-----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, U7CK8wotlyJ8VjAfYCauy8J5NMKnKXvAaITjsh45aJBV7I4l/5W1UebVA17viZ1J VpKCI+MCR4tBFP18G9hGaw== 0000834071-95-000043.txt : 19951227 0000834071-95-000043.hdr.sgml : 19951227 ACCESSION NUMBER: 0000834071-95-000043 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951226 SROS: NYSE 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: 0930 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09961 FILM NUMBER: 95604220 BUSINESS ADDRESS: STREET 1: 19001 S WESTERN AVE CITY: TORRANCE STATE: CA ZIP: 90509-2958 BUSINESS PHONE: 3107153700 MAIL ADDRESS: STREET 1: 19001 S WESTERN AVE CITY: TORRANCE STATE: CA ZIP: 90509 10-K 1 SEPTEMBER 30, 1995 ANNUAL REPORT ON FORM 10-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the fiscal year ended September 30, 1995 ------------------ OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] 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 95-3775816 - ---------------------------------------- ----------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 19001 S. Western Avenue Torrance, California 90509 - ---------------------------------------- ----------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (310) 787-1310 ----------------------- Securities registered pursuant to section 12(b) of the Act: Name of each exchange Title of each class on which registered ------------------- ----------------------- 7.55% Fixed Rate Medium-Term Notes due January 30, 1997 New York Stock Exchange - ---------------------------------------- ----------------------- Securities registered pursuant to Section 12(g) of the Act: None 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 or any amendment to this Form 10-K. [X] As of November 30, 1995, the number of outstanding shares of capital stock, par value $10,000 per share, of the registrant was 86,500, all of which shares were held by Toyota Motor Sales, U.S.A., Inc. -1- PART I ITEM 1. BUSINESS. General Toyota Motor Credit Corporation ("TMCC") provides retail leasing, retail and wholesale financing and certain other financial services to authorized Toyota and Lexus vehicle and Toyota industrial equipment dealers and their customers in the United States (excluding Hawaii). TMCC is a wholly owned subsidiary of Toyota Motor Sales, U.S.A., Inc. ("TMS" or the "Parent"). TMS is primarily engaged in the wholesale distribution of automobiles, light trucks, industrial equipment and related replacement parts and accessories throughout the United States (excluding Hawaii). Substantially all of TMS's products are either manufactured by its subsidiaries or are purchased from Toyota Motor Corporation ("TMC"), the parent of TMS, or its affiliates. TMCC was incorporated in California on October 4, 1982, and commenced operations in May 1983. TMCC currently has 34 branches in various locations in the United States. TMCC's retail leasing and retail and wholesale financing programs are currently available in 44 states for Toyota vehicles and 49 states for Lexus vehicles. TMCC has five wholly owned subsidiaries, four of which are engaged in the insurance business and one limited purpose subsidiary formed primarily to acquire and securitize retail finance receivables. See Item 14, Exhibit 21.1. TMCC and its subsidiaries are collectively referred to as the "Company". An operating agreement between TMCC and TMS (the "Operating Agreement"), dated January 16, 1984, provides that TMCC will establish its own financing rates and is under no obligation to TMS to finance wholesale obligations from any dealers or retail obligations of any customers. In addition, pursuant to the Operating Agreement, TMS will arrange for the repurchase of new Toyota and Lexus vehicles financed at wholesale by TMCC at the aggregate cost financed in the event of dealer default. The Operating Agreement also specifies that TMS will retain 100% ownership of TMCC as long as TMCC has any funded debt outstanding and that TMS will make necessary equity contributions or provide other financial assistance TMS deems appropriate to ensure that TMCC maintains a minimum coverage on fixed charges of 1.25 times such fixed charges in any fiscal quarter. The Operating Agreement does not constitute a guarantee by TMS of any obligations of TMCC. The fixed charge coverage provision of the Operating Agreement is solely for the benefit of the holders of TMCC's commercial paper, and the Operating Agreement may be amended or terminated at any time without notice to, or the consent of, holders of other TMCC obligations. Vehicle Leasing and Retail Financing Leasing consists primarily of purchasing new vehicles leased to retail customers by Toyota and Lexus dealers and certain used vehicles. TMCC holds title to vehicles it leases and generally is permitted to take possession of a vehicle upon default by the lessee. TMCC does not normally finance more than 105% of the vehicle's Manufacturer's Suggested Retail Price and accessories plus taxes, license fees and other fees. The present program is a closed-end program, with lease terms typically ranging from 24 to 60 months. Under the program, the lessee is granted an option to purchase the vehicle at lease termination, and the dealer is granted the same option if the lessee elects to return the vehicle. The purchase price is established at the -2- beginning of the lease and is based upon the estimated residual value of the vehicle. Residual value risk on leased vehicles, which is directly assumed by TMCC, is a function of the number of off-lease vehicles returned to TMCC for disposition, and the difference between the amount of disposition proceeds and the estimated residual value on returned vehicles. Off-lease vehicles returned to TMCC are transported to various auction sites throughout the United States and sold. TMCC requires lessees to carry fire, theft and collision insurance on leased vehicles covering the interests of both TMCC and the lessee. In addition, TMCC requires lessees to carry specified levels of liability insurance. New vehicle leases constituted approximately 99% of all vehicle lease earning assets at September 30, 1995. Vehicle lease earning assets represented approximately 57% of total assets at September 30, 1995. Retail financing consists of purchasing installment contracts covering the sales of new Toyota and Lexus vehicles and certain used vehicles. TMCC acquires a security interest in the vehicles it finances and recovery of vehicles typically is permitted upon default, subject to various requirements of law. TMCC does not normally finance more than the dealer cost of a vehicle and accessories plus taxes, license fees and other fees, and premiums refundable to TMCC in the event of contract termination. Typically, contract terms range from 36 to 60 months for new vehicles and from 24 to 60 months for used vehicles depending on the age of the vehicle. TMCC has both recourse and non-recourse retail financing programs available to dealers. Dealers participating in the non-recourse program are charged a higher discount rate but do not have any financial responsibility for repossessions. As a result of competitive market factors, substantially all of TMCC's retail financings have been non-recourse. TMCC requires retail financing customers to carry fire, theft and collision insurance on financed vehicles covering the interests of both TMCC and the customer. In the event the customer fails to maintain such insurance, TMCC has the right to obtain collateral protection insurance. New vehicle retail finance receivables constituted approximately 79% of all vehicle retail finance receivables at September 30, 1995. Vehicle retail finance receivables represented approximately 28% of total assets at September 30, 1995. Effective November 1, 1994, the Company discontinued the origination of retail finance receivables for Toyota vehicles through an independent finance company in five southeastern states. The existing portfolio that was originated on TMCC's behalf by the independent finance company will continue to be serviced by the independent finance company. The Company does not expect the discontinuation of Toyota retail installment contract originations in the five states to have a material adverse effect on the Company's financial condition or results of operations. -3- A summary of vehicle leasing and retail financing activity follows:
Years Ended September 30, ------------------------------------------------ 1995 1994 1993 1992 1991 -------- -------- -------- -------- -------- Contract volume: New vehicles......... 303,000 350,000 256,000 237,000 192,000 Used vehicles........ 46,000 64,000 56,000 56,000 52,000 -------- -------- -------- -------- -------- Total............. 349,000 414,000 312,000 293,000 244,000 ======== ======== ======== ======== ======== Average amount financed: New vehicles......... $21,000 $19,900 $17,900 $16,700 $14,600 Used vehicles........ $14,000 $12,600 $10,400 $9,400 $8,500 Outstanding portfolio at period end ($Millions): New vehicles...... $12,852 $11,603 $8,167 $6,910 $5,285 Used vehicles..... $942 $1,128 $877 $837 $695 Number of accounts 946,000 929,000 750,000 735,000 638,000
The outstanding balance of the sold retail finance receivables which TMCC continues to service (not included in the above table) totaled $762 million and $251 million, representing approximately 101,000 and 41,000 accounts, at September 30, 1995 and 1994, respectively. Vehicle Wholesale Financing TMCC provides wholesale financing through a floating interest rate program that assists Toyota and Lexus dealers, with approved lines of credit, in carrying inventories of new Toyota and Lexus vehicles. Typically, financing is provided for up to 100% of the dealer invoice value of new vehicles. Dealers are required to make principal reductions with respect to specific vehicles financed based on time in inventory or use as a customer demonstrator. Used vehicle inventory financing is also offered, but financing is subject to certain limitations. TMCC acquires security interests in the vehicles it finances at wholesale, and substantially all such financings are backed by corporate or individual guarantees from or on behalf of participating dealers. In the event of a dealer default, TMCC has the right to liquidate any assets acquired and seek legal remedies pursuant to the guarantees. TMCC has no right, however, to recover a vehicle sold by a dealer to a bona fide retail buyer and is limited to the remedies under its wholesale financing agreement with the dealer. Pursuant to the Operating Agreement, TMS will arrange for the repurchase of new Toyota and Lexus vehicles financed at wholesale by TMCC at the aggregate cost financed in the event of a dealer default. At September 30, 1995, finance receivables related to new vehicle inventory financing represented approximately 92% of TMCC's total vehicle wholesale finance receivables. Vehicle wholesale finance receivables represented approximately 5% of total assets at September 30, 1995. -4- A summary of vehicle wholesale financing activity follows:
Years Ended September 30, ------------------------------------------------ 1995 1994 1993 1992 1991 -------- -------- -------- -------- -------- Dealer loans ($Millions)....... $7,626 $7,055 $6,378 $4,903 $3,409 Dealer repayments ($Millions).. $7,444 $7,032 $6,152 $4,745 $3,264 Average amount financed per vehicle................. $18,999 $17,530 $16,500 $15,400 $14,200 Outstanding portfolio at period end ($Millions)...... $886 $727 $703 $486 $339
Credit Losses Credit losses are an expected cost in the business of extending credit and are considered in TMCC's rate-setting process. TMCC's objective is to minimize credit losses while providing financing support for the sale of Toyota and Lexus products. TMCC's credit losses to date have been primarily from lease and retail installment contracts. Allowances for credit losses are established based primarily on historical loss experience. Other factors affecting collectibility are also evaluated in determining the amount to be provided. Upon repossession of the collateral for a delinquent account, losses are charged to the allowance for credit losses and the estimated realizable value of the asset is reclassified to Other Assets. When it has been determined that the collateral cannot be recovered, losses are charged to the allowance for credit losses. Recoveries are credited to the allowance for credit losses. -5- An analysis of the allowance for credit losses follows:
Years ended September 30, ------------------------------------ 1995 1994 1993 1992 1991 ---- ---- ---- ---- ---- (Dollars in Millions) Allowance for credit losses at beginning of period......... $164 $121 $107 $ 89 $70 Provision for credit losses....... 58 78 54 68 68 Charge-offs, net of recoveries.... (51) (35) (40) (50) (49) ---- ---- ---- ---- --- Allowance for credit losses at end of period............... $171 $164 $121 $107 $89 ==== ==== ==== ==== === Allowance as a percent of net investments in operating leases and net receivables outstanding.................... 1.10% 1.16% 1.17% 1.22% 1.31% Losses as a percent of average net investments in operating leases and average gross receivables outstanding........ .33% .28% .37% .56% .69% Aggregate balances at end of period for lease rentals and installments 60 or more days past due.......... $20 $15 $16 $23 $24 Aggregate balances at end of period for lease rentals and installments 60 or more days past due as a percent of net investments in operating leases and gross receivables outstanding.................... .12% .10% .14% .23% .31%
Other Activities The Company considers its primary business to be retail leasing and retail and wholesale financing of vehicles. During fiscal 1995, 1994 and 1993, the Company derived approximately 8%, 9% and 10%, respectively, of its total revenues from operations other than its primary business. Operations other than the Company's primary business include business related to the Company's insurance subsidiaries and non-vehicle financing programs. The insurance subsidiaries provide certain insurance services along with certain insurance and contractual coverages related to the sale of vehicles. In addition, the insurance subsidiaries insure and reinsure certain TMS and TMCC risks. See Item 13. In June 1993, a limited purpose subsidiary, Toyota Motor Credit Receivables Corporation ("TMCRC"), was formed primarily to acquire retail finance receivables from TMCC for the purpose of securitizing such -6- receivables. In the fourth quarter of fiscal 1995, the Company sold approximately $679 million of retail finance receivables, subject to limited recourse provisions. See Note 6 to the Consolidated Financial Statements in Item 8. TMCC provides financing of new vehicles for daily rental fleets belonging to Toyota and Lexus dealers, independent fleet operators and retail leasing companies owned by Toyota and Lexus dealers. Real estate and working capital loans are also provided by TMCC to Toyota and Lexus vehicle dealers. TMCC also provides wholesale financing as well as retail installment financing and leasing to authorized Toyota industrial equipment dealers and their customers in the United States (excluding Hawaii). Competition and Government Regulations The automobile finance industry in the United States is very competitive. Commercial banks, savings and loan associations, credit unions, finance companies and other captive automobile finance companies provide leasing and retail financing for new and used vehicles. Commercial banks and other captive automobile finance companies also provide wholesale financing for Toyota and Lexus dealers. TMCC's strategy is to supplement, with competitive financing programs, the overall commitment of TMS to offer a complete package of services to authorized Toyota and Lexus dealers and their customers. The finance and insurance operations of the Company are regulated under both federal and state law. The degree and nature of regulation varies from state to state. A majority of the states 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 TMCC's operations in these states if TMCC is unable to pass on the increased interest costs to its customers. The Company's operations are also subject to regulation under federal and state consumer protection statutes. The Company continually reviews its operations to comply with applicable law. Future administrative rulings, judicial decisions and legislation in this area may require modification of the Company's business practices and documentation. Employee Relations At November 30, 1995, the Company had approximately 1,969 full-time employees. The Company considers its employee relations to be satisfactory. -7- Toyota Motor Sales, U.S.A., Inc. TMS, a wholly owned subsidiary of TMC, was established in 1957 and is primarily engaged in the wholesale distribution of automobiles, light trucks, industrial equipment and related replacement parts and accessories throughout the United States (excluding Hawaii). Additionally, TMS exports automobiles and related replacement parts and accessories to Europe, Asia and United States territories. TMS also manufactures certain automobiles through Toyota Motor Manufacturing, U.S.A., Inc., a subsidiary owned 80% by TMS and 20% by TMC, and began truck manufacturing operations in the United States in 1991 through TABC, Inc., a wholly owned subsidiary. TMS's corporate headquarters are in Torrance, California, and TMS has port facilities, regional sales offices and parts distribution centers at other locations in the United States. Toyota vehicles are distributed throughout the United States in twelve regions, ten of which are operated by or through TMS. Previously, these ten regions were operated by or through Toyota Motor Distributors, Inc. ("TMD"), a wholly owned subsidiary of TMS. Effective October 1, 1995, TMD was merged into TMS. The remaining two regions are serviced by private distributors who purchase directly from TMS and distribute to Toyota dealers within their respective regions. For the year ended September 30, 1995, these two distributors, Gulf States Toyota, Inc. of Houston, Texas and Southeast Toyota Distributors, Inc. of Deerfield Beach, Florida, accounted for approximately 31% of the Toyota vehicles sold in the United States (excluding Hawaii). Lexus vehicles are directly distributed by TMS to Lexus dealers throughout the United States (excluding Hawaii). For the year ended September 30, 1995, TMS sold approximately 1,078,000 automobiles and light trucks in the United States (excluding Hawaii), of which approximately 526,000 were manufactured in the United States, and exported approximately 65,000 automobiles. TMS sales represented approximately 27% of TMC's worldwide sales volume for the year ended March 31, 1995. For the years ended September 30, 1995 and 1994, Toyota and Lexus vehicles accounted for approximately 7.2% and 7.1%, respectively, of all retail automobile and light truck sales in the United States. Total revenues for TMS (together with its consolidated subsidiaries) for the fiscal years ended September 30, 1995, 1994 and 1993, aggregated approximately $26.2 billion, $23.3 billion and $20.9 billion, respectively, of which approximately $23.7 billion, $21.5 billion and $19.5 billion, respectively, were attributable to revenues other than those associated with financial services. At September 30, 1995, 1994 and 1993, TMS had total assets of approximately $21.1 billion, $19.5 billion and $15.8 billion, respectively, and net worth in excess of $4.6 billion, $4.3 billion and $4.1 billion, respectively. TMS had net income in excess of $250 million in each of its last three fiscal years. -8- ITEM 2. PROPERTIES. The headquarters of the Company is in Torrance, California and its 34 branch offices are located in various cities throughout the United States. At September 30, 1995, all of the Company's offices were in leased facilities and were occupied. The Company has periodically expanded or relocated existing offices to meet current or anticipated needs. From time to time, the Company has also opened additional branch offices to better serve its customers. The Company anticipates being able to continue to obtain adequate space to conduct its business. ITEM 3. LEGAL PROCEEDINGS. Various legal actions, governmental proceedings and other claims are pending or may be instituted or asserted in the future against TMCC and its subsidiaries with respect to matters arising from the ordinary course of business. Certain of these actions are or purport to be class action suits. Certain of these actions are similar to suits which have been filed against other financial institutions and captive finance companies. At this time, the Company believes any resulting liability from the above legal actions, proceedings and other claims will not materially affect its consolidated financial position or results of operations. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not applicable. PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. All of TMCC's capital stock is owned by TMS and there is no trading market for such stock. No dividends have been declared or paid to date. -9- ITEM 6. SELECTED FINANCIAL DATA. The following selected financial data for the five years ended September 30, 1995 has been derived from financial statements audited by Price Waterhouse LLP, independent accountants. The following information should be read in conjunction with the audited financial statements and notes thereto included in Item 8 and with Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations.
Years Ended September 30, -------------------------------------- 1995 1994 1993 1992 1991 ------ ------ ------ ------ ------ (Dollars in Millions) INCOME STATEMENT DATA Financing Revenues: Leasing........................... $1,904 $1,230 $ 747 $447 $216 Retail financing.................. 431 413 468 485 446 Wholesale and other dealer financing............... 121 86 80 65 64 ------ ------ ------ ---- ---- Total financing revenues.......... 2,456 1,729 1,295 997 726 Interest expense.............. 716 486 454 450 390 Depreciation on operating leases.. 1,232 735 381 178 42 ------ ------ ------ ---- ---- Net financing revenues............ 508 508 460 369 294 Other revenues.................... 108 95 77 53 39 ------ ------ ------ ---- ---- Net Financing Revenues and Other Revenues............. 616 603 537 422 333 ------ ------ ------ ---- ---- Expenses: Operating and administrative...... 258 232 228 179 130 Provision for credit losses....... 58 78 54 68 68 ------ ------ ------ ---- ---- Total Expenses.................... 316 310 282 247 198 ------ ------ ------ ---- ---- Income before income taxes........ 300 293 255 175 135 Provision for income taxes........ 117 118 97 68 52 ------ ------ ------ ---- ---- Net Income........................ $ 183 $ 175 $ 158 $107 $ 83 ====== ====== ====== ==== ====
- ----------------- (Table Continued) -10-
September 30, ------------------------------------------------ 1995 1994 1993 1992 1991 ------- ------- ------ ------ ------ (Dollars in Millions) BALANCE SHEET DATA Investments in operating leases, net............ $8,148 $6,215 $3,050 $1,699 $604 Finance receivables, net.. $7,141 $7,776 $7,206 $6,983 $6,070 Total assets.............. $16,138 $14,733 $11,159 $9,444 $7,138 Notes and loans payable... $12,696 $11,833 $8,833 $7,705 $5,816 Capital stock......... $865 $865 $680 $630 $550 Retained earnings..... $844 $662 $487 $329 $222 RATIO OF EARNINGS TO FIXED CHARGES.. 1.42 1.60 1.56 1.39 1.34 - ---------------- To maintain the fixed charge coverage at the level specified in the Operating Agreement, TMS on occasion, has made noninterest-bearing advances and income maintenance payments to TMCC. No such noninterest-bearing advances and income maintenance payments were made in fiscal 1995, 1994, 1993, 1992 and 1991. $10,000 par value per share. The Company has paid no dividends to date. The ratio of earnings to fixed charges was computed by dividing (i) the sum of income before income taxes and fixed charges by (ii) fixed charges. Fixed charges consist primarily of interest expense net of the effect of noninterest-bearing advances. The ratio of earnings to fixed charges for TMS and subsidiaries was 1.74, 1.90, 2.07, 1.83 and 2.54 for the years ended September 30, 1995, 1994, 1993, 1992 and 1991, respectively. In March 1987, TMCC guaranteed payments of principal and interest on $58 million principal amount of bonds issued in connection with the Kentucky manufacturing facility of an affiliate. As of September 30, 1995, TMCC has not incurred any fixed charges in connection with such guarantee and no amount is included in any ratio of earnings to fixed charges. See Item 13.
-11- ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Introduction The earnings of TMCC are primarily affected by interest margins and the average outstanding balance of earning assets and borrowing levels. The interest rates implicit in leases and charged on retail finance receivables are fixed at the time acquired. Yields on the majority of wholesale receivables and other loans to dealers vary with changes in short-term interest rates. Funding requirements are primarily met through net cash provided by operating activities, earning asset liquidations and the issuance of debt obligations of varying terms at both fixed and floating interest rates. TMCC utilizes interest rate swap agreements and cross currency interest rate swap agreements as part of its financing activities and in managing its cost of borrowings. The Company's business is dependent upon the sale of Toyota and Lexus vehicles in the United States. Lower levels of sales of such vehicles resulting from governmental action, decline in demand, changes in pricing due to the appreciation of the Japanese yen against the United State dollar, or other events, could result in a reduction in the level of finance and insurance operations of the Company. To date, the level of the Company's operations has not been restricted by the level of sales of Toyota and Lexus vehicles. Financial Condition and Results of Operations TMCC's earning assets, consisting of investments in operating leases and finance receivables, totaled $15.5 billion at September 30, 1995, compared to $14.2 billion at September 30, 1994. The increase in earning assets was primarily the result of growth in lease earning assets. Lease earning assets, consisting of lease finance receivables, net of unearned income, and investments in operating leases, net of accumulated depreciation, totaled $9.5 billion and $7.7 billion at September 30, 1995 and 1994, respectively. Lease earning assets increased from September 30, 1994 primarily due to operating lease additions exceeding operating lease dispositions as a result of the effect of special lease programs sponsored by TMS and the increased acceptance of leasing by retail consumers. The Company anticipates further growth in lease earning assets as special lease programs and the increased acceptance of leasing by retail consumers continue. Retail finance receivables, net of unearned income, were $4.7 billion and $5.4 billion at September 30, 1995 and 1994, respectively. Retail finance receivables decreased from September 30, 1994 primarily due to the sale of approximately $679 million of retail finance receivables in the fourth quarter of fiscal 1995. Wholesale receivables and other dealer loans were $1.2 billion at September 30, 1995 and $1.1 billion at September 30, 1994. The increase in these receivables resulted primarily from the higher average receivables balance outstanding per dealer. -12- Contract volume related to TMCC's vehicle leasing and retail financing programs is summarized below:
Years Ended September 30, ----------------------------- 1995 1994 1993 ------- ------- ------- Contract volume: Vehicle lease contracts............... 179,000 204,000 112,000 Vehicle retail installment contracts.. 170,000 210,000 200,000 ------- ------- ------- Total.............................. 349,000 414,000 312,000 ======= ======= =======
Total contract volume decreased in fiscal 1995 due to declines in vehicle lease and retail installment contract volume. The vehicle lease contract volume decrease was due to a decline in the level of Toyota special lease programs sponsored by TMS which was partially offset by increases in the level of vehicle lease contract volume under programs not sponsored by TMS. The decrease in vehicle retail installment contract volume was primarily due to increased competition in new and used vehicle financing, and to a lesser extent, discontinuing the origination of Toyota retail installment contracts through an independent finance company. Although further declines in new and used vehicle financing are possible, the Company has taken various steps to enhance both programs' competitive positions. Total contract volume increased in fiscal 1994 due primarily to the increased leasing of both Toyota and Lexus vehicles. The increased leasing was primarily attributable to the growth in special lease programs sponsored by TMS and the increased acceptance of leasing in the vehicle retail sales market. Under special programs sponsored by TMS, TMCC offers reduced monthly payments on certain Toyota and Lexus new vehicles and Toyota industrial equipment to qualified lease and retail customers and receives an amount from TMS, and in some cases, dealers, for each lease and retail installment contract. Amounts received approximate the balances required by TMCC to maintain revenues at standard program levels and are earned over the expected lease and retail installment contract terms. The level of sponsored program activity varies based on TMS marketing strategies. Revenues earned depend not only on the level of TMS programs offered, but on the mix of Toyota and Lexus vehicles, the timing of TMS programs, and the amount of reduced monthly payments determined by TMS. TMCC's revenues earned in fiscal 1995, 1994 and 1993 related to all TMS programs were $134 million, $54 million and $25 million, respectively. -13- TMCC leased or financed ("finance penetration") the following percentages of new Toyota and Lexus vehicle deliveries (excluding fleet) in the United States (excluding Hawaii):
Years Ended September 30, ----------------------------- 1995 1994 1993 ------- ------- ------- Finance penetration...................... 31.8% 36.7% 27.1%
Total finance penetration decreased in fiscal 1995 primarily due to a decline in the level of special lease programs and increased in fiscal 1994 primarily due to an increase in the level of special lease programs. Total financing revenues increased 42% in fiscal 1995 and 34% in fiscal 1994. The increases resulted primarily from earning asset growth. During fiscal 1995 and 1994, TMCC's primary source of revenue and earning asset growth was leasing. Leasing revenues increased 55% and 65% in fiscal 1995 and 1994, respectively, primarily due to growth in average lease earning assets. The Company anticipates further growth in leasing revenues as special lease programs sponsored by TMS and the increased acceptance of leasing by retail consumers are expected to continue to result in increases in lease earning assets. Retail financing revenues increased 4% in fiscal 1995 and decreased 12% in fiscal 1994. The increase in revenues in fiscal 1995 resulted from the growth in average retail finance receivables outstanding partially offset by a decrease in portfolio yields. The decrease in revenues in fiscal 1994 was due to a decrease in portfolio yields. The decrease in portfolio yields resulted from lower yielding contracts replacing liquidating higher yielding contracts. Lower yielding contracts are the result of the effect of competitive market conditions. Wholesale and other dealer financing revenues increased 41% in fiscal 1995 and 8% in fiscal 1994. The increased revenues in fiscal 1995 resulted primarily from higher average wholesale receivable balances and increases in wholesale financing rates. The increased revenues in fiscal 1994 resulted primarily from higher average wholesale receivable balances. Interest expense increased 47% in fiscal 1995, compared with a 7% increase in fiscal 1994. The increase in fiscal 1995 resulted from higher average borrowing levels required to fund the growth in earning assets and increases in the average cost of borrowings. The increase in fiscal 1994 resulted from higher average borrowing levels required to fund the growth in earning assets which was substantially offset by decreases in the average cost of borrowings. The decreases in the average cost of borrowings resulted primarily from lower fixed rate borrowings replacing maturing higher fixed rate borrowings. The weighted average cost of borrowings was 5.78%, 4.94% and 5.57% for the years ended September 30, 1995, 1994 and 1993, respectively. -14- Depreciation on operating leases increased 68% and 93% in fiscal 1995 and 1994, respectively, as a result of growth in investments in operating leases. The Company anticipates higher depreciation on operating leases in fiscal 1996 due to anticipated growth in investments in operating leases. Investments in operating leases are recorded at cost and depreciated, primarily on a straight-line basis over the lease term to the estimated residual value. Finance leases are recorded at cost and amortized using the effective yield method to the estimated residual value. The estimated residual value may be less than the purchase option price established at lease inception. The estimated residual values are derived by vehicle model and lease term from, among other things, market information on sales of used vehicles, historical information, including lease vehicle return trends, and economic factors. Residual values totaled approximately $6.6 billion and $4.8 billion at September 30, 1995 and 1994, respectively. TMCC's residual value risk is a function of the number of off-lease vehicles returned to TMCC for disposition, and the difference between the amount of disposition proceeds and the estimated residual value on returned vehicles. TMCC actively manages the disposition of its lease vehicles by working with lessees, dealers and auctions through end-of-lease-term remarketing programs. In addition, lease vehicles scheduled to mature are inspected and lessees are charged for excess wear and tear, excess mileage and any damages to the vehicle. During fiscal 1995, 1994 and 1993, approximately 11%, 12% and 15%, respectively, of lease vehicles originally scheduled to mature in those years were returned to TMCC. The difference between the total disposition proceeds from off-lease vehicles returned to TMCC and their estimated residual values was not material to the results of operations for each of the three years ended September 30, 1995. As the lease portfolio matures, management anticipates that the level of vehicle lease returns will increase; however, management believes that its lease earning assets are recorded at net realizable value. Net financing revenues remained relatively level in fiscal 1995 as the increase in the level of earning assets was offset by declining interest margins. Net financing revenues increased 10% in fiscal 1994 as the growth in the level of earning assets was partially offset by declining interest margins. Interest margin is the excess of the combined interest rate yield implicit in leases and on finance receivables over the effective interest rate cost of total borrowings. Lower interest margins in fiscal 1995 were the result of lower portfolio yields on lease and retail installment contracts and higher average borrowing costs as compared to fiscal 1994. Lower interest margins in fiscal 1994 were the result of portfolio yields on lease and retail installment contracts decreasing more rapidly than the decline in average borrowing costs. Other revenues increased 14% in fiscal 1995 and 23% in fiscal 1994. The increase in other revenues in fiscal 1995 was primarily due to growth in the Company's insurance operations. The increase in other revenues in fiscal 1994 resulted from the growth in the Company's insurance operations and from servicing and other income related to the retail finance receivables sold in fiscal 1993. Operating and administrative expenses increased 11% and 2% in fiscal 1995 and 1994, respectively. These increases reflected costs for the growth in the Company's insurance operations and costs for additional personnel and other -15- resources required to service the Company's growing customer base. The Company anticipates that operating and administrative expenses for fiscal 1996 will continue to increase as a result of the Company's growing customer base. The provision for credit losses decreased 26% in fiscal 1995 and increased 44% in fiscal 1994. The decrease in fiscal 1995 was due to the effect of the sale of retail finance receivables, a decline in the level of earning asset growth and a change in allowance levels. The provision for credit losses excludes the limited recourse loss provision for the sold receivables which was netted against the gain recognized on the sale of finance receivables. The allowance levels declined as a result of changes in the mix of earning assets and the Company's low credit loss experience. The provision for credit losses increased 44% in fiscal 1994 as a result of the increased growth in the level of earning assets partially offset by favorable credit loss experience. The favorable trend in credit loss experience is attributable, in part, to enhanced credit granting procedures, collection efforts and the mix in earning assets. The Company continues to experience low credit loss levels and will continue to place emphasis on controlling its credit loss exposure; however, there are no assurances that the low credit loss levels will continue. Operating profits (reflected as "Income before income taxes") increased 2% in fiscal 1995 and 15% in fiscal 1994. The increase in operating profits and net income in fiscal 1995 was primarily due to a decline in the provision for credit losses offset by increases in operating expenses. The increase in operating profits and net income in fiscal 1994 was primarily the result of the growth in the level of earning assets, decreases in the average cost of borrowings and favorable credit loss experience. Financial support is provided by TMS, as necessary, to maintain TMCC's minimum fixed charge coverage at the level specified in the Operating Agreement. As a result of the favorable operating profits in both fiscal 1995 and 1994, TMCC did not receive any financial support from TMS. See Item 13. Liquidity and Capital Resources The Company requires, in the normal course of business, substantial funding to support the level of its earning assets. Significant reliance is placed on the Company's ability to obtain debt funding in the capital markets in addition to funding provided by earning asset liquidations and cash provided by operating activities. Debt issuances have generally been in the form of commercial paper, United States and Euro medium-term notes ("MTNs"), Eurobonds and to a lesser extent, the sale of retail finance receivables in the asset backed securities market. On occasion, this funding has been supplemented by loans and equity contributions from TMS. Commercial paper issuances and borrowings from TMS are specifically utilized to meet short-term funding needs. Commercial paper outstanding under TMCC's commercial paper program ranged from approximately $1.0 billion to $2.6 billion during fiscal 1995, with an average outstanding balance of $1.8 billion. For additional liquidity purposes, TMCC maintains syndicated bank credit facilities with certain banks which aggregated $1.5 billion at September 30, 1995. No loans were outstanding under any of these bank credit facilities during fiscal 1995. TMCC also maintains, along with TMS, uncommitted, unsecured lines of credit with banks totaling $300 million to facilitate the issuance of letters of credit. At September 30, 1995, approximately $86 million in letters of credit had been issued, primarily related to the Company's insurance operations. -16- On occasion, TMS makes interest-bearing loans to TMCC. The interest rate charged by TMS to TMCC for these interest-bearing loans approximates the Federal Reserve Board's one-month commercial paper composite rate for firms whose bonds are rated AA. The average outstanding balance of loans from TMS during fiscal 1995 was not material. Long-term funding requirements are met through the issuance of a variety of debt securities underwritten in both the United States and international capital markets. United States and Euro MTNs with original maturities ranging from one to ten years have provided TMCC with a significant source of funding. During fiscal 1995, TMCC issued approximately $3.8 billion of MTNs of which approximately $3.4 billion had original maturities of more than one year. TMCC had approximately $8.7 billion of MTNs outstanding at September 30, 1995, including the effect of foreign currency translation at September 30, 1995 spot exchange rates. Approximately $3.6 billion of the $8.7 Billion in MTNs was denominated in foreign currencies. In addition to MTNs, TMCC had approximately $2.5 billion of debt securities outstanding in the international capital markets at September 30, 1995, including the effect of foreign currency translations at September 30, 1995 spot exchange rates, issued principally in the form of Eurobonds. Approximately $2.0 billion of the $2.5 billion in debt securities was denominated in foreign currencies. TMCC anticipates continued use of MTNs in both the United States and international capital markets. At November 30, 1995, approximately $1.6 billion was available for issuance under TMCC's United States public MTN program. In July 1995, the Company expanded the maximum aggregate principal amount authorized to be outstanding at any time under TMCC's Euro MTN program from $6.5 billion to $9.5 billion. Approximately $3.2 billion was available for issuance under the Euro MTN program as of November 30, 1995, of which the Company has committed to issue approximately $200 million. The United States and Euro MTN programs may be expanded from time to time to allow for the continued use of these sources of funding. In addition, approximately $700 million of securities registered with the Securities and Exchange Commission, excluding MTNs, were available for issuance at November 30, 1995. Cash flows provided by operating, investing and financing activities have been used primarily to support earning asset growth. Cash provided by the liquidation of earning assets, totaling $11.9 billion and $10.8 billion during fiscal 1995 and 1994, respectively, was used to purchase additional investments in operating leases and finance receivables, totaling $15.1 billion and $15.3 billion during fiscal 1995 and 1994, respectively. Additionally, in the fourth quarter of fiscal 1995, the Company generated proceeds of $653 million from the sale of a pool of retail finance receivables. Investing activities resulted in a net use of cash of $2.7 billion and $4.5 billion in fiscal 1995 and 1994, respectively, as the purchase of additional earning assets, primarily investments in operating leases, exceeded cash provided by the liquidation of earning assets. Investing activities were also supported by net cash provided by operating activities totaling $1.8 billion and $1.3 billion during fiscal 1995 and 1994, respectively, and net cash provided by financing activities totaling $0.7 billion and $3.0 billion, during fiscal 1995 and 1994, respectively. The Company believes that cash provided by operating, investing and financing activities will be sufficient to meet the Company's liquidity and capital resource needs in the future. -17- TMCC utilizes derivative financial instruments to manage its currency exchange rate risk arising as a result of borrowings denominated in foreign currencies and its interest rate risk. The underlying notional amounts of the derivative financial instruments are not exchanged and do not represent exposure to credit loss. TMCC does not enter into these instruments for trading purposes. TMCC manages counterparty risk through the use of credit standard guidelines, counterparty diversification and financial condition monitoring. At September 30, 1995, approximately 82% of TMCC's derivative financial instruments, based on notional amounts, were with commercial banks and investment banking firms assigned investment grade ratings of "AA" or better by national rating agencies. TMCC does not anticipate non-performance by any of its counterparties. The credit exposure of TMCC's derivative financial instruments at September 30, 1995 was $509 million on an aggregate notional amount of $17.4 billion. TMCC utilizes cross currency interest rate swap agreements to manage exposure to exchange rate fluctuations on principal and interest payments for borrowings denominated in foreign currencies. Debt issued in foreign currencies is hedged by concurrently executed cross currency interest rate swap agreements. These cross currency interest rate swap agreements involve agreements to exchange TMCC's foreign currency principal and interest obligations for U.S. dollar obligations at agreed-upon currency exchange rates and interest rates. In the event that a counterparty fails to perform, TMCC's credit exposure is limited to the currency exchange and interest rate differential between the non-performing swap and the corresponding debt transaction. TMCC utilizes interest rate swap agreements and option-based products in managing its exposure to interest rate fluctuations. The mix of fixed and floating interest rates on TMCC's debt outstanding is periodically adjusted through the use of interest rate swap agreements and other option-based products. Interest rate swap agreements are executed as an integral part of specific debt transactions or on a portfolio basis. TMCC's interest rate swap agreements involve agreements to pay at a certain fixed or floating rate and to receive payments at a different rate, at specified intervals, calculated on an agreed-upon notional amount. In the event that a counterparty fails to perform, TMCC's credit exposure is limited to the interest rate differential. Option-based products consist primarily of purchased interest rate cap agreements and, to a lesser extent, corridor agreements. An interest rate increase of 1% (100 basis points) would raise TMCC's weighted average interest rate, including the effects of interest rate swap agreements and option-based products, by .42%, from 5.96% to an estimated 6.38% at September 30, 1995. Conversely, an interest rate decrease of 1% (100 basis points) would lower TMCC's weighted average interest rate, including the effects of interest rate swap agreements and option-based products, by .46%, from 5.96% to an estimated 5.50% at September 30, 1995. -18- A reconciliation of the activity of TMCC's derivative financial instruments for the years ended September 30, 1995 and 1994 is as follows:
