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Allowance for Credit Losses
 3 Months Ended
Sep. 30, 2012
Allowance for Credit Losses [Abstract]  
Allowance for Credit Losses

Note 6 – Allowance for Credit Losses

 

The following table provides information related to our allowance for credit losses on finance receivables and investments in operating leases:

   Three Months Ended Six Months Ended
   September 30, September 30,
(Dollars in millions)  2012  2011  2012  2011
Allowance for credit losses at beginning of period $ 606 $ 667 $ 619 $ 879
Provision for credit losses   3   11   19   (192)
Charge-offs, net of recoveries   (60)   (55)   (89)   (64)
Allowance for credit losses at end of period $ 549 $ 623 $ 549 $ 623

Charge-offs are shown net of recoveries of $18 million and $41 million for the three and six months ended September 30, 2012, respectively, and recoveries of $26 million and $78 million for the three and six months ended September 30, 2011, respectively.

Note 6 – Allowance for Credit Losses (Continued)

 

Allowance for Credit Losses and Finance Receivables by Portfolio Segment

 

The following tables provide information related to our allowance for credit losses and finance receivables by portfolio segment for the three and six months ended September 30, 2012 and 2011:

 

For the Three and Six Months Ended September 30, 2012

 

(Dollars in millions)Retail Loan Commercial Dealer Products Total
             
Allowance for Credit Losses for Finance Receivables:
             
Beginning balance, July 1, 2012$ 356 $ 6 $ 153 $ 515
Charge-offs   (65)   -   -   (65)
Recoveries   15   -   -   15
Provisions   27   (1)   (31)   (5)
Ending balance, September 30, 2012$ 333 $ 5 $ 122 $ 460
             
Beginning balance, April 1, 2012$ 395 $ 10 $ 119 $ 524
Charge-offs   (109)   (1)   - $ (110)
Recoveries   33   -   -   33
Provisions   14   (4)   3   13
Ending balance, September 30, 2012$ 333 $ 5 $ 122 $ 460
             
Ending balance: Individually evaluated for impairment$ - $ - $ 45 $ 45
Ending balance: Collectively evaluated for impairment$ 333 $ 5 $ 77 $ 415
             
Gross Finance Receivables:           
             
Ending balance, September 30, 2012$ 47,355 $ 361 $ 13,956 $ 61,672
Ending balance: Individually evaluated for impairment$ - $ - $ 258 $ 258
Ending balance: Collectively evaluated for impairment$ 47,355 $ 361 $ 13,698 $ 61,414

The ending balance of gross finance receivables collectively evaluated for impairment includes approximately $471 million and $1 million of finance receivables within the retail loan and commercial portfolio segments, respectively, that are specifically identified as impaired. These amounts are aggregated with their respective portfolio segments when determining the allowance for credit losses as of September 30, 2012, as they are deemed to be insignificant for individual evaluation and we have determined that the allowance for credit losses would not be materially different if the amounts had been individually evaluated for impairment.

Note 6 – Allowance for Credit Losses (Continued)

 

For the Three and Six Months Ended September 30, 2011

 

(Dollars in millions)Retail Loan Commercial Dealer Products Total
             
Allowance for Credit Losses for Finance Receivables:
             
Beginning balance, July 1, 2011$ 380 $ 13 $ 135 $ 528
Charge-offs   (67)   (1)   -   (68)
Recoveries   19   1   -   20
Provisions   43   (2)   (11)   30
Ending balance, September 30, 2011$ 375 $ 11 $ 124 $ 510
             
Beginning balance, April 1, 2011$ 595 $ 18 $ 141 $ 754
Charge-offs   (120)   (1)   - $ (121)
Recoveries   63   2   -   65
Provisions   (163)   (8)   (17)   (188)
Ending balance, September 30, 2011$ 375 $ 11 $ 124 $ 510
             
Ending balance: Individually evaluated for           
impairment$ - $ - $ 52 $ 52
Ending balance: Collectively evaluated for           
impairment$ 375 $ 11 $ 72 $ 458
             
Gross Finance Receivables:           
             
Ending balance, September 30, 2011$ 45,925 $ 389 $ 9,889 $ 56,203
Ending balance: Individually evaluated for           
impairment$ - $ - $ 187 $ 187
Ending balance: Collectively evaluated for           
impairment$ 45,925 $ 389 $ 9,702 $ 56,016

The ending balance of gross finance receivables collectively evaluated for impairment includes approximately $573 million and $1 million of finance receivables within the retail loan and commercial portfolio segments, respectively, that are specifically identified as impaired. These amounts are aggregated with their respective portfolio segments when determining the allowance for credit losses as of September 30, 2011, as they are deemed to be insignificant for individual evaluation and we have determined that the allowance for credit losses would not be materially different if the amounts had been individually evaluated for impairment.

Note 6 – Allowance for Credit Losses (Continued)

 

Past Due Finance Receivables and Investments in Operating Leases

(Dollars in millions)    September 30, 2012March 31, 2012
Aggregate balances 60 or more days past due           
 Finance receivables      $ 158 $ 111
 Operating leases        38   31
Total      $ 196 $ 142

Substantially all retail, direct finance lease, and operating lease receivables do not involve recourse to the dealer in the event of customer default. Finance and operating lease receivables 60 or more days past due include accounts in bankruptcy and exclude accounts for which vehicles have been repossessed.

 

Past Due Finance Receivables by Class

 

The following tables summarize the aging of finance receivables by class as of September 30, 2012 and March 31, 2012:

(Dollars in millions)30 - 59 Days Past Due60 - 89 Days Past Due90 Days Past DueTotal Past DueCurrentTotal Finance ReceivablesCarrying Amount 90 Days Past Due and Accruing
               
As of September 30, 2012            
               
Retail loan$ 550$ 113$ 44$ 707$ 46,648$ 47,355$ 44
Commercial  10  1  -  11  350  361  -
Wholesale  -  -  -  -  7,879  7,879  -
Real estate  -  -  -  -  4,402  4,402  -
Working capital  -  -  -  -  1,675  1,675  -
Total$ 560$ 114$ 44$ 718$ 60,954$ 61,672$ 44
               
(Dollars in millions)30 - 59 Days Past Due60 - 89 Days Past Due90 Days Past DueTotal Past DueCurrentTotal Finance ReceivablesCarrying Amount 90 Days Past due and Accruing
               
As of March 31, 2012            
               
Retail loan$ 433$ 80$ 28$ 541$ 44,842$ 45,383$ 28
Commercial  8  2  1  11  352  363  1
Wholesale  -  -  -  -  7,008  7,008  -
Real estate  -  -  -  -  4,361  4,361  -
Working capital  1  -  -  1  1,495  1,496  -
Total$ 442$ 82$ 29$ 553$ 58,058$ 58,611$ 29