Toyota 2008 Annual Report Download - page 105

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•Annual Report 2008 • TOYOTA
Performance Messages from the Management &
•Overview •Management •Special Feature •Business Overview •Corporate Information •Financial Section •Investor Information •
Unrealized losses continuing over a 12 month period or more
in the aggregate were not material at March 31, 2007 and 2008.
At March 31, 2007 and 2008, debt securities classified as
available-for-sale mainly consist of government bonds and cor-
porate debt securities with maturities from 1 to 10 years.
Proceeds from sales of available-for-sale securities were
¥157,707 million, ¥148,442 million and ¥165,495 million ($1,652
million) for the years ended March 31, 2006, 2007 and 2008,
respectively. On those sales, gross realized gains were ¥2,104
million, ¥8,832 million and ¥18,766 million ($187 million) and
gross realized losses were ¥1,207 million, ¥317 million and ¥21
million ($0 million), respectively.
During the year ended March 31, 2006, in accordance with
EITF Issue No. 91-5, Nonmonetary Exchange of Cost-Method
Investments,
Toyota reclassified ¥143,366 million of gain from
Unrealized gains on securities included in “Accumulated other
comprehensive income” on the consolidated balance sheet to
Other income included in “Other income, net” on the consoli-
dated statement of income. The gain was recognized based on
the merger between UFJ Holdings, Inc. and Mitsubishi Tokyo
Financial Group, Inc. on October 1, 2005, and determined as
the amount between the cost of the pre-merger entity, UFJ
Holdings, Inc. common shares which Toyota had continuously
held and the fair market value of the post-merger entity,
Mitsubishi UFJ Financial Group, Inc. common shares which
Toyota received in exchange for UFJ Holdings, Inc. common
shares. The gain was non-cash gain and included in the cost of
the available-for-sale equity securities.
During the years ended March 31, 2006, 2007 and 2008,
Toyota recognized impairment losses on available-for-sale secu-
rities of ¥4,163 million, ¥4,614 million, and ¥11,346 million ($113
million), respectively, which are included in “Other income, net”
in the accompanying consolidated statements of income.
In the ordinary course of business, Toyota maintains long-
term investment securities, included in “Marketable securities
and other securities investments” and issued by a number of
non-public companies which are recorded at cost, as their fair
values were not readily determinable. Management employs a
systematic methodology to assess the recoverability of such
investments by reviewing the financial viability of the underlying
companies and the prevailing market conditions in which these
companies operate to determine if Toyota’s investment in each
individual company is impaired and whether the impairment is
other-than-temporary. Toyota performs this impairment test
semi-annually for significant investments recorded at cost. If the
impairment is determined to be other-than-temporary, the car-
rying value of the investment is written-down by the impaired
amount and the losses are recognized currently in operations.
Finance receivables consist of the following:
U.S. dollars
Yen in millions in millions
March 31, March 31,
2007 2008 2008
Retail ................................................................................................................................................. ¥ 7,005,631 ¥6,959,479 $ 69,463
Finance leases........................................................................................................................ 1,061,738 1,160,401 11,582
Wholesale and other dealer loans.................................................................................................. 2,342,926 2,604,411 25,995
10,410,295 10,724,291 107,040
Deferred origination costs .............................................................................................................. 108,076 106,678 1,065
Unearned income ............................................................................................................................ (403,191) (437,365) (4,366)
Allowance for credit losses ............................................................................................................. (112,116) (117,706) (1,175)
Total finance receivables, net ................................................................................................. 10,003,064 10,275,898 102,564
Less—Current portion ..................................................................................................................... (4,108,139) (4,301,142) (42,930)
Noncurrent finance receivables, net ...................................................................................... ¥ 5,894,925 ¥5,974,756 $ 59,634
Finance receivables: 7.
U.S. dollars in millions
March 31, 2008
Gross Gross
unrealized unrealized Fair
Cost gains losses value
Available-for-sale
Debt securities............................................................................................................. $25,980 $ 523 $ 47 $26,456
Equity securities........................................................................................................... 8,515 3,419 186 11,748
Total.......................................................................................................................... $34,495 $3,942 $233 $38,204
Securities not practicable to determine fair value
Debt securities............................................................................................................. $302
Equity securities........................................................................................................... 1,133
Total.......................................................................................................................... $1,435