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.

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~~July 31, 2022, 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.

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.

	Three months ended				Nine months ended				Three months ended
	December 31,				December 31,				June 30,
	2021		2020		2021		2020		2022			2021
Financing revenues:
Operating lease	$	2,081	$	2,122	$	6,329	$	6,365	$	1,900		$	2,120
Retail		830		749		2,442		2,144		845			791
Dealer		80		103		251		312		86			88
Total financing revenues		2,991		2,974		9,022		8,821		2,831			2,999
Depreciation on operating leases		1,460		1,450		4,400		4,484		1,409			1,441
Interest expense		346		491		1,055		1,534		563			286
Net financing revenues		1,185		1,033		3,567		2,803		859			1,272

Voluntary protection contract revenues and insurance earned premiums		255		241		758		714		259			249
Investment and other income, net		76		179		239		445
Investment and other (loss) income, net										(306	)		156
Net financing revenues and other revenues		1,516		1,453		4,564		3,962		812			1,677

Expenses:
Provision for credit losses		45		118		110		366		78			(3	)
Operating and administrative		394		354		1,163		1,088		406			384
Voluntary protection contract expenses and insurance losses		96		98		303		265		107			108
Total expenses		535		570		1,576		1,719		591			489

Income before income taxes		981		883		2,988		2,243		221			1,188
Provision for income taxes		233		215		697		546		51			267

Net income	$	748	$	668	$	2,291	$	1,697	$	170		$	921

	Three months ended						Nine months ended						Three months ended
	December 31,						December 31,						June 30,
	2021			2020			2021			2020			2022			2021
Net income	$	748		$	668		$	2,291		$	1,697		$	170		$	921
Other comprehensive income, net of tax
Net unrealized (losses) gains on available-for-sale marketable securities [net of tax benefit (provision) of $1, $0, ($1) and ($6), respectively]		(3	)		2			4			26
Reclassification adjustment for net gains on available-for-sale marketable securities included in investment and other income, net [net of tax provision of $0, $0, $0 and $4, respectively]		(1	)		(2	)		(1	)		(15	)
Net unrealized (losses) gains on available-for-sale marketable securities [net of tax benefit (provision) of $7 and ($3), respectively]														(26	)		9
Other comprehensive (loss) income		(4	)		0			3			11			(26	)		9
Comprehensive income	$	744		$	668		$	2,294		$	1,708		$	144		$	930

	December 31,		March 31,		June 30,			March 31,
	2021		2021		2022			2022
ASSETS
Cash and cash equivalents	$	8,431	$	8,195	$	8,717		$	7,670
Restricted cash and cash equivalents		2,372		1,957		1,849			2,065
Investments in marketable securities		5,121		4,820		4,571			4,953
Finance receivables, net of allowance for credit losses of $1,185 and $1,178		80,925		79,192
Finance receivables, net of allowance for credit losses of $1,248 and $1,246						84,822			82,432
Investments in operating leases, net		36,836		37,091		33,703			35,455
Other assets		2,450		2,473		2,470			2,466
Total assets	$	136,135	$	133,728	$	136,132		$	135,041

LIABILITIES AND SHAREHOLDER’S EQUITY
Debt	$	110,122	$	109,725	$	110,423		$	109,152
Deferred income taxes		2,399		2,860		1,403			1,564
Other liabilities		5,725		5,548		6,061			6,224
Total liabilities		118,246		118,133		117,887			116,940

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, 2021 and March 31, 2021		915		915
Capital stock, no par value (100,000 shares authorized; 91,500 issued and outstanding) at June 30, 2022 and March 31, 2022						915			915
Additional paid-in capital		2		2		2			2
Accumulated other comprehensive income		11		8
Accumulated other comprehensive loss						(47	)		(21	)
Retained earnings		16,961		14,670		17,375			17,205
Total shareholder's equity		17,889		15,595		18,245			18,101
Total liabilities and shareholder's equity	$	136,135	$	133,728	$	136,132		$	135,041

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

	December 31,		March 31,		June 30,		March 31,
	2021		2021		2022		2022
ASSETS
Finance receivables, net	$	21,637	$	21,745	$	24,009	$	20,932
Investments in operating leases, net		12,434		6,599		11,358		11,886
Other assets		73		89		71		66
Total assets	$	34,144	$	28,433	$	35,438	$	32,884

LIABILITIES
Debt	$	28,068	$	24,212	$	28,882	$	26,864
Other liabilities		10		14		14		10
Total liabilities	$	28,078	$	24,226	$	28,896	$	26,874

Three months ended December 31, 2020

Accumulated

Additional

other

Capital

paid-in

comprehensive

Retained

stock

capital

income

earnings

Total

Balance at September 30, 2020

$
915

$
2

$
26

$
14,382

$
15,325

Net income

0

0

0

668

668

Other comprehensive loss, net of tax

0

0

0

0

0

Balance at December 31, 2020

$
915

$
2

$
26

$
15,050

$
15,993

Nine months ended December 31, 2020

Accumulated

Additional

other

Capital

paid-in

comprehensive

Retained

stock

capital

income

earnings

Total

Balance at March 31, 2020

$
915

$
2

$
15

$
13,571

$
14,503

Cumulative-effect of adoption of ASU 2016-13

-

-

-

(218
)

(218
)
Net income

0

0

0

1,697

1,697

Other comprehensive income, net of tax

0

0

11

0

11

Balance at December 31, 2020

$
915

$
2

$
26

$
15,050

$
15,993

	Three months ended June 30, 2021
					Accumulated
			Additional		other
	Capital		paid-in		comprehensive		Retained
	stock		capital		income		earnings		Total
Balance at March 31, 2021	$	915	$	2	$	8	$	14,670	$	15,595

Net income		0		0		0		921		921
Other comprehensive income, net of tax		0		0		9		0		9
Balance at June 30, 2021	$	915	$	2	$	17	$	15,591	$	16,525

Three months ended December 31, 2021

Accumulated

Additional

other

Capital

paid-in

comprehensive

Retained

stock

capital

income (loss)

earnings

Total

Balance at September 30, 2021

$
915

$
2

$
15

$
16,213

$
17,145

Net income

0

0

0

748

748

Other comprehensive loss, net of tax

0

0

(4
)

0

(4
)
Balance at December 31, 2021

$
915

$
2

$
11

$
16,961

$
17,889

Nine months ended December 31, 2021

Accumulated

Additional

other

Capital

paid-in

comprehensive

Retained

stock

capital

income

earnings

Total

Balance at March 31, 2021

$
915

$
2

$
8

$
14,670

$
15,595

Net income

0

0

0

2,291

2,291

Other comprehensive income, net of tax

0

0

3

0

3

Balance at December 31, 2021

$
915

$
2

$
11

$
16,961

$
17,889

	Three months ended June 30, 2022
					Accumulated
			Additional		other
	Capital		paid-in		comprehensive			Retained
	stock		capital		loss			earnings		Total
Balance at March 31, 2022	$	915	$	2	$	(21	)	$	17,205	$	18,101

Net income		0		0		0			170		170
Other comprehensive loss, net of tax		0		0		(26	)		0		(26	)
Balance at June 30, 2022	$	915	$	2	$	(47	)	$	17,375	$	18,245

	Nine months ended December 31,						Three months ended June 30,
	2021			2020			2022			2021
Cash flows from operating activities:
Net income	$	2,291		$	1,697		$	170		$	921
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		4,489			4,572			1,432			1,471
Recognition of deferred income		(1,841	)		(1,864	)		(505	)		(631	)
Provision for credit losses		110			366			78			(3	)
Amortization of deferred costs		743			572			264			238
Foreign currency and other adjustments to the carrying value of financial instruments, net		(164	)		1,806			(527	)		26
Net gains from investments in marketable securities		(108	)		(222	)
Net losses (gains) from investments in marketable securities								366			(115	)
Net change in:
Derivative assets		(9	)		(9	)		9			0
Other assets and accrued interest		(421	)		140			(150	)		(182	)
Deferred income taxes		(462	)		(1,797	)		(154	)		(225	)
Derivative liabilities		(1	)		(21	)		(25	)		15
Other liabilities		150			993			(128	)		509
Net cash provided by operating activities		4,777			6,233			830			2,024

Cash flows from investing activities:
Purchase of investments in marketable securities		(1,780	)		(1,862	)		(507	)		(614	)
Proceeds from sales of investments in marketable securities		1,284			405			475			509
Proceeds from maturities of investments in marketable securities		296			916			13			200
Acquisition of finance receivables		(30,681	)		(29,164	)		(10,790	)		(10,509	)
Collection of finance receivables		25,604			20,390			8,651			8,506
Net change in wholesale and certain working capital receivables		3,370			3,261			(368	)		2,775
Acquisition of investments in operating leases		(12,293	)		(11,777	)		(2,408	)		(5,248	)
Disposals of investments in operating leases		9,435			8,570			3,011			3,568
Long term loans to affiliates		(200	)		(200	)		0			(100	)
Payments on long term loans from affiliates		300			406			100			100
Net change in financing support provided to affiliates								26			0
Other, net		(39	)		(48	)		(18	)		(13	)
Net cash used in investing activities		(4,704	)		(9,103	)		(1,815	)		(826	)

Cash flows from financing activities:
Proceeds from issuance of debt		29,270			38,669			8,602			10,242
Payments on debt		(29,246	)		(21,909	)		(6,912	)		(11,074	)
Net change in commercial paper and other short-term financing		537			(7,334	)		118			214
Payment on loan from affiliate		0			(3,000	)
Net change in financing support provided by affiliates		17			(17	)		8			7
Net cash provided by financing activities		578			6,409
Net cash provided by (used in) financing activities								1,816			(611	)
Net increase in cash and cash equivalents and restricted cash and cash equivalents		651			3,539			831			587
Cash and cash equivalents and restricted cash and cash equivalents at the beginning of the period		10,152			8,529			9,735			10,152
Cash and cash equivalents and restricted cash and cash equivalents at the end of the period	$	10,803		$	12,068		$	10,566		$	10,739
Supplemental disclosures:
Interest paid, net	$	1,310		$	1,909		$	329		$	485
Income taxes paid, net	$	1,296		$	1,177		$	414		$	55

The information furnished in these unaudited interim consolidated financial statements as of and for the three ~~and nine~~ months ended ~~December 31,~~June 30, 2022 and 2021 ~~and 2020~~ has been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). In the opinion of management, the unaudited consolidated financial information reflects all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results for the interim periods presented. The results of operations for the three ~~and nine~~ months ended ~~December 31, 2021~~June 30, 2022, do not necessarily indicate the results which may be expected for the full fiscal year ending March 31, ~~2022~~2023 (“fiscal ~~2022”~~2023”).

These financial statements should be read in conjunction with the Consolidated Financial Statements and Notes to Consolidated Financial Statements included in Toyota Motor Credit Corporation’s Annual Report on Form 10-K (“Form 10-K”) for the fiscal year ended March 31, ~~2021~~2022 (“fiscal ~~2021”~~2022”), which was filed with the Securities and Exchange Commission on June 3, ~~2021.~~2022. References herein to “TMCC” denote Toyota Motor Credit Corporation, and references herein to “we”, “our”, and “us” denote Toyota Motor Credit Corporation and its consolidated subsidiaries.

In fiscal 2021, ~~TMCC began providing private label financial services~~we announced the restructuring of our customer service operations to ~~third-party automotive~~better serve our customers by relocating and ~~mobility companies commencing~~streamlining the customer service operation and investing in new technology. The restructuring is in progress, and we plan to complete the process of moving our three regional CSCs to be co-located with the ~~provision~~regional DSCs to become regional experience centers by the end of services to Mazda Motor of America, Inc. (“Mazda”). We are currently leveraging our existing processes and personnel to originate and service the new assets; however, we will continue to evaluate the private label financial services business, which includes partneringfiscal 2023. Costs associated with ~~or transitioning a portion of the business to our affiliates, some of which~~this restructure are not ~~consolidated with TMCC. We have also made certain technology investments~~expected to ~~support the Mazda program and future private label customers.~~be significant.

~~On November 19, 2021,~~In fiscal 2022, TMCC announced, in furtherance of its private label financial services initiative for third party automotive and mobility companies, that we entered into a nonbinding letter of intent with Great American Outdoors Group LLC, the parent company of Bass Pro Shops, Cabela’s and the White River Marine Group (“Bass Pro Shops”) to provide private label financial services for Bass Pro Shop’s boats, all-terrain vehicle products, and other mobility products. The Company ~~expects~~began to provide inventory financing for Bass Pro Shops, its affiliates, and authorized independent dealers ~~starting~~ in fiscal 2023, with additional private label services, including consumer financing and voluntary protection products and services, to be added over time. We are leveraging our existing processes and personnel to originate and service the new assets, and we expect to make certain technology investments to support the Bass Pro Shops program. We did not acquire any existing Bass Pro Shops assets or liabilities pursuant to the agreement, and we do not expect launch costs to be significant.

On April 1, ~~2021,~~2022, we adopted ~~the following new accounting standards:~~

~~We adopted Accounting Standards Update (“ASU”) 2020-04,~~ ~~Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,~~ along with the subsequently issued guidance, which provides temporary optional expedients and exceptions for applying generally accepted accounting principles to transactions affected by reference rate reform if certain criteria are met. The provisions of this update are available to us until December 31, 2022. The adoption of this guidance did not have a material impact on our consolidated financial statements and related disclosures.

~~We adopted ASU 2020-08,~~ ~~Codification Improvements to Subtopic 310-20, Receivables-Nonrefundable Fees and Other Costs~~, which requires an entity to reevaluate the amortization period for callable debt securities held at a premium each reporting period. The premium is amortized to the earliest call date of the debt security. The adoption of this guidance did not have a material impact on our consolidated financial statements and related disclosures.

~~In July 2021, the FASB issued~~ ASU 2021-05, Lessors-Certain Leases with Variable Lease Payments (Topic 842), which ~~modifies the lease classification for certain leases. Lessors should~~requires a lessor to classify and account for a lease with variable lease payments that do not depend on a reference index or rate as an operating lease if certain criteria are met. ~~This ASU is effective for us on April 1, 2022, with early application permitted.~~ The adoption of this guidance ~~will~~did not have a material impact on our consolidated financial statements and related disclosures.

In March 2022, the FASB issued ASU 2022-02, Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, which eliminates the accounting guidance for Troubled Debt Restructurings by creditors that have adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, while enhancing disclosure requirements for certain loan refinancing and restructurings made to borrowers experiencing financial difficulty. Additionally, the ASU adds the requirement to disclose current period gross write-offs by year of origination for financing receivables. This ASU is effective for us on April 1, 2023, with early application permitted. We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures.

Investments in marketable securities consist of debt securities and equity investments. We classify all of our debt securities as available-for-sale (“AFS”). Except when the fair value option is elected, AFS debt securities are recorded at fair value with unrealized gains or losses included in accumulated other comprehensive income (“AOCI”), net of applicable taxes. ~~All equity investments~~Realized gains and losses from sales of AFS debt securities are ~~recorded at fair value with changes~~determined using the specific identification method or first in ~~fair value~~first out method and are included in Investment and other income, net in our Consolidated Statements of Income.

~~In fiscal 2022, we have~~We elected the fair value option for certain debt securities held within one of our affiliate investment portfolios for operational ease given the size and composition of this portfolio. All debt securities within this specific portfolio are recorded at fair value with changes in fair value included in Investment and other (loss) income, net in our Consolidated Statements of Income. We estimate the fair value of these securities using observed transaction prices, independent third-party pricing valuation vendors, and internal valuation models. AFS debt securities for which fair value option is elected are not subject to credit loss impairment. As of ~~December~~June 30, 2022 and March 31, ~~2021,~~2022, we held AFS debt securities for which the fair value option was elected of ~~$703 million.~~$606 million and $674 million, respectively. The difference between the aggregate fair value and the aggregate unpaid principal balance of ~~long-term~~ AFS debt securities for which the fair value option was elected was ~~not significant.~~an unrealized loss of $76 million and $41 million as of June 30, 2022 and March 31, 2022, respectively.

All equity investments are recorded at fair value with changes in fair value included in Investment and other (loss) income, net in our Consolidated Statements of Income. Realized gains and losses from sales of equity investments are determined using the first in first out method and are included in Investment and other (loss) income, net in our Consolidated Statements of Income.

	December 31, 2021									June 30, 2022
	Amortized		Unrealized		Unrealized			Fair		Amortized		Unrealized		Unrealized			Fair
	cost		gains		losses			value		cost		gains		losses			value
Available-for-sale debt securities:
U.S. government and agency obligations	$	491	$	5	$	(6	)	$	490	$	574	$	1	$	(51	)	$	524
Foreign government and agency obligations		32		0		(1	)		31		19		0		(4	)		15
Municipal debt securities		9		2		0			11		9		1		(1	)		9
Commercial paper		25		0		0			25
Corporate debt securities		589		15		(3	)		601		551		1		(70	)		482
Mortgage-backed securities:
U.S. government agency		21		1		0			22		24		0		(1	)		23
Non-agency residential		11		0		0			11		10		0		(1	)		9
Non-agency commercial		75		2		(1	)		76		88		1		(6	)		83
Asset-backed securities		86		3		(1	)		88		78		0		(6	)		72
Total available-for-sale debt securities	$	1,339	$	28	$	(12	)	$	1,355	$	1,353	$	4	$	(140	)	$	1,217
Equity investments									3,766									3,354
Total investments in marketable securities								$	5,121								$	4,571

A portion of our equity investments are investments in funds that are privately placed and managed by an open-end investment management company (the “Trust”). If we elect to redeem shares, the Trust will normally redeem all shares for cash, but may, in unusual circumstances, redeem amounts exceeding the lesser of $250 thousand or 1 percent of the Trust’s asset value by payment in kind of securities held by the respective fund during any 90-day period.

We also invest in actively traded open-end mutual funds. Redemptions are subject to normal terms and conditions as described in each fund’s prospectus.

For the ~~nine~~three months ended ~~December 31, 2021,~~June 30, 2022, we had 0 non-cash investing activities related to in-kind redemptions. Non-cash investing activities related to in-kind redemptions and subsequent purchases amounted to $1.1 ~~billion. There were 0 non-cash investing activities related to in-kind redemptions~~billion for the three months ended ~~December 31,~~June 30, 2021.

~~Available-for-sale~~The continuous unrealized losses on AFS debt securities ~~in a continuous loss position for less than twelve months and~~ greater than twelve months were not significant as of ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021.~~2022, respectively.

An allowance for credit losses is established when it is determined that a credit loss has occurred. As of ~~December~~June 30, 2022 and March 31, ~~2021,~~2022, management determined that credit losses did not exist for securities in an unrealized loss position. This analysis considered a variety of factors including, but not limited to, performance indicators of the issuer, default rates, industry analyst reports, credit ratings, and other relevant information, which indicated that contractual cash flows are expected to occur.

The following table represents gains and losses on our investments in marketable securities presented in our Consolidated Statements of Income:

The amortized cost and fair value by contractual maturities of available-for-sale debt securities are summarized in the following table. Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay certain obligations.

	December 31, 2021				June 30, 2022
	Amortized cost		Fair value		Amortized cost		Fair value
Available-for-sale debt securities:
Due within 1 year	$	127	$	127	$	66	$	66
Due after 1 year through 5 years		372		375		364		345
Due after 5 years through 10 years		357		359		373		331
Due after 10 years		290		297		350		288
Mortgage-backed and asset-backed securities ¹		193		197		200		187
Total	$	1,339	$	1,355	$	1,353	$	1,217

Finance receivables, net consists of the retail loan and dealer products portfolio segments, and includes deferred origination costs, deferred income, and allowance for credit losses. Finance receivables, net also includes securitized retail receivables, which represent retail receivables that have been sold for legal purposes to securitization trusts but continue to be included in our consolidated financial statements, as discussed further in Note 8 – Variable Interest Entities. Cash flows from these securitized retail receivables are available only for the repayment of debt issued by these trusts and other obligations arising from the securitization transactions. They are not available for payment of our other obligations or to satisfy claims of our other creditors.

	December 31,			March 31,			June 30,			March 31,
	2021			2021			2022			2022
Retail receivables ¹	$	71,727		$	66,991		$	75,178		$	73,152
Dealer financing		10,254			13,642			10,583			10,298
		81,981			80,633			85,761			83,450

Deferred origination costs		1,305			1,145			1,364			1,330
Deferred income		(1,176	)		(1,408	)		(1,055	)		(1,102	)
Allowance for credit losses
Retail receivables		(1,140	)		(1,075	)		(1,209	)		(1,195	)
Dealer financing		(45	)		(103	)		(39	)		(51	)
Total allowance for credit losses		(1,185	)		(1,178	)		(1,248	)		(1,246	)
Finance receivables, net	$	80,925		$	79,192		$	84,822		$	82,432

Accrued interest related to finance receivables is presented in Other assets on the Consolidated Balance Sheets and was $226 million and $214 million ~~and $187 million~~ at ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021,~~2022, respectively.

We are exposed to credit risk on our finance receivables. Credit risk is the risk of loss arising from the failure of customers or dealers to meet the terms of their contracts with us or otherwise fail to perform as agreed.

The retail loan portfolio segment consists of one class of finance receivables. While we use various credit quality metrics to develop our allowance for credit losses on the retail loan portfolio segment, we primarily utilize the aging of the individual accounts to monitor the credit quality of these finance receivables. Based on our experience, the payment status of borrowers is the strongest indicator of the credit quality of the underlying receivables. Payment status also impacts charge-offs.

Individual borrower accounts within the retail loan portfolio segment are segregated into aging categories based on the number of days past due. The aging of finance receivables is updated monthly.

