10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2017

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________

Commission File Number 1-9961

TOYOTA MOTOR CREDIT CORPORATION

(Exact name of registrant as specified in its charter)

California	95-3775816
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
6565 Headquarters Drive Plano, Texas	75024
(Address of principal executive offices)	(Zip Code)
Registrant's telephone number, including area code: (469) 486-9300
19001 S. Western Avenue, Torrance, California 90501
(Former name or former address, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company.  See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     ☐    

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

As of October 31, 2017, the number of outstanding shares of capital stock, no par value per share, of the registrant was 91,500, all of which shares were held by Toyota Financial Services International Corporation.

Reduced Disclosure Format

The registrant meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this Form with the reduced disclosure format.

TOYOTA MOTOR CREDIT CORPORATION

FORM 10-Q

For the quarter ended September 30, 2017

INDEX
PART I	3
Item 1. Financial Statements	3
Consolidated Statements of Income	3
Consolidated Statements of Comprehensive Income	3
Consolidated Balance Sheets	4
Consolidated Statements of Shareholder’s Equity	5
Consolidated Statements of Cash Flows	6
Notes to Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis	46
Item 3. Quantitative and Qualitative Disclosures About Market Risk	71
Item 4. Controls and Procedures	71
PART II	72
Item 1. Legal Proceedings	72
Item 1A. Risk Factors	72
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	72
Item 3. Defaults Upon Senior Securities	72
Item 4. Mine Safety Disclosures	72
Item 5. Other Information	72
Item 6. Exhibits	72
Exhibit Index	73
Signatures	74

2

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

TOYOTA MOTOR CREDIT CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in millions)

(Unaudited)

	Three Months Ended				Six Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Financing revenues:
Operating lease	$	2,016	$	1,925	$	3,997	$	3,816
Retail		490		459		964		915
Dealer		141		112		284		223
Total financing revenues		2,647		2,496		5,245		4,954
Depreciation on operating leases		1,719		1,683		3,400		3,272
Interest expense		452		297		900		604
Net financing revenues		476		516		945		1,078
Insurance earned premiums and contract revenues		221		199		437		392
Investment and other income, net		55		42		102		81
Realized gains, net on investments in marketable securities		1		70		42		83
Net financing revenues and other revenues		753		827		1,526		1,634
Expenses:
Provision for credit losses		127		161		212		213
Operating and administrative		337		317		650		596
Insurance losses and loss adjustment expenses		102		91		216		180
Total expenses		566		569		1,078		989
Income before income taxes		187		258		448		645
Provision for income taxes		70		95		166		241
Net income	$	117	$	163	$	282	$	404

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in millions)

(Unaudited)

	Three Months Ended						Six Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Net income	$	117		$	163		$	282		$	404
Other comprehensive income (loss), net of tax:
Net unrealized gains on available-for-sale marketable securities    [net of tax provision of ($5), ($10), ($15) and ($32),    respectively]		9			16			26			52
Reclassification adjustment for net gains on available-for-sale    marketable securities included in realized gains, net on    investments in marketable securities    [net of tax provision of $0, $27, $16 and $32, respectively]		(1	)		(43	)		(26	)		(51	)
Other comprehensive income (loss)		8			(27	)		-			1
Comprehensive income	$	125		$	136		$	282		$	405

Refer to the accompanying Notes to Consolidated Financial Statements.

3

TOYOTA MOTOR CREDIT CORPORATION

CONSOLIDATED BALANCE SHEETS

(Dollars in millions except share data)

(Unaudited)

	September 30,		March 31,
	2017		2017
ASSETS
Cash and cash equivalents	$	4,682	$	4,198
Restricted cash		1,028		1,087
Investments in marketable securities		6,128		5,692
Finance receivables, net		67,396		68,462
Investments in operating leases, net		38,823		38,152
Other assets		2,043		2,044
Total assets	$	120,100	$	119,635
LIABILITIES AND SHAREHOLDER’S EQUITY
Debt	$	98,223	$	98,233
Deferred income taxes		8,149		7,926
Other liabilities		3,922		3,952
Total liabilities		110,294		110,111
Commitments and contingencies (Refer to Note 12)
Shareholder’s equity:
Capital stock, no par value (100,000 shares authorized; 91,500 issued    and outstanding) at September 30, 2017 and March 31, 2017		915		915
Additional paid-in capital		2		2
Accumulated other comprehensive income		25		25
Retained earnings		8,864		8,582
Total shareholder's equity		9,806		9,524
Total liabilities and shareholder's equity	$	120,100	$	119,635

The following table presents the assets and liabilities of our consolidated variable interest entities (Refer to Note 10).

	September 30,		March 31,
	2017		2017
ASSETS
Finance receivables, net	$	12,219	$	12,865
Investments in operating leases, net		6,774		4,888
Other assets		129		87
Total assets	$	19,122	$	17,840
LIABILITIES
Debt	$	14,649	$	14,319
Other liabilities		8		6
Total liabilities	$	14,657	$	14,325

Refer to the accompanying Notes to Consolidated Financial Statements.

4

TOYOTA MOTOR CREDIT CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDER’S EQUITY

(Dollars in millions)

(Unaudited)

					Accumulated
			Additional		other
	Capital		paid-in		comprehensive		Retained
	stock		capital		income		earnings		Total
Balance at March 31, 2016	$	915	$	2	$	165	$	8,315	$	9,397
Net income		-		-		-		404		404
Other comprehensive income, net of tax		-		-		1		-		1
Balance at September 30, 2016	$	915	$	2	$	166	$	8,719	$	9,802
Balance at March 31, 2017	$	915	$	2	$	25	$	8,582	$	9,524
Net income		-		-		-		282		282
Other comprehensive loss, net of tax		-		-		-		-		-
Balance at September 30, 2017	$	915	$	2	$	25	$	8,864	$	9,806

Refer to the accompanying Notes to Consolidated Financial Statements.

5

TOYOTA MOTOR CREDIT CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in millions)

(Unaudited)

	Six Months Ended September 30,
	2017			2016
Cash flows from operating activities:
Net income	$	282		$	404
Adjustments to reconcile net income to net cash provided by operating    activities:
Depreciation and amortization		3,439			3,303
Recognition of deferred income		(951	)		(877	)
Provision for credit losses		212			213
Amortization of deferred costs		307			315
Foreign currency and other adjustments to the carrying value of debt, net		1,035			(114	)
Net realized gains on available-for-sale securities		(42	)		(83	)
Net change in:
Restricted cash		59			7
Derivative assets		(11	)		23
Other assets (Note 8) and accrued interest		(154	)		(179	)
Deferred income taxes		224			203
Derivative liabilities		(30	)		(2	)
Other liabilities		11			124
Net cash provided by operating activities		4,381			3,337
Cash flows from investing activities:
Purchase of investments in marketable securities		(5,757	)		(2,209	)
Proceeds from sales of investments in marketable securities		1,248			407
Proceeds from maturities of investments in marketable securities		4,107			1,711
Acquisition of finance receivables		(12,638	)		(12,572	)
Collection of finance receivables		12,004			12,173
Net change in wholesale and certain working capital receivables		1,651			466
Acquisition of investments in operating leases		(8,612	)		(9,595	)
Disposals of investments in operating leases		4,938			5,427
Net change in financing support provided to affiliates		232			973
Cash equivalents (restricted) to acquire finance    receivables and investment in operating leases, net		-			(147	)
Other, net		(37	)		(32	)
Net cash used in investing activities		(2,864	)		(3,398	)
Cash flows from financing activities:
Proceeds from issuance of debt		11,707			13,089
Payments on debt		(11,380	)		(13,576	)
Net change in commercial paper		(1,371	)		1,093
Net change in financing support provided by affiliates		11			(9	)
Net cash (used in) provided by financing activities		(1,033	)		597
Net increase in cash and cash equivalents		484			536
Cash and cash equivalents at the beginning of the period		4,198			2,701
Cash and cash equivalents at the end of the period	$	4,682		$	3,237
Supplemental disclosures:
Interest paid, net	$	851		$	684
Income taxes paid (received), net	$	85		$	(5	)

Refer to the accompanying Notes to Consolidated Financial Statements.

6

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 1 – Interim Financial Data

Basis of Presentation

The information furnished in these unaudited interim consolidated financial statements as of and for the three and six months ended September 30, 2017 and 2016 has been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”).  In the opinion of management, the unaudited consolidated financial information reflects all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results for the interim periods presented.  The results of operations for the three and six months ended September 30, 2017 do not necessarily indicate the results which may be expected for the full fiscal year ending March 31, 2018 (“fiscal 2018”).

These financial statements should be read in conjunction with the Consolidated Financial Statements, significant accounting policies, and other Notes to Consolidated Financial Statements included in Toyota Motor Credit Corporation’s Annual Report on Form 10-K (“Form 10-K”) for the fiscal year ended March 31, 2017 (“fiscal 2017”), which was filed with the Securities and Exchange Commission on June 1, 2017.  References herein to “TMCC” denote Toyota Motor Credit Corporation, and references herein to “we”, “our”, and “us” denote Toyota Motor Credit Corporation and its consolidated subsidiaries.

Related party transactions are disclosed in Note 14 – Related Party Transactions.

7

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 1 – Interim Financial Data (Continued)

New Accounting Guidance

In May 2014, the Financial Accounting Standards Board ("FASB") issued new guidance on the recognition of revenue from contracts with customers.  This comprehensive standard will supersede virtually all existing revenue recognition guidance.  In August 2015, the FASB issued a one-year deferral of the effective date, with early adoption as of the original effective date permitted.  The FASB also subsequently issued guidance amending and clarifying various aspects of the new revenue recognition standard.  We plan to adopt the new revenue guidance effective April 1, 2018 with a cumulative-effect adjustment to the current period opening balance of retained earnings.  We do not expect the adoption of this standard to have a material impact on our operating lease, retail and dealer financing revenues as the majority of those revenues are outside the scope of the standard.  However, certain products within our insurance operations fall within the scope of this guidance.  Based on our evaluation of contracts related to those products, we expect the application of this guidance will result in changes to both the timing of recognition and the classification of revenues and expenses.  While our assessment is not complete, we do not expect these changes to have a material impact on our income before taxes.  We continue to assess the impact of this guidance on our consolidated financial statements and related disclosures.

In January 2016, the FASB issued new guidance that addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments and will require entities to measure equity investments at fair value and recognize any changes in fair value in earnings.  We will adopt this new guidance effective April 1, 2018 with a cumulative-effect adjustment to the current period opening balance of retained earnings. This guidance also requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from changes in instrument-specific credit risk for instruments where the entity has elected the fair value option.  The adoption of this guidance is not expected to have a material impact on our consolidated financial statements.

In February 2016, the FASB issued new guidance that introduces a lessee model that brings most leases on the balance sheet and aligns many of the underlying principles of the new lessor model with those in the new revenue recognition standard.  The new leasing standard represents a wholesale change to lease accounting for lessees. Upon adoption, we expect to recognize lease liabilities and right-of-use assets (at their present value) in our Consolidated Balance Sheets related to predominantly all of the future minimum lease payments as disclosed in Note 12 – Commitments and Contingencies.  This accounting guidance is effective for us on April 1, 2019.  We continue to evaluate the other potential impacts of this guidance on our consolidated financial statements and related disclosures.

In June 2016, the FASB issued new guidance that introduces a new impairment model based on expected losses rather than incurred losses for certain types of financial instruments.  It also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination.  We expect this new guidance will result in an increase in our allowance for credit losses; the magnitude of which is under evaluation.  This accounting guidance is effective for us on April 1, 2020.  We are currently evaluating the other potential impacts of this guidance on our consolidated financial statements.

In August 2016, the FASB issued new guidance that is intended to reduce diversity in practice in the classification of certain items in the statement of cash flows. This accounting guidance is effective for us on April 1, 2018.  The adoption of this guidance is not expected to have a material impact on our consolidated financial statements and related disclosures.

In November 2016, the FASB issued new guidance that clarifies how restricted cash and cash equivalents should be classified and presented in the statement of cash flows and requires new disclosures related to restricted cash and cash equivalents.  This guidance was intended to reduce diversity in practice in the classification of restricted cash and cash equivalents on the statement of cash flows.  This accounting guidance is effective for us on April 1, 2018 at which time we will no longer report the change in restricted cash and cash equivalents in the operating or investing sections in our Consolidated Statements of Cash Flows, and cash and cash equivalents at the beginning and end of the period will include restricted cash and cash equivalents.  These changes will be applied using a retrospective transition method to each period presented.

In March 2017, the FASB issued new guidance that requires certain premiums on callable debt securities to be amortized to the earliest call date.  This accounting guidance is effective for us on April 1, 2019.  We are currently evaluating the potential impact of this guidance on our consolidated financial statements.

8

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 1 – Interim Financial Data (Continued)

In August 2017, the FASB issued new guidance that makes targeted improvements to accounting for hedging activities.  This guidance eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires, for qualifying hedges, the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. The guidance provides new alternatives for applying hedge accounting and measuring the hedged item in fair value hedges of interest rate risk.  The guidance also modifies the accounting for components excluded from the assessment of hedge effectiveness, eases documentation and assessment requirements and modifies certain disclosure requirements.  This accounting guidance is effective for us on April 1, 2019.  We are currently evaluating the potential impact of this guidance on our consolidated financial statements and disclosures.

Recently Adopted Accounting Guidance

In April 2017, we adopted new FASB accounting guidance which clarifies that a change in the counterparty to a designated derivative hedging instrument does not, in and of itself, require de-designation of that hedging relationship provided that all other hedge accounting criteria continue to be met.  The adoption of this guidance did not have an impact on our consolidated financial statements.

In April 2017, we adopted new FASB accounting guidance which clarifies whether an embedded contingent put or call option is clearly and closely related to the debt host when bifurcating an embedded derivative.  The adoption of this guidance did not have an impact on our consolidated financial statements.

In April 2017, we adopted new FASB accounting guidance that further amends the analysis a reporting entity must perform to determine whether it should consolidate certain legal entities.  This guidance specifically addresses interests held through related parties that are under common control.  The adoption of this guidance did not change our consolidation conclusions and therefore did not have an impact on our consolidated financial statements.

9

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 2 – 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 in our Consolidated Balance Sheets.  

	September 30, 2017
									Counterparty
									netting &			Fair
	Level 1		Level 2			Level 3			collateral			value
Cash equivalents:
Money market instruments	$	447	$	1,251		$	-		$	-		$	1,698
Certificates of deposit		-		2,700			-			-			2,700
Cash equivalents total		447		3,951			-			-			4,398
Available-for-sale securities:
Debt instruments:
U.S. government and agency obligations		2,538		30			-			-			2,568
Municipal debt securities		-		11			-			-			11
Certificates of deposit		-		875			-			-			875
Commercial paper		-		5			-			-			5
Corporate debt securities		146		197			8			-			351
Mortgage-backed securities:
U.S. government agency		-		42			-			-			42
Non-agency residential		-		-			2			-			2
Non-agency commercial		-		-			38			-			38
Asset-backed securities		-		-			36			-			36
Equity instruments:
Fixed income mutual funds:
Fixed income mutual funds measured at net asset value													669
Total return bond funds		1,531		-			-			-			1,531
Available-for-sale securities total		4,215		1,160			84			-			6,128
Derivative assets:
Interest rate swaps		-		426			-			-			426
Interest rate floors		-		1			-			-			1
Foreign currency swaps		-		314			-			-			314
Counterparty netting and collateral		-		-			-			(679	)		(679	)
Derivative assets total		-		741			-			(679	)		62
Assets at fair value		4,662		5,852			84			(679	)		10,588
Derivative liabilities:
Interest rate swaps		-		(244	)		(12	)		-			(256	)
Foreign currency swaps		-		(360	)		-			-			(360	)
Counterparty netting and collateral		-		-			-			600			600
Liabilities at fair value		-		(604	)		(12	)		600			(16	)
Net assets at fair value	$	4,662	$	5,248		$	72		$	(79	)	$	10,572

10

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 2 – Fair Value Measurements (Continued)

	March 31, 2017
									Counterparty
									netting &			Fair
	Level 1		Level 2			Level 3			collateral			value
Cash equivalents:
Money market instruments	$	287	$	1,045		$	-		$	-		$	1,332
Certificates of deposit		-		2,630			-			-			2,630
Cash equivalents total		287		3,675			-			-			3,962
Available-for-sale securities:
Debt instruments:
U.S. government and agency obligations		2,273		33			2			-			2,308
Municipal debt securities		-		11			-			-			11
Certificates of deposit		105		650			-			-			755
Corporate debt securities		211		150			8			-			369
Mortgage-backed securities:
U.S. government agency		-		45			-			-			45
Non-agency residential		-		-			2			-			2
Non-agency commercial		-		-			37			-			37
Asset-backed securities		-		-			31			-			31
Equity instruments:
Fixed income mutual funds:
Fixed income mutual funds measured at net asset value													1,740
Total return bond funds		394		-			-			-			394
Available-for-sale securities total		2,983		889			80			-			5,692
Derivative assets:
Interest rate swaps		-		474			1			-			475
Interest rate floors		-		2			-			-			2
Foreign currency swaps		-		122			-			-			122
Counterparty netting and collateral		-		-			-			(548	)		(548	)
Derivative assets total		-		598			1			(548	)		51
Assets at fair value		3,270		5,162			81			(548	)		9,705
Derivative liabilities:
Interest rate swaps		-		(271	)		(6	)		-			(277	)
Foreign currency swaps		-		(1,114	)		(62	)		-			(1,176	)
Counterparty netting and collateral		-		-			-			1,407			1,407
Liabilities at fair value		-		(1,385	)		(68	)		1,407			(46	)
Net assets at fair value	$	3,270	$	3,777		$	13		$	859		$	9,659

11

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 2 – Fair Value Measurements (Continued)

Transfers between levels of the fair value hierarchy are recognized at the end of their respective reporting periods.  Transfers between levels of the fair value hierarchy during the three and six months ended September 30, 2017 and 2016 resulted from changes in the transparency of inputs and were not significant.

The following tables summarize the rollforward of all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs:

	Three Months Ended September 30, 2017
															Total net
															assets
	Available-for-sale securities											Derivative instruments, net			(liabilities)
									Total
	Corporate		Mortgage-			Asset-			available-			Interest
	debt		backed			backed			for-sale			rate
	securities		securities			securities			securities			swaps
Fair value, July 1, 2017	$	8	$	43		$	35		$	86		$	12		$	98
Total gains (losses)
Included in earnings		-		-			-			-			5			5
Included in other comprehensive income		-		-			1			1			-			1
Purchases, issuances, sales, and settlements
Purchases		-		-			5			5			-			5
Issuances		-		-			-			-			-			-
Sales		-		-			-			-			-			-
Settlements		-		(3	)		(5	)		(8	)		(29	)		(37	)
Transfers in to Level 3		-		-			-			-			-			-
Transfers out of Level 3		-		-			-			-			-			-
Fair value, September 30, 2017	$	8	$	40		$	36		$	84		$	(12	)	$	72
The amount of total gains   (losses) included in earnings   attributable to assets held   at the reporting date												$	5			5

	Three Months Ended September 30, 2016
																							Total net
																							assets
	Available-for-sale securities													Derivative instruments, net									(liabilities)
	U.S.										Total									Total
	government		Corporate		Mortgage-			Asset-			available-			Interest			Foreign			derivative
	and agency		debt		backed			backed			for-sale			rate			currency			assets
	obligations		securities		securities			securities			securities			swaps			swaps			(liabilities)
Fair value, July 1, 2016	$	2	$	7	$	45		$	35		$	89		$	62		$	(42	)	$	20		$	109
Total gains (losses)
Included in earnings		-		-		-			-			-			-			(8	)		(8	)		(8	)
Included in other comprehensive income		-		1		-			-			1			-			-			-			1
Purchases, issuances, sales, and settlements
Purchases		-		-		-			1			1			-			-			-			1
Issuances		-		-		-			-			-			-			-			-			-
Sales		-		-		-			-			-			-			-			-			-
Settlements		-		-		(4	)		(2	)		(6	)		(29	)		1			(28	)		(34	)
Transfers in to Level 3		-		-		-			-			-			-			-			-			-
Transfers out of Level 3		-		-		-			-			-			-			-			-			-
Fair value, September 30, 2016	$	2	$	8	$	41		$	34		$	85		$	33		$	(49	)	$	(16	)	$	69
The amount of total gains   (losses) included in earnings   attributable to assets held   at the reporting date														$	-		$	(8	)	$	(8	)	$	(8	)

12

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 2 – Fair Value Measurements (Continued)

	Six Months Ended September 30, 2017
																								Total net
																								assets
	Available-for-sale securities														Derivative instruments, net									(liabilities)
	U.S.											Total									Total
	government			Corporate		Mortgage-			Asset-			available-			Interest			Foreign			derivative
	and agency			debt		backed			backed			for-sale			rate			currency			assets
	obligations			securities		securities			securities			securities			swaps			swaps			(liabilities)
Fair value, April 1, 2017	$	2		$	8	$	39		$	31		$	80		$	(5	)	$	(62	)	$	(67	)	$	13
Total gains (losses)
Included in earnings		-			-		-			-			-			18			7			25			25
Included in other comprehensive income		-			-		-			1			1			-			-			-			1
Purchases, issuances, sales, and settlements
Purchases		-			-		5			16			21			-			-			-			21
Issuances		-			-		-			-			-			-			-			-			-
Sales		-			-		-			-			-			-			-			-			-
Settlements		-			-		(4	)		(12	)		(16	)		(25	)		55			30			14
Transfers in to Level 3		-			-		-			-			-			-			-			-			-
Transfers out of Level 3		(2	)		-		-			-			(2	)		-			-			-			(2	)
Fair value, September 30, 2017	$	-		$	8	$	40		$	36		$	84		$	(12	)	$	-		$	(12	)	$	72
The amount of total gains   (losses) included in earnings   attributable to assets held   at the reporting date															$	18		$	-		$	18		$	18

	Six Months Ended September 30, 2016
																							Total net
																							assets
	Available-for-sale securities													Derivative instruments, net									(liabilities)
	U.S.										Total									Total
	government		Corporate		Mortgage-			Asset-			available-			Interest			Foreign			derivative
	and agency		debt		backed			backed			for-sale			rate			currency			assets
	obligations		securities		securities			securities			securities			swaps			swaps			(liabilities)
Fair value, April 1, 2016	$	2	$	7	$	45		$	37		$	91		$	39		$	(14	)	$	25		$	116
Total gains (losses)
Included in earnings		-		-		-			-			-			20			(32	)		(12	)		(12	)
Included in other comprehensive income		-		1		1			-			2			-			-			-			2
Purchases, issuances, sales, and settlements
Purchases		-		-		-			3			3			-			-			-			3
Issuances		-		-		-			-			-			-			-			-			-
Sales		-		-		-			-			-			-			-			-			-
Settlements		-		-		(5	)		(6	)		(11	)		(26	)		(3	)		(29	)		(40	)
Transfers in to Level 3		-		-		-			-			-			-			-			-			-
Transfers out of Level 3		-		-		-			-			-			-			-			-			-
Fair value, September 30, 2016	$	2	$	8	$	41		$	34		$	85		$	33		$	(49	)	$	(16	)	$	69
The amount of total gains   (losses) included in earnings   attributable to assets held   at the reporting date														$	20		$	(32	)	$	(12	)	$	(12	)

13

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 2 – Fair Value Measurements (Continued)

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 September 30, 2017 and March 31, 2017.

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 change in the fair value measurements of these assets and liabilities, were not significant to our Consolidated Balance Sheets or Consolidated Statements of Income as of and for the three and six months ended September 30, 2017 and as of and for the year ended March 31, 2017.

14

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 2 – Fair Value Measurements (Continued)

Financial Instruments

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

	September 30, 2017
	Carrying								Total Fair
	value		Level 1		Level 2		Level 3		Value
Financial assets
Finance receivables, net
Retail loan	$	51,283	$	-	$	-	$	51,349	$	51,349
Wholesale		9,198		-		-		9,252		9,252
Real estate		4,637		-		-		4,560		4,560
Working capital		2,143		-		-		2,177		2,177
Financial liabilities
Commercial paper	$	25,247	$	-	$	25,247	$	-	$	25,247
Unsecured notes and loans payable		58,327		-		57,166		2,058		59,224
Secured notes and loans payable		14,649		-		-		14,672		14,672

	March 31, 2017
	Carrying								Total Fair
	value		Level 1		Level 2		Level 3		Value
Financial assets
Finance receivables, net
Retail loan	$	50,682	$	-	$	-	$	50,733	$	50,733
Wholesale		10,819		-		-		10,881		10,881
Real estate		4,602		-		-		4,459		4,459
Working capital		2,218		-		-		2,222		2,222
Financial liabilities
Commercial paper	$	26,632	$	-	$	26,632	$	-	$	26,632
Unsecured notes and loans payable		57,282		-		55,838		2,385		58,223
Secured notes and loans payable		14,319		-		-		14,322		14,322

The carrying value of each class of finance receivables includes accrued interest and deferred fees and costs, net of deferred income and the allowance for credit losses.  Finance receivables, net, excludes related party transactions, for which the fair value approximates the carrying value, of $131 million and $136 million at September 30, 2017 and March 31, 2017, respectively.

15

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 3 – Investments in Marketable Securities

We classify all of our investments in marketable securities as available-for-sale.  The amortized cost and estimated fair value of investments in marketable securities and related unrealized gains and losses were as follows:

	September 30, 2017
	Amortized		Unrealized		Unrealized			Fair
	cost		gains		losses			value
Available-for-sale securities:
Debt instruments:
U.S. government and agency obligations	$	2,576	$	-	$	(8	)	$	2,568
Municipal debt securities		9		2		-			11
Certificates of deposit		875		-		-			875
Commercial paper		5		-		-			5
Corporate debt securities		347		5		(1	)		351
Mortgage-backed securities:
U.S. government agency		41		1		-			42
Non-agency residential		1		1		-			2
Non-agency commercial		38		-		-			38
Asset-backed securities		36		-		-			36
Equity instruments:
Fixed income mutual funds:
Short-term floating NAV fund II		30		-		-			30
U.S. government sector fund		189		5		(1	)		193
Municipal sector fund		8		-		-			8
Investment grade corporate sector fund		95		1		-			96
High-yield sector fund		30		3		-			33
Real return sector fund		5		-		-			5
Mortgage sector fund		146		3		-			149
Asset-backed securities sector fund		56		2		-			58
Emerging market sector fund		38		4		-			42
International sector fund		54		1		-			55
Total return bond funds		1,510		21		-			1,531
Total investments in marketable securities	$	6,089	$	49	$	(10	)	$	6,128

16

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 3 – Investments in Marketable Securities (Continued)

	March 31, 2017
	Amortized		Unrealized		Unrealized			Fair
	cost		gains		losses			value
Available-for-sale securities:
Debt instruments:
U.S. government and agency obligations	$	2,314	$	1	$	(7	)	$	2,308
Municipal debt securities		10		1	-				11
Certificates of deposit		755	-		-				755
Corporate debt securities		368		2		(1	)		369
Mortgage-backed securities:
U.S. government agency		45		1		(1	)		45
Non-agency residential		2	-		-				2
Non-agency commercial		37		1		(1	)		37
Asset-backed securities		31	-		-				31
Equity instruments:
Fixed income mutual funds:
Short-term floating NAV fund II		39	-		-				39
U.S. government sector fund		389	-		-				389
Municipal sector fund		20	-		-				20
Investment grade corporate sector fund		252		9	-				261
High-yield sector fund		83		6	-				89
Real return sector fund		147		5	-				152
Mortgage sector fund		390		2	-				392
Asset-backed securities sector fund		140		10	-				150
Emerging market sector fund		105		7	-				112
International sector fund		136	-		-				136
Total return bond funds		389		5	-				394
Total investments in marketable securities	$	5,652	$	50	$	(10	)	$	5,692

The Fixed income mutual funds, exclusive of the Total return bond funds, are investments in funds that are privately placed and managed by an open-end investment management company (the “Trust”).  If we elect to redeem shares, the Trust will normally redeem all shares for cash, but may, in unusual circumstances, redeem amounts exceeding the lesser of $250 thousand or 1 percent of the Trust’s asset value by payment in kind of securities held by the respective fund during any 90-day period.

The Total return bond funds are investments in actively traded open-end mutual funds.  Redemptions are subject to normal terms and conditions as described in each fund’s prospectus.

17

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 3 – Investments in Marketable Securities (Continued)

Unrealized Losses on Securities

Investments in marketable securities in a continuous loss position for less than twelve months and for greater than twelve months were not significant as of September 30, 2017 and March 31, 2017.

Realized Gains and Losses on Securities

The following table represents realized gains and losses on our available-for-sale securities presented in our Consolidated Statements of Income:

	Three Months Ended					Six Months Ended
	September 30,					September 30,
	2017		2016			2017			2016
Available-for-sale securities:
Realized gains on sales	$	1	$	80		$	43		$	93
Realized losses on sales	$	-	$	-		$	(1	)	$	-
Other-than-temporary impairment	$	-	$	(10	)	$	-		$	(10	)

Contractual Maturities

The amortized cost, fair value, and contractual maturities of available-for-sale debt instruments are summarized in the following table.  Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay certain obligations.

	September 30, 2017
	AmortizedCost		Fair Value
Available-for-sale debt instruments:
Due within 1 year	$	1,980	$	1,978
Due after 1 year through 5 years		1,606		1,604
Due after 5 years through 10 years		142		142
Due after 10 years		84		86
Mortgage-backed and asset-backed securities1		116		118
Total	$	3,928	$	3,928

¹ Mortgage-backed and asset-backed securities are shown separately from other maturity groupings as these securities do not have a single maturity date.

18

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 4 – Finance Receivables, Net

Finance receivables, net consist of retail receivables and dealer financing, which includes accrued interest and deferred fees and costs, net of the allowance for credit losses and deferred income.  Finance receivables, net also includes securitized retail receivables, which represent retail receivables that have been sold for legal purposes to securitization trusts but continue to be included in our consolidated financial statements, as discussed further in Note 10 – Variable Interest Entities.  Cash flows from these securitized retail receivables are available only for the repayment of debt issued by these trusts and other obligations arising from the securitization transactions.  They are not available for payment of our other obligations or to satisfy claims of our other creditors.

Finance receivables, net consisted of the following:

	September 30,			March 31,
	2017			2017
Retail receivables	$	39,732		$	38,338
Securitized retail receivables		12,423			13,071
Dealer financing		16,231			17,899
		68,386			69,308
Deferred origination (fees) and costs, net		642			644
Deferred income		(1,150	)		(1,023	)
Allowance for credit losses
Retail and securitized retail receivables		(359	)		(344	)
Dealer financing		(123	)		(123	)
Total allowance for credit losses		(482	)		(467	)
Finance receivables, net	$	67,396		$	68,462

Credit Quality Indicators

We are exposed to credit risk on our finance receivables.  Credit risk is the risk of loss arising from the failure of customers or dealers to meet the terms of their contracts with us or otherwise fail to perform as agreed.

Retail Loan Portfolio Segment

The retail loan portfolio segment consists of one class of finance receivables. While we use various credit quality metrics to develop our allowance for credit losses on the retail loan portfolio segment, we primarily utilize the aging of the individual accounts to monitor the credit quality of these finance receivables.  Based on our experience, the payment status of borrowers is the strongest indicator of the credit quality of the underlying receivables.  Payment status also impacts charge-offs.

Individual borrower accounts within the retail loan segment are segregated into aging categories based on the number of days outstanding.  The aging for each class of finance receivables is updated monthly.

19

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 4 – Finance Receivables, Net (Continued)

Dealer Products Portfolio Segment

For the three classes of finance receivables within the dealer products portfolio segment (wholesale, real estate and working capital), all loans outstanding for an individual dealer or dealer group, which includes affiliated entities, are aggregated and evaluated collectively by dealer or dealer group.  This reflects the interconnected nature of financing provided to our individual dealer and dealer group customers, and their affiliated entities.

When assessing the credit quality of the finance receivables within the dealer products portfolio segment, we segregate the finance receivables account balances into four categories representing distinct credit quality indicators based on internal risk assessments.  The internal risk assessments for all finance receivables within the dealer products portfolio segment are updated on a monthly basis.

The four credit quality indicators are:

• Performing – Account not classified as either Credit Watch, At Risk or Default

• Credit Watch – Account designated for elevated attention

• At Risk – Account where there is an increased likelihood that default may exist based on qualitative and quantitative factors

• Default – Account is not currently meeting contractual obligations or we have temporarily waived certain contractual requirements

The tables below present each credit quality indicator by class of finance receivables:

	Retail Loan
	September 30,		March 31,
	2017		2017
Aging of finance receivables:
Current	$	51,204	$	50,631
30-59 days past due		691		586
60-89 days past due		179		129
90 days or greater past due		81		63
Total	$	52,155	$	51,409

	Wholesale				Real Estate				Working Capital
	September 30,		March 31,		September 30,		March 31,		September 30,		March 31,
	2017		2017		2017		2017		2017		2017
Credit quality indicators:
Performing	$	8,123	$	9,592	$	3,993	$	4,010	$	2,020	$	2,082
Credit Watch		1,094		1,269		660		613		129		143
At Risk		55		12		55		45		22		5
Default		42		78		34		45		4		5
Total	$	9,314	$	10,951	$	4,742	$	4,713	$	2,175	$	2,235

20

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 4 – Finance Receivables, Net (Continued)

Impaired Finance Receivables

The following table summarizes the information related to our impaired loans by class of finance receivables: 

	Impaired								Individually Evaluated
	Finance Receivables				Unpaid Principal Balance				Allowance
	September 30,		March 31,		September 30,		March 31,		September 30,		March 31,
	2017		2017		2017		2017		2017		2017
Impaired account balances individually evaluated for impairment with an allowance:
Wholesale	$	75	$	93	$	75	$	93	$	13	$	12
Real estate		88		94		88		94		9		12
Working capital		44		31		44		31		23		9
Total	$	207	$	218	$	207	$	218	$	45	$	33
Impaired account balances individually evaluated for impairment without an allowance:
Wholesale	$	98	$	134	$	98	$	134
Real estate		98		105		98		105
Working capital		-		-		-		-
Total	$	196	$	239	$	196	$	239
Impaired account balances aggregated and evaluated for impairment:
Retail loan	$	220	$	220	$	218	$	217
Total	$	220	$	220	$	218	$	217
Total impaired account balances:
Retail loan	$	220	$	220	$	218	$	217
Wholesale		173		227		173		227
Real estate		186		199		186		199
Working capital		44		31		44		31
Total	$	623	$	677	$	621	$	674

As of September 30, 2017 and March 31, 2017, the impaired finance receivables balance for accounts in the dealer products portfolio segment that were on nonaccrual status was $220 million and $251 million, respectively, and there were no charge-offs against the allowance for credit losses for these finance receivables.  Therefore, the impaired finance receivables balance is equal to the unpaid principal balance.  As of September 30, 2017 and March 31, 2017, impaired finance receivables in the retail portfolio segment recorded at the fair value of the collateral less estimated selling costs were not significant and therefore excluded from the table above.  Refer to Note 6 – Allowance for Credit Losses for details related to the retail loan portfolio segment’s impaired account balances which are aggregated and evaluated for impairment when determining the allowance for credit losses.

21

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 4 – Finance Receivables, Net (Continued)

The following table summarizes the average impaired loans by class of finance receivables as of the balance sheet date and the interest income recognized on these loans:

	Average Impaired FinanceReceivables								Interest Income Recognized
	Three Months Ended September 30,				Six Months Ended September 30,				Three Months Ended September 30,				Six Months Ended September 30,
	2017		2016		2017		2016		2017		2016		2017		2016
Impaired account balances individually evaluated for impairment with an allowance:
Wholesale	$	101	$	59	$	98	$	72	$	-	$	1	$	1	$	1
Real estate		91		87		92		98		1		-		2		1
Working capital		44		33		40		34		1		1		1		1
Total	$	236	$	179	$	230	$	204	$	2	$	2	$	4	$	3
Impaired account balances individually evaluated for impairment without an allowance:
Wholesale	$	116	$	160	$	122	$	168	$	1	$	-	$	2	$	2
Real estate		97		112		100		108		1		2		2		3
Working capital		-		-		-		1		-		-		-		-
Total	$	213	$	272	$	222	$	277	$	2	$	2	$	4	$	5
Impaired account balances aggregated and evaluated for impairment:
Retail loan	$	222	$	224	$	221	$	225	$	4	$	4	$	8	$	8
Total	$	222	$	224	$	221	$	225	$	4	$	4	$	8	$	8
Total impaired account balances:
Retail loan	$	222	$	224	$	221	$	225	$	4	$	4	$	8	$	8
Wholesale		217		219		220		240		1		1		3		3
Real estate		188		199		192		206		2		2		4		4
Working capital		44		33		40		35		1		1		1		1
Total	$	671	$	675	$	673	$	706	$	8	$	8	$	16	$	16

The primary source of interest income recognized on the loans in the table above is from performing troubled debt restructurings.  Interest income recognized using a cash-basis method of accounting during the three and six months ended September 30, 2017 and 2016 was not significant.

22

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 4 – Finance Receivables, Net (Continued)

Troubled Debt Restructuring

For accounts not under bankruptcy protection, the amount of finance receivables modified as a troubled debt restructuring during the three and six months ended September 30, 2017 and 2016 was not significant for each class of finance receivables.  Troubled debt restructurings for non-bankrupt accounts within the retail loan class of finance receivables are comprised exclusively of contract term extensions that reduce the monthly payment due from the customer.  For the three classes of finance receivables within the dealer products portfolio segment, troubled debt restructurings include contract term extensions, interest rate adjustments, waivers of loan covenants, or any combination of the three.  Troubled debt restructurings of accounts not under bankruptcy protection did not include forgiveness of principal or interest rate adjustments during the three and six months ended September 30, 2017 and 2016.

We consider finance receivables under bankruptcy protection within the retail loan class to be troubled debt restructurings as of the date we receive notice of a customer filing for bankruptcy protection, regardless of the ultimate outcome of the bankruptcy proceedings.  The bankruptcy court may impose modifications as part of the proceedings, including interest rate adjustments and forgiveness of principal.  For the three and six months ended September 30, 2017 and 2016, the financial impact of troubled debt restructurings related to finance receivables under bankruptcy protection was not significant to our Consolidated Statements of Income and Consolidated Balance Sheets. 

Payment Defaults

Finance receivables modified as troubled debt restructurings for which there was a subsequent payment default during the three and six months ended September 30, 2017 and 2016, and for which the modification occurred within twelve months of the payment default, were not significant for all classes of such receivables.

23

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 5 – Investments in Operating Leases, Net

Investments in operating leases, net consist of leases, net of deferred fees and costs, deferred income, accumulated depreciation and the allowance for credit losses.  Securitized investments in operating leases represent beneficial interests in a pool of certain vehicle leases that have been sold for legal purposes to securitization trusts but continue to be included in our consolidated financial statements as discussed further in Note 10 - Variable Interest Entities.  Cash flows from these securitized investments in operating leases are available only for the repayment of debt issued by these trusts and other obligations arising from the securitization transactions.  They are not available for payment of our other obligations or to satisfy claims of our other creditors.

Investments in operating leases, net consisted of the following:

	September 30,			March 31,
	2017			2017
Investments in operating leases	$	40,783		$	41,874
Securitized investments in operating leases		9,105			6,502
		49,888			48,376
Deferred origination (fees) and costs, net		(218	)		(201	)
Deferred income		(1,447	)		(1,196	)
Accumulated depreciation		(9,246	)		(8,672	)
Allowance for credit losses		(154	)		(155	)
Investments in operating leases, net	$	38,823		$	38,152

24

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 6 – Allowance for Credit Losses

The following table provides information related to our allowance for credit losses on finance receivables and investments in operating leases:

	Three Months Ended						Six Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Allowance for credit losses at beginning of period	$	611		$	489		$	622		$	535
Provision for credit losses		127			161			212			213
Charge-offs, net of recoveries		(102	)		(124	)		(198	)		(222	)
Allowance for credit losses at end of period	$	636		$	526		$	636		$	526

Charge-offs are shown net of recoveries of $22 million and $45 million for the three and six months ended September 30, 2017, respectively, and recoveries of $20 million and $40 million for the three and six months ended September 30, 2016 , respectively.

