form10ka2_07282008.htm

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QUlGfxIGaityhO3LynXmap+iu+kn5d5lU0EFv794xBaJ5pL7Q6j0ZG0VTwygIphK dhhuj/9GvkdaL5ort+74NA== 0000834071-08-000223.txt : 20080730 0000834071-08-000223.hdr.sgml : 20080730 20080730162902 ACCESSION NUMBER: 0000834071-08-000223 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20080728 FILED AS OF DATE: 20080730 DATE AS OF CHANGE: 20080730 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TOYOTA MOTOR CREDIT CORP CENTRAL INDEX KEY: 0000834071 STANDARD INDUSTRIAL CLASSIFICATION: PERSONAL CREDIT INSTITUTIONS [6141] IRS NUMBER: 953775816 STATE OF INCORPORATION: CA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-09961 FILM NUMBER: 08979285 BUSINESS ADDRESS: STREET 1: 19001 S. WESTERN AVENUE CITY: TORRANCE STATE: CA ZIP: 90509 BUSINESS PHONE: (310) 468-1310 MAIL ADDRESS: STREET 1: 19001 S. WESTERN AVENUE CITY: TORRANCE STATE: CA ZIP: 90509 10-K/A 1 form10ka2_07282008.htm FORM 10-K/A AMENDMENT #2, JULY 28, 2008 form10ka2_07282008.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

(Amendment No. 2)

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2008

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE 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 of incorporation or organization)	95-3775816 (I.R.S. Employer Identification No.)

19001 S. Western Avenue Torrance, California (Address of principal executive offices)	90501 (Zip Code)

Registrant's telephone number, including area code: (310) 468-1310

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered

4.40% Fixed Rate Medium-Term Notes, Series B due October 1, 2008	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

(Title of class)

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes x No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K/A or any amendment to this Form 10-K/A. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer __ Accelerated filer __

Non-accelerated filer x (Do not check if a smaller reporting company) 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 x

As of April 30, 2008, the number of outstanding shares of capital stock, par value $10,000 per share, of the registrant was 91,500, all of which shares were held by Toyota Financial Services Americas Corporation.

Documents incorporated by reference: None

Reduced Disclosure Format

The registrant meets the conditions set forth in General Instruction I(1)(a) and (b) of Form 10-K and is therefore filing this Form 10-K/A with the reduced disclosure format.

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EXPLANATORY NOTE

This Form 10-K/A is being filed to amend the Toyota Motor Credit Corporation (“TMCC”) Annual Report on Form 10-K/A for the fiscal year ended March 31, 2008 which was filed on July 21, 2008. This Form 10-K/A is being filed to restate our consolidated financial statements and amendments to related disclosures as of March 31, 2008 and for the fiscal year ended March 31, 2008. Additionally, we are also restating previously reported quarterly information relating to the three month periods ended December 31, 2007 and March 31, 2008.

This annual report on Form 10-K/A reflects two restatements. The restatements arose from management’s determination that TMCC had made errors relating to non-cash items resulting in certain debt and derivative transactions denominated in foreign currencies not being recorded properly. We identified the error which led to the previous restatement subsequent to the filing on June 6, 2008 of our Form 10-K for the fiscal year ended March 31, 2008 during the process of implementing a new debt and derivative accounting system in an attempt to remedy an internal control deficiency we had previously identified. That error is described below under “Previous Restatement.” We identified the error which led to the current restatement during the preparation of our Form 10-Q footnote disclosures for the quarter ended June 30, 2008 subsequent to the filing of our previous restatement on Form 10-K/A. The error which led to the current restatement occurred in a different process than the error identified in the previous restatement reflected in the Form 10-K/A filed on July 21, 2008. The previous error related to the summation of amounts to determine the market value of debt whereas this error was isolated to the recording of the market values of certain derivatives. The error which led to the current restatement is described below under “Current Restatement.”

Current Restatement

We fund our operating activities using many different types of notes payable and provide funding assistance to certain affiliates to support their operations. Certain of these transactions are denominated in foreign currencies. At the time of funding and note issuance or loan origination, we enter into derivative transactions to hedge the interest rate and foreign currency exposure in the note payable or loan receivable. During the preparation of our Form 10-Q footnote disclosures for the quarter ended June 30, 2008, we examined market values used for certain foreign currency derivatives relating to loans to an affiliate because the relationship of the derivatives’ value to the related foreign currency loan receivables’ value did not appear correct. Upon further investigation, we determined that an error had been made in recording the derivatives’ market values. The error was confined to a single type of foreign exchange forward transactions relating to loans to an affiliate for which valuations were incorrectly recorded as foreign exchange forward purchases rather than foreign exchange forward sales. The error resulted in these derivatives being incorrectly recorded in a gain position as compared to a loss position resulting in an understatement of interest expense. The error, which originated in the quarter ended December 31, 2007, was not a result of misapplication of Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities, as amended” (“SFAS 133”) but instead arose from control deficiencies. The effect of the error was to overstate other assets and understate interest expense in the third and fourth quarters of the fiscal year ended March 31, 2008. The aggregate effect of this error for the fiscal year ended March 31, 2008 is a $27 million increase in our net loss previously reported on July 21, 2008.

In order to correct the valuation error described above, we are restating our consolidated financial statements for the fiscal year ended March 31, 2008 and for the third and fourth quarters in the fiscal year ended March 31, 2008.

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Previous Restatement

The previous restatement related to certain instances where market values of the foreign currency denominated debt were incorrectly recorded resulting in an understatement of debt and interest expense. The error was not a result of misapplication of SFAS 133 but instead was clerical in nature relating to certain manual processes. The cumulative effect of the error was to understate debt and interest expense in each quarter beginning in the fiscal year ended March 31, 2005 when we began entering into these types of transactions. The impact of the error relating to fiscal year ended March 31, 2005 was considered inconsequential and as such the correction of this error has been recorded in the fiscal year ended March 31, 2006. Therefore, our financial statements for the fiscal year ended March 31, 2005 have not been restated.

Footnotes 1 and 19 to the Consolidated Financial Statements included herein also contain information regarding the nature and impact of the Restatement.

The following items have been amended in this Form 10-K/A as a result of the restatement:

·	Part I – Item 1 – Business

·	Part I – Item 1A – Risk Factors

·	Part II – Item 6 – Selected Financial Data

·	Part II – Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations

·	Part II – Item 7A – Quantitative and Qualitative Disclosures About Market Risk

·	Part II – Item 8 – Financial Statements and Supplementary Data

·	Part II – Item 9A – Controls and Procedures; and

·	Part IV– Item15 – Exhibits, Financial Statement Schedules and Reports on Form 8-K

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TOYOTA MOTOR CREDIT CORPORATION

FORM 10-K/A

For the fiscal year ended March 31, 2008

INDEX

PART I	6
ITEM 1. BUSINESS	6
ITEM 1A. RISK FACTORS	16
ITEM 1B. UNRESOLVED STAFF COMMENTS	20
ITEM 2. PROPERTIES	20
ITEM 3. LEGAL PROCEEDINGS	21
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	21
PART II	21
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	21
ITEM 6. SELECTED FINANCIAL DATA	22
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS	24
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	86
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	89
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	89
CONSOLIDATED BALANCE SHEET	90
CONSOLIDATED STATEMENT OF INCOME	91
CONSOLIDATED STATEMENT OF SHAREHOLDER'S EQUITY	92
CONSOLIDATED STATEMENT OF CASH FLOWS	93
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	149
ITEM 9A. CONTROLS AND PROCEDURES	149
ITEM 9B. OTHER INFORMATION	150
PART III	151
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	151
ITEM 11. EXECUTIVE COMPENSATION	154
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	154
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE	154
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES	155
PART IV	155
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES	155
SIGNATURES	156
Exhibit Index	158

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PART I

ITEM 1. BUSINESS

GENERAL

Toyota Motor Credit Corporation was incorporated in California in 1982 and commenced operations in 1983. References herein to “TMCC” denote Toyota Motor Credit Corporation, and references herein to “we”, “our”, and “us” denote Toyota Motor Credit Corporation and its consolidated subsidiaries. We are wholly-owned by Toyota Financial Services Americas Corporation (“TFSA”), a California corporation, which is a wholly-owned subsidiary of Toyota Financial Services Corporation (“TFSC”), a Japanese corporation. TFSC, in turn, is a wholly-owned subsidiary of Toyota Motor Corporation (“TMC”), a Japanese corporation. TFSC manages TMC’s worldwide financial services operations. TMCC is marketed under the brands of Toyota Financial Services and Lexus Financial Services.

We provide a variety of finance and insurance products to authorized Toyota and Lexus vehicle dealers and, to a lesser extent, other domestic and import franchise dealers (collectively referred to as “vehicle dealers”) and their customers in the United States (excluding Hawaii) (the “U.S.”) and Puerto Rico. We also provide finance products to commercial and industrial equipment dealers (“industrial equipment dealers”) and their customers. Our products fall primarily into the following finance and insurance product categories:

§	Finance - We provide a broad range of finance products including retail financing, leasing, and dealer financing to vehicle and industrial equipment dealers and their customers.

§	Insurance - Through a wholly-owned subsidiary, we provide marketing, underwriting, and claims administration related to covering certain risks of vehicle dealers and their customers. We also provide coverage and related administrative services to our affiliates.

We support growth in earning assets through funding obtained in the capital markets as well as funds provided by operating activities. Refer to the “Liquidity and Capital Resources” section of Item 7., “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (“MD&A”) for a detailed discussion of our funding activities. A more detailed description of the products and services offered by us is contained within this Business section. Refer to Note 18 – Segment Information of the Notes to Consolidated Financial Statements for financial information including assets, revenues, and net income generated by these segments.

We primarily acquire and service finance, lease, and insurance contracts from vehicle dealers through 30 dealer sales and services offices (“DSSOs”) located throughout the U.S. and three regional customer service centers (“CSCs”) and from industrial equipment dealers through a corporate department located at our headquarters in Torrance, California. The DSSOs primarily support vehicle dealer financing needs by providing services such as acquiring finance and lease contracts from vehicle dealers, financing inventories, and financing other dealer activities and requirements such as business acquisitions, facilities refurbishment, real estate purchases, and working capital requirements. The DSSOs also provide support for our insurance products sold in the U.S. The CSCs support customer account servicing functions such as collections, lease terminations, and administration of retail and lease customer accounts. The Central region CSC also supports insurance operations by providing customer service and handling claims processing. Refer to Item 2., “Properties” for information on the geographical location of the DSSOs and CSCs.

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Public Filings

Our filings with the Securities and Exchange Commission (“SEC”) may be read and copied at the SEC’s Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Our filings may also be found by accessing the SEC website (http://www.sec.gov). The SEC website contains reports, registration statements, proxy and information statements, and other information regarding issuers that file electronically with the SEC. A link to the SEC website is also contained on our website located at: www.toyotafinancial.com under “About Us, Investor Relations”. We will make available, without charge, electronic or paper copies of our filings upon written request to:

Toyota Motor Credit Corporation

19001 South Western Avenue

Torrance, CA 90501

Attention: Corporate Communications

TMC files periodic reports and other information with the SEC, which can be read and copied at the SEC’s Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. TMC’s filings may also be found on its website located at: www.toyota.com under “Company Info, Our Company, Our Business, Investor Relations, Presentations and SEC Filings”.

Seasonality

Revenues generated by receivables we own are generally not subject to seasonal variations. Although financing volume is subject to a certain degree of seasonality, this seasonality does not have a significant impact on revenues as collections, generally in the form of fixed payments, occur over the course of several years. The automotive finance industry is subject to seasonal variations in credit losses, which are typically higher in the first and fourth calendar quarters of the year.

Geographic Distribution of Operations

As of March 31, 2008, approximately 22 percent of managed vehicle retail and lease assets were located in California, 10 percent in Texas, 7 percent in New York, and 6 percent in New Jersey. Any material adverse changes to California’s, Texas’, New York’s, or New Jersey’s economies or applicable laws could have an adverse effect on our financial condition and results of operations.

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FINANCE OPERATIONS

We provide retail financing, leasing, wholesale financing, and certain other financial products and services to authorized Toyota and Lexus vehicle dealers and, to a lesser extent, other domestic and import franchised dealers and their customers in the U.S. and the Commonwealth of Puerto Rico. We also offer financing for various industrial and commercial products such as forklifts, light and medium-duty trucks, and electric vehicles. Gross revenues related to transactions with industrial equipment dealers contributed 3 percent to total gross revenues in both fiscal 2008 and 2007, and 4 percent in fiscal 2006.

The table below summarizes our financing revenues, net of depreciation by primary product.

	Years Ended March 31,
	2008	2007	2006
Percentage of financing revenues, net of depreciation:
Operating leases, net of depreciation	23%	24%	22%
Retail financing1	64%	62%	65%
Dealer financing	13%	14%	13%
Financing revenues, net of depreciation	100%	100%	100%

1 Includes direct finance lease revenues.

Retail and Lease Financing

Underwriting

We acquire new and used vehicle and industrial equipment finance and lease contracts primarily from Toyota and Lexus vehicle dealers and industrial equipment dealers. Dealers transmit customer applications electronically to our online system for contract acquisition. Applications that meet certain income, credit, and other requirements are approved by the system while other applications are further analyzed by credit analysts. We use a proprietary credit scoring system for decisioning credit applications. If approved, we acquire the retail finance contracts and a security interest in the vehicle or industrial equipment that is financed under the contract and we acquire the lease contracts and concurrently assume ownership of the leased vehicles or industrial equipment. We view our lease arrangements, including our operating leases, as financing transactions as we do not seek to re-lease the vehicles or equipment upon default or at lease termination.

We utilize a tiered pricing program for retail and lease contracts. The program matches customer risk with contract rates charged to allow for a range of risk levels. Generally, each approved application is assigned a credit tier. We review and adjust rates regularly based on competitive and economic factors. Rates vary based on credit tier, term, and collateral (if applicable), including whether a new or used vehicle is being financed. Special rates may apply as a result of promotional efforts through subvention programs.

We regularly review and analyze our retail and lease portfolio to evaluate the effectiveness of our underwriting guidelines and purchasing criteria.

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Servicing

We also service our retail and lease contracts. Each of our CSCs service the vehicle retail and lease contracts using the same servicing system and procedures, except that centralized tracking units monitor bankruptcy administration, post-charge-off, and recovery. Our industrial equipment retail and lease contracts are serviced at a centralized facility. The collection department manages the liquidation of each retail and lease contract. We consider a customer to be past due if less than 90% of a regularly scheduled payment is received by the due date.

We use a behavioral-based collection strategy to minimize risk of loss and employ various collection methods. Upon commencement of the contracts, we perfect our security interests through state Department of Motor Vehicles (or equivalent) Certificate of Title filings in the retail vehicles financed and through Uniform Commercial Code (“UCC”) filings in the industrial equipment financed. We have the right to repossess the assets if customers fail to meet contractual obligations and the right to enforce collection actions against the obligors under the contracts.

We generally determine whether to commence repossession efforts before an account is 60 days past due. Repossessed vehicles are held in inventory to comply with statutory requirements and then sold at private auctions, unless public auctions are required by applicable law. Any unpaid amounts remaining after sale or after full charge off are pursued by us to the extent practical and legally permitted. Collections of deficiencies are administered at a centralized facility. Our policy is to charge off a retail or lease contract as soon as disposition of the vehicle has been effected and sales proceeds have been received, but may in some circumstances charge-off a retail or lease contract prior to repossession. When repossession and disposition of the collateral has not been effected, our policy is to charge off as soon as we determine that the vehicle cannot be recovered, but not later than when the contract is 150 days contractually delinquent. Bankrupt accounts may be charged off after 150 days. We sell the vehicles or industrial equipment through vehicle or industrial equipment dealers or physical auctions. Repossessed vehicles are sold through a variety of distribution channels, similar to the sale of vehicles returned at lease end. Refer to the “Residual Value Risk” section of the MD&A for further discussion of our remarketing activities.

We may, in accordance with our customary servicing procedures, waive any prepayment charge, late payment charge, or any other fees that may be collected in the ordinary course of servicing the retail and lease account. In addition, we may defer a customer’s obligation to make a payment by extending the contract term.

Substantially all of our retail and operating lease receivables are non-recourse to the vehicle and industrial equipment dealers, which relieves the vehicle and industrial equipment dealers from financial responsibility in the event of repossession.

We may experience a higher risk of loss if customers fail to maintain required insurance coverage. The terms of our retail financing programs require customers to maintain physical damage insurance covering loss or damage to the financed vehicle or industrial equipment in an amount not less than the full value of the vehicle or equipment. TMCC currently does not monitor ongoing insurance compliance as part of its customary servicing procedures for retail accounts.

Our vehicle lease contracts require lessees to maintain minimum liability insurance and physical damage insurance covering loss or damage to the leased vehicle in an amount not less than the full value of the vehicle. TMCC monitors ongoing insurance compliance only in certain vicarious liability states for lease contracts. Refer to the “Regulatory Environment” section of this Business section for further discussion of this issue.

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We are also responsible for the residual value of the leased asset if the lessee, vehicle dealer, or industrial equipment dealer does not purchase the asset at lease maturity. At the end of the lease term, lease customers have the option to purchase the leased asset at the contractual residual value or return the leased asset to the vehicle or industrial equipment dealer. If the leased asset is returned to the vehicle or industrial equipment dealer, the vehicle or industrial equipment dealer has the option of purchasing the leased asset or returning it to us. In an effort to minimize losses incurred at lease maturity, we have developed remarketing strategies to maximize proceeds and minimize disposition costs on used vehicles and industrial equipment sold at lease termination. We use various channels to sell vehicles returned at lease maturity. Refer to the “Residual Value Risk” section of the MD&A for further discussion of our remarketing activities. Industrial equipment returned by the lessee or industrial equipment dealer is sold through authorized Toyota industrial equipment dealers or wholesalers using a bidding process.

Toyota Lease Trust, a Delaware business trust (the “Titling Trust”), acts as lessor and holds title to leased vehicles in specified states. This arrangement was established to facilitate a previously utilized lease securitization program. Lease contracts acquired by the Titling Trust from Toyota and Lexus vehicle dealers are serviced by TMCC in the same manner as lease contracts owned directly by us. We hold an undivided trust interest in lease contracts owned by the Titling Trust, and these lease contracts are included in our lease assets unless and until such time as the interests in the contracts are transferred in a securitization transaction. We do not presently have an active lease securitization program.

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Dealer Financing

Dealer financing is comprised of wholesale financing and other financing options designed to meet dealer business needs.

Wholesale Financing

We provide wholesale financing, also referred to as floorplan financing, to vehicle and equipment dealers for inventories of new and used Toyota, Lexus, and other vehicles and industrial equipment. We acquire a security interest in vehicles financed at wholesale, which we perfect through UCC filings, and these financings may be backed by corporate or individual guarantees from, or on behalf of, participating vehicle and industrial equipment dealers, dealer groups, or dealer principals. In the event of vehicle or industrial equipment dealer default under a wholesale loan arrangement, we have the right to liquidate assets in which we have a perfected security interest and seek legal remedies pursuant to the wholesale loan agreement and any applicable guarantees.

TMCC and Toyota Motor Sales, U.S.A., Inc. (“TMS”), our affiliate, have entered into an Amended and Restated Repurchase Agreement. This agreement states that TMS will arrange for the repurchase of new Toyota and Lexus vehicles at the aggregate cost financed by TMCC in the event of vehicle dealer default under floorplan financing. TMCC also entered into similar agreements with Toyota Material Handling, U.S.A., Inc. (“TMHU”), Hino Motor Sales, U.S.A., Inc. (“HINO”), and other domestic and import manufacturers. TMHU is the primary distributor of Toyota lift trucks in the U.S., and HINO is the exclusive U.S. distributor of commercial trucks manufactured by Hino Motors Ltd. of Japan.

Other Dealer Financing

We extend term loans and revolving lines of credit to vehicle and industrial equipment dealers for business acquisitions, facilities refurbishment, real estate purchases, and working capital requirements. These loans are typically secured with liens on real estate, vehicle inventory, and/or other dealership assets, as appropriate, and usually are guaranteed by the personal or corporate guarantees of the dealer principals or dealerships. We also provide financing to various multi-franchise dealer organizations, referred to as dealer groups, often as part of a lending consortium, for wholesale, working capital, real estate, and business acquisitions. These loans are typically collateralized with liens on real estate, vehicle inventory, and/or other dealership assets, as appropriate. We obtain a personal guarantee from the vehicle or industrial equipment dealer or corporate guarantee from the dealership when deemed prudent. Although the loans are typically collateralized or guaranteed, the value of the underlying collateral or guarantees may not be sufficient to cover our exposure under such agreements. We price the credit facilities according to the risks assumed in entering into the credit facility and competitive factors.

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INSURANCE OPERATIONS

TMCC markets its insurance products through Toyota Motor Insurance Services, Inc. (“TMIS”), a wholly-owned subsidiary. TMIS and its insurance company subsidiaries’ principal activities include marketing, underwriting, and claims administration related to covering certain risks of Toyota, Lexus, and other domestic and import franchise dealers and their customers. TMIS’ primary business consists of issuing vehicle service and maintenance contracts and guaranteed auto protection (“GAP”) agreements sold to customers by or through Toyota and Lexus vehicle dealers, and certain other domestic or import vehicle dealers in the U.S. TMIS also obtains a portion of vehicle service contract business by providing TMS coverage on certified Toyota and Lexus pre-owned vehicles. TMIS also provides other coverage and related administrative services to our affiliates.

Changes in the volume of vehicle sales, changes in vehicle dealers’ utilization of programs offered by TMIS, or changes in the level of coverage purchased by affiliates could materially impact the level of TMIS operations. Gross revenues from insurance operations comprised 6 percent, 7 percent, and 6 percent of total gross revenues for fiscal 2008, 2007, and 2006, respectively.

Products and Services

Vehicle Service Agreements, Certified Pre-owned, and GAP

Vehicle service agreements (“VSA”) offer vehicle owners and lessees mechanical breakdown protection for new and used vehicles secondary to the manufacturer’s new vehicle warranty. VSA coverage is available on Toyota and Lexus vehicles and other domestic and import vehicles. Certified pre-owned contracts offer coverage on Toyota and Lexus vehicles only. GAP insurance, or debt cancellation agreements, provides coverage for a lease or retail contract deficiency balance in the event of a total loss of the covered vehicle.

Wholesale Inventory

TMIS, through its wholly-owned subsidiary, provides insurance to TMCC covering Toyota, Lexus, and certain other domestic and import vehicle dealers’ inventory financed by TMCC. TMIS has obtained reinsurance on the inventory insurance policy covering the excess of certain dollar maximums per occurrence and in the aggregate. Through reinsurance, TMIS limits its exposure to losses by obtaining the right to reimbursement from the assuming company for the reinsured portion of losses.

Other Products

TMIS provides prepaid maintenance programs covering Toyota, Lexus and certain other domestic and import vehicles. TMIS, through its wholly-owned subsidiary, provides umbrella liability insurance to TMS and affiliates covering certain dollar value layers of risk above various primary or self-insured retentions. On all layers in which TMIS has provided coverage, 99 percent of the risk has been ceded to various reinsurers.

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RELATIONSHIPS WITH AFFILIATES

Our business is substantially dependent upon the sale of Toyota and Lexus vehicles and our ability to offer competitive financing and insurance products in the U.S. TMS is the primary distributor of Toyota and Lexus vehicles in the U.S. Automobiles and light trucks sold by TMS totaled 2.6 million units during both fiscal 2008 and fiscal 2007, and totaled 2.3 million units during fiscal 2006. Toyota and Lexus vehicles accounted for approximately 16 percent of all retail automobile and light duty truck unit sales volume in the U.S during both fiscal 2008 and fiscal 2007, while accounting for 13 percent of all retail automobile and light duty truck unit sales volume in the U.S during fiscal 2006.

Certain lease and retail financing programs we have offered on vehicles and industrial equipment are subvened by our affiliates. TMS sponsors subvention programs on certain new and used Toyota and Lexus vehicles that result in reduced scheduled payments to qualified retail and lease customers. Reduced scheduled payments on certain Toyota industrial equipment to qualified lease and retail financing customers are subvened by various affiliates.

Subvention amounts received in connection with these programs typically approximate the amounts required by TMCC to maintain yields at levels consistent with standard program levels. The level of subvention program activity varies based on our affiliates’ marketing strategies, economic conditions, and level of vehicle sales. Subvention amounts received vary based on the mix of Toyota and Lexus vehicles and timing of programs and are earned over expected retail receivable and lease contract terms.

TMCC and TMS are parties to a Shared Services Agreement which cover certain technological and administrative services, such as information systems support, facilities, insurance coverage, and corporate services provided by each entity to the other. TMCC and TMS are also parties to an Amended and Restated Repurchase Agreement, which provides that TMS will arrange for the repurchase of new Toyota and Lexus vehicles at the aggregate cost financed by TMCC in the event of vehicle dealer default under floorplan financing. TMCC is also a party to similar agreements with TMHU, HINO, and other domestic and import manufacturers. TMCC and Toyota Financial Savings Bank (“TFSB”), a Nevada thrift company owned by TFSA, are parties to a Master Shared Services Agreement under which TMCC and TFSB provide certain services to the other. See Note 17 – Related Party Transactions of the Notes to Consolidated Financial Statements for further information.

Employees of TMCC, Toyota Credit de Puerto Rico Corp. (“TCPR”), and TMCC’s insurance subsidiaries are generally eligible to participate in the TMS pension plan, the Toyota Savings Plan sponsored by TMS, and various health and life and other post-retirement benefits sponsored by TMS, as discussed further in Note 14 – Pension and Other Benefit Plans of the Notes to Consolidated Financial Statements.

Credit support agreements exist between us and TFSC and between TFSC and TMC. These agreements are further discussed in the “Liquidity and Capital Resources” section of the MD&A and Note 17 – Related Party Transactions of the Notes to Consolidated Financial Statements.

TMIS provides administrative services to TMS which are discussed in Note 17 – Related Party Transactions of the Notes to Consolidated Financial Statements. In addition, TMIS provides various levels and types of insurance coverage to TMS, including the warranty coverage for TMS’ certified pre-owned vehicle program. TMIS, through its wholly-owned subsidiary, provides umbrella liability insurance to TMS and affiliates covering certain dollar value layers of risk above various primary or self-insured retentions. On all layers in which TMIS has provided coverage, 99 percent of the risk has been ceded to various reinsurers.

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COMPETITION

We operate in a highly competitive environment and compete with other financial institutions including national and regional commercial banks, credit unions, savings and loan associations, and finance companies. To a lesser extent, we compete with other automobile manufacturers’ affiliated finance companies that actively seek to purchase retail consumer contracts through Toyota and Lexus dealers for retail financing and leasing. We compete with national and regional commercial banks and other automobile manufacturers’ affiliated finance companies for dealer financing. No single competitor is dominant in the industry. We compete primarily through service quality, our relationship with TMS, and financing rates. We seek to provide exceptional customer service and competitive financing programs to our vehicle and industrial equipment dealers and to their customers. Our relationship with TMS is an advantage in providing Toyota and Lexus financing for purchases or leases of Toyota and Lexus vehicles.

Competition for the principal products and services provided through our insurance operations is primarily from national and regional independent service contract providers. We compete primarily through service quality, our relationship with TMS, and pricing. We seek to offer our vehicle dealers competitively priced products and excellent customer service. Our relationship with TMS provides an advantage in selling our products and services.

REGULATORY ENVIRONMENT

Our finance and insurance operations are regulated under both federal and state law. We are governed by, among other federal laws, the Equal Credit Opportunity Act, the Truth-in Lending Act, the Fair Credit Reporting Act, and the consumer data privacy and security provisions of the Gramm-Leach Bliley Act. A majority of states (as well as the Commonwealth of Puerto Rico) have enacted legislation establishing licensing requirements to conduct retail and other finance and insurance activities. Most states also impose limits on the maximum rate of finance charges. In certain states, the margin between the present statutory maximum interest rates and borrowing costs is sufficiently narrow that, in periods of rapidly increasing or high interest rates, there could be an adverse effect on our operations in these states if we were unable to pass on increased interest costs to our customers. State laws also impose requirements and restrictions on us with respect to, among other matters, required credit application and finance and lease disclosures, late and other fees and charges, the right to repossess a vehicle for failure to pay or other defaults under the finance or lease contract, other rights and remedies we may exercise in the event of a default under the finance or lease contract, privacy matters, and other consumer protection matters. In addition, state laws differ as to whether anyone suffering injury to person or property involving a leased vehicle may bring an action against the owner of the vehicle merely by virtue of that ownership. To the extent that applicable state law permits such an action, we may be subject to liability to such an injured party. However, the laws of most states either do not permit such suits or limit the lessor’s liability to the amount of any liability insurance that the lessee was required under applicable law to maintain (or, in some states, the lessor was permitted to maintain), but failed to maintain. Our lease contracts in the U.S. contain provisions requiring the lessees to maintain levels of insurance satisfying applicable state law, and we maintain certain levels of contingent liability insurance for protection from catastrophic claims. TMCC monitors ongoing lease insurance compliance only in certain vicarious liability states. Due to recently-enacted federal law, states are no longer permitted to impose unlimited vicarious liability on lessors of leased vehicles. This federal law has been subjected to judicial actions challenging the law’s constitutionality and preemption of state law. TMCC continues to monitor the impact of the repeal of unlimited vicarious liability and the related judicial challenges. At this time, TMCC has not modified its insurance compliance monitoring programs as a result of this law. We encounter higher risk of loss if the customers fail to maintain the required insurance coverage.

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Our insurance operations are subject to state insurance regulations and licensing requirements. State laws vary with respect to which products are regulated and what types of corporate licenses are required to offer certain products and services. Insurance company subsidiaries must be appropriately licensed in certain states in which they conduct business and must maintain minimum capital requirements as determined by their state of domicile. Failure to comply with these state requirements could have an adverse effect on insurance operations in a particular state. We actively monitor applicable laws and regulations in each state in order to maintain compliance.

We continually review our operations for compliance with applicable laws. Future administrative rulings, judicial decisions, and legislation may require modification of our business practices and documentation.

As a registrant with the SEC under the Securities Exchange Act of 1934, as amended, we are subject to various federal securities laws and regulations including, but not limited to, the Sarbanes-Oxley Act of 2002. We are also subject to similar laws and regulations in the foreign countries in which we obtain debt funding. We maintain policies and procedures to ensure compliance with applicable laws and regulations.

EMPLOYEE RELATIONS

At April 30, 2008, we had approximately 3,200 full-time employees. We consider our employee relations to be satisfactory. We are not subject to any collective bargaining agreements with our employees.

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ITEM 1A. RISK FACTORS

We are exposed to certain risks and uncertainties that could have a material adverse impact to our financial condition and operating results.

Sales of Toyota and Lexus Vehicles

Our business is substantially dependent upon the sale of Toyota and Lexus vehicles and our ability to offer competitive financing and insurance products in the U.S. TMS is the primary distributor of Toyota and Lexus vehicles in the U.S. TMS also sponsors special rate retail financing and lease (“subvention”) programs offered by us in the U.S. on certain new and used Toyota and Lexus vehicles. The level of subvention varies based on TMS’ marketing strategies, economic conditions, and volume of vehicle sales. Changes in the volume of sales of such vehicles resulting from governmental action, changes in consumer demand, changes in the level of TMS sponsored subvention programs, increased competition, or changes in pricing of imported units due to currency fluctuations or other events could impact the level of our finance and insurance operations. To date, the level of sales of Toyota and Lexus vehicles has not restricted our operations. Refer to Item 1., “Business – Relationships with Affiliates” and Note 17 – Related Party Transactions of the Notes to Consolidated Financial Statements for further information regarding our relationship with TMS.

Credit Support

Our credit ratings depend, in part, on the existence of the credit support arrangements discussed in the “Liquidity and Capital Resources – Credit Support Agreements” section of the MD&A and on the financial condition and operating results of TMC. Should we for any reason not have the benefit of these arrangements (or replacement arrangements acceptable to the rating agencies), or should the credit ratings of the credit support providers identified in such arrangements be lowered, we would expect that our credit ratings would be lower than our current ratings, leading to higher borrowing costs. However, we believe that the credit support arrangements will continue to be available.

Residual Value Risk

We are exposed to risk of loss on the disposition of leased vehicles and industrial equipment to the extent that sales proceeds realized upon the sale of returned lease assets are not sufficient to cover the residual value that was estimated at lease inception. Residual value represents an estimate of the end of term market value of a leased asset. When the market value of a leased asset at contract maturity is less than its contractual residual value, there is a higher probability that the leased asset will be returned to us. A higher rate of returns exposes us to greater risk of loss at lease termination. Refer to the “Residual Value Risk” section of the MD&A for further discussion regarding our exposure to this risk.

Credit Risk

Credit risk is the risk of loss arising from the failure of a customer or dealer to meet the terms of any contract with us or otherwise fail to perform as agreed. Refer to the “Credit Risk” section of the MD&A for further discussion regarding our exposure to this risk.

Liquidity Risk

Liquidity risk is the risk arising from our inability to meet obligations when they come due in a timely manner. Our liquidity strategy is to maintain the capacity to fund assets and repay liabilities in a timely and cost-effective manner even in the event of adverse market or other conditions that could adversely affect our liquidity position. Refer to the “Liquidity and Capital Resources” section of the MD&A for further discussion regarding our exposure to this risk.

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Market Risk

Market risk is the risk that changes in market interest rates or prices will negatively impact our income, capital, and market value. Policies governing market risk exposure are established and periodically reviewed by our senior management as conditions warrant. We use derivative instruments, along with other tools and strategies, to manage our market risk. We have established procedures to ensure that our risk management, including our use of derivatives, is in accordance with our policy framework. Refer to Item 7A., “Quantitative and Qualitative Disclosures About Market Risk” for further discussion regarding our exposure to this risk.

Operational Risk

Operational risk is the risk of loss resulting from, among other factors, inadequate or failed processes, systems or internal controls, theft, fraud, or natural disaster. Operational risk can occur in many forms including, but not limited to, errors, business interruptions, failure of controls, inappropriate behavior of or misconduct by our employees or those contracted to perform services for us, and vendors that do not perform in accordance with their contractual agreements. These events can potentially result in financial losses or other damages to us, including damage to our reputation.

We rely on internal and external information and technological systems to manage our operations and are exposed to risk of loss resulting from breaches in the security or other failures of these systems. Any upgrade and replacement of our major legacy transaction systems and treasury systems could have a significant impact on our ability to conduct our core business operations and increase our risk of loss resulting from disruptions of normal operating processes and procedures that may occur during the implementation of new information and transaction systems.

In order to monitor and manage operational risk, we maintain a framework of internal controls designed to provide a sound and well-controlled operational environment. However, due to the complexity of our business, treasury operations and the challenges inherent in implementing control structures across global organizations, problems could be identified in the future, and management can provide no assurance that these problems will not have a material effect on our operations.

