Allowance for Credit Losses and Credit Quality of Receivables (Tables)

12 Months Ended

Oct. 31, 2012

Allowance for Credit Losses and Credit Quality of Receivables

Aging of Past Due and Non-Performing Receivables

An aging of past due and non-performing Receivables at October 31, 2012 was as follows (in millions of dollars):

	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due *		Total Past Due
Retail notes:
Agriculture and turf equipment	$	52.6	$	21.8	$	14.3	$	88.7
Construction and forestry equipment	38.6		17.0		8.7		64.3
Revolving charge accounts:
Agriculture and turf equipment	12.3		3.6		1.6		17.5
Construction and forestry equipment	2.4		.7		.3		3.4
Wholesale receivables:
Agriculture and turf equipment	2.3		3.8		6.6		12.7
Construction and forestry equipment	1.2				1.5		2.7
Financing leases:
Agriculture and turf equipment	7.0		1.7		.7		9.4
Construction and forestry equipment	.8		.3				1.1
Operating loans:
Agriculture and turf equipment
Total Receivables	$	117.2	$	48.9	$	33.7	$	199.8

	Total Past Due		Total Non- Performing		Current		Total Receivables
Retail notes:
Agriculture and turf equipment	$	88.7	$	37.8	$	14,207.3	$	14,333.8
Construction and forestry equipment	64.3		13.1		1,317.6		1,395.0
Revolving charge accounts:
Agriculture and turf equipment	17.5		.8		2,343.0		2,361.3
Construction and forestry equipment	3.4				63.0		66.4
Wholesale receivables:
Agriculture and turf equipment	12.7		.4		5,394.4		5,407.5
Construction and forestry equipment	2.7				1,072.9		1,075.6
Financing leases:
Agriculture and turf equipment	9.4		9.2		356.5		375.1
Construction and forestry equipment	1.1		1.9		144.3		147.3
Operating loans:
Agriculture and turf equipment					42.3		42.3
Total Receivables	$	199.8	$	63.2	$	24,941.3	$	25,204.3

*Receivables that are 90 days or greater past due and still accruing finance income.

An aging of past due and non-performing Receivables at October 31, 2011 was as follows (in millions of dollars):

	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due *		Total Past Due
Retail notes:
Agriculture and turf equipment	$	76.1	$	25.4	$	20.3	$	121.8
Construction and forestry equipment	43.6		19.0		11.2		73.8
Recreational products
Revolving charge accounts:
Agriculture and turf equipment	15.2		5.7		2.8		23.7
Construction and forestry equipment	2.1		.8		.4		3.3
Wholesale receivables:
Agriculture and turf equipment	1.5		3.0		.6		5.1
Construction and forestry equipment	.4				.2		.6
Financing leases:
Agriculture and turf equipment	4.7		3.4		1.1		9.2
Construction and forestry equipment	.8		1.1		.3		2.2
Operating loans:
Agriculture and turf equipment
Total Receivables	$	144.4	$	58.4	$	36.9	$	239.7

	Total Past Due		Total Non- Performing		Current		Total Receivables
Retail notes:
Agriculture and turf equipment	$	121.8	$	41.1	$	12,549.8	$	12,712.7
Construction and forestry equipment	73.8		16.9		1,064.8		1,155.5
Recreational products			.1		3.4		3.5
Revolving charge accounts:
Agriculture and turf equipment	23.7		1.5		2,364.7		2,389.9
Construction and forestry equipment	3.3				59.3		62.6
Wholesale receivables:
Agriculture and turf equipment	5.1		4.7		4,350.2		4,360.0
Construction and forestry equipment	.6				851.1		851.7
Financing leases:
Agriculture and turf equipment	9.2		10.2		299.3		318.7
Construction and forestry equipment	2.2		3.0		134.8		140.0
Operating loans:
Agriculture and turf equipment			1.5		82.5		84.0
Total Receivables	$	239.7	$	79.0	$	21,759.9	$	22,078.6

*Receivables that are 90 days or greater past due and still accruing finance income.

Analysis of the Allowance for Credit Losses and Investment in Receivables

An analysis of the allowance for credit losses and investment in Receivables during 2012 and 2011 was as follows (in millions of dollars):

	Retail Notes			Revolving Charge Accounts			Wholesale Receivables			Other			Total Receivables
2012
Allowance:
Beginning of year balance	$	67.8		$	39.7		$	6.0		$	12.8		$	126.3
Provision (credit) for credit losses	(10.4		)	7.9			.9			1.4			(.2		)
Write-offs	(7.4		)	(28.8		)	(1.0		)	(3.5		)	(40.7		)
Recoveries	6.8			21.4			.1			.8			29.1
Other changes (primarily translation adjustments)	(.4		)				(.1		)				(.5		)
End of year balance	$	56.4		$	40.2		$	5.9		$	11.5		$	114.0
Balance individually evaluated *				$	.5		$	.1					$	.6
Receivables:
End of year balance	$	15,728.8		$	2,427.7		$	6,483.1		$	564.7		$	25,204.3
Balance individually evaluated *	$	10.6		$	.5		$	.2		$	.3		$	11.6

*Remainder is collectively evaluated.