25

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 6 – Allowance for Credit Losses (Continued)

Allowance for Credit Losses and Finance Receivables by Portfolio Segment

The following tables provide information related to our allowance for credit losses for finance receivables and finance receivables by portfolio segment:

	Three Months Ended September 30, 2017
	Retail Loan			DealerProducts			Total
Allowance for Credit Losses for Finance Receivables:
Beginning balance, July 1, 2017	$	322		$	131		$	453
Charge-offs		(86	)		-			(86	)
Recoveries		13			-			13
Provisions		110			(8	)		102
Ending balance, September 30, 2017	$	359		$	123		$	482
	Six Months Ended September 30, 2017
	Retail Loan			DealerProducts			Total
Beginning balance, April 1, 2017	$	344		$	123		$	467
Charge-offs		(165	)		-			(165	)
Recoveries		26			-			26
Provisions		154			-			154
Ending balance, September 30, 2017	$	359		$	123		$	482
Allowance for Credit Losses for Finance Receivables:
Ending balance: Individually evaluated for impairment	$	-		$	45		$	45
Ending balance: Collectively evaluated for impairment	$	359		$	78		$	437
Finance Receivables:
Ending balance, September 30, 2017	$	52,155		$	16,231		$	68,386
Ending balance: Individually evaluated for impairment	$	-		$	403		$	403
Ending balance: Collectively evaluated for impairment	$	52,155		$	15,828		$	67,983

The ending balance of finance receivables collectively evaluated for impairment in the above table includes approximately $220 million of finance receivables within the retail loan portfolio segment that are specifically identified as impaired.  These amounts are aggregated within their respective portfolio segment when determining the allowance for credit losses as of September 30, 2017, as they are deemed to be insignificant for individual evaluation, and we have determined that the allowance for credit losses is not significant and would not be materially different if the amounts had been individually evaluated for impairment. The ending balance of finance receivables for the dealer products portfolio segment collectively evaluated for impairment as of September 30, 2017 includes $1,086 million in finance receivables that are guaranteed by Toyota Motor Sales, U.S.A., Inc. (“TMS”), and $175 million in finance receivables that are guaranteed by third party private Toyota distributors.  These finance receivables are related to certain Toyota and Lexus dealers and other third parties to whom we provided financing at the request of TMS and third party private Toyota distributors.

26

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 6 – Allowance for Credit Losses (Continued)

	Three Months Ended September 30, 2016
	Retail Loan			DealerProducts			Total
Allowance for Credit Losses for Finance Receivables:
Beginning balance, July 1, 2016	$	278		$	88		$	366
Charge-offs		(99	)		-			(99	)
Recoveries		13			-			13
Provisions		103			6			109
Ending balance, September 30, 2016	$	295		$	94		$	389
	Six Months Ended September 30, 2016
	Retail Loan			DealerProducts			Total
Beginning balance, April 1, 2016	$	289		$	132		$	421
Charge-offs		(181	)		-			(181	)
Recoveries		26			-			26
Provisions		161			(38	)		123
Ending balance, September 30, 2016	$	295		$	94		$	389
Allowance for Credit Losses for Finance Receivables:
Ending balance: Individually evaluated for impairment	$	-		$	27		$	27
Ending balance: Collectively evaluated for impairment	$	295		$	67		$	362
Finance Receivables:
Ending balance, September 30, 2016	$	50,711		$	15,445		$	66,156
Ending balance: Individually evaluated for impairment	$	-		$	435		$	435
Ending balance: Collectively evaluated for impairment	$	50,711		$	15,010		$	65,721

The ending balance of finance receivables collectively evaluated for impairment in the above table includes approximately $224 million of finance receivables within the retail loan portfolio segment that are specifically identified as impaired.  These amounts are aggregated within their respective portfolio segment when determining the allowance for credit losses as of September 30, 2016, as they are deemed to be insignificant for individual evaluation and we have determined that the allowance for credit losses is not significant and would not be materially different if the amounts had been individually evaluated for impairment.  The ending balance of finance receivables for the dealer products portfolio segment collectively evaluated for impairment as of September 30, 2016 includes $1,054 million in finance receivables that are guaranteed by TMS, and $158 million in finance receivables that are guaranteed by third party private Toyota distributors.  These finance receivables are related to certain Toyota and Lexus dealers and other third parties to whom we provided financing at the request of TMS and third party private Toyota distributors.

27

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 6 – Allowance for Credit Losses (Continued)

Past Due Finance Receivables and Investments in Operating Leases

The following table shows aggregate balances of finance receivables and investments in operating leases 60 or more days past due:

	September 30,		March 31,
	2017		2017
Aggregate balances 60 or more days past due
Finance receivables	$	260	$	192
Investments in operating leases		123		95
Total	$	383	$	287

Substantially all finance receivables and investments in operating leases do not involve recourse to the dealer in the event of customer default.  Finance receivables and investments in operating leases 60 or more days past due include contracts in bankruptcy and contracts greater than 120 days past due, which are recorded at the fair value of collateral less estimated costs to sell.  Contracts for which vehicles have been repossessed are excluded.

Past Due Finance Receivables by Class

The following tables summarize the aging of finance receivables by class:

	September 30, 2017
	30 - 59 Days Past Due		60 - 89 Days Past Due		90Daysor Greater Past Due		TotalPast Due		Current		TotalFinance Receivables		90 Days or GreaterPast Due and Accruing
Retail loan	$	691	$	179	$	81	$	951	$	51,204	$	52,155	$	59
Wholesale		-		-		-		-		9,314		9,314		-
Real estate		-		-		-		-		4,742		4,742		-
Working capital		-		-		-		-		2,175		2,175		-
Total	$	691	$	179	$	81	$	951	$	67,435	$	68,386	$	59

	March 31, 2017
	30 - 59 Days Past Due		60 - 89 Days Past Due		90Daysor Greater Past Due		TotalPast Due		Current		TotalFinance Receivables		90Daysor GreaterPast Due and Accruing
Retail loan	$	586	$	129	$	63	$	778	$	50,631	$	51,409	$	41
Wholesale		-		-		-		-		10,951		10,951		-
Real estate		-		-		-		-		4,713		4,713		-
Working capital		3		-		-		3		2,232		2,235		-
Total	$	589	$	129	$	63	$	781	$	68,527	$	69,308	$	41

28

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 7 – Derivatives, Hedging Activities and Interest Expense

Derivative Instruments

Our liabilities consist mainly of fixed and floating rate debt, denominated in U.S. dollars and various other currencies, which we issue in the global capital markets, while our assets consist primarily of U.S. dollar denominated, fixed rate receivables.  We enter into interest rate swaps, interest rate floors, interest rate caps and foreign currency swaps to hedge the interest rate and foreign currency risks that result from the different characteristics of our assets and liabilities.  Our use of derivative transactions is intended to reduce long-term fluctuations in the fair value of assets and liabilities caused by market movements.  All of our derivative activities are authorized and monitored by our management and our Asset Liability Committee which provides a framework for financial controls and governance to manage market risk.

Credit Risk Related Contingent Features

Our derivative contracts are governed by International Swaps and Derivatives Association (“ISDA”) Master Agreements.  Substantially all of these ISDA Master Agreements contain reciprocal ratings triggers providing either party with an option to terminate the agreement at market value in the event of a ratings downgrade of the other party below a specified threshold.  As of September 30, 2017, we have daily valuation and collateral exchange arrangements with all of our counterparties.  Our collateral agreements with substantially all of our counterparties include a zero threshold, full collateralization arrangement.  However, due to the time required to move collateral, there may be a delay of up to one day between the exchange of collateral and the valuation of our derivatives.  We would not be required to post additional collateral to the counterparties with whom we were in a net liability position at September 30, 2017 if our credit ratings were to decline, since we fully collateralize without regard to credit ratings with these counterparties.  

29

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 7 – Derivatives, Hedging Activities and Interest Expense (Continued)

Derivative Activity Impact on Financial Statements

The following tables show the financial statement line item and amount of our derivative assets and liabilities that are reported in our Consolidated Balance Sheets:

	September 30, 2017
	Hedge accounting				Non-hedge
	derivatives				accountingderivatives				Total
			Fair				Fair				Fair
	Notional		value		Notional		value		Notional		value
Other assets:
Interest rate swaps	$	-	$	-	$	64,717	$	426	$	64,717	$	426
Interest rate floors		-		-		847		1		847		1
Foreign currency swaps		271		21		5,519		293		5,790		314
Total	$	271	$	21	$	71,083	$	720	$	71,354	$	741
Counterparty netting and collateral held												(679	)
Carrying value of derivative    contracts – Other assets											$	62
Other liabilities:
Interest rate swaps	$	-	$	-	$	47,224	$	256	$	47,224	$	256
Interest rate caps		-		-		30		-		30		-
Foreign currency swaps		93		3		6,651		357		6,744		360
Total	$	93	$	3	$	53,905	$	613	$	53,998	$	616
Counterparty netting and collateral posted												(600	)
Carrying value of derivative    contracts – Other liabilities											$	16

As of September 30, 2017, we held collateral of $309 million, which offset derivative assets, and posted collateral of $230 million, which offset derivative liabilities.  We also held excess collateral of $7 million, which we did not use to offset derivative assets, and we posted excess collateral of $4 million which we did not use to offset derivative liabilities.   

30

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 7 – Derivatives, Hedging Activities and Interest Expense (Continued)

	March 31, 2017
	Hedge accounting				Non-hedge
	derivatives				accountingderivatives				Total
			Fair				Fair				Fair
	Notional		value		Notional		value		Notional		value
Other assets:
Interest rate swaps	$	-	$	-	$	62,525	$	475	$	62,525	$	475
Interest rate floors		-		-		1,673		2		1,673		2
Foreign currency swaps		271		28		1,648		94		1,919		122
Total	$	271	$	28	$	65,846	$	571	$	66,117	$	599
Counterparty netting and collateral held												(548	)
Carrying value of derivative    contracts – Other assets											$	51
Other liabilities:
Interest rate swaps	$	-	$	-	$	45,297	$	277	$	45,297	$	277
Interest rate caps		-		-		30		-		30		-
Foreign currency swaps		93		1		12,570		1,175		12,663		1,176
Total	$	93	$	1	$	57,897	$	1,452	$	57,990	$	1,453
Counterparty netting and collateral posted												(1,407	)
Carrying value of derivative    contracts – Other liabilities											$	46

As of March 31, 2017, we held collateral of $154 million which offset derivative assets, and posted collateral of $1,013 million which offset derivative liabilities.  We also held excess collateral of $5 million which we did not use to offset derivative assets, and we posted excess collateral of $5 million which we did not use to offset derivative liabilities.

31

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 7 – Derivatives, Hedging Activities and Interest Expense (Continued)

The following table summarizes the components of interest expense, including the location and amount of gains and losses on derivative instruments and related hedged items, as reported in our Consolidated Statements of Income:

	Three Months Ended						Six Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Interest expense on debt	$	484		$	377		$	951		$	736
Interest income on derivatives		(18	)		(5	)		(34	)		(7	)
Interest expense on debt and derivatives, net		466			372			917			729
Loss (gain) on hedge accounting derivatives:
Foreign currency swaps		3			(4	)		10			(37	)
Loss (gain) on hedge accounting derivatives		3			(4	)		10			(37	)
Less hedged item:  change in fair value of fixed rate   debt denominated in a foreign currency		(3	)		4			(10	)		37
Ineffectiveness related to hedge accounting derivatives		-			-			-			-
Loss (gain) on debt denominated in foreign currencies    and U.S. dollar non-hedge accounting derivatives:
Loss (gain) on non-hedge accounting debt denominated   in foreign currencies		373			156			1,023			(62	)
(Gain) loss on non-hedge accounting foreign currency swaps		(383	)		(156	)		(1,033	)		32
Gain on U.S. dollar non-hedge accounting interest   rate swaps		(4	)		(75	)		(7	)		(95	)
Total interest expense	$	452		$	297		$	900		$	604

Interest expense on debt and derivatives represents net interest settlements and changes in accruals.  Gains and losses on hedge accounting derivatives and debt denominated in foreign currencies exclude net interest settlements and changes in accruals.  Cash flows associated with hedge accounting, non-hedge accounting, and de-designated derivatives are reported in Net cash provided by operating activities in our Consolidated Statements of Cash Flows.

The relative fair value allocation of derivative credit value adjustments for counterparty and non-performance credit risk within interest expense was not significant for the three and six months ended September 30, 2017 and 2016 as we are fully collateralized on substantially all of our derivatives without regard to credit ratings.

32

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 8 – Other Assets and Other Liabilities

Other assets and other liabilities consisted of the following:

	September 30,		March 31,
	2017		2017
Other assets:
Notes receivable from affiliates	$	591	$	823
Used vehicles held for sale		298		264
Income taxes receivable		81		-
Derivative assets		62		51
Other assets		1,011		906
Total other assets	$	2,043	$	2,044
Other liabilities:
Unearned insurance premiums and contract revenues	$	2,226	$	2,154
Accounts payable and accrued expenses		1,020		1,057
Deferred income		485		468
Income taxes payable		-		62
Derivative liabilities		16		46
Other liabilities		175		165
Total other liabilities	$	3,922	$	3,952

33

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 9 – Debt

Debt and the related weighted average contractual interest rates are summarized as follows:

					Weighted average
					contractual interest rates
	September 30,		March 31,		September 30,			March 31,
	2017		2017		2017			2017
Commercial paper	$	25,247	$	26,632		1.28	%		1.11	%
Unsecured notes and loans payable		58,327		57,282		2.02	%		1.91	%
Secured notes and loans payable		14,649		14,319		1.58	%		1.32	%
Total debt	$	98,223	$	98,233		1.76	%		1.60	%

The carrying value of our debt includes unamortized premiums, discounts and debt issuance costs of $313 million and $307 million as of September 30, 2017 and March 31, 2017, respectively.  The face value of commercial paper, unsecured notes and loans payable and secured notes and loans payable was $25.3 billion, $58.6 billion, and $14.7 billion, respectively, as of September 30, 2017, and $26.7 billion, $57.4 billion and $14.3 billion, respectively, as of March 31, 2017.

As of September 30, 2017, our commercial paper had a weighted average remaining maturity of 99 days, while our unsecured and secured notes and loans payable mature on various dates through fiscal 2047.  Weighted average contractual interest rates are calculated based on original notional or par value before consideration of premium or discount.

Our unsecured notes and loans payable consist of both fixed and variable rate debt with contractual interest rates ranging from 0.0 percent to 5.8 percent at September 30, 2017 and March 31, 2017.  Upon issuance of fixed rate notes, we generally elect to enter into interest rate swaps to convert fixed rate payments on notes to floating rate payments.

Our unsecured notes and loans payable contain covenants and conditions customary in transactions of this nature, including negative pledge provisions, cross-default provisions and limitations on certain consolidations, mergers and sales of assets.  We are currently in compliance with these covenants and conditions.

Certain unsecured notes and loans payable are denominated in various foreign currencies, and include the impact of translation adjustments.  At September 30, 2017 and March 31, 2017, the carrying values of these foreign currency denominated unsecured notes and loans payable were $12.3 billion and $13.3 billion, respectively.  Concurrent with the issuance of these foreign currency unsecured notes and loans payable, we entered into currency swaps in the same notional amount to convert non-U.S. currency payments to U.S. dollar denominated payments.

Our secured notes and loans payable are denominated in U.S. dollars and consist of both fixed and variable rate debt with contractual interest rates ranging from 0.9 percent to 2.1 percent at September 30, 2017 and 0.8 percent to 2.1 percent at March 31, 2017.  Secured notes and loans payable are issued using on-balance sheet securitization trusts, as further discussed in Note 10 – Variable Interest Entities.  These notes are repayable only from collections on the underlying securitized retail finance receivables and the beneficial interests in investments in operating leases and from related credit enhancements.

34

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 10 – Variable Interest Entities

Consolidated Variable Interest Entities

We use one or more special purpose entities that are considered Variable Interest Entities (“VIEs”) to issue asset-backed securities to third party bank-sponsored asset-backed securitization vehicles and to investors in securitization transactions.  The securities issued by these VIEs are backed by the cash flows related to retail finance receivables and beneficial interests in investments in operating leases (“Securitized Assets”).  We hold variable interests in the VIEs that could potentially be significant to the VIEs.  We determined that we are the primary beneficiary of the securitization trusts because (i) our servicing responsibilities for the Securitized Assets give us the power to direct the activities that most significantly impact the performance of the VIEs, and (ii) our variable interests in the VIEs give us the obligation to absorb losses and the right to receive residual returns that could potentially be significant.

The following tables show the assets and liabilities related to our VIE securitization transactions that were included in our Consolidated Balance Sheets:

	September 30, 2017
			VIE Assets						VIE Liabilities
			Gross		Net
	Restricted Cash		Securitized Assets		Securitized Assets		Other Assets		Debt		Other Liabilities
Retail finance receivables	$	712	$	12,423	$	12,219	$	6	$	10,232	$	6
Investments in operating leases		296		9,105		6,774		123		4,417		2
Total	$	1,008	$	21,528	$	18,993	$	129	$	14,649	$	8

	March 31, 2017
			VIE Assets						VIE Liabilities
			Gross		Net
	Restricted Cash		Securitized Assets		Securitized Assets		Other Assets		Debt		Other Liabilities
Retail finance receivables	$	856	$	13,071	$	12,865	$	7	$	11,017	$	5
Investments in operating leases		211		6,502		4,888		80		3,302		1
Total	$	1,067	$	19,573	$	17,753	$	87	$	14,319	$	6

Restricted Cash shown in the table above represents collections from the underlying Gross Securitized Assets shown in the table above and certain reserve deposits held by TMCC for the VIEs and is included as part of Restricted cash on our Consolidated Balance Sheets.  Gross Securitized Assets represent finance receivables and beneficial interests in investments in operating leases securitized for the asset-backed securities issued.  Net Securitized Assets shown in the table above are presented net of deferred fees and costs, deferred income, accumulated depreciation and the allowance for credit losses.  Other Assets represent used vehicles held-for-sale that were repossessed by or returned to TMCC for the benefit of the VIEs.  The related debt of these consolidated VIEs is presented net of $1,578 million and $1,526 million of securities retained by TMCC at September 30, 2017 and March 31, 2017, respectively.  Other Liabilities represents accrued interest on the debt of the consolidated VIEs.

The assets of the VIEs and the restricted cash held by TMCC serve as the sole source of repayment for the asset-backed securities issued by these entities.  Investors in the notes issued by the VIEs do not have recourse to us or our other assets, with the exception of customary representation and warranty repurchase provisions and indemnities.

As the primary beneficiary of these entities, we are exposed to credit, residual value, interest rate, and prepayment risk from the Securitized Assets in the VIEs.  However, our exposure to these risks did not change as a result of the transfer of the assets to the VIEs.  We may also be exposed to interest rate risk arising from the secured notes issued by the VIEs.

35

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 10 – Variable Interest Entities (Continued)

In addition, we entered into interest rate swaps with certain of these special purpose entities that issue variable rate debt.  Under the terms of these swaps, the special purpose entities are obligated to pay TMCC a fixed rate of interest on certain payment dates in exchange for receiving a floating rate of interest on notional amounts equal to the outstanding balance of the secured debt.  This arrangement enables the special purpose entities to mitigate the interest rate risk inherent in issuing variable rate debt that is secured by fixed rate Securitized Assets.

The transfers of the Securitized Assets to the special purpose entities in our securitizations are considered to be sales for legal purposes.  However, the Securitized Assets and the related debt remain on our Consolidated Balance Sheets.  We recognize financing revenue on the Securitized Assets and interest expense on the secured debt issued by the special purpose entities.  We also maintain an allowance for credit losses on the Securitized Assets to cover estimated probable credit losses using a methodology consistent with that used for our non-securitized asset portfolio.  The interest rate swaps between TMCC and the special purpose entities are considered intercompany transactions and therefore are eliminated in our consolidated financial statements.

Non-consolidated Variable Interest Entities

We provide lending to Toyota and Lexus dealers through the Toyota Dealer Investment Group’s Dealer Capital Program (“TDIG Program”) operated by our affiliate TMS, which has an equity interest in these dealerships.  Dealers participating in this program have been determined to be VIEs.  We do not consolidate the dealerships in this program as we are not the primary beneficiary and any exposure to loss is limited to the amount of the credit facility.  Amounts due from these dealers under the TDIG Program that are classified as Finance receivables, net in our Consolidated Balance Sheets as of September 30, 2017 and March 31, 2017 and revenues earned from these dealers during the three and six months ended September 30, 2017 and 2016 were not significant. 

We also have other lending relationships, which have been determined to be VIEs, but these relationships are not consolidated as we are not the primary beneficiary.  Amounts due under these relationships as of September 30, 2017 and March 31, 2017 and revenues earned under these relationships during the three and six months ended September 30, 2017 and 2016 were not significant.

36

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 11 – Liquidity Facilities and Letters of Credit

For additional liquidity purposes, we maintain syndicated credit facilities with certain banks.

364 Day Credit Agreement, Three Year Credit Agreement and Five Year Credit Agreement

In November 2016, TMCC, Toyota Credit de Puerto Rico Corp. (“TCPR”) and other Toyota affiliates entered into a $5.0 billion 364 day syndicated bank credit facility, a $5.0 billion three year syndicated bank credit facility and a $5.0 billion five year syndicated bank credit facility, expiring in fiscal 2018, 2020, and 2022, respectively.

The ability to make draws is subject to covenants and conditions customary in transactions of this nature, including negative pledge provisions, cross-default provisions and limitations on certain consolidations, mergers and sales of assets.  These agreements may be used for general corporate purposes and none were drawn upon as of September 30, 2017 and March 31, 2017.  We are currently in compliance with the covenants and conditions of the credit agreements described above.

Other Unsecured Credit Agreements

TMCC has entered into additional unsecured credit facilities with various banks.  As of September 30, 2017, TMCC had committed bank credit facilities totaling $5.6 billion of which $2.2 billion, $400 million, $2.3 billion, and $725 million mature in fiscal 2018, 2019, 2020, and 2021, respectively.

These credit agreements contain covenants and conditions customary in transactions of this nature, including negative pledge provisions, cross-default provisions and limitations on certain consolidations, mergers and sales of assets.  These credit facilities were not drawn upon as of September 30, 2017 and March 31, 2017. We are currently in compliance with the covenants and conditions of the credit agreements described above.

37

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 12 – Commitments and Contingencies

Commitments and Guarantees

We have entered into certain commitments and guarantees for which the maximum unfunded amounts are summarized in the table below:

	September 30,		March 31,
	2017		2017
Commitments:
Credit facilities commitments with dealers	$	1,322	$	1,199
Minimum lease commitments		173		59
Total commitments		1,495		1,258
Guarantees of affiliate pollution control and solid waste disposal bonds		100		100
Total commitments and guarantees	$	1,595	$	1,358

Wholesale financing is not considered to be a contractual commitment as the arrangements are not binding arrangements under which TMCC is required to perform.

In July 2017, we entered into a 15-year lease agreement, which expires in August 2032, with Toyota Motor North America, Inc. (“TMNA”) for our new headquarters facility in Plano, Texas.  Minimum lease commitments in the table above include $114 million and $10 million for facilities leases with affiliates at September 30, 2017 and March 31, 2017, respectively.  At September 30, 2017, minimum future commitments under lease agreements to which we are a lessee, including those with affiliates, are as follows:

	Futureminimum
Years ending March 31,	leasepayments
2018	$	15
2019		24
2020		20
2021		15
2022		18
Thereafter		81
Total	$	173

38

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 12 – Commitments and Contingencies (Continued)

Commitments

We provide fixed and variable rate working capital loans, revolving lines of credit, and real estate financing to dealers and various multi-franchise organizations referred to as dealer groups for facilities construction and refurbishment, working capital requirements, real estate purchases, business acquisitions and other general business purposes.  These loans are typically secured with liens on real estate, vehicle inventory, and/or other dealership assets, as appropriate, and may be guaranteed by individual or corporate guarantees of affiliated dealers, dealer groups, or dealer principals.  Although the loans are typically collateralized or guaranteed, the value of the underlying collateral or guarantees may not be sufficient to cover our exposure under such agreements.  Our pricing reflects market conditions, the competitive environment, the level of support dealers provide our retail, lease and insurance business and the credit worthiness of each dealer.  Amounts drawn under these facilities are reviewed for collectability on a quarterly basis, in conjunction with our evaluation of the allowance for credit losses.

We are in the process of moving our corporate headquarters operations from Torrance, California to Plano, Texas as part of Toyota Motor Corporation’s consolidation of its three North American headquarters for manufacturing, sales and marketing, and finance operations to a single new headquarters facility.   The relocation of our headquarters operations is expected to be substantially complete by the end of calendar year 2017.  Relocation costs for employees and other relocation expenses are currently estimated to be approximately $120 million and are being expensed as incurred.  To date, the Company has incurred $96 million in relocation expenses.  The relocation costs incurred during the three and six months ended September 30, 2017 were $23 million and $34 million, respectively, compared to $11 million and $17 million during the same periods of fiscal 2017.  We have not incurred significant lease termination costs as a result of our relocation.    

Guarantees and Other Contingencies

TMCC has guaranteed bond obligations totaling $100 million in principal that were issued by Putnam County, West Virginia and Gibson County, Indiana to finance the construction of pollution control facilities at manufacturing plants of certain TMCC affiliates.  The bonds mature in the following fiscal years ending March 31: 2028 - $20 million; 2029 - $50 million; 2030 - $10 million; 2031 - $10 million; and 2032 - $10 million.  TMCC would be required to perform under the guarantees in the event of non-payment on the bonds and other related obligations.  TMCC is entitled to reimbursement by the applicable affiliates for any amounts paid.  TMCC receives an annual fee of $78 thousand for guaranteeing such payments.  TMCC has not been required to perform under any of these affiliate bond guarantees as of September 30, 2017 and March 31, 2017.

Indemnification

In the ordinary course of business, we enter into agreements containing indemnification provisions standard in the industry related to several types of transactions, including, but not limited to, debt funding, derivatives, securitization transactions, and our vendor and supplier agreements.  Performance under these indemnities would occur upon a breach of the representations, warranties or covenants made or given, or a third party claim. In addition, we have agreed in certain debt and derivative issuances, and subject to certain exceptions, to gross-up payments due to third parties in the event that withholding tax is imposed on such payments.  In addition, certain of our funding arrangements may require us to pay lenders for increased costs due to certain changes in laws or regulations.  Due to the difficulty in predicting events which could cause a breach of the indemnification provisions or trigger a gross-up or other payment obligation, we are not able to estimate our maximum exposure to future payments that could result from claims made under such provisions.  We have not made any material payments in the past as a result of these provisions, and as of September 30, 2017, we determined that it is not probable that we will be required to make any material payments in the future.  As of September 30, 2017 and March 31, 2017, no amounts have been recorded under these indemnification provisions.

39

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 12 – Commitments and Contingencies (Continued)

Litigation and Governmental Proceedings

Various legal actions, governmental proceedings and other claims are pending or may be instituted or asserted in the future against us with respect to matters arising in the ordinary course of business.  Certain of these actions are or purport to be class action suits, seeking sizeable damages and/or changes in our business operations, policies and practices.  Certain of these actions are similar to suits that have been filed against other financial institutions and captive finance companies.  We perform periodic reviews of pending claims and actions to determine the probability of adverse verdicts and resulting amounts of liability.  We establish accruals for legal claims when payments associated with the claims become probable and the costs can be reasonably estimated.  When we are able, we also determine estimates of reasonably possible loss or range of loss, whether in excess of any related accrued liability or where there is no accrued liability.  Given the inherent uncertainty associated with legal matters, the actual costs of resolving legal claims and associated costs of defense may be substantially higher or lower than the amounts for which accruals have been established.  Based on available information and established accruals, we do not believe it is reasonably possible that the results of these proceedings, either individually or in the aggregate, will have a material adverse effect on our consolidated financial condition or results of operations.

We have received a request for documents and information from the New York State Department of Financial Services relating to our lending practices (including fair lending), and a request for documents and information pursuant to a civil investigative demand from the Commonwealth of Massachusetts Office of the Attorney General relating to our financing of guaranteed auto protection insurance products on retail contracts.  We will continue to cooperate with these requests, but are unable to predict their outcome given their preliminary status.

40

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 13 – Income Taxes

Our effective tax rate was 37 percent for the three and six months ended September 30, 2017 and 2016.  Our provision for income taxes was $70 million and $166 million for the three and six months ended September 30, 2017, compared to $95 million and $241 million for the same periods in fiscal 2017.   The decrease in the provision for income taxes for the three and six months ended September 30, 2017 is consistent with the decrease in our income before tax compared to the same periods in fiscal 2017.  

Tax-related Contingencies

As of September 30, 2017, we remain under IRS examination for fiscal 2017 and fiscal 2018.  The IRS examination for fiscal 2016 was concluded in the first quarter of fiscal 2018.

We periodically review our uncertain tax positions.  Our assessment is based on many factors including any ongoing IRS audits.  For the quarter ended September 30, 2017, our assessment did not result in a material change in unrecognized tax benefits.

Our deferred tax assets were $3.0 billion and $1.0 billion at September 30, 2017 and March 31, 2017, and were primarily due to the deferred deduction of allowance for credit and residual value losses and federal tax loss carryforward that expires in fiscal 2038.  The total deferred tax liability, net of these deferred tax assets, was $8.1 billion and $7.9 billion at September 30, 2017 and March 31, 2017, respectively.  Realization with respect to the federal tax loss carryforward is dependent on generating sufficient income prior to expiration of the loss carryforward.  Although realization is not assured, management believes it is more likely than not that the deferred tax assets will be realized.  The amount of the deferred tax assets considered realizable could be reduced if management’s estimates change.

41

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 14 – Related Party Transactions

As of September 30, 2017, there were no material changes to our related party agreements or relationships as described in our fiscal 2017 Form 10-K.  The tables below summarize amounts included in our Consolidated Statements of Income and in our Consolidated Balance Sheets under various related party agreements or relationships:

	Three Months Ended				Six Months Ended
	September 30,				September 30,
	2017		2016		2017			2016
Total financing revenues:
Manufacturers’ subvention and other revenues	$	382	$	334	$	750		$	670
Interest expense:
Credit support fees incurred	$	24	$	23	$	47		$	46
Interest and other expenses	$	-	$	-	$	1		$	1
Insurance earned premiums and contract revenues:
Insurance premiums and contract revenues	$	45	$	35	$	89		$	69
Investment and other income, net:
Interest and other income	$	3	$	3	$	7		$	5
Expenses:
Operating and administrative	$	23	$	17	$	42		$	34
Insurance losses and loss adjustment expenses1	$	1	$	-	$	(4	)	$	1

¹ Amount includes the transfer of insurance losses and loss adjustment expenses from the purchase of a reinsurance contract.

42

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 14 – Related Party Transactions (Continued)

	September 30,			March 31,
	2017			2017
Assets:
Investments in marketable securities
Investments in commercial paper	$	5		$	-
Finance receivables, net
Accounts receivable	$	133		$	138
Deferred retail subvention income	$	(1,095	)	$	(967	)
Investments in operating leases, net
Investments in operating leases, net	$	6		$	4
Deferred lease subvention income	$	(1,428	)	$	(1,174	)
Other assets
Notes receivable	$	591		$	823
Other receivables, net	$	243		$	202
Liabilities:
Other liabilities
Unearned affiliate insurance premiums and contract revenues	$	330		$	332
Other payables, net	$	59		$	74
Notes payable	$	24		$	13

TMCC receives subvention payments from TMS which results in a gross monthly subvention receivable.  As of September 30, 2017 and March 31, 2017, the subvention receivable from TMS was $227 million and $165 million, respectively. The subvention receivable is recorded in Other receivables, net in Other assets as of September 30, 2017 and March 31, 2017.  We have a master netting agreement with TMS and TMNA which allows us to net settle payments for shared services and subvention transactions.

43

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 15 – Segment Information

Financial information for our reportable operating segments is summarized as follows:

	Three Months Ended September 30, 2017
	Finance		Insurance		Intercompany
	operations		operations		eliminations			Total
Total financing revenues	$	2,647	$	-	$	-		$	2,647
Depreciation on operating leases		1,719		-		-			1,719
Interest expense		455		-		(3	)		452
Net financing revenues		473		-		3			476
Insurance earned premiums and contract revenues		-		221		-			221
Investment and other income, net		36		22		(3	)		55
Realized gains, net on investments in    marketable securities		-		1		-			1
Net financing and other revenues		509		244		-			753
Expenses:
Provision for credit losses		127		-		-			127
Operating and administrative expenses		259		78		-			337
Insurance losses and loss adjustment expenses		-		102		-			102
Total expenses		386		180		-			566
Income before income taxes		123		64		-			187
Provision for income taxes		47		23		-			70
Net income	$	76	$	41	$	-		$	117
	Six Months Ended September 30, 2017
	Finance		Insurance		Intercompany
	operations		operations		eliminations			Total
Total financing revenues	$	5,245	$	-	$	-		$	5,245
Depreciation on operating leases		3,400		-		-			3,400
Interest expense		906		-		(6	)		900
Net financing revenues		939		-		6			945
Insurance earned premiums and contract revenues		-		437		-			437
Investment and other income, net		68		40		(6	)		102
Realized gains, net on investments in    marketable securities		-		42		-			42
Net financing and other revenues		1,007		519		-			1,526
Expenses:
Provision for credit losses		212		-		-			212
Operating and administrative expenses		492		158		-			650
Insurance losses and loss adjustment expenses		-		216		-			216
Total expenses		704		374		-			1,078
Income before income taxes		303		145		-			448
Provision for income taxes		112		54		-			166
Net income	$	191	$	91	$	-		$	282
Total assets at September 30, 2017	$	116,463	$	4,741	$	(1,104	)	$	120,100

44

TOYOTA MOTOR CREDIT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)

(Unaudited)

Note 15 – Segment Information (Continued)

	Three Months Ended September 30, 2016
	Finance		Insurance			Intercompany
	operations		operations			eliminations		Total
Total financing revenues	$	2,496	$	-		$	-	$	2,496
Depreciation on operating leases		1,683		-			-		1,683
Interest expense		297		-			-		297
Net financing revenues		516		-			-		516
Insurance earned premiums and contract revenues		-		199			-		199
Investment and other income, net		24		18			-		42
Realized gains (losses), net on investments in     marketable securities		76		(6	)		-		70
Net financing and other revenues		616		211			-		827
Expenses:
Provision for credit losses		161		-			-		161
Operating and administrative expenses		242		75			-		317
Insurance losses and loss adjustment expenses		-		91			-		91
Total expenses		403		166			-		569
Income before income taxes		213		45			-		258
Provision for income taxes		80		15			-		95
Net income	$	133	$	30		$	-	$	163

	Six Months Ended September 30, 2016
	Finance		Insurance			Intercompany
	operations		operations			eliminations			Total
Total financing revenues	$	4,954	$	-		$	-		$	4,954
Depreciation on operating leases		3,272		-			-			3,272
Interest expense		604		-			-			604
Net financing revenues		1,078		-			-			1,078
Insurance earned premiums and contract revenues		-		392			-			392
Investment and other income, net		47		34			-			81
Realized gains (losses), net on investments in    marketable securities		87		(4	)		-			83
Net financing and other revenues		1,212		422			-			1,634
Expenses:
Provision for credit losses		213		-			-			213
Operating and administrative expenses		452		144			-			596
Insurance losses and loss adjustment expenses		-		180			-			180
Total expenses		665		324			-			989
Income before income taxes		547		98			-			645
Provision for income taxes		205		36			-			241
Net income	$	342	$	62		$	-		$	404
Total assets at September 30, 2016	$	112,355	$	4,417		$	(979	)	$	115,793

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ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Statement Regarding Forward-Looking Information

Certain statements contained in this Form 10-Q or incorporated by reference herein are “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements are based on current expectations and currently available information.  However, since these statements are based on factors that involve risks and uncertainties, our performance and results may differ materially from those described or implied by such forward-looking statements.  Words such as “believe,” “anticipate,” “expect,” “estimate,” “project,” “should,” “intend,” “will,”  “may” or words or phrases of similar meaning are intended to identify forward-looking statements.  We caution that the forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause actual results to differ materially from those in the forward-looking statements, including, without limitation, the risk factors set forth in “Item 1A. Risk Factors” of our Annual Report on Form 10-K (“Form 10-K”) for the fiscal year ended March 31, 2017 (“fiscal 2017”), including the following:

• Changes in general business, economic, and geopolitical conditions, as well as in consumer demand and the competitive environment in the automotive markets in the United States;

• A decline in Toyota Motor Sales (“TMS”) sales volume and the level of TMS sponsored subvention and other cash incentive programs;

• Increased competition from other financial institutions seeking to increase their share of financing related to Toyota and Lexus vehicles;

• Recalls announced by TMS and the perceived quality of Toyota and Lexus vehicles;

• Availability and cost of financing;

• Changes in our credit ratings and those of Toyota Motor Corporation (“TMC”);

• Changes in our financial position and liquidity, or changes or disruptions in our funding sources or access to the global capital markets;

• Revisions to the estimates and assumptions for our allowance for credit losses;

• Revisions to the estimates and assumptions that are used to determine the value of certain assets;

• Fluctuations in the value of our investment securities or market prices;

• Changes to existing, or adoption of new, accounting standards;

• Changes in prices of used vehicles and their effect on residual values of our off-lease vehicles and return rates;

• Failure of our customers or dealers to meet the terms of any contract with us, or otherwise perform as agreed;

• Fluctuations in interest rates and foreign currency exchange rates;

• Failure or interruption in our operations, including our communications and information systems;

• A security breach or a cyber-attack;

• Challenges related to the relocation of our corporate headquarters to Plano, Texas;

• Failure or changes in commercial soundness of our counterparties and other financial institutions;

• Insufficient establishment of reserves, or the failure of a reinsurer to meet its obligations, in our insurance operations;

• Compliance with current laws and regulations or becoming subject to more stringent laws, regulatory requirements and regulatory scrutiny;

• Changes in our business practices required by new regulatory requirements, such as those required by the consent orders we entered into in February 2016 with the Consumer Financial Protection Bureau (“CFPB”) and the United States Department of Justice with respect to our discretionary dealer compensation practices;

• Natural disasters, changes in fuel prices, manufacturing disruptions and production suspensions of Toyota and Lexus vehicle models and related parts supply;

46

• Changes in the economy or to laws in states where we have a high concentration of customers; and

• Changes in business strategy, including expansion of product lines, credit risk appetite, and business acquisitions;

Forward-looking statements speak only as of the date they are made.  We will not update the forward-looking statements to reflect actual results or changes in the factors affecting the forward-looking statements.

47

OVERVIEW

Key Performance Indicators and Factors Affecting Our Business

In our finance operations, we generate revenue, income, and cash flows by providing retail, lease, and dealer financing to dealers and their customers.  We measure the performance of our financing operations using the following metrics: financing volume, market share, financing margins, operating expense, residual value and credit loss metrics.

In our insurance operations, we generate revenue through marketing, underwriting, and providing claims administration for products that cover certain risks of dealers and their customers.  We measure the performance of our insurance operations using the following metrics: issued agreement volume, average number of agreements in force, loss metrics, and investment income.

Our financial results are affected by a variety of economic and industry factors including, but not limited to, new and used vehicle markets, Toyota and Lexus sales volume, new vehicle incentives, consumer behavior, employment levels, our ability to respond to changes in interest rates with respect to both contract pricing and funding, the actual or perceived quality, safety or reliability of Toyota and Lexus vehicles, the financial health of the dealers we finance, and competitive pressures.  Our financial results may also be affected by the regulatory environment in which we operate, including as a result of compliance costs or changes we may be required to make to our business practices.  All of these factors can influence consumer contract and dealer financing volume, the number of consumer contracts and dealers that default and the loss per occurrence, our inability to realize originally estimated contractual residual values on leased vehicles, the volume and performance of our insurance operations, and our gross margins on consumer contract and dealer financing volume.  Changes in the volume of vehicle sales, utilization of our insurance programs, or the level of coverage purchased by affiliates could materially and adversely impact our insurance operations.  Additionally, our funding programs and related costs are influenced by changes in the global capital markets, prevailing interest rates, and our credit ratings and those of our parent companies, which may affect our ability to obtain cost effective funding to support earning asset growth.

