Annual Report and Accounts

Toyota Motor Corporation
23 August 2002



                            TOYOTA MOTOR CORPORATION



                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


                                                                            Page

Report of independent accountants                                          F - 2
Consolidated balance sheets at March 31, 2001 and 2002                     F - 3
Consolidated statements of income for the years                            F - 5
ended March 31, 2000, 2001 and 2002
Consolidated statements of shareholders' equity for the years ended March  F - 6
31, 2000, 2001 and 2002
Consolidated statements of cash flows for the years                        F - 8
ended March 31, 2000, 2001 and 2002
Notes to consolidated financial statements                                 F - 10



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



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



                                      F-1




                       Report of Independent Accountants



To the Shareholders and Board of Directors of

Toyota Jidosha Kabushiki Kaisha

('Toyota Motor Corporation')



In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of income, shareholders' equity and cash flows present
fairly, in all material respects, the financial position of Toyota Motor
Corporation and its consolidated subsidiaries at March 31, 2001 and 2002, and
the results of their operations and their cash flows for each of the three years
in the period ended March 31, 2002, in conformity with accounting principles
generally accepted in the United States of America.  These financial statements
are the responsibility of the company's management; our responsibility is to
express an opinion on these financial statements based on our audits.  We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
  We believe that our audits provide a reasonable basis for the opinion
expressed above.



June 26, 2002

Nagoya, Japan



                                      F-2




                            TOYOTA MOTOR CORPORATION

                          CONSOLIDATED BALANCE SHEETS

                                     ASSETS


                                                                                                   U.S. dollars
                                                                                                    in millions
                                                                      Yen in millions
                                                                          March 31                   March 31,
                                                                   2001              2002              2002

Current assets:
Cash and cash equivalents                                     JPY  1,510,892    JPY  1,657,160         $  12,436
Time deposits                                                         48,917            19,977               150
Marketable securities                                                488,096           600,737             4,508
Trade accounts and notes receivable, less allowance for
doubtful accounts of JPY33,050 million in 2001
and JPY28,182 million ($211 million) in 2002                       1,271,820         1,456,935            10,934
Finance receivables, net                                           1,633,247         2,020,491            15,163
Other receivables                                                    357,380           508,970             3,821
Inventories                                                          876,252           961,840             7,218
Deferred income taxes                                                355,051           433,524             3,253
Prepaid expenses and other current assets                            323,485           413,211             3,101
Total current assets                                               6,865,140         8,072,845            60,584

Noncurrent finance receivables, net                                2,068,768         2,671,460            20,048

Investments and other assets:
Marketable securities and other securities investments             1,862,389         1,531,126            11,491
Affiliated companies                                               1,397,604         1,321,950             9,921
Officers and employees receivables                                    21,740            21,151               159
Other                                                                346,240           580,188             4,354
                                                                   3,627,973         3,454,415            25,925

Property, plant and equipment:
Land                                                                 847,635         1,032,381             7,748
Buildings                                                          2,075,147         2,421,918            18,176
Machinery and equipment                                            6,213,626         6,959,054            52,225
Vehicles and equipment on operating leases                         1,525,164         1,584,161            11,889
Construction in progress                                             142,278           234,224             1,758
                                                                  10,803,850        12,231,738            91,796
Less - Accumulated depreciation                                  (6,345,948)       (7,124,728)          (53,469)
                                                                   4,457,902         5,107,010            38,327

Total assets                                                   JPY17,019,783     JPY19,305,730          $144,884



    The accompanying notes are integral part of these financial statements.



                                      F-3




                            TOYOTA MOTOR CORPORATION

                          CONSOLIDATED BALANCE SHEETS

                      LIABILITIES AND SHAREHOLDERS' EQUITY


                                                                                                   U.S. dollars
                                                                                                    in millions
                                                                      Yen in millions
                                                                          March 31                   March 31,
                                                                   2001              2002              2002

Current liabilities:
Short-term borrowings                                         JPY  1,469,007    JPY  1,825,564         $  13,700
Current portion of long-term debt                                    714,674         1,158,814             8,696
Accounts payable                                                   1,290,072         1,420,608            10,661
Other payables                                                       607,170           575,011             4,315
Accrued expenses                                                     814,153           928,160             6,966
Income taxes payable                                                 252,235           327,713             2,459
Other current liabilities                                            405,976           436,288             3,275
Total current liabilities                                          5,553,287         6,672,158            50,072

Long-term liabilities:
Long-term debt                                                     3,083,344         3,722,706            27,938
Accrued pension and severance costs                                  505,150           754,403             5,662
Deferred income taxes                                                553,266           467,061             3,505
Other long-term liabilities                                           62,208           133,669             1,003
Total long-term liabilities                                        4,203,968         5,077,839            38,108

Minority interest in consolidated subsidiaries                       185,117           291,621             2,189

Shareholders' equity:
Common stock, JPY50 par value in 2001 and

no par value in 2002, authorized:

9,815,185,400 shares in 2001 and
9,780,185,400 shares in 2002;
issued:
3,684,997,492 shares in 2001 and
3,649,997,492 shares in 2002



