Finance receivables, net consist of retail and dealer accounts including accrued interest and deferred fees and costs, net of the allowance for credit losses and deferred income. Pledged receivables represent retail loan receivables that have been sold for legal purposes to securitization trusts but continue to be included in our consolidated financial statements. Cash flows from these receivables are available only for the repayment of debt issued by these trusts and other obligations arising from the securitization transactions. They are not available for payment of our other obligations or to satisfy claims of our other creditors.


(Dollars in millions)			March 31, 2013		March 31, 2012
Retail receivables			$	40,508	$	35,020
Pledged retail receivables				7,669		10,726
Dealer financing				14,995		12,865
				63,172		58,611
Deferred origination (fees) and costs, net				634		639
Deferred income				(794)		(684)
Allowance for credit losses
	Retail and pledged retail receivables			(338)		(405)
	Dealer financing			(107)		(119)
		Total allowance for credit losses		(445)		(524)
Finance receivables, net			$	62,567	$	58,042

Contractual maturities on retail receivables and dealer financing are as follows (dollars in millions):

	Contractual maturities
Years ending March 31,	Retail receivables		Dealer financing
2014	$	13,913	$	11,497
2015		12,524		1,268
2016		10,025		707
2017		7,037		607
2018		3,679		568
Thereafter		993		348
Total	$	48,171	$	14,995

Finance receivables, net and retail receivables presented in the previous tables include direct finance lease receivables, net of $235 million and $213 million at March 31, 2013 and March 31, 2012, respectively. Contractual maturities of retail receivables exclude $6 million of estimated unguaranteed residual values related to direct finance leases.

A significant portion of our finance receivables has historically been settled prior to contractual maturity.

We are exposed to credit risk on our finance receivables. Credit risk is the risk of loss arising from the failure of customers or dealers to meet the terms of their contracts with us or otherwise fail to perform as agreed.

While we use various credit quality metrics to develop our allowance for credit losses on the retail loan and commercial portfolio segments, we primarily utilize the aging of the individual accounts to monitor the credit quality of these finance receivables. Based on our experience, the payment status of borrowers is the strongest indicator of the credit quality of the underlying receivables. Payment status also impacts charge-offs.

Individual borrower accounts for each class of finance receivables within the retail loan and commercial portfolio segments are segregated into one of four aging categories based on the number of days outstanding. The aging for each class of finance receivables is updated quarterly.

For three classes of finance receivables within the dealer products portfolio segment (wholesale, real estate and working capital), all loans outstanding for an individual dealer or dealer group, and affiliated entities, are aggregated and evaluated collectively by dealer or dealer group. This reflects the interconnected nature of financing provided to our individual dealer and dealer group customers, and their affiliated entities.

When assessing the credit quality of the finance receivables within the dealer products portfolio segment, we segregate the finance receivables account balances into four distinct credit quality indicators based on internal risk assessments. The internal risk assessments for all finance receivables within the dealer products portfolio segment are updated on a monthly basis.

Note 4 - Finance Receivables, Net (Continued)

The tables below present each credit quality indicator by class of finance receivable as of March 31, 2013 and March 31, 2012:

		Retail Loan				Commercial
(Dollars in millions)		March 31, 2013		March 31, 2012		March 31, 2013		March 31, 2012

Aging of finance receivables:
	Current	$	47,236	$	44,842	$	362	$	352
	30-59 days past due		454		433		6		8
	60-89 days past due		87		80		1		2
	90 days past due		31		28		-		1
Total		$	47,808	$	45,383	$	369	$	363

		Wholesale				Real Estate				Working Capital
(Dollars in millions)		March 31, 2013		March 31, 2012		March 31, 2013		March 31, 2012		March 31, 2013		March 31, 2012

Credit quality indicators:
	Performing	$	7,659	$	6,249	$	3,968	$	3,746	$	1,616	$	1,422
	Credit Watch		996		675		583		467		80		61
	At Risk		33		78		28		148		28		8
	Default		1		6		1		-		2		5
Total		$	8,689	$	7,008	$	4,580	$	4,361	$	1,726	$	1,496

Note 4 – Finance Receivables, Net (Continued)