48

Fiscal 2018 First Six Months Operating Environment

During the first half of the fiscal year ending March 31, 2018 (“fiscal 2018”), the United States (“U.S.”) economy experienced stability as consumer confidence increased, the housing market remained strong and unemployment rates remained low.  However, consumer debt levels continue to be elevated, which could result in an increase in our delinquencies and credit losses in the future.  

Industry-wide vehicle sales in the U.S. decreased slightly despite elevated sales incentives during the first half of fiscal 2018 as compared to the same period in fiscal 2017.  Vehicle sales by TMS increased 4 percent in the first half of fiscal 2018 compared to the same period in fiscal 2017 due to a combination of higher incentives and increased consumer demand for Toyota vehicles.  Our financing volume decreased 6 percent and our overall market share decreased 5 percentage points for the first half of fiscal 2018 compared to the same period in fiscal 2017.  The decreases in financing volume and market share are primarily due to competition from other financial institutions.  

Used vehicle values for Toyota and Lexus vehicles have declined over the last year due to an increase in the supply of used vehicles as a result of an increased industry-wide focus on leasing in recent years.  Further declines in used vehicle values resulting from increases in the supply of used vehicles, increases in new vehicle incentive programs and a larger lease portfolio resulting in higher future maturities could continue to unfavorably impact return rates, residual values, depreciation expense and credit losses in the future.

We continue to maintain broad global access to both domestic and international markets.  Conditions in the global capital markets were generally stable during the first half of fiscal 2018.  During the first half of fiscal 2018, our interest expense increased compared to the same period in fiscal 2017 due to higher weighted average interest rates as well as an increase in the amount of outstanding debt.  Future changes in interest rates in the U.S. and foreign markets could result in further volatility in our interest expense, which could affect our results of operations.

49

RESULTS OF OPERATIONS

The following table summarizes total net income by our reportable operating segments:

	Three Months Ended				Six Months Ended
	September 30,				September 30,
(Dollars in millions)	2017		2016		2017		2016
Net income:
Finance operations1	$	76	$	133	$	191	$	342
Insurance operations1		41		30		91		62
Total net income	$	117	$	163	$	282	$	404

¹ Refer to Note 15 - Segment Information of the Notes to Consolidated Financial Statements for the total asset balances of our finance and insurance operations.

Our consolidated net income was $282 million and $117 million for the first half and second quarter of fiscal 2018 compared to net income of $404 million and $163 million for the same periods of fiscal 2017.  The decrease in net income for the first half of fiscal 2018 compared to the same period in fiscal 2017 was primarily due to a $296 million increase in interest expense, a $128 million increase in depreciation on operating leases, and a $54 million increase in operating and administrative expenses, partially offset by a $291 million increase in total financing revenues, and a $75 million decrease in provision for income taxes.  The decrease in net income for the second quarter of fiscal 2018 compared to the same period in fiscal 2017 was primarily due to a $155 million increase in interest expense, a $69 million decrease in realized gains, net on investments in marketable securities, and a $36 million increase in depreciation on operating leases, partially offset by a $151 million increase in total financing revenues, a $34 million decrease in provision for credit losses, and a $25 million decrease in provision for income taxes.  

Our overall capital position increased $0.3 billion, bringing total shareholder’s equity to $9.8 billion at September 30, 2017 as compared to $9.5 billion at March 31, 2017.  Our debt remained consistent at $98.2 billion at September 30, 2017 and March 31, 2017.  Our debt-to-equity ratio decreased to 10.0 at September 30, 2017 from 10.3 at March 31, 2017.

50

Finance Operations

The following table summarizes key results of our Finance Operations:

	Three Months Ended							Six Months Ended
	September 30,				Percentage			September 30,				Percentage
(Dollars in millions)	2017		2016		Change			2017		2016		Change
Financing revenues:
Operating lease	$	2,016	$	1,925		5	%	$	3,997	$	3,816		5	%
Retail		490		459		7	%		964		915		5	%
Dealer		141		112		26	%		284		223		27	%
Total financing revenues		2,647		2,496		6	%		5,245		4,954		6	%
Depreciation on operating leases		1,719		1,683		2	%		3,400		3,272		4	%
Interest expense1		455		297		53	%		906		604		50	%
Net financing revenues		473		516		(8	)%		939		1,078		(13	)%
Investment and other income, net		36		24		50	%		68		47		45	%
Realized gains, net on   investments in marketable securities		-		76		(100	)%		-		87		(100	)%
Net financing and other revenues		509		616		(17	)%		1,007		1,212		(17	)%
Expenses:
Provision for credit losses		127		161		(21	)%		212		213	-%
Operating and administrative expenses		259		242		7	%		492		452		9	%
Total expenses		386		403		(4	)%		704		665		6	%
Income before income taxes		123		213		(42	)%		303		547		(45	)%
Provision for income taxes		47		80		(41	)%		112		205		(45	)%
Net income from finance operations	$	76	$	133		(43	)%	$	191	$	342		(44	)%

¹ Amounts include intercompany interest expense with Insurance Operations of $6 million and $3 million during the first half and second quarter of fiscal 2018.

Our finance operations reported net income of $191 million and $76 million for the first half and second quarter of fiscal 2018, respectively, compared to net income of $342 million and $133 million for the same periods in fiscal 2017.  Finance operations results for the first half of fiscal 2018 decreased compared to same period in fiscal 2017 driven by a $302 million increase in interest expense, a $128 million increase in depreciation on operating leases, a $87 million decrease in realized gains, net on investments in marketable securities, and a $40 million increase in operating and administrative expenses, partially offset by a $291 million increase in total financing revenues, and a $93 million decrease in provision for income taxes.  Finance operations results for the second quarter of fiscal 2018 decreased compared to the same period in fiscal 2017, primarily due to a $158 million increase in interest expense, a $76 million decrease in realized gains, net on investments in marketable securities, and a $36 million increase in depreciation on operating leases, partially offset by a $151 million increase in total financing revenues, a $34 million decrease in provision for credit losses, and a $33 million decrease in provision for income taxes.  

51

Financing Revenues

Total financing revenues increased 6 percent during the first half and second quarter of fiscal 2018 as compared to the same periods in fiscal 2017 due to the following:

• Operating lease revenues increased 5 percent in the first half and second quarter of fiscal 2018 as compared to the same periods in fiscal 2017, due to higher average outstanding earning asset balances and higher portfolio yields.  The increase in our portfolio yields was partially offset by an increase in our depreciation expense.  

• Retail financing revenues increased 5 percent and 7 percent in the first half and second quarter of fiscal 2018, respectively, as compared to the same periods in fiscal 2017 due to higher portfolio yields and higher average outstanding earning asset balances.

• Dealer financing revenues increased 27 percent and 26 percent in the first half and second quarter of fiscal 2018, respectively, as compared to the same periods in fiscal 2017, primarily due to higher portfolio yields and higher average outstanding earning asset balances.

Our total portfolio yield, which includes operating lease revenues net of depreciation, as well as retail and dealer financing revenues, increased slightly to 3.4 percent and 3.5 percent for the first half and second quarter of fiscal 2018, respectively, compared to 3.3 percent and 3.2 percent for the same periods in fiscal 2017.

Depreciation on Operating Leases

Depreciation on operating leases increased 4 percent and 2 percent during the first half and second quarter of fiscal 2018, respectively, as compared to the same periods in fiscal 2017.  The increase in depreciation during the first half and second quarter of fiscal 2018 as compared to the same periods in fiscal 2017 was primarily attributable to an increase in average operating lease units outstanding as well as deterioration in expected used vehicle values for Toyota and Lexus vehicles over the last year.  In the first half and second quarter of fiscal 2017, we experienced higher maturities of short-term leases which increased depreciation expense as our severity on short-term leases is typically higher.

52

Interest Expense

Our liabilities consist mainly of fixed and floating rate debt, denominated in U.S. dollars and various other currencies, which we issue in the global capital markets, while our assets consist primarily of U.S. dollar denominated, fixed rate receivables.  We enter into interest rate swaps, interest rate floors, interest rate caps and foreign currency swaps to hedge the interest rate and foreign currency risks that result from the different characteristics of our assets and liabilities.  The following table summarizes the consolidated components of interest expense:

	Three Months Ended						Six Months Ended
	September 30,						September 30,
(Dollars in millions)	2017			2016			2017			2016
Interest expense on debt	$	484		$	377		$	951		$	736
Interest income on derivatives		(18	)		(5	)		(34	)		(7	)
Interest expense on debt and derivatives		466			372			917			729
Ineffectiveness related to hedge accounting derivatives		-			-			-			-
Loss (gain) on non-hedge accounting debt denominated in   foreign currencies		373			156			1,023			(62	)
(Gain) loss on non-hedge accounting foreign currency swaps		(383	)		(156	)		(1,033	)		32
Gain on U.S. dollar non-hedge accounting interest   rate swaps		(4	)		(75	)		(7	)		(95	)
Total interest expense	$	452		$	297		$	900		$	604

During the first half and second quarter of fiscal 2018, total interest expense increased to $900 million and $452 million, respectively, from $604 million and $297 million, respectively, in the same periods in fiscal 2017.  The increase in total interest expense for the first half and second quarter of fiscal 2018 compared to the same periods in fiscal 2017 is primarily attributable to an increase in interest expense on debt, and lower gains on U.S. dollar non-hedge accounting interest rate swaps.  

Interest expense on debt and derivatives primarily represents contractual net interest settlements and changes in accruals on secured and unsecured notes and loans payable, commercial paper and derivatives, and includes amortization of discounts, premiums, debt issuance costs, and basis adjustments.  Interest expense on debt and derivatives in the first half and second quarter of fiscal 2018 increased to $917 million and $466 million, respectively, from $729 million and $372 million, in the same periods in fiscal 2017.  The increases in interest expense on debt and derivatives are primarily due to higher weighted average interest rates as well as an increase in the amount of outstanding debt.

Gain or loss on non-hedge accounting debt denominated in foreign currencies represents the impact of translation adjustments.  We use non-hedge accounting foreign currency swaps to economically hedge the debt denominated in foreign currencies. During both the first half and second quarter of fiscal 2018, we recorded a net gain of $10 million as gains on our non-hedge accounting foreign currency swaps were largely offset by losses on our non-hedge accounting debt denominated in foreign currencies as a result of offsetting foreign currency swap rates across the various currencies in which our debt is denominated.  During the first half of fiscal 2017, the net gains of $30 million on our debt denominated in foreign currencies, net of foreign currency swaps, resulted primarily from a decrease in most foreign currency swap rates in which our debt is denominated.  During the second quarter of fiscal 2017, changes in debt denominated in foreign currencies directly offset changes in foreign currency swaps as a result of minimal changes in foreign currency swap rates.

Gain or loss on U.S. dollar non-hedge accounting interest rate swaps represents the change in the valuation of interest rate swaps.  During the first half of fiscal 2018, we recorded gains of $7 million primarily as a result of slight decreases in the longer tenor U.S. dollar swap rates, with the gains from our longer-term pay-float swaps exceeding the losses on our shorter-term pay-fixed swaps. During the second quarter of fiscal 2018, we recorded gains of $4 million as a result of increases in U.S. dollar swap rates across all relevant tenors, with the gains on our shorter-term pay-fixed swaps exceeding the losses on our longer-term pay-float swaps.   During the first half and second quarter of fiscal 2017, we recorded gains of $95 million and $75 million, respectively, as a result of an increase in U.S. dollar swap rates in the short and medium term tenors.

Future changes in interest and foreign currency exchange rates could continue to result in significant volatility in our interest expense, thereby affecting our results of operations.

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Realized Gains, Net on Investments in Marketable Securities

During the first half and second quarter of fiscal 2017, our finance operations reported realized gains, net on investments in marketable securities of $87 million and $76 million, respectively.  The realized gains, net on marketable securities were due to the sale of a portion of our fixed income mutual funds to take advantage of favorable market conditions, that occurred in the second quarter of fiscal 2017.

Provision for Credit Losses

The provision for credit losses remained relatively consistent at $212 million and $213 million for the first half of fiscal 2018 and fiscal 2017, respectively.  We recorded a provision for credit losses of $127 million and $161 million for the second quarter of fiscal 2018 and fiscal 2017,  respectively.  The decrease in the provision for credit losses for the second quarter of fiscal 2018 compared to the same period in fiscal 2017 was attributable to favorable credit loss experience.

Operating and Administrative Expenses

Operating and administrative expenses increased 9 percent and 7 percent during the first half and second quarter of fiscal 2018, respectively, compared to the same periods in fiscal 2017 primarily due to increases in general operating expenses and information technology expenditures, including the continued development of future enhancements to our core servicing program.  We continue to incur expenses associated with the relocation of our headquarters operations to Plano, Texas including deferred compensation expense, employee relocation and other relocation related expenses.  We expect to incur additional expenses over the next few years relating to our relocation.  

54

Insurance Operations

The following table summarizes key results of our Insurance Operations:

	Three Months Ended								Six Months Ended
	September 30,					Percentage			September 30,					Percentage
	2017		2016			Change			2017		2016			Change
Agreements (units in thousands)
Issued		650		629			3	%		1,285		1,229			5	%
Average in force		8,194		7,241			13	%		8,077		7,121			13	%
(Dollars in millions)
Insurance earned premiums and contract   revenues	$	221	$	199			11	%	$	437	$	392			11	%
Investment and other income, net		22		18			22	%		40		34			18	%
Realized gains (losses), net on   investments in marketable securities		1		(6	)		117	%		42		(4	)		1150	%
Revenues from insurance operations		244		211			16	%		519		422			23	%
Expenses:
Insurance losses and loss adjustment   expenses		102		91			12	%		216		180			20	%
Operating and administrative   expenses		78		75			4	%		158		144			10	%
Total expenses		180		166			8	%		374		324			15	%
Income before income taxes		64		45			42	%		145		98			48	%
Provision for income taxes		23		15			53	%		54		36			50	%
Net income from insurance operations	$	41	$	30			37	%	$	91	$	62			47	%

Our insurance operations reported net income of $91 million and $41 million for the first half and second quarter of fiscal 2018, respectively, compared to $62 million and $30 million for the same periods in fiscal 2017.  The increase in net income for the first half of fiscal 2018 was primarily due to a $46 million increase in realized gains, net on investments in marketable securities, and a $45 million increase in insurance earned premiums and contract revenues, partially offset by a $36 million increase in insurance losses and loss adjustment expenses, a $18 million increase in provision for income taxes, and a $14 million increase in operating and administrative expenses.   The increase in net income for the second quarter of fiscal 2018, compared to the same period in fiscal 2017, was primarily due to a $22 million increase in insurance earned premiums and contract revenues, and a $7 million increase in realized gains, net on investments in marketable securities, partially offset by a $11 million increase in insurance losses and loss adjustment expenses, and a $8 million increase in provision for income taxes.

Agreements issued increased 5 percent and 3 percent during the first half and second quarter of fiscal 2018, respectively, compared to the same periods in fiscal 2017.  The average number of agreements in force increased 13 percent during the first half and second quarter of fiscal 2018 compared to the same periods in fiscal 2017.  The increases in the agreements issued in both periods were primarily due to increased sales of guaranteed auto protection agreements, partially offset by a decrease in sales of certified pre-owned vehicle warranties. The increases in the average in force agreements in both periods were primarily due to increased sales of prepaid maintenance contracts, tire and wheel protection agreements, and guaranteed auto protection agreements.

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Revenue from Insurance Operations

Our insurance operations reported insurance earned premiums and contract revenues of $437 million and $221 million for the first half and second quarter of fiscal 2018, respectively, compared to $392 million and $199 million for the same periods in fiscal 2017.  Insurance earned premiums and contract revenues represent revenues from in force agreements and are affected by sales volume as well as the level, age, and mix of in force agreements.  Insurance earned premiums and contract revenues are recognized over the term of the agreements in relation to the timing and level of anticipated claims and administrative expenses.  The increase in insurance earned premiums and contract revenues in the first half and second quarter of fiscal 2018, respectively, compared to the same periods in fiscal 2017 was primarily due to an increase in the average in force agreements.  

Realized Gains, Net on Investments in Marketable Securities

Our insurance operations reported realized gains, net on investments in marketable securities of $42 million and $1 million for the first half and second quarter of fiscal 2018, respectively, compared to realized losses, net on investments in marketable securities of $4 million and $6 million for the same periods in fiscal 2017.  The increase in realized gains, net on investments in marketable securities for the first half of fiscal 2018 compared to the same period in fiscal 2017 was due to the sale of a portion of our fixed income mutual funds portfolio to take advantage of favorable market conditions, which occurred in the first quarter of fiscal 2018.

Insurance Losses and Loss Adjustment Expenses

Our insurance operations reported insurance losses and loss adjustment expenses of $216 million and $102 million for the first half and second quarter of fiscal 2018, respectively, compared to $180 million and $91 million for the same periods in fiscal 2017.  Insurance losses and loss adjustment expenses incurred are a function of the amount of covered risks, the frequency and severity of claims associated with in force agreements and the level of risk retained by our insurance operations.  Insurance losses and loss adjustment expenses include amounts paid and accrued for reported losses, estimates of losses incurred but not reported, and any related claim adjustment expenses. The increase in insurance losses and loss adjustment expenses in the first half and second quarter of fiscal 2018 compared to the same periods in fiscal 2017 was primarily due to an increase in our prepaid maintenance, guaranteed auto protection, and tire and wheel protection losses.  The increases in both our prepaid maintenance and tire and wheel protection losses were due to a higher number of average in force agreements, as well as an increase in the severity of prepaid maintenance claims.  The increase in our guaranteed auto protection losses was the result of increases in both frequency and severity of claims due to deterioration in used vehicle values.

Operating and Administrative Expenses

Our insurance operations reported operating and administrative expenses of $158 million and $78 million for the first half and second quarter of fiscal 2018, respectively, compared to $144 million and $75 million for the same periods in fiscal 2017.  The increase in operating and administrative expenses in the first half and second quarter of fiscal 2018 compared to the same periods in fiscal 2017 was attributable to higher product and general operating expenses driven by the continued growth of our insurance business, as well as an increase in insurance dealer back-end program expenses.  Insurance dealer back-end program expenses are incentives or expense reduction programs we provide to dealers based on certain performance criteria.  We continue to incur expenses associated with the relocation of our headquarters operations to Plano, Texas including deferred compensation expense, employee relocation and other relocation related expenses.  We expect to incur additional expenses over the next few years relating to our relocation.  

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Provision for Income Taxes

Our overall provision for income taxes was $166 million and $70 million for the first half and second quarter of fiscal 2018, respectively, compared to $241 million and $95 million for the same periods in fiscal 2017.  Our effective tax rate was 37 percent for the first half and second quarter of both fiscal 2018 and fiscal 2017. The decrease in the provision for income taxes for the first half and second quarter of fiscal 2018 compared to the same periods in fiscal 2017 is consistent with the decrease in our income before taxes.  

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FINANCIAL CONDITION

Vehicle Financing Volume and Net Earning Assets

The composition of our vehicle contract volume and market share is summarized below:

	Three Months Ended									Six Months Ended
	September 30,						Percentage			September 30,						Percentage
(units in thousands):	2017			2016			Change			2017			2016			Change
TMS new sales volume1		539			500			8	%		1,009			968			4	%
Vehicle financing volume2
New retail contracts		172			167			3	%		319			311			3	%
Used retail contracts		64			74			(14	)%		132			146			(10	)%
Lease contracts		139			154			(10	)%		270			306			(12	)%
Total		375			395			(5	)%		721			763			(6	)%
TMS subvened vehicle financing volume (units included in the above table):
New retail contracts		99			104			(5	)%		181			195			(7	)%
Used retail contracts		16			21			(24	)%		37			43			(14	)%
Lease contracts		130			132			(2	)%		249			260			(4	)%
Total		245			257			(5	)%		467			498			(6	)%
TMS subvened vehicle financing volume as a percent of vehicle financing volume:
New retail contracts		57.6	%		62.3	%					56.7	%		62.7	%
Used retail contracts		25.0	%		28.4	%					28.0	%		29.5	%
Lease contracts		93.5	%		85.7	%					92.2	%		85.0	%
Overall subvened contracts		65.3	%		65.1	%					64.8	%		65.3	%
Market share:3
Retail contracts		31.9	%		33.2	%					31.5	%		32.0	%
Lease contracts		25.6	%		30.0	%					26.6	%		30.7	%
Total		57.5	%		63.2	%					58.1	%		62.7	%

¹ Represents total domestic TMS sales of new Toyota and Lexus vehicles excluding sales under dealer rental car and commercial fleet programs and sales of a private Toyota distributor.  TMS new sales volume was comprised of 85 percent Toyota and 15 percent Lexus for the first half and second quarter of fiscal 2018.  TMS new sales volume was comprised of 84 percent Toyota and 16 percent Lexus for the first half and second quarter of fiscal 2017.  

² Total financing volume was comprised of approximately 80 percent Toyota, 17 percent Lexus, and 3 percent non-Toyota/Lexus for the first half and second quarter of fiscal 2018.  Total financing volume was comprised of approximately 79 percent Toyota, 18 percent Lexus, and 3 percent non-Toyota/Lexus for the first half and second quarter of fiscal 2017.

³ Represents the percentage of total domestic TMS sales of new Toyota and Lexus vehicles financed by us, excluding sales under dealer rental car and commercial fleet programs and sales of a private Toyota distributor.

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Vehicle Financing Volume

The volume of our retail and lease contracts, which are acquired primarily from Toyota and Lexus dealers, is substantially dependent upon TMS new sales volume as well as the level of TMS sponsored subvention.  Vehicle sales by TMS increased 4 percent and 8 percent for the first half and second quarter of fiscal 2018 compared to the same periods in fiscal 2017 primarily due to a combination of higher incentives and increased consumer demand for Toyota vehicles.  Our financing volume decreased 6 percent and 5 percent and our overall market share decreased 5 percentage points and 6 percentage points for the first half and second quarter of fiscal 2018, respectively, compared to the same periods in fiscal 2017 primarily due to competition from other financial institutions.  Our financing volume and market share were further impacted by increased competition for non-subvened lease contracts.

The composition of our net earning assets is summarized below: 

	September 30,		March 31,
(Dollars in millions)	2017		2017		Change
Net Earning Assets
Finance receivables, net
Retail finance receivables, net	$	51,287	$	50,686		1	%
Dealer financing, net1		16,109		17,776		(9	)%
Total finance receivables, net		67,396		68,462		(2	)%
Investments in operating leases, net		38,823		38,152		2	%
Net earning assets	$	106,219	$	106,614		-	%
Dealer Financing
(Number of dealers serviced)
Toyota and Lexus dealers1		988		993		(1	)%
Dealers outside of the    Toyota/Lexus dealer network		368		371		(1	)%
Total number of dealers receiving    wholesale financing		1,356		1,364		(1	)%
Dealer inventory outstanding (units in thousands)		286		340		(16	)%

¹ Includes wholesale and other credit arrangements in which we participate as part of a syndicate of lenders.

Retail Contract Volume and Earning Assets

Our new retail contract volume increased 3 percent during the first half and second quarter of fiscal 2018 as compared to the same periods in fiscal 2017 driven by an increase in TMS new vehicle sales volume.  Our retail market share decreased 1 percentage point during the first half and second quarter of fiscal 2018 compared to the same periods in fiscal 2017.  Our retail finance receivables, net increased slightly at September 30, 2017 as compared to March 31, 2017.  

Lease Contract Volume and Earning Assets

Our lease contract volume decreased 12 percent and 10 percent during the first half and second quarter of fiscal 2018, respectively, as compared to the same periods in fiscal 2017. Our lease market share decreased 4 percentage points during the first half and second quarter of fiscal 2018 as compared to the same periods in fiscal 2017.  Much of the decrease in both lease contract volume and market share during the first half and second quarter of fiscal 2018 was attributable to competition from other financial institutions and a decline in the volume of subvened lease contracts.  Our lease contract volume and market share were further impacted by increased competition for non-subvened contracts.  Despite the decrease in lease financing volume and market share, higher leasing in recent years has resulted in our investments in operating leases, net, increasing 2 percent at September 30, 2017, as compared to March 31, 2017.  

Dealer Financing and Earning Assets

Dealer financing, net at September 30, 2017, decreased 9 percent from March 31, 2017 due primarily to a decrease in dealer inventory outstanding.

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Residual Value Risk

The primary factors affecting our exposure to residual value risk are the levels at which residual values are established at lease inception, current economic conditions and outlook, projected end-of-term market values, and the resulting impact on depreciation expense and lease return rates.

On a quarterly basis, we review the estimated end-of-term market values of leased vehicles to assess the appropriateness of our carrying values.  To the extent the estimated end-of-term market value of a leased vehicle is lower than the residual value established at lease inception, the residual value of the leased vehicle is adjusted downward so that the carrying value at lease end will approximate the estimated end-of-term market value.  For investments in operating leases, adjustments are made on a straight-line basis over the remaining terms of the lease contracts and are included in Depreciation on operating leases in our Consolidated Statements of Income as a change in accounting estimate.  

Depreciation on Operating Leases

Depreciation on operating leases and average operating lease units outstanding are as follows:

	Three Months Ended							Six Months Ended
	September 30,				Percentage			September 30,				Percentage
	2017		2016		Change			2017		2016		Change
Depreciation on operating leases    (dollars in millions)	$	1,719	$	1,683		2	%	$	3,400	$	3,272		4	%
Average operating lease units outstanding    (in thousands)		1,466		1,416		4	%		1,457		1,408		3	%

Depreciation expense on operating leases increased 4 percent and 2 percent during the first half and second quarter of fiscal 2018, respectively, as compared to the same periods in fiscal 2017, due to an increase in the average operating lease units outstanding as well as deterioration in expected used vehicle values over the last year for Toyota and Lexus vehicles.  In the first half and second quarter of fiscal 2017, we experienced higher maturities of short-term leases which increased depreciation expense as our severity on short-term leases is typically higher.  As a result of the increased focus on leasing in recent years, by both us and the automotive finance industry, we expect that maturities will remain at a high level in the future, which will result in an increase in the supply of used vehicles and could unfavorably impact used vehicle values.  Higher average operating lease units outstanding and the resulting increase in future maturities, a higher supply of used vehicles, as well as deterioration in actual and expected used vehicle values for Toyota and Lexus vehicles could unfavorably impact return rates, residual values, and depreciation expense.

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Credit Risk

Credit Loss Experience

Our credit loss experience may be affected by a number of factors including the economic environment, our purchasing and servicing practices, used vehicle market conditions and subvention.  We continuously evaluate and refine our purchasing practices and collection efforts to minimize risk.  In addition, subvention contributes to our overall portfolio quality, as subvened contracts typically have higher credit scores than non-subvened contracts.

The following table provides information related to our credit loss experience:

	September 30,			March 31,			September 30,
	2017			2017			2016
Net charge-offs as a percentage of average gross    earning assets1
Finance receivables		0.40	%		0.52	%		0.47	%
Operating leases		0.31	%		0.39	%		0.36	%
Total		0.37	%		0.47	%		0.43	%
Default frequency as a percentage of outstanding    contracts		1.48	%		1.53	%		1.46	%
Average loss severity per unit2	$	7,406		$	7,787		$	7,631
Aggregate balances for accounts 60 or more days    past due as a percentage of gross earning assets3
Finance receivables4		0.38	%		0.28	%		0.36	%
Operating leases4		0.32	%		0.25	%		0.28	%
Total		0.36	%		0.27	%		0.33	%

¹ Net charge-off ratios have been annualized using six month results for the periods ended September 30, 2017 and 2016.

² Average loss per unit upon disposition of repossessed vehicles or charge-off prior to repossession.

³ Substantially all retail and operating lease receivables do not involve recourse to the dealer in the event of customer default.

⁴ Includes accounts in bankruptcy and excludes accounts for which vehicles have been repossessed.

The level of credit losses primarily reflects two factors: default frequency and loss severity.  Net charge-offs as a percentage of average gross earning assets decreased from 0.43 percent at September 30, 2016 to 0.37 percent at September 30, 2017 due to favorable credit loss experience as well as a recent focus on early and late stage collection activities.  Default frequency as a percentage of outstanding contracts increased slightly to 1.48 percent for the first half of fiscal 2018 compared to 1.46 percent in the same period in fiscal 2017.  Our average loss severity for the first half of fiscal 2018 decreased to $7,406 from $7,631 in the first half of fiscal 2017.  The decreases in net charge-offs, default frequency and average loss severity compared to March 31, 2017 are also due to a recent focus on early and late stage collection activities.  Our delinquencies increased to 0.36 percent at September 30, 2017 compared to 0.27 percent at March 31, 2017 and 0.33 percent at September 30, 2016.  Despite declines in our net charge-offs and average loss severity for the first half of fiscal 2018 as compared to the same period in fiscal 2017, we have seen increasing trends in delinquencies, default frequency, and average loss severity over the last few years.  Changes in the economy that impact the consumer such as increasing interest rates, and a rise in the unemployment rate as well as higher debt balances, coupled with deterioration in actual and expected used vehicle values, could result in increases to our credit losses.

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Allowance for Credit Losses

We maintain an allowance for credit losses to cover probable and estimable losses as of the balance sheet date resulting from the non-performance of our customers and dealers under their contractual obligations.  The determination of the allowance involves significant assumptions, complex analyses, and management judgment.

The allowance for credit losses for our consumer portfolio is established through a process that estimates probable losses incurred as of the balance sheet date based upon consistently applied statistical analyses of portfolio data.  This process utilizes delinquency migration analysis, in which historical delinquency and credit loss experience is applied to the current aging of the portfolio, and incorporates current and expected trends and other relevant factors, including used vehicle market conditions, economic conditions, unemployment rates, purchase quality mix, and operational factors.  This process, along with management judgment, is used to establish the allowance to cover probable and estimable losses incurred as of the balance sheet date.  Movement in any of these factors would cause changes in estimated probable losses.

The allowance for credit losses for our dealer portfolio is established by aggregating dealer financing receivables into loan-risk pools, which are determined based on the risk characteristics of the loan (e.g. secured by vehicles, real estate or dealership assets).  We analyze the loan-risk pools using internally developed risk ratings for each dealer.  In addition, we have established procedures that focus on managing high risk loans in our dealer portfolio.  Our field operations management and special assets group are consulted each quarter to determine if any specific dealer loan is considered impaired.  If impaired loans are identified, specific reserves are established, as appropriate, and the loan is removed from the loan-risk pool for separate monitoring.

The following table provides information related to our allowance for credit losses:

	Three Months Ended						Six Months Ended
	September 30,						September 30,
(Dollars in millions)	2017			2016			2017			2016
Allowance for credit losses at beginning of period	$	611		$	489		$	622		$	535
Provision for credit losses		127			161			212			213
Charge-offs, net of recoveries1		(102	)		(124	)		(198	)		(222	)
Allowance for credit losses at end of period	$	636		$	526		$	636		$	526

¹ Charge-offs are shown net of recoveries of $22 million and $45 million for the three and six months ended September 30, 2017 and 2016, respectively, and recoveries of $20 million and $40 million for the three and six months ended September 30, 2016, respectively.

Our allowance for credit losses increased $110 million from $526 million at September 30, 2016 to $636 million at September 30, 2017 as a result of increasing trends in our credit loss experience over the last few years.  In addition, our allowance for credit losses was also impacted by deterioration in the financial performance of certain dealers and an increase in the specific reserve for certain impaired dealers.  Our allowance for credit losses increased $14 million from $622 million at March 31, 2017 to $636 million at September 30, 2017 primarily due to increasing trends in our credit loss experience over the last few years. Changes in the economy that impact the consumer such as increasing interest rates, a rise in the unemployment rate and higher debt balances, coupled with deterioration in actual and expected used vehicle values, could result in increases to our allowance for credit losses.  

We have evaluated our allowance for credit losses in relation to the recent natural disasters in Texas, Florida, and Puerto Rico and have recorded an amount that estimates the probable incurred losses based on our analysis of portfolio information as well as similar historical events.  The amount we recorded as of September 30, 2017 related to these events was not significant.  

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LIQUIDITY AND CAPITAL RESOURCES

Liquidity risk is the risk relating to our ability to meet our financial obligations when they come due.  Our liquidity strategy is to ensure that we maintain the ability to fund assets and repay liabilities in a timely and cost-effective manner, even in adverse market conditions.  Our strategy includes raising funds via the global capital markets and through loans, credit facilities, and other transactions as well as generating liquidity from our earning assets.  This strategy has led us to develop a borrowing base that is distributed across a variety of markets, geographies, investors and financing structures, among other factors.

The following table summarizes the components of our outstanding funding sources at carrying value:

	September 30,		March 31,
(Dollars in millions)	2017		2017
Commercial paper1	$	25,247	$	26,632
Unsecured notes and loans payable2		58,327		57,282
Secured notes and loans payable3		14,649		14,319
Total debt	$	98,223	$	98,233

¹ Includes unamortized premium/discount.

² Includes unamortized premium/discount, debt issuance costs, the effects of gains and losses due to foreign currency translation adjustments on non-hedged and de-designated notes and loans payable which are denominated in foreign currencies and other carrying value adjustments

³ Includes unamortized premium/discount and debt issuance costs.

Liquidity management involves forecasting and maintaining sufficient capacity to meet our cash needs, including unanticipated events.  To ensure adequate liquidity through a full range of potential operating environments and market conditions, we conduct our liquidity management and business activities in a manner that will preserve and enhance funding stability, flexibility and diversity.  Key components of this operating strategy include a strong focus on developing and maintaining direct relationships with commercial paper investors and wholesale market funding providers and maintaining the ability to sell certain assets when and if conditions warrant.

We develop and maintain contingency funding plans and regularly evaluate our liquidity position under various operating circumstances, allowing us to assess how we will be able to operate through a period of stress when access to normal sources of capital is constrained.  The plans project funding requirements during a potential period of stress, specify and quantify sources of liquidity, and outline actions and procedures for effectively managing through the problem period. In addition, we monitor the ratings and credit exposure of the lenders that participate in our credit facilities to ascertain any issues that may arise with potential draws on these facilities if that contingency becomes warranted.

We maintain broad access to a variety of domestic and global markets and may choose to realign our funding activities depending upon market conditions, relative costs, and other factors.  We believe that our funding sources, combined with operating and investing activities, provide sufficient liquidity to meet future funding requirements and business growth. Our funding volume is primarily based on the expected net change in earning assets and debt maturities.

For liquidity purposes, we hold cash in excess of our immediate funding needs.  These excess funds are invested in short-term, highly liquid and investment grade money market instruments, which provide liquidity for our short-term funding needs and flexibility in the use of our other funding sources.  We maintained excess funds ranging from $7.7 billion to $11.4 billion with an average balance of $9.6 billion during the quarter ended September 30, 2017.

We may lend to or borrow from affiliates on terms based upon a number of business factors such as funds availability, cash flow timing, relative cost of funds, and market access capabilities.

Credit support is provided to us by our indirect parent Toyota Financial Services Corporation (“TFSC”), and, in turn to TFSC by TMC.  Taken together, these credit support agreements provide an additional source of liquidity to us, although we do not rely upon such credit support in our liquidity planning and capital and risk management.  The credit support agreements are not a guarantee by TMC or TFSC of any securities or obligations of TFSC or TMCC, respectively.  The fees paid pursuant to these agreements are disclosed in Note 14 – Related Party Transactions of the Notes to Consolidated Financial Statements.

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TMC’s obligations under its credit support agreement with TFSC rank pari passu with TMC’s senior unsecured debt obligations.  Refer to Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations “Liquidity and Capital Resources” in our Form 10-K for the fiscal year ended March 31, 2017 for further discussion.

We routinely monitor global financial conditions and our financial exposure to our global counterparties, particularly in those countries experiencing significant economic, fiscal or political strain and the corresponding likelihood of default.  We do not currently have exposure to sovereign counterparties in countries experiencing significant economic, fiscal or political strain or any other sovereign counterparties.  Refer to the “Liquidity and Capital Resources - Liquidity Facilities and Letters of Credit” section and “Part I, Item 1A. Risk Factors - The failure or commercial soundness of our counterparties and other financial institutions may have an effect on our liquidity, results of operations or financial condition” in our Form 10-K for the fiscal year ended March 31, 2017 for further discussion.

Commercial Paper

Short-term funding needs are met through the issuance of commercial paper in the U.S.  Commercial paper outstanding under our commercial paper programs ranged from approximately $25.3 billion to $26.8 billion during the quarter ended September 30, 2017, with an average outstanding balance of $26.1 billion.  Our commercial paper programs are supported by the liquidity facilities discussed under the heading “Liquidity Facilities and Letters of Credit.”  We believe we have ample capacity to meet our short-term funding requirements and manage our liquidity.

Unsecured Notes and Loans Payable

The following table summarizes the components of our unsecured notes and loans payable:

(Dollars in millions)	U.S.medium term notes ("MTNs") and domestic bonds				Euro MTNs ("EMTNs")				Other			Total unsecured notes and loans payable4
Balance at March 31, 2017¹	$	35,533			$	14,686			$	7,202		$	57,421
Issuances		6,168		2		889		3		-			7,057
Maturities and terminations		(3,310	)			(2,703	)			(1,222	)		(7,235	)
Non-cash changes in foreign currency rates		-				1,302				8			1,310
Balance at September 30, 2017¹	$	38,391			$	14,174			$	5,988		$	58,553

¹ Amounts represent par values and as such exclude unamortized premium/discount, debt issuance costs, fair value adjustments to debt in hedge accounting relationships, accrued redemption premiums, and the unamortized fair value adjustments on the hedged item for terminated hedge accounting relationships.  

² MTNs and domestic bonds issued during the first half of fiscal 2018 had terms to maturity ranging from approximately 1 year to 7 years, and had interest rates at the time of issuance ranging from 1.4 percent to 2.9 percent.

³ EMTNs issued during the first half of fiscal 2018 had terms to maturity of approximately 5 years and had interest rates at the time of issuance ranging from 1.9 percent to 3.3 percent.

⁴ Consists of fixed and floating rate debt and other obligations.  Upon the issuance of fixed rate debt and other obligations, we generally elect to enter into pay-float swaps.  Refer to “Derivative Instruments” for further discussion.

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We maintain a shelf registration statement with the SEC to provide for the issuance of debt securities in the U.S. capital markets to retail and institutional investors. We qualify as a well-known seasoned issuer under SEC rules, which allows us to issue under our registration statement an unlimited amount of debt securities during the three year period ending February 2018.  Debt securities issued under the U.S. shelf registration statement are issued pursuant to the terms of an indenture which requires TMCC to comply with certain covenants, including negative pledge and cross-default provisions.  We are currently in compliance with these covenants.

Our EMTN program, shared with our affiliates Toyota Motor Finance (Netherlands) B.V., Toyota Credit Canada Inc. and Toyota Finance Australia Limited (TMCC and such affiliates, the “EMTN Issuers”), provides for the issuance of debt securities in the international capital markets.  In September 2017, the EMTN Issuers renewed the EMTN program for a one year period.  The maximum aggregate principal amount authorized under the EMTN Program to be outstanding at any time is €50.0 billion or the equivalent in other currencies, of which €26.5 billion was available for issuance at September 30, 2017.  The authorized amount is shared among all EMTN Issuers.  The authorized aggregate principal amount under the EMTN program may be increased from time to time.  Debt securities issued under the EMTN program are issued pursuant to the terms of an agency agreement.  Certain debt securities issued under the EMTN program are subject to negative pledge provisions.  Debt securities issued under our EMTN program prior to October 2007 are also subject to cross-default provisions.  We are currently in compliance with these covenants.

TMCC has entered into term loan agreements with various banks.  These term loan agreements contain covenants and conditions customary in transactions of this nature, including negative pledge provisions, cross-default provisions and limitations on certain consolidations, mergers and sales of assets.  We are currently in compliance with these covenants and conditions.  In addition, we may issue other debt securities through the global capital markets or enter into other unsecured financing arrangements.

Secured Notes and Loans Payable

Overview

Asset-backed securitization of our earning asset portfolio provides us with an alternative source of funding.  We securitize finance receivables and beneficial interests in investments in operating leases (“Securitized Assets”) using a variety of structures.  Our securitization transactions involve the transfer of Securitized Assets to bankruptcy-remote special purpose entities.  These bankruptcy-remote entities are used to ensure that the Securitized Assets are isolated from the claims of creditors of TMCC and that the cash flows from these assets are available solely for the benefit of the investors in these asset-backed securities.  Investors in asset-backed securities do not have recourse to our other assets, and neither TMCC nor our affiliates guarantee these obligations.  We are not required to repurchase or make reallocation payments with respect to the Securitized Assets that become delinquent or default after securitization.  As seller and servicer of the Securitized Assets, we are required to repurchase or make a reallocation payment with respect to the underlying assets that are subsequently discovered not to have met specified eligibility requirements. This repurchase obligation is customary in securitization transactions.

