Toyota 2010 Annual Report Download - page 92

TOYOTA ANNUAL REPORT 2010 90
and New Jersey were also consolidated.
The nearly identical complaints allege that
the defendants violated the Sherman Antitrust
Act by conspiring among themselves and with
their dealers to prevent the sale to United States
citizens of vehicles produced for the Canadian
market. The complaints allege that new vehicle
prices in Canada are 10% to 30% lower than
those in the United States and that preventing
the sale of these vehicles to United States citizens
resulted in United States consumers paying
excessive prices for the same type of vehicles.
The complaints seek permanent injunctions
against the alleged antitrust violations and
treble damages in an unspecifi ed amount. In
March 2004, the federal district court of Maine
(i) dismissed claims against certain Canadian
companies, including Toyota Canada, Inc., for lack
of personal jurisdiction but denied or deferred to
dismiss claims against certain other Canadian
companies, and (ii) dismissed the claim for
damages based on the Sherman Antitrust Act but
did not bar the plaintiff s from seeking injunctive
relief against the alleged antitrust violations. The
plaintiff s have submitted an amended compliant
adding a claim for damages based on state
antitrust laws and Toyota has responded to the
plaintiff s discovery requests. Toyota believes
that its actions have been lawful. In the interest
of quickly resolving these legal actions, however,
Toyota entered into a settlement agreement with
the plaintiff s at the end of February 2006. The
settlement agreement is pending the approval
of the federal district court, and immediately
upon approval the plaintiff s will, in accordance
with the terms of the settlement agreement,
withdraw all pending actions against Toyota in
the federal district court as well as all state courts
and all related actions will be closed.
Other Proceedings
Toyota has various other legal actions, other
governmental proceedings and other claims
pending against it, including other product
liability claims in the United States. Although
the claimants in some of these actions seek
potentially substantial damages, Toyota cannot
currently estimate its potential liability, damages
or range of potential loss, if any, beyond the
amounts accrued, with respect to these claims.
However, based upon information currently
available to Toyota, Toyota believes that its
losses from these matters, if any, would not have
a material adverse eff ect on Toyotas fi nancial
position, results of operations or cash fl ows.
Environmental matters and others
In October 2000, the European Union brought
into eff ect a directive that requires member
states to promulgate regulations implementing
the following: (i) manufacturers shall bear all or a
signifi cant part of the costs for taking back end-
of-life vehicles put on the market after July 1, 2002
and dismantling and recycling those vehicles.
Beginning January 1, 2007, this requirement
became applicable to vehicles put on the market
before July 1, 2002; (ii) manufacturers may not use
certain hazardous materials in vehicles to be sold
after July 2003; (iii) vehicles type-approved and
put on the market after December 15, 2008, shall
be re-usable and/or recyclable to a minimum of
85% by weight per vehicle and shall be re-usable
and/or recoverable to a minimum of 95% by
weight per vehicle; and (iv) end-of-life vehicles
must meet actual re-use of 80% and re-use as
material or energy of 85%, respectively, of vehicle
weight by 2006, rising respectively to 85% and
95% by 2015. A law to implement the directive
came into eff ect in all member states including
Bulgaria, Romania that joined the European
Union in January 2007. Currently, there are
uncertainties surrounding the implementation of
the applicable regulations in diff erent European
Union member states, particularly regarding
manufacturer responsibilities and resultant
expenses that may be incurred.
In addition, under this directive member
states must take measures to ensure that car
manufacturers, distributors and other auto-
related economic operators establish adequate
used vehicle collection and treatment facilities
and to ensure that hazardous materials and
recyclable parts are removed from vehicles prior
to shredding. This directive impacts Toyotas
vehicles sold in the European Union and Toyota
is introducing vehicles that are in compliance
with such measures taken by the member states
pursuant to the directive.
Based on the legislation that has been enacted
to date, Toyota has provided for its estimated
liability related to covered vehicles in existence
as of March 31, 2010. Depending on the
legislation that will be enacted subject to other
circumstances, Toyota may be required to revise
the accruals for the expected costs. Although
Toyota does not expect its compliance with the
directive to result in signifi cant cash expenditures,
Toyota is continuing to assess the impact of this
future legislation on its results of operations, cash
fl ows and fi nancial position.
Toyota purchases materials that are equivalent
to approximately 10% of material costs from a
supplier which is an affi liated company.
The parent company has a concentration
of labor supply in employees working under
collective bargaining agreements and a
substantial portion of these employees are
working under the agreement that will expire on
December 31, 2011.
The operating segments reported below are the
segments of Toyota for which separate fi nancial
information is available and for which operating
income/loss amounts are evaluated regularly
by executive management in deciding how to
allocate resources and in assessing performance.
The major portions of Toyotas operations on a
worldwide basis are derived from the Automotive
and Financial Services business segments. The
Automotive segment designs, manufactures
and distributes sedans, minivans, compact cars,
sport-utility vehicles, trucks and related parts
and accessories. The Financial Services segment
consists primarily of fi nancing, and vehicle and
equipment leasing operations to assist in the
merchandising of the parent company and its
affi liate companies products as well as other
products. The All Other segment includes the
design, manufacturing and sales of housing,
telecommunications and other business.
The following tables present certain informa-
tion regarding Toyotas industry segments and
operations by geographic areas and overseas
revenues by destination as of and for the years
ended March 31, 2008, 2009 and 2010.
Financial Section
Financial Section Investor Information
Corporate Information Special Feature
Consolidated
Performance Highlights
Business Overview
Top Messages
Notes to Consolidated Financial Statements
Segment data:
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