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

12 Months Ended

Nov. 03, 2019

Allowance for Credit Losses and Credit Quality of Receivables

Age Analysis of past due Receivables that are still accruing interest and non-performing Receivables

An age analysis of past due Receivables that are still accruing interest and non-performing Receivables at November 3, 2019 was as follows (in millions of dollars):

					90 Days or
	30-59 Days		60-89 Days		Greater		Total
	Past Due		Past Due		Past Due		Past Due
Retail notes:
Agriculture and turf	$	120.0	$	64.2	$	1.5	$	185.7
Construction and forestry		73.9		26.6				100.5
Revolving charge accounts:
Agriculture and turf		19.1		9.2				28.3
Construction and forestry		3.2		1.2				4.4
Wholesale receivables:
Agriculture and turf		4.1		1.9		.8		6.8
Construction and forestry		.1		.3		.3		.7
Financing leases:
Agriculture and turf		14.6		7.8		.5		22.9
Construction and forestry		2.8		.7				3.5
Total Receivables	$	237.8	$	111.9	$	3.1	$	352.8

	Total		Total Non-				Total
	Past Due		Performing		Current		Receivables
Retail notes:
Agriculture and turf	$	185.7	$	168.7	$	15,831.5	$	16,185.9
Construction and forestry		100.5		112.9		3,100.8		3,314.2
Revolving charge accounts:
Agriculture and turf		28.3		6.1		3,727.9		3,762.3
Construction and forestry		4.4		.9		95.4		100.7
Wholesale receivables:
Agriculture and turf		6.8		6.3		6,544.6		6,557.7
Construction and forestry		.7		2.9		2,145.5		2,149.1
Financing leases:
Agriculture and turf		22.9		11.6		569.8		604.3
Construction and forestry		3.5		2.5		141.3		147.3
Total Receivables	$	352.8	$	311.9	$	32,156.8	$	32,821.5

An age analysis of past due Receivables that are still accruing interest and non-performing Receivables at October 28, 2018 was as follows (in millions of dollars):

					90 Days or
	30-59 Days		60-89 Days		Greater		Total
	Past Due		Past Due		Past Due		Past Due
Retail notes:
Agriculture and turf	$	119.7	$	67.5	$	57.5	$	244.7
Construction and forestry		75.9		44.8		49.7		170.4
Revolving charge accounts:
Agriculture and turf		22.8		8.3		4.6		35.7
Construction and forestry		4.0		1.2		.8		6.0
Wholesale receivables:
Agriculture and turf		1.7		.4		1.1		3.2
Construction and forestry		1.2						1.2
Financing leases:
Agriculture and turf		9.9		6.1		2.3		18.3
Construction and forestry		1.7		1.1		.9		3.7
Total Receivables	$	236.9	$	129.4	$	116.9	$	483.2

	Total		Total Non-				Total
	Past Due		Performing		Current		Receivables
Retail notes:
Agriculture and turf	$	244.7	$	95.9	$	14,838.6	$	15,179.2
Construction and forestry		170.4		28.5		2,732.8		2,931.7
Revolving charge accounts:
Agriculture and turf		35.7		1.3		3,659.2		3,696.2
Construction and forestry		6.0				95.4		101.4
Wholesale receivables:
Agriculture and turf		3.2		7.3		6,135.5		6,146.0
Construction and forestry		1.2				1,820.4		1,821.6
Financing leases:
Agriculture and turf		18.3		8.4		597.5		624.2
Construction and forestry		3.7		.6		142.1		146.4
Total Receivables	$	483.2	$	142.0	$	30,021.5	$	30,646.7

Analysis of the Allowance for Credit Losses and Investment in Receivables

An analysis of the allowance for credit losses and investment in Receivables at November 3, 2019, October 28, 2018, and October 29, 2017 was as follows (in millions of dollars):

			Revolving
	Retail		Charge		Wholesale		Financing		Total
	Notes		Accounts		Receivables		Leases		Receivables
2019
Allowance:
Beginning of year balance	$	51.6	$	42.3	$	8.0	$	4.8	$	106.7
Provision (credit) for credit losses		18.3		28.6		(4.2)		2.7		45.4
Write-offs		(28.7)		(56.9)		(.3)		(2.4)		(88.3)
Recoveries		7.3		25.3		4.1		.3		37.0
Translation adjustments		(.2)								(.2)
End of year balance	$	48.3	$	39.3	$	7.6	$	5.4	$	100.6
Balance individually evaluated *	$	1.9			$	2.9			$	4.8
Receivables:
End of year balance	$	19,500.1	$	3,863.0	$	8,706.8	$	751.6	$	32,821.5
Balance individually evaluated *	$	65.9	$	.1	$	9.6	$	1.9	$	77.5

