Fair Value Measurements

3 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 12 – Fair Value Measurements

Recurring Fair Value Measurements

Financial assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following tables summarize our financial assets and financial liabilities measured at fair value on a recurring basis by level within the fair value hierarchy except for certain investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient and are excluded from the leveling information provided in the tables below. Fair value amounts presented below are intended to permit reconciliation of the fair value hierarchy to the amounts presented on our Consolidated Balance Sheets.

	June 30, 2023
								Counterparty
								netting &			Fair
	Level 1		Level 2			Level 3		collateral			value
Investments in marketable securities:
Available-for-sale debt securities:
U.S. government and agency obligations	$	709	$	5		$	-	$	-		$	714
Foreign government and agency obligations		-		13			-		-			13
Municipal debt securities		-		8			-		-			8
Corporate debt securities		-		421			-		-			421
Mortgage-backed securities:
U.S. government agency		-		91			-		-			91
Non-agency residential		-		5			3		-			8
Non-agency commercial		-		49			8		-			57
Asset-backed securities		-		80			41		-			121
Available-for-sale debt securities total		709		672			52		-			1,433
Equity investments:
Fixed income mutual funds:
Fixed income mutual funds measured at    net asset value												1,076
Total return bond funds		1,625		-			-		-			1,625
Equity mutual funds		925		-			-		-			925
Equity investments total		2,550		-			-		-			3,626
Investments in marketable securities total		3,259		672			52		-			5,059
Derivative assets:
Interest rate swaps		-		1,977			-		-			1,977
Foreign currency swaps		-		64			-		-			64
Counterparty netting and collateral		-		-			-		(1,989	)		(1,989	)
Derivative assets total		-		2,041			-		(1,989	)		52
Assets at fair value		3,259		2,713			52		(1,989	)		5,111
Derivative liabilities:
Interest rate swaps		-		(547	)		-		-			(547	)
Foreign currency swaps		-		(1,035	)		-		-			(1,035	)
Counterparty netting and collateral		-		-			-		1,581			1,581
Liabilities at fair value		-		(1,582	)		-		1,581			(1	)
Net assets at fair value	$	3,259	$	1,131		$	52	$	(408	)	$	5,110

Note 12 – Fair Value Measurements (Continued)

	March 31, 2023
								Counterparty
								netting &			Fair
	Level 1		Level 2			Level 3		collateral			value
Investments in marketable securities:
Available-for-sale debt securities:
U.S. government and agency obligations	$	740	$	4		$	-	$	-		$	744
Foreign government and agency obligations		-		12			-		-			12
Municipal debt securities		-		8			-		-			8
Corporate debt securities		-		430			-		-			430
Mortgage-backed securities:
U.S. government agency		-		73			-		-			73
Non-agency residential		-		6			3		-			9
Non-agency commercial		-		53			5		-			58
Asset-backed securities		-		80			40		-			120
Available-for-sale debt securities total		740		666			48		-			1,454
Equity investments:
Fixed income mutual funds:
Fixed income mutual funds measured at    net asset value												1,081
Total return bond funds		1,631		-			-		-			1,631
Equity mutual funds		871		-			-		-			871
Equity investments total		2,502		-			-		-			3,583
Investments in marketable securities total		3,242		666			48		-			5,037
Derivative assets:
Interest rate swaps		-		1,888			-		-			1,888
Foreign currency swaps		-		49			-		-			49
Counterparty netting and collateral		-		-			-		(1,886	)		(1,886	)
Derivative assets total		-		1,937			-		(1,886	)		51
Assets at fair value		3,242		2,603			48		(1,886	)		5,088
Derivative liabilities:
Interest rate swaps		-		(468	)		-		-			(468	)
Foreign currency swaps		-		(1,002	)		-		-			(1,002	)
Counterparty netting and collateral		-		-			-		1,453			1,453
Liabilities at fair value		-		(1,470	)		-		1,453			(17	)
Net assets at fair value	$	3,242	$	1,133		$	48	$	(433	)	$	5,071

Level 3 Fair Value Measurements

The Level 3 financial assets and liabilities recorded at fair value which are subject to recurring and nonrecurring fair value measurement, and the corresponding activity and change in the fair value measurements of these assets and liabilities, were not significant to our Consolidated Balance Sheets as of June 30, 2023 and March 31, 2023, or Consolidated Statements of Income for the three months ended June 30, 2023 and 2022.

Nonrecurring Fair Value Measurements

Nonrecurring fair value measurements include Level 3 net finance receivables that are not measured at fair value on a recurring basis but are subject to fair value adjustments utilizing the fair value of the underlying collateral when there is evidence of impairment. We did not have any significant nonrecurring fair value items as of June 30, 2023 and March 31, 2023.

Note 12 – Fair Value Measurements (Continued)

The following tables provide information about assets and liabilities not carried at fair value on a recurring basis on our Consolidated Balance Sheets:

	June 30, 2023
	Carrying								Total Fair
	value		Level 1		Level 2		Level 3		value
Financial assets
Finance receivables
Retail loan	$	80,498	$	-	$	-	$	79,250	$	79,250
Wholesale		4,598		-		-		4,600		4,600
Real estate		4,862		-		-		4,812		4,812
Working capital		3,456		-		-		3,361		3,361
Financial liabilities
Unsecured notes and loans payable	$	80,912	$	-	$	77,933	$	-	$	77,933
Secured notes and loans payable		31,464		-		-		30,869		30,869

	March 31, 2023
	Carrying								Total Fair
	value		Level 1		Level 2		Level 3		value
Financial assets
Finance receivables
Retail loan	$	78,445	$	-	$	-	$	77,649	$	77,649
Wholesale		3,972		-		-		3,968		3,968
Real estate		4,981		-		-		4,990		4,990
Working capital		3,113		-		-		3,058		3,058
Financial liabilities
Unsecured notes and loans payable	$	78,949	$	-	$	76,401	$	-	$	76,401
Secured notes and loans payable		32,736		-		-		32,173		32,173

Accrued interest related to finance receivables is in Other assets on the Consolidated Balance Sheets; however, TMCC measures the fair value of each class of finance receivables using scheduled principal and interest payments. Therefore, accrued interest has been included in the carrying value of each class of finance receivables in the previous tables, along with the finance receivables, deferred origination costs, deferred income, and allowance for credit losses.

Finance receivables in the previous tables exclude related party transactions which are classified as Level 3 within the fair value hierarchy. The previous tables also exclude related party notes receivables and notes payables recorded in Other assets and Other liabilities on the Consolidated Balance Sheets which are classified as Level 3 within the fair value hierarchy. Refer to Note 11 - Related Party Transaction for additional information.

For Cash and cash equivalents and Restricted cash and cash equivalents on our Consolidated Balance Sheets, the fair value approximates the carrying value and these instruments are classified as Level 1 within the fair value hierarchy.