Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Sep. 30, 2019 | Oct. 31, 2019 | |
Document And Entity Information [Abstract] | ||
Entity Common Stock, Shares Outstanding (in shares) | 13,660,000 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | AMERICAN HONDA FINANCE CORPORATION | |
Entity Central Index Key | 0000864270 | |
Current Fiscal Year End Date | --03-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Sep. 30, 2019 | Mar. 31, 2019 |
Assets | ||
Cash and cash equivalents | $ 808 | $ 795 |
Finance receivables, net | 40,223 | 40,424 |
Investment in operating leases, net | 33,770 | 32,606 |
Due from Parent and affiliated companies | 126 | 162 |
Income taxes receivable | 319 | 228 |
Vehicles held for disposition | 196 | 252 |
Other assets | 1,148 | 1,117 |
Derivative instruments | 390 | 380 |
Total assets | 76,980 | 75,964 |
Liabilities and Equity | ||
Debt | 50,008 | 49,754 |
Due to Parent and affiliated companies | 119 | 106 |
Accrued interest expense | 161 | 150 |
Income taxes payable | 248 | 152 |
Deferred income taxes | 6,599 | 6,399 |
Other liabilities | 1,602 | 1,567 |
Derivative instruments | 565 | 568 |
Total liabilities | 59,302 | 58,696 |
Commitments and contingencies (Note 8) | ||
Shareholder’s equity: | ||
Common stock, $100 par value. Authorized 15,000,000 shares; issued and outstanding 13,660,000 shares as of September 30, 2019 and March 31, 2019 | 1,366 | 1,366 |
Retained earnings | 15,423 | 15,088 |
Accumulated other comprehensive loss | (110) | (118) |
Total shareholder’s equity | 16,679 | 16,336 |
Noncontrolling interest in subsidiary | 999 | 932 |
Total equity | 17,678 | 17,268 |
Total liabilities and equity | 76,980 | 75,964 |
Consolidated variable interest entities | ||
Assets | ||
Finance receivables, net | 9,206 | 9,073 |
Vehicles held for disposition | 4 | 3 |
Other assets | 616 | 597 |
Total assets | 9,826 | 9,673 |
Liabilities and Equity | ||
Secured debt | 8,934 | 8,790 |
Accrued interest expense | 8 | 8 |
Total liabilities | $ 8,942 | $ 8,798 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2019 | Mar. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common Stock, Par Value (in USD per share) | $ 100 | $ 100 |
Common Stock, Shares Authorized | 15,000,000 | 15,000,000 |
Common Stock, Shares Issued | 13,660,000 | 13,660,000 |
Common Stock, Shares Outstanding | 13,660,000 | 13,660,000 |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenues: | ||||
Retail | $ 443 | $ 401 | $ 876 | $ 777 |
Dealer | 57 | 55 | 122 | 110 |
Operating leases | 1,935 | 1,796 | 3,830 | 3,565 |
Total revenues | 2,435 | 2,252 | 4,828 | 4,452 |
Leased vehicle expenses | 1,409 | 1,314 | 2,801 | 2,642 |
Interest expense | 318 | 293 | 640 | 567 |
Net revenues | 708 | 645 | 1,387 | 1,243 |
Other income, net | 23 | 17 | 43 | 32 |
Total net revenues | 731 | 662 | 1,430 | 1,275 |
Expenses: | ||||
General and administrative expenses | 124 | 119 | 245 | 229 |
Provision for credit losses | 58 | 62 | 106 | 106 |
Early termination loss on operating leases | 36 | 39 | 60 | 56 |
Loss on derivative instruments | 174 | 47 | 205 | 310 |
Gain on foreign currency revaluation of debt | (184) | (27) | (146) | (274) |
Total expenses | 208 | 240 | 470 | 427 |
Income before income taxes | 523 | 422 | 960 | 848 |
Income tax expense | 135 | 137 | 273 | 253 |
Net income | 388 | 285 | 687 | 595 |
Less: Net income attributable to noncontrolling interest | 33 | 26 | 60 | 52 |
Net income attributable to American Honda Finance Corporation | $ 355 | $ 259 | $ 627 | $ 543 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 388 | $ 285 | $ 687 | $ 595 |
Other comprehensive income: | ||||
Foreign currency translation adjustment | (23) | 33 | 15 | 0 |
Comprehensive income | 365 | 318 | 702 | 595 |
Less: Comprehensive income attributable to noncontrolling interest | 22 | 42 | 67 | 52 |
Comprehensive income attributable to American Honda Finance Corporation | $ 343 | $ 276 | $ 635 | $ 543 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity (Unaudited) - USD ($) $ in Millions | Total | Retained earnings | Accumulated other comprehensive income/(loss) | Common stock | Noncontrolling interest |
Beginning Balance at Mar. 31, 2018 | $ 16,596 | $ 14,449 | $ (85) | $ 1,366 | $ 866 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 595 | 543 | 52 | ||
Other comprehensive income/(loss) | 0 | 0 | 0 | ||
Dividends declared | (235) | (235) | |||
Ending Balance at Sep. 30, 2018 | 16,956 | 14,757 | (85) | 1,366 | 918 |
Beginning Balance at Mar. 31, 2019 | 17,268 | 15,088 | (118) | 1,366 | 932 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 687 | 627 | 60 | ||
Other comprehensive income/(loss) | 15 | 8 | 7 | ||
Dividends declared | (292) | (292) | |||
Ending Balance at Sep. 30, 2019 | $ 17,678 | $ 15,423 | $ (110) | $ 1,366 | $ 999 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 6 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 687 | $ 595 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Debt and derivative instrument valuation adjustments | 24 | 43 |
Provision for credit losses | 106 | 106 |
Early termination loss on operating leases | 60 | 56 |
Depreciation on leased vehicles | 2,827 | 2,736 |
Accretion of unearned subsidy income | (849) | (795) |
Amortization of deferred dealer participation and other deferred costs | 179 | 166 |
Gain on disposition of leased vehicles | (96) | (94) |
Deferred income taxes | 198 | 162 |
Changes in operating assets and liabilities: | ||
Income taxes receivable/payable | 5 | 6 |
Other assets | 16 | (41) |
Accrued interest/discounts on debt | 23 | 44 |
Other liabilities | (9) | 32 |
Due to/from Parent and affiliated companies | 48 | (26) |
Net cash provided by operating activities | 3,219 | 2,990 |
Cash flows from investing activities: | ||
Finance receivables acquired | (9,240) | (10,030) |
Principal collected on finance receivables | 8,605 | 8,021 |
Net change in wholesale loans | 780 | 527 |
Purchase of operating lease vehicles | (9,684) | (8,335) |
Disposal of operating lease vehicles | 5,861 | 4,990 |
Cash received for unearned subsidy income | 637 | 1,059 |
Other investing activities, net | (2) | (3) |
Net cash used in investing activities | (3,043) | (3,771) |
Cash flows from financing activities: | ||
Proceeds from issuance of commercial paper | 16,053 | 14,223 |
Paydown of commercial paper | (16,297) | (14,526) |
Proceeds from issuance of short-term debt | 300 | 1,100 |
Paydown of short-term debt | (1,100) | (300) |
Proceeds from issuance of related party debt | 1,580 | 2,001 |
Paydown of related party debt | (1,580) | (2,310) |
Proceeds from issuance of medium term notes and other debt | 4,613 | 3,620 |
Paydown of medium term notes and other debt | (3,553) | (2,277) |
Proceeds from issuance of secured debt | 2,743 | 2,038 |
Paydown of secured debt | (2,613) | (2,462) |
Dividends paid | (292) | (235) |
Net cash provided by/(used in) financing activities | (146) | 872 |
Effect of exchange rate changes on cash and cash equivalents | 1 | (6) |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Excluding Exchange Rate Effect | 31 | 85 |
Cash and cash equivalents and restricted cash at beginning of period | 1,383 | 1,226 |
Cash and cash equivalents and restricted cash at end of period | 1,414 | 1,311 |
Supplemental disclosures of cash flow information: | ||
Interest paid | 448 | 349 |
Income taxes paid | 37 | 79 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | ||
Total | $ 1,383 | $ 1,226 |
Summary of Business and Signifi
Summary of Business and Significant Accounting Policies | 6 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Business and Significant Accounting Policies | Summary of Business and Significant Accounting Policies Organizational Structure American Honda Finance Corporation (AHFC) is a wholly-owned subsidiary of American Honda Motor Co., Inc. (AHM or the Parent). Honda Canada Finance Inc. (HCFI) is a majority-owned subsidiary of AHFC. Noncontrolling interest in HCFI is held by Honda Canada Inc. (HCI), an affiliate of AHFC. AHM is a wholly-owned subsidiary and HCI is an indirect wholly-owned subsidiary of Honda Motor Co., Ltd. (HMC). AHM and HCI are the sole authorized distributors of Honda and Acura products, including motor vehicles, parts and accessories in the United States and Canada. Unless otherwise indicated by the context, all references to the “Company”, “we”, “us”, and “our” in this report include AHFC and its consolidated subsidiaries, and references to “AHFC” refer solely to American Honda Finance Corporation (excluding AHFC’s subsidiaries). Basis of Presentation The unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim information, and instructions to the Quarterly Report on Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion of management, these unaudited interim financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results of operations, cash flows, and financial condition for the interim periods presented. Results for interim periods should not be considered indicative of results for the full year or for any other interim period. These unaudited interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements, significant accounting policies, and the other notes to the consolidated financial statements for the fiscal year ended March 31, 2019 included in the Company’s Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission (SEC) on June 21, 2019. All significant intercompany balances and transactions have been eliminated upon consolidation. Certain reclassifications have been made to prior period financial statements and notes to conform to the current period presentation. Recently Adopted Accounting Standards Effective April 1, 2019, the Company adopted Accounting Standard Update (ASU) 2016-02, Leases (Topic 842) , and the related amendments using the modified retrospective approach. Prior period comparative information has not been restated and will continue to be reported under previous accounting policies. The Company also elected the package of practical expedients which allows the Company to not reassess prior conclusions about lease identification, classification, and initial direct costs. The adoption of the new lease standard did not have a cumulative-effect adjustment to the opening balance of retained earnings. Upon adoption, the Company recognized right-of-use assets of $56 million , lease liabilities of $62 million , and a reduction in other liabilities of $6 million for accrued rent and unamortized tenant improvement allowances for existing operating leases as a lessee. The new lease standard is not expected to have a significant impact on the Company’s net income on an ongoing basis. Lessor accounting remains largely unchanged except for limited amendments impacting the Company’s income statement classification of the following: (i) the Company has elected to record the general allowance for uncollectible operating lease receivables through a reduction to revenue rather than a provision for credit loss, (ii) lessor costs, such as property taxes, paid directly to third parties and reimbursed by lessee which were presented net are now recognized gross as revenue and expense, and (iii) the amortization of initial direct costs which was previously recognized as a reduction of lease revenue is now presented as an expense. The Company has elected to exclude from lease revenue and expenses, sales taxes and other similar taxes collected from lessees on behalf of governmental agencies, which is consistent with previous accounting policies. Effective April 1, 2019, the Company adopted ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which better aligns an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The adoption of this standard did not impact the Company’s consolidated financial statements since there were no designated hedge accounting relationships. Recently Issued Accounting Standards In June 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The amendments replace the incurred loss impairment methodology in current GAAP with a methodology that reflects lifetime expected credit losses. The Company is finalizing accounting policy elections and refining its models and methodologies used to estimate the allowance for credit losses to meet the requirements of the new standard. The Company's allowance for credit losses is expected to increase upon adoption of this standard. The magnitude of the increase will depend primarily on the composition and seasoning of the retail loan portfolio, existing and forecasted economic conditions, and other management judgments at the adoption date. The Company plans to adopt the new standard and the related amendments effective April 1, 2020, with a cumulative-effect adjustment to opening retained earnings in the period of adoption. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. The amendments modify the disclosure requirements on fair value measurements in Topic 820, based on FASB Concepts Statement, Conceptual Framework for Financial Reporting—Chapter 8: Notes to Financial Statements. Certain disclosure requirements were removed, modified and added in Topic 820. The Company is currently assessing the impact of this standard on the consolidated financial statements. The Company plans to adopt the new guidance effective April 1, 2020. |
Finance Receivables
Finance Receivables | 6 Months Ended |
Sep. 30, 2019 | |
Receivables [Abstract] | |
Finance Receivables | Finance Receivables Finance receivables consisted of the following: September 30, 2019 Retail Dealer Total (U.S. dollars in millions) Finance receivables $ 35,920 $ 4,983 $ 40,903 Allowance for credit losses (197 ) — (197 ) Deferred dealer participation and other deferred costs 452 — 452 Unearned subsidy income (935 ) — (935 ) Finance receivables, net $ 35,240 $ 4,983 $ 40,223 March 31, 2019 Retail Dealer Total (U.S. dollars in millions) Finance receivables $ 35,457 $ 5,835 $ 41,292 Allowance for credit losses (193 ) (8 ) (201 ) Deferred dealer participation and other deferred costs 431 — 431 Unearned subsidy income (1,098 ) — (1,098 ) Finance receivables, net $ 34,597 $ 5,827 $ 40,424 Finance receivables include retail loans with a principal balance of $9.5 billion and $9.4 billion as of September 30, 2019 and March 31, 2019 , respectively, which have been transferred to securitization trusts and are considered to be legally isolated but do not qualify for sale accounting treatment. These finance receivables are restricted as collateral for the payment of the related secured debt obligations. Refer to Note 9 for additional information. Credit Quality of Financing Receivables Credit losses are an expected cost of extending credit. The majority of the credit risk is with consumer financing and to a lesser extent with dealer financing. Credit risk on consumer finance receivables can be affected by general economic conditions. Adverse changes such as a rise in unemployment can increase the likelihood of defaults. Declines in used vehicle prices can reduce the amount of recoveries on repossessed collateral. Credit risk on dealer loans is affected primarily by the financial strength of the dealers within the portfolio, the value of collateral securing the financings, and economic and market factors that could affect the creditworthiness of dealers. Exposure to credit risk is managed through regular monitoring and adjusting of underwriting standards, pricing of contracts for expected losses, focusing collection efforts to minimize losses, and ongoing reviews of the financial condition of dealers. Allowance for Credit Losses The allowance for credit losses is management’s estimate of probable losses incurred on finance receivables, which requires significant judgment and assumptions that are inherently uncertain. The allowance is based on management’s evaluation of many factors, including the Company’s historical credit loss experience, the value of the underlying collateral, delinquency trends, and economic conditions. Consumer finance receivables in the retail loan segment are collectively evaluated for impairment. Delinquencies and losses are monitored on an ongoing basis and the historical experience provides the primary basis for estimating the allowance. Management utilizes various methodologies when estimating the allowance for credit losses, including models which incorporate vintage loss and delinquency migration analysis. These models take into consideration attributes of the portfolio including loan-to-value ratios, internal and external credit scores, collateral types, and loan terms. Market and economic factors such as used vehicle prices, unemployment, and consumer debt service burdens are also incorporated into these models. Dealer loans are individually evaluated for impairment when specifically identified as impaired. Dealer loans are considered impaired when it is probable that the Company will be unable to collect the amounts due according to the terms of the contract. The Company’s determination of whether dealer loans are impaired is based on evaluations of dealership payment history, financial condition, ability to perform under the terms of the loan agreements, and