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

12 Months Ended

Oct. 29, 2023

Allowance for Credit Losses and Credit Quality of Receivables

Accrued finance income and lease revenue reversed on non-performing Receivables, and finance income and lease revenue recognized from cash payments on non-performing Receivables

Accrued finance income and lease revenue reversed on non-performing Receivables, and finance income and lease revenue recognized from cash payments on non-performing Receivables were as follows:

	2023		2022		2021
Accrued finance income and lease revenue reversed	$	17.1	$	11.3	$	12.4
Finance income and lease revenue recognized on cash payments		18.4		15.4		17.1

Total Receivable balances represent principal plus accrued interest. Receivable balances are written off to the allowance for credit losses when, in the judgment of management, they are considered uncollectible. Write-offs generally occur when Customer Receivables are 120 days delinquent, and on a case-by-case basis when wholesale receivables are 60 days delinquent. In these situations, collateral is repossessed (for collateral-dependent Receivables) or the account is designated for litigation, and the estimated uncollectible amount is written off to the allowance for credit losses.

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 29, 2023, October 30, 2022, and October 31, 2021 was as follows:

	Retail Notes		Revolving
	& Financing		Charge		Wholesale		Total
	Leases		Accounts		Receivables		Receivables
2023
Allowance:
Beginning of year balance	$	95.4	$	21.9	$	11.1	$	128.4
Provision (credit) for credit losses*		67.6		21.2		(.2)		88.6
Write-offs		(60.8)		(44.4)		(.2)		(105.4)
Recoveries		12.9		21.8		.6		35.3
Translation adjustments		(.2)		(.1)		(.2)		(.5)
End of year balance	$	114.9	$	20.4	$	11.1	$	146.4
Receivables:
End of year balance	$	33,419.7	$	4,594.4	$	13,330.1	$	51,344.2

2022
Allowance:
Beginning of year balance	$	96.5	$	20.8	$	11.7	$	129.0
Provision (credit) for credit losses*		26.1		(1.8)		.1		24.4
Write-offs		(40.7)		(26.8)		(.3)		(67.8)
Recoveries		14.4		29.7		.1		44.2
Translation adjustments		(.9)				(.5)		(1.4)
End of year balance	$	95.4	$	21.9	$	11.1	$	128.4
Receivables:
End of year balance	$	29,871.3	$	4,165.8	$	8,404.5	$	42,441.6

2021
Allowance:
Beginning of year balance	$	76.9	$	42.3	$	9.9	$	129.1
ASU No. 2016-13 adoption		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	$	26,933.3	$	3,740.1	$	5,951.3	$	36,624.7

* Excludes provision (credit) for credit losses on unfunded commitments of $(.1), $(.9), and $1.8 for the years ended October 29, 2023, October 30, 2022, and October 31, 2021, respectively. The estimated credit losses related to unfunded commitments are recorded in “Accounts payable and accrued expenses.”

Schedule of Troubled Debt Restructuring Modifications

The following table includes Receivable contracts identified as troubled debt restructurings, which were primarily retail notes:

	2023		2022		2021
Number of receivable contracts		149		199		326
Pre-modification balance	$	7.2	$	7.0	$	12.0
Post-modification balance		6.7		5.8		10.7

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:

	2023				2022				2021
	Dollars		Percent		Dollars		Percent		Dollars		Percent
Write-offs:
Retail notes & financing leases:
Agriculture and turf	$	(31.7)	(.12)	%	$	(21.4)	(.09)	%	$	(18.6)	(.09)	%
Construction and forestry		(29.1)	(.55)			(19.3)	(.39)			(18.1)	(.42)
Total retail notes & financing leases		(60.8)	(.20)			(40.7)	(.15)			(36.7)	(.15)
Revolving charge accounts		(44.4)	(1.17)			(26.8)	(.77)			(27.8)	(.85)
Wholesale receivables		(.2)				(.3)				(.3)
Total write-offs		(105.4)	(.23)			(67.8)	(.18)			(64.8)	(.19)
Recoveries:
Retail notes & financing leases:
Agriculture and turf		8.8	.03			10.2	.05			9.2	.05
Construction and forestry		4.1	.08			4.2	.09			2.4	.06
Total retail notes & financing leases		12.9	.04			14.4	.05			11.6	.05
Revolving charge accounts		21.8	.58			29.7	.86			35.5	1.08
Wholesale receivables		.6	.01			.1
Total recoveries		35.3	.08			44.2	.12			47.1	.14
Total net write-offs	$	(70.1)	(.15)	%	$	(23.6)	(.06)	%	$	(17.7)	(.05)	%

