Fair Value Measurements

3 Months Ended

Jun. 30, 2019

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.  

	June 30, 2019
								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	$	197	$	2		$	-	$	-		$	199
Municipal debt securities		-		11			-		-			11
Certificates of deposit		-		325			-		-			325
Commercial paper		-		100			-		-			100
Corporate debt securities		-		170			-		-			170
Mortgage-backed securities:
U.S. government agency		-		34			-		-			34
Non-agency residential		-		-			1		-			1
Non-agency commercial		-		-			40		-			40
Asset-backed securities		-		-			66		-			66
Available-for-sale debt securities total		197		642			107		-			946
Equity investments:
Fixed income mutual funds:
Fixed income mutual funds measured at    net asset value												710
Total return bond funds		1,640		-			-		-			1,640
Equity investments total		1,640		-			-		-			2,350
Investments in marketable securities total		1,837		642			107		-			3,296
Derivative assets:
Interest rate swaps		-		644			-		-			644
Foreign currency swaps		-		94			-		-			94
Counterparty netting and collateral		-		-			-		(688	)		(688	)
Derivative assets total		-		738			-		(688	)		50
Assets at fair value		1,837		1,380			107		(688	)		3,346
Derivative liabilities:
Interest rate swaps		-		(850	)		-		-			(850	)
Foreign currency swaps		-		(668	)		-		-			(668	)
Counterparty netting and collateral		-		-			-		1,516			1,516
Liabilities at fair value		-		(1,518	)		-		1,516			(2	)
Net assets at fair value	$	1,837	$	(138	)	$	107	$	828		$	3,344

Note 12 – Fair Value Measurements (Continued)

	March 31, 2019
								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	$	194	$	18		$	-	$	-		$	212
Municipal debt securities		-		11			-		-			11
Certificates of deposit		-		50			-		-			50
Commercial paper		-		70			-		-			70
Corporate debt securities		-		162			-		-			162
Mortgage-backed securities:
U.S. government agency		-		35			-		-			35
Non-agency residential		-		-			1		-			1
Non-agency commercial		-		-			39		-			39
Asset-backed securities		-		-			53		-			53
Available-for-sale debt securities total		194		346			93		-			633
Equity investments:
Fixed income mutual funds:
Fixed income mutual funds measured at    net asset value												689
Total return bond funds		1,586		-			-		-			1,586
Equity investments total		1,586		-			-		-			2,275
Investments in marketable securities total		1,780		346			93		-			2,908
Derivative assets:
Interest rate swaps		-		471			1		-			472
Foreign currency swaps		-		72			-		-			72
Counterparty netting and collateral		-		-			-		(483	)		(483	)
Derivative assets total		-		543			1		(483	)		61
Assets at fair value		1,780		889			94		(483	)		2,969
Derivative liabilities:
Interest rate swaps		-		(622	)		-		-			(622	)
Foreign currency swaps		-		(785	)		-		-			(785	)
Counterparty netting and collateral		-		-			-		1,381			1,381
Liabilities at fair value		-		(1,407	)		-		1,381			(26	)
Net assets at fair value	$	1,780	$	(518	)	$	94	$	898		$	2,943

Note 12 – Fair Value Measurements (Continued)

Transfers between levels of the fair value hierarchy are recognized at the end of their respective reporting periods.  Transfers between levels of the fair value hierarchy during the three months ended June 30, 2019 and 2018 resulted from changes in the transparency of inputs and were not significant.

The following tables summarize the rollforward of all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs:

	Three Months Ended June 30, 2019
												Total net
									Derivative			assets
	Available-for-sale debt securities								instruments, net			(liabilities)
						Total
	Mortgage-		Asset-			available-			Interest
	backed		backed			for-sale debt			rate
	securities		securities			securities			swaps
Fair value, April 1, 2019	$	40	$	53		$	93		$	1		$	94
Total gains (losses)
Included in net income		-		-			-			18			18
Included in other comprehensive income		1		1			2			-			2
Purchases, issuances, sales, and settlements
Purchases		-		15			15			-			15
Issuances		-		-			-			-			-
Sales		-		-			-			-			-
Settlements		-		(3	)		(3	)		6			3
Transfers in to Level 3		-		-			-			-			-
Transfers out of Level 3		-		-			-			(25	)		(25	)
Fair value, June 30, 2019	$	41	$	66		$	107		$	-		$	107
The amount of total gains   (losses) included in net income   attributable to assets held   at the reporting date									$	18		$	18

	Three Months Ended June 30, 2018
													Total net
										Derivative			assets
	Available-for-sale securities									instruments, net			(liabilities)
							Total
	Mortgage-			Asset-			available-			Interest
	backed			backed			for-sale			rate
	securities			securities			securities			swaps
Fair value, April 1, 2018	$	31		$	39		$	70		$	(21	)	$	49
Total gains (losses)
Included in net income		-			-			-			(8	)		(8	)
Included in other comprehensive income		-			-			-			-			-
Purchases, issuances, sales, and settlements
Purchases		-			2			2			-			2
Issuances		-			-			-			-			-
Sales		-			-			-			-			-
Settlements		(6	)		(3	)		(9	)		6			(3	)
Transfers in to Level 3		-			-			-			-			-
Transfers out of Level 3		-			-			-			-			-
Fair value, June 30, 2018	$	25		$	38		$	63		$	(23	)	$	40
The amount of total gains   (losses) included in net income   attributable to assets held   at the reporting date										$	(8	)	$	(8	)

Note 12 – Fair Value Measurements (Continued)

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 June 30, 2019 and March 31, 2019.

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 change in the fair value measurements of these assets and liabilities, were not significant to our Consolidated Balance Sheets or Consolidated Statements of Income as of and for the three months ended June 30, 2019 and as of and for the year ended March 31, 2019.

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:

	June 30, 2019
	Carrying								Total Fair
	value		Level 1		Level 2		Level 3		Value
Financial assets
Finance receivables, net
Retail loan	$	54,170	$	-	$	-	$	54,867	$	54,867
Wholesale		10,653		-		-		10,724		10,724
Real estate		4,604		-		-		4,653		4,653
Working capital		2,539		-		-		2,587		2,587
Financial liabilities
Unsecured notes and loans payable	$	84,468	$	-	$	84,190	$	1,575	$	85,765
Secured notes and loans payable		12,916		-		-		13,013		13,013

	March 31, 2019
	Carrying								Total Fair
	value		Level 1		Level 2		Level 3		Value
Financial assets
Finance receivables, net
Retail loan	$	53,013	$	-	$	-	$	53,247	$	53,247
Wholesale		10,293		-		-		10,369		10,369
Real estate		4,550		-		-		4,534		4,534
Working capital		2,510		-		-		2,554		2,554
Financial liabilities
Unsecured notes and loans payable	$	80,521	$	-	$	79,056	$	2,313	$	81,369
Secured notes and loans payable		12,401		-		-		12,428		12,428

The carrying value of each class of finance receivables includes accrued interest and deferred fees and costs, net of deferred income and the allowance for credit losses.  Finance receivables, net, excludes related party transactions, for which the fair value approximates the carrying value, of $83 million and $148 million at June 30, 2019 and March 31, 2019, respectively.  Fair values of related party finance receivables, net are classified as Level 3 of 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 of the fair value hierarchy.