overseas subsidiaries.ThefollowingtablesetsforthforeachofToyotaMotorCorporation’sprincipalsubsidiaries,the countryofincorporationandthepercentageownershipinterestandthevotinginterestheldbyToyotaMotor Corporation. NameofSubsidiary Countryof Incorporation Percentage Ownership Interest Percentage Voting Interest Toyota Financial Services Corporation .............................. Japan100.00100.00 Hino Motors, Ltd. .............................................. Japan50.1150.18 Daihatsu Motor Co., Ltd. ......................................... Japan100.00100.00 TOYOTA Mobility Tokyo Inc. .................................... Japan100.00100.00 Toyota Finance Corporation ...................................... Japan100.00100.00 Toyota Mobility Parts Co., Ltd. .................................... Japan54.0854.08 Toyota Auto Body Co., Ltd. ...................................... Japan100.00100.00 Toyota Motor Kyushu, Inc. ....................................... Japan100.00100.00 Toyota Motor East Japan, Inc. ..................................... Japan100.00100.00 Daihatsu Motor Kyushu Co., Ltd. .................................. Japan100.00100.00 Cataler Corporation ............................................. Japan56.5157.31 Toyota Motor Engineering & Manufacturing North America, Inc. ........ United States100.00100.00 Toyota Motor Manufacturing, Kentucky, Inc. ........................ United States100.00100.00 Toyota Motor North America, Inc. ................................. United States100.00100.00 Toyota Motor Credit Corporation .................................. United States100.00100.00 Toyota Motor Manufacturing, Indiana, Inc. .......................... United States100.00100.00 Toyota Motor Manufacturing, Texas, Inc. ........................... United States100.00100.00 Toyota Motor Sales, U.S.A., Inc. .................................. United States100.00100.00 Toyota Motor Manufacturing Canada Inc. ........................... Canada100.00100.00 Toyota Credit Canada Inc. ........................................ Canada100.00100.00 Toyota Canada Inc. ............................................. Canada51.0051.00 Toyota Motor Manufacturing de Baja California, S. de R.L. de C.V. ...... Mexico100.00100.00 Toyota Motor Manufacturing de Guanajuato, S.A.de C.V. .............. Mexico100.00100.00 Toyota Motor Europe NV/SA ..................................... Belgium100.00100.00 Toyota Motor Manufacturing France S.A.S. .......................... France100.00100.00 Toyota France S.A.S ............................................ France100.00100.00 Toyota Motor Finance (Netherlands) B.V. ........................... Netherlands100.00100.00 Toyota Motor Manufacturing (UK) Ltd. ............................. United Kingdom100.00100.00 Toyota Financial Services (UK) PLC ............................... United Kingdom100.00100.00 Toyota (GB) PLC .............................................. United Kingdom100.00100.00 OOO “TOYOTA MOTOR” ...................................... Russia100.00100.00 Toyota Motor Manufacturing Turkey Inc. ........................... Turkey90.0090.00 Guangqi Toyota Engine Co., Ltd. .................................. China70.0070.00 Toyota Motor (China) Investment Co., Ltd. .......................... China100.00100.00 Toyota Motor Finance (China) Co., Ltd. ............................. China100.00100.00 Toyota Kirloskar Motor Private Ltd. ................................ India89.0089.00 P.T. Astra Daihatsu Motor ........................................ Indonesia61.7561.75 PT. Toyota Motor Manufacturing Indonesia .......................... Indonesia95.0095.00 Toyota Motor Asia Pacific Pte Ltd. ................................. Singapore100.00100.00 Kuozui Motors, Ltd. ............................................ Taiwan70.0070.00 Toyota Leasing (Thailand) Co., Ltd. ................................ Thailand87.4487.44 Toyota Motor Thailand Co., Ltd. .................................. Thailand86.4386.43 Toyota Daihatsu Engineering & Manufacturing Co., Ltd. ............... Thailand100.00100.00 Toyota Motor Corporation Australia Ltd. ............................ Australia100.00100.00 Toyota Finance Australia Ltd. ..................................... Australia100.00100.00 Toyota Argentina S.A. ........................................... Argentina100.00100.00 Toyota do Brasil Ltda. ........................................... Brazil100.00100.00 Toyota South Africa Motors (Pty) Ltd. .............................. South Africa100.00100.00 45 ![]() 4.DPROPERTY,PLANTSANDEQUIPMENT AsofMarch31,2022,Toyotaanditsaffiliatedcompaniesproducedautomobilesandrelatedcomponents throughmorethan50overseasmanufacturingorganizationsin27countriesandregionsbesidesJapan.The facilitiesare locatedprincipallyinJapan,the UnitedStates, Canada,the UnitedKingdom, France,Turkey, Czech Republic, Russia, Poland, Thailand, China, Taiwan, India, Indonesia,South Africa, Argentina and Brazil. Inadditiontoitsmanufacturingfacilities,Toyota’spropertiesincludesalesofficesandothersalesfacilities in major cities, repairservice facilities andresearch and development facilities. Thefollowingtablesetsforthinformation,asofMarch31,2022,withrespecttoToyota’sprincipal facilitiesandorganizations,allofwhichareownedbyToyotaMotorCorporationoritssubsidiaries.However, small portions, all under approximately20%, of some facilitiesare on leased premises. FacilityorSubsidiaryNameLocation LandArea (thousands ofsquare meters) Numberof Employees Principal Productsor Functions Japan(ToyotaMotorCorporation) Toyota Technical Center Shimoyama ................... Toyota City, Aichi Pref.5,573207 Research and Development Tahara Plant ..................... Tahara City, Aichi Pref.4,0326,738Automobiles Toyota Head Office and Technical Center ........................ Toyota City, Aichi Pref.2,76722,506 Research and Development Higashi-Fuji Technical Center ....... Susono City, Shizuoka Pref.2,7222,703Research and Development Motomachi Plant ................. Toyota City, Aichi Pref.1,5758,349Automobiles Takaoka Plant ................... Toyota City, Aichi Pref.1,3174,068Automobiles Kamigo Plant .................... Toyota City, Aichi Pref.8953,063Automobile parts Kinu-ura Plant ................... Hekinan City, Aichi Pref.8082,878Automobile parts Honsha Plant .................... Toyota City, Aichi Pref.6231,985Automobile parts Nagoya Office ................... Nagoya City, Aichi Pref.52,306Office Japan(Subsidiaries) Daihatsu Motor Co., Ltd ........... Ikeda City, Osaka, etc.7,74011,293Automobiles Hino Motors, Ltd. ................ Hino City, Tokyo, etc.6,33012,691Automobiles Toyota Auto Body Co., Ltd. ........ Kariya City, Aichi Pref., etc.2,27111,530Automobiles Toyota Motor Kyushu, Inc. ......... Miyawaka City, Fukuoka Pref.1,9408,563Automobiles etc. TOYOTA Mobility Tokyo Inc. ...... Minato-ku,Tokyo, etc.3656,758Sales facilities OutsideJapan(Subsidiaries) Toyota Motor Manufacturing, Texas, Inc. .......................... Texas, U.S.A.8,1272,825Automobiles Toyota Motor Manufacturing, Kentucky, Inc. ................. Kentucky, U.S.A.5,1617,460Automobiles Toyota Motor Manufacturing Canada, Inc. .......................... Ontario, Canada4,7527,756Automobiles Toyota Motor Thailand Co., Ltd. .... Samutprakarn,Thailand4,4148,670Automobiles Toyota Motor Manufacturing, Indiana, Inc. .......................... Indiana, U.S.A.4,3596,521Automobiles Toyotaisconstantlyengagedinupgrading,modernizingandrevampingtheoperationsofitsmanufacturing facilitiesbased onits assessmentofmarket needsand prospects.To respondflexiblyto fluctuationsindemand in eachofitsproductionoperationsthroughouttheworld,Toyotacontinuallyreviewsandimplementsappropriate productionmeasuressuchasrevisingtakttimeandadjustingdaysofoperation.Asaresult,Toyotabelievesit would require unreasonableeffort to track theexact productive capacity and theextent of utilization ofeach of its manufacturing facilitieswith a reasonable degree of accuracy. 46 ![]() AsofMarch31,2022,property,plantandequipmenthavinganetbookvalueofapproximately ¥1,474.6billionwaspledgedascollateralsecuringindebtednessincurredbyToyotaMotorCorporation’s consolidatedsubsidiaries.Toyotabelievesthattheredoesnotexistanymaterialenvironmentalissuesthatmay affect the company’s utilizationof its assets. Toyotaconsidersallitsprincipalmanufacturingfacilitiesandothersignificantpropertiestobeingood condition and adequate to meet theneeds of its operations. See “— Business Overview— Capital Expendituresand Divestitures” for adescription of Toyota’s material plans to construct, expand or improvefacilities. ITEM4A.UNRESOLVEDSTAFFCOMMENTS None. ITEM5.OPERATINGANDFINANCIALREVIEWANDPROSPECTS 5.AOPERATINGRESULTS FinancialinformationdiscussedinthissectionisderivedfromToyota’sconsolidatedfinancialstatements thatappearelsewhereinthisannualreport.Thefinancialstatementshavebeenpreparedinaccordancewith IFRS,asissuedbytheIASB. Overview ThebusinesssegmentsofToyotaincludeautomotiveoperations,financialservicesoperationsandallother operations.AutomotiveoperationsareToyota’smostsignificantbusinesssegment,accountingfor89%of Toyota’stotalrevenuesbeforetheeliminationofintersegmentrevenuesforfiscal2022.Toyota’sprimary marketsbasedonvehicleunitsalesforfiscal2022were:Japan(23.4%),NorthAmerica(29.1%),Europe (12.4%) and Asia (18.7%). AutomotiveMarketEnvironment Theworldwideautomotivemarketishighlycompetitiveandvolatile.Thedemandforautomobilesisaffected by a numberoffactorsincludingsocial,politicaland general economicconditions;introductionof new vehiclesand technologies;andcostsincurredbycustomerstopurchaseoroperatevehicles.Thesefactorscancauseconsumer demand to vary substantially in different geographic markets and for different types of automobiles. Duringfiscal2022,automotivemarketsrecoveredcomparedwithfiscal2021asdemandremainedfirmin regionsincludingtheU.S.,China,andJapan,despitebeingforcedtocurbproductionworldwideduetolimited parts supplies caused by the globalsemiconductor shortage and the impactof COVID-19. ThefollowingtablesetsforthToyota’sconsolidatedvehicleunitsalesbygeographicmarketbasedon location of customers for thepast three fiscal years. Thousandsofunits YearEndedMarch31, 202020212022 Japan ........................................................... 2,2402,1251,924 North America .................................................... 2,7132,3132,394 Europe .......................................................... 1,0299591,017 Asia ............................................................ 1,6001,2221,543 Other\* .......................................................... 1,3721,0271,352 Overseas total .................................................... 6,7155,5216,306 Total ........................................................... 8,9557,6468,230 \*“Other” consists of Centraland South America, Oceania, Africa andthe Middle East, etc. 47 Duringbothfiscal2021andfiscal2022,Toyota’sconsolidatedvehicleunitsalesinJapandecreaseddueto weakmarketconditionsascomparedtothepriorfiscalyear.Duringfiscal2021,overseasvehicleunitsales decreased,particularlyinNorthAmerica,AsiaandOther,wherethecontractionofautomotivemarketswas especiallypronounced.Duringfiscal2022,overseasvehicleunitsalesincreased,particularlyinAsiaandOther, due to recovery of demand. Toyota’s share oftotal vehicleunit sales in eachmarket is influenced by the quality,safety, reliability,price, design,performance,economyandutilityofToyota’svehiclescomparedwiththoseofferedbyother manufacturers.Thetimelyintroductionofneworredesignedvehiclesisalsoanimportantfactorinsatisfying customerneeds.Toyota’sabilitytosatisfychangingcustomerpreferencescanaffectitsrevenuesandearnings significantly. The profitability of Toyota’s automotiveoperations is affectedby many factors. These factorsinclude: •vehicleunit sales volumes, •the mixof vehicle models and options sold, •the levelof parts and service sales, •the levelsof price discounts and othersales incentives and marketingcosts, •the costof customer warranty claimsand other customer satisfactionactions, •the costof research and development and otherfixed costs, •the pricesof raw materials, •the abilityto control costs, •the efficientuse of production capacity, •theadverse effecton production dueto such factorsas the relianceon various suppliersfor the provision of supplies, or the general scarcityof certain supplies, •climatechange risk, including both physicalrisks as well as transitionrisks, •theadverseeffectonmarket,salesandproductionsofnaturalcalamitiesaswellastheoutbreakand spread of epidemics and interruptionsof social infrastructure,and •changes inthe value of the Japanese yen and othercurrencies in which Toyota conducts business. Changesinlaws,regulations,policiesandothergovernmentalactionscanalsomateriallyimpactthe profitabilityofToyota’sautomotiveoperations.Theselaws,regulationsandpoliciesincludethoseattributedto environmentalmatters,vehiclesafety,fueleconomyandemissionsthatcanaddsignificantlytothecostof vehicles. Many governments alsoimpose local content requirements,impose tariffsand other trade barriers,and enact priceorexchangecontrolsthatcanlimitanautomaker’soperationsandcanmaketherepatriationofprofits unpredictable.Changesintheselaws,regulations,policiesandothergovernmentalactionsmayaffectthe production,licensing,distributionorsaleofToyota’sproducts,costofproductsorapplicabletaxrates.From time-to-timewhenpotentialsafetyproblemsarise,Toyotaissuesvehiclerecallsandtakesothersafetymeasures includingsafetycampaignsrelatingtoitsvehicles.Therecallsandothersafetymeasuresdescribedabovehave ledtoanumberofclaimsandlawsuitsagainstToyota.Foramoredetaileddescriptionoftheseclaimsand lawsuits,see“InformationontheCompany—BusinessOverview—LegalProceedings”andnote24and30to the consolidated financial statements. 48 Theworldwideautomotiveindustryisinaperiodofglobalcompetitionwhichmaycontinueforthe foreseeablefuture,andingeneralthecompetitiveenvironmentinwhichToyotaoperatesislikelytointensify. Toyota believesithastheresources,strategiesand technologiesinplaceto competeeffectivelyintheindustryas an independent company for the foreseeablefuture. FinancialServicesOperations Thecompetitionintheworldwideautomobilefinancialservicesindustryisintensifying.Ascompetition increases,marginsonfinancingtransactionsmaydecreaseandmarketsharemayalsodeclineascustomers obtain financing for Toyota vehiclesfrom alternative sources. Toyota’s financialservicesoperationsmainlyincludeloansand leasingprogramsforcustomersand dealers. Toyotabelievesthatitsabilitytoprovidefinancingtoitscustomersisanimportantvalueaddedservice. Therefore,Toyotahasexpandeditsnetworkoffinancesubsidiariesinordertoofferfinancialservicesinmany countries. Toyota’scompetitorsforretailfinancingandretailleasingincludecommercialbanks,creditunionsand otherfinancecompanies.Meanwhile,commercialbanksandothercaptiveautomobilefinancecompaniesalso compete against Toyota’s wholesalefinancing activities. Toyota’s totalreceivablesrelatedtofinancialservicesincreasedduringfiscal 2022mainlydue tothe impact ofchangesinexchangerates.Also,vehiclesandequipmentonoperatingleasesincreasedduringfiscal2022 mainly due to the impact of changesin exchange rates. Fordetailsonreceivablesrelatedtofinancialservicesandvehiclesandequipmentonoperatingleases,see notes 8 and 12 to the consolidated financialstatements. Toyota’sreceivablesrelatedtofinancialservicesaresubjecttocollectabilityrisks.Theserisksinclude consumeranddealerinsolvenciesandinsufficientcollateralvalues(lesscoststosell)torealizethefullcarrying valuesofthesereceivables.Seenotes4and19totheconsolidatedfinancialstatementsforadditional information. ToyotacontinuestooriginateleasestofinancenewToyotavehicles.Theseleasingactivitiesaresubjectto residualvaluerisk.Residualvaluelossescouldbeincurredwhenthelesseeofavehicledoesnotexercisethe option topurchasethevehicleattheendoftheleaseterm.Seenote3 totheconsolidatedfinancialstatementsfor additional information. Toyota entersinto interestrateswap agreementsand cross currencyinterest rateswap agreementsto convert itsfixed-ratedebttovariable-ratefunctionalcurrencydebt.Aportionofthederivativeinstrumentsareentered intotohedgeinterestrateriskfromaneconomicperspectiveandarenotdesignatedasahedgeofspecificassets or liabilitiesonToyota’s consolidatedstatementsof financialpositionand accordingly,unrealizedgains orlosses related toderivativesthatare notdesignatedas a hedgeare recognizedcurrentlyin operations.Seethe discussion in“QuantitativeandQualitativeDisclosuresaboutMarketRisk”andnotes20and21totheconsolidated financial statements. ThefluctuationsinfundingcostscanaffecttheprofitabilityofToyota’sfinancialservicesoperations. Fundingcostsareaffectedbyanumberoffactors,someofwhicharenotinToyota’scontrol.Thesefactors includegeneraleconomicconditions,prevailinginterestratesandToyota’sfinancialstrength.Fundingcosts decreased during fiscal 2021 and 2022 mainlyas a result of lower interestrates. ToyotalauncheditscreditcardbusinessinJapaninApril2001.AsofMarch31,2021,Toyotahad 16.4 millioncardholders,anincreaseof 0.5millioncardholderscomparedwith March31,2020. As ofMarch 31, 49 2022, Toyota had15.7 millioncardholders, a decreaseof 0.7 millioncardholderscompared with March31, 2021. CreditcardreceivablesasofMarch31,2021increasedby¥2.4billionfromMarch31,2020to¥484.1billion, and that as of March 31, 2022 increased by ¥17.3 billionfrom March 31, 2021 to ¥501.4 billion. OtherBusinessOperations Toyota’sotherbusinessoperationsconsistofinformationtechnologyrelatedbusinesses(including informationtechnologyandtelecommunicationsandGAZOO),housing(includingthemanufactureandsaleof prefabricatedhomes)andotherbusinesses.Duringfiscal2020,TMCandPanasonicCorporation(“Panasonic”) establishedanewjointventure,PrimeLifeTechnologiesCorporation(“PrimeLifeTechnologies”),relatingto thetowndevelopmentbusiness.PrimeLifeTechnologiesbecameToyota’saffiliatedcompany,andToyota HousingCorporation(“THC”)aswellasMisawaHomesCo.,Ltd.(“MisawaHomes”)becamesubsidiariesof PrimeLifeTechnologies,causingTHCandMisawaHomestonolongerbeToyota’sconsolidatedsubsidiary companies. Toyota does not expectits other business operationsto materially contributeto Toyota’s consolidated results of operations. CurrencyFluctuations Toyotaisaffectedbyfluctuationsinforeigncurrencyexchangerates.Toyotaisexposedtofluctuationsin thevalueoftheJapaneseyenagainsttheU.S.dollarandtheeuroaswellastheAustraliandollar,theRussian ruble,theCanadiandollar,theBritishpoundandothers.Toyota’sconsolidatedfinancialstatements,whichare presentedinJapaneseyen,areaffectedbyforeigncurrencyexchangefluctuationsthroughbothtranslationrisk and transaction risk. TranslationriskistheriskthatToyota’sconsolidatedfinancialstatementsforaparticularperiodorfora particulardatewillbeaffectedbychanges intheprevailingexchangeratesofthecurrenciesinthosecountriesin which Toyotadoes businesscomparedwiththeJapanese yen.Eventhough thefluctuationsofcurrency exchange ratestotheJapaneseyencanbesubstantial,andthereforesignificantlyimpactcomparisonswithpriorperiods andamongthevariousgeographicmarkets,thetranslationriskisareportingconsiderationanddoesnotreflect Toyota’s underlying results of operations.Toyota does not hedge against translationrisk. TransactionriskistheriskthatthecurrencystructureofToyota’scostsandliabilitieswilldeviatefromthe currency structureof sales proceedsand assets. Transactionrisk relatesprimarilyto sales proceedsfrom Toyota’s non-domestic operations fromvehicles produced in Japan. Toyotabelievesthatthelocationofitsproductionfacilitiesindifferentpartsoftheworldhassignificantly reducedtheleveloftransactionrisk.Aspartofitsglobalizationstrategy,Toyotahascontinuedtolocalize productionbyconstructingproductionfacilitiesinthemajormarketsinwhichitsellsitsvehicles.Infiscal2021 and2022,Toyotaproduced69.7%and71.6%,respectively,ofitsnon-domesticsalesoutsideJapan.InNorth America,65.3%and68.5%ofvehiclessoldinfiscal2021and2022,respectively,wereproducedlocally.In Europe,71.9%and69.1%ofvehiclessoldinfiscal2021and2022,respectively,wereproducedlocally. LocalizingproductionenablesToyotatolocallypurchasemanyofthesuppliesandresourcesusedinthe production process, which allows for a bettermatch of local currencyrevenues with local currency expenses. Toyotaalsoentersintoforeigncurrencytransactionsandotherhedginginstrumentstoaddressaportionof itstransactionrisk.Thishasreduced,butnoteliminated,theeffectsofforeigncurrencyexchangerate fluctuations,whichinsome yearscanbe significant.Seenotes20 and21to theconsolidatedfinancialstatements for additional information. Generally,aweakeningoftheJapaneseyenagainstothercurrencieshasapositiveeffectonToyota’s revenues,operatingincomeandnetincomeattributabletoToyotaMotorCorporation.Astrengtheningofthe 50 ![]() Japaneseyenagainstothercurrencieshastheoppositeeffect.Infiscal2021,theJapaneseyenwasonaverage strongeragainsttheU.S.dollarincomparisontothepreviousfiscalyear,butinfiscal2022,wasonaverage weakeragainsttheU.S.dollarincomparisontothepreviousfiscalyear.Attheendofeachoffiscal2021and 2022,theJapaneseyenwasweakeragainsttheU.S.dollarincomparisontotheendoffiscal2020and2021, respectively.Infiscal2021and2022,theJapaneseyenwasonaverageweakeragainsttheeuroincomparisonto fiscal2020and2021,respectively.Attheendofeachoffiscal2021and2022,theJapaneseyenwasweaker againsttheeuroincomparisontotheendoffiscal2020and2021,respectively.Seenote19totheconsolidated financial statements foradditional information. Segmentation Toyota’smostsignificantbusinesssegmentisitsautomotiveoperations.Toyotacarriesoutitsautomotive operationsasaglobalcompetitorintheworldwideautomotivemarket.Managementallocatesresourcesto,and assessestheperformanceof,itsautomotiveoperationsasasinglebusinesssegmentonaworldwidebasisand assesses financialand non-financialdata such asvehicle unit sales, productionvolume, market share information, vehiclemodelplansandplantlocationcoststoallocateresourceswithintheautomotiveoperations.Toyotadoes notmanageanysubsetofitsautomotiveoperations,suchasdomesticoroverseasoperationsorparts,asseparate management units. GeographicBreakdown ThefollowingtablesetsforthToyota’ssalesrevenuesineachgeographicmarketbasedonthecountry locationofTMCorthesubsidiariesthattransactedthesalewiththeexternalcustomerforthepastthreefiscal years. Yeninmillions YearendedMarch31, 202020212022 Japan ...................................................... 9,503,2388,587,1938,214,740 North America ............................................... 10,419,8699,325,95010,897,946 Europe ..................................................... 3,133,2272,968,2893,692,214 Asia ....................................................... 4,785,4894,555,8975,778,115 Other\* ..................................................... 2,024,7241,777,2662,796,493 \*“Other” consists of Centraland South America, Oceania, Africa andthe Middle East. 51 ![]() ResultsofOperations—Fiscal2022ComparedwithFiscal2021 Yeninmillions YearendedMarch31,2022v.2021Change 20212022AmountPercentage Sales revenues: Japan ........................................ 14,948,93115,991,4361,042,5057.0% North America ................................ 9,491,80311,166,4791,674,67617.6 Europe ...................................... 3,134,4893,867,847733,35923.4 Asia ........................................ 5,045,2956,530,5661,485,27229.4 Other\* ....................................... 1,872,8952,928,1831,055,28756.3 Intersegment elimination/unallocatedamount ........ (7,278,820)(9,105,004)(1,826,185)— Total .................................... 27,214,59431,379,5074,164,91415.3 Operating income (loss): Japan ........................................ 1,149,2171,423,445274,22823.9 North America ................................ 401,361565,784164,42341.0 Europe ...................................... 107,971162,97355,00250.9 Asia ........................................ 435,940672,350236,41054.2 Other\* ....................................... 59,847238,169178,322298.0 Intersegment elimination/unallocatedamount ........ 43,413(67,024)(110,436)— Total .................................... 2,197,7482,995,697797,94836.3 Operating margin .................................. 8.1%9.5%1.4% Income before income taxes .......................... 2,932,3543,990,5321,058,17736.1 Net margin from income beforeincome taxes ............ 10.8%12.7%1.9% Net income attributable to ToyotaMotor Corporation ..... 2,245,2612,850,110604,84926.9 Net margin attributable toToyota Motor Corporation ...... 8.3%9.1%0.8% \*“Other” consists of Centraland South America, Oceania, Africa andthe Middle East. SalesRevenues Toyotahadsalesrevenuesforfiscal2022of¥31,379.5billion,anincreaseof¥4,164.9billion,or15.3%, comparedwiththepriorfiscalyear.Theincreaseresultedmainlyfromthe¥1,510.0billionimpactofincreased vehicleunitsalesandchangesinsalesmixandthe¥1,390.0billionfavorableimpactofchangesinexchange rates. ThetablebelowshowsToyota’ssalesrevenuesfromexternalcustomersbyproductcategoryandby business. Yeninmillions YearendedMarch31,2022v.2021Change 20212022AmountPercentage Vehicles ......................................... 20,509,60623,739,4423,229,83615.7% Parts and components for production ................... 1,287,0531,504,215217,16216.9 Parts and components for afterservice ................. 2,049,1872,407,143357,95617.5 Other ............................................ 752,000881,193129,19317.2 Total Automotive .............................. 24,597,84628,531,9933,934,14716.0 All Other ..................................... 479,553541,43661,88312.9 Total sales of products .......................... 25,077,39829,073,4283,996,03015.9 Financial services .............................. 2,137,1952,306,079168,8847.9 Total sales revenues ........................ 27,214,59431,379,5074,164,91415.3% 52 ![]() Toyota’ssalesrevenuesincludesalesrevenuesfromsalesofproducts,consistingofsalesrevenuesfrom automotiveoperationsandallotheroperations,whichincreasedby15.9%duringfiscal2022comparedwiththe priorfiscalyearto¥29,073.4billion,andsalesrevenuesfromfinancialservicesoperations,whichincreasedby 7.9%duringfiscal2022comparedwiththepriorfiscalyearto¥2,306.0billion.Theincreaseinsalesrevenues fromsalesofproductsismainlyduetoanincreaseinToyotavehicleunitsalesof584 thousandvehiclesandthe favorable impact of changes inexchange rates compared with the priorfiscal year. Thefollowingtableshowsthenumberoffinancingcontractsbygeographicregionattheendoffiscal2022 and 2021, respectively. Numberoffinancingcontractsinthousands AsofMarch31,2022v.2021Change 20212022AmountPercentage Japan ............................................ 2,6602,745853.2% North America .................................... 5,5535,549(4)(0.1) Europe .......................................... 1,4121,507956.7 Asia ............................................ 1,9922,070783.9 Other\* ...........................................881895141.6 Total ........................................ 12,49812,7662682.1% \*“Other” consists of Centraland South America, Oceania and Africa. Geographically,salesrevenues(beforetheeliminationofintersegmentrevenues)forfiscal2022increased by 7.0%in Japan,17.6%inNorth America,23.4%in Europe,29.4%in Asia,and56.3% inOthercompared with thepriorfiscalyear.Excludingtheimpactofchangesinexchangeratesof¥1,390.0billion,salesrevenuesin fiscal2022wouldhaveincreasedby7.0%inJapan,10.5%inNorthAmerica,16.6%inEurope,20.3%inAsia, and 49.2% in Other compared with the priorfiscal year. Thefollowingisadiscussionofsalesrevenuesineachgeographicmarket(beforetheeliminationof intersegment revenues). Japan Thousandsofunits YearendedMarch31,2022v.2021Change 20212022AmountPercentage Toyota’s consolidated vehicle unitsales\* ............... 3,8533,640(213)(5.5)% \*including number of exportedvehicle unit sales Yeninmillions YearendedMarch31,2022v.2021Change 20212022AmountPercentage Sales revenues: Sales of products .............................. 14,674,49615,706,5141,032,0187.0% Financial services .............................. 274,435284,92210,4873.8 Total .................................... 14,948,93115,991,4361,042,5057.0% DespiteToyota’sdomesticandexportedvehicleunitsaleshavingdecreasedby213thousandvehicles comparedwiththepriorfiscalyear,salesrevenuesinJapanincreaseddueprimarilytothefavorableimpactof changesinexchangeratesrelatedtoexporttransactions.Forfiscal2021and2022,exportedvehicleunitsales were 1,728 thousand units and 1,716 thousand units, respectively. 53 ![]() NorthAmerica Thousandsofunits YearendedMarch31,2022v.2021Change 20212022AmountPercentage Toyota’s consolidated vehicle unitsales ................ 2,3132,394813.5% Yeninmillions YearendedMarch31,2022v.2021Change 20212022AmountPercentage Sales revenues: Sales of products .............................. 7,995,0519,578,5341,583,48319.8% Financial services .............................. 1,496,7521,587,94591,1936.1 Total .................................... 9,491,80311,166,4791,674,67617.6% SalesrevenuesinNorthAmericaincreaseddueprimarilytothe81thousandvehiclesincreaseinvehicle unit sales and the favorable impactof changes in exchange rates comparedwith the prior fiscalyear. Europe Thousandsofunits YearendedMarch31,2022v.2021Change 20212022AmountPercentage Toyota’s consolidated vehicle unitsales ................959 1,017586.0% Yeninmillions YearendedMarch31,2022v.2021Change 20212022AmountPercentage Sales revenues: Sales of products .............................. 2,976,2593,671,205694,94623.3% Financial services .............................. 158,229196,64238,41324.3 Total .................................... 3,134,4893,867,847733,35923.4% SalesrevenuesinEuropeincreaseddueprimarilytothe58thousandvehiclesincreaseinvehicleunitsales and the favorable impact of changesin exchange rates compared with theprior fiscal year. Asia Thousandsofunits YearendedMarch31,2022v.2021Change 20212022AmountPercentage Toyota’s consolidated vehicle unitsales ................ 1,2221,54332126.3% Yeninmillions YearendedMarch31,2022v.2021Change 20212022AmountPercentage Sales revenues: Sales of products .............................. 4,874,7466,345,1721,470,42630.2% Financial services .............................. 170,549185,39414,8458.7 Total .................................... 5,045,2956,530,5661,485,27229.4% 54 ![]() SalesrevenuesinAsiaincreaseddueprimarilytothe321thousandvehiclesincreaseinvehicleunitsales and the favorable impact of changesin exchange rates compared with theprior fiscal year. Other Thousandsofunits YearendedMarch31,2022v.2021Change 20212022AmountPercentage Toyota’s consolidated vehicle unitsales ................ 1,0271,35232631.7% Yeninmillions YearendedMarch31,2022v.2021Change 20212022AmountPercentage Sales revenues: Sales of products .............................. 1,719,1322,756,8401,037,70860.4% Financial services .............................. 153,764171,34317,57911.4 Total .................................... 1,872,8952,928,1831,055,28756.3% SalesrevenuesinOtherincreaseddueprimarilytothe326thousandvehiclesincreaseinvehicleunitsales compared with the prior fiscalyear. OperatingCostsandExpenses Yeninmillions YearendedMarch31,2022v.2021Change 20212022AmountPercentage Operating costs and expenses Cost of products sold ........................... 21,199,89024,250,7843,050,89414.4% Cost of financing services ....................... 1,182,3301,157,050(25,280)(2.1) Selling, general and administrative ................ 2,634,6252,975,977341,35113.0 Total .................................... 25,016,84528,383,8113,366,96513.5% Yeninmillions 2022v.2021Change Changes in operating costs and expenses: Effect of changes in vehicle unitsales and sales mix ............................. 1,330,000 Effect of changes in exchange rates .......................................... 780,000 Effect of decrease of cost of financialservices .................................. (100,000) Effect of cost reduction efforts .............................................. 360,000 Increase or decrease in expensesand expense reduction efforts .................... 220,000 Other .................................................................. 776,965 Total .............................................................. 3,366,965 Operatingcostsandexpensesincreasedby¥3,366.9billion,or13.5%,to¥28,383.8billionduringfiscal 2022 compared with the prior fiscalyear. CostReductionEfforts Operatingcostsandexpensesincreasedby¥360.0billionduringfiscal2022.Thisincreasewasduetoa ¥640.0billionincreaseinoperatingcostsandexpensesattributabletotheimpactofsoaringmaterialsprices. 55 ![]() Throughcontinuedcostreductioneffortstogetherwithsuppliers,however,thatincreasewaspartiallyoffsetbya ¥240.0billionreductionprincipallyattributabletovalueengineeringactivitiesandothercostreductionefforts concerningdesign-relatedcosts,anda¥40.0billionreductionattributabletocostreductioneffortsprincipallyat plants and logistics departments. Thecostreductioneffortsdescribedaboverelatedtoongoingvalueengineeringandvalueanalysis activities,theuseofcommonpartsresultinginareductionofparttypesandothermanufacturinginitiatives designedtoreducethecostsofvehicleproduction.Theimpactofsoaringmaterialspricesincludestheimpactof fluctuationinthepriceofsteel,preciousmetals,non-ferrousalloysincludingaluminum,plasticpartsandother production materials and parts. CostofProductsSold Costofproductssoldincreasedby¥3,050.8billion,or14.4%,to¥24,250.7billionduringfiscal2022 compared with theprior fiscalyear. This increasemainly reflectedthe impact of changes in vehicleunit sales and salesmix,theunfavorableimpactofsoaringmaterialsprices,andtheunfavorableimpactoffluctuationsin foreign currency translationrates. CostofFinancialServices Costoffinancialservicesdecreasedby¥25.2billion,or2.1%,to¥1,157.0billionduringfiscal2022 compared with the prior fiscalyear. Selling,GeneralandAdministrativeExpenses Selling,generalandadministrativeexpensesincreasedby¥341.3billion,or13.0%,to¥2,975.9billion duringfiscal2022comparedwiththepriorfiscalyear.Thisincreasemainlyreflectedtheunfavorableimpactof fluctuations in foreign currencytranslation rates. OperatingIncome Yeninmillions 2022v.2021Change Changes in operating income and loss: Effect of marketing efforts ................................................. 860,000 Effect of cost reduction efforts .............................................. (360,000) Effect of changes in exchange rates .......................................... 610,000 Increase or decrease in expensesand expense reduction efforts .................... (220,000) Other .................................................................. (92,052) Total .............................................................. 797,948 Toyota’soperatingincomeincreasedby¥797.9billion,or36.3%,to¥2,995.6billionduringfiscal2022 comparedwiththepriorfiscalyear.Thisincreasewasduetothe¥860.0billionimpactofmarketingeffortsand the¥610.0billionfavorableimpactofchangesinexchangerates,partiallyoffsetby,amongotherfactors,the ¥360.0billionaggregateunfavorableimpactoffactorscategorizedascostreductionefforts(including fluctuationsinrawmaterialsprices)andthe¥220.0billionaggregateunfavorableimpactofchangesinexpenses and expense reduction efforts. Marketingeffortsincludeschangesinvehicleunitsalesandsalesmix,salesexpensesandother.“Other” includes valuation gains and lossesfrom interest rate swaps etc. 56 ![]() Thefavorableimpactofchangesinexchangerateswasduemainlytothe¥590.0billionimpactofoverseas transactions such as importsand exports denominated in foreigncurrencies. Duringfiscal2022,operatingincome(beforeeliminationofintersegmentprofits)comparedwiththeprior fiscalyearincreasedby¥274.2billion,or23.9%,inJapan,¥164.4billion,or41.0%,inNorthAmerica, ¥55.0 billion, or 50.9%, in Europe, ¥236.4 billion, or54.2%, in Asia, and ¥178.3 billion, or 298.0%, in Other. The following is a description of operatingincome in each geographic market. Japan Yeninmillions 2022v.2021Change Changes in operating income and loss: Effect of marketing efforts ................................................. 260,000 Effect of cost reduction efforts .............................................. (145,000) Effect of changes in exchange rates .......................................... 370,000 Increase or decrease in expensesand expense reduction efforts .................... (50,000) Other .................................................................. (160,772) Total .............................................................. 274,228 NorthAmerica Yeninmillions 2022v.2021Change Changes in operating income and loss: Effect of marketing efforts ................................................. 380,000 Effect of cost reduction efforts .............................................. (125,000) Effect of changes in exchange rates .......................................... 50,000 Increase or decrease in expensesand expense reduction efforts .................... (135,000) Other .................................................................. (5,577) Total .............................................................. 164,423 Europe Yeninmillions 2022v.2021Change Changes in operating income and loss: Effect of marketing efforts ................................................. 105,000 Effect of cost reduction efforts .............................................. (40,000) Effect of changes in exchange rates ..........................................0 Increase or decrease in expensesand expense reduction efforts .................... (10,000) Other ..................................................................2 Total .............................................................. 55,002 57 ![]() Asia Yeninmillions 2022v.2021Change Changes in operating income and loss: Effect of marketing efforts ................................................. 130,000 Effect of cost reduction efforts .............................................. (35,000) Effect of changes in exchange rates .......................................... 170,000 Increase or decrease in expensesand expense reduction efforts .................... (40,000) Other .................................................................. 11,410 Total .............................................................. 236,410 Other Yeninmillions 2022v.2021Change Changes in operating income and loss: Effect of marketing efforts ................................................. 95,000 Effect of cost reduction efforts .............................................. (15,000) Effect of changes in exchange rates .......................................... 20,000 Increase or decrease in expensesand expense reduction efforts .................... 15,000 Other .................................................................. 63,322 Total .............................................................. 178,322 OtherIncomeandExpenses Shareofprofit(loss)ofinvestmentsaccountedforusingtheequitymethodduringfiscal2022increasedby ¥209.3billion,or59.6%,to¥560.3billioncomparedwiththepriorfiscalyear.Thisincreasewasduemainlyto anincreaseduringfiscal2022innetincomeattributabletotheshareholdersofcompaniesaccountedforbythe equity method. Otherfinanceincomedecreasedby¥100.4billion,or23.1%,to¥334.7billionduringfiscal2022compared withthepriorfiscalyear.Thisdecreasewasduemainlytoadecreaseduringfiscal2022inprofitonsalesof securities. Otherfinancecostsdecreasedby¥3.5billion,or7.4%,to¥43.9billionduringfiscal2022comparedwith the prior fiscal year. Foreignexchangegain(loss),netincreasedby¥201.0billionto¥216.1billionduringfiscal2022compared with thepriorfiscalyear.Foreignexchangegainsandlossesincludethedifferencesbetween thevalueofforeign currencydenominatedassetsandliabilitiesrecognizedthroughtransactionsinforeigncurrenciestranslatedat prevailingexchangeratesandthevalueatthedatethetransactionsettledduringthefiscalyear,includingthose settledusingforwardforeigncurrencyexchangecontracts,orthevaluetranslatedbyappropriateyear-end exchangerates.The¥201.0billionincreaseinforeignexchangegain(loss),netwasduemainlytothegains recordedinfiscal2022resultingfromtheJapaneseyenbeingweakeragainstforeigncurrenciesatthematurity dates of the foreign currency depositthan at the dates of the deposit. Otherincome(loss),netdecreasedby¥53.2billion,to¥72.4billioninlossesduringfiscal2022compared with the prior fiscal year. 58 ![]() IncomeTaxes The provisionforincometaxesincreasedby¥465.9billion,or71.7%,to¥1,115.9billionduringfiscal2022 comparedwiththepriorfiscalyear.Thisincreasewasduemainlytotheincreaseinincomebeforeincometaxes andreversalsofdeferredtaxassetsonaccountofthereassessmentoftheirrecoverability.Theaverageeffective tax rate for fiscal 2022 was 28.0%. NetIncomeAttributabletoNon-controllingInterests Netincomeattributabletonon-controllinginterestsdecreasedby¥12.6billion,or34.0%,to¥24.5billion duringfiscal2022comparedwiththepriorfiscalyear.Thisdecreasewasduemainlytoadecreaseduringfiscal 2022 in net income of consolidated subsidiaries. NetIncomeAttributabletoToyotaMotorCorporation NetincomeattributabletoToyotaMotorCorporationincreasedby¥604.8billion,or26.9%,to ¥2,850.1 billion during fiscal 2022 comparedwith the prior fiscal year. OtherComprehensiveIncome,NetofTax Othercomprehensiveincome,netoftaxincreasedby¥130.6billionto¥1,143.1billionforfiscal2022 comparedwiththepriorfiscalyear.Thisincreaseresultedfromexchangedifferencesontranslatingforeign operations gains of¥902.8 billion infiscal 2022 comparedwith gains of ¥403.6 billionin the prior fiscalyear and shareofothercomprehensiveincomeofequitymethodinvesteesgainsof¥307.4billioninfiscal2022compared with gainsof¥88.6billioninthepriorfiscalyear,duemainlytotheweakeningof theyenagainst theU.S.dollar andtheeuro,netchangesinrevaluationoffinancialassetsmeasuredatfairvaluethroughothercomprehensive incomelossesof¥203.4billioninfiscal2022comparedwithgainsof¥303.9billioninthepriorfiscalyear,due mainlytochangesinpricesofpublicandcorporatebonds,andremeasurementsofdefinedbenefitplansgainsof ¥136.2 billionin fiscal2022 comparedwith gainsof ¥216.2 billionin theprior fiscalyear, due mainlyto changes in fair value of plan assets. SegmentInformation ThefollowingisadiscussionoftheresultsofoperationsforeachofToyota’soperatingsegments.The amounts presented are prior tointersegment elimination. Yeninmillions YearendedMarch31,2022v.2021Change 20212022AmountPercentage Automotive: Sales revenues ................................ 24,651,55228,605,7383,954,18616.0% Operating income .............................. 1,607,1612,284,290677,13042.1 Financial Services: Sales revenues ................................ 2,162,2372,324,026161,7897.5 Operating income .............................. 495,593657,001161,40832.6 All Other: Sales revenues ................................ 1,052,3651,129,87677,5127.4 Operating income .............................. 85,35042,302(43,048)(50.4) Intersegment elimination/unallocatedamount: Sales revenues ................................ (651,560)(680,133)(28,573)— Operating income .............................. 9,64512,1042,459— 59 AutomotiveOperationsSegment The automotiveoperationssegmentisToyota’slargestoperatingsegmentbysalesrevenues.Salesrevenues fortheautomotivesegmentincreasedduringfiscal2022by¥3,954.1billion,or16.0%,to¥28,605.7billion compared with theprior fiscalyear. The increasemainly reflectsthe ¥1,510.0 billion favorable impactof changes in vehicle unit sales and salesmix and the ¥1,250.0 billion favorableimpact of changes in exchange rates. Operatingincomefromtheautomotiveoperationsincreasedby¥677.1billion,or42.1%, to¥2,284.2billion duringfiscal2022comparedwiththepriorfiscalyear.Thisincreaseinoperatingincomewasduemainlytothe ¥760.0 billioneffect ofmarketing activitiesand the¥570.0 billion favorableimpactof changes in exchangerates, partiallyoffset bythe¥360.0 billionaggregateunfavorableimpact offactors categorizedascost reductionefforts (including fluctuationsin raw materialsprices) and the ¥220.0 billion aggregateunfavorable impact ofchanges in expenses and expense reduction efforts. FinancialServicesOperationsSegment Salesrevenuesforthefinancialservicesoperationsincreasedduringfiscal2022by¥161.7billion,or7.5%, to¥2,324.0billioncomparedwiththepriorfiscalyear.Thisincreasewasduemainlytothefavorableimpactof changes in exchange rates. Operating income fromfinancial servicesoperationsincreased by ¥161.4billion, or 32.6%, to ¥657.0 billion duringfiscal2022comparedwiththepriorfiscalyear.Thisincreasewasdueprimarilytotheincreasesinboth financing margin and financing volume. AllOtherOperationsSegment SalesrevenuesforToyota’sotheroperationssegmentsincreasedby¥77.5billion,or7.4%,to ¥1,129.8 billion during fiscal 2022 comparedwith the prior fiscal year. OperatingincomefromToyota’sotheroperationssegmentsdecreasedby¥43.0billion,or50.4%,to ¥42.3 billion during fiscal 2022 comparedwith the prior fiscal year. 60 ![]() ResultsofOperations—Fiscal2021ComparedwithFiscal2020 Yeninmillions YearendedMarch31,2021v.2020Change 20202021AmountPercentage Sales revenues: Japan ........................................ 16,441,85214,948,931(1,492,921)(9.1)% North America ................................ 10,642,0349,491,803(1,150,231)(10.8) Europe ...................................... 3,355,3573,134,489(220,868)(6.6) Asia ........................................ 5,293,2315,045,295(247,936)(4.7) Other\* ....................................... 2,114,1111,872,895(241,216)(11.4) Intersegment elimination/unallocatedamount ........ (7,980,038)(7,278,820)701,218— Total .................................... 29,866,54727,214,594(2,651,954)(8.9) Operating income(loss): Japan ........................................ 1,585,2761,149,217(436,059)(27.5) North America ................................ 253,205401,361148,15658.5 Europe ...................................... 143,817107,971(35,846)(24.9) Asia ........................................ 363,547435,94072,39319.9 Other\* ....................................... 84,00159,847(24,154)(28.8) Intersegment elimination/unallocatedamount ........ (30,613)43,41374,026— Total .................................... 2,399,2322,197,748(201,484)(8.4) Operating margin .................................. 8.0%8.1%0.1% Income before income taxes .......................... 2,792,9422,932,354139,4125.0 Net margin from income beforeincome taxes ............ 9.4%10.8%1.4% Net income attributable to ToyotaMotor Corporation ..... 2,036,1402,245,261209,12110.3 Net margin attributable toToyota Motor Corporation ...... 6.8%8.3%1.5% \*“Other” consists of Centraland South America, Oceania, Africa andthe Middle East. SalesRevenues Toyotahadsalesrevenuesforfiscal2021of¥27,214.5billion,adecreaseof¥2,651.9billion,or8.9%, comparedwiththepriorfiscalyear.Thedecreaseresultedmainlyfromthe¥2,080.0billionimpactofdecreased vehicleunitsalesandchangesinsalesmixandthe¥560.0billionunfavorableimpactofchangesinexchange rates. ThetablebelowshowsToyota’ssalesrevenuesfromexternalcustomersbyproductcategoryandby business. Yeninmillions YearendedMarch31,2021v.2020Change 20202021AmountPercentage Vehicles ......................................... 22,647,70120,509,606(2,138,095)(9.4)% Parts and components for production ................... 1,197,0891,287,05389,9647.5 Parts and components for afterservice ................. 2,170,4482,049,187(121,261)(5.6) Other ............................................ 755,141752,000(3,141)(0.4) Total Automotive .............................. 26,770,37924,597,846(2,172,533)(8.1) All Other ..................................... 923,314479,553(443,761)(48.1) Total sales of products .......................... 27,693,69325,077,398(2,616,295)(9.4) Financial Services ............................. 2,172,8542,137,195(35,659)(1.6) Total sales revenues ........................ 29,866,54727,214,594(2,651,954)(8.9)% 61 ![]() Toyota’ssalesrevenuesincludesalesrevenuesfromsalesofproducts,consistingofsalesrevenuesfrom automotiveoperationsandallotheroperations,whichdecreasedby9.4%duringfiscal2021comparedwiththe priorfiscalyearto¥25,077.3billion,andsalesrevenuesfromfinancialservicesoperationswhichdecreasedby 1.6%duringfiscal2021comparedwiththepriorfiscalyearto¥2,137.1billion.Thedecreaseinsalesrevenues fromsalesofproductsismainlyduetoadecreaseinToyotavehicleunitsalesof1,309thousandvehicles compared with the prior fiscalyear. Thefollowingtableshowsthenumberoffinancingcontractsbygeographicregionattheendoffiscal2021 and 2020, respectively. Numberoffinancingcontractsinthousands AsofMarch31,2021v.2020Change 20202021AmountPercentage Japan ............................................ 2,4142,66024610.2% North America .................................... 5,3945,5531592.9 Europe .......................................... 1,3181,412947.1 Asia ............................................ 1,8641,9921286.9 Other\* ...........................................926881 (45)(4.9) Total ........................................ 11,91612,4985824.9% \*“Other” consists of Centraland South America, Oceania and Africa. Geographically,salesrevenues(beforetheeliminationofintersegmentrevenues)forfiscal2021decreased by9.1%inJapan,10.8%inNorthAmerica,6.6%inEurope,4.7%inAsia,and11.4%inOthercomparedwith the priorfiscalyear.Excludingthe impactofchangesin exchangeratesof¥560.0 billion,salesrevenuesin fiscal 2021 would have decreased by 9.1% in Japan, 8.5% inNorth America, 5.5% in Europe, and 3.5% in Asia, aswell as would have increased by 0.1% in Other comparedwith the prior fiscal year. Thefollowingisadiscussionofsalesrevenuesineachgeographicmarket(beforetheeliminationof intersegment revenues). Japan Thousandsofunits YearendedMarch31,2021v.2020Change 20202021AmountPercentage Toyota’s consolidated vehicle unitsales\* ............... 4,2843,853(431)(10.0)% \*including number of exportedvehicle unit sales Yeninmillions YearendedMarch31,2021v.2020Change 20202021AmountPercentage Sales revenues: Sales of products .............................. 16,197,55614,674,496(1,523,060)(9.4)% Financial services .............................. 244,296274,43530,13912.3 Total .................................... 16,441,85214,948,931(1,492,921)(9.1)% SalesrevenuesinJapandecreaseddueprimarilytothe431thousandvehiclesdecreaseinvehicleunitsales comparedwiththepriorfiscalyear.Forfiscal2020and2021,exportedvehicleunitsaleswere2,044thousand units and 1,728 thousand units, respectively. 62 ![]() NorthAmerica Thousandsofunits YearendedMarch31,2021v.2020Change 20202021AmountPercentage Toyota’s consolidated vehicle unitsales ................ 2,7132,313(400)(14.8)% Yeninmillions YearendedMarch31,2021v.2020Change 20202021AmountPercentage Sales revenues: Sales of products .............................. 9,089,2897,995,051(1,094,238)(12.0)% Financial services .............................. 1,552,7451,496,752(55,993)(3.6) Total .................................... 10,642,0349,491,803(1,150,231)(10.8)% SalesrevenuesinNorthAmericadecreaseddueprimarilytothe400thousandvehiclesdecreaseinvehicle unit sales compared with the priorfiscal year. Europe Thousandsofunits YearendedMarch31,2021v.2020Change 20202021AmountPercentage Toyota’s consolidated vehicle unitsales ................ 1,029959(70)(6.8)% Yeninmillions YearendedMarch31,2021v.2020Change 20202021AmountPercentage Sales revenues: Sales of products .............................. 3,206,9432,976,259(230,683)(7.2)% Financial services .............................. 148,414158,2299,8156.6 Total .................................... 3,355,3573,134,489(220,868)(6.6)% SalesrevenuesinEuropedecreaseddueprimarilytothe70thousandvehiclesdecreaseinvehicleunitsales compared with the prior fiscalyear. Asia Thousandsofunits YearendedMarch31,2021v.2020Change 20202021AmountPercentage Toyota’s consolidated vehicle unitsales ................ 1,6001,222(378)(23.6)% Yeninmillions YearendedMarch31,2021v.2020Change 20202021AmountPercentage Sales revenues: Sales of products .............................. 5,120,3844,874,746(245,638)(4.8)% Financial services .............................. 172,847170,549(2,298)(1.3) Total .................................... 5,293,2315,045,295(247,936)(4.7)% 63 ![]() SalesrevenuesinAsiadecreaseddueprimarilytothe378thousandvehiclesdecreaseinvehicleunitsales compared with the prior fiscalyear. Other Thousandsofunits YearendedMarch31,2021v.2020Change 20202021AmountPercentage Toyota’s consolidated vehicle unitsales ................ 1,3721,027(345)(25.2)% Yeninmillions YearendedMarch31,2021v.2020Change 20202021AmountPercentage Sales revenues: Sales of products .............................. 1,941,8591,719,132(222,728)(11.5)% Financial services .............................. 172,252153,764(18,488)(10.7) Total .................................... 2,114,1111,872,895(241,216)(11.4)% SalesrevenuesinOtherdecreaseddueprimarilytothe345thousandvehiclesdecreaseinvehicleunitsales compared with the prior fiscalyear. OperatingCostsandExpenses Yeninmillions YearendedMarch31,2021v.2020Change 20202021AmountPercentage Operating costs and expenses Cost of products sold ........................... 23,103,59621,199,890(1,903,706)(8.2)% Cost of financial services ........................ 1,381,7551,182,330(199,424)(14.4) Selling, general and administrative ................ 2,981,9652,634,625(347,339)(11.6) Total .................................... 27,467,31525,016,845(2,450,470)(8.9)% Yeninmillions 2021v.2020Change Changes in operating costs and expenses: Effect of changes in vehicle unitsales and sales mix ............................. (1,330,000) Effect of changes in exchange rates .......................................... (305,000) Effect of decrease of cost of financialservices .................................. (175,500) Effect of cost reduction efforts .............................................. (150,000) Increase or decrease in expensesand expense reduction efforts .................... (70,000) Other .................................................................. (419,970) Total .............................................................. (2,450,470) Operating costsand expensesdecreased by¥2,450.4 billion, or8.9%, to ¥25,016.8 billionduring fiscal2021 compared with the prior fiscalyear. CostReductionEfforts Duringfiscal2021,continuedcostreductioneffortstogetherwithsupplierscontributedtoareductionof operating costsandexpensesby ¥150.0billion.This was dueto ¥80.0billion incost reductioneffortsconcerning 64 ![]() design related costsdue mainlyto ongoing value engineeringactivities,and ¥70.0 billionin cost reduction efforts at plants and logistics departments. Thesecostreductioneffortsrelatedtoongoingvalueengineeringandvalueanalysisactivities,theuseof commonpartsresultinginareductionofparttypesandothermanufacturinginitiativesdesignedtoreducethe costsofvehicleproduction.Theamountoftheeffectofcostreductioneffortsincludestheimpactoffluctuation inthepriceofsteel,preciousmetals,non-ferrousalloysincludingaluminum,plasticpartsandotherproduction materials and parts. CostofProductsSold Costofproductssolddecreasedby¥1,903.7billion,or8.2%,to¥21,199.8billionduringfiscal2021 comparedwiththepriorfiscalyear.Thisdecreasemainlyreflectedtheimpactofchangesinvehicleunitsales andsalesmix,theimpactofdeconsolidationofcertainentitiesduetochangesinownershipinterest,the favorable impact of fluctuationsin foreign currency translationrates, and the impactof cost reduction efforts. CostofFinancialservices Costoffinancialservicesdecreasedby¥199.4billion,or14.4%,to¥1,182.3billionduringfiscal2021 comparedwiththepriorfiscalyear.Thedecreaseresultedmainlyfromthedecreaseinexpensesrelatedto residual value losses and the decreasein funding costs resultingfrom lower interest rates. Selling,GeneralandAdministrativeExpenses Selling,generalandadministrativeexpensesdecreasedby¥347.3billion,or11.6%,to¥2,634.6billion duringfiscal2021comparedwiththepriorfiscalyear.Thisdecreasemainlyreflectedtheimpactof deconsolidationofcertainentitiesduetochangesinownershipinterest,thedecreaseinadvertisingcosts,andthe favorable impact of fluctuationsin foreign currency translationrates. OperatingIncome Yeninmillions 2021v.2020Change Changes in operating income and loss: Effect of marketing activities ............................................... (210,000) Effect of cost reduction efforts .............................................. 150,000 Effect of changes in exchange rates .......................................... (255,000) Increase or decrease in expensesand expense reduction efforts .................... 70,000 Other .................................................................. 43,516 Total .............................................................. (201,484) Toyota’soperatingincomedecreasedby¥201.4billion,or8.4%,to¥2,197.7billionduringfiscal2021 compared with theprior fiscalyear. This decreasewas due to the¥255.0 billion unfavorableimpactof changes in exchangeratesandthe¥210.0billionimpactofmarketingactivities,partiallyoffsetbythe¥150.0billion increase in cost reduction effortsand the ¥70.0 billion increasein expenses and expense reduction efforts. Marketingeffortsandmarketingactivitiesincludechangesinvehicleunitsalesandsalesmix,sales expenses and other. “Other” includes valuationgains and losses from interestrate swaps etc. Theunfavorableimpactofchangesinexchangerateswasduemainlytothe¥210.0billionimpactof overseas transactions such as importsand exports denominated inforeign currencies. 65 ![]() Duringfiscal2021,operatingincome(beforeeliminationofintersegmentprofits)comparedwiththeprior fiscalyeardecreasedby¥436.0billion,or27.5%,inJapan,¥35.8 billion,or24.9%,inEurope,and¥24.1billion, or28.8%,inOther,andincreasedby¥148.1billion,or58.5%,inNorthAmerica,and ¥72.3billion,or19.9%,in Asia. The following is a description of operatingincome in each geographic market. Japan Yeninmillions 2021v.2020Change Changes in operating income and loss: Effect of marketing activities ............................................... (475,000) Effect of cost reduction efforts .............................................. 125,000 Effect of changes in exchange rates .......................................... (170,000) Increase or decrease in expensesand expense reduction efforts .................... 65,000 Other .................................................................. 18,941 Total .............................................................. (436,059) NorthAmerica Yeninmillions 2021v.2020Change Changes in operating income and loss: Effect of marketing efforts ................................................. 150,000 Effect of cost reduction efforts .............................................. 10,000 Effect of changes in exchange rates .......................................... (20,000) Increase or decrease in expensesand expense reduction efforts .................... (50,000) Other .................................................................. 58,156 Total .............................................................. 148,156 Europe Yeninmillions 2021v.2020Change Changes in operating income and loss: Effect of marketing efforts ................................................. 15,000 Effect of cost reduction efforts ..............................................0 Effect of changes in exchange rates .......................................... (50,000) Increase or decrease in expensesand expense reduction efforts .................... 15,000 Other .................................................................. (15,846) Total .............................................................. (35,846) 66 ![]() Asia Yeninmillions 2021v.2020Change Changes in operating income and loss: Effect of marketing efforts ................................................. 20,000 Effect of cost reduction efforts .............................................. 20,000 Effect of changes in exchange rates .......................................... 10,000 Increase or decrease in expensesand expense reduction efforts .................... 10,000 Other .................................................................. 12,393 Total .............................................................. 72,393 Other Yeninmillions 2021v.2020Change Changes in operating income and loss: Effect of marketing efforts ................................................. 80,000 Effect ofcost reduction efforts ............................................... (5,000) Effect of changes in exchange rates .......................................... (25,000) Increase or decrease in expensesand expense reduction efforts .................... (40,000) Other .................................................................. (34,154) Total .............................................................. (24,154) OtherIncomeandExpenses Shareofprofit(loss)ofinvestmentsaccountedforusingtheequitymethodduringfiscal2021increasedby ¥40.7 billion,or13.1%, to¥351.0billioncompared withthepriorfiscalyear. Thisincreasewasdue mainlytoan increaseduringfiscal2021innetincomeattributabletotheshareholdersofcompaniesaccountedforbythe equity method. Otherfinanceincomeincreasedby¥129.3billion,or42.3%,to¥435.2billionduringfiscal2021compared withthepriorfiscalyear.Thisincreasewasduemainlytoanincreaseduringfiscal2021inprofitonsecurities revaluation. Other financecosts increasedby ¥0.3billion,or 0.8%, to¥47.5 billionduring fiscal2021 comparedwith the prior fiscal year. Foreignexchangegain(loss),netincreasedby¥109.7billionto¥15.1billionduringfiscal2021compared with thepriorfiscalyear.Foreignexchangegainsandlossesincludethedifferencesbetween thevalueofforeign currencydenominatedassetsandliabilitiesrecognizedthroughtransactionsinforeigncurrenciestranslatedat prevailingexchangeratesandthevalueatthedatethetransactionsettledduringthefiscalyear,includingthose settledusingforwardforeigncurrencyexchangecontracts,orthevaluetranslatedbyappropriateyear-end exchangerates.The¥109.7billionincreaseinforeignexchangegain(loss),netwasduemainlytothelosses recordedinfiscal2020resultingfromtheJapaneseyenbeingstrongeragainstforeigncurrenciesatthematurity dates of the foreign currency loansthan at the dates of the lending. Otherincome(loss),netincreasedby¥61.3billion,to¥19.2billioninlossesduringfiscal2021compared with the prior fiscal year. 67 ![]() IncomeTaxes Theprovisionforincometaxesdecreasedby¥31.8billion,or4.7%,to¥649.9billionduringfiscal2021 comparedwiththepriorfiscalyear.Thisdecreasewasduemainlytotheincreasedproportionofincomebefore incometaxesofforeignsubsidiarieswherestatutorytaxratesarelow.Theaverageeffectivetaxrateforfiscal 2021 was 22.2%. NetIncomeAttributabletoNoncontrollingInterests Netincomeattributabletonon-controllinginterestsdecreasedby¥37.8billion,or50.5%,to¥37.1billion duringfiscal2021comparedwiththepriorfiscalyear.Thisdecreasewasduemainlytoadecreaseduringfiscal 2021 in net income of consolidated subsidiaries. NetIncomeAttributabletoToyotaMotorCorporation NetincomeattributabletoToyotaMotorCorporationincreasedby¥209.1billion,or10.3%,to ¥2,245.2 billion during fiscal 2021 comparedwith the prior fiscal year. OtherComprehensiveIncome,NetofTax Othercomprehensiveincome,netoftaxincreasedby¥1,521.1billionto¥1,012.4billionforfiscal2021 comparedwiththepriorfiscalyear.Thisincreaseresultedfromexchangedifferencesontranslatingforeign operationsgainsof¥403.6billioninfiscal2021comparedwithlossesof¥362.0billioninthepriorfiscalyear. ThiswasduemainlytotheweakeningoftheyenagainsttheU.S.dollarandtheeuro,netchangesinrevaluation offinancialassetsmeasuredatfairvaluethroughothercomprehensiveincomegainsof¥303.9billioninfiscal 2021comparedwithlossesof¥130.4billioninthepriorfiscalyear,duemainlytochangesinpricesof marketablestocksinstockexchangemarkets,andremeasurementsofdefinedbenefitplansgainsinfiscal2021 of¥216.2billioncomparedwithlossesof¥43.3billioninthepriorfiscalyear,duemainlytochangesinfair value of plan assets. SegmentInformation ThefollowingisadiscussionoftheresultsofoperationsforeachofToyota’soperatingsegments.The amounts presented are prior tointersegment elimination. Yeninmillions YearendedMarch31,2021v.2020Change 20202021AmountPercentage Automotive: Sales revenues ................................ 26,799,74324,651,552(2,148,191)(8.0)% Operating income .............................. 