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Finance and Other Receivables (Tables)
 6 Months Ended
Jun. 30, 2014
Finance and Other Receivables

Finance and other receivables include the following:

 

                           
     June 30
2014		     December 31
2013		  

Loans

    $ 4,031.2      $ 3,977.4   

Direct financing leases

      2,798.3        2,680.8   

Sales-type finance leases

      896.1        921.1   

Dealer wholesale financing

      1,548.6        1,616.5   

Operating lease and other trade receivables

      118.5        121.3   

Unearned interest: Finance leases

      (382.0 )      (375.7 ) 
  

 

 

    

 

 

  
   $ 9,010.7      $ 8,941.4   

Less allowance for losses:

     

Loans and leases

      (113.2 )      (110.9 ) 

Dealer wholesale financing

      (10.2 )      (10.4 ) 

Operating lease and other trade receivables

      (7.7 )      (8.0 ) 
  

 

 

    

 

 

  
   $ 8,879.6      $ 8,812.1   
  

 

 

    

 

 

  
Allowance for Credit Losses

The allowance for credit losses is summarized as follows:

 

     2014  
     Dealer     Customer              
     Wholesale     Retail     Retail     Other*     Total  

Balance at January 1

    $ 10.4      $ 13.4      $ 97.5      $ 8.0      $ 129.3   

Provision for losses

      (.2 )      (.5 )      7.3        1.1        7.7   

Charge-offs

          (7.6 )      (1.7 )      (9.3 ) 

Recoveries

          2.6        .3        2.9   

Currency translation and other

          .5          .5   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Balance at June 30

    $ 10.2      $ 12.9      $ 100.3      $ 7.7      $ 131.1   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
     2013  
     Dealer     Customer              
     Wholesale     Retail     Retail     Other*     Total  

Balance at January 1

    $ 11.8      $ 13.4      $ 99.2      $ 5.6      $ 130.0   

Provision for losses

      (.4 )      (1.0 )      12.7        .5        11.8   

Charge-offs

      (.1 )        (13.4 )      (.8 )      (14.3 ) 

Recoveries

          3.0        .5        3.5   

Currency translation and other

      (.3 )      (.1 )      (1.5 )      (.1 )      (2.0 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Balance at June 30

    $ 11.0      $ 12.3      $ 100.0      $ 5.7      $ 129.0   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

* Operating lease and other trade receivables.
Finance Receivables Summary by those Evaluated Collectively and Individually

Information regarding finance receivables evaluated and determined individually and collectively is as follows:

 

                                                       
     Dealer      Customer         

At June 30, 2014

    Wholesale      Retail      Retail      Total  

Recorded investment for impaired finance
receivables evaluated individually

    $ 8.0          $ 38.4       $ 46.4   

Allowance for impaired finance receivables
determined individually

      1.3            5.3         6.6   

Recorded investment for finance receivables
evaluated collectively

      1,540.6       $   1,503.0         5,802.2         8,845.8   

Allowance for finance receivables determined
collectively

      8.9         12.9         95.0         116.8   
     Dealer      Customer         

At December 31, 2013

    Wholesale      Retail      Retail      Total  

Recorded investment for impaired finance
receivables evaluated individually

    $ 8.5          $ 42.1       $ 50.6   

Allowance for impaired finance receivables
determined individually

      1.4            5.9         7.3   

Recorded investment for finance receivables
evaluated collectively

      1,608.0       $   1,525.6         5,635.9         8,769.5   

Allowance for finance receivables determined
collectively

      9.0         13.4         91.6         114.0   
Recorded Investment for Finance Receivables that are on Non-Accrual Status

The recorded investment for finance receivables that are on non-accrual status is as follows:

 

                           
     June 30
2014		      December 31
2013		  

Dealer:

      

Wholesale

    $ 8.0       $ 8.0   

Customer retail:

      

Fleet

      27.2         30.5   

Owner/operator

      6.9         8.6   
  

 

 

     

 

 

  
   $ 42.1       $ 47.1   
  

 

 

     

 

 

  
Impaired Loans and Specific Reserve

The recorded investment of impaired loans as of June 30, 2014 and December 31, 2013 was not significantly different than the unpaid principal balance.

 

                                                                     
     Dealer    Customer Retail        

At June 30, 2014

    Wholesale     Retail    Fleet     Owner/
Operator		     Total  

Impaired loans with a specific reserve

    $ 8.0         $ 10.9      $ 2.6      $ 21.5   

Associated allowance

      (1.3 )         (1.8 )      (.6 )      (3.7 ) 
  

 

 

    

 

   

 

 

    

 

 

    

 

 

  

Net carrying amount of impaired loans

    $ 6.7         $ 9.1      $ 2.0      $ 17.8   
  

 

 

    

 

   

 

 

    

 

 

    

 

 

  

Average recorded investment*

    $ 7.1         $ 24.3      $ 3.6      $ 35.0   
  

 

 

    

 

   

 

 

    

 

 

    

 

 

  
*  Represents the average during the 12 months ended June 30, 2014.             
     Dealer    Customer Retail        

At December 31, 2013

    Wholesale     Retail    Fleet     Owner/
Operator		     Total  

Impaired loans with a specific reserve

    $ 8.5         $ 10.8      $ 3.1      $ 22.4   

Associated allowance

      (1.4 )         (2.1 )      (.6 )      (4.1 ) 
  

 

 

    

 

   

 

 

    

 

 

    