2018
Allowance:
Beginning of year balance	$	55.7	$	39.7	$	9.9	$	8.5	$	113.8
Provision (credit) for credit losses		11.9		36.7		(.8)		(.6)		47.2
Write-offs		(22.1)		(54.1)		(1.1)		(3.9)		(81.2)
Recoveries		6.4		20.0		.2		.8		27.4
Translation adjustments		(.3)				(.2)				(.5)
End of year balance	$	51.6	$	42.3	$	8.0	$	4.8	$	106.7
Balance individually evaluated *	$	.1			$	2.8			$	2.9
Receivables:
End of year balance	$	18,110.9	$	3,797.6	$	7,967.6	$	770.6	$	30,646.7
Balance individually evaluated *	$	59.2	$	2.3	$	8.8			$	70.3

2017
Allowance:
Beginning of year balance	$	56.3	$	39.7	$	7.2	$	8.5	$	111.7
Provision for credit losses		29.7		32.3		3.0		5.3		70.3
Write-offs		(38.2)		(52.2)		(.2)		(5.7)		(96.3)
Recoveries		7.8		19.9				.3		28.0
Translation adjustments		.1				(.1)		.1		.1
End of year balance	$	55.7	$	39.7	$	9.9	$	8.5	$	113.8
Balance individually evaluated *	$	.6			$	2.6			$	3.2
Receivables:
End of year balance	$	17,214.6	$	3,572.6	$	6,894.3	$	714.2	$	28,395.7
Balance individually evaluated *	$	41.0	$	3.1	$	24.0	$	4.0	$	72.1

*  Remainder is collectively evaluated.

Analysis of Impaired Receivables

An analysis of impaired Receivables at November 3, 2019 and October 28, 2018 was as follows (in millions of dollars):

			Unpaid				Average
	Recorded		Principal		Specific		Recorded
	Investment		Balance		Allowance		Investment
2019 *
Receivables with specific allowance:
Retail notes	$	4.9	$	4.6	$	1.9	$	5.0
Wholesale receivables		5.3		5.3		2.9		5.7
Total with specific allowance		10.2		9.9		4.8		10.7
Receivables without specific allowance:
Retail notes		22.9		22.4				25.0
Wholesale receivables		3.9		3.9				4.1
Total without specific allowance		26.8		26.3				29.1
Total	$	37.0	$	36.2	$	4.8	$	39.8
Agriculture and turf	$	30.3	$	29.7	$	4.6	$	32.0
Construction and forestry		6.7		6.5		.2		7.8
Total	$	37.0	$	36.2	$	4.8	$	39.8
2018 *
Receivables with specific allowance:
Retail notes	$	.8	$	.6	$	.1	$	.9
Wholesale receivables		5.8		5.8		2.8		6.7
Total with specific allowance		6.6		6.4		2.9		7.6
Receivables without specific allowance:
Retail notes		23.9		23.6				26.1
Wholesale receivables		2.4		2.4				2.6
Total without specific allowance		26.3		26.0				28.7
Total	$	32.9	$	32.4	$	2.9	$	36.3
Agriculture and turf	$	28.8	$	28.4	$	2.9	$	31.7
Construction and forestry		4.1		4.0				4.6
Total	$	32.9	$	32.4	$	2.9	$	36.3

*  Finance income recognized was not material.

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

Total Receivable write-offs and recoveries, by product, and as a percentage of average balances held during the year, were as follows (in millions of dollars):

	2019				2018				2017
	Dollars		Percent		Dollars		Percent		Dollars		Percent
Write-offs:
Retail notes:
Agriculture and turf	$	(8.0)	(.05)	%	$	(6.4)	(.04)	%	$	(17.0)	(.12)	%
Construction and forestry		(20.7)	(.67)			(15.7)	(.57)			(21.2)	(.85)
Total retail notes		(28.7)	(.15)			(22.1)	(.13)			(38.2)	(.23)
Revolving charge accounts		(56.9)	(1.65)			(54.1)	(1.67)			(52.2)	(1.76)
Wholesale receivables		(.3)				(1.1)	(.01)			(.2)
Financing leases		(2.4)	(.34)			(3.9)	(.55)			(5.7)	(.92)
Total write-offs		(88.3)	(.27)			(81.2)	(.27)			(96.3)	(.35)
Recoveries:
Retail notes:
Agriculture and turf		6.0	.04			4.7	.03			5.8	.04
Construction and forestry		1.3	.04			1.7	.06			2.0	.08
Total retail notes		7.3	.04			6.4	.04			7.8	.05
Revolving charge accounts		25.3	.73			20.0	.62			19.9	.68
Wholesale receivables		4.1	.04			.2
Financing leases		.3	.04			.8	.11			.3	.05
Total recoveries		37.0	.11			27.4	.09			28.0	.10
Total net write-offs	$	(51.3)	(.16)	%	$	(53.8)	(.18)	%	$	(68.3)	(.25)	%