DATA SECTION 76 MESSAGE FROM THE CHIEF DIVISION OFFICER OF THE ADMINISTRATIVE DIVISION 78 FINANCIAL HIGHLIGHTS 80 ELEVEN-YEAR FINANCIAL SUMMARY 82 OUR INVESTMENTS IN BUSINESSES 84 GLOBAL NETWORK 86 PRINCIPAL CONSOLIDATED SUBSIDIARIES AND AFFILIATES BY EQUITY METHOD 92 ORGANIZATIONAL CHART 93 CORPORATE DATA INTEGRATED REPORT 2015 75 Message from the Chief Division Officer of the Administrative Division Toyota Tsusho’s Approach to Financial Administration and Investment Hideki Yanase Managing Director, Chief Division Officer of Administrative Division Q Please summarize the company’s perfor- Q How would you characterize mance in the year ended March 31, 2015. Toyota Tsusho’s financial strategy? In the fiscal year ended March 31, 2015, the global economy as a whole continued We strive to maintain a robust financial position that features a good balance to grow gradually. Economies in the industrialized world performed solidly, though between earnings and capital deployment. Our principal benchmarks are return on economic growth slowed in the world’s emerging nations. The U.S. economy equity (ROE), the net debt/equity ratio (DER), and cash flow. Our long-term targets benefited from robust personal consumption, and the European economy showed include keeping net DER to no more than 1.5 and to achieving ROE of 10% to 13%. signs of stabilizing, though the outlook remained murky, clouded by economic challenges in Greece and elsewhere. Among the emerging nations, economies in some resource-producing nations Quantitative Targets of the Long-Term Business Plan suffered from the sharp decline in crude oil prices. The Japanese economy slowed (Net income before in the first half of the fiscal year, affected adversely by the hike in the national amortization of goodwill) sales tax on April 1, 2014. It regained growth momentum in the fiscal second half, FY16/3 FY20/3 FY14/3 FY15/3 however, in what appeared to be a self-sustaining recovery. Driving the recovery (Billions of yen) (plan) (target) were growing capital spending and declining costs for imported energy. PL Net Sales 7,743.2 8,663.4 8,400.0 9,500.0 Our net sales increased ¥920.2 billion year on year to ¥8,663.4 billion and Operating 161.3 169.4 158.0 270.0 operating income increased ¥8.1 billion to ¥169.4 billion. Both of those figures Income were record highs. Net income declined ¥5.5 billion year on year to ¥67.5 billion, Net Income 73.0 67.5 70.0 140.0 reflecting a decline in investment return on equity-method affiliates. BS Total Assets 4,072.7 4,533.6 4,900.0 6,500.0 Shareholders’ 799.8 844.4 900.0 1,200.0 Consolidated Financial Results (Billions of yen) equity Comprehensive + 172.9 281.0 — — 12％ ■ FY14/3 income +920.2 +5％ (4) ■ FY15/3 +8.1 ％ 8,663.4 (7.2) Net assets 1,156.0 1,304.4 1,370.0 1,900.0 7,743.2 169.4 Net interest- 161.3 163.4 156.2 (7)％ 1,088.9 1,233.5 1,300.0 1,600.0 (5.5) Financial bearing debt Indicators 73.0 67.5 Net DER 1.1 1.1 1.1 No more than 1.5 Invest within the scope of Investment New investments 146.0 208.7 operating cash flows Net Sales Operating Income Ordinary Income Net Income Emphasis on fiscal soundness 76 TOYOTA TSUSHO CORPORATION | DATA SECTION | Q How would you characterize the company’s Q What about the dividend policy? investment approach? Our Global 2020 Vision calls for investing in reinforcing our established operations Toyota Tsusho has abided by a flexible dividend policy. That