collateral values as applicable. Dealer loans that have not been specifically identified as impaired are collectively evaluated for impairment. There were no modifications to dealer loans that constituted troubled debt restructurings during the six months ended September 30, 2019 and 2018 . The Company generally does not grant concessions on consumer finance receivables that are considered troubled debt restructurings other than modifications of retail loans in reorganization proceedings pursuant to the U.S. Bankruptcy Code. Retail loans modified under bankruptcy protection were not material to the Company’s consolidated financial statements during the six months ended September 30, 2019 and 2018 . The Company does allow payment deferrals on consumer finance receivables. However, these payment deferrals are not treated as troubled debt restructurings since the deferrals are deemed insignificant and interest continues to accrue during the deferral period. The following is a summary of the activity in the allowance for credit losses of finance receivables: Three and six months ended September 30, 2019 Retail Dealer Total (U.S. dollars in millions) Beginning balance, July 1, 2019 $ 193 $ 11 $ 204 Provision 60 (2 ) 58 Charge-offs (80 ) (9 ) (89 ) Recoveries 24 — 24 Effect of translation adjustment — — — Ending balance, September 30, 2019 $ 197 $ — $ 197 Beginning balance, April 1, 2019 $ 193 $ 8 $ 201 Provision 97 9 106 Charge-offs (144 ) (17 ) (161 ) Recoveries 51 — 51 Effect of translation adjustment — — — Ending balance, September 30, 2019 $ 197 $ — $ 197 Allowance for credit losses – ending balance: Individually evaluated for impairment $ — $ — $ — Collectively evaluated for impairment 197 — 197 Finance receivables – ending balance: Individually evaluated for impairment $ — $ 41 $ 41 Collectively evaluated for impairment 35,437 4,942 40,379 Three and six months ended September 30, 2018 Retail Dealer Total (U.S. dollars in millions) Beginning balance, July 1, 2018 $ 183 $ — $ 183 Provision 52 — 52 Charge-offs (65 ) — (65 ) Recoveries 21 — 21 Effect of translation adjustment — — — Ending balance, September 30, 2018 $ 191 $ — $ 191 Beginning balance, April 1, 2018 $ 179 $ — $ 179 Provision 87 (1 ) 86 Charge-offs (120 ) — (120 ) Recoveries 45 1 46 Effect of translation adjustment — — — Ending balance, September 30, 2018 $ 191 $ — $ 191 Allowance for credit losses – ending balance: Individually evaluated for impairment $ — $ — $ — Collectively evaluated for impairment 191 — 191 Finance receivables – ending balance: Individually evaluated for impairment $ — $ 174 $ 174 Collectively evaluated for impairment 34,274 4,880 39,154 Delinquencies The following is an aging analysis of past due finance receivables: 30 – 59 days past due 60 – 89 days past due 90 days or greater past due Total past due Current or less than 30 days past due Total finance receivables (U.S. dollars in millions) September 30, 2019 Retail loans: New auto $ 246 $ 61 $ 15 $ 322 $ 28,654 $ 28,976 Used and certified auto 93 23 6 122 5,062 5,184 Motorcycle and other 13 5 3 21 1,256 1,277 Total retail 352 89 24 465 34,972 35,437 Dealer loans: Wholesale flooring 1 — — 1 3,893 3,894 Commercial loans — — — — 1,089 1,089 Total dealer loans 1 — — 1 4,982 4,983 Total finance receivables $ 353 $ 89 $ 24 $ 466 $ 39,954 $ 40,420 March 31, 2019 Retail loans: New auto $ 214 $ 41 $ 10 $ 265 $ 28,521 $ 28,786 Used and certified auto 70 14 4 88 4,712 4,800 Motorcycle and other 12 3 2 17 1,187 1,204 Total retail 296 58 16 370 34,420 34,790 Dealer loans: Wholesale flooring 1 — 17 18 4,668 4,686 Commercial loans 51 — 17 68 1,081 1,149 Total dealer loans 52 — 34 86 5,749 5,835 Total finance receivables $ 348 $ 58 $ 50 $ 456 $ 40,169 $ 40,625 Credit Quality Indicators Retail Loan Segment The Company utilizes proprietary credit scoring systems to evaluate the credit risk of applicants for retail loans. These systems assign internal credit scores based on various factors including the applicant’s credit bureau information and contract terms. The internal credit score provides the primary basis for credit decisions when acquiring retail loan contracts. Internal credit scores are determined only at the time of origination and are not reassessed during the life of the contract. Subsequent to origination, collection experience provides an indication of the credit quality of consumer finance receivables. The likelihood of accounts charging off is significantly higher once an account becomes 60 days delinquent. Accounts that are current or less than 60 days past due are considered to be performing. Accounts that are 60 days or more past due are considered to be nonperforming. The table below presents the Company’s portfolio of retail loans by this credit quality indicator: Retail new auto loans Retail used and certified auto loans Retail motorcycle and other loans Total consumer finance receivables (U.S. dollars in millions) September 30, 2019 Performing $ 28,900 $ 5,155 $ 1,269 $ 35,324 Nonperforming 76 29 8 113 Total $ 28,976 $ 5,184 $ 1,277 $ 35,437 March 31, 2019 Performing $ 28,735 $ 4,782 $ 1,199 $ 34,716 Nonperforming 51 18 5 74 Total $ 28,786 $ 4,800 $ 1,204 $ 34,790 Dealer Loan Portfolio Segment The Company utilizes an internal risk rating system to evaluate dealer credit risk. Dealerships are assigned an internal risk rating based on an assessment of their financial condition and other factors. Factors including liquidity, financial strength, management effectiveness, and operating efficiency are evaluated when assessing their financial condition. Financing limits and interest rates are based upon these risk ratings. Monitoring activities including financial reviews and inventory inspections are performed more frequently for dealerships with weaker risk ratings. The financial conditions of dealerships are reviewed and their risk ratings are updated at least annually. The Company’s outstanding portfolio of dealer loans has been divided into two groups in the tables below. Group A includes the loans of dealerships with the strongest internal risk rating. Group B includes the loans of all remaining dealers. September 30, 2019 March 31, 2019 Wholesale flooring Commercial loans Total Wholesale flooring Commercial loans Total (U.S. dollars in millions) Group A $ 2,439 $ 805 $ 3,244 $ 3,121 $ 823 $ 3,944 Group B 1,455 284 1,739 1,565 326 1,891 Total $ 3,894 $ 1,089 $ 4,983 $ 4,686 $ 1,149 $ 5,835 |
Investment in Operating Leases
Investment in Operating Leases | 6 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Investment in Operating Leases | Investment in Operating Leases Investment in operating leases consisted of the following: September 30, March 31, (U.S. dollars in millions) Operating lease vehicles $ 43,253 $ 42,427 Accumulated depreciation (7,977 ) (8,262 ) Deferred dealer participation and initial direct costs 130 119 Unearned subsidy income (1,518 ) (1,563 ) Estimated early termination losses (118 ) (115 ) Investment in operating leases, net $ 33,770 $ 32,606 Operating lease revenue consisted of the following: Three months ended Six months ended 2019 2018 2019 2018 (U.S. dollars in millions) Lease payments $ 1,669 $ 1,586 $ 3,306 $ 3,153 Subsidy income and dealer rate participation, net (1) 245 210 491 412 Reimbursed lessor costs (2) 21 — 33 — Total operating lease revenue, net $ 1,935 $ 1,796 $ 3,830 $ 3,565 (1) Includes amortization of initial direct costs during the three and six months ended September 30, 2018. (2) Reimbursed lessor costs were presented net during the three and six months ended September 30, 2018. Leased vehicle expenses consisted of the following: Three months ended Six months ended 2019 2018 2019 2018 (U.S. dollars in millions) Depreciation expense $ 1,421 $ 1,361 $ 2,827 $ 2,736 Initial direct costs and other lessor costs (1) 41 — 70 — Gain on disposition of leased vehicles (2) (53 ) (47 ) (96 ) (94 ) Total leased vehicle expenses, net $ 1,409 $ 1,314 $ 2,801 $ 2,642 (1) Amortization of initial direct costs was presented as a reduction to lease revenue and reimbursed lessor costs were presented net during the three and six months ended September 30, 2018. (2) Included in the gain or loss on disposition of leased vehicles are end of term charges of $18 million and $19 million for the three months ended September 30, 2019 and 2018 , and $46 million and $40 million for the six months ended September 30, 2019 and 2018 , respectively. Contractual operating lease payments due as of September 30, 2019 are summarized below. Based on the Company's experience, it is expected that a portion of the Company's operating leases will terminate prior to the scheduled lease term. The summary below should not be regarded as a forecast of future cash collections. Twelve month periods ending September 30, (U.S. dollars in millions) 2020 $ 6,123 2021 4,473 2022 2,272 2023 343 2024 63 Total $ 13,274 The Company recognized early termination losses due to lessee defaults of $36 million and $39 million during the three months ended September 30, 2019 and 2018 , and $60 million and $56 million , during the six months ended September 30, 2019 and 2018 , respectively. Actual net losses realized totaled $32 million and $21 million for the three months ended September 30, 2019 and 2018 , and $56 million and $36 million for the six months ended September 30, 2019 and 2018 , respectively. The general allowance for uncollectible operating lease receivables was recorded through a reduction to revenue of $7 million and $13 million during the three and six months ended September 30, 2019 , respectively. The general allowance for uncollectible operating lease receivables was recorded through a provision for credit losses of $10 million and $20 million during the three and six months ended September 30, 2018 , respectively. No impairment losses due to declines in estimated residual values were recognized during the three and six months ended September 30, 2019 and 2018 . |
Investment in Operating Leases | Investment in Operating Leases Investment in operating leases consisted of the following: September 30, March 31, (U.S. dollars in millions) Operating lease vehicles $ 43,253 $ 42,427 Accumulated depreciation (7,977 ) (8,262 ) Deferred dealer participation and initial direct costs 130 119 Unearned subsidy income (1,518 ) (1,563 ) Estimated early termination losses (118 ) (115 ) Investment in operating leases, net $ 33,770 $ 32,606 Operating lease revenue consisted of the following: Three months ended Six months ended 2019 2018 2019 2018 (U.S. dollars in millions) Lease payments $ 1,669 $ 1,586 $ 3,306 $ 3,153 Subsidy income and dealer rate participation, net (1) 245 210 491 412 Reimbursed lessor costs (2) 21 — 33 — Total operating lease revenue, net $ 1,935 $ 1,796 $ 3,830 $ 3,565 (1) Includes amortization of initial direct costs during the three and six months ended September 30, 2018. (2) Reimbursed lessor costs were presented net during the three and six months ended September 30, 2018. Leased vehicle expenses consisted of the following: Three months ended Six months ended 2019 2018 2019 2018 (U.S. dollars in millions) Depreciation expense $ 1,421 $ 1,361 $ 2,827 $ 2,736 Initial direct costs and other lessor costs (1) 41 — 70 — Gain on disposition of leased vehicles (2) (53 ) (47 ) (96 ) (94 ) Total leased vehicle expenses, net $ 1,409 $ 1,314 $ 2,801 $ 2,642 (1) Amortization of initial direct costs was presented as a reduction to lease revenue and reimbursed lessor costs were presented net during the three and six months ended September 30, 2018. (2) Included in the gain or loss on disposition of leased vehicles are end of term charges of $18 million and $19 million for the three months ended September 30, 2019 and 2018 , and $46 million and $40 million for the six months ended September 30, 2019 and 2018 , respectively. Contractual operating lease payments due as of September 30, 2019 are summarized below. Based on the Company's experience, it is expected that a portion of the Company's operating leases will terminate prior to the scheduled lease term. The summary below should not be regarded as a forecast of future cash collections. Twelve month periods ending September 30, (U.S. dollars in millions) 2020 $ 6,123 2021 4,473 2022 2,272 2023 343 2024 63 Total $ 13,274 The Company recognized early termination losses due to lessee defaults of $36 million and $39 million during the three months ended September 30, 2019 and 2018 , and $60 million and $56 million , during the six months ended September 30, 2019 and 2018 , respectively. Actual net losses realized totaled $32 million and $21 million for the three months ended September 30, 2019 and 2018 , and $56 million and $36 million for the six months ended September 30, 2019 and 2018 , respectively. The general allowance for uncollectible operating lease receivables was recorded through a reduction to revenue of $7 million and $13 million during the three and six months ended September 30, 2019 , respectively. The general allowance for uncollectible operating lease receivables was recorded through a provision for credit losses of $10 million and $20 million during the three and six months ended September 30, 2018 , respectively. No impairment losses due to declines in estimated residual values were recognized during the three and six months ended September 30, 2019 and 2018 . |
Debt
Debt | 6 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt The Company issues debt in various currencies with both floating and fixed interest rates. Outstanding debt net of discounts and fees, weighted average contractual interest rates and range of contractual interest rates were as follows: Weighted average contractual interest rate Contractual September 30, March 31, September 30, March 31, September 30, March 31, (U.S. dollars in millions) Unsecured debt: Commercial paper $ 5,517 $ 5,755 2.11 % 2.60 % 1.79 - 2.31% 1.79 - 2.71% Related party debt 755 749 1.97 % 2.18 % 1.96 - 1.98% 2.02 - 2.31% Bank loans 4,972 4,962 2.75 % 3.16 % 2.27 - 3.00% 2.35 - 3.50% Private MTN program 999 999 3.84 % 3.84 % 3.80 - 3.88% 3.80 - 3.88% Public MTN program 25,336 24,117 2.28 % 2.35 % 0.35 - 3.63% 0.35 - 3.63% Euro MTN programme 28 868 2.23 % 1.89 % 2.23 - 2.23% 1.88 - 2.23% Other debt 3,467 3,514 2.54 % 2.50 % 1.82 - 3.44% 1.63 - 3.44% Total unsecured debt 41,074 40,964 Secured debt 8,934 8,790 2.45 % 2.42 % 1.21 - 3.30% 1.16 - 3.30% Total debt $ 50,008 $ 49,754 As of September 30, 2019 , the outstanding principal balance of long-term debt with floating interest rates totaled $12.8 billion , long-term debt with fixed interest rates totaled $30.1 billion , and short-term debt totaled $7.1 billion . As of March 31, 2019 , the outstanding principal balance of long-term debt with floating interest rates totaled $12.5 billion , long-term debt with fixed interest rates totaled $29.2 billion , and short-term debt totaled $8.1 billion . Commercial Paper As of September 30, 2019 and March 31, 2019 , the Company had commercial paper programs that provide the Company with available funds of up to $8.5 billion , at prevailing market interest rates for terms up to one year. The commercial paper programs are supported by the Keep Well Agreements with HMC described in Note 6. Outstanding commercial paper averaged $5.5 billion and $5.4 billion during the six months ended September 30, 2019 and 2018 , respectively. The maximum balance outstanding at any month-end during the six months ended September 30, 2019 and 2018 was $6.2 billion and $5.7 billion , respectively. Related Party Debt HCFI issues fixed rate short-term notes to HCI to help fund HCFI’s general corporate operations. HCFI incurred interest expense on these notes totaling $4 million for both the three months ended September 30, 2019 and 2018 , and $8 million for both the six months ended September 30, 2019 and 2018 . Bank Loans Outstanding bank loans at September 30, 2019 were either short-term or long-term, with floating interest rates, and denominated in U.S. dollars or Canadian dollars. Outstanding bank loans have prepayment options. No outstanding bank loans as of September 30, 2019 were supported by the Keep Well Agreements with HMC described in Note 6. Outstanding bank loans contain certain covenants, including limitations on liens, mergers, consolidations and asset sales. Medium Term Note (MTN) Programs Private MTN Program AHFC no longer issues MTNs under its Rule 144A Private MTN Program. Notes outstanding under the Private MTN Program as of September 30, 2019 were long-term, with fixed interest rates, and denominated in U.S. dollars. Notes under this program were issued pursuant to the terms of an issuing and paying agency agreement which contains certain covenants, including negative pledge provisions. Public MTN Program In August 2019, AHFC renewed its Public MTN program by filing a registration statement with the SEC under which it may issue from time to time up to $30 billion aggregate principal amount of Public MTNs pursuant to the Public MTN program. The aggregate principal amount of MTNs offered under this program may be increased from time to time. Notes outstanding