The following tables present the amortized cost basis of our retail loan portfolio by origination fiscal year by credit quality indicator based on number of days past due:

	Amortized Cost Basis by Origination Fiscal Year at December 31, 2021														Amortized Cost Basis by Origination Fiscal Year at June 30, 2022
	2022		2021		2020		2019		2018		2017 and Prior		Total		2023		2022		2021		2020		2019		2018 and Prior		Total
Aging of finance receivables:
Current	$	25,098	$	24,373	$	10,913	$	5,626	$	3,390	$	1,057	$	70,457	$	9,695	$	29,743	$	19,682	$	8,425	$	4,007	$	2,536	$	74,088
30-59 days past due		215		341		177		119		81		52		985		17		345		302		143		91		81		979
60-89 days past due		54		97		49		36		22		16		274		0		107		96		43		26		26		298
90 days or greater past due		29		51		23		15		11		11		140		0		45		37		16		11		13		122
Total	$	25,396	$	24,862	$	11,162	$	5,796	$	3,504	$	1,136	$	71,856	$	9,712	$	30,240	$	20,117	$	8,627	$	4,135	$	2,656	$	75,487

	Amortized Cost Basis by Origination Fiscal Year at March 31, 2021														Amortized Cost Basis by Origination Fiscal Year at March 31, 2022
	2021		2020		2019		2018		2017		2016 and Prior		Total		2022		2021		2020		2019		2018		2017 and Prior		Total
Aging of finance receivables:
Current	$	32,026	$	16,047	$	8,972	$	5,977	$	2,435	$	496	$	65,953	$	32,382	$	21,917	$	9,624	$	4,774	$	2,674	$	718	$	72,089
30-59 days past due		147		145		114		83		46		27		562		275		304		153		101		63		36		932
60-89 days past due		37		39		28		21		11		8		144		68		82		40		25		16		11		242
90 days or greater past due		18		18		13		9		5		6		69		33		39		17		13		8		7		117
Total	$	32,228	$	16,249	$	9,127	$	6,090	$	2,497	$	537	$	66,728	$	32,758	$	22,342	$	9,834	$	4,913	$	2,761	$	772	$	73,380

The amortized cost of retail loan portfolio excludes accrued interest of ~~$193~~$201 million and ~~$160~~$192 million at ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021~~,2022, respectively. The previous tables include contracts greater than 120 days past due, which are recorded at the fair value of collateral less estimated costs to sell, and contracts in bankruptcy.

The dealer products portfolio segment consists of three classes of finance receivables: wholesale, real estate and working capital. All loans outstanding for an individual dealer or dealer group, which includes affiliated entities, are aggregated and evaluated collectively by dealer or dealer group. This reflects the interconnected nature of financing provided to our individual dealer and dealer group customers, and their affiliated entities.

When assessing the credit quality of the finance receivables within the dealer products portfolio segment, we segregate the finance receivables account balances into four categories representing distinct credit quality indicators based on internal risk assessments. The internal risk assessments for all finance receivables within the dealer products portfolio segment are updated on a monthly basis.

The following tables present the amortized cost basis of our dealer products portfolio by credit quality indicator based on internal risk assessments by origination fiscal year:

	Amortized Cost Basis by Origination Fiscal Year at December 31, 2021																Amortized Cost Basis by Origination Fiscal Year at June 30, 2022
	2022		2021		2020		2019		2018		2017 and Prior		Revolving loans		Total		2023		2022		2021		2020		2019		2018 and Prior		Revolving loans		Total
Wholesale
Performing	$	0	$	0	$	0	$	0	$	0	$	0	$	2,852	$	2,852	$	0	$	0	$	0	$	0	$	0	$	0	$	2,979	$	2,979
Credit Watch		0		0		0		0		0		0		12		12		0		0		0		0		0		0		13		13
At Risk		0		0		0		0		0		0		2		2		0		0		0		0		0		0		0		0
Default		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0
Wholesale total	$	0	$	0	$	0	$	0	$	0	$	0	$	2,866	$	2,866	$	0	$	0	$	0	$	0	$	0	$	0	$	2,992	$	2,992
Real estate
Performing	$	1,164	$	1,316	$	280	$	568	$	292	$	1,434	$	0	$	5,054	$	270	$	1,522	$	1,217	$	256	$	378	$	1,303	$	35	$	4,981
Credit Watch		0		2		0		0		0		12		0		14		5		0		1		0		0		0		0		6
At Risk		0		0		0		0		0		8		0		8		0		0		0		0		0		0		0		0
Default		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0
Real estate total	$	1,164	$	1,318	$	280	$	568	$	292	$	1,454	$	0	$	5,076	$	275	$	1,522	$	1,218	$	256	$	378	$	1,303	$	35	$	4,987
Working Capital
Performing	$	519	$	368	$	216	$	162	$	40	$	183	$	823	$	2,311	$	58	$	643	$	289	$	182	$	148	$	200	$	1,084	$	2,604
Credit Watch		0		1		0		0		0		0		0		1		0		0		0		0		0		0		0		0
At Risk		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0
Default		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0
Working capital total	$	519	$	369	$	216	$	162	$	40	$	183	$	823	$	2,312	$	58	$	643	$	289	$	182	$	148	$	200	$	1,084	$	2,604
Total	$	1,683	$	1,687	$	496	$	730	$	332	$	1,637	$	3,689	$	10,254	$	333	$	2,165	$	1,507	$	438	$	526	$	1,503	$	4,111	$	10,583

	Amortized Cost Basis by Origination Fiscal Year at March 31, 2021																Amortized Cost Basis by Origination Fiscal Year at March 31, 2022
	2021		2020		2019		2018		2017		2016 and Prior		Revolving loans		Total		2022		2021		2020		2019		2018		2017 and Prior		Revolving loans		Total
Wholesale
Performing	$	0	$	0	$	0	$	0	$	0	$	0	$	5,893	$	5,893	$	0	$	0	$	0	$	0	$	0	$	0	$	2,927	$	2,927
Credit Watch		0		0		0		0		0		0		218		218		0		0		0		0		0		0		16		16
At Risk		0		0		0		0		0		0		35		35		0		0		0		0		0		0		0		0
Default		0		0		0		0		0		0		11		11		0		0		0		0		0		0		0		0
Wholesale total	$	0	$	0	$	0	$	0	$	0	$	0	$	6,157	$	6,157	$	0	$	0	$	0	$	0	$	0	$	0	$	2,943	$	2,943
Real estate
Performing	$	1,874	$	320	$	596	$	356	$	312	$	1,493	$	0	$	4,951	$	1,614	$	1,245	$	264	$	384	$	260	$	1,245	$	0	$	5,012
Credit Watch		8		49		3		20		9		99		0		188		2		0		0		0		0		5		0		7
At Risk		13		0		0		0		12		17		0		42		0		0		0		0		0		0		0		0
Default		0		0		0		13		9		0		0		22		0		0		0		0		0		0		0		0
Real estate total	$	1,895	$	369	$	599	$	389	$	342	$	1,609	$	0	$	5,203	$	1,616	$	1,245	$	264	$	384	$	260	$	1,250	$	0	$	5,019
Working Capital
Performing	$	503	$	334	$	200	$	41	$	106	$	176	$	878	$	2,238	$	662	$	321	$	209	$	158	$	37	$	173	$	774	$	2,334
Credit Watch		1		0		6		1		0		19		9		36		1		1		0		0		0		0		0		2
At Risk		1		0		0		0		7		0		0		8		0		0		0		0		0		0		0		0
Default		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0
Working capital total	$	505	$	334	$	206	$	42	$	113	$	195	$	887	$	2,282	$	663	$	322	$	209	$	158	$	37	$	173	$	774	$	2,336
Total	$	2,400	$	703	$	805	$	431	$	455	$	1,804	$	7,044	$	13,642	$	2,279	$	1,567	$	473	$	542	$	297	$	1,423	$	3,717	$	10,298

The amortized cost of the dealer products portfolio excludes accrued interest of ~~$21~~$25 million and ~~$27~~$22 million at ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021~~,2022, respectively. As of ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021~~,2022, the amount of line-of-credit arrangements that are converted to term loans in each reporting period was insignificant, respectively.

Substantially all finance receivables do not involve recourse to the dealer in the event of customer default. Finance receivables include contracts greater than 120 days past due, which are recorded at the fair value of collateral less estimated costs to sell, and contracts in bankruptcy. Contracts for which vehicles have been repossessed are excluded. For all finance receivables, we define “past due” as any payment, including principal and interest, that is at least 30 days past the contractual due date. For any customer who is granted a payment extension under an extension program, the aging of the receivable is adjusted for the number of days of the extension granted.

The following tables summarize the aging of the amortized cost basis of our finance receivables by class:

	December 31, 2021														June 30, 2022
	30 - 59 Days past due		60 - 89 Days past due		90 Days or greater past due		Total Past due		Current		Total Finance receivables		90 Days or greater past due and accruing		30 - 59 Days past due		60 - 89 Days past due		90 Days or greater past due		Total Past due		Current		Total Finance receivables		90 Days or greater past due and accruing
Retail loan	$	985	$	274	$	140	$	1,399	$	70,457	$	71,856	$	89	$	979	$	298	$	122	$	1,399	$	74,088	$	75,487	$	78
Wholesale		0		0		0		0		2,866		2,866		0		0		0		0		0		2,992		2,992		0
Real estate		0		0		0		0		5,076		5,076		0		0		0		0		0		4,987		4,987		0
Working capital		0		0		0		0		2,312		2,312		0		0		0		0		0		2,604		2,604		0
Total	$	985	$	274	$	140	$	1,399	$	80,711	$	82,110	$	89	$	979	$	298	$	122	$	1,399	$	84,671	$	86,070	$	78

	March 31, 2021														March 31, 2022
	30 - 59 Days past due		60 - 89 Days past due		90 Days or greater past due		Total Past due		Current		Total Finance receivables		90 Days or greater past due and accruing		30 - 59 Days past due		60 - 89 Days past due		90 Days or greater past due		Total Past due		Current		Total Finance receivables		90 Days or greater past due and accruing
Retail loan	$	562	$	144	$	69	$	775	$	65,953	$	66,728	$	39	$	932	$	242	$	117	$	1,291	$	72,089	$	73,380	$	65
Wholesale		0		0		0		0		6,157		6,157		0		0		0		0		0		2,943		2,943		0
Real estate		0		0		0		0		5,203		5,203		0		0		0		0		0		5,019		5,019		0
Working capital		0		0		0		0		2,282		2,282		0		0		0		0		0		2,336		2,336		0
Total	$	562	$	144	$	69	$	775	$	79,595	$	80,370	$	39	$	932	$	242	$	117	$	1,291	$	82,387	$	83,678	$	65

For accounts not under bankruptcy protection, the amount of finance receivables modified as a troubled debt restructuring during the three ~~and nine~~ months ended ~~December 31,~~June 30, 2022 and 2021 ~~and 2020~~ was not significant for each class of finance receivables. Troubled debt restructurings for accounts not under bankruptcy protection within the retail loan class of finance receivables are comprised exclusively of contract term extensions that reduce the monthly payment due from the customer. For the three classes of finance receivables within the dealer products portfolio segment, troubled debt restructurings include contract term extensions, interest rate adjustments, waivers of loan covenants, or any combination of the three. Troubled debt restructurings of accounts not under bankruptcy protection did not include forgiveness of principal or interest rate adjustments during the three ~~and nine~~ months ended ~~December 31, 2021~~June 30, 2022 and ~~2020.~~2021.

We consider finance receivables under bankruptcy protection within the retail loan class to be troubled debt restructurings as of the date we receive notice of a customer filing for bankruptcy protection, regardless of the ultimate outcome of the bankruptcy proceedings. The bankruptcy court may impose modifications as part of the proceedings, including interest rate adjustments and forgiveness of principal. For the three ~~and nine~~ months ended ~~December 31,~~June 30, 2022 and 2021, ~~and 2020,~~ the financial impact of troubled debt restructurings related to finance receivables under bankruptcy protection was not significant to our Consolidated Statements of Income and Consolidated Balance Sheets.

For a limited time during fiscal 2021, we offered several programs to provide relief to customers during the COVID-19 pandemic. These programs, which were broadly available to our customers, included retail loan payment extensions and lease payment deferrals. We concluded that these programs did not meet troubled debt restructuring criteria due to the short-term nature of the modifications with no change in the contractual interest rate. To provide relief for our dealers we offered certain temporary interest reductions, interest payment deferrals, and interest waivers on dealer floorplan financing, and principal payment deferrals on dealer floorplan financing, dealer real estate and working capital loans. We also concluded that these programs did not meet troubled debt restructuring criteria as the finance receivables from the dealers were current.

The following tables provide information related to our allowance for credit losses for finance receivables and certain off-balance sheet lending commitments by portfolio segment:

	Three months ended December 31, 2021									Three months ended June 30, 2022
	Retail loan			Dealer products			Total			Retail loan			Dealer products			Total

Beginning balance, October 1, 2021	$	1,135		$	89		$	1,224
Beginning balance, April 1, 2022										$	1,195		$	77		$	1,272
Charge-offs		(64	)		0			(64	)		(91	)		0			(91	)
Recoveries		14			0			14			15			0			15
Provision for credit losses		55			(10	)		45			90			(12	)		78
Ending balance, December 31, 2021 ¹	$	1,140		$	79		$	1,219

	Nine months ended December 31, 2021
	Retail loan			Dealer products			Total
Beginning balance, April 1, 2021	$	1,075		$	140		$	1,215
Charge-offs		(152	)		0			(152	)
Recoveries		46			0			46
Provision for credit losses		171			(61	)		110
Ending balance, December 31, 2021 ¹	$	1,140		$	79		$	1,219
Ending balance, June 30, 2022 ¹										$	1,209		$	65		$	1,274

	Three months ended December 31, 2020									Three months ended June 30, 2021
	Retail loan			Dealer products			Total			Retail loan			Dealer products		Total

Beginning balance, October 1, 2020	$	1,020		$	154		$	1,174
Beginning balance, April 1, 2021										$	1,075		$	140	$	1,215
Charge-offs		(113	)		0			(113	)		(33	)		0		(33	)
Recoveries		12			8			20			17			0		17
Provision for credit losses		133			(15	)		118			(7	)		4		(3	)
Ending balance, December 31, 2020 ²	$	1,052		$	147		$	1,199
Ending balance, June 30, 2021 ¹										$	1,052		$	144	$	1,196


	Nine months ended December 31, 2020
	Retail loan			Dealer products			Total
Beginning balance, April 1, 2020	$	486		$	241		$	727
Adoption of ASU 2016-13 ¹		281			11			292
Charge-offs		(228	)		0			(228	)
Recoveries		33			9			42
Provision for credit losses		480			(114	)		366
Ending balance, December 31, 2020 ²	$	1,052		$	147		$	1,199

We have elected to exclude accrued interest from the measurement of expected credit losses as we apply policies and procedures that result in the timely write-offs of accrued interest. Accrued interest is written off within allowance for credit losses at the earlier of when an account is deemed to be uncollectible or when an account is greater than 120 days past due.

Finance receivables for the dealer products portfolio segment as of ~~December 31, 2021~~June 30, 2022, includes ~~$922~~$958 million in finance receivables that are guaranteed by Toyota Motor North America, Inc. (“TMNA”), and ~~$183~~$187 million in finance receivables that are guaranteed by third-party private Toyota distributors. Finance receivables for the dealer products portfolio segment as of ~~December 31, 2020~~June 30, 2021, includes ~~$1,025~~$1,033 million in finance receivables that are guaranteed by TMNA, and ~~$164~~$171 million in finance receivables that are guaranteed by third-party private Toyota distributors. These finance receivables are related to certain Toyota and Lexus dealers and other third parties to whom we provided financing at the request of TMNA and third-party private Toyota distributors.

During the first nine months of fiscal 2022, the allowance for credit losses increased $4 million as the growth of our retail loan portfolio and increase in delinquencies was largely offset by improvement in the financial performance of our dealers. In contrast, during the first nine months of fiscal 2021, the allowance for credit losses increased $472 million reflecting an increase to the allowance for credit losses of $292 million related to the adoption of ASU 2016-13, and an increase of $180 million primarily due to the increase in expected credit losses for the retail loan portfolio driven by economic conditions caused by the COVID-19 pandemic and the restrictions designed to slow the spread of COVID-19, including stay-at-home orders, increased unemployment, and decreased consumer spending.

Investments in operating leases, net consists of vehicle lease contracts acquired from dealers, and includes deferred origination fees and costs, deferred income, and accumulated depreciation. Securitized investments in operating leases represent beneficial interests in a pool of certain vehicle leases that have been sold for legal purposes to securitization trusts but continue to be included in our consolidated financial statements as discussed further in Note 8 - Variable Interest Entities. Cash flows from these securitized investments in operating leases are available only for the repayment of debt issued by these trusts and other obligations arising from the securitization transactions. They are not available for payment of our other obligations or to satisfy claims of our other creditors.

	December 31,			March 31,			June 30,			March 31,
	2021			2021			2022			2022
Investments in operating leases ¹	$	47,397		$	48,337		$	43,629		$	45,728
Deferred origination (fees) and costs, net		(56	)		(101	)		(38	)		(46	)
Deferred income		(1,488	)		(1,759	)		(1,074	)		(1,272	)
Accumulated depreciation		(9,017	)		(9,386	)		(8,814	)		(8,955	)
Investments in operating leases, net	$	36,836		$	37,091		$	33,703		$	35,455

Our liabilities consist mainly of fixed and variable rate debt, denominated in U.S. dollars and various other currencies, which we issue in the global capital markets, while our assets consist primarily of U.S. dollar denominated, fixed rate receivables. We enter into interest rate swaps, and foreign currency swaps to economically hedge the interest rate and foreign currency risks that result from the different characteristics of our assets and liabilities. Our use of derivative transactions is intended to reduce long-term fluctuations in the fair value of assets and liabilities caused by market movements. All of our derivative activities are authorized and monitored by our management and our Asset-Liability Committee which provides a framework for financial controls and governance to manage market risk.

All derivative instruments are recorded on the balance sheet at fair value, taking into consideration the effects of legally enforceable master netting agreements that allow us to net settle asset and liability positions and offset cash collateral with the same counterparty on a net basis. Changes in the fair value of our derivative instruments are recorded in Interest expense in our Consolidated Statements of Income. The derivative instruments are included as a component of Other assets or Other liabilities on our Consolidated Balance Sheets.

Accounting guidance permits the net presentation on our Consolidated Balance Sheets of derivative receivables and derivative payables with the same counterparty and the related cash collateral when a legally enforceable master netting agreement exists, or when the derivative receivables and derivative payables meet all the conditions for the right of setoff to exist. When we meet this condition, we elect to present such balances on a net basis.

Our International Swaps and Derivatives Association (“ISDA”) Master Agreements are our master netting agreements which permit multiple transactions to be cancelled and settled with a single net balance paid to either party for our OTC derivatives. The master netting agreements also contain reciprocal collateral agreements which require the transfer of cash collateral to the party in a net asset position across all transactions. Our collateral agreements with substantially all our counterparties include a zero threshold, full collateralization arrangement. Although we have daily valuation and collateral exchange arrangements with all of our counterparties, due to the time required to move collateral, there may be a delay of up to one day between the exchange of collateral and the valuation of our derivatives. We would not be required to post additional collateral to the counterparties with whom we were in a net liability position at ~~December 31, 2021,~~June 30, 2022, if our credit ratings were to decline, since we fully collateralize without regard to credit ratings with these counterparties. In addition, as our collateral agreements include legal right of offset provisions, collateral amounts are netted against derivative assets or derivative liabilities, and the net amount is included in Other assets or Other liabilities on our Consolidated Balance Sheets.

For our centrally cleared derivatives, variation margin payments are legally characterized as settlement payments and accounted for with corresponding derivative positions as one unit of account as opposed to collateral. Initial margin payments are separately recorded in Other assets on our Consolidated Balance Sheets. We perform valuation and margin exchange on a daily basis. Similar to the OTC swaps, there may be a delay of up to one day between the exchange of margin payments and the valuation of our derivatives.

The following tables show the financial statement line item and amount of our derivative assets and liabilities that are reported on our Consolidated Balance Sheets:

	December 31, 2021					March 31, 2021					June 30, 2022					March 31, 2022
			Fair					Fair					Fair					Fair
	Notional		value			Notional		value			Notional		value			Notional		value
Other assets:
Interest rate swaps	$	63,788	$	998		$	44,125	$	1,026		$	64,202	$	1,647		$	64,327	$	1,425
Foreign currency swaps		2,776		85			7,274		330			129		18			1,594		55
Total	$	66,564	$	1,083		$	51,399	$	1,356		$	64,331	$	1,665		$	65,921	$	1,480

Counterparty netting				(640	)				(840	)				(890	)				(761	)
Collateral held				(380	)				(462	)				(723	)				(658	)
Carrying value of derivative contracts – Other assets			$	63				$	54				$	52				$	61

Other liabilities:
Interest rate swaps	$	33,127	$	514		$	55,062	$	1,142		$	27,862	$	1,018		$	19,903	$	822
Foreign currency swaps		7,007		424			4,321		243			9,443		1,370			8,102		717
Total	$	40,134	$	938		$	59,383	$	1,385		$	37,305	$	2,388		$	28,005	$	1,539

Counterparty netting				(640	)				(840	)				(890	)				(761	)
Collateral posted				(298	)				(544	)				(1,498	)				(753	)
Carrying value of derivative contracts – Other liabilities			$	0				$	1				$	0				$	25

As of ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021,~~2022, we held excess collateral and variation margin of $1$56 million and ~~$29~~$2 million, respectively, which we did not use to offset derivative assets and was recorded in Other liabilities on our Consolidated Balance Sheets. As of ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021,~~2022, we posted initial margin and excess collateral of ~~$121~~$257 million and ~~$10~~$132 million, respectively, which we did not use to offset derivative liabilities and was recorded in Other assets on our Consolidated Balance Sheets.

