Segment Information

6 Months Ended

Sep. 30, 2023

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, 2023
	Finance		Voluntary protection			Intercompany
	operations		operations			eliminations			Total
Total financing revenues	$	2,986	$	-		$	-		$	2,986
Depreciation on operating leases		925		-			-			925
Interest expense		1,272		-			-			1,272
Net financing revenues		789		-			-			789
Voluntary protection contract revenues   and insurance earned premiums		-		278			-			278
Investment and other income (loss), net		119		(137	)		-			(18	)
Net financing and other revenues		908		141			-			1,049
Expenses:
Provision for credit losses		221		-			-			221
Operating and administrative expenses		332		117			-			449
Voluntary protection contract expenses and insurance losses		-		145			-			145
Total expenses		553		262			-			815
Income (loss) before income taxes		355		(121	)		-			234
Provision (benefit) for income taxes		7		(20	)		-			(13	)
Net income (loss)	$	348	$	(101	)	$	-		$	247
	Six months ended September 30, 2023
	Finance		Voluntary protection			Intercompany
	operations		operations			eliminations			Total
Total financing revenues	$	5,890	$	-		$	-		$	5,890
Depreciation on operating leases		2,082		-			-			2,082
Interest expense		2,171		-			-			2,171
Net financing revenues		1,637		-			-			1,637
Voluntary protection contract revenues   and insurance earned premiums		-		549			-			549
Investment and other income (loss), net		233		(89	)		-			144
Net financing and other revenues		1,870		460			-			2,330
Expenses:
Provision for credit losses		386		-			-			386
Operating and administrative		666		231			-			897
Voluntary protection contract expenses and insurance losses		-		291			-			291
Total expenses		1,052		522			-			1,574
Income (loss) before income taxes		818		(62	)		-			756
Provision (benefit) for income taxes		48		(7	)		-			41
Net income (loss)	$	770	$	(55	)	$	-		$	715
Total assets at September 30, 2023	$	133,200	$	6,780		$	(78	)	$	139,902

Note 13 – Segment Information (Continued)

	Three months ended September 30, 2022
	Finance		Voluntary protection			Intercompany
	operations		operations			eliminations			Total
Total financing revenues	$	2,824	$	-		$	-		$	2,824
Depreciation on operating leases		1,305		-			-			1,305
Interest expense		705		-			-			705
Net financing revenues		814		-			-			814
Voluntary protection contract revenues   and insurance earned premiums		-		263			-			263
Investment and other income (loss), net		55		(193	)		-			(138	)
Net financing and other revenues		869		70			-			939
Expenses:
Provision for credit losses		213		-			-			213
Operating and administrative expenses		339		105			-			444
Voluntary protection contract expenses and insurance losses		-		114			-			114
Total expenses		552		219			-			771
Income (loss) before income taxes		317		(149	)		-			168
Provision (benefit) for income taxes		86		(37	)		-			49
Net income (loss)	$	231	$	(112	)	$	-		$	119
	Six months ended September 30, 2022
	Finance		Voluntary protection			Intercompany
	operations		operations			eliminations			Total
Total financing revenues	$	5,655	$	-		$	-		$	5,655
Depreciation on operating leases		2,714		-			-			2,714
Interest expense		1,268		-			-			1,268
Net financing revenues		1,673		-			-			1,673
Voluntary protection contract revenues   and insurance earned premiums		-		522			-			522
Investment and other income (loss), net		88		(532	)		-			(444	)
Net financing and other revenues		1,761		(10	)		-			1,751
Expenses:
Provision for credit losses		291		-			-			291
Operating and administrative		638		212			-			850
Voluntary protection contract expenses and insurance losses		-		221			-			221
Total expenses		929		433			-			1,362
Income (loss) before income taxes		832		(443	)		-			389
Provision (benefit) for income taxes		211		(111	)		-			100
Net income (loss)	$	621	$	(332	)	$	-		$	289
Total assets at September 30, 2022	$	128,403	$	6,077		$	(128	)	$	134,352

Note 13 – Segment Information (Continued)

Voluntary protection operations – Contract revenues

For the three and six months ended September 30, 2023 and 2022, approximately 84 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, 2023 and 2022.

We had $2.9 billion and $2.7 billion of unearned voluntary protection contract revenues from contracts with customers included in Other liabilities on our Consolidated Balance Sheets as of March 31, 2023 and March 31, 2022, respectively. We recognized $212 million and $421 million of these balances in voluntary protection contract revenues in our Consolidated Statements of Income during the three and six months ended September 30, 2023, respectively, compared to $200 million and $400 million recognized during the same periods in fiscal 2023. As of September 30, 2023, we had unearned voluntary protection contract revenues of $3.0 billion included in Other liabilities on our Consolidated Balance Sheets, and with respect to this balance we expect to recognize revenue of $468 million during fiscal 2024, and $2.6 billion thereafter. At September 30, 2022, we had unearned voluntary protection contract revenues of $2.8 billion associated with outstanding contracts.