                                                                     397,050           397,050             2,980
Additional paid-in capital                                           488,655           490,538             3,681
Retained earnings                                                  6,479,073         6,804,722            51,067
Accumulated other comprehensive loss                               (282,491)         (267,304)           (2,006)
Treasury stock, at cost, 1,323,037 shares in 2001 and                (4,876)         (160,894)           (1,207)
46,449,606 shares in 2002
Total shareholders' equity                                         7,077,411         7,264,112            54,515

Commitments and contingencies

Total liabilities and shareholders' equity                     JPY17,019,783     JPY19,305,730          $144,884



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



                                      F-4




                            TOYOTA MOTOR CORPORATION

                       CONSOLIDATED STATEMENTS OF INCOME

                                                                                                                      
                                                                                                         U.S. dollars
                                                                               Yen in millions            in millions 
                                                                                                         For the year
                                                                                                                ended
                                                                   For the year ended March 31              March 31, 
                                                2000                 2001                 2002                   2002 
                                                                                                                      
  Net revenues:                                                                                                       
  Sales of products                    JPY12,121,428        JPY12,583,937        JPY13,626,210               $102,260 
  Financing operations                       528,349              553,133              690,664                  5,183 
                                          12,649,777           13,137,070           14,316,874                107,443 
                                                                                                                      
  Costs and expenses:                                                                                                 
  Cost of products sold                    9,839,833           10,218,599           10,874,455                 81,609 
  Cost of financing                          401,998              427,340              459,195                  3,446 
  operations                                                                                                          
  Selling, general and                     1,709,385            1,700,402            1,889,592                 14,181 
  administrative                                                                                                      
                                          11,951,216           12,346,341           13,223,242                 99,236 
                                                                                                                      
  Operating income                           698,561              790,729            1,093,632                  8,207 
                                                                                                                      
  Other income                                                                                                        
  (expense):                                                                                                          
  Interest and dividend                       73,972               71,358               55,778                    419 
  income                                                                                                              
  Interest expense                          (47,348)             (40,886)             (26,786)                  (201) 
  Foreign exchange gain                       91,267              (5,954)                 (16)                    (0) 
  (loss), net                                                                                                         
  Other income (loss),                        64,228              292,042            (150,507)                (1,130) 
  net                                                                                                                 
                                             182,119              316,560            (121,531)                  (912) 
                                                                                                                      
  Income before income                                                                                                
  taxes, minority                            880,680            1,107,289              972,101                  7,295 
  interest and equity in                                                                                              
  earnings of affiliated                                                                                              
  companies                                                                                                           
  Provision for income                       422,731              523,876              422,789                  3,173 
  taxes                                                                                                               
                                                                                                                      
  Income before minority                                                                                              
  interest and equity in                     457,949              583,413              549,312                  4,122 
  earnings of affiliated                                                                                              
  companies                                                                                                           
                                                                                                                      
  Minority interest in                       (7,632)             (12,129)             (10,835)                   (81) 
  consolidated                                                                                                        
  subsidiaries                                                                                                        
  Equity in earnings of                       31,619              103,614               18,090                    136 
  affiliated companies                                                                                                
                                                                                                                      
  Net income                             JPY 481,936          JPY 674,898          JPY 556,567                $ 4,177 

                                                                                                                      
                                                                                           Yen           U.S. dollars 
                                                                                                                      
Net income per share:                                                                                               
  - Basic                                  JPY128.27            JPY180.65            JPY152.26                  $1.14 
  - Diluted                                JPY128.27            JPY180.65            JPY152.26                  $1.14 
                                                                                                                      
  Cash dividends per                        JPY24.00             JPY25.00             JPY28.00                  $0.21 
  share:                                                                                                              
 
The accompanying notes are an integral part of these financial statements. 
 
                                                            F-5 
 
                                                  TOYOTA MOTOR CORPORATION 
                                          CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY 
 

                                                                                                                      
                                                                                                      Yen in millions 
                         Common     Additional        Retained         Accumulated         Treasury             Total 
                         stock                        earnings              other            stock,                  
                                       paid-in                       comprehensive          at cost                   
                                       capital                                                                        
                                                                            income                                    
                                                                            (loss)                                     
                                                                                                                      
  Balance at          JPY397,020     JPY487,531     JPY5,807,875     JPY (34,155)       JPY (2,988)      JPY6,655,283
  March 31,                                                                                
  1999                                                                                                                
                                                                                                                      
  Comprehensive                                                                                                       
  income:                                                                                                             
  Net income                                            481,936                                               481,936 
  Other                                                                                                               
  comprehensive                                                                                                       
  income (loss)                                                                                                       
  -                                                                                                                   
  Foreign                                                               (181,313)                           (181,313) 
  currency                                                                                                            
  translation                                                                                                         
  adjustments                                                                                                         
  Unrealized                                                                                                          
  gains on                                                                 82,870                              82,870 
  securities,                                                                                                         
  net of                                                                                                              
  reclassificati                                                                                                      
  on adjustment                                                                                                       
  Minimum                                                                   7,251                               7,251 
  pension                                                                                                             
  liability                                                                                                           
  adjustment                                                                                                          
  Total                                                                                                       390,744 
  comprehensive                                                                                                       
  income                                                                                                              
                                                                                                                      
