FORM 8-K TOYOTA MOTOR CREDIT CORPORATION...Toyota Avalon, Toyota Camry, Lexus ES, Lexus RX 350 2017...
Transcript of FORM 8-K TOYOTA MOTOR CREDIT CORPORATION...Toyota Avalon, Toyota Camry, Lexus ES, Lexus RX 350 2017...
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 27, 2018
TOYOTA MOTOR CREDIT CORPORATION
(Exact Name of Registrant as Specified in its Charter)
California 1-9961 95-3775816
(State or Other Jurisdiction of Incorporation)
(Commission File Number)
(IRS Employer Identification No.)
6565 Headquarters Drive
Plano, TX 75024
(Address of principal executive offices, including zip code)
(469) 486-9300
(Registrant's telephone number, including area code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
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Item 7.01 Regulation FD Disclosure. Toyota Motor Credit Corporation has prepared materials for investors and other business information. The materials are furnished (not filed) as Exhibit 99.1 and Exhibit 99.2 to this Current Report on Form 8-K pursuant to Regulation FD. Item 9.01 Financial Statements and Exhibits. (d) Exhibits. Exhibit No. Description 99.1 Investor presentation of Toyota Motor Credit Corporation (furnished pursuant to Regulation
FD)
99.2 Toyota Business Highlights (furnished pursuant to Regulation FD)
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SIGNATURES
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 hereunto duly authorized. TOYOTA MOTOR CREDIT CORPORATION Date: June 27, 2018 By: /s/ Katherine Adkins Katherine Adkins Group Vice President, General Counsel and Secretary
Presentation Materials for Investors
June 2018
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Disclaimer • This presentation includes certain “forward-looking statements” within the meaning of
The U.S. Private Securities Litigation Reform Act of 1995.
• These statements are based on current expectations and currently available information.
• Actual results may differ materially from these expectations due to certain risks, uncertainties and other important factors, including the risk factors set forth in the most recent annual and periodic reports of Toyota Motor Corporation and Toyota Motor Credit Corporation.
• We do not undertake to update the forward-looking statements to reflect actual results or changes in the factors affecting the forward-looking statements.
• This presentation does not constitute an offer to sell or a solicitation of an offer to purchase any securities. Any offer or sale of securities will be made only by means of a prospectus and related documentation.
• Investors and others should note that we announce material financial information using the investor relations section of our corporate website (http://www.toyotafinancial.com) and SEC filings. We use these channels, press releases, as well as social media to communicate with our investors, customers and the general public about our company, our services and other issues. While not all of the information that we post on social media is of a material nature, some information could be material. Therefore, we encourage investors, the media, and others interested in our company to review the information we post on the Toyota Motor Credit Corporation Twitter Feed (http://www.twitter.com/toyotafinancial). We may update our social media channels from time to time on the investor relations section of our corporate website.
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Disclaimer • This presentation includes certain “forward-looking statements” within the meaning of The U.S. Private Securities Litigation Reform
Act of 1995.
• These statements are based on current expectations and currently available information.
• Actual results may differ materially from these expectations due to certain risks, uncertainties and other important factors, including the risk factors set forth in the most recent annual and periodic reports of Toyota Motor Corporation and Toyota Motor Credit Corporation (“TMCC”).
• We do not undertake to update the forward-looking statements to reflect actual results or changes in the factors affecting the forward-looking statements.
• This presentation does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to purchase or subscribe for securities of TMCC in any jurisdiction or an inducement to enter into investment activity in any jurisdiction. Neither this presentation nor any part thereof, nor the fact of its distribution, shall form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. Any offer or sale of securities by TMCC will be made only by means of a prospectus and related documentation.
• Investors and prospective investors in securities of TMCC are required to make their own independent investigation and appraisal of the business and financial condition of TMCC and the nature of its securities. This presentation does not constitute a recommendation regarding securities of TMCC. Any prospective purchaser of securities in TMCC is recommended to seek its own independent financial advice.
• This presentation is made to and directed only at (i) persons outside the United Kingdom, or (ii) qualified investors or investment professionals falling within Article 19(5) and Article 49(2)(a) to (d) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”), or (iii) high net worth individuals, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order, and (iv) persons who are “qualified investors” within the meaning of Article 2(1)(e) of the Prospectus Directive (Directive 2003/71/EC) as amended (such persons collectively being referred to as “Relevant Persons”). This presentation must not be acted or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this presentation relates is available only to Relevant Persons and will be engaged in only with Relevant Persons.
• This presentation is an advertisement and not a prospectus and investors should not subscribe for or purchase any securities of TMCC referred to in this presentation or otherwise except on the basis of information in the base prospectus of Toyota Motor Finance (Netherlands) B.V., Toyota Credit Canada Inc., Toyota Finance Australia Limited and Toyota Motor Credit Corporation dated 8 September 2017 as supplemented from time to time together with the applicable final terms which are or will be, as applicable, available on the website of the London Stock Exchange plc at www.londonstockexchange.com/exchange/news/market-news/market-news-home.html.
• Investors and others should note that we announce material financial information using the investor relations section of our corporate website (http://www.toyotafinancial.com) and SEC filings. We use these channels, press releases, as well as social media to communicate with our investors, customers and the general public about our company, our services and other issues. While not all of the information that we post on social media is of a material nature, some information could be material. Therefore, we encourage investors, the media, and others interested in our company to review the information we post on the Toyota Motor Credit Corporation Twitter Feed (http://www.twitter.com/toyotafinancial). We may update our social media channels from time to time on the investor relations section of our corporate website.
Toyota’s Global Businesses
Markets vehicles in over 170 countries/regions. 51 overseas manufacturing companies in
28 countries/regions.
OTHER BUSINESSES
AUTOMOTIVE Design, Manufacturing,
Distribution
Consumer Financing
Dealer Support & Financing
Banking
Securities Services
Ancillary Products & Services
Housing
Marine
Telecommunications
e-Business
Intelligent Transport Services
Biotechnology & Afforestation
4
5
TMC Financial Highlights
Net Revenues Operating Income Net Income
Total Liquid Assets(1) Capital Expenditures R&D Expenditures
¥ in billions 1) Total Liquid Assets consist primarily of cash and cash equivalents, time deposits, marketable securities, and security investments (excluding equity investments), excluding in each
case those relating to financial services
Source: TMC FY2017 Earnings Release Presentation and FY2018 Earnings Release Presentation
¥28,403.1
¥27,597.1
¥29,379.5
FY2016 FY2017 FY2018
¥2,853.9
¥1,994.3
¥2,399.8
FY2016 FY2017 FY2018
¥2,312.6
¥1,831.1
¥2,493.9
FY2016 FY2017 FY2018
¥9,229.9 ¥9,199.5
¥9,372.1
FY2016 FY2017 FY2018
¥1,292.5
¥1,211.8
¥1,302.7
FY2016 FY2017 FY2018
¥1,055.6
¥1,037.5
¥1,064.2
FY2016 FY2017 FY2018
Toyota Across the United States
6 Source: Toyota USA website
1 All data as of December 2017, except where noted. 2 Toyota vehicles and components assembled using U.S. and globally sourced parts. 3 Parts, materials and components (FY ending 3/17). Goods and Services (CY 2017). 4 2015 Center Automotive Research Study. Includes direct employees, contingent workers and dealer employees. 5 Includes U.S. and Puerto Rico. 6 Global estimate based on FY18 projections of Toyota Motor Corporation. 7 As of CY 2017. 8 2015 Center for Automotive Research Study. Includes direct, dealer and supplier employees and jobs created through their spending.
Toyota Across the United States
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• Toyota Motor Sales, USA (TMS) sold 2.4 million vehicles in CY 2017
– Camry was the best-selling passenger car in America for the 16th consecutive year
• Industry-leading investment in next-generation technologies in power-train, safety and production
– TMS has one of the most fuel-efficient line-ups of any full-line OEM
– Nearly 3.5 million hybrids sold in the US and more than 12 million worldwide(1)
– 13 hybrid models(2) and 1 fuel cell vehicle across the North American line-up, and 34 hybrid models worldwide
– Mirai is Toyota’s first mass-produced hydrogen fuel cell vehicle
– Toyota Research Institute announced with R&D focus on artificial intelligence and robotics
• TMS is launching new or refreshed models in 2018. Recent and upcoming vehicle launches:
Toyota Motor North America
Source: Toyota Motor North America, Inc. Reports
(1) As of March 2018
(2) Includes cars and light trucks
- Avalon - Tundra TRD Pro - RAV4 - Corolla Hatchback
- 4Runner TRD Pro - Tacoma TRD Pro - Lexus LS - Lexus RXL
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Toyota Motor North America (2)
Quality, dependability, safety and product appeal remain high as reflected by numerous 3rd party accolades
2018 Kelley Blue Book Best Resale Value
Toyota No. 1 Brand Winner (3 out of top 5 Best Resale Values for
2017)
2018 Kelley Blue Book Best Overall Luxury Brand and Most
Trusted Luxury Brand Lexus Brand Winner
2018 IIHS Top Safety Pick+ Awards
2018 Toyota Camry 10 Toyota and Lexus models Top
Safety Pick
2018 J.D. Power and Associates Vehicle Dependability Survey
Lexus ranked No. 1 overall
2018 Fortune Toyota ranked one of the “World’s
Most Admired Companies” and named the No. 1 Motor Vehicle
company (4th year running)
2018 U.S. News Best Cars for Families
2018 Toyota Camry
2018 U.S. News Best Cars for the Money
Toyota Avalon, Toyota Camry, Lexus ES, Lexus RX 350
2017 J.D. Power IQS 13 Toyota/Lexus/Scion models
Rank “Top Three” in their segments
2017 Forbes Toyota ranked No. 1 most valuable
automotive brand
2017
Consumer Reports Lexus & Toyota No. 1 brands
2017 NY International Auto Show Prius Prime received the World Green Car Award (Toyota held the title for a
second year, with the 2016 award going to the Mirai)
2016 NHTSA 5-Star Overall Safety
10 Toyota/Lexus/Scion models
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Toyota Motor North America (3)
Avalon RAV4 Corolla Hatch
ES UX LS
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Toyota Motor North America (4)
MaaS: e-Palette Autonomous: Platform 3.0
Fuel Cell: Mirai / Tri-Gen / Project Portal Heavy-Duty Truck
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Toyota Financial Services
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TFS Group Global Presence
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• Over 4.6 million active finance contracts(1)
• AA-(2)
/Aa3(2)
rated captive finance company by S&P/Moody’s
• Credit support agreement structure with TFSC/TMC(3)
Toyota Financial Services Corporation (TFSC)
Toyota Motor Credit Corporation (TMCC)
Toyota Motor Credit Corporation (TMCC)
Toyota Motor Corporation (TMC)
(1) As of April 2018. Source: Company Reports
(2) Outlook stable
(3) The Credit Support Agreements do not apply to securitization transactions
TMCC Revenues
15
TMCC Products and Services
Consumer Financing • Retail • Lease
Dealer Financing • Wholesale • Real Estate • Working Capital • Revolving Credit Lines
Insurance Products • Service Agreements • Prepaid Maintenance • Guaranteed Auto Protection • Excess Wear & Use • Tire & Wheel • Key Replacement Protection • Dealer Inventory Insurance
* Source: TMCC March 31, 2018 10-K. Reflects Operating Lease and Retail Financing revenues; Dealer Financing revenues; and Insurance earned premiums and contract revenues for the fiscal year ended March 31, 2018.
