Toyota 2010 Annual Report Download - page 52

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TOYOTA ANNUAL REPORT 2010
decreased by ¥80.3 billion, or 31.3%, in Asia, and
decreased by ¥56.3 billion, or 39.1% in Other
compared with the prior fi scal year.
The following is a discussion of operating
income and loss in each geographic market.
󱛠Japan
Yen in millions
2009 vs. 2008
change
Changes in operating income and loss:
Eff ect of decrease in production
volume and vehicle unit sales
in the export markets and
other operational factors ·················· ¥ (730,000)
Eff ect of increase in cost reduction,
expenses and other eff ects ············· (947,817)
Total ········································································ ¥ (1,677,817)
The decrease in Japan was mainly due to the
¥700.0 billion impact of decreases in both
production volume and vehicle unit sales in the
export markets, partially off set by the decrease
in research and development expenses. The
decreases in both production volume and vehicle
unit sales in the export markets are attributable
to the diffi cult market conditions caused by the
downturn in the real economy.
󱛠North America
Yen in millions
2009 vs. 2008
change
Changes in operating income and loss:
Eff ect of decrease in production volume
and vehicle unit sales and other
operational factors ·······································
¥(580,000)
Eff ect of fl uctuation in foreign
currency translation rates ················· 52,700
Eff ect of increase in cost reduction,
expenses and other eff ects ············· (168,244)
Total ········································································ ¥(695,544)
The decrease in North America was mainly due
to the ¥400.0 billion impact of decreases in
both production volume and vehicle unit sales,
the increases in the provision for credit losses,
net charge-off s and provision for residual value
losses in sales fi nance subsidiaries in the United
States, which are included in Eff ect of increase
in cost reduction, expenses and other eff ects,
partially off set by the ¥52.7 billion impact of
the fl uctuations in foreign currency translation
rates. The decreases in both production volume
and vehicle unit sales in North America are
attributable to the rapid decline in vehicle unit
sales of commercial vehicles and passenger
vehicles due to the downturn in the market
stemming from the fi nancial crisis in the fall of
2008.
󱛠Europe
Yen in millions
2009 vs. 2008
change
Changes in operating income and loss:
Eff ect of decrease in production
volume and vehicle unit sales and
other operational factors ···················
¥(190,000)
Eff ect of fl uctuation in foreign
currency translation rates ·················
18,100
Eff ect of increase in cost reduction,
expenses and other eff ects ·············· (112,904)
Total ········································································· ¥(284,804)
The decrease in Europe was mainly due to
the ¥180.0 billion impact of decreases in both
production volume and vehicle unit sales,
partially off set by the ¥18.1 billion impact of
fl uctuations in foreign currency translation rates.
The decreases in both production volume and
vehicle unit sales in Europe was attributable
to the signifi cant decline in vehicle unit sales
in western Europe compared to the prior fi scal
year as a result of the rapid market contraction
due to the fi nancial crisis in the fall of 2008. The
decreases are also attributable to the fi scal year
󱛠Cost of Financing Operations
Yen in millions
2009 vs. 2008
change
Changes in cost of fi nancing operations:
Eff ect of fl uctuation in foreign
currency translation rates ·················· ¥ (206,400)
Eff ect of increase in provision for
residual value losses ····························· 70,000
Eff ect of increase in valuation losses on
interest rate swaps stated at fair value ·
12,200
Other ·································································· 43,569
Total ········································································· ¥ (80,631)
Cost of fi nancing operations decreased by ¥80.6
billion, or 7.5%, to ¥987.4 billion during fi scal 2009
compared with the prior fi scal year. The decrease
resulted primarily from the ¥206.4 billion impact
of fl uctuations in foreign currency translation
rates, partially off set by the ¥70.0 billion increase
in provision for residual value losses and the ¥12.2
billion increase in valuation losses on interest rate
swaps stated at fair value. The increase in provision
for residual value losses is primarily attributable to
the increase in provision for residual value losses
of operating lease vehicles resulting from the
decrease in the prices of used vehicles, particularly
of large vehicles with low fuel economy due to
the economic downturn. The increase in valuation
losses on interest rate swaps stated at fair value is
attributable to the valuation losses on fl oating to
fi xed interest rate swaps that are not designated as
hedges due to the decline in market interest rates.
Selling, General and Administrative Expenses
Selling, general and administrative expenses
increased by ¥36.2 billion, or 1.5%, to ¥2,534.7
billion during fi scal 2009 compared with the
prior fi scal year. This increase mainly refl ects
the ¥119.4 billion increase for the fi nancial
services operations, partially off set by the ¥95.2
billion decrease of marketing expense which is
attributable to reduced marketing costs realized
as a result of eff orts to improve earnings. The
increase in the fi nancial services operations is
primarily due to the ¥170.0 billion increase in
provision for credit losses and net charge-off s,
which is attributable to the rise in the ratio of
credit losses as a result of the economic downturn
mainly in the United States.
Operating Income and Loss
Yen in millions
2009 vs. 2008
change
Changes in operating income and loss:
Eff ect of decrease in vehicle unit sales and
changes in sales mix and other
operational factors ············································· ¥ (1,480,000)
Eff ect of decrease in parts sales ··················· (17,300)
Eff ect of fl uctuation in foreign currency
translation rates ······································ 30,900
Eff ect of decrease in research and
development expenses ······················ 54,800
Eff ect of increase in cost reduction,
expenses and other eff ects ·············· (1,319,786)
Total ········································································· ¥ (2,731,386)
Toyotas operating income decreased by ¥2,731.3
billion to an operating loss of ¥461.0 billion during
fi scal 2009 compared with the prior fi scal year. This
decrease was unfavorably aff ected by the ¥1,300.0
billion decrease in vehicle unit sales and the
changes in sales mix, the ¥1,319.7 billion increase
in cost reduction, expenses and other eff ects, and
the ¥17.3 billion decrease in parts sales, partially
off set by the ¥54.8 billion decrease in research and
development expenses.
During fi scal 2009, operating income (before the
elimination of intersegment profi ts) for signifi cant
geographic regions decreased by ¥1,677.8 billion
in Japan, decreased by ¥695.5 billion in North
America, decreased by ¥284.8 billion in Europe,
Financial Section
Financial Section Investor Information
Corporate Information Special Feature
Consolidated
Performance Highlights
Business Overview
Top Messages
Management's Discussion and Analysis of
Financial Condition and Results of Operations