Toyota to buy back company shares

Bloomberg News Service

TOKYO — Toyota Motor Corp., the world's third-largest automaker, said it plans to buy back between 2.7 million and 2.8 million shares after March, depending on market and financial conditions.

"The main purpose of the share buyback is to increase shareholder returns," said Toyota Senior Managing Director Ryuji Araki in an interview, adding that no schedule has yet been fixed. "In the last four to five years, we've kept the rate (of shareholder returns) between about 40 percent at the lowest and 80 percent at the highest."

Buybacks benefit shareholders by increasing earnings per share, and can also result in higher dividends. Toyota's shareholder return — the total of dividend and buyback value — was 41 percent of the parent company's annual net income in the year ended in March 2000, while the same rate was 83 percent for the year ended in March 1999.

Toyota's long- and short-term debt ratings are the highest of any automaker in the world, based on the latest assessments by Standard & Poor's and Moody's.

Including the January announcement, the automaker has bought 125.8 million shares for 4.1 trillion yen in 11 buybacks to date, the company said.

Toyota, which has been traded on the New York and London stock exchanges since September 1999, is also preparing to start reporting earnings on a quarterly basis.

Most Japanese companies report results every six months, although analysts and investors are asking for more frequent reporting, which increases transparency and makes tracking companies easier.

"We hope to be able to report quarterly as early as next year," said Araki. "We're trying to disclose quarterly earnings and are sorting out overseas subsidiaries' earnings periods."

Honda Motor Co. is now the only Japanese automaker that issues quarterly earnings.