Segment Information

3 Months Ended

Jun. 30, 2021

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 June 30, 2021
	Finance			Voluntary protection		Intercompany
	operations			operations		eliminations			Total
Total financing revenues	$	2,999		$	-	$	-		$	2,999
Depreciation on operating leases		1,441			-		-			1,441
Interest expense		286			-		-			286
Net financing revenues		1,272			-		-			1,272
Voluntary protection contract revenues   and insurance earned premiums		-			249		-			249
Investment and other income, net		19			137		-			156
Net financing and other revenues		1,291			386		-			1,677
Expenses:
Provision for credit losses		(3	)		-		-			(3	)
Operating and administrative expenses		292			92		-			384
Voluntary protection contract expenses and insurance losses		-			108		-			108
Total expenses		289			200		-			489
Income before income taxes		1,002			186		-			1,188
Provision for income taxes		221			46		-			267
Net income	$	781		$	140	$	-		$	921
Total assets at June 30, 2021	$	128,015		$	6,524	$	(138	)	$	134,401

Note 13 – Segment Information (Continued)

	Three months ended June 30, 2020
	Finance		Voluntary protection		Intercompany
	operations		operations		eliminations			Total
Total financing revenues	$	2,912	$	-	$	-		$	2,912
Depreciation on operating leases		1,685		-		-			1,685
Interest expense		548		-		-			548
Net financing revenues		679		-		-			679
Voluntary protection contract revenues   and insurance earned premiums		-		235		-			235
Investment and other income, net		32		144		-			176
Net financing and other revenues		711		379		-			1,090
Expenses:
Provision for credit losses		183		-		-			183
Operating and administrative expenses		256		89		-			345
Voluntary protection contract expenses and insurance losses		-		75		-			75
Total expenses		439		164		-			603
Income before income taxes		272		215		-			487
Provision for income taxes		62		51		-			113
Net income	$	210	$	164	$	-		$	374
Total assets at June 30, 2020	$	129,065	$	5,720	$	(42	)	$	134,743

Note 13 – Segment Information (Continued)

Voluntary protection operations – Contract revenues

For the three months ended June 30, 2021 and 2020, approximately 82 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 months ended June 30, 2021 and 2020.

We had $2.4 billion and $2.5 billion of unearned voluntary protection contract revenues from contracts with customers included in Other liabilities on our Consolidated Balance Sheets as of March 31, 2020 and March 31, 2021, respectively.  We recognized $192 million of these balances in voluntary protection contract revenues in our Consolidated Statements of Income during the three months ended June 30, 2021, compared to $188 million recognized during the same period in fiscal 2021.  At June 30, 2021, we had unearned voluntary protection contract revenues of $2.5 billion included in Other liabilities on our Consolidated Balance Sheets, and with respect to this balance we expect to recognize revenue of $558 million during fiscal 2022, and $1.9 billion thereafter.  At June 30, 2020, we had unearned voluntary protection contract revenues of $2.3 billion associated with outstanding contracts.