under the Public MTN program as of September 30, 2019 were either long-term or short-term, with either fixed or floating interest rates, and denominated in U.S. dollars, Euro or Sterling. Notes under this program are issued pursuant to an indenture which contains certain covenants, including negative pledge provisions and limitations on mergers, consolidations and asset sales. Euro MTN Programme The Euro MTN Programme was retired in August 2014. AHFC has one note outstanding under this program as of September 30, 2019 . The note has a maturity date of February 21, 2023, a fixed interest rate and is not listed on the Luxembourg Stock Exchange. The note was issued pursuant to the terms of an agency agreement which contains certain covenants, including negative pledge provisions, and includes customary events of default. The MTN programs are supported by the Keep Well Agreement with HMC described in Note 6. Other Debt The outstanding balances as of September 30, 2019 consisted of private placement debt issued by HCFI which are long-term, with either fixed or floating interest rates, and denominated in Canadian dollars. Private placement debt is supported by the Keep Well Agreement with HMC described in Note 6. The notes are issued pursuant to the terms of an indenture which contains certain covenants, including negative pledge provisions. Secured Debt The Company issues notes through financing transactions that are secured by assets held by issuing securitization trusts. Notes outstanding as of September 30, 2019 were long-term and short-term with either fixed or floating interest rates, and denominated in U.S. dollars or Canadian dollars. Repayment of the notes is dependent on the performance of the underlying receivables. Refer to Note 9 for additional information on the Company’s secured financing transactions. Credit Agreements Syndicated Bank Credit Facilities AHFC maintains a $7.0 billion syndicated bank credit facility that includes a $3.5 billion credit agreement, which expires on February 28, 2020 , a $2.1 billion credit agreement, which expires on March 3, 2021 , and a $1.4 billion credit agreement, which expires on March 3, 2023 . As of September 30, 2019 , no amounts were drawn upon under the AHFC credit agreements. AHFC intends to renew or replace these credit agreements prior to or on their respective expiration dates. HCFI maintains a $1.2 billion syndicated bank credit facility which provides that HCFI may borrow up to $604 million on a one -year and up to $604 million on a five -year revolving basis. The one -year tranche of the credit agreement expires on March 25, 2020 and the five -year tranche of the credit agreement expires on March 25, 2024 . As of September 30, 2019 , no amounts were drawn upon under the HCFI credit agreement. HCFI intends to renew or replace the credit agreement prior to or on the expiration date of each respective tranche. The credit agreements contain customary covenants, including limitations on liens, mergers, consolidations and asset sales. Loans, if any, under the credit agreements will be supported by the Keep Well Agreement described in Note 6. Other Credit Agreements AHFC maintains other committed lines of credit that allow the Company access to an additional $1.0 billion in unsecured funding with two banks. The credit agreements contain customary covenants, including limitations on liens, mergers, consolidations and asset sales. As of September 30, 2019 , no amounts were drawn upon under these agreements. These agreements expire in September 2020 . The Company intends to renew or replace these credit agreements prior to or on their respective expiration dates. |
Derivative Instruments
Derivative Instruments | 6 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments The notional balances and fair values of the Company’s derivatives are presented below. The derivative instruments are presented on a gross basis in the Company’s consolidated balance sheets. Refer to Note 13 regarding the valuation of derivative instruments. September 30, 2019 March 31, 2019 Notional balances Assets Liabilities Notional balances Assets Liabilities (U.S. dollars in millions) Interest rate swaps $ 59,183 $ 345 $ 413 $ 58,132 $ 308 $ 307 Cross currency swaps 4,001 45 152 5,002 72 261 Gross derivative assets/liabilities 390 565 380 568 Counterparty netting adjustment and collateral (356 ) (352 ) (313 ) (318 ) Net derivative assets/liabilities $ 34 $ 213 $ 67 $ 250 The income statement impact of derivative instruments is presented below. There were no derivative instruments designated as part of a hedge accounting relationship during the periods presented. Three months ended Six months ended 2019 2018 2019 2018 (U.S. dollars in millions) Interest rate swaps $ 31 $ 8 $ (45 ) $ 20 Cross currency swaps (205 ) (55 ) (160 ) (330 ) Total gain/(loss) on derivative instruments $ (174 ) $ (47 ) $ (205 ) $ (310 ) The fair value of derivative instruments is subject to the fluctuations in market interest rates and foreign currency exchange rates. Since the Company has elected not to apply hedge accounting, the volatility in the changes in fair value of these derivative instruments is recognized in earnings. All settlements of derivative instruments are presented within cash flows from operating activities in the consolidated statements of cash flows. These derivative instruments also contain an element of credit risk in the event the counterparties are unable to meet the terms of the agreements. However, the Company minimizes the risk exposure by limiting the counterparties to major financial institutions that meet established credit guidelines. In the event of default, all counterparties are subject to legally enforceable master netting agreements. In Canada, HCFI is a party to credit support agreements that require posting of cash collateral to mitigate counterparty credit risk on derivative positions. |
Transactions Involving Related
Transactions Involving Related Parties | 6 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Transactions Involving Related Parties | Transactions Involving Related Parties The following tables summarize the income statement and balance sheet impact of transactions with the Parent and affiliated companies: Three months ended Six months ended Income Statement 2019 2018 2019 2018 (U.S. dollars in millions) Revenue: Subsidy income $ 418 $ 403 $ 845 $ 790 Interest expense: Related party debt 4 4 8 8 Other income, net: VSC administration fees 28 27 55 54 Support Service Fee (9 ) (8 ) (18 ) (17 ) General and administrative expenses: Support Compensation Agreement fees 17 5 34 11 Benefit plan expenses 3 2 5 5 Shared services 19 22 35 37 Balance Sheet September 30, March 31, (U.S. dollars in millions) Assets : Finance receivables, net: Unearned subsidy income $ (927 ) $ (1,091 ) Investment in operating leases, net: Unearned subsidy income (1,514 ) (1,559 ) Due from Parent and affiliated companies 126 162 Liabilities: Debt: Related party debt $ 755 $ 749 Due to Parent and affiliated companies 118 106 Accrued interest expense: Related party debt 2 3 Other liabilities: VSC unearned administrative fees 379 387 Accrued benefit expenses 69 65 Support Agreements HMC and AHFC are parties to a Keep Well Agreement, effective as of September 9, 2005. This Keep Well Agreement provides that HMC will (1) maintain (directly or indirectly) at least 80% ownership in AHFC’s voting stock and not pledge (directly or indirectly), or in any way encumber or otherwise dispose of, any such stock of AHFC that it is required to hold (or permit any of HMC’s subsidiaries to do so), (2) cause AHFC to have a positive consolidated tangible net worth with tangible net worth defined as (a) stockholder’s equity less (b) any intangible assets, determined on a consolidated basis in accordance with GAAP, and (3) ensure that AHFC has sufficient liquidity to meet its payment obligations for debt HMC has confirmed in writing is covered by this Keep Well Agreement, in accordance with its terms, or where necessary make available to AHFC, or HMC shall procure for AHFC, sufficient funds to enable AHFC to meet such obligations in accordance with such terms. This Keep Well Agreement is not a guarantee by HMC. HMC and HCFI are parties to a Keep Well Agreement effective as of September 26, 2005. This Keep Well Agreement provides that HMC will (1) maintain (directly or indirectly) at least 80% ownership in HCFI’s voting stock and not pledge (directly or indirectly), or in any way encumber or otherwise dispose of, any such stock of HCFI that it is required to hold (or permit any of HMC’s subsidiaries to do so), (2) cause HCFI to have a positive consolidated tangible net worth with tangible net worth defined as (a) stockholder’s equity less (b) any intangible assets, determined on a consolidated basis in accordance with generally accepted accounting principles in Canada, and (3) ensure that HCFI has sufficient liquidity to meet its payment obligations for debt HMC has confirmed in writing is covered by this Keep Well Agreement, in accordance with its terms, or where necessary make available to HCFI, or HMC shall procure for HCFI, sufficient funds to enable HCFI to meet such obligations in accordance with such terms. This Keep Well Agreement is not a guarantee by HMC. Debt programs supported by the Keep Well Agreements consist of the Company’s commercial paper programs, Private MTN Program, Public MTN Program, Euro MTN Programme, HCFI’s private placement debt and loans, if any, under AHFC's syndicated bank credit facilities. In connection with the above agreements, AHFC and HCFI have entered into separate Support Compensation Agreements, where each has agreed to pay HMC a quarterly fee based on the amount of outstanding debt that benefit from the Keep Well Agreements. Support Compensation Agreement fees are recognized in general and administrative expenses. Incentive Financing Programs The Company receives subsidy payments from AHM and HCI, which supplement the revenues on financing products offered under incentive programs. Subsidy payments received on retail loans and leases are deferred and recognized as revenue over the term of the related contracts. The unearned balance is recognized as reductions to the carrying value of finance receivables and investment in operating leases. Subsidy payments on dealer loans are received as earned. Related Party Debt HCFI issues short-term notes to HCI to fund HCFI’s general corporate operations. Interest rates are based on prevailing rates of debt with comparable terms. Refer to Note 4 for additional information. Vehicle Service Contract (VSC) Administration AHFC performs administrative services for VSCs issued by certain subsidiaries of AHM. AHFC’s performance obligations for the services are satisfied over the term of the underlying contracts and revenue is recognized proportionate to the anticipated amount of services to be performed. Contract terms range between 2 and 9 years with the majority of contracts having original terms between 4 and 8 years. The majority of the administrative service revenue is recognized during the latter years of the underlying contracts as this is the period in which the majority of VSC claims are processed. AHFC receives fees for performing the administrative services when the contracts are acquired. Unearned VSC administration fees represents AHFC’s contract liabilities and are included in other liabilities (Note 11). VSC administration income is recognized in other income, net (Note 12). HCFI receives fees for marketing VSCs issued by HCI. These fees are also recognized in other income, net. AHFC pays fees to AHM for services provided in support of AHFC’s performance of VSC administrative services. The support fees are recognized as an expense within other income, net (Note 12). Shared Services The Company shares certain common expenditures with AHM, HCI, and other related parties including information technology services and facilities. The allocated costs for shared services are included in general and administrative expenses. Benefit Plans The Company participates in various employee benefit plans that are sponsored by AHM and HCI. The allocated benefit plan expenses are included in general and administrative expenses. Income taxes The Company’s U.S. income taxes are recognized on a modified separate return basis pursuant to an intercompany income tax allocation agreement with AHM. Income tax related items are not included in the tables above. Refer to Note 7 for additional information. Other AHM periodically sponsors programs that allow lessees to terminate their lease contracts prior to the contractual maturity date. AHM compensates the Company for rental payments that were waived under these programs. During both the three months ended September 30, 2019 and 2018 , the Company recognized $3 million , and during the six months ended September 30, 2019 , and 2018 , the Company recognized $6 million and $9 million , respectively, under these programs which were reflected as proceeds on the disposition of the returned lease vehicles. The majority of the amounts due from the Parent and affiliated companies at September 30, 2019 and March 31, 2019 related to incentive financing program subsidies. The majority of the amounts due to the Parent and affiliated companies at September 30, 2019 and March 31, 2019 related to wholesale flooring payable to the Parent. These receivable and payable accounts are non-interest-bearing and short-term in nature and are expected to be settled in the normal course of business. In August 2019, AHFC declared and paid a cash dividend of $292 million to its parent, AHM. |
Income Taxes
Income Taxes | 6 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company's effective tax rate was 25.8% and 32.5% , for the three months ended September 30, 2019 and 2018 , respectively, and 28.4% and 29.8% for the six months ended September 30, 2019 and 2018 , respectively. The difference in the effective tax rate for the three months ended September 30, 2019 was primarily due to the net effects of a decrease in state taxes and a reduction in tax credits. The difference in the effective tax rate for the six months ended September 30, 2019 was primarily due to a decrease in state taxes, offset by an increase in uncertain tax positions and a reduction in tax credits. The Company does not provide for income taxes on its share of the undistributed earnings of HCFI which are intended to be indefinitely reinvested outside the United States. At September 30, 2019 , $1.0 billion of accumulated undistributed earnings of HCFI were intended to be so reinvested. If the undistributed earnings as of September 30, 2019 were to be distributed, the tax liability associated with these indefinitely reinvested earnings would be $59 million . The Company did not record material changes to unrecognized tax benefits during the quarter ended September 30, 2019 and does not expect any material changes in the amounts of unrecognized tax benefits during the remainder of the fiscal year ending March 31, 2020 . As of September 30, 2019 , the Company has open tax years either currently subject to examination or eligible for potential future examination by U.S. federal and state tax jurisdictions for returns filed for the taxable years ended March 31, 2008 through 2018. The Company’s Canadian subsidiary, HCFI, has open tax years either currently subject to examination or eligible for potential future examination for returns filed for the taxable years ended March 31, 2012 through 2019 federally, and returns filed for the taxable years ended March 31, 2009 through 2019 provincially. The Company believes appropriate provision has been made for all outstanding issues for all open years. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Leases The Company leases certain premises and equipment through operating leases. AHFC leases its premises and equipment from third parties and HCFI leases its premises from HCI. Many of the Company's leases contain renewal options, and generally have no residual value guarantees or material covenants. When it is reasonably certain that the Company will exercise the option to renew a lease, the Company will include the renewal option in the evaluation of the lease term. The Company has elected not to recognize right-of-use assets or lease liabilities for leases with a lease term of less than one year. As most of the Company's leases do not provide an implicit rate, the incremental borrowing rate is used in determining the present value of lease payments. The right-of-use assets in operating lease arrangements are reported in other assets on the Company's consolidated balance sheets. Operating lease liabilities are reported in other liabilities on the Company's consolidated balance sheets. At September 30, 2019 , maturities of operating lease liabilities were as follows: Twelve month periods ending September 30, (U.S. dollars in millions) 2020 $ 10 2021 10 2022 9 2023 8 2024 8 Thereafter 21 Total undiscounted future lease obligations 66 Less: imputed interest (7 ) Operating lease liabilities $ 59 Rent expense under operating leases was $2 million for the three months ended September 30, 2019 and $5 million for the six months ended September 30, 2019 . Rent expense is included within general and administrative expenses. As of September 30, 2019 , the weighted average remaining lease term for operating leases was 7.4 years and the weighted average remaining discount rate for operating leases was 3.04% . Revolving Lines of Credit to Dealerships The Company extends commercial revolving lines of credit to dealerships to support their business activities including facilities refurbishment and general working capital requirements. The amounts borrowed are generally secured by the assets of the borrowing entity. The majority of the lines have annual renewal periods. The unused balance of commercial revolving lines of credit was $405 million as of September 30, 2019 . The Company also has commitments to finance the construction of auto dealership facilities. The remaining unfunded balance for these construction loans was $9 million as of September 30, 2019 . Legal Proceedings and Regulatory Matters The Company establishes accruals for legal claims when payments associated with the claims become probable and the costs can be reasonably estimated. When able, the Company will determine estimates of reasonably possible loss or range of loss, whether in excess of any related accrued liability or where there is no accrued liability. Given the inherent uncertainty associated with legal matters, the actual costs of resolving legal claims and associated costs of defense may be substantially higher or lower than the amounts for which accruals have been established. The Company is involved, in the ordinary course of business, in various legal proceedings including claims of individual customers and purported class action lawsuits. Certain of these actions are similar to suits filed against other financial institutions and captive finance companies. Most of these proceedings concern customer allegations of wrongful repossession or defamation of credit. The Company is also subject to governmental reviews and inquiries from time to time. On July 15, 2019, the Company received a Civil Investigative Demand (CID) from the U.S. Department of Justice (DOJ) relating to termination of motor vehicle leases by servicemembers under the Servicemembers Civil Relief Act. The Company is cooperating with the DOJ and is responding to their information requests. Based on available information and established accruals, management does not believe it is reasonably possible that the results of these proceedings, in the aggregate, will have a material adverse effect on the Company’s consolidated financial statements. |
Securitizations and Variable In
Securitizations and Variable Interest Entities (VIE) | 6 Months Ended |
Sep. 30, 2019 | |
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | |
Securitizations and Variable Interest Entities (VIE) | Securitizations and Variable Interest Entities (VIE) The trusts utilized for on-balance sheet securitizations are VIEs, which are required to be consolidated by their primary beneficiary. The Company is considered to be the primary beneficiary of these trusts due to (i) the power to direct the activities of the trusts that most significantly impact the trusts’ economic performance through its role as servicer, and (ii) the obligation to absorb losses or the right to receive residual returns that could potentially be significant to the trusts through the subordinated certificates and residual interest retained. The debt securities issued by the trusts to third-party investors along with the assets of the trusts are included in the Company’s consolidated financial statements. During the six months ended September 30, 2019 and 2018 , the Company issued notes through asset-backed securitizations, which were accounted for as secured financing transactions totaling $2.8 billion and $2.0 billion , respectively. The notes were secured by receivables with an initial principal balance of $3.0 billion and $2.7 billion , respectively. The table below presents the carrying amounts of assets and liabilities of consolidated securitization trusts as they are reported in the Company’s consolidated balance sheets. All amounts exclude intercompany balances, which have been eliminated upon consolidation. The assets of the trusts can only be used to settle the obligations of the trusts and investors in the notes issued by a trust only have recourse to the assets of such trust and do not have recourse to the assets of AHFC, HCFI, or its other subsidiaries or to other trusts. September 30, March 31, (U.S. dollars in millions) Assets: Finance receivables $ 9,504 $ 9,352 Unamortized costs and subsidy income, net (284 ) (265 ) Allowance for credit losses (14 ) (14 ) Finance receivables, net 9,206 9,073 Vehicles held for disposition 4 3 Restricted cash (1) 606 588 Accrued interest receivable (1) 10 9 Total assets $ 9,826 $ 9,673 Liabilities: Secured debt $ 8,948 $ 8,803 Unamortized discounts and fees (14 ) (13 ) Secured debt, net 8,934 8,790 Accrued interest expense 8 8 Total liabilities $ 8,942 $ 8,798 (1) Included with other assets in the Company’s consolidated balance sheets (Note 10). In their role as servicers, AHFC and HCFI collect principal and interest payments on the underlying receivables on behalf of the securitization trusts. Cash collected during a calendar month is required to be remitted to the trusts in the following month. AHFC and HCFI are not restricted from using the cash collected for their general purposes prior to the remittance to the trusts. As of September 30, 2019 and March 31, 2019 , AHFC and HCFI had combined cash collections of $430 million and $496 million , respectively, which were required to be remitted to the trusts. |
Other Assets
Other Assets | 6 Months Ended |
Sep. 30, 2019 | |
Other Assets [Abstract] | |
Other Assets | Other Assets Other assets consisted of the following: September 30, March 31, (U.S. dollars in millions) Interest receivable and other assets $ 105 $ 106 Other receivables 149 175 Deferred expense 114 115 Software, net of accumulated amortization of $159 and $154 as of September 30, 2019 and March 31, 2019, respectively 26 29 Property and equipment, net of accumulated depreciation of $22 and $21 as of September 30, 2019 and March 31, 2019, respectively 5 6 Restricted cash 606 588 Operating lease assets 52 — Like-kind exchange assets 71 73 Other miscellaneous assets 20 25 Total $ 1,148 $ 1,117 Depreciation and amortization are computed on a straight-line basis over the estimated useful lives of the related assets, which range from 3 to 5 years. General and administrative expenses include depreciation and amortization expense of $3 million for both the three months ended September 30, 2019 and 2018 , and $6 million for both the six months ended September 30, 2019 and 2018 . |
Other Liabilities
Other Liabilities | 6 Months Ended |
Sep. 30, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | Other Liabilities Other liabilities consisted of the following: September 30, March 31, (U.S. dollars in millions) Dealer payables $ 159 $ 241 Accounts payable and accrued expenses 413 399 Lease security deposits 88 85 VSC unearned administrative fees (Note 6) 379 387 Unearned income, operating leases 361 352 Operating lease liabilities 59 — Uncertain tax positions 122 89 Other liabilities 21 14 Total $ 1,602 $ 1,567 |
Other Income, net
Other Income, net | 6 Months Ended |
Sep. 30, 2019 | |
Other Income and Expenses [Abstract] | |
Other Income, net | Other Income, net Other income consisted of the following: Three months ended Six months ended 2019 2018 2019 2018 (U.S. dollars in millions) VSC administration (Note 6) $ 28 $ 27 $ 55 $ 54 Other, net (5 ) (10 ) (12 ) (22 ) Total $ 23 $ 17 $ 43 $ 32 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Level 1 inputs are quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are those other than quoted prices included within Level 1 that are observable for the asset or liability. Level 3 inputs are unobservable inputs for the asset or liability. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Nonperformance risk is also required to be reflected in the fair value measurement, including an entity’s own credit standing when measuring the fair value of a liability. Recurring Fair Value Measurements The following tables summarize the fair value hierarchy of assets and liabilities measured at fair value on a recurring basis: September 30, 2019 Level 1 Level 2 Level 3 Total (U.S. dollars in millions) Assets: Derivative instruments: Interest rate swaps $ — $ 345 $ — $ 345 Cross currency swaps — 45 — 45 Total assets $ — $ 390 $ — $ 390 Liabilities: Derivative instruments: Interest rate swaps $ — $ 413 $ — $ 413 Cross currency swaps — 152 — 152 Total liabilities $ — $ 565 $ — $ 565 March 31, 2019 Level 1 Level 2 Level 3 Total (U.S. dollars in millions) Assets: Derivative instruments: Interest rate swaps $ — $ 308 $ — $ 308 Cross currency swaps — 72 — 72 Total assets $ — $ 380 $ — $ 380 Liabilities: Derivative instruments: Interest rate swaps $ — $ 307 $ — $ 307 Cross currency swaps — 261 — 261 Total liabilities $ — $ 568 $ — $ 568 The valuation techniques used in measuring assets and liabilities at fair value on a recurring basis are described below: Derivative Instruments The Company’s derivatives are transacted in over-the-counter markets and quoted market prices are not readily available. The Company uses third-party developed valuation models to value derivative instruments. These models estimate fair values using discounted cash flow modeling techniques, which utilize the contractual terms of the derivative instruments and market-based inputs, including interest rates and foreign exchange rates. Discount rates incorporate counterparty and HMC specific credit default spreads to reflect nonperformance risk. The Company’s derivative instruments are classified as Level 2 since all significant inputs are observable and do not require management judgment. There were no transfers between fair value hierarchy levels during the three months ended September 30, 2019 and 2018 . Refer to Note 5 for additional information on derivative instruments. Nonrecurring Fair Value Measurements The following tables summarize nonrecurring fair value measurements recognized for assets still held at the end of the reporting periods presented: Level 1 Level 2 Level 3 Total Lower-of-cost or fair value adjustment (U.S. dollars in millions) September 30, 2019 Vehicles held for disposition $ — $ — $ 121 $ 121 $ 27 September 30, 2018 Vehicles held for disposition $ — $ — $ 104 $ 104 $ 22 The following describes the methodologies and assumptions used in nonrecurring fair value measurements, which relate to the application of lower of cost or fair value accounting on long-lived assets. Vehicles Held for Disposition Vehicles held for disposition consist of returned and repossessed vehicles. They are valued at the lower of their carrying value or estimated fair value, less estimated disposition costs. The fair value is based on current average selling prices of like vehicles at wholesale used vehicle auctions. Fair Value of Financial Instruments The following tables summarize the carrying values and fair values of the Company’s financial instruments except for those measured at fair value on a recurring basis. Certain financial instruments and all nonfinancial assets and liabilities are excluded from fair value disclosure requirements including the Company’s investment in operating leases. September 30, 2019 Carrying Fair value value Level 1 Level 2 Level 3 Total (U.S. dollars in millions) Assets: Cash and cash equivalents $ 808 $ 808 $ — $ — $ 808 Dealer loans, net 4,983 — — 4,768 4,768 Retail loans, net 35,238 — — 35,778 35,778 Restricted cash 606 606 — — 606 Liabilities: Commercial paper $ 5,517 $ — $ 5,517 $ — $ 5,517 Related party debt 755 — 755 — 755 Bank loans 4,972 — 4,999 — 4,999 Medium term note programs 26,363 — 26,736 — 26,736 Other debt 3,467 — 3,516 — 3,516 Secured debt 8,934 — 8,992 — 8,992 March 31, 2019 Carrying Fair value value Level 1 Level 2 Level 3 Total (U.S. dollars in millions) Assets: Cash and cash equivalents $ 795 $ 795 $ — $ — $ 795 Dealer loans, net 5,827 — — 5,611 5,611 Retail loans, net 34,569 — — 34,857 34,857 Restricted cash 588 588 — — 588 Liabilities: Commercial paper $ 5,755 $ — $ 5,755 $ — $ 5,755 Related party debt 749 — 749 — 749 Bank loans 4,962 — 5,000 — 5,000 Medium term note programs 25,984 — 26,130 — 26,130 Other debt 3,514 — 3,535 — 3,535 Secured debt 8,790 — 8,799 — 8,799 Fair value information presented in the tables above is based on information available at September 30, 2019 and March 31, 2019 . Although the Company is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been updated since those dates, and therefore, the current estimates of fair value at dates subsequent to those dates may differ significantly from the amounts presented herein. |
Segment Information
Segment Information | 6 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company’s reportable segments are based on the two geographic regions where operating results are measured and evaluated by management: the United States and Canada. Segment performance is evaluated using an internal measurement basis, which differs from the Company’s consolidated results prepared in accordance with GAAP. Segment performance is evaluated on a pre-tax basis before the effect of valuation adjustments on derivative instruments and revaluations of foreign currency denominated debt. Since the Company does not elect to apply hedge accounting, the impact to earnings resulting from these valuation adjustments as reported under GAAP is not representative of segment performance as evaluated by management. Realized gains and losses on derivative instruments, net of realized gains and losses on foreign currency denominated debt, are included in the measure of net revenues when evaluating segment performance. No adjustments are made to segment performance to allocate any revenues or expenses. Financing products offered throughout the United States and Canada are substantially similar. Segment revenues from the various financing products are reported on the same basis as GAAP consolidated results. Financial information for the three and six months ended September 30, 2019 and 2018 is summarized in the following tables: United States Canada Valuation adjustments and reclassifications Consolidated Total (U.S. dollars in millions) Three months ended September 30, 2019 Revenues: Retail $ 390 $ 53 $ — $ 443 Dealer 51 6 — 57 Operating leases 1,595 340 — 1,935 Total revenues 2,036 399 — 2,435 Leased vehicle expenses 1,152 257 — 1,409 Interest expenses 273 45 — 318 Realized (gains)/losses on derivatives and foreign currency denominated debt 23 (1 ) (22 ) — Net revenues 588 98 22 708 Other income 20 3 — 23 Total net revenues 608 101 22 731 Expenses: General and administrative expenses 109 15 — 124 Provision for credit losses 56 2 — 58 Early termination loss on operating leases 36 — — 36 (Gain)/Loss on derivative instruments — — 174 174 (Gain)/Loss on foreign currency revaluation of debt — — (184 ) (184 ) Income before income taxes $ 407 $ 84 $ 32 $ 523 Six months ended September 30, 2019 Revenues: Retail $ 772 $ 104 $ — $ 876 Dealer 110 12 — 122 Operating leases 3,160 670 — 3,830 Total revenues 4,042 786 — 4,828 Leased vehicle expenses 2,294 507 — 2,801 Interest expenses 550 90 — 640 Realized (gains)/losses on derivatives and foreign currency denominated debt 38 (3 ) (35 ) — Net revenues 1,160 192 35 1,387 Other income 37 6 — 43 Total net revenues 1,197 198 35 1,430 Expenses: General and administrative expenses 215 30 — 245 Provision for credit losses 104 2 — 106 Early termination loss on operating leases 59 1 — 60 (Gain)/Loss on derivative instruments — — 205 205 (Gain)/Loss on foreign currency revaluation of debt — — (146 ) (146 ) Income before income taxes $ 819 $ 165 $ (24 ) $ 960 September 30, 2019 Finance receivables, net $ 35,737 $ 4,486 $ — $ 40,223 Investment in operating leases, net 28,407 5,363 — 33,770 Total assets 66,960 10,020 — 76,980 United States Canada Valuation adjustments and reclassifications Consolidated Total (U.S. dollars in millions) Three months ended September 30, 2018 Revenues: Retail $ 348 $ 53 $ — $ 401 Dealer 50 5 — 55 Operating leases 1,485 311 — 1,796 Total revenues 1,883 369 — 2,252 Leased vehicle expenses 1,073 241 — 1,314 Interest expense 250 43 — 293 Realized (gains)/losses on derivatives and foreign currency denominated debt 2 (4 ) 2 — Net revenues 558 89 (2 ) 645 Other income 14 3 — 17 Total net revenues 572 92 (2 ) 662 Expenses: General and administrative expenses 106 13 — 119 Provision for credit losses 60 2 — 62 Early termination loss on operating leases 38 1 — 39 (Gain)/Loss on derivative instruments — — 47 47 (Gain)/Loss on foreign currency revaluation of debt — — (27 ) (27 ) Income before income taxes $ 368 $ 76 $ (22 ) $ 422 Six months ended September 30, 2018 Revenues: Retail $ 672 $ 105 $ — $ 777 Dealer 100 10 — 110 Operating leases 2,953 612 — 3,565 Total revenues 3,725 727 — 4,452 Leased vehicle expenses 2,168 474 — 2,642 Interest expense 484 83 — 567 Realized (gains)/losses on derivatives and foreign currency denominated debt — (7 ) 7 — Net revenues 1,073 177 (7 ) 1,243 Other income 27 5 — 32 Total net revenues 1,100 182 (7 ) 1,275 Expenses: General and administrative expenses 202 27 — 229 Provision for credit losses 102 4 — 106 Early termination loss on operating leases 54 2 — 56 (Gain)/Loss on derivative instruments — — 310 310 (Gain)/Loss on foreign currency revaluation of debt — — (274 ) (274 ) Income before income taxes $ 742 $ 149 $ (43 ) $ 848 September 30, 2018 Finance receivables, net $ 34,546 $ 4,587 $ — $ 39,133 Investment in operating leases, net 27,127 5,191 — 32,318 Total assets 64,250 10,003 — 74,253 |
