Segment Information

6 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Segment Information

Note 13 – Segment Information

Financial information for our reportable operating segments, which includes allocated corporate expenses, is summarized as follows:

	Three months ended September 30, 2022
	Finance		Voluntary protection			Intercompany
	operations		operations			eliminations			Total
Total financing revenues	$	2,824	$	-		$	-		$	2,824
Depreciation on operating leases		1,305		-			-			1,305
Interest expense		705		-			-			705
Net financing revenues		814		-			-			814
Voluntary protection contract revenues   and insurance earned premiums		-		263			-			263
Investment and other income (loss), net		55		(193	)		-			(138	)
Net financing and other revenues		869		70			-			939
Expenses:
Provision for credit losses		213		-			-			213
Operating and administrative expenses		339		105			-			444
Voluntary protection contract expenses and insurance losses		-		114			-			114
Total expenses		552		219			-			771
Income (loss) before income taxes		317		(149	)		-			168
Provision (benefit) for income taxes		86		(37	)		-			49
Net income (loss)	$	231	$	(112	)	$	-		$	119
	Six months ended September 30, 2022
	Finance		Voluntary protection			Intercompany
	operations		operations			eliminations			Total
Total financing revenues	$	5,655	$	-		$	-		$	5,655
Depreciation on operating leases		2,714		-			-			2,714
Interest expense		1,268		-			-			1,268
Net financing revenues		1,673		-			-			1,673
Voluntary protection contract revenues   and insurance earned premiums		-		522			-			522
Investment and other income (loss), net		88		(532	)		-			(444	)
Net financing and other revenues		1,761		(10	)		-			1,751
Expenses:
Provision for credit losses		291		-			-			291
Operating and administrative		638		212			-			850
Voluntary protection contract expenses and insurance losses		-		221			-			221
Total expenses		929		433			-			1,362
Income (loss) before income taxes		832		(443	)		-			389
Provision (benefit) for income taxes		211		(111	)		-			100
Net income (loss)	$	621	$	(332	)	$	-		$	289
Total assets at September 30, 2022	$	128,403	$	6,077		$	(128	)	$	134,352

Note 13 – Segment Information (Continued)

	Three months ended September 30, 2021
	Finance		Voluntary protection			Intercompany
	operations		operations			eliminations			Total
Total financing revenues	$	3,032	$	-		$	-		$	3,032
Depreciation on operating leases		1,499		-			-			1,499
Interest expense		423		-			-			423
Net financing revenues		1,110		-			-			1,110
Voluntary protection contract revenues   and insurance earned premiums		-		254			-			254
Investment and other income (loss), net		9		(2	)		-			7
Net financing and other revenues		1,119		252			-			1,371
Expenses:
Provision for credit losses		68		-			-			68
Operating and administrative expenses		287		98			-			385
Voluntary protection contract expenses and insurance losses		-		99			-			99
Total expenses		355		197			-			552
Income before income taxes		764		55			-			819
Provision for income taxes		185		12			-			197
Net income	$	579	$	43		$	-		$	622
	Six months ended September 30, 2021
	Finance		Voluntary protection			Intercompany
	operations		operations			eliminations			Total
Total financing revenues	$	6,031	$	-		$	-		$	6,031
Depreciation on operating leases		2,940		-			-			2,940
Interest expense		709		-			-			709
Net financing revenues		2,382		-			-			2,382
Voluntary protection contract revenues   and insurance earned premiums		-		503			-			503
Investment and other income, net		28		135			-			163
Net financing and other revenues		2,410		638			-			3,048
Expenses:
Provision for credit losses		65		-			-			65
Operating and administrative		579		190			-			769
Voluntary protection contract expenses and insurance losses		-		207			-			207
Total expenses		644		397			-			1,041
Income before income taxes		1,766		241			-			2,007
Provision for income taxes		406		58			-			464
Net income	$	1,360	$	183		$	-		$	1,543
Total assets at September 30, 2021	$	130,544	$	6,571		$	(138	)	$	136,977

Note 13 – Segment Information (Continued)

Voluntary protection operations – Contract revenues

For the three and six months ended September 30, 2022 and 2021, approximately 83 percent and 82 percent, respectively, of voluntary protection contract revenues in the Voluntary protection operations segment were accounted for under the guidance for revenue from contracts with customers.

The Voluntary protection operations segment defers contractually determined incentives paid to dealers as contract costs for selling voluntary protection products. These costs are recorded in Other assets on our Consolidated Balance Sheets and are amortized to Operating and administrative expenses in the Consolidated Statements of Income using a methodology consistent with the recognition of revenue. The amount of capitalized dealer incentives and the related amortization was not significant to our consolidated financial statements as of and for the three and six months ended September 30, 2022 and 2021.

We had $2.5 billion and $2.7 billion of unearned voluntary protection contract revenues from contracts with customers included in Other liabilities on our Consolidated Balance Sheets as of March 31, 2021 and March 31, 2022, respectively. We recognized $200 million and $400 million of these balances in voluntary protection contract revenues in our Consolidated Statements of Income during the three and six months ended September 30, 2022, respectively, compared to $182 million and $374 million recognized during the same periods in fiscal 2022. As of September 30, 2022, we had unearned voluntary protection contract revenues of $2.8 billion included in Other liabilities on our Consolidated Balance Sheets, and with respect to this balance we expect to recognize revenue of $414 million during fiscal 2023, and $2.4 billion thereafter. At September 30, 2021, we had unearned voluntary protection contract revenues of $2.6 billion associated with outstanding contracts.