September 30, ------------------------------------------------------------ Cross Currency Interest Interest Indexed Rate Swap Rate Swap Option-based Note Swap Agreements Agreements Products Agreements ------------ ------------ ------------ ------------ 1995 1994 1995 1994 1995 1994 1995 1994 ---- ---- ---- ---- ---- ---- ---- ---- (Dollars in Billions) Beginning Notional Amount....... $4.0 $2.8 $7.6 $6.0 $0.5 $0.4 $2.4 $1.4 Add: New agreements............... 1.6 2.0 1.9 3.5 3.3 0.5 0.5 1.6 Less: Terminated agreements........ - - - - - - - - Expired agreements........... 0.8 0.8 2.4 1.9 - 0.4 1.2 0.6 ---- ---- ---- ---- ---- ---- ---- ---- Ending Notional Amount.......... $4.8 $4.0 $7.1 $7.6 $3.8 $0.5 $1.7 $2.4 ==== ==== ==== ==== ==== ==== ==== ====
For additional information regarding TMCC's use of derivatives financial instruments, see Item 8 -- Notes 2, 9, 10 and 11 to the Consolidated Financial Statements. On occasion, TMS has made equity contributions to maintain TMCC's equity capitalization at certain levels. Such levels have been periodically established by TMS as it deems appropriate. No such equity contributions were made during fiscal 1995. During the year ended September 30, 1994, TMS made equity contributions to TMCC by purchasing, at par value, all newly issued shares of TMCC's capital stock in the amount of $185 million. Recently Enacted Accounting Standards In March 1995, the Financial Accounting Standards Board issued Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" ("Statement No. 121"). Statement No. 121 establishes accounting standards for the impairment of long-lived assets, certain identifiable intangibles and goodwill related to those assets to be held and used and long-lived assets and certain identifiable intangibles to be disposed of. Statement No. 121 requires that long-lived assets and certain identifiable intangibles to be held and used by an entity be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In addition, Statement No. 121 requires that certain long-lived assets and intangibles to be disposed of be reported at the lower of carrying amount or fair value less cost to sell. Statement No. 121 is effective for fiscal years beginning after December 15, 1995. The Company has not determined the impact that the adoption of this accounting standard will have on its financial position or results of operations. The Company plans to adopt Statement No. 121 in the first interim period of fiscal 1997. -19- ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. INDEX TO FINANCIAL STATEMENTS Page ------- Report of Independent Accountants................................ 21 Consolidated Balance Sheet at September 30, 1995 and 1994........ 22 Consolidated Statement of Income for the years ended September 30, 1995, 1994 and 1993................. 23 Consolidated Statement of Shareholder's Equity for the years ended September 30, 1995, 1994 and 1993............. 24 Consolidated Statement of Cash Flows for the years ended September 30, 1995, 1994 and 1993................. 25 Notes to Consolidated Financial Statements....................... 26 - 51 All schedules have been omitted because they are not required, not applicable, or the information has been included elsewhere. -20- REPORT OF INDEPENDENT ACCOUNTANTS --------------------------------- 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, of shareholder's equity and of cash flows present fairly, in all material respects, the financial position of Toyota Motor Credit Corporation (a wholly owned subsidiary of Toyota Motor Sales, U.S.A., Inc.) and its subsidiaries at September 30, 1995 and 1994, and the results of their operations and their cash flows for each of the three years in the period ended September 30, 1995, in conformity with generally accepted accounting principles. These financial statements are the responsibility of Toyota Motor Credit Corporation's 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 generally accepted auditing standards which 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 the opinion expressed above. /S/ PRICE WATERHOUSE LLP Los Angeles, California October 31, 1995 -21- TOYOTA MOTOR CREDIT CORPORATION CONSOLIDATED BALANCE SHEET (Dollars in Millions)
September 30, ----------------------- 1995 1994 -------- -------- ASSETS ------ Cash and cash equivalents................. $ 108 $ 277 Investments in marketable securities...... 169 102 Investments in operating leases, net...... 8,148 6,215 Finance receivables, net.................. 7,141 7,776 Receivable from Parent.................... 50 37 Other receivables......................... 350 235 Deferred charges.......................... 85 36 Income taxes receivable................... 6 - Other assets.............................. 81 55 ------- ------- Total Assets..................... $16,138 $14,733 ======= ======= LIABILITIES AND SHAREHOLDER'S EQUITY ------------------------------------ Notes and loans payable................... $12,696 $11,833 Accrued interest.......................... 190 156 Accounts payable and accrued expenses..... 857 727 Unearned insurance premiums............... 59 73 Income taxes payable...................... - 31 Deferred income taxes..................... 627 386 ------- ------- Total liabilities................... 14,429 13,206 ------- ------- Commitments and contingencies Shareholder's Equity: Capital stock, $l0,000 par value (100,000 shares authorized; issued and outstanding 86,500 in 1995 and 1994)............................... 865 865 Retained earnings...................... 844 662 ------- ------- Total shareholder's equity.......... 1,709 1,527 ------- ------- Total Liabilities and Shareholder's Equity............. $16,138 $14,733 ======= =======
See Accompanying Notes to Consolidated Financial Statements. -22- TOYOTA MOTOR CREDIT CORPORATION CONSOLIDATED STATEMENT OF INCOME (Dollars in Millions)
Years ended September 30, ---------------------------------- 1995 1994 1993 ------ ------ ------ Financing Revenues: Leasing................................. $1,904 $1,230 $ 747 Retail financing........................ 431 413 468 Wholesale and other dealer financing.... 121 86 80 ------ ------ ------ Total financing revenues................... 2,456 1,729 1,295 Interest expense........................ 716 486 454 Depreciation on operating leases........ 1,232 735 381 ------ ------ ------ Net financing revenues..................... 508 508 460 Other revenues............................. 108 95 77 ------ ------ ------ Net Financing Revenues and Other Revenues.. 616 603 537 ------ ------ ------ Expenses: Operating and administrative............ 258 232 228 Provision for credit losses............. 58 78 54 ------ ------ ------ Total Expenses............................. 316 310 282 ------ ------ ------ Income before income taxes................. 300 293 255 Provision for income taxes................. 117 118 97 ------ ------ ------ Net Income................................. $ 183 $ 175 $ 158 ====== ====== ======
See Accompanying Notes to Consolidated Financial Statements. -23- TOYOTA MOTOR CREDIT CORPORATION CONSOLIDATED STATEMENT OF SHAREHOLDER'S EQUITY (Dollars in Millions)
Capital Retained Stock Earnings Total ------- -------- ------- Balance at September 30, 1992.......... $630 $329 $ 959 Issuance of capital stock.............. 50 - 50 Net income in 1993..................... - 158 158 ---- ---- ------ Balance at September 30, l993.......... 680 487 1,167 Issuance of capital stock.............. 185 - 185 Net income in 1994..................... - 175 175 ---- ---- ------ Balance at September 30, 1994.......... 865 662 1,527 Net income in 1995..................... - 183 183 Net unrealized holding losses on marketable securities............... - (1) (1) ---- ---- ------ Balance at September 30, 1995.......... $865 $844 $1,709 ==== ==== ======
See Accompanying Notes to Consolidated Financial Statements. -24- TOYOTA MOTOR CREDIT CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS (Dollars in Millions)
Years ended September 30, --------------------------------- 1995 1994 1993 ------ ------ ------ Cash flows from operating activities: Net income.......................................... $ 183 $ 175 $ 158 ------ ------ ------ Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization.................. 1,286 743 382 Provision for credit losses.................... 58 78 54 Gain from sale of finance receivables.......... (6) - (12) Increase in accrued interest................... 34 8 24 Decrease in unearned insurance premiums........ (14) (13) (21) Increase (decrease) in deferred income taxes................................ 241 108 (1) (Increase) decrease in other assets............ (45) (24) 47 Increase in other liabilities.................. 85 180 215 ------ ------ ------ Total adjustments................................... 1,639 1,080 688 ------ ------ ------ Net cash provided by operating activities.............. 1,822 1,255 846 ------ ------ ------ Cash flows from investing activities: Additions to investments in marketable securities....................................... (90) (86) (174) Disposition of investments in marketable securities....................................... 24 120 139 Purchase of finance receivables..................... (11,005) (10,868) (9,936) Liquidations of finance receivables................. 10,941 10,263 9,159 Proceeds from sale of finance receivables........... 653 - 466 Additions to investments in operating leases........ (4,123) (4,468) (1,974) Disposition of investments in operating leases...... 927 525 225 ------ ------ ------ Net cash used in investing activities.................. (2,673) (4,514) (2,095) ------ ------ ------ Cash flows from financing activities: Proceeds from issuance of capital stock............. - 185 50 Proceeds from issuance of notes and loans payable... 5,733 5,150 2,848 Payments on notes and loans payable................. (4,989) (2,955) (1,246) Net increase (decrease) in commercial paper, with original maturities less than 90 days....... (62) 582 (40) ------ ------ ------ Net cash provided by financing activities.............. 682 2,962 1,612 ------ ------ ------ Net increase (decrease) in cash and cash equivalents... (169) (297) 363 Cash and cash equivalents at the beginning of the period....................................... 277 574 211 ------ ------ ------ Cash and cash equivalents at the end of the period.............................................. $ 108 $ 277 $ 574 ====== ====== ====== Supplemental disclosures: Interest paid....................................... $643 $475 $440 Income taxes paid................................... $2 $64 -
See Accompanying Notes to Consolidated Financial Statements. -25- TOYOTA MOTOR CREDIT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1 - Nature of Operations - ----------------------------- Toyota Motor Credit Corporation ("TMCC") provides retail and wholesale financing, retail leasing and certain other financial services to authorized Toyota and Lexus vehicle and Toyota industrial equipment dealers and their customers in the United States (excluding Hawaii). TMCC is a wholly owned subsidiary of Toyota Motor Sales, U.S.A., Inc. ("TMS" or the "Parent"). TMS is primarily engaged in the wholesale distribution of automobiles, trucks, industrial equipment and related replacement parts and accessories throughout the United States (excluding Hawaii). Substantially all of TMS's products are either manufactured by its subsidiaries or are purchased from Toyota Motor Corporation (the parent of TMS) or its affiliates. TMCC has five wholly owned subsidiaries, Toyota Motor Insurance Services, Inc. ("TMIS"), Toyota Motor Insurance Corporation of Vermont ("TMICV"), Toyota Motor Insurance Company ("TMIC"), Toyota Motor Life Insurance Company ("TLIC") and Toyota Motor Credit Receivables Corporation ("TMCRC"). TMCC and its wholly owned subsidiaries are collectively referred to as the "Company". The insurance subsidiaries provide certain insurance services along with certain insurance and contractual coverages related to the sale of vehicles. In addition, the insurance subsidiaries insure and reinsure certain TMS and TMCC risks. TMCRC, a limited purpose subsidiary, was formed in June 1993 primarily to acquire retail finance receivables from TMCC for the purpose of securitizing such receivables. The Company's business is substantially dependent upon the sale of Toyota and Lexus vehicles in the United States. Lower levels of sales of such vehicles resulting from governmental action, decline in demand, changes in pricing due to the appreciation of the Japanese yen against the United States dollar, or other events, could result in a reduction in the level of finance and insurance operations of the Company. Note 2 - Summary of Significant Accounting Policies - --------------------------------------------------- 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. Revenue Recognition ------------------- Revenue from retail financing contracts and finance leases is recognized using the effective yield method. Revenue from operating leases is recognized on a straight-line basis over the lease term. -26- TOYOTA MOTOR CREDIT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 2 - Summary of Significant Accounting Policies (Continued) - --------------------------------------------------- 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 debt and equity securities. Debt securities designated as held-to-maturity are carried at amortized cost and are reduced to net realizable value for other than temporary declines in market value. Debt and equity securities designated as available-for-sale are carried at fair value with unrealized gains or losses included in shareholder's equity, net of applicable taxes. Realized investment gains and losses, which are determined on the specific identification method, are reflected in income. Investments in Operating Leases ------------------------------- Vehicle and equipment leases to third parties are originated by dealers and acquired by TMCC, which assumes ownership of the property. TMCC is also the lessor on certain property that it acquires directly. Investments in operating leases are recorded at cost and depreciated, primarily on a straight-line basis, over the lease term to the estimated residual value. Allowance for Credit Losses --------------------------- Allowances for credit losses are established based primarily on historical loss experience. Other factors affecting collectibility are also evaluated in determining the amount to be provided. Upon repossession of the collateral for a delinquent account, losses are charged to the allowance for credit losses and the estimated realizable value of the asset is reclassified to Other Assets. When it has been determined that the collateral cannot be recovered, losses are charged to the allowance for credit losses. Recoveries are credited to the allowance for credit losses. Deferred Charges ---------------- Deferred charges consist primarily of premiums paid for option-based products, underwriters' commissions and other long-term debt issuance expenses, which are amortized to Interest Expense over the life of the related instruments on a straight-line basis. -27- TOYOTA MOTOR CREDIT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 2 - Summary of Significant Accounting Policies (Continued) - --------------------------------------------------- Insurance Operations -------------------- Revenues from insurance premiums and from providing coverage under various contractual agreements are earned over the terms of the respective policies and agreements in proportion to estimated claims activity. Certain costs of acquiring new business, consisting of commissions, premium taxes and other costs, are deferred and amortized over the terms of the related policies on the same bases as revenues are earned. The liability for reported losses and the estimate of unreported losses is recorded in Accounts Payable and Accrued Expenses. Commission income and fee income are recognized in relation to the level of services performed. Interest Rate Swap Agreements ----------------------------- TMCC utilizes interest rate swap agreements in managing its exposure to interest rate risk. Interest rate swap agreements are executed as an integral part of specific debt transactions or on a portfolio basis. The differential paid or received on interest rate swap agreements is recorded as an adjustment to Interest Expense over the term of the agreements. Master netting agreements, with all interest rate swap agreement counterparties, also exist allowing the net difference between counterparties to be exchanged in the event of default. Cross Currency Interest Rate Swap Agreements -------------------------------------------- TMCC's senior debt issued in foreign currencies is hedged by concurrently executed cross currency interest rate swap agreements. These cross currency interest rate swap agreements involve the exchange of foreign currency principal and interest obligations for U.S. dollar principal and interest obligations. TMCC's foreign currency debt is translated into U.S. dollars in the financial statements at the various foreign currency spot exchange rates in effect at the balance sheet date. The receivables or payables, arising as a result of the differences between the September 30, 1995 foreign currency spot exchange rates and the contract rates applicable to the cross currency interest rate swap agreements, are classified in Other Receivables or Accounts Payable and Accrued Expenses, respectively. -28- TOYOTA MOTOR CREDIT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 2 - Summary of Significant Accounting Policies (Continued) - --------------------------------------------------- Income Taxes ------------ Effective October 1, 1993, the Company adopted Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("Statement No. 109"). The adoption of Statement No. 109 changed the method of accounting for income taxes from a deferred method to a liability method. This method differs from the previously used method in that 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 period's income statement. The cumulative effect of the change in accounting principle was not material to the Company. In addition, there was no material effect on fiscal 1994 income. The fiscal 1993 financial statements have not been restated. The Company joins with TMS in filing consolidated federal income tax returns and combined or consolidated income tax returns in certain states. Federal and state income tax is provided on a separate return basis. Prior to October 1, 1994, for states where a combined or consolidated income tax return was filed, state income taxes were allocated to the Company by TMS based upon the Company's apportionment factors and income in those states. There was no material effect to the financial position or results of operations as a result of the change in the method of allocating state income taxes. Reclassifications ----------------- Certain 1994 accounts have been reclassified to conform with the 1995 presentation. Note 3 - Investments in Marketable Securities - --------------------------------------------- Effective October 1, 1994, the Company adopted Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities" ("Statement No. 115"). Statement No. 115 addresses the accounting and reporting for investments in all debt securities and for investments in equity securities that have readily determinable fair values. The cumulative effect of the change in accounting principle was not material to the Company's financial position or results of operations. Prior period financial statements have not been restated. -29- TOYOTA MOTOR CREDIT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 3 - Investments in Marketable Securities (Continued) - --------------------------------------------- The fair value of marketable securities was estimated using quoted market prices as of September 30, 1995. Information with respect to the Company's investments in marketable securities was as follows:
September 30, 1995 ------------------------------------- Gross Unrealized Fair ----------------- Cost Value Gains Losses -------- ------ ----- --------- (Dollars in Millions) Available-for-sale securities: Equity securities................... $115 $114 $(1) $2 Mortgage-backed securities.......... 33 33 - - U.S. debt securities................ 12 12 - - ---- ---- ----- --- Total available-for-sale securities.... 160 159 $(1) $2 ===== === Excess of cost over fair value...... (1) ---- Available-for-sale securities.......... $159 $159 ==== ==== Held-to-maturity securities: U.S. debt securities................ $ 10 $ 10 ==== ==== Total marketable securities...... $169 $169 ==== ====
The contractual maturities of investments in marketable securities at September 30, 1995 are summarized as follows:
Available-for-Sale Held-to-Maturity Securities Securities ------------------ ---------------- Fair Fair Cost Value Cost Value ---- ----- ---- ------- (Dollars in Millions) Within one year..................... $ 11 $ 11 $ 9 $ 9 After one year through five years... 1 1 1 1 After five years through ten years.. - - - - Mutual funds........................ 115 114 - - Mortgage-backed securities.......... 33 33 - - ---- ---- --- --- Total............................ $160 $159 $10 $10 ==== ==== === ===
The proceeds from sales of available-for-sale securities were $7 million for the year ended September 30, 1995. -30- TOYOTA MOTOR CREDIT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 4 - Investments in Operating Leases - ---------------------------------------- Investments in operating leases, net consisted of the following:
September 30, --------------------- 1995 1994 ------ ------ (Dollars in Millions) Vehicles................................. $9,864 $7,184 Equipment, aircraft and other............ 201 148 ------ ------ 10,065 7,332 Accumulated depreciation................. (1,838) (1,054) Allowance for credit losses.............. (79) (63) ------ ------ Investments in operating leases, net.. $8,148 $6,215 ====== ======
Rental income from operating leases was $1,734 million, $1,056 million and $572 million for the years ended September 30, 1995, 1994 and 1993, respectively. Future minimum rentals on operating leases are due in installments as follows: years ending September 30, 1996 - $1,687 million; 1997 - $1,178 million; 1998 - $380 million; 1999 - $26 million; and 2000 - $3 million. A substantial portion of TMCC's operating leases is generally paid prior to maturity. The future minimum rentals as shown above should not be considered as necessarily indicative of future cash collections. Note 5 - Finance Receivables - ---------------------------- Finance receivables, net consisted of the following:
September 30, --------------------- 1995 1994 ------ ------ (Dollars in Millions) Retail............................... $5,050 $5,805 Finance leases....................... 1,519 1,734 Wholesale and other dealer loans..... 1,229 1,054 ------ ------ 7,798 8,593 Unearned income...................... (565) (716) Allowance for credit losses.......... (92) (101) ------ ------ Finance receivables, net.......... $7,141 $7,776 ====== ======
-31- TOYOTA MOTOR CREDIT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 5 - Finance Receivables (Continued) - ---------------------------- The contractual maturities of retail finance receivables and wholesale and other dealer loans and the future minimum lease payments on finance leases at September 30, 1995 are summarized as follows:
Due in the Wholesale Years Ending Finance and Other September 30, Retail Leases Dealer Loans ------------- ---------- ---------- ------------ (Dollars in Millions) 1996.................. $1,854 $322 $1,017 1997.................. 1,467 244 72 1998.................. 960 160 65 1999.................. 571 102 27 2000.................. 187 18 36 Thereafter............ 11 - 12 ------ ---- ------ Total.............. $5,050 $846 $1,229 ====== ==== ======
Finance leases, net consisted of the following:
September 30, --------------------- 1995 1994 ------- ------- (Dollars in Millions) Minimum lease payments.................. $ 846 $1,040 Estimated unguaranteed residual values.. 673 694 ------ ------ Finance leases....................... 1,519 1,734 Unearned income......................... (261) (302) Allowance for credit losses............. (17) (21) ------ ------ Finance leases, net.................. $1,241 $1,411 ====== ======
The aggregate balances related to finance receivables 60 or more days past due totaled $16 million and $14 million at September 30, 1995 and 1994, respectively. A substantial portion of TMCC's finance receivables is generally paid prior to maturity. Contractual maturities and future minimum lease payments as shown above should not be considered as necessarily indicative of future cash collections. The majority of retail and finance lease receivables do not involve recourse to the dealer in the event of customer default. -32- TOYOTA MOTOR CREDIT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 6 - Sale of Finance Receivables - ------------------------------------ In the fourth quarters of fiscal 1995 and 1993, the Company sold retail finance receivables aggregating $679 million and $521 million, respectively, subject to certain limited recourse provisions. In each case, TMCC sold its receivables to TMCRC which in turn sold them to a trust. TMCC remains as servicer and is paid a servicing fee. In a subordinated capacity, TMCRC retains excess servicing cash flows, certain cash deposits and, in connection with the fiscal 1993 sale of finance receivables, a limited interest in the trust. TMCRC's subordinated interests in excess servicing cash flows, cash deposits, limited interest in the 1993 trust and other related amounts are held as restricted assets which are subject to limited recourse provisions. These restricted assets are not available to satisfy any obligations of TMCC. The following is a summary of these amounts included in Other Receivables:
September 30, --------------------- 1995 1994 ---- ---- (Dollars in Millions) Excess servicing....................... $32 $13 Other restricted amounts: Cash deposits....................... 14 4 Limited interest in 1993 trust...... 7 16 Allowance for estimated credit losses on sold receivables.......... (4) (2) --- --- Total............................ $49 $31 === ===
The pretax gain resulting from the sale of finance receivables totaled $6 million and $12 million in fiscal 1995 and 1993, respectively, after providing for an allowance for estimated credit losses. In determining the gain in connection with the fiscal 1993 sale of finance receivables, the book value of the sold receivables pool was allocated between the portion sold and the portion retained based on their relative fair values on the date of the sale. The outstanding balance of the sold receivables which TMCC continues to service at September 30, 1995 and 1994 totaled $762 million and $251 million, respectively. -33- TOYOTA MOTOR CREDIT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 7 - Allowance for Credit Losses - ------------------------------------ An analysis of the allowance for credit losses follows:
Years ended September 30, ------------------------- 1995 1994 1993 ---- ---- ---- (Dollars in Millions) Allowance for credit losses at beginning of period......... $164 $121 $107 Provision for credit losses....... 58 78 54 Charge-offs, net of recoveries.... (51) (35) (40) ---- ---- ---- Allowance for credit losses at end of period............... $171 $164 $121 ==== ==== ====
Effective October 1, 1994, the Company adopted Statement of Financial Accounting Standards No. 114, "Accounting by Creditors for Impairment of a Loan" ("Statement No. 114") and its amendment Statement of Financial Accounting Standards No. 118, "Accounting by Creditors for Impairment of a Loan - Income Recognition and Disclosures" ("Statement No. 118"). Statement No. 114 requires a creditor to evaluate the collectibility of both contractual interest and principal of certain impaired receivables when assessing the need for a loss accrual and to measure loans that are restructured in a troubled debt restructuring to reflect the time value of money. Statement No. 118 amends Statement No. 114 to allow a creditor to use existing methods for recognizing interest income on an impaired loan. Statement No. 118 also amends the disclosure requirements in Statement No. 114 to require information about the recorded investment in certain impaired loans and about how a creditor recognizes interest income related to those impaired loans. The Company's loans consist primarily of large groups of smaller-balance homogeneous loans, namely retail finance receivables, which are collectively evaluated for impairment, and leases to which these standards do not apply. The impact of adoption was not material to the Company's financial position or results of operations. Prior period financial statements have not been restated. -34- TOYOTA MOTOR CREDIT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 8 - Transactions with Parent - --------------------------------- An operating agreement with TMS (the "Operating Agreement") provides that 100% ownership of TMCC will be retained by TMS as long as TMCC has any funded debt outstanding. Additionally, TMS will provide necessary equity contributions or other financial assistance it deems appropriate to ensure that TMCC maintains a minimum coverage on fixed charges of 1.25 times such charges in any fiscal quarter. Fixed charges are primarily interest on borrowed funds. To maintain such coverage, pursuant to the Operating Agreement, TMS from time to time has made noninterest-bearing advances and income maintenance payments to TMCC. No such noninterest-bearing advances or income maintenance payments were made in fiscal 1995, 1994 or 1993. The coverage provision of the Operating Agreement is solely for the benefit of the holders of TMCC's commercial paper and the Operating Agreement may be amended or terminated at any time without notice to, or the consent of, holders of other TMCC obligations. The Operating Agreement does not constitute a guarantee by TMS of any obligations of TMCC. TMS provides certain technical and administrative services and incurs certain expenses on the Company's behalf and, accordingly, allocates these charges to the Company. The charges, reimbursed by TMCC to TMS, totaled $8 million, $7 million and $6 million for the years ended September 30, 1995, 1994 and 1993, respectively. TMCC has an arrangement to borrow funds from TMS at rates which approximate the Federal Reserve Board's one-month commercial paper composite rates for firms whose bonds are rated AA. For the years ended September 30, 1995, 1994 and 1993, the highest amounts of borrowings from TMS outstanding at any one time were $34 million, $161 million and $117 million, respectively. The average amounts of borrowings from TMS were $6 million and $7 million for the years ended September 30, 1994 and 1993, respectively. Interest charges related to these interest-bearing borrowings from TMS were $0.3 million and $0.2 million for the years ended September 30, 1994 and 1993, respectively. The average amount of borrowings from TMS and the interest charges related to interest-bearing borrowings from TMS were immaterial for the year ended September 30, 1995. The Operating Agreement provides that borrowings from TMS are subordinated to all other indebtedness of TMCC. In the second quarter of fiscal 1993, the Company began leasing its headquarters facility from TMS. The amount of rent expense paid to TMS totaled $3 million, $3 million and $2 million for the years ended September 30, 1995, 1994 and 1993, respectively. -35- TOYOTA MOTOR CREDIT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 8 - Transactions with Parent (Continued) - --------------------------------- TMIS and TMICV provide certain insurance services, and insurance and reinsurance coverages, respectively, to TMS. Insurance premiums, commissions and fees earned during the years ended September 30, 1995, 1994 and 1993 included $4 million, $7 million and $9 million, respectively, related to these services and coverages. TMCC provides retail financing and leasing services related to various programs sponsored from time to time by TMS for the sale and lease of Toyota and Lexus vehicles and Toyota industrial equipment. During the years ended September 30, 1995, 1994 and 1993, TMCC recognized revenue of $134 million, $54 million and $25 million, respectively, related to the amounts received from TMS for these programs. TMCC provides certain leasing and financing services to TMS. For each of the years ended September 30, 1995, 1994 and 1993, TMCC recognized revenue of $3 million related to these services. TMCC's cash equivalents, which are invested along with TMS, consist primarily of money market instruments. For the years ended September 30, 1995, 1994 and 1993, the highest amounts of cash equivalents, invested along with TMS, at month end were $603 million, $326 million and $515 million, respectively. The average amounts of cash equivalents, invested along with TMS, at month end were $205 million, $119 million and $224 million for the years ended September 30, 1995, 1994 and 1993, respectively. Interest earned related to these cash equivalents was $16 million, $5 million and $6 million for the years ended September 30, 1995, 1994 and 1993, respectively. -36- TOYOTA MOTOR CREDIT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 9 - Notes and Loans Payable - -------------------------------- Notes and loans payable at September 30, 1995 and 1994, which consisted of senior debt, included the following:
September 30, ---------------------- 1995 1994 ------- ------- (Dollars in Millions) Commercial paper, net................... $ 1,442 $ 960 ------- ------- Other senior debt, due in the years ending September 30,: 1995.............................. - 4,010 1996.............................. 3,252 2,405 1997.............................. 2,722 2,014 1998.............................. 2,371 985 1999.............................. 529 233 2000.............................. 1,723 949 Thereafter........................ 611 260 ------- ------- 11,208 10,856 Unamortized premium..................... 46 17 ------- ------- Total other senior debt........... 11,254 10,873 ------- ------- Notes and loans payable........ $12,696 $11,833 ======= =======
Short-term borrowings include commercial paper and certain medium-term notes ("MTNs"). The weighted average remaining term of commercial paper was 27 days and 14 days at September 30, 1995 and 1994, respectively. The weighted average interest rate on commercial paper was 6.53% and 4.43% at September 30, 1995 and 1994, respectively. Short-term MTNs with original terms from nine months to one year, included in other senior debt, were $444 million and $622 million at September 30, 1995 and 1994, respectively. The weighted average interest rate on these short-term MTNs was 5.86% and 4.77% at September 30, 1995 and 1994, respectively, including the effects of interest rate swap agreements. The weighted average interest rate on other senior debt was 5.75% and 4.84% at September 30, 1995 and 1994, respectively, including the effects of interest rate swap agreements. The rates have been calculated on the basis of rates in effect at September 30, 1995 and 1994, some of which are floating rates that reset daily. Approximately 24% of other senior debt at September 30, 1995 had interest rates, including the effects of interest rate swap agreements, that were fixed for a period of more than one year. The weighted average of these -37- TOYOTA MOTOR CREDIT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 9 - Notes and Loans Payable (Continued) - -------------------------------- fixed interest rates was 6.16% at September 30, 1995. Approximately 34% of other senior debt at September 30, 1995 had floating interest rates that were covered by option-based products with an average strike rate of 7.53%. The mix of TMCC's fixed and floating rate debt changes from time to time as a result of interest rate risk management. Included in Notes and Loans Payable at September 30, 1995 and 1994 were unsecured notes payable in foreign currencies as follows:
September 30, ------------------------------ 1995 1994 ----------- ----------- Australian dollars.................. 250 million 125 million Canadian dollars.................... 775 million 1 billion Dutch guilders...................... 555 million 55 million European currency units............. 45 million 36 million French francs....................... 1 billion 4 billion German deutsche marks............... 760 million 550 million Hong Kong dollars................... 150 million - Italian lire........................ 470 billion 485 billion Japanese yen........................ 218 billion 190 billion Swedish kronor...................... 110 million 110 million Swiss francs........................ 1 billion 785 million
Concurrent with the issuance of the unsecured notes denominated in foreign currencies, included in Notes and Loans Payable at September 30, 1995, TMCC entered into cross currency interest rate swap agreements to convert these obligations at maturity into U.S. dollar obligations which aggregate to a principal amount of $5.5 billion. TMCC's foreign currency debt is translated into U.S. dollars in the financial statements at the various foreign currency spot exchange rates in effect at September 30, 1995. The receivables or payables, arising as a result of the differences between the September 30, 1995 foreign currency spot exchange rates and the contract rates applicable to the cross currency interest rate swap agreements, are classified in Other Receivables or Accounts Payable and Accrued Expenses, respectively, and would aggregate to a net receivable position of $126 million at September 30, 1995. -38- TOYOTA MOTOR CREDIT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 10 - Fair Value of Financial Instruments - --------------------------------------------- In accordance with the requirements of Statement of Financial Accounting Standards No. 107, "Disclosures about Fair Value of Financial Instruments" and its amendment, Statement of Financial Accounting Standards No. 119, "Disclosure about Derivative Financial Instruments and Fair Value of Financial Instruments", the Company has provided the estimated fair value of financial instruments using available market information at September 30, 1995 and 1994, and the valuation methodologies described below. However, considerable judgement was required in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that the Company could realize in a current market exchange. The use of different market assumptions or valuation methodologies may have a material effect on the estimated fair value amounts of such financial instruments. The carrying amounts and estimated fair values of the Company's financial instruments at September 30, 1995 and 1994 are as follows:
September 30, --------------------------------------------------- 1995 1994 ------------------------ ------------------------ Carrying Fair Carrying Fair Amount Value Amount Value ----------- ---------- ----------- ---------- (Dollars in Millions) Balance sheet financial instruments: Assets: Cash and cash equivalents......... $108 $108 $277 $277 Investments in marketable securities..................... $169 $169 $102 $102 Finance receivables, net.......... $5,900 $5,971 $6,365 $6,395 Other receivables................. $70 $71 $53 $54 Receivables from cross currency interest rate swap agreements.. $280 $426 $182 $519 Liabilities: Notes and loans payable........... $12,696 $12,736 $11,833 $12,040 Payables from cross currency interest rate swap agreements.. $154 $65 $145 $241
-39- TOYOTA MOTOR CREDIT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 10 - Fair Value of Financial Instruments (Continued) - ---------------------------------------------
September 30, --------------------------------------------------- 1995 1994 ------------------------ ------------------------ Contract or Unrealized Contract or Unrealized Notional Gains/ Notional Gains/ Amount (Losses) Amount (Losses) ----------- ---------- ----------- ---------- (Dollars in Millions) Off-balance sheet financial instruments: Inventory lines of credit......... $773 - $736 - Cross currency interest rate swap agreements................ $4,804 $342 $4,024 $249 Interest rate swap agreements..... $7,049 $29 $7,613 $101 Option-based products............. $3,820 $(1) $500 $1 Indexed note swap agreements...... $1,721 $11 $2,407 $(162)