We service the Securitized Assets in accordance with our customary servicing practices and procedures.  Our servicing duties include collecting payments on Securitized Assets and submitting them to a trustee for distribution to security holders and other interest holders.  We prepare monthly servicer certificates on the performance of the Securitized Assets, including collections, investor distributions, delinquencies, and credit losses.  We also perform administrative services for the special purpose entities.

Our use of special purpose entities in securitizations is consistent with conventional practice in the securitization market.  None of our officers, directors, or employees hold any equity interests or receive any direct or indirect compensation from our special purpose entities.  These entities do not own our stock or the stock of any of our affiliates.  Each special purpose entity has a limited purpose and generally is permitted only to purchase assets, issue asset-backed securities, and make payments to the security holders, other interest holders and certain service providers as required under the terms of the transactions.

65

Our securitizations are structured to provide credit enhancement to reduce the risk of loss to security holders and other interest holders in the asset-backed securities.  Credit enhancement may include some or all of the following:

• Overcollateralization:  The principal of the Securitized Assets that exceeds the principal amount of the related secured debt.

• Excess spread:  The expected interest collections on the Securitized Assets that exceed the expected fees and expenses of the special purpose entity, including the interest payable on the debt, net of swap settlements, if any.

• Cash reserve funds:  A portion of the proceeds from the issuance of asset-backed securities may be held by the securitization trust in a segregated reserve fund and may be used to pay principal and interest to security holders and other interest holders if collections on the underlying receivables are insufficient.

• Yield supplement arrangements:  Additional overcollateralization may be provided to supplement the future contractual interest payments from securitized receivables with relatively low contractual interest rates.

• Subordinated notes:  The subordination of principal and interest payments on subordinated notes may provide additional credit enhancement to holders of senior notes.

In addition to the credit enhancement described above, we may enter into interest rate swaps with our special purpose entities that issue variable rate debt.  Under the terms of these swaps, the special purpose entities are obligated to pay TMCC a fixed rate of interest on payment dates in exchange for receiving a floating rate of interest on notional amounts equal to the outstanding balance of the secured debt.  This arrangement enables the special purpose entities to mitigate the interest rate risk inherent in issuing variable rate debt that is secured by fixed rate Securitized Assets.

Securitized Assets and the related debt remain on our Consolidated Balance Sheets.  We recognize financing revenue on the Securitized Assets.  We also recognize interest expense on the secured debt issued by the special purpose entities and maintain an allowance for credit losses on the Securitized Assets to cover estimated probable credit losses using a methodology consistent with that used for our non-securitized asset portfolio.  The interest rate swaps between TMCC and the special purpose entities are considered intercompany transactions and therefore are eliminated in our consolidated financial statements.

Securitization

We maintain shelf registration statements with the Securities and Exchange Commission (“SEC”) to provide for the issuance of securities backed by Securitized Assets in the U.S. capital markets.  We regularly sponsor public securitization trusts that issue securities backed by retail finance receivables, including registered securities that we retain.  Funding obtained from our public term securitization transactions is repaid as the underlying Securitized Assets amortize.  None of these securities have defaulted, experienced any events of default or failed to pay principal in full at maturity.  As of September 30, 2017 and March 31, 2017, we did not have any outstanding lease securitization transactions registered with the SEC.

We periodically enter into public term securitization transactions whereby we agree to use the proceeds solely to acquire retail and lease contracts financing new Toyota and Lexus vehicles of certain specified “green” models.  The terms of the securitization transaction are consistent with the terms of our other similar transactions except that the proceeds we receive are included in Restricted cash and cash equivalents in our Consolidated Balance Sheets, when applicable.

We also regularly execute private securitization transactions of Securitized Assets with bank-sponsored multi-seller asset-backed conduits.  Funding obtained from our private securitization transactions is repaid as the underlying Securitized Assets amortize.  

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Liquidity Facilities and Letters of Credit

For additional liquidity purposes, we maintain syndicated credit facilities with certain banks.

364 Day Credit Agreement, Three Year Credit Agreement and Five Year Credit Agreement

In November 2016, TMCC, Toyota Credit de Puerto Rico Corp. (“TCPR”) and other Toyota affiliates entered into a $5.0 billion 364 day syndicated bank credit facility, a $5.0 billion three year syndicated bank credit facility and a $5.0 billion five year syndicated bank credit facility, expiring in fiscal 2018, 2020, and 2022, respectively.

The ability to make draws is subject to covenants and conditions customary in transactions of this nature, including negative pledge provisions, cross-default provisions and limitations on certain consolidations, mergers and sales of assets.  These agreements may be used for general corporate purposes and none were drawn upon as of September 30, 2017 and March 31, 2017.  We are currently in compliance with the covenants and conditions of the credit agreements described above.

Other Unsecured Credit Agreements

TMCC has entered into additional unsecured credit facilities with various banks.  As of September 30, 2017, TMCC had committed bank credit facilities totaling $5.6 billion of which $2.2 billion, $400 million, $2.3 billion, and $725 million mature in fiscal 2018, 2019, 2020, and 2021, respectively.

These credit agreements contain covenants and conditions customary in transactions of this nature, including negative pledge provisions, cross-default provisions and limitations on certain consolidations, mergers and sales of assets.  These credit facilities were not drawn upon as of September 30, 2017 and March 31, 2017. We are currently in compliance with the covenants and conditions of the credit agreements described above.

Credit Ratings

The cost and availability of unsecured financing is influenced by credit ratings, which are intended to be an indicator of the creditworthiness of a particular company, security, or obligation.  Lower ratings generally result in higher borrowing costs as well as reduced access to capital markets.  Credit ratings are not recommendations to buy, sell, or hold securities, and are subject to revision or withdrawal at any time by the assigning credit rating organization.  Each credit rating organization may have different criteria for evaluating risk, and therefore ratings should be evaluated independently for each organization.  Our credit ratings depend in part on the existence of the credit support agreements of TFSC and TMC.  Refer to “Part I, Item 1A. Risk Factors - Our borrowing costs and access to the unsecured debt capital markets depend significantly on the credit ratings of TMCC and its parent companies and our credit support arrangements” in our fiscal 2017 Form 10-K.

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DERIVATIVE INSTRUMENTS

Risk Management Strategy

Our liabilities consist mainly of fixed and floating rate debt, denominated in U.S. dollars and various other currencies, which we issue in the global capital markets, while our assets consist primarily of U.S. dollar denominated, fixed rate receivables.  We enter into interest rate swaps, interest rate floors, interest rate caps and foreign currency swaps to hedge the interest rate and foreign currency risks that result from the different characteristics of our assets and liabilities.  Our use of derivative transactions is intended to reduce long-term fluctuations in the fair value of assets and liabilities caused by market movements.  All of our derivative activities are authorized and monitored by our management and our Asset-Liability Committee which provides a framework for financial controls and governance to manage market risk.

Accounting for Derivative Instruments

All derivative instruments are recorded on the balance sheet at fair value, taking into consideration the effects of legally enforceable master netting agreements that allow us to net settle positive and negative positions and offset cash collateral held with the same counterparty on a net basis. Changes in the fair value of derivatives are recorded in Interest expense in our Consolidated Statements of Income.

We categorize derivatives as those designated for hedge accounting (“hedge accounting derivatives”) and those that are not designated for hedge accounting (“non-hedge accounting derivatives”).  At the inception of a derivative contract, we may elect to designate a derivative as a hedge accounting derivative.

We may also, from time-to-time, issue debt which can be characterized as hybrid financial instruments. These obligations often contain an embedded derivative which may require bifurcation.  Changes in the fair value of the bifurcated embedded derivative are reported in Interest expense in our Consolidated Statements of Income.  As of September 30, 2017 and March 31, 2017, we had no outstanding embedded derivatives that are required to be bifurcated. Refer to Note 1 – Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements in our Form 10-K for the fiscal year ended March 31, 2017, and Note 7 – Derivatives, Hedging Activities and Interest Expense of the Notes to Consolidated Financial Statements in this Form 10-Q for additional information.

Derivative Assets and Liabilities

The following table summarizes our derivative assets and liabilities, which are included in Other assets and Other liabilities in our Consolidated Balance Sheets:

	September 30,			March 31,
(Dollars in millions)	2017			2017
Gross derivatives assets, net of credit valuation adjustment	$	741		$	599
Less: Counterparty netting and collateral		(679	)		(548	)
Derivative assets, net	$	62		$	51
Gross derivative liabilities, net of credit valuation adjustment	$	616		$	1,453
Less: Counterparty netting and collateral		(600	)		(1,407	)
Derivative liabilities, net	$	16		$	46

Collateral represents cash received or deposited under reciprocal arrangements that we have entered into with our derivative counterparties.  As of September 30, 2017, we held collateral of $309 million, which offset derivative assets, and we posted collateral of $230 million, which offset derivative liabilities.  We also held excess collateral of $7 million which we did not use to offset derivative assets, and we posted excess collateral of $4 million which we did not use to offset derivative liabilities.  As of March 31, 2017, we held collateral of $154 million, which offset derivative assets, and we posted collateral of $1,013 million which offset derivative liabilities.  We also held excess collateral of $5 million, which we did not use to offset derivative assets, and we posted excess collateral of $5 million which we did not use to offset derivative liabilities.  

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Derivative Counterparty Credit Risk

We manage derivative counterparty credit risk by maintaining policies for entering into derivative contracts, exercising our rights under our derivative contracts, requiring the posting of collateral and actively monitoring our exposure to counterparties.

All of our derivative counterparties to which we had credit exposure at September 30, 2017 were assigned investment grade ratings by a credit rating organization.  Our counterparty credit risk could be adversely affected by deterioration of the global economy and financial distress in the banking industry.

Our International Swaps and Derivatives Association (“ISDA”) Master Agreements contain reciprocal collateral arrangements which help mitigate our exposure to the credit risk associated with our counterparties.  As of September 30, 2017, we have daily valuation and collateral exchange arrangements with all of our counterparties.  Our collateral agreements with substantially all our counterparties include a zero threshold, full collateralization requirement, which has significantly reduced counterparty credit risk exposure.  Under our ISDA Master Agreements, cash is the only permissible form of collateral.  Neither we nor our counterparties are required to hold collateral in a segregated account.  Our collateral agreements include legal right of offset provisions, pursuant to which collateral amounts are netted against derivative assets or derivative liabilities, the net amount of which is included in Other assets or Other liabilities in our Consolidated Balance Sheets.

In addition, many of our ISDA Master Agreements contain reciprocal ratings triggers providing either party with an option to terminate the agreement and related transactions at market value in the event of a ratings downgrade below a specified threshold.  Refer to “Part I. Item 1A. Risk Factors” in our fiscal 2017 Form 10-K for further discussion.

A summary of our net counterparty credit exposure by credit rating (net of collateral held) is presented below:

	September 30,		March 31,
(Dollars in millions)	2017		2017
Credit Rating
AA	$	9	$	1
A		55		52
Total net counterparty credit exposure	$	64	$	53

We exclude from the table above credit valuation adjustments of $2 million as of September 30, 2017 and March 31, 2017 related to non-performance risk of our counterparties.  All derivative credit valuation adjustments are recorded in Interest expense in our Consolidated Statements of Income.  

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NEW ACCOUNTING STANDARDS

Refer to Note 1 – Interim Financial Data of the Notes to Consolidated Financial Statements.

OFF-BALANCE SHEET ARRANGEMENTS

Guarantees

TMCC has guaranteed the payments of principal and interest with respect to the bond obligations that were issued by Putnam County, West Virginia and Gibson County, Indiana to finance the construction of pollution control facilities at manufacturing plants of certain TMCC affiliates.  Refer to Note 12 - Commitments and Contingencies of the Notes to Consolidated Financial Statements for further discussion.

Lending Commitments

A description of our lending commitments is included under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, Off-Balance Sheet Arrangements” and Note 15 - Related Party Transactions of the Notes to Consolidated Financial Statements in our fiscal 2017 Form 10-K, as well as above in Note 12 - Commitments and Contingencies of the Notes to Consolidated Financial Statements.

Indemnification

Refer to Note 12 - Commitments and Contingencies of the Notes to Consolidated Financial Statements for a description of agreements containing indemnification provisions.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We have omitted this section pursuant to General Instruction H(2) of Form 10-Q.

ITEM 4. CONTROLS AND PROCEDURES

As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (the principal executive officer and principal financial officer) and Chief Accounting Officer (the principal accounting officer), of the effectiveness of our “disclosure controls and procedures” as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”).  Based on this evaluation, the Chief Executive Officer (“CEO”) and Chief Accounting Officer (“CAO”) concluded that the disclosure controls and procedures were effective as of September 30, 2017, to ensure that information required to be disclosed in reports filed under the Exchange Act was recorded, processed, summarized and reported within the time periods specified by the SEC’s rules, regulations, and forms and that such information is accumulated and communicated to our CEO and CAO, as appropriate, to allow timely decisions regarding required disclosures.

There have been no changes in our internal control over financial reporting that occurred during the three months ended September 30, 2017, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Litigation

Various legal actions, governmental proceedings and other claims are pending or may be instituted or asserted in the future against us with respect to matters arising in the ordinary course of business.  Certain of these actions are or purport to be class action suits, seeking sizeable damages and/or changes in our business operations, policies and practices.  Certain of these actions are similar to suits that have been filed against other financial institutions and captive finance companies.  We perform periodic reviews of pending claims and actions to determine the probability of adverse verdicts and resulting amounts of liability.  We establish accruals for legal claims when payments associated with the claims become probable and the costs can be reasonably estimated.  When we are able, we also determine estimates of reasonably possible loss or range of loss, whether in excess of any related accrued liability or where there is no accrued liability.  Refer to Note 12 – Commitments and Contingencies of the Notes to Consolidated Financial Statements.  Given the inherent uncertainty associated with legal matters, the actual costs of resolving legal claims and associated costs of defense may be substantially higher or lower than the amounts for which accruals have been established.  Based on available information and established accruals, we do not believe it is reasonably possible that the results of these proceedings, either individually or in the aggregate, will have a material adverse effect on our financial condition or results of operations.

ITEM 1A. RISK FACTORS

There are no material changes from the risk factors set forth under “Item 1A. Risk Factors” in our fiscal 2017 Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

We have omitted this section pursuant to General Instruction H(2) of Form 10-Q.

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

We have omitted this section pursuant to General Instruction H(2) of Form 10-Q.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6.   EXHIBITS

See Exhibit Index on page 73.

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EXHIBIT INDEX

Exhibit Number	Description	Method of Filing
3.1	Restated Articles of Incorporation filed with the California Secretary of State on April 1, 2010	(1)
3.2	Bylaws as amended through December 8, 2000	(2)
4.1	Amended and Restated Agency Agreement, dated September 8, 2017, among Toyota Motor Credit Corporation, Toyota Motor Finance (Netherlands) B.V., Toyota Credit Canada Inc., Toyota Finance Australia Limited and The Bank of New York Mellon acting through its London branch	(3)
4.2	Amended and Restated Note Agency Agreement dated September 8, 2017, among Toyota Motor Credit Corporation, The Bank of New York Mellon SA/NV, Luxembourg Branch and The Bank of New York Mellon, acting through its London Branch	(4)
12.1	Calculation of ratio of earnings to fixed charges	Filed Herewith
31.1	Certification of Chief Executive Officer	Filed Herewith
31.2	Certification of Chief Accounting Officer	Filed Herewith
32.1	Certification pursuant to 18 U.S.C. Section 1350	Furnished Herewith
32.2	Certification pursuant to 18 U.S.C. Section 1350	Furnished Herewith
101.INS	XBRL instance document	Filed Herewith
101.CAL	XBRL taxonomy extension calculation linkbase document	Filed Herewith
101.DEF	XBRL taxonomy extension definition linkbase document	Filed Herewith
101.LAB	XBRL taxonomy extension labels linkbase document	Filed Herewith
101.PRE	XBRL taxonomy extension presentation linkbase document	Filed Herewith
101.SCH	XBRL taxonomy extension schema document	Filed Herewith

(1) Incorporated herein by reference to the same numbered Exhibit filed with our Annual Report on Form 10-K for the fiscal year ended March 31, 2010, Commission File Number 1-9961.

(2) Incorporated herein by reference to the same numbered Exhibit filed with our Quarterly Report on Form 10-Q for the three months ended December 31, 2000, Commission File Number 1-9961.

(3) Incorporated herein by reference to Exhibit 4.1, filed with our Current Report on Form 8-K/A dated September 8, 2017, Commission File Number 1-9961.

(4) Incorporated herein by reference to Exhibit 4.2, filed with our Current Report on Form 8-K/A dated September 8, 2017, Commission File Number 1-9961.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	TOYOTA MOTOR CREDIT CORPORATION
	(Registrant)
Date: November 8, 2017	By	/s/ Michael Groff
		Michael Groff
		President and Chief Executive Officer
		(Principal Executive Officer and Principal Financial Officer)
Date: November 8, 2017	By	/s/ Ron Chu
		Ron Chu
		Group Vice President and Chief Accounting Officer

74

EX-12.1

EXHIBIT 12.1

TOYOTA MOTOR CREDIT CORPORATION

CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES

	Three Months Ended				Six Months Ended
	September 30,				September 30,
(Dollars in millions)	2017		2016		2017		2016
Consolidated income before provision for income taxes	$	187	$	258	$	448	$	645
Fixed charges:
Interest1	$	452	$	297	$	900	$	604
Portion of rent expense representative of the interest    factor (deemed to be one-third)		3		2		5		4
Total fixed charges	$	455	$	299	$	905	$	608
Earnings available for fixed charges	$	642	$	557	$	1,353	$	1,253
Ratio of earnings to fixed charges		1.41		1.86		1.50		2.06

¹ Components of interest expense are discussed under “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, Interest Expense.”

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Michael Groff, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Toyota Motor Credit Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 8, 2017	By	/s/ Michael Groff
		Michael Groff
		President and
		Chief Executive Officer (Principal Executive Officer and Principal Financial Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Ron Chu, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Toyota Motor Credit Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  November 8, 2017	By	/s/ Ron Chu
		Ron Chu
		Group Vice President and
		Chief Accounting Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002*

In connection with the Quarterly Report of Toyota Motor Credit Corporation (the "Company") on Form 10-Q for the period ended September 30, 2017 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Michael Groff, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By	/s/ Michael Groff
	Michael Groff
	President and Chief Executive Officer (Principal Executive Officer and Principal Financial Officer)
	November 8, 2017

* A signed original of this written statement required by Section 906 has been provided to Toyota Motor Credit Corporation and will be retained by Toyota Motor Credit Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002*

In connection with the Quarterly Report of Toyota Motor Credit Corporation (the "Company") on Form 10-Q for the period ended September 30, 2017 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Ron Chu, Chief Accounting Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By	/s/ Ron Chu
	Ron Chu
	Group Vice President and Chief Accounting Officer
	November 8, 2017

* A signed original of this written statement required by Section 906 has been provided to Toyota Motor Credit Corporation and will be retained by Toyota Motor Credit Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

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Document and Entity Information - shares	6 Months Ended
	Sep. 30, 2017	Oct. 31, 2017
Document And Entity Information [Abstract]
Document Type	10-Q
Document Period End Date	Sep. 30, 2017
Amendment Flag	false
Entity Registrant Name	Toyota Motor Credit Corporation
Entity Central Index Key	0000834071
Current Fiscal Year End Date	--03-31
Trading Symbol	TMCC
Entity Filer Category	Non-accelerated Filer
Entity Common Stock Shares Outstanding		91,500
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2

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Consolidated Statements of Income - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Financing revenues:
Operating lease	$ 2,016	$ 1,925	$ 3,997	$ 3,816
Retail	490	459	964	915
Dealer	141	112	284	223
Total financing revenues	2,647	2,496	5,245	4,954
Depreciation on operating leases	1,719	1,683	3,400	3,272
Interest expense	452	297	900	604
Net financing revenues	476	516	945	1,078
Insurance earned premiums and contract revenues	221	199	437	392
Investment and other income, net	55	42	102	81
Realized gains, net on investments in marketable securities	1	70	42	83
Net financing revenues and other revenues	753	827	1,526	1,634
Expenses:
Provision for credit losses	127	161	212	213
Operating and administrative	337	317	650	596
Insurance losses and loss adjustment expenses	102	91	216	180
Total expenses	566	569	1,078	989
Income before income taxes	187	258	448	645
Provision for income taxes	70	95	166	241
Net income	$ 117	$ 163	$ 282	$ 404

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Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 117	$ 163	$ 282	$ 404
Other comprehensive income (loss), net of tax:
Net unrealized gains on available-for-sale marketable securities [net of tax provision of ($5), ($10), ($15) and ($32), respectively]	9	16	26	52
Reclassification adjustment for net gains on available-for-sale marketable securities included in realized gains, net on investments in marketable securities [net of tax provision of $0, $27, $16 and $32, respectively]	(1)	(43)	(26)	(51)
Other comprehensive income (loss)	8	(27)	0	1
Comprehensive income	$ 125	$ 136	$ 282	$ 405

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Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Statement Of Income And Comprehensive Income [Abstract]
Net unrealized gains on available-for-sale marketable securities, tax provision	$ (5)	$ (10)	$ (15)	$ (32)
Reclassification adjustment for net gains on available-for-sale marketable securities included in realized gains, net on investment in marketable securities, net of tax provision	$ 0	$ 27	$ 16	$ 32

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Consolidated Balance Sheets - USD ($) $ in Millions	Sep. 30, 2017	Mar. 31, 2017
ASSETS
Cash and cash equivalents	$ 4,682	$ 4,198
Restricted cash	1,028	1,087
Investments in marketable securities	6,128	5,692
Finance receivables, net	67,396	68,462
Investments in operating leases, net	38,823	38,152
Other assets	2,043	2,044
Total assets	120,100	119,635
LIABILITIES AND SHAREHOLDER’S EQUITY
Debt	98,223	98,233
Deferred income taxes	8,149	7,926
Other liabilities	3,922	3,952
Total liabilities	110,294	110,111
Commitments and contingencies (Refer to Note 12)
Shareholder’s equity:
Capital stock, no par value (100,000 shares authorized; 91,500 issued and outstanding) at September 30, 2017 and March 31, 2017	915	915
Additional paid-in capital	2	2
Accumulated other comprehensive income	25	25
Retained earnings	8,864	8,582
Total shareholder's equity	9,806	9,524
Total liabilities and shareholder's equity	$ 120,100	$ 119,635

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Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2017	Mar. 31, 2017
Statement Of Financial Position [Abstract]
Common Stock, Par or Stated Value Per Share
Common Stock, Shares Authorized	100,000	100,000
Common Stock, Shares, Issued	91,500	91,500
Common Stock, Shares, Outstanding	91,500	91,500

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Consolidated Balance Sheets (Supplemental) - USD ($) $ in Millions	Sep. 30, 2017	Mar. 31, 2017
ASSETS
Finance receivables, net	$ 67,396	$ 68,462
Investments in operating leases, net	38,823	38,152
Other assets	2,043	2,044
Total assets	120,100	119,635
LIABILITIES
Debt	98,223	98,233
Other liabilities	3,922	3,952
Total liabilities	110,294	110,111
Variable Interest Entity, Primary Beneficiary
ASSETS
Finance receivables, net	12,219	12,865
Investments in operating leases, net	6,774	4,888
Other assets	129	87
Total assets	19,122	17,840
LIABILITIES
Debt	14,649	14,319
Other liabilities	8	6
Total liabilities	$ 14,657	$ 14,325

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Consolidated Statements of Shareholder's Equity - USD ($) $ in Millions	Total	Capital stock	Additional paid-in capital	Accumulated other comprehensive income	Retained earnings
Balance at Mar. 31, 2016	$ 9,397	$ 915	$ 2	$ 165	$ 8,315
Net income	404	0	0	0	404
Other comprehensive income (loss), net of tax	1	0	0	1	0
Balance at Sep. 30, 2016	9,802	915	2	166	8,719
Balance at Mar. 31, 2017	9,524	915	2	25	8,582
Net income	282	0	0	0	282
Other comprehensive income (loss), net of tax	0	0	0	0	0
Balance at Sep. 30, 2017	$ 9,806	$ 915	$ 2	$ 25	$ 8,864

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Consolidated Statements of Cash Flows - USD ($) $ in Millions	6 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Cash flows from operating activities:
Net income	$ 282	$ 404
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	3,439	3,303
Recognition of deferred income	(951)	(877)
Provision for credit losses	212	213
Amortization of deferred costs	307	315
Foreign currency and other adjustments to the carrying value of debt, net	1,035	(114)
Net realized gains on available-for-sale securities	(42)	(83)
Net change in:
Restricted cash	59	7
Derivative assets	(11)	23
Other assets (Note 8) and accrued interest	(154)	(179)
Deferred income taxes	224	203
Derivative liabilities	(30)	(2)
Other liabilities	11	124
Net cash provided by operating activities	4,381	3,337
Cash flows from investing activities:
Purchase of investments in marketable securities	(5,757)	(2,209)
Proceeds from sales of investments in marketable securities	1,248	407
Proceeds from maturities of investments in marketable securities	4,107	1,711
Acquisition of finance receivables	(12,638)	(12,572)
Collection of finance receivables	12,004	12,173
Net change in wholesale and certain working capital receivables	1,651	466
Acquisition of investments in operating leases	(8,612)	(9,595)
Disposals of investments in operating leases	4,938	5,427
Net change in financing support provided to affiliates	232	973
Cash equivalents (restricted) to acquire finance receivables and investment in operating leases, net	0	(147)
Other, net	(37)	(32)
Net cash used in investing activities	(2,864)	(3,398)
Cash flows from financing activities:
Proceeds from issuance of debt	11,707	13,089
Payments on debt	(11,380)	(13,576)
Net change in commercial paper	(1,371)	1,093
Net change in financing support provided by affiliates	11	(9)
Net cash (used in) provided by financing activities	(1,033)	597
Net increase in cash and cash equivalents	484	536
Cash and cash equivalents at the beginning of the period	4,198	2,701
Cash and cash equivalents at the end of the period	4,682	3,237
Supplemental disclosures:
Interest paid, net	851	684
Income taxes paid (received), net	$ 85	$ (5)

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Interim Financial Data

6 Months Ended

Sep. 30, 2017

Accounting Policies [Abstract]

Interim Financial Data

Note 1 – Interim Financial Data

Basis of Presentation

The information furnished in these unaudited interim consolidated financial statements as of and for the three and six months ended September 30, 2017 and 2016 has been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”).  In the opinion of management, the unaudited consolidated financial information reflects all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results for the interim periods presented.  The results of operations for the three and six months ended September 30, 2017 do not necessarily indicate the results which may be expected for the full fiscal year ending March 31, 2018 (“fiscal 2018”).

These financial statements should be read in conjunction with the Consolidated Financial Statements, significant accounting policies, and other Notes to Consolidated Financial Statements included in Toyota Motor Credit Corporation’s Annual Report on Form 10-K (“Form 10-K”) for the fiscal year ended March 31, 2017 (“fiscal 2017”), which was filed with the Securities and Exchange Commission on June 1, 2017.  References herein to “TMCC” denote Toyota Motor Credit Corporation, and references herein to “we”, “our”, and “us” denote Toyota Motor Credit Corporation and its consolidated subsidiaries.

Related party transactions are disclosed in Note 14 – Related Party Transactions.

Note 1 – Interim Financial Data (Continued)

New Accounting Guidance

In May 2014, the Financial Accounting Standards Board ("FASB") issued new guidance on the recognition of revenue from contracts with customers.  This comprehensive standard will supersede virtually all existing revenue recognition guidance.  In August 2015, the FASB issued a one-year deferral of the effective date, with early adoption as of the original effective date permitted.  The FASB also subsequently issued guidance amending and clarifying various aspects of the new revenue recognition standard.  We plan to adopt the new revenue guidance effective April 1, 2018 with a cumulative-effect adjustment to the current period opening balance of retained earnings.  We do not expect the adoption of this standard to have a material impact on our operating lease, retail and dealer financing revenues as the majority of those revenues are outside the scope of the standard.  However, certain products within our insurance operations fall within the scope of this guidance.  Based on our evaluation of contracts related to those products, we expect the application of this guidance will result in changes to both the timing of recognition and the classification of revenues and expenses.  While our assessment is not complete, we do not expect these changes to have a material impact on our income before taxes.  We continue to assess the impact of this guidance on our consolidated financial statements and related disclosures.

In January 2016, the FASB issued new guidance that addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments and will require entities to measure equity investments at fair value and recognize any changes in fair value in earnings.  We will adopt this new guidance effective April 1, 2018 with a cumulative-effect adjustment to the current period opening balance of retained earnings. This guidance also requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from changes in instrument-specific credit risk for instruments where the entity has elected the fair value option.  The adoption of this guidance is not expected to have a material impact on our consolidated financial statements.

In February 2016, the FASB issued new guidance that introduces a lessee model that brings most leases on the balance sheet and aligns many of the underlying principles of the new lessor model with those in the new revenue recognition standard.  The new leasing standard represents a wholesale change to lease accounting for lessees. Upon adoption, we expect to recognize lease liabilities and right-of-use assets (at their present value) in our Consolidated Balance Sheets related to predominantly all of the future minimum lease payments as disclosed in Note 12 – Commitments and Contingencies.  This accounting guidance is effective for us on April 1, 2019.  We continue to evaluate the other potential impacts of this guidance on our consolidated financial statements and related disclosures.

In June 2016, the FASB issued new guidance that introduces a new impairment model based on expected losses rather than incurred losses for certain types of financial instruments.  It also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination.  We expect this new guidance will result in an increase in our allowance for credit losses; the magnitude of which is under evaluation.  This accounting guidance is effective for us on April 1, 2020.  We are currently evaluating the other potential impacts of this guidance on our consolidated financial statements.

In August 2016, the FASB issued new guidance that is intended to reduce diversity in practice in the classification of certain items in the statement of cash flows. This accounting guidance is effective for us on April 1, 2018.  The adoption of this guidance is not expected to have a material impact on our consolidated financial statements and related disclosures.

In November 2016, the FASB issued new guidance that clarifies how restricted cash and cash equivalents should be classified and presented in the statement of cash flows and requires new disclosures related to restricted cash and cash equivalents.  This guidance was intended to reduce diversity in practice in the classification of restricted cash and cash equivalents on the statement of cash flows.  This accounting guidance is effective for us on April 1, 2018 at which time we will no longer report the change in restricted cash and cash equivalents in the operating or investing sections in our Consolidated Statements of Cash Flows, and cash and cash equivalents at the beginning and end of the period will include restricted cash and cash equivalents.  These changes will be applied using a retrospective transition method to each period presented.

In March 2017, the FASB issued new guidance that requires certain premiums on callable debt securities to be amortized to the earliest call date.  This accounting guidance is effective for us on April 1, 2019.  We are currently evaluating the potential impact of this guidance on our consolidated financial statements.

Note 1 – Interim Financial Data (Continued)

In August 2017, the FASB issued new guidance that makes targeted improvements to accounting for hedging activities.  This guidance eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires, for qualifying hedges, the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. The guidance provides new alternatives for applying hedge accounting and measuring the hedged item in fair value hedges of interest rate risk.  The guidance also modifies the accounting for components excluded from the assessment of hedge effectiveness, eases documentation and assessment requirements and modifies certain disclosure requirements.  This accounting guidance is effective for us on April 1, 2019.  We are currently evaluating the potential impact of this guidance on our consolidated financial statements and disclosures.

Recently Adopted Accounting Guidance

In April 2017, we adopted new FASB accounting guidance which clarifies that a change in the counterparty to a designated derivative hedging instrument does not, in and of itself, require de-designation of that hedging relationship provided that all other hedge accounting criteria continue to be met.  The adoption of this guidance did not have an impact on our consolidated financial statements.

In April 2017, we adopted new FASB accounting guidance which clarifies whether an embedded contingent put or call option is clearly and closely related to the debt host when bifurcating an embedded derivative.  The adoption of this guidance did not have an impact on our consolidated financial statements.

In April 2017, we adopted new FASB accounting guidance that further amends the analysis a reporting entity must perform to determine whether it should consolidate certain legal entities.  This guidance specifically addresses interests held through related parties that are under common control.  The adoption of this guidance did not change our consolidation conclusions and therefore did not have an impact on our consolidated financial statements.

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Fair Value Measurements

6 Months Ended

Sep. 30, 2017

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 2 – 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 in our Consolidated Balance Sheets.  

	September 30, 2017
									Counterparty
									netting &			Fair
	Level 1		Level 2			Level 3			collateral			value
Cash equivalents:
Money market instruments	$	447	$	1,251		$	-		$	-		$	1,698
Certificates of deposit		-		2,700			-			-			2,700
Cash equivalents total		447		3,951			-			-			4,398
Available-for-sale securities:
Debt instruments:
U.S. government and agency obligations		2,538		30			-			-			2,568
Municipal debt securities		-		11			-			-			11
Certificates of deposit		-		875			-			-			875
Commercial paper		-		5			-			-			5
Corporate debt securities		146		197			8			-			351
Mortgage-backed securities:
U.S. government agency		-		42			-			-			42
Non-agency residential		-		-			2			-			2
Non-agency commercial		-		-			38			-			38
Asset-backed securities		-		-			36			-			36
Equity instruments:
Fixed income mutual funds:
Fixed income mutual funds measured at net asset value													669
Total return bond funds		1,531		-			-			-			1,531
Available-for-sale securities total		4,215		1,160			84			-			6,128
Derivative assets:
Interest rate swaps		-		426			-			-			426
Interest rate floors		-		1			-			-			1
Foreign currency swaps		-		314			-			-			314
Counterparty netting and collateral		-		-			-			(679	)		(679	)
Derivative assets total		-		741			-			(679	)		62
Assets at fair value		4,662		5,852			84			(679	)		10,588
Derivative liabilities:
Interest rate swaps		-		(244	)		(12	)		-			(256	)
Foreign currency swaps		-		(360	)		-			-			(360	)
Counterparty netting and collateral		-		-			-			600			600
Liabilities at fair value		-		(604	)		(12	)		600			(16	)
Net assets at fair value	$	4,662	$	5,248		$	72		$	(79	)	$	10,572

Note 2 – Fair Value Measurements (Continued)

	March 31, 2017
									Counterparty
									netting &			Fair
	Level 1		Level 2			Level 3			collateral			value
Cash equivalents:
Money market instruments	$	287	$	1,045		$	-		$	-		$	1,332
Certificates of deposit		-		2,630			-			-			2,630
Cash equivalents total		287		3,675			-			-			3,962
Available-for-sale securities:
Debt instruments:
U.S. government and agency obligations		2,273		33			2			-			2,308
Municipal debt securities		-		11			-			-			11
Certificates of deposit		105		650			-			-			755
Corporate debt securities		211		150			8			-			369
Mortgage-backed securities:
U.S. government agency		-		45			-			-			45
Non-agency residential		-		-			2			-			2
Non-agency commercial		-		-			37			-			37
Asset-backed securities		-		-			31			-			31
Equity instruments:
Fixed income mutual funds:
Fixed income mutual funds measured at net asset value													1,740
Total return bond funds		394		-			-			-			394
Available-for-sale securities total		2,983		889			80			-			5,692
Derivative assets:
Interest rate swaps		-		474			1			-			475
Interest rate floors		-		2			-			-			2
Foreign currency swaps		-		122			-			-			122
Counterparty netting and collateral		-		-			-			(548	)		(548	)
Derivative assets total		-		598			1			(548	)		51
Assets at fair value		3,270		5,162			81			(548	)		9,705
Derivative liabilities:
Interest rate swaps		-		(271	)		(6	)		-			(277	)
Foreign currency swaps		-		(1,114	)		(62	)		-			(1,176	)
Counterparty netting and collateral		-		-			-			1,407			1,407
Liabilities at fair value		-		(1,385	)		(68	)		1,407			(46	)
Net assets at fair value	$	3,270	$	3,777		$	13		$	859		$	9,659

Note 2 – Fair Value Measurements (Continued)

Transfers between levels of the fair value hierarchy are recognized at the end of their respective reporting periods.  Transfers between levels of the fair value hierarchy during the three and six months ended September 30, 2017 and 2016 resulted from changes in the transparency of inputs and were not significant.

The following tables summarize the rollforward of all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs:

	Three Months Ended September 30, 2017
															Total net
															assets
	Available-for-sale securities											Derivative instruments, net			(liabilities)
									Total
	Corporate		Mortgage-			Asset-			available-			Interest
	debt		backed			backed			for-sale			rate
	securities		securities			securities			securities			swaps
Fair value, July 1, 2017	$	8	$	43		$	35		$	86		$	12		$	98
Total gains (losses)
Included in earnings		-		-			-			-			5			5
Included in other comprehensive income		-		-			1			1			-			1
Purchases, issuances, sales, and settlements
Purchases		-		-			5			5			-			5
Issuances		-		-			-			-			-			-
Sales		-		-			-			-			-			-
Settlements		-		(3	)		(5	)		(8	)		(29	)		(37	)
Transfers in to Level 3		-		-			-			-			-			-
Transfers out of Level 3		-		-			-			-			-			-
Fair value, September 30, 2017	$	8	$	40		$	36		$	84		$	(12	)	$	72
The amount of total gains   (losses) included in earnings   attributable to assets held   at the reporting date												$	5			5

	Three Months Ended September 30, 2016
																							Total net
																							assets
	Available-for-sale securities													Derivative instruments, net									(liabilities)
	U.S.										Total									Total
	government		Corporate		Mortgage-			Asset-			available-			Interest			Foreign			derivative
	and agency		debt		backed			backed			for-sale			rate			currency			assets
	obligations		securities		securities			securities			securities			swaps			swaps			(liabilities)
Fair value, July 1, 2016	$	2	$	7	$	45		$	35		$	89		$	62		$	(42	)	$	20		$	109
Total gains (losses)
Included in earnings		-		-		-			-			-			-			(8	)		(8	)		(8	)
Included in other comprehensive income		-		1		-			-			1			-			-			-			1
Purchases, issuances, sales, and settlements
Purchases		-		-		-			1			1			-			-			-			1
Issuances		-		-		-			-			-			-			-			-			-
Sales		-		-		-			-			-			-			-			-			-
Settlements		-		-		(4	)		(2	)		(6	)		(29	)		1			(28	)		(34	)
Transfers in to Level 3		-		-		-			-			-			-			-			-			-
Transfers out of Level 3		-		-		-			-			-			-			-			-			-
Fair value, September 30, 2016	$	2	$	8	$	41		$	34		$	85		$	33		$	(49	)	$	(16	)	$	69
The amount of total gains   (losses) included in earnings   attributable to assets held   at the reporting date														$	-		$	(8	)	$	(8	)	$	(8	)

Note 2 – Fair Value Measurements (Continued)

	Six Months Ended September 30, 2017
																								Total net
																								assets
	Available-for-sale securities														Derivative instruments, net									(liabilities)
	U.S.											Total									Total
	government			Corporate		Mortgage-			Asset-			available-			Interest			Foreign			derivative
	and agency			debt		backed			backed			for-sale			rate			currency			assets
	obligations			securities		securities			securities			securities			swaps			swaps			(liabilities)
Fair value, April 1, 2017	$	2		$	8	$	39		$	31		$	80		$	(5	)	$	(62	)	$	(67	)	$	13
Total gains (losses)
Included in earnings		-			-		-			-			-			18			7			25			25
Included in other comprehensive income		-			-		-			1			1			-			-			-			1
Purchases, issuances, sales, and settlements
Purchases		-			-		5			16			21			-			-			-			21
Issuances		-			-		-			-			-			-			-			-			-
Sales		-			-		-			-			-			-			-			-			-
Settlements		-			-		(4	)		(12	)		(16	)		(25	)		55			30			14
Transfers in to Level 3		-			-		-			-			-			-			-			-			-
Transfers out of Level 3		(2	)		-		-			-			(2	)		-			-			-			(2	)
Fair value, September 30, 2017	$	-		$	8	$	40		$	36		$	84		$	(12	)	$	-		$	(12	)	$	72
The amount of total gains   (losses) included in earnings   attributable to assets held   at the reporting date															$	18		$	-		$	18		$	18

	Six Months Ended September 30, 2016
																							Total net
																							assets
	Available-for-sale securities													Derivative instruments, net									(liabilities)
	U.S.										Total									Total
	government		Corporate		Mortgage-			Asset-			available-			Interest			Foreign			derivative
	and agency		debt		backed			backed			for-sale			rate			currency			assets
	obligations		securities		securities			securities			securities			swaps			swaps			(liabilities)
Fair value, April 1, 2016	$	2	$	7	$	45		$	37		$	91		$	39		$	(14	)	$	25		$	116
Total gains (losses)
Included in earnings		-		-		-			-			-			20			(32	)		(12	)		(12	)
Included in other comprehensive income		-		1		1			-			2			-			-			-			2
Purchases, issuances, sales, and settlements
Purchases		-		-		-			3			3			-			-			-			3
Issuances		-		-		-			-			-			-			-			-			-
Sales		-		-		-			-			-			-			-			-			-
Settlements		-		-		(5	)		(6	)		(11	)		(26	)		(3	)		(29	)		(40	)
Transfers in to Level 3		-		-		-			-			-			-			-			-			-
Transfers out of Level 3		-		-		-			-			-			-			-			-			-
Fair value, September 30, 2016	$	2	$	8	$	41		$	34		$	85		$	33		$	(49	)	$	(16	)	$	69
The amount of total gains   (losses) included in earnings   attributable to assets held   at the reporting date														$	20		$	(32	)	$	(12	)	$	(12	)

Note 2 – Fair Value Measurements (Continued)

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 September 30, 2017 and March 31, 2017.