87%
5% 8%
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Extensive Field Organization
• Decentralized dealer and field support
• Centralized servicing and collections (circled)
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TMCC Earning Asset Composition
Source: TMCC March 31, 2016 10-K, March 31, 2017 10-K & March 31, 2018 10-K
Managed Assets (USD Billions)
24.9 30.2 34.0 33.2 33.0
0.2
1.2 2.5 4.9 5.7
39.6
38.4 35.7
37.8 40.4
9.5
11.5 14.1
12.9 11.9
15.8
15.6 15.8
17.8 17.3 $90.0
$96.9 $102.1
$106.6 $108.3
Mar-14 Mar-15 Mar-16 Mar-17 Mar-18
Lease Sold Lease Retail Sold Retail Wholesale & Other
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TMCC Financial Performance
1) $ in millions
2) 60+ Days Delinquent, Allowance for Credit Losses, and Net Credit Losses: figures are as percentage of gross earning assets
3) Allowance for Credit Losses: the quotient of allowance for credit losses divided by the sum of gross finance receivables (net finance receivables less allowance for credit losses) plus gross investments in
operating leases (net investments in operating leases less allowance for credit losses)
4) Net Credit Losses: results for the fiscal years ended March 31, 2016, March 31, 2017, and March 31, 2018
Source: TMCC March 31, 2018 10-K
$9,403
$10,046
$10,717
FY2016 FY2017 FY2018
Total Financing Revenues(1)
$3,432
$2,639 $2,964
FY2016 FY2017 FY2018
Net Revenues(1)
$932
$267
$3,410
FY2016 FY2017 FY2018
Net Income(1)
0.26%
0.27%
0.30%
FY2016 FY2017 FY2018
60+ Days Delinquent(2)
0.52%
0.58%
0.55%
FY2016 FY2017 FY2018
Allowance for Credit Losses(2)(3)
0.38%
0.47%
0.39%
FY2016 FY2017 FY2018
Net Credit Losses(2)(4)
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TMCC Funding Programs
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• A-1+/P-1 rated direct commercial paper program
• $20.5 billion committed credit facilities(1)
• $8.7 billion short-term liquidity investment portfolio(2)
• Over $70 billion in readily salable consumer retail loan & lease assets
• Access to domestic and international capital markets
• Billions of additional capacity in global benchmark markets
• Extensive inter-company lending infrastructure
• Credit support agreements: TMCC TFSC TMC
Exceptional Liquidity
(1) As of March 31, 2018 (2) Average balance for the fiscal year ended March 31, 2018 Source: TMCC March 31, 2018 10-K
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• TMCC is committed to:
– Maintaining funding diversity and exceptional liquidity
– Issuing into strong demand with attractive deals
– Identifying & developing new markets and investor relationships
– Responding quickly to opportunities with best-in-class execution
– Managing our business and stakeholder relationships with a long-
term view
TMCC Funding Program Objectives
Commercial Paper Programs Highlights
• A-1+/P-1 Direct Commercial Paper Programs
– 5 distinct USD commercial paper programs (TMCC, TCPR, TCCI, TFA,
and TMFNL)
– $15.0 billion multi-party committed credit facilities
– $5.5 billion bilateral committed credit facilities
– $27.1 billion USCP combined average outstanding for TMCC and
TCPR*
– Over 700 diverse institutional investors
• State and local municipalities
• Large corporations
• Pension and retirement funds
• Financial institutions
• Money managers and mutual fund companies
– Rates are posted daily on Bloomberg DOCP screen
*For the fiscal year ended March 31, 2018
Source: TMCC March 31, 2018 10-K and Company Reports 22
Innovative Funding Platforms
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Diversity and Inclusion (D&I) Bonds
• Four issuances to date totaling $2.25B
• $1.25B offering in April 2016 set record for largest corporate D&I bond
• Delivers Tier 2 & Tier 3 investor
diversification
Green Bonds
• Proceeds exclusively finance loans and
leases for new hybrid and alternative-
fuel Toyota and Lexus vehicles
• Auto industry’s first ever green ABS
- Three offerings ($4.6B) to date
• TMCC’s first unsecured Euro green bond in November 2017 (€600mm)
November 2017
Toyota Motor Credit Corporation
€600mn 0.00% Green Notes due 2021
€600mn 0.625% Notes due 2024
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TMCC FY18 Funding Overview
$20.3B Term Debt Funded
FY2018
ABS
38%
Global
31%
MTN
9%
EMTN
7%
Uridashi
10%
Structured
5%
*Net of retained
Source: Company Reports
$12.5B Unsecured
$4.8B Public ABS *
$3.0B Private ABS *
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Diversification in Debt Offerings
TMCC Long Term Debt Outstanding (USD millions) *
*As of May 31, 2018
Source: Company Reports
By Deal Type By Currency
Global
MTN,
$30,600
Public /
Private
ABS,
$13,323
Other,
$10,935
EMTN /
Eurobonds,
$9,275
MTN,
$7,128
USD,
57,998
EUR, 7,918
AUD,
3,572
