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FINANCING RECEIVABLES | 6 Months Ended
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Apr. 30, 2014
FINANCING RECEIVABLES |
FINANCING RECEIVABLES | (10) Past due balances of financing receivables still accruing finance income represent the total balance held (principal plus accrued interest) with any payment amounts 30 days or more past the contractual payment due date. Non-performing financing receivables represent loans for which the Company has ceased accruing finance income. These receivables are generally 120 days delinquent and the estimated uncollectible amount, after charging the dealer’s withholding account, has been written off to the allowance for credit losses. Finance income for non-performing receivables is recognized on a cash basis. Accrual of finance income is resumed when the receivable becomes contractually current and collections are reasonably assured. An age analysis of past due financing receivables that are still accruing interest and non-performing financing receivables in millions of dollars follows:
|  | April 30, 2014 |
|  | 30-59 Days Past Due |  | 60-89 Days Past Due |  | 90 Days or Greater Past Due |  | Total Past Due |
Retail Notes: |  |  |  |  |  |  |  |  |
Agriculture and turf |  | $ | 89 |  | $ | 31 |  |  | $ | 28 |  | $ | 148 |
Construction and forestry |  | 57 |  | 19 |  |  | 12 |  | 88 |
Other: |  |  |  |  |  |  |  |  |  |
Agriculture and turf |  | 24 |  | 13 |  |  | 17 |  | 54 |
Construction and forestry |  | 15 |  | 5 |  |  | 3 |  | 23 |
Total |  | $ | 185 |  | $ | 68 |  |  | $ | 60 |  | $ | 313 |
|  | Total Past Due |  | Total Non- Performing |  | Current |  | Total Financing Receivables |
Retail Notes: |  |  |  |  |  |  |  |  |
Agriculture and turf |  | $ | 148 |  | $ | 102 |  |  | $ | 19,027 |  | $ | 19,277 |
Construction and forestry |  | 88 |  | 14 |  |  | 2,113 |  | 2,215 |
Other: |  |  |  |  |  |  |  |  |  |
Agriculture and turf |  | 54 |  | 17 |  |  | 7,335 |  | 7,406 |
Construction and forestry |  | 23 |  | 4 |  |  | 1,088 |  | 1,115 |
Total |  | $ | 313 |  | $ | 137 |  |  | $ | 29,563 |  |  | 30,013 |
Less allowance for credit losses |  |  |  |  |  |  |  |  |  |  |  |  | 171 |
Total financing receivables - net |  |  |  |  |  |  |  |  |  |  |  | $ | 29,842 |
|  | October 31, 2013 |
|  | 30-59 Days Past Due |  | 60-89 Days Past Due |  | 90 Days or Greater Past Due |  | Total Past Due |
Retail Notes: |  |  |  |  |  |  |  |  |
Agriculture and turf |  | $ | 75 |  | $ | 26 |  |  | $ | 20 |  | $ | 121 |
Construction and forestry |  | 39 |  | 14 |  |  | 9 |  | 62 |
Other: |  |  |  |  |  |  |  |  |  |
Agriculture and turf |  | 28 |  | 9 |  |  | 5 |  | 42 |
Construction and forestry |  | 12 |  | 4 |  |  | 3 |  | 19 |
Total |  | $ | 154 |  | $ | 53 |  |  | $ | 37 |  | $ | 244 |
|  | Total Past Due |  | Total Non-Performing |  | Current |  | Total Financing Receivables |
Retail Notes: |  |  |  |  |  |  |  |  |
Agriculture and turf |  | $ | 121 |  | $ | 102 |  |  | $ | 18,942 |  | $ | 19,165 |
Construction and forestry |  | 62 |  | 12 |  |  | 1,921 |  | 1,995 |
