TIDMTYT

RNS Number : 3063H

Toyota Motor Corporation

24 March 2020

[Reference Translation]

March 24, 2020

To Whom It May Concern

 
 Company Name:       Toyota Motor Corporation 
 Name and Title of   Akio Toyoda, President 
  Representative: 
 (Code Number: 7203 First Section of Tokyo 
  Stock Exchange and Nagoya Stock Exchange) 
 Name and Title of   Kaname Shimizu, 
  Contact Person:     General Manager, 
                      Accounting Division 
 (Telephone Number: 0565-28-2121) 
 

Notice Concerning Disposition of Treasury Stock by Way of Third-party Allotment

In relation to the execution of the memorandum of understanding concerning the business and capital alliance (the "Alliance") with NTT Corporation ("NTT"), Toyota Motor Corporation ("Toyota") resolved at a meeting of the board of directors held on March 24, 2020 the terms of the disposition of treasury stock (the "Disposition of Treasury Stock") by way of third-party allotment to NTT as follows.

1. Outline of disposition

 
 (1)   Date of disposition   April 9 , 2020 
 (2)   Number of             29,730,900 shares of common stock 
        shares to 
        be disposed 
----  --------------------  -------------------------------------------------- 
 (3)   Disposition           JPY 6,727 per share 
        price 
----  --------------------  -------------------------------------------------- 
 (4)   Total disposition     JPY 199,999,764,300 
        price 
----  --------------------  -------------------------------------------------- 
 (5)   Method of             All of the shares will be allotted to NTT 
        disposition           by way of third-party allotment. 
        or allotment 
        (proposed 
        subscriber) 
----  --------------------  -------------------------------------------------- 
 (6)   Other                 The items above are conditioned on the securities 
                              registration statement to be filed pursuant 
                              to the Financial Instruments and Exchange 
                              Act becoming effective. 
----  --------------------  -------------------------------------------------- 
 

2. Purpose and reason for disposition

Toyota and NTT believe that the business alliance will help improve their corporate value and determined that they need a capital alliance in the form of cross shareholdings to develop and strengthen their long-term partnership (For details, see the release "Notice of Execution of Memorandum of Understanding Concerning a Business and Capital Alliance between NTT Corporation and Toyota Motor Corporation" jointly disclosed by Toyota and NTT today).

The Disposition of Treasury Stock will be carried out as part of the Alliance. Specifically, Toyota will dispose of shares of treasury stock by way of a third-party allotment, through which NTT will acquire 29,730,900 shares of Toyota common stock (0.90% (rounding to two decimal place, hereinafter the same in this paragraph) of the total issued shares, totaling 200 billion yen (rounding to one hundred million yen hereinafter the same in this paragraph). At the same time, NTT will dispose of shares of treasury stock by way of a third-party allotment, through which Toyota will acquire 80,775,400 shares of common stock of NTT (2.07% of the total issued shares, totaling 200 billion yen).

3. Amount of proceeds, use of proceeds and expected timing thereof

(1) Amount of proceeds

(unit: yen)

 
       Total amount to be 
 (1)    paid in                      199,999,764,300 
       Estimated amount 
        of expenses relating 
 (2)    to the issuance                   10,000,000 
----  -----------------------  --------------------- 
 (3)   Estimated net proceeds        199,989,764,300 
----  -----------------------  --------------------- 
 

(Note) 1. Estimated amount of expenses relating to the issuance does not include consumption tax, etc.

                  2.     Estimated amount of expenses relating to the issuance is expected to consist mainly of costs for preparing a securities registration statement and other documents. 

(2) Specific use of proceeds

As stated in the "Notice of Execution of Memorandum of Understanding Concerning a Business and Capital Alliance between NTT Corporation and Toyota Motor Corporation," the proceeds from the Disposition of Treasury Stock will be appropriated for the research and development, planning, design, construction and implementation of the "Smart City Platform" under the Alliance; taking a lead in the operations of the Smart City Platform jointly by Toyota and NTT; and jointly promoting the operation of smart cities, which continue to evolve in accordance with the needs of residents. Specifically, Toyota intends to use JPY 50 billion for the redevelopment project for the Higashi-Fuji Area in Susono City, Shizuoka Prefecture (Woven City), which is scheduled to start in the fiscal year ended March 2022 as a model case for smart city and then the redevelopment project for the Shinagawa Area in Minato-ku, Tokyo (a part of the NTT block in front of Shinagawa Station). Toyota also intends to use the remaining amount by around the mid-2030s for the subsequent and sequential redevelopment projects and the general research and development related to the Smart City Platform that will support such projects. Toyota will keep the proceeds in its bank account, etc. until Toyota actually uses such proceeds.

