Segment Information

3 Months Ended

Jun. 30, 2019

Note 13 – Segment Information

Financial information for our reportable operating segments is summarized as follows:


	Three Months Ended June 30, 2019
	Finance		Insurance		Intercompany
	operations		operations		eliminations			Total

Total financing revenues	$	2,963	$	-	$	-		$	2,963
Depreciation on operating leases		1,625		-		-			1,625
Interest expense		703		-		(6	)		697
Net financing revenues		635		-		6			641

Insurance earned premiums and contract revenues		-		229		-			229
Investment and other income, net		37		87		(6	)		118
Net financing and other revenues		672		316		-			988

Expenses:
Provision for credit losses		75		-		-			75
Operating and administrative expenses		246		91		-			337
Insurance losses and loss adjustment expenses		-		113		-			113
Total expenses		321		204		-			525

Income before income taxes		351		112		-			463
Provision for income taxes		76		28		-			104

Net income	$	275	$	84	$	-		$	359

Total assets at June 30, 2019	$	117,506	$	5,191	$	(1,154	)	$	121,543


	Three Months Ended June 30, 2018
	Finance		Insurance			Intercompany
	operations		operations			eliminations			Total

Total financing revenues	$	2,836	$	-		$	-		$	2,836
Depreciation on operating leases		1,766		-			-			1,766
Interest expense		687		-			(5	)		682
Net financing revenues		383		-			5			388

Insurance earned premiums and contract revenues		-		224			-			224
Investment in other income (loss), net		48		(3	)		(5	)		40
Net financing and other revenues		431		221			-			652

Expenses:
Provision for credit losses		89		-			-			89
Operating and administrative expenses		241		83			-			324
Insurance losses and loss adjustment expenses		-		125			-			125
Total expenses		330		208			-			538

Income before income taxes		101		13			-			114
Provision for income taxes		19		3			-			22

Net income	$	82	$	10		$	-		$	92

Total assets at June 30, 2018	$	119,335	$	4,815		$	(1,087	)	$	123,063

Note 13 – Segment Information (Continued)

Insurance operations – Revenue Recognition

For the three months ended June 30, 2019 and 2018, approximately 84 percent of Insurance earned premiums and contract revenues in the Insurance operations segment were accounted for under the guidance for revenue from contracts with customers.

The Insurance operations segment defers contractually determined incentives paid to dealers as contract costs for selling vehicle and payment protection products. These costs are recorded in Other assets on our Consolidated Balance Sheets and are amortized to Operating and administrative expenses on 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 months ended June 30, 2019 and 2018.

We had $2.2 billion of unearned insurance premiums and contract revenues from contracts with customers included in Other liabilities on our Consolidated Balance Sheets as of April 1, 2019 and April 1, 2018, respectively. We recognized $182 million and $176 million of these balances in Insurance earned premiums and revenues in our Consolidated Statements of Income during the three months ended June 30, 2019 and 2018, respectively. At June 30, 2019, we had unearned insurance premiums and contract revenues of $2.3 billion included in Other liabilities on our Consolidated Balance Sheets, and with respect to this balance we expect to recognize revenue of $524 million during fiscal 2020, and $1.8 billion thereafter. At June 30, 2018 we had unearned insurance premiums and contract revenues of $2.2 billion associated with outstanding contracts.