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 change in the fair value measurements of these assets and liabilities, were not significant to our Consolidated Balance Sheets or Consolidated Statements of Income as of and for the three and six months ended September 30, 2017 and as of and for the year ended March 31, 2017.

Note 2 – Fair Value Measurements (Continued)

Financial Instruments

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

	September 30, 2017
	Carrying								Total Fair
	value		Level 1		Level 2		Level 3		Value
Financial assets
Finance receivables, net
Retail loan	$	51,283	$	-	$	-	$	51,349	$	51,349
Wholesale		9,198		-		-		9,252		9,252
Real estate		4,637		-		-		4,560		4,560
Working capital		2,143		-		-		2,177		2,177
Financial liabilities
Commercial paper	$	25,247	$	-	$	25,247	$	-	$	25,247
Unsecured notes and loans payable		58,327		-		57,166		2,058		59,224
Secured notes and loans payable		14,649		-		-		14,672		14,672

	March 31, 2017
	Carrying								Total Fair
	value		Level 1		Level 2		Level 3		Value
Financial assets
Finance receivables, net
Retail loan	$	50,682	$	-	$	-	$	50,733	$	50,733
Wholesale		10,819		-		-		10,881		10,881
Real estate		4,602		-		-		4,459		4,459
Working capital		2,218		-		-		2,222		2,222
Financial liabilities
Commercial paper	$	26,632	$	-	$	26,632	$	-	$	26,632
Unsecured notes and loans payable		57,282		-		55,838		2,385		58,223
Secured notes and loans payable		14,319		-		-		14,322		14,322

The carrying value of each class of finance receivables includes accrued interest and deferred fees and costs, net of deferred income and the allowance for credit losses.  Finance receivables, net, excludes related party transactions, for which the fair value approximates the carrying value, of $131 million and $136 million at September 30, 2017 and March 31, 2017, respectively.

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Investments in Marketable Securities

6 Months Ended

Sep. 30, 2017

Marketable Securities [Abstract]

Investments in Marketable Securities

Note 3 – Investments in Marketable Securities

We classify all of our investments in marketable securities as available-for-sale.  The amortized cost and estimated fair value of investments in marketable securities and related unrealized gains and losses were as follows:

	September 30, 2017
	Amortized		Unrealized		Unrealized			Fair
	cost		gains		losses			value
Available-for-sale securities:
Debt instruments:
U.S. government and agency obligations	$	2,576	$	-	$	(8	)	$	2,568
Municipal debt securities		9		2		-			11
Certificates of deposit		875		-		-			875
Commercial paper		5		-		-			5
Corporate debt securities		347		5		(1	)		351
Mortgage-backed securities:
U.S. government agency		41		1		-			42
Non-agency residential		1		1		-			2
Non-agency commercial		38		-		-			38
Asset-backed securities		36		-		-			36
Equity instruments:
Fixed income mutual funds:
Short-term floating NAV fund II		30		-		-			30
U.S. government sector fund		189		5		(1	)		193
Municipal sector fund		8		-		-			8
Investment grade corporate sector fund		95		1		-			96
High-yield sector fund		30		3		-			33
Real return sector fund		5		-		-			5
Mortgage sector fund		146		3		-			149
Asset-backed securities sector fund		56		2		-			58
Emerging market sector fund		38		4		-			42
International sector fund		54		1		-			55
Total return bond funds		1,510		21		-			1,531
Total investments in marketable securities	$	6,089	$	49	$	(10	)	$	6,128

Note 3 – Investments in Marketable Securities (Continued)

	March 31, 2017
	Amortized		Unrealized		Unrealized			Fair
	cost		gains		losses			value
Available-for-sale securities:
Debt instruments:
U.S. government and agency obligations	$	2,314	$	1	$	(7	)	$	2,308
Municipal debt securities		10		1	-				11
Certificates of deposit		755	-		-				755
Corporate debt securities		368		2		(1	)		369
Mortgage-backed securities:
U.S. government agency		45		1		(1	)		45
Non-agency residential		2	-		-				2
Non-agency commercial		37		1		(1	)		37
Asset-backed securities		31	-		-				31
Equity instruments:
Fixed income mutual funds:
Short-term floating NAV fund II		39	-		-				39
U.S. government sector fund		389	-		-				389
Municipal sector fund		20	-		-				20
Investment grade corporate sector fund		252		9	-				261
High-yield sector fund		83		6	-				89
Real return sector fund		147		5	-				152
Mortgage sector fund		390		2	-				392
Asset-backed securities sector fund		140		10	-				150
Emerging market sector fund		105		7	-				112
International sector fund		136	-		-				136
Total return bond funds		389		5	-				394
Total investments in marketable securities	$	5,652	$	50	$	(10	)	$	5,692

The Fixed income mutual funds, exclusive of the Total return bond funds, are investments in funds that are privately placed and managed by an open-end investment management company (the “Trust”).  If we elect to redeem shares, the Trust will normally redeem all shares for cash, but may, in unusual circumstances, redeem amounts exceeding the lesser of $250 thousand or 1 percent of the Trust’s asset value by payment in kind of securities held by the respective fund during any 90-day period.

The Total return bond funds are investments in actively traded open-end mutual funds.  Redemptions are subject to normal terms and conditions as described in each fund’s prospectus.

Note 3 – Investments in Marketable Securities (Continued)

Unrealized Losses on Securities

Investments in marketable securities in a continuous loss position for less than twelve months and for greater than twelve months were not significant as of September 30, 2017 and March 31, 2017.

Realized Gains and Losses on Securities

The following table represents realized gains and losses on our available-for-sale securities presented in our Consolidated Statements of Income:

	Three Months Ended					Six Months Ended
	September 30,					September 30,
	2017		2016			2017			2016
Available-for-sale securities:
Realized gains on sales	$	1	$	80		$	43		$	93
Realized losses on sales	$	-	$	-		$	(1	)	$	-
Other-than-temporary impairment	$	-	$	(10	)	$	-		$	(10	)

Contractual Maturities

The amortized cost, fair value, and contractual maturities of available-for-sale debt instruments are summarized in the following table.  Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay certain obligations.

	September 30, 2017
	AmortizedCost		Fair Value
Available-for-sale debt instruments:
Due within 1 year	$	1,980	$	1,978
Due after 1 year through 5 years		1,606		1,604
Due after 5 years through 10 years		142		142
Due after 10 years		84		86
Mortgage-backed and asset-backed securities1		116		118
Total	$	3,928	$	3,928

¹ Mortgage-backed and asset-backed securities are shown separately from other maturity groupings as these securities do not have a single maturity date.

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Finance Receivables, Net

6 Months Ended

Sep. 30, 2017

Receivables [Abstract]

Finance Receivables, Net

Note 4 – Finance Receivables, Net

Finance receivables, net consist of retail receivables and dealer financing, which includes accrued interest and deferred fees and costs, net of the allowance for credit losses and deferred income.  Finance receivables, net also includes securitized retail receivables, which represent retail receivables that have been sold for legal purposes to securitization trusts but continue to be included in our consolidated financial statements, as discussed further in Note 10 – Variable Interest Entities.  Cash flows from these securitized retail receivables are available only for the repayment of debt issued by these trusts and other obligations arising from the securitization transactions.  They are not available for payment of our other obligations or to satisfy claims of our other creditors.

Finance receivables, net consisted of the following:

	September 30,			March 31,
	2017			2017
Retail receivables	$	39,732		$	38,338
Securitized retail receivables		12,423			13,071
Dealer financing		16,231			17,899
		68,386			69,308
Deferred origination (fees) and costs, net		642			644
Deferred income		(1,150	)		(1,023	)
Allowance for credit losses
Retail and securitized retail receivables		(359	)		(344	)
Dealer financing		(123	)		(123	)
Total allowance for credit losses		(482	)		(467	)
Finance receivables, net	$	67,396		$	68,462

Credit Quality Indicators

We are exposed to credit risk on our finance receivables.  Credit risk is the risk of loss arising from the failure of customers or dealers to meet the terms of their contracts with us or otherwise fail to perform as agreed.

Retail Loan Portfolio Segment

The retail loan portfolio segment consists of one class of finance receivables. While we use various credit quality metrics to develop our allowance for credit losses on the retail loan portfolio segment, we primarily utilize the aging of the individual accounts to monitor the credit quality of these finance receivables.  Based on our experience, the payment status of borrowers is the strongest indicator of the credit quality of the underlying receivables.  Payment status also impacts charge-offs.

Individual borrower accounts within the retail loan segment are segregated into aging categories based on the number of days outstanding.  The aging for each class of finance receivables is updated monthly.

Note 4 – Finance Receivables, Net (Continued)

Dealer Products Portfolio Segment

For the three classes of finance receivables within the dealer products portfolio segment (wholesale, real estate and working capital), all loans outstanding for an individual dealer or dealer group, which includes affiliated entities, are aggregated and evaluated collectively by dealer or dealer group.  This reflects the interconnected nature of financing provided to our individual dealer and dealer group customers, and their affiliated entities.

When assessing the credit quality of the finance receivables within the dealer products portfolio segment, we segregate the finance receivables account balances into four categories representing distinct credit quality indicators based on internal risk assessments.  The internal risk assessments for all finance receivables within the dealer products portfolio segment are updated on a monthly basis.

The four credit quality indicators are:

• Performing – Account not classified as either Credit Watch, At Risk or Default

• Credit Watch – Account designated for elevated attention

• At Risk – Account where there is an increased likelihood that default may exist based on qualitative and quantitative factors

• Default – Account is not currently meeting contractual obligations or we have temporarily waived certain contractual requirements

The tables below present each credit quality indicator by class of finance receivables:

	Retail Loan
	September 30,		March 31,
	2017		2017
Aging of finance receivables:
Current	$	51,204	$	50,631
30-59 days past due		691		586
60-89 days past due		179		129
90 days or greater past due		81		63
Total	$	52,155	$	51,409

	Wholesale				Real Estate				Working Capital
	September 30,		March 31,		September 30,		March 31,		September 30,		March 31,
	2017		2017		2017		2017		2017		2017
Credit quality indicators:
Performing	$	8,123	$	9,592	$	3,993	$	4,010	$	2,020	$	2,082
Credit Watch		1,094		1,269		660		613		129		143
At Risk		55		12		55		45		22		5
Default		42		78		34		45		4		5
Total	$	9,314	$	10,951	$	4,742	$	4,713	$	2,175	$	2,235

Note 4 – Finance Receivables, Net (Continued)

Impaired Finance Receivables

The following table summarizes the information related to our impaired loans by class of finance receivables: 

	Impaired								Individually Evaluated
	Finance Receivables				Unpaid Principal Balance				Allowance
	September 30,		March 31,		September 30,		March 31,		September 30,		March 31,
	2017		2017		2017		2017		2017		2017
Impaired account balances individually evaluated for impairment with an allowance:
Wholesale	$	75	$	93	$	75	$	93	$	13	$	12
Real estate		88		94		88		94		9		12
Working capital		44		31		44		31		23		9
Total	$	207	$	218	$	207	$	218	$	45	$	33
Impaired account balances individually evaluated for impairment without an allowance:
Wholesale	$	98	$	134	$	98	$	134
Real estate		98		105		98		105
Working capital		-		-		-		-
Total	$	196	$	239	$	196	$	239
Impaired account balances aggregated and evaluated for impairment:
Retail loan	$	220	$	220	$	218	$	217
Total	$	220	$	220	$	218	$	217
Total impaired account balances:
Retail loan	$	220	$	220	$	218	$	217
Wholesale		173		227		173		227
Real estate		186		199		186		199
Working capital		44		31		44		31
Total	$	623	$	677	$	621	$	674

As of September 30, 2017 and March 31, 2017, the impaired finance receivables balance for accounts in the dealer products portfolio segment that were on nonaccrual status was $220 million and $251 million, respectively, and there were no charge-offs against the allowance for credit losses for these finance receivables.  Therefore, the impaired finance receivables balance is equal to the unpaid principal balance.  As of September 30, 2017 and March 31, 2017, impaired finance receivables in the retail portfolio segment recorded at the fair value of the collateral less estimated selling costs were not significant and therefore excluded from the table above.  Refer to Note 6 – Allowance for Credit Losses for details related to the retail loan portfolio segment’s impaired account balances which are aggregated and evaluated for impairment when determining the allowance for credit losses.

Note 4 – Finance Receivables, Net (Continued)

The following table summarizes the average impaired loans by class of finance receivables as of the balance sheet date and the interest income recognized on these loans:

	Average Impaired FinanceReceivables								Interest Income Recognized
	Three Months Ended September 30,				Six Months Ended September 30,				Three Months Ended September 30,				Six Months Ended September 30,
	2017		2016		2017		2016		2017		2016		2017		2016
Impaired account balances individually evaluated for impairment with an allowance:
Wholesale	$	101	$	59	$	98	$	72	$	-	$	1	$	1	$	1
Real estate		91		87		92		98		1		-		2		1
Working capital		44		33		40		34		1		1		1		1
Total	$	236	$	179	$	230	$	204	$	2	$	2	$	4	$	3
Impaired account balances individually evaluated for impairment without an allowance:
Wholesale	$	116	$	160	$	122	$	168	$	1	$	-	$	2	$	2
Real estate		97		112		100		108		1		2		2		3
Working capital		-		-		-		1		-		-		-		-
Total	$	213	$	272	$	222	$	277	$	2	$	2	$	4	$	5
Impaired account balances aggregated and evaluated for impairment:
Retail loan	$	222	$	224	$	221	$	225	$	4	$	4	$	8	$	8
Total	$	222	$	224	$	221	$	225	$	4	$	4	$	8	$	8
Total impaired account balances:
Retail loan	$	222	$	224	$	221	$	225	$	4	$	4	$	8	$	8
Wholesale		217		219		220		240		1		1		3		3
Real estate		188		199		192		206		2		2		4		4
Working capital		44		33		40		35		1		1		1		1
Total	$	671	$	675	$	673	$	706	$	8	$	8	$	16	$	16

The primary source of interest income recognized on the loans in the table above is from performing troubled debt restructurings.  Interest income recognized using a cash-basis method of accounting during the three and six months ended September 30, 2017 and 2016 was not significant.

Note 4 – Finance Receivables, Net (Continued)

Troubled Debt Restructuring

For accounts not under bankruptcy protection, the amount of finance receivables modified as a troubled debt restructuring during the three and six months ended September 30, 2017 and 2016 was not significant for each class of finance receivables.  Troubled debt restructurings for non-bankrupt accounts within the retail loan class of finance receivables are comprised exclusively of contract term extensions that reduce the monthly payment due from the customer.  For the three classes of finance receivables within the dealer products portfolio segment, troubled debt restructurings include contract term extensions, interest rate adjustments, waivers of loan covenants, or any combination of the three.  Troubled debt restructurings of accounts not under bankruptcy protection did not include forgiveness of principal or interest rate adjustments during the three and six months ended September 30, 2017 and 2016.

We consider finance receivables under bankruptcy protection within the retail loan class to be troubled debt restructurings as of the date we receive notice of a customer filing for bankruptcy protection, regardless of the ultimate outcome of the bankruptcy proceedings.  The bankruptcy court may impose modifications as part of the proceedings, including interest rate adjustments and forgiveness of principal.  For the three and six months ended September 30, 2017 and 2016, the financial impact of troubled debt restructurings related to finance receivables under bankruptcy protection was not significant to our Consolidated Statements of Income and Consolidated Balance Sheets. 

Payment Defaults

Finance receivables modified as troubled debt restructurings for which there was a subsequent payment default during the three and six months ended September 30, 2017 and 2016, and for which the modification occurred within twelve months of the payment default, were not significant for all classes of such receivables.

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Investments in Operating Leases, Net

6 Months Ended

Sep. 30, 2017

Leases Operating [Abstract]

Investments in Operating Leases, Net

Note 5 – Investments in Operating Leases, Net

Investments in operating leases, net consist of leases, net of deferred fees and costs, deferred income, accumulated depreciation and the allowance for credit losses.  Securitized investments in operating leases represent beneficial interests in a pool of certain vehicle leases that have been sold for legal purposes to securitization trusts but continue to be included in our consolidated financial statements as discussed further in Note 10 - Variable Interest Entities.  Cash flows from these securitized investments in operating leases are available only for the repayment of debt issued by these trusts and other obligations arising from the securitization transactions.  They are not available for payment of our other obligations or to satisfy claims of our other creditors.

Investments in operating leases, net consisted of the following:

	September 30,			March 31,
	2017			2017
Investments in operating leases	$	40,783		$	41,874
Securitized investments in operating leases		9,105			6,502
		49,888			48,376
Deferred origination (fees) and costs, net		(218	)		(201	)
Deferred income		(1,447	)		(1,196	)
Accumulated depreciation		(9,246	)		(8,672	)
Allowance for credit losses		(154	)		(155	)
Investments in operating leases, net	$	38,823		$	38,152

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Allowance for Credit Losses

6 Months Ended

Sep. 30, 2017

Loans And Leases Receivable Disclosure [Abstract]

Allowance for Credit Losses

Note 6 – Allowance for Credit Losses

The following table provides information related to our allowance for credit losses on finance receivables and investments in operating leases:

	Three Months Ended						Six Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Allowance for credit losses at beginning of period	$	611		$	489		$	622		$	535
Provision for credit losses		127			161			212			213
Charge-offs, net of recoveries		(102	)		(124	)		(198	)		(222	)
Allowance for credit losses at end of period	$	636		$	526		$	636		$	526

Charge-offs are shown net of recoveries of $22 million and $45 million for the three and six months ended September 30, 2017, respectively, and recoveries of $20 million and $40 million for the three and six months ended September 30, 2016 , respectively.

Note 6 – Allowance for Credit Losses (Continued)

Allowance for Credit Losses and Finance Receivables by Portfolio Segment

The following tables provide information related to our allowance for credit losses for finance receivables and finance receivables by portfolio segment:

	Three Months Ended September 30, 2017
	Retail Loan			DealerProducts			Total
Allowance for Credit Losses for Finance Receivables:
Beginning balance, July 1, 2017	$	322		$	131		$	453
Charge-offs		(86	)		-			(86	)
Recoveries		13			-			13
Provisions		110			(8	)		102
Ending balance, September 30, 2017	$	359		$	123		$	482
	Six Months Ended September 30, 2017
	Retail Loan			DealerProducts			Total
Beginning balance, April 1, 2017	$	344		$	123		$	467
Charge-offs		(165	)		-			(165	)
Recoveries		26			-			26
Provisions		154			-			154
Ending balance, September 30, 2017	$	359		$	123		$	482
Allowance for Credit Losses for Finance Receivables:
Ending balance: Individually evaluated for impairment	$	-		$	45		$	45
Ending balance: Collectively evaluated for impairment	$	359		$	78		$	437
Finance Receivables:
Ending balance, September 30, 2017	$	52,155		$	16,231		$	68,386
Ending balance: Individually evaluated for impairment	$	-		$	403		$	403
Ending balance: Collectively evaluated for impairment	$	52,155		$	15,828		$	67,983

The ending balance of finance receivables collectively evaluated for impairment in the above table includes approximately $220 million of finance receivables within the retail loan portfolio segment that are specifically identified as impaired.  These amounts are aggregated within their respective portfolio segment when determining the allowance for credit losses as of September 30, 2017, as they are deemed to be insignificant for individual evaluation, and we have determined that the allowance for credit losses is not significant and would not be materially different if the amounts had been individually evaluated for impairment.  The ending balance of finance receivables for the dealer products portfolio segment collectively evaluated for impairment as of September 30, 2017 includes $1,086 million in finance receivables that are guaranteed by Toyota Motor Sales, U.S.A., Inc. (“TMS”), and $175 million in finance receivables that are guaranteed by third party private Toyota distributors.  These finance receivables are related to certain Toyota and Lexus dealers and other third parties to whom we provided financing at the request of TMS and third party private Toyota distributors.

Note 6 – Allowance for Credit Losses (Continued)

	Three Months Ended September 30, 2016
	Retail Loan			DealerProducts			Total
Allowance for Credit Losses for Finance Receivables:
Beginning balance, July 1, 2016	$	278		$	88		$	366
Charge-offs		(99	)		-			(99	)
Recoveries		13			-			13
Provisions		103			6			109
Ending balance, September 30, 2016	$	295		$	94		$	389
	Six Months Ended September 30, 2016
	Retail Loan			DealerProducts			Total
Beginning balance, April 1, 2016	$	289		$	132		$	421
Charge-offs		(181	)		-			(181	)
Recoveries		26			-			26
Provisions		161			(38	)		123
Ending balance, September 30, 2016	$	295		$	94		$	389
Allowance for Credit Losses for Finance Receivables:
Ending balance: Individually evaluated for impairment	$	-		$	27		$	27
Ending balance: Collectively evaluated for impairment	$	295		$	67		$	362
Finance Receivables:
Ending balance, September 30, 2016	$	50,711		$	15,445		$	66,156
Ending balance: Individually evaluated for impairment	$	-		$	435		$	435
Ending balance: Collectively evaluated for impairment	$	50,711		$	15,010		$	65,721

The ending balance of finance receivables collectively evaluated for impairment in the above table includes approximately $224 million of finance receivables within the retail loan portfolio segment that are specifically identified as impaired.  These amounts are aggregated within their respective portfolio segment when determining the allowance for credit losses as of September 30, 2016, as they are deemed to be insignificant for individual evaluation and we have determined that the allowance for credit losses is not significant and would not be materially different if the amounts had been individually evaluated for impairment.  The ending balance of finance receivables for the dealer products portfolio segment collectively evaluated for impairment as of September 30, 2016 includes $1,054 million in finance receivables that are guaranteed by TMS, and $158 million in finance receivables that are guaranteed by third party private Toyota distributors.  These finance receivables are related to certain Toyota and Lexus dealers and other third parties to whom we provided financing at the request of TMS and third party private Toyota distributors.

Note 6 – Allowance for Credit Losses (Continued)

Past Due Finance Receivables and Investments in Operating Leases

The following table shows aggregate balances of finance receivables and investments in operating leases 60 or more days past due:

	September 30,		March 31,
	2017		2017
Aggregate balances 60 or more days past due
Finance receivables	$	260	$	192
Investments in operating leases		123		95
Total	$	383	$	287

Substantially all finance receivables and investments in operating leases do not involve recourse to the dealer in the event of customer default.  Finance receivables and investments in operating leases 60 or more days past due include contracts in bankruptcy and contracts greater than 120 days past due, which are recorded at the fair value of collateral less estimated costs to sell.  Contracts for which vehicles have been repossessed are excluded.

Past Due Finance Receivables by Class

The following tables summarize the aging of finance receivables by class:

	September 30, 2017
	30 - 59 Days Past Due		60 - 89 Days Past Due		90Daysor Greater Past Due		TotalPast Due		Current		TotalFinance Receivables		90 Days or GreaterPast Due and Accruing
Retail loan	$	691	$	179	$	81	$	951	$	51,204	$	52,155	$	59
Wholesale		-		-		-		-		9,314		9,314		-
Real estate		-		-		-		-		4,742		4,742		-
Working capital		-		-		-		-		2,175		2,175		-
Total	$	691	$	179	$	81	$	951	$	67,435	$	68,386	$	59

	March 31, 2017
	30 - 59 Days Past Due		60 - 89 Days Past Due		90Daysor Greater Past Due		TotalPast Due		Current		TotalFinance Receivables		90Daysor GreaterPast Due and Accruing
Retail loan	$	586	$	129	$	63	$	778	$	50,631	$	51,409	$	41
Wholesale		-		-		-		-		10,951		10,951		-
Real estate		-		-		-		-		4,713		4,713		-
Working capital		3		-		-		3		2,232		2,235		-
Total	$	589	$	129	$	63	$	781	$	68,527	$	69,308	$	41

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Derivatives, Hedging Activities and Interest Expense

6 Months Ended

Sep. 30, 2017

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivatives, Hedging Activities and Interest Expense

Note 7 – Derivatives, Hedging Activities and Interest Expense

Derivative Instruments

Our liabilities consist mainly of fixed and floating rate debt, denominated in U.S. dollars and various other currencies, which we issue in the global capital markets, while our assets consist primarily of U.S. dollar denominated, fixed rate receivables.  We enter into interest rate swaps, interest rate floors, interest rate caps and foreign currency swaps to hedge the interest rate and foreign currency risks that result from the different characteristics of our assets and liabilities.  Our use of derivative transactions is intended to reduce long-term fluctuations in the fair value of assets and liabilities caused by market movements.  All of our derivative activities are authorized and monitored by our management and our Asset Liability Committee which provides a framework for financial controls and governance to manage market risk.

Credit Risk Related Contingent Features

Our derivative contracts are governed by International Swaps and Derivatives Association (“ISDA”) Master Agreements.  Substantially all of these ISDA Master Agreements contain reciprocal ratings triggers providing either party with an option to terminate the agreement at market value in the event of a ratings downgrade of the other party below a specified threshold.  As of September 30, 2017, we have daily valuation and collateral exchange arrangements with all of our counterparties.  Our collateral agreements with substantially all of our counterparties include a zero threshold, full collateralization arrangement.  However, due to the time required to move collateral, there may be a delay of up to one day between the exchange of collateral and the valuation of our derivatives.  We would not be required to post additional collateral to the counterparties with whom we were in a net liability position at September 30, 2017 if our credit ratings were to decline, since we fully collateralize without regard to credit ratings with these counterparties.  

Note 7 – Derivatives, Hedging Activities and Interest Expense (Continued)

Derivative Activity Impact on Financial Statements

The following tables show the financial statement line item and amount of our derivative assets and liabilities that are reported in our Consolidated Balance Sheets:

	September 30, 2017
	Hedge accounting				Non-hedge
	derivatives				accountingderivatives				Total
			Fair				Fair				Fair
	Notional		value		Notional		value		Notional		value
Other assets:
Interest rate swaps	$	-	$	-	$	64,717	$	426	$	64,717	$	426
Interest rate floors		-		-		847		1		847		1
Foreign currency swaps		271		21		5,519		293		5,790		314
Total	$	271	$	21	$	71,083	$	720	$	71,354	$	741
Counterparty netting and collateral held												(679	)
Carrying value of derivative    contracts – Other assets											$	62
Other liabilities:
Interest rate swaps	$	-	$	-	$	47,224	$	256	$	47,224	$	256
Interest rate caps		-		-		30		-		30		-
Foreign currency swaps		93		3		6,651		357		6,744		360
Total	$	93	$	3	$	53,905	$	613	$	53,998	$	616
Counterparty netting and collateral posted												(600	)
Carrying value of derivative    contracts – Other liabilities											$	16

As of September 30, 2017, we held collateral of $309 million, which offset derivative assets, and posted collateral of $230 million, which offset derivative liabilities.  We also held excess collateral of $7 million, which we did not use to offset derivative assets, and we posted excess collateral of $4 million which we did not use to offset derivative liabilities.   

Note 7 – Derivatives, Hedging Activities and Interest Expense (Continued)

	March 31, 2017
	Hedge accounting				Non-hedge
	derivatives				accountingderivatives				Total
			Fair				Fair				Fair
	Notional		value		Notional		value		Notional		value
Other assets:
Interest rate swaps	$	-	$	-	$	62,525	$	475	$	62,525	$	475
Interest rate floors		-		-		1,673		2		1,673		2
Foreign currency swaps		271		28		1,648		94		1,919		122
Total	$	271	$	28	$	65,846	$	571	$	66,117	$	599
Counterparty netting and collateral held												(548	)
Carrying value of derivative    contracts – Other assets											$	51
Other liabilities:
Interest rate swaps	$	-	$	-	$	45,297	$	277	$	45,297	$	277
Interest rate caps		-		-		30		-		30		-
Foreign currency swaps		93		1		12,570		1,175		12,663		1,176
Total	$	93	$	1	$	57,897	$	1,452	$	57,990	$	1,453
Counterparty netting and collateral posted												(1,407	)
Carrying value of derivative    contracts – Other liabilities											$	46

As of March 31, 2017, we held collateral of $154 million which offset derivative assets, and posted collateral of $1,013 million which offset derivative liabilities.  We also held excess collateral of $5 million which we did not use to offset derivative assets, and we posted excess collateral of $5 million which we did not use to offset derivative liabilities.

Note 7 – Derivatives, Hedging Activities and Interest Expense (Continued)

The following table summarizes the components of interest expense, including the location and amount of gains and losses on derivative instruments and related hedged items, as reported in our Consolidated Statements of Income:

	Three Months Ended						Six Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Interest expense on debt	$	484		$	377		$	951		$	736
Interest income on derivatives		(18	)		(5	)		(34	)		(7	)
Interest expense on debt and derivatives, net		466			372			917			729
Loss (gain) on hedge accounting derivatives:
Foreign currency swaps		3			(4	)		10			(37	)
Loss (gain) on hedge accounting derivatives		3			(4	)		10			(37	)
Less hedged item:  change in fair value of fixed rate   debt denominated in a foreign currency		(3	)		4			(10	)		37
Ineffectiveness related to hedge accounting derivatives		-			-			-			-
Loss (gain) on debt denominated in foreign currencies    and U.S. dollar non-hedge accounting derivatives:
Loss (gain) on non-hedge accounting debt denominated   in foreign currencies		373			156			1,023			(62	)
(Gain) loss on non-hedge accounting foreign currency swaps		(383	)		(156	)		(1,033	)		32
Gain on U.S. dollar non-hedge accounting interest   rate swaps		(4	)		(75	)		(7	)		(95	)
Total interest expense	$	452		$	297		$	900		$	604

Interest expense on debt and derivatives represents net interest settlements and changes in accruals.  Gains and losses on hedge accounting derivatives and debt denominated in foreign currencies exclude net interest settlements and changes in accruals.  Cash flows associated with hedge accounting, non-hedge accounting, and de-designated derivatives are reported in Net cash provided by operating activities in our Consolidated Statements of Cash Flows.

The relative fair value allocation of derivative credit value adjustments for counterparty and non-performance credit risk within interest expense was not significant for the three and six months ended September 30, 2017 and 2016 as we are fully collateralized on substantially all of our derivatives without regard to credit ratings.

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Other Assets and Other Liabilities

6 Months Ended

Sep. 30, 2017

Other Assets And Other Liabilities [Abstract]

Other Assets and Other Liabilities

Note 8 – Other Assets and Other Liabilities

Other assets and other liabilities consisted of the following:

	September 30,		March 31,
	2017		2017
Other assets:
Notes receivable from affiliates	$	591	$	823
Used vehicles held for sale		298		264
Income taxes receivable		81		-
Derivative assets		62		51
Other assets		1,011		906
Total other assets	$	2,043	$	2,044
Other liabilities:
Unearned insurance premiums and contract revenues	$	2,226	$	2,154
Accounts payable and accrued expenses		1,020		1,057
Deferred income		485		468
Income taxes payable		-		62
Derivative liabilities		16		46
Other liabilities		175		165
Total other liabilities	$	3,922	$	3,952

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Debt

6 Months Ended

Sep. 30, 2017

Debt Disclosure [Abstract]

Debt

Note 9 – Debt

Debt and the related weighted average contractual interest rates are summarized as follows:

					Weighted average
					contractual interest rates
	September 30,		March 31,		September 30,			March 31,
	2017		2017		2017			2017
Commercial paper	$	25,247	$	26,632		1.28	%		1.11	%
Unsecured notes and loans payable		58,327		57,282		2.02	%		1.91	%
Secured notes and loans payable		14,649		14,319		1.58	%		1.32	%
Total debt	$	98,223	$	98,233		1.76	%		1.60	%

The carrying value of our debt includes unamortized premiums, discounts and debt issuance costs of $313 million and $307 million as of September 30, 2017 and March 31, 2017, respectively.  The face value of commercial paper, unsecured notes and loans payable and secured notes and loans payable was $25.3 billion, $58.6 billion, and $14.7 billion, respectively, as of September 30, 2017, and $26.7 billion, $57.4 billion and $14.3 billion, respectively, as of March 31, 2017.

As of September 30, 2017, our commercial paper had a weighted average remaining maturity of 99 days, while our unsecured and secured notes and loans payable mature on various dates through fiscal 2047.  Weighted average contractual interest rates are calculated based on original notional or par value before consideration of premium or discount.

Our unsecured notes and loans payable consist of both fixed and variable rate debt with contractual interest rates ranging from 0.0 percent to 5.8 percent at September 30, 2017 and March 31, 2017.  Upon issuance of fixed rate notes, we generally elect to enter into interest rate swaps to convert fixed rate payments on notes to floating rate payments.

Our unsecured notes and loans payable contain covenants and conditions customary in transactions of this nature, including negative pledge provisions, cross-default provisions and limitations on certain consolidations, mergers and sales of assets.  We are currently in compliance with these covenants and conditions.

Certain unsecured notes and loans payable are denominated in various foreign currencies, and include the impact of translation adjustments.  At September 30, 2017 and March 31, 2017, the carrying values of these foreign currency denominated unsecured notes and loans payable were $12.3 billion and $13.3 billion, respectively.  Concurrent with the issuance of these foreign currency unsecured notes and loans payable, we entered into currency swaps in the same notional amount to convert non-U.S. currency payments to U.S. dollar denominated payments.

Our secured notes and loans payable are denominated in U.S. dollars and consist of both fixed and variable rate debt with contractual interest rates ranging from 0.9 percent to 2.1 percent at September 30, 2017 and 0.8 percent to 2.1 percent at March 31, 2017.  Secured notes and loans payable are issued using on-balance sheet securitization trusts, as further discussed in Note 10 – Variable Interest Entities.  These notes are repayable only from collections on the underlying securitized retail finance receivables and the beneficial interests in investments in operating leases and from related credit enhancements.

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Variable Interest Entities

6 Months Ended

Sep. 30, 2017

Variable Interest Entity Consolidated Carrying Amount Assets And Liabilities [Abstract]

Variable Interest Entities

Note 10 – Variable Interest Entities

Consolidated Variable Interest Entities

We use one or more special purpose entities that are considered Variable Interest Entities (“VIEs”) to issue asset-backed securities to third party bank-sponsored asset-backed securitization vehicles and to investors in securitization transactions.  The securities issued by these VIEs are backed by the cash flows related to retail finance receivables and beneficial interests in investments in operating leases (“Securitized Assets”).  We hold variable interests in the VIEs that could potentially be significant to the VIEs.  We determined that we are the primary beneficiary of the securitization trusts because (i) our servicing responsibilities for the Securitized Assets give us the power to direct the activities that most significantly impact the performance of the VIEs, and (ii) our variable interests in the VIEs give us the obligation to absorb losses and the right to receive residual returns that could potentially be significant.

The following tables show the assets and liabilities related to our VIE securitization transactions that were included in our Consolidated Balance Sheets:

	September 30, 2017
			VIE Assets						VIE Liabilities
			Gross		Net
	Restricted Cash		Securitized Assets		Securitized Assets		Other Assets		Debt		Other Liabilities
Retail finance receivables	$	712	$	12,423	$	12,219	$	6	$	10,232	$	6
Investments in operating leases		296		9,105		6,774		123		4,417		2
Total	$	1,008	$	21,528	$	18,993	$	129	$	14,649	$	8

	March 31, 2017
			VIE Assets						VIE Liabilities
			Gross		Net
	Restricted Cash		Securitized Assets		Securitized Assets		Other Assets		Debt		Other Liabilities
Retail finance receivables	$	856	$	13,071	$	12,865	$	7	$	11,017	$	5
Investments in operating leases		211		6,502		4,888		80		3,302		1
Total	$	1,067	$	19,573	$	17,753	$	87	$	14,319	$	6

Restricted Cash shown in the table above represents collections from the underlying Gross Securitized Assets shown in the table above and certain reserve deposits held by TMCC for the VIEs and is included as part of Restricted cash on our Consolidated Balance Sheets.  Gross Securitized Assets represent finance receivables and beneficial interests in investments in operating leases securitized for the asset-backed securities issued.  Net Securitized Assets shown in the table above are presented net of deferred fees and costs, deferred income, accumulated depreciation and the allowance for credit losses.  Other Assets represent used vehicles held-for-sale that were repossessed by or returned to TMCC for the benefit of the VIEs.  The related debt of these consolidated VIEs is presented net of $1,578 million and $1,526 million of securities retained by TMCC at September 30, 2017 and March 31, 2017, respectively.  Other Liabilities represents accrued interest on the debt of the consolidated VIEs.

The assets of the VIEs and the restricted cash held by TMCC serve as the sole source of repayment for the asset-backed securities issued by these entities.  Investors in the notes issued by the VIEs do not have recourse to us or our other assets, with the exception of customary representation and warranty repurchase provisions and indemnities.

As the primary beneficiary of these entities, we are exposed to credit, residual value, interest rate, and prepayment risk from the Securitized Assets in the VIEs.  However, our exposure to these risks did not change as a result of the transfer of the assets to the VIEs.  We may also be exposed to interest rate risk arising from the secured notes issued by the VIEs.

Note 10 – Variable Interest Entities (Continued)

In addition, we entered into interest rate swaps with certain of these special purpose entities that issue variable rate debt.  Under the terms of these swaps, the special purpose entities are obligated to pay TMCC a fixed rate of interest on certain payment dates in exchange for receiving a floating rate of interest on notional amounts equal to the outstanding balance of the secured debt.  This arrangement enables the special purpose entities to mitigate the interest rate risk inherent in issuing variable rate debt that is secured by fixed rate Securitized Assets.

The transfers of the Securitized Assets to the special purpose entities in our securitizations are considered to be sales for legal purposes.  However, the Securitized Assets and the related debt remain on our Consolidated Balance Sheets.  We recognize financing revenue on the Securitized Assets and interest expense on the secured debt issued by the special purpose entities.  We also maintain an allowance for credit losses on the Securitized Assets to cover estimated probable credit losses using a methodology consistent with that used for our non-securitized asset portfolio.  The interest rate swaps between TMCC and the special purpose entities are considered intercompany transactions and therefore are eliminated in our consolidated financial statements.

Non-consolidated Variable Interest Entities

We provide lending to Toyota and Lexus dealers through the Toyota Dealer Investment Group’s Dealer Capital Program (“TDIG Program”) operated by our affiliate TMS, which has an equity interest in these dealerships.  Dealers participating in this program have been determined to be VIEs.  We do not consolidate the dealerships in this program as we are not the primary beneficiary and any exposure to loss is limited to the amount of the credit facility.  Amounts due from these dealers under the TDIG Program that are classified as Finance receivables, net in our Consolidated Balance Sheets as of September 30, 2017 and March 31, 2017 and revenues earned from these dealers during the three and six months ended September 30, 2017 and 2016 were not significant. 

