Finance Receivables

Finance receivables are receivables of our Financial Services operations. Finance receivables generally consist of wholesale notes and accounts, as well as retail notes, finance leases and accounts. Total finance receivables reported on the Consolidated Balance Sheets are net of an allowance for doubtful accounts. Total assets of our Financial Services operations net of intercompany balances are $2.3 billion and $2.5 billion as of April 30, 2016 and October 31, 2015, respectively. Included in total assets of our Financial Services operations are finance receivables of $1.8 billion and $2.0 billion as of April 30, 2016 and October 31, 2015, respectively. We have two portfolio segments of finance receivables that we distinguish based on the type of customer and nature of the 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.

Our Finance receivables, net consist of the following:



(in millions)	April 30, 2016		October 31, 2015
Retail portfolio	$	506	$	554
Wholesale portfolio	1,280		1,467
Total finance receivables	1,786		2,021
Less: Allowance for doubtful accounts	25		26
Total finance receivables, net	1,761		1,995
Less: Current portion, net^(A)	1,552		1,779
Noncurrent portion, net	$	209	$	216

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(A)	The current portion of finance receivables is computed based on contractual maturities. Actual cash collections typically vary from the contractual cash flows because of prepayments, extensions, delinquencies, credit losses, and renewals.

Securitizations

Our Financial Services operations transfer wholesale notes, retail accounts receivable, retail notes, finance leases, and operating leases to special purpose entities ("SPEs"), which generally are only permitted to purchase these assets, issue asset-backed securities, and make payments on the securities issued. In addition to servicing receivables, our continued involvement in the SPEs may include an economic interest in the transferred receivables and, in some cases, managing exposure to interest rate changes on the securities using interest rate swaps or interest rate caps. There were no transfers of finance receivables that qualified for sale accounting treatment as of April 30, 2016 and October 31, 2015, and as a result, the transferred finance receivables are included in our Consolidated Balance Sheets and the related interest earned is included in Finance revenues.

We transfer eligible finance receivables into retail note owner trusts or wholesale note owner trusts in order to issue asset-backed securities. These trusts are VIEs of which we are determined to be the primary beneficiary and, therefore, the assets and liabilities of the trusts are included in our Consolidated Balance Sheets. The outstanding balance of finance receivables transferred into these VIEs was $965 million and $1.0 billion as of April 30, 2016 and October 31, 2015, respectively. Other finance receivables related to secured transactions that do not qualify for sale accounting treatment were $133 million and $96 million as of April 30, 2016 and October 31, 2015, respectively. For more information on assets and liabilities of consolidated VIEs and other securitizations accounted for as secured borrowings by our Financial Services segment, see Note 1, Summary of Significant Accounting Policies.

Finance Revenues

The following table presents the components of our Finance revenues:



	Three Months Ended April 30,						Six Months Ended April 30,
(in millions)	2016			2015			2016			2015
Retail notes and finance leases revenue	$	9		$	12		$	19		$	25
Wholesale notes interest	26			24			52			48
Operating lease revenue	16			15			32			30
Retail and wholesale accounts interest	7			9			14			17
Gross finance revenues	58			60			117			120
Less: Intercompany revenues	(25		)	(25		)	(49		)	(49		)
Finance revenues	$	33		$	35		$	68		$	71