2,013,1341,607,161(405,973)(20.2) Financial Services: Sales revenues ................................ 2,193,1702,162,237(30,933)(1.4) Operating income .............................. 283,742495,593211,85174.7 All Other: Sales revenues ................................ 1,504,9201,052,365(452,555)(30.1) Operating income .............................. 103,35685,350(18,006)(17.4) Intersegment elimination/unallocatedamount: Sales revenues ................................ (631,286)(651,560)(20,274)— Operating income .............................. (999)9,64510,645— AutomotiveOperationsSegment The automotiveoperationssegmentisToyota’slargestoperatingsegmentbysalesrevenues.Salesrevenues fortheautomotivesegmentdecreasedduringfiscal2021by¥2,148.1billion,or8.0%,to¥24,651.5billion 68 comparedwiththepriorfiscalyear.Thedecreasemainlyreflectsthe¥2,080.0billionunfavorableimpactof changesinvehicleunitsalesandsalesmixandthe¥560.0billionunfavorableimpactofchangesinexchange rates. Operating incomefromthe automotiveoperationsdecreased by¥405.9 billion,or 20.2%,to ¥1,607.1billion duringfiscal2021comparedwiththepriorfiscalyear.Thisdecreaseinoperatingincomewasduemainlytothe ¥375.0billioneffectofmarketingactivitiesandthe¥255.0billionunfavorableimpactofchangesinexchange rates,partiallyoffsetbythe¥150.0billionimpactofcostreductioneffortsandthe¥70.0billiondecreasein expenses and expense reduction efforts. FinancialServicesOperationsSegment Salesrevenuesforthefinancialservicesoperationsdecreasedduringfiscal2021by¥30.9billion,or1.4%, to¥2,162.2billioncomparedwiththepriorfiscalyear.Thisdecreasewasduemainlytotheunfavorableimpact of changes in exchange rates. Operating income fromfinancial servicesoperationsincreased by ¥211.8billion, or 74.7%, to ¥495.5 billion duringfiscal2021comparedwiththepriorfiscalyear.Thisincreasewasdueprimarilytothedecreasein expensesrelatedtocreditlossesandresidualvaluelosses,andtherecordingofvaluationgainsoninterestrate swaps stated at fair value in salesfinance subsidiaries. AllOtherOperationsSegment SalesrevenuesforToyota’sotheroperationssegmentsdecreasedby¥452.5billion,or30.1%,to ¥1,052.3billionduringfiscal2021comparedwiththepriorfiscalyear.Thiswasmainlyduetothefull-year impactofTHCandMisawaHomesnolongerbeingToyota’sconsolidatedsubsidiarycompaniesasofJanuary 2020. OperatingincomefromToyota’sotheroperationssegmentsdecreasedby¥18.0billion,or17.4%,to ¥85.3billionduringfiscal2021comparedwiththepriorfiscalyear.Thisdecreaseincludesthenegativeimpact caused by THC and Misawa Homes no longer being Toyota’s consolidatedsubsidiary companies. RelatedPartyTransactions See note 32 to the consolidated financialstatements for furtherdiscussion. BasicConceptRegardingtheSelectionofAccountingStandards TMChasadoptedIFRSforitsconsolidatedfinancialstatementsinordertoimprovetheinternational comparabilityofitsfinancialinformationinthecapitalmarkets,amongotherreasons,beginningwiththefirst quarter of the fiscal yearended March 31, 2021. Outlook Astheautomotiveindustryfacesaonce-in-a-centurytransformationalperiodandatatimewhentheright answersareelusive,wearecommittedto“ProducingHappinessforAll”togetherwithourstakeholders, underpinnedbythespiritof“FortheSakeofOthers”whichwehavemaintainedsinceour founding.Webelieve managementpracticesthatvaluewhatmakesusToyotawillleadtosustainedeffortstoachievetheaimsofthe SDGsto“buildabetterworld”whileensuringthat“noonewillbeleftbehind.”Weareacceleratingourshift towardproduct-centeredmanagementunderthe“makingever-bettercars”initiative,effortstoachievecarbon neutrality,andendeavorstodevelopessentialtechnologiessuchassoftwareandconnectedvehicles.Takingthe foregoingexternalfactorsandotherfactorsintoaccount,Toyotaexpectsthatsalesrevenuesforfiscal2023will 69 increase comparedwith fiscal 2022due mainly tothe increase invehicle unitsales. Toyota expects thatoperating incomewilldecreaseinfiscal2023comparedwithfiscal2022duemainlytotheunfavorableimpactofsoaring materialsprices,partiallyoffsetbytheincreaseinvehicleunitsales.Toyotaexpectsthatincomebeforeincome taxesandnetincomeattributabletoToyotaMotorCorporationwillalsodecreaseinfiscal2023comparedwith fiscal 2022. Forthepurposesofthisoutlookdiscussion,Toyotaisassuminganaverageexchangerateof¥115tothe U.S.dollarand¥130totheeuro.ExchangeratefluctuationscanmateriallyaffectToyota’soperatingresults.In particular,astrengtheningoftheJapaneseyenagainsttheU.S.dollarcanhaveamaterialadverseeffecton Toyota’soperatingresults.See“OperatingandFinancialReviewandProspects—OperatingResults— Overview — Currency Fluctuations” for furtherdiscussion. Theforegoingstatementsareforward-lookingstatementsbaseduponToyota’smanagement’sassumptions and beliefsregardingexchangerates,marketdemand forToyota’s products,economicconditions andothers. See “CautionaryStatementWithRespectToForward-LookingStatements”.Toyota’sactualresultsofoperations couldvarysignificantlyfromthosedescribedaboveasaresultofunanticipatedchangesinthefactorsdescribed above or other factors, includingthose described in “Risk Factors”. 5.BLIQUIDITYANDCAPITALRESOURCES Historically,Toyotahasfundeditscashrequirements,includingthoserelatingtocapitalexpendituresas well as its research and developmentactivities through cash generatedby operations. Infiscal2023,Toyotaexpectstosufficientlyfunditscashrequirements,includingthoserelatingtocapital expendituresaswellasitsresearchanddevelopmentactivities,throughcashandcashequivalentsonhand,cash generatedbyoperations,theissuanceofcorporatebonds,anddebtfinancing.Toyotawilluseitsfundsto efficientlyinvestinmaintenanceandreplacementofconventionalmanufacturingfacilitiesandtheintroduction ofnewproducts,andwillfocusoninvestmentinareascontributingtostrengtheningcompetitivenessandfuture growthforrealizationofanewmobilitysociety.See“InformationontheCompany—BusinessOverview— CapitalExpendituresandDivestitures”forinformationregardingToyota’smaterialcapitalexpendituresand divestituresforfiscal2021and2022,andinformationconcerningToyota’sprincipalcapitalexpendituresand divestitures currently inprogress. Toyotafundsitsfinancingprogramsforcustomersanddealers,includingloansandleasingprograms,from bothcashgeneratedbyoperationsandborrowingsbyitssalesfinancesubsidiaries.Toyotaseekstoexpandits ability to raise funds locallyin markets throughout the worldby expanding its network of finance subsidiaries. Netcashprovidedbyoperatingactivitiesincreasedby¥995.4billionto¥3,722.6billionforfiscal2022, comparedwith¥2,727.1billionforfiscal2021.Theincreasewasprimarilyattributabletothe¥592.2billion increase in net income. Netcashusedininvestingactivitiesdecreasedby¥4,106.6billionto¥577.4billionforfiscal2022, comparedwith¥4,684.1billionforfiscal2021.Thedecreasewasprimarilyattributabletothe¥3,770.9billion decreaseintimedeposits,whichwaslargelyattributabletowithdrawalsfromtimedepositsthatwerefunded fromdebtfinancingthatwasconductedtakingintoaccounttheriskthatCOVID-19willhaveaprolonged impact. Netcashusedinfinancingactivitieswas¥2,466.5billionforfiscal2022,comparedwithnetcashprovided byfinancingactivitiesof¥2,739.1billionforfiscal2021,a¥5,205.6billionchange.Thechangewasprimarily attributable to the ¥1,533.5 billiondecrease in funding by long-termdebt. Total capitalexpendituresforproperty,plantand equipment,includingvehicles andequipmenton operating leases,were¥3,611.5billionduringfiscal2022,remaininglargelyunchangedfromthe¥3,609.6billionintotal capital expenditures during theprior fiscal year. 70 Toyotaexpectsinvestmentsinproperty,plantandequipment,excludingvehiclesandequipmenton operating leases, to be approximately¥1,400.0 billion during fiscal2023. Cashandcashequivalentswere¥6,113.6billionasofMarch31,2022.MostofToyota’scashandcash equivalents are held in Japaneseyen or in U.S. dollars. Liquidassets,whichToyotadefinesascashand cashequivalents,time deposits,public andcorporatebonds anditsinvestmentinmonetarytrustfundsdecreasedduringfiscal2022,by¥761.1billion,or5.4%,to ¥13,451.0 billion as of March 31, 2022. Tradeaccountsandnotesreceivable,lessallowancefordoubtfulaccountsincreasedduringfiscal2021by ¥184.0 billion,or6.2%,to¥3,142.8billion.Thisincreasewasduemainly toincreasedrevenuefromsales during the quarter ended March 31, 2022. Inventoriesincreasedduringfiscal2022by¥933.3billion,or32.3%,to¥3,821.3billion.Thisincreasewas due mainly to an increase in unitprices attributable to risingprices in the preciousmetal market. Totalfinancereceivables,netincreasedduringfiscal2022by¥2,558.7billion,or13.3%,to ¥21,764.4billion.Thisincreasewasduemainlytoanincreaseintheimpactofchangesinexchangerates. Financereceivablesweregeographicallydistributedasfollows:inNorthAmerica55.0%,inAsia12.9%,in Europe 13.3%, in Japan 7.3% and in Other 11.5%. Otherfinancialassetsdecreasedduringfiscal2022by¥1,274.8billion,or9.6%.Thisdecreasewasdue mainly to a decrease in timedeposits and other factors. Property,plantandequipmentincreasedduringfiscal2022by¥915.4billion,or8.0%.Thisincreasewas due mainly to capital expenditures. Accounts and notes payable increased duringfiscal 2022 by ¥246.1 billion, or 6.1%. Incometaxespayableincreasedduringfiscal2022by¥475.9billion,or135.6%.Thisincreasewasmainly due to an increase in income beforeincome taxes that led to increasedincome tax expense. Toyota’stotalborrowingsincreasedduringfiscal2022by¥836.7billion,or3.3%.Toyota’sshort-term borrowingsconsistofloanswithaweighted-averageinterestrateof1.64%andcommercialpaperwitha weighted-averageinterestrateof0.38%.Short-termborrowingsdecreasedduringfiscal2022by¥235.0billion, or5.4%,to¥4,104.8billion.Toyota’slong-termdebtconsistsofunsecuredandsecuredloans,medium-term notes,unsecuredandsecurednotesetc.withweighted-averageinterestratesrangingfrom1.02%to5.81%,and maturitydatesrangingfrom2022to 2048.Thecurrentportionoflong-termdebtdecreased duringfiscal2022by ¥557.4billion,or7.4%,to¥7,026.8billionandthenon-currentportionincreasedby¥1,809.9billion,or13.8%, to¥14,943.7billion.Theincreaseintotalborrowingsresultedmainlyfromtheincreasingdemandforfinancing associatedwiththeincreaseintheloanbalanceatfinancialsubsidiaries.AsofMarch31,2022,approximately 52%oflong-termdebtwasdenominatedinU.S.dollars,11%inJapaneseyen,13%ineuros,6%inAustralian dollars,4%inCanadiandollars,and14%inothercurrencies.Toyotahedgesinterestrateriskexposureoffixed- rateborrowingsbyenteringintointerestrateswaps.TherearenomaterialseasonalvariationsinToyota’s borrowings requirements. AsofMarch31,2022,Toyota’stotalinterestbearingdebtwas101.0%ofToyotaMotorCorporation shareholders’ equity, comparedwith 109.6% as of March 31, 2021. ThefollowingtableprovidesinformationoncreditratingsofToyota’sshort-termborrowingandlong-term debtfromStandard&Poor’sRatingsGroup(S&P),Moody’sInvestorsServices(Moody’s),andRatingand 71 ![]() InvestmentInformation,Inc.(R&I),asofMay31,2022.Acreditratingisnotarecommendationtobuy,sellor holdsecurities.Acreditratingmaybesubjecttowithdrawalorrevisionatanytime.Eachratingshouldbe evaluated separately of any otherrating. S&PMoody’sR&I Short-term borrowing ..... A-1+P-1— Long-term debt ..........A+A1AAA Toyota’s netdefinedbenefit liability(asset)ofJapanese plansdecreased duringfiscal2022 by¥50.6 billion, or17.9%,to¥232.3billion.Thenetdefinedbenefitliability(asset)offoreignplansdecreasedduringfiscal2022 by¥77.4billion,or22.7%,to¥262.9billion.Theamountsofnetdefinedbenefitliability(asset)willbefunded throughfuturecashcontributionsbyToyotaorinsomecaseswillbesettledontheretirementdateofeach coveredemployee.Thedecreaseinnetdefinedbenefitliability(asset)oftheJapaneseplansreflectsmainlyan increaseinplanassetsthatresultedfromanincreaseinstockprices.Seenote23totheconsolidatedfinancial statements for furtherdiscussion. Toyota’streasurypolicyistomaintaincontrolsonallexposures,toadheretostringentcounterpartycredit standards,andtoactivelymonitormarketplaceexposures.Toyotaremainscentralized,andispursuingglobal efficiency of its financialservices operations throughToyota Financial Services Corporation. ThekeyelementofToyota’sfinancialstrategyismaintainingastrongfinancialpositionthatwillallow Toyotatofunditsresearchanddevelopmentinitiatives,capitalexpendituresandfinancialservicesoperations efficientlyevenifearningsaresubjecttoshort-termfluctuations.Toyotabelievesthatitmaintainssufficient liquidityforitspresentcashrequirementsandthat,bymaintainingitshighcreditratings,itwillcontinuetobe abletoaccessfundsfromexternalsourcesinlargeamountsandatrelativelylowcosts.Toyota’sabilityto maintainitshighcreditratingsissubjecttoanumberoffactors,someofwhicharenotwithinToyota’scontrol. ThesefactorsincludegeneraleconomicconditionsinJapanandtheothermajormarketsinwhichToyotadoes business, as well as Toyota’s successfulimplementation of itsbusiness strategy. Toyotausesitssecuritizationprogramaspartofitsfundingthroughspecialpurposeentitiesforitsfinancial servicesoperations.Toyotaisconsideredastheprimarybeneficiaryofthesespecialpurposeentitiesand thereforeconsolidatesthem.Toyotahasnotenteredintoanyoff-balancesheetsecuritizationtransactionsduring fiscal 2022. Forinformationregardingtheamountsofnon-derivativefinancialliabilitiesandderivativefinancial liabilitiesbyaremainingcontractmaturityperiod,seenote19totheconsolidatedfinancialstatements.In addition, aspartofToyota’s normalbusinesspractices,Toyotaenters intolong-termarrangements withsuppliers forpurchasesofcertainrawmaterials,componentsandservices.Thesearrangementsmaycontainfixed/ minimumquantitypurchaserequirements.Toyotaentersintosucharrangementstofacilitateanadequatesupply of these materials and services. 72 ![]() ThefollowingtablessummarizeToyota’scontractualobligationsandcommercialcommitmentsasof March 31, 2022. Yeninmillions Total PaymentsDuebyPeriod Lessthan 1year 1to 3years 3to 5years 5years andafter Contractual Obligations: Short-term debt .......................... 4,104,8584,104,858——— Long-term debt .......................... 22,391,5007,082,9818,937,2464,447,9451,923,328 Commitments for the purchaseof property, plant, other assets and services(note 30) .... 349,143201,48289,69540,42317,543 Total .............................. 26,845,50111,389,3219,026,9414,488,3681,940,871 Commercial Commitments (note30): Maximum potential exposure toguarantees given in the ordinary course of business ..... 3,641,978939,9941,631,204975,96394,817 Total .............................. 3,641,978939,9941,631,204975,96394,817 \*“Long-term debt” representsfuture principalpayments. Toyota expectsto contribute¥33,069 milliondomesticallyand ¥14,876millionoverseas toits pensionplans in fiscal 2023. LendingCommitments CreditFacilitieswithCreditCardHolders Toyota’sfinancialservicesoperationsissuecreditcardstocustomers.Ascustomaryforcreditcard businesses,ToyotamaintainscreditfacilitieswithholdersofcreditcardsissuedbyToyota.Thesefacilitiesare useduponeachholder’srequestsuptothelimitsestablishedonanindividualholder’sbasis.Althoughloans madetocustomersthroughthesefacilitiesarenotsecured,forthepurposesofminimizingcreditrisksandof appropriatelyestablishingcreditlimitsforeachindividualcreditcardholder,Toyotaemploysitsownrisk managementpolicywhichincludesananalysisofinformationprovidedbyfinancialinstitutionsinalliancewith Toyota.Toyotaperiodicallyreviewsandrevises,asappropriate,thesecreditlimits.Outstandingcreditfacilities with credit card holders were ¥179.2 billionas of March 31, 2022. CreditFacilitieswithDealers Toyota’sfinancialservicesoperationsmaintaincreditfacilitieswithdealers.Thesecreditfacilitiesmaybe usedforbusinessacquisitions,facilitiesrefurbishment,realestatepurchases,andworkingcapitalrequirements. These loansaretypicallycollateralizedwith lienson realestate,vehicle inventory,and/orother dealershipassets, asappropriate.Toyotaobtainsapersonalguaranteefromthedealerorcorporateguaranteefromthedealership whendeemedprudent.Althoughtheloansaretypicallycollateralizedorguaranteed,thevalueoftheunderlying collateralorguaranteesmaynotbesufficienttocoverToyota’sexposureundersuchagreements.Toyota evaluatesthecreditfacilitiesaccordingtotherisksassumedinenteringintothecreditfacility.Toyota’s financial servicesoperationsalsoprovidefinancingtovariousmulti-franchisedealerorganizations,referredtoasdealer groups,oftenaspartofalendingconsortium,forwholesaleinventoryfinancing,businessacquisitions,facilities refurbishment, realestate purchases,and working capitalrequirements. Toyota’soutstanding credit facilitieswith dealers totaled ¥3,839.1 billion asof March 31, 2022. 73 Guarantees Toyotaentersintocertainguaranteecontractswithitsdealerstoguaranteecustomers’paymentsoftheir installmentpayablesthatarisefrominstallmentcontractsbetweencustomersandToyotadealers,asandwhen requestedbyToyotadealers.Guaranteeperiodsaresettomatchthematurityofinstallmentpayments,andasof March31,2022,rangedfromonemonthto8years.However,theyaregenerallyshorterthantheusefullivesof productssold.Toyotaisrequiredtoexecuteitsguaranteeprimarilywhencustomersareunabletomakerequired payments. ThemaximumpotentialamountoffuturepaymentsasofMarch31,2022is¥3,641.9billion.Liabilitiesfor theseguaranteesof¥21.8billionhavebeenprovidedasofMarch31,2022.Undertheseguaranteecontracts, Toyota is entitled to recover any amountspaid by it from the customerswhose obligations it guaranteed. 5.CRESEARCHANDDEVELOPMENT,PATENTSANDLICENSES Toyota’sresearchanddevelopmentisdedicatedtocapturingtheincreasinglydiverseandsophisticated marketthroughthedevelopmentofattractive,affordable,high-qualityproductsforcustomersworldwide.The intellectualpropertythatR&DgeneratesisavitalmanagementresourcethatToyotautilizesandprotectsto maximizeitscorporatevalue.Foramoredetaileddiscussionofthecompany’sresearchanddevelopment objectivesandpolicies,see“InformationontheCompany—BusinessOverview—Researchand Development.” Toyota’sresearchanddevelopmentexpenditureswereapproximately¥1,124.2billioninfiscal2022, ¥1,090.4 billion in fiscal 2021 and ¥1,110.3 billionin fiscal 2020. Toyotapresentsresearchanddevelopmentexpendituresasasupplementalmeasurethatdemonstratesthe amountofresearchanddevelopmentexpendituresundertakenduringtherelevantreportingperiod.Toyota definesresearchanddevelopmentexpendituresasresearchanddevelopmentcost,plusresearchand development-relatedexpendituresthatwererecognizedasintangibleassets,lessamortizationexpensesforsuch assets.Thismeasurehaslimitationsasananalyticaltool,andyoushouldnotconsideritinisolation,orasa substitute for an analysis ofToyota’s research and development costas reported under IFRS. Fordetailsoftheresearchanddevelopmentcostrecordedintheconsolidatedstatementofincome,seenote 27 to the consolidated financialstatements. Toyotaoperatesaglobalresearchanddevelopmentorganizationwiththeprimarygoalofbuilding automobilesthatmeettheneedsofcustomersineveryregionoftheworld.InJapan,researchanddevelopment operationsareledbyToyotaandToyotaCentralResearch&DevelopmentLaboratories,Inc.,whichworks closely withDaihatsu, Hino,Toyota AutoBody Co., Ltd.,Toyota MotorEast Japan,Inc., andmany otherToyota groupcompanies.Overseas,Toyotahasaworldwidenetworkoftechnicalcentersaswellasdesignand motorsports research and developmentcenters. ToyotaestablishedTRIinJanuary2016toaccelerateresearchanddevelopmentofartificialintelligence technology,whichhassignificantpotentialtosupportfutureindustrialtechnologies.InJuly2017,TRIinvested $100milliontolaunchaventurecapitalfunddesignedtoprovidefinancingtostartupcompanies,andismaking investmentsin newlyestablishedpromisingstartupcompanies inthe fourareas ofartificialintelligence,robotics, autonomousmobility,anddataandcloudtechnology.TRIsuccessivelyinvestedanother$100millioninMay 2019and$150millioninJune2021.Inaddition,TRIestablisheda$150millionfundinanaimtoachieve carbon neutrality. InJapan,Toyotaestablishedanewcompany,ToyotaResearchInstitute—AdvancedDevelopment (“TRI-AD”),inMarch2018tofurtheraccelerateitseffortsinadvanceddevelopmentforautomateddriving technology andrelated technologies.Itskey objectivesinclude creatinga smooth softwarepipeline fromresearch tocommercialization,leveragingdata-handlingcapabilities,strengtheningcollaborationindevelopmentwithin 74 ![]() theToyotagroup,includingTRI,toacceleratedevelopment,andrecruitingandemployingtop-levelengineers globally, whilecultivatingandcoordinatingstrongtalent withintheToyotagroup. InJanuary2021, TRI-AD was reorganizedintoWovenPlanetGroupcomprisingfourcompanies—WovenPlanetHoldings,Inc.,whichis responsiblefordecision-makingfortheentiregroupandcreatesnewbusinessopportunities;WovenCore,Inc., whichassumedthebusinessofTRI-ADandisresponsibleforthedevelopmentofautomateddriving technologies;WovenAlpha,Inc.,whichisresponsibleforthedevelopmentofnewprojectssuchasWovenCity andArene,asoftwareplatform;andWovenCapital,L.P.withatotalinvestmentvalueof$800million,which invests in growth-stagecompanies inareas such asautonomous driving mobility,artificialintelligence, andsmart city.Moreover,tobolsteroverseasresearchanddevelopmentinitiativesrelatedtoautomateddrivingtechnology andsoftwareplatforms,ToyotaestablishedWovenPlanetNorthAmerica(WPNA)intheUnitedStatesand WovenPlanetUnitedKingdomintheUnitedKingdom,andtransferredTRI’sautomateddrivingdivisionto WPNA in May 2022. Toyota alsoestablisheda technicaldevelopmentcenterinOtemachi,Tokyo, JapaninOctober 2018asa site for development ofkey IT technologiesthat willsupport automated drivingin collaborationwith Woven Core, as well as promotion of collaborationwith venture companies and creationof new value by utilizing big data. The following table provides informationon Toyota’s principal researchand development facilities. FacilityPrincipalActivity Japan Toyota Technical Center ................ Product planning, style, design, prototype production and vehicle evaluation Higashi-Fuji Technical Center ........... Advanced development Tokyo Design Research & Laboratory ..... Advanced styling designs Woven Core, Inc. ..................... Development of artificialintelligencetechnology with a focus on automated driving technology Woven Alpha, Inc. .................... Development of WovenCity and software platform technologies Otemachi Office ...................... Development of key IT technologies, creation of new values by utilizing big data and collaborationwith venture companies Shibetsu Proving Ground ............... Evaluation Toyota Central R&D Labs., Inc. .......... Basic research UnitedStates Toyota Motor Engineering and Manufacturing North America, Inc. ..... Product planning, design and evaluation of vehicles manufactured in North America Calty Design Research, Inc. ............. Design Toyota Research Institute of North America (TRI-NA) ......................... Advanced research relating to “energy and environment,” “safety” and “mobility infrastructure” Toyota Research Institute, Inc. ........... Research and development of artificialintelligence technology Woven Planet North America, Inc. ........ Development of automated driving technology and software platform technology 75 ![]() FacilityPrincipalActivity Europe Toyota Motor Europe NV/SA ............ Planning and evaluation of vehicles manufactured in Europe Toyota Europe Design Development S.A.R.L. .......................... Design Toyota Motorsport GmbH .............. Development of motor sports vehicles Woven Planet United Kingdom, Ltd. ...... Development of automated driving technology and software platform technology AsiaPacific Toyota Daihatsu Engineering and Manufacturing Co., Ltd. .............. Planning and evaluation of vehicles manufactured in Australia and Asia China Toyota Motor Engineering and Manufacturing (China) Co., Ltd. ....... Environmental technology design and evaluation in China FAW Toyota Research & Development Co., Ltd............................... Design, evaluation and certification of vehicles manufactured in China GAC Toyota Motor Co., Ltd. R&D Center ............................ Design, evaluation and certification of vehicles manufactured in China BYD Toyota EV Technology Co., Ltd. .... Design and evaluationof BEVs Toyota Motor Technical Research and Service (Shanghai) Co., Ltd. ........... Research of new technology, construction and system of automobiles Toyotacarefullyanalyzespatentsandtheneedforpatentsineachareaofresearchtoformulatemore effectiveresearchanddevelopmentstrategies.Toyotaidentifiesresearchanddevelopmentprojectsinwhichit should build a strong global patent portfolio. ForafurtherdiscussionofToyota’sintellectualproperty,see“InformationontheCompany—Business Overview — Intellectual Property.” 5.DTRENDINFORMATION For a discussionofthe trendsthat affectToyota’s business andoperating results,see “— OperatingResults” and “— Liquidity and Capital Resources.” 5.ECRITICALACCOUNTINGESTIMATES Not applicable. ITEM6.DIRECTORS,SENIORMANAGEMENTANDEMPLOYEES 6.ADIRECTORSANDSENIORMANAGEMENT Inordertoadvanceitstransitiontoamobilitycompany,Toyotahasreflectedonthepathithastakenthus farandhasformulatedthe“ToyotaPhilosophy”asaroadmapforthefuture.Toyota’smissionis“Producing HappinessforAll”byexpandingthepossibilitiesofpeople,companiesandcommunitiesthroughaddressingthe 76 challengesofmobilityasamobilitycompany.Inordertodoso,Toyotawillcontinuetocreatenewandunique valuewithvariouspartnersbyrelentlesslycommittingtowards monozukuri (manufacturing),andbyfostering imagination for people and society. Toyotastrivestoprovideafulllineupofproductswith“goodqualityyetaffordableprices”globallyatthe rightplaceattherighttime,andofferproductsandservicesthataresympathetictowardscustomersineach countryandregion,throughtheinitiativeof“makingevenbettercars”thatwehavebeenengagedinsincethe 2008financialcrisis.Inordertomeettheseobjectives,followingtheintroductionof“region-basedoperations,” the“businessunitsystem”andthe“in-housecompanysystem”in2011,2013and2016,respectively,inApril 2017Toyotafurtherclarifiedthat,forthepurposeoffurtheracceleratingdecision-makingandoperational execution,membersof theboardof directorsareresponsiblefordecision-makingandmanagementoversightand thatoperatingofficersareresponsibleforoperationalexecution.Furthermore,in2018,Toyotachangedthe commencementofoperatingofficers’termsofofficefromApriltoJanuary,reducedcorporatestrategyfunctions and restructuredthe Japan Sales BusinessGroup based on regions ratherthan sales channels in an effortto enable decision-makingclosertocustomersandthefield,inordertofurtheraccelerateexecutioninfullcoordination witheachsite.In2019,inordertofurtheradvanceToyota’s“accelerationofmanagement”andthedevelopment ofadiverseandtalentedworkforce,theexecutivestructurewaschangedtobecomposedonlyofsenior managingofficersandpeopleofhigherrank,andanewclassificationcalled“seniorprofessional/senior management”( kanbushoku )groupedandreplacedthefollowingtitlesorranks:managingofficers,executive generalmanagers,(sub-executivemanageriallevel)seniorgrade1andseniorgrade2managers,andgrand masters.Fromtheperspectiveofappointingtherightpeopletotherightpositions,seniorprofessionals/senior managementwerepositionedinawiderangeofposts,fromthoseofchiefofficer,deputychiefofficer,plant generalmanager,andseniorgeneralmanagertogroupmanager,todealwithmanagementissuesastheyarise andtostrengthentheirdevelopmentaspartofadiverseandtalentedworkforcethroughon-sitelearningand problem-solving( genchigenbutsu ).InApril2020,Toyotaconsolidatedthepostsofexecutivevicepresidentand operatingofficerintothepostofoperatingofficer.InJuly2020,Toyotafurtherclarifiedtherolesofoperating officers.Membersofmanagementwho,togetherwiththepresident,havecross-functionaloversightoftheentire company,wereredefinedas“operatingofficers.”In-housecompanypresidents,regionalCEOs,andchief officers,ason-siteleadersofbusinessimplementationelements,weregivenauthoritywhilebeingconsolidated intotheclassificationof“seniorprofessional/seniormanagement.”Therolesofoperatingofficersandsenior professionals/seniormanagementaretobedeterminedwhereandasneeded,andpersonsappointedasoperating officersandseniorprofessionals/seniormanagementwillchangeinaccordancewiththe challengesfacedandthe paththatshouldbetaken,asthecompanyexercisesgreaterflexibilityinmakingappointments.However, because of the rapidly changingbusiness environment, Toyota now recognizesthat there is an increasingneed for suchexecutivestofulfillmanagementroles(relatedtopeople,goods,andmoney)togetherwithPresident Toyoda.Therefore,inApril2022,Toyotareorganizedtherolesofoperatingofficersandreestablishedthe positionof“executivevicepresident,”definingitasanoperatingofficerwhoisfocusedonthebusinessfroma managementperspective.Basedonitsbasicpolicyofappointingtherightpeopletotherightpositions,Toyota hasbeenswiftlyandcontinuouslyinnovating.Toyotawillfurtherpressforwardthetideofsuchinnovations, aiming for a corporatestructure capable of carryingout management froma viewpoint that is optimal fora global company. Inordertoconveytopmanagement’saspirationsandthecompany’sdirectiontoallstakeholders,Toyota communicates what Toyota is reallylike through “Toyota Times.” Toyotabelievesthatitiscriticaltoappointindividualswhoarecapableofcontributingtodecision-making aimedatsustainablegrowthintothefutureinkeepingwiththespiritoftheToyodaPrecepts,whichsetforthits foundingphilosophy.Moreover,theseindividualsshouldbeabletoplayasignificantroleintransforming Toyotaintoa“mobilitycompany”throughrespondingtosocialtransformationbyusingCASEexternal partnershipsbasedontrustandfriendshipandinternaltwo-wayinteractiveteamwork,whileworkingin furtheranceoftheSDGs,andtowardssolutionsforothersocialchallenges.Toyotamaintainsitsboardof directorsandseniormanagementatanadequatesize,andensurestheyareoverallbalancedanddiverse, 77 ![]() includingfromtheperspectiveofgenderandnationality.Threeoutsidemembersoftheboardofdirectorshave beenappointedinordertofurtherreflecttheopinionsofthosefromoutsidethecompanyinmanagement’s decision-makingprocess.Toyotahassixaudit&supervisoryboardmembers,threeofwhomareoutsideaudit& supervisoryboardmembers.Inorderto bepreparedintheeventToyotalacksthenumberofaudit&supervisory boardmembersrequiredbylaw,onesubstituteaudit&supervisoryboardmemberhasbeenappointedpursuant to Article 329, Paragraph 3 of the CompaniesAct. SetforthbelowarebriefsummariesofToyota’smembersoftheboardofdirectorsandaudit&supervisory board members. Name (DateofBirth) PositionBriefCareerSummaryandImportantConcurrentDuties Numberof CommonShares Takeshi Uchiyamada (August 17, 1946) Chairman of the Board of Directors 1969 Joined Toyota Motor Corporation (“TMC”) 1998 Member of the Board of Directors ofTMC 2001 Managing Director of TMC 2003 Senior Managing Director of TMC 2005 Executive Vice President of TMC 2012 Vice Chairman of TMC 2013 Chairman of TMC (to present) (important concurrent duties) Director of JTEKT Corporation Director of Mitsui & Co., Ltd. 450,195 shares Shigeru Hayakawa (September 15, 1953) Vice Chairman of the Board of Directors 1977 Joined Toyota Motor Sales Co., Ltd. 2007 Managing Officer of TMC 2007 Toyota Motor North America, Inc. President 2009 Retired from Toyota Motor North America, Inc. President 2012 Senior Managing Officer of TMC 2015 Member of the Board of Directors and Senior Managing Officer of TMC 2017 Vice Chairman of TMC (to present) (important concurrent duties) Representative Director of Institutefor International Economic Studies 242,040 shares Akio Toyoda (May 3, 1956) President, Member of the Board of Directors 1984 Joined TMC 2000 Member of the Board of Directors ofTMC 2002 Managing Director of TMC 2003 Senior Managing Director of TMC 2005 Executive Vice President of TMC 2009 President of TMC (to present) (important concurrent duties) Chairman and CEO of Toyota Motor North America, Inc. Chairman of TOYOTA FUDOSAN CO., LTD. Chairman of the Japan Automobile Manufacturers Association, Inc. Director of DENSO Corporation Representative Director of ROOKIE Racing, Inc. 24,077,945 shares 78 ![]() Name (DateofBirth) PositionBriefCareerSummaryandImportantConcurrentDuties Numberof CommonShares James Kuffner (January 18, 1971) Member of the Board of Directors, Operating Officer 1999 Postdoctoral Research Fellow at the Japan Society for the Promotion of Science 2002 Research Scientist of the Robotics Institute at Carnegie Mellon University 2005 Assistant Professor of the RoboticsInstitute at Carnegie Mellon University 2008 Associate Professor of the Robotics Institute at Carnegie Mellon University 2009 Research Scientist at Google Inc. 2013 Engineering Director of Google Inc. 2016 Chief Technology Officer of Toyota Research Institute, Inc. 2018 Chief Executive Officer of Toyota Research Institute - Advanced Development, Inc. 2018 Executive Advisor at Toyota Research Institute, Inc. 2020 Senior Fellow at TMC 2020 Member of the Board of Directors, Operating Officer of TMC (to present) 2021 Toyota Research Institute - Advanced Development, Inc. changed its corporatename to Woven Core, Inc. and was reorganized into the Woven Planet Group. 2021 Chief Executive Officer and Representative Director of Woven Planet Holdings, Inc. (to present) (important concurrent duties) Chief Executive Officer and Representative Director of Woven Planet Holdings, Inc. Representative Director of Woven Core,Inc. President and Representative Directorof Woven Alpha, Inc. Director of Joby Aviation, Inc. 2,970 shares Kenta Kon (August 2, 1968) Member of the Board of Directors, Operating Officer, Executive Vice President 1991 Joined TMC 2018 Managing Officer of TMC 2019 Operating Officer of TMC 2021 Member of the Board of Directors, Operating Officer of TMC 2022 Member of the Board of Directors, Operating Officer, Executive Vice Presidentof TMC (to present) 34,944 shares 79 ![]() Name (DateofBirth) PositionBriefCareerSummaryandImportantConcurrentDuties Numberof CommonShares Masahiko Maeda (February 10, 1969) Member of the Board of Directors, Operating Officer, Executive Vice President 1994 Joined TMC 2018 Managing Officer of TMC 2019 Operating Officer of TMC 2019 Chairman and President of Toyota Daihatsu Engineering & Manufacturing Co., Ltd. 2022 Operating Officer, Executive Vice President of TMC 2022 Member of the Board of Directors, Operating Officer, Executive Vice Presidentof TMC (to present) (important concurrent duties) Representative Director of Woven Planet Holdings, Inc. Director of Toyota Industries Corporation 21,984 shares Ikuro Sugawara (March 6, 1957) Outside Member of the Board of Directors 1981 Joined Ministry of InternationalTrade and Industry 2010 Director-General of the IndustrialScience and Technology Policy and Environment Bureau, Ministry of Economy, Trade and Industry 2012 Director-General of the Manufacturing Industries Bureau, Ministry ofEconomy, Trade and Industry 2013 Director-General of the Economicand Industrial Policy Bureau, Ministryof Economy, Trade and Industry 2015 Vice-Minister of Ministryof Economy, Trade and Industry 2017 Retired from the Ministryof Economy, Trade and Industry 2017 Special Advisor to the Cabinet 2018 Retired from Special Advisor to the Cabinet 2018 Outside Member of the Board of Directors of TMC (to present) (important concurrent duties) Independent Director of Hitachi, Ltd. — Sir Philip Craven (July 4, 1950) Outside Member of the Board of Directors 1989 President of the InternationalWheelchair Basketball Federation 2001 President of the InternationalParalympic Committee 2002 Retired as President of the International Wheelchair Basketball Federation 2017 Retired as President of the International Paralympic Committee 2018 Outside Member of the Board of Directors of TMC (to present) — 80 ![]() Name (DateofBirth) PositionBriefCareerSummaryandImportantConcurrentDuties Numberof CommonShares Teiko Kudo (May 22, 1964) Outside Member of the Board of Directors 1987 Joined the Sumitomo Bank, Limited 2014 Executive Officer of Sumitomo Mitsui Banking Corporation 2017 Managing Executive Officer of Sumitomo Mitsui Banking Corporation 2018 Outside Member of the Board of Directors of TMC (to present) 2020 Senior Managing Executive Officer of Sumitomo Mitsui Banking Corporation 2020 Senior Managing Executive Officer of Sumitomo Mitsui Financial Group, Inc. 2021 Director and Senior Managing Executive Officer of Sumitomo MitsuiBanking Corporation (to present) 2021 Senior Managing Corporate Executive Officer of Sumitomo MitsuiFinancial Group, Inc. 2021 Director Senior Managing Executive Officer of Sumitomo Mitsui FinancialGroup, Inc. (to present) (important concurrent duties) Director Senior Managing Executive Officerof Sumitomo Mitsui Financial Group, Inc. Director and Senior Managing Executive Officer of Sumitomo Mitsui Banking Corporation 9,467 shares Haruhiko Kato (July 21, 1952) Full-time Audit & Supervisory Board Member 1975 Joined Ministry of Finance 2007 Director-General of the Tax Bureau, Ministry of Finance 2009 Commissioner of National Tax Agency 2010 Retired from Commissioner ofNational Tax Agency 2011 Senior Managing Director of Japan Securities Depository Center, Inc. 2011 President of Japan Securities Depository Center, Inc. 2013 Member of the Board of Directors ofTMC (to present) 2015 President and CEO of Japan Securities Depository Center, Inc. 2018 Retired as Member of the Board of Directors of TMC 2019 Retired as President and CEO of Japan Securities Depository Center, Inc. 2019 Audit & Supervisory Board Member of TMC (to present) 2019 Retired as Director of Japan Securities Depository Center, Inc. 8,808 shares 81 ![]() Name (DateofBirth) PositionBriefCareerSummaryandImportantConcurrentDuties Numberof CommonShares Masahide Yasuda (April 1, 1949) Full-time Audit & Supervisory Board Member 1972 Joined TMC 2000 General Manager of Overseas Parts Division of TMC 2007 President of Toyota Motor Corporation Australia Ltd. 2014 Chairman of Toyota Motor Corporation Australia Ltd. 2017 Retired as Chairman of Toyota Motor Corporation Australia Ltd. 2018 Audit & Supervisory Board Member of TMC (to present) 47,703 shares Katsuyuki Ogura (January 25, 1963) Full-time Audit & Supervisory Board Member 1985 Joined TMC 2015 General Manager of AffiliatedCompanies Finance Dept. of TMC 2018 General Manager of Audit & Supervisory Board Office of TMC 2019 Audit & Supervisory Board Member of TMC (to present) (important concurrent duties) Outside Audit & Supervisory Board Member of Aichi Steel Corporation 27,146 shares Yoko Wake (November 18, 1947) Outside Audit & Supervisory Board Member 1970 Joined the Fuji Bank, Limited 1973 Retired from the same 1977 Assistant Lecturer of Faculty ofBusiness and Commerce of Keio University 1982 Associate Professor of the same 1993 Professor of the same 2011 Outside Audit & Supervisory Board Member of TMC (to present) 2013 Professor Emeritus of Keio University(to present) (important concurrent duties) Professor Emeritus of Keio University — Hiroshi Ozu (July 21, 1949) Outside Audit & Supervisory Board Member 2012 Prosecutor-General 2014 Retired from Prosecutor-General 2014 Registered as Attorney 2015 Outside Audit & Supervisory Board Member of TMC (to present) (important concurrent duties) Attorney Outside Corporate Auditor of Mitsui &Co., Ltd. Audit & Supervisory Board Member (External)of Shiseido Company, Limited 1,615 shares 82 ![]() Name (DateofBirth) PositionBriefCareerSummaryandImportantConcurrentDuties Numberof CommonShares GeorgeOlcott (May7,1955) OutsideAudit& SupervisoryBoard Member 1986JoinedS.G.Warburg&Co.,Ltd 1999PresidentofUBSAssetManagement (Japan) 1999President,JapanUBSBrinson 2000ManagingDirector,EquityCapitalMarkets, UBSWarburgTokyo 2001JudgeBusinessSchool,Universityof Cambridge 2005FMETeachingFellow,JudgeBusiness School,UniversityofCambridge 2008SeniorFellow,JudgeBusinessSchool, UniversityofCambridge (importantconcurrentduties) OutsideDirectorofKirinHoldingsCompany, Limited — 1.Mr.AkioToyoda,whoisPresidentandMemberoftheBoardofDirectors,concurrentlyservesas OperatingOfficer(President). 2.Dr.JamesKuffner,whoisaMemberoftheBoardofDirectors,concurrentlyservesasOperating Officer. 3.Mr.KentaKonandMr.MasahikoMaeda,whoareMembersoftheBoardofDirectors,concurrently serveasOperatingOfficer(ExecutiveVicePresident). Noneofthepersonslistedabovewasselectedasamemberofboardofdirectors,audit&supervisoryboard memberormemberofseniormanagementpursuanttoanarrangementorunderstandingwithToyota’smajor shareholders,customers,suppliersorothers. SetforthbelowisabriefsummaryofToyota’ssubstituteaudit&supervisoryboardmember. Name (DateofBirth) PositionBriefCareerSummaryandImportantConcurrentDuties Numberof CommonShares RyujiSakai (August7,1957) SubstituteAudit& SupervisoryBoard Member 1985Registeredasattorneyandjoined Nagashima&Ohno 1990WilsonSonsiniGoodrich&Rosati 1995PartnerofNagashima&Ohno 2000PartnerofNagashimaOhno&Tsunematsu (topresent) (importantconcurrentduties) Attorney OutsideAudit&SupervisoryBoardMemberof KobayashiPharmaceuticalCo.,Ltd. — 6.BCOMPENSATION DecisionMakingPolicyandProcess Toyotabelievesthatitiscriticaltoappointindividualswhoarecapableofcontributingtodecision-making aimedatsustainablegrowthintothefutureinkeepingwiththespiritoftheToyodaPrecepts,whichsetforthits foundingphilosophy.Moreover,theseindividualsshouldbeabletoplayasignificantroleintransforming 83 Toyotaintoa“mobilitycompany”andcontributetothesolutionsofsocialissues,includingbycontributingto therealizationoftheSDGs,throughrespondingtosocialtransformationbyusingCASEexternalpartnerships based ontrustandfriendshipandinternaltwo-wayinteractiveteamwork.Toyota’s directorcompensationsystem isanimportantmeansthroughwhichtopromotevariousinitiativesandisdeterminedbasedonthefollowing policy. •Itshouldbeasystemthatencouragesmembersoftheboardofdirectorstoworktoimprovethe medium- to long-term corporatevalue of Toyota. •ItshouldbeasystemthatcanmaintaincompensationlevelsthatwillallowToyotato secureandretain talented personnel. •Itshouldbeasystemthatmotivatesmembersoftheboardofdirectorstopromotemanagementfrom the same viewpoint as our shareholderswith a stronger sense of responsibilityas corporate managers. The board of directorsdecides byresolution the policyfor determiningremuneration for and otherpayments toeachmemberoftheboardofdirectors.Remunerationiseffectivelylinkedtocorporateperformancewhile reflectingindividualjobresponsibilitiesandperformance.Remunerationstandardsineachmember’shome countryarealsotakenintoaccountwhendeterminingremunerationlevelsandpaymentmethods.Remuneration foroutsidemembersoftheboardofdirectorsandaudit&supervisoryboardmembersconsistsonlyoffixed payments.Asaresult,thisremunerationisnotreadilyimpactedbybusinessperformance,helpingtoensure independence from management. Basedontheresolutionofthe115thOrdinaryGeneralShareholders’MeetingheldonJune13,2019 concerningremunerationforthemembersoftheboardofdirectorsofToyota,themaximumcashcompensation wassetat3.0billionyenperyear(ofwhich,themaximumamountpayabletooutsidemembersoftheboardof directorsis0.3billionyenperyear),andthemaximumsharecompensationwassetat4.0billionyenperyear. Thenumberofmembersoftheboardofdirectorsasoftheconclusionofthe115thOrdinaryGeneral Shareholders’ Meeting was nine (includingthree outside membersof the board of directors). Theamountofremunerationforaudit&supervisoryboardmembersofToyotawassetat30millionyenor lesspermonthatthe104thOrdinaryGeneralShareholders’MeetingheldonJune24,2008.Thenumberof audit&supervisoryboardmembersasoftheconclusionofthe104thOrdinaryGeneralShareholders’Meeting was seven. TheamountofremunerationforeachmemberoftheboardofdirectorsofToyotaandtheremuneration systemaredecidedbytheboardofdirectorsandthe“ExecutiveCompensationMeeting,”amajorityofthe members of whichare outside membersof theboard of directors,to ensure theindependence of thedecision. The ExecutiveCompensationMeetingconsistsofchairmanoftheboardofdirectorsTakeshiUchiyamada (Chairman),memberoftheboardofdirectorsKentaKon(whoreplacedKojiKobayashionJune15,2022),and outside members of the board ofdirectors Ikuro Sugawara, Sir Philip Cravenand Teiko Kudo. Theboardofdirectorsresolvesthepolicyfordeterminingremunerationforandotherpaymentstoeach memberoftheboardofdirectorsandtheexecutiveremunerationsystemaswellasthetotalamountof remunerationforagivenfiscalyear.Theboardofdirectorsalsoresolvestodelegatethedeterminationofthe amount of remuneration for eachmember of the board of directorsto the Executive Compensation Meeting. TheExecutiveCompensationMeetingreviewstheremunerationsystemformembersofboardofdirectors andseniormanagementonwhichitwillconsultwiththeboardofdirectorsanddeterminestheamountof remunerationforeachmemberoftheboardofdirectors,takingintoaccountfactorssuchascorporate performanceaswellasindividualjobresponsibilitiesandperformance,inaccordancewiththepolicyfor determiningremunerationforandotherpaymentstoeachmemberoftheboardofdirectorsestablishedbythe boardofdirectors.TheboardofdirectorsconsidersthatsuchdecisionsmadebytheExecutiveCompensation Meetingareinlinewiththepolicyondeterminingremunerationandotherpaymentsforeachmemberofthe board of directors. 84 ![]() Remunerationforaudit&supervisoryboardmembersisdeterminedbytheaudit&supervisoryboard within the scope determined by resolutionof the shareholders’ meeting. ExecutiveCompensationMeetingswereheldinMay2021andMarchandApril2022todiscussand determine the amount of remunerationfor fiscal 2021 and otherrelevant matters. Furthermore,preliminaryexaminationmeetings,consistingonlyofoutsidemembersoftheboardof directors,wereheldonatotaloffiveoccasionsinJuly,SeptemberandOctober2021andFebruaryandMarch 2022todiscussmattersfortheExecutiveCompensationMeetings.Remunerationforthemembersoftheboard of directors were determinedwith the unanimous consent of the ExecutiveCompensation Meeting. The principal topics discussed atExecutive Compensation Meetings included: •Remunerationlevel for each position and jobresponsibility •Evaluationof benchmarks and actual resultsof fiscal 2021 •Evaluationof individual performance •Determinationof the amount of remunerationfor each member of theboard of directors MethodofDeterminingPerformance-basedRemuneration(BonusandShareCompensation) DirectorswithJapaneseCitizenship(ExcludingOutsideMembersoftheBoardofDirectors) Toyotasetsthetotalamountofremuneration(“AnnualTotalRemuneration”)receivedbyeachmemberof theboardofdirectorsinayearbasedonconsolidatedoperatingincome,thefluctuationofthemarket capitalizationofToyota(calculatedbymultiplyingtheclosingpriceofToyota’scommonstockontheTokyo StockExchangeandthetotalnumberofissuedsharesofToyotacommonstock(lesssharesoftreasurystock)) andindividualperformanceevaluation.Thebalanceafterdeductingfixedremuneration,ormonthly remuneration, from Annual Total Remunerationconstitutes performance-basedremuneration. Toyotadeterminestheannualtotalremunerationlevelappropriateforeachpositionandjobresponsibility by referring to the benchmarkingresult of remuneration forofficers of companies locatedin Japan. ConceptofEachItem Consolidatedoperating income Indicator for evaluating Toyota’sefforts based on business performance Fluctuationofthemarket capitalization Corporate value indicator for shareholdersand investors to evaluate Toyota’s efforts Individualperformance evaluation Qualitative evaluation of performanceof each member of theboard of directors 85 ![]() MethodandReferenceValueforEvaluatingIndicatorsandEvaluationResultforFiscal2022 Evaluation Weight EvaluationMethodReferenceValue Evaluation Resultfor Fiscal2022 Consolidated operatingincome 70% Evaluate the degree of attainment of consolidated operating income in fiscal 2021, using required income (set in 2011) for Toyota’s sustainable growth as reference value ¥1 trillion 210% Fluctuationof Toyota’smarket capitalization 30% Comparatively evaluate the fluctuation of Toyota’s market capitalization up to fiscal2022 (average of January-March), using the market capitalizationof Toyota and the TOPIX of fiscal 2021 (average of January-March) as reference values Toyota: ¥22.3 trillion TOPIX: ¥1,903.60 MethodofSettingAnnualTotalRemuneration AnnualTotalRemunerationissetusingatheoreticalformulathattakesintoaccountthebenchmarking resultsofremunerationformembersoftheboardofdirectors.AnnualTotalRemunerationissetbasedon consolidated operatingincome and thefluctuation ofthe market capitalizationofToyota, and then adjustedbased onindividualperformanceevaluation.Startingfiscal2022,Toyotaintroducedtheindividualperformance evaluationforthechairman,vicechairmanandpresident.Individualperformanceevaluationtakesintoaccount variousfactorssuchasinitiativesinkeepingwiththespiritoftheToyodaPreceptswhichsetforthToyota’s foundingphilosophy,trustfromhisorherpeersandcontributiontothepromotionofhumanresources development. The Individualperformance evaluationis setwithin the rangeof 50% aboveor below Annual Total Remunerationinaccordancewiththepositionandjobresponsibilities,andtheamountoftheannualtotal remuneration for each memberof the board of directors iscalculated based on such evaluationresults. DirectorswithForeignCitizenship(ExcludingOutsideMembersoftheBoardofDirectors) Fixedremunerationandperformance-basedremunerationaresetbasedontheremunerationlevelsand structuresthatallowToyotatosecureandretaintalentedpersonnel.Fixedremunerationisset,takinginto accounteachmember’sjobresponsibilitiesandtheremunerationstandardsofsuchmember’shomecountry. Performance-basedremunerationissetbasedonconsolidatedoperatingincome,thefluctuationofthemarket capitalizationofToyotaandindividualperformance,takingintoaccounteachmember’sjobresponsibilitiesand theremunerationstandardsofsuchmember’shomecountry.Theconceptofeachitemisthesameasthatfor directorswithJapanesecitizenship(excludingoutsidemembersoftheboardofdirectors).Therearecaseswhere Toyota providesincometaxcompensationfor certainmembersof theboardofdirectorsinlightof thedifference in income tax rates with those ofhis or her home country. Compensation [Theaggregateamountofremuneration,includingbonuses,accruedforallmembersoftheboardof directorsandaudit&supervisoryboardmembersasagroupbyToyotaforservicesinallcapacitieswas ¥2,705 million during fiscal 2022. 86 ![]() ToyotaMotorCorporationanditssubsidiarieshavenotsetasideoraccruedanyamountstoprovide pension,retirementorsimilarbenefitstomembersoftheboardofdirectorsandaudit&supervisoryboard members of Toyota Motor Corporation. Toyota’sAnnualSecuritiesReportfiledwiththeKantoLocalBureauofFinanceonJune23,2022, contained the followinginformation concerningcompensation in fiscal2022 on a consolidated basis for members oftheboardofdirectorsandaudit&supervisoryboardmemberswhosetotalcompensationexceeded ¥100 million during such period: Name,PositionClassificationofCompany CompensationperType(millionyen) Total Compensation (millionsof yen) Fixed Compensation Performance-based Compensation Retirement Benefits Monthly CompensationBonus Share Compensation Takeshi Uchiyamada, Member of the Board of Directors .... Toyota Motor Corporation1187976 (37,000 shares) —273 Shigeru Hayakawa, Member of the Board of Directors ...... Toyota Motor Corporation74181 (39,000 shares) —156 Akio Toyoda, Member of the Board of Directors ......... Toyota Motor Corporation2040481 (230,000 shares) —685 Koji Kobayashi, Member of the Board of Directors ......... Toyota Motor Corporation780100 (48,000 shares) —178 James Kuffner, Member of the Board of Directors ......... Toyota Motor Corporation152100——906 Consolidated subsidiary (Woven Planet Holdings, Inc.\*) 64213—— \*FixedcompensationthatWovenPlanetHoldings,Inc.,Toyota’sconsolidatedsubsidiary,paystoJames Kuffner includes fixed compensationthat is paid trimonthly andannually. The amounts above were recorded as expenses infiscal 2022. 6.CBOARDPRACTICES Toyota’sarticlesofincorporationprovideforaboardofdirectorsofnotmorethan20membersandfornot morethansevenaudit&supervisoryboardmembers.Shareholderselectthemembersoftheboardofdirectors andaudit&supervisoryboardmembersatthegeneralshareholders’meeting.Thenormaltermofofficeofa memberoftheboardofdirectorsisoneyearandthatofanaudit&supervisoryboardmemberisfouryears. Members ofthe boardof directorsand audit &supervisory boardmembers may serveany numberof consecutive terms. TheboardofdirectorsmayappointoneChairmanoftheBoardofDirectorsandonePresident,aswellas oneormoreViceChairmenoftheBoardandExecutiveVicePresidents.Theboardofdirectorselects,pursuant toitsresolutions,oneormoreRepresentativeDirectors.EachRepresentativeDirectorrepresentsToyota generally inthe conductof itsaffairs.The boardof directorshas theultimateresponsibilityfor theadministration of Toyota’s affairs.None of Toyota’smembers of theboard of directorsis partyto a servicecontract with Toyota or any of its subsidiaries thatprovides for benefits upon terminationof employment. UndertheprovisionsoftheCompaniesAct,ifToyotadecidesthetermsofanagreementpromisingthat Toyotawillcompensateamemberoftheboardofdirectorsforallorpartofcertainexpensesincurredbythe memberoftheboardofdirectors,suchadecisionmustbemadebyaresolutionoftheboardofdirectors.Under 87 theprovisionsoftheCompaniesAct,ifToyotadecidesthetermsofaninsuranceagreementtobeexecutedwith aninsurer,underwhichamemberoftheboardofdirectorsistheinsured,andwhichpromisesthattheinsurer will compensatefor damagearisingfrom thememberoftheboardofdirectorsbeingheldliableinrelationtothe executionofhisorherdutiesorfromaliabilityclaimfiledagainstthememberoftheboardofdirectors,such decision must be made by a resolutionof the board of directors. Under the CompaniesAct andToyota’sarticles ofincorporation, Toyotamay, by a resolutionof itsboard of directors,exemptmembersoftheboardofdirectors(includingformermembersoftheboardofdirectors)from theirliabilitiestoToyotaarisinginconnectionwiththeirfailuretoexecutetheirdutieswithinthelimits stipulatedbylawsandregulations.Inaddition,Toyotamayenterintoaliabilitylimitationagreementwitheach memberoftheboardofdirectors(excludingexecutivemembersoftheboardofdirectors,amongothers)which limitsthemaximumamountoftheirliabilitiesowedtoToyotaarisinginconnectionwiththeirfailuretoexecute their duties to an amount equalto the minimum liabilitylimit amount prescribedin the laws and regulations. Under the CompaniesAct, Toyotamusthave at leastthree audit &supervisory boardmembers. At leasthalf oftheaudit&supervisoryboardmembersarerequiredtobean“outside”audit&supervisoryboardmember, which is any person who satisfies all ofthe following requirements: (a)thepersonhasneverbeenamemberoftheboardofdirectors,accountingcounselor(inthecasethatan accountingcounselorisalegalentity,anemployeeofsuchentitywhoisinchargeofitsaffairs),executive officer,manageroremployeeofToyotaoritssubsidiariesduringthetenyearperiodbeforebecominganoutside audit & supervisory board member; (b)ifthepersonwasanaudit&supervisoryboardmemberofToyotaoranyofitssubsidiariesatanytime duringthetenyearperiodbeforebecominganoutsideaudit&supervisoryboardmember,suchpersonhasnot been a memberofthe boardof directors,accounting counselor(in thecase that anaccounting counseloris a legal entity,anemployeeofsuchentitywhoisinchargeofitsaffairs),executiveofficer,manageroremployeeof Toyotaoranyofitssubsidiariesduringthetenyearperiodbeforebecominganaudit&supervisoryboard member of Toyota or any of its subsidiaries;and (c)thepersonisnotaspouseorrelativewithintheseconddegreeofkinshipofanymemberoftheboardof directors or manager or otherkey employee of Toyota. The audit&supervisoryboard membersmaynotat thesametimebe amemberof theboard ofdirectors,an accountingcounselor(incasethatanaccountingcounselorisajudicialperson,amemberofsuchjudicialperson whoisinchargeofitsaffairs),executiveofficers,generalmanagersoremployeesofToyotaoranyofits subsidiaries.Together,theseaudit&supervisoryboardmembersformtheaudit&supervisoryboard.The audit & supervisoryboard membershave the duty toexamine thefinancial statementsand businessreports which aresubmittedbytheboardofdirectorstothegeneralshareholders’meeting.Theaudit&supervisoryboard membersalsomonitortheadministrationofToyota’saffairsbythemembersoftheboardofdirectors.Audit& supervisoryboardmembersarenotrequiredtobe,andToyota’saudit&supervisoryboardmembersarenot, certifiedpublicaccountants.Theyarerequiredtoparticipateinmeetingsoftheboardofdirectorsbutarenot entitled to vote. Under the CompaniesAct andToyota’sarticles ofincorporation, Toyotamay, by a resolutionof itsboard of directors,exemptaudit&supervisoryboardmembers(includingformeraudit&supervisoryboardmembers) fromtheirliabilitiestoToyotaarisinginconnectionwiththeirfailuretoexecutetheirdutieswithinthelimits stipulatedbylawsandregulations.Inaddition,Toyotamayenterintoaliabilitylimitationagreementwitheach audit&supervisoryboardmemberwhichlimitsthemaximumamountoftheirliabilitiesowedtoToyotaarising inconnectionwiththeirfailuretoexecutetheirdutiestoanamountequaltotheminimumliabilitylimitamount prescribed in the laws and regulations. 88 ![]() Toyotadoesnothavearemunerationcommittee.However,membersofToyota’sExecutiveCompensation Meeting discuss remunerationfor members of the board of directors. TheExecutiveCompensationMeetingreviewstheremunerationsystemformembersoftheboardof directorsandseniormanagementanddeterminestheamountofremunerationforeachmemberoftheboardof directors,takingintoaccountfactorssuchascorporateperformanceaswell asindividualjobresponsibilitiesand performance. Themembersof themeeting areTakeshi Uchiyamada,the Chairmanof the Board ofDirectors, and Kenta Kon, Ikuro Sugawara, Sir Philip Craven and Teiko Kudo, each, a Memberof the Board of Directors. 6.DEMPLOYEES The totalnumber ofToyota employees,on aconsolidated basis,was 372,817as of March31, 2022, 366,283 asofMarch31,2021and361,907asofMarch31,2020.Thefollowingtablessetforthabreakdownofpersons employed by business segment and by geographiclocation as of March 31, 2022. Segment Numberof EmployeesLocation Numberof Employees Automotive .......................... 330,184Japan ............................. 203,948 Financial services ..................... 13,140North America ...................... 55,471 All other ............................. 24,258Europe ............................ 24,852 Unallocated .......................... 5,235Asia .............................. 66,328 Other\* ............................ 22,218 Total ............................... 372,817Total ............................. 372,817 \*“Other”consistsofCentralandSouthAmerica, Oceania, Africa and the Middle East. MostregularemployeesofToyotaMotorCorporationanditsconsolidatedsubsidiariesinJapan,otherthan management,arerequiredtobecomemembersofthelaborunionsthatcomposetheFederationofAllToyota Workers’Unions.Approximately86%ofToyotaMotorCorporation’sregularemployeesinJapanaremembers of this union. InJapan,basicwagesandotherworkingconditionsarenegotiatedannually.Inaddition,inaccordancewith Japanesenationalcustom,eachemployeeisalsopaid asemi-annualbonus. Bonusesarenegotiatedatthetimeof wagenegotiationsandarebasedonToyota’sfinancialresults,prospectsandotherfactors.Theaveragewage increase for all union members,excluding bonuses, in Japan was approximately2.62% in fiscal 2022. Ingeneral,Toyotaconsidersitslaborrelationswithallofitsworkerstobegood.However,Toyotais currentlyapartyto,andotherwisefromtimetotimeexperiences,labordisputesinsomeofthecountriesin whichitoperates.Toyotadoesnotexpectanydisputestowhichitiscurrentlyapartytomateriallyaffect Toyota’s consolidated financialposition. Toyota’s average number of temporaryemployees on a consolidated basiswas 87,120 during fiscal 2022. 6.ESHAREOWNERSHIP ForinformationonthenumberofsharesofToyota’scommonstockheldbyeachmemberoftheboardof directors and audit & supervisoryboard member as of June 2022, see “— Directorsand Senior Management.” NoneofToyota’ssharesofcommonstockentitlestheholdertoanypreferentialvotingrights.Asof March31,2022,Toyotadoesnothaveanystockoptionplanforwhichstockoptionsorstockacquisitionrights are exercisable or will becomeexercisable in the future. 89 ![]() Toyota’sboardofdirectorsresolvesthesharecompensationwithinthemaximumsharecompensation amount of4.0 billionyen peryear (also,the totalnumberof Toyota’sshares ofcommon stockto be allottedshall notexceedamaximumof4millionsharesperyearintotalforeligiblemembersoftheboardofdirectors (excludingoutsidemembersoftheboardofdirectors))establishedatthe115thOrdinaryGeneralShareholders’ MeetingheldonJune13,2019andthe118thOrdinaryGeneralShareholders’MeetingheldonJune15,2022. The overview of the share compensation isas follows. Eligiblepersons Members of the board of directorsof Toyota (excluding outside membersof the board of directors) Totalamountoftheshare compensation Maximum of 4.0 billion yen per year Amountoftheshare compensation payabletoeachmemberofthe boardofdirectors Set each year considering factorssuch as corporate results, duties,and performance Typeofsharestobeallotted andmethodofallotment Issue or disposal of common stock (withtransfer restrictionsunder an allotment agreement) Totalnumberofsharestobe allotted Maximum of 4,000,000 shares per year intotal to eligible membersof the board of directors (Provided, however, that if a stock split,including a gratis allotment,or a reverse stock split of Toyota’scommon stock is carried out afterJune 15, 2022, or in case of events that otherwiserequire an adjustment to thetotal number of Toyota’s shares of common stockto be issued or disposed of as restricted share compensation,such total number of shareswill be adjusted to a reasonable extent.) Amounttobepaid Determined by the board of directorsof Toyota based on the closing price of Toyota’s common stock on the Tokyo Stock Exchange on thebusiness day prior to each resolution of theboard of directors, within a rangethat is not particularly advantageous toeligible members of the boardof directors Transferrestrictionperiod A period of three to fifty yearsfrom the allotment date,which is determined by the board of directors of Toyota in advance Conditionsforremovalof transferrestrictions Restrictions will be removed upon theexpiration of the transferrestriction period. However, restrictions will also beremoved in the case of expirationof the term of office, death, or otherlegitimate reasons. GratisacquisitionbyToyota Toyota will be able to acquire all allottedshares without considerationin the case of violations of laws and regulationsor other reasons specifiedby the board of directors of Toyota duringthe transfer restrictionperiod. MembersoftheboardofdirectorsofToyotawithforeigncitizenshiparenoteligiblefortheshare compensation. Toyota also has anemployee stock ownershipassociation inJapan for employeesand full time and parttime companyadvisors.Membersoftheemployeestockownershipassociationsetasidecertainamountsfromtheir monthlysalaryandbonusestopurchaseToyota’scommonstockthroughtheemployeestockownership association. Asof March31, 2022, theemployee stockownership associationheld 74,096,504 shares ofToyota’s common stock. 90 ![]() ITEM7.MAJORSHAREHOLDERSANDRELATEDPARTYTRANSACTIONS 7.AMAJORSHAREHOLDERS AsofMarch31,2022,16,314,987,460sharesofToyota’scommonstock(ofwhich2,536,685,916shares weretreasurystockand13,778,301,544shareswereoutstanding)wereissued.Toyotaresolvedatitsboardof directorsmeetingheldonDecember14,2020toexerciseToyota’scashcalloptiontoacquirealloutstanding ModelAAClassSharesand,subjecttosuchacquisition,tocancelallModelAAClassSharespursuanttothe CompaniesAct.ToyotacompletedtheacquisitionofalloutstandingModelAAClassSharesonApril2,2021 andcancelledthemonApril3,2021.InformationconcerningbeneficialownershipofToyota’scommonstockin thetablebelowwaspreparedfrominformationknowntoToyotaorthatcould beascertainedfrom publicfilings, includingfilingsmadebyToyota’sshareholdersregardingtheirownershipofToyota’scommonstockunderthe Financial Instruments and Exchange Law of Japan. UndertheFinancialInstrumentsandExchangeLaw,anypersonwhobecomes,beneficiallyandsolelyor jointly,aholder,including,butnotlimitedto,adeemedholderwhomanagessharesforanotherholderpursuant toadiscretionaryinvestmentagreement,ofmorethan5%ofthetotalissuedsharesofacompanylistedona Japanesestockexchange(includingAmericanDepositaryShares,orADSs,representingsuchshares)mustfilea report concerning theshareholding with the directorof the relevant localfinance bureau. A similar reportmust be filed,withcertainexceptions,ifthepercentageofsharesheldbyaholder,solelyorjointly,ofmorethan5%of thetotalissuedsharesofacompanyincreasesordecreasesby1%ormore,orifanychangetoamaterialmatter set forth in any previously filedreports occurs. BasedoninformationknowntoToyotaorthatcanbeascertainedfrompublicfilings,thefollowingtable setsforththebeneficialownershipofholdersof5%ormoreofToyota’scommonstockasofthemostrecent practicable date. NameofBeneficialOwner Numberof Sharesof CommonStock (inthousands) Percentageof Outstanding VotingSharesof CommonStock Toyota Industries Corporation ........................................ 