Customer Accounts Receivable

6 Months Ended

Jul. 31, 2020

Customer accounts receivable consisted of the following:


(in thousands)	July 31, 2020		January 31, 2020
Customer accounts receivable ⁽¹⁾	$	1,357,030	$	1,602,037
Deferred fees and origination costs, net	(14,558)		(15,746)
Allowance for no-interest option credit programs	(11,596)		(14,984)
Allowance for uncollectible interest	(19,976)		(23,662)
Carrying value of customer accounts receivable	1,310,900		1,547,645
Allowance for credit losses ⁽²⁾	(316,740)		(210,142)
Carrying value of customer accounts receivable, net of allowance for credit losses	994,160		1,337,503
Short-term portion of customer accounts receivable, net	(514,528)		(673,742)
Long-term customer accounts receivable, net	$	479,632	$	663,761


	Carrying Value
(in thousands)	July 31, 2020		January 31, 2020
Customer accounts receivable 60+ days past due ⁽³⁾	$	131,696	$	193,797
Re-aged customer accounts receivable ⁽⁴⁾	392,610		455,704
Restructured customer accounts receivable ⁽⁵⁾	201,561		211,857

(1)As of July 31, 2020 and January 31, 2020, the customer accounts receivable balance included $35.9 million and $43.7 million, respectively, in interest receivable. Net of the allowance for uncollectible interest, interest receivable outstanding as of July 31, 2020 and January 31, 2020 was $16.0 million and $20.0 million, respectively.

(2)Our current methodology to estimate expected credit losses utilized macroeconomic forecasts as of July 31, 2020, which incorporated the estimated impact of the global COVID-19 outbreak on the U.S. economy. Our forecast utilized economic projections from a major rating service reflecting an increase in unemployment with some offsetting benefits related to government stimulus. The allowance for credit losses as of January 31, 2020 is based on an incurred loss model, which reserves for incurred losses in the portfolio as of January 31, 2020.

(3)As of July 31, 2020 and January 31, 2020, the carrying value of customer accounts receivable past due one day or greater was $366.9 million and $527.0 million, respectively. These amounts include the 60+ days past due balances shown above.

(4)The re-aged carrying value as of July 31, 2020 and January 31, 2020 includes $79.8 million and $131.4 million, respectively, in carrying value that are both 60+ days past due and re-aged.

(5)The restructured carrying value as of July 31, 2020 and January 31, 2020 includes $38.3 million and $64.8 million, respectively, in carrying value that are both 60+ days past due and restructured.

The allowance for credit losses included in the current and long-term portion of customer accounts receivable, net as shown in the Condensed Consolidated Balance Sheet were as follows:


(in thousands)	July 31, 2020
Customer accounts receivable - current	$	699,037
Allowance for credit losses for customer accounts receivable - current	(184,509)
Customer accounts receivable, net of allowances	514,528
Customer accounts receivable - non current	631,839
Allowance for credit losses for customer accounts receivable - non current	(152,207)
Long-term portion of customer accounts receivable, net of allowances	479,632
Total customer accounts receivable, net	$	994,160

The following presents the activity in our allowance for credit losses and uncollectible interest for customer receivables:


	Six Months Ended July 31, 2020										Six Months Ended July 31, 2019
(in thousands)	Customer Accounts Receivable		Restructured Accounts		Total		Customer Accounts Receivable		Restructured Accounts		Total
Allowance at beginning of period, prior to adoption of ASC 326	$	145,680	$	88,123	$	233,803	$	147,123	$	67,756	$	214,879
Impact of adoption ASC 326	95,136		3,526		98,662		—		—		—
Provision for credit loss expense ⁽¹⁾	138,395		42,541		180,936		79,062		37,067		116,129
Principal charge-offs ⁽²⁾	(101,746)		(47,301)		(149,047)		(80,330)		(30,267)		(110,597)
Interest charge-offs	(29,135)		(13,545)		(42,680)		(18,479)		(6,963)		(25,442)
Recoveries ⁽³⁾	10,269		4,773		15,042		9,102		3,430		12,532
Allowance at end of period	$	258,599	$	78,117	$	336,716	$	136,478	$	71,023	$	207,501
Average total customer portfolio balance	$	1,271,225	$	222,025	$	1,493,250	$	1,360,643	$	192,212	$	1,552,855

(1)Includes provision for uncollectible interest, which is included in finance charges and other revenues, and changes in expected future recoveries.

(2)Charge-offs include the principal amount of losses (excluding accrued and unpaid interest). The increase in bad debt charge-offs, net of recoveries, was primarily due to higher risk loans originated during the first half of fiscal year 2020 and an increase in new customer mix.

(3)Recoveries include the principal amount collected during the period for previously charged-off balances.

We manage our Customer Accounts Receivable portfolio using delinquency as a key credit quality indicator. The following table presents the delinquency distribution of the carrying value of customer accounts receivable by year of origination. The information is updated as of July 31, 2020:


(in thousands)
Delinquency Bucket	2020		2019		2018		2017		Prior		Total		% of Total
Current	$	328,980	$	419,220	$	166,168	$	28,066	$	1,600	$	944,034	72.0	%
1-30	31,960		87,577		47,185		13,001		1,197		180,920		13.8	%
31-60	7,513		25,936		15,032		5,078		691		54,250		4.1	%
61-90	4,260		15,848		9,117		3,004		314		32,543		2.5	%
91+	12,889		50,509		24,917		9,412		1,426		99,153		7.6	%
Total	$	385,602	$	599,090	$	262,419	$	58,561	$	5,228	$	1,310,900	100.0	%