On July 21, 2008, we filed an amendment to our Annual Report on Form 10-K for the fiscal year ended March 31, 2008 in order to restate certain of our consolidated financial statements and amend related disclosures, as described in the “Explanatory Note”. The present amendment to our Annual Report on Form 10-K for the fiscal year ended March 31, 2008 further restates our consolidated financial statements and amends related disclosures, as described in the “Explanatory Note”. As further described in Item 9A., “Controls and Procedures”, management has concluded that as of March 31, 2008, our internal control over financial reporting was not effective because of a material weaknesses in our controls relating to the processes used to accurately record certain of its derivatives and related interest expense and in its controls relating to processes used to accurately record certain of its debt and related interest expense. The Company has determined that the lack of effective monitoring of the manual processes associated with these controls contributed to these material weaknesses. There can be no assurance that we will be able to implement effectively improved controls or that our management will determine in the future that our disclosure controls and procedures or internal control over financial reporting are effective.

We strive to maintain appropriate levels of operational risk relative to our business strategies, competitive and regulatory environment, and markets in which we operate. We also maintain appropriate levels of insurance coverage for those operating risks that can be mitigated through the purchase of insurance. Notwithstanding these control measures and insurance coverage, we remain exposed to operational risk. However, while our approach to operational risk management is intended to mitigate such losses, our management can provide no assurance that these problems will not have a material effect on our operations.

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Regulatory Risk

Regulatory risk is the risk arising from the failure or alleged failure to comply with applicable regulatory requirements and the risk of liability and other costs imposed as a result of various laws and regulations, including changes in legislation and new regulatory requirements. Refer to the "Regulatory Environment" in Item 1., “Business” for further discussion of our exposure to this risk.

Counterparty Credit Risk

Counterparty credit risk is the risk that a counterparty may fail to perform on its contractual obligations in a derivatives contract. Refer to Item 7A., “Quantitative and Qualitative Disclosures About Market Risk” for further discussion regarding our exposure to this risk.

Factors Affecting Earnings

Our earnings are affected by a variety of factors, including changes in the overall market for retail financing, leasing or dealer financing, changes in the level of sales of Toyota and Lexus vehicles in the U.S., rates of growth in the number and average balance of customer accounts, the U.S. regulatory environment, competition, rates of default by our customers, changes in the U.S. and international funding markets, the used vehicle market, levels of operating and administrative expenses, including, but not limited to, personnel costs and technology costs, general economic conditions in the U.S., and other factors. A downturn in economic conditions in the U.S. resulting in increased unemployment rates and slow job growth, increased consumer and commercial bankruptcy filings, or other factors that negatively impact household incomes could decrease demand for our financing products and increase delinquency and loss. In addition, because our credit exposures are generally collateralized, the severity of losses is particularly sensitive to a decline in used vehicle prices. Further, a significant and sustained increase in fuel prices could decrease new and used vehicle purchases, thereby reducing the demand for automotive retail and wholesale financing. Refer to “Competition” and “Regulatory Environment” in Item 1., “Business” for discussion regarding our exposure to risk of loss resulting from the competitive and regulatory environments. Refer to the MD&A for discussion of our exposure to credit risk and residual value risk. Refer to item 7A., “Quantitative and Qualitative Disclosures About Market Risk” for further discussion regarding our exposure to market risk. In addition, refer to "Operational Risk" in Item 1A., "Risk Factors" and Item 9A., “Controls and Procedures” for a discussion regarding how material weaknesses in our internal control over financial reporting may affect our reported earnings.

Competition

We operate in a highly competitive environment. Increases in competitive pressures could have an adverse impact on our contract volume, market share, revenues, and margins. Refer to “Competition” in Item 1., “Business” for further discussion of the competitive factors affecting our business.

Risk of Catastrophes

Our business is exposed to the risk of catastrophes, including natural events, such as

hurricanes, tornados, earthquakes and fires, and other events, such as explosions, terrorist attacks, and

riots. The incidence and severity of catastrophes and severe weather conditions are inherently

unpredictable. These events may affect consumer spending in the vicinity of the disasters in the U.S. and may otherwise adversely affect our business, earnings, or financial condition.

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Concentration of Customer Risk

We are exposed to customer concentration risk in certain states. Factors adversely affecting the economies and applicable laws in these states could have an adverse effect on our consolidated financial position or results of operations. Refer to “Geographic Distribution of Operations” in Item 1., “Business” for further discussion regarding our exposure to this risk.

Insurance Reserves

Our insurance subsidiary is subject to the risk of loss if our reserves for unearned premium and service revenues on unexpired policies and agreements in force are not sufficient. The risk associated with using historical loss experience as a basis for establishing earnings factors used to recognize revenue over the term of the contract or policy is that the timing of revenue recognition will materially vary from the actual loss development. Our insurance subsidiary is also subject to the risk of loss if our reserves for reported losses, losses incurred but not reported, and loss adjustment expenses are not sufficient. The risk associated with the projection of future loss payments is the assumption that historical loss development patterns will reasonably predict loss development patterns on existing agreements in force. Our management mitigates the risks associated with the use of such estimates by using credentialed actuaries to evaluate the adequacy of our reserves, by periodically reviewing the methods used for making such estimates, and by having experienced claims personnel actively manage the claim settlement process. Because the reserve establishment process is an estimate, actual losses may vary from amounts established in earlier periods. Refer to Note 3 – Summary of Accounting Policies of the Notes to Consolidated Financial Statements for further description of the reserve setting process.

Reinsurance Credit Risk

Reinsurance credit risk is the risk that a reinsurer providing reinsurance coverage to our insurance subsidiary will be unable to meet its obligations under the agreement. We mitigate this risk by holding letters of credit and funds held agreements on behalf of certain reinsurers which are available to us as collateral for reinsurance balances. In addition, we monitor the financial condition of our reinsurers and do not believe that we are exposed to any material credit risk.

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ITEM 1B. UNRESOLVED STAFF COMMENTS

There are no unresolved SEC staff comments to report.

ITEM 2. PROPERTIES

Our finance and insurance headquarters operations are located in Torrance, California, and our facilities are leased from TMS.

Field operations for both finance and insurance are located in three regional customer service centers (“CSC”), three regional management offices, and 30 dealer sales and service offices (“DSSO”) in cities throughout the U.S. Two of the DSSOs share premises with the regional customer services centers. All three of the regional management offices share premises with DSSO offices. The Central region CSC is located in Cedar Rapids, Iowa, and is leased from TMS. The Western region CSC is located in Chandler, Arizona. The Eastern region CSC is located in Owings Mills, Maryland. We also have offices in the Commonwealth of Puerto Rico. All premises are occupied under lease.

We believe that our properties are suitable to meet the requirements of our business.

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ITEM 3. LEGAL PROCEEDINGS

Various legal actions, governmental proceedings and other claims are pending or may be instituted or asserted in the future against us with respect to matters arising in the ordinary course of business. Certain of these actions are or purport to be class action suits, seeking sizeable damages and/or changes in our business operations, policies and practices. Certain of these actions are similar to suits that have been filed against other financial institutions and captive finance companies. Our management and internal and external counsel perform periodic reviews of pending claims and actions to determine the probability of adverse verdicts and resulting amounts of liability. We establish reserves for legal claims when payments associated with the claims become probable and the costs can be reasonably estimated. The actual costs of resolving legal claims and associated costs of defense may be substantially higher or lower than the amounts reserved for these claims. However, based on information currently available, the advice of counsel, and established reserves, our management expects that the ultimate liability resulting therefrom will not have a material adverse effect on our consolidated financial statements. We caution that the eventual development, outcome and cost of legal proceedings are by their nature uncertain and subject to many factors, including but not limited to, the discovery of facts not presently known to us or determinations by judges, juries or other finders of fact which do not accord with our evaluation of the possible liability from existing litigation.

Repossession Class Actions

A cross-complaint alleging a class action in the Superior Court of California Stanilaus County, Garcia v. Toyota Motor Credit Corporation, filed in January 2007, claims that the Company's post-repossession notice failed to comply with the Reese-Levering Automobile Sales Finance Act of California ("Reese-Levering"). An additional cross-complaint alleging a class action in the Superior Court of California San Francisco County, Aquilar and Smith v. Toyota Motor Credit Corporation, filed in February 2008, contains similar allegations claiming that the Company's post-repossession notices failed to comply with Reese-Levering. The plaintiffs are seeking injunctive relief, restitution and/or disgorgement, as well as damages in the Aquilar matter. The Company has filed a petition to consolidate these cases as they present nearly identical questions of law and fact. The Company believes it has strong defenses to these claims.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

TMCC has omitted this section pursuant to General Instruction I(2) of Form 10-K.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

TMCC is a wholly-owned subsidiary of TFSA and, accordingly, all shares of TMCC’s stock are owned by TFSA. There is no market for TMCC's stock.

Dividends are declared and paid by TMCC as determined by its Board of Directors. No dividends were declared or paid during fiscal 2008. TMCC’s Board of Directors declared and paid cash dividends of $130 million and $115 million to TFSA during fiscal 2007 and fiscal 2006, respectively.

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ITEM 6. SELECTED FINANCIAL DATA

	For the Year Ended March 31,
	2008	2008	2007	2006	2005	2004
	(Dollars in millions)
	As Currently Restated	As Previously Restated	As Previously Restated	As Previously Restated
INCOME STATEMENT DATA
Financing revenues:
Operating lease	$4,433	$4,433	$3,624	$2,726	$2,141	$2,049
Retail financing1	3,112	3,112	2,539	2,053	1,675	1,575
Dealer financing	647	647	547	402	270	198
Total financing revenues	8,192	8,192	6,710	5,181	4,086	3,822

Depreciation on operating leases	3,299	3,299	2,673	2,027	1,579	1,561
Interest expense	4,151	4,106	2,662	1,561	670	578
Net financing revenues	742	787	1,375	1,593	1,837	1,683

Insurance earned premiums and contract revenues	385	385	334	288	251	212
Investment and other income	301	301	252	116	139	196
Net financing revenues and other revenues	1,428	1,473	1,961	1,997	2,227	2,091

Provision for credit losses	809	809	410	305	230	351
Expenses:
Operating and administrative	841	841	758	712	650	583
Insurance losses and loss adjustment expenses	158	158	126	115	104	98
Total provision for credit losses and expenses	1,808	1,808	1,294	1,132	984	1,032
(Loss) income before (benefit) provision for income taxes	(380)	(335)	667	865	1,243	1,059
(Benefit) provision for income taxes	(157)	(139)	233	321	481	418
Net (loss) income	($223)	($196)	$434	$544	$762	$641

1 Includes direct finance lease revenues.

Refer to Notes 1 and 19 to the Consolidated Financial Statements for further detail information related to the restated financial statements.

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	As of March 31,
	2008	2008	2007	2006	2005	2004
	(Dollars in millions)
	As Currently Restated	As Previously Restated	As Previously Restated	As Previously Restated
BALANCE SHEET DATA

Finance receivables, net	$55,481	$55,481	$47,862	$42,022	$37,608	$32,318
Investments in operating leases, net	$18,656	$18,656	$16,493	$12,869	$9,341	$7,609
Total assets	$80,398	$80,420	$69,380	$58,261	$50,676	$44,634
Debt	$68,266	$68,266	$58,596	$48,767	$41,757	$36,854
Capital stock	$915	$915	$915	$915	$915	$915
Retained earnings1	$3,865	$3,892	$4,064	$3,784	$3,283	$2,604
Total shareholder's equity	$4,780	$4,807	$5,031	$4,759	$4,244	$3,563

1 Our Board of Directors declared and paid cash dividends of $130 million and $115 million to TFSA during fiscal 2007 and fiscal 2006, respectively. No dividends were declared or paid in any other period presented.

	As of/for the Years Ended March 31,
	2008	2008	2007	2006	2005	2004
	As Currently Restated	As Previously Restated	As Previously Restated	As Previously Restated
KEY FINANCIAL DATA

Ratio of earnings to fixed charges	(A)	(A)	1.25	1.55	2.84	2.81
Debt to equity	14.28	14.20	11.65	10.25	9.84	10.34
Return on assets	(0.30%)	(0.26%)	0.68%	1.00%	1.60%	1.53%
Allowance for credit losses as a percentage of gross earning assets	0.97%	0.97%	0.85%	0.96%	1.06%	1.29%
Net charge-offs as a percentage of average gross earning assets	0.91%	0.91%	0.64%	0.54%	0.56%	0.74%
Over-60 day delinquencies as a percentage of gross earning assets	0.59%	0.59%	0.46%	0.43%	0.28%	0.34%

(A) Due to our loss in fiscal year 2008, the ratio coverage was less than one to one. We must generate additional earnings equal to pre-tax loss to achieve a coverage of one to one.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Restatement

As discussed in the Explanatory Note, this Form 10-K/A is being filed with the Securities and Exchange Commission (“SEC”) to reflect the restatement of our Consolidated Financial Statements and amendments to related disclosures as of March 31, 2008 and for the fiscal year ended March 31, 2008. Additionally, this Form 10-K/A reflects previously reported quarterly information relating to the three month periods ended December 31, 2007 and March 31, 2008. All dollar amounts and percentages herein have been adjusted for the effects of the current and previous restatement adjustments.

Current Restatement

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Previous Restatement

The previous restatement also included the impact of certain other errors relating to the accounting for debt and derivative transactions. These errors, which were previously determined to be not material to any previously issued financial statements, had been identified and corrected on a cumulative basis during the fiscal years ended March 31, 2008, 2007 and 2006. As part of the restatement of our consolidated financial statements, we have reversed these cumulative adjustments and have instead recorded the correction of these errors in the periods to which the errors relate. In order to correct the errors noted above, we previously restated our consolidated financial statements for the years ended March 31, 2008, 2007 and 2006 and the quarters in fiscal years ended March 31, 2008 and 2007 as reported in a Form 10-K/A filed on July 21, 2008. The impact of reversing the previously recorded cumulative adjustments and recording the correction in the periods to which they related increased our net loss by $8 million for the fiscal year ended March 31, 2008, increased our net income by $13 million for the fiscal year ended March 31, 2007, and decreased our net income by $4 million for the fiscal year ended March 31, 2006.

Footnotes 1 and 19 to the Consolidated Financial Statements included herein also contain information regarding the nature and impact of the Restatements.

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The following tables set forth the effects of the current as well as the previous restatement adjustments on the affected line items within our previously reported Consolidated Balance Sheet as of March 31, 2008 and 2007, and Consolidated Statements of Income, Shareholder’s Equity and Statement of Cash Flows for the fiscal years ended March 31, 2008, 2007 and 2006.

CONSOLIDATED BALANCE SHEET (Dollars in millions)

	March 31, 2008			March 31, 2007
	As Originally Reported	As Previously Restated	As Currently Restated	As Originally Reported	As Previously Restated
ASSETS
Other assets	$3,600	$3,599	$3,577	$2,219	$2,231
Total assets	$80,421	$80,420	$80,398	$69,368	$69,380

TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY
Debt	$68,066	$68,266	$68,266	$58,529	$58,596
Deferred income taxes	$3,216	$3,138	$3,120	$3,153	$3,132
Other liabilities	$4,209	$4,209	$4,232	$2,621	$2,621
Total liabilities	$75,491	$75,613	$75,618	$64,303	$64,349
Retained earnings	$4,015	$3,892	$3,865	$4,098	$4,064
Total shareholder's equity	$4,930	$4,807	$4,780	$5,065	$5,031
Total liabilities and shareholder's equity	$80,421	$80,420	$80,398	$69,368	$69,380

CONSOLIDATED STATEMENT OF INCOME (Dollars in millions)

	Fiscal Years Ended March 31,
	2008			2007		2006
	As Originally Reported	As Previously Restated	As Currently Restated	As Originally Reported	As Previously Restated	As Originally Reported	As Previously Restated
Interest expense	$3,960	$4,106	$4,151	$2,666	$2,662	$1,502	$1,561
Net financing revenues	$933	$787	$742	$1,371	$1,375	$1,652	$1,593
Net financing revenues and other revenues	$1,619	$1,473	$1,428	$1,957	$1,961	$2,056	$1,997
(Loss) income before (benefit) provision for income taxes	($189)	($335)	($380)	$663	$667	$924	$865
(Benefit) provision for income taxes	($82)	($139)	($157)	$231	$233	$344	$321
Net (loss) income	($107)	($196)	($223)	$432	$434	$580	$544

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CONSOLIDATED STATEMENT OF SHAREHOLDER'S EQUITY (Dollars in millions)

	As Originally Reported	Previous Adjustment	As Previously Restated	Current Adjustment	As Currently Restated
Net income for the year ended March 31, 2006	$580	($36)	$544	$-	$544
Total comprehensive income	$594	($36)	$558	$-	$558
BALANCE AT MARCH 31, 2006	$4,795	($36)	$4,759	$-	$4,759

Net income for the year ended March 31, 2007	$432	$2	$434	$-	$434
Total comprehensive income	$424	$2	$426	$-	$426
BALANCE AT MARCH 31, 2007	$5,065	($34)	$5,031	$-	$5,031

Net loss for the year ended March 31, 2008	($107)	($89)	($196)	($27)	($223)
Total comprehensive loss	($159)	($89)	($248)	($27)	($275)
BALANCE AT MARCH 31, 2008	$4,930	($123)	$4,807	($27)	$4,780

CONSOLIDATED STATEMENT OF CASH FLOWS (Dollars in millions)

	Fiscal Years Ended
	2008			2007		2006
	As Originally Reported	As Previously Restated	As Currently Restated	As Originally Reported	As Previously Restated	As Originally Reported	As Previously Restated
Cash flows from operating activities:
Net (loss) income	($107)	($196)	($223)	$432	$434	$580	$544
Non-cash impact of hedging activities	$774	$907	$952	$111	$119	($185)	($126)
(Increase) decrease in other assets	($378)	($365)	($365)	($341)	($353)	$132	$132
Increase (decrease) in deferred income taxes	$94	$37	$19	$730	$732	($165)	($188)
Increase in other liabilities	$687	$687	$687	$279	$279	$203	$203
Net cash provided by operating activities	$6,234	$6,234	$6,234	$4,171	$4,171	$2,151	$2,151
Cash flows from financing activities:
Proceeds from issuance of debt	$21,914	$21,914	$21,914	$16,286	$16,286	$13,328	$13,328
Payments on debt	($15,159)	($15,159)	($15,159)	($9,882)	($9,882)	($6,601)	($6,601)
Net cash provided by financing activities	$7,851	$7,851	$7,851	$8,898	$8,898	$8,277	$8,277

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The following tables set forth the effects of the current as well as the previous restatement adjustments on the affected line items within our previously reported Consolidated Balance Sheet for the fiscal 2008 and 2007 quarters ended December 31, September 30 and June 30. The following tables also set forth the effects of the adjustments of the restatements on affected line items within our previously reported Consolidated Statements of Income for the fiscal 2008 and 2007 quarters ended March 31, December 31, September 30, and June 30. Because the errors corrected in the restatements were non-cash in nature, they had no impact on our total net cash provided by operating activities in the consolidated statement of cash flows.

CONDENSED CONSOLIDATED BALANCE SHEET (Dollars in millions)

FISCAL 2008

	December 31, 2007
	As Originally Reported	Previous Adjustment	As Previously Restated	Current Adjustment	As Currently Restated
Other assets	$3,913	$7	$3,920	($4)	$3,916
Total assets	$80,358	$7	$80,365	($4)	$80,361
Debt	$68,270	$135	$68,405	$-	$68,405
Deferred income taxes	$3,298	($50)	$3,248	($4)	$3,244
Other liabilities	$3,607	$-	$3,607	$5	$3,612
Total liabilities	$75,175	$85	$75,260	$1	$75,261
Retained earnings	$4,240	($78)	$4,162	($5)	$4,157
Total shareholder's equity	$5,183	($78)	$5,105	($5)	$5,100
Total liabilities and shareholder's equity	$80,358	$7	$80,365	($4)	$80,361

	September 30, 2007			June 30, 2007
	As Originally Reported	Previous Adjustment	As Previously Restated	As Originally Reported	Previous Adjustment	As Previously Restated
Other assets	$3,730	$6	$3,736	$2,393	$4	$2,397
Total assets	$76,219	$6	$76,225	$72,593	$4	$72,597
Debt	$64,385	$119	$64,504	$61,162	$112	$61,274
Deferred income taxes	$3,262	($41)	$3,221	$3,273	($40)	$3,233
Other liabilities	$3,268	($8)	$3,260	$2,878	($4)	$2,874
Total liabilities	$70,915	$70	$70,985	$67,313	$68	$67,381
Retained earnings	$4,320	($64)	$4,256	$4,302	($64)	$4,238
Total shareholder's equity	$5,304	($64)	$5,240	$5,280	($64)	$5,216
Total liabilities and shareholder's equity	$76,219	$6	$76,225	$72,593	$4	$72,597

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CONDENSED CONSOLIDATED BALANCE SHEET (Dollars in millions)

FISCAL 2007

	December 31, 2006			September 30, 2006			June 30, 2006
	As Originally Reported	Previous Adjustment	As Previously Restated	As Originally Reported	Previous Adjustment	As Previously Restated	As Originally Reported	Previous Adjustment	As Previously Restated
Other assets	$1,939	$3	$1,942	$1,757	$2	$1,759	$2,210	$1	$2,211
Total assets	$66,862	$3	$66,865	$64,060	$2	$64,062	$61,764	$1	$61,765
Debt	$56,347	$58	$56,405	$53,702	$53	$53,755	$51,560	$44	$51,604
Deferred income taxes	$2,974	($22)	$2,952	$2,901	($20)	$2,881	$2,892	($17)	$2,875
Total liabilities	$61,833	$36	$61,869	$59,083	$33	$59,116	$56,806	$27	$56,833
Retained earnings	$4,035	($33)	$4,002	$4,001	($31)	$3,970	$3,989	($26)	$3,963
Total shareholder's equity	$5,029	($33)	$4,996	$4,977	($31)	$4,946	$4,958	($26)	$4,932
Total liabilities and shareholder's equity	$66,862	$3	$66,865	$64,060	$2	$64,062	$61,764	$1	$61,765

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CONDENSED CONSOLIDATED INCOME STATEMENTS (Dollars in millions)

FISCAL 2008

	Three months ended March 31, 2008
	As Originally Reported	Previous Adjustment	As Previously Restated	Current Adjustment	As Currently Restated
Interest expense	$1,265	$73	$1,338	$36	$1,374
Net financing revenues	($2)	($73)	($75)	($36)	($111)
Net financing revenues and other revenues	$165	($73)	$92	($36)	$56
(Loss) income before (benefit) provision for income taxes	($366)	($73)	($439)	($36)	($475)
(Benefit) provision for income taxes	($141)	($28)	($169)	($14)	($183)
Net (loss) income	($225)	($45)	($270)	($22)	($292)

	Three months ended December 31, 2007
	As Originally Reported	Previous Adjustment	As Previously Restated	Current Adjustment	As Currently Reported
Interest expense	$1,082	$23	$1,105	$9	$1,114
Net financing revenues	$182	($23)	$159	($9)	$150
Net financing revenues and other revenues	$405	($23)	$382	($9)	$373
(Loss) income before (benefit) provision for income taxes	($139)	($23)	($162)	($9)	($171)
(Benefit) provision for income taxes	($59)	($9)	($68)	($4)	($72)
Net (loss) income	($80)	($14)	($94)	($5)	($99)

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CONDENSED CONSOLIDATED INCOME STATEMENTS (Dollars in millions)

FISCAL 2008

	Three months ended September 30, 2007			Three months ended June 30, 2007
	As Originally Reported	Previous Adjustment	As Previously Restated	As Originally Reported	Previous Adjustment	As Previously Restated
Interest expense	$989	$1	$990	$624	$49	$673
Net financing revenues	$223	($1)	$222	$530	($49)	$481
Net financing revenues and other revenues	$381	($1)	$380	$668	($49)	$619
(Loss) income before (benefit) provision for income taxes	($15)	($1)	($16)	$331	($49)	$282
(Benefit) provision for income taxes	($9)	($1)	($10)	$127	($19)	$108
Net (loss) income	($6)	$-	($6)	$204	($30)	$174

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CONDENSED CONSOLIDATED INCOME STATEMENTS (Dollars in millions)

FISCAL 2007

	Three months ended March 31, 2007			Three months ended December 31, 2006
	As Originally Reported	Previous Adjustment	As Previously Restated	As Originally Reported	Previous Adjustment	As Previously Restated
Interest expense	$742	$- 1	$742	$664	$4	$668
Net financing revenues	$348	$-	$348	$384	($4)	$380
Net financing revenues and other revenues	$559	$-	$559	$519	($4)	$515
Income before provision for income taxes	$163	$-	$163	$198	($4)	$194
Provision for income taxes	$65	$1	$66	$75	($2)	$73
Net income	$98	($1)	$97	$123	($2)	$121

1 In the three months ended March 31, 2007, the impact of the debt market value adjustment was completely offset by a $10 million reduction of interest expense to correct previously identified and recorded cumulative adjustments as described in Note 1 – Restated Financial Results.

	Three months ended September 30, 2006			Three months ended June 30, 2006
	As Originally Reported	Previous Adjustment	As Previously Restated	As Originally Reported	Previous Adjustment	As Previously Restated
Interest expense	$760	$8	$768	$500	($16)	$484
Net financing revenues	$222	($8)	$214	$417	$16	$433
Net financing revenues and other revenues	$363	($8)	$355	$516	$16	$532
Income before provision for income taxes	$57	($8)	$49	$245	$16	$261
Provision for income taxes	$15	($3)	$12	$76	$6	$82
Net income	$42	($5)	$37	$169	$10	$179

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OVERVIEW

As discussed in the Explanatory Note, this Form 10-K/A is being filed with the Securities and Exchange Commission (“SEC”) to reflect the restatement of Toyota Motor Credit Corporation’s (“TMCC”) Consolidated Financial Statements and amendments to related disclosures as of March 31, 2008 and for the fiscal year ended March 31, 2008. Additionally, this Form 10K/A reflects previously reported quarterly information relating to the three month periods ended December 31, 2007 and March 31, 2008. All dollar amounts and percentages herein have been adjusted for the effects of the current and previous restatement adjustments.

TMCC and its consolidated subsidiaries, collectively referred to herein as “we”, “our”, and “us”, is wholly-owned by Toyota Financial Services Americas Corporation (“TFSA”), a California corporation which is a wholly-owned subsidiary of Toyota Financial Services Corporation (“TFSC”), a Japanese corporation. TFSC, in turn, is a wholly-owned subsidiary of Toyota Motor Corporation (“TMC”), a Japanese corporation. TFSC manages TMC’s worldwide financial services operations. TMCC is marketed under the brands of Toyota Financial Services and Lexus Financial Services.

We generate revenue, income, and cash flows by providing retail financing, leasing, wholesale financing, and certain other financial products and services to vehicle and industrial equipment dealers and their customers. We also generate revenue through marketing, underwriting, and administering claims related to covering certain risks of vehicle dealers and their customers. We support growth in earning assets through funding obtained in the capital markets as well as funds provided by investing and operating activities.

Our financial results are affected by a variety of economic and industry factors, including but not limited to, new and used vehicle markets, new vehicle incentives, consumer behavior, employment growth, our ability to respond to changes in interest rates with respect to both contract pricing and funding, and the level of competitive pressure. Changes in these factors can influence the demand for new and used vehicles, the number of contracts that default and the loss per occurrence, the realizability of residual values on our lease earning assets, and our gross margins on financing volume. Additionally, our funding programs and related costs are influenced by changes in the capital markets and prevailing interest rates, which may affect our ability to obtain cost effective funding to support earning asset growth.

We measure the performance of our finance operations using the following metrics: financing volume, market share related to Toyota and Lexus vehicle sales, return on assets, financial leverage, financing margins, operating efficiency, and loss metrics. We measure the performance of our insurance operations on the basis of agreement volume, the number of agreements in force, investment portfolio return, and loss ratio levels.

Our primary competitors are other financial institutions including national and regional commercial banks, credit unions, savings and loan associations, finance companies and, to a lesser extent, other automobile manufacturers’ affiliated finance companies that actively seek to purchase retail consumer contracts through Toyota and Lexus independent dealerships (“dealerships”). We strive to achieve, among others, the following goals:

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Exceptional Customer Service: Our relationship with Toyota and Lexus vehicle dealers and industrial equipment dealers and their customers offer a competitive advantage for us. We seek to provide exceptional service to dealers and their customers by focusing our dealer sales and services offices (“DSSOs”) network and resources on encouraging the dealerships to continuously improve the quality of service provided by their finance and insurance representatives, and to increase customer loyalty to their dealerships and the Toyota and Lexus brands. By providing consistent and reliable support, training, and resources to our dealer network, we continue to develop our dealer relationships. We work closely with Toyota Motor Sales, U.S.A., Inc. (“TMS”), Toyota Material Handling, U.S.A., Inc. (“TMHU”), and Hino Motor Sales, U.S.A., Inc. (“HINO”) to offer special retail, lease, dealer financing, and insurance programs, in addition to marketing programs targeted towards the retention of repeat customers. We also focus on improving the quality of service provided to existing retail, lease, and insurance customers through our customer service centers (“CSCs”).

Risk Based Pricing: We price and structure our retail and lease contracts to compensate for the credit risk we assume. The goal of this strategy is to maximize profitability and better match contract rates with a broad range of risk levels. To achieve this goal, we evaluate our existing portfolio to identify key opportunities to target and expand additional volume. We deliver timely information to DSSOs and dealerships to assist them in benefiting from market opportunities. We constantly strive to refine our strategy and methodology for risk based pricing.

Liquidity Strategy: Our liquidity strategy is to maintain the capacity to fund assets and repay liabilities in a timely and cost-effective manner even in the event of adverse market conditions. This capacity primarily arises from our high credit rating, our ability to raise funds in the global capital markets, and our ability to generate liquidity from our balance sheet. This strategy has led us to develop a borrowing base that is diversified by market, geographic distribution and type of security, among other factors, as well as programs to prepare assets for sale and securitization.

Fiscal 2008 Operating Summary

Our consolidated net loss was $223 million during fiscal 2008 compared to our consolidated net income of $434 million during fiscal 2007. Our results in fiscal 2008 were primarily affected by an increase in interest expense due to higher unrealized losses of $942 million on our derivatives used to manage interest rate risk. Higher outstanding debt balances also contributed to the increase in interest expense albeit to a lesser extent. Our results were further affected by the softening U.S. economy caused by the decline in home values, the deterioration in the credit markets, tougher lending standards and increased commodity prices. The combination of these factors negatively impacted some of our customers’ ability to make their scheduled payments. While these indicators were evident earlier in the year, the impact of consumer performance issues was much more pronounced in the second half of fiscal 2008. Due to this change in the credit environment as well as the deterioration in used vehicle prices, we recorded higher charge-offs in the second half of fiscal 2008 and increased our allowance for credit losses. These adverse developments were partially offset by the increase in our financing revenues. In fiscal 2008 we had record financing volume of 1.4 million units on our retail and lease contracts and a record number of agreements issued on our insurance products of 1.5 million units.

Our financing operations reported a net loss of $345 million during fiscal 2008 compared to net income of $319 million during fiscal 2007. Results were adversely impacted by higher interest expense due to unrealized losses on our derivatives and to a lesser extent, higher outstanding debt balances. The net loss also resulted from a higher provision for credit losses resulting from the effect of the softening U.S. economy as discussed above.

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Our insurance operations reported net income of $122 million and $115 million during fiscal 2008 and fiscal 2007, respectively. Our results in fiscal 2008 were primarily affected by the increase in contract revenues and earned premiums, partially offset by the increase in insurance losses and loss adjustment expenses. Insurance losses and loss adjustment expenses increased primarily due to the increases in average number of agreements in force and average loss severity.

Overall, our capital position decreased by $251 million bringing total equity to $4.8 billion at March 31, 2008. Our debt-to-equity positions were 14.28 and 11.65 at March 31, 2008 and 2007, respectively.

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FINANCING OPERATIONS

Results of Operations

Fiscal 2008 compared to Fiscal 2007

	Percentage change
	Fiscal 2008 versus Fiscal 2007		Fiscal 2007 versus Fiscal 2006
	As Currently Restated	As Previously Restated
Financing Revenues:
Operating lease	22%		33%
Retail financing1	23%		24%
Dealer financing	18%		36%
Total financing revenues	22%		30%

Depreciation on operating leases	23%		32%
Interest expense	56%		71%
Net financing revenues	(46%)		(14%)

1 Includes direct finance lease revenues.

Net financing revenues decreased 46 percent during fiscal 2008 compared to fiscal 2007. Our net financing revenues were affected by the increase in interest expense due to higher unrealized losses on our derivatives used to manage interest rate risk and to a lesser extent, higher outstanding debt portfolio. This was partially offset by the increase in finance receivables and higher portfolio yields on our finance receivables. Refer to the “Interest Expense” section within this MD&A for further discussion regarding interest expense. Our financing revenues were influenced as follows:

·	Our operating lease revenues increased 22 percent during fiscal 2008 compared to fiscal 2007. This increase was due to higher leasing volume and higher yields on operating leases.

·	Our retail financing revenues increased 23 percent during fiscal 2008 compared to fiscal 2007. This was due to an increase in retail finance receivables volume with a corresponding increase in our portfolio yield.

·	Dealer financing revenues increased 18 percent during fiscal 2008 compared to fiscal 2007. This was primarily due to an increase in the number of dealers serviced which led to a higher average outstanding balance on dealer financing earning assets.

Our total finance receivables portfolio yield was 7.3 percent and 6.9 percent during fiscal 2008 and fiscal 2007, respectively.

Depreciation expense on operating leases increased 23 percent during fiscal 2008 compared to fiscal 2007. This increase is consistent with the increase in the average number of operating lease units outstanding during fiscal 2008 compared to fiscal 2007. Refer to the “Residual Value Risk” section within this MD&A for further discussion.

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Net Earning Assets and Vehicle Financing Volume

The composition of our net earning assets is summarized below (dollars in millions):

	As of March 31,			% Change
	2008	2007	2006	2008 to 2007	2007 to 2006
Net earning assets
Finance receivables, net
Retail finance receivables, net1	$43,769	$39,033	$34,748	12%	12%
Dealer financing, net	11,712	8,829	7,274	33%	21%
Total finance receivables, net	55,481	47,862	42,022	16%	14%
Investments in operating leases, net	18,656	16,493	12,869	13%	28%
Net earning assets	$74,137	$64,355	$54,891	15%	17%

Average original contract terms:
Leasing2	42 months	43 months	44 months
Retail financing3	61 months	61 months	60 months

Dealer financing
(Number of dealers serviced)
Toyota and Lexus Dealers4	851	787	728	8%	8%
Vehicle dealers outside of the Toyota/Lexus dealer network	484	409	374	18%	9%
Total number of dealers receiving vehicle wholesale financing	1,335	1,196	1,102	12%	9%

Dealer inventory financed (units in thousands)	264	220	170	20%	29%

1 Includes direct finance leases.

2 Terms range from 24 months to 60 months.

3 Terms range from 24 months to 84 months.

4 Includes wholesale and other loan arrangements in which we participate as part of a syndicate of lenders.

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The composition of our vehicle financing volume and market share is summarized below:

	Years ended March 31,			% Change
	2008	2007	2006	2008 to 2007	2007 to 2006
Vehicle financing volume (units in thousands):
New retail	781	749	618	4%	21%
Used retail	307	299	267	3%	12%
Lease	265	253	235	5%	8%
Total	1,353	1,301	1,120	4%	16%

TMS subvened vehicle financing volume (units included in the above table):
New retail	222	212	205	5%	3%
Used retail	32	40	42	(20%)	(5%)
Lease	183	130	157	41%	(17%)
Total	437	382	404	14%	(5%)

Market share1:
Retail	37.6%	35.4%	32.9%
Lease	13.0%	12.2%	12.7%
Total	50.6%	47.6%	45.6%

1 Represents the percentage of total domestic TMS sales of new Toyota and Lexus vehicles financed by us, excluding sales

under dealer rental car and commercial fleet programs and sales of a private Toyota distributor.