The following table summarizes the components of interest expense, including the location and amount of gains and losses on derivative instruments and related hedged items, as reported in our Consolidated Statements of Income:

Three months ended

Nine months ended

December 31,

December 31,

2021

2020

2021

2020

Interest expense on debt

$
362

$
460

$
1,134

$
1,531

Interest expense on derivatives

23

103

137

334

Interest expense on debt and derivatives

385

563

1,271

1,865

(Gains) losses on debt denominated in
foreign currencies

(60
)

655

(338
)

1,703

Losses (gains) on foreign currency swaps

151

(658
)

509

(1,754
)
Gains on U.S. dollar interest rate swaps

(130
)

(69
)

(387
)

(280
)
Total interest expense

$
346

$
491

$
1,055

$
1,534

	Three months ended
	June 30,
	2022			2021
Interest expense on debt	$	446		$	389
Interest (income) expense on derivatives		(62	)		66
Interest expense on debt and derivatives		384			455

(Gains) losses on debt denominated in foreign currencies		(591	)		10
Losses on foreign currency swaps		712			25
Losses (gains) on U.S. dollar interest rate swaps		58			(204	)
Total interest expense	$	563		$	286

Interest expense on debt and derivatives represents net interest settlements and changes in accruals. Gains and losses on derivatives and debt denominated in foreign currencies exclude net interest settlements and changes in accruals. Cash flows associated with derivatives are reported in Net cash provided by operating activities in our Consolidated Statements of Cash Flows.

Debt and the related weighted average contractual interest rates are summarized as follows:

	December 31, 2021							March 31, 2021							June 30, 2022							March 31, 2022
	Face value		Carrying value		Weighted average contractual interest rates			Face value		Carrying value		Weighted average contractual interest rates			Face value		Carrying value		Weighted average contractual interest rates			Face value		Carrying value		Weighted average contractual interest rates
Unsecured notes and loans payable		82,293		82,054		1.17	%		85,759		85,513		1.31	%	$	81,819	$	81,541		1.73	%	$	82,542	$	82,288		1.30	%
Secured notes and loans payable		28,114		28,068		0.91	%		24,256		24,212		1.29	%		28,933		28,882		1.54	%		26,907		26,864		1.01	%
Total debt	$	110,407	$	110,122		1.10	%	$	110,015	$	109,725		1.31	%	$	110,752	$	110,423		1.68	%	$	109,449	$	109,152		1.23	%

The carrying value of our debt includes unamortized premiums, discounts, debt issuance costs and the effects of foreign currency translation adjustments.

Weighted average contractual interest rates are calculated based on original notional or par value before consideration of premium or discount and approximate the effective interest rates. Debt is callable at par value.

Our unsecured notes and loans payable consist of commercial paper and fixed and variable rate debt. Short-term funding needs are met through the issuance of commercial paper in the U.S. Amounts outstanding under our commercial paper programs were ~~$17.0~~$17.4 billion and $16.9 billion as of ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021,~~2022, respectively.

Upon issuance of fixed rate debt, we generally elect to enter into pay-float swaps to convert fixed rate payments on debt to floating rate payments. Certain unsecured notes and loans payable are denominated in various foreign currencies. The debt is translated into U.S. dollars using the applicable exchange rate at the transaction date and retranslated at each balance sheet date using the exchange rate in effect at that date. Concurrent with the issuance of these foreign currency unsecured notes and loans payable, we enter into currency swaps in the same notional amount to convert non-U.S. currency payments to U.S. dollar denominated payments. Gains and losses related to foreign currency transactions are included in Interest expense in our Consolidated Statements of Income.

Certain of our unsecured notes and loans payable contain covenants and conditions customary in transactions of this nature, including negative pledge provisions, cross-default provisions and limitations on certain consolidations, mergers and sales of assets. We are currently in compliance with these covenants and conditions.

Our secured notes and loans payable are denominated in U.S. dollars and consist of both fixed and variable rate debt. Secured notes and loans payable are issued using on-balance sheet securitization trusts, as further discussed in Note 8 – Variable Interest Entities. These notes are repayable only from collections on the underlying securitized retail finance receivables and the beneficial interests in investments in operating leases and from related credit enhancements. Some of our secured notes are backed by a revolving pool of finance receivables and cash collateral, with the ability to repay the notes in full after the revolving period ends, after which an amortization period begins.

For additional liquidity purposes, we maintain credit facilities, which may be used for general corporate purposes, as described below:

364-Day Credit Agreement, Three-Year Credit Agreement and Five-Year Credit Agreement

TMCC, Toyota Credit de Puerto Rico Corp. (“TCPR”), and other Toyota affiliates are party to a $5.0 billion 364-day syndicated bank credit facility, a $5.0 billion three-year syndicated bank credit facility, and a $5.0 billion five-year syndicated bank credit facility, expiring in fiscal 2023, 2025, and 2027, respectively.

The ability to make draws is subject to covenants and conditions customary in transactions of this nature, including negative pledge provisions, cross-default provisions and limitations on certain consolidations, mergers and sales of assets. These agreements were 0t drawn upon and had 0 outstanding balances as of ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021.~~2022. We are currently in compliance with the covenants and conditions of the credit agreements described above.

We are party to a 364-day revolving securitization facility with certain bank-sponsored asset-backed conduits and other financial institutions expiring in fiscal 2023. Under the terms and subject to the conditions of this facility, the committed lenders under the facility have committed to make advances up to a facility limit of ~~$7.0~~$8.0 billion backed by eligible retail finance receivables transferred by us to a special-purpose entity acting as borrower. We utilized ~~$3.7~~$2.8 billion and $3.2 billion of this facility as of ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021,~~2022, respectively.

TMCC is party to additional unsecured credit facilities with various banks. As of ~~December 31, 2021,~~June 30, 2022, TMCC had committed bank credit facilities totaling $4.6 billion, of which ~~$350 million, $2.2~~$2.0 billion, $300 million, $2.0 billion, and ~~$1.7 billion~~$300 million mature in fiscal ~~2022,~~ 2023, 2024, 2025, and ~~2025~~2026 respectively.

These credit agreements contain covenants and conditions customary in transactions of this nature, including negative pledge provisions, cross-default provisions and limitations on certain consolidations, mergers and sales of assets. These credit facilities were 0t drawn upon and had 0 outstanding balances as of ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021.~~2022. We are currently in compliance with the covenants and conditions of the credit agreements described above.

TMCC is party to a $5.0 billion three-year revolving credit facility with Toyota Motor Sales U.S.A., Inc. expiring in fiscal 2025. This credit facility was 0t drawn upon and had 0 outstanding balance as of ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021.~~2022.

From time to time, we may borrow from affiliates based upon a number of business factors such as funds availability, cash flow timing, relative cost of funds, and market access capabilities. Amounts borrowed from affiliates are recorded in Other liabilities on our Consolidated Balance Sheets.

We use one or more special purpose entities that are considered Variable Interest Entities (“VIEs”) to issue asset-backed securities to third-party bank-sponsored asset-backed securitization vehicles and to investors in securitization transactions. The securities issued by these VIEs are backed by the cash flows related to retail finance receivables and beneficial interests in investments in operating leases (“Securitized Assets”). We hold variable interests in the VIEs that could potentially be significant to the VIEs. We determined that we are the primary beneficiary of the securitization trusts because (i) our servicing responsibilities for the Securitized Assets give us the power to direct the activities that most significantly impact the performance of the VIEs, and (ii) our variable interests in the VIEs give us the obligation to absorb losses and the right to receive residual returns that could potentially be significant.

The following tables show the assets and liabilities related to our VIE securitization transactions that were included on our Consolidated Balance Sheets:

	December 31, 2021										June 30, 2022
			VIE Assets				VIE Liabilities						VIE Assets				VIE Liabilities
			Net										Net
	Restricted cash		securitized assets		Other assets		Debt		Other liabilities		Restricted cash		securitized assets		Other assets		Debt		Other liabilities
Retail finance receivables	$	1,233	$	21,637	$	51	$	19,230	$	8	$	1,272	$	24,009	$	58	$	20,953	$	11
Investments in operating leases		616		12,434		22		8,838		2		577		11,358		13		7,929		3
Total	$	1,849	$	34,071	$	73	$	28,068	$	10	$	1,849	$	35,367	$	71	$	28,882	$	14

	March 31, 2021										March 31, 2022
			VIE Assets				VIE Liabilities						VIE Assets				VIE Liabilities
			Net										Net
	Restricted cash		securitized assets		Other assets		Debt		Other liabilities		Restricted cash		securitized assets		Other assets		Debt		Other liabilities
Retail finance receivables	$	1,521	$	21,745	$	46	$	19,665	$	13	$	1,284	$	20,932	$	51	$	18,562	$	8
Investments in operating leases		436		6,599		43		4,547		1		645		11,886		15		8,302		2
Total	$	1,957	$	28,344	$	89	$	24,212	$	14	$	1,929	$	32,818	$	66	$	26,864	$	10

Restricted Cash, including cash equivalents, shown in the previous tables represent collections from the underlying Net securitized assets and certain reserve deposits held by TMCC for the VIEs and is included as part of Restricted cash and cash equivalents on our Consolidated Balance Sheets. Net securitized assets shown in the previous tables are presented net of deferred fees and costs, deferred income, accumulated depreciation and allowance for credit losses. Other assets represent accrued interests related to securitized retail finance receivables and used vehicles held-for-sale that were repossessed by or returned to TMCC for the benefit of the VIEs. The related debt of these consolidated VIEs is presented net of ~~$1,515~~$1,806 million and ~~$1,409~~$1,667 million of securities retained by TMCC at ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021,~~2022, respectively. Other liabilities represent accrued interest on the debt of the consolidated VIEs.

The assets of the VIEs and the restricted cash and cash equivalents held by TMCC serve as the sole source of repayment for the asset-backed securities issued by these entities. Investors in the notes issued by the VIEs do not have recourse to us or our other assets, with the exception of customary representation and warranty repurchase provisions and indemnities.

As the primary beneficiary of these entities, we are exposed to credit, residual value, interest rate, and prepayment risk from the Securitized Assets in the VIEs. However, our exposure to these risks did not change as a result of the transfer of the assets to the VIEs. We may also be exposed to interest rate risk arising from the secured notes issued by the VIEs.

In addition, we entered into interest rate swaps with certain special purpose entities that issue variable rate debt. Under the terms of these swaps, the special purpose entities are obligated to pay TMCC a fixed rate of interest on certain payment dates in exchange for receiving a floating rate of interest on notional amounts equal to the outstanding balance of the secured debt. This arrangement enables the special purpose entities to mitigate the interest rate risk inherent in issuing variable rate debt that is secured by fixed rate Securitized Assets.

The transfers of the Securitized Assets to the special purpose entities in our securitizations are considered to be sales for legal purposes. However, the Securitized Assets and the related debt remain on our Consolidated Balance Sheets. We recognize financing revenue on the Securitized Assets and interest expense on the secured debt issued by the special purpose entities. We also maintain an allowance for credit losses on the securitized retail finance receivables using a methodology consistent with that used for our non-securitized asset portfolio. The interest rate swaps between TMCC and the special purpose entities are considered intercompany transactions and therefore are eliminated in our consolidated financial statements.

We provide lending to Toyota and Lexus dealers through the Toyota Dealer Investment Group’s Dealer Capital Program (“TDIG Program”) operated by our affiliate TMNA, which has an equity interest in these dealerships. Dealers participating in this program have been determined to be VIEs. We do not consolidate the dealerships in this program as we are not the primary beneficiary and any exposure to loss is limited to the amount of the credit facility. Amounts due from these dealers under the TDIG Program that are classified as Finance receivables, net in our Consolidated Balance Sheets ~~as of December 31, 2021~~at June 30, 2022 and March 31, ~~2021~~2022 and revenues earned from these dealers for the three ~~and nine~~ months ended ~~December 31,~~June 30, 2022 and 2021 ~~and 2020~~ were not significant.

We also have other lending relationships which have been determined to be VIEs, but these relationships are not consolidated as we are not the primary beneficiary. Amounts due from these lending relationships at June 30, 2022 and March 31, 2022 and revenues earned under these relationships ~~as of and~~ for the three ~~and nine~~ months ended ~~December 31,~~June 30, 2022 and 2021 ~~and 2020~~ were not significant.

We have entered into certain commitments and guarantees for which the maximum unfunded amounts are summarized in the table below:

	December 31,		March 31,		June 30,		March 31,
	2021		2021		2022		2022
Commitments:
Credit facilities commitments with dealers	$	3,131	$	2,338	$	3,342	$	3,289
Commitments under operating lease agreements		124		141		118		119
Total commitments		3,255		2,479		3,460		3,408
Guarantees of affiliate pollution control and solid waste disposal bonds		100		100		100		100
Total commitments and guarantees	$	3,355	$	2,579	$	3,560	$	3,508

Wholesale financing is not considered to be a contractual commitment as the arrangements are not binding arrangements under which TMCC is required to perform.

We provide fixed and variable rate working capital loans, revolving lines of credit, and real estate financing to dealers and various multi-franchise organizations referred to as dealer groups for facilities construction and refurbishment, working capital requirements, real estate purchases, business acquisitions and other general business purposes. These loans are typically secured with liens on real estate, vehicle inventory, and/or other dealership assets, as appropriate, and may be guaranteed by individual or corporate guarantees of affiliated dealers, dealer groups, or dealer principals. Although the loans are typically collateralized or guaranteed, the value of the underlying collateral or guarantees may not be sufficient to cover our exposure under such agreements. Our pricing reflects market conditions, the competitive environment, the level of support dealers provide our retail, lease and voluntary protection business and the credit worthiness of each dealer. Amounts drawn under these facilities are reviewed for collectability on a quarterly basis, in conjunction with our evaluation of the allowance for credit losses. In addition to the total commitments and guarantees in the previous table, we also have extended credit facilities to affiliates as described in Note 12 – Related Party Transactions in our fiscal ~~2021~~2022 Form 10-K.

Our operating lease portfolio consists of real estate leases. Total operating lease expense, including payments to affiliates, was ~~$25 million and~~ $8 million for the first ~~nine months and third~~ quarter of fiscal 2023 and fiscal 2022, ~~as compared to $28 million and $8 million for the same periods in fiscal 2021.~~respectively. We have a lease agreement through August 2032 with TMNA for our headquarters facility in Plano, Texas. Commitments under operating lease agreements in the previous table include ~~$86~~$82 million and ~~$93~~$84 million for facilities leases with affiliates at ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021,~~2022, respectively.

Lease terms may contain renewal and extension options or early termination features. Generally, these options do not impact the lease term because TMCC is not reasonably certain that it will exercise the options. These lease agreements do not impose restrictions on our ability to pay dividends, engage in debt or equity financing transactions or enter into further lease agreements, nor do they have residual value guarantees. We exclude from our Consolidated Balance Sheets leases with a term equal to one year or less and do not separate non-lease components from our real estate leases.

	December 31,			June 30,
Years ending March 31,	2021			2022
2022	$	5
2023		19		$	14
2024		16			17
2025		14			15
2026		13			14
2027					13
Thereafter		57			45
Total	$	124		$	118
Present value discount		(14	)		(13	)
Total operating lease liability	$	110		$	105

Operating lease liabilities and right-of-use (“ROU”) assets are recognized at the lease commencement date based on the present value of the future minimum lease payments over the lease term. As the interest rate implicit in the lease contract is typically not readily determinable, we utilize our incremental borrowing rate at the lease commencement date for the duration of the lease term.

The following table provides additional information related to operating lease agreements for which we are the lessee:

	December 31,			June 30,
	2021			2022
ROU assets	$	101		$	96
Weighted average remaining lease term (in years)		8.4			7.8
Weighted average discount rate		2.76	%		2.67	%

Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities - operating cash flows	$	21

TMCC has guaranteed bond obligations totaling $100 million in principal that were issued by Putnam County, West Virginia and Gibson County, Indiana to finance the construction of pollution control facilities at manufacturing plants of certain TMCC affiliates. The bonds mature in the following fiscal years ending March 31: 2028 - $20 million; 2029 - $50 million; 2030 - $10 million; 2031 - $10 million; and 2032 - $10 million. TMCC would be required to perform under the guarantees in the event of non-payment on the bonds and other related obligations. TMCC is entitled to reimbursement by the applicable affiliates for any amounts paid. TMCC receives a nominal annual fee for guaranteeing such payments. TMCC has not been required to perform under any of these affiliate bond guarantees as of ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021.~~2022.

In the ordinary course of business, we enter into agreements containing indemnification provisions standard in the industry related to several types of transactions, including, but not limited to, debt funding, derivatives, securitization transactions, and our vendor, supplier and service agreements. Performance under these indemnities would generally occur upon a breach of the representations, warranties, covenants or other commitments made or given in the agreement, or as a result of a third-party claim. In addition, we have agreed in certain debt and derivative issuances, and subject to certain exceptions, to gross-up payments due to third parties in the event that withholding tax is imposed on such payments. In addition, certain of our funding arrangements may require us to pay lenders for increased costs due to certain changes in laws or regulations. Due to the difficulty in predicting events which could cause a breach of the indemnification provisions or trigger a gross-up or other payment obligation, we are not able to estimate our maximum exposure to future payments that could result from claims made under such provisions. We have not made any material payments in the past as a result of these provisions, and as of ~~December 31, 2021,~~June 30, 2022, we determined that it is not probable that we will be required to make any material payments in the future. As of ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021,~~2022, 0 amounts have been recorded under these indemnification provisions.

Various legal actions, governmental proceedings and other claims are pending or may be instituted or asserted in the future against us with respect to matters arising in the ordinary course of business. Certain of these actions are or purport to be class action suits, seeking sizeable damages and/or changes in our business operations, policies and practices. Certain of these actions are similar to suits that have been filed against other financial institutions and captive finance companies. In addition, we are subject to governmental and regulatory examinations, information-gathering requests, and investigations from time to time at the state and federal levels. It is inherently difficult to predict the course of such legal actions and governmental inquiries.

We perform periodic reviews of pending claims and actions to determine the probability of adverse verdicts and resulting amounts of liability. We establish accruals for legal claims when payments associated with the claims become probable and the costs can be reasonably estimated. When we are able, we also determine estimates of reasonably probable 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. Based on available information and established accruals, we do not believe it is reasonably probable that the results of these proceedings, either individually or in the aggregate, will have a material adverse effect on our consolidated financial condition or results of operations.

On November 24, 2020, the Consumer Financial Protection Bureau (“CFPB”) issued a civil investigative demand to the Company seeking, among other things, certain information relating to the Company’s vehicle and payment protection products and credit reporting policies and procedures and reporting records. We are cooperating with the inquiry and cannot predict the eventual scope, duration or outcome at this time. As a result, we are unable to estimate the amount or range of any potential loss arising from this investigation.

Our provision for income taxes was ~~$233 million and $697~~$51 million for the three ~~and nine~~ months ended ~~December 31, 2021, respectively,~~June 30, 2022, compared to ~~$215 million and $546~~$267 million for the same ~~periods~~period in fiscal ~~2021.~~2022. Our effective tax rate was ~~24 percent and~~ 23 percent for the three ~~and nine~~ months ended ~~December 31, 2021, respectively,~~June 30, 2022, compared to 2422 percent for ~~each of~~ the same ~~periods~~period in fiscal ~~2021.~~2022. The ~~increase~~decrease in the provision for income taxes for the three ~~and nine~~ months ended ~~December 31, 2021, compared to the same periods in fiscal 2021, was primarily due to the increase in income before income taxes. The lower effective tax rate for the first nine months of fiscal~~June 30, 2022, compared to the same period in fiscal ~~2021,~~2022, was primarily due to the decrease in income before income taxes. The higher effective tax rate for the three months ended June 30, 2022, compared to the same period in fiscal 2022, was primarily attributable to the larger impact of permanent differences between book and tax ~~benefit from~~on lower income before income taxes in the ~~federal~~current period, partially offset by a lower state effective tax ~~credits recognized in fiscal 2022 as well as the enacted state tax law changes that resulted in higher state tax expense in fiscal 2021.~~rate.

As of ~~December 31, 2021,~~June 30, 2022, we remain under IRS examination for fiscal 2018 through fiscal ~~2022.~~2023.

We periodically review our uncertain tax positions. Our assessment is based on many factors including any ongoing IRS audits. For the three months ended ~~December 31, 2021,~~June 30, 2022, our assessment did not result in a material change in unrecognized tax benefits.

Our deferred tax assets include the deferred deduction of allowance for credit losses and residual value loss estimates, mark-to-market adjustment of investment in marketable securities, and other deferred costs. The total deferred tax liability, net of these deferred tax assets, was ~~$2.4~~$1.4 billion and ~~$2.9~~$1.6 billion at ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021,~~2022, respectively. Although realization of the deferred tax assets is not assured, management believes it is more likely than not that the deferred tax assets will be realized. The amount of the deferred tax assets considered realizable could be reduced if management’s estimates change.