GBP, 1,087 Other, 687
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Funding Flexibility And Responsiveness
Source: Company Reports as of 31 May 2018
Diversification Across USD Curve(1)
(1) Unsecured U.S. MTN issuance, excluding Structured Notes and Retail Notes
Percentages may not add to 100% due to rounding
45%
27%
53%
20% 15%
20%
3%
2%
5%
5% 7%
20%
11%
9% 20%
14%
14%
28%
37%
22%
22%
37%
9%
26%
21% 22%
29%
13% 5%
4% 6% 14%
7% 6%
FY14 FY15 FY16 FY17 FY18 FYTD19
1yr 18mth 2yr 3yr 4yr 5yr 7yr 10yr
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Key Investment Highlights
• Financial strength supported by strong credit ratings
• Transparent business model with exceptional liquidity
• Rational funding programs with long-term perspective
– Diversification in bond offerings
– Focus on proactively meeting needs of market
– Strong emphasis placed on flexibility and responsiveness
• Industry-leading in:
– Liquidity management framework
– Balance sheet strength
– Business model resiliency
28
TMCC Retail Loan Collateral & ABS Transactions
Credit Decisioning & Collections
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Disciplined Underwriting
Consistent and conservative underwriting standards designed to limit delinquencies and credit losses
• Key mission is to support Toyota and Lexus brand and vehicle sales
• Continued focus on prime originations
• Proprietary credit scores that leverage TMCC’s extensive origination history
• Regular statistical validations of predictive power
Servicing Optimization
Optimization of collections strategy and staff supports loss mitigation while enabling portfolio growth
• Emphasis on early intervention
• Reinforcement of strong compliance management system
• Focus on analytics and technology to prioritize high risk accounts and manage loss severities
Source: Company Reports as of April 30, 2018 30
Cumulative Net Losses by Vintage
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
1 5 9 13 17 21 25 29 33 37 41 45 49 53 57 61 65 69 73
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Receivables Principal Balance ($B)
Retail Managed Portfolio Performance
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Contracts Outstanding (#mm)
Performance by Principal Balance Outstanding Performance by Contracts Outstanding
Source: Company Reports as of 30 April 2018
3.09
3.19
3.12
3.16
3.22 3.21
3.16 3.18
3.16
FY 10 11 12 13 14 15 16 17 18
$43 $45 $45 $47 $49 $50 $50 $51 $53
FY 10 11 12 13 14 15 16 17 18
0.0%
0.5%
1.0%
1.5%
2.0%
FY 10 11 12 13 14 15 16 17 18
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
FY 10 11 12 13 14 15 16 17 18
$51B $53BApr 2017 Apr 2018
3.17mm 3.16mmApr 2017 Apr 2018
0.49% 0.49% 0.45% 0.52% 0.35% 0.41%Apr 2017 Apr 2018 Apr 2017 Apr 2018 Apr 2017 Apr 2018
% 60+ Days Past Due Gross Charge Offs Net Losses
0.53% 0.56% 1.02% 1.12%Apr 2017 Apr 2018 Apr 2017 Apr 2018
% 60+ Days Past Due % Repossessed
Origination Characteristics
APR Distribution
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Weighted Average FICO
Weighted Average Original Term New vs. Used
Source: Company Reports as of March 31, 2018
726 720 726 734 736
CY2014 2015 2016 2017 2018
51% 46% 46% 42% 52%
19% 20% 24% 25%
15%
30% 34% 30% 32% 33%
CY2014 2015 2016 2017 2018
<2.0% 2.0%-3.99% >=4.0%
64 65 66 69 68
CY2014 2015 2016 2017 2018
76% 75% 74% 77% 78%
24% 25% 26% 23% 22%
CY2014 2015 2016 2017 2018
New Used
ABS Deal Characteristics Average FICO
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Average Principal Balance ($ 000s)
Original and Remaining Term (months) Receivables by Vehicle Type (%)
Source: Company Reports as of April 2018
748
761
2010-A 2011-B 2013-B 2015-A 2016-B 2017-B 2018-B $0
$5
$10
$15
$20
2010-A 2011-B 2013-B 2015-A 2016-B 2017-B 2018-B
62 61 66
40
46
51
22
15 14
2010-A 2011-B 2013-B 2015-A 2016-B 2017-B 2018-B
Original Term Remaining Term Seasoning
59% 49%
41% 52%
2010-A 2011-B 2013-B 2015-A 2016-B 2017-B 2018-B
Trucks and SUVs Sedans and Vans
TAOT Cumulative Net Losses
34 Source: Company Reports as of 15 May 2018 payment date
2010, 2011, 2012 Series 2013, 2014, 2015 Series
2017 Series 2016 Series
0.0%
0.1%
0.2%
0.3%
0.4%
0.5%
0.6%
1 5 9 13 17 21 25 29 33 37 41 45
TAOT 2010-A TAOT 2010-B TAOT 2010-C
TAOT 2011-A TAOT 2011-B TAOT 2012-A
TAOT 2012-B
0.0%
0.1%
0.2%
0.3%
0.4%
0.5%
0.6%
1 5 9 13 17 21 25 29 33 37 41 45
TAOT 2013-A TAOT 2013-B TAOT 2014-A
TAOT 2014-B TAOT 2014-C TAOT 2015-A
TAOT 2015-B TAOT 2015-C
0.0%
0.1%
0.2%
0.3%
0.4%
0.5%
0.6%
1 5 9 13 17 21 25 29 33 37 41 45
TAOT 2016-A TAOT 2016-B
TAOT 2016-C TAOT 2016-D
0.0%
0.1%
0.2%
0.3%
0.4%
0.5%
0.6%
1 5 9 13 17 21 25 29 33 37 41 45
TAOT 2017-A TAOT 2017-B
TAOT 2017-C TAOT 2017-D
35
Appendix
36
TMC Consolidated Financials
Numbers may not sum to total due to rounding.