Our higher retail and lease financing volume during fiscal 2008 compared to fiscal 2007 resulted in increases in earning assets. Our total financing volume, acquired primarily from Toyota and Lexus vehicle dealers, was up 4 percent during fiscal 2008 compared to fiscal 2007. Much of this growth in volume resulted from increased market share of new Toyota and Lexus vehicles in the United States.

Retail Finance Receivables and Financing Volume

Retail finance receivables and vehicle retail financing volume increased due to Toyota and Lexus vehicle sales combined with our emphasis on developing dealer relationships. Our retail market share of TMS new vehicle sales increased in fiscal 2008 compared to fiscal 2007. This was primarily due to the increased availability of TMS retail subvention, strong dealer relationships and the increase in the number of vehicle dealers receiving wholesale financing. We generally experience a higher level of retail financing volume as a result of these relationships.

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Lease Earning Assets and Financing Volume

Total lease earning assets is comprised of investments in operating leases. Our vehicle lease financing volume is impacted by the level of Toyota and Lexus vehicle sales, the availability of subvention programs, and changes in the interest rate environment. Our vehicle lease financing volume increased in fiscal 2008 compared to fiscal 2007 due to increased market share in TMS new vehicle sales.

Dealer Financing Earning Assets

Dealer financing increased primarily due to continued growth in the number of vehicle dealers receiving wholesale financing and our emphasis on developing dealer relationships.

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Residual Value Risk

Factors Affecting Exposure to Residual Value Risk

Residual value represents an estimate of the end of term market value of a leased asset. The primary factors affecting our exposure to residual value risk are the levels at which residual values are established at lease inception, projected market values, and the resulting impact on vehicle lease return rates and loss severity. The evaluation of these factors involves significant assumptions, complex analysis, and management judgment. Refer to the “Critical Accounting Estimates” section of this MD&A for further discussion of the estimates involved in the determination of residual values.

Residual Values at Lease Inception

End of Term Market Values

Our management periodically reviews the estimated end of term market values of leased vehicles to assess the appropriateness of its carrying values. To the extent the estimated end of term market value of a leased vehicle is lower than the residual value established at lease inception, the residual value of the leased vehicle is adjusted downward so that the carrying value at lease end will approximate the estimated end of term market value. These adjustments are made over time for operating leases by recording depreciation expense in the Consolidated Statement of Income. Refer to the “Depreciation on Operating Leases” section of this MD&A for further discussion. For direct finance leases, the impact of the estimated decline in end of term market values is recorded at the time of assessment as a reduction of direct finance lease revenue which is included under our retail financing revenues in the Consolidated Statement of Income. Factors considered in this assessment are similar to those considered in the evaluation of residual values at lease inception discussed above.

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Vehicle Lease Return Rate

Loss Severity

Loss severity is the extent to which the end of term market value of a leased vehicle is less than the estimated residual value. Although we employ a rigorous process to estimate end of term market values, we may incur losses to the extent the end of term market value of a leased vehicle is less than the estimated residual value.

Vehicle Remarketing

At the end of the lease contract, lease customers have the option to purchase the vehicle at the contractual residual value or return the vehicle to the vehicle dealer. If the vehicle is returned to the vehicle dealer, the vehicle dealer has the option of purchasing the vehicle or returning it to us. We have developed remarketing strategies to maximize proceeds and minimize disposition costs on used vehicles sold at lease termination. We use various channels to sell vehicles returned at lease end, including the following:

Dealer Direct

The goal of the Dealer Direct program (“Dealer Direct”) is to increase vehicle dealer purchases of off-lease vehicles thereby reducing the disposition costs of such vehicles. Through Dealer Direct, the vehicle dealer accepting the lease return (the “grounding vehicle dealer”) has the option to purchase the vehicle at the contractual residual value, purchase the vehicle at an assessed market value, or return the vehicle to us. During fiscal 2008, 42 percent of returned vehicles were sold to the grounding vehicle dealer, compared to 35 percent sold during fiscal 2007. The percentage of available full term off lease units purchased by grounding vehicle dealers in fiscal 2008 increased primarily due to an increased number of dealers participating in the Dealer Direct program. In addition, the higher demand for Toyota and Lexus vehicles increased the average number of units purchased by each dealer. Vehicles not purchased by the grounding vehicle dealer are made available to all Toyota and Lexus vehicle dealers through the Dealer Direct online auction. During fiscal 2008, 8 percent of returned vehicles were sold through the Dealer Direct online auction to franchise vehicle dealers, compared to 12 percent sold during fiscal 2007. This decrease is in line with the increase in the number of vehicles purchased by the grounding vehicle dealer. As more vehicles are purchased by the grounding vehicle dealers, fewer vehicles are available through the Dealer Direct online auction. The disposition costs of vehicles sold through the Dealer Direct online auction are lower than the costs of those sold through auction sites. The average holding period of a vehicle sold through Dealer Direct was approximately 7 days, as compared to approximately 30 days for all off-lease vehicles sold.

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Auction

Vehicles not purchased through Dealer Direct are sold at physical vehicle auction sites throughout the country. During fiscal 2008, approximately 50 percent of returned vehicles were sold through physical auction, compared to approximately 53 percent of returned vehicles sold during fiscal 2007. Where necessary, we recondition used vehicles prior to sale in order to enhance the vehicle values at auction. Additionally, we redistribute vehicles geographically to minimize oversupply in any location.

The following table summarizes our scheduled maturities related to our leased vehicle portfolio and vehicle sales at lease termination by period (units in thousands):

	Years Ended March 31,
	2008	2007	2006
Scheduled maturities	176	171	166
Vehicles sold at lease termination1	41	39	49

1 Includes vehicles sold at physical auction, Dealer Direct online auction, and dealer purchases at a price other than the

contractual residual value.

Scheduled maturities remained fairly consistent in fiscal 2008 compared to fiscal 2007, as did the number of vehicles sold at lease termination. These amounts are not indicative of future scheduled maturities and future vehicle sales at lease termination.

Depreciation on Operating Leases

The following table provides information related to our depreciation on operating leases:

	Years Ended March 31,			% Change
	2008	2007	2006	2008 to 2007	2007 to 2006
Depreciation on operating leases (in millions)	$3,299	$2,673	$2,027	23%	32%
Average operating leases outstanding (units in thousands)	671	554	420	21%	32%

We record depreciation expense on the portion of our lease portfolio classified as operating leases. Depreciation expense is recorded over the lease term and is based upon the depreciable basis of the leased vehicle. Depreciable basis is the difference between a leased vehicle’s original acquisition value and its residual value established at lease inception. Depreciation expense is recorded on a straight-line basis over the remaining life of the lease when the end of term market value is estimated to be less than the carrying value. Refer to the “Residual Value Risk” section of this MD&A for a discussion regarding our exposure to residual value risk on our lease portfolio. Refer to the “Critical Accounting Estimates” section of this MD&A for a further discussion of the estimates involved in the determination of residual values.

Depreciation expense on operating leases increased during fiscal 2008 compared to fiscal 2007 primarily due to an increase in the average number of operating lease vehicles outstanding. Depreciation expense is also affected by changes in the used vehicle market because used vehicle market trends are a significant factor in estimating end of term market values. During fiscal 2008, the used vehicle market did not materially contribute to the increase in depreciation expense.

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Credit Risk

We are exposed to credit risk on our earning assets. Credit risk is the risk of loss arising from the failure of a customer or dealer to meet the terms of any contract with us or otherwise fail to perform as agreed. Our level of credit risk on our retail and lease portfolio is influenced primarily by two factors: the total number of contracts that default (“frequency of occurrence”) and the amount of loss per occurrence (“loss severity”), which in turn are influenced by various economic factors, the used vehicle market, purchase quality mix, contract term length, and operational changes as discussed below. Our level of credit risk on our dealer financing portfolio is influenced primarily by the financial strength of dealers within our portfolio, dealer concentration, collateral quality, and economic factors. To date, we have not incurred material credit losses on our dealer financing portfolio.

Factors Affecting Retail and Lease Portfolio Credit Risk

Economic Factors

General economic conditions such as sudden changes in housing values, unemployment rates, bankruptcy rates, consumer debt levels, fuel prices, consumer credit performance, interest rates, and inflation can influence both the frequency of occurrence and loss severity.

Used Vehicle Market

Changes in used vehicle prices directly affect the proceeds from sales of repossessed vehicles and, accordingly, the level of loss severity we have experienced. The supply of and demand for used vehicles, interest rates, inflation, the level of manufacturer incentives on new vehicles, and general economic outlook are some of the factors affecting the used vehicle market.

Purchase Quality Mix

A change in the mix of contracts acquired at various risk levels may change the amount of credit risk we assume. An increase in the number of contracts acquired with lower credit quality (as measured by scores that establish a consumer’s creditworthiness based on present financial condition, experience, and past credit history) can increase the amount of credit risk. Conversely, an increase in the number of contracts with higher credit quality acquired can lower credit risk. An increase in the mix of contracts with lower credit quality can also increase operational risk unless appropriate controls and procedures are established. We strive to price contracts in order to achieve an appropriate risk adjusted return on investment.

Contract Term Length

The average original contract term of retail and lease vehicle contracts influences credit losses. Longer term contracts generally experience a higher rate of default and thus affect the frequency of occurrence. In addition, vehicles under longer term contracts depreciate at a slower rate which may lead to increased loss severity.

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Operational Changes

Operational changes and ongoing implementation of new information and transaction systems are designed to have a positive effect on our operations, including customer service improvements in the management of delinquencies and credit losses, through the implementation of processes and tools that create greater operational efficiency and effectiveness. We continue to make improvements in our service operations and credit loss management methods.

Factors Affecting Dealer Financing Portfolio Credit Risk

The financial strength of dealers to which we extend credit directly influences credit risk. Lending to dealers with lower quality credit characteristics increases the risk of loss we assume. Extending a substantial amount of financing or commitments to a specific dealer or group of dealers creates a concentration of credit risk, particularly when the financing is unsecured or not fully secured by realizable assets. Collateral quality influences credit risk in that lower quality collateral increases the risk that, in the event of dealer default, the value of the collateral will be less than the amount owed to us.

Credit Loss Experience

We began to experience a significant deterioration in the credit performance of our loan and lease portfolio in the third quarter of fiscal 2008. The softening U.S. economy caused by the decline in home values, the deterioration in the credit markets, tougher lending standards and increased commodity prices has negatively impacted some of our customers’ ability to make their scheduled payments. While these indicators were evident earlier in the year, the impact of consumer performance issues was much more pronounced in the second half of fiscal 2008.

The level of credit losses is influenced primarily by two factors: frequency of occurrence and loss severity. Frequency of occurrence as a percentage of average outstanding contracts increased to 2.2% for fiscal 2008, as compared to 1.8% for fiscal 2007 while loss severity increased by 10.1% from fiscal 2007 to fiscal 2008. In addition we experienced an increase in net charge-offs as a percentage of average gross earning assets from fiscal 2007 to fiscal 2008. These increases are primarily due to the deterioration in the used vehicle prices, longer term contracts and increased risk in our portfolio due to the softening U.S. economy. Refer to Item 1., “Business” for discussion of our charge-off policy.

Due to the adverse change in the credit environment discussed above, we experienced an overall increase in 60-day delinquencies and an increase in credit related costs due to the higher credit risk and exposure within the portfolio.

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Furthermore, the impact of the adverse change in the credit environment and the deterioration of the used vehicle prices contributed to higher contract defaults and higher loss severity. As a result, management strengthened its collection practices in an effort to mitigate credit losses and increased the provision for credit losses. Our provision for credit losses increased substantially in fiscal 2008 compared to fiscal 2007, primarily reflecting higher delinquencies in the consumer portfolio and adverse trends in the macroeconomic environment and in the estimate of future loan losses.

	Years Ended March 31,
	2008	2007	2006
Net charge-offs as a percentage of average gross earning assets
Finance receivables	1.08%	0.76%	0.64%
Operating leases	0.40%	0.26%	0.17%
Total	0.91%	0.64%	0.54%

Aggregate balances 60 or more days past due as a percentage of gross earning assets1
Finance receivables2	0.65%	0.53%	0.47%
Operating leases2	0.41%	0.24%	0.29%
Total	0.59%	0.46%	0.43%

1 Substantially all retail and operating lease receivables do not involve recourse to the dealer in the event of

customer default.

2 Includes accounts in bankruptcy and excludes accounts for which vehicles have been repossessed.

Allowance for Credit Losses

We maintain an allowance for credit losses to cover probable losses resulting from the non-performance of our customers. The determination of the allowance involves significant assumptions, complex analysis, and management judgment. Refer to the “Critical Accounting Estimates” section of this MD&A for further discussion of the estimates involved in determining the allowance. The following tables provide information related to our allowance for credit losses (dollars in millions):

	Years Ended March 31,
	2008	2007	2006
Allowance for credit losses at beginning of period	$554	$530	$503
Provision for credit losses	809	410	305
Charge-offs, net of recoveries (“net charge-offs”)1	(634)	(386)	(278)
Allowance for credit losses at end of period	$729	$554	$530

1	Net of recoveries of $84 million, $82 million, and $79 million in years ended March 31, 2008, 2007, and 2006, respectively.

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	Years Ended March 31,
	2008	2007	2006
Allowance for credit losses as a percentage of gross earning assets
Finance receivables	1.17%	1.03%	1.17%
Operating leases	0.43%	0.37%	0.26%
Total	0.97%	0.85%	0.96%

The allowance for credit losses increased 32% to $729 million at March 31, 2008 compared to $554 million at March 31, 2007. Our allowance level is based on a comprehensive, adequately documented, and consistently applied analysis taking into account historical net charge-off levels, adjusted for changes in current conditions or other relevant factors. Management believes it considers all material factors that may affect the allowance account. These factors include: current economic conditions and outlook, historical loss experience, used vehicle market, purchase quality mix, contract term length, operational factors, and credit quality of the portfolio at year end.

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INSURANCE OPERATIONS

The following table summarizes the results of our Insurance Operations as a standalone operating segment (dollars in millions):

	Years Ended March 31,			% Change
	2008	2007	2006	2008 to 2007	2007 to 2006
Contract revenues and earned premiums	$333	$285	$244	17%	17%
Commissions and fees	52	49	44	6%	11%
Insurance earned premiums and contract revenues	$385	$334	$288	15%	16%

Insurance losses and loss adjustment expenses	$158	$126	$115	25%	10%

Agreements issued (units in thousands)	1,481	1,407	1,254	5%	12%
Agreements in force (units in thousands)	4,929	4,428	3,895	11%	14%

Contract revenues and earned premiums from insurance operations are affected by sales volume as well as the level, age, and mix of agreements in force. Agreements in force represent active insurance policies written and contracts issued. Contract revenues and earned premiums represent revenues from the agreements in force. Commissions and fees represent revenues from services provided to insurers and insureds, including certain of our affiliates.

Insurance losses and loss adjustment expenses incurred are a function of the number of covered risks, the frequency and severity of claims associated with the agreements in force, and the level of risk retained by our insurance operations. Insurance losses and loss adjustment expenses include amounts paid and accrued for reported losses, estimates of losses incurred but not reported, and any related claim adjustment expenses. Refer to Note 3 – Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements for further discussion regarding our exposure to risks surrounding the reserve estimates.

Contract revenues and earned premiums increased due to an increase in the number of agreements issued and agreements in force, which was primarily due to stronger dealer relationships. The increase in commissions and fees is consistent with the increase in the number of agreements issued. Insurance losses and loss adjustment expenses increased due to the increased number of agreements in force and an increase in loss severity and frequency.

Our insurance operations reported investment and other income of $139 million and $134 million which consisted primarily of investment income on marketable securities during fiscal 2008 and fiscal 2007, respectively. This increase was primarily due to higher investment balances during fiscal 2008 that resulted in an increase in investment income.

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INVESTMENT AND OTHER INCOME

Our consolidated investment and other income is primarily comprised of investment income on marketable securities, investment income from securitizations, and other income. We reported $301 million, $252 million, and $116 million of investment and other income during fiscal years 2008, 2007, and 2006, respectively. Of these amounts, $147 million, $134 million, and $44 million consisted of investment income on marketable securities during fiscal years 2008, 2007, and 2006, respectively. The majority of the investment income on marketable securities relates to our insurance operations. Refer to the “Insurance Operations” section within this MD&A for further discussion regarding investment income on marketable securities.

We reported $150 million, $106 million, and $42 million of other income during fiscal years 2008, 2007, and 2006, respectively. Other income primarily consists of interest income on cash held in excess of our immediate funding needs, which increased from the prior year primarily due to higher yields earned during fiscal 2008.

We reported $4 million, $12 million, and $30 million of investment income from securitizations during fiscal years 2008, 2007, and 2006, respectively. The decline is due to a reduction in the average outstanding balance of securitization pools as a result of the amortization of the related receivables. In addition, we had no securitized finance receivables outstanding at March 31, 2008 compared to $164 million which we serviced at March 31, 2007.

TAXES

Our effective tax rate was 41 percent and 35 percent during fiscal 2008 and fiscal 2007, respectively. We note that for fiscal 2008 TMCC had a pre-tax book loss resulting in a tax benefit for the year. This tax benefit was further increased by federal and state hybrid vehicle tax credits.

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OPERATING AND ADMINISTRATIVE EXPENSES

The following table summarizes our operating and administrative expenses (dollars in millions):

	Years Ended March 31,			% Change
	2008	2007	2006	2008 to 2007	2007 to 2006
Employee expenses	$343	$320	$304	7%	5%
Operating expenses	401	351	340	14%	3%
Insurance dealer back-end program expenses	97	87	68	11%	28%
Total operating and administrative expenses	$841	$758	$712	11%	6%

Total operating and administrative expenses increased 11 percent during fiscal 2008 compared to fiscal 2007. This increase was due to an increase in employee expenses incurred to support overall business growth. In addition, operating expenses increased due to new technology development. Included in operating and administrative expenses are charges allocated by TMS for certain technological and administrative services provided to TMCC. Refer to Note 17 – Related Party Transactions of the Notes to Consolidated Financial Statements for further information.

Insurance dealer back-end program expenses are primarily driven by insurance volume and underwriting performance. The increase was primarily due to an increase in the number of participating dealers, an increase in the number of agreements issued and agreements in force, and improved dealer underwriting performance. Refer to the “Insurance Operations” section of this MD&A for further discussion regarding our insurance results.

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LIQUIDITY AND CAPITAL RESOURCES

Liquidity risk is the risk arising from the inability to meet obligations when they come due. Our liquidity strategy is to maintain the capacity to fund assets and repay liabilities in a timely and cost-effective manner even in the event of adverse market conditions. This capacity primarily arises from our ability to raise funds in the global capital markets as well as our ability to generate liquidity from our balance sheet. This strategy has led us to develop a borrowing base that is diversified by market and geographic distribution, type of security, and investor type, among other factors, as well as a securitization program. See “Off-Balance Sheet Arrangements – Securitization Funding”. Credit support provided by our parent provides an additional source of liquidity to us, although it is not relied upon in our liquidity planning and capital and risk management.

The following table summarizes the outstanding components of our funding sources (dollars in millions):

	March 31,
	2008	2007
	As Previously Restated
Commercial paper	$16,063	$14,954
Unsecured term debt1	52,203	43,642
Total debt	68,266	58,596
Off-balance sheet securitization	-	156
Total funding	$68,266	$58,752

1 Includes carrying value adjustments of $3.0 billion and $1.2 billion at March 31, 2008 and 2007, respectively, as described in

Note 11 - Debt of the Notes to Consolidated Financial Statements.

We do not rely on any single source of funding and may choose to realign our funding activities depending upon market conditions, relative costs, and other factors. We believe that our funding sources, combined with operating and investing activities, provide sufficient liquidity to meet future funding requirements and business growth. Our funding volume is based on asset growth and debt maturities.

For liquidity purposes, we hold cash in excess of our immediate funding needs. These excess funds are invested in short-term highly liquid and investment grade money market instruments, which provide liquidity for our short-term funding needs and flexibility in the use of our other funding sources. We maintained excess funds ranging from $97 million to $5.5 billion during fiscal 2008, with an average balance of $2.6 billion.

Commercial Paper

Short-term funding needs are met through the issuance of commercial paper in the United States. Commercial paper outstanding under our commercial paper programs ranged from approximately $13.7 billion to $23.1 billion during fiscal 2008, with an average outstanding balance of $18.3 billion. Our commercial paper programs are supported by the liquidity facilities discussed later in this section. As a commercial paper issuer rated A-1+ by Standard & Poor’s Ratings Group, a division of The McGraw-Hill Companies, Inc. (“S&P”) and P-1 by Moody’s Investors Service, Inc. (“Moody’s”), we believe there is ample capacity to meet our short-term funding requirements.

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Unsecured Term Debt

Term funding requirements are met through the issuance of a variety of debt securities in both the United States and international capital markets. To diversify our funding sources, we have issued in a variety of markets, currencies, and maturities, and to a variety of investors, which allows us to broaden our distribution of securities and further enhance liquidity.

The following table summarizes our components of unsecured term debt at par value (dollars in millions):

	U.S. medium term notes ("MTNs") and domestic bonds	Euro MTNs ("EMTNs")	Eurobonds	Total unsecured term debt4
Balance at March 31, 20071	$18,170	$20,501	$4,152	$42,823
Issuances during fiscal 2008	13,4222	8,8393	-	22,261
Payments during fiscal 2008	(8,486)	(5,576)	(1,249))	(15,311)
Balance at March 31, 20081	$23,106	$23,764	$2,903	$49,773

Issuances during the one month ended April 30, 2008	$529	$159	$-	$688

1 Amounts represent par values and as such exclude unamortized premium/discount, foreign currency transaction gains and losses

on debt denominated in foreign currencies, fair value adjustments to debt in hedge accounting relationships, and the

unamortized fair value adjustments on the hedged item for terminated hedge accounting relationships. Par values of non-U.S.

currency denominated notes are determined using foreign exchange rates applicable as of the issuance dates.

2 MTNs and domestic bonds had terms to maturity ranging from approximately 1 year to 30 years, and had interest rates at the

time of issuance ranging from 0 percent to 10 percent.

3 EMTNs were issued in U.S. and non-U.S. currencies, had terms to maturity ranging from approximately 1 year to

30 years, and had interest rates at the time of issuance ranging from 0 percent to 15 percent.

4 Consists of fixed and floating rate debt. Upon the issuance of fixed rate debt, we generally elect to enter into

pay-float interest rate swaps. Refer to the “Derivative Instruments” section of this MD&A for further discussion.

We maintain a shelf registration with the Securities and Exchange Commission (“SEC”) to provide for the issuance of debt securities in the U.S. capital markets to both retail and institutional investors. We qualify as a well-known seasoned issuer under SEC rules, and as a result, we may issue under our registration statement an unlimited amount of debt securities during the three year period ending March 2009. Our EMTN program provides for the issuance of debt securities in the international capital markets. In September 2007, TMCC renewed its EMTN program for a one year period. TMCC’s affiliates, Toyota Motor Finance (Netherlands) B.V., Toyota Credit Canada Inc. and Toyota Finance Australia Limited (TMCC and such affiliates, the “EMTN Issuers”) joined the EMTN program as issuers. The maximum aggregate principal amount authorized under the EMTN Program to be outstanding from time to time was increased from $30 billion to €40 billion, or the equivalent in other currencies, of which €17 billion was available for issuance at April 30, 2008. The authorized amount will be shared among all EMTN Issuers. The EMTN program may be expanded from time to time to allow for the continued use of this source of funding. In addition, we may issue bonds in the international capital markets that are not issued under our U.S. and EMTN programs. Debt securities issued under the U.S. shelf registration statement are issued pursuant to the terms of an indenture, and debt securities issued under the EMTN program are issued pursuant to the terms of an agency agreement, both of which contain customary terms and conditions. Our ability to issue debt securities in the U.S. and international capital markets was temporarily delayed by our restatements.

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Liquidity Facilities and Letters of Credit

For additional liquidity purposes, we maintain syndicated bank credit facilities with certain banks.

364 Day Credit Agreement

In March 2008, TMCC, Toyota Credit de Puerto Rico Corp. (“TCPR”), and other Toyota affiliates entered into a $5.0 billion 364 day syndicated bank credit facility pursuant to a 364 Day Credit Agreement. The ability to make draws is subject to covenants and conditions customary in a transaction of this nature, including negative pledge and cross default provisions. The 364 Day Credit Agreement may be used for general corporate purposes and was not drawn upon as of March 31, 2008.

Five Year Credit Agreement

In March 2007, TMCC, TCPR, and other Toyota affiliates entered into a $8.0 billion five year syndicated bank credit facility pursuant to a Five Year Credit Agreement. The ability to make draws is subject to covenants and conditions customary in a transaction of this nature, including negative pledge and cross default provisions. The Five Year Credit Agreement may be used for general corporate purposes and was not drawn upon as of March 31, 2008.

Letters of Credit Facilities Agreement

In addition, TMCC has uncommitted letters of credit facilities totaling $55 million at March 31, 2008 and 2007. Of the total credit facilities, $1 million of the uncommitted letters of credit facilities were used at March 31, 2008 and 2007.

Securitization

Our securitization program represents an additional source of liquidity which can be used as appropriate. As of March 31, 2008, we owned approximately $44 billion in potentially securitizable retail finance receivables. We maintain an effective registration statement that complies with Regulation AB, the SEC’s rule governing the offering of asset backed securities, and which can be used to issue asset backed securities secured by our retail finance contracts. During fiscal 2008, we did not execute any securitization transactions. TMCC will continue to evaluate the market for asset-backed securities and take into consideration its funding strategies in determining whether to employ securitization funding in the future.

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Credit Support Agreements

Under the terms of a credit support agreement between TMC and TFSC (“TMC Credit Support Agreement”), TMC agreed to: 1) maintain 100 percent ownership of TFSC; 2) cause TFSC and its subsidiaries to have a net worth of at least ¥10 million, equivalent to $100,311 at March 31, 2008; and 3) make sufficient funds available to TFSC so that TFSC will be able to (i) service the obligations arising out of its own bonds, debentures, notes and other investment securities and commercial paper and (ii) honor its obligations incurred as a result of guarantees or credit support agreements that it has extended. The agreement is not a guarantee by TMC of any securities or obligations of TFSC.

Under the terms of a similar credit support agreement between TFSC and TMCC (“TFSC Credit Support Agreement”), TFSC agreed to: 1) maintain 100 percent ownership of TMCC; 2) cause TMCC and its subsidiaries to have a net worth of at least $100,000; and 3) make sufficient funds available to TMCC so that TMCC will be able to service the obligations arising out of its own bonds, debentures, notes and other investment securities and commercial paper (collectively, “TMCC Securities”). The agreement is not a guarantee by TFSC of any TMCC Securities or other obligations of TMCC. The TMC Credit Support Agreement and the TFSC Credit Support Agreement are governed by, and construed in accordance with, the laws of Japan. TMCC Securities do not include the securities issued by securitization trusts in connection with TMCC’s securitization programs.

Holders of TMCC Securities have the right to claim directly against TFSC and TMC to perform their respective obligations under the Credit Support Agreements by making a written claim together with a declaration to the effect that the holder will have recourse to the rights given under the Credit Support Agreement. If TFSC and/or TMC receives such a claim from any holder of TMCC Securities, TFSC and/or TMC shall indemnify, without any further action or formality, the holder against any loss or damage resulting from the failure of TFSC and/or TMC to perform any of their respective obligations under the Credit Support Agreements. The holder of TMCC Securities who made the claim may then enforce the indemnity directly against TFSC and/or TMC.

In connection with the TFSC Credit Support Agreement, TMCC and TFSC are parties to a credit support fee agreement (“Credit Support Fee Agreement”). The Credit Support Fee Agreement requires TMCC to pay to TFSC a semi-annual fee which is based upon the weighted average outstanding amount of TMCC Securities entitled to credit support.

TCPR is the beneficiary of a credit support agreement with TFSC containing the same provisions as the TFSC Credit Support Agreement described above but pertaining to TCPR and TCPR bonds, debentures, notes and other investment securities and commercial paper (collectively, “TCPR Securities”). Holders of TCPR Securities have the right to claim directly against TFSC and TMC to perform their respective obligations as described above. This agreement is not a guarantee by TFSC of any securities or other obligations of TCPR. TCPR has agreed to pay TFSC a semi-annual fee which is based upon the weighted average outstanding amount of TCPR Securities entitled to credit support.

TMC files periodic reports and other information with the SEC, which can be read and copied at the SEC’s Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Copies of such material may also be obtained at prescribed rates by mail at the same address. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. TMC’s filings may also be found on its website located at: www.toyota.com under “Company Info, Our Company, Our Business, Investor Relations, Presentations and SEC Filings”.

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Credit Ratings

As of April 30, 2008, the ratings and outlook established by Moody’s and S&P for TMCC were as follows:

NRSRO	Senior Debt	Commercial Paper	Outlook
S&P	AAA	A-1+	Stable
Moody’s	Aaa	P-1	Stable

The cost and availability of unsecured financing is influenced by credit ratings, which are intended to be an indicator of the creditworthiness of a particular company, security or obligation. Lower ratings generally result in higher borrowing costs as well as reduced access to capital markets. Credit ratings are not recommendations to buy, sell, or hold securities and are subject to revision or withdrawal at any time by the assigning nationally recognized statistical rating organization (“NRSRO”). Each NRSRO may have different criteria for evaluating risk, and therefore ratings should be evaluated independently for each NRSRO. Our credit ratings depend in part on the existence of the credit support agreements of TFSC and TMC. See “Credit Support” in Item 1A., “Risk Factors”.

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Derivative Instruments

Business Use of Derivative Instruments

Our assets consist primarily of U.S. dollar denominated fixed rate receivables. Our liabilities consist primarily of fixed and floating rate debt which is issued in the global capital markets. In order to maintain a conservative liquidity profile, the life of our debt is typically longer than that of our assets. Upon the issuance of fixed rate debt, we generally elect to enter into pay-float interest rate swaps. The terms of pay-float swap agreements correspond to the terms of the debt. The interest rate risk arising from the mismatch in the re-pricing of assets relative to liabilities is managed via pay-fixed swaps and purchased interest rate caps which are executed on a portfolio basis. Our pay-fixed swap agreements are primarily two to three years in tenor from origination. The currency exposure related to non-U.S. dollar denominated debt is economically hedged at issuance, using cross currency interest rate swaps, currency basis swaps, or a combination of interest rate swaps coupled with currency basis swaps to convert non-U.S. dollar denominated debt to U.S. dollar denominated payments.

We enter into derivative instruments for risk management purposes. Our use of derivatives is limited to the management of interest rate and foreign exchange risks.

Accounting for Derivative Instruments

All derivative instruments are recorded on the balance sheet at fair value, taking into consideration the effects of legally enforceable master netting agreements that allow us to net settle positive and negative positions and offset cash collateral held with the same counterparty on a net basis. Changes in the fair value of the derivatives are recorded in interest expense in the Consolidated Statement of Income.

We categorize derivatives as those designated for hedge accounting (“hedge accounting derivatives”) and those that are not designated for hedge accounting (“non-hedge accounting derivatives”). We elect at inception whether to designate a derivative as a hedge accounting derivative. That designation may change based on management’s intentions and changing circumstances. Hedge accounting derivatives are comprised of pay-float interest rate swaps and cross currency interest rate swaps. Non-hedge accounting derivatives are comprised of pay-fixed interest rate swaps, de-designated pay-float interest rate swaps, pay-float interest rate swaps for which hedge accounting has not been elected, interest rate caps, and currency swaps. De-designation of hedge accounting derivatives is further discussed below.

In order to qualify for hedge accounting, a derivative must be considered highly effective at reducing the risk associated with the exposure being hedged. When we designate a derivative in a hedging relationship, we document the risk management objective and strategy. This documentation includes the identification of the hedging instrument, the hedged item and the risk exposure, and how we will assess effectiveness prospectively and retrospectively. We assess the extent to which a hedging instrument is effective at achieving offsetting changes in fair value at least quarterly. We recognize changes in the fair value of derivatives designated in fair value hedging relationships (including foreign currency fair value hedging relationships) in interest expense in the Consolidated Statement of Income along with the fair value changes of the hedged item attributable to the hedged risk. For certain types of existing hedge relationships that meet stringent criteria, we apply the shortcut method, which provides an assumption of zero ineffectiveness that results in equal and offsetting changes in fair value in the Consolidated Statement of Income for both the hedged debt and the hedge accounting derivative.

When the shortcut method is not applied, any ineffective portion of the derivative that is designated as a fair value hedge is recognized as a component of interest expense in the Consolidated Statement of Income. If we elect not to designate a derivative instrument in a hedging relationship, or the relationship does not qualify for hedge accounting treatment, the full change in the fair value of the derivative instrument is recognized as a component of interest expense in the Consolidated Statement of Income with no offsetting adjustment for the economically hedged item.

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We review the effectiveness of our hedging relationships quarterly to determine whether the relationships have been and continue to be effective. We use regression analysis to assess the effectiveness of our hedges. When we determine that a hedging relationship is not or has not been effective, hedge accounting is no longer applied. If hedge accounting is discontinued, we continue to carry the derivative instrument as a component of other assets or other liabilities in the Consolidated Balance Sheet at its fair value with changes in fair value reported as interest expense in the Consolidated Statement of Income. Additionally, for discontinued fair value hedges, we cease to adjust the hedged item for changes in fair value and amortize the cumulative fair value adjustments recognized in prior periods over the remaining term of the debt.

We will also discontinue the use of hedge accounting if a derivative is sold, terminated, or exercised, or if management determines that designating a derivative under hedge accounting is no longer appropriate (“de-designated derivatives”). De-designated derivatives are included within the category of non-hedge accounting derivatives.

We also issue debt which can be characterized as hybrid financial instruments. These obligations may meet the definition in Statement of Financial Accounting Standards (“SFAS”) No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“SFAS 133”), of an “embedded derivative.” These debt instruments are assessed to determine whether the embedded derivative requires separate reporting and accounting, and if so, the embedded derivative may be recorded on the balance sheet at fair value or the entire financial instrument may be recorded at fair value under SFAS No. 155, “Accounting for Certain Hybrid Instruments” (“SFAS 155”). Changes in the fair value of the embedded derivative or the entire hybrid financial instrument, and associated non-hedge accounting derivative are reported in interest expense in the Consolidated Statement of Income. Separating an embedded derivative from its host contract requires careful analysis, judgment, and an understanding of the terms and conditions of the instrument.