The fair value estimates presented herein are based on pertinent information available to management as of September 30, 1995 and 1994. Although the Company is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively reevaluated for purposes of these financial statements since September 30, 1995 and 1994 and, therefore, current estimates of fair value may differ significantly from the amounts presented herein. 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 market 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 as of September 30, 1995 and 1994. -40- TOYOTA MOTOR CREDIT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 10 - Fair Value of Financial Instruments (Continued) - --------------------------------------------- Finance Receivables ------------------- The carrying amount of finance receivables, net excludes $1.2 billion and $1.4 billion of direct finance leases at September 30, 1995 and 1994, respectively. The carrying amount of $1.2 billion and $1.1 billion of variable rate finance receivables at September 30, 1995 and 1994, respectively, was assumed to approximate fair value as they repriced at prevailing market rates. The fair value of fixed rate finance receivables was estimated by discounting expected cash flows using the rates at which loans of similar credit quality and maturity would be made as of September 30, 1995 and 1994. Other Receivables ----------------- The carrying amount and fair value of other receivables are presented excluding the receivables arising from cross currency interest rate swap agreements. The fair value of excess servicing and the limited interest in the trust was estimated by discounting cash flows using quoted market interest rates as of September 30, 1995 and 1994. The carrying amount of the remaining other receivables approximates market value due to the short maturity of these instruments. Notes and Loans Payable ----------------------- The fair value of notes and loans payable was estimated using quoted market prices where available as of September 30, 1995 and 1994. The fair value of notes and loans payable where market prices were not available was estimated by discounting cash flows using the interest rates at which debt of similar credit quality and maturity would be made as of September 30, 1995 and 1994. The carrying amount of commercial paper was assumed to approximate fair value due to the short maturity of these instruments. Inventory Lines of Credit ------------------------- Inventory floorplan lines of credit are variable rate commitments that reprice at market rates. -41- TOYOTA MOTOR CREDIT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 10 - Fair Value of Financial Instruments (Continued) - --------------------------------------------- Cross Currency Interest Rate Swap Agreements -------------------------------------------- The estimated fair value of TMCC's existing cross currency interest rate swap agreements was derived by discounting expected cash flows over the remaining term of the agreements using quoted market exchange rates and quoted market interest rates as of September 30, 1995 and 1994. Interest Rate Swap Agreements ----------------------------- The estimated fair value of TMCC's existing interest rate swap agreements was derived by discounting expected cash flows using quoted market interest rates as of September 30, 1995 and 1994. Option-based Products ----------------------- The estimated fair value of TMCC's existing option-based products was derived using quoted market prices as of September 30, 1995 and 1994. Indexed Note Swap Agreements ---------------------------- The estimated fair value of TMCC's existing indexed note swap agreements was derived by discounting expected cash flows over the remaining term of the agreements using market exchange rates and market interest rates as of September 30, 1995 and 1994. Note 11 - Financial Instruments with Off-Balance Sheet Risk - ----------------------------------------------------------- Inventory Lines of Credit ------------------------- TMCC has extended inventory floorplan lines of credit to dealers, the unused portion of which amounted to $773 million and $736 million at September 30, 1995 and 1994, respectively. Security interests are acquired in the vehicles and equipment financed, and substantially all such financings are backed by corporate or individual guarantees from or on behalf of the participating dealers. -42- TOYOTA MOTOR CREDIT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 11 - Financial Instruments with Off-Balance Sheet Risk (Continued) - ----------------------------------------------------------- Derivative Financial Instruments -------------------------------- TMCC utilizes a variety of derivative financial instruments to manage its currency exchange rate risk arising as a result of borrowings denominated in foreign currencies and its interest rate risk. TMCC does not enter into these instruments for trading purposes. For all of its derivative financial instruments, TMCC manages counterparty risk through the use of credit standard guidelines, counterparty diversification and financial condition monitoring. At September 30, 1995, approximately 82% of TMCC's derivative financial instruments, based on notional amounts, are with commercial banks and investment banking firms assigned investment grade ratings of "AA" or better by national rating agencies. TMCC does not anticipate non-performance by any of its counterparties. There were no reserves related to derivative counterparty non-performance, nor were there any non-performing counterparties, during the three years ended September 30, 1995. TMCC utilizes cross currency interest rate swap agreements to manage exposure to exchange rate fluctuations on principal and interest payments for borrowings denominated in foreign currencies. Notes and loans payable issued in foreign currencies are hedged by concurrently executed cross currency interest rate swap agreements. These cross currency interest rate swap agreements involve agreements to exchange TMCC's foreign currency principal and interest obligations for U.S. dollar obligations at agreed-upon currency exchange rates and interest rates. The aggregate notional amounts of cross currency interest rate swap agreements at September 30, 1995 and 1994 were $4.8 billion and $4.0 billion, respectively. The original maturities of the cross currency interest rate swap agreements ranged from one to seven years at September 30, 1995. In the event that a counterparty fails to perform, TMCC's credit exposure is limited to the currency exchange and interest rate differential between the non-performing swap and the corresponding debt transaction. TMCC utilizes interest rate swap agreements in managing its exposure to interest rate fluctuations. Interest rate swap agreements are executed as an integral part of specific debt transactions or on a portfolio basis. TMCC's interest rate swap agreements involve agreements to pay fixed and receive a floating rate, or receive fixed and pay a floating rate, at specified intervals, calculated on an agreed-upon notional amount. Interest rate swap agreements may also involve basis swap contracts, which are agreements to exchange the difference between certain floating interest amounts, such as the net payment based on the commercial paper rate and the London Interbank Offered Rate ("LIBOR"), calculated on an agreed-upon notional amount. In the event that a counterparty fails to perform, TMCC's credit exposure is limited to the interest rate differential. The underlying notional amounts are not exchanged and do not represent exposure to credit loss. The -43- TOYOTA MOTOR CREDIT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 11 - Financial Instruments with Off-Balance Sheet Risk (Continued) - ----------------------------------------------------------- Derivative Financial Instruments (Continued) -------------------------------- differential paid or received on such agreements is recorded as an adjustment to Interest Expense over the term of the agreements. Master netting agreements, with all interest rate swap agreement counterparties, also exist allowing the net difference between counterparties to be exchanged in the event of default. The original maturities of the interest rate swap agreements ranged from one to seven years at September 30, 1995. TMCC also utilizes option-based products in managing its exposure to interest rate fluctuations. Option-based products are executed as an integral part of specific debt transactions or on a portfolio basis. Option-based products consist primarily of purchased interest rate cap agreements and to a lesser extent corridor agreements. Option-based products are agreements which either grant TMCC the right, for a premium payment, to receive a payment when interest rates exceed a specified level, or require TMCC, in receipt of a premium, to make a payment when interest rates exceed or go below a specified level. Approximately 34% of TMCC's other senior debt at September 30, 1995 had floating interest rates that were covered by option-based products which had an average strike rate of 7.53%. The premiums paid for option-based products are included in Deferred Charges and are amortized to Interest Expense over the life of the instruments on a straight-line basis. Amounts receivable under option-based products are recorded as a reduction to Interest Expense. The original maturities of the option-based products ranged from two to three years at September 30, 1995. The underlying notional amounts for option- based products do not represent exposure to credit loss. -44- TOYOTA MOTOR CREDIT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 11 - Financial Instruments with Off-Balance Sheet Risk (Continued) - ----------------------------------------------------------- Derivative Financial Instruments (Continued) -------------------------------- The aggregate notional amounts of interest rate swap agreements and option-based products outstanding at September 30, 1995 and 1994 were as follows:
September 30, ---------------------- 1995 1994 ---- ---- (Dollars in Billions) Fixed rate swaps............................... $4.2 $4.8 Floating rate swaps............................ 1.3 1.4 Basis swaps.................................... 1.6 1.4 ---- ---- Total interest rate swap agreements........ $7.1 $7.6 ==== ==== Option-based products.......................... $3.8 $0.5 ==== ====
TMCC utilizes indexed note swap agreements in managing its exposure to indexed notes. Indexed notes are debt instruments whose interest rate and/or principal redemption amounts are derived from other underlying instruments. Indexed note swap agreements involve agreements to receive interest and/or principal amounts associated with the indexed notes, denominated in either U.S. dollars or a foreign currency, and to pay fixed or floating rates on fixed U.S. dollar liabilities. In the event that a counterparty fails to perform, TMCC's credit exposure is limited to the difference between the indexed amounts that should have been received and the amounts that TMCC is required to pay. At September 30, 1995, TMCC was the counterparty to $1.7 billion of indexed note swap agreements, of which $0.7 billion was denominated in foreign currencies and $1.0 billion was denominated in U.S. dollars. At September 30, 1994, TMCC was the counterparty to $2.4 billion of indexed note swap agreements, of which $0.9 was denominated in foreign currencies and $1.5 billion was denominated in U.S. dollars. The original maturities of the indexed note swap agreements ranged from one to ten years at September 30, 1995. -45- TOYOTA MOTOR CREDIT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 11 - Financial Instruments with Off-Balance Sheet Risk (Continued) - ----------------------------------------------------------- Derivative Financial Instruments (Continued) -------------------------------- An interest rate increase of 1% (100 basis points) would raise TMCC's weighted average interest rate, including the effects of interest rate swap agreements, by .42%, from 5.96% to an estimated 6.38% at September 30, 1995. Conversely, an interest rate decrease of 1% (100 basis points) would lower TMCC's weighted average interest rate, including the effects of interest rate swap agreements, by .46%, from 5.96% to an estimated 5.50% at September 30, 1995. Credit exposure of derivative financial instruments is represented by the fair value of contracts with a positive fair value at September 30, 1995 reduced by the effects of master netting agreements. The credit exposure of TMCC's derivative financial instruments at September 30, 1995 was $509 million on an aggregate notional amount of $17.4 billion. A reconciliation of the activity of TMCC's derivative financial instruments for the years ended September 30, 1995 and 1994 is as follows:
September 30, ----------------------------------------------------------- Cross Currency Interest Interest Indexed Rate Swap Rate Swap Option-based Note Swap Agreements Agreements Products Agreements ------------ ------------ ------------- ------------ 1995 1994 1995 1994 1995 1994 1995 1994 ---- ---- ---- ---- ---- ---- ---- ---- (Dollars in Billions) Beginning Notional Amount $4.0 $2.8 $7.6 $6.0 $0.5 $0.4 $2.4 $1.4 Add: New agreements........ 1.6 2.0 1.9 3.5 3.3 0.5 0.5 1.6 Less: Terminated agreements - - - - - - - - Expired agreements.... 0.8 0.8 2.4 1.9 - 0.4 1.2 0.6 ---- ---- ---- ---- ---- ---- ---- ---- Ending Notional Amount... $4.8 $4.0 $7.1 $7.6 $3.8 $0.5 $1.7 $2.4 ==== ==== ==== ==== ==== ==== ==== ====
-46- TOYOTA MOTOR CREDIT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 12 - Pension and Other Benefit Plans - ----------------------------------------- All full-time employees of the Company are eligible to participate in the TMS pension plan commencing on the first day of the month following hire. Benefits payable under this non-contributory defined benefit pension plan are based upon the employees' years of credited service and the highest sixty consecutive months' compensation, reduced by a percentage of social security benefits. For the years ended September 30, 1995, 1994 and 1993, the Company's pension expense was $2 million, $3 million and $3 million, respectively. At September 30, 1995, 1994 and 1993, the accumulated benefit obligation and plan net assets for employees of the Company were not determined separately from TMS; however, the plan's net assets available for benefits exceeded the accumulated benefit obligation. TMS funding policy is to contribute annually the maximum amount deductible for federal income tax purposes. Effective October 1, 1994, the Company adopted Statement of Financial Accounting Standards No. 112, "Employers' Accounting for Postemployment Benefits" ("Statement No. 112"). Statement No. 112 requires accrual, during the years that the employee renders the necessary service or when it is probable that a liability has been incurred, of the expected cost of providing postemployment benefits to former or inactive employees, their beneficiaries, and covered dependents after employment but before retirement. This method differs from the Company's previous practice of accounting for these benefits on a cash basis. The cumulative effect of the change in accounting principle was not material to the Company's financial position or results of operations. Prior period financial statements have not been restated. -47- TOYOTA MOTOR CREDIT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 13 - Provision for Income Taxes - ------------------------------------ The provision for income taxes consisted of the following:
Years ended September 30, -------------------------- 1995 1994 1993 ---- ---- ---- (Dollars in Millions) Current Federal........................... $(97) $ 6 $ 94 State............................. (27) 4 4 ---- ---- ---- Total current ................. (124) 10 98 ---- ---- ---- Deferred Federal........................... 173 86 (9) State............................. 68 22 8 ---- ---- ---- Total deferred................. 241 108 (1) ---- ---- ---- Provision for income taxes.. $117 $118 $ 97 ==== ==== ====
The deferred income tax liabilities by jurisdictions are as follows:
September 30, --------------------- 1995 1994 ---- ---- (Dollars in Millions) Federal........................................ $513 $340 State.......................................... 114 46 ---- ---- Net deferred income tax liability........... $627 $386 ==== ====
-48- TOYOTA MOTOR CREDIT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 13 - Provision for Income Taxes (Continued) - ------------------------------------ The Company's deferred tax assets and liabilities consisted of the following:
September 30, --------------------- 1995 1994 ----- ---- (Dollars in Millions) Assets: Alternative minimum tax..................... $ 339 $248 Provision for losses........................ 87 76 Deferred administrative fees................ 47 41 NOL carryforwards........................... 22 27 Deferred acquisition costs.................. 14 10 Unearned insurance premiums................. 4 4 Revenue recognition......................... 2 3 Other....................................... 3 2 ----- ---- 518 411 Valuation allowance......................... 0 0 ----- ---- Deferred tax assets...................... 518 411 ----- ---- Liabilities: Lease transactions.......................... 1,049 740 State taxes................................. 96 57 ----- ---- Deferred tax liabilities................. 1,145 797 ----- ---- Net deferred income tax liability..... $ 627 $386 ===== ====
TMCC has state tax net operating loss carryforwards of $536 million expiring from fiscal 1996 through 2008. -49- TOYOTA MOTOR CREDIT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 13 - Provision for Income Taxes (Continued) - ------------------------------------ A reconciliation between the provision for income taxes computed by applying the federal statutory tax rate to income before income taxes and actual income taxes provided is as follows:
Years ended September 30, ------------------------- 1995 1994 1993 ---- ---- ---- (Dollars in Millions) Provision for income taxes at federal statutory tax rate......... $105 $103 $88 State and local taxes (net of federal tax benefit)............... 26 17 8 Other, including changes in applicable state tax rates......... (14) (2) 1 ---- ---- --- Provision for income taxes......... $117 $118 $97 ==== ==== === Effective tax rate.................... 39.12% 40.24% 38.01%
Note 14 - Lines of Credit/Standby Letters of Credit - --------------------------------------------------- To support its commercial paper program, TMCC maintains syndicated bank credit facilities with certain banks which aggregated $1.5 billion at September 30, 1995. Interest is charged at certain market rates, at the option of TMCC. No loans were outstanding under any of these bank credit facilities. To facilitate and maintain letters of credit, TMCC maintains, along with TMS, uncommitted, unsecured lines of credit with banks totaling $300 million. At September 30, 1995, approximately $86 million in letters of credit had been issued, primarily related to the Company's insurance operations. The letters of credit for the insurance companies are used to satisfy requirements of certain insurance carriers and state insurance regulatory agencies, consistent with insurance industry practices. -50- TOYOTA MOTOR CREDIT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 15 - Commitments and Contingent Liabilities - ------------------------------------------------ At September 30, 1995, the Company was a lessee under lease agreements for facilities which provide minimum annual rental as follows: years ending September 30, 1996 - $8 million; 1997 - $7 million; 1998 - $6 million; 1999 - $5 million; 2000 - $3 million; and thereafter - $5 million. TMCC has guaranteed payments of principal and interest on $58 million principal amount of flexible rate demand pollution control revenue bonds maturing in 2006, issued in connection with the Kentucky manufacturing facility of an affiliate. Various legal actions, governmental proceedings and other claims are pending or may be instituted or asserted in the future against TMCC and its subsidiaries with respect to matters arising from the ordinary course of business. Certain of these actions are or purport to be class action suits. Certain of these actions are similar to suits which have been filed against other financial institutions and captive finance companies. At this time, the Company believes any resulting liability from the above legal actions, proceedings and other claims will not materially affect its consolidated financial position or results of operations. Note 16 - Selected Quarterly Financial Data (Unaudited) - -------------------------------------------------------
Total Depreciation Financing Interest on Operating Net Revenues Expense Leases Income ---------- -------- ------------ -------- (Dollars in Millions) Year Ended September 30, 1995: First quarter.............. $ 564 $161 $ 277 $ 44 Second quarter............. 601 175 298 45 Third quarter.............. 630 189 313 46 Fourth quarter............. 661 191 344 48 ------ ---- ------ ---- Total................... $2,456 $716 $1,232 $183 ====== ==== ====== ==== Year Ended September 30, 1994: First quarter.............. $ 370 $110 $139 $ 46 Second quarter............. 396 112 159 45 Third quarter.............. 446 125 196 39 Fourth quarter............. 517 139 241 45 ------ ---- ---- ---- Total................... $1,729 $486 $735 $175 ====== ==== ==== ====
-51- ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. There is nothing to report with regard to this item. -52- PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. The following table sets forth certain information regarding the directors and executive officers of TMCC. Name Age Position ---- --- -------- Shinji Sakai.............. 58 Director and President, TMCC; Director and President, TMS; Director, TMC Nobu Shigemi.............. 51 Director, Senior Vice President and Treasurer, TMCC; Group Vice President, TMS John McGovern............. 55 Director, Senior Vice President and Secretary, TMCC; Senior Vice President and Secretary, TMS Wolfgang Jahn............. 56 Director, Senior Vice President and General Manager, TMCC; Group Vice President, TMS Robert Pitts.............. 47 Director and Assistant Secretary, TMCC; Group Vice President, TMS Yale Gieszl............... 53 Director, TMCC; Director and Executive Vice President, TMS Takashi Nishiyama......... 52 Director, TMCC; Senior Vice President and Treasurer, TMS Ryuji Araki............... 55 Director, TMCC; Director, TMC 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 pleasure of the Board of Directors. Mr. Sakai was named Director and President of TMCC in June 1992. He is also a Director and President of TMS, positions he has held since June 1992. In September 1988, Mr. Sakai was named a Director of TMC, and from September 1988 to May 1992, he was General Manager of the North American Division of TMC. Mr. Sakai has been employed with TMC, in various positions, since 1961. Mr. Shigemi was named Director, Senior Vice President and Treasurer of TMCC and Group Vice President of TMS in September 1994. From January 1994 to August 1994, Mr. Shigemi was General Manager of TMC's Finance Division. From January 1993 to December 1993, he was the Project General Manager of the Accounting Division of TMC. From February 1982 to December 1992, he worked in the Tokyo Secretarial Division having been named a manager in February 1983 and Deputy General Manager in February 1990. Mr. Shigemi has been employed with TMC, in various positions, since 1968. -53- Mr. McGovern was named Director, Senior Vice President and Secretary of TMCC in January 1993. He is also a Senior Vice President and Secretary of TMS, positions he has held since January 1993. From January 1987 to November 1989, he was a Vice President and a General Manager of TMS, and from December 1989 to December 1992, he was a Group Vice President of TMS. Mr. McGovern has been employed with TMS, in various positions, since 1970. Mr. Jahn was named Director and Group Vice President of TMCC in April 1993. In December 1994, Mr. Jahn was also named General Manager of TMCC and Group Vice President of TMS and, in July 1995, Senior Vice President of TMCC. From January 1985 to March 1993, he was a Vice President of TMCC, and from September 1988 to March 1993, he was also the Assistant Secretary of TMCC. From January 1987 to March 1993, he held the position of Vice President of TMS. Mr. Jahn has been employed with TMS and TMCC, in various positions, since 1973. Mr. Pitts was named Director and Assistant Secretary of TMCC in April 1993. He is also a Group Vice President of TMS, a position he has held since April 1993. From January 1984 to March 1993, he was an executive with TMCC having been named General Manager in January 1984 and Vice President in April 1989. Mr. Pitts has been employed with TMS and TMCC, in various positions, since 1971. Mr. Gieszl was named Director of TMCC in September 1988. He is also a Director and Executive Vice President of TMS, positions he has held since December 1989 and June 1992, respectively. From January 1982 to May 1992, he was a Senior Vice President of TMS. From October 1982 to May 1992, he held the position of Senior Vice President of TMCC, and from September 1988 to May 1992, he also held the position of Secretary of TMCC. Mr. Gieszl has been employed with TMS, in various positions, since 1970. Mr. Nishiyama was named Director of TMCC in January 1994. He was also named a Senior Vice President and Treasurer of TMS in January 1994. From February 1989 to December 1993, he was General Manager of the Europe and Africa Project Division of TMC. From February 1986 to January 1989, he was Executive Vice President of Salvador Caetano S.A. Portugal. Mr. Nishiyama has been employed with TMC, in various positions, since 1965. Mr. Araki was named Director of TMCC in September 1995. He has served on TMC's Board of Directors since September 1992. Mr. Araki has been employed with TMC, in various positions, since 1962. ITEM 11. EXECUTIVE COMPENSATION. Summary Compensation Table The following table sets forth all compensation awarded to, earned by, or paid to the Company's principal executive officer and the most highly compensated executive officers whose salary and bonus for the latest fiscal year exceeded $100,000, for services rendered in all capacities to the Company for the three years ended September 30, 1995, 1994 and 1993. -54-
Annual Compensation -------------------------------------------- Other Annual Name and Fiscal Compensation All Principal Position Year Salary ($) Bonus ($) ($) Other ($) - --------------------- ------ ---------- --------- ------------ ------------- Wolfgang Jahn 1995 $213,800 $98,700 $6,000 Senior Vice President 1994 $199,800 $91,300 $7,500 1993 $123,900 $57,500 $7,000 Nobu Shigemi 1995 $199,000 $40,500 $47,300 Senior Vice President - ------------ Mr. Jahn has worked full-time for the Company since April 1993. Mr. Jahn's cash compensation for the periods prior to April 1993, included in the above table, represents an allocated amount of his total compensation based on his time spent working for the Company. Mr. Shigemi has worked full-time for the Company beginning in September 1994. This amount represents a housing allowance and relocation costs. The amounts in this column represent the Company's allocated contribution under the TMS Savings Plan. Mr. Jahn also received contributions from TMS, no portion of which is attributable to the Company. Under the TMS Savings Plan, which is open to all eligible employees, eligible participants may elect, subject to applicable law, to have up to 6% of their base compensation paid to the plan on a pre-tax basis and the Company will make a matching contribution equal to two-thirds of the employee's contribution. Participants are vested 25% each year with respect to the Company's contribution. Participants are fully vested after four years. Subject to the limitations of the TMS Savings Plan, employee and Company contributions are invested at the discretion of the employee in various investment options.
Employee Benefit Plan All full-time employees of the Company are eligible to participate in the TMS Pension Plan commencing on the first day of the month following hire. Benefits payable under this non-contributory defined benefit pension plan are based upon final average compensation, final average bonus and years of credited service. Final average compensation is defined as the average of the participant's base rate of pay, plus overtime, during the highest-paid 60 consecutive months prior to the earlier of termination or normal retirement. Final average bonus is defined as the highest average of the participant's fiscal year bonus, and basic seniority-based cash bonus for non-managerial personnel, over a period of 60 consecutive months prior to the earlier of termination or normal retirement. A participant generally becomes eligible for the normal retirement benefit at age 62, and may be eligible for early retirement benefits starting at age 55. -55- The annual normal retirement benefit, payable monthly, is an amount equal to the number of years of credited service (up to 25 years) multiplied by the sum of (i) 2% of the participant's final average compensation less 2% of the estimated annual Social Security benefit payable to the participant at normal retirement and (ii) 1% of the participant's final average bonus. The normal retirement benefit is subject to reduction for certain benefits under any union-sponsored retirement plan and benefits attributable to employer contributions under any defined-contribution retirement plan maintained by TMS and its subsidiaries or any affiliate. The following pension plan table presents typical annual retirement benefits under the TMS Pension Plan for various combinations of compensation and years of credited service for participants who retire at age 62, assuming no final average bonus and excluding Social Security offset amounts. The amounts are subject to Federal statutory limitations governing pension calculations and benefits.
Annual Benefits for Final Average Years of Credited Service Annual ------------------------------------- Compensation 15 20 25 ------------ ------- -------- -------- $50,000 $15,000 $20,000 $25,000 $100,000 $30,000 $40,000 $50,000 $150,000 $45,000 $60,000 $75,000 $200,000 $60,000 $80,000 $100,000 $250,000 $75,000 $100,000 $125,000 $300,000 $90,000 $120,000 $150,000 $350,000 $105,000 $140,000 $175,000 $400,000 $120,000 $160,000 $200,000
Mr. Jahn is a participant in the TMS Pension Plan and has 22 years of credited service as of September 30, 1995. Based upon years of credited service and the portion of earnings allocable to the Company, Mr. Jahn would be entitled to receive approximately $24,000 in annual pension benefit payments at age 62. Mr. Jahn would also be entitled to receive pension benefits from TMS based upon services to and compensation by TMS, no portion of which is attributable to the Company. Compensation of Directors No fees are paid to members of the Board of Directors of TMCC for their services as directors. Compensation Committee Interlocks and Insider Participation Members of the Executive Committee of the Board of Directors, which consists of the directors of the Company other than Mr. Araki, participate in decisions regarding the compensation of the executive officers of the Company. Certain of the members of the Executive Committee are current or former executive officers of the Company. Certain of the members of the Executive Committee are also current executive officers and directors of TMS and its affiliates and participate in compensation decisions for those entities. -56- ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. As of the date hereof, all of TMCC's capital stock is owned by TMS. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. The Company enters into various transactions with TMS as described below. Certain of the directors and executive officers of TMCC are also directors and executive officers of TMS. To maintain fixed charge coverage at the level specified in the Operating Agreement, TMS, on occasion, has made noninterest-bearing advances and income maintenance payments to TMCC. No such noninterest-bearing advances and income maintenance payments were made in fiscal 1995, 1994, 1993, 1992 and 1991. TMS also provides certain technical and administrative services and incurs certain expenses on the Company's behalf and, accordingly, allocates these charges to the Company. The charges, reimbursed by TMCC to TMS, totaled $8 million, $7 million, $6 million, $5 million and $4 million for the years ended September 30, 1995, 1994, 1993, 1992 and 1991, respectively. The Operating Agreement provides that TMCC will establish its own financing rates and is under no obligation to TMS to finance wholesale obligations from any dealers or retail obligations of any customers. TMCC may extend, reduce or cancel credit to dealers and to customers based upon TMCC's own credit criteria. Pursuant to the Operating Agreement, TMS will arrange for the repurchase of new Toyota and Lexus vehicles financed at wholesale by TMCC at the aggregate cost financed in the event of dealer default. TMS made equity contributions to TMCC by purchasing at par value all of the newly issued shares of TMCC's capital stock in the amount of $185 million, $50 million and $80 million for the years ended September 30, 1994, 1993 and 1992, respectively. TMS made no equity contributions to TMCC during fiscal 1995 or 1991. TMCC has an arrangement to borrow funds from TMS at rates which approximate the Federal Reserve Board's one-month commercial paper composite rate for firms whose bonds are rated AA. For the years ended September 30, 1995, 1994, 1993, 1992 and 1991, the highest amounts of borrowings from TMS outstanding at any one time were $34 million, $161 million, $117 million, $360 million and $81 million, respectively. The average amounts of borrowings from TMS were $6 million, $7 million, $56 million and $6 million for the years ended September 30, 1994, 1993, 1992 and 1991, respectively. Interest charges related to these interest-bearing borrowings from TMS were $0.3 million, $0.2 million, $2.3 million and $0.4 million for the years ended September 30, 1994, 1993, 1992, and 1991, respectively. The average amount of borrowings from TMS and the interest charges related to interest-bearing borrowings from TMS were immaterial for the year ended September 30, 1995. The Operating Agreement provides that borrowings from TMS are subordinated to all other indebtedness of TMCC. In the second quarter of fiscal 1993, the Company began leasing its headquarters facility from TMS. The amount of rent expense paid to TMS totaled $3 million, $3 million and $2 million for the years ended September 30, 1995, 1994 and 1993, respectively. -57- TMIS and TMICV provide certain insurance services, and insurance and reinsurance coverages, respectively, to TMS. Insurance premiums, commissions and fees earned during the years ended September 30, 1995, 1994, 1993, 1992 and 1991 included $4 million, $7 million, $9 million, $7 million and $5 million, respectively, related to these services and coverages. TMCC provides retail financing and leasing services related to various programs sponsored from time to time by TMS for the sale and lease of Toyota and Lexus vehicles and Toyota industrial equipment. During the years ended September 30, 1995, 1994, 1993, 1992 and 1991, TMCC recognized revenue of $134 million, $54 million, $25 million, $16 million and $7 million, respectively, related to the amounts received from TMS and, in some cases, dealers for these programs. TMCC provides certain leasing and financing services to TMS. For the years ended September 30, 1995, 1994, 1993, 1992 and 1991, TMCC recognized revenue of $3 million, $3 million, $3 million, $4 million and $7 million, respectively, related to these services. TMCC has guaranteed payments of principal and interest on $58 million principal amount of flexible rate demand pollution control revenue bonds maturing in 2006, issued in connection with the Kentucky manufacturing facility of an affiliate. The Company joins with TMS in filing consolidated federal income tax returns and combined or consolidated income tax returns in certain states. See Item 8, Note 2 to the Consolidated Financial Statements. TMCC's cash equivalents, which are invested along with TMS, consist primarily of money market instruments. For the years ended September 30, 1995, 1994, 1993, 1992 and 1991, the highest amounts of cash equivalents, invested along with TMS, were $603 million, $326 million, $515 million, $153 million and $328 million, respectively. The average amounts of cash equivalents, invested along with TMS, were $205 million, $119 million, $224 million, $36 million and $127 million for the years ended September 30, 1995, 1994, 1993, 1992 and 1991, respectively. Interest earned related to these cash equivalents was $16 million, $5 million, $6 million, $2 million and $12 million for the years ended September 30, 1995, 1994, 1993, 1992 and 1991, respectively. On occasion, the Company enters into various other transactions with TMS. The Company believes that the terms of such transactions have been established as if negotiated on an "arms-length" basis, and that all such transactions are not, in the aggregate, material to either TMS or the Company. -58- PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K. (a)(1)Financial Statements Included in Part II, Item 8 of this Form 10-K. See Index to Financial Statements on page 20. (2)Exhibits The exhibits listed on the accompanying Exhibit Index, starting on page 61, are filed as part of, or incorporated by reference into, this Report. (b)Reports on Form 8-K There were no reports on Form 8-K filed by the registrant during the quarter ended September 30, 1995. -59- 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 22nd day of December, 1995. TOYOTA MOTOR CREDIT CORPORATION By /S/ WOLFGANG JAHN ------------------------------ Wolfgang Jahn Senior Vice President and General Manager 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 indicated on the 22nd day of December, 1995. Signature Title --------- ----- Senior Vice President and General Manager and Director /S/ WOLFGANG JAHN (principal executive officer) - ------------------------------------ Wolfgang Jahn Senior Vice President/ Treasurer and Director /S/ NOBU SHIGEMI (principal financial officer) - ------------------------------------ Nobu Shigemi Corporate Manager - Finance and Administration /S/ PATRICK BREENE (principal accounting officer) - ------------------------------------ Patrick Breene /S/ SHINJI SAKAI Director - ------------------------------------ Shinji Sakai /S/ JOHN MCGOVERN Director - ------------------------------------ John McGovern /S/ TAKASHI NISHIYAMA Director - ------------------------------------ Takashi Nishiyama -60- EXHIBIT INDEX Method Exhibit of Number Description 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 January 16, 1993. (11) 4.2 Issuing and Paying Agency Agreement dated August 1, 1990 between TMCC and Bankers Trust Company. (3) 4.3(a) Indenture dated as of August 1, 1991 between TMCC and The Chase Manhattan Bank, N.A. (4) - ----------------- (1) Incorporated herein by reference to the same numbered Exhibit filed with TMCC's Registration Statement on Form S-1, File No. 33-22440. (2) Incorporated herein by reference to the same numbered Exhibit filed with TMCC's Report on Form 10-K for the year ended September 30, 1989. (3) Incorporated herein by reference to the same numbered Exhibit filed with TMCC's Report on Form 10-K for the year ended September 30, 1990. (4) Incorporated herein by reference to Exhibit 4.1(a), filed with TMCC's Registration Statement on Form S-3, File No. 33-52359. (11) Incorporated herein by reference to the same numbered Exhibit filed with TMCC's Report on Form 10-K for the year ended September 30, 1993. -61- EXHIBIT INDEX Method Exhibit of Number Description Filing - ------- ----------- ------ 4.3(b) First Supplemental Indenture dated as of October 1, 1991 among TMCC, Bankers Trust Company and The Chase Manhattan Bank, N.A. (5) 4.4(a) Amended and Restated Agency Agreement dated as of July 28, 1994, among TMCC, The Chase Manhattan Bank, N.A. and Chase Manhattan Bank Luxembourg S.A. (12) 4.4(b) Amendment No. 1 dated July 27, 1995 to the Amended Filed and Restated Agency Agreement among TMCC, The Chase Herewith Manhattan Bank, N.A. and Chase Manhattan Bank Luxenburg S.A. 4.5 TMCC has outstanding certain long-term debt as set forth in Note 9 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, 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% 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 Operating Agreement dated January 16, 1984 between TMCC and TMS. (1) 10.2 Financial Service Agreement dated December 21, 1984 between TMCC and World Omni Financial Corporation, as amended June 6, 1988. (1) 10.2(a) Addendum to Financial Services Agreement dated January 1, 1991, between TMCC and World Omni Financial Corporation. (6) - ----------------- (1) Incorporated herein by reference to the same numbered Exhibit filed with TMCC's Registration Statement on Form S-1, File No. 33-22440. (5) Incorporated herein by reference to Exhibit 4.1 filed with TMCC's Current Report on Form 8-K dated October 16, 1991. (6) Incorporated herein by reference to the same numbered Exhibit filed with TMCC's Report on Form 10-K for the year ended September 30, 1991. (12) Incorporated herein by reference to the same numbered Exhibit filed with TMCC's Report on Form 10-K for the year ended September 30, 1994. -62- EXHIBIT INDEX Method Exhibit of Number Description Filing - ------- ----------- ------ 10.2(b) Amendment to Financial Services Agreement dated March 1, 1992, between TMCC and World Omni Financial Corporation. (7) 10.2(c) Amendment to Financial Services Agreement dated March 1, 1994, between TMCC and World Omni Financial Corporation. (12) 10.4 Pooling and Servicing Agreement among TMCRC, as Seller, TMCC, as Servicer, and Bankers Trust Company, as Trustee (including forms of Class A and Class B Certificates) dated as of September 1, 1995. (13) 10.5 Receivables Purchase Agreement dated as of September 1, 1995 between TMCC, as seller, and TMCRC Corporation, as purchaser. (14) 10.6 Form of Indemnification Agreement between TMCC and its directors and officers. (1) 10.7 Form of Pooling and Servicing Agreement among TMCRC as Seller, TMCC as Servicer, and the Chase Manhattan Bank N.A. as Trustee (including forms of Class A and Class B Certificates). (8) 10.8 Form of Standard Terms and Conditions of Pooling and Servicing Agreement. (9) - ---------------- (1) Incorporated herein by reference to the same numbered Exhibit filed with TMCC's Registration Statement on Form S-1, File No. 33-22440. (7) Incorporated herein by reference to the same numbered Exhibit filed with TMCC's Report on Form 10-K for the year ended September 30, 1992. (8) Incorporated herein by reference to Exhibit 4.1 filed with Toyota Auto Receivables 1993-A Grantor Trust's Registration Statement on Form S-1, File No. 33-65348. (9) Incorporated herein by reference to Exhibit 4.2 filed with Toyota Auto Receivables 1993-A Grantor Trust's Registration Statement on Form S-1, File No. 33-65348. (12) Incorporated herein by reference to the same numbered Exhibit filed with TMCC's Report on Form 10-K for the year ended September 30, 1994. (13) Incorporated herein by reference to Exhibit 4.1 filed with Toyota Auto Receivables 1995-A Grantor Trust's Current Report on Form 8-K dated November 10, 1995, File No. 33-96006. (14) Incorporated herein by reference to Exhibit 10.1 filed with Toyota Auto Receivables 1995-A Grantor Trust's Current Report on Form 8-K dated November 10, 1995, File No. 33-96006. -63- EXHIBIT INDEX Method Exhibit of Number Description Filing - ------- ----------- ------ 10.9 Form of Receivables Purchase Agreement. (10) 10.10 Three-year Credit Agreement (the "Three-year Agreement") dated as of September 29, 1994 among TMCC, Morgan Guaranty Trust Company of New York, as agent, and Bank of America National Trust and Savings Association, The Bank of Tokyo, Ltd., The Chase Manhattan Bank, N.A., Citicorp USA, Inc. and Credit Suisse, as Co-Agents. Not filed herein as an exhibit, pursuant to Instruction 2 to Item 601 of Regulation S-K under the Securities Act of 1933, is the 364-day Credit Agreement (the "364-day Agreement") among TMCC and the banks who are party to the Three-year Agreement. Filed herewith is a Schedule identifying the 364-day Agreement and setting forth the material details in which the 364-day Agreement differs from the Three-year Agreement. TMCC agrees to furnish a copy of the 364-day Agreement to the Securities and Exchange Commission upon request. (12) 10.10(a) Amendment No. 1 dated September 28, 1995 to the Filed Three-year Agreement. Herewith 10.10(b) Amendment No. 1 dated September 28, 1995 to the Filed 364-day Agreement. Herewith - ---------------- (10) Incorporated herein by reference to Exhibit 10.1 filed with Toyota Auto Receivables 1993-A Grantor Trust's Registration Statement on Form S-1, File No. 33-65348. (12) Incorporated herein by reference to the same numbered Exhibit filed with TMCC's Report on Form 10-K for the year ended September 30, 1994. -64- EXHIBIT INDEX Method Exhibit of Number Description Filing - ------- ----------- ------ 12.1 Calculation of ratio of earnings to fixed charges. Filed Herewith 21.1 TMCC's list of subsidiaries. Filed Herewith 23.1 Consent of Independent Accountants. Filed Herewith 27.1 Financial Data Schedule. Filed Herewith -65- EX-4.4(B) 2 AMENDMENT NO. 1 TO EURO MTN AGENCY AGREEMENT Exhibit 4.4(b) AMENDMENT NO. 1 TO THE AMENDED AND RESTATED AGENCY AGREEMENT in respect of THE TOYOTA MOTOR CREDIT CORPORATION EURO MEDIUM-TERM NOTE PROGRAM This Amendment No. 1, dated as of July 27, 1995, is made to the Amended and Restated Agency Agreement (the "Agreement"), dated as of July 28, 1994, among Toyota Motor Credit Corporation, as Issuer, The Chase Manhattan Bank, N.A., as Agent, and Chase Manhattan Bank Luxembourg S.A., as Paying Agent, in respect of Toyota Motor Credit Corporation's Euro Medium-Term Note Program. Except as otherwise defined herein, capitalized terms used herein shall have the same meanings ascribed to them in the Agreement. WHEREAS, effective July 28, 1995 the Company desires to increase the maximum aggregate principal amount of all Notes from time to time outstanding under the Program from U.S. $6,500,000,0000 to U.S. $9,500,000,000 (or its equivalent in other currencies); and WHEREAS, the Company, the Agent and the Paying Agent desire to amend the Agreement to reflect the increase in issuance capacity under the Program and to make certain additional changes to cure certain ambiguities and/or to correct or supplement certain provisions of the Agreement in a manner which shall not adversely affect existing holders of the Notes. NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree to amend the Agreement as follows: A. The Company, the Agent and the Paying Agent hereby agree that effective July 28, 1995 the maximum aggregate principal amount of all Notes from time to time outstanding under the Program shall be increased from U.S. $6,500,000,000 to U.S. $9,500,000,000 (or its equivalent in other currencies or currency units). B. Clause 1 of the Agreement (Definitions and interpretation) is amended as follows: 1. The definition of "Cedel" is amended and restated in its entirety to read as follows: "Cedel" means Cedel Bank, societe anonyme. 