Customer Accounts Receivable

9 Months Ended

Oct. 31, 2020

Customer accounts receivable consisted of the following:


(in thousands)	October 31, 2020		January 31, 2020
Customer accounts receivable (1)	$	1,276,100	$	1,602,037
Deferred fees and origination costs, net	(14,093)		(15,746)
Allowance for no-interest option credit programs	(10,391)		(14,984)
Allowance for uncollectible interest	(20,894)		(23,662)
Carrying value of customer accounts receivable	1,230,722		1,547,645
Allowance for credit losses (2)	(296,529)		(210,142)
Carrying value of customer accounts receivable, net of allowance for credit losses	934,193		1,337,503
Short-term portion of customer accounts receivable, net	(489,841)		(673,742)
Long-term customer accounts receivable, net	$	444,352	$	663,761


	Carrying Value
(in thousands)	October 31, 2020		January 31, 2020
Customer accounts receivable 60+ days past due (3)	$	141,441	$	193,797
Re-aged customer accounts receivable (4)	347,113		455,704
Restructured customer accounts receivable (5)	190,819		211,857

(1)As of October 31, 2020 and January 31, 2020, the customer accounts receivable balance included $32.6 million and $43.7 million, respectively, in interest receivable. Net of the allowance for uncollectible interest, interest receivable outstanding as of October 31, 2020 and January 31, 2020 was $11.7 million and $20.0 million, respectively.

(2)Our current methodology to estimate expected credit losses utilized macroeconomic forecasts as of October 31, 2020, which incorporated the continued 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. 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 October 31, 2020 and January 31, 2020, the carrying value of customer accounts receivable past due one day or greater was $367.3 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 October 31, 2020 and January 31, 2020 includes $91.3 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 October 31, 2020 and January 31, 2020 includes $52.4 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)	October 31, 2020
Customer accounts receivable - current	$	666,294
Allowance for credit losses for customer accounts receivable - current	(176,453)
Customer accounts receivable, net of allowances	489,841
Customer accounts receivable - non current	585,322
Allowance for credit losses for customer accounts receivable - non current	(140,970)
Long-term portion of customer accounts receivable, net of allowances	444,352
Total customer accounts receivable, net	$	934,193

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


	Nine Months Ended October 31, 2020						Nine Months Ended October 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)	164,697		60,595		225,292		119,846		58,818		178,664
Principal charge-offs (2)	(144,048)		(62,678)		(206,726)		(116,698)		(44,686)		(161,384)
Interest charge-offs	(40,340)		(17,553)		(57,893)		(27,076)		(10,368)		(37,444)
Recoveries (3)	16,922		7,363		24,285		13,571		5,197		18,768
Allowance at end of period	$	238,047	$	79,376	$	317,423	$	136,766	$	76,717	$	213,483
Average total customer portfolio balance	$	1,219,794	$	216,433	$	1,436,227	$	1,362,790	$	195,471	$	1,558,261

(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 an increase in new customer mix and the impact of difficulties in collection efforts related to the implementation of our new loan management system during the fourth quarter of fiscal year 2020.

(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 October 31, 2020:


(in thousands)
Delinquency Bucket	2020		2019		2018		2017		Prior		Total		% of Total
Current	$	418,548	$	316,243	$	113,741	$	14,045	$	851	$	863,428	70.2	%
1-30	49,070		78,166		36,580		8,113		685		172,614		14.0	%
31-60	12,652		23,948		12,449		3,805		385		53,239		4.3	%
61-90	7,536		17,974		8,756		2,755		264		37,285		3.0	%
91+	19,328		50,445		25,437		8,026		920		104,156		8.5	%
Total	$	507,134	$	486,776	$	196,963	$	36,744	$	3,105	$	1,230,722	100.0	%