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Finance Receivables (Tables)
 6 Months Ended
Jun. 30, 2016
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]  
Finance Receivables, Net
The finance receivables portfolio consists of the following (in millions): 
 
 
June 30, 2016
 
December 31, 2015

Retail
 
 
 
 
Retail finance receivables, collectively evaluated for impairment, net of fees(a)
 
$
29,128

 
$
27,512

Retail finance receivables, individually evaluated for impairment, net of fees
 
1,733

 
1,612

Total retail finance receivables(b)
 
30,861

 
29,124

Less: allowance for loan losses - collective
 
(570
)
 
(515
)
Less: allowance for loan losses - specific
 
(244
)
 
(220
)
Total retail finance receivables, net
 
30,047

 
28,389

Commercial
 
 
 
 
Commercial finance receivables, collectively evaluated for impairment, net of fees
 
9,318

 
8,357

Commercial finance receivables, individually evaluated for impairment, net of fees
 
115

 
82

Total commercial finance receivables
 
9,433

 
8,439

Less: allowance for loan losses - collective
 
(41
)
 
(38
)
Less: allowance for loan losses - specific
 
(9
)
 
(9
)
Total commercial finance receivables, net
 
9,383

 
8,392

Total finance receivables, net
 
$
39,430

 
$
36,781

________________
(a) Includes $1.3 billion and $1.1 billion of direct-financing leases at June 30, 2016 and December 31, 2015.
(b) Net of unearned income, unamortized premiums and discounts, and deferred fees and costs of $190 million and $179 million at June 30, 2016 and December 31, 2015.
Finance Receivables Summary
Following is a summary of activity in our retail finance receivables portfolio (in millions): 
 
 
Six Months Ended June 30,
 
 
2016
 
2015
Beginning balance
 
$
29,124

 
$
25,623

Purchases
 
8,339

 
8,366

Principal collections and other
 
(6,248
)
 
(5,294
)
Charge-offs
 
(559
)
 
(454
)
Foreign currency translation
 
205

 
(911
)
Ending balance
 
$
30,861

 
$
27,330
Allowance for Credit Losses on Financing Receivables
A summary of the activity in the allowance for retail loan losses is as follows (in millions):
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2016
 
2015
 
2016
 
2015
Beginning balance
 
$
796

 
$
692

 
$
735

 
$
655

Provision for loan losses
 
148

 
139

 
345

 
296

Charge-offs
 
(266
)
 
(220
)
 
(559
)
 
(454
)
Recoveries
 
133

 
111

 
283

 
233

Foreign currency translation
 
3

 
(1
)
 
10

 
(9
)
Ending balance
 
$
814

 
$
721

 
$
814

 
$
721
Financing Receivable Credit Quality Indicators
We use proprietary scoring systems in the underwriting process that measure the credit quality of the receivables using several factors, such as credit bureau information, consumer credit risk scores (e.g
Past Due Financing Receivables
The following is a consolidated summary of the contractual amounts of retail finance receivables, which is not significantly 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 millions): 
 
 
June 30, 2016
 
June 30, 2015
 
 
Total
 
Percent of Contractual Amount Due
 
Total
 
Percent of Contractual Amount Due
31 - 60 days
 
$
1,070

 
3.4
%
 
$
1,062

 
3.6
%
Greater than 60 days
 
465

 
1.5

 
452

 
1.6

Total finance receivables more than 30 days delinquent
 
1,535

 
4.9

 
1,514

 
5.2

In repossession
 
51

 
0.2

 
46

 
0.2

Total finance receivables more than 30 days delinquent or in repossession
 
$
1,586

 
5.1
%
 
$
1,560

 
5.4
%
Troubled Debt Restructurings on Financing Receivables
At June 30, 2016 and December 31, 2015, the outstanding balance of retail finance receivables in the International Segment determined to be TDRs was insignificant; therefore, the following information is presented with regard to the TDRs in the North America Segment only.
The outstanding recorded investment for retail finance receivables that are considered to be TDRs and the related allowance is presented below (in millions):
 
 
June 30, 2016
 
December 31, 2015
Outstanding recorded investment
 
$
1,733

 
$
1,612

Less: allowance for loan losses
 
(244
)
 
(220
)
Outstanding recorded investment, net of allowance
 
$
1,489

 
$
1,392

Unpaid principal balance
 
$
1,777

 
$
1,642

Additional information about loans classified as TDRs is presented below (in millions, except for number of loans):
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2016
 
2015
 
2016
 
2015
Average outstanding recorded investment
 
$
1,696

 
$
1,347

 
$
1,673

 
$
1,309

Finance charge income recognized
 
$
50

 
$
41

 
$
101

 
$
81

Number of loans classified as TDRs during the period
 
16,133

 
14,397

 
30,779

 
26,124

Recorded investment of loans classified as TDRs during the period
 
$
277

 
$
245

 
$
531

 
$
446
Summary of Activity in Commercial Finance Receivable Portfolio
Following is a summary of activity in our commercial finance receivables portfolio (in millions): 
 
 
Six Months Ended June 30,
 
 
2016
 
2015
Beginning balance
 
$
8,439

 
$
8,072

Net funding
 
1,032

 
29

Charge-offs
 
—

 
—

Foreign currency translation
 
(38
)
 
(286
)
Ending balance
 
$
9,433

 
$
7,815
Financing Receivable Credit Quality Indicators for Commercial Lending
A summary of the credit risk profile by dealer grouping of the commercial finance receivables is as follows (in millions): 
 
 
 
 
June 30, 2016
 
December 31, 2015
Group I
-
Dealers with superior financial metrics
 
$
1,277

 
$
1,299

Group II
-
Dealers with strong financial metrics
 
3,105

 
2,648

Group III
-
Dealers with fair financial metrics
 
3,087

 
2,703

Group IV
-
Dealers with weak financial metrics
 
1,162

 
1,100

Group V
-
Dealers warranting special mention due to potential weaknesses
 
609

 
505

Group VI
-
Dealers with loans classified as substandard, doubtful or impaired
 
193

 
184

Ending balance
 
$
9,433

 
$
8,439