4. Reasonableness of use of proceeds

Toyota believes that using the proceeds from the Disposition of Treasury Stock for the use described in "3. Amount of proceeds, use of proceeds and expected timing thereof - (2) Specific use of proceeds" above will enable Toyota to proceed with the construction and operations of the "Smart City Platform" jointly with NTT and it will help improve the corporate value of Toyota. Toyota therefore believes that the use of the proceeds from the Disposition of Treasury Stock is reasonable.

5. Reasonableness of terms of disposition, etc.

(1) Basis of calculation of the amount to be paid in and specific details of the amount

The disposition price per share has been fixed at 6,727 yen (rounding to the nearest whole yen, hereinafter the same in this paragraph), which is the simple average of the closing prices of shares of Toyota's common stock on the Tokyo Stock Exchange, Inc. ("TSE") for the one-month period (February 25, 2020 through March 23, 2020) ending on the business day immediately prior to the date of resolution by the board of directors on the Disposition of Treasury Stock.

The reason Toyota has selected the average closing price of Toyota's common stock for the most recent one month is that Toyota believes (i) that using a leveled value, namely the average share price over a specified recent period, rather than using a share price at a certain point of time, enables it to eliminate temporary share price fluctuations and other special factors and (ii) that, given the recent substantial downward trend in the stock market since late February 2020 in the face of concern over the spread of the new coronavirus infectious disease etc., and that Toyota's stock price shows similar movement, the selection of the average closing price for the most recent one month, which accurately reflects such stock price trend compared with that for the most recent two or six months, is more appropriate.

The disposition price is also in compliance with the "Guidelines Concerning Treatment of Capital Increase by Allotment to a Third Party" issued by Japan Securities Dealers Association (JSDA). The disposition price represents a premium of 8.25% (rounding to two decimal place, hereinafter the same in this paragraph) to 6,172 yen, the closing price of common stock of Toyota on the TSE as of March 23, 2020, the business day immediately prior to the date of resolution by the board of directors on the Disposition of Treasury Stock, a discount of 9.89% to 7,392 yen, the average closing price for the three-month period through the business day immediately preceding such resolution date, and a discount of 11.25% to 7,484 yen, the average closing price for the six-month period through the business day immediately preceding such resolution date.

In addition, all of the six audit & supervisory board members (including three outside members of the audit & supervisory board), who attended the meeting of the board of directors at which the Disposition of Treasury Stock was resolved, have expressed that the grounds for the calculation of the disposition price is reasonable, is in compliance with the "Guidelines Concerning Treatment of Capital Increase by Allotment to a Third Party" issued by the JSDA, does not constitute a favorable issuance, and is therefore lawful.

(2) Basis of decision that the number of shares to be disposed and extent of dilution of shares is reasonable

The number of shares subject to the Disposition of Treasury Stock is 29,730,900 shares (297,309 voting rights) and the aggregate number of shares subject to the Disposition of Treasury Stock and the disposition of treasury stock by way of third-party allotment to Toyota Housing Corporation, as stated in "10. Results of operations and status of equity finance for the last three years - (4) Status of equity finance over the last three years - (ii) Disposition of treasury stock by way of third-party allotment" below is 33,000,400 shares (330,004 voting rights) (the number of shares subject to the disposition of treasury stock by way of third-party allotment to Toyota Housing Corporation was 3,269,500 shares ( 32,695 voting rights)), which is equivalent to 1.00% of the total number of issued shares of Toyota ( 3,310,097,492 shares) as of December 31, 2019 (1.17% (rounding to two decimal place) of the 28,272,309 total voting rights as of September 30, 2019). Accordingly, the Disposition of Treasury Stock will cause a certain degree of dilution.

