Segment Information

9 Months Ended

Dec. 31, 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 December 31, 2023
	Finance		Voluntary protection		Intercompany
	operations		operations		eliminations			Total
Total financing revenues	$	3,098	$	-	$	-		$	3,098
Depreciation on operating leases		1,063		-		-			1,063
Interest expense		1,230		-		-			1,230
Net financing revenues		805		-		-			805
Voluntary protection contract revenues   and insurance earned premiums		-		282		-			282
Investment and other income, net		142		353		-			495
Net financing and other revenues		947		635		-			1,582
Expenses:
Provision for credit losses		206		-		-			206
Operating and administrative expenses		407		110		-			517
Voluntary protection contract expenses and insurance losses		-		143		-			143
Total expenses		613		253		-			866
Income before income taxes		334		382		-			716
Provision for income taxes		33		80		-			113
Net income	$	301	$	302	$	-		$	603
	Nine months ended December 31, 2023
	Finance		Voluntary protection		Intercompany
	operations		operations		eliminations			Total
Total financing revenues	$	8,988	$	-	$	-		$	8,988
Depreciation on operating leases		3,145		-		-			3,145
Interest expense		3,401		-		-			3,401
Net financing revenues		2,442		-		-			2,442
Voluntary protection contract revenues   and insurance earned premiums		-		831		-			831
Investment and other income, net		375		264		-			639
Net financing and other revenues		2,817		1,095		-			3,912
Expenses:
Provision for credit losses		592		-		-			592
Operating and administrative		1,073		341		-			1,414
Voluntary protection contract expenses and insurance losses		-		434		-			434
Total expenses		1,665		775		-			2,440
Income before income taxes		1,152		320		-			1,472
Provision for income taxes		81		73		-			154
Net income	$	1,071	$	247	$	-		$	1,318
Total assets at December 31, 2023	$	139,575	$	7,301	$	(58	)	$	146,818

Note 13 – Segment Information (Continued)

	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)

Voluntary protection operations – Contract revenues

For the three and nine months ended December 31, 2023, approximately 85 percent and 84 percent, respectively, compared to approximately 83 percent for the same periods in fiscal 2023, 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, 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 $228 million and $649 million of these balances in voluntary protection contract revenues in our Consolidated Statements of Income during the three and nine months ended December 31, 2023, respectively, compared to $198 million and $598 million recognized during the same periods in fiscal 2023. As of December 31, 2023, we had unearned voluntary protection contract revenues of $3.1 billion included in Other liabilities on our Consolidated Balance Sheets, and with respect to this balance we expect to recognize revenue of $259 million during fiscal 2024, and $2.8 billion thereafter. At December 31, 2022, we had unearned voluntary protection contract revenues of $2.9 billion associated with outstanding contracts.