We also have other lending relationships, which have been determined to be VIEs, but these relationships are not consolidated as we are not the primary beneficiary.  Amounts due under these relationships as of September 30, 2017 and March 31, 2017 and revenues earned under these relationships during the three and six months ended September 30, 2017 and 2016 were not significant.

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Liquidity Facilities and Letters of Credit

6 Months Ended

Sep. 30, 2017

Line Of Credit Facility [Abstract]

Liquidity Facilities and Letters of Credit

Note 11 – Liquidity Facilities and Letters of Credit

For additional liquidity purposes, we maintain syndicated credit facilities with certain banks.

364 Day Credit Agreement, Three Year Credit Agreement and Five Year Credit Agreement

In November 2016, TMCC, Toyota Credit de Puerto Rico Corp. (“TCPR”) and other Toyota affiliates entered into a $5.0 billion 364 day syndicated bank credit facility, a $5.0 billion three year syndicated bank credit facility and a $5.0 billion five year syndicated bank credit facility, expiring in fiscal 2018, 2020, and 2022, respectively.

The ability to make draws is subject to covenants and conditions customary in transactions of this nature, including negative pledge provisions, cross-default provisions and limitations on certain consolidations, mergers and sales of assets.  These agreements may be used for general corporate purposes and none were drawn upon as of September 30, 2017 and March 31, 2017.  We are currently in compliance with the covenants and conditions of the credit agreements described above.

Other Unsecured Credit Agreements

TMCC has entered into additional unsecured credit facilities with various banks.  As of September 30, 2017, TMCC had committed bank credit facilities totaling $5.6 billion of which $2.2 billion, $400 million, $2.3 billion, and $725 million mature in fiscal 2018, 2019, 2020, and 2021, respectively.

These credit agreements contain covenants and conditions customary in transactions of this nature, including negative pledge provisions, cross-default provisions and limitations on certain consolidations, mergers and sales of assets.  These credit facilities were not drawn upon as of September 30, 2017 and March 31, 2017. We are currently in compliance with the covenants and conditions of the credit agreements described above.

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Commitments and Contingencies

6 Months Ended

Sep. 30, 2017

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 12 – Commitments and Contingencies

Commitments and Guarantees

We have entered into certain commitments and guarantees for which the maximum unfunded amounts are summarized in the table below:

	September 30,		March 31,
	2017		2017
Commitments:
Credit facilities commitments with dealers	$	1,322	$	1,199
Minimum lease commitments		173		59
Total commitments		1,495		1,258
Guarantees of affiliate pollution control and solid waste disposal bonds		100		100
Total commitments and guarantees	$	1,595	$	1,358

Wholesale financing is not considered to be a contractual commitment as the arrangements are not binding arrangements under which TMCC is required to perform.

In July 2017, we entered into a 15-year lease agreement, which expires in August 2032, with Toyota Motor North America, Inc. (“TMNA”) for our new headquarters facility in Plano, Texas.  Minimum lease commitments in the table above include $114 million and $10 million for facilities leases with affiliates at September 30, 2017 and March 31, 2017, respectively.  At September 30, 2017, minimum future commitments under lease agreements to which we are a lessee, including those with affiliates, are as follows:

	Futureminimum
Years ending March 31,	leasepayments
2018	$	15
2019		24
2020		20
2021		15
2022		18
Thereafter		81
Total	$	173

Note 12 – Commitments and Contingencies (Continued)

Commitments

We provide fixed and variable rate working capital loans, revolving lines of credit, and real estate financing to dealers and various multi-franchise organizations referred to as dealer groups for facilities construction and refurbishment, working capital requirements, real estate purchases, business acquisitions and other general business purposes.  These loans are typically secured with liens on real estate, vehicle inventory, and/or other dealership assets, as appropriate, and may be guaranteed by individual or corporate guarantees of affiliated dealers, dealer groups, or dealer principals.  Although the loans are typically collateralized or guaranteed, the value of the underlying collateral or guarantees may not be sufficient to cover our exposure under such agreements.  Our pricing reflects market conditions, the competitive environment, the level of support dealers provide our retail, lease and insurance business and the credit worthiness of each dealer.  Amounts drawn under these facilities are reviewed for collectability on a quarterly basis, in conjunction with our evaluation of the allowance for credit losses.

We are in the process of moving our corporate headquarters operations from Torrance, California to Plano, Texas as part of Toyota Motor Corporation’s consolidation of its three North American headquarters for manufacturing, sales and marketing, and finance operations to a single new headquarters facility.   The relocation of our headquarters operations is expected to be substantially complete by the end of calendar year 2017.  Relocation costs for employees and other relocation expenses are currently estimated to be approximately $120 million and are being expensed as incurred.  To date, the Company has incurred $96 million in relocation expenses.  The relocation costs incurred during the three and six months ended September 30, 2017 were $23 million and $34 million, respectively, compared to $11 million and $17 million during the same periods of fiscal 2017.  We have not incurred significant lease termination costs as a result of our relocation.    

Guarantees and Other Contingencies

TMCC has guaranteed bond obligations totaling $100 million in principal that were issued by Putnam County, West Virginia and Gibson County, Indiana to finance the construction of pollution control facilities at manufacturing plants of certain TMCC affiliates.  The bonds mature in the following fiscal years ending March 31: 2028 - $20 million; 2029 - $50 million; 2030 - $10 million; 2031 - $10 million; and 2032 - $10 million.  TMCC would be required to perform under the guarantees in the event of non-payment on the bonds and other related obligations.  TMCC is entitled to reimbursement by the applicable affiliates for any amounts paid.  TMCC receives an annual fee of $78 thousand for guaranteeing such payments.  TMCC has not been required to perform under any of these affiliate bond guarantees as of September 30, 2017 and March 31, 2017.

Indemnification

In the ordinary course of business, we enter into agreements containing indemnification provisions standard in the industry related to several types of transactions, including, but not limited to, debt funding, derivatives, securitization transactions, and our vendor and supplier agreements.  Performance under these indemnities would occur upon a breach of the representations, warranties or covenants made or given, or a third party claim. In addition, we have agreed in certain debt and derivative issuances, and subject to certain exceptions, to gross-up payments due to third parties in the event that withholding tax is imposed on such payments.  In addition, certain of our funding arrangements may require us to pay lenders for increased costs due to certain changes in laws or regulations.  Due to the difficulty in predicting events which could cause a breach of the indemnification provisions or trigger a gross-up or other payment obligation, we are not able to estimate our maximum exposure to future payments that could result from claims made under such provisions.  We have not made any material payments in the past as a result of these provisions, and as of September 30, 2017, we determined that it is not probable that we will be required to make any material payments in the future.  As of September 30, 2017 and March 31, 2017, no amounts have been recorded under these indemnification provisions.

Note 12 – Commitments and Contingencies (Continued)

Litigation and Governmental Proceedings

Various legal actions, governmental proceedings and other claims are pending or may be instituted or asserted in the future against us with respect to matters arising in the ordinary course of business.  Certain of these actions are or purport to be class action suits, seeking sizeable damages and/or changes in our business operations, policies and practices.  Certain of these actions are similar to suits that have been filed against other financial institutions and captive finance companies.  We perform periodic reviews of pending claims and actions to determine the probability of adverse verdicts and resulting amounts of liability.  We establish accruals for legal claims when payments associated with the claims become probable and the costs can be reasonably estimated.  When we are able, we also determine estimates of reasonably possible loss or range of loss, whether in excess of any related accrued liability or where there is no accrued liability.  Given the inherent uncertainty associated with legal matters, the actual costs of resolving legal claims and associated costs of defense may be substantially higher or lower than the amounts for which accruals have been established.  Based on available information and established accruals, we do not believe it is reasonably possible that the results of these proceedings, either individually or in the aggregate, will have a material adverse effect on our consolidated financial condition or results of operations.

We have received a request for documents and information from the New York State Department of Financial Services relating to our lending practices (including fair lending), and a request for documents and information pursuant to a civil investigative demand from the Commonwealth of Massachusetts Office of the Attorney General relating to our financing of guaranteed auto protection insurance products on retail contracts.  We will continue to cooperate with these requests, but are unable to predict their outcome given their preliminary status.

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Income Taxes

6 Months Ended

Sep. 30, 2017

Income Tax Disclosure [Abstract]

Income Taxes

Note 13 – Income Taxes

Our effective tax rate was 37 percent for the three and six months ended September 30, 2017 and 2016.  Our provision for income taxes was $70 million and $166 million for the three and six months ended September 30, 2017, compared to $95 million and $241 million for the same periods in fiscal 2017.   The decrease in the provision for income taxes for the three and six months ended September 30, 2017 is consistent with the decrease in our income before tax compared to the same periods in fiscal 2017.  

Tax-related Contingencies

As of September 30, 2017, we remain under IRS examination for fiscal 2017 and fiscal 2018.  The IRS examination for fiscal 2016 was concluded in the first quarter of fiscal 2018.

We periodically review our uncertain tax positions.  Our assessment is based on many factors including any ongoing IRS audits.  For the quarter ended September 30, 2017, our assessment did not result in a material change in unrecognized tax benefits.

Our deferred tax assets were $3.0 billion and $1.0 billion at September 30, 2017 and March 31, 2017, and were primarily due to the deferred deduction of allowance for credit and residual value losses and federal tax loss carryforward that expires in fiscal 2038.  The total deferred tax liability, net of these deferred tax assets, was $8.1 billion and $7.9 billion at September 30, 2017 and March 31, 2017, respectively.  Realization with respect to the federal tax loss carryforward is dependent on generating sufficient income prior to expiration of the loss carryforward.  Although realization is not assured, management believes it is more likely than not that the deferred tax assets will be realized.  The amount of the deferred tax assets considered realizable could be reduced if management’s estimates change.

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Related Party Transactions

6 Months Ended

Sep. 30, 2017

Related Party Transactions [Abstract]

Related Party Transactions

Note 14 – Related Party Transactions

As of September 30, 2017, there were no material changes to our related party agreements or relationships as described in our fiscal 2017 Form 10-K.  The tables below summarize amounts included in our Consolidated Statements of Income and in our Consolidated Balance Sheets under various related party agreements or relationships:

	Three Months Ended				Six Months Ended
	September 30,				September 30,
	2017		2016		2017			2016
Total financing revenues:
Manufacturers’ subvention and other revenues	$	382	$	334	$	750		$	670
Interest expense:
Credit support fees incurred	$	24	$	23	$	47		$	46
Interest and other expenses	$	-	$	-	$	1		$	1
Insurance earned premiums and contract revenues:
Insurance premiums and contract revenues	$	45	$	35	$	89		$	69
Investment and other income, net:
Interest and other income	$	3	$	3	$	7		$	5
Expenses:
Operating and administrative	$	23	$	17	$	42		$	34
Insurance losses and loss adjustment expenses1	$	1	$	-	$	(4	)	$	1

¹ Amount includes the transfer of insurance losses and loss adjustment expenses from the purchase of a reinsurance contract.

Note 14 – Related Party Transactions (Continued)

	September 30,			March 31,
	2017			2017
Assets:
Investments in marketable securities
Investments in commercial paper	$	5		$	-
Finance receivables, net
Accounts receivable	$	133		$	138
Deferred retail subvention income	$	(1,095	)	$	(967	)
Investments in operating leases, net
Investments in operating leases, net	$	6		$	4
Deferred lease subvention income	$	(1,428	)	$	(1,174	)
Other assets
Notes receivable	$	591		$	823
Other receivables, net	$	243		$	202
Liabilities:
Other liabilities
Unearned affiliate insurance premiums and contract revenues	$	330		$	332
Other payables, net	$	59		$	74
Notes payable	$	24		$	13

TMCC receives subvention payments from TMS which results in a gross monthly subvention receivable.  As of September 30, 2017 and March 31, 2017, the subvention receivable from TMS was $227 million and $165 million, respectively. The subvention receivable is recorded in Other receivables, net in Other assets as of September 30, 2017 and March 31, 2017.  We have a master netting agreement with TMS and TMNA which allows us to net settle payments for shared services and subvention transactions.

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Segment Information

6 Months Ended

Sep. 30, 2017

Segment Reporting [Abstract]

Segment Information

Note 15 – Segment Information

Financial information for our reportable operating segments is summarized as follows:

	Three Months Ended September 30, 2017
	Finance		Insurance		Intercompany
	operations		operations		eliminations			Total
Total financing revenues	$	2,647	$	-	$	-		$	2,647
Depreciation on operating leases		1,719		-		-			1,719
Interest expense		455		-		(3	)		452
Net financing revenues		473		-		3			476
Insurance earned premiums and contract revenues		-		221		-			221
Investment and other income, net		36		22		(3	)		55
Realized gains, net on investments in    marketable securities		-		1		-			1
Net financing and other revenues		509		244		-			753
Expenses:
Provision for credit losses		127		-		-			127
Operating and administrative expenses		259		78		-			337
Insurance losses and loss adjustment expenses		-		102		-			102
Total expenses		386		180		-			566
Income before income taxes		123		64		-			187
Provision for income taxes		47		23		-			70
Net income	$	76	$	41	$	-		$	117

	Six Months Ended September 30, 2017
	Finance		Insurance		Intercompany
	operations		operations		eliminations			Total
Total financing revenues	$	5,245	$	-	$	-		$	5,245
Depreciation on operating leases		3,400		-		-			3,400
Interest expense		906		-		(6	)		900
Net financing revenues		939		-		6			945
Insurance earned premiums and contract revenues		-		437		-			437
Investment and other income, net		68		40		(6	)		102
Realized gains, net on investments in    marketable securities		-		42		-			42
Net financing and other revenues		1,007		519		-			1,526
Expenses:
Provision for credit losses		212		-		-			212
Operating and administrative expenses		492		158		-			650
Insurance losses and loss adjustment expenses		-		216		-			216
Total expenses		704		374		-			1,078
Income before income taxes		303		145		-			448
Provision for income taxes		112		54		-			166
Net income	$	191	$	91	$	-		$	282
Total assets at September 30, 2017	$	116,463	$	4,741	$	(1,104	)	$	120,100

Note 15 – Segment Information (Continued)

	Three Months Ended September 30, 2016
	Finance		Insurance			Intercompany
	operations		operations			eliminations		Total
Total financing revenues	$	2,496	$	-		$	-	$	2,496
Depreciation on operating leases		1,683		-			-		1,683
Interest expense		297		-			-		297
Net financing revenues		516		-			-		516
Insurance earned premiums and contract revenues		-		199			-		199
Investment and other income, net		24		18			-		42
Realized gains (losses), net on investments in     marketable securities		76		(6	)		-		70
Net financing and other revenues		616		211			-		827
Expenses:
Provision for credit losses		161		-			-		161
Operating and administrative expenses		242		75			-		317
Insurance losses and loss adjustment expenses		-		91			-		91
Total expenses		403		166			-		569
Income before income taxes		213		45			-		258
Provision for income taxes		80		15			-		95
Net income	$	133	$	30		$	-	$	163

	Six Months Ended September 30, 2016
	Finance		Insurance			Intercompany
	operations		operations			eliminations			Total
Total financing revenues	$	4,954	$	-		$	-		$	4,954
Depreciation on operating leases		3,272		-			-			3,272
Interest expense		604		-			-			604
Net financing revenues		1,078		-			-			1,078
Insurance earned premiums and contract revenues		-		392			-			392
Investment and other income, net		47		34			-			81
Realized gains (losses), net on investments in    marketable securities		87		(4	)		-			83
Net financing and other revenues		1,212		422			-			1,634
Expenses:
Provision for credit losses		213		-			-			213
Operating and administrative expenses		452		144			-			596
Insurance losses and loss adjustment expenses		-		180			-			180
Total expenses		665		324			-			989
Income before income taxes		547		98			-			645
Provision for income taxes		205		36			-			241
Net income	$	342	$	62		$	-		$	404
Total assets at September 30, 2016	$	112,355	$	4,417		$	(979	)	$	115,793

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Interim Financial Data (Policies)

6 Months Ended

Sep. 30, 2017

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The information furnished in these unaudited interim consolidated financial statements as of and for the three and six months ended September 30, 2017 and 2016 has been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”).  In the opinion of management, the unaudited consolidated financial information reflects all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results for the interim periods presented.  The results of operations for the three and six months ended September 30, 2017 do not necessarily indicate the results which may be expected for the full fiscal year ending March 31, 2018 (“fiscal 2018”).

These financial statements should be read in conjunction with the Consolidated Financial Statements, significant accounting policies, and other Notes to Consolidated Financial Statements included in Toyota Motor Credit Corporation’s Annual Report on Form 10-K (“Form 10-K”) for the fiscal year ended March 31, 2017 (“fiscal 2017”), which was filed with the Securities and Exchange Commission on June 1, 2017.  References herein to “TMCC” denote Toyota Motor Credit Corporation, and references herein to “we”, “our”, and “us” denote Toyota Motor Credit Corporation and its consolidated subsidiaries.

Related party transactions are disclosed in Note 14 – Related Party Transactions.

New Accounting Guidance

New Accounting Guidance

In May 2014, the Financial Accounting Standards Board ("FASB") issued new guidance on the recognition of revenue from contracts with customers.  This comprehensive standard will supersede virtually all existing revenue recognition guidance.  In August 2015, the FASB issued a one-year deferral of the effective date, with early adoption as of the original effective date permitted.  The FASB also subsequently issued guidance amending and clarifying various aspects of the new revenue recognition standard.  We plan to adopt the new revenue guidance effective April 1, 2018 with a cumulative-effect adjustment to the current period opening balance of retained earnings.  We do not expect the adoption of this standard to have a material impact on our operating lease, retail and dealer financing revenues as the majority of those revenues are outside the scope of the standard.  However, certain products within our insurance operations fall within the scope of this guidance.  Based on our evaluation of contracts related to those products, we expect the application of this guidance will result in changes to both the timing of recognition and the classification of revenues and expenses.  While our assessment is not complete, we do not expect these changes to have a material impact on our income before taxes.  We continue to assess the impact of this guidance on our consolidated financial statements and related disclosures.

In January 2016, the FASB issued new guidance that addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments and will require entities to measure equity investments at fair value and recognize any changes in fair value in earnings.  We will adopt this new guidance effective April 1, 2018 with a cumulative-effect adjustment to the current period opening balance of retained earnings. This guidance also requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from changes in instrument-specific credit risk for instruments where the entity has elected the fair value option.  The adoption of this guidance is not expected to have a material impact on our consolidated financial statements.

In February 2016, the FASB issued new guidance that introduces a lessee model that brings most leases on the balance sheet and aligns many of the underlying principles of the new lessor model with those in the new revenue recognition standard.  The new leasing standard represents a wholesale change to lease accounting for lessees. Upon adoption, we expect to recognize lease liabilities and right-of-use assets (at their present value) in our Consolidated Balance Sheets related to predominantly all of the future minimum lease payments as disclosed in Note 12 – Commitments and Contingencies.  This accounting guidance is effective for us on April 1, 2019.  We continue to evaluate the other potential impacts of this guidance on our consolidated financial statements and related disclosures.

In June 2016, the FASB issued new guidance that introduces a new impairment model based on expected losses rather than incurred losses for certain types of financial instruments.  It also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination.  We expect this new guidance will result in an increase in our allowance for credit losses; the magnitude of which is under evaluation.  This accounting guidance is effective for us on April 1, 2020.  We are currently evaluating the other potential impacts of this guidance on our consolidated financial statements.

In August 2016, the FASB issued new guidance that is intended to reduce diversity in practice in the classification of certain items in the statement of cash flows. This accounting guidance is effective for us on April 1, 2018.  The adoption of this guidance is not expected to have a material impact on our consolidated financial statements and related disclosures.

In November 2016, the FASB issued new guidance that clarifies how restricted cash and cash equivalents should be classified and presented in the statement of cash flows and requires new disclosures related to restricted cash and cash equivalents.  This guidance was intended to reduce diversity in practice in the classification of restricted cash and cash equivalents on the statement of cash flows.  This accounting guidance is effective for us on April 1, 2018 at which time we will no longer report the change in restricted cash and cash equivalents in the operating or investing sections in our Consolidated Statements of Cash Flows, and cash and cash equivalents at the beginning and end of the period will include restricted cash and cash equivalents.  These changes will be applied using a retrospective transition method to each period presented.

In March 2017, the FASB issued new guidance that requires certain premiums on callable debt securities to be amortized to the earliest call date.  This accounting guidance is effective for us on April 1, 2019.  We are currently evaluating the potential impact of this guidance on our consolidated financial statements.

Note 1 – Interim Financial Data (Continued)

In August 2017, the FASB issued new guidance that makes targeted improvements to accounting for hedging activities.  This guidance eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires, for qualifying hedges, the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. The guidance provides new alternatives for applying hedge accounting and measuring the hedged item in fair value hedges of interest rate risk.  The guidance also modifies the accounting for components excluded from the assessment of hedge effectiveness, eases documentation and assessment requirements and modifies certain disclosure requirements.  This accounting guidance is effective for us on April 1, 2019.  We are currently evaluating the potential impact of this guidance on our consolidated financial statements and disclosures.

Recently Adopted Accounting Guidance

Recently Adopted Accounting Guidance

In April 2017, we adopted new FASB accounting guidance which clarifies that a change in the counterparty to a designated derivative hedging instrument does not, in and of itself, require de-designation of that hedging relationship provided that all other hedge accounting criteria continue to be met.  The adoption of this guidance did not have an impact on our consolidated financial statements.

In April 2017, we adopted new FASB accounting guidance which clarifies whether an embedded contingent put or call option is clearly and closely related to the debt host when bifurcating an embedded derivative.  The adoption of this guidance did not have an impact on our consolidated financial statements.

In April 2017, we adopted new FASB accounting guidance that further amends the analysis a reporting entity must perform to determine whether it should consolidate certain legal entities.  This guidance specifically addresses interests held through related parties that are under common control.  The adoption of this guidance did not change our consolidation conclusions and therefore did not have an impact on our consolidated financial statements.

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Fair Value Measurements (Tables)

6 Months Ended

Sep. 30, 2017

Fair Value Disclosures [Abstract]

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

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 in our Consolidated Balance Sheets.  

	September 30, 2017
									Counterparty
									netting &			Fair
	Level 1		Level 2			Level 3			collateral			value
Cash equivalents:
Money market instruments	$	447	$	1,251		$	-		$	-		$	1,698
Certificates of deposit		-		2,700			-			-			2,700
Cash equivalents total		447		3,951			-			-			4,398
Available-for-sale securities:
Debt instruments:
U.S. government and agency obligations		2,538		30			-			-			2,568
Municipal debt securities		-		11			-			-			11
Certificates of deposit		-		875			-			-			875
Commercial paper		-		5			-			-			5
Corporate debt securities		146		197			8			-			351
Mortgage-backed securities:
U.S. government agency		-		42			-			-			42
Non-agency residential		-		-			2			-			2
Non-agency commercial		-		-			38			-			38
Asset-backed securities		-		-			36			-			36
Equity instruments:
Fixed income mutual funds:
Fixed income mutual funds measured at net asset value													669
Total return bond funds		1,531		-			-			-			1,531
Available-for-sale securities total		4,215		1,160			84			-			6,128
Derivative assets:
Interest rate swaps		-		426			-			-			426
Interest rate floors		-		1			-			-			1
Foreign currency swaps		-		314			-			-			314
Counterparty netting and collateral		-		-			-			(679	)		(679	)
Derivative assets total		-		741			-			(679	)		62
Assets at fair value		4,662		5,852			84			(679	)		10,588
Derivative liabilities:
Interest rate swaps		-		(244	)		(12	)		-			(256	)
Foreign currency swaps		-		(360	)		-			-			(360	)
Counterparty netting and collateral		-		-			-			600			600
Liabilities at fair value		-		(604	)		(12	)		600			(16	)
Net assets at fair value	$	4,662	$	5,248		$	72		$	(79	)	$	10,572

	March 31, 2017
									Counterparty
									netting &			Fair
	Level 1		Level 2			Level 3			collateral			value
Cash equivalents:
Money market instruments	$	287	$	1,045		$	-		$	-		$	1,332
Certificates of deposit		-		2,630			-			-			2,630
Cash equivalents total		287		3,675			-			-			3,962
Available-for-sale securities:
Debt instruments:
U.S. government and agency obligations		2,273		33			2			-			2,308
Municipal debt securities		-		11			-			-			11
Certificates of deposit		105		650			-			-			755
Corporate debt securities		211		150			8			-			369
Mortgage-backed securities:
U.S. government agency		-		45			-			-			45
Non-agency residential		-		-			2			-			2
Non-agency commercial		-		-			37			-			37
Asset-backed securities		-		-			31			-			31
Equity instruments:
Fixed income mutual funds:
Fixed income mutual funds measured at net asset value													1,740
Total return bond funds		394		-			-			-			394
Available-for-sale securities total		2,983		889			80			-			5,692
Derivative assets:
Interest rate swaps		-		474			1			-			475
Interest rate floors		-		2			-			-			2
Foreign currency swaps		-		122			-			-			122
Counterparty netting and collateral		-		-			-			(548	)		(548	)
Derivative assets total		-		598			1			(548	)		51
Assets at fair value		3,270		5,162			81			(548	)		9,705
Derivative liabilities:
Interest rate swaps		-		(271	)		(6	)		-			(277	)
Foreign currency swaps		-		(1,114	)		(62	)		-			(1,176	)
Counterparty netting and collateral		-		-			-			1,407			1,407
Liabilities at fair value		-		(1,385	)		(68	)		1,407			(46	)
Net assets at fair value	$	3,270	$	3,777		$	13		$	859		$	9,659

Assets and Liabilities Measured on Recurring Basis Using Significant Unobservable Inputs

The following tables summarize the rollforward of all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs:

	Three Months Ended September 30, 2017
															Total net
															assets
	Available-for-sale securities											Derivative instruments, net			(liabilities)
									Total
	Corporate		Mortgage-			Asset-			available-			Interest
	debt		backed			backed			for-sale			rate
	securities		securities			securities			securities			swaps
Fair value, July 1, 2017	$	8	$	43		$	35		$	86		$	12		$	98
Total gains (losses)
Included in earnings		-		-			-			-			5			5
Included in other comprehensive income		-		-			1			1			-			1
Purchases, issuances, sales, and settlements
Purchases		-		-			5			5			-			5
Issuances		-		-			-			-			-			-
Sales		-		-			-			-			-			-
Settlements		-		(3	)		(5	)		(8	)		(29	)		(37	)
Transfers in to Level 3		-		-			-			-			-			-
Transfers out of Level 3		-		-			-			-			-			-
Fair value, September 30, 2017	$	8	$	40		$	36		$	84		$	(12	)	$	72
The amount of total gains   (losses) included in earnings   attributable to assets held   at the reporting date												$	5			5

	Three Months Ended September 30, 2016
																							Total net
																							assets
	Available-for-sale securities													Derivative instruments, net									(liabilities)
	U.S.										Total									Total
	government		Corporate		Mortgage-			Asset-			available-			Interest			Foreign			derivative
	and agency		debt		backed			backed			for-sale			rate			currency			assets
	obligations		securities		securities			securities			securities			swaps			swaps			(liabilities)
Fair value, July 1, 2016	$	2	$	7	$	45		$	35		$	89		$	62		$	(42	)	$	20		$	109
Total gains (losses)
Included in earnings		-		-		-			-			-			-			(8	)		(8	)		(8	)
Included in other comprehensive income		-		1		-			-			1			-			-			-			1
Purchases, issuances, sales, and settlements
Purchases		-		-		-			1			1			-			-			-			1
Issuances		-		-		-			-			-			-			-			-			-
Sales		-		-		-			-			-			-			-			-			-
Settlements		-		-		(4	)		(2	)		(6	)		(29	)		1			(28	)		(34	)
Transfers in to Level 3		-		-		-			-			-			-			-			-			-
Transfers out of Level 3		-		-		-			-			-			-			-			-			-
Fair value, September 30, 2016	$	2	$	8	$	41		$	34		$	85		$	33		$	(49	)	$	(16	)	$	69
The amount of total gains   (losses) included in earnings   attributable to assets held   at the reporting date														$	-		$	(8	)	$	(8	)	$	(8	)

	Six Months Ended September 30, 2017
																								Total net
																								assets
	Available-for-sale securities														Derivative instruments, net									(liabilities)
	U.S.											Total									Total
	government			Corporate		Mortgage-			Asset-			available-			Interest			Foreign			derivative
	and agency			debt		backed			backed			for-sale			rate			currency			assets
	obligations			securities		securities			securities			securities			swaps			swaps			(liabilities)
Fair value, April 1, 2017	$	2		$	8	$	39		$	31		$	80		$	(5	)	$	(62	)	$	(67	)	$	13
Total gains (losses)
Included in earnings		-			-		-			-			-			18			7			25			25
Included in other comprehensive income		-			-		-			1			1			-			-			-			1
Purchases, issuances, sales, and settlements
Purchases		-			-		5			16			21			-			-			-			21
Issuances		-			-		-			-			-			-			-			-			-
Sales		-			-		-			-			-			-			-			-			-
Settlements		-			-		(4	)		(12	)		(16	)		(25	)		55			30			14
Transfers in to Level 3		-			-		-			-			-			-			-			-			-
Transfers out of Level 3		(2	)		-		-			-			(2	)		-			-			-			(2	)
Fair value, September 30, 2017	$	-		$	8	$	40		$	36		$	84		$	(12	)	$	-		$	(12	)	$	72
The amount of total gains   (losses) included in earnings   attributable to assets held   at the reporting date															$	18		$	-		$	18		$	18

	Six Months Ended September 30, 2016
																							Total net
																							assets
	Available-for-sale securities													Derivative instruments, net									(liabilities)
	U.S.										Total									Total
	government		Corporate		Mortgage-			Asset-			available-			Interest			Foreign			derivative
	and agency		debt		backed			backed			for-sale			rate			currency			assets
	obligations		securities		securities			securities			securities			swaps			swaps			(liabilities)
Fair value, April 1, 2016	$	2	$	7	$	45		$	37		$	91		$	39		$	(14	)	$	25		$	116
Total gains (losses)
Included in earnings		-		-		-			-			-			20			(32	)		(12	)		(12	)
Included in other comprehensive income		-		1		1			-			2			-			-			-			2
Purchases, issuances, sales, and settlements
Purchases		-		-		-			3			3			-			-			-			3
Issuances		-		-		-			-			-			-			-			-			-
Sales		-		-		-			-			-			-			-			-			-
Settlements		-		-		(5	)		(6	)		(11	)		(26	)		(3	)		(29	)		(40	)
Transfers in to Level 3		-		-		-			-			-			-			-			-			-
Transfers out of Level 3		-		-		-			-			-			-			-			-			-
Fair value, September 30, 2016	$	2	$	8	$	41		$	34		$	85		$	33		$	(49	)	$	(16	)	$	69
The amount of total gains   (losses) included in earnings   attributable to assets held   at the reporting date														$	20		$	(32	)	$	(12	)	$	(12	)

Financial Assets and Liabilities Not Carried at Fair Value on Recurring Basis on Consolidated Balance Sheets

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

	September 30, 2017
	Carrying								Total Fair
	value		Level 1		Level 2		Level 3		Value
Financial assets
Finance receivables, net
Retail loan	$	51,283	$	-	$	-	$	51,349	$	51,349
Wholesale		9,198		-		-		9,252		9,252
Real estate		4,637		-		-		4,560		4,560
Working capital		2,143		-		-		2,177		2,177
Financial liabilities
Commercial paper	$	25,247	$	-	$	25,247	$	-	$	25,247
Unsecured notes and loans payable		58,327		-		57,166		2,058		59,224
Secured notes and loans payable		14,649		-		-		14,672		14,672

	March 31, 2017
	Carrying								Total Fair
	value		Level 1		Level 2		Level 3		Value
Financial assets
Finance receivables, net
Retail loan	$	50,682	$	-	$	-	$	50,733	$	50,733
Wholesale		10,819		-		-		10,881		10,881
Real estate		4,602		-		-		4,459		4,459
Working capital		2,218		-		-		2,222		2,222
Financial liabilities
Commercial paper	$	26,632	$	-	$	26,632	$	-	$	26,632
Unsecured notes and loans payable		57,282		-		55,838		2,385		58,223
Secured notes and loans payable		14,319		-		-		14,322		14,322

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Investments in Marketable Securities (Tables)

6 Months Ended

Sep. 30, 2017

Marketable Securities [Abstract]

Summary of Investments in Marketable Securities

The amortized cost and estimated fair value of investments in marketable securities and related unrealized gains and losses were as follows:

	September 30, 2017
	Amortized		Unrealized		Unrealized			Fair
	cost		gains		losses			value
Available-for-sale securities:
Debt instruments:
U.S. government and agency obligations	$	2,576	$	-	$	(8	)	$	2,568
Municipal debt securities		9		2		-			11
Certificates of deposit		875		-		-			875
Commercial paper		5		-		-			5
Corporate debt securities		347		5		(1	)		351
Mortgage-backed securities:
U.S. government agency		41		1		-			42
Non-agency residential		1		1		-			2
Non-agency commercial		38		-		-			38
Asset-backed securities		36		-		-			36
Equity instruments:
Fixed income mutual funds:
Short-term floating NAV fund II		30		-		-			30
U.S. government sector fund		189		5		(1	)		193
Municipal sector fund		8		-		-			8
Investment grade corporate sector fund		95		1		-			96
High-yield sector fund		30		3		-			33
Real return sector fund		5		-		-			5
Mortgage sector fund		146		3		-			149
Asset-backed securities sector fund		56		2		-			58
Emerging market sector fund		38		4		-			42
International sector fund		54		1		-			55
Total return bond funds		1,510		21		-			1,531
Total investments in marketable securities	$	6,089	$	49	$	(10	)	$	6,128

Note 3 – Investments in Marketable Securities (Continued)

	March 31, 2017
	Amortized		Unrealized		Unrealized			Fair
	cost		gains		losses			value
Available-for-sale securities:
Debt instruments:
U.S. government and agency obligations	$	2,314	$	1	$	(7	)	$	2,308
Municipal debt securities		10		1	-				11
Certificates of deposit		755	-		-				755
Corporate debt securities		368		2		(1	)		369
Mortgage-backed securities:
U.S. government agency		45		1		(1	)		45
Non-agency residential		2	-		-				2
Non-agency commercial		37		1		(1	)		37
Asset-backed securities		31	-		-				31
Equity instruments:
Fixed income mutual funds:
Short-term floating NAV fund II		39	-		-				39
U.S. government sector fund		389	-		-				389
Municipal sector fund		20	-		-				20
Investment grade corporate sector fund		252		9	-				261
High-yield sector fund		83		6	-				89
Real return sector fund		147		5	-				152
Mortgage sector fund		390		2	-				392
Asset-backed securities sector fund		140		10	-				150
Emerging market sector fund		105		7	-				112
International sector fund		136	-		-				136
Total return bond funds		389		5	-				394
Total investments in marketable securities	$	5,652	$	50	$	(10	)	$	5,692

Schedule of Realized Gains and Losses on Sales from AFS Presented in Our Consolidated Statement of Income

The following table represents realized gains and losses on our available-for-sale securities presented in our Consolidated Statements of Income:

	Three Months Ended					Six Months Ended
	September 30,					September 30,
	2017		2016			2017			2016
Available-for-sale securities:
Realized gains on sales	$	1	$	80		$	43		$	93
Realized losses on sales	$	-	$	-		$	(1	)	$	-
Other-than-temporary impairment	$	-	$	(10	)	$	-		$	(10	)

Summary of Contractual Maturities of Available-for-Sale Securities

The amortized cost, fair value, and contractual maturities of available-for-sale debt instruments are summarized in the following table.  Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay certain obligations.

	September 30, 2017
	AmortizedCost		Fair Value
Available-for-sale debt instruments:
Due within 1 year	$	1,980	$	1,978
Due after 1 year through 5 years		1,606		1,604
Due after 5 years through 10 years		142		142
Due after 10 years		84		86
Mortgage-backed and asset-backed securities1		116		118
Total	$	3,928	$	3,928

¹ Mortgage-backed and asset-backed securities are shown separately from other maturity groupings as these securities do not have a single maturity date.

