XML 69 R15.htm IDEA: XBRL DOCUMENT v2.4.0.8
Allowance for Credit Losses
 3 Months Ended
Sep. 30, 2014
Allowance for Credit Losses [Abstract]  
Allowance for Credit Losses

Note 6 – Allowance for Credit Losses

 

The following table provides information related to our allowance for credit losses on finance receivables and investments in operating leases:

   Three Months Ended Six Months Ended
   September 30, September 30,
(Dollars in millions)  2014  2013  2014  2013
Allowance for credit losses at beginning of period $ 447 $ 501 $ 454 $ 527
Provision for credit losses   79   28   117   39
Charge-offs, net of recoveries   (81)   (62)   (126)   (99)
Allowance for credit losses at end of period $ 445 $ 467 $ 445 $ 467

Charge-offs are shown net of recoveries of $20 million and $42 million for the three and six months ended September 30, 2014, respectively, and recoveries of $21 million and $45 million for the three and six months ended September 30, 2013, respectively.

Allowance for Credit Losses and Finance Receivables by Portfolio Segment

 

The following tables provide information related to our allowance for credit losses and finance receivables by portfolio segment for the three and six months ended September 30, 2014 and 2013:

 

For the Three and Six Months Ended September 30, 2014

 

(Dollars in millions)Retail Loan Commercial Dealer Products Total
             
Allowance for Credit Losses for Finance Receivables:
             
Beginning balance, July 1, 2014$ 291 $ 2 $ 88 $ 381
Charge-offs   (76)   (1)   -   (77)
Recoveries   15   -   -   15
Provisions   69   -   (7)   62
Ending balance, September 30, 2014$ 299 $ 1 $ 81 $ 381
             
Beginning balance, April 1, 2014$ 296 $ 2 $ 88 $ 386
Charge-offs   (128)   (1)   - $ (129)
Recoveries   31   -   -   31
Provisions   100   -   (7)   93
Ending balance, September 30, 2014$ 299 $ 1 $ 81 $ 381
             
Ending balance: Individually evaluated for impairment$ - $ - $ 26 $ 26
Ending balance: Collectively evaluated for impairment$ 299 $ 1 $ 55 $ 355
             
Gross Finance Receivables:           
             
Ending balance, September 30, 2014$ 50,726 $ 481 $ 14,953 $ 66,160
Ending balance: Individually evaluated for impairment$ - $ - $ 206 $ 206
Ending balance: Collectively evaluated for impairment$ 50,726 $ 481 $ 14,747 $ 65,954

Note 6 – Allowance for Credit Losses (Continued)

 

The ending balance of gross finance receivables collectively evaluated for impairment includes approximately $292 million and $1 million of finance receivables within the retail loan and commercial portfolio segments, respectively, that are specifically identified as impaired. These amounts are aggregated with their respective portfolio segments when determining the allowance for credit losses as of September 30, 2014, as they are deemed to be insignificant for individual evaluation and we have determined that the allowance for credit losses would not be materially different if the amounts had been individually evaluated for impairment. The ending balance of gross finance receivables for the dealer products portfolio segment collectively evaluated for impairment as of September 30, 2014 includes $866 million in receivables which are guaranteed by Toyota Motor Sales, U.S.A., Inc. (“TMS”) and $152 million in receivables which are guaranteed by third party private Toyota distributors. These receivables are related to certain Toyota and Lexus dealers and other third parties to which we provided financing at the request of TMS or such private distributors.Note 6 – Allowance for Credit Losses (Continued)

 

For the Three and Six Months Ended September 30, 2013

 

(Dollars in millions)Retail Loan Commercial Dealer Products Total
             
Allowance for Credit Losses for Finance Receivables:
             
Beginning balance, July 1, 2013$ 309 $ 3 $ 112 $ 424
Charge-offs   (67)   -   -   (67)
Recoveries   16   -   -   16
Provisions   32   1   (10)   23
Ending balance, September 30, 2013$ 290 $ 4 $ 102 $ 396
             
Beginning balance, April 1, 2013$ 333 $ 5 $ 107 $ 445
Charge-offs   (116)   (1)   -   (117)
Recoveries   35   -   -   35
Provisions   38   -   (5)   33
Ending balance, September 30, 2013$ 290 $ 4 $ 102 $ 396
             
Ending balance: Individually evaluated for           
impairment$ - $ - $ 33 $ 33
Ending balance: Collectively evaluated for           
impairment$ 290 $ 4 $ 69 $ 363
             
Gross Finance Receivables:           
             
Ending balance, September 30, 2013$ 49,591 $ 395 $ 14,857 $ 64,843
Ending balance: Individually evaluated for           
impairment$ - $ - $ 220 $ 220
Ending balance: Collectively evaluated for           
impairment$ 49,591 $ 395 $ 14,637 $ 64,623

The ending balance of gross finance receivables collectively evaluated for impairment includes approximately $366 million and $1 million of finance receivables within the retail loan and commercial portfolio segments, respectively, that are specifically identified as impaired. These amounts are aggregated with their respective portfolio segments when determining the allowance for credit losses as of September 30, 2013, as they are deemed to be insignificant for individual evaluation and we have determined that the allowance for credit losses would not be materially different if the amounts had been individually evaluated for impairment. The ending balance of gross finance receivables for the dealer products portfolio segment collectively evaluated for impairment as of September 30, 2013 includes $830 million in receivables which are guaranteed by TMS and $149 million in receivables which are guaranteed by third party private Toyota distributors. These receivables are related to certain Toyota and Lexus dealers and other third parties to which we provided financing at the request of TMS or such private distributors.

 

Note 6 – Allowance for Credit Losses (Continued)

 

Past Due Finance Receivables and Investments in Operating Leases

(Dollars in millions) September 30, 2014March 31, 2014
Aggregate balances 60 or more days past due           
 Finance receivables     $  171 $ 125
 Investments in operating leases        54   36
Total     $  225 $ 161

Substantially all finance and operating lease receivables do not involve recourse to the dealer in the event of customer default. Finance and operating lease receivables 60 or more days past due include accounts in bankruptcy and exclude accounts for which vehicles have been repossessed.

 

Past Due Finance Receivables by Class

 

The following tables summarize the aging of finance receivables by class as of September 30, 2014 and March 31, 2014:

(Dollars in millions)30 - 59 Days Past Due60 - 89 Days Past Due90 Days or Greater Past DueTotal Past DueCurrentTotal Finance Receivables90 Days or Greater Past Due and Accruing
               
As of September 30, 2014            
               
Retail loan$ 563$ 125$ 45$ 733$ 49,993$ 50,726$ 45
Commercial  7  1  -  8  473  481  -
Wholesale  -  -  -  -  8,309  8,309  -
Real estate  -  -  -  -  4,641  4,641  -
Working capital  -  -  -  -  2,003  2,003  -
Total$ 570$ 126$ 45$ 741$ 65,419$ 66,160$ 45
               
(Dollars in millions)30 - 59 Days Past Due60 - 89 Days Past Due90 Days or Greater Past DueTotal Past DueCurrentTotal Finance Receivables90 Days or Greater Past Due and Accruing
               
As of March 31, 2014            
               
Retail loan$ 459$ 90$ 33$ 582$ 48,828$ 49,410$ 33
Commercial  6  1  -  7  432  439  -
Wholesale  -  -  -  -  9,436  9,436  -
Real estate  4  1  -  5  4,653  4,658  -
Working capital  -  -  -  -  1,831  1,831  -
Total$ 469$ 92$ 33$ 594$ 65,180$ 65,774$ 33