Note 13 - Loans and Interest Receivable, Net

3 Months Ended

Mar. 31, 2012

Loans and interest receivable represent purchased consumer receivables arising from loans made by a partner chartered financial institution to individual consumers in the U.S. to purchase goods and services through our Bill Me Later merchant network. During the three months ended March 31, 2012 and 2011, we purchased approximately $650 million and $431 million, respectively, in consumer receivables. Loans and interest receivable are reported at their outstanding principal balances, including unamortized deferred origination costs and net of allowance, and include the estimated collectible interest and fees. We use a consumer's FICO score, among other measures, in evaluating the credit quality of our consumer receivables. A FICO score is a type of credit score that lenders use to assess an applicant's credit risk and whether to extend credit. Individual FICO scores generally are obtained each quarter the consumer has an outstanding loan receivable owned by Bill Me Later. The weighted average consumer FICO score related to our loans and interest receivable balance outstanding at March 31, 2012 was 696. As of March 31, 2012 and December 31, 2011, approximately 59.2% and 59.3%, respectively, of our loans and interest receivable balance was due from consumers with FICO scores greater than 680, which is generally considered "prime" by the consumer credit industry. As of March 31, 2012, approximately 91% of our loans and interest receivable portfolio was current.

The following table summarizes the activity in the allowance for loans and interest receivable:



	Three Months Ended March 31,
	2012			2011
	(In millions)
Balance as of January 1	$	59		$	42
Charge-offs	(28		)	(19		)
Recoveries	2			2
Provision	31			16
Balance as of March 31	$	64		$	41