Note 15 – Related Party Transactions

The tables below summarize amounts included in our Consolidated Statement of Income and in our Consolidated Balance Sheet under various related party agreements or relationships:


	Years Ended March 31,
	2016			2015			2014
Net financing revenues:
Manufacturers’ subvention support and other revenues	$	1,315		$	1,196		$	994
Origination costs paid to affiliates	$	(1	)	$	(1	)	$	-
Credit support fees incurred	$	(91	)	$	(88	)	$	(82	)
Interest and other expenses paid to affiliates	$	(3	)	$	(2	)	$	(3	)

Insurance earned premiums and contract revenues:
Affiliate insurance premiums and contract revenues	$	132		$	129		$	131

Investments and other income, net:
Gain on sale of commercial finance business	$	197		$	-		$	-
Interest earned on notes receivable from affiliates	$	7		$	4		$	6
Other income from affiliates	$	1		$	-		$	-

Expenses:
Shared services charges and other expenses	$	47		$	63		$	61
Employee benefits expense	$	33		$	24		$	38
Insurance losses and loss adjustment expenses	$	1		$	1		$	-

Note 15 – Related Party Transactions (Continued)

	March 31,			March 31,
	2016			2015
Assets:
Investments in marketable securities
Investments in affiliates’ commercial paper	$	-		$	37

Finance receivables, net
Accounts receivable from affiliates	$	119		$	83
Direct finance lease receivables from affiliates	$	-		$	6
Notes receivable under home loan programs	$	9		$	11
Deferred retail origination costs paid to affiliates	$	1		$	1
Deferred retail subvention income from affiliates	$	(794	)	$	(802	)

Investments in operating leases, net
Leases to affiliates	$	2		$	7
Deferred lease origination costs paid to affiliates	$	1		$	1
Deferred lease subvention income from affiliates	$	(1,057	)	$	(950	)

Other assets
Notes receivable from affiliates	$	1,177		$	1,184
Other receivables from affiliates	$	7		$	6
Subvention support receivable from affiliates	$	127		$	126

Liabilities:
Other liabilities
Unearned affiliate insurance premiums and contract revenues	$	278		$	252
Accounts payable to affiliates	$	209		$	136
Notes payable to affiliates	$	20		$	24

Shareholder’s Equity:
Stock-based compensation	$	2		$	2

Note 15 – Related Party Transactions (Continued)

Financing Support Arrangements with Affiliates

TMCC is party to a credit support agreement with TFSC (the “TMCC Credit Support Agreement”). The TMCC Credit Support Agreement requires TFSC to maintain certain ownership, net worth maintenance, and debt service provisions in respect to TMCC, but is not a guarantee by TFSC of any securities or obligations of TMCC. In conjunction with this credit support agreement, TMCC has agreed to pay TFSC a semi-annual fee based on a fixed rate applied to the weighted average outstanding amount of securities entitled to credit support. Credit support fees incurred under this agreement were $91 million, $88 million, and $82 million for fiscal 2016, 2015, and 2014, respectively.

TCPR is the beneficiary of a credit support agreement with TFSC containing provisions similar to the TMCC Credit Support Agreement described above.

In addition, TMCC receives and provides financing support from TFSC and other affiliates in the form of promissory notes, conduit finance agreements and various loan and credit facility agreements. Total financing support received and provided, along with the amounts currently outstanding under those agreements, is summarized below. All foreign currency amounts have been translated at the exchange rates in effect as of March 31, 2016.

Financing Support Provided by Parent and Affiliates (amounts in millions):

			Amounts outstanding (USD) at
Affiliate	Financing available to TMCC		March 31, 2016		March 31, 2015

Toyota Credit Canada Inc.	CAD	1,500	$	-	$	-
Toyota Motor Finance (Netherlands) B.V.	Euro	1,000		-		-
Toyota Financial Services Americas Corporation	USD	200		12		24
Toyota Finance Australia Limited	USD	1,000		-		-
Toyota Financial Services Securities USA Corporation	USD	15		8		-
Total			$	20	$	24

Financing Support Provided to Parent and Affiliates (amounts in millions):

			Amounts outstanding (USD) at
Affiliate	Financing made available by TMCC		March 31, 2016		March 31, 2015

Toyota Financial Savings Bank	USD	400	$	-	$	25
Toyota Credit Canada Inc.	CAD	2,500		220		-
Toyota Motor Finance (Netherlands) B.V.	Euro	1,000		619		778
Toyota Financial Services Americas Corporation	USD	200		-		-
Toyota Financial Services Mexico, S.A. de C.V.	USD	500		-		-
Banco Toyota do Brasil	USD	300		58		81
Toyota Finance Australia Limited	USD	1,000		280		300
Total			$	1,177	$	1,184

Note 15 – Related Party Transactions (Continued)

Other Financing Support Provided to Affiliates

TMCC provides home loans to certain employees. In addition, we also provide home equity advances through a relocation provider to certain employees relocating to Texas. TMCC executive officers and directors are not eligible for the home loan or home equity advance programs.