However, since the Disposition of Treasury Stock will be carried out as part of the Alliance, Toyota believes that the Disposition of Treasury Stock will help improve its corporate value and that the number of shares to be disposed of and the extent of share dilution are reasonable.

6. Reason and related information for selection of proposed subscriber

(1) Outline of proposed subscriber

(As of December 31, 2019)

 
 (1)      Name                      Nippon Telegraph and Telephone Corporation 
 (2)      Address                   5-1, Otemachi 1-chome, Chiyoda-ku, Tokyo, 
                                     Japan 
-------  ------------------------  -------------------------------------------------------------------- 
 (3)      Name and title            Jun Sawada, President & CEO 
           of representative 
-------  ------------------------  -------------------------------------------------------------------- 
 (4)      Description of            Determination of management strategy of 
           business                  NTT Group and promotion of basic research 
                                     and development 
-------  ------------------------  -------------------------------------------------------------------- 
 (5)      Stated capital            JPY 937,950 million 
-------  ------------------------  -------------------------------------------------------------------- 
 (6)      Date of establishment     April 1, 1985 
-------  ------------------------  -------------------------------------------------------------------- 
 (7)      Number of shares          3,900,788,940 shares 
           issued and outstanding 
           (As of February 
           7, 2020) 
-------  ------------------------  -------------------------------------------------------------------- 
 (8)      Fiscal year-end           March 31 
-------  ------------------------  -------------------------------------------------------------------- 
 (9)      Number of employees       303,351 (on a consolidated basis) 
           (As of March 
           31, 2019) 
-------  ------------------------  -------------------------------------------------------------------- 
 (10)     Main business             - 
           partners 
-------  ------------------------  -------------------------------------------------------------------- 
 (11)     Main banks                - 
-------  ------------------------  -------------------------------------------------------------------- 
          Major shareholders 
           and shareholding 
 (12)      ratio                    The Minister of Finance                                      34.69% 
-------  ------------------------ 
                                    The Master Trust Bank of Japan, 
                                     Ltd. (Trust Account)                                         4.82% 
    ---  ------------------------ 
                                    Japan Trustee Service Bank, Ltd. 
                                     (Trust Account)                                              4.17% 
                                    Japan Trustee Services Bank, Ltd. 
                                     (Trust account 9)                                            1.57% 
                                    Japan Trustee Services Bank, Ltd. 
                                     (Trust account 5)                                            1.46% 
                                    JP Morgan Chase Bank 385632 
                                     (standing proxy: Mizuho Bank, Ltd.)                          1.11% 
                                    Japan Trustee Services Bank, Ltd. 
                                     (Trust account 7)                                            1.02% 
                                    Moxley & Co. LLC 
                                     (standing proxy: MUFG Bank, Ltd.)                            0.99% 
                                    Japan Trustee Services Bank, Ltd. 
                                     (Trust account 1)                                            0.96% 
                                    JP Morgan Chase Bank 380055 
                                     (standing proxy: Mizuho Bank, Ltd.)                          0.90% 
    ---  ------------------------  -----------------------------------------------------  ------------- 
 (13)     Relationship between        Capital relationship     Not applicable 
           the parties 
-------  ------------------------  -------------------------  ----------------------------------------- 
                                     Personnel relationship    Not applicable 
    ---  ------------------------  -------------------------  ----------------------------------------- 
                                     Business relationship     Toyota has an alliance with 
                                                                NTT in order to develop, 
                                                                verify and standardize technologies 
                                                                in the field of connected 
                                                                cars. 
                                   -------------------------  ----------------------------------------- 
                                         Applicability         Not applicable 
                                        as related party 
    ---  ------------------------  -------------------------  ----------------------------------------- 
 (14)     Consolidated operating results and financial condition for 
           the last three years (International Financial Reporting 
           Standards) (unit: millions of yen, except as noted otherwise) 
-------  ---------------------------------------------------------------------------------------------- 
           Fiscal year                  Fiscal year          Fiscal year          Fiscal year ended 
                                           ended                 ended                March 2019 
                                         March 2017           March 2018 
                                   --------------------  -------------------  ------------------------- 
     Shareholders' equity                             -            9,050,358                  9,264,913 
    -----------------------------  --------------------  -------------------  ------------------------- 
     Total assets                                     -           21,541,444                 22,295,146 
    -----------------------------  --------------------  -------------------  ------------------------- 
     Shareholders' equity 
      per share (in yen)                              -             4,591.58                   4,832.03 
    -----------------------------  --------------------  -------------------  ------------------------- 
     Operating revenues                               -           11,782,148                 11,879,842 
    -----------------------------  --------------------  -------------------  ------------------------- 
     Operating profit                                 -            1,641,086                  1,693,833 
    -----------------------------  --------------------  -------------------  ------------------------- 
     Profit before taxes                              -            1,740,479                  1,671,861 
    -----------------------------  --------------------  -------------------  ------------------------- 
     Profit attributable 
      to NTT                                          -              897,887                    854,561 
    -----------------------------  --------------------  -------------------  ------------------------- 
     Basic earnings per 
      share attributable 
      to NTT (in yen)                                 -               449.86                     440.25 
    -----------------------------  --------------------  -------------------  ------------------------- 
     Dividends per share 
      (in yen)                                   120.00               150.00                     180.00 
    -----------------------------  --------------------  -------------------  ------------------------- 
          Consolidated operating results and financial condition for 
           the last three years (U.S. GAAP) (unit: millions of yen, 
           except as noted otherwise) 
-------  ---------------------------------------------------------------------------------------------- 
           Fiscal year                  Fiscal year          Fiscal year          Fiscal year ended 
                                           ended                 ended                March 2019 
                                         March 2017           March 2018 
                                   --------------------  -------------------  ------------------------- 
     Shareholders' equity                     9,052,479            9,485,981                          - 
    -----------------------------  --------------------  -------------------  ------------------------- 
     Total assets                            21,250,325           21,675,770                          - 
    -----------------------------  --------------------  -------------------  ------------------------- 
     Shareholders' equity 
      per share (in yen)                       4,491.73             4,812.59                          - 
    -----------------------------  --------------------  -------------------  ------------------------- 
     Operating revenues                      11,391,016           11,799,587                          - 
    -----------------------------  --------------------  -------------------  ------------------------- 
     Operating profit                         1,539,789            1,642,843                          - 
    -----------------------------  --------------------  -------------------  ------------------------- 
     Income before income 
      taxes and equity 
      in earnings (losses) 
      of affiliated companies                 1,527,769            1,755,624                          - 
    -----------------------------  --------------------  -------------------  ------------------------- 
     Net income attributable 
      to NTT                                    800,129              909,695                          - 
    -----------------------------  --------------------  -------------------  ------------------------- 
     Basic earnings per 
      share 
      attributable to NTT 
      (in yen)                                   390.94               455.78                          - 
    -----------------------------  --------------------  -------------------  ------------------------- 
     Dividends per share 
      (in yen)                                   120.00               150.00                     180.00 
    -----------------------------  --------------------  -------------------  ------------------------- 
 