  Dividends                                            (87,958)                                              (87,958) 
  paid                                                                                                                
  Purchase and                                         (45,457)                               (472)          (45,929) 
  retirement of                                                                                                       
  common stock                                                                                                        
  Balance at           397,020        487,531         6,156,396         (125,347)           (3,460)         6,912,140 
  March 31,                                                                                                           
  2000                                                                                                                
                                                                                                                      
  Issuance                  30          1,124                                                                   1,154 
  during the                                                                                                          
  year                                                                                                                
                                                                                                                      
  Comprehensive                                                                                                       
  income:                                                                                                             
  Net income                                            674,898                                               674,898 
  Other                                                                                                               
  comprehensive                                                                                                       
  income (loss)                                                                                                       
  -                                                                                                                   
  Foreign                                                                 161,280                             161,280 
  currency                                                                                                            
  translation                                                                                                         
  adjustments                                                                                                         
  Unrealized                                                                                                          
  losses on                                                             (304,995)                           (304,995) 
  securities,                                                                                                         
  net of                                                                                                              
  reclassificati                                                                                                      
  on adjustment                                                                                                       
  Minimum                                                                (13,429)                            (13,429) 
  pension                                                                                                             
  liability                                                                                                           
  adjustment                                                                                                          
  Total                                                                                                       517,754 
  comprehensive                                                                                                       
  income                                                                                                              
                                                                                                                      
  Dividends                                            (88,625)                                              (88,625) 
  paid                                                                                                                
  Purchase and                                        (263,596)                             (1,416)         (265,012) 
  retirement of                                                                                                       
  common stock                                                                                                        
  Balance at           397,050        488,655         6,479,073         (282,491)           (4,876)         7,077,411 
  March 31,                                                                                                           
  2001                                                                                                                
                                                                                                                      
  Issuance                              1,883                                                                   1,883 
  during the                                                                                                          
  year                                                                                                                
                                                                                                                      
  Comprehensive                                                                                                       
  income:                                                                                                             
  Net income                                            556,567                                               556,567 
  Other                                                                                                               
  comprehensive                                                                                                       
  income (loss)                                                                                                       
  -                                                                                                                   
  Foreign                                                                 133,897                             133,897 
  currency                                                                                                            
  translation                                                                                                         
  adjustments                                                                                                         
  Unrealized                                                                                                          
  losses on                                                               (3,576)                             (3,576) 
  securities,                                                                                                         
  net of                                                                                                              
  reclassificati                                                                                                      
  on adjustment                                                                                                       
  Minimum                                                               (114,344)                           (114,344) 
  pension                                                                                                             
  liability                                                                                                           
  adjustment                                                                                                          
  Net losses on                                                             (790)                               (790) 
  derivative                                                                                                          
  instruments                                                                                                         
  Total                                                                                                       571,754 
  comprehensive                                                                                                       
  income                                                                                                              
                                                                                                                      
  Change in                                             (3,061)                                               (3,061) 
  subsidiaries'                                                                                                       
  year-ends                                                                                                           
  Dividends                                            (98,639)                                              (98,639) 
  paid                                                                                                                
  Purchase and                                        (129,218)                           (156,018)         (285,236) 
  retirement of                                                                                                       
  common stock                                                                                                        
                                                                                                                      
  Balance at         JPY397,050      JPY490,538      JPY6,804,722     JPY(267,304)     JPY(160,894)      JPY7,264,112
  March 31,                                                                                                    
  2002                                                                                                                
 
The accompanying notes are an integral part of these financial statements. 
 
                                                            F-6 
 
                                                 TOYOTA MOTOR CORPORATION 
                              CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (CONTINUED) 
 

                                                                                                                      
                                                                    U.S. dollars in millions                            
                                         
                            Common       Additional        Retained         Accumulated        Treasury         Total 
                            stock           paid-in       earnings                other          stock,               
                                           capital                        comprehensive        at cost                
                                                                         income (loss)                                
                                                                                                                      
  Balance at               $2,980           $3,667         $48,623            $(2,120)          $ (37)        $53,113 
  March 31, 2001                                                                                                      
                                                                                                                      
  Issuance during                               14                                                                 14 
  the year                                                                                                            
                                                                                                                      
  Comprehensive                                                                                                       
  income:                                                                                                             
  Net income                                                 4,177                                              4,177 
  Other                                                                                                               
  comprehensive                                                                                                       
  income (loss) -                                                                                                     
  Foreign                                                                        1,005                          1,005 
  currency                                                                                                            
  translation                                                                                                         
  adjustments                                                                                                         
  Unrealized                                                                                                          
  losses on                                                                       (27)                           (27) 
  securities, net                                                                                                     
  of                                                                                                                  
  reclassification                                                                                                    
  adjustment                                                                                                          
  Minimum pension                                                                (858)                          (858) 
  liability                                                                                                           
  adjustment                                                                                                          
  Net losses on                                                                    (6)                            (6) 
  derivative                                                                                                          
  instruments                                                                                                         
  Total                                                                                                         4,291 
  comprehensive                                                                                                       
  income                                                                                                              
                                                                                                                      
