v3.25.4
Investment in Operating Leases
 9 Months Ended
Dec. 31, 2025
Leases [Abstract]  
Investment in Operating Leases Investment in Operating Leases
Investment in operating leases consisted of the following:

December 31, 2025March 31, 2025
 (U.S. dollars in millions)
Operating lease vehicles (1)
$40,286 $37,647 
Accumulated depreciation(6,644)(5,770)
Deferred dealer participation and initial direct costs125 123 
Unearned subsidy income(1,091)(1,291)
Estimated early termination losses(218)(113)
Investment in operating leases, net$32,458 $30,596 
 ________________________
(1)Net of investment tax credits. Refer to Note 7 for additional information.

Operating lease revenue consisted of the following:

Three months ended December 31,Nine months ended December 31,
2025202420252024
 (U.S. dollars in millions)
Lease payments$1,610 $1,447 $4,752 $4,248 
Subsidy income and dealer rate participation, net191 172 586 464 
Reimbursed lessor costs11 6 44 39 
Total operating lease revenue, net$1,812 $1,625 $5,382 $4,751 

Leased vehicle expenses consisted of the following:

Three months ended December 31,Nine months ended December 31,
2025202420252024
 (U.S. dollars in millions)
Depreciation expense$1,202 $1,095 $3,551 $3,221 
Initial direct costs and other lessor costs29 24 102 89 
Gain on disposition of leased vehicles (1)
(13)(14)(46)(66)
Total leased vehicle expenses, net$1,218 $1,105 $3,607 $3,244 
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(1)Included in the gain on disposition of leased vehicles are end of term charges of $2 million and less than $1 million for the three months ended December 31, 2025 and 2024, respectively, and $3 million and $7 million for the nine months ended December 31, 2025 and 2024, respectively.
Contractual operating lease payments due as of December 31, 2025 are summarized below. Based on the Company's experience, it is expected that a portion of the Company's operating leases will terminate prior to the scheduled lease term. The summary below should not be regarded as a forecast of future cash collections.
Twelve-month periods ending December 31,(U.S. dollars in millions)
2026$5,851 
20274,032 
20281,603 
2029320 
203052 
Total$11,858 
The Company recognized early termination losses on operating leases of $138 million and $40 million during the three months ended December 31, 2025 and 2024, respectively, and $265 million and $95 million during the nine months ended December 31, 2025 and 2024, respectively. Net realized losses totaled $66 million and $34 million during the three months ended December 31, 2025 and 2024, respectively, and $160 million and $75 million during the nine months ended December 31, 2025 and 2024, respectively.
The general allowance for uncollectible operating lease receivables was recorded through a reduction to revenue of $12 million and $8 million for the three months ended December 31, 2025 and 2024, respectively, and $31 million and $20 million for the nine months ended December 31, 2025 and 2024, respectively.
No impairment losses due to declines in estimated residual values were recognized during both the three and nine months ended December 31, 2025 and 2024.