 

(Note) NTT, the proposed subscriber, is listed on the TSE and submitted the Corporate Governance Report to the TSE on June 26, 2019. Toyota has confirmed NTT's basic views on eliminating anti-social forces and the preparation toward such elimination in the section of the Report dealing with matters related to the internal control system. Based on the confirmation, Toyota has concluded that NTT and its officers have no connection with anti-social forces.

(Note) NTT, the proposed subscriber, adopted generally accepted accounting principles in the U.S. (the "U.S. GAAP") until the fiscal year ended March 2018 and applied the International Financial Reporting Standards (the "IFRS") from the fiscal year ended March 2019. NTT prepared its consolidated financial statements for the fiscal year ended March 2018 in accordance with the IFRS as well as the U.S. GAAP.

(2) Reason for selecting the proposed subscriber

See "2. Purpose and reason for disposition" above.

(3) Proposed subscriber's shareholding policy

Toyota has orally confirmed with NTT that NTT intends to hold over the long term the common stock of Toyota that it will acquire through the Disposition of Treasury Stock.

Toyota plans to obtain a written acknowledgement from NTT that (i) if all or some of the disposed shares are transferred within two years after the date of payment, the names and addresses of the transferees, number of shares transferred, date of transfer, transfer price, reason for transfer and method of transfer, etc. will be immediately reported to Toyota in writing, (ii) Toyota will report the details of such report to the TSE and (iii) the details of such report will be made publicly available.