  Change in                                                   (23)                                               (23) 
  subsidiaries'                                                                                                       
  year-ends                                                                                                           
  Dividends paid                                             (740)                                              (740) 
  Purchase and                                               (970)                             (1,170)        (2,140) 
  retirement of                                                                                                       
  common stock                                                                                                        
                                                                                                                      
  Balance at               $2,980           $3,681         $51,067            $(2,006)        $(1,207)        $54,515 
  March 31, 2002                                                                                                      
 
The accompanying notes are an integral part of these financial statements. 
 
                                                               F-7 
                                                     TOYOTA MOTOR CORPORATION 
                                              CONSOLIDATED STATEMENTS OF CASH FLOWS 
 

                                                                                                                      
                                                                                                        U.S. dollars   
                                                                 Yen in millions                         in millions    
                                                                                                        For the year   
                                                                                                               ended    
                                                            For the year ended March 31                     March 31,   
  
                                                2000                  2001                  2002                 2002 
  Cash flows from                                                                                                     
  operating activities:                                                                                               
  Net income                             JPY 481,936           JPY 674,898           JPY 556,567              $ 4,177 
  Adjustments to                                                                                                      
  reconcile net income to                                                                                             
  net cash                                                                                                            
  provided by operating                                                                                               
  activities -                                                                                                        
  Depreciation                               822,315               784,784               809,841                6,078 
  Provision for doubtful                      33,755                27,131                44,407                  333 
  accounts and credit                                                                                                 
  losses                                                                                                              
  Pension and severance                       27,307                45,138                53,543                  402 
  costs, less payments                                                                                                
  Loss on disposal of                         19,544                22,409                46,834                  352 
  fixed assets                                                                                                        
  Unrealized (gains)                        (41,614)                13,377                    -                    -  
  losses on trading                                                                                                   
  securities, net                                                                                                     
  Unrealized losses on                            -                     -                179,649                1,348 
  available-for-sale                                                                                                  
  securities, net                                                                                                     
  Realized gain on                                                                                                    
  disposition of                                  -              (180,950)                    -                    -  
  ownership interest in                                                                                               
  telecommunication                                                                                                   
  subsidiary                                                                                                          
  Gain on securities                                                                                                  
  contribution to                                 -              (161,151)                    -                    -  
  employee retirement                                                                                                 
  benefit trust                                                                                                       
  Deferred income taxes                       88,406                49,325             (142,811)              (1,072) 
  Minority interest in                         7,632                12,129                10,835                   81 
  consolidated                                                                                                        
  subsidiaries                                                                                                        
  Equity in earnings of                     (31,619)             (103,614)              (18,090)                (136) 
  affiliated companies                                                                                                
  Changes in operating                                                                                                
  assets and liabilities:                                                                                             
  (Increase) decrease in                    (86,911)             (111,632)                61,997                  465 
  notes and accounts                                                                                                  
  receivable                                                                                                          
  (Increase) decrease in                    (73,172)              (49,374)                11,705                   88 
  inventories                                                                                                         
  (Increase) decrease in                   (169,200)                 4,486             (253,993)              (1,906) 
  other current assets                                                                                                
  Increase (decrease) in                      98,812               (7,911)                 (809)                  (6) 
  accounts payable                                                                                                    
  Increase (decrease) in                    (77,952)               141,525                74,888                  562 
  accrued income taxes                                                                                                
  Increase (decrease) in                    (79,176)               220,357               139,954                1,050 
  other current                                                                                                       
  liabilities                                                                                                         
  Other                                       78,862                47,091              (41,857)                (314) 
  Net cash provided by                     1,098,925             1,428,018             1,532,660               11,502 
  operating activities                                                                                                
                                                                                                                      
  Cash flows from                                                                                                     
  investing activities:                                                                                               
  Additions to finance                   (2,681,142)           (3,697,376)           (3,853,741)             (28,921) 
  receivables                                                                                                         
  Collection of finance                    1,961,026             2,801,160             2,453,540               18,413 
  receivables                                                                                                         
  Proceeds from sale of                      127,037               507,811               624,393                4,686 
  finance receivables                                                                                                 
  Additions to fixed                       (838,309)             (762,274)             (940,547)              (7,059) 
  assets excluding                         (838,309)             (762,274)                                            
  equipment leased to                                                                                                 
  others                                                                                                              
  Additions to equipment                   (538,395)             (439,132)             (608,046)              (4,563) 
  leased to others                                                                                                    
  Proceeds from sales of                                                                                              
  fixed assets excluding                      80,375                61,265                56,525                  424 
  equipment leased to                                                                                                 
  others                                                                                                              
  Proceeds from sales of                     381,852               337,047               412,191                3,093 
  equipment leased to                                                                                                 
  others                                                                                                              
  Payments for                              (61,261)              (70,906)              (28,450)                (214) 
  investments and other                                                                                               
  assets                                                                                                              
  Purchases of marketable                                                                                             
  securities and                         (1,144,839)             (949,058)             (653,756)              (4,906) 
  security investments                                                                                                
  Proceeds from sales of                                                                                              
  marketable securities                      447,925               234,608               147,722                1,109 
  and security                                                                                                        
  investments                                                                                                         
  Proceeds on maturity of                                                                                             
  marketable securities                      537,106               597,409               604,081                4,533 
  and security                                                                                                        
  investments                                                                                                         
  Decrease in time                           323,594                45,190                31,519                  237 
  deposits                                                                                                            
  Payment for additional                                                                                              
  investments in                            (18,351)              (34,204)              (27,510)                (206) 
  affiliated companies,                                                                                               
  net of cash acquired                                                                                                
  Other                                       34,865                49,722              (28,732)                (215) 
  Net cash used in                    JPY(1,388,517)        JPY(1,318,738)        JPY(1,810,811)            $(13,589) 
  investing activities                                                                                                
 
