Segment Information

3 Months Ended

Jun. 30, 2023

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 June 30, 2023
	Finance		Voluntary protection		Intercompany
	operations		operations		eliminations			Total
Total financing revenues	$	2,904	$	-	$	-		$	2,904
Depreciation on operating leases		1,157		-		-			1,157
Interest expense		899		-		-			899
Net financing revenues		848		-		-			848
Voluntary protection contract revenues   and insurance earned premiums		-		271		-			271
Investment and other income, net		114		48		-			162
Net financing and other revenues		962		319		-			1,281
Expenses:
Provision for credit losses		165		-		-			165
Operating and administrative		334		114		-			448
Voluntary protection contract expenses and insurance losses		-		146		-			146
Total expenses		499		260		-			759
Income before income taxes		463		59		-			522
Provision for income taxes		41		13		-			54
Net income	$	422	$	46	$	-		$	468
Total assets at June 30, 2023	$	132,070	$	6,729	$	(67	)	$	138,732

	Three months ended June 30, 2022
	Finance		Voluntary protection			Intercompany
	operations		operations			eliminations			Total
Total financing revenues	$	2,831	$	-		$	-		$	2,831
Depreciation on operating leases		1,409		-			-			1,409
Interest expense		563		-			-			563
Net financing revenues		859		-			-			859
Voluntary protection contract revenues   and insurance earned premiums		-		259			-			259
Investment and other income (loss), net		33		(339	)		-			(306	)
Net financing and other revenues		892		(80	)		-			812
Expenses:
Provision for credit losses		78		-			-			78
Operating and administrative		299		107			-			406
Voluntary protection contract expenses and insurance losses		-		107			-			107
Total expenses		377		214			-			591
Income (loss) before income taxes		515		(294	)		-			221
Provision (benefit) for income taxes		125		(74	)		-			51
Net income (loss)	$	390	$	(220	)	$	-		$	170
Total assets at June 30, 2022	$	130,054	$	6,213		$	(135	)	$	136,132

Note 13 – Segment Information (Continued)

Voluntary protection operations – Contract revenues

For the three months ended June 30, 2023 and 2022, approximately 84 percent and 83 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 months ended June 30, 2023 and 2022.

We had $2.9 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, 2023 and March 31, 2022, respectively. We recognized $209 million of these balances in voluntary protection contract revenues in our Consolidated Statements of Income during the three months ended June 30, 2023, compared to $200 million recognized during the same period in fiscal 2023. As of June 30, 2023, we had unearned voluntary protection contract revenues of $3.0 billion included in Other liabilities on our Consolidated Balance Sheets, and with respect to this balance we expect to recognize revenue of $712 million during fiscal 2024, and $2.3 billion thereafter. At June 30, 2022, we had unearned voluntary protection contract revenues of $2.8 billion associated with outstanding contracts.