Related Party Transactions

3 Months Ended

Sep. 30, 2012

Note 14 – Related Party Transactions

As of September 30, 2012, there were no material changes to our related party agreements or relationships as described in our fiscal 2012 Form 10-K, except as described below. The following tables summarize amounts included in our Consolidated Statement of Income and Consolidated Balance Sheet under various related party agreements or relationships:

		Three Months Ended				Six Months Ended
		September 30,				September 30,
(Dollars in millions)			2012		2011		2012		2011
Net financing revenues:
	Manufacturers’ subvention support and other revenues	$	236	$	243	$	462	$	486
	Credit support fees incurred	$	(27)	$	(8)	$	(35)	$	(16)
	Foreign exchange loss on loans payable to affiliates	$	-	$	(56)	$	(39)	$	(94)
	Interest expense on loans payable to affiliates	$	(1)	$	(12)	$	(4)	$	(23)

Insurance earned premiums and contract revenues:
	Affiliate insurance premiums and contract revenues	$	43	$	55	$	92	$	109

Investments and other income, net:
	Interest earned on notes receivable from affiliates	$	2	$	1	$	3	$	1

Expenses:
	Shared services charges and other expenses	$	16	$	17	$	32	$	34
	Employee benefits expense	$	8	$	10	$	15	$	20

Credit Support Agreements and Fees Incurred

During the second quarter of fiscal 2013, the credit support fee agreement with TFSC was amended to increase the fixed rate that is applied to the weighted average outstanding amount of bonds and other securities entitled to credit support in order to calculate the credit support fee owed to TFSC.

(Dollars in millions)		September 30, 2012		March 31, 2012
Assets:
Investments in marketable securities
	Investments in marketable securities	$	5	$	-

Finance receivables, net
	Accounts receivable from affiliates	$	16	$	17
	Direct finance receivables from affiliates	$	3	$	4
	Notes receivable under home loan programs	$	20	$	19
	Deferred retail subvention income from affiliates	$	(667)	$	(598)

Investments in operating leases, net
	Leases to affiliates	$	4	$	4
	Deferred lease subvention income from affiliates	$	(600)	$	(592)

Other assets
	Notes receivable from affiliates	$	887	$	1,052
	Other receivables from affiliates	$	5	$	8
	Subvention support receivable from affiliates	$	103	$	65

Liabilities:
Debt
	Loans payable to affiliates	$	-	$	2,201

Other liabilities
	Unearned affiliate insurance premiums and contract revenues	$	241	$	273
	Accounts payable to affiliates	$	134	$	58
	Notes payable to affiliate	$	61	$	61

Shareholder’s Equity:
	Dividends paid	$	744	$	741
	Stock-based compensation	$	2	$	2

Investments in marketable securities

Investments in marketable securities represent our investment in commercial paper of an affiliate.

- Definition

The entire disclosure for related party transactions, including the nature of the relationship(s), a description of the transactions, the amount of the transactions, the effects of any change in the method of establishing the terms of the transaction from the previous period, stated interest rate, expiration date, terms and manner of settlement per the agreement with the related party, and amounts due to or from related parties. If the entity and one or more other entities are under common ownership or management control and this control affects the operating results or financial position, disclosure includes the nature of the control relationship even if there are no transactions between the entities. Disclosure may also include the aggregate amount of current and deferred tax expense for each statement of earnings presented where the entity is a member of a group that files a consolidated tax return, the amount of any tax related balances due to or from affiliates as of the date of each statement of financial position presented, the principal provisions of the method by which the consolidated amount of current and deferred tax expense is allocated to the members of the group and the nature and effect of any changes in that method. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

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+ Details