2011
Allowance:
Beginning of year balance	$	82.1		$	43.3		$	7.4		$	15.8		$	148.6
Provision (credit) for credit losses	(6.9		)	7.3			(1.1		)	2.6			1.9
Write-offs	(14.9		)	(39.1		)	(.6		)	(6.9		)	(61.5		)
Recoveries	7.2			28.2			.1			1.3			36.8
Other changes (primarily translation adjustments)	.3						.2						.5
End of year balance	$	67.8		$	39.7		$	6.0		$	12.8		$	126.3
Balance individually evaluated *	$	.5					$	.2		$	.3		$	1.0
Receivables:
End of year balance	$	13,871.7		$	2,452.5		$	5,211.7		$	542.7		$	22,078.6
Balance individually evaluated *	$	11.0		$	.2		$	4.8		$	2.1		$	18.1

*Remainder is collectively evaluated.

Analysis of the Allowance for Credit Losses

A comparative analysis of the allowance for credit losses on total Receivables follows (in millions of dollars):

	2012			2011			2010
Beginning of year balance	$	126.3		$	148.6		$	158.2
Provision (credit) for credit losses	(.2		)	1.9			79.7
Write-offs	(40.7		)	(61.5		)	(120.2		)
Recoveries	29.1			36.8			30.9
Other changes (primarily translation adjustments)	(.5		)	.5
End of year balance	$	114.0		$	126.3		$	148.6

Analysis of Impaired Receivables

An analysis of impaired Receivables at October 31, 2012 and 2011 was as follows (in millions of dollars):

	Recorded Investment		Unpaid Principal Balance		Specific Allowance		Average Recorded Investment
2012 *
Receivables with specific allowance:
Revolving charge accounts	$	.5	$	.5	$	.5	$	.5
Wholesale receivables	.2		.2		.1		.2
Total	.7		.7		.6		.7
Receivables without specific allowance:
Retail notes	8.5		8.4				8.4
Total	$	9.2	$	9.1	$	.6	$	9.1
Agriculture and turf	$	6.5	$	6.4	$	.6	$	6.1
Construction and forestry	$	2.7	$	2.7			$	3.0

2011 *
Receivables with specific allowance:
Retail notes	$	.8	$	.8	$	.5	$	.8
Wholesale receivables	4.5		4.5		.2		4.5
Financing leases							.2
Operating loans	.5		.5		.3		2.0
Total	5.8		5.8		1.0		7.5
Receivables without specific allowance:
Retail notes	7.8		7.7				9.9
Wholesale receivables	.3		.3				.3
Total	$	13.9	$	13.8	$	1.0	$	17.7
Agriculture and turf	$	11.0	$	10.9	$	1.0	$	13.5
Construction and forestry	$	2.9	$	2.9			$	4.2

*Finance income recognized was not material.

Total Receivable Write-offs and Recoveries, by Product, and as a Percentage of Average Balances Held

	2012					2011					2010
	Dollars			Percent		Dollars			Percent		Dollars			Percent
Write-offs:
Retail notes:
Agriculture and turf equipment	$	(3.4	)	(.03	)%	$	(5.3	)	(.05	)%	$	(6.6	)	(.07	)%
Construction and forestry equipment	(4.0		)	(.32	)	(9.5		)	(.84	)	(23.1		)	(1.89	)
Recreational products						(.1		)	(2.38	)	(.4		)	(7.27	)
Total retail notes	(7.4		)	(.05	)	(14.9		)	(.12	)	(30.1		)	(.27	)
Revolving charge accounts	(28.8		)	(1.29	)	(39.1		)	(1.77	)	(70.9		)	(3.38	)
Wholesale receivables	(1.0		)	(.02	)	(.6		)	(.01	)	.7			.02
Financing leases	(1.6		)	(.34	)	(3.6		)	(.84	)	(2.4		)	(.62	)
Operating loans	(1.9		)	(3.12	)	(3.3		)	(1.91	)	(17.5		)	(7.79	)
Total write-offs	(40.7		)	(.18	)	(61.5		)	(.30	)	(120.2		)	(.65	)
Recoveries:
Retail notes:
Agriculture and turf equipment	3.9			.03		3.6			.03		3.8			.04
Construction and forestry equipment	2.9			.23		3.5			.31		3.2			.26
Recreational products						.1			2.38		.2			3.64
Total retail notes	6.8			.05		7.2			.06		7.2			.06
Revolving charge accounts	21.4			.96		28.2			1.28		22.7			1.08
Wholesale receivables	.1			.00		.1			.00		.4			.01
Financing leases	.3			.06		.1			.02		.4			.10
Operating loans	.5			.82		1.2			.69		.2			.09
Total recoveries	29.1			.13		36.8			.18		30.9			.17
Total net write-offs	$	(11.6	)	(.05	)	$	(24.7	)	(.12	)	$	(89.3	)	(.48	)