Source: TMC FY2017 and FY2018 Financial Summaries; FY2017 and FY2018 Earnings Release Presentations
(JPY billions) 2016 2017 2018
Net Revenues 28,403.1 27,597.1 29,379.5
Operating Income 2,853.9 1,994.3 2,399.8
Net Income 2,312.6 1,831.1 2,493.9
Consolidated Balance Sheet
(JPY billions) 2016 2017 2018
Current assets 18,209.5 17,833.6 18,152.6
Noncurrent finance receivables, net 8,642.9 9,012.2 9,481.6
Investment & other assets 10,834.6 11,707.1 12,406.3
Property, plant & equipment, net 9,740.4 10,197.1 10,267.6
Total Assets 47,427.5 48,750.1 50,308.2
Liabilities 29,339.4 30,081.2 30,386.1
Shareholders' equity 18,088.1 18,668.9 19,922.0
Total Liabilities & Shareholders' Equity 47,427.5 48,750.1 50,308.2
Fiscal Year Ended March 31,
Fiscal Year Ended March 31,
37
TMCC Financial Performance
(1) Percentage of gross earning assets
(2) The quotient of allowance for credit losses divided by the sum of gross finance receivables (net finance receivables less allowance for credit losses) plus gross investments in operating leases
(net investments in operating leases less allowance for credit losses)
Source: TMCC March 31, 2018 10-K
Consolidated Income Statement
(USD millions) 2014 2015 2016 2017 2018
Total Financing Revenues 7,397 8,310 9,403 10,046 10,717
add: Other Income 702 832 1,080 1,200 1,139
less: Interest Expense 5,352 5,593 7,051 8,607 8,892
and Depreciation
Net Financing Revenues 2,747 3,549 3,432 2,639 2,964
and Other Revenues
Net Income 857 1,197 932 267 3,410
Credit Performance
2014 2015 2016 2017 2018
Over 60 Days Delinquent (1) 0.18% 0.21% 0.26% 0.27% 0.30%
Allowance for Credit Losses (1) (2) 0.50% 0.50% 0.52% 0.58% 0.55%
Net Credit Losses (1) 0.28% 0.29% 0.38% 0.47% 0.39%
Fiscal Year Ended March 31,
Fiscal Year Ended March 31,
38
Credit Support Agreements • Securities* issued by TMCC (and various other TFSC subsidiaries) have the
benefit of a credit support agreement with TFSC
– TFSC will own 100% of TMCC
– TFSC will cause TMCC to maintain a tangible net worth of at least $100,000 as long as covered securities are outstanding
– If TMCC determines it will be unable to meet its payment obligations on any securities, TFSC will make sufficient funds available to TMCC to ensure that all such payment obligations are paid as due
– Agreement cannot be terminated until (1) repayment of all outstanding securities or (2) each rating agency requested by Toyota to provide a rating has confirmed no change in rating of all such securities
• TFSC in turn has the benefit of a credit support agreement with TMC
– Same key features as TFSC/TMCC credit support agreement
– TMC will cause TFSC to maintain a tangible net worth of at least JPY10mm as long as covered securities are outstanding
• TFSC’s and/or TMC's credit support obligations will rank pari passu with all other senior unsecured debt obligations
* “Securities” defined as outstanding bonds, debentures, notes and other investment securities and commercial paper, but
does not include asset-backed securities issued by TMCC’s securitization trusts.
39
TMCC Retail Auto Loan Originations
(1) Percentages may not add to 100.0% due to rounding. *Data as of March 31, 2018
Origination Profile
39 Source: Company Reports
Original Summary Characteristics
by Vintage Origination Year:CY2014 2015 2016 2017 2018*
Number of Pool Assets 951,133 925,631 883,424 882,329 223,057
Original Pool Balance $24,516,581,298 $24,222,949,274 $23,944,624,507 $24,699,290,739 $6,412,775,230
Average Initial Loan Balance $25,776 $26,169 $27,104 $27,993 $28,749
Weighted Average Interest Rate 3.07% 3.35% 3.24% 3.22% 3.08%
Weighted Average Original Term 64 Months 65 Months 66 Months 69 Months 68 Months
Weighted Average FICO 726 720 726 734 736
Minimum FICO 381 383 383 383 395
Maximum FICO 887 886 900 900 900
Geographic Distribution of Receivables representing the 5
states with the greatest aggregate original principal
balance:
State 1 CA - 21.0% CA - 21.3% CA - 21.4% CA - 23.3% CA - 23.5%
State 2 TX - 14.0% TX - 15.7% TX - 15.5% TX - 14.4% TX - 16.0%
State 3 NY - 4.7% NY - 4.9% NY - 4.8% NY - 4.2% NY - 3.8%
State 4 NJ - 4.0% NJ - 3.8% NJ - 4.0% PA - 3.8% VA - 3.7%
State 5 IL - 4.2% IL - 3.8% IL - 3.8% NJ - 3.7% PA - 3.7%
Distribution of Receivables by Contract Rate:(1)
Less than 2.0% 50.8% 46.2% 46.0% 42.4% 52.2%
2.0% - 3.99% 19.4% 19.9% 23.7% 25.3% 15.3%
4.0% - 5.99% 13.5% 14.0% 13.6% 17.0% 16.5%
6.0% - 7.99% 7.7% 8.7% 7.6% 6.7% 7.7%
8.0% - 9.99% 3.6% 4.9% 4.2% 3.7% 3.3%
10.0% - 11.99% 1.7% 2.7% 2.3% 2.2% 2.0%
12.0% - 13.99% 0.7% 1.4% 1.2% 1.2% 1.1%
14.0% - 15.99% 0.6% 0.9% 0.7% 0.7% 0.7%
16.0% and greater 1.9% 1.2% 0.7% 0.8% 1.2%
Total 100.00% 100.00% 100.00% 100.00% 100.00%
Share of Original Assets:
Percentage of Non-Toyota/Non-Lexus 3.8% 4.0% 3.3% 3.0% 3.1%
Percentage of 72+ Month Term 11.1% 13.2% 13.4% 15.2% 10.7%
Percentage of Used Vehicles 23.7% 24.6% 25.7% 23.0% 21.9%
40
TMCC Retail Loan Delinquency Experience (1)
(1) The historical delinquency data reported in this table includes all retail vehicle installment sales contracts purchased by TMCC, excluding those purchased by a subsidiary of TMCC operating in Puerto Rico. Includes contracts that have been sold but are still being serviced by TMCC. (2) Number of contracts outstanding at end of period. (3) The period of delinquency is based on the number of days payments are contractually past due. A payment is deemed to be past due if less than 90% of such payment is made.