2. The definition of "Dealer" is amended by changing the name "Merrill Lynch Finance S.A." to "Merrill Lynch Finance SA" and by inserting the name "Goldman Sachs International" immediately after the name "CS First Boston Limited" and inserting the name "Morgan Stanley & Co. International Limited" immediately after the name "Merrill Lynch Finance SA". 3. The definition of "Listing Agent" is amended by deleting the reference to "Merrill Lynch Finance S.A. of 96, avenue d'lena, 75016" and inserting in its stead "Merrill Lynch Finance SA of 96, avenue d'lena, 75116". C. Clause 2 (Appointment of Agent and Paying Agents) is amended by reordering Subclause (1)(h) to (1)(i), adding a new Subclause (1)(h) as follows: "(h) upon certification by the participating Dealer or Dealers to the Agent that the distribution with respect to a particular Tranche of Notes has been completed, determining and certifying to Cedel, Euroclear or such other applicable clearing agency the applicable Exchange Date;" ;and by adding the following new paragraph immediately after Subclause (1)(i): "Any of the duties and obligations of the Agent in its capacity of issuing and principal paying agent set forth in subclauses (a), (b), (c), (d), (e), (g), (h) and (i) may, with the consent of the Company, be delegated by the Agent with respect to a particular Series of Notes to a third party, provided such third party's performance is subject to the overall supervision and control of the Agent." D. Clause 3 (Issue of Temporary Global Notes) is amended by adding the following new subclause 3(4): "Any of the duties and obligations of the Agent set forth in this Clause 3 may, with the consent of the Company, be delegated by the Agent with respect to a particular Series of Notes to a third party, provided such third party's performance is subject to the overall supervision and control of the Agent." E. Clause 4 (Issue of Permanent Global Notes) is amended by adding the following new subclause 4(4): 2 "Any of the duties and obligations of the Agent set forth in this Clause 4 may, with the consent of the Company, be delegated by the Agent with respect to a particular Series of Notes to a third party, provided such third party's performance is subject to the overall supervision and control of the Agent." F. Clause 5 (Issue of Definitive Notes) is amended by adding the following new subclause 5(3): "Any of the duties and obligations of the Agent set forth in this Clause 5 may, with the consent of the Company, be delegated by the Agent with respect to a particular Series of Notes to a third party, provided such third party's performance is subject to the overall supervision and control of the Agent." G. Clause 6 (Exchanges) is amended by adding the following new sentence at the end of Clause 6: "Any of the duties performed by the Agent under this Clause 6 may, with the consent of the Company, be delegated by the Agent with respect to a particular Series of Notes to a third party, provided such third party's performance is subject to the overall supervision and control of the Agent." H. Clause 11 (Duties of the Agent in connection with early redemption) is amended by deleting the period at the end of Subclause 11(1) and inserting the following words at the end of such Clause: "or such shorter period that is acceptable to the Agent". I. APPENDIX A (Terms and Conditions) shall be amended and restated in its entirety as set forth in Exhibit I attached to this Amendment. J. APPENDIX B (Forms of Global and Definitive Notes, Coupons, Receipts and Talons) shall be amended and restated in its entirety as set forth in Exhibit II attached to this Amendment. K. APPENDIX C (Form of Calculation Agency Agreement) shall be amended and restated in its entirety as set forth in Exhibit III attached to this Amendment. L. APPENDIX D (Form of Operating & Administrative Procedures Memorandum) shall be amended and restated in its entirety as set forth in Exhibit IV attached to this Amendment. 3 M. APPENDIX E (Form of the Notes) shall be amended and restated in its entirety as set forth in Exhibit V attached to this Amendment. N. This Amendment No. 1 may be executed in one or more counterparts all of which shall constitute one and the same agreement. From and after the date hereof, this Amendment No. 1 shall be deemed to be part of the Agreement. 4 IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 1 to the Agreement as of the date first written above. THE COMPANY Toyota Motor Credit Corporation 19001 South Western Avenue Torrance, California 90509 Telephone: 310-787-3420 Fax: 310-787-6194 Attention: Senior Vice President and General Manager /S/ WOLFGANG JAHN - -------------------------------- By: Wolfgang Jahn Title: Senior Vice President and General Manager THE AGENT The Chase Manhattan Bank, N.A. Woolgate House Coleman Street P.O. Box 16 London EC2P 2HD Telephone: 01202 347430 Fax: 01202 347438 Telex: 8954681 CMB G Attention: Manager, Corporate Trust Operations /S/ SALLY P. EASTON - -------------------------------- By: Sally P. Easton Title: Vice President THE OTHER PAYING AGENT Chase Manhattan Bank Luxembourg S.A. 5 Rue Plaetis L-2338 Luxembourg Telephone: 00 352 462685223 Fax: 00 352 462685380 Telex: 1223 CHAS LU Attention: Manager, Corporate Trust Operations /S/ SALLY P. EASTON - -------------------------------- By: Sally P. Easton Title: Vice President 5 Exhibit I to Amendment No. 1 to the Amended and Restated Agency Agreement APPENDIX A ---------- TERMS AND CONDITIONS I-1 TERMS AND CONDITIONS OF THE NOTES The following are the Terms and Conditions of the Notes issued on or after the date of this Offering Circular which (subject to completion and amendment and to the extent applicable) will be attached to or incorporated by reference into each global Note and which will be incorporated by reference or endorsed upon each definitive Note. The applicable Pricing Supplement in relation to any Notes may specify other terms and conditions which shall, to the extent so specified or to the extent inconsistent with the following Terms and Conditions, replace or modify the following Terms and Conditions for the purpose of such Notes. This Note is one of a Series (as defined below) of Notes (the "Notes," which expression shall mean (i) in relation to any Notes represented by a global Note, units of the lowest Specified Denomination in the Specified Currency of the relevant Notes, (ii) definitive Notes issued in exchange (or partial exchange) for a temporary or permanent global Note, and (iii) any global Note) issued subject to, and with the benefit of, an Amended and Restated Agency Agreement dated as of July 28, 1994, as amended (the "Agency Agreement"), and made between Toyota Motor Credit Corporation ("TMCC", which reference does not include the subsidiaries of TMCC) and The Chase Manhattan Bank, N.A., London Office, as issuing agent and principal paying agent and, if so specified in the applicable Pricing Supplement, as calculation agent (the "Agent", which expression shall include any successor agent or any other calculation agent specified in the applicable Pricing Supplement) and the other paying agents named therein (together with the Agent, the "Paying Agents", which expression shall include any additional or successor paying agents). Interest-bearing definitive Notes will (unless otherwise indicated in the applicable Pricing Supplement) have interest coupons ("Coupons") and, if indicated in the applicable Pricing Supplement, talons for further Coupons ("Talons") attached on issue. Any reference herein to Coupons or coupons shall, unless the context otherwise requires, be deemed to include a reference to Talons or talons. Definitive Notes repayable in installments will have receipts ("Receipts") for the payment of the installments of principal (other than the final installment) attached on issue. I-2 As used herein, "Series" means all Notes which are denominated in the same currency and which have the same Maturity Date or Redemption Month, as the case may be, Interest/Payment Basis and interest payment dates (if any) (all as indicated in the applicable Pricing Supplement) and the terms of which (except for the Issue Date or the Interest Commencement Date (as the case may be) and/or the Issue Price (as indicated as aforesaid)) are otherwise identical (including whether or not the Notes are listed) and the expressions "Notes of the relevant Series" and "holders of Notes of the relevant Series" and related expressions shall be construed accordingly. As used herein, "Tranche" means all Notes of the same Series with the same Issue Date and Interest Commencement Date (if applicable). If indicated in the applicable Pricing Supplement, TMCC may, from time to time without the consent of the holders of Notes of a Series, create and issue further Notes of the same Series. The Pricing Supplement applicable to any particular Note or Notes is attached hereto or endorsed hereon and supplements these Terms and Conditions and may specify other terms and conditions which shall, to the extent so specified or to the extent inconsistent with these Terms and Conditions, replace or modify these Terms and Conditions for the purposes of such Note or Notes. References herein to the "applicable Pricing Supplement" shall mean the Pricing Supplement attached hereto or endorsed hereon. Copies of the Agency Agreement (which contains the form of Pricing Supplement) and the Pricing Supplement applicable to any particular Note or Notes (if listed) are available for inspection at the specified offices of the Agent and each of the other Paying Agents. The holders of the Notes (the "Noteholders"), which expression shall, in relation to any Notes represented by a global Note, be construed as provided in Condition 1, the holders of the Coupons (the "Couponholders") and the holders of Receipts (the "Receiptholders") are deemed to have notice of, and are entitled to the benefit of, all the provisions of the Agency Agreement and the applicable Pricing Supplement, which are binding on them. Words and expressions defined in the Agency Agreement, defined elsewhere in the Offering Circular or used in the applicable Pricing Supplement shall have the same meanings where used in these Terms and Conditions unless the context otherwise requires or unless otherwise stated. 1. FORM, DENOMINATION AND TITLE The Notes in this Series are in bearer form and, in the case of definitive Notes, serially numbered in the Specified Currency and in the Specified Denomination(s) specified in the applicable Pricing Supplement. This Note is a Fixed Rate Note, a Floating Rate Note, a Zero Coupon Note, a Dual Currency Note or an Indexed Note or any combination of the foregoing, depending upon the Interest/Payment Basis specified in the applicable Pricing Supplement. It is also a Partly Paid Note and/or an Indexed Note (where payment with respect to principal is linked to an Index and/or formula) if, in each case, the applicable Pricing Supplement so indicates and the appropriate provisions of these Terms and Conditions will apply accordingly. I-3 Notes in definitive form are issued with Coupons attached, unless they are Zero Coupon Notes in which case references to interest (other than interest due after the Maturity Date), Coupons and Couponholders in these Terms and Conditions are not applicable. Except as set out below, title to the Notes, Receipts and Coupons will pass by delivery. TMCC and any Paying Agent may deem and treat the bearer of any Note, Receipt or Coupon as the absolute owner thereof (whether or not overdue and notwithstanding any notice of ownership or writing thereon or notice of any previous loss or theft thereof) for all purposes but, in the case of any global Note, without prejudice to the provisions set out in the next succeeding paragraph. For so long as any of the Notes are represented by a global Note, each person who is for the time being shown in the records of Morgan Guaranty Trust Company of New York, Brussels office, as operator of the Euroclear System ("Euroclear") or of Cedel Bank, societe anonyme ("Cedel") and any other additional or alternative clearance system, including SICOVAM, as the holder of a particular principal amount of Notes (in which regard any certificate or other document issued by Euroclear or Cedel as to the principal amount of such Notes standing to the account of any person shall be conclusive and binding for all purposes except in the case of manifest error) shall be treated by TMCC, the Agent and any other Paying Agent as the holder of such principal amount of such Notes for all purposes other than with respect to the payment of principal or interest on the Notes, the right to which shall be vested, as against TMCC, the Agent and any other Paying Agent solely in the bearer of the relevant global Note in accordance with and subject to its terms (and the expressions "Noteholder" and "holder of Notes" and related expressions shall be construed accordingly). Notes which are represented by a global Note will be transferable only in accordance with the rules and procedures for the time being of Euroclear or of Cedel, as the case may be. Any reference herein to Euroclear and/or Cedel shall, whenever the context so permits, be deemed to include a reference to any additional or alternative clearance system (including, if applicable, SICOVAM) approved by TMCC and the Agent. 2. STATUS OF NOTES The Notes will be unsecured general obligations of TMCC and will rank pari passu with all other unsecured and unsubordinated indebtedness for borrowed money of TMCC from time to time outstanding. 3. COMPOSITION OF THE ECU Subject to the provisions of Condition 6(c), the value and composition of the ECU in which any Notes are denominated, or, in the case of Dual Currency Notes payable in ECU, in which any such Notes are payable, as the case may be, will be the same as the composition of the European Currency Unit that is from time to time used as the unit of account of the European Communities (the "EC"). I-4 Pursuant to Council Regulation (EEC) No. 3320/94 of 22nd December, 1994 the ECU is at present defined as the sum of the following components: 0.6242 German mark 0.130 Luxembourg franc 0.08784 Pound sterling 0.1976 Danish krone 1.332 French francs 0.008552 Irish pound 151.8 Italian lire 1.440 Greek drachmas 0.2198 Dutch guilder 6.885 Spanish pesetas 3.301 Belgian francs 1.393 Portuguese escudos 4. INTEREST (a) INTEREST ON FIXED RATE NOTES (i) Each Fixed Rate Note bears interest on its principal amount from (and including) the Interest Commencement Date which is specified in the applicable Pricing Supplement at the rate(s) per annum equal to the Fixed Rate(s) of Interest specified in the applicable Pricing Supplement payable in arrears on the Fixed Interest Date(s) in each year and on the Maturity Date so specified if it does not fall on a Fixed Interest Date. The first payment of interest shall be made on the Fixed Interest Date next following the Interest Commencement Date and, if the first anniversary of the Interest Commencement Date is not a Fixed Interest Date, will amount to the Initial Broken Amount specified in the applicable Pricing Supplement. If the Maturity Date is not a Fixed Interest Date, interest from (and including) the preceding Fixed Interest Date (or the Interest Commencement Date) to (but excluding) the Maturity Date will amount to the Final Broken Amount specified in the applicable Pricing Supplement. Unless otherwise specified in the applicable Pricing Supplement, if any Fixed Interest Date or Maturity Date would otherwise fall on a day which is not a Business Day (as defined in the last paragraph of this Condition 3(a)), it shall be postponed to the next day which is a Business Day, and no interest will accrue on the amount so payable for the period from and after such Fixed Interest Date or Maturity Date, as the case may be. (ii) If interest is required to be calculated for a period of less than a full year, such interest shall be calculated on the basis of a 360-day year consisting of 12 months of 30 days each and, in the case of an incomplete month, the number of days elapsed or as otherwise specified in the applicable Pricing Supplement. (b) INTEREST ON FLOATING RATE NOTES (i) Interest Payment Dates Each Floating Rate Note bears interest on its principal amount (or, if it is a Partly Paid Note, the amount paid up) from (and including) the Interest Commencement Date specified in the applicable Pricing Supplement and such interest will be payable in arrears on each interest payment date (each an "Interest Payment Date") which (except as otherwise specified in these Terms and Conditions or the applicable Pricing Supplement) falls the number of months or other period specified as the Interest Period in the applicable Pricing Supplement after the preceding Interest Payment Date or, in the case of the first Interest Payment Date, after the Interest Commencement Date. Unless otherwise specified in the applicable Pricing Supplement, if any Interest Payment Date would otherwise fall on a day which is not a Business Day (as defined below), it shall be postponed to the next day which is a I-5 Business Day unless it would thereby fall into the next calendar month in which event the Interest Payment Date shall be brought forward to the immediately preceding Business Day and, thereafter, each subsequent Interest Payment Date shall be the last Business Day of the last month of each subsequent Interest Period. In this Condition 4, "Business Day" means (unless otherwise stated in the applicable Pricing Supplement) a day which is both: (A) a day (other than a Saturday or a Sunday) on which commercial banks and foreign exchange markets settle payments in London and/or any other location specified in the applicable Pricing Supplement; and (B) either (1) in relation to Notes denominated in a Specified Currency other than ECU, a day on which commercial banks and foreign exchange markets settle payments in the principal financial center of the country of the relevant Specified Currency (if other than London) or (2) in relation to Notes denominated in ECU, an ECU Settlement Date (as defined in the 1991 ISDA Definitions, as amended and updated as of the Issue Date of this Note, published by the International Swaps and Derivatives Association, Inc. (the "ISDA Definitions")). Unless otherwise provided in the applicable Pricing Supplement, the principal financial center of any country for the purpose of these Terms and Conditions shall be as provided in the ISDA Definitions (except in the case of New Zealand and Luxembourg, where the principal financial center will be as specified in the Pricing Supplement). (ii) Rate of Interest The Rate of Interest payable from time to time in respect of each Series of Floating Rate Notes shall be determined in the manner specified in the applicable Pricing Supplement. (iii) ISDA Determination (A) Where ISDA Determination is specified in the applicable Pricing Supplement as the manner in which the Rate of Interest is to be determined, the Rate of Interest shall be determined on such dates and at such rates as would have been determined by TMCC if it had entered into an interest rate swap transaction governed by an agreement (regardless of any event of default or termination event thereunder) in the form of the 1992 ISDA Master Agreement (Multicurrency - Cross Border) (the "ISDA Agreement") (copyright 1992) and evidenced by a Confirmation (as defined in the ISDA Agreement) incorporating the ISDA Definitions with the holder of the relevant Note under which: (1) the manner in which the Rate of Interest is to be determined is the "Floating Rate Option"; (2) TMCC is the "Floating Rate Payer"; (3) the Agent or other person specified in the applicable Pricing Supplement is the "Calculation Agent"; I-6 (4) the Interest Commencement Date is the "Effective Date"; (5) the aggregate principal amount of the Series is the "Notional Amount"; (6) the relevant Interest Period is the "Designated Maturity"; (7) the Interest Payment Dates are the "Floating Rate Payer Payment Dates"; (8) the Margin is the "Spread"; and (9) all other terms are as specified in the applicable Pricing Supplement. (B) When Condition 4(b)(iii)(A) applies, with respect to each relevant Interest Payment Date: (1) the amount of interest determined for such Interest Payment Date shall be the Interest Amount for the relevant Interest Period for the purposes of these Terms and Conditions as though calculated under Condition 4(b)(vi) below; and (2) the Rate of Interest for such Interest Period shall be the Floating Rate (as defined in the ISDA Definitions) determined by the Agent (or such other agent specified in the applicable Pricing Supplement) in accordance with Condition 4(b)(iii)(A), plus or minus (as indicated in the applicable Pricing Supplement), the applicable Margin (if any). (iv) Screen Determination Screen Rate Determination: Where Screen Rate Determination is specified in the applicable Pricing Supplement as the manner in which the Rate of Interest is to be determined, the Rate of Interest for each Interest Period will be either: (x) the quotation; or (y) the arithmetic mean (rounded, if necessary, to the fourth decimal place with 0.00005 being rounded upwards) of the offered quotations, (expressed as a percentage rate per annum), for deposits in the Specified Currency for that Interest Period which appears or appear, as the case may be, on the appropriate page of the Screen as at 11:00 a.m. (London time) on the Interest Determination Date (as defined below) in question plus or minus (as specified in the applicable Pricing Supplement) the Margin (if any), all as determined by the Agent; (A) if, in the case of (x) above, no such rate appears or, in the case of (y) above, fewer than two of such offered rates appear at such time or if the offered rate or rates which appears or I-7 appear, as the case may be, as at such time do not apply to a period of a duration equal to the relevant Interest Period, the Rate of Interest for such Interest Period shall, subject as provided below and except as otherwise indicated in the applicable Pricing Supplement, be the arithmetic mean (rounded, if necessary, to the fourth decimal place with 0.00005 being rounded upwards) of the offered quotations (expressed as a percentage rate per annum), of which the Agent is advised by all Reference Banks (as defined below) as at 11:00 a.m. (London time) on the Interest Determination Date plus or minus (as specified in the applicable Pricing Supplement) the Margin (if any), all as determined by the Agent; (B) except as otherwise indicated in the applicable Pricing Supplement, if on any Interest Determination Date to which Condition 4(b)(iv)(A) applies two or three only of the Reference Banks advise the Agent of such offered quotations, the Rate of Interest for the next Interest Period shall, subject as provided below, be determined as in Condition 4(b)(iv)(A) on the basis of the rates of those Reference Banks advising such offered quotations; (C) if on any Interest Determination Date to which Condition 4(b)(iv)(A) applies one only or none of the Reference Banks advises the Agent of such rates, the Rate of Interest for the next Interest Period shall, subject as provided below and except as otherwise indicated in the applicable Pricing Supplement, be whichever is the higher of: (1) the Rate of Interest in effect for the last preceding Interest Period to which Condition 4(b)(iv)(A) shall have applied (plus or minus (as specified in the applicable Pricing Supplement), where a different Margin is to be applied to the next Interest Period than that which applied to the last preceding Interest Period, the Margin relating to the next Interest Period in place of the Margin relating to the last preceding Interest Period); or (2) the reserve interest rate (the "Reserve Interest Rate") which shall be the rate per annum which the Agent determines to be either (x) the arithmetic mean (rounded, if necessary, to the fourth decimal place with 0.00005 being rounded upwards) of the lending rates for the Specified Currency which banks selected by the Agent in the principal financial center of the country of the Specified Currency (which, if Australian dollars, shall be Sydney and if New Zealand dollars, shall be Wellington) are quoting on the relevant Interest Determination Date for the next Interest Period to the Reference Banks or those of them (being at least two in number) to which such quotations are, in the opinion of the Agent, being so made plus or minus (as specified in the applicable Pricing Supplement) the Margin (if any), or (y) in the event that the Agent can determine no such arithmetic mean, the lowest I-8 lending rate for the Specified Currency which banks selected by the Agent in the principal financial center of the country of the Specified Currency (which, if Australian dollars, shall be Sydney and if New Zealand dollars, shall be Wellington) are quoting on such Interest Determination Date to leading European banks for the next Interest Period plus or minus (as specified in the applicable Pricing Supplement) the Margin (if any), provided that if the banks selected as aforesaid by the Agent are not quoting as mentioned above, the Rate of Interest shall be the Rate of Interest specified in (1) above; (D) the expression "the appropriate page of the Screen" means such page, whatever its designation, on which London Interbank Offered Rates or, if there is only one such rate, that rate for deposits in the Specified Currency of prime banks that are for the time being displayed on the Reuters Monitor Money Rates Service or the appropriate Associated Press-Dow Jones Tele-rate Service, as specified in the applicable Pricing Supplement; (E) unless otherwise specified in the applicable Pricing Supplement, the Reference Banks will be the principal London offices of The Chase Manhattan Bank, N.A., National Westminster Bank PLC, Swiss Bank Corporation and The Bank of Tokyo, Ltd. TMCC shall procure that, so long as any Floating Rate Note to which Condition 4(b)(iv)(A) is applicable remains outstanding, in the case of any bank being unable or unwilling to continue to act as a Reference Bank, TMCC shall specify the London office of some other leading bank engaged in the Eurodollar market to act as such in its place; (F) the expression "Interest Determination Date" means, unless otherwise specified in the applicable Pricing Supplement, (x) other than in the case of Condition 4(b)(iv)(A), with respect to Notes denominated in any Specified Currency other than sterling, the second Banking Day in London prior to the commencement of the relevant Interest Period and, in the case of Condition 4(b)(iv)(A), the second Banking Day in the principal financial center of the country of the Specified Currency (which, if Australian dollars, shall be Sydney and if New Zealand dollars, shall be Wellington) prior to the commencement of the relevant Interest Period and (y) with respect to Notes denominated in sterling, the first Banking Day in London of the relevant Interest Period; and (G) the expression "Banking Day" means, in respect of any place, any day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) in that place or, as the case may be, as indicated in the applicable Pricing Supplement. I-9 (v) Minimum and/or maximum Rate of Interest If the applicable Pricing Supplement specifies a minimum Rate of Interest for any Interest Period, then in no event shall the Rate of Interest for such period be less than such minimum Rate of Interest. If the applicable Pricing Supplement specifies a maximum Rate of Interest for any Interest Period, then in no event shall the Rate of Interest for such Interest Period be greater than such maximum Rate of Interest. (vi) Determination of Rate of Interest and calculation of Interest Amount The Agent will, at or as soon as practicable after each time at which the Rate of Interest is to be determined, determine the Rate of Interest (subject to any minimum or maximum Rate of Interest specified in the applicable Pricing Supplement) and calculate the amount of interest (the "Interest Amount") payable on the Floating Rate Notes in respect of each Specified Denomination for the relevant Interest Period. Each Interest Amount shall be calculated by applying the Rate of Interest to the Specified Denomination, multiplying such product by the actual number of days in the Interest Period concerned divided by 360 (or 365/366 in the case of Floating Rate Notes denominated in sterling), or such other denominator determined by the Agent to be customary for such calculation or otherwise specified in the applicable Pricing Supplement, and rounding the result and figure to the nearest cent (or its approximate equivalent in the relevant other Specified Currency), half a cent (or its approximate equivalent in the relevant other Specified Currency) being rounded upwards. Without prejudice to subparagraph (viii) below, the determination of the Rate of Interest and calculation of each Interest Amount by the Agent shall (in the absence of manifest error) be binding on all parties. (vii) Notification of Rate of Interest and Interest Amount The Agent will notify or cause to be notified TMCC and any stock exchange on which the relevant Floating Rate Notes are listed of the Rate of Interest and each Interest Amount for each Interest Period and the relevant Interest Payment Date and will cause the same to be published in accordance with Condition 16 as soon as possible after their determination but in no event later than the fourth London Business Day thereafter. Each Interest Amount and Interest Payment Date so notified may subsequently be amended (or appropriate alternative arrangements made by way of adjustment) without publication as aforesaid in the event of an extension or shortening of the Interest Period in accordance with the provisions hereof. Each stock exchange on which the relevant Floating Rate Notes are for the time being listed will be promptly notified of any such amendment. For the purposes of this subparagraph (vii), the expression "London Business Day" means a day (other than a Saturday or a Sunday) on which banks and foreign exchange markets are open for business in London. (viii) Certificates to be final All certificates, communications, opinions, determinations, calculations, quotations and decisions given, expressed, made or obtained for the purposes of the provisions of this paragraph (b), by the Agent, shall (in the absence of manifest error) be binding on TMCC, the Agent, the other Paying Agents and all Noteholders, Receiptholders and Couponholders and (in the absence as aforesaid) no liability to TMCC, the Noteholders, the I-10 Receiptholders or the Couponholders shall attach to the Agent in connection with the exercise or non-exercise by it of its powers, duties and discretions pursuant to such provisions. (ix) Limitations on Interest In addition to any maximum Rate of Interest which may be applicable to any Floating Rate Note pursuant to Condition 4(b)(v) above, the interest rate on Floating Rate Notes shall in no event be higher than the maximum rate permitted by New York law, as the same may be modified by United States law of general application. (c) INDEXED NOTES AND DUAL CURRENCY NOTES In the case of Indexed Notes or Dual Currency Notes, if the Rate of Interest or amount of interest fails to be determined by reference to an index and/or a formula or, as the case may be, an exchange rate, such Rate of Interest or amount of interest payable shall be determined in the manner specified in the applicable Pricing Supplement. (d) ZERO COUPON NOTES When a Zero Coupon Note becomes due and repayable prior to the Maturity Date and is not paid when due, the amount due and repayable shall be the Amortized Face Amount of such Note as determined in accordance with Condition 5(f)(iii). As from the Maturity Date, any overdue principal of such Note shall bear interest at a rate per annum equal to the Accrual Yield set forth in the applicable Pricing Supplement. (e) PARTLY PAID NOTES In the case of Partly Paid Notes (other than Partly Paid Notes which are Zero Coupon Notes), interest will accrue as aforesaid on the paid up principal amount of such Notes and otherwise as specified in the applicable Pricing Supplement. (f) ACCRUAL OF INTEREST Each Note (or in the case of the redemption in part only of a Note, such part to be redeemed) will cease to bear interest (if any) from the due date for its redemption unless, upon due presentation thereof, payment of principal is improperly withheld or refused. In such event, interest will continue to accrue (as well after as before judgment) until whichever is the earlier of (i) the day on which all sums due in respect of such Note up to that day are received by or on behalf of the holder of such Note; and (ii) the day on which the Agent has notified the holder thereof (either in accordance with Condition 16 or individually) of receipt of all sums due in respect thereof up to that date. 5. REDEMPTION AND PURCHASE (a) AT MATURITY Unless previously redeemed or purchased and cancelled as specified below, Notes will be redeemed by TMCC at their Final Redemption Amount in the relevant Specified Currency on the Maturity Date specified in the applicable Pricing Supplement (in the case of a Note other than a Floating Rate Note) or I-11 on the Interest Payment Date falling in the Redemption Month specified in the applicable Pricing Supplement (in the case of a Floating Rate Note). (b) REDEMPTION FOR TAX REASONS TMCC may redeem the Notes of this Series as a whole but not in part at any time at their Early Redemption Amount, together, if appropriate, with accrued interest to but excluding the date fixed for redemption, if TMCC shall determine that as a result of any change in or amendment to the laws (or any regulations or rulings promulgated thereunder) of the United States of America or of any political subdivision or taxing authority thereof or therein affecting taxation, or any change in application or official interpretation of such laws, regulations or rulings, which amendment or change is effective on or after the latest Issue Date of the Notes of this Series, TMCC would be required to pay Additional Amounts, as provided in Condition 9, on the occasion of the next payment due in respect of the Notes of this Series. The Notes of this Series are also subject to redemption as a whole but not in part in the other circumstances described in Condition 9. Notice of intention to redeem Notes will be given at least once in accordance with Condition 16 not less than 30 days nor more than 60 days prior to the date fixed for redemption, provided that no such notice of redemption shall be given earlier than 90 days prior to the effective date of such change or amendment and that at the time notice of such redemption is given, such obligation to pay such Additional Amounts remains in effect. From and after any redemption date, if monies for the redemption of Notes shall have been made available for redemption on such redemption date, such Notes shall cease to bear interest, if applicable, and the only right of the holders of such Notes and any Receipts or Coupons appertaining thereto shall be to receive payment of the Early Redemption Amount and, if appropriate, all unpaid interest accrued to such redemption date. (c) PRICING SUPPLEMENT The Pricing Supplement applicable to the Notes of this Series shall indicate either: (i) that the Notes of this Series cannot be redeemed prior to their Maturity Date or, if the Notes of this Series are Floating Rate Notes, the Interest Payment Date falling in the relevant Redemption Month (in each case except as otherwise provided in paragraph (b) above and in Condition 13); or (ii) that such Notes will be redeemable at the option of TMCC and/or the holders of the Notes prior to such Maturity Date or, as the case may be, the Interest Payment Date falling in the relevant Redemption Month in accordance with the provisions of paragraphs (d) and/or (e) below on the date or dates and at the amount or amounts indicated in the applicable Pricing Supplement. I-12 (d) REDEMPTION AT THE OPTION OF TMCC If so specified in the applicable Pricing Supplement, TMCC may, having (unless otherwise specified in the applicable Pricing Supplement) given not more than 60 nor less than 30 days notice to the holders of the Notes of this Series in accordance with Condition 16 (which notice shall be irrevocable), repay all or some only of the Notes of this Series then outstanding on the Optional Redemption Date(s) and at the Optional Redemption Amount(s) indicated in the applicable Pricing Supplement together, if appropriate, with accrued interest. In the event of a redemption of some only of such Notes of this Series, such redemption must be for an amount being the Minimum Redemption Amount or a Higher Redemption Amount, as indicated in the applicable Pricing Supplement. In the case of a partial redemption of definitive Notes of this Series, the Notes of this Series to be repaid will be selected individually by lot not more than 60 days prior to the date fixed for redemption and a list of the Notes of this Series called for redemption will be published in accordance with Condition 16 not less than 30 days prior to such date. In the case of a partial redemption of Notes which are represented by a global Note, the relevant Notes will be redeemed in accordance with the rules of Euroclear and/or Cedel. Notes denominated in sterling or French Franc Notes may not be redeemed pursuant to this paragraph prior to one year from the Issue Date. Notes denominated in Deutsche Marks may not be redeemed pursuant to this paragraph prior to two years from the Issue Date. (e) REDEMPTION AT THE OPTION OF THE NOTEHOLDERS Unless otherwise specified in the applicable Pricing Supplement, the Notes will not be subject to repayment at the option of the Noteholders. Notes denominated in sterling or French Franc Notes may not be redeemed pursuant to this paragraph prior to one year from the Issue Date. Notes denominated in Deutsche Marks may not be redeemed pursuant to this paragraph prior to two years from the Issue Date. (f) EARLY REDEMPTION AMOUNTS For the purposes of paragraph (b) above and Condition 13, Notes will be redeemed at an amount (the "Early Redemption Amount") calculated as follows: (i) in the case of Notes with a Final Redemption Amount equal to the Issue Price, at the Final Redemption Amount thereof; or (ii) in the case of Notes (other than Zero Coupon Notes) with a Final Redemption Amount which is or may be greater or less than the Issue Price or which is payable in a Specified Currency other than that in which the Notes are denominated, at the amount set out in the applicable Pricing Supplement, or if no such amount or manner is set out in the applicable Pricing Supplement, at their principal amount; or (iii) in the case of Zero Coupon Notes, at an amount (the "Amortized Face Amount") equal to: (A) the sum of (x) the Reference Price specified in the applicable Pricing Supplement and (y) the product of the Accrual Yield specified in the applicable Pricing Supplement (compounded annually) being applied to the Reference Price from (and including) the Issue Date to (but I-13 excluding) the date fixed for redemption or (as the case may be) the date upon which such Note becomes due and repayable; or (B) if the amount payable in respect of any Zero Coupon Note upon redemption of such Zero Coupon Note pursuant to paragraph (b) above or upon its becoming due and repayable as provided in Condition 13 is not paid or available for payment when due, the amount due and repayable in respect of such Zero Coupon Note shall be the Amortized Face Amount of such Zero Coupon Note calculated as provided above as though the references in sub-paragraph (A) to the date fixed for redemption or the date upon which the Zero Coupon Note becomes due and repayable were replaced by references to the date (the "Reference Date") which is the earlier of: (1) the date on which all amounts due in respect of the Note have been paid; (2) the date on which the full amount of the moneys repayable has been received by the Agent and notice to that effect has been given in accordance with Condition 16. The calculation of the Amortized Face Amount in accordance with this sub-paragraph (B) will continue to be made, after as well as before judgment, until the Reference Date unless the Reference Date falls on or after the Maturity Date, in which case the amount due and repayable shall be the principal amount of such Note together with interest at a rate per annum equal to the Accrual Yield. Unless specified otherwise in the applicable Pricing Supplement, where any such calculation is to be made for a period of less than a full year, it shall be made on the basis of a 360-day year consisting of 12 months of 30 days each (or 365/366 days in the case of Notes denominated in sterling) and, in the case of an incomplete month, the number of days elapsed. (g) INSTALLMENTS Any Note which is repayable in installments will be redeemed in the Installment Amounts and on the Installment Dates specified in the applicable Pricing Supplement. (h) PARTLY PAID NOTES If the Notes are Partly Paid Notes, they will be redeemed, whether at maturity, early redemption or otherwise in accordance with the provisions of this Condition 5 as amended or varied by the applicable Pricing Supplement. I-14 (i) PURCHASES TMCC may at any time purchase Notes of this Series (provided that, in the case of definitive Notes, all unmatured Receipts and Coupons appertaining thereto are surrendered therewith) in the open market at any price. If purchases are made by tender, tenders must be available to all holders of Notes of this Series alike. (j) CANCELLATION All Notes redeemed or purchased as aforesaid will be cancelled forthwith, together with all unmatured Receipts and Coupons attached thereto or surrendered or purchased therewith, and may not be resold or reissued. 