(4) Details regarding existence of assets necessary for the payment by the proposed subscriber

Toyota has confirmed that NTT, as the proposed subscriber to the shares being disposed, has necessary cash and deposits for the payment pertaining to the Disposition of Treasury Stock, based on the status of cash and deposits set forth in the balance sheet and other financial conditions disclosed in NTT's quarterly report for the third quarter of the 35th fiscal year (filed on February 7, 2020).

7. Major shareholders and shareholding ratio after the disposition

 
      Before the disposition (as of                  After the disposition 
            September 30, 2019) 
 Japan Trustee Services                     Japan Trustee Services 
  Bank, Ltd.                       11.38%    Bank, Ltd.                      11.38% 
--------------------------------  -------  -------------------------------  ------- 
 Toyota Industries Corporation      7.20%   Toyota Industries Corporation     7.20% 
--------------------------------  -------  -------------------------------  ------- 
 The Master Trust Bank                      The Master Trust Bank of 
  of Japan, Ltd.                    5.73%    Japan, Ltd.                      5.73% 
--------------------------------  -------  -------------------------------  ------- 
 Nippon Life Insurance 
  Company                           3.36%   Nippon Life Insurance Company     3.36% 
--------------------------------  -------  -------------------------------  ------- 
 JPMorgan Chase Bank, N.A.                  JPMorgan Chase Bank, N.A. 
  (Standing proxy: Settlement                (Standing proxy: Settlement 
  & Clearing Services Division,              & Clearing Services Division, 
  Mizuho Bank, Ltd.)                3.20%    Mizuho Bank, Ltd.)               3.20% 
--------------------------------  -------  -------------------------------  ------- 
 DENSO CORPORATION                  2.72%   DENSO CORPORATION                 2.72% 
--------------------------------  -------  -------------------------------  ------- 
 State Street Bank & Trust                  State Street Bank & Trust 
  Company                                    Company 
  (Standing proxy: Settlement                (Standing proxy: Settlement 
  & Clearing Services Division,              & Clearing Services Division, 
  Mizuho Bank, Ltd.)                2.47%    Mizuho Bank, Ltd.)               2.47% 
--------------------------------  -------  -------------------------------  ------- 
 Trust & Custody Services                   Trust & Custody Services 
  Bank, Ltd.                        1.73%    Bank, Ltd.                       1.73% 
--------------------------------  -------  -------------------------------  ------- 
 Mitsui Sumitomo Insurance                  Mitsui Sumitomo Insurance 
  Co., Ltd.                         1.72%    Co., Ltd.                        1.72% 
--------------------------------  -------  -------------------------------  ------- 
 Tokio Marine & Nichido                     Tokio Marine & Nichido 
  Fire Insurance Co., Ltd.          1.54%    Fire Insurance Co., Ltd.         1.54% 
--------------------------------  -------  -------------------------------  ------- 
 

(Note) The major shareholders are based on the shareholders' register as of September 30, 2019, and the shareholding ratio represents the ratio to the total number of issued shares.

8. Future prospect

Toyota expects that the Disposition of Treasury Stock will not have a material impact on its consolidated accounts for the foreseeable future.

9. Matters related to the procedures under the corporate code of conduct

Since (1) the dilution ratio is less than 25% and (2) there is no change to a controlling shareholder (even if all of the stock acquisition rights and put options are exercised, no change to a controlling shareholder is expected), there is no need to obtain an opinion from an independent third party, or to follow the procedures for confirming the intent of shareholders, pursuant to Article 432 of the Securities Listing Regulations established by the TSE.