One of our goals is to manage the interest rate risk arising from the differences in timing between the re-pricing of assets relative to liabilities. We use non-hedge accounting derivatives, specifically pay-fixed interest rate swaps and interest rate caps, to manage this exposure. The use of non-hedge accounting derivatives to mitigate this risk has historically resulted in significant volatility in the net result from non-hedge accounting. This volatility arises from the difference in accounting treatment between non-hedge accounting derivatives, which are reported at fair value, and that of the assets, which are reported at historical cost. We address this volatility by de-designating certain pay-float interest rate swaps (previously treated as hedge accounting derivatives) that have offsetting economic characteristics to the non-hedge accounting derivatives or by electing not to designate certain pay-float interest rate swaps in a hedging transaction. We employ analytical measures such as duration and Value at Risk to identify whether to de-designate a hedge accounting derivative or to not elect hedge accounting.

De-designating hedge accounting derivatives or not electing hedge accounting typically reduces volatility in the net result from non-hedge accounting because the combined changes in the fair value of these derivatives with those of other non-hedge accounting derivatives result in a natural offset in the Statement of Consolidated Income. The hedged item associated with the derivative previously treated as a hedge accounting derivative ceases to be adjusted for changes in fair value upon de-designation. To the extent we can more closely match the accounting treatment to the underlying economics of the derivatives portfolio by de-designating or by not electing hedge accounting, the transaction is identified and treated as a non-hedge accounting derivative and volatility is typically reduced. There may be interest rate scenarios where volatility may increase as a result of discontinuing hedge accounting. However, we consider the likelihood of such scenarios occurring to be remote.

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Our management’s expectation is that the combination of the changes in fair values of de-designated derivatives with those of non-hedge accounting derivatives will continue to reduce volatility on a quarterly basis. Our management does not engage in de-designation with a view as to the favorable or unfavorable impact on the results of operations. De-designation has resulted in lower losses in the net result from non-hedge accounting in certain quarters and in lower gains in the net result from non-hedge accounting in other quarters. These decreases represent reductions in volatility in the net result from non-hedge accounting. We estimate that the impact of de-designation on the results of operations was a reduction in the volatility in net result from non-hedge accounting of approximately $223 million and $25 million for the quarters ended March 31, 2008 and March 31, 2007, respectively. Our management evaluates the reduction of volatility on a quarterly basis only, and does not aggregate or net these quarterly reductions for the twelve month period.

Derivative Assets and Liabilities

The following table summarizes our derivative assets and liabilities, which are included in other assets and other liabilities in the Consolidated Balance Sheet (dollars in millions):

	March 31,
	2008	2007
	As Currently Restated	As Previously Restated
Derivative assets	$3,189	$1,529
Less: Collateral held1	1,656	291
Derivative assets, net of collateral	$1,533	$1,238

Derivative liabilities	$1,101	$97

1 Represents cash received under reciprocal collateral arrangements that we have entered into with certain derivative

counterparties as described in Item 7A., “Quantitative and Qualitative Disclosures About Market Risk”.

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The following table summarizes the composition of our derivatives portfolio (dollars in millions):

	Notionals:			Fair value of :
	Hedge accounting derivatives	Non-hedge accounting derivatives	Total notionals	Derivative assets	Derivative liabilities
March 31, 2008
(As Currently Restated)
Pay-float swaps1	$22,200	$23,240	$45,440	$3,892	($255)
Pay-fixed swaps	-	51,863	51,863	6	(1,555)
Interest rate caps	-	295	295	-	-
Counterparty netting	-	-	-	(709)	709
Total	$22,200	$75,398	$97,598	$3,189	($1,101)

March 31, 2007
(As Previously Restated)
Pay-float swaps1	$21,036	$14,537	$35,573	$1,417	($112)
Pay-fixed swaps	-	42,126	42,126	121	-
Interest rate caps	-	945	945	6	-
Counterparty netting	-	-	-	(15)	15
Total	$21,036	$57,608	$78,644	$1,529	($97)

1 Includes cross-currency interest rate swaps and currency basis swaps.

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Interest Expense

The following table summarizes the components of interest expense (dollars in millions):

	Years ended March 31,
	2008	2007	2006
	As Currently Restated	As Previously Restated	As Previously Restated
Interest expense on debt	$3,000	$2,561	$1,792
Amortization of basis adjustments on debt	(32)	(72)	(128)
Unrealized loss (gain) from hedge accounting derivatives	33	(78)	(60)
Net interest realized on hedge accounting derivatives	246	278	112
Amortization of debt issue costs	63	57	43
Ineffectiveness related to hedge accounting derivatives	(4)	15	4
Interest expense excluding non-hedge accounting results	3,306	2,761	1,763
Net result from non-hedge accounting	845	(99)	(202)
Total interest expense	$4,151	$2,662	$1,561

Fiscal 2008 versus Fiscal 2007

Interest expense on debt primarily represents the interest due on notes and loans payable and commercial paper. The increase was primarily due to higher outstanding balances on unsecured debt and commercial paper issuances.

The amortization of basis adjustments on debt is primarily comprised of amortization related to the fair value adjustments on debt for terminated fair value hedging relationships. As discussed in the “Derivative Instruments” section of this MD&A, the de-designation of the hedge accounting derivatives results in the termination of fair value hedging relationships. As a consequence of these terminations, the fair value adjustments to the hedged items continue to be reported as part of the basis of the debt and are amortized to interest expense over the remaining life of the debt. The decrease in amortization for fiscal 2008 as compared to the prior year was due to maturities during fiscal 2007 of debt associated with previously terminated fair value hedging relationships.

Net interest realized on hedge accounting derivatives represents net interest on pay-float swaps for which hedge accounting has been elected. The decline for fiscal 2008 when compared to fiscal 2007 was due to lower average three-month LIBOR rates.

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The following table summarizes the components of the net result from non-hedge accounting, which is included in interest expense (dollars in millions):

	Years ended March 31,
	2008	2007	2006
	As Currently Restated	As Previously Restated	As Previously Restated
Currency basis swaps unrealized (gain)/loss	($152)	($127)	$114
Foreign currency transaction loss/(gain)	174	127	(115)
Net interest realized on non-hedge accounting derivatives	(119)	(344)	(260)
Unrealized loss on non-hedge accounting derivatives
Interest rate swaps	930	242	51
Interest rate caps	12	3	7
Other	-	-	1
Net result from non-hedge accounting	$845	($99)	($202)

Fiscal 2008 versus Fiscal 2007

Currency basis swaps are used to convert non-U.S. dollar denominated debt to U.S. dollar denominated payments. We have elected hedge accounting for the interest rate swaps and debt, but have elected not to apply hedge accounting for the currency basis swaps. The gain in the fair value of the currency basis swaps was primarily due to the weakening of the U.S. dollar relative to certain other currencies.

The foreign currency transaction loss relates to foreign currency denominated debt where hedge accounting has been applied only for interest rate risk. The loss recognized was primarily due to the weakening of the U.S. dollar relative to certain other currencies. Foreign currency transaction loss offsets the unrealized gain on the currency basis swaps discussed above.

Net interest realized on non-hedge accounting derivatives represents interest received on pay-fixed swaps offset by interest paid on non-hedge accounting pay-float swaps. The change for fiscal 2008 when compared with the prior year was primarily due to the impact of the decline in the three-month LIBOR, resulting in lower interest payments received on pay-fixed swaps, partially offset by lower interest payments made on pay-float swaps. The unrealized loss on non-hedge accounting derivatives was primarily due to the impact of the decline in swap rates on pay-fixed swaps.

Refer to the “Derivative Instruments” section above for further discussion.

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Fiscal 2007 Compared to Fiscal 2006

Our consolidated net income was $434 million and $544 million during fiscal 2007 and fiscal 2006, respectively. Our results in fiscal 2007 were primarily affected by an increase in interest expense due to higher market interest rates, our higher outstanding debt portfolio, and the impact of our derivatives portfolio. This was partially offset by the impact of an increase in financing volume to 1.3 million units on our retail and lease contracts and an increase in agreements issued on our insurance products to 1.4 million units which resulted in increased revenues. We also realized a higher level of gains on our investment portfolio.

Our financing operations reported net income of $319 million and $488 million during fiscal 2007 and fiscal 2006, respectively. The decrease in net income resulted from continued margin pressure due to the interest rate environment, and to a lesser extent, higher provisions for credit losses as a result of our growth in earning assets and our broader range of credit quality within the retail portfolio.

Our insurance operations reported net income of $115 million and $56 million during fiscal 2007 and fiscal 2006, respectively. Our results in fiscal 2007 were primarily affected by higher level of realized gains on our investment portfolio and increased contract revenues and earned premiums. This was partially offset by the increase in insurance losses and loss adjustment expenses. Insurance losses and loss adjustment expenses increased primarily due to the increase in the number of agreements in force.

Overall, we increased our capital position by $272 million bringing total equity to $5.0 billion at March 31, 2007. Our debt-to-equity positions were 11.65 and 10.25 at March 31, 2007 and 2006, respectively.

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Following are the portions of Management’s Discussion and Analysis of Financial Condition and Results of Operations previously included in our Form 10-Qs related to the quarterly periods in fiscal 2008 and 2007 that are impacted by the current and previous restatements.

QUARTER ENDED DECEMBER 31, 2007 and 2006

OPERATING SUMMARY

For the three and nine month periods ended December 31, 2007 and 2006

Our consolidated net loss was $99 million for the third quarter of fiscal 2008 compared to our consolidated net income of $121 million for the third quarter of fiscal 2007. Our consolidated net income was $74 million for the first nine months of fiscal 2008 compared to $337 million for the first nine months of fiscal 2007.

Our financing operations reported net loss of $158 million for the third quarter of fiscal 2008 compared to our consolidated net income of $98 million for the third quarter of fiscal 2007. Our financing operations reported net loss of $26 million for the first nine months of fiscal 2008 compared to net income of $274 million for the first nine months of fiscal 2007.

FINANCING OPERATIONS

Results of Operations

Fiscal 2008 compared to Fiscal 2007

	Percentage change fiscal 2008 versus fiscal 2007
	Three Months Ended December 31	Nine Months Ended December 31
	As Currently Restated	As Currently Restated
Operating lease	21%	23%
Direct finance lease	(39%)	(33%)
Retail financing	23%	27%
Dealer financing	22%	24%
Total financing revenues	21%	24%

Depreciation on operating leases	22%	24%
Interest expense	67%	45%
Net financing revenues	(61%)	(17%)

Net financing revenues decreased 61 percent and 17 percent during the third quarter and first nine months of fiscal 2008, respectively, compared to the same periods in fiscal 2007. The decrease in our net financing revenues was impacted by the increase in total interest expense.

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LIQUIDITY AND CAPITAL RESOURCES

The following table summarizes the outstanding components of our funding sources (dollars in millions):

	December 31, 2007	March 31, 2007
	As Previously Restated
Commercial paper	$20,5555	$14,954
Unsecured term debt1	47,8500	43,642
Total debt	68,4055	58,596
Off-balance sheet securitization	299	156
Total funding	$68,4344	$58,752

1	Includes carrying value adjustments of $2.1 billion and $1.2 billion at December 31 and March 31, 2007, respectively.

Derivative Assets and Liabilities

The following table summarizes our derivative assets and liabilities, which are included in other assets and other liabilities in the Consolidated Balance Sheet (dollars in millions):

	December 31, 2007	March 31, 2007
	As Currently Restated	As Previously Restated
Derivative assets	$2,427	$1,529
Less: Collateral held1	908	291
Derivative assets, net of collateral	$1,519	$1,238

Derivative liabilities	$393	$97

1	Represents cash received under reciprocal collateral arrangements that we have entered into with certain derivative counterparties as described in the “Counterparty Credit Risk” section below.

A summary of our net counterparty credit exposure by credit rating as of December 31, 2007 and March 31, 2007 (net of collateral held) is presented below (dollars in millions):

	December 31, 2007	March 31, 2007
	As Currently Restated	As Previously Restated
Credit Rating
AAA	$145	$226
AA	1,093	944
A	281	68
Total net counterparty credit exposure	$1,519	$1,238

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The following table summarizes the composition of our derivatives portfolio (dollars in millions):

	Notionals:			Fair value of :
	Hedge accounting derivatives	Non-hedge accounting derivatives	Total notionals	Derivative assets	Derivative liabilities

December 31, 2007
(As Currently Restated)
Pay-float swaps 1	$26,470	$14,703	$41,173	$2,547	($53)
Pay-fixed swaps	-	49,531	49,531	-	(460)
Interest rate caps	-	595	595	-	-
Counterparty netting	-	-	-	(120)	120
Total	$26,470	$64,829	$91,299	$2,427	($393)

March 31, 2007
(As Previously Restated)
Pay-float swaps 1	$21,036	$14,537	$35,573	$1,417	($112)
Pay-fixed swaps	-	42,126	42,126	121	-
Interest rate caps	-	945	945	6	-
Counterparty netting	-	-	-	(15)	15
Total	$21,036	$57,608	$78,644	$1,529	($97)

December 31, 2006
(As Previously Restated)
Pay-float swaps 1	$18,500	$15,018	$33,518	$1,546	($120)
Pay-fixed swaps	-	38,850	38,850	251	-
Interest rate caps	-	945	945	8	-
Counterparty netting	-	-	-	(15)	15
Total	$18,500	$54,813	$73,313	$1,790	($105)

1Includes cross-currency interest rate swaps and currency basis swaps.

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INTEREST EXPENSE

The following table summarizes the components of interest expense for the three and nine months ended December 31, 2007 and 2006 (dollars in millions):

	Three Months Ended December 31,		Nine Months Ended December 31,
	2007	2006	2007	2006
	As Currently Restated	As Previously Restated	As Currently Restated	As Previously Restated
Interest expense on debt	$769	$669	$2,227	$1,849
Amortization of basis adjustments on debt	(7)	(17)	(27)	(54)
Net interest realized on hedge accounting derivatives	102	83	290	172
Amortization of debt issue costs	19	15	51	41
Ineffectiveness related to hedge accounting derivatives	(4)	(2)	(6)	8
Interest expense excluding non-hedge accounting results	879	748	2,535	2,016
Net result from non-hedge accounting	235	(80)	242	(96)
Total interest expense	$1,114	$668	$2,777	$1,920

Three Months Ended December 31, 2007 vs. December 31, 2006

Interest expense on debt primarily represents the interest due on notes and loans payable and commercial paper. The increase during the third quarter of fiscal 2008 when compared to the same period in fiscal 2007 was primarily due to higher outstanding balances on unsecured debt and commercial paper and increased average cost of debt.

The amortization of basis adjustments on debt is primarily comprised of amortization related to the fair value adjustments on debt for terminated fair value hedging relationships. As discussed in the “Derivative Instruments” section of this MD&A, the de-designation of the hedge accounting derivatives resulted in the termination of fair value hedging relationships. As a consequence of these terminations, the fair value adjustments to the hedged items continue to be reported as part of the basis of the debt and are amortized to interest expense over the life of the debt. The decrease in amortization during the third quarter of fiscal 2008 when compared to the same period in fiscal 2007 was due to maturities during the third quarter of fiscal 2008 of debt associated with previously terminated fair value hedging relationships.

Net interest realized on hedge accounting derivatives represents net interest on pay-float swaps for which hedge accounting has been elected. The change during the third quarter of fiscal 2008 when compared to the same period in fiscal 2007 was due to the decline of the average three-month LIBOR for the respective periods offset by increased notionals.

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Nine Months Ended December 31, 2007 vs. December 31, 2006

The increase in interest expense on debt during the first nine months of fiscal 2008 when compared to the same period in fiscal 2007 was primarily due to higher outstanding balances on unsecured debt and commercial paper and increased average cost of debt.

The decrease in amortization of basis adjustment on debt during the first nine months of fiscal 2008 when compared to the same period in fiscal 2007 was due to maturities during the first nine months of fiscal 2008 of debt associated with previously terminated fair value hedging relationships.

The change in net interest realized on hedge accounting derivatives during the first nine months of fiscal 2008 when compared to the same period in fiscal 2007 was due to increased notionals during the first nine months of fiscal 2008 compared to the same period in fiscal 2007 offset by a decrease in the average three-month LIBOR.

The following table summarizes the components of the net result from non-hedge accounting, which is included in interest expense for the three and nine months ended December 31, 2007 and 2006 (dollars in millions):

	Three Months Ended December 31,		Nine Months Ended December 31,
	2007	2006	2007	2006
	As Currently Restated		As Currently Restated
Currency basis swaps unrealized (gain)	($24)	($50)	($71)	($123)
Foreign currency transaction loss	18	49	78	122
Net interest realized on non-hedge accounting derivatives	(45)	(93)	(163)	(267)
Unrealized loss/(gain) on non-hedge accounting derivatives:
Interest rate swaps	293	12	385	172
Interest rate caps	(7)	2	13	-
Net result from non-hedge accounting	$235	($80)	$242	($96)

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QUARTER ENDED SEPTEMBER 30, 2007 and 2006

OPERATING SUMMARY

For the three and six months ended September 30, 2007 and 2006

Our consolidated net loss was $6 million for the second quarter of fiscal 2008 compared to our consolidated net income of $37 million for the second quarter of fiscal 2007. Our consolidated net income was $168 million for the first half of fiscal 2008 compared to $216 million for the first half of fiscal 2007. Our net loss in the second quarter of fiscal 2008 was primarily affected by the increase in total interest expense. This includes unrealized losses on our derivatives used to manage interest rate risk in our loan and lease portfolio. In addition, total interest expense increased due to higher outstanding debt balances. Earnings were negatively impacted by higher provision for credit losses and higher operating and administrative expenses. Our net loss was partially offset by our higher portfolio yields on our finance receivables along with an overall increase in the finance receivables balance.

Our financing operations reported net loss of $32 million for the second quarter of fiscal 2008 compared to our consolidated net income of $4 million for the second quarter of fiscal 2007. Our financing operations reported net income of $127 million for the first half of fiscal 2008 compared to $176 million for the first half of fiscal 2007. The decrease in net income resulted from increased total interest expense due to unrealized losses on our derivatives and higher outstanding debt balances as discussed above. The decrease in net income was also impacted by a higher provision for credit losses resulting from growth in earning assets and our broader range of credit quality within the retail portfolio.

FINANCING OPERATIONS

Results of Operations

Fiscal 2008 compared to Fiscal 2007

	Percentage change fiscal 2008 versus fiscal 2007
	Three Months Ended September 30	Six Months Ended September 30
	As Previously Restated
Operating lease	23%	24%
Direct finance lease	(30%)	(30%)
Retail financing	29%	29%
Dealer financing	24%	25%
Total financing revenues	24%	25%

Depreciation on operating leases	25%	26%
Interest expense	29%	33%
Net financing revenues	4%	9%

Net financing revenues increased 4 percent and 9 percent during the second quarter and first half of fiscal 2008, respectively, compared to the same periods in fiscal 2007. The increase in our net financing revenues was primarily due to higher portfolio yields on our finance receivables along with an overall increase in the finance receivables balance. This was partially offset by the increase in total interest expense. This includes unrealized losses on our derivatives used to manage interest rate risk in our loan and lease portfolio. In addition, total interest expense increased due to higher outstanding debt balances.

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LIQUIDITY AND CAPITAL RESOURCES

Liquidity risk is the risk arising from the inability to meet obligations when they come due. Our liquidity strategy is to maintain the capacity to fund assets and repay liabilities in a timely and cost-effective manner even in the event of adverse market conditions. This capacity primarily arises from our ability to raise funds in the global capital markets as well as our ability to generate liquidity from our balance sheet. This strategy has led us to develop a borrowing base that is diversified by market and geographic distribution, type of security, and investor type, among other factors, as well as a securitization program. Credit support provided by our parent provides an additional source of liquidity to us, although it is not relied upon in our liquidity planning and capital and risk management.

The following table summarizes the outstanding components of our funding sources (dollars in millions):

	September 30, 2007	March 31, 2007
	As Previously Restated
Commercial paper	$18,6588	$14,954
Unsecured term debt1	45,8466	43,642
Total debt	64,5044	58,596
Off-balance sheet securitization	488	156
Total funding	$64,5522	$58,752

1	Includes carrying value adjustments of $2.1 billion and $1.2 billion at September 30 and March 31, 2007.

For liquidity purposes, we hold cash in excess of our immediate funding needs. These excess funds are invested in short-term, highly liquid and investment grade money market instruments, which provide liquidity for our short-term funding needs and flexibility in the use of our other funding sources. We maintained excess funds ranging from $688 million to $3 billion during the three months ended September 30, 2007, with an average balance of $2 billion.

We may lend to or borrow from affiliates on terms based upon a number of business factors such as funds availability, cash flow timing, relative cost of funds, and market access capabilities.

- 68 - -

DERIVATIVE INSTRUMENTS

One of our goals is to manage the interest rate risk arising from the differences in timing between the re-pricing of assets relative to liabilities. We use non-hedge accounting derivatives, specifically pay-fixed interest rate swaps and interest rate caps, to manage this exposure. The use of these non-hedge accounting derivatives to mitigate interest rate risk has historically resulted in significant volatility in the net result from non-hedge accounting. The combination of the changes in fair values of de-designated derivatives with those of non-hedge accounting derivatives has had the effect of reducing earnings volatility. Our management does not engage in de-designation with a view as to the favorable or unfavorable impact on the results of operations. De-designation has resulted in lower losses in the net result from non-hedge accounting in certain quarters and in lower gains in the net result from non-hedge accounting in other quarters. These decreases represent reductions in volatility in the net result from non-hedge accounting. We estimate that the impact of de-designation on the results of operations was a reduction in the volatility in net result from non-hedge accounting of approximately $135 million for the quarter ended September 30, 2007, and approximately $53 million for the quarter ended September 30, 2006. Our management evaluates the reduction of volatility on a quarterly basis only.

Derivative Assets and Liabilities

The following table summarizes our derivative assets and liabilities, which are included in other assets and other liabilities in the Consolidated Balance Sheet (dollars in millions):

	September 30, 2007	March 31, 2007
	As Previously Restated
Derivative assets	$2,609	$1,529
Less: Collateral held1	806	291
Derivative assets, net of collateral	$1,803	$1,238

Derivative liabilities	$229	$97

1	Represents cash received under reciprocal collateral arrangements that we have entered into with certain derivative counterparties as described in the “Counterparty Credit Risk” section below.

Counterparty Credit Risk

We enter into reciprocal collateral arrangements with certain counterparties to mitigate our exposure to the credit risk associated with the respective counterparty. A valuation of our position with the respective counterparty is performed at least monthly. If the market value of our net derivatives position with the counterparty exceeds a specified threshold, the counterparty is required to transfer cash collateral in excess of the threshold to us. Conversely, if the market value of the counterparty's net derivatives position with us exceeds a specified threshold, we are required to transfer cash collateral in excess of the threshold to the counterparty. Our International Swaps and Derivatives Association (“ISDA”) Master Agreements with counterparties contain legal right of offset provisions, and therefore the collateral amounts are netted against derivative assets, which are included in other assets in the Consolidated Balance Sheet. At September 30 and March 31, 2007, we held a net $806 million and $291 million, respectively, in collateral from counterparties, which is included in cash and cash equivalents in our Consolidated Balance Sheet. We are not required to hold the collateral in a segregated account.

- 69 - -

Counterparty credit risk of derivative instruments is represented by the net fair market value of derivative contracts at September 30, 2007, reduced by collateral. At September 30, 2007, substantially all of our derivative instruments were executed with commercial banks and investment banking firms assigned investment grade ratings of "A" or better by NRSROs. We have not experienced a counterparty default and have no reserves related to non-performance as of September 30, 2007. In addition, many of our ISDA Master Agreements with counterparties contain reciprocal ratings triggers providing either party with an option to terminate the agreement and related transactions at market value in the event of a ratings downgrade below a specified threshold.

A summary of our net counterparty credit exposure by credit rating as of September 30, 2007 and March 31, 2007 (net of collateral held) is presented below (dollars in millions):

	September 30, 2007	March 31, 2007
	As Previously Restated
Credit Rating
AAA	$366	$226
AA	1,199	944
A	238	68
Total net counterparty credit exposure	$1,803	$1,238

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The following table summarizes the composition of our derivatives portfolio (dollars in millions):

	Notionals:			Fair value of :
	Hedge accounting derivatives	Non-hedge accounting derivatives	Total notionals	Derivative assets	Derivative liabilities
	As Previously Restated
September 30, 2007
Pay-float swaps 1	$24,483	$14,138	$38,621	$2,419	($60)
Pay-fixed swaps	-	46,811	46,811	115	(95)
Interest rate caps	-	595	595	1	-
Counterparty netting	-	-	-	74	(74)
Total	$24,483	$61,544	$86,027	$2,609	($229)

March 31, 2007
Pay-float swaps 1	$21,036	$14,537	$35,573	$1,417	($112)
Pay-fixed swaps	-	42,126	42,126	121	-
Interest rate caps	-	945	945	6	-
Counterparty netting	-	-	-	(15)	15
Total	$21,036	$57,608	$78,644	$1,529	($97)

September 30, 2006
Pay-float swaps 1	$17,571	$15,082	$32,653	$1,230	($152)
Pay-fixed swaps	-	39,350	39,350	299	-
Interest rate caps	-	945	945	8	-
Counterparty netting	-	-	-	(11)	11
Total	$17,571	$55,377	$72,948	$1,526	($141)

1Includes cross-currency interest rate swaps and currency basis swaps.

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INTEREST EXPENSE

The following table summarizes the components of interest expense for the three and six months ended September 30, 2007 and 2006 (dollars in millions):

	Three Months Ended September 30,		Six Months Ended September 30,
	2007	2006	2007	2006
	As Previously Restated

Interest expense on debt	$729	$628	$1,457	$1,180
Amortization of basis adjustments on debt	(6)	(19)	(20)	(37)
Net interest realized on hedge accounting derivatives	107	61	189	89
Amortization of debt issue costs	16	14	32	26
Ineffectiveness related to hedge accounting derivatives	5	3	(2)	10
Interest expense excluding non-hedge accounting results	851	687	1,656	1,268
Net result from non-hedge accounting	139	81	7	(16)
Total interest expense	$990	$768	$1,663	$1,252

The following table summarizes the components of the net result from non-hedge accounting, which is included in interest expense for the three and six months ended September 30, 2007 and 2006 (dollars in millions):

	Three Months Ended September 30,		Six Months Ended September 30,
	2007	2006	2007	2006
	As Previously Restated
Currency basis swaps unrealized (gain)/loss	($49)	$13	($47)	($73)
Foreign currency transaction loss/(gain)	57	(13)	60	73
Net interest realized on non-hedge accounting derivatives	(59)	(101)	(118)	(174)
Unrealized loss/(gain) on non-hedge accounting derivatives:
Interest rate swaps	182	180	92	160
Interest rate caps	8	2	20	(2)
Net result from non-hedge accounting	$139	$81	$7	($16)

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QUARTER ENDED JUNE 30, 2007 and 2006

OPERATING SUMMARY

For the three months ended June 30, 2007 and 2006

Our consolidated net income was $174 million for the first quarter of fiscal 2008, compared to $179 million for the same period in fiscal 2007. Our results in fiscal 2008 were primarily affected by the increase in interest expense due to our higher outstanding debt portfolio and a higher average cost of debt. We also experienced a higher provision for credit losses and higher operating and administrative expenses. This was partially offset by an increase in our financing revenues which were favorably impacted by increased finance receivables and higher portfolio yields on our finance receivables.

Our financing operations reported net income of $159 million for the first quarter of fiscal 2008, compared to $172 million for the same period in fiscal 2007. The decrease in net income resulted from the increase in interest expense discussed above and a higher provision for credit losses resulting from growth in earning assets and our broader range of credit quality within the retail portfolio. This was partially offset by the increase in our financing revenues due to higher finance receivables and higher portfolio yields on our finance receivables.

FINANCING OPERATIONS

Results of Operations

Fiscal 2008 compared to Fiscal 2007

		Percentage change Fiscal 2008 versus 2007
		As Previously Restated
Operating lease		26%
Direct finance lease		(30%)
Retail financing		29%
Dealer financing		26%
Total financing revenues		26%

Depreciation on operating leases		26%
Interest expense		39%
Net financing revenues		11%

Net financing revenues increased 11 percent during the first quarter of fiscal 2008 compared to the same period in fiscal 2007. Our net financing revenues were affected by increased finance receivables and higher portfolio yields on our finance receivables. This was partially offset by the increase in interest expense due to our higher outstanding debt portfolio and a higher average cost of debt.

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LIQUIDITY AND CAPITAL RESOURCES

Liquidity risk is the risk arising from the inability to meet obligations when they come due. Our liquidity strategy is to maintain the capacity to fund assets and repay liabilities in a timely and cost-effective manner even in the event of adverse market conditions. This capacity primarily arises from our ability to raise funds in the global capital markets as well as our ability to generate liquidity from our balance sheet. This strategy has led us to develop a borrowing base that is diversified by market and geographic distribution, type of security, and investor type, among other factors, as well as a securitization program. Credit support provided by our parent provides an additional source of liquidity to us, although it is not relied upon in our liquidity planning and capital and risk management.

The following table summarizes the outstanding components of our funding sources (dollars in millions):

	June 30, 2007	March 31, 2007
	As Previously Restated
Commercial paper	$15,1633	$14,954
Unsecured term debt1	46,1111	43,642
Total debt	61,2744	58,596
Off-balance sheet securitization	1022	156
Total funding	$61,3766	$58,752

1	Includes carrying value adjustments of $1.1 billion and $1.2 billion at June 30 and March 31, 2007, respectively.

For liquidity purposes, we hold cash in excess of our immediate funding needs. These excess funds are invested in short-term, highly liquid and investment grade money market instruments, which provide liquidity for our short-term funding needs and flexibility in the use of our other funding sources. We maintained excess funds ranging from $471 million to $3.6 billion during the three months ended June 30, 2007, with an average balance of $2.3 billion.

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Unsecured Term Debt

The following table summarizes our components of unsecured term debt at par value (dollars in millions):

	U.S. medium term notes (“MTNs”) and domestic bonds	Euro MTNs (“EMTNs”)	Eurobonds	Total unsecured term debt4
Balance at March 31, 20071	$18,170	$20,501	$4,152	$42,823
Issuances during the three months ended June 30, 2007	4,2362	2,5033	-	6,739
Maturities and terminations during the three months ended June 30, 2007	(2,119)	(1,259)	(708)	(4,086)
Balance at June 30, 20071	$20,287	$21,745	$3,444	$45,476

Issuances during the one month ended July 31, 2007	$6772	$1763	$ -	$853

1 Amounts represent par values at issuance, and as such exclude unamortized premium/discount, foreign currency

transaction gains and losses on debt denominated in foreign currencies, fair value adjustments to debt in hedge

accounting relationships, and the unamortized fair value adjustments on the hedged item for terminated hedge

accounting relationships. Par values of non-U.S. currency denominated notes are determined using foreign exchange

rates applicable as of the issuance dates. Par values of zero coupon notes represent amounts to be paid at maturity.

2 MTNs and domestic bonds had terms to maturity ranging from approximately 1 year to 30 years, and had interest rates

at the time of issuance ranging from 5.0 percent to 10.0 percent.

3 EMTNs were issued in U.S. and non-U.S. currencies, had terms to maturity ranging from approximately 2 years to

20 years, and had interest rates at the time of issuance ranging from 0 percent to 6.6 percent.

4 Consists of fixed and floating rate debt. Upon the issuance of fixed rate debt, we generally elect to enter into pay-float

interest rate swaps. See “Derivative Instruments” of our Annual Report on Form 10-K for the year ended March 31, 2007

for a detailed description of our use of derivatives.

We maintain a shelf registration with the Securities and Exchange Commission (“SEC”) to provide for the issuance of debt securities in the U.S. capital markets to both retail and institutional investors. We qualify as a well-known seasoned issuer under SEC rules, and as a result, we may issue under our registration statement an unlimited amount of debt securities during the three year period ending March 2009. Our EMTN program provides for the issuance of debt securities in the international capital markets. In September 2006, the EMTN program was renewed for a one year period, and the maximum aggregate principal amount authorized to be outstanding at any time was increased from $20 billion to $30 billion, or the equivalent in other currencies, of which approximately $8 billion was available for issuance at July 31, 2007. Our EMTN program may be expanded from time to time to allow for the continued use of this source of funding. In addition, we may issue bonds in the international capital markets that are not issued under our U.S. or EMTN programs. Debt securities issued under the U.S. shelf registration statement are issued pursuant to the terms of an indenture, and EMTNs are issued pursuant to the terms of an agency agreement, both of which contain customary terms and conditions, including negative pledge and cross-default provisions.

- 75 - -

DERIVATIVE INSTRUMENTS

We enter into derivative instruments for risk management purposes. Our use of derivatives is limited to the management of interest rate and foreign exchange risks.

We categorize derivatives as those designated for hedge accounting (“hedge accounting derivatives”) and those that are not designated for hedge accounting (“non-hedge accounting derivatives”). Hedge accounting derivatives are comprised of pay-float interest rate swaps and cross currency interest rate swaps. Non-hedge accounting derivatives are comprised of pay-fixed interest rate swaps, de-designated pay-float interest rate swaps, pay-float interest rate swaps for which hedge accounting has not been elected, interest rate caps, and currency basis swaps. We discontinue the use of hedge accounting if a derivative is sold, terminated or exercised, or if our management determines that designating a derivative under hedge accounting is no longer appropriate (“de-designated derivatives”). De-designated derivatives are included within the category of non-hedge accounting derivatives. A detailed description of our accounting for derivative instruments is included in our Annual Report on Form 10-K for the year ended March 31, 2007 under “Derivative Instruments”.

One of our goals is to manage the interest rate risk arising from the differences in timing between the re-pricing of assets relative to liabilities. We use non-hedge accounting derivatives, specifically pay-fixed interest rate swaps and interest rate caps, to manage this exposure. The use of these non-hedge accounting derivatives to mitigate interest rate risk has historically resulted in significant volatility in the net result from non-hedge accounting. The combination of the changes in fair values of de-designated derivatives with those of non-hedge accounting derivatives has had the effect of reducing earnings volatility. Our management does not engage in de-designation with a view as to the favorable or unfavorable impact on the results of operations. De-designation has resulted in lower losses in the net result from non-hedge accounting in certain quarters and in lower gains in the net result from non-hedge accounting in other quarters. These decreases represent reductions in volatility in the net result from non-hedge accounting. We estimate that the impact of de-designation on the results of operations was a reduction in the volatility in net result from non-hedge accounting of approximately $78 million for the quarter ended June 30, 2007, and approximately $9 million for the quarter ended June 30, 2006. Our management evaluates the reduction of volatility on a quarterly basis only.

