FINANCING RECEIVABLES

9 Months Ended

Jul. 31, 2011

FINANCING RECEIVABLES

FINANCING RECEIVABLES

(10)Past due balances of financing receivables represent the total balance held (principal plus accrued interest) with any payment amounts 30 days or more past the contractual payment due date.  Non-performing financing receivables represent loans for which the Company has ceased accruing finance income.  These receivables are generally 120 days delinquent and the estimated uncollectible amount, after charging the dealer’s withholding account, has been written off to the allowance for credit losses.  Finance income for non-performing receivables is recognized on a cash basis.  Accrual of finance income is resumed when the receivable becomes contractually current and collections are reasonably assured.

An age analysis of past due and non-performing financing receivables in millions of dollars follows:

	July 31, 2011
	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due *		Total Past Due
Retail Notes:
Agriculture and turf	$	94	$	64	$	25	$	183
Construction and forestry	49		25		13		87
Other:
Agriculture and turf	25		11		21		57
Construction and forestry	13		4		6		23
Total	$	181	$	104	$	65	$	350

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

	Total Past Due		Total Non- performing		Current		Total Financing Receivables
Retail Notes:
Agriculture and turf	$	183	$	160	$	13,772	$	14,115
Construction and forestry	87		19		1,222		1,328
Recreational products					4		4
Other:
Agriculture and turf	57		17		5,650		5,724
Construction and forestry	23		8		933		964
Total	$	350	$	204	$	21,581	22,135
Less allowance for doubtful receivables							217
Total financing receivables - net							$	21,918

An analysis of the allowance for doubtful financing receivables and investment in financing receivables in millions of dollars follows:

	Three Months Ended
	July 31, 2011
	Retail Notes		Revolving Charge Accounts		Other		Total
Allowance:
Balance, beginning of period	$	143	$	44	$	34	$	221
Provision (credit)	(3)		3		3		3
Write-offs	(4)		(11)		(2)		(17)
Recoveries	2		6		1		9
Other changes *	1						1
Balance, end of period	$	139	$	42	$	36	$	217
	Nine Months Ended
	July 31, 2011
Allowance:
Balance, beginning of period	$	144	$	44	$	37	$	225
Provision	5		8		2		15
Write-offs	(24)		(31)		(6)		(61)
Recoveries	9		21		1		31
Other changes *	5				2		7
Balance, end of period	$	139	$	42	$	36	$	217
Balance individually evaluated	$	1			$	2	$	3
Balance collectively evaluated	$	138	$	42	$	34	$	214
Financing receivables:
Balance, end of period	$	15,447	$	2,532	$	4,156	$	22,135
Balance individually evaluated	$	17			$	11	$	28
Balance collectively evaluated	$	15,430	$	2,532	$	4,145	$	22,107
*    Primarily translation adjustments.

Financing receivables are considered impaired when it is probable the Company will be unable to collect all amounts due according to the contractual terms.  Receivables reviewed for impairment generally include those that are either past due, or have provided bankruptcy notification, or require significant collection efforts.  Receivables, which are impaired, are classified as non-performing.

An analysis of the impaired financing receivables in millions of dollars follows:

	July 31, 2011
	Recorded Investment		Unpaid Principal Balance		Specific Allowance		Average Recorded Investment
Receivables with specific allowance: *
Retail notes	$	2	$	2	$	1	$	2
Operating loans	2		2		2		4
Wholesale notes							1
Financing leases	1		1				1
Total	5		5		3		8
Receivables without a specific allowance:
Retail notes	12		12				11
Financing leases	1		1				1
Total	$	18	$	18	$	3	$	20
Agriculture and turf	$	10	$	10	$	3	$	12
Construction and forestry	$	8	$	8			$	8

* Finance income recognized was not material.