10. Results of operations and status of equity finance for the last three years

(1) Results of operations for the last three years (consolidated)

(unit: millions of yen, except as noted otherwise)

 
                             Fiscal year ended     Fiscal year ended     Fiscal year ended 
                                 March 2017            March 2018            March 2019 
 Net revenues                        27,597,193            29,379,510            30,225,681 
                           --------------------  --------------------  -------------------- 
 Income before income 
  taxes and equity 
  in earnings of 
  affiliated companies                2,193,825             2,620,429             2,285,465 
                           --------------------  --------------------  -------------------- 
 Net income attributable 
  to Toyota                           1,831,109             2,493,983             1,882,873 
                           --------------------  --------------------  -------------------- 
 Basic Net income 
  attributable to 
  Toyota per shares 
  of common stock 
  (in yen)                               605.47                842.00                650.55 
                           --------------------  --------------------  -------------------- 
 Dividends per share            Shares of             Shares of             Shares of 
  (in yen)                   Common Stock   210    Common Stock   220    Common Stock   220 
                             First Series          First Series          First Series 
                                 Model AA              Model AA              Model AA 
                              Class Share   105     Class Share   158     Class Share   211 
                           --------------  ----  --------------  ----  --------------  ---- 
 Shareholders' equity 
  per share (in yen)                   5,887.88              6,438.65              6,830.92 
                           --------------------  --------------------  -------------------- 
 

(Note 1) "Ordinary income" is omitted because its corresponding item does not exist in the U.S. GAAP, according to which the consolidated financial results of Toyota are prepared.

(Note 2) "Shareholders' equity per share" is stated because an item corresponding to "consolidated net assets per share" does not exist in the U.S. GAAP, according to which the consolidated financial results of Toyota are prepared.

(Note 3) "Dividends per share" refers to dividends pertaining to shares of common stock and dividends pertaining to f irst series model AA class shares .

(2) Number of issued shares and number of dilutive shares at present (as of December 31, 2019)

 
                                   Number of shares (shares)       Ratio to the issued 
                                                                        shares (%) 
                                Shares of 
 Number of issued shares         Common Stock:    3,262,997,492                    100.0 
                                                                 ----------------------- 
  Model AA 
   Class Shares:                                     47,100,000 
                                                                 ----------------------- 
  Total:                                          3,310,097,492 
 ----------------------------------------------  --------------  ----------------------- 
 Number of dilutive                            -                            - 
  shares based on the 
  conversion price (exercise 
  price) at present 
                               --------------------------------  ----------------------- 
 Number of dilutive                            -                            - 
  shares based on the 
  minimum conversion 
  price (exercise price) 
                               --------------------------------  ----------------------- 
 Number of dilutive                            -                            - 
  shares based on the 
  maximum conversion 
  price (exercise price) 
                               --------------------------------  ----------------------- 
 

(3) Recent share price

(i) Status over the last 3 years

(unit: yen)

 
                  Fiscal year ended   Fiscal year ended   Fiscal year ended 
                      March 2017          March 2018          March 2019 
 Opening price                5,930               6,087               6,833 
                 ------------------  ------------------  ------------------ 
   High price                 7,215               7,806               7,686 
                 ------------------  ------------------  ------------------ 
   Low price                  4,917               5,670               6,045 
                 ------------------  ------------------  ------------------ 
 Closing price                6,042               6,825               6,487 
                 ------------------  ------------------  ------------------ 
 

(Note) The share prices are based on the price on the first section of the TSE.

(ii) Status over the last six-months

(unit: yen)

 
                    2019     November   December     2020     February    March 
                   October                          January               (Note) 
 Opening price       7,245      7,460      7,701      7,599      7,557     6,941 
                 ---------  ---------  ---------  ---------  ---------  -------- 
   High price        7,554      7,949      7,854      7,894      8,026     7,348 
                 ---------  ---------  ---------  ---------  ---------  -------- 
   Low price         6,951      7,458      7,626      7,530      7,004     5,771 
                 ---------  ---------  ---------  ---------  ---------  -------- 
 Closing price       7,542      7,638      7,714      7,652      7,127     6,172 
                 ---------  ---------  ---------  ---------  ---------  -------- 
 

(Note) The share prices for March 2020 are those until March 23, 2020.

