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UNITED STATESSECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2010
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission File Number 1-9961
TOYOTA MOTOR CREDIT CORPORATION(Exact name of registrant as specified in its charter)
California(State or other jurisdiction ofincorporation or organization)
95-3775816(I.R.S. Employer
Identification No.)
19001 S. Western AvenueTorrance, California
(Address of principal executive offices)
90501(Zip Code)
Registrant's telephone number, including area code: (310) 468-1310Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of theSecurities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant wasrequired to file such reports), and (2) has been subject to such filing requirements for the past 90 days.Yes No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any,every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 ofthis chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit andpost such files).Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer,or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smallerreporting company in Rule 12b-2 of the Exchange Act.
Large accelerated filer __ Accelerated filer __
Non-accelerated filer Smaller reporting company __
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes __ No
As of July 31, 2010, the number of outstanding shares of capital stock, no par value per share, of the registrant was91,500, all of which shares were held by Toyota Financial Services Americas Corporation.
Reduced Disclosure Format
The registrant meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and istherefore filing this Form with the reduced disclosure format.
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TOYOTA MOTOR CREDIT CORPORATIONFORM 10-Q
For the quarter ended June 30, 2010
INDEXPART I .................................................................................................................................................. 3
Item 1. Financial Statements .................................................................................................................... 3Consolidated Statement of Income.......................................................................................................... 3Consolidated Balance Sheet.................................................................................................................... 4Consolidated Statement of Shareholders Equity .................................................................................... 5Consolidated Statement of Cash Flows................................................................................................... 6Notes to Consolidated Financial Statements .......................................................................................... 7
Item 2. Managements Discussion and Analysis................................................................................... 46Item 3. Quantitative and Qualitative Disclosures About Market Risk .................................................. 74Item 4. Controls and Procedures ........................................................................................................... 74
PART II............................................................................................................................................... 75Item 1. Legal Proceedings ..................................................................................................................... 75Item 1A. Risk Factors............................................................................................................................. 76Item 2. Unregistered Sales of Equity Securities and Use of Proceeds .................................................. 76Item 3. Defaults Upon Senior Securities ............................................................................................... 76Item 4. (Removed and Reserved) .......................................................................................................... 76Item 5. Other Information ..................................................................................................................... 76Item 6. Exhibits ..................................................................................................................................... 76Signatures ................................................................................................................................................ 77Exhibit Index ........................................................................................................................................... 78
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TOYOTA MOTOR CREDIT CORPORATIONCONSOLIDATED STATEMENT OF INCOME
(Unaudited)
Three months ended June 30,
(Dollars in millions) 2010 2009Financing revenues:
Operating lease $1,200 $1,196Retail 730 781Dealer 94 93
Total financing revenues 2,024 2,070
Depreciation on operating leases 811 893Interest expense 491 499
Net financing revenues 722 678
Insurance earned premiums and contract revenues 123 110Investment and other income, net 35 58Net financing revenues and other revenues 880 846
Expenses:Provision for credit losses (289) 328Operating and administrative 184 177Insurance losses and loss adjustment expenses 58 57
Total expenses (47) 562
Income before income taxes 927 284Provision for income taxes 357 108
Net income $570 $176
See Accompanying Notes to Consolidated Financial Statements.
4
TOYOTA MOTOR CREDIT CORPORATIONCONSOLIDATED BALANCE SHEET
(Unaudited)
(Dollars in millions) June 30, 2010 March 31, 2010
ASSETS
Cash and cash equivalents $4,839 $4,343Restricted cash 359 173Investments in marketable securities 2,660 2,521Finance receivables, net 56,692 55,087Investments in operating leases, net 17,773 17,151Other assets 2,160 1,918Total assets $84,483 $81,193
LIABILITIES AND SHAREHOLDER'S EQUITY
Debt $70,968 $69,179Deferred income taxes 3,645 3,290Other liabilities 4,032 3,451Total liabilities 78,645 75,920
Commitments and contingencies (See Note 13)
Shareholder's equity:Capital stock, no par value and $10,000 par value (100,000 shares
authorized; 91,500 issued and outstanding) at June 30, and March 31,2010, respectively 915 915
Additional paid-in-capital 1 1Accumulated other comprehensive income 99 104Retained earnings 4,823 4,253Total shareholder's equity 5,838 5,273Total liabilities and shareholder's equity $84,483 $81,193
The following table presents the assets of consolidated variable interest entities that can only be used tosettle obligations of the consolidated variable interest entities and the liabilities of those entities for whichcreditors (or beneficial interest holders) do not have recourse to our general credit. These assets andliabilities are included in the consolidated balance sheet above.
(Dollars in millions) June 30, 2010ASSETSFinance receivables, net $6,783Total assets $6,783
LIABILITIESDebt $6,356Other liabilities 1Total liabilities $6,357
See Accompanying Notes to Consolidated Financial Statements.
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TOYOTA MOTOR CREDIT CORPORATIONCONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY
(Unaudited)
(Dollars in millions)Capitalstock
Additionalpaid-in capital
Accumulatedother
comprehensive(loss) income
Retainedearnings Total
BALANCE AT MARCH 31, 2009 $915 $1 ($63) $3,240 $4,093
Net income for the three months endedJune 30, 2009 - - - 176 176
Net unrealized gain on available-for-salemarketable securities, net of taxprovision of $37 million - - 61 - 61
Reclassification adjustment for net lossincluded in net income, net of tax benefitof $2 million - - 4 - 4
Total comprehensive income - - 65 176 241
BALANCE AT JUNE 30, 2009 $915 $1 $2 $3,416 $4,334
BALANCE AT MARCH 31, 2010 $915 $1 $104 $4,253 $5,273
Net income for the three months endedJune 30, 2010 - - - 570 570
Net unrealized gain on available-for-salemarketable securities, net of tax provisionof $1 million - - 3 - 3
Reclassification adjustment for net gainincluded in net income, net of taxprovision of $5 million - - (8) - (8)
Total comprehensive income - - (5) 570 565
BALANCE AT JUNE 30, 2010 $915 $1 $99 $4,823 $5,838
See Accompanying Notes to Consolidated Financial Statements.
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TOYOTA MOTOR CREDIT CORPORATIONCONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)Three months ended June 30,
(Dollars in millions) 2010 2009Cash flows from operating activities:
Net income $570 $176Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 841 925Recognition of deferred income (300) (248)Provision for credit losses (289) 328Amortization of deferred origination costs 72 90Fair value adjustme