policy has provided for and in building new core business candidates. In the fiscal year ended March 31, paying dividends equivalent to 20% to 25% of net income while adjusting dividend 2015, our investment totaled ¥208.7 billion—¥61.9 billion in automotive opera- distributions in accordance with changes in the economic environment, progress in tions and ¥146.8 billion in non-automotive operations. investment plans, and other factors. Our annual dividend for the fiscal year ended We have abided for several years by two-year earmarks of ¥250.0 billion for March 31, 2015 increased ¥6 to ¥56 per share, for a dividend payout ratio of 29%. investment. Our future investment, however, will feature a more rigorously targeted We are preparing to adopt the International Financial Reporting Standards, approach to allocating investment. We will sharpen our focus on potential for growth and that will mean complying with more demanding expectations of the dividend and for profitability, and we will insist on funding investment with operating cash payout ratio. Our dividend policy will therefore target a minimum payout ratio of flows. Investment projects will be subject to stringent operational guidelines based 25% of net income before amortization of goodwill and provide stable, continuing on quantitative evaluation criteria. We will review every investment project annually returns to shareholders. For the fiscal year ending March 31, 2016, we plan to and will withdraw unhesitatingly from businesses that fail to meet our criteria for raise the annual dividend ¥6 to ¥62 per share. continuation. Our emphasis will consistently be on optimizing asset allocation. New Dividend Policy Progress with Investment Plan FY14 investment results (Billions of yen) ■ Target a minimum dividend payout ratio of 25% of net income before Details Amount amortization of goodwill. ■ ■ Enhancement and expansion of automobile production Provide stable, continuing returns to shareholders. facilities ■ Capital investment and network expansion of dealerships Automotive ■ Investment in an automobile parts wholesaler in Malaysia Dividend per share (¥ per share) and Thailand 62 56 Total 61.9 50 44 ■ Solar and wind power generation projects 42 (Eurus Energy Holdings Corporation) 28 29% ■ 24% 31% Non-automotive Gas development projects in Australia and Canada 22% 23% ■ Tender offer of Tomen Electronics Corporation 21% 20% 19% Total 146.8 Total 208.7 11/3 12/3 13/3 14/3 15/3 16/3 （Plan） Approach to New Investments ■ Dividend per share Dividend payout ratio Dividend payout ratio (before amortization of goodwill Sharpen the focus on potential for growth and profitability. ■ Keep investments within the scope of operating cash flow. ■ Apply strict quantitative evaluation criteria for investment return. ■ Prioritize investment projects at the division and companywide levels, allo- cating and reallocating resources in accordance with our specified priorities. INTEGRATED REPORT 2015 77 FINANCIAL HIGHLIGHTS TOYOTA TSUSHO CORPORATION and its consolidated subsidiaries Years ended March 31 Net Sales Operating Income (¥ billion) (¥ billion) +920.2 billion yen +8.1 billion yen 169.4 8,663.4 161.3 7,743.2 7,000.3 131.6 6,287.0 6,304.3 115.8 5,743.6 5,916.7 5,102.2 91.0 92.4 85.2 55.5 08/3 09/3 10/3 11/3 12/3 13/3 14/3 15/3 08/3 09/3 10/3 11/3 12/3 13/3 14/3 15/3 Net Income Segment Sales* Segment Operating Income* (¥ billion) (¥ billion) (¥ billion) –5.5 billion yen 8,663.4 169.4 73.0 67.5 66.2 67.4 67.5 47.1 40.2 27.3 12/3 13/3 14/3 15/3 12/3 13/3 14/3 15/3 ■ Metals ■ Chemicals & Electronics ■ Global Parts & Logistics ■ Food & Agribusiness 08/3 09/3 10/3 11/3 12/3 13/3 14/3 15/3 ■ Automotive ■ Consumer Products & Services ■ Machinery, Energy & Project Regional Sales Regional Operating Income (¥ billion) (¥ billion) 8,663.4 169.4 08/3 09/3 10/3 11/3 12/3 13/3 14/3 15/3 08/3 09/3 10/3 11/3 12/3 13/3 14/3 15/3 ■ Japan ■ Asia & Oceania ■ North America ■ Europe ■ Others * In April 2011, the Company reorganized. * Effective April 1, 2013, the name of the Consumer Products, Services & Materials Division was changed to the Consumer Products & Services Division. * Effective April 1, 2014, the name of the Global Production Parts & Logistics Division was changed to the Global Parts & Logistics Division. 78 TOYOTA TSUSHO CORPORATION | DATA SECTION | Total Assets Total Net Assets (¥ billion) (¥ billion) +460.9 billion yen +148.4 billion yen 4,533.6 1,304.4 4,072.7 1,156.0 3,592.3 920.0 2,837.4 2,603.2 751.7 2,274.5 2,436.2 639.7 650.2 667.3 2,130.0 586.9 08/3 09/3 10/3 11/3 12/3 13/3 14/3 15/3 08/3 09/3 10/3 11/3 12/3 13/3 14/3 15/3 Shareholders’ Equity Ratio Net Debt Equity Ratio (%) (Times) +0.9 points –0.02 points 25.7 1.31 24.9 24.4 24.8 22.5 22.6 23.9 1.12 21.2 1.08 1.04 1.10 1.02 0.96 0.98 08/3 09/3 10/3 11/3 12/3 13/3 14/3 15/3 08/3 09/3 10/3 11/3 12/3 13/3 14/3 15/3 ROE Cash Dividends per Share (%) (¥) –2.0 points +6.0 yen 56.0 11.6 10.7 50.0 9.6 42.0 44.0 8.0 8.4 30.0 26.0 28.0 7.2 6.4 16.0 4.9 08/3 09/3 10/3 11/3 12/3 13/3 14/3 15/3 08/3 09/3 10/3 11/3 12/3 13/3 14/3 15/3 INTEGRATED REPORT 2015 79 ELEVEN-YEAR FINANCIAL SUMMARY TOYOTA TSUSHO CORPORATION and its consolidated subsidiaries Years ended March 31 (¥ billion) 8,000 6,000 4,000 2,000 ■ Net sales (left scale) ■ Net income (right scale) 0 (Note 1) 2005/3 2006/3 2007/3 2008/3 2009/3 Results of Operations: Net Sales (Note 3) ¥3,315,831 ¥3,945,319 ¥6,212,726 ¥7,000,353 ¥6,286,996 Gross Profit 175,683 221,593 328,459 369,524 326,679 SG&A Expenses 119,368 141,536 218,456 237,853 235,661 Operating Income 56,315 80,057 110,003 131,671 91,017 Share of Profit of Entities Accounted for Using Equity Method 2,602 1,180 7,342 11,065 6,610 Net Income 37,522 45,733 77,212 67,506 40,224 Financial Position at Year-End: Total Assets ¥1,198,394 ¥1,602,702 ¥2,462,229 ¥2,603,207 ¥2,130,089 Total Net Assets (Note 4) 237,132 314,319 626,539 639,731 586,996 Net Interest-Bearing Debt 319,785 431,844 677,580 600,250 573,920 Cash Flows: Net Cash Provided by Operating Activities ¥ 17,836 ¥ 33,089 ¥ 44,599 ¥ 104,728 ¥ 123,760 Net Cash Used in Investing Activities (29,410) (119,379) (31,159) (36,717) (54,827) Net Cash Provided by (Used in) Financing Activities 12,027 90,453 (46,555) (23,058) 4,614 Cash and Cash Equivalents at End of Period 69,548 75,032 125,603 174,197 242,530 Per Share: Net Income: Basic ¥132.98 ¥161.88 ¥231.47 ¥192.44 ¥114.73 Diluted (Note 5) 132.11 160.75 230.30 192.08 114.72 Cash Dividends for the Year 12.00 18.00 26.00 30.00 26.00 Dividend Payout Ratio 9.0% 11.1% 11.2% 15.6% 22.7% Financial Measures: ROE 17.6% 16.6% 15.7% 11.6% 7.2% Shareholders’ Equity Ratio 19.8% 19.6% 23.5% 22.5% 24.9% Net Debt Equity Ratio (times) 1.35 1.37 1.17 1.02 1.08 Common Stock: Number of Shares Outstanding at Year-End 282,867 282,867 354,056 354,056 354,056 Notes: 1.