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Allowance for Credit Losses
 3 Months Ended
Dec. 31, 2013
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 Nine Months Ended
   December 31, December 31,
(Dollars in millions)  2013  2012  2013  2012
Allowance for credit losses at beginning of period $ 467 $ 549 $ 527 $ 619
Provision for credit losses   63   88   102   107
Charge-offs, net of recoveries   (74)   (77)   (173)   (166)
Allowance for credit losses at end of period $ 456 $ 560 $ 456 $ 560

Charge-offs are shown net of recoveries of $19 million and $64 million for the three and nine months ended December 31, 2013, respectively, and recoveries of $18 million and $59 million for the three and nine months ended December 31, 2012, respectively.

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 nine months ended December 31, 2013 and 2012:

 

For the Three and Nine Months Ended December 31, 2013

 

(Dollars in millions)Retail Loan Commercial Dealer Products Total
             
Allowance for Credit Losses for Finance Receivables:
             
Beginning balance, October 1, 2013$ 290 $ 4 $ 102 $ 396
Charge-offs   (74)   -    -    (74)
Recoveries   14   -    -    14
Provisions   59   (2)   (6)   51
Ending balance, December 31, 2013$ 289 $ 2 $ 96 $ 387
             
Beginning balance, April 1, 2013$ 333 $ 5 $ 107 $ 445
Charge-offs   (190)   (1)   -  $ (191)
Recoveries   49   -    -    49
Provisions   97   (2)   (11)   84
Ending balance, December 31, 2013$ 289 $ 2 $ 96 $ 387
             
Ending balance: Individually evaluated for impairment$ -  $ -  $ 30 $ 30
Ending balance: Collectively evaluated for impairment$ 289 $ 2 $ 66 $ 357
             
Gross Finance Receivables:           
             
Ending balance, December 31, 2013$ 49,719 $ 422 $ 16,590 $ 66,731
Ending balance: Individually evaluated for impairment$ -  $ -  $ 232 $ 232
Ending balance: Collectively evaluated for impairment$ 49,719 $ 422 $ 16,358 $ 66,499

The ending balance of gross finance receivables collectively evaluated for impairment includes approximately $345 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 December 31, 2013, as they are deemed to be not significant for individual evaluation. 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 Nine Months Ended December 31, 2012

 

(Dollars in millions)Retail Loan Commercial Dealer Products Total
             
Allowance for Credit Losses for Finance Receivables:
             
Beginning balance, October 1, 2012$ 333 $ 5 $ 122 $ 460
Charge-offs   (79)   -    -    (79)
Recoveries   13   1   -    14
Provisions   89   (1)   (4)   84
Ending balance, December 31, 2012$ 356 $ 5 $ 118 $ 479
             
Beginning balance, April 1, 2012$ 395 $ 10 $ 119 $ 524
Charge-offs   (188)   (1)   -    (189)
Recoveries   46   1   -    47
Provisions   103   (5)   (1)   97
Ending balance, December 31, 2012$ 356 $ 5 $ 118 $ 479
             
Ending balance: Individually evaluated for           
impairment$ -  $ -  $ 43 $ 43
Ending balance: Collectively evaluated for           
impairment$ 356 $ 5 $ 75 $ 436
             
Gross Finance Receivables:           
             
Ending balance, December 31, 2012$ 47,880 $ 362 $ 14,937 $ 63,179
Ending balance: Individually evaluated for           
impairment$ -  $ -  $ 259 $ 259
Ending balance: Collectively evaluated for           
impairment$ 47,880 $ 362 $ 14,678 $ 62,920

The ending balance of gross finance receivables collectively evaluated for impairment includes approximately $444 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 December 31, 2012, as they are deemed to be not significant for individual evaluation. 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) December 31, 2013March 31, 2013
Aggregate balances 60 or more days past due           
 Finance receivables     $  178 $ 119
 Operating leases        47   36
Total     $  225 $ 155

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 December 31, 2013 and March 31, 2013:

(Dollars in millions)30 - 59 Days Past Due60 - 89 Days Past Due90 Days or Greater Past DueTotal Past DueCurrentTotal Finance Receivables90 Days or Greater Past Due and Accruing
               
As of December 31, 2013            
               
Retail loan$ 634$ 130$ 47$ 811$ 48,908$ 49,719$ 47
Commercial  8  1  -   9  413  422  -
Wholesale  -   -   -   -   10,069  10,069  -
Real estate  -   -   -   -   4,647  4,647  -
Working capital  -   -   -   -   1,874  1,874  -
Total$ 642$ 131$ 47$ 820$ 65,911$ 66,731$ 47
               
(Dollars in millions)30 - 59 Days Past Due60 - 89 Days Past Due90 Days or Greater Past DueTotal Past DueCurrentTotal Finance Receivables90 Days or Greater Past Due and Accruing
               
As of March 31, 2013            
               
Retail loan$ 454$ 87$ 31$ 572$ 47,236$ 47,808$ 31
Commercial  6  1  -   7  362  369  -
Wholesale  -   -   -   -   8,689  8,689  -
Real estate  -   -   -   -   4,580  4,580  -
Working capital  -   -   -   -   1,726  1,726  -
Total$ 460$ 88$ 31$ 579$ 62,593$ 63,172$ 31