Managed Portfolio Performance
Source: Company Reports
2018 2017 2018 2017 2016 2015 2014
Outstanding Contracts (2) 3,158,043 3,171,305 3,158,375 3,181,143 3,163,189 3,209,872 3,220,641
Number of Accounts Past Due
in the following categories
30 - 59 days 34,508 38,330 37,044 36,396 35,795 31,130 32,920
60 - 89 days 10,119 9,515 9,464 8,018 7,822 6,569 6,660
Over 89 days 7,635 7,408 8,063 7,633 6,776 5,616 5,799
Delinquencies as a Percentage
of Contracts Outstanding (3)
30 - 59 days 1.09% 1.21% 1.17% 1.14% 1.13% 0.97% 1.02%
60 - 89 days 0.32% 0.30% 0.30% 0.25% 0.25% 0.20% 0.21%
Over 89 days 0.24% 0.23% 0.26% 0.24% 0.21% 0.17% 0.18%
At April 30, At March 31,
Performance – Retail Loan TMCC Managed Portfolio Net Loss and Repossession Experience (dollars in thousands) (1)
41 Source: Company Reports
(1) The net loss and repossession data reported in this table includes all retail installment sales contracts purchased by TMCC, excluding those purchased by a subsidiary of TMCC operating in Puerto Rico. Includes contracts that have been sold but are still being serviced by TMCC. (2) Principal Balance Outstanding includes payoff amount for simple interest contracts and net principal amount for actuarial contracts. Actuarial contracts do not comprise any of the Receivables. (3) Average of the principal balance or number of contracts outstanding as of the beginning and end of the indicated periods. (4) Includes bankruptcy-related repossessions but excludes bankruptcies. (5) Amount charged-off is the net remaining principal balance, including earned but not yet received finance charges, repossession expenses and unpaid extension fees, less any proceeds from the liquidation of the related vehicle. Also includes dealer reserve charge-offs. (6) Includes all recoveries from post-disposition monies received on previously charged-off contracts including any proceeds from the liquidation of the related vehicle after the related charge-off. Also includes recoveries for dealer reserve charge-offs and chargebacks.
2018 2017 2018 2017 2016 2015 2014
Principal Balance Outstanding (2) $52,975,529 $50,622,048 $52,760,041 $50,759,341 $49,716,914 $49,645,354 $48,761,164
Average Principal Balance Outstanding (3) $52,867,785 $50,690,695 $51,759,691 $50,238,127 $49,681,134 $49,203,259 $47,846,942
Number of Contracts Outstanding 3,158,043 3,171,305 3,158,375 3,181,143 3,163,189 3,209,872 3,220,641
Average Number of
Contracts Outstanding (3) 3,158,209 3,176,224 3,169,759 3,172,166 3,186,531 3,215,257 3,188,444
Number of Repossessions (4) 2,953 2,708 38,580 45,883 37,741 34,780 34,923
Number of Repossessions as a Percent of
the Number of Contracts Outstanding 1.12% 1.02% 1.22% 1.44% 1.19% 1.08% 1.08%
Number of Repossessions as a Percent of
the Average Number of Contracts
Outstanding 1.12% 1.02% 1.22% 1.45% 1.18% 1.08% 1.10%
Gross Charge-Offs (5) $22,937 $18,895 $351,634 $395,109 $322,814 $267,835 $257,586
Recoveries (6) $4,648 $4,039 $49,567 $49,474 $47,966 $59,931 $62,714
Net Losses $18,289 $14,856 $302,067 $345,635 $274,848 $207,904 $194,872
Net Losses as a Percentage of Principal
Balance Outstanding 0.41% 0.35% 0.57% 0.68% 0.55% 0.42% 0.40%
Net Losses as a Percentage of Average
Principal Balance Outstanding 0.42% 0.35% 0.58% 0.69% 0.55% 0.42% 0.41%
April 30,
For the Month Ended For the Fiscal Years Ended
March 31,
ABS Deal Comparison
Toyota Auto Owner Trust (TAOT)*
*Abbreviated for presentation purposes (1) Percentages may not add to 100.00% due to rounding Source: Company Reports
42
Original Summary Characteristics by Prior Securitization: TAOT 2017-A TAOT 2017-B TAOT 2017-C TAOT 2017-D TAOT 2018-A TAOT 2018-B
Number of Pool Assets 93,151 106,118 102,754 106,107 105,677 94,829
Original Pool Balance $1,610,505,281.69 $1,884,009,090.55 $1,889,438,548.44 $1,903,254,413.53 $1,914,792,886.79 $1,767,851,358.52
Average Principal Balance $17,289.19 $17,753.91 $18,387.98 $17,937.12 $18,119.30 $18,642.52
Weighted Average Interest Rate 2.20% 2.17% 2.09% 2.12% 2.15% 2.15%
Weighted Average Original Term 63 64 64 65 65 66
Weighted Average Remaining Term 48 49 50 50 50 51
Weighted Average FICO 757 758 760 760 761 761
Minimum FICO 620 620 620 620 620 620
Maximum FICO 900 900 900 900 900 900
Geographic Distribution of Receivables representing the 5 states with the
greatest aggregate original principal balance:
State 1 CA - 24.1% CA - 23.6% CA - 23.9% CA - 25.8% CA - 24.4% CA - 24.5%
State 2 TX - 16.3% TX - 16.1% TX - 15.9% TX - 10.9% TX - 15.1% TX - 14.7%
State 3 IL - 4.5% IL - 4.7% IL - 4.6% IL - 4.7% IL - 4.4% IL - 4.6%
State 4 NJ - 4.1% PA - 4.0% NJ - 4.1% NJ - 4.4% PA - 4.2% PA - 4.3%
State 5 PA - 4.0% NY - 3.9% PA - 3.9% PA - 4.4% NJ - 4.0% NJ - 4.0%
Distribution of Receivables by Contract Rate: (1)
Less than 2.0% 57.96% 58.12% 58.96% 58.12% 56.67% 57.27%