Derivative Assets and Liabilities

The following table summarizes our derivative assets and liabilities, which are included in other assets and other liabilities in the Consolidated Balance Sheet (dollars in millions):

	June 30, 2007	March 31, 2007
	As Previously Restated
Derivative assets	$1,691	$1,529
Less: Collateral held1	336	291
Derivative assets, net of collateral	$1,355	$1,238

Derivative liabilities	$203	$97

1	Represents cash received under reciprocal collateral arrangements that we have entered into with certain derivative counterparties as described in the “Counterparty Credit Risk” section below.

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Counterparty Credit Risk

We enter into reciprocal collateral arrangements with certain counterparties to mitigate our exposure to the credit risk associated with the respective counterparty. A valuation of our position with the respective counterparty is performed at least monthly. If the market value of our net derivatives position with the counterparty exceeds a specified threshold, the counterparty is required to transfer cash collateral in excess of the threshold to us. Conversely, if the market value of the counterparty's net derivatives position with us exceeds a specified threshold, we are required to transfer cash collateral in excess of the threshold to the counterparty. Our International Swaps and Derivatives Association (“ISDA”) Master Agreements with counterparties contain legal right of offset provisions, and therefore the collateral amounts are netted against derivative assets, which are included in other assets in the Consolidated Balance Sheet. At June 30 and March 31, 2007, we held a net $336 million and $291 million, respectively, in collateral from counterparties, which is included in cash and cash equivalents in our Consolidated Balance Sheet. We are not required to hold the collateral in a segregated account.

Counterparty credit risk of derivative instruments is represented by the net fair market value of derivative contracts at June 30, 2007, reduced by collateral. At June 30, 2007, substantially all of our derivative instruments were executed with commercial banks and investment banking firms assigned investment grade ratings of "A" or better by NRSROs. We have not experienced a counterparty default and have no reserves related to non-performance as of June 30, 2007. In addition, many of our ISDA Master Agreements with counterparties contain reciprocal ratings triggers providing either party with an option to terminate the agreement and related transactions at market value in the event of a ratings downgrade below a specified threshold.

A summary of our net counterparty credit exposure by credit rating as of June 30, 2007 and March 31, 2007 (net of collateral held) is presented below (dollars in millions):

	June 30, 2007	March 31, 2007
	As Previously Restated
Credit Rating
AAA	$223	$226
AA	1,010	944
A	122	68
Total net counterparty credit exposure	$1,355	$1,238

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The following table summarizes the composition of our derivatives portfolio (dollars in millions):

	Notionals:			Fair value of :
	Hedge accounting derivatives	Non-hedge accounting derivatives	Total notionals	Derivative assets	Derivative liabilities
	As Previously Restated
June 30, 2007
Pay-float swaps 1	$23,756	$14,264	$38,020	$1,323	($142)
Pay-fixed swaps	-	44,336	44,336	305	-
Interest rate caps	-	945	945	2	-
Counterparty netting	-	-	-	61	(61)
Total	$23,756	$59,545	$83,301	$1,691	($203)

March 31, 2007
Pay-float swaps 1	$21,036	$14,537	$35,573	$1,417	($112)
Pay-fixed swaps	-	42,126	42,126	121	-
Interest rate caps	-	945	945	6	-
Counterparty netting	-	-	-	(15)	15
Total	$21,036	$57,608	$78,644	$1,529	($97)

June 30, 2006
Pay-float swaps 1	$15,354	$15,526	$30,880	$1,045	($196)
Pay-fixed swaps	-	39,550	39,550	628	-
Interest rate caps	-	1,245	1,245	14	-
Counterparty netting	-	-	-	(20)	20
Total	$15,354	$56,321	$71,675	$1,667	($176)

1Includes cross-currency interest rate swaps and currency basis swaps.

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INTEREST EXPENSE

The following table summarizes the components of interest expense for the three months ended June 30, 2007 and 2006 (dollars in millions):

	June 30, 2007	June 30, 2006
	As Previously Restated
Interest expense on debt	$729	$552
Amortization of basis adjustments on debt	(14)	(18)
Net interest realized on hedge accounting derivatives	80	28
Amortization of debt issue costs	16	12
Ineffectiveness related to hedge accounting derivatives	(7)	7
Interest expense excluding non-hedge accounting results	804	581
Net result from non-hedge accounting	(131)	(97)
Total interest expense	$673	$484

The following table summarizes the components of the net result from non-hedge accounting, which is included in interest expense for the three months ended June 30, 2007 and 2006 (dollars in millions):

	June 30, 2007	June 30, 2006
	As Previously Restated
Currency basis swaps unrealized loss/(gain)	$2	($86)
Foreign currency transaction loss	4	86
Net interest realized on non-hedge accounting derivatives	(59)	(73)
Unrealized (gain)/loss on non-hedge accounting derivatives
Interest rate swaps	(90)	(20)
Interest rate caps	12	(4)
Net result from non-hedge accounting	($131)	($97)

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OFF-BALANCE SHEET ARRANGEMENTS

Securitization Funding

Securitization of receivables allows us to access a highly liquid and efficient capital market while providing us with an alternative source of funding and investor diversification. We began participating in the asset-backed securitization market in 1993. For further discussion of our funding strategy, refer to the “Liquidity and Capital Resources” section of this MD&A. As of March 31, 2008, TMCC does not have any outstanding securitizations.

Guarantees

TMCC has guaranteed the payments of principal and interest with respect to the bonds of manufacturing facilities of certain affiliates. TMCC receives an annual fee of $102,000 for guaranteeing such payments. The nature, business purpose, and amounts of these guarantees are described in Note 16 – Commitments and Contingencies of the Notes to Consolidated Financial Statements. Other than the fee discussed above, there are no corresponding expenses or cash flows arising from our guarantees, nor are any amounts recorded as liabilities on our Consolidated Balance Sheet.

Lending Commitments

We provide fixed and variable rate credit facilities to vehicle and industrial equipment dealers. These credit facilities are primarily used for business acquisitions, facilities refurbishment, real estate purchases, and working capital requirements. These loans are typically collateralized with liens on real estate, vehicle inventory, and/or other dealership assets, as appropriate. We obtain a personal guarantee from the vehicle or industrial equipment dealer or corporate guarantee from the dealership when deemed prudent. Although the loans are typically collateralized or guaranteed, the value of the underlying collateral or guarantees may not be sufficient to cover our exposure under such agreements. We price the credit facilities to reflect the credit risks assumed in entering into the credit facility and competitive factors. We also provide financing to various multi-franchise dealer organizations, referred to as dealer groups, often as part of a lending consortium, for wholesale, working capital, real estate, and business acquisitions. While the majority of these credit facilities and financing arrangements are secured, approximately 2 percent of the lending commitments at March 31, 2008 are unsecured. In addition to these lending commitments, we have also extended $9.2 billion and $8.1 billion of wholesale financing lines not considered to be contractual commitments at March 31, 2008 and 2007, respectively. We have also extended credit facilities to affiliates as described in Note 16 – Commitments and Contingencies of the Notes to Consolidated Financial Statements.

Indemnification

Refer to Note 16 – Commitments and Contingencies of the Notes to Consolidated Financial Statements for a detailed description of agreements containing indemnification provisions. We have not made any material payments in the past as a result of these provisions, and as of March 31, 2008, we determined that it is not probable that we will be required to make any material payments in the future. As of March 31, 2008 and 2007, no amounts have been recorded under these indemnifications.

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CONTRACTUAL OBLIGATIONS AND CREDIT-RELATED COMMITMENTS

We have certain obligations to make future payments under contracts and credit-related financial instruments and commitments. Aggregate contractual obligations and credit-related commitments in existence at March 31, 2008 are summarized as follows (dollars in millions):

	Payments due by period
Contractual Obligations	Total	Less than 1 year	1-3 years	3-5 years	More than 5 years
	As Previously Restated
Debt1	$68,266	$33,259	$22,223	$6,278	$6,506
Lending commitments2	5,615	5,615	-	-	-
Premises occupied under lease	108	22	34	21	31
Purchase obligations3	54	37	16	1	-
Total	$74,043	$38,933	$22,273	$6,300	$6,537

1 Debt includes the effects of fair market value changes and foreign currency transaction adjustments.

2 Lending commitments represent term loans and revolving lines of credit we extended to vehicle and industrial equipment

dealers and affiliates as described in the “Off-Balance Sheet Arrangements” section of this MD&A. Of the amount shown

above, $4.1 billion was outstanding as of March 31, 2008. The amount shown above excludes $9.2 billion of wholesale

financing lines not considered to be contractual commitments at March 31, 2008, of which $6.8 billion was outstanding at

March 31, 2008. The above lending commitments have various expiration dates.

3 Purchase obligations represent fixed or minimum payment obligations under our contracts. The amounts included herein

represent the minimum contractual obligations in certain situations; however, actual amounts incurred may be substantially higher depending on the particular circumstance, including in the case of information technology contracts, the amount of usage once we have implemented it. Contracts that do not specify fixed payments or provide for a minimum payment are not included. Certain contracts noted herein contain voluntary provisions under which the contract may be terminated for a specified fee, ranging up to $1 million, depending upon the contract.

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CAUTIONARY STATEMENT FOR PURPOSES OF THE “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Certain statements contained in this Form 10-K/A or incorporated by reference herein are “forward looking statements” within the meaning of the Securities Litigation Reform Act of 1995. These statements are based on current expectations and currently available information. However, since these statements are based on factors that involve risks and uncertainties, our performance and results may differ materially from those described or implied by such forward-looking statements. Words such as “believe,” “anticipate,” “expect,” “estimate,” “project,” “should,” “intend,” “will,” “may” or words or phrases of similar meaning are intended to identify forward looking statements. We caution that the forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause actual results to differ materially from those in the forward-looking statements, including, without limitation, the risk factors set forth in “Item 1A. Risk Factors”. We will not update the forward-looking statements to reflect actual results or changes in the factors affecting the forward-looking statements.

NEW ACCOUNTING STANDARDS

Refer to Note 3 – Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements.

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CRITICAL ACCOUNTING ESTIMATES

We have identified the estimates below as critical to our business operations and the understanding of our results of operations. The impact and any associated risks related to these estimates on business operations are discussed throughout the MD&A where such estimates affect reported and expected financial results. The evaluation of the factors used in determining each of our critical accounting estimates involves significant assumptions, complex analysis, and management judgment. Changes in the evaluation of these factors may significantly impact the consolidated financial statements. Different assumptions or changes in economic circumstances could result in additional changes to the determination of the allowance for credit losses, the determination of residual values, the valuation of our derivative instruments, and our results of operations and financial condition. Our other significant accounting policies are discussed in Note 3 – Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements.

Determination of the Allowance for Credit Losses

We maintain an allowance for credit losses to cover probable losses on our earning assets resulting from the failure of customers or dealers to make required payments. The level of credit losses is influenced primarily by two factors: frequency of occurrence and loss severity. These and other factors are further discussed in the “Credit Risk” section of this MD&A. For evaluation purposes, exposures to credit losses are segmented into the two primary categories of “consumer” and “dealer”. Our consumer portfolio is further segmented into retail finance receivables and lease earning assets, both of which are characterized by smaller contract balances and homogenous populations. Our dealer portfolio consists of loans related to dealer financing. The overall allowance is evaluated at least quarterly, considering a variety of assumptions and factors to determine whether reserves are considered adequate to cover probable losses. For further discussion of the accounting treatment of our allowance for credit losses, refer to Note 3 – Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements.

Nature of Estimates and Assumptions Required

The evaluation of the appropriateness of the allowance for credit losses and our exposure to credit losses involves estimates and requires significant judgment. The estimate of credit losses is based upon information available at the reporting date.

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Consumer Portfolio

The consumer portfolio is evaluated using methodologies such as roll rate analysis, credit risk grade/tier segmentation analysis, time series regression analysis, and vintage analysis. Various techniques are used including the segmenting of retail finance receivables and lease earning assets into pools, identifying risk characteristics, and reviewing historical delinquency and loss trends. Management also reviews and analyzes external factors including, but not limited to, changes in economic conditions, the used vehicle market, and consumer behavior. In addition, internal factors, such as asset growth, purchase quality mix, and contract term length, are also considered in the review. As discussed in the “Credit Risk” section of this MD&A, most of our credit losses are related to our consumer portfolio.

Dealer Portfolio

The dealer portfolio is evaluated by first segmenting dealer financing into loan-risk pools, which are determined based on the risk characteristics of the loan (i.e. secured, unsecured, syndicated, etc.). The dealer pools are then analyzed using an internally developed risk rating process or by reference to third party risk rating sources. In addition, field operations management is consulted each quarter to determine if any specific dealer loan is considered to be impaired. If any such loans are identified, allocated reserves are established, as appropriate, and the loan is removed from the loan-risk pool for separate monitoring.

Sensitivity Analysis

The assumptions used in evaluating our exposure to credit losses involve estimates and significant judgment. The expected loss severity and frequency of occurrence on the vehicle retail and lease portfolios represent two of the key assumptions involved in determining the allowance for credit losses. Holding other estimates constant, a 10 percent increase or decrease in either the estimated loss severity or the estimated frequency of occurrence on the vehicle retail and lease portfolios would have resulted in a change in the allowance for credit losses of $67 million as of March 31, 2008.

Determination of Residual Values

The determination of residual values on our lease portfolio involves estimating end of term market values of leased vehicles and industrial equipment. Establishing these estimates involves various assumptions, complex analysis, and significant judgment. Actual losses incurred at lease termination could be significantly different from expected losses. Substantially all of our residual value risk relates to our vehicle lease portfolio. For further discussion of the accounting treatment of residual values on our lease earning assets, refer to Note 3 – Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements.

Nature of Estimates and Assumptions Required

Residual values are estimated at lease inception by examining external industry data and our own experience. Factors considered in this evaluation include, but are not limited to, expected economic conditions, new vehicle pricing, new vehicle incentive programs, new vehicle sales, product attributes of popular vehicles, the mix of used vehicle supply, the level of current used vehicle values, and fuel prices. Our management periodically reviews the estimated end of term market values of leased vehicles to assess the appropriateness of its carrying values. To the extent the estimated end of term market value of a leased vehicle is lower than the residual value established at lease inception, the residual value of the leased vehicle is adjusted downward so that the carrying value at lease end will approximate the estimated end of term market value. Factors affecting the estimated end of term market value are similar to those considered in the evaluation of residual values at lease inception discussed above. These factors are evaluated in the context of their historical trends to anticipate potential changes in the relationship among those factors in the future. For operating leases, adjustments are made on a straight-line basis over the remaining terms of the leases and are included in depreciation on operating leases in the Consolidated Statement of Income. For direct finance leases, adjustments are made at the time of assessment and are recorded as a reduction of direct finance lease revenues which is included under our retail financing revenues in the Consolidated Statement of Income.

Sensitivity Analysis

Estimated return rates and end of term market values represent two of the key assumptions involved in determining the amount and timing of depreciation expense to be recorded in the Consolidated Statement of Income.

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The vehicle lease return rate represents the number of end of term leased vehicles returned to us for sale as a percentage of lease contracts that were originally scheduled to mature in the same period. When the market value of a leased vehicle at contract maturity is less than its contractual residual value (i.e., the price at which the lease customer may purchase the leased vehicle), there is a higher probability that the vehicle will be returned to us. In addition, a higher market supply of certain models of used vehicles generally results in a lower relative level of demand for those vehicles, resulting in a higher probability that the vehicle will be returned to us. A higher rate of vehicle returns exposes us to greater risk of loss at lease termination. At March 31, 2008, holding other estimates constant, if the return rate for our existing portfolio of leased vehicles were to increase by 1 percentage point from our present estimates, the effect would be to increase depreciation on these vehicles by approximately $12 million. This increase in depreciation would be charged to depreciation on operating leases in the Consolidated Statement of Income on a straight line basis over the remaining terms of the operating leases.

End of term market values determine the amount of loss severity at lease maturity. Loss severity is the extent to which the end of term market value of a leased vehicle is less than the estimated residual value. Although we employ a rigorous process to estimate end of term market values, we may incur losses to the extent the end of term market value of a leased vehicle is less than the estimated residual value. At March 31, 2008, holding other estimates constant, if end of term market values for returned units of leased vehicles were to decrease by 1 percent from our present estimates, the effect would be to increase depreciation on these vehicles by approximately $58 million. This increase in depreciation would be charged to depreciation on operating leases in the Consolidated Statement of Income on a straight line basis over the remaining terms of the operating leases.

Derivative Instruments

We manage our exposure to market risks such as interest rate and foreign exchange risks with derivative instruments. These instruments include interest rate swaps, currency swaps, and purchased interest rate caps. Our use of derivatives is limited to the management of interest rate and foreign exchange risks. For further discussion of the accounting treatment of our derivatives, refer to Note 3 – Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements.

Nature of Estimates and Assumptions Required

Management determines the application of derivatives accounting through the identification of hedging instruments, hedged items, and the nature of the risk being hedged, as well as the methodology used to assess the hedging instrument's effectiveness. The fair values of derivative assets and liabilities traded in the over-the-counter market are determined using quantitative models that require the use of multiple market inputs including interest rates, prices and indices to generate continuous yield or pricing curves and volatility factors, which are used to value the position. The predominance of market inputs are actively quoted and can be validated through external sources, including brokers, market transactions and third-party pricing services. Estimation risk is greater for derivative asset and liability positions that are either option-based or have longer maturity dates where observable market inputs are less readily available or are unobservable, in which case quantitative based extrapolations of rate, price or index scenarios are used in determining fair values.

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ITEM7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

MARKET RISK

We are exposed to various types of market risks as a result of our normal business activities. Market risk is the sensitivity of our income, market value, and capital to fluctuations in market variables such as foreign exchange rates, interest rates, and market prices.

We manage our exposure to certain market risks, in part through the use of derivative instruments. Refer to the “Derivative Instruments” section of the MD&A for further discussion of our use of derivative instruments.

Interest Rate Risk

Currently, our primary market risk exposure is interest rate risk. Interest rate risk results primarily from differences in the re-pricing characteristics of our assets and liabilities. When evaluating interest rate risk management strategies, we consider a variety of factors, including, but not limited to, management’s risk tolerance and market conditions. We use various analytical techniques (including the Value at Risk (“VaR”) methodology, gap analysis, and sensitivity analysis) to assess and manage interest rate risk.

The VaR model we use presents the potential loss in fair value for our portfolio from adverse changes in interest rates for a 30-day holding period within a 95 percent confidence interval using Monte Carlo simulation techniques. The VaR methodology is applied to our financial instruments and lease contracts. The methodology uses historical interest rate data to assess the potential future losses from changes in market interest rates while holding other market risks constant. The model assumes that loan prepayments do not depend on the level of interest rates. All options in the debt and derivatives portfolio are included in the VaR calculation, with the exception of options embedded in debt instruments which are offset by the use of interest rate swaps with options mirroring those embedded in the underlying debt. These matched positions are not included in the VaR calculation as the resulting net exposure is not material.

The VaR of our portfolio as of and for the years ended March 31, 2008 and 2007 measured as the potential 30 day loss in fair value from assumed adverse changes in interest rates are as follows (dollars in millions):

	March 31,
	2008	2007
Mean portfolio value	$12,198	$10,651
VaR	$77	$127
Percentage of the mean portfolio value	0.63%	1.19%
Confidence level	95.0%	95.0%

	Average for the Year Ended March 31,
	2008	2007
Mean portfolio value	$11,076	$10,285
VaR	$116	$138
Percentage of the mean portfolio value	1.05%	1.34%
Confidence level	95.0%	95.0%

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Our calculated VaR exposure represents an estimate of reasonably possible net losses that would be recognized on our portfolio of financial instruments assuming hypothetical movements in future market rates and is not necessarily indicative of actual results. Since actual future gains and losses will differ from those estimated, based upon actual fluctuations in market rates, operating exposures, and the timing thereof, as well as changes in the composition of our portfolio of financial instruments during the year, our calculated VaR exposure does not represent the maximum possible loss nor any expected loss. The decrease in VaR from March 31, 2007 to March 31, 2008 is consistent with a higher mix of fixed rate swaps in the Company’s portfolio which were executed to mitigate interest rate risk.

Equity Price Risk

We are also exposed to equity price risk related to equity investments included in our investment portfolio. These investments, classified as available for sale, consist primarily of passively managed mutual funds that are designed to track the performance of major equity market indices. Fair market values of the equity investments are primarily determined using quoted market prices.

A summary of the unrealized gains and losses on equity investments included in our other comprehensive income assuming a 10 percent and 20 percent adverse change in market prices is presented below (dollars in millions)1:

	March 31,
	2008	2007
Cost	$331	$523
Fair market value	$333	$600
Unrealized gain/(loss), net of tax	$1	$48
With estimated 10 percent adverse change, net of tax	($19)	$11
With estimated 20 percent adverse change, net of tax	($40)	($26)

1 Excludes private placement fixed income pooled trusts, which are included in the VaR model described under “Interest Rate

Risk”.

These hypothetical scenarios represent an estimate of reasonably possible net losses that may be recognized as a result of changes in the fair market value of our equity investments assuming hypothetical adverse movements in future market values. These scenarios are not necessarily indicative of actual results that may occur. Additionally, the hypothetical scenarios do not represent the maximum possible loss or any expected loss that may occur, since actual future gains and losses will differ from those estimated, based upon actual fluctuations in market prices.

Foreign Exchange Rate Risk

We issue debt in a variety of currencies. As a matter of policy, currency exposure related to foreign currency debt is hedged at issuance through the execution of cross currency interest rate swaps or a combination of interest rate swaps coupled with currency basis swaps. Therefore, we believe that the market risk exposure to changes in currency exchange rates on our debt issuances is not material.

We are also exposed to foreign exchange risk related to equity, fixed income pooled trusts, and bond investments included in the investment portfolio of our insurance operations. These investments consist primarily of international equity funds, international fixed income pooled trusts, and to a lesser extent, bond funds which are incorporated into the overall investment portfolio to provide broader diversification of the investment assets. Substantially all of the market risk exposure to changes in currency exchange rates relates to the investments in international equity funds and international fixed income pooled trusts. These international investments, and any related foreign exchange risk, are included in our market price risk analysis described above.

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COUNTERPARTY CREDIT RISK

We enter into reciprocal collateral arrangements with certain counterparties to mitigate our exposure to the credit risk associated with the respective counterparty. A valuation of our position with the respective counterparty is performed at least monthly. If the market value of our net derivatives position with the counterparty exceeds a specified threshold, the counterparty is required to transfer cash collateral in excess of the threshold to us. Conversely, if the market value of the counterparty's net derivatives position with us exceeds a specified threshold, we are required to transfer cash collateral in excess of the threshold to the counterparty. Our International Swaps and Derivatives Association (“ISDA”) Master Agreements with counterparties contain legal right of offset provisions, and therefore the collateral amounts are netted against derivative assets, which are included in other assets in the Consolidated Balance Sheet. At March 31, 2008 and 2007, we held a net $1.7 billion and $291 million, respectively, in collateral from counterparties, which is included in cash and cash equivalents in the Consolidated Balance Sheet. We are not required to hold the collateral in a segregated account.

Counterparty credit risk of derivative instruments is represented by the fair value of contracts with a positive fair value at March 31, 2008, reduced by the effects of master netting agreements and collateral. At March 31, 2008, substantially all of our derivative instruments were executed with commercial banks and investment banking firms assigned investment grade ratings of "A" or better by NRSROs. We have not experienced a counterparty default and do not currently anticipate non-performance by any of our counterparties, and as such have no reserves related to non-performance as of March 31, 2008. In addition, many of our ISDA Master Agreements with counterparties contain reciprocal ratings triggers providing either party with an option to terminate the agreement and related transactions at market in the event of a ratings downgrade below a specified threshold.

A summary of the net counterparty credit exposure by credit rating as of March 31, 2008 and 2007 (net of collateral held) is presented below (dollars in millions):

	March 31,
	2008	2007
	As Currently Restated	As Previously Restated
Credit Rating
AAA	$191	$226
AA	900	944
A	442	68
Total net counterparty credit exposure	$1,533	$1,238

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholder of

Toyota Motor Credit Corporation:

In our opinion, the accompanying consolidated balance sheet and the related consolidated statements of income, shareholder’s equity and cash flows present fairly, in all material respects, the financial position of Toyota Motor Credit Corporation and its subsidiaries at March 31, 2008 and 2007, and the results of their operations and their cash flows for each of the three years in the period ended March 31, 2008 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As discussed in Note 1 to the consolidated financial statements, the Company has restated its consolidated financial statements as of March 31, 2008 and 2007 and for each of the three years in the period ended March 31, 2008.

/S/ PRICEWATERHOUSECOOPERS LLP

Los Angeles, California

June 6, 2008, except for the effects of the

restatements described in Note 1 to the

consolidated financial statements, which

are as of July 30, 2008

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TOYOTA MOTOR CREDIT CORPORATION

CONSOLIDATED BALANCE SHEET

(Dollars in millions)

	March 31,
	2008	2007
	As Currently Restated	As Previously Restated
ASSETS

Cash and cash equivalents	$736	$1,329
Investments in marketable securities	1,948	1,465
Finance receivables, net	55,481	47,862
Investments in operating leases, net	18,656	16,493
Other assets	3,577	2,231
Total assets	$80,398	$69,380

LIABILITIES AND SHAREHOLDER'S EQUITY

Debt	$68,266	$58,596
Deferred income taxes	3,120	3,132
Other liabilities	4,232	2,621
Total liabilities	75,618	64,349

Commitments and contingencies (Note 16)

Shareholder's equity:
Capital stock, $10,000 par value (100,000 shares authorized; issued and outstanding 91,500 in 2008 and 2007)	915	915
Accumulated other comprehensive income	-	52
Retained earnings	3,865	4,064
Total shareholder's equity	4,780	5,031
Total liabilities and shareholder's equity	$80,398	$69,380

See Accompanying Notes to Consolidated Financial Statements.

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TOYOTA MOTOR CREDIT CORPORATION

CONSOLIDATED STATEMENT OF INCOME

(Dollars in millions)

	Fiscal Years Ended March 31,
	2008	2007	2006
	As Currently Restated	As Previously Restated	As Previously Restated
Financing revenues:
Operating lease	$4,433	$3,624	$2,726
Retail financing	3,112	2,539	2,053
Dealer financing	647	547	402
Total financing revenues	8,192	6,710	5,181

Depreciation on operating leases	3,299	2,673	2,027
Interest expense	4,151	2,662	1,561
Net financing revenues	742	1,375	1,593

Insurance earned premiums and contract revenues	385	334	288
Investment and other income	301	252	116
Net financing revenues and other revenues	1,428	1,961	1,997

Provision for credit losses	809	410	305
Expenses:
Operating and administrative	841	758	712
Insurance losses and loss adjustment expenses	158	126	115
Total provision for credit losses and expenses	1,808	1,294	1,132

(Loss) income before (benefit) provision for income taxes	(380)	667	865
(Benefit) provision for income taxes	(157)	233	321

Net (loss) income	($223)	$434	$544

See Accompanying Notes to Consolidated Financial Statements.

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TOYOTA MOTOR CREDIT CORPORATION

CONSOLIDATED STATEMENT OF SHAREHOLDER'S EQUITY

(Dollars in millions)

	Capital Stock	Accumulated Other Comprehensive Income	Retained Earnings	Total
BALANCE AT MARCH 31, 2005	$915	$46	$3,283	$4,244
Net income for the year ended March 31, 2006 (As Previously Restated)	-	-	544	544
Net unrealized gain on available-for-sale marketable securities, net of tax provision of $9 million	-	18	-	18
Reclassification adjustment for net gain included in net income, net of tax provision of $2 million	-	(4)	-	(4)
Total comprehensive income (As Previously Restated)	-	14	544	558

Advances to TFSA	-	-	(24)	(24)
Reclassification to re-establish receivable due from TFSA	-	-	96	96
Dividends	-	-	(115)	(115)
BALANCE AT MARCH 31, 2006 (As Previously Restated)	$915	$60	$3,784	$4,759

Net income for the year ended March 31, 2007 (As Previously Restated)	-	-	434	434
Net unrealized gain on available-for-sale marketable securities, net of tax provision of $4 million	-	10	-	10
Reclassification adjustment for net gain included in net income, net of tax provision of $10 million	-	(18)	-	(18)
Total comprehensive income (As Previously Restated)	-	(8)	434	426

Advances to TFSA	-	-	(24)	(24)
Dividends	-	-	(130)	(130)
BALANCE AT MARCH 31, 2007 (As Previously Restated)	$915	$52	$4,064	$5,031

Net loss for the year ended March 31, 2008 (As Currently Restated)	-	-	(223)	(223)
Net unrealized loss on available-for-sale marketable securities, net of tax benefit of $16 million	-	(27)	-	(27)
Reclassification adjustment for net gain included in net income, net of tax provision of $14 million	-	(25)	-	(25)
Total comprehensive loss (As Currently Restated)	-	(52)	(223)	(275)

Advances to TFSA	-	-	(3)	(3)
Reclassification to re-establish receivable due from TFSA (Note 17)	-	-	27	27
BALANCE AT MARCH 31, 2008 (As Currently Restated)	$915	$-	$3,865	$4,780

See Accompanying Notes to Consolidated Financial Statements.

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TOYOTA MOTOR CREDIT CORPORATION

CONSOLIDATED STATEMENT OF CASH FLOWS

(Dollars in millions)

	Fiscal Years Ended
	2008	2007	2006
	As Currently Restated	As Previously Restated	As Previously Restated
Cash flows from operating activities:
Net (loss) income	($223)	$434	$544
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Non-cash impact of hedging activities	952	119	(126)
Depreciation and amortization	3,957	3,263	2,484
Recognition of deferred income	(896)	(682)	(469)
Provision for credit losses	809	410	305
Gain from sale of marketable securities	(71)	(71)	(3)
(Increase) decrease in other assets	(365)	(353)	132
Increase (decrease) in amounts held under reciprocal collateral arrangements	1,365	40	(731)
Increase (decrease) in deferred income taxes	19	732	(188)
Increase in other liabilities	687	279	203
Net cash provided by operating activities	6,234	4,171	2,151

Cash flows from investing activities:
Purchase of investments in marketable securities	(1,813)	(1,363)	(1,632)
Disposition of investments in marketable securities	1,313	1,114	1,408
Acquisition of finance receivables	(26,466)	(22,490)	(19,848)
Collection of finance receivables	20,081	17,521	15,314
Net change in wholesale receivables	(1,853)	(1,220)	(207)
Acquisition of investments in operating leases	(8,655)	(8,548)	(7,809)
Disposals of investments in operating leases	3,394	2,431	2,362
Net change in revolving notes from affiliates	(409)	-	-
Advances to affiliate	(270)	-	-
Net cash used in investing activities	(14,678)	(12,555)	(10,412)

Cash flows from financing activities:
Proceeds from issuance of debt	21,914	16,286	13,328
Payments on debt	(15,159)	(9,882)	(6,601)
Net change in commercial paper	965	2,648	1,689
Net advances from TFSA (Note 17)	131	(24)	(24)
Dividends paid	-	(130)	(115)
Net cash provided by financing activities	7,851	8,898	8,277

(Decrease) increase in cash and cash equivalents	(593)	514	16

Cash and cash equivalents at the beginning of the period	1,329	815	799
Cash and cash equivalents at the end of the period	$736	$1,329	$815

See Accompanying Notes to Consolidated Financial Statements.

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – Restated Financial Results

We are restating our historical financial statements for the fiscal years ended March 31, 2008, 2007 and 2006 and the quarters in fiscal years ended March 31, 2008 and 2007 in this document. This annual report on Form 10-K/A reflects two restatements. The restatements arose from management’s determination that TMCC had made errors relating to non-cash items resulting in certain debt and derivative transactions denominated in foreign currencies not being recorded properly. We identified the error which led to the previous restatement subsequent to the filing on June 6, 2008 of our Form 10-K for the fiscal year ended March 31, 2008 during the process of implementing a new debt and derivative accounting system in an attempt to remedy an internal control deficiency we had previously identified. That error is described below under “Previous Restatement.” We identified the error which led to the current restatement during the preparation of our Form 10-Q footnote disclosures for the quarter ended June 30, 2008 subsequent to the filing of our previous restatement on Form 10-K/A. The error which led to the current restatement occurred in a different process than the error identified in the previous restatement reflected in the Form 10-K/A filed on July 21, 2008. The previous error related to the summation of amounts to determine the market value of debt whereas this error was isolated to the recording of the market values of certain derivatives. The error which led to the current restatement is described below under “Current Restatement.”

Current Restatement

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Previous Restatement

The previous restatement also included the impact of certain other errors relating to the accounting for debt and derivative transactions. These errors, which were previously determined to be not material to any previously issued financial statements, had been identified and corrected on a cumulative basis during the fiscal years ended March 31, 2008, 2007, and 2006. As part of the restatement of our consolidated financial statements, we have reversed these cumulative adjustments and have instead recorded the correction of these errors in the periods to which the errors relate. In order to correct the errors noted above, we previously restated our consolidated financial statements for the years ended March 31, 2008, 2007 and 2006 and the quarters in fiscal years ended March 31, 2008 and 2007 as reported in a Form 10-K/A filed on July 21, 2008. The impact of reversing the previously recorded cumulative adjustments and recording the correction in the periods to which they related increased our net loss by $8 million for the fiscal year ended March 31, 2008, increased our net income by $13 million for the fiscal year ended March 31, 2007, and decreased our net income by $4 million for the fiscal year ended March 31, 2006.

For the impact of the current and previous restatements on the quarterly financial information, refer to Note 19 – Quarterly Financial Data (Unaudited). In addition, certain disclosures in the following notes have been restated consistent with the financial statements.

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – Restated Financial Results (Continued)

The following tables set forth the effects of the current as well as the previous restatement adjustments on the affected line items within our previously reported Consolidated Balance Sheet as of March 31, 2008 and 2007, and Consolidated Statements of Income and of Shareholder’s Equity for the fiscal years ended March 31, 2008, 2007 and 2006. Because the errors corrected in the restatements were non-cash in nature, they had no impact on our total net cash provided by operating activities in the consolidated statement of cash flows.