In April 2021, TMCC increased financing support available to Toyota Finance New Zealand Limited to $250 million. In July 2021, TMCC entered into a services agreement with Toyota Financial Savings Bank (“TFSB”) to subservice loans on their behalf. In August 2021, TMCC increased financing support available to TFSB to $1.0 billion and entered into a financing support agreement with Toyota Finance Corporation (“TFC”) for $100 million. In November 2021, in accordance with the financing support agreement and for general corporate purposes, TFC borrowed from TMCC in Japanese Yen a principal amount equivalent to $100 million with an interest rateAs of ~~0.0175% and repayment date of November 2023.~~

~~Except for the transactions mentioned above, as of December 31, 2021,~~June 30, 2022, there were no material changes to our related party agreements or relationships as described in our fiscal ~~2021~~2022 Form 10-K. The tables below show the financial statement line items and amounts included in our Consolidated Statements of Income and in our Consolidated Balance Sheets under various related party agreements or relationships:

	Three months ended						Nine months ended						Three months ended
	December 31,						December 31,						June 30,
	2021			2020			2021			2020			2022			2021
Net financing revenues:
Manufacturer's subvention and other revenues	$	425		$	503		$	1,361		$	1,504		$	339		$	479
Depreciation on operating leases	$	(14	)	$	(33	)	$	(67	)	$	(82	)	$	22		$	(28	)

Interest expense:
Credit support fees, interest and other expenses	$	25		$	26		$	76		$	93		$	23		$	24

Voluntary protection contract revenues and insurance earned premiums:
Voluntary protection contract revenues and insurance earned premiums	$	42		$	43		$	127		$	130		$	40		$	42

Investment and other income, net:
Interest and other income	$	1		$	3		$	6		$	16		$	(6	)	$	3

Expenses:
Operating and administrative expenses	$	19		$	20		$	62		$	63
Operating and administrative													$	21		$	21

	December 31,			March 31,			June 30,			March 31,
	2021			2021			2022			2022
Assets:
Cash and cash equivalents
Commercial paper	$	25		$	6

Investments in marketable securities
Commercial paper	$	25		$	196		$	19		$	100

Finance receivables, net
Accounts receivable	$	88		$	140		$	39		$	90
Deferred retail subvention income	$	(932	)	$	(1,156	)	$	(819	)	$	(875	)

Investments in operating leases, net
Investments in operating leases, net	$	(217	)	$	(236	)	$	(243	)	$	(212	)
Deferred lease subvention income	$	(1,120	)	$	(1,528	)	$	(760	)	$	(923	)

Other assets
Notes receivable	$	768		$	869		$	653		$	789
Other receivables, net	$	80		$	83		$	80		$	80

Liabilities:
Other liabilities
Unearned voluntary protection contract revenues and insurance earned premiums	$	376		$	352		$	376		$	374
Other payables, net	$	383		$	306		$	364		$	394
Notes payable	$	36		$	19		$	16		$	8

TMCC receives subvention payments from TMNA which results in a gross monthly subvention receivable. As of ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021,~~2022, the subvention receivable from TMNA was ~~$56~~$68 million and ~~$184~~$66 million, respectively. We have a master netting agreement with TMNA which allows us to net settle payments for shared services and subvention transactions. Under this agreement, as of ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021,~~2022, respectively, we had a net amount payable to TMNA which is recorded in Other payables, net in Other liabilities.

Financial assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following tables summarize our financial assets and financial liabilities measured at fair value on a recurring basis by level within the fair value hierarchy except for certain investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient and are excluded from the leveling information provided in the tables below. Fair value amounts presented below are intended to permit reconciliation of the fair value hierarchy to the amounts presented in our Consolidated Balance Sheets.

	December 31, 2021													June 30, 2022
								Counterparty													Counterparty
								netting &			Fair										netting &			Fair
	Level 1		Level 2			Level 3		collateral			value			Level 1		Level 2			Level 3		collateral			value
Investments in marketable securities:
Available-for-sale debt securities:
U.S. government and agency obligations	$	484	$	6		$	0	$	0		$	490		$	520	$	4		$	0	$	0		$	524
Foreign government and agency obligations		0		31			0		0			31			0		15			0		0			15
Municipal debt securities		0		11			0		0			11			0		9			0		0			9
Commercial paper		0		25			0		0			25
Corporate debt securities		0		601			0		0			601			0		482			0		0			482
Mortgage-backed securities:
U.S. government agency		0		22			0		0			22			0		23			0		0			23
Non-agency residential		0		8			3		0			11			0		6			3		0			9
Non-agency commercial		0		60			16		0			76			0		78			5		0			83
Asset-backed securities		0		72			16		0			88			0		70			2		0			72
Available-for-sale debt securities total		484		836			35		0			1,355			520		687			10		0			1,217
Equity investments:
Fixed income mutual funds:
Fixed income mutual funds measured at net asset value												1,205													1,080
Total return bond funds		1,569		0			0		0			1,569			1,480		0			0		0			1,480
Equity mutual funds		992		0			0		0			992			794		0			0		0			794
Equity investments total		2,561		0			0		0			3,766			2,274		0			0		0			3,354
Investments in marketable securities total		3,045		836			35		0			5,121			2,794		687			10		0			4,571
Derivative assets:
Interest rate swaps		0		998			0		0			998			0		1,647			0		0			1,647
Foreign currency swaps		0		85			0		0			85			0		18			0		0			18
Counterparty netting and collateral		0		0			0		(1,020	)		(1,020	)		0		0			0		(1,613	)		(1,613	)
Derivative assets total		0		1,083			0		(1,020	)		63			0		1,665			0		(1,613	)		52
Assets at fair value		3,045		1,919			35		(1,020	)		5,184			2,794		2,352			10		(1,613	)		4,623
Derivative liabilities:
Interest rate swaps		0		(514	)		0		0			(514	)		0		(1,018	)		0		0			(1,018	)
Foreign currency swaps		0		(424	)		0		0			(424	)		0		(1,370	)		0		0			(1,370	)
Counterparty netting and collateral		0		0			0		938			938			0		0			0		2,388			2,388
Liabilities at fair value		0		(938	)		0		938			0			0		(2,388	)		0		2,388			0
Net assets at fair value	$	3,045	$	981		$	35	$	(82	)	$	5,184		$	2,794	$	(36	)	$	10	$	775		$	4,623

	March 31, 2021													March 31, 2022
								Counterparty													Counterparty
								netting &			Fair										netting &			Fair
	Level 1		Level 2			Level 3		collateral			value			Level 1		Level 2			Level 3		collateral			value
Investments in marketable securities:
Available-for-sale debt securities:
U.S. government and agency obligations	$	209	$	2		$	0	$	0		$	211		$	504	$	5		$	0	$	0		$	509
Foreign government and agency obligations															0		23			0		0			23
Municipal debt securities		0		10			0		0			10			0		10			0		0			10
Commercial paper		20		176			0		0			196
Corporate debt securities		0		187			0		0			187			0		568			0		0			568
Mortgage-backed securities:
U.S. government agency		0		32			0		0			32			0		20			0		0			20
Non-agency residential		0		0			1		0			1			0		7			3		0			10
Non-agency commercial		0		5			42		0			47			0		78			8		0			86
Asset-backed securities		0		19			33		0			52			0		75			3		0			78
Available-for-sale debt securities total		229		431			76		0			736			504		786			14		0			1,304
Equity investments:
Fixed income mutual funds:
Fixed income mutual funds measured at net asset value												772													1,137
Total return bond funds		2,429		0			0		0			2,429			1,576		0			0		0			1,576
Equity mutual funds		883		0			0		0			883			936		0			0		0			936
Equity investments total		3,312		0			0		0			4,084			2,512		0			0		0			3,649
Investments in marketable securities total		3,541		431			76		0			4,820			3,016		786			14		0			4,953
Derivative assets:
Interest rate swaps		0		1,026			0		0			1,026			0		1,425			0		0			1,425
Foreign currency swaps		0		330			0		0			330			0		55			0		0			55
Counterparty netting and collateral		0		0			0		(1,302	)		(1,302	)		0		0			0		(1,419	)		(1,419	)
Derivative assets total		0		1,356			0		(1,302	)		54			0		1,480			0		(1,419	)		61
Assets at fair value		3,541		1,787			76		(1,302	)		4,874			3,016		2,266			14		(1,419	)		5,014
Derivative liabilities:
Interest rate swaps		0		(1,142	)		0		0			(1,142	)		0		(822	)		0		0			(822	)
Foreign currency swaps		0		(243	)		0		0			(243	)		0		(717	)		0		0			(717	)
Counterparty netting and collateral		0		0			0		1,384			1,384			0		0			0		1,514			1,514
Liabilities at fair value		0		(1,385	)		0		1,384			(1	)		0		(1,539	)		0		1,514			(25	)
Net assets at fair value	$	3,541	$	402		$	76	$	82		$	4,873		$	3,016	$	727		$	14	$	95		$	4,989

The Level 3 financial assets and liabilities recorded at fair value which are subject to recurring and nonrecurring fair value measurement, and the corresponding activity and change in the fair value measurements of these assets and liabilities, were not significant to our Consolidated Balance Sheets as of ~~December 31, 2021and~~June 30, 2022 and March 31, ~~2021,~~2022, or Consolidated Statements of Income for the three ~~and nine~~ months ended ~~December 31, 2021~~June 30, 2022 and ~~2020.~~2021.

Nonrecurring fair value measurements include Level 3 net finance receivables that are not measured at fair value on a recurring basis but are subject to fair value adjustments utilizing the fair value of the underlying collateral when there is evidence of impairment. We did not have any significant nonrecurring fair value items as of ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021.~~2022.

The following tables provide information about assets and liabilities not carried at fair value on a recurring basis on our Consolidated Balance Sheets:

	December 31, 2021										June 30, 2022
	Carrying								Total Fair		Carrying								Total Fair
	value		Level 1		Level 2		Level 3		value		value		Level 1		Level 2		Level 3		value
Financial assets
Finance receivables
Retail loan	$	70,904	$	0	$	0	$	74,090	$	74,090	$	74,472	$	0	$	0	$	74,886	$	74,886
Wholesale		2,864		0		0		2,878		2,878		2,995		0		0		2,981		2,981
Real estate		5,041		0		0		5,215		5,215		4,979		0		0		4,967		4,967
Working capital		2,238		0		0		2,181		2,181		2,557		0		0		2,453		2,453

Financial liabilities
Unsecured notes and loans payable	$	82,054	$	0	$	82,671	$	0	$	82,671	$	81,541	$	0	$	79,483	$	0	$	79,483
Secured notes and loans payable		28,068		0		0		28,120		28,120		28,882		0		0		28,279		28,279

	March 31, 2021										March 31, 2022
	Carrying								Total Fair		Carrying								Total Fair
	value		Level 1		Level 2		Level 3		value		value		Level 1		Level 2		Level 3		value
Financial assets
Finance receivables
Retail loan	$	65,808	$	0	$	0	$	69,007	$	69,007	$	72,369	$	0	$	0	$	73,385	$	73,385
Wholesale		6,132		0		0		6,158		6,158		2,940		0		0		2,931		2,931
Real estate		5,142		0		0		5,224		5,224		4,985		0		0		4,961		4,961
Working capital		2,154		0		0		2,171		2,171		2,256		0		0		2,171		2,171

Financial liabilities
Unsecured notes and loans payable	$	85,513	$	0	$	86,205	$	555	$	86,760	$	82,288	$	0	$	80,980	$	0	$	80,980
Secured notes and loans payable		24,212		0		0		24,478		24,478		26,864		0		0		26,500		26,500

Accrued interest related to finance receivables is in Other assets in the Consolidated Balance Sheets; however, TMCC measures the fair value of each class of finance receivables using scheduled principal and interest payments. Therefore, accrued interest has been included in the carrying value of each class of finance receivables in the previous tables, along with the finance receivables, deferred origination costs, deferred income, and allowance for credit losses. Finance receivables in the previous tables excludes related party transactions, for which the fair value approximates the carrying value, of ~~$88~~$39 million and ~~$140~~$90 million at ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021,~~2022, respectively. Fair values of related party finance receivables, net are classified as Level 3 within the fair value hierarchy.

For Cash and cash equivalents and Restricted cash and cash equivalents on our Consolidated Balance Sheets, the fair value approximates the carrying value and these instruments are classified as Level 1 within the fair value hierarchy.

Financial information for our reportable operating segments, which includes allocated corporate expenses, is summarized as follows:

	Three months ended December 31, 2021									Three months ended June 30, 2022
	Finance		Voluntary protection		Intercompany					Finance		Voluntary protection			Intercompany
	operations		operations		eliminations			Total		operations		operations			eliminations			Total

Total financing revenues	$	2,991	$	0	$	0		$	2,991	$	2,831	$	0		$	0		$	2,831
Depreciation on operating leases		1,460		0		0			1,460		1,409		0			0			1,409
Interest expense		346		0		0			346		563		0			0			563
Net financing revenues		1,185		0		0			1,185		859		0			0			859

Voluntary protection contract revenues and insurance earned premiums		0		255		0			255		0		259			0			259
Investment and other income, net		12		64		0			76
Investment and other income (loss), net											33		(339	)		0			(306	)
Net financing and other revenues		1,197		319		0			1,516		892		(80	)		0			812

Expenses:
Provision for credit losses		45		0		0			45		78		0			0			78
Operating and administrative expenses		293		101		0			394
Operating and administrative											299		107			0			406
Voluntary protection contract expenses and insurance losses		0		96		0			96		0		107			0			107
Total expenses		338		197		0			535		377		214			0			591

Income before income taxes		859		122		0			981
Provision for income taxes		204		29		0			233
Income (loss) before income taxes											515		(294	)		0			221
Provision (benefit) for income taxes											125		(74	)		0			51

Net income	$	655	$	93	$	0		$	748
Net income (loss)										$	390	$	(220	)	$	0		$	170

	Nine months ended December 31, 2021
	Finance		Voluntary protection		Intercompany
	operations		operations		eliminations			Total

Total financing revenues	$	9,022	$	0	$	0		$	9,022
Depreciation on operating leases		4,400		0		0			4,400
Interest expense		1,055		0		0			1,055
Net financing revenues		3,567		0		0			3,567

Voluntary protection contract revenues and insurance earned premiums		0		758		0			758
Investment and other income, net		40		199		0			239
Net financing and other revenues		3,607		957		0			4,564

Expenses:
Provision for credit losses		110		0		0			110
Operating and administrative expenses		872		291		0			1,163
Voluntary protection contract expenses and insurance losses		0		303		0			303
Total expenses		982		594		0			1,576

Income before income taxes		2,625		363		0			2,988
Provision for income taxes		610		87		0			697

Net income	$	2,015	$	276	$	0		$	2,291

Total assets at December 31, 2021	$	129,511	$	6,745	$	(121	)	$	136,135
Total assets at June 30, 2022										$	130,054	$	6,213		$	(135	)	$	136,132

Three months ended December 31, 2020

Finance

Voluntary protection

Intercompany

operations

operations

eliminations

Total

Total financing revenues

$
2,974

$
0

$
0

$
2,974

Depreciation on operating leases

1,450

0

0

1,450

Interest expense

491

0

0

491

Net financing revenues

1,033

0

0

1,033

Voluntary protection contract revenues
and insurance earned premiums

0

241

0

241

Investment and other income, net

21

158

0

179

Net financing and other revenues

1,054

399

0

1,453

Expenses:

Provision for credit losses

118

0

0

118

Operating and administrative expenses

268

86

0

354

Voluntary protection contract expenses and insurance losses

0

98

0

98

Total expenses

386

184

0

570

Income before income taxes

668

215

0

883

Provision for income taxes

163

52

0

215

Net income

$
505

$
163

$
0

$
668

Nine months ended December 31, 2020

Finance

Voluntary protection

Intercompany

operations

operations

eliminations

Total

Total financing revenues

$
8,821

$
0

$
0

$
8,821

Depreciation on operating leases

4,484

0

0

4,484

Interest expense

1,534

0

0

1,534

Net financing revenues

2,803

0

0

2,803

Voluntary protection contract revenues
and insurance earned premiums

0

714

0

714

Investment and other income, net

76

369

0

445

Net financing and other revenues

2,879

1,083

0

3,962

Expenses:

Provision for credit losses

366

0

0

366

Operating and administrative expenses

818

270

0

1,088

Voluntary protection contract expenses and insurance losses

0

265

0

265

Total expenses

1,184

535

0

1,719

Income before income taxes

1,695

548

0

2,243

Provision for income taxes

414

132

0

546

Net income

$
1,281

$
416

$
0

$
1,697

Total assets at December 31, 2020

$
128,442

$
6,176

$
(127
)

$
134,491

	Three months ended June 30, 2021
	Finance			Voluntary protection		Intercompany
	operations			operations		eliminations			Total

Total financing revenues	$	2,999		$	0	$	0		$	2,999
Depreciation on operating leases		1,441			0		0			1,441
Interest expense		286			0		0			286
Net financing revenues		1,272			0		0			1,272

Voluntary protection contract revenues and insurance earned premiums		0			249		0			249
Investment and other income, net		19			137		0			156
Net financing and other revenues		1,291			386		0			1,677

Expenses:
Provision for credit losses		(3	)		0		0			(3	)
Operating and administrative		292			92		0			384
Voluntary protection contract expenses and insurance losses		0			108		0			108
Total expenses		289			200		0			489

Income before income taxes		1,002			186		0			1,188
Provision for income taxes		221			46		0			267

Net income	$	781		$	140	$	0		$	921

Total assets at June 30, 2021	$	128,015		$	6,524	$	(138	)	$	134,401

For the three ~~and nine~~ months ended ~~December 31,~~June 30, 2022 and 2021, ~~and 2020,~~ approximately 8283 percent and 8382 percent, respectively, of voluntary protection contract revenues in the Voluntary protection operations segment were accounted for under the guidance for revenue from contracts with customers.

The Voluntary protection operations segment defers contractually determined incentives paid to dealers as contract costs for selling voluntary protection products. These costs are recorded in Other assets on our Consolidated Balance Sheets and are amortized to Operating and administrative expenses in the Consolidated Statements of Income using a methodology consistent with the recognition of revenue. The amount of capitalized dealer incentives and the related amortization was not significant to our consolidated financial statements as of and for the three ~~and nine~~ months ended ~~December 31, 2021~~June 30, 2022 and ~~2020.~~2021.

We had ~~$2.4~~$2.5 billion and ~~$2.5~~$2.7 billion of unearned voluntary protection contract revenues from contracts with customers included in Other liabilities on our Consolidated Balance Sheets as of March 31, ~~2020~~2021 and March 31, ~~2021,~~2022, respectively. We recognized ~~$170 million and $545~~$200 million of these balances in voluntary protection contract revenues in our Consolidated Statements of Income during the three ~~and nine~~ months ended ~~December 31, 2021, respectively,~~June 30, 2022, compared to ~~$169 million and $537~~$192.0 million recognized during the same ~~periods~~period in fiscal ~~2021.~~2022. As of ~~December 31, 2021,~~June 30, 2022, we had unearned voluntary protection contract revenues of ~~$2.6~~$2.8 billion included in Other liabilities on our Consolidated Balance Sheets, and with respect to this balance we expect to recognize revenue of ~~$205~~$592 million during fiscal ~~2022~~,2023, and ~~$2.4~~$2.2 billion thereafter. At ~~December 31, 2020,~~June 30, 2021, we had unearned voluntary protection contract revenues of ~~$2.4~~$2.5 billion associated with outstanding contracts.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Certain statements contained in this Form 10-Q are “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations and currently available information. However, since these statements are based on factors that involve risks and uncertainties, our performance and results may differ materially from those described or implied by such forward-looking statements. Words such as “believe,” “anticipate,” “expect,” “estimate,” “project,” “should,” “intend,” “will,” “may” or words or phrases of similar meaning are intended to identify forward-looking statements. We caution that the forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause actual results to differ materially from those in the forward-looking statements, including, without limitation, the risk factors set forth in “Part II. Other Information – Item 1A. Risk Factors” and “Item 1A. Risk Factors” of our Annual Report on Form 10-K (“Form 10-K”) for the fiscal year ended March 31, ~~2021~~2022 (“fiscal ~~2021”~~2022”), including the following:

Forward-looking statements speak only as of the date they are made. We will not update the forward-looking statements to reflect actual results or changes in the factors affecting the forward-looking statements.

In our finance operations, we generate revenue, income, and cash flows by providing retail, lease, and dealer financing to dealers and their customers. We measure the performance of our finance operations using the following metrics: financing volume, market share, ~~net~~Net financing revenues, ~~operating~~Operating and administrative expense, residual value and credit loss metrics.

In our voluntary protection operations, we generate revenue primarily through marketing, underwriting, and providing claims administration for products that cover certain risks of customers. We measure the performance of our voluntary protection operations using the following metrics: issued contract volume, average number of contracts in force, loss metrics and investment income.

Our financial results are affected by a variety of economic and industry factors including, but not limited to, new and used vehicle markets, Toyota, Lexus, and private label new vehicle production ~~and sales~~ volume, vehicle inventory levels, vehicle sales and ~~financing~~ incentive programs, consumer behavior, employment levels, our ability to respond to changes in interest rates with respect to both contract pricing and funding, the actual or perceived quality, safety or reliability of Toyota, Lexus, and private label vehicles, the financial health of the dealers we finance, and competitive pressure. Our financial results may also be affected by the regulatory environment in which we operate, including as a result of new legislation or changes in regulation and any compliance costs or changes we may be required to make to our business practices. All of these factors can influence consumer contract and dealer financing volume, the number of consumer contracts and dealers that default and the loss per occurrence, our inability to realize originally estimated contractual residual values on leased vehicles, the volume and performance of our voluntary protection operations, and our ~~net~~Net financing revenues on consumer and dealer financing volume. Changes in the volume of vehicle sales, sales of our voluntary protection products, or the level of voluntary protection expenses and insurance losses could materially and adversely impact our voluntary protection operations. Additionally, our funding programs and related costs are influenced by changes in the global capital markets, prevailing interest rates, and our credit ratings and those of our parent companies, which may affect our ability to obtain cost effective funding to support earning asset growth.