Customer Receivables

Allowance for Credit Losses and Credit Quality of Receivables

Credit Quality Analysis

The credit quality analysis of Customer Receivables by year of origination was as follows:

	October 29, 2023
	2023		2022		2021		2020		2019		Prior Years		Revolving Charge Accounts		Total
Customer Receivables:
Agriculture and turf
Current	$	12,998.3	$	7,208.2	$	4,459.1	$	1,970.4	$	666.3	$	179.3	$	4,424.8	$	31,906.4
30-59 days past due		46.8		66.6		34.6		18.7		8.2		2.9		28.1		205.9
60-89 days past due		15.8		22.0		14.8		7.8		3.3		1.3		8.6		73.6
90+ days past due		1.4		.8		2.7		2.9		.1		.1				8.0
Non-performing		25.9		63.7		44.5		25.0		12.9		12.0		7.2		191.2
Construction and forestry
Current		2,343.4		1,586.2		859.0		279.2		65.3		27.3		118.6		5,279.0
30-59 days past due		44.4		28.1		24.8		8.6		3.4		.4		4.1		113.8
60-89 days past due		17.8		11.4		11.8		4.5		1.0		.2		1.8		48.5
90+ days past due		.1		1.2		.1		.1								1.5
Non-performing		34.1		67.5		51.2		20.7		7.5		4.0		1.2		186.2
Total Customer Receivables	$	15,528.0	$	9,055.7	$	5,502.6	$	2,337.9	$	768.0	$	227.5	$	4,594.4	$	38,014.1

	October 30, 2022
	2022		2021		2020		2019		2018		Prior Years		Revolving Charge Accounts		Total
Customer Receivables:
Agriculture and turf
Current	$	11,736.1	$	6,939.9	$	3,479.6	$	1,515.8	$	581.3	$	152.9	$	4,022.7	$	28,428.3
30-59 days past due		40.1		55.8		31.4		15.0		6.4		2.7		18.4		169.8
60-89 days past due		11.8		19.5		10.8		4.4		2.0		1.1		4.5		54.1
90+ days past due		.4		.2		.2										.8
Non-performing		24.7		38.4		29.2		13.7		11.2		10.2		7.8		135.2
Construction and forestry
Current		2,373.7		1,526.3		658.1		230.7		57.2		10.5		107.7		4,964.2
30-59 days past due		44.5		40.6		20.7		7.6		1.8		.6		3.1		118.9
60-89 days past due		18.1		11.4		6.0		3.0		.7		.1		1.0		40.3
90+ days past due		.3		1.3				1.4								3.0
Non-performing		19.3		51.2		27.6		15.4		5.5		2.9		.6		122.5
Total Customer Receivables	$	14,269.0	$	8,684.6	$	4,263.6	$	1,807.0	$	666.1	$	181.0	$	4,165.8	$	34,037.1

Wholesale Receivables

Allowance for Credit Losses and Credit Quality of Receivables

Credit Quality Analysis

The credit quality analysis of wholesale receivables by year of origination was as follows:

	October 29, 2023
	2023		2022		2021		2020		2019		Prior Years		Revolving		Total
Wholesale receivables:
Agriculture and turf
Current	$	609.5	$	92.6	$	20.0	$	3.9	$	.7	$	159.9	$	9,270.1	$	10,156.7
30+ days past due														45.8		45.8
Non-performing														5.7		5.7
Construction and forestry
Current		19.4		2.5		19.9		.2		.1		75.2		2,987.6		3,104.9
30+ days past due														17.0		17.0
Non-performing
Total wholesale receivables	$	628.9	$	95.1	$	39.9	$	4.1	$	.8	$	235.1	$	12,326.2	$	13,330.1

	October 30, 2022
	2022		2021		2020		2019		2018		Prior Years		Revolving		Total
Wholesale receivables:
Agriculture and turf
Current	$	381.3	$	62.7	$	25.0	$	3.8	$	.3	$	1.1	$	6,238.1	$	6,712.3
30+ days past due				.1										8.3		8.4
Non-performing														5.5		5.5
Construction and forestry
Current		4.8		28.2		1.4		.4		.1				1,633.8		1,668.7
30+ days past due														9.6		9.6
Non-performing
Total wholesale receivables	$	386.1	$	91.0	$	26.4	$	4.2	$	.4	$	1.1	$	7,895.3	$	8,404.5