Other: |  |  |  |  |  |  |  |  |  |
Agriculture and turf |  | 42 |  | 13 |  |  | 7,613 |  | 7,668 |
Construction and forestry |  | 19 |  | 3 |  |  | 1,109 |  | 1,131 |
Total |  | $ | 244 |  | $ | 130 |  |  | $ | 29,585 |  |  | 29,959 |
Less allowance for credit losses |  |  |  |  |  |  |  |  |  |  |  |  | 173 |
Total financing receivables - net |  |  |  |  |  |  |  |  |  |  |  | $ | 29,786 |
|  | April 30, 2013 |
|  | 30-59 Days Past Due |  | 60-89 Days Past Due |  | 90 Days or Greater Past Due |  | Total Past Due |
Retail Notes: |  |  |  |  |  |  |  |  |
Agriculture and turf |  | $ | 60 |  | $ | 25 |  |  | $ | 19 |  | $ | 104 |
Construction and forestry |  | 44 |  | 17 |  |  | 5 |  | 66 |
Other: |  |  |  |  |  |  |  |  |  |
Agriculture and turf |  | 22 |  | 10 |  |  | 7 |  | 39 |
Construction and forestry |  | 8 |  | 4 |  |  | 4 |  | 16 |
Total |  | $ | 134 |  | $ | 56 |  |  | $ | 35 |  | $ | 225 |
|  | Total Past Due |  | Total Non- Performing |  | Current |  | Total Financing Receivables |
Retail Notes: |  |  |  |  |  |  |  |  |
Agriculture and turf |  | $ | 104 |  | $ | 106 |  |  | $ | 16,973 |  | $ | 17,183 |
Construction and forestry |  | 66 |  | 11 |  |  | 1,666 |  | 1,743 |
Other: |  |  |  |  |  |  |  |  |  |
Agriculture and turf |  | 39 |  | 10 |  |  | 6,543 |  | 6,592 |
Construction and forestry |  | 16 |  | 4 |  |  | 1,171 |  | 1,191 |
Total |  | $ | 225 |  | $ | 131 |  |  | $ | 26,353 |  |  | 26,709 |
Less allowance for credit losses |  |  |  |  |  |  |  |  |  |  |  |  | 176 |
Total financing receivables - net |  |  |  |  |  |  |  |  |  |  |  | $ | 26,533 |
An analysis of the allowance for credit losses and investment in financing receivables in millions of dollars during the periods follows:
|  | Three Months Ended
|  | April 30, 2014
|  | Retail Notes |  | Revolving Charge Accounts |  | Other |  | Total
Allowance: |  |  |  |  |  |  |  |  |  |  |  |
Beginning of period balance |  | $ | 97 |  |  | $ | 40 |  |  | $ | 30 |  |  | $ | 167 |
Provision (credit) |  | 7 |  |  | 2 |  |  | (4 | ) |  | 5 |
Write-offs |  | (5 | ) |  | (6 | ) |  |  |  |  | (11 | )
Recoveries |  | 2 |  |  | 4 |  |  |  |  |  | 6 |
Translation adjustments |  | 4 |  |  |  |  |  |  |  |  | 4 |
End of period balance |  | $ | 105 |  |  | $ | 40 |  |  | $ | 26 |  |  | $ | 171 |
|  | Six Months Ended
|  | April 30, 2014
Allowance: |  |  |  |  |  |  |  |  |  |  |  |
Beginning of period balance |  | $ | 101 |  |  | $ | 41 |  |  | $ | 31 |  |  | $ | 173 |
Provision (credit) |  | 8 |  |  | 3 |  |  | (4 | ) |  | 7 |
Write-offs |  | (8 | ) |  | (11 | ) |  |  |  |  | (19 | )
Recoveries |  | 4 |  |  | 7 |  |  |  |  |  | 11 |
Translation adjustments |  |  |  |  |  |  |  | (1 | ) |  | (1 | )
End of period balance * |  | $ | 105 |  |  | $ | 40 |  |  | $ | 26 |  |  | $ | 171 |
Financing receivables: |  |  |  |  |  |  |  |  |  |  |  |
End of period balance |  | $ | 21,492 |  |  | $ | 2,215 |  |  | $ | 6,306 |  |  | $ | 30,013 |
Balance individually evaluated |  | $ | 21 |  |  | $ | 3 |  |  | $ | 11 |  |  | $ | 35 |
* Individual allowances were not significant.
