Related Party Transactions

12 Months Ended

Mar. 31, 2013

Related Party Transactions [Abstract]

Related Party Transactions

Note 15 – Related Party Transactions

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

		Years ended March 31,
(Dollars in millions)			2013		2012		2011
Net financing revenues:
	Manufacturers’ subvention support and other revenues	$	940	$	949	$	965
	Credit support fees incurred	$	(72)	$	(33)	$	(34)
	Foreign exchange loss on loans payable to affiliates	$	(39)	$	(4)	$	(132)
	Interest expense on loans payable to affiliates	$	(6)	$	(49)	$	(47)
Insurance earned premiums and contract revenues:
	Affiliate insurance premiums and contract revenues	$	161	$	216	$	162
Investments and other income, net:
	Interest earned on notes receivable from affiliates	$	6	$	3	$	5
Expenses:
	Shared services charges and other expenses	$	64	$	67	$	291
	Employee benefits expense	$	30	$	27	$	27

Note 15 – Related Party Transactions (Continued)
(Dollars in millions)		March 31, 2013			March 31, 2012
Assets:
Investments in marketable securities
	Investments in affiliates' commercial paper		$	2	$	-
Finance receivables, net
	Accounts receivable from affiliates		$	22	$	17
	Direct finance receivables from affiliates		$	6	$	4
	Notes receivable under home loan programs		$	18	$	19
	Deferred retail subvention income from affiliates		$	(699)	$	(598)
Investments in operating leases, net
	Leases to affiliates		$	7	$	4
	Deferred lease subvention income from affiliates		$	(604)	$	(592)
Other assets
	Notes receivable from affiliates		$	931	$	1,052
	Other receivables from affiliates		$	1	$	8
	Subvention support receivable from affiliates		$	88	$	65
Liabilities:
Debt
	Loans payable to affiliates		$	-	$	2,201
Other liabilities
	Unearned affiliate insurance premiums and contract revenues		$	235	$	273
	Accounts payable to affiliates		$	192	$	58
	Notes payable to affiliate		$	48	$	61
Shareholder’s Equity:
Dividends paid			$	1,487	$	741
Stock-based compensation			$	2	$	2

Note 15 – Related Party Transactions (Continued)

Financing Support Arrangements with Affiliates

TMCC is party to a credit support agreement with TFSC (the “TMCC Credit Support Agreement”). The agreement requires TFSC to maintain certain ownership, net worth maintenance, and debt service provisions in respect of TMCC, but is not a guarantee by TFSC of any securities or obligations of TMCC. In conjunction with this credit support agreement, TMCC has agreed to pay TFSC a semi-annual fee based on a fixed rate applied to the weighted average outstanding amount of securities entitled to credit support.  Credit support fees incurred under this agreement were $72 million, $33 million, and $34 million for fiscal 2013, 2012, and 2011, respectively.

TCPR is the beneficiary of a credit support agreement with TFSC containing provisions similar to the TMCC Credit Support Agreement described above.

In addition, TMCC receives and provides financing support from TFSC and other affiliates in the form of promissory notes, conduit finance agreements and various loan and credit facility agreements. Total financing support received and provided, along with the amounts currently outstanding under those agreements, is summarized below. All foreign currency amounts have been translated at the exchange rates in effect as of March 31, 2013.

Financing Support Provided by Parent and Affiliates (amounts in millions):

	Financing available			Amounts outstanding (USD) at
Affiliate	to TMCC		March 31, 2013			March 31, 2012
Toyota Credit Canada Inc.	CAD	1,500		$	-		$	-
Toyota Motor Finance (Netherlands) B.V.	Euro	1,000			-			-
Toyota Financial Services Americas Corporation	USD	200			48			61
Toyota Finance Australia Limited	USD	1,000			-			-
Total				$	48		$	61

	Financing made		Amounts outstanding (USD) at
Affiliate	available by TMCC		March 31, 2013		March 31, 2012
Toyota Financial Savings Bank	USD	400	$	35	$	-
Toyota Credit Canada Inc.	CAD	2,500		-		-
Toyota Motor Finance (Netherlands) B.V.	Euro	1,000		419		381
Toyota Financial Services Americas Corporation	USD	200		-		-
Toyota Financial Services Mexico, S.A. de C.V.	USD	500		-		-
Banco Toyota do Brasil	USD	300		127		121
Toyota Finance Australia Limited	USD	1,000		350		550
Total			$	931	$	1,052