6. PAYMENTS (a) METHOD OF PAYMENT Subject as provided below, payments in a currency other than ECU will be made by transfer to an account in the Specified Currency (which, in the case of a payment in Yen to a non- resident of Japan, shall be a non-resident account) maintained by the payee with, or by a check in the Specified Currency drawn on, a bank (which, in the case of a payment in Yen to a non-resident of Japan, shall be an authorized foreign exchange bank) in the principal financial center of the country of such Specified Currency (which, if Australian dollars, shall be Sydney and if New Zealand dollars, shall be Wellington); provided, however, a check may not be delivered to an address in, and an amount may not be transferred to an account at a bank located in, the United States of America or its possessions by any office or agency of TMCC, the Agent or any Paying Agent, except as provided in Condition 6(b). Payments in ECU will be made by credit or transfer to an ECU account specified by the payee. Payments will be subject in all cases to any fiscal or other laws and regulations applicable thereto in the place of payment, but without prejudice to the provisions of Condition 9. (b) PRESENTATION OF NOTES, RECEIPTS, COUPONS AND TALONS Payments of principal in respect of definitive Notes will (subject as provided below) be made in the Specified Currency against surrender of definitive Notes and payments of interest in respect of the definitive Notes will (subject as provided below) be made in the Specified Currency against surrender of Coupons, in each case at the specified office of any Paying Agent outside the United States of America and its possessions. In the case of definitive Notes, payments of principal with respect to installments (if any), other than the final installment, will (subject as provided below) be made against presentation and surrender of the relevant Receipt. Each Receipt must be presented for payment of the relevant installment together with the relevant definitive Note against which the amount will be payable with respect to that installment. If any definitive Note is redeemed or becomes repayable prior to the stated Maturity Date (in the case of a Note other than a Floating Rate Note) or prior to the Interest Payment Date falling in the Redemption Month (in the case of a Floating Rate Note) in respect thereof, principal will be payable on surrender of such I-15 definitive Note together with all unmatured Receipts appertaining thereto. Receipts presented without the definitive Note to which they appertain and unmatured Receipts do not constitute valid obligations of TMCC. Upon the date on which any Fixed Rate Notes in definitive form (other than Dual Currency Notes or Indexed Notes) become due and repayable, such Notes should be presented for payment together with all unmatured Coupons appertaining thereto failing which the amount of any missing unmatured Coupon (or, in the case of payment not being made in full, the same proportion of the aggregate amount of such missing unmatured Coupon as the sum so paid bears to the sum due) will be deducted from the sum due for payment. Each amount of principal so deducted will be paid in the manner mentioned above against surrender of the relative missing Coupon at any time before the expiry of five years after the Relevant Date (as defined in Condition 15) in respect of such principal (whether or not such Coupon would otherwise have become void under Condition 15). Upon any Fixed Rate Note becoming due and repayable prior to its Maturity Date, all unmatured Talons (if any) appertaining thereto will become void and no further Coupons will be issued in respect thereof. Upon the date on which any Floating Rate Note, Dual Currency Note or Indexed Note in definitive form becomes due and repayable, all unmatured Coupons and Talons (if any) relating thereto (whether or not attached) shall become void and no payment shall be made in respect thereof. If the due date for redemption of any Note in definitive form is not a Fixed Interest Date or an Interest Payment Date, interest (if any) accrued with respect to such Note from and including the preceding Fixed Interest Date or Interest Payment Date or, as the case may be, the Interest Commencement Date shall be payable only against surrender of the relevant definitive Note. Payments of principal and interest (if any) in respect of Notes of this Series represented by any global Note will (subject as provided below) be made in the manner specified above (except in the case of Notes denominated or payable in ECU, when payments will be made as provided in Condition 6(c)) and otherwise in the manner specified in the relevant global Note against presentation or surrender, as the case may be, of such global Note at the specified office of the Agent. A record of each payment made against presentation or surrender of such global Note, distinguishing between any payment of principal and any payment of interest, will be made on such global Note by the Agent and such record shall be prima facie evidence that the payment in question has been made. The holder of the relevant global Note shall be the only person entitled to receive payments in respect of Notes represented by such global Note and TMCC will be discharged by payment to, or to the order of, the holder of such global Note with respect to each amount so paid. Each of the persons shown in the records of Euroclear or Cedel as the holder of a particular principal amount of Notes must look solely to Euroclear and/or Cedel, as the case may be, for his share of each payment so made by TMCC to, or to the order of, the holder of the relevant global Note. No person other than the holder of the relevant global Note shall have any claim against TMCC in respect of payments due on that global Note. I-16 Notwithstanding the foregoing, payments in respect of the Notes denominated in U.S. dollars will only be made at the specified office of a Paying Agent in the United States (which expression, as used herein, means the United States of America (including the States and the District of Columbia), its territories, its possessions and other areas subject to its jurisdiction) if: (i) TMCC has appointed Paying Agents with specified offices outside the United States with the reasonable expectation that such Paying Agents would be able to make payment at such specified offices outside the United States of the full amount owing in respect of the Notes in the manner provided above when due; (ii) payment of the full amount owing in respect of the Notes at such specified offices outside the United States is illegal or effectively precluded by exchange controls or other similar restrictions; and (iii) such payment is then permitted under United States law without involving, in the opinion of TMCC, adverse tax consequences to TMCC. (c) PAYMENT IN A COMPONENT CURRENCY If any payment of principal or interest in respect of a Note is to be made in ECU and, on the relevant due date, the ECU is neither used as the unit of account of the EC nor as the currency of the European Union, the Agent shall, without liability on its part and without having regard to the interests of individual Noteholders, Receiptholders or Couponholders and after consultation with TMCC if practicable, choose a currency which was a component of the ECU when the ECU was most recently used as the unit of account of the EC (the "Chosen Currency") in which all payments due on that due date with respect to such Notes, Receipts and Coupons shall be made. Notice of the Chosen Currency selected by the Agent shall, where practicable, be published in accordance with Condition 16. The amount of each payment in such Chosen Currency shall be computed on the basis of the equivalent of the ECU in that currency, determined as set out in this paragraph (c), as of the fourth London Business Day (as defined in Condition 4(b)(vii)) prior to the date on which such payment is due. Without prejudice to the preceding paragraph, on the first London Business Day from which the ECU ceases to be used as the unit of account of the EC or as the currency of the European Union, the Agent shall, without liability on its part and without having regard to the interests of individual Noteholders, Receiptholders or Couponholders and after consultation with TMCC if practicable, choose a currency which was a component of the ECU when the ECU was most recently used as the unit of account of the EC (also, the "Chosen Currency") in which all payments with respect to Notes, Receipts and Coupons having a due date prior thereto but not yet presented for payment are to be made. The amount of each payment in such Chosen Currency shall be computed on the basis of the equivalent of the ECU in that currency, determined as set out in this paragraph (c), as of such first London Business Day. I-17 The equivalent of the ECU in the relevant Chosen Currency as of any date (the "Day of Valuation") shall be determined on the following basis by the Agent. The component currencies of the ECU for this purpose (the "Components") shall be the currency amounts which were components of the ECU as of the last date on which the ECU was used as a unit of account of the EC. The equivalent of the ECU in the Chosen Currency shall be calculated by, first, aggregating the U.S. dollar equivalents of the Components, and then, using the rate used for determining the U.S. dollar equivalents of the Components in the Chosen Currency as set forth below, calculating the equivalent in the Chosen Currency of such aggregate amount in U.S. dollars. The U.S. dollar equivalent of each of the Components shall be determined by the Agent on the basis of the middle spot delivery quotations prevailing at 11:00 a.m. (London time) on the Day of Valuation, as obtained by the Agent from one or more leading banks as selected by the Agent in the country of issue of the Component in question. If the official unit of any Component is altered by way of combination or subdivision, the number of units of that Component shall be divided or multiplied in the same proportion. If two or more Components are consolidated into a single currency, the amounts of those Components shall be replaced by an amount in such single currency equal to the sum of the amounts of the consolidated Components expressed in such single currency. If any Component is divided into two or more currencies, the amount of that Component shall be replaced by amounts of such two or more currencies each of which shall be equal to the amount of the former Component divided by the number of currencies into which that currency was divided. If no direct quotations are available for a Component as of a Day of Valuation from any of the banks selected by the Agent for this purpose because foreign exchange markets are closed in the country of issue of that currency or for any other reason, the most recent direct quotations for that currency obtainable by the Agent shall be used in computing the equivalents of the ECU on such Day of Valuation; provided, however, that such most recent quotations may be used only if they were prevailing in the country of issue of such Component not more than two London Business Days before such Day of Valuation. If the most recent quotations obtained by the Agent are those which were so prevailing more than two London Business Days before such Day of Valuation, the Agent shall determine the U.S. dollar equivalent of such Component on the basis of cross rates derived from the middle spot delivery quotations for such Component and for the U.S. dollar prevailing at 11:00 a.m. (London time) on such Day of Valuation, as obtained by the Agent from one or more leading banks, as selected by the Agent, in a country other than the country of issue of such Component. If such most recent quotations obtained by the Agent are those which were so prevailing not more than two London Business Days before such Day of Valuation, the Agent shall determine the U.S. dollar equivalent of such Component on the basis of such cross rates if the Agent judges that the equivalent so calculated is more representative than the U.S. dollar equivalent calculated on the basis of such most recent direct quotations. Unless otherwise determined by the Agent, if there is more than one market for dealing in any Component by reason of foreign exchange regulations or for any other reason, the market to be referred to in respect of such currency shall be that upon which a non-resident issuer of securities denominated in such currency would purchase such currency in order to make payments in respect of such securities. I-18 All choices and determinations made by the Agent for the purposes of this paragraph (c) shall be at its sole discretion and without having regard to individual Noteholders, Receiptholders or Couponholders (after consultation with TMCC if practicable) and shall, in the absence of manifest error, be conclusive for all purposes and binding on TMCC and all Noteholders, Receiptholders and Couponholders. Whenever a payment is to be made in a Chosen Currency as provided in this paragraph (c), such Chosen Currency shall be deemed to be the Specified Currency for the purposes of the other provisions of this Condition 6. (d) PAYMENT BUSINESS DAY If the date for payment of any amount in respect of any Note, Receipt or Coupon is not a Payment Business Day in a place of presentation, the holder thereof shall not be entitled to payment until the next following Payment Business Day in the relevant place and shall not be entitled to further interest or other payment in respect of such delay. For these purposes, unless otherwise specified in the applicable Pricing Supplement, "Payment Business Day" means any day which is a day (other than a Saturday or Sunday) on which commercial banks are open for business and foreign exchange markets settle payments in the relevant place of presentation and a Business Day as defined in Condition 4. (e) INTERPRETATION OF PRINCIPAL AND INTEREST Any reference in these Terms and Conditions to principal in respect of the Notes shall be deemed to include, as applicable: (i) any Additional Amounts which may be payable under Condition 9 in respect of principal; (ii) the Final Redemption Amount of the Notes; (iii) the Early Redemption Amount of the Notes; (iv) in relation to Notes redeemable in installments, the Installment Amounts; (v) any premium and any other amounts which may be payable under or in respect of the Notes; (vi) in relation to Zero Coupon Notes, the Amortized Face Amount; and (vii) the Optional Redemption Amount(s) (if any) of the Notes. Any reference in these Terms and Conditions to interest in respect of the Notes shall be deemed to include, as applicable, any Additional Amounts which may be payable under Condition 9, except as provided in clause (i) above. I-19 7. AGENT AND PAYING AGENTS The names of the initial Agent and the other initial Paying Agents and their initial specified offices are set out on the back cover page of the Offering Circular. In acting under the Agency Agreement, the Agent and the Paying Agents will act solely as agents of TMCC and do not assume any obligations or relationships of agency or trust to or with the Noteholders, Receiptholders or Couponholders, except that (without affecting the obligations of TMCC to the Noteholders, Receiptholders and Couponholders to repay Notes and pay interest thereon) funds received by the Agent for the payment of the principal of or interest on the Notes shall be held in trust by it for the Noteholders and/or Receiptholders and/or Couponholders until the expiration of the relevant period of prescription under Condition 15. TMCC agrees to perform and observe the obligations imposed upon it under the Agency Agreement and to cause the Agent and the Paying Agents to perform and observe the obligations imposed upon them under the Agency Agreement. The Agency Agreement contains provisions for the indemnification of the Agent and the Paying Agents and for relief from responsibility in certain circumstances, and entitles any of them to enter into business transactions with TMCC without being liable to account to the Noteholders, Receiptholders or the Couponholders for any resulting profit. TMCC is entitled to vary or terminate the appointment of any Paying Agent or any other paying agent appointed under the terms of the Agency Agreement and/or appoint additional or other paying agents and/or approve any change in the specified office through which any paying agent acts, provided that: (i) so long as the Notes of this Series are listed on any stock exchange, there will at all times be a Paying Agent with a specified office in each location required by the rules and regulations of the relevant stock exchange; (ii) there will at all times be a Paying Agent with a specified office in a city approved by the Agent in continental Europe; and (iii) there will at all times be an Agent. In addition, with respect to Notes denominated in U.S. dollars TMCC shall forthwith appoint a Paying Agent having a specified office in New York City in the circumstances described in the final paragraph of Condition 6(b). Any variation, termination, appointment or change shall only take effect (other than in the case of insolvency, when it shall be of immediate effect) after not less than 30 nor more than 45 days prior notice thereof shall have been given to the Agent and the Noteholders in accordance with Condition 16. 8. EXCHANGE OF TALONS On and after the Fixed Interest Date or the Interest Payment Date, as appropriate, on which the final Coupon comprised in any Coupon sheet matures, the Talon (if any) forming part of such Coupon sheet may be surrendered at the specified office of the Agent or any other Paying Agent in exchange for a further Coupon sheet including (if such further Coupon sheet does not include Coupons to, and including, the final date for the payment of interest due in respect of the Note to which it appertains) a further Talon, subject to the provisions of Condition 15. Each Talon shall, for the purposes of these Terms I-20 and Conditions, be deemed to mature on the Fixed Interest Date or the Interest Payment Date (as the case may be) on which the final Coupon comprised in the relative Coupon sheet matures. 9. PAYMENT OF ADDITIONAL AMOUNTS TMCC will, subject to certain limitations and exceptions (set forth below), pay to a Noteholder, Receiptholder or Couponholder who is a United States Alien (as defined below) such amounts ("Additional Amounts") as may be necessary so that every net payment of principal or interest in respect of the Notes, Receipts or Coupons after deduction or withholding for or on account of any present or future tax, assessment or other governmental charge imposed upon such Noteholder, Receiptholder or Couponholder, or by reason of the making of such payment, by the United States or any political subdivision or taxing authority thereof or therein, will not be less than the amount provided for in the Notes, Receipts or Coupons. However, TMCC shall not be required to make any payment of Additional Amounts for or on account of: (a) any tax, assessment or other governmental charge which would not have been imposed but for (i) the existence of any present or former connection between such Noteholder, Receiptholder or Couponholder (or between a fiduciary, settlor, beneficiary, member or shareholder of, or possessor of a power over, such Noteholder, Receiptholder or Couponholder, if such Noteholder, Receiptholder or Couponholder is an estate, trust, partnership or corporation) and the United States, including, without limitation, such Noteholder, Receiptholder or Couponholder (or such fiduciary, settlor, beneficiary, member, shareholder or possessor) being or having been a citizen or resident thereof or being or having been present or engaged in trade or business therein or having or having had a permanent establishment therein, or (ii) such Noteholder's, Receiptholder's or Couponholder's past or present status as a personal holding company, foreign personal holding company or controlled foreign corporation or a private foundation (as those terms are defined for United States tax purposes) or as a corporation which accumulates earnings to avoid United States federal income tax; (b) any estate, inheritance, gift, sales, transfer, personal property or similar tax, assessment or other governmental charge; (c) any tax, assessment or other governmental charge that would not have been so imposed but for the presentation of a Note, Receipt or Coupon for payment on a date more than 15 days after the date on which such payment became due and payable or the date on which payment thereof is duly provided for, whichever occurs later; (d) any tax, assessment or other governmental charge which is payable otherwise than by withholding from payments of principal or interest in respect of the Notes, Receipts or Coupons; (e) any tax, assessment or other governmental charge imposed on interest received by (i) a 10 percent shareholder of TMCC within the meaning of Internal Revenue Code Section 871(h)(3)(b) or Section I-21 881(c)(3)(b) or (ii) a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business; (f) any tax, assessment or other governmental charge required to be withheld by any Paying Agent from any payment of principal or interest in respect of any Note, Receipt or Coupon, if such payment can be made without such withholding by any other Paying Agent with respect to the Notes in a Western European city; (g) any tax, assessment or other governmental charge which would not have been imposed but for the failure to comply with certification, information of other reporting requirements concerning the nationality, residence, identity or connection with the United States of the Noteholder, Receiptholder or Couponholder or of the beneficial owner of such Note, Receipt or Coupon, if such compliance is required by statute or by regulation of the United States Treasury Department as a precondition to relief or exemption from such tax, assessment or other governmental charge; or (h) any combination of items (a), (b), (c), (d), (e), (f) and (g); nor shall Additional Amounts be paid to any Noteholder, Receiptholder or Couponholder who is a fiduciary or partnership or other than the sole beneficial owner of the Note, Receipt or Coupon to the extent a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner of the Note, Receipt or Coupon would not have been entitled to payment of the Additional Amounts had such beneficiary, settlor, member or beneficial owner been the holder of the Note, Receipt or Coupon. The term "United States Alien" means any corporation, individual, fiduciary or partnership that for United States federal income tax purposes is a foreign corporation, nonresident alien individual, nonresident alien fiduciary of a foreign estate or trust, or foreign partnership one or more members of which is a foreign corporation, nonresident alien individual or nonresident alien fiduciary of a foreign estate or trust. If TMCC shall determine that any payment made outside the United States by TMCC or any of its Paying Agents of the full amount of the next scheduled payment of either principal or interest due in respect of any Note, Receipt or Coupon of this Series would, under any present or future laws or regulations of the United States affecting taxation or otherwise, be subject to any certification, information or other reporting requirements of any kind, the effect of which requirements is the disclosure to TMCC, any of its Paying Agents or any governmental authority of the nationality, residence or identity (as distinguished from status as a United States Alien) of a beneficial owner of such Note, Receipt or Coupon who is a United States Alien (other than such requirements which (i) would not be applicable to a payment made to a custodian, nominee or other agent of the beneficial owner, or which can be satisfied by such a custodian, nominee or other agent certifying to the effect that such beneficial owner is a United States Alien; provided, however, in each case that payment by such custodian, nominee or agent to such beneficial owner is not otherwise subject to any requirements referred to in this sentence, (ii) are applicable only to payment by a custodian, nominee or other I-22 agent of the beneficial owner to or on behalf of such beneficial owner, or (iii) would not be applicable to a payment made by any other paying agent of TMCC), TMCC shall redeem the Notes of this Series as a whole but not in part at a redemption price equal to the Early Redemption Amount together, if appropriate, with accrued interest to, but excluding, the date fixed for redemption, such redemption to take place on such date not later than one year after the publication of notice of such determination. If TMCC becomes aware of an event that might give rise to such certification, information or other reporting requirements, TMCC shall, as soon as practicable, solicit advice of independent counsel selected by TMCC to establish whether such certification, information or other reporting requirements will apply and, if such requirements will apply, TMCC shall give prompt notice of such determination (a "Tax Notice") in accordance with Condition 16 stating in such notice the effective date of such certification, information or other reporting requirements and, if applicable, the date by which the redemption shall take place. Notwithstanding the foregoing, TMCC shall not redeem Notes if TMCC shall subsequently determine not less than 30 days prior to the date fixed for redemption that subsequent payments would not be subject to any such requirements, in which case TMCC shall give prompt notice of such determination in accordance with Condition 16 and any earlier redemption notice shall thereby be revoked and of no further effect. Notwithstanding the foregoing, if and so long as the certification, information or other reporting requirements referred to in the preceding paragraph would be fully satisfied by payment of a backup withholding tax or similar charge, TMCC may elect prior to publication of the Tax Notice to have the provisions described in this paragraph apply in lieu of the provisions described in the preceding paragraph, in which case the Tax Notice shall state the effective date of such certification, information or reporting requirements and that TMCC has elected to pay Additional Amounts rather than redeem the Notes. In such event, TMCC will pay as Additional Amounts such amounts as may be necessary so that every net payment made following the effective date of such certification, information or reporting requirements outside the United States by TMCC or any of its Paying Agents of principal or interest due in respect of a Note, Receipt or Coupon to a holder who certifies to the effect that the beneficial owner of such Note, Receipt or Coupon is a United States Alien (provided that such certification shall not have the effect of communicating to TMCC or any of its Paying Agents or any governmental authority the nationality, residence or identity of such I-23 beneficial owner) after deduction or withholding for or on account of such backup withholding tax or similar charge (other than a backup withholding tax or similar charge which (i) is imposed as a result of certification, information or other reporting requirements referred to in the second parenthetical clause of the first sentence of the preceding paragraph, or (ii) is imposed as a result of the fact that TMCC or any of its Paying Agents has actual knowledge that the holder or beneficial owner of such Note, Receipt or Coupon is not a United States Alien but is within the category of persons, corporations or other entities described in clause (a)(i) of the third preceding paragraph, or (iii) is imposed as a result of presentation of such Note, Receipt or Coupon for payment more than 15 days after the date on which such payment becomes due and payable or on which payment thereof is duly provided for, whichever occurs later), will not be less than the amount provided for in such Note, such Receipt or such Coupon to be then due and payable. In the event TMCC elects to pay such Additional Amounts, TMCC will have the right, at its sole option, at any time, to redeem the Notes of this Series, as a whole but not in part at a redemption price equal to their Early Redemption Amount, together, if appropriate, with accrued interest to the date fixed for redemption including any Additional Amounts required to be paid under this paragraph. If TMCC has made the determination described in the preceding paragraph with respect to certification, information or other reporting requirements applicable to interest only and subsequently makes a determination in the manner and of the nature referred to in such preceding paragraph with respect to such requirements applicable to principal, TMCC will redeem the Notes of this Series in the manner and on the terms described in the preceding paragraph (except as provided below), unless TMCC elects to have the provisions of this paragraph apply rather than the provisions of the immediately preceding paragraph. If in such circumstances the Notes are to be redeemed, TMCC will be obligated to pay Additional Amounts with respect to interest, if any, accrued to the date of redemption. If TMCC has made the determination described in the preceding paragraph and subsequently makes a determination in the manner and of the nature referred to in such preceding paragraph that the level of withholding applicable to principal or interest has been increased, TMCC will redeem the Notes of this Series in the manner and on the terms described in the preceding paragraph (except as provided below), unless TMCC elects to have the provisions of this paragraph apply rather than the provisions of the immediately preceding paragraph. If in such circumstances the Notes are to be redeemed, TMCC will be obligated to pay Additional Amounts with respect to the original level of withholding on principal and interest, if any, accrued to the date of redemption. 10. NEGATIVE PLEDGE The Notes will not be secured by any mortgage, pledge or other lien. TMCC shall not pledge or otherwise subject to any lien any property or assets of TMCC unless the Notes are secured by such pledge or lien equally and ratably with all other obligations secured thereby so long as such obligations shall be so secured; provided, however, that such covenant will not apply to liens securing obligations which do not in the aggregate at any one time outstanding exceed 5% of Consolidated Net Tangible Assets (as defined below) of TMCC and its consolidated subsidiaries and also will not apply to: I-24 (a) the pledge of any assets of TMCC to secure any financing by TMCC of the exporting of goods to or between, or the marketing thereof in, countries other than the United States in connection with which TMCC reserves the right, in accordance with customary and established banking practice, to deposit, or otherwise subject to a lien, cash, securities or receivables, for the purpose of securing banking accommodations or as the basis for the issuance of bankers' acceptances or in aid of other similar borrowing arrangements; (b) the pledge of receivables payable in currencies other than United States dollars to secure borrowings in countries other than the United States; (c) any deposit of assets of TMCC with any surety company or clerk of any court, or in escrow, as collateral in connection with, or in lieu of, any bond on appeal by TMCC from any judgment or decree against it, or in connection with other proceedings in actions at law or in equity by or against TMCC or in favor of any governmental bodies to secure progress, advance or other payments in the ordinary course of TMCC's business; (d) any lien or charge on any property of TMCC, tangible or intangible, real or personal, existing at the time of acquisition or construction of such property (including acquisition through merger or consolidation) or given to secure the payment of all or any part of the purchase or construction price thereof or to secure any indebtedness incurred prior to, at the time of, or within one year after, the acquisition or completion of construction thereof for the purpose of financing all or any part of the purchase or construction price thereof; (e) any lien in favor of the United States of America or any state thereof or the District of Columbia, or any agency, department or other instrumentality thereof, to secure progress, advance or other payments pursuant to any contract or provisions of any statute; (f) any lien securing the performance of any contract or undertaking not directly or indirectly in connection with the borrowing of money, obtaining of advances or credit or the securing of debt, if made and continuing in the ordinary course of business; (g) any lien to secure non-recourse obligations in connection with TMCC's engaging in leveraged or single- investor lease transactions; and (h) any extension, renewal or replacement (or successive extensions, renewals or replacements), in whole or in part, of any l lien, charge or pledge referred to in clauses (a) through (g) above; provided, however, that the amount of any and all obligations and indebtedness secured thereby will not exceed the amount thereof so secured immediately prior to the time of such extension, renewal or replacement, and that such extension, renewal or replacement will be limited to all or a part of the property which secured the charge or lien so extended, renewed or replaced (plus improvements on such property). I-25 "Consolidated Net Tangible Assets" means the aggregate amount of assets (less applicable reserves and other properly deductible items) after deducting therefrom (i) all current liabilities and (ii) all goodwill, trade names, trademarks, patents, unamortized debt discount and expense and other like intangibles of TMCC and its consolidated subsidiaries, all as set forth on the most recent balance sheet of TMCC and its consolidated subsidiaries prepared in accordance with generally accepted accounting principles as practiced in the United States. 11. CONSOLIDATION OR MERGER TMCC may consolidate with, or sell, lease or convey all or substantially all of its assets as an entirety to, or merge with or into any other corporation provided that in any such case, (i) either TMCC shall be the continuing corporation, or the successor corporation shall be a corporation organized and existing under the laws of the United States of America or any state thereof and such successor corporation shall expressly assume the due and punctual payment of the principal of and interest (including Additional Amounts as provided in Condition 9) on all the Notes, Receipts and Coupons, according to their tenor, and the due and punctual performance and observance of all of the covenants and conditions of this Note to be performed by TMCC by an amendment to the Agency Agreement executed by such successor corporation, TMCC and the Agent, and (ii) immediately after giving effect to such transaction, no Event of Default under Condition 13, and no event which, with notice or lapse of time or both, would become such an Event of Default shall have happened and be continuing. In case of any such consolidation, merger, sale, lease or conveyance and upon any such assumption by the successor corporation, such successor corporation shall succeed to and be substituted for TMCC, with the same effect as if it had been named herein as TMCC, and the predecessor corporation, except in the event of a conveyance by way of lease, shall be relieved of any further obligation under this Note and the Agency Agreement. 12. MEETINGS, MODIFICATIONS AND WAIVERS The Agency Agreement contains provisions, which, unless otherwise provided in the Pricing Supplement, are binding on TMCC, the Noteholders, the Receiptholders and the Couponholders, for convening meetings of holders of Notes, Receipts and Coupons to consider matters affecting their interests, including the modification or waiver of the Terms and Conditions applicable to the Notes. The Agency Agreement, the Notes and any Receipts and Coupons attached to the Notes may be amended by TMCC (and, in the case of the Agency Agreement, the Agent) (i) for the purpose of curing any ambiguity, or for curing, correcting or supplementing any defective provision contained therein, or to evidence the succession of another corporation to TMCC as provided in Condition 11, (ii) to make any further modifications of the terms of the Agency Agreement necessary or desirable to allow for the issuance of any additional Notes (which modifications shall not be materially adverse to holders of outstanding Notes) or (iii) in any manner which TMCC (and, in the case of the Agency Agreement, the Agent) may deem necessary or desirable and which shall not materially adversely affect the interests of the holders of the Notes, Receipts and Coupons, to all of which each holder of Notes, Receipts and Coupons shall, by acceptance thereof, consent. In addition, with the written consent of the holders of not less than a majority in aggregate I-26 principal amount of the Notes then outstanding affected thereby, or by a resolution adopted by a majority in aggregate principal amount of such outstanding Notes affected thereby present or represented at a meeting of such holders at which a quorum is present, as provided in the Agency Agreement (provided that such resolution shall be approved by the holders of not less than 25 percent of the aggregate principal amount of Notes affected thereby then outstanding), TMCC and the Agent may from time to time and at any time enter into agreements modifying or amending the Agency Agreement or the terms and conditions of the Notes, Receipts and Coupons for the purpose of adding any provisions to or changing in any manner or eliminating any provisions of the Agency Agreement or of modifying in any manner the rights of the holders of Notes, Receipts and Coupons; provided, however, that no such agreement shall, without the consent or the affirmative vote of the holder of each Note affected thereby, (i) change the stated maturity of the principal of or any installment of interest on any Note, (ii) reduce the principal amount of or interest on any Note, (iii) change the obligation of TMCC to pay Additional Amounts as provided in Condition 9, (iv) reduce the percentage in principal amount of outstanding Notes the consent of the holders of which is necessary to modify or amend the Agency Agreement or the terms and conditions of the Notes or to waive any future compliance or past default, or (v) reduce the percentage in principal amount of outstanding Notes the consent of the holders of which is required at any meeting of holders of Notes at which a resolution is adopted. The quorum at any meeting called to adopt a resolution will be persons holding or representing a majority in aggregate principal amount of the Notes at the time outstanding affected thereby and at any adjourned meeting will be one or more persons holding or representing 25 percent in aggregate principal amount of such Notes at the time outstanding affected thereby. Any instrument given by or on behalf of any holder of a Note in connection with any consent to any such modification, amendment or waiver will be irrevocable once given and will be conclusive and binding on all subsequent holders of such Note. Any modifications, amendments or waivers to the Agency Agreement or to the terms and conditions of the Notes, Receipts and Coupons will be conclusive and binding on all holders of Notes, Receipts and Coupons, whether or not they have given such consent or were present at any meeting, and whether or not notation of such modifications, amendments or waivers is made upon the Notes, Receipts and Coupons. It shall not be necessary for the consent of the holders of Notes under this Condition 12 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent shall approve the substance thereof. Notes authenticated and delivered after the execution of any amendment to the Agency Agreement, Notes, Receipts or Coupons may bear a notation in form approved by the Agent as to any matter provided for in such amendment to the Agency Agreement. New Notes so modified as to conform, in the opinion of the Agent and TMCC, to any modification contained in any such amendment may be prepared by TMCC, authenticated by the Agent and delivered in exchange for the Notes then outstanding. For the purposes of this Condition 12 and Condition 13 below, the term "outstanding" means, in relation to the Notes, all Notes issued under the Agency Agreement other than (i) those which have been redeemed in full in accordance with the Agency Agreement or these Terms and Conditions, I-27 (ii) those in respect of which the date for redemption in accordance with these Terms and Conditions has occurred and the redemption moneys therefor (including all interest (if any) accrued thereon to the date for such redemption and any interest (if any) payable under these Terms and Conditions after such date) have been duly paid to the Agent as provided in the Agency Agreement (and, where appropriate, notice has been given to the Noteholders in accordance with Condition 16) and remain available for payment against presentation of the Notes, (iii) those which have become void under Condition 15, (iv) those which have been purchased and cancelled as provided in Condition 5, (v) those mutilated or defaced notes which have been surrendered in exchange for replacement Notes pursuant to Condition 14, (vi) (for the purposes only of determining how many Notes are outstanding and without prejudice to their status for any other purpose) those Notes alleged to have been lost, stolen or destroyed and in respect of which replacement Notes have been issued pursuant to Condition 14 and (vii) temporary global Notes to the extent that they shall have been duly exchanged in whole for permanent global Notes or definitive Notes and permanent global Notes to the extent that they shall have been duly exchanged in whole for definitive Notes, in each case pursuant to their respective provisions. 13. DEFAULT AND ACCELERATION (a) In the event that (each an "Event of Default"): (i) default shall be made in the payment when due of any installment of interest or any Additional Amounts on any of the Notes continued for a period of 30 days after the date when due; or (ii) default shall be made for more than three days in the payment when due of the principal of any Note (whether at maturity or upon redemption or otherwise); or (iii) default in the deposit of any sinking fund payment with respect to any Note when and as due; or (iv) TMCC shall fail to perform or observe any other term, covenant or agreement contained in the Terms and Conditions applicable to any of the Notes or in the Agency Agreement for a period of 60 days after the date on which written notice of such failure, requiring TMCC to remedy the same, first shall have been given to the Agent and TMCC by the holders of at least 25 percent in aggregate principal amount of the Notes then outstanding; or (v) there is an acceleration of, or failure to pay when due and payable, any indebtedness for money borrowed of TMCC exceeding $10,000,000 and such acceleration is not rescinded or annulled, or such indebtedness is not discharged, within 10 days after written notice thereof has first been given to TMCC and the Agent by the holders of not less than 10 percent in aggregate principal amount of Notes then outstanding; or (vi) the entry by a court having competent jurisdiction of (a) a decree or order granting relief in respect of TMCC in an involuntary proceeding under any applicable bankruptcy, insolvency reorganization or other similar law and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or (b) a decree or order I-28 adjudging TMCC to be insolvent, or approving a petition seeking reorganization, arrangement, adjustment or composition of TMCC and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or (c) a final and non-appealable order appointing a custodian, receiver, liquidator, assignee, trustee or other similar official of TMCC or of any substantial part of the property of TMCC, or ordering up the winding up or liquidation of the offices of TMCC; or (vii) the commencement by TMCC of a voluntary proceeding under any applicable bankruptcy, insolvency, reorganization or other similar law or of a voluntary proceeding seeking to be adjudicated insolvent or the consent of TMCC to the entry of a decree or order for relief in an involuntary proceeding under any applicable bankruptcy, insolvency, reorganization or other similar law or to the commencement of any insolvency proceedings against it, or the filing by TMCC of a petition or answer or consent seeking reorganization or relief under any applicable law, or the consent by TMCC to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee or similar official of TMCC or any substantial part of the property of TMCC or the making by TMCC of an assignment for the benefit of creditors, or the taking of corporate action by TMCC in furtherance of any such action; then the holder of any Note may, at its option, declare the principal of such Note and the interest, if any, accrued thereon to be due and payable immediately by written notice to TMCC and the Agent at its main office in London, and unless all such defaults shall have been cured by TMCC prior to receipt of such written notice, the principal of such Note and the interest, if any, accrued thereon shall become and be immediately due and payable. At any time after such a declaration of acceleration with respect to the Notes has been made and before a judgment or decree for payment of the money due with respect to any Note has been obtained by any Noteholder, such declaration and its consequences may be rescinded and annulled upon the written consent of holders of a majority in aggregate principal amount of the Notes then outstanding, or by resolution adopted by a majority in aggregate principal amount of the Notes present or represented at a meeting of holders of the Notes at which a quorum is present, as provided in the Agency Agreement, if: (1) TMCC has paid or deposited with the Agent a sum sufficient to pay (A) all overdue installments of interest on the Notes, (B) the principal of Notes which has become due otherwise than by such declaration of acceleration; and (2) all Events of Default with respect to the Notes, other than the non-payment of the principal of such Notes which has become due solely by such declaration of acceleration, have been cured or waived as provided in paragraph (b) below. No such rescission shall affect any subsequent default or impair any right consequent thereon. I-29 (b) Any Events of Default by TMCC, other than the events described in paragraph (a)(i) or (a)(ii) above or in respect of a covenant or provision which cannot be modified and amended without the written consent of the holders of all outstanding Notes, may be waived by the written consent of holders of a majority in aggregate principal amount of the Notes then outstanding affected thereby, or by resolution adopted by the holders of a majority in aggregate principal amount of such Notes then outstanding present or represented at a meeting of holders of the Notes affected thereby at which a quorum is present, as provided in the Agency Agreement. 14. REPLACEMENT OF NOTES, RECEIPTS, COUPONS AND TALONS Should any Note, Receipt, Coupon or Talon be mutilated, defaced or destroyed or be lost or stolen, it may be replaced at the specified office of the Agent in London (or such other place outside the United States as may be notified to the Noteholders), in accordance with all applicable laws and regulations, upon payment by the claimant of the expenses incurred by TMCC and the Agent in connection therewith and on such terms as to evidence, indemnity, security or otherwise as TMCC and the Agent may require. Mutilated or defaced Notes, Receipts, Coupons or Talons must be surrendered before replacements will be issued. 15. PRESCRIPTION The Notes, Receipts and Coupons will become void unless presented for payment within a period of five years from the Relevant Date (as defined below) relating thereto. Any moneys paid by TMCC to the Agent for the payment of principal or interest in respect of the Notes and remaining unclaimed for a period of one year shall forthwith be repaid to TMCC and holders shall thereafter look only to TMCC for payment thereof. All liability with respect thereto shall cease when the Notes, Receipts and Coupons become void. As used herein, the "Relevant Date" means: (A) the date on which such payment first becomes due; or (B) if the full amount of the moneys payable has not been received by the Agent on or prior to such due date, the date on which, the full amount of such moneys having been so received, notice to that effect shall have been given to the Noteholders in accordance with Condition 16. 16. NOTICES All notices regarding the Notes shall be published in one leading English language daily newspaper with circulation in London (which is expected to be the Financial Times in London) or, if this is not practicable, one other such English language newspaper as TMCC, in consultation with the Agent, shall decide. In addition, with respect to any Notes quoted on the Paris Bourse, and so long as that exchange so requires, any notice to the holder of such Notes or the Coupons relating thereto will be validly given if published in a daily newspaper of general circulation in Paris (which is expected to be l'Agence Economique et Financiere), or if this is not practicable, in a newspaper of general circulation in France as determined by TMCC, in consultation with the I-30 Agent. TMCC shall also ensure that notices are duly published in a manner which complies with the rules and regulations of any stock exchange on which the Notes are for the time being listed. Any such notice shall be deemed to have been given on the date of the first publication. Until such time as any definitive Notes are issued, there may, so long as the global Notes for this Series are held in their entirety on behalf of Euroclear and Cedel, be substituted for such publication in such newspaper the delivery of the relevant notice to Euroclear and Cedel for communication by them to the holders of the Notes of this Series. Any such notice shall be deemed to have been given to the holders of the Notes of this Series on the seventh day after the day on which the said notice was given to Euroclear and Cedel, or on such other day as is specified in the applicable Pricing Supplement. Notices to be given by any holder of the Notes of this Series shall be in writing and given by lodging the same, together with the relevant Note or Notes, with the Agent. While any of the Notes of this Series are represented by a global Note, such notice may be given by any holder of a Note of this Series to the Agent via Euroclear and/or Cedel, as the case may be, in such manner as the Agent and Euroclear and/or Cedel, as the case may be, may approve for this purpose. 17. GOVERNING LAW The Agency Agreement and the Notes, the Receipts and the Coupons are governed by, and shall be construed in accordance with, the laws of the State of New York, United States of America, applicable to agreements made and to be performed wholly within such jurisdiction. I-31 Exhibit II to Amendment No. 1 to the Amended and Restated Agency Agreement APPENDIX B ---------- FORMS OF GLOBAL AND DEFINITIVE NOTES, COUPONS, ---------------------------------------------- RECEIPTS AND TALONS ------------------- PART 1 ------ FORM OF TEMPORARY GLOBAL NOTE OF -------------------------------- TOYOTA MOTOR CREDIT CORPORATION ------------------------------- [THE ISSUER IS NOT AN INSTITUTION AUTHORIZED UNDER THE BANKING ACT 1987 AND THIS IS A MEDIUM-TERM NOTE ISSUED IN ACCORDANCE WITH REGULATIONS MADE UNDER SECTION 4 OF THE BANKING ACT 1987. REPAYMENT OF THE PRINCIPAL AND THE PAYMENT OF ANY INTEREST IN CONNECTION WITH THIS MEDIUM-TERM NOTE HAVE NOT BEEN GUARANTEED].1 ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE. TOYOTA MOTOR CREDIT CORPORATION (Incorporated under the laws of the State of California, U.S.A.) TEMPORARY GLOBAL NOTE representing [Specified Currency and Principal Amount of Series] EURO MEDIUM-TERM NOTES DUE [Year of Maturity] Series No. [ ] Serial No. [ ] The Notes represented by this Temporary Global Note are listed on The International Stock Exchange of the United Kingdom and the Republic of Ireland Limited (the "London Stock Exchange")2 - ------------------------ 1 Delete in the case of all Notes other than Notes denominated in sterling. 2 Delete in the cast of a Series of unlisted Notes or add reference to other stock exchange, if applicable. II-1 This Note is a Temporary Global Note in respect of a duly authorized issue of [Specified Currency and Principal Amount of Series] Euro Medium-Term Notes Due [Year of Maturity] (the "Notes") of [Specified Currency and Specified Denomination] each of Toyota Motor Credit Corporation (the "Company"). References herein to the Conditions shall be to the Terms and Conditions of the Notes (the "Conditions") as set out in Appendix A to the Agency Agreement (as defined below) as modified and supplemented by the information set out in the Pricing Supplement (the "Pricing Supplement") (which is attached hereto), provided that, in the event of any conflict between the provisions of the Conditions and the information set out in the Pricing Supplement, the latter shall prevail. Words and expressions defined in the Conditions and the Pricing Supplement and not otherwise defined herein shall have the same meanings when used herein. This Temporary Global Note is issued subject to, and with the benefit of, the Conditions and an Amended and Restated Agency Agreement (the "Agency Agreement", which expression shall be construed as a reference to that agreement as the same may be amended or supplemented from time to time) dated July 28, 1994, between the Company and The Chase Manhattan Bank, N.A. (the "Agent") and the other agents named therein. This Temporary Global Note is to be held by a common depositary for Morgan Guaranty Trust Company of New York, Brussels Office, as operator of the Euroclear System and Cedel Bank, societe anonyme ("Cedel") on behalf of account holders which have the Notes represented by this Temporary Global Note credited to their respective securities accounts with Euroclear or Cedel from time to time. For value received, the Company, subject to and in accordance with the Conditions, promises to pay to the bearer hereof on [each Installment Date the relevant Installment Amount] the [Maturity Date] [Interest Payment Date falling in the Redemption Month], or on such earlier date as the Notes may become due and repayable in accordance with the Conditions, the amount payable under the Conditions on redemption of the Notes then represented by this Temporary Global Note and to pay interest (if any) on the principal amount of the Notes from time to time represented by this Temporary Global Note calculated and payable as provided in the Conditions together with any other sums payable under the Conditions, upon presentation and, at maturity, surrender of this Temporary Global Note at the principal office of the Agent in London, England, or at the offices of any of the other paying agents located outside the United States (as defined below) (except as provided in the Conditions) from time to time appointed by the Company in respect of the Notes, but in each case subject to the requirements as to certification provided herein. Any monies paid by the Company to the Agent for the payment II-2 of or interest on any Notes and remaining unclaimed at the end of one year after such principal or interest shall have become due and payable (whether at maturity, upon call for redemption or otherwise) shall then be repaid to the Company and upon such repayment all liability of the Agent with respect thereto shall thereupon cease, without, however, limiting in any way any obligation the Company may have to pay the principal of or interest on this Note as the same shall become due. On any payment of an installment or interest being made details of such payment shall be entered by or on behalf of the Company in Schedule One hereto and the relevant space in Schedule One hereto recording any such payment shall be signed by or on behalf of the Company. On any redemption or purchase and cancellation of any of the Notes represented by this Temporary Global Note, details of such redemption or purchase and cancellation shall be entered by or on behalf of the Company in Schedule Two hereto and the relevant space in Schedule Two hereto recording any such redemption or purchase and cancellation shall be signed by or on behalf of the Company. Upon any such redemption or purchase and cancellation, the principal amount of this Temporary Global Note and the Notes represented by this Temporary Global Note shall be reduced by the principal amount so redeemed or purchased and cancelled. Prior to the Exchange Date (as defined below), all payments (if any) on this Temporary Global Note will only be made to the bearer hereof to the extent that there is presented to the Agent by Euroclear or Cedel a certificate, substantially in the form set out in Schedule Three hereto, to the effect that it has received from or in respect of a person entitled to a particular principal amount of the Notes (as shown by its records) a certificate from such person in or substantially in the form of Certificate "A" as set out in Schedule Three hereto. After the Exchange Date the holder of this Temporary Global Note will not be entitled to receive any payment of interest hereon. On or after the date which is 40 days after the Issue Date (the "Exchange Date"), this Temporary Global Note may be exchanged, in whole or in part for, as determined by the Company or as specified in the Pricing Supplement, either Definitive Notes and (if applicable) Receipts, Coupons and Talons in or substantially in the forms set out in Parts 3, 4, 5 and 6, respectively, of Appendix B of the Agency Agreement (on the basis that all appropriate details have been included on the face of such Definitive Notes and (if applicable) Receipts, Coupons and Talons and the Pricing Supplement (or the relevant provisions of the Pricing Supplement) have either been endorsed on or attached to such Definitive Notes) and/or, a Permanent Global Note in the form set out in Part 2 of Appendix B to the Agency Agreement (together with the Pricing Supplement attached thereto) upon presentation of II-3 this Temporary Global Note by the bearer hereof at the offices of the Agent in London, England (or at such other place outside the United States of America, its territories and possessions, any State of the United States and the District of Columbia (the "United States") as the Agent may agree). Definitive Notes or the Permanent Global Note shall be so issued and delivered in exchange for only that portion of this Temporary Global Note in respect of which there shall have been presented to the Agent by Euroclear or Cedel a certificate, substantially in the form set out in Schedule Three hereto, to the effect that it has received from or in respect of a person entitled to a particular principal amount of the Notes (as shown by its records) a certificate from such person in or substantially in the form of Certificate "A" as set out in Schedule Three hereto and, in the case of Definitive Notes, subject to such notice period as may be specified in the Pricing Supplement. If Definitive Notes and (if applicable) Receipts, Coupons and Talons have already been issued in exchange for all the Notes represented for the time being by the Permanent Global Note, then this Temporary Global Note may only thereafter be exchanged for Definitive Notes and (if applicable) Receipts, Coupons and Talons pursuant to the terms hereof. On an exchange of the whole of this Temporary Global Note, this Temporary Global Note shall be surrendered to the Agent. On an exchange of part only of this Temporary Global Note, details of such exchange shall be entered by or on behalf of the Company in Schedule Two hereto and the relevant space in Schedule Two hereto recording such exchange shall be signed by or on behalf of the Company. If, following the issue of a Permanent Global Note in exchange for some of the Notes represented by this Temporary Global Note, further Notes represented by this Temporary Global Note are to be exchanged pursuant to this paragraph, such exchange may be effected, without the issue of a new Permanent Global Note, by the Company or its agent endorsing Schedule Two of the Permanent Global Note previously issued to reflect an increase in the aggregate principal amount of the Permanent Global Note which would otherwise have been issued on such exchange. Until the exchange of the whole of this Temporary Global Note as aforesaid, the bearer hereof shall in all respects (except as otherwise provided herein) be entitled to the same benefits as if it were the bearer of Definitive Notes, Receipts and Coupons in the form set out in Part 3, Part 4 and Part 5, respectively, of Appendix B to the Agency Agreement. [The Company has complied with its obligations under any rules (the "listing rules") made under Section 142(6) of the Financial Services Act 1986 in respect of its debt securities listed on The International Stock Exchange of the United Kingdom and the Republic of Ireland Limited. Since information II-4 was last provided in compliance with those obligations, the Company, having made all reasonable enquiries, has not become aware of any change in circumstances which could reasonably be regarded as significantly and adversely affecting its ability to meet its obligations in respect hereof as they fall due.]3 This Temporary Global Note is governed by, and shall be construed in accordance with, the laws of the State of New York, United States of America, applicable to agreements made and to be performed wholly within such jurisdiction. This Temporary Global Note shall not be valid unless authenticated by the Agent. This Temporary Global Note may be duly executed on behalf of the Company by manual or facsimile signature. - ------------------------ 3 Delete in the case of all Notes other than Notes denominated in sterling. II-5 IN WITNESS WHEREOF, the Company has caused this Temporary Global Note to be duly executed on its behalf. TOYOTA MOTOR CREDIT CORPORATION Dated: By: -------------------------- John McGovern Senior Vice President FISCAL AGENT'S CERTIFICATE OF ATTEST: AUTHENTICATION This is one of the Temporary Global Notes described in the ---------------------------- within mentioned Agency Agree- Wolfgang Jahn ment. Senior Vice President and General Manager By or on behalf of THE CHASE MANHATTAN BANK, N.A. as Fiscal Agent By: -------------------------- (Authorized Signatory) II-6 Schedule One ------------ PART I ------ INTEREST PAYMENTS ----------------- Confirmation of Total Amount payment by or Interest Date of of Interest Amount of on behalf of Payment Date Payment Payable Interest Paid the Company - --------------------------------------------------------------------------- First --------- ------------ ------------- --------------- Second --------- ------------ ------------- --------------- [continue numbering until the appropriate number of interest payment dates for the particular Series of Notes is reached] II-7 PART II ------- INSTALLMENT PAYMENTS -------------------- Confirmation of Total Amount Amount of payment by or Interest Date of of Installments Installments on behalf of Payment Date Payment Payable Paid the Company - ------------------------------------------------------------------------- First ------- --------------- ------------ ---------------- Second ------- --------------- ------------ ---------------- [continue numbering until the appropriate number of installment payment dates for the particular Series of Notes is reached] II-8
Schedule Two ------------ SCHEDULE OF EXCHANGES --------------------- FOR NOTES REPRESENTED BY A PERMANENT GLOBAL NOTE OR --------------------------------------------------- DEFINITIVE NOTES, OR REDEMPTIONS OR PURCHASES AND CANCELLATIONS --------------------------------------------------------------- The following exchanges of a part of this Temporary Global Note for Notes represented by a Permanent Global Note or Definitive Notes or redemptions or purchases and cancellation of this Temporary Global Note have been made: Part of principal amount of this Temporary Remaining Remaining Global Note principal amount payable exchanged for amount of this under this Notes represented Temporary Temporary by a Permanent Global Note Global Note Date of Global Note or following such following such exchange, or Definitive Notes exchange, or exchange, or redemption or or redeemed or redemption or redemption or Notation made purchase and purchased and purchase and purchase and by or on behalf cancellation cancelled cancellation cancellation of the Company - ------------------------------------------------------------------------------ - ------------ ----------------- -------------- -------------- --------------- - ------------ ----------------- -------------- -------------- --------------- - ------------ ----------------- -------------- -------------- --------------- - ------------ ----------------- -------------- -------------- ---------------
II-9 Schedule Three -------------- FORM OF CERTIFICATE TO BE PRESENTED BY EUROCLEAR OR CEDEL ------------------ TOYOTA MOTOR CREDIT CORPORATION [Title of Notes] (the "Securities") This is to certify that, based solely on certifications we have received in writing, by telex or by electronic transmission from member organizations appearing in our records as persons being entitled to a portion of the principal amount set forth below (our "Member Organizations") substantially to the effect set forth in the Agency Agreement, as of the date hereof, [ ] principal amount of above-captioned Securities (i) is owned by persons that are not citizens or residents of the United States, partnerships, corporations or other entities created or organized under the laws of the United States or any estate or trust the income of which is subject to United States federal income taxation regardless of its source ("United States persons"), (ii) is owned by United States persons that (a) are foreign branches of United States financial institutions (as defined in U.S. Treasury Regulations Section 1.165- 12(c)(1)(v)) ("financial institutions") purchasing for their own account or for resale, or (b) acquired the Securities through foreign branches of United States financial institutions and who hold the securities through such United States financial institutions on the date hereof (and in either case (a) or (b), each such United States financial institution has agreed, on its own behalf, or through its agent, that we may advise the Company or the Company's agent that it will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended, and the regulations thereunder), or (iii) is owned by the United States or foreign financial institutions for purposes of resale during the restricted period (as defined in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and to the further effect that United States or foreign financial institutions described in clause (iii) (whether or not also described in clause (i) or (ii)) have certified that they have not acquired the Securities for purposes of resale directly or indirectly to a United States person or to a person within the United States or its possessions. As used herein, "United States" means the United States of America (including the States and the District of Columbia); and its "possessions" include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands. II-10 We further certify (i) that we are not making available herewith for exchange (or, if relevant, exercise of any rights or collection of any interest) any portion of the temporary global Security excepted in such Member Organization certifications and (ii) that as of the date hereof we have not received any notification from any of our Member Organizations to the effect that the statements made by such Member Organizations with respect to any portion of the part submitted herewith for exchange (or, if relevant, exercise of any rights or collection of any interest) are no longer true and cannot be relied upon at the date hereof. We will retain all certificates received from Member Organizations for the period specified in U.S. Treasury Regulation Section 1.163-5(c)(2)(i)(D)(3)(i)(C). We understand that this certification is required in connection with certain tax laws of the Unites States. In connection therewith, if administrative and legal proceedings are commenced or threatened in connection with which this certification is or would be relevant, we irrevocably authorize you to produce this certification to any interested party in such proceedings. Dated: , 199 *. Yours faithfully, [MORGAN GUARANTY TRUST COMPANY OF NEW YORK, Brussels office, as operator of the Euroclear System] or Cedel Bank, societe anonyme By: ----------------------- * This certificate is not to be dated earlier than five days prior to the Exchange Date or relevant payment date, as applicable. II-11 CERTIFICATE "A" FORM OF CERTIFICATE TO BE PRESENTED TO EUROCLEAR OR CEDEL ------------------ TOYOTA MOTOR CREDIT CORPORATION [Title of Notes] (the "Securities") This is to certify that as of the date hereof, and except as set forth below, the above-captioned Securities held by you for our account (i) are owned by person(s) that are not citizens or residents of the United States, partnerships, corporations or other entities created or organized under the laws of the United States or any estate or trust the income of which is subject to United States federal income taxation regardless of its source ("United States person(s)"), (ii) are owned by United States person(s) that (a) are foreign branches of United States financial institutions (as defined in U.S. Treasury Regulations Section 1.165-12(c)(1)(v)) ("financial institutions") purchasing for their own account or for resale, or (b) acquired the Securities through foreign branches of United States financial institutions and who hold the Securities through such United States financial institutions on the date hereof (and in either case (a) or (b), each such United States financial institution hereby agrees, on its own behalf or through its agent, that you may advise the Company or the Company's agent that it will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended, and the regulations thereunder), or (iii) are owned by United States or foreign financial institutions for purposes of resale during the restricted period (as defined in U.S. Treasury Regulations restricted Section 1.163-5(c)(2)(i)(D)(7)), and in addition if the owner of the Securities is a United States or foreign financial institution described in clause (iii) (whether or not also described in clause (i) or (ii)) this is further to certify that such financial institution has not acquired the Securities for purposes of resale directly or indirectly to a United States person or to a person within the United States or its possessions. As used herein, "United States" mean the United States of America (including the States and the District of Columbia); and its "possessions" include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands. II-12 We undertake to advise you promptly by tested telex or facsimile on or prior to the date on which you intend to submit your certification relating to the Securities held by you for our account in accordance with your documented procedures if any applicable statement herein is not correct on such date, and in the absence of any such notification it may be assumed that this certification applies as of such date. This certification excepts and does not relate to [ ] of such interest in the above Securities in respect of which we are not able to certify and as to which we understand exchange and delivery of definitive Securities and/or an interest in a Permanent Global Note (or, if relevant, exercise of any right or collection of any interest) cannot be made until we do so certify. We understand that this certification is required in connection with certain tax laws of the United States. In connection therewith, if administrative and legal proceedings are commended or threatened in connection with which this certification is or would be relevant, we irrevocably authorize you to produce this certification to any interested party in such proceedings. Dated: , 199 * Yours faithfully, Name of Person Making Certification By: ---------------------------- - ------------------------ * This certificate is not to be dated earlier than fifteen days prior to the Exchange Date or relevant payment date, as applicable. II-13 PART 2 ------ FORM OF PERMANENT GLOBAL NOTE OF -------------------------------- TOYOTA MOTOR CREDIT CORPORATION ------------------------------- [THE ISSUER IS NOT AN INSTITUTION AUTHORIZED UNDER THE BANKING ACT OF 1987 AND THIS IS A MEDIUM-TERM NOTE ISSUED IN ACCORDANCE WITH REGULATIONS MADE UNDER SECTION 4 OF THE BANKING ACT OF 1987. REPAYMENT OF THE PRINCIPAL AND THE PAYMENT OF ANY INTEREST IN CONNECTION WITH THIS MEDIUM-TERM NOTE HAVE NOT BEEN GUARANTEED.]1 ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE. TOYOTA MOTOR CREDIT CORPORATION (Incorporated under the laws of the State of California, U.S.A.) PERMANENT GLOBAL NOTE representing [Specified Currency and Principal Amount of Series] EURO MEDIUM-TERM NOTES DUE [Year of Maturity] Series No. [ ] Serial No. [ ] The Note represented by this Permanent Global Note are listed on The International Stock Exchange of the United Kingdom and the Republic of Ireland Limited (the "London Stock Exchange")2 This Note is a Permanent Global Note in respect of a duly authorized issue of [Specified Currency and Principal Amount of Series] Euro Medium- Term Notes Due [Year of Maturity] (the "Notes") of [Specified Currency and Specified Denomination] each of Toyota Motor Credit Corporation (the "Company"). References herein to the Conditions shall be to the Terms and Conditions of the Notes (the "Conditions") as set out in Appendix A to the Agency Agreement (as defined below) as modified and supplemented by the information set out in the Pricing Supplement (the "Pricing Supplement") - ------------------------ 1 Delete in the case of all Notes other than Notes denominated in sterling. 2 Delete in the case of a Series of unlisted Notes or add reference to other stock exchange, if applicable. II-14 (which is attached hereto) and, in the event of any conflict between the provisions of the Conditions and the information set out in the Pricing Supplement, the latter shall prevail. Words and expressions defined in the Conditions and the Pricing Supplement and not otherwise defined herein shall have the same meanings when used herein. This Permanent Global Note is issued subject to, and with the benefit of, the Conditions and an Amended and Restated Agency Agreement (the "Agency Agreement", which expression shall be construed as a reference to that agreement as the same may be amended or supplemented from time to time) dated July 28, 1994, between the Company and The Chase Manhattan Bank, N.A. (the "Agent") and the other agents named therein. This Permanent Global Note is to be held by a common depositary for Morgan Guaranty Trust Company of New York, Brussels Office, as operator of the Euroclear System ("Euroclear"), and Cedel Bank, societe anonyme ("Cedel") on behalf of account holders which have the Notes represented by this Permanent Global Note credited to their respective securities accounts with Euroclear or Cedel from time to time. For value received, the Company, subject to and in accordance with the Conditions, promises to pay to the bearer hereof on [each Installment Date the relevant Installment Amount] the [Maturity Date] [Interest Payment Date falling in the Redemption Month], or on such earlier date as the Notes may become due and repayable in accordance with the Conditions, the amount payable under the Conditions on redemption of the Notes then represented by this Permanent Global Note and to pay interest (if any) on the principal amount of the Notes from time to time represented by this Permanent Global Note calculated and payable as provided in the Conditions together with any other sums payable under the Conditions, upon presentation and, at maturity, surrender of this Permanent Global Note at the principal office of the Agent in London, England, or at the offices of any of the other paying agents located outside the United States (as defined below) (except as provided in the Conditions) from time to time appointed by the Company in respect of the Notes. Any monies paid by the Company to the Agent for the payment of or interest on any Notes and remaining unclaimed at the end of one year after such principal or interest shall have become due and payable (whether at maturity, upon call for redemption or otherwise) shall then be repaid to the Company and upon such repayment all liability of the Agent with respect thereto shall thereupon cease, without, however, limiting in any way any obligation the Company may have to pay the principal of or interest on this Note as the same shall become due. On any payment of an installment or interest being made details of such payment shall be entered by or on behalf of the Company in Schedule One hereto and the relevant space in Schedule One II-15 hereto recording any such payment shall be signed by or on behalf of the Company. On any redemption or purchase and cancellation of any of the Notes represented by this Permanent Global Note, details of such redemption or purchase and cancellation shall be entered by or on behalf of the Company in Schedule Two hereto and the relevant space in Schedule Two hereto recording any such redemption or purchase and cancellation shall be signed by or on behalf of the Company. Upon any such redemption or purchase and cancellation, the principal amount of this Permanent Global Note and the Notes represented by this Permanent Global Note shall be reduced by the principal amount so redeemed or purchased and cancelled. The Notes represented by this Permanent Global Note were originally represented by a Temporary Global Note. Unless such Temporary Global Note was exchanged in whole on the issue hereof, such Temporary Global Note may be further exchanged, on the terms and conditions set out therein, for this Permanent Global Note. If any such exchange occurs following the issue hereof, the Company or its agent shall endorse Schedule Two hereto to reflect the increase in the aggregate principal amount of this Permanent Global Note due to each such exchange, whereupon the principal amount hereof shall be increased for all purposes by the amount so exchanged and endorsed. At the option of the Company or if specified in the Pricing Supplement, this Permanent Global Note may be exchanged, in whole, but not in part, for security-printed Definitive Notes and (if applicable) Receipts, Coupons and Talons in or substantially in the forms set out in Parts 3, 4, 5 and 6, respectively, of Appendix B of the Agency Agreement (on the basis that all appropriate details have been included on the face of such Definitive Notes and (if applicable) Receipts, Coupons and Talons and the Pricing Supplement (or the relevant provisions of the Pricing Supplement) have been either endorsed on or attached to such Definitive Notes) in denominations of [Specified Currency and Specified Denomination] each. Such exchange may also require written notice, as specified in the Pricing Supplement, being given to the Agent by Euroclear or Cedel. Such exchange, if any, will be made upon presentation of this Permanent Global Note by the bearer hereof on any day (other than a Saturday or a Sunday) on which banks are open for business in London at the principal office of the Agent in London, England; provided, however, the first notice given to the Agent by Euroclear or Cedel shall give rise to the issue of Definitive Notes for the total amount of Notes represented by this Global Note. The aggregate principal amount of Definitive Notes issued upon an exchange of this Permanent Global Note will be equal to the aggregate principal amount of this Permanent Global Note submitted by the bearer hereof for exchange (to the extent that such principal amount does not II-16 exceed the aggregate principal amount of this Permanent Global Note, as adjusted, as shown in Schedule Two hereto). On an exchange of the whole of this Permanent Global Note, this Permanent Global Note shall be surrendered to the Agent. Until the exchange of the whole of this Permanent Global Note as aforesaid, the bearer hereof shall in all respects be entitled to the same benefits as if it were the bearer of Definitive Notes, Receipts, Coupons and Talons in the form set out in Parts 3, 4, 5 and 6, respectively, of Appendix B to the Agency Agreement. [The Company has complied with its obligations under any rules (the "listing rules") made under Section 142(6) of the Financial Services Act 1986 in respect of its debt securities listed on The International Stock Exchange of the United Kingdom and the Republic of Ireland Limited. Since information was last provided in compliance with those obligations, the Company, having made all reasonable enquiries, has not become aware of any change in circumstances which could reasonably be regarded as significantly and adversely affecting its ability to meet its obligations in respect hereof as they fall due.]3 This Permanent Global Note is governed by, and shall be construed in accordance with, the laws of the State of New York, United States of America, applicable to agreements made and to be performed wholly within such jurisdiction. This Permanent Global Note shall not be valid unless authenticated by the Agent. This Permanent Global Note may be duly executed on behalf of the Company by manual or facsimile signature. - ------------------------ 3 Delete in the case of all Notes other than Notes denominated in sterling and listed on the London Stock Exchange. II-17 IN WITNESS WHEREOF, the Company has caused this Permanent Global Note to be duly executed on its behalf. TOYOTA MOTOR CREDIT CORPORATION Dated: By: -------------------------- John McGovern Senior Vice President FISCAL AGENT'S CERTIFICATE OF ATTEST: AUTHENTICATION This is one of the Permanent Global Notes described in the -------------------------- within mentioned Agency Agreement. Wolfgang Jahn Senior Vice President and General Manager By or on behalf of THE CHASE MANHATTAN BANK, N.A., as Fiscal Agent By: ---------------------------- (Authorized Signatory) II-18 Schedule One ------------ PART I ------ INTEREST PAYMENTS ----------------- Confirmation of Total Amount payment by or Interest Date of of Interest Amount of on behalf of Payment Date Payment Payable Interest Paid the Company - --------------------------------------------------------------------------- First --------- ------------ ------------- --------------- Second --------- ------------ ------------- --------------- [continue numbering until the appropriate number of interest payment dates for the particular Series of Notes is reached] II-19 PART II ------- INSTALLMENT PAYMENTS -------------------- Confirmation of Total Amount Amount of payment by or on Installment Date of of Installments Installments behalf of the Date Payment Payable Paid Company - --------------------------------------------------------------------------- First --------- --------------- ------------- --------------- Second --------- --------------- ------------- --------------- [continue numbering until the appropriate number of installment payment dates for the particular Series of Notes is reached] II-20
Schedule Two ------------ SCHEDULE OF EXCHANGES OF A TEMPORARY ------------------------------------ GLOBAL NOTE AND FOR DEFINITIVE NOTES ------------------------------------- OR REDEMPTIONS OR PURCHASES AND CANCELLATIONS --------------------------------------------- The following increases of this Permanent Global Note, exchanges of this Permanent Global Note for Definitive Notes or redemptions or purchases and cancellations of this Permanent Global Note have been made: Increase in Remaining Remaining principal amount Part of principal principal amount amount payable of this Permanent amount of this of this Permanent under this Global Note due to Permanent Global Global Note Permanent Global exchanges of a Note exchanged following such Note following Date of exchange, Temporary Global for Definitive exchange, or such exchange, or or redemption or Note for this Notes or redeemed redemption or redemption or Notation made by purchase and Permanent Global or purchased and purchase and purchase and or on behalf of the cancellation Note cancelled cancellation cancellation Company - -------------------------------------------------------------------------------------------------------------------------- - ---------------- ------------------ ----------------- ----------------- ----------------- -------------------- - ---------------- ------------------ ----------------- ----------------- ----------------- -------------------- - ---------------- ------------------ ----------------- ----------------- ----------------- --------------------
