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			Dealer Products			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			Dealer Products			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			Dealer Products			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			Dealer Products			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		90 Days or Greater Past Due		Total Past Due		Current		Total Finance Receivables		90 Days or Greater Past 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		90 Days or Greater Past Due		Total Past Due		Current		Total Finance Receivables		90 Days or Greater Past 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