Allowance for Doubtful Accounts

We have two portfolio segments of finance receivables based on the type of financing inherent to each portfolio. The retail portfolio segment represents loans or leases to end-users for the purchase or lease of vehicles. The wholesale portfolio segment represents loans to dealers to finance their inventory. Each portfolio consists of one class of receivable based on: (i) initial measurement attributes of the receivables, and (ii) the assessment and monitoring of risk and performance of the receivables.

The activity related to our allowance for doubtful accounts for our retail portfolio, wholesale portfolio, and trade and other receivables is summarized as follows:



	Three Months Ended April 30, 2012											Three Months Ended April 30, 2011
	Retail Portfolio			Wholesale Portfolio			Trade and Other Receivables		Total			Retail Portfolio			Wholesale Portfolio		Trade and Other Receivables			Total
(in millions)
Allowance for doubtful accounts, at beginning of period	$	28		$	3		$	16	$	47		$	54		$	2	$	38		$	94
Provision for doubtful accounts, net of recoveries	—			(1		)	1		—			1			—		(3		)	(2		)
Charge-off of accounts^(A)	(2		)	—			—		(2		)	(15		)	—		(1		)	(16		)
Allowance for doubtful accounts, at end of period	$	26		$	2		$	17	$	45		$	40		$	2	$	34		$	76



	Six Months Ended April 30, 2012												Six Months Ended April 30, 2011
	Retail Portfolio			Wholesale Portfolio			Trade and Other Receivables			Total			Retail Portfolio			Wholesale Portfolio		Trade and Other Receivables			Total
(in millions)
Allowance for doubtful accounts, at beginning of period	$	31		$	3		$	16		$	50		$	58		$	2	$	36		$	96
Provision for doubtful accounts, net of recoveries	(2		)	(1		)	3			—			(1		)	—		(1		)	(2		)
Charge-off of accounts^(A)	(3		)	—			(2		)	(5		)	(17		)	—		(1		)	(18		)
Allowance for doubtful accounts, at end of period	$	26		$	2		$	17		$	45		$	40		$	2	$	34		$	76

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(A)

We repossess sold and leased vehicles on defaulted finance receivables and leases, and place them into Inventories. Losses recognized at the time of repossession and charged against the allowance for doubtful accounts were $2 million and $3 million for the three and six months ended April 30, 2012, respectively, and $12 million and $15 million for the three and six months ended April 30, 2011, respectively.

The accrual of interest income is discontinued on certain impaired finance receivables. Impaired finance receivables include accounts with specific loss reserves and certain accounts that are on non-accrual status. In certain cases, we continue to collect payments on our impaired finance receivables.

Information regarding impaired finance receivables is as follows:



	As of
	April 30, 2012						October 31, 2011
	Retail Portfolio		Wholesale Portfolio		Total		Retail Portfolio		Wholesale Portfolio		Total
(in millions)
Impaired finance receivables with specific loss reserves	$	16	$	—	$	16	$	15	$	—	$	15
Impaired finance receivables without specific loss reserves	1		—		1		2		—		2
Specific loss reserves on impaired finance receivables	10		—		10		10		—		10
Finance receivables on non-accrual status	12		—		12		14		—		14

For the impaired finance receivables in the retail portfolio as of April 30, 2012 and 2011, the average balances of those receivables were $17 million and $39 million during the six months ended April 30, 2012 and 2011, respectively.

The Company uses the aging of our receivables as well as other inputs when assessing credit quality. The aging analysis for finance receivables is summarized as follows:



	As of
	April 30, 2012						October 31, 2011
	Retail Portfolio		Wholesale Portfolio		Total		Retail Portfolio		Wholesale Portfolio		Total
(in millions)
Current	$	1,307	$	1,281	$	2,588	$	1,515	$	1,328	$	2,843
30-90 days past due	65		2		67		85		5		90
Over 90 days past due	12		1		13		13		1		14
Total finance receivables	$	1,384	$	1,284	$	2,668	$	1,613	$	1,334	$	2,947