CONSOLIDATED BALANCE SHEET (Dollars in millions)

	March 31, 2008			March 31, 2007
	As Originally Reported	As Previously Restated	As Currently Restated	As Originally Reported	As Previously Restated
ASSETS
Other assets	$3,600	$3,599	$3,577	$2,219	$2,231
Total assets	$80,421	$80,420	$80,398	$69,368	$69,380

TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY
Debt	$68,066	$68,266	$68,266	$58,529	$58,596
Deferred income taxes	$3,216	$3,138	$3,120	$3,153	$3,132
Other liabilities	$4,209	$4,209	$4,232	$2,621	$2,621
Total liabilities	$75,491	$75,613	$75,618	$64,303	$64,349
Retained earnings	$4,015	$3,892	$3,865	$4,098	$4,064
Total shareholder's equity	$4,930	$4,807	$4,780	$5,065	$5,031
Total liabilities and shareholder's equity	$80,421	$80,420	$80,398	$69,368	$69,380

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – Restated Financial Results (Continued)

CONSOLIDATED STATEMENTS OF INCOME (Dollars in millions)

	2008			2007		2006
	As Originally Reported	As Previously Restated	As Currently Restated	As Originally Reported	As Previously Restated	As Originally Reported	As Previously Restated
Interest expense	$3,960	$4,106	$4,151	$2,666	$2,662	$1,502	$1,561
Net financing revenues	$933	$787	$742	$1,371	$1,375	$1,652	$1,593
Net financing revenues and other revenues	$1,619	$1,473	$1,428	$1,957	$1,961	$2,056	$1,997
(Loss) income before (benefit) provision for income taxes	($189)	($335)	($380)	$663	$667	$924	$865
(Benefit) provision for income taxes	($82)	($139)	($157)	$231	$233	$344	$321
Net (loss) income	($107)	($196)	($223)	$432	$434	$580	$544

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – Restated Financial Results (Continued)

CONSOLIDATED STATEMENT OF SHAREHOLDER'S EQUITY (Dollars in millions)

	As Originally Reported	Previous Adjustment	As Previously Restated	Current Adjustment	As Currently Restated
Net income for the year ended March 31, 2006	$580	($36)	$544	-	$544
Total comprehensive income	$594	($36)	$558	-	$558
BALANCE AT MARCH 31, 2006	$4,795	($36)	$4,759	-	$4,759

Net income for the year ended March 31, 2007	$432	$2	$434	-	$434
Total comprehensive income	$424	$2	$426	-	$426
BALANCE AT MARCH 31, 2007	$5,065	($34)	$5,031	-	$5,031

Net loss for the year ended March 31, 2008	($107)	($89)	($196)	($27)	($223)
Total comprehensive loss	($159)	($89)	($248)	($27)	($275)
BALANCE AT MARCH 31, 2008	$4,930	($123)	$4,807	($27)	$4,780

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – Restated Financial Results (Continued)

CONSOLIDATED STATEMENT OF CASH FLOWS (Dollars in millions)

	2008			2007		2006
	As Originally Reported	As Previously Restated	As Currently Restated	As Originally Reported	As Previously Restated	As Originally Reported	As Previously Restated
Cash flows from operating activities:
Net (loss) income	($107)	($196)	($223)	$432	$434	$580	$544
Non-cash impact of hedging activities	$774	$907	$952	$111	$119	($185)	($126)
(Increase) decrease in other assets	($378)	($365)	($365)	($341)	($353)	$132	$132
Increase (decrease) in deferred income taxes	$94	$37	$19	$730	$732	($165)	($188)
Increase in other liabilities	$687	$687	$687	$279	$279	$203	$203
Net cash provided by operating activities	$6,234	$6,234	$6,234	$4,171	$4,171	$2,151	$2,151
Cash flows from financing activities:
Proceeds from issuance of debt	$21,914	$21,914	$21,914	$16,286	$16,286	$13,328	$13,328
Payments on debt	($15,159)	($15,159)	($15,159)	($9,882)	($9,882)	($6,601)	($6,601)
Net cash provided by financing activities	$7,851	$7,851	$7,851	$8,898	$8,898	$8,277	$8,277

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2 – Nature of Operations

·	Finance - We provide a broad range of finance products including retail financing, leasing, and dealer financing to vehicle and industrial equipment dealers and their customers.

Insurance - Through Toyota Motor Insurance Services, Inc. (“TMIS”), a wholly-owned subsidiary, we provide marketing, underwriting, and claims administration related to covering certain risks of vehicle dealers and their customers. We also provide coverage and related administrative services to our affiliates.

Our primary finance and insurance operations are located in the U.S. and Puerto Rico with earning assets principally sourced through Toyota and Lexus vehicle dealers. As of March 31, 2008, approximately 22 percent of managed vehicle retail and lease assets were located in California, 10 percent in Texas, 7 percent in New York, and 6 percent in New Jersey.

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 3 – Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Principles of Consolidation

The consolidated financial statements include the accounts of TMCC and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated.

Cash and Cash Equivalents

Cash equivalents, consisting primarily of money market instruments and debt securities, represent highly liquid investments with original maturities of three months or less.

Investments in Marketable Securities

Investments in marketable securities consist of fixed income and equity securities. Fixed income and equity securities are designated as available-for-sale and carried at fair value using quoted market prices where available with unrealized gains or losses included in accumulated other comprehensive income, net of applicable taxes. We use the specific identification method to determine realized gains and losses related to our investment portfolio. Realized investment gains and losses are reflected in investment and other income in the Consolidated Statement of Income. Premiums and discounts on investments are amortized to investment income using the effective interest method.

We utilize a systematic process to evaluate whether unrealized losses related to investments in fixed income and equity securities are temporary in nature. Factors considered in determining whether a loss is other-than-temporary include the length of time and extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, and our intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in fair value. If losses are considered to be other-than-temporary, the cost basis of the security is written down to fair value and the write down is reflected in investment and other income in the Consolidated Statement of Income.

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 3 – Summary of Significant Accounting Policies (Continued)

Retail Receivables and Dealer Financing

Revenues associated with retail receivables and dealer financing are recognized so as to approximate a level rate of return over the contract term. Incremental direct costs incurred in connection with the acquisition of retail receivables and dealer financing, including incentive and rate participation payments made to vehicle dealers, are capitalized and amortized so as to approximate a level rate of return over the term of the related contracts. Retail receivables are reported at their outstanding balance, including accrued interest and incremental direct costs, net of unearned income.

Unearned income includes deferred income on affiliate sponsored special rate program (“subvention”) payments received from affiliates.

Direct Finance Leases

At lease inception, we record the aggregate future minimum lease payments, contractual residual value of the leased vehicle, and unearned income. Unearned income includes deferred subvention payments received from affiliates. Revenue is recognized over the lease term so as to approximate a level rate of return on the outstanding net investment. Incremental direct costs and fees paid or received in connection with the acquisition of direct finance leases, including incentive and rate participation payments made to vehicle dealers and acquisition fees collected from customers, are capitalized and amortized so as to approximate a level rate of return over the term of the related contracts.

Investments in Operating Leases

Investments in operating leases are recorded at cost and depreciated on a straight-line basis over the lease term to the estimated residual value. Operating lease revenue is recorded to income on a straight-line basis over the term of the lease. Incremental direct costs and fees paid or received in connection with the acquisition of vehicle leases, including incentive and rate participation payments made to vehicle dealers and acquisition fees collected from customers, are capitalized and amortized on a straight-line basis over the term of the related contracts. Investments in operating leases are recorded net of deferred subvention payments received from affiliates and deferred acquisition fees collected from customers. Operating lease revenue is recorded net of sales taxes collected from customers.

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 3 – Summary of Significant Accounting Policies (Continued)

Determination of Residual Values

Substantially all of our residual value risk relates to our vehicle lease portfolio. Residual values of lease earning assets are estimated at lease inception by examining external industry data and our own experience. Factors considered in this evaluation include, but are not limited to, expected economic conditions, new vehicle pricing, new vehicle incentive programs, new vehicle sales, product attributes of popular vehicles, the mix of used vehicle supply, the level of current used vehicle values, and fuel prices. Our management periodically reviews the estimated end of term market values of leased vehicles to assess the appropriateness of its carrying values. To the extent the estimated end of term market value of a leased vehicle is lower than the residual value established at lease inception, the residual value of the leased vehicle is adjusted downward so that the carrying value at lease end will approximate the estimated end of term market value. Factors affecting the estimated end of term market value are similar to those considered in the evaluation of residual values at lease inception discussed above. These factors are evaluated in the context of their historical trends to anticipate potential changes in the relationship among those factors in the future. For operating leases, adjustments are made on a straight-line basis over the remaining terms of the leases and are included in depreciation on operating leases in the Consolidated Statement of Income. For direct finance leases, adjustments are made at the time of assessment and are recorded as a reduction of direct finance lease revenues which is included under our retail financing revenues in the Consolidated Statement of Income.

We periodically evaluate the carrying value of operating leases for impairment. If the expected undiscounted future cash flows over the remaining lease terms are less than book value, the operating lease assets are considered to be impaired and a loss is recorded in the current period Consolidated Statement of Income. We use various channels to sell vehicles returned at lease end. We do not re-lease returned vehicles.

Allowance for Credit Losses

We maintain an allowance for credit losses to cover probable losses on our earning assets resulting from the failure of customers or dealers to make required payments. Management evaluates the allowance at least quarterly, considering a variety of factors and assumptions to determine whether the allowance is considered adequate to cover probable losses. The allowance for credit losses is management’s best estimate of the amount of probable credit losses in our existing portfolio.

Increases to the allowance for credit losses are accompanied by corresponding charges to the provision for credit losses. Except where applicable law requires otherwise, account balances are charged off when payments due are no longer expected to be received or the account is 150 days contractually delinquent, whichever occurs first. Related collateral, if recoverable, is repossessed and sold. Any shortfalls between proceeds received from the sale of repossessed collateral and the amounts due from customers are charged against the allowance. The allowance related to our earning assets is included in finance receivables, net and investment in operating leases, net in the Consolidated Balance Sheet. The related provision expense is included in the provision for credit losses in the Consolidated Statement of Income. Charge-offs are presented net of amounts recovered on previously charged off accounts.

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 3 – Summary of Significant Accounting Policies (Continued)

Derivative Instruments

We review the effectiveness of our hedging relationships quarterly to determine whether the relationships have been and continue to be effective. We use regression analysis to assess the effectiveness of our hedges. When we determine that a hedging relationship is not or has not been effective, hedge accounting is no longer applied. If hedge accounting is discontinued, we continue to carry the derivative instrument as a component of other assets or other liabilities in the Consolidated Balance Sheet at fair value with changes in fair value reported in interest expense in the Consolidated Statement of Income. Additionally, for discontinued fair value hedges, we cease to adjust the hedged item for changes in fair value and amortize the cumulative fair value adjustments recognized in prior periods over the remaining term of the debt.

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 3 – Summary of Significant Accounting Policies (Continued)

Foreign Currency Transactions

Certain transactions we have entered into, primarily related to debt, are denominated in foreign currencies. During periods when the debt and the related derivatives do not qualify for hedge accounting, the debt is translated into U.S. dollars using the applicable exchange rate at the transaction date and retranslated at each balance sheet date using the exchange rate in effect at that date. Gains and losses related to foreign currency transactions, primarily debt, are included in interest expense in the Consolidated Statement of Income.

Insurance Earned Premiums and Contract Revenues

Revenues from providing coverage under various contractual agreements are recognized over the term of the coverage in relation to the timing and level of anticipated claims and administrative expenses. Revenues from insurance premiums, net of premiums ceded to reinsurers, are earned over the terms of the respective policies in proportion to the estimated loss development. Management relies on historical loss experience as a basis for establishing earnings factors used to recognize revenue over the term of the contract or policy.

The portion of premiums and contract revenues written applicable to the unexpired terms of the policies is recorded as unearned premiums or unearned contract revenue. Policies and contracts sold are usually in force from 3 to 84 months. Certain costs of acquiring new business, consisting primarily of commissions and premium taxes, are deferred and amortized over the term of the related policies on the same basis as revenues are earned.

Commissions and fees from services provided are recognized over the term of the coverage in relation to the timing of services performed. The effect of subsequent cancellations is recorded as an offset to unearned insurance premiums and unearned contract revenues.

Insurance Losses and Loss Adjustment Expenses

Insurance losses and loss adjustment expenses include amounts paid and accrued for loss events that are known and have been recorded as claims, estimates of losses incurred but not reported that are based on actuarial estimates and historical loss development patterns, and loss adjustment expenses that are expected to be incurred in connection with settling and paying these claims.

Accruals for unpaid losses, losses incurred but not reported, and loss adjustment expenses are included in other liabilities in the Consolidated Balance Sheet. Estimated liabilities are reviewed regularly and we recognize any differences in the periods they are determined. If anticipated losses, loss adjustment expenses, unamortized acquisition costs, and maintenance costs exceed the recorded unearned premium, a premium deficiency is recognized by first charging any unamortized acquisition costs to expense and then by recording a liability for any excess deficiency.

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 3 – Summary of Significant Accounting Policies (Continued)

Reinsurance

On certain covered risks, we purchase on an annual basis reinsurance to protect us against the impact of large, irregularly occurring losses. Reinsurance reduces the magnitude of sudden unpredictable changes in net income. The amounts recoverable from reinsurers are estimated in a manner consistent with the reinsurance policy and include recoverable amounts for paid and unpaid losses. Amounts recoverable from reinsurers on unpaid losses, including incurred but not reported losses, and amounts paid to reinsurers relating to the unexpired portion of reinsurance contracts are included in other assets in the Consolidated Balance Sheet. Ceded insurance-related expenses are recorded as a reduction to insurance losses and loss adjustment expenses in the Consolidated Statement of Income. Amounts recoverable from reinsurers are recorded as a receivable but are not collectible until the losses are paid.

Income Taxes

We use the liability method of accounting for income taxes under which deferred tax assets and liabilities are adjusted to reflect changes in tax rates and laws in the period such changes are enacted resulting in adjustments to the current fiscal year’s provision for income taxes.

TMCC files a consolidated federal income tax return with its subsidiaries and TFSA. TMCC files either separate or consolidated/combined state income tax returns with Toyota Motor North America (“TMA”), TFSA, or subsidiaries of TMCC. State income tax expense is generally recognized as if TMCC and its subsidiaries filed their tax returns on a stand-alone basis. In those states where TMCC and its subsidiaries join in the filing of consolidated or combined income tax returns, TMCC and its subsidiaries are allocated their share of the total income tax expense based on combined allocation/apportionment factors and separate company income or loss. Based on the state tax sharing agreement with TMA, TMCC and its subsidiaries pay for their share of the combined income tax expense and are reimbursed for the benefit of any of their tax losses utilized in the combined state income tax returns.

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 3 – Summary of Significant Accounting Policies (Continued)

New Accounting Standards

In March 2008, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 161, “Disclosures about Derivative Instruments and Hedging Activities – an amendment of FASB Statement No. 133” (“SFAS 161”), which modifies and expands the disclosure requirements for derivative instruments and hedging activities. SFAS 161 requires that objectives for using derivative instruments be disclosed in terms of underlying risk and accounting designation and requires quantitative disclosures about fair value amounts and gains and losses on derivative instruments. It also requires disclosures about credit-related contingent features in derivative agreements. SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. SFAS 161 encourages, but does not require, comparative disclosures for earlier periods at initial adoption. The adoption of SFAS 161 is not expected to have a material impact on our consolidated financial condition or results of operations.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements” (“SFAS 160”), which requires all entities to report noncontrolling interest in subsidiaries as equity in the Consolidated Financial Statements and to account for transactions between an entity and noncontrolling owners as equity transactions if the parent retains its controlling interest in the subsidiary. SFAS 160 requires expanded disclosures that distinguish between the interests of the controlling owners and the interests of the noncontrolling owners of a subsidiary. SFAS 160 is effective for TMCC financial statements for the year beginning on January 1, 2009, and early adoption is not permitted. The adoption of SFAS 160 is not expected to have a material impact on our consolidated financial condition or results of operations.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations” (“SFAS 141R”), which modifies the accounting for business combinations. The accounting standard requires, with little exceptions, the acquirer in a business combination to recognize 100 percent of the assets acquired, liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition-date fair value. SFAS 141R is effective for new acquisitions consummated on or after January 1, 2009, and early adoption is not permitted. The adoption of SFAS 141R is not expected to have a material impact on our consolidated financial condition or results of operations.

In November 2007, the SEC issued Staff Accounting Bulletin No. 109, “Written Loan Commitments Recorded at Fair Value through Earnings” (“SAB 109”), which provides the SEC Staff’s views on accounting for written loan commitments recorded at fair value under US GAAP. SAB 109 requires that that the expected net future cash flows related to the associated servicing of the loan should be included in the measurement of all written loan commitments that are accounted for at fair value through earnings.

SAB 109 was adopted by TMCC on January 1, 2008. The adoption of SAB 109 did not have a material impact on our consolidated financial condition or results of operations.

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 3 – Summary of Significant Accounting Policies (Continued)

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities – Including an Amendment of FASB Statement No. 115” (“SFAS 159”), which is effective for us as of April 1, 2008, with earlier adoption permitted. This standard provides an option to irrevocably elect fair value as an alternative measurement for selected financial assets, financial liabilities, unrecognized firm commitments, and written loan commitments. SFAS 159 is effective for TMCC as of April 1, 2008. The impact of SFAS 159 is not expected to have a material impact on our consolidated financial condition or results of operations as TMCC has not elected the fair value option for its financial assets and financial liabilities.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”), which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The standard provides a consistent definition of fair value which focuses on exit price and prioritizes, within a measurement of fair value, the use of market-based inputs over specific entity inputs. The standard establishes a three level hierarchy for fair value measurements based on the transparency of inputs to the valuation of an asset or liability as of the measurement date. SFAS 157 is effective for TMCC as of April 1, 2008. The adoption of SFAS 157 is not expected to have a material impact on our consolidated financial condition or results of operations.

In February 2008, the FASB issued FASB Staff Position (“FSP”) FAS 157-1, “Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement 13” (“FSP FAS 157-1”). FSP FAS 157-1 states that SFAS 157 does not apply under SFAS No. 13, “Accounting for Leases,” and its related interpretative accounting pronouncements that address leasing transactions. FSP FAS 157-1 is effective upon the initial adoption of SFAS 157 by TMCC, which is April 1, 2008. The adoption of FSP FAS 157-1 is not expected to have a material impact on our consolidated financial condition or results of operations.

In February 2008, the FASB issued FSP FAS 157-2, “Effective Date of FASB Statement No. 157,” (“FSP FAS 157-2”), which defers the effective date of SFAS 157 for one year for certain nonfinancial assets and nonfinancial liabilities. FSP FAS 157-2 is effective upon the initial adoption of SFAS 157 by TMCC, which is April 1, 2008. The adoption of FSP FAS 157-2 is not expected to have a material impact on our consolidated financial condition or results of operations.

In July 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109” (“FIN 48”), which clarifies the accounting for uncertainty in tax positions. This interpretation requires that we recognize in our financial statements, the impact of a tax position, if that position is more likely than not to be sustained on audit, based on the technical merits of the position. FIN 48 was effective for TMCC as of April 1, 2007. The adoption of FIN 48 did not have a material impact on our consolidated financial statements. For additional information on income taxes, refer to Note 15 – Income Taxes.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation.

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 4 – Investments in Marketable Securities

The amortized cost and estimated fair value of investments in marketable securities and related unrealized gains and losses are as follows (dollars in millions):

	March 31, 2008
	Cost	Fair Value2	Unrealized Gains	Unrealized Losses
Available-for-sale securities:
Asset-backed securities	$576	$567	$1	($10)
Mortgage-backed securities	284	278	3	(9)
U.S. Treasury and government agency debt securities	89	92	3	-
Municipal debt securities	3	3	-	-
Corporate debt securities	135	128	2	(9)
Equity securities1	861	880	29	(10)
Total marketable securities	$1,948	$1,948	$38	($38)

	March 31, 2007
	Cost	Fair Value	Unrealized Gains	Unrealized Losses
Available-for-sale securities:
Subordinated securities	$9	$9	$-	$-
Interest-only strips	-	1	1	-
Asset-backed securities	28	28	-	-
Mortgage-backed securities	151	152	1	-
U.S. Treasury and government agency debt securities	53	53	-	-
Corporate debt securities	128	130	2	-
Equity securities1	1,014	1,092	82	(4)
Total marketable securities	$1,383	$1,465	$86	($4)

1 The balance at March 31, 2008 includes private placement fixed income pooled trusts which had a cost of $530 million and fair

market value of $547 million. The balance at March 31, 2007 includes private placement fixed income pooled trusts which had

a cost of $491 million and fair market value of $492 million.

2 The balance at March 31, 2008 includes $35 million of securities with subprime exposure.

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 4 – Investments in Marketable Securities (Continued)

At March 31, 2008, the total gross unrealized loss and fair value of investments that have been in a continuous unrealized loss position for 12 consecutive months or more was $3 million and $24 million, respectively. These investments are comprised of corporate debt securities, asset-backed securities and mortgage-backed securities. We evaluated investment securities with fair values less than amortized cost and have determined that the decline in value is temporary and is primarily related to the change in market rates since purchase or to other market anomalies that are expected to correct themselves over time. These securities are predominately all investment grade. We have the ability to hold these securities for a period of time sufficient to recover all gross unrealized losses. Accordingly, we have not recognized any other-than-temporary-impairment for these securities.

At March 31, 2007, there were no marketable securities in our available-for-sale portfolio with material unrealized losses that have been in an unrealized loss position for more than a year.

Proceeds from sales and realized gains and losses on sales from available-for-sale securities are presented below (dollars in millions).

	Years Ended March 31,
	2008	2007	2006
Available-for-sale securities1:
Proceeds from sales	$1,237	$936	$1,282
Realized gains on sales	$80	$82	$13
Realized losses on sales2	$9	$10	$8

1 Cash flows related to interests retained in securitization transactions are discussed in Note 8 – Sale of Receivables.

2 Realized losses incurred in fiscal 2008, 2007, and 2006 include $5 million, $6 million and $3 million, respectively, in

impairment losses.

The contractual maturities of investments in marketable securities at March 31, 2008 are summarized in the following table (dollars in millions). Prepayments may cause actual maturities to differ from scheduled maturities.

Available-for-Sale Securities:	Cost	Fair Value
Within one year	$139	$138
After one year through five years	444	441
After five years through ten years	156	155
After ten years	348	334
Equity securities	861	880
Total	$1,948	$1,948

In accordance with statutory requirements, we had on deposit with state insurance authorities U.S. debt securities with amortized cost of $5 million and fair value of $6 million at March 31, 2008 and amortized cost and fair market value of $5 million at March 31, 2007.

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 5 – Finance Receivables, Net

Finance receivables, net consisted of the following (dollars in millions):

	March 31,
	2008	2007
Retail receivables1	$44,382	$39,563
Dealer financing	11,768	8,868
	56,150	48,431
Deferred origination costs	747	684
Unearned income	(767)	(760)
Allowance for credit losses	(649)	(493)
Finance receivables, net	$55,481	$47,862

1 Includes direct finance lease receivables.

Contractual maturities on retail receivables and dealer financing are as follows (dollars in millions):

	Contractual Maturities
Years Ending March 31,	Retail receivables1	Dealer financing
2009	$12,047	$9,394
2010	11,019	682
2011	9,324	452
2012	6,858	356
2013	3,705	480
Thereafter	1,305	404
Total	$44,258	$11,768

1 Includes direct finance lease receivables. Excludes $124 million of estimated unguaranteed residual values related to direct finance leases.

A significant portion of our finance receivables has historically been repaid prior to contractual maturity dates; contractual maturities as shown above should not be considered as necessarily indicative of future cash collections.

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 6 – Investments in Operating Leases, Net

Investments in operating leases, net consisted of the following (dollars in millions):

	March 31,
	2008	2007
Vehicles	$23,781	$20,448
Equipment and other	919	844
	24,700	21,292
Deferred origination fees	(64)	(47)
Deferred income	(417)	(404)
Accumulated depreciation	(5,483)	(4,287)
Allowance for credit losses	(80)	(61)
Investments in operating leases, net	$18,656	$16,493

Future minimum lease rentals on operating leases are as follows (dollars in millions):

Years Ending March 31,	Future Minimum Rentals on Operating Leases
2009	$3,639
2010	2,503
2011	1,200
2012	310
2013	50
Thereafter	-
Total	$7,702

A significant portion of our operating lease contracts has historically been terminated prior to maturity; future minimum rentals as shown above should not be considered as necessarily indicative of future cash collections.

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 7 – Allowance for Credit Losses

The following tables provide information related to our allowance for credit losses and aggregate balances 60 or more days past due on finance receivables and investments in operating leases (dollars in millions):

	Years Ended March 31,
	2008	2007	2006
Allowance for credit losses at beginning of period	$554	$530	$503
Provision for credit losses	809	410	305
Charge-offs, net of recoveries1	(634)	(386)	(278)
Allowance for credit losses at end of period	$729	$554	$530

1 Net of recoveries of $84 million, $82 million, and $79 million in fiscal 2008, 2007 and 2006, respectively.

	Years Ended March 31,
	2008	2007	2006
Aggregate balances 60 or more days past due2
Finance receivables3	$365	$258	$198
Operating leases3	77	39	38
Total	$442	$297	$236

2 Substantially all retail, direct finance lease, and operating lease receivables do not involve recourse to the dealer in the event of customer

default.

3 Includes accounts in bankruptcy and excludes accounts for which vehicles have been repossessed.

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 8 – Sale of Receivables

We retained servicing rights and earned a contractual servicing fee of 1 percent per annum on the total monthly outstanding principal balance of our securitized retail receivables. In a subordinated capacity, we retained interest-only strips and subordinated securities in these securitizations. The retained interests were held as restricted assets. Investors in the securitizations had no recourse to us beyond our retained subordinated interests, any cash reserve funds, and any amounts drawn on revolving liquidity notes. Our exposure to these retained interests existed until the associated securities were paid in full. As of March 31, 2008, TMCC does not have any outstanding retained interest or securitizations.

Cash Flows from Securitizations

No securitizations were executed during fiscal 2008, 2007 and 2006. The following table summarizes certain cash flows received from, and paid to, the retail securitization trusts outstanding during fiscal 2008, 2007, and 2006 (dollars in millions).

	Years Ended March 31,
	2008	2007	2006
Cash flow information:
Servicing fees received	$1	$4	$13
Excess interest received from interest only strips	$3	$10	$30
Repurchases of receivables1	($41)	$-	($442)
Servicing advances	($1)	($2)	($4)
Reimbursement of servicing advances	$1	$2	$7

1 Balance represents optional clean-up calls. We exercised our right to repurchase finance receivables from securitization trusts

as provided for in the terms of our securitization agreements.

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 8 – Sale of Receivables (Continued)

Managed Receivables

Outstanding balances, delinquency amounts and net credit losses for managed receivables, which include both owned and securitized receivables, are summarized as follows (dollars in millions):

	March 31,
	2008	2007
Retail finance receivables managed1	$44,360	$39,650
Dealer financing managed	11,770	8,869
Total finance receivables managed	56,130	48,519

Less:
Securitized retail finance receivables	-	164
Allowance for credit losses	649	493
Total finance receivables owned	$55,481	$47,862

1 Includes $483 million and $715 million of direct finance leases managed at March 31, 2008 and 2007, respectively.

	Amount 60 Days or More Past Due		Credit Losses Net of Recoveries
	March 31,		March 31,
	2008	2007	2008	2007
Retail finance receivables managed	$3651	$2561	$5652	$3452
Dealer financing managed	-	2	-	-
Total finance receivables managed	$365	$258	$565	$345

1 Includes $12 million and $6 million of 60 days or more past due amounts for direct finance leases managed at March 31, 2008

and 2007, respectively.

2 Includes $6 million and $10 million of credit losses net of recoveries for direct finance leases managed at March 31, 2008 and

2007, respectively.

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 9 – Interest Expense and Derivatives and Hedging Activities

The following table summarizes the components of interest expense (dollars in millions):

	Years ended March 31,
	2008	2007	2006
	As Currently Restated	As Previously Restated	As Previously Restated
Interest expense on debt	$3,000	$2,561	$1,792
Amortization of basis adjustments on debt	(32)	(72)	(128)
Unrealized gain from hedge accounting derivatives	33	(78)	(60)
Net interest realized on hedge accounting derivatives	246	278	112
Amortization of debt issue costs	63	57	43
Ineffectiveness related to hedge accounting derivatives	(4)	15	4
Interest expense excluding non-hedge accounting results	3,306	2,761	1,763
Net result from non-hedge accounting	845	(99)	(202)
Total interest expense	$4,151	$2,662	$1,561

The following table summarizes the components of the net result from non-hedge accounting, which is included in interest expense (dollars in millions):

	Years Ended March 31,
	2008	2007	2006
	As Currently Restated	As Previously Restated	As Previously Restated
Currency basis swaps unrealized (gain)/loss	($152)	($127)	$114
Foreign currency transaction loss/(gain)	174	127	(115)
Net interest realized on non-hedge accounting derivatives	(119)	(344)	(260)
Unrealized loss on non-hedge accounting derivatives
Interest rate swaps	930	242	51
Interest rate caps	12	3	7
Other	-	-	1
Net result from non-hedge accounting	$845	($99)	($202)

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 9 – Interest Expense and Derivatives and Hedging Activities (Continued)

The following table summarizes our derivative assets and liabilities, which are included in other assets and other liabilities in the Consolidated Balance Sheet (dollars in millions):

	March 31,
	2008	2007
	As Currently Restated	As Previously Restated
Derivative assets	$3,189	$1,529
Less: Collateral held1	1,656	291
Derivative assets, net of collateral	$1,533	$1,238

Derivative liabilities	$1,101	$97

1 Represents cash received under reciprocal collateral arrangements that we have entered into with certain derivative

counterparties as described below under “Counterparty Credit Risk”.

Counterparty Credit Risk

We enter into reciprocal collateral arrangements with certain counterparties to mitigate our exposure to the credit risk associated with the respective counterparty. A valuation of our position with the respective counterparty is performed monthly. If the market value of our net derivatives position with the counterparty exceeds a specified threshold, the counterparty is required to transfer cash collateral in excess of the threshold to us. Conversely, if the market value of the counterparty's net derivatives position with us exceeds a specified threshold, we are required to transfer cash collateral in excess of the threshold to the counterparty. Our International Swaps and Derivatives Association (“ISDA”) Master Agreements with counterparties contain legal right of offset provisions, and therefore the collateral amounts are netted against derivative assets, which are included in other assets in the Consolidated Balance Sheet. At March 31, 2008 and 2007, we held a net $1.7 billion and $291 million, respectively, in collateral from counterparties, which is included in cash and cash equivalents in the Consolidated Balance Sheet. We are not required to hold the collateral in a segregated account.

Counterparty credit risk of derivative instruments is represented by the fair value of contracts with a positive fair value at March 31, 2008, reduced by the effects of master netting agreements and collateral. At March 31, 2008, substantially all of our derivative instruments were executed with commercial banks and investment banking firms assigned investment grade ratings of "A" or better by nationally recognized statistical rating organizations. We have not experienced a counterparty default and do not currently anticipate non-performance by any of our counterparties, and as such have no reserves related to non-performance as of March 31, 2008. In addition, many of our ISDA Master Agreements with counterparties contain reciprocal ratings triggers providing either party with an option to terminate the agreement and related transactions at market in the event of a ratings downgrade below a specified threshold.

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 9 – Interest Expense and Derivatives and Hedging Activities (Continued)

A summary of the net counterparty credit exposure by credit rating as of March 31, 2008 and 2007 (net of collateral held) is presented below (dollars in millions):

	March 31,
	2008	2007
	As Currently Restated	As Previously Restated
Credit Rating
AAA	$191	$226
AA	900	944
A	442	68
Total net counterparty credit exposure	$1,533	$1,238

Note 10 – Other Assets and Other Liabilities

Other assets and other liabilities consisted of the following (dollars in millions):

	March 31,
	2008	2007
	As Currently Restated	As Previously Restated
Other assets:
Derivative assets	$1,533	$1,238
Used vehicles held for sale1	277	132
Deferred charges	225	154
Income taxes receivable	386	342
Notes from affiliates	711	-
Other assets	445	365
Total other assets	$3,577	$2,231

Other liabilities:
Unearned insurance premiums and contract revenues	$1,312	$1,139
Accounts payable and accrued expenses	1,020	935
Derivative liabilities	1,101	97
Deferred income	302	263
Other liabilities	497	187
Total other liabilities	$4,232	$2,621

1 Primarily represents repossessed and off-lease vehicles.

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 11 – Debt

Debt and the related weighted average contractual interest rates are summarized as follows (dollars in millions):

			Weighted Average Contractual Interest Rates
	March 31,		March 31,
	2008	2007	2008	2007
	As Previously Restated
Commercial paper1	$16,063	$14,954	3.25%	5.29%
Notes and loans payable1	49,232	42,415	4.30%	4.44%
Carrying value adjustment2	2,971	1,227
Debt	$68,266	$58,596	4.05%	4.67%

1 Includes unamortized premium/discount and effects of foreign currency transaction gains and losses on non-hedged and

de-designated debt denominated in foreign currencies.

2 Represents the effects of foreign currency transaction gains and losses and fair value adjustments to debt in hedging relationships, and the

unamortized fair value adjustments on the hedged item for terminated fair value hedge accounting relationships.

The carrying value of our notes and loans payable includes unsecured notes denominated in various foreign currencies valued at $23.7 billion and $17.1 billion at March 31, 2008 and 2007, respectively. Concurrent with the issuance of these unsecured notes, we entered into cross currency interest rate swaps or a combination of interest rate swaps coupled with currency basis swaps in the same notional amount to convert non-U.S. currency debt to U.S. dollar denominated payments.

Additionally, the carrying value of our notes and loans payable at March 31, 2008 consists of $13.9 billion of unsecured floating rate debt with contractual interest rates ranging from 0 percent to 6.6 percent and $38.3 billion of unsecured fixed rate debt with contractual interest rates ranging from 0 percent to 15.3 percent. Upon issuance of fixed rate debt, we generally elect to enter into interest rate swaps to convert fixed rate debt to floating rate debt.

As of March 31, 2008, our commercial paper had an average remaining maturity of 51 days. Our notes and loans payable mature on various dates through fiscal 2047.

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 11 – Debt (Continued)

Scheduled maturities of our debt portfolio are summarized below (dollars in millions):

		March 31,
		As Previously Restated
Commercial paper		$16,063
Other debt due in the fiscal years ending:
2009		17,196
2010		15,086
2011		7,137
2012		4,194
2013		2,084
Thereafter		6,506
Total other debt		52,203
Debt		$68,266

Interest payments on debt, including net settlements on interest rate swaps, were $2.1 billion, $1.6 billion, and $1.4 billion in fiscal 2008, 2007, and 2006, respectively.

Note 12 – Liquidity Facilities and Letters of Credit

364 Day Credit Agreement

Five Year Credit Agreement

Letters of Credit Facilities Agreement

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 13 – Fair Value of Financial Instruments

The fair value of financial instruments at March 31, 2008 and 2007 was estimated using the valuation methodologies described below. Considerable judgment was employed in interpreting market data to develop estimates of fair value; accordingly, the estimates presented herein are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange. The use of different market assumptions or valuation methodologies could have a material effect on the estimated fair value amounts.

The carrying amounts and estimated fair values of our financial instruments are as follows (dollars in millions):

	March 31,
	2008		2007
	As Currently Restated		As Previously Restated
	Carrying Amount	Fair Value	Carrying Amount	Fair Value
Balance sheet financial instruments:

Assets:
Cash and cash equivalents	$736	$736	$1,329	$1,329
Investments in marketable securities	$1,948	$1,948	$1,465	$1,465
Finance receivables, net1	$55,000	$55,511	$47,158	$46,567
Derivative assets	$1,533	$1,533	$1,238	$1,238

Liabilities:
Debt	$68,266	$68,580	$58,596	$58,390
Derivative liabilities	$1,101	$1,101	$97	$97

1 Includes $10.9 billion and $8.7 billion of variable rate finance receivables at March 31, 2008 and 2007, respectively, whose

carrying amounts approximate fair value as these receivables re-price at prevailing market rates. Excludes $481 million and

$704 million of direct finance leases, net at March 31, 2008 and 2007, respectively, which are not considered financial

instruments.

