v3.26.1
Investment in Operating Leases
 3 Months Ended
Jun. 30, 2026
Leases [Abstract]  
Investment in Operating Leases Investment in Operating Leases
Investment in operating leases consisted of the following:

June 30, 2026March 31, 2026
(U.S. dollars in millions)
Operating lease vehicles (1)
$40,344 $39,805 
Accumulated depreciation(6,431)(6,358)
Deferred dealer participation and initial direct costs123 123 
Unearned subsidy income(1,092)(1,063)
Estimated early termination losses(197)(191)
Investment in operating leases, net$32,747 $32,316 
 ________________________
(1)Net of investment tax credits.

Operating lease revenue consisted of the following:

Three months ended June 30,
20262025
(U.S. dollars in millions)
Lease payments$1,662 $1,568 
Subsidy income and dealer rate participation, net205 199 
Total operating lease revenue, net$1,867 $1,767 

Leased vehicle expenses consisted of the following:

Three months ended June 30,
20262025
(U.S. dollars in millions)
Depreciation expense$1,224 $1,164 
Initial direct costs and other lessor costs36 35 
Gain on disposition of leased vehicles (25)(19)
Total leased vehicle expenses, net$1,235 $1,180 

Contractual operating lease payments due as of June 30, 2026 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 June 30,(U.S. dollars in millions)
2027$5,878 
20283,891 
20291,653 
2030260 
203161 
Total$11,743 
The Company recognized early termination losses on operating leases of $49 million and $47 million during the three months ended June 30, 2026 and 2025, respectively. Net realized losses totaled $43 million and $38 million during the three months ended June 30, 2026 and 2025, respectively.
The general allowance for uncollectible operating lease receivables was recorded through a reduction to revenue of $10 million and $9 million for the three months ended June 30, 2026 and 2025, respectively.
No impairment losses due to declines in estimated residual values were recognized during both the three months ended June 30, 2026 and 2025.