(iii) Share price as of the business day immediately before the date of resolution of the Disposition of Treasury Stock

(unit: yen)

 
                  March 23, 2020 
 Opening price             6,195 
                 --------------- 
   High price              6,279 
                 --------------- 
   Low price               6,139 
                 --------------- 
 Closing price             6,172 
                 --------------- 
 

(4) Status of equity finance over the last three years

(i) Disposition of treasury stock by way of third-party allotment

 
 Date of disposition        October 2, 2017 
 Amount of proceeds         JPY 49,999,305,700 (estimated net proceeds) 
                           -------------------------------------------------- 
 Disposition price          JPY 6,029 per share 
                           -------------------------------------------------- 
 Number of issued shares    Shares of Common Stock 3,262,997,492 shares 
  at the time of the         Model AA Class Shares 47,100,000 share 
  disposition                Total 3,310,097,492 shares 
                           -------------------------------------------------- 
 Number of disposed         Shares of Common Stock 8,293,300 shares 
  shares 
                           -------------------------------------------------- 
 Number of issued shares    Shares of Common Stock 3,262,997,492 shares 
  after the disposition      Model AA Class Shares 47,100,000 share 
                             Total 3,310,097,492 shares 
                           -------------------------------------------------- 
 Subscriber                 Mazda Motor Corporation 
                           -------------------------------------------------- 
 Initial use of proceeds    The amount of proceeds was applied towards 
  at the time of the         the capital expenditures relating to the 
  disposition                establishment of a joint venture company 
                             to produce finished cars in the U.S. 
                           -------------------------------------------------- 
 Expected timing of         Fiscal year ended March 2018 through fiscal 
  expenditure at the         year ending March 2021 (scheduled) 
  time of the disposition 
                           -------------------------------------------------- 
 Current application        A portion of the proceeds has been applied 
  status                     as initially planned. The remaining amount 
                             is scheduled to be applied by the above-expected 
                             timing of expenditure for the above use 
                             of proceeds. 
                           -------------------------------------------------- 
 

(ii) Disposition of treasury stock by way of third-party allotment

 
 Date of disposition        November 29, 2019 
 Amount of proceeds         JPY 24,180,222,000 (estimated net proceeds) 
                           ------------------------------------------------- 
 Disposition price          JPY 7,396 per share 
                           ------------------------------------------------- 
 Number of issued shares    Shares of Common Stock 3,262,997,492 shares 
  at the time of the         Model AA Class Shares 47,100,000 share 
  disposition                Total 3,310,097,492 shares 
                           ------------------------------------------------- 
 Number of disposed         Shares of Common Stock 3,269,500 shares 
  shares 
                           ------------------------------------------------- 
 Number of issued shares    Shares of Common Stock 3,262,997,492 shares 
  after the disposition      Model AA Class Shares 47,100,000 share 
                             Total 3,310,097,492 shares 
                           ------------------------------------------------- 
 Subscriber                 Toyota Housing Corporation 
                           ------------------------------------------------- 
 Initial use of proceeds    In connection with the share exchange where 
  at the time of the         Toyota Housing Corporation became the wholly 
  disposition                owning parent company as a result thereof 
                             and Misawa Homes Co., Ltd., which was its 
                             then consolidated subsidiary, became the 
                             wholly owned subsidiary as a result thereof 
                             and where the consideration in the share 
                             exchange consisted of shares of Toyota's 
                             common stock, the disposition of treasury 
                             stock was conducted in order for such wholly 
                             owning parent company to acquire the necessary 
                             consideration for the share exchange not 
                             for the financing purposes of Toyota. The 
                             above-described amount of 24,180,222,000 
                             yen in estimated net proceeds was used to 
                             cover a part of the cash reserve that decreased 
                             with the payment for the shares of common 
                             stock issued and disposed by way of third-party 
                             allotment, which was conducted by Toyota 
                             Housing Corporation towards Toyota as the 
                             allottee. 
                           ------------------------------------------------- 
 Expected timing of         November 29, 2019 
  expenditure at the 
  time of the disposition 
                           ------------------------------------------------- 
 Current application        The proceeds have been applied as initially 
  status                     planned. 
                           ------------------------------------------------- 
 

11. Summary of disposition

 
 (1)   Class and number of shares    29,730,900 shares of common stock 
 (2)   Disposition price             JPY 6,727 per share 
 (3)   Total disposition price       JPY 199,999,764,300 
 (4)   Method of disposition or      Disposition of treasury stock by 
        allotment                     way of third-party allotment 
 (5)   Proposed subscriber           NTT 
 (6)    Disposition date             April 9, 2020 
 (7)   The items above are conditioned on the securities registration 
        statement to be filed pursuant to the Financial Instruments 
        and Exchange Act becoming effective. 
 

End

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