Summary of Business and Signi_2
Summary of Business and Significant Accounting Policies (Policies) | 6 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organizational Structure | Organizational Structure American Honda Finance Corporation (AHFC) is a wholly-owned subsidiary of American Honda Motor Co., Inc. (AHM or the Parent). Honda Canada Finance Inc. (HCFI) is a majority-owned subsidiary of AHFC. Noncontrolling interest in HCFI is held by Honda Canada Inc. (HCI), an affiliate of AHFC. AHM is a wholly-owned subsidiary and HCI is an indirect wholly-owned subsidiary of Honda Motor Co., Ltd. (HMC). AHM and HCI are the sole authorized distributors of Honda and Acura products, including motor vehicles, parts and accessories in the United States and Canada. Unless otherwise indicated by the context, all references to the “Company”, “we”, “us”, and “our” in this report include AHFC and its consolidated subsidiaries, and references to “AHFC” refer solely to American Honda Finance Corporation (excluding AHFC’s subsidiaries). |
Basis of Presentation | Basis of Presentation The unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim information, and instructions to the Quarterly Report on Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion of management, these unaudited interim financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results of operations, cash flows, and financial condition for the interim periods presented. Results for interim periods should not be considered indicative of results for the full year or for any other interim period. These unaudited interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements, significant accounting policies, and the other notes to the consolidated financial statements for the fiscal year ended March 31, 2019 included in the Company’s Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission (SEC) on June 21, 2019. All significant intercompany balances and transactions have been eliminated upon consolidation. |
Reclassification | Certain reclassifications have been made to prior period financial statements and notes to conform to the current period presentation. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards Effective April 1, 2019, the Company adopted Accounting Standard Update (ASU) 2016-02, Leases (Topic 842) , and the related amendments using the modified retrospective approach. Prior period comparative information has not been restated and will continue to be reported under previous accounting policies. The Company also elected the package of practical expedients which allows the Company to not reassess prior conclusions about lease identification, classification, and initial direct costs. The adoption of the new lease standard did not have a cumulative-effect adjustment to the opening balance of retained earnings. Upon adoption, the Company recognized right-of-use assets of $56 million , lease liabilities of $62 million , and a reduction in other liabilities of $6 million for accrued rent and unamortized tenant improvement allowances for existing operating leases as a lessee. The new lease standard is not expected to have a significant impact on the Company’s net income on an ongoing basis. Lessor accounting remains largely unchanged except for limited amendments impacting the Company’s income statement classification of the following: (i) the Company has elected to record the general allowance for uncollectible operating lease receivables through a reduction to revenue rather than a provision for credit loss, (ii) lessor costs, such as property taxes, paid directly to third parties and reimbursed by lessee which were presented net are now recognized gross as revenue and expense, and (iii) the amortization of initial direct costs which was previously recognized as a reduction of lease revenue is now presented as an expense. The Company has elected to exclude from lease revenue and expenses, sales taxes and other similar taxes collected from lessees on behalf of governmental agencies, which is consistent with previous accounting policies. Effective April 1, 2019, the Company adopted ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which better aligns an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The adoption of this standard did not impact the Company’s consolidated financial statements since there were no designated hedge accounting relationships. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In June 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The amendments replace the incurred loss impairment methodology in current GAAP with a methodology that reflects lifetime expected credit losses. The Company is finalizing accounting policy elections and refining its models and methodologies used to estimate the allowance for credit losses to meet the requirements of the new standard. The Company's allowance for credit losses is expected to increase upon adoption of this standard. The magnitude of the increase will depend primarily on the composition and seasoning of the retail loan portfolio, existing and forecasted economic conditions, and other management judgments at the adoption date. The Company plans to adopt the new standard and the related amendments effective April 1, 2020, with a cumulative-effect adjustment to opening retained earnings in the period of adoption. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. The amendments modify the disclosure requirements on fair value measurements in Topic 820, based on FASB Concepts Statement, Conceptual Framework for Financial Reporting—Chapter 8: Notes to Financial Statements. Certain disclosure requirements were removed, modified and added in Topic 820. The Company is currently assessing the impact of this standard on the consolidated financial statements. The Company plans to adopt the new guidance effective April 1, 2020. |
Finance Receivables (Tables)
Finance Receivables (Tables) | 6 Months Ended |
Sep. 30, 2019 | |
Receivables [Abstract] | |
Summary of Finance Receivables | Finance receivables consisted of the following: September 30, 2019 Retail Dealer Total (U.S. dollars in millions) Finance receivables $ 35,920 $ 4,983 $ 40,903 Allowance for credit losses (197 ) — (197 ) Deferred dealer participation and other deferred costs 452 — 452 Unearned subsidy income (935 ) — (935 ) Finance receivables, net $ 35,240 $ 4,983 $ 40,223 March 31, 2019 Retail Dealer Total (U.S. dollars in millions) Finance receivables $ 35,457 $ 5,835 $ 41,292 Allowance for credit losses (193 ) (8 ) (201 ) Deferred dealer participation and other deferred costs 431 — 431 Unearned subsidy income (1,098 ) — (1,098 ) Finance receivables, net $ 34,597 $ 5,827 $ 40,424 |
Summary of Activity in Allowance for Credit Losses of Finance Receivables Excluding Provisions Related to Past Due Operating Leases | The following is a summary of the activity in the allowance for credit losses of finance receivables: Three and six months ended September 30, 2019 Retail Dealer Total (U.S. dollars in millions) Beginning balance, July 1, 2019 $ 193 $ 11 $ 204 Provision 60 (2 ) 58 Charge-offs (80 ) (9 ) (89 ) Recoveries 24 — 24 Effect of translation adjustment — — — Ending balance, September 30, 2019 $ 197 $ — $ 197 Beginning balance, April 1, 2019 $ 193 $ 8 $ 201 Provision 97 9 106 Charge-offs (144 ) (17 ) (161 ) Recoveries 51 — 51 Effect of translation adjustment — — — Ending balance, September 30, 2019 $ 197 $ — $ 197 Allowance for credit losses – ending balance: Individually evaluated for impairment $ — $ — $ — Collectively evaluated for impairment 197 — 197 Finance receivables – ending balance: Individually evaluated for impairment $ — $ 41 $ 41 Collectively evaluated for impairment 35,437 4,942 40,379 Three and six months ended September 30, 2018 Retail Dealer Total (U.S. dollars in millions) Beginning balance, July 1, 2018 $ 183 $ — $ 183 Provision 52 — 52 Charge-offs (65 ) — (65 ) Recoveries 21 — 21 Effect of translation adjustment — — — Ending balance, September 30, 2018 $ 191 $ — $ 191 Beginning balance, April 1, 2018 $ 179 $ — $ 179 Provision 87 (1 ) 86 Charge-offs (120 ) — (120 ) Recoveries 45 1 46 Effect of translation adjustment — — — Ending balance, September 30, 2018 $ 191 $ — $ 191 Allowance for credit losses – ending balance: Individually evaluated for impairment $ — $ — $ — Collectively evaluated for impairment 191 — 191 Finance receivables – ending balance: Individually evaluated for impairment $ — $ 174 $ 174 Collectively evaluated for impairment 34,274 4,880 39,154 |
Summary of Aging Analysis of Past Due Finance Receivables | The following is an aging analysis of past due finance receivables: 30 – 59 days past due 60 – 89 days past due 90 days or greater past due Total past due Current or less than 30 days past due Total finance receivables (U.S. dollars in millions) September 30, 2019 Retail loans: New auto $ 246 $ 61 $ 15 $ 322 $ 28,654 $ 28,976 Used and certified auto 93 23 6 122 5,062 5,184 Motorcycle and other 13 5 3 21 1,256 1,277 Total retail 352 89 24 465 34,972 35,437 Dealer loans: Wholesale flooring 1 — — 1 3,893 3,894 Commercial loans — — — — 1,089 1,089 Total dealer loans 1 — — 1 4,982 4,983 Total finance receivables $ 353 $ 89 $ 24 $ 466 $ 39,954 $ 40,420 March 31, 2019 Retail loans: New auto $ 214 $ 41 $ 10 $ 265 $ 28,521 $ 28,786 Used and certified auto 70 14 4 88 4,712 4,800 Motorcycle and other 12 3 2 17 1,187 1,204 Total retail 296 58 16 370 34,420 34,790 Dealer loans: Wholesale flooring 1 — 17 18 4,668 4,686 Commercial loans 51 — 17 68 1,081 1,149 Total dealer loans 52 — 34 86 5,749 5,835 Total finance receivables $ 348 $ 58 $ 50 $ 456 $ 40,169 $ 40,625 |
Summary of Portfolio of Retail Loans and Direct Financing Leases by Credit Quality Indicator | The table below presents the Company’s portfolio of retail loans by this credit quality indicator: Retail new auto loans Retail used and certified auto loans Retail motorcycle and other loans Total consumer finance receivables (U.S. dollars in millions) September 30, 2019 Performing $ 28,900 $ 5,155 $ 1,269 $ 35,324 Nonperforming 76 29 8 113 Total $ 28,976 $ 5,184 $ 1,277 $ 35,437 March 31, 2019 Performing $ 28,735 $ 4,782 $ 1,199 $ 34,716 Nonperforming 51 18 5 74 Total $ 28,786 $ 4,800 $ 1,204 $ 34,790 |
Summary of Outstanding Dealer Loans by Grouping | The Company’s outstanding portfolio of dealer loans has been divided into two groups in the tables below. Group A includes the loans of dealerships with the strongest internal risk rating. Group B includes the loans of all remaining dealers. September 30, 2019 March 31, 2019 Wholesale flooring Commercial loans Total Wholesale flooring Commercial loans Total (U.S. dollars in millions) Group A $ 2,439 $ 805 $ 3,244 $ 3,121 $ 823 $ 3,944 Group B 1,455 284 1,739 1,565 326 1,891 Total $ 3,894 $ 1,089 $ 4,983 $ 4,686 $ 1,149 $ 5,835 |
Investment in Operating Leases
Investment in Operating Leases (Tables) | 6 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule of Investment in Operating Leases | Investment in operating leases consisted of the following: September 30, March 31, (U.S. dollars in millions) Operating lease vehicles $ 43,253 $ 42,427 Accumulated depreciation (7,977 ) (8,262 ) Deferred dealer participation and initial direct costs 130 119 Unearned subsidy income (1,518 ) (1,563 ) Estimated early termination losses (118 ) (115 ) Investment in operating leases, net $ 33,770 $ 32,606 |
Schedule of Operating Lease Revenue | Operating lease revenue consisted of the following: Three months ended Six months ended 2019 2018 2019 2018 (U.S. dollars in millions) Lease payments $ 1,669 $ 1,586 $ 3,306 $ 3,153 Subsidy income and dealer rate participation, net (1) 245 210 491 412 Reimbursed lessor costs (2) 21 — 33 — Total operating lease revenue, net $ 1,935 $ 1,796 $ 3,830 $ 3,565 (1) Includes amortization of initial direct costs during the three and six months ended September 30, 2018. (2) Reimbursed lessor costs were presented net during the three and six months ended September 30, 2018. |
Schedule of Operating Lease Expense | Leased vehicle expenses consisted of the following: Three months ended Six months ended 2019 2018 2019 2018 (U.S. dollars in millions) Depreciation expense $ 1,421 $ 1,361 $ 2,827 $ 2,736 Initial direct costs and other lessor costs (1) 41 — 70 — Gain on disposition of leased vehicles (2) (53 ) (47 ) (96 ) (94 ) Total leased vehicle expenses, net $ 1,409 $ 1,314 $ 2,801 $ 2,642 (1) Amortization of initial direct costs was presented as a reduction to lease revenue and reimbursed lessor costs were presented net during the three and six months ended September 30, 2018. (2) Included in the gain or loss on disposition of leased vehicles are end of term charges of $18 million and $19 million for the three months ended September 30, 2019 and 2018 , and $46 million and $40 million for the six months ended September 30, 2019 and 2018 , respectively. |
Schedule of Contractual Operating Lease Payments | Contractual operating lease payments due as of September 30, 2019 are summarized below. Based on the Company's experience, it is expected that a portion of the Company's operating leases will terminate prior to the scheduled lease term. The summary below should not be regarded as a forecast of future cash collections. Twelve month periods ending September 30, (U.S. dollars in millions) 2020 $ 6,123 2021 4,473 2022 2,272 2023 343 2024 63 Total $ 13,274 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Debt, Weighted Average Contractual Interest Rates and Range of Contractual Interest Rates | The Company issues debt in various currencies with both floating and fixed interest rates. Outstanding debt net of discounts and fees, weighted average contractual interest rates and range of contractual interest rates were as follows: Weighted average contractual interest rate Contractual September 30, March 31, September 30, March 31, September 30, March 31, (U.S. dollars in millions) Unsecured debt: Commercial paper $ 5,517 $ 5,755 2.11 % 2.60 % 1.79 - 2.31% 1.79 - 2.71% Related party debt 755 749 1.97 % 2.18 % 1.96 - 1.98% 2.02 - 2.31% Bank loans 4,972 4,962 2.75 % 3.16 % 2.27 - 3.00% 2.35 - 3.50% Private MTN program 999 999 3.84 % 3.84 % 3.80 - 3.88% 3.80 - 3.88% Public MTN program 25,336 24,117 2.28 % 2.35 % 0.35 - 3.63% 0.35 - 3.63% Euro MTN programme 28 868 2.23 % 1.89 % 2.23 - 2.23% 1.88 - 2.23% Other debt 3,467 3,514 2.54 % 2.50 % 1.82 - 3.44% 1.63 - 3.44% Total unsecured debt 41,074 40,964 Secured debt 8,934 8,790 2.45 % 2.42 % 1.21 - 3.30% 1.16 - 3.30% Total debt $ 50,008 $ 49,754 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 6 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Notional Balances and Fair Values of Derivatives | The notional balances and fair values of the Company’s derivatives are presented below. The derivative instruments are presented on a gross basis in the Company’s consolidated balance sheets. Refer to Note 13 regarding the valuation of derivative instruments. September 30, 2019 March 31, 2019 Notional balances Assets Liabilities Notional balances Assets Liabilities (U.S. dollars in millions) Interest rate swaps $ 59,183 $ 345 $ 413 $ 58,132 $ 308 $ 307 Cross currency swaps 4,001 45 152 5,002 72 261 Gross derivative assets/liabilities 390 565 380 568 Counterparty netting adjustment and collateral (356 ) (352 ) (313 ) (318 ) Net derivative assets/liabilities $ 34 $ 213 $ 67 $ 250 |
Income Statement Impact of Derivative Instruments | The income statement impact of derivative instruments is presented below. There were no derivative instruments designated as part of a hedge accounting relationship during the periods presented. Three months ended Six months ended 2019 2018 2019 2018 (U.S. dollars in millions) Interest rate swaps $ 31 $ 8 $ (45 ) $ 20 Cross currency swaps (205 ) (55 ) (160 ) (330 ) Total gain/(loss) on derivative instruments $ (174 ) $ (47 ) $ (205 ) $ (310 ) |
Transactions Involving Relate_2
Transactions Involving Related Parties (Tables) | 6 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Summary of Income Statement and Balance Sheet Impact of Transactions with Parent and Affiliated Companies | The following tables summarize the income statement and balance sheet impact of transactions with the Parent and affiliated companies: Three months ended Six months ended Income Statement 2019 2018 2019 2018 (U.S. dollars in millions) Revenue: Subsidy income $ 418 $ 403 $ 845 $ 790 Interest expense: Related party debt 4 4 8 8 Other income, net: VSC administration fees 28 27 55 54 Support Service Fee (9 ) (8 ) (18 ) (17 ) General and administrative expenses: Support Compensation Agreement fees 17 5 34 11 Benefit plan expenses 3 2 5 5 Shared services 19 22 35 37 Balance Sheet September 30, March 31, (U.S. dollars in millions) Assets : Finance receivables, net: Unearned subsidy income $ (927 ) $ (1,091 ) Investment in operating leases, net: Unearned subsidy income (1,514 ) (1,559 ) Due from Parent and affiliated companies 126 162 Liabilities: Debt: Related party debt $ 755 $ 749 Due to Parent and affiliated companies 118 106 Accrued interest expense: Related party debt 2 3 Other liabilities: VSC unearned administrative fees 379 387 Accrued benefit expenses 69 65 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Maturities of Operating Lease Liabilities | At September 30, 2019 , maturities of operating lease liabilities were as follows: Twelve month periods ending September 30, (U.S. dollars in millions) 2020 $ 10 2021 10 2022 9 2023 8 2024 8 Thereafter 21 Total undiscounted future lease obligations 66 Less: imputed interest (7 ) Operating lease liabilities $ 59 |
Securitizations and Variable _2
Securitizations and Variable Interest Entities (VIE) (Tables) | 6 Months Ended |
Sep. 30, 2019 | |
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | |
Schedule of Carrying Amounts of Assets and Liabilities of Consolidated Securitization Trusts | The table below presents the carrying amounts of assets and liabilities of consolidated securitization trusts as they are reported in the Company’s consolidated balance sheets. All amounts exclude intercompany balances, which have been eliminated upon consolidation. The assets of the trusts can only be used to settle the obligations of the trusts and investors in the notes issued by a trust only have recourse to the assets of such trust and do not have recourse to the assets of AHFC, HCFI, or its other subsidiaries or to other trusts. September 30, March 31, (U.S. dollars in millions) Assets: Finance receivables $ 9,504 $ 9,352 Unamortized costs and subsidy income, net (284 ) (265 ) Allowance for credit losses (14 ) (14 ) Finance receivables, net 9,206 9,073 Vehicles held for disposition 4 3 Restricted cash (1) 606 588 Accrued interest receivable (1) 10 9 Total assets $ 9,826 $ 9,673 Liabilities: Secured debt $ 8,948 $ 8,803 Unamortized discounts and fees (14 ) (13 ) Secured debt, net 8,934 8,790 Accrued interest expense 8 8 Total liabilities $ 8,942 $ 8,798 (1) Included with other assets in the Company’s consolidated balance sheets (Note 10). |
Other Assets (Tables)
Other Assets (Tables) | 6 Months Ended |
Sep. 30, 2019 | |
Other Assets [Abstract] | |
Schedule of Other Assets | Other assets consisted of the following: September 30, March 31, (U.S. dollars in millions) Interest receivable and other assets $ 105 $ 106 Other receivables 149 175 Deferred expense 114 115 Software, net of accumulated amortization of $159 and $154 as of September 30, 2019 and March 31, 2019, respectively 26 29 Property and equipment, net of accumulated depreciation of $22 and $21 as of September 30, 2019 and March 31, 2019, respectively 5 6 Restricted cash 606 588 Operating lease assets 52 — Like-kind exchange assets 71 73 Other miscellaneous assets 20 25 Total $ 1,148 $ 1,117 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 6 Months Ended |
Sep. 30, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Components of Other Liabilities | Other liabilities consisted of the following: September 30, March 31, (U.S. dollars in millions) Dealer payables $ 159 $ 241 Accounts payable and accrued expenses 413 399 Lease security deposits 88 85 VSC unearned administrative fees (Note 6) 379 387 Unearned income, operating leases 361 352 Operating lease liabilities 59 — Uncertain tax positions 122 89 Other liabilities 21 14 Total $ 1,602 $ 1,567 |
Other Income, net (Tables)
Other Income, net (Tables) | 6 Months Ended |
Sep. 30, 2019 | |
Other Income and Expenses [Abstract] | |
Components of Other Income | Other income consisted of the following: Three months ended Six months ended 2019 2018 2019 2018 (U.S. dollars in millions) VSC administration (Note 6) $ 28 $ 27 $ 55 $ 54 Other, net (5 ) (10 ) (12 ) (22 ) Total $ 23 $ 17 $ 43 $ 32 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value Hierarchy of Assets and Liabilities Measured at Fair Value on Recurring Basis | The following tables summarize the fair value hierarchy of assets and liabilities measured at fair value on a recurring basis: September 30, 2019 Level 1 Level 2 Level 3 Total (U.S. dollars in millions) Assets: Derivative instruments: Interest rate swaps $ — $ 345 $ — $ 345 Cross currency swaps — 45 — 45 Total assets $ — $ 390 $ — $ 390 Liabilities: Derivative instruments: Interest rate swaps $ — $ 413 $ — $ 413 Cross currency swaps — 152 — 152 Total liabilities $ — $ 565 $ — $ 565 March 31, 2019 Level 1 Level 2 Level 3 Total (U.S. dollars in millions) Assets: Derivative instruments: Interest rate swaps $ — $ 308 $ — $ 308 Cross currency swaps — 72 — 72 Total assets $ — $ 380 $ — $ 380 Liabilities: Derivative instruments: Interest rate swaps $ — $ 307 $ — $ 307 Cross currency swaps — 261 — 261 Total liabilities $ — $ 568 $ — $ 568 |
Summary of Nonrecurring Fair Value Measurements Recognized for Assets | The following tables summarize nonrecurring fair value measurements recognized for assets still held at the end of the reporting periods presented: Level 1 Level 2 Level 3 Total Lower-of-cost or fair value adjustment (U.S. dollars in millions) September 30, 2019 Vehicles held for disposition $ — $ — $ 121 $ 121 $ 27 September 30, 2018 Vehicles held for disposition $ — $ — $ 104 $ 104 $ 22 |
Summary of Carrying Values and Fair Values of Financial Instruments Except for those Measured at Fair Value on a Recurring Basis | The following tables summarize the carrying values and fair values of the Company’s financial instruments except for those measured at fair value on a recurring basis. Certain financial instruments and all nonfinancial assets and liabilities are excluded from fair value disclosure requirements including the Company’s investment in operating leases. September 30, 2019 Carrying Fair value value Level 1 Level 2 Level 3 Total (U.S. dollars in millions) Assets: Cash and cash equivalents $ 808 $ 808 $ — $ — $ 808 Dealer loans, net 4,983 — — 4,768 4,768 Retail loans, net 35,238 — — 35,778 35,778 Restricted cash 606 606 — — 606 Liabilities: Commercial paper $ 5,517 $ — $ 5,517 $ — $ 5,517 Related party debt 755 — 755 — 755 Bank loans 4,972 — 4,999 — 4,999 Medium term note programs 26,363 — 26,736 — 26,736 Other debt 3,467 — 3,516 — 3,516 Secured debt 8,934 — 8,992 — 8,992 March 31, 2019 Carrying Fair value value Level 1 Level 2 Level 3 Total (U.S. dollars in millions) Assets: Cash and cash equivalents $ 795 $ 795 $ — $ — $ 795 Dealer loans, net 5,827 — — 5,611 5,611 Retail loans, net 34,569 — — 34,857 34,857 Restricted cash 588 588 — — 588 Liabilities: Commercial paper $ 5,755 $ — $ 5,755 $ — $ 5,755 Related party debt 749 — 749 — 749 Bank loans 4,962 — 5,000 — 5,000 Medium term note programs 25,984 — 26,130 — 26,130 Other debt 3,514 — 3,535 — 3,535 Secured debt 8,790 — 8,799 — 8,799 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Financial Information by Segment | Financial information for the three and six months ended September 30, 2019 and 2018 is summarized in the following tables: United States Canada Valuation adjustments and reclassifications Consolidated Total (U.S. dollars in millions) Three months ended September 30, 2019 Revenues: Retail $ 390 $ 53 $ — $ 443 Dealer 51 6 — 57 Operating leases 1,595 340 — 1,935 Total revenues 2,036 399 — 2,435 Leased vehicle expenses 1,152 257 — 1,409 Interest expenses 273 45 — 318 Realized (gains)/losses on derivatives and foreign currency denominated debt 23 (1 ) (22 ) — Net revenues 588 98 22 708 Other income 20 3 — 23 Total net revenues 608 101 22 731 Expenses: General and administrative expenses 109 15 — 124 Provision for credit losses 56 2 — 58 Early termination loss on operating leases 36 — — 36 (Gain)/Loss on derivative instruments — — 174 174 (Gain)/Loss on foreign currency revaluation of debt — — (184 ) (184 ) Income before income taxes $ 407 $ 84 $ 32 $ 523 Six months ended September 30, 2019 Revenues: Retail $ 772 $ 104 $ — $ 876 Dealer 110 12 — 122 Operating leases 3,160 670 — 3,830 Total revenues 4,042 786 — 4,828 Leased vehicle expenses 2,294 507 — 2,801 Interest expenses 550 90 — 640 Realized (gains)/losses on derivatives and foreign currency denominated debt 38 (3 ) (35 ) — Net revenues 1,160 192 35 1,387 Other income 37 6 — 43 Total net revenues 1,197 198 35 1,430 Expenses: General and administrative expenses 215 30 — 245 Provision for credit losses 104 2 — 106 Early termination loss on operating leases 59 1 — 60 (Gain)/Loss on derivative instruments — — 205 205 (Gain)/Loss on foreign currency revaluation of debt — — (146 ) (146 ) Income before income taxes $ 819 $ 165 $ (24 ) $ 960 September 30, 2019 Finance receivables, net $ 35,737 $ 4,486 $ — $ 40,223 Investment in operating leases, net 28,407 5,363 — 33,770 Total assets 66,960 10,020 — 76,980 United States Canada Valuation adjustments and reclassifications Consolidated Total (U.S. dollars in millions) Three months ended September 30, 2018 Revenues: Retail $ 348 $ 53 $ — $ 401 Dealer 50 5 — 55 Operating leases 1,485 311 — 1,796 Total revenues 1,883 369 — 2,252 Leased vehicle expenses 1,073 241 — 1,314 Interest expense 250 43 — 293 Realized (gains)/losses on derivatives and foreign currency denominated debt 2 (4 ) 2 — Net revenues 558 89 (2 ) 645 Other income 14 3 — 17 Total net revenues 572 92 (2 ) 662 Expenses: General and administrative expenses 106 13 — 119 Provision for credit losses 60 2 — 62 Early termination loss on operating leases 38 1 — 39 (Gain)/Loss on derivative instruments — — 47 47 (Gain)/Loss on foreign currency revaluation of debt — — (27 ) (27 ) Income before income taxes $ 368 $ 76 $ (22 ) $ 422 Six months ended September 30, 2018 Revenues: Retail $ 672 $ 105 $ — $ 777 Dealer 100 10 — 110 Operating leases 2,953 612 — 3,565 Total revenues 3,725 727 — 4,452 Leased vehicle expenses 2,168 474 — 2,642 Interest expense 484 83 — 567 Realized (gains)/losses on derivatives and foreign currency denominated debt — (7 ) 7 — Net revenues 1,073 177 (7 ) 1,243 Other income 27 5 — 32 Total net revenues 1,100 182 (7 ) 1,275 Expenses: General and administrative expenses 202 27 — 229 Provision for credit losses 102 4 — 106 Early termination loss on operating leases 54 2 — 56 (Gain)/Loss on derivative instruments — — 310 310 (Gain)/Loss on foreign currency revaluation of debt — — (274 ) (274 ) Income before income taxes $ 742 $ 149 $ (43 ) $ 848 September 30, 2018 Finance receivables, net $ 34,546 $ 4,587 $ — $ 39,133 Investment in operating leases, net 27,127 5,191 — 32,318 Total assets 64,250 10,003 — 74,253 |
Summary of Business and Signi_3
Summary of Business and Significant Accounting Policies - Narrative (Detail) - USD ($) $ in Millions | Sep. 30, 2019 | Apr. 01, 2019 | Mar. 31, 2019 |
Lessee, Lease, Description [Line Items] | |||
Operating lease assets | $ 52 | $ 0 | |
Operating lease liabilities | $ 59 | $ 0 | |
Accounting Standards Update 2016-02 | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease assets | $ 56 | ||
Operating lease liabilities | 62 | ||
Accrued liabilities | $ 6 |
Finance Receivables - Summary o
Finance Receivables - Summary of Finance Receivables (Detail) - USD ($) $ in Millions | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Finance receivables | $ 40,903 | $ 41,292 | ||||
Allowance for credit losses | (197) | $ (204) | (201) | $ (191) | $ (183) | $ (179) |
Deferred dealer participation and other deferred costs | 452 | 431 | ||||
Unearned subsidy income | (935) | (1,098) | ||||
Finance receivables, net | 40,223 | 40,424 | 39,133 | |||
Retail | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Finance receivables | 35,920 | 35,457 | ||||
Allowance for credit losses | (197) | (193) | (193) | (191) | (183) | (179) |
Deferred dealer participation and other deferred costs | 452 | 431 | ||||
Unearned subsidy income | (935) | (1,098) | ||||
Finance receivables, net | 35,240 | 34,597 | ||||
Dealer | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Finance receivables | 4,983 | 5,835 | ||||
Allowance for credit losses | 0 | $ (11) | (8) | $ 0 | $ 0 | $ 0 |
Deferred dealer participation and other deferred costs | 0 | 0 | ||||
Unearned subsidy income | 0 | 0 | ||||
Finance receivables, net | $ 4,983 | $ 5,827 |
Finance Receivables - Narrative
Finance Receivables - Narrative (Detail) - USD ($) | 6 Months Ended | ||
Sep. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | |
Receivables [Abstract] | |||
Principal balance of finance receivables securitized | $ 9,500,000,000 | $ 9,400,000,000 | |
Dealer loans modified as troubled debt restructurings | $ 0 | $ 0 | |
Threshold delinquency period of nonperforming finance receivables | 60 days |
Finance Receivables - Summary_2
Finance Receivables - Summary of Activity in Allowance for Credit Losses of Finance Receivables Excluding Provisions Related to Past Due Operating Leases (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning balance | $ 204 | $ 183 | $ 201 | $ 179 |
Provision | 58 | 52 | 106 | 86 |
Charge-offs | (89) | (65) | (161) | (120) |
Recoveries | 24 | 21 | 51 | 46 |
Effect of translation adjustment | 0 | 0 | 0 | 0 |
Ending balance | 197 | 191 | 197 | 191 |
Allowance for credit losses – ending balance: | ||||
Individually evaluated for impairment | 0 | 0 | 0 | 0 |
Collectively evaluated for impairment | 197 | 191 | 197 | 191 |
Finance receivables – ending balance: | ||||
Individually evaluated for impairment | 41 | 174 | 41 | 174 |
Collectively evaluated for impairment | 40,379 | 39,154 | 40,379 | 39,154 |
Retail | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning balance | 193 | 183 | 193 | 179 |
Provision | 60 | 52 | 97 | 87 |
Charge-offs | (80) | (65) | (144) | (120) |
Recoveries | 24 | 21 | 51 | 45 |
Effect of translation adjustment | 0 | 0 | 0 | 0 |
Ending balance | 197 | 191 | 197 | 191 |
Allowance for credit losses – ending balance: | ||||
Individually evaluated for impairment | 0 | 0 | 0 | 0 |
Collectively evaluated for impairment | 197 | 191 | 197 | 191 |
Finance receivables – ending balance: | ||||
Individually evaluated for impairment | 0 | 0 | 0 | 0 |
Collectively evaluated for impairment | 35,437 | 34,274 | 35,437 | 34,274 |
Dealer | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning balance | 11 | 0 | 8 | 0 |
Provision | (2) | 0 | 9 | (1) |
Charge-offs | (9) | 0 | (17) | 0 |
Recoveries | 0 | 0 | 0 | 1 |
Effect of translation adjustment | 0 | 0 | 0 | 0 |
Ending balance | 0 | 0 | 0 | 0 |
Allowance for credit losses – ending balance: | ||||
Individually evaluated for impairment | 0 | 0 | 0 | 0 |
Collectively evaluated for impairment | 0 | 0 | 0 | 0 |
Finance receivables – ending balance: | ||||
Individually evaluated for impairment | 41 | 174 | 41 | 174 |
Collectively evaluated for impairment | $ 4,942 | $ 4,880 | $ 4,942 | $ 4,880 |
Finance Receivables - Summary_3
Finance Receivables - Summary of Aging Analysis of Past Due Finance Receivables (Detail) - USD ($) $ in Millions | Sep. 30, 2019 | Mar. 31, 2019 |
Financing Receivable, Past Due [Line Items] | ||
Total past due | $ 466 | $ 456 |
Current or less than 30 days past due | 39,954 | 40,169 |
Total finance receivables | 40,420 | 40,625 |
Retail | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 465 | 370 |
Current or less than 30 days past due | 34,972 | 34,420 |
Total finance receivables | 35,437 | 34,790 |
Retail | New auto | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 322 | 265 |
Current or less than 30 days past due | 28,654 | 28,521 |
Total finance receivables | 28,976 | 28,786 |
Retail | Used and certified auto | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 122 | 88 |
Current or less than 30 days past due | 5,062 | 4,712 |
Total finance receivables | 5,184 | 4,800 |
Retail | Motorcycle and other | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 21 | 17 |
Current or less than 30 days past due | 1,256 | 1,187 |
Total finance receivables | 1,277 | 1,204 |
Dealer | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 1 | 86 |
Current or less than 30 days past due | 4,982 | 5,749 |
Total finance receivables | 4,983 | 5,835 |
Dealer | Wholesale flooring | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 1 | 18 |
Current or less than 30 days past due | 3,893 | 4,668 |
Total finance receivables | 3,894 | 4,686 |
Dealer | Commercial loans | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 0 | 68 |
Current or less than 30 days past due | 1,089 | 1,081 |
Total finance receivables | 1,089 | 1,149 |
30 – 59 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 353 | 348 |
30 – 59 days past due | Retail | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 352 | 296 |