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Finance Receivables, Net (Tables)

6 Months Ended

Sep. 30, 2017

Receivables [Abstract]

Net Financing Receivables

Finance receivables, net consisted of the following:

	September 30,			March 31,
	2017			2017
Retail receivables	$	39,732		$	38,338
Securitized retail receivables		12,423			13,071
Dealer financing		16,231			17,899
		68,386			69,308
Deferred origination (fees) and costs, net		642			644
Deferred income		(1,150	)		(1,023	)
Allowance for credit losses
Retail and securitized retail receivables		(359	)		(344	)
Dealer financing		(123	)		(123	)
Total allowance for credit losses		(482	)		(467	)
Finance receivables, net	$	67,396		$	68,462

Finance Receivable Credit Quality Indicators

The tables below present each credit quality indicator by class of finance receivables:

	Retail Loan
	September 30,		March 31,
	2017		2017
Aging of finance receivables:
Current	$	51,204	$	50,631
30-59 days past due		691		586
60-89 days past due		179		129
90 days or greater past due		81		63
Total	$	52,155	$	51,409

	Wholesale				Real Estate				Working Capital
	September 30,		March 31,		September 30,		March 31,		September 30,		March 31,
	2017		2017		2017		2017		2017		2017
Credit quality indicators:
Performing	$	8,123	$	9,592	$	3,993	$	4,010	$	2,020	$	2,082
Credit Watch		1,094		1,269		660		613		129		143
At Risk		55		12		55		45		22		5
Default		42		78		34		45		4		5
Total	$	9,314	$	10,951	$	4,742	$	4,713	$	2,175	$	2,235

Summary of Impaired Loans by Class of Finance Receivable

The following table summarizes the information related to our impaired loans by class of finance receivables: 

	Impaired								Individually Evaluated
	Finance Receivables				Unpaid Principal Balance				Allowance
	September 30,		March 31,		September 30,		March 31,		September 30,		March 31,
	2017		2017		2017		2017		2017		2017
Impaired account balances individually evaluated for impairment with an allowance:
Wholesale	$	75	$	93	$	75	$	93	$	13	$	12
Real estate		88		94		88		94		9		12
Working capital		44		31		44		31		23		9
Total	$	207	$	218	$	207	$	218	$	45	$	33
Impaired account balances individually evaluated for impairment without an allowance:
Wholesale	$	98	$	134	$	98	$	134
Real estate		98		105		98		105
Working capital		-		-		-		-
Total	$	196	$	239	$	196	$	239
Impaired account balances aggregated and evaluated for impairment:
Retail loan	$	220	$	220	$	218	$	217
Total	$	220	$	220	$	218	$	217
Total impaired account balances:
Retail loan	$	220	$	220	$	218	$	217
Wholesale		173		227		173		227
Real estate		186		199		186		199
Working capital		44		31		44		31
Total	$	623	$	677	$	621	$	674

The following table summarizes the average impaired loans by class of finance receivables as of the balance sheet date and the interest income recognized on these loans:

	Average Impaired FinanceReceivables								Interest Income Recognized
	Three Months Ended September 30,				Six Months Ended September 30,				Three Months Ended September 30,				Six Months Ended September 30,
	2017		2016		2017		2016		2017		2016		2017		2016
Impaired account balances individually evaluated for impairment with an allowance:
Wholesale	$	101	$	59	$	98	$	72	$	-	$	1	$	1	$	1
Real estate		91		87		92		98		1		-		2		1
Working capital		44		33		40		34		1		1		1		1
Total	$	236	$	179	$	230	$	204	$	2	$	2	$	4	$	3
Impaired account balances individually evaluated for impairment without an allowance:
Wholesale	$	116	$	160	$	122	$	168	$	1	$	-	$	2	$	2
Real estate		97		112		100		108		1		2		2		3
Working capital		-		-		-		1		-		-		-		-
Total	$	213	$	272	$	222	$	277	$	2	$	2	$	4	$	5
Impaired account balances aggregated and evaluated for impairment:
Retail loan	$	222	$	224	$	221	$	225	$	4	$	4	$	8	$	8
Total	$	222	$	224	$	221	$	225	$	4	$	4	$	8	$	8
Total impaired account balances:
Retail loan	$	222	$	224	$	221	$	225	$	4	$	4	$	8	$	8
Wholesale		217		219		220		240		1		1		3		3
Real estate		188		199		192		206		2		2		4		4
Working capital		44		33		40		35		1		1		1		1
Total	$	671	$	675	$	673	$	706	$	8	$	8	$	16	$	16

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Investments in Operating Leases, Net (Tables)

6 Months Ended

Sep. 30, 2017

Leases Operating [Abstract]

Investments in Operating Leases, Net

Investments in operating leases, net consisted of the following:

	September 30,			March 31,
	2017			2017
Investments in operating leases	$	40,783		$	41,874
Securitized investments in operating leases		9,105			6,502
		49,888			48,376
Deferred origination (fees) and costs, net		(218	)		(201	)
Deferred income		(1,447	)		(1,196	)
Accumulated depreciation		(9,246	)		(8,672	)
Allowance for credit losses		(154	)		(155	)
Investments in operating leases, net	$	38,823		$	38,152

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Allowance for Credit Losses (Tables)

6 Months Ended

Sep. 30, 2017

Loans And Leases Receivable Disclosure [Abstract]

Allowance for Credit Losses on Finance Receivables and Investments in Operating Leases

The following table provides information related to our allowance for credit losses on finance receivables and investments in operating leases:

	Three Months Ended						Six Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Allowance for credit losses at beginning of period	$	611		$	489		$	622		$	535
Provision for credit losses		127			161			212			213
Charge-offs, net of recoveries		(102	)		(124	)		(198	)		(222	)
Allowance for credit losses at end of period	$	636		$	526		$	636		$	526

Allowance for Credit Losses for Finance Receivables and Finance Receivables by Portfolio Segment

The following tables provide information related to our allowance for credit losses for finance receivables and finance receivables by portfolio segment:

	Three Months Ended September 30, 2017
	Retail Loan			DealerProducts			Total
Allowance for Credit Losses for Finance Receivables:
Beginning balance, July 1, 2017	$	322		$	131		$	453
Charge-offs		(86	)		-			(86	)
Recoveries		13			-			13
Provisions		110			(8	)		102
Ending balance, September 30, 2017	$	359		$	123		$	482
	Six Months Ended September 30, 2017
	Retail Loan			DealerProducts			Total
Beginning balance, April 1, 2017	$	344		$	123		$	467
Charge-offs		(165	)		-			(165	)
Recoveries		26			-			26
Provisions		154			-			154
Ending balance, September 30, 2017	$	359		$	123		$	482
Allowance for Credit Losses for Finance Receivables:
Ending balance: Individually evaluated for impairment	$	-		$	45		$	45
Ending balance: Collectively evaluated for impairment	$	359		$	78		$	437
Finance Receivables:
Ending balance, September 30, 2017	$	52,155		$	16,231		$	68,386
Ending balance: Individually evaluated for impairment	$	-		$	403		$	403
Ending balance: Collectively evaluated for impairment	$	52,155		$	15,828		$	67,983

	Three Months Ended September 30, 2016
	Retail Loan			DealerProducts			Total
Allowance for Credit Losses for Finance Receivables:
Beginning balance, July 1, 2016	$	278		$	88		$	366
Charge-offs		(99	)		-			(99	)
Recoveries		13			-			13
Provisions		103			6			109
Ending balance, September 30, 2016	$	295		$	94		$	389
	Six Months Ended September 30, 2016
	Retail Loan			DealerProducts			Total
Beginning balance, April 1, 2016	$	289		$	132		$	421
Charge-offs		(181	)		-			(181	)
Recoveries		26			-			26
Provisions		161			(38	)		123
Ending balance, September 30, 2016	$	295		$	94		$	389
Allowance for Credit Losses for Finance Receivables:
Ending balance: Individually evaluated for impairment	$	-		$	27		$	27
Ending balance: Collectively evaluated for impairment	$	295		$	67		$	362
Finance Receivables:
Ending balance, September 30, 2016	$	50,711		$	15,445		$	66,156
Ending balance: Individually evaluated for impairment	$	-		$	435		$	435
Ending balance: Collectively evaluated for impairment	$	50,711		$	15,010		$	65,721

Past Due Finance Receivables and Investments in Operating Leases

The following table shows aggregate balances of finance receivables and investments in operating leases 60 or more days past due:

	September 30,		March 31,
	2017		2017
Aggregate balances 60 or more days past due
Finance receivables	$	260	$	192
Investments in operating leases		123		95
Total	$	383	$	287

Past Due Finance Receivables by Class

The following tables summarize the aging of finance receivables by class:

	September 30, 2017
	30 - 59 Days Past Due		60 - 89 Days Past Due		90Daysor Greater Past Due		TotalPast Due		Current		TotalFinance Receivables		90 Days or GreaterPast Due and Accruing
Retail loan	$	691	$	179	$	81	$	951	$	51,204	$	52,155	$	59
Wholesale		-		-		-		-		9,314		9,314		-
Real estate		-		-		-		-		4,742		4,742		-
Working capital		-		-		-		-		2,175		2,175		-
Total	$	691	$	179	$	81	$	951	$	67,435	$	68,386	$	59

	March 31, 2017
	30 - 59 Days Past Due		60 - 89 Days Past Due		90Daysor Greater Past Due		TotalPast Due		Current		TotalFinance Receivables		90Daysor GreaterPast Due and Accruing
Retail loan	$	586	$	129	$	63	$	778	$	50,631	$	51,409	$	41
Wholesale		-		-		-		-		10,951		10,951		-
Real estate		-		-		-		-		4,713		4,713		-
Working capital		3		-		-		3		2,232		2,235		-
Total	$	589	$	129	$	63	$	781	$	68,527	$	69,308	$	41

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Derivatives, Hedging Activities and Interest Expense (Tables)

6 Months Ended

Sep. 30, 2017

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivative Activity Impact on Consolidated Balance Sheet

The following tables show the financial statement line item and amount of our derivative assets and liabilities that are reported in our Consolidated Balance Sheets:

	September 30, 2017
	Hedge accounting				Non-hedge
	derivatives				accountingderivatives				Total
			Fair				Fair				Fair
	Notional		value		Notional		value		Notional		value
Other assets:
Interest rate swaps	$	-	$	-	$	64,717	$	426	$	64,717	$	426
Interest rate floors		-		-		847		1		847		1
Foreign currency swaps		271		21		5,519		293		5,790		314
Total	$	271	$	21	$	71,083	$	720	$	71,354	$	741
Counterparty netting and collateral held												(679	)
Carrying value of derivative    contracts – Other assets											$	62
Other liabilities:
Interest rate swaps	$	-	$	-	$	47,224	$	256	$	47,224	$	256
Interest rate caps		-		-		30		-		30		-
Foreign currency swaps		93		3		6,651		357		6,744		360
Total	$	93	$	3	$	53,905	$	613	$	53,998	$	616
Counterparty netting and collateral posted												(600	)
Carrying value of derivative    contracts – Other liabilities											$	16

Note 7 – Derivatives, Hedging Activities and Interest Expense (Continued)

	March 31, 2017
	Hedge accounting				Non-hedge
	derivatives				accountingderivatives				Total
			Fair				Fair				Fair
	Notional		value		Notional		value		Notional		value
Other assets:
Interest rate swaps	$	-	$	-	$	62,525	$	475	$	62,525	$	475
Interest rate floors		-		-		1,673		2		1,673		2
Foreign currency swaps		271		28		1,648		94		1,919		122
Total	$	271	$	28	$	65,846	$	571	$	66,117	$	599
Counterparty netting and collateral held												(548	)
Carrying value of derivative    contracts – Other assets											$	51
Other liabilities:
Interest rate swaps	$	-	$	-	$	45,297	$	277	$	45,297	$	277
Interest rate caps		-		-		30		-		30		-
Foreign currency swaps		93		1		12,570		1,175		12,663		1,176
Total	$	93	$	1	$	57,897	$	1,452	$	57,990	$	1,453
Counterparty netting and collateral posted												(1,407	)
Carrying value of derivative    contracts – Other liabilities											$	46

Components of Interest Expense

The following table summarizes the components of interest expense, including the location and amount of gains and losses on derivative instruments and related hedged items, as reported in our Consolidated Statements of Income:

	Three Months Ended						Six Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Interest expense on debt	$	484		$	377		$	951		$	736
Interest income on derivatives		(18	)		(5	)		(34	)		(7	)
Interest expense on debt and derivatives, net		466			372			917			729
Loss (gain) on hedge accounting derivatives:
Foreign currency swaps		3			(4	)		10			(37	)
Loss (gain) on hedge accounting derivatives		3			(4	)		10			(37	)
Less hedged item:  change in fair value of fixed rate   debt denominated in a foreign currency		(3	)		4			(10	)		37
Ineffectiveness related to hedge accounting derivatives		-			-			-			-
Loss (gain) on debt denominated in foreign currencies    and U.S. dollar non-hedge accounting derivatives:
Loss (gain) on non-hedge accounting debt denominated   in foreign currencies		373			156			1,023			(62	)
(Gain) loss on non-hedge accounting foreign currency swaps		(383	)		(156	)		(1,033	)		32
Gain on U.S. dollar non-hedge accounting interest   rate swaps		(4	)		(75	)		(7	)		(95	)
Total interest expense	$	452		$	297		$	900		$	604

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Other Assets and Other Liabilities (Tables)

6 Months Ended

Sep. 30, 2017

Other Assets And Other Liabilities [Abstract]

Other Assets and Other Liabilities

Other assets and other liabilities consisted of the following:

	September 30,		March 31,
	2017		2017
Other assets:
Notes receivable from affiliates	$	591	$	823
Used vehicles held for sale		298		264
Income taxes receivable		81		-
Derivative assets		62		51
Other assets		1,011		906
Total other assets	$	2,043	$	2,044
Other liabilities:
Unearned insurance premiums and contract revenues	$	2,226	$	2,154
Accounts payable and accrued expenses		1,020		1,057
Deferred income		485		468
Income taxes payable		-		62
Derivative liabilities		16		46
Other liabilities		175		165
Total other liabilities	$	3,922	$	3,952

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Debt (Tables)

6 Months Ended

Sep. 30, 2017

Debt Disclosure [Abstract]

Debt and Related Weighted Average Contractual Interest Rates

Debt and the related weighted average contractual interest rates are summarized as follows:

					Weighted average
					contractual interest rates
	September 30,		March 31,		September 30,			March 31,
	2017		2017		2017			2017
Commercial paper	$	25,247	$	26,632		1.28	%		1.11	%
Unsecured notes and loans payable		58,327		57,282		2.02	%		1.91	%
Secured notes and loans payable		14,649		14,319		1.58	%		1.32	%
Total debt	$	98,223	$	98,233		1.76	%		1.60	%

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Variable Interest Entities (Tables)

6 Months Ended

Sep. 30, 2017

Variable Interest Entity Consolidated Carrying Amount Assets And Liabilities [Abstract]

Schedule of Variable Interest Entities, Securitization Transactions Assets and Liabilities

The following tables show the assets and liabilities related to our VIE securitization transactions that were included in our Consolidated Balance Sheets:

	September 30, 2017
			VIE Assets						VIE Liabilities
			Gross		Net
	Restricted Cash		Securitized Assets		Securitized Assets		Other Assets		Debt		Other Liabilities
Retail finance receivables	$	712	$	12,423	$	12,219	$	6	$	10,232	$	6
Investments in operating leases		296		9,105		6,774		123		4,417		2
Total	$	1,008	$	21,528	$	18,993	$	129	$	14,649	$	8

	March 31, 2017
			VIE Assets						VIE Liabilities
			Gross		Net
	Restricted Cash		Securitized Assets		Securitized Assets		Other Assets		Debt		Other Liabilities
Retail finance receivables	$	856	$	13,071	$	12,865	$	7	$	11,017	$	5
Investments in operating leases		211		6,502		4,888		80		3,302		1
Total	$	1,067	$	19,573	$	17,753	$	87	$	14,319	$	6

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Commitments and Contingencies (Tables)

6 Months Ended

Sep. 30, 2017

Commitments And Contingencies Disclosure [Abstract]

Commitments and Guarantees

We have entered into certain commitments and guarantees for which the maximum unfunded amounts are summarized in the table below:

	September 30,		March 31,
	2017		2017
Commitments:
Credit facilities commitments with dealers	$	1,322	$	1,199
Minimum lease commitments		173		59
Total commitments		1,495		1,258
Guarantees of affiliate pollution control and solid waste disposal bonds		100		100
Total commitments and guarantees	$	1,595	$	1,358

Future Minimum Lease Payments under Non-cancelable Operating Leases

At September 30, 2017, minimum future commitments under lease agreements to which we are a lessee, including those with affiliates, are as follows:

	Futureminimum
Years ending March 31,	leasepayments
2018	$	15
2019		24
2020		20
2021		15
2022		18
Thereafter		81
Total	$	173

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Related Party Transactions (Tables)

6 Months Ended

Sep. 30, 2017

Related Party Transactions [Abstract]

Related Party Transactions Included in Consolidated Statements of Income

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

	Three Months Ended				Six Months Ended
	September 30,				September 30,
	2017		2016		2017			2016
Total financing revenues:
Manufacturers’ subvention and other revenues	$	382	$	334	$	750		$	670
Interest expense:
Credit support fees incurred	$	24	$	23	$	47		$	46
Interest and other expenses	$	-	$	-	$	1		$	1
Insurance earned premiums and contract revenues:
Insurance premiums and contract revenues	$	45	$	35	$	89		$	69
Investment and other income, net:
Interest and other income	$	3	$	3	$	7		$	5
Expenses:
Operating and administrative	$	23	$	17	$	42		$	34
Insurance losses and loss adjustment expenses1	$	1	$	-	$	(4	)	$	1

¹ Amount includes the transfer of insurance losses and loss adjustment expenses from the purchase of a reinsurance contract.

Related Party Transactions Included in Consolidated Balance Sheets

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

	September 30,			March 31,
	2017			2017
Assets:
Investments in marketable securities
Investments in commercial paper	$	5		$	-
Finance receivables, net
Accounts receivable	$	133		$	138
Deferred retail subvention income	$	(1,095	)	$	(967	)
Investments in operating leases, net
Investments in operating leases, net	$	6		$	4
Deferred lease subvention income	$	(1,428	)	$	(1,174	)
Other assets
Notes receivable	$	591		$	823
Other receivables, net	$	243		$	202
Liabilities:
Other liabilities
Unearned affiliate insurance premiums and contract revenues	$	330		$	332
Other payables, net	$	59		$	74
Notes payable	$	24		$	13

XML

Segment Information (Tables)

6 Months Ended

Sep. 30, 2017

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

Financial information for our reportable operating segments is summarized as follows:

	Three Months Ended September 30, 2017
	Finance		Insurance		Intercompany
	operations		operations		eliminations			Total
Total financing revenues	$	2,647	$	-	$	-		$	2,647
Depreciation on operating leases		1,719		-		-			1,719
Interest expense		455		-		(3	)		452
Net financing revenues		473		-		3			476
Insurance earned premiums and contract revenues		-		221		-			221
Investment and other income, net		36		22		(3	)		55
Realized gains, net on investments in    marketable securities		-		1		-			1
Net financing and other revenues		509		244		-			753
Expenses:
Provision for credit losses		127		-		-			127
Operating and administrative expenses		259		78		-			337
Insurance losses and loss adjustment expenses		-		102		-			102
Total expenses		386		180		-			566
Income before income taxes		123		64		-			187
Provision for income taxes		47		23		-			70
Net income	$	76	$	41	$	-		$	117

	Six Months Ended September 30, 2017
	Finance		Insurance		Intercompany
	operations		operations		eliminations			Total
Total financing revenues	$	5,245	$	-	$	-		$	5,245
Depreciation on operating leases		3,400		-		-			3,400
Interest expense		906		-		(6	)		900
Net financing revenues		939		-		6			945
Insurance earned premiums and contract revenues		-		437		-			437
Investment and other income, net		68		40		(6	)		102
Realized gains, net on investments in    marketable securities		-		42		-			42
Net financing and other revenues		1,007		519		-			1,526
Expenses:
Provision for credit losses		212		-		-			212
Operating and administrative expenses		492		158		-			650
Insurance losses and loss adjustment expenses		-		216		-			216
Total expenses		704		374		-			1,078
Income before income taxes		303		145		-			448
Provision for income taxes		112		54		-			166
Net income	$	191	$	91	$	-		$	282
Total assets at September 30, 2017	$	116,463	$	4,741	$	(1,104	)	$	120,100

Note 15 – Segment Information (Continued)

	Three Months Ended September 30, 2016
	Finance		Insurance			Intercompany
	operations		operations			eliminations		Total
Total financing revenues	$	2,496	$	-		$	-	$	2,496
Depreciation on operating leases		1,683		-			-		1,683
Interest expense		297		-			-		297
Net financing revenues		516		-			-		516
Insurance earned premiums and contract revenues		-		199			-		199
Investment and other income, net		24		18			-		42
Realized gains (losses), net on investments in     marketable securities		76		(6	)		-		70
Net financing and other revenues		616		211			-		827
Expenses:
Provision for credit losses		161		-			-		161
Operating and administrative expenses		242		75			-		317
Insurance losses and loss adjustment expenses		-		91			-		91
Total expenses		403		166			-		569
Income before income taxes		213		45			-		258
Provision for income taxes		80		15			-		95
Net income	$	133	$	30		$	-	$	163

	Six Months Ended September 30, 2016
	Finance		Insurance			Intercompany
	operations		operations			eliminations			Total
Total financing revenues	$	4,954	$	-		$	-		$	4,954
Depreciation on operating leases		3,272		-			-			3,272
Interest expense		604		-			-			604
Net financing revenues		1,078		-			-			1,078
Insurance earned premiums and contract revenues		-		392			-			392
Investment and other income, net		47		34			-			81
Realized gains (losses), net on investments in    marketable securities		87		(4	)		-			83
Net financing and other revenues		1,212		422			-			1,634
Expenses:
Provision for credit losses		213		-			-			213
Operating and administrative expenses		452		144			-			596
Insurance losses and loss adjustment expenses		-		180			-			180
Total expenses		665		324			-			989
Income before income taxes		547		98			-			645
Provision for income taxes		205		36			-			241
Net income	$	342	$	62		$	-		$	404
Total assets at September 30, 2016	$	112,355	$	4,417		$	(979	)	$	115,793

XML

Fair Value Measurements - Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Millions	Sep. 30, 2017	Mar. 31, 2017
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	$ 3,928
Available-for-sale securities total	6,128	$ 5,692
Derivative assets	62	51
Counterparty netting and collateral	(309)	(154)
Derivative liabilities	(16)	(46)
Counterparty netting and collateral	230	1,013
U.S. government and agency obligations [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	2,568	2,308
Municipal debt securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	11	11
Corporate debt securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	351	369
U.S. government agency mortgage-backed securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	42	45
Non-agency residential mortgage-backed securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	2	2
Non-agency commercial mortgage-backed securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	38	37
Asset-backed securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	36	31
Fixed income total return bond funds [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Equity instruments	1,531	394
Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Cash equivalents	4,398	3,962
Available-for-sale securities total	6,128	5,692
Derivative assets	62	51
Counterparty netting and collateral	(679)	(548)
Assets at fair value	10,588	9,705
Counterparty netting and collateral	600	1,407
Liabilities at fair value	(16)	(46)
Net assets at fair value	10,572	9,659
Derivative asset liability collateral obligation right to return reclaim cash offset	(79)	859
Recurring [Member] | Money market instruments [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Cash equivalents	1,698	1,332
Recurring [Member] | Certificates of deposit [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Cash equivalents	2,700	2,630
Available-for-sale securities, Debt instruments	875	755
Recurring [Member] | Commercial paper [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	5
Recurring [Member] | U.S. government and agency obligations [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	2,568	2,308
Recurring [Member] | Municipal debt securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	11	11
Recurring [Member] | Corporate debt securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	351	369
Recurring [Member] | U.S. government agency mortgage-backed securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	42	45
Recurring [Member] | Non-agency residential mortgage-backed securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	2	2
Recurring [Member] | Non-agency commercial mortgage-backed securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	38	37
Recurring [Member] | Asset-backed securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	36	31
Recurring [Member] | Fixed income total return bond funds [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Equity instruments	1,531	394
Recurring [Member] | Foreign currency swaps [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative assets	314	122
Derivative liabilities	(360)	(1,176)
Recurring [Member] | Interest rate swaps [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative assets	426	475
Derivative liabilities	(256)	(277)
Recurring [Member] | Interest rate floors [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative assets	1	2
Recurring [Member] | Level 1 [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Cash equivalents	447	287
Available-for-sale securities total	4,215	2,983
Derivative assets	0	0
Counterparty netting and collateral	0	0
Assets at fair value	4,662	3,270
Counterparty netting and collateral	0	0
Liabilities at fair value	0	0
Net assets at fair value	4,662	3,270
Recurring [Member] | Level 1 [Member] | Money market instruments [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Cash equivalents	447	287
Recurring [Member] | Level 1 [Member] | Certificates of deposit [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Available-for-sale securities, Debt instruments	0	105
Recurring [Member] | Level 1 [Member] | Commercial paper [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	0
Recurring [Member] | Level 1 [Member] | U.S. government and agency obligations [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	2,538	2,273
Recurring [Member] | Level 1 [Member] | Municipal debt securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	0	0
Recurring [Member] | Level 1 [Member] | Corporate debt securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	146	211
Recurring [Member] | Level 1 [Member] | U.S. government agency mortgage-backed securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	0	0
Recurring [Member] | Level 1 [Member] | Non-agency residential mortgage-backed securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	0	0
Recurring [Member] | Level 1 [Member] | Non-agency commercial mortgage-backed securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	0	0
Recurring [Member] | Level 1 [Member] | Asset-backed securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	0	0
Recurring [Member] | Level 1 [Member] | Fixed income total return bond funds [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Equity instruments	1,531	394
Recurring [Member] | Level 1 [Member] | Foreign currency swaps [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative assets	0	0
Derivative liabilities	0	0
Recurring [Member] | Level 1 [Member] | Interest rate swaps [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative assets	0	0
Derivative liabilities	0	0
Recurring [Member] | Level 1 [Member] | Interest rate floors [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative assets	0	0
Recurring [Member] | Level 2 [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Cash equivalents	3,951	3,675
Available-for-sale securities total	1,160	889
Derivative assets	741	598
Counterparty netting and collateral	0	0
Assets at fair value	5,852	5,162
Counterparty netting and collateral	0	0
Liabilities at fair value	(604)	(1,385)
Net assets at fair value	5,248	3,777
Recurring [Member] | Level 2 [Member] | Money market instruments [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Cash equivalents	1,251	1,045
Recurring [Member] | Level 2 [Member] | Certificates of deposit [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Cash equivalents	2,700	2,630
Available-for-sale securities, Debt instruments	875	650
Recurring [Member] | Level 2 [Member] | Commercial paper [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	5
Recurring [Member] | Level 2 [Member] | U.S. government and agency obligations [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	30	33
Recurring [Member] | Level 2 [Member] | Municipal debt securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	11	11
Recurring [Member] | Level 2 [Member] | Corporate debt securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	197	150
Recurring [Member] | Level 2 [Member] | U.S. government agency mortgage-backed securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	42	45
Recurring [Member] | Level 2 [Member] | Non-agency residential mortgage-backed securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	0	0
Recurring [Member] | Level 2 [Member] | Non-agency commercial mortgage-backed securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	0	0
Recurring [Member] | Level 2 [Member] | Asset-backed securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	0	0
Recurring [Member] | Level 2 [Member] | Fixed income total return bond funds [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Equity instruments	0	0
Recurring [Member] | Level 2 [Member] | Foreign currency swaps [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative assets	314	122
Derivative liabilities	(360)	(1,114)
Recurring [Member] | Level 2 [Member] | Interest rate swaps [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative assets	426	474
Derivative liabilities	(244)	(271)
Recurring [Member] | Level 2 [Member] | Interest rate floors [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative assets	1	2
Recurring [Member] | Level 3 [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Available-for-sale securities total	84	80
Derivative assets	0	1
Counterparty netting and collateral	0	0
Assets at fair value	84	81
Counterparty netting and collateral	0	0
Liabilities at fair value	(12)	(68)
Net assets at fair value	72	13
Recurring [Member] | Level 3 [Member] | Money market instruments [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Recurring [Member] | Level 3 [Member] | Certificates of deposit [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Available-for-sale securities, Debt instruments	0	0
Recurring [Member] | Level 3 [Member] | Commercial paper [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	0
Recurring [Member] | Level 3 [Member] | U.S. government and agency obligations [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	0	2
Recurring [Member] | Level 3 [Member] | Municipal debt securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	0	0
Recurring [Member] | Level 3 [Member] | Corporate debt securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	8	8
Recurring [Member] | Level 3 [Member] | U.S. government agency mortgage-backed securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	0	0
Recurring [Member] | Level 3 [Member] | Non-agency residential mortgage-backed securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	2	2
Recurring [Member] | Level 3 [Member] | Non-agency commercial mortgage-backed securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	38	37
Recurring [Member] | Level 3 [Member] | Asset-backed securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Debt instruments	36	31
Recurring [Member] | Level 3 [Member] | Fixed income total return bond funds [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Equity instruments	0	0
Recurring [Member] | Level 3 [Member] | Foreign currency swaps [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative assets	0	0
Derivative liabilities	0	(62)
Recurring [Member] | Level 3 [Member] | Interest rate swaps [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative assets	0	1
Derivative liabilities	(12)	(6)
Recurring [Member] | Level 3 [Member] | Interest rate floors [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative assets	0	0
Recurring [Member] | Fixed income mutual funds measured at net asset value [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities, Equity instruments	$ 669	$ 1,740

XML

Fair Value Measurements - Assets and Liabilities Measured on Recurring Basis Using Significant Unobservable Inputs (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Fair value	$ 98	$ 109	$ 13	$ 116
Total gains (losses) included in earnings	5	(8)	25	(12)
Total gains (losses) included in other comprehensive income	1	1	1	2
Purchases	5	1	21	3
Issuances	0	0	0	0
Sales	0	0	0	0
Settlements	(37)	(34)	14	(40)
Transfers in to Level 3	0	0	0	0
Transfers out of Level 3	0	0	(2)	0
Fair value	72	69	72	69
The amount of total gains (losses) included in earnings attributable to assets held at the reporting date	5	(8)	18	(12)
Available-for-sale securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Fair value	86	89	80	91
Total gains (losses) included in earnings	0	0	0	0
Total gains (losses) included in other comprehensive income	1	1	1	2
Purchases	5	1	21	3
Issuances	0	0	0	0
Sales	0	0	0	0
Settlements	(8)	(6)	(16)	(11)
Transfers in to Level 3	0	0	0	0
Transfers out of Level 3	0	0	(2)	0
Fair value	84	85	84	85
The amount of total gains (losses) included in earnings attributable to assets held at the reporting date	0	0	0	0
Available-for-sale securities [Member] | U.S. government and agency obligations [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Fair value		2	2	2
Total gains (losses) included in earnings		0	0	0
Total gains (losses) included in other comprehensive income		0	0	0
Purchases		0	0	0
Issuances		0	0	0
Sales		0	0	0
Settlements		0	0	0
Transfers in to Level 3		0	0	0
Transfers out of Level 3		0	(2)	0
Fair value	0	2	0	2
The amount of total gains (losses) included in earnings attributable to assets held at the reporting date		0	0	0
Available-for-sale securities [Member] | Corporate debt securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Fair value	8	7	8	7
Total gains (losses) included in earnings	0	0	0	0
Total gains (losses) included in other comprehensive income	0	1	0	1
Purchases	0	0	0	0
Issuances	0	0	0	0
Sales	0	0	0	0
Settlements	0	0	0	0
Transfers in to Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
Fair value	8	8	8	8
The amount of total gains (losses) included in earnings attributable to assets held at the reporting date	0	0	0	0
Available-for-sale securities [Member] | Mortgage-backed securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Fair value	43	45	39	45
Total gains (losses) included in earnings	0	0	0	0
Total gains (losses) included in other comprehensive income	0	0	0	1
Purchases	0	0	5	0
Issuances	0	0	0	0
Sales	0	0	0	0
Settlements	(3)	(4)	(4)	(5)
Transfers in to Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
Fair value	40	41	40	41
The amount of total gains (losses) included in earnings attributable to assets held at the reporting date	0	0	0	0
Available-for-sale securities [Member] | Asset-backed securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Fair value	35	35	31	37
Total gains (losses) included in earnings	0	0	0	0
Total gains (losses) included in other comprehensive income	1	0	1	0
Purchases	5	1	16	3
Issuances	0	0	0	0
Sales	0	0	0	0
Settlements	(5)	(2)	(12)	(6)
Transfers in to Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
Fair value	36	34	36	34
The amount of total gains (losses) included in earnings attributable to assets held at the reporting date	0	0	0	0
Derivative [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
The amount of total gains (losses) included in earnings attributable to assets held at the reporting date		(8)	18	(12)
Fair value		20	(67)	25
Total gains (losses) included in earnings		(8)	25	(12)
Total gains (losses) included in other comprehensive income		0	0	0
Purchases		0	0	0
Issuances		0	0	0
Sales		0	0	0
Settlements		(28)	30	(29)
Transfers in to Level 3		0	0	0
Transfers out of Level 3		0	0	0
Fair value	(12)	(16)	(12)	(16)
Derivative [Member] | Interest rate swaps [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
The amount of total gains (losses) included in earnings attributable to assets held at the reporting date	5	0	18	20
Fair value	12	62	(5)	39
Total gains (losses) included in earnings	5	0	18	20
Total gains (losses) included in other comprehensive income	0	0	0	0
Purchases	0	0	0	0
Issuances	0	0	0	0
Sales	0	0	0	0
Settlements	(29)	(29)	(25)	(26)
Transfers in to Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
Fair value	(12)	33	(12)	33
Derivative [Member] | Foreign currency swaps [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
The amount of total gains (losses) included in earnings attributable to assets held at the reporting date		(8)	0	(32)
Fair value		(42)	(62)	(14)
Total gains (losses) included in earnings		(8)	7	(32)
Total gains (losses) included in other comprehensive income		0	0	0
Purchases		0	0	0
Issuances		0	0	0
Sales		0	0	0
Settlements		1	55	(3)
Transfers in to Level 3		0	0	0
Transfers out of Level 3		0	0	0
Fair value	$ 0	$ (49)	$ 0	$ (49)

XML

Fair Value Measurements - Assets and Liabilities Not Carried at Fair Value on Recurring Basis on Consolidated Balance Sheets (Details) - USD ($) $ in Millions	Sep. 30, 2017	Mar. 31, 2017
Financial liabilities
Financial liabilities	$ 25,247	$ 26,632
Financial liabilities	98,223	98,233
Unsecured notes and loans payable [Member]
Financial liabilities
Financial liabilities	58,327	57,282
Secured notes and loans payable [Member]
Financial liabilities
Financial liabilities	14,649	14,319
Fair value [Member] | Commercial paper [Member]
Financial liabilities
Financial liabilities	25,247	26,632
Fair value [Member] | Unsecured notes and loans payable [Member]
Financial liabilities
Financial liabilities	59,224	58,223
Fair value [Member] | Secured notes and loans payable [Member]
Financial liabilities
Financial liabilities	14,672	14,322
Fair value [Member] | Level 1 [Member] | Commercial paper [Member]
Financial liabilities
Financial liabilities	0	0
Fair value [Member] | Level 1 [Member] | Unsecured notes and loans payable [Member]
Financial liabilities
Financial liabilities	0	0
Fair value [Member] | Level 1 [Member] | Secured notes and loans payable [Member]
Financial liabilities
Financial liabilities	0	0
Fair value [Member] | Level 2 [Member] | Commercial paper [Member]
Financial liabilities
Financial liabilities	25,247	26,632
Fair value [Member] | Level 2 [Member] | Unsecured notes and loans payable [Member]
Financial liabilities
Financial liabilities	57,166	55,838
Fair value [Member] | Level 2 [Member] | Secured notes and loans payable [Member]
Financial liabilities
Financial liabilities	0	0
Fair value [Member] | Level 3 [Member] | Commercial paper [Member]
Financial liabilities
Financial liabilities	0	0
Fair value [Member] | Level 3 [Member] | Unsecured notes and loans payable [Member]
Financial liabilities
Financial liabilities	2,058	2,385
Fair value [Member] | Level 3 [Member] | Secured notes and loans payable [Member]
Financial liabilities
Financial liabilities	14,672	14,322
Retail Loan [Member] | Carrying value [Member]
Financial assets
Finance receivables, net	51,283	50,682
Retail Loan [Member] | Fair value [Member]
Financial assets
Finance receivables, net	51,349	50,733
Retail Loan [Member] | Fair value [Member] | Level 1 [Member]
Financial assets
Finance receivables, net	0	0
Retail Loan [Member] | Fair value [Member] | Level 2 [Member]
Financial assets
Finance receivables, net	0	0
Retail Loan [Member] | Fair value [Member] | Level 3 [Member]
Financial assets
Finance receivables, net	51,349	50,733
Wholesale [Member] | Carrying value [Member]
Financial assets
Finance receivables, net	9,198	10,819
Wholesale [Member] | Fair value [Member]
Financial assets
Finance receivables, net	9,252	10,881
Wholesale [Member] | Fair value [Member] | Level 1 [Member]
Financial assets
Finance receivables, net	0	0
Wholesale [Member] | Fair value [Member] | Level 2 [Member]
Financial assets
Finance receivables, net	0	0
Wholesale [Member] | Fair value [Member] | Level 3 [Member]
Financial assets
Finance receivables, net	9,252	10,881
Real estate [Member] | Carrying value [Member]
Financial assets
Finance receivables, net	4,637	4,602
Real estate [Member] | Fair value [Member]
Financial assets
Finance receivables, net	4,560	4,459
Real estate [Member] | Fair value [Member] | Level 1 [Member]
Financial assets
Finance receivables, net	0	0
Real estate [Member] | Fair value [Member] | Level 2 [Member]
Financial assets
Finance receivables, net	0	0
Real estate [Member] | Fair value [Member] | Level 3 [Member]
Financial assets
Finance receivables, net	4,560	4,459
Working capital [Member] | Carrying value [Member]
Financial assets
Finance receivables, net	2,143	2,218
Working capital [Member] | Fair value [Member]
Financial assets
Finance receivables, net	2,177	2,222
Working capital [Member] | Fair value [Member] | Level 1 [Member]
Financial assets
Finance receivables, net	0	0
Working capital [Member] | Fair value [Member] | Level 2 [Member]
Financial assets
Finance receivables, net	0	0
Working capital [Member] | Fair value [Member] | Level 3 [Member]
Financial assets
Finance receivables, net	$ 2,177	$ 2,222

XML

Fair Value Measurements - Additional Information (Details) - USD ($) $ in Millions	Sep. 30, 2017	Mar. 31, 2017
Fair Value Disclosures [Abstract]
Finance receivables from related party	$ 131	$ 136

XML

Investments in Marketable Securities - Summary of Investments in Marketable Securities (Details) - USD ($) $ in Millions	Sep. 30, 2017	Mar. 31, 2017
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Debt instruments, Amortized cost	$ 3,928
Available-for-sale securities, Debt instruments, Fair value	3,928
Amortized cost	6,089	$ 5,652
Unrealized gains	49	50
Unrealized losses	(10)	(10)
Fair value	6,128	5,692
U.S. government and agency obligations [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Debt instruments, Amortized cost	2,576	2,314
Unrealized gains	0	1
Unrealized losses	(8)	(7)
Available-for-sale securities, Debt instruments, Fair value	2,568	2,308
Municipal debt securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Debt instruments, Amortized cost	9	10
Unrealized gains	2	1
Unrealized losses	0	0
Available-for-sale securities, Debt instruments, Fair value	11	11
Certificates of deposit [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Debt instruments, Amortized cost	875	755
Unrealized gains	0	0
Unrealized losses	0	0
Available-for-sale securities, Debt instruments, Fair value	875	755
Commercial paper [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Debt instruments, Amortized cost	5
Unrealized gains	0
Unrealized losses	0
Available-for-sale securities, Debt instruments, Fair value	5
Corporate debt securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Debt instruments, Amortized cost	347	368
Unrealized gains	5	2
Unrealized losses	(1)	(1)
Available-for-sale securities, Debt instruments, Fair value	351	369
U.S. government agency mortgage-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Debt instruments, Amortized cost	41	45
Unrealized gains	1	1
Unrealized losses	0	(1)
Available-for-sale securities, Debt instruments, Fair value	42	45
Non-agency residential mortgage-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Debt instruments, Amortized cost	1	2
Unrealized gains	1	0
Unrealized losses	0	0
Available-for-sale securities, Debt instruments, Fair value	2	2
Non-agency commercial mortgage-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Debt instruments, Amortized cost	38	37
Unrealized gains	0	1
Unrealized losses	0	(1)
Available-for-sale securities, Debt instruments, Fair value	38	37
Asset-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Debt instruments, Amortized cost	36	31
Unrealized gains	0	0
Unrealized losses	0	0
Available-for-sale securities, Debt instruments, Fair value	36	31
Fixed income short-term floating NAV fund II [Member]
Schedule of Available-for-sale Securities [Line Items]
Equity instrument, Amortized cost	30	39
Unrealized gains	0	0
Unrealized losses	0	0
Equity instrument, Fair value	30	39
Fixed income U.S. government sector fund [Member]
Schedule of Available-for-sale Securities [Line Items]
Equity instrument, Amortized cost	189	389
Unrealized gains	5	0
Unrealized losses	(1)	0
Equity instrument, Fair value	193	389
Fixed income municipal sector fund [Member]
Schedule of Available-for-sale Securities [Line Items]
Equity instrument, Amortized cost	8	20
Unrealized gains	0	0
Unrealized losses	0	0
Equity instrument, Fair value	8	20
Investment Grade Corporate Sector Fund [Member]
Schedule of Available-for-sale Securities [Line Items]
Equity instrument, Amortized cost	95	252
Unrealized gains	1	9
Unrealized losses	0	0
Equity instrument, Fair value	96	261
Fixed income high-yield sector fund [Member]
Schedule of Available-for-sale Securities [Line Items]
Equity instrument, Amortized cost	30	83
Unrealized gains	3	6
Unrealized losses	0	0
Equity instrument, Fair value	33	89
Fixed income real return sector fund [Member]
Schedule of Available-for-sale Securities [Line Items]
Equity instrument, Amortized cost	5	147
Unrealized gains	0	5
Unrealized losses	0	0
Equity instrument, Fair value	5	152
Fixed income mortgage sector fund [Member]
Schedule of Available-for-sale Securities [Line Items]
Equity instrument, Amortized cost	146	390
Unrealized gains	3	2
Unrealized losses	0	0
Equity instrument, Fair value	149	392
Fixed income asset-backed securities sector fund [Member]
Schedule of Available-for-sale Securities [Line Items]
Equity instrument, Amortized cost	56	140
Unrealized gains	2	10
Unrealized losses	0	0
Equity instrument, Fair value	58	150
Fixed income emerging market sector fund [Member]
Schedule of Available-for-sale Securities [Line Items]
Equity instrument, Amortized cost	38	105
Unrealized gains	4	7
Unrealized losses	0	0
Equity instrument, Fair value	42	112
Fixed income international sector fund [Member]
Schedule of Available-for-sale Securities [Line Items]
Equity instrument, Amortized cost	54	136
Unrealized gains	1	0
Unrealized losses	0	0
Equity instrument, Fair value	55	136
Fixed income total return bond funds [Member]
Schedule of Available-for-sale Securities [Line Items]
Equity instrument, Amortized cost	1,510	389
Unrealized gains	21	5
Unrealized losses	0	0
Equity instrument, Fair value	$ 1,531	$ 394

XML

Investments in Marketable Securities - Additional Information (Details)	6 Months Ended
	Sep. 30, 2017 USD ($)
Marketable Securities [Abstract]
Private placement share redemption percentage	1.00%
Private placement share redemption amount	$ 250,000
Share redemption period	90 days

XML

Investments in Marketable Securities - Schedule of Realized Gains and Losses on Sales from AFS Presented in Our Consolidated Statement of Income (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Available-for-sale securities:
Realized gains on sales	$ 1	$ 80	$ 43	$ 93
Realized losses on sales	0	0	(1)	0
Other-than-temporary impairment	$ 0	$ (10)	$ 0	$ (10)

XML

Investments in Marketable Securities - Summary of Contractual Maturities of Available-for-Sale Securities (Details) $ in Millions	Sep. 30, 2017 USD ($)
Available-for-sale debt instruments, Amortized Cost
Due within 1 Year, Amortized Cost	$ 1,980
Due after 1 Year through 5 Years, Amortized Cost	1,606
Due after 5 Years through 10 Years, Amortized Cost	142
Due after 10 Years, Amortized Cost	84
Mortgage-backed and asset-backed securities, amortized cost	116	[1]
Available-for-sale securities, Debt instruments, Amortized cost	3,928
Available-for-sale debt instruments, Fair Value
Due within 1 Year, Amount	1,978
Due after 1 Year through 5 Years, Amount	1,604
Due after 5 Years through 10 Years, Amount	142
Due after 10 Years, Amount	86
Mortgage-backed and asset-backed securities, fair value	118	[1]
Total, fair value	$ 3,928

[1] Mortgage-backed and asset-backed securities are shown separately from other maturity groupings as these securities do not have a single maturity date.

