content_image/4149.jpg content_image/4151.jpg
## NOTE 13. ALLOWANCE FOR CREDIT LOSSES – FINANCIAL SERVICES SECTOR 

The allowance for credit losses is our estimate of the credit losses related to impaired receivables and operating leases as of the date of the financial statements. This allowance is based on factors including historical credit loss trends, the credit quality of our present portfolio, trends in historical and projected used vehicle values and general economic measures. Additions to the allowance for credit losses are made by recording charges to the provision for credit losses on our income statement. Finance receivables and lease investments are charged to the allowance for credit losses at the earlier of when an account is deemed to be uncollectible or when an account is 120 days delinquent, taking into consideration the financial condition of the borrower or lessee, the value of the collateral, recourse to guarantors and other factors. Recoveries on finance receivables and lease investments previously charged off as uncollectible are credited to the allowance for credit losses. 

Changes in the allowance for credit losses for finance receivables, investment in direct financing leases and investment in operating leases were as follows (in millions): 

<img src='content_image/4149.jpg'>

## NOTE 14. LIABILITIES – AUTOMOTIVE SECTOR (IN MILLIONS) 

<img src='content_image/4151.jpg'>