30 – 59 days past due | Retail | New auto | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 246 | 214 |
30 – 59 days past due | Retail | Used and certified auto | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 93 | 70 |
30 – 59 days past due | Retail | Motorcycle and other | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 13 | 12 |
30 – 59 days past due | Dealer | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 1 | 52 |
30 – 59 days past due | Dealer | Wholesale flooring | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 1 | 1 |
30 – 59 days past due | Dealer | Commercial loans | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 0 | 51 |
60 – 89 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 89 | 58 |
60 – 89 days past due | Retail | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 89 | 58 |
60 – 89 days past due | Retail | New auto | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 61 | 41 |
60 – 89 days past due | Retail | Used and certified auto | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 23 | 14 |
60 – 89 days past due | Retail | Motorcycle and other | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 5 | 3 |
60 – 89 days past due | Dealer | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 0 | 0 |
60 – 89 days past due | Dealer | Wholesale flooring | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 0 | 0 |
60 – 89 days past due | Dealer | Commercial loans | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 0 | 0 |
90 days or greater past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 24 | 50 |
90 days or greater past due | Retail | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 24 | 16 |
90 days or greater past due | Retail | New auto | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 15 | 10 |
90 days or greater past due | Retail | Used and certified auto | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 6 | 4 |
90 days or greater past due | Retail | Motorcycle and other | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 3 | 2 |
90 days or greater past due | Dealer | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 0 | 34 |
90 days or greater past due | Dealer | Wholesale flooring | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 0 | 17 |
90 days or greater past due | Dealer | Commercial loans | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | $ 0 | $ 17 |
Finance Receivables - Summary_4
Finance Receivables - Summary of Portfolio of Retail Loans and Credit Quality Indicators (Detail) - USD ($) $ in Millions | Sep. 30, 2019 | Mar. 31, 2019 |
Retail | New auto | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Consumer finance receivables | $ 28,976 | $ 28,786 |
Retail | New auto | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Consumer finance receivables | 28,900 | 28,735 |
Retail | New auto | Nonperforming | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Consumer finance receivables | 76 | 51 |
Retail | Used and certified auto | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Consumer finance receivables | 5,184 | 4,800 |
Retail | Used and certified auto | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Consumer finance receivables | 5,155 | 4,782 |
Retail | Used and certified auto | Nonperforming | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Consumer finance receivables | 29 | 18 |
Retail | Motorcycle and other | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Consumer finance receivables | 1,277 | 1,204 |
Retail | Motorcycle and other | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Consumer finance receivables | 1,269 | 1,199 |
Retail | Motorcycle and other | Nonperforming | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Consumer finance receivables | 8 | 5 |
Total consumer finance receivables | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Consumer finance receivables | 35,437 | 34,790 |
Total consumer finance receivables | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Consumer finance receivables | 35,324 | 34,716 |
Total consumer finance receivables | Nonperforming | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Consumer finance receivables | $ 113 | $ 74 |
Finance Receivables - Summary_5
Finance Receivables - Summary of Outstanding Dealer Loans by Grouping (Detail) - USD ($) $ in Millions | Sep. 30, 2019 | Mar. 31, 2019 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Dealer finance receivables | $ 4,983 | $ 5,835 |
Group A | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Dealer finance receivables | 3,244 | 3,944 |
Group B | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Dealer finance receivables | 1,739 | 1,891 |
Wholesale flooring | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Dealer finance receivables | 3,894 | 4,686 |
Wholesale flooring | Group A | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Dealer finance receivables | 2,439 | 3,121 |
Wholesale flooring | Group B | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Dealer finance receivables | 1,455 | 1,565 |
Commercial loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Dealer finance receivables | 1,089 | 1,149 |
Commercial loans | Group A | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Dealer finance receivables | 805 | 823 |
Commercial loans | Group B | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Dealer finance receivables | $ 284 | $ 326 |
Investment in Operating Lease_2
Investment in Operating Leases - Schedule of Investment in Operating Leases (Detail) - USD ($) $ in Millions | Sep. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 |
Lessor, Lease, Description [Line Items] | |||
Investment in operating leases, net | $ 33,770 | $ 32,606 | $ 32,318 |
Assets Leased to Others | |||
Lessor, Lease, Description [Line Items] | |||
Operating lease vehicles | 43,253 | 42,427 | |
Accumulated depreciation | (7,977) | (8,262) | |
Deferred dealer participation and initial direct costs | 130 | 119 | |
Unearned subsidy income | (1,518) | (1,563) | |
Estimated early termination losses | (118) | (115) | |
Investment in operating leases, net | $ 33,770 | $ 32,606 |
Investment in Operating Lease_3
Investment in Operating Leases - Schedule of Operating Lease Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Leases [Abstract] | ||||
Lease payments | $ 1,669 | $ 1,586 | $ 3,306 | $ 3,153 |
Subsidy income and dealer rate participation, net | 245 | 210 | 491 | 412 |
Reimbursed lessor costs | 21 | 0 | 33 | 0 |
Total operating lease revenue, net | $ 1,935 | $ 1,796 | $ 3,830 | $ 3,565 |
Investment in Operating Lease_4
Investment in Operating Leases - Schedule of Leased Vehicle Expenses (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Lessor Disclosure [Abstract] | ||||
Total leased vehicle expenses, net | $ 2 | $ 5 | ||
End of term charges included in gain or loss on disposition of vehicles | 18 | $ 19 | 46 | $ 40 |
Assets Leased to Others | ||||
Lessor Disclosure [Abstract] | ||||
Depreciation expense | 1,421 | 1,361 | 2,827 | 2,736 |
Initial direct costs and other lessor costs | 41 | 0 | 70 | 0 |
Gain on disposition of leased vehicles | (53) | (47) | (96) | (94) |
Total leased vehicle expenses, net | $ 1,409 | $ 1,314 | $ 2,801 | $ 2,642 |
Investment in Operating Lease_5
Investment in Operating Leases - Schedule of Contractual Operating Lease Payments (Details) $ in Millions | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 6,123 |
2021 | 4,473 |
2022 | 2,272 |
2023 | 343 |
2024 | 63 |
Total | $ 13,274 |
Investment in Operating Lease_6
Investment in Operating Leases - Narrative (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Leases [Abstract] | ||||
Termination losses due to lessee defaults | $ 36,000,000 | $ 39,000,000 | $ 60,000,000 | $ 56,000,000 |
Actual early termination net losses realized on operating leases | 32,000,000 | 21,000,000 | 56,000,000 | 36,000,000 |
Provision for credit losses on operating leases | 7,000,000 | 10,000,000 | 13,000,000 | 20,000,000 |
Impairment losses | $ 0 | $ 0 | $ 0 | $ 0 |
Debt - Schedule of Outstanding
Debt - Schedule of Outstanding Debt Net of Discounts and Fees, Weighted Average Contractual Interest Rates and Range of Contractual Interest Rates (Detail) - USD ($) $ in Millions | Sep. 30, 2019 | Mar. 31, 2019 |
Debt Instrument [Line Items] | ||
Unsecured debt: | $ 41,074 | $ 40,964 |
Total debt | 50,008 | 49,754 |
Commercial paper | ||
Debt Instrument [Line Items] | ||
Unsecured debt: | $ 5,517 | $ 5,755 |
Weighted average contractual interest rate (percentage) | 2.11% | 2.60% |
Commercial paper | Minimum | ||
Debt Instrument [Line Items] | ||
Contractual interest rate ranges (percentage) | 1.79% | 1.79% |
Commercial paper | Maximum | ||
Debt Instrument [Line Items] | ||
Contractual interest rate ranges (percentage) | 2.31% | 2.71% |
Related party debt | ||
Debt Instrument [Line Items] | ||
Unsecured debt: | $ 755 | $ 749 |
Weighted average contractual interest rate (percentage) | 1.97% | 2.18% |
Related party debt | Minimum | ||
Debt Instrument [Line Items] | ||
Contractual interest rate ranges (percentage) | 1.96% | 2.02% |
Related party debt | Maximum | ||
Debt Instrument [Line Items] | ||
Contractual interest rate ranges (percentage) | 1.98% | 2.31% |
Bank loans | ||
Debt Instrument [Line Items] | ||
Unsecured debt: | $ 4,972 | $ 4,962 |
Weighted average contractual interest rate (percentage) | 2.75% | 3.16% |
Bank loans | Minimum | ||
Debt Instrument [Line Items] | ||
Contractual interest rate ranges (percentage) | 2.27% | 2.35% |
Bank loans | Maximum | ||
Debt Instrument [Line Items] | ||
Contractual interest rate ranges (percentage) | 3.00% | 3.50% |
Private MTN program | ||
Debt Instrument [Line Items] | ||
Unsecured debt: | $ 999 | $ 999 |
Weighted average contractual interest rate (percentage) | 3.84% | 3.84% |
Private MTN program | Minimum | ||
Debt Instrument [Line Items] | ||
Contractual interest rate ranges (percentage) | 3.80% | 3.80% |
Private MTN program | Maximum | ||
Debt Instrument [Line Items] | ||
Contractual interest rate ranges (percentage) | 3.88% | 3.88% |
Public MTN program | ||
Debt Instrument [Line Items] | ||
Unsecured debt: | $ 25,336 | $ 24,117 |
Weighted average contractual interest rate (percentage) | 2.28% | 2.35% |
Public MTN program | Minimum | ||
Debt Instrument [Line Items] | ||
Contractual interest rate ranges (percentage) | 0.35% | 0.35% |
Public MTN program | Maximum | ||
Debt Instrument [Line Items] | ||
Contractual interest rate ranges (percentage) | 3.63% | 3.63% |
Euro MTN programme | ||
Debt Instrument [Line Items] | ||
Unsecured debt: | $ 28 | $ 868 |
Weighted average contractual interest rate (percentage) | 2.23% | 1.89% |
Euro MTN programme | Minimum | ||
Debt Instrument [Line Items] | ||
Contractual interest rate ranges (percentage) | 2.23% | 1.88% |
Euro MTN programme | Maximum | ||
Debt Instrument [Line Items] | ||
Contractual interest rate ranges (percentage) | 2.23% | 2.23% |
Other debt | ||
Debt Instrument [Line Items] | ||
Unsecured debt: | $ 3,467 | $ 3,514 |
Weighted average contractual interest rate (percentage) | 2.54% | 2.50% |
Other debt | Minimum | ||
Debt Instrument [Line Items] | ||
Contractual interest rate ranges (percentage) | 1.82% | 1.63% |
Other debt | Maximum | ||
Debt Instrument [Line Items] | ||
Contractual interest rate ranges (percentage) | 3.44% | 3.44% |
Secured debt | ||
Debt Instrument [Line Items] | ||
Secured debt | $ 8,934 | $ 8,790 |
Weighted average contractual interest rate (percentage) | 2.45% | 2.42% |
Secured debt | Minimum | ||
Debt Instrument [Line Items] | ||
Contractual interest rate ranges (percentage) | 1.21% | 1.16% |
Secured debt | Maximum | ||
Debt Instrument [Line Items] | ||
Contractual interest rate ranges (percentage) | 3.30% | 3.30% |
Debt - Narrative (Detail)
Debt - Narrative (Detail) | 3 Months Ended | 6 Months Ended | ||||
Sep. 30, 2019USD ($)note | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)note | Sep. 30, 2018USD ($) | Aug. 31, 2019USD ($) | Mar. 31, 2019USD ($) | |
Debt Instrument [Line Items] | ||||||
Outstanding principal balance of long-term debt with floating interest rates | $ 12,800,000,000 | $ 12,800,000,000 | $ 12,500,000,000 | |||
Outstanding principal balance of long-term debt with fixed interest rates | 30,100,000,000 | 30,100,000,000 | 29,200,000,000 | |||
Short-term debt | $ 7,100,000,000 | $ 7,100,000,000 | 8,100,000,000 | |||
Number of notes outstanding | note | 1 | 1 | ||||
AHFC | Other Credit Agreements | ||||||
Debt Instrument [Line Items] | ||||||
Maximum funds available | $ 1,000,000,000 | $ 1,000,000,000 | ||||
Line of credit facility outstanding amount | 0 | 0 | ||||
AHFC | Syndicated Bank Credit Facilities | ||||||
Debt Instrument [Line Items] | ||||||
Maximum funds available | 7,000,000,000 | 7,000,000,000 | ||||
Line of credit facility outstanding amount | 0 | 0 | ||||
AHFC | Syndicated Bank Credit Facilities With 364 Day Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Maximum funds available | 3,500,000,000 | 3,500,000,000 | ||||
AHFC | Syndicated Bank Credit Facilities With Three Year Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Maximum funds available | 2,100,000,000 | 2,100,000,000 | ||||
AHFC | Syndicated Bank Credit Facilities With Five Year Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Maximum funds available | 1,400,000,000 | 1,400,000,000 | ||||
AHFC | Syndicated Bank Credit Facilities With One Year Revolving Term | ||||||
Debt Instrument [Line Items] | ||||||
Maximum funds available | 604,000,000 | 604,000,000 | ||||
AHFC | Syndicated Bank Credit Facilities With Five Year Revolving Term | ||||||
Debt Instrument [Line Items] | ||||||
Maximum funds available | 604,000,000 | 604,000,000 | ||||
HCFI | ||||||
Debt Instrument [Line Items] | ||||||
Related party interest expense incurred | 4,000,000 | $ 4,000,000 | 8,000,000 | $ 8,000,000 | ||
HCFI | Syndicated Bank Credit Facilities | ||||||
Debt Instrument [Line Items] | ||||||
Maximum funds available | 1,200,000,000 | 1,200,000,000 | ||||
Line of credit facility outstanding amount | 0 | $ 0 | ||||
HCFI | Syndicated Bank Credit Facilities With One Year Revolving Term | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, term | 1 year | |||||
HCFI | Syndicated Bank Credit Facilities With Five Year Revolving Term | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, term | 5 years | |||||
Commercial paper | ||||||
Debt Instrument [Line Items] | ||||||
Maximum funds available | $ 8,500,000,000 | $ 8,500,000,000 | $ 8,500,000,000 | |||
Average outstanding balance | 5,500,000,000 | 5,400,000,000 | ||||
Commercial paper | AHFC | Other Credit Agreements | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, maximum month-end outstanding amount | $ 6,200,000,000 | $ 5,700,000,000 | ||||
Public MTN program | ||||||
Debt Instrument [Line Items] | ||||||
Maximum funds available | $ 30,000,000,000 |
Derivative Instruments - Notion
Derivative Instruments - Notional Balances and Fair Values of Derivatives (Detail) - USD ($) $ in Millions | Sep. 30, 2019 | Mar. 31, 2019 |
Derivatives, Fair Value [Line Items] | ||
Assets | $ 390 | $ 380 |
Counterparty netting adjustment and collateral | (356) | (313) |
Net derivative assets | 34 | 67 |
Liabilities | 565 | 568 |
Counterparty netting adjustment and collateral | (352) | (318) |
Net derivative liabilities | 213 | 250 |
Interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Notional balances | 59,183 | 58,132 |
Assets | 345 | 308 |
Liabilities | 413 | 307 |
Cross currency swaps | ||
Derivatives, Fair Value [Line Items] | ||
Notional balances | 4,001 | 5,002 |
Assets | 45 | 72 |
Liabilities | $ 152 | $ 261 |
Derivative Instruments - Income
Derivative Instruments - Income Statement Impact of Derivative Instruments (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total gain/(loss) on derivative instruments | $ (174) | $ (47) | $ (205) | $ (310) |
Interest rate swaps | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total gain/(loss) on derivative instruments | 31 | 8 | (45) | 20 |
Cross currency swaps | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total gain/(loss) on derivative instruments | $ (205) | $ (55) | $ (160) | $ (330) |
Transactions Involving Relate_3
Transactions Involving Related Parties - Summary of Income Statement Impact of Transactions with Parent and Affiliated Companies (Detail) - Affiliated Entity - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue: | ||||
Subsidy income | $ 418 | $ 403 | $ 845 | $ 790 |
Interest expense: | ||||
Related party debt | 4 | 4 | 8 | 8 |
Other income, net: | ||||
VSC administration fees | 28 | 27 | 55 | 54 |
Support Service Fee | (9) | (8) | (18) | (17) |
General and administrative expenses: | ||||
Support Compensation Agreement fees | 17 | 5 | 34 | 11 |
Benefit plan expenses | 3 | 2 | 5 | 5 |
Shared services | $ 19 | $ 22 | $ 35 | $ 37 |
Transactions Involving Relate_4
Transactions Involving Related Parties - Summary of Balance Sheet Impact of Transactions with Parent and Affiliated Companies (Detail) - USD ($) $ in Millions | Sep. 30, 2019 | Mar. 31, 2019 |
Investment in operating leases, net: | ||
Due from Parent and affiliated companies | $ 126 | $ 162 |
Debt: | ||
Related party debt | 755 | 749 |