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 13 – Fair Value of Financial Instruments (Continued)

The fair value estimates presented herein are based on information available as of March 31, 2008 and 2007. The methods and assumptions used to estimate the fair value of financial instruments are summarized as follows:

Cash and Cash Equivalents

The carrying amount of cash and cash equivalents approximates fair value due to the short maturity of these investments.

Investments in Marketable Securities

The fair value of marketable securities was estimated using quoted market prices or discounted cash flow analysis.

Finance Receivables, Net

The fair value of fixed rate finance receivables at March 31, 2008 and 2007 was estimated by discounting expected cash flows using the blended rates of finance receivables originated during the quarters ended March 31, 2008 and 2007, respectively. Management expects to collect all amounts due according to the contractual terms of the finance receivable agreements, less the related allowance for credit losses.

Derivative Assets and Liabilities

The estimated fair value of our derivative assets and liabilities was derived by discounting expected cash flows using quoted market exchange rates, quoted market interest rates, or quoted market prices, as of March 31, 2008 and 2007 as applicable to each instrument. Derivative assets and liabilities are recorded in other assets and other liabilities, respectively, in the Consolidated Balance Sheet.

Debt

The fair value of debt was estimated by discounting expected cash flows using the interest rates at which debt of similar credit quality and maturity would be issued as of March 31, 2008 and 2007. We utilize quoted market exchange rates, quoted market interest rates, or quoted market prices, when appropriate, in developing cash flows. The carrying amount of commercial paper was assumed to approximate fair value due to the short maturity of these instruments.

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 14 – Pension and Other Benefit Plans

Employees of TMCC, TCPR, and TMCC’s insurance subsidiaries are generally eligible to participate in the TMS pension plan commencing on the first day of the month following hire and are vested after 5 years of continuous employment. Benefits payable under this non-contributory defined benefit pension plan are based upon the employees' years of credited service, the highest average compensation for any 60 consecutive month period out of the last 120 months of employment, and one-half of the highest average fiscal year bonus for the 60 consecutive month period in the last 120 months of employment used to calculate highest average compensation, reduced by a percentage of social security benefits.

Employees of TMCC, TCPR, and TMCC’s insurance subsidiaries are also eligible to participate in the Toyota Savings Plan sponsored by TMS. Participants may elect to contribute up to 30 percent of their base pay on a pre-tax basis, subject to Internal Revenue Code limitations. We match 66-2/3 cents for each dollar the participant contributes, up to 6 percent of base pay. Participants are vested 25 percent each year with respect to our contributions and are fully vested after four years.

In addition, employees of TMCC, TCPR, and TMCC’s insurance subsidiaries are generally eligible to participate in various health and life and other post-retirement benefits sponsored by TMS. In order to be eligible for these benefits, the employee must retire from the company with at least ten years of service and in some cases be at least 55 years of age.

We adopted SFAS 158 as of March 31, 2007 and it did not have a material impact on Shareholder’s Equity.

Our employee benefits expense was $54 million, $63 million, and $61 million for the years ended March 31, 2008, 2007, and 2006, respectively.

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 15 – Income Tax Provision

The provision for income taxes consisted of the following (dollars in millions):

	Years Ended March 31,
	2008	2007	2006
	As Currently Restated	As Previously Restated	As Previously Restated
Current
Federal, net of foreign tax credit	$4	($440)	$464
State	(17)	(61)	34
Foreign	4	2	10
Total current	(9)	(499)	508
Deferred
Federal	(119)	638	(381)
State	(29)	94	194
Total deferred	(148)	732	(187)
(Benefit) provision for income taxes	($157)	$233	$321

A reconciliation between the U.S. federal statutory tax rate and the effective tax rate is as follows:

	Years Ended March 31,
	2008	2007	2006
	As Currently Restated	As Previously Restated	As Previously Restated
Provision for income taxes at U.S. federal statutory tax rate	35.00%	35.00%	35.00%
State and local taxes (net of federal tax benefit)	5.32%	3.73%	3.82%
Other1	1.03%	(3.85%)	(1.76%)
Effective tax rate2	41.35%	34.88%	37.06%

1 Includes deferred tax benefit due to reduced effective state tax rate and hybrid credit for the years ended March 31, 2007 and 2006.

2 The effective tax rate at March 31, 2008 represents a tax benefit. The effective tax rates at March 31, 2007 and 2006 represent tax provision

expenses.

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 15 – Income Tax Provision (Continued)

The deferred federal and state income tax liabilities are as follows (dollars in millions):

	March 31,
	2008	2007
	As Currently Restated	As Previously Restated
Federal	$2,750	$2,774
State	370	358
Net deferred income tax liability	$3,120	$3,132

Our deferred tax liabilities and assets consisted of the following (dollars in millions):

	March 31,
	2008	2007
	As Currently Restated	As Previously Restated
Liabilities:
Lease transactions	$3,697	$3,227
State taxes	285	257
Mark-to-market of investments in marketable securities and derivatives	1	31
Other	-	108
Deferred tax liabilities	3,983	3,623

Assets:
Provision for losses	354	262
Deferred costs and fees	92	90
Net operating loss and tax credit carryforwards	331	152
Other	92	-
Deferred tax assets	869	504
Valuation allowance	(6)	(13)
Net deferred tax assets	863	491

Net deferred income tax liability	$3,120	$3,132

We have estimated cumulative federal tax net operating loss carryforwards of over $500 million available at March 31, 2008. At March 31, 2008, we have a deferred tax asset of over $50 million for state tax net operating loss carryforwards which expire in fiscal 2009 through fiscal 2028. In addition, at March 31, 2008, we have a deferred tax asset for federal and state hybrid credits of over $50 million. The state tax net operating loss and state hybrid credits are reduced by a valuation allowance of $6 million. We received a net income tax refund of over $130 million in fiscal 2008 and over $140 million in fiscal 2007.

- 125 - -

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 15 – Income Tax Provision (Continued)

At March 31, 2008, we had a receivable of $35 million for TMA’s share of the income tax in those states where we filed consolidated/combined returns with TMA and/or its subsidiaries. At March 31, 2007, the receivable amount was $21 million.

Our effective tax rate was 41.35 percent and 34.88 percent during fiscal 2008 and fiscal 2007, respectively. We note that for fiscal 2008 TMCC had a pre-tax book loss resulting in a tax benefit for the year. This tax benefit was further increased by federal and state hybrid vehicle tax credits.

We adopted the provision of FIN 48, Accounting for Uncertainty in Income Taxes, on April 1, 2007. FIN 48 clarifies the accounting and reporting for income taxes where interpretation of the tax law may be uncertain. Implementation of FIN 48 did not result in a cumulative effect adjustment to retained earnings at the date of adoption.

The change in unrecognized tax benefits in fiscal 2008 is as follows (dollars in millions):

	March 31,
Balance at beginning of the period	$1
Increases related to positions taken during the prior years	11
Increases related to positions taken during the current year	3
Decreases related to positions taken during the prior years	-
Decreases related to positions taken during the current year	(1)
Settlements	-
Expiration of statute of limitations	-
Balance at end of period	$14

Of the $14 million of unrecognized tax benefits at March 31, 2008, approximately $4 million of the unrecognized tax benefits would, if recognized, affect the effective tax rate. The deductibility of the remaining $10 million of unrecognized tax benefits is highly certain, but there is uncertainty about the timing of such deductibility.

We accrue interest and penalties, if applicable, related to uncertain income tax positions in interest expense and other operating expenses, respectively. For the year ended March 31, 2008, $2 million was accrued for interest and penalties.

As of March 31, 2008, federal income tax returns from fiscal year end March 31, 2004, through fiscal year end March 31, 2007 remain subject to examination. California franchise tax returns are also subject to examination for the same period.

In the normal course of business, our tax filings are examined by various tax authorities, including the Internal Revenue Service (“IRS”). During fiscal 2008, the IRS concluded its examination of the taxable periods ended September 30, 1997 through March 31, 2003. Our allocated tax and interest refund was approximately $79 million. The IRS continues to examine the taxable years ended March 31, 2004 through March 31, 2006.

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 16 – Commitments and Contingencies

Commitments and Guarantees

We have entered into certain commitments and guarantees described below. The maximum amounts under these commitments and guarantees are summarized in the table below (dollars in millions):

	Maximum Commitment Amount
	March 31,
	2008	2007
Commitments:
Credit facilities with vehicle and industrial equipment dealers1	$5,615	$4,259
Facilities lease commitments2	108	101
Total commitments	5,723	4,360
Guarantees and other contingencies:
Guarantees of affiliate pollution control and solid waste disposal bonds	148	148
Revolving liquidity notes related to securitizations	-	17
Total commitments and guarantees	$5,871	$4,525

1 Excludes $9.2 billion and $8.1 billion of wholesale financing lines not considered to be contractual commitments at March 31,

2008 and 2007, respectively, of which $6.8 billion and $5.2 billion were outstanding at March 31, 2008 and 2007, respectively.

2 Includes $62 million and $69 million in facilities lease commitments with affiliates at March 31, 2008 and 2007, respectively.

- 127 - -

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 16 – Commitments and Contingencies (Continued)

Commitments

We provide fixed and variable rate credit facilities to vehicle and industrial equipment dealers. These credit facilities are typically used for business acquisitions, facilities refurbishment, real estate purchases, and working capital requirements. These loans are typically collateralized with liens on real estate, vehicle inventory, and/or other dealership assets, as appropriate. We obtain a personal guarantee from the vehicle or industrial equipment dealer or a corporate guarantee from the dealership when deemed prudent. Although the loans are typically collateralized or guaranteed, the value of the underlying collateral or guarantees may not be sufficient to cover our exposure under such agreements. We price the credit facilities to reflect the credit risks assumed in entering into the credit facility. Amounts drawn under these facilities are reviewed for collectibility quarterly, in conjunction with our evaluation of the allowance for credit losses. We also provide financing to various multi-franchise dealer organizations, referred to as dealer groups, often as part of a lending consortium, for wholesale, working capital, real estate, and business acquisitions. Of the total credit facilities available to vehicle and industrial equipment dealers, $4.1 billion and $2.9 billion were outstanding at March 31, 2008 and 2007, respectively, and were recorded in finance receivables, net in the Consolidated Balance Sheet.

We are party to a 15-year lease agreement with TMS for our headquarters location in the TMS headquarters complex in Torrance, California. At March 31, 2008, minimum future commitments under lease agreements to which we are a lessee, including those under the agreement discussed above, are as follows: fiscal years ending 2009 – $22 million; 2010 - $19 million; 2011 - $15 million; 2012 - $12 million; 2013 $9 million; and thereafter – $31 million.

Guarantees and Other Contingencies

TMCC has guaranteed certain bond obligations relating to two affiliates totaling $148 million of principal and interest that were issued by Putnam County, West Virginia and Gibson County, Indiana. The bonds mature in the following fiscal years: 2028 - $20 million; 2029 - $50 million; 2030 - $38 million; 2031 - $30 million; and 2032 - $10 million. TMCC would be required to perform under the guarantees in the event of failure by the affiliates to fulfill their obligations; bankruptcy involving the affiliates or TMCC; or failure to observe any covenant, condition, or agreement under the guarantees by the affiliates, bond issuers, or TMCC.

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 16 – Commitments and Contingencies (Continued)

These guarantees include provisions whereby TMCC is entitled to reimbursement by the affiliates for amounts paid. TMCC receives an annual fee of $102,000 for guaranteeing such payments. TMCC has not been required to perform under any of these affiliate bond guarantees as of March 31, 2008 and 2007. The fair value of these guarantees as of March 31, 2008 and 2007 was approximately $1 million. As of March 31, 2008 and 2007, no liability amounts have been recorded related to the guarantees as management has determined that it is not probable that we would be required to perform under these affiliate bond guarantees.

Indemnification

In the ordinary course of business, we enter into agreements containing indemnification provisions standard in the industry related to several types of transactions, including, but not limited to, debt funding, derivatives, securitization transactions, and our vendor and supplier agreements. Performance under these indemnities would occur upon a breach of the representations, warranties or covenants made or given, or a third party claim. In addition, we have agreed in certain debt and derivative issuances, and subject to certain exceptions, to gross-up payments due to third parties in the event that withholding tax is imposed on such payments. In addition, certain of our funding arrangements would require us to pay lenders for increased costs due to certain changes in laws or regulations. Due to the difficulty in predicting events which could cause a breach of the indemnification provisions or trigger a gross-up or other payment obligation, we are not able to estimate our maximum exposure to future payments that could result from claims made under such provisions. We have not made any material payments in the past as a result of these provisions, and as of March 31, 2008, we determined that it is not probable that we will be required to make any material payments in the future. As of March 31, 2008 and 2007, no amounts have been recorded under these indemnifications.

Litigation

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 16 – Commitments and Contingencies (Continued)

Repossession Class Actions

A cross-complaint alleging a class action in the Superior Court of California Stanislaus County, Garcia v. Toyota Motor Credit Corporation, filed in January 2007, claims that the Company's post-repossession notice failed to comply with the Reese-Levering Automobile Sales Finance Act of California ("Reese-Levering"). An additional cross-complaint alleging a class action in the Superior Court of California San Francisco County, Aquilar and Smith v. Toyota Motor Credit Corporation, filed in February 2008, contains similar allegations claiming that the Company's post-repossession notices failed to comply with Reese-Levering. The plaintiffs are seeking injunctive relief, restitution and/or disgorgement, as well as damages in the Aquilar matter. The Company has filed a petition to consolidate these cases as they present nearly identical questions of law and fact. The Company believes it has strong defenses to these claims.

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 17 – Related Party Transactions

The tables below summarize amounts included in our Consolidated Balance Sheet and Statement of Income under various related party agreements or relationships (dollars in millions):

	March 31,
	2008	2007
Assets:
Finance receivables, net
Receivables with affiliates1	$21	$23
Notes receivable under home loan program2	$8	$6
Deferred retail subvention income from affiliates3	($530)	($468)

Investments in operating leases, net
Leases to affiliates4	$38	$41
Deferred lease subvention income from affiliates3	($415)	($401)

Other assets
Notes receivable from affiliates5	$711	$-
Intercompany receivables6	$94	$44
Subvention receivable from affiliates3	$75	$58
Deferred debt issue costs	$2	$-

Liabilities:
Other liabilities
Intercompany payables7	$355	$159
Note payable to affiliate8	$110	$-

Shareholder’s Equity:
Advances to TFSA9	$3	$155
Reclassification to re-establish receivable due from TFSA9	($27)	($131)
Dividends paid10	$-	$130

1	Represents wholesale flooring loans to certain dealerships owned by Toyota Material Handling, U.S.A., Inc. (“TMHU”) and amounts due under industrial equipment leasing arrangements (classified as direct finance leases) with various affiliates.

2	Certain officers, directors, and other members of our management have received mortgage loans from us secured by residential real property.

3	Subvention receivables represent amounts due from TMS and other affiliates in support of retail, lease, and industrial equipment subvention programs offered by us. Deferred subvention income represents the unearned portion of amounts received from these transactions.

4	Represents the investment in operating leases of industrial equipment leased to Toyota Logistics Services and other affiliates.

5	Represents balances primarily due from Toyota Credit Canada Inc. (“TCCI”) and Toyota Financial Savings Bank (“TFSB”).

6	Represents balances due from affiliates arising from various transactions primarily relating to affiliate insurance premiums and commissions, income taxes, shared services charges, employee benefits, and credit support fees.

7	Represents balances due to affiliates arising from various transactions including credit support fees due to TFSC and Wholesale Flooring arrangements. TMCC and TCPR provide wholesale financing to vehicle dealers, and as a result of funding the loans, have payables to TMS and TDPR, respectively.

8	Represents balance due to Toyota Financial Services Americas Corporation (“TFSA”) under its credit agreement with us.

TMCC and TFSA are parties to reciprocal credit agreements which allow each company to borrow up to $200 million from the other. Advances to TFSA are recorded as reductions of retained earnings and are reclassified to notes receivable from affiliates upon TFSA’s settlements of its advances from TMCC.

10	No dividends were declared or paid during fiscal 2008. During fiscal 2007, our Board of Directors declared and paid a cash dividend of $130 million to TFSA.

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 17 – Related Party Transactions (Continued)

	Years Ended March 31,
	2008	2007	2006
Net Financing Revenues:
Manufacturers’ subvention support and other revenues1	$654	$495	$309
Credit support fees incurred2	($41)	($34)	($28)
Foreign exchange gain on notes receivable from an affiliate	$30	$-	$-

Other Revenues:
Affiliate insurance premiums, commissions, and other revenues3	$66	$75	$74
Interest earned on notes receivable from affiliates	$14	$-	$-

Expenses:
Shared services charges and other expenses4	$54	$60	$69
Employee benefits expense5	$54	$63	$61

1 Represents the earned portion of retail, lease, and industrial equipment subvention programs.

2 Represents fees incurred under a credit support agreement with TFSC.

3 Represent primarily TMIS’ revenues for administrative services and various levels and types of insurance coverage provided to TMS. This

includes the warranty coverage for TMS’ certified pre-owned vehicle program and various umbrella liability policies. TMIS, through its

wholly-owned subsidiary, provides umbrella liability insurance to TMS and affiliates covering certain dollar value layers of risk above

various primary or self-insured retentions. On all layers in which TMIS has provided coverage, 99 percent of the risk has been ceded

to various reinsurers.

4 TMCC and TMS are parties to a shared services agreement which covers certain technological and administrative services, such as

information systems support, facilities, insurance coverage, and corporate services provided by each entity to the other. In addition, we

pay rent charges to TMS for our headquarters facility in the TMS headquarters complex in Torrance, California and our Central Customer

Service Center.

5 Certain employees are eligible to participate in pension and other benefit plans that are sponsored by TMS. TMS allocates costs to us

based on the total number of participating or eligible employees at TMCC, TMIS and TCPR.

Notes Receivable from Affiliates

During fiscal 2008, TMCC and Toyota Financial Savings Bank (“TFSB”) entered into a promissory note agreement which allows TFSB to borrow up to $400 million with terms up to 10 years at agreed competitive rates. The amount outstanding with TFSB at March 31, 2008 was $271 million.

During fiscal 2008, TMCC also entered into uncommitted loan finance agreements with Toyota Credit Canada Inc. (“TCCI”) and Toyota Motor Finance (Netherlands) B.V. (“TMFNL”) under which TMCC may make loans to TMFNL and TCCI. The terms are determined at the time of each loan based on business factors and market conditions. The amount outstanding with TCCI at March 31, 2008 was $431 million. No amount was outstanding from TMFNL at March 31, 2008.

TCPR has extended a $110 million revolving line of credit to Toyota de Puerto Rico Corp. (“TDPR”), a wholly-owned subsidiary of TMS. The revolving line of credit has a one-year renewable term, with interest due monthly. Any loans outstanding under the revolving line of credit are not guaranteed by TMS and are unsecured. The amount outstanding with TDPR at March 31, 2008 was $9 million. No amount was outstanding with TDPR at March 31, 2007.

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 17 – Related Party Transactions (Continued)

Credit Support Fees Incurred

In connection with the creation of TFSC and the transfer of ownership of TMCC from TMS to TFSA, TMC and TFSC entered into a credit support agreement (the “TMC Credit Support Agreement”). Under the terms of this agreement, TMC has agreed to certain ownership, subsidiary net worth, and debt service provisions in support of TFSC operations. The agreement is not a guarantee by TMC of any securities or obligations of TFSC.

Concurrent with the execution of the TMC Credit Support Agreement, TFSC and TMCC entered into a credit support agreement (the “TFSC Credit Support Agreement”). Under this agreement, TFSC agreed to certain ownership, subsidiary net worth, and debt service provisions similar to those under the TMC Credit Support Agreement. This agreement is not a guarantee by TFSC of any securities or other obligations of TMCC. The TMC Credit Support Agreement and the TFSC Credit Support Agreement are governed by, and construed in accordance with, the laws of Japan.

TCPR is the beneficiary of a credit support agreement with TFSC containing the same provisions as the TFSC Credit Support Agreement described above. This agreement is not a guarantee by TFSC of any securities or other obligations of TCPR.

In addition, TMCC and TCPR have each entered into agreements to pay TFSC a semi-annual fee which is based upon the weighted average outstanding amount of bonds and other liabilities or securities entitled to credit support.

Shared services charges and other expenses

TMCC and Toyota Financial Savings Bank (“TFSB”) are parties to a shared services agreement. Under the agreement, TMCC provides certain services to TFSB, including certain marketing, administrative, systems, and operational support in exchange for TFSB’s willingness to make available certain financial products and services to TMCC’s customers and dealers meeting TFSB’s credit worthy standards.

TMCC provides administrative support in the form of shared services to support the operations of Toyota Financial Services Securities USA Corporation (“TFSS”), an affiliate of TMCC.

TMCC and TMS are parties to a repurchase agreement, which provides that TMS will arrange for the repurchase of new Toyota and Lexus vehicles at the aggregate cost financed by TMCC in the event of vehicle dealer default under floorplan financing. TMCC is also a party to similar agreements with TMHU, HINO, and other domestic and import manufacturers. No vehicles were repurchased under these agreements during fiscal 2008.

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 18 – Segment Information

Our reportable segments include finance and insurance operations. Finance operations include retail financing, leasing, and dealer financing provided to authorized vehicle dealers and their customers in the U.S. and the Commonwealth of Puerto Rico. Insurance operations are performed by TMIS and its subsidiaries. The principal activities of TMIS include marketing, underwriting, claims administration, and providing certain insurance and contractual coverage to Toyota and Lexus vehicle dealers and their customers. In addition, TMIS insures and reinsures certain TMS and TMCC risks, including warranty coverage for TMS’ certified pre-owned vehicle program, various umbrella liability policies, and insurance of vehicle dealers’ inventory financed by TMCC. The finance and insurance operations segment information presented below includes allocated corporate expenses for the respective segments. Other amounts include financing provided to industrial equipment dealers and intersegment eliminations and reclassifications.

The accounting policies of the operating segments are the same as those described in Note 3 – Summary of Significant Accounting Policies. Currently, our finance and insurance segments operate only in the U.S. and the Commonwealth of Puerto Rico. Substantially all of our finance and insurance segments are located within the U.S.

Financial information for our reportable operating segments for the years ended or at March 31 is summarized as follows (dollars in millions):

	Finance Operations	Insurance Operations	Other	Total
	As Currently Restated			As Currently Restated
Fiscal 2008:
Gross revenues	$8,042	$557	$279	$8,878
Less:
Depreciation on operating leases	3,144	-	155	3,299
Interest expense	4,089	-	62	4,151
Provision for credit losses	799	-	10	809
Operating and administrative expenses	658	157	26	841
Insurance losses and loss adjustment expenses	-	158	-	158
(Benefit) provision for income taxes	(254)	87	10	(157)
Net (loss) income	($394)	$155	$16	($223)

Total assets	$76,714	$2,450	$1,234	$80,398

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 18 – Segment Information (Continued)

	Finance Operations	Insurance Operations	Other	Total
	As Previously Restated			As Previously Restated
Fiscal 2007:
Gross revenues	$6,565	$494	$237	$7,296
Less:
Depreciation on operating leases	2,529	-	144	2,673
Interest expense	2,620	-	42	2,662
Provision for credit losses	407	-	3	410
Operating and administrative expenses	587	144	27	758
Insurance losses and loss adjustment expenses	-	126	-	126
Provision for income taxes	143	83	7	233
Net income	$279	$141	$14	$434

Total assets	$66,130	$2,084	$1,166	$69,380


Fiscal 2006:
Gross revenues	$5,031	$346	$208	$5,585
Less:
Depreciation on operating leases	1,891	-	136	2,027
Interest expense	1,530	-	31	1,561
Provision for credit losses	302	-	3	305
Operating and administrative expenses	570	125	17	712
Insurance losses and loss adjustment expenses	-	115	-	115
Provision for income taxes	279	34	8	321
Net income	$459	$72	$13	$544

Total assets	$55,913	$1,591	$757	$58,261

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 19 –Quarterly Financial Data (Unaudited)

The following tables set forth our quarterly financial data for fiscal 2008 and 2007, including the effects of the restatements described in Note 1 – Restated Financial Results.

BALANCE SHEET (Dollars in millions)

	December 31, 2007					December 31, 2006
	As Originally Reported	Previous Adjustment	As Previously Restated	Current Adjustment	As Currently Restated	As Originally Reported	Previous Adjustment	As Previously Restated
ASSETS

Cash and cash equivalents	$3,274	$-	$3,274	$-	$3,274	$1,615	$-	$1,615
Investments in marketable securities	1,408	-	1,408	-	1,408	1,286	-	1,286
Finance receivables, net	53,491	-	53,491	-	53,491	46,149	-	46,149
Investments in operating leases, net	18,272	-	18,272	-	18,272	15,873	-	15,873
Other assets	3,913	7	3,920	(4)	3,916	1,939	3	1,942
Total assets	$80,358	$7	$80,365	($4)	$80,361	$66,862	$3	$66,865

LIABILITIES AND SHAREHOLDER'S EQUITY

Debt	$68,270	$135	$68,405	$-	$68,405	$56,347	$58	$56,405
Deferred income taxes	3,298	(50)	3,248	(4)	3,244	2,974	(22)	2,952
Other liabilities	3,607	-	3,607	5	3,612	2,512	-	2,512
Total liabilities	75,175	85	75,260	1	75,261	61,833	36	61,869

Shareholder's equity:
Capital stock, $10,000 par value (100,000 shares authorized; issued and outstanding 91,500 in 2008 and 2007)	915	-	915	-	915	915	-	915
Accumulated other comprehensive income	28	-	28	-	28	79	-	79
Retained earnings	4,240	(78)	4,162	(5)	4,157	4,035	(33)	4,002
Total shareholder's equity	5,183	(78)	5,105	(5)	5,100	5,029	(33)	4,996
Total liabilities and shareholder's equity	$80,358	$7	$80,365	($4)	$80,361	$66,862	$3	$66,865

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 19 –Quarterly Financial Data (Unaudited)

BALANCE SHEET (Dollars in millions)

	September 30, 2007			September 30, 2006
	As Originally Reported	Previous Adjustment	As Previously Restated	As Originally Reported	Previous Adjustment	As Previously Restated
ASSETS

Cash and cash equivalents	$2,099	$-	$2,099	$2,174	$-	$2,174
Investments in marketable securities	1,657	-	1,657	1,130	-	1,130
Finance receivables, net	50,777	-	50,777	43,678	-	43,678
Investments in operating leases, net	17,956	-	17,956	15,321	-	15,321
Other assets	3,730	6	3,736	1,757	2	1,759
Total assets	$76,219	$6	$76,225	$64,060	$2	$64,062

LIABILITIES AND SHAREHOLDER'S EQUITY

Debt	$64,385	$119	$64,504	$53,702	$53	$53,755
Deferred income taxes	3,262	(41)	3,221	2,901	(20)	2,881
Other liabilities	3,268	(8)	3,260	2,480	-	2,480
Total liabilities	70,915	70	70,985	59,083	33	59,116

Shareholder's equity:
Capital stock, $10,000 par value (100,000 shares authorized; issued and outstanding 91,500 in 2008 and 2007)	915	-	915	915	-	915
Accumulated other comprehensive income	69	-	69	61	-	61
Retained earnings	4,320	(64)	4,256	4,001	(31)	3,970
Total shareholder's equity	5,304	(64)	5,240	4,977	(31)	4,946
Total liabilities and shareholder's equity	$76,219	$6	$76,225	$64,060	$2	$64,062

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 19 –Quarterly Financial Data (Unaudited)

BALANCE SHEET (Dollars in millions)

	June 30, 2007			June 30, 2006
	As Originally Reported	Previous Adjustment	As Previously Restated	As Originally Reported	Previous Adjustment	As Previously Restated
ASSETS

Cash and cash equivalents	$2,253	$-	$2,253	$1,288	$-	$1,288
Investments in marketable securities	1,495	-	1,495	1,051	-	1,051
Finance receivables, net	49,178	-	49,178	43,073	-	43,073
Investments in operating leases, net	17,274	-	17,274	14,142	-	14,142
Other assets	2,393	4	2,397	2,210	1	2,211
Total assets	$72,593	$4	$72,597	$61,764	$1	$61,765

LIABILITIES AND SHAREHOLDER'S EQUITY

Debt	$61,162	$112	$61,274	$51,560	$44	$51,604
Deferred income taxes	3,273	(40)	3,233	2,892	(17)	2,875
Other liabilities	2,878	(4)	2,874	2,354	-	2,354
Total liabilities	67,313	68	67,381	56,806	27	56,833

Shareholder's equity:
Capital stock, $10,000 par value (100,000 shares authorized; issued and outstanding 91,500 in 2008 and 2007)	915	-	915	915	-	915
Accumulated other comprehensive income	63	-	63	54	-	54
Retained earnings	4,302	(64)	4,238	3,989	(26)	3,963
Total shareholder's equity	5,280	(64)	5,216	4,958	(26)	4,932
Total liabilities and shareholder's equity	$72,593	$4	$72,597	$61,764	$1	$61,765

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 19 –Quarterly Financial Data (Unaudited)

INCOME STATEMENT (Dollars in millions)

	Three Months Ended March 31, 2008					Three Months Ended March 31, 2007
	As Originally Reported	Previous Adjustment	As Previously Restated	Current Adjustment	As Currently Restated	As Originally Reported	Previous Adjustment	As Previously Restated
Financing revenues:
Operating lease	$1,178	$-	$1,178	$-	$1,178	$981	$-1	$981
Direct financing lease	14	-	14	-	14	23	-	23
Retail financing	798	-	798	-	798	663	-	663
Dealer financing	154	-	154	-	154	150	-	150
Total financing revenues	2,144	-	2,144	-	2,144	1,817	-	1,817

Depreciation on operating leases	881	-	881	-	881	727	-	727
Interest expense	1,265	73	1,338	36	1,374	742	-	742
Net financing revenues	(2)	(73)	(75)	(36)	(111)	348	-	348

Insurance earned premiums and contract revenues	100	-	100	-	100	88	-	88
Investment and other income	67	-	67	-	67	123	-	123
Net financing revenues and other revenues	165	(73)	92	(36)	56	559	-	559

Provision for credit losses	266	-	266	-	266	142	-	142
Expenses:
Operating and administrative	224	-	224	-	224	223	-	223
Insurance losses and loss adjustment expenses	41	-	41	-	41	31	-	31
Total provision for credit losses and expenses	531	-	531	-	531	396	-	396

(Loss) income before (benefit) provision for income taxes	(366)	(73)	(439)	(36)	(475)	163	-	163
(Benefit) provision for income taxes	(141)	(28)	(169)	(14)	(183)	65	1	66

Net (loss) income	($225)	($45)	($270)	($22)	($292)	$98	($1)	$97

1 In the three months ended March 31, 2007, the impact of the debt market value adjustment was completely offset by a $10 million reduction

of interest expense to correct previously identified and recorded cumulative adjustments as described in Note 1 – Restated Financial Results.

- 139 - -

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 19 –Quarterly Financial Data (Unaudited)

INCOME STATEMENT (Dollars in millions)

	Three Months Ended December 31, 2007					Three Months Ended December 31, 2006
	As Originally Reported	Previous Adjustment	As Previously Restated	Current Adjustment	As Currently Restated	As Originally Reported	Previous Adjustment	As Previously Restated
Financing revenues:
Operating lease	$1,136	$-	$1,136	$-	$1,136	$937	$-	$937
Direct financing lease	17	-	17	-	17	28	-	28
Retail financing	789	-	789	-	789	639	-	639
Dealer financing	167	-	167	-	167	137	-	137
Total financing revenues	2,109	-	2,109	-	2,109	1,741	-	1,741

Depreciation on operating leases	845	-	845	-	845	693	-	693
Interest expense	1,082	231	1,105	9	1,114	664	4	668
Net financing revenues	182	(23)	159	(9)	150	384	(4)	380

Insurance earned premiums and contract revenues	97	-	97	-	97	84	-	84
Investment and other income	126	-	126	-	126	51	-	51
Net financing revenues and other revenues	405	(23)	382	(9)	373	519	(4)	515

Provision for credit losses	290	-	290	-	290	111	-	111
Expenses:
Operating and administrative	215	-	215	-	215	179	-	179
Insurance losses and loss adjustment expenses	39	-	39	-	39	31	-	31
Total provision for credit losses and expenses	544	-	544	-	544	321	-	321

(Loss) income before (benefit) provision for income taxes	(139)	(23)	(162)	(9)	(171)	198	(4)	194
(Benefit) provision for income taxes	(59)	(9)	(68)	(4)	(72)	75	(2)	73

Net (loss) income	($80)	($14)	($94)	($5)	($99)	$123	($2)	$121

1 Includes a $16 million reduction of interest expense to correct previously identified and recorded cumulative adjustments as described in

Note 1 – Restated Financial Results.

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TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 19 –Quarterly Financial Data (Unaudited)

INCOME STATEMENT (Dollars in millions)

	Nine Months Ended December 31, 2007					Nine Months Ended December 31, 2006
	As Originally Reported	Previous Adjustment	As Previously Restated	Current Adjustment	As Currently Restated	As Originally Reported	Previous Adjustment	As Previously Restated
Financing revenues:
Operating lease	$3,255	$-	$3,255	$-	$3,255	$2,643	$-	$2,643
Direct financing lease	57	-	57	-	57	85	-	85
Retail financing	2,243	-	2,243	-	2,243	1,768	-	1,768
Dealer financing	493	-	493	-	493	397	-	397
Total financing revenues	6,048	-	6,048	-	6,048	4,893	-	4,893

Depreciation on operating leases	2,418	-	2,418	-	2,418	1,946	-	1,946
Interest expense	2,695	73	2,768	9	2,777	1,924	(4)	1,920
Net financing revenues	935	(73)	862	(9)	853	1,023	4	1,027

Insurance earned premiums and contract revenues	285	-	285	-	285	246	-	246
Investment and other income	234	-	234	-	234	129	-	129
Net financing revenues and other revenues	1,454	(73)	1,381	(9)	1,372	1,398	4	1,402

Provision for credit losses	543	-	543	-	543	268	-	268
Expenses:
Operating and administrative	617	-	617	-	617	535	-	535
Insurance losses and loss adjustment expenses	117	-	117	-	117	95	-	95
Total provision for credit losses and expenses	1,277	-	1,277	-	1,277	898	-	898

Income before provision for income taxes	177	(73)	104	(9)	95	500	4	504
Provision for income taxes	59	(29)	30	(4)	26	166	1	167

Net income	$118	($44)	$74	($5)	$69	$334	$3	$337

- 141 - -

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 19 –Quarterly Financial Data (Unaudited)

INCOME STATEMENT (Dollars in millions)

	Three Months Ended September 30, 2007			Three Months Ended September 30, 2006
	As Originally Reported	Previous Adjustment	As Previously Restated	As Originally Reported	Previous Adjustment	As Previously Restated
Financing revenues:
Operating lease	$1,090	$-	$1,090	$888	$-	$888
Direct financing lease	19	-	19	27	-	27
Retail financing	753	-	753	585	-	585
Dealer financing	162	-	162	130	-	130
Total financing revenues	2,024	-	2,024	1,630	-	1,630

Depreciation on operating leases	812	-	812	648	-	648
Interest expense	989	11	990	760	8	768
Net financing revenues	223	(1)	222	222	(8)	214

Insurance earned premiums and contract revenues	96	-	96	83	-	83
Investment and other income	62	-	62	58	-	58
Net financing revenues and other revenues	381	(1)	380	363	(8)	355

Provision for credit losses	151	-	151	91	-	91
Expenses:
Operating and administrative	205	-	205	184	-	184
Insurance losses and loss adjustment expenses	40	-	40	31	-	31
Total provision for credit losses and expenses	396	-	396	306	-	306

(Loss) income before (benefit) provision for income taxes	(15)	(1)	(16)	57	(8)	49
(Benefit) provision for income taxes	(9)	(1)	(10)	15	(3)	12

Net (loss) income	($6)	$-	($6)	$42	($5)	$37

1 Includes a $3 million reduction of interest expense to correct previously identified and recorded cumulative adjustments as described in

Note 1 – Restated Financial Results.