During the first ~~nine months~~quarter of the fiscal year ending March 31, ~~2022~~2023 (“fiscal ~~2022”~~2023”), the United States (“U.S.”) economy continued to be impacted by the global coronavirus and related variants (“COVID-19”) pandemic and the ~~extraordinary~~ governmental measures intended to slow its ~~spread. In conjunction with increases~~spread, in ~~vaccination rates~~addition to inflationary pressures and the easing of restrictive measures in the current fiscal year, there has been improvement in unemployment levels and consumer confidence from fiscal 2021 pandemic lows, but neither have returned to pre-pandemic levels. There remains uncertainty around the duration and the severity of the COVID-19 pandemic, the timing and strength of the economy’s recovery, and the impacts of government support and lender relief programs ending. In addition, along with the reopening of the US economy, inflation has increased in fiscal 2022 from pandemic lows in fiscal 2021. The impact of the COVID-19 pandemic on our future operations is difficult to predict, but the curtailment of economic activities as a result of further outbreak of COVID-19, extended or additional government restrictions intended to slow the spread of the virus, ending of government support programs, delayed consumer response to the lifting of restrictive measures, or permanent behavior changes in consumer spending could have further negative impact on consumer economics, dealerships, and auction sites, which could have a material adverse impact on our business, financial condition, and future results of operations. In addition, changes in the economy that adversely impact the consumer, such as inflation, higher interest ~~rates, elevated debt levels and an increase in unemployment from the current levels could adversely impact our results of operations.~~

~~Economic~~rates. The ongoing challenging economic conditions caused by the COVID-19 pandemic and the current conflict in Ukraine, including production halts and supply shortages affecting the automotive industry and additional delays affecting the supply chain and logistics networks, have resulted in a decrease in ~~dealer~~the availability of new vehicles from pre-pandemic levels. The lack of availability of new vehicles resulted in decreases in industry-wide vehicle ~~inventory levels. This includes~~sales and sales incentives in the ~~global shortage~~U.S. the first quarter of ~~semiconductor chips and other parts and raw materials the automotive industry continues to face. The duration and severity of the supply chain disruptions and shortages, including but not limited~~fiscal 2023, compared to the ~~semiconductor chips, are difficult~~same period in fiscal 2022. For more information regarding the potential impact of current market conditions, refer to ~~predict, but should these persist or become more severe,~~Part I. Item 1A. Risk Factors in our Form 10-K for the ~~negative impact to the manufacturers’ vehicle production and new dealer inventory levels could adversely impact our results of operations.~~ fiscal year ended March 31, 2022.

Average used vehicle values ~~continued to increase~~ in the first ~~nine months~~quarter of fiscal ~~2022~~2023 remained elevated compared to ~~historically high~~historical levels, primarily due to the lack of availability of new vehicles. Future declines in used vehicle values resulting from increases in the supply of new and used vehicles and increases in new vehicle sales incentives could unfavorably impact return rates, residual values, depreciation expense and credit losses in the future.

~~Conditions in~~During the first quarter of fiscal 2023, the global capital markets ~~were generally stable~~experienced periods of heightened volatility in response to the ongoing conflict in Ukraine, increases in the inflation rate, and uncertainty regarding the path of U.S. monetary policy. U.S. benchmark interest rates and credit spreads both increased during the ~~first nine months of fiscal 2022. We~~quarter. While we continue to maintain broad global access to both domestic and international ~~markets. However, uncertainty regarding the course of the COVID-19 pandemic or future changes in U.S. monetary policy~~markets, these events could ~~cause~~lead to further disruptions in the capital markets and ~~increase~~increases in our funding ~~costs during the remainder of the fiscal year.~~costs. Future changes in interest rates in the U.S. and foreign markets could result in volatility in our interest expense, which could affect our results of operations.

The following table summarizes total net income by our reportable operating segments:

	Three months ended				Nine months ended				Three months ended
	December 31,				December 31,				June 30,
(Dollars in millions)	2021		2020		2021		2020		2022			2021
Net income:
Finance operations ¹	$	655	$	505	$	2,015	$	1,281	$	390		$	781
Voluntary protection operations ¹		93		163		276		416		(220	)		140
Total net income	$	748	$	668	$	2,291	$	1,697	$	170		$	921

Our consolidated net income was ~~$2,291 million and $748~~$170 million for the first ~~nine months and third~~ quarter of fiscal ~~2022, respectively,~~2023, compared to ~~$1,697 million and $668~~$921 million for the same ~~periods~~period in fiscal ~~2021.~~2022. The ~~increase~~decrease in net income for the first ~~nine months~~quarter of fiscal ~~2022,~~2023, compared to the same period in fiscal ~~2021,~~2022, was primarily due to a $479 million decrease in interest expense, a $256 million decrease in provision for credit losses, a $201 million increase in total financing revenues, and a $84 million decrease in depreciation on operating leases, partially offset by a $206$462 million decrease in investment and other income, net, a ~~$151~~$277 million increase in interest expense, a $168 million decrease in total financing revenues, and a $81 million increase in provision for credit losses, partially offset by a $216 million decrease in provision for income taxes, and a $75 million increase in operating and administrative expense. The increase in net income for the third quarter of fiscal 2022, compared to the same period in fiscal 2021, was primarily due to a $145$32 million decrease in interest expense, a $73 million decrease in provision for credit losses, and a $17 million increase in total financing revenues, partially offset by a $103 million decrease in investment and other income, net, a $40 million increase indepreciation on operating ~~and administrative expense and an $18 million increase in provision for income taxes.~~leases.

Our overall capital position increased ~~$2.3~~$0.1 billion, bringing total shareholder’s equity to ~~$17.9~~$18.2 billion at ~~December 31, 2021~~June 30, 2022 as compared to ~~$15.6~~$18.1 billion at March 31, ~~2021.~~2022. Our debt increased to ~~$110.1~~$110.4 billion at ~~December 31, 2021~~June 30, 2022 from ~~$109.7~~$109.2 billion at March 31, ~~2021.~~2022. Our debt-to-equity ratio ~~decreased~~increased to ~~6.2~~6.1 at ~~December 31, 2021~~June 30, 2022 from ~~7.0~~6.0 at March 31, ~~2021.~~2022.

	Three months ended							Nine months ended							Three months ended
	December 31,				Percentage			December 31,				Percentage			June 30,					Percentage
(Dollars in millions)	2021		2020		Change			2021		2020		change			2022		2021			change
Financing revenues:
Operating lease	$	2,081	$	2,122		(2	)%	$	6,329	$	6,365		(1	)%	$	1,900	$	2,120			(10	)%
Retail		830		749		11	%		2,442		2,144		14	%		845		791			7	%
Dealer		80		103		(22	)%		251		312		(20	)%		86		88			(2	)%
Total financing revenues		2,991		2,974		1	%		9,022		8,821		2	%		2,831		2,999			(6	)%
Depreciation on operating leases		1,460		1,450		1	%		4,400		4,484		(2	)%		1,409		1,441			(2	)%
Interest expense		346		491		(30	)%		1,055		1,534		(31	)%		563		286			97	%
Net financing revenues		1,185		1,033		15	%		3,567		2,803		27	%		859		1,272			(32	)%

Investment and other income, net		12		21		(43	)%		40		76		(47	)%		33		19			74	%
Net financing and other revenues		1,197		1,054		14	%		3,607		2,879		25	%		892		1,291			(31	)%

Expenses:
Provision for credit losses		45		118		(62	)%		110		366		(70	)%		78		(3	)		(2700	)%
Operating and administrative expenses		293		268		9	%		872		818		7	%
Operating and administrative																299		292			2	%
Total expenses		338		386		(12	)%		982		1,184		(17	)%		377		289			30	%

Income before income taxes		859		668		29	%		2,625		1,695		55	%		515		1,002			(49	)%
Provision for income taxes		204		163		25	%		610		414		47	%		125		221			(43	)%

Net income from finance operations	$	655	$	505		30	%	$	2,015	$	1,281		57	%	$	390	$	781			(50	)%

Our finance operations reported net income of ~~$2,015 million and $655~~$390 million for the first ~~nine months and third~~ quarter of fiscal ~~2022, respectively,~~2023, compared to ~~$1,281 million and $505~~$781 million for the same ~~periods~~period in fiscal ~~2021.~~2022. The ~~increase~~decrease in net income from finance operations for first ~~nine months~~quarter of fiscal ~~2022,~~2023, compared to the same period in fiscal ~~2021~~2022 was due to a ~~$479~~$277 million ~~decrease~~increase in interest expense, a ~~$256~~$168 million decrease ~~in provision for credit losses, a $201 million increase~~ in total financing revenues, and a ~~$84~~$81 million ~~decrease in depreciation on operating leases, partially offset by a $196 million~~ increase in provision for income taxes, a $54 million increase in operating and administrative expenses, and a $36 million decrease in investment and other income. The increase in net income from finance operations for the third quarter of fiscal 2022, compared to the same period in fiscal 2021 was primarily due to a $145 million decrease in interest expense, a $73 million decrease in provision for credit losses, partially offset by a ~~$41~~$96 million ~~increase~~decrease in provision for income taxes, and a ~~$25~~$32 million ~~increase~~decrease in depreciation on operating ~~and administrative expenses.~~leases.

Total financing revenues ~~increased 2~~decreased 6 percent ~~and remained relatively unchanged~~ during the first ~~nine months and third~~ quarter of fiscal ~~2022, respectively,~~2023, as compared to the same ~~periods~~period in fiscal ~~2021~~2022 due to the following:

As a result of the above, our total portfolio yield, which includes operating lease, retail and dealer financing revenues, was ~~5.1~~4.68 percent for the first ~~nine months and third~~ quarter of fiscal ~~2022, respectively,~~2023, compared to ~~5.1 percent and 5.3~~5.15 percent for the same ~~periods~~period in fiscal ~~2021.~~2022.

We ~~reported~~recorded depreciation on operating leases of ~~$4,400~~$1,409 million for the first ~~nine months~~quarter of fiscal ~~2022,~~2023, compared to ~~$4,484~~$1,441 million for the same period in fiscal ~~2021,~~2022, primarily due to ~~lower residual value losses as a result of continued historically high levels of average used vehicle values and~~ lower average operating lease units ~~outstanding. We reported depreciation on operating leases~~outstanding, partially offset by higher expectations of ~~$1,460 million for the third quarter of fiscal 2022, compared to $1,450 million for the same period in fiscal 2021.~~ residual value losses.

The ongoing challenging economic conditions ~~caused by the COVID-19 pandemic, including production halts and supply shortages affecting the automotive industry and additional delays affecting the supply chain and logistics networks,~~ have resulted in a decrease in the availability of new vehicles ~~which has led to~~from pre-pandemic levels. The lower levels of new vehicle inventory and higher off-lease vehicle purchases by dealers ~~due~~have led to ~~increased~~historically high levels of average used vehicle values. Declines in used vehicle values resulting from increases in the supply of new vehicles and ~~decreased~~increases in new vehicle ~~inventory supply.~~sales incentives could unfavorably impact return rates, residual values, and depreciation expense in the future.

	Three months ended						Nine months ended						Three months ended
	December 31,						December 31,						June 30,
(Dollars in millions)	2021			2020			2021			2020			2022			2021
Interest expense on debt	$	362		$	460		$	1,134		$	1,531		$	446		$	389
Interest expense on derivatives		23			103			137			334
Interest (income) expense on derivatives														(62	)		66
Interest expense on debt and derivatives		385			563			1,271			1,865			384			455

(Gains) losses on debt denominated in foreign currencies		(60	)		655			(338	)		1,703			(591	)		10
Losses (gains) on foreign currency swaps		151			(658	)		509			(1,754	)
Gains on U.S. dollar interest rate swaps		(130	)		(69	)		(387	)		(280	)
Losses on foreign currency swaps														712			25
Losses (gains) on U.S. dollar interest rate swaps														58			(204	)
Total interest expense	$	346		$	491		$	1,055		$	1,534		$	563		$	286

During the first ~~nine months and third~~ quarter of fiscal ~~2022,~~2023, total interest expense ~~decreased~~increased to ~~$1,055~~$563 million ~~and $346 million, respectively,~~ from ~~$1,534 million and $491~~$286 million for the same ~~periods~~period in fiscal ~~2021.~~2022. The ~~decrease in total interest expense for the first nine months and third quarter of fiscal 2022 compared to the same periods in fiscal 2021~~increase is ~~primarily~~ attributable to ~~a decrease in interest expense on debt and derivatives combined and higher gains~~losses on U.S. dollar interest rate swaps ~~partially offset by~~and losses on foreign currency swaps net of gains from debt denominated in foreign ~~currencies.~~currencies, partially offset by a decrease in interest expense on debt and derivatives combined.

Interest expense on debt and derivatives primarily represents contractual net interest settlements and changes in accruals on secured and unsecured notes and loans payable and derivatives, and includes amortization of discounts, premiums, and debt issuance costs. During the first ~~nine months and third~~ quarter of fiscal ~~2022,~~2023, interest expense on debt and derivatives combined decreased to ~~$1,271 million and $385~~$384 million from ~~$1,865 million and $563~~$455 million for the same ~~periods~~period in fiscal ~~2021. The decrease in interest expense on debt is due to a decrease in weighted average interest rates, partially offset by an increase in portfolio size.~~2022. The decrease in interest expense on derivatives is primarily due to a decrease in interest expense on pay-fixed swaps, partially offset by a decrease in net interest income on pay-float swaps. The increase in interest expense on ~~pay-float swaps.~~debt is primarily due to an increase in weighted average interest rates.

Gains or losses on debt denominated in foreign currencies represent the impact of translation adjustments. We use foreign currency swaps to economically hedge the debt denominated in foreign currencies. During the first ~~nine months and third~~ quarter of fiscal 2023 and 2022, we recorded net losses of ~~$171~~$121 million and ~~$91~~$35 million, respectively, primarily ~~as a result of~~due to increases in foreign currency swap rates across ~~various currencies in which our debt is denominated. During~~ the ~~first nine months and third quarter of fiscal 2021, we recorded net gains of $51 million and $3 million, respectively, primarily as a result of decreases in foreign currency swap rates across~~ various currencies in which our debt is denominated.

Gains or losses on U.S. dollar interest rate swaps represent the change in the valuation of interest rate swaps. During the first ~~nine months and third~~quarter of fiscal 2023, we recorded losses of $58 million, as losses on pay-float swaps exceeded gains on pay-fixed swaps, primarily due to increases in U.S. dollar swap rates. During the first quarter of fiscal 2022, we recorded gains of ~~$387~~$204 million, ~~and $130 million, respectively,~~ primarily due to the ~~upward shift of U.S. dollar swap rates and~~impact from net interest income on our pay-fixed ~~swaps exceeding losses on our pay-float~~ swaps. During the first nine months and third quarter of fiscal 2021, we recorded gains of $280 million and $69 million, respectively, as the impact from net interest income outweighed the losses attributed to the downward shift of U.S. dollar swap rates.

Future changes in interest and foreign currency exchange rates could ~~continue to~~ result in significant volatility in our interest expense, thereby affecting our results of operations.

We recorded investment and other income, net of ~~$40 million and $12~~$33 million for the first ~~nine months and third~~ quarter of fiscal ~~2022, respectively,~~2023, compared to ~~$76 million and $21~~$19 million for the same ~~periods~~period in fiscal ~~2021.~~2022. The ~~decrease~~increase in investment and other income, net for the first ~~nine months and third~~ quarter of fiscal ~~2022,~~2023, compared to the same ~~periods~~period in fiscal ~~2021,~~2022, was primarily due to ~~lower average balances in~~higher yields on our ~~cash equivalents and~~ investment in marketable securities portfolio.

We recorded a provision for credit losses of ~~$110 million and $45~~$78 million for the first ~~nine months and third~~ quarter of fiscal ~~2022, respectively,~~2023, compared to a ~~provision~~benefit for credit losses of ~~$366 million and $118~~$3 million for the same ~~periods~~period in fiscal ~~2021.~~2022. The ~~decrease~~increase in the provision for credit losses for the first ~~nine months and third~~ quarter of fiscal ~~2022, respectively,~~2023, compared to the same ~~periods~~period in fiscal ~~2021,~~2022, was ~~primarily a result of the improvement in macroeconomic conditions and the financial performance of our dealers in fiscal 2022. In contrast, in fiscal 2021, we increased~~due to the expected credit losses ~~for~~in our retail loan portfolio, ~~due to a decline in economic conditions caused~~partially offset by the ~~COVID-19 pandemic and the restrictions designed to slow the spread of COVID-19, which resulted in stay-at-home orders, increased unemployment, and decreased consumer spending.~~continued improved dealer financial performance.

We recorded operating and administrative expenses of ~~$872 million and $293~~$299 million for the first ~~nine months and third~~ quarter of fiscal ~~2022, respectively,~~2023, compared to ~~$818 million and $268~~$292 million for the same ~~periods~~period in fiscal 2021. The increase in operating and administrative expenses for the first nine months and third quarter of fiscal 2022, respectively, compared the same periods in fiscal 2021, was primarily due to an increase in employee and technology expenses.2022.

The following table summarizes key results of our voluntary protection operations:

	Three months ended							Nine months ended							Three months ended
	December 31,				Percentage			December 31,				Percentage			June 30,					Percentage
	2021		2020		Change			2021		2020		change			2022			2021		change
Contracts (units in thousands)
Issued		677		662		2	%		2,296		1,872		23	%		770			824		(7	)%
Average in force		10,063		9,526		6	%		9,866		9,465		4	%		10,240			9,816		4	%

(Dollars in millions)
Voluntary protection contract revenues and insurance earned premiums	$	255	$	241		6	%	$	758	$	714		6	%	$	259		$	249		4	%
Investment and other income, net		64		158		(59	)%		199		369		(46	)%
Investment and other (loss) income, net																(339	)		137		(347	)%
Revenues from voluntary protection operations		319		399		(20	)%		957		1,083		(12	)%		(80	)		386		(121	)%

Expenses:
Voluntary protection contract expenses and insurance losses		96		98		(2	)%		303		265		14	%		107			108		(1	)%
Operating and administrative expenses		101		86		17	%		291		270		8	%
Operating and administrative																107			92		16	%
Total expenses		197		184		7	%		594		535		11	%		214			200		7	%

Income before income taxes		122		215		(43	)%		363		548		(34	)%
Provision for income taxes		29		52		(44	)%		87		132		(34	)%
(Loss) income before income taxes																(294	)		186		(258	)%
(Benefit) provision for income taxes																(74	)		46		(261	)%

Net income from voluntary protection operations	$	93	$	163		(43	)%	$	276	$	416		(34	)%
Net (loss) income from voluntary protection operations															$	(220	)	$	140		(257	)%

Our voluntary protection operations reported net ~~income~~loss of ~~$276 million and $93~~$220 million for the first ~~nine months and third~~ quarter of fiscal ~~2022, respectively,~~2023, compared to ~~$416 million and $163~~net income of $140 million for the same ~~periods~~period in fiscal ~~2021.~~2022. The decrease in net income from voluntary protection operations for the first ~~nine months~~quarter of fiscal ~~2022,~~2023, compared to the same period in fiscal ~~2021,~~2022, was primarily due to a ~~$170~~$476 million decrease in investment and other income, net, and a $38 million increase in voluntary protection contract expenses and insurance losses, partially offset by a $45 million decrease in provision for income taxes, and a $44 million increase in voluntary protection contract revenues and insurance earned premiums. The decrease in net income from voluntary protection operations for the third quarter of fiscal 2022, compared to same period in fiscal 2021, was primarily due to a $94 million decrease in investment and other(loss) income, net, and a $15 million increase in operating and administrative expenses, partially offset by a ~~$23~~$120 million decrease in provision for income ~~taxes, and a $14 million increase in voluntary protection contract revenues and insurance earned premiums.~~taxes.

Contracts issued ~~increased 23 percent and 2~~decreased 7 percent in the first ~~nine months and third~~ quarter of fiscal ~~2022~~2023, compared to the same ~~periods in fiscal 2021. The higher contract issuances for the first nine months of fiscal 2022, compared to the same~~ period in fiscal ~~2021, was mainly~~2022, primarily due to ~~the continued growth~~a decrease in financing contract volumes as a result of our private label services and our issuances were negatively impacted in fiscal year 2021 by the decline in economic conditions caused by the COVID-19 pandemic and the restrictions designed to slow the spread of COVID-19.lower new vehicles inventory levels. The average number of contracts in force increased 4 percent ~~and 6 percent~~ for the first ~~nine months and third~~ quarter of fiscal ~~2022~~2023, ~~respectively,~~ compared to the same ~~periods~~period in fiscal ~~2021~~2022, due to net growth in the voluntary protection portfolio compared to prior years, most notably in prepaid maintenance, vehicle services, and guaranteed auto protection ~~and vehicle services~~ contracts.

Our voluntary protection operations reported voluntary protection contract revenues and insurance earned premiums of ~~$758 million and $255~~$259 million for the first ~~nine months and third~~ quarter of fiscal ~~2022, respectively,~~2023, compared to ~~$714 million and $241~~$249 million for the same ~~periods~~period in fiscal ~~2021.~~2022. Voluntary protection contract revenues and insurance earned premiums represent revenues from in force contracts and are affected by issuances as well as the level of coverage, age, and mix of in force contracts. Voluntary protection contract revenues and insurance earned premiums are recognized over the term of the contracts in relation to the timing and level of anticipated claims. The increase in voluntary protection contract revenues and insurance earned premiums for the first ~~nine months and third~~ quarter of fiscal ~~2022,~~2023, compared to the same ~~periods~~period in fiscal ~~2021,~~2022, was primarily due to an increase in our average in force contracts resulting from net growth in the voluntary protection portfolio compared to prior years.

