XML 33 R22.htm IDEA: XBRL DOCUMENT
v3.21.2

Guarantee Arrangements | 9 Months Ended
--- | ---
Jun. 30, 2021
Guarantees [Abstract] |
Guarantee Arrangements |
1 4. | Guarantee Arrangements
Customers of the Company, from time to time, may fund purchases of the Company’s equipment through third-party finance companies. In certain instances, the Company may be requested to provide support for these arrangements through credit or residual value guarantees, by which the Company agrees to make payments to the finance companies in certain circumstances as further described below. Credit Guarantees: The Company is party to multiple agreements whereby at June 30, 2021 the Company guaranteed an aggregate of $780.8 million in indebtedness of customers. The Company estimated that its maximum loss exposure under these contracts at June 30, 2021 was $163.9 million. Terms of these guarantees coincide with the financing arranged by the customer and generally do not exceed five years. Under the terms of these agreements and upon the occurrence of certain events, the Company generally has the ability to, among other things, take possession of the underlying collateral. If the financial condition of the customers were to deteriorate and result in their inability to make payments, then loss provisions in excess of amounts provided for at inception may be required. Given the Company’s position as original equipment manufacturer and its knowledge of end markets, the Company, when called upon to fulfill a guarantee, generally has been able to liquidate the financed equipment at a minimal loss, if any, to the Company. While the Company does not expect to experience losses under these agreements that are materially in excess of the amounts reserved, it cannot provide any assurance that the financial condition of the third parties will not deteriorate resulting in the third parties’ inability to meet their obligations. In the event that this occurs, the Company cannot guarantee that the collateral underlying the agreements will be sufficient to avoid losses materially in excess of the amounts reserved. Any losses under these guarantees would generally be mitigated by the value of any underlying collateral, including financed equipment. During periods of economic weakness, collateral values generally decline and can contribute to higher exposure to losses. Residual Value Guarantees: The Company is party to multiple agreements whereby at June 30, 2021 the Company guaranteed to support an aggregate of $85.5 million of customer equipment value. The Company estimated that its maximum loss exposure under these contracts at June 30, 2021 was $14.3 million. Terms of these guarantees coincide with the financing arranged by the customer and generally do not exceed five years. Under the terms of these agreements, the Company guarantees that a piece of equipment will have a minimum residual value at a future date. If the counterparty is not able to recover the agreed upon residual value through sale, or alternative disposition, the Company is responsible for a portion of the shortfall. The Company is generally able to mitigate a portion of the risk associated with these guarantees by staggering the maturity terms of the guarantees, diversification of the portfolio and leveraging knowledge gained through the Company’s own experience in the used equipment markets. There can be no assurance the Company’s historical experience in used equipment markets will be indicative of future results. The Company’s ability to recover losses experienced from its guarantees may be affected by economic conditions in used equipment markets at the time of loss. During periods of economic weakness, residual values generally decline and can contribute to higher exposure to losses. Changes in the Company’s guarantee liabilities were as follows (in millions):
|  | Three Months Ended June 30, |  |  | Nine Months Ended June 30, |
|  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Balance at beginning of period |  | $ | 13.8 |  |  | $ | 16.2 |  |  | $ | 15.5 |  |  | $ | 15.8 |
Adoption of ASC 326 |  |  | — |  |  |  | — |  |  |  | (0.6 | ) |  |  | — |
Provision for new credit guarantees |  |  | 0.6 |  |  |  | 0.5 |  |  |  | 1.5 |  |  |  | 3.7 |
Changes for pre-existing guarantees, net |  |  | (0.2 | ) |  |  | (1.8 | ) |  |  | (0.4 | ) |  |  | (0.4 | )
Amortization of previous guarantees |  |  | (0.4 | ) |  |  | 0.2 |  |  |  | (2.3 | ) |  |  | (4.0 | )
Foreign currency translation |  |  | — |  |  |  | 0.1 |  |  |  | 0.1 |  |  |  | 0.1 |
Balance at end of period |  | $ | 13.8 |  |  | $ | 15.2 |  |  | $ | 13.8 |  |  | $ | 15.2 |
Due to the adoption of ASC 326, the portion of the guarantee liabilities that relates to current expected credit losses is now recognized separately and is recorded within “Other current liabilities” and “Other long-term liabilities” in the Company’s Condensed Consolidated Balance Sheets.

X
- References No definition available. + Details
Name: | us-gaap_GuaranteesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for each guarantee obligation, or each group of similar guarantee obligations, including (a) the nature of the guarantee, including its term, how it arose, and the events or circumstances that would require the guarantor to perform under the guarantee; (b) the maximum potential amount of future payments (undiscounted) the guarantor could be required to make under the guarantee; (c) the current carrying amount of the liability, if any, for the guarantor's obligations under the guarantee; and (d) the nature of any recourse provisions under the guarantee, and any assets held either as collateral or by third parties, and any relevant related party disclosure. Excludes disclosures about product warranties. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 460 -URI http://asc.fasb.org/topic&trid=2155896 + Details
Name: | us-gaap_GuaranteesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration