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Allowance for Credit Losses
 3 Months Ended
Dec. 31, 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 Nine Months Ended
   December 31, December 31,
(Dollars in millions)  2014  2013  2014  2013
Allowance for credit losses at beginning of period $ 445 $ 467 $ 454 $ 527
Provision for credit losses   103   63   220   102
Charge-offs, net of recoveries   (98)   (74)   (224)   (173)
Allowance for credit losses at end of period $ 450 $ 456 $ 450 $ 456

Charge-offs are shown net of recoveries of $21 million and $63 million for the three and nine months ended December 31, 2014, respectively, and recoveries of $19 million and $64 million for the three and nine months ended December 31, 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 nine months ended December 31, 2014 and 2013:

 

For the Three and Nine Months Ended December 31, 2014

 

(Dollars in millions)Retail Loan Commercial Dealer Products Total
             
Allowance for Credit Losses for Finance Receivables:
             
Beginning balance, October 1, 2014$ 299 $ 1 $ 81 $ 381
Charge-offs   (89)   -   (1)   (90)
Recoveries   14   1   1   16
Provisions   72   -   (2)   70
Ending balance, December 31, 2014$ 296 $ 2 $ 79 $ 377
             
Beginning balance, April 1, 2014$ 296 $ 2 $ 88 $ 386
Charge-offs   (217)   (1)   (1) $ (219)
Recoveries   45   1   1   47
Provisions   172   -   (9)   163
Ending balance, December 31, 2014$ 296 $ 2 $ 79 $ 377
             
Ending balance: Individually evaluated for impairment$ - $ - $ 28 $ 28
Ending balance: Collectively evaluated for impairment$ 296 $ 2 $ 51 $ 349
             
Gross Finance Receivables:           
             
Ending balance, December 31, 2014$ 50,637 $ 503 $ 16,060 $ 67,200
Ending balance: Individually evaluated for impairment$ - $ - $ 209 $ 209
Ending balance: Collectively evaluated for impairment$ 50,637 $ 503 $ 15,851 $ 66,991

Note 6 – Allowance for Credit Losses (Continued)

 

The ending balance of gross finance receivables collectively evaluated for impairment includes approximately $277 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 December 31, 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 December 31, 2014 includes $913 million in receivables which are guaranteed by Toyota Motor Sales, U.S.A., Inc. (“TMS”) and $131 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 Nine Months Ended December 31, 2013

 

(Dollars in millions)Retail Loan Commercial Dealer Products Total
             
Allowance for Credit Losses for Finance Receivables:
             
Beginning balance, October 1, 2013$ 290 $ 4 $ 102 $ 396
Charge-offs   (74)   -   -   (74)
Recoveries   14   -   -   14
Provisions   59   (2)   (6)   51
Ending balance, December 31, 2013$ 289 $ 2 $ 96 $ 387
             
Beginning balance, April 1, 2013$ 333 $ 5 $ 107 $ 445
Charge-offs   (190)   (1)   -   (191)
Recoveries   49   -   -   49
Provisions   97   (2)   (11)   84
Ending balance, December 31, 2013$ 289 $ 2 $ 96 $ 387
             
Ending balance: Individually evaluated for           
impairment$ - $ - $ 30 $ 30
Ending balance: Collectively evaluated for           
impairment$ 289 $ 2 $ 66 $ 357
             
Gross Finance Receivables:           
             
Ending balance, December 31, 2013$ 49,719 $ 422 $ 16,590 $ 66,731
Ending balance: Individually evaluated for           
impairment$ - $ - $ 232 $ 232
Ending balance: Collectively evaluated for           
impairment$ 49,719 $ 422 $ 16,358 $ 66,499

The ending balance of gross finance receivables collectively evaluated for impairment includes approximately $345 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 December 31, 2013, as they are deemed to be not significant for individual evaluation. 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 December 31, 2013 includes $853 million in receivables which are guaranteed by Toyota Motor Sales, U.S.A., Inc. (“TMS”) and $147 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) December 31, 2014March 31, 2014
Aggregate balances 60 or more days past due           
 Finance receivables     $  191 $ 125
 Investments in operating leases        67   36
Total     $  258 $ 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 December 31, 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 Receivables
             
As of December 31, 2014          
             
Retail loan$ 668$ 144$ 46$ 858$ 49,779$ 50,637
Commercial  8  1  -  9  494  503
Wholesale  -  -  -  -  9,481  9,481
Real estate  -  -  -  -  4,696  4,696
Working capital  -  -  -  -  1,883  1,883
Total$ 676$ 145$ 46$ 867$ 66,333$ 67,200
             
(Dollars in millions)30 - 59 Days Past Due60 - 89 Days Past Due90 Days or Greater Past DueTotal Past DueCurrentTotal Finance Receivables
             
As of March 31, 2014          
             
Retail loan$ 459$ 90$ 33$ 582$ 48,828$ 49,410
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