Segment Information

9 Months Ended

Dec. 31, 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 December 31, 2021
	Finance		Voluntary protection		Intercompany
	operations		operations		eliminations			Total
Total financing revenues	$	2,991	$	-	$	-		$	2,991
Depreciation on operating leases		1,460		-		-			1,460
Interest expense		346		-		-			346
Net financing revenues		1,185		-		-			1,185
Voluntary protection contract revenues   and insurance earned premiums		-		255		-			255
Investment and other income, net		12		64		-			76
Net financing and other revenues		1,197		319		-			1,516
Expenses:
Provision for credit losses		45		-		-			45
Operating and administrative expenses		293		101		-			394
Voluntary protection contract expenses and insurance losses		-		96		-			96
Total expenses		338		197		-			535
Income before income taxes		859		122		-			981
Provision for income taxes		204		29		-			233
Net income	$	655	$	93	$	-		$	748
	Nine months ended December 31, 2021
	Finance		Voluntary protection		Intercompany
	operations		operations		eliminations			Total
Total financing revenues	$	9,022	$	-	$	-		$	9,022
Depreciation on operating leases		4,400		-		-			4,400
Interest expense		1,055		-		-			1,055
Net financing revenues		3,567		-		-			3,567
Voluntary protection contract revenues   and insurance earned premiums		-		758		-			758
Investment and other income, net		40		199		-			239
Net financing and other revenues		3,607		957		-			4,564
Expenses:
Provision for credit losses		110		-		-			110
Operating and administrative expenses		872		291		-			1,163
Voluntary protection contract expenses and insurance losses		-		303		-			303
Total expenses		982		594		-			1,576
Income before income taxes		2,625		363		-			2,988
Provision for income taxes		610		87		-			697
Net income	$	2,015	$	276	$	-		$	2,291
Total assets at December 31, 2021	$	129,511	$	6,745	$	(121	)	$	136,135

Note 13 – Segment Information (Continued)

	Three months ended December 31, 2020
	Finance		Voluntary protection		Intercompany
	operations		operations		eliminations			Total
Total financing revenues	$	2,974	$	-	$	-		$	2,974
Depreciation on operating leases		1,450		-		-			1,450
Interest expense		491		-		-			491
Net financing revenues		1,033		-		-			1,033
Voluntary protection contract revenues   and insurance earned premiums		-		241		-			241
Investment and other income, net		21		158		-			179
Net financing and other revenues		1,054		399		-			1,453
Expenses:
Provision for credit losses		118		-		-			118
Operating and administrative expenses		268		86		-			354
Voluntary protection contract expenses and insurance losses		-		98		-			98
Total expenses		386		184		-			570
Income before income taxes		668		215		-			883
Provision for income taxes		163		52		-			215
Net income	$	505	$	163	$	-		$	668
	Nine months ended December 31, 2020
	Finance		Voluntary protection		Intercompany
	operations		operations		eliminations			Total
Total financing revenues	$	8,821	$	-	$	-		$	8,821
Depreciation on operating leases		4,484		-		-			4,484
Interest expense		1,534		-		-			1,534
Net financing revenues		2,803		-		-			2,803
Voluntary protection contract revenues   and insurance earned premiums		-		714		-			714
Investment and other income, net		76		369		-			445
Net financing and other revenues		2,879		1,083		-			3,962
Expenses:
Provision for credit losses		366		-		-			366
Operating and administrative expenses		818		270		-			1,088
Voluntary protection contract expenses and insurance losses		-		265		-			265
Total expenses		1,184		535		-			1,719
Income before income taxes		1,695		548		-			2,243
Provision for income taxes		414		132		-			546
Net income	$	1,281	$	416	$	-		$	1,697
Total assets at December 31, 2020	$	128,442	$	6,176	$	(127	)	$	134,491

Note 13 – Segment Information (Continued)

Voluntary protection operations – Contract revenues

For the three and nine months ended December 31, 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 and nine months ended December 31, 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 $170 million and $545 million of these balances in voluntary protection contract revenues in our Consolidated Statements of Income during the three and nine months ended December 31, 2021, respectively, compared to $169 million and $537 million recognized during the same periods in fiscal 2021.  As of December 31, 2021, we had unearned voluntary protection contract revenues of $2.6 billion included in Other liabilities on our Consolidated Balance Sheets, and with respect to this balance we expect to recognize revenue of $205 million during fiscal 2022, and $2.4 billion thereafter.  At December 31, 2020, we had unearned voluntary protection contract revenues of $2.4 billion associated with outstanding contracts.