Toyota 2005 Annual Report Download - page 101

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS >99
Management intends to reinvest certain undistributed
earnings of their foreign subsidiaries for an indefinite
period of time. As a result, no provision for income taxes
has been made on undistributed earnings of these
subsidiaries not expected to be remitted in the foreseeable
future aggregating ¥1,776,398 million ($16,542 million) as
of March 31, 2005. Toyota estimates an additional tax
provision of ¥113,951 million ($1,061 million) would be
required if the full amount of these accumulated earnings
became subject to Japanese taxes.
Operating loss carryforwards for tax purposes attributed
to consolidated subsidiaries at March 31, 2005 were
approximately ¥141,534 million ($1,318 million) and are
available as an offset against future taxable income of such
subsidiaries. The majority of these carryforwards expire in
years 2006 to 2012.
17. SHAREHOLDERS’ EQUITY
Changes in the number of shares of common stock issued have resulted from the following:
For the years ended March, 31,
2003 2004 2005
Common stock issued
Balance at beginning of year .................................................................................... 3,649,997,492 3,609,997,492 3,609,997,492
Issuance during the year .......................................................................................... — — —
Purchase and retirement.......................................................................................... (40,000,000) — —
Balance at end of year .......................................................................................... 3,609,997,492 3,609,997,492 3,609,997,492
The Japanese Commercial Code provides that an amount
equal to at least 10% of cash dividends and other distribu-
tions from retained earnings paid by the parent company
and its Japanese subsidiaries be appropriated as a legal
reserve. No further appropriation is required when total
amount of the legal reserve and capital surplus reaches
25% of stated capital. The legal reserve included in retained
earnings as of March 31, 2004 and 2005 was ¥133,432
million and ¥141,064 million ($1,314 million), respec-
tively. The legal reserve is restricted and unable to be used
for dividend payments, and is excluded from the
calculation of the profit available for dividend.
The amounts of statutory retained earnings of the parent
company available for dividend payments to shareholders
were ¥4,765,477 million and ¥4,864,555 million ($45,298
million) as of March 31, 2004 and 2005, respectively. In
accordance with customary practice in Japan, the appro-
priations are not accrued in the financial statements for
the corresponding period, but are recorded in the subse-
quent accounting period after shareholders’ approval has
been obtained. Retained earnings at March 31, 2005
include amounts representing year-end cash dividends of
¥130,723 million ($1,217 million), ¥40 ($0.37) per share,
which were approved at the shareholders’ meeting held on
June 23, 2005.
Retained earnings at March 31, 2005 include ¥919,685
million ($8,564 million) relating to equity in undistri-
buted earnings of companies accounted for by the equity
method.
In June 26, 1997, the shareholders of the parent com-
pany approved a stock repurchase policy at the Ordinary
General Shareholders’ Meeting in accordance with the
Japanese Commercial Code, which allows the company to
purchase treasury stock only for the purpose of retirement
of the stock with a resulting reduction in retained
earnings. Under the stock repurchase policy, the share-
holders authorized the parent company to repurchase up
to 370 million shares of its common stock without the
The deferred tax assets and liabilities that comprise the net deferred tax liability are included in the consolidated
balance sheets as follows:
U.S. dollars
Yen in millions in millions
March 31, March 31,
2004 2005 2005
Deferred tax assets
Deferred income taxes (Current assets)..................................................................... ¥ 457,161 ¥ 475,764 $ 4,430
Investments and other assets - other.......................................................................... 145,695 108,513 1,010
Deferred tax liabilities
Other current liabilities............................................................................................... (5,618) (8,040) (74)
Deferred income taxes (Long-term liabilities) .......................................................... (778,561) (811,670) (7,558)
Net deferred tax liability......................................................................................... ¥(181,323) ¥(235,433) $(2,192)