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 27, 2024, October 29, 2023, and October 30, 2022 was as follows:


	Retail Notes		Revolving
	& Financing		Charge		Wholesale		Total
	Leases		Accounts		Receivables		Receivables
2024
Allowance:
Beginning of year balance	$	114.9	$	20.4	$	11.1	$	146.4
Provision for credit losses*		228.8		51.6		18.2		298.6
Write-offs		(162.5)		(93.8)				(256.3)
Recoveries		11.6		29.4		.2		41.2
Translation adjustments		(.4)				(2.0)		(2.4)
End of year balance	$	192.4	$	7.6	$	27.5	$	227.5

Receivables:
End of year balance	$	35,574.7	$	4,538.8	$	14,114.1	$	54,227.6


2023
Allowance:
Beginning of year balance	$	95.4	$	21.9	$	11.1	$	128.4
Provision (credit) for credit losses*		67.6		21.2		(.2)		88.6
Write-offs		(60.8)		(44.4)		(.2)		(105.4)
Recoveries		12.9		21.8		.6		35.3
Translation adjustments		(.2)		(.1)		(.2)		(.5)
End of year balance	$	114.9	$	20.4	$	11.1	$	146.4

Receivables:
End of year balance	$	33,419.7	$	4,594.4	$	13,330.1	$	51,344.2


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	$	29,871.3	$	4,165.8	$	8,404.5	$	42,441.6

* Excludes provision (credit) for credit losses on unfunded commitments of $2.3, $(.1), and $(.9) for the years ended October 27, 2024, October 29, 2023, and October 30, 2022, respectively. The estimated credit losses related to unfunded commitments are recorded in “Accounts payable and accrued expenses.”

Schedule of Troubled Debt Restructurings

The following table includes Receivable contracts identified as troubled debt restructurings, which were primarily retail notes:


	2023		2022
Number of receivable contracts		149		199
Pre-modification balance	$	7.2	$	7.0
Post-modification balance		6.7		5.8

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:


	2024				2023				2022
	Dollars		Percent		Dollars		Percent		Dollars		Percent
Write-offs:
Retail notes & financing leases:
Agriculture and turf	$	(80.0)	(.28)	%	$	(31.7)	(.12)	%	$	(21.4)	(.09)	%
Construction and forestry		(82.5)	(1.44)			(29.1)	(.55)			(19.3)	(.39)
Total retail notes & financing leases		(162.5)	(.48)			(60.8)	(.20)			(40.7)	(.15)
Revolving charge accounts		(93.8)	(2.40)			(44.4)	(1.17)			(26.8)	(.77)
Wholesale receivables						(.2)				(.3)
Total write-offs		(256.3)	(.48)			(105.4)	(.23)			(67.8)	(.18)
Recoveries:
Retail notes & financing leases:
Agriculture and turf		8.4	.03			8.8	.03			10.2	.05
Construction and forestry		3.2	.06			4.1	.08			4.2	.09
Total retail notes & financing leases		11.6	.03			12.9	.04			14.4	.05
Revolving charge accounts		29.4	.75			21.8	.58			29.7	.86
Wholesale receivables		.2				.6	.01			.1
Total recoveries		41.2	.08			35.3	.08			44.2	.12
Total net write-offs	$	(215.1)	(.40)	%	$	(70.1)	(.15)	%	$	(23.6)	(.06)	%

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:


	October 27, 2024
	2024		2023		2022		2021		2020		Prior Years		Revolving		Total
Wholesale receivables:
Agriculture and turf
Current	$	640.7	$	161.6	$	29.5	$	6.2	$	1.0	$	.3	$	9,599.8	$	10,439.1
30-59 days past due		.2												4.3		4.5
60-89 days past due														4.2		4.2
90+ days past due		.1												10.1		10.2
Non-performing														35.3		35.3
Construction and forestry
Current		21.0		8.6		1.5		11.7		.1				3,557.0		3,599.9
30-59 days past due														8.1		8.1
60-89 days past due														5.1		5.1
90+ days past due														7.7		7.7
Non-performing
Total wholesale receivables	$	662.0	$	170.2	$	31.0	$	17.9	$	1.1	$	.3	$	13,231.6	$	14,114.1


	October 29, 2023
	2023		2022		2021		2020		2019		Prior Years		Revolving		Total
Wholesale receivables:
Agriculture and turf
Current	$	609.5	$	92.6	$	20.0	$	3.9	$	.7	$	159.9	$	9,270.1	$	10,156.7
30-59 days past due														18.5		18.5
60-89 days past due														21.8		21.8
90+ days past due														5.5		5.5
Non-performing														5.7		5.7
Construction and forestry
Current		19.4		2.5		19.9		.2		.1		75.2		2,987.6		3,104.9
30-59 days past due														4.3		4.3
60-89 days past due														5.5		5.5
90+ days past due														7.2		7.2
Non-performing
Total wholesale receivables	$	628.9	$	95.1	$	39.9	$	4.1	$	.8	$	235.1	$	12,326.2	$	13,330.1