Allowance for Credit Losses and Credit Quality of Receivables (Tables)

12 Months Ended

Oct. 30, 2022

Allowance for Credit Losses and Credit Quality of Receivables

Analysis of the Allowance for Credit Losses and Investment in Receivables

An analysis of the allowance for credit losses and investment in Receivables at October 30, 2022, October 31, 2021, and November 1, 2020 was as follows (in millions of dollars):

	Retail Notes		Revolving
	& Financing		Charge		Wholesale		Total
	Leases		Accounts		Receivables		Receivables
2022
Allowance:
Beginning of year balance	$	96.5	$	20.8	$	11.7	$	129.0
Provision (credit) for credit losses*		26.1		(1.8)		.1		24.4
Write-offs		(40.7)		(26.8)		(.3)		(67.8)
Recoveries		14.4		29.7		.1		44.2
Translation adjustments		(.9)				(.5)		(1.4)
End of year balance	$	95.4	$	21.9	$	11.1	$	128.4
Receivables:
End of year balance	$	29,932.6	$	4,165.8	$	8,404.5	$	42,502.9

2021
Allowance:
Beginning of year balance	$	76.9	$	42.3	$	9.9	$	129.1
ASU No. 2016-13 adoption		32.5		(12.2)		(.6)		19.7
Provision (credit) for credit losses*		11.8		(17.0)		2.5		(2.7)
Write-offs		(36.7)		(27.8)		(.3)		(64.8)
Recoveries		11.6		35.5				47.1
Translation adjustments		.4				.2		.6
End of year balance	$	96.5	$	20.8	$	11.7	$	129.0
Receivables:
End of year balance	$	26,978.2	$	3,740.1	$	5,951.3	$	36,669.6

2020
Allowance:
Beginning of year balance	$	53.7	$	39.3	$	7.6	$	100.6
Provision (credit) for credit losses		66.2		25.1		(1.9)		89.4
Write-offs		(49.1)		(51.6)		(.9)		(101.6)
Recoveries		6.4		29.5		1.3		37.2
Translation adjustments		(.3)				3.8		3.5
End of year balance	$	76.9	$	42.3	$	9.9	$	129.1
Receivables:
End of year balance	$	22,636.6	$	3,827.4	$	7,093.3	$	33,557.3

*            Excludes provision (credit) for credit losses on unfunded commitments of $(.9) million and $1.8 million for the years ended October 30, 2022 and October 31, 2021, respectively. The estimated credit losses related to unfunded commitments are recorded in accounts payable and accrued expenses on the consolidated balance sheets.

Schedule of Troubled Debt Restructuring Modifications

The following table includes Receivable contracts identified as troubled debt restructurings, which were primarily retail notes (in millions of dollars):

	2022		2021		2020
Number of receivable contracts		199		326		468
Pre-modification balance	$	7.0	$	12.0	$	19.0
Post-modification balance		5.8		10.7		17.4

Total Write-offs and Recoveries, by Product, and as a Percentage of Average Balances Held

Total write-offs and recoveries, by product, and as a percentage of average balances held during the year, were as follows (in millions of dollars):

	2022				2021				2020
	Dollars		Percent		Dollars		Percent		Dollars		Percent
Write-offs:
Retail notes & financing leases:
Agriculture and turf	$	(21.4)	(.09)	%	$	(18.6)	(.09)	%	$	(15.2)	(.09)	%
Construction and forestry		(19.3)	(.39)			(18.1)	(.42)			(33.9)	(.94)
Total retail notes & financing leases		(40.7)	(.15)			(36.7)	(.15)			(49.1)	(.24)
Revolving charge accounts		(26.8)	(.77)			(27.8)	(.85)			(51.6)	(1.51)
Wholesale receivables		(.3)				(.3)				(.9)	(.01)
Total write-offs		(67.8)	(.18)			(64.8)	(.19)			(101.6)	(.31)
Recoveries:
Retail notes & financing leases:
Agriculture and turf		10.2	.05			9.2	.05			4.6	.03
Construction and forestry		4.2	.09			2.4	.06			1.8	.05
Total retail notes & financing leases		14.4	.05			11.6	.05			6.4	.03
Revolving charge accounts		29.7	.86			35.5	1.08			29.5	.86
Wholesale receivables		.1								1.3	.02
Total recoveries		44.2	.12			47.1	.14			37.2	.11
Total net write-offs	$	(23.6)	(.06)	%	$	(17.7)	(.05)	%	$	(64.4)	(.20)	%

Customer Receivables

Allowance for Credit Losses and Credit Quality of Receivables

Credit Quality Analysis

The credit quality analysis of Customer Receivables by year of origination was as follows (in millions of dollars):

	October 30, 2022
	2022		2021		2020		2019		2018		Prior Years		Revolving Charge Accounts		Total
Customer Receivables:
Agriculture and turf
Current	$	11,764.5	$	6,958.0	$	3,488.7	$	1,519.7	$	582.8	$	153.2	$	4,022.7	$	28,489.6
30-59 days past due		40.1		55.8		31.4		15.0		6.4		2.7		18.4		169.8
60-89 days past due		11.8		19.5		10.8		4.4		2.0		1.1		4.5		54.1
90+ days past due		.4		.2		.2										.8
Non-performing		24.7		38.4		29.2		13.7		11.2		10.2		7.8		135.2
Construction and forestry
Current		2,373.7		1,526.3		658.1		230.7		57.2		10.5		107.7		4,964.2
30-59 days past due		44.5		40.6		20.7		7.6		1.8		.6		3.1		118.9
60-89 days past due		18.1		11.4		6.0		3.0		.7		.1		1.0		40.3
90+ days past due		.3		1.3				1.4								3.0
Non-performing		19.3		51.2		27.6		15.4		5.5		2.9		.6		122.5
Total Customer Receivables	$	14,297.4	$	8,702.7	$	4,272.7	$	1,810.9	$	667.6	$	181.3	$	4,165.8	$	34,098.4

	October 31, 2021
	2021		2020		2019		2018		2017		Prior Years		Revolving Charge Accounts		Total
Customer Receivables:
Agriculture and turf
Current	$	11,318.1	$	5,719.1	$	2,842.5	$	1,431.0	$	582.8	$	119.9	$	3,620.9	$	25,634.3
30-59 days past due		34.7		47.5		24.2		13.7		5.9		2.9		13.1		142.0
60-89 days past due		12.8		17.4		8.4		5.1		2.4		.7		3.2		50.0
90+ days past due		.5		.5		.1		.2		.1						1.4
Non-performing		20.1		44.5		26.4		22.3		10.6		12.5		6.4		142.8
Construction and forestry
Current		2,356.4		1,198.5		573.5		215.6		42.5		5.4		92.3		4,484.2
30-59 days past due		36.6		33.0		21.1		5.8		2.0		.1		2.7		101.3
60-89 days past due		12.5		8.4		5.0		2.6		.5		.2		1.0		30.2
90+ days past due		.1		.4		.9				.1						1.5
Non-performing		21.9		50.0		33.9		15.1		6.3		2.9		.5		130.6
Total Customer Receivables	$	13,813.7	$	7,119.3	$	3,536.0	$	1,711.4	$	653.2	$	144.6	$	3,740.1	$	30,718.3

Wholesale Receivables

Allowance for Credit Losses and Credit Quality of Receivables

Credit Quality Analysis

The credit quality analysis of wholesale receivables by year of origination was as follows (in millions of dollars):

	October 30, 2022
	2022		2021		2020		2019		2018		Prior Years		Revolving		Total
Wholesale receivables:
Agriculture and turf
Current	$	381.3	$	62.7	$	25.0	$	3.8	$	.3	$	1.1	$	6,238.1	$	6,712.3
30+ days past due				.1										8.3		8.4
Non-performing														5.5		5.5
Construction and forestry
Current		4.8		28.2		1.4		.4		.1				1,633.8		1,668.7
30+ days past due														9.6		9.6
Non-performing
Total wholesale receivables	$	386.1	$	91.0	$	26.4	$	4.2	$	.4	$	1.1	$	7,895.3	$	8,404.5

	October 31, 2021
	2021		2020		2019		2018		2017		Prior Years		Revolving		Total
Wholesale receivables:
Agriculture and turf
Current	$	339.6	$	77.1	$	21.1	$	9.2	$	2.7	$	.4	$	4,233.4	$	4,683.5
30+ days past due														12.0		12.0
Non-performing														6.7		6.7
Construction and forestry
Current		39.4		4.0		3.4		.3						1,199.6		1,246.7
30+ days past due														2.4		2.4
Non-performing
Total wholesale receivables	$	379.0	$	81.1	$	24.5	$	9.5	$	2.7	$	.4	$	5,454.1	$	5,951.3