XML

Finance Receivables, Net (Net Financing Receivables) (Details) - USD ($) $ in Millions	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross finance receivables	$ 68,386		$ 69,308
Finance receivables, net	67,396		68,462
Finance Receivables, Net [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross finance receivables	68,386		69,308	$ 66,156
Deferred origination (fees) and costs, net	642		644
Deferred income	(1,150)		(1,023)
Allowance for credit losses	(482)	$ (453)	(467)	$ (389)	$ (366)	$ (421)
Finance receivables, net	67,396		68,462
Finance Receivables, Net [Member] | Retail receivables [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross finance receivables	39,732		38,338
Finance Receivables, Net [Member] | Securitized retail receivables [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross finance receivables	12,423		13,071
Finance Receivables, Net [Member] | Dealer financing [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross finance receivables	16,231		17,899
Allowance for credit losses	(123)		(123)
Finance Receivables, Net [Member] | Retail and securitized retail receivables [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for credit losses	$ (359)		$ (344)

XML

Finance Receivables, Net (Finance Receivable Credit Quality Indicators) (Details) - USD ($) $ in Millions	Sep. 30, 2017	Mar. 31, 2017
Financing Receivable, Recorded Investment [Line Items]
Current	$ 67,435	$ 68,527
Financing receivables, past due	951	781
Total Finance Receivables	68,386	69,308
Retail Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Current	51,204	50,631
Financing receivables, past due	951	778
Total Finance Receivables	52,155	51,409
Wholesale [Member]
Financing Receivable, Recorded Investment [Line Items]
Current	9,314	10,951
Financing receivables, past due	0	0
Total Finance Receivables	9,314	10,951
Wholesale [Member] | Performing [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Finance Receivables	8,123	9,592
Wholesale [Member] | Credit Watch [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Finance Receivables	1,094	1,269
Wholesale [Member] | At Risk [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Finance Receivables	55	12
Wholesale [Member] | Default [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Finance Receivables	42	78
Real estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Current	4,742	4,713
Financing receivables, past due	0	0
Total Finance Receivables	4,742	4,713
Real estate [Member] | Performing [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Finance Receivables	3,993	4,010
Real estate [Member] | Credit Watch [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Finance Receivables	660	613
Real estate [Member] | At Risk [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Finance Receivables	55	45
Real estate [Member] | Default [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Finance Receivables	34	45
Working capital [Member]
Financing Receivable, Recorded Investment [Line Items]
Current	2,175	2,232
Financing receivables, past due	0	3
Total Finance Receivables	2,175	2,235
Working capital [Member] | Performing [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Finance Receivables	2,020	2,082
Working capital [Member] | Credit Watch [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Finance Receivables	129	143
Working capital [Member] | At Risk [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Finance Receivables	22	5
Working capital [Member] | Default [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Finance Receivables	4	5
30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables, past due	691	589
30-59 Days Past Due [Member] | Retail Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables, past due	691	586
30-59 Days Past Due [Member] | Wholesale [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables, past due	0	0
30-59 Days Past Due [Member] | Real estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables, past due	0	0
30-59 Days Past Due [Member] | Working capital [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables, past due	0	3
60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables, past due	179	129
60-89 Days Past Due [Member] | Retail Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables, past due	179	129
60-89 Days Past Due [Member] | Wholesale [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables, past due	0	0
60-89 Days Past Due [Member] | Real estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables, past due	0	0
60-89 Days Past Due [Member] | Working capital [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables, past due	0	0
90 Days or Greater Past Due [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables, past due	81	63
90 Days or Greater Past Due [Member] | Retail Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables, past due	81	63
90 Days or Greater Past Due [Member] | Wholesale [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables, past due	0	0
90 Days or Greater Past Due [Member] | Real estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables, past due	0	0
90 Days or Greater Past Due [Member] | Working capital [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables, past due	$ 0	$ 0

XML

Finance Receivables, Net (Summary of Impaired Loans by Class of Finance Receivable) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Mar. 31, 2017
Impaired Finance Receivables
Impaired Finance Receivables Individually Evaluated with Related Allowance	$ 207		$ 207		$ 218
Impaired Finance Receivables Individually Evaluated with No Related Allowance	196		196		239
Impaired Finance Receivables Aggregated And Evaluated For Impairment	220		220		220
Impaired Finance Receivables	623		623		677
Unpaid Principal Balance
Unpaid Principal Balance Individually Evaluated with Related Allowance	207		207		218
Unpaid Principal Balance Individually Evaluated with No Related Allowance	196		196		239
Unpaid Principal Balance Aggregated And Evaluated For Impairment	218		218		217
Unpaid Principal Balance	621		621		674
Individually Evaluated Allowance	45		45		33
Average Impaired Finance Receivables
Average Impaired Finance Receivables Individually Evaluated For Impairment with An Allowance	236	$ 179	230	$ 204
Average Impaired Finance Receivables Individually Evaluated For Impairment Without An Allowance	213	272	222	277
Average Impaired Finance Receivables Account Balances Aggregated And Evaluated For Impairment	222	224	221	225
Average Impaired Finance Receivables	671	675	673	706
Interest Income Recognized
Interest Income Recognized Individually Evaluated with Related Allowance	2	2	4	3
Interest Income Recognized Individually Evaluated with No Related Allowance	2	2	4	5
Interest Income Recognized Aggregated And Evaluated For Impairment	4	4	8	8
Interest Income Recognized	8	8	16	16
Wholesale [Member]
Impaired Finance Receivables
Impaired Finance Receivables Individually Evaluated with Related Allowance	75		75		93
Impaired Finance Receivables Individually Evaluated with No Related Allowance	98		98		134
Impaired Finance Receivables	173		173		227
Unpaid Principal Balance
Unpaid Principal Balance Individually Evaluated with Related Allowance	75		75		93
Unpaid Principal Balance Individually Evaluated with No Related Allowance	98		98		134
Unpaid Principal Balance	173		173		227
Individually Evaluated Allowance	13		13		12
Average Impaired Finance Receivables
Average Impaired Finance Receivables Individually Evaluated For Impairment with An Allowance	101	59	98	72
Average Impaired Finance Receivables Individually Evaluated For Impairment Without An Allowance	116	160	122	168
Average Impaired Finance Receivables	217	219	220	240
Interest Income Recognized
Interest Income Recognized Individually Evaluated with Related Allowance	0	1	1	1
Interest Income Recognized Individually Evaluated with No Related Allowance	1	0	2	2
Interest Income Recognized	1	1	3	3
Real estate [Member]
Impaired Finance Receivables
Impaired Finance Receivables Individually Evaluated with Related Allowance	88		88		94
Impaired Finance Receivables Individually Evaluated with No Related Allowance	98		98		105
Impaired Finance Receivables	186		186		199
Unpaid Principal Balance
Unpaid Principal Balance Individually Evaluated with Related Allowance	88		88		94
Unpaid Principal Balance Individually Evaluated with No Related Allowance	98		98		105
Unpaid Principal Balance	186		186		199
Individually Evaluated Allowance	9		9		12
Average Impaired Finance Receivables
Average Impaired Finance Receivables Individually Evaluated For Impairment with An Allowance	91	87	92	98
Average Impaired Finance Receivables Individually Evaluated For Impairment Without An Allowance	97	112	100	108
Average Impaired Finance Receivables	188	199	192	206
Interest Income Recognized
Interest Income Recognized Individually Evaluated with Related Allowance	1	0	2	1
Interest Income Recognized Individually Evaluated with No Related Allowance	1	2	2	3
Interest Income Recognized	2	2	4	4
Working capital [Member]
Impaired Finance Receivables
Impaired Finance Receivables Individually Evaluated with Related Allowance	44		44		31
Impaired Finance Receivables Individually Evaluated with No Related Allowance	0		0		0
Impaired Finance Receivables	44		44		31
Unpaid Principal Balance
Unpaid Principal Balance Individually Evaluated with Related Allowance	44		44		31
Unpaid Principal Balance Individually Evaluated with No Related Allowance	0		0		0
Unpaid Principal Balance	44		44		31
Individually Evaluated Allowance	23		23		9
Average Impaired Finance Receivables
Average Impaired Finance Receivables Individually Evaluated For Impairment with An Allowance	44	33	40	34
Average Impaired Finance Receivables Individually Evaluated For Impairment Without An Allowance	0	0	0	1
Average Impaired Finance Receivables	44	33	40	35
Interest Income Recognized
Interest Income Recognized Individually Evaluated with Related Allowance	1	1	1	1
Interest Income Recognized Individually Evaluated with No Related Allowance	0	0	0	0
Interest Income Recognized	1	1	1	1
Retail Loan [Member]
Impaired Finance Receivables
Impaired Finance Receivables Aggregated And Evaluated For Impairment	220		220		220
Impaired Finance Receivables	220		220		220
Unpaid Principal Balance
Unpaid Principal Balance Aggregated And Evaluated For Impairment	218		218		217
Unpaid Principal Balance	218		218		$ 217
Average Impaired Finance Receivables
Average Impaired Finance Receivables Account Balances Aggregated And Evaluated For Impairment	222	224	221	225
Average Impaired Finance Receivables	222	224	221	225
Interest Income Recognized
Interest Income Recognized Aggregated And Evaluated For Impairment	4	4	8	8
Interest Income Recognized	$ 4	$ 4	$ 8	$ 8

XML

Finance Receivables, Net - Additional Information (Details) - USD ($) $ in Millions	Sep. 30, 2017	Mar. 31, 2017
Receivables [Abstract]
Dealer products portfolio segment accounts on nonaccrual status	$ 220	$ 251

XML

Investments in Operating Leases, Net (Investments in Operating Leases, Net) (Details) - USD ($) $ in Millions	Sep. 30, 2017	Mar. 31, 2017
Property Subject To Or Available For Operating Lease [Line Items]
Investments in operating leases, net	$ 38,823	$ 38,152
Investments in operating leases [Member]
Property Subject To Or Available For Operating Lease [Line Items]
Investments in operating leases	40,783	41,874
Securitized investments in operating leases [Member]
Property Subject To Or Available For Operating Lease [Line Items]
Investments in operating leases	9,105	6,502
Investments In Operating Leases, Net [Member]
Property Subject To Or Available For Operating Lease [Line Items]
Investments in operating leases	49,888	48,376
Deferred origination (fees) and costs, net	(218)	(201)
Deferred income	(1,447)	(1,196)
Accumulated depreciation	(9,246)	(8,672)
Allowance for credit losses	$ (154)	$ (155)

XML

Allowance for Credit Losses - Allowance for Credit Losses on Finance Receivables and Investments in Operating Leases (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Allowance for Credit Losses on Finance Receivables and Investments in Operating Leases
Allowance for credit losses at beginning of period	$ 611	$ 489	$ 622	$ 535
Provision for credit losses	127	161	212	213
Charge-offs, net of recoveries	(102)	(124)	(198)	(222)
Allowance for credit losses at end of period	$ 636	$ 526	$ 636	$ 526

XML

Allowance for Credit Losses - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Mar. 31, 2017
Financing Receivable Allowance For Credit Losses [Line Items]
Recoveries from credit loss charge-offs	$ 22	$ 20	$ 45	$ 40
Impaired finance receivables aggregated and collectively evaluated for impairment	220		220		$ 220
Finance Receivables, Net [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Ending balance: Collectively evaluated for impairment	67,983	65,721	67,983	65,721
Finance Receivables, Net [Member] | Retail and Commercial Loan [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Impaired finance receivables aggregated and collectively evaluated for impairment	220	224	220	224
Finance Receivables, Net [Member] | Dealer Products [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Ending balance: Collectively evaluated for impairment	15,828	15,010	15,828	15,010
Finance Receivables, Net [Member] | TMS [Member] | Financial Guarantee [Member] | Dealer Products [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Ending balance: Collectively evaluated for impairment	1,086	1,054	1,086	1,054
Finance Receivables, Net [Member] | Private Toyota Distributors [Member] | Financial Guarantee [Member] | Dealer Products [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Ending balance: Collectively evaluated for impairment	$ 175	$ 158	$ 175	$ 158

XML

Allowance for Credit Losses - Allowance for Credit Losses for Finance Receivables and Finance Receivables by Portfolio Segment (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Mar. 31, 2017
Allowance for Credit Losses for Finance Receivables:
Provisions	$ 127	$ 161	$ 212	$ 213
Finance Receivables:
Total Finance Receivables	68,386		68,386		$ 69,308
Retail Loan [Member]
Finance Receivables:
Total Finance Receivables	52,155		52,155		51,409
Finance Receivables, Net [Member]
Allowance for Credit Losses for Finance Receivables:
Allowance for credit losses at beginning of period	453	366	467	421
Charge-offs	(86)	(99)	(165)	(181)
Recoveries	13	13	26	26
Provisions	102	109	154	123
Allowance for credit losses at end of period	482	389	482	389
Ending balance: Individually evaluated for impairment	45	27	45	27
Ending balance: Collectively evaluated for impairment	437	362	437	362
Finance Receivables:
Total Finance Receivables	68,386	66,156	68,386	66,156	$ 69,308
Ending balance: Individually evaluated for impairment	403	435	403	435
Ending balance: Collectively evaluated for impairment	67,983	65,721	67,983	65,721
Finance Receivables, Net [Member] | Retail Loan [Member]
Allowance for Credit Losses for Finance Receivables:
Allowance for credit losses at beginning of period	322	278	344	289
Charge-offs	(86)	(99)	(165)	(181)
Recoveries	13	13	26	26
Provisions	110	103	154	161
Allowance for credit losses at end of period	359	295	359	295
Ending balance: Individually evaluated for impairment	0	0	0	0
Ending balance: Collectively evaluated for impairment	359	295	359	295
Finance Receivables:
Total Finance Receivables	52,155	50,711	52,155	50,711
Ending balance: Individually evaluated for impairment	0	0	0	0
Ending balance: Collectively evaluated for impairment	52,155	50,711	52,155	50,711
Finance Receivables, Net [Member] | Dealer Products [Member]
Allowance for Credit Losses for Finance Receivables:
Allowance for credit losses at beginning of period	131	88	123	132
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Provisions	(8)	6	0	(38)
Allowance for credit losses at end of period	123	94	123	94
Ending balance: Individually evaluated for impairment	45	27	45	27
Ending balance: Collectively evaluated for impairment	78	67	78	67
Finance Receivables:
Total Finance Receivables	16,231	15,445	16,231	15,445
Ending balance: Individually evaluated for impairment	403	435	403	435
Ending balance: Collectively evaluated for impairment	$ 15,828	$ 15,010	$ 15,828	$ 15,010

XML

Allowance for Credit Losses - Past Due Finance Receivables and Investments in Operating Leases (Details) - USD ($) $ in Millions	Sep. 30, 2017	Mar. 31, 2017
Past Due Finance Receivables and Investments in Operating Leases
Finance receivables	$ 260	$ 192
Investments in operating leases	123	95
Total	$ 383	$ 287

XML

Allowance for Credit Losses - Aging of Finance Receivables by Class (Details) - USD ($) $ in Millions	Sep. 30, 2017	Mar. 31, 2017
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 951	$ 781
Current	67,435	68,527
Total Finance Receivables	68,386	69,308
90 Days or Greater Past Due and Accruing	59	41
30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	691	589
60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	179	129
90 Days or Greater Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	81	63
Retail Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	951	778
Current	51,204	50,631
Total Finance Receivables	52,155	51,409
90 Days or Greater Past Due and Accruing	59	41
Retail Loan [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	691	586
Retail Loan [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	179	129
Retail Loan [Member] | 90 Days or Greater Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	81	63
Wholesale [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
Current	9,314	10,951
Total Finance Receivables	9,314	10,951
90 Days or Greater Past Due and Accruing	0	0
Wholesale [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
Wholesale [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
Wholesale [Member] | 90 Days or Greater Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
Real estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
Current	4,742	4,713
Total Finance Receivables	4,742	4,713
90 Days or Greater Past Due and Accruing	0	0
Real estate [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
Real estate [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
Real estate [Member] | 90 Days or Greater Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
Working capital [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	3
Current	2,175	2,232
Total Finance Receivables	2,175	2,235
90 Days or Greater Past Due and Accruing	0	0
Working capital [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	3
Working capital [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
Working capital [Member] | 90 Days or Greater Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 0	$ 0

XML

Derivatives, Hedging Activities and Interest Expense - Derivative Activity Impact on Consolidated Balance Sheet (Details) - USD ($) $ in Millions	Sep. 30, 2017	Mar. 31, 2017
Derivatives Fair Value [Line Items]
Carrying value of derivative contracts – Other assets	$ 62	$ 51
Carrying value of derivative contracts – Other liabilities	16	46
Counterparty netting and collateral held	(309)	(154)
Other assets [Member]
Derivatives Fair Value [Line Items]
Notional	71,354	66,117
Fair value	741	599
Counterparty netting and collateral held	(679)	(548)
Other assets [Member] | Interest rate swaps [Member]
Derivatives Fair Value [Line Items]
Notional	64,717	62,525
Fair value	426	475
Other assets [Member] | Interest rate floors [Member]
Derivatives Fair Value [Line Items]
Notional	847	1,673
Fair value	1	2
Other assets [Member] | Foreign currency swaps [Member]
Derivatives Fair Value [Line Items]
Notional	5,790	1,919
Fair value	314	122
Other liabilities [Member]
Derivatives Fair Value [Line Items]
Notional	53,998	57,990
Fair value	616	1,453
Counterparty netting and collateral posted	(600)	(1,407)
Other liabilities [Member] | Interest rate swaps [Member]
Derivatives Fair Value [Line Items]
Notional	47,224	45,297
Fair value	256	277
Other liabilities [Member] | Foreign currency swaps [Member]
Derivatives Fair Value [Line Items]
Notional	6,744	12,663
Fair value	360	1,176
Other liabilities [Member] | Interest rate caps [Member]
Derivatives Fair Value [Line Items]
Notional	30	30
Fair value	0	0
Hedge accounting derivatives [Member] | Other assets [Member]
Derivatives Fair Value [Line Items]
Notional	271	271
Fair value	21	28
Hedge accounting derivatives [Member] | Other assets [Member] | Interest rate swaps [Member]
Derivatives Fair Value [Line Items]
Notional	0	0
Fair value	0	0
Hedge accounting derivatives [Member] | Other assets [Member] | Interest rate floors [Member]
Derivatives Fair Value [Line Items]
Notional	0	0
Fair value	0	0
Hedge accounting derivatives [Member] | Other assets [Member] | Foreign currency swaps [Member]
Derivatives Fair Value [Line Items]
Notional	271	271
Fair value	21	28
Hedge accounting derivatives [Member] | Other liabilities [Member]
Derivatives Fair Value [Line Items]
Notional	93	93
Fair value	3	1
Hedge accounting derivatives [Member] | Other liabilities [Member] | Interest rate swaps [Member]
Derivatives Fair Value [Line Items]
Notional	0	0
Fair value	0	0
Hedge accounting derivatives [Member] | Other liabilities [Member] | Foreign currency swaps [Member]
Derivatives Fair Value [Line Items]
Notional	93	93
Fair value	3	1
Hedge accounting derivatives [Member] | Other liabilities [Member] | Interest rate caps [Member]
Derivatives Fair Value [Line Items]
Notional	0	0
Fair value	0	0
Non-hedge accounting derivatives [Member] | Other assets [Member]
Derivatives Fair Value [Line Items]
Notional	71,083	65,846
Fair value	720	571
Non-hedge accounting derivatives [Member] | Other assets [Member] | Interest rate swaps [Member]
Derivatives Fair Value [Line Items]
Notional	64,717	62,525
Fair value	426	475
Non-hedge accounting derivatives [Member] | Other assets [Member] | Interest rate floors [Member]
Derivatives Fair Value [Line Items]
Notional	847	1,673
Fair value	1	2
Non-hedge accounting derivatives [Member] | Other assets [Member] | Foreign currency swaps [Member]
Derivatives Fair Value [Line Items]
Notional	5,519	1,648
Fair value	293	94
Non-hedge accounting derivatives [Member] | Other liabilities [Member]
Derivatives Fair Value [Line Items]
Notional	53,905	57,897
Fair value	613	1,452
Non-hedge accounting derivatives [Member] | Other liabilities [Member] | Interest rate swaps [Member]
Derivatives Fair Value [Line Items]
Notional	47,224	45,297
Fair value	256	277
Non-hedge accounting derivatives [Member] | Other liabilities [Member] | Foreign currency swaps [Member]
Derivatives Fair Value [Line Items]
Notional	6,651	12,570
Fair value	357	1,175
Non-hedge accounting derivatives [Member] | Other liabilities [Member] | Interest rate caps [Member]
Derivatives Fair Value [Line Items]
Notional	30	30
Fair value	0	0
Carrying value [Member] | Other assets [Member]
Derivatives Fair Value [Line Items]
Carrying value of derivative contracts – Other assets	62	51
Carrying value [Member] | Other liabilities [Member]
Derivatives Fair Value [Line Items]
Carrying value of derivative contracts – Other liabilities	$ 16	$ 46

XML

Derivatives, Hedging Activities and Interest Expense - Additional Information (Details) - USD ($) $ in Millions	Sep. 30, 2017	Mar. 31, 2017
Derivative Instruments And Hedging Activities Disclosure [Abstract]
Collateral held	$ 309	$ 154
Collateral held in excess of the fair value of derivative assets	7	5
Counterparty netting and collateral	230	1,013
Collateral posted in excess of the fair value of derivative liabilities	$ 4	$ 5

XML

Derivatives, Hedging Activities and Interest Expense - Components of Interest Expense (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Derivative Instruments Gain Loss [Line Items]
Interest expense on debt	$ 484	$ 377	$ 951	$ 736
Interest income on derivatives	(18)	(5)	(34)	(7)
Interest expense on debt and derivatives, net	466	372	917	729
Total interest expense	452	297	900	604
Interest expense [Member]
Derivative Instruments Gain Loss [Line Items]
Loss (gain) on non-hedge accounting debt denominated in foreign currencies	373	156	1,023	(62)
(Gain) loss on non-hedge accounting foreign currency swaps	(383)	(156)	(1,033)	32
Gain on U.S. dollar non-hedge accounting interest rate swaps	(4)	(75)	(7)	(95)
Hedge accounting derivatives [Member] | Interest expense [Member]
Derivative Instruments Gain Loss [Line Items]
Loss (gain) on hedge accounting derivatives	3	(4)	10	(37)
Less hedged item: change in fair value of fixed rate debt denominated in a foreign currency	(3)	4	(10)	37
Ineffectiveness related to hedge accounting derivatives	0	0	0	0
Hedge accounting derivatives [Member] | Interest expense [Member] | Foreign currency swaps [Member]
Derivative Instruments Gain Loss [Line Items]
Loss (gain) on hedge accounting derivatives	$ 3	$ (4)	$ 10	$ (37)

XML

Other Assets and Other Liabilities - Other Assets and Other Liabilities (Details) - USD ($) $ in Millions	Sep. 30, 2017	Mar. 31, 2017
Other assets:
Notes receivable from affiliates	$ 591	$ 823
Used vehicles held for sale	298	264
Income taxes receivable	81	0
Derivative assets	62	51
Other assets	1,011	906
Total other assets	2,043	2,044
Other liabilities:
Unearned insurance premiums and contract revenues	2,226	2,154
Accounts payable and accrued expenses	1,020	1,057
Deferred income	485	468
Income taxes payable	0	62
Derivative liabilities	16	46
Other liabilities	175	165
Total other liabilities	$ 3,922	$ 3,952

XML

Debt - Debt and Related Weighted Average Contractual Interest Rates (Details) - USD ($) $ in Millions	Sep. 30, 2017	Mar. 31, 2017
Debt Instrument [Line Items]
Commercial paper	$ 25,247	$ 26,632
Debt	$ 98,223	$ 98,233
Weighted average contractual interest rates	1.76%	1.60%
Unsecured notes and loans payable [Member]
Debt Instrument [Line Items]
Debt	$ 58,327	$ 57,282
Weighted average contractual interest rates	2.02%	1.91%
Secured notes and loans payable [Member]
Debt Instrument [Line Items]
Debt	$ 14,649	$ 14,319
Weighted average contractual interest rates	1.58%	1.32%
Commercial paper [Member]
Debt Instrument [Line Items]
Weighted average contractual interest rates	1.28%	1.11%

XML

Debt - Additional Information (Details) - USD ($) $ in Millions	6 Months Ended
	Sep. 30, 2017	Mar. 31, 2017
Debt Instrument [Line Items]
Debt instrument, unamortized premiums, discounts and debt issuance costs	$ 313	$ 307
Commercial paper [Member]
Debt Instrument [Line Items]
Debt instrument, face amount	$ 25,300	26,700
Commercial paper average remaining maturity period	99 days
Unsecured notes and loans payable [Member]
Debt Instrument [Line Items]
Debt instrument, face amount	$ 58,600	57,400
Debt maturity year	2047
Debt denominated in foreign currency	$ 12,300	$ 13,300
Unsecured notes and loans payable [Member] | Floating and Fixed Rate [Member] | Minimum [Member]
Debt Instrument [Line Items]
Contractual interest rate	0.00%	0.00%
Unsecured notes and loans payable [Member] | Floating and Fixed Rate [Member] | Maximum [Member]
Debt Instrument [Line Items]
Contractual interest rate	5.80%	5.80%
Secured notes and loans payable [Member]
Debt Instrument [Line Items]
Debt instrument, face amount	$ 14,700	$ 14,300
Debt maturity year	2047
Secured notes and loans payable [Member] | Floating and Fixed Rate [Member] | Minimum [Member]
Debt Instrument [Line Items]
Contractual interest rate	0.90%	0.80%
Secured notes and loans payable [Member] | Floating and Fixed Rate [Member] | Maximum [Member]
Debt Instrument [Line Items]
Contractual interest rate	2.10%	2.10%

XML

Variable Interest Entities - Schedule of Assets and Liabilities related to Variable Interest Entities Securitization Transactions (Details) - USD ($) $ in Millions	Sep. 30, 2017	Mar. 31, 2017
Variable Interest Entity [Line Items]
Restricted Cash	$ 1,028	$ 1,087
Net Securitized Assets	67,396	68,462
Other Assets	2,043	2,044
Debt	98,223	98,233
Other liabilities	3,922	3,952
Variable Interest Entities Assets [Member]
Variable Interest Entity [Line Items]
Restricted Cash	1,008	1,067
Gross Securitized Assets	21,528	19,573
Net Securitized Assets	18,993	17,753
Other Assets	129	87
Variable Interest Entities Liabilities [Member]
Variable Interest Entity [Line Items]
Debt	14,649	14,319
Other liabilities	8	6
Retail Finance Receivables [Member] | Variable Interest Entities Assets [Member]
Variable Interest Entity [Line Items]
Restricted Cash	712	856
Gross Securitized Assets	12,423	13,071
Net Securitized Assets	12,219	12,865
Other Assets	6	7
Retail Finance Receivables [Member] | Variable Interest Entities Liabilities [Member]
Variable Interest Entity [Line Items]
Debt	10,232	11,017
Other liabilities	6	5
Investments In Operating Leases, Net [Member] | Variable Interest Entities Assets [Member]
Variable Interest Entity [Line Items]
Restricted Cash	296	211
Gross Securitized Assets	9,105	6,502
Net Securitized Assets	6,774	4,888
Other Assets	123	80
Investments In Operating Leases, Net [Member] | Variable Interest Entities Liabilities [Member]
Variable Interest Entity [Line Items]
Debt	4,417	3,302
Other liabilities	$ 2	$ 1

XML

Variable Interest Entities - Additional Information (Details) - USD ($) $ in Millions	Sep. 30, 2017	Mar. 31, 2017
Variable Interest Entity Consolidated Carrying Amount Assets And Liabilities [Abstract]
Securities retained by TMCC	$ 1,578	$ 1,526

XML

Liquidity Facilities and Letters of Credit - Additional Information (Details) - USD ($)	1 Months Ended
	Nov. 30, 2016	Sep. 30, 2017	Mar. 31, 2017
364 Day Credit Agreement Expiring 2018 [Member]
Line Of Credit Facility [Line Items]
Initiation date	Nov. 30, 2016
Maximum borrowing capacity	$ 5,000,000,000
Credit facilities amount outstanding		$ 0	$ 0
Three Year Agreement Expiring 2020 [Member]
Line Of Credit Facility [Line Items]
Initiation date	Nov. 30, 2016
Maximum borrowing capacity	$ 5,000,000,000
Credit facilities amount outstanding		0	0
Five Year Agreement Expiring 2022 [Member]
Line Of Credit Facility [Line Items]
Initiation date	Nov. 30, 2016
Maximum borrowing capacity	$ 5,000,000,000
Credit facilities amount outstanding		0	0
Total Committed Bank Credit Facilities [Member]
Line Of Credit Facility [Line Items]
Maximum borrowing capacity		5,600,000,000
Committed Bank Credit Facility Expiring 2018 [Member]
Line Of Credit Facility [Line Items]
Maximum borrowing capacity		2,200,000,000
Credit facilities amount outstanding		0	0
Committed Bank Credit Facility Expiring 2019 [Member]
Line Of Credit Facility [Line Items]
Maximum borrowing capacity		400,000,000
Credit facilities amount outstanding		0	0
Committed Bank Credit Facility Expiring 2020 [Member]
Line Of Credit Facility [Line Items]
Maximum borrowing capacity		2,300,000,000
Credit facilities amount outstanding		0	0
Committed Bank Credit Facility Expiring 2021 [Member]
Line Of Credit Facility [Line Items]
Maximum borrowing capacity		725,000,000
Credit facilities amount outstanding		$ 0	$ 0

XML

Commitments and Contingencies - Commitments and Guarantees (Details) - USD ($) $ in Millions	Sep. 30, 2017	Mar. 31, 2017
Commitments:
Credit facilities commitments with dealers	$ 1,322	$ 1,199
Minimum lease commitments	173	59
Total commitments	1,495	1,258
Total commitments and guarantees	1,595	1,358
Performance Guarantee [Member] | Putnam and Gibson Counties [Member]
Commitments:
Guarantees of affiliate pollution control and solid waste disposal bonds	$ 100	$ 100

XML

Commitments and Contingencies - Additional Information (Details) - USD ($)	1 Months Ended	3 Months Ended		6 Months Ended
	Jul. 31, 2017	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Mar. 31, 2017
Commitments And Contingencies [Line Items]
Minimum lease commitments		$ 173,000,000		$ 173,000,000		$ 59,000,000
Indemnification provisions		0		0		0
Putnam and Gibson Counties [Member] | Performance Guarantee [Member]
Commitments And Contingencies [Line Items]
Guarantees of affiliate pollution control and solid waste disposal bonds		100,000,000		100,000,000		100,000,000
Facility Relocation [Member]
Commitments And Contingencies [Line Items]
Relocation costs for employees and other relocation expenses		120,000,000		120,000,000
Relocation costs for employees and other relocation expenses incurred to date		96,000,000		96,000,000
Relocation costs incurred during the period		23,000,000	$ 11,000,000	34,000,000	$ 17,000,000
TMNA [Member]
Commitments And Contingencies [Line Items]
15-year lease agreement between TMCC and TMNA	15 years
Lease agreement expiration date	Aug. 31, 2032
TMCC-affiliated companies [Member]
Commitments And Contingencies [Line Items]
Minimum lease commitments		114,000,000		114,000,000		$ 10,000,000
TMCC-affiliated companies [Member] | Putnam and Gibson Counties [Member] | Performance Guarantee [Member]
Commitments And Contingencies [Line Items]
Guarantees of affiliate pollution control and solid waste disposal bonds		100,000,000		100,000,000
TMCC-affiliated companies [Member] | Putnam and Gibson Counties [Member] | Performance Guarantee [Member] | 2028 [Member]
Commitments And Contingencies [Line Items]
Guarantees of affiliate pollution control and solid waste disposal bonds		20,000,000		20,000,000
TMCC-affiliated companies [Member] | Putnam and Gibson Counties [Member] | Performance Guarantee [Member] | 2029 [Member]
Commitments And Contingencies [Line Items]
Guarantees of affiliate pollution control and solid waste disposal bonds		50,000,000		50,000,000
TMCC-affiliated companies [Member] | Putnam and Gibson Counties [Member] | Performance Guarantee [Member] | 2030 [Member]
Commitments And Contingencies [Line Items]
Guarantees of affiliate pollution control and solid waste disposal bonds		10,000,000		10,000,000
TMCC-affiliated companies [Member] | Putnam and Gibson Counties [Member] | Performance Guarantee [Member] | 2031 [Member]
Commitments And Contingencies [Line Items]
Guarantees of affiliate pollution control and solid waste disposal bonds		10,000,000		10,000,000
TMCC-affiliated companies [Member] | Putnam and Gibson Counties [Member] | Performance Guarantee [Member] | 2032 [Member]
Commitments And Contingencies [Line Items]
Guarantees of affiliate pollution control and solid waste disposal bonds		$ 10,000,000		10,000,000
TMCC-affiliated companies [Member] | Putnam and Gibson Counties [Member] | Affiliate Pollution Control and Solid Waste Disposal Bonds [Member]
Commitments And Contingencies [Line Items]
Guaranty Fee				$ 78,000

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Commitments and Contingencies - Future Minimum Lease Payments under Non-cancelable Operating Leases (Details) - USD ($) $ in Millions	Sep. 30, 2017	Mar. 31, 2017
Future minimum lease payments under non-cancelable operating leases
2018	$ 15
2019	24
2020	20
2021	15
2022	18
Thereafter	81
Total	$ 173	$ 59

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Income Taxes - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Mar. 31, 2017
Income Tax Disclosure [Line Items]
Effective tax rate	37.00%	37.00%	37.00%	37.00%
Provision for income taxes	$ 70	$ 95	$ 166	$ 241
Deferred tax assets	3,000		3,000		$ 1,000
Net deferred income tax liability	$ 8,100		$ 8,100		$ 7,900
Federal [Member]
Income Tax Disclosure [Line Items]
Expiration Dates			Mar. 31, 2038

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Related Party Transactions - Related Party Transactions Included in Consolidated Statements of Income (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Total financing revenues:
Manufacturers’ subvention and other revenues	$ 382	$ 334	$ 750	$ 670
Interest expense:
Credit support fees incurred	24	23	47	46
Interest and other expenses	0	0	1	1
Insurance earned premiums and contract revenues:
Insurance premiums and contract revenues	221	199	437	392
Expenses:
Operating and administrative	337	317	650	596
Insurance losses and loss adjustment expenses	102	91	216	180
TMCC-affiliated companies [Member]
Insurance earned premiums and contract revenues:
Insurance premiums and contract revenues	45	35	89	69
Investment and other income, net:
Interest and other income	3	3	7	5
Expenses:
Operating and administrative	23	17	42	34
Insurance losses and loss adjustment expenses	$ 1	$ 0	$ (4)	$ 1

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Related Party Transactions - Related Party Transactions Included in Consolidated Balance Sheets (Details) - USD ($) $ in Millions	Sep. 30, 2017	Mar. 31, 2017
Finance receivables, net
Accounts receivable	$ 133	$ 138
Deferred retail subvention income	(1,095)	(967)
Investments in operating leases, net
Investments in operating leases, net	38,823	38,152
Deferred lease subvention income	(1,428)	(1,174)
Other assets
Notes receivable from affiliates	591	823
Other receivables, net	243	202
Other liabilities
Unearned insurance premiums and contract revenues	2,226	2,154
Other payables, net	59	74
Notes payable	24	13
TMCC-affiliated companies [Member]
Investments in marketable securities
Investments in commercial paper	5	0
Investments in operating leases, net
Investments in operating leases, net	6	4
Other liabilities
Unearned insurance premiums and contract revenues	$ 330	$ 332

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Related Party Transactions - Additional Information (Details) - USD ($) $ in Millions	Sep. 30, 2017	Mar. 31, 2017
TMS [Member]
Related Party Transaction [Line Items]
Subvention support receivable	$ 227	$ 165

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Segment Information - Schedule of Segment Reporting Information by Segment (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Mar. 31, 2017
Segment Reporting Information [Line Items]
Total financing revenues	$ 2,647	$ 2,496	$ 5,245	$ 4,954
Depreciation on operating leases	1,719	1,683	3,400	3,272
Interest expense	452	297	900	604
Net financing revenues	476	516	945	1,078
Insurance earned premiums and contract revenues	221	199	437	392
Investment and other income, net	55	42	102	81
Realized gains (losses), net on investments in marketable securities	1	70	42	83
Net financing revenues and other revenues	753	827	1,526	1,634
Expenses:
Provision for credit losses	127	161	212	213
Operating and administrative expenses	337	317	650	596
Insurance losses and loss adjustment expenses	102	91	216	180
Total expenses	566	569	1,078	989
Income before income taxes	187	258	448	645
Provision for income taxes	70	95	166	241
Net income	117	163	282	404
Total assets	120,100	115,793	120,100	115,793	$ 119,635
Intercompany Eliminations [Member]
Segment Reporting Information [Line Items]
Total financing revenues	0	0	0	0
Depreciation on operating leases	0	0	0	0
Interest expense	(3)	0	(6)	0
Net financing revenues	3	0	6	0
Insurance earned premiums and contract revenues	0	0	0	0
Investment and other income, net	(3)	0	(6)	0
Realized gains (losses), net on investments in marketable securities	0	0	0	0
Net financing revenues and other revenues	0	0	0	0
Expenses:
Provision for credit losses	0	0	0	0
Operating and administrative expenses	0	0	0	0
Insurance losses and loss adjustment expenses	0	0	0	0
Total expenses	0	0	0	0
Income before income taxes	0	0	0	0
Provision for income taxes	0	0	0	0
Net income	0	0	0	0
Total assets	(1,104)	(979)	(1,104)	(979)
Finance Operations [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Total financing revenues	2,647	2,496	5,245	4,954
Depreciation on operating leases	1,719	1,683	3,400	3,272
Interest expense	455	297	906	604
Net financing revenues	473	516	939	1,078
Insurance earned premiums and contract revenues	0	0	0	0
Investment and other income, net	36	24	68	47
Realized gains (losses), net on investments in marketable securities	0	76	0	87
Net financing revenues and other revenues	509	616	1,007	1,212
Expenses:
Provision for credit losses	127	161	212	213
Operating and administrative expenses	259	242	492	452
Insurance losses and loss adjustment expenses	0	0	0	0
Total expenses	386	403	704	665
Income before income taxes	123	213	303	547
Provision for income taxes	47	80	112	205
Net income	76	133	191	342
Total assets	116,463	112,355	116,463	112,355
Insurance Operations [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Total financing revenues	0	0	0	0
Depreciation on operating leases	0	0	0	0
Interest expense	0	0	0	0
Net financing revenues	0	0	0	0
Insurance earned premiums and contract revenues	221	199	437	392
Investment and other income, net	22	18	40	34
Realized gains (losses), net on investments in marketable securities	1	(6)	42	(4)
Net financing revenues and other revenues	244	211	519	422
Expenses:
Provision for credit losses	0	0	0	0
Operating and administrative expenses	78	75	158	144
Insurance losses and loss adjustment expenses	102	91	216	180
Total expenses	180	166	374	324
Income before income taxes	64	45	145	98
Provision for income taxes	23	15	54	36
Net income	41	30	91	62
Total assets	$ 4,741	$ 4,417	$ 4,741	$ 4,417