1,192,3318.68 AccordingtoTheBankofNewYorkMellon,depositaryforToyota’sADSs(the“Depositary”),asof March31,2022,295,944,975sharesofToyota’scommonstockwereheldintheformofADSsandtherewere 1,766ADSholdersofrecordand431,983beneficialownersintheUnitedStates.AccordingtoToyota’sregister ofshareholders,asofMarch31,2022,therewere813,254holdersofcommonstockofrecordworldwide.Asof March31,2022,therewere479recordholdersofToyota’scommonstockwithaddressesintheUnitedStates, whoseshareholdingsrepresentedapproximately10.2%oftheissuedcommonstockonthatdate.Becausesome oftheseshareswereheldbybrokersorothernominees,thenumberofrecordholderswithaddressesinthe United States might not fully show thenumber of beneficial owners in theUnited States. None of Toyota’s shares of common stock entitlesthe holder to any preferentialvoting rights. ToyotacancelledalloftheFirstSeriesModelAAClassSharesonApril3,2021,andassuch,thereareno holders of First Series Model AA Class Shares. TotheextentknowntoToyota,Toyotaisnotownedorcontrolled,directlyorindirectly,byanother corporation, any foreign governmentor any natural or legal person. Toyota knows of no arrangements the operationof which may at a later timeresult in a change of control. Toyota resolvedatitsboardofdirectorsmeetingheldonMay12,2021to spliteach shareofcommonstock ofToyotaasofSeptember30,2021,therecorddate,intofiveshares,effectiveOctober1,2021.Toyotadecided 91 todosoinordertocreateanenvironmentinwhichToyotasharesaremoreaccessibletoabroaderbaseof investorsbyreducingthepriceperinvestmentunit.Inconjunctionwiththestocksplit,inaccordancewith Article184,Paragraph2oftheCompaniesAct,Toyotaamendeditsarticlesof incorporationto increasethe total numberofsharesofcommonstockwhichToyotaisauthorizedtoissuefrom10,000,000,000to50,000,000,000 on October 1, 2021, the effective date ofthe stock split. 7.BRELATEDPARTYTRANSACTIONS BusinessRelationships Toyotapurchasesmaterials,suppliesandservices,amongothers,fromnumeroussuppliersthroughoutthe worldintheordinarycourseofbusiness,includingToyota’sassociatesandjointventuresaccountedforbythe equitymethodandthosefirmswithwhichcertainmembersofToyota’sboardofdirectorsareaffiliated.Toyota purchasedmaterials,suppliesandservices,amongothers,fromtheseassociatesandjointventuresintheamount of¥7,947.0billioninfiscal2022.Toyotaalsosellsitsproductsandservices,amongothers,toToyota’s associatesandjointventuresaccountedforbytheequitymethodandfirmswithwhichcertainmembersof Toyota’sboardofdirectorsareaffiliated.Toyotasoldproductsandservices,amongothers,totheseassociates andjointventuresentitiesintheamountof¥2,362.3billioninfiscal2022.Seenote32ofToyota’sconsolidated financialstatementsforadditionalinformationregardingToyota’sinvestmentsinandtransactionswith associates and joint ventures. Loans Toyotaregularlyhastradeaccountsandotherreceivablesby,andaccountspayableto,Toyota’sassociates andjointventuresaccountedforbytheequitymethodandfirmswithwhichcertainmembersofToyota’sboard ofdirectorsareaffiliated.Toyotahadoutstandingtradeaccountsandotherreceivablesbytheseassociatesand jointventuresintheamountof¥366.4billionasofMarch31,2022.Toyotahadoutstandingtradeaccountsand other payables to these associatesand joint ventures in the amountof ¥1,091.5 billion as of March 31, 2022. Toyota, fromtimetotime,providesshort-to medium-termloans toitsassociatesand jointventures,aswell asloansunderaloanprogramestablishedbycertainsubsidiariestoassisttheirexecutivesandmembersofthe boardofdirectorswiththepurchaseofhomes.AsofMarch31,2022,anaggregateamountof¥185.5billionin loanswasoutstandingtoitsassociatesandjointventuresaccountedforbytheequitymethod.Toyotabelieves that each of these loans was enteredinto in the ordinary course of business. 7.CINTERESTSOFEXPERTSANDCOUNSEL Not applicable. ITEM8.FINANCIALINFORMATION 8.ACONSOLIDATEDSTATEMENTSANDOTHERFINANCIALINFORMATION 1-3.ConsolidatedFinancialStatements.Toyota’sauditedconsolidatedfinancialstatementsareincludedunder “Item18—FinancialStatements.”ExceptforToyota’sconsolidatedfinancialstatementsincludedunder Item 18, no other informationin this annual report has been auditedby Toyota’s auditors. 4.Not applicable. 5.Not applicable. 6.ExportSales.See“OperatingandFinancialReviewandProspects—OperatingResults—Overview— Geographic Breakdown.” 7.LegalandArbitrationProceedings.See“InformationontheCompany—BusinessOverview—Legal Proceedings.” 8.Dividend Information. 92 ![]() Toyotanormallypaysdividendstwiceperyear,includinganinterimdividendandayear-enddividend. Toyota’sarticlesofincorporationprovidethatretainedearningscanbedistributedasdividendspursuanttoa resolutionofitsboardofdirectors.Toyota’sboardofdirectorsresolvestopayyear-enddividendstoholdersof common stock and registered pledgeesof common stock of record as ofMarch 31, the record date, in each year. Atthe111thOrdinaryGeneralShareholders’MeetingheldinJune2015,Toyota’sshareholdersapproved amendmentstoToyota’sarticlesofincorporationpermittingtheissuanceofModelAAClassSharesinthe future.ToyotaresolvedatitsboardofdirectorsmeetingheldonDecember14,2020toexerciseToyota’scash calloptiontoacquirealloutstandingFirstSeriesModelAAClassSharesand,subjecttosuchacquisition,to cancelallFirstSeriesModelAAClassSharespursuanttotheCompaniesAct.Toyotacompletedtheacquisition ofalloutstandingFirstSeriesModelAAClassSharesonApril2,2021andcancelledthemonApril3,2021.At the117thOrdinaryGeneralShareholders’MeetingheldinJune2021,Toyota’sshareholdersapproved amendmentstoToyota’sarticlesofincorporationto,amongotherthings,eliminatetheFirstSeriesModelAA ClassSharesthroughtheFifthSeriesModelAAClassSharesasclassesofToyota’scapitalstock,effective June 16, 2021.Prior tothe June16, 2021amendment, the articlesof incorporationprovidedthat, in theevent that Toyotapaidayear-enddividendtoholdersofcommonstock,itwould payayear-enddividendtoanyholdersof ModelAAClassSharesorregisteredpledgeesofModelAAClassSharesofrecordasoftherecorddateforthe year-enddividend,intheamountpayableontheModelAAClassSharespursuanttotheirterms(“AA Dividends”), in preference to holdersof common stock or registeredpledgees of common stock. Inadditiontotheseyear-enddividends,Toyotamaypayaninterimdividendintheformofcash distributionsfromitsdistributablesurplustoholdersofcommonstockandpledgeesofcommonstockofrecord asofSeptember30,therecorddate,ineachyearbyaresolutionofitsboardofdirectors.PriortotheJune16, 2021amendment,thearticlesofincorporationprovidedthat,intheeventthatToyotapaidsuchinterim dividends,Toyotawouldpayanamountequivalenttoone-halfoftheAADividendsasaninterimdividendto anyholdersofModelAAClassSharesorregisteredpledgeesofModelAAClassSharesofrecordasofthe record datefortheinterimdividend, inpreferencetoholdersof commonstockor registeredpledgeesof common stock. Inaddition,undertheCompaniesAct,dividendsmaybepaidtoholdersofcommonstockandpledgeesof recordofcommonstockasofanyrecorddate,otherthanthosespecifiedabove,assetforthinToyota’sarticles ofincorporationorasdeterminedbyitsboardofdirectorsfromtimetotime.UndertheCompaniesAct, dividendsmaybedistributedincashor(exceptinthecaseofinterimdividendsmentionedinthethirdpreceding paragraph) in kind, subject to limitationson distributablesurplus and to certain otherconditions. ThefollowingtablesetsforththedividendsdeclaredpershareofcommonstockbyToyotaforeachofthe periods shown.The periodsshown are thesix monthsended on thatdate. The U.S. dollarequivalents forthe cash dividendsshownarebasedonthenoonbuyingrateforJapaneseyenonthelastdateofeachperiodsetforth below. CashDividends perCommonShare PeriodEndedYenU.S.dollars September 30, 2019 ......................................................... 100.00.92 March 31, 2020 ............................................................ 120.01.11 September 30, 2020 ......................................................... 105.00.99 March 31, 2021 ............................................................ 135.01.22 September 30, 2021 ......................................................... 120.01.07 March 31, 2022 ............................................................ 28.01.15 <140.0>\*<0.23>\* \*Thenumbersinanglebracketsarecalculatedbasedona“pre-stocksplit”basis,thatis,ontheassumptionthat the five-for-one stock splitthat Toyota effected on October 1, 2021 had nottaken place. 93 Toyotadeemsthebenefitofitsshareholdersasoneofitsprioritymanagementpolicies,anditwillcontinue toworktoimproveitscorporateculturetorealizesustainablegrowthinordertoenhanceitscorporatevalue. Toyotawillstriveforthestableandcontinuouspaymentofdividends,seekingtomaintainandimproveuponthe consolidated payout ratio of 30% toits shareholders. Withaviewtosurvivingtoughcompetitionandtransitioningtoamobilitycompany,Toyotawillaimto utilizeitsinternalfundsmainlyforinvestmentingrowthforthenextgeneration,suchasenvironmental technologiestoachieveacarbon-neutralsocietyandsafetytechnologiesforthesafetyandsecurityofits customers, and also for the stakeholderssuch as employees, businesspartners and local communities. Consideringthesefactors,withrespecttothedividendsforfiscal2022,Toyotahasdeterminedtopaya year-end dividendof 28yen (140yen on apre-stocksplit basis)per shareof common stockby a resolutionof the boardofdirectorspursuantto Toyota’sarticlesofincorporation.As aresult,combinedwiththeinterimdividend of24yen(120yenonapre-stocksplitbasis)pershareofcommonstock,theannualdividendwillbe52yen (260 yen on a pre-stocksplit basis)per shareof common stock,and the total amount of the dividendson common stock for the year will be 718.2 billionyen. Furthermore,Toyotaresolved,atitsboardofdirectorsmeetingheldonMay11,2022,torepurchaseupto 140millionsharesofitscommonstockbetweenJune17,2022andSeptember30,2022atatotalmaximum purchase price of 200 billion yen. Toyotaintendstorepurchasesharesmoreflexiblythanbeforewiththeaimofpromotingcapitalefficiency bycomprehensivelytakingintoconsiderationitsinvestmentingrowth,levelofitsdividends,itscashreserves and the price level of its commonstock. Specifically,ofthetotalmaximumpurchasepriceof200billionyen,amaximumof100billionyen willbe usedforsharerepurchasesthataretobeconductedmoreflexiblythanbeforebasedonfactorssuchastheprice level of its common stock. 8.BSIGNIFICANTCHANGES Exceptasdisclosedinthisannualreport,therehavebeennosignificantchangessincethedateofToyota’s latest annual financial statements. ITEM9.THEOFFERANDLISTING 9.ALISTINGDETAILS SharesofToyotacommonstockaretradedontheTokyoStockExchangeandtheNagoyaStockExchange underthetickersymbol“7203”inJapan,andontheLondonStockExchangeunderthetickersymbol“TYT.” Toyota’sADSs,eachrepresentingtensharesofToyotacommonstock,arelistedontheNewYorkStock Exchange, or NYSE, under the ticker symbol “TM.” 9.BPLANOFDISTRIBUTION Not applicable. 9.CMARKETS The primary tradingmarket forToyota’s common stockis the TokyoStock Exchange. The common stockis also listed on the Nagoya Stock Exchange and on the London Stock Exchange. 94 SinceSeptember29,1999,AmericanDepositaryShares,eachequaltotensharesofToyota’scommon stock,havebeentradedandlistedontheNewYorkStockExchangethroughasponsoredADSfacilityoperated byTheBankofNewYorkMellon,asDepositary.Priortothattime,Toyota’sADSswerelistedontheNasdaq SmallCap Market through five unsponsoredADS facilities. 9.DSELLINGSHAREHOLDERS Not applicable. 9.EDILUTION Not applicable. 9.FEXPENSESOFTHEISSUE Not applicable. ITEM10.ADDITIONALINFORMATION 10.ASHARECAPITAL Toyota resolvedatitsboardofdirectorsmeetingheldonMay12,2021to spliteach shareofcommonstock ofToyotaasofSeptember30,2021,therecorddate,intofiveshares,effectiveOctober1,2021.Toyotadecided todosoinordertocreateanenvironmentinwhichToyotasharesaremoreaccessibletoabroaderbaseof investors by reducing the price perinvestment unit. Inconjunctionwiththestocksplit,inaccordancewithArticle184,Paragraph2oftheCompaniesAct, Toyotaamendeditsarticlesofincorporationtoincreasethetotalnumberofsharesofcommonstockwhich Toyotaisauthorizedtoissuefrom10,000,000,000to50,000,000,000onOctober1,2021,theeffectivedateof the stock split. 10.BMEMORANDUMANDARTICLESOFASSOCIATION Exceptasotherwisestated,setforthbelowisinformationrelatingtoToyota’scommonstock,including brief summariesof the relevant provisionsof Toyota’s articles of incorporationand share handling regulations,as currentlyineffect,andoftheCompaniesAct,ActConcerningBook-EntryTransferofCorporateBonds,Shares and Other Securities and relatedlegislation. General Toyota’sauthorizednumberofsharesasofMarch31,2022was50,000,000,000shares,ofwhich 16,314,987,460sharesofcommonstockhavebeenissued.Inconjunctionwiththecancellationofallofthe Model AAClass SharesonApril3, 2021,Toyota’s articlesof incorporationwereamendedat the117th Ordinary General Shareholders’ Meeting heldin June 2021. Toyotadoesnotissuesharecertificatesforitsshares.InaccordancewiththeCompaniesAct,theBook- EntryTransferActandToyota’sarticlesofincorporation,Toyota’scommonstockarerecordedorregisteredon (i)Toyota’sregisterofshareholdersand(ii)transferaccountbooksoftheJapanSecuritiesDepositoryCenter, Inc.(“JASDEC”)whichisabook-entrytransferinstitution,andsecuritiesfirms,banksorotheraccount managementinstitutions.Thetransferofcommonstockwillgenerallybecomeeffectiveoncethetransferis recordedinthetransferee’saccount.TherearenorestrictionsimposedbyToyota’sarticlesofincorporationor sharehandlingregulationsonthetransferofcommonstock.Inordertoassertshareholders’rightsagainst 95 Toyota,ashareholdermustgenerallyhavehisorhernameandaddressrecordedorregisteredonToyota’s registerofshareholders.Aholderofcommonstockcanassertminorityshareholders’rights(shareholders’rights forwhichToyotahasnotsetarecorddate)againstToyotaifJASDECprovidesanindividualshareholdernotice toToyotaupontheshareholder’srequest.TheshareholderofdepositedsharesunderlyingtheADSsisthe Depositary for the ADSs. Accordingly, holders of ADSs will notbe able directly to assertshareholders’ rights. Aholderofcommonstockmusthaveatransferaccounttotransfershares.Holdersofcommonstockwho donothaveatransferaccountwithJASDECmusthaveanaccountwithanaccountmanagementinstitutionthat directlyorindirectlyhasatransferaccountwithJASDEC.OnceToyotadecidesontherecorddateforits shareholders’meetingormakesarequesttoJASDECbasedonjustifiablegrounds,JASDECwillpromptly providetoToyotanames,addressesandotherinformationwithrespecttotheholdersofToyota’scommonstock whoarerecordedonthetransferaccountbooksofJASDEC oraccountmanagementinstitutions.Uponreceiving suchinformation,ToyotawillrecordorregistersuchinformationreceivedfromJASDEConitsregisterof shareholders.Accordingly,holdersofcommonstockrecordedorregisteredonToyota’sregisterofshareholders willbetreatedasholdersofcommonstockofToyotaandmayexerciserights,suchasvotingrights,andwill receivedividends(ifany)andnoticestoholdersofcommonstockdirectlyfromToyota.Holdersofcommon stockwishingtoassertminorityshareholders’rightsagainstToyotamustrequestanindividualshareholder notice toJASDEC orthe accountmanagementinstitutionat whichthe shareholderhas openeda transferaccount. Inresponsetosuchrequest,JASDECwillprovidetheindividualshareholdersnoticetoToyota.Aholderof common stockmayasserthisorherminorityshareholders’rightsagainstToyotafor aperiodoffourweeksafter thedatetheindividualshareholdernoticeisprovidedtoToyota.Thesharesheldbyapersonwhoisdeemedto hold additional shares accordingto the transfer account books areaggregated for these purposes. CorporatePurpose Article2ofToyota’sarticlesofincorporationstatesthatitspurposeistoengageinthefollowing businesses: •the manufacture,sale, leasing and repairof: •motorvehicles,industrialvehicles,ships,aircraft,othertransportationmachineryandapparatus, spacecraft and space machineryand apparatus, and parts thereof; •industrialmachinery and apparatus, othergeneral machinery and apparatus,and parts thereof; •electricalmachinery and apparatus,and parts thereof; and •measuringmachinery and apparatus, medicalmachinery and apparatus, and partsthereof; •the manufactureand sale of ceramicsand products of synthetic resins,and materials thereof; •themanufacture,saleandrepairofconstructionmaterialsandequipment,furnishingsandfixturesfor residential buildings; •theplanning,designing,supervision,execution andundertaking ofconstructionworks, civilengineering works, land development, urban developmentand regional development; •the sale,purchase, leasing, brokerage and managementof real estate; •theserviceofinformationprocessing,informationcommunicationsandinformationsupplyandthe development, sale and leasing of software; •thedesignanddevelopmentofproductsalessystemsthatutilizenetworkssuchastheInternet,sale, leasingandmaintenanceofcomputersincludedwithinsuchsystems,andsaleofproductsbyutilizing such systems; •theinlandtransportation,marinetransportation,airtransportation,stevedoring,warehousingand tourism businesses; 96 •theprinting,publishing,advertisingandpublicity,generalleasing,securityandworkersdispatch businesses; •thecreditcardoperations,purchaseandsaleofsecurities,investmentconsulting,investmenttrust operation, and other financialservices; •theoperationandmanagementofsuchfacilitiesasparkinglots,showrooms,educationalfacilities, medical carefacilities,sportsfacilities,marinas, airfields,foodand drinkstands andrestaurants, lodging facilities, retailstores and others; •the non-lifeinsurance agency business and thelife insurance agency business; •theproductionandprocessingbyusingbiotechnologyofagriculturalproductsincludingtrees,andthe sale of such products; •the power generationand the supply and sale of electricpower; •the saleof goods related to each of the precedingitems and mineraloil; •theconductingof engineering,consulting,invention andresearchrelating toeach ofthe precedingitems and the utilization of such inventionand research; and •any businessesincidental to or relatedto any of the preceding items. Dividends Dividends—General Toyotanormallypaysdividendstwiceperyear,includinganinterimdividendandayear-enddividend. Toyota’sarticlesofincorporationprovidethatretainedearningscanbedistributedasdividendspursuanttoa resolutionofitsboardofdirectors.Toyota’sboardofdirectorsresolvestopayyear-enddividendsto shareholders and registered pledgeesof record as of March 31, the recorddate, in each year. Inadditiontotheseyear-enddividends,Toyotamaypayaninterimdividendintheformofcash distributions fromits distributablesurplusto holders ofstock and pledgeesof stock of recordas of September30, the record date, in each year by a resolutionof its board of directors. Inaddition,undertheCompaniesAct,dividendsmaybepaidtoshareholdersandpledgeesofrecordasof anyrecorddate,otherthanthosespecifiedabove,assetforthbyToyota’sarticlesofincorporationoras determinedbyitsboardofdirectorsfromtimetotime.UndertheCompaniesAct,dividendsmaybedistributed incashor(exceptinthecaseofinterimdividendsmentionedinthesecondprecedingparagraph)inkind,subject to limitations on distributablesurplus and to certainother conditions. Dividends—DistributableAmount UndertheCompaniesAct,Toyotaispermittedtomakedistributionsofsurplustotheextentthatthe aggregatebookvalueoftheassetstobedistributedtoshareholdersdoesnotexceedthedistributableamount providedforbytheCompaniesActandtheordinanceoftheMinistryofJusticeasattheeffectivedateofsuch distribution of surplus. TheamountofsurplusatanygiventimeshallbetheamountofToyota’sassetsandthebookvalueof Toyota’s treasury stock aftersubtracting and adding the amounts ofitems provided for by the CompaniesAct and theordinanceoftheMinistryofJustice,andtheamountofsurplusdistributablefordividendsiscalculatedby addingtoandsubtractingfromthisamounttheamountsofitemsprovidedforbytheCompaniesActandthe ordinance of the Ministry of Justice. 97 Dividends—Prescription Underitsarticlesofincorporation,Toyotaisnotobligatedtopayanydividendsincashwhichareleft unclaimed for a period of threeyears after the date on which theyfirst became payable. CapitalAccounts The amountofthecashorassetspaidorcontributedbysubscribersfornewshares(withcertainexceptions) isrequiredtobeaccountedforasstatedcapital,althoughToyotamayaccountforanamountnotexceeding one-half of such cash or assets asadditional paid-in capital. UndertheCompaniesAct,Toyotamayreduceitsadditionalpaid-incapitalandlegalreservewithout limitationontheamounttobereduced,generally,byaresolutionofageneralshareholders’meetingandifso decidedbythesameresolution,mayaccountforthewholeoranypartoftheamountofthereductionof additionalpaid-incapitalasstatedcapital.Thewholeoranypartofsurpluswhichmaybedistributedas dividends may also be transferredto stated capital by a resolutionof a general shareholders’meeting. StockSplits Toyotamayatanytimesplittheoutstandingsharesintoagreaternumberofsharesbyaresolutionofthe boardofdirectors.Toyotamustgivepublicnoticeofthestocksplit,specifyingarecorddateforthestocksplit, not less than two weeks prior to the recorddate. ConsolidationofShares Toyota may at anytime consolidateshares in issueinto a smallernumber ofshares by a specialshareholders resolution(asdefinedin“VotingRights”).Whenaconsolidationofsharesistobemade,Toyotamustgive public notice of certain matterstwo weeks prior to the effectivedate of the consolidation. JapaneseUnitShareSystem General .ConsistentwiththerequirementsoftheCompaniesAct,Toyota’sarticlesofincorporationprovide that100sharesconstituteone“unit.”Althoughthenumberofsharesconstitutingaunitisincludedinthe articles ofincorporation,anyamendmenttothearticlesofincorporationreducing(butnotincreasing)thenumberof sharesconstitutingaunitoreliminatingtheprovisionsfortheunitofsharesmaybemadebyaresolutionofthe boardofdirectorsratherthanbyaspecialshareholdersresolution,whichisotherwiserequiredforamendingthe articles of incorporation. VotingRightsundertheUnitShareSystem .Undertheunitsharesystem,shareholdershaveonevoting right for each unit of sharesthat they hold. Any number of shares lessthan a full unit will carry no votingrights. PurchasebyToyotaofSharesConstitutingLessThanaUnit .Aholderofsharesconstitutinglessthana fullunitmayrequireToyotatopurchasethosesharesattheirmarketvalueinaccordancewiththeprovisionsof Toyota’s share handling regulationsand the Companies Act. VotingRights Toyotaholdsitsordinarygeneralshareholders’meetingeachyear.Inaddition,Toyotamayholdan extraordinarygeneralshareholders’meetingwhenevernecessarybygivingatleasttwoweeks’advancenotice. UndertheCompaniesAct,noticeofanyshareholders’meetingmustbegiventoeachshareholderhavingvoting rightsor,inthecaseofanon-residentshareholder,tohisorherresidentproxyormailingaddressinJapanin accordance with Toyota’s share handlingregulations, at least two weeks priorto the date of the meeting. 98 Holdersofcommonstockshallhavevotingrightsexercisableatageneralshareholders’meeting.Aholder ofsharesconstitutingoneormorewholeunitsisentitledtoonevoteperunitofsharessubjecttothelimitations on votingrightssetforthinthisparagraph.Ingeneral,under theCompaniesAct, aresolutioncanbe adoptedata generalshareholders’meetingbyamajorityoftheshareshavingvotingrightsrepresentedatthemeeting.The CompaniesActandToyota’sarticlesofincorporationrequireaquorumfortheelectionofmembersoftheboard ofdirectorsandaudit&supervisoryboardmembersofnotlessthanone-thirdofthetotalnumberofoutstanding shareshavingvotingrights.Toyota’sshareholdersarenotentitledtocumulativevotingintheelectionof membersoftheboardofdirectors.Acorporateshareholder,themanagementofwhichissubstantiallyunder Toyota’scontrolasprovidedbyanordinanceoftheMinistryofJustice,eitherthroughtheholdingofvoting rights or for any other reason, doesnot have voting rights. PursuanttotheamendmentstotheCompaniesActwitheffectonSeptember1,2022whichappliestoall Japaneselistedcompanies,includingToyota,andtheamendmentstoitsarticlesofincorporationapprovedatthe 118thGeneralShareholders’MeetingheldonJune15,2022,Toyotawillimplementtheelectronicprovision measures(“ElectronicProvision”)fortheinformationcontainedinthereferencematerials,etc.forgeneral shareholders’ meetings to beheld on or after March 1, 2023. AftertheElectronicProvisiongoesintoeffect,theconvocationnoticeofshareholders’meetingmustset forththeinformationcontainedinthereferencematerials,etc.forgeneralshareholders’meetingsbeingprovided throughtheElectronicProvisionandtheURL ofthewebsiteusedfortheElectronicProvision,inadditionto the place,thetimeandthepurposeofthemeeting.Theinformationcontainedinthereferencematerials,etc.for generalshareholders’meetingsmustbepostedonawebsitefromtheearlierofthedatethreeweekspriortothe datesetforthemeetingorthedateonwhichtheconvocationnoticeofshareholders’meetingisdispatcheduntil thedateonwhichthreemonthshaveelapsedfromthemeeting.Ingeneral,anyshareholderisentitledtorequest printedpapercopiesoftheinformationcontainedinthereferencematerials,etc.forgeneralshareholders’ meetings by the record date forvoting rights at the relevantgeneral shareholders’ meeting. Shareholdersmayexercisetheirvotingrightsbyattendingthegeneralshareholders’meetingorinwriting bymail.ShareholderswhochoosetoexercisetheirvotingrightsbymailmustfilloutandreturntoToyotathe votingrightexerciseformenclosedwiththeconvocationnoticeofthegeneralshareholders’meetingbythedate specifiedinsuchconvocationnotice.Inaddition,fromthegeneralshareholders’meetingforfiscal2009, shareholdersmayexercisetheirvotingrightsthroughtheinternet.Shareholderselectingtoexercisetheirvoting rightsthroughtheinternetmustlogontothe“WebsitetoExerciseVotingRights”usingtheloginIDand temporarypasswordprovidedinthevotingrightexerciseformenclosedwiththeconvocationnoticeandsubmit theirvotesbyadatespecifiedintheconvocationnotice,followinginstructionsappearingonthewebsite. InstitutionalinvestorsmayalsousetheElectronicProxyVotingPlatformoperatedbyInvestorCommunications Japan to exercisetheir voting rightsthrough theuse of theInternet, if such institutionalinvestor appliesto use the platforminadvance.Shareholdersmayalsoexercisetheirvotingrightsthroughproxies,providedthatthose proxiesarealsoshareholderswhohavevotingrights.Toyotamayrefuseashareholderhavingtwoormore proxies attend a general shareholders’meeting. TheCompaniesActprovidesthataquorumofatleastone-thirdofoutstandingshareswithvotingrights must be present at a shareholders’meeting to approve any materialcorporate actions suchas: (1)anyamendmentofthearticlesofincorporationwithcertainexceptionsinwhichashareholders’ resolution is not required; (2)acquisitionof its own shares from a specificparty; (3)consolidationof shares; (4)anyissueortransferofitssharesata“speciallyfavorable”price(oranyissueof stockacquisition rightsorbondswithstockacquisitionrightsat“speciallyfavorable”conditionsbyToyota)toany persons other than shareholders; 99 (5)the removalof an audit & supervisory board member; (6)theexemptionofliabilityofadirectororaudit&supervisoryboardmemberwithcertain exceptions; (7)a reduction ofstated capital which meets certainrequirements with certainexceptions; (8)a distributionof in-kind dividends which meetscertain requirements; (9)dissolution,merger,or consolidationwith certainexceptions inwhich a shareholders’resolution is not required; (10)the transfer of the whole or a material part ofthe business; (11)thetransferinentiretyorinpartofsharesorequityinterestofasubsidiaryundercertain conditions; (12)thetakingoveroftheentirebusinessofanyothercorporationwithcertainexceptionsinwhicha shareholders’ resolution isnot required; (13)shareexchangeorsharetransferforthepurposeofestablishing100%parent-subsidiary relationships with certainexceptions in which a shareholders’resolution is not required; (14)company split with certain exceptions in which a shareholders’resolution is not required;or (15)share delivery with certain exceptions in which a shareholders’resolution is not required. At least two-thirds of the shareshaving voting rights representedat the meeting must approve theseactions. ThevotingrightsofholdersofADSsareexercisedbytheDepositarybasedoninstructionsfromthose holders. RightstobeAllottedShares Shareholdershavenopreemptiverightsunder Toyota’sarticlesof incorporation.Under theCompaniesAct, theboardofdirectorsmay,however,determinethatshareholdersshallbegivenrightstobeallottedsharesor stockacquisitionrightsonrequestinconnectionwithaparticularissueortransferofshares,orissueofstock acquisitionrights,respectively.Inthiscase,suchrightsmustbegivenonuniformtermstoallshareholdersasof a specified record date by at leasttwo weeks’ prior public noticeto shareholders of the record date. Rightstobeallottedsharesarenontransferable.However,ashareholdermaybeallottedstockacquisition rights without consideration thereto,and may transfer such rights. LiquidationRights IntheeventofaliquidationofToyota,theassetsremainingafterpaymentofalldebts,liquidationexpenses andtaxeswillbedistributedamongtheshareholdersorregisteredpledgeesinproportiontotherespective number of shares they own. LiabilitytoFurtherCallsorAssessments AllofToyota’scurrentlyoutstandingshares,includingsharesrepresentedbytheADSs,arefullypaidand nonassessable. TransferAgent MitsubishiUFJ TrustandBankingCorporationisthetransferagentfor allshares.MitsubishiUFJTrust and BankingCorporation’sofficeislocatedat4-5,Marunouchi1-chome,Chiyoda-ku,Tokyo,100-8212Japan. MitsubishiUFJTrustandBankingCorporationmaintainsToyota’sregisterofshareholdersandrecordstransfers of record ownership (in the case ofcommon stock, upon receiving notificationfrom JASDEC). 100 RecordDate ThecloseofbusinessonMarch31istherecorddateforToyota’syear-enddividends,ifpaid.Aholderof sharesconstitutingoneormorewholeunitswhoisrecordedorregisteredasaholderonToyota’sregisteratthe closeofbusinessasofMarch31isalsoentitledtoexerciseshareholders’votingrightsattheordinarygeneral shareholders’meetingwithrespecttothebusinessyearendingonMarch31.Thecloseofbusinesson September30ofeachyearistherecorddateforinterimdividends,ifpaid.Inaddition,Toyotamaysetarecord date fordeterminingthe shareholdersentitledto otherrightsand forotherpurposesby givingatleasttwo weeks’ prior public notice. Thesharesgenerallytradeex-dividendorex-rightsontheJapanesestockexchangesonthebusinessday precedingarecorddate(oriftherecorddateisnotabusinessday,onebusinessdaypriorthereto),forthe purpose of dividends or rights offerings. AcquisitionbyToyotaofShares Toyotamayacquireitsownshares(i)throughastockexchangeonwhichsuchsharesarelistedorbyway oftenderoffer(pursuanttoanordinaryresolutionofageneralshareholders’meetingoraresolutionoftheboard ofdirectors),(ii)bypurchasefromaspecificparty(pursuanttoaspecialresolutionofageneralshareholders’ meeting)or(iii)fromasubsidiaryofToyota(pursuanttoaresolutionoftheboardofdirectors).Whensuch acquisitionofsharesismadebyToyotafromaspecificpartyotherthanasubsidiaryofToyota,anyother shareholdermaymakeademandtoarepresentativedirector,morethanfivecalendardayspriortotherelevant shareholders’meeting,thatToyotaalsopurchasethesharesheldbysuchholder.However,theacquisitionofits own sharesata pricenotexceedingthe marketpricetobe providedunderanordinance oftheMinistryofJustice willnottriggertherightofanyshareholdertoincludehim/herasthesellerofhis/hersharesinsuchproposed purchase. Anyacquisitionofsharesmustsatisfycertainrequirementsthatthetotalamountoftheacquisitionprice may not exceed the amount of the distributabledividends. See “— Dividends.” SharesacquiredbyToyotamaybeheldbyitforanyperiodormaybecancelledbyresolutionoftheboard ofdirectors.Toyotamayalsotransfertoanypersonthesharesheldbyit,subjecttoaresolutionoftheboardof directors, andsubject alsoto otherrequirementsapplicableto theissuance ofnew shares.Toyota mayalso utilize itstreasurystockforthepurposeoftransfertoanypersonuponexerciseofstockacquisitionrightsorforthe purposeofacquiringanothercompanybywayofmerger,shareexchangeorcorporatesplitthroughexchangeof treasury stock for shares orassets of the acquired company. The Companies Act generally prohibits anysubsidiary of Toyota from acquiringshares of Toyota. ReportofSubstantialShareholdings TheFinancialInstrumentsandExchangeLawofJapanandregulationsundertheLawrequireanyperson whohasbecomeaholder(togetherwithitsrelatedpersons)ofmorethan5%ofthetotalissuedsharesofa companylistedonanyJapanesestockexchange(includingADSsrepresentingsuchshares)tofilewiththe DirectorofacompetentLocalFinanceBureau,withinfivebusinessdays,areportconcerningthose shareholdings. Asimilar reportmustalso befiled toreflectany changeof 1% or morein any shareholdingor any change inmaterialmatters setout inreportspreviously filed.Any suchreport shallbefiled withthe Directorof a competentLocalFinanceBureauthroughtheElectronicDisclosureforInvestor’sNetwork(“EDINET”)system. Forthispurpose,sharesissuabletoashareholderuponexerciseof stockacquisitionrightsaretakenintoaccount indeterminingboththenumberofsharesheldbythatstockacquisitionrightsholderandthecompany’stotal issued shares. 101 10.CMATERIALCONTRACTS AllcontractsconcludedbyToyotaduringthetwoyearsprecedingthisfilingwereenteredintointhe ordinary course of business. 10.DEXCHANGECONTROLS ThefollowingisageneralsummaryofmajorJapaneseforeignexchangecontrolregulationsapplicableto holdersofsharesofcapitalstockorvotingrights(includingADSs)ofToyota,andtoothersintendingto consummateotheractionssuchas obtainingconsent fromotherinvestorsholdingvotingrightsand consentingto certainproposalsatageneralshareholdersmeeting,whoare“exchangenon-residents”or“foreigninvestors,”as describedbelow.ThestatementsregardingJapaneseforeignexchangecontrolregulationssetforthbeloware basedonthelawsandregulationsinforceandasinterpretedbytheJapaneseauthoritiesasofthedateofthis annualreportandaresubjecttosubsequentchangesintheapplicableJapaneselawsorinterpretationsthereof. Thissummaryisnotexhaustiveofallpossibleforeignexchangecontrolconsiderationsthatmayapplytoa particularinvestor,andpotentialinvestorsareadvisedtosatisfythemselvesastotheoverallforeignexchange controlconsequencesoftheacquisition,ownershipanddispositionofsharesofcapitalstockorvotingrightsof Toyota by consulting their own advisors. TheForeignExchangeandForeignTradeActofJapan(ActNo.228of1949,asamended,the“FEFTA”) andthecabinetordersandministerialordinancesthereunder(collectively,the“ForeignExchangeRegulations”) governtheacquisitionandholdingofsharesofcapitalstockandvotingrightsofToyotaby“exchange non-residents”andby“foreigninvestors.”TheForeignExchangeRegulationscurrentlyineffectdonot, however,affecttransactionsbetweenexchangenon-residentstopurchaseorsellsharesoutsideJapanusing currencies other than Japaneseyen. Exchange non-residents are: (i)individuals who do not reside in Japan; and (ii)corporations whose principal officesare located outside Japan. Generally, branches andother officesof non-residentcorporations thatare located withinJapan are regarded asresidentsofJapan.Conversely,branchesandotherofficesofJapanesecorporationslocatedoutsideJapanare regarded as exchange non-residents. Foreign investors are: (i)individuals who are exchange non-residents; (ii)corporationsorotherorganizationsthatareorganizedunderthelawsofforeigncountriesorwhose principal offices are locatedoutside of Japan; (iii)Japanesecorporationsofwhich50%ormoreoftheirtotalvotingrightsarehelddirectlyorindirectly byindividualswhoareexchangenon-residentsand/orcorporationsorotherorganizationsfalling within (i) and/or (ii) above; (iv)partnershipsundertheCivilCodeofJapan(ActNo.89of1896,asamended)establishedtoinvestin corporations,limitedpartnershipsforinvestmentundertheLimitedPartnershipActforInvestmentof Japan(ActNo. 90of1998,asamended),oranyothersimilarpartnershipsunderforeignlaw,ofwhich (a)50%ormoreofthetotalcontributionsaremadebyindividualsand/orcorporationsfallingwithin (i),(ii),(iii)aboveand/or(v)beloworanyotherpersonsprescribedundertheForeignExchange Regulationsor(b)amajorityofthegeneralpartnersareindividualsand/orcorporationsfallingwithin (i),(ii),(iii)aboveand/or(v)beloworanyotherpersonsprescribedundertheForeignExchange Regulations; and 102 (v)corporationsorotherorganizations,amajorityofwhoseofficers,orofficershavingthepowerof representation, are individualswho are exchange non-residents. AcquisitionofShares Ingeneral,theacquisitionofsharesofaJapanesecompany(suchasthesharesofcapitalstockofToyota) byanexchangenon-residentfromaresidentofJapanisnotsubjecttoanypriorfilingrequirements(otherthan thoserelatingtoan“inwarddirectinvestment”setoutbelow).Incertainlimitedcircumstances,however,the MinisterofFinancemayrequirepriorapprovalofanacquisitionofthistype.Whilepriorapproval,asdescribed above,isnotrequiredingeneral,inthecasewherearesidentofJapantransferssharesofaJapanesecompany (suchasthesharesofcapitalstockofToyota)forconsiderationexceeding¥100milliontoanexchange non-resident,theresidentofJapanwhotransfersthesharesisrequiredtoreportthetransfertotheMinisterof Financewithin20daysfromthedateofthetransferorthedateofreceiptofpayment,whichevercomeslater, unless(i)thetransferwasmadethroughabankorfinancialinstrumentsbusinessoperatorlicensedorregistered underJapaneselaworotherentityprescribedbytheForeignExchangeRegulationsactingasanagentor intermediary or (ii)the acquisition constitutesan “inward direct investment”described below. InwardDirectInvestmentinSharesofListedCompanies OnMay8,2020,anamendmenttotheForeignExchangeRegulationscameintoeffect.Uponthefull implementationoftheAmendmentasofJune7,2020,therequirementsandproceduresregardingtheprior notifications ofinward direct investmentsto theMinister ofFinance and any othercompetent Ministersunder the FEFTA,wereamended.AftertheimplementationoftheAmendment,Japaneselistedcompaniesareclassified into the following categories: (i)companiesengagedinbusinessesexcludingcertainbusinessesdesignatedbytheForeignExchange Regulations as designated businesses(the “Designated Businesses”); (ii)companiesengagedinDesignatedBusinessesdesignatedbytheForeignExchangeRegulationsascore sector businesses (the “Core SectorDesignated Businesses”); and (iii)corporationsengagedinDesignatedBusinessesotherthantheCoreSectorDesignatedBusinesses(the “Non-Core Sector Designated Businesses”). For referencepurposes only,the MinisterofFinance publishes,and mayupdate fromtimeto time, a listthat classifiesJapaneselistedcompaniesintotheabovecategories.AccordingtothelistpublishedbytheMinisterof FinanceasofJuly10,2020,thebusinesseswhicharecurrentlyengagedinbyToyotaareclassifiedascategory (ii) i.e., the Core Sector DesignatedBusinesses above. DefinitionofInwardDirectInvestment If a foreigninvestor acquiresshares orvoting rightsof a Japanese companythat islisted on aJapanese stock exchange (suchas theshares ofcapital stockof Toyota)and, asa resultof the acquisition,the foreigninvestor, in combinationwithanyexistingholdings,directlyorindirectlyholds1%ormoreoftheissuedsharesorthetotal numberofvotingrightsoftherelevantcompany,suchacquisitionconstitutesan“inwarddirectinvestment.”In addition,anacquisitionoftheauthoritytoexercise,orinstructtoexercise,votingrightsheldbyother shareholdersthatresultsintheforeigninvestor,incombinationwithanyexistingshareholding,directlyor indirectlyholding1%ormoreofthetotalnumberofvotingrightsoftherelevantcompanyconstitutesan “inward directinvestment.”Furthermore,ifaforeigninvestor manages,ona discretionarybasis, sharesor voting rightsofaJapanesecompanythatislistedonaJapanesestockexchangeandincombinationwithanyexisting management,directlyorindirectlymanages1%ormoreoftheissuedsharesorthetotalnumberofvotingrights oftherelevantcompany,suchdiscretionaryinvestmentmanagementgenerallyconstitutesan“inwarddirect investment.” 103 Inadditiontotheacquisitionsofsharesorvotingrightsdescribedabove,ifaforeigninvestor(i)isgranted theauthoritytoexerciseproxyvotingrightsonbehalfofothershareholdersoftherelevantcompanyregarding certainmatterswhichmaycontrolsubstantiallyorhaveamaterialinfluenceonthemanagementofsuch company,suchastheelectionorremovalofdirectors,or(ii)obtainsconsentfromanotherforeigninvestor holdingthevotingrightsoftherelevantcompanytoexercisethevotingrightsofsuchcompanyjointly,and,in eachcase,asaresultofthesearrangements,thenumberofthevotingrightsdirectlyorindirectlyheldbythe foreigninvestor,includingthetotalnumberofthevotingrightssubjecttosuchproxy,orthesumofthenumber ofthevotingrightsdirectlyorindirectlyheldbytheforeigninvestorandsuchotherforeigninvestorssubjectto suchjointvotingagreement,asthecasemaybe,is10%ormoreofthetotalnumberofvotingrightsofthe relevantcompany,eachsucharrangementregardingvotingrights(hereinafterreferredtoasa“voting arrangement”)alsoconstitutesan“inwarddirectinvestment.”Additionally,ifaforeigninvestorwhodirectlyor indirectly holds1% ormore ofthe totalvotingrights ofa Japaneselistedcompany consents,at ageneral meeting ofshareholders,tocertainproposalshavingamaterialinfluenceonthemanagementofsuchcompanysuchas (i)electionofsuchforeigninvestororitsrelatedpersons(asdefinedintheForeignExchangeRegulations)as directorsoraudit&supervisoryboardmembersoftherelevantcompanyor(ii)transferordiscontinuationofits business, such consent will also constitutean “inward direct investment.” PriorNotificationRequirements Ifaforeigninvestorintendstoconsummatean“inwarddirectinvestment”asdescribedabove,incertain circumstances,suchaswheretheforeigninvestorisinacountrythatisnotlistedonanexemptionschedulein theForeignExchangeRegulationsorwherethatJapanesecompanyisengaged(asToyotaiscurrently)inoneor moreDesignatedBusinesses,priornotificationoftherelevantinwarddirectinvestmentmustbefiledwiththe Minister of Finance and any other competentMinisters. However,aforeigninvestorseekingtoconsummatean“inwarddirectinvestment”maybeeligibleforthe exemptions, if certain conditionsare met. Inthecaseofanacquisition(includinginvestmentdiscretionarymanagement)ofsharesorvotingrightsor theauthoritytoexercise,directlyorthroughinstructions,votingrightsofaJapaneselistedcompanythatis engaged(asToyotaiscurrently)inoneormoreCoreSectorDesignatedBusinesses,theforeigninvestormaybe exemptedfromthepriornotificationrequirement,if,asaresultofsuchacquisition,theforeigninvestordirectly orindirectlyholdslessthan10%ofthetotalnumberofissuedsharesorvotingrightsoftherelevantcompany, and such foreign investor complieswith the following conditions: (i)the foreign investoror its closely-relatedpersons(as definedin the Foreign ExchangeRegulations) will not become directors or audit& supervisory board members of therelevant company; (ii)theforeigninvestorwillnotmakecertainproposals(asprescribedintheForeignExchange Regulations)atageneralmeetingofshareholders,includingtransferordiscontinuationofthe Designated Businesses of the relevantcompany; (iii)theforeigninvestorwillnotaccessnon-publictechnicalinformationinrelationtotheDesignated Businessesoftherelevantcompany,ortakecertainotheractionsthatmayleadtotheleakofsuch non-public technical information(as prescribed in the ForeignExchange Regulations); (iv)theforeigninvestorwillnotattend,andwillnotcauseanypersonsdesignatedbyittoattend,meetings oftherelevantcompany’sboardofdirectors,ormeetingsofcommitteeshavingauthoritytomake important decisions, in respectof the Core Sector Designated Businessesof the relevant company; and (v)theforeigninvestorwillnotmake,andwillnotcauseanypersonsdesignatedbyittomake,proposals tosuchboardorcommitteesortheirmembersinwritingorelectronicformrequestinganyresponseor actionsbycertaindeadlinesinrespectoftheCoreSectorDesignatedBusinessesoftherelevant company. 104 Inaddition,inthecaseofanacquisition(includinginvestmentdiscretionarymanagement)ofsharesor votingrightsortheauthoritytoexercise,eitherdirectlyorthroughinstructions,votingrightsofaJapaneselisted companythatisengagedinoneormoreNon-CoreSectorDesignatedBusinesses,theforeigninvestormaybe exemptedfromthepriornotificationrequirement,includinginthecasewhere,asaresultofsuchacquisition,the foreigninvestorholds10%ormoreofthetotalnumberofissuedsharesorthetotalnumberofvotingrightsof therelevantcompany,whichwouldhaverequiredpriornotification,ifsuchforeigninvestorcomplieswiththe conditions (i) through (iii)above (the “Exemption Conditions”). Notwithstandingtheabove,ifaforeigninvestorfallsunderacategoryofdisqualifiedinvestorsdesignated bytheForeignExchangeRegulations(including(a)investorswhohaverecordsofcertainsanctionsdueto violationsoftheFEFTAand(b)certaininvestorswhoarestate-ownedenterprisesorotherrelatedentities excluding thosewho areaccredited bythe MinisterofFinance), inno eventmay suchforeign investorbe eligible fortheexemptionsdescribedabove.Ontheotherhand,ifaforeigninvestor,excludingthedisqualifiedinvestors describedintheforegoingsentence,fallsunderacategoryofcertainforeignfinancialinstitutions(asprescribed intheForeignExchangeRegulations)andcomplieswiththeExemptionConditions,suchforeigninvestormay beeligiblefortheexemptions,eveniftheacquisitionresultsinsuchforeigninvestor’sdirectlyorindirectly holding10%ormoreofthetotalnumberofissuedsharesorvotingrightsofacorporationengagedinoneor more Core Sector Designated Businesses. Inaddition,ifaforeigninvestorintendstomakeavotingarrangementwithrespecttoaJapaneselisted companyengagedoneormoreDesignatedBusinessesorconsentstoaproposalatageneralmeetingof shareholdersof such company,ineach case,that constitutesan “inwarddirectinvestment”as describedabove, in certaincircumstances,priornotificationoftherelevantinwarddirectinvestmentmustbefiledwiththeMinister of Financeandany othercompetentMinisters.However,the exemptionsfromthe priornotificationrequirements maybeavailableinthecaseswheretherelevantvotingarrangementisregardingmattersotherthancertain matterswhichmaycontrolsubstantiallyorhaveamaterialinfluenceonthemanagementoftherelevant company, such as the election or removalof directors, which would have requiredprior notification. Acquisitions ofsharesbyforeign investorsbywayof stocksplit arenot subjecttothe foregoingnotification requirements. ProceduresforPriorNotification If suchpriornotificationisfiled, theproposedinwarddirect investmentmaynot beconsummated untilafter 30 days havepassed fromthedate offiling, althoughthis screeningperiod maybe shortened totwo weeks unless such Ministersdeem itnecessaryto reviewtheproposed inwarddirectinvestment.TheMinistersmay extendthe screening periodup tofive monthsif theydeem itnecessary toreview the proposedinward directinvestment and mayrecommendanymodificationorabandonmentoftheproposedinwarddirectinvestmentand,iftheforeign investor does notaccept such recommendation,the Ministers may orderthe modification or abandonmentof such inwarddirectinvestment.Inaddition,iftheMinistersconsidertheproposedinwarddirectinvestmenttobean inwarddirectinvestmentthatis likelytocausedamagetothenationalsecurityofJapanand,ifaforeigninvestor (i)consummatessuchinwarddirectinvestmentwithoutfilingthepriornotificationdescribedabove;(ii) consummatessuchinwarddirectinvestmentbeforetheexpirationofthescreeningperioddescribedabove;(iii) inconnectionwithsuchinwarddirectinvestment,makesfalsestatementsinthepriornotificationdescribed above;or(iv)doesnotfollowtherecommendationororderissuedbytheMinisterstomodifyorabandonsuch inwarddirectinvestment,theMinistersmayordersuchforeigninvestortodisposeofallorpartoftheshares acquired or take other measures. 105 PostFactoReportingRequirements AforeigninvestorwhoconsummatesaninwarddirectinvestmentasdescribedaboverelatingtoaJapanese listedcompanythatisengagedinoneormoreDesignatedBusinesses,butisnotsubjecttothepriornotification requirementsdescribedaboveduetotheexemptionsfromsuchpriornotificationrequirements,ingeneral,must fileareportoftherelevantinwarddirectinvestmentwiththeMinisterofFinanceandanyothercompetent MinistershavingjurisdictionoversuchJapanesecompanywithin45daysofsuchinwarddirectinvestment when,asaresultofsuchacquisition,theforeigninvestor(excluding,inthecasesof(i)and(ii)below,aforeign investorwhofallsunderacategoryofcertainforeignfinancialinstitutions(asprescribedintheForeign Exchange Regulations))directlyorindirectlyholds(i) 1%ormorebut lessthan3% ofthetotal numberof issued sharesorvotingrights,forthefirsttime,(ii)3%ormorebutlessthan10%ofthetotalnumberofissuedshares or voting rights, for the firsttime, or (iii) 10% ormore of the total number ofissued shares or voting rights. Inaddition,ifaforeigninvestorconsummatestheinwarddirectinvestmentdescribedabovethroughthe acquisition(includinginvestmentdiscretionarymanagement)ofsharesorvotingrightsortheauthorityto exercise,directlyorthroughinstructions,votingrightsofaJapaneselistedcompanythatisnotengagedinthe DesignatedBusinesses(whichisnotsubjecttothepriornotificationrequirementsdescribedabove)and,asa resultofsuchacquisition,suchforeigninvestorholds10%ormoreofsharesorvotingrightsofthetotalnumber ofissuedsharesorvotingrightsoftherelevantcompany,suchforeigninvestormustfileareportoftherelevant inwarddirectinvestmentwiththeMinisterofFinanceandanyothercompetentMinistershavingjurisdiction over such Japanese company within 45 days of such inwarddirect investment. Additionally,ifaforeigninvestorconsummatestheinwarddirectinvestmentdescribedabovethrougha votingarrangementwithrespecttoaJapaneselistedcompanythatisnotengagedintheDesignatedBusinesses (whichisnotsubjecttothepriornotificationrequirementsdescribedabove),suchforeigninvestormustfilea reportoftherelevantinwarddirectinvestmentwiththeMinisterofFinanceandanyothercompetentMinisters having jurisdiction over such Japanesecompany within 45 days of such inward directinvestment. Acquisitions ofsharesbyforeign investorsbywayof stocksplit arenot subjecttothe foregoingnotification requirements. DividendsandProceedsofSale UndertheForeignExchangeRegulations,dividendspaidon,andtheproceedsofsalesinJapanof,shares heldbynon-residentsofJapanmayingeneralbeconvertedintoanyforeigncurrencyandrepatriatedabroad. UnderthetermsofthedepositagreementpursuanttowhichToyota’sADSsareissued,theDepositaryis required,totheextentthatinitsjudgmentitcanconvertyenonareasonablebasisintodollarsandtransferthe resultingdollarstotheUnitedStates,toconvertallcashdividendsthatitreceivesinrespectofdepositedshares intodollarsandtodistributethe amountreceived(afterdeductionofapplicablewithholdingtaxes)totheholders of ADSs. 10.ETAXATION ThefollowingdiscussionisageneralsummaryoftheprincipalU.S.federalincomeandJapanesenational taxconsequencesoftheacquisition,ownershipanddispositionofsharesofcommonstockorADSs.This summarydoesnotpurporttoaddressallmaterialtaxconsequencesthatmayberelevanttoholdersofsharesof commonstockorADSs,anddoesnottakeintoaccountthespecificcircumstancesofanyparticularinvestors, some ofwhich(suchastax-exemptentities,banks,insurancecompanies,broker-dealers,tradersin securitiesthat electtouseamark-to-marketmethodofaccountingfortheirsecuritiesholdings,regulatedinvestment companies, realestateinvestmenttrusts,partnershipsandotherpass-throughentities,investorsliable fortheU.S. alternativeminimumtax,investorsthatownoraretreatedasowning10%ormoreofToyota’sstock(byvoteor value),investorsthatholdsharesofcommonstockorADSsaspartofastraddle,hedge,conversiontransaction 106 orotherintegratedtransactionandU.S.Holders(asdefinedbelow)whosefunctionalcurrencyisnottheU.S. dollar)maybesubjecttospecialtaxrules.ThissummaryisbasedonthetaxlawsandregulationsoftheUnited StatesandJapan,judicialdecisions,publishedrulingsandadministrativepronouncementsallasineffectonthe datehereof,aswellasonthecurrentincometaxconventionbetweentheUnitedStatesand Japan(the“Treaty”), asdescribedbelow,allofwhicharesubjecttochange(possiblywithretroactiveeffect),andtodiffering interpretations. Forpurposesofthisdiscussion,a“U.S.Holder”isanybeneficialownerofsharesofcommonstockor ADSs that, for U.S. federal income tax purposes,is: 1.an individualwho is a citizen or residentof the United States; 2.acorporation(orotherentitytaxableasacorporationforU.S.federalincometaxpurposes) organized in or under the laws of the UnitedStates, any state thereof, orthe District of Columbia; 3.an estatethe income of which is subjectto U.S. federal income tax without regardto its source; or 4.atrustthatissubjecttotheprimarysupervisionofaU.S.courtandthecontrolofoneormore U.S.persons,orthathasavalidelectionineffectunderapplicableTreasuryregulationstobe treated as a U.S. person. An “Eligible U.S. Holder” is a U.S. Holder that: 1.is a residentof the United States forpurposes of the Treaty; 2.doesnotmaintainapermanentestablishmentinJapan(a)withwhichthesharesofcommonstock orADSs areeffectivelyconnectedandthroughwhichtheU.S. Holdercarriesonorhascarriedon business,or(b)ofwhichthesharesofcommonstockorADSsformpartofthe businessproperty; and 3.iseligibleforbenefitsundertheTreatywithrespecttoincomeandgainderivedinconnection with the shares of common stock or ADSs. ThissummarydoesnotaddressanyaspectsofU.S.federaltaxlawotherthanincometaxationanddoesnot discussanyaspectsofJapanesetaxationotherthanincometaxation,aslimitedtonationaltaxes,inheritanceand gifttaxation.Thissummaryalsodoesnotcoveranystateorlocal,ornon-U.S.,non-Japanesetaxconsiderations. Investors areurgedtoconsult theirtaxadvisorsregardingthe U.S. federal,stateand localand Japaneseand other taxconsequencesofacquiring,owninganddisposingofsharesofcommonstockorADSs.Inparticular,where relevant, investorsareurged toconfirm theirstatusas EligibleU.S. Holderswith theirtax advisors andto discuss withtheirtaxadvisorsanypossibleconsequencesoftheirfailuretoqualifyasEligibleU.S. Holders.Inaddition, thissummaryisbasedinpartupontherepresentationsoftheDepositaryandtheassumptionthateachobligation in the deposit agreement, and in anyrelated agreement, will be performedin accordance with itsterms. Ingeneral,forpurposesoftheTreatyandforU.S.federalincomeandJapaneseincometaxpurposes, ownersofAmericanDepositaryReceiptsevidencingADSswillbetreatedastheownersofthesharesof commonstockrepresentedbythoseADSs,andexchangesofsharesofcommonstockforADSs,andexchanges of ADSs for shares of common stock, will notbe subject to U.S. federal income or Japaneseincome tax. Thediscussionbelowisintendedforgeneralinformationonlyanddoesnotconstituteacompleteanalysis ofalltaxconsequencesrelatingtoownershipofsharesofcommonstockorADSs.Prospectivepurchasersof sharesofcommonstockorADSsshouldconsulttheirowntaxadvisorsconcerningthetaxconsequencesof theirparticularsituations. JapaneseTaxation ThefollowingisasummaryoftheprincipalJapanesetaxconsequences(limitedtonationaltaxes)to non-residentsofJapanornon-JapanesecorporationswithoutpermanentestablishmentsinJapan(“non-resident 107 Holders”)whoareholdersofsharesofcommonstockorofADSsofToyota.Thefollowinginformation regardingtaxationinJapanisbasedonthetaxtreatiesandtaxlawsinforceandtheirinterpretationbyJapan’s taxauthoritiesasofthedateofthisannualreport.Taxlawsandtreatiesandtheirinterpretationsmaychange (including with retroactiveeffect).Toyota will not revise thissummary on the basis of any such change occurring after the date of this annualreport. Generally,non-residentHoldersaresubjecttoJapanesewithholdingtaxondividendspaidbyJapanese corporations. Stock splits are,in general, not taxable events. Intheabsenceofanapplicableincometaxtreaty,conventionoragreementreducingthemaximumrateof JapanesewithholdingtaxorallowinganexemptionfromJapanesewithholdingtax,therateofJapanese withholdingtaxapplicabletodividendspaidbyJapanesecorporationstonon-residentHoldersisgenerally 20.42percent,providedthat,withrespecttodividendspaidonlistedsharesissuedbyaJapanesecorporation (suchasthesharesofcommonstockorADSsofToyota)tonon-residentHolders,otherthananynon-resident HolderwhoisanindividualholdingthreepercentormoreofthetotalissuedsharesoftherelevantJapanese corporation,theaforementioned20.42percentwithholdingtaxrateisreducedto15.315percentfordividends dueandpayableonorbeforeDecember31,2037.Theseratesincludeaspecialadditionalwithholdingtax (2.1percentoftheoriginalwithholdingtaxamount)tosecurefundsforreconstructionfromtheGreatEastJapan Earthquake. Atthedateofthisannualreport,Japanhasincometaxtreaties,conventionsoragreementswherebythe above-mentionedwithholdingtaxrateisreduced,inmostcasesto15percent,tenpercentorfivepercentfor portfolioinvestors(15percentundertheincometaxtreatiesinforcewith,amongothercountries,Canada, Denmark,Finland,Germany,Iceland,Ireland,Italy,Luxembourg,NewZealand,NorwayandSingapore,ten percentundertheincometaxtreatieswith,amongothercountries,Australia,Austria,Belgium,France,Hong Kong, the Netherlands, Portugal,Sweden, Switzerland,the U.K. and the UnitedStates, and five percentunder the income tax treaties with, amongothers, Spain). UndertheTreaty,themaximumrateofJapanesewithholdingtaxwhichmaybeimposedondividendspaid byaJapanesecorporationtoanEligibleU.S.Holderthatisaportfolioinvestorisgenerallyreducedtoten percent ofthe grossamount actuallydistributed,and dividendspaidby a Japanesecorporation to anEligible U.S. Holderthatisapensionfund(asdefinedintheTreaty)areexemptfromJapaneseincometaxbywayof withholdingorotherwise,providedthatsuchdividendsarenotderivedfromthecarryingonofabusiness, directly or indirectly, by suchpension fund. Ifthemaximumtaxrateprovidedforin theincometaxtreatyapplicableto dividendspaidbyToyotatoany particularnon-residentHolder islowerthan thewithholdingtaxrateotherwise applicableunderJapanesetaxlaw or ifany particularnon-residentHolder is exemptfrom Japanese incometax with respectto suchdividends under theincometaxtreatyapplicabletosuchparticularnon-residentHolder,suchnon-residentHolderwhoisentitled toareducedrateoforexemptionfromJapanesewithholdingtaxonthepaymentofdividendsonsharesof commonstockbyToyotaisrequiredtosubmitanApplicationFormforIncomeTaxConventionRegarding RelieffromJapaneseIncomeTaxandSpecialIncomeTaxforReconstructiononDividends(togetherwithany otherrequiredformsanddocuments)inadvancethroughthewithholdingagenttotherelevanttaxauthority beforethepaymentofdividends.Astandingproxyfornon-residentHoldersofaJapanesecorporationmay providethisapplicationservice.Inaddition,asimplifiedspecialfilingprocedureisavailablefornon-resident HolderstoclaimtreatybenefitsofexemptionfromorreductionofJapanesewithholdingtaxbysubmittinga SpecialApplicationFormforIncomeTaxConventionRegardingRelieffromJapaneseIncomeTaxandSpecial IncomeTaxforReconstructiononDividendsofListedStock(togetherwithanyotherrequiredformsand documents).WithrespecttoADSs,thisreducedrateorexemptionisapplicableiftheDepositaryoritsagent submits,togetherwithotherdocuments,twoSpecialApplicationForms(onebeforepaymentofdividends,the otherwithineightmonthsaftertherecordingdateconcerningsuchpaymentofdividends)totheJapanesetax authority.Toclaimthisreducedrateorexemption,anyrelevantnon-residentHolder ofADSswillberequiredto 108 fileproofoftaxpayerstatus,residenceandbeneficialownership(asapplicable)andtoprovideotherinformation ordocumentsasmayberequiredbytheDepositary.Anon-residentHolderwhoisentitled,underanapplicable incometaxtreaty,toareducedtreatyratelowerthanthewithholdingtaxrateotherwiseapplicableunder Japanesetaxlaworanexemptionfromthewithholdingtax,butfailstosubmittherequiredapplicationin advance,willbeentitledtoclaimtherefundofJapanesetaxeswithheldinexcessoftherateunderanapplicable taxtreaty(ifsuchnon-residentHolderisentitledtoareducedtreatyrateundertheapplicableincometaxtreaty) ortheentireamountofJapanesetaxwithheld(ifsuchnon-residentHolderisentitledtoanexemptionunderthe applicableincometaxtreaty)bycomplyingwithacertainsubsequentfilingprocedure.Toyotadoesnotassume anyresponsibilitytoensurewithholdingatthereducedrate,orexemptiontherefrom,fornon-residentHolders whowouldbesoeligibleunderanapplicabletaxtreaty,butwheretherequiredproceduresasstatedaboveare not followed. GainsderivedfromthesaleofsharesofcommonstockorADSsoutsideJapanbyanon-residentHolder holdingsuchsharesofcommonstockorADSsasportfolioinvestorsare,ingeneral,notsubjecttoJapanese incometaxorcorporationtaxunderJapaneselaw.Inaddition,EligibleU.S.HoldersareexemptfromJapanese incomeorcorporationtaxwithrespecttosuchgainsundertheTreatysolongasfilingsrequiredunderJapanese law are made. Japaneseinheritanceandgifttaxesatprogressiveratesmaybepayablebyanindividualwhohasacquired fromanotherindividualsharesofcommonstockorADSsasalegatee,heirordonee,eventhoughneitherthe individual, nor the deceased, nor donor isa Japanese resident. HoldersofsharesofcommonstockorADSsshouldconsulttheirtaxadvisorsregardingtheeffectofthese taxesand,inthecaseofU.S.Holders,thepossibleapplicationoftheEstateandGiftTaxTreatybetweenthe United States and Japan. U.S.FederalIncomeTaxation U.S.Holders ThefollowingdiscussionisasummaryoftheprincipalU.S.federalincometaxconsequencestoU.S. Holders that hold shares of common stockor ADSs as capital assets (generally,for investment purposes). TaxationofDividends Subject tothe passiveforeign investmentcompany(“PFIC”) rulesdiscussedbelow, thegross amountof any distributionmadebyToyotainrespectofsharesofcommonstockorADSs(withoutreductionforJapanese withholdingtaxes)willconstituteataxabledividendtotheextentpaidoutofcurrentoraccumulatedearnings andprofits,asdeterminedunderU.S.federalincometaxprinciples.TheU.S.dollaramountofsuchadividend generallywillbeincludedinthegrossincomeofaU.S.Holder,asordinaryincome,whenactuallyor constructivelyreceivedbytheU.S.Holder,inthecaseofsharesofcommonstock,orbytheDepositary,inthe caseofADSs.DividendspaidbyToyotawillnotbeeligibleforthedividends-receiveddeductiongenerally allowed to U.S. corporations in respect ofdividends received from otherU.S. corporations. Dividends received onshares and ADSs ofcertain foreigncorporations by non-corporate U.S. investorsmay besubjecttoU.S.federalincometaxatlowerratesthanothertypesofordinaryincomeifcertainconditionsare met.Dividendsreceivedbynon-corporateU.S.HolderswithrespecttosharesofcommonstockorADSsof Toyotaareexpectedtobeeligibleforthesereducedratesoftax.U.S.Holdersshouldconsulttheirowntax advisors regarding the eligibilityof such dividends for a reducedrate of tax. TheU.S.dollaramountofadividendpaidinJapaneseyenwillbedeterminedbasedontheJapaneseyen/ U.S.dollarexchangerateineffectonthedatethatthedividendisincludedinthegrossincomeoftheU.S. Holder,regardlessofwhetherthepaymentisconvertedintoU.S. dollarsonthatdate.Generally,anygainorloss 109 resultingfromcurrencyexchangefluctuationsduringtheperiodfromthedatethedividendpaymentisincluded inthegrossincomeofaU.S.HolderthroughthedatethatpaymentisconvertedintoU.S.dollars(orotherwise disposedof)willbetreatedasU.S.-sourceordinaryincomeorloss.U.S.Holdersshouldconsulttheirowntax advisors regarding the calculationand U.S. federal income tax treatmentof foreign currency gainor loss. Totheextent,ifany,thattheamountofanydistributionreceivedbyaU.S.Holderinrespectofsharesof commonstockorADSsexceedsToyota’scurrentandaccumulatedearningsandprofits,asdeterminedunder U.S. federalincometaxprinciples,thedistributionfirstwillbetreatedasatax-freereturnofcapitaltotheextent oftheU.S.Holder’sadjustedtaxbasisinthosesharesorADSs,andthereafterwillbetreatedasU.S.