Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Level 1 inputs are quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are those other than quoted prices included within Level 1 that are observable for the asset or liability. Level 3 inputs are unobservable inputs for the asset or liability. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Nonperformance risk is also required to be reflected in the fair value measurement, including an entity’s own credit standing when measuring the fair value of a liability.


	June 30, 2026
	Level 1		Level 2		Level 3		Total

	(U.S. dollars in millions)
Assets:
Derivative instruments:
Interest rate swaps	$	—	$	330	$	—	$	330
Cross currency swaps	—		214		—		214
Total assets	$	—	$	544	$	—	$	544
Liabilities:
Derivative instruments:
Interest rate swaps	$	—	$	370	$	—	$	370
Cross currency swaps	—		234		—		234
Total liabilities	$	—	$	604	$	—	$	604

	March 31, 2026
	Level 1		Level 2		Level 3		Total

	(U.S. dollars in millions)
Assets:
Derivative instruments:
Interest rate swaps	$	—	$	228	$	—	$	228
Cross currency swaps	—		341		—		341
Total assets	$	—	$	569	$	—	$	569
Liabilities:
Derivative instruments:
Interest rate swaps	$	—	$	442	$	—	$	442
Cross currency swaps	—		219		—		219
Total liabilities	$	—	$	661	$	—	$	661

The Company’s derivatives are transacted in over-the-counter markets and quoted market prices are not readily available. The Company uses third-party developed valuation models to value derivative instruments. These models estimate fair values using discounted cash flow modeling techniques, which utilize the contractual terms of the derivative instruments and market-based inputs, including interest rates and foreign exchange rates. Discount rates incorporate counterparty and HMC specific credit default spreads to reflect nonperformance risk.

The Company’s derivative instruments are classified as Level 2 since all significant inputs are observable and do not require management judgment. There were no transfers between fair value hierarchy levels during the three months ended June 30, 2026 and 2025. Refer to Note 5 for additional information on derivative instruments.


	Level 1		Level 2		Level 3		Total		Total loss recognized

	(U.S. dollars in millions)
June 30, 2026
Vehicles held for disposition	$	—	$	—	$	129	$	129	$	46

June 30, 2025
Vehicles held for disposition	$	—	$	—	$	119	$	119	$	46

Vehicles held for disposition consist of returned and repossessed vehicles. They are valued at the lower of their carrying value or estimated fair value, less estimated disposition costs. The fair value is based on current average selling prices of like vehicles at wholesale used vehicle auctions.

The following tables summarize the carrying values and fair values of the Company’s financial instruments except for those measured at fair value on a recurring basis. Certain financial instruments and all nonfinancial assets and liabilities are excluded from fair value disclosure requirements including the Company’s investment in operating leases. The carrying values of cash, cash equivalents, and restricted cash approximate fair values due to the short-term nature and limited credit risk of the instruments.


	June 30, 2026
	Carrying		Fair value
	value		Level 1	Level 2		Level 3		Total

	(U.S. dollars in millions)
Assets:
Dealer loans, net	$	4,687	—	—		$	4,346	$	4,346
Retail loans, net	50,201		—	—		50,197		50,197
Liabilities:
Commercial paper	$	5,638	—	$	5,638	—		$	5,638

Bank loans	2,355		—	2,356		—		2,356
Public MTN Program	39,084		—	38,841		—		38,841
Other debt	3,199		—	3,236		—		3,236
Secured debt	14,908		—	14,918		—		14,918

	March 31, 2026
	Carrying		Fair value
	value		Level 1	Level 2		Level 3		Total

	(U.S. dollars in millions)
Assets:
Dealer loans, net	$	4,694	—	—		$	4,222	$	4,222
Retail loans, net	49,649		—	—		49,713		49,713
Liabilities:
Commercial paper	$	2,929	—	$	2,929	—		$	2,929

Bank loans	2,382		—	2,374		—		2,374
Public MTN Program	40,726		—	40,411		—		40,411
Other debt	3,407		—	3,425		—		3,425
Secured debt	15,344		—	15,395		—		15,395

Fair value information presented in the tables above is based on information available at June 30, 2026 and March 31, 2026. Although the Company is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been updated since those dates, and therefore, the current estimates of fair value at dates subsequent to those dates may differ significantly from the amounts presented herein.