Auto loans receivable include amounts due from customers related to retail vehicle sales financed through CAF and are presented net of an allowance for estimated loan losses. These auto loans represent a large group of smaller-balance homogeneous loans, which we consider to be part of one class of financing receivable and one portfolio segment for purposes of determining our allowance for loan losses. We generally use warehouse facilities to fund auto loans receivable originated by CAF until we elect to fund them through an asset-backed term funding transaction, such as a term securitization or alternative funding arrangement. We recognize transfers of auto loans receivable into the warehouse facilities and asset-backed term funding transactions (together, “non-recourse funding vehicles”) as secured borrowings, which result in recording the auto loans receivable and the related non-recourse notes payable on our consolidated balance sheets. The majority of the auto loans receivable serve as collateral for the related non-recourse notes payable of $16.87 billion as of February 29, 2024, and $16.36 billion as of February 28, 2023. See Notes 1(F) and 12 for additional information on securitizations and non-recourse notes payable.

Interest income and expenses related to auto loans are included in CAF income. Interest income on auto loans receivable is recognized when earned based on contractual loan terms. All loans continue to accrue interest until repayment or charge-off. When a charge-off occurs, accrued interest is written off by reversing interest income. Direct costs associated with loan originations are not considered material, and thus, are expensed as incurred. See Note 3 for additional information on CAF income.


	As of February 29 or 28
(In millions)	2024		2023
Asset-backed term funding	$	12,638.2	$	12,242.8
Warehouse facilities	3,744.6		3,649.9
Overcollateralization (1)	790.9		739.9
Other managed receivables (2)	218.1		135.3
Total ending managed receivables	17,391.8		16,767.9
Accrued interest and fees	90.9		78.0
Other	11.9		3.1
Less: allowance for loan losses	(482.8)		(507.2)
Auto loans receivable, net	$	17,011.8	$	16,341.8

Credit Quality. When customers apply for financing, CAF’s proprietary scoring models utilize the customers’ credit history and certain application information to evaluate and rank their risk. We obtain credit histories and other credit data that includes information such as number, age, type of and payment history for prior or existing credit accounts. The application information that is used includes income, collateral value and down payment. The scoring models yield credit grades that represent the relative likelihood of repayment. Customers with the highest probability of repayment are A-grade customers. Customers assigned a lower grade are determined to have a lower probability of repayment. For loans that are approved, the credit grade influences the terms of the agreement, such as the required loan-to-value ratio and interest rate. After origination, credit grades are generally not updated.

CAF uses a combination of the initial credit grades and historical performance to monitor the credit quality of the auto loans receivable on an ongoing basis. We validate the accuracy of the scoring models periodically. Loan performance is reviewed on a recurring basis to identify whether the assigned grades adequately reflect the customers’ likelihood of repayment.


	As of February 29, 2024
	Fiscal Year of Origination (1)
(In millions)	2024		2023		2022		2021		2020		Prior to 2020		Total		% (2)
Core managed receivables (3):
A	$	3,922.7	$	2,660.6	$	1,635.1	$	614.0	$	268.7	$	40.0	$	9,141.1	52.6
B	2,370.8		1,738.8		1,225.9		493.3		233.4		61.3		6,123.5		35.2
C and other	344.1		498.6		400.3		192.2		86.6		26.9		1,548.7		8.9
Total core managed receivables	6,637.6		4,898.0		3,261.3		1,299.5		588.7		128.2		16,813.3		96.7
Other managed receivables (4):
C and other	299.0		176.3		72.6		9.3		12.1		9.2		578.5		3.3

Total ending managed receivables	$	6,936.6	$	5,074.3	$	3,333.9	$	1,308.8	$	600.8	$	137.4	$	17,391.8	100.0

Gross charge-offs	$	111.0	$	248.6	$	129.8	$	41.0	$	19.7	$	11.4	$	561.5


	As of February 28, 2023
	Fiscal Year of Origination (1)
(In millions)	2023		2022		2021		2020		2019		Prior to 2019		Total		% (2)
Core managed receivables (3):
A	$	3,890.9	$	2,555.3	$	1,112.0	$	677.1	$	218.3	$	36.3	$	8,489.9	50.6
B	2,497.5		1,839.9		816.2		488.9		215.1		56.0		5,913.6		35.3
C and other	732.7		609.5		314.5		169.3		74.1		25.6		1,925.7		11.5
Total core managed receivables	7,121.1		5,004.7		2,242.7		1,335.3		507.5		117.9		16,329.2		97.4
Other managed receivables (4):
C and other	272.0		112.5		15.0		21.1		13.2		4.9		438.7		2.6

Total ending managed receivables	$	7,393.1	$	5,117.2	$	2,257.7	$	1,356.4	$	520.7	$	122.8	$	16,767.9	100.0

Allowance for Loan Losses. The allowance for loan losses at February 29, 2024 represents the net credit losses expected over the remaining contractual life of our managed receivables. The allowance for loan losses is determined using a net loss timing curve method (“method”), primarily based on the composition of the portfolio of managed receivables and historical gross loss and recovery trends. Due to the fact that losses for receivables with less than 18 months of performance history can be volatile, our net loss estimate weights both historical losses by credit grade at origination and actual loss data on the receivables to-date, along with forward loss curves, in estimating future performance. Once the receivables have 18 months of performance history, the net loss estimate reflects actual loss experience of those receivables to date, along with forward loss curves, to predict future performance. The forward loss curves are constructed using historical performance data and show the average timing of losses over the course of a receivable’s life. The net loss estimate is calculated by applying the loss rates developed using the methods described above to the amortized cost basis of the managed receivables at inception of the loan.