Our voluntary protection operations reported investment and other ~~income,~~loss, net of ~~$199~~$339 million for the first ~~nine months of fiscal 2022, compared to $369 million for the same period in fiscal 2021. Our voluntary protection operations reported investment and other income, net of $64 million for the third~~ quarter of fiscal ~~2022,~~2023, compared to investment and other income, net of ~~$158~~$137 million for the same period in fiscal ~~2021.~~2022. Investment and other (loss) income, net, consists primarily of dividend and interest income, realized gains and losses on investments in marketable securities, changes in fair value from equity and available-for-sale debt securities for which the fair value option was elected, and credit loss expense on available-for-sale debt securities, if any. The decrease in investment and other (loss) income, net for the first ~~nine months~~quarter of fiscal ~~2022,~~2023, compared to the same period in fiscal ~~2021,~~2022, was primarily due to ~~lower gains~~losses from changes in fair value on our equity investments and available-for-sale debt securities for which the fair value option was elected and losses from sales of ~~fixed income~~marketable securities as ~~well as lower dividend income. The decrease in investment and other income, net for the third quarter~~a result of ~~fiscal 2022, compared~~market volatility. Should market volatility persist or become more severe, it could continue to ~~the same period in fiscal 2021, was primarily due to lower dividend income and lower gains~~negatively impact results from ~~changes in fair value on our equity investments.~~voluntary protection operations.

Our voluntary protection operations reported voluntary protection contract expenses and insurance losses of ~~$303 million and $96~~$107 million for the first ~~nine months and third~~ quarter of fiscal ~~2022, respectively,~~2023, compared to ~~$265 million and $98~~$108 million for the same ~~periods~~period in fiscal ~~2021.~~2022. Voluntary protection contract expenses and insurance losses incurred are a function of the amount of covered risks, the frequency and severity of claims associated with in force contracts and the level of risk retained by our voluntary protection operations. Voluntary protection contract expenses and insurance losses include amounts paid and accrued for reported losses, estimates of losses incurred but not reported, and any related claim adjustment expenses. ~~The increase in voluntary protection contract expenses and insurance losses for~~ ~~the first nine months of fiscal 2022,~~ ~~compared to~~ ~~the same period in fiscal 2021,~~ was primarily due to an increase in frequency of claims in our prepaid maintenance contracts, vehicle service contracts and tire and wheel contracts. Our voluntary protection contract expenses and insurance losses in fiscal 2021 were impacted by lower claims as a result of changes in consumer driving patterns caused by the COVID-19 pandemic, including restrictions and other changes in behavior.

Our voluntary protection operations operating and administrative expenses increased to ~~$291 million and $101~~$107 million for the first ~~nine months and third~~ quarter of fiscal ~~2022, respectively,~~2023, compared to ~~$270 million and $86~~$92 million for the same ~~periods~~period in fiscal ~~2021.~~2022. The increase in operating and administrative expenses for the first ~~nine months and third~~ quarter of fiscal ~~2022~~2023, compared to the same ~~periods~~period in fiscal ~~2021~~2022, was primarily attributable to higher ~~acquisition and other~~ product expenses driven by the continued growth of our voluntary protection product business as well as higher dealer back-end ~~program expenses, and overhead~~ expenses. ~~Insurance dealer~~Dealer back-end program expenses are incentives or expense reduction programs we offer to dealers based on certain performance criteria.

We recorded a provision for income taxes of ~~$697 million and $233~~$51 million for the first ~~nine months and third~~ quarter of fiscal ~~2022, respectively,~~2023, compared to ~~$546 million and $215~~$267 million for the same ~~periods~~period in fiscal ~~2021.~~2022. Our effective tax rate was 23 percent ~~and 24~~for the first quarter of fiscal 2023, compared to 22 percent for the ~~first nine months and third quarter of fiscal 2022, respectively, compared to 24 percent for each of the~~ same ~~periods~~period in fiscal ~~2021.~~2022. The ~~increase~~decrease in the provision for income taxes for the first ~~nine months and third~~ quarter of fiscal ~~2022, compared to the same periods in fiscal 2021, was primarily due to the increase in income before income taxes. The lower effective tax rate for the first nine months of fiscal 2022,~~2023, compared to the same period in fiscal ~~2021,~~2022, was primarily due to the decrease in income before income taxes. The higher effective tax rate for the first quarter of fiscal 2023, compared to the same period in fiscal 2022, was primarily attributable to the larger impact of permanent differences between book and tax ~~benefit from~~on lower income before income taxes in the ~~federal~~current period, partially offset by a lower state effective tax ~~credits recognized in fiscal 2022 as well as the enacted state tax law changes that resulted in higher state tax expense in fiscal 2021.~~rate.

The composition of our vehicle contract volume and market share is summarized below:

		Three months ended									Nine months ended										Three months ended
		December 31,						Percentage			December 31,						Percentage				June 30,						Percentage
(units in thousands):		2021			2020			change			2021			2020			Change				2022			2021			change
Vehicle financing volume¹:
New retail contracts			158			198			(20	)%		523			570			(8	)%			175			192			(9	)%
Used retail contracts			106			114			(7	)%		355			354			-	%			124			126			(2	)%
Lease contracts			72			142			(49	)%		349			355			(2	)%			63			154			(59	)%
Total			336			454			(26	)%		1,227			1,279			(4	)%			362			472			(23	)%

TMNA subvened vehicle financing volume²:	TMNA subvened vehicle financing volume²:																			TMNA subvened vehicle financing volume²:
New retail contracts			63			68			(7	)%		174			234			(26	)%			93			54			72	%
Used retail contracts			8			8			-	%		21			50			(58	)%			8			6			33	%
Lease contracts			42			107			(61	)%		207			257			(19	)%			36			101			(64	)%
Total			113			183			(38	)%		402			541			(26	)%			137			161			(15	)%

Market share of TMNA sales ³:			54.3	%		59.1	%					55.1	%		61.5	%						53.5	%		55.9	%

The volume of our retail and lease contracts, which are acquired primarily from Toyota, Lexus, and private label dealers, is dependent upon TMNA and private label sales volume, the level of TMNA, private label, and third-party sponsored subvention and other incentive programs, as well as TMCC competitive rate and other incentive programs.

Our financing volume decreased ~~4 percent and 26~~23 percent for the first ~~nine months and third~~ quarter of fiscal ~~2022,~~2023, compared to the same ~~periods~~period in fiscal ~~2021,~~2022, primarily due to lower new vehicles inventory ~~levels.~~levels and lower total levels of incentives and subvention. The ongoing challenging economic conditions, ~~caused by the COVID-19 pandemic,~~ including production halts and supply shortages affecting the automotive industry and additional delays affecting the supply chain and logistics networks, have resulted in a decrease in the availability of new ~~vehicles. This has led to lower levels of incentives and subvention on new and used retail contracts and lease contracts, which has resulted in increased competition~~vehicles from ~~other financial institutions.~~pre-pandemic levels.

Our market share of TMNA sales decreased approximately ~~6 percentage points and approximately 5~~2 percentage points for the first ~~nine months and third~~ quarter of fiscal ~~2022, respectively,~~2023, compared to the same ~~periods~~period in fiscal ~~2021,~~2022, due to ~~lower levels of incentives and subvention on new and used retail and lease contracts and~~ increased competition from other financial institutions.

	December 31,		March 31,		Percentage			June 30,		March 31,		Percentage
(Dollars in millions)	2021		2021		change			2022		2022		change
Net Earning Assets
Finance receivables, net
Retail finance receivables, net	$	70,716	$	65,653		8	%	$	74,278	$	72,185		3	%
Dealer financing, net ¹		10,209		13,539		(25	)%		10,544		10,247		3	%
Total finance receivables, net		80,925		79,192		2	%		84,822		82,432		3	%
Investments in operating leases, net		36,836		37,091		(1	)%		33,703		35,455		(5	)%
Net earning assets	$	117,761	$	116,283		1	%	$	118,525	$	117,887		1	%


Dealer Financing
(Number of dealers serviced)
Toyota, Lexus, and private label dealers¹		1,015		1,002		1	%		1,118		966		16	%
Dealers outside of the Toyota/Lexus/private label dealer network		411		395		4	%		393		399		(2	)%
Total number of dealers receiving wholesale financing		1,426		1,397		2	%		1,511		1,365		11	%

Dealer inventory outstanding (units in thousands)		65		185		(65	)%		73		64		14	%

Our new retail contract volume decreased ~~8 percent and 20~~9 percent for the first ~~nine months and third~~ quarter of fiscal 2022, respectively, compared to the same periods in fiscal 2021, primarily due to a decrease in the availability of new vehicles and lower levels of incentives and subvention on new contracts. Economic conditions caused by the COVID-19 pandemic, including production halts and supply shortages affecting the automotive industry and additional delays affecting the supply chain and logistics networks, have resulted in a decrease in the availability of new vehicles.

~~Our used retail contracts remained relatively unchanged for the first nine months of fiscal 2022,~~2023, compared to the same period in fiscal ~~2021.~~ 2022. Despite higher levels of incentives and subvention, our new retail contracts have decreased due to lower vehicles inventory levels and increased competition from other financial institutions.

Our used retail contracts decreased by 72 percent for the ~~third~~first quarter of fiscal ~~2022,~~2023, compared to same period in fiscal ~~2021,~~2022, due to increased competition in the used vehicle marketplace caused by the reduction in new vehicle inventory levels.

Our retail finance receivables, net increased 83 percent at ~~December 31, 2021~~June 30, 2022 as compared to March 31, ~~2021~~2022 due to higher retail contracts outstanding and higher average amount financed.

Our lease contract volume decreased ~~2 percent and 49~~59 percent for the first ~~nine months and third~~ quarter of fiscal ~~2022,~~2023, compared to the same ~~periods~~period in fiscal ~~2021,~~2022, primarily due to the decrease in the availability of new vehicles and lower levels of incentive and subvention programs. Our investments in operating leases, net, ~~remained relatively unchanged~~decreased 5 percent at ~~December 31, 2021,~~June 30, 2022, as compared to March 31, ~~2021~~2022 due to lower average operating lease units outstanding, offset by higher vehicle values.

Dealer financing, net ~~decreased 25~~increased 3 percent at ~~December 31, 2021,~~June 30, 2022, as compared to March 31, ~~2021,~~2022, primarily due to ~~a decrease~~an increase in ~~dealer~~revolving credit financing as well as the new inventory ~~and related financing.~~ ~~Economic conditions caused by~~financing volume we gained from the ~~COVID-19 pandemic,~~launch of our private label financial services to Bass Pro Shops on April 1, 2022.

The ongoing challenging economic conditions, including production halts and supply shortages affecting the automotive industry and additional delays affecting the supply chain and logistics networks, have resulted in a temporary decrease in dealer new vehicle inventory levels.

The primary factors affecting our exposure to residual value risk are the levels at which residual values are established at lease inception, current economic conditions and outlook, projected end-of-term market values, and the resulting impact on depreciation expense and lease return rates. Higher average operating lease units outstanding and the resulting increase in maturities, a higher supply of used vehicles, as well as deterioration in actual and expected used vehicle values for Toyota, Lexus, and private label vehicles could unfavorably impact return rates, residual values, and depreciation expense.

On a quarterly basis, we review the estimated end-of-term market values of leased vehicles to assess the appropriateness of our carrying values. To the extent the estimated end-of-term market value of a leased vehicle is lower than the residual value established at lease inception, the residual value of the leased vehicle is adjusted downward so that the carrying value at lease end will approximate the estimated end-of-term market value. For investments in operating leases, adjustments are made on a straight-line basis over the remaining terms of the lease contracts and are included in Depreciation on operating leases in our Consolidated Statements of Income as a change in accounting estimate.

Depreciation on operating leases and average operating lease units outstanding are as follows:

	Three months ended							Nine months ended							Three months ended
	December 31,				Percentage			December 31,				Percentage			June 30,				Percentage
	2021		2020		change			2021		2020		change			2022		2021		change
Depreciation on operating leases (dollars in millions)	$	1,460	$	1,450		1	%	$	4,400	$	4,484		(2	)%	$	1,409	$	1,441		(2	)%
Average operating lease units outstanding (in thousands)		1,308		1,326		(1	)%		1,330		1,337		(1	)%		1,219		1,342		(9	)%

Depreciation expense on operating leases decreased 2 percent for the first ~~nine months~~quarter of fiscal ~~2022,~~2023, as compared to the same period in fiscal ~~2021,~~2022, primarily due to ~~lower residual value losses as a result of continued historically high levels of average used vehicle values and~~ lower average operating lease units ~~outstanding. Depreciation expense on operating leases remained relatively consistent for the third quarter~~outstanding, partially offset by higher expectations of ~~fiscal 2022, as compared to the same period in fiscal 2021.~~ residual value losses.

Our credit loss experience may be affected by a number of factors including the economic environment, our purchasing, servicing and collections practices, used vehicle market conditions and subvention. Changes in the economy that impact the consumer such as increasing interest rates, and a rise in the unemployment rate as well as higher debt balances, coupled with deterioration in actual and expected used vehicle values, could increase our credit losses. In addition, a decline in the effectiveness of our collection practices could also increase our credit losses. We continuously evaluate and refine our purchasing practices and collection efforts to minimize risk. In addition, subvention contributes to our overall portfolio quality, as subvened contracts typically have higher credit scores than non-subvened contracts.

	December 31,		March 31,		December 31,		June 30,		March 31,		June 30,
	2021		2021		2020		2022		2022		2021
Average consumer portfolio origination FICO score		742		744		744		742		742		740
Average retail loan origination term (months) ¹		69		68		68		69		69		69

While we have included the average origination FICO score to illustrate origination trends, we also use a proprietary credit scoring system to evaluate an applicant’s risk profile. Refer to Part I. Item 1. Business “Finance Operations” in our fiscal ~~2021~~2022 Form 10-K for further discussion of the proprietary manner in which we evaluate risk.

The following table provides information related to our consumer finance receivables and investment in operating leases:

	December 31,			March 31,			December 31,			June 30,			March 31,			June 30,
	2021			2021			2020			2022			2022			2021
Net charge-offs as a percentage of average finance receivables ¹		0.18	%		0.29	%		0.32	%
Net charge-offs as a percentage of average finance receivables ^{1, 5}											0.33	%		0.22	%		0.19	%

Default frequency as a percentage of outstanding finance receivables contracts ¹		0.71	%		0.90	%		0.86	%		0.83	%		0.72	%		0.85	%

Average finance receivables loss severity per unit ²	$	8,598		$	10,035		$	10,138		$	10,588		$	9,012		$	8,417

Aggregate balances for accounts 60 or more days past due as a percentage of earning assets^{3, 4}
Aggregate balances for accounts 60 or more days past due as a percentage of earning assets^{3, 4, 5}
Finance receivables		0.51	%		0.27	%		0.38	%		0.49	%		0.43	%		0.32	%
Operating leases		0.28	%		0.20	%		0.30	%		0.30	%		0.26	%		0.19	%

Management considers historical credit loss information when assessing the allowance for credit losses. Historical credit losses are primarily driven by two factors: default frequency and loss severity. Our net charge-offs as a percentage of average finance receivables for the first ~~nine months~~quarter of fiscal ~~2022 decreased~~2023 increased to ~~0.18~~0.33 percent ~~at December 31, 2021~~ from ~~0.32~~0.19 percent ~~at December 31, 2020.~~for the same period in fiscal 2022. Our average finance receivables loss severity per unit for the first ~~nine months~~quarter of fiscal ~~2022 decreased~~2023 increased to ~~$8,598~~$10,588 from ~~$10,138~~$8,417 in the first ~~nine months~~quarter of fiscal ~~2021.~~2022. The increase in net charge-offs and loss severity per unit were due to higher average amounts financed, a higher percentage of used vehicles financed, and higher delinquencies. Our default frequency as a percentage of outstanding finance receivable contracts ~~decreased to 0.71~~was relatively consistent at 0.83 percent for the first ~~nine months~~quarter of fiscal ~~2022,~~2023, compared to ~~0.86~~0.85 percent in the same period in fiscal 2021. The changes in our net charge-offs, loss severity per unit, and default frequency were primarily due to higher average used vehicle values, which reduced net charge-offs, loss per unit, and default frequency.2022.

Our aggregate balances for accounts 60 or more days past due as a percentage of finance receivables was ~~0.51~~0.49 percent at ~~December 31, 2021~~June 30, 2022, compared to ~~0.38~~0.32 percent at ~~December 31, 2020,~~June 30, 2021, and ~~0.27~~0.43 percent at March 31, ~~2021.~~2022. Our aggregate balances for accounts 60 or more days past due as a percentage of operating leases was ~~0.28 percent at December 31, 2021, compared to~~ 0.30 percent at ~~December 31, 2020,~~June 30, 2022, compared to 0.19 percent at June 30, 2021, and ~~0.20~~0.26 percent at March 31, ~~2021. Along with our typical seasonal pattern for delinquency,~~2022. Our delinquencies increased at June 30, 2022, compared to June 30, 2021 and March 31, 2022 due to the finance receivables delinquency rate in fiscal 2021 was positively impacted by the retail payment extension programs offered to our customers and dealers impacted by COVID-19, as well as influenced by governmentongoing challenging economic conditions.

stimulus and other external programs in fiscal 2021, which are no longer available. In addition, for a portion of fiscal 2021, as a result of a decline in economic conditions caused by the COVID-19 pandemic, there were government restrictions on repossession activities in certain states for which we have a high percentage of lease contracts which had a negative impact on our operating lease payments delinquency. If the negative economic conditions caused by the COVID-19 pandemic continue, delinquencies and charge-offs could increase.

We maintain an allowance for credit losses which is measured by an impairment model that reflects lifetime expected losses.

The allowance for credit losses for our retail consumer portfolio is measured on a collective basis when loans have similar risk characteristics such as loan-to-value ratio, book payment-to-income ratio, FICO score at origination, collateral type, contract term, and other relevant factors. We use statistical models to estimate lifetime expected credit losses of our retail loan portfolio segment by applying probability of default and loss given default to the exposure at default on a loan level basis. Probability of default models are developed from internal risk scoring models which consider variables such as delinquency status, historical default frequency, and other credit quality indicators. Other credit quality indicators include loan-to-value ratio, book payment-to-income ratio, FICO score at origination, collateral type (new or used, Lexus, Toyota, or private label), and contract term. Loss given default models forecast the extent of losses given that a default has occurred and consider variables such as collateral, trends in recoveries, historical loss severity, and other contract structure variables. Exposure at default represents the expected outstanding principal balance, including the effects of expected prepayment when applicable. The lifetime expected credit losses incorporate the probability-weighted forward-looking macroeconomic forecasts for baseline, favorable, and adverse scenarios. The loan lifetime is regarded by management as the reasonable and supportable period. We use macroeconomic forecasts from a third party and update such forecasts quarterly. On an ongoing basis, we review our models, including macroeconomic factors, the selection of macroeconomic scenarios and their weighting to ensure they reflect the risk of the portfolio.

For the allowance for credit losses for our dealer portfolio, an allowance for credit losses is established for both outstanding dealer finance receivables and certain unfunded off-balance sheet lending commitments. The allowance for credit losses is measured on a collective basis when loans have similar risk characteristics such as dealer group internal risk rating and loan-to-value ratios. We measure lifetime expected credit losses of our dealer products portfolio segment by applying probability of default and loss given default to the exposure at default on a loan level basis. Probability of default is primarily established based on internal risk assessments. The probability of default model also considers qualitative factors related to macroeconomic outlooks. Loss given default is established based on the nature and market value of the collateral, loan-to-value ratios and other credit quality indicators. Exposure at default represents the expected outstanding principal balance. The lifetime of the loan or lending commitment is regarded by management as the reasonable and supportable period. On an ongoing basis, we review our models, including macroeconomic outlooks, to ensure they reflect the risk of the portfolio.

If management does not believe the models reflect lifetime expected credit losses, a qualitative adjustment is made to reflect management judgment regarding observable changes in recent or expected economic trends and conditions, portfolio composition, and other relevant factors.

The following table provides information related to our allowance for credit losses for finance receivables and certain off-balance sheet lending commitments:

	Three months ended						Nine months ended						Three months ended
	December 31,						December 31,						June 30,
	2021			2020			2021			2020			2022			2021
Allowance for credit losses at beginning of period	$	1,224		$	1,174		$	1,215		$	727		$	1,272		$	1,215
Adoption of ASU 2016-13 ¹		-			-			-			292
Charge-offs		(64	)		(113	)		(152	)		(228	)		(91	)		(33	)
Recoveries		14			20			46			42			15			17
Provision for credit losses		45			118			110			366			78			(3	)
Allowance for credit losses at end of period ²	$	1,219		$	1,199		$	1,219		$	1,199
Allowance for credit losses at end of period ¹													$	1,274		$	1,196

Our allowance for credit losses increased by ~~$20~~$78 million from ~~$1,199~~$1,196 million at ~~December 31, 2020~~June 30, 2021 to ~~$1,219~~$1,274 million at ~~December 31, 2021. The increase in the allowance for credit losses was primarily~~June 30, 2022, due to the increase in size of our retail loan portfolio and an increase in delinquencies, partially offset by ~~lower expected credit losses~~the continued improved dealer financial performance in ~~response to improvements in the macroeconomic forecast as well as a decrease in size of our dealer products portfolio.~~fiscal 2023.

