Toyota 2007 Annual Report Download - page 117

ANNUAL REPORT 2007 115
Tax effects allocated to each component of other comprehensive income for the years ended March 31, 2005, 2006 and 2007 are as follows:
Yen in millions
Pre-tax Tax expense Net-of-tax
amount (benefit) amount
For the year ended March 31, 2005
Foreign currency translation adjustments ....................................................................... ¥ 76,089 ¥ (392) ¥ 75,697
Unrealized gains on securities:
Unrealized net holding gains arising for the year....................................................... 87,266 (35,081) 52,185
Less: reclassification adjustments for gains included in net income......................... (22,960) 9,230 (13,730)
Minimum pension liability adjustments ........................................................................... 16,354 (6,574) 9,780
Other comprehensive income.................................................................................. ¥ 156,749 ¥ (32,817)¥123,932
For the year ended March 31, 2006
Foreign currency translation adjustments ....................................................................... ¥ 272,214 ¥ (3,804) ¥268,410
Unrealized gains on securities:
Unrealized net holding gains arising for the year....................................................... 555,789 (223,427) 332,362
Less: reclassification adjustments for gains included in net income......................... (146,710) 58,977 (87,733)
Minimum pension liability adjustments ........................................................................... 8,260 (3,323) 4,937
Other comprehensive income.................................................................................. ¥ 689,553 ¥(171,577) ¥517,976
For the year ended March 31, 2007
Foreign currency translation adjustments ....................................................................... ¥ 133,835 ¥ (3,089) ¥130,746
Unrealized gains on securities:
Unrealized net holding gains arising for the year....................................................... 78,055 (31,378) 46,677
Less: reclassification adjustments for gains included in net income......................... (13,172) 5,295 (7,877)
Minimum pension liability adjustments ........................................................................... 5,854 (2,355) 3,499
Other comprehensive income.................................................................................. ¥ 204,572 ¥ (31,527) ¥173,045
U.S. dollars in millions
Pre-tax Tax expense Net-of-tax
amount (benefit) amount
For the year ended March 31, 2007
Foreign currency translation adjustments ....................................................................... $1,133 $ (26) $1,107
Unrealized gains on securities:
Unrealized net holding gains arising for the year....................................................... 661 (266) 395
Less: reclassification adjustments for gains included in net income......................... (111) 45 (66)
Minimum pension liability adjustments ........................................................................... 49 (20) 29
Other comprehensive income.................................................................................. $1,732 $(267) $1,465
In June 1997, the parent company’s shareholders approved a
stock option plan for board members. In June 2001, the share-
holders approved an amendment of the plan to include both
board members and key employees. Each year, since the plans’
inception, the shareholders have approved the authorization for
the grant of options for the purchase of Toyota’s common
stock. Authorized shares for each year that remain ungranted
are unavailable for grant in future years. Stock options granted
in and after August 2002 have terms ranging from 6 years to 8
years and an exercise price equal to 1.025 times the closing
price of Toyota’s common stock on the date of grant. These
options generally vest 2 years from the date of grant.
On June 22, 2007, at the Ordinary General Shareholders’
Meeting, the shareholders of the parent company approved the
authorization of an additional up to 3,500,000 shares for issuance
under the Toyota’s stock option plan for directors, officers and
employees of the parent company, its subsidiaries and affiliates.
Toyota adopted FAS 123(R) in fiscal year beginning from
April 1, 2006. For the year ended March 31, 2007, Toyota recog-
nized stock-based compensation expenses for stock options of
¥1,936 million ($16 million) as selling, general and administrative
expenses.
The weighted-average grant-date fair value of options grant-
ed during the years ended March 31, 2005, 2006 and 2007 was
¥1,139, ¥723, and ¥1,235 ($10), respectively. Before March 31,
2006, the fair value of options granted was amortized over the
option vesting period in determining the pro forma net income
described in note 2 to the consolidated financial statements.
On and after April 1, 2006, the fair value of options granted is
amortized over the option vesting period in determining net
income in the consolidated statements of income. The grant-
date fair value of options granted is estimated using the Black-
Scholes option pricing model with the following weighted-average
assumptions:
18. Stock-based compensation:
2005 2006 2007
Dividend rate.......................................................................................................................... 1.5% 2.1% 1.5%
Risk-free interest rate............................................................................................................. 1.2% 0.7% 1.4%
Expected volatility ................................................................................................................. 32% 27% 27%
Expected holding period (years) .......................................................................................... 5.3 4.0 5.0