Due to Parent and affiliated companies | 119 | 106 |
Affiliated Entity | ||
Finance receivables, net: | ||
Unearned subsidy income | (927) | (1,091) |
Investment in operating leases, net: | ||
Unearned subsidy income | (1,514) | (1,559) |
Due from Parent and affiliated companies | 126 | 162 |
Debt: | ||
Related party debt | 755 | 749 |
Due to Parent and affiliated companies | 118 | 106 |
Accrued interest expense: | ||
Related party debt | 2 | 3 |
Other liabilities: | ||
VSC unearned administrative fees | 379 | 387 |
Accrued benefit expenses | $ 69 | $ 65 |
Transactions Involving Relate_5
Transactions Involving Related Parties - Narrative (Detail) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Related Party Transaction [Line Items] | |||||
Compensating funds from parent for waived rental payments of returned lease vehicles | $ 6 | $ 9 | |||
AHFC | Minimum | |||||
Related Party Transaction [Line Items] | |||||
Vehicle service contract terms | 2 years | ||||
Majority of vehicle service contract terms | 4 years | ||||
AHFC | Maximum | |||||
Related Party Transaction [Line Items] | |||||
Vehicle service contract terms | 9 years | ||||
Majority of vehicle service contract terms | 8 years | ||||
AHFC | Honda Motor Co., Ltd. | |||||
Related Party Transaction [Line Items] | |||||
Honda Motor Company required ownership interest (percentage) | 80.00% | 80.00% | |||
HCFI | Honda Motor Co., Ltd. | |||||
Related Party Transaction [Line Items] | |||||
Honda Motor Company required ownership interest (percentage) | 80.00% | 80.00% | |||
AHM | |||||
Related Party Transaction [Line Items] | |||||
Compensating funds from parent for waived rental payments of returned lease vehicles | $ 3 | $ 3 | |||
Declared and paid cash dividend | $ 292 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate (percentage) | 25.80% | 32.50% | 28.40% | 29.80% |
Accumulated undistributed earnings of HCFI | $ 1,000 | $ 1,000 | ||
Unrecognized deferred tax liability from undistributed foreign earnings | $ 59 | $ 59 |
Commitments and Contingencies -
Commitments and Contingencies - Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Mar. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
2020 | $ 10 | |
2021 | 10 | |
2022 | 9 | |
2023 | 8 | |
2024 | 8 | |
Thereafter | 21 | |
Total undiscounted future lease obligations | 66 | |
Less: imputed interest | (7) | |
Operating lease liabilities | $ 59 | $ 0 |
Commitments and Contingencies_2
Commitments and Contingencies - Narrative (Detail) $ in Millions | 3 Months Ended | 6 Months Ended |
Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | |
Commitments And Contingencies Disclosure [Line Items] | ||
Operating lease. rent expense | $ 2 | $ 5 |
Operating lease, weighted average remaining lease term | 7 years 5 months | 7 years 5 months |
Operating lease, weighted average discount rate (percentage) | 3.04% | 3.04% |
Revolving lines of credit | ||
Commitments And Contingencies Disclosure [Line Items] | ||
Unused balance of commercial revolving lines of credit | $ 405 | $ 405 |
Construction of auto dealership facilities | ||
Commitments And Contingencies Disclosure [Line Items] | ||
Remaining unfunded balance for construction loans | $ 9 | $ 9 |
Securitizations and Variable _3
Securitizations and Variable Interest Entities (VIE) - Narrative (Detail) - USD ($) $ in Millions | 6 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Mar. 31, 2019 | |
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | |||
Asset-backed securitization notes issued during period | $ 2,800 | $ 2,000 | |
Initial receivable principal balance underlying asset-backed securitization notes issued during period | 3,000 | $ 2,700 | |
Cash to be remitted to trusts | $ 430 | $ 496 |
Securitizations and Variable _4
Securitizations and Variable Interest Entities (VIE) - Schedule of Carrying Amounts of Assets and Liabilities of Consolidated Securitization Trusts (Detail) - USD ($) $ in Millions | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | ||
Assets: | ||||||||
Finance receivables | $ 40,903 | $ 41,292 | ||||||
Allowance for credit losses | (197) | $ (204) | (201) | $ (191) | $ (183) | $ (179) | ||
Finance receivables, net | 40,223 | 40,424 | 39,133 | |||||
Vehicles held for disposition | 196 | 252 | ||||||
Restricted cash | 606 | [1] | 588 | 524 | [1] | |||
Total assets | 76,980 | 75,964 | $ 74,253 | |||||
Liabilities: | ||||||||
Accrued interest expense | 161 | 150 | ||||||
Total liabilities | 59,302 | 58,696 | ||||||
Consolidated variable interest entities | ||||||||
Assets: | ||||||||
Finance receivables | 9,504 | 9,352 | ||||||
Unamortized costs and subsidy income, net | (284) | (265) | ||||||
Allowance for credit losses | (14) | (14) | ||||||
Finance receivables, net | 9,206 | 9,073 | ||||||
Vehicles held for disposition | 4 | 3 | ||||||
Restricted cash | 606 | 588 | ||||||
Accrued interest receivable | 10 | 9 | ||||||
Total assets | 9,826 | 9,673 | ||||||
Liabilities: | ||||||||
Secured debt | 8,948 | 8,803 | ||||||
Unamortized discounts and fees | (14) | (13) | ||||||
Secured debt, net | 8,934 | 8,790 | ||||||
Accrued interest expense | 8 | 8 | ||||||
Total liabilities | $ 8,942 | $ 8,798 | ||||||
[1] | Restricted cash balances relate primarily to securitization arrangements (Note 9). |
Other Assets - Schedule of Othe
Other Assets - Schedule of Other Assets (Detail) - USD ($) $ in Millions | Sep. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | [1] | |
Other Assets [Abstract] | |||||
Interest receivable and other assets | $ 105 | $ 106 | |||
Other receivables | 149 | 175 | |||
Deferred expense | 114 | 115 | |||
Software, net of accumulated amortization of $159 and $154 as of September 30, 2019 and March 31, 2019, respectively | 26 | 29 | |||
Property and equipment, net of accumulated depreciation of $22 and $21 as of September 30, 2019 and March 31, 2019, respectively | 5 | 6 | |||
Restricted cash | 606 | [1] | 588 | $ 524 | |
Operating lease assets | 52 | 0 | |||
Like-kind exchange assets | 71 | 73 | |||
Other miscellaneous assets | 20 | 25 | |||
Total | $ 1,148 | $ 1,117 | |||
[1] | Restricted cash balances relate primarily to securitization arrangements (Note 9). |
Other Assets - Schedule of Ot_2
Other Assets - Schedule of Other Assets (Descriptors) (Detail) - USD ($) $ in Millions | Sep. 30, 2019 | Mar. 31, 2019 |
Other Assets [Abstract] | ||
Software, accumulated amortization | $ 159 | $ 154 |
Property and equipment, accumulated depreciation | $ 22 | $ 21 |
Other Assets - Narrative (Detai
Other Assets - Narrative (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Other Assets [Line Items] | ||||
Depreciation and amortization expense | $ 2,827 | $ 2,736 | ||
Minimum | ||||
Other Assets [Line Items] | ||||
Assets estimated useful life | 3 years | |||
Maximum | ||||
Other Assets [Line Items] | ||||
Assets estimated useful life | 5 years | |||
General and administrative expenses | ||||
Other Assets [Line Items] | ||||
Depreciation and amortization expense | $ 3 | $ 3 | $ 6 | $ 6 |
Other Liabilities - Components
Other Liabilities - Components of Other Liabilities (Detail) - USD ($) $ in Millions | Sep. 30, 2019 | Mar. 31, 2019 |
Dealer payables | $ 159 | $ 241 |
Accounts payable and accrued expenses | 413 | 399 |
Lease security deposits | 88 | 85 |
Unearned income, operating leases | 361 | 352 |
Operating lease liabilities | 59 | 0 |
Uncertain tax positions | 122 | 89 |
Other liabilities | 21 | 14 |
Total | 1,602 | 1,567 |
Affiliated Entity | ||
VSC unearned administrative fees | $ 379 | $ 387 |
Other Income, net - Components
Other Income, net - Components of Other Income (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Other, net | $ (5) | $ (10) | $ (12) | $ (22) |
Total | 23 | 17 | 43 | 32 |
Affiliated Entity | ||||
VSC administration (Note 6) | $ 28 | $ 27 | $ 55 | $ 54 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Fair Value Hierarchy of Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Millions | Sep. 30, 2019 | Mar. 31, 2019 |
Derivative instruments: | ||
Assets: | $ 390 | $ 380 |
Liabilities: | 565 | 568 |
Interest rate swaps | ||
Derivative instruments: | ||
Assets: | 345 | 308 |
Liabilities: | 413 | 307 |
Cross currency swaps | ||
Derivative instruments: | ||
Assets: | 45 | 72 |
Liabilities: | 152 | 261 |
Level 1 | ||
Derivative instruments: | ||
Assets: | 0 | 0 |
Liabilities: | 0 | 0 |
Level 1 | Interest rate swaps | ||
Derivative instruments: | ||
Assets: | 0 | 0 |
Liabilities: | 0 | 0 |
Level 1 | Cross currency swaps | ||
Derivative instruments: | ||
Assets: | 0 | 0 |
Liabilities: | 0 | 0 |
Level 2 | ||
Derivative instruments: | ||
Assets: | 390 | 380 |
Liabilities: | 565 | 568 |
Level 2 | Interest rate swaps | ||
Derivative instruments: | ||
Assets: | 345 | 308 |
Liabilities: | 413 | 307 |
Level 2 | Cross currency swaps | ||
Derivative instruments: | ||
Assets: | 45 | 72 |
Liabilities: | 152 | 261 |
Level 3 | ||
Derivative instruments: | ||
Assets: | 0 | 0 |
Liabilities: | 0 | 0 |
Level 3 | Interest rate swaps | ||
Derivative instruments: | ||
Assets: | 0 | 0 |
Liabilities: | 0 | 0 |
Level 3 | Cross currency swaps | ||
Derivative instruments: | ||
Assets: | 0 | 0 |
Liabilities: | $ 0 | $ 0 |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Nonrecurring Fair Value Measurements (Detail) - USD ($) $ in Millions | Sep. 30, 2019 | Sep. 30, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Vehicles held for disposition | $ 121 | $ 104 |
Lower-of-cost or fair value adjustment | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Vehicles held for disposition | 27 | 22 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Vehicles held for disposition | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Vehicles held for disposition | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Vehicles held for disposition | $ 121 | $ 104 |
Fair Value Measurements - Sum_3
Fair Value Measurements - Summary of Carrying Values and Fair Values of Financial Instruments Except for those Measured at Fair Value on a Recurring Basis (Detail) - USD ($) $ in Millions | Sep. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | ||
Assets: | |||||
Cash and cash equivalents | $ 808 | $ 795 | $ 787 | ||
Dealer loans, net | 4,983 | 5,827 | |||
Retail loans, net | 35,238 | 34,569 | |||
Restricted cash | 606 | [1] | 588 | $ 524 | [1] |
Liabilities: | |||||
Commercial paper | 5,517 | 5,755 | |||
Related party debt | 755 | 749 | |||
Bank loans | 4,972 | 4,962 | |||
Medium term note programs | 26,363 | 25,984 | |||
Other debt | 3,467 | 3,514 | |||
Secured debt | |||||
Liabilities: | |||||
Secured debt | 8,934 | 8,790 | |||
Fair value | |||||
Assets: | |||||
Cash and cash equivalents | 808 | 795 | |||
Dealer loans, net | 4,768 | 5,611 | |||
Retail loans, net | 35,778 | 34,857 | |||
Restricted cash | 606 | 588 | |||
Liabilities: | |||||
Commercial paper | 5,517 | 5,755 | |||
Related party debt | 755 | 749 | |||
Bank loans | 4,999 | 5,000 | |||
Medium term note programs | 26,736 | 26,130 | |||
Other debt | 3,516 | 3,535 | |||
Secured debt | 8,992 | 8,799 | |||
Fair value | Level 1 | |||||
Assets: | |||||
Cash and cash equivalents | 808 | 795 | |||
Dealer loans, net | 0 | 0 | |||
Retail loans, net | 0 | 0 | |||
Restricted cash | 606 | 588 | |||
Liabilities: | |||||
Commercial paper | 0 | 0 | |||
Related party debt | 0 | 0 | |||
Bank loans | 0 | 0 | |||
Medium term note programs | 0 | 0 | |||
Other debt | 0 | 0 | |||
Secured debt | 0 | 0 | |||
Fair value | Level 2 | |||||
Assets: | |||||
Cash and cash equivalents | 0 | 0 | |||
Dealer loans, net | 0 | 0 | |||
Retail loans, net | 0 | 0 | |||
Restricted cash | 0 | 0 | |||
Liabilities: | |||||
Commercial paper | 5,517 | 5,755 | |||
Related party debt | 755 | 749 | |||
Bank loans | 4,999 | 5,000 | |||
Medium term note programs | 26,736 | 26,130 | |||
Other debt | 3,516 | 3,535 | |||
Secured debt | 8,992 | 8,799 | |||
Fair value | Level 3 | |||||
Assets: | |||||
Cash and cash equivalents | 0 | 0 | |||
Dealer loans, net | 4,768 | 5,611 | |||
Retail loans, net | 35,778 | 34,857 | |||
Restricted cash | 0 | 0 | |||
Liabilities: | |||||
Commercial paper | 0 | 0 | |||
Related party debt | 0 | 0 | |||
Bank loans | 0 | 0 | |||
Medium term note programs | 0 | 0 | |||
Other debt | 0 | 0 | |||
Secured debt | $ 0 | $ 0 | |||
[1] | Restricted cash balances relate primarily to securitization arrangements (Note 9). |
Segment Information - Financial
Segment Information - Financial Information for Reportable Segments (Detail) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)reportable_segment | Sep. 30, 2018USD ($) | Mar. 31, 2019USD ($) | |
Number of reportable segments | |||||
Number of reportable segments | reportable_segment | 2 | ||||
Revenues: | |||||
Retail | $ 443 | $ 401 | $ 876 | $ 777 | |
Dealer | 57 | 55 | 122 | 110 | |
Operating leases | 1,935 | 1,796 | 3,830 | 3,565 | |
Total revenues | 2,435 | 2,252 | 4,828 | 4,452 | |
Leased vehicle expenses | 1,409 | 1,314 | 2,801 | 2,642 | |
Interest expense | 318 | 293 | 640 | 567 | |
Realized (gains)/losses on derivatives and foreign currency denominated debt | 0 | 0 | 0 | 0 | |
Net revenues | 708 | 645 | 1,387 | 1,243 | |
Other income, net | 23 | 17 | 43 | 32 | |
Total net revenues | 731 | 662 | 1,430 | 1,275 | |
Expenses: | |||||
General and administrative expenses | 124 | 119 | 245 | 229 | |
Provision for credit losses | 58 | 62 | 106 | 106 | |
Early termination loss on operating leases | 36 | 39 | 60 | 56 | |
(Gain)/Loss on derivative instruments | 174 | 47 | 205 | 310 | |
(Gain)/Loss on foreign currency revaluation of debt | (184) | (27) | (146) | (274) | |
Income before income taxes | 523 | 422 | 960 | 848 | |
Assets | |||||
Finance receivables, net | 40,223 | 39,133 | 40,223 | 39,133 | $ 40,424 |
Investment in operating leases, net | 33,770 | 32,318 | 33,770 | 32,318 | 32,606 |
Total assets | 76,980 | 74,253 | 76,980 | 74,253 | $ 75,964 |
Valuation adjustments and reclassifications | |||||
Revenues: | |||||
Retail | 0 | 0 | 0 | 0 | |
Dealer | 0 | 0 | 0 | 0 | |
Operating leases | 0 | 0 | 0 | 0 | |
Total revenues | 0 | 0 | 0 | 0 | |
Leased vehicle expenses | 0 | 0 | 0 | 0 | |
Interest expense | 0 | 0 | 0 | 0 | |
Realized (gains)/losses on derivatives and foreign currency denominated debt | (22) | 2 | (35) | 7 | |
Net revenues | 22 | (2) | 35 | (7) | |
Other income, net | 0 | 0 | 0 | 0 | |
Total net revenues | 22 | (2) | 35 | (7) | |
Expenses: | |||||
General and administrative expenses | 0 | 0 | 0 | 0 | |
Provision for credit losses | 0 | 0 | 0 | 0 | |
Early termination loss on operating leases | 0 | 0 | 0 | 0 | |
(Gain)/Loss on derivative instruments | 174 | 47 | 205 | 310 | |
(Gain)/Loss on foreign currency revaluation of debt | (184) | (27) | (146) | (274) | |
Income before income taxes | 32 | (22) | (24) | (43) | |
Assets | |||||
Finance receivables, net | 0 | 0 | 0 | 0 | |
Investment in operating leases, net | 0 | 0 | 0 | 0 | |
Total assets | 0 | 0 | 0 | 0 | |
United States | Operating Segments | |||||
Revenues: | |||||
Retail | 390 | 348 | 772 | 672 | |
Dealer | 51 | 50 | 110 | 100 | |
Operating leases | 1,595 | 1,485 | 3,160 | 2,953 | |
Total revenues | 2,036 | 1,883 | 4,042 | 3,725 | |
Leased vehicle expenses | 1,152 | 1,073 | 2,294 | 2,168 | |
Interest expense | 273 | 250 | 550 | 484 | |
Realized (gains)/losses on derivatives and foreign currency denominated debt | 23 | 2 | 38 | 0 | |
Net revenues | 588 | 558 | 1,160 | 1,073 | |
Other income, net | 20 | 14 | 37 | 27 | |
Total net revenues | 608 | 572 | 1,197 | 1,100 | |
Expenses: | |||||
General and administrative expenses | 109 | 106 | 215 | 202 | |
Provision for credit losses | 56 | 60 | 104 | 102 | |
Early termination loss on operating leases | 36 | 38 | 59 | 54 | |
(Gain)/Loss on derivative instruments | 0 | 0 | 0 | 0 | |
(Gain)/Loss on foreign currency revaluation of debt | 0 | 0 | 0 | 0 | |
Income before income taxes | 407 | 368 | 819 | 742 | |
Assets | |||||
Finance receivables, net | 35,737 | 34,546 | 35,737 | 34,546 | |
Investment in operating leases, net | 28,407 | 27,127 | 28,407 | 27,127 | |
Total assets | 66,960 | 64,250 | 66,960 | 64,250 | |
Canada | Operating Segments | |||||
Revenues: | |||||
Retail | 53 | 53 | 104 | 105 | |
Dealer | 6 | 5 | 12 | 10 | |
Operating leases | 340 | 311 | 670 | 612 | |
Total revenues | 399 | 369 | 786 | 727 | |
Leased vehicle expenses | 257 | 241 | 507 | 474 | |
Interest expense | 45 | 43 | 90 | 83 | |
Realized (gains)/losses on derivatives and foreign currency denominated debt | (1) | (4) | (3) | (7) | |
Net revenues | 98 | 89 | 192 | 177 | |
Other income, net | 3 | 3 | 6 | 5 | |
Total net revenues | 101 | 92 | 198 | 182 | |
Expenses: | |||||
General and administrative expenses | 15 | 13 | 30 | 27 | |
Provision for credit losses | 2 | 2 | 2 | 4 | |
Early termination loss on operating leases | 0 | 1 | 1 | 2 | |
(Gain)/Loss on derivative instruments | 0 | 0 | 0 | 0 | |
(Gain)/Loss on foreign currency revaluation of debt | 0 | 0 | 0 | 0 | |
Income before income taxes | 84 | 76 | 165 | 149 | |
Assets | |||||
Finance receivables, net | 4,486 | 4,587 | 4,486 | 4,587 | |
Investment in operating leases, net | 5,363 | 5,191 | 5,363 | 5,191 | |
Total assets | $ 10,020 | $ 10,003 | $ 10,020 | $ 10,003 |