II-21 PART 3 ------ (FACE OF NOTE) FORM OF DEFINITIVE NOTE OF -------------------------- TOYOTA MOTOR CREDIT CORPORATION ------------------------------- [THE ISSUER IS NOT AN INSTITUTION AUTHORIZED UNDER THE BANKING ACT 1987 AND THIS IS A MEDIUM-TERM NOTE ISSUED IN ACCORDANCE WITH REGULATIONS MADE UNDER SECTION 4 OF THE BANKING ACT 1987. REPAYMENT OF THE PRINCIPAL AND THE PAYMENT OF ANY INTEREST OR PREMIUM IN CONNECTION WITH THIS MEDIUM-TERM NOTE HAVE NOT BEEN GUARANTEED.]4 ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE. TOYOTA MOTOR CREDIT CORPORATION (Incorporated under the laws of the State of California, U.S.A.) representing [Specified Currency and Principal Amount of Series] EURO MEDIUM-TERM NOTES DUE [Year of Maturity] Series No. [ ] Serial No. [ ] The Notes represented by this Definitive Note are listed on The International Stock Exchange of the United Kingdom and the Republic of Ireland Limited (the "London Stock Exchange")5 This Note is one of a series of notes of [Specified Currency and Principal Amount of Series] ("Notes") each of Toyota Motor Credit Corporation (the "Company"). References herein to the Conditions shall be to the Terms and Conditions of the Notes (the "Conditions") as set out in Appendix A to the Agency Agreement (as defined below) as modified and supplemented by the information set out in the Pricing Supplement (the "Pricing Supplement") (which is reproduced on the reverse hereof) and, in the event of any conflict - ------------------------- 4 Delete in the case of all Notes other than Notes denominated in sterling. 5 Delete in the case of a Series of unlisted Notes or add reference to other stock exchange, if applicable. II-22 between the provisions of the Conditions and the information set out in the Pricing Supplement, the latter shall prevail. Words and expressions defined in the Conditions and the Pricing Supplement and not otherwise defined herein shall have the same meanings when used herein. This Note is issued subject to, and with the benefit of, the Conditions and an Amended and Restated Agency Agreement (the "Agency Agreement", which expression shall be construed as a reference to that agreement as the same may be amended or supplemented from time to time) dated July 28, 1994, between the Company and The Chase Manhattan Bank, N.A. (the "Agent") and the other agents named therein. For value received, the Company, subject to and in accordance with the Conditions, promises to pay to the bearer hereof on [each Installment Date the relevant Installment Amount] the [Maturity Date] [Interest Payment Date falling in the Redemption Month], or on such earlier date as the Notes may become due and repayable in accordance with the Conditions, the amount payable on redemption of this Note and to pay interest (if any) on the principal amount of this Note calculated and payable as provided in the Conditions. Title to this Note and to any Coupon, Talon or Receipt appertaining hereto shall pass by delivery. The Company may treat the bearer hereof as the absolute owner of this Note for all purposes (whether or not this Note shall be overdue and notwithstanding any notation of ownership or writing hereof or notice of any previous loss or theft thereof). [The Company has complied with its obligations under any rules (the "listing rules") made under Section 142(6) of the Financial Services Act 1986 in respect of its debt securities listed on The International Stock Exchange of the United Kingdom and the Republic of Ireland Limited. Since information was last provided in compliance with those obligations, the Company, having made all reasonable enquiries, has not become aware of any change in circumstances which could reasonably be regarded as significantly and adversely affecting its ability to meet its obligations in respect hereof as they fall due.]6 This Note is governed by, and shall be construed in accordance with, the laws of the State of New York, United States of America, applicable to agreements made and to be performed wholly within such jurisdiction. - ------------------------ 6 Delete in the case of all Notes other than Notes denominated in sterling and listed on the London Stock Exchange. II-23 This Note may be duly executed on behalf of the Company by manual or facsimile signature. II-24 IN WITNESS WHEREOF, the Company has caused this Note to be duly executed on its behalf. Dated: TOYOTA MOTOR CREDIT CORPORATION [SEAL] By: --------------------------- John McGovern Senior Vice President FISCAL AGENT'S CERTIFICATE OF ATTEST: AUTHENTICATION This is one of the Notes described in the within ------------------------------- mentioned Agency Agreement. Wolfgang Jahn Senior Vice President and General Manager By or on behalf of THE CHASE MANHATTAN BANK, N.A. as Fiscal Agent By: ----------------------------- (Authorized Signatory) Reverse of Note - Terms and Conditions of the Notes II-25 PART 4 ------ FORM OF COUPON -------------- (Face of Coupon) TOYOTA MOTOR CREDIT CORPORATION (Incorporated under the laws of the State of California, U.S.A.) [Specified Currency and Principal Amount of Series] EURO MEDIUM-TERM NOTES DUE [Year of Maturity] Series No. [ ] Serial No. [ ] Part A ------ (Reverse of Coupon) For Fixed Rate Notes: - -------------------- Coupon No. F This Coupon is payable to bearer, separately Coupon for negotiable and subject to the Terms and [ ] Conditions of the Note to which it appertains due on [ ] [19[ ]/20[ ]] [SEAL] ATTEST: TOYOTA MOTOR CREDIT CORPORATION By: By: -------------------------------- -------------------------------- Authorized Officer Authorized Officer ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES TAX LAWS INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE. II-26 Part B ------ (Reverse of Coupon) For Floating Rate, Dual Currency and Indexed Notes: - --------------------------------------------------- Coupon No. F Coupon for the amount due in accordance with Coupon due the Terms and Conditions of the said Notes. in [ ] This Coupon is payable to bearer, separately [19[ ]/20[ ]] negotiable and subject to such Terms and Conditions of the Note to which it appertains, under which it may become void before its due date. [SEAL] ATTEST: TOYOTA MOTOR CREDIT CORPORATION By: By: ------------------------------ ------------------------------ Authorized Officer Authorized Officer ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES TAX LAWS INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE. II-27 (Reverse of Coupon) ISSUING AND PRINCIPAL PAYING AGENT ---------------------------------- The Chase Manhattan Bank, N.A. Woolgate House Coleman Street P.O. Box 16 London EC2P 2HD PAYING AGENT ------------ Chase Manhattan Bank Luxembourg S.A. 5 Rue Plaetis L-2338 Luxembourg and/or such other or further Agent and other or further Paying Agents and/or specified offices as may from time to time be duly appointed by the Company and notice of which has been given to the Noteholders. II-28 (On the front) PART 5 ------ FORM OF RECEIPT --------------- ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE. TOYOTA MOTOR CREDIT CORPORATION (Incorporated under the laws of the State of California, U.S.A.) [Specified Currency and Principal Amount of Series] EURO MEDIUM-TERM NOTES DUE [Year of Maturity] Series No. [ ] Serial No. [ ] Receipt for the sum of [ ] being the installment of principal payable in accordance with the Terms and Conditions endorsed on the Note to which this Receipt appertains (the "Conditions") on [ ]. This Receipt is issued subject to and in accordance with the Conditions which shall be binding upon the holder of this Receipt (whether or not it is for the time being attached to such Note) and is payable at the specified office of any of the Paying Agents set out on the reverse of the Note to which this Receipt appertains (and/or any other or further Paying Agents and/or specified offices as may from time to time be duly appointed and notified to the Noteholders). II-29 This Receipt must be represented for payment together with the Note to which it appertains. The Company shall have no obligation in respect of any Receipt presented without the Note to which it appertains or any unmatured Receipts. [SEAL] ATTEST: TOYOTA MOTOR CREDIT CORPORATION By: By: ----------------------------- ----------------------------- Authorized Officer Authorized Officer II-30 PART 6 ------ FORM OF TALON ------------- (On the front) ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE. TOYOTA MOTOR CREDIT CORPORATION (Incorporated under the laws of the State of California, U.S.A) [Specified Currency and Principal Amount of Series] EURO MEDIUM-TERM NOTES DUE [Year of Maturity] Series No. [ ] Serial No. [ ] On and after [ ] further Coupons [and a further Talon] appertaining to the Note to which this Talon appertains will be issued at the specified office of any of the Paying Agents set out on the reverse hereof (and/or any other or further Paying Agents and/or specified offices as may from time to time be duly appointed and notified to the Noteholders) upon production and surrender of this Talon. This Talon may, in certain circumstances, become void under the Terms and Conditions endorsed on the Notes to which this Talon appertains. [SEAL] ATTEST: TOYOTA MOTOR CREDIT CORPORATION By: By: ----------------------------- --------------------------- Authorized Officer Authorized Officer II-31 (Reverse of Talon) ISSUING AND PRINCIPAL PAYING AGENT ---------------------------------- The Chase Manhattan Bank, N.A. Woolgate House Coleman Street P.O. Box 16 London EC2P 2HD PAYING AGENT ------------ Chase Manhattan Bank Luxembourg S.A. 5 Rue Plaetis L-2338 Luxembourg and/or such other or further Agent and other or further Paying Agents and/or specified offices as may from time to time be duly appointed by the Company and notice of which has been given to the Noteholders. II-32 Exhibit III to Amendment No. 1 to the Amended and Restated Agency Agreement APPENDIX C ---------- FORM OF CALCULATION AGENCY AGREEMENT ------------------------------------ Dated , 1995 ---------- TOYOTA MOTOR CREDIT CORPORATION U.S. $9,500,000,000 EURO MEDIUM-TERM NOTES ---------------------------- CALCULATION AGENCY AGREEMENT ---------------------------- III-1 TOYOTA MOTOR CREDIT CORPORATION U.S. $9,500,000,000 EURO MEDIUM-TERM NOTES ---------------------- CALCULATION AGENCY AGREEMENT ---------------------------- THIS AGREEMENT is made on , 1995 BETWEEN: ----------- (1) TOYOTA MOTOR CREDIT CORPORATION of Torrance, California, U.S.A. (the "Company"); and (2) THE CHASE MANHATTAN BANK, N.A. (London Office) (the "Calculation Agent", which expression shall include its successor or successors for the time being as calculation agent hereunder). WHEREAS: - ------- A. The Company has entered into a Euro Medium-Term Note Program Agreement with Banque Paribas, CS First Boston Limited, Goldman Sachs International, J.P. Morgan Securities Ltd., Lehman Brothers International (Europe), Morgan Stanley & Co. International Limited, Merrill Lynch International Limited, Merrill Lynch Finance S.A., Nomura International plc, Swiss Bank Corporation and UBS Limited dated July 28, 1994, as amended, under which up to U.S. $9,500,000,000 (or its equivalent in other currencies or currency units) in aggregate principal amount of Notes ("Notes") may be issued. B. The Notes will be issued subject to and with the benefit of an Amended and Restated Agency Agreement (the "Agency Agreement") dated July 28, 1994, as amended, and entered into between the Company and The Chase Manhattan Bank, N.A. as Agent (the "Agent", which expression shall include its successor or successors for the time being under the Agency Agreement) and the other parties named therein. NOW IT IS HEREBY AGREED that: - ----------------------- 1. Appointment of the Calculation Agent ------------------------------------ The Company hereby appoints The Chase Manhattan Bank, N.A. (London Office) as Calculation Agent in respect of the Notes listed in the Schedule hereto which are for the time being outstanding (the "Relevant Notes") for the purposes set out in Clause 2 below, all upon terms and conditions hereinafter mentioned. III-2 2. Duties of Calculation Agent --------------------------- The Calculation Agent shall in relation to each series of Relevant Notes (each a "Series") perform all the functions and duties imposed on the Calculation Agent by the terms and conditions of the relevant Series (the "Conditions"). 3. Expenses -------- Except as provided in Clause 4 below, the Calculation Agent shall bear all expenses incurred by it in connection with its said services. 4. Indemnity --------- (a) The Company shall indemnify and keep indemnified the Calculation Agent against any losses, liabilities, costs, claims, actions or demands (including but not limited to, all reasonable costs, legal fees, charges and expenses paid or incurred by the Calculation Agent in disputing or defending any of the foregoing) which the Calculation Agent may incur or which may be made against it (excluding consequential losses and losses of profit) as a result of or in connection with its appointment or the exercise of its powers and duties under this Agreement except such as may result from its own willful default, negligence or bad faith or that of its officers, directors or employees or any of them, or breach by it of the terms of this Agreement. (b) The Calculation Agent shall indemnify and keep indemnified the Company against any losses, liabilities, costs, claims, actions, or demands (including, but not limited to, all reasonable costs, legal fees, charges and expenses paid or incurred by the Company in disputing or defending any of the foregoing) which the Company may incur or which may be made against it (excluding consequential losses and losses of profit) as a result of or in connection with the breach by the Calculation Agent of the terms of this Agreement or its willful default, negligence or bad faith or that of its officers, directors or employees or any of them. 5. Conditions of Appointment ------------------------- a. In acting hereunder in connection with the Relevant Notes, the Calculation Agent shall not act as agent of the Company and shall not thereby assume any obligations towards or relationship of agency or trust for or with any of the owners or holders of the Relevant Notes or the coupons (if any) appertaining thereto (the "Coupons"). III-3 b. In relation to each Series, the Calculation Agent shall be obliged to perform such duties and only such duties as are herein and in the Conditions specifically set forth and no implied duties or obligations shall be read into the Agreement or the Conditions against the Calculation Agent. c. The Calculation Agent may consult with legal and other professional advisers and the opinion of such advisers shall be full and complete protection in respect of any action taken, omitted or suffered hereunder in good faith and in accordance with the opinion of such advisers. d. The Calculation Agent shall be protected and shall incur no liability for or in respect of any action taken, omitted or suffered in reliance for or in respect of any action taken, omitted or suffered in reliance upon any instruction, request or order from the Company or the Agent, or any notice, resolution, direction, consent, certificate, affidavit, statement, cable, telex or other paper or document which it reasonably believes, after making reasonable investigation of the same, to be genuine and to have been delivered, signed or sent by the proper party or parties or upon written instructions from the Company. e. The Calculation Agent, and any of its officers, directors and employees, may become the owner of, or acquire any interest in, any Notes or Coupons (if any) with the same rights that it or he or she would have if the Calculation Agent were not appointed hereunder, and may engage or be interested in any financial or other transaction with the Company and may act on, or as depositary, trustee or agent for, any committee or body of holders of Notes or Coupons (if any) or other obligations of the Company as freely as if the Calculation Agent were not appointed hereunder. 6. Termination of Appointment -------------------------- a. The Company may terminate the appointment of the Calculation Agent at any time by giving to the Calculation Agent and the Agent at least 90 days prior written notice to that effect, provided that, so long as any of the Relevant Notes is outstanding, (i) such notice shall not expire less than 45 days before any date upon which any payment is due in respect of any Relevant Notes and (ii) notice shall be given in accordance with Condition 16 at least 30 days prior to any removal of the Calculation Agent. b. Notwithstanding the provisions of sub-clause (a) above, if at any time (i) the Calculation Agent becomes incapable of action, or is adjudged bankrupt or insolvent, or files a voluntary petition in bankruptcy or makes an assignment for the benefit of its creditors or consents to the III-4 appointment of an administrator, liquidator or administrative or other receiver of all or a substantial part of its property, or if an administrator, liquidator or administrative or other receiver of it or of all or a substantial part of its property is appointed, or it admits in writing its inability to pay or meet its debts as they may become due or suspends payment thereof or if any order of any court is entered approving any petition filed by or against it under the provisions of any applicable bankruptcy or insolvency law or if any public officer takes charge or control of the Calculation Agent or of its property or affairs for the purpose of rehabilitation, administration or liquidation or (ii) the Calculation Agent fails duly to perform any function or duty imposed on it by the Conditions and this Agreement, the Company may forthwith without notice terminate the appointment of the Calculation Agent, in which event notice thereof shall be given to the holders of the Relevant Notes in accordance with Condition 16 of the Relevant Notes as soon as practicable thereafter. c. The termination of the appointment pursuant to sub-clause (a) or (b) above of the Calculation Agent hereunder shall not entitle the Calculation Agent to any amount by way of compensation but will be without prejudice to any amount then accrued and due. d. The Calculation Agent may resign its appointment hereunder at any time by giving to the Company and the Agent at least 90 days prior written notice to that effect. Following receipt of a notice of resignation from the Calculation Agent, the Company shall promptly give notice thereof to the holders of the Relevant Notes in accordance with Condition 16 of the Relevant Notes. e. Notwithstanding the provisions of sub-clauses (a), (b) and (d) above, so long as any of the Notes is outstanding, the termination of the appointment of the Calculation Agent (whether by the Company or by the resignation of the Calculation Agent) shall not be effective unless upon the expiry of the relevant notice a successor Calculation Agent has been appointed. f. Any successor Calculation Agent appointed hereunder shall execute and deliver to its predecessor and the Company an instrument accepting appointment hereunder, and thereupon such successor Calculation Agent, without further act, deed or conveyance, shall become vested with all the authority, rights, powers, trusts, immunities, duties and obligations of such predecessor with like effect as if originally named as the Calculation Agent hereunder. III-5 g. If the appointment of the Calculation Agent hereunder is terminated (whether by the Company or by the resignation of the Calculation Agent), the Calculation Agent shall on the date of which such termination takes effect deliver to the successor Calculation Agent all records concerning the Notes maintained by it (except such documents and records as it is obliged by law or regulation to retain or not to release), but shall have no other duties or responsibilities hereunder. h. Any corporation into which the Calculation Agent for the time being may be merged or converted or any corporation with which the Calculation Agent may be consolidated or any corporation resulting from any merger, conversion or consolidation to which the Calculation Agent shall be a party shall, to the extent permitted by applicable law, be the successor Calculation Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto. Notice of any such merger, conversion or consolidation shall forthwith be given to the Company and the Agent. i. Upon the termination of the appointment of the Calculation Agent, the Company shall make all reasonable efforts to appoint a further bank or investment bank as successor Calculation Agent. 7. Notices ------- Any notice or communication given hereunder shall be sufficiently given or served: a. if delivered in person to the relevant address specified below and, if so delivered, shall be deemed to have been delivered at time of receipt; or b. if sent by facsimile or telex to the relevant number specified below, shall be deemed to have been delivered upon transmission provided such transmission is confirmed by the answerback of the recipient (in the case of telex) or when an acknowledgment of receipt is received (in the case of facsimile): The Company: TOYOTA MOTOR CREDIT CORPORATION 19001 South Western Avenue A105 Torrance, California 90509 Telephone No: (310) 787-6195 Fax No: (310) 787-6194 Attention: Senior Vice President and General Manager III-6 The Agent: THE CHASE MANHATTAN BANK, N.A. Woolgate House Coleman Street P.O. Box 16 London EC2P 2HD Telephone No: 01202 347430 Fax No: 01202 347438 Telex No: 8954681 CMB G Attention: Manager, Corporate Trust Operations The Calculation Agent: THE CHASE MANHATTAN BANK, N.A. Woolgate House Coleman Street P.O. Box 16 London Ec2P 2HD Telephone No: 01202 347430 Fax No: 01202 347438 Telex No: 8954681 CMB G Attention: Manager, Corporate Trust Operations or to such other address and/or telex number of which notice in writing has been given to the parties hereto in accordance with the provisions of this Clause 7. 8. The descriptive headings in this Agreement are for convenience of reference only and shall not define or limit the provisions hereof. 9. Counterparts ------------ This Agreement may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute one instrument. 10. Governing Law ------------- This Agreement is governed by, and shall be construed in accordance with, the laws of the State of New York, United States of America, applicable to agreements made and to be performed wholly within such jurisdiction. III-7 IN WITNESS WHEREOF, this Agreement has been entered into as of the day and year first above written. TOYOTA MOTOR CREDIT CORPORATION BY: ---------------------------- Wolfgang Jahn Senior Vice President and General Manager THE CHASE MANHATTAN BANK, N.A. BY: ---------------------------- III-8 SCHEDULE OF RELEVANT NOTES -------------------------- Annotation by Series Maturity Principal Calculation Number Issue Date Date Amount Agent - ------------------------------------------------------------------------ - -------- ---------- ---------- ----------- ------------ - -------- ---------- ---------- ----------- ------------ - -------- ---------- ---------- ----------- ------------ - -------- ---------- ---------- ----------- ------------ - -------- ---------- ---------- ----------- ------------ - -------- ---------- ---------- ----------- ------------ - -------- ---------- ---------- ----------- ------------ - -------- ---------- ---------- ----------- ------------ - -------- ---------- ---------- ----------- ------------ - -------- ---------- ---------- ----------- ------------ - -------- ---------- ---------- ----------- ------------ - -------- ---------- ---------- ----------- ------------ III-9 Exhibit IV to Amendment No. 1 to the Amended and Restated Agency Agreement APPENDIX D ---------- FORM OF OPERATING & ADMINISTRATIVE PROCEDURES MEMORANDUM ---------------------------------- Purchasers must confirm all trades directly with Toyota Motor Credit Corporation (the "Company") and the Agent. (1) RESPONSIBILITIES OF THE AGENT The Agent will be responsible for the following: (i) preparing a Pricing Supplement (substantially in the form of Annex D hereto) to the Offering Circular giving details of the Notes to be issued; (ii) in the case of Notes which are to be listed on a stock exchange (the "relevant Stock Exchange"), distributing to the relevant Stock Exchange such number of copies of the Pricing Supplement as it may reasonably require; (iii) providing to the German Central Bank, at the end of each calendar month, information on the amount, interest rate and other terms of each issue of Deutsche Mark denominated Notes during the month, and such other information as the German Central Bank may require from time to time; (iv) providing the Ministry of Finance of Japan with all required notifications and reports (including any monthly reports as to amounts, issue dates and other terms of each Tranche of Yen- denominated Notes); and (v) providing the Director du Tresor with notification of the amount, interest rate and other terms of each issue of French Franc Notes and such other information as the Director du Tresor may require from time to time. RESPONSIBILITIES OF THE LISTING AGENT OR LEAD MANAGER ----------------------------------------------------- In the case of Notes to be listed on a Stock Exchange, the Listing Agent or Lead Manager will be responsible for the following: IV-1 (i) For Notes (including French Franc Notes) to be listed on the Paris Bourse, (a) obtaining the approval of the CBV to such listing, (b) obtaining the approval of the COB to the Pricing Supplement relating to such Notes and (c) publishing the notice legale relating to such Notes in the BALO; and (ii) in the case of all other Notes to be listed on a Stock Exchange, ensuring compliance with the Listing Rules and obtaining all necessary approvals for listing the Notes on the relevant Stock Exchange. The Company recognizes with respect to this clause (ii) its continuing obligation so long as any Notes under the Program are outstanding to apprise the applicable Dealers of any material adverse change in its consolidated financial position or its business operations. (2) SETTLEMENT ---------- The settlement procedures set out in Annex A shall apply to each issue of Notes, unless otherwise agreed between the Company and the relevant Dealer or Dealers; with issues of Dual Currency or Indexed Notes more time may be felt to be required to settle documentation which is not specifically included in the Agency Agreement. A Trading Desk Information list is set out in Annex E. IV-2 ANNEX A ------- SETTLEMENT PROCEDURES* --------------------- Day Latest time Action - --- ----------- ------ No later 4:00 p.m. The Company or its designated agent may agree than Issue to terms with one or more of the Purchasers Date minus for the issue and purchase of Notes. Once 3 agreement is reached, the Company or its designated agent telephones the Agent (to be confirmed by the telex or facsimile referred o below) to instruct it to prepare, complete, authenticate and issue a Temporary Global Note for each Series of Notes which are to be purchased by the relevant Purchaser(s), giving details of such Notes. 4:30 p.m. If a Purchaser has reached agreement with the Company by telephone, such Purchaser confirms the terms of the agreement to the Company by telex or facsimile (substantially in the form set out in Annex B) and copies the telex or facsimile to the Agent. The details set out in this telex or facsimile shall be conclusive evidence of the agreement (except in the case of manifest error). 5:00 p.m. The Company or its designated agent confirms its instructions to the Agent (including, in the case of Floating Rate Notes, for the purposes of rate fixing) by tested telex or facsimile (substantially in the form set out in Annex C). The Company or its designated agent also sends this telex or facsimile to the relevant Purchaser. The Agent telephones each of Euroclear and Cedel with a request - ------------------------ * In the case of a syndicated bond issue, certain of the Settlement Procedures set forth below will be revised as appropriate. IV-3 for a common code and ISIN number, if applicable, for each Series of Notes agreed to be issued, which Common Code and ISIN numbers, if applicable, are notified by the Agent by telephone to the Company or its designated agent and each Purchaser which has reached agreement with the Issuer. The Agent also notifies the relevant Stock Exchange by telex, facsimile or by hand of the details of the Notes to be issued by sending the Pricing Supplement to the relevant Stock Exchange. The Agent also sends copies of the Pricing Supplement to the Company. Issue Date 3:00 p.m. In the case of Floating Rate Notes, the minus 2 Agent notifies Euroclear, Cedel, the Company, the relevant Purchaser(s) and the relevant Stock Exchange by telex or facsimile of the interest rate for the first interest period (if already determined). Where the interest has not yet been determined, this will be notified in accordance with this paragraph as soon as it has been determined. The relevant Purchaser(s) instruct(s) Euroclear and/or Cedel to debit its account and pay the subscription price, against delivery of the Notes, to the Agent's account with Euroclear and/or Cedel on the Issue Date and copies the instructions to the Agent. Issue Date 3:00 p.m. The Agent prepares and authenticates a minus 1 Temporary Global Note for each Series of Notes which are to be purchased by the relevant Purchaser(s) on the Issue Date. All Temporary Global Notes are then delivered by the Agent to a common depositary for Euroclear and Cedel and instructions are given by the Agent to Euroclear or, as the case may be, Cedel, to credit the Notes represented by such Temporary Global IV-4 Notes to the Agent's distribution account. The Agent further instructs Euroclear or, as the case may be, Cedel to debit from the distribution account the principal amount of Notes of each Series which each Purchaser has agreed to purchase and to credit such principal amount to the account of such Purchaser with Euroclear or Cedel against payment to the account of the Agent of the subscription price for the relevant Notes for value on the Issue Date. The Company, the Purchaser(s) and the Agent may agree to arrange for "free delivery" to be made through the relevant clearing system if specified in the relevant Pricing Supplement. Issue Date Euroclear and Cedel debit and credit accounts in accordance with instructions received by them. The Agent pays to the Issuer the aggregate subscription moneys received by it to such account of the Company as shall have been notified to the Agent from time to time. On or sub- The Agent notifies the Company of the issue sequent to of Notes giving details of each Temporary the Issue Date Global Note and the principal sum represented thereby. Upon certification by the participating Dealer or Dealers to the Agent that the distribution with respect to a particular Tranche of Notes has been completed, the Agent shall determine and certify to Cedel, Euroclear or such other applicable clearing agency the applicable Exchange Date. Explanatory Notes ----------------- a. Each day is a day on which banks and foreign exchange markets are open for business in London, counted in reverse order from the proposed Issue Date. IV-5 b. The Issue Date must be a Business Day. For the purposes of this Memorandum, "Business Day" means a day which is both: (a) a day (other than a Saturday or a Sunday) on which commercial banks and foreign exchange markets settle payments in London; and (b) either (1) in relation to Notes denominated in a Specified Currency other than ECU, a day on which commercial banks and foreign exchange markets settle payments in the principal financial center of the country of the relevant Specified Currency (if other than London) or (2) in relation to Notes denominated in ECU, an ECU Settlement Day (as defined in the 1991 ISDA Definitions, as amended and updated from time to time, published by the International Swap and Derivatives Association, Inc.). c. Times given are the approximate times for the taking of the action in question and are references to London time. Such times can be modified upon the mutual agreement of the Purchaser, the Agent and the Company. d. If at any time the Agent is notified by the Sponsor or the relevant Stock Exchange that the listing of a Series of Notes has been refused or otherwise will not take place, the Agent shall immediately notify the Company, the Dealer and all the relevant Purchaser(s) (if not the Dealer). IV-6 ANNEX B ------- FORM OF PURCHASER'S CONFIRMATION TO COMPANY ------------------------------------------- [Date] To: TOYOTA MOTOR CREDIT CORPORATION 19001 South Western Avenue Torrance, California 90509 Attention: National Treasury Manager c.c. The Chase Manhattan Bank, N.A. Woolgate House Coleman Street P.O. Box 16 London EC2P 2HD Attention: Manager, Corporate Trust Operations TOYOTA MOTOR CREDIT CORPORATION - EMTN Program ---------------------------------------------- We hereby confirm the following agreement for the issue to us of Notes: (Terms used have the same meanings as set out in the Offering Circular dated July , 1995 relating to the Company's U.S. $9,500,000,000 Euro --- Medium-Term Note Program) [Include whichever of the following apply] 1. Series no. and, if not a new Series, the date from which the Tranche being issued is to form a single series with the other Notes comprising the Series: [ ] 2. Specified Currency (or Currencies in the case of Dual Currency Notes): [ ] 3. Aggregate Principal Amount: [ ] 4. Interest/Payment Basis; and if more [Fixed Rate / than one, the dates during which each Floating Rate / Interest/Payment Basis will apply: Zero Coupon / Index Linked / Dual Currency] IV-7 5. Issue Date: [ ] 6. Specified Denomination(s): [ ] 7. Issue Price: [ ] 8. Details relating to Partly Paid Notes; amount of each payment comprising the Issue Price and date on which each payment is to be made: [ ] 9. Interest Commencement Date: [ ] 10. Maturity Date (Fixed Rate, Zero Coupon, Dual Currency and Indexed Notes): [ ] 11. Redemption Month (Floating Rate Note): [month and year] 12. Final Redemption Amount: [ ]% 13. Installment Dates (Installment Note): [ ] 14. Installment Amounts (Installment Note): [ ]% per [ ] in principal amount 15. Fixed Rate of Interest (Fixed Rate Note): [ ]% per annum 16. Fixed Interest Date(s) (Fixed Rate Note): [ ] 17. Initial Broken Amount (Fixed Rate Note): [ ]% per [ ] in principal amount 18. Final Broken Amount (Fixed Rate Note): [ ]% per [ ] in principal amount 19. Applicable "Business Day Convention" (if different from that in Condition 4(a)(i)) (Fixed Rate): [ ] IV-8 20. Applicable definition of "Business Day" (if different from Condition 4(b)(i)): [ ] 21. Other Terms relating to the calculation of Interest (Fixed Rate Note): [ ] 22. Interest Period(s) or Specified Interest Payment Dates (Floating Rate Note): [ ] 23. Manner in which the Rate of Interest is to be determined (Floating Rate Note): [ ] (a) Reset Date(s) (Floating Rate Note): [ ] (b) ISDA Determination - Spread/ Margin: [+/-] [ ]% per annum (c) ISDA Determination - Floating Rate Option: [ ] (d) ISDA Determination - Designated Maturity: [ ] (e) Screen Rate Determination - Reference Rate: [ ] (f) Screen Rate Determination - Margin: [+/-] [ ]% per annum (g) Screen Rate Determination - Relevant Page: [ ] 24. Applicable Reference Banks (if different from that in Condition 4(b)(iv)(E)) (Floating Rate Note): [ ] 25. Applicable "Interest Determination Date" definition (if different from that in Condition 4(b)(iv)(F) (Floating Rate Note): [ ] 26. Applicable "Business Day Convention" (if different from IV-9 that in Condition 4(b)(i)) (Floating Rate Note): [ ] 27. Applicable definition of "Business Day" (if different from Condition 4(b)(i)) (Floating Rate Note): [ ] 28. Minimum Rate of Interest (Floating Rate Note): [ ]% per annum 29. Maximum Rate of Interest (Floating Rate Note): [ ]% per annum 30. Agent responsible for determining Rate of Interest (Floating Rate Note): [ ] 31. Accrual Yield (Zero Coupon Note): [ ]% per annum 32. Reference Price (Zero Coupon Note): [ ] 33. Other Formula or Basis for [ give details] determining amount payable under Condition 5(f)(iii) (Zero Coupon Note) 34. Index (Indexed Notes): (a) Formula (Indexed Notes): [ give details] (b) Agent responsible for calculating the principal/interest due (Indexed Notes): [ ] (c) Provisions where calculation by reference to Index and/or Formula is impossible or impracticable: [ ] 35. Dual Currency Note: (a) Rate(s) of Exchange/method of calculating Rate(s) of Exchange (Dual Currency Note): [ give details] IV-10 (b) Agent, if any, responsible for calculating the principal and/or interest payable (Dual Currency Note): [ ] (c) Provisions where calculation by reference to Rate(s) of Exchange is impossible or impracticable (Dual Currency Note): [ ] (d) Person at whose option any Specified Currency or Currencies is or are to be or may be payable (Dual Currency Note): [ ] 36. Partly Paid Notes: (a) Amount of each Installment [ ]% per [ ] in principal amount (b) Due dates of subsequent installments [ ] (c) Forfeiture date if subsequent installment not paid [ ] (d) Rate of interest to accrue on installment after due date [ ] (e) Other details [ ] 37. Company's Optional Redemption - [Yes/No] if yes, (a) Optional Redemption Date(s) [ ] (b) Optional Redemption Amount(s) and method, if any, of calcu- lation of such amount(s) [ ] (c) If redeemable in part, (i) Minimum Redemption Amount [ ] (ii) Higher Redemption Amount [ ] 38. Redemption at the option of the Noteholders - [Yes/No] if yes, IV-11 (a) Optional Redemption Date(s) [ ] (b) Optional Redemption Amount(s) and/or method, if any, of calculation of such amounts [ ] 39. Early Redemption Amount(s) payable on redemption for taxation reasons or on event of default and/or the method, if any, of calculating the same (if required or if different from that set out in Condition 5(f)): [ ] 40. Talons for future Coupons to be attached to definitive Notes (and dates on which such Talons mature): [Yes/No. If yes, give details] 41. Details of relevant stabilizing manager, if any: [ ] 42. Additional selling restrictions: [ give details] 43. Other terms or special conditions: [ ] 44. The relevant Euroclear and Cedel Common Code and ISIN Numbers: [ ] 45. Details of SICOVAM or any other additional/alternative clearance system approved by the Company and the Agent: [ ] 46. Notes to be listed on the London Stock Exchange, the Paris Bourse or other stock exchange: [Yes (give details)/No] 47. Whether Notes are convertible at option of Company/Holder into Notes of another Interest/Payment Basis, Dates of Conversion or Option Exercise/Interest Payment Basis/other relevant terms [ give details] 48. Whether interests in the Temporary Global Note are exchangeable for interests in the Permanent Global IV-12 Note and/or Definitive Notes and in the case of Definitive Notes, any notice period required: [ ] 49. Method of Distribution [Syndicated/non- syndicated] (a) If syndicated, names of Managers and, if non- syndicated, name of Dealer. [give details] 50. Further Issues: [The Company may from time to time without the consent of the Noteholders create and issue further securities having the same terms and conditions as the Notes so that the same shall be consolidated and form a single series with such Notes and references in these conditions to "Notes" shall be construed accordingly.] 51. Cost, if any, to be borne by Noteholder in connection with exchanges for security printed Definitive Notes: [ ] 52. Purchaser's account number with [Euroclear/Cedel] to which the Notes are to be credited: [ ] 53. In the case of Notes listed on the Paris Bourse: [ ] (a) Number of Notes to be issued in each Specified Denomination: (b) SICOVAM number or, in the case of Partly Paid Notes, SICOVAM numbers, if any: [ ] IV-13 (c) Paying agent in France (if any): [name and address] (d) (i) address in Paris where documents incorporated by reference (or otherwise to be made available for inspection may be inspected): (e) Specialist broker: [address] (f) Responsibility statement for Pricing Supplement, in the required form duly completed to meet listing requirements on the Paris Bourse. [ ] IV-14 ANNEX C ------- FORM OF COMPANY'S CONFIRMATION TO AGENT AND PURCHASERS ------------------------------------------------------ [Date] To: The Chase Manhattan Bank, N.A. Woolgate House Coleman Street P.O. Box 16 London EC2P 2HD Attention: Manager - Corporate Trust Operations] and: [Name of Purchaser] TOYOTA MOTOR CREDIT CORPORATION - EMTN Program ---------------------------------------------- We hereby confirm our telephone instruction to The Chase Manhattan Bank, N.A., as Agent, to prepare, complete, authenticate and issue Temporary Global Notes in accordance with the terms of the Procedures Memorandum relating to the above Program and to give instructions to Euroclear or Cedel as follows: Credit account number [ ] of [name of Purchaser] with [Euroclear/Cedel]* with the following Notes: [Include whichever of the following apply] 1. Series no. and, if not a new Series, the date from which the Tranche being issued is to form a single series with the other Notes comprising the Series: [ ] 2. Specified Currency (or Currencies in the case of Dual Currency Notes): [ ] 3. Aggregate Principal Amount: [ ] 4. Interest/Payment Basis; and if [Fixed Rate / more than one, the dates during Floating Rate / which each Interest/Payment Basis Zero Coupon / will apply: Index Linked / Dual Currency] IV-15 5. Issue Date: [ ] 6. Specified Denomination(s): [ ] 7. Issue Price: [ ] 8. Details relating to Partly Paid Notes; amount of each payment comprising the Issue Price and date on which each payment is to be made: [ ] 9. Interest Commencement Date: [ ] 10. Maturity Date (Fixed Rate, Zero Coupon, Dual Currency and Indexed Notes): [ ] 11. Redemption Month (Floating Rate Note): [month and year] 12. Final Redemption Amount: [ ]% 13. Installment Dates (Installment Note): [ ] 14. Installment Amounts (Installment Note): [ ]% per [ ] in principal amount 15. Fixed Rate of Interest (Fixed Rate Note): [ ]% per annum 16. Fixed Interest Date(s) (Fixed Rate Note): [ ] 17. Initial Broken Amount (Fixed Rate Note): [ ]% per [ ] in principal amount 18. Final Broken Amount (Fixed Rate Note): [ ]% per [ ] in principal amount 19. Applicable "Business Day Convention" (if different from that in Condition 4(a)(i)) (Fixed Rate): [ ] IV-16 20. Applicable definition of "Business Day" (if different from Condition 4(b)(i)): [ ] 21. Other Terms relating to the calculation of Interest (Fixed Rate Note): [ ] 22. Interest Period(s) or Specified Interest Payment Dates (Floating Rate Note): [ ] 23. Manner in which the Rate of Interest is to be determined (Floating Rate Note): [ ] (a) Reset Date(s) (Floating Rate Note): [ ] (b) ISDA Determination - Spread/Margin: [+/-] [ ]% per annum (c) ISDA Determination - Floating Rate Option: [ ] (d) ISDA Determination - Designated Maturity: [ ] (e) Screen Rate Determination - Reference Rate: [ ] (f) Screen Rate Determination - Margin: [+/-] [ ]% per annum (g) Screen Rate Determination - Relevant Page: [ ] 24. Applicable Reference Banks (if different from that in Condition 4(b)(iv)(E)) (Floating Rate Note): [ ] 25. Applicable "Interest Determination Date" definition (if different from that in Condition 4(b)(iv)(F) (Floating Rate Note): [ ] 26. Applicable "Business Day Convention" (if different from IV-17 that in Condition 4(b)(i)) (Floating Rate Note): [ ] 27. Applicable definition of "Business Day" (if different from Condition 4(b)(i)) (Floating Rate Note): [ ] 28. Minimum Rate of Interest (Floating Rate Note): [ ]% per annum 29. Maximum Rate of Interest (Floating Rate Note): [ ]% per annum 30. Agent responsible for determining Rate of Interest (Floating Rate Note): [ ] 31. Accrual Yield (Zero Coupon Note): [ ]% per annum 32. Reference Price (Zero Coupon Note): [ ] 33. Other Formula or Basis for [ give details] determining amount payable under Condition 5(f)(iii) (Zero Coupon Note) 34. Index (Indexed Notes): (a) Formula (Indexed Notes): [ give details] (b) Agent responsible for calculating the principal/interest due (Indexed Notes): [ ] (c) Provisions where calculation by reference to Index and/or Formula is impossible or impracticable: [ ] 35. Dual Currency Note: (a) Rate(s) of Exchange/method of calculating Rate(s) of Exchange (Dual Currency Note): [ give details] IV-18 (b) Agent, if any, responsible for calculating the principal and/or interest payable (Dual Currency Note): [ ] (c) Provisions where calculation by reference to Rate(s) of Exchange is impossible or impracticable (Dual Currency Note): [ ] (d) Person at whose option any Specified Currency or Currencies is or are to be or may be payable (Dual Currency Note): [ ] 36. Partly Paid Notes: (a) Amount of each Installment [ ]% per [ ] in principal amount (b) Due dates of subsequent installments [ ] (c) Forfeiture date if subsequent installment not paid [ ] (d) Rate of interest to accrue on installment after due date [ ] (e) Other details [ ] 37. Company's Optional Redemption - [Yes/No] if yes, (a) Optional Redemption Date(s) [ ] (b) Optional Redemption Amount(s) and method, if any, of calcu- lation of such amount(s) [ ] (c) If redeemable in part, (i) Minimum Redemption Amount [ ] (ii) Higher Redemption Amount [ ] 38. Redemption at the option of the Noteholders - [Yes/No] if yes, IV-19 (a) Optional Redemption Date(s) [ ] (b) Optional Redemption Amount(s) and/or method, if any, of calculation of such amounts [ ] 39. Early Redemption Amount(s) payable on redemption for taxation reasons or on event of default and/or the method, if any, of calculating the same (if required or if different from that set out in Condition 5(f)): [ ] 40. Talons for future Coupons to be attached to definitive Notes (and dates on which such Talons mature): [Yes/No. If yes, give details] 41. Details of relevant stabilizing manager, if any: [ ] 42. Additional selling restrictions: [ give details] 43. Other terms or special conditions: [ ] 44. The relevant Euroclear and Cedel Common Code and ISIN Numbers: [ ] 45. Details of SICOVAM or any other additional/alternative clearance system approved by the Company and the Agent: [ ] 46. Notes to be listed on the London Stock Exchange, the Paris Bourse or other stock exchange: [Yes (give details)/No] 47. Whether Notes are convertible at option of Company/Holder into Notes of another Interest/Payment Basis, Dates of Conversion or Option Exercise/Interest Payment Basis/other relevant terms [ give details] 48. Whether interests in the Temporary Global Note are exchangeable for interests in the Permanent Global IV-20 Note and/or Definitive Notes and in the case of Definitive Notes, any notice period required: [ ] 49. Method of Distribution [Syndicated/non- syndicated] (a) If syndicated, names of Managers and, if non- syndicated, name of Dealer. [give details] 50. Further Issues: [The Company may from time to time without the consent of the Noteholders create and issue further securities having the same terms and conditions as the Notes so that the same shall be consolidated and form a single series with such Notes and references in these conditions to "Notes" shall be construed accordingly.] 51. Cost, if any, to be borne by Noteholder in connection with exchanges for security printed Definitive Notes: [ ] 52. Purchaser's account number with [Euroclear/Cedel] to which the Notes are to be credited: [ ] 53. In the case of Notes listed on the Paris Bourse: [ ] (a) Number of Notes to be issued in each Specified Denomination: (b) SICOVAM number or, in the case of Partly Paid Notes, SICOVAM numbers, if any: [ ] IV-21 (c) Paying agent in France (if any): [name and address] (d) (i) address in Paris where documents incorporated by reference (or otherwise to be made available for inspection may be inspected): (e) Specialist broker: [address] (f) Responsibility statement for Pricing Supplement, in the required form duly completed to meet listing requirements on the Paris Bourse. [ ] IV-22 ANNEX D ------- FORM OF PRICING SUPPLEMENT -------------------------- (to be completed by the Agent) [Date] TOYOTA MOTOR CREDIT CORPORATION - EMTN Program ---------------------------------------------- We are instructed to confirm the following agreement for the issue of Notes: [Include whichever of the following apply] 1. Series no. and, if not a new Series, the date from which the Tranche being issued is to form a single series with the other Notes comprising the Series: [ ] 2. Specified Currency (or Currencies in the case of Dual Currency Notes): [ ] 3. Aggregate Principal Amount: [ ] 4. Interest/Payment Basis; and if [Fixed Rate / more than one, the dates during Floating Rate / which each Interest/Payment Basis Zero Coupon / will apply: Index Linked / Dual Currency] 5. Issue Date: [ ] 6. Specified Denomination(s): [ ] 7. Issue Price: [ ] 8. Details relating to Partly Paid Notes; amount of each payment comprising the Issue Price and date on which each payment is to be made: [ ] 9. Interest Commencement Date: [ ] 10. Maturity Date (Fixed Rate, Zero IV-23 Coupon, Dual Currency and Indexed Notes): [ ] 11. Redemption Month (Floating Rate Note): [month and year] 12. Final Redemption Amount: [ ]% 13. Installment Dates (Installment Note): [ ] 14. Installment Amounts (Installment Note): [ ]% per [ ] in principal amount 15. Fixed Rate of Interest (Fixed Rate Note): [ ]% per annum 16. Fixed Interest Date(s) (Fixed Rate Note): [ ] 17. Initial Broken Amount (Fixed Rate Note): [ ]% per [ ] in principal amount 18. Final Broken Amount (Fixed Rate Note): [ ]% per [ ] in principal amount 19. Applicable "Business Day Convention" (if different from that in Condition 4(a)(i)) (Fixed Rate): [ ] 20. Applicable definition of "Business Day" (if different from Condition 4(b)(i)): [ ] 21. Other Terms relating to the calculation of Interest (Fixed Rate Note): [ ] 22. Interest Period(s) or Specified Interest Payment Dates (Floating Rate Note): [ ] 23. Manner in which the Rate of Interest is to be determined (Floating Rate Note): [ ] (a) Reset Date(s) (Floating Rate IV-24 Note): [ ] (b) ISDA Determination - Spread/Margin: [+/-] [ ]% per annum (c) ISDA Determination - Floating Rate Option: [ ] (d) ISDA Determination - Designated Maturity: [ ] (e) Screen Rate Determination - Reference Rate: [ ] (f) Screen Rate Determination - Margin: [+/-] [ ]% per annum (g) Screen Rate Determination - Relevant Page: [ ] 24. Applicable Reference Banks (if different from that in Condition 4(b)(iv)(E)) (Floating Rate Note): [ ] 25. Applicable "Interest Determination Date" definition (if different from that in Condition 4(b)(iv)(F) (Floating Rate Note): [ ] 26. Applicable "Business Day Convention" (if different from that in Condition 4(b)(i)) (Floating Rate Note): [ ] 27. Applicable definition of "Business Day" (if different from Condition 4(b)(i)) (Floating Rate Note): [ ] 28. Minimum Rate of Interest (Floating Rate Note): [ ]% per annum 29. Maximum Rate of Interest (Floating Rate Note): [ ]% per annum 30. Agent responsible for determining Rate of Interest (Floating Rate Note): [ ] 31. Accrual Yield (Zero Coupon Note): [ ]% per annum IV-25 32. Reference Price (Zero Coupon Note): [ ] 33. Other Formula or Basis for [ give details] determining amount payable under Condition 5(f)(iii) (Zero Coupon Note) 34. Index (Indexed Notes): [ give details ] (a) Formula (Indexed Notes): [ give details ] (b) Agent responsible for calculating the principal/interest due (Indexed Notes): [ ] (c) Provisions where calculation by reference to Index and/or Formula is impossible or impracticable: [ ] 35. Dual Currency Note: (a) Rate(s) of Exchange/method of calculating Rate(s) of Exchange (Dual Currency Note): [ give details ] (b) Agent, if any, responsible for calculating the principal and/or interest payable (Dual Currency Note): [ ] (c) Provisions where calculation by reference to Rate(s) of Exchange is impossible or impracticable (Dual Currency Note): [ ] (d) Person at whose option any Specified Currency or Currencies is or are to be or may be payable (Dual Currency Note): [ ] 36. Partly Paid Notes: (a) Amount of each installment [ ]% per [ ] in IV-26 (b) Due dates of subsequent installments principal amount (c) Forfeiture date if subsequent installment not paid [ ] (d) Rate of interest to accrue on installment after due date [ ] (e) Other details [ ] 37. Company's Optional Redemption - [Yes/No] if yes, (a) Optional Redemption Date(s) [ ] (b) Optional Redemption Amount(s) and method, if any, of calcu- lation of such amount(s) [ ] (c) If redeemable in part, (i) Minimum Redemption Amount [ ] (ii) Higher Redemption Amount [ ] 38. Redemption at the option of the Noteholders - [Yes/No] if yes, (a) Optional Redemption Date(s) [ ] (b) Optional Redemption Amount(s) and/or method, if any, of calculation of such amounts [ ] 39. Early Redemption Amount(s) payable on redemption for taxation reasons or on event of default and/or the method, if any, of calculating the same (if required or if different from that set out in Condition 5(f)): [ ] 40. Talons for future Coupons to be attached to definitive Notes (and dates on which such Talons mature): [Yes/No. If yes, give details] IV-27 41. Details of relevant stabilizing manager, if any: [ ] 42. Additional selling restrictions: [ give details ] 43. Other terms or special conditions: [ ] 44. The relevant Euroclear and Cedel Common Code and ISIN Numbers: [ ] 45. Details of SICOVAM or any other additional/alternative clearance system approved by the Company and the Agent: [ ] 46. Notes to be listed on the London Stock Exchange, the Paris Bourse or other stock exchange: [Yes (give details)/No] 47. Whether Notes are convertible at option of Company/Holder into Notes of another Interest/Payment Basis, Dates of Conversion or Option Exercise/Interest Payment Basis/other relevant terms [ give details ] 48. Whether interests in the Temporary Global Note are exchangeable for interests in the Permanent Global Note and/or Definitive Notes and in the case of Definitive Notes, any notice period required: [ ] 49. Method of Distribution [Syndicated/non- syndicated] (a) If syndicated, names of Managers and, if non- syndicated, name of Dealer. [give details] 50. Further Issues: [The Company may from time to time without the consent of the Noteholders create and issue further securities having the same terms and conditions IV-28 as the Notes so that the same shall be consolidated and form a single series with such Notes and references in these conditions to "Notes" shall be construed accordingly.] 