Segment Information

6 Months Ended

Sep. 30, 2021

Segment Reporting [Abstract]

Segment Information

Note 13 – Segment Information

Financial information for our reportable operating segments, which includes allocated corporate expenses, is summarized as follows:

	Three months ended September 30, 2021
	Finance		Voluntary protection			Intercompany
	operations		operations			eliminations			Total
Total financing revenues	$	3,032	$	-		$	-		$	3,032
Depreciation on operating leases		1,499		-			-			1,499
Interest expense		423		-			-			423
Net financing revenues		1,110		-			-			1,110
Voluntary protection contract revenues   and insurance earned premiums		-		254			-			254
Investment and other income (loss), net		9		(2	)		-			7
Net financing and other revenues		1,119		252			-			1,371
Expenses:
Provision for credit losses		68		-			-			68
Operating and administrative expenses		287		98			-			385
Voluntary protection contract expenses and insurance losses		-		99			-			99
Total expenses		355		197			-			552
Income before income taxes		764		55			-			819
Provision for income taxes		185		12			-			197
Net income	$	579	$	43		$	-		$	622
	Six months ended September 30, 2021
	Finance		Voluntary protection			Intercompany
	operations		operations			eliminations			Total
Total financing revenues	$	6,031	$	-		$	-		$	6,031
Depreciation on operating leases		2,940		-			-			2,940
Interest expense		709		-			-			709
Net financing revenues		2,382		-			-			2,382
Voluntary protection contract revenues   and insurance earned premiums		-		503			-			503
Investment and other income, net		28		135			-			163
Net financing and other revenues		2,410		638			-			3,048
Expenses:
Provision for credit losses		65		-			-			65
Operating and administrative expenses		579		190			-			769
Voluntary protection contract expenses and insurance losses		-		207			-			207
Total expenses		644		397			-			1,041
Income before income taxes		1,766		241			-			2,007
Provision for income taxes		406		58			-			464
Net income	$	1,360	$	183		$	-		$	1,543
Total assets at September 30, 2021	$	130,544	$	6,571		$	(138	)	$	136,977

Note 13 – Segment Information (Continued)

	Three months ended September 30, 2020
	Finance		Voluntary protection		Intercompany
	operations		operations		eliminations			Total
Total financing revenues	$	2,935	$	-	$	-		$	2,935
Depreciation on operating leases		1,349		-		-			1,349
Interest expense		495		-		-			495
Net financing revenues		1,091		-		-			1,091
Voluntary protection contract revenues   and insurance earned premiums		-		238		-			238
Investment and other income, net		23		67		-			90
Net financing and other revenues		1,114		305		-			1,419
Expenses:
Provision for credit losses		65		-		-			65
Operating and administrative expenses		294		95		-			389
Voluntary protection contract expenses and insurance losses		-		92		-			92
Total expenses		359		187		-			546
Income before income taxes		755		118		-			873
Provision for income taxes		189		29		-			218
Net income	$	566	$	89	$	-		$	655
	Six months ended September 30, 2020
	Finance		Voluntary protection		Intercompany
	operations		operations		eliminations			Total
Total financing revenues	$	5,847	$	-	$	-		$	5,847
Depreciation on operating leases		3,034		-		-			3,034
Interest expense		1,043		-		-			1,043
Net financing revenues		1,770		-		-			1,770
Voluntary protection contract revenues   and insurance earned premiums		-		473		-			473
Investment and other income, net		55		211		-			266
Net financing and other revenues		1,825		684		-			2,509
Expenses:
Provision for credit losses		248		-		-			248
Operating and administrative expenses		550		184		-			734
Voluntary protection contract expenses and insurance losses		-		167		-			167
Total expenses		798		351		-			1,149
Income before income taxes		1,027		333		-			1,360
Provision for income taxes		251		80		-			331
Net income	$	776	$	253	$	-		$	1,029
Total assets at September 30, 2020	$	125,277	$	5,925	$	(135	)	$	131,067

Note 13 – Segment Information (Continued)

Voluntary protection operations – Contract revenues

For the three and six months ended September 30, 2021 and 2020, approximately 82 percent and 83 percent, respectively, of voluntary protection contract revenues in the Voluntary protection operations segment were accounted for under the guidance for revenue from contracts with customers.  

The Voluntary protection operations segment defers contractually determined incentives paid to dealers as contract costs for selling voluntary protection products.  These costs are recorded in Other assets on our Consolidated Balance Sheets and are amortized to Operating and administrative expenses in the Consolidated Statements of Income using a methodology consistent with the recognition of revenue.  The amount of capitalized dealer incentives and the related amortization was not significant to our consolidated financial statements as of and for the three and six months ended September 30, 2021 and 2020.

We had $2.4 billion and $2.5 billion of unearned voluntary protection contract revenues from contracts with customers included in Other liabilities on our Consolidated Balance Sheets as of March 31, 2020 and March 31, 2021, respectively.  We recognized $182 million and $374 million of these balances in voluntary protection contract revenues in our Consolidated Statements of Income during the three and six months ended September 30, 2021, respectively, compared to $180 million and $368 million recognized during the same periods in fiscal 2021.  As of September 30, 2021, we had unearned voluntary protection contract revenues of $2.6 billion included in Other liabilities on our Consolidated Balance Sheets, and with respect to this balance we expect to recognize revenue of $389 million during fiscal 2022, and $2.2 billion thereafter.  At September 30, 2020, we had unearned voluntary protection contract revenues of $2.4 billion associated with outstanding contracts.