Fair Value Measurements

9 Months Ended

Dec. 31, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 12 – 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.  

	December 31, 2021
								Counterparty
								netting &			Fair
	Level 1		Level 2			Level 3		collateral			value
Investments in marketable securities:
Available-for-sale debt securities:
U.S. government and agency obligations	$	484	$	6		$	-	$	-		$	490
Foreign government and agency obligations		-		31			-		-			31
Municipal debt securities		-		11			-		-			11
Commercial paper		-		25			-		-			25
Corporate debt securities		-		601			-		-			601
Mortgage-backed securities:
U.S. government agency		-		22			-		-			22
Non-agency residential		-		8			3		-			11
Non-agency commercial		-		60			16		-			76
Asset-backed securities		-		72			16		-			88
Available-for-sale debt securities total		484		836			35		-			1,355
Equity investments:
Fixed income mutual funds:
Fixed income mutual funds measured at    net asset value												1,205
Total return bond funds		1,569		-			-		-			1,569
Equity mutual funds		992		-			-		-			992
Equity investments total		2,561		-			-		-			3,766
Investments in marketable securities total		3,045		836			35		-			5,121
Derivative assets:
Interest rate swaps		-		998			-		-			998
Foreign currency swaps		-		85			-		-			85
Counterparty netting and collateral		-		-			-		(1,020	)		(1,020	)
Derivative assets total		-		1,083			-		(1,020	)		63
Assets at fair value		3,045		1,919			35		(1,020	)		5,184
Derivative liabilities:
Interest rate swaps		-		(514	)		-		-			(514	)
Foreign currency swaps		-		(424	)		-		-			(424	)
Counterparty netting and collateral		-		-			-		938			938
Liabilities at fair value		-		(938	)		-		938			-
Net assets at fair value	$	3,045	$	981		$	35	$	(82	)	$	5,184

Note 12 – Fair Value Measurements (Continued)

	March 31, 2021
								Counterparty
								netting &			Fair
	Level 1		Level 2			Level 3		collateral			value
Investments in marketable securities:
Available-for-sale debt securities:
U.S. government and agency obligations	$	209	$	2		$	-	$	-		$	211
Municipal debt securities		-		10			-		-			10
Commercial paper		20		176			-		-			196
Corporate debt securities		-		187			-		-			187
Mortgage-backed securities:
U.S. government agency		-		32			-		-			32
Non-agency residential		-		-			1		-			1
Non-agency commercial		-		5			42		-			47
Asset-backed securities		-		19			33		-			52
Available-for-sale debt securities total		229		431			76		-			736
Equity investments:
Fixed income mutual funds:
Fixed income mutual funds measured at    net asset value												772
Total return bond funds		2,429		-			-		-			2,429
Equity mutual funds		883		-			-		-			883
Equity investments total		3,312		-			-		-			4,084
Investments in marketable securities total		3,541		431			76		-			4,820
Derivative assets:
Interest rate swaps		-		1,026			-		-			1,026
Foreign currency swaps		-		330			-		-			330
Counterparty netting and collateral		-		-			-		(1,302	)		(1,302	)
Derivative assets total		-		1,356			-		(1,302	)		54
Assets at fair value		3,541		1,787			76		(1,302	)		4,874
Derivative liabilities:
Interest rate swaps		-		(1,142	)		-		-			(1,142	)
Foreign currency swaps		-		(243	)		-		-			(243	)
Counterparty netting and collateral		-		-			-		1,384			1,384
Liabilities at fair value		-		(1,385	)		-		1,384			(1	)
Net assets at fair value	$	3,541	$	402		$	76	$	82		$	4,873

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 activity and change in the fair value measurements of these assets and liabilities, were not significant to our Consolidated Balance Sheets as of December 31, 2021and March 31, 2021, or Consolidated Statements of Income for the three and nine months ended December 31, 2021 and 2020.

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 December 31, 2021 and March 31, 2021.

Note 12 – 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:

	December 31, 2021
	Carrying								Total Fair
	value		Level 1		Level 2		Level 3		value
Financial assets
Finance receivables
Retail loan	$	70,904	$	-	$	-	$	74,090	$	74,090
Wholesale		2,864		-		-		2,878		2,878
Real estate		5,041		-		-		5,215		5,215
Working capital		2,238		-		-		2,181		2,181
Financial liabilities
Unsecured notes and loans payable	$	82,054	$	-	$	82,671	$	-	$	82,671
Secured notes and loans payable		28,068		-		-		28,120		28,120

	March 31, 2021
	Carrying								Total Fair
	value		Level 1		Level 2		Level 3		value
Financial assets
Finance receivables
Retail loan	$	65,808	$	-	$	-	$	69,007	$	69,007
Wholesale		6,132		-		-		6,158		6,158
Real estate		5,142		-		-		5,224		5,224
Working capital		2,154		-		-		2,171		2,171
Financial liabilities
Unsecured notes and loans payable	$	85,513	$	-	$	86,205	$	555	$	86,760
Secured notes and loans payable		24,212		-		-		24,478		24,478

Accrued interest related to finance receivables is in Other assets in the Consolidated Balance Sheets; however, TMCC measures the fair value of each class of finance receivables using scheduled principal and interest payments.  Therefore, accrued interest has been included in the carrying value of each class of finance receivables in the previous tables, along with the finance receivables, deferred origination costs, deferred income, and allowance for credit losses.  Finance receivables in the previous tables excludes related party transactions, for which the fair value approximates the carrying value, of $88 million and $140 million at December 31, 2021 and March 31, 2021, respectively.  Fair values of related party finance receivables, net are classified as Level 3 within the fair value hierarchy.

For Cash and cash equivalents and Restricted cash and cash equivalents on our Consolidated Balance Sheets, the fair value approximates the carrying value and these instruments are classified as Level 1 within the fair value hierarchy.