Toyota 2008 Annual Report Download - page 88

86 TOYOTA •Annual Report 2008 •
Financial Section
The following tables summarize Toyota’s contractual obligations and commercial commitments as of March 31, 2008:
Yen in millions
Payments Due by Period
Total Less than 1 year 1 to 3 years 3 to 5 years 5 years and after
Contractual Obligations:
Short-term borrowings (note 13)
Loans ............................................................................................ ¥ 1,226,717 ¥1,226,717 ¥ — ¥ — ¥ —
Commercial paper....................................................................... 2,326,004 2,326,004 — — —
Long-term debt* (note 13).............................................................. 8,613,799 2,668,022 3,418,054 1,376,392 1,151,331
Capital lease obligations (note 13) ................................................ 43,563 7,409 31,912 2,963 1,279
Non-cancelable operating lease obligations (note 22)................ 54,451 11,335 16,293 10,439 16,384
Commitments for the purchase of property,
plant and other assets (note 23)................................................... 173,720 122,833 15,682 17,560 17,645
Total.............................................................................................. ¥12,438,254 ¥6,362,320 ¥3,481,941 ¥1,407,354 ¥1,186,639
* “Long-term debt” represents future principal payments.
Toyota uses its securitization program as part of its funding for
its financial services operations. See note 7 to the consolidated
financial statements regarding the finance receivables.
■Credit Facilities with Credit Card Holders
Toyota’s financial services operation issues credit cards to cus-
tomers. As customary for credit card businesses, Toyota main-
tains credit facilities with holders of credit cards issued by
Toyota. These facilities are used upon each holders’ requests
up to the limits established on an individual holder’s basis.
Although loans made to customers through this facility are not
secured, for the purposes of minimizing credit risks and of
appropriately establishing credit limits for each individual credit
card holder, Toyota employs its own risk management policy
which includes an analysis of information provided by financial
institutions in alliance with Toyota. Toyota periodically reviews
and revises, as appropriate, these credit limits. Outstanding
credit facilities with credit card holders were ¥1,967.0 billion as
of March 31, 2008.
■Credit Facilities with Dealers
Toyota’s financial services operation maintains credit facilities
with dealers. These credit facilities may be used for business
acquisitions, facilities refurbishment, real estate purchases, and
working capital requirements. These loans are typically collater-
alized with liens on real estate, vehicle inventory, and/or other
dealership assets, as appropriate. Toyota obtains a personal
guarantee from the dealer or corporate guarantee from the
dealership when deemed prudent. Although the loans are typi-
cally collateralized or guaranteed, the value of the underlying
collateral or guarantees may not be sufficient to cover Toyota’s
exposure under such agreements. Toyota prices the credit facil-
ities according to the risks assumed in entering into the credit
facility. Toyota’s financial services operation also provides
financing to various multi-franchise dealer organizations,
referred to as dealer groups, often as part of a lending consor-
tium, for wholesale inventory financing, business acquisitions,
facilities refurbishment, real estate purchases, and working capi-
tal requirements. Toyota’s outstanding credit facilities with
dealers totaled ¥1,715.0 billion as of March 31, 2008.
Toyota enters into certain guarantee contracts with its dealers
to guarantee customers’ payments of their installment payables
that arise from installment contracts between customers and
Toyota dealers, as and when requested by Toyota dealers.
Guarantee periods are set to match the maturity of installment
payments, and at March 31, 2008, ranged 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 pay-
ments. The maximum potential amount of future payments as
of March 31, 2008 is ¥1,460.3 billion. Liabilities for these guaran-
tees of ¥3.9 billion have been provided as of March 31, 2008.
Under these guarantee contracts, Toyota is entitled to recover
any amounts paid by it from the customers whose obligations it
guaranteed.
For information regarding debt obligations, capital lease oblig-
ations, operating lease obligations and other obligations,
including amounts maturing in each of the next five years, see
notes 13, 22 and 23 to the consolidated financial statements. In
addition, as part of Toyota’s normal business practices, Toyota
enters into long-term arrangements with suppliers for purchas-
es of certain raw materials, components and services. These
arrangements may contain fixed/minimum quantity purchase
requirements. Toyota enters into such arrangements to facili-
tate an adequate supply of these materials and services.
Contractual Obligations and Commitments
Guarantees
Lending Commitments
Off-Balance Sheet Arrangements