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Finance Receivables (Tables)

12 Months Ended

Dec. 31, 2021

Accounts, Notes, Loans and Financing Receivable [Line Items]


	December 31, 2021		December 31, 2020
Retail finance receivables
Retail finance receivables, net of fees(a)	$	58,093	$	51,288
Less: allowance for loan losses	(1,839)		(1,915)
Total retail finance receivables, net	56,254		49,373
Commercial finance receivables
Commercial finance receivables, net of fees(b)	6,772		9,080
Less: allowance for loan losses	(47)		(63)
Total commercial finance receivables, net	6,725		9,017
Total finance receivables, net	$	62,979	$	58,390
Fair value utilizing Level 2 inputs	$	6,725	$	9,017
Fair value utilizing Level 3 inputs	$	57,613	$	51,645

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(a)Net of unearned income, unamortized premiums and discounts, and deferred fees and costs.

(b)Net of dealer cash management balances of $1.0 billion and $1.4 billion at December 31, 2021 and 2020.

Allowance for Credit Losses on Financing Receivables

A summary of the activity in the allowance for retail loan losses is as follows:


	Years Ended December 31,
	2021		2020		2019
Allowance for retail loan losses beginning balance	$	1,915	$	866	$	844
Impact of adopting ASU 2016-13 (Not e 1)	—		801		—
Provision for loan losses	267		880		690
Charge-offs	(897)		(1,149)		(1,218)
Recoveries	571		537		548
Foreign currency translation	(17)		(20)		2
Allowance for retail loan losses ending balance	$	1,839	$	1,915	$	866

The allowance for retail loan losses decreased by $76 million as of December 31, 2021 compared to December 31, 2020, primarily due to a reduction in the reserve levels established at the onset of the COVID-19 pandemic. This reduction was a result of actual credit performance that was better than forecasted and favorable expectations for future charge-offs and recoveries, reflecting improved economic conditions. These decreases in the reserve levels were partially offset by reserves established for loans originated during 2021.

Financing Receivable Credit Quality Indicators

The following tables are consolidated summaries of the amortized cost of the retail finance receivables by FICO score or its equivalent, determined at origination, for each vintage of the portfolio at December 31, 2021 and 2020:


	Year of Origination												December 31, 2021
	2021		2020		2019		2018		2017		Prior			Total		Percent
Prime - FICO Score 680 and greater	$	19,729	$	12,408	$	4,078	$	2,298	$	763	$	143		$	39,419	67.9	%
Near-prime - FICO Score 620 to 679	3,856		2,388		1,229		648		274		84			8,479		14.6
Sub-prime - FICO Score less than 620	4,053		2,528		1,777		972		570		295			10,195		17.5
Retail finance receivables, net of fees	$	27,638	$	17,324	$	7,084	$	3,918	$	1,607	$	522		$	58,093	100.0	%


	Year of Origination												December 31, 2020
	2020		2019		2018		2017		2016		Prior		Total		Percent
Prime - FICO Score 680 and greater	$	18,685	$	7,033	$	4,491	$	1,917	$	555	$	119	$	32,800	64.0	%
Near-prime - FICO Score 620 to 679	3,695		2,097		1,232		603		225		83		7,935		15.4
Sub-prime - FICO Score less than 620	3,803		2,920		1,740		1,173		610		307		10,553		20.6
Retail finance receivables, net of fees	$	26,183	$	12,050	$	7,463	$	3,693	$	1,390	$	509	$	51,288	100.0	%


Dealer Risk Rating						Description
I						Performing accounts with strong to acceptable financial metrics with at least satisfactory capacity to meet financial commitments.
II						Performing accounts experiencing potential weakness in financial metrics and repayment prospects resulting in increased monitoring.
III						Non-Performing accounts with inadequate paying capacity for current obligations and that have the distinct possibility of creating a loss if deficiencies are not corrected.
IV						Non-Performing accounts with inadequate paying capacity for current obligations and inherent weaknesses that make collection or liquidation in full highly questionable or improbable.

The following tables summarize the credit risk profile by dealer risk rating of commercial finance receivables at December 31, 2021 and 2020:


	Year of Origination(a)														December 31, 2021
Dealer Risk Rating	Revolving		2021		2020		2019		2018		2017		Prior		Total		Percent
I	$	5,296	$	433	$	426	$	131	$	57	$	50	$	10	$	6,403	94.6	%
II	213		5		16		12		1		10		—		257		3.8
III	81		8		15		2		—		2		4		112		1.6
IV	—		—		—		—		—		—		—		—		—
Balance at end of period	$	5,590	$	446	$	457	$	145	$	58	$	62	$	14	$	6,772	100.0	%

________________

(a) Floorplan advances comprise 94% of the total revolving balance. Dealer term loans are presented by year of origination.


	Year of Origination(a)														December 31, 2020
Dealer Risk Rating	Revolving		2020		2019		2018		2017		2016		Prior		Total		Percent
I	$	7,210	$	579	$	179	$	77	$	110	$	43	$	19	$	8,217	90.5	%
II	508		2		18		11		15		18		34		606		6.7
III	203		—		8		29		2		11		—		253		2.8
IV	—		—		—		—		—		—		4		4		—
Balance at end of period	$	7,921	$	581	$	205	$	117	$	127	$	72	$	57	$	9,080	100.0	%

________________

(a) Floorplan advances comprise 97% of the total revolving balance. Dealer term loans are presented by year of origination.

Past Due Financing Receivables

The following tables are consolidated summaries of the delinquency status of the outstanding amortized cost of retail finance receivables for each vintage of the portfolio at December 31, 2021 and 2020:


	Year of Origination												December 31, 2021
	2021		2020		2019		2018		2017		Prior		Total		Percent
0 - 30 days	$	27,270	$	16,945	$	6,772	$	3,721	$	1,478	$	440	$	56,626	97.5	%

31 - 60 days	273		276		230		147		97		60		1,083		1.8
Greater than 60 days	83		93		76		46		30		21		349		0.6
Finance receivables more than 30 days delinquent	356		369		306		193		127		81		1,432		2.4
In repossession	12		10		6		4		2		1		35		0.1
Finance receivables more than 30 days delinquent or in repossession	368		379		312		197		129		82		1,467		2.5
Retail finance receivables, net of fees	$	27,638	$	17,324	$	7,084	$	3,918	$	1,607	$	522	$	58,093	100.0	%


	Year of Origination												December 31, 2020
	2020		2019		2018		2017		2016		Prior		Total		Percent
0 - 30 days	$	25,894	$	11,591	$	7,131	$	3,454	$	1,249	$	421	$	49,740	97.0	%

31 - 60 days	210		325		235		170		102		61		1,103		2.1
Greater than 60 days	72		123		90		64		37		26		412		0.8
Finance receivables more than 30 days delinquent	282		448		325		234		139		87		1,515		2.9
In repossession	7		11		7		5		2		1		33		0.1
Finance receivables more than 30 days delinquent or in repossession	289		459		332		239		141		88		1,548		3.0
Retail finance receivables, net of fees	$	26,183	$	12,050	$	7,463	$	3,693	$	1,390	$	509	$	51,288	100.0	%

Troubled Debt Restructurings on Financing Receivables

Additional TDR activity is presented below:


	Years Ended December 31,
	2021		2020		2019
Number of loans classified as TDRs during the period	46,158		57,524		69,863
Outstanding amortized cost of loans classified as TDRs during the period	$	920	$	1,057	$	1,269