Toyota Motor Credit Earnings 2019-12-31

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

10-Q 1 tmcc-10q_20191231.htm 10-Q tmcc-10q_20191231.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2019

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________

Commission File Number 1-9961

TOYOTA MOTOR CREDIT CORPORATION

(Exact name of registrant as specified in its charter)

California		95-3775816
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

6565 Headquarters Drive Plano, Texas		75024
(Address of principal executive offices)		(Zip Code)

Registrant's telephone number, including area code: (469) 486-9300

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Medium-Term Notes, Series B

Stated Maturity Date January 11, 2028

TM/28

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of January 31, 2020, the number of outstanding shares of capital stock, no par value per share, of the registrant was 91,500, all of which shares were held by Toyota Financial Services International Corporation.

Reduced Disclosure Format

The registrant meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this Form with the reduced disclosure format.

TOYOTA MOTOR CREDIT CORPORATION

FORM 10-Q

For the quarter ended December 31, 2019

INDEX
PART I	3
Item 1. Financial Statements	3
Consolidated Statements of Income	3
Consolidated Statements of Comprehensive Income	3
Consolidated Balance Sheets	4
Consolidated Statements of Shareholder’s Equity	5
Consolidated Statements of Cash Flows	6
Notes to Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	44
Item 3. Quantitative and Qualitative Disclosures About Market Risk	69
Item 4. Controls and Procedures	69
PART II	70
Item 1. Legal Proceedings	70
Item 1A. Risk Factors	70
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	70
Item 3. Defaults Upon Senior Securities	70
Item 4. Mine Safety Disclosures	70
Item 5. Other Information	70
Item 6. Exhibits	71
Signatures	73

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

TOYOTA MOTOR CREDIT CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in millions)

(Unaudited)

	Three Months Ended				Nine Months Ended
	December 31,				December 31,
	2019		2018		2019		2018
Financing revenues:
Operating lease	$	2,212	$	2,212	$	6,593	$	6,505
Retail		661		578		1,888		1,660
Dealer		171		178		544		529
Total financing revenues		3,044		2,968		9,025		8,694
Depreciation on operating leases		1,712		1,717		4,920		5,145
Interest expense		755		699		2,065		2,083
Net financing revenues		577		552		2,040		1,466

Insurance earned premiums and contract revenues		231		226		692		676
Investment and other income, net		57		68		272		164
Net financing revenues and other revenues		865		846		3,004		2,306

Expenses:
Provision for credit losses		128		110		264		266
Operating and administrative		406		347		1,101		1,019
Insurance losses and loss adjustment expenses		116		106		344		343
Total expenses		650		563		1,709		1,628

Income before income taxes		215		283		1,295		678
Provision for income taxes		34		69		296		178

Net income	$	181	$	214	$	999	$	500

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in millions)

(Unaudited)

	Three Months Ended					Nine Months Ended
	December 31,					December 31,
	2019			2018		2019			2018
Net income	$	181		$	214	$	999		$	500
Other comprehensive income (loss), net of tax:
Net unrealized (losses) gains on available-for-sale marketable securities [net of tax benefit (provision) of $1, ($2), ($4) and ($3), respectively]		(2	)		4		14			1
Reclassification adjustment for net (gains) losses on available-for-sale marketable securities included in investment and other income, net [net of tax provision (benefit) of $1, ($3), $1 and ($3), respectively]		(1	)		8		(2	)		9
Other comprehensive (loss) income		(3	)		12		12			10
Comprehensive income	$	178		$	226	$	1,011		$	510

Refer to the accompanying Notes to Consolidated Financial Statements.

TOYOTA MOTOR CREDIT CORPORATION

CONSOLIDATED BALANCE SHEETS

(Dollars in millions except share data)

(Unaudited)

	December 31,		March 31,
	2019		2019
ASSETS
Cash and cash equivalents	$	4,832	$	2,198
Restricted cash and cash equivalents		940		985
Investments in marketable securities		3,627		2,908
Finance receivables, net		73,450		70,517
Investments in operating leases, net		37,403		37,927
Other assets		2,355		1,981
Total assets	$	122,607	$	116,516

LIABILITIES AND SHAREHOLDER’S EQUITY
Debt	$	97,534	$	92,922
Deferred income taxes		5,656		5,452
Other liabilities		4,828		4,564
Total liabilities		108,018		102,938

Commitments and contingencies (Refer to Note 9)

Shareholder’s equity:
Capital stock, no par value (100,000 shares authorized; 91,500 issued and outstanding) at December 31, 2019 and March 31, 2019		915		915
Additional paid-in capital		2		2
Accumulated other comprehensive income		15		3
Retained earnings		13,657		12,658
Total shareholder's equity		14,589		13,578
Total liabilities and shareholder's equity	$	122,607	$	116,516

The following table presents the assets and liabilities of our consolidated variable interest entities (Refer to Note 8).