Note 15 – Related Party Transactions (Continued)

Other Financing Support Provided to Affiliates

• TMCC and TFSC have entered into conduit finance agreements under which TFSC passes along to TMCC certain funds that TFSC receives from other financial institutions solely for the benefit of TMCC.  The aggregate amounts payable under these agreements were approximately $2.2 billion as of March 31, 2012. There was no amount payable under these agreements as of March 31, 2013.
• TMCC provides home loans to relocated employees as well as certain officers, directors, and other members of management. Loans to directors and executive officers were made prior to July 30, 2002 and were grandfathered under the Sarbanes-Oxley Act of 2002.
• TMCC provides wholesale financing to certain dealerships owned by affiliates.
• TMCC has guaranteed the payments of principal and interest with respect to the bonds of manufacturing facilities of certain affiliates. The nature, business purpose, and amounts of these guarantees are described in Note 14 – Commitments and Contingencies.
• TMCC and TFSB are parties to a master participation agreement pursuant to which TMCC agreed to purchase up to $60 million per year of residential mortgage loans originated by TFSB that meet specified credit underwriting guidelines, not to exceed $150 million over a three year period. At March 31, 2013 and 2012, there were $55 million and $54 million, respectively, in loan participations outstanding that had been purchased by TMCC under this agreement.

  Shared Service Arrangements with Affiliates

  TMCC is subject to the following shared service agreements:

• TMCC and TCPR incur costs under various shared service agreements with our affiliates. Services provided by affiliates under the shared service arrangement include marketing, technological and administrative services, as well as services related to our funding and risk management activities and our bank and investor relationships.

• TMCC provides various services to our financial services affiliates, including certain administrative, systems and operational support.  
• TMCC provides various services to TFSB, including marketing, administrative, systems, and operational support in exchange for TFSB making available certain financial products and services to TMCC's customers and dealers meeting TFSB's credit standards.  
• TMCC is subject to expense reimbursement agreements related to costs incurred by TFSB, TFSA, and TMS in connection with our affiliates providing certain financial products and services to our customers and dealers in support of TMCC's customer loyalty strategy and programs, costs related to TFSB's credit card rewards program, and other brand and sales support. 

Note 15 – Related Party Transactions (Continued)

Operational Support Arrangements with Affiliates

• TMCC and TCPR provide various wholesale financing to vehicle and industrial equipment dealers, which result in our having payables to TMS, Toyota de Puerto Rico Corp (“TDPR”), TMHU and HINO.
• TMCC is party to a 15-year lease agreement with TMS for our headquarters location in the TMS headquarters complex in Torrance, California.  The lease commitments are described in Note 14 – Commitments and Contingencies.
• Subvention receivables represent amounts due from TMS and other affiliates in support of retail, lease, and industrial equipment subvention programs offered by TMCC.  Deferred subvention income represents the unearned portion of amounts received from these transactions, and manufacturers' subvention support and other revenues primarily represent the earned portion of such amounts.  
• Leases to affiliates represent the investment in operating leases of vehicle and industrial equipment leased to affiliates.  
• TMCC is a participating employer in certain retirement, postretirement health care and life insurance sponsored by TMS as well as share-based compensation plans sponsored by TMC. See Note 12 – Pension and Other Benefit Plans for additional information.
• Affiliate insurance premiums and contract revenues primarily represent revenues from TMIS for administrative services and various types of coverage provided to TMS and affiliates.  This includes contractual indemnity coverage and related administrative services for TMS' certified pre-owned vehicle program and umbrella liability policy.  TMIS provides umbrella liability insurance to TMS and affiliates covering certain dollar value layers of risk above various primary or self-insured retentions.  On all layers in which TMIS has provided coverage, 99 percent of the risk has been ceded to various reinsurers.  During fiscal 2012, TMIS began providing property deductible reimbursement insurance to TMS and affiliates covering losses incurred under their primary policy.
• TMIS provided prepaid maintenance and vehicle service coverage to TMS in support of special sales and customer loyalty efforts until the programs were discontinued in fiscal 2011.  TMIS continues to recognize contract revenue related to agreements issued prior to the program's discontinuation.