FINANCING RECEIVABLES (Tables)

6 Months Ended

May 03, 2020

FINANCING RECEIVABLES

Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables

An age analysis of past due financing receivables that are still accruing interest and non-performing financing receivables in millions of dollars follows:

	May 3, 2020
					90 Days
	30-59 Days		60-89 Days		or Greater		Total
	Past Due		Past Due		Past Due		Past Due
Retail Notes:
Agriculture and turf	$	188	$	94	$	2	$	284
Construction and forestry		116		49		18		183
Other:
Agriculture and turf		59		22		1		82
Construction and forestry		62		11				73
Total	$	425	$	176	$	21	$	622
							Total
	Total		Total				Financing
	Past Due		Non-Performing		Current		Receivables
Retail Notes:
Agriculture and turf	$	284	$	291	$	18,308	$	18,883
Construction and forestry		183		144		3,409		3,736
Other:
Agriculture and turf		82		123		7,856		8,061
Construction and forestry		73		35		1,348		1,456
Total	$	622	$	593	$	30,921		32,136
Less allowance for credit losses								195
Total financing receivables – net							$	31,941

	November 3, 2019
					90 Days
	30-59 Days		60-89 Days		or Greater		Total
	Past Due		Past Due		Past Due		Past Due
Retail Notes:
Agriculture and turf	$	138	$	73	$	1	$	212
Construction and forestry		79		29		4		112
Other:
Agriculture and turf		39		19		1		59
Construction and forestry		26		7				33
Total	$	282	$	128	$	6	$	416
							Total
	Total		Total				Financing
	Past Due		Non-Performing		Current		Receivables
Retail Notes:
Agriculture and turf	$	212	$	268	$	18,931	$	19,411
Construction and forestry		112		127		3,450		3,689
Other:
Agriculture and turf		59		28		8,986		9,073
Construction and forestry		33		26		1,496		1,555
Total	$	416	$	449	$	32,863		33,728
Less allowance for credit losses								150
Total financing receivables – net							$	33,578

	April 28, 2019
					90 Days
	30-59 Days		60-89 Days		or Greater		Total
	Past Due		Past Due		Past Due		Past Due
Retail Notes:
Agriculture and turf	$	139	$	73	$	1	$	213
Construction and forestry		90		40		1		131
Other:
Agriculture and turf		33		16				49
Construction and forestry		19		4				23
Total	$	281	$	133	$	2	$	416
							Total
	Total		Total				Financing
	Past Due		Non-Performing		Current		Receivables
Retail Notes:
Agriculture and turf	$	213	$	293	$	17,644	$	18,150
Construction and forestry		131		124		3,120		3,375
Other:
Agriculture and turf		49		67		7,861		7,977
Construction and forestry		23		10		1,331		1,364
Total	$	416	$	494	$	29,956		30,866
Less allowance for credit losses								182
Total financing receivables – net							$	30,684

Analysis of the Allowance for Credit Losses and Investment in Financing Receivables

An analysis of the allowance for credit losses and investment in financing receivables in millions of dollars during the periods follows:

			Revolving
	Retail		Charge
	Notes		Accounts		Other		Total
Three Months Ended May 3, 2020
Allowance:
Beginning of period balance	$	88	$	40	$	29	$	157
Provision		58		20		7		85
Write-offs		(24)		(23)		(2)		(49)
Recoveries		3		6				9
Translation adjustments		(6)				(1)		(7)
End of period balance *	$	119	$	43	$	33	$	195
Six Months Ended May 3, 2020
Allowance:
Beginning of period balance	$	89	$	40	$	21	$	150
Provision		74		18		14		106
Write-offs		(41)		(29)		(4)		(74)
Recoveries		5		14		1		20
Translation adjustments		(8)				1		(7)
End of period balance *	$	119	$	43	$	33	$	195
Financing receivables:
End of period balance	$	22,619	$	3,454	$	6,063	$	32,136
Balance individually evaluated **	$	157			$	83	$	240

* Individual allowances were not significant.

** Remainder is collectively evaluated.

The negative economic effects related to COVID and other macroeconomic issues have significantly affected certain retail borrowers, particularly of construction equipment. As a result, the allowance for credit losses increased $38 million in the second quarter of 2020 reflecting estimated credit losses inherent in the financing receivables.

			Revolving
	Retail		Charge
	Notes		Accounts		Other		Total
Three Months Ended April 28, 2019
Allowance:
Beginning of period balance	$	111	$	43	$	23	$	177
Provision		9		17		3		29
Write-offs		(9)		(22)		(2)		(33)
Recoveries		6		5				11
Translation adjustments		(2)						(2)
End of period balance *	$	115	$	43	$	24	$	182
Six Months Ended April 28, 2019
Allowance:
Beginning of period balance	$	113	$	43	$	22	$	178
Provision		15		16		5		36
Write-offs		(20)		(26)		(3)		(49)
Recoveries		10		10				20
Translation adjustments		(3)						(3)
End of period balance *	$	115	$	43	$	24	$	182
Financing receivables:
End of period balance	$	21,525	$	3,299	$	6,042	$	30,866
Balance individually evaluated **	$	151	$	2	$	15	$	168

* Individual allowances were not significant.

** Remainder is collectively evaluated.

Analysis of the Impaired Financing Receivables

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

			Unpaid				Average
	Recorded		Principal		Specific		Recorded
	Investment		Balance		Allowance		Investment
May 3, 2020*
Receivables with specific allowance ***	$	106	$	104	$	23	$	113
Receivables without a specific allowance **		35		34				38
Total	$	141	$	138	$	23	$	151
Agriculture and turf	$	113	$	111	$	18	$	121
Construction and forestry	$	28	$	27	$	5	$	30
November 3, 2019*
Receivables with specific allowance **	$	40	$	39	$	13	$	40
Receivables without a specific allowance **		32		31				37
Total	$	72	$	70	$	13	$	77
Agriculture and turf	$	49	$	48	$	8	$	52
Construction and forestry	$	23	$	22	$	5	$	25
April 28, 2019*
Receivables with specific allowance **	$	35	$	34	$	14	$	36
Receivables without a specific allowance **		37		35				39
Total	$	72	$	69	$	14	$	75
Agriculture and turf	$	54	$	53	$	11	$	57
Construction and forestry	$	18	$	16	$	3	$	18

*  Finance income recognized was not material.

** Primarily retail notes.

***  Primarily retail notes and wholesale receivables.