	December 31,		March 31,
	2019		2019
ASSETS
Finance receivables, net	$	12,352	$	11,075
Investments in operating leases, net		4,248		5,307
Other assets		121		192
Total assets	$	16,721	$	16,574

LIABILITIES
Debt	$	13,344	$	12,401
Other liabilities		12		12
Total liabilities	$	13,356	$	12,413

Refer to the accompanying Notes to Consolidated Financial Statements.

TOYOTA MOTOR CREDIT CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDER’S EQUITY

(Dollars in millions)

(Unaudited)

	Three Months Ended December 31, 2018
					Accumulated
			Additional		other
	Capital		paid-in		comprehensive			Retained
	stock		capital		(loss) income			earnings			Total
Balance at September 30, 2018	$	915	$	2	$	(19	)	$	12,156		$	13,054

Net income		-		-		-			214			214
Other comprehensive income, net of tax		-		-		12			-			12
Balance at December 31, 2018	$	915	$	2	$	(7	)	$	12,370		$	13,280


	Nine Months Ended December 31, 2018
					Accumulated
			Additional		other
	Capital		paid-in		comprehensive			Retained
	stock		capital		(loss) income			earnings			Total
Balance at March 31, 2018	$	915	$	2	$	(29	)	$	11,992		$	12,880

Cumulative-effect of change in accounting policy		-		-		12			(122	)		(110	)
Net income		-		-		-			500			500
Other comprehensive income, net of tax		-		-		10			-			10
Balance at December 31, 2018	$	915	$	2	$	(7	)	$	12,370		$	13,280

	Three Months Ended December 31, 2019
					Accumulated
			Additional		other
	Capital		paid-in		comprehensive			Retained
	stock		capital		income (loss)			earnings		Total
Balance at September 30, 2019	$	915	$	2	$	18		$	13,476	$	14,411

Net income		-		-		-			181		181
Other comprehensive loss, net of tax		-		-		(3	)		-		(3	)
Balance at December 31, 2019	$	915	$	2	$	15		$	13,657	$	14,589


	Nine Months Ended December 31, 2019
					Accumulated
			Additional		other
	Capital		paid-in		comprehensive			Retained
	stock		capital		income			earnings		Total
Balance at March 31, 2019	$	915	$	2	$	3		$	12,658	$	13,578

Net income		-		-		-			999		999
Other comprehensive income, net of tax		-		-		12			-		12
Balance at December 31, 2019	$	915	$	2	$	15		$	13,657	$	14,589

Refer to the accompanying Notes to Consolidated Financial Statements.

TOYOTA MOTOR CREDIT CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in millions)

(Unaudited)

	Nine Months Ended December 31,
	2019			2018
Cash flows from operating activities:
Net income	$	999		$	500
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		5,003			5,217
Recognition of deferred income		(1,861	)		(1,747	)
Provision for credit losses		264			266
Amortization of deferred costs		525			464
Foreign currency and other adjustments to the carrying value of debt, net		151			(867	)
Net (gains) losses from investments in marketable securities		(54	)		60
Net change in:
Derivative assets		6			4
Other assets and accrued interest		(245	)		(49	)
Deferred income taxes		201			163
Derivative liabilities		(24	)		(3	)
Other liabilities		92			245
Net cash provided by operating activities		5,057			4,253

Cash flows from investing activities:
Purchase of investments in marketable securities		(1,402	)		(1,094	)
Proceeds from sales of investments in marketable securities		232			1,708
Proceeds from maturities of investments in marketable securities		520			2,265
Acquisition of finance receivables		(22,807	)		(18,433	)
Collection of finance receivables		19,102			18,050
Net change in wholesale and certain working capital receivables		782			610
Acquisition of investments in operating leases		(12,243	)		(12,604	)
Disposals of investments in operating leases		9,060			8,526
Long term loans to affiliates		(200	)		(569	)
Payments on long term loans from affiliates		19			29
Other, net		(26	)		(32	)
Net cash used in investing activities		(6,963	)		(1,544	)

Cash flows from financing activities:
Proceeds from issuance of debt		17,830			16,906
Payments on debt		(15,778	)		(16,954	)
Net change in commercial paper		2,410			(1,509	)
Net change in financing support provided by affiliates		43			-
Dividend paid		(10	)

Price	-0.00	EPS	14,503
Shares	0	P/E	-0
MCap	-0	P/FCF	-0
Net Debt	-3,605	EBIT	4,343
TEV	-3,605	TEV/EBIT	-1
TTM 2019-09-30, in MM, except price, ratios

