Note 2: Allowance for Credit Losses

As of January 28, 2012, we had gross notes receivable of $12.4 million outstanding from 16 customers (including $2.7 million outstanding from our recently deconsolidated VIE) with a corresponding allowance for credit losses of $2.2 million. We have collateral from these customers in the form of inventory or real estate to support the net carrying value of these notes. We do not accrue interest income on these notes receivable, but we record interest income when it is received. Of the $12.4 million in notes receivable as of January 28, 2012, $2.1 million is expected to be repaid in the next twelve months, and was categorized as receivables in our consolidated balance sheet. The remainder of the notes receivable were categorized as other long-term assets, with the allowance for credit losses allocated between receivables and other long-term assets.

The following is an analysis of the allowance for credit losses related to our notes receivable as of and for the quarter and nine months ended January 28, 2012, and January 22, 2011:

	Third Quarter Ended						Nine Months Ended
(Unaudited, amounts in thousands)	1/28/12			1/22/11			1/28/12			1/22/11
Beginning balance	$	2,283		$	573		$	2,067		$	1,004
Write-offs		0			0			(15	)		0
Provision for (reversal of) credit losses, net		0			518			265			56
Currency effect		(52	)		(20	)		(86	)		11
Ending balance	$	2,231		$	1,071		$	2,231		$	1,071