Impaired Finance Receivables
The following table summarizes the information related to our impaired loans by class of finance receivable as of March 31, 2013 and March 31, 2012:

	Impaired								Individually Evaluated
	Finance Receivables				Unpaid Principal Balance				Allowance
(Dollars in millions)	2013		2012		2013		2012		2013		2012

Impaired account balances individually evaluated for impairment with an allowance:

Wholesale	$	16	$	7	$	16	$	7	$	3	$	1
Real estate		33		136		33		136		7		37
Working capital		24		7		24		7		23		7
Total	$	73	$	150	$	73	$	150	$	33	$	45

Impaired account balances individually evaluated for impairment without an allowance:

Wholesale	$	66	$	60	$	66	$	60
Real estate		97		-		97		-
Working capital		5		1		5		1
Total	$	168	$	61	$	168	$	61

Impaired account balances aggregated and evaluated for impairment:

Retail loan	$	415	$	502	$	410	$	496
Commercial		1		1		1		1
Total	$	416	$	503	$	411	$	497

Total impaired account balances:

Retail loan	$	415	$	502	$	410	$	496
Commercial		1		1		1		1
Wholesale		82		67		82		67
Real estate		130		136		130		136
Working capital		29		8		29		8
Total	$	657	$	714	$	652	$	708

As of March 31, 2013 and March 31, 2012, the impaired finance receivables balance for accounts in the dealer products portfolio segment that were on nonaccrual status was $69 million and $211 million, respectively and there were no charge-offs against the allowance for credit losses. Therefore, the impaired finance receivables balance is equal to the unpaid principal balance.

The following table summarizes the average impaired finance receivables as of the balance sheet date and the interest income recognized on these loans during fiscal 2013 and fiscal 2012:

	Average Impaired Finance Receivables				Interest Income Recognized
	Years ended March 31,				Years ended March 31,
(Dollars in millions)	2013		2012		2013		2012

Impaired account balances individually evaluated for impairment with an allowance:

Wholesale	$	22	$	5	$	-	$	-
Real estate		75		138		1		5
Working capital		24		8		1		-
Total	$	121	$	151	$	2	$	5

Impaired account balances individually evaluated for impairment without an allowance:

Wholesale	$	63	$	43	$	2	$	1
Real estate		59		-		4		-
Working capital		2		1		-		1
Total	$	124	$	44	$	6	$	2

Impaired account balances aggregated and evaluated for impairment:

Retail loan	$	462	$	553	$	37	$	47
Commercial		1		1		-		-
Total	$	463	$	554	$	37	$	47

Total impaired account balances:

Retail loan	$	462	$	553	$	37	$	47
Commercial		1		1		-		-
Wholesale		85		48		2		1
Real estate		134		138		5		5
Working capital		26		9		1		1
Total	$	708	$	749	$	45	$	54

For accounts not under bankruptcy protection, the amount of finance receivables modified as a troubled debt restructuring during fiscal 2013 and 2012 was not significant for each class of finance receivables. Troubled debt restructurings for accounts within the retail loan class of finance receivables are comprised exclusively of contract term extensions that reduce the monthly payment due from the customer. Troubled debt restructurings for accounts within the commercial class of finance receivables consist of contract term extensions, interest rate adjustments, or a combination of the two. For the three classes of finance receivables within the dealer products portfolio segment, troubled debt restructurings include contract term extensions, interest rate adjustments, waivers of loan covenants, or any combination of the three. Troubled debt restructurings of accounts not under bankruptcy protection did not include forgiveness of principal during fiscal 2013 and 2012.

We consider finance receivables under bankruptcy protection within the retail loan and commercial classes troubled debt restructurings as of the date we receive notice of a customer filing for bankruptcy protection, regardless of the ultimate outcome of the bankruptcy proceedings. The bankruptcy court may impose modifications as part of the proceedings, including interest rate adjustments and forgiveness of principal. For fiscal 2013 and 2012, the financial impact of troubled debt restructurings related to accounts under bankruptcy protection was not significant to our Consolidated Statement of Income and Consolidated Balance Sheet.

Finance receivables modified as troubled debt restructurings for which there was a subsequent payment default during fiscal 2013 and 2012, and for which the modification occurred within twelve months of the payment default, were not significant for all classes of receivables.