51. Cost, if any, to be borne by Noteholder in connection with exchanges for security printed Definitive Notes: [ ] 52. Purchaser's account number with [Euroclear/Cedel] to which the Notes are to be credited: [ ] 53. In the case of Notes listed on the Paris Bourse: [ ] (a) Number of Notes to be issued in each Specified Denomination: (b) SICOVAM number or, in the case of Partly Paid Notes, SICOVAM numbers, if any: [ ] (c) Paying agent in France (if [name and address] any): (d) (i) address in Paris where documents incorporated by reference (or otherwise to be made available for inspection may be inspected): [address] (e) Specialist broker: (f) Responsibility statement for Pricing Supplement, in the required form duly completed to meet listing requirements on the Paris Bourse. [ ] IV-29 PERSONNES QUI ASSUMENT LA RESPONSABILITE DE LA NOTE D'INFORMATION COMPOSE DE LA PRESENTE NOTE D'OPERATION (PRICING SUPPLEMENT) (DE LA NOTE D'OPERATION AYANT RECU DE LA COB LE VISA NO. . . DU . . .) ET DU DOCUMENT DE BASE (OFFERING CIRCULAR) 1. Au nom de l'emetteur A la connaissance de l'emetteur, les donnees de la presente Note d'Information sont conforme a la realite et ne comportent pas d'omission de nature a en alterer la portee. Aucun element nouveau, (autres que ceux mentionnes dans la presente Note d'Operation), intervenu depuis. le , 1995, date du visa no. appose par la Commission -- -------- --- des Operations de Bourse sur le Document de Base (Prospectus). (le [ ] date du visa no [ ]appose par la Commission des -- Operations de Bourse sur la Note d'Information), n'est susceptible d'affecter de maniere significative la situation financiere de l'emetteur dans le contexte de la presente emission. Toyota Motor Credit Corporation (Name of relevant Dealer/lead manager/other Paris listing agent) - ----------------------------- [Name and title of signatory] 2. Au nom de la banque presentatrice Personne assumant la responsabilite de la Note d'Information, composee du Document de Base, (de la Note d'Information . . .) et de la presente Note d'Operation. - ----------------------------- [Name and title of signatory] (g) a statement that a notice legale in respect of the Prospectus has been published in the Bulletin des Annonces Legales Obligatoires (BALO), specifying the date of such publication and, in addition, a statement in IV-30 French in respect of the Pricing Supplement in the following form: La notice legale sera publiee au Bulletin des Annonces Legales Obligatoires (BALO) du (date). La presente "Note d'Information" ne peut etre distribuee en France avant la date effective de cotation de l'emprunt a la Bourse de Paris et la publicite legale au BALO, and (h) the visa numbers allocated by the COB in respect of the Prospectus and the Pricing Supplement: VISAS DE LA COMMISSION DES OPERATIONS DE BOURSE En vue de la cotation a Paris des obligations, et par application des articles 6 et 7 de l'ordonnance no. 67-833 du 28 septembre 1967, la Commission des Operations de Bourse a enregistre le Document de Base sous le visa no. (*) du (date) et a appose sur la presente "Note d'Information" la visa no. (*) du (date). - ---------------------------------------------------------------- Euroclear and Cedel Common Code: ISIN: [SICOVAM Code (if applicable:] - ---------------------------------------------------------------- The following information is to be included only in the version of the Pricing Supplement which is submitted to the London Stock Exchange in the case of Notes to be listed on such London Stock Exchange: Application is hereby made to list this issue of Notes pursuant to the listing of the U.S. $9,500,000,000 Euro Medium Term Note Program of Toyota Motor Credit Corporation (as from [insert date of or prior to settlement date for the issue of the Notes]). THE CHASE MANHATTAN BANK, N.A. (as Agent) By: ---------------------------- IV-31 ANNEX E ------- TRADING DESK INFORMATION ------------------------ The Company ----------- TOYOTA MOTOR CREDIT CORPORATION 19001 South Western Avenue A105 Torrance, California 90509 Telephone No: (310) 787-6195 Fax No: (310) 787-6194 Attention: National Treasury Manager The Dealers - ----------- BANQUE PARIBAS CS FIRST BOSTON LIMITED 33 Wigmore Street One Cabot Square London W1H OBN London E14 4QJ Telephone: 0171 355 2000 Telephone: 010 516 4021 Telefax: 0171 895 2555 Telefax: 010 516 3719 Telex: 296723 PBRCAP Telex: 892132 CSFB G Attention: Euro Medium Term Note Desk Attention: MTN Trading Desk GOLDMAN SACHS INTERNATIONAL MERRILL LYNCH FINANCE SA Peterborough Court 96, avenue d'Iena 133 Fleet Street 75116 Paris, France London EC4A 2BB Telephone: 0171-774-2295 Telephone: 331-4069 Telefax: 0171-774-5711 Telefax: 605-985 Telex: 94012165 GSHH G Telex: 33149520502 Attention: Euro Medium Term Note Desk Attention: EMTN Trading and Distribution Desk LEHMAN BROTHERS INTERNATIONAL (EUROPE) 1 Broadgate MORGAN STANLEY & CO. London EC2M 7HA LIMITED INTERNATIONAL 25 Cabot Square Telephone: 0171 256 8256 Canary Wharf Telefax: 0171 260 2135 London E14 4QA Telex: 888881 LEHMAN G Telephone: 0171 425-7700 Attention: EMTN Trading Desk Telefax: 0171 425-7994 Telex: 8812564 Attention: Managing Director, MERRILL LYNCH INTERNATIONAL LIMITED Debt Capital Markets Ropemaker Place 25 Ropemaker Street J.P. MORGAN SECURITIES LTD. London EC2Y 9LY 60 Victoria Embankment London EC4Y 0JP Telephone: 0171 867 3995 Telefax: 0171 867 4327 Telephone: 0171 779 3469 Telex: 8811047 MERLYN G Telefax: 0171 325 8255 Attention: EMTN Trading and Telex: 8954804 MGLTD G Distribution Desk Attention: Euro Medium Term Note IV-32 NOMURA INTERNATIONAL plc Nomura House 1, St. Martin's-le-Grand SWISS BANK CORPORATION London EC1A 4NP 1 High Timber Street London EC4V 35B Telephone: 0171 936 2827 Telephone: 0171 711 2479 Telefax: 0171 583 1832 Telefax: 0171 711 2411 Telex: 883119 NOMURA G Telex: 887434 SBCO G Attention: Fixed Income Trading Attention: MTN Group UBS LIMITED 100 Liverpool Street London EC2M 2RH Telephone: 0171 901 4253 Telefax: 0171 901 3795 Telex: 8812800 UBSLTD G Attention: Euro Medium Term Note Desk IV-33 Exhibit V to Amendment No. 1 to the Amended and Restated Agency Agreement APPENDIX E ---------- FORM OF THE NOTES V-1 FORM OF THE NOTES Each Tranche of Notes will initially be represented by one or more temporary global Notes, without receipts, interest coupons or talons, which will be delivered to a common depositary for Euroclear and Cedel. If an interest payment date for any Notes occurs while such Notes are represented by a temporary global Note, the related interest payment will be made against presentation of the temporary global Note only to the extent that certification of non-U.S. beneficial ownership (in the form set out in the temporary global Note) has been received by Euroclear or Cedel. Interests in the temporary global Note will be exchangeable for interests in a permanent global Note and/or for security printed definitive Notes (at the option of TMCC or as otherwise indicated in the applicable Pricing Supplement) not earlier than the date (the "Exchange Date") which is 40 days after the date on which the temporary global Note is issued, provided that certification of non-U.S. beneficial ownership has been received. No interest payments will be made on a temporary global Note after the Exchange Date. Payments of principal or interest (if any) in respect of a permanent global Note will be made through Euroclear and Cedel against presentation or surrender, as the case may be, of the permanent global Note without any requirement for further certification. A permanent global Note will be exchangeable in whole, but not in part, for security printed definitive Notes with, where applicable, receipts, interest coupons and talons attached not earlier than the Exchange Date (i) at the option of TMCC; and (ii) if specified in the applicable Pricing Supplement, at the option of Noteholders. If a portion of the Notes continue to be represented by the temporary global Note after the issuance of definitive Notes, the temporary global Note shall thereafter be exchangeable only for definitive Notes, subject to certification of non-U.S. beneficial ownership. Unless specified in the applicable Pricing Supplement, investors will have no right to require the delivery of definitive Notes, except in certain limited circumstances such as the closure of the relevant clearance systems. If the applicable Pricing Supplement provides investors with the right to require the delivery of definitive Notes, such delivery may be conditioned on written notice, as specified in the applicable Pricing Supplement, from Euroclear or Cedel (as the case may be) acting on instructions of the holders of interest in the temporary or permanent global Note. No definitive Note delivered in exchange for a permanent or temporary global Note shall be mailed or otherwise delivered to any locations in the United States of America in connection with such exchange. Temporary and permanent global Notes and definitive Notes will be issued by The Chase Manhattan Bank, N.A., London Office, as issuing and principal paying agent and, if so specified in the applicable Pricing Supplement, as calculation agent (the "Agent", which expression includes any successor agents or any other calculation agent specified in the applicable Pricing Supplement) pursuant to an Amended and Restated Agency Agreement dated as of July 28, 1994, as amended (the "Agency Agreement"), and made between TMCC, the Agent and the other paying agents named therein (together with the Agent, the "Paying Agents", which expression includes any additional or successor paying agents). Until exchanged in full, the holder of an interest in any global Note shall in all respects be entitled to the same benefits as the holder of definitive Notes, receipts and interest coupons, except as set out in the terms and conditions applicable thereto. V-2 If specified in the applicable Pricing Supplement, other clearance systems (including in the case of Notes listed on the Paris Bourse, Societe Interprofessionnelle pour la Compensation des Valeurs Mobilieres and the Intermediaries financiers habilites authorized to maintain accounts therein (together, "SICOVAM")) capable of complying with the certification requirements set forth in the temporary global Note may be used in addition to or in lieu of Euroclear and Cedel. Temporary and permanent global Notes and definitive Notes will be issued in bearer form only. The following legend will appear on all global Notes, definitive Notes, receipts and interest coupons: "Any United States person (as defined in the Internal Revenue Code of the United States) who holds this obligation will be subject to limitations under the United States income tax laws, including the limitations provided in sections 165(j) and 1287(a) of the Internal Revenue Code." The sections referred to provide that United States holders, with certain exceptions, will not be entitled to deduct any loss on Notes, receipts or interest coupons and will not be entitled to capital gains treatment of any gain on any sale, disposition or payment of principal in respect of Notes, receipts or interest coupons. The Pricing Supplement relating to each Tranche will contain such of the following information as is applicable in respect of such Notes (all references to numbered Conditions being to the Terms and Conditions of the relevant Notes): (i) the Series number; (ii) if not a new Series, the date from which the Tranche of Notes being issued is to form a single series with the other Notes comprising that Series; (iii) the currency (which expression shall include ECU and other currency units) in which the Notes are denominated and, in the case of Dual Currency Notes (as defined below), the currency or currencies in which payment in respect of the Notes is to be made (each a "Specified Currency"); (iv) the aggregate principal amount of the Notes to be issued; (v) the interest and/or payment basis (the "Interest/Payment Basis") of the Notes, which may be one or more of the following: (a) Notes bearing interest on a fixed rate basis ("Fixed Rate Notes"); (b) Notes bearing interest on a floating rate basis ("Floating Rate Notes"); (c) Notes issued on a non-interest bearing basis ("Zero Coupon Notes"); V-3 (d) Notes with respect to which principal and/or interest is calculated by reference to an index and/or a formula ("Indexed Notes"); and/or (e) Notes with respect to which principal and/or interest is payable in one or more Specified Currencies other than the Specified Currency in which they are denominated ("Dual Currency Notes"); (vi) if the Notes are not to have a single specified Interest/Payment Basis continuously from the Issue Date to the stated maturity thereof, the dates from (and including) and to (but excluding) which such Notes will have each specified Interest/Payment Basis; (vii) the date on which the Notes will be issued (the "Issue Date"); (viii) the denomination(s) of such Notes (each a "Specified Denomination"); (ix) the price (generally expressed as a percentage of the principal amount of the Notes) at which the Notes will be issued (the "Issue Price"); (x) in the case of Notes which are to be issued on a partly paid basis ("Partly Paid Notes"), the amount of each installment comprising the Issue Price and the date on which each payment is to be made and the consequences (if any) of failure to make any such payment; (xi) in the case of interest-bearing Notes, the date from which such Notes bear interest (the "Interest Commencement Date"), which may or may not be the Issue Date; (xii) in the case of Notes other than Floating Rate Notes, the date on which such Notes (unless previously redeemed or purchased and cancelled) will be redeemed (the "Maturity Date"); (xiii) in the case of Floating Rate Notes, the month and year in which the Notes (unless previously redeemed or purchased and cancelled) will be redeemed (the "Redemption Month"); (xiv) the amount at which each Note will be redeemed under (xii) and (xiii) above (the "Final Redemption Amount"), generally expressed as a percentage of the principal amount of the Notes and/or, in the case of Indexed Notes or Dual Currency Notes, as specified in accordance with (xix) or (xx) below; (xv) in the case of Notes redeemable in installments: (a) the date on which each installment is payable (each an "Installment Date"); and V-4 (b) the amount, generally expressed as a percentage of the principal amount of the Notes, of each such installment (each an "Installment Amount"); (xvi) in the case of Fixed Rate Notes: (a) the rate, generally expressed as a percentage rate per annum, at which the Notes bear interest (the "Fixed Rate of Interest"), which may remain the same throughout the life of the Notes or increase and/or decrease; (b) the date(s) in each year on which interest is payable throughout the life of the Notes (each a "Fixed Interest Date"); (c) where the period from the Interest Commencement Date to the next Fixed Interest Date differs from the period between subsequent Fixed Interest Dates, the amount of the first payment of interest (the "Initial Broken Amount"); (d) where the Maturity Date is not a Fixed Interest Date, the amount of the final payment of interest (the "Final Broken Amount"); and (e) the applicable Business Day Convention (if different from that set out in Condition 4(a)(i)); (f) the applicable definition of "Business Day" (if different from that set out in Condition 4(b)(i)); (g) any other terms relating to the particular method of calculating interest for such Notes; (xvii) in the case of Floating Rate Notes: (a) the number of months or other period from (and including) the Interest Commencement Date to (but excluding) the first Interest Payment Date (as defined in Condition 4(b)(i)) and from (and including) that and each successive Interest Payment Date thereafter to (but excluding) the next following Interest Payment Date (each an "Interest Period"), which may or may not be the same number of months or other period throughout the life of the Notes; (b) the manner in which the rate of interest (the "Rate of Interest") is to be determined, including: (1) the date(s) on which the interest rate is to be reset (the "Reset Date"); (2) where the Rate of Interest is to be determined by reference to the ISDA Agreement and Confirmation (as defined and described respectively in Condition 4(b)(iii)) and Condition 4(b)(iii) applies, the "Floating Rate Option" (as defined below), "Designated Maturity" (as defined below) and margin (the "Margin") (which Margin may remain the same throughout the life V-5 of the Notes or increase and/or decrease); (3) where the Rate of Interest is to be determined as provided in Condition 4(b)(iv) ("Screen Rate Determination"): (A) the reference rate (the "Reference Rate") by which the Rate of Interest is to be determined; (B) the Margin, if any, (expressed as a percentage rate per annum) over or under the Reference Rate by which the Rate of Interest is to be determined (which Margin may remain the same throughout the life of the Notes or increase and/or decrease) specifying whether any such Margin is to be added to, or subtracted from, the Reference Rate; and (C) the page, whatever its designation, on which the Reference Rate is for the time being displayed on the Reuters Monitor Money Rates Service or the appropriate Associated Press-Dow Jones Telerate Service or such other service as is indicated in the applicable Pricing Supplement; and (4) where the Rate of Interest is to be calculated otherwise than by reference to (1) or (2) above, details of the basis for determination of the Rate of Interest and any alternative fall-back provisions; (c) the applicable definition of "Reference Banks" (if different from that set forth in Condition 4(b)(iv)(E)); and (d) the applicable definition of "Interest Determination Date" (if different from that set out in Condition 4(b)(iv)(F)); (e) the applicable Business Day Convention (if different from that set out in Condition 4(b)(i)); (f) the applicable definition of "Business Day" (if different from that set out in Condition 4(b)(i)); (g) the minimum Rate of Interest, if any, at which the Notes will bear interest, which may remain the same throughout the life of the Notes or increase and/or decrease; (h) the maximum Rate of Interest, if any, at which the Notes will bear interest, which may remain the same throughout the life of the Notes or increase and/or decrease; and (i) if different from the Agent, details of the agent responsible for calculating (xvii)(b) above; (xviii) in the case of Zero Coupon Notes: V-6 (a) the accrual yield in respect of such Notes (the "Accrual Yield") expressed as a percentage rate per annum; (b) the reference price attributed to the Notes on issue (the "Reference Price"); and (c) any other formula or basis for determining the amount payable, in each case for the purposes of Condition 5(f)(iii); (xix) in the case of Indexed Notes: (a) the index (the "Index") to which amounts payable in respect of principal and/or interest are linked and/or the formula (the "Formula") to be used in determining the amounts of principal and/or interest due; (b) the agent responsible for calculating the amount of principal and/or interest due; and (c) the provisions regarding calculation of principal and/or interest in circumstances where such calculation by reference to the Index and/or the Formula is impossible and/or impracticable; (xx) in the case of Dual Currency Notes: (a) the exchange rate(s) or basis of calculating the exchange rate(s) to be used in determining the amounts of principal and/or interest payable in the Specified Currencies (the "Rate(s) of Exchange"); (b) the agent, if any, responsible for calculating the amount of principal and/or interest payable in the Specified Currencies; (c) the provisions regarding calculation of principal and/or interest in circumstances where such calculation by reference to the Rate(s) of Exchange is impossible and/or impracticable; and (d) the person at whose option any Specified Currency or Currencies is or are to be or may be payable; (xxi) in the case of Partly Paid Notes: (a) the amount of each installment (expressed as a percentage of the principal amount of each Note) of the Issue Price for such Notes; (b) the due date(s) for any subsequent installments of the Issue Price; (c) the date (if any) after which a holder shall forfeit any relevant Partly Paid Notes should payment of any subsequent installment(s) not be made on or prior to such date together with accrued interest; V-7 (d) the rate(s) of interest to accrue on the first and any subsequent installment(s) after the due date for payment of such installment(s); and (e) any other relevant information; (xxii) whether the Notes are to be redeemable at the option of TMCC (other than for taxation reasons) and/or the Noteholders and, if so: (a) each date upon which redemption may occur (each an "Optional Redemption Date") which, in the case of Notes denominated in sterling or French Franc Notes, may not be prior to one year and in the case of Notes denominated in DM, may not be prior to two years from the Issue Date; (b) each redemption amount for the Notes (each an "Optional Redemption Amount") and/or the method, if any, of calculating the same; and (c) in the case of Notes redeemable by TMCC in part, the minimum principal amount of the Notes permitted to be so redeemed at any time (the "Minimum Redemption Amount") and any greater principal amount of the Notes permitted to be so redeemed at any time (each a "Higher Redemption Amount"), if any; (xxiii) the redemption amount (the "Early Redemption Amount") with respect to the Notes payable on redemption for taxation reasons or following an Event of Default and/or method, if any, of calculating the same if required to be specified by, or if different from that set out in, Condition 5(f); (xxiv) whether talons for future coupons or receipts are to be attached to definitive Notes on issue and, if so, the date on which such talons mature; (xxv) details of the relevant stabilizing manager (if any); (xxvi) any additional selling restrictions which are required; (xxvii) details of any other relevant terms of such Notes or special conditions not inconsistent with the provisions of the Agency Agreement; (xxviii) the relevant Euroclear and Cedel Common Code and ISIN Number; (xxix) details of any additional or alternative clearance system (including, if applicable, SICOVAM) approved by TMCC and the Agent; (xxx) whether or not the Notes are to be listed on the London Stock Exchange, the Paris Bourse or any other agreed stock exchange; (xxxi) whether the Notes are convertible automatically or at the option of TMCC and/or the holders of Notes into Notes of another Interest/Payment Basis, the date(s) upon which such conversion will occur or such option(s) may be exercised and the Interest/Payment Basis and other relevant terms; V-8 (xxxii) whether the temporary global Note initially representing the Notes will be exchangeable for a permanent global Note and/or definitive Notes and any notice period applicable to an exchange for definitive Notes; (xxxiii) method of distribution: (a) if syndicated, the names of the relevant managers; (b) if non-syndicated, the name of the relevant dealer; (xxxiv) whether TMCC may from time to time without the consent of the Noteholders create and issue further securities having the same terms and conditions as the Notes described in the Pricing Supplement so that the same shall be consolidated and form a single series with such Notes; and (xxxv) in the case of any Notes listed on the Paris Bourse: (a) the number of Notes to be issued in each Specified Denomination; (b) the SICOVAM number or, in the case of Partly Paid Notes, SICOVAM numbers, if any; (c) the name and specified office of any paying agent in France; (d) the address in Paris where any relevant documents will be available for inspection and a list of such documents; (e) the specialist broker in the case of an issue of French Franc Notes; (f) a statement in French signed manually or in facsimile by a person duly authorized on behalf of TMCC and the relevant Purchaser or, in the case of a syndicated issue of Notes, the relevant lead manager accepting responsibility for the information contained in the Pricing Supplement, in the following form: PERSONNES QUI ASSUMENT LA RESPONSABILITE DE LA NOTE D'INFORMATION COMPOSEE DE LA PRESENTE NOTE D'OPERATION (PRICING SUPPLEMENT) (DE LA NOTE D'INFORMATION AYANT RECU DE LA COB LE VISA NO /DU ) -------- --------- ET DU DOCUMENT DE BASE (OFFERING CIRCULAR) V-9 1. Au nom de l'emetteur A la connaissance de l'emetteur, les donnees de la presente Note d'Information sont conformes a la realite et ne comportent pas d'omission de nature a en alterer la portee. Aucun element nouveau, (autres que ceux mentionnes dans la presente Note d'Operation), intervenu depuis: - le 26 Juillet 1995, date du visa no. 95-308 appose par la Commission des Operations de Bourse sur le Document de Base (Prospectus), - (le [ ], date du visa no. [ ] appose par la Commission des Operations de Bourse sur la Note d'Information), n'est susceptible d'affecter de maniere significative la situation financiere de l'emetteur dans le contexte de la presente emission. Toyota Motor Credit Corporation ------------------------------------------------------------- [Name and title of signatory] 2. Au nom de la banque presentatrice Personne assumant la responsabilite de la Note d'Information, composee du Document de Base, et de la presente Note d'Operation. (Name of relevant Dealer/lead manager) ------------------------------------------------------------- [Name and title of signatory] (g) a statement in French in respect of the Pricing Supplement in the following form: La notice legale sera publiee au Bulletin des Annonces Legales Obligatoires (BALO) du (date). La presente "Note d'Information" ne peut etre distribuee en France avant la date effective de cotation de l'emprunt a la Bourse de Paris et la publicite legale au BALO; and (h) the visa numbers allocated by the COB in respect of the Offering Circular and the Pricing Supplement in the following form: VISAS DE LA COMMISSION DES OPERATIONS DE BOURSE En vue de la cotation a Paris des obligations, et par application des articles 6 et 7 de l'ordonnance no. 67-833 du 28 septembre 1967, la Commission des Operations de Bourse a enregistre le Document de Base sous le visa no. 95-308 du 26 Juillet 1995 et a appose sur la presente "Note d'Information" la visa no. ( ) du (date). V-10 If the applicable Pricing Supplement specifies any modifications to the Terms and Conditions of the Notes in relation to a particular issue as described below, it is expected that, to the extent that such modifications (not being significant for the purposes of section 147 of the Financial Services Act 1986) relate only to Conditions 1, 3, 4, 5 (except Condition 5(b)), 6, 14 and 16, they will not necessitate the preparation and issue of a supplementary Offering Circular or listing particulars. If the Terms and conditions of the Notes are to be modified in any other respect (as would be the case, for example, for an issue of subordinated Notes), it is expected that a supplementary Offering Circular or listing particulars or, if appropriate, further listing particulars describing the modifications will be prepared and issued. V-11 EX-10.10(A) 3 AMENDMENT NO. 1 TO THREE-YEAR AGREEMENT EXHIBIT 10.10(a) AMENDMENT NO. 1 TO CREDIT AGREEMENT AMENDMENT dated as of September 28, 1995 among TOYOTA MOTOR CREDIT CORPORATION (the "Borrower"), the BANKS listed on the signature pages hereof (the "Banks") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent"). W I T N E S E T H : WHEREAS, the parties hereto have heretofore entered into a Three- Year Credit Agreement dated as of September 29, 1994 (the "Agreement"); and WHEREAS, the parties hereto desire to amend the Agreement to modify the rates of interest and fees payable thereunder and to extend the term thereof; NOW, THEREFORE, the parties hereto agree as follows: SECTION 1. Definitions; References. Unless otherwise ----------------------- specifically defined herein, each term used herein which is defined in the Agreement shall have the meaning assigned to such term in the Agreement. Each reference to "hereof", "hereunder", "herein" and "hereby" and each other similar reference and each reference to "this Agreement" and each other similar reference contained in the Agreement shall from and after the date hereof refer to the Agreement as amended hereby. SECTION 2. Amendment of the Agreement. -------------------------- (a) Each reference to "1993" in the definition of "Borrower's 1993 Form 10-K" and in Section 4.04(a) is changed to "1994". (b) Each reference to "1994" in the definition of "Borrower's Latest Form 10-Q" and in Sections 4.04(b) and (c) is changed to "1995". (c) The date "September 29, 1997" appearing in the definition of "Termination Date" is changed to "September 29, 2000". (d) The definition of "CD Margin" in Section 2.07(b) is amended to read as follows: "CD Margin" means 0.22% per annum. (e) The term "Euro-Dollar Margin" in Section 2.07(c) is amended to read as follows: "Euro-Dollar Margin" means 0.095% per annum. (f) The first sentence of Section 2.08 is amended to read in its entirety as follows: The Borrower shall pay to the Agent for the account of the Banks ratably a facility fee at the rate of 0.055% per annum. SECTION 3. Governing Law. This Amendment shall be governed by ------------- and construed in accordance with the laws of the State of New York. SECTION 4. Counterparts; Effectiveness. This Amendment may be --------------------------- signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Amendment shall become effective as of the date hereof when the Agent shall have received duly executed counterparts hereof signed by the Borrower and the Banks (or, in the case of any party as to which an executed counterpart shall not have been received, the Agent shall have received telegraphic, telex or other written confirmation from such party of execution of a counterpart hereof by such party). -2- IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written. TOYOTA MOTOR CREDIT CORPORATION By /s/ Wolfgang Jahn -------------------------------- Title: Sr. Vice President & General Manager MORGAN GUARANTY TRUST COMPANY OF NEW YORK By /s/ Kevin J. O'Brien -------------------------------- Title: Vice President BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION By /s/ David A. Rosso -------------------------------- Title: Vice President THE BANK OF TOKYO, LTD. By /s/ Yuji Taniguchi -------------------------------- Title: General Manager THE CHASE MANHATTAN BANK N.A. By /s/ Karl H. Schmidt -------------------------------- Title: Vice President -3- CITICORP USA, INC. By /s/ Mark J. Lyons -------------------------------- Title: Vice President CREDIT SUISSE By /s/ Stephen M. Flynn -------------------------------- Title: Member of Senior Management By /s/ Marilou Palenzuela -------------------------------- Title: Member of Senior Management ABN AMRO BANK N.V. By /s/ John A. Miller -------------------------------- Title: Vice President By /s/ Ellen M. Coleman -------------------------------- Title: Assistant Vice President BANQUE PARIBAS By /s/ Gerald Kokal -------------------------------- Title: Assistant Vice President By /s/ John Cate -------------------------------- Title: Group Vice President -4- BARCLAYS BANK PLC By /s/ Tim Harrington -------------------------------- Title: Associate Director DEUTSCHE BANK AG LOS ANGELES AND/OR CAYMAN ISLANDS BRANCHES By /s/ Ross A. Howard -------------------------------- Title: Vice President By /s/ Lieselotte Stockmann -------------------------------- Title: Assistant Vice President THE LONG-TERM CREDIT BANK OF JAPAN, LTD. By /s/ Sadao Muraoka -------------------------------- Title: Deputy General Manager THE SAKURA BANK, LIMITED LOS ANGELES AGENCY By /s/ Sumio Sano -------------------------------- Title: Senior Vice President & Deputy General Manager -5- THE SANWA BANK, LIMITED By /s/ Koichi Ueno -------------------------------- Title: Assistant Vice President SWISS BANK CORPORATION, NEW YORK BRANCH By /s/ Stephanie W. Kim -------------------------------- Title: Associate Director By /s/ H. Clark Worthley -------------------------------- Title: Associate Director THE TOKAI BANK, LIMITED By /s/ Takashi Kawaguchi -------------------------------- Title: Assistant General Manager UNION BANK OF SWITZERLAND By /s/ James I. Chu -------------------------------- Title: Assistant Vice President By /s/ Thomas G. Jackson -------------------------------- Title: Managing Director -6- MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent By /s/ Kevin J. O'Brien -------------------------------- Title: Vice President -7- EX-10.10(B) 4 AMENDMENT NO. 1 TO 364-DAY AGREEMENT EXHIBIT 10.10(b) AMENDMENT NO. 1 TO CREDIT AGREEMENT AMENDMENT dated as of September 28, 1995 among TOYOTA MOTOR CREDIT CORPORATION (the "Borrower"), the BANKS listed on the signature pages hereof (the "Banks") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent"). W I T N E S E T H : WHEREAS, the parties hereto have heretofore entered into a 364-Day Credit Agreement dated as of September 29, 1994 (the "Agreement"); and WHEREAS, the parties hereto desire to amend the Agreement to modify the rates of interest and fees payable thereunder and to extend the term thereof; NOW, THEREFORE, the parties hereto agree as follows: SECTION 1. Definitions; References. Unless otherwise ----------------------- specifically defined herein, each term used herein which is defined in the Agreement shall have the meaning assigned to such term in the Agreement. Each reference to "hereof", "hereunder", "herein" and "hereby" and each other similar reference and each reference to "this Agreement" and each other similar reference contained in the Agreement shall from and after the date hereof refer to the Agreement as amended hereby. SECTION 2. Amendment of the Agreement. -------------------------- (a) Each reference to "1993" in the definition of "Borrower's 1993 Form 10-K" and in Section 4.04(a) is changed to "1994". (b) Each reference to "1994" in the definition of "Borrower's Latest Form 10-Q" and in Sections 4.04(b) and (c) is changed to "1995". (c) The date "September 28, 1995" appearing in the definition of "Termination Date" is changed to "September 27, 1996". (d) The definition of "CD Margin" in Section 2.07(b) is amended to read as follows: "CD Margin" means 0.235% per annum. (e) The term "Euro-Dollar Margin" in Section 2.07(c) is amended to read as follows: "Euro-Dollar Margin" means 0.11% per annum. (f) The first sentence of Section 2.08 is amended to read in its entirety as follows: The Borrower shall pay to the Agent for the account of the Banks ratably a facility fee at the rate of 0.04% per annum. SECTION 3. Governing Law. This Amendment shall be governed by ------------- and construed in accordance with the laws of the State of New York. SECTION 4. Counterparts; Effectiveness. This Amendment may be --------------------------- signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Amendment shall become effective as of the date hereof when the Agent shall have received duly executed counterparts hereof signed by the Borrower and the Banks (or, in the case of any party as to which an executed counterpart shall not have been received, the Agent shall have received telegraphic, telex or other written confirmation from such party of execution of a counterpart hereof by such party). -2- IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written. TOYOTA MOTOR CREDIT CORPORATION By /s/ Wolfgang Jahn -------------------------------- Title: Senior Vice President & General Manager MORGAN GUARANTY TRUST COMPANY OF NEW YORK By /s/ Kevin J. O'Brien -------------------------------- Title: Vice President BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION By /s/ David A. Rosso -------------------------------- Title: Vice President THE BANK OF TOKYO, LTD. By /s/ Yuji Taniguchi -------------------------------- Title: General Manager THE CHASE MANHATTAN BANK N.A. By /s/ Karl H. Schmidt -------------------------------- Title: Vice President -3- CITICORP USA, INC. By /s/ Mark J. Lyons -------------------------------- Title: Vice President CREDIT SUISSE By /s/ Stephen M. Flynn -------------------------------- Title: Member of Senior Management By /s/ Marilou Palenzuela -------------------------------- Title: Member of Senior Management ABN AMRO BANK N.V. By /s/ John A. Miller -------------------------------- Title: Vice President By /s/ Ellen M. Coleman -------------------------------- Title: Assistant Vice President BANQUE PARIBAS By /s/ Gerald Kokal -------------------------------- Title: Assistant Vice President By /s/ John Cate -------------------------------- Title: Group Vice President -4- BARCLAYS BANK PLC By /s/ Tim Harrington -------------------------------- Title: Associate Director DEUTSCHE BANK AG LOS ANGELES AND/OR CAYMAN ISLANDS BRANCHES By /s/ Ross A. Howard -------------------------------- Title: Vice President By /s/ Lieselotte Stockmann -------------------------------- Title: Assistant Vice President THE LONG-TERM CREDIT BANK OF JAPAN, LTD. By /s/ Sadao Muraoka -------------------------------- Title: Deputy General Manager THE SAKURA BANK, LIMITED LOS ANGELES AGENCY By /s/ Sumio Sano -------------------------------- Title: Senior Vice President & Deputy General Manager THE SANWA BANK, LIMITED By /s/ Koichi Ueno -------------------------------- Title: Assistant Vice President -5- SWISS BANK CORPORATION, NEW YORK BRANCH By /s/ Stephanie W. Kim -------------------------------- Title: Associate Director By /s/ H. Clark Worthley -------------------------------- Title: Associate Director THE TOKAI BANK, LIMITED By /s/ Takashi Kawaguchi -------------------------------- Title: Assistant General Manager UNION BANK OF SWITZERLAND By /s/ James I. Chu -------------------------------- Title: Assistant Vice President By /s/ Thomas G. Jackson -------------------------------- Title: Managing Director MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent By /s/ Kevin J. O'Brien -------------------------------- Title: Vice President -6- EX-12.1 5 RATIO OF EARNINGS TO FIXED CHARGES EXHIBIT 12.1 TOYOTA MOTOR CREDIT CORPORATION CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES
Years Ended September 30, ------------------------------------------ 1995 1994 1993 1992 1991 ------ ---- ---- ---- ---- (Dollars in Millions) Consolidated income before income taxes...... $ 300 $293 $255 $175 $135 ------ ---- ---- ---- ---- Fixed Charges Interest................. 716 486 454 450 390 Portion of rent expense representative of the interest factor (deemed to be one-third)....... 2 3 3 2 2 ------ ---- ---- ---- ---- Total fixed charges......... 718 489 457 452 392 ------ ---- ---- ---- ---- Earnings available for fixed charges........ $1,018 $782 $712 $627 $527 ====== ==== ==== ==== ==== Ratio of earnings to fixed charges........ 1.42 1.60 1.56 1.39 1.34 ==== ==== ==== ==== ==== - ----------------- In March 1987, TMCC guaranteed payments of principal and interest on $58 million principal amount of bonds issued in connection with the Kentucky manufacturing facility of an affiliate. As of September 30, 1995, TMCC has not incurred any fixed charges in connection with such guarantee and no amount is included in any ratio of earnings to fixed charges. The ratio of earnings to fixed charges for TMS and subsidiaries was 1.74, 1.90, 2.07, 1.83 and 2.54 for the years ended September 30, 1995, 1994, 1993, 1992 and 1991, respectively.
EX-21.1 6 LIST OF SUBSIDIARIES EXHIBIT 21.1 TOYOTA MOTOR CREDIT CORPORATION LIST OF SUBSIDIARIES State of Subsidiary Incorporation - ---------- ------------- Toyota Motor Insurance Services, Inc. California Toyota Motor Insurance Agency of Ohio, Inc. Ohio Toyota Motor Insurance Services of Kentucky, Inc. Kentucky Toyota Motor Insurance Services of Rhode Island, Inc. Rhode Island Toyota Motor Insurance Services of Wyoming, Inc. Wyoming Toyota Motor Insurance Corporation of Vermont Vermont Toyota Motor Insurance Company Iowa Toyota Motor Life Insurance Company Iowa Toyota Motor Credit Receivables Corporation California EX-23.1 7 CONSENT OF INDEPENDENT ACCOUNTANTS EXHIBIT 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS ---------------------------------- We hereby consent to the incorporation by reference in the Prospectus constituting part of the Registration Statement on Form S-3 (No. 33-52359) of Toyota Motor Credit Corporation of our report dated October 31, 1995 appearing on page 21 of this Form 10-K. /S/ PRICE WATERHOUSE LLP Los Angeles, California December 22, 1995 EX-27.1 8 SEPTEMBER 30, 1995 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM TOYOTA MOTOR CREDIT CORPORATION'S SEPTEMBER 30, 1995 FINANCIAL STATEMENTS AND NOTES THERETO AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000,000 YEAR SEP-30-1995 SEP-30-1995 108 169 15,460 171 0 0 0 0 16,138 0 12,696 0 0 865 844 16,138 0 2,564 0 1,948 258 58 0 300 117 183 0 0 0 183 0 0 Receivables include Investments in Operating Leases net of Accumulated Depreciation and Finance Receivables net of Unearned Income. Toyota Motor Credit Corporation's Balance Sheet is not classified into Current and Long-Term Assets and Liabilities. Total Costs include Interest Expense and Depreciation on Operating Leases.
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