eBay 2013 Annual Report Download - page 142
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Loans and interest receivable are reported at their outstanding principal balances, net of participation interest sold and pro-rata allowances,
including unamortized deferred origination costs and 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
consumer receivable owned by Bill Me Later. The weighted average consumer FICO score related to the pool of consumer receivables and
interest receivable balance outstanding as of December 31, 2013 was 688 compared to 689 as of December 31, 2012 . As of December 31, 2013
and 2012 , approximately 54.7% and 55.8% , respectively, of the pool of consumer receivables 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 December 31, 2013
and December 31, 2012, 9.1% and 9.4% , respectively, of the pool of consumer receivables and interest receivable balance was due from
customers with FICO scores below 599 . As of December 31, 2013 and 2012 , approximately 90% , of our consumer receivables and interest
receivable portfolio was current for both periods.
The following table summarizes the activity in the allowance for loans and interest receivable for the years ended December 31, 2013 and
2012 :
Note 18 – Interest and Other, Net
The components of interest and other, net for the years ended December 31, 2013 , 2012 and 2011 are as follows:
In 2012 , we recognized a loss on a divestiture of a business and a gain on the sale of our remaining 30% equity interest in Skype.
For the years ended December 31, 2013 and 2012 , interest expense on borrowings incurred to finance Bill Me Later's portfolio of loan
receivables included in cost of net revenues was $11 million and $9 million , respectively.
F-40
(In millions)
Balance as of January 1, 2012
$
59
Charge-offs
(137
)
Recoveries
9
Provision
170
Balance as of January 1, 2013
101
Charge-offs
(232
)
Recoveries
14
Provision
263
Balance as of December 31, 2013
$
146
Year Ended December 31,
2013
2012
2011
(In millions)
Interest income
$
111
$
134
$
111
Interest expense
(100
)
(63
)
(25
)
Gain on sale of Skype —
—
1,664
Gain (loss) on divestiture of businesses
75
118
(257
)
Other
9
7
44
$
95
$
196
$
1,537