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

12 Months Ended

Oct. 31, 2021

Allowance for Credit Losses and Credit Quality of Receivables

Analysis of the Allowance for Credit Losses and Investment in Receivables

An analysis of the allowance for credit losses and investment in Receivables at October 31, 2021, November 1, 2020, and November 3, 2019 was as follows (in millions of dollars):

	Retail Notes		Revolving
	& Financing		Charge		Wholesale		Total
	Leases		Accounts		Receivables		Receivables
2021
Allowance:
Beginning of year balance	$	76.9	$	42.3	$	9.9	$	129.1
ASU No. 2016-13 adoption (see Note 3)		32.5		(12.2)		(.6)		19.7
Provision (credit) for credit losses *		11.8		(17.0)		2.5		(2.7)
Write-offs		(36.7)		(27.8)		(.3)		(64.8)
Recoveries		11.6		35.5				47.1
Translation adjustments		.4				.2		.6
End of year balance	$	96.5	$	20.8	$	11.7	$	129.0
Receivables:
End of year balance	$	26,978.2	$	3,740.1	$	5,951.3	$	36,669.6

2020
Allowance:
Beginning of year balance	$	53.7	$	39.3	$	7.6	$	100.6
Provision (credit) for credit losses		66.2		25.1		(1.9)		89.4
Write-offs		(49.1)		(51.6)		(.9)		(101.6)
Recoveries		6.4		29.5		1.3		37.2
Translation adjustments		(.3)				3.8		3.5
End of year balance	$	76.9	$	42.3	$	9.9	$	129.1
Receivables:
End of year balance	$	22,636.6	$	3,827.4	$	7,093.3	$	33,557.3

2019
Allowance:
Beginning of year balance	$	56.4	$	42.3	$	8.0	$	106.7
Provision (credit) for credit losses		21.0		28.6		(4.2)		45.4
Write-offs		(31.1)		(56.9)		(.3)		(88.3)
Recoveries		7.6		25.3		4.1		37.0
Translation adjustments		(.2)						(.2)
End of year balance	$	53.7	$	39.3	$	7.6	$	100.6
Receivables:
End of year balance	$	20,251.7	$	3,863.0	$	8,706.8	$	32,821.5

*            Excludes provision for credit losses on unfunded commitments of $1.8 million for the year ended October 31, 2021. The estimated credit losses related to unfunded commitments are recorded in accounts payable and accrued expenses on the consolidated balance sheet.

Total Receivables 30 Days or More Past Due, Non-performing Receivables, and the Allowance for Credit Losses

Total Receivables 30 days or more past due, non-performing Receivables, and the allowance for credit losses were as follows (in millions of dollars and as a percentage of the Receivables balance):

	2021				2020
	Dollars		Percent		Dollars		Percent
Receivables 30 days or more past due *	$	340.8	.93	%	$	311.9	.93	%
Non-performing Receivables *		280.1	.76			262.5	.78
Allowance for credit losses		129.0	.35			129.1	.38

*            The delinquency status of Receivables granted payment relief due to COVID is based on the modified payment schedule.

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

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

	2021				2020				2019
	Dollars		Percent		Dollars		Percent		Dollars		Percent
Write-offs:
Retail notes & financing leases:
Agriculture and turf	$	(18.6)	(.09)	%	$	(15.2)	(.09)	%	$	(9.9)	(.06)	%
Construction and forestry		(18.1)	(.42)			(33.9)	(.94)			(21.2)	(.65)
Total retail notes & financing leases		(36.7)	(.15)			(49.1)	(.24)			(31.1)	(.15)
Revolving charge accounts		(27.8)	(.85)			(51.6)	(1.51)			(56.9)	(1.65)
Wholesale receivables		(.3)				(.9)	(.01)			(.3)
Total write-offs		(64.8)	(.19)			(101.6)	(.31)			(88.3)	(.27)
Recoveries:
Retail notes & financing leases:
Agriculture and turf		9.2	.05			4.6	.03			6.1	.04
Construction and forestry		2.4	.06			1.8	.05			1.5	.05
Total retail notes & financing leases		11.6	.05			6.4	.03			7.6	.04
Revolving charge accounts		35.5	1.08			29.5	.86			25.3	.73
Wholesale receivables						1.3	.02			4.1	.04
Total recoveries		47.1	.14			37.2	.11			37.0	.11
Total net write-offs	$	(17.7)	(.05)	%	$	(64.4)	(.20)	%	$	(51.3)	(.16)	%

Customer Receivables

Allowance for Credit Losses and Credit Quality of Receivables

Credit Quality Analysis

The credit quality analysis of retail notes, financing leases, and revolving charge accounts (collectively, Customer Receivables) at October 31, 2021 was as follows (in millions of dollars):