-source capital gain. DistributionsofadditionalsharesofcommonstockthataremadetoU.S.Holderswithrespecttotheir sharesofcommonstockorADSs,andthatarepartofaproratadistributiontoallofToyota’sshareholders, generally will not be subject to U.S. federalincome tax. ForU.S.foreigntaxcreditpurposes,dividendsincludedingrossincomebyaU.S.Holderinrespectof sharesofcommonstockorADSswillconstituteincomefromsourcesoutsidetheUnitedStates,andwill generallybe“passivecategoryincome”or,inthecaseofcertainU.S.Holders,“generalcategoryincome.”Any JapanesewithholdingtaximposedinrespectofaToyotadividendmaybeclaimedasacreditagainsttheU.S. federalincometaxliabilityofaU.S.Holder,subjecttoanumberofcomplexlimitationsandconditions, includingthoseintroducedbyrecentlyissuedU.S.Treasuryregulationsthatapplytoforeignincometaxespaid oraccruedintaxableyearsbeginningonorafterDecember28, 2021.AU.S.Holder’suseof aforeigntaxcredit withrespecttoanysuchJapaneseincomeorwithholdingtaxeswouldgenerallynotbeallowedunlesssuchU.S. Holderelectsbenefitsunderanapplicableincometaxtreatywithrespecttosuchtax.AU.S.Holderwhodoes notelecttoclaimacreditforanycreditableforeignincometaxespaidduringthetaxableyearmayinsteadclaim adeductioninthecomputationofsuchU.S.Holder’staxableincome.Specialrulesgenerallywillapplytothe calculationofforeigntaxcreditsinrespectofdividendincomethatqualifiesforpreferentialU.S. federalincome taxrates.Additionally,specialrulesapplytoindividualswhoseforeignsourceincomeduringthetaxableyear consistsentirelyof“qualifiedpassiveincome”andwhosecreditableforeigntaxespaidoraccruedduringthe taxableyeardonotexceed$300($600inthecaseofajointreturn).Further,undersomecircumstances,aU.S. Holder that: (i) has held shares of common stockor ADSs for less than a specified minimumperiod; or (ii) is obligated to make paymentsrelated to Toyota dividends, will not be allowed a foreign tax creditfor Japanese taxes imposedon Toyota dividends. U.S.Holdersareurgedtoconsulttheirtaxadvisorsregardingtheavailabilityoftheforeigntaxcreditunder their particular circumstances. TaxationofCapitalGainsandLosses Ingeneral,uponasaleorothertaxabledispositionofsharesofcommonstockorADSs,aU.S.Holderwill recognizegainorlossforU.S.federalincometaxpurposesinanamountequaltothedifferencebetweenthe amountrealizedonthesaleorothertaxabledispositionandtheU.S.Holder’sadjustedtaxbasisinthoseshares ofcommonstockorADSs.AU.S.Holdergenerallywillhaveanadjustedtaxbasisinashareofcommonstock or anADSequaltoitsU.S. dollarcost.Subjectto thePFICrules discussedbelow,gainor lossrecognizedonthe saleorothertaxabledispositionofsharesofcommonstockorADSsgenerallywillbe capitalgainorlossand,if theU.S.Holder’sholdingperiodforthosesharesorADSsexceedsoneyear,willbelong-termcapitalgainor loss.Non-corporateU.S.Holders,includingindividuals,currentlyareeligibleforpreferentialratesofU.S. federalincometaxinrespectoflong-termcapitalgains.UnderU.S.federalincometaxlaw,thedeductionof capital losses issubject tolimitations. Anygain or loss recognizedby a U.S. Holderin respect of the saleor other dispositionofsharesofcommonstockorADSsgenerallywillbetreatedasU.S.-sourceincomeorlossforU.S. foreign tax credit purposes. 110 DepositsandwithdrawalsofcommonstockinexchangeforADSswillnotresultintherealizationofgain or loss for U.S. federal income taxpurposes. PassiveForeignInvestmentCompanies Anon-U.S.corporationgenerallywillbeclassifiedasaPFICforU.S.federalincometaxpurposesinany taxableyearinwhich,afterapplyinglook-throughrules,either(1)atleast75%ofitsgrossincomeispassive incomeor (2)onaverageatleast50%ofthegrossvalue ofitsassetsisattributableto assetsthatproducepassive incomeorareheldfortheproductionofpassiveincome.Passiveincomeforthispurposegenerallyincludes dividends,interest,royalties,rentsandgainsfromcommoditiesandsecuritiestransactions.ThePFIC determinationismadeannuallyandgenerallyisbasedonthevalueofanon-U.S.corporation’sassets(including goodwill) and composition of its income. ToyotadoesnotbelievethatitwasaPFICforU.S.federalincometaxpurposesforitstaxableyearended March31,2022,andcurrentlyintendstocontinueitsoperationsinsuchamannerthatitwillnotbecomeaPFIC inthefuture.BecausethePFICdeterminationismadeannuallyandtheapplicationofthePFICrulestoa corporationsuchasToyota(whichamongotherthingsisengagedinleasingandfinancingthroughseveral subsidiaries)isnotentirelyclear,noassurancescanbemaderegardingdeterminationofitsPFICstatusinthe currentoranyfuturetaxableyear.IfToyotaisdeterminedtobeaPFIC,U.S.Holderscouldbesubjectto additional U.S.federal incometaxeson gain recognizedwithrespect tothe sharesof common stockor ADSs and oncertaindistributions.Inaddition,aninterestchargemayapplytotheportionoftheU.S.federalincometax liabilityonsuchgainsordistributionstreatedunderthePFICrulesashavingbeendeferredbytheU.S.Holder. Moreover,dividendsthatanon-corporateU.S.HolderreceivesfromToyotawillnotbeeligibleforthereduced U.S.federalincometaxratesondividendsdescribedaboveifToyotaisaPFICeitherinthetaxableyearofthe dividendortheprecedingtaxableyear.IfaU.S.HolderownssharesofcommonstockorADSsinanytaxable yearinwhichToyotaisaPFIC,suchU.S.HoldergenerallywouldberequiredtofileInternalRevenueService (“IRS”)Form8621(orotherformspecifiedbytheU.S.DepartmentoftheTreasury)onanannualbasis,subject tocertainexceptionsbasedonthevalueofPFIC stockheld.ToyotawillinformU.S.Holdersifitbelievesthatit will be classified as a PFIC in any taxableyear. ProspectiveinvestorsshouldconsulttheirowntaxadvisorsregardingthepotentialapplicationofthePFIC rules to shares of common stock orADSs. Non-U.S.Holders ThefollowingdiscussionisasummaryoftheprincipalU.S.federalincometaxconsequencestobeneficial owners of sharesof common stockor ADSs that are neither U.S. Holders, nor partnerships,nor entities taxableas partnerships for U.S. federal incometax purposes (“Non-U.S. Holders”). ANon-U.S.HoldergenerallywillnotbesubjecttoanyU.S.federalincomeorwithholdingtaxon distributionsreceivedinrespectofsharesofcommonstockorADSsunlessthedistributionsareeffectively connectedwiththeconductbytheNon-U.S.HolderofatradeorbusinesswithintheUnitedStates(and,ifan applicabletaxtreatyrequires,areattributabletoaU.S.permanentestablishmentorfixedbaseofsuchNon-U.S. Holder). A Non-U.S.HoldergenerallywillnotbesubjecttoU.S. federalincometaxinrespect ofgainrecognizedon a sale or other disposition ofshares of common stock or ADSs, unless: (i)thegainiseffectivelyconnectedwithatradeorbusinessconductedbytheNon-U.S.Holder withintheUnitedStates(and,ifanapplicabletaxtreatyrequires,isattributabletoaU.S. permanent establishment orfixed base of such Non-U.S. Holder); or (ii)the Non-U.S. Holderis anindividual who waspresent in theUnited States for183 or moredays in the taxable year of the dispositionand other conditions are met. 111 IncomethatiseffectivelyconnectedwithaU.S.tradeorbusinessofaNon-U.S.Holder,and,ifanincome taxtreatyappliesandsorequires,isattributableto aU.S.permanentestablishmentorfixedbaseoftheNon-U.S. Holder,generallywillbetaxedinthesamemannerastheincomeofaU.S.Holder.Inaddition,undercertain circumstances,anyeffectivelyconnectedearningsandprofitsrealizedbyacorporateNon-U.S.Holdermaybe subjecttoanadditional“branchprofitstax”attherateof30%oratalowerratethatmaybeprescribedbyan applicable income tax treaty. BackupWithholdingandInformationReporting Ingeneral,informationreportingrequirementswillapplytodividendspaidtoaU.S.Holderinrespectof sharesofcommonstockorADSs,andtotheproceedsreceiveduponthesale,exchangeorredemptionofthe sharesofcommonstockorADSswithintheUnitedStatesbyU.S.Holders.Furthermore,backupwithholding mayapplytothoseamounts(currentlyata24%rate)ifaU.S.Holderfailstoprovideanaccuratetaxpayer identificationnumbertocertifythatsuchU.S.Holderisnotsubjecttobackupwithholdingortootherwise comply with the applicable requirementsof the backup withholding requirements. DividendspaidtoaNon-U.S.Holderinrespectofsharesof commonstockorADSs,andproceedsreceived uponthesale,exchangeorredemptionofsharesofcommonstockorADSsbyaNon-U.S.Holder,generallyare exempt frominformationreportingand backupwithholding undercurrentU.S. federalincome taxlaw. However, a Non-U.S. Holder may be required to provide certificationof non-U.S. status in orderto obtain that exemption. Personsrequiredtoestablishtheirexemptstatusgenerallymustprovidesuchcertificationunderpenaltyof perjuryonIRSFormW-9,entitledRequestforTaxpayerIdentificationNumberandCertification,inthecaseof U.S.persons,andonIRSFormW-8BEN,entitledCertificateofForeignStatusofBeneficialOwnerforUnited StatesTaxWithholdingandReporting(Individuals),orIRSFormW-8BEN-E,entitledCertificateofStatusof BeneficialOwnerforUnitedStatesTaxWithholdingandReporting(Entities)(orotherappropriateIRSForm W-8),inthecaseofnon-U.S.persons.Backupwithholdingisnotanadditionaltax.Theamountofbackup withholding imposedona paymentgenerallymaybeclaimed asacredit againstthe holder’sU.S. federalincome tax liability, provided thatthe required information isproperly furnished to the IRS in a timelymanner. Inaddition,certainU.S.Holderswhoareindividualsthatholdcertainforeignfinancialassets(whichmay includesharesofcommonstockorADSs)arerequiredtoreportinformationrelatingtosuchassets,subjectto certainexceptions.U.S.Holdersshouldconsulttheirtaxadvisorsregardingtheeffect,ifany,ofthislegislation on their ownership and disposition of sharesof common stock or ADSs. THESUMMARYOFU.S.FEDERALINCOMEANDJAPANESENATIONALTAXCONSEQUENCES SETOUTABOVEISINTENDEDFORGENERALINFORMATIONPURPOSESONLY.PROSPECTIVE PURCHASERSOFCOMMONSTOCKORADSsAREURGEDTOCONSULTWITHTHEIROWNTAX ADVISORS WITHRESPECTTOTHE PARTICULARTAXCONSEQUENCES TOTHEMOFOWNING OR DISPOSING OF COMMON STOCK ORADSs, BASED ON THEIR PARTICULAR CIRCUMSTANCES. 10.FDIVIDENDSANDPAYINGAGENTS Not applicable. 10.GSTATEMENTBYEXPERTS Not applicable. 10.HDOCUMENTSONDISPLAY ToyotafilesannualreportsonForm20-FandreportsonForm6-KwiththeSEC.Youmayaccessthis informationthroughtheSEC’swebsite(https://www.sec.gov).Inaddition,Toyota’sreports,proxystatements 112 andotherinformationmaybeinspectedattheofficesoftheNewYorkStockExchange,20BroadStreet,New York, NewYork10005.CopiesofthedocumentsreferredtohereinmayalsobeinspectedatToyota’sofficesby contactingToyotaat1Toyota-cho,ToyotaCity,AichiPrefecture471-8571,Japan,attention:CapitalStrategy& Affiliated Companies, Finance Division,telephone number: +81-565-28-2121. 10.ISUBSIDIARYINFORMATION Not applicable. ITEM11.QUANTITATIVEANDQUALITATIVEDISCLOSURESABOUTMARKETRISK QuantitativeandQualitativeDisclosuresaboutMarketRisk Toyotaisexposedtomarketriskfromchangesinforeigncurrencyexchangerates,interestrates,certain commodityandequitysecurityprices.Inordertomanagetheriskarisingfromchangesinforeigncurrency exchange rates and interest rates,Toyota enters into a varietyof derivative financialinstruments. AdescriptionofToyota’saccountingpoliciesforderivativeinstrumentsisincludedinnote3tothe consolidatedfinancialstatementsandfurtherdisclosureisprovidedinnotes20and21totheconsolidated financial statements. Toyotamonitorsandmanagesthesefinancialexposuresasanintegralpartofitsoverallriskmanagement program,whichrecognizestheunpredictabilityoffinancialmarkets,andseekstoreducethepotentiallyadverse effects on Toyota’s operating results. Marketriskanalysesofriskssuchasforeignexchangerisk,interestraterisk,commoditypricefluctuation risk and stock price fluctuationrisk are provided in note 19 to theconsolidated financial statements. ITEM12.DESCRIPTIONOFSECURITIESOTHERTHANEQUITYSECURITIES 12.ADEBTSECURITIES Not applicable. 12.BWARRANTSANDRIGHTS Not applicable. 12.COTHERSECURITIES Not applicable. 12.DAMERICANDEPOSITARYSHARES FeesandChargesforHoldersofAmericanDepositaryShares TheBankofNewYorkMellon,asDepositaryfortheADSs,collectsitsfeesfordeliveryandsurrenderof ADSsdirectlyfrominvestorsdepositingsharesorsurrenderingADSsforthepurposeofwithdrawalorfrom intermediariesactingforthem.TheDepositarycollectsfeesformakingdistributionstoinvestorsbydeducting thosefeesfromtheamountsdistributedorbysellingaportionofdistributablepropertytopaythefees.The Depositary may generally refuseto provide fee-attractingservices until its feesfor those services are paid. 113 ![]() Personsdepositingorwithdrawingsharesmustpay:For: $5.00 (or less) per 100 ADSs (or portion of 100 ADSs)•DeliveryofADSs,includingthoseresulting fromadistribution,saleorexerciseofsharesor rights or other property •SurrenderofADSsforthepurposeof withdrawalincludingifthedepositagreement terminates $0.05 (or less) per ADS•Any cash distributionto ADS registered holders A fee equivalent to the fee thatwould be payable if securities distributedto you had been shares and the shares had been deposited for deliveryof ADSs •Distributionofsecuritiesorrightsdistributedto holders ofdepositedsecuritiesthat aredistributed by the Depositary to ADS registered holders $0.05 (or less) per ADS per year•General depositaryservices Registration fees•RegistrationoftransferofsharesonToyota’s shareregistertoorfromthenameofthe Depositaryoritsnomineeorthecustodianorits nominee when shares are deposited or withdrawn Fees and expenses of the Depositary•Cable(includingSWIFT)andfacsimile transmissions(whenexpresslyprovidedinthe deposit agreement) •Convertingforeign currency to U.S. dollars Taxes and other governmental chargesthe Depositary or the custodian have to pay on any ADS or share underlying an ADS •As necessary Any other charges payable by the Depositary, the custodian or their respectiveagents in connection with the servicing of the deposited securities •As necessary FeesIncurredinFiscal2022 Forfiscal2022,theDepositarypaidtoToyota,orpaidtoathirdpartyatToyota’sinstruction,anaggregate of$854,666forstandardout-of-pocketmaintenancecostsfortheADSs(consistingoftheexpensesofpostage andenvelopesformailingannualreports,printinganddistributingdividendchecks,stationery,postage, facsimile,andtelephonecalls),Toyota’scontinuingannualstockexchangelistingfeeswithrespecttotheADSs, expensesrelatingtoToyota’sannualgeneralshareholders’meetingthatareincurredwithrespecttoToyota’s ADS holders and 50% of the net dividend fees collectedby the Depositary. FeestobePaidintheFuture Withregardsto theADSprogram,theDepositaryhas agreedtopaythe standardout-of-pocketmaintenance costsfortheADSs,whichincludestheexpensesofpostageandenvelopesformailingannualreports,printing anddistributingdividendchecks,stationery,postage,facsimileandtelephonecalls.Ithasalsoagreedtopayfor investorrelationsexpenses,thecontinuingannualstockexchangelistingfeeswithrespecttotheADSs,andany otherprogramrelatedexpenses.ThelimitontheamountofexpensesforwhichtheDepositarywillpayisthe sumof$300,000annually.Inaddition,theDepositaryhasagreedtopayToyota50%ofthenetdividendfees collected by the Depositary during eachannual period towards the aforementionedexpenses. 114 PARTII ITEM13.DEFAULTS,DIVIDENDARREARAGESANDDELINQUENCIES None. ITEM14.MATERIALMODIFICATIONSTOTHERIGHTSOFSECURITYHOLDERSANDUSEOF PROCEEDS None. ITEM15.CONTROLSANDPROCEDURES (a)DISCLOSURECONTROLSANDPROCEDURES Toyotaperformedanevaluationoftheeffectivenessofthedesignandoperationofitsdisclosurecontrols andproceduresasoftheendoffiscal2022.Disclosurecontrolsandproceduresaredesignedtoensurethat informationrequiredtobedisclosedintheForm20-FthatToyotafilesundertheExchangeActisaccumulated andcommunicatedtoitsmanagement,includingthechiefexecutiveofficerandtheprincipalaccountingand financialofficer,toallowtimelydecisionsregardingrequireddisclosure.Thedisclosurecontrolsandprocedures alsoensurethattheForm20-FthatitfilesundertheExchangeActisrecorded,processed,summarizedand reportedwithinthetimeperiodsspecifiedintheCommission’srulesandforms.Theevaluationwasperformed underthesupervisionofToyota’sPresidentandRepresentativeDirector,whoconcurrentlyservesasCEO,and thememberoftheboardofdirectorswhoconcurrentlyservesasCFO.Toyota’sdisclosurecontrolsand proceduresaredesignedtoprovidereasonableassuranceofachievingitsobjectives.Managerialjudgmentwas necessarytoevaluatethecost-benefitrelationshipofpossiblecontrolsandprocedures.ThePresidentand RepresentativeDirectoraswellasthememberoftheboardofdirectorshaveconcludedthatToyota’sdisclosure controls and procedures are effectiveat the reasonable assurancelevel. (b)MANAGEMENT’SANNUALREPORTONINTERNALCONTROLOVERFINANCIAL REPORTING Toyota’smanagementisresponsibleforestablishingandmaintainingeffectiveinternalcontrolover financial reporting.Internal controlover financialreporting isa process designed to provide reasonableassurance regardingthereliabilityoffinancialreportingandthepreparationoffinancialstatementsforexternalpurposesin accordancewithIFRS.Toyota’sinternalcontroloverfinancialreportingincludesthosepoliciesandprocedures that: (i)pertaintothemaintenanceofrecordsthatinreasonabledetail,accuratelyandfairlyreflectthe transactions and dispositionsof Toyota’s assets; (ii)providereasonableassurancethattransactionsarerecordedasnecessarytopermitpreparationof financialstatementsinaccordancewithIFRS,andthatToyota’sreceiptsandexpendituresarebeing madeonlyinaccordancewithauthorizationsofToyota’smanagementandmembersoftheboardof directors; and (iii)provide reasonableassuranceregardingprevention ortimelydetection ofunauthorizedacquisition, use, or disposition of Toyota’s assetsthat could have a material effecton the financial statements. Becauseofitsinherentlimitations,internalcontroloverfinancialreportingmaynotpreventordetect misstatements.Also,projectionsofanyevaluationofeffectivenesstofutureperiodsaresubjecttotheriskthat controlsmaybecomeinadequatebecauseofchangesinconditions,orthatthedegreeofcompliancewiththe policies or procedures may deteriorate. 115 Toyota’smanagementconductedanevaluationoftheeffectivenessofinternalcontroloverfinancial reportingbasedontheframeworkin“InternalControl—IntegratedFramework(2013)”issuedbythe Committee of Sponsoring Organizationsof the Treadway Commission. Basedonthisevaluation,managementconcludedthatToyota’sinternalcontroloverfinancialreportingwas effective as of March 31, 2022. PricewaterhouseCoopersAarataLLC,anindependentregisteredpublicaccountingfirmthatauditedthe consolidatedfinancialstatementsincludedinthisreport,hasalsoauditedtheeffectivenessofToyota’sinternal control over financial reportingas of March 31, 2022, as stated in itsreport included herein. (c)ATTESTATIONREPORTOFTHEREGISTEREDPUBLICACCOUNTINGFIRM Toyota’s independent registeredpublic accountingfirm, PricewaterhouseCoopers AarataLLC, has issued an auditreportontheeffectivenessofToyota’sinternalcontroloverfinancialreporting.Thisreportappearsin Item 18. (d)CHANGESININTERNALCONTROLOVERFINANCIALREPORTING TherehavebeennochangesinToyota’sinternalcontroloverfinancialreportingduringfiscal2022that havemateriallyaffected,orarereasonablylikelytomateriallyaffect,Toyota’sinternalcontroloverfinancial reporting. ITEM16.[RESERVED] ITEM16A.AUDITCOMMITTEEFINANCIALEXPERT Toyotamaintainsanaudit&supervisoryboardsystem,inaccordancewiththeCompaniesAct.Toyota’s audit&supervisoryboardiscomprisedofsixaudit&supervisoryboardmembers,threeofwhomareoutside audit&supervisoryboardmembers.Eachaudit&supervisoryboardmemberhasbeenappointedatToyota’s meetingsofshareholdersandhascertainstatutorypowersindependently,includingauditingthebusinessaffairs and accounts of Toyota. Toyota’saudit&supervisoryboardhasdeterminedthatitdoesnothavean“auditcommitteefinancial expert”servingontheaudit&supervisoryboard.Thequalificationsfor,andpowersof,theaudit&supervisory boardmemberdelineatedintheCompaniesActaredifferentfromthoseanticipatedforanyauditcommittee financialexpert.Audit&supervisoryboardmembershavetheauthoritytobegivenreportsfromacertified publicaccountantoranaccountingfirmconcerningaudits,includingtechnicalaccountingmatters.Atthesame time,eachaudit&supervisoryboardmemberhastheauthoritytoconsultinternalandexternalexpertson accountingmatters.Eachaudit&supervisoryboardmembermustfulfilltherequirementsunderJapaneselaws andregulationsandotherwisefollowJapanesecorporategovernancepracticesand,accordingly,Toyota’s audit &supervisory boardhas confirmedthatit isnot necessarilyin Toyota’sbest interestto nominate asaudit & supervisoryboardmemberapersonwhomeetsthedefinitionofauditcommitteefinancialexpert.Although Toyotadoesnothaveanauditcommitteefinancialexpertonitsaudit&supervisoryboard,Toyotabelievesthat Toyota’scurrentcorporategovernancesystem,takenasawhole,includingtheaudit&supervisoryboard members’abilitytoconsultinternalandexternalexperts,isfullyequivalenttoasystemhavinganaudit committee financial experton its audit & supervisoryboard. ITEM16B.CODEOFETHICS Toyotahasadoptedacodeofethicsthatappliestoitsmembersoftheboardofdirectorsandoperating officers,includingitsprincipalexecutiveofficer,principalfinancialofficer,principalaccountingofficeror controller,or personsperforming similarfunctions.A copyof Toyota’scode ofethicsis includedas anexhibit to this annual report on Form 20-F. 116 ![]() ITEM16C.PRINCIPALACCOUNTANTFEESANDSERVICES PricewaterhouseCoopersAarataLLChasauditedthefinancialstatementsofToyotaincludedinthisannual report on Form 20-F. Thefollowingtablepresentstheaggregatefeesforprofessionalservicesandotherservicesrenderedby PricewaterhouseCoopersAarataLLCandthevariousnetworkandmemberfirmsofPricewaterhouseCoopersto Toyota in fiscal 2021 and fiscal 2022. Yeninmillions 20212022 Audit Fees (1) ................................................................ 4,6025,460 Audit-related Fees (2) ..........................................................7052 Tax Fees (3) .................................................................373351 All Other Fees (4) .............................................................185181 Total ..................................................................... 5,2306,045 (1)AuditFeesconsistoffeesbilledfortheannualauditservicesengagementandotherauditservices,which arethoseservicesthatonlytheexternalauditorreasonablycanprovide,andincludetheservicesofannual audit,quarterlyreviewsandassessmentandreviewsoftheeffectivenessofinternalcontrolsoverfinancial reportingofToyotaanditssubsidiariesandaffiliatedcompanies;theservicesassociatedwithSEC registrationstatementsorotherdocumentsissuedinconnectionwithsecuritiesofferingssuchascomfort letters and consents; and consultationsas to the accounting or disclosuretreatment of transactionsor events. (2)Audit-relatedFeesconsistoffeesbilledforassuranceandrelatedservicesthatarereasonablyrelatedtothe performanceoftheauditorreviewofitsfinancialstatementsorthataretraditionallyperformedbythe externalauditor,andmainlyincludeservicessuchasagreed-uponorexpandedauditprocedures;and financial statement auditsof employee benefit plans. (3)TaxFees includefees billedfor taxcomplianceservices, includingservicessuch astax planning, adviceand complianceoffederal,state,localandinternationaltax;thereviewoftaxreturns;assistancewithtaxaudits and appeals; tax-only valuation servicesincluding transferpricing; expatriate tax assistanceand compliance. (4)AllOtherFeesprimarilyincludefeesbilledforriskmanagementadvisoryservices;servicesproviding information related to automotivemarket conditions;and other advisory services. PoliciesandProceduresoftheAudit&SupervisoryBoard Belowisasummaryofthecurrentpoliciesandproceduresoftheaudit&supervisoryboardforthe pre-approval of audit and permissiblenon-audit services performedby Toyota’s independent publicaccountants. Under the policy, specifiedoperatingofficers or managerssubmit arequest forgeneral pre-approvalof audit andpermissiblenon-auditservicesforthefollowingfiscalyear,whichshallincludedetailsofthespecific servicesandestimatedfeesfortheservices,totheaudit&supervisoryboard,whichreviewsanddetermines whetherornottogranttherequestinadvance.Uponthegeneralpre-approvaloftheaudit&supervisoryboard, thespecifiedoperatingofficersormanagersarenotrequiredtoobtainanyspecificpre-approvalforauditand permissiblenon-auditservicessolongasthoseservicesfallwithinthescopeofthegeneralpre-approval provided. Theaudit&supervisoryboardmakesafurtherdeterminationofwhetherornottograntarequesttorevise thegeneralpre-approvalfortheapplicablefiscalyearifsuchrequestissubmittedbyspecifiedoperatingofficers ormanagers.Suchrequestmayinclude(i)addinganyauditorpermissiblenon-auditservicesotherthantheones listedinthegeneralpre-approvaland(ii)obtainingservicesthatarelistedinthegeneralpre-approvalbutof 117 ![]() whichthetotalfeeamountexceedstheamountaffirmedbythegeneralpre-approval.Thedeterminationof whetherornottograntarequesttorevisethegeneralpre-approvalnotedintheforegoingmayalternativelybe madebyanaudit&supervisoryboardmember(fulltime),whoisdesignatedinadvancebyaresolutionofthe audit&supervisoryboard,inwhichcasesuchaudit&supervisoryboardmember(fulltime)shallreportsuch decisionatthenextmeetingoftheaudit&supervisoryboard.Theperformanceofauditandpermissible non-auditservicesandthepaymentoffeesaresubjecttoreviewbytheaudit&supervisoryboardatleastonce every fiscal half year. Noneoftheauditrelatedfees,taxfeesorallotherfeesdescribedinthetableabovewereapprovedbythe audit&supervisoryboardpursuanttothedeminimisexceptionprovidedbyparagraph(c)(7)(i)(C)ofRule2-01 of Regulation S-X. ITEM16D.EXEMPTIONSFROMTHELISTINGSTANDARDSFORAUDITCOMMITTEES Toyotadoesnothaveanauditcommittee.Toyotaisrelyingonthegeneralexemptioncontainedin Rule10A-3(c)(3)undertheExchangeAct,whichprovidesanexemptionfromtheNYSE’slistingstandards relatingtoauditcommitteesforforeigncompanieslikeToyotathathaveanaudit&supervisoryboard.Toyota’s relianceonRule10A-3(c)(3)doesnot,initsopinion,materiallyadverselyaffecttheabilityofitsaudit& supervisory board to act independentlyand to satisfy the other requirementsof Rule 10A-3. ITEM16E.PURCHASESOFEQUITYSECURITIESBYTHEISSUERANDAFFILIATED PURCHASERS ThefollowingtablesetsforthpurchasesofToyota’scommonstockbyToyotaanditsaffiliatedpurchasers during fiscal 2022: Period (a) Total Numberof Shares Purchased (1)(2) (b) Average PricePaidper Share (Yen) (1)(2) (c) Total Numberof Shares Purchasedas Partof Publicly Announced Plansor Programs (1)(3) (d) Maximum Numberof Shares thatMay YetBe Purchased Underthe Plansor Programs (1)(3) April 1, 2021 – April 30, 2021 ...................... 6,4808,442.05—— May 1, 2021 – May 31, 2021 ....................... 6,2858,482.47—— June 1, 2021 – June 30, 2021 ....................... 11,025,1559,785.9511,008,000— July 1, 2021 – July 31, 2021 ........................ 36,347,4259,721.7036,342,000— August 1, 2021 – August 31, 2021 ................... 64,503,9609,620.5864,498,500— September 1, 2021 – September 30, 2021 .............. 17,367,3059,704.5717,358,500— October 1, 2021 – October 31, 2021 .................. 2,4701,965.89—— November 1, 2021 – November 30, 2021 .............. 11,911,5752,096.9911,910,000— December 1, 2021 – December 31, 2021 .............. 20,121,7412,063.7120,120,000— January 1, 2022 – January 31, 2022 .................. 12,157,6202,304.5312,156,400— February 1, 2022 – February 28, 2022 ................ 15,174,5452,213.8215,173,600— March 1, 2022 – March 31, 2022 .................... 13,107,1952,022.1913,106,500— Total .......................................... 201,731,756—201,673,500— (1)Toyotaeffectedafive-for-onestocksplitofsharesofitscommonstockwitha recorddateofSeptember30, 2021andaneffectivedateofOctober1,2021.TheabovenumbersfortheperiodfromApril1,2021 through September30,2021 arecalculatedbasedon theassumptionthatthestock splitwas implementedon April 1, 2021. 118 (2)Aportionoftheabovepurchasesweremadeasaresultofholdersofsharesconstitutinglessthanoneunit, whichis100sharesofcommonstock,requestingToyotatopurchasesharesthatareafractionofaunit,in accordancewithToyota’ssharehandlingregulations.Toyotaisrequiredtocomplywithsuchrequests pursuanttotheCompaniesAct.See“AdditionalInformation—MemorandumandArticlesofAssociation — JapaneseUnitShareSystem.”Thenumberofsharespurchasednotpursuantto publiclyannounced plans orprogramsconductedinfiscal2022is57,561(calculatedbasedontheassumptionthatthestocksplitwas implemented on April 1, 2021). (3)ToyotaannouncedonMay12,2021thatitwouldrepurchaseupto41millionshares(205millionshares afterconsideringstocksplit)ofitscommonstockbetweenJune18,2021toSeptember30,2021atatotal maximumpurchasepriceof250billionyen,inordertoreturntoshareholderstheprofitsderivedinfiscal 2021.ToyotaalsoannouncedonNovember4,2021thatitwouldrepurchaseupto120millionsharesofits commonstockbetweenNovember5,2021toMarch31,2022atatotalmaximumpurchasepriceof 150billionyeninordertoreturntoshareholderstheprofitsderivedinthefirsthalfoffiscal2022.Toyota furtherannouncedonMarch23,2022thatitwouldrepurchaseupto80millionsharesofitscommonstock betweenMarch24,2022toMay10,2022atatotalmaximumpurchasepriceof100billionyentoprovide more flexibility with respectto repurchases than in the past. ITEM16F.CHANGEINREGISTRANT’SCERTIFYINGACCOUNTANT Not applicable. ITEM16G.CORPORATEGOVERNANCE SignificantDifferencesinCorporateGovernancePracticesbetweenToyotaandU.S.CompaniesListedon theNYSE PursuanttohomecountrypracticesexemptionsgrantedbytheNYSE,Toyotaispermittedtofollowcertain corporate governancepracticescomplying with Japaneselaws, regulationsand stock exchangerules in lieuof the NYSE’slistingstandards.TheSECapprovedchangestotheNYSE’slistingstandardsrelatedtocorporate governancepracticesoflistedcompanies(the“NYSECorporateGovernanceRules”)inNovember2003,as furtheramendedinNovember2004.Toyotaisexemptfromtheapprovedchanges,exceptforrequirementsthat (a)Toyota’saudit&supervisoryboardsatisfiestherequirementsofRule10A-3undertheSecuritiesExchange Actof1934,asamended(the“ExchangeAct”),(b)Toyotamustdisclosesignificantdifferencesinitscorporate governancepracticesascomparedtothosefollowedbydomesticcompaniesundertheNYSElistingstandards, (c)Toyota’sprincipalexecutiveofficermustnotifytheNYSEinwritingafteranyexecutiveofficerofToyota becomesawareofanynon-compliancewith(a)and(b),and(d)Toyotamustsubmitannualandinterimwritten affirmationstotheNYSE.Toyota’scorporategovernancepracticesandthosefollowedbydomesticcompanies under the NYSE Corporate Governance Rules have the following significantdifferences: 1.MembersoftheBoardofDirectors. Toyotacurrentlydoesnothaveanymembersoftheboardof directorswhowillbedeemedan“independentdirector”asrequiredundertheNYSECorporateGovernance RulesforU.S.listedcompanies.UnliketheNYSECorporateGovernanceRules,theCompaniesActdoesnot requireJapanesecompanieswithanaudit&supervisoryboardsuchasToyotatohaveanyindependentdirectors onitsboardofdirectors.WhiletheNYSECorporateGovernanceRulesrequirethatthenon-management directorsofeachlistedcompanymeetatregularlyscheduledexecutivesessionswithoutmanagement,Toyota currentlyhasnonon-managementmemberonitsboardofdirectors.UnliketheNYSECorporateGovernance Rules, theCompaniesActdoes notrequire,andaccordinglyToyota doesnothave, aninternalcorporateorganor committee comprised solelyof independent directors. 119 The CompaniesAct requires Toyotato have outsidemembers ofthe board of directorsunder theCompanies Act.Toyotacurrentlyhasthreeoutsidemembersoftheboardofdirectors.An“outside”memberoftheboardof directors refers to: (a)apersonwhoisnot,andhasneverbeenduringthetenyearperiodbeforebecominganoutsidemember oftheboardofdirectors,anexecutivedirector(amemberofthe boardofdirectorswhoengagesintheexecution ofbusiness),executiveofficer,manageroremployee(collectively,“ExecutiveDirector,etc.”)ofToyotaorits subsidiaries; (b)ifapersonwasamemberoftheboardofdirectors,accountingcounselor(inthe casethatanaccounting counselorisalegalentity,anemployeeofsuchentitywhoisinchargeofitsaffairs)oraudit&supervisory boardmember(excludingthosewhohaveeverbeenExecutiveDirectors,etc.)ofToyotaoranyofits subsidiariesatanytimeduringthetenyearperiodbeforebecominganoutsidememberoftheboardof directors, suchpersonwhohasnotbeenanExecutiveDirector,etc.ofToyotaoranyofitssubsidiariesduringthetenyear periodbeforebecomingamemberoftheboardofdirectors,accountingcounselororaudit&supervisoryboard member; and (c)apersonwhoisnotaspouseorrelativewithintheseconddegreeofkinshipofanymemberoftheboard of directors or manager or otherkey employee of Toyota. Suchqualificationsforan“outside”memberoftheboardofdirectorsaredifferentfromthedirector independence requirements under theNYSE Corporate Governance Rules. Inaddition,pursuanttotheregulationsoftheJapanesestockexchanges,Toyotaisrequiredtohaveoneor more“independentdirector(s)/audit&supervisoryboardmember(s),”definedundertherelevantregulationsof theJapanesestockexchangesas“outsidedirectors”or“outsideaudit&supervisoryboardmembers”(asdefined undertheCompaniesAct),whoareunlikelytohaveanyconflictsofinterestswithToyota’sgeneral shareholders,andisalsorequiredtomakeeffortstohaveatleastone“independentdirector(s)/audit& supervisoryboardmember(s)”whoisalsoadirector.Eachoftheoutsidemembersoftheboardofdirectorsof Toyotasatisfiesthe“independentdirector/audit&supervisoryboardmember”requirementsunderthe regulationsoftheJapanesestockexchanges.TheJapaneseCorporateGovernanceCodeprovidesthatcertain listedcompanies,includingToyota,shouldappointatleastonethirdoftheirdirectorsas“independentoutside directors”asdefinedbasedonthecriteriaforassessingdirectorindependenceestablishedbyToyotainlinewith theindependencestandardsoftheJapanesestockexchanges.Thecontentofthecriteriaforassessingdirector independenceestablishedbyToyotaisthesameasthatoftheindependencestandardsoftheJapanesestock exchanges,andeachoftheoutsidemembersoftheboardofdirectorsofToyotasatisfiesthe“independent outsidedirector”requirementsundersuchindependencestandards.Thedefinitionof“independentdirector/ audit&supervisoryboardmember”and“independentoutsidedirector”isdifferentfromthatofthedefinitionof independent director under the NYSE Corporate GovernanceRules. 2.Committees. UndertheCompaniesAct,Toyotahaselectedtostructureitscorporategovernancesystem asacompanywithaudit&supervisoryboardmemberswhoareunderastatutorydutytomonitor,reviewand reportonthemanagementoftheaffairsofToyota.Toyota,aswithotherJapanesecompanieswithanaudit& supervisoryboard,doesnothavecertaincommitteesthatarerequiredofU.S.listedcompaniessubjecttothe NYSECorporateGovernanceRules,includingthosethatareresponsiblefordirectornomination,corporate governanceandexecutivecompensation.However,membersofToyota’sExecutiveAppointmentMeeting,a majorityofwhomareoutsidedirectors,discussrecommendationstotheboardofdirectorsconcerningthe appointmentanddismissalofmembersoftheboardof directorsandtheExecutiveAppointment Meetingdiscuss thedetailsoftheproposalstoaudit&supervisoryboard.MembersoftheExecutiveCompensationMeeting,a majorityofwhomareoutsidedirectors,reviewtheremunerationsystemformembersofboardofdirectorsand seniormanagementaswellasdeterminetheamountofremunerationforeachmemberoftheboardofdirectors. TheJapaneseCorporateGovernanceCodeprovidesthatcertainlistedcompanies,includingToyota,generally shouldhavethemajorityofthemembersofeachofcertaincommitteesbeindependentdirectors,andthose committees of Toyota satisfythat principle. 120 PursuanttotheCompaniesAct,Toyota’sboardofdirectorsnominatesandsubmitsaproposalforthe appointmentofmembersoftheboardofdirectorsforshareholderapproval.Theshareholdersvoteonsuch nominationatthegeneralshareholders’meeting.TheCompaniesActrequiresthatthelimitsorcalculation formulaoftheremuneration,bonusandanyotherbenefitsincompensationfortheexecutionofduties (“remuneration,etc.”)ofdirectors,thekindofremuneration,etc.(incasethattheremuneration,etc.areother thancash(excludingsharesandstockacquisitionrights))tobereceivedbydirectors,andthelimitsof remuneration,etc.thataresharesandstockacquisitionrightstobegrantedtodirectorsaswellasthelimitsof remuneration,etc.tobepaidtoaudit&supervisoryboardmembersmustbedeterminedbyaresolutionofthe generalshareholders’meeting,unless theirremuneration,etc.isprovidedfor inthearticlesof incorporation.The distributionof remuneration,etc.,amongeachmember oftheboardof directorsisbroadlydelegated tothe board of directors andthe distribution of remunerationamong each audit & supervisoryboard member is determinedby consultation among the audit & supervisoryboard members. 3.AuditCommittee. Toyotaavailsitselfofparagraph(c)(3)ofRule10A-3oftheExchangeAct,which providesageneralexemptionfromtheauditcommitteerequirementstoaforeignprivateissuerwithanaudit& supervisory board, subject to certainrequirements which continueto be applicable under Rule 10A-3. PursuanttotherequirementsoftheCompaniesAct,Toyotaelectsitsaudit&supervisoryboardmembers througharesolutionadoptedatageneralshareholders’meeting.Toyotacurrentlyhassixaudit&supervisory board members, whichexceeds the minimumnumber of audit & supervisoryboard members required pursuantto the Companies Act. UnliketheNYSE CorporateGovernanceRules,theCompaniesAct,amongothers,doesnot requireaudit& supervisory boardmembersto establishan expertisein accounting orfinancial managementnor arethey required topresentotherspecialknowledgeandexperience.Therefore,noneofToyota’saudit&supervisoryboard membershas“anexpertiseinaccountingorfinancialmanagement”assetforthintheNYSECorporate GovernanceRules.TheJapaneseCorporateGovernanceCodeindicatesthatpersonswithappropriateexperience andskillsaswellasnecessaryknowledgeoffinance,accounting,andlawsshouldbeappointedasaudit& supervisoryboardmembers,andinparticular,oneormoreaudit&supervisoryboardmemberswhohave sufficientknowledgeoffinanceandaccountingmattersshouldbeappointed.Toyotahasappointedpersonswho areabletoprovideopinionsandadviceregardingmanagementbasedontheirbroaderexperienceanddiscretion beyondfinanceandaccounting.UndertheCompaniesAct,theaudit&supervisoryboardmaydeterminethe auditingpoliciesandmethodsofinvestigatingtheconditionsofToyota’sbusinessandassets,andmayresolve othermattersconcerningtheexecutionoftheaudit&supervisoryboardmember’sduties.Theaudit& supervisoryboardalsopreparesauditors’reportsandgivesconsenttoproposalsofthenominationofaudit& supervisoryboardmembers.Further,theaudit&supervisoryboardmakesdecisionsconcerningproposals relatingtotheappointmentanddismissalofaccountingauditors;italsohastheauthoritytodismissthe accounting auditor when certain mattersspecified under the CompaniesAct occur. Toyotacurrentlyhasthreeoutsideaudit&supervisoryboardmembersundertheCompaniesAct.Underthe Companies Act,atleasthalf oftheaudit &supervisoryboard membersmust bean “outside”audit& supervisory board member, which is any person who satisfiesall of the following requirements: (a)the personhasneverbeen amemberof theboardofdirectors,accounting counselor(inthecasethat an accountingcounselorisalegalentity,anemployeeofsuchentitywhoisinchargeofitsaffairs), executiveofficer,manageroremployeeofToyotaoritssubsidiariesduringthetenyearperiodbefore becoming an outside audit & supervisoryboard member; (b)ifthepersonwasanaudit&supervisoryboardmemberofToyotaorany ofitssubsidiariesat anytime duringthetenyearperiodbeforebecominganoutsideaudit&supervisoryboardmember,suchperson hasnotbeenamemberoftheboardofdirectors,accountingcounselor(inthecasethatanaccounting counselor isalegalentity, anemployeeofsuch entitywhois inchargeofits affairs),executiveofficer, manageroremployeeofToyotaoranyofitssubsidiariesduringthetenyearperiodbeforebecoming an audit & supervisory board memberof Toyota or any of its subsidiaries;and 121 (c)thepersonisnotaspouseorrelativewithintheseconddegreeofkinshipofanymemberoftheboard of directors or manager or otherkey employee of Toyota. Suchqualificationsforan“outside”audit&supervisoryboardmemberaredifferentfromtheaudit committee independence requirementunder the NYSE Corporate Governance Rules. Eachoftheoutsideaudit&supervisoryboardmembersofToyotasatisfiesthe“independentdirector/ audit&supervisoryboardmember”requirementsundertheregulationsoftheJapanesestockexchanges,as described above in “1. Members of theBoard of Directors.” 4.CorporateGovernanceGuidelines. UnliketheNYSECorporateGovernanceRules,Toyotaisnot requiredtoadopttheJapaneseCorporateGovernanceCodeunderJapaneselawsandregulations,includingthe CompaniesAct,theFinancialInstrumentsandExchangeLawofJapanandstockexchangerules.However,if ToyotadoesnotcomplywiththeJapaneseCorporateGovernance Code,itisrequiredtoexplainthereasonswhy itdoesnotdosoinaccordancewiththeregulationsoftheJapanesestockexchanges.Inaddition,Toyotais required toresolveatthe boardofdirectorsmattersrelatingto asystem, whichis requiredunder theordinanceof theMinistryofJustice(“internalcontrolsystem”or“ naibu-tosei ”),toensuretheexecutionofdutiesofthe membersoftheboardofdirectorstocomplywithlaws,regulationsandarticlesofincorporation,andanyother systemstoensuretheadequacyofthebusiness,andtodisclosesuchmattersresolved,policiesandthepresent statusofitscorporategovernanceinitsbusinessreports,annualsecuritiesreportandcertainotherdisclosure documentsinaccordancewiththeregulationsundertheFinancialInstrumentsandExchangeLawandstock exchange rules in respect of timelydisclosure. 5.CodeofBusinessConductandEthics. SimilartotheNYSECorporateGovernanceRules,underthe JapaneseCorporateGovernanceCode,Toyotaisencouragedtoadoptacodeofconductregardingethical businessactivitiesformembersoftheboardofdirectors,officersandemployees.Toyotahasresolvedmatters relatingtomaintenanceofan“internalcontrolsystem,”or“ naibu-tosei,” inordertoensureitsemployees complywithlaws,regulationsandthearticlesofincorporation,etc.,pursuanttotheCompaniesAct,andToyota maintainsguidelinesandinternalregulationssuchas“GuidingPrinciplesatToyota,”“ToyotaCodeofConduct” andacodeofethicspursuanttoSection406oftheSarbanes-OxleyAct.Pleasesee“CodeofEthics”for additional information. ITEM16H.MINESAFETYDISCLOSURE Not applicable. ITEM16I.DISCLOSUREREGARDINGFOREIGNJ URISDICTIONSTHATPREVENTINSPECTIONS Not applicable. 122 PARTIII ITEM17.FINANCIALSTATEMENTS Not applicable. ITEM18.FINANCIALSTATEMENTS The following financial statementsare filed as part of thisannual report on Form 20-F. 123 ![]() TOYOTAMOTORCORPORATION INDEXTOCONSOLIDATEDFINANCIALSTATEMENTS Page Report of Independent Registered Public AccountingFirm (PCAOB ID: 2743) ....................F-2 Consolidated statement of financialposition at March 31, 2021 and 2022 .........................F-4 Consolidated statement of incomefor the years ended March 31, 2020, 2021 and 2022 ...............F-6 Consolidated statement of comprehensiveincome for the yearsended March 31, 2020, 2021 and 2022. .F - 7 Consolidated statement of changesin equity for the years ended March31, 2020, 2021 and 2022 .......F-8 Consolidated statement of cash flowsfor the years ended March 31, 2020, 2021 and 2022 ............F-10 Notes to consolidated financialstatements ..................................................F-11 Allfinancialstatementsschedulesareomittedbecausetheyarenotapplicableortherequiredinformationis shown in the financial statementsor the notes thereto. Financialstatementsof50%orlessownedpersonsaccountedforbytheequitymethodhavebeenomitted because none of them meets the significancetests specifiedin Rule 3-09 of Regulation S-X. F-1 ReportofIndependentRegisteredPublicAccountingFirm To the Shareholders and Board of Directors of Toyota Jidosha Kabushiki Kaisha (“Toyota Motor Corporation”) OpinionsontheFinancialStatementsandInternalControloverFinancialReporting We have audited the accompanying consolidated statement of financial position of Toyota Motor Corporationand its subsidiaries (collectively referredtoasthe“Company”)asofMarch31,2022and2021,andtherelatedconsolidatedstatementsofincome,comprehensiveincome, changesinequityandcashflowsforeachofthethreeyearsintheperiodendedMarch31,2022,includingtherelatednotes(collectively referredtoasthe“consolidatedfinancialstatements”).WealsohaveauditedtheCompany’sinternalcontroloverfinancialreportingasof March31,2022,basedoncriteriaestablishedin InternalControl—IntegratedFramework (2013)issuedbytheCommitteeofSponsoring Organizations of the Treadway Commission (COSO). Inouropinion,theconsolidatedfinancialstatementsreferredtoabovepresentfairly,inallmaterialrespects,thefinancialpositionofthe CompanyasofMarch31,2022and2021,andtheresultsofitsoperationsanditscashflowsforeachofthethreeyearsintheperiodended March31,2022inconformitywithInternationalFinancialReportingStandardsasissuedbytheInternationalAccountingStandardsBoard. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, 2022, based on criteria established in InternalControl—IntegratedFramework (2013) issued by the COSO. BasisforOpinions TheCompany’smanagementisresponsiblefortheseconsolidatedfinancialstatements,formaintainingeffectiveinternalcontrolover financialreporting,andforitsassessmentoftheeffectivenessofinternalcontroloverfinancialreporting,includedinManagement’sAnnual Report onInternalControlOverFinancialReportingappearingunderItem 15(b).Ourresponsibility istoexpressopinions ontheCompany’s consolidatedfinancialstatementsandontheCompany’sinternalcontroloverfinancialreportingbasedonouraudits.Weareapublic accountingfirmregisteredwiththePublicCompanyAccountingOversightBoard(UnitedStates)(PCAOB)andarerequiredtobe independentwithrespecttotheCompanyinaccordancewiththeU.S.federalsecuritieslawsandtheapplicablerulesandregulationsofthe Securities and Exchange Commission and the PCAOB. WeconductedourauditsinaccordancewiththestandardsofthePCAOB.Thosestandardsrequirethatweplanandperformtheauditsto obtainreasonableassuranceaboutwhethertheconsolidatedfinancialstatementsarefreeofmaterialmisstatement,whetherduetoerroror fraud, and whether effective internal controlover financial reporting was maintainedin all material respects. Ourauditsoftheconsolidatedfinancialstatementsincludedperformingprocedurestoassesstherisksofmaterialmisstatementofthe consolidatedfinancialstatements,whetherduetoerrororfraud,andperformingproceduresthatrespondtothoserisks.Suchprocedures includedexamining,onatestbasis,evidenceregardingtheamountsanddisclosuresintheconsolidatedfinancialstatements.Ourauditsalso includedevaluatingtheaccountingprinciplesusedandsignificantestimatesmadebymanagement,aswellasevaluatingtheoverall presentationoftheconsolidatedfinancialstatements.Ourauditofinternalcontroloverfinancialreportingincludedobtainingan understandingofinternalcontroloverfinancialreporting,assessingtheriskthatamaterialweaknessexists,andtestingandevaluatingthe design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. Webelieve that our audits provide a reasonablebasis for our opinions. DefinitionandLimitationsofInternalControloverFinancialReporting Acompany’sinternalcontroloverfinancialreportingisaprocessdesignedtoprovidereasonableassuranceregardingthereliabilityof financialreportingandthepreparationoffinancialstatementsforexternalpurposesinaccordancewithgenerallyacceptedaccounting principles. Acompany’sinternalcontroloverfinancialreportingincludesthosepoliciesandproceduresthat(i)pertaintothemaintenanceof recordsthat,inreasonabledetail,accuratelyandfairlyreflectthetransactionsanddispositionsoftheassetsofthecompany;(ii)provide reasonableassurancethattransactionsarerecordedasnecessarytopermitpreparationoffinancialstatementsinaccordancewithgenerally acceptedaccountingprinciples,andthatreceiptsandexpendituresofthecompanyarebeingmadeonlyinaccordancewithauthorizationsof managementanddirectorsofthecompany;and(iii)providereasonableassuranceregardingpreventionortimelydetectionofunauthorized acquisition, use, or dispositionof the company’s assets that could have a materialeffect on the financialstatements. Becauseofitsinherentlimitations, internalcontroloverfinancialreportingmaynotpreventordetectmisstatements. Also,projectionsofany evaluationofeffectivenesstofutureperiodsaresubjecttotheriskthatcontrolsmaybecomeinadequatebecauseofchangesinconditions,or that the degree of compliance with the policiesor procedures may deteriorate. CriticalAuditMatters Thecriticalauditmatterscommunicatedbelowaremattersarisingfromthecurrentperiodauditoftheconsolidatedfinancialstatementsthat werecommunicatedorrequiredtobecommunicatedtotheauditcommitteeandthat(i)relatetoaccountsordisclosuresthatarematerialto theconsolidatedfinancialstatementsand(ii)involvedourespeciallychallenging,subjective,orcomplexjudgments.Thecommunicationof F-2 criticalauditmattersdoesnotalterinanywayouropinionontheconsolidatedfinancialstatements,takenasawhole,andwearenot,by communicatingthecriticalauditmattersbelow,providingseparateopinionsonthecriticalauditmattersorontheaccountsordisclosuresto which they relate. Liabilitiesforthecostsofrecallsandothersafetymeasures AsdescribedinNotes3and24totheconsolidatedfinancialstatements, theCompanyaccruesforcostsofrecallsandothersafetymeasures. AsofMarch31,2022,estimatedliabilitiesforthecostsofrecallsandothersafetymeasures totaled¥1,171,213million andwereincludedin liabilitiesforqualityassuranceintheconsolidatedstatementoffinancialposition.TheCompanymeasuresthemajorityofliabilitiesforthe costs of recalls and other safety measures at the time of vehicle sales comprehensively by aggregate sales of various models in a certain period bygeographicalregions.However,whencircumstanceswarrant,theCompanymeasuresliabilitiesforcostsofaparticularrecallorother safetymeasuresusinganindividualmodelwhentheyareprobableandreasonablyestimable.Managementcalculatestheliabilitiesforthe costsofrecallsandothersafetymeasuresthataredeterminedcomprehensivelybasedontheaccumulatedamountofrepaircostpaidand pattern of actual payment occurrence. Theprincipalconsiderationsforourdeterminationthatperformingproceduresrelatingtoliabilitiesforthecostsofrecallsandothersafety measuresthataredeterminedcomprehensivelyisacriticalauditmatterare1)significantjudgmentandestimationwasrequiredby management whendevelopingtheliabilities whichin turnledto ahighdegreeofauditor judgmentand subjectivityinperforming procedures to evaluatemanagement’sassumptions; and2)significant auditeffortwasnecessary relatingto testingtheaccumulated amountof repaircost paidandpatternofactualpaymentoccurrenceutilizedindevelopingtheestimate.Inaddition,theauditeffortincludedtheinvolvementof professionals with specialized skillsand knowledge to assist in performingthese procedures and evaluating the auditevidence obtained. Addressingthematterinvolvedperformingproceduresandevaluatingauditevidenceinconnectionwithformingouroverallopiniononthe consolidatedfinancialstatements.Theseproceduresincludedtestingtheeffectivenessofcontrolsrelatingtoliabilitiesforthecostsofrecalls andothersafetymeasures,includingcontrolsrelatedtothedeterminationofthesignificantassumptionsanddatausedtocalculatethe liabilitiesthataredeterminedcomprehensively.Theseproceduresalsoincluded,amongothers:1)testingmanagement’sprocessfor estimatingtheliabilities,includingevaluatingthereasonablenessofthesignificantassumptions;and2)testingofthecompletenessand accuracyofthedatausedintheestimate.Wealsoutilizedprofessionalswithspecializedskillsandknowledgetoassistusintestingthe liabilitiesbydevelopinganindependentrangeofreasonableestimatedlossbasedontheCompany’sdataandindependentlydeveloped assumptions. AllowanceforCreditLosses—Retailfinancereceivables AsdescribedinNotes3,8and19totheconsolidatedfinancialstatements,theCompanymeasuresanallowanceforcreditlossesonitsretail finance receivables by estimating the expected credit losses at the reporting date. As of March 31, 2022, ¥230,104 millionof the allowance for creditlossescorrespondingto¥17,647,440millionofretailfinancereceivableswasrecordedintheconsolidatedstatementoffinancial position.Theallowanceforcreditlossesonretailfinancereceivablesismeasuredbasedonasystematic,ongoingreviewandevaluation performed aspart ofthecredit risk evaluationprocess, historical lossexperience, thesize andcomposition of theportfolios, current economic eventsandconditions,theestimatedfairvalueandadequacyofcollateral,forward-lookinginformationincludingmovementsoftheworld economyandotherpertinentfactors.Incalculatingtheexpectedcreditlosses,theCompanyusestheprobability ofadefault andthelossrate intheeventofadefaultbasedonpastexperienceandthenreflectsadjustmentsbasedonitsforecastsofcurrentandfutureeconomic conditions. RetailfinancereceivableswithintheUnitedStatesrepresent approximatelyahalfoftheconsolidated retailfinancereceivablesas of March 31, 2022. Theprincipalconsiderationsforourdeterminationthatperformingproceduresrelatingtotheallowanceforcreditlossesonretailfinance receivablesisacriticalauditmatterare1)therewasasignificantamountofjudgmentbymanagementwhendeterminingassumptionsofthe probabilityofadefault,thelossrateintheeventofadefault,andadjustmentsbasedontheforecastsofcurrentandfutureeconomic conditions usedintheestimatingof theallowanceforcreditlosses,whichinturnledtoahighdegree ofauditorjudgment andsubjectivity in performingprocedurestoevaluatethosemanagement’sassumptionsandadjustments;2)therewasahighlevelofcomplexityinassessing audit evidence relatedto management’s estimate.In addition, the auditeffort included the involvement ofprofessionals with specialized skills and knowledge to assist in performing theseprocedures and evaluating the audit evidence obtained. Addressingthematterinvolvedperformingproceduresandevaluatingauditevidenceinconnectionwithformingouroverallopiniononthe consolidatedfinancialstatements.TheseproceduresincludedtestingtheeffectivenessofcontrolsrelatingtotheCompany’sallowancefor credit losses onretail financereceivables, including controls overdata supportingthe assumptions, such asthe probability of adefault and the loss ratein theevent ofa defaultbased onpast experience,and adjustments usedtodetermine the allowance.These proceduresalso included, amongothers,testingmanagement’sprocessforestimatingtheallowance,includingevaluatingthereasonablenessoftheassumptionsand adjustments. We also used professionals with specialized skills and knowledge to assist us in evaluating the reasonableness ofthe assumptions and adjustments determined by management. /s/ PricewaterhouseCoopers Aarata LLC Nagoya, Japan June 23, 2022 We have served as the Company’s auditor since 2006. F-3 ![]() TOYOTAMOTORCORPORATION CONSOLIDATEDSTATEMENTOFFINANCIALPOSITION Yeninmillions NotesMarch31,2021March31,2022 Assets Current assets Cash and cash equivalents .................................6 5,100,8576,113,655 Trade accounts and other receivables ........................7 2,958,7423,142,832 Receivables related to financialservices ......................8 6,756,1897,181,327 Other financial assets ....................................9 4,215,4572,507,248 Inventories ............................................. 10 2,888,0283,821,356 Income tax receivable .................................... 112,458163,925 Other current assets ...................................... 745,070791,947 Total current assets ...................................... 22,776,80023,722,290 Non-current assets Investments accounted for usingthe equity method ............. 11 4,160,8034,837,895 Receivables related to financialservices ......................8 12,449,52514,583,130 Other financial assets ....................................9 9,083,9149,517,267 Property, plant and equipment Land .............................................. 12 1,345,0371,361,791 Buildings .......................................... 12 4,999,2065,284,620 Machinery and equipment ............................. 12 12,753,95113,982,362 Vehicles and equipment on operating leases .............. 12 6,203,7216,781,229 Construction in progress .............................. 12 675,875565,528 Total property, plant and equipment,at cost ............... 12 25,977,79127,975,530 Less - Accumulated depreciation andimpairment losses ..... 12 (14,566,638)(15,648,890) Total property, plant and equipment,net ................. 12 11,411,15312,326,640 Right of use assets ....................................... 13 390,144448,412 Intangible assets ........................................ 14 1,108,6341,191,966 Deferred tax assets ...................................... 15 336,224342,202 Other non-current assets .................................. 23 549,942718,968 Total non-current assets .................................. 39,490,33943,966,482 Total assets ................................................ 62,267,14067,688,771 The accompanying notes are an integralpart of these consolidated financialstatements. F-4 ![]() TOYOTAMOTORCORPORATION CONSOLIDATEDSTATEMENTOFFINANCIALPOSITION—(Continued) Yeninmillions NotesMarch31,2021March31,2022 Liabilities Current liabilities Trade accounts and other payables .......................... 16 4,045,9394,292,092 Short-term and current portionof long-term debt ............... 17 12,212,06011,187,839 Accrued expenses ....................................... 1,397,1401,520,446 Other financial liabilities .................................. 18 763,8751,046,050 Income taxes payable .................................... 350,880826,815 Liabilities for qualityassurance ............................ 24 1,482,8721,555,711 Other current liabilities ................................... 1,207,7001,413,208 Total current liabilities ................................... 21,460,46621,842,161 Non-current liabilities Long-term debt ......................................... 17 13,447,57515,308,519 Other financial liabilities .................................. 18 323,432461,583 Retirement benefit liabilities ............................... 23 1,035,0961,022,749 Deferred tax liabilities .................................... 15 1,247,2201,354,794 Other non-current liabilities ............................... 465,021544,145 Total non-current liabilities ................................ 16,518,34418,691,790 Total liabilities ............................................. 37,978,81140,533,951 Shareholders’ equity Common stock .......................................... 25 397,050397,050 Additional paid-in capital ................................. 25 497,275498,575 Retained earnings ....................................... 25 24,104,17626,453,126 Other components of equity ............................... 25 1,307,7262,203,254 Treasury stock .......................................... 25 (2,901,680)(3,306,037) Total Toyota Motor Corporation shareholders’equity ........... 25 23,404,54726,245,969 Non-controlling interests .................................. 883,782908,851 Total shareholders’ equity ..................................... 24,288,32927,154,820 Total liabilities and shareholders’equity ............................. 62,267,14067,688,771 The accompanying notes are an integralpart of these consolidated financialstatements. F-5 ![]() TOYOTAMOTORCORPORATION CONSOLIDATEDSTATEMENTOFINCOME Yeninmillions Notes Fortheyearended March31,2020 Fortheyearended March31,2021 Fortheyearended March31,2022 Sales revenues Sales of products .................. 26 27,693,69325,077,39829,073,428 Financial services .................. 26 2,172,8542,137,1952,306,079 Total sales revenues ................ 26 29,866,54727,214,59431,379,507 Costs and expenses Cost of products sold ............... 23,103,59621,199,89024,250,784 Cost of financial services ............ 1,381,7551,182,3301,157,050 Selling, general and administrative .... 2,981,9652,634,6252,975,977 Total costs and expenses ............ 27,467,31525,016,84528,383,811 Operating income ...................... 2,399,2322,197,7482,995,697 Share of profit (loss) of investments accounted for using the equity method. . .11310,247351,029560,346 Other finance income ................... 28 305,846435,229334,760 Other finance costs ..................... 28 (47,155)(47,537)(43,997) Foreign exchange gain (loss), net ......... (94,619)15,142216,187 Other income (loss), net ................. (80,607)(19,257)(72,461) Income before income taxes ............. 2,792,9422,932,3543,990,532 Income tax expense .................... 15 681,817649,9761,115,918 Net income ........................... 2,111,1252,282,3782,874,614 Net income attributable to Toyota Motor Corporation ........... 2,036,1402,245,2612,850,110 Non-controlling interests ............ 74,98537,11824,504 Net income ....................... 2,111,1252,282,3782,874,614 Yen Earnings per share attributableto Toyota Motor Corporation Basic ............................ 29 145.49160.65205.23 Diluted .......................... 29 144.02158.93205.23 The accompanying notes are an integralpart of these consolidated financialstatements. F-6 ![]() TOYOTAMOTORCORPORATION CONSOLIDATEDSTATEMENTOFCOMPREHENSIVEINCOME Yeninmillions Notes Fortheyearended March31,2020 Fortheyearended March31,2021 Fortheyearended March31,2022 Net income ........................... 2,111,1252,282,3782,874,614 Other comprehensive income, net oftax Items that will not be reclassifiedto profit (loss) Net changes in revaluation of financial assets measuredat fair value through other comprehensive income ........ 25 (243,853)387,427(49,242) Remeasurements of defined benefit plans ...................... 25 (43,399)216,272136,250 Share of other comprehensive income of equity method investees ................... 11,2562,56880,472113,641 Total of items that will notbe reclassified to profit(loss) ..... (224,684)684,172200,648 Items that may be reclassified subsequently to profit (loss) Exchange differences on translating foreign operations. .25(362,098)403,636902,844 Net changes in revaluation of financial assets measuredat fair value through other comprehensive income ........ 25 113,390(83,503)(154,174) Share of other comprehensive income of equity method investees ................... 11,25(35,253)8,172193,811 Total of items that may be reclassified subsequently to profit (loss) ................. (283,961)328,305942,480 Total other comprehensive income,net oftax ......................... 25 (508,645)1,012,4761,143,129 Comprehensive income ................. 1,602,4803,294,8544,017,742 Comprehensive income for the period attributable to Toyota Motor Corporation ........... 1,555,0093,217,8063,954,350 Non-controlling interests ............ 47,47277,04863,392 Comprehensive income ............. 1,602,4803,294,8544,017,742 The accompanying notes are an integralpart of these consolidated financialstatements. F-7 ![]() TOYOTAMOTORCORPORATION CONSOLIDATEDSTATEMENTOFCHANGESINEQUITY For the year ended March 31, 2020 Yeninmillions Notes Common stock Additional paid-in capital Retained earnings Other components ofequity Treasury stock ToyotaMotor Corporation shareholders’ equity Non- controlling interests Total shareholders’ equity Balances at April 1, 2019 .......... 397,050487,16220,613,7761,016,035(2,606,925)19,907,100748,11020,655,210 Comprehensive income Net income .................—— 2,036,140——2,036,14074,9852,111,125 Other comprehensive income, netoftax ................ 25 ——— (481,131)—(481,131)(27,514)(508,645) Total comprehensive income. . .——2,036,140(481,131)—1,555,00947,4721,602,480 Transactions with owners and other Dividends paid .............. 25 —— (618,801)——(618,801)(54,956)(673,756) Repurchase of treasury stock. . .25————(500,309)(500,309)—(500,309) Reissuance of treasury stock. . .25—4,053——20,12824,181—24,181 Change in scope of equity method ..................—— 253,590——253,590—253,590 Equity transactions and other. . .—(1,882)———(1,882)(20,503)(22,384) Total transactions with owners and other .................— 2,171(365,211)—(480,181)(843,221)(75,458)(918,679) Reclassification to retained earnings ..................... 25 —— (50,644)50,644———— Balances at March 31, 2020 ........ 397,050489,33422,234,061585,549(3,087,106)20,618,888720,12421,339,012 For the year ended March 31, 2021 Yeninmillions Notes Common stock Additional paid-in capital Retained earnings Other components ofequity Treasury stock ToyotaMotor Corporation shareholders’ equity Non- controlling interests Total shareholders’ equity Balances at April 1, 2020 .......... 397,050489,33422,234,061585,549(3,087,106)20,618,888720,12421,339,012 Comprehensive income Net income .................—— 2,245,261——2,245,26137,1182,282,378 Other comprehensive income, netoftax ................ 25 ——— 972,546—972,54639,9301,012,476 Total comprehensive income. . .——2,245,261972,546—3,217,80677,0483,294,854 Transactions with owners and other Dividends paid .............. 25 —— (625,514)——(625,514)(36,598)(662,112) Repurchase of treasury stock. . .25————(118)(118)—(118) Reissuance of treasury stock. . .25—15,041——185,544200,585—200,585 Change in scope of consolidation .............—————— 102,588102,588 Equity transactions and other. . .—(7,099)———(7,099)20,62013,521 Total transactions with owners and other .................— 7,942(625,514)—185,426(432,147)86,610(345,537) Reclassification to retained earnings ..................... 25 —— 250,369(250,369)———— Balances at March 31, 2021 ........ 397,050497,27524,104,1761,307,726(2,901,680)23,404,547883,78224,288,329 The accompanying notes are an integralpart of these consolidated financialstatements. F-8 ![]() TOYOTAMOTORCORPORATION CONSOLIDATEDSTATEMENTOFCHANGESINEQUITY—(Continued) For the year ended March 31, 2022 Yeninmillions Notes Common stock Additional paid-in capital Retained earnings Other components ofequity Treasury stock ToyotaMotor Corporation shareholders’ equity Non- controlling interests Total shareholders’ equity Balances at April 1, 2021 .......... 397,050497,27524,104,1761,307,726(2,901,680)23,404,547883,78224,288,329 Comprehensive income Net income .................—— 2,850,110——2,850,11024,5042,874,614 Other comprehensive income, netoftax ................ 25 ——— 1,104,240—1,104,24038,8891,143,129 Total comprehensive income. . .——2,850,1101,104,240—3,954,35063,3924,017,742 Transactions with owners and other Dividends paid .............. 25 —— (709,872)——(709,872)(51,723)(761,595) Repurchase of treasury stock. . .25————(404,718)(404,718)—(404,718) Reissuance of treasury stock. . .25—227——362588—588 Equity transactions and other. . .—1,074———1,07413,40014,473 Total transactions with owners and other .................— 1,300(709,872)—(404,357)(1,112,928)(38,323)(1,151,252) Reclassification to retained earnings ..................... 25 —— 208,712(208,712)———— Balances at March 31, 2022 ........ 397,050498,57526,453,1262,203,254(3,306,037)26,245,969908,85127,154,820 The accompanying notes are an integralpart of these consolidated financialstatements. F-9 ![]() TOYOTAMOTORCORPORATION CONSOLIDATEDSTATEMENTOFCASHFLOWS Yeninmillions Notes Fortheyearended March31,2020 Fortheyearended March31,2021 Fortheyearended March31,2022 Cash flows from operating activities Net income .......................................... 2,111,1252,282,3782,874,614 Depreciation and amortization ........................... 1,595,3471,644,2901,821,880 Interest income and interest costsrelated to financial services, net............................................... (193,046)(236,862)(354,102) Share of profit (loss) of investmentsaccounted for using the equity method ...................................... (310,247)(351,029)(560,346) Income tax expense ................................... 681,817649,9761,115,918 Changes in operating assets and liabilities,and other ......... (1,319,537)(1,063,562)(1,130,667) (Increase) decrease in trade accounts and other receivables .................................... 257,5885,027118,652 (Increase) decrease in receivables relatedto financial services ....................................... (1,214,742)(1,243,648)(1,213,234) (Increase) decrease in inventories .................... (163,109)(242,769)(725,285) (Increase) decrease in other current assets .............. (308,342)(163,473)71,314 Increase (decrease) in trade accounts and otherpayables. .(129,053)384,142152,399 Increase (decrease) in other current liabilities ........... 258,904282,197410,546 Increase (decrease) in retirementbenefit liabilities ....... 43,27055,28160,419 Other, net ....................................... (64,053)(140,319)(5,478) Interest received ...................................... 798,458776,748835,739 Dividends received .................................... 318,408294,520347,387 Interest paid ......................................... (506,307)(459,181)(418,043) Income taxes paid, net of refunds ......................... (777,522)(810,117)(809,763) Net cash provided by (used in) operating activities ........... 2,398,4962,727,1623,722,615 Cash flows from investing activities Additions to fixed assets excluding equipmentleased to others ............................................ (1,246,293)(1,213,903)(1,197,266) Additions to equipment leased to others ................... (2,195,291)(2,275,595)(2,286,893) Proceeds from sales of fixed assetsexcluding equipment leased to others .......................................... 47,94940,54237,749 Proceeds from sales of equipment leasedto others ........... 1,391,1931,371,6991,542,132 Additions to intangible assets ............................ (304,992)(278,447)(346,085) Additions to public and corporate bonds and stocks .......... (2,405,337)(2,729,171)(2,427,911) Proceeds from sales of public and corporatebonds and stocks. .1,151,4631,020,533282,521 Proceeds upon maturity of public and corporatebonds ........ 1,224,1851,041,3851,920,116 Other, net ........................................... 33 212,473(1,661,218)1,898,143 Net cash provided by (used in) investing activities ........... (2,124,650)(4,684,175)(577,496) Cash flows from financing activities Increase (decrease) in short-termdebt ..................... 17 279,033(1,038,438)(579,216) Proceeds from long-term debt ........................... 17 5,690,5699,656,2168,122,678 Payments of long-term debt ............................. 17 (4,456,913)(5,416,376)(8,843,665) Dividends paid to Toyota Motor Corporation common shareholders ....................................... 25 (618,801)(625,514)(709,872) Dividends paid to non-controlling interests ................. (54,956)(36,598)(51,723) Reissuance (repurchase) of treasury stock .................. (476,128)199,884(404,718) Net cash provided by (used in) financing activities ........... 362,8052,739,174(2,466,516) Effect of exchange rate changes on cash and cash equivalents ...... (141,007)220,245334,195 Net increase (decrease) in cash and cash equivalents ............. 495,6451,002,4061,012,798 Cash and cash equivalents at beginning of year ..................6 3,602,8054,098,4505,100,857 Cash and cash equivalents at end of year .......................6 4,098,4505,100,8576,113,655 The accompanying notes are an integralpart of these consolidated financialstatements. F-10 TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS 1.Reportingentity TMCisalimitedliability,joint-stockcompanylocatedinJapan,andTMC’sprincipalexecutiveofficesare registeredinToyotaCity,AichiPrefecture.TheconsolidatedfinancialstatementsofthegroupconsistofTMC, its consolidated subsidiaries(collectively, “Toyota”)and their interests in associatesand joint ventures. Toyotaanditsassociatesareprimarilyengagedinthedesign,manufacture,andsaleofsedans,minivans, compactcars,SUVs,trucksandrelatedpartsandaccessoriesthroughouttheworld.Inaddition,Toyotaandits associatesprovidefinancing,vehicleleasingandcertainotherfinancialservicesprimarilytoitsdealersandtheir customers to support the salesof vehicles and other products manufacturedby Toyota and its associates. 2.Basisofpreparation (1)Compliancewithinternationalfinancialreportingstandards Toyota’sconsolidatedfinancialstatementshavebeenpreparedinaccordancewithIFRSasissuedbythe IASB. TheconsolidatedfinancialstatementswereapprovedonJune23,2022byPresident,memberoftheBoard of Directors Akio Toyoda and CFO, member of the Board of DirectorsKenta Kon. (2)Basisofmeasurement Toyota’sconsolidatedfinancialstatementshavebeenpreparedonahistoricalcostbasis,exceptforcertain financialassetsandliabilitiesmeasuredatfairvalueandassetsandliabilitiesassociatedwithdefinedbenefit plans indicated in “3. Significantaccounting policies”. (3)Functionalcurrencyandpresentationcurrency TheconsolidatedfinancialstatementsarepresentedinJapaneseyen,whichisthefunctionalcurrencyof TMC.AllfinancialinformationpresentedinJapaneseyenhasbeenroundedtothenearestmillionJapaneseyen, except when otherwise indicated. Amounts maynot sum to totals due to rounding. 3.Significantaccountingpolicies Basisofconsolidation- (1) Subsidiaries TheconsolidatedfinancialstatementsincludetheaccountsofTMC,itssubsidiariesthatarecontrolledby TMC,andthosestructuredentitiesthatarecontrolledbyToyota.ToyotacontrolsanentitywhenToyotais exposedorhasrightstovariablereturnsfrominvolvementwiththeentity,andhastheabilitytoaffectthose returns by using its power over the entity. Thefinancialstatementsofsubsidiarieshavebeenadjustedinordertoensureconsistencywiththe accountingpoliciesadoptedbyToyotaasnecessary.Allsignificantintercompanybalancesandtransactionsas well as the unrealized profithave been eliminated in consolidation. Changesinasubsidiary’sownershipintereststhatdonotresultinalossofcontrolareaccountedforas equitytransactions.Whencontroloverasubsidiaryislost,anygainorlossonthedisposaloftheinterestsoldis recognized in profit or loss. F-11 TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) (2) Associates and joint ventures AssociatesareentitiesoverwhichToyotahasasignificantinfluenceoverthedecisionsonfinancialand operating policies, but does not have controlor joint control. JointventuresareentitiesoverwhichtwoormorepartiesincludingToyotahavejointcontrol,basedona contractualarrangement,andfinancialandbusinessdecisionsabouttherelevantactivitiesofwhichrequire unanimous consent of the partiesthat have joint control. Investmentsinassociatesandjointventuresareaccountedforusingtheequitymethod.Thefinancial statementsofassociatesand jointventureshavebeenadjustedinorderto ensureconsistencywith theaccounting policies adopted by Toyota as necessary. When theuse of theequitymethod isdiscontinued fromthedate when theinvesteesare determinedto be no longerassociatesorjointventures,anygainorlossonsuchdisposaloftheinvestmentisrecognizedinprofitor loss. Foreigncurrencytranslation- (1) Foreign currency transactions ForeigncurrencytransactionsaretranslatedintotherespectivefunctionalcurrenciesofToyotaatthe exchangeratesprevailingwhensuchtransactionsoccur.Allforeigncurrencyreceivablesandpayablesare translatedintotherespectivefunctionalcurrenciesattheapplicableexchangeratesattheendofthereporting period. Non-monetaryassets and liabilitiesin foreigncurrenciesthat are measuredat fairvalue are translatedinto the functionalcurrencyusing theexchangerateonthe datewhenthe fairvaluewasmeasured.Gains orlosseson exchange differencesarising fromsettlement offoreign currencyreceivables and payablesor on theirtranslations attheendofthereportingdatearerecognizedinprofitorloss.Furthermore,exchangedifferencesarisingfrom equityfinancialassetsmeasuredatfairvaluethroughothercomprehensiveincomeisrecognizedasother comprehensive income. (2) Foreign operations Allassetsandliabilitiesofforeignsubsidiaries,associatesandjointventures(collectively,“foreign operations”)thatuseafunctionalcurrencyotherthanJapaneseyenaretranslatedintoJapaneseyenatthe exchangeratesattheendofthereportingperiod.Allrevenuesandexpensesofforeignoperationsaretranslated intoJapaneseyenattheaverageexchangeratefortheperiodunlesstheexchangeratefluctuateswidely. Exchangedifferencesarisingfromsuchtranslationsarerecognizedinothercomprehensiveincomeand accumulatedinothercomponentsofequityintheconsolidatedstatementoffinancialposition.Whenaforeign operationisdisposedof,andcontrol,significantinfluenceorjointcontrolovertheforeignoperationislost,the cumulativeamountofexchangedifferencesrelatingtotheforeignoperationisreclassifiedfromequitytoprofit or loss. Cashandcashequivalents- Cashandcashequivalentsconsistofcashonhand,demanddeposits,andshort-terminvestmentsthatare readilyconvertibletocashandaresubjecttoinsignificantriskofchangesinvaluewiththreemonthsorless maturities from the acquisitiondate. F-12 TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) Financialinstruments- (1) Financial assets (i) Initial recognitionand measurement Toyotainitiallyrecognizesfinancialassetswhenitbecomesa partytoacontractandexceptforderivatives, classifiesfinancialassetsinto“financialassetsmeasuredatamortizedcost”,“debtandequityfinancialassets measuredatfairvaluethroughothercomprehensiveincome”or“financialassetsmeasuredatfairvaluethrough profitorloss”.Thesaleorpurchaseoffinancialassetsthatoccurredinthenormalcourseofbusinessare recognized and derecognized at the tradedate. Financialassetsclassifiedasbeingmeasuredatfairvaluethroughprofitorlossaremeasuredatfairvalue, butotherfinancialassetsareinitiallyrecognizedandmeasuredatfairvalueaddingtransactioncostsdirectly attributabletoacquisition.Tradereceivablesthatdonotcontainsignificantfinancialelementsaremeasuredat the transaction price. (a) Financial assets measuredat amortized cost Toyota classifies a financialasset as measured at amortizedcost if both of the followingconditions are met: Theassetisheldwithinabusinessmodelwhoseobjectiveistoholdfinancialassetsinordertocollect contractual cash flows; and Thecontractualtermsofthefinancialassetgiveriseonspecifieddatestocashflowsthataresolely payments of principal and intereston the principal amount outstanding. (b) Debt financial assets measuredat fair value through othercomprehensive income Debt financialassets aremeasured atfair value throughother comprehensiveincome onlyif it meetsboth of the following conditions: Theassetisheldwithinabusinessmodelwhoseobjectiveisachievedbybothcollectingcontractualcash flows and selling financial assets;and Thecontractualtermsofthefinancialassetgiveriseonspecifieddatestocashflowsthataresolely payments of principal and intereston the principal amount outstanding. (c) Equity financial assetsmeasured at fair value throughother comprehensive income Forequityfinancialassetssuchassharesheldmainlyforthepurposeofmaintainingorenhancingbusiness relationshipswithinvesteesareirrevocablydesignatedatinitialrecognition,asfinancialassetsmeasuredatfair value through other comprehensive income. (d) Financial assets measuredat fair value through profitor loss Financial assetsotherthan(a)to (c)areclassifiedas financialassetsmeasuredat fairvalue throughprofitor loss. (ii) Subsequent measurement After initial recognition,financial assets are measuredbased on the following classification. F-13 TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) (a) Financial assets measuredat amortized cost Financialassetsmeasuredatamortizedcostaremeasuredatamortizedcostusingtheeffectiveinterest method. (b) Debt financial assets measuredat fair value through othercomprehensive income Subsequentchangesinfairvalueofthefinancialassetsarerecognizedasothercomprehensiveincome. Impairmentgainsorlosses,interestincomeandforeignexchangegainsandlossesarerecognizedinprofitor loss.Whenthefinancialassetsarederecognized,thecumulativegainorlossrecognizedinothercomprehensive income is reclassifiedfrom other components of equity toprofit or loss. (c) Equity financial assetsmeasured at fair value throughother comprehensive income Subsequentchangesinfairvalueofthefinancialassetsarerecognizedasothercomprehensiveincome. Whenthefinancialassetsarederecognized,thecumulativegain orlossrecognizedthroughothercomprehensive incomeisreclassifiedfromothercomponentsofequitytoretainedearnings.Dividendsfromequityfinancial assets are recognized in profitor loss. (d) Financial assets measuredat fair value through profitor loss Subsequent changes in the fair value ofthe financial assets arerecognized in profit or loss. (iii) Impairment offinancial assets Anallowanceforcreditlossesisprovidedforexpectedcreditlossesonfinancialassetsthataremeasuredat amortizedcostaswellasdebtfinancialassetsmeasuredatfairvaluethroughothercomprehensiveincome.An allowance for creditlosses is also provided for expectedcredit losses on loan commitmentsor financialguarantee agreements that are off-balancesheet credit exposures. Attheendofthereportingperiod,Toyotaassesseswhetherthecreditriskonfinancialassetshave significantlyincreasedsinceinitialrecognition.Attheendofthereportingperiod,ifToyotaidentifiesa significantincreaseincreditrisk,allowancesforcreditlossesaremeasuredasbeingequaltotheamountof expectedcreditlossesthatwouldresultfromdefaulteventsthatarepossibleovertheexpectedlifeofafinancial asset.Attheendofthereportingperiod,ifthecreditriskforafinancialinstrumenthasnotincreased significantlysinceitsinitialrecognition,allowancesforcreditlossesaremeasuredasbeingequaltotheamount oftheexpectedcreditlossescausedbydefaulteventsthatmayoccurwithin12monthsfromtheendofthe reporting period. Foraccountsreceivablethatareincludedin“Tradeaccountsandotherreceivables”andfinancelease receivables,theallowanceiscontinuouslymeasured atamountsequalto expectedcreditlossesoverthe expected life of financial assets. Theamountofexpectedcreditlossesismeasuredasthepresentvalueofallcashshortfallsresultingfrom thedifferencebetweenthecashflowsduetoToyotainaccordancewiththecontractandcashflowsthatToyota expectstoreceive,andsuchamountisrecognizedinprofitorloss.Areversaloftheallowanceforcreditlosses resulting from a reductionin the amount of expected creditlosses is recognized in profitor loss. Ifthereisobjectiveevidenceofimpairmentsuchassignificantfinancialdifficultyofaborrower,ora defaultordelinquencybyaborrower,interestincomeismeasuredapplyingtheeffectiveinterestmethodtothe F-14 TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) netcarryingamountofthefinancialasset(afterdeductingtheallowanceforcreditloss).Financialassetsare writtenoffeitherpartiallyorfullywhenthereisnoreasonableexpectationofrecoveringafinancialassetinits entirely or a portion thereof. (iv) Derecognition of financialassets Toyotaderecognizesafinancialassetwhenthecontractualrightstothecashflowsfromtheassetexpire,or whenToyotatransfersthecontractualrighttoreceivecashflowsfromfinancialassetsintransactionsinwhich substantiallyalltherisksandrewardsofownershipoftheassetaretransferredtoanotherentity.EvenifToyota transfersafinancialasset,itneithertransfersnorholdssubstantiallyalltherisksandrewardsofownershipof suchtransferredfinancialasset.Further,incaseswhereToyotacontinuestocontrolsuchatransferredfinancial asset,Toyotarecognizestheretainedinterestonsuchfinancialassetandtherelevantliabilitiesthatmight possibly be paid in association therewith. (2) Financial liabilities (i) Initial recognitionand measurement Toyotainitiallymeasuresfinancialliabilitiesotherthanderivativesatfairvaluelesstransactioncosts directly attributableto the issuance of financial liabilities. (ii) Subsequent measurement Toyotasubsequentlymeasuresfinancialliabilitiesatamortizedcostusingtheeffectiveinterestmethod. Amortizationundertheeffectiveinterestmethodandgainorlossesonderecognitionarerecognizedasfinance income or costs and recognized in profitor loss. (iii) Derecognition of financialliabilities Toyotaderecognizesfinancialliabilitieswhenthefinancialliabilitiesexpire,thatis,whentheliability identified in the contractexpires due to performance, discharges,cancels, or expires. (3) Derivative financial instruments Toyotaemploysderivativefinancialinstruments,includingforwardforeignexchangecontracts,foreign currencyoptions,interestrateswaps,interestratecurrencyswapagreementsandinterestrateoptions,tomanage itsexposuretofluctuationsininterestratesandforeigncurrencyexchangerates.Allderivativetransactionsare measured at fair value as assetsor liabilities. Toyota does not use derivative financialinstruments for speculativeor trading purposes. Financereceivables- FinancereceivablesrecordedonToyota’sconsolidatedstatementoffinancialpositionarenetofany unearnedfinancialincomeanddeferredoriginationcostsandtheallowanceforcreditlosses.Deferred origination costs are amortizedso as to approximate a levelrate of return over the termof the related contracts. F-15 TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) Thedeterminationoffinancereceivableportfoliosisbasedprimarilyonthequalitativeconsiderationofthe natureofToyota’sbusinessoperationsandfinancereceivables.Thethreeportfolioswithinfinancereceivables are as follows: (1) Retail receivables portfolio Theretailreceivablesportfolioconsistsofretailinstallmentsalescontractsacquiredmainlyfromdealers (“autoloans”)includingcreditcardloans.Thesecontractsacquiredmustfirstmeetspecifiedcreditstandards. Thereafter, Toyota retains responsibilityfor contract collectionand administration. Thecontractperiodsofautoloansprimarilyrangefrom2to7years.Toyotaacquiressecurityinterestsin thevehiclesfinancedandhastherighttorepossessvehiclesifcustomersfailtomeettheircontractual obligations. Almostall autoloans arenon-recourse, which relievesthe dealersfrom financialresponsibilityin the event of repossession. Toyotamanagestheretailreceivablesportfolioasoneportfoliobasedoncommonriskcharacteristics associatedwiththeunderlyingfinancereceivables,thesimilarityofthecreditrisks,andthequantitative materiality. (2) Finance lease receivablesportfolio Toyotaacquiresnewvehicleleasecontractsoriginatedprimarilythroughdealers.Thecontractperiodsof theseprimarilyrangefrom2to5years.Leasecontractsacquiredmustfirstmeetspecifiedcreditstandardsafter whichToyotaassumesownershipoftheleasedvehicle.Toyotaisresponsibleforcontractcollectionand administration during the leaseperiod. Toyotaisgenerallypermittedtotakepossessionofthevehicleuponadefaultbythelessee.Theresidual valueisestimatedatthetimethevehicleisfirstleased.VehiclesreturnedtoToyotaattheendof theirleasesare sold by auction. Toyotamanagesthefinanceleasereceivablesportfolioasoneportfoliobasedoncommonrisk characteristics associatedwith the underlying finance receivablesand the similarityof the credit risks. (3) Wholesale and other dealerloan receivables portfolio Toyotaprovideswholesalefinancingtoqualifieddealerstofinanceinventories.Toyotaacquiressecurity interestsin vehiclesfinancedatwholesale.In caseswhereadditionalsecurityinterestswould berequired, Toyota takesdealershipassetsorpersonalassets,orboth, asadditionalsecurity.Ifa dealerdefaults,Toyota hasthe right to liquidate any assets acquired. Toyotaalsomakestermloanstodealersforbusinessacquisitions,facilitiesrefurbishment,realestate purchasesandworkingcapitalrequirements.Theseloansaretypicallysecuredwithliensonrealestate,other dealership assets and/or personalassets of the dealers. Toyotamanagesthewholesaleandotherdealerloanreceivablesportfolioasoneportfoliobasedontherisk characteristics associatedwith the underlying finance receivables. Allowanceforcreditlossesonfinancereceivables- Theallowanceforcreditlossesonfinancereceivablesismeasuredattheportfoliolevel,basedona systematic,ongoingreviewandevaluationperformedaspartofthecreditriskevaluationprocess,historicalloss F-16 TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) experience,thesize andcompositionofthe portfolios,currenteconomiceventsandconditions,the estimatedfair valueandadequacyofcollateral,forward-lookinginformationincludingmovementsoftheworldeconomyand otherpertinentfactors.Furthermore,portfoliosaregroupedbasedonsimilaritiesofriskcharacteristics,suchas product and collateral classes,when calculating expected creditlosses in the aggregate. (1) Retail receivables portfolio Withrespecttoretailreceivables,Toyotareviewswhetherthecreditriskonfinancereceivableshas increasedsignificantly.Toevaluatetherisk,Toyotausesthe changesforthepossibilityof acreditloss occurring ordaysinarrearsasanindex.Toyotaassessesthesignificantincreasesincreditriskwhencontractualpayments aremorethan30dayspastdue.Whenthecreditriskonfinancereceivableshasnotincreasedsignificantlysince initialrecognition,Toyotameasuresthelossallowanceforthatfinancereceivablesatanamountequalto 12-month expected credit lossesat the reporting date. Meanwhile,Toyotameasuresthelossallowanceforfinancereceivablesatanamountequaltothelifetime expectedcreditlossesifthecreditriskonthatfinancereceivableshasincreasedsignificantlysinceinitial recognitionatthereportingdate.Toyotacalculatesthelossallowanceforfinancereceivablesatanamountequal tothelifetimeexpectedcreditlossesbyconsideringhistoricalcreditlossexperienceandfuturecollectability, whenthereisevidencethatfinancereceivablesiscredit-impairedsuchasabreachofcontractduetodefaultor delayed contractual payments. In calculatingexpected creditlosses,Toyota usesthe probabilityof a defaultand the lossrate in theevent of a default based on past experienceand then reflects its forecastsof current and future economicconditions. Suspensionofpaymentoveracertainperiodoftimeandorsituationswhichcontractualobligationsarenot being met are considered as beingin default in accordance with internalmanagement rules. (2) Finance lease receivablesportfolio With respectto thefinance leasereceivablesportfolio,Toyota alwaysmeasuresloss allowanceat an amount equaltolifetimeexpectedcreditlosses.Suspensionofpaymentoveracertainperiodoftimeand/orsituations whichcontractualobligationsarenotbeingmetareconsideredasbeingindefaultinaccordancewithinternal management rules. (3) Wholesale and other dealerloan receivables portfolio With respectto thewholesale andother dealerloanreceivablesportfolio, receivablesare sortedprimarily by credit qualitiesbased on internalrisk assessments.Toyota reviewsthe change of thesegment as anindex whether thecreditriskonfinancereceivableshasincreasedsignificantlysinceinitialrecognitiontoassessthese receivablesforcreditrisk.Toyotaassessesthesignificantincreasesincreditriskwhencontractualpaymentsare morethan30dayspastdue.Ifthecreditriskonfinancereceivableshasnotincreasedsignificantlysinceinitial recognition,Toyotameasuresthelossallowanceforthatfinancereceivablesatanamountequalto12-month expected credit losses at thereporting date. Meanwhile,Toyotameasuresthelossallowanceforfinancereceivablesatanamountequaltothelifetime expectedcreditlossesifthecreditriskonthatfinancereceivableshasincreasedsignificantlysinceinitial recognitionatthereportingdate.Toyotacalculatesthelossallowanceforfinancereceivablesatanamountequal tothelifetimeexpectedcreditlossesbyconsideringhistoricalcreditlossexperienceandfuturecollectability, whenthereisevidencethatfinancereceivablesarecredit-impairedsuchasadebtor’sworsenedfinancial conditions, breach of contract dueto default or delayed contractualpayments. F-17 TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) In calculatingexpected creditlosses,Toyota usesthe probabilityof a defaultand the lossrate in theevent of a default based on past experienceand then reflects its forecastsof current and future economicconditions. Suspensionofpaymentoveracertainperiodoftimeand/orsituationswherecontractualobligationsarenot being met are considered as defaultsin accordance with internalmanagement rules. AlthoughToyotaconsiderstheallowanceforcreditlossesonfinancereceivablestobeadequatebasedon informationcurrentlyavailable,additionalprovisionsmaybenecessarydueto(i)changesinmanagement estimatesandassumptionsaboutassetimpairments,(ii)informationthatindicateschangesinexpectedfuture cashflows,or(iii)changesineconomicandothereventsandconditions.Futurechangesintheeconomythat impacttheconsumerconfidencesuchasincreasinginterestratesandariseintheunemploymentrateaswellas higherdebtbalances,coupledwithdeteriorationinactualandexpectedusedvehiclevalues,couldnegatively affect future operating resultsof the financial servicesoperations. Inventories- Inventoriesarevaluedatcost,notinexcessofnetrealizablevalue.Netrealizablevalueistheestimated sellingpriceintheordinarycourseofbusinesslesstheestimatedoriginalcostandestimatedsellingexpenseto productcompletion.Thecostofinventoriesincludespurchasecosts,conversioncostsandothercostsincurredin bringingtheinventoriestotheirpresentlocationandcondition.Thecostisdeterminedprincipallybyusingthe weighted-average method. Property,plantandequipment- Property,plantandequipmentismeasuredbasedonthecostmodelandcarriedatitscostlessaccumulated depreciationandimpairmentlosses.Expendituresrelatingtomajorrenewalsandimprovementsarecapitalized; minorreplacements,maintenanceandrepairsarechargedtocurrentoperationsasincurred.Depreciationof property, plantand equipment,exceptfor landthat isnot subjecttodepreciation, iscalculatedon thestraight-line method over the estimateduseful life of therespective assets accordingto general class, type of structureand use. Theestimatedusefullivesrangefrom2to65yearsforbuildingsandfrom2to20yearsformachineryand equipment. Thedepreciationmethod,usefullivesandresidualvaluesofproperty,plantandequipmentarereviewed annually at each fiscal yearend, and adopted prospectively, if applicable. Vehicles andequipment onoperating leasestothird partiesare originatedby dealersand acquiredby certain consolidatedsubsidiaries.Suchsubsidiariesarealsothelessorsofcertainpropertythattheyacquiredirectly. Vehiclesandequipmentonoperatingleasesaredepreciatedonastraight-linemethodovertheleaseterm, generallyfrom2to5years,totheestimatedresidualvalue.Incrementaldirectcostsincurredinconnectionwith the acquisition of lease contractsare capitalized andamortized on a straight-linemethod over the lease term. Toyotaisexposedtoriskoflossonthedispositionofoff-leasevehiclestotheextentthatsalesproceedsare notsufficienttocoverthecarryingvalueoftheleasedassetatleasetermination.Toyotaevaluatesattheendof eachreportingperiodtheestimatedresidualvaluetocoverprobableestimatedlossesrelatedtounguaranteed residualvaluesonitsownedportfolio.Theestimateiscalculatedconsideringprojectedvehiclereturnratesand projectedlossseverity.Factorsconsideredinthedeterminationofprojectedreturnratesandlossseverityinclude historicalandmarketinformationonusedvehiclesales,trendsinleasereturnsandnewcarmarkets,andgeneral economicconditions.Toyotaevaluatestheforegoingfactors,developsseveralpotentiallossscenarios,and evaluatestheestimatedresidualvaluetodeterminewhetheritisconsideredadequatetocovertheprobablerange of losses. F-18 TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) Byevaluatingestimatedresidualvalue,Toyotareflectsindepreciationtheamountitconsiderstobe appropriate in relation tothe estimated losses on itsowned portfolio. Intangibleassets- Intangibleassetsaremeasuredbasedonthecostmodelandcarriedattheircostlessaccumulated amortization and impairmentlosses. Theestimatedusefullivesandtheamortizationmethodofintangibleassetsarereviewedannuallyateach fiscal year end, and adopted prospectively,if appropriate. (1) Capitalized development cost Developmentexpenditureforaproductiscapitalizedonlywhenthereisatechnicalandcommercial feasibilityofcompletingthedevelopment,Toyotahastheintention,abilityandsufficientresourcestousethe outcome ofthedevelopment,it isprobablethatthe outcomewillgeneratea futureeconomicbenefit, andthe cost can be measured reliably. Capitalizeddevelopmentcostisamortizedusingthestraight-linemethodovertheexpectedproductlife cycle of the developed product rangingmainly from 5 to 10 years. (2) Other intangible assets Otherintangibleassetsmainlyconsistofsoftwareforinternaluseandamortizedusingthestraight-line methodovertheirestimatedusefullives,mainly5years.GoodwillisnotmaterialtoToyota’sconsolidated statement of financialposition. Impairmentofnon-financialassets- Attheendofthereportingperiod,thecarryingamountofnon-financialassetsotherthaninventoriesand deferred taxassets areassessedto determinewhetheror not thereisany indicationof impairment.Ifthere is such an indication,the recoverableamount ofsuchanassetoracash-generatingunitisestimated.An impairmentloss wouldberecognizedwhenthecarryingamountofanassetoracash-generatingunitexceedstheestimated discountedcashflowsexpectedtoresultfromtheuseoftheassetsanditseventualdisposition.Theamountof theimpairmentlosstoberecordediscalculatedbytheexcessofthecarryingamountoftheassetsoverits recoverable amount. Leases- At the inception of a contract, Toyotaassesses whether the contract is,or contains, a lease. (1) Lessee Toyotarecognizesarightofuseassetandaleaseliabilityattheleasecommencementdate.Thecostofthe right of use assetis measuredat the amountof the initialmeasurement of thelease liability by adjustingany lease paymentsmadeor beforethecommencementdate. Leaseliabilityisinitiallymeasuredatthe presentvalueofthe lease payments that are not paidas of the commencement date. F-19 TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) Afterthecommencementdate,Toyotaappliesacostmodelandsubsequentlydepreciatestherightofuse assetusingastraight-linemethodfromthecommencementdatetotheearlieroftheendoftheusefullifeofthe rightofuseassetortheendoftheleaseterm.Leaseliabilityismeasuredatamortizedcostusingtheeffective interestmethod.Intheconsolidatedstatementoffinancialposition,leaseliabilityisincludedinshort-termand long-termdebt.Interestontheleaseliabilityineachperiodduringtheleasetermistheamountthatproducesa constantperiodicrateofinterestontheremainingbalanceoftheleaseliabilityandrecognizedinprofitorloss over the lease term. ManyleasecontractsrelatingtolandandbuildingsenteredintobyToyotaincludeextensionoptionsthat canbeexercisablebyToyotaaslesseeforvariouspurposes,suchastoensurebusinessflexibility.Toyota assesseswhetheritisreasonablycertaintoexerciseanextensionoption,andifitassessesittobereasonably certain, the extension option isincluded in the lease term. Toyotarecognizestheleasepaymentsassociatedwithleasetermsof12monthsorlessasanexpenseona straight-line basis overthe lease term. (2) Lessor With respecttolessorleasetransactions,Toyota determinesatthe commencementofthe leasewhether each lease is a finance lease or operatinglease. Aleaseisclassifiedasafinanceleaseifittransferssubstantiallyalloftherisksandrewardsincidentalto the ownership of an underlying asset. Otherwiseleases are classifiedas operating leases. Toyota recognizes the operating leasepayments in profit or losson a straight-line basis overthe lease term. Employeebenefitobligations- Toyota has both defined benefit and definedcontribution plans for employees’retirement benefits. (1) Defined benefit plan Thepresentvalueofdefinedbenefitobligationsandservicecostareprincipallydeterminedforeachplan usingtheprojectedunitcreditmethod.Thenetdefinedbenefitliability(asset)isthepresentvalueofthedefined benefitobligationslessthefairvalueofplanassets.Currentservicecostandnetinterestonthenetdefined benefit liability (asset)are recognized as net income(loss) on the statementof net income. Past service cost is recognizedin profit or loss upon occurrence. Toyotarecognizesthedifferencearisingfromremeasurementofthenetdefinedbenefitliability(asset) includingactuarialgainsandlossesinothercomprehensiveincomewhenitisincurredandreclassifiesit immediately to retainedearnings. (2) Defined contribution plan Fordefinedcontributionplans,whentheemployeesrenderservices,thecontributionpayablesare recognized in profit or loss. F-20 TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) Liabilitiesforqualityassurance- Toyotagenerallywarrantsitsproductsagainstcertainmanufacturingandotherdefects.Provisionsfor product warrantiesare providedforspecific periodsof timeand/or usage ofthe product andvary depending upon thenatureoftheproduct,thegeographiclocationofthesaleandotherfactors.Theaccruedwarrantycosts representmanagement’sbestestimateatthetimeofsaleofthetotalcoststhatToyotawillincurtorepairor replaceproductpartsthatfailwhilestillunderwarranty.Theamountofaccruedestimatedwarrantycostsis primarilybasedonhistoricalexperienceofproductfailuresaswellascurrentinformationonrepaircosts.An estimateofwarrantyclaimaccruedforeachfiscalyeariscalculatedbasedontheestimateofwarrantyclaimper unit.Theestimateofwarrantyclaimperunitiscalculatedcomprehensivelybydividingtheactualamountsof warranty claim by the number of salesunits for the fiscalyear. Toyotaaccruesforcostsofrecallsandothersafetymeasures,aswellasproductwarrantycostdescribed above.Toyotagenerallymeasuressuch“liabilitiesforrecallsandothersafetymeasures”atthetimeofvehicle salescomprehensivelybyaggregatesalesofvariousmodelsinacertainperiodbygeographicalregions. However,whencircumstanceswarrant,Toyotameasures“liabilitiesforaparticularrecallorothersafety measure” using an individual modelwhen they are probable and reasonably estimable. Theportionof“liabilitiesforrecallsandothersafetymeasures”recordedintheconsolidatedstatementof financialpositioniscalculatedcomprehensivelybasedonthe“expectedliabilityforthecostofrecallsandother safetymeasures”inconsiderationofthe“accumulatedamountofrepaircostpaid”.Assuch,thisliabilityis evaluatedeveryperiodbasedonnewdataandareadjustedasappropriate.Toyotacalculatestheseliabilitiesfor unitssoldinthecurrentperiodandeachofthepast10 fiscalyears,andaggregatessuchliabilitiesindetermining the final liability amount. The“expectedliabilityforthecostofrecallsandothersafetymeasures”arecalculatedbymultiplyingthe “salesunit”bythe“expectedaveragerepaircostperunit”.The“expectedaveragerepaircostperunit”is calculatedbasedondividingthe“accumulatedamountofrepaircostpaidperunit”bythe“patternofpayment occurrences”.The“patternofpaymentoccurrence”representsaratiothatshowsthemeasureofpayment occurrence over 10 years based on actualpayments with regard to units soldwithin 10 years. Factors thatmay causea differencebetweenthe amountaccrued comprehensivelyatthe time ofvehicle sale andactualpaymentonindividualrecallsandothersafetymeasuresmainlyincludeactualcostofrecallsand safetymeasuresduringtheperiodbeingsignificantlydifferentfromtheaccumulatedamountofrepaircostpaid perunit(generallycomprisedofpartsandlabor)andtheactualpatternofpaymentoccurrenceduringtheperiod beingsignificantlydifferentfromthepatternofthepaymentoccurrenceinthepast.Suchdifferencesare considered as part of our estimationprocess for future recallsand other safety measures. Liabilitiesforproductwarrantiesandliabilitiesforrecallsandothersafetymeasureshavebeencombined into“Liabilitiesforqualityassurance”intheconsolidatedstatementoffinancialposition.Productwarrantycosts andcostsofrecallsandothersafetymeasuresareincludedincostofproductssoldintheconsolidatedstatement of income. Theforegoingevaluationsareinherentlyuncertain,astheyrequirematerialestimatesasdescribedabove. Consequently,actualwarrantycostsmaydifferfromtheestimatedamountsandcouldrequireadditional warrantyprovisions.IfthesefactorsrequireasignificantincreaseinToyota’saccruedestimatedwarrantycosts, it would negatively affect futureoperating results of theautomotive operations. F-21 TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) Revenuerecognition- Intheautomotiveoperations,performanceobligationsareconsideredtobesatisfiedwhencompleted vehiclesandpartsaredeliveredtotheagreedlocationswithdealers.Forpartsforproduction,itiswhentheyare loadedonashipordeliveredtomanufacturingcompanies.Wedonothaveanymaterialsignificantpayment terms as payment is receivedat or shortly after the pointof sale. Toyota’ssalesincentiveprogramsprincipallyconsistofcashpaymentstodealerscalculatedbasedontotal vehiclevolumeorvehicleunitsalesofcertainmodelssoldbyadealerduringacertainperiodoftime.Toyota accruestheseincentivesasrevenuereductionsuponthesaleofavehiclecorrespondingtotheprogrambythe amount determined in the relatedincentive program utilizingthe most likely outcomemethod. Thesaleofcertainvehiclesincludesacontractualright,whichentitlescustomerstofreevehicle maintenance.Weuseanobservablepricetodeterminethestand-alonesellingpriceforseparateperformance obligationsoracostplusmarginapproachwhenoneisnotavailable.Suchrevenuesfromfreemaintenance contractsaredeferredandrecognizedasrevenueovertheperiodofthecontractinproportiontothecosts expected to be incurred in satisfyingthe obligations under the contract. Revenues fromthesalesof vehiclesunderwhich Toyotaconditionallyguaranteestheminimum resalevalue arerecognizedonaproratabasisfromthedateofsaletothefirstexercisedateoftheguaranteeinaccordance withleaseaccounting.Theunderlyingvehiclesofthesetransactionsarerecordedasassetsandaredepreciatedin accordance with Toyota’s depreciationpolicy. Interestincomefromfinancialservicesisrecognizedusingtheeffectiveinterestmethod.Revenuesfrom operating leases are recognizedon a straight-line basis overthe lease term. Iftheperiodbetweensatisfactionoftheperformanceobligationandreceiptofconsiderationisexpectedto be within one yearor less, as a practicalexpedient, we do not adjust the promisedamount of considerationfor the effects of a significantfinancing component. Revenue is recognizednet of any taxes collectedfrom customers and subsequentlyremitted to governmental authorities. Incometaxes- Income tax expenses are presentedas the aggregate amount of currenttaxes and deferred taxes. Deferredtaxassetsanddeferredtaxliabilitiesarerecognizedforfuturetaxconsequencesattributableto temporarydifferencesbetweenthecarryingamountofassetsorliabilitiesintheconsolidatedstatementof financialpositionandthetaxbaseoftheassetsorliabilitiesandcarryforwardsofunusedtaxlossesandtax credits. Deferredtaxassetsarerecognizedforallfuturedeductibleamounts,totheextentthatitisprobablethatwe will have sufficient profitto utilize the benefit offuture deductible amounts. Deferredtaxliabilitiesfordeductibletemporarydifferencesarisingfrominvestmentsinsubsidiaries, associates,andinterestinjointventuresarerecognizedinprinciple.However,theyarenotrecognizedwhen Toyotaisabletocontrolthetimingofthereversalofthetemporarydifferenceanditisprobablethatthe temporary difference willnot reverse in the foreseeablefuture. F-22 TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) Deferredtaxassetsanddeferredtaxliabilitiesaremeasuredatthetaxratesthatareexpectedtoapplyinthe periodwhentheassetsarerealizedortheliabilitiesaresettled,basedonthetaxratesandtaxlawsenactedor substantivelyenactedattheendofthe reportingperiod.Themeasurementofdeferredtaxassetsanddeferredtax liabilitiesreflects thetax consequencesthat would followfrom the mannerin which Toyotaexpects, at theend of reporting period, to recover orsettle the carrying amount ofits assets and liabilities. EarningspershareattributabletoToyotaMotorCorporation- BasicearningspershareattributabletoToyotaMotorCorporationiscalculatedbydividingnetincome attributabletoToyotaMotorCorporationbytheweighted-averagenumberofcommonsharesoutstandingwith adjustment fortreasurystock duringthe reportingperiod.Diluted earningsper shareattributable toToyota Motor CorporationiscalculatedbydividingnetincomeattributabletoToyotaMotorCorporationbytheweighted- average number of common shares outstandingtaking into considerationthe effect of dilutivesecurities. Newaccountingstandardsandinterpretationsnotyetadopted- Noneofneworrevisedstandardsandinterpretationsthathavebeenissuedasofthedateofapprovalofthe consolidatedfinancialstatementsbuthavenotyetbeenadoptedbyToyotahaveasignificanteffectonthe consolidated financial statements. 4.Significantaccountingjudgmentsandestimates ThepreparationoftheconsolidatedfinancialstatementsinconformitywithIFRSrequiresmanagementto makejudgments,estimates,andassumptionsthataffecttheapplicationofaccountingpolicies,thereported amountsofassets,liabilities,revenuesandexpenses,andthedisclosureofcontingentassetsandliabilities. Actualresultscoulddifferfromtheseestimates.Theseestimatesandunderlyingassumptionsarereviewedona continuous basis.Changesin theseaccountingestimatesarerecognizedinthe periodinwhich the estimateswere revised and in any future periods affected. Informationaboutimportantestimationandjudgmentsthathavesignificanteffectsontheamounts recognized in the consolidated financialstatements isas follows: Scope of subsidiaries, associates,and joint ventures (Note 3 “Basis of consolidation”) Intangible assets incurredby research and development (Note 3 “Intangibleassets”) Informationaboutaccountingestimatesandassumptionthataffecttheapplicationofaccountingpolicies and the reported amounts of assetsand liabilities, and financialstatements based on IFRS is asfollows: Liabilities for qualityassurance (Note 3 “Liabilitiesfor quality assurance” and Note 24) Allowanceforcreditlossesonfinancereceivables(Note3“Allowanceforcreditlossesonfinance receivables” and Note 19 (2)) Impairment of non-financialassets (Note 3 “Impairmentof non-financial assets”and Note 12) Employee benefit obligations (Note3 “Employee benefit obligations”and Note 23) Fair value measurements (Note21) Recoverability of deferred taxassets (Note 3 “Income taxes” and Note15) F-23 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) 5.Segmentinformation (1)Outlineofreportingsegments The operatingsegmentsreported belowarethesegmentsofToyotafor whichseparatefinancialinformation isavailableandforwhichoperatingincome/lossamountsareevaluatedregularlybyexecutivemanagementin deciding how to allocate resources andin assessing performance. ThemajorportionsofToyota’soperationsonaworldwidebasisarederivedfromtheAutomotiveand Financialservicesbusinesssegments.TheAutomotivesegmentdesigns,manufacturesanddistributessedans, minivans,compactcars,SUVs,trucksandrelatedpartsandaccessories.TheFinancialservicessegmentconsists primarilyoffinancingandvehicleleasingoperationstoassistinthemerchandisingofToyota’sproductsaswell as other products. The All other segmentincludes telecommunicationsand other businesses. (2)Segmentinformation As of and for the year ended March 31, 2020 Yeninmillions Automotive Financial servicesAllother Inter-segment Elimination/ Unallocated AmountConsolidated Sales revenues Revenues from external customers ..... 26,770,3792,172,854923,314—29,866,547 Inter-segment revenues and transfers. . .29,36420,316581,606(631,286)— Total ........................ 26,799,7432,193,1701,504,920(631,286)29,866,547 Operating expenses ..................... 24,786,6091,909,4291,401,564(630,287)27,467,315 Operating income ...................... 2,013,134283,742103,356(999)2,399,232 Total assets ........................... 19,450,10225,390,5412,119,9517,011,76953,972,363 Investments accounted for usingthe equity method ............................. 3,810,31065,471283,355138,4284,297,564 Depreciation and amortization ............ 821,958739,48433,905—1,595,347 Capital expenditures .................... 1,437,9322,061,33468,36314,8183,582,448 F-24 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) As of and for the year ended March 31, 2021 Yeninmillions Automotive Financial servicesAllother Inter-segment Elimination/ Unallocated AmountConsolidated Sales revenues Revenues from external customers ..... 24,597,8462,137,195479,553—27,214,594 Inter-segment revenues and transfers. . .53,70625,042572,812(651,560)— Total ........................ 24,651,5522,162,2371,052,365(651,560)27,214,594 Operating expenses ..................... 23,044,3911,666,645967,015(661,205)25,016,845 Operating income ...................... 1,607,161495,59385,3509,6452,197,748 Total assets ........................... 21,412,03428,275,2392,720,7209,859,14762,267,140 Investments accounted for usingthe equity method ............................. 3,698,99071,336248,814141,6644,160,803 Depreciation and amortization ............ 893,704715,75734,829—1,644,290 Capital expenditures .................... 1,341,0322,151,45576,37040,8433,609,699 As of and for the year ended March 31, 2022 Yeninmillions Automotive Financial servicesAllother Inter-segment Elimination/ Unallocated AmountConsolidated Sales revenues Revenues from external customers ..... 28,531,9932,306,079541,436—31,379,507 Inter-segment revenues and transfers. . .73,74517,947588,441(680,133)— Total ........................ 28,605,7382,324,0261,129,876(680,133)31,379,507 Operating expenses ..................... 26,321,4481,667,0251,087,575(692,237)28,383,811 Operating income ...................... 2,284,290657,00142,30212,1042,995,697 Total assets ........................... 24,341,73731,681,4723,091,0118,574,55167,688,771 Investments accounted for usingthe equity method ............................. 4,354,08579,414258,750145,6464,837,895 Depreciation and amortization ............ 1,026,834761,80133,245—1,821,880 Capital expenditures .................... 1,422,4292,156,33951,200(18,381)3,611,587 AccountingpoliciesappliedbyeachsegmentisinconformitywiththoseofToyota’sconsolidatedfinancial statements.Transfersbetweenindustrysegmentsaremadeinaccordancewithtermsandconditionsinthe ordinary course of business. Unallocatedamountsincludedinassetsrepresentassetsheldforcorporatepurpose,which mainlyconsistof cashandcashequivalentsandfinancialassetsmeasuredatfairvaluethroughothercomprehensiveincome,and thebalancesasofMarch31,2020,2021and2022are¥8,584,459million,¥11,344,879millionand ¥10,020,460 million, respectively. F-25 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) (3)ConsolidatedFinancialStatementsonNon-FinancialServicesBusinessesandFinancialServices Business ThefinancialdatabelowpresentsseparatelyToyota’snon-financialservicesandfinancialservices businesses. (i)ConsolidatedStatementofFinancialPositiononNon-FinancialServicesBusinessesandFinancial Services Business Yeninmillions March31,2021March31,2022 Assets (Non-Financial Services Businesses) Current assets Cash and cash equivalents ................................ 3,274,1494,299,522 Trade accounts and other receivable ......................... 3,063,3143,184,782 Other financial assets .................................... 3,778,1192,028,649 Inventories ............................................ 2,888,0283,821,356 Other current assets ...................................... 664,097746,134 Total current assets ...................................... 13,667,70714,080,444 Non-current assets Property, plant and equipment ............................. 6,805,1667,302,017 Other ................................................. 14,721,62615,769,015 Total non-current assets .................................. 21,526,79223,071,032 Total assets ................................................ 35,194,49937,151,476 (Financial Services Business) Current assets Cash and cash equivalents ................................ 1,826,7071,814,133 Trade accounts and other receivable ......................... 216,767206,588 Receivables related to financialservices ..................... 6,756,1897,181,327 Other financial assets .................................... 1,021,7381,058,620 Other current assets ...................................... 198,068221,738 Total current assets ...................................... 10,019,46910,482,407 Non-current assets Receivables related to financialservices ..................... 12,449,52514,583,130 Property, plant and equipment ............................. 4,605,9885,024,625 Other ................................................. 1,200,2561,591,311 Total non-current assets .................................. 18,255,77021,199,065 Total assets ................................................ 28,275,23931,681,472 (Elimination) Elimination of assets ......................................... (1,202,599)(1,144,177) (Consolidated) Total assets ................................................ 62,267,14067,688,771 Note: Assets in non-financial servicesinclude unallocated corporateassets. F-26 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) Yeninmillions March31,2021March31,2022 Liabilities (Non-Financial Services Businesses) Current liabilities Trade accounts and other payables .......................... 3,801,7534,023,857 Short-term and current portionof long-term debt .............. 2,348,5141,041,557 Accrued expenses ....................................... 1,322,3531,421,194 Income taxes payable .................................... 262,727695,888 Other current liabilities ................................... 2,650,4332,778,172 Total current liabilities ................................... 10,385,7799,960,668 Non-current liabilities Long-term debt ......................................... 1,523,1341,538,884 Retirement benefit liabilities ............................... 1,015,1561,004,558 Other non-current liabilities ............................... 1,509,5351,830,146 Total non-current liabilities ............................... 4,047,8254,373,588 Total liabilities ............................................. 14,433,60514,334,256 (Financial Services Business) Current liabilities Trade accounts and other payables .......................... 510,670477,550 Short-term and current portionof long-term debt .............. 10,286,25110,576,910 Accrued expenses ....................................... 102,200124,088 Income taxes payable .................................... 88,153130,927 Other current liabilities ................................... 1,002,6151,414,606 Total current liabilities ................................... 11,989,88912,724,080 Non-current liabilities Long-term debt ......................................... 12,044,99413,882,650 Retirement benefit liabilities ............................... 19,94018,190 Other non-current liabilities ............................... 696,294722,257 Total non-current liabilities ............................... 12,761,22814,623,097 Total liabilities ............................................. 24,751,11727,347,177 (Elimination) Elimination of liabilities ...................................... (1,205,911)(1,147,482) (Consolidated) Total liabilities ............................................. 37,978,81140,533,951 Shareholders’ equity (Consolidated) Total Toyota Motor Corporationshareholders’ equity ...... 23,404,54726,245,969 (Consolidated) Non-controlling interests ............................. 883,782908,851 (Consolidated) Total shareholders’equity ............................ 24,288,32927,154,820 (Consolidated) Total liabilitiesand shareholders’ equity ................. 62,267,14067,688,771 F-27 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) (ii)ConsolidatedStatementofIncomeonNon-FinancialServicesBusinessesandFinancialServices Business Yeninmillions Fortheyearended March31,2020 Fortheyearended March31,2021 Fortheyearended March31,2022 (Non-Financial Services Businesses) Sales revenues .............................. 27,710,12825,103,19029,104,564 Cost of revenues ............................ 23,104,04721,199,91524,250,860 Selling, general and administrative .............. 2,492,0392,206,2052,518,182 Operating income ............................ 2,114,0421,697,0702,335,522 Other income (loss), net ....................... 394,278742,785998,001 Income before income taxes ................... 2,508,3192,439,8553,333,522 Income tax expense .......................... 615,546528,413944,594 Net income ................................. 1,892,7741,911,4422,388,928 Net income attributable to Toyota Motor Corporation ................. 1,818,0221,875,4672,369,399 Non-controlling interests .................. 74,75235,97519,529 (Financial Services Business) Sales revenues .............................. 2,193,1702,162,2372,324,026 Cost of revenues ............................ 1,397,3441,202,2771,178,509 Selling, general and administrative .............. 512,085464,368488,517 Operating income ............................ 283,742495,593657,001 Other income (loss), net .......................835 (3,090)16 Income before income taxes ................... 284,577492,503657,017 Income tax expense .......................... 66,284121,536171,327 Net income ................................. 218,293370,967485,690 Net income attributable to Toyota Motor Corporation ................. 218,060369,824480,716 Non-controlling interests ..................233 1,1434,974 (Elimination) Elimination of net income .....................59 (30)(4) (Consolidated) Net income ................................. 2,111,1252,282,3782,874,614 Net income attributable to Toyota Motor Corporation ................. 2,036,1402,245,2612,850,110 Non-controlling interests .................. 74,98537,11824,504 F-28 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) (iii)ConsolidatedStatementofCashFlowsonNon-FinancialServicesBusinessesandFinancialServices Business Yeninmillions Fortheyearended March31,2020 Fortheyearended March31,2021 Fortheyearended March31,2022 (Non-Financial Services Businesses) Cash flows from operating activities Net income ..................................... 1,892,7741,911,4422,388,928 Depreciation and amortization ...................... 855,863928,5331,060,079 Share of profit (loss) of investments accounted for using the equity method .............................. (298,494)(345,374)(552,515) Income tax expense ............................... 615,546528,413944,594 Changes in operating assets and liabilities, and other .... (154,164)(262,407)(572,082) Interest received ................................. 141,975123,606100,118 Dividends received ............................... 316,610290,618342,646 Interest paid .................................... (46,217)(35,371)(40,780) Income taxes paid, net of refunds .................... (700,528)(505,260)(544,887) Net cash provided by (used in) operating activities ...... 2,623,3642,634,2003,126,101 Cash flows from investing activities Additions to fixed assets excluding equipment leased to others ........................................ (1,222,821)(1,203,662)(1,186,900) Additions to equipment leased to others ............... (163,592)(142,217)(151,456) Proceeds from sales of fixed assets excluding equipment leased to others ................................ 46,76538,57536,219 Proceeds from sales of equipment leased to others ...... 49,89246,46145,183 Additions to intangible assets ....................... (299,253)(271,274)(335,436) Additions to public and corporate bonds and stocks ..... (2,220,217)(2,511,346)(1,904,588) Proceeds from sales of public and corporate bonds and stocks and upon maturity of public and corporate bonds ........................................ 2,249,3671,982,3021,989,345 Other, net ...................................... (95,852)(1,339,372)1,856,069 Net cash provided by (used in) investing activities ...... (1,655,711)(3,400,534)348,436 Cash flows from financing activities Increase (decrease) in short-term debt ................ 45,288213,716(164,899) Proceeds from long-term debt ...................... 247,0481,662,593513,371 Payments of long-term debt ........................ (163,486)(170,373)(1,818,653) Dividends paid to Toyota Motor Corporation common shareholders .................................. (618,801)(625,514)(709,872) Dividends paid to non-controlling interests ............ (50,903)(34,840)(49,629) Reissuance (repurchase) of treasury stock ............. (476,128)199,884(404,718) Net cash provided by (used in) financing activities ...... (1,016,982)1,245,465(2,634,401) Effect of exchange rate changes on cash and cash equivalents ....................................... (86,553)112,588185,237 Net increase (decrease) in cash and cash equivalents ......... (135,882)591,7191,025,373 Cash and cash equivalents at beginning of year ............. 2,818,3132,682,4313,274,149 Cash and cash equivalents at end of year .................. 2,682,4313,274,1494,299,522 F-29 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) Yeninmillions Fortheyearended March31,2020 Fortheyearended March31,2021 Fortheyearended March31,2022 (Financial Services Business) Cash flows from operating activities Net income ..................................... 218,293370,967485,690 Depreciation and amortization ...................... 739,484715,757761,801 Interest income and interest costs related to financial services, net ................................... (200,727)(241,016)(360,837) Share of profit (loss) of investments accounted for using the equity method .............................. (11,753)(5,655)(7,831) Income tax expense ............................... 66,284121,536171,327 Changes in operating assets and liabilities, and other .... (1,081,707)(780,798)(623,051) Interest received ................................. 664,167661,272742,364 Dividends received ............................... 1,7993,9014,740 Interest paid .................................... (467,774)(431,939)(384,006) Income taxes paid, net of refunds .................... (76,994)(304,856)(264,876) Net cash provided by (used in) operating activities ...... (148,928)109,168525,321 Cash flows from investing activities Additions to fixed assets excluding equipment leased to others ........................................ (23,472)(10,240)(10,366) Additions to equipment leased to others ............... (2,031,699)(2,133,378)(2,135,437) Proceeds from sales of fixed assets excluding equipment leased to others ................................ 1,1841,9671,530 Proceeds from sales of equipment leased to others ...... 1,341,3011,325,2381,496,949 Additions to intangible assets ....................... (5,739)(7,173)(10,650) Additions to public and corporate bonds and stocks ..... (185,120)(217,825)(523,323) Proceeds from sales of public and corporate bonds and stocks and upon maturity of public and corporate bonds ........................................ 126,28179,616213,291 Other, net ...................................... (22,213)(35,893)113,635 Net cash provided by (used in) investing activities ...... (799,477)(997,688)(854,370) Cash flows from financing activities Increase (decrease) in short-term debt ................ 514,196(1,517,259)(488,495) Proceeds from long-term debt ...................... 5,458,6168,043,1417,800,854 Payments of long-term debt ........................ (4,334,374)(5,332,573)(7,142,750) Dividends paid to non-controlling interests ............ (4,052)(1,757)(2,094) Net cash provided by (used in) financing activities ...... 1,634,3871,191,551167,516 Effect of exchange rate changes on cash and cash equivalents ....................................... (54,454)107,657148,958 Net increase (decrease) in cash and cash equivalents ......... 631,527410,688(12,575) Cash and cash equivalents at beginning of year ............. 784,4921,416,0201,826,707 Cash and cash equivalents at end of year .................. 1,416,0201,826,7071,814,133 (Consolidated) Effect of exchange rate changes on cash and cash equivalents ....................................... (141,007)220,245334,195 Net increase (decrease) in cash and cash equivalents ......... 495,6451,002,4061,012,798 Cash and cash equivalents at beginning of year ............. 3,602,8054,098,4505,100,857 Cash and cash equivalents at end of year .................. 4,098,4505,100,8576,113,655 F-30 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) (4)Geographicinformation As of and for the year ended March 31, 2020 Yeninmillions Japan North AmericaEuropeAsiaOther Inter-segment Elimination/ Unallocated AmountConsolidated Sales revenues Revenues from external customers ........ 9,503,23810,419,8693,133,2274,785,4892,024,724—29,866,547 Inter-segment revenues and transfers ......... 6,938,614222,165222,130507,74189,387(7,980,038)— Total ......... 16,441,85210,642,0343,355,3575,293,2312,114,111(7,980,038)29,866,547 Operating expenses ...... 14,856,57610,388,8303,211,5404,929,6842,030,110(7,949,425)27,467,315 Operating income ....... 1,585,276253,205143,817363,54784,001(30,613)2,399,232 Total assets ............ 18,221,45318,579,0784,264,0225,307,5132,881,5364,718,76153,972,363 Non-current assets ....... 4,697,3885,517,466570,563708,066428,707—11,922,190 As of and for the year ended March 31, 2021 Yeninmillions Japan North AmericaEuropeAsiaOther Inter-segment Elimination/ Unallocated AmountConsolidated Sales revenues Revenues from external customers ........ 8,587,1939,325,9502,968,2894,555,8971,777,266—27,214,594 Inter-segment revenues and transfers ......... 6,361,739165,853166,200489,39895,630(7,278,820)— Total ......... 14,948,9319,491,8033,134,4895,045,2951,872,895(7,278,820) 27,214,594 Operating expenses ...... 13,799,7159,090,4423,026,5184,609,3541,813,048(7,322,232)25,016,845 Operating income ....... 1,149,217401,361107,971435,94059,84743,4132,197,748 Total assets ............ 19,674,66620,138,7155,074,4096,548,3433,469,6357,361,37262,267,140 Non-current assets ....... 5,232,8625,705,770751,245896,542461,723—13,048,143 F-31 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) As of and for the year ended March 31, 2022 Yeninmillions Japan North AmericaEuropeAsiaOther Inter-segment Elimination/ Unallocated AmountConsolidated Sales revenues Revenues from external customers ....... 8,214,74010,897,9463,692,2145,778,1152,796,493—31,379,507 Inter-segment revenues and transfers ........ 7,776,696268,534175,633752,452131,690(9,105,004)— Total ......... 15,991,43611,166,4793,867,8476,530,5662,928,183(9,105,004) 31,379,507 Operating expenses ..... 14,567,99110,600,6953,704,8745,858,2162,690,014(9,037,980) 28,383,811 Operating income ...... 1,423,445565,784162,973672,350238,169(67,024)2,995,697 Total assets ........... 21,502,15523,353,8125,711,2717,461,8124,309,2485,350,47467,688,771 Non-current assets ...... 5,501,0466,251,499891,146977,235537,631—14,158,559 “Other” consists of Central and South America,Oceania, Africa and the Middle East. Non-currentassetsdonotincludefinancialinstruments,deferredtaxassets,netdefinedbenefitassetsand rights arising under insurancecontracts. TheaboveamountsareaggregatedbyregionbasedonthelocationofthecountrywhereTMCor consolidatedsubsidiariesare located.Transfersbetweengeographic areasaremade inaccordance withterms and conditions in the ordinary courseof business. Unallocatedamountsincludedinassetsrepresentassetsheldforcorporatepurpose,which mainlyconsistof cashandcashequivalentsandfinancialassetsmeasuredatfairvaluethroughothercomprehensiveincome,and thebalancesasMarch31,2020,2021and2022are¥8,584,459million,¥11,344,879millionand ¥10,020,460 million, respectively. (5)Salesrevenuesbylocationofexternalcustomers InadditiontothedisclosurerequirementsunderIFRS,Toyotadisclosesthisinformationinordertoprovide financial statements userswith valuable information . Yeninmillions FortheyearsendedMarch31, 202020212022 Japan .................................................. 7,229,8496,820,5906,425,184 North America ........................................... 10,546,6559,437,31410,953,472 Europe ................................................. 2,932,3242,734,1523,495,785 Asia ................................................... 5,217,8575,057,3976,017,646 Other .................................................. 3,939,8633,165,1414,487,420 Total .............................................. 29,866,54727,214,59431,379,507 “Other” consists of Central and South America,Oceania, Africa and the Middle East,etc. F-32 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) 6.Cashandcashequivalents Cash and cash equivalents consist of thefollowing: Yeninmillions March31, 20212022 Cash and deposits ...................................................... 3,346,4014,630,882 Negotiable certificate ofdeposit and other ................................... 1,754,4561,482,773 Total ............................................................ 5,100,8576,113,655 7.Tradeaccountsandotherreceivables Trade accounts and other receivablesconsist of the following: Yeninmillions March31, 20212022 Accounts and notes receivables ............................................ 2,301,9762,466,398 Other receivables ....................................................... 688,352716,558 Allowance for doubtful accounts .......................................... (31,586)(40,124) Total ............................................................ 2,958,7423,142,832 Tradeaccountsandotherreceivableswhichareunconditionalrightstoconsiderationsareclassifiedas financial assets measuredat amortized cost. The changes in the allowance for doubtfulaccounts consist of the following: Yeninmillions Fortheyearsended March31, 20212022 Allowance for doubtful accounts at beginningof year .......................... 90,26697,378 Provision for doubtful accounts, netof reversal ............................... 7,78010,649 Write-offs ............................................................ (3,112)(1,239) Other ................................................................ 2,4444,005 Allowance for doubtful accounts at end ofyear ............................... 97,378110,793 “Other” includes currency translationadjustments. Aportionoftheallowancefordoubtfulaccountsisattributedtocertainnon-currentreceivablebalances which are reported as other financialassets under non-currentassets. F-33 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) 8.Financereceivables Finance receivables consist ofthe following: Yeninmillions March31, 20212022 Retail ................................................................ 15,048,43317,647,440 Finance leases ......................................................... 2,031,2802,347,941 Wholesale and other dealer loans .......................................... 3,185,4842,904,216 Total ............................................................ 20,265,19722,899,597 Deferred origination costs ................................................ 270,406328,792 Less - Unearned income ................................................. (1,068,587)(1,172,007) Less - Allowance for credit losses Retail ............................................................ (198,204)(230,104) Finance leases ..................................................... (33,455)(36,985) Wholesale and other dealer loans ...................................... (29,642)(24,836) Total finance receivables, net ............................................. 19,205,71521,764,457 Current assets ......................................................... 6,756,1897,181,327 Non-current assets ...................................................... 12,449,52514,583,130 Total finance receivables, net ............................................. 19,205,71521,764,457 Financereceivablesweregeographicallydistributedasfollows:inNorthAmerica54.6%,inEurope13.2%, in Asia13.5%,inJapan8.3%andin Other10.4%asofMarch 31,2021,and inNorthAmerica 55.0%,inEurope 13.3%, in Asia 12.9%, in Japan 7.3% and in Other 11.5% as ofMarch 31, 2022. Finance receivables are classifiedas financial assetsmeasured at amortized cost. Thecontractualmaturityofretailreceivables,futureleasepaymentsforfinanceleasesreceivables, wholesale receivables and other dealerloans are as follows: Yeninmillions March31,2021 RetailFinanceleases Wholesaleandother dealerloans Within 1 year ......................................... 4,196,724540,7591,995,544 Between 1 and 2 years .................................. 3,482,932415,673348,787 Between 2 and 3 years .................................. 2,906,322303,166231,969 Between 3 and 4 years .................................. 2,235,116171,142137,331 Between 4 and 5 years .................................. 1,404,27369,241145,817 Later than 5 years ...................................... 823,06611,597326,037 Total ............................................ 15,048,4331,511,5773,185,484 F-34 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) Yeninmillions March31,2022 RetailFinanceleases Wholesaleandother dealerloans Within 1 year ......................................... 5,276,853639,4931,640,995 Between 1 and 2 years .................................. 3,988,650482,368319,847 Between 2 and 3 years .................................. 3,338,910367,680240,727 Between 3 and 4 years .................................. 2,546,568198,789161,717 Between 4 and 5 years .................................. 1,487,39768,092133,286 Later than 5 years ...................................... 1,009,06214,680407,643 Total ............................................ 17,647,4401,771,1022,904,216 Finance leases receivables consistof the following: Yeninmillions March31, 20212022 Lease payments .......................................................... 1,511,5771,771,102 Estimated unguaranteed residualvalues ....................................... 519,703576,839 Total .......................................................... 2,031,2802,347,941 Deferred origination costs .................................................. 13,70115,807 Less - Unearned income ................................................... (169,098)(190,954) Less - Allowance for credit losses ........................................... (33,455)(36,985) Finance leases receivables, net .......................................... 1,842,4292,135,809 F-35 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) 9.Otherfinancialassets Other financial assets consistof the following: Yeninmillions March31, 20212022 Financial assets measured atamortized cost Time deposits ..................................................... 2,566,221505,695 Other ............................................................ 554,997680,199 Financial assets measured atfair value through profit orloss Public and corporate bonds ........................................... 59,600159,186 Stocks ........................................................... 317,101149,890 Derivatives ....................................................... 282,364419,173 Other ............................................................ 489,824465,801 Financial assets measured atfair value through other comprehensiveincome Public and corporate bonds ........................................... 6,075,4986,302,719 Stocks ........................................................... 2,945,7803,332,209 Other ............................................................ 7,9869,644 Total ........................................................ 13,299,37112,024,515 Current assets ......................................................... 4,215,4572,507,248 Non-current assets ...................................................... 9,083,9149,517,267 Total ........................................................ 13,299,37112,024,515 Toyotahascertainfinancialinstruments,includingfinancialassetsandliabilitieswhicharoseinthenormal courseofbusiness.Thesefinancialinstrumentsareexecutedwithcreditworthyfinancialinstitutions,and virtuallyallforeigncurrencycontractsaredenominatedinU.S.dollars,eurosandothercurrenciesofmajor developedcountries.Financialinstrumentsinvolve,tovaryingdegrees,marketriskasinstrumentsaresubjectto pricefluctuations,andelementsofcreditriskintheeventa counterpartyshould default.Intheunlikelyeventthe counterpartiesfail tomeet thecontractualterms ofa foreigncurrencyor aninterest rateinstrument,Toyota’s risk islimitedtothefairvalueoftheinstrument.AlthoughToyotamaybeexposedtolossesintheeventof non-performancebycounterpartiesonfinancialinstruments,itdoesnotanticipatesignificantlossesduetothe natureofitscounterparties.CounterpartiestoToyota’sfinancialinstrumentsrepresent,ingeneral,international financialinstitutions.Additionally,Toyotadoesnothaveasignificantexposuretoanyindividualcounterparty. Toyota believes that the overallcredit risk related to itsfinancial instrumentsis not significant. Publicandcorporatebondsincludedinfinancialassetsmeasuredatfairvaluethroughothercomprehensive incomeincludesecuritiesloanedof¥1,757,903millionand¥2,198,396millionasofMarch31,2021and2022, respectively. F-36 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) Majorsecuritiesincludedinstocksmeasuredatfairvaluethroughothercomprehensiveincomeasof March 31, 2021 and 2022 are as follows: Yeninmillions March31, Issue20212022 KDDI CORPORATION ................................................. 1,075,5171,268,762 NIPPON TELEGRAPH AND TELEPHONECORPORATION .................. 229,564286,385 MS&AD Insurance Group Holdings, Inc. .................................... 173,171209,318 HO TAI MOTOR CO., LTD. ............................................. 126,049142,002 Mitsubishi UFJ Financial Group, Inc. ....................................... 105,256134,248 Tofacilitatetheefficientandeffectiveutilizationofassets,Toyotaderecognizesstocksmeasuredatfair valuethroughothercomprehensiveincomebywayofsale.Fairvalueandtotalaccumulatedother comprehensive income at derecognitionare as follows: Yeninmillions Fortheyearsended March31, 20212022 Total fair value ........................................................ 40,90366,906 Accumulated other comprehensive income,net ............................... 17,32327,861 10.Inventories Inventories consist of the following: Yeninmillions March31, 20212022 Products .............................................................. 1,749,4152,012,243 Work in process ........................................................ 350,308547,810 Raw materials ......................................................... 644,7791,107,558 Supplies and other ...................................................... 143,526153,745 Total ............................................................ 2,888,0283,821,356 11.Investmentsaccountedforusingtheequitymethod Equity in associates and joint venturesis as follows: Yeninmillions March31, 20212022 Associates ............................................................ 3,467,5033,926,267 Joint ventures .......................................................... 693,300911,628 Total ............................................................ 4,160,8034,837,895 F-37 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) Thecombinedinformationofinvestmentsaccountedforusingtheequitymethod(totalvalueofTMC’s interests) is as follows: Yeninmillions FortheyearsendedMarch31, 202020212022 Net income Associates ................................................ 195,569190,998324,480 Joint ventures .............................................. 114,678160,031235,866 Total ................................................ 310,247351,029560,346 Other comprehensive income, net oftax Associates ................................................ 42,90450,143241,264 Joint ventures .............................................. (15,589)38,50166,187 Total ................................................ 27,31588,644307,451 Comprehensive income Associates ................................................ 238,473241,141565,744 Joint ventures .............................................. 99,089198,532302,053 Total ................................................ 337,562439,673867,798 12.Property,plantandequipment The changes in cost and accumulated depreciationand impairment lossesare as follows: (Cost) Yeninmillions LandBuildings Machineryand equipment Vehiclesand equipmenton operatingleases Construction inprogressTotal Balance as of April 1, 2020 ...... 1,318,9644,741,45111,979,4495,928,833517,46024,486,156 Additions ................ 22,72090,363414,9342,281,434639,2053,448,655 Sales or disposal ........... (13,005)(36,586)(472,197)(2,163,259)(4,846)(2,689,893) Reclassification from construction in progress. . .6,890101,216485,705537(594,347)— Foreign currency translation adjustments ............. 13,44857,952262,808180,97620,493535,677 Other .................... (3,979)44,81183,252(24,799)97,910197,195 Balance as of March 31, 2021 .... 1,345,0374,999,20612,753,9516,203,721675,87525,977,791 Additions ................ 9,10688,543481,9162,293,189629,7863,502,541 Sales or disposal ........... (8,901)(57,743)(540,775)(2,334,129)(3,639)(2,945,187) Reclassification from construction in progress. . .2,310105,581630,896449(739,235)— Foreign currency translation adjustments ............. 15,008138,047642,984594,93330,7561,421,728 Other .................... (769)10,98513,39023,065(28,014)18,657 Balance as of March 31, 2022 .... 1,361,7915,284,62013,982,3626,781,229565,52827,975,530 F-38 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) (Accumulated depreciation and impairmentlosses) Yeninmillions LandBuildings Machineryand equipment Vehiclesand equipmenton operatingleases Construction inprogressTotal Balance as of April 1, 2020 ......(4, 058)(3,054,551)(9,505,895)(1,386,459)(1,178)(13,952,141) Depreciation ..............— (118,975)(673,612)(770,354)—(1,562,940) Impairment losses .........———— (70)(70) Sales or disposal ...........12 24,717443,307748,189—1,216,226 Foreign currency translation adjustments ............. (240)(34,630)(204,607)(39,880)(50)(279,408) Other .................... (211)(6,299)(64,468)81,5871,08511,695 Balance as of March 31, 2021 .... (4,497)(3,189,737)(10,005,275)(1,366,916)(213)(14,566,638) Depreciation ..............—( 121,431)(788,685)(817,171)—(1,727,287) Impairment losses .........— (2,527)(5,177)——(7,705) Sales or disposal ...........30 48,646507,396799,186—1,355,259 Foreign currency translation adjustments ............. (351)(79,026)(461,159)(115,693)(24)(656,252) Other ....................(1, 562)(31,522)(10,054)(3,073)(55)(46,266) Balance as of March 31, 2022 .... (6,379)(3,375,598)(10,762,953)(1,503,668)(292)(15,648,890) Depreciationon“Property,plantandequipment”isincludedin“Costofproductssold”and“Selling, general and administrative”in the consolidated statementof income. Vehicles and equipment on operating leasesconsist of the following: Yeninmillions March31, 20212022 Vehicles ................................................................ 6,190,5586,766,590 Equipment .............................................................. 13,16414,639 6,203,7216,781,229 Less - Accumulated depreciation ............................................ (1,366,916)(1,503,668) Vehicles and equipment on operating leases,net ............................ 4,836,8055,277,561 F-39 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) Futureexpensesfromvehiclesandequipmentonoperatingleasesaredueininstallmentsandrentalincome separated is as follows: Yeninmillions March31, 20212022 Within 1 year ........................................................ 857,997932,882 Between 1 and 2 years ................................................. 583,059641,683 Between 2 and 3 years ................................................. 282,477280,646 Between 3 and 4 years ................................................. 55,83875,915 Between 4 and 5 years ................................................. 18,87321,772 Later than 5 years .................................................... 5,7069,801 Total future rentals ............................................... 1,803,9501,962,699 The future rental income as shown above shouldnot be considered indicative offuture cash collections. 13.Rightofuseassetsandleaseliabilities The breakdown of right of use assets is asfollows: Yeninmillions March31, 20212022 Types of original assets Land ............................................................... 46,86867,927 Buildings ........................................................... 285,602305,533 Other .............................................................. 57,67474,952 Total .......................................................... 390,144448,412 TheincreaseintherightofuseassetsfortheyearsendedonMarch31,2021and2022were ¥114,394 million and ¥110,996 million, respectively. The breakdown of main gains and losses on lessee’sleases is as follows: Yeninmillions March31, 20212022 Depreciation of right of use assets Land ............................................................... 7,2778,660 Buildings ........................................................... 45,85256,262 Other .............................................................. 22,30726,293 Total .......................................................... 75,43691,214 Interest expense on lease liabilities ........................................... 4,1184,074 Short-term leases ......................................................... 84,82190,568 164,375185,856 F-40 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) FortheyearsendedMarch31,2021and2022,thetotalcashoutflowsforlesseeleaseswere ¥133,698 million and ¥149,521 million, respectively. Thefollowingisthematurityanalysisofthetotalfutureleasepaymentsandtheadjustmenttothepresent value: Yeninmillions March31, 20212022 Within 1 year .......................................................... 52,98361,735 Between 1 and 5 years ................................................... 130,917146,452 Later than 5 years ....................................................... 219,857258,474 Future lease payment, total ............................................ 403,757466,661 Less - Interest expense ............................................... (42,866)(45,733) Present value of lease payment, total ................................ 360,891420,928 Current liabilities ................................................... 47,12056,136 Non-current liabilities ................................................ 313,771364,792 Present value of lease payment, total ................................ 360,891420,928 14.Intangibleassets The carrying value of intangible assetsis as follows: Yeninmillions March31, 20212022 Capitalized development costs ............................................. 631,176663,762 Software and other ...................................................... 477,458528,204 Total ............................................................. 1,108,6341,191,966 F-41 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) The changes in cost, accumulated amortizationand impairmentlosses of intangible assetsare as follows: (Cost) Yeninmillions Capitalized developmentcostsSoftwareandotherTotal Balance as of April 1, 2020 ............................. 991,675600,7161,592,391 Additions .......................................— 62,42362,423 Internally developed ............................... 158,24659,061217,307 Sales or disposal .................................. (45,779)(57,047)(102,825) Foreign currency translation adjustments ..............— 6,3056,305 Other ...........................................— 56,41656,416 Balance as of March 31, 2021 ........................... 1,104,142727,8741,832,016 Additions .......................................— 41,61641,616 Internally developed ............................... 200,51286,342286,853 Sales or disposal .................................. (163,419)(60,981)(224,400) Foreign currency translation adjustments ..............— 25,33325,333 Other ...........................................— 7,0487,048 Balance as of March 31, 2022 ........................... 1,141,234827,2321,968,466 (Accumulated amortizationand impairment losses) Yeninmillions Capitalized developmentcostsSoftwareandotherTotal Balance as of April 1, 2020 ............................. (366,202)(225,932)(592,134) Amortization .................................... (152,542)(81,350)(233,892) Impairment losses .................................——— Sales or disposal .................................. 45,77955,354101,132 Foreign currency translation adjustments ..............— (2,818)(2,818) Other ...........................................— 4,3304,330 Balance as of March 31, 2021 ........................... (472,966)(250,417)(723,382) Amortization .................................... (167,926)(94,593)(262,518) Impairment losses .................................——— Sales or disposal .................................. 163,41960,375223,794 Foreign currency translation adjustments ..............— (13,570)(13,570) Other ...........................................— (823)(823) Balance as of March 31, 2022 ........................... (477,472)(299,028)(776,500) Amortizationofintangibleassetsisincludedin“Costofproductssold”and“Selling,generaland administrative”intheconsolidatedstatementofincome.Thereisnomaterialinternallygeneratedintangible assets except for capitalizeddevelopment costs. F-42 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) 15.Incometaxes (1)Deferredtaxassetsandliabilities Significant components of deferredtax assets and liabilitiesare as follows: Yeninmillions March31, 20212022 Deferred tax assets Defined benefit plan liabilities ......................................... 172,237141,186 Accrued expenses and liabilitiesfor quality assurance ...................... 623,247613,101 Other accrued employees’ compensation ................................. 127,339128,461 Operating loss carryforwards fortax purposes ............................. 14,26364,740 Allowance for doubtful accounts and creditlosses ......................... 82,46785,289 Property, plant and equipment and otherassets ............................ 224,933210,238 Other ............................................................. 400,000491,167 Total deferred tax assets .......................................... 1,644,4861,734,181 Deferred tax liabilities Changes in fair value of financialinstruments measured in othercomprehensive income ......................................................... (661,221)(725,242) Undistributed earnings of foreignsubsidiaries ............................. (18,539)(51,888) Undistributed earnings of associatesand joint ventures ...................... (902,680)(1,026,027) Basis difference of acquired assets ...................................... (48,371)(63,189) Capitalized development costs ......................................... (195,033)(204,741) Lease transactions ................................................... (533,167)(468,894) Other ............................................................. (196,470)(206,791) Total deferred tax liabilities ....................................... (2,555,481)(2,746,773) Net deferred tax assets and liabilities ................................ (910,996)(1,012,592) OfthechangesindeferredtaxassetsanddeferredtaxliabilitiesfortheyearsendedMarch31,2020,2021 and 2022, the amount recognized as incometax expense in the consolidated statementof income is as follows: Yeninmillions FortheyearsendedMarch31, 202020212022 Defined benefit plan liabilities .................................... 16,92712,4734,203 Accrued expenses and liabilitiesfor quality assurance ................. (18,676)(18,256)(40,761) Other accrued employees’ compensation ............................ 4,5573,125(968) Operating loss carryforwards fortax purposes ....................... (295,656)1,26538,119 Allowance for doubtful accounts and creditlosses .................... 19,2936,042(4,902) Property, plant and equipment and otherassets ....................... (76,680)4,468(9,795) Undistributed earnings of foreignsubsidiaries ....................... 1,2906,144(33,349) Undistributed earnings of associatesand joint ventures ................ (33,008)47,840(71,405) Basis difference of acquired assets ................................ (10,033)(18,302)(11,270) Capitalized development costs .................................... (4,434)(1,762)(9,708) Lease transactions ............................................. 286,869209,972103,098 Other ........................................................ (83,216)23,104111,603 Total .................................................... (192,767)276,11374,864 F-43 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) Thedeductibletemporarydifferences,unusedtaxlosses,andunusedtaxcreditsforwhichnodeferredtax asset is recognized in the statementof financial position: Yeninmillions March31, 20212022 Deductible temporary difference ........................................... 250,670709,204 Carryforwards of tax losses ............................................... 379,566518,385 Carryforwards of tax credit ............................................... 34,80046,306 Total ............................................................. 665,0371,273,894 Theexpectedexpirationdateofthecarryforwardsoftaxlossesforwhichdeferredtaxassetsarenot recognized are as follows: Yeninmillions March31, 20212022 Within 5 years .......................................................... 13,5974,049 Between 5 and 10 years .................................................. 20,475136,666 Later than 10 years ...................................................... 345,493377,670 Total ............................................................. 379,566518,385 Theexpectedexpirationdateofthecarryforwardsoftaxcreditforwhichdeferredtaxassetsarenot recognized are as follows: Yeninmillions March31, 20212022 Within 5 years .......................................................... 5,0978,654 Between 5 and 10 years .................................................. 2,3409,865 Later than 10 years ...................................................... 27,36327,787 Total ............................................................. 34,80046,306 Of the temporarydifferencesininvestments inforeignsubsidiaries,because managementintendsto reinvest undistributedearningsofforeignsubsidiariestotheextentnotexpectedtoberemittedintheforeseeablefuture, nodeferredtaxliabilityisrecognized.AsofMarch31,2021and2022,thetemporarydifferencestotaled ¥4,362,133 millionand ¥4,799,506million, respectively,andToyota estimatesan additional deferredtax liability of¥202,533millionand¥203,229millionwouldberequired,respectively,ifthefullamountofthose undistributed earnings were remitted. F-44 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) (2)Incometaxexpenses The income tax expense for the yearsended March 31, 2020, 2021 and 2022 consists of the following: Yeninmillions FortheyearsendedMarch31, 202020212022 Current income tax expense: TMC and domestic subsidiaries ......................... 484,667403,230672,077 Foreign subsidiaries ................................... 4,383522,859518,705 Total current .................................... 489,050926,0891,190,782 Deferred income tax expense (benefit): TMC and domestic subsidiaries ......................... 95,270(23,792)42,131 Foreign subsidiaries ................................... 97,498(252,321)(116,995) Total deferred ................................... 192,767(276,113)(74,864) Total income tax expense .......................... 681,817649,9761,115,918 Toyotaissubjecttoanumberofdifferentincometaxeswhich,intheaggregate,indicateastatutoryratein Japanofapproximately30.9%fortheyearsendedMarch31,2020,2021and2022.Thestatutorytaxratesin effectfortheyearinwhichthetemporarydifferencesareexpectedtoreverseareusedtocalculatethetaxeffects of temporarydifferenceswhichareexpectedto reversein futureyears.Reconciliationof thedifferencesbetween the statutory tax rate and theaverage effective tax rateis as follows: FortheyearsendedMarch31, 202020212022 Statutory tax rate ......................................... 30.9%30.9%30.9% Increase (reduction) in taxesresulting from: Non-deductible expenses ...............................0.40.50.6 Tax-exempt income ................................... (0.5)(0.4)(0.3) Deferred tax liabilitieson undistributed earnings of foreign subsidiaries .......................................0.90.61.3 Effects of investments accountedfor using the equity method ........................................... (3.4)(3.7)(4.3) Deferred tax liabilitieson undistributed earnings of associates and joint ventures ..................................2.1 (0.2)2.6 Change in unrecognized deferred tax assets ................0.90.73.7 Tax credits .......................................... (4.5)(3.2)(2.7) The difference between the statutorytax rate in Japan and that of foreign subsidiaries ............................... (2.4)(3.5)(3.1) Unrecognized tax benefits adjustments .................... (0.4)(0.2)(0.3) Other ..............................................0.30.6 (0.3) Average effective tax rate .................................. 24.4%22.2%28.0% F-45 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) 16.Tradeaccountsandotherpayables Trade accounts and other payables consistsof the following: Yeninmillions March31, 20212022 Accounts and notes payables ................................................ 2,953,7163,168,084 Other payables ........................................................... 1,092,2231,124,008 Total .............................................................. 4,045,9394,292,092 Trade accounts and other payables areclassified as financialliabilities measuredat amortized cost. F-46 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) 17.Financialliabilities (1)Financialliabilities Financial liabilitiesconsist of the following: Yeninmillions Non-cashchanges Asof April1,2020CashflowAcquisitionsReclassification Changes inforeign currency exchange rates Changes infairvalueOther Asof March31,2021 Current liabilities Short-term debt ............... 5,295,448(1,038,438)——220,056—(137,175)4,339,890 Current portion of long-term debt ....................... 4,568,140(5,371,616)—8,421,718——(33,905)7,584,337 Current portion of long-term lease liabilities ................... 43,166(44,760)—30,299991—17,42447,120 Class share ...................——— 240,712———240,712 Current liabilities .......... 9,906,755(6,454,814)—8,692,730221,047—(153,657)12,212,060 Non-current liabilities Long-term debt ................ 10,669,5999,914,667—(8,421,718)963,179—8,07613,133,804 Long-term lease liabilities ....... 265,879—114,394(30,299)4,266—(40,468)313,771 Class share ................... 498,740(258,451)—(240,712)——424— Non-current liabilities ...... 11,434,2199,656,216114,394(8,692,730)967,445—(31,968)13,447,575 Total .................... 21,340,9733,201,402114,394—1,188,491—(185,625)25,659,635 Derivatives ....................... 182,726(44,563)——55(135,007)—3,211 Yeninmillions Non-cashchanges Asof April1,2021CashflowAcquisitionsReclassification Changes inforeign currency exchange rates Changes infairvalueOther Asof March31,2022 Current liabilities Short-term debt ............... 4,339,890(579,216)——334,639—9,5444,104,858 Current portion of long-term debt ....................... 7,584,337(8,548,156)—7,410,991572,070—7,6047,026,845 Current portion of long-term lease liabilities ................... 47,120(54,879)—34,0712,192—27,63256,136 Class share ................... 240,712(240,630)————(83)— Current liabilities .......... 12,212,060(9,422,881)—7,445,062908,902—44,69711,187,839 Non-current liabilities Long-term debt ................ 13,133,8048,122,678—(7,410,991)1,095,463—2,77314,943,727 Long-term lease liabilities ....... 313,771—110,996(34,071)14,203—(40,107)364,792 Class share ...................———————— Non-current liabilities ...... 13,447,5758,122,678110,996(7,445,062)1,109,666—(37,334)15,308,519 Total .................... 25,659,635(1,300,203)110,996—2,018,568—7,36326,496,358 Derivatives ....................... 3,211(12,026)——68915,348—7,221 Short-term and long-term debtis classified as financialliabilities measuredat amortized cost. F-47 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) (2)Short-termdebt The breakdown of “Short-term debt” is asfollows: Yeninmillions March31, 20212022 Short-term debt (Principally from bank) [Weighted average interestrate 20211.37% 20221.64%] ................................................... 1,109,904852,301 Commercial paper [Weighted average interestrate 20210.16% 20220.38%] ................................................... 3,229,9863,252,556 4,339,8904,104,858 (3)Long-termdebt The breakdown of “Long-term debt” is as follows: Yeninmillions March31, 20212022 Unsecured loans (Principally from bank) 2021 Weighted average interest 1.40% Due 2021 to 2042 2022 Weighted average interest 1.83% Due 2022 to 2042] .............................................. 5,582,4264,990,165 Secured loans (Principally financial receivablessecuritization) 2021 Weighted average interest 1.25% Due 2021 to 2034 2022 Weighted average interest 1.02% Due 2022 to 2034] .............................................. 3,233,3533,902,766 Medium-term notes of consolidatedsubsidiaries 2021 Weighted average interest 1.56% Due 2021 to 2048 2022 Weighted average interest 1.45% Due 2022 to 2048] .............................................. 9,209,45310,257,689 F-48 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) Yeninmillions March31, 20212022 Unsecured bonds of the parent 2021 Weighted average interest 1.40% Due 2021 to 2037 2022 Weighted average interest 1.32% Due 2022 to 2037] .............................................. 1,161,9381,123,145 Unsecured bonds of consolidated subsidiaries 2021 Weighted average interest 1.57% Due 2021 to 2028 2022 Weighted average interest 1.99% Due 2022 to 2028] .............................................. 1,495,9761,664,634 Secured bonds of consolidated subsidiaries 2021 Weighted average interest 6.34% Due 2022 to 2024 2022 Weighted average interest 5.81% Due 2022 to 2024] .............................................. 34,99632,174 20,718,14221,970,573 Less - Current portion due within one year ................................... (7,584,337)(7,026,845) 13,133,80414,943,727 AsofMarch31,2021and2022,thecurrenciesoflong-termdebtare49%and52%inUSdollars,16%and 11%inJapaneseyen,12%and13%inEuros,6%and6%inAustraliandollars, 3%and 4%in Canadiandollars, 14% and 14% in other currencies. (4)Assetspledgesascollateral The breakdown of assets pledged as collateralmainly for loans of consolidatedsubsidiaries is asfollows: Yeninmillions March31, 20212022 Property, plant and equipment ............................................ 754,1321,474,647 Other assets ........................................................... 3,278,4483,582,826 Total ............................................................ 4,032,5805,057,473 Other assets principally consistof securitized financereceivables. Standardagreementswithcertainbanksincludeprovisionsthatcollateral(includingsumsondepositwith such banks)orguaranteeswill befurnishedupon thebanks’requestand thatanycollateralfurnished,pursuantto such agreements or otherwise, willbe applicable to all presentor future indebtedness to such banks. F-49 TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) (5)Interestexpenses TheinterestexpensesforthefiscalyearendedMarch31,2021and2022are¥471,505millionand ¥410,197 million,respectively.Interestexpensesrelatedtothefinancialbusinessisincludedin“cost offinancial services” in the consolidatedstatement of income. (6)Classshares TMCissuedFirstSeriesModelAAClassShares(the“ModelAAClassShares”)onJuly24,2015. Presented below is additional informationregarding the Model AA Class Shares: Total number of shares issued:47,100,000 shares Issue price:10,598 yen per share Purchase price:10,121.09 yen per share Voting rights:ModelAAClassSharesshallhavevotingrights.Thenumberofshares constituting one unit with respectto Model AA Class Shares shall be 100. Restrictions on transfer:Model AA Class Shares shallhave restrictions on transfer. Dividends:(1)IftherecorddatefallsinthefiscalyearendingonMarch31,2016: 0.5% of the issue price (2)IftherecorddatefallsinthefiscalyearendingonMarch31,2017 throughMarch31,2020:theannualdividendratefortheprevious fiscal year plus 0.5% of the issueprice (3)IftherecorddatefallsinthefiscalyearendingonMarch31,2021or later : 2.5% of the issue price Shareholder’s right:(1)Shareholder’sconversion right into Common Shares ShareholdersoftheModelAAClassSharesmaydemandTMCto acquireallorapartoftheirModelAAClassSharesinexchangefor CommonSharesonthefirstbusinessdayofAprilandOctoberof every year, starting October 1, 2020. (2)Shareholder’scash put option ShareholdersoftheModelAAClassSharesmaydemandTMCto acquireallorapartoftheirModelAAClassSharesinexchangefor cashonthelastbusinessdayofMarch,June,Septemberand December of each year, startingon September 1, 2020. TMC’s right:TMCmayacquire,onorafterApril2,2021,alloftheoutstandingModel AAClassSharesinexchangeforcash.AttheDirectors’Meetingheldon December14,2020,TMChasresolvedtoexerciseitscashcalloptionto acquirealloutstandingModelAAClassSharesand,subjecttosuch acquisition,tocancelallModelAAClassSharespursuanttoArticle178 oftheCompaniesActofJapan.TheacquisitiontookplaceonApril2, 2021, and the cancellation was completedon April 3, 2021. F-50 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) 18.Otherfinancialliabilities Other financial liabilitiesconsist of the following: Yeninmillions March31, 20212022 Financial liabilitiesmeasured at amortized cost Deposits received .................................................... 440,275723,363 Other .............................................................. 221,052287,072 Financial liabilitiesmeasured at fair value throughprofit or loss Derivatives ......................................................... 425,980497,198 Total .......................................................... 1,087,3071,507,633 Current liabilities ......................................................... 763,8751,046,050 Non-current liabilities ..................................................... 323,432461,583 Total .......................................................... 1,087,3071,507,633 19.Financialrisks (1)Financialriskmanagementpolicy Toyotaisexposedtovariousriskssuchascreditrisk,liquidityrisk,marketrisk(foreigncurrencyrisk, interestraterisk,commoditypricefluctuationriskandstockpricefluctuationrisk).Tohedgethemarketrisk, Toyotaalsousesderivativefinancialinstrumentssuchasforwardexchangecontracts,interestrateswaps, commodityforwardstransactions.Withrespecttotheexecutionandmanagementofderivativetransactions,it followsthecompanyregulationsthatsetouttransactionauthority,anditisapolicynottoconductspeculative transactions using derivativefinancial instruments. Inaddition,Toyotaprocuresnecessaryfunds(mainlybankborrowingsandissuingcorporatebonds)based onthecapitalexpenditureplans,andtemporarysurplusfundsaremanagedwithhighlysafefinancialassetsand short-termworkingcapitalisprocuredthroughbankborrowingsandcommercialpaper.Asforliquidityrisk concerning fund procurement, each companymanages it by preparing a monthlycash flow plan, etc. (2)Creditrisk Receivablesrelatedtofinancialservicesareexposedtothecreditrisk.Theriskisarisenfromthefailureof customersordealerstomeetthetermsoftheircontractswithToyotaorotherwisefailtoperformasagreed. Toyotamanagesitscreditriskbydefiningriskmanagementmethodsandmanagementsystemsforspecificrisks inaccordancewiththeregulationsonriskmanagement.Basedonsuchregulations,Toyotamitigatesthecredit riskthroughperiodicalmonitoringofthecustomer’screditstatusandundertakingthematuritycontroland accountbalancecontrol,whiledetectingpromptlyanydoubtfulaccountscausedbydeteriorationinthefinancial conditions. PleaseseeNote3“Allowanceforcreditlossesonfinancereceivables”aboutmeasuringmethodofthe expected credit losses on receivablesrelated to financialservices. Thecarryingamountafterimpairmentofthefinancialassetspresentedintheconsolidatedfinancial statements,aswellasguaranteeobligationsandloancommitmentsthataresetforthinthenotestothe F-51 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) consolidatedfinancialstatements,arethemaximumexposuretothecreditriskofToyota’sfinancialassets thatdo not takeintoaccount thevalueof theacquiredcollateral.Theallowance forcreditexposures ofloan commitments and financial agreements is measured in the same waythat the allowance for retail receivables is measured. Retailreceivablesandfinancialleasereceivablesarebeingsecuredbyvehiclesascollateral.Wholesale receivablesandotherdealerloansaresecuredbyplacingappropriatepropertyascollateral.Also,duringthe reporting period, there is no changein the policy regarding collateral. The net changes in the allowance for creditlosses relating to theretail receivables areas follows: Yeninmillions FortheyearendedMarch31,2021 Expectedcredit lossfor 12months Lifetimeexpectedcreditloss Total Financial receivablenot credit-impaired Credit-impaired financial receivable Allowance for credit loss at beginningof year .... 60,07866,81332,879159,770 Provision for credit loss, netof reversal ......... 28,37834,99246,232109,602 Charge-offs ................................—— (50,485)(50,485) Other ..................................... (9,053)(23,380)11,750(20,683) Allowance for credit loss at end ofyear ......... 79,40278,42640,376198,204 Yeninmillions FortheyearendedMarch31,2022 Expectedcredit lossfor 12months Lifetimeexpectedcreditloss Total Financial receivablenot credit-impaired Credit-impaired financial receivable Allowance for credit loss at beginningof year .... 79,40278,42640,376198,204 Provision for credit loss, netof reversal ......... 22,68539,42038,687100,792 Charge-offs ................................——( 41,331)(41,331) Other .....................................( 13,961)(18,381)4,781(27,561) Allowance for credit loss at end ofyear ......... 88,12599,46542,514230,104 “Other” primarily includes reversalof allowance for creditloss due to the collectionof retail receivables. Thetablebelowshowstheretailreceivablessegregatedintoagingcategoriesbasedonthenumbersofthe days outstanding: Yeninmillions March31,2021 Expectedcredit lossfor 12months Lifetimeexpectedcreditloss Total Financial receivablenot credit-impaired Credit-impaired financial receivable Current ................................... 13,638,143824,508—14,462,651 Past due less than 90 days .................... 213,860273,28217,527504,670 Past due 90 days or more .....................— 1,38179,73181,112 Total ................................. 13,852,0041,099,17197,25815,048,433 F-52 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) Yeninmillions March31,2022 Expectedcredit lossfor 12months Lifetimeexpectedcreditloss Total Financial receivablenot credit-impaired Credit-impaired financial receivable Current ................................... 15,753,2111,083,642—16,836,854 Past due less than 90 days .................... 283,753405,94117,655707,350 Past due 90 days or more .....................—779 102,457103,236 Total ................................. 16,036,9651,490,363120,11217,647,440 The net changes in the allowance for creditlosses relating to thefinance lease receivablesare as follows: Yeninmillions FortheyearsendedMarch31, 20212022 Allowance for credit loss at beginningof year .............................. 30,89933,455 Provision for credit loss, netof reversal ................................... 8,66311,107 Charge-offs ......................................................... (3,310)(3,712) Other .............................................................. (2,798)(3,865) Allowance for credit loss at end ofyear ................................... 33,45536,985 “Other”primarilyincludesreversalofallowanceforcreditlossduetothecollectionoffinancelease receivables. Thetablebelowshowsthefinanceleasereceivablessegregatedintoagingcategoriesbasedonthenumbers of the days outstanding: Yeninmillions March31, 20212022 Current ............................................................. 1,945,1982,279,978 Past due less than 90 days .............................................. 50,99247,034 Past due 90 days or more ............................................... 35,08920,928 Total .......................................................... 2,031,2802,347,941 F-53 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) Thetablebelowshowsthenetmovementoftheallowanceforcreditlossesonwholesalereceivablesand other dealer loans. Yeninmillions FortheyearendedMarch31,2021 Expectedcredit lossfor 12months Lifetimeexpectedcreditloss Total Financial receivablenot credit-impaired Credit-impaired financial receivable Allowance for credit loss at beginningof year .... 27,55613,6343,98945,179 Provision for credit loss, netof reversal ......... 2,2931,9751,5935,861 Charge-offs ................................—— (209)(209) Other ..................................... (12,382)(8,368)(437)(21,188) Allowance for credit loss at end ofyear ......... 17,4677,2414,93529,642 Yeninmillions FortheyearendedMarch31,2022 Expectedcredit lossfor 12months Expectedcreditlossfortheentire period Total Financial receivablenot credit-impaired Credit-impaired financial receivable Allowance for credit loss at beginningof year .... 17,4677,2414,93529,642 Provision for credit loss, netof reversal ......... 5,1981,5661,1777,941 Charge-offs ................................—— (11)(11) Other .....................................( 8,317)(3,715)(705)(12,736) Allowance for credit loss at end ofyear ......... 14,3495,0925,39624,836 “Other”primarilyincludesreversalofallowanceforcreditlossduetothecollectionofwholesale receivables and other dealerloans. Toyotachargesoffthecredit-impairedfinancereceivableswhenToyotaconsidersthatallorpartofitwill notbecollected.Theamountofreceivablesrelatedtofinancialserviceswhichhasbeenchargedoffbutsubject to ongoing collection activitywas not significant for the yearsended March 31, 2021 and 2022. Thebalancesofthewholesalereceivablesandotherdealerloanreceivablesportfoliosbycreditstatus,as well as loan commitments and financialguarantee contracts,as of March 31, 2021 and 2022 are as follows. Thewholesaleandotherdealerloanreceivablesportfoliosegmentissegregatedintofollowing creditqualities below based on internalrisk assessments by dealers. Performing: Account not classifiedas either Credit Watch, At Risk or DefaultCredit Watch:Account designated for elevatedattention AtRisk:Accountwherethereisanincreasedlikelihoodthatdefaultmayexistbasedonqualitativeand quantitative factors F-54 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) Default:Accountisnotcurrentlymeetingcontractualobligations,orwehavetemporarilywaivedcertain contractual requirements Yeninmillions March31,2021 Expectedcredit lossfor 12months Lifetimeexpectedcreditloss Financial receivablenot credit-impaired Credit-impaired financial receivableTotal Wholesale and other dealer loan Performing ............................ 2,956,452——2,956,452 Credit Watch .......................... 82,04678,509—160,554 At Risk ...............................— 48,3542,38850,742 Default ...............................—— 17,73617,736 Loan commitments .......................... 9,917,15596,26641210,013,832 Financial guarantee contracts .................. 3,574,94331,465—3,606,408 Total ............................. 16,530,596254,59420,53516,805,725 Yeninmillions March31,2022 Expectedcredit lossfor 12months Lifetimeexpectedcreditloss Financial receivablenot credit-impaired Credit-impaired financial receivableTotal Wholesale and other dealer loan Performing ............................ 2,730,860——2,730,860 Credit Watch .......................... 20,84297,353—118,196 At Risk ...............................— 32,29969932,998 Default ...............................—— 22,16222,162 Loan commitments .......................... 10,050,81769,3939010,120,300 Financial guarantee contracts .................. 3,574,25739,205—3,613,461 Total ............................. 16,376,776238,25122,95216,637,978 FortheyearendedMarch31,2021and2022,theamountoffinancereceivablesthetermsofwhich weremodifiedduetodeteriorationincreditconditionswasnotsignificantforanyportfoliooffinance receivables,andtheamountofpaymentdefaultsonfinancereceivablessomodifiedwerenotsignificantforany portfolio of such receivables. (3)Liquidityrisk Tosecurecashonhandnecessaryforcarryingouttheoperation,Toyotaappropriatelyborrowsfromthe financialinstitutionsandissuescorporatebondsorcommercialpaper,andthereisariskoffailingtoexecutethe payment on due date because of deteriorationof fund procurement environmentetc.,. Toyotamanagesliquidityriskbymonitoringthefunddemandofeachgroupcompanyasappropriate, preparingamonthly-basedfundingplan,andcomparingitwiththedailycashflow.Inadditiontoholding sufficientcashandcashequivalentsinordertosecuretheliquidityandstabilityoffunds,topreparefor emergencysituationssuchasthesuddenfunddemandandmarketliquiditydeterioration,acommitmentlinehas been set up. F-55 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) The amounts of non-derivativefinancialliabilities and derivativefinancial liabilitiesby a remaining contract maturity period are as follows: As of March 31, 2021 Yeninmillions Maturities Bookvalue Contractual cashflowsWithin1year Between1and 3years Between3and 5years Laterthan 5years Non-derivative financial liabilities Short-term debt ............... 1,109,904(1,119,748)(1,119,748)——— Commercial paper ............. 3,229,986(3,233,528)(3,233,528)——— Current portion of long-term debt ...................... 7,584,337(7,781,816)(7,781,816)——— Long-term debt ............... 13,133,804(13,615,831)—(8,135,588)(3,871,044)(1,609,200) Lease liabilities ............... 360,891(403,757)(52,983)(78,623)(52,294)(219,857) Class share ................... 240,712(243,650)(243,650)——— Total ............... 25,659,635(26,398,330)(12,431,725)(8,214,211)(3,923,338)(1,829,057) Derivative financial liabilities Interest derivative ............. 288,853(291,818)(75,477)(147,811)(45,699)(22,832) Currency derivative In......................— 453,701228,651151,43049,70123,919 Out..................... 137,127(593,702)(353,986)(163,366)(51,643)(24,707) Total ............... 425,980(431,820)(200,812)(159,747)(47,640)(23,620) Total ........... 26,085,615(26,830,150)(12,632,537)(8,373,958)(3,970,978)(1,852,677) As of March 31, 2022 Yeninmillions Maturities Bookvalue Contractual cashflowsWithin1year Between1and 3years Between3and 5years Laterthan 5years Non-derivative financial liabilities Short-term debt ............... 852,301(865,873)(865,873)——— Commercial paper ............. 3,252,556(3,260,578)(3,260,578)——— Current portion of long-term debt ...................... 7,026,845(7,238,356)(7,238,356)——— Long-term debt ............... 14,943,727(15,458,478)—(9,194,302)(4,501,420)(1,762,756) Lease liabilities ............... 420,928(466,661)(61,735)(85,791)(60,661)(258,474) Class share ...................—————— Total ............... 26,496,358(27,289,948)(11,426,543)(9,280,094)(4,562,081)(2,021,230) Derivative financial liabilities Interest derivative ............. 325,912(346,482)(56,824)(112,352)(110,592)(66,715) Currency derivative In......................— 958,208358,27583,552379,916136,465 Out..................... 171,286(1,164,801)(475,869)(94,949)(420,302)(173,682) Total ............... 497,198(553,075)(174,417)(123,748)(150,978)(103,932) Total ........... 26,993,557(27,843,023)(11,600,961)(9,403,841)(4,713,059)(2,125,162) F-56 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) Toyotahasunusedshort-termlinesofcreditamountingto¥1,836,532millionand¥2,534,291millionof which¥550,408millionand ¥1,056,931millionrelatedtocommercialpaperprogramsasofMarch31,2021and 2022,respectively.Undertheseprograms,Toyotaisauthorizedtoobtainshort-termfinancingatprevailing interest rates for periodsnot in excess of 360 days. AsofMarch31,2021and2022,Toyotahasunusedlong-termlinesofcreditamountingto ¥6,446,277 million and ¥9,030,322 million, respectively. (4)Foreignexchangerisk Toyotaissubjecttotheforeigncurrencyexposurethroughtransactionsinforeigncurrenciesrelatedto purchase,saleandfinanceassociatedwithconductingbusinessworldwide.Toyotaisexposedtofluctuations risksrelatedtofutureprofitabilityorassetsandliabilitiesregardingoperatingcashflowdenominatedinforeign currenciesandvariousfinancialinstruments.Themostsignificantforeigncurrencyexposureisprimarilycaused by the U.S. dollar and the euro. Toyota usesderivativefinancialinstrumentsincludingforeignexchange forwardcontracts,foreigncurrency options,interestratecurrencyswapagreements,andothers,tomanagetheexposuretoforeigncurrency exchange rate fluctuations. ToyotausesValue-at-riskanalysismeasurement(“VaR”)toassesstheriskofexchangeratefluctuation. Potentialimpactofpre-taxcashflowsonVaR-integratedforeigncurrencypositions(includingderivatives)for the years ended March 31, 2021 and 2022 is as follows: Yeninmillions VaR Year-endAverageMaximumMinimum For the year ended March 31, 2021 ............................ 196,900187,725196,900178,400 For the year ended March 31, 2022 ............................ 257,600241,825263,600214,800 The Monte Carlosimulationmethod isused forToyota’s VaR measurement,and measurementis basedon a 95% confidence interval and a ten-dayholding period. (5)Interestraterisk Inprecedingwithbusinessactivities,Toyotaisexposedtointerestrateriskduetofluctuationinmarket interestratesasitprocuresandinvestsfunds necessaryforworkingcapitaland capitalinvestment.Tomaintaina desirablelevelofexposurerelatedtointerestratefluctuationriskandminimizeinterestexpense,Toyota conducts various financial instrumentstransactions. SensitivityanalysisofToyota’sinterestrateriskassociatedwithholdingfinancialinstrumentsiftheinterest rate increases by 1% is as follows.In this analysis, all othervariables are assumed to beconstant. Yeninmillions FortheyearsendedMarch31, 20212022 Impact on income before incometaxes .................................... (40,536)(64,533) Impact on other comprehensive income,before tax effect ..................... (238,986)(243,630) F-57 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) (6)Marketpricefluctuationrisk Toyotaisexposedtorisksarisingfromincreasedcostsduetocommoditypricefluctuations,suchasiron andsteel,preciousmetalsandnon-ferrousalloysusedinthemanufactureofautomobiles.Toyotacontrolsthe price risk associated with thepurchase of those commoditiesby maintaining inventory at theminimum level. Toyotaisexposedtostockpricefluctuationriskbecauseitownssharesofcompaniesthathavebusiness relationshipsmainlyforpromotingsmoothbusinessactivities.Toyotaperiodicallyreviewsthefairvaluesand financialsituationsofthebusinesspartnercompaniesand,takingintoconsiderationtherelationshipwiththem, continuallyreviewstheholdingstatus.Theimpactonothercomprehensiveincome,beforetaxeffectwhenthe declaredpriceofequityfinancialassets(shares)inactivemarketschangesby10%fortheyearendedMarch31, 2021, and 2022 is ¥262,396 million and ¥316,281 million, respectively. 20.Derivativefinancialinstruments (1)Undesignatedderivativefinancialinstruments Toyotausesforeignexchangeforwardcontracts,foreigncurrencyoptions,interestrateswaps,interestrate currencyswapagreements,andinterestrateoptions,tomanageitsexposuretoforeigncurrencyexchangerate fluctuationsandinterestratefluctuationsfromaneconomicperspective,andToyotaisunabletoorhaselected not to apply hedge accounting. Toyota does not use derivativesfor speculationor trading. (2)Fairvalueandgainandlossesofderivatives The fair values of the derivativesas of March 31, 2021 and 2022 are as follows: Yeninmillions March31, 20212022 Derivativeassets Derivative financial instrumentsnot designated as hedging instruments: Interest rate and currency swap Current assets - Other financial assets .................................. 37,85269,625 Non-current assets - Other financial assets .................................. 236,023333,683 Total ............................................ 273,876403,309 Foreign exchange forward and option contracts Current assets - Other financial assets .................................. 8,48815,865 Non-current assets - Other financial assets ..................................—— Total ............................................ 8,48815,865 Totalderivativeassets .................................................. 282,364419,173 F-58 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) Yeninmillions March31, 20212022 Derivativefinancialliabilities Derivative financial instrumentsnot designated as hedging instruments: Interest rate and currency swap Current liabilities - Other financial liabilities ............................... (89,681)(87,926) Non-current liabilities - Other financial liabilities ............................... (226,434)(326,177) Total ............................................ (316,115)(414,102) Foreign exchange forward and option contracts Current liabilities - Other financial liabilities ............................... (109,865)(83,096) Non-current liabilities - Other financial liabilities ...............................—— Total ............................................ (109,865)(83,096) Totalderivativeliabilities ............................................... (425,980)(497,198) The amount of underlying notional of derivativesas of March 31, 2021 and 2022 are asfollows: Yeninmillions March31, 20212022 Derivative financial instrumentsnot designated as hedging instruments: Interest rate and currency swap ........................................ 21,453,26821,510,803 Foreign exchange forward and option contracts ........................... 4,884,4002,976,488 Total ........................................................ 26,337,66824,487,291 Undesignatedderivativefinancialinstrumentsareusedtomanageeconomicrisksoffluctuationsinforeign currency exchangerates andinterestrates of certainreceivablesand payables. Thoseeconomic risks areoffset by changes in the fair value of undesignatedderivative financialinstruments. Thegain(loss)onderivativetransactionsasofMarch31,2020,2021and2022were¥13,419million, ¥588millionand¥773million,respectively.Theamountsareincludedincostoffinancialservicesandforeign exchange gain (loss), net. Cashflowsfromtransactionsofderivativefinancialinstrumentsareincludedincashflowsfromoperating activities in the consolidatedstatement of cash flows. (3)Creditriskrelatedcontingentfeatures Toyota entersintoInternationalSwaps andDerivativesAssociationMasterAgreementswithcounterparties. These MasterAgreementscontain aprovisionrequiringeitherToyota orthecounterpartytosettlethecontract or to post assets to the other partyin the event of a ratings downgrade below aspecified threshold. F-59 TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) Theaggregatefairvalueamountofderivativefinancialinstrumentsthatcontaincreditriskrelated contingentfeaturesthatareinanetliabilitypositionafterbeingoffsetbycashcollateralasofMarch31,2021 and 2022is ¥35,148millionand¥36,190 million,respectively.Theaggregatefair valueamount ofassetsthat are alreadypostedascashcollateralasofMarch31,2021and2022is¥75,394millionand¥99,718million, respectively.IftheratingsofToyotadeclinebelowspecifiedthresholds,themaximumamountofassetstobe posted orforwhichToyotacouldberequiredtosettlethecontractsis¥36,190millionasofMarch31, 2022.See Note 22 for details. 21.Fairvaluemeasurements (1)Definitionoffairvaluehierarchy InaccordancewithIFRS,Toyotaclassifiesfairvaluemeasurementintothefollowingthreelevelsbasedon the observability and significanceof the inputs used. Level1:Quotedprices in active marketsfor identical assets or liabilities Level2:FairvaluemeasurementbasedoninputsotherthanquotedpricesincludedwithinLevel1that are observable for the assetsor liabilities, eitherdirectly or indirectly Level3:Fairvalue measurement based on modelsusing unobservable inputs for theassets or liabilities (2)Methodoffairvaluemeasurement Thefairvalueofassetsandliabilitiesisdeterminedusingrelevantmarketinformationandappropriate valuation methods. The methods and assumptions for measuringthe fair value of assetsand liabilities are as follows: (i) Cash and cash equivalents - Cashequivalentsincludemoneymarketfundsandotherinvestmentswithoriginalmaturitiesofthree months orless. Inthe normalcourse ofbusiness,substantially allcashand cashequivalents andtime depositsare highly liquid and are carried atamounts which approximate fairvalue due to their short duration. (ii) Trade accounts and other receivablesand Trade accounts and otherpayables - Thesereceivablesandpayablesarecarriedatamountswhichapproximatefairvalueduetotheirshort duration. (iii) Receivables relatedto financial services - Thefairvalueofreceivablesrelatedtofinancialservicesisestimatedbydiscountingexpectedcashflowsto presentvalueusinginternalassumptions,includingprepaymentspeeds,expectedcreditlossesandcollateral value. Asunobservableinputsareutilized,thefairvalueofreceivablesrelatedtofinancialservicesisclassifiedas Level 3. (iv) Other financial assets- (Public and corporate bonds) F-60 TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) Publicandcorporatebondsincludegovernmentbonds.Japanesebondsandforeignbonds,includingU.S., Europeanandotherbonds,represent28%and72%(asofMarch31,2021)and26%and74%(asofMarch31, 2022) of public andcorporate bonds, respectively.Toyota primarilyuses quoted marketprices for identicalassets to measure the fair value ofthese securities. (Stocks) ListedstocksontheJapanesestockmarketsrepresent89%(asofMarch31,2021)and85%(asof March31,2022)ofstocksthatToyotaholds.Toyotaprimarilyusesquotedmarketpricesforidenticalassetsto measure fair value of thesesecurities. Therefore, stockswith an active market are classifiedas Level 1. Fairvalueofstockswithnoactivemarketismeasuredbyusingthemarketapproachorotherappropriate methods. Therefore, stocks with no activemarket are thus classifiedas Level 3. Pricebook-valueratios(“PBR”)ofcomparablecompanies,discountratiosofdiscountedcashflow valuationmethodandothersarethesignificantunobservableinputsrelatingtothefairvaluemeasurementof stocksclassifiedasLevel3.Thefairvalueincreases(decreases)asPBRofacomparablecompanyrises (declines)orthediscountratedeclines(rises).Theestimatedincreaseordecreaseinfairvalueofstocksifthe unobservable inputs were to be replacedby other reasonable alternativeassumptions are not significant. These estimatesare based onvaluation methodsthat are consideredappropriate ineach case. Thesignificant assumptionsinvolvedintheestimationsincludethefinancialconditionandfutureprospectsandtrendsofthe investeesandtheoutcomeofthereferencedtransactions.Duetotheuncertainnatureoftheseassumptionsorby using different assumptionsand estimates, the fair valuemay be impacted materially. ThesharesclassifiedasLevel3aremeasuredbytheresponsibledepartmentusingquarterlyavailable informationinaccordancewithToyota’sconsolidatedfinancialaccountingpoliciesandreportedtothe supervisors along with the basis ofthe change in fair value. (v) Derivative financial instruments- Toyotaemploysderivativefinancialinstruments,includingforeignexchangeforwardcontracts,foreign currencyoptions,interestrateswaps,interestratecurrencyswapagreementsandinterestrateoptionstomanage itsexposuretofluctuationsininterestratesandforeigncurrencyexchangerates.Toyotaprimarilyestimatesthe fairvalueofderivativefinancialinstrumentsusingindustry-standardvaluationmodelsthatrequireobservable inputsincludinginterestratesandforeignexchangerates,andthecontractualterms.Theusageofthesemodels doesnotrequiresignificantjudgmenttobeapplied.Thesederivativefinancialinstrumentsareclassifiedas Level2.Inothercertaincaseswhenmarketdataarenotavailable,keyinputstothefairvaluemeasurement includequotesfromcounterparties,andothermarketdata.Toyotaassessesthereasonablenessofchangesofthe quotesusingobservablemarketdata.ThesederivativefinancialinstrumentsareclassifiedasLevel3.Toyota’s derivativefairvaluemeasurementsconsiderassumptionsaboutcounterpartyandToyota’sownnon-performance risk, using such as credit defaultprobabilities. (vi) Short-term and long-termdebt - Thefairvaluesofshort-termandlong-termdebtincludingthecurrentportion,exceptforsecuredloans providedbysecuritizationtransactionsusingspecial-purposeentities(“LoansBasedonSecuritization”),are estimatedbasedonthediscountedamountsoffuturecashflowsusingToyota’scurrentborrowingratesfor similar liabilities.As these inputs are observable, thefair value of these debts isclassified as Level 2. F-61 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) ThefairvaluesoftheLoansBasedonSecuritizationisprimarilyestimatedbasedoncurrentmarketrates andcreditspreadsfordebtwithsimilarmaturities.Internalassumptionsincludingprepaymentspeedsand expectedcreditlossesareusedtoestimatethetimingofcashflowstobepaidontheunderlyingsecuritized assets.Incasethesevaluationsutilizeunobservableinputs,thefairvalueoftheLoansBasedonSecuritizationis classified as Level 3. (3)Financialinstrumentmeasuredatfairvalueonrecurringbasis Thefollowingtablesummarizesthefairvaluesoftheassetsandliabilitiesmeasuredatfairvalueona recurringbasis.Transfersbetweenlevelsofthefairvaluearerecognizedatthedateoftheeventorchangein circumstances that caused thetransfer: Yeninmillions March31,2021 Level1Level2Level3Total Other financial assets: Financial assets measured at fair value through profit or loss Public and corporate bonds ................................ 22,92628,2698,40659,600 Stocks ................................................—— 317,101317,101 Derivative financial instruments ............................— 282,364—282,364 Other ................................................. 366,570123,255—489,824 Total ............................................. 389,495433,887325,5061,148,889 Financial assets measured at fair value through other comprehensive income Public and corporate bonds ................................ 3,075,0422,981,23919,2186,075,498 Stocks ................................................ 2,623,964—321,8162,945,780 Other ................................................. 7,986——7,986 Total ............................................. 5,706,9912,981,239341,0349,029,264 Other financial liabilities: Financial liabilities measured at fair value through profit or loss Derivative financial instruments ............................— (425,980)—(425,980) Total .............................................— (425,980)—(425,980) F-62 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) Yeninmillions March31,2022 Level1Level2Level3Total Other financial assets: Financial assets measured at fair value through profit or loss Public and corporate bonds ................................ 61,37696,1361,674159,186 Stocks ................................................—— 149,890149,890 Derivative financial instruments ............................— 419,173—419,173 Other ................................................. 307,446158,355—465,801 Total ............................................. 368,822673,665151,5631,194,051 Financial assets measured at fair value through other comprehensive income Public and corporate bonds ................................ 3,542,9492,739,59120,1786,302,719 Stocks ................................................ 3,162,805—169,4043,332,209 Other ................................................. 9,505139—9,644 Total ............................................. 6,715,2592,739,730189,5839,644,571 Other financial liabilities: Financial liabilities measured at fair value through profit or loss Derivative financial instruments ............................— (497,198)—(497,198) Total .............................................— (497,198)—(497,198) (4)ChangesinfinancialinstrumentsclassifiedasLevel3andmeasuredatfairvalueonrecurring basis ThefollowingtablesummarizesthechangesinLevel3assetsandliabilitiesmeasuredatfairvalueona recurring basis for the yearsended March 31, 2021 and 2022: Yeninmillions FortheyearendedMarch31,2021 Publicandcorporate bondsStocks Derivativefinancial instrumentsTotal Balance at beginning of year .................. 32,931370,452—403,383 Total gains (losses) Net income (loss) ......................980 162,055—163,035 Other comprehensive income (loss) ........— 72,014—72,014 Purchases and issuances .....................316 58,578—58,894 Sales and settlements ....................... (5,223)(497)—(5,720) Transfer from Level 3 ....................... (2,760)——(2,760) Others ................................... 1,380(23,686)—(22,306) Balance at end of year ....................... 27,623638,917—666,540 Unrealized gains or losses includedin profit or loss on assets held at March 31 ..............983 162,055—163,038 Total ............................983 162,055—163,038 F-63 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) Yeninmillions FortheyearendedMarch31,2022 Publicandcorporate bondsStocks Derivativefinancial instrumentsTotal Balance at beginning of year .................. 27,623638,917—666,540 Total gains (losses) Net income (loss) ...................... (44)113,053—113,009 Other comprehensive income (loss) ........— 9,219—9,219 Purchases and issuances .....................968 2,362—3,330 Sales and settlements ....................... (4,020)(18,208)—(22,228) Transfer from Level 3 ....................... (7,067)(512,465)—(519,532) Others ................................... 4,39286,415—90,807 Balance at end of year ....................... 21,852319,294—341,146 Unrealized gains or losses includedin profit or loss on assets held at March 31 .............. (250)113,053—112,803 Total ................................ (250)113,053—112,803 Netincome(loss)inpublicandcorporatebonds,stocksandderivativefinancialinstruments,otherthan transactionsrelatedtofinancialservices,areeachincludedin“Otherfinanceincome”and“Otherfinancecosts” intheaccompanyingconsolidatedstatementofincome.Transactionsrelatedtofinancialservicesareincludedin eachof“Salesrevenues—Financialservices”and“Costoffinancialservices”intheconsolidatedstatementof income. Inthereconciliationtableabove,derivativefinancialinstrumentsarepresentedasnetofassetsand liabilities.“Other”includesforeigncurrencytranslationadjustmentsfortheyearendedMarch31,2021and 2022. TransferfromLevel3ofstocksrecognizedintheyearendedMarch31,2022isduetothelistingof investees. (5)Financialassetsandliabilitiesmeasuredatamortizedcost Thefollowingtablesummarizesthecarryingamountandthefairvalueoffinancialassetsandliabilities measured on an amortized cost basis: Yeninmillions March31,2021 Fairvalue CarryingamountLevel1Level2Level3Total Receivables related to financialservices ..... 19,205,715——19,939,81019,939,810 Interest-bearing liabilities Long-term debt (Including current portion) ........................ 20,718,142—17,749,0223,244,91220,993,934 F-64 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) Yeninmillions March31,2022 Fairvalue CarryingamountLevel1Level2Level3Total Receivables related to financialservices ..... 21,764,457——22,074,59322,074,593 Interest-bearing liabilities Long-term debt (Including current portion) ........................ 21,970,573—17,899,0873,824,53121,723,618 Offinancialassetsandliabilitiesthataremeasuredonanamortizedcostbasis,thosewithcarryingvalues that approximate fair valueare excluded from the tableabove. 22.OffsettingFinancialAssetsandLiabilities The followingtable summarizestheamounts offinancial assetsand financialliabilitiesthat are subjectto an enforceablemasternettingagreementorsimilaragreementbutnotsetoffbecausetheydonotmeetsomeorall oftheoffsettingcriteriaforfinancialassetsandfinancialliabilities.Withrespecttofinancialinstrumentsthat maybeoffsetinthefuturebasedonset-offrightsassociatedwithmasternettingagreementsorsimilar agreements,aswellastheassociatedcollateral,theset-offwillbeenforceableonlywhencertaincircumstances, such as when the counterparty cannot performon its obligations due to bankruptcyor other reasons, arise. Yeninmillions March31,2021 Grossamountsof recognized financialassets andfinancial liabilities Amountsnotoffset Netamount Financial instruments Collateralof financial instruments Other financial assets Derivatives ................... 282,364(163,054)(62,795)56,515 Other financial liabilitiesDerivatives ................ 425,980(163,054)(89,849)173,078 Yeninmillions March31,2022 Grossamountsof recognized financialassets andfinancial liabilities Amountsnotoffset Netamount Financial instruments Collateralof financial instruments Other financial assets Derivatives ................... 419,173(182,288)(105,201)131,685 Other financial liabilitiesDerivatives ................ 497,198(182,288)(111,283)203,627 Theamountsoffset,aspresentedintheconsolidatedstatementoffinancialposition,inaccordancewiththe criteria for offsettingfinancial assets and financialliabilitieswere immaterial. 23.Employeebenefits (1)Overviewofpost-employmentbenefitPlans Uponterminationsofemployment,employeesofTMCandsubsidiariesinJapanareentitled,underthe retirementplansofeachcompany,tolump-sumindemnitiesorpensionpayments,basedoncurrentratesofpay andlengthsofserviceorthenumberof“points”mainlydeterminedbythose.Undernormalcircumstances,the minimumpaymentpriortoretirementageisanamountbasedonvoluntaryretirement.Employeesreceive additional benefits on involuntaryretirement, includingretirement at the age limit. F-65 TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) EffectiveOctober 1,2004, TMCamendeditsretirementplan tointroducea“point” basedretirementbenefit plan.Underthenewplan,employeesareentitledtolump-sumorpensionpaymentsdeterminedbasedon accumulated “points” vested ineach year of service. There are threetypes of “points”that vest in each year of serviceconsisting of “service periodpoints” which are attributedtothelengthof service,“jobtitlepoints”which areattributedtothe jobtitleofeach employee,and “performance points”which areattributedto theannual performanceevaluationof each employee.Under normal circumstances,theminimumpaymentpriortoretirementageisanamountreflectinganadjustmentrateapplied torepresentvoluntaryretirement.Employeesreceiveadditionalbenefitsuponinvoluntaryretirement,including retirement at the age limit. EffectiveOctober1,2005,TMCpartlyamendeditsretirementplanandintroducedthequasicash-balance planunderwhichbenefitsaredeterminedbasedonthevariable-interestcreditingrateratherthanthefixed- interest crediting rateas was in the pre-amended plan. TMCandmostsubsidiariesinJapanhavecontributoryfundeddefinedbenefitpensionplans,whichare pursuanttotheCorporateDefinedBenefitPensionPlanLaw(CDBPPL).Thecontributionstotheplansare fundedwithseveralfinancialinstitutionsinaccordancewiththeapplicablelawsandregulations.Thesepension plan assets consist principallyof common stocks, government bonds andinsurance contracts. Most foreign subsidiarieshave pensionplans or severanceindemnity planscovering substantiallyall oftheir employeesunderwhichthecostofbenefitsarecurrentlyinvestedoraccrued.Thebenefitsfortheseplansare based primarily on lengths of serviceand current rates of pay. Thesepost-employmentbenefitplansareexposedtogeneralinvestmentrisk,interestrateriskandinflation risk. Pensioncostsanddefinedbenefitobligationsaredependentonassumptionsusedincalculatingsuch amounts.These assumptionsinclude discountrates,retirementrate,salaryincreaserate,mortalityratesand other factors.Whilemanagementbelievesthattheassumptionsusedareappropriate,differencesinactualexperience or changes in assumptions may affectToyota’s pension costs and obligations. Themostcriticalassumptionimpactingthecalculationofpensioncostsanddefinedbenefitobligationsis thediscountrates.Toyotadeterminesthediscountratesmainlybasedontheratesofhighqualityfixedincome bondscurrentlyavailableandexpectedtobeavailableduringtheperiodtomaturityofthedefinedbenefit pension plans. Toyota uses a March 31 measurement datefor its post-employmentbenefit plans. F-66 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) (2)Definedbenefitobligationsandplanassets The changes in present value of definedbenefit obligations and fairvalue of plan assets are as follows: Yeninmillions FortheyearsendedMarch31, 20212022 JapaneseplansForeignplansJapaneseplansForeignplans Present value of defined benefitobligations: Benefit obligations at beginning ofyear ........ 2,058,8931,207,8152,089,2631,419,910 Current service cost ....................... 91,07952,33489,12852,826 Interest cost .............................. 10,97049,91412,48752,062 Remeasurements: Changes in demographic assumptions ..... (7,569)28,6906,440379 Changes in financial assumptions ......... 13,88814,490(46,113)(126,125) Other ............................... (5,835)51,2964,162904 Past service cost .......................... 1,0353,159761274 Plan participants’ contributions .............. 1,3972,0931,3923,063 Benefits paid ............................. (72,441)(48,478)(80,368)(42,615) Acquisition and other ...................... (2,155)58,597—126,966 Benefit obligations at end of year ............. 2,089,2631,419,9102,077,1511,487,644 Fair value of plan assets: Plan assets at beginning of year .............. 1,519,254868,9031,806,2651,079,543 Interest income ........................... 8,90748,72911,26151,614 Remeasurement Actual return on plan assets, excluding interest income ..................... 286,089120,23234,543(6,657) Employer contributions .................... 37,46931,22733,16324,912 Plan participants’ contributions .............. 1,3972,0931,3923,063 Benefits paid ............................. (39,471)(36,217)(41,804)(31,823) Acquisition and other ...................... (7,380)44,576—104,004 Plan assets at end of year ................... 1,806,2651,079,5431,844,8191,224,656 Effect of the asset ceiling .......................———— Net defined benefit liability(asset) ............... 282,999340,368232,332262,988 The funded defined benefit obligationsand the unfunded defined benefit obligationsare as follows: Yeninmillions March31, 20212022 Japanese plans Foreign plans Japanese plans Foreign plans Funded defined benefit obligations .................... 1,575,6471,127,9741,559,6861,187,595 Plan assets ....................................... (1,806,265)(1,079,543)(1,844,819)(1,224,656) Subtotal ......................................... (230,618)48,432(285,133)(37,061) Unfunded defined benefit obligations .................. 513,616291,936517,465300,049 Total ........................................ 282,999340,368232,332262,988 F-67 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) Thenetdefinedbenefitliability(asset)recognizedintheconsolidatedstatementoffinancialpositionare comprised of the following: Yeninmillions March31, 20212022 Japanese plans Foreign plans Japanese plans Foreign plans Retirement benefit liabilities ......................... 680,021355,075674,425348,323 Other non-current assets (Retirementbenefit assets) ...... (397,023)(14,707)(442,094)(85,335) Net amount recognized ......................... 282,999340,368232,332262,988 (3)Themajoritemsofactuarialassumption Theweighted-averagediscountratesusedtodeterminethepresentvalueofdefinedbenefitobligationsare as follows: March31, 20212022 Japanese plans Foreign plans Japanese plans Foreign plans Discount rate .................................... 0.6%3.3%0.7%3.5% (4)Fairvalueofplanassets Toyota’spolicyandobjectiveforplanassetmanagementistomaximizereturnsonplanassetstomeet futurebenefitpaymentrequirementsunderriskswhichToyotaconsiderspermissible.Assetallocationsunder the planassetmanagementaredeterminedbasedonplanassetmanagementpoliciesofeachplanwhichare establishedto achievetheoptimizedasset compositionsin termsofthe long-termoverallplan assetmanagement. Whenactualallocationsarenotinlinewithtargetallocations,Toyotarebalancesitsinvestmentsinaccordance withthepolicies.Priortomakingindividualinvestments,Toyotaperformsin-depthassessmentsof correspondingfactorsincludingcategoryofproducts,industrytype,currenciesandliquidityofeachpotential investmentunderconsiderationtomitigateconcentrationsofriskssuchasmarketriskandforeigncurrency exchangeraterisk.Toassessperformanceoftheinvestments,Toyotaestablishesbenchmarkreturnratesfor eachindividualinvestment,combinestheseindividualbenchmarkratesbasedontheassetcompositionratios withineachassetcategory,andcomparesthecombinedrateswiththecorrespondingactualreturnratesoneach asset category. F-68 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) The following table summarizesthe fair value of classes ofplan assets. Yeninmillions March31,2021 JapaneseplansForeignplans Quotedpricesinactive markets Total Quotedpricesinactive markets TotalAvailableNotavailableAvailableNotavailable Stocks .......................... 607,727—607,727194,927—194,927 Government bonds ................ 110,699—110,699113,476—113,476 Bonds (other) .....................— 72,49672,496—203,640203,640 Commingled funds ................— 500,243500,243—385,663385,663 Insurance contracts ................— 216,423216,423——— Other ........................... 145,801152,876298,67716,182165,655181,837 Total ....................... 864,227942,0381,806,265324,584754,9581,079,543 Yeninmillions March31,2022 JapaneseplansForeignplans Quotedpricesinactive markets Total Quotedpricesinactive markets TotalAvailableNotavailableAvailableNotavailable Stocks .......................... 549,385—549,385195,067—195,067 Government bonds ................ 112,568—112,568132,172—132,172 Bonds (other) .....................— 77,04877,048—218,433218,433 Commingled funds ................— 489,471489,471—423,525423,525 Insurance contracts ................— 220,027220,027——— Other ........................... 225,980170,340396,32030,442225,016255,459 Total ....................... 887,933956,8861,844,819357,681866,9751,224,656 “Other” consists of cash equivalents,other private placementinvestment funds and other assets. (5)Thesensitivityanalysis Thefollowingtableillustratestheeffectsondefinedbenefitobligationsofthechangeinweighted-average discount rates, assuming allother assumptions are consistent. Yeninmillions March31, 20212022 Japanese plans Foreign plans Japanese plans Foreign plans 0.5% decrease ....................................... 177,74199,253172,402127,889 0.5% increase ....................................... (154,265)(179,276)(150,226)(118,899) (6)Impactonfuturecashflow ContributionstoplanassetsbyTMCandsomeofitsconsolidatedsubsidiariesaredeterminedbyvarious factorssuchasemployeesalarylevelsandyearsofservice,fundedstatusofplanassets,andactuarial F-69 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) calculations.Inaddition,accordingtotherulesofthedefinedbenefitcorporatepensionlaw,thecorporate pensionfundsystemrecalculatestheamountofthebalanceeveryfiveyearswiththeenddateofthereporting periodasthebasedatesothatfinancialbalancecanbemaintainedinthefuture.TMCandsomeofits consolidated subsidiariesmay make anecessary contributionif the reserveamount is below the minimumreserve amount. Inthefollowingyear(theyearendingMarch31,2023),Toyotaexpectstocontribute¥33,069millionfor Japanese plans and ¥14,876 million forForeign plans to the post-employmentbenefit plans. Thefollowingpensionbenefitpayments,whichreflectexpectedfutureservice,asappropriate,areexpected to be paid: Yeninmillions YearsendingMarch31,JapaneseplansForeignplans 2023 ............................................................... 84,16843,910 2024 ............................................................... 86,65643,958 2025 ............................................................... 83,84245,661 2026 ............................................................... 85,23948,557 2027 ............................................................... 88,95552,725 From 2028 to 2032 .................................................... 421,154301,917 Total ........................................................... 850,015536,727 (7)Benefitobligationsfornon-retirementpensionforretireesandbenefitobligationsforabsentee Toyota’sU.S.subsidiariesprovidecertainhealthcareandlifeinsurancebenefitstoeligibleretired employees.Inaddition,Toyotaprovidesbenefitstocertainformerorinactiveemployeesafteremployment,but beforeretirement.Thesebenefitsareprovidedthroughvariousinsurancecompanies,healthcareprovidersand others.Thecostsofthesebenefitsarerecognizedovertheperiodtheemployeeprovidescreditedserviceto Toyota. Toyota’s obligation under these arrangementsare not material. (8)Payrollexpenses Payrollexpensesincludedin“Costofproductssold”and“Selling,generalandadministrative”inthe consolidatedstatementofincome(includingexpensesforpost-employmentbenefitplans)fortheyearsended March 31, 2020, 2021 and 2022 are ¥3,403,555 million, ¥3,281,292 millionand ¥3,550,882 million, respectively. 24.Liabilitiesforqualityassurance Toyotaprovidesproductwarrantiesforcertaindefectsmainlyresultingfrommanufacturingbasedon warrantycontractswithitscustomersatthetimeofsaleofproducts.Toyotaaccruesestimatedwarrantycoststo beincurredinthefutureinaccordancewiththewarrantycontracts.Inadditiontoproductwarranties,Toyota initiatesrecallsandothersafetymeasurestorepairortoreplacepartswhichmightbeexpectedtofailfrom productssafetyperspectivesorcustomersatisfactionstandpoints.Toyotaaccruesforcostsofrecallsandother safety measures based on the amountestimated from historicalexperience. Liabilitiesforproductwarrantiesandliabilitiesforrecallsandothersafetymeasureshavebeencombined into “Liabilitiesforqualityassurance”inthe consolidatedstatementoffinancialpositiondueto thefactthat both areliabilitiesforcoststorepairorreplacedefectsofvehiclesandtheamountsincurredforrecallsandother safety measures may affectthe amounts incurred for productwarranties and vice versa. F-70 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) The netchangein liabilitiesforqualityassuranceabovefor theyearsendedMarch 31,2020,2021 and2022 consist of the following: Yeninmillions FortheyearsendedMarch31, 202020212022 Liabilities for qualityassurance at beginning of year .............. 1,769,5141,552,9701,482,872 Additional provisions ...................................... 372,619345,563362,180 Utilization ............................................... (482,918)(347,806)(278,094) Reversals ................................................ (99,533)(77,479)(32,124) Other ................................................... (6,712)9,62420,877 Liabilities for qualityassurance at end of year ................... 1,552,9701,482,8721,555,711 “Other”primarilyincludestheimpactofcurrencytranslationadjustmentsandtheimpactofconsolidation and deconsolidation of certain entitiesdue to changes in ownership interest. Thetablebelowshowsthenetchangesinliabilitiesforrecallsandothersafetymeasureswhichare comprised in liabilitiesfor quality assurance above forthe years ended March 31, 2020, 2021 and 2022. Yeninmillions FortheyearsendedMarch31, 202020212022 Liabilities for recallsand other safety measures atbeginning of year .................................................. 1,302,3091,104,7111,093,689 Additional provisions ...................................... 225,373229,763245,542 Utilization ............................................... (354,759)(228,044)(165,482) Reversals ................................................ (61,099)(16,199)(9,389) Other ................................................... (7,113)3,4586,853 Liabilities for recallsand other safety measures atend of year ...... 1,104,7111,093,6891,171,213 25.Equityandotherequityitems (1)Equitymanagement Toyotawillefficientlyinvestinmaintenanceandreplacementofconventionalmanufacturingfacilitiesand theintroductionofnewproducts,andwillfocusoncapitalinvestmentandresearchanddevelopmentinareas contributingtostrengtheningcompetitivenessandfuturegrowth.Throughtheseactivities,Toyotaaimsto improve corporatevalue and keep sustainablegrowth forrealization ofa new mobility society.Generally, Toyota MotorCorporationshareholder’sequitycoversuchactivities,withadditionalshort-termandlong-termdebt,if necessary. TheamountofToyotaMotorCorporationshareholder’sequityandshort-termandlong-termdebtareas follows: Yeninmillions March31, 20212022 Toyota Motor Corporation Shareholders’equity ............................ 23,404,54726,245,969 Short-term and long-term debt .......................................... 25,659,63526,496,358 F-71 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) (2)Numberofshares ThetotalnumberofauthorizedsharesofTMC’scommonstockwas10,000,000,000,10,000,000,000and 50,000,000,000 as of March 31, 2020, 2021 and 2022, respectively. The changes in the shares of common stockissued are as follows: FortheyearsendedMarch31, 202020212022 Common stock issued: Balance at beginning of year ...................... 3,262,997,4923,262,997,4923,262,997,492 Changes during the year ..........................—— 13,051,989,968 Balance at end of year ....................... 3,262,997,4923,262,997,49216,314,987,460 ThecommonstockissuedbyTMCisano-paritystockwithoutanylimitationsonthecontentoftherights, and the issued stock is fully paid. OnOctober1,2021,TMCeffectedafive-for-onestocksplitofitscommonstocktoshareholders.Thetotal numberofauthorizedsharesofTMC’scommonstockandcommonstockissuedwasincreasedby 40,000,000,000 and 13,051,989,968, respectively. Thetotalnumberoftreasurystockwas496,844,960,467,048,832and2,536,685,916asofMarch31,2020, 2021 and 2022, respectively. (3)Capitalsurplusandretainedearnings Capitalsurplusconsistsofcapitalreservesandothercapitalsurplus.Retainedearningsconsistofretained earningsreserveandotherretainedearnings.TheCompaniesAct ofJapanprovidesthatanamountequalto10% ofdistributionsfromsurpluspaidbyTMCanditsJapanesesubsidiariesbeappropriatedasacapitalreserveora retainedearningsreserve.Nofurtherappropriationsarerequiredwhen thetotalamountof thecapitalreserveand theretainedearningsreservereaches25%ofstatedcapital.TheCompaniesActprovidesthattheretained earningsreserveofTMCanditsJapanesesubsidiariesisrestrictedandunabletobeusedfordividendpayments, and is excluded from the calculationof the profit availablefor dividend. TheamountsofstatutoryretainedearningsofTMCavailablefordividendpaymentstoshareholderswere ¥11,215,850millionand¥11,656,187millionasofMarch31,2021and2022,respectively.Inaccordancewith customarypracticeinJapan,thedistributionsfromsurplusarenotaccruedinthefinancialstatementsforthe corresponding period,butarerecordedin thesubsequent accountingperiodafter shareholders’approvalhas been obtained. RetainedearningsatMarch31,2022include¥3,243,920millionrelatingto equityinundistributedearnings of associates and joint ventures. (4)Treasurystock The reissuance and repurchase of treasurystock are as follows: For the year ended March 31, 2020 Repurchaseoftreasurystock F-72 TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) Reasonforrepurchasingtreasurystock- Therepurchasewasmadetoreturncapitaltoshareholdersinadditiontopromotingcapitalefficiencyand agile capital policy in view ofthe business environment. Detailsofmattersrelatingtorepurchase- Number of common shares repurchased ......................... 69,532,900 shares Total purchase price for repurchaseof shares ..................... ¥500,139 million Reissuanceoftreasurystock Reasonforreissuingtreasurystock- OnMay9,2019,TMCresolvedtoconcludecontractsaimedtowardtheestablishmentofanewjoint venture,PrimeLifeTechnologies,relatedtoatowndevelopmentbusinesswithPanasonic.Pursuanttothese contracts,TMC,THCandMisawaHomesconductedashareexchangeinwhichcommonsharesofToyotawere allottedinexchangeforcommonsharesofMisawaHomessothatTHC,aconsolidatedsubsidiaryofTMC,will becomethewhollyowningparentcompanyresultingfromtheshareexchangeandMisawaHomes,a consolidated subsidiary of THC, will becomethe wholly owned subsidiary resulting fromthe share exchange. Detailsofmattersrelatingtoreissuance- Number of common shares reissued ............................ 3,269,500 shares Amount of reissuance ........................................ ¥24,181 million For the year ended March 31, 2021 Reissuanceoftreasurystock Reasonforreissuingtreasurystock- AtitsDirectors’MeetingheldonMarch24,2020,TMCresolvedtopurchasesharesissuedbyNIPPON TELEGRAPHANDTELEPHONECORPORATION(“NTT”)andconductareissuanceoftreasurystock throughthird-partyallotmentwithNTTastheallotteetoformabusinessandcapitalalliancewithNTT.The partiesenteredintoamemorandumofunderstandingconcerningthebusinessandcapitalallianceonthesame day.Basedontheagreement,TMChascompletedthepurchaseofNTTsharesandreissuanceoftreasurystock with NTT as the allottee on April 9, 2020. Detailsofmattersrelatingtoreissuance- Number of common shares reissued ............................ 29,730,900 shares Amount of reissuance ........................................ ¥199,999 million For the year ended March 31, 2022 Repurchaseoftreasurystock 1)RepurchasingoftreasurystockresolvedattheBoardofDirectorsmeetingheldonMay12,2021and November 4, 2021 F-73 TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) Reasonforrepurchasingtreasurystock- Therepurchasewasmadetopromotecapitalefficiencybyrepurchasingflexiblyitscommonstockwhile comprehensively consideringfactorssuch asits investmentingrowth, levelof its dividends,its cashreserves and the price level of its commonstock. Detailsofmattersrelatingtorepurchase- Number of common shares repurchased ......................... 96,196,900 shares Total purchase price for repurchaseof shares ..................... ¥400,000 million 2) Repurchasing of treasury stock resolvedat the Board of Directors meetingheld on March 23, 2022 Reasonforrepurchasingtreasurystock- Therepurchasewasmadetopromotecapitalefficiencybyrepurchasingflexiblyitscommonstockthan before while comprehensively consideringfactors such as the pricelevel of its common stock. Detailsofmattersrelatingtorepurchase- Number of common shares repurchased ......................... 2,111,000 shares Total purchase price for repurchaseof shares ..................... ¥4,607 million F-74 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) (5)Othercomponentsofequity Other components of equity are as follows: Yeninmillions Netchangesin revaluationof financialassets measuredatfair valuethroughother comprehensive income Remeasurementsof definedbenefit plans Exchange differenceson translatingforeign operationsTotal Balance at April 1, 2019 ................. 1,016,035——1,016,035 Other comprehensive income, net of tax............................ (58,946)(54,176)(395,523)(508,645) Reclassification to retainedearnings. . .(4,935)55,580—50,644 Other comprehensive income for the period attributable to non-controlling interests ........................ 1,916(1,404)27,00227,514 Balance at March 31, 2020 ............... 954,070—(368,520)585,549 Other comprehensive income, net of tax............................ 380,814221,409410,2531,012,476 Reclassification to retainedearnings. . .(31,321)(219,047)—(250,369) Other comprehensive income for the period attributable to non-controlling interests ........................ (8,211)(2,362)(29,357)(39,930) Balance at March 31, 2021 ............... 1,295,351—12,3751,307,726 Other comprehensive income, net of tax............................ (103,131)151,2431,095,0171,143,129 Reclassification to retainedearnings. . .(59,110)(149,602)—(208,712) Other comprehensive income for the period attributable to non-controlling interests ........................ 1,561(1,640)(38,810)(38,889) Balance at March 31, 2022 ............... 1,134,671—1,068,5832,203,254 F-75 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) (6)Othercomprehensiveincome Thebreakdownofothercomprehensiveincomeandthecorrespondingtaxbenefits(including non-controlling interests)are as follows: Yeninmillions Fortheyearended March31,2020 Before tax Tax effect After tax Items that will not be reclassifiedto profit (loss) Net changes in revaluation of financialassets measured at fairvalue through other comprehensive income Amount incurred during the year ............................. (353,261)109,409(243,853) Net changes ............................................. (353,261)109,409(243,853) Remeasurements of defined benefitplans Amount incurred during the year ............................. (48,426)5,026(43,399) Net changes ............................................. (48,426)5,026(43,399) Shares of other comprehensive incomeof equity method investees Amount incurred during the year ............................. 62,568—62,568 Net changes ............................................. 62,568—62,568 Items that may be reclassifiedsubsequently to profit(loss) Exchange differences on translatingforeign operations Amount incurred during the year ............................. (390,427)—(390,427) Reclassification to profit(loss) ............................... 28,329—28,329 Net changes ............................................. (362,098)—(362,098) Net changes in revaluation of financialassets measured at fairvalue through other comprehensive income Amount incurred during the year ............................. 141,795(43,367)98,427 Reclassification to profit(loss) ............................... 20,380(5,417)14,963 Net changes ............................................. 162,174(48,784)113,390 Shares of other comprehensive incomeof equity method investees Amount incurred during the year ............................. (35,253)—(35,253) Reclassification to profit(loss) ...............................——— Net changes ............................................. (35,253)—(35,253) Total other comprehensive income ................................... (574,296)65,651(508,645) F-76 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) Yeninmillions Fortheyearended March31,2021 Before tax Tax effect After tax Items that will not be reclassifiedto profit (loss) Net changes in revaluation of financialassets measured at fairvalue through other comprehensive income Amount incurred during the year ............................. 560,225(172,798)387,427 Net changes ............................................. 560,225(172,798)387,427 Remeasurements of defined benefitplans Amount incurred during the year ............................. 311,360(95,087)216,272 Net changes ............................................. 311,360(95,087)216,272 Shares of other comprehensive incomeof equity method investees Amount incurred during the year ............................. 80,472—80,472 Net changes ............................................. 80,472—80,472 Items that may be reclassifiedsubsequently to profit(loss) Exchange differences on translatingforeign operations Amount incurred during the year ............................. 403,636—403,636 Reclassification to profit(loss) ...............................——— Net changes ............................................. 403,636—403,636 Net changes in revaluation of financialassets measured at fairvalue through other comprehensive income Amount incurred during the year ............................. (119,441)35,938(83,503) Reclassification to profit(loss) ...............................——— Net changes ............................................. (119,441)35,938(83,503) Shares of other comprehensive incomeof equity method investees Amount incurred during the year ............................. 8,172—8,172 Reclassification to profit(loss) ...............................——— Net changes ............................................. 8,172—8,172 Total other comprehensive income ................................... 1,244,424(231,947)1,012,476 F-77 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) Yeninmillions Fortheyearended March31,2022 Before tax Tax effect After tax Items that will not be reclassifiedto profit (loss) Net changes in revaluation of financialassets measured at fairvalue through other comprehensive income Amount incurred during the year ............................. (71,641)22,399(49,242) Net changes ............................................. (71,641)22,399(49,242) Remeasurements of defined benefitplans Amount incurred during the year ............................. 188,239(51,989)136,250 Net changes ............................................. 188,239(51,989)136,250 Shares of other comprehensive incomeof equity method investees Amount incurred during the year ............................. 113,641—113,641 Net changes ............................................. 113,641—113,641 Items that may be reclassifiedsubsequently to profit(loss) Exchange differences on translatingforeign operations Amount incurred during the year ............................. 902,844—902,844 Reclassification to profit(loss) ...............................——— Net changes ............................................. 902,844—902,844 Net changes in revaluation of financialassets measured at fairvalue through other comprehensive income Amount incurred during the year ............................. (220,711)66,536(154,175) Reclassification to profit(loss) ...............................1(0)1 Net changes ............................................. (220,710)66,536(154,174) Shares of other comprehensive incomeof equity method investees Amount incurred during the year ............................. 193,811—193,811 Reclassification to profit(loss) ...............................——— Net changes ............................................. 193,811—193,811 Total other comprehensive income ................................... 1,106,18436,9451,143,129 F-78 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) (7)Dividends The paid dividend amounts are as follows: For the year ended March 31, 2020 ResolutionTypeofshares Totalamount ofdividends (yeninmillions) Dividendpershare (yen)RecorddateEffectivedate The Board of Directors Meeting on May 8, 2019 .......... Common shares339,893120.00March 31, 2019May 24, 2019 The Board of Directors Meeting on November 7, 2019 .......... Common shares278,908100.00September 30, 2019November 27, 2019 For the year ended March 31, 2021 ResolutionTypeofshares Totalamount ofdividends (yeninmillions) Dividendpershare (yen)RecorddateEffectivedate The Board of Directors Meeting on May 12, 2020 ........... Common shares331,938120.00March 31, 2020May 28, 2020 The Board of Directors Meeting on November 6, 2020 ........... Common shares293,576105.00September30, 2020November 27, 2020 For the year ended March 31, 2022 ResolutionTypeofshares Totalamount ofdividends (yeninmillions) Dividendpershare (yen)RecorddateEffectivedate The Board of Directors Meeting on May 12, 2021 ........... Common shares377,453135.00March 31, 2021May 28, 2021 The Board of Directors Meeting on November 4, 2021 ........... Common shares332,419120.00September30, 2021November 25, 2021 F-79 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) DividendsofwhichrecorddatefallswithintheyearendedMarch31,andeffectivedateisaftertheyear ended March 31 are as follows: For the year ended March 31, 2022 ResolutionTypeofshares Totalamount ofdividends (yeninmillions) Dividendpershare (yen)RecorddateEffectivedate The Board of Directors Meeting on May 11, 2022 ........... Common shares385,79228.00March 31, 2022May 27, 2022 OnOctober1,2021,TMCeffectedafive-for-onestocksplitofitscommonstocktoshareholders.The dividendpershareamountbasedontheBoardofDirectorsMeetingonNovember4,2021isanamountbefore thestocksplit.ThedividendpershareamountbasedontheBoardofDirectorsMeetingonMay11,2022isan amount after the stock split. 26.Salesrevenues (1)Summarybybusinesssegmentsandproducts ThetablebelowshowsToyota’ssalesrevenuesfromexternalcustomersbybusinessandbyproduct category. Yeninmillions FortheyearsendedMarch31 202020212022 Sales of products Automotive Vehicles ........................................ 22,647,70120,509,60623,739,442 Parts and components for production ................. 1,197,0891,287,0531,504,215 Parts and components for afterservice ................ 2,170,4482,049,1872,407,143 Other .......................................... 755,141752,000881,193 Total automotive ............................. 26,770,37924,597,84628,531,993 All other ............................................ 923,314479,553541,436 Total sales of products ......................... 27,693,69325,077,39829,073,428 Financial services ........................................ 2,172,8542,137,1952,306,079 Total sales revenues ...................... 29,866,54727,214,59431,379,507 ThemajorityofsalesofproductsarerevenuesrecognizedfromcontractswithcustomersunderIFRS15 “RevenuefromContractswithCustomers”(“IFRS15”),andreceivablesrelatedtosuchrevenuesarerecognized as “Trade accounts and other receivables”. F-80 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) The breakdown of income from leases includedin financial service revenuesis as follows: Yeninmillions FortheyearsendedMarch31, 202020212022 Finance leases Financial income related tonet lease investment ............ 98,865106,724134,512 Operating leases ......................................... 1,051,8221,017,7071,093,545 Total .......................................... 1,150,6881,124,4311,228,057 Financialservicerevenuesotherthanincomefromleasesmainlyconsistofinterestincomeusingthe effective interest method.The amount of interest incomeusing the effective interestmethod is not significant. FortheyearsendedMarch31,2020,2021and2022¥127,113million,¥125,748millionand ¥138,718 million of financial servicerevenues were accounted for underIFRS 15. (2)Contractliabilities Contract liabilities consistof the following: Yeninmillions March31, 20212022 Contract liabilities .......................................................... 854,679989,959 Contractliabilitiesareprimarilyrelatedtoadvancesreceivedfromcustomers.Contractliabilitiesare includedin“Othercurrentliabilities”and“Othernon-currentliabilities”intheconsolidatedstatementof financialposition.FortheyearendedMarch31,2021and2022,theamountstransferredfromcontractliabilities at the beginning of the fiscalyear to operating income were ¥370,278 millionand ¥444,781 million, respectively. (3)Performanceobligations Theaggregateamountsoftransactionpricesallocatedtounsatisfiedperformanceobligationsrelatedto contracts thathave originalexpected durations inexcess of oneyear were ¥618,668 millionand ¥796,769million asofMarch31,2021and2022,respectively.Themaincontentsofunsatisfiedperformanceobligationsare insurance revenues and maintenancerevenues. Forinsurancerevenues,Toyotareceivespaymentagreeduponinthecontractattheinceptionofthe contract,andrevenueisrecognizedoverthetermofthecontract,whichrangesfromthreeto120months.Asof March31,2021,theunsatisfiedperformanceobligationsrelatedtoinsurancerevenueswere¥237,805million, andToyotaexpectedtorecognizeasrevenue¥67,537millioninfiscal2022,and¥170,268millionthereafter.As ofMarch31,2022,theunsatisfiedperformanceobligationsrelatedto insurancerevenues were¥295,648million, and Toyota expects to recognize as revenue¥82,215 million in fiscal 2023, and ¥213,432 millionthereafter. Formaintenancerevenues,Toyotareceivespaymentsagreeduponinthecontractattheinceptionofthe contract, and revenue is recognizedover the term of the contract,which ranges from 18 to 84 months. Unsatisfiedperformanceobligationsforsalesofproductsrelatedtocontractsthathaveanoriginalexpected duration of one year or less have beenexcluded from this disclosure. F-81 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) 27.Researchanddevelopmentcost Research and development costs consistof the following: Yeninmillions FortheyearsendedMarch31, 202020212022 Research and development expendituresincurred during the year ......... 1,110,3691,090,4241,124,262 Amount capitalized ............................................. (164,127)(158,246)(200,512) Amortization of capitalizeddevelopment costs ....................... 149,776152,542167,926 Total .................................................... 1,096,0191,084,7211,091,675 28.Otherfinanceincomeandcosts Other finance income and costs consistof the following: Yeninmillions FortheyearsendedMarch31, 202020212022 Other finance income Interest income Financial assets measured atamortized cost .................. 37,20117,52616,920 Financial assets measured atfair value through other comprehensive income ................................ 84,62988,07484,592 Dividend income Financial assets measured atfair value through other comprehensive income ................................ 110,24388,83794,833 Other .................................................... 73,772240,791138,416 Total ............................................ 305,846435,229334,760 Other finance costs Interest expense Financial liabilitiesmeasured at amortized cost ............... (44,114)(42,421)(32,458) Other .................................................... (3,041)(5,116)(11,539) Total ............................................ (47,155)(47,537)(43,997) Thedecreasein“Otherfinanceincome—Other”wasduemainlytoadecreaseduringfiscal2022inprofit on sales of securities. F-82 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) 29.Earningspershare ReconciliationofthedifferencebetweenbasicanddilutedearningspershareattributabletoToyotaMotor Corporation are as follows: Yeninmillions Thousands ofsharesYen Netincome attributabletoToyota MotorCorporation Weighted-average commonshares Earningspershare attributabletoToyota MotorCorporation FortheyearendedMarch31,2020 Net income attributable to ToyotaMotor Corporation ............................. 2,036,140 Basic earnings per share attributableto Toyota Motor Corporation .................... 2,036,14013,994,590145.49 Effect of dilutive securities Model AA Class Shares .................. 13,265235,500 Diluted earnings per share attributableto Toyota Motor Corporation ........................ 2,049,40514,230,090144.02 FortheyearendedMarch31,2021 Net income attributable to ToyotaMotor Corporation ............................. 2,245,261 Basic earnings per share attributableto Toyota Motor Corporation .................... 2,245,26113,976,442160.65 Effect of dilutive securities Model AA Class Shares .................. 12,569229,694 Diluted earnings per share attributableto Toyota Motor Corporation ........................ 2,257,83014,206,137158.93 FortheyearendedMarch31,2022 Net income attributable to ToyotaMotor Corporation ......................... 2,850,110 Basic earnings per share attributableto Toyota Motor Corporation .................... 2,850,11013,887,348205.23 Effect of dilutive securities Model AA Class Shares ..................23311 Diluted earnings per share attributableto Toyota Motor Corporation ........................ 2,850,13213,887,659205.23 InadditiontothedisclosurerequirementsunderIFRS,Toyotadisclosestheinformationbelowinorderto provide financial statementsusers with valuable information. F-83 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) ThefollowingtableshowsToyotaMotorCorporationshareholders’equitypershare.ToyotaMotor Corporationshareholders’equitypershareamountsarecalculatedbydividingToyotaMotorCorporation shareholders’ equityin the consolidatedstatement offinancial positionby common sharesissued andoutstanding at the end of the year (excluding treasurystock). Yeninmillions Thousands ofsharesYen ToyotaMotor Corporation shareholders’equity Commonsharesissued andoutstandingatthe endoftheyear (excludingtreasury stock) ToyotaMotor Corporation shareholders’equity pershare AsofMarch31,2021 ....................... 23,404,54713,979,7431,674.18 AsofMarch31,2022 ....................... 26,245,96913,778,3021,904.88 OnOctober1,2021,TMCeffectedafive-for-onestocksplitofitscommonstocktoshareholders.“Basic earningspershareattributabletoToyotaMotorCorporation”,“DilutedearningspershareattributabletoToyota MotorCorporation”and“ToyotaMotorCorporationshareholders’equitypershare”arecalculatedbasedonthe assumption that the stock splitwas implemented at the beginningof the earliest period presentedin this note. 30.Contractualcommitmentsandcontingentliabilities (1)Contractualcommitments Contractualcommitmentsrelatingtopurchaseofproperty,plantandequipment,otherassets,andservices are ¥359,214 million, ¥349,143 million asof March 31, 2021 and 2022. (2)Guarantees ToyotaentersintocontractswithToyotadealerstoguaranteecustomers’paymentsoftheirinstallment payablesthatarisefrominstallmentcontractsbetweencustomersandToyotadealers,asandwhenrequestedby Toyotadealers.Guaranteeperiodsaresettomatchmaturityofinstallmentpayments,andasofMarch31,2022, rangefrom1monthto8years;however,theyaregenerallyshorterthantheusefullivesofproductssold.Toyota is required to execute its guaranteeprimarily when customersare unable to make requiredpayment. Themaximumpotentialamountoffuturepaymentsare¥3,710,352millionand¥3,641,978millionasof March31,2021and2022.Liabilitiesforguaranteestotaling¥18,493million,and¥21,869millionhavebeen providedasofMarch31,2021and2022.Undertheseguaranteecontracts,Toyotaisentitledtorecoverany amount paid by Toyota from the customerswhose original obligations Toyota hasguaranteed. (3)Markettreatmentsuchasrecalls,damagesandlawsuits ToyotaandotherautomakershavebeennamedincertainclassactionsfiledinMexico,Canada,Australia, Israel andBrazil relatingto Takata airbagissues. The actionsin Mexico,Israel and Brazilare being litigated.The action in Australia is in theprocess of resolution. ToyotaisnamedasadefendantinaneconomiclossclassactionlawsuitinAustraliainwhichdamagesare claimedonthebasisthatdieselparticulatefiltersincertainvehiclemodelsaredefective.OnApril7,2022, Toyotareceivedanunfavourablejudgmentinthecourtoffirstinstance.Thejudgmentincludedafindingthat therewasaperceivedreductioninvehiclevalueofcertainvehiclemodels.Toyotadisagreeswiththejudgment andhasfiledanappeal.Otherclaimsofeconomiclossinthisclassactionlawsuitcontinuetobelitigatedatthe F-84 TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) courtoffirstinstance.Inestimatingtheprovisionweshouldrecordintheconsolidatedfinancialstatementsasa resultoftheaforementionedjudgment,Toyotahasconsideredvariousfactorsincludingthelegalandfactual circumstancesofthecase,thecontentsofthejudgementofthecourtoffirstinstance,andtheviewsoflegal counsel.ThecurrentlyestimatedprobableeconomicoutflowrelatedtotheclassactionisimmaterialtoToyota’s consolidatedfinancialposition,resultsofoperationsandcashflows.Atthisstage,however,thefinaloutcome and therefore ultimate financialliability forToyota on account of this mattercannot be predicted with certainty. Aspreviouslydisclosed,ToyotaenteredintoaconsentdecreeonJanuary14,2021withtheU.S.EPA,the DepartmentofJustice(“DOJ”)andtheCivilDivisionoftheU.S.Attorney’sOfficefortheSouthernDistrictof NewYork(“SDNY”)toresolveinvestigationsstemmingfromaself-reportedprocessgapinfulfillingcertain emissionsdefectinformationreportingrequirements.Undertheconsentdecree,Toyotaagreedtopay,andhas paid, a $180 millioncivil penalty and to complywith certain additionalperiodic reporting requirements.The U.S. District Court for the Southern Districtof New York approved the consent decree on April2, 2021. InApril2020,Toyotareportedpossibleanti-briberyviolationsrelatedtoaThaisubsidiarytotheSECand theDOJ,andiscooperatingwiththeirinvestigations.Investigationsbygovernmentalauthoritiesrelatedtothese matterscouldresultintheimpositionofcivilorcriminalpenalties,finesorothersanctions,orlitigation.Toyota cannot predict the scope, duration oroutcome of these mattersat this time. Toyotaalsohasvariousotherpendinglegalactionsandclaims,includingwithoutlimitationpersonalinjury andwrongfuldeathlawsuitsandclaimsintheUnitedStates,aswellasintellectualpropertylitigation,andis subject to government investigationsfrom time to time. Beyondtheamountsaccruedwithrespecttoallaforementionedmatters,Toyotaisunabletoestimatea range ofreasonablypossibleloss, ifany,forthe pendinglegalmattersbecause(i)many ofthe proceedingsarein evidencegatheringstages,(ii)significantfactualissuesneedtoberesolved,(iii)thelegaltheoryornatureofthe claimsisunclear,(iv)theoutcomeoffuturemotionsorappealsisunknownand/or(v)theoutcomesofother matters of thesetypes vary widely and do not appearsufficiently similarto offer meaningful guidance.Therefore, foralloftheaforementionedmatters,whichToyotaisindiscussionstoresolve,anylossesthatarebeyondthe amounts accrued could have an adverse effecton Toyota’s financial position,results of operationsor cash flows. TMC hasaconcentrationoflaborsupplyinemployeesworkingundercollectivebargainingagreementsand a substantial portion of theseemployees are working under the agreementthat will expire on December31, 2023. 31.Detailsofcompanyorganization (1)Majorsubsidiaries Toyota’s major subsidiariesare follows; Toyotaprimarilyconductsbusinessintheautomotiveindustry.Toyotaalsoconductsbusinessinfinance and other industries. AutomobilesaremainlymanufacturedbyTMC,HinoMotorsLtd.andDaihatsuMotorCo.,Ltd.,butsome of them are outsourced in Japan. ToyotaMotor Manufacturing Kentucky, Inc. and othersmanufacture overseas. Auto partsare manufacturedby TMCand others.These productsare soldthrough dealerssuch asTOYOTA Mobility Tokyo Inc. in Japan, and through dealerssuch as Toyota Motor Sales, U.S.A., Inc. overseas. F-85 TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) Inthefinancingbusiness,ToyotaFinanceCorporationandothersprovidesalesfinanceservicesinJapan and Toyota Motor Credit Corporation and othersoverseas. Other business consists of informationtechnology business and others. (2)Structuredentities (i)Consolidated structuredentities Toyotaperiodicallysecuritizesreceivablesrelatedtofinancialservicesandvehiclesonleasesforliquidity and funding purposesandtransfers themto special purposeentities. Toyotais deemed tohave the power todirect theactivitiesoftheseentitiesthatmostsignificantlyimpacttheentities’economicperformances.Therefore, Toyota has consolidated them. ThecreditorsoftheseentitiesdonothaverecoursetoToyota’sgeneralcreditwiththeexceptionofdebts guaranteedbyToyota.RiskstowhichToyotaisexposedincludingcredit,interestrate,and/orprepaymentrisks are not incremental comparedwith the situation before Toyota entersinto securitizationtransactions. Toyotahasequityininvestmenttrustsandotherspecialpurposeentities.Withrespecttosomeofthe investmenttrusts,Toyotahasboththeobligationtoabsorblossesofortherighttoreceivebenefitsfromthe investmenttruststhatcouldpotentiallybesignificanttotheinvestmenttrustsandthepowertodirectthe activitiesoftheinvestmenttruststhatmostsignificantlyimpacttheinvestmenttrusts’economicperformance through the asset manager. Therefore,Toyota has consolidated them. Relatedtosecuritizationtransactions,¥3,132,734millionand¥3,367,601millionreceivablesrelatedto financialservices,¥3,211,211millionand¥3,882,623millionsecureddebtwereincludedinToyota’s consolidated financial statementsas of March 31, 2021 and 2022, respectively. (ii)Unconsolidated structured entities Otherinvestmenttrustsandotherspecialpurposeentitiesareinstructedbasedoncontractualarrangements, and aredesignedsothatvotingorsimilarrightsarenotthedominantfactorin decidingwhocontrolsthe entities. ThetrustsandthespecialpurposeentitiesaredefinedasstructuredentitiesbutaredeterminedthatToyotalacks thepowertodirecttheactivitiesoftheseinvestmentsthatmostsignificantlyimpactthetrust’seconomic performanceand,thereforedoesnotconsolidatetheinvestmenttrustsandthespecialpurposeentities. Investmentsintheinvestmenttrustsandthespecialpurposeentitiesareheldatfairvalueandareincludedin “Otherfinancialassets”intheconsolidatedstatementoffinancialposition.Themaximumexposuretolossis limitedtothecarryingvalueofitsinvestment.Thecarryingvalueofthetruststotaled¥37,397millionand ¥18,829millionasofMarch31,2021and2022,respectively.Thecarryingvalueofthespecialpurposeentities totaled¥1,240,530millionand¥1,073,137millionas ofMarch31,2021and2022, respectively.Toyota doesnot provide support that is not contractuallyrequired to the investments. F-86 ![]() TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) 32.Relatedpartytransactions (1)Transactionswithassociatesandjointventures Thebalancesandturnoverofreceivablesandpayableswithassociatesandjointventuresaccountedfor under the equity method are as follows: Yeninmillions March31, 20212022 Trade accounts and other receivables Associates .......................................................... 265,938302,212 Joint ventures ........................................................ 44,48164,195 Total .......................................................... 310,419366,407 Trade accounts and other payables Associates .......................................................... 855,9971,086,397 Joint ventures ........................................................656 5,112 Total .......................................................... 856,6531,091,509 Yeninmillions FortheyearsendedMarch31, 202020212022 Sales revenues Associates ................................................ 1,928,4681,138,1441,948,681 Joint ventures .............................................. 489,735499,437413,703 Total ................................................ 2,418,2021,637,5822,362,384 Cost of products sold (purchases) Associates ................................................ 6,694,3955,983,7977,946,788 Joint ventures .............................................. 86,74751,434308 Total ................................................ 6,781,1426,035,2317,947,095 Dividendsfromassociatesandjointventuresaccountedforundertheequitymethodare¥205,101million and¥252,557millionfortheyearsendedMarch31,2021and2022,respectively.Inaddition,Toyotadoesnot engage in transactions with associatesand joint ventures outsideof the normal course of business. (2)Compensationofkeymanagement The compensation for the directorsand audit & supervisory board membersof TMC is as follows: Yeninmillions FortheyearsendedMarch31, 202020212022 Monthly compensation .......................................... 1,0239871,083 Bonus ........................................................ 1,039748196 Share compensation .............................................477364772 Other ........................................................—747— Total .................................................... 2,5402,8472,051 F-87 TOYOTAMOTORCORPORATION NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) “Other”referstoincometaxcompensationthatwasgrantedtoamemberoftheBoardofDirectors, Mr.DidierLeroy,withrespecttohisremunerationduringtheperiodinwhichheservedasamemberofthe Board of Directors. Mr. Leroy retiredon June 11, 2020. 33.Supplementalcashflowinformation “Other,net”incashflowsfrominvestingactivitiesincludesanetincreaseintimedepositsof¥1,700,254 millionandanetdecreaseintimedepositsof¥2,070,726millionfortheyearendedMarch31,2021and2022, respectively. 34.Significantsubsequentevents Not applicable. F-88 ITEM19.EXHIBITS IndextoExhibit 1.1Amended and Restated Articles of Incorporation ofthe Registrant (English translation) 1.2AmendedandRestatedRegulationsoftheBoardofDirectorsoftheRegistrant(English translation) 1.3AmendedandRestatedRegulationsoftheAudit&SupervisoryBoardoftheRegistrant(English translation)(incorporatedbyreferencetoExhibit1.3toToyota’sAnnualReportonForm20-F forthefiscalyearendedMarch31,2016,filedwiththeSEConJune24,2016(fileno. 001-14948)) 2.1AmendedandRestatedShareHandlingRegulationsoftheRegistrant(Englishtranslation) (incorporatedbyreferencetoExhibit2.1toToyota’sAnnualReportonForm20-Fforthefiscal year ended March 31, 2021, filed with the SEC on June 24, 2021 (fileno. 001-14948)) 2.2FormofAmendedandRestatedDepositAgreementamongtheRegistrant,TheBankof NewYorkMellon,asdepositary,andallownersandholdersfromtimetotimeofAmerican DepositarySharesissuedthereunder,includingtheformofAmericanDepositary Receipt(incorporatedbyreferencetoExhibit1toToyota’sRegistrationStatementonFormF-6, filed with the SEC on September 21, 2021 (fileno. 333-259683)) 2.3Form of American Depositary Receipt (included inExhibit 2.2) 2.4DescriptionofToyota’sCommonStock(incorporatedbyreferenceto“Item10.B.Memorandum and Articles of Incorporation”of this annual report) 2.5Description of Toyota’s American Depositary Shares 8.1ListofPrincipalSubsidiaries(See“OrganizationalStructure”in“Item4.Informationonthe Company”) 11.1Code ofEthicsoftheRegistrantapplicabletoitsmembersof theboardof directorsand operating officers,includingitsprincipalexecutiveofficer,principalfinancialofficer,principalaccounting officerorcontroller,orpersonsperformingsimilarfunctions(Englishtranslation)(incorporated byreferencetoExhibit11.1toToyota’sAnnualReportonForm20-Fforthefiscalyearended March 31, 2021, filed with the SEC on June 24, 2021 (file no. 001-14948)) 12.1CertificationsoftheRegistrant’sPresidentandMemberoftheBoard,aswellasMemberofthe Board, pursuant to Section 302 of the Sarbanes-OxleyAct 13.1CertificationsoftheRegistrant’sPresidentandMemberoftheBoard,aswellasMemberofthe Board, pursuant to Section 906 of the Sarbanes-OxleyAct 101.INSInlineXBRLInstanceDocument—theinstancedocumentdoesnotappearintheInteractive Data File because its XBRL tags are embedded withinthe Inline XBRL document 101.SCHInlineXBRL Taxonomy Extension Schema Document 101.CALInlineXBRL Taxonomy Extension Calculation Linkbase Document 101.DEFInline XBRL Taxonomy Extension DefinitionLinkbase Document 101.LABInlineXBRL Taxonomy Extension Label Linkbase Document 101.PREInline XBRL Taxonomy Extension PresentationLinkbase Document 104Thecoverpagefortheregistrant’sAnnualReportonForm20-FfortheyearendedMarch31, 2022, has been formatted in InlineXBRL 124 ![]() SIGNATURES TheregistrantherebycertifiesthatitmeetsalloftherequirementsforfilingonForm20-Fandthatithas duly caused and authorized the undersignedto sign this annual report on itsbehalf. TOYOTAMOTORCORPORATION By:/s/ Masahiro Yamamoto Name: MasahiroYamamoto Title: ChiefOfficer,AccountingGroup Date: June 23, 2022 Exhibit1.1 ARTICLES OF INCORPORATIONOF TOYOTA MOTOR CORPORATION (As amended on June 15, 2022) CHAPTER I. GENERAL PROVISIONS Article 1. (Trade Name) ThenameoftheCorporationshallbe“ToyotaJidoshaKabushikiKaisha”tobeexpressedinEnglishas “TOYOTA MOTOR CORPORATION”. Article 2. (Purpose) The purpose of the Corporation shall be toengage in the following businesses: (1)themanufacture,sale,leasingandrepairofmotorvehicles,industrialvehicles,ships,aircraft,other transportationmachineryandapparatus,spacecraftandspacemachineryandapparatus,andparts thereof; (2)themanufacture,sale,leasingandrepairofindustrialmachineryandapparatusandothergeneral machinery and apparatus, and partsthereof; (3)the manufacture,sale, leasing and repairof electrical machineryand apparatus, and parts thereof; (4)themanufacture,sale,leasingandrepairofmeasuringmachineryandapparatus,andmedical machinery and apparatus, and partsthereof; (5)the manufactureand sale of ceramics andproducts of synthetic resins, and materialsthereof; (6)themanufacture,saleandrepairofconstructionmaterialsandequipment,furnishingsandfixturesfor residential buildings; (7)theplanning,designing,supervision,executionandundertakingofconstructionworks,civil engineering works, land development, urbandevelopment and regional development; (8)the sale, purchase,leasing, brokerage and managementof real estate; (9)theserviceofinformationprocessing,informationcommunicationsandinformationsupply,andthe development, sale and leasing of software; (10)thedesignanddevelopmentofproductsalessystemsthatutilizenetworkssuchastheInternet;sale, leasing,maintenanceofcomputersincludedwithinsuchsystems,andsalesofproductsbyutilizing such systems; (11)theinlandtransportation,marinetransportation,airtransportation,stevedoring,warehousingand tourism businesses; (12)theprinting,publishing,advertisingandpublicity,generalleasing,securityandworkersdispatch businesses; (13)thecreditcardoperations,purchaseandsaleofsecurities,investmentconsulting,investmenttrust operation, and other financialservices; (14)theoperationandmanagementofsuchfacilitiesasparkinglots,showrooms,educationalfacilities, medicalcarefacilities,sportsfacilities,marinas,airfields,foodanddrinkstandsandrestaurants, lodging facilities, retailstores and others; (15)the non-life insurance agency business and life insuranceagency business; (16)theproductionandprocessingbyusingbiotechnologyofagriculturalproductsincludingtrees,andthe sale of such products; (17)power generation and the supply and sale of electric power (18)the sale of goods related to each of the preceding itemsand mineral oil; (19)theconductingofengineering,consulting,inventionandresearchrelatingtoeachofthepreceding items and the utilizationof such invention and research; and (20)any businesses incidental to or related to any of the precedingitems. Article 3. (Location of PrincipalOffice) The principal office of the Corporationshall be located in Toyota City, AichiPrefecture, Japan. Article 4. (Public Notices) PublicnoticesoftheCorporationshallbegivenelectronically;provided,however,thatinthecasethatan electronicpublicnoticeisimpracticableduetoanaccidentor anyotherunavoidablereason, publicnoticesofthe Corporation shall be given in the newspaper“The Nihon Keizai Shimbun”. CHAPTER II. SHARES Article 5. (Total Number of AuthorizedShares) ThetotalnumberofshareswhichtheCorporationisauthorizedtoissueshallbefiftybillion (50,000,000,000). Article6.(NumberofSharesConstitutingOneUnit(tangen)andRightstoSharesConstitutingLessthanOne Unit (tangen)) 1.Thenumberofsharesconstitutingoneunit(tangen)ofsharesoftheCorporationshallbeonehundred (100). 2.TheshareholdersoftheCorporationarenotentitledtoexerciseanyrightstosharesconstitutingless thanoneunit(tangen)ofsharesheldbytheshareholders,otherthantherightsprovidedforineachItemof Article 189, Paragraph 2 of the Companies Act(Kaisha-hou). Article 7. (Acquisition of Own Shares) The Corporation mayacquire its own sharesby a resolutionof the Board of Directors in accordancewith the provisions of Article 165, Paragraph 2 ofthe Companies Act. Article 8. (Transfer Agent) 1.The Corporationshall have a transferagent ( Kabunushimeibo-Kanrinin ). 2.ThetransferagentandthelocationofitsofficeshallbedesignatedbyaresolutionoftheBoardof Directors,andpublicnoticethereofshallbegiven.Theregisterofshareholdersandtheregisterofstock acquisitionrightsshallbekeptattheofficeofthetransferagent.Theentryorrecordingintotheregisterof shareholdersandtheregisterofstockacquisitionrights,thepurchaseofsharesconstitutinglessthanoneunit (tangen)andanyothermattersrelatedtothesharesandstockacquisitionrightsshallbehandledbythetransfer agent and not by the Corporation. Article 9. (Share Handling Regulations) Theproceduresforandfeesfortheentryorrecordingintotheregisterofshareholdersandtheregisterof stockacquisitionrights,purchasingsharesconstitutinglessthanoneunit(tangen)andanyothermattersrelating tothehandlingofsharesandstockacquisitionrightsshallbesubjecttotheShareHandlingRegulations established by the Board of Directors. Article 10. (Record Date) 1.TheCorporationshalldeemanyshareholderenteredorrecordedinthefinalregisterofshareholdersas ofMarch31insuchyeartobeashareholderentitledtoexerciseitsrightsattheordinarygeneralmeetingof shareholders for that businessyear. 2.Inadditiontothecaseprovidedforintheprecedingparagraph,theCorporationmay,aftergivingprior public notice, fix a date as therecord date, where it deems it necessaryto do so. CHAPTER III. GENERAL MEETINGS OF SHAREHOLDERS Article 11. (Ordinary General Meetingsand Extraordinary General Meetingsof Shareholders) 1.TheordinarygeneralmeetingofshareholdersoftheCorporationshallbeconvenedinJuneofeachyear. Extraordinary general meetingsof shareholders may be calledwhenever necessary. 2.Eachgeneralmeetingofshareholdersmaybeconvenedattheplacewheretheprincipalofficeofthe Corporation is located, or at a placeadjacent thereto, or in Nagoya City. Article 12. (Resolutions) 1.Allresolutionsofageneralmeetingofshareholdersshallbeadoptedbyamajorityofthevotesofthe shareholderspresentatthemeetingwhoareentitledtovote,unlessotherwiseprovidedbylawsandregulations or these Articles of Incorporationof the Corporation. 2.SpecialresolutionsasspecifiedbyArticle309,Paragraph2oftheCompaniesActshallbeadoptedby not lessthan two-thirds(2/3)of thevotes ofthe shareholderspresentat themeeting whohold sharesrepresenting in aggregate not less than one-third(1/3) of the voting rightsof all shareholders who are entitledto vote. Article 13. (Chairman of General Meeting) 1.TheChairmanoftheBoardorthePresidentoftheCorporationshallpresideaschairmanatageneral meeting of shareholders. 2.IntheeventthatthepositionsofboththeChairmanoftheBoardandthePresidentarevacantorthat bothofthemarepreventedfromsopresidingaschairman,anotherDirectoroftheCorporationshallpresidein their place according to the orderof precedence previously establishedby the Board of Directors. Article 14. (Exercise of Voting Rights by Proxy) 1.Ashareholdermayexerciseitsvotingrightsbyproxy,provided,however,thattheproxyshallbea shareholder of the Corporation who is entitledto exercise its own votingrights. 2.Incaseswheretheprecedingparagraphapplies,theshareholderoritsproxyshallfilewiththe Corporationadocumentestablishingtheproxy’spowerofrepresentationforeachgeneralmeetingof shareholders. 3.TheCorporationmayrefuseashareholderhavingtwo(2)ormoreproxiesattendageneralmeetingof shareholders. Article 15. (Measures for ElectronicProvision of Information,etc.) 1.Uponconvening a generalmeeting of shareholders,the Corporation shallprovide information contained inreferencedocumentsforthegeneralmeetingofshareholders,businessreports,financialstatementsand consolidatedfinancialstatementsandotherdocumentstoshareholderselectronicallypursuanttolawsand regulations. 2.Amongthematterstobeprovidedelectronically,theCorporationmaychoosenottoincludeallorpart ofthemattersstipulatedintheOrdinanceoftheMinistryofJusticeinthepapercopytobesenttoshareholders who have requested it by the record datefor vesting voting rights. CHAPTER IV. MEMBERS OF THE BOARDOF DIRECTORS AND BOARD OF DIRECTORS Article 16. (Number of Directors) The Corporation shall have no more than twenty(20) Directors. Article 17. (Election of Directors) 1.Directorsshall be elected by a resolutionof a general meetingof shareholders. 2.Aresolutionfor theelection ofDirectorsshall beadopted by amajority voteof the shareholderspresent atthemeetingwhoholdsharesrepresentinginaggregatenotlessthanone-third(1/3)ofthevotingrightsofall the shareholders who are entitledto vote. 3.The electionof Directors shall notbe made by cumulative voting. Article 18. (Term of Office of Directors) 1.ThetermofofficeofDirectorsshallexpireattheclosingoftheordinarygeneralmeetingof shareholderstobeheldforthelastbusinessyearoftheCorporationendingwithinone(1)yearaftertheir election. 2.ThetermofofficeofanyDirectorelectedinordertoincreasethenumberofDirectorsortofilla vacancyshallbethebalanceofthetermofofficeoftheotherDirectorswhoholdofficeatthetimeofhis/her election. Article 19. (Board of Directors) 1.The Corporationshall have a Board of Directors. 2.NoticeofameetingoftheBoardofDirectorsshallbedispatchedtoeachDirectorandeachAudit& SupervisoryBoardMemberatleastthree(3)daysbeforethedateofthemeeting.Incaseofurgency,however, such period may be shortened. 3.WithrespecttomatterstoberesolvedbytheBoardofDirectors,theCorporationshalldeemthatsuch matters were approvedby a resolutionof the Board of Directors when all theDirectors express their agreementin writingorbyelectronicrecords.Provided,however,thatthisprovisionshallnotapplywhenanyAudit& Supervisory Board Member expresses his/herobjection to such matters. 4.Inadditiontotheprecedingtwo(2)paragraphs,themanagementoftheBoardofDirectorsshallbe subject to the Regulations of the Boardof Directors established by the Boardof Directors. Article 20. (Representative Directorsand Executive Directors) 1.The Board ofDirectors shall designate oneor more Representative Directorsby its resolution. 2.TheBoardofDirectorsmayappointoneChairmanoftheBoard,onePresidentandoneormoreVice Chairmen of the Board and Executive Vice Presidentsby its resolution. Article 21. (Honorary Chairmen and Senior Advisors) The Board of Directors may appoint Honorary Chairmenand Senior Advisors by its resolution. Article 22. (Exemption from Liabilityof Directors) InaccordancewiththeprovisionsofArticle426,Paragraph1oftheCompaniesAct,theCorporationmay, by aresolutionofthe BoardofDirectors,exempt Directors(includingformerDirectors)fromliabilitiesprovided for in Article 423, Paragraph 1 of theCompanies Act within the limits stipulatedby laws and regulations. Article 23. (Limited LiabilityAgreement with members of theBoard of Directors) InaccordancewiththeprovisionsofArticle427,Paragraph1oftheCompaniesAct,theCorporationmay enterintoanagreementwithMembersoftheBoardofDirectors(excludingExecutiveMembersoftheBoardof Directors,etc.)limitingliabilitiesprovidedforinArticle423,Paragraph1oftheCompaniesAct;provided, however, that thelimit of theliability underthe agreementshall be theminimum amountof liability stipulatedby laws and regulations. CHAPTER V. AUDIT & SUPERVISORYBOARD MEMBERS AND AUDIT & SUPERVISORY BOARD Article24.(EstablishmentofAudit&SupervisoryBoardMembersandNumberofAudit&SupervisoryBoard Members) The Corporation shall have no more than seven(7) Audit & Supervisory Board Members. Article 25. (Election of Audit & SupervisoryBoard Members) 1.Audit&SupervisoryBoardMembersshallbeelectedbyaresolutionofageneralmeetingof shareholders. 2.AresolutionfortheelectionofAudit&SupervisoryBoardMembersshallbeadoptedbyamajority voteoftheshareholderspresentatthemeetingwhoholdsharesrepresentinginaggregatenotlessthanone-third (1/3) of the voting rights of allthe shareholders who are entitledto vote. Article 26. (Term of Office of Audit& Supervisory Board Members) 1.ThetermofofficeofAudit&SupervisoryBoardMembersshallexpireattheclosingoftheordinary generalmeetingofshareholderstobeheldforthelastbusinessyearoftheCorporationendingwithinfour (4) years after their election. 2.ThetermofofficeofanyAudit&SupervisoryBoardMemberelectedtofillavacancyshallbethe balance of the term of officeof the Audit & Supervisory Board Memberwhom he/she succeeds. Article 27. (Audit & Supervisory Board) 1.The Corporationshall have an Audit & SupervisoryBoard. 2.NoticeofameetingoftheAudit&SupervisoryBoardshallbedispatchedtoeachAudit &Supervisory BoardMembersatleastthree(3)daysbeforethedateofthemeeting.Incaseofurgency,however,suchperiod may be shortened. 3.Inadditiontotheprovisionsoftheprecedingparagraph,themanagementoftheAudit&Supervisory BoardshallbesubjecttotheRegulationsoftheAudit&SupervisoryBoardestablishedbytheAudit& Supervisory Board. Article 28. (Full-time Audit &Supervisory Board Member) TheAudit&SupervisoryBoardshall,byitsresolution,selectoneormorefull-timeAudit&Supervisory Board Members. Article 29. (Exemption from Liabilityof Audit & Supervisory Board Members) InaccordancewiththeprovisionsofArticle426,Paragraph1oftheCompaniesAct,theCorporationmay, byaresolutionoftheBoardofDirectors,exemptAudit&SupervisoryBoardMembers(includingformer Audit &SupervisoryBoardMembers)fromliabilitiesprovided forinArticle423, Paragraph1ofthe Companies Act within the limits stipulatedby laws and regulations. Article 30. (Limited LiabilityAgreement with Audit & Supervisory Board Members) InaccordancewiththeprovisionsofArticle427,Paragraph1oftheCompaniesAct,theCorporationmay enter into anagreement with Audit& Supervisory Board Memberslimiting liabilitiesprovided for in Article423, Paragraph1oftheCompaniesAct;provided,however,thatthelimitoftheliabilityundertheagreementshallbe the minimum amount of liabilitystipulated by laws and regulations. CHAPTER VI. ACCOUNTINGAUDITOR Article 31. (Accounting Auditor) The Corporation shall have an Accounting Auditor ( kaikeikansa-nin ). CHAPTER VII. ACCOUNTS Article 32. (Business Year) ThebusinessyearoftheCorporationshallbeone(1)yearfromApril1ofeachyearuntilMarch31ofthe following year. Article 33. (Dividends from Surplus, etc.) 1.Dividendsfrom Surplusof the Corporationshall be paid to the shareholdersor registered share pledgees entered or recorded in the finalregister of shareholdersas of March 31 of each year. 2.TheCorporationmay,byaresolutionoftheBoardofDirectors,distributedividendsfromsurplusas providedforinArticle454,Paragraph5oftheCompaniesActtotheshareholdersorregisteredsharepledgees entered or recorded in the finalregister of shareholdersas of September 30 of each year. 3.Inadditiontotheprecedingtwo(2)paragraphs,theCorporationmay,byaresolutionoftheBoardof Directors, decide on mattersprovided for in each Item of Article459, Paragraph 1 of the Companies Act. 4.No interestshall be paid on unpaid dividendsfrom surplus. Article 34. (Dispensation from Paymentof Dividends from Surplus, etc.) Inthecasewherethedividendsfromsurplusarepaidbycash,theCorporationshallnotbeobligedtopay any dividends from surplus afterthree (3) years have expired fromthe date of tender thereof. (Supplementary Provisions) Article1.ThedeletionoftheArticle15.(DeemedDeliveryofReferenceDocuments,etc.forGeneral MeetingofShareholders)ofthecurrentArticlesofIncorporationandtheestablishmentoftheproposed Article15.(MeasuresforElectronicProvisionofInformation,etc.)shallcomeintoeffectasofSeptember1, 2022,thedateofenforcementoftheamendedprovisionsstipulatedintheprovisotoArticle1ofthe supplementary provisionsofthe ActPartially Amendingthe CompaniesAct (Act No. 70of 2019) (the“Effective Date”). Article2.Notwithstandingtheprovisionsoftheprecedingparagraph,Article15.oftheArticlesof Incorporationbeforetheamendment shallremaininforcewith respecttoageneral meetingofshareholderstobe held on a date within six months fromthe Effective Date. Article3.ThesesupplementaryprovisionsshallbedeletedafterthelapseofsixmonthsfromtheEffective DateorthreemonthsaftertheGeneralMeetingofShareholdersmentionedintheprecedingparagraph, whichever is later. Exhibit1.2 For reference purpose only (TRANSLATION) REGULATIONSOF THEBOARDOFDIRECTORS OF TOYOTAMOTORCORPORATION Established: February 27, 1952 As last amended on June 1, 2022 (Aa004-28) Article1.(RegulationsoftheBoardofDirectors) Exceptasprovidedforinlaws,ordinancesortheArticlesofIncorporation,mattersrelatingtotheBoardof DirectorsofToyotaMotorCorporation(the“Company”)shallbegovernedbytheprovisionsofthese Regulations. Article2.(PurposeandComposition) 1.TheBoardofDirectorsshallbecomposedofalltheMembersoftheBoardofDirectorsandshallmake decisionsontheexecutionofbusiness,supervisetheexecutionofthedutiesofMembersoftheBoardof Directors, and designate and dismissthe Representative Directors. 2.Audit&SupervisoryBoardMembersshallbepresentand,whenevernecessary,givetheiropinionsata meeting of the Board of Directors. 3.TheBoardofDirectorsisabletorequestOperatingOfficersandothermembersadmittedbytheChairman tobepresentandgiveexplanationorcomment.However,OperatingOfficersandothermembersadmitted by the Chairman are not able to participatein resolutions. Article3.(PersontoConveneMeetingandNoticeofMeeting) 1.AmeetingoftheBoardofDirectorsshallbeconvenedbytheChairmanoftheBoardofDirectorsorthe President,MemberoftheBoardofDirectors.IntheeventthatthepositionsofboththeChairmanofthe BoardofDirectorsandthePresident,MemberoftheBoardofDirectorsarevacantorthatbothofthemare prevented fromconvening, suchmeetingshall beconvened bythe ViceChairman ofthe Boardof Directors, orotherMembersoftheBoardofDirectorsinthatorderandaccordingtotheirrank,iftherearemultiple persons holding the same position. 2.NoticeofconveningameetingoftheBoardofDirectorsshallbedispatchedtoeachMemberoftheBoard ofDirectorsandeachAudit&SupervisoryBoardMemberatleastthree(3)daysbeforethedateofthe meeting. In the case of urgency, however,such period may be shortened. 3.AmeetingoftheBoardofDirectorsmaybeheldwithoutfollowingtheconveningprocedure,ifconsented to by all the Members of the Board ofDirectors and the Audit & Supervisory BoardMembers. Article4.(ChairmanshipandMethodofAdoptingResolutions) 1.TheChairmanof theBoard ofDirectorsorthe President,Memberof theBoardofDirectorsshallpresideas chairmanatameetingoftheBoardofDirectors.IntheeventthatthepositionsofboththeChairmanofthe BoardofDirectorsandthePresident,MemberoftheBoardofDirectorsarevacantorthatbothofthemare prevented fromso presidingas chairman,theVice Chairman ofthe Board of Directors,or otherMembers of theBoardofDirectors,shallpresideaschairmaninthatorderandaccordingtotheirrankinthecasethat there are multiple personsholding the same position. 2.ResolutionsoftheBoardofDirectorsshallbeadoptedatmeetingsatwhichamajorityoftheMembersof theBoardofDirectorswhoareentitledtovoteshallbepresent,byamajorityoftheMembersoftheBoard of Directors so present. 3.Withrespecttomatterstoberesolvedby theBoardofDirectors,theCompanyshalldeemthatsuchmatters wereapprovedbyaresolutionoftheBoardofDirectorswhenalltheMembersoftheBoardofDirectors expresstheiragreementinwritingorbyelectronicrecords.Provided,however,thatthisprovisionshallnot apply when any Audit & Supervisory Board Member expresseshis/her objection to suchmatters. 4.WithrespecttomatterstobereportedtotheBoardofDirectors,MembersoftheBoardofDirectors, Audit &SupervisoryBoardMembersorAccounting Auditorsshallnotbe requiredtoreportsuch mattersto theBoardofDirectorswhensuchmattersarenotifiedtoalltheMembersoftheBoardofDirectorsand Audit & Supervisory Board Members. Article5.(MatterstobeResolved) The following matters shall be subjectto the resolution of theBoard of Directors: (1)Mattersprovided for in the Corporation Act or otherlaws or ordinances; (2)Mattersprovided for in the Articles of Incorporation; (3)Mattersdelegated to the Board of Directorsby resolution of a general meetingof shareholders; and (4)Other importantmanagerial matters. Article6.(MatterstoBeReported) Members of the Board of Directorsshall report to the Board of Directorson the following matters: (1)StateofexecutionofbusinessandsuchothermattersasareprovidedforintheCorporationActor other laws or ordinances; and (2)Such other mattersas the Board of Directors maydeem necessary. Article7.(MeetingsandMinutes) 1.AmeetingoftheBoardofDirectorsshallbeheldinJapanese,minutesshallbepreparedeachtimea meetingoftheBoardofDirectorsisheldandsuchminutesshallbekeptonfileattheheadofficeforten years. 2.MinutesshallsetforthmattersprovidedforinthelawsorordinancesandtheMembersoftheBoardof Directors and Audit & Supervisory Board Memberspresent shall sign or affixtheir names and seals thereto. 3.Minutesshall be prepared in Japanese. SupplementaryProvisions Article1.(EffectiveDate) These Regulations shall become effectiveas of June 1, 2022. Article2.(AmendmenttoRegulations) Any amendment to these Regulations shallbe made by a resolution of the Board ofDirectors. ![]() MATTERSTOBESUBMITTEDTOTHEBOARDOFDIRECTORS GeneralRulesofthe“MattersToBeSubmittedToTheBoardofDirectors”(this“List”) 1.PursuanttoArticle5(1),(2)and(3)oftheRegulationsoftheBoardofDirectors,mattersanditemsdefined in I-1, 2 and 3 of this List shall, withoutfail, be submitted to theBoard of Directors. 2.Inaddition,pursuanttoArticle5(4)oftheRegulationsoftheBoardofDirectors,formattersanditems definedinI-4ofthisList,materialitymustbeappropriatelyjudgedandmattersmustbesubmitted accordingly to the Board of Directors. 3.MaterialityshallbedeterminedbytheExecutive(s)andExecutiveGeneralManager(s)responsiblefortheir divisions\*takingintoconsideration“submissionstandards,”“specialrules,”“definitions”and “explanations”inthisList.Iftheamountoftransactiondoesnotmeetthesubmissionstandardsatfirst,but thereoccursapossibilitythatitmayexceedsuchstandardslateron,suchtransactionshallbesubmittedto the Board of Directors at the timesuch possibility arises. Evenifaproposaldoesnotmeetthemonetarystandards,formatterswithhighuncertaintyininvestment recovery,potentialsignificantlosses,highgeopoliticalrisks,orhighreputationrisks,etc.,materialityshall be appropriately judged based on such risks. 4.PursuanttoArticle6oftheRegulationsoftheBoardofDirectors,mattersanditemsdefinedinIIofthis List shall be reported to the Boardof Directors without delay. \*BusinessUnit/CompanyPresidentorExecutiveVicePresident,orChiefOfficer/ChiefExecutiveOfficer orDeputyChiefOfficer(TMCExecutives’meeting:Chairmanofapplicablemeetings/Divisionsnot belonging to a group: Operating Officeror KANBUSHOKU responsible for an applicable division) Standardforre-submission IfmaterialchangesaremadetoamatterpreviouslysubmittedtotheBoardofDirectors(suchas20%or moreofincreaseintheamountapprovedbytheBoardofDirectors),suchmattershallbere-submittedtothe Board of Directors. I.MatterstobeResolved: 1.Mattersprovided for in the Companies Act orother laws or ordinances: ClassificationsItemsRelevantArticlesofApplicableLaw Shares; stock acquisition rights:Fixing the record dateArticle 124 Acquisition of the Company’s own shares held by its subsidiaries Article 163 Cancellation of the Company’s own sharesArticle 178 Share-splitsArticle 183 Free Allotment of sharesArticle 186 Reduction of the number of shares constituting one unit ( tangen ) of shares or abolitionof the provisions which define such number Article 195 Auction of shares held by shareholderswhose whereabouts are unknown Article 197 ![]() ClassificationsItemsRelevantArticlesofApplicableLaw Issuance of new sharesArticle 201 Disposition of the Company’s own sharesArticle201 Approval of undertaking a contract forthe total number of shares of subscriptionor similar ones with transfer restrictions Articles 205 and 244 Issuance of stock acquisition rightsArticle 240 Approval of transferring stock acquisitionrights with transfer restrictions Article 265 Acquisition of stock acquisitionrights with acquisition clause Articles 273 and 274 Cancellation of stock acquisitionrightsArticle 276 General meetings of shareholders:Free Allotmentof stock acquisition rightsArticle 278 Convening of a general meeting of shareholdersArticle 298 Board of Directors, Members of the Board of Directors:Designation and dismissal of Representative Directors Article 362 Approval of Members of the Board of Directors’ competing transactions Article 365 Approval of Members of the Board of Directors’ transactions for their own account Article 365 Approval of Members of the Board of Directors’ transactions involving conflictof interests Article 365 Accounts:Approval of financial statements,business reports and the accompanying detailed statements Article 436 Approval of extraordinary financialstatementsArticle 441 Approval of consolidated financialstatementsArticle 444 Reduction in the amount of capital(with conditions) Article 447 Reduction in the amount of reserves(with conditions) Article 448 Bonds:Offeringof bondsArticle 362 Issuance of bonds with stock acquisitionrightsArticle 240 Others:Dispositionandacquisitionofimportant property \*1 Article 362 Borrowing of a large amount of moneyArticle 362 Appointmentandremovalofmanagersand other important employees Article 362 ![]() ClassificationsItemsRelevantArticlesofApplicableLaw Establishment,alterationand abolitionof branch offices and other importantorganizations Article 362 Developmentofasystemtoensurethe appropriatenessofbusinessoperationsofthe Companyandbusinessgroupconsistingofthe parent company and subsidiaries Article 362 Other important business executionArticle 362 2.Mattersprovided for in the Articlesof Incorporation: ClassificationsItems RelevantArticles oftheArticlesof Incorporation Shares:Acquisitionof Company’s own sharesArticles 7 Selection ofregistrationagentand itslocationof business Article 9 Amendment to the Share Handling RegulationsArticle 10 General meeting of shareholders:Theorderinwhichtoassumechairmanshipofa general meeting of shareholders Article 13 Board of Directors; Members of the Board of Directors:DesignationanddismissalofMembersofthe Board of Directors with specific titles Article 20 AmendmenttotheRegulationsoftheBoardof Directors Article 19 ExemptionofMembersoftheBoardof Directors from their liabilities Article 22 Audit & Supervisory Board Members:ExemptionofAudit&SupervisoryBoard Members from their liabilities Article 29 Accounts:Distribution of interimdividends from surplusArticle 33 Reduction in the amount of reservesArticle 33 Other disposition of surplusArticle 33 Distribution of dividends fromsurplusArticle 33 Others:AppointmentofHonoraryChairmanandSenior Advisor Article 21 3.Mattersdelegated to the Board of Directorsby resolution of a general meetingof shareholders: ClassificationsItems Shares:Acquisitionof Company’s own shares Issuance of new shares or stock acquisitionrights on favorable conditions Others:Other mattersdelegated to the Board of Directors ![]() 4.Other importantmanagerial matters: ClassificationsItems Management:Business Plan (profitplanning, Hoshin Guideline, etc.) Important business alliancesand important joint ventures Launching of new projects Short-form and simplifiedcorporate splits Short-form and simplifiedshare exchanges Simplified acquisition ofan entire business of another company Approval of interim and quarterlyaccounts Approval of consolidated accounts (includinginterim and quarterlyaccounts) Decision on filing a lawsuit or an appeal,or closing an important dispute Other important matters Personnel affairs; organization: Assumption of office of executivesin other companies (excluding thecompany’s subsidiaries, in the case of new officesin listed companies only)by Members of the Board of Directors (excluding Outside Membersof the Board of Directors), Operating Officers, and the head of group,in-house company and any other organization similar thereto Assumption of office of executivesin important associations(in the case of new offices only) by Members of theBoard of Directors (excluding Outside Membersof the Board of Directors), Operating Officers,and the head of group, in-house company and any other organization similarthereto Appointment and removal of assignmentof Members of the Board of Directorsand Operating Officers to take chargeof the head of group, in-house company and any other organization similarthereto Treatment and discipline relatingto Members of the Board of Directorsand Operating Officers Appointment and removal of Operating Officers Appointment and removal of Senior TechnicalExecutive ( gikan ) and Advisor ( komon ) Approval of Operating Officers’ competingtransactions Approval of Operating Officers’ transactionsfor their own account Approval of Operating Officers’ transactionsinvolving conflictof interests Changes in important working conditions Other important matters Production; Sales; Technology development:Long-term or annual production, shipmentor sales plans Long-term or annual equipment plans Licensing, acquisition or transferof important intellectualproperty rights Other important matters ![]() ClassificationsItems Group management:Incorporation, dissolution, acquisition and transferof subsidiaries Important group managerialmatters Other important matters Others:Other importantmanagerial matters (For matters with high uncertaintyin investment recovery, potentialsignificant losses, high geopolitical risks, or highreputation risks, etc., materialityshall be appropriately judged based on such risks) II.Matterstobereported: ItemsRelevantArticlesofApplicableLaw State of execution of businessArticle 363 Important facts about a competingtransactionArticle 365 ImportantfactsaboutanyMemberoftheBoardof Director’s transactions forhis/her own accounts Article 365 Importantfactsaboutanytransactionsinvolvingconflict of interests Article 365 Monthly production/shipment/salesresults— Important matters,suchas incorporationof subsidiariesby a joint venture company — Managementstatusofasystemtoensuretheappropriateness ofbusinessoperationsoftheCompanyandbusinessgroup consisting of the parent company and subsidiaries Article 362 Other important matters— Appendix1 ItemsStandard (1)Disposition and acquisitionof important property: 1Acquisitionanddispositionoflandand leaseholds 50,000,000,000 Yen or more per transaction 2Investments(excludingfundmanagement investments) 50,000,000,000 Yen or more per transaction 3Capitalexpenditure(excludingmodelchange and renewal of aging assets) 50,000,000,000 Yen or more per transaction 4Loans(excludingrenewalofbillsandnotes, and loans as part of financialbusiness) 50,000,000,000 Yen or more per transaction, or loans outstanding of 50,000,000,000 Yen or more per company 5Discharge of debts200,000,000 Yen or more per transaction ![]() ItemsStandard 6Donations(excludingthoseviaJapan Automobile Manufacturers Association,Inc.) 2,000,000,000 Yen or more per transaction However, important matters willbe submitted, even if the amount for a new case or singlecase is less than 2,000,000,000 Yen (2)Disposition and acquisitionof important property:Importantmatters will be submittedat the initial phase (overview, the maximum amountof money, etc.). Deliberate a project as a whole. Multipleyear appropriation is allowed if necessary (Report is required) (3)Borrowings of largeamounts of money: 1Borrowing50,000,000,000 Yen or more per transaction 2Guarantee of obligationsAll transactions (4)Appointmentandremovalofmanagersandother important employees: Promotion to Senior General Manager andabove, as well as appointment or removalof the head of group, in-house company, and any other organizations similar thereto Appointment of operating officersat membership companies (limited liabilitycompany, etc.) and limited liability partnerships,and removal of operating officers at such companies (5)Establishment,alterationandabolitionofbranch offices and other importantorganizations: Establishment, alterationand abolition of group, in-house company, plant and any other organizations similar thereto (\*1)Acquisition and disposition of land and leaseholds Inthecasewhereanyoftheacquisitionprice,bookvalue,ortransactionpriceis50,000,000,000Yenor more per transaction, a submissionshall be required. However,inthecasethattheacquisitionoccursforthepurposeotherthanbusiness,asubmissionshallbe required, even if the amount isless than 50,000,000,000 Yen. (\*2)Definition of “leaseholds” “Leasehold”isarightwhichisobtainedbyatemporarypaymentofconcessionmoneyasasetupfeefor leasehold, when leasing land for the purposeof owning buildings (excluding parkingspace, etc.). (\*3)Specialrulesregarding“membershipcompanies(limitedliabilitycompany,etc.)andlimitedliability partnerships” (I)Anoverallbusinessplanmustbesubmittedwhenamembershipcompany(LLC,etc.)andLLPis established or investment isnewly made. (II)IfmaterialchangesaremadetoabusinessplanpreviouslysubmittedtoaBoardofDirectorsmeeting, such matters shall be re-submittedto a Board of Directors meeting. ![]() Appendix2 ItemsStandard (1)BusinessPlan(profitplanning,HoshinGuideline, etc.): 1Definition of “Business Plan” (1)“Business Plan”Short-termprofitplanning(revenue,capital expenditure,R&Dcost,etc.),SalesandProduction Plan,(initialannualplan,etc.),Mid-temprofit planning, Vision, etc. (2)“Hoshin Guideline”Hoshin Guideline (if revised) (2)Importantbusinessalliancesandimportantjoint ventures: 1Definitionof“businessalliance”and“joint venture” (1)“usiness alliance”“Businessalliance”shallbeusedwhenbusinesses suchassalestie-up,continuousprovisionof products,acceptance/entrustmentofproduction,joint production,jointdevelopment,ortechnology licensing,etc.,arecommencedorterminated,or materialchangeswithrespecttothesebusinessesare made (2)“Joint venture”“Jointventure”shallbeusedwhenToyotaMotor Corporation(TMC)andabusinesspartnerorits subsidiarymakejointinvestmenttoestablishor acquireajointventurecompanyandhavesuchjoint venture companyconductbusinesses forthe purposes of the subject joint venture 2Materialitystandardsfor“Importantbusiness alliances and important jointventures” \*1 (1)Monetary standardIncaseTMCplanstospend50,000,000,000Yenor moreintotalforloanandinvestment,capital expenditures, etc. at the beginningof the plan (2)QualitativestandardIncasethesubjectbusinessallianceorjointventure (includingwithadominantcompetitor)may materiallyaffectTMC’smanagementintermsof sales, profits, etc. (3)Launching of new projects: 1Definition of “Launching of new projects”UsedwhenTMClaunchesabusinessnotrelatingto itsexistingbusinessareas(suchasautomobiles, industrialvehicles,housing,informationand telecommunication,boatsandships,airplanes, biotechnology or financial businesses) ![]() ItemsStandard OtherthanlaunchofbusinessbyTMCitself,launch ofbusinessthroughbusinessallianceorthroughits subsidiaryorjointventurecompany(excluding companiesinwhichTMCinvestswithoutbeing requiredtoincludesuchcompanies’operatingresults initsconsolidatedfinancialstatementspursuantto theFinancialInstrumentsandExchangeAct)shall also be considered as “launching of new projects” (4)Decisionon filingalawsuit oran appeal,or closing an important dispute \*2 : 1Monetary standardIncasethatvalueofsubjects(amountTMCsuesfor oramounttobebornebyTMC \*3 )is10,000,000,000 Yen or more 2Qualitative standard Incaseoflegalactionssuchasfilingoflegalactionwith respecttoimportantintellectualpropertyrightsordispute withapublicentitywithrespecttoenvironmentalissues, whichmaymateriallyaffectTMC’smanagement, business, rights or brand image, etc. (\*1)Materiality standards for “important businessalliances and importantjoint ventures” If abusinessallianceor jointventurefallsundereither the“Monetarystandard” or“Qualitativestandard”, it shall be submitted to the Board ofDirectors. (\*2)Materiality standards for “Decision on filinga lawsuit or an appeal, or closing an importantdispute” Ifacasefallsundereither“Monetarystandard”or“Qualitativestandard”,itshallbesubmittedtotheBoard of Directors. Appendix3 ItemsStandard (1)Materialitystandardsfor“Assumptionofofficesof andresignationfromadirector’spositionin important associations”: IncasethatMembersoftheBoardofDirectorsor OperatingOfficersofTMCassumeorresignfroma positionsuchaschairman,boardchairman, committeechairman,etc.ofJapanBusiness Federation,TheJapanChamberofCommerceand Industry,JapanAssociationofCorporateExecutives, JapanAutomobileManufacturerAssociation, Counselofgovernmentauthoritiesorotherimportant associations comparable to theseassociations (2)Materialitystandardsfor“Changesinimportant working conditions”: Incasethatcertainactionssuchaschangesin workingconditionswithrespecttoemployment which maymateriallyaffectTMC’s managementand employees ![]() Appendix4 Materiality standard for“licensing, acquisition or transferof important intellectualproperty rights” CertainactionssuchaslicensingofintellectualpropertyrightsrelatingtoTMC’sessentialtechnologiesor transferofTMC’strademark,whichmaymateriallyaffectTMC’smanagement,suchlicensing,transferor acquisition shall be deemed material. Appendix5 ItemsStandard (1)Incorporation,dissolution,acquisitionandtransfer of subsidiaries: 1Definitionof“Incorporation,dissolution, acquisition and transfer ofsubsidiaries” (1)“Subsidiary”AjointstockcompanyofwhichTMCholdsa majorityofitsvotingrights,orothercompanies judgedtobeasubsidiaryofTMCpursuantto Article3oftheImplementationRulesofthe CompaniesAct(includingamembershipcompany suchasalimitedliabilitycompany,apartnership, any other business entities similarthereto) (2)“Incorporation”Used when a subsidiary is established (3)“Dissolution”Used when a subsidiary is dissolved (4)“Acquisition”Usedwhenasubsidiaryisobtainedthrough,for example,acquisitionofshares(excludingcases which fall under incorporation) (5)“Transfer”Usedwhenacompanylosesitsstatusasasubsidiary ofTMCthrough,forexample,TMC’ssaleofshares ofthesubsidiary(excludingcaseswhichfallunder dissolution) (2)Importantgroup managerial matters: Matterswillbesubmittedinaccordancewiththecompany’ssubmissionstandardincaseswherebusiness operationofsubsidiariesmayhaveagreatinfluenceonthecompany’sgroupmanagementorreputation. Suchcasesinclude“Dispositionandacquisitionofimportantproperty”,“Borrowingsofalargeamountof money”, “Business alliances and jointventures” and “Launching of new projects.” However,suchsubmissionmaybeomitted,inthecasewheresubmissionofamatterisaformality,the mattervirtuallyrequiresnomanagerialdecision(transferofland/equipmentconductedbetweenwholly owned subsidiaries etc.) and the matteris judged not to have materiality. ![]() Appendix6 ItemsStandard (1)Report of the executionstatus of business:Improvecontentsofreporttothesupervisionside whileenhancingthedecision-makingprocessby operating officers (1)Progressofimportantinvestmentinnew businessesandrisktakingstatusshallbereportedas appropriate (2)Asforreportbyin-housecompany/region,the annualplanswillbeconfirmedintheHoshin Guideline.Asforotherorganizations,reportwillbe madebyproject(OutsideBoardMemberMeeting can be utilized) (3)Progressofinitiativesforimportantstrategy/ mid-tolong-termchallengesshallbereportedas appropriate(e.g.,mattersrelatedtosustainability, corporate governance, and risk management,etc.) ![]() Exhibit2.5 DESCRIPTIONOFTHEAMERICANDEPOSITARYSHARES ThetermsoftheAmericanDepositaryShares,orADSs,arecontainedintheamendedandrestateddeposit agreementdatedasof September21,2021amongToyota MotorCorporation,orToyota, TheBank ofNewYork Mellon,asdepositary,andOwnersandHolders(asdefinedbelow).Theprincipalexecutiveofficeofthe depositary is located at 240 GreenwichStreet, New York, New York 10286. EachADSrepresentsanownershipinterestintensharesofToyota’scommonstock,whichsharesareheld withacustodianforthedepositary,currentlySumitomoMitsuiBankingCorporation.ADSsmaybecertificated securitiesevidencedbyAmericanDepositaryReceipts,orADRs,oruncertificatedsecurities.Subjecttothe conditions set forth in “— Limitationson Delivery, Registrationof Transfer and Surrender of ADSs”: •ADSsevidencedbyADRs,whentheADRsareproperlyendorsedoraccompaniedbyproper instrumentsoftransfer,willbetransferableascertificatedregisteredsecuritiesunderthelawsofthe State of New York; and •ADSsnotevidencedbyADRswillbetransferableasuncertificatedregisteredsecuritiesunderthelaws of the State of New York. The followingis a summaryofthe materialprovisionsof thedeposit agreement,andthus it doesnot contain allinformationthatmayberelevanttoOwnersandHolders.Investorsshouldreadtheentiredepositagreement (includingtheformofADR)forcompleteinformation.Toyotahasfiledacopyoftheformofdepositagreement asanexhibittoToyota’sannualreportonForm20-F,whichcanbeaccessedontheSEC’swebsite (https://www.sec.gov). Capitalized termsused but not defined have the meaningsstated in the deposit agreement. OwnersandHolders “Owner”meansthepersoninwhosenameADSsareregisteredonthebooksofthedepositarymaintained for thatpurpose.“Holder”meansanypersonholdinganADR orasecurityentitlementor otherinterestinADSs, whetherforitsownaccountorfortheaccountofanotherperson,butthatisnottheOwnerofthatADRorthose ADSs. Thedepositary,notwithstandinganynoticetothecontrary,maytreattheOwnerofADSsastheabsolute owner thereof forthe purpose ofdetermining theperson entitledto distribution ofdividends or other distributions ortoanynoticeprovidedforinthedepositagreementandforallotherpurposes,andneitherthedepositarynor Toyota willhaveany obligationorbe subjecttoanyliabilityunder thedepositagreementtoany HolderofADSs (but only to the Owner of those ADSs). DepositofSharesandDeliveryofADSs SharesofToyotacommonstock,orthe“Shares,”depositedwiththecustodianmustbeaccompaniedby documents specifiedinthedepositagreement.The custodianwillhold alldepositedSharesforthe accountof the depositary.OwnersandHoldersthushavenodirectownershipinterestintheSharesandarenotentitledtothe rights ofholdersofShares. Ownersand Holders onlyhave thoserightsas arecontained inthe depositagreement. Thecustodianwillalsoholdanyadditionalsecurities,propertyandcashreceivedonorinsubstitutionforthe deposited Shares. The deposited Shares and any additionalitems are referredto as deposited securities. UponeachdepositofShares,receiptofrelateddeliverydocumentationandcompliancewiththeother provisions ofthedepositagreement,including thepaymentofall fees,expenses, taxesand governmentalcharges thatmayapply,thedepositarywilldelivertoorupontheorderofthepersonorpersonsentitledtheretothe numberofADSsissuableinrespectofthatdeposit.However,thedepositarywilldeliveronlywholenumbersof ADSs. SurrenderofADSsandWithdrawalofDepositedSecurities Subjecttothetermsandconditionsofthedepositagreement,Ownersareentitledtodelivery(totheextent deliverycanthenbelawfullyandpracticablybemade)ofthedepositedsecuritiesunderlyingtheADSsupon surrenderofADSstothedepositarywithdeliveryinstructionsforthedepositedsecurities.Inaddition,Owners mustpayallfees,expenses,taxesandgovernmentalchargesthatmayapply.Uponsatisfactionoftheapplicable requirements, thedepositarywill directthecustodian todeliver tothe surrenderingOwneror to orupon the order of the personorpersons designatedin thedeliveryinstructions, theamountof depositedsecuritiesrepresented by the surrendered ADSs. DividendsandOtherDistributionsonDepositedSecurities Toyotamaymakevarioustypesofdistributionswithrespecttothedepositedsecurities.Thedepositarywill take the following actions with respectto such distributions. Cash The depositarywill convertcashdividendsorothercashdistributionsfrom foreigncurrency toU.S.dollars, if thiscan bedone on areasonablebasis, andpromptly distributetheamount thusreceivedto theOwners entitled to it. If thedepositary determinesthatthe foreigncurrencyit receivedis not convertibleon a reasonablebasis, the depositarymayeitherdistributetheforeigncurrencyreceivedto,orholdtheforeigncurrencyitcannotconvert fortherespectiveaccountsof,theOwnersentitledtoreceivethem.Thedepositarywillnotinvesttheforeign currencyanditwillnotbeliableforinterest.Iftheexchangeratesfluctuateduringatimewhenthedepositary cannot convert the foreign currency,you may lose some or all of the valueof the distribution. Thedepositarywillendeavortodistributecashinapracticablemanner,andmaydeductanytaxesrequired tobewithheld,itsfees,anyexpensesofconvertingforeigncurrencyandtransferringfundstotheUnitedStates, andotherexpensesandadjustments.ThedepositarywilldistributeonlywholeU.S.dollarsandcentsandwill round fractional cents to thenearest whole cent. Shares InthecaseofadistributioninShares,thedepositarymayexecuteanddeliveradditionalADSstoevidence the numberof ADSs representingthose Shares.Only whole ADSs willbe issued. Any Sharesthat would resultin fractionalADSsmaybesoldandthenetproceedsdistributedtotheOwnersentitledthereto.Ifthedepositary does notdeliveradditionalADSs andSharesor ADSsare notsold,theexisting ADSswillalso representthe new Shares. Rights InthecaseofadistributionofrightstosubscribeforadditionalSharesorothersecurities,thedepositary may, to the extent deemed by it tobe lawful and practical: •ifrequestedbyToyota,granttoallorcertainOwnersrightstoinstructthedepositarytopurchasethe securitiestowhichtherightsrelateanddeliverthosesecuritiesorADSsrepresentingthosesecuritiesto Owners; •if requestedby Toyota, deliver the rightsto or to the order of certainOwners; or •selltherightstotheextentpracticableanddistributethenetproceedsofthatsaletoOwnersentitledto those proceeds. Totheextentrightsarenotexercised,deliveredordisposedofasdescribedabove,thedepositarywill permittherightstolapseunexercised.Inthatcase,youwillreceivenothing.U.S.securitieslawsmayrestrictthe abilityofthedepositarytodistributerightsorADSsorothersecuritiesissuedonexerciseofrightstoallor certain Owners, and the securitiesdistributed may be subject torestrictions on transfer. ToyotahasnoobligationtofilearegistrationstatementundertheSecuritiesActtomakeanyrights available to Owners. Any sale or lapse of rightsmay reduce Owners’ equity interestin Toyota. OtherDistributions Inthecaseofadistributionofsecuritiesorpropertyotherthanthosedescribedabove,thedepositarywill distributesuchsecuritiesorpropertytotheOwnersentitledtotheminanymanneritdeemsequitableand practicable.IfthedepositarybelievesthatsuchdistributioncannotbemadeproportionatelyamongtheOwners entitledtheretooritdeemssuchdistributionnottobelawfulandfeasible,itmayadoptsuchothermethodasit maydeemequitableandpracticableforeffectingthedistribution,includingsellingsuchsecuritiesorproperty and distributing any net proceeds ascash to the Owners entitled thereto. ThedepositarymaychooseanypracticablemethodofdistributionforanyspecificOwner,includingthe distributionofforeigncurrency,securitiesorproperty,oritmayretainsuchitemsonbehalfoftheOwneras depositedsecurities.ThismeansthatyoumaynotreceivethedistributionswemakeonourSharesoranyvalue for them ifit is illegalor impracticalforus to make themavailable toyou. Further, therecan be no assurancethat thedepositarywillbeabletoconvertanycurrencyataspecifiedexchangerateorsellanyproperty,rights, Sharesorothersecuritiesataspecifiedprice,northatanyofthosetransactionscanbecompletedwithina specified time period. RecordDate ThedepositarymayfixarecorddatefordeterminingtheOwnerswhowillbeentitledtoreceive distributions,receivenotices,oractonothermatters.Thisrecorddatewillbeasnearaspracticabletothe corresponding record date set by Toyotawith respect to Shares. VotingofDepositedShares AfterreceivingvotingmaterialsfromToyotaandifToyotarequests,thedepositarywillnotifytheOwners ofanyshareholders’meeting.ThisnoticewilldescribehowtheOwnermayinstructthedepositarytoexercise thevotingrightsfortheSharesrepresentedbytheOwner’sADSs. Ifthedepositaryreceivesinstructionsfroman Owner of ADSson or beforea date setby the depositary,the depositarywill endeavor tothe extent practicableto vote the amountof Shares representedby those ADSs in accordance with suchinstructions. If the depositarydoes notreceiveinstructionsfromanOwnerwithrespecttoamatterandanamountofADSsofthatOwneronor beforethedateestablishedbythedepositaryforthatpurpose,thedepositarywilldeemthatOwnertohave instructedthedepositarytogiveadiscretionaryproxytoapersondesignatedbyToyotatovotethenumberof Shares representedbythatamount ofADSsas tothatmatter.However, nosuchinstructionwill bedeemed given andnosuchdiscretionaryproxywillbegivenwithrespecttoanymatterunlessToyotaprovideswritten confirmationtothedepositarythat(x)itwishessuchaproxytobegiven,(y)itreasonablydoesnotknowofany substantial opposition to the matter,and (z) the proposal isnot materially adverse tothe interests of shareholders. ItispossiblethatOwnerswillnothavetheopportunitytocausethevotingrightspertainingtotheShares representedbytheirADSstobeexercisedaccordingtotheirpreferences.Thedepositarywillnotitselfexercise anyvotingdiscretion.Furthermore,neitherthedepositarynoritsagentsareresponsibleforanyfailuretocarry out any voting instructionswith respectto depositedsecurities, forthe manner inwhich any voteis cast orfor the effectofanyvote.ThismeansthattheremaybenothingyoucandoiftheSharesrepresentedbyyourADSsare not voted as you requested. NoticesandReports If Toyotatakesor decidestotake(i) certaincorporateactions,suchas makingcashor otherdistributions,or grantingrights,ondepositedsecurities,settingarecorddateforavoteorredeeming,replacingorcancelling depositedsecurities,or(ii)anactionthateffectsorwilleffectachangeofthenameorlegalstructureofToyota, orthateffectsorwilleffectachangetotheShares,Toyotamayrequestthatthedepositarydisseminate,as promptlyaspracticableatToyota’sexpense,relatednotices,reportsandcommunicationstoallOwnersor otherwisemakethemavailabletoOwnersinamannerthatToyotaspecifiesassubstantiallyequivalenttothe mannerinwhichthosecommunicationsaremadeavailabletoholdersofSharesandcompliantwiththe requirements of any securitiesexchange on which the ADSs are at such timelisted. InspectionofTransferBooks ThedepositarywillkeeparegisterofallOwnersandoutstandingADSs,whichwillbeopenforinspection by Owners at thedepositary’s office,but only forthe purpose ofcommunicating with Owners regardingToyota’s business or a matter relatedto the deposit agreement orthe ADSs. DisclosureofInterests Whenrequiredinordertocomplywithapplicablelawsandregulationsoritsarticlesofincorporation, ToyotamayfromtimetotimerequesteachOwnerandHoldertoprovidetothedepositary,andeachOwnerand Holder agrees to provide and consents to thedisclosure of, informationrelating to: •the capacityin which it holds ADSs; •theidentityofanyHoldersorotherpersonsorentitiesthenorpreviouslyinterestedinthoseADSsand the nature of those interests;and •any othermatter where disclosure of suchmatter is required forthat compliance. TenderandExchangeOffers;Redemption,ReplacementorCancellationofDepositedSecurities Thedepositarywillnottenderdepositedsecuritiesinanyvoluntarytenderorexchangeofferunless instructedtodosobyanOwnersurrenderingADSsandsubjecttoanyconditionsorproceduresthedepositary may establish. Ifdepositedsecuritiesareredeemedforcashinatransactionthatismandatoryandbindingonthe depositaryasaholderofdepositedsecurities,thedepositarywillcallforsurrenderofacorrespondingnumberof ADSsonaproratabasisanddistributethenetredemptionmoneytotheOwnersofcalledADSsuponsurrender of those ADSs. If thereis anychange inthe depositedsecuritiessuch as asubdivision, combinationor other reclassification, or anymerger,consolidation,recapitalizationor reorganizationaffectingToyotainwhich thedepositaryreceives newsecuritiesorotherpropertyinexchangefororinlieuoftheolddepositedsecurities(a“replacement”),the depositarywillholdsuchnewsecuritiesorotherpropertyasdepositedsecuritiesunderthedepositagreement. However,ifthedepositarydecidesitwouldnotbelawfulorpracticaltoholdsuchnewdepositedsecurities becausethosenewdepositedsecuritiescould notbedistributedtoOwnersorforanyotherreason,thedepositary may instead sell the new depositedsecurities and distributethe net proceeds upon surrender of theADSs. If there isa replacementand the depositarywill continue tohold the new depositedsecurities, thedepositary maycallforthesurrenderofoutstandingADRstobeexchangedfornewADRsspecificallydescribingthenew depositedsecuritiesandthenumberofnewdepositedsecuritiesrepresentedbyeachADS.Ifthenumberof SharesrepresentedbyeachADSdecreasesasaresultofareplacement,thedepositarymaycallforsurrenderof theADSstobeexchangedforalessernumberofADSsandmaysellADSstotheextentnecessarytoavoid distributingfractionsofADSs inthatexchangeand distributethenetproceedsofthatsaletothe Ownersentitled to them. AmendmentandTerminationofDepositAgreement Toyotaandthedepositarymayjointlyamendthedepositagreement,andbysodoing,therightsofOwners. TheOwnersmustbegivenatleast30days’noticeofanyamendmentthatimposesorincreasesanyfeesor charges(exceptfortaxesandotherchargesspecificallypayablebyOwnersunderthedepositagreement),orthat wouldotherwiseprejudiceanysubstantialexistingrightofOwners.EveryOwnerandHolder,atthetimeany amendmentso becomeseffective,willbe deemed,bycontinuingtoholdADSs oranyinteresttherein,to consent and agreetothat amendmentandtobe boundby thedepositagreementas amendedthereby. Noamendment may impair any Owner’sright to surrenderADSs and receivedelivery of thedeposited securities representedby them, except to comply with requirementsof law. Toyotamayinitiateterminationofthedepositagreementbynoticetothedepositary.Thedepositarymay initiateterminationofthedepositagreementif(i)60dayshaveexpiredafteritdeliveredtoToyotaaresignation noticeandasuccessordepositaryhasnotaccepteditsappointment,or(ii)certaineventshaveoccurred,suchas certaininsolvencyeventsrelatingto Toyota,certaindelistingevents relatingto theSharesorADSs,distributions thatrepresentareturnofsubstantiallyallthevalueofthedepositedsecurities,therebeingnodeposited securities,orthedepositedsecuritiesbecomingbecomeapparentlyworthless.Ifterminationofthedeposit agreementisinitiated,thedepositarywillterminatethedepositagreementbyprovidingatleast90days’prior notice to all Owners. Atanytimeaftertheterminationdate,thedepositarymaysellthedepositedsecuritiesthenheldandhold thenetproceedsfromthosesales,uninvested,unsegregatedandwithoutliabilityforinterest,fortheprorata benefitoftheOwnersofADSsthatremainoutstanding.Aftermakingthesale,thedepositarywillhaveno obligationsexcepttoaccountforthoseproceedsandothercashandasdescribedinthe followingsentence.After theterminationdate,thedepositarywillcontinuetoreceivedistributionsondepositedsecurities(thathavenot beensold),maysellrightsandotherpropertyasprovidedinthedepositagreement,anddeliverdeposited securities(orsaleproceeds)uponsurrenderofADSs(afterpaymentorupondeductionoffees,expenses,taxes and governmental charges) to Owners who surrendertheir ADSs. After the termination date: •the depositarywill not accept depositsof Shares or deliver ADSs; •thedepositarymayrefusetoacceptsurrendersofADSsforthepurposeofwithdrawalofdeposited securities (that have not beensold); •thedepositarywillnotberequiredtodelivercashproceedsofthesaleofdepositedsecuritiesuntilall deposited securities have been sold;and •thedepositarymaydiscontinuetheregistrationoftransfersofADSsandsuspendthedistributionof dividendsandotherdistributionsondepositedsecuritiestotheOwnersandneednotgiveanyfurther notices or perform any furtheracts under the deposit agreementexcept as provided therein. LimitationsonDelivery,RegistrationofTransferandSurrenderofADSs The depositary or the custodian may refuseto: •deliver,register a transfer,or accept a surrender of ADSs; •effecta split-up or combinationof ADRs; or •permitthe withdrawal of deposited securities(unless the depositagreement provides otherwise), untilthedepositorofSharesorthepresenteroftheADRor instructionfor registrationoftransferorsurrenderof ADSs not evidenced by an ADR has: •paid allfees, expenses, taxes and governmentalcharges as required in thedeposit agreement; •providedthedepositaryorcustodianwithanyinformationitmaydeemnecessaryorproper,including without limitation, proof ofidentity and the genuineness of any signature;and •compliedwith all regulations thatthe depositary may establishunder the deposit agreement. The depositary mayrefuse to acceptdeposits ofShares for deliveryof ADSs or toregister transfersof ADSs whenever it or Toyota considers it necessaryor advisable to do so. ThedepositarymayrefusesurrendersofADSsforthepurposeofwithdrawalofdepositedsecurities,but only for: •temporarydelayscausedbyclosingofthedepositary’sregisterortheregisterofholdersofShares maintainedbyToyotaortheForeignRegistrar,orthedepositofShares,inconnectionwithvotingata shareholders’ meeting or thepayment of dividends; •the paymentof fees, taxes and similarcharges; •compliancewithanyU.S.orforeignlawsorgovernmentalregulationsrelatingtotheADSsortothe withdrawal of the deposited securities;or •anyotherreasonthat,atthetime,ispermittedunderparagraphI(A)(1)ofthegeneralinstructionsto Form F-6 under the Securities Act of 1933 orany successor to that provision. LimitationonLiability Thedepositagreementexpresslylimitstheobligationsandliabilityofthedepositary,Toyotaanditsand Toyota’s respective agents. The depositaryand Toyota will not be liable: •iftheyarepreventedorhinderedinperforminganyobligationsbycircumstancesbeyondtheircontrol, including, without limitation,requirements of law, the termsof the deposited securitiesand acts of God; •for exercisingor failing to exercisediscretion under the depositagreement; •if theyperform their obligationswithout negligence or bad faith; •foranyactionornon-actionbasedonadviceorinformationfromlegalcounsel,accountants,anyperson presenting Shares for deposit, any Owner, orother competent person; •fortheinabilityofanyOwnerorHoldertobenefitfromanydistribution,offering,rightorotherbenefit thatismadeavailabletoholdersofdepositedsecuritiesbutisnot,underthetermsofthedeposit agreement, made available toOwners or Holders; or •for any special,consequential or punitivedamages for any breach of the termsof the deposit agreement. ThedepositagreementalsoprovidesthatthedepositaryandToyotahavenoobligationtobecomeinvolved inanyaction,suitorotherproceedinginrespectofanydepositedsecuritiesorinrespectoftheADSsonbehalf of any Owner or Holder or any other person. Toyotaandthedepositaryassumenoobligationnorwilltheybesubjecttoanyliabilityunderthedeposit agreementtoanyOwnerorHolder,exceptthateachagreestoperformitsobligationsspecificallysetforthinthe deposit agreementwithoutnegligenceorbad faith.Thedepositaryis nota fiduciaryand doesnot owea fiduciary duty to Owners or Holders. LiabilityofOwnersforTaxes Ownersmustpayanytaxorothergovernmentalchargepayablebythecustodianorthedepositaryonany ADSordepositedsecurity,orinconnectionwithtenderoffers,exchangeoffersandcertainothertransactions relatingtothedepositedsecurities.IfanOwnerowesanytaxorothergovernmentalcharge,thedepositarymay (1)withholdanydividendsorotherdistributionsortheproceedsthereof,or(2)selldepositedsecuritiesand deducttheamountowingfromthenetproceedsofthatsale.IneithercasetheOwnerremainsliableforany shortfall.Ifanytaxorgovernmentalchargeisrequiredtobewithheldonanynon-cashdistribution,the depositarymaysellthedistributedpropertyorsecuritiestopaythosetaxesanddistributeanyremainingnet proceeds to the Owner entitled thereto. DirectRegistrationSystem Inthedepositagreement,allpartiestothedepositagreementacknowledgethattheDirectRegistration System, also referredto as DRS, andthe ProfileModification System, also referredto as Profile, will applyto the ADSs.DRSisasystemadministeredbyTheDepositoryTrustCompany,orDTC,thatfacilitatesinterchange betweenregisteredholdingofuncertificatedsecuritiesandholdingofsecurityentitlementsinthosesecurities through DTCand aDTC participant.Profileisa requiredfeatureof DRS thatallows aDTC participant,claiming toactonbehalfofanOwnerofADSs,todirectthedepositarytoregisteratransferofthoseADSstoDTCorits nominee andtodeliverthose ADSsto theDTC accountof thatDTC participantwithout receiptby thedepositary of prior authorization fromthe Owner to register that transfer. InconnectionwithDRS/Profile,thepartiestothedepositagreementacknowledgethatthedepositarywill notdeterminewhethertheDTCparticipantthatisclaimingtobeactingonbehalfofanOwnerinrequestinga registrationoftransferanddeliveryasdescribedintheparagraphabovehastheactualauthoritytoactonbehalf oftheOwner(notwithstandinganyrequirementsundertheUniformCommercialCode).Inthedeposit agreement,thepartiesagreethatthedepositary’srelianceonandcompliancewithinstructionsreceivedbythe depositarythroughtheDRS/Profilesystemandinaccordancewiththedepositagreementwillnotconstitute negligence or bad faith on the partof the depositary. GoverningLaw The deposit agreement is governed by thelaws of the State of New York. ![]() Exhibit12.1 CERTIFICATIONS I, Akio Toyoda, certify that: 1.I have reviewedthis annual report on Form 20-F ofToyota Motor Corporation (the “Company”); 2.Basedonmyknowledge,thisreportdoesnotcontainanyuntruestatementofamaterialfactoromit to stateamaterialfactnecessarytomakethestatementsmade,inlightofthecircumstancesunderwhich such statements were made, not misleadingwith respect to the periodcovered by this report; 3.Basedonmyknowledge,thefinancialstatementsandotherfinancialinformationincludedinthis reportfairlypresent inallmaterialrespectsthefinancialcondition,results ofoperationsandcash flows of the Company as of, and for, the periods presentedin this report; 4.TheCompany’sothercertifyingofficerandIareresponsibleforestablishingandmaintaining disclosurecontrolsandprocedures(asdefinedinExchangeActRules13a-15(e)and15d-15(e))and internal controlover financialreporting (as definedin Exchange Act Rules 13a-15(f) and 15d-15(f))for the Company and have: (a)Designedsuchdisclosurecontrolsandprocedures,orcausedsuchdisclosurecontrolsand procedurestobedesignedunderoursupervision,toensurethatmaterialinformationrelatingto theCompany,includingitsconsolidatedsubsidiaries,ismadeknowntousbyotherswithinthose entities, particularlyduring the period in which this reportis being prepared; (b)Designedsuchinternalcontroloverfinancialreporting,orcausedsuchinternalcontrolover financialreportingtobedesignedunderoursupervision,toprovidereasonableassurance regardingthereliabilityoffinancialreportingandthepreparationoffinancialstatementsfor external purposes in accordance withgenerally accepted accounting principles; (c)Evaluatedthe effectivenessoftheCompany’sdisclosurecontrolsandproceduresandpresentedin thisreportourconclusionsabouttheeffectivenessofthe disclosurecontrolsandprocedures,asof the end of the period covered by this reportbased on such evaluation; and (d)DisclosedinthisreportanychangeintheCompany’s internalcontroloverfinancialreportingthat occurredduringtheperiodcoveredbytheannualreportthathasmateriallyaffected,oris reasonably likely to materiallyaffect, the Company’s internalcontrol over financialreporting; and 5.TheCompany’sothercertifyingofficerandIhavedisclosed,basedonourmostrecentevaluationof internal controlover financialreporting,tothe Company’sauditors andthe Audit & SupervisoryBoard (or persons performing the equivalentfunctions): (a)Allsignificantdeficienciesandmaterialweaknessesinthedesignoroperationofinternalcontrol overfinancialreportingwhicharereasonablylikelytoadverselyaffecttheCompany’sabilityto record, process, summarize andreport financial information;and (b)Anyfraud,whetherornotmaterial,thatinvolvesmanagementorotheremployeeswhohavea significant role in the Company’sinternal control over financialreporting. Date: June 23, 2022 /s/Akio Toyoda AkioToyoda President,MemberoftheBoardofDirectors ToyotaMotorCorporation ![]() CERTIFICATIONS I, Kenta Kon, certify that: 1.I have reviewedthis annual report on Form 20-F ofToyota Motor Corporation (the “Company”); 2.Basedonmyknowledge,thisreportdoesnotcontainanyuntruestatementofamaterialfactoromit to stateamaterialfactnecessarytomakethestatementsmade,inlightofthecircumstancesunderwhich such statements were made, not misleadingwith respect to the periodcovered by this report; 3.Basedonmyknowledge,thefinancialstatementsandotherfinancialinformationincludedinthis reportfairlypresent inallmaterialrespectsthefinancialcondition,results ofoperationsandcash flows of the Company as of, and for, the periods presentedin this report; 4.TheCompany’sothercertifyingofficerandIareresponsibleforestablishingandmaintaining disclosurecontrolsandprocedures(asdefinedinExchangeActRules13a-15(e)and15d-15(e))and internal controlover financialreporting (as definedin Exchange Act Rules 13a-15(f) and 15d-15(f))for the Company and have: (a)Designedsuchdisclosurecontrolsandprocedures,orcausedsuchdisclosurecontrolsand procedurestobedesignedunderoursupervision,toensurethatmaterialinformationrelatingto theCompany,includingitsconsolidatedsubsidiaries,ismadeknowntousbyotherswithinthose entities, particularlyduring the period in which this reportis being prepared; (b)Designedsuchinternalcontroloverfinancialreporting,orcausedsuchinternalcontrolover financialreportingtobedesignedunderoursupervision,toprovidereasonableassurance regardingthereliabilityoffinancialreportingandthepreparationoffinancialstatementsfor external purposes in accordance withgenerally accepted accounting principles; (c)Evaluatedthe effectivenessoftheCompany’sdisclosurecontrolsandproceduresandpresentedin thisreportourconclusionsabouttheeffectivenessofthe disclosurecontrolsandprocedures,asof the end of the period covered by this reportbased on such evaluation; and (d)DisclosedinthisreportanychangeintheCompany’s internalcontroloverfinancialreportingthat occurredduringtheperiodcoveredbytheannualreportthathasmateriallyaffected,oris reasonably likely to materiallyaffect, the Company’s internalcontrol over financialreporting; and 5.TheCompany’sothercertifyingofficerandIhavedisclosed,basedonourmostrecentevaluationof internal controlover financialreporting,tothe Company’sauditors andthe Audit & SupervisoryBoard (or persons performing the equivalentfunctions): (a)Allsignificantdeficienciesandmaterialweaknessesinthedesignoroperationofinternalcontrol overfinancialreportingwhicharereasonablylikelytoadverselyaffecttheCompany’sabilityto record, process, summarize andreport financial information;and (b)Anyfraud,whetherornotmaterial,thatinvolvesmanagementorotheremployeeswhohavea significant role in the Company’sinternal control over financialreporting. Date: June 23, 2022 /s/Kenta Kon KentaKon MemberoftheBoardofDirectors ToyotaMotorCorporation ![]() Exhibit13.1 CERTIFICATION Pursuantto18U.S.C.Section1350,asadoptedpursuanttoSection906oftheSarbanes-OxleyActof2002, eachoftheundersignedofficersofToyotaMotorCorporation,aJapanesecorporation(the“ Company ”),does hereby certify that, to such officer’sknowledge: 1.TheaccompanyingAnnualReportoftheCompanyonForm20-FfortheperiodendedMarch31,2022 (the“ Report ”)fullycomplieswiththerequirementsofSection13(a)or15(d)oftheSecuritiesExchangeActof 1934; and 2.InformationcontainedintheReportfairlypresents,inallmaterialrespects,thefinancialconditionand results of operations of theCompany. By:/s/Akio Toyoda Name:AkioToyoda Title:President,MemberoftheBoardofDirectors Date: June 23, 2022 By:/s/Kenta Kon Name:KentaKon Title:MemberoftheBoardofDirectors Date: June 23, 2022 (AsignedoriginalofthiswrittenstatementrequiredbySection906hasbeenprovidedtoToyotaMotor Corporation and willbe retained byToyota Motor Corporationand furnished to the U.S. Securitiesand Exchange Commission or its staff upon request.)