TMCC provides wholesale financing, real estate and working capital loans to certain dealerships that were consolidated with another affiliate under the accounting guidance for variable interest entities. TMCC also pays these dealers origination fees. These costs represent direct costs incurred in connection with the acquisition of retail and lease contracts, including incentive and rate participation.

TMCC has guaranteed the payments of principal and interest with respect to the bonds of manufacturing facilities of certain affiliates. The nature, business purpose, and amounts of these guarantees are described in Note 14 – Commitments and Contingencies.

TMCC and TFSB are parties to a master participation agreement pursuant to which TMCC agreed to purchase up to $60 million per year of residential mortgage loans originated by TFSB that meet specified credit underwriting guidelines, not to exceed $150 million over a three year period. At March 31, 2016 and 2015, there were $37 million and $47 million, respectively, in loan participations outstanding that had been purchased by TMCC under this agreement.

Shared Service Arrangements with Affiliates

TMCC is subject to the following shared service agreements:

TMCC and TCPR incur costs under various shared service agreements with our affiliates. Services provided by affiliates under the shared service arrangement include marketing, technological and administrative services, as well as services related to our funding and risk management activities and our bank and investor relationships.

TMCC provides various services to our financial services affiliates, including certain administrative, systems and operational support.

TMCC provides various services to TFSB, including marketing, administrative, systems, and operational support in exchange for TFSB making available certain financial products and services to TMCC’s customers and dealers meeting TFSB’s credit standards.

TMCC is a party to expense reimbursement agreements with TFSB and TFSC related to costs incurred by TMCC or these affiliates on behalf of the other party in connection with TMCC’s provision of services to these affiliates or the provision by these affiliates of certain financial products and services to our customers and dealers in support of TMCC’s customer loyalty strategy and programs, and other brand and sales support. TMCC is also party to an expense reimbursement agreement with TFSA that reimbursed expenses incurred by TFSA with respect to costs related to TFSB’s credit card rewards program. TFSB sold its credit card rewards portfolio in October 2015 and no credit card reward program costs have been incurred after such date.

Note 15 – Related Party Transactions (Continued)

Operational Support Arrangements with Affiliates

TMCC and TCPR provide various wholesale financing to dealers, which result in our having payables to TMS and Toyota de Puerto Rico Corp (“TDPR”).

TMCC is party to a lease agreement with TMS for our headquarters location in the TMS headquarters complex in Torrance, California, expiring in 2018, and our Customer Service Center located in Cedar Rapids, Iowa, expiring in 2019. The lease commitments are described in Note 14 – Commitments and Contingencies.

Subvention support receivable from affiliates represent amounts due from TMS and other affiliates in support of retail and lease subvention programs offered by TMCC. Deferred subvention income from affiliates represents the unearned portion of amounts received from these transactions, and manufacturers’ subvention support and other revenues primarily represent the earned portion of such amounts.

Leases to affiliates represent the investment in operating leases of vehicles leased to affiliates.

TMCC is a participating employer in certain retirement, postretirement health care and life insurance sponsored by TMS. See Note 12 – Pension and Other Benefit Plans for additional information. TMCC also participates in share-based compensation plans sponsored by TMC.

Affiliate insurance premiums and contract revenues primarily represent revenues from TMIS for administrative services and various types of coverage provided to TMS and affiliates. This includes contractual indemnity coverage and related administrative services for TMS’ certified pre-owned vehicle program and umbrella liability policy. TMIS provides umbrella liability insurance to TMS and affiliates covering certain dollar value layers of risk above various primary or self-insured retentions. On all layers in which TMIS has provided coverage, 99 percent of the risk has been ceded to various reinsurers. During fiscal 2012, TMIS began providing property deductible reimbursement insurance to TMS and affiliates covering losses incurred under their primary policy.

On October 1, 2015, we completed the sale of our commercial finance business to TICF. As part of this transaction, we entered into an Expense Reimbursement Agreement with TICF relating to certain expenses incurred by TMCC and a Transition Services Agreement relating to certain post-close services to be provided by TMCC to TICF.