2.0% - 3.99% 24.60% 25.23% 25.80% 26.47% 27.25% 26.44%
4.0% - 5.99% 10.16% 9.70% 9.06% 9.36% 10.25% 10.46%
6.0% - 7.99% 4.10% 3.89% 3.36% 3.22% 3.17% 3.17%
8.0% - 9.99% 2.05% 1.91% 1.88% 1.81% 1.66% 1.67%
10.0% - 11.99% 0.87% 0.88% 0.73% 0.74% 0.76% 0.76%
12.0% - 13.99% 0.20% 0.23% 0.16% 0.22% 0.20% 0.21%
14.0% - 15.99% 0.04% 0.03% 0.03% 0.03% 0.02% 0.02%
16.0% and greater 0.02% 0.01% 0.02% 0.01% 0.00% 0.01%
Total 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Distribution of Receivables by Vehicle Type: (1)
Passenger Cars 45.50% 45.10% 44.49% 44.45% 43.83% 42.06%
Minivans 8.04% 7.50% 7.13% 7.42% 6.81% 6.44%
Light Duty Trucks 13.01% 12.40% 11.92% 11.64% 11.88% 12.64%
SUVs 33.44% 35.00% 36.46% 36.49% 37.48% 38.86%
Total 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Distribution of Receivables by Make: (1)
Toyota and Scion 85.70% 84.72% 84.80% 86.02% 85.69% 87.20%
Lexus 14.30% 15.28% 15.20% 13.98% 14.31% 12.80%
Total 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Share of Original Assets:
Percentage with Original Scheduled Payments > 60 months 34.58% 38.87% 42.48% 45.27% 50.29% 54.10%
Percentage of Used Vehicles 21.40% 21.42% 21.47% 21.82% 21.39% 19.98%
• The U.S. automobile SAAR figure for May 2018 came in at 16.81M units, up from 16.70M units in May 2017.
• TMNA reported May 2018 sales of 215,321 units. With one more selling day in May 2018 compared to May 2017, sales were down 1.3% on a volume basis and down 5.1% on a daily selling rate (DSR) basis.
• Lexus posted May 2018 sales of 25,391 units, down 0.1% from May 2017 on a volume basis, and down 3.9% on a DSR basis.
• North American production as a percentage of U.S. sales for May 2018 was 68.9%, down from 71.9% in May 2017.
Source: Toyota, Bloomberg, Ward’s Automotive Group
TMNA monthly results include fleet sales volume
‡ “Other” consists of Central and South America, Oceania, Africa and the Middle East Source: TMC company filings.
TOYOTA MOTOR NORTH AMERICA (TMNA) INC.
MONTHLY RESULTS
TOYOTA MOTOR CORPORATION (TMC) FINANCIAL RESULTS
Toyota Business Highlights FY2018
May-17
May-18
May-17 May-18
CAMRY 32,547 29,965
RAV4 38,356 38,202
HIGHLANDER 18,115 21,312
COROLLA 32,937 29,578
TACOMA 17,654 21,380
Toyota U.S. May Vehicle Sales - Toyota Division Top 5 Models
May-17
May-18
May-17 May-18
RX 8,849 9,697
NX 5,009 4,975
ES 4,228 3,828
GX 1,851 2,018
IS 2,367 2,180
Toyota U.S. May Vehicle Sales - Lexus Division Top 5 Models
Production (units) FY2017 FY2018
Japan 4,109 4,286
North America 2,063 1,903
Europe 637 681
Asia 1,674 1,601
Other‡ 492 493
Sales (units) FY2017 FY2018
Japan 2,274 2,255
North America 2,837 2,806
Europe 925 968
Asia 1,588 1,543
Other‡ 1,347 1,392
Units in thousands
Yen in millions
TMC consolidated financial performance FY2017 FY2018
Net Revenues ¥27,597,193 ¥29,379,510
Operating Income 1,994,372 2,399,862
Net Income attributable to TMC 1,831,109 2,493,983
TMC Consolidated Balance Sheet
Current Assets ¥17,833,695 ¥18,152,656
Noncurrent finance receivables, net 9,012,222 9,481,618
Total Investments and other assets 11,707,160 12,406,302
Property, plant and equipment, net 10,197,109 10,267,673
Total Assets ¥48,750,186 ¥50,308,249
Liabilities ¥30,081,233 ¥30,386,173
Mezzanine equity 485,877 491,974
Shareholders' equity 18,183,076 19,430,102
Total Liabilities and Shareholders' Equity ¥48,750,186 ¥50,308,249
Operating Income (Loss) by geographic region Yen in billions
Japan ¥1,202 ¥1,660
North America 311 139
Europe (12) 75
Asia 435 433
Other‡ 59 113
Inter-segment elimination and/or unallocated amount (1) (20)
189,930 25,391
Toyota Division Lexus Division
Toyota North America (TMNA) Inc. May 2018 Vehicle Sales
0
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200
250
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U.S. Light Vehicle Seasonally Adjusted Annual Rate (SAAR) and Toyota Motor North America (TMNA) Inc. Sales
May 2013 - May 2018
TOYOTA MOTOR CREDIT CORPORATION (TMCC)
FINANCIAL RESULTS
• Our consolidated net income was $3,410 million in fiscal 2018, compared to $267 million in fiscal 2017. The increase in net income for fiscal 2018 compared to fiscal 2017 was primarily due to a $2,771 million increase in the benefit for income taxes attributable to the enactment of the Tax Cuts and Jobs Act of 2017 (TCJA), which reduced our federal statutory tax rate. In addition, our net income for fiscal 2018 compared to fiscal 2017 was also favorably impacted by a $671 million increase in total financing revenues, and a $181 million decrease in provision for credit losses, partially offset by a $188 million increase in depreciation on operating leases, a $185 million decrease in realized gains, net on investments in marketable securities, and a $97 million increase in interest expense.