Future changes in the economy that impact the consumer and consumer confidence such as increasing interest rates and a rise in the unemployment rate as well as higher debt balances, coupled with deterioration in actual and expected used vehicle values, could result in further increases to our allowance for credit losses. In addition, a decline in the effectiveness of our collection practices could also increase our allowance for credit losses.

Our primary material cash requirements include the acquisition of finance receivables and investment in operating leases from dealers, providing various financing to dealers, payments related to debt and swaps, operating expenses, voluntary protection contract expenses, income taxes, and dividend payments.

Liquidity risk is the risk relating to our ability to meet our financial obligations when they come due. Our liquidity strategy is to ensure that we maintain the ability to fund assets and repay liabilities in a timely and cost-effective manner, even in adverse market conditions. Our strategy includes raising funds via the global capital markets and through loans, credit facilities, and other transactions as well as generating liquidity from our earning assets. This strategy has led us to develop a diversified borrowing base that is distributed across a variety of markets, geographies, investors and financing structures.

Liquidity management involves forecasting and maintaining sufficient capacity to meet our cash needs, including unanticipated events. To ensure adequate liquidity through a full range of potential operating environments and market conditions, we conduct our liquidity management and business activities in a manner that will preserve and enhance funding stability, flexibility and diversity. Key components of this operating strategy include a strong focus on developing and maintaining direct relationships with commercial paper investors and wholesale market funding providers and maintaining the ability to sell certain assets when and if conditions warrant.

We develop and maintain contingency funding plans and regularly evaluate our liquidity position under various operating circumstances, allowing us to assess how we will be able to operate through a period of stress when access to normal sources of capital is constrained. The plans project funding requirements during a potential period of stress, specify and quantify sources of liquidity, and outline actions and procedures for effectively managing through the problem period. In addition, we monitor the ratings and credit exposure of the lenders that participate in our credit facilities to ascertain any issues that may arise with potential draws on these facilities if that contingency becomes warranted.

We maintain broad access to a variety of domestic and global markets and may choose to realign our funding activities depending upon market conditions, relative costs, and other factors. We believe that our funding sources, combined with operating and investing activities, provide sufficient liquidity to meet future funding requirements and business growth. For liquidity purposes, we hold cash in excess of our immediate funding needs. These excess funds are invested in short-term, highly liquid and investment grade money market instruments as well as certain available-for-sale debt securities, which provide liquidity for our short-term funding needs and flexibility in the use of our other funding sources. We maintained excess funds ranging from ~~$7.5~~$7.3 billion to ~~$11.4~~$12.2 billion with an average balance of ~~$9.2~~$10.1 billion during the quarter ended ~~December 31, 2021.~~June 30, 2022. The amount of excess funds we hold may fluctuate, depending on market conditions and other factors. We also have access to liquidity under the $5.0 billion credit facility with Toyota Motor Sales U.S.A., Inc. (“TMS”), which as of ~~December 31, 2021~~June 30, 2022, was not drawn upon and had no outstanding balance as further described in Note 7 – Debt and Credit Facilities of the Notes to the Consolidated Financial Statements. We believe we have sufficient capacity to meet our short-term funding requirements and manage our liquidity.

Credit support is provided to us by our indirect parent Toyota Financial Services Corporation (“TFSC”), and, in turn to TFSC by TMC. Taken together, these credit support agreements provide an additional source of liquidity to us, although we do not rely upon such credit support in our liquidity planning and capital and risk management. The credit support agreements are not a guarantee by TMC or TFSC of any securities or obligations of TFSC or TMCC, respectively. The fees paid pursuant to these agreements are disclosed in Note 11 – Related Party Transactions of the Notes to Consolidated Financial Statements.

TMC’s obligations under its credit support agreement with TFSC rank pari passu with TMC’s senior unsecured debt obligations. Refer to Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations “Liquidity and Capital Resources” in our fiscal ~~2021~~2022 Form 10-K for further discussion.

We routinely monitor global financial conditions and our financial exposure to our global counterparties, particularly in those countries experiencing significant economic, fiscal or political strain, and the corresponding likelihood of default. As of ~~December 31, 2021,~~June 30, 2022, our exposure to foreign sovereign and non-sovereign counterparties was not significant. Refer to the “Liquidity and Capital Resources - Credit Facilities and Letters of Credit” section and Part I, Item 1A. Risk Factors – “The failure or commercial soundness of our counterparties and other financial institutions may have an effect on our liquidity, results of operations or financial condition” in our fiscal ~~2021~~2022 Form 10-K for further discussion.

The following table summarizes the components of our outstanding debt which includes unamortized premiums, discounts, debt issuance costs and the effects of foreign currency translation adjustments:

	December 31, 2021							March 31, 2021							June 30, 2022							March 31, 2022
(Dollars in millions)	Face value		Carrying value		Weighted average contractual interest rates			Face value		Carrying value		Weighted average contractual interest rates			Face value		Carrying value		Weighted average contractual interest rates			Face value		Carrying value		Weighted average contractual interest rates
Unsecured notes and loans payable
Commercial paper	$	17,001	$	16,992		0.17	%	$	17,027	$	17,021		0.20	%	$	17,483	$	17,429		1.27	%	$	16,896	$	16,876		0.43	%
U.S. medium term note ("MTN") program		45,387		45,245		1.45	%		44,294		44,149		1.64	%		46,202		46,049		1.89	%		46,387		46,235		1.55	%
Euro medium term note ("EMTN") program		14,076		13,991		1.54	%		16,262		16,173		1.57	%		13,183		13,115		1.55	%		13,891		13,813		1.54	%
Other debt		5,829		5,826		1.06	%		8,176		8,170		1.33	%		4,951		4,948		2.42	%		5,368		5,364		1.28	%
Total Unsecured notes and loans payable		82,293		82,054		1.17	%		85,759		85,513		1.31	%		81,819		81,541		1.73	%		82,542		82,288		1.30	%
Secured notes and loans payable		28,114		28,068		0.91	%		24,256		24,212		1.29	%		28,933		28,882		1.54	%		26,907		26,864		1.01	%
Total debt	$	110,407	$	110,122		1.10	%	$	110,015	$	109,725		1.31	%	$	110,752	$	110,423		1.68	%	$	109,449	$	109,152		1.23	%

The following table summarizes the significant activities by program of our Unsecured notes and loans payable:

(Dollars in millions)	Commercial paper ¹			MTNs			EMTNs			Other			Total Unsecured notes and loans payable			Commercial paper ¹		MTNs			EMTNs			Other			Total Unsecured notes and loans payable
Balance at March 31, 2021	$	17,027		$	44,294		$	16,262		$	8,176		$	85,759
Balance at March 31, 2022																$	16,896	$	46,387		$	13,891		$	5,368		$	82,542
Issuances		-			11,605			2,140			1,867			15,612			587		3,000			-			-			3,587
Maturities and terminations		(26	)		(10,512	)		(4,060	)		(4,210	)		(18,808	)		-		(3,185	)		(125	)		(417	)		(3,727	)
Non-cash changes in foreign currency rates		-			-			(266	)		(4	)		(270	)		-		-			(583	)		-			(583	)
Balance at December 31, 2021	$	17,001		$	45,387		$	14,076		$	5,829		$	82,293
Balance at June 30, 2022																$	17,483	$	46,202		$	13,183		$	4,951		$	81,819

Short-term funding needs are met through the issuance of commercial paper in the U.S. Commercial paper outstanding under our commercial paper programs ranged from approximately ~~$16.7~~$16.9 billion to ~~$17.7~~$17.9 billion during the quarter ended ~~December 31, 2021,~~June 30, 2022, with an average outstanding balance of ~~$17.1~~$17.2 billion. Our commercial paper programs are supported by the credit facilities discussed under the heading “Credit Facilities and Letters of Credit.” We believe we have sufficient capacity to meet our short-term funding requirements and manage our liquidity.

We maintain a shelf registration statement with the Securities and Exchange Commission (“SEC”) to provide for the issuance of debt securities in the U.S. capital markets to retail and institutional investors. We currently qualify as a well-known seasoned issuer under SEC rules, which allows us to issue under our registration statement an unlimited amount of debt securities during the three-year period ending January 2024. Debt securities issued under the U.S. shelf registration statement are issued pursuant to the terms of an indenture which requires TMCC to comply with certain covenants, including negative pledge and cross-default provisions. We are currently in compliance with these covenants.

Our EMTN program, shared with our affiliates Toyota Motor Finance (Netherlands) B.V., Toyota Credit Canada Inc. and Toyota Finance Australia Limited (TMCC and such affiliates, the “EMTN Issuers”), provides for the issuance of debt securities in the international capital markets. In September 2021, the EMTN Issuers renewed the EMTN program for a one-year period. The maximum aggregate principal amount authorized under the EMTN Program to be outstanding at any time is €60.0 billion or the equivalent in other currencies, of which ~~€27.2~~€27.8 billion was available for issuance at ~~December 31, 2021.~~June 30, 2022. The authorized amount is shared among all EMTN Issuers. The authorized aggregate principal amount under the EMTN program may be increased from time to time. Debt securities issued under the EMTN program are issued pursuant to the terms of an agency agreement. Certain debt securities issued under the EMTN program are subject to negative pledge provisions. We are currently in compliance with these covenants.

We may issue other debt securities through the global capital markets or enter into other unsecured financing arrangements, including those in which we agree to use the proceeds solely to acquire retail or lease contracts financing new Toyota and Lexus vehicles of specified “green” models. The terms of these “green” bond transactions have been consistent with the terms of other similar transactions except that the proceeds we receive are included in Restricted cash and cash equivalents on our Consolidated Balance Sheets, when applicable.

TMCC has entered into term loan agreements with various banks. These term loan agreements contain covenants and conditions customary in transactions of this nature, including negative pledge provisions, cross-default provisions and limitations on certain consolidations, mergers and sales of assets. We are currently in compliance with these covenants and conditions.

We may borrow from affiliates on terms based upon a number of business factors such as funds availability, cash flow timing, relative cost of funds, and market access capabilities. Amounts borrowed from affiliates are recorded in Other liabilities on our Consolidated Balance Sheets and are therefore excluded from Debt amounts.

Asset-backed securitization of our earning asset portfolio provides us with an alternative source of funding. We regularly execute public or private securitization transactions.

The following table summarizes the significant activities of our Secured notes and loans payable:

(Dollars in millions)	Secured notes and loans payable			Secured notes and loans payable
Balance at March 31, 2021	$	24,256
Balance at March 31, 2022				$	26,907
Issuances		14,304			5,629
Maturities and terminations		(10,446	)		(3,603	)
Balance at December 31, 2021	$	28,114
Balance at June 30, 2022				$	28,933

We securitize finance receivables and beneficial interests in investments in operating leases (“Securitized Assets”) using a variety of structures. Our securitization transactions involve the transfer of Securitized Assets to bankruptcy-remote special purpose entities. These bankruptcy-remote entities are used to ensure that the Securitized Assets are isolated from the claims of creditors of TMCC and that the cash flows from these assets are available solely for the benefit of the investors in these asset-backed securities. Investors in asset-backed securities do not have recourse to our other assets, and neither TMCC nor our affiliates guarantee these obligations. We are not required to repurchase or make reallocation payments with respect to the Securitized Assets that become delinquent or default after securitization. As seller and servicer of the Securitized Assets, we are required to repurchase or make a reallocation payment with respect to the underlying assets that are subsequently discovered not to have met specified eligibility requirements. This repurchase obligation is customary in securitization transactions. With the exception of our revolving asset-backed securitization program, funding obtained from our securitization transactions is repaid as the underlying Securitized Assets amortize.

We service the Securitized Assets in accordance with our customary servicing practices and procedures. Our servicing duties include collecting payments on Securitized Assets and submitting them to a trustee for distribution to security holders and other interest holders. We prepare monthly servicer certificates on the performance of the Securitized Assets, including collections, investor distributions, delinquencies, and credit losses. We also perform administrative services for the special purpose entities.

Our use of special purpose entities in securitizations is consistent with conventional practice in the securitization market. None of our officers, directors, or employees hold any equity interests or receive any direct or indirect compensation from our special purpose entities. These entities do not own our stock or the stock of any of our affiliates. Each special purpose entity has a limited purpose and generally is permitted only to purchase assets, issue asset-backed securities, and make payments to the security holders, other interest holders and certain service providers as required under the terms of the transactions.

Our securitizations are structured to provide credit enhancement to reduce the risk of loss to security holders and other interest holders in the asset-backed securities. Credit enhancement may include some or all of the following:

In addition to the credit enhancement described above, we may enter into interest rate swaps with our special purpose entities that issue variable rate debt. Under the terms of these swaps, the special purpose entities are obligated to pay TMCC a fixed rate of interest on payment dates in exchange for receiving a floating rate of interest on notional amounts equal to the outstanding balance of the secured notes and loans payable. This arrangement enables the special purpose entities to mitigate the interest rate risk inherent in issuing variable rate debt that is secured by fixed rate Securitized Assets.

Securitized Assets and the related debt remain on our Consolidated Balance Sheets. We recognize financing revenue on the Securitized Assets. We also recognize interest expense on the secured notes and loans payable issued by the special purpose entities and maintain an allowance for credit losses on the Securitized Assets to cover estimated lifetime expected credit losses using a methodology consistent with that used for our non-securitized asset portfolio. The interest rate swaps between TMCC and the special purpose entities are considered intercompany transactions and therefore are eliminated in our consolidated financial statements.

We periodically enter into term securitization transactions whereby we agree to use the proceeds solely to acquire retail and lease contracts financing new Toyota and Lexus vehicles of certain specified “green” models. The terms of these “green” securitization transactions have been consistent with the terms of our other similar transactions except that the proceeds we receive are included in Restricted cash and cash equivalents on our Consolidated Balance Sheets, when applicable.

Our secured notes also include a revolving asset-backed securitization program backed by a revolving pool of finance receivables and cash collateral. Cash flows from these receivables during the revolving period in excess of what is needed to pay certain expenses of the securitization trust and contractual interest payments on the related secured notes may be used to purchase additional receivables, provided that certain conditions are met following the purchase. The secured notes feature a scheduled revolving period, with the ability to repay the secured notes in full, after which an amortization period begins. The revolving period may also end with the amortization period beginning upon the occurrence of certain events that include certain segregated account balances falling below their required levels, credit losses or delinquencies on the pool of assets supporting the secured notes exceeding specified levels, the adjusted pool balance falling to less than 50% of the initial principal amount of the secured notes, or interest not being paid on the secured notes.

We maintain a shelf registration statement with the SEC to provide for the issuance of securities backed by Securitized Assets in the U.S. capital markets during the three-year period ending December ~~2021.~~2024. We regularly sponsor public securitization trusts that issue securities backed by retail finance receivables, including registered securities that we retain. None of these securities have defaulted, experienced any events of default or failed to pay principal in full at maturity. As of ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021,~~2022, we did not have any outstanding lease securitization transactions registered with the SEC.

For additional liquidity purposes, we maintain credit facilities, which may be used for general corporate purposes, as described below:

364-Day Credit Agreement, Three-Year Credit Agreement and Five-Year Credit Agreement

The ability to make draws is subject to covenants and conditions customary in transactions of this nature, including negative pledge provisions, cross-default provisions and limitations on certain consolidations, mergers and sales of assets. These agreements were not drawn upon and had no outstanding balances as of ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021.~~2022. We are currently in compliance with the covenants and conditions of the credit agreements described above.

We are party to a 364-day revolving securitization facility with certain bank-sponsored asset-backed conduits and other financial institutions expiring in fiscal 2023. Under the terms and subject to the conditions of this facility, the committed lenders under the facility have committed to make advances up to a facility limit of ~~$7.0~~$8.0 billion backed by eligible retail finance receivables transferred by us to a special-purpose entity acting as borrower. ~~As of December 31, 2021, $3.7~~We utilized $2.8 billion and $3.2 billion of this facility ~~was utilized.~~as of June 30, 2022 and March 31, 2022, respectively.

TMCC is party to additional unsecured credit facilities with various banks. As of ~~December 31, 2021,~~June 30, 2022, TMCC had committed bank credit facilities totaling $4.6 billion of which ~~$350 million, $2.2~~$2.0 billion, $300 million, $2.0 billion, and ~~$1.7 billion~~$300 million mature in fiscal ~~2022,~~ 2023, 2024, 2025, and ~~2025~~2026, respectively.

These credit agreements contain covenants and conditions customary in transactions of this nature, including negative pledge provisions, cross-default provisions and limitations on certain consolidations, mergers and sales of assets. These credit facilities were not drawn upon and had no outstanding balances as of ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021.~~2022. We are currently in compliance with the covenants and conditions of the credit agreements described above.

TMCC is party to a $5.0 billion three-year revolving credit facility with TMS expiring in fiscal 2025. This credit facility was not drawn upon and had no outstanding balance as of ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021.~~2022.

From time to time, we may borrow from affiliates based upon a number of business factors such as funds availability, cash flow timing, relative cost of funds, and market access capabilities.

The cost and availability of unsecured financing is influenced by credit ratings, which are intended to be an indicator of the creditworthiness of a particular company, security, or obligation. Lower ratings generally result in higher borrowing costs as well as reduced access to capital markets. Credit ratings are not recommendations to buy, sell, or hold securities, and are subject to revision or withdrawal at any time by the assigning credit rating organization. Each credit rating organization may have different criteria for evaluating risk, and therefore ratings should be evaluated independently for each organization. Our credit ratings depend in part on the existence of the credit support agreements of TFSC and TMC. Refer to “Part I, Item 1A. Risk Factors - Our borrowing costs and access to the unsecured debt capital markets depend significantly on the credit ratings of TMCC and its parent companies and our credit support arrangements” in our fiscal ~~2021~~2022 Form 10-K.

Our liabilities consist mainly of fixed and variable rate debt, denominated in U.S. dollars and various other currencies, which we issue in the global capital markets, while our assets consist primarily of U.S. dollar denominated, fixed rate receivables. We enter into interest rate swaps and foreign currency swaps to economically hedge the interest rate and foreign currency risks that result from the different characteristics of our assets and liabilities. Our use of derivative transactions is intended to reduce long-term fluctuations in the fair value of assets and liabilities caused by market movements. All of our derivative activities are authorized and monitored by our management and our Asset-Liability Committee which provides a framework for financial controls and governance to manage market risk.

All derivative instruments are recorded on the balance sheet at fair value, taking into consideration the effects of legally enforceable master netting agreements that allow us to net settle asset and liability positions and offset cash collateral held with the same counterparty on a net basis. Changes in the fair value of derivatives are recorded in Interest expense in our Consolidated Statements of Income. The derivative instruments are included as a component of Other assets or Other liabilities on our Consolidated Balance Sheets.

Our International Swaps and Derivatives Association (“ISDA”) Master Agreements are our master netting agreements which permit multiple transactions to be cancelled and settled with a single net balance paid to either party for our OTC derivatives. The master netting agreements also contain reciprocal collateral agreements which require the transfer of cash collateral to the party in a net asset position across all transactions. Our collateral agreements with substantially all our counterparties include a zero threshold, full collateralization arrangement. Although we have daily valuation and collateral exchange arrangements with all of our counterparties, due to the time required to move collateral, there may be a delay of up to one day between the exchange of collateral and the valuation of our derivatives. We would not be required to post additional collateral to the counterparties with whom we were in a net liability position at December 31, 2021, if our credit ratings were to decline, since we fully collateralize without regard to credit ratings with these counterparties. In addition, as our collateral agreements include legal right of offset provisions, collateral amounts are netted against derivative assets or derivative liabilities.

For our centrally cleared derivatives, variation margin payments are legally characterized as settlement payments and accounted for with corresponding derivative positions as one unit of account as opposed to collateral. Initial margin payments are separately recorded in Other Assets on our Consolidated Balance Sheets. We perform valuation and margin exchange on a daily basis. Similar to the OTC swaps, there may be a delay of up to one day between the exchange of margin payments and the valuation of our derivatives.

We categorize derivatives as those designated for hedge accounting (“hedge accounting derivatives”) and those that are not designated for hedge accounting (“non-hedge accounting derivatives”). At the inception of a derivative contract, we may elect to designate a derivative as a hedge accounting derivative. We had no hedge accounting derivatives as of December 31, 2021 and March 31, 2021, respectively.

Refer to Note 6 – Derivatives, Hedging Activities and Interest Expense of the Notes to Consolidated Financial ~~Statements.~~

~~The following table summarizes our derivative assets and liabilities, which are included in Other assets and Other liabilities on our Consolidated Balance Sheets:~~

Collateral represents cash received or deposited under reciprocal arrangements that we have entered into with our derivative counterparties. As of December 31, 2021 and March 31, 2021, we held excess collateral of $1 million and $29 million, respectively, which we did not use to offset derivative assets. As of December 31, 2021 and March 31, 2021, we posted initial margin and excess collateral of $121 million and $10 million, respectively, which we did not use to offset derivative liabilities.