|  | Three Months Ended
|  | April 30, 2013
|  | Retail Notes |  | Revolving Charge Accounts |  | Other |  | Total
Allowance: |  |  |  |  |  |  |  |  |  |  |  |
Beginning of period balance |  | $ | 108 |  |  | $ | 40 |  |  | $ | 27 |  |  | $ | 175 |
Provision (credit) |  | (3 | ) |  | 1 |  |  | 4 |  |  | 2 |
Write-offs |  | (3 | ) |  | (4 | ) |  | (1 | ) |  | (8 | )
Recoveries |  | 3 |  |  | 4 |  |  |  |  |  | 7 |
End of period balance |  | $ | 105 |  |  | $ | 41 |  |  | $ | 30 |  |  | $ | 176 |
|  | Six Months Ended
|  | April 30, 2013
Allowance: |  |  |  |  |  |  |  |  |  |  |  |
Beginning of period balance |  | $ | 110 |  |  | $ | 40 |  |  | $ | 27 |  |  | $ | 177 |
Provision (credit) |  | (3 | ) |  | 1 |  |  | 4 |  |  | 2 |
Write-offs |  | (7 | ) |  | (9 | ) |  | (1 | ) |  | (17 | )
Recoveries |  | 5 |  |  | 9 |  |  |  |  |  | 14 |
End of period balance * |  | $ | 105 |  |  | $ | 41 |  |  | $ | 30 |  |  | $ | 176 |
Financing receivables: |  |  |  |  |  |  |  |  |  |  |  |
End of period balance |  | $ | 18,926 |  |  | $ | 2,250 |  |  | $ | 5,533 |  |  | $ | 26,709 |
Balance individually evaluated |  | $ | 17 |  |  |  |  |  | $ | 39 |  |  | $ | 56 |
* Individual allowances were not significant. Financing receivables are considered impaired when it is probable the Company will be unable to collect all amounts due according to the contractual terms. Receivables reviewed for impairment generally include those that are either past due, or have provided bankruptcy notification, or require significant collection efforts. Receivables that are impaired are generally classified as non-performing. An analysis of the impaired financing receivables in millions of dollars follows:
|  | Recorded Investment |  | Unpaid Principal Balance |  | Specific Allowance |  | Average Recorded Investment
April 30, 2014 * |  |  |  |  |  |  |  |
Receivables with specific allowance **** |  | $ | 10 |  | $ | 10 |  | $ | 2 |  | $ | 11
Receivables without a specific allowance *** |  | 6 |  | 6 |  |  |  | 7
Total |  | $ | 16 |  | $ | 16 |  | $ | 2 |  | $ | 18
Agriculture and turf |  | $ | 14 |  | $ | 14 |  | $ | 2 |  | $ | 16
Construction and forestry |  | $ | 2 |  | $ | 2 |  |  |  | $ | 2
October 31, 2013 * |  |  |  |  |  |  |  |
Receivables with specific allowance ** |  | $ | 18 |  | $ | 18 |  | $ | 4 |  | $ | 19
Receivables without a specific allowance *** |  | 8 |  | 8 |  |  |  | 8
Total |  | $ | 26 |  | $ | 26 |  | $ | 4 |  | $ | 27
Agriculture and turf |  | $ | 23 |  | $ | 23 |  | $ | 4 |  | $ | 24
Construction and forestry |  | $ | 3 |  | $ | 3 |  |  |  | $ | 3
April 30, 2013 * |  |  |  |  |  |  |  |
Receivables with specific allowance ** |  | $ | 19 |  | $ | 19 |  | $ | 4 |  | $ | 20
Receivables without a specific allowance *** |  | 9 |  | 9 |  |  |  | 9
Total |  | $ | 28 |  | $ | 28 |  | $ | 4 |  | $ | 29
Agriculture and turf |  | $ | 24 |  | $ | 24 |  | $ | 4 |  | $ | 25
Construction and forestry |  | $ | 4 |  | $ | 4 |  |  |  | $ | 4
* | Finance income recognized was not material.
** | Primarily operating loans and retail notes.
*** | Primarily retail notes.
**** | Primarily operating loans.
A troubled debt restructuring is generally the modification of debt in which a creditor grants a concession it would not otherwise consider to a debtor that is experiencing financial difficulties. These modifications may include a reduction of the stated interest rate, an extension of the maturity dates, a reduction of the face amount or maturity amount of the debt, or a reduction of accrued interest. During the first six months of 2014, the Company identified 20 financing receivable contracts, primarily operating loans and retail notes, as troubled debt restructurings with aggregate balances of $1.0 million pre-modification and $.8 million post-modification. During the first six months of 2013, there were 67 financing receivable contracts, primarily retail notes, with $15.0 million pre-modification and $14.4 million post-modification balances. During these same periods, there were no significant troubled debt restructurings that subsequently defaulted and were written off. At April 30, 2014, the Company had no commitments to lend additional funds to borrowers whose accounts were modified in troubled debt restructurings.

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- Definition The entire disclosure for financing receivables. Examples of financing receivables include, but are not limited to, loans, trade accounts receivables, notes receivable, credit cards, and receivables relating to a lessor's right(s) to payment(s) from a lease other than an operating lease that is recognized as assets. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2196772 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section 55 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=32702940&loc=SL6953791-111525 + Details
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