	Year of Origination
	2021		2020		2019		2018		2017		Prior Years		Revolving Charge Accounts		Total
Customer Receivables:
Agriculture and turf
Current	$	11,318.1	$	5,719.1	$	2,842.5	$	1,431.0	$	582.8	$	119.9	$	3,620.9	$	25,634.3
30-59 days past due		34.7		47.5		24.2		13.7		5.9		2.9		13.1		142.0
60-89 days past due		12.8		17.4		8.4		5.1		2.4		.7		3.2		50.0
90+ days past due		.5		.5		.1		.2		.1						1.4
Non-performing		20.1		44.5		26.4		22.3		10.6		12.5		6.4		142.8
Construction and forestry
Current		2,356.4		1,198.5		573.5		215.6		42.5		5.4		92.3		4,484.2
30-59 days past due		36.6		33.0		21.1		5.8		2.0		.1		2.7		101.3
60-89 days past due		12.5		8.4		5.0		2.6		.5		.2		1.0		30.2
90+ days past due		.1		.4		.9				.1						1.5
Non-performing		21.9		50.0		33.9		15.1		6.3		2.9		.5		130.6
Total Customer Receivables	$	13,813.7	$	7,119.3	$	3,536.0	$	1,711.4	$	653.2	$	144.6	$	3,740.1	$	30,718.3

Age Credit Quality Analysis

	Year of Origination
	2021		2020		2019		2018		2017		Prior Years		Revolving Charge Accounts		Total
Customer Receivables:
Agriculture and turf
Current	$	11,318.1	$	5,719.1	$	2,842.5	$	1,431.0	$	582.8	$	119.9	$	3,620.9	$	25,634.3
30-59 days past due		34.7		47.5		24.2		13.7		5.9		2.9		13.1		142.0
60-89 days past due		12.8		17.4		8.4		5.1		2.4		.7		3.2		50.0
90+ days past due		.5		.5		.1		.2		.1						1.4
Non-performing		20.1		44.5		26.4		22.3		10.6		12.5		6.4		142.8
Construction and forestry
Current		2,356.4		1,198.5		573.5		215.6		42.5		5.4		92.3		4,484.2
30-59 days past due		36.6		33.0		21.1		5.8		2.0		.1		2.7		101.3
60-89 days past due		12.5		8.4		5.0		2.6		.5		.2		1.0		30.2
90+ days past due		.1		.4		.9				.1						1.5
Non-performing		21.9		50.0		33.9		15.1		6.3		2.9		.5		130.6
Total Customer Receivables	$	13,813.7	$	7,119.3	$	3,536.0	$	1,711.4	$	653.2	$	144.6	$	3,740.1	$	30,718.3

Wholesale Receivables

Allowance for Credit Losses and Credit Quality of Receivables

Credit Quality Analysis

	November 1, 2020
	Retail Notes & Financing Leases		Revolving Charge Accounts		Total
Customer Receivables:
Agriculture and turf
Current	$	18,341.2	$	3,710.3	$	22,051.5
30-59 days past due		111.4		11.5		122.9
60-89 days past due		47.6		3.5		51.1
90+ days past due		2.0				2.0
Non-performing		172.7		5.4		178.1
Construction and forestry
Current		3,759.5		92.3		3,851.8
30-59 days past due		82.0		2.4		84.4
60-89 days past due		38.8		1.1		39.9
90+ days past due		1.9				1.9
Non-performing		79.5		.9		80.4
Total Customer Receivables	$	22,636.6	$	3,827.4	$	26,464.0

The credit quality analysis of wholesale receivables at October 31, 2021 was as follows (in millions of dollars):

	Year of Origination
	2021		2020		2019		2018		2017		Prior Years		Revolving		Total
Wholesale receivables:
Agriculture and turf
Current	$	339.6	$	77.1	$	21.1	$	9.2	$	2.7	$	.4	$	4,233.4	$	4,683.5
30-59 days past due														6.0		6.0
60-89 days past due														2.2		2.2
90+ days past due														3.8		3.8
Non-performing														6.7		6.7
Construction and forestry
Current		39.4		4.0		3.4		.3						1,199.6		1,246.7
30-59 days past due														1.3		1.3
60-89 days past due														.9		.9
90+ days past due														.2		.2
Non-performing
Total wholesale receivables	$	379.0	$	81.1	$	24.5	$	9.5	$	2.7	$	.4	$	5,454.1	$	5,951.3

Age Credit Quality Analysis

	Year of Origination
	2021		2020		2019		2018		2017		Prior Years		Revolving		Total
Wholesale receivables:
Agriculture and turf
Current	$	339.6	$	77.1	$	21.1	$	9.2	$	2.7	$	.4	$	4,233.4	$	4,683.5
30-59 days past due														6.0		6.0
60-89 days past due														2.2		2.2
90+ days past due														3.8		3.8
Non-performing														6.7		6.7
Construction and forestry
Current		39.4		4.0		3.4		.3						1,199.6		1,246.7
30-59 days past due														1.3		1.3
60-89 days past due														.9		.9
90+ days past due														.2		.2
Non-performing
Total wholesale receivables	$	379.0	$	81.1	$	24.5	$	9.5	$	2.7	$	.4	$	5,454.1	$	5,951.3