- 142 - -

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 19 –Quarterly Financial Data (Unaudited)

INCOME STATEMENT (Dollars in millions)

	Six Months Ended September 30, 2007			Six Months Ended September 30, 2006
	As Originally Reported	Previous Adjustment	As Previously Restated	As Originally Reported	Previous Adjustment	As Previously Restated
Financing revenues:
Operating lease	$2,119	$-	$2,119	$1,706	$-	$1,706
Direct financing lease	40	-	40	57	-	57
Retail financing	1,454	-	1,454	1,129	-	1,129
Dealer financing	326	-	326	260	-	260
Total financing revenues	3,939	-	3,939	3,152	-	3,152

Depreciation on operating leases	1,573	-	1,573	1,253	-	1,253
Interest expense	1,613	50	1,663	1,260	(8)	1,252
Net financing revenues	753	(50)	703	639	8	647

Insurance earned premiums and contract revenues	188	-	188	162	-	162
Investment and other income	108	-	108	78	-	78
Net financing revenues and other revenues	1,049	(50)	999	879	8	887

Provision for credit losses	253	-	253	157	-	157
Expenses:
Operating and administrative	402	-	402	356	-	356
Insurance losses and loss adjustment expenses	78	-	78	64	-	64
Total provision for credit losses and expenses	733	-	733	577	-	577

Income before provision for income taxes	316	(50)	266	302	8	310
Provision for income taxes	118	(20)	98	91	3	94

Net income	$198	($30)	$168	$211	$5	$216

- 143 - -

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 19 –Quarterly Financial Data (Unaudited)

INCOME STATEMENT (Dollars in millions)

	Three Months Ended June 30, 2007			Three Months Ended June 30, 2006
	As Originally Reported	Previous Adjustment	As Previously Restated	As Originally Reported	Previous Adjustment	As Previously Restated
Financing revenues:
Operating lease	$1,029	$-	$1,029	$818	$-	$818
Direct financing lease	21	-	21	30	-	30
Retail financing	701	-	701	544	-	544
Dealer financing	164	-	164	130	-	130
Total financing revenues	1,915	-	1,915	1,522	-	1,522

Depreciation on operating leases	761	-	761	605	-	605
Interest expense	624	49	673	500	(16)	484
Net financing revenues	530	(49)	481	417	16	433

Insurance earned premiums and contract revenues	92	-	92	79	-	79
Investment and other income	46	-	46	20	-	20
Net financing revenues and other revenues	668	(49)	619	516	16	532

Provision for credit losses	102	-	102	66	-	66
Expenses:
Operating and administrative	197	-	197	172	-	172
Insurance losses and loss adjustment expenses	38	-	38	33	-	33
Total provision for credit losses and expenses	337	-	337	271	-	271

Income before provision for income taxes	331	(49)	282	245	16	261
Provision for income taxes	127	(19)	108	76	6	82

Net income	$204	($30)	$174	$169	$10	$179

- 144 - -

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 19 –Quarterly Financial Data (Unaudited)

FISCAL 2008 QUARTERS

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Dollars in millions)

	Nine Months Ended December 31, 2007
	As Originally Reported	Previous Adjustment	As Previously Restated	Current Adjustment	As Currently Restated
Cash flows from operating activities:
Net income	$118	($44)	$74	($5)	$69
Adjustments to reconcile net income to net cash provided by operating activities:
Non-cash impact of hedging activities	376	68	444	9	453
Depreciation and amortization	2,912	-	2,912	-	2,912
Recognition of deferred income	(645)	-	(645)	-	(645)
Provision for credit losses	543	-	543	-	543
(Increase) in other assets	(317)	5	(312)	-	(312)
Increase in amounts held under reciprocal collateral arrangements	617	-	617	-	617
Increase in deferred income taxes	159	(29)	130	(4)	126
Increase in other liabilities	573	-	573	-	573
Net cash provided by operating activities	4,336	-	4,336	-	4,336

Net cash used in investing activities	(11,162)	-	(11,162)	-	(11,162)

Cash flows from financing activities:
Proceeds from issuance of debt	13,544	-	13,544	-	13,544
Payments on debt	(10,301)	-	(10,301)	-	(10,301)
Net change in commercial paper	5,504	-	5,504	-	5,504
Net advances from (to) TFSA	24	-	24	-	24
Net cash provided by financing activities	8,771	-	8,771	-	8,771

Net increase in cash and cash equivalents	1,945	-	1,945	-	1,945

Cash and cash equivalents at the beginning of the period	1,329	-	1,329	-	1,329
Cash and cash equivalents at the end of the period	$3,274	$-	$3,274	$-	$3,274

- 145 - -

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 19 –Quarterly Financial Data (Unaudited)

FISCAL 2007 QUARTERS

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Dollars in millions)

	Six Months Ended September 30, 2007			Three Months Ended June 30, 2007
	As Originally Reported	Previous Adjustment	As Previously Restated	As Originally Reported	Previous Adjustment	As Previously Restated
Cash flows from operating activities:
Net income	$198	($30)	$168	$204	($30)	$174
Adjustments to reconcile net income to net cash provided by operating activities:
Non-cash impact of hedging activities	94	52	146	(94)	45	(49)
Depreciation and amortization	1,862	-	1,862	913	-	913
Recognition of deferred income	(419)	-	(419)	(201)	-	(201)
Provision for credit losses	253	-	253	102	-	102
Increase in other assets	(962)	6	(956)	(40)	8	(32)
Increase in amounts held under reciprocal collateral arrangements	515	-	515	45	-	45
Increase in deferred income taxes	102	(20)	82	113	(19)	94
Increase in other liabilities	371	(8)	363	62	(4)	58
Net cash provided by operating activities	2,014	-	2,014	1,104	-	1,104

Net cash used in investing activities	(6,173)	-	(6,173)	(2,889)	-	(2,889)

Cash flows from financing activities:
Proceeds from issuance of debt	8,338	-	8,338	6,477	-	6,477
Payments on debt	(7,088)	-	(7,088)	(3,933)	-	(3,933)
Net change in commercial paper	3,655	-	3,655	166	-	166
Net advances from (to) TFSA	24	-	24	(1)	-	(1)
Net cash provided by financing activities	4,929	-	4,929	2,709	-	2,709

Net increase in cash and cash equivalents	770	-	770	924	-	924

Cash and cash equivalents at the beginning of the period	1,329	-	1,329	1,329	-	1,329
Cash and cash equivalents at the end of the period	$2,099	$-	$2,099	$2,253	$-	$2,253

- 146 - -

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 19 –Quarterly Financial Data (Unaudited)

FISCAL 2007 QUARTERS

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Dollars in millions)

	Nine Months Ended December 31, 2006
	As Originally Reported	Previous Adjustment	As Previously Restated
Cash flows from operating activities:
Net income	$334	$3	$337
Adjustments to reconcile net income to net cash provided by operating activities:
Non-cash impact of hedging activities	130	(1)	129
Depreciation and amortization	2,398	-	2,398
Recognition of deferred income	(493)	-	(493)
Provision for credit losses	268	-	268
Increase in other assets	(234)	(3)	(237)
Increase in amounts held under reciprocal collateral arrangements	297	-	297
Increase in deferred income taxes	536	1	537
Increase (decrease) in other liabilities	190	-	190
Net cash provided by operating activities	3,426	-	3,426

Net cash used in investing activities	(9,261)	-	(9,261)

Cash flows from financing activities:
Proceeds from issuance of debt	11,507	-	11,507
Payments on debt	(7,677)	-	(7,677)
Net change in commercial paper	2,924	-	2,924
Net advances from (to) TFSA	(119)	-	(119)
Net cash provided by financing activities	6,635	-	6,635

Net increase in cash and cash equivalents	800	-	800

Cash and cash equivalents at the beginning of the period	815	-	815
Cash and cash equivalents at the end of the period	$1,615	$-	$1,615

- 147 - -

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 19 –Quarterly Financial Data (Unaudited)

FISCAL 2007 QUARTERS

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Dollars in millions)

	Six Months Ended September 30, 2006			Three Months Ended June 30, 2006
	As Originally Reported	Previous Adjustment	As Previously Restated	As Originally Reported	Previous Adjustment	As Previously Restated
Cash flows from operating activities:
Net income	$211	$5	$216	$169	$10	$179
Adjustments to reconcile net income to net cash provided by operating activities:
Non-cash impact of hedging activities	155	(6)	149	(35)	(15)	(50)
Depreciation and amortization	1,532	-	1,532	728	-	728
Recognition of deferred income	(308)	-	(308)	(147)	-	(147)
Provision for credit losses	157	-	157	66	-	66
Increase in other assets	(264)	(2)	(266)	(36)	(1)	(37)
Increase in amounts held under reciprocal collateral arrangements	237	-	237	93	-	93
Increase in deferred income taxes	473	3	476	467	6	473
Increase (decrease) in other liabilities	83	-	83	(339)	-	(339)
Net cash provided by operating activities	2,276	-	2,276	966	-	966

Net cash used in investing activities	(5,369)	-	(5,369)	(2,842)	-	(2,842)

Cash flows from financing activities:
Proceeds from issuance of debt	7,785	-	7,785	4,413	-	4,413
Payments on debt	(4,996)	-	(4,996)	(2,585)	-	(2,585)
Net change in commercial paper	1,693	-	1,693	521	-	521
Net advances from (to) TFSA	(30)	-	(30)	-	-	-
Net cash provided by financing activities	4,452	-	4,452	2,349	-	2,349

Net increase in cash and cash equivalents	1,359	-	1,359	473	-	473

Cash and cash equivalents at the beginning of the period	815	-	815	815	-	815
Cash and cash equivalents at the end of the period	$2,174	$-	$2,174	$1,288	$-	$1,288

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

There is nothing to report with regard to this item.

ITEM 9A. CONTROLS AND PROCEDURES

Restatement

For a description of the restatements, please refer to the “Explanatory Note” at the beginning of this Form 10-K/A and Note 1 to our consolidated financial statements under “Item 8. Financial Statements and Supplementary Data”.

Disclosure Controls and Procedures

We maintain “disclosure controls and procedures” as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (“the Exchange Act”) that are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act, as amended, is recorded, processed, summarized, and reported within the time periods specified by the Securities and Exchange Commission’s (“SEC”) rules and regulations. Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is accumulated and communicated to management including its principal executive and financial officers, as appropriate, to allow timely decisions regarding required disclosure.

In connection with the current and previous restatements and the filing of this annual report on Form 10-K/A, the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) evaluated the effectiveness of our disclosure controls and procedures and concluded they were not effective as of March 31, 2008 due to the material weaknesses identified and described below.

Internal Control over Financial Reporting (Restated)

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or because the degree of compliance with policies or procedures may deteriorate.

Management conducted, under supervision of our CEO and CFO, an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, commonly referred to as the “COSO” criteria. Based on the assessment performed in connection with the current and previous restatements and the filing of this annual report on Form 10-K/A, management concluded that as of March 31, 2008, our internal control over financial reporting was not effective based upon the COSO criteria because of the material weaknesses described below.

- 149 - -

A material weakness is defined as a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis.

Management identified the following material weaknesses in our internal control over financial reporting at March 31, 2008. We did not maintain effective controls over processes to accurately record certain of our derivatives and the related interest expense. We also did not maintain effective controls over processes to accurately record certain of our debt and related interest expense. While the errors in the current and previous restatements were different in nature, we have determined that the lack of effective monitoring of the manual processes associated with these controls contributed to these material weaknesses. The deficiencies resulted in errors in the aforementioned accounts that were not prevented or detected on a timely basis and resulted in restatements of the financial statements for fiscal years ended March 31, 2008, 2007 and 2006, including each of the quarterly periods in those fiscal years. In addition, each of these deficiencies described above could result in a material misstatement of the annual or interim consolidated financial statements that would not be prevented or detected on a timely basis. Accordingly, our management determined that each of these deficiencies constitute a material weakness.

This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this annual report.

Remediation of Material Weakness in Internal Controls

We have examined our current process for recording transactions that resulted in the aforementioned errors and other transactions entered into related to debt and derivative accounting. We will continue to complete the installation of our new debt and derivative accounting system and will continue to evaluate and strengthen our governance and control processes to ensure that financial results are recorded in compliance with GAAP. We will also continue to assess our controls and procedures and will take any further actions that we deem necessary.

We continue to believe that the new debt and derivative accounting system currently being installed represents an improvement in our internal controls as it will automate many functions currently performed manually. We anticipate completing the installation of the new debt and derivative accounting system before the end of this fiscal year but there can be no assurances this will occur.

Additionally with regards to the determination of market values on our derivative portfolio, we will continue to evaluate and strengthen our controls around the accuracy of the inputs used to determine derivative values as well as institute additional monitoring controls.

Changes in Internal Control over Financial Reporting

No changes in our internal control over financial reporting have occurred during the fourth fiscal quarter covered by this report that would have a material effect, or are reasonably likely to have a material effect, on our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

Not applicable.

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

TMCC has omitted certain information in this section pursuant to General Instruction I(2) of Form 10-K.

The following table sets forth certain information regarding the directors and executive officers of TMCC as of July 30, 2008.

Name	Age	Position
George E. Borst	59	Director, President and Chief Executive Officer, TMCC; Director, President and Chief Operating Officer, TFSA; Director, TFSC

Ichiro Yajima	51	Director, Executive Vice President and Treasurer, TMCC; Director, Executive Vice President and Treasurer, TFSA

David Pelliccioni	60	Director, Senior Vice President, Chief Administrative Officer and Secretary, TMCC

John F. Stillo	55	Group Vice President and Chief Financial Officer, TMCC; Group Vice President and Chief Financial Officer, TFSA

Thomas A. Kiel	41	Vice President and Chief Accounting Officer, TMCC

Yukitoshi Funo	61	Director, TMCC; Chairman of the Board of Directors and Chief Executive Officer, TMS; Senior Managing Director, TMC Board of Directors

James E. Lentz III	52	Director, and Secretary, Senior Vice President and Cheif Administrative

Takahiko Ijichi	56	Director, TMCC; Director, TFSC; Senior Managing Director, TMC Board of Directors

Takeshi Suzuki	60	Director, TMCC; Chairman of the Board of Directors and Chief Executive Officer, TFSA; Director, President and Chief Executive Officer, TFSC

Eiji Hirano	57	Director, TMCC; Director and Executive Vice President, TFSC

- 151 - -

All directors of TMCC are elected annually and hold office until their successors are elected and qualified. Officers are elected annually and serve at the discretion of the Board of Directors.

Mr. Borst was named Director, President, and Chief Executive Officer of TMCC in October 2000. Mr. Borst was named Director, President, and Chief Operating Officer of TFSA in April 2004. Mr. Borst was named Director of TFSC in June 2003. From August 2000 to March 2004, Mr. Borst served as Director, Secretary, and Chief Financial Officer of TFSA. Mr. Borst has been employed with TMCC and TMS, in various positions, since 1985.

Mr. Yajima was named Director, Executive Vice President, and Treasurer of TMCC in January 2008 and Director, Executive Vice President, and Treasurer of TFSA in January 2008. From January 2005 to December 2007, Mr. Yajima served as Senior Vice President for Sales Finance Group of Toyota Financial Service Corporation. From January 2004 to December 2004, Mr. Yajima was General Manager for the General Affairs & Human Resources Department of Toyota Finance Corporation. Mr. Yajima has been employed with TMC, in various positions worldwide, since 1980.

Mr. Pelliccioni was named Director and Secretary of TMCC in January, 2002. In July 2008, he was named Senior Vice President and Chief Administrative Officer. From January 2007 to July 2008, Mr. Pelliccioni served as Senior Vice President - Sales, Marketing and Operations. From January 2002 to January 2007, he was Group Vice President – Sales, Marketing and Operations. From August 2001 to January 2002, Mr. Pelliccioni was Vice President – Sales, Marketing and Operations. From May 1999 to August 2001, he was Vice President – Field Operations. Mr. Pelliccioni has been employed with TMCC and TMS, in various positions, since 1988.

Mr. Stillo was named Group Vice President and Chief Financial Officer of TMCC in December 2006. From April 2004 to December 2006, Mr. Stillo was Vice President and Chief Financial Officer of TMCC. Mr. Stillo was named Group Vice President and Chief Financial Officer of TFSA in January 2007. From April 2004 to December 2006, Mr. Stillo was Vice President and Chief Financial Officer of TFSA. From June 2000 to January 2001, Mr. Stillo was Executive Vice President, Investments and Capital Planning at Associates First Capital Corporation.

Mr. Kiel joined TMCC as Chief Accounting Officer in 2004, and was promoted to Vice President and Chief Accounting Officer in December 2006. Prior to joining TMCC, Mr. Kiel served as Senior Vice President – Line of Business Risk Finance Executive at Bank of America Corporation from March 2004 to October 2004, and previously served at Bank of America Corporation as Senior Vice President – Corporate Analysis and Reporting from December 2002 to March 2004, Senior Vice President – Accounting Policy from July 2002 to December 2002, and Vice President – Accounting Policy from April 2000 to June 2002.

Mr. Funo was named Director of TMCC and Chief Executive Officer and Chairman of the Board of Directors of TMS in June 2003. Mr. Funo was named Senior Managing Director of TMC in 2004. In 2000, Mr. Funo was named a Director of TMC, a title that was changed to Managing Officer in 2003. In that role he continued to supervise Toyota’s operations for the Americas and was named Chief Officer, The Americas Operations in June 2007. In 2001, his duties were expanded to include overseeing government and industrial affairs. Mr. Funo has been employed with TMC, in various positions worldwide, since 1970.

- 152 - -

Mr. Lentz was named President of TMS in November 2007. Mr. Lentz is currently a Director of TMCC and TMS and prior to his promotion to President, he served as Executive Vice President of TMS from July 2006 to November 2007. Prior to this, he held the position of Group Vice President of Marketing - Toyota Division. From 2002 to 2005, Mr. Lentz was the Group Vice President and General Manager of Toyota Division. In addition, from 2001 to 2002 Mr. Lentz was the Vice President of Scion. From 2000 to 2001, Mr. Lentz was the Vice President and General Manager of the Los Angeles Region. Mr. Lentz has been employed with TMS, in various positions, since 1982.

Mr. Ijichi was named Director of TMCC and Senior Managing Director of TMC in June 2008. Mr. Ijichi was named Director of TFSC in June 2006. He was named Managing Director of TMC in June 2004. Mr. Ijichi has been employed with TMC, in various positions, since 1976.

Mr. Suzuki was named Director of TMCC in June 2005. In June 2008, Mr. Suzuki was named Chairman of the Board of Directors and Chief Executive Officer of TFSA, and President and Chief Executive Officer of TFSC. From June 2001 to June 2005, he served as Director of TFSA. Mr. Suzuki was named Senior Managing Director of TMC in June 2004. In June 2000, he was named Director of TMC, a title that was changed to Managing Officer in 2003. Mr. Suzuki has been employed with TMC, in various positions, since 1970.

Mr. Hirano was named Director of TMCC in September 2007. He was named Director and Executive Vice President of TFSC in June 2006. From June 2002 to June 2006, he served as Assistant Governor at The Bank of Japan.

- 153 - -

ITEM 11. EXECUTIVE COMPENSATION

TMCC has omitted this section pursuant to General Instruction I(2) of Form 10-K.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

TMCC has omitted this section pursuant to General Instruction I(2) of Form 10-K.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

TMCC has omitted this section pursuant to General Instruction I(2) of Form 10-K.

- 154 - -

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The following table represents aggregate fees billed to us by PricewaterhouseCoopers LLP, our principal accounting firm (dollars in thousands).

	Years ended March 31,
	2008	2007
Audit fees	$3,628	$3,616
Tax fees	580	690
All other fees	331	43
Total fees	$4,539	$4,349

Audit fees billed for fiscal 2008 and 2007 include the audits of our consolidated financial statements included in our Annual Reports on Form 10-K, reviews of our consolidated financial statements included in our Quarterly Reports on Form 10-Q, providing comfort letters and consents in connection with our funding transactions, and assistance with interpretation of various accounting standards.

Tax fees billed in fiscal 2008 and fiscal 2007 primarily include tax reporting software, tax planning services, assistance in connection with tax audits, and a tax compliance system license.

Other fees billed in fiscal 2008 and 2007 include industry research and translation services performed in connection with our funding transactions.

We were not billed for any audit-related fees in either fiscal 2008 or fiscal 2007.

Auditor Fees Pre-approval Policy

The Audit Committee has adopted a formal policy concerning approval of audit and non-audit services to be provided by our independent auditor. The policy requires that all services provided to us by PricewaterhouseCoopers LLP, our independent auditor, including audit services and permitted audit-related and non-audit services, be pre-approved by the Committee. All the services provided in fiscal 2008 and 2007 were pre-approved by the Audit Committee.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a)(1)Financial Statements

Included in Part II, Item 8., “Financial Statements and Supplementary Data” of this

Form 10-K/A on pages 89 through 148.

(b)Exhibits

See Exhibit Index on page 158.

- 155 - -

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Torrance, State of California, on the 30th day of July 2008.

TOYOTA MOTOR CREDIT CORPORATION

By /s/ George E. Borst

George E. Borst

President and

Chief Executive Officer

- 156 - -

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant in the capacities and on the date indicated.

Signature	Title	Date
/s/ George E. Borst George E. Borst	President and Chief Executive Officer and Director (Principal Executive Officer)	July 30, 2008
/s/ Ichiro Yajima Ichiro Yajima	Executive Vice President and Treasurer and Director	July 30, 2008
/s/ David Pelliccioni David Pelliccioni	Director, Senior Vice President, Chief Administrative Officer and Secretary	July 30, 2008
/s/ John F. Stillo John F. Stillo	Group Vice President and Chief Financial Officer (Principal Financial Officer)	July 30, 2008
/s/ Thomas A. Kiel Thomas A. Kiel	Vice President and Chief Accounting Officer (Principal Accounting Officer)	July 30, 2008
/s/ Yukitoshi Funo Yukitoshi Funo	Director	July 30, 2008
/s/ James E. Lentz III James E. Lentz III	Director	July 30, 2008
______________
Takahiko Ijichi	Director
_____________
Takeshi Suzuki	Director
___________
Eiji Hirano	Director

- 157 - -

EXHIBIT INDEX

Exhibit Number	Description	Method of Filing

3.1(a)	Articles of Incorporation filed with the California Secretary of State on October 4, 1982	(1)

3.1(b)	Certificate of Amendment of Articles of Incorporation filed with the California Secretary of State on January 24, 1984	(1)

3.1(c)	Certificate of Amendment of Articles of Incorporation filed with the California Secretary of State on January 25, 1985	(1)

3.1(d)	Certificate of Amendment of Articles of Incorporation filed with the California Secretary of State on September 6, 1985	(1)

3.1(e)	Certificate of Amendment of Articles of Incorporation filed with the California Secretary of State on February 28, 1986	(1)

3.1(f)	Certificate of Amendment of Articles of Incorporation filed with the California Secretary of State on December 3, 1986	(1)

3.1(g)	Certificate of Amendment of Articles of Incorporation filed with the California Secretary of State on March 9, 1987	(1)

3.1(h)	Certificate of Amendment of Articles of Incorporation filed with the California Secretary of State on December 20, 1989	(2)

3.2	Bylaws as amended through December 8, 2000	(3)

4.1	Issuing and Paying Agency Agreement dated August 1, 1990 between TMCC and Bankers Trust Company	(4)

4.2(a)	Indenture dated as of August 1, 1991 between TMCC and The Chase Manhattan Bank, N.A	(5)

4.2(b)	First Supplemental Indenture dated as of October 1, 1991 among TMCC, Bankers Trust Company and The Chase Manhattan Bank, N.A	(6)

(1)	Incorporated herein by reference to the same numbered Exhibit filed with our Registration Statement on Form S-1, File No. 33-22440.

(2)	Incorporated herein by reference to the same numbered Exhibit filed with our Report on Form 10-K for the year ended September 30, 1989, Commission File number 1-9961.

(3)	Incorporated herein by reference to the same numbered Exhibit filed with our Report on Form 10-Q for the quarter ended December 31, 2000, Commission File number 1-9961.

(4)	Incorporated herein by reference to Exhibit 4.2 filed with our Report on Form 10-K for the year ended September 30, 1990, Commission File number 1-9961.

(5)	Incorporated herein by reference to Exhibit 4.1(a), filed with our Registration Statement on Form S-3, File No. 33-52359.

(6)	Incorporated herein by reference to Exhibit 4.1 filed with our Current Report on Form 8-K dated October 16, 1991, Commission File No. 1-9961.

- 158 - -

EXHIBIT INDEX

Exhibit Number	Description	Method of Filing

4.2(c)	Second Supplemental Indenture, dated as of March 31, 2004, among TMCC, JPMorgan Chase Bank (as successor to The Chase Manhattan Bank, N.A.) and Deutsche Bank Trust Company Americas (formerly known as Bankers Trust Company)	(7)

4.3	Agency Agreement, dated September 28, 2007, among Toyota Motor Finance (Netherlands), B.V., Toyota Credit Canada Inc., Toyota Finance Australia and TMCC, The Bank of New York and The Bank of New York (Luxembourg) S.A.	(8)

4.4	TMCC has outstanding certain long-term debt as set forth in Note 11 - Debt of the Notes to Consolidated Financial Statements. Not filed herein as an exhibit, pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K under the Securities Act of 1933 and the Securities Exchange Act of 1934, is any instrument which defines the rights of holders of such long-term debt, where the total amount of securities authorized thereunder does not exceed 10 percent of the total assets of TMCC and its subsidiaries on a consolidated basis. TMCC agrees to furnish copies of all such instruments to the Securities and Exchange Commission upon request

10.1	Five Year Credit Agreement, dated as of March 28, 2007, among Toyota Motor Credit Corporation, Toyota Credit de Puerto Rico Corp., Toyota Credit Canada Inc., Toyota Motor Finance (Netherlands) B.V., Toyota Financial Services (UK) PLC, Toyota Kreditbank GMBH and Toyota Leasing GMBH, as Borrowers, Bank of America, N.A., as Administrative Agent, Swing Line Agent and Swing Line Lender, each lender from time to time party thereto, Citigroup Global Markets Inc and Banc of America Securities LLC, as Joint Lead Arrangers and Joint Book Managers, Citicorp USA, Inc., as Syndication Agent and Swing Line Lender, and The Bank of Tokyo-Mitsubishi UFJ, Ltd., BNP Paribas and JPMorgan Chase Bank, N.A., as Documentation Agents	(9)

(7)	Incorporated herein by reference to Exhibit 4.1(c) filed with our Registration Statement on Form S-3, Commission File No. 333-113680.

(8)	Incorporated herein by reference to Exhibit 4.1 filed with our Current Report on Form 8-K dated September 28, 2007, Commission File Number 1-9961.

(9)	Incorporated herein by reference to Exhibit 10.2 filed with our Current Report on Form 8-K dated April 2, 2007, Commission File No. 1-9961.

- 159 - -

EXHIBIT INDEX

Exhibit Number	Description	Method of Filing

10.3	Credit Support Agreement dated July 14, 2000 between TFSC and TMC	(11)

10.4	Credit Support Agreement dated October 1, 2000 between TMCC and TFSC	(12)

10.5	Amended and Restated Repurchase Agreement dated effective as of October 1, 2000, between TMCC and TMS	(13)

10.6	Shared Services Agreement dated October 1, 2000 between TMCC and TMS	(14)

10.7(a)	Credit Support Fee Agreement dated March 30, 2001 between TMCC and TFSC	(15)

10.7(b)	Amendment No. 1 to Credit Support Fee Agreement dated June 17, 2005 between TMCC and TFSC	(16)

10.8	Form of Indemnification Agreement between TMCC and its directors and officers	(17)
10.9	364 Day Credit Agreement, dated as of March 26, 2008, among Toyota Motor Credit Corporation, Toyota Credit de Puerto Rico Corp., Toyota Credit Canada Inc., Toyota Motor Finance (Netherlands) B.V., Toyota Financial Services (UK) PLC, Toyota Kreditbank GMBH and Toyota Leasing GMBH, as Borrowers, Bank of America, N.A., as Administrative Agent, Swing Line Agent and Swing Line Lender, each lender from time to time party thereto, Citigroup Global Markets Inc and Banc of America Securities LLC, as Joint Lead Arrangers and Joint Book Managers, Citibank, N.A., as Syndication Agent and Swing Line Lender, and The Bank of Tokyo-Mitsubishi UFJ, Ltd., BNP Paribas and JPMorgan Chase Bank, N.A., as Documentation Agents.	(18)

(11)	Incorporated herein by reference to Exhibit 10.9 filed with our Report on Form 10-K for the year ended September 30, 2000, Commission File No. 1-9961.

(12)	Incorporated herein by reference to Exhibit 10.10 filed with our Report on Form 10-K for the year ended September 30, 2000, Commission File No. 1-9961.

(13)	Incorporated herein by reference to Exhibit 10.11 filed with our Report on Form 10-K for the fiscal year ended March 31, 2001, Commission File No. 1-9961.

(14)	Incorporated herein by reference to Exhibit 10.12 filed with our Report on Form 10-K for the year ended September 30, 2000, Commission File No. 1-9961.

(15)	Incorporated herein by reference to Exhibit 10.13(a), respectively, filed with our Report on Form 10-K for the fiscal year ended March 31, 2001, Commission File No. 1-9961.

(16)	Incorporated herein by reference to Exhibit 10.13(b) filed with our Report on Form 10-K for the year ended March 31, 2005, Commission File No. 1-9961.

(17) Incorporated herein by reference to Exhibit 10.6 filed with our Registration Statement on Form S-1,

Commission File No. 33-22440.

(18) Incorporated herein by reference to Exhibit 10.1 filed with our Current Report on Form 8-K dated April 1, 2008.

- 160 - -

EXHIBIT INDEX

Exhibit Number	Description	Method of Filing

12.1	Calculation of ratio of earnings to fixed charges	Filed Herewith

23.1	Consent of Independent Registered Public Accounting Firm	Filed Herewith

31.1	Certification of Chief Executive Officer	Filed Herewith

31.2	Certification of Chief Financial Officer	Filed Herewith

32.1	Certification pursuant to 18 U.S.C. Section 1350	Furnished Herewith

32.2	Certification pursuant to 18 U.S.C. Section 1350	Furnished Herewith

EX-12.1 2 exhibit_12-1.htm EXHIBIT 12.1 - RATIO OF EARNINGS TO FIXED CHARGES exhibit_12-1.htm

EXHIBIT 12.1

TOYOTA MOTOR CREDIT CORPORATION

CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES

(Dollars in millions)

	Years Ended March 31,
	2008	2007	2006	2005	2004
	As Currently Restated	As Previously Restated	As Previously Restated
Consolidated (loss) income before (benefit) provision for income taxes	($380)	$667	$865	$1,243	$1,059
Fixed charges:
Interest1	4,151	2,662	1,561	670	578
Portion of rent expense representative of the interest factor (deemed to be one-third)	8	7	7	7	7
Total fixed charges	4,159	2,669	1,568	677	585
Earnings available for fixed charges	$3,779	$3,336	$2,433	$1,920	$1,644
Ratio of earnings to fixed charges	(A)	1.25	1.55	2.84	2.81

1 Components of interest expense are discussed in the “Interest Expense” section of Item 7., “Management’s Discussion and

Analysis”.

(A) Due to our loss in fiscal year 2008, the ratio coverage was less than one to one. We must generate additional earnings of $380 million to achieve a coverage of one to one.

EX-23.1 3 exhibit_23-1.htm EXHIBIT 23.1 - CONSENT OF INDEPENDENT PUBLIC ACCOUNTING FIRM exhibit_23-1.htm

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (Nos. 333-134443 and 333-132201) of Toyota Motor Credit Corporation of our report dated June 6, 2008, except for the effects of the restatements described in Note 1 to the consolidated financial statements, which are as of July 30, 2008, relating to the consolidated financial statements, which appears in this Form 10-K/A.

/S/ PRICEWATERHOUSECOOPERS LLP

Los Angeles, California

July 30, 2008

EX-31.1 4 exhibit_31-1.htm EXHIBIT 31.1 - 302 CERTIFICATION exhibit_31-1.htm

EXHIBIT 31.1

CERTIFICATIONS

I, George E. Borst, certify that:

1. I have reviewed this annual report on Form 10-K/A of Toyota Motor Credit Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15e and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 30, 2008

By /s/ GEORGE E. BORST

George E. Borst

President and

Chief Executive Officer

EX-31.2 5 exhibit_31-2.htm EXHIBIT 31.2 - 302 CERTIFICATION exhibit_31-2.htm

EXHIBIT 31.2

CERTIFICATIONS

I, John F. Stillo, certify that:

1. I have reviewed this annual report on Form 10-K/A of Toyota Motor Credit Corporation;

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 30, 2008

By /s/ JOHN F. STILLO

John F. Stillo

Group Vice President and

Chief Financial Officer

EX-32.1 6 exhibit_32-1.htm EXHIBIT 32.1 - 906 CERTIFICATION exhibit_32-1.htm

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002*

In connection with the Annual Report of Toyota Motor Credit Corporation (the “Company”) on Form

10-K/A for the period ending March 31, 2008 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, George E. Borst, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By /s/ GEORGE E. BORST

George E. Borst

President and

Chief Executive Officer

July 30, 2008

* A signed original of this written statement required by Section 906 has been provided to Toyota Motor Credit Corporation and will be retained by Toyota Motor Credit Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2 7 exhibit_32-2.htm EXHIBIT 32.2 - 906 CERTIFICATION exhibit_32-2.htm

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002*

In connection with the Annual Report of Toyota Motor Credit Corporation (the “Company”) on Form

10-K/A for the period ending March 31, 2008 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John F. Stillo, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By /s/ JOHN F. STILLO

John F. Stillo

Group Vice President and

Chief Financial Officer

July 30, 2008

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