Segment Information

9 Months Ended

Dec. 31, 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 December 31, 2022
	Finance		Voluntary protection			Intercompany
	operations		operations			eliminations			Total
Total financing revenues	$	2,856	$	-		$	-		$	2,856
Depreciation on operating leases		1,262		-			-			1,262
Interest expense		765		-			-			765
Net financing revenues		829		-			-			829
Voluntary protection contract revenues   and insurance earned premiums		-		263			-			263
Investment and other income, net		97		143			-			240
Net financing and other revenues		926		406			-			1,332
Expenses:
Provision for credit losses		278		-			-			278
Operating and administrative expenses		345		118			-			463
Voluntary protection contract expenses and insurance losses		-		115			-			115
Total expenses		623		233			-			856
Income before income taxes		303		173			-			476
Provision for income taxes		70		42			-			112
Net income	$	233	$	131		$	-		$	364
	Nine months ended December 31, 2022
	Finance		Voluntary protection			Intercompany
	operations		operations			eliminations			Total
Total financing revenues	$	8,511	$	-		$	-		$	8,511
Depreciation on operating leases		3,976		-			-			3,976
Interest expense		2,033		-			-			2,033
Net financing revenues		2,502		-			-			2,502
Voluntary protection contract revenues   and insurance earned premiums		-		785			-			785
Investment and other income (loss), net		185		(389	)		-			(204	)
Net financing and other revenues		2,687		396			-			3,083
Expenses:
Provision for credit losses		569		-			-			569
Operating and administrative		983		330			-			1,313
Voluntary protection contract expenses and insurance losses		-		336			-			336
Total expenses		1,552		666			-			2,218
Income (loss) before income taxes		1,135		(270	)		-			865
Provision (benefit) for income taxes		281		(69	)		-			212
Net income (loss)	$	854	$	(201	)	$	-		$	653
Total assets at December 31, 2022	$	131,402	$	6,352		$	(124	)	$	137,630

Note 13 – Segment Information (Continued)

	Three months ended December 31, 2021
	Finance		Voluntary protection		Intercompany
	operations		operations		eliminations			Total
Total financing revenues	$	2,991	$	-	$	-		$	2,991
Depreciation on operating leases		1,460		-		-			1,460
Interest expense		346		-		-			346
Net financing revenues		1,185		-		-			1,185
Voluntary protection contract revenues   and insurance earned premiums		-		255		-			255
Investment and other income, net		12		64		-			76
Net financing and other revenues		1,197		319		-			1,516
Expenses:
Provision for credit losses		45		-		-			45
Operating and administrative expenses		293		101		-			394
Voluntary protection contract expenses and insurance losses		-		96		-			96
Total expenses		338		197		-			535
Income before income taxes		859		122		-			981
Provision for income taxes		204		29		-			233
Net income	$	655	$	93	$	-		$	748
	Nine months ended December 31, 2021
	Finance		Voluntary protection		Intercompany
	operations		operations		eliminations			Total
Total financing revenues	$	9,022	$	-	$	-		$	9,022
Depreciation on operating leases		4,400		-		-			4,400
Interest expense		1,055		-		-			1,055
Net financing revenues		3,567		-		-			3,567
Voluntary protection contract revenues   and insurance earned premiums		-		758		-			758
Investment and other income, net		40		199		-			239
Net financing and other revenues		3,607		957		-			4,564
Expenses:
Provision for credit losses		110		-		-			110
Operating and administrative		872		291		-			1,163
Voluntary protection contract expenses and insurance losses		-		303		-			303
Total expenses		982		594		-			1,576
Income before income taxes		2,625		363		-			2,988
Provision for income taxes		610		87		-			697
Net income	$	2,015	$	276	$	-		$	2,291
Total assets at December 31, 2021	$	129,511	$	6,745	$	(121	)	$	136,135

Note 13 – Segment Information (Continued)

Voluntary protection operations – Contract revenues

For the three and nine months ended December 31, 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 nine months ended December 31, 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 $198 million and $598 million of these balances in voluntary protection contract revenues in our Consolidated Statements of Income during the three and nine months ended December 31, 2022, respectively, compared to $170 million and $545 million recognized during the same periods in fiscal 2022. As of December 31, 2022, we had unearned voluntary protection contract revenues of $2.9 billion included in Other liabilities on our Consolidated Balance Sheets, and with respect to this balance we expect to recognize revenue of $218 million during fiscal 2023, and $2.6 billion thereafter. At December 31, 2021, we had unearned voluntary protection contract revenues of $2.6 billion associated with outstanding contracts.