Note 13 - Loans and Interest Receivable, Net

6 Months Ended

Jun. 30, 2013

Loans and interest receivable represent purchased consumer receivables arising from loans made by a partner chartered financial institution to individual consumers in the U.S. to purchase goods and services through our Bill Me Later merchant network. During the three months ended June 30, 2013 and 2012, we purchased approximately $934 million and $696 million, respectively, in consumer receivables. During the six months ended June 30, 2013 and 2012, we purchased approximately $1.8 billion and $1.3 billion, respectively, in consumer receivables. Loans and interest receivable are reported at their outstanding principal balances, net of allowances, including unamortized deferred origination costs and estimated collectible interest and fees. We use a consumer's FICO score, among other measures, in evaluating the credit quality of our consumer receivables. A FICO score is a type of credit score that lenders use to assess an applicant's credit risk and whether to extend credit. Individual FICO scores generally are obtained each quarter the consumer has an outstanding loan receivable owned by Bill Me Later. The weighted average consumer FICO score related to our loans and interest receivable balance outstanding at June 30, 2013 was 687, as compared to 689 at December 31, 2012. As of June 30, 2013 and December 31, 2012, approximately 54.7% and 55.8%, respectively, of our loans and interest receivable balance was due from consumers with FICO scores greater than 680, which is generally considered "prime" by the consumer credit industry. As of June 30, 2013 and December 31, 2012, approximately 89% and 90%, respectively, of our loans and interest receivable portfolio was current.

The following table summarizes the activity in the allowance for loans and interest receivable for the periods indicated:



	Six Months Ended June 30,
	2013			2012
	(In millions)
Balance as of January 1	$	101		$	59
Charge-offs	(105		)	(59		)
Recoveries	6			5
Provision	116			66
Balance as of June 30	$	118		$	71