FINANCE RECEIVABLES

Finance receivables consist of the following (in thousands):



	March 31, 2012			December 31, 2011
Pre-acquisition finance receivables - outstanding balance	$	3,674,764		$	4,366,075

Pre-acquisition finance receivables - carrying value	3,357,341			4,027,361
Post-acquisition finance receivables, net of fees	6,326,427			5,313,899
	9,683,768			9,341,260
Less: allowance for loan losses on post-acquisition finance receivables	(208,092		)	(178,768		)
Total finance receivables, net	$	9,475,676		$	9,162,492

A summary of our finance receivables is as follows (in thousands):



	Three Months Ended
	March 31, 2012			March 31, 2011
Pre-acquisition finance receivables - carrying value, beginning of period	$	4,027,361		$	7,299,963
Post-acquisition finance receivables, beginning of period	5,313,899			923,713
	9,341,260			8,223,676
Loans purchased	1,395,757			1,137,921
Charge-offs	(51,058		)	(1,809		)
Principal collections and other	(919,865		)	(852,620		)
Change in carrying value adjustment on the pre-acquisition finance receivables	(82,326		)	(165,280		)
Balance at end of period	$	9,683,768		$	8,341,888

Finance receivables are collateralized by vehicle titles and we have the right to repossess the vehicle in the event the consumer defaults on the payment terms of the contract.

The accrual of finance charge income has been suspended on $350.4 million and $439.4 million of finance receivables (based on contractual amount due) as of March 31, 2012 and December 31, 2011, respectively.

Finance contracts are purchased by us from auto dealers without recourse, and accordingly, the dealer has no liability to us if the consumer defaults on the contract. Depending upon the contract structure and consumer credit attributes, we may pay dealers a participation fee or we may charge dealers a non-refundable acquisition fee when purchasing individual finance contracts. We also have manufacturer incentive programs with GM and other new vehicle manufacturers, typically known as subvention programs, under which the manufacturers provide us cash payments in order for us to offer lower interest rates on finance contracts we purchase. We record the amortization of participation fees and subvention and accretion of acquisition fees to finance charge income using the effective interest method.

We review our pre-acquisition portfolio for differences between contractual cash flows and the cash flows expected to be collected from our pre-acquisition portfolio to determine if the difference is attributable, at least in part, to credit quality. During the three months ended March 31, 2012, as a result of improvements in the credit performance of the pre-acquisition portfolio, which resulted in an increase of expected cash flows of $166.6 million, we transferred this excess from the non-accretable discount to accretable yield. This excess will be amortized through finance charge income over the remaining life of the portfolio.

A summary of the accretable yield, which represents the amount of finance charge income to be recognized over the remaining life of the pre-acquisition portfolio, is as follows (in thousands):



	Three Months Ended
	March 31, 2012			March 31, 2011
Balance at beginning of period	$	737,464		$	1,201,178
Accretion of accretable yield	(135,825		)	(201,810		)
Transfer from non-accretable discount	166,621
Balance at end of period	$	768,260		$	999,368

A summary of the allowance for loan losses is as follows (in thousands):



	Three Months Ended
	March 31, 2012			March 31, 2011
Balance at beginning of period	$	178,768		$	26,352
Provision for loan losses	48,554			39,424
Charge-offs	(51,058		)	(1,809		)
Recoveries	31,828			1,448
Balance at end of period	$	208,092		$	65,415

Credit Risk

A summary of the credit risk profile by FICO score band of the finance receivables, determined at origination, is as follows (in thousands):



	March 31, 2012		December 31, 2011
FICO Score less than 540	$	2,370,839	$	2,133,361
FICO Score 540 to 599	4,356,261		4,166,988
FICO Score 600 to 659	2,597,954		2,623,882
FICO Score greater than 660	676,137		755,743
Balance at end of period^(a)	$	10,001,191	$	9,679,974

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(a) Balance at end of period is the sum of pre-acquisition finance receivables - outstanding balance and post-acquisition finance receivables, net of fees.

Delinquency

An account is considered delinquent if a substantial portion of a scheduled payment has not been received by the date such payment was contractually due. The following is a summary of the contractual amounts of finance receivables, which is not materially different than recorded investment, that are (i) more than 30 days delinquent, but not yet in repossession, and (ii) in repossession, but not yet charged off (dollars in thousands):



	March 31, 2012				March 31, 2011
	Amount		Percent of Contractual Amount Due		Amount		Percent of Contractual Amount Due
Delinquent contracts:
31 to 60 days	$	318,412	3.2	%	$	332,746	3.8	%
Greater-than-60 days	124,561		1.2	%	135,081		1.5	%
	442,973		4.4	%	467,827		5.3	%
In repossession	24,896		0.3	%	26,601		0.3	%
	$	467,869	4.7	%	$	494,428	5.6	%

We assessed deferments granted on or after October 1, 2010 on accounts in the post-acquisition portfolio to identify any that qualified as troubled debt restructurings. The pre-acquisition portfolio is excluded from the provisions of the troubled debt restructuring guidance, ASU 2011-02, A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring, since expected future credit losses were recognized in the purchase accounting for that portfolio. At March 31, 2012, we believe the number of accounts in the post-acquisition portfolio that would be considered troubled debt restructurings is immaterial.