 

 

  

Net carrying amount of impaired loans

    $ 7.1         $ 8.7      $ 2.5      $ 18.3   
  

 

 

    

 

   

 

 

    

 

 

    

 

 

  

Average recorded investment*

    $ 3.6         $ 37.1      $ 6.9      $ 47.6   
  

 

 

    

 

   

 

 

    

 

 

    

 

 

  

 

* Represents the average during the 12 months ended June 30, 2013.
Interest Income Recognized on Cash Basis

During the period the loans above were considered impaired, interest income recognized on a cash basis is as follows:

 

                                                       
     Three Months Ended      Six Months Ended  
     June 30      June 30  
     2014      2013      2014      2013  

Interest income recognized:

            

Dealer wholesale

       $ .1       $ .1       $ .1   

Customer retail - fleet

    $ .3         .9         .6         1.3   

Customer retail - owner/operator

      .1         .2         .2         .4   
  

 

 

     

 

 

     

 

 

     

 

 

  
   $ .4       $ 1.2       $ .9       $ 1.8   
  

 

 

     

 

 

     

 

 

     

 

 

  
Finance Receivables by Credit Quality Indicator and Portfolio Class

The tables below summarize the Company’s finance receivables by credit quality indicator and portfolio class.

 

     Dealer      Customer Retail         

At June 30, 2014

    Wholesale      Retail      Fleet      Owner/
Operator		      Total  

Performing

    $ 1,504.4       $ 1,501.6       $ 4,601.0       $ 1,174.9       $ 8,781.9   

Watch

      36.2         1.4         15.3         11.0         63.9   

At-risk

      8.0            30.5         7.9         46.4   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
   $ 1,548.6       $ 1,503.0       $ 4,646.8       $ 1,193.8       $ 8,892.2   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
     Dealer      Customer Retail         

At December 31, 2013

    Wholesale      Retail      Fleet      Owner/
Operator		      Total  

Performing

    $ 1,576.9       $ 1,520.1       $ 4,396.5       $ 1,219.5       $ 8,713.0   

Watch

      31.1         5.5         12.7         7.2         56.5   

At-risk

      8.5            33.3         8.8         50.6   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
   $ 1,616.5       $ 1,525.6       $ 4,442.5       $ 1,235.5       $ 8,820.1   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
Financing Receivables by Aging Category

The tables below summarize the Company’s finance receivables by aging category. In determining past due status, the Company considers the entire contractual account balance past due when any installment is over 30 days past due. Substantially all customer accounts that were greater than 30 days past due prior to credit modification became current upon modification for aging purposes.

 

     Dealer      Customer Retail  

At June 30, 2014

    Wholesale      Retail      Fleet      Owner/
Operator		      Total  

Current and up to 30 days past due

    $ 1,544.7       $ 1,503.0       $ 4,619.5       $ 1,177.2       $ 8,844.4   

31 – 60 days past due

      1.0            12.0         8.3         21.3   

Greater than 60 days past due

      2.9            15.3         8.3         26.5   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
   $ 1,548.6       $ 1,503.0       $ 4,646.8       $ 1,193.8       $ 8,892.2   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
     Dealer      Customer Retail  

At December 31, 2013

    Wholesale      Retail      Fleet      Owner/
Operator		      Total  

Current and up to 30 days past due

    $ 1,611.7       $ 1,525.6       $ 4,417.5       $ 1,221.4       $ 8,776.2   

31 – 60 days past due

      1.7            9.2         6.3         17.2   

Greater than 60 days past due

      3.1            15.8         7.8         26.7   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
   $ 1,616.5       $ 1,525.6       $ 4,442.5       $ 1,235.5       $ 8,820.1   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
Pre- and Post-Modification Recorded Investment Balances by Portfolio Class

At modification date, the pre-modification and post-modification recorded investment balances for finance receivables modified during the period by portfolio class are as follows:

 

     Three Months Ended
June 30, 2014		      Six Months Ended
June 30, 2014		  
     Recorded Investment      Recorded Investment  
     Pre-Modification      Post-Modification      Pre-Modification      Post-Modification  

Fleet

    $ .5       $ .5       $ 5.4       $ 5.4   

Owner/operator

      .3         .3         1.3         1.3   
  

 

 

     

 

 

     

 

 

     

 

 

  
   $ .8       $ .8       $ 6.7       $ 6.7   
  

 

 

     

 

 

     

 

 

     

 

 

  
     Three Months Ended      Six Months Ended  
     June 30, 2013      June 30, 2013  
     Recorded Investment      Recorded Investment  
     Pre-Modification      Post-Modification      Pre-Modification      Post-Modification  

Fleet

    $ 3.5       $ 3.5       $ 7.7       $ 7.6   

Owner/operator

      .2         .2         .7         .7   
  

 

 

     

 

 

     

 

 

     

 

 

  
   $ 3.7       $ 3.7       $ 8.4       $ 8.3   
  

 

 

     

 

 

     

 

 

     

 

 

  
TDRs Modified that Subsequently Defaulted (i.e., Became More than 30 Days Past-Due) by Portfolio Class

TDRs modified during the previous twelve months that subsequently defaulted (i.e., became more than 30 days past due) during the period by portfolio class are as follows:

 

Six Months Ended June 30,

    2014           2013  

Fleet

    $             .3          $             1.4   

Owner/operator

      .6            .2   
  

 

 

        

 

 

  
   $ .9          $ 1.6