The accompanying notes are an integral part of these financial statements. 
 
                                                                F-8 
 
 
                                                      TOYOTA MOTOR CORPORATION 
                                         CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) 
 

                                                                                                                      
                                                                                                         U.S. dollars   
                                                               Yen in millions                            in millions   
                                                                                                         For the year   
                                                                                                                ended   
                                                           For the year ended March 31                       March 31,  
      
                                               2000                 2001                 2002                    2002 
  Cash flows from                                                                                                     
  financing activities:                                                                                               
  Purchase and                         JPY (45,929)        JPY (265,012)        JPY (285,236)               $ (2,140) 
  retirement of common                                                                                                
  stock                                                                                                               
  Proceeds from                           1,006,046            1,117,360            1,701,727                  12,771 
  issuance of long-term                                                                                               
  debt                                                                                                                
  Payments of long-term                   (654,745)            (958,475)          (1,012,523)                 (7,599) 
  debt                                                                                                                
  Increase in                               332,853               28,039               73,884                     554 
  short-term borrowings                                                                                               
  Dividends paid                           (87,958)             (88,625)             (98,639)                   (740) 
  Other                                          -                    -                12,935                      97 
  Net cash provided by                      550,267            (166,713)              392,148                   2,943 
  (used in) financing                                                                                                 
  activities                                                                                                          
                                                                                                                      
  Effect of exchange                                                                                                  
  rate changes on cash                     (65,465)               39,057               32,271                     242 
  and                                                                                                                 
  cash equivalents                                                                                                    
                                                                                                                      
  Net increase                              195,210             (18,376)              146,268                   1,098 
  (decrease) in cash                                                                                                  
  and cash equivalents                                                                                                
                                                                                                                      
  Cash and cash                           1,334,058            1,529,268            1,510,892                  11,338 
  equivalents at                                                                                                      
  beginning of year                                                                                                   
                                                                                                                      
  Cash and cash                        JPY1,529,268         JPY1,510,892        JPY 1,657,160                 $12,436 
  equivalents at end of                                                                                               
  year                                                                                                                
 
The accompanying notes are an integral part of these financial statements. 
 
                                                            F-9 
 
 
                                                   TOYOTA MOTOR CORPORATION 
                                         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
 
1. Nature of operations: 
Toyota Motor Corporation (the 'parent company') and its subsidiaries (collectively 'Toyota') are primarily engaged in
the design, manufacture, assembly and sale of passenger cars, recreational and sport-utility vehicles, minivans,
trucks and related parts and accessories throughout the world. In addition, Toyota provides retail and wholesale
financing, retail leasing and certain other financial services primarily to its dealers and their customers related
to vehicles manufactured by Toyota. 
 
2. Summary of significant accounting policies: 
The parent company and its subsidiaries in Japan maintain their records and prepare their financial statements in
accordance with accounting principles generally accepted in Japan, and its foreign subsidiaries in conformity with
those of their countries of domicile. Certain adjustments and reclassifications have been incorporated in the
accompanying consolidated financial statements to conform with accounting principles generally accepted in the United
States of America. These adjustments were not recorded in the statutory books. 
 
Significant accounting policies after reflecting adjustments for the above are as follows: 
 
Basis of consolidation and accounting for
investments in affiliated companies - 
 
The consolidated financial statements include the accounts of the parent company and those of its majority-owned
subsidiary companies. Certain foreign subsidiary results were reported in the consolidated financial statements using
a December 31 year-end. During the year ended March 31, 2002, the year-ends of certain of these foreign subsidiaries
were changed from December 31 to March 31. As a result, Toyota decreased retained earnings by JPY3,061 million ($23
million) to reflect the impact of conforming the year-ends at March 31, 2001. All significant intercompany
transactions and accounts have been eliminated. Investments in affiliated companies in which Toyota exercises
significant influence, but which it does not control, are stated at cost plus equity in undistributed earnings.
Consolidated net income includes Toyota's equity in current earnings of such companies, after elimination of
unrealized intercompany profits. Investments in which Toyota does not exercise significant influence (generally less
than a 20% ownership interest) are stated at cost. 
 
