Toyota 2005 Annual Report Download - page 113

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS >111
Commitments outstanding at March 31, 2005 for the
purchase of property, plant and equipment and other
assets approximated ¥87,617 million ($816 million).
Toyota enters into contracts with Toyota dealers to
guarantee customers’ payments of their installment pay-
ables that arise from installment contracts between cus-
tomers and Toyota dealers, as and when requested by
Toyota dealers. Guarantee periods are set to match
maturity of installment payments, and at March 31, 2005,
range from one month to 35 years; however, they are
generally shorter than the useful lives of products sold.
Toyota is required to execute its guarantee primarily when
customers are unable to make required payments. The
maximum potential amount of future payments as of
March 31, 2005 is ¥1,139,638 million ($10,612 million).
Liabilities for guarantees totaling ¥3,789 million ($35
million) have been provided as of March 31, 2005. Under
these guarantee contracts, Toyota is entitled to recover any
amount paid by Toyota from the customers whose
obligations Toyota has guaranteed.
In February 2003, Toyota, General Motors Corporation,
Ford, DaimlerChrysler, Honda, Nissan and BMW and
their U.S. and Canadian sales and marketing subsidiaries,
the National Automobile Dealers Association and the
Canadian Automobile Dealers Association were named as
defendants in purported nationwide class actions on
behalf of all purchasers of new motor vehicles in the
United States since January 1, 2001. 26 similar actions
were filed in federal district courts in California, Illinois,
New York, Massachusetts, Florida, New Jersey and
Pennsylvania. Additionally, 56 parallel class actions were
filed in state courts in California, Minnesota, New Mexico,
New York, Tennessee, Wisconsin, Arizona, Florida, Iowa,
New Jersey and Nebraska on behalf of the same purchasers
in these states. As of April 1, 2005, actions filed in federal
district courts were consolidated in Maine and actions
filed in the state courts of California and New Jersey were
also consolidated, respectively. The nearly identical com-
plaints allege that the defendants violated the Sherman
Antitrust Act by conspiring among themselves and with
their dealers to prevent the sale to United States citizens of
vehicles produced for the Canadian market. The com-
plaints allege that new vehicle prices in Canada are 10% to
30% lower than those in the United States and that
preventing the sale of these vehicles to United States
citizens resulted in United States consumers paying exces-
sive prices for the same type of vehicles. The complaints
seek permanent injunctions against the alleged antitrust
violations and treble damages in an unspecified amount.
In March 2004, the federal district court of Maine (i)
dismissed claims against certain Canadian sales and
marketing subsidiaries, including Toyota Canada, Inc., for
lack of personal jurisdiction but denied or deferred to
dismiss claims against certain other Canadian companies,
and (ii) dismissed the claim for damages based on the
Sherman Antitrust Act but did not bar the plaintiffs from
seeking injunctive relief against the alleged antitrust viola-
tions. The plaintiffs have submitted an amended com-
pliant adding a claim for damages based on state antitrust
laws and Toyota is now responding to the plaintiff’s
discovery requests. Toyota believes that its actions have
been lawful and intends to vigorously defend these cases.
Toyota has various legal actions, governmental proceed-
ings and other claims pending against it, including prod-
uct liability claims in the United States. Although the
claimants in some of these actions seek potentially sub-
stantial damages, Toyota cannot currently determine its
potential liability or the damages, if any, with respect to these
claims. However, based upon information currently avail-
able to Toyota, Toyota believes that its losses from these
matters, if any, would not have a material adverse effect on
Toyota’s financial position, operating results or cash flows.
23. OTHER COMMITMENTS AND CONTINGENCIES, CONCENTRATIONS AND FACTORS THAT MAY AFFECT
FUTURE OPERATIONS
Rental expenses under operating leases for the years ended March 31, 2003, 2004 and 2005 were ¥76,118 million,
¥81,912 million and ¥83,784 million ($780 million), respectively.
The minimum rental payments required under operating leases relating primarily to land, buildings and equipment
having initial or remaining non-cancelable lease terms in excess of one year at March 31, 2005 are as follows:
U.S. dollars
Years ending March 31, Yen in millions in millions
2006 ................................................................................................................................................................ ¥ 8,649 $ 81
2007 ................................................................................................................................................................ 7,027 65
2008 ................................................................................................................................................................ 4,983 46
2009 ................................................................................................................................................................ 4,270 40
2010 ................................................................................................................................................................ 3,567 33
Thereafter........................................................................................................................................................ 14,655 137
Total minimum future rentals................................................................................................................... ¥43,151 $402