Honda 2011 Annual Report Download - page 54

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Additional Narrative of the Change in Credit Loss
The following tables summarize our allowance for credit losses on finance receivables:
Yen (billions)
For the year ended March 31, 2009 Retail Direct financing lease Wholesale Total
Provisions for credit losses
Balance at beginning of year ¥ 31.4 ¥ 2.5 ¥ 0.7 ¥ 34.8
Provision 49.1 3.2 1.9 54.4
Charge-offs (57.3) (6.0) (0.5) (63.9)
Recoveries 14.7 2.1 0.0 16.9
Change due to securitization activity (1.4) — — (1.4)
Adjustments from foreign currency translation (2.2) (0.1) (0.2) (2.7)
Balance at end of year ¥ 34.3 ¥ 1.8 ¥ 1.8 ¥ 38.0
Ending receivable balance ¥3,138.8 ¥699.3 ¥377.6 ¥4,215.7
Average receivable balance, net ¥3,431.6 ¥878.3 ¥383.4 ¥4,693.4
Net charge-offs as a % of average receivable balance 1.24% 0.44% 0.15% 1.00%
Allowance as a % of ending receivable balance 1.09% 0.27% 0.50% 0.90%
Yen (billions)
For the year ended March 31, 2010 Retail Direct financing lease Wholesale Total
Provisions for credit losses
Balance at beginning of year ¥ 34.3 ¥ 1.8 ¥ 1.8 ¥ 38.0
Provision 30.0 1.9 0.3 32.3
Charge-offs (43.7) (3.2) (0.6) (47.6)
Recoveries 13.9 1.1 0.0 15.1
Change due to securitization activity — — — —
Adjustments from foreign currency translation (0.6) 0.1 (0.0) (0.5)
Balance at end of year ¥ 33.9 ¥ 1.7 ¥ 1.6 ¥ 37.3
Ending receivable balance ¥3,246.4 ¥449.4 ¥331.7 ¥4,027.6
Average receivable balance, net ¥3,180.0 ¥497.8 ¥325.5 ¥4,004.5
Net charge-offs as a % of average receivable balance 0.94% 0.42% 0.18% 0.81%
Allowance as a % of ending receivable balance 1.05% 0.40% 0.49% 0.93%
Yen (billions)
For the year ended March 31, 2011 Retail Direct financing lease Wholesale Total
Provisions for credit losses
Balance at beginning of year ¥ 33.9 ¥ 1.7 ¥ 1.6 ¥ 37.3
Adjustment resulting from the adoption of new accounting standards
or variable interest entities 0.8 — — 0.8
Adjusted balance at beginning of year 34.8 1.7 1.6 38.2
Provision 10.3 0.7 0.3 11.3
Charge-offs (27.6) (1.5) (0.5) (29.7)
Recoveries 11.1 0.5 0.0 11.7
Change due to securitization activity — — — —
Adjustments from foreign currency translation (3.0) (0.0) (0.0) (3.2)
Balance at end of year ¥ 25.5 ¥ 1.4 ¥ 1.4 ¥ 28.4
Ending receivable balance ¥3,368.0 ¥362.1 ¥301.6 ¥4,031.7
Average receivable balance, net ¥3,346.5 ¥374.9 ¥309.5 ¥4,031.0
Net charge-offs as a % of average receivable balance 0.49% 0.26% 0.15% 0.45%
Allowance as a % of ending receivable balance 0.76% 0.40% 0.47% 0.71%
The following table provides information related to losses on operating leases due to customer defaults:
Yen (billions)
2009 2010 2011
Provision for credit losses on past due rental payments ¥2.0 ¥1.9 ¥1.6
Impairment losses on operating leases due to early termination ¥8.7 ¥3.3 ¥0.8
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