10-Q	2019-12-31	Filed 2020-02-07
10-Q	2019-09-30	Filed 2019-11-07
10-Q	2019-06-30	Filed 2019-08-02
10-K	2019-03-31	Filed 2019-06-04
10-Q	2018-12-31	Filed 2019-02-07
10-Q	2018-09-30	Filed 2018-11-07
10-Q	2018-06-30	Filed 2018-08-07
10-K	2018-03-31	Filed 2018-06-04
10-Q	2017-12-31	Filed 2018-02-13
10-Q	2017-09-30	Filed 2017-11-08
10-Q	2017-06-30	Filed 2017-08-07
10-K	2017-03-31	Filed 2017-06-01
10-Q	2016-12-31	Filed 2017-02-08
10-Q	2016-09-30	Filed 2016-11-09
10-Q	2016-06-30	Filed 2016-08-10
10-K	2016-03-31	Filed 2016-06-02
10-Q	2015-12-31	Filed 2016-02-10
10-Q	2015-09-30	Filed 2015-11-05
10-Q	2015-06-30	Filed 2015-08-06
10-K	2015-03-31	Filed 2015-06-02
10-Q	2014-12-31	Filed 2015-02-06
10-Q	2014-09-30	Filed 2014-11-14
10-Q	2014-06-30	Filed 2014-08-12
10-K	2014-03-31	Filed 2014-05-29
10-Q	2013-12-31	Filed 2014-02-12
10-Q	2013-09-30	Filed 2013-11-12
10-Q	2013-06-30	Filed 2013-08-12
10-K	2013-03-31	Filed 2013-06-14
10-Q	2012-12-31	Filed 2013-02-14
10-Q	2012-09-30	Filed 2012-11-07
10-Q	2012-06-30	Filed 2012-08-08
10-K	2012-03-31	Filed 2012-06-06
10-Q	2011-12-31	Filed 2012-02-08
10-Q	2011-09-30	Filed 2011-11-09
10-Q	2011-06-30	Filed 2011-08-10
10-K	2011-03-31	Filed 2011-06-02
10-Q	2010-12-31	Filed 2011-02-10
10-Q	2010-09-30	Filed 2010-11-05
10-Q	2010-06-30	Filed 2010-08-04
10-K	2010-03-31	Filed 2010-06-10
10-Q	2009-12-31	Filed 2010-02-05

8-K	2020-05-19	Earnings, Other Events
8-K	2020-05-14	Exhibits
8-K	2020-05-11	Other Events
8-K	2020-03-27	Other Events
8-K	2020-02-21	Regulation FD, Exhibits
8-K	2019-11-22	Regulation FD, Exhibits
8-K	2019-11-21	Exhibits
8-K	2019-11-08	Enter Agreement, Leave Agreement, Off-BS Arrangement, Exhibits
8-K	2019-09-13	Enter Agreement, Off-BS Arrangement, Other Events, Exhibits
8-K	2019-08-28	Other Events
8-K	2019-08-16	Regulation FD, Exhibits
8-K	2019-06-21	Exhibits
8-K	2019-06-19	Regulation FD, Exhibits
8-K	2019-06-10	Regulation FD, Exhibits
8-K	2019-05-24	Regulation FD, Exhibits
8-K	2019-04-16	Other Events
8-K	2019-04-02	Other Events, Exhibits
8-K	2019-02-22	Regulation FD, Exhibits
8-K	2018-12-17	Enter Agreement, Off-BS Arrangement, Regulation FD, Exhibits
8-K	2018-11-09	Enter Agreement, Leave Agreement, Off-BS Arrangement, Exhibits
8-K	2018-09-14	Enter Agreement, Off-BS Arrangement, Exhibits
8-K	2018-08-21	Regulation FD, Exhibits
8-K	2018-08-06	Other Events, Exhibits
8-K	2018-06-27	Regulation FD, Exhibits
8-K	2018-06-18	Exhibits
8-K	2018-05-24	Regulation FD, Exhibits
8-K	2018-05-15	Regulation FD, Exhibits
8-K	2018-05-01	Other Events
8-K	2018-03-19	Regulation FD, Exhibits
8-K	2018-03-07	Other Events
8-K	2018-02-23	Regulation FD, Exhibits
8-K	2018-01-25	Exhibits

EX-31.1	tmcc-ex311_7.htm
EX-31.2	tmcc-ex312_9.htm
EX-32.1	tmcc-ex321_6.htm
EX-32.2	tmcc-ex322_8.htm

TMCC 10Q Quarterly Report

Toyota Motor Credit Earnings 2019-12-31