• We recorded a provision for credit losses of $401 million for fiscal 2018, compared to $582 million for fiscal 2017. The decrease in the provision for credit losses for fiscal 2018 was primarily driven by favorable credit loss experience as well as an increased focus on late stage collection activities.
• Our delinquencies increased to 0.30 percent for fiscal 2018 compared to 0.27 percent for fiscal 2017, due to shifts in payment behavior as consumer debt levels rise. Despite declines in our net-charge offs, default frequency, and average loss severity for fiscal 2018 as compared to fiscal 2017, we have experienced increasing trends in delinquencies, default frequency, and average loss severity over the last few years. 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.
1TMCC market share represents the percentage of total domestic TMNA sales of new Toyota and Lexus vehicles financed by us, excluding sales under dealer rental car and commercial fleet
programs and sales of a private Toyota distributor *TMCC consumer portfolio includes TMCC and its consolidated subsidiaries
SHORT-TERM FUNDING PROGRAMS • Toyota Motor Credit Corporation (TMCC) ‡, Toyota Credit de Puerto Rico Corp. (TCPR),
Toyota Credit Canada Inc. (TCCI)†, Toyota Finance Australia Limited (TFA)† and Toyota Motor Finance (Netherlands) B.V. (TMFNL)† maintain direct relationships with institutional commercial paper investors through TMCC’s Sales & Trading team, providing each access to a variety of domestic and global markets through five, distinct 3(a)(3) programs.
• TMCC‡ commercial paper outstanding under our commercial paper programs ranged from approximately $25.3 billion to $28.6 billion during fiscal 2018 with an average outstanding balance of $27.1 billion. As of March 31, 2018, our commercial paper had
a weighted average remaining maturity of 70 days. †TCCI, TFA, TMFNL and TMCC are subsidiaries of Toyota Financial Services Corporation, a wholly-owned subsidiary of
Toyota Motor Corporation ‡TMCC consolidated financial liabilities include TMCC and its consolidated subsidiaries, which includes TCPR
LET’S GO PLACES Toyota Racing drivers won both NASCAR races and the ARCA Racing Series event in Pocono, Pennsylvania, while Spencer Bayston captured USAC’s Indiana Midget Week title.
Forward looking statements are subject to risks and uncertainties that could cause actual results to fall short of current expectations. Toyota and its affiliates discuss these risks and uncertainties in filings they make with the Securities and Exchange Commission. This presentation does not
constitute an offer to purchase any securities. Any offer or sale of securities will be made only by means of a prospectus and related documentation.
The Sales & Trading team engages in direct dialogue with institutional investors delivering a variety of fixed income products to meet our clients’ investment objectives and risk tolerances. We focus on providing simple, personal, and proactive service in the execution of all trades.
Sales and Trading Contacts
Jeffrey DeSilva | Region Manager
(469) 486-6759
Norman Brem | Funding & Liquidity Analyst
(469) 486-6760
James Kim | Funding & Liquidity Analyst
(469) 486-5960
Nicholas Ro, CFA | National Manager
(469) 786-8961
Jason Kelley | Region Manager
(469) 486-5301
Andrew Huang, CFA | Funding & Liquidity Analyst
(469) 786-8219
Peter Pang | Funding & Liquidity Analyst
(469) 486-5244
61.9%
28.9%
86.5% 65.2%
20.4%
93.2%
0%20%40%60%80%
100%
New retailcontracts
Used retailcontracts
Lease contracts
TMCC - Percentage of Contracts Subvened
FY2017 FY2018
614
291
557 644
255
516
0
500
1000
New retailcontracts
Used retailcontracts
Leasecontractsu
nit
s in
th
ou
san
ds
TMCC - Vehicle Financing Volume
FY2017 FY2018
0.00%
0.25%
0.50%
FY2014 FY2015 FY2016 FY2017 FY2018
TMCC - Consumer Portfolio Credit Performance*
Net charge-offs as a percentage of average grossearning assetsAggregate balances for accounts 60 or more dayspast due as a percentage of gross earning assets
26.6 27.3
57.3 57.4
14.3 13.6
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
$110
May-17 May-18
Am
ou
nt
($b
illio
ns)
TMCC Consolidated Financial Liabilities Comparison
Securednotes & loanspayable
Unsecurednotes & loanspayable
CommercialPaper
62.9%
61.6%
FY2017
FY2018
TMCC - Market Share1
FY2017 FY2018TMCC Financial Performance FY2017 FY2018Total financing revenues $10,046 $10,717Income before income taxes 409 781Net Income 267 3,410Debt-to-Equity Ratio 10.3x 7.6x
U.S. dollars in millions