The output of the method is adjusted to take into account reasonable and supportable forecasts about the future. Specifically, the change in U.S. unemployment rates and the National Automobile Dealers Association used vehicle price index are used to predict changes in gross loss and recovery rates, respectively. An economic adjustment factor, based upon a single macroeconomic scenario, is developed to capture the relationship between changes in these forecasts and changes in gross loss and recovery rates. This factor is applied to the output of the method for the reasonable and supportable forecast period of two years. After the end of this two-year period, we revert to historical experience on a straight-line basis over a period of 12 months. We periodically consider whether the use of alternative metrics would result in improved model performance and revise the models when appropriate. We also consider whether qualitative adjustments are necessary for factors that are not reflected in the quantitative methods but impact the measurement of estimated credit losses. Such adjustments include the uncertainty of the impacts of recent economic trends on customer behavior. The change in the allowance for loan losses is recognized through an adjustment to the provision for loan losses.


	As of February 29, 2024
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of year	$	401.5	$	105.7	$	507.2	3.02
Charge-offs	(471.6)		(89.9)		(561.5)
Recoveries (2)	197.3		29.3		226.6
Provision for loan losses	262.5		48.0		310.5
Balance as of end of year	$	389.7	$	93.1	$	482.8	2.78


	As of February 28, 2023
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of year	$	377.5	$	55.5	$	433.0	2.77
Charge-offs	(348.1)		(54.4)		(402.5)
Recoveries (2)	142.5		17.2		159.7
Provision for loan losses	229.6		87.4		317.0
Balance as of end of year	$	401.5	$	105.7	$	507.2	3.02

During fiscal 2024, the allowance for loan losses as a percent of total ending managed receivables decreased by 24 basis points. The decrease was primarily driven by the impact of our tightened underwriting standards in response to the current environment, partially offset by unfavorable loss performance as well as our continued investment in the Tier 2 business. The increase in net charge-offs primarily reflects continued customer hardship in the current economic environment. The allowance for loan losses as of February 29, 2024 reflects our best estimate of expected future losses based on recent trends in delinquencies, loss performance, recovery rates and the economic environment.

Past Due Receivables. An account is considered delinquent when the related customer fails to make a substantial portion of a scheduled payment on or before the due date. In general, accounts are charged-off on the last business day of the month during which the earliest of the following occurs: the receivable is 120 days or more delinquent as of the last business day of the month, the related vehicle is repossessed and liquidated, or the receivable is otherwise deemed uncollectable. For purposes of determining impairment, auto loans are evaluated collectively, as they represent a large group of smaller-balance homogeneous loans, and therefore, are not individually evaluated for impairment.


	As of February 29, 2024
	Core Receivables								Other Receivables		Total
(In millions)	A		B		C & Other		Total		C & Other		$		% (1)
Current	$	9,088.1	$	5,666.3	$	1,243.7	$	15,998.1	$	447.1	$	16,445.2	94.56
Delinquent loans:
31-60 days past due	32.1		271.3		162.9		466.3		68.1		534.4		3.07
61-90 days past due	15.1		149.4		118.5		283.0		53.0		336.0		1.93
Greater than 90 days past due	5.8		36.5		23.6		65.9		10.3		76.2		0.44
Total past due	53.0		457.2		305.0		815.2		131.4		946.6		5.44
Total ending managed receivables	$	9,141.1	$	6,123.5	$	1,548.7	$	16,813.3	$	578.5	$	17,391.8	100.00


	As of February 28, 2023
	Core Receivables								Other Receivables		Total
(In millions)	A		B		C & Other		Total		C & Other		$		% (1)
Current	$	8,450.3	$	5,540.2	$	1,612.3	$	15,602.8	$	327.6	$	15,930.4	95.00
Delinquent loans:
31-60 days past due	25.1		225.7		175.4		426.2		60.6		486.8		2.90
61-90 days past due	10.6		120.0		114.5		245.1		42.1		287.2		1.71
Greater than 90 days past due	3.9		27.7		23.5		55.1		8.4		63.5		0.39
Total past due	39.6		373.4		313.4		726.4		111.1		837.5		5.00
Total ending managed receivables	$	8,489.9	$	5,913.6	$	1,925.7	$	16,329.2	$	438.7	$	16,767.9	100.00