In July 2017, the United Kingdom Financial Conduct Authority (“FCA”), which regulates the London Inter-bank Offered Rate (“LIBOR”), announced that it intends to stop persuading or compelling banks to submit rates for the calculation of LIBOR to the administrator of LIBOR after 2021. In November 2020, ICE Benchmark Administration, the administrator of LIBOR, announced its intention to continueThe publication of ~~overnight~~non-U.S. dollar LIBOR rates on a representative basis, as well as the publication of the lesser used 1-week and ~~one-, three-, six- and 12- month~~2-month U.S. dollar LIBOR ~~rates through~~tenors, ceased as of the end of December 2021. While the most commonly used U.S. dollar LIBOR tenors are expected to continue to be published until June 30, ~~2023. However, the United States Federal Reserve and other regulatory~~2023, U.S. banking agencies issued guidance ~~encouraging banks to~~that financial institutions should cease ~~entering into new contracts that use~~using U.S. dollar LIBOR as a reference rate ~~as soon as practicable and~~ in ~~any event by~~new contracts after December 31, 2021. On March 5, 2021, the FCA announced that certain LIBOR rates will either cease to be provided by any administrator or no longer be representative immediately after December 31, 2021 (or, in the case of overnight and one-, three-, six- and 12-month U.S. dollar LIBOR rates, immediately after June 30, 2023). We are exposed to LIBOR-based financial instruments, including through our dealer financing activities, derivative contracts, secured and unsecured debt, and investment securities. To facilitate an orderly transition from LIBOR to alternative reference rates (“ARRs”), we have established an initiative led by senior management, with Board and committee oversight, to assess, monitor and mitigate risks associated with the expected discontinuation of LIBOR, to achieve operational readiness and engage impacted borrowers and counterparties in connection with the transition to ARRs. Our efforts under this initiative include monitoring developments and the usage of ARRs, monitoring the regulatory and financial reporting guidance, as well as reviewing and updating current legal contracts, internal systems and processes to accommodate the use of ARRs. For example, we have committed to using Secured Overnight Financing Rate (“SOFR”) linked rates in connection with various borrowing arrangements and Prime in connection with various lending arrangements and we continue to evaluate other alternatives as potential ARRs to LIBOR. SOFR is a measure of the cost of borrowing cash overnight, collateralized by U.S. Treasury securities, and is based on directly observable U.S. Treasury-backed repurchase transactions.

We are also continuously assessing how the expected discontinuation of LIBOR will impact accounting and financial reporting. For example, on April 1, 2021, we adopted ASU 2020-04, Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting, as further discussed in Note 1 – Interim Financial Data of the Notes to Consolidated Financial Statements.

Refer to Part I, Item 1A. Risk Factors – “Uncertainty about the transition away from the London Interbank Offered Rate (“LIBOR”) and the adoption of alternative reference rates could adversely impact our business and results of operations” in our fiscal ~~2021~~2022 Form 10-K for further discussion.

Refer to Note 1 – Interim Financial Data of the Notes to Consolidated Financial Statements.

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make certain estimates which affect reported financial results. The evaluation of the factors used in determining each of our critical accounting estimates involves significant assumptions, complex analyses, and management judgment. Changes in the evaluation of these factors may have a significant impact on the consolidated financial statements. Additionally, due to inherent uncertainties in making estimates, actual results could differ from those estimates, and those differences could be material. The critical accounting estimates that affect the consolidated financial statements and the judgment and assumptions used are consistent with those described in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations, Critical Accounting Estimates” in our fiscal 2022 Form 10-K.

TMCC has guaranteed the payments of principal and interest with respect to the bond obligations that were issued by Putnam County, West Virginia and Gibson County, Indiana to finance the construction of pollution control facilities at manufacturing plants of certain TMCC affiliates. Refer to Note 9 - Commitments and Contingencies of the Notes to Consolidated Financial Statements for further discussion.

A description of our lending commitments is included under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, Off-Balance Sheet Arrangements” and Note 12 - Related Party Transactions of the Notes to Consolidated Financial Statements in our fiscal ~~2021~~2022 Form 10-K, as well as in Note 9 - Commitments and Contingencies of the Notes to Consolidated Financial Statements.

Refer to Note 9 - Commitments and Contingencies of the Notes to Consolidated Financial Statements for a description of agreements containing indemnification provisions.

As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (the principal executive officer) and Chief Financial Officer (the principal financial officer), of the effectiveness of our “disclosure controls and procedures” as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”). Based on this evaluation, the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) concluded that the disclosure controls and procedures were effective as of ~~December 31, 2021,~~June 30, 2022, to ensure that information required to be disclosed in reports filed under the Exchange Act was recorded, processed, summarized and reported within the time periods specified by the SEC’s rules, regulations, and forms and that such information is accumulated and communicated to our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosures.

There have been no changes in our internal control over financial reporting that occurred during the three months ended ~~December 31, 2021,~~June 30, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

For a discussion of legal proceedings, see “Part I. Financial Information – Item 1. Financial Statements - Note 9 – Commitments and Contingencies of the Notes to Consolidated Financial Statements – Litigation and Governmental Proceedings.”

~~The following risk factors have changed~~There are no material changes from the risk factors set forth under “Item 1A. Risk Factors” in our fiscal ~~2021~~2022 Form 10-K.

Our results of operations and financial condition are substantially dependent upon the sale of Toyota, Lexus, and private label vehicles, as well as our ability to offer competitive financing and voluntary protection products.

We primarily provide a variety of finance and voluntary protection products to authorized Toyota, Lexus, and private label dealers and their customers in the U.S. Accordingly, our business is substantially dependent upon the sale of Toyota, Lexus, and private label vehicles in the U.S. Changes in the volume of sales may result from governmental action or changes in governmental regulation or trade policies, changes in consumer demand, new vehicle incentive programs, recalls, the actual or perceived quality, safety or reliability of Toyota, Lexus, and private label vehicles, economic conditions, increased competition, increases in the price of vehicles due to increased raw material costs, changes in import fees or tariffs on raw materials or imported vehicles, changes to or withdrawals from trade agreements, currency fluctuations, fluctuations in interest rates, decreased or delayed vehicle production due to extreme weather conditions, natural disasters, supply chain interruptions, including shortages of parts, components or raw materials, or other events. For example, the severe weather that many parts of the U.S. experienced during the fourth quarter of fiscal 2021, resulted in a shortage of petrochemicals that affected the production at certain of TMNA’s production facilities. Any negative impact on the volume of Toyota, Lexus, and private label vehicle sales in the U.S. could have a material adverse effect on our business, results of operations, and financial condition.

TMS, a subsidiary of TMNA, is the primary distributor of Toyota and Lexus vehicles in the U.S. While TMNA conducts extensive market research before launching new or refreshed vehicles and introducing new services, many factors both within and outside TMNA’s control affect the success of new or existing products and services in the marketplace. Offering vehicles and services that customers want and value can mitigate the risks of increasing price competition and declining demand, but products and services that are perceived to be less desirable (whether in terms of product mix, price, quality, styling, safety, overall value, fuel efficiency, or other attributes) and the level of availability of products and services that are desirable can exacerbate these risks. With increased consumer interconnectedness through the internet, social media, and other media, mere allegations relating to quality, safety, fuel efficiency, corporate social responsibility, or other key attributes can negatively impact TMNA’s reputation or market acceptance of its products or services, even where such allegations prove to be inaccurate or unfounded.

In addition, the volume of TMNA sales may also be affected by Toyota’s ability to successfully grow through investments in the area of emerging opportunities such as mobility and connected services, vehicle electrification, fuel cell technology and autonomy, which depends on many factors, including advancements in technology, regulatory changes, and other factors that are difficult to predict.

We operate in a highly competitive environment and compete with other financial institutions and, to a lesser extent, other automobile manufacturers’ affiliated finance companies primarily through service, quality, our relationship with TMNA, and financing rates. TMNA sponsors subvention, cash, and contractual residual value support incentive programs offered by us on certain new and used Toyota and Lexus vehicles. Our ability to offer competitive financing and ~~voluntary protection~~ products in the U.S. depends in part on the level of TMNA sponsored subvention, cash, and contractual residual value support incentive program activity, which varies based on TMNA marketing strategies, economic conditions, and the volume of vehicle sales, among other factors. Any negative impact on the level of TMNA sponsored subvention, cash, and contractual residual value support incentive programs could in turn have a material adverse effect on our business, results of operations, and financial condition.

~~A failure or interruption in our operations could adversely affect our results of operations and financial condition.~~

Operational risk is the risk of loss resulting from, among other factors, lack of established processes, inadequate or failed processes, systems or internal controls, theft, fraud, extreme weather conditions, natural disasters (such as wildfires, floods, tornadoes, earthquakes, hurricanes (including an increase in the frequency of such conditions and disasters as the result of climate change)) or other catastrophes (including without limitation, explosions, terrorist attacks, riots, civil disturbances and

health epidemics and other outbreaks). Operational risk can occur in many forms including, but not limited to, errors, business interruptions, failure of controls, failure of systems or other technology, deficiencies in our voluntary protection product operations risk management program, inappropriate behavior or misconduct by our employees or those contracted to perform services for us, and vendors that do not perform in accordance with their contractual agreements. We have established business recovery plans to address interruptions in our operations, but we can give no assurance that these plans will be adequate to remediate all events that we may face. A catastrophic event that results in the destruction or disruption of any of our critical business or information technology systems could harm our ability to conduct normal business operations. ~~These events can potentially result in financial losses or other damage to us, including damage to our reputation.~~

We rely on a framework of internal controls designed to provide a sound and well-controlled operating environment. Due to the complexity of our business and the challenges inherent in implementing control structures across large organizations, control issues could be identified in the future that could have a material adverse effect on our operations.

We are currently in the process of restructuring our customer service operations to better serve our customers by relocating and streamlining the customer service operation, moving our three regional CSCs to be co-located with the regional DSCs, and investing in new technology. We can give no assurance that the restructuring of our customer service operations will be completed as planned or within the expected timing or budget, and the expected benefits may not be fully realized due to associated disruption to customer service operations and personnel.

In addition, many parts of our business are dependent on key personnel. Our future success depends on our ability to retain existing, and attract, hire and integrate new key personnel and other necessary employees. Any failure to do so could adversely affect our business, results of operations and financial condition.

~~We are exposed to customer and dealer credit risk, which could negatively affect our results of operations and financial condition.~~

Credit risk is the risk of loss arising from the failure of a customer or dealer to meet the terms of any retail, lease or dealer financing contract with us or otherwise fail to perform as agreed. An increase in credit risk would increase our provision for credit losses, which would have a negative impact on our results of operations and financial condition. There can be no assurance that our monitoring of credit risk and our efforts to mitigate credit risk are or will be sufficient to prevent an adverse effect on our results of operations and financial condition.

The level of credit risk in our retail loan portfolio is influenced primarily by two factors: the total number of contracts that experience default (“default frequency”) and the amount of loss per occurrence (“loss severity”), which in turn are influenced by various economic factors, the used vehicle market, purchase quality mix, contract term length, and operational changes. The used vehicle market is impacted by the supply of, and demand for, used vehicles, interest rates, inflation, new vehicle incentive programs, the manufacturer’s actual or perceived reputation for quality, safety, and reliability, and the general economic outlook.

The level of credit risk in our dealer portfolio is influenced primarily by the financial strength of dealers within our portfolio, dealer concentration, collateral quality, and other economic factors. The financial strength of dealers within our portfolio is influenced by general macroeconomic conditions, the overall demand for new and used vehicles, and the financial condition of automotive manufacturers, among other factors.

Economic slowdown and recession in the U.S., extreme weather conditions, natural disasters, health epidemics, and other factors increase the risk that a customer or dealer may not meet the terms of a retail, lease or dealer financing contract with us or may otherwise fail to perform as agreed. A weak economic environment evidenced by, among other things, unemployment, underemployment, and consumer bankruptcy filings, may affect some of our customers’ and dealers’ ability to make their scheduled payments.

~~The regulatory environment in which we operate could have a material adverse effect on our business and results of operations.~~

Regulatory risk includes risk arising from failure or alleged failure to comply with applicable regulatory requirements and risk of liability and other costs imposed under various laws and regulations, including changes in applicable law, regulation and regulatory guidance. For example, laws or regulations intended to mitigate factors contributing to, or intended to address the potential impacts of, climate change, could have a material adverse effect on our business, results of operations and financial condition.

~~As a provider of finance and~~ ~~voluntary protection~~ products, we operate in a highly regulated environment. We are subject to state licensing requirements and state, and federal laws and regulations. In addition, we are subject to governmental and regulatory examinations, information-gathering requests, and investigations from time to time at the state and federal levels.

Compliance with applicable law is costly and can affect our results of operations. Compliance requires forms, processes, procedures, controls and the infrastructure to support these requirements. Compliance may create operational constraints and place limits on pricing, as the laws and regulations in the financial services industry are designed primarily for the protection of consumers. Changes in laws and regulations could restrict our ability to operate our business as currently operated, could impose substantial additional costs or require us to implement new processes, which could adversely affect our business, prospects, financial performance or financial condition. The failure to comply with applicable laws and regulations could result in significant statutory civil and criminal fines, penalties, monetary damages, attorney or legal fees and costs, restrictions on our ability to operate our business, possible revocation of licenses and damage to our reputation, brand and valued customer relationships. Any such costs, restrictions, revocations or damage could adversely affect our business, prospects, results of operations or financial condition.

~~Our principal consumer finance regulator at the federal level is the CFPB, which has broad regulatory, supervisory and enforcement authority over us.The CFPB’s~~ ~~supervisory authority allows it, among other things, to conduct comprehensive and rigorous examinations to assess our compliance with consumer financial protection laws, which could result in enforcement actions, regulatory fines and mandated changes to our business products, policies and procedures~~.

The CFPB’s rulemaking authority includes the authority to promulgate rules regarding, among other practices, debt collection practices that would apply to third-party collectors and first-party collectors, such as ourselves, and rules regarding consumer credit reporting practices. ~~The timing and impact of these rules on our business remain uncertain. In addition, the CFPB has~~ ~~focused on the area of auto finance, particularly with respect to indirect financing arrangements, dealer compensation and fair lending compliance, and~~ ~~questioned the value and increased scrutiny of the marketing and sale of certain ancillary or add-on products, including products similar to those we finance or sell through TMIS.~~

The CFPB and FTC may investigate the products, services and operations of credit providers, including banks and other finance companies engaged in auto finance activities. As a result of such investigations, the CFPB and FTC have announced various enforcement actions against lenders in the past few years involving significant penalties, consent orders, cease and desist orders and similar remedies that, if applicable to us or the products, services and operations we offer, may require us to cease or alter certain business practices, which could have a material adverse effect on our results of operations, financial condition, and liquidity. Supervision and investigations by these agencies may result in monetary penalties, increase our compliance costs, require changes in our business practices, affect our competitiveness, impair our profitability, harm our reputation or otherwise adversely affect our business.

~~Refer to “Item 1. Business, Regulatory Environment of our fiscal 2021 Form 10-K” for further discussion of the CFPB’s authority and activities.~~

At the state level, state regulators are taking a more stringent approach to supervising and regulating financial products and services subject to their jurisdiction. For example, certain states have proposed rate cap bills that would put limits on the maximum rate of finance charges. We expect to continue to face greater supervisory scrutiny and enhanced supervisory requirements for the foreseeable future.

~~Under~~ ~~the Volcker Rule companies affiliated with U.S. insured depository institutions~~ ~~are generally prohibited~~ from engaging in “proprietary trading” and certain transactions with certain privately offered funds. The activities prohibited by the Volcker Rule are not core activities for us. However, the federal financial regulatory agencies charged with implementing the Volcker Rule could further amend the rule or change their approach to administering, enforcing or interpreting the rule, which could negatively affect us and potentially require us to limit or change our activities or operations.

The Dodd-Frank Act amended the CEA to establish a framework for the regulation of certain OTC derivatives referred to as swaps. The OTC derivatives provisions of the CEA, as amended by the Dodd-Frank Act, impose clearing, trading and margin requirements on certain contracts. At present, we qualify for exceptions from these requirements for the swaps that we enter into to hedge our commercial risks. However, if we were to no longer qualify for such exceptions, we could become subject to some or all of these requirements, which would increase our cost of entering into and maintaining such hedging positions.

If we reduce our use of OTC derivatives as a result of the Dodd-Frank Act and resulting regulations, our results of operations may become more volatile and our cash flows may be less predictable, which could adversely affect our ability to plan for and fund capital expenditures.

~~Refer to “Item 1. Business, Regulatory Environment of our fiscal 2021 Form 10-K” for additional information on our regulatory environment.~~

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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)

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
Note 1. Interim Financial Data	7
Note 2. Investments in Marketable Securities	8
Note 3. Finance Receivables, Net	11
Note 4. Allowance for Credit Losses	17
Note 5. Investments in Operating Leases, Net	18
Note 6. Derivatives, Hedging Activities and Interest Expense	19
Note 7. Debt and Credit Facilities	22
Note 8. Variable Interest Entities	24
Note 9. Commitments and Contingencies	26
Note 10. Income Taxes	29
Note 11. Related Party Transactions	30
Note 12. Fair Value Measurements	32
Note 13. Segment Information	35
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	3837
Item 3. Quantitative and Qualitative Disclosures About Market Risk	6461
Item 4. Controls and Procedures	6461
PART II	6562
Item 1. Legal Proceedings	6562
Item 1A. Risk Factors	6562
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	6862
Item 3. Defaults Upon Senior Securities	6862
Item 4. Mine Safety Disclosures	6862
Item 5. Other Information	6862
Item 6. Exhibits	6963
Signatures	7164

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

Exhibit Number	Description	Method of Filing

3.1	Restated Articles of Incorporation of Toyota Motor Credit Corporation filed with the California Secretary of State on April 1, 2010	(1)

3.2	Bylaws of Toyota Motor Credit Corporation as amended through December 8, 2000	(2)

10.1	364 Day Credit Agreement, dated as of November 5, 2021, among Toyota Motor Credit Corporation, Toyota Motor Finance (NETHERLANDS) B.V., Toyota Financial Services (UK) PLC, Toyota Credit De Puerto Rico Corp., Toyota Credit Canada Inc., Toyota Kreditbank GMBH, and Toyota Finance Australia Limited, as Borrowers, the lenders party thereto, and BNP Paribas, as Administrative Agent, Swing Line Agent and Swing Line Lender, BNP Paribas Securities Corp., BofA Securities, Inc., Citibank, N.A., JPMorgan Chase Bank, N.A., and MUFG Bank, LTD., as Joint Lead Arrangers and Joint Book Managers, Citibank, N.A., Bank of America, N.A. and JPMorgan Chase Bank, N.A., as Syndication Agents and Swing Line Lenders, and MUFG Bank, LTD., as a Syndication Agent.	(3)

10.2	Three Year Credit Agreement, dated as of November 5, 2021, among Toyota Motor Credit Corporation, Toyota Motor Finance (NETHERLANDS) B.V., Toyota Financial Services (UK) PLC, Toyota Credit De Puerto Rico Corp., Toyota Credit Canada Inc., Toyota Kreditbank GMBH, and Toyota Finance Australia Limited, as Borrowers, the lenders party thereto, and BNP Paribas, as Administrative Agent, Swing Line Agent and Swing Line Lender, BNP Paribas Securities Corp., BofA Securities, Inc., Citibank, N.A., JPMorgan Chase Bank, N.A., and MUFG Bank, LTD., as Joint Lead Arrangers and Joint Book Managers, Citibank, N.A., Bank of America, N.A. and JPMorgan Chase Bank, N.A., as Syndication Agents and Swing Line Lenders, and MUFG Bank, LTD., as a Syndication Agent.	(4)

10.3	Five Year Credit Agreement, dated as of November 5, 2021, among Toyota Motor Credit Corporation, Toyota Motor Finance (NETHERLANDS) B.V., Toyota Financial Services (UK) PLC, Toyota Credit De Puerto Rico Corp., Toyota Credit Canada Inc., Toyota Kreditbank GMBH, and Toyota Finance Australia Limited, as Borrowers, the lenders party thereto, and BNP Paribas, as Administrative Agent, Swing Line Agent and Swing Line Lender, BNP Paribas Securities Corp., BofA Securities, Inc., Citibank, N.A., JPMorgan Chase Bank, N.A., and MUFG Bank, LTD., as Joint Lead Arrangers and Joint Book Managers, Citibank, N.A., Bank of America, N.A. and JPMorgan Chase Bank, N.A., as Syndication Agents and Swing Line Lenders, and MUFG Bank, LTD., as a Syndication Agent.	(5)

~~Exhibit Number~~	~~Description~~		~~Method of Filing~~

~~31.1~~		~~Certification of Chief Executive Officer~~	~~Filed Herewith~~

~~31.2~~		~~Certification of Chief Financial Officer~~	~~Filed Herewith~~

~~32.1~~		~~Certification pursuant to 18 U.S.C. Section 1350~~	~~Furnished Herewith~~

~~32.2~~		~~Certification pursuant to 18 U.S.C. Section 1350~~	~~Furnished Herewith~~

~~101.INS~~		~~Inline XBRL instance document~~	~~Filed Herewith~~

~~101.CAL~~		~~Inline XBRL taxonomy extension calculation linkbase document~~	~~Filed Herewith~~

~~101.DEF~~		~~Inline XBRL taxonomy extension definition linkbase document~~	~~Filed Herewith~~

~~101.LAB~~		~~Inline XBRL taxonomy extension labels linkbase document~~	~~Filed Herewith~~

~~101.PRE~~		~~Inline XBRL taxonomy extension presentation linkbase document~~	~~Filed Herewith~~

~~101.SCH~~		~~Inline XBRL taxonomy extension schema document~~	~~Filed Herewith~~

~~104~~		~~Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)~~	~~Filed Herewith~~

	TOYOTA MOTOR CREDIT CORPORATION
	(Registrant)



Date: ~~February 9,~~August 5, 2022	By	/s/ Mark S. Templin
		Mark S. Templin
		President and Chief Executive Officer
		(Principal Executive Officer)



Date: ~~February 9,~~August 5, 2022	By	/s/ Scott Cooke
		Scott Cooke
		Senior Vice President and Chief Financial Officer (Principal Financial Officer)