FINANCING RECEIVABLES (Tables)

9 Months Ended

Aug. 02, 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:

	August 2, 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	$	131	$	63	$	2	$	196
Construction and forestry		65		22		12		99
Other:
Agriculture and turf		37		17		2		56
Construction and forestry		28		19				47
Total	$	261	$	121	$	16	$	398
							Total
	Total		Total				Financing
	Past Due		Non-Performing		Current		Receivables
Retail Notes:
Agriculture and turf	$	196	$	306	$	19,255	$	19,757
Construction and forestry		99		102		3,748		3,949
Other:
Agriculture and turf		56		81		8,161		8,298
Construction and forestry		47		40		1,392		1,479
Total	$	398	$	529	$	32,556		33,483
Less allowance for credit losses								200
Total financing receivables – net							$	33,283

	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

	July 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	$	136	$	63	$	3	$	202
Construction and forestry		87		35		2		124
Other:
Agriculture and turf		38		22				60
Construction and forestry		17		7				24
Total	$	278	$	127	$	5	$	410
							Total
	Total		Total				Financing
	Past Due		Non-Performing		Current		Receivables
Retail Notes:
Agriculture and turf	$	202	$	301	$	18,038	$	18,541
Construction and forestry		124		135		3,249		3,508
Other:
Agriculture and turf		60		37		8,833		8,930
Construction and forestry		24		14		1,417		1,455
Total	$	410	$	487	$	31,537		32,434
Less allowance for credit losses								185
Total financing receivables – net							$	32,249

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 August 2, 2020
Allowance:
Beginning of period balance	$	119	$	43	$	33	$	195
Provision (credit)		5		14		(1)		18
Write-offs		(7)		(22)		(2)		(31)
Recoveries		6		8		1		15
Translation adjustments		2				1		3
End of period balance *	$	125	$	43	$	32	$	200
Nine Months Ended August 2, 2020
Allowance:
Beginning of period balance	$	89	$	40	$	21	$	150
Provision		79		32		13		124
Write-offs		(47)		(51)		(6)		(104)
Recoveries		10		22		2		34
Translation adjustments		(6)				2		(4)
End of period balance *	$	125	$	43	$	32	$	200
Financing receivables:
End of period balance	$	23,706	$	3,997	$	5,780	$	33,483
Balance individually evaluated **	$	160	$	1	$	67	$	228

* 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 $50 million in the first nine months of 2020 reflecting estimated credit losses inherent in the financing receivables.

			Revolving
	Retail		Charge
	Notes		Accounts		Other		Total
Three Months Ended July 28, 2019
Allowance:
Beginning of period balance	$	115	$	43	$	24	$	182
Provision		7		18		1		26
Write-offs		(9)		(26)		(1)		(36)
Recoveries		5		8				13
Translation adjustments		2				(2)
End of period balance *	$	120	$	43	$	22	$	185
Nine Months Ended July 28, 2019
Allowance:
Beginning of period balance	$	113	$	43	$	22	$	178
Provision		21		34		7		62
Write-offs		(29)		(51)		(5)		(85)
Recoveries		15		17		1		33
Translation adjustments						(3)		(3)
End of period balance *	$	120	$	43	$	22	$	185
Financing receivables:
End of period balance	$	22,049	$	3,877	$	6,508	$	32,434
Balance individually evaluated **	$	145			$	10	$	155

* 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
August 2, 2020*
Receivables with specific allowance ***	$	92	$	91	$	23	$	106
Receivables without a specific allowance **		36		33				38
Total	$	128	$	124	$	23	$	144
Agriculture and turf	$	106	$	103	$	17	$	117
Construction and forestry	$	22	$	21	$	6	$	27
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
July 28, 2019*
Receivables with specific allowance **	$	37	$	36	$	13	$	37
Receivables without a specific allowance **		35		33				39
Total	$	72	$	69	$	13	$	76
Agriculture and turf	$	51	$	50	$	9	$	52
Construction and forestry	$	21	$	19	$	4	$	24

*  Finance income recognized was not material.

** Primarily retail notes.

***  Primarily retail notes and wholesale receivables.