Estimates - 
The preparation of Toyota's consolidated financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and assumptions that affect the
amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from
those estimates. The more significant estimates include: warranty, allowance for doubtful accounts and credit losses,
residual values for leased assets, impairment of long-lived assets, postretirement benefits costs and obligations and
post-employment benefit costs and other than temporary losses on marketable securities. 
 
Translation of foreign currencies - 
All asset and liability accounts of foreign subsidiaries and affiliates are translated into Japanese yen at
appropriate year-end current rates and all income and expense accounts are translated at rates that approximate those
prevailing at the time of the transactions. The resulting translation adjustments are included as a component of
accumulated other comprehensive income. 
 
Foreign currency receivables and payables are translated at appropriate year-end current rates and the resulting
transaction gains or losses are taken into income currently. 
 
Revenue recognition - 
Revenue from sales of vehicles and parts is generally recognized upon delivery which is considered to have occurred
when the dealer has taken title to the product and the risk and reward of ownership have been substantively
transferred, except as described below. Provisions for sales allowances and incentives are recognized at the time of
the sale. 
 
Revenue from the sale of vehicles under which Toyota conditionally guarantees the minimum resale value is recognized
on a pro rata basis from the date of sale to the first exercise date of the guarantee in a manner similar to lease
accounting. The underlying vehicles of these transactions are recorded as assets and are depreciated in accordance
with Toyota's depreciation policy. 
 
Revenue from retail financing contracts and finance leases is recognized using the effective yield method. Revenue
from operating leases is recognized on a straight-line basis over the lease term.  
 
Toyota on occasion sells finance receivables in transactions subject to limited recourse provisions. These sales are
to trusts and Toyota retains the servicing and is paid a servicing fee. Gains or losses from the sales of the finance
receivables are recognized in the period in which such sales occur. 
 
Other costs - 
Advertising and sales promotion costs are expensed as incurred. Advertising costs were JPY260,529 million, JPY276,596
million and JPY319,657 million ($2,399 million) for the years ended March 31, 2000, 2001 and 2002, respectively. 
 
Estimated costs related to product warranties are accrued at the time of sale. 
 
Research and development costs are expensed as incurred and were JPY451,177 million, JPY475,716 million and
JPY589,306 million ($4,423 million) for the years ended March 31, 2000, 2001 and 2002, respectively. 
 
Cash and cash equivalents - 
Cash and cash equivalents include all highly liquid investments, generally with original maturities of three months
or less, that are readily convertible to known amounts of cash and are so near maturity that they present
insignificant risk of changes in value because of changes in interest rates. 
 
Marketable securities - 
Marketable securities consist of debt and equity securities. Debt and equity securities designated as
available-for-sale are carried at fair value with changes in unrealized gains or losses included as a component of
accumulated other comprehensive income in shareholders' equity, net of applicable taxes. Should Toyota acquire
securities in the future and designate them as held-to-maturity investments, such securities would be carried at
amortized cost. Individual securities classified as either available-for-sale or held-to-maturity are reduced to net
realizable value for other than temporary declines in market value. In determining if a decline in value is other
than temporary, Toyota considers the length of time and the extent to which the fair value has been less than the
carrying value, the financial condition and prospects of the company and Toyota's ability and intent to retain its
investment in the company for a period of time sufficient to allow for any anticipated recovery in market value.
Realized gains and losses, which are determined on the average cost method, are reflected in the statement of income. 
 
Allowance for credit losses - 
Allowances for credit losses are established based primarily on historical loss experience. Other factors affecting
collectibility are also evaluated in determining the amount to be provided. Upon repossession of the collateral for a
delinquent account, losses are charged to the allowance for credit losses and the estimated realizable value of the
asset reflected in other assets. When it is determined the collateral cannot be recovered, losses are charged to the
allowance for credit losses. 
 
Inventories - 
Inventories are valued at cost, not in excess of market, cost being determined on the 'average cost' basis, except
for the cost of finished products carried by certain subsidiary companies which is determined on the 'specific
identification' basis or 'last in, first out' ('LIFO') basis. Inventories valued on the LIFO basis totaled JPY170,103
million and JPY190,565 million ($1,430 million) at March 31, 2001 and 2002, respectively. Had the 'first in, first
out' basis been used for those companies using the LIFO basis, inventories would have been JPY34,457 million and
JPY23,375 million ($175 million) higher than reported at March 31, 2001 and 2002, respectively. 
 
During the year ended March 31, 2001 and 2002, certain vehicle inventory quantities accounted for on the LIFO basis
were reduced. These reductions resulted in the liquidation of LIFO inventory layers. The effects of these
liquidations were not material to Toyota's financial position or results of operations for the years ended March 31,
2001 and 2002. 
 
Property, plant and equipment - 
Property, plant and equipment are stated at cost. Major renewals and improvements are capitalized; minor
replacements, maintenance and repairs are charged to current operations. Depreciation of property, plant and
equipment is mainly computed on the declining-balance method for the parent company and Japanese subsidiaries and on
the straight-line method for foreign subsidiary companies at rates based on estimated useful lives of the assets
according to general class, type of construction and use. Estimated useful lives range from 20 to 50 years for
buildings and from 2 to 25 years for machinery and equipment. 
 
Vehicles and equipment on operating leases to third parties are originated by dealers and acquired by certain
consolidated subsidiaries. Such subsidiaries are also the lessors of certain property that they acquire directly.
Vehicles and equipment on operating leases are depreciated primarily on a straight-line basis over the lease term,
generally three years, to the estimated residual value. 
 
Long-lived assets - 
Toyota reviews its long-lived assets, including goodwill and investments in affiliated companies stated at cost, for
impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be
recoverable. An impairment loss would be recognized when the carrying amount of an asset exceeds the estimated
undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. The amount
of the impairment loss to be recorded is calculated by the excess of the assets carrying value over its fair value.
Fair value is determined mainly using a discounted cash flow valuation method. 
 
Environmental matters - 
Environmental expenditures relating to current operations are expensed or capitalized as appropriate. Expenditures
relating to existing conditions caused by past operations, which do not contribute to current or future revenues, are
expensed. Liabilities for remediation costs are recorded when they are probable and reasonably estimable, generally
no later than the completion of feasibility studies or Toyota's commitment to a plan of action. The cost of each
environmental liability is estimated by using current technology available and various engineering, financial and
legal specialists within Toyota based on current law. Such liability does not reflect any offset for possible
recoveries from insurance companies and is not discounted. There were no material changes in the liability for all
periods presented. 
 
Income taxes - 
The provision for income taxes is computed based on the pretax income included in the consolidated statement of
income. The asset and liability approach is used to recognize deferred tax liabilities and assets for the expected
future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and
liabilities. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a
tax benefit will not be realized. 
 
Derivative financial instruments - 
Toyota employs derivative financial instruments, including foreign exchange forward contracts, foreign currency
options, interest rate swaps, interest rate currency swap agreements and interest rate options to manage its exposure
to fluctuations in interest rates and foreign currency exchange rates. Toyota does not use derivatives for
speculation or trading purposes. 
 
Effective April 1, 2001, Toyota adopted Statement of Financial Accounting Standards ('FAS') No. 133, Accounting for
Derivative Instruments and Hedging Activities, which has been amended by FAS No. 137 and No. 138 (see Note 19). FAS
133, as amended, requires that all derivative instruments be recorded on the balance sheet at fair value. Changes in
the fair value of derivatives are recorded each period in current earnings or other comprehensive income, depending
on whether a derivative is designated as part of a hedge transaction and the type of hedge transaction. The
ineffective portion of all hedges is recognized in earnings.  
 
Net income per share - 
Basic net income per common share is calculated by dividing net income by the weighted-average number of shares
outstanding during the reported period; 3,757,276,120, 3,735,862,211 and 3,655,303,873 for the years ended March 31
2000, 2001 and 2002, respectively. The calculation of diluted net income per common share is similar to the
calculation of basic net income per share, except that the weighted-average number of shares outstanding includes the
additional dilution from assumed exercise of dilutive stock options. The effective of dilutive stock options was
de-minims for the years ended March 31, 2000, 2001 and 2002. 
 
Stock-based compensation - 
Toyota measures compensation expense for its stock-based directors' compensation plan using the intrinsic value
method. 
 
Other comprehensive income - 
Other comprehensive income refers to revenues, expenses, gains and losses that, under accounting principles generally
accepted in the United States of America are included in comprehensive income, but are excluded from net income as
these amounts are recorded directly as an adjustment to shareholders' equity. Toyota's other comprehensive income is
primarily comprised of unrealized gains/losses on marketable securities designated as available-for-sale, foreign
currency translation adjustments and gains/losses on derivative instruments and adjustments to recognize additional
minimum liabilities associated with Toyota's defined benefit pension plans. 
 
Recent pronouncements - 
In June 2001, the Financial Accounting Standards Board (FASB) issued FAS No. 141, Business Combinations. FAS No. 141
requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001.
This statement specifies that certain acquired intangible assets in a business combination be recognized as assets
separately from goodwill and that existing intangible assets and goodwill be evaluated for these new separation
requirements. Management does not expect this statement to have a material impact on Toyota's consolidated financial
position or results of operations. 
 
In June 2001, the FASB issued FAS No. 142, Goodwill and Other Intangible Assets. FAS No. 142 changes the accounting
for goodwill from an amortization method to an impairment-only approach. Amortization of goodwill, including goodwill
recorded in past business combinations, will cease upon adoption of this statement. In addition, this statement
requires that goodwill be tested for impairment at least annually at the reporting unit level. Toyota adopted FAS 142
on April 1, 2002. At March 31, 2002, the amount of unamortized goodwill is insignificant and management does not
expect this statement to have a material impact on Toyota's consolidated financial position or results of operations. 
 
In June 2001, the FASB issued FAS No. 143, Accounting for Asset Retirement Obligations. This statement addresses
financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and
the associated asset retirement costs. Toyota is required to adopt FAS No. 143 on April 1, 2003. Management does not
expect this statement to have a material impact on Toyota's consolidated financial position or results of operations. 
 
In August 2001, the FASB issued FAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. This
statement supersedes FAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed of. The statement retains the previously existing accounting requirements related to the recognition and
measurement of the impairment of long-lived assets to be held and used while expanding the measurement requirements
of long-lived assets to be disposed of by sale to include discontinued operations. It also expands the previously
existing reporting requirements for discontinued operations to include a component of an entity that either has been
disposed of or is classified as held for sale. Toyota adopted FAS No. 144 on April 1, 2002. Management does not
expect this statement to have a material impact on Toyota's consolidated financial position or results of operations. 
 
Reclassifications - 
Certain prior year amounts have been reclassified to conform to the fiscal 2002 presentation. 
 
3. U.S. dollar amounts: 
U.S. dollar amounts presented in the consolidated financial statements and related notes are included solely for the
convenience of the reader and are unaudited. These translations should not be construed as representations that the
yen amounts actually represent, or have been or could be converted into, U.S. dollars. For this purpose, the rate of
JPY133.25 = U.S. $1, the approximate current exchange rate at March 29, 2002, was used for the translation of the
accompanying consolidated financial amounts of Toyota as of and for the year ended March 31, 2002. 
 
4. Supplemental cash flow information: 
Cash payments for income taxes were JPY414,708 million, JPY330,203 million and JPY530,207 million ($3,979 million)
for the years ended March 31, 2000, 2001 and 2002, respectively. Interest payments during the years ended March 31,
2000, 2001 and 2002 were JPY237,155 million, JPY250,405 million and JPY241,251 million ($1,811 million),
respectively. 
 
Capital lease obligations of JPY81,701 million, JPY31,252 million and JPY2,888 million ($22 million) were incurred
for the years ended March 31, 2000, 2001 and 2002, respectively. 
 
5. Acquisitions and dispositions 
During the year ended March 31, 2001, Toyota's telecommunication subsidiary, IDO Corporation, merged with two
Japanese telecommunication companies and Toyota's ownership interest in the surviving entity, DDI Corporation
('KDDI'), became 13.3%. As a result, Toyota recognized a JPY180,950 million gain on the disposition of its IDO shares
which is included 'Other income (loss), net' in the accompany consolidated statements of income and Toyota's
consolidated financial statements no longer include the accounts of this former subsidiary from the merger date. The
book values of assets and liabilities of IDO at the date of the merger are as follows: 
 

                                                                              
                                                                              
                                                              Yen in millions 
                                                                              
                                          Assets                   JPY603,627 
                                          Liabilities               (571,150) 
 
During the year ended March 31, 2002, Toyota sold its industrial equipment businesses to an affiliated company. The
results of operations and book values of assets and liability of the industrial equipment business were immaterial.
The gain recognized by Toyota on the sale was immaterial.  
 
At March 31, 2001, Toyota had a 36.6% ownership interest in Hino Motor Corporation ('Hino') that was accounted for
using the equity method. Hino is primarily engaged in the design, manufacture and sale of trucks, buses and related
parts. In August 2001, Toyota acquired an additional ownership interest in Hino for JPY66,287 million ($497 million)
in cash. As a result, Toyota's ownership interests in Hino increased to 50.2% and Toyota's consolidated financial
statements include the accounts of Hino from the acquisition date. The fair values of assets acquired and liabilities
assumed at the date of acquisition based on the preliminary allocation of purchase price are as follows: 
 

                                                                                          
                                                                           U.S. dollars in 
                                                        Yen in millions        millions                              
                                                     For the year ended   For the year ended        
                                                               March 31,      March 31,                 
                                                                    2002           2002 
                                                                                        
                                                                                        
                                Assets acquired              JPY 829,413        $ 6,224 
                                Liabilities assumed            (674,154)        (5,059) 
                                Minority interest               (93,366)          (701) 
                                Goodwill                           4,394             33 
                                Less - Cash acquired            (34,801)          (261) 
                                Net cash paid                 JPY 31,486          $ 236 
 
The following represents the unaudited pro forma results of operations of Toyota for the year ended March 31, 2001
and 2002, as if the additional ownership interest in Hino had been acquired as of April 1, 2000. The pro forma
information, however, is not necessarily indicative of the results that would have resulted had the acquisition
occurred at the beginning of the periods presented, nor is it necessarily indicative of future results.  
 

                                                                                               
                                                                      
                                                Yen in millions             U.S. dollars in millions                    
                                             For the year ended                 For the year ended
                                                      March 31,                      March 31, 
                                                           2001                 2002            2002 
                                                                                                     
                                                                                                     
                   Net revenue                    JPY13,620,493        JPY14,552,408        $109,211 
                   Net income                           675,554              556,967           4,180 
                   Net income per share :                                                            
                   Basic                              JPY180.83            JPY152.37           $1.14 
                   Diluted                               180.83               152.37            1.14 
 
During the years ended March 31, 2001 and 2002, Toyota made a